Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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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 Identification No.)
incorporation or organization)
300 Tower Parkway, Lincolnshire, Illinois 60069
(Address of Principal Executive Offices) (Zip Code)
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Fortune Brands Retirement Savings Plan
(Full Title of the Plan)
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MARK A. ROCHE, ESQ. Copy to:
Senior Vice President,General Counsel EDWARD P. SMITH, ESQ.
and Secretary CHADBOURNE & PARKE LLP
FORTUNE BRANDS, INC. 30 Rockefeller Plaza
300 Tower Parkway New York, New York 10112
Lincolnshire, Illinois 60069
(Name and address of agent for service)
Telephone number, including area code, of agent for service: (847) 484-4400
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<S> <C> <C> <C> <C> <C>
CALCULATION OF REGISTRATION FEE
- ------------------------------------- ---------------- ----------------- -------------------- -------------------
Proposed Proposed
maximum maximum
Title of securities Amount to be offering price aggregate Amount of
to be registered registered** per share *** offering price*** registration fee
- ------------------------------------- ---------------- ----------------- -------------------- -------------------
Common Stock, Par Value $3.125 per
share, and Preferred Share
Purchase 1,300,000 $28.71875 $ 37,334,375 $9,857
Rights*........................... shares
- ------------------------------------- ---------------- ----------------- -------------------- -------------------
</TABLE>
- -------------------------------
* The Preferred Share Purchase Rights are attached to and trade with the
Common Stock. The value, if any, attributed to such Rights is reflected in
the market price of the Common Stock.
** In addition, pursuant to Rule 416(c) of the Securities Act of 1933, as
amended (the Securities Act"), this Registration Statement also covers an
indeterminate amount of interests to be offered or sold pursuant to the
employee benefit plan described herein.
*** Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(h) under the Securities Act on the basis
of the average of the high and low per share market price ($29.0625 and
$28.375, respectively) of the Common Stock on January 26, 2000, as reported
on the New York Stock Exchange Composite Transactions.
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<PAGE>
EXPLANATORY NOTE
Information required by Part I of Form S-8 to be contained in the
Section 10(a) prospectus is omitted from this Registration Statement in
accordance with the Note to Part I of Form S-8.
The Plan changed its name from the Defined Contribution Plan of
Fortune Brands, Inc. and Participating Operating Companies to the Fortune Brands
Retirement Savings Plan on October 1, 1999.
Fortune Brands changed its name from American Brands, Inc. to Fortune
Brands, Inc. on May 30, 1997.
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PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents filed by Registrant or the Plan with the
Securities and Exchange Commission are specifically incorporated herein by
reference and made a part hereof:
(i) Registrant's Annual Report on Form 10-K for the fiscal year
ended December 31, 1998, filed pursuant to Section 13(a) or 15(d) of
the Securities Exchange Act of 1934 (the "Exchange Act"), which
incorporates by reference certain information, including the Company's
1998 consolidated financial statements contained in its 1998 Annual
Report to Stockholders;
(ii) all other reports filed by Registrant pursuant to Section
13(a) or 15(d) of the Exchange Act since December 31, 1998;
(iii) the description of Registrant's Common Stock, par value
$3.125 per share, set forth under the headings "Description of Fortune
Brands Capital Stock" and "Comparative Rights of Shareholders" on pages
94-105 of Registrant's Proxy Statement for the 1997 Annual Meeting of
Stockholders of Fortune Brands, Inc.;
(iv) the description of Registrant's Preferred Share Purchase
Rights set forth on Registrant's Application for Registration on Form
8-A dated December 22, 1997;
(v) the Annual Report on Form 11-K of the Defined Contribution
Plan of Fortune Brands, Inc. and Participating Operating Companies (a
predecessor plan of the Plan) for the fiscal year ended December 31,
1998, filed pursuant to Section 15(d) of the Exchange Act; and
(vi) Registrant's Registration Statement on Form S-8 (Registration
No. 33-64071), as amended by Post-Effective Amendment No. 1 on Form
S-8.
All documents subsequently filed by Registrant or the Plan pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act, prior to the filing of a
post-effective amendment which indicates that all securities offered have been
sold or which deregisters all securities remaining unsold, shall be deemed to be
incorporated by reference in this Registration Statement and to be a part hereof
from the date of filing of such documents. Any statement contained in a document
incorporated or deemed to be incorporated by reference herein shall be deemed to
be modified or superseded for purposes of this Registration Statement to the
extent that a statement contained herein or in any 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
Registration Statement.
Item 4. Description of Securities.
This Item is not applicable as Registrant's Common Stock is registered
under Section 12 of the Exchange Act.
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Item 5. Interests of Named Experts and Counsel.
This Item is not applicable.
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.
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"(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 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,
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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 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
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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 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].
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(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 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.
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"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 7. Exemption from Registration Claimed.
This Item is not applicable.
Item 8. Exhibits.
4a1 - Restated Certificate of Incorporation of Registrant
(incorporated herein by reference to Exhibit 3(i) to the
Annual Report on Form 10-K of Registrant dated March 31,
1999).
4b1 - By-laws of Registrant, as amended, effective as of the
date hereof (incorporated herein by reference to Exhibits
3(ii)a and 3(ii)b to the Quarterly Report on Form 10-Q of
Registrant dated November 12, 1999).
4c1 - Rights Agreement dated as of November 19, 1997 between
Registrant and First Chicago Trust Company of New York, as
Rights Agent (incorporated herein by reference to Exhibit
4a to the Current Report on Form 8-K of Registrant dated
December 2, 1997).
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15a1 - Letter from PricewaterhouseCoopers LLP as to certain
unaudited financial information.
23a1 - Consent of Pricewaterhouse Coopers LLP, independent
accountants.
24a1 - Power of Attorney authorizing certain persons to sign
this Registration Statement and amendments hereto on
behalf of certain directors and officers of Registrant.
24b1 - Power of Attorney authorizing certain persons to sign
this Registration Statement and amendments hereto on
behalf of administrators of the Plan.
99a1 - Fortune Brands Retirement Savings Plan, as amended and
restated effective October 1, 1999.
99b1 - Fortune Brands, Inc. Savings Plans Master Trust,
effective as of October 1, 1999, between Registrant and
Fidelity Management Trust Company.
The Registrant will submit the Plan including any amendments thereto to
the Internal Revenue Service (the "IRS") in a timely manner and will make all
changes required by the IRS in order to maintain the tax qualified status of the
Plan.
Item 9. Undertakings.
The undersigned Registrant hereby undertakes:
(a) To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by section 10(a)(3) of
the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the Registration Statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the Registration
Statement or any material change to such information in the
Registration Statement;
provided, however, that clauses (i) and (ii) do not apply if the
information required to be included in a post-effective amendment by those
clauses is contained in periodic reports filed by the Registrant pursuant to
Section 13 or Section 15(d) of the Exchange Act that are incorporated by
reference in the Registration Statement.
(b) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(c) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
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The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act that is incorporated by reference in this Registration Statement
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of
Registrant pursuant to the foregoing provisions, or otherwise, Registrant has
been advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by Registrant of expenses
incurred or paid by a director, officer or controlling person of Registrant in
the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, Registrant will, unless in the opinion of its counsel the matter has
been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
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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 Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the Village of Lincolnshire, State of Illinois, on this 1st day
of February, 2000.
FORTUNE BRANDS, INC.
By /s/ Mark A. Roche
-------------------------------------
(Mark A. Roche, Senior Vice President
Secretary and General Counsel)
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated on this 1st day of February, 2000.
Signature Title
--------- -----
Norman H. Wesley * Chairman of the Board and Chief
- ------------------------------- Executive Officer(principal
(Norman H. Wesley) executive officer) and Director
/s/ Craig P. Omtvedt Senior Vice President and Chief
- ------------------------------- Financial Officer
(Craig P. Omtvedt) (principal financial officer)
/s/ Michael R. Mathieson
- ------------------------------- Vice President and Chief Accounting
(Michael R. Mathieson) Officer
(principal accounting officer)
Eugene R. Anderson *
- ------------------------------- Director
(Eugene R. Anderson)
Patricia O. Ewers *
- ------------------------------- Director
(Patricia O. Ewers)
Thomas C. Hays *
- ------------------------------- Director
(Thomas C. Hays)
John W. Johnstone, Jr. *
- ------------------------------- Director
(John W. Johnstone, Jr.)
II-10
<PAGE>
Signature Title
--------- -----
Sidney J. Kirschner *
- ------------------------------- Director
(Sidney J. Kirschner)
Gordon R. Lohman *
- ------------------------------- Director
(Gordon R. Lohman)
Charles H. Pistor, Jr *
- ------------------------------- Director
(Charles H. Pistor, Jr)
Eugene A. Renna *
- ------------------------------- Director
(Eugene A. Renna)
Anne M. Tatlock *
- ------------------------------- Director
(Anne M. Tatlock)
Peter M. Wilson *
- ------------------------------- Director
(Peter M. Wilson)
*By: /s/ A. Robert Colby
----------------------------------------
(A. Robert Colby, Attorney-in-Fact)
II-11
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, the
Plan has duly caused this Registration Statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the Village of Lincolnshire,
State of Illinois, on this 1st day of February, 2000.
FORTUNE BRAND RETIREMENT
SAVINGS PLAN
By Anne C. Linsdau *
----------------------------------------
(Anne C. Linsdau, Corporate Employee
Benefits Committee)
*By: /s/ A. Robert Colby
---------------------------------------
(A. Robert Colby, Attorney-in-Fact)
II-12
Exhibit 15a1
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Fortune Brands, Inc.
Registration Statement on Form S-8
Ladies and Gentlemen:
We are aware that (a) our report dated May 13, 1999 on our review of
the interim financial information of Fortune Brands, Inc. and Subsidiaries for
the three-month periods ended March 31, 1999 and 1998 and included in the
Company's Quarterly Report on Form 10-Q for the quarterly period ended March 31,
1999, (b) our report dated August 16, 1999 on our review of interim financial
information of Fortune Brands, Inc. and Subsidiaries for the three-month and
six-month periods ended June 30, 1999 and 1998 and included in the Company's
Quarterly Report on Form 10-Q for the quarterly period ended June 30, 1999 and
(c) our report dated November 12, 1999 on our review of interim financial
information of Fortune Brands, Inc. and Subsidiaries for the three-month and
nine-month periods ended September 30, 1999 and 1998 and included in the
Company's Quarterly Report on Form 10-Q for the quarterly period ended September
30, 1999 are being incorporated by reference in this Registration Statement on
Form S-8 of Fortune Brands, Inc., and the prospectus related thereto, relating
to securities to be offered under the Fortune Brands Retirement Savings Plan.
Pursuant to Rule 436(c) under the Securities Act of 1933, such reports should
not be considered a part of such Registration Statement or prospectus prepared
or certified by us within the meaning of Sections 7 or 11 of that Act.
Very truly yours,
PRICEWATERHOUSECOOPERS LLP
New York, New York
February 1, 2000
Exhibit 23a1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this
Registration Statement on Form S-8 (this "Registration Statement") of Fortune
Brands, Inc. ("Registrant"), and the prospectus related hereto, of our report
dated February 3, 1999 relating to the consolidated financial statements,
appearing in the 1998 Annual Report to Stockholders of Registrant, which is
incorporated by reference in Registrant's Annual Report on Form 10-K for the
year ended December 31, 1998. We also consent to the incorporation by reference
of our report dated February 3, 1999 and relating to the financial statement
schedule, which appears in such Annual Report on Form 10-K.
