Registration No. 33-64071
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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POST-EFFECTIVE AMENDMENT NO. 1 TO
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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FORTUNE BRANDS, INC.
(Exact Name of Registrant as Specified in Its Charter)
Delaware 13-3295276
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
1700 East Putnam Avenue, Old Greenwich, Connecticut 06870-0811
(Address of Principal Executive Offices) (Zip Code)
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Defined Contribution Plan of
Fortune Brands, Inc.
and Participating Operating Companies
(Full Title of the Plan)
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LOUIS F. FERNOUS, JR., Copy to:
Vice President and Secretary EDWARD P. SMITH, ESQ.
FORTUNE BRANDS, INC. CHADBOURNE & PARKE LLP
1700 East Putnam Avenue 30 Rockefeller Plaza
Old Greenwich, CT 06870-0811 New York, New York 10112
(Name and Address of Agent for Service)
Telephone number, including area code, of agent for service: (203) 698-5000
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Adding Form S-3 Prospectus, Adding Exhibits and Furnishing Consents
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EXPLANATORY NOTE
The Prospectus, prepared in accordance with the requirements of Form
S-8 and related to this Post-Effective Amendment No. 1 to the Registration
Statement (Registration No. 33-64071) ("Post-Effective Amendment No. 1"), will
be used in connection with the offer and sale of shares of Common Stock of the
Registrant to its employees pursuant to the Plan. This Post-Effective Amendment
No. 1 includes a Prospectus, prepared in accordance with the requirements of
Form S-3 (the "Reoffer Prospectus"), which may be used for the offer and sale by
certain officers and directors of the Registrant who may be deemed "affiliates"
of the Registrant, as that term is defined in Rule 405 under the Securities Act
of 1933, as amended, of securities registered hereunder. The Reoffer Prospectus
is also being filed as part of the Form S-8 Registration Statement (Registration
No. 333-51173 ) for the Non-Employee Director Stock Option Plan of Fortune
Brands, Inc. and as part of Post-Effective Amendment No. 1 to the Registration
Statement (Registration No. 33-58865) for the Fortune Brands Inc. 1990 Long-Term
Incentive Plan.
The Registrant changed its name from American Brands, Inc. to Fortune
Brands, Inc. on May 30, 1997.
<PAGE>
PROSPECTUS
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Fortune Brands, Inc.
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Common Stock
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This Prospectus relates to offers and sales by certain
officers and directors (the "Selling Stockholders") of Fortune Brands, Inc., a
Delaware corporation (the "Company"), who may be deemed to be "affiliates" of
the Company, as defined in Rule 405 under the Securities Act of 1933, as
amended, of shares of Common Stock of the Company that have been or may be
acquired by such persons upon exercise of nonqualified stock options granted
pursuant to the Non-Employee Director Stock Option Plan (the "Director Plan"),
or upon the exercise of incentive stock options or nonqualified stock options
granted pursuant to the 1990 Long-Term Incentive Plan, as amended (the "1990
Plan"), the 1986 Stock Option Plan, as amended (the "1986 Plan"), or the 1981
Stock Option Plan, as amended (the "1981 Plan"), of the Company (collectively,
the "Employee Plans"), or upon exercise of stock appreciation rights granted
under the Employee Plans in respect of options, or pursuant to performance
awards or restricted stock or other stock-based awards, or dividend equivalents
earned thereon, under the 1990 Plan, or that have been or may be acquired by or
for the account of such persons pursuant to the Defined Contribution Plan of
Fortune Brands, Inc. and Participating Operating Companies (the "Defined
Contribution Plan") as a result of employee or employer contributions under such
plan. See "SELLING STOCKHOLDERS". The shares that may be so acquired by such
persons pursuant to the Director Plan and the Employee Plans are herein referred
to as the "Award Shares" and the shares that have been or may be so acquired by
such persons pursuant to the Defined Contribution Plan are herein referred to as
the "DCP Shares".
The accompanying Annual Supplement to this Prospectus sets
forth the number of Award Shares and DCP Shares covered by this Prospectus.
Shares covered by this Prospectus may be offered and sold from
time to time by or on behalf of the Selling Stockholders through brokers on the
New York Stock Exchange or otherwise at the prices prevailing at the time of
such sales. No specified brokers or dealers have been designated by the Selling
Stockholders and no agreement has been entered into in respect of brokerage
commissions or for the exclusive or coordinated sale of any securities which may
be offered pursuant to this Prospectus. The net proceeds to the Selling
Stockholders will be the proceeds received by them upon such sales, less
brokerage commissions, if any. The Company will pay all expenses of preparing
and reproducing this Prospectus, but will not receive any of the proceeds from
sales by any of the Selling Stockholders.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION NOR HAS THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
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The date of this Prospectus is April 28, 1998
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No person has been authorized to give any information or to
make any representation not contained in this Prospectus in connection with the
offer contained herein and, if given or made, such information or representation
must not be relied upon as having been authorized. This Prospectus does not
constitute an offer of any securities other than the Common Stock that may be
offered hereby or an offer of the Common Stock to any person in any jurisdiction
where such offer would be unlawful. The delivery of the Prospectus or any sale
made through its use at any time does not imply that the information herein is
correct as of any time subsequent to its date.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy statements and other information with
the Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information filed by the Company can be inspected and
copied at the public reference facilities of the Commission at 450 Fifth Street,
N.W., Washington, D.C. 20549, and at the following Regional Offices of the
Commission: New York Regional Office, 7 World Trade Center, Suite 1300, New
York, New York, 10048 and Chicago Regional Office, Citicorp Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661-2511. Copies of such
material can be obtained from the Public Reference Section of the Commission at
450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed rates. The
Commission also maintains a World Wide Web Site that contains reports, proxy and
information statements and other information regarding registrants (including
the Company) that file electronically with the Commission (http://www.sec.gov).
The Company's Common Stock is listed on the New York Stock
Exchange and reports, proxy statements and other information concerning the
Company can be inspected and copied at the library of the New York Stock
Exchange at 20 Broad Street, New York, New York, 10005. The Company will
furnish, without charge, to any person to whom this Prospectus is delivered,
upon such person's written or oral request, a copy of any and all of the
information that has been incorporated by reference in the Registration
Statement of which this Prospectus is a part (not including exhibits to such
information unless such exhibits are specifically incorporated by reference into
such information). Any such request should by directed to the Secretary of the
Company at its principal executive offices, 1700 East Putnam Avenue, Old
Greenwich, Connecticut 06870 (telephone number (203) 698-5000).
THE COMPANY
The Company is a holding company with subsidiaries engaged in
the manufacture and sale of home products, office products, golf products and
distilled spirits.
The Company's principal executive offices are located at 1700
East Putnam Avenue, Old Greenwich, Connecticut 06870-0811 and its telephone
number is (203) 698-5000.
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RECENT DEVELOPMENTS
In recent years, the Company has been engaged in a strategy of
seeking to enhance the operations of its principal operating companies. Pursuant
to this strategy, in 1997 the Company completed five acquisitions of office
products, golf clubs and home products businesses for an aggregate cost of $92
million, including fees and expenses. In 1996, the Company acquired Cobra Golf
Incorporated, a leading manufacturer of golf clubs, for an aggregate cost of
$712 million in cash, including fees and expenses. In February 1998, the
Company's office products subsidiary completed the acquisition of the Apollo
Presentation Products group of companies, marketers of office and conference
presentation products, for $65 million.
The Company has also disposed of subsidiaries having
significant revenues but engaged in businesses considered by the Company to be
nonstrategic to its long-term operations. For example, in 1994, the Company sold
The American Tobacco Company, a subsidiary engaged in the domestic tobacco
business, to Brown & Williamson Tobacco Corporation (a subsidiary of B.A.T
Industries p.l.c.) for $1 billion. In 1995, the Company sold American Franklin
Company, whose subsidiaries were engaged in the life insurance business, to
American General Corporation for $1.17 billion. Most recently, on May 30, 1997,
the Company completed the spin-off of Gallaher Group Plc ("Gallaher Group") to
the Company's stockholders. Subsidiaries of Gallaher Group compete in the
international tobacco business.
In addition, a number of other nonstrategic businesses and
product lines have been sold. In 1997, one of the Company's office products
subsidiaries sold Sax Arts & Crafts, a marketer to schools of arts and crafts
supplies, and in 1998, a home products subsidiary sold assets relating to the
manufacture of door locks and related hardware. In 1995, U.K.-based Forbuoys
(retail distribution) and Prestige (housewares) were sold, both of which were
subsidiaries in the Gallaher Group.
The Company continues to pursue the above strategy and in
furtherance thereof explores other possible acquisitions in fields related to
its principal operating companies. The Company also cannot exclude the
possibility of acquisitions in other fields or further dispositions. Although no
assurance can be given as to whether or when any acquisitions or dispositions
will be consummated, if agreement with respect to any acquisitions were to be
reached, the Company might finance such acquisitions by issuance of additional
debt or equity securities. The additional debt from any acquisitions, if
consummated, would increase the Company's debt-to-equity ratio and such debt or
equity securities might, at least in the near term, have a dilutive effect on
earnings per share. The Company also continues to consider other corporate
strategies intended to enhance stockholder value. It cannot be predicted whether
or when any such strategies might be implemented or what the financial effect
thereof might be upon the Company's debt or equity securities.
SELLING STOCKHOLDERS
See the Annual Supplement for current information regarding
the Selling Stockholders, the shares of Common Stock of the Company beneficially
owned by them, the Award Shares and DCP Shares offered by them hereby and the
shares of Common Stock of the
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Company to be beneficially owned by them after completion of the offering. The
address of each of the Selling Stockholders is Fortune Brands, Inc., 1700 East
Putnam Avenue, Old Greenwich, Connecticut 06870.
DOCUMENTS INCORPORATED BY REFERENCE
For further information concerning the Company and its
subsidiaries see the Company's Annual Report on Form 10-K, its Proxy Statement
for the Annual Meeting of Stockholders and any other reports filed with the
Commission and described in the Annual Supplement. All reports and other
documents subsequently filed by the Company pursuant to Sections 13(a), 13(c),
14 or 15(d) of the Exchange Act, prior to the termination of the offering, shall
be deemed to be incorporated herein by reference and be a part hereof from the
date of filing of such reports and documents. For a description of the Common
Stock of the Company, see "DESCRIPTION OF CAPITAL STOCK" on pages 17-20 of the
Proxy Statement and Prospectus constituting a part of the Company's Registration
Statement on Form S-4 (Registration No. 33-635) incorporated by reference in the
Company's Application for Registration on Form 8-B dated January 27, 1986,
including the amendments to such description set forth in the Company's Current
Reports on Form 8-K dated June 19, 1986 and September 4, 1986, its Quarterly
Report on Form 10-Q for the quarterly period ended March 31, 1990 and its
Current Report on Form 8-K dated September 27, 1990. For a description of the
Company's Preferred Share Purchase Rights, see the Company's Application for
Registration of Securities on Form 8-A dated December 22, 1997. Each of the
documents listed in this paragraph is on file with the Commission and
incorporated herein by reference and made a part hereof. Registrant's Current
Reports on Form 8-K and Quarterly Report on Form 10-Q referred to in this
paragraph are maintained in Securities and Exchange Commission File No. 1-9076.
Any statement contained in a document incorporated or deemed
to be incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this Prospectus and the Registration Statement of
which it is a part to the extent that a statement contained herein or in any
subsequently filed document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any statement modified
or superseded shall not be deemed, except as so modified or superseded, to
constitute part of this Prospectus or such Registration Statement.
EXPERTS
The consolidated financial statements and financial statement
schedule included or incorporated by reference in the Company's Annual Report on
Form 10-K for the fiscal year ended December 31, 1997, incorporated herein by
reference, have been incorporated herein by reference in reliance on the report
of Coopers & Lybrand L.L.P., independent accountants, given upon the authority
of that firm as experts in accounting and auditing.
ADDITIONAL INFORMATION
The Prospectus does not contain all the information set forth
in the Registration Statement, or amendments thereto, certain portions of which
have been omitted pursuant to the
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Commission's rules and regulations. The information so omitted may be obtained
from the Commission's principal office in Washington, D.C., upon payment of the
fees prescribed by the Commission.
The Delaware General Corporation Law and the By-laws of the
Company provide for indemnification of the Company's officers and directors, who
are also covered by certain insurance policies maintained by the Company.
Insofar as indemnification for liabilities arising under the Securities Act of
1933, as amended, may be permitted to directors, officers or persons controlling
the Company pursuant to the foregoing provisions, the Company has been informed
that in the opinion of the Commission such indemnification is against public
policy as expressed in the Securities Act of 1933, as amended, and is therefore
unenforceable.
5
<PAGE>
1998 SUPPLEMENT
To Prospectus for Offers and
Sales of Common Stock of
Fortune Brands, Inc.
By Certain Selling Stockholders
This Supplement dated April 28, 1998 to the Prospectus dated April 28,
1998 relating to offers and sales of Award Shares and DCP Shares by certain
Selling Stockholders of Fortune Brands, Inc. contains certain current
information that may change from year to year. The Supplement will be updated
annually and will be delivered to each Selling Stockholder. Each current Annual
Supplement should be kept with the Prospectus in the Selling Stockholder's
important papers. Selling Stockholders who received the April 28, 1998
Prospectus will not be sent additional copies of the Prospectus in subsequent
years unless the information in the Prospectus is required to be amended or
unless a Selling Stockholder requests an additional copy by writing to the
Secretary, Fortune Brands, Inc., 1700 East Putnam Avenue, Old Greenwich,
Connecticut 06870. Capitalized terms used in this Supplement have the meanings
set forth in the Prospectus.
1. Date. The date of this Supplement is April 28, 1998.
2. Information Regarding Selling Stockholders and Award Shares and DCP
Shares Covered by the Prospectus. The Prospectus covers 3,877,600 Award Shares
that have been or may be acquired upon exercise of incentive stock options or
nonqualified stock options granted pursuant to the Employee Plans and the
Director Plan, or upon exercise of stock appreciation rights granted under the
Employee Plans in respect of options, or pursuant to performance awards, awards
of restricted stock or other stock-based awards, and dividend equivalents earned
thereon, under the 1990 Plan, and held by the Selling Stockholders as of
February 12, 1998 and 50,414 DCP Shares that have been or may be acquired
pursuant to the Defined Contribution Plan, and held on December 31, 1997 by the
Trustee of the Defined Contribution Plan.
There are set forth in the following table opposite the name of each of
the Selling Stockholders (1) under the heading "Shares of Common Stock
beneficially owned", the shares of Common Stock of the Company beneficially
owned by the Selling Stockholder on February 12, 1998 (except, as stated in Note
(c) below, beneficial ownership is disclaimed as to certain shares), including
shares of Common Stock (if any) of which the Selling Stockholder had the right
on such date to acquire beneficial ownership pursuant to the exercise on or
before April 13, 1998 of options granted by the Company, plus the number (if
any) of shares of Common Stock held on December 31, 1997 by the Trustee of the
Defined Contribution Plan that is equivalent as of that date to the Selling
Stockholder's undivided proportionate beneficial interest in all such shares;
(2) under the heading "DCP Shares", the number (if any) of shares of Common
Stock held on December 31, 1997 by the Trustee of the Defined Contribution Plan
that is equivalent as of that date to the Selling Stockholder's undivided
proportionate beneficial interest in all such shares and offered by the
Prospectus; (3) under the heading "Award Shares acquired or which may be
acquired and offered", the shares of Common Stock which have been acquired
pursuant to performance awards, awards of restricted stock or other stock-based
awards, and dividend equivalents earned thereon, if any, or upon the exercise of
options and stock appreciation rights, or may be acquired by the Selling
Stockholder pursuant to performance awards or other stock-based awards, and
dividend equivalents earned thereon, if any, or upon the exercise of options
<PAGE>
and stock appreciation rights outstanding as of February 12, 1998 and offered by
the Prospectus; and (4) under the heading "Shares of Common Stock to be owned
after completion of the offering", the shares of Common Stock to be beneficially
owned by the Selling Stockholder after completion of the offering, based on the
number of shares owned on February 12, 1998. The information as to security
holdings is based on information received by the Company from the Selling
Stockholders, from the Compensation and Stock Option Committee, the Nominating
and Corporate Governance Committee and the Corporate Employee Benefits Committee
of the Company, and from the Trustee of the Defined Contribution Plan, and has
been adjusted to reflect (i) the spin-off of Gallaher Group Plc, effective May
30, 1997 and (ii) two-for-one stock splits in the form of 100% stock dividends,
at a rate of one additional share of Common Stock for each share of Common Stock
issued, effective September 10, 1986 and October 9, 1990, respectively. Shares
of Common Stock have attached thereto certain preferred stock purchase rights
distributed by the Company as a dividend on December 24, 1997.
<TABLE>
<CAPTION>
(3) (4)
Award Shares of
Shares Common
(1) acquired or Stock
Shares of which to be
Common may be owned
Present principal Stock (2) acquired after
positions or beneficially DCP and completion
offices with the owned Shares offered of offering
Selling Stockholder Company or affiliates (a)(b)(c) (a) (b)(d) (c)
- ----------------------------- ------------------------- ------------ --------- ----------- -------------
<S> <C> <C> <C> <C> <C>
Eugene R. Anderson......... Director 10,082 0 3,217 10,082
Patricia O. Ewers.......... Director 1,782 0 3,217 1,782
Thomas C. Hays............. Director; Chairman of 979,170 9,875 1,160,880 30,710
the Board and Chief
Executive Officer
John W. Johnstone, Jr. .... Director 2,482 0 3,217 2,482
Wendell J. Kelley.......... Director 4,082 0 0 4,082
Sidney Kirschner........... Director 2,382 0 0 2,382
Gordon R. Lohman........... Director 1,500 0 3,217 1,500
John T. Ludes.............. Director; President and 557,711 3,576 654,342 16,267
Chief Operating
Officer
Charles H. Pistor, Jr...... Director 4,482 0 0 4,482
Anne M. Tatlock............ Director 2,000 0 3,217 2,000
John W. Thompson........... Director 1,305 0 3,217 1,305
Peter M. Wilson............ Director 2,140 0 0 2,140
</TABLE>
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<TABLE>
<CAPTION>
(3) (4)
Award Shares of
Shares Common
(1) acquired or Stock
Shares of which to be
Common may be owned
Present principal Stock (2) acquired after
positions or beneficially DCP and completion
offices with the owned Shares offered of offering
Selling Stockholder Company or affiliates (a)(b)(c) (a) (b)(d) (c)
- ----------------------------- ------------------------- ------------ --------- ----------- -------------
<S> <C> <C> <C> <C> <C>
Dudley L. Bauerlein, Jr.... Senior Vice President 246,535 14,408 276,439 14,408
and Chief Financial
Officer
Louis F. Fernous, Jr....... Vice President and 132,654 0 145,058 10,800
Secretary
Mark Hausberg.............. Vice President and 63,042 872 83,492 1,272
Treasurer
Gilbert L. Klemann, II..... Executive Vice 319,555 2,827 388,762 2,829
President - Strategic
and Legal Affairs
Anne C. Linsdau............ Vice President - 0 0 14,000 0
Human Resources
Charles H. McGill.......... Senior Vice President - 84,738 595 125,557 595
Corporate Development
Steven C. Mendenhall....... Senior Vice President 181,825 4,735 224,968 4,735
Chief Administrative
Officer
Craig P. Omtvedt........... Senior Vice President 88,214 1,822 125,153 1,822
and Chief Accounting
Officer
Mark A. Roche.............. Vice President and 141,481 4,597 174,434 4,597
General Counsel
Robert J. Rukeyser......... Senior Vice President - 437,546 7,107 485,213 7,507
Corporate Affairs
</TABLE>
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* Positions are those with the Company, unless otherwise indicated. Each
of the Selling Stockholders has been a director or officer of the Company or a
subsidiary of the Company for the past three years, except for Mr. Omtvedt, who
was Vice President - Deputy Controller and Chief Internal Auditor of the Company
from January 1, 1996 through December 31, 1996, was Vice President and Chief
Accounting Officer from January 1, 1997 through December 31, 1997
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and has been Senior Vice President and Chief Accounting Officer since January 1,
1998; and Mr. Roche, who was Vice President and Associate General Counsel of the
Company from January 1, 1996 through December 31, 1997 and has been Vice
President and General Counsel since January 1, 1998.
(a) The numbers of shares attributable to Company contributions under the
Defined Contribution Plan included in the numbers shown in Columns (1) and (2)
are as follows: Dudley L. Bauerlein, Jr., 12,502; Mark Hausberg, 872; Thomas C.
Hays, 2,672; Gilbert L. Klemann, II, 2,272; John T. Ludes, 3,089; Charles H.
McGill, 404; Steven C. Mendenhall, 2,444; Craig P. Omtvedt, 993; Mark A. Roche,
3,170; Robert J. Rukeyser, 6,275. The number of shares attributable to employee
contributions under such Plan included in the numbers shown in Columns (1) and
(2) are as follows: Dudley L. Bauerlein, Jr., 1,906; Thomas C. Hays, 7,203;
Gilbert L. Klemann, II, 555; John T. Ludes, 487; Charles H. McGill, 191; Steven
C. Mendenhall, 2,291; Craig P. Omtvedt, 829; Mark A. Roche, 1,427; and Robert J.
Rukeyser, 832.
(b) The numbers of shares of which the Selling Stockholders had the right
to acquire beneficial ownership pursuant to the exercise on or before April 13,
1998 of options granted by the Company included in the numbers shown in Columns
(1) and (3) are as follows: Dudley L. Bauerlein, Jr., 214,963; Louis F. Fernous,
Jr., 109,402; Mark Hausberg, 60,170; Thomas C. Hays, 827,503; Gilbert L.
Klemann, II, 307,058; John T. Ludes, 505,854; Charles H. McGill, 81,730; Steven
C. Mendenhall, 157,348; Craig P. Omtvedt, 86,392; Mark A. Roche, 135,234; and
Robert J. Rukeyser, 393,614. Inclusion of such shares does not constitute an
admission by any Selling Stockholder that he is the beneficial owner of such
shares.
(c) To the best of the Company's knowledge, each Selling Stockholder has
sole voting and investment power with respect to shares shown after his name in
Columns (1), (2) and (4) above, other than with respect to the shares listed in
Note (b) above and except as follows: Mr. Hays shares voting and investment
power as a co-trustee of various family trusts with respect to 5,107 shares and
with respect to which he disclaims beneficial ownership and Mr. Hays has no
voting or investment power with respect to 4,000 shares held in trust for the
benefit of his wife and with respect to which he disclaims beneficial ownership;
Mr. Ludes has no voting or investment power with respect to 12,691 shares held
in trust for the benefit of his wife and with respect to which shares he
disclaims beneficial ownership; Mr. Pistor shares voting and investment power
with his wife with respect to 2,400 shares; Mr. Fernous has no voting and
investment power with respect to 10,800 shares held by his wife and with respect
to which he disclaims beneficial ownership; and Mr. Hausberg shares voting and
investment power with his wife with respect to 400 shares. The Trustee of the
Defined Contribution Plan has agreed to vote the shares it holds in the Trust in
accordance with instructions received from members of the Plan and shares as to
which instructions are not received are voted by the Trustee proportionally in
the same manner as shares as to which it has received instructions.
(d) The numbers of shares in Column (3) include shares covered by
performance awards granted under the 1990 Plan if the maximum performance goals
to which such awards relate are met for the performance periods 1996-1998,
1997-1999 and 1998-2000. The number of shares of Common Stock so covered are as
follows: Dudley L. Bauerlein, Jr., 22,312; Louis F. Fernous, Jr., 11,204; Mark
Hausberg, 10,422; Thomas C. Hays, 105,420; Gilbert L. Klemann, II, 33,836; Anne
C. Linsdau, 2,700; John T. Ludes, 56,398; Charles H. McGill, 20,414; Steven C.
Mendenhall, 23,878; Craig P. Omtvedt, 16,761; Mark A. Roche, 17,550; and Robert
J. Rukeyser, 27,674. Inclusion of such shares does not constitute an admission
by any Selling Stockholder that he is the beneficial owner of such shares.
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<PAGE>
3. Market Price. The closing price per share of Common Stock of the
Company on the New York Stock Exchange Composite Transactions on April 23, 1998
was $37.75.
4. Documents Incorporated by Reference. For further information concerning
the Company and its subsidiaries, see the Company's Annual Report on Form 10-K
for the fiscal year ended December 31, 1997, which incorporates by reference
certain information, including the Company's Consolidated Financial Statements
contained in the Company's 1997 Annual Report to Stockholders, and see also its
Proxy Statement for the Annual Meeting of Stockholders to be held on April 28,
1998, and its Current Reports on Form 8-K dated January 12, January 23, February
10, February 20, March 2, March 4, April 1, and April 22, 1998. Each of the
foregoing is on file with the Securities and Exchange Commission.
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<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 6. Indemnification of Directors and Officers.
Section 145 of the General Corporation Law of Delaware provides in part
as follows:
"(a) A corporation shall have power to indemnify any person who
was or is a party or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than an action by or in
the right of the corporation) by reason of the fact that the person is
or was a director, officer, employee or agent of the corporation, or is
or was serving at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture,
trust or other enterprise, against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and reasonably
incurred by the person in connection with such action, suit or
proceeding if the person acted in good faith and in a manner the person
reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had
no reasonable cause to believe the person's conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its
equivalent, shall not, of itself, create a presumption that the person
did not act in good faith and in a manner which the person reasonably
believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had
reasonable cause to believe that the person's conduct was unlawful.
"(b) A corporation shall have power to indemnify any person who
was or is a party or is threatened to be made a party to any threatened,
pending or completed action or suit by or in the right of the
corporation to procure a judgment in its favor by reason of the fact
that the person is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise against expenses
(including attorneys' fees) actually and reasonably incurred by the
person in connection with the defense or settlement of such action or
suit if the person acted in good faith and in a manner the person
reasonably believed to be in or not opposed to the best interests of the
corporation and except that no indemnification shall be made in respect
of any claim, issue or matter as to which such person shall have been
adjudged to be liable to the corporation unless and only to the extent
that the Court of Chancery or the court in which such action or suit was
brought shall determine upon application that, despite the adjudication
of liability but in view of all the circumstances of the case, such
person is fairly and reasonably entitled to indemnity for such expenses
which the Court of Chancery or such other court shall deem proper.
"(c) To the extent that a present or former director or officer
of a corporation has been successful on the merits or otherwise in
defense of any action, suit or proceeding referred to in subsections (a)
and (b) of this section, or in defense of any claim, issue or matter
therein, such person shall be indemnified against expenses (including
attorneys' fees) actually and reasonably incurred by such person in
connection therewith.
II-1
<PAGE>
"(d) Any indemnification under subsections (a) and (b) of this
section (unless ordered by a court) shall be made by the corporation
only as authorized in the specific case upon a determination that
indemnification of the present or former director, officer, employee or
agent is proper in the circumstances because the person has met the
applicable standard of conduct set forth in subsections (a) and (b) of
this section. Such determination shall be made, with respect to a person
who is a director or officer at the time of such determination, (1) by a
majority vote of the directors who are not parties to such action, suit
or proceeding, even though less than a quorum, or (2) by a committee of
such directors designated by majority vote of such directors, even
though less than a quorum, or (3) if there are no such directors, or if
such directors so direct, by independent legal counsel in a written
opinion, or (4) by the stockholders.
"(e) Expenses (including attorneys' fees) incurred by an
officer or director in defending any civil, criminal, administrative or
investigative action, suit or proceeding may be paid by the corporation
in advance of the final disposition of such action, suit or proceeding
upon receipt of an undertaking by or on behalf of such director or
officer to repay such amount if it shall ultimately be determined that
such person is not entitled to be indemnified by the corporation as
authorized in this section. Such expenses (including attorneys' fees)
incurred by former directors and officers or other employees and agents
may be so paid upon such terms and conditions, if any, as the
corporation deems appropriate.
"(f) The indemnification and advancement of expenses provided
by, or granted pursuant to, the other subsections of this section shall
not be deemed exclusive of any other rights to which those seeking
indemnification or advancement of expenses may be entitled under any
bylaw, agreement, vote of stockholders or disinterested directors or
otherwise, both as to action in such person's official capacity and as
to action in another capacity while holding such office.
"(g) A corporation shall have power to purchase and maintain
insurance on behalf of any person who is or was a director, officer,
employee or agent of the corporation, or is or was serving at the
request of the corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other
enterprise against any liability asserted against such person and
incurred by such person in any such capacity, or arising out of such
person's status as such, whether or not the corporation would have the
power to indemnify such person against such liability under this
section.
"(h) For purposes of this section, references to 'the
corporation' shall include, in addition to the resulting corporation,
any constituent corporation (including any constituent of a constituent)
absorbed in a consolidation or merger which, if its separate existence
had continued, would have had power and authority to indemnify its
directors, officers, and employees or agents, so that any person who is
or was a director, officer, employee or agent of such constituent
corporation, or is or was serving at the request of such constituent
corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise,
shall stand in the same position under this section with respect to the
resulting or surviving corporation as such person would have with
respect to such constituent corporation if its separate existence had
continued.
"(i) For purposes of this section, references to 'other
enterprises' shall include employee benefit plans; references to 'fines'
shall include any excise taxes
II-2
<PAGE>
assessed on a person with respect to any employee benefit plan; and
references to 'serving at the request of the corporation' shall include
any service as a director, officer, employee or agent of the corporation
which imposes duties on, or involves services by, such director,
officer, employee, or agent with respect to an employee benefit plan,
its participants or beneficiaries; and a person who acted in good faith
and in a manner such person reasonably believed to be in the interest of
the participants and beneficiaries of an employee benefit plan shall be
deemed to have acted in a manner 'not opposed to the best interests of
the corporation' as referred to in this section.
"(j) The indemnification and advancement of expenses provided
by, or granted pursuant to, this section shall, unless otherwise
provided when authorized or ratified, continue as to a person who has
ceased to be a director, officer, employee or agent and shall inure to
the benefit of the heirs, executors and administrators of such a person.
"(k) The Court of Chancery is hereby vested with exclusive
jurisdiction to hear and determine all actions for advancement of
expenses or indemnification brought under this section or under any
bylaw, agreement, vote of stockholders or disinterested directors, or
otherwise. The Court of Chancery may summarily determine a corporation's
obligation to advance expenses (including attorneys' fees)."
Article XIII of Registrant's By-laws provides as follows:
"Section 1. (A) Each person (an 'indemnitee') who was or is made or
threatened to be made a party to or was or is involved (as a witness or
otherwise) in any action, suit or proceeding, whether civil, criminal,
administrative or investigative (hereinafter a 'proceeding'), by reason of the
fact that he or she or a person of whom he or she is the legal representative
was or is a director, officer or employee of [Registrant] or was or is serving
at the request of [Registrant] as a director, officer, employee or agent of
another corporation or of a partnership, joint venture, trust or other
enterprise, including service with respect to employee benefit plans, whether
the basis of such proceeding was or is alleged action in an official capacity as
a director, officer, employee or agent or in any other capacity while serving as
a director, officer, employee or agent, shall be indemnified and held harmless
by [Registrant] to the fullest extent permitted by the General Corporation Law
of the State of Delaware as the same exists or may hereafter be amended (but, in
the case of any such amendment, only to the extent that such amendment permits
[Registrant] to provide broader indemnification rights than said law permitted
[Registrant] to provide prior to such amendment), against all expense, liability
and loss (including attorneys' fees and retainers therefor, judgments, fines,
excise taxes or penalties under the Employee Retirement Income Security Act of
1974, as amended, and amounts paid in settlement) reasonably incurred or
suffered by such person in connection therewith and such indemnification shall
continue as to a person who has ceased to be a director, officer, employee or
agent and shall inure to the benefit of his or her heirs, executors and
administrators; provided, however, that except as provided in Section 3 of this
Article XIII with respect to proceedings seeking to enforce rights to
indemnification, [Registrant] shall indemnify any such person seeking
indemnification in connection with a proceeding (or part thereof) initiated by
such person only if such proceeding (or part thereof) was authorized by the
Board of Directors of [Registrant].
(B) The right to indemnification conferred in this Article XIII is and
shall be a contract right. The right to indemnification conferred in this
Article XIII shall include the right to be paid by [Registrant] the expenses
(including attorneys' fees and retainers
II-3
<PAGE>
therefor) reasonably incurred in connection with any such proceeding in advance
of its final disposition, such advances to be paid by [Registrant] within 20
days after the receipt by [Registrant] of a statement or statements from the
indemnitee requesting such advance or advances from time to time; provided,
however, that if the General Corporation Law of the State of Delaware requires,
the payment of such expenses incurred by a director or officer in his or her
capacity as a director or officer (and not in any other capacity in which
service was or is rendered by such person while a director or officer,
including, without limitation, service to an employee benefit plan) in advance
of the final disposition of a proceeding, shall be made only upon delivery to
[Registrant] of an undertaking by or on behalf of such director or officer, to
repay all amounts so advanced if it shall ultimately be determined that such
director or officer is not entitled to be indemnified under this Article XIII or
otherwise.
"Section 2. (A) To obtain indemnification under this Article XIII, an
indemnitee shall submit to [Registrant] a written request, including therein or
therewith such documentation and information as is reasonably available to the
indemnitee and is reasonably necessary to determine whether and to what extent
the indemnitee is entitled to indemnification. Upon written request by an
indemnitee for indemnification pursuant to the first sentence of this Section
2(A), a determination, if required by applicable law, with respect to the
indemnitee's entitlement thereto shall be made as follows: (1) if requested by
the indemnitee, by Independent Counsel (as hereinafter defined), or (2) if no
request is made by the indemnitee for a determination by Independent Counsel,
(a) by the Board of Directors by a majority vote of a quorum consisting of
Disinterested Directors (as hereinafter defined), or (b) if a quorum of the
Board of Directors consisting of Disinterested Directors is not obtainable or,
even if obtainable, such quorum of Disinterested Directors so directs, by
Independent Counsel in a written opinion to the Board of Directors, a copy of
which shall be delivered to the indemnitee, or (c) by the stockholders of
[Registrant]. In the event the determination of entitlement to indemnification
is to be made by Independent Counsel at the request of the indemnitee, the
Independent Counsel shall be selected by the indemnitee unless the indemnitee
shall request that such selection be made by the Board of Directors, in which
event the Independent Counsel shall be selected by the Board of Directors. If it
is so determined that the indemnitee is entitled to indemnification, payment to
the indemnitee shall be made within 10 days after such determination.
(B) In making a determination with respect to entitlement to
indemnification hereunder, the person, persons or entity making such
determination shall presume that the indemnitee is entitled to indemnification
under this Article XIII, and [Registrant] shall have the burden of proof to
overcome that presumption in connection with the making by any person, persons
or entity of any determination contrary to that presumption.
"Section 3.(A) If a claim under Section 1 of this Article XIII is not
paid in full by [Registrant] within 30 days after a written claim pursuant to
Section 2(A) of this Article XIII has been received by [Registrant], or if an
advance is not made within 20 days after a request therefor pursuant to Section
1(B) of this Article XIII has been received by [Registrant], the indemnitee may
at any time thereafter bring suit (or, at the indemnitee's option, an
arbitration proceeding before a single arbitrator pursuant to the rules of the
American Arbitration Association) against [Registrant] to recover the unpaid
amount of the claim or the advance and, if successful in whole or in part, the
indemnitee shall be entitled to be paid also the expense of prosecuting such
claim. It shall be a defense to any such suit or proceeding (other than a suit
or proceeding brought to enforce a claim for expenses incurred in connection
with any proceeding in advance of its final disposition where the required
undertaking, if any is required, has been tendered to [Registrant]) that the
indemnitee has not met the standards of conduct which make it permissible under
the
II-4
<PAGE>
General Corporation Law of the State of Delaware for [Registrant] to indemnify
the indemnitee for the amount claimed or that such indemnification otherwise is
not permitted under the General Corporation Law of the State of Delaware, but
the burden of proving such defense shall be on [Registrant].