PricewaterhouseCoopers LLP
New York, New York
February 1, 2000
Exhibit 24a1
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 MARK A. ROCHE, 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. 1999 Long-Term Incentive Plan, (b) the Registration
Statement on Form S-8 of the Fortune Brands Retirement Savings Plan, (c) the
Registration Statement on Form S-8 of the Fortune Brands Hourly Employee
Retirement Savings Plan, (d) Post-Effective Amendment No. 1 to the Registration
Statement on Form S-8 (Registration No. 333-51173) of the Fortune Brands, Inc.
Non-Employee Director Stock Option Plan and (e) any and all amendments and
supplements thereto:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Signature Title Date
/s/ Norman H. Wesley Chairman of the Board and January 20, 2000
- --------------------------------------------- Chief Executive Officer
Norman H. Wesley (principal executive officer) and
Director
/s/ Craig P. Omtvedt Senior Vice President and Chief January 24, 2000
- --------------------------------------------- Financial Officer
Craig P. Omtvedt (principal financial officer)
/s/ Michael R. Mathieson Vice President and Chief January 21, 2000
- -------------------------------------------- Accounting Officer
Michael R. Mathieson (principal accounting officer)
/s/ Eugene R. Anderson
- -------------------------------------------- Director January 25, 2000
Eugene R. Anderson
/s/ Patricia O. Ewers
- -------------------------------------------- Director January 25, 2000
Patricia O. Ewers
/s/ Thomas C. Hays
- -------------------------------------------- Director January 24, 2000
Thomas C. Hays
/s/ John W. Johnstone, Jr.
- -------------------------------------------- Director January 21, 2000
John W. Johnstone, Jr.
/s/ Sidney J. Kirschner
- -------------------------------------------- Director January 24, 2000
Sidney J. Kirschner
/s/ Gordon R. Lohman
- -------------------------------------------- Director January 24, 2000
Gordon R. Lohman
/s/ Charles H. Pistor, Jr.
- -------------------------------------------- Director January 25, 2000
Charles H. Pistor, Jr.
/s/ Eugene A. Renna
- -------------------------------------------- Director January 24, 2000
Eugene A. Renna
/s/ Anne M. Tatlock
- -------------------------------------------- Director January 25, 2000
Anne M. Tatlock
/s/ Peter M. Wilson
- -------------------------------------------- Director January 24, 2000
Peter M. Wilson
</TABLE>
Exhibit 24b1
POWER OF ATTORNEY
The undersigned, acting in the capacity stated with her name below,
hereby constitutes and appoints MARK A. ROCHE, 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 capacity indicated below (a) the Registration Statement on
Form S-8 of the Fortune Brands Retirement Savings Plan and (b) any and all
amendments and supplements thereto.
Signature Title Date
/s/ Anne C. Linsdau
- ----------------------- Chairman, Corporate Employee January 21, 2000
Anne C. Linsdau Benefits Committee
Exhibit 99a1
FORTUNE BRANDS RETIREMENT SAVINGS PLAN
(Amended and Restated
Effective as of October 1, 1999)
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
TABLE OF CONTENTS
Page
ARTICLE I. DEFINITIONS............................................................................1
ARTICLE II. ELIGIBILITY AND PARTICIPATION.........................................................12
2.01. Eligibility........................................................................12
2.02. Transfers From Non-Participating Employers.........................................13
2.03. Reemployment.......................................................................13
ARTICLE III. PROFIT-SHARING CONTRIBUTIONS.........................................................13
3.01. Profit-Sharing Contributions of Fortune............................................13
3.02. Profit-Sharing Contributions of ACCO Participating Employers.......................16
3.03. Profit-Sharing Contributions of Beam Participating Employers.......................18
3.04. Reduction of Profit-Sharing Contributions..........................................20
3.05. Cash or Property...................................................................20
3.06. Source.............................................................................21
3.07. Irrevocability.....................................................................21
ARTICLE IV. 401(k) SAVINGS CONTRIBUTIONS..........................................................21
4.01. Tax Deferred Contributions and After-Tax Contributions.............................21
4.02. Company Matching Contributions.....................................................24
4.03. Rollover Contributions.............................................................25
4.04. Limitation on Annual Amount of Tax Deferred Contributions..........................26
4.05. Actual Deferral Percentage Tests...................................................28
4.06. Actual Contribution Percentage Tests...............................................30
4.07. Alternate Percentage Test..........................................................31
4.08. Special Company Contributions......................................................32
4.09. Uniformed Service Absence..........................................................33
ARTICLE V. INVESTMENT PROVISIONS..................................................................33
5.01. Investment Funds...................................................................33
5.02. Investment Fund Elections..........................................................34
5.03. Administration of Fortune Stock Fund...............................................36
5.04. Investment of Value Equity Fund....................................................37
5.05. Investment of Large-Cap Growth Equity Fund.........................................37
5.06. Investment of Small-Cap Growth Equity Fund.........................................37
5.07. Investment of International Equity Fund............................................38
5.08. Investment of S&P 500 Index Fund...................................................38
5.09. Investment of Growth-Oriented Diversified Fund.....................................38
5.10. Investment of Balanced Fund........................................................38
5.11. Investment of Corporate/Government Bond Fund.......................................38
5.12. Investment of Government Securities Fund...........................................39
5.13. Investment of Short-Term Investment Fund...........................................39
5.14. Voting of Shares in Fortune Stock Fund.............................................39
5.15. Tendering of Shares in Fortune Stock Fund..........................................42
5.16. Certain Rights Held in Fortune Stock Fund..........................................45
5.17. Valuation of Investment Funds......................................................46
5.18. Administration of the Gallaher Fund................................................46
5.19. Voting of Shares in Gallaher Fund..................................................47
5.20. Tendering of Gallaher ADRs.........................................................49
5.21. Voting of Shares in Mutual Funds...................................................52
5.22. Unitized Fortune Stock Fund and Gallaher Fund......................................53
ARTICLE VI. ACCOUNTS..............................................................................54
6.01. Participants' Accounts.............................................................54
6.02. Allocation of Earnings and Losses to Accounts......................................56
6.03. Allocation of Contributions to Accounts............................................56
6.04. Annual Additions Limitation........................................................56
6.05. Combined Maximum Limitations.......................................................58
6.06. Definition of Compensation for Purposes of Sections 6.04 and 6.05..................60
6.07. Limitation of Annual Unadjusted Earnings or Compensation...........................60
ARTICLE VII. VESTING AND FORFEITURES..............................................................60
7.01. Participant Contributions..........................................................60
7.02. Employer Contributions.............................................................60
7.03. Vesting in Prior Plan..............................................................62
7.04. Amendments to Vesting Schedule.....................................................62
7.05. Forfeitures........................................................................62
7.06. Reinstatement of Account Balances..................................................63
ARTICLE VIII. PAYMENTS............................................................................63
8.01. Form of Payment....................................................................63
8.02. Time of Payment....................................................................65
8.03. Payment of Kensington Money Purchase Account Balances..............................67
8.04. Certain Retroactive Payments.......................................................72
8.05. Designation of Beneficiary.........................................................72
8.06. Payment in Event of Legal Disability...............................................74
8.07. Missing Distributees...............................................................74
8.08. Information Required of Distributees...............................................74
8.09. Direct Rollover Provision..........................................................74
8.10. Waiver of 30-Day Notice Period.....................................................75
ARTICLE IX. IN-SERVICE WITHDRAWALS................................................................76
9.01. Hardship Withdrawals...............................................................76
9.02. Withdrawals Upon Attainment of Age 59-1/2..........................................78
9.03. Withdrawals From Grandfathered Withdrawal Accounts and Grandfathered
After-Tax Accounts.................................................................79
9.04. In-Service Withdrawals for Inactive Participants...................................79
ARTICLE X. LOANS..................................................................................80
10.01. Availability......................................................................80
10.02. Effect on Account Balances and Investment Funds...................................80
10.03. Amount............................................................................81
10.04. Term of Loan......................................................................81
10.05. Promissory Note...................................................................81
10.06. Repayment.........................................................................81
10.07. Reduction of Account Balance......................................................82
ARTICLE XI. ADMINISTRATION OF PLAN................................................................82
11.01. Fiduciaries.......................................................................82
11.02. Corporate Employee Benefits Committee.............................................83
11.03. Organization of Committee.........................................................83
11.04. Action by Committee...............................................................83
11.05. Disqualification of Committee Members.............................................84
11.06. Committee Rules; Conclusiveness of Determinations.................................84
11.07. Committee Powers and Duties.......................................................84
11.08. Reports...........................................................................85
11.09. Claims Procedure..................................................................85
11.10. Data Concerning Participants......................................................86
11.11. Certification of Data.............................................................86
11.12. Indemnity of Board of Directors and Committee Members.............................86
11.13. Indemnity for Acts of Investment Managers.........................................87
11.14. Non-Discriminatory Action.........................................................87
11.15. Plan Expenses.....................................................................87
ARTICLE XII. MANAGEMENT OF TRUSTS.................................................................87
12.01. Funds in Trusts...................................................................87
12.02. Trustee and Trust Agreement.......................................................88
12.03. Investment Managers...............................................................88
12.04. Conclusiveness of Reports.........................................................88
ARTICLE XIII. AMENDMENT AND TERMINATION...........................................................88
13.01. Reserved Powers...................................................................88
13.02. Plan Termination..................................................................89
13.03. Plan Merger.......................................................................90
13.04. Successor Employer................................................................90
ARTICLE XIV. MISCELLANEOUS........................................................................90
14.01. Non-Alienation of Benefits........................................................90
14.02. Action by Participating Employers.................................................91
14.03. Exclusive Benefit.................................................................91
14.04. Gender and Number.................................................................91
14.05. Right to Discharge................................................................92
14.06. Absence of Guaranty...............................................................92
14.07. Headings..........................................................................92
14.08. Governing Law.....................................................................92
ARTICLE XV. TOP-HEAVY RULES.......................................................................92
15.01. Top-Heavy Determination...........................................................92
15.02. Minimum Vesting...................................................................95
15.03. Minimum Contributions.............................................................95
15.04. Special Annual Additions Limitation...............................................96
15.05. Provisions Applicable if Plan Ceases To Be Top-Heavy..............................96
EXHIBIT A TRANSITIONAL PROVISIONS.......................................................A-1
A.1 Transitional Provision for Employees of Advanced
Gravis Technology Ltd...........................................................A-1
A.2 Transitional Provision for Employees of May Tag
& Label Corp....................................................................A-1
A.3 Transitional Provision for Salaried Employees of
Schrock Cabinet Company.........................................................A-1
A.4 Transitional Provision for Employees of Peak Wines
International, Inc..............................................................A-1
A.5 Transitional Provision for Employees of Creative
Specialties, Inc................................................................A-2
</TABLE>
<PAGE>
FORTUNE BRANDS RETIREMENT SAVINGS PLAN
The Defined Contribution Plan of Fortune Brands, Inc. and
Participating Operating Companies was established effective as of January 1,
1996, as an amendment, restatement and continuation 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 (each a "Prior
Plan"). Effective as of October 1, 1999, the Plan is hereby amended and restated
in its entirety and renamed the Fortune Brands Retirement Savings Plan.
ARTICLE I
DEFINITIONS
1.01. The following words and phrases have the respective
meanings stated below unless a different meaning is plainly required by the
context:
(a) "ACCO Participating Employer" means ACCO World
Corporation, ACCO Brands, Inc., Day-Timers, Inc., Fortune Brands Home & Office,
Inc., May Tag & Label Corp., and any other Related Employer that is a direct or
indirect subsidiary of ACCO World Corporation and which, with the approval of
the board of directors of ACCO World Corporation, adopts 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.