(B) Neither the failure of [Registrant] (including its Board of
Directors, Independent Counsel or stockholders) to have made a determination
prior to the commencement of such action that indemnification of the indemnitee
is proper in the circumstances because he or she has met the applicable standard
of conduct set forth in the General Corporation Law of the State of Delaware,
nor an actual determination by [Registrant] (including its Board of Directors,
Independent Counsel or stockholders) that the indemnitee has not met such
applicable standard of conduct, shall be a defense to the action or create a
presumption that the indemnitee has not met the applicable standard of conduct.
(C) If a determination shall have been made pursuant to Section 2(A) of
this Article XIII that the indemnitee is entitled to indemnification,
[Registrant] shall be bound by such determination in any judicial proceeding or
arbitration commenced pursuant to paragraph (A) of this Section 3.
(D) [Registrant] shall be precluded from asserting in any judicial
proceeding or arbitration commenced pursuant to paragraph (A) of this Section 3
that the procedures and presumptions of this Article XIII are not valid, binding
and enforceable and shall stipulate in any such court or before any such
arbitrator that [Registrant] is bound by all the provisions of this Article
XIII.
"Section 4. The right to indemnification and the payment of expenses
incurred in connection with a proceeding in advance of its final disposition
conferred in this Article XIII shall not be exclusive of any other right which
any person may have or hereafter acquire under any statute, provision of the
Certificate of Incorporation, By-laws, agreement, vote of stockholders or
Disinterested Directors or otherwise.
"Section 5. [Registrant] may maintain insurance, at its expense, to
protect itself and any director, officer, employee or agent of [Registrant] or
another corporation, partnership, joint venture, trust or other enterprise
against any expense, liability or loss, whether or not [Registrant] would have
the power to indemnify such person against such expense, liability or loss under
the General Corporation Law of the State of Delaware. To the extent that
[Registrant] maintains any policy or policies providing such insurance, each
such director, officer or employee, and each such agent to which rights to
indemnification have been granted as provided in Section 6 of this Article XIII,
shall be covered by such policy or policies in accordance with its or their
terms to the maximum extent of the coverage thereunder for any such director,
officer, employee or agent.
"Section 6. [Registrant] may, to the extent authorized from time to
time by the Board of Directors, grant rights to indemnification, and rights to
be paid by [Registrant] the expenses incurred in connection with any proceeding
in advance of its final disposition, to any agent of [Registrant] to the fullest
extent of the provisions of this Article XIII with respect to the
indemnification and advancement of expenses of directors, officers and employees
of [Registrant].
"Section 7. If any provision or provisions of this Article XIII shall
be held to be invalid, illegal or unenforceable for any reason whatsoever: (A)
the validity, legality and enforceability of the remaining provisions of this
Article XIII (including without limitation, each portion of any Section of this
Article XIII containing any such provision held to be
II-5
<PAGE>
invalid, illegal or unenforceable, that is not itself invalid, illegal or
unenforceable) shall not in any way be affected or impaired thereby; and (B) to
the fullest extent possible, the provisions of this Article XIII (including,
without limitation, each portion of any Section of this Article XIII containing
any such provision held to be invalid, illegal or unenforceable) shall be
construed so as to give effect to the intent manifested by the provision held
invalid, illegal or unenforceable.
"Section 8. For purposes of this Article XIII:
(A) 'Disinterested Director' means a director of [Registrant] who is
not and was not a party to the matter in respect of which indemnification is
sought by the indemnitee.
(B) 'Independent Counsel' means a law firm, or a member of a law firm,
that is experienced in matters of corporation law and neither presently is, nor
in the past five years has been, retained to represent: (1) [Registrant] or the
indemnitee in any matter material to either such party, or (2) any other party
to the matter giving rise to a claim for indemnification. Notwithstanding the
foregoing, the term 'Independent Counsel' shall not include any person who,
under the applicable standards of professional conduct then prevailing, would
have a conflict of interest in representing either [Registrant] or the
indemnitee in an action to determine the indemnitee's rights under this Article
XIII.
"Section 9. Any notice, request or other communication required or
permitted to be given to [Registrant] under this Article XIII shall be in
writing and either delivered in person or sent by telecopy, telex, telegram or
certified or registered mail, postage prepaid, return receipt requested, to the
Secretary of [Registrant] and shall be effective only upon receipt by the
Secretary."
Registrant has procured insurance protecting it under its obligation to
indemnify officers and directors against certain types of liabilities (including
certain liabilities under the Securities Act of 1933) that may be incurred by
them in the performance of their duties and affording protection to such
officers and directors in certain areas to which the corporate indemnity does
not extend, all within specified limits and subject to specified deductions.
In addition, Registrant and certain other persons may be entitled under
agreements entered into with agents or underwriters to indemnification by such
agents or underwriters against certain liabilities, including liabilities under
the Securities Act of 1933, or to contribute with respect to payments which
Registrant or such persons may be required to make in respect thereof.
Item 8. Exhibits
4a2 - Certificate of Incorporation of Registrant, as
amended (incorporated herein by reference to Exhibit
3b to the Current Report on Form 8-K of Registrant
dated December 2, 1997).
4b2 - By-laws of Registrant, as amended (incorporated
herein by reference to Exhibit 3(ii)b to the
Quarterly Report on Form 10-Q of Registrant dated
August 12, 1997).
II-6
<PAGE>
4c4 - Rights Agreement dated as of November 19, 1997
between Registrant and First Chicago Trust Company of
New York (formerly named Morgan Shareholder Services
Trust Company), as Rights Agent (incorporated herein
by reference to Exhibit 4a to the Current Report on
Form 8-K of Registrant dated December 2, 1997).
5b1 - Letter from Internal Revenue Service dated January
8, 1998 determining that the Plan is qualified under
the Internal Revenue Code.
23a2 - Consent of Coopers & Lybrand L.L.P., independent
accountants.
23b2 - Consent of Chadbourne & Parke LLP, counsel to
Registrant.
24a2 - Power of Attorney authorizing certain persons to
sign this Post-Effective Amendment No. 1 to the
Registration Statement and amendments hereto on
behalf of certain directors and officers of
Registrant.
99a2 - Defined Contribution Plan of Fortune Brands, Inc.
and Participating Operating Companies, effective as
of January 1, 1996.
II-7
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Post-Effective
Amendment No. 1 to the Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Old Greenwich, State of
Connecticut, on this 28th day of April, 1998.
FORTUNE BRANDS, INC.
By Thomas C. Hays
(Thomas C. Hays, Chairman
of the Board and Chief Executive Officer)
Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment No. 1 to the Registration Statement has been signed by
the following persons in the capacities indicated on this 28th day of April,
1998.
Signature Title
--------- -----
Thomas C. Hays Chairman of the Board and Chief
(Thomas C. Hays) Executive Officer (principal
executive officer) and Director
John T. Ludes President and Chief Operating
(John T. Ludes) Officer and Director
Dudley L. Bauerlein, Jr. Senior Vice President and Chief
(Dudley L. Bauerlein, Jr.) Financial Officer (principal
financial officer)
Craig P. Omtvedt Senior Vice President and Chief
(Craig P. Omtvedt) Accounting Officer (principal
accounting officer)
Eugene R. Anderson* Director
(Eugene R. Anderson)
Patricia O. Ewers* Director
(Patricia O. Ewers)
John W. Johnstone, Jr.* Director
(John W. Johnstone, Jr.)
II-8
<PAGE>
Signature Title
--------- -----
Wendell J. Kelley* Director
(Wendell J. Kelley)
Sidney Kirschner* Director
(Sidney Kirschner)
Gordon R. Lohman* Director
(Gordon R. Lohman)
Charles H. Pistor, Jr.* Director
(Charles H. Pistor, Jr.)
Anne M. Tatlock* Director
(Anne M. Tatlock)
John W. Thompson* Director
(John W. Thompson)
Peter M. Wilson* Director
(Peter M. Wilson)
*By: A. Robert Colby
(A. Robert Colby, Attorney-in-Fact)
II-9
<PAGE>
Pursuant to the requirements of the Securities Act of 1933,
the Plan has duly caused this Post-Effective Amendment No. 1 to the Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Old Greenwich, State of Connecticut, on this 28th day
of April, 1998.
DEFINED CONTRIBUTION PLAN OF
FORTUNE BRANDS, INC. AND
PARTICIPATING OPERATING COMPANIES
By Steven C. Mendenhall
(Steven C. Mendenhall, Chairman,
Corporate Employee Benefits
Committee)
II-10
<PAGE>
EXHIBIT INDEX
Exhibit No. Description of Exhibits Page
- ----------- ----------------------- ----
4a2 Certificate of Incorporation of Registrant, as amended
(incorporated herein by reference to Exhibit 3b to the
Current Report on Form 8-K of Registrant dated
December 2, 1997).
4b2 By-laws of Registrant, as amended (incorporated herein by
reference to Exhibit 3(ii)b to the Quarterly Report on
Form 10-Q of Registrant dated August 12, 1997).
4c4 Rights Agreement dated as of November 19, 1997 between
Registrant and First Chicago Trust Company of New York
(formerly named Morgan Shareholder Services Trust
Company), as Rights Agent (incorporated herein by reference
to Exhibit 4a to the Current Report on Form 8-K of
Registrant dated December 2, 1997).
5b1 Letter from Internal Revenue Service dated
January 8, 1998 determining that the Plan is qualified
under the Internal Revenue Code.
23a2 Consent of Coopers & Lybrand L.L.P., independent
accountants.
23b2 Consent of Chadbourne & Parke LLP, counsel to Registrant.
24a2 Power of Attorney authorizing certain persons to sign this
Post-Effective Amendment No. 1 to the Registration Statement
and amendments hereto on behalf of certain directors and
officers of Registrant.
99a2 Defined Contribution Plan of Fortune Brands, Inc. and
Participating Operating Companies, effective as of
January 1, 1996.
INTERNAL REVENUE SERVICE DEPARTMENT OF THE TREASURY
DISTRICT DIRECTOR
P.O. BOX 2508 Employer Identification Number:
CINCINNATI, OH 45201 13-3295276
DLN:
Date: 17007262136007
Person to Contact:
FORTUNE BRANDS INC CINDY PERRY
C/O EDWARD P SMITH Contact Telephone Number:
CHADBOURNE & PARKE LLP (513) 241-5199
30 ROCKEFELLER PLAZA Plan Name:
NEW YORK, NY 10112 DC PLAN OF FORTUNE BRANDS,
INC. AND PARTICIPATING
OPERATING COMPANIES
Plan Number: 001
Dear Applicant:
We have made a favorable determination on your plan,
identified above, based on the information supplied. Please keep this letter in
your permanent records.
Continued qualification of the plan under its present form
will depend on its effect in operation. (See section 1.401-1(b)(3) of the Income
Tax Regulations.) We will review the status of the plan in operation
periodically.
The enclosed document explains the significance of this
favorable determination letter, points out some events that may affect the
qualified status of your employee retirement plan, and provides information on
the reporting requirements for your plan. It also describes some events that
automatically nullify it. It is very important that you read the publication.
This letter relates only to the status of your plan under the
Internal Revenue Code. It is not a determination regarding the effect of other
federal or local statutes.
This determination is subject to your adoption of the proposed
amendments submitted in your letter dated December 2 1997. The proposed
amendments should be adopted on or before the date prescribed by the regulations
under Code section 401(b).
<PAGE>
FORTUNE BRANDS INC
This determination letter is applicable for the amendment(s)
adopted on June 19 1997.
This plan has been mandatorily disaggregated, permissively
aggregated, or restructured to satisfy the nondiscrimination requirements.
This plan satisfies the minimum coverage requirements on the
basis of the average benefit test in section 410(b)(2) of the Code.
This plan satisfies the nondiscrimination in amount
requirement of section 1.401(a)(4)-1(b)(2) of the regulations on the basis of a
general test described in the regulations.
This plan satisfies the nondiscriminatory current availability
requirements of section 1.401(a)(4)-4(b) of the regulations with respect to
those benefits, rights and features that are currently available to all
employees in the plan's coverage group. For this purpose, the plan's coverage
group consists of those employees treated as currently benefitting for purposes
of demonstrating that the plan satisfies the minimum coverage requirements of
section 410(b) of the Code.
Except as otherwise specified this letter may not be relied
upon with respect to whether the plan satisfies the qualification requirements
as amended by the Uruguay Round Agreements Act, Pub. L. 103-465 and by the Small
Business Job Protection Act of 1996 (SBJPA), Pub. L. 104-108, other than the
requirements of Code section 401(a)(26).
<PAGE>
FORTUNE BRANDS INC
The information on the enclosed addendum is an integral part
of this determination. Please be sure to read and keep it with this letter.
We have sent a copy of this letter to your representative as
indicated in the power of attorney.
If you have questions concerning this matter, please contact
the person whose name and telephone number are shown above.
Sincerely yours,
District Director
Enclosures:
Publication 794
Reporting & Disclosure Guide
for Employee Benefit Plans
Addendum
<PAGE>
This letter considers the amendments required by Tax Reform
Act of 1986 except as otherwise specified in this letter.
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this
Post-Effective Amendment No. 1 to the Registration Statement on Form S-8, and
the prospectuses related thereto, of:
(1) our report dated February 4, 1998 accompanying the
consolidated financial statements of Fortune Brands, Inc. and its subsidiaries
as of December 31, 1997 and 1996, and for the years ended December 31, 1997,
1996 and 1995, incorporated by reference into the Annual Report on Form 10-K of
Fortune Brands, Inc. for the year ended December 31, 1997; and
(2) our report dated February 4, 1998 accompanying the
financial statement schedule of Fortune Brands, Inc. and its subsidiaries
included in the Annual Report on Form 10-K of Fortune Brands, Inc. for the year
ended December 31, 1997.
COOPERS & LYBRAND L.L.P.
1301 Avenue of the Americas
New York, New York 10020
April 28, 1998
CONSENT OF COUNSEL
We consent to the incorporation by reference of our opinion as
counsel for Fortune Brands, Inc., a Delaware corporation ("Registrant"),
contained in Item 3, "Legal Proceedings", of the Annual Report on Form 10-K of
Registrant for the fiscal year ended December 31, 1997, in this Post-Effective
Amendment No. 1 to the Registration Statement on Form S-8 and the Prospectuses
related thereto.
CHADBOURNE & PARKE LLP
30 Rockefeller Plaza
New York, New York 10112
April 28, 1998
POWER OF ATTORNEY
The undersigned, acting in the capacity or capacities with
respect to Fortune Brands, Inc. stated with their respective names below, hereby
constitute and appoint GILBERT L. KLEMANN, II, EDWARD P. SMITH and A. ROBERT
COLBY, and each of them severally, the attorneys-in-fact of the undersigned with
full power to them and each of them to sign for and in the name of the
undersigned in the capacities indicated below (a) the Registration Statement on
Form S-8 of the Fortune Brands, Inc. Non-Employee Director Stock Option Plan,
(b) Post-Effective Amendment No. 1 (Registration No. 33-58865) to the
Registration Statement on Form S-8 of the Fortune Brands, Inc. 1990 Long-Term
Incentive Plan, (c) Post-Effective Amendment No. 1 to the Registration Statement
on Form S-8 (Registration No. 33-64071) of the Defined Contribution Plan of
Fortune Brands, Inc. and Participating Operating Companies and (d) any and all
amendments and supplements thereto:
Signature Title Date
Thomas C. Hays
---------------------- Chairman of the Board April 3, 1998
Thomas C. Hays and Chief Executive
Officer (principal
executive officer) and
Director
John T. Ludes
---------------------- President and Chief April 14, 1998
John T. Ludes Operating Officer and
Director
Dudley L. Bauerlein, Jr.
------------------------ Senior Vice President April 23, 1998
Dudley L. Bauerlein, Jr. and Chief Financial
Officer (principal
financial officer)
Craig P. Omtvedt
---------------------- Senior Vice President April 9, 1998
Craig P. Omtvedt and Chief Accounting
Officer (principal
accounting officer)
<PAGE>
Eugene R. Anderson
---------------------- Director April 13, 1998
Eugene R. Anderson
Patricia O. Ewers
---------------------- Director April 28, 1998
Patricia O. Ewers
John W. Johnstone, Jr.
---------------------- Director April 28, 1998
John W. Johnstone, Jr.
Wendell J. Kelley
---------------------- Director April 27, 1998
Wendell J. Kelley
Sidney Kirschner
---------------------- Director April 28, 1998
Sidney Kirschner
Gordon R. Lohman
---------------------- Director April 15, 1998
Gordon R. Lohman
Charles H. Pistor, Jr.
---------------------- Director April 28, 1998
Charles H. Pistor, Jr.
Anne M. Tatlock
---------------------- Director April 28, 1998
Anne M. Tatlock
<PAGE>
John W. Thompson
---------------------- Director April 10, 1998
John W. Thompson
Peter M. Wilson
---------------------- Director April 28, 1998
Peter M. Wilson
DEFINED CONTRIBUTION PLAN
OF
FORTUNE BRANDS, INC. AND PARTICIPATING OPERATING
COMPANIES
(Effective as of January 1, 1996)
Incorporating All
Amendments Adopted
Through April 20, 1998
<PAGE>
TABLE OF CONTENTS
Page
----
INTRODUCTION ........................................................ 1
ARTICLE I. DEFINITIONS............................................. 2
ARTICLE II. ELIGIBILITY AND PARTICIPATION........................... 17
2.01. Eligibility............................................. 17
2.02. Transfers From Non-Participating
Employers............................................. 18
2.03. Reemployment............................................ 18
2.04. Transitional Provision for Employees
of Acushnet Participating Employers................... 18
2.05. Transitional Provision for Employees
of Advanced Gravis Technology Ltd....................... 19
2.06. Transitional Provision for Employees
of May Tag & Label Corp................................. 19
ARTICLE III. PROFIT-SHARING CONTRIBUTIONS............................ 20
3.01. Profit-Sharing Contributions of
Fortune............................................... 20
3.02. Profit-Sharing Contributions of ACCO
Participating Employers............................... 23
3.03. Profit-Sharing Contributions of Beam
Participating Employers............................... 25
3.04. Reduction of Profit-Sharing
Contributions......................................... 30
3.05. Cash or Property........................................ 31
3.06. Source.................................................. 31
3.07. Irrevocability.......................................... 31
ARTICLE IV. 401(k) SAVINGS CONTRIBUTIONS............................ 32
4.01. Tax Deferred Contributions and
Supplemental Contributions............................ 32
4.02. Company Matching Contributions.......................... 35
4.03. Rollover Contributions.................................. 37
4.04. Limitation on Annual Amount of Tax
Deferred Contributions................................ 38
4.05. Actual Deferral Percentage Tests........................ 39
4.06. Actual Contribution Percentage Tests.................... 43
4.07. Alternate Percentage Test............................... 45
(i)
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4.08. Special Company Contributions........................... 47
4.09. MasterBrand Cash Advance................................ 47
ARTICLE V. INVESTMENT PROVISIONS................................... 49
5.01. Investment Funds........................................ 49
5.02. Investment Fund Elections............................... 50
5.03. Administration of Fortune Stock Fund.................... 52
5.04. Investment of Value Equity Fund......................... 53
5.05. Investment of Large-Cap Growth Equity
Fund.................................................. 53
5.06. Investment of Small-Cap Growth Equity
Fund.................................................. 54
5.07. Investment of International Equity
Fund.................................................. 54
5.08. Investment of S&P 500 Index Fund........................ 54
5.09. Investment of Growth-Oriented
Diversified Fund...................................... 55
5.10. Investment of Value-Oriented
Diversified Fund...................................... 55
5.11. Investment of Corporate/Government
Bond Fund............................................. 55
5.12. Investment of Government Securities
Fund.................................................. 56
5.13. Investment of Short-Term Investment
Fund.................................................. 56
5.14. Investment of Frozen Fixed Fund......................... 56
5.15. Voting of Shares in Fortune Stock
Fund.................................................. 57
5.16. Tendering of Shares in Fortune Stock
Fund.................................................. 60
5.17. Exercise of Certain Rights Held in
Fortune Stock Fund.................................... 65
5.18. Valuation of Investment Funds........................... 69
5.19. Investment in Life Insurance Policies................... 70
5.20. Administration of the Gallaher Fund..................... 70
5.21. Voting of Shares in Gallaher Fund....................... 71
5.22. Tendering of Gallaher ADRs.............................. 73
ARTICLE VI. ACCOUNTS................................................ 79
6.01. Participants' Accounts.................................. 79
6.02. Allocation of Earnings and Losses to
Accounts.............................................. 81
6.03. Allocation of Contributions
to Accounts........................................... 82
6.04. Annual Additions Limitation............................. 82
6.05. Combined Maximum Limitations............................ 84
(ii)
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6.06. Definition of Compensation for
Purposes of Sections 6.04 and 6.05.................... 86
6.07. Limitation of Annual Unadjusted
Earnings or Compensation.............................. 86
ARTICLE VII. VESTING AND FORFEITURES................................. 87
7.01. Participant Contributions............................... 87
7.02. Employer Contributions.................................. 87
7.03. Vesting in Prior Plan................................... 90
7.04. Amendments to Vesting Schedule.......................... 90
7.05. Forfeitures............................................. 90
7.06. Reinstatement of Account Balances....................... 90
ARTICLE VIII. DISTRIBUTIONS........................................... 92
8.01. Form of Payment......................................... 92
8.02. Time of Payment......................................... 94
8.03. Payment of Kensington Money Purchase
Account Balances...................................... 98
8.04. Certain Retroactive Payments............................ 103
8.05. Designation of Beneficiary.............................. 103
8.06. Payment in Event of Legal Disability.................... 105
8.07. Missing Distributees.................................... 105
8.08. Information Required of Distributees.................... 106
8.09. Direct Rollover Provision............................... 106
ARTICLE IX. IN-SERVICE WITHDRAWALS.................................. 108
9.01. Hardship Withdrawals.................................... 108
9.02. Withdrawals Upon Attainment of Age
59-1/2................................................ 110
9.03. Withdrawals From Grandfathered
Withdrawal Accounts and
Grandfathered After-Tax Accounts...................... 111
9.04. Limitation on Withdrawals............................... 112
ARTICLE X. LOANS................................................... 113
10.01. Availability............................................ 113
10.02. Effect on Account Balances and
Investment Funds...................................... 113
10.03. Amount.................................................. 114
10.04. Term of Loan............................................ 114
10.05. Promissory Note......................................... 114
10.06. Repayment............................................... 114
10.07. Reduction of Account Balance............................ 115
(iii)
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ARTICLE XI. ADMINISTRATION OF PLAN.................................. 116
11.01. Fiduciaries............................................. 116
11.02. Corporate Employee Benefits Committee................... 117
11.03. Organization of Committee............................... 117
11.04. Action by Committee..................................... 117
11.05. Disqualification of Committee Members................... 118
11.06. Committee Rules; Conclusiveness of
Determinations........................................ 118
11.07. Committee Powers and Duties............................. 118
11.08. Reports................................................. 119
11.09. Claims Procedure........................................ 120
11.10. Data Concerning Participants............................ 120
11.11. Certification of Data................................... 120
11.12. Indemnity of Board of Directors and
Committee Members..................................... 121
11.13. Indemnity for Acts of Investment
Managers.............................................. 121
11.14. Non-Discriminatory Action............................... 122
11.15. Plan Expenses........................................... 122
ARTICLE XII. MANAGEMENT OF TRUSTS.................................... 123
12.01. Funds in Trusts......................................... 123
12.02. Trustee and Trust Agreement............................. 123
12.03. Special Trustee and Special Trust
Agreement............................................. 124
12.04. Investment Managers..................................... 124
12.05. Conclusiveness of Reports............................... 124
ARTICLE XIII. AMENDMENT AND TERMINATION.............................. 125
13.01. Reserved Powers......................................... 125
13.02. Plan Termination........................................ 125
13.03. Plan Merger............................................. 126
13.04. Successor Employer...................................... 126
ARTICLE XIV. MISCELLANEOUS........................................... 127
14.01. Non-Alienation of Benefits.............................. 127
14.02. Action by Participating Employers....................... 127
14.03. Exclusive Benefit....................................... 127
14.04. Gender and Number....................................... 128
14.05. Right to Discharge...................................... 128
14.06. Absence of Guaranty..................................... 129
14.07. Headings................................................ 129
14.08. Governing Law........................................... 129
(iv)
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ARTICLE XV. TOP-HEAVY RULES......................................... 130
15.01. Top-Heavy Determination................................. 130
15.02. Minimum Vesting......................................... 133
15.03. Minimum Contributions................................... 133
15.04. Special Annual Additions Limitation..................... 134
15.05. Provisions Applicable if Plan Ceases
To Be Top-Heavy....................................... 135
(v)
<PAGE>
DEFINED CONTRIBUTION PLAN OF
FORTUNE BRANDS, INC. AND PARTICIPATING OPERATING
COMPANIES
The Defined Contribution Plan of Fortune Brands, Inc. and
Participating Operating Companies (the "Plan") is hereby established effective
as of January 1, 1996 (the "Effective Date"). This Plan reflects the merger and
restatement of the Profit-Sharing Plan of Fortune Brands, Inc., the ACCO World
Corporation Profit-Sharing Plan, the Acushnet Company Employee Savings Plan, the
Day-Timers, Inc. Profit-Sharing and Employee Savings Plan, the Jim Beam Brands
Co. Profit-Sharing and 401(k) Savings Plan and the MasterBrand Industries, Inc.
Employee Savings Plan and constitutes a continuation of each such plan (each
hereinafter referred to as a "Prior Plan").
<PAGE>
ARTICLE I
DEFINITIONS
1.01. The following words and phrases shall have the
respective meanings stated below unless a different meaning is plainly required
by the context:
(a) "ACCO" means ACCO World Corporation, a Delaware
corporation, its successors and assigns.
(b) "ACCO Participating Employer" means ACCO, ACCO USA, Inc.,
Day-Timers, Inc., Fortune Brands Home & Office, Inc. and May Tag & Label Corp.
and any other Related Employer that is a direct or indirect subsidiary of ACCO
and which, with the approval of the board of directors of ACCO, shall adopt this
Plan for the benefit of its employees, according to a resolution of the board of
directors or equivalent authority of such Related Employer, considered
severally.
(c) "Account(s)" means the Profit-Sharing Account, Cash Option
Account, Tax Deferred Account, Company Matching Account, Rollover Account,
Supplemental Account, Grandfathered Withdrawal Account, Grandfathered After-Tax
Account and Kensington Money Purchase Account so designated and provided for in
Section 6.01.
(d) "Account Balance(s)" means, for each Participant, former
Participant or Beneficiary, the total balance standing to his Account or
Accounts on the date of reference determined in accordance with valuation
procedures described in Article VI.
(e) "Acushnet" means Acushnet Company, a Delaware corporation,
its successors and assigns.
(f) "Acushnet Participating Employer" means Acushnet, and any
other Related Employer that is a direct or indirect subsidiary of Acushnet and
which, with the approval of the board of directors of Acushnet, shall adopt this
Plan for the benefit of its employees, according to a resolution of the board of
directors or equivalent authority of such Related Employer, considered
severally.
(g) "ADRs" means American Depositary Receipts.
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(h) "Alternate Payee" means any spouse, former spouse, child
or other dependent of a Participant who is recognized by a Qualified Domestic
Relations Order as having a right to receive all or a portion of a Participant's
benefits payable under the Plan.
(i) "Annual Valuation Date" means the close of business on the
last business day of December in each Plan Year.
(j) "Approved Leave of Absence" means an absence from work
approved by the Participating Employer under uniform rules and conditions for
all Employees of such Participating Employer. In all events an Approved Leave of
Absence by reason of service in the armed forces of the United States shall end
no later than the time at which a Participant's reemployment rights as a member
of the armed forces cease to be protected by law.
(k) "Beam" means JBB Worldwide, Inc., a Delaware corporation,
its successors and assigns.
(l) "Beam Participating Employer" means Beam and Jim Beam
Brands Co. and any other Related Employer that is a direct or indirect
subsidiary of Beam and which, with the approval of the board of directors of
Beam, shall adopt this Plan for the benefit of its employees, according to a
resolution of the board of directors or equivalent authority of such Related
Employer, considered severally.
(m) "Beneficiary" means the person or persons designated by a
Participant, former Participant or Beneficiary to receive any benefits under the
Plan which may be due upon the Participant's, former Participant's or
Beneficiary's death.
(n) "Board of Directors" means the Board of Directors of
Fortune.
(o) "Cash Option Account" means any one of the accounts so
designated and provided for in Section 6.01.
(p) "Cash Option Contributions" means the portion of the
Profit-Sharing Contributions made by an ACCO Participating Employer otherwise
allocable to a Participant's Cash Option Account for a Plan Year that a
Participant can elect to receive in cash pursuant to
3
<PAGE>
Section 3.02(e), but which the Participant does not elect to receive in cash.
(q) "Code" means the Internal Revenue Code of 1986, as amended
from time to time.
(r) "Committee" means the Corporate Employee Benefits
Committee provided for in Article XI.
(s) "Company Matching Account" means any one of the accounts
so designated and provided for in Section 6.01.
(t) "Company Matching Contributions" means any contributions
made to the Company Matching Account of a Participant by a Participating
Employer as provided for in Section 4.02.
(u) "Corporate/Government Bond Fund" means the portion of the
Trust Fund so designated and provided for in Section 4.01.
(v) "Date of Employment" means the first day an Employee
performs an Hour of Service.
(w) "Disability" means a physical or mental condition of a
Participant which renders him permanently incapable of continuing any employment
for wage or profit and for which such Participant receives Social Security
disability benefits. Proof of receipt by the Participating Employer of Social
Security disability benefits shall be required.
(x) "Domestic Relations Order" means any judgment, decree or
order (including approval of a property settlement agreement) that relates to
the provision of child support, alimony payments or marital property rights to
an Alternate Payee and is made pursuant to a state domestic relations law,
including a community property law.
(y) "Effective Date" means January 1, 1996.
(z) "Employee" means any person employed by a Participating
Employer on a salaried, hourly paid or commission basis, excluding any
independent contractor; provided that with respect to persons employed by a
MasterBrand Participating Employer, employee means any
4
<PAGE>
person employed in (1) an executive or managerial position, (2) an office in a
technical, professional, administrative or clerical position or (3) a sales
position and who is receiving remuneration for personal services rendered to a
MasterBrand Participating Employer.
(aa) "Entry Date" means the first day of any calendar month.
(bb) "ERISA" means the Employee Retirement Income Security Act
of 1974, as amended from time to time.
(cc) "Fair Market Value" on any date means the value reported
by the Trustee as being the fair market value at such date as determined by it
according to its usual methods and procedures.
(dd) "Fiduciaries" means Fortune, each other Participating
Employer, the Board of Directors and the board of directors of each other
Participating Employer, the Executive Committee of the Board of Directors, the
Committee, the Trusts Investment Committee, the Trustee and the Special Trustee,
but only with respect to the specific responsibilities of each as described in
Articles XI and XII. The term "Fiduciaries" also includes any Participant,
former Participant or Beneficiary, but only to the extent such Participant,
former Participant or Beneficiary is acting as a named fiduciary (within the
meaning of Section 403(a)(1) of ERISA) with respect to the exercise of voting
rights of shares of Fortune Common Stock held in the Fortune Stock Fund or
Gallaher ADRs held in the Gallaher Fund or the tender, deposit, sale, exchange
or transfer of such shares or ADRs (and any rights within the meaning of Section
5.17(a)) as provided in Section 5.15 or 5.16 or with respect to the sale,
exercise or retention of any such rights held in the Fortune Stock Fund or the
Gallaher Fund as provided in Section 5.17.
(ee) "Forfeiture" means the portion of a Participant's Account
Balances to which he is not entitled at the termination of his employment as
determined in Section 7.05.
(ff) "Fortune" means Fortune Brands, Inc., a Delaware
corporation, its successors and assigns.
5
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(gg) "Fortune Common Stock" means the common stock of Fortune
as now constituted and any other common stock into which it may be reclassified.
(hh) "Fortune Stock Fund" means the portion of the Trust Fund
so designated and provided for in Section 5.01.
(ii) "Frozen Fixed Fund" means the portion of the Trust Fund
so designated and provided for in Section 5.01.
(jj) "Gallaher" means Gallaher Group Plc, a public limited
company incorporated under the laws of England and Wales.
(kk) "Gallaher Fund" means the portion of the Trust Fund so
designated and provided for in Section 5.01.
(ll) "Gallaher Spin-Off" means the distribution of Gallaher
ADRs by Fortune to its stockholders.
(mm) "Government Securities Fund" means the portion of the
Trust Fund so designated and provided for in Section 5.01.
(nn) "Grandfathered After-Tax Account" means any one of the
accounts so designated and provided for in Section 6.01.
(oo) "Grandfathered Withdrawal Account" means any one of the
accounts so designated and provided for in Section 6.01.
(pp) "Growth-Oriented Diversified Fund" means the portion of
the Trust Fund so designated and provided for in Section 5.01.
(qq) "Highly Compensated Employee" means for a Plan Year any
employee who, during such Plan Year or the immediately preceding Plan Year:
(1) Was at any time a five percent (5%) owner of any Related
Employer (within the meaning of Section 416(i)(1) of the Code);
6
<PAGE>
(2) Received compensation from any Related Employer in excess
of seventy-five thousand dollars ($75,000) (or such other amount as
determined under Section 415(d) of the Code);
(3) Received compensation from any Related Employer in excess
of fifty thousand dollars ($50,000) (or such other amount as determined
under Section 415(d) of the Code) and was in the top twenty percent
(20%) of the group of employees determined under Section 414(q)(8) of
the Code when ranked on the basis of compensation in such Plan Year; or
(4) Was at any time an officer of any Related Employer and
received compensation from any Related Employer in excess of fifty
percent (50%) of the amount in effect under Section 415(b)(1)(A) of the
Code for such Plan Year.
In the event that no officer of the Related Employer received compensation from
the Related Employer in excess of fifty percent (50%) of the amount in effect
under Section 415(b)(1)(A) of the Code for such Plan Year, the highest paid
officer shall be treated as a Highly Compensated Employee. Further, no more than
fifty (50) Employees or ten percent (10%) of the employees shall be treated as
officers for purposes of determining a Highly Compensated Employee.
In the case of the Plan Year for which the determination is made, an employee
not described in (2), (3) or (4) above for the preceding year (without regard to
this sentence) shall not be treated as described in (2), (3) or (4) above unless
such employee is a member of the group consisting of the one hundred (100)
employees paid the greatest compensation during the Plan Year for which the
determination is being made.
For purposes of Article IV, if any individual is the spouse, lineal ascendant,
lineal descendant or spouse of a lineal ascendant or descendant of a five
percent (5%) owner or a Highly Compensated Employee in the group consisting of
the ten (10) Highly Compensated Employees paid the greatest compensation during
the year, then such individual shall not be treated as a separate employee, and
any compensation paid to such individual (and any Tax Deferred Contributions,
Supplemental Contributions and
7
<PAGE>
Cash Option Contributions on behalf of such individual) shall be treated as if
paid to (or on behalf of) the five percent (5%) owner or Highly Compensated
Employee.
A former employee who had a separation year prior to the Plan Year for which the
determination is made who was a Highly Compensated Employee for either such
former Employee's final year of employment or any determination year ending on
or after the employee's fifty-fifth (55th) birthday shall be included as a
Highly Compensated Employee.
(rr) "Hour of Service" means:
(1) Each hour for which an Employee is paid or entitled to
payment for the performance of duties for a Participating Employer or
Non-Participating Employer. These hours shall be credited to the
Employee for the computation period or periods in which the duties are
performed;
(2) Each hour for which an Employee is paid or entitled to
payment by a Participating Employer or Non-Participating Employer on
account of a period of time during which no duties are performed
(irrespective of whether the employment relationship has terminated)
due to vacation, holiday, illness, incapacity (including disability),
layoff, jury duty, military duty or leave of absence. No more than five
hundred one (501) Hours of Service shall be credited under this
paragraph for any single continuous period (whether or not such period
occurs in a single computation period). Hours under this paragraph
shall be calculated and credited pursuant to Section 2530.200b-2 of the
Department of Labor Regulations, which are incorporated herein by
reference; and
(3) Each hour for which back pay, irrespective of mitigation
of damages, is either awarded or agreed to by a Participating Employer
or Non-Participating Employer. The same Hours of Service shall not be
credited under both paragraph (1) or paragraph (2), as the case may be,
and under this paragraph (3). These hours shall be credited to the
computation period or periods to which the award or agreement pertains
rather than the computation
8
<PAGE>
period in which the award, agreement or payment is made.
(ss) "International Equity Fund" means the portion of the
Trust Fund so designated and provided for in Section 5.01.
(tt) "Investment Fund(s)" means the Fortune Stock Fund,
Gallaher Fund, Value Equity Fund, Large-Cap Growth Equity Fund, Small-Cap Growth
Equity Fund, International Equity Fund, S&P 500 Index Fund, Growth-Oriented
Diversified Fund, Value-Oriented Diversified Fund, Corporate/ Government Bond
Fund, Government Securities Fund, Short-Term Investment Fund, Frozen Fixed Fund
and Loan Fund held under the Trust Fund as designated pursuant to Section 5.01.
(uu) "Investment Manager" means one or more investment counsel
appointed as provided in Section 12.04.
(vv) "Kensington Money Purchase Account" means any of the
accounts so designated and provided for in Section 6.01.
(ww) "Large-Cap Growth Equity Fund" means the portion of the
Trust Fund so designated and provided for in Section 5.01.
(xx) "Loan Fund" means the portion of the Trust Fund so
designated and provided for in Section 5.01.
(yy) "MasterBrand" means MasterBrand Industries, Inc., a
Delaware corporation, its successors and assigns.
(zz) "MasterBrand Participating Employer" means MasterBrand,
Aristokraft, Inc., Master Lock Company, Moen Incorporated and Waterloo
Industries, Inc. and any other Related Employer that is a direct or indirect
subsidiary of MasterBrand and which, with the approval of the board of directors
of MasterBrand, shall adopt this Plan for the benefit of its employees,
according to a resolution of the board of directors or equivalent authority of
such Related Employer, considered severally.
9
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(aaa) "Non-Participating Employer" means any Related Employer
which is not a Participating Employer.
(bbb) "Normal Retirement Age" means age sixty-five (65).
(ccc) "Participant" means an Employee who meets the
requirements of participation in the Plan as provided in Article II and who
continues to qualify for participation.
(ddd) "Participating Employer" means Fortune and each ACCO
Participating Employer, Acushnet Participating Employer, Beam Participating
Employer and MasterBrand Participating Employer and each other Related Employer
designated to participate in the Plan as herein provided, considered severally.
(eee) "Plan" means the Defined Contribution Plan of Fortune
Brands, Inc. and Participating Operating Companies.
(fff) "Plan Administrator" means Fortune.
(ggg) "Plan Year" means the calendar year.
(hhh) "Prior Plan" means, where applicable, the (a)
Profit-Sharing Plan of Fortune Brands, Inc., (b) ACCO World Corporation
Profit-Sharing Plan, (c) Acushnet Company Employee Savings Plan, (d) Day-Timers,
Inc. Profit-Sharing and Employee Savings Plan, (e) Jim Beam Brands Co.
Profit-Sharing and 401(k) Savings Plan and (f) MasterBrand Industries, Inc.
Employee Savings Plan, as in existence on December 31, 1995 prior to this
amendment and restatement and any of their respective predecessor plans. The
term "Prior Plan" shall also include the May Tag & Label Corp. 401(k) Savings
Plan.
(iii) "Profit-Sharing Account" means any one of the accounts
so designated and provided for in Section 6.01.
(jjj) "Profit-Sharing Contributions" means the contributions
made by a Participating Employer as provided in Article III.
10
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(kkk) "Qualified Domestic Relations Order" means any Domestic
Relations Order that creates, recognizes or assigns to an Alternate Payee the
right to receive all or a portion of a Participant's benefits payable hereunder
and that meets the requirements of Section 414(p) of the Code, as determined by
the Committee.
(lll) "Related Employer" means any corporation or other
business entity which is included in a controlled group of corporations within
which Fortune is also included, as provided in Section 414(b) of the Code (as
modified for purposes of Sections 6.04 and 6.05 of this Plan by Section 415(h)
of the Code), or which is a trade or business under common control with Fortune,
as provided in Section 414(c) of the Code (as modified, for purposes of Sections
6.04 and 6.05, by Section 415(h) of the Code), or which constitutes a member of
an affiliated service group within which Fortune is also included, as provided
in Section 414(m) of the Code, or which is required to be aggregated with
Fortune pursuant to regulations issued under Section 414(o) of the Code.
(mmm) "Restatement Date" means January 1, 1996, the effective
date of the amendment and restatement of the Plan.
(nnn) "Retirement" means retirement under a retirement plan of
a Participating Employer or Non-Participating Employer.
(ooo) "Rollover Account" means any of the accounts so
designated and provided for in Section 6.01(e).
(ppp) "Rollover Contributions" means amounts attributable to
part or all of an "eligible rollover distribution" (within the meaning of
Section 402(c)(4) of the Code and the Treasury Regulations thereunder)
transferred to this Plan pursuant to Section 4.03 as the result of the
distribution of a Participant's account under another qualified trust,
individual retirement account or individual retirement annuity as defined in
Section 4.03.
(qqq) "Severance From Service" means the earlier of the
following dates:
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(1) The date on which a Participant terminates employment with
all Related Employers, is discharged, retires or dies; or
(2) The first anniversary of the first day of a period in
which an Employee remains absent from service (with or without pay)
with all Related Employers for any reason other than one listed in
paragraph (1). If such Employee is on an Approved Leave of Absence on
such first anniversary, he shall be deemed to have incurred a Severance
From Service on the expiration of such Approved Leave of Absence,
unless he returns to active employment with a Related Employer on or
before that date. Notwithstanding anything herein to the contrary, an
Employee shall not incur a Severance From Service due to an absence for
maternity or paternity reasons until the second anniversary of the
first date of such absence. For purposes of this paragraph, an absence
from work for maternity or paternity reasons means an absence:
(A) by reason of the pregnancy of the individual;
(B) by reason of a birth of a child of the individual;
(C) by reason of the placement of a child with the
individual in connection with the adoption of such child by
such individual; or
(D) for purposes of caring for such child for a period
beginning immediately following such birth or placement.
The Employee shall be required to furnish the Committee with such
timely information as the Committee may reasonably require to establish
both that the absence from work is for maternity or paternity reasons
and the number of days for which there was such an absence.
A transfer from employment with one Related Employer to another Related
Employer shall not be considered a Severance From Service.
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(rrr) "Short-Term Investment Fund" means the portion of the
Trust Fund so designated and provided for in Section 5.01.
(sss) "Small-Cap Growth Equity Fund" means the portion of the
Trust Fund so designated and provided for in Section 5.01.
(ttt) "S&P 500 Index Fund" means the portion of the Trust Fund
so designated and provided for in Section 5.01.
(uuu) "Special Trust Agreement" and "Special Trust" mean,
respectively, the trust agreement between ACCO and the Special Trustee, as it
may be amended from time to time, and the trust established thereunder.
(vvv) "Special Trustee" means the trustee from time to time
acting under the Special Trust Agreement, including any successor trustee.
(www) "Special Trust Fund" means all money, securities and
other property held under the Special Trust for purposes of the Plan, including
without limitation any life insurance policies pursuant to Section 5.19, and any
other assets as the Committee shall direct, together with income therefrom.
(xxx) "Supplemental Account" means any one of the accounts so
designated and provided for in Section 6.01.
(yyy) "Supplemental Contributions" means any contributions
made by a MasterBrand Participating Employer that are attributable to the
reduction in compensation on an after-tax basis that a Participant agrees to
accept from such MasterBrand Participating Employer each Plan Year as described
in Section 4.01.
(zzz) "Tax Deferred Account" means any one of the accounts so
designated and provided for in Section 6.01.
(aaaa) "Tax Deferred Contributions" means any contributions
made by a Participating Employer that are attributable to the reduction in
compensation on a pre-tax basis a Participant agrees to accept from such
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Participating Employer each Plan Year as described in Section 4.01.
(bbbb) "Termination of Employment Without Fault" means any
involuntary separation of a Participant by a Participating Employer or
Non-Participating Employer otherwise than by reason of Retirement, Disability,
failure to maintain work standards, dishonesty or other misconduct prejudicial
to the Participating Employer or Non-Participating Employer by which the
Participant is employed, absence without prescribed notice, or refusal to return
from layoff or Approved Leave of Absence within the prescribed period; provided,
however, that no temporary or seasonal employee who first becomes a Participant
on or after August 1, 1996 shall be immediately fully vested in his Account
Balances solely as a result of Termination of Employment Without Fault.
(cccc) "Trust Agreement" and "Trust" mean, respectively, the
Fortune Brands, Inc. Defined Contribution Plan Master Trust Agreement, as it may
be amended from time to time, and the trust established thereunder.
(dddd) "Trustee" means the trustee from time to time acting
under the Trust Agreement, including any successor trustee.
(eeee) "Trust Fund" means all money, securities and other
property held under the Trust Agreement for the purposes of the Plan, together
with the income therefrom.
(ffff) "Trusts Investment Committee" means the Trusts
Investment Committee of Fortune.
(gggg) "Valuation Date" means the Annual Valuation Date and
each other date, as determined from time to time by the Committee, as of which
funds and accounts are valued or adjusted as provided in Article VI.
(hhhh) "Value Equity Fund" means the portion of the Trust Fund
so designated and provided for in Section 5.01.
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(iiii) "Value-Oriented Diversified Fund" means the portion of
the Trust Fund so designated and provided for in Section 5.01.
(jjjj) "Vesting Service" means a Participant's credit for
purposes of determining his right to a nonforfeitable benefit under the Plan, as
determined in accordance with Article VII. Such Vesting Service shall mean
service as an Employee with a Participating Employer or any Related Employer, as
follows:
(1) Vesting Service shall be determined from the Participant's
Date of Employment or reemployment in completed full years and
fractions of years in excess of completed full years, each twelve (12)
months of employment constituting a full year of Vesting Service, and
each thirty (30) days of employment completed in excess of full years
of Vesting Service counted as one-twelfth (1/12) of a year of Vesting
Service.
(2) Subject to paragraph (3) below, each Employee shall be
credited with Vesting Service during any period of employment with a
Participating Employer or any Related Employer, extending to the date
he incurs a Severance From Service.
(3) Notwithstanding any other provision herein to the
contrary, if a Participant shall have incurred a Severance From Service
and is subsequently reemployed by a Participating Employer or a Related
Employer, his Vesting Service shall be reinstated, as follows:
(A) If the Employee is reemployed within twelve (12)
months after the date he is first absent from active
employment, the Vesting Service he had at the date he is first
absent from active employment shall be reinstated upon his
reemployment, and he shall receive credit for Vesting Service
for the period between the date he is first absent from active
employment and the date of his reemployment; or
(B) If the Employee is reemployed after twelve (12)
months have elapsed from the date he is first absent from
active employment, the Vesting Service he had at the date he
is first
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<PAGE>
absent from active employment shall be reinstated
upon his reemployment, but he shall not receive credit for
Vesting Service for the period between the date he is first
absent from active employment and the date of his
reemployment.
Notwithstanding the foregoing, the Vesting Service of each Participant for the
period prior to January 1, 1996 shall not be less than as determined under the
provisions of the applicable Prior Plan.
(kkkk) "Year of Eligibility Service" means any consecutive
twelve (12) month period of employment, as herein set forth, during which an
Employee completes one thousand (1,000) or more Hours of Service. The first
consecutive twelve (12) month period to be taken into account for this purpose
shall be the consecutive twelve (12) month period commencing with the Employee's
Date of Employment or the Employee's date of reemployment. The second
consecutive twelve (12) month period to be taken into account for this purpose
shall be the Plan Year which includes the first anniversary of the Employee's
Date of Employment or the Employee's date of reemployment. All subsequent twelve
(12) month periods to be taken into account for this purpose shall correspond
with Plan Years.
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<PAGE>
ARTICLE II
ELIGIBILITY AND PARTICIPATION
2.01. Eligibility.
(a) Participants in Prior Plan. Each Employee who was a
Participant in the Prior Plan on the day prior to the Restatement Date shall
continue to be a Participant in the Plan on the Restatement Date, provided he
remains an Employee.
(b) Participation in Profit-Sharing.
(1) Each Employee of Fortune or a Beam Participating Employer
who was not a Participant in the Prior Plan on the day prior to the
Restatement Date shall become a Participant for purposes of Article III
upon completion of one (1) Year of Eligibility Service, provided he is
an Employee on that date.
(2) Each Employee of an ACCO Participating Employer who was
not a Participant in the Prior Plan on the day prior to the Restatement
Date shall become a Participant for purposes of Article III on the
first Entry Date on or after the Restatement Date which is coincident
with or next succeeding the date on which he has completed one (1) Year
of Eligibility Service, provided he is an Employee on that date.
(c) Participation in 401(k) Savings. Each Employee who was not
a Participant in the Prior Plan on the day prior to the Restatement Date shall
be eligible to have Tax Deferred Contributions made on his behalf in accordance
with Article IV on the first Entry Date on or after the Restatement Date which
is coincident with or next succeeding the date on which he has completed at
least one (1) Year of Eligibility Service, provided he is an Employee on that
date.
(d) Collective Bargaining Employees. An Employee covered under
a collective bargaining agreement shall not become a Participant unless the
collective bargaining agreement provides for coverage under the Plan. Each
person who ceases to be covered under a
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<PAGE>
collective bargaining agreement but continues as an Employee shall become a
Participant on the later of (1) the first Entry Date which is coincident with
or next succeeding the date on which he has completed one (1) Year of
Eligibility Service, provided he is an Employee on that date and (2) the date
he ceases to be covered by a collective bargaining agreement.
2.02. Transfers From Non-Participating Employers. Each person
becoming an Employee of Fortune or a Beam Participating Employer upon transfer
from a Non-Participating Employer shall become a Participant for purposes of
Article III on the later of the (1) date he has completed one (1) Year of
Eligibility Service, provided he is an Employee on that date and (2) date of his
transfer to such Participating Employer. Each person becoming an Employee of an
ACCO Participating Employer upon transfer from a Non-Participating Employer
shall become a Participant for purposes of Article III on the later of the (1)
first Entry Date which is coincident with or next succeeding the date on which
he has completed one (1) Year of Eligibility Service, provided he is an Employee
on that date and (2) date of his transfer to such Participating Employer. Each
person becoming an Employee of any Participating Employer upon transfer from a
Non-Participating Employer shall be eligible to have Tax Deferred Contributions
made on his behalf in accordance with Article IV on the later of the (1) first
Entry Date which is coincident with or next succeeding the date on which he has
completed one (1) Year of Eligibility Service, provided he is an Employee on
that date and (2) date of his transfer to such Participating Employer.
2.03. Reemployment. Any Participant who terminates employment
and is subsequently reemployed as an Employee shall become a Participant upon
his reemployment.
2.04. Transitional Provision for Employees of Acushnet
Participating Employers. Notwithstanding any other provision of this Plan to the
contrary, for purposes of crediting service for eligibility to participate in
this Plan for the Plan Year ending December 31, 1996, each Employee of an
Acushnet Participating Employer shall receive credit for eligibility service
based upon the provisions of this Plan in effect on January 1, 1996 or the
provisions of
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<PAGE>
the Acushnet Company Employee Savings Plan in effect on December 31, 1995,
whichever provides the greatest service credit for eligibility purposes. Under
the Acushnet Company Employee Savings Plan in effect on December 31, 1995,
each Employee of an Acushnet Participating Employer was eligible to participate
in such plan on the first day of the month on or after he completed his
employment anniversary.
2.05. Transitional Provision for Employees of Advanced Gravis
Technology Ltd. Notwithstanding any other provision of this Plan to the
contrary, an employee of Advanced Gravis Computer Technology Ltd. who transfers
to an ACCO Participating Employer shall be credited with Hours of Service and
periods of employment with Advanced Gravis Computer Technology Ltd. prior to the
date that it became a Related Employer in determining a Year of Eligibility
Service and Vesting Service.
2.06 Transitional Provision for Employees of May Tag & Label
Corp. Notwithstanding any other provision of this Plan to the contrary, an
Employee of May Tag & Label Corp. who participated in the May Tag & Label Corp.
40l(k) Savings Plan shall participate in this Plan on January 1, 1998 and
Employees of May Tag & Label Corp. shall be credited with Hours of Service and
periods of employment with May Tag & Label Corp. prior to the date that it
became a Related Employer in determining a Year of Eligibility Service and
Vesting Service. To the extent that this Plan accepts a transfer of assets and
liabilities from the May Tag & Label Corp. 40l(k) Savings Plan, amounts held as
tax deferred elective contributions thereunder shall be held in the Tax Deferred
Contribution Account under this Plan and amounts held as employer matching
contributions thereunder shall be held in the Company Matching Account under
this Plan.
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<PAGE>
ARTICLE III
PROFIT-SHARING CONTRIBUTIONS
3.01. Profit-Sharing Contributions of Fortune.
(a) Amount. Subject to the provisions of Sections 3.01(c) and
3.04 and to the provisions of Article XIV, Fortune shall for each Plan Year
contribute under the Plan an amount equal to one-sixth (1/6) of one percent (1%)
of Adjusted Income From Continuing Operations for such Plan Year.
Notwithstanding the foregoing, no Profit-Sharing Contribution shall be made
pursuant to this Section 3.01(a) for any Plan Year in which a cash dividend
shall not have been paid on Fortune Common Stock and the amount of any
Profit-Sharing Contribution and Company Matching Contributions by Fortune shall
be limited for each Plan Year so that the sum thereof does not exceed
three-eighths (3/8) of one percent (1%) of Adjusted Income From Continuing
Operations for such Plan Year.
(b) Certification of Amounts. The amount of any Profit-Sharing
Contribution under Section 3.01(a) to be paid for any Plan Year shall be
certified by the independent public accountants who have audited the books of
Fortune for such year and shall be conclusive on Fortune, the Committee, the
Trustee, all Participants and former Participants and all persons claiming
through a Participant or former Participant.
(c) Time for Making Profit-Sharing Contributions. Payment of
the Profit-Sharing Contribution under Section 3.01(a) for any Plan Year may be
made at any time and from time to time (whether before or after the
certification referred to in Section 3.01(b)) prior to the time prescribed by
law, or such time as extended, for filing Fortune's Federal income tax return
for such Plan Year and such Profit-Sharing Contribution shall accrue as of the
date of such contribution.
(d) Allocation to Accounts. Any Profit-Sharing Contribution
made by Fortune pursuant to this Section 3.01 shall be allocated to the
Profit-Sharing Accounts of its eligible Participants in the same proportion as
the Adjusted Earnings for each such
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<PAGE>
Participant bears to the total Adjusted Earnings of all such eligible
Participants for that Plan Year.
(e) Eligibility for Allocation. For purposes of this Section
3.01, each Participant who is an Employee of Fortune shall be entitled to an
allocation of any Profit-Sharing Contribution of Fortune for a Plan Year if he
is an active Employee of Fortune on any day during the Plan Year for which such
Profit-Sharing Contribution is made. Each Participant who is an Employee of
Fortune shall be entitled to an allocation of any Profit-Sharing Contribution of
Fortune for the Plan Year in which he initially becomes a Participant based upon
his Adjusted Earnings for the entire Plan Year.
(f) Excess Contribution Percentage Limitation. The Excess
Contribution Percentage for any Plan Year otherwise apportionable under this
Section 3.01 and Section 6.04 to a Participant who is an Employee of Fortune
shall not exceed the lesser of:
(1) the Base Contribution Percentage multiplied by two
(2.0); or
(2) the Base Contribution Percentage plus the greater of five
and seven-tenths percent (5.7%) or such higher percentage equal to the
portion of the rate of tax under Section 3111(a) of the Code
attributable to old-age insurance.
For purposes of this Section 3.01(f), the "Base Contribution Percentage" shall
mean the percentage of the Participant's compensation which is allocated under
the Plan with respect to that portion of the Participant's compensation not in
excess of the Social Security taxable wage base for such Plan Year, and the
"Excess Contribution Percentage" shall mean the percentage of the Participant's
compensation which is allocated under the Plan with respect to that portion of
the Participant's compensation in excess of the Social Security taxable wage
base for such Plan Year. The amount of any reduction of the contribution of
Fortune effected solely by reason of the application of this Section 3.01(f)
shall be reapportioned to each Participant in the ratio that his Unadjusted
Earnings for such Plan Year bear to the aggregate Unadjusted Earnings of all
Participants employed by Fortune for that year. The reapportionment of the
reduction provided by this Section 3.01(f) shall
21
<PAGE>
be applicable only with respect to Participants employed by Fortune.
(g) Definitions. For purposes of this Section 3.01 and, where
applicable, Section 3.04, the following terms shall have the following meaning:
(1) "Adjusted Earnings" means with respect to any Participant
who is an Employee of Fortune the sum of (A) the Unadjusted Earnings of
the Participant in any Plan Year not in excess of the Social Security
taxable wage base in effect for such Plan Year and (B) an amount equal
to one and one-half (1-1/2) times such Unadjusted Earnings in excess of
the Social Security taxable wage base in effect for such Plan Year.
(2) "Adjusted Income From Continuing Operations" for any Plan
Year means income from continuing operations, before income taxes, as
reflected in the consolidated financial statements set forth in the
annual report for such year of Fortune to its stockholders, but
adjusted by the independent accountants who have audited Fortune's
consolidated financial statements to (A) exclude the provision for the
contributions under the Plan, (B) exclude unrealized gains and losses
on securities, and adjust realized gains and losses on trading
securities to reflect cost, (C) exclude restructuring charges or
credits, and charges for impaired assets other than those sold in the
ordinary course of business, (D) include the results of operations for
such year from businesses classified as "discontinued operations" prior
to the disposition dates, and (E) to the extent not adjusted pursuant
to items (B), (C) or (D) above, exclude gains or losses included in
continuing operations resulting from the sale or writedown of
intangible assets, land or buildings, investments in business units and
securities resulting from the sale of business units.
(3) "Unadjusted Earnings" means with respect to any
Participant who is an Employee of Fortune all earnings of the
Participant in any Plan Year for service with Fortune, but limited to
one hundred fifty thousand dollars ($150,000) (adjusted for increases
in the cost of living pursuant to rulings
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<PAGE>
of the Secretary of the Treasury), including overtime and extra shift pay,
holiday and vacation pay, amounts paid for periods of approved absences, back
pay which has been either awarded or agreed to by Fortune, plus amounts elected
to be deferred by the Participant as Tax Deferred Contributions under this Plan
or as contributions under a plan established pursuant to Section 125 of the
Code, or Section 119 of the Code, and all compensation under the Management
Incentive Plan and the Fortune Brands, Inc. Annual Executive Incentive
Compensation Plan paid during such Plan Year, but excluding (A) contributions
(other than Tax Deferred Contributions) or benefits under this Plan, (B)
Worker's Compensation payments, (C) amounts paid by Fortune for insurance,
retirement or other benefits and bonuses, and (D) compensation under said
Management Incentive Plan and the Fortune Brands, Inc. Annual Executive
Compensation Plan paid after the end of the Plan Year in which the Participant
incurs a Severance From Service.
3.02. Profit-Sharing Contributions of ACCO Participating
Employers.
(a) Amount. The amount of Profit-Sharing Contribution, if any,
for a Plan Year shall be determined by the board of directors of each ACCO
Participating Employer, in its sole discretion, on or before the date (including
extensions) for filing the Federal income tax return of the ACCO Participating
Employer for the taxable year for which the Profit-Sharing Contribution is to be
made. An ACCO Participating Employer may determine that no Profit-Sharing
Contribution will be made for a particular year.
(b) Allocation to Accounts. Any Profit-Sharing Contribution
made by an ACCO Participating Employer shall be allocated, as follows, among the
Profit-Sharing Accounts and Cash Option Accounts of its eligible Participants
based upon the percentage of Compensation earned by each such Participant, as
determined by such ACCO Participating Employer. The Profit-Sharing Account of
each such Participant shall be credited with two-thirds (2/3) of the
Profit-Sharing Contribution so allocable. The remainder of the Profit-Sharing
Contribution so allocable shall be
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<PAGE>
distributed to the Participant in cash or credited to his Cash Option Account,
as provided in Section 3.02(e).
(c) Eligibility for Allocation. A Participant whose ACCO
Participating Employer makes a Profit-Sharing Contribution for a Plan Year shall
be entitled to an allocation of such Profit-Sharing Contribution only if he is
an active Employee of an ACCO Participating Employer on the last day of the Plan
Year. Notwithstanding the foregoing, a Participant shall be entitled to an
allocation of a Profit-Sharing Contribution for the Plan Year in which (1) his
employment terminates due to death, Disability or his retirement on or after his
Normal Retirement Age and for any Plan Year in which he is transferred to a
Related Employer which is not an ACCO Participating Employer, even if he is not
employed on the last day of the Plan Year or (2) he incurs a Termination of
Employment Without Fault as a result of the closing of the ACCO USA, Inc.
facilities in Long Island City, New York, even if he is not employed on the last
day of the Plan Year. An Employee of Day-Timers, Inc. who first performs an Hour
of Service on or after December 1, 1996 but prior to December 1, 1997 and
becomes a Participant shall receive an allocation of the Profit-Sharing
Contribution for Plan Year 1998 based on the Employee's Compensation for all of
Plan Year 1998 rather than merely for the period during which he was a
Participant provided that he is otherwise entitled to an allocation of such
Profit-Sharing Contribution for Plan Year 1998 hereunder.
(d) Definitions. For purposes of this Section 3.02 and, where
applicable, Section 3.04, the following term shall have the following meaning:
(1) "Compensation" of a Participant who is an Employee of an
ACCO Participating Employer means (A) in the case of a Participant paid
on the basis solely of a salary, the total salary excluding bonuses and
overtime paid for such Participant by an ACCO Participating Employer
for Vesting Service as a Participant during the Plan Year, (B) in the
case of a Participant paid on an hourly basis, the straight time rate
paid for such Participant by an ACCO Participating Employer to a
maximum of two thousand eighty (2,080) hours for Vesting Service as a
Participant during the Plan Year, and (C) in the case of a Participant
employed as a sales representative, the total base salary and
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<PAGE>
commissions paid for such Participant by an ACCO Participating Employer
for Vesting Service as a Participant during the Plan Year, in each case
including amounts, if any, deferred under Section 4.01 of the Plan or
under Section 125 of the Code, and excluding the one-third (1/3) of the
Profit-Sharing Contribution allocable to a Participant pursuant to this
Section 3.02. The Compensation taken into account under the Plan for
any Plan Year shall be limited to one hundred fifty thousand dollars
($150,000), adjusted for increases in the cost of living pursuant to
rulings of the Secretary of the Treasury.
(e) Cash Option Contributions for Participants Employed by
ACCO Participating Employers. Each Participant who is an Employee of an ACCO
Participating Employer may elect to have a part, not in excess of one-third
(1/3) of the Profit-Sharing Contribution for a Plan Year allocable to him
pursuant to this Section 3.02, distributed to him in cash at the time such
Profit-Sharing Contribution is made; provided, however, that such election
(which shall have continuing effect) is in writing, signed by such Participant,
on a form approved by the Committee and irrevocable not later than December 31
of such Plan Year. Any such amount which the Participant does not elect to have
distributed to him shall be allocated to his Cash Option Account.
Notwithstanding the foregoing, a Cash Option Contribution shall be distributed
in cash if necessary to satisfy the requirements of Section 4.05.
3.03. Profit-Sharing Contributions of Beam Participating
Employers.
(a) Amount. Subject to the provisions of Sections 3.03(c) and
3.04 and the provisions of Article XIV, the Beam Participating Employers shall
for each Plan Year contribute under the Plan an amount equal to the sum of:
(1) one percent (1%) of Net Income Before Taxes for such Plan
Year to the extent that such Net Income shall not be in excess of
twenty million dollars ($20,000,000); and
25
<PAGE>
(2) three percent (3%) of any part of such Net Income Before
Taxes that shall be in excess of twenty million dollars ($20,000,000).
Notwithstanding the foregoing, no Profit-Sharing Contribution shall be made
pursuant to this Section 3.03(a) for any Plan Year for which Net Income Before
Taxes shall not have equaled or exceeded twelve percent (12%) of Net Worth for
such Plan Year.
(b) Determination of Amounts. The amount of the Profit-Sharing
Contribution of the Beam Participating Employers under Section 3.03(a) to be
paid for any Plan Year and the amounts of the Beam Participating Employers'
shares thereof under Section 3.03(c) shall be determined by the Controller of
Beam or such other financial officer of Beam as may from time to time be
designated by the board of directors of Beam. The Beam Participating Employers
shall obtain a letter from the independent certified public accountants who have
examined the consolidated financial statements of Fortune and subsidiaries for
such year to the effect that in connection with such examination they have
reviewed the determination of such amounts and that in their opinion such
determination has been made in accordance with the provisions of Sections
3.03(a) and (c) and Section 3.04. The review made by such accountants shall
include comparison of the elements entering into the computation of Net Income
Before Taxes and Net Worth with the books and records of the Beam Participating
Employers, and with the consolidating adjustments made by Fortune in preparing
the consolidated financial statements included in its report to stockholders.
The contents of each such letter shall be conclusive on the Beam Participating
Employers, the Committee, the Trustee, all Participants and former Participants
and all persons claiming through a Participant or former Participant.
(c) Shares of Beam Participating Employers. Each Beam
Participating Employer's share of the Profit-Sharing Contribution of the Beam
Participating Employers for any Plan Year shall be determined as follows:
(1) Such share shall be such amount as will bear the same
ratio to such Profit-Sharing Contribution as the total of the Adjusted
Earnings for such year of Participants employed by such Beam
Participating Employer bears to the aggregate
26
<PAGE>
Adjusted Earnings for that year of all Participants employed by the
Beam Participating Employers. If the share, computed severally, of a
Beam Participating Employer for any Plan Year exceeds its current and
accumulated earnings or profits, that Beam Participating Employer shall
not pay the amount of such share in excess of such current and
accumulated earnings or profits, but such amount shall be paid by the
other Beam Participating Employers in accordance with, and to the
extent deductible by them under, Section 404(a)(3)(B) of the Code (or
such other Federal income tax statutory provisions as shall at the time
be applicable). The Beam Participating Employers that pay any part of
any such excess shall receive appropriate reimbursement therefor from
the Beam Participating Employer for which it is paid.
(2) Payment of such share may be made at any time and from
time to time (whether before or after the determination referred to in
Section 3.03(b)) prior to the time prescribed by law, or such time as
extended, for filing such Beam Participating Employer's Federal income
tax return for such Plan Year and such share shall accrue as of the
date of such contribution. Any overpayment by a Beam Participating
Employer shall not be refunded to it but the Beam Participating
Employer shall deduct such overpayment from its share of contributions
otherwise payable for the succeeding Plan Year or Plan Years.
(d) Allocation to Accounts. Any Profit-Sharing Contribution
made by a Beam Participating Employer pursuant to this Section 3.03 shall be
allocated to the Profit-Sharing Accounts of its eligible Participants in the
same proportion as the Adjusted Earnings for each such Participant bears to the
total Adjusted Earnings of all such eligible Participants for that Plan Year.
(e) Eligibility for Allocation. For purposes of this Section
3.03, each Participant who is an Employee of a Beam Participating Employer shall
be entitled to an allocation of any Profit-Sharing Contribution of the Beam
Participating Employers for a Plan Year only if he completed at least one
thousand (1,000) Hours of Service in such Plan Year. Notwithstanding the
foregoing, a
27
<PAGE>
Participant shall be entitled to an allocation of any Profit-Sharing
Contribution for the Plan Year in which his employment terminates due to
Retirement, Disability, Termination of Employment Without Fault or death. Each
Participant who is an Employee of a Beam Participating Employer shall be
entitled to an allocation of any Profit-Sharing Contribution of a Beam
Participating Employer for the Plan Year in which he initially becomes a
Participant based upon his Adjusted Earnings for the entire Plan Year; provided
he is otherwise entitled to an allocation of such Profit-Sharing Contribution
for such Plan Year in accordance with this Section 3.03(e).
(f) Excess Contribution Percentage Limitation. The Excess
Contribution Percentage for any Plan Year otherwise apportionable under this
Section 3.03 and Section 6.04 to a Participant who is an Employee of a Beam
Participating Employer shall not exceed the lesser of:
(1) the Base Contribution Percentage multiplied by two
(2.0); or
(2) the Base Contribution Percentage plus the greater of five
and seven-tenths percent (5.7%) or such higher percentage equal to the
portion of the rate of tax under Section 3111(a) of the Code
attributable to old-age insurance.
For purposes of this Section 3.03(f), the "Base Contribution Percentage" shall
mean the percentage of the Participant's compensation which is allocated under
the Plan with respect to that portion of the Participant's compensation not in
excess of the Social Security taxable wage base for such Plan Year, and the
"Excess Contribution Percentage" shall mean the percentage of the Participant's
compensation which is allocated under the Plan with respect to that portion of
the Participant's compensation in excess of the Social Security taxable wage
base for such Plan Year. The amount of any reduction of the contribution of a
Beam Participating Employer effected solely by reason of the application of this
Section 3.03(f) shall be reapportioned to each Participant in the ratio that his
Unadjusted Earnings for such Plan Year bear to the aggregate Unadjusted Earnings
of all Participants employed by such Beam Participating Employer for that year.
The reapportionment of the reduction provided by this Section 3.03(f) shall be
28
<PAGE>
applicable only with respect to Participants employed by the same Beam
Participating Employer as the Participant that suffered the reduction.
(g) Definitions. For purposes of this Section 3.03 and, where
applicable, Section 3.04, the following terms shall have the following meaning:
(1) "Adjusted Earnings" means, with respect to any Participant
who is an Employee of a Beam Participating Employer, the sum of (A) the
Unadjusted Earnings of the Participant in any Plan Year not in excess
of the Social Security taxable wage base in effect for such Plan Year
and (B) an amount equal to one and one-half times such Unadjusted
Earnings in excess of the Social Security taxable wage base in effect
for such Plan Year.
(2) "Net Income Before Taxes" for any Plan Year means the
income, before taxes on income and before the Profit-Sharing
Contribution under the Plan, reflecting the consolidated results of the
operations for that year of Beam and its subsidiaries as used in
consolidating such results with the operating results of Fortune and
its other consolidated subsidiaries, but adjusted to (A) exclude all
gain in excess of loss resulting from sales or other dispositions of
land, buildings, goodwill, brands, trademarks and investments in
subsidiaries or other companies and (B) reflect certain consolidating
adjustments made by Fortune, including elimination of interest expense
on long-term notes given to Fortune in connection with the
reorganization of the Fortune group of companies.
(3) "Net Worth" for any Plan Year means the amount reflected
in the consolidated financial statements of Beam representing the
stockholders' equity at the end of the calendar year immediately
preceding such Plan Year, after reflecting the cumulative consolidating
adjustments referred to in this Section.
(4) "Unadjusted Earnings" means, with respect to any
Participant who is an Employee of a Beam Participating Employer, all
earnings of the Participant in any Plan Year as an Employee of the Beam
Participating Employers, but limited to one
29
<PAGE>
hundred fifty thousand dollars ($150,000) (adjusted for increases in
the cost of living pursuant to rulings of the Secretary of the
Treasury), including overtime, holiday and vacation pay, amounts paid
for periods of approved absences and incentive pay, back pay which has
been either awarded or agreed to by the Beam Participating Employers,
plus amounts elected to be contributed by the Participant under a plan
established pursuant to Section 125 of the Code and compensation under
the JBB Worldwide, Inc. Senior Executive and Key Manager Incentive Plan
and Salesmen's Achievement Incentive Bonus Plan, but excluding (A) all
other bonuses and contributions or benefits under this Plan and taste
testing payments, (B) Worker's Compensation payments, (C) amounts paid
by the Beam Participating Employers for insurance, retirement or other
benefits and (D) all payments under the JBB Worldwide, Inc. Senior
Executive and Key Manager Incentive Plan and compensation under the
Salesmen's Achievement Incentive Bonus Plan paid after the end of the
Plan Year in which the Participant incurs a Severance From Service.