(b) "Account(s)" means the Profit-Sharing Account, Cash Option
Account, Tax Deferred Account, Company Matching Account, Rollover Account,
After-Tax Account, Grandfathered Withdrawal Account, Grandfathered After-Tax
Account and Kensington Money Purchase Account so designated and provided for in
Section 6.01.
(c) "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. Any Account Balances held in the Fortune
Stock Fund or Gallaher Fund are represented by units standing to the credit of
Account Balances in such funds.
(d) "Acushnet Participating Employer" means Acushnet Company,
and any other Related Employer that is a direct or indirect subsidiary of
Acushnet Company and which, with the approval of the board of directors of
Acushnet Company, adopts 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.
(e) "ADRs" means American Depositary Receipts.
(f) "After-Tax Account" means any one of the accounts so
designated and provided for in Section 6.01.
(g) "After-Tax Contributions" means any contributions made by
a Participating Employer that are attributable to the reduction in compensation
on an after-tax basis that a Participant elects from such Participating Employer
each Plan Year as described in Section 4.01.
(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) "Approved Form of Election" means a request or an election
made through the voice response system, Internet, intranet or other electronic
media approved by the Committee or on a written election form filed with the
Participating Employer on a form approved by the Committee. Notwithstanding the
foregoing, no request or election will be deemed to have been made until all
required documentation, information, signatures, consents, notarizations and
attestations required for such request or election are provided to the Committee
or its designee.
(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 will 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 Participating Employer" means Jim Beam Brands
Worldwide, Inc., Jim Beam Brands Co. and any other Related Employer that is a
direct or indirect subsidiary of Jim Beam Brands Worldwide, Inc., and which,
with the approval of the board of directors of Jim Beam Brands Worldwide, Inc.,
adopts 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.
(l) "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.
(m) "Board of Directors" means the Board of Directors of
Fortune.
(n) "Business Day" means any day on which the New York Stock
Exchange is open.
(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 Section 3.02(e), but which
the Participant does not elect to receive in cash.
(q) "Close of Business" means the normal closing time of the
New York Stock Exchange or such other time as is designated by the Committee.
(r) "Code" means the Internal Revenue Code of 1986, as amended
from time to time.
(s) "Committee" means the Corporate Employee Benefits
Committee provided for in Article XI.
(t) "Company Matching Account" means any one of the accounts
so designated and provided for in Section 6.01.
(u) "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.
(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 will be required.
(x) "Effective Date" means January 1, 1996.
(y) "Employee" means any person employed by a Participating
Employer on a salaried, hourly paid or commission basis, excluding any
independent contractor and any person employed in the ACCO Presentation Products
Group of ACCO Brands, Inc. who had been formerly employed by Apollo Space
Systems, Inc.; provided that with respect to persons employed by a MasterBrand
Participating Employer, employee means any 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.
(z) "Entry Date" means the first day of any calendar month.
(aa) "ERISA" means the Employee Retirement Income Security
Act of 1974, as amended from time to time.
(bb) "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.
(cc) "Fiduciaries" means Fortune, each other Participating
Employer, the Board of Directors and the board of directors of each other
Participating Employer, the Committee, the Trusts Investment Committee and the
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 5.16(a)) as provided in Section 5.15 or 5.16.
(dd) "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.
(ee) "Fortune" means Fortune Brands, Inc., a Delaware
corporation, its successors and assigns.
(ff) "Fortune Common Stock" means the common stock of
Fortune as now constituted and any other common stock into which it may be
reclassified.
(gg) "Fortune Stock Fund" means the portion of the Trust
Fund so designated and provided for in Section 5.01.
(hh) "Gallaher" means Gallaher Group Plc, a public limited
company incorporated under the laws of England and Wales.
(ii) "Gallaher Fund" means the portion of the Trust Fund so
designated and provided for in Section 5.01.
(jj) "Gallaher Spin-Off" means the distribution of Gallaher
ADRs by Fortune to its stockholders.
(kk) "Grandfathered After-Tax Account" means any one of the
accounts so designated and provided for in Section 6.01.
(ll) "Grandfathered Withdrawal Account" means any one of the
accounts so designated and provided for in Section 6.01.
(mm) "Highly Compensated Employee" means for a Plan Year any
employee who:
(1) was at any time during the Plan Year or preceding Plan
Year a 5% owner (within the meaning of Code Section 416(i)(1)) of any
Related Employer; or
(2) received compensation for the preceding Plan Year from
any Related Employer in excess of $80,000.
The $80,000 amount will be adjusted at the same time and in the same manner as
under Code Section 415(d), except that the base period is the calendar quarter
ended September 30, 1996.
A former Employee will be treated as a Highly Compensated
Employee if such Employee was a Highly Compensated Employee when such Employee
incurred Severance From Service or if such Employee was a Highly Compensated
Employee at any time after attaining age 55.
(nn) "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 will 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 501
Hours of Service will 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 will 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 will not be
credited under paragraph (1) or paragraph (2) and under this paragraph
(3). These hours will be credited to the computation period or periods
to which the award or agreement pertains rather than the computation
period in which the award, agreement or payment is made.
(oo) "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, Balanced Fund, Corporate/Government Bond Fund, Government
Securities Fund, Short-Term Investment Fund and Loan Fund held under the Trust
Fund as designated pursuant to Section 5.01.
(pp) "Investment Manager" means one or more investment
counsel appointed as provided in Section 12.04.
(qq) "Kensington Money Purchase Account" means any of the
accounts so designated and provided for in Section 6.01.
(rr) "Leased Employee" means any person who is not a
Participant and who provides services to a Participating Employer pursuant to an
agreement between the Participating Employer and any other person (leasing
organization) and has performed such services on a substantially full-time basis
for at least a year primarily under the direction or control of the
Participating Employer. A Leased Employee will be deemed an Employee for
purposes of crediting Vesting Service and Years of Eligibility Service, but will
not be eligible for benefits under the Plan unless he otherwise satisfies the
criteria for eligibility under Section 2.01 as an Employee.
(ss) "Loan Fund" means the portion of the Trust Fund so
designated and provided for in Section 5.01.
(tt) "MasterBrand Participating Employer" means MasterBrand
Industries, Inc., MasterBrand Cabinets, Inc., Creative Specialties, Inc., Master
Lock Company, Moen Incorporated and Waterloo Industries, Inc. and any other
Related Employer that is a direct or indirect subsidiary of MasterBrand
Industries, Inc. and which, with the approval of the board of directors of
MasterBrand Industries, Inc., adopts 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.
(uu) "Non-Participating Employer" means any Related Employer
which is not a Participating Employer.
(vv) "Normal Retirement Age" means age 65.
(ww) "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.
(xx) "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.
(yy) "Plan" means the Fortune Brands Retirement Savings
Plan.
(zz) "Plan Administrator" means Fortune.
(aaa) "Plan Year" means the calendar year.
(bbb) "Prior Plan" means, where applicable, the (1)
Profit-Sharing Plan of Fortune Brands, Inc., (2) ACCO World Corporation
Profit-Sharing Plan, (3) Acushnet Company Employee Savings Plan, (4) Day-Timers,
Inc. Profit-Sharing and Employee Savings Plan, (5) Jim Beam Brands Co.
Profit-Sharing and 401(k) Savings Plan and (6) MasterBrand Industries, Inc.
Employee Savings Plan, as in existence on December 31, 1995 and any of their
respective predecessor plans. "Prior Plan" also includes the May Tag & Label
Corp. 401(k) Savings Plan and the CSI Donner 401(k) Retirement Plan.
(ccc) "Profit-Sharing Account" means any one of the accounts
so designated and provided for in Section 6.01.
(ddd) "Profit-Sharing Contributions" means the contributions
made by a Participating Employer as provided in Article III.
(eee) "Qualified Domestic Relations Order" means any
"domestic relations order" (as defined in Code Section 414(p)) 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 Code Section 414(p), as determined by the Committee.
(fff) "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 Code Section 414(b) (as modified
for purposes of Sections 6.04 and 6.05 of this Plan by Code Section 415(h)), or
which is a trade or business under common control with Fortune, as provided in
Code Section 414(c) (as modified, for purposes of Sections 6.04 and 6.05, by
Code Section 415(h)), or which constitutes a member of an affiliated service
group within which Fortune is also included, as provided in Code Section 414(m),
or which is required to be aggregated with Fortune pursuant to regulations
issued under Code Section 414(o).
(ggg) "Restatement Date" means October 1, 1999.
(hhh) "Retirement" means retirement under a retirement plan
of a Participating Employer or Non-Participating Employer.
(iii) "Rollover Account" means any of the accounts so
designated and provided for in Section 6.01(e).
(jjj) "Rollover Contributions" means amounts attributable to
part or all of an "eligible rollover distribution" (within the meaning of Code
Section 402(c)(4) 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.
(kkk) "Severance From Service" means the earlier of the
following dates:
(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 will 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 will 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 will 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 will not be considered a Severance From
Service.
(lll) "Tax Deferred Account" means any one of the accounts so
designated and provided for in Section 6.01.
(mmm) "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
Participating Employer each Plan Year as described in Section 4.01.
(nnn) "Termination of Employment Without Fault" means any
involuntary separation of a Participant by a Participating Employer or
Non-Participating Employer other 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 will be immediately fully vested in his Account
Balances solely as a result of Termination of Employment Without Fault.
(ooo) "Trust Agreement" and "Trust" mean, respectively, the
Fortune Brands, Inc. Savings Plans Master Trust Agreement, as it may be amended
from time to time, and the trust established thereunder.
(ppp) "Trustee" means the trustee from time to time acting
under the Trust Agreement, including any successor trustee.
(qqq) "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.
(rrr) "Trusts Investment Committee" means the Trusts
Investment Committee of Fortune.
(sss) "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. Vesting Service means service as an
Employee with a Participating Employer or any Related Employer, determined as
follows:
(1) Vesting Service will 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 12 months of
employment constituting a full year of Vesting Service, and each 30
days of employment completed in excess of full years of Vesting Service
counted as 1/12th of a year of Vesting Service.
(2) Subject to paragraph (3) below, each Employee will 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 of the Plan to the
contrary, if a Participant incurs a Severance From Service and is
subsequently reemployed by a Participating Employer or a Related
Employer, his Vesting Service will be reinstated, as follows:
(A) if the Employee is reemployed within 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 will be reinstated upon his reemployment,
and he will 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 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
absent from active employment will be reinstated upon his
reemployment, but he will 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 will not be less than as determined under the
provisions of the applicable Prior Plan.
(ttt) "Year of Eligibility Service" means any consecutive
12-month period of employment, as herein set forth, during which an Employee
completes 1,000 or more Hours of Service. The first consecutive 12-month period
to be taken into account for this purpose will be the consecutive 12-month
period commencing with the Employee's Date of Employment or the Employee's date
of reemployment. The second consecutive 12-month period to be taken into account
for this purpose will 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 12-month periods to be taken into account for this purpose will
correspond with Plan Years.
ARTICLE II
ELIGIBILITY AND PARTICIPATION
2.01. Eligibility.
(a) Participation Prior to Restatement Date. Each Employee
who was a Participant on the day prior to the Restatement Date will continue to
be a Participant 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 on the day prior to the Restatement Date will
become a Participant for purposes of Article III on the day he
completes one 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 on the day prior to the Restatement Date will become
a Participant for purposes of Article III on the first Entry Date
coincident with or next succeeding the date on which he completes one
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 on the day prior to the Restatement Date will be eligible to have
Tax Deferred Contributions made on his behalf in accordance with Article IV on
the earlier of (1) the date he is employed in a position where he is regularly
scheduled to work at least 20 hours per week (provided such date is on or after
October 1, 1999), and (2) the first Entry Date coincident with or next
succeeding the date on which he completes at least one Year of Eligibility
Service, in each case provided he is an Employee on that date. Notwithstanding
the foregoing, each Employee of Day-Timers, Inc. who is classified as a
part-time flexible employee or as a part-time or full-time temporary or seasonal
employee will be eligible to have Tax Deferred Contributions made on his behalf
in accordance with Article IV only on completion of one Year of Eligibility
Service, provided he is an Employee on that date.
(d) Collective Bargaining Employees. An Employee covered under
a collective bargaining agreement will not become a Participant unless the
collective bargaining agreement provides for coverage under the Plan. Each
person who ceases to be covered under a collective bargaining agreement but
continues as an Employee of Fortune, a Beam Participating Employer or an ACCO
Participating Employer will become a Participant in the Plan for purposes of
Article III on the later of (1) the applicable date determined in Section
2.01(b), and (2) the date he ceases to be covered under a collective bargaining
agreement, in each case provided he is an Employee on that date. Each person who
ceases to be covered under a collective bargaining agreement but continues as an
Employee will become a Participant in the Plan for purposes of Article IV on the
later of (1) the date determined in Section 2.01(c) above, and (2) the date he
ceases to be covered under a collective bargaining agreement, in each case
provided he is an Employee on that date.
2.02. Transfers From Non-Participating Employers. Each person
who becomes an Employee of Fortune, a Beam Participating Employer or an ACCO
Participating Employer upon transfer from a Non-Participating Employer will
become a Participant for purposes of Article III on the later of (1) the
applicable date determined in Section 2.01(b) above, and (2) the date of his
transfer, in each case provided he is an Employee on that date. Each person who
becomes an Employee of a Participating Employer upon transfer from a
Non-Participating Employer will become a Participant in the Plan for purposes of
Article IV on the later of (1) the date determined in Section 2.01(c) above, and
(2) the date of his transfer, in each case provided he is an Employee on that
date.
2.03. Reemployment. Any Participant who terminates
employment and is subsequently reemployed as an Employee will become a
Participant upon his reemployment.
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 will contribute under the
Plan an amount equal to 1/6th of 1% of Adjusted Income From Continuing
Operations for each Plan Year. Notwithstanding the foregoing, no Profit-Sharing
Contribution will be made pursuant to this Section 3.01(a) for any Plan Year in
which a cash dividend has not been paid on Fortune Common Stock. The total
amount of any Profit-Sharing Contribution and Company Matching Contributions by
Fortune for any Plan Year will not exceed 3/8ths of 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 will be
certified by the independent public accountants who have audited the books of
Fortune for such year and will 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 will 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 will be allocated to the
Profit-Sharing Accounts of its eligible Participants in the same proportion as
the Adjusted Earnings for each such Participant bear 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 will 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 will 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
will not exceed the lesser of:
(1) the Base Contribution Percentage multiplied by two; or
(2) the Base Contribution Percentage plus the greater of 5.7%
or such higher percentage equal to the portion of the rate of tax under
Code Section 3111(a) attributable to old-age insurance.
For purposes of this Section 3.01(f), the "Base Contribution Percentage" means
the percentage of the Participant's compensation allocated under the Plan on the
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"
means the percentage of the Participant's compensation allocated under the Plan
on the portion of the Participant's compensation in excess of the Social
Security taxable wage base for such Plan Year. The amount of any such reduction
will 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. Any such reapportionment will
apply only to Participants employed by Fortune.
(g) Definitions. For purposes of this Section 3.01 and, where
applicable, Section 3.04, the following terms 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 1.5 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
Fortune's annual report to its stockholders for such year, 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 item
(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
$150,000 (adjusted for increases in the cost of living pursuant to
rulings 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 Code Section 125, and all compensation
under the Management Incentive Plan, the Fortune Brands, Inc. Annual
Executive Incentive Compensation Plan and the Performance Recognition
Program 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 such Management Incentive Plan, the Fortune Brands,
Inc. Annual Executive Compensation Plan and Performance Recognition
Program 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 will 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 will 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 will be credited with 2/3rds of the Profit-Sharing
Contribution so allocable. The remaining 1/3rd will be 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 will
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 will 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, (2) he is transferred to a Related Employer which is not
an ACCO Participating Employer, or (3) 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 or the relocation of the ACCO Punch Cell operation in
Wheeling, Illinois or the May Tag & Label Corp. facility in Hillside, New
Jersey, in each case even if he is not employed on the last day of such Plan
Year.
(d) Definitions. For purposes of this Section 3.02 and, where
applicable, Section 3.04, "Compensation" of a Participant who is an Employee of
an ACCO Participating Employer means (1) for 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, (2) for a Participant paid on an hourly basis,
the straight time rate paid for such Participant by an ACCO Participating
Employer to a maximum of 2,080 hours for Vesting Service as a Participant during
the Plan Year, and (3) for a Participant employed as a sales representative, the
total base salary and 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 Code Section 125, and excluding the 1/3rd 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 will be limited
to $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 and who is entitled to an allocation of a Profit-Sharing
Contribution for a Plan Year in accordance with Section 3.02(c) may elect to
have a part, not in excess of 1/3rd, 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. Such election (which
will have continuing effect) must be made through an Approved Form of Election
and will be irrevocable by December 31 of such Plan Year. Any such amount which
the Participant does not elect to have distributed to him will be allocated to
his Cash Option Account. Notwithstanding the foregoing, a Cash Option
Contribution will be distributed in cash if necessary to satisfy the
requirements of Section 4.05 or Section 9.01(g).
3.03. Profit-Sharing Contributions of Beam Participating
Employers.
(a) Amount. The amount of Profit-Sharing Contribution, if any,
for a Plan Year will be determined by the board of directors or other governing
body of each Beam Participating Employer, in its sole discretion, on or before
the date (including extensions) for filing the Federal income tax return of the
Beam Participating Employer for the taxable year for which the Profit-Sharing
Contribution is made. A Beam 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 a Beam Participating Employer pursuant to this Section 3.03 will 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 such Plan Year.
(c) Eligibility for Allocation. For purposes of this Section
3.03, each Participant who is an Employee of a Beam Participating Employer will
be entitled to an allocation of any Profit-Sharing Contribution of the Beam
Participating Employers for a Plan Year only if (1) he completed at least 1,000
Hours of Service in such Plan Year, or (2) his employment terminated due to
Retirement, Disability, Termination of Employment Without Fault or death in such
Plan Year. Each Participant who is an Employee of a Beam Participating Employer
will 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(c). The five employees
listed on Schedule 6.13 to the Asset Purchase Agreement dated July 22, 1998 by
and between GPW Acquisition, Inc. and Geyser Peak Partners will not be entitled
to an allocation of the Profit-Sharing Contribution of the Beam Participating
Employers for Plan Years 1998, 1999 and 2000.
(d) 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 will not exceed the lesser of:
(1) the Base Contribution Percentage multiplied by two; or
(2) the Base Contribution Percentage plus the greater of 5.7%
or such higher percentage equal to the portion of the rate of tax under
Code Section 3111(a) attributable to old-age insurance.
For purposes of this Section 3.03(d), the "Base Contribution Percentage" means
the percentage of the Participant's compensation allocated under the Plan on the
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"
means the percentage of the Participant's compensation allocated under the Plan
on the portion of the Participant's compensation in excess of the Social
Security taxable wage base for such Plan Year. The amount of any such reduction
will 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. Any
such reapportionment will apply only to Participants employed by the same Beam
Participating Employer as the Participant that suffered the reduction.
(e) Definitions. For purposes of this Section 3.03 and, where
applicable, Section 3.04, the following terms 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 1.5 times such Unadjusted Earnings in excess
of the Social Security taxable wage base in effect for such Plan Year.
(2) "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 $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 Code Section 125 and compensation
under the Jim Beam Brands 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
Jim Beam Brands 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 each
Participating Employer's shares of such contributions otherwise payable pursuant
to this Article III will be subject to the following reductions.
(a) Reduction for Forfeitures. Profit-Sharing Contributions
will be reduced by the total amounts forfeited by Plan Participants during such
Plan Year pursuant to Section 7.05 minus the amounts required to be reinstated
pursuant to Section 7.06.
(b) Reduction for Excess Annual Additions. Profit-Sharing
Contributions will 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 will be further 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 $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 Employer's Profit-Sharing Contribution for any Plan Year and the
aggregate of such share and its contributions under its retirement plan for such
year will in no event exceed the maximum amounts deductible from the
Participating Employer's income for such year under Code Sections 404(a)(3) and
(7) (or such other Federal income tax statutory provisions as will at the time
be applicable). If such share or such aggregate for any Participating Employer
would otherwise exceed either of the maximum deductible amounts, the
contributions under this Plan for such year will be reduced pro rata by the
amount necessary to reduce such share or such aggregate to the amount
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 may not make any contributions
under the Plan except as provided in Article IV.
3.07. Irrevocability. All Profit-Sharing Contributions made
under the Plan will be irrevocable and will 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.
ARTICLE IV
401(k) SAVINGS CONTRIBUTIONS
4.01. Tax Deferred Contributions and After-Tax Contributions.
(a) Rate of Tax Deferred Contributions and After-Tax
Contributions. Each Participant may enter into a salary reduction agreement with
his Participating Employer which will apply to all Compensation received
thereafter. The salary reduction agreement will provide that the Participant
agrees to a reduction in salary from the Participating Employer on a pre-tax
basis by an amount equal to an integral percentage of up to 21% of his
Compensation. The Participating Employer will make a Tax Deferred Contribution
to the Plan on behalf of such Participant, corresponding to the amount of such
reduction. 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 21% of his Compensation,
minus the percentage he elected to contribute on a pre-tax basis. The
Participating Employer will make an After-Tax Contribution to the Plan on behalf
of such Participant, corresponding to the amount of such reduction.
Notwithstanding any other provision of this Plan to the contrary, no After-Tax
Contributions will 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 After-Tax Contributions will be paid at least monthly
to the Trustee by the Participating Employers. Any election pursuant to this
Section 4.01(a) must be made by an Approved Form of Election. Such election will
be effective on the first day of the first payroll period for which the
Participating Employer can process such election. For purposes of this Section
4.01, the definitions of "Compensation" in Section 4.01(d) apply.
(b) Automatic Enrollment. If an eligible Employee fails to
affirmatively enroll in the Plan or fails to affirmatively decline enrollment in
the Plan within 60 days from the date that the Employee is first eligible to
make Tax Deferred Contributions in accordance with Section 2.01(c), such
Employee will be deemed to have entered into a salary reduction agreement with
his Participating Employer to reduce his Compensation on a pre-tax basis by 3%.
The Participating Employer of the Employee will make a Tax Deferred Contribution
on behalf of such Employee, corresponding to the amount of such reduction. Such
deemed election will commence on the first day of the first pay period for which
the Employee's Participating Employer can process the deemed election, provided
such election will not take effect before the 60th day following the date the
Employee first becomes eligible to make Tax Deferred Contributions.
(c) Changes in Rate of Tax Deferred Contributions and
After-Tax Contributions. Each Participant may elect to change the rate of,
discontinue or resume his Tax Deferred Contributions or, if applicable,
After-Tax Contributions at any time by making an Approved Form of Election. Any
such election will be effective on the first day of the first payroll period for
which the Participating Employer can process such election. The Committee may
establish additional rules regarding the timing and frequency of a change in the
amount of Tax Deferred Contributions or After-Tax Contributions, provided such
policy is applied uniformly to all Participants of the Participating Employer.