3.04. Reduction of Profit-Sharing Contributions.
Profit-Sharing Contributions payable pursuant to this Article III and the shares
thereof of each Participating Employer otherwise payable pursuant thereto shall
be subject to the following reductions:
(a) Reduction for Forfeitures. Profit-Sharing Contributions
otherwise payable pursuant to this Article III shall be reduced by the total
amounts forfeited by Plan Participants during such Plan Year in accordance with
applicable provisions of Section 7.05 minus the amounts required to be
reinstated in accordance with applicable provisions of Section 7.06.
(b) Reduction for Excess Annual Additions. Profit-Sharing
Contributions otherwise payable pursuant to this Article III shall be further
reduced by the amount, if any, by which the amount of the portion of the
contribution of a Participating Employer otherwise apportionable to a
Participant is reduced pursuant to Sections 6.04 and 6.05.
(c) Reduction for Annual Limitation on Compensation.
Profit-Sharing Contributions otherwise payable pursuant to this Article III
shall be further
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reduced by the amount, if any, by which the amount of the
portion of such contribution otherwise apportionable to a Participant is reduced
because the Participant's Unadjusted Earnings or Compensation, whichever is
applicable, is limited to one hundred fifty thousand dollars ($150,000)
(adjusted for increases in the cost of living pursuant to rulings of the
Secretary of the Treasury).
(d) Reduction for Maximum Deductible Limitation. The
Participating Employers' Profit-Sharing Contribution for any Plan Year and the
aggregate of such share and its contributions under its retirement plan for such
year shall in no event exceed the maximum amounts deductible from the
Participating Employers' income for such year under Sections 404(a)(3) and (7)
of the Code (or such other Federal income tax statutory provisions as shall at
the time be applicable). If such share or such aggregate for any Participating
Employer would otherwise exceed either of such maximum deductible amounts, the
contributions under this Plan for such year shall be reduced pro rata by the
amount necessary to reduce such share or such aggregate to the amount so
deductible.
3.05. Cash or Property. Any Profit-Sharing Contribution made
pursuant to this Article III may be made in whole or in part in cash or in
property acceptable to the Trustee at the Fair Market Value thereof on the date
of the receipt thereof by the Trustee.
3.06. Source. Participants shall not make any contributions
under the Plan except as provided in Article IV.
3.07. Irrevocability. All Profit-Sharing Contributions made
under the Plan pursuant to this Article III shall be irrevocable and shall be
transferred by the respective Participating Employer to the Trustee (except any
amounts distributed in cash pursuant to Section 3.02) to be used only in
accordance with the provisions of the Plan.
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ARTICLE IV
401(k) SAVINGS CONTRIBUTIONS
4.01. Tax Deferred Contributions and Supplemental
Contributions.
(a) Rate of Tax Deferred Contributions and Supplemental
Contributions. Each Participant shall have the option to enter into a salary
reduction agreement with his Participating Employer which shall be applicable to
all compensation received thereafter. The salary reduction agreement shall
provide that the Participant agrees to accept a reduction in salary from the
Participating Employer on a pre-tax basis by an amount equal to an integral
percentage of up to seventeen percent (17%) of his Compensation (as defined in
Section 4.01(e)), subject to the limitations of this Article IV. Each
Participant who is an Employee of a MasterBrand Participating Employer may also
enter into a salary reduction agreement to accept a reduction in salary from the
MasterBrand Participating Employer on an after-tax basis by an amount equal to
an integral percentage of up to seventeen percent (17%) of his Compensation (as
defined in Section 4.01(e)), minus the percentage he elected to contribute on a
pre-tax basis, subject to the limitations of this Article IV. Notwithstanding
any other provision of this Plan to the contrary, no Supplemental Contributions
shall be made on behalf of any Participant who is an Employee of a Participating
Employer other than a MasterBrand Participating Employer. The Participating
Employer may limit the maximum salary reduction percentage to a lesser
percentage of Compensation, provided such policy does not impermissibly
discriminate against Employees who are not Highly Compensated Employees. Tax
Deferred Contributions and Supplemental Contributions shall be paid at least
monthly to the Trustee by the Participating Employers.
(b) Change in Rate of Tax Deferred Contributions and
Supplemental Contributions. Each Participant may elect to change the rate of his
Tax Deferred Contributions or Supplemental Contributions effective as of the
first day of any month.
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(c) Discontinuance and Resumption of Tax Deferred
Contributions and Supplemental Contributions. Each Participant may elect to
discontinue his Tax Deferred Contributions or Supplemental Contributions at any
time. Each Participant may elect to resume his Tax Deferred Contributions or
Supplemental Contributions as of the first day of any month after the date as of
which such contributions were discontinued.
(d) Notice Requirement. Any election to change the rate of Tax
Deferred Contributions or Supplemental Contributions pursuant to Section 5.02(b)
and any election to discontinue or resume Tax Deferred Contributions or
Supplemental Contributions pursuant to Section 5.02(c) must be made within the
time period prior to the effective date of such change, discontinuance or
resumption as may be designated by the Committee. Such election shall be made in
accordance with the voice response system implemented by the Participant's
Participating Employer, or, if required by such Participating Employer, by means
of a written notice to such Participating Employer, on a form approved by the
Committee. The Committee may establish additional rules regarding the timing and
frequency of a change in the amount of Tax Deferred Contributions or
Supplemental Contributions, provided such policy is applied uniformly to all
Participants of the Participating Employer.
(e) Definitions of Compensation. For purposes of Sections 4.01
and 4.02, the term "Compensation" shall mean:
(1) For each Participant who is an Employee of Fortune, his
"Unadjusted Earnings" as defined in Section 3.01(g).
(2) For each Participant who is an Employee of an ACCO
Participating Employer, the total cash remuneration paid by such ACCO
Participating Employer to the Participant in a Plan Year for services,
including base pay, bonuses, overtime pay, commissions and amounts, if
any, deferred under this Section 4.01 of the Plan or under Section 125
of the Code, but excluding the one-third (1/3) of the Profit-Sharing
Contributions allocable to a Participant pursuant to Section 3.02.
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(3) For each Participant who is an Employee of an Acushnet
Participating Employer, all salaries and bonuses paid and commissions
earned by an Employee for the services rendered by such Employee to the
Acushnet Participating Employers, but excluding any special payments
such as prizes, awards, moving expenses, tuition reimbursement,
executive life insurance premium bonuses, etc. Such Compensation shall
be determined as if the Participant had not entered into a salary
reduction agreement pursuant to this Section 4.01 of the Plan or
Section 125 of the Code.
(4) For each Participant who is an Employee of a Beam
Participating Employer, his base pay plus overtime for the pay period.
(5) For each Participant who is an Employee of a MasterBrand
Participating Employer, his basic salary or wages, overtime, shift
premiums, commissions and bonuses paid by such Participating Employer
for personal services, and other amounts includible in his gross income
on account of such services, including Tax Deferred Contributions under
this Section 4.01 of the Plan or amounts elected to be contributed
under a program established pursuant to Section 125 of the Code and
excluding any (A) severance pay whether paid before or after
termination of employment, (B) amounts deferred under a plan of a
Related Employer until such amounts are paid, (C) amounts paid under
any long-term incentive plan, (D) tax protection payments or foreign
service overbase allowances or premiums, (E) reimbursement for expenses
incurred or to be incurred, (F) non-cash remuneration such as taxable
amounts for life insurance coverage or use of an automobile or stock
options or awards, or (G) remuneration paid in currency other than U.S.
dollars.
Notwithstanding the foregoing, in each case the Compensation of a Participant
shall be limited to one hundred fifty thousand dollars ($150,000) in each Plan
Year (adjusted for increases in the cost of living pursuant to rulings of the
Secretary of the Treasury).
(f) Notwithstanding any other provision of this Plan to the
contrary, a Participating Employer may
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refuse to give effect to any salary reduction agreement or cash option election
entered into by a Participant at any time if the Participating Employer
determines that such refusal is necessary to ensure that the additions to a
Participant's Accounts for any Plan Year shall not exceed the limitations set
forth in Sections 4.04, 4.05, 4.06, 4.07 and Sections 6.04, 6.05 and 6.07 of the
Plan.
4.02. Company Matching Contributions.
(a) Rate of Company Matching Contributions. Subject to the
conditions and limitations of this Article IV and Article XIV, Fortune and each
ACCO Participating Employer, Acushnet Participating Employer and MasterBrand
Participating Employer shall contribute under the Plan each year for each
Participant in its employ during such year an amount based on any Tax Deferred
Contributions and, if applicable, Supplemental Contributions made on his behalf
during such year by such Participating Employer. The Company Matching
Contribution for each Participant employed by Fortune shall be equal to fifty
percent (50%) of the Participant's Tax Deferred Contributions to the extent the
rate of such Tax Deferred Contributions in effect from time to time does not
exceed six percent (6%) of his Compensation. The Company Matching Contribution
for each Participant employed by a MasterBrand Participating Employer shall be
equal to fifty percent (50%) of the Participant's aggregate Tax Deferred
Contributions and Supplemental Contributions to the extent the rate of such
aggregate Tax Deferred Contributions and Supplemental Contributions in effect
from time to time does not exceed six percent (6%) of his Compensation. Except
as provided in Section 4.02(b), the Company Matching Contribution for each
Participant employed by an ACCO Participating Employer shall be equal to thirty
percent (30%) of the Participant's Tax Deferred Contributions to the extent the
rate of such Tax Deferred Contributions in effect from time to time does not
exceed six percent (6%) of his Compensation. The Company Matching Contribution
for each Participant employed by an Acushnet Participating Employer shall be
equal to fifty percent (50%) of the Participant's Tax Deferred Contributions to
the extent the rate of such Tax Deferred Contributions in effect from time to
time does not exceed five percent (5%) of his Compensation and an additional
fifty percent (50%) of the Participant's Tax Deferred Contributions to the
extent the rate of such Tax Deferred Contributions in effect from time to time
does not exceed
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two percent (2%) of his Compensation. Notwithstanding any other provision of
this Plan to the contrary, no Company Matching Contributions shall be made with
respect to Tax Deferred Contributions of any Participant employed by any Beam
Participating Employer. Company Matching Contributions shall be paid monthly to
the Trustee by the Participating Employers. For purposes of this Section 4.02,
the term "Compensation" shall have the respective meanings set forth in Section
4.01(f).
(b) Rate of Company Matching Contributions for Participants
Who Are Former Employees of Wilson Jones Company. The thirty percent (30%)
referred to in Section 4.02(a) above for Participants employed by an ACCO
Participating Employer shall be equal to eighty percent (80%) for all persons
who had been employees of Wilson Jones Company who:
(1) had attained age fifty (50), but not age fifty-five (55),
on January 1, 1985, and whose Compensation (plus any elective salary
reduction amounts under Sections 401(k) or 125 of the Code) was less
than twenty-five thousand dollars ($25,000) on that date; and
(2) have not incurred a Severance From Service from Wilson
Jones Company or its successor since August 1, 1985.
(c) Eligibility for Allocation. Each Participant who is an
Employee of Fortune or an ACCO Participating Employer or Acushnet Participating
Employer shall be entitled to an allocation of Company Matching Contributions
under this Section 4.02 if he made Tax Deferred Contributions during the Plan
Year. Each Participant who is an Employee of a MasterBrand Participating
Employer shall be entitled to an allocation of Company Matching Contributions
under this Section 4.02 if he made Tax Deferred Contributions or Supplemental
Contributions during the Plan Year.
(d) Limitations. Notwithstanding the foregoing and in addition
to the limitations set forth in Sections 4.06 and 4.07, no Company Matching
Contributions shall be made with respect to excess Tax Deferred Contributions
and Supplemental Contributions distributed pursuant to Sections 4.05, 4.06 or
4.07 and Company Matching Contributions made with respect thereto shall be
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returned to the Participating Employer pursuant to Section 14.03. No Company
Matching Contributions shall be made for Participants who are Employees of
Fortune for any Plan Year in which a cash dividend shall not have been paid on
Fortune Common Stock and the amount of any Profit-Sharing Contribution and
Company Matching Contributions by Fortune shall be limited for each Plan Year so
that the sum thereof does not exceed three-eighths (3/8) of one percent (1%) of
Adjusted Income From Continuing Operations (as defined in Section 3.01) for such
Plan Year.
4.03. Rollover Contributions.
(a) Eligible Amounts. Any Employee, regardless of whether he
has become a Participant in the Plan pursuant to Article II, may, subject to
obtaining the prior approval of his Participating Employer, at any time transfer
(or cause to be transferred) to the Trust Fund:
(1) Up to the entire amount of money and other property
received from another qualified trust under Section 401(a) of the Code
which constitutes an eligible rollover distribution within the meaning
of Section 402(c)(4) of the Code, provided that (A) such amount must be
received by the Trustee within sixty (60) days after the Employee's
receipt of such payment or (B) such amount is directly transferred to
the Trust Fund from such other qualified trust; and
(2) Up to the entire amount of money and other property
received by the Employee that was held separately in an "individual
retirement account" or an "individual retirement annuity" (as defined
in Section 408 of the Code) which contains only those amounts described
above in paragraph (1) plus any earnings thereon, provided that such
amount must be received by the Trustee within sixty (60) days after the
Employee's receipt of such payment.
After-tax contributions are not eligible to be rolled over to this Plan. The
Employee shall furnish his Participating Employer with a written statement that
the contribution to the Trust Fund is a rollover contribution, together with
such other statements and information as may be required by his Participating
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Employer in order to establish that such contribution does not contain amounts
from sources other than provided above and that such rollover contribution
otherwise meets the requirements of law. Acceptance by the Trustee of any amount
under these provisions shall not be construed as a determination of the
Employee's tax consequences by either the Participating Employer or the Trustee.
(b) Limitation on Assets Transferred. Except as otherwise
provided in this Plan, assets shall not be transferred to the Plan or Trust Fund
from any other plan or trust.
4.04. Limitation on Annual Amount of Tax Deferred
Contributions.
(a) Maximum Annual Amount. The maximum amount of Tax Deferred
Contributions and, if applicable, Cash Option Contributions which may be made on
behalf of each Participant in any calendar year to this Plan and any other
qualified plan shall not exceed nine thousand five hundred dollars ($9,500),
adjusted for each year to take into account any cost of living increase provided
for such year under Section 402(g) of the Code. For purposes of this Section
4.04, the term "qualified plan" means any tax qualified plan under Section
401(k) of the Code, any simplified employee pension cash or deferred arrangement
as described in Section 402(h)(1)(B) of the Code, any eligible deferred
compensation plan under Section 457 of the Code, any plan described in Section
501(c)(18) of the Code and any employer contributions made on behalf of the
Participant for the purchase of an annuity contract under Section 403(b) of the
Code pursuant to a salary reduction arrangement.
(b) Procedure for Requesting Return of Excess Deferrals. If a
Participant makes elective deferrals to this Plan and to any other qualified
plan in excess of the dollar limit specified above for the Participant's taxable
year, then the Participant must notify his Participating Employer in writing by
March 1 of the following year of the amount, if any, to be refunded from this
Plan. The notice must specify the amount of excess Tax Deferred Contributions
and, if applicable, Cash Option Contributions received by the Plan for the
preceding year and must be accompanied by the Participant's written statement
that if the excess is not distributed, the Tax Deferred Contributions and, if
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applicable, Cash Option Contributions, when added to amounts deferred under
other qualified plans, exceed the limit imposed on the Participant by Code
Section 402(g) for the taxable year in which the deferral occurred. If the
Participant fails to notify the Committee by March 1, no refund will be made
pursuant to this Section 4.04.
(c) Return of Excess Deferrals. The amount to be refunded
shall be paid to the Participant in a single payment not later than April 15
following the close of the taxable year and shall include any income or loss
allocated to the refund, as determined in Section 4.04(d), for the period during
the Participant's taxable year. Any Cash Option Contributions shall be returned
before Tax Deferred Contributions. Although the excess deferral may be refunded,
it shall still be considered as an elective deferral for the Plan Year in which
it was originally made and shall be included in the actual deferral percentage
of a Highly Compensated Employee.
(d) Income or Loss Allocable for Taxable Year. The income or
loss allocable to excess elective deferrals for the Participant's taxable year
shall be determined by multiplying the income or loss for the Participant's
taxable year allocable to the Participant's elective deferrals for such year by
a fraction, the numerator of which is the amount of excess elective deferrals
and Cash Option Contributions for such taxable year and the denominator of which
is equal to the sum of (1) the total Account Balances in the Participant's Tax
Deferred Account and, if applicable, Cash Option Account as of the beginning of
the taxable year plus (2) the Participant's Tax Deferred Contributions and, if
applicable, Cash Option Contributions for such taxable year. No adjustment shall
be made with respect to any period following such taxable year.
4.05. Actual Deferral Percentage Tests.
(a) Tests. The Actual Deferral Percentage for the Highly
Compensated Employees shall not exceed for any Plan Year the greater of:
(1) the Actual Deferral Percentage for all other Employees,
multiplied by one and one-quarter (1.25); or
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(2) the Actual Deferral Percentage for all other Employees,
multiplied by two (2); provided, however, the Actual Deferral
Percentage for the Highly Compensated Employees does not exceed the
Actual Deferral Percentage for all other Employees by more than two (2)
percentage points.
For the purpose of the foregoing tests:
(1) those Employees who were not directly or indirectly
eligible to have Tax Deferred Contributions or, if applicable, Cash
Option Contributions made for them at any time during the Plan Year
shall be disregarded;
(2) if two or more plans which include cash or deferred
arrangements are considered one plan for purposes of Section 401(a)(4)
or 410(b) (other than 410(b)(2)(A)(ii)) of the Code, the cash or
deferred arrangements included in those plans shall be treated as one
arrangement;
(3) if two or more plans are permissibly aggregated for
purposes of the foregoing tests, the aggregated plans must also satisfy
Sections 401(a)(4) and 410(b) of the Code as though they were one plan;
and
(4) if a Highly Compensated Employee is a participant in two
or more cash or deferred arrangements of the Participating Employers or
Related Employers, all such cash or deferred arrangements shall be
treated as one cash or deferred arrangement for purposes of determining
the Actual Deferral Percentage of that Highly Compensated Employee.
(b) Actual Deferral Percentage. The Actual Deferral Percentage
for a specified group of Employees for a Plan Year shall be the average of the
ratios (calculated separately) for the Employees in such group of:
(1) the amount of Tax Deferred Contributions and, if
applicable, Cash Option Contributions and Special Company Contributions
pursuant to Section 4.08 actually paid to the Trustee on behalf of each
such Employee for such Plan Year, to
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(2) his Compensation for such Plan Year.
Every family member of a five percent (5%) owner of a Participating Employer (as
defined in Section 416(i) of the Code) or of one of the ten most Highly
Compensated Employees shall be aggregated with the five percent (5%) owner or
Highly Compensated Employee into a single family group ("Family Group"). If an
Employee is required to be aggregated as a member of more than one Family Group,
all eligible Employees who are members of those Family Groups that include that
Employee shall be aggregated as one Family Group. The Compensation and Tax
Deferred Contributions and, if applicable, Cash Option Contributions of each
member of a Family Group are treated as if paid to (or on behalf of) one Highly
Compensated Employee. The combined actual deferral ratio of the Family Group
shall be the ratio determined by combining the Tax Deferred Contributions and,
if applicable, Cash Option Contributions and the Compensation of all members of
the Family Group.
Except as provided in the preceding paragraph, the Tax
Deferred Contributions and, if applicable, Cash Option Contributions and the
Compensation of all members of the Family Group are disregarded in calculating
the Actual Deferral Percentage of the Employees other than Highly Compensated
Employees.
(c) Return of Excess Contributions. The Committee shall
determine after the end of the Plan Year whether the Actual Deferral Percentage
results satisfy either of the tests contained in Section 4.05(a). If neither
test is satisfied, the excess amount for each Highly Compensated Employee shall
be distributed to the Participant (together with any income allocable thereto)
within twelve months following the Plan Year for which the excess Tax Deferred
Contributions and, if applicable, Cash Option Contributions were made. The
excess amount shall be determined for each Highly Compensated Employee by
determining the maximum actual deferral ratio that Highly Compensated Employees
may defer under the tests contained in Section 4.05(a), and then reducing the
actual deferral ratio of those Participants whose actual deferral ratio exceeds
that maximum by an amount of sufficient size to reduce the overall Actual
Deferral Percentage for Highly Compensated Employees to a level such that one of
the tests contained in Section 4.05(a) shall be satisfied. The excess amount
shall be
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determined in a fashion such that the actual deferral ratio of the affected
Participants who elected the highest actual deferral ratio shall be first
lowered to the extent required to achieve compliance with the tests in Section
4.05(a) or the level of the affected Participants who elected the next to the
highest actual deferral ratio. If further overall reductions are required to
achieve compliance with the tests contained in Section 4.05(a), this process is
repeated until sufficient total reductions have occurred to achieve compliance
with the tests contained in Section 4.05(a).
If a Highly Compensated Employee's actual deferral ratio is
determined under the family aggregation rules described above, the Family
Group's excess Tax Deferred Contributions and, if applicable, Cash Option
Contributions shall be allocated among the members of the Family Group in
proportion to each member's Tax Deferred Contributions and, if applicable, Cash
Option Contributions on a pro rata basis.
The amount of excess Tax Deferred Contributions and, if
applicable, Cash Option Contributions to be distributed shall be reduced by the
amount of excess deferrals (as defined in Section 402(g)(2) of the Code and the
applicable regulations) previously distributed for the taxable year ending in
the same Plan Year. The amount of excess deferrals to be distributed for a
taxable year shall be reduced by the amount of excess Tax Deferred Contributions
and Cash Option Contributions previously distributed for the Plan Year beginning
in the taxable year.
(d) Adjustment for Income or Losses. The excess Elective
Contributions for each Highly Compensated Employee shall be adjusted for income
or loss during the Plan Year, in the manner prescribed in Section 4.04(d).
(e) Forfeiture of Company Matching Contributions. Tax Deferred
Contributions which are refunded shall cause the corresponding Company Matching
Contributions, whether vested or nonvested, to be forfeited.
(f) Definition of Compensation. For purposes of this Section
4.05, the term "Compensation" shall have the meaning prescribed in Section
414(s) of the Code.
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4.06. Actual Contribution Percentage Tests.
(a) Tests. The Actual Contribution Percentage for the Highly
Compensated Employees shall not exceed for any Plan Year the greater of:
(1) the Actual Contribution Percentage for all other
Employees, multiplied by one and one-quarter (1.25); or
(2) the Actual Contribution Percentage for all other
Employees, multiplied by two (2); provided, however, the actual
contribution percentage for the Highly Compensated Employees does not
exceed the Actual Contribution Percentage for all other Employees by
more than two percentage points.
For the purpose of the foregoing tests:
(1) those Employees who were not directly or indirectly
eligible to have Company Matching Contributions or Supplemental
Contributions made for them at any time during the Plan Year shall be
disregarded;
(2) if two or more plans to which employee contributions and
matching contributions are made are considered one plan for purposes of
Section 401(a)(4) or 410(b) (other than 410(b)(2)(A)(ii)) of the Code,
all employee contributions and matching contributions are to be treated
as made under the same plan;
(3) if two or more plans are permissively aggregated for
purposes of the foregoing tests, the aggregated plans must also satisfy
Sections 401(a)(4) and 410(b) of the Code as though they were one plan;
and
(4) if a Highly Compensated Employee is a participant in two
or more plans of the Participating Employers or Related Employers to
which employee contributions or matching contributions are made, all
such plans shall be treated as one plan for purposes of determining the
Actual Contribution Percentage of that Highly Compensated Employee.
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(b) Actual Contribution Percentage. The Actual Contribution
Percentage for a specified group of Employees for a Plan Year shall be the
average of the ratios (calculated separately) for the Employees in such group
of:
(1) the amount of Company Matching Contributions and
Supplemental Contributions actually paid to the Trustee on behalf of
each such Employee for such Plan Year, to
(2) his Compensation for the Plan Year.
To the extent permitted by Treasury Regulations, Tax Deferred
Contributions, Cash Option Contributions and non-elective employer contributions
under any other tax-qualified retirement plan may be added to (1) above.
The Company Matching Contributions, Supplemental
Contributions, other amounts added to (1) above, and Compensation of each member
of a Family Group (as determined in Section 4.05(b)) are treated as if paid to
(or on behalf of) one Highly Compensated Employee. The combined actual
contribution ratio of the Family Group shall be the ratio determined by
combining the Company Matching Contributions, Supplemental Contributions, other
added amounts, and Compensation of all members of the Family Group.
Except as provided in the preceding paragraph, the Company
Matching Contributions, Supplemental Contributions, other added amounts, and
Compensation of all members of the Family Group are disregarded in calculating
the Actual Contribution Percentage of the Employees other than Highly
Compensated Employees.
(c) Return of Excess Contributions. The Company shall
determine after the end of the Plan Year whether the Actual Contribution
Percentage results satisfy either of the tests contained in Section 4.06(a). If
neither test is satisfied, the excess amount ("Excess Aggregate Contributions")
for each Highly Compensated Employee shall be distributed to him (together with
any income allocable thereto) within twelve months following the Plan Year for
which the Excess Aggregate Contributions were made.
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The excess amount shall be determined for each Highly
Compensated Employee by determining the maximum actual contribution ratio that
Highly Compensated Employees may elect under the tests contained in Section
4.06(a), and then reducing the actual contribution ratio of those Participants
whose actual contribution ratio exceeds that maximum by an amount of sufficient
size to reduce the overall actual contribution percentage for Highly Compensated
Employees to a level such that one of the tests contained in Section 4.04(a)
shall be satisfied. The excess amount shall be determined in a fashion such that
the actual contribution ratio of the affected Participants who elected the
highest actual contribution ratio shall be first lowered to the extent required
to achieve compliance with the tests in Section 4.06(a) or the level of the
affected Participants who elected the next to the highest actual contribution
ratio. If further overall reductions are required to achieve compliance with the
tests contained in Section 4.06(a), this process is repeated until sufficient
total reductions have occurred to achieve compliance with the tests contained in
Section 4.06(a).
If a Highly Compensated Employee's actual contribution ratio
is determined under the family aggregation rules described above, the Family
Group's Excess Aggregate Contributions shall be allocated among the members of
the Family Group in proportion to each member's Company Matching Contributions
and Supplemental Contributions.
(d) Adjustment for Income and Loss. The Excess Aggregate
Contributions for each Highly Compensated Employee shall be adjusted for income
or loss during the Plan Year, in the manner prescribed in Section 4.04(d).
(e) Definition of Compensation. For purposes of this Section
4.06, the term "Compensation" shall have the meaning prescribed in Section
414(s) of the Code.
4.07. Alternate Percentage Test. In the event that the Actual
Deferral Percentage for the Highly Compensated Employees for any Plan Year is
more than the Actual Deferral Percentage for all other Employees multiplied by
one hundred twenty-five percent (l25%) and the Actual Contribution Percentage
for Highly Compensated Employees for the same Plan Year is more than the Actual
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Contribution Percentage for all other Employees multiplied by one hundred
twenty-five percent (l25%), then the sum of the Actual Deferral Percentage for
Highly Compensated Employees plus the Actual Contribution Percentage for Highly
Compensated Employees for such Plan Year may not exceed the greater of:
(a) the sum of:
(1) one hundred twenty-five percent (125%) of the
greater of (A) the Actual Deferral Percentage of the group of
all other Employees, or (B) the Actual Contribution Percentage
of the group of all other Employees, and
(2) two (2) percentage points plus the lesser of
(A) the Actual Deferral Percentage of the group of all other
Employees, or (B) the Actual Contribution Percentage of the
group of all other Employees.
In no event, however, shall the amount described in this
subparagraph 4.07(a)(2) exceed two hundred percent (200%) of
the lesser of (2)(A) and (B) above; and
(b) the sum of:
(1) one hundred twenty-five percent (125%) of the
lesser of (A) the Actual Deferral Percentage of the group of
all other Employees, or (B) the Actual Contribution Percentage
of the group of all other Employees, and
(2) two (2) percentage points plus the greater of
(A) the Actual Deferral Percentage of the group of all other
Employees, or (B) the Actual Contribution Percentage of the
group of all other Employees.
In no event, however, shall the amount described in this
subparagraph 4.07(b)(2) exceed two hundred percent (200%) of
the lesser of (2)(A) and (B) above.
In the event the sum of the Actual Deferral Percentage for
Highly Compensated Employees plus the
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Actual Contribution Percentage for Highly Compensated Employees exceeds the
amount set forth in this Section 4.07, the Actual Deferral Percentage for the
Highly Compensated Employees or the Actual Contribution Percentage for the
Highly Compensated Employees shall be reduced in the manner provided in Sections
4.05 and 4.06, until such excess no longer exists.
4.08. Special Company Contributions.
(a) Determination of Special Rate. In order to meet the
nondiscrimination requirements of Sections 401(k) and 401(m) of the Code (as set
forth in Sections 4.05 and 4.06 of the Plan), any Participating Employer may, in
its discretion and by action of its board of directors, establish a special rate
of employer contributions applicable only to certain Participants who are not
Highly Compensated Employees of such Participating Employer.
(b) Allocation of Special Company Contributions. If
contributions made under this Section 4.08 are made to meet the
nondiscrimination requirements of Code Section 401(k) (as set forth in Section
4.05 of the Plan), then such contributions shall be deemed, for all Plan
purposes except Section 9.01, to be Tax Deferred Contributions, and shall be
allocated to the Tax Deferred Accounts of the Participants for whom the
contributions were made; provided, however, that Company Matching Contributions
shall not be made based upon such contributions. If contributions made under
this Section 4.08 are made to meet the nondiscrimination requirements of Code
Section 401(m) (as set forth in Section 4.06 of the Plan), then such
contributions shall be deemed, for all Plan purposes except Section 9.01, to be
Company Matching Contributions, but shall be allocated to the Tax Deferred
Accounts of the Participants for whom the contributions were made employed by
such Participating Employer who made Tax Deferred Contributions and such
contributions shall be fully vested upon deposit.
4.09. MasterBrand Cash Advance. A MasterBrand Participating
Employer may make a Cash Advance to the Plan to enable a Participant to obtain a
distribution under Articles VIII and IX of the vested amount of the
Participant's Accounts invested in the Frozen Mutual Benefit GIC Fund. Each Cash
Advance shall be in the form of a non-collateralized, non-interest bearing loan
to the
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Plan for which the Participating Employer shall have no recourse against
Plan assets, except to the extent provided below, and for which the Plan shall
bear no expense or risk. Upon the receipt of cash proceeds from the Mutual
Benefit Life Insurance Company guaranteed interest contract in which the
Investment Fund is invested of amounts attributable to the vested amount of the
Participant's Accounts invested in the Frozen Mutual Benefit GIC Fund for which
a Cash Advance was made to enable a Participant to receive a distribution of
such amounts under Articles VIII and IX, the Cash Advance shall be repaid,
without interest, to the Participating Employer who made such Cash Advance;
provided, however, that repayment of the Cash Advances shall be waived to the
extent that the cash proceeds received from the Mutual Benefit Life Insurance
Company guaranteed interest contract in which the Investment Fund is invested
are less than the amount of the Cash Advances.
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ARTICLE V
INVESTMENT PROVISIONS
5.01. Investment Funds.
(a) Separate Funds. The Trust Fund shall consist of the
following separate Investment Funds, to be administered as provided in Sections
5.03 through 5.14, respectively, and the "Loan Fund," to be administered as
provided in Article X:
(1) Fortune Stock Fund;
(2) Gallaher Fund;
(3) Value Equity Fund;
(4) Large-Cap Growth Equity Fund;
(5) Small-Cap Growth Equity Fund;
(6) International Equity Fund;
(7) S&P 500 Index Fund;
(8) Growth-Oriented Diversified Fund;
(9) Value-Oriented Diversified Fund;
(10) Corporate/Government Bond Fund;
(11) Government Securities Fund;
(12) Short-Term Investment Fund; and
(13) Frozen Fixed Fund.
The Special Trust Fund shall consist of life insurance policies purchased
pursuant to Section 5.19.
(b) Assets Pending Allocation, Investment in Investment Funds
and Maturity and Redemption. Except as otherwise provided in Section 5.19,
contributions to the Plan may be uninvested pending allocation to the Investment
Funds. The Investment Manager of each Investment Fund, or the Trustee if there
shall be no
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Investment Manager, may invest the Investment Fund in short-term investments or
hold the assets thereof uninvested pending orderly investment and to permit
distributions, reallocations and transfers therefrom.
5.02. Investment Fund Elections. Except as otherwise provided
in Section 5.19, a Participant's Account Balances and contributions allocable to
a Participant's Accounts shall be invested in the Investment Funds as follows:
(a) Initial Investment of Contributions. Except as provided in
Section 5.02(e), each Participant may elect that any Profit-Sharing
Contributions, Cash Option Contributions, Tax Deferred Contributions,
Supplemental Contributions, Company Matching Contributions and Rollover
Contributions allocable to his Accounts after January 1, 1996 be invested,
collectively with investment gains and losses allocated on a pro rata basis, in
whole increments of one percent (1%), in any one or more of the Investment
Funds. For each Participant who is an Employee of an ACCO Participating
Employer, Acushnet Participating Employer, Beam Participating Employer or
MasterBrand Participating Employer, the same investment election shall apply to
all Profit-Sharing Contributions, Cash Option Contributions, Tax Deferred
Contributions, Supplemental Contributions, Company Matching Contributions and
Rollover Contributions allocable to his Accounts. For each Participant who is an
Employee of Fortune, the same investment election shall apply to all Tax
Deferred Contributions, Company Matching Contributions and Rollover
Contributions applicable to his Accounts and a separate investment election may
apply to any Profit-Sharing Contributions applicable to his Profit-Sharing
Account.
(b) Change in Investment of New Contributions. Effective as of
the first day of any month, each Participant may elect to change his investment
elections with respect to new contributions allocable to his Accounts, in
accordance with Section 5.02(a).
(c) Interfund Transfers. Except as otherwise provided in
Section 5.02(e), effective as of the last day of any month, each Participant may
elect that his Account Balances be rearranged, in whole percentage increments of
the total balance, in any one or more of the Investment Funds. Notwithstanding
the foregoing, each Participant
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may elect that his Account Balances as of January 1, 1996 be rearranged, in
whole percentage increments of the total balance, in any one or more of the
Investment Funds. Any amount transferred pursuant to this Section 5.02(c) shall
be valued as of the same Valuation Date as the effective date of the transfer.
(d) Investment Upon Maturity, Purchase or Redemption. Account
Balances attributable to assets held in guaranteed income contracts shall, upon
maturity, purchase or redemption, be invested in accordance with the investment
elections of each Participant in effect as of the Valuation Date next succeeding
the date of maturity, purchase or redemption.
(e) Limitations on Investments.
(i) Notwithstanding the foregoing, no contributions may
be invested in the Frozen Fixed Fund or in the Gallaher Fund and no transfers
may be made into the Frozen Fixed Fund or into the Gallaher Fund.
(ii) Any transfers from the Frozen Fixed Fund shall be
made in accordance with the provisions of the respective guaranteed income
contracts in which such Investment Fund is invested; provided further that any
transfers from the Frozen Mutual Benefit GIC Fund, a subfund of the Frozen Fixed
Fund, shall be limited to the amount that can be withdrawn from the Mutual
Benefit Life Insurance Company guaranteed income contract in which the
Investment Fund is invested. The foregoing shall be subject to such additional
limitations and restrictions as the Committee may, from time to time, establish
and as may be set forth in any guaranteed income contract in which the Frozen
Fixed Fund is invested.
(f) Notice Requirement. Each Participant shall make an
election pursuant to Section 5.02(a), (b) or (c) with his Participating Employer
within a period prior to the effective date of such election as may be specified
by the Committee. Any investment election made pursuant to Section 5.02(a), (b)
or (c) shall be made in accordance with the voice response system implemented by
the Participant's Participating Employer or, if required by such Participating
Employer, by filing an investment election with such Participating Employer, on
a form approved by the Committee. Any investment election made
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pursuant to Section 5.02(a) or (b) shall remain in effect until superseded by a
subsequent investment election.
(g) Investment in Absence of Election. If a Participant fails
to make an investment election in accordance with Section 5.02(a), the
contributions referred to in Section 5.02(a) shall be invested in the Short-Term
Investment Fund, provided that, if such Participant's Participating Employer so
provides, an investment election under a Prior Plan shall remain in effect
unless changed.
5.03. Administration of Fortune Stock Fund. Subject to the
provisions of the Trust Agreement and Sections 5.15 through 5.17, the Trustee
shall administer the Fortune Stock Fund as follows:
(a) Investment. The assets of the Fortune Stock Fund,
including all income thereon and increments thereto, shall be invested primarily
in Fortune Common Stock; provided, however, that, in order to permit orderly
investment in Fortune Common Stock and pending such investment, the Trustee may
hold uninvested any monies received by it in or for the Fortune Stock Fund or
may invest in collective short-term investment funds of the Trustee.
(b) Registration Upon Distribution. Upon any distribution from
the Fortune Stock Fund as a single distribution pursuant to Section 8.01(a)(2),
all whole shares of Fortune Common Stock distributable therefrom shall be
registered in the name of the distributee and delivered to him together with any
cash from the Fortune Stock Fund to which the distributee is entitled.
(c) Distributions Other Than in Stock. Upon any distribution
from the Fortune Stock Fund pursuant to the provisions of Article VIII other
than as a single distribution pursuant to Section 8.01(a)(2), the Trustee shall
retain all shares which would otherwise be distributable to the distributee and
distribute in lieu thereof their Fair Market Value on the Valuation Date next
succeeding the event entitling the distributee thereto (or, if the event
coincides with a Valuation Date, then on that Valuation Date).
(d) Transfers Among Investment Funds. Upon any transfer from
any Investment Fund pursuant to
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the provisions of Section 5.02(c), the Trustee shall, to the extent practicable,
retain all shares which would otherwise have to be liquidated by reason of such
transfer and transfer in lieu thereof their Fair Market Value on the Valuation
Date next preceding the date as of which such transfer is to be made.
(e) Rights Exercise; Sale of Stock. To the extent practicable,
the Trustee shall exercise all rights to buy Fortune Common Stock (other than
rights within the meaning of Section 5.17, which shall be exercised only in
accordance with Section 5.17) received with respect to any shares held in the
Fortune Stock Fund. To the extent that there is insufficient cash in the Fortune
Stock Fund with which to exercise any such rights, or to make distribution or
transfer of the Fair Market Value of any stock subject to retention, the Trustee
may, in its discretion, sell such rights or retained stock or any part thereof;
in the case of any retained stock so sold the Fair Market Value thereof shall be
the net proceeds of sale instead of the Fair Market Value determined as provided
in Article I. The Trustee may also obtain cash in such other manner deemed
appropriate by the Trustee provided such other manner is permitted by applicable
law, will not affect the continued qualified status of the Plan or the
tax-exempt status of the Trust under the Code and will not result in a
"prohibited transaction" (as defined in the Code or ERISA).
5.04. Investment of Value Equity Fund. Subject to the
provisions of the Trust Agreement and of Section 5.03(e), the assets of the
Value Equity Fund, including all income thereon and increments thereto, shall be
invested and reinvested in any and all common stocks, preferred stocks and other
equity securities which the Investment Manager believes have a low price
relative to the company's earnings or cash flow, or relative to the past price
history of the stock, as shall be selected by the Investment Manager or, if
there shall be no such Investment Manager, by the Trustee; provided, however,
that the Executive Committee of the Board of Directors may determine that the
Value Equity Fund be comprised of a mutual fund having substantially the
foregoing characteristics.
5.05. Investment of Large-Cap Growth Equity Fund. Subject to
the provisions of the Trust Agreement and of Section 5.03(e), the assets of the
Large-Cap
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Growth Equity Fund, including all income thereon and increments thereto, shall
be invested and reinvested primarily in stocks of medium to large-size companies
with above-average earnings or sales growth, as selected by the Investment
Manager or, if there shall be no such Investment Manager, by the Trustee;
provided, however, that the Executive Committee of the Board of Directors may
determine that the Large-Cap Growth Equity Fund be comprised of a mutual fund
having substantially the foregoing characteristics.
5.06. Investment of Small-Cap Growth Equity Fund. Subject to
the provisions of the Trust Agreement and of Section 5.03(e), the assets of the
Small-Cap Growth Equity Fund, including all income thereon and increments
thereto, shall be invested and reinvested primarily in small to medium-size
companies that are early in their life cycle but which have the potential to
become major enterprises (emerging growth companies), as selected by the
Investment Manager or, if there shall be no such Investment Manager, by the
Trustee; provided, however, that the Executive Committee of the Board of
Directors may determine that the Small-Cap Growth Equity Fund be comprised of a
mutual fund having substantially the foregoing characteristics.
5.07. Investment of International Equity Fund. Subject to the
provisions of the Trust Agreement and of Section 5.03(e), the assets of the
International Equity Fund, including all income thereon and increments thereto,
shall be invested and reinvested primarily in stocks of companies incorporated
outside the United States, as selected by the Investment Manager or, if there
shall be no such Investment Manager, by the Trustee; provided, however, that the
Executive Committee of the Board of Directors may determine that the
International Equity Fund be comprised of a mutual fund having substantially the
foregoing characteristics.
5.08. Investment of S&P 500 Index Fund. Subject to the
provisions of the Trust Agreement and of Section 5.03(e), the assets of the S&P
500 Index Fund, including all income thereon and increments thereto, shall be
invested and reinvested in a mutual fund that invests in five hundred (500)
stocks that make up the S&P 500 proportionately to each stock weighting in the
index, as selected by the Executive Committee of the Board of Directors.
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5.09. Investment of Growth-Oriented Diversified Fund. Subject
to the provisions of the Trust Agreement and of Section 5.03(e), the assets of
the Growth-Oriented Diversified Fund, including all income thereon and
increments thereto, shall be invested and reinvested in such bonds, debentures,
notes, equipment trust certificates, investment trust certificates, preferred
stocks, common stocks, other securities (including any bonds, debentures, stock
and other securities of Fortune) primarily of companies with strong financial
characteristics and good long-term prospects for above-average earnings or sales
growth, or other properties, not necessarily of the nature hereinbefore
itemized, as shall be selected by the Investment Manager or, if there shall be
no such Investment Manager, by the Trustee; provided, however, that the
Executive Committee of the Board of Directors may determine that the
Growth-Oriented Diversified Fund be comprised of a mutual fund having
substantially the foregoing characteristics.
5.10. Investment of Value-Oriented Diversified Fund. Subject
to the provisions of the Trust Agreement and of Section 5.03(e), the assets of
the Value-Oriented Diversified Fund, including all income thereon and increments
thereto, shall be invested and reinvested primarily in companies which have a
low price relative to the company's earnings or cash flow, or relative to the
past price history of the stock, as selected by the Investment Manager or, if
there shall be no such Investment Manager, by the Trustee; provided, however,
that the Executive Committee of the Board of Directors may determine that the
Value-Oriented Diversified Fund be comprised of a mutual fund having
substantially the foregoing characteristics.
5.11. Investment of Corporate/Government Bond Fund. Subject to
the provisions of the Trust Agreement and of Section 5.03(e), the assets of the
Corporate/Government Bond Fund, including all income thereon and increments
thereto, shall be invested and reinvested primarily in investment grade
corporate bonds, bonds issued by the United States Government or its agencies,
domestic bank obligations and commercial paper, as selected by the Investment
Manager or, if there shall be no such Investment Manager, by the Trustee;
provided, however, that the Executive Committee of the Board of Directors may
determine that the Corporate/Government
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Bond Fund be comprised of a mutual fund having substantially the foregoing
characteristics.
5.12. Investment of Government Securities Fund. Subject to the
provisions of the Trust Agreement and of Section 5.03(e), the assets of the
Government Securities Fund, including all income thereon and increments thereto,
shall be invested and reinvested primarily in such obligations issued or
guaranteed by the United States Government or its agencies, or by any State or
local government or their agencies, as shall be selected by the Investment
Manager or, if there shall be no such Investment Manager, by the Trustee;
provided, however, that the Executive Committee of the Board of Directors may
determine that the Government Securities Fund be comprised of a mutual fund
having substantially the foregoing characteristics.
5.13. Investment of Short-Term Investment Fund. Subject to the
provisions of the Trust Agreement and of Section 5.03(e), the assets of the
Short-Term Investment Fund, including all income thereon and increments thereto,
shall be invested and reinvested in bonds, debentures, mortgages, equipment or
other trust certificates, notes, obligations issued by or guaranteed by the
United States Government or its agencies, domestic bank certificates of deposit,
domestic bankers' acceptances and repurchase agreements, and high grade
commercial paper, all of which shall bear a fixed rate of return and are
intended to minimize market fluctuations, as shall be selected by the Investment
Manager, or if there shall be no such Investment Manager, by the Trustee (which
may include investment in the Trustee's short-term collective investment fund);
provided, however, that the Executive Committee of the Board of Directors may
determine that the Short-Term Investment Fund be comprised of a mutual fund
having substantially the foregoing characteristics.
5.14. Investment of Frozen Fixed Fund. Subject to the
provisions of the Trust Agreement and of Section 5.03(e), the assets of the
Frozen Fixed Fund, including all income thereon and increments thereto, shall be
invested in guaranteed income contracts acquired prior to 1996 with several
insurance companies and shall consist of one or more subfunds, including the
Frozen Mutual Benefit GIC Fund which is invested in a guaranteed
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income contract issued by Mutual Benefit Life Insurance Company.
5.15. Voting of Shares in Fortune Stock Fund.
(a) Trustee Voting. Notwithstanding any other provision of the
Plan or the Trust Agreement to the contrary, the Trustee shall have no
discretion or authority to exercise any voting rights with respect to Fortune
Common Stock held in the Fortune Stock Fund except as provided in this Section
5.15.
(b) Participant Direction. Each Participant, former
Participant or Beneficiary shall be entitled to direct the Trustee in writing,
and the Trustee shall solicit the written direction of such Participant, former
Participant or Beneficiary, as to the manner in which any voting rights of
shares of Fortune Common Stock attributable to his interest in the Fortune Stock
Fund are to be exercised with respect to any matter on which holders of Fortune
Common Stock are entitled to vote by proxy, consent or otherwise, and the
Trustee shall exercise the voting rights of such shares with respect to such
matter in accordance with the last-dated timely written direction received by
the Trustee from such Participant, former Participant or Beneficiary. With
respect to the voting rights of shares of Fortune Common Stock held in the
Fortune Stock Fund as to which timely written directions have not been received
by the Trustee as provided in the preceding sentence, the Trustee shall exercise
the voting rights of such shares in the same manner and in the same proportion
in which the voting rights of shares as to which such directions were received
by the Trustee are to be exercised as provided in the preceding sentence. The
Trustee shall combine fractional interests of Participants, former Participants
and Beneficiaries in shares of Fortune Common Stock held in the Fortune Stock
Fund to the extent possible so that the voting rights with respect to such
matter are exercised in a manner which reflects as accurately as possible the
collective directions given by Participants, former Participants and
Beneficiaries. In giving directions to the Trustee as provided in this Section
5.15(b), each Participant, former Participant or Beneficiary shall be acting as
a named fiduciary within the meaning of Section 403(a)(1) of ERISA ("Named
Fiduciary") with respect to the exercise of voting rights of shares of Fortune
Common Stock in accordance with such
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directions pursuant to both the first and the second sentences of this Section
5.15(b). For purposes of this Section 5.15, the number of shares of Fortune
Common Stock attributable at any particular time to the interest of a
Participant, former Participant or Beneficiary in the Fortune Stock Fund shall
be the product of the total number of shares then held in the Fortune Stock Fund
multiplied by a fraction the numerator of which is the amount allocated to the
Fortune Stock Fund then in his Accounts and the denominator of which is the
amount allocated to the Fortune Stock Fund then in the Accounts of all
Participants, former Participants and Beneficiaries.
(c) Trustee to Communicate Voting Procedures. The Trustee
shall communicate or cause to be communicated to all Participants, former
Participants and Beneficiaries the procedures regarding the exercise of voting
rights of shares of Fortune Common Stock held in the Fortune Stock Fund. The
Trustee shall distribute or cause to be distributed as promptly as possible to
all Participants, former Participants and Beneficiaries entitled to give
directions to the Trustee as to the exercise of voting rights with respect to
any matter all communications and other materials, if any, that the Trustee may
receive from any person or entity (including the Participating Employers) that
are being distributed to the holders of Fortune Common Stock and either are
directed generally to such holders or relate to any matter on which holders of
Fortune Common Stock are entitled to vote by proxy, consent or otherwise, and
the Participating Employers shall promptly furnish to the Trustee all such
communications and other materials, if any, as are being distributed by or on
behalf of Fortune. The Participating Employers and the Committee shall provide
the Trustee with such information, documents and assistance as the Trustee may
reasonably request in connection with any communications or distributions to
Participants, former Participants and Beneficiaries as aforesaid. This
information shall include the names and current addresses of Participants,
former Participants and Beneficiaries and the number of shares of Fortune Common
Stock credited to the accounts of each of them, upon which the Trustee may
conclusively rely. Anything to the contrary in this Section 5.15, the Plan or
the Trust Agreement notwithstanding, except if the Participating Employers serve
as recordkeeper, to the extent necessary to provide the Participating Employers
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with information necessary accurately to maintain records of the interest in the
Plan of Participants, former Participants and Beneficiaries, the Trustee shall
use its best efforts to keep confidential the direction (or the absence thereof)
from each Participant, former Participant or Beneficiary in connection with the
exercise of voting rights of shares of Fortune Common Stock held in the Fortune
Stock Fund and the identity of such Participant, former Participant or
Beneficiary and not to divulge such direction or identity to any person or
entity, including, without limitation, Fortune, any other Participating Employer
and any Non-Participating Employer and any director, officer, employee or agent
thereof, it being the intent of this Section 5.15 that Fortune, each other
Participating Employer, and each Non-Participating Employer and their directors,
officers, employees and agents not be able to ascertain the direction given (or
not given) by any Participant, former Participant or Beneficiary in connection
with the exercise of voting rights of such shares.
(d) Invalidity. In the event that a court of competent
jurisdiction shall issue an opinion, order or decree which, in the opinion of
counsel to Fortune or the Trustee, shall, in all or any particular
circumstances, invalidate under ERISA or otherwise any provision or provisions
of the Plan or the Trust Agreement with respect to the exercise of voting rights
of shares of Fortune Common Stock held in the Fortune Stock Fund, or cause any
such provision or provisions to conflict with ERISA, or require the Trustee not
to act or such voting rights not to be exercised in accordance with such
provision or provisions, then, upon written notice thereof to the Trustee, in
the case of an opinion of counsel to Fortune, or to Fortune, in the case of an
opinion of counsel to the Trustee, such provision or provisions shall be given
no further force or effect in such circumstances. Except to the extent otherwise
specified in such opinion, order or decree, the Trustee shall nevertheless have
no discretion or authority in such circumstances to exercise voting rights with
respect to shares of Fortune Common Stock held in the Fortune Stock Fund, but
shall exercise such voting rights in accordance with the last-dated timely
written directions received from Participants, former Participants and
Beneficiaries to the extent such directions have not been invalidated. To the
extent the Trustee exercises any fiduciary responsibility it may have in any
circumstances
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with respect to any exercise of voting rights of shares of Fortune Common Stock
held in the Fortune Stock Fund, the Trustee in exercising its fiduciary
responsibility, unless pursuant to the requirements of ERISA or otherwise it is
unlawful to do so, (1) shall take into account directions timely received from
Participants, former Participants and Beneficiaries as being the most indicative
of their best interests with respect to the exercise of such voting rights and
(2) shall take into consideration, in addition to any relevant financial factors
bearing on any exercise of such voting rights, the continuing job security of
Participants as employees of the Participating Employers, conditions of
employment, employment opportunities and similar matters and the prospects of
Participants, former Participants and Beneficiaries for benefits under the Plan
and may also take into consideration such other relevant non-financial factors
as the Trustee deems appropriate.
5.16. Tendering of Shares in Fortune Stock Fund.
(a) Tender by Trustee. Notwithstanding any other provision of
the Plan or the Trust Agreement to the contrary, the Trustee shall have no
discretion or authority to tender, deposit, sell, exchange or transfer any
shares of Fortune Common Stock (which, for purposes of this Section 5.16, shall
include any rights within the meaning of Section 5.17(a)) held in the Fortune
Stock Fund pursuant to any tender offer (as defined herein) except as provided
in this Section 5.16. For purposes of this Section 5.16, a "tender offer" shall
mean any tender or exchange offer for or request or invitation for tenders or
exchanges of shares of Fortune Common Stock the consummation of which would
result in any "person" or "group" (within the meaning of Section 13(d) or 14(d)
of the Securities Exchange Act of 1934, as amended), or any affiliates or
associates thereof, becoming the beneficial owner of 10% or more of the then
outstanding shares of Fortune Common Stock and shall include, without
limitation, any such tender offer made by or on behalf of Fortune.
(b) Participant Direction. Each Participant, former
Participant or Beneficiary shall be entitled to direct the Trustee in writing,
and the Trustee shall solicit the written direction of such Participant, former
Participant or Beneficiary, as to the tendering,
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depositing, selling, exchanging or transferring of shares of Fortune Common
Stock attributable to his interest in the Fortune Stock Fund pursuant to any
tender offer, and the Trustee shall tender, deposit, sell, exchange or transfer
such shares (or shall retain such shares in the Fortune Stock Fund) pursuant to
such tender offer in accordance with the last-dated timely written direction
received by the Trustee from such Participant, former Participant or
Beneficiary. With respect to shares of Fortune Common Stock held in the Fortune
Stock Fund as to which timely written directions have not been received by the
Trustee from Participants, former Participants and Beneficiaries to whose
interests in the Fortune Stock Fund such shares are attributable, such
Participants, former Participants and Beneficiaries shall be deemed to have
directed the Trustee that such shares be retained in the Fortune Stock Fund
subject to all provisions of the Plan and the Trust Agreement and not be
tendered, deposited, sold, exchanged or transferred pursuant to such tender
offer, and the Trustee shall not tender, deposit, sell, exchange or transfer any
of such shares pursuant thereto. In the event that, under the terms of such
tender offer or otherwise, any shares of Fortune Common Stock tendered or
deposited pursuant thereto may be withdrawn, the Trustee shall use its best
efforts to solicit the written direction of each Participant, former Participant
or Beneficiary as to the exercise of withdrawal rights with respect to shares of
Fortune Common Stock that have been tendered or deposited pursuant to this
Section 5.16, and the Trustee shall exercise (or refrain from exercising) such
withdrawal rights in the same manner as shall reflect the last dated timely
written directions received with respect to the exercise of such withdrawal
rights. The Trustee shall not withdraw shares except pursuant to a timely
written direction of a Participant, former Participant or Beneficiary. The
Trustee shall combine fractional interests of Participants, former Participants
and Beneficiaries in shares of Fortune Common Stock held in the Fortune Stock
Fund to the extent possible so that such shares are tendered, deposited, sold,
exchanged or transferred, and withdrawal rights with respect thereto are
exercised, in a manner which reflects as accurately as possible the collective
directions given or deemed to have been given by Participants, former
Participants and Beneficiaries in accordance with this Section 5.16. In giving
or being deemed to have given directions to the Trustee as provided in this
Section 5.16(b), each
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Participant, former Participant or Beneficiary shall be acting as a Named
Fiduciary with respect to the tender, deposit, sale, exchange or transfer of
shares of Fortune Common Stock (or the retention of such shares in the Fortune
Stock Fund) in accordance with such directions pursuant to both the first and
second sentences of this Section 5.16(b) and the exercise of (or the refraining
from exercising) withdrawal rights with respect to shares of Fortune Common
Stock tendered or deposited pursuant to the third sentence of this Section
5.16(b).
(c) Trustee to Communicate Tender Procedures. In the event of
a tender offer as to which Participants, former Participants and Beneficiaries
are entitled to give directions as provided in this Section 5.16, the Trustee
shall communicate or cause to be communicated to all Participants, former
Participants and Beneficiaries entitled to give directions the procedures
relating to their right to give directions as Named Fiduciaries to the Trustee
and in particular the consequences of any failure to provide timely written
direction to the Trustee. In the event of such a tender offer, the Trustee shall
distribute or cause to be distributed as promptly as possible to all
Participants, former Participants and Beneficiaries entitled to give directions
to the Trustee with respect to such tender offer all communications and other
materials, if any, that the Trustee may receive from any person or entity
(including the Participating Employers) that are being distributed to the
holders of the securities to whom such tender offer is directed and either are
directed generally to such holders or relate to such tender offer, and the
Participating Employers shall promptly furnish to the Trustee all such
communications and other materials, if any, as are being distributed by or on
behalf of Fortune. The Participating Employers and the Committee shall provide
the Trustee with such information, documents and assistance as the Trustee may
reasonably request in connection with any communications or distributions to
Participants, former Participants and Beneficiaries as aforesaid. This
information shall include the names and current addresses of Participants,
former Participants and Beneficiaries and the number of shares of Fortune Common
Stock credited to the accounts of each of them, upon which the Trustee may
conclusively rely. Anything to the contrary in this Section 5.16, the Plan or
the Trust Agreement notwithstanding, except if the Participating Employers serve
as recordkeeper, to the
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extent necessary to provide the Participating Employers with information
necessary accurately to maintain records of the interest in the Plan of
Participants, former Participants and Beneficiaries, the Trustee shall use its
best efforts to keep confidential the direction (or the absence thereof) from
each Participant, former Participant or Beneficiary with respect to any tender
offer and the identity of such Participant, former Participant or Beneficiary
and not to divulge such direction or identity to any person or entity,
including, without limitation, Fortune, any other Participating Employer and any
Non-Participating Employer and any director, officer, employee or agent thereof,
it being the intent of this Section 5.16 that Fortune, each other Participating
Employer and each Non-Participating Employer and their directors, officers,
employees and agents not be able to ascertain the direction given (or not given)
or deemed to have been given by any Participant, former Participant or
Beneficiary with respect to any tender offer.
(d) Invalidity. In the event that a court of competent
jurisdiction shall issue an opinion, order or decree which, in the opinion of
counsel to Fortune or the Trustee, shall, in all or any particular
circumstances, invalidate under ERISA or otherwise any provision or provisions
of the Plan or the Trust Agreement with respect to the tendering, depositing,
sale, exchange or transfer of shares of Fortune Common Stock held in the Fortune
Stock Fund or the exercise of any withdrawal rights with respect to shares
tendered or deposited pursuant to a tender offer, or cause any such provision or
provisions to conflict with ERISA, or require the Trustee not to act or such
shares not to be tendered, deposited, sold, exchanged or transferred or such
withdrawal rights not to be exercised in accordance with such provision or
provisions, then, upon written notice thereof to the Trustee, in the case of an
opinion of counsel to Fortune, or to Fortune, in the case of an opinion of
counsel to the Trustee, such provision or provisions shall be given no further
force or effect in such circumstances. Except to the extent otherwise specified
in such opinion, order or decree, the Trustee shall nevertheless have no
discretion or authority in such circumstances to tender, deposit, sell, transfer
or exchange shares of Fortune Common Stock held in the Fortune Stock Fund (or
the retention of such shares in the Fortune Stock Fund) pursuant to a tender
offer or
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with respect to the exercise of (or refraining from exercising) any withdrawal
rights with respect to shares tendered or deposited pursuant to a tender offer,
but shall act in accordance with the last-dated timely written directions
received from Participants, former Participants and Beneficiaries to the extent
such directions have not been invalidated. To the extent the Trustee exercises
any fiduciary responsibility it may have in any circumstances with respect to
the tendering, depositing, sale, exchange or transfer of shares of Fortune
Common Stock held in the Fortune Stock Fund or the exercise of any withdrawal
rights with respect to shares tendered or deposited pursuant to a tender offer,
the Trustee in exercising its fiduciary responsibility, unless pursuant to the
requirements of ERISA or otherwise it is unlawful to do so, (1) shall take into
account directions timely received from Participants, former Participants and
Beneficiaries as being the most indicative of their best interests with respect
to a tender offer and (2) shall take into consideration, in addition to any
relevant financial factors bearing on any sale, exchange or transfer or any
exercise of withdrawal rights, the continuing job security of Participants as
employees of the Participating Employers, conditions of employment, employment
opportunities and similar matters and the prospects of Participants, former
Participants and Beneficiaries for benefits under the Plan and may also take
into consideration such other relevant nonfinancial factors as the Trustee deems
appropriate.
(e) Proceeds of Tender. The proceeds of any sale, exchange or
transfer of shares of Fortune Common Stock pursuant to the direction of a
Participant, former Participant or Beneficiary in accordance with this Section
5.16 shall be allocated to his Accounts in the same manner, in the same
proportion and as of the same date as were the shares sold, exchanged or
transferred and shall be governed by the provisions of this Section 5.16(e) and
all other applicable provisions of the Plan and the Trust Agreement. Such
proceeds shall be deemed to be held in the Fortune Stock Fund and shall be
subject to this Section 5.16(e) and the other applicable provisions of the Plan
and the Trust Agreement; provided, however, that, to the extent necessary to
segregate any return, loss, gain or income on or from such proceeds (or on or
from any reinvestment thereof) from any return, loss, gain or income on or from
the remainder of the Fortune Stock Fund, the Committee shall take or cause to
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be taken all such action so that (1) such proceeds (and any income or proceeds
therefrom) shall be segregated and held by the Trustee in one or more separate
Investment Funds and (2) appropriate adjustments shall be made from time to time
in the amount allocated to the Fortune Stock Fund in the Accounts. Any such
separate Investment Fund shall be otherwise governed by the other applicable
provisions of the Plan and the Trust Agreement. Any such proceeds (and any
income or proceeds therefrom) shall be invested or reinvested in the same type
of instruments and in the same manner as provided in Section 5.13 with respect
to the Short-Term Investment Fund and subject to the same provisions in the Plan
and the Trust Agreement governing investment and reinvestment of the Short-Term
Investment Fund.
5.17. Exercise of Certain Rights Held in Fortune Stock Fund.
(a) Trustee Exercise of Preferred Share Purchase Rights.
Notwithstanding any other provision of the Plan or the Trust Agreement to the
contrary, the Trustee shall have no discretion or authority to sell, exercise,
exchange or retain any Preferred Share Purchase Rights of Fortune (or any rights
issued by Fortune in substitution or replacement therefor) held in the Fortune
Stock Fund ("rights") except as provided in this Section 5.17; provided,
however, that the sale, retention or taking of any other action relating to
rights pursuant to any tender offer shall be governed by the provisions of
Section 5.16 and not by the provisions of this Section 5.17; and provided,
further, that, in connection with any transfer of shares of Fortune Common Stock
held in the Fortune Stock Fund as provided in the Plan or the Trust Agreement,
the Trustee shall transfer with such shares any rights that are not then
transferable separately from such shares.
(b) Participant Direction. In the event that any rights held
in the Fortune Stock Fund shall become transferable separately from the shares
of Fortune Common Stock held in the Fortune Stock Fund or shall become
exercisable, each Participant, former Participant or Beneficiary shall be
entitled to direct the Trustee in writing, and the Trustee shall solicit the
written direction of such Participant, former Participant or Beneficiary, to
sell, exercise or exchange the rights which are attributable to his interest in
the Fortune
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Stock Fund or to retain such rights in the Fortune Stock Fund, and the Trustee
shall sell, exercise, exchange or retain such rights in accordance with the
last-dated timely written direction received by the Trustee from such
Participant, former Participant or Beneficiary; provided, however, in the case
of a Participant, former Participant or Beneficiary who directs the exercise of
such rights, the rights shall be exercised only to the extent cash is available
in the Participant's, former Participant's or Beneficiary's accounts in the
Fortune Stock Fund or cash can be obtained pursuant to paragraph (e) of this
Section 5.17. With respect to rights as to which timely written directions have
not been received by the Trustee as provided in the preceding sentence, the
Trustee shall in its sole discretion sell, exercise, exchange or retain such
rights. The Trustee shall combine fractional interests in rights of
Participants, former Participants and Beneficiaries who have given timely
written directions as provided in the first sentence of this Section 5.17(b) to
the extent possible so that the rights attributable to their interests in the
Fortune Stock Fund are sold, exercised, exchanged or retained in a manner which
reflects as accurately as possible the collective directions given by them. In
giving directions to the Trustee as provided in this Section 5.17(b), each
Participant, former Participant or Beneficiary shall be acting as a Named
Fiduciary with respect to the sale, exercise, exchange or retention of rights in
accordance with such directions.
(c) Trustee to Communicate Exercise Procedures. In the event
that any rights shall become transferable separately from the shares of Fortune
Common Stock held in the Fortune Stock Fund or shall become exercisable, the
Trustee shall communicate or cause to be communicated to all Participants,
former Participants and Beneficiaries entitled to give directions with respect
thereto as provided in this Section 5.17 the procedures relating to their right
to give directions as Named Fiduciaries to the Trustee and in particular the
consequences of any failure to provide timely written directions to the Trustee
and shall distribute or cause to be distributed as promptly as possible to such
Participants, former Participants and Beneficiaries all communications and other
materials, if any, that the Trustee may receive from any person or entity
(including the Participating Employers) that are being distributed to holders of
such rights and either are directed
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generally to such holders or relate to such rights, and the Participating
Employers shall promptly furnish to the Trustee all such communications and
other materials, if any, as are being distributed by or on behalf of Fortune.
The Participating Employers and the Committee shall provide the Trustee with
such information, documents and assistance as the Trustee may reasonably request
in connection with any communications or distributions to Participants, former
Participants and Beneficiaries as aforesaid. This information shall include the
names and current addresses of Participants, former Participants and
Beneficiaries, the number of rights credited to the accounts of each of them and
the amount of cash available in their Accounts in the Fortune Stock Fund, upon
which the Trustee may conclusively rely. Anything to the contrary in this
Section 5.17, the Plan or the Trust Agreement notwithstanding, except if the
Participating Employers serve as recordkeeper, to the extent necessary to
provide the Participating Employers with information necessary accurately to
maintain records of the interest in the Plan of Participants, former
Participants and Beneficiaries, the Trustee shall use its best efforts to keep
confidential the direction (or the absence thereof) from each Participant,
former Participant or Beneficiary with respect to such rights and the identity
of such Participant, former Participant or Beneficiary and not to divulge such
direction or identity to any person or entity, including, without limitation,
Fortune, any other Participating Employer and any other Non-Participating
Employer and any director, officer, employee or agent thereof, it being the
intent of this Section 5.17 that Fortune, each other Participating Employer and
each other Non-Participating Employer and their directors, officers, employees
and agents not be able to ascertain the direction given (or not given) by any
Participant, former Participant or Beneficiary with respect to any rights.
(d) Invalidity. In the event that a court of competent
jurisdiction shall issue an opinion, order or decree which, in the opinion of
counsel to Fortune or the Trustee, shall, in all or any particular
circumstances, invalidate under ERISA or otherwise any provision or provisions
of the Plan or the Trust Agreement with respect to the sale, exercise, exchange
or retention of any rights held in the Fortune Stock Fund, or cause any such
provision or provisions to conflict with ERISA, or require the Trustee not to
act or such rights not to be sold, exercised, exchanged or retained in
accordance with
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such provision or provisions, then, upon written notice thereof to the Trustee,
in the case of an opinion of counsel to Fortune, or to Fortune, in the case of
an opinion of counsel to the Trustee, such provision or provisions shall be
given no further force or effect in such circumstances. Except to the extent
otherwise specified in such opinion, order or decree, the Trustee shall
nevertheless have no discretion or authority in such circumstances to sell,
exercise, exchange or retain such rights as to which written directions were
received from Participants, former Participants and Beneficiaries, but shall act
with respect to such rights in accordance with the last-dated timely written
directions received from Participants, former Participants and Beneficiaries to
the extent such directions have not been invalidated. To the extent the Trustee
exercises any discretion or fiduciary responsibility it may have in any
circumstances with respect to the sale, exercise, exchange or retention of any
rights held in the Fortune Stock Fund, the Trustee in exercising its fiduciary
responsibility, unless pursuant to the requirements of ERISA or otherwise it is
unlawful to do so, (1) shall take into account directions timely received from
Participants, former Participants and Beneficiaries as being the most indicative
of their best interests with respect to the sale, exercise, exchange or
retention of such rights and (2) shall take into consideration, in addition to
any relevant financial factors bearing on any sale, exercise, exchange or
retention of such rights, the continuing job security of Participants as
employees of the Participating Employers, conditions of employment, employment
opportunities and similar matters and the prospects of Participants, former
Participants and Beneficiaries for benefits under the Plan and may also take
into consideration such other relevant non-financial factors as the Trustee
deems appropriate.
(e) Funds for Exercise of Preferred Share Purchase Rights. If
practicable and to the extent necessary to exercise rights attributable to the
interest of any Participant, former Participant or Beneficiary in the Fortune
Stock Fund, the Trustee shall sell such portion of the rights attributable to
such interest as will enable the Trustee to apply the proceeds therefrom to the
exercise of the remaining portion of such rights or the Trustee may obtain cash
in such other manner deemed appropriate by the Trustee provided such other
manner is permitted by applicable law, will not affect
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the continued qualified status of the Plan or the tax-exempt status of the Trust
under the Code and will not result in a "prohibited transaction" (as defined in
the Code or ERISA).
(f) Allocation of Proceeds. The proceeds of any sale, exercise
or exchange of rights pursuant to the direction of a Participant, former
Participant or Beneficiary in accordance with this Section 5.17 shall be
allocated to his Account in the same manner, in the same proportion and as of
the same date as were the shares to which the sold, exercised or exchanged
rights were attributable and shall be governed by the provisions of this Section
5.17(f) and all other applicable provisions of the Plan and the Trust Agreement.
Such proceeds shall be deemed to be held in the Fortune Stock Fund and shall be
subject to this Section 5.17(f) and the other applicable provisions of the Plan
and the Trust Agreement; provided, however, that, to the extent necessary to
segregate any return, loss, gain or income on or from such proceeds (or on or
from any reinvestment thereof) from any return, loss, gain or income on or from
the remainder of the Fortune Stock Fund, the Committee shall take or cause to be
taken all such action so that (1) such proceeds and any income or proceeds
therefrom shall be segregated and held by the Trustee in one or more separate
Investment Funds and (2) appropriate adjustments shall be made from time to time
in the amount allocated to the Fortune Stock Fund in the Accounts. Any such
separate Investment Funds shall be otherwise governed by the other applicable
provisions of the Plan and the Trust Agreement. Any such proceeds (and any
income or proceeds therefrom) shall be invested or reinvested in the same type
of instruments and in the same manner as provided in Section 5.13 with respect
to the Short-Term Investment Fund and subject to the same provisions of the Plan
and the Trust Agreement governing the investment and reinvestment of the
Short-Term Investment Fund.
5.18. Valuation of Investment Funds. As of each Valuation
Date, the Trustee shall report to the Committee the Fair Market Value of the
assets of each Investment Fund as of such Valuation Date. The Fair Market Value
of an Investment Fund shall be the value of such Investment Fund as of such
Valuation Date.
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5.19. Investment in Life Insurance Policies. Notwithstanding
the foregoing, any Participant employed by an ACCO Participating Employer who
was a participant in the ACCO World Corporation Profit-Sharing Plan on December
31, 1988, and whose Cash Option Account, as of December 31, 1988, was invested
in whole or in part in life insurance policies on the life of such Participant
payable to a Beneficiary, may direct that an amount from the vested portion of
his Accounts be applied to purchase one (1) or more life insurance policies
(which shall be ordinary life or any other form of life insurance providing a
greater reserve accumulation) on the life of the Participant payable to his
Beneficiary. Whenever all or any part of a Participant's Account Balances are
applied to the purchase of life insurance policies, the amount representing such
vested Account Balances or part thereof shall be reduced in the following order:
(a) any Cash Option Account; (b) any Profit-Sharing Account; (c) any Company
Matching Account; (d) any Tax Deferred Account; and (e) any Rollover Account. In
the event that any part of a Participant's Account Balance is applied to
purchase any life insurance policies pursuant to this Section 5.19, the amounts
allocated therein to the Investment Funds shall be reduced on a pro rata basis.