(d) Definitions of Compensation. For purposes of Sections 4.01
and 4.02, the term "Compensation" means:
(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 Code Section
125, but excluding the 1/3rd of the Profit-Sharing Contributions
allocable to the Participant pursuant to Section 3.02;
(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 will
be determined as if the Participant had not entered into a salary
reduction agreement pursuant to this Section 4.01 or Code Section 125;
(4) for each Participant who is an Employee of a Beam
Participating Employer, his base pay plus overtime for the pay period;
and
(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 or amounts elected to be contributed under a program
established pursuant to Code Section 125 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, each Participant's Compensation will be limited
to $150,000 in each Plan Year (adjusted for increases in the cost of living
pursuant to rulings of the Secretary of the Treasury).
(e) Additional Limitations. Notwithstanding any other
provision of this Plan to the contrary, a Participating Employer may 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 will not exceed the limitations set forth in Sections
4.04, 4.05, 4.06, 4.07, Sections 6.04, 6.05 and 6.07 and Section 9.01(g) 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 will 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, After-Tax Contributions made on his behalf
during such year by such Participating Employer. The Company Matching
Contribution for each Participant employed by Fortune will be equal to 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 6% of his
Compensation. The Company Matching Contribution for each Participant employed by
a MasterBrand Participating Employer (other than Schrock Cabinet Division) will
be equal to 50% of the Participant's aggregate Tax Deferred Contributions and
After-Tax Contributions to the extent the rate of such aggregate Tax Deferred
Contributions and After-Tax Contributions in effect from time to time does not
exceed 6% of his Compensation. The Company Matching Contribution for each
Participant employed by the Schrock Cabinet Division of MasterBrand Cabinets,
Inc. will be equal to 50% of the Participant's Tax Deferred Contributions or
After-Tax Contributions to the extent the rate of such Tax Deferred
Contributions or After-Tax Contributions in effect from time to time does not
exceed 5% of his Compensation and an additional 50% of the Participant's Tax
Deferred Contributions or After-Tax Contributions to the extent the rate of such
Tax Deferred Contributions or After-Tax Contributions in effect from time to
time does not exceed 3% of his Compensation. Except as provided in Section
4.02(b), the Company Matching Contribution for each Participant employed by an
ACCO Participating Employer will be equal to 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 6% of his Compensation. The Company
Matching Contribution for each Participant employed by an Acushnet Participating
Employer will be equal to 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 5% of his Compensation and an additional 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 2% of his
Compensation. Notwithstanding any other provision of this Plan to the contrary,
no Company Matching Contributions will be made with respect to Tax Deferred
Contributions of any Participant employed by any Beam Participating Employer.
Company Matching Contributions will be paid at least monthly to the Trustee by
the Participating Employers. For purposes of this Section 4.02, the definitions
of "Compensation" in Section 4.01(d) apply.
(b) Rate of Company Matching Contributions for Former
Employees of Wilson Jones Company. The 30% referred to in Section 4.02(a) above
for Participants employed by an ACCO Participating Employer will be equal to 80%
for all persons who had been employees of Wilson Jones Company who:
(1) had attained age 50, but not age 55, on January 1, 1985,
and whose Compensation (plus any elective salary reduction amounts
under Code Section 401(k) or 125) was less than $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 will 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 will be entitled to an allocation of Company Matching Contributions
under this Section 4.02 if he made Tax Deferred Contributions or After-Tax
Contributions during the Plan Year.
(d) Additional Limitations. Notwithstanding the foregoing and
in addition to the limitations set forth in Sections 4.06 and 4.07, no Company
Matching Contributions will be made with respect to excess Tax Deferred
Contributions and After-Tax Contributions distributed pursuant to Sections 4.05,
4.06 or 4.07 and Company Matching Contributions made with respect to such excess
contributions will be returned to the Participating Employer pursuant to Section
14.03. No Company Matching Contributions will be made for Participants who are
Employees of Fortune for any Plan Year in which a cash dividend has not been
paid on Fortune Common Stock. The total amount of any Profit-Sharing
Contribution and Company Matching Contributions by Fortune for each Plan Year
will not exceed 3/8ths of 1% of Adjusted Income From Continuing Operations (as
defined in Section 3.01) for such Plan Year.
4.03. Rollover Contributions.
(a) Eligible Amounts. Regardless of whether an Employee has
become a Participant in the Plan, an Employee who is eligible to make Tax
Deferred Contributions to the Plan in accordance with Section 2.01(c) may 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 Code Section 401(a) which
constitutes an eligible rollover distribution within the meaning of
Code Section 402(c)(4), provided that (A) such amount is received by
the Trustee within 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 Code Section 408) which contains only those amounts described above
in paragraph (1) plus any earnings thereon, provided that such amount
is received by the Trustee within 60 days after the Employee's receipt
of such payment.
After-tax contributions may not be rolled over into this Plan. The Employee must
obtain the prior approval of his Participating Employer or its designee to make
a rollover contribution to this Plan. The Employee must furnish his
Participating Employer or its designee 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
Employer or its designee 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 may not be construed as a determination of
the Employee's tax consequences by either the Participating Employer, the
Trustee or their respective designees.
(b) Limitation on Assets Transferred. Except as otherwise
provided in this Plan, assets may 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 may not exceed $10,000, adjusted for each year to take into
account any cost of living increase provided for such year under Code Section
402(g). For purposes of this Section 4.04, the term "qualified plan" means any
tax qualified plan under Code Section 401(k), any simplified employee pension
cash or deferred arrangement as described in Code Section 402(h)(1)(B), any
eligible deferred compensation plan under Code Section 457, any plan described
in Code Section 501(c)(18) and any employer contributions made on behalf of the
Participant for the purchase of an annuity contract under Code Section 403(b)
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. The notice must be accompanied by the Participant's written
statement that if the excess is not distributed, the Tax Deferred Contributions
and, if 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 will
be paid to the Participant in a single payment no later than April 15 following
the close of the taxable year and will 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 will be returned
before Tax Deferred Contributions. Although the excess deferral may be refunded,
it will still be considered as an elective deferral for the Plan Year in which
it was originally made and will 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
will 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 will
be made for any period following such taxable year.
4.05. Actual Deferral Percentage Tests.
(a) Tests. The Actual Deferral Percentage for the Highly
Compensated Employees may not exceed for any Plan Year the greater of:
(1) the Actual Deferral Percentage for all other Employees,
multiplied by 1.25; or
(2) the Actual Deferral Percentage for all other Employees,
multiplied by two; 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 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
will be disregarded;
(2) if two or more plans which include cash or deferred
arrangements are considered one plan for purposes of Code Section
401(a)(4) or 410(b) (other than Code Section 410(b)(2)(A)(ii)), the
cash or deferred arrangements included in those plans will 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
Code Sections 401(a)(4) and 410(b) 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 will 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 will 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
(2) his Compensation for such Plan Year.
Fortune or its designee may change the method for calculating the Actual
Deferral Percentage by substituting the Actual Deferral Percentage of non-Highly
Compensated Employees from the prior Plan Year for that of the current Plan
Year, but only in accordance with Code Section 401(k)(3)(A) and IRS Notice 98-1
(or any superseding guidance).
(c) Return of Excess Contributions. Fortune or its designee
will 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 will be distributed to the Participant (together with any income
allocable thereto) within 12 months following the Plan Year for which the excess
Tax Deferred Contributions and, if applicable, Cash Option Contributions were
made.
These excess contributions and any income allocable thereto
will be allocated to the Highly Compensated Employees with the largest amounts
of Tax Deferred Contributions and, if applicable, Cash Option Contributions
taken into account in calculating the tests contained in Section 4.05(a) for the
Plan Year in which the excess arose, beginning with the Highly Compensated
Employee with the largest amount of such Tax Deferred Contributions and, if
applicable, Cash Option Contributions and continuing in descending order until
all excess contributions (and income) have been allocated. For purposes of the
preceding sentence, the "largest amount" will be determined after distribution
of any excess contributions (and income).
(d) Adjustment for Income or Losses. The excess Elective
Contributions for each Highly Compensated Employee will 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 will 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" has the meaning prescribed in Code Section 414(s).
4.06. Actual Contribution Percentage Tests.
(a) Tests. The Actual Contribution Percentage for the Highly
Compensated Employees may not exceed for any Plan Year the greater of:
(1) the Actual Contribution Percentage for all other
Employees, multiplied by 1.25; or
(2) the Actual Contribution Percentage for all other
Employees, multiplied by two; 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 After-Tax
Contributions made for them at any time during the Plan Year will be
disregarded;
(2) if two or more plans to which employee contributions and
matching contributions are made are considered one plan for purposes of
Code Section 401(a)(4) or 410(b) (other than Code Section
410(b)(2)(A)(ii)), all employee contributions and matching
contributions will 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
Code Sections 401(a)(4) and 410(b) 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 will be treated as one plan for purposes of determining the
Actual Contribution Percentage of that Highly Compensated Employee.
(b) Actual Contribution Percentage. The Actual Contribution
Percentage for a specified group of Employees for a Plan Year will be the
average of the ratios (calculated separately) for the Employees in such group
of:
(1) the amount of Company Matching Contributions and After-Tax
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.
Fortune or its designee may change the method for calculating
the Actual Contribution Percentage by substituting the Actual Contribution
Percentage of non-Highly Compensated Employees from the prior Plan Year for that
of the current Plan Year, but only in accordance with Code Section 401(m)(2)(A)
and IRS Notice 98-1 (or any superseding guidance).
(c) Return of Excess Contributions. Fortune or its designee
will 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 will be distributed to him (together with
any income allocable thereto) within 12 months following the Plan Year for which
the Excess Aggregate Contributions were made.
These Excess Aggregate Contributions and any income allocable
thereto will be allocated to the Highly Compensated Employees with the largest
amounts of Matching Contributions and After-Tax Contributions taken into account
in calculating the tests contained in Section 4.06(a) hereof for the Plan Year
in which the excess arose, beginning with the Highly Compensated Employee with
the largest amount of such Matching Contributions and After-Tax Contributions
and continuing in descending order until all the Excess Aggregate Contributions
(and income) have been allocated. For purposes of the preceding sentence, the
"largest amount" will be determined after distribution of any Excess Aggregate
Contributions (and income).
(d) Adjustment for Income and Loss. The Excess Aggregate
Contributions for each Highly Compensated Employee will 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" has the meaning prescribed in Code Section 414(s).
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
125% and the Actual Contribution Percentage for Highly Compensated Employees for
the same Plan Year is more than the Actual Contribution Percentage for all other
Employees multiplied by 125%, 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) 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 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, will the amount described in this Section 4.07(a)(2)
exceed 200% of the lesser of (2)(A) and (B) above; and
(b) the sum of:
(1) 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 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, will the amount described in this Section 4.07(b)(2)
exceed 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 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 will 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 Code Sections 401(k) and 401(m) (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 will be deemed, for all Plan purposes
except Section 9.01, to be Tax Deferred Contributions, and will be allocated to
the Tax Deferred Accounts of the Participants for whom the contributions were
made; provided, however, that Company Matching Contributions will 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 will be deemed, for
all Plan purposes except Section 9.01, to be Company Matching Contributions, but
will 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 will be fully vested upon deposit.
4.09. Uniformed Service Absence. Notwithstanding any
provision of this Plan to the contrary, effective as of December 12, 1994,
contributions, benefits and service credit with respect to qualified military
service will be provided in accordance with Code Section 414(u).
ARTICLE V
INVESTMENT PROVISIONS
5.01. Investment Funds.
(a) Separate Funds. The Trust Fund will 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) Balanced Fund;
(10) Corporate/Government Bond Fund;
(11) Government Securities Fund; and
(12) Short-Term Investment Fund.