Legal title to each such policy shall be vested in the Special Trustee and held
as part of such Special Trust Fund, although not treated as an asset for
allocation purposes; provided that, upon Severance From Service other than by
death, each such policy shall be distributed to such Participant as his absolute
property.
5.20. Administration of the Gallaher Fund.
(a) ADRs with respect to Gallaher stock ("Gallaher ADRs")
received by the Fortune Stock Fund in the Gallaher Spin-Off shall be transferred
to the Gallaher Fund.
(b) Distributions With Respect to Gallaher ADRs. The proceeds
of any distribution received by the Gallaher Fund with respect to Gallaher ADRs
shall be invested in the other Investment Funds on a pro rata basis in
accordance with each Participant's current investment election under Section
5.02 for Tax Deferred Contributions. Nothing in this Section 5.20(b), however,
restricts the Trustee's ability to retain in the Gallaher Fund any additional
Gallaher ADRs received as a result of a stock dividend, stock split or similar
transaction. Contributions shall not be invested in the Gallaher Fund, nor may
any transfers be made to the Gallaher Fund from any of the other Investment
Funds.
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5.21. Voting of Shares in Gallaher Fund.
(a) Notwithstanding any other provision of the Plan or the
Trust Agreement to the contrary, the Trustee shall have no discretion or
authority to provide any voting instructions with respect to Gallaher ADRs held
in the Gallaher Fund except as provided in this Section 5.21.
(b) Participant Direction. Each Participant, former
Participant or Beneficiary shall be entitled to direct the Trustee in writing,
and the Trustee shall solicit the written direction of such Participant, former
Participant or Beneficiary, as to the manner in which the Gallaher ADR
depositary should be instructed to vote the Gallaher shares underlying the
Gallaher ADRs attributable to his interest in the Gallaher Fund. The Trustee
shall instruct the Gallaher ADR depositary that such Gallaher ADRs be voted with
respect to any matter in accordance with the last-dated timely written direction
received by the Trustee from such Participant, former Participant or
Beneficiary. With respect to the voting of Gallaher ADRs held in the Gallaher
Fund as to which timely written directions have not been received by the
Trustee, the Trustee shall instruct the Gallaher ADR depositary to vote the
Gallaher shares underlying the Gallaher ADRs in the same manner and in the same
proportion in which the Gallaher ADRs as to which such directions were timely
received by the Trustee are to be voted. The Trustee shall combine fractional
interests of Participants, former Participants and Beneficiaries in Gallaher
ADRs held in the Gallaher Fund to the extent possible so that the voting
instructions to the Gallaher ADR depositary with respect to such matter are
provided in a manner which reflects as accurately as possible the collective
directions given by Participants, former Participants and Beneficiaries. In
giving directions to the Trustee as provided in this Section 5.21(b), each
Participant, former Participant or Beneficiary shall be acting as a named
fiduciary within the meaning of Section 403(a)(1) of ERISA ("Named Fiduciary")
with respect to the voting rights of Gallaher ADRs in accordance with such
directions pursuant to this Section 5.21(b).
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(c) Trustee to Communicate Voting Procedures. The Trustee
shall communicate or cause to be communicated to all Participants, former
Participants and Beneficiaries the procedures regarding the voting of Gallaher
ADRs held in the Gallaher Fund. The Trustee shall distribute or cause to be
distributed as promptly as possible to all Participants, former Participants and
Beneficiaries entitled to give directions to the Trustee as to voting with
respect to any matter all communications and other materials, if any, that the
Trustee may receive from any person or entity that are being distributed to the
holders of Gallaher ADRs and either are directed generally to such holders or
relate to any matter on which holders of Gallaher ADRs are entitled to provide
voting instructions by proxy, consent or otherwise, and the Participating
Employers shall promptly furnish to the Trustee all such communications and
other materials, if any, as are being distributed by or on behalf of Gallaher.
The Participating Employers and the Committee shall provide the Trustee with
such information, documents and assistance as the Trustee may reasonably request
in connection with any communications or distributions to Participants, former
Participants and Beneficiaries as aforesaid. This information shall include the
names and current addresses of Participants, former Participants and
Beneficiaries and the Gallaher ADRs credited to the accounts of each of them,
upon which the Trustee may conclusively rely. Anything to the contrary in this
Section 5.21, the Plan or the Trust Agreement notwithstanding, except if the
Participating Employers serve as recordkeeper, to the extent necessary to
provide the Participating Employers with information necessary accurately to
maintain records of the interest in the Plan of Participants, former
Participants and Beneficiaries, the Trustee shall use its best efforts to keep
confidential the direction (or the absence thereof) from each Participant,
former Participant or Beneficiary in connection with the voting of Gallaher ADRs
held in the Gallaher Fund and the identity of such Participant, former
Participant or Beneficiary and not to divulge such direction or identity to any
person or entity, including, without limitation, Gallaher, Fortune, any other
Participating Employer and any Non-Participating Employer and any director,
officer, employee or agent thereof, it being the intent of this Section 5.21
that Gallaher, Fortune, each other Participating Employer, and each
Non-Participating Employer and their directors, officers, employees and agents
not be able to ascertain the
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direction given (or not given) by any Participant, former Participant or
Beneficiary in connection with the voting of Gallaher ADRs.
(d) Invalidity. In the event that a court of competent
jurisdiction shall issue an opinion, order or decree which, in the opinion of
counsel to Fortune or the Trustee, shall, in all or any particular
circumstances, invalidate under ERISA or otherwise any provision or provisions
of the Plan or the Trust Agreement with respect to the voting of Gallaher ADRs
held in the Gallaher Fund, or cause any such provision or provisions to conflict
with ERISA, or require the Trustee not to act or such voting rights not to be
exercised in accordance with such provision or provisions, then, upon written
notice thereof to the Trustee, in the case of an opinion of counsel to Fortune,
or to Fortune, in the case of an opinion of counsel to the Trustee, such
provision or provisions shall be given no further force or effect in such
circumstances. Except to the extent otherwise specified in such opinion, order
or decree, the Trustee shall nevertheless have no discretion or authority in
such circumstances to provide voting instructions with respect to Gallaher ADRs
held in the Gallaher Fund, but shall exercise such voting rights in accordance
with the last-dated timely written directions received from Participants, former
Participants and Beneficiaries to the extent such directions have not been
invalidated. To the extent the Trustee exercises any fiduciary responsibility it
may have in any circumstances with respect to providing voting instructions
regarding Gallaher ADRs held in the Gallaher Fund, the Trustee in exercising its
fiduciary responsibility, unless pursuant to the requirements of ERISA or
otherwise it is unlawful to do so, shall take into account directions timely
received from Participants, former Participants and Beneficiaries as being the
most indicative of their best interests with respect to such voting
instructions, and may also take into consideration such other relevant factors
as the Trustee deems appropriate.
5.22. Tendering of Gallaher ADRs.
(a) Tender by Trustee. Notwithstanding any other provision of
the Plan or the Trust Agreement to the contrary, the Trustee shall have no
discretion or authority to tender, deposit, sell, exchange or transfer any
Gallaher ADRs held in the Gallaher Fund (or to give
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directions to the Gallaher ADR depositary with respect to securities underlying
the Gallaher ADRs) pursuant to any tender offer (as defined herein) except as
provided in this Section 5.22. For purposes of this Section 5.22, a "tender
offer" shall mean any tender or exchange offer for or request or invitation for
tenders or exchanges of Gallaher ADRs (or securities underlying the Gallaher
ADRs) the consummation of which would result in any "person" or "group" (within
the meaning of Section 13(d) or 14(d) of the Securities Exchange Act of 1934, as
amended), or any affiliates or associates thereof, becoming the beneficial owner
of 10% or more of the then outstanding shares of Gallaher and shall include,
without limitation, any such tender offer made by or on behalf of Gallaher.
(b) Participant Direction. Each Participant, former
Participant or Beneficiary shall be entitled to direct the Trustee in writing,
and the Trustee shall solicit the written direction of such Participant, former
Participant or Beneficiary, as to the tendering, depositing, selling, exchanging
or transferring of Gallaher ADRs attributable to his interest in the Gallaher
Fund (or to provide instructions to the Gallaher ADR depositary with respect to
securities underlying the Gallaher ADRs) pursuant to any tender offer, and the
Trustee shall tender, deposit, sell, exchange or transfer Gallaher ADRs (or
shall retain such shares in the Gallaher Fund) (or shall provide instructions to
the Gallaher ADR depositary with respect to securities underlying the Gallaher
ADRs) pursuant to such tender offer in accordance with the last-dated timely
written direction received by the Trustee from such Participant, former
Participant or Beneficiary. With respect to Gallaher ADRs held in the Gallaher
Fund as to which timely written directions have not been received by the Trustee
from Participants, former Participants and Beneficiaries, such Participants,
former Participants and Beneficiaries shall be deemed to have directed the
Trustee to retain such Gallaher ADRs in the Gallaher Fund (or to provide
instructions to the Gallaher ADR depositary that securities underlying the
Gallaher ADRs be retained by the Gallaher ADR depositary) subject to all
provisions of the Plan and the Trust Agreement and not be tendered, deposited,
sold, exchanged or transferred pursuant to such tender offer, and the Trustee
shall act in accordance therewith. In the event that, under the terms of such
tender offer or otherwise,
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any Gallaher ADRs (or securities underlying Gallaher ADRs) tendered or deposited
pursuant thereto may be withdrawn, the Trustee shall use its best efforts to
solicit the written direction of each Participant, former Participant or
Beneficiary as to the exercise of withdrawal rights with respect to Gallaher
ADRs (or securities underlying Gallaher ADRs) that have been tendered or
deposited pursuant to this Section 5.22, and the Trustee shall exercise (or
refrain from exercising) (or instruct the Gallaher ADR depositary to exercise or
refrain from exercising) such withdrawal rights in the same manner as shall
reflect the last dated timely written directions received with respect thereto.
The Trustee shall not withdraw Gallaher ADRs (or instruct the Gallaher ADR
depositary to withdraw securities underlying Gallaher ADRs) except pursuant to a
timely written direction of a Participant, former Participant or Beneficiary.
The Trustee shall combine fractional interests of Participants, former
Participants and Beneficiaries in Gallaher ADRs held in the Gallaher Fund to the
extent possible so that such Gallaher ADRs are tendered, deposited, sold,
exchanged or transferred, and withdrawal rights with respect thereto are
exercised, in a manner which reflects as accurately as possible the collective
directions given or deemed to have been given by Participants, former
Participants and Beneficiaries in accordance with this Section 5.22. In giving
or being deemed to have given directions to the Trustee as provided in this
Section 5.22(b), each Participant, former Participant or Beneficiary shall be
acting as a Named Fiduciary in accordance with such directions pursuant to this
Section 5.22(b).
(c) Trustee to Communicate Tender Procedures. In the event of
a tender offer as to which Participants, former Participants and Beneficiaries
are entitled to give directions as provided in this Section 5.22, the Trustee
shall communicate or cause to be communicated to all Participants, former
Participants and Beneficiaries entitled to give directions the procedures
relating to their right to give directions as Named Fiduciaries to the Trustee
and in particular the consequences of any failure to provide timely written
direction to the Trustee. In the event of such a tender offer, the Trustee shall
distribute or cause to be distributed as promptly as possible to all
Participants, former Participants and Beneficiaries entitled to give directions
to the Trustee with respect to such tender
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offer all communications and other materials, if any, that the Trustee may
receive from any person or entity that are being distributed to the holders of
the securities to whom such tender offer is directed and either are directed
generally to such holders or relate to such tender offer. The Participating
Employers and the Committee shall provide the Trustee with such information,
documents and assistance as the Trustee may reasonably request in connection
with any communications or distributions to Participants, former Participants
and Beneficiaries as aforesaid. This information shall include the names and
current addresses of Participants, former Participants and Beneficiaries and the
Gallaher ADRs or securities underlying such Gallaher ADRs credited to the
accounts of each of them, upon which the Trustee may conclusively rely. Anything
to the contrary in this Section 5.22, the Plan or the Trust Agreement
notwithstanding, except if the Participating Employers serve as recordkeeper, to
the extent necessary to provide the Participating Employers with information
necessary accurately to maintain records of the interest in the Plan of
Participants, former Participants and Beneficiaries, the Trustee shall use its
best efforts to keep confidential the direction (or the absence thereof) from
each Participant, former Participant or Beneficiary with respect to any tender
offer and the identity of such Participant, former Participant or Beneficiary
and not to divulge such direction or identity to any person or entity,
including, without limitation, Gallaher, Fortune, any other Participating
Employer and any Non-Participating Employer and any director, officer, employee
or agent thereof, it being the intent of this Section 5.22 that Gallaher,
Fortune, each other Participating Employer and each Non-Participating Employer
and their directors, officers, employees and agents not be able to ascertain the
direction given (or not given) or deemed to have been given by any Participant,
former Participant or Beneficiary with respect to any tender offer.
(d) Invalidity. In the event that a court of competent
jurisdiction shall issue an opinion, order or decree which, in the opinion of
counsel to Fortune or the Trustee, shall, in all or any particular
circumstances, invalidate under ERISA or otherwise any provision or provisions
of the Plan or the Trust Agreement with respect to the tendering, depositing,
sale, exchange or transfer of Gallaher ADRs (or securities underlying
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Gallaher ADRs) held in the Gallaher Fund or the exercise of any withdrawal
rights with respect to Gallaher ADRs (or securities underlying Gallaher ADRs)
tendered or deposited pursuant to a tender offer, or cause any such provision or
provisions to conflict with ERISA, or require the Trustee not to act or such
Gallaher ADRs (or securities underlying Gallaher ADRs) not to be tendered,
deposited, sold, exchanged or transferred or such withdrawal rights not to be
exercised in accordance with such provision or provisions, then, upon written
notice thereof to the Trustee, in the case of an opinion of counsel to Fortune,
or to Fortune, in the case of an opinion of counsel to the Trustee, such
provision or provisions shall be given no further force or effect in such
circumstances. Except to the extent otherwise specified in such opinion, order
or decree, the Trustee shall nevertheless have no discretion or authority in
such circumstances to tender, deposit, sell, transfer or exchange Gallaher ADRs
held in the Gallaher Fund (or the retention of such shares in the Gallaher
Fund), or to give instructions to the Gallaher ADR depositary with respect to
securities underlying Gallaher ADRs, pursuant to a tender offer or with respect
to the exercise of (or refraining from exercising) any withdrawal rights with
respect thereto, but shall act in accordance with the last-dated timely written
directions received from Participants, former Participants and Beneficiaries to
the extent such directions have not been invalidated. To the extent the Trustee
exercises any fiduciary responsibility it may have in any circumstances with
respect to the tendering, depositing, sale, exchange or transfer of Gallaher
ADRs held in the Gallaher Fund, or giving instructions to the Gallaher ADR
depositary with respect to securities underlying Gallaher ADRs, or the exercise
of any withdrawal rights with respect thereto, the Trustee in exercising its
fiduciary responsibility, unless pursuant to the requirements of ERISA or
otherwise it is unlawful to do so, shall take into account directions timely
received from Participants, former Participants and Beneficiaries as being the
most indicative of their best interests with respect to a tender offer, and may
also take into consideration such relevant other factors as the Trustee deems
appropriate.
(e) Proceeds of Tender. The proceeds of any sale, exchange or
transfer of Gallaher ADRs (or securities underlying Gallaher ADRs) pursuant to
the direction of a Participant, former Participant or
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Beneficiary shall be allocated to his Accounts in the same manner, in the same
proportion and as of the same date as were the securities sold, exchanged or
transferred; provided, however, that the proceeds thereof shall not be held in
the Gallaher Fund but shall be invested in other Investment Funds on a pro rata
basis in accordance with such Participant's, former Participant's or
Beneficiary's current investment election under Section 5.02 for Tax Deferred
Contributions.
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ARTICLE VI
ACCOUNTS
6.01. Participants' Accounts. The Committee shall maintain or
cause to be maintained the following separate Accounts for each Participant
(and, as long as may be appropriate, for each former Participant and
Beneficiary):
(a) Profit-Sharing Account. A Profit-Sharing Account shall be
maintained for each Participant on whose behalf Profit-Sharing Contributions are
made pursuant to Article III of this Plan or on whose behalf profit-sharing
contributions were made under a Prior Plan, and, subject to the following
limitations, such contributions and any earnings and losses thereon shall be
allocated to such Profit-Sharing Account:
(1) Any amounts maintained in the Profit-Sharing Account of a
Participant attributable to profit-sharing contributions made under the
Profit-Sharing Plan of American Brands, Inc. or the Jim Beam Brands Co.
Profit-Sharing and 401(k) Savings Plan shall be limited to the portion
of such profit-sharing contributions that were allocated to such
Participant's General Account under such Prior Plans, and any earnings
and losses thereon; and
(2) Any amounts maintained in the Profit-Sharing Account of a
Participant attributable to Profit-Sharing Contributions made pursuant
to Section 3.02 of this Plan or under the ACCO World Corporation
Profit-Sharing Plan shall be limited to the portion of such
profit-sharing contributions that such Participant does not or did not
have the option to receive in cash, and any earnings and losses
thereon.
(b) Cash Option Account. A Cash Option Account shall be
maintained for each Participant on whose behalf Profit-Sharing Contributions are
made pursuant to Section 3.02 of this Plan or on whose behalf profit-sharing
contributions were made under the ACCO World Corporation Profit-Sharing Plan,
which such Participant could have elected, but did not elect, to receive in
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cash, and such contributions and any earnings and losses thereon shall be
allocated to such Cash Option Account.
(c) Tax Deferred Account. A Tax Deferred Account shall be
maintained for each Participant on whose behalf Tax Deferred Contributions are
made pursuant to Section 4.01 of this Plan and on whose behalf any tax deferred
contributions were made under a Prior Plan, and such contributions and any
earnings and losses thereon shall be allocated to such Tax Deferred Account.
(d) Supplemental Account. A Supplemental Account shall be
maintained for each Participant employed by a MasterBrand Participating Employer
on whose behalf Supplemental Contributions are made pursuant to Section 4.01 of
this Plan and for each Participant on whose behalf after-tax contributions were
made under the Day-Timers, Inc. Profit-Sharing and Employee Savings Plan or the
MasterBrand Industries, Inc. Employee Savings Plan, and such contributions and
any earnings and losses thereon shall be allocated to such Supplemental
Contribution Account.
(e) Company Matching Account. A Company Matching Account shall
be maintained for each Participant on whose behalf Company Matching
Contributions are made pursuant to Section 4.02 of this Plan and on whose behalf
any company matching contributions were made under a Prior Plan, except the
Acushnet Company Employee Savings Plan, and such contributions and any earnings
and losses thereon shall be allocated to such Company Matching Account.
(f) Rollover Account. A Rollover Account shall be maintained
for each Participant on whose behalf any amount has been rolled over to this
Plan pursuant to Section 4.03 of this Plan and, except as otherwise specified in
this Section 6.01, on whose behalf any amount has been transferred or rolled
over to a Prior Plan, and such amounts and any earnings and losses thereon shall
be allocated to such Rollover Account.
(g) Grandfathered Withdrawal Account. A Grandfathered
Withdrawal Account shall be maintained for each Participant (1) on whose behalf
a Withdrawal Account was maintained under the Profit-Sharing Plan of American
Brands, Inc. or the Jim Beam Brands Co. Profit-Sharing and 401(k) Savings Plan
as of December 31, 1995, (2) on
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whose behalf a Rollover Account was maintained under the ACCO World Corporation
Profit-Sharing Plan as of December 31, 1995 or (3) on whose behalf a Company
Contribution Account, Employee Savings Account, Rollover Contribution Account,
Transferred General Mills Plan Account or Tax Deductible Account was maintained
under the Acushnet Company Employee Savings Plan as of December 31, 1995, and
amounts in such accounts (other than any amounts attributable to after-tax
contributions) and earnings and losses thereon shall be allocated to such
Grandfathered Withdrawal Account as of January 1, 1996.
(h) Grandfathered After-Tax Account. A Grandfathered After-Tax
Account shall be maintained for each Participant (1) on whose behalf a Deposit
Account or Post-Tax Transfer Contribution Account was maintained under the
Profit-Sharing Plan of American Brands, Inc. or the Jim Beam Brands Co.
Profit-Sharing and 401(k) Savings Plan as of December 31, 1995, (2) on whose
behalf an After-Tax Account was maintained under the ACCO World Corporation
Profit-Sharing Plan as of December 31, 1995 or (3) on whose behalf an Employee
Savings Account or Rollover Account, to which after-tax contributions were made,
was maintained under the Acushnet Company Employee Savings Plan as of December
31, 1995, and any after-tax contributions in such accounts and earnings and
losses thereon shall be allocated to such Grandfathered After-Tax Account as of
January 1, 1996.
(i) Kensington Money Purchase Account. A Kensington Money
Purchase Account shall be maintained for each Participant on whose behalf a
Kensington Money Purchase Account was maintained under the ACCO World
Corporation Profit-Sharing Plan as of December 31, 1995 and any amounts in such
account and any earnings and losses thereon shall be allocated to the Kensington
Money Purchase Account.
6.02. Allocation of Earnings and Losses to Accounts. Earnings
and losses shall be allocated to the Accounts of all Participants as of each
Valuation Date by credit or deduction therefrom, as the case may be, of the
increase or decrease in the value of the Investment Funds in which such Accounts
are invested since the immediately preceding Valuation Date attributable to
interest, dividends, changes in market value, expenses and gains and losses
realized from the sale of assets.
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6.03. Allocation of Contributions to Accounts. As of each
Valuation Date, Tax Deferred Contributions, Cash Option Contributions,
Supplemental Contributions, Company Matching Contributions, Profit-Sharing
Contributions (not otherwise allocable to Cash Option Accounts) and Rollover
Contributions made to the Plan during the period then ended by or on behalf of
each Participant shall be credited to such Participant's Tax Deferred Account,
Cash Option Account, Supplemental Account, Company Matching Account,
Profit-Sharing Account and Rollover Account, respectively.
6.04. Annual Additions Limitation.
(a) Maximum Annual Additions. The sum of the Annual Additions
(as defined in Section 6.04(c)) to a Participant's Accounts in any Plan Year
shall not exceed the lesser of:
(1) Thirty thousand dollars ($30,000) or, if greater,
one-quarter (1/4) of the dollar limitation in effect under Section
415(b)(1)(A) of the Code; or
(2) Twenty-five percent (25%) of the Participant's
Compensation (as defined for this purpose in Section 6.06).
The limitations set forth in (1) and (2) above shall be adjusted annually for
increases in the cost of living, in accordance with regulations issued by the
Secretary of the Treasury pursuant to the provisions of Section 415(d) of the
Code (or such other Federal income tax statutory provisions as shall at the time
be applicable).
(b) Procedure for Preventing and Correcting Excess Annual
Additions. In the event that the Annual Additions to a Participant's Accounts in
any Plan Year would be in excess of the maximum annual limits as a result of the
allocation of Forfeitures, a reasonable error in estimating Compensation, a
reasonable error in determining the amount of elective deferrals or under such
other facts and circumstances which the Commissioner of Internal Revenue finds
justifiable, the portion of any Supplemental Contributions, and thereafter any
Profit-Sharing Contributions, and thereafter any Company Matching Contributions
otherwise allocable to a Participant's Accounts shall be reduced by the amount
necessary to reduce the amount apportionable to a
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Participant to the lesser of the amounts set forth in Section 6.04(a)(1) or (2).
In the event that the Annual Additions to a Participant's Accounts for 1996 or
any subsequent Plan Year exceed the maximum annual limits as a result of a
reasonable error in estimating Compensation, a reasonable error in determining
the amount of elective deferrals or under any such other facts and circumstances
which the Commissioner of Internal Revenue finds justifiable, the excess amount
will be held unallocated in a suspense account. If a suspense account is in
existence at any time during a Plan Year pursuant to this section, it will not
participate in the allocation of any investment gains and losses. If a suspense
account is in existence at any time during a Plan Year, all amounts in the
suspense account must be allocated and reallocated to Participants' Accounts
before any Supplemental Contributions, Profit-Sharing Contributions, Company
Matching Contributions or Tax Deferred Contributions may be made to the Plan for
that Plan Year. Amounts allocated from the suspense account shall be applied to
reduce Profit-Sharing Contributions, Company Matching Contributions and Tax
Deferred Contributions in the order that they otherwise would have been
contributed to the Plan. Excess amounts may not be distributed to Participants
or former Participants.
(c) Definition of Annual Additions. For purposes of this Plan,
the term "Annual Additions" means the amounts allocated to a Participant's
Accounts during the year that constitute:
(1) the Company Matching Contributions and Profit-Sharing
Contributions allocated to such Participant's Accounts.
(2) the Tax Deferred Contributions, Supplemental Contributions
and Cash Option Contributions allocated to such Participant's Accounts.
(3) Forfeitures.
(d) Consolidation of Defined Contribution Plans. For purposes
of this Section 6.04, this Plan and any other qualified defined contribution
plan maintained by a Participating Employer or Related Employer shall be
considered as a single defined contribution plan if a
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Participant is a participant in both plans. Amounts allocated to a Participant's
individual medical benefit account, as defined in Section 415(l)(1) of the Code,
which is part of a defined benefit plan maintained by a Participating Employer
or Related Employer shall be treated as annual additions to a defined
contribution plan. Amounts derived from contributions which are attributable to
post-retirement medical benefits allocated to the separate account of a
Participant who is a key employee, as defined in Section 419A(d) of the Code,
under a welfare benefit fund, as defined in Section 419(e) of the Code,
maintained by a Participating Employer or Related Employer, shall be treated as
annual additions to a defined contribution plan. Notwithstanding the foregoing,
the compensation limit described in Section 6.04(a)(2) shall not apply to any
contribution for medical benefits (within the meaning of Section 419A(f)(2) of
the Code) after separation from service which is otherwise treated as an annual
addition under Section 415(l)(1) of the Code. If a reduction is necessary under
Section 6.04(b), then the reduction shall be made to the Annual Additions under
one of such plans as determined by the Committee and the governing bodies of
such other plans.
6.05. Combined Maximum Limitations. In the event any
Participant is also participating in any other qualified plan (within the
meaning of Section 401 of the Code) maintained by a Participating Employer or
Related Employer, then for any limitation year, which shall be the Plan Year,
the sum of the "Defined Benefit Plan Fraction" and the "Defined Contribution
Plan Fraction" for such limitation year shall not exceed one (1.0). For purposes
of this Section 6.05, such sum shall be determined in accordance with the
following:
(a) The "Defined Benefit Plan Fraction" for any year is a
fraction:
(1) the numerator of which is the projected annual benefit of
the Participant under each defined benefit plan (determined as of the
close of the year); and
(2) the denominator of which is the lesser of the maximum
dollar limitation in effect under Section 415(b)(1)(A) of the Code for
such limitation year times one and one-quarter (1.25), or the amount
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which may be taken into account under Section 415(b)(1)(B) of the Code
for such limitation year times one and two-fifths (1.4).
(b) The "Defined Contribution Plan Fraction" for any year is a
fraction:
(1) the numerator of which is the sum of the annual additions
to the Participant's account under each defined contribution plan as of
the close of the year; and
(2) the denominator of which is the sum of the lesser of the
following amounts determined for such limitation year and each prior
year of service with the Participating Employer or Related Employer:
(A) the product of one and one-quarter (1.25)
multiplied by the dollar limitation in effect under Section
415(c)(1)(A) of the Code for such limitation year; or
(B) The product of one and two-fifths (1.4)
multiplied by the amount which may be taken into account under
Section 415(c)(1)(B) of the Code for such limitation year.
For purposes of this Section 6.05, all defined benefit or
defined contribution plans shall be treated as one (1) plan by class. In the
event the above limitation would otherwise be exceeded in any limitation year,
the Participant's benefits under the defined benefit plans are to be limited. In
the event any such defined benefit plan fails to provide for such reduction of
benefits, the annual additions under this Plan shall be reduced to the extent
necessary to comply with the above limitation.
If the Plan satisfied the applicable requirements of Section
415 of the Code as in effect for all limitation years beginning before April 1,
1987, an amount shall be subtracted from the numerator of the Defined
Contribution Plan Fraction (not exceeding such numerator), as prescribed by the
Secretary of the Treasury, so that the sum of the Defined Benefit Plan Fraction
and the Defined Contribution Plan Fraction computed under Section 415(e)(1) of
the Code does not exceed one (1).
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6.06. Definition of Compensation for Purposes of Sections 6.04
and 6.05. Solely for the purpose of applying the limitations of Sections 6.04
and 6.05, the term "Compensation" shall mean a Participant's W-2 income for the
limitation year. Compensation for a limitation year is the compensation actually
paid or includable in gross income during such limitation year.
6.07. Limitation of Annual Unadjusted Earnings or
Compensation. For purposes of this Plan, the Unadjusted Earnings or Compensation
of a Participant shall be limited to one hundred and fifty thousand dollars
($150,000) in each Plan Year (adjusted for increases in the cost of living
pursuant to rulings of the Secretary of the Treasury). For purposes of applying
the annual limitation on Unadjusted Earnings or Compensation under Section
401(a)(17) of the Code, the family unit of a Participant who either is a five
percent (5%) owner or is both a Highly Compensated Employee and one of the ten
(10) most Highly Compensated Employees, shall be treated as a single employee
with one Unadjusted Earnings or Compensation and the annual limitation on
Unadjusted Earnings or Compensation shall be allocated among family members. If
as a result of the application of such rules the annual limitation on Unadjusted
Earnings or Compensation is exceeded, then the limitation shall be prorated
among the affected individuals in proportion to each such individual's
Unadjusted Earnings or Compensation prior to the application of such limitation.
For purposes of applying such rules, the term "family unit" shall include only
the spouse of the Participant and any lineal descendants of the Participant who
have not attained age nineteen (19) before the close of the year.
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ARTICLE VII
VESTING AND FORFEITURES
7.01. Participant Contributions. A Participant shall at all
times be one hundred percent (100%) vested in his Tax Deferred Account and
Rollover Account and, where applicable, his Grandfathered After-Tax Account, and
employee contributions and earnings thereon in his Grandfathered Withdrawal
Account and his Supplemental Account.
7.02. Employer Contributions.
(a) Vesting Schedule for Fortune. A Participant who is an
Employee of Fortune shall at all times be one hundred percent (100%) vested in
his Company Matching Account and his Grandfathered Withdrawal Account. A
Participant who is an Employee of Fortune shall be one hundred percent (100%)
vested in his Profit-Sharing Account on the first to occur of the following:
(1) his Retirement;
(2) his termination of employment by reason of Disability;
(3) the date of his death;
(4) his attainment of age 65;
(5) his completion of five (5) years of Vesting Service; or
(6) his Termination of Employment Without Fault.
(b) Vesting Schedule for ACCO Participating Employers. A
Participant who is an Employee of an ACCO Participating Employer who terminates
employment on or after January 1, 1996 shall at all times be one hundred percent
(100%) vested in his Company Matching Account, Cash Option Account and
Kensington Money Purchase Account. A Participant who is an Employee of an ACCO
Participating Employer shall be one hundred percent
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(100%) vested in his Profit-Sharing Account on the first to occur of the
following:
(1) his Retirement;
(2) his termination of employment by reason of Disability;
(3) the date of his death;
(4) his attainment of age 65;
(5) his completion of five (5) years of Vesting Service; or
(6) his Termination of Employment Without Fault.
In addition, a Participant or former Participant who is an Employee of an ACCO
Participating Employer and who terminates employment with all Related Employers
for a reason other than as stated in this Section 7.02(b) shall be vested in the
percentage of the value of his Profit-Sharing Account set forth in the following
table:
Number of Years of Vesting
Vesting Service Percentage
------------------ ----------
Less than 1 0%
1 20%
2 40%
3 60%
4 80%
5 or more 100%
(c) Vesting Schedule for Acushnet Participating Employers. A
Participant who is an Employee of an Acushnet Participating Employer and who
terminates employment on or after January 1, 1996 shall at all times be one
hundred percent (100%) vested in his Company Matching Account and any company
contributions and earnings thereon in his Grandfathered Withdrawal Account.
(d) Vesting Schedule for Beam Participating Employers. A
Participant who is an Employee of a Beam Participating Employer shall at all
times be one hundred
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percent (100%) vested in the Withdrawal Balance (as defined in Section 9.03) in
his Grandfathered Withdrawal Account. A Participant who is an Employee of a Beam
Participating Employer shall be one hundred percent (100%) vested in his
Profit-Sharing Account and his Grandfathered Withdrawal Account on the first to
occur of the following:
(1) his Retirement;
(2) his termination of employment by reason of Disability;
(3) the date of his death;
(4) his attainment of age 65;
(5) his completion of seven (7) years of Vesting Service; or
(6) his Termination of Employment Without Fault.
In addition, a Participant or former Participant who is an Employee of a Beam
Participating Employer and who terminates employment with all Related Employers
for a reason other than as stated in this Section 7.02(d) above shall be vested
in the percentage of the value of his Grandfathered Withdrawal Account (other
than his Withdrawal Balance which is 100% vested) and his Profit-Sharing Account
set forth in the following table:
Number of Years of Vesting
Vesting Service Percentage
----------------- ----------
Less than 3 0%
3 but less than 4 20%
4 but less than 5 40%
5 but less than 6 60%
6 but less than 7 80%
7 or more 100%
(e) Vesting Schedule for MasterBrand Participating Employers.
A Participant who is an Employee of a MasterBrand Participating Employer shall
at
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all times be one hundred percent (100%) vested in his Company Matching Account.
7.03. Vesting in Prior Plan. Notwithstanding any other
provision of this Plan to the contrary, a Participant who participated in a
Prior Plan shall be vested in his Accounts at least to the extent he was vested
under such Prior Plan.
7.04. Amendments to Vesting Schedule. No amendment to the
Plan's vesting schedules shall deprive a Participant of his nonforfeitable
rights to benefits accrued to the date of such amendment. If any vesting
schedule of the Plan is amended, each Participant with at least three years of
Vesting Service may elect to have his nonforfeitable percentage determined
without regard to such amendment. The period during which the election may be
made shall commence with the date the amendment is adopted and shall end on the
later of:
(a) sixty (60) days after the amendment is adopted;
(b) sixty (60) days after the amendment is effective; and
(c) sixty (60) days after the Participant is issued written
notice of the amendment by Fortune.
7.05. Forfeitures. Any Account Balances in a Participant's
Accounts that do not become distributable pursuant to Article VIII shall be
regarded as Forfeitures upon such Participant's Severance From Service. All
amounts forfeited in accordance with this Article VII shall be used to reduce
contributions of the Participant's Participating Employer.
7.06. Reinstatement of Account Balances. If a former
Participant who has received a distribution of less than the full amount of his
Account Balances thereafter becomes a Participant, the Participant may, provided
a Break in Service of five (5) years has not occurred, repay in cash the amount
of his Account Balances which previously had been distributed in accordance with
Article VIII. Upon such repayment, the amount so repaid shall be reinstated as
of the Valuation Date next succeeding or coincident with such repayment and
shall be nonforfeitable. If a Participant or former
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Participant who has received a distribution of less than the full amount of his
Account Balances resumes employment prior to incurring a Break in Service of
five (5) years, the amount of the Account Balances that the Participant or
former Participant did not receive shall be reinstated as of the Valuation Date
next succeeding or coincident with his reemployment, regardless of whether such
Participant has repaid the amount of his Account Balances which previously had
been distributed in accordance with Article VIII. If repayment or reinstatement
of such amount is not made as provided herein, the amount of the Participant's
Account Balances previously distributed and the amount that the Participant did
not receive shall be disregarded in the determination of the Participant's
Account Balances. For purposes of Section 7.06, a "Break in Service" means any
period commencing with the Participant's Severance From Service and continuing
for at least twelve (12) consecutive months until reemployment by any Related
Employer. Notwithstanding the foregoing, any former Participant who terminated
employment under a Prior Plan prior to January 1, 1996 and who becomes a
Participant in this Plan, shall be immediately one hundred percent (100%) vested
in any unvested Account Balances attributable to company matching contributions
at the time of his termination of employment.