(b) Assets Pending Allocation, Investment in Investment Funds
and Maturity and Redemption. 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 will be no 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. A Participant's Account
Balances and contributions allocable to a Participant's Accounts will be
invested in the Investment Funds as follows:
(a) Investment of Contributions. Except as provided in Section
5.02(d), each Participant may elect that any Profit-Sharing Contributions, Cash
Option Contributions, Tax Deferred Contributions, After-Tax Contributions,
Company Matching Contributions and Rollover Contributions allocable to his
Accounts be invested, collectively with investment gains and losses allocated on
a pro rata basis, in whole multiples of 1%, in any one or more of the Investment
Funds. The same investment election will apply to all Profit-Sharing
Contributions, Cash Option Contributions, Tax Deferred Contributions, After-Tax
Contributions and Company Matching Contributions allocable to the Participant's
Accounts. Any Tax Deferred Contributions that are automatically made pursuant to
Section 4.01(b) and Company Matching Contributions thereon will be invested in
the Balanced Fund, until the Participant elects to change his investment of such
contributions in accordance with Section 5.02(b). Notwithstanding the foregoing,
a separate investment election may be made for Rollover Contributions. Except as
otherwise provided in Section 5.02(d), each Participant may elect to change his
investment elections with respect to new contributions allocable to his
Accounts.
(b) Interfund Transfers. Except as otherwise provided in
Section 5.02(d), each Participant may at any time elect that his Account
Balances be rearranged, in whole multiples of 1% of the total balance, in any
one or more of the Investment Funds.
(c) Election Procedures. Any election to invest contributions,
change the investment for new contributions or make interfund transfers within
the Plan (other than an automatic election made pursuant to Section 4.01(b))
must be made through an Approved Form of Election. Any such election made before
the Close of Business on a Business Day will be effective and valued as of the
day such election is made. Any such election made on a day other than a Business
Day or after the Close of Business on a Business Day will be effective and
valued as of the next Business Day.
(d) Limitations on Investments. Notwithstanding the foregoing,
no contributions may be invested in the Gallaher Fund and no transfers may be
made into the Gallaher Fund.
(e) 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) will be invested in the Balanced
Fund.
(f) 1999 Transition Period. In order to provide for the
orderly reconciliation and transfer of Account Balance information required as a
result of the change in the Plan's recordkeeper and Trustee effective as of
October 1, 1999, certain transactions affecting Accounts will not be performed
during the transition period beginning July 21, 1999 and ending on a date to be
determined by the Plan Administrator (the "Transition Period"). During the
Transition Period, all requests for in-service withdrawal (other than a hardship
withdrawal) forms and distribution forms through the Plan's voice response
system must be made no later than July 21, 1999 and all requests for such
in-service withdrawals and distributions must be completed and submitted, on a
form approved by the Committee, with the Participating Employer no later than
July 31, 1999. During the Transition Period, all requests for hardship
withdrawal forms and loan forms through the Plan's voice response system must be
made no later than August 21, 1999 and all requests for hardship withdrawals and
loans must be completed and submitted, on a form approved by the Committee, with
the Participating Employer no later than August 31, 1999. During the Transition
Period, all elections to make interfund transfers, change the investment of
contributions, change the rate of Tax Deferred Contributions and After-Tax
Contributions and enroll in the Plan must be made through the Plan's voice
response system no later than August 21, 1999. Any requests or forms that are
not submitted by the applicable deadline, and any requests or forms that are
submitted with missing or incomplete documentation, information, signatures,
consents, notarizations or attestations that is not provided or completed by the
deadline, will not be processed.
5.03. Administration of Fortune Stock Fund. Subject to the
provisions of the Trust Agreement and Sections 5.15 through 5.16, the Trustee
will administer the Fortune Stock Fund as follows:
(a) Investment. The assets of the Fortune Stock Fund,
including all income thereon and increments thereto, will 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 short-term investment funds.
(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 will 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 will
retain all shares which would otherwise be distributable to the distributee and
distribute in lieu thereof their Fair Market Value on the applicable Business
Day described in Article VIII.
(d) Transfers Among Investment Funds. Upon any transfer from
any Investment Fund pursuant to the provisions of Section 5.02(c), the Trustee
will, 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 applicable Business Day described in Section 5.02(c).
(e) Rights Exercise; Sale of Stock. To the extent practicable,
the Trustee will make transactions with respect to or sell all rights to buy
Fortune Common Stock (other than rights within the meaning of Section 5.16,
which will be covered under Section 5.16) received with respect to any shares
held in the Fortune Stock Fund. The Trustee may determine to sell or exercise
such rights. 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 will 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, will 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 selected by the Investment Manager or, if there is no
such Investment Manager, by the Trustee; provided, however, that the Trusts
Investment Committee 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 Growth Equity Fund, including all income thereon and increments
thereto, will 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 is no such Investment Manager, by the
Trustee; provided, however, that the Trusts Investment Committee 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, will 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 is no such Investment Manager, by the Trustee;
provided, however, that the Trusts Investment Committee 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,
will be invested and reinvested primarily in stocks of companies incorporated
outside the United States, as selected by the Investment Manager or, if there is
no such Investment Manager, by the Trustee; provided, however, that the Trusts
Investment Committee 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, will be
invested and reinvested in a mutual fund that invests in 500 stocks that make up
the S&P 500 proportionately to each stock weighting in the index, as selected by
the Trusts Investment Committee.
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, will 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 selected by the Investment Manager or, if there is no such
Investment Manager, by the Trustee; provided, however, that the Trusts
Investment Committee may determine that the Growth-Oriented Diversified Fund be
comprised of a mutual fund having substantially the foregoing characteristics.
5.10. Investment of Balanced Fund. Subject to the provisions
of the Trust Agreement and of Section 5.03(e), the assets of the Balanced Fund,
including all income thereon and increments thereto, will 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 is no such Investment
Manager, by the Trustee; provided, however, that the Trusts Investment Committee
may determine that the Balanced 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, will 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 is no such Investment Manager, by the Trustee; provided, however, that
the Trusts Investment Committee may determine that the Corporate/Government 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,
will 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 selected by the Investment Manager or, if
there is no such Investment Manager, by the Trustee; provided, however, that the
Trusts Investment Committee 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,
will 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 will bear a fixed rate of return and are intended
to minimize market fluctuations, as selected by the Investment Manager, or if
there is no such Investment Manager, by the Trustee (which may include
investment in the Trustee's short-term collective investment fund); provided,
however, that the Trusts Investment Committee may determine that the Short-Term
Investment Fund be comprised of a mutual fund having substantially the foregoing
characteristics.
5.14. 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 will 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 5.14.
(b) Participant Direction. Each Participant, former
Participant or Beneficiary will be entitled to direct the Trustee, and the
Trustee will solicit the 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 proportionate 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 will exercise the voting rights of such shares with respect to such
matter in accordance with the most recent timely 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 directions have not been received by the Trustee as
provided in the preceding sentence, the Trustee will 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 will 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 5.14(b), each Participant,
former Participant or Beneficiary will 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 directions pursuant to both the first and the second sentences of this
Section 5.14(b). For purposes of this Section 5.14, 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 will 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
total number of shares of Fortune Common Stock in the Fortune Stock Fund.
(c) Trustee to Communicate Voting Procedures. The Trustee will
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 will
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 Fortune) 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 Fortune will promptly
furnish to the Trustee all such communications and other materials, if any, as
are being distributed by or on behalf of Fortune. Fortune will 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 will 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. Notwithstanding any other provision of this Section 5.14, the
Plan or the Trust Agreement to the contrary, 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 will use its best efforts (1) 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 (2) 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 is the intent of this
Section 5.14 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. If a court of competent jurisdiction issues an
opinion, order or decree which, in the opinion of counsel to Fortune or the
Trustee, will, in all or any particular circumstances, (1) 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, (2) cause any such provision or
provisions to conflict with ERISA, or (3) 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 will be given no further
force or effect in such circumstances. Except to the extent otherwise specified
in such opinion, order or decree, the Trustee will 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 will exercise such
voting rights in accordance with the most recent dated timely 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
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) will take into account directions timely received from Participants,
former Participants and Beneficiaries as valid direction with respect to the
exercise of such voting rights, and (2) to the extent that the Trustee deems it
appropriate, will take into consideration any relevant non-financial factors in
addition to any financial factors bearing on any exercise of such voting rights.
5.15. 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 will have no
discretion or authority to tender, deposit, sell, exchange or transfer any
shares of Fortune Common Stock (which, for purposes of this Section 5.15, will
include any rights within the meaning of Section 5.16(a)) held in the Fortune
Stock Fund pursuant to any tender offer (as defined herein) except as provided
in this Section 5.15. For purposes of this Section 5.15, a "tender offer" will
mean any tender or exchange offer for or request or invitation for tenders or
exchanges of shares of Fortune Common Stock and will include, without
limitation, any such tender offer made by or on behalf of Fortune.
(b) Participant Direction. Each Participant, former
Participant or Beneficiary will be entitled to direct the Trustee, and the
Trustee will solicit the direction of such Participant, former Participant or
Beneficiary, as to the tendering, depositing, selling, exchanging or
transferring of shares of Fortune Common Stock attributable to his proportionate
interest in the Fortune Stock Fund pursuant to any tender offer, and the Trustee
will tender, deposit, sell, exchange or transfer such shares (or will retain
such shares in the Fortune Stock Fund) pursuant to such tender offer in
accordance with the most recent timely 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
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 will 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 applicable law and not be tendered, deposited, sold,
exchanged or transferred pursuant to such tender offer, and the Trustee will not
tender, deposit, sell, exchange or transfer any of such shares pursuant thereto.
If, 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 will (1) use its best efforts to solicit the 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 5.15, and (2) exercise (or refrain from
exercising) such withdrawal rights in the same manner as will reflect the most
recent timely directions received with respect to the exercise of such
withdrawal rights. The Trustee will not withdraw shares except pursuant to a
timely direction of a Participant, former Participant or Beneficiary. The
Trustee will 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 5.15. In giving
or being deemed to have given directions to the Trustee as provided in this
Section 5.15(b), each Participant, former Participant or Beneficiary will 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 5.15(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 5.15(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 5.15, the Trustee
will 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 direction to
the Trustee. In the event of such a tender offer, the Trustee will 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 Fortune) 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 Fortune will promptly furnish to the Trustee all such
communications and other materials, if any, as are being distributed by or on
behalf of Fortune. Fortune will 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 will 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. Notwithstanding any other
provision of this Section 5.15, the Plan or the Trust Agreement to the contrary,
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 will use its best efforts (1)
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 (2)
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 is 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)
or deemed to have been given by any Participant, former Participant or
Beneficiary with respect to any tender offer.
(d) Invalidity. If a court of competent jurisdiction issues an
opinion, order or decree which, in the opinion of counsel to Fortune or the
Trustee, will, in all or any particular circumstances, (1) 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, (2) cause any such provision or provisions to conflict with
ERISA, or (3) 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 will be given no further force or effect in such
circumstances. Except to the extent otherwise specified in such opinion, order
or decree, the Trustee will 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 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 will act in
accordance with the most recent timely directions received from Participants,
former Participants and Beneficiaries to the extent such directions have not
been invalidated. To the extent the Trustee, in order to comply with ERISA or
other applicable law, 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) will take into account directions timely received from
Participants, former Participants and Beneficiaries as valid direction with
respect to a tender offer and (2) to the extent that the Trustee deems it
appropriate, will take into consideration any relevant non-financial factors in
addition to any financial factors bearing on any sale, exchange or transfer or
any exercise of withdrawal rights.
(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
5.15 will 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 will be governed by the provisions of this Section 5.15(e) and
all other applicable provisions of the Plan and the Trust Agreement. Such
proceeds will be deemed to be held in the Fortune Stock Fund and will be subject
to the other applicable provisions of the Plan and the Trust Agreement. Pending
receipt of directions as to which of the remaining Investment Funds the proceeds
should be invested in, the proceeds shall be invested in the Balanced Fund.
5.16. Certain Rights Held in Fortune Stock Fund.
(a) Disposition of Preferred Share Purchase Rights. If the
Preferred Share Purchase Rights of Fortune (or any rights issued by Fortune in
substitution or replacement thereof) held in the Fortune Stock Fund ("rights")
become separately transferable or exercisable, the Trustee shall dispose of the
rights by selling the rights to Fortune at a price recommended by an independent
financial advisor retained by the Trustee at Fortune's expense.
(b) Exchange of Rights. If, prior to the sale of the rights by
the Trustee to Fortune, Fortune determines to exchange the rights for shares of
Fortune Common Stock, the Trustee will surrender the rights that it holds in
exchange for shares of Fortune Common Stock.
(c) Invalidity. If a court of competent jurisdiction issues an
opinion, order or decree which, in the opinion of counsel to Fortune or the
Trustee, will, in all or any particular circumstances, (1) invalidate under
ERISA or otherwise any provision or provisions of the Plan or the Trust
Agreement with respect to the sale, exchange or retention of any rights held in
the Fortune Stock Fund, (2) cause any such provision or provisions to conflict
with ERISA, or (3) require the Trustee not to act or such rights not to be sold,
exchanged or retained 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 will be given no further force or effect in such
circumstances. Except to the extent otherwise specified in such opinion, order
or decree, the Trustee will sell all rights to a third party or parties with, if
the Trustee deems it appropriate, the assistance of an independent financial
advisor retained by the Trustee at the expense of Fortune.
(d) Allocation of Proceeds. The proceeds of any sale, exercise
or exchange of rights in accordance with this Section 5.16 will be allocated to
the Account of a Participant, former Participant or Beneficiary 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 will be
governed by all other applicable provisions of the Plan and the Trust Agreement.
Such proceeds will be deemed to be held in the Fortune Stock Fund and will be
subject to this Section 5.16(f) and the other applicable provisions of the Plan
and the Trust Agreement. Pending receipt of directions as to which of the
remaining Investment Funds the proceeds should be invested in, the proceeds
shall be invested in the Balanced Fund.
5.17. Valuation of Investment Funds. As of each Business Day,
the Trustee will report to the Committee the Fair Market Value of the assets of
each Investment Fund and the number of units and value of units in the Fortune
Stock Fund and Gallaher Fund. The Fair Market Value of an Investment Fund will
be the value of such Investment Fund as of the Close of Business on such
Business Day. The number of units and value of units in the Fortune Stock Fund
and Gallaher Fund will be determined in accordance with Section 5.22.
5.18. Administration of the Gallaher Fund.
(a) Gallaher ADRs Transferred to Gallaher Fund. ADRs with
respect to Gallaher stock ("Gallaher ADRs") received by the Fortune Stock Fund
in the Gallaher Spin-Off will 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
will 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 5.18(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 will not be invested in the Gallaher Fund, nor may any transfers
be made to the Gallaher Fund from any of the other Investment Funds.
5.19. Voting of Shares in Gallaher Fund.
(a) Trustee Voting. Notwithstanding any other provision of the
Plan or the Trust Agreement to the contrary, the Trustee will 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 5.19.
(b) Participant Direction. Each Participant, former
Participant or Beneficiary will be entitled to direct the Trustee, and the
Trustee will solicit the 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 will instruct the Gallaher ADR
depositary that such Gallaher ADRs be voted with respect to any matter in
accordance with the most recent timely 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 directions have
not been received by the Trustee, the Trustee will 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 will
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
5.19(b), each Participant, former Participant or Beneficiary will 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 5.19(b).
(c) Trustee to Communicate Voting Procedures. The Trustee will
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 will 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 Fortune will promptly furnish
to the Trustee all such communications and other materials, if any, as are being
distributed by or on behalf of Gallaher. Fortune will 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 will 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. Notwithstanding any other
provision of this Section 5.19, the Plan or the Trust Agreement to the contrary,
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 will use its best efforts (1)
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 (2) 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 is the intent of this
Section 5.19 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) by any Participant,
former Participant or Beneficiary in connection with the voting of Gallaher
ADRs.
(d) Invalidity. If a court of competent jurisdiction issues an
opinion, order or decree which, in the opinion of counsel to Fortune or the
Trustee, will, in all or any particular circumstances, (1) 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,
(2) cause any such provision or provisions to conflict with ERISA, or (3)
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 will be given no further force or effect in such circumstances.
Except to the extent otherwise specified in such opinion, order or decree, the
Trustee will have no discretion or authority in such circumstances to provide
voting instructions with respect to Gallaher ADRs held in the Gallaher Fund, but
will exercise such voting rights in accordance with the most recent timely
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, will
take into account directions timely received from Participants, former
Participants and Beneficiaries as being valid directions.
5.20. Tendering of Gallaher ADRs.
(a) Tender by Trustee. Notwithstanding any other provision of
the Plan or the Trust Agreement to the contrary, the Trustee will have no
discretion or authority to tender, deposit, sell, exchange or transfer any
Gallaher ADRs held in the Gallaher Fund (or to give 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 5.20.
For purposes of this Section 5.20, a "tender offer" will mean any tender or
exchange offer for or request or invitation for tenders or exchanges of Gallaher
ADRs (or securities underlying the Gallaher ADRs) and will include, without
limitation, any such tender offer made by or on behalf of Gallaher.
(b) Participant Direction. Each Participant, former
Participant or Beneficiary will be entitled to direct the Trustee, and the
Trustee will solicit the direction of such Participant, former Participant or
Beneficiary, as to the tendering, depositing, selling, exchanging or
transferring of Gallaher ADRs attributable to his proportionate 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 will tender, deposit, sell, exchange or transfer Gallaher
ADRs (or will retain such shares in the Gallaher Fund) (or will provide
instructions to the Gallaher ADR depositary with respect to securities
underlying the Gallaher ADRs) pursuant to such tender offer in accordance with
the most recent timely 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 directions have not been received by the
Trustee from Participants, former Participants and Beneficiaries, such
Participants, former Participants and Beneficiaries will 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
will act in accordance therewith. In the event that, under the terms of such
tender offer or otherwise, any Gallaher ADRs (or securities underlying Gallaher
ADRs) tendered or deposited pursuant thereto may be withdrawn, the Trustee will
use its best efforts to solicit the 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 5.20, and the Trustee will
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 will reflect the most recent timely directions received with respect
thereto. The Trustee will not withdraw Gallaher ADRs (or instruct the Gallaher
ADR depositary to withdraw securities underlying Gallaher ADRs) except pursuant
to a timely direction of a Participant, former Participant or Beneficiary. The
Trustee will 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 5.20. In giving or being deemed to
have given directions to the Trustee as provided in this Section 5.20(b), each
Participant, former Participant or Beneficiary will be acting as a Named
Fiduciary in accordance with such directions pursuant to this Section 5.20(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 5.20, the Trustee
will 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 direction to
the Trustee. In the event of such a tender offer, the Trustee will 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 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. Fortune will 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 will 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.
Notwithstanding any other provision of this Section 5.20, the Plan or the Trust
Agreement to the contrary, 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 will
use its best efforts (1) 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 (2) 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 is the intent of this Section 5.20 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. If a court of competent jurisdiction issues an
opinion, order or decree which, in the opinion of counsel to Fortune or the
Trustee, will, in all or any particular circumstances, (1) 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 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, (2) cause any such provision or provisions to conflict with ERISA, or (3)
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 will be given no further
force or effect in such circumstances. Except to the extent otherwise specified
in such opinion, order or decree, the Trustee will 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 will act in accordance with the most recent
timely 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, will take into account directions
timely received from Participants, former Participants and Beneficiaries as
being valid directions.
(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 Beneficiary will be
allocated pursuant to the directions of a Participant, former Participant or
Beneficiary and, absent a direction, will be invested in the Balanced Fund and
will not be held in the Gallaher Fund.
5.21. Voting of Shares in Mutual Funds. At the time of
mailing of notice of each annual or special stockholders' meeting of any mutual
fund under any Investment Fund, the Trustee will send a copy of the notice and
all proxy solicitation materials to each Participant, former Participant and
Beneficiary who has shares of the mutual fund credited to such Participant's,
former Participant's or Balanced Accounts, together with a voting direction form
for return to the Trustee or its designee. Participants, former Participants and
Beneficiaries will have the right to direct the Trustee as to the manner in
which the Trustee is to vote shares credited to the Accounts of such
Participant, former Participant or Beneficiary that are invested in mutual funds
under Investment Funds. The Trustee will vote the shares as directed by the
Participant, former Participant or Beneficiary. The Trustee will not vote shares
for which it has not received a direction from the Participant, former
Participant or Beneficiary. During the Transition Period described in Section
5.02(f), the Trusts Investment Committee will have the right to direct the
Trustee as to the manner in which the Trustee is to vote the shares of the
mutual funds in the Investment Funds. Following the Transition Period described
in Section 5.02(f), the Trusts Investment Committee will continue to have the
right to direct the Trustee as to the manner in which the Trustee is to vote the
mutual fund shares held in the short-term liquidity reserves in the Fortune
Stock Fund and Gallaher Fund. With respect to all additional rights relating to
shares held in the mutual funds under the Investment Funds, the Trustee will
follow the directions of the Participants, former Participants and Beneficiaries
and, if no such directions are received, the directions of the Trusts Investment
Committee.
5.22. Unitized Fortune Stock Fund and Gallaher Fund. As of
the Close of Business on September 30, 1999, the Fortune Stock Fund and Gallaher
Fund will be converted into units by dividing the Fair Market Value of all
amounts (including employer stock and any short-term investments) held in the
respective fund by $10.00. At the Close of Business on October 1, 1999 and on
each Business Day thereafter, the value of a unit in the Fortune Stock Fund or
Gallaher Fund ("Closing Unit Value") will be determined by dividing the Fair
Market Value of such fund by the number of units in such fund before taking into
account Additions to and Reductions from such fund (as defined below). After the
Closing Unit Value is determined, at the Close of Business on each Business Day,
the total number of units in the Fortune Stock Fund and Gallaher Fund will be
re-determined to taken into new units resulting from Additions to such fund (as
defined below) and canceled units resulting from Reductions from such fund (as
defined below). As of the Close of Business on such Business Day, the total
number of new units resulting from Additions to the Fortune Stock Fund or
Gallaher Fund will be the number equal to (A) the total amount of the Additions
to such fund divided by (B) the Closing Unit Value. As of the Close of Business
on such Business Day, the total number of units to be canceled under the Fortune
Stock Fund and Gallaher Fund will be the number equal to (A) the total amount of
Reductions from such fund divided by (B) the Closing Unit Value. Whenever all or
any part of the Account Balances in the Fortune Stock Fund or Gallaher Fund is
reduced from such fund as a result of a Reduction, the value of the reduced
amount will equal the Closing Unit Value multiplied by the number of whole and
fractional units credited to such Accounts. For purposes of this Section 5.22,
"Additions" means any amounts added to the Fortune Stock Fund or Gallaher Fund
during the day as a result of contributions to, reinstatement of Account
Balances under and interfund transfers pursuant to the provisions of the Plan
into such fund since the Close of Business on the immediately preceding Business
Day. For purposes of this Section 5.22, "Reductions" means any amounts reduced
from the Fortune Stock Fund or Gallaher Stock Fund as a result of any in-service
withdrawals, loans, distributions, interfund transfers, return of any excess
amounts and forfeitures pursuant to the provisions of the Plan from such fund
since the Close of Business on the immediately preceding Business Day.