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ARTICLE VIII
DISTRIBUTIONS
8.01. Form of Payment.
(a) Payment Forms. Except as otherwise set forth in Section
8.03, the vested percentage of the Participant's Account Balances shall be
distributed to or for the benefit of the Participant or his Beneficiary, as of
the payment dates specified in Section 8.02 and in such one or more of the
following forms of settlement as the Participant or his Beneficiary shall elect:
(1) By a single distribution in cash;
(2) By a single distribution in whole shares of Fortune Common
Stock or Gallaher ADRs to the extent that the portion of such
Participant's Account Balances allocated to the Fortune Stock Fund or
to the Gallaher Fund is evenly divisible by the fair market value of
such stock or Gallaher ADRs on the Valuation Date as of which such
Account Balances are determined and the remainder of such Participant's
Account Balances in cash; or
(3) By periodic installments in cash during a period not to
exceed the life expectancy of the Participant or former Participant or
the joint life expectancy of the Participant or former Participant and
his designated Beneficiary determined at the date of commencement of
distribution.
(b) Conversion From Periodic Installments to Lump Sum. If a
Participant, former Participant or his Beneficiary is receiving periodic
installments or is entitled to a deferred distribution pursuant to Section 8.02,
the Participating Employer shall upon the request of such Participant, former
Participant or Beneficiary direct that all of the Account Balances as of the
Valuation Date next succeeding the Committee's approval of the request (or if
the date of approval coincides with a Valuation Date, then as of that Valuation
Date), less any periodic installments paid since such Valuation Date, shall be
distributed in a single distribution or otherwise applied for the benefit of
such Participant, former Participant or Beneficiary. Except as otherwise
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provided in Article IX, a Participant, former Participant or his Beneficiary who
is receiving periodic installments or is entitled to a deferred distribution
pursuant to Section 8.02 may not receive a partial single sum distribution of
his Account Balances; provided, however, that, notwithstanding any other
provision of this Plan to the contrary, a former Participant under the Acushnet
Company Employee Savings Plan who terminated employment due to Retirement from
an Acushnet Participating Employer prior to January 1, 1996, or the spouse of
such former Participant, who is receiving periodic installments or is entitled
to a deferred distribution pursuant to Section 8.02 may receive partial single
sum distributions of his Account Balances.
(c) Allocation of Earnings and Losses. So long as a
Participant, former Participant or his Beneficiary is receiving periodic
installments pursuant to Section 8.01(a)(3) or is entitled to a deferred
distribution pursuant to Section 8.02, such Participant, former Participant or
his Beneficiary shall continue to share proportionately in the net income or
losses of the Investment Funds but shall not share in any contributions of a
Participating Employer for any Plan Year after the Participant becomes a former
Participant other than the contribution for his last year of participation if
otherwise eligible therefor.
(d) Lump Sum Payment of Amounts of $3,500 or Less.
Notwithstanding the foregoing, if the vested value of the Participant's Account
Balances has not at any time exceeded three thousand five hundred dollars
($3,500), payment shall be made as soon as practicable in a single distribution
in cash. If the vested value of such Account Balances is zero (0), then such
vested value shall be deemed distributed to the Participant immediately as a
full distribution of the vested value of his Account Balances.
(e) Reduction of Account Balances and Investment Funds From
Periodic Installments. Payments made in periodic installments pursuant to
Section 8.01(a)(3), shall be withdrawn from a Participant's Account Balances
first from amounts attributable to after-tax contributions and any earnings
thereon and then from his remaining Account Balances on a pro rata basis.
Payments in periodic installments made pursuant to Section 8.01(a)(3) shall be
withdrawn from the Investment
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Funds in which such Participant's Account Balances are invested on a pro rata
basis.
8.02. Time of Payment.
(a) Distribution Upon Termination of Employment. Subject to
Section 8.02(c) below, in the event that a Participant who is an Employee of an
Acushnet Participating Employer or MasterBrand Participating Employer terminates
employment (whether by reason of Retirement, Disability, Termination of
Employment Without Fault, death or other reason), if elected by the Participant,
former Participant or his Beneficiary, such Participant's Account Balances
(valued as of the Valuation Date next succeeding or coincident with the later of
such termination of employment or receipt by the Committee of a request for
distribution) shall be distributed to or applied for the benefit of such
Participant, former Participant or his Beneficiary, as soon as practicable
following the later of such termination of employment or receipt by the
Committee of a request for distribution, in one of the forms of payment
specified in Section 8.01. Subject to Section 8.02(c) below, in the event that a
Participant who is an Employee of Fortune or an ACCO Participating Employer or
Beam Participating Employer terminates employment (whether by reason of
Retirement, Disability, Termination of Employment Without Fault, death or other
reason), if elected by such Participant, former Participant or his Beneficiary,
such Participant's vested Account Balances (valued as of the Valuation Date next
succeeding or coincident with the later of such termination of employment or
receipt by the Committee of a request for distribution) shall be distributed to
or applied for the benefit of such Participant, former Participant or his
Beneficiary, as soon as practicable following the later of such termination of
employment or receipt by the Committee of a request for distribution, in one of
the forms of payment specified in Section 8.01 or, where applicable, Section
8.03 and any Profit-Sharing Contribution allocable to the Profit-Sharing Account
or Cash Option Account of such Participant after such date of distribution shall
be distributed in a single distribution in cash as soon as practicable after
such allocation. Except as otherwise provided in Section 8.01(b), if a
Participant, former Participant or his designated Beneficiary elects
distribution of his Account Balances in periodic installments pursuant to
Section
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8.01(a)(3), the period over which distribution shall be made may not be changed
after distribution has commenced.
(b) Commencement of Distribution. Unless a Participant elects
otherwise in writing, distribution of a Participant's Account Balances shall
commence not later than the sixtieth (60th) day after the close of the Plan Year
in which the Participant attains age 65 or terminates employment, whichever is
later.
(c) Deferred Distribution. Except as otherwise provided in
Section 8.05(b), in the event the Account Balances of a Participant, former
Participant or Beneficiary at any time exceeded thirty-five hundred dollars
($3,500) (or such other amount permitted by Treasury Regulations) at the time
the Account Balances become distributable, the Account Balances shall not,
unless the Participant, former Participant or Beneficiary elects otherwise, by a
written election on a form approved by the Committee, be distributed to the
Participant, former Participant or Beneficiary, but shall be distributed in
periodic installments pursuant to Section 8.01(a)(3) to the Participant, former
Participant or Beneficiary commencing on the sixtieth (60th) day after the close
of the Plan Year in which the Participant or former Participant would have
attained age sixty-five (65) (or actual retirement date, if later) or the
Valuation Date coincident with or next succeeding the date the Committee is
notified of the death of the Participant, former Participant or Beneficiary. So
long as the Account Balances are being so held, such Participant, former
Participant or Beneficiary shall, to the extent provided in Section 6.02,
continue to share proportionately the net income or net loss and expenses of the
Investment Funds but shall not share in any contributions made by a
Participating Employer for any Plan Year after the Participant became a former
Participant.
(d) Minimum Distribution Requirements. A Participant, former
Participant or Beneficiary designated pursuant to Section 8.05(a) may also
elect, in writing on a form approved by the Committee, signed by the
Participant, former Participant or Beneficiary and filed with the Participating
Employer prior to the commencement of distribution of Account Balances, that
distribution be further deferred (except as otherwise provided herein or in
Section 8.05(b)). Notwithstanding anything else in
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this Plan to the contrary, a Participant's or former Participant's benefits must
commence no later than April 1 following the calendar year in which the
Participant or former Participant attains age seventy and one-half (70-1/2).
Benefits must be paid (1) over a period not longer than the life of the
Participant or former Participant and his designated Beneficiary or (2) over a
period not extending beyond the life expectancy of the Participant or former
Participant or the joint life expectancies of the Participant or former
Participant and his designated Beneficiary. If a Participant or former
Participant dies before his entire interest has been distributed to him, or if
distribution has begun to his designated Beneficiary, the Participant's or
former Participant's entire interest (or the remaining part of such interest if
distribution has commenced) will be distributed within five (5) years after his
death (or the death of his designated Beneficiary); provided, however, that this
sentence shall not apply if (A) the distribution of the Participant's or former
Participant's interest has commenced and is for a certain term permitted under
(2) and such distribution to the designated Beneficiary commences within one
year after the Participant's or former Participant's death or (B) the portion of
the Participant's or former Participant's Accounts to which his surviving spouse
is entitled shall be distributed over a period not extending beyond the life
expectancy of the surviving spouse and such distribution commences no later than
the date on which the Participant or former Participant would have attained age
seventy and one-half (70-1/2). If the Participant or former Participant dies
after commencement of payments, the remaining portion of such interest shall
continue to be distributed at least as rapidly as under the method of
distribution being used prior to the Participant's or former Participant's
death. All distributions shall be made in accordance with the regulations under
Section 401(a)(9) of the Code including Treasury Regulation Section
1.401(a)(9)-2.
(e) Special Provision for Participants Employed by Fortune.
Prior to the April 1 following the calendar year in which he attains age seventy
and one-half (70-1/2), a Participant or former Participant who is an Employee of
Fortune must make a written election with Fortune on a form approved by the
Committee to receive his Account Balances in a form specified in Section
8.01(a), which form shall be irrevocable on such April 1.
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If a Participant or former Participant who is an Employee of Fortune does not so
elect by such date, the Account Balances shall be distributed in periodic
installments pursuant to Section 8.01(a)(3). In the event such Participant or
former Participant has elected to receive a distribution pursuant to Section
8.01(a)(1) or (2), the Participant's or former Participant's entire Account
Balances shall be distributed by April 1 of the year following the year in which
he attained age seventy and one-half (70-1/2) and any Account Balances that
become distributable thereafter shall be distributed in the same manner as soon
as practicable after the end of each succeeding Plan Year. In the event such
Participant or former Participant has elected to receive (or receives in default
of such election) distribution in periodic installments pursuant to Section
8.01(a)(3), any Account Balances that become distributable after payments have
commenced shall be distributed in periodic installments (subject to Section
8.01(b)). Unless otherwise elected by the Participant, payments made pursuant to
this Section 8.02(e) shall be withdrawn first from the Participant's Account
Balances attributable to after-tax contributions and earnings thereon and then
from his remaining Account Balances on a pro rata basis.
(f) Notice Requirement. Any election pursuant to this Section
8.02 shall be made by filing the appropriate form in the manner and within the
time limits set by the Committee.
(g) Limitation on Amounts Distributable From Frozen Mutual
Benefit GIC Fund. Notwithstanding any other provision of the Plan to the
contrary, any distribution attributable to amounts invested in the Frozen Mutual
Benefit GIC Fund shall be limited to the greater of:
(1) the vested amount that can be withdrawn from the Mutual
Benefit Life Insurance Company guaranteed interest contract in which
the Investment Fund is invested; and
(2) the vested amount of the Participant's Account Balances
invested in the Frozen Mutual Benefit GIC Fund that may be paid
pursuant to the Cash Advance program set forth in Section 4.09;
provided, however, that such distribution shall be limited so that the
sum of the Cash Advances used to
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fund the distribution plus all other annual additions credited to the
Participant's Accounts (including any previous Cash Advances) for that
Plan Year, do not exceed the contribution limits in Section 415 of the
Code.
8.03. Payment of Kensington Money Purchase Account Balances.
(a) Section 401(a)(11) Assets. The Trustee shall be directed
to make payment to a Participant of all amounts held in his Kensington Money
Purchase Account, which amounts are subject to the joint and survivor annuity
requirements of Section 401(a)(11) of the Code and hereinafter referred to as
"Section 401(a)(11) Assets", upon termination of the Participant's employment
(whether by reason of Retirement, Disability, Termination of Employment Without
Fault, death or other reason) in accordance with this Section 8.03.
(b) Direction of Payment. The Trustee shall be directed to pay
the Participant's portion of his vested Account Balance attributable to Section
401(a)(11) Assets (as defined by Treasury Regulation Section 1.401(a)-20), in
cash or in kind, to or for the benefit of the Participant, as of the payment
date and in the form of payment described in Section 8.03(c) below, unless the
Participant elects a form of payment offered in Section 8.01(a) or Section
8.02(c)(2) and, if he is married, pursuant to a qualified election, as described
in Section 8.03(d).
(c) Payment Forms.
(1) If a Participant is legally married on the annuity
starting date as defined by Treasury Regulation Section 1.401(a)-20,
payment to the Participant of his Section 401(a)(11) Assets shall be
made by the purchase of a joint and survivor annuity, unless the
Participant elects a form of payment offered in Section 8.01(a) or
Section 8.03(c)(2) pursuant to a qualified election, as described in
Section 8.03(d). The joint and survivor annuity shall be equal in value
to a single life annuity. The joint and survivor benefits following the
Participant's death shall continue to the spouse during the spouse's
lifetime at a rate equal to fifty percent (50%) of the rate at which
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such benefits were payable to the Participant. The Participant may
elect to receive a smaller annuity benefit with continuation of
payments to the spouse at a rate of seventy-five percent (75%) or one
hundred percent (100%) of the rate payable to a Participant during his
lifetime.
(2) If a Participant is not married on the annuity starting
date as defined in Treasury Regulation Section 1.401(a)-20, payment to
the Participant of his Section 401(a)(11) Assets shall be made in
accordance with the methods available under Section 8.01(a), or in
accordance with the following options:
(A) Payments over a period certain in monthly,
quarterly, semiannual, or annual cash installments after first
having: (i) segregated the aggregate amount thereof in a
separate, federally insured savings account, certificate of
deposit in a bank or savings and loan association, money
market certificate or other liquid short-term security or (ii)
purchased a nontransferable annuity contract providing for
such payment. The period over which such payment is to be made
shall not extend beyond the Participant's life expectancy (or
the joint life expectancy of the Participant and his
Beneficiary); or
(B) Purchase of an annuity; provided that such
annuity may not be in any form that will provide for payments
over a period extending beyond either the life of the
Participant (or the lives of the Participant and his
Beneficiary) or the life expectancy of the Participant (or the
joint normal life expectancy of the Participant and his
Beneficiary).
(d) Qualified Election. To make a qualified election, a
married Participant must waive his right to the joint and survivor annuity
within the ninety (90) day period ending on the annuity starting date, as
defined by Treasury Regulation Section 1.401(a)-20. A married Participant's
spouse must consent to his waiver of the joint and survivor annuity. The
spouse's consent to the
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waiver must be in writing, must acknowledge the effect of the waiver and must
specify either:
(1) The optional form of benefit selected; or
(2) That the spouse has the right to limit consent to a
specific optional form and elects to relinquish such right. In order to
be valid, the spousal consent must be witnessed by a Plan
representative or a notary public. Such spousal consent shall be
revocable by the spouse at any time prior to the annuity starting date,
as defined in Treasury Regulation Section 1.401(a)-20.
Notwithstanding the foregoing consent requirement, if the
Participant establishes to the satisfaction of the Committee that such written
consent may not be obtained because there is no spouse or the spouse cannot be
located, a waiver will be deemed a qualified election. In the event that the
spouse of a Participant is legally incompetent to give consent, such consent may
be given by the spouse's legal guardian, which shall include the Participant in
the event the Participant is the legal guardian of the spouse. In the event the
Participant is legally separated or has been abandoned, as provided by a court
order, spousal consent shall not be required, except where otherwise provided by
a Qualified Domestic Relations Order.
Any consent necessary under this provision shall be valid only
with respect to the spouse who signs the consent or, in the event of a deemed
qualified election, the designated spouse. A revocation of a prior waiver may be
made by a Participant without the consent of the spouse at any time before the
annuity starting date. The number of revocations shall not be limited.
The Committee shall provide to each Participant, within a
reasonable period prior to the annuity starting date, a written explanation of:
(1) The terms and conditions of the joint and survivor
annuity;
(2) The Participant's right to make and the effect of an
election to waive the joint and survivor annuity;
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(3) The rights of the Participant's spouse; and
(4) The right to make and the effect of a revocation of a
previous election to waive the joint and survivor annuity.
(e) Qualified Pre-Retirement Survivor Annuity. If a
Participant dies before the annuity starting date, payment of his vested Account
Balance attributable to Section 401(a)(11) Assets shall be made to the surviving
spouse of the Participant in the form of a qualified pre-retirement survivor
annuity unless the Participant either has no spouse or has designated another
Beneficiary in the manner described in Section 8.06, or the spouse elects to
receive payment in a form provided in Section 8.01(a) or 8.03(c)(2). The
surviving spouse may elect to receive payment as soon as administratively
feasible after the Participant's death. In order for the designation of a
Beneficiary other than the spouse to be valid, the designation must have been
made after the first day of the Plan Year in which the Participant attains age
thirty-five (35), the designation must contain a waiver of the qualified
pre-retirement survivor annuity, the Participant's spouse must consent in
writing to the waiver of the qualified pre-retirement survivor annuity and
either to the specific nonspouse Beneficiary designation or to a general
Beneficiary designation, provided such consent acknowledges that the spouse has
the right to limit consent to a specific Beneficiary and elects to relinquish
such right. A valid spousal consent shall be witnessed by either a
representative of the Plan or a notary public and shall be revocable by the
spouse at any time prior to the annuity starting date, as defined in Treasury
Regulation Section 1.401(a)-20. The Committee shall provide to each Participant
a written explanation of the qualified pre-retirement survivor annuity within
the applicable period. With respect to any Participant, the applicable period
means whichever of the following periods ends last:
(1) The period beginning with the first day of the Plan Year
in which the Participant attains age thirty-two (32) and ending with
the close of the Plan Year preceding the Plan Year in which the
Participant attains age thirty-five (35);
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(2) A reasonable period ending after the individual becomes
a Participant; or
(3) A reasonable period ending after Section 401(a)(11) of the
Code first applies to the Participant.
Notwithstanding the foregoing, in the case of a Participant
who separates from service before attaining age thirty-five (35), the applicable
period means the period beginning one (1) year before the separation from
service and ending one (1) year after such separation. The written explanation
of the qualified pre-retirement survivor annuity shall provide comparable notice
and information to that described in Section 8.03(d) with respect to the joint
and survivor annuity.
A married Participant may designate a nonspouse Beneficiary
prior to the first day of the Plan Year in which the Participant attains age
thirty-five (35) if a written explanation of the pre-retirement survivor annuity
is given to the Participant by the Committee prior to the time of designation.
Such early nonspouse Beneficiary designation shall become invalid as of the
first day of the Plan Year in which the Participant attains age thirty-five
(35). The designation of a nonspouse Beneficiary shall be revoked automatically
upon the marriage or remarriage of the Participant. Notwithstanding the
foregoing, the spousal consent requirement shall not apply if it is established
to the satisfaction of the Committee either that the spouse cannot be located or
that other circumstances set forth in regulations promulgated under Section 417
of the Code which preclude the necessity of the spouse's consent are present
with respect to the Participant.
If a Participant is not married or if he has designated a
Beneficiary other than his spouse, his vested Account Balance attributable to
Section 401(a)(11) Assets shall be paid to his designated Beneficiary in any of
the forms permitted under Section 8.01(a) or 8.03(c)(2).
If the Participant's surviving spouse is his Beneficiary, his
surviving spouse may elect to receive payments in any of the forms permitted
under Section 8.01(a) or 8.03(c)(2).
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8.04. Certain Retroactive Payments. If the amount of the
payment required to be made or to commence on the date determined under Section
8.02 or 8.03 cannot be ascertained by such date, a payment retroactive to such
date may be made no later than sixty (60) days after the earliest date on which
the amount of such payment can be ascertained under the Plan.
8.05. Designation of Beneficiary.
(a) Designation by Participant. At any time prior to
distribution of the Account Balances in a Participant's Accounts or, if
distribution shall have begun in periodic installments, then at any time prior
to distribution of the last installment, a Participant or former Participant may
designate a Beneficiary or Beneficiaries (who may be executors or trustees and
who shall be the same person or persons for each of the Participant's Accounts)
in a writing filed with the Participating Employer on a form approved by the
Committee, signed by the Participant or former Participant. Any such designation
may be revoked or changed by the Participant or former Participant in a writing
filed with the Participating Employer on a form approved by the Committee, at
any time prior to distribution of such Account Balances or, if distribution
shall have begun in periodic installments, then at any time prior to
distribution of the last installment. The spouse of a Participant or former
Participant shall in all cases be deemed to be the Beneficiary of the
Participant or former Participant unless the Participant or former Participant
prior to death shall have filed with the Participating Employer on a form
approved by the Committee a designation of someone else as Beneficiary and the
spouse of the Participant or former Participant shall have consented in writing
to such designation and the consent acknowledges the effect of the designation
and is witnessed by a notary public or Plan representative. The spouse's consent
may be dispensed with only if the Participant establishes to the satisfaction of
the Participating Employer that the spouse's consent cannot be obtained because
the spouse cannot be located or because of such other reasons as may be
prescribed by Treasury Regulations. If no effective designation of Beneficiary
by a Participant or former Participant shall be on file with the Participating
Employer when Account Balances would otherwise be distributable to a Beneficiary
designated by a
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Participant or former Participant, then such balance shall be distributed to the
spouse of the Participant or former Participant or, if there is no spouse, to
the executor of the will or the administrator of the estate of the Participant
or former Participant or, if no such executor or administrator shall be
appointed within six (6) months after the death of such Participant or former
Participant, the Committee shall direct that distribution be made, in such
shares as the Committee shall determine, to the child, parent or other blood
relative of such Participant or former Participant, or any of them, or to such
other person or persons as the Committee may determine.
(b) Designation by Surviving Primary Beneficiary. Each person
who is a surviving primary Beneficiary designated pursuant to Section 8.05(a)
above at the time of the death of the Participant or former Participant may
designate a Beneficiary or Beneficiaries (who may be executors or trustees and
who shall be the same person or persons for each of the Participant's Accounts)
to receive, upon the death of such Beneficiary designated pursuant to Section
8.05(a) above, all or any portion of the Account Balances otherwise
distributable to the Beneficiary pursuant to Section 8.05(a) above as of such
Beneficiary's date of death. Notwithstanding any other provision of this Plan to
the contrary, any balance distributable to any Beneficiary designated by a
Beneficiary pursuant to this Section 8.05(b) shall be distributed pursuant to
one of the methods of settlement provided in Section 8.01(a)(1) or (a)(2) as
elected by the Beneficiary designated pursuant to this Section 8.05(b) as soon
as practicable after the date of death of the Beneficiary designated pursuant to
Section 8.05(a) above and such balance shall be computed as of the Valuation
Date immediately preceding such date of death (or, if such date of death
coincides with a Valuation Date, then as of that Valuation Date). Any
designation made pursuant to this Section 8.05(b) may be made at any time prior
to the distribution of the Account Balances in the Participant's or former
Participant's accounts to the Beneficiary designated pursuant to Section
8.05(a), or if distribution shall have begun in periodic installments, prior to
the distribution of the last installment to the Beneficiary designated pursuant
to Section 8.05(a) above. Any designation made pursuant to this Section 8.05(b)
shall be made in a writing filed with the Participating Employer on a form
approved by the Committee and signed
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by the Beneficiary designated pursuant to Section 8.05(a) above. Any designation
made pursuant to this Section 8.05(b) may be revoked or changed by the
Beneficiary designated pursuant to Section 8.05(a), in a writing filed with the
Participating Employer on a form approved by the Committee, at any time prior to
distribution of such Account Balances to the Beneficiary designated pursuant to
Section 8.05(a) or, if distribution shall have begun in periodic installments,
at any time prior to distribution of the last installment to such Beneficiary.
If no effective designation of Beneficiary pursuant to this Section 8.05(b)
shall be on file with the Participating Employer upon the death of the
Beneficiary designated pursuant to Section 8.05(a) above, any balance otherwise
then distributable to the Beneficiary designated pursuant to Section 8.05(a)
above shall be distributed to the spouse of such Beneficiary or, if there is no
spouse, to the executor of the will or the administrator of the estate of such
Beneficiary or, if no such executor or administrator shall be appointed within
six (6) months after the death of such Beneficiary, the Committee shall direct
that distribution be made, in such shares as the Committee shall determine, to
the child, parent or other blood relative of such Beneficiary, or any of them,
or to such other person or persons as the Committee may determine.
8.06. Payment in Event of Legal Disability. If a Participant,
former Participant or Beneficiary is under a legal disability or, by reason of
illness or mental or physical disability, is unable, in the opinion of the
Committee, to attend properly to his personal financial matters, the Trustee may
make such payments in such of the following ways as the Committee shall direct
to the spouse, child, parent or other blood relative of such Participant, former
Participant or Beneficiary, or any of them, or to such other person or persons
as the Committee may determine until such date as the Committee shall determine
that such incapacity no longer exists.
8.07. Missing Distributees. If all or any part of the interest
of any Participant, former Participant or Beneficiary becomes distributable
hereunder and the whereabouts of such Participant, former Participant or
Beneficiary is then unknown to the Participating Employer and the Participating
Employer fails to receive a claim for such distribution from the person entitled
thereto, or from any other person validly
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acting in his behalf, within two (2) years thereafter, then the amount of such
distribution shall be forfeited as of the next Valuation Date; provided,
however, that if the person entitled to receive such distribution subsequently
claims it, the amount shall be restored. Any such Forfeiture shall be applied as
soon as practicable to reduce Participating Employer contributions under the
Plan.
8.08. Information Required of Distributees. Each Participant,
former Participant and Beneficiary of a deceased Participant shall file with the
Participating Employer from time to time in writing his post office address and
each change of post office address. Any communication, statement or notice
addressed to such person at his last post office address filed with the
Participating Employer, or if no such address was filed with the Participating
Employer then at his last post office address as shown in a Participating
Employer's records, if any, shall be binding on such person for all purposes of
this Plan, and neither any Participating Employer nor the Trustee shall be
obligated to search for or ascertain the whereabouts of any Participant, former
Participant or Beneficiary.
8.09. Direct Rollover Provision.
(a) Direct Rollover Option. Notwithstanding any provision of
this Plan to the contrary that would otherwise limit a distributee's election
under this paragraph (a), a distributee may elect, at the time and manner
prescribed by the Plan Administrator, to have any portion of an eligible
rollover distribution paid directly to an eligible retirement plan specified by
the distributee in a direct rollover.
(b) Eligible Rollover Distribution Defined. For purposes of
this Section 8.09, an eligible rollover distribution is any distribution of all
or any portion of the balance to the credit of the distributee, except that an
eligible rollover distribution shall not include: (1) 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, (2) any distribution to the extent such
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distribution is required under Section 401(a)(9) of the Code, and (3) the
portion of any distribution that is not includible in gross income (determined
without regard to the exclusion for net unrealized appreciation with respect to
employer securities).
(c) Eligible Retirement Plan Defined. For purposes of this
Section 8.09, an eligible retirement plan is (1) an individual retirement
account described in Section 408(a) of the Code, (2) an individual retirement
annuity described in Section 408(b) of the Code, (3) an annuity plan described
in Section 403(a) of the Code, or (4) a qualified trust described in Section
401(a) of the Code, that accepts the distributee's eligible rollover
distribution; provided, 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.
(d) Distributee Defined. For purposes of this Section 8.09, a
distributee is an Employee or former Employee. In addition, the Employee's or
former Employee's surviving spouse and the Employee's or former Employee's
spouse or former spouse who is the alternate payee under a "qualified domestic
relations order", as defined in Section 414(p) of the Code, are distributees
with regard to the interest of the spouse or former spouse.
(e) Direct Rollover Defined. For purposes of this Section
8.09, a direct rollover is any payment by the Plan to the eligible retirement
plan specified by the distributee.
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ARTICLE IX
IN-SERVICE WITHDRAWALS
9.01. Hardship Withdrawals. In addition to any other
withdrawals that may be made pursuant to this Article IX, a Participant may,
prior to his Severance From Service, apply for a withdrawal of a specified
portion of the vested Account Balances in his Accounts (except his Kensington
Money Purchase Account and amounts invested in life insurance policies pursuant
to Section 5.19), in accordance with the following:
(a) Amount and Frequency. Subject to the limitations set forth
in Section 9.04 and subject to such uniform and nondiscriminatory rules as may
be promulgated from time to time by the Committee, a Participant may apply not
more frequently than once during any twelve (12) month period for a hardship
withdrawal of all or any part of his Account Balances not previously withdrawn
(excluding earnings credited on Tax Deferred Contributions after December 31,
1988 and amounts invested in life insurance policies pursuant to Section 5.19).
(b) Hardship Required. The withdrawal must be for an immediate
and heavy financial need of the Participant for which funds are not reasonably
available from other resources of the Participant. A Participant shall be deemed
to have an immediate and heavy financial need if the hardship is on account of
(1) unreimbursed medical expenses incurred by the Participant, the Participant's
spouse, or any dependents, or necessary for such person to obtain medical care,
(2) the purchase of the principal residence of the Participant (excluding
regular mortgage payments), (3) tuition and related educational fees for
post-secondary education for the Participant, the Participant's spouse, or
dependents for the following twelve (12) months, and (4) the need to prevent
eviction from or foreclosure on the Participant's principal residence. A
Participant shall be deemed to have established that the amount to be withdrawn
is not reasonably available from other resources if the Participant has obtained
all other in-service withdrawals, distributions and nontaxable loans available
under this Plan and any other plan maintained by the Participating Employer. Any
determination of the
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existence of financial hardship and the amount to be distributed as a result
thereof shall be made by the Participating Employer in accordance with the Code
and the applicable regulations and using a uniform and nondiscriminatory
standard. If approved by the Participating Employer, such withdrawal shall not
exceed the amount required to meet the need created by the hardship, including
any amounts necessary to pay any Federal, State or local income taxes or
penalties reasonably anticipated to result from the withdrawal.
(c) Notice Requirement. Any application for a hardship
withdrawal made pursuant to this Section 9.01 shall be submitted to the
Participating Employer within a period as may be specified by the Committee and
must be on a form approved by the Committee.
(d) Effective Date and Valuation Date. A hardship withdrawal
shall be effective as of the Valuation Date coincident with or immediately
preceding a Participant's request for a hardship withdrawal and valued as of the
same Valuation Date. Payment of any amount withdrawn pursuant to this Section
9.01 shall be made as soon as practicable on or after the effective date of such
hardship withdrawal.
(e) Effect on Account Balances and Investment Funds. Whenever
a Participant's Account Balances are withdrawn pursuant to this Section 9.01,
such Account Balances shall be reduced from his Accounts in the following order:
(1) any Supplemental Account; (2) any Rollover Account; (3) any Tax Deferred
Account and Cash Option Account, on a pro rata basis; (4) any Company Matching
Account; and (5) any Profit-Sharing Account. Amounts allocated to the Investment
Funds in the Accounts from which amounts are withdrawn pursuant to this Section
9.01 shall be reduced on a pro rata basis.
(f) Limitations. If a hardship withdrawal is made pursuant to
this Section 9.01, the Participant may not make Tax Deferred Contributions or,
in the case of a Participant employed by a MasterBrand Participating Employer,
Supplemental Contributions for a period of twelve (12) months following the date
of receipt of the distribution, and the dollar limitation specified in Section
4.04 shall be reduced for the Plan Year following the year of withdrawal by the
amount of the Tax Deferred Contributions made by the Participant during the Plan
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Year of the hardship withdrawal. Notwithstanding any other provision of this
Plan to the contrary, the amount of any hardship withdrawal made pursuant to
this Section 9.01 shall be limited in accordance with Section 9.04.
9.02. Withdrawals Upon Attainment of Age 59-1/2.
(a) Amount. In addition to any other withdrawals that may be
made pursuant to this Article IX, and subject to the limitations set forth in
Section 9.04, a Participant may, prior to his Severance From Service apply for a
withdrawal of all or any portion of his vested Account Balances in his Accounts
(except his Kensington Money Purchase Account and amounts invested in life
insurance policies pursuant to Section 5.19) after he has attained age
fifty-nine and one-half (59-1/2).
(b) Notice Requirement. Any application for a withdrawal made
pursuant to this Section 9.02 shall be submitted to the Participating Employer
within a period prior to the effective date of the withdrawal as may be
specified by the Committee and must be on a form approved by the Committee.
(c) Effective Date and Valuation Date. A withdrawal made
pursuant to this Section 9.02 shall be effective as of the Valuation Date
coincident with or next succeeding a Participant's request for such withdrawal
and valued as of such Valuation Date. Payment of any amount withdrawn pursuant
to this Section 9.02 shall be made as soon as practicable on or after the
effective date of such withdrawal in a single sum payment in cash.
(d) Effect on Account Balances and Investment Funds. Whenever
a Participant's Account Balances are withdrawn pursuant to this Section 9.02,
such Account Balances shall be reduced from his Accounts in the following order:
(1) any Supplemental Account or Grandfathered After-Tax Account; (2) any
Grandfathered Withdrawal Account; (3) any Rollover Account; (4) any Tax Deferred
Account and Cash Option Account, on a pro rata basis; (5) any Company Matching
Account; and (6) any Profit-Sharing Account. Amounts allocated to the Investment
Funds in the Accounts from which amounts are
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withdrawn pursuant to this Section 9.02 shall be reduced on a pro rata basis.
9.03. Withdrawals From Grandfathered Withdrawal Accounts and
Grandfathered After-Tax Accounts.
(a) In General. Subject to the limitations set forth in
Section 9.03(b), in addition to any other withdrawals described in this Article
IX, a Participant may elect to withdraw all or any part of the Account Balances
in his Grandfathered Withdrawal Account or Grandfathered After-Tax Account. Any
election to withdraw such Account Balances must be made within the time period
prior to the effective date of such withdrawal as may be designated by the
Committee and in the form specified by the Committee. If such Participant elects
to withdraw all of the Account Balances in his Grandfathered After-Tax Account,
such Account Balances shall be distributed to him pursuant to one of the methods
of distribution provided for in Section 8.01(a)(1) or (2) as he shall specify.
If such Participant elects to withdraw part of the Account Balances in his
Grandfathered After-Tax Account or all or any part of the Account Balances in
his Grandfathered Withdrawal Account, such Account Balances shall be distributed
to him in a single distribution in cash. The amount to be reduced by reason of a
Participant's election to withdraw all or any part of the Account Balances in
his Grandfathered Withdrawal Account or Grandfathered After-Tax Account shall be
valued as of the Valuation Date next succeeding the date of filing his election
to withdraw. Whenever all or any part of the Account Balances in a Participant's
Grandfathered Withdrawal Account or Grandfathered After-Tax Account is withdrawn
pursuant to this Section 9.03, amounts allocated therein to the Investment Funds
shall be reduced on a pro rata basis.
(b) Limitations. Notwithstanding any other provision of this
Plan to the contrary, a Participant who is an Employee of a Beam Participating
Employer shall not withdraw any amounts held in his Grandfathered Withdrawal
Account until he has been a Participant for at least three (3) years and the
amount that such Participant may withdraw from his Grandfathered Withdrawal
Account shall be limited to his Withdrawal Balance in such Grandfathered
Withdrawal Account. Such Participant's Withdrawal Balance shall be the Account
Balance in his Grandfathered Withdrawal Account as of the Valuation Date
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coincident with or next succeeding the date of filing of his request to
withdraw, minus the value as of such Valuation Date of his Grandfathered
Withdrawal Account as of the Annual Valuation Dates in each Plan Year ended
within the two (2) years prior to the start of the Plan Year in which such
request to withdraw is filed. In no event shall such Participant be permitted to
withdraw any part of the contribution of a Beam Participating Employer made
within two (2) years prior to the date of such withdrawal. Notwithstanding any
other provision of this Plan to the contrary, a Participant who is an Employee
of an Acushnet Participating Employer may not withdraw any Account Balances in
his Grandfathered Withdrawal Account attributable to company matching
contributions made under the Acushnet Company Employee Savings Plan that have
not been held for at least two (2) years.