ARTICLE VI
ACCOUNTS
6.01. Participants' Accounts. The Committee will 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 will 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 will 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 will 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 will 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 will 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
cash, and such contributions and any earnings and losses thereon will be
allocated to such Cash Option Account.
(c) Tax Deferred Account. A Tax Deferred Account will 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 will be allocated to such Tax Deferred Account.
(d) After-Tax Account. An After-Tax Account will be maintained
for each Participant employed by a MasterBrand Participating Employer on whose
behalf After-Tax 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 will be allocated to such After-Tax Account.
(e) Company Matching Account. A Company Matching Account will
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 will be allocated to such Company Matching Account.
(f) Rollover Account. A Rollover Account will 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 will
be allocated to such Rollover Account.
(g) Grandfathered Withdrawal Account. A Grandfathered
Withdrawal Account will 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 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
will be allocated to such Grandfathered Withdrawal Account as of January 1,
1996.
(h) Grandfathered After-Tax Account. A Grandfathered After-Tax
Account will 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 will be allocated to such Grandfathered After-Tax Account as of
January 1, 1996.
(i) Kensington Money Purchase Account. A Kensington Money
Purchase Account will 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 will be allocated to the Kensington
Money Purchase Account.
6.02. Allocation of Earnings and Losses to Accounts. Earnings
and losses will be allocated to the Accounts of all Participants as of each
Business Day 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 Business Day attributable to
interest, dividends, changes in market value, expenses and gains and losses
realized from the sale of assets.
6.03. Allocation of Contributions to Accounts. As of the
Close of Business on each Business Day, Tax Deferred Contributions, Cash Option
Contributions, After-Tax 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 will be credited to such Participant's Tax
Deferred Account, Cash Option Account, After-Tax 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
will not exceed the lesser of:
(1) $30,000; or
(2) 25% of the Participant's Compensation (as defined for this
purpose in Section 6.06).
The limitations set forth in (1) above will 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 Code Section 415(d) (or such other
Federal income tax statutory provisions as will at the time be applicable).
(b) Procedure for Preventing and Correcting Excess Annual
Additions. If the Annual Additions to a Participant's Accounts in any Plan Year
would exceed 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 After-Tax Contributions, and thereafter any Profit-Sharing
Contributions, and thereafter any Company Matching Contributions otherwise
allocable to a Participant's Accounts will be reduced by the amount necessary to
reduce the amount apportionable to a Participant to the lesser of the amounts
set forth in Section 6.04(a)(1) or (2). If 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 After-Tax 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 will be applied to reduce After-Tax Contributions,
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, After-Tax Contributions
and Cash Option Contributions allocated to such Participant's
Accounts; and
(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 will be
considered as a single defined contribution plan if a Participant is a
participant in both plans. Amounts allocated to a Participant's individual
medical benefit account, as defined in Code Section 415(l)(1), which is part of
a defined benefit plan maintained by a Participating Employer or Related
Employer will 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 Code Section 419A(d), under a welfare benefit fund, as
defined in Code Section 419(e), maintained by a Participating Employer or
Related Employer, will be treated as annual additions to a defined contribution
plan. Notwithstanding the foregoing, the compensation limit described in Section
6.04(a)(2) will not apply to any contribution for medical benefits (within the
meaning of Code Section 419A(f)(2)) after separation from service which is
otherwise treated as an annual addition under Code Section 415(l)(1). If a
reduction is necessary under Section 6.04(b), then the reduction will 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. With respect to Plan
Years commencing prior to January 1, 2000, if any Participant is also
participating in any other qualified plan (within the meaning of Code Section
401) maintained by a Participating Employer or Related Employer, then for any
limitation year, which will be the Plan Year, the sum of the "Defined Benefit
Plan Fraction" and the "Defined Contribution Plan Fraction" for such limitation
year will not exceed one. For purposes of this Section 6.05, such sum will 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 Code Section 415(b)(1)(A) for such
limitation year times 1.25, or the amount which may be taken into
account under Code Section 415(b)(1)(B) for such limitation year times
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 1.25 multiplied by the dollar
limitation in effect under Code Section 415(c)(1)(A) for such
limitation year; or
(B) the product of 1.4 multiplied by the amount which
may be taken into account under Code Section 415(c)(1)(B) for
such limitation year.
For purposes of this Section 6.05, all defined benefit or defined contribution
plans will be treated as one plan by class. If the above limitation would
otherwise be exceeded in any limitation year, the Participant's benefits under
the defined benefit plans will be limited. If any such defined benefit plan
fails to provide for such reduction of benefits, the annual additions under this
Plan will be reduced to the extent necessary to comply with the above
limitation.
If the Plan satisfied the applicable requirements of Code
Section 415 as in effect for all limitation years beginning before April 1,
1987, an amount will 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 Code Section 415(e)(1)
does not exceed one.
Notwithstanding any other provision of this Plan to the
contrary, effective as of January 1, 2000, this Section 6.05 will no longer
limit the benefits of any Participant and will be deleted from the Plan (and
Sections 6.06 and 6.07 will automatically be redesignated as Sections 6.05 and
6.06, respectively) without need for further amendment.
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" will mean a Participant's W-2 income for
the limitation year. Compensation for a limitation year will include
compensation actually paid or includible in gross income during such limitation
year as well as any elective deferral (as defined in Code Section 402(g)(3)) and
any amount which is contributed or deferred by a Participating Employer at the
election of the Participant and which is not includible in the gross income of
the Participant by reason of Code Section 125.
6.07. Limitation of Annual Unadjusted Earnings or
Compensation. For purposes of this Plan, the Unadjusted Earnings or Compensation
of a Participant will be limited to $150,000 in each Plan Year (adjusted for
increases in the cost of living pursuant to rulings of the Secretary of the
Treasury).
ARTICLE VII
VESTING AND FORFEITURES
7.01. Participant Contributions. A Participant will at all
times be 100% vested in his Tax Deferred Account, Rollover Account,
Grandfathered After-Tax Account, employee contributions and earnings thereon in
his Grandfathered Withdrawal Account and After-Tax Account.
7.02. Employer Contributions.
(a) Company Matching Accounts. Each Employee who was a
Participant in the Plan on the day before the Restatement Date will be 100%
vested in his Company Matching Account. Each Employee who becomes a Participant
on or after the Restatement Date will be 100% vested in his Company Matching
Account on the day after he completes one year of Vesting Service.
(b) Profit-Sharing Accounts. A Participant will be 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 years of Vesting Service if
he is employed by Fortune or an ACCO Participating
Employer or seven years of Vesting Service if he is
employed by a Beam Participating Employer; and
(6) his Termination of Employment Without Fault.
Each Participant or former Participant who has a
Profit-Sharing Account who terminates employment with all Related Employers for
a reason other than as stated in Section 7.02(b) (1) through (6) above will be
vested in the percentage of the value of his Profit-Sharing Account as set forth
in the following table for his respective Participating Employer:
(1) Fortune and ACCO Participating Employers
Number of Years of Vesting
Vesting Service Percentage
-------------------- ----------
Less than 1 0%
1 20%
2 40%
3 60%
4 80%
5 or more 100%
(2) Beam Participating Employers
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%
(c) Cash Option Accounts and Kensington Money Purchase
Accounts. Each Participant who is an Employee of an ACCO Participating Employer
will at all times be 100% vested in any Cash Option Account and Kensington Money
Purchase Account established for him.
(d) Grandfathered Withdrawal Accounts. Each Participant who is
an Employee of Fortune, an Acushnet Participating Employee or a Beam
Participating Employer will at all times be 100% vested in his Grandfathered
Withdrawal Account. Each Participant who is an Employee of a Beam Participating
Employer will at all times be 100% vested in his Withdrawal Balance of any
Grandfathered Withdrawal Account and will be vested in any remaining balance of
his Grandfathered Withdrawal Account in the same manner that his Profit-Sharing
Account vests in accordance with Section 7.01(b).
7.03. Vesting in Prior Plan. Notwithstanding any other
provision of this Plan to the contrary, a Participant who participated in a
Prior Plan will 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 will 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 will
commence with the date the amendment is adopted and will end on the later of:
(a) 60 days after the amendment is adopted;
(b) 60 days after the amendment is effective; and
(c) 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 will be
regarded as Forfeitures upon such Participant's Severance From Service. All
amounts forfeited in accordance with this Article VII will be used to reduce
contributions of the Participant's Participating Employer. Pending allocation to
reduce contributions of the Participant's Participating Employer, such amounts
will be invested in the Balanced Fund.
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 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 will be reinstated (a)
as of the day on which such repayment is made if such repayment is received by
the Trustee before the Close of Business on a Business Day, or (b) as of the
next Business Day, if such repayment is received by the Trustee on a day other
than a Business Day or after the Close of Business on a Business Day. Any such
repaid amount will be nonforfeitable. If a Participant or former Participant who
has received a distribution of less than the full amount of his Account Balances
resumes employment before incurring a Break in Service of five years, the amount
of the Account Balances that the Participant or former Participant did not
receive will be reinstated as of the Business Day 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. Such reinstated amounts will be invested in the
Balanced Fund until such Participant makes an investment election on an Approved
Form of Election with respect to such reinstated amounts. 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 will 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 12 consecutive months until reemployment by
any Related Employer. Notwithstanding the foregoing, any former Participant who
terminated employment under a Prior Plan described in the first sentence of
Section 1.01(bbb) before January 1, 1996 and who becomes a Participant in this
Plan, will be immediately 100% vested in any unvested Account Balances
attributable to company matching contributions at the time of his termination of
employment.
ARTICLE VIII
PAYMENTS
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 will be paid
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 elects:
(1) by a single payment in cash;
(2) by a single payment 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 Business Day 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 payments begin.
(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 payment pursuant to Section 8.02, upon
the request of such Participant, former Participant or Beneficiary through an
Approved Form of Election, all of the Account Balances will be paid in a single
payment or otherwise applied for the benefit of such Participant, former
Participant or Beneficiary. Such Account Balances will be valued (1) as of the
day on which such request is received by the Committee or its designee, if such
request is received before the Close of Business on a Business Day, or (2) as of
the next Business Day, if such request is received by the Committee or its
designee on a day other than a Business Day or after the Close of Business on a
Business Day. Except as otherwise provided in Article IX, a Participant, former
Participant or his Beneficiary who is receiving periodic installments or who is
entitled to a deferred payment pursuant to Section 8.02 may not receive a
partial single sum payment of his Account Balances.
Notwithstanding the foregoing, a former Participant who
terminated employment due to Retirement or his Beneficiary, who is receiving
periodic installments or is entitled to a deferred payment pursuant to Section
8.02, may elect through an Approved Form of Election to receive partial single
sum payments of his Account Balances in cash. Whenever a Participant's Account
Balances are withdrawn pursuant to this Section 8.01(b), such Account Balances
will be reduced from his Accounts in the order prescribed in Section 9.02(d).
Such Account Balances will be valued (1) as of the day on which such request is
received by the Committee or its designee, if such request is received before
the Close of Business on a Business Day, or (2) as of the next Business Day, if
such request is received by the Committee or its designee on a day other than a
Business Day or after the Close of Business on a Business Day. Notwithstanding
the foregoing, for each former Participant (other than a Participant who Retired
from an Acushnet Participating Employer before January 1, 1996 (or his
Beneficiary)), no more than two such partial payments may be made in any
12-month period and the minimum amount of such partial payment will be $1,000.
(c) Allocation of Earnings and Losses. As 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 payment
pursuant to Section 8.02, such Participant, former Participant or Beneficiary
will continue to share proportionately in the net income or losses of the
Investment Funds but will not share in any contributions of the Participating
Employer for any Plan