9.04. Limitation on Withdrawals. Notwithstanding any other
provision of this Plan to the contrary, any withdrawal made pursuant to this
Article IX from the Frozen Mutual Benefit GIC Fund shall be solely for hardship
and shall be limited to the greater of:
(a) the vested amount that can be withdrawn from the Mutual
Benefit Life Insurance Company guaranteed income contract in which the
Fund is invested; and
(b) the Participant's Account Balances invested in the Frozen
Mutual Benefit GIC Fund that may be paid pursuant to the Cash Advance
program set forth in Section 4.09; provided, however, that the
withdrawal shall be limited so that the sum of the Cash Advances used
to fund the withdrawal plus all other annual additions credited to the
Participant's Accounts (including any previous Cash Advances) for that
Plan Year does not exceed the contribution limits set forth in Section
415 of the Code.
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ARTICLE X
LOANS
10.01. Availability. A Participant may make application to his
Participating Employer to borrow from the vested portion of his Account
Balances; provided, however, that a Participant who is an Employee of an ACCO
Participating Employer may not borrow any portion of the Account Balances in his
Kensington Money Purchase Account and may not apply for a loan under this Plan
prior to April 1, 1996 (other than a loan which would have been available in the
event of a hardship under the terms of the ACCO World Corporation Profit-Sharing
Plan in effect as of December 31, 1995). The Participating Employer may, upon
such uniformly applicable conditions as the Committee shall prescribe, make such
a loan in accordance with this Article X. No more than one loan the purpose of
which is to acquire any dwelling unit which within a reasonable time is to be
used as the principal residence of the Participant and one loan for any other
purpose may be outstanding to a Participant at any time and a Participant may
not apply for more than one loan of each type within the same recordkeeping
month. A Participant may not apply for a new loan until ninety (90) days after
the prior loan is repaid in full. Notwithstanding the foregoing, any loans
outstanding as of December 31, 1995 of a Participant who is an Employee of
Fortune or an ACCO Participating Employer or Beam Participating Employer (1)
shall not be included for purposes of determining the number of loans that may
be outstanding under this Plan, (2) shall not be subject to the ninety-day
limitation set forth in the immediately preceding sentence and (3) shall not be
refinanced. A former Participant whose Accounts have not been distributed and
who is a party-in-interest within the meaning of Section 3(14) of ERISA may also
make an application to borrow to the extent required by Federal law.
10.02. Effect on Account Balances and Investment Funds. A loan
shall be made as of the Valuation Date next succeeding the Participating
Employer's receipt of the loan application and shall be based on the
Participant's Account Balances as of the Valuation Date immediately preceding
the Valuation Date as of which the loan is made. Whenever all or any part of a
Participant's Account Balances are borrowed, the
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amount representing such vested Account Balances or part thereof transferred to
the Loan Fund shall be reduced effective August 1, 1996 in the following order:
(a) any Profit-Sharing Account; (b) any Company Matching Account; (c) any Tax
Deferred Account and Cash Option Account, on a pro rata basis; (d) any Rollover
Account; (e) any Supplemental Account; (f) any Grandfathered Withdrawal Account
and (g) any Grandfathered After-Tax Account. The loan and such reduction shall
be effective as of the same Valuation Date. A loan shall be withdrawn from the
respective Investment Funds in which such vested Account Balances are invested
on a pro rata basis; provided, however, no loans shall be made from Account
Balances invested in the Frozen Mutual Benefit GIC Fund or amounts invested in
life insurance policies pursuant to Section 5.19.
10.03. Amount. The amount of any loan made pursuant to this
Article X shall not be less than one thousand dollars ($1,000). The aggregate
amount of all such loans to a Participant or eligible former Participant shall
not exceed fifty percent (50%) of the vested portion of his Account Balances
under the Plan, and shall not exceed fifty thousand dollars ($50,000) minus the
largest outstanding Plan loan balance during the twelve (12) month period ending
the day before the loan is made.
10.04. Term of Loan. The term of a loan shall not exceed five
(5) years. Notwithstanding the foregoing, the term of a loan shall not exceed
ten (10) years if its purpose is to acquire any dwelling unit which within a
reasonable time is to be used as the principal residence of the Participant.
10.05. Promissory Note. A secured promissory note shall be
delivered to the Trustee pledging as collateral a portion of the Participant's
vested interest in his Accounts not less than the amount of the borrowing.
Interest on a loan shall be fixed by the Committee at a rate reasonably
equivalent to prevailing market interest rates.
10.06. Repayment. The loan shall be repaid in regular
installments in each pay period, by means of payroll deductions. Prepayment of a
loan in its entirety without penalty shall be permitted at any time. Partial
prepayment of a loan shall not be permitted at any time.
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Notwithstanding the foregoing, repayment by a Participant who is on an Approved
Leave of Absence or by an eligible former Participant shall be made by such
Participant or former Participant on at least a monthly basis to the Trustee by
means of a check or money order delivered to the Participating Employer. A loan
which is not repaid when due shall be deemed to be in default. A loan under the
Plan shall constitute an earmarked investment of the borrowing Participant's
Accounts. Loan repayments shall be credited to the Participant's Account or
Accounts from which the loan was made monthly on a pro rata basis. For
Participants who are Employees of all Participating Employers other than
Fortune, loan repayments shall be credited to the Investment Funds monthly in
accordance with the Participant's investment election under Section 5.02 in
effect at the time of repayment of the loan or, in the absence of such
investment election, to the Short-Term Investment Fund. For Participants who are
Employees of Fortune, loan repayments shall be credited to the Investment Funds
monthly in accordance with the Participant's investment election with respect to
all contributions other than Profit-Sharing Contributions in effect at the time
of repayment of the loan, or, in the absence of such an investment election, in
accordance with the Participant's investment election with respect to
Profit-Sharing Contributions to the Plan in effect at the time of repayment of
the loan or, in the absence of such investment election, to the Short-Term
Investment Fund.
10.07. Reduction of Account Balance. Upon a Participant's
termination of employment or at such other time as the Participant's Account
Balances are distributed before a loan is repaid in full, the unpaid balance
thereof, together with interest due and payable thereon, shall become due and
payable, and the Trustee shall first satisfy the indebtedness from the amount
payable to the Participant before making any payments to Participant. If a loan
becomes in default, foreclosure on the promissory note and attachment of
security on such loan will not occur until a distributable event occurs under
the Plan.
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ARTICLE XI
ADMINISTRATION OF PLAN
11.01. Fiduciaries.
(a) Allocation of Responsibility Among Fiduciaries for Plan
and Trust Administration. The Fiduciaries shall have only those specific powers,
duties, responsibilities and obligations as are specifically given them under
this Plan, the Trust Agreement or the Special Trust Agreement or delegated to
them by the Company. In general, the respective Participating Employers shall
the have the sole responsibility for making the contributions provided for under
Article III. The Board of Directors shall have the sole authority to appoint and
remove the members of the Committee, the members of the Trusts Investment
Committee and the Trustee, and to amend or terminate, in whole or in part, this
Plan or the Trust. The board of directors of ACCO shall have the sole authority
to appoint and remove the Special Trustee. The Company shall be the Plan
administrator for purposes of ERISA and shall have the sole responsibility for
the administration of this Plan, except that the Committee, or its delegate, the
Participating Employers and the Trusts Investment Committee shall have the sole
responsibility for the performance of those administrative duties specifically
given them as described in this Plan. The Executive Committee of the Board of
Directors shall have the sole authority to appoint Investment Managers and
select mutual funds. The Trustee shall have the sole responsibility for the
administration of the Trust and the management of the assets held thereunder,
except that, if one or more Investment Managers are appointed, each Investment
Manager shall have sole authority and responsibility for the investment and
reinvestment of such portion of the Investment Funds as the Trusts Investment
Committee directs. The Special Trustee shall have the sole responsibility for
the administration of the Special Trust and the management of the assets held
thereunder. The Investment Managers shall have the sole authority to exercise
the right to vote proxies with respect to any securities held in the Trust,
except for proxies with respect to Fortune Common Stock held in the Fortune
Stock Fund and Gallaher ADRs held in the Gallaher Fund, except that the Trusts
Investment Committee shall
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vote proxies with respect to investment funds held in mutual funds.
(b) Reliance of Fiduciaries. Each Fiduciary may rely upon any
direction, information or action of another Fiduciary with respect to matters
within the responsibility of such other Fiduciary as being proper under this
Plan or any funding instrument and is not required under this Plan or funding
instrument to inquire into the propriety of any such direction, information or
action. To the maximum extent permitted by law, it is intended under this Plan
that each Fiduciary shall be responsible for the proper exercise of its own
powers, duties, responsibilities and obligations under this Plan and shall not
be responsible for any act or failure to act of another Fiduciary. To the
maximum extent permitted by ERISA, no other Fiduciary shall be liable for any
loss which may result from a decision of an Investment Manager with respect to
Plan assets under its control.
(c) Named Fiduciary. Fortune shall be the "Named Fiduciary"
for purposes of ERISA. The Secretary of Fortune shall be subject to service of
process on behalf of the Plan.
11.02. Corporate Employee Benefits Committee. The general
administration of the Plan and the responsibility for carrying out its
provisions shall be placed in a Corporate Employee Benefits Committee appointed
from time to time by the Board of Directors to serve at its pleasure. No person
shall be ineligible to be a member of the Committee because he is, was or may
become a Participant of the Plan.
11.03. Organization of Committee. The Board of Directors shall
elect a Chairman from among the members of the Committee and a Secretary who may
be but need not be a member of the Committee.
11.04. Action by Committee. The Committee shall hold meetings
upon such notice, at such place or places and at such time or times, as it may
from time to time determine. A majority of the members of the Committee at the
time in office shall constitute a quorum for the transaction of business. All
resolutions adopted or other action taken by the Committee shall be by vote of a
majority of the members of the Committee present at
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any meeting or without a meeting by instrument in writing signed by a majority
of the members of the Committee. A dissenting Committee member who, within a
reasonable time after he has knowledge of any action or failure to act by the
majority, takes such reasonable and legal steps in opposing such action or
failure to act as may be appropriate, shall not be responsible for any such
action or failure to act.
11.05. Disqualification of Committee Members. No member of the
Committee shall have any right to vote or decide upon any matter relating solely
to himself or solely to any of his rights or benefits under the Plan.
11.06. Committee Rules; Conclusiveness of Determinations. The
Committee, subject to the limitations of the Plan, shall from time to time
establish rules for the administration of the Plan and the transaction of its
business and shall make determination of all questions arising out of or in
connection with the provisions of the Plan not required by the Plan to be
determined by the Board of Directors or its Executive Committee, a Participating
Employer or the board of directors of another Participating Employer, the
Internal Audit Department of Fortune or the independent public accountants who
audit the books of Fortune and its consolidated subsidiaries, and any such
determination shall be conclusive upon all persons having an interest in or
under the Plan. Notwithstanding any other provision of this Plan to the
contrary, the Committee may delegate any of its responsibilities for
administration of the Plan. The foregoing powers of the Committee and any of its
delegates shall be exercised in accordance with the provisions of Sections 11.07
and 11.14.
11.07. Committee Powers and Duties. The Committee shall have
such powers and duties as may be necessary to discharge its responsibilities
hereunder, including, but not by way of limitation, the following:
(a) except as otherwise specified in Section 11.06, to
construe and interpret the Plan, decide all questions of eligibility and
determine the manner and time of payment of any benefits hereunder;
(b) to prescribe procedures to be followed by Participants,
former Participants and/or Beneficiaries filing applications for benefits;
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(c) to prepare and distribute, in such manner as the Committee
determines to be appropriate, information explaining the Plan;
(d) to receive from the Participating Employers, the Trustee,
the Special Trustee and Participants such information as shall be necessary for
the proper administration of the Plan;
(e) to prepare such reports in accordance with Section 11.08;
(f) to receive, review, and keep on file (as it deems
convenient or proper) reports of the financial condition, and of the receipts
and disbursements, of the Trust and the Special Trust;
(g) to direct the Trustee and the Special Trustee with respect
to the payment of benefits; and
(h) to employ agents, attorneys, accountants, or other persons
(who also may be employed by any Participating Employer or the Trustee or the
Special Trustee), and to allocate or delegate to them such powers, rights, and
duties as the Committee may consider necessary or advisable to properly carry
out the administration of the Plan, including but not limited to maintaining the
accounts of Participants and determining eligibility and claims for benefits and
applications for loans and in-service withdrawals, provided that such allocation
or delegation, and the acceptance thereof by such agents, attorneys,
accountants, or other persons, shall be in writing.
11.08. Reports. The Committee shall prepare annually a report
showing in reasonable detail the assets of the Plan and giving a brief account
of the operation of the Plan for the preceding Plan Year. Such report shall be
submitted to the Board of Directors and a copy thereof shall be filed with the
Secretary of the Committee. The Committee shall exercise such authority and
responsibility as it deems appropriate in order to comply with ERISA and
governmental regulations issued thereunder relating to records of Participants'
employment, Account Balances and the percentages thereof which are vested under
the Plan; notifications to Participants; annual registration with the Internal
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Revenue Service and annual reports to the Department of Labor.
11.09. Claims Procedure. The Participating Employer shall make
all determinations as to the right of any person to a benefit. Any denial by the
Participating Employer of the claim for benefits under the Plan by a
Participant, former Participant or Beneficiary shall be stated in writing by the
Participating Employer and delivered or mailed to the Participant, former
Participant or Beneficiary within ninety (90) days after receipt by the
Participating Employer; and such notice shall set forth the specific reasons for
the denial. In the event of a denial of a claim, a claimant may notify the
Committee in writing within sixty (60) days after receipt of written denial of
the claim that the claimant wishes a review of the denial of the claim and
present to the Committee a written statement of the claimant's position. The
Committee shall act upon such request for review within sixty (60) days after
receipt thereof unless special circumstances require further time, but in no
event later than one hundred twenty (120) days after receipt. If the Committee
confirms the denial, in whole or in part, the Committee shall present in a
written notice to the claimant the specific reasons for denial and specific
references to the Plan provisions on which the decision was based, in a manner
calculated to be understood by the claimant.
11.10. Data Concerning Participants. The Committee shall
determine the eligibility of Participants in accordance with the provisions of
the Plan. The Committee may require each Participating Employer to certify to it
such data with respect to employees or Participants who are or may be eligible
for benefits under the Plan (including, without limitation, dates of birth,
marital status, dates of entry into employment, Hours of Service and
compensation), and such data relating to the Participating Employer, as the
Committee may deem appropriate from time to time in order properly to administer
the plan. In determining Disability, the Participating Employer shall require as
proof thereof evidence of receipt of Social Security disability benefits.
11.11. Certification of Data. Any certification by a
Participating Employer of information required or permitted to be certified
pursuant to the
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Plan shall be conclusive on all parties in interest; provided, however, that
whenever any employee, Participant, former Participant or Beneficiary proves to
its satisfaction that the period of employment or Hours of Service or
compensation or date of birth or marital status or other data as so certified is
incorrect, the Participating Employer may correct such certification where it
deems this action appropriate in the circumstances.
11.12. Indemnity of Board of Directors and Committee Members.
The members of the Board of Directors, the members of the boards of directors of
each other Participating Employer, the members of the Executive Committee of the
Board of Directors, the members of the Committee and the members of the Trusts
Investment Committee shall be entitled to rely on any certification furnished by
a Participating Employer and upon reports or opinions furnished by any
accountant, actuary, Investment Manager, investment adviser of a mutual fund
which comprises an Investment Fund or legal counsel employed or retained by
Fortune. The Participating Employers shall indemnify members of the Board of
Directors, members of the boards of directors of each other Participating
Employer, members of the Executive Committee of the Board of Directors, members
of the Committee and members of the Trusts Investment Committee and any other
employee who may act on their behalf, and each of them, and save them and each
of them harmless from the effects and consequences of their acts, omissions and
conduct in their official capacity, except to the extent that such effects and
consequences shall result from their own willful misconduct.
11.13. Indemnity for Acts of Investment Managers. The members
of the Board of Directors, the members of the boards of directors of each other
Participating Employer, the members of the Executive Committee of the Board of
Directors, the members of the Committee and the members of the Trusts Investment
Committee and any other employee who may act on their behalf, and each of them,
shall be indemnified and saved harmless from all liability, joint or several,
for any loss to the Trust, including any depreciation of principal or loss of
income resulting from the purchase or retention of any property or any other
investment action made or taken by any Investment Manager or investment adviser
of a mutual fund which comprises an
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Investment Fund or any such action made or taken by the Trustee acting on their
instructions.
11.14. Non-Discriminatory Action. Whenever in the
administration of the Plan action by the Board of Directors or the Committee is
required or permitted with respect to eligibility or classification of
employees, contributions or benefits, such action shall be consistently and
uniformly applied to all persons similarly situated, and no such action shall be
taken which shall discriminate in favor of employees who are officers,
stockholders or highly compensated employees.
11.15. Plan Expenses. All reasonable expenses in connection
with the administration of the Plan, including fees of the Trustee and the
Special Trustee and their counsel or agents, expenses incident to investments of
the Trust and the Special Trust and any Federal, State or other taxes levied
against the Trust or the Special Trust, fees of accountants, actuaries,
attorneys, and Investment Managers and any other proper expenses of
administering the Plan as determined by the Committee, shall be paid from the
Trust and the Special Trust, respectively; provided, however, that the
Participating Employers may pay their respective shares of such expenses
directly.
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ARTICLE XII
MANAGEMENT OF TRUSTS
12.01. Funds in Trusts. All the assets of the Plan shall be
held in the Trust, comprising the Fortune Stock Fund, the Gallaher Fund, the
Value Equity Fund, the Large-Cap Growth Equity Fund, the Small-Cap Growth Equity
Fund, the International Equity Fund, S&P 500 Index Fund, the Growth-Oriented
Diversified Fund, the Value-Oriented Diversified Fund, the Corporate/Government
Bond Fund, the Government Securities Fund, the Short-Term Investment Fund, the
Frozen Fixed Fund and the Loan Fund, or in the Special Trust, for use in
accordance with the provisions of the Plan in providing benefits for
Participants, former Participants and Beneficiaries. To the extent permitted by
the Trust Agreement, the Trust may also hold assets of any profit-sharing plan
maintained by a Participating Employer or Non-Participating Employer for use in
accordance with the provisions of such plan. The assets of the Trust and the
Special Trust will be held, invested and disposed of in accordance with the
terms of the Trust Agreement and the Special Trust Agreement, respectively. All
contributions under this Plan shall be paid to the Trustee or the Special
Trustee, as the case may be, and, except as otherwise provided in Section 14.03,
all assets of the Trust Fund and the Special Trust Fund allocable to the Plan,
including income from investments and from all other sources, shall be retained
for the exclusive benefit of Participants, former Participants and
Beneficiaries, and shall be used to pay benefits to such persons or to pay
expenses of administration of the Plan and the Trust and the Special Trust to
the extent not paid by Fortune or another Participating Employer.
12.02. Trustee and Trust Agreement. The Trust shall be held by
a Trustee under a Trust Agreement approved by the Board of Directors, with such
powers in the Trustee as shall be provided in the Trust Agreement and in
accordance with the provisions of the Plan. The Trust Agreement may provide for
the administration thereunder of the funds of any other defined contribution
plan established by Fortune or any other Related Employer and for the
commingling of all funds administered under the Trust Agreement. The Trustee
shall be such bank or trust company as may be appointed by the Board of
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Directors from time to time. The Board of Directors may remove a Trustee at any
time, upon reasonable notice, and upon such removal, or upon the resignation of
a Trustee, the Board of Directors shall appoint a successor Trustee.
12.03. Special Trustee and Special Trust Agreement. The
Special Trust shall be held by a Special Trustee under a Special Trust Agreement
approved by the board of directors of ACCO, with such powers in the Special
Trustee as shall be provided in the Special Trust Agreement and in accordance
with the provisions of the Plan. The Special Trustee shall be such bank or trust
company as may be appointed by the board of directors of ACCO from time to time.
The board of directors of ACCO may remove a Special Trustee at any time, upon
reasonable notice, and upon such removal, or upon the resignation of a Special
Trustee, the board of directors of ACCO shall appoint a successor Special
Trustee.
12.04. Investment Managers. The Executive Committee of the
Board of Directors may appoint one or more investment counsel as Investment
Managers of all or a portion of the Investment Funds held in the Trust and grant
to each such Investment Manager full and sole authority and responsibility for
the investment and reinvestment of such portion thereof as the Trusts Investment
Committee so directs. The Executive Committee of the Board of Directors may
remove an Investment Manager at any time, upon reasonable notice, and upon such
removal, or upon the resignation of an Investment Manager, the Executive
Committee of the Board of Directors may appoint another Investment Manager. The
Executive Committee of the Board of Directors shall also have authority to
designate mutual funds for investments of the Plan.
12.05. Conclusiveness of Reports. Any report of the Trustee or
the Special Trustee required or permitted under the Plan shall be conclusive
upon all Participants, former Participants, and Beneficiaries.
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ARTICLE XIII
AMENDMENT AND TERMINATION
13.01. Reserved Powers. Fortune shall have the power by action
of its Board of Directors at any time and from time to time to amend, replace or
terminate, in whole or in part, this Plan; provided, however, that no amendment,
under any circumstances, may be adopted, the effect of which would be to: (a)
revest in any Participating Employer any interest in the assets of the Plan or
any part thereof or (b) decrease, either directly or indirectly, the accrued
benefit of any Participant (except as permitted by Code Section 411(d)(6) and
applicable regulations and rulings); except that amendments may be so made if,
in the opinion of counsel for Fortune, such action is necessary to qualify, or
maintain the qualification of, this Plan under the provisions of the Code.
Notwithstanding the foregoing, no amendment may be adopted without the approval
of the stockholders of Fortune that would increase the benefits accruing to
Participants who are Employees of Fortune, increase the number of shares of
Fortune Common Stock which may be issued under the Plan to Participants who are
Employees of Fortune or modify the requirements as to eligibility of Employees
of Fortune for participation in the Plan, provided that the Plan may be amended
to increase the Fortune contribution percentage under Sections 3.01 and 4.03 to
three-eighths (3/8) of one percent (1%) of Adjusted Income From Continuing
Operations without the approval of the stockholders of Fortune. Notwithstanding
any other provision of this Plan, each Participating Employer reserves the right
to completely discontinue its contributions hereunder and its participation in
this Plan at any time.
13.02. Plan Termination. The Plan may be terminated,
completely or partially, at any time by Fortune, by action of the Board of
Directors. In the event of complete termination of the Plan or upon the complete
discontinuance of contributions under the Plan by all Participating Employers,
and regardless of any formal corporate action, all Account Balances of all
Participants shall be fully vested and nonforfeitable, after payment of all
expenses of the Plan. In the event of complete termination of the Plan or upon
complete discontinuance of contributions under the Plan, the
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Account Balances of all Participants and former Participants shall be
distributable as provided in Article VIII, except that the Committee may direct,
then or at any subsequent time, forthwith distribution of all assets of the Plan
to those entitled thereto at the time of such direction. In the event of partial
termination of the Plan, all Account Balances of Participants as to whom the
partial termination applies, and all amounts thereafter credited to the Accounts
of such Participants that arise from any employer contributions for any period
ending prior to or on the date of such partial termination, shall be fully
vested and nonforfeitable and shall be distributable in accordance with Article
VIII.
13.03. Plan Merger. The Plan may be merged or consolidated
with, and Plan assets and liabilities may be transferred to, any other plan that
is qualified under Section 401(a) of the Code, at any time upon action by the
Board of Directors. In the event of any merger or consolidation of the Plan
with, or transfer of Plan assets or liabilities to, any other plan qualified
under Section 401(a) of the Code, provision shall be made so that each
Participant in the Plan on the date thereof (if either the Plan or such other
plan then terminated) would receive a benefit immediately after the merger,
consolidation or transfer which is equal to or greater than the benefit he would
have been entitled to receive immediately prior to the merger, consolidation or
transfer if the Plan had then terminated.
13.04. Successor Employer. In the event of the disposition of
an operating unit by Fortune or another Participating Employer whereby a
successor person, firm or company shall continue to carry on all or a
substantial part of its business, and such successor shall elect to carry on the
provisions of this Plan in such manner as is satisfactory to Fortune, Fortune
may cause the assets of the Plan allocable to the Employees of such operating
unit to be transferred to the successor funding agent. In the absence of such a
transfer, distribution may be made with respect to such Employees as if the date
of disposition constituted the date of termination of employment of each such
Employee.
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ARTICLE XIV
MISCELLANEOUS
14.01. Non-Alienation of Benefits.
(a) Interest Non-Transferable. Except as may be required by a
Qualified Domestic Relations Order, benefits under this Plan shall not in any
way be subject to the debts or other obligations of any Participant, former
Participant or Beneficiary, and may not be voluntarily or involuntarily sold,
transferred or assigned.
(b) Application of Benefits. If any Participant, former
Participant or Beneficiary or other person having an interest in or under this
Plan or the Trust or the Special Trust shall become bankrupt or shall attempt to
anticipate, alienate, sell, transfer, assign, pledge, encumber or charge any
benefit under the Plan or interest in the Trust or the Special Trust, then such
benefit or interest shall cease and determine, and in that event the Trustee or
the Special Trustee, as the case may be, shall hold or apply it, in such shares
as the Committee shall determine, to or for the benefit of such Participant,
former Participant or other person, or his spouse, child, parent or other blood
relative, or any of them, or to such other person or persons as the Committee
may determine, but the Trustee or the Special Trustee, as the case may be, shall
be under no duty to see to the application of any distributions so made.
14.02. Action by Participating Employers. Any action by a
Participating Employer regarding participation in or withdrawal from this Plan
shall be evidenced by a resolution of its board of directors certified by its
secretary or assistant secretary under its corporate seal. All actions taken in
administration of this Plan shall be taken by the appropriate members of the
Committee or officers of the Participating Employer or its other employees
authorized to take such actions by such officers.
14.03. Exclusive Benefit. The Participating Employers shall
have no right, title or interest in the assets of the Trust or the Special
Trust, nor will any part of the assets of the Trust or the Special Trust at
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any time revert to any Participating Employer or be used for, or diverted to,
purposes other than for the exclusive benefit of Participants, former
Participants or their Beneficiaries, or for defraying Plan expenses, except as
follows:
(a) If the Internal Revenue Service initially determines that
the Plan, as applied to any Participating Employer, does not meet the
requirements of a "qualified plan" under Section 401(a) of the Code, the assets
of the Trust or the Special Trust attributable to contributions made by that
Participating Employer under the Plan shall be returned to that Participating
Employer within one (1) year of the date of denial of qualification of the Plan
as applied to that Participating Employer.
(b) If a contribution or a portion of a contribution is made
by a Participating Employer as a result of a mistake of fact, such contribution
or portion of a contribution shall not be considered to have been contributed to
the Trust or the Special Trust by that Participating Employer and, after having
been reduced by any losses of the Trust or the Special Trust attributable
thereto, shall be returned to that Participating Employer within one (1) year of
the date the amount is paid to the Trust or the Special Trust.
(c) Each contribution made by a Participating Employer is
conditioned upon the deductibility of such contribution as an expense for
Federal income tax purposes and, therefore, to the extent that the deduction for
a contribution made by a Participating Employer is disallowed, then such
contribution, or portion of a contribution, after having been reduced by any
losses of the Trust or the Special Trust attributable thereto shall be returned
to that Participating Employer within one year of the date of disallowance of
the deduction.
14.04. Gender and Number. Where the context admits, words in
the masculine gender shall include the feminine and neuter genders, the singular
shall include the plural and the plural shall include the singular.
14.05. Right to Discharge. Every Employee and Participant
shall be subject to dismissal from the service of every and all Related
Employers to the same extent as if this Plan had never been created.
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14.06. Absence of Guaranty. No Participating Employer in any
way guarantees the Trust or the Special Trust against loss or depreciation. The
liability of the Trustee or the Special Trustee or the Participating Employers
to make any payment or distribution under the Plan related to assets held or to
be held in the Trust or the Special Trust, is limited to the available assets of
the Trust or the Special Trust.
14.07. Headings. The headings of Articles and Sections are
included solely for convenience of reference and are not intended in any way to
modify or otherwise to affect the text of the Plan.
14.08. Governing Law. The Plan shall be governed by and
administered and construed under the laws of the State of New York except to the
extent that it is required to be governed by and administered and construed
under the laws of the United States of America.
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ARTICLE XV
TOP-HEAVY RULES
15.01. Top-Heavy Determination.
(a) Top-Heavy Test. The Plan is top-heavy for a Plan Year if:
(1) the top-heavy ratio for the Plan exceeds sixty percent
(60%) and the Plan is not part of a required aggregation group or a
permissive aggregation group;
(2) the Plan is part of a required aggregation group, but not
part of a permissive aggregation group, and the top-heavy ratio for the
required aggregation group exceeds sixty percent (60%); or
(3) the Plan is part of a required aggregation group and part
of a permissive aggregation group and the top-heavy ratio for every
permissive aggregation group exceeds sixty percent (60%).
(b) Top-Heavy Ratio. The top-heavy ratio is a fraction:
(1) the numerator of which is the sum of the present value of
accrued benefits under the aggregate defined benefit plan or plans for
all key employees (including any part of the accrued benefit
distributed in the five (5) year period ending on the determination
date(s)) and the sum of account balances under the aggregate defined
contribution plan or plans for all key employees as of the
determination date(s); and
(2) the denominator of which is the sum of the present values
of accrued benefits under the aggregate defined benefit plan or plans
(including any part of the accrued benefit distributed in the five (5)
year period ending on the determination date(s)) for all Participants
and the sum of the account balances under the aggregate defined
contribution plan or plans for all Participants as of the determination
date(s).
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Both the numerator and the denominator are determined in accordance with Section
416 of the Code and the applicable regulations. The account balances under a
defined contribution plan in both the numerator and denominator of the top-heavy
ratio are adjusted for any distribution of an account balance made in the five
(5) year period ending on the determination date. The value of account balances
and the present value of accrued benefits will be determined as of the most
recent valuation date that falls within or ends with the twelve (12) month
period ending on the determination date, except as provided in Section 416 of
the Code and the applicable regulations for the first and second plan years of a
defined benefit plan. The account balances and accrued benefits will be
disregarded if the Participant:
(1) is not a key employee but was a key employee in a prior
year; or
(2) has not been credited with at least one Hour of Service
with any Related Employer at any time during the five (5) year period
ending on the determination date.
The calculation of the top-heavy ratio, and the extent to which distributions,
rollovers, and transfers are taken into account will be made in accordance with
Section 416 of the Code and the applicable regulations. Proportional subsidies
and nondeductible employee contributions are ignored in computing the top-heavy
ratio. Nonproportional subsidies are considered in computing the top-heavy
ratio. When aggregating plans, the value of account balances and accrued
benefits will be calculated using the determination dates that fall within the
same calendar year.
(c) Required Aggregation Group. A required aggregation group
consists of:
(1) each qualified plan of a Related Employer in which at
least one key employee participates or participated at any time during
the determination period (regardless of whether the plan has
terminated); and
(2) any other qualified plan of a Related Employer which
enables a plan described in
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subparagraph (1) to meet the requirements of Section 401(a)(4) or 410
of the Code.
(d) Permissive Aggregation Group. A permissive aggregation
group consists of:
(1) the required aggregation group; and
(2) any other plan or plans of the Related Employers which,
when considered as a group with the required aggregation group, would
continue to satisfy the requirements of Sections 401(a)(4) and 410 of
the Code.
(e) Key Employee. A key employee is any employee or former
employee of a Related Employer (and the beneficiaries of such employee) who at
any time during the determination period was:
(1) an officer of a Related Employer with annual compensation
exceeding fifty percent (50%) of the dollar limitation under Section
415(b)(1)(A) of the Code;
(2) an owner (or considered an owner under Section 318 of the
Code) of one of the ten (10) largest interests in a Related Employer if
the individual's annual compensation exceeds the dollar limitation;
(3) a five percent (5%) owner of a Related Employer; or
(4) a one percent (1%) owner of a Related Employer with annual
compensation exceeding one hundred fifty thousand dollars ($150,000).
(f) Non-Key Employee. A non-key employee is an employee of a
Related Employer who is not a key employee, including an employee who is a
former key employee.
(g) Determination Period. The determination period is the Plan
Year containing the determination date and the four preceding Plan Years.
(h) Determination Date and Valuation Date. For the first Plan
Year, December 31, 1995 is the
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determination date and the valuation date. For any other Plan Year, the last day
of the preceding Plan Year is the determination date and the valuation date.
(i) Accrual Method. Solely for determining if the Plan, or any
other plan included in a required aggregation group of which this Plan is a
part, is top-heavy the accrued benefit of an employee of a Related Employer
other than a key employee shall be determined under (1) the method, if any, that
uniformly applies for accrual purposes under all plans maintained by the group,
or (2) if there is no such method, as if the benefit accrued not more rapidly
than the slowest accrual rate permitted under the fractional accrual rate of
Section 411(b)(1)(C) of the Code.
15.02. Minimum Vesting. Notwithstanding the provisions of
Article VII, if the Plan is top-heavy in any Plan Year, each Participant who has
an Hour of Service in such Plan Year shall have and retain a one hundred percent
(100%) vested interest in his Account Balances if he has at least three (3)
years of Vesting Service.
15.03. Minimum Contributions. Notwithstanding any other
provision of this Plan to the contrary, for any Plan Year for which the Plan is
top-heavy, unless a Participant who is a non-key employee accrues a benefit
under a retirement plan of a Related Employer for such Plan Year of not less
than two percent (2%) of his average annual compensation during the five (5)
consecutive years of his Vesting Service during which his compensation was the
greatest multiplied by his years of Vesting Service not in excess of ten (10)
(disregarding any years after the last Plan Year with respect to which the Plan
is top-heavy), each Participating Employer shall make such additional
contributions as shall be necessary to provide contributions for each Employee
eligible to participate under Article II who is not a key employee equal to
three percent (3%) of that Participant's compensation; provided that such
contribution need not exceed the greatest contribution for any key employee for
such Plan Year. The minimum contribution under this Section 15.03 shall apply
even though under other Plan provisions the Employee would not otherwise be
entitled to receive an allocation or would have received a lesser allocation for
the year because:
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(1) the individual failed to complete one thousand (1,000)
Hours of Service;
(2) the individual failed to make mandatory contributions to
the Plan; or
(3) the individual's compensation is less than a stated
amount.
If an Employee is eligible to participate under Article II and is not a key
employee, then, with respect to any Plan Year in which this Plan is top-heavy
and the Employee is similarly eligible to participate in a defined benefit plan
sponsored by Fortune or a Related Company which is also top-heavy, then the
appropriate Participating Employer shall make such additional contribution to
this Plan as shall be necessary to provide a contribution to such Employee equal
to five percent (5%) of that Employee's compensation, unless another top-heavy
coordination scheme is provided for under such defined benefit plan.
For purposes of this Article XV, the term "compensation" means compensation as
defined in Section 415 of the Code.
15.04. Special Annual Additions Limitation. In any Plan Year
for which the Plan is top-heavy, the fraction one (1.0) shall be used in place
of the fraction one and one-quarter (1.25) in applying the limitations in
Sections 6.04 and 6.05 to a Participant who has also participated in a qualified
defined benefit plan of a Related Employer.
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15.05. Provisions Applicable if Plan Ceases To Be Top-Heavy.
If the Plan is top-heavy with respect to a Plan Year and ceases to be top-heavy
for a subsequent Plan Year and a Participant has completed three (3) years of
Vesting Service on or before the last day of the most recent Plan Year for which
the Plan was top-heavy, the applicable vesting schedule set forth in Section
15.02 shall continue to apply with respect to a Participant.
FORTUNE BRANDS, INC.
By:/s/ Steven C. Mendenhall
---------------------------
Steven C. Mendenhall
Senior Vice President and
Chief Administrative Officer
Date: , 1998
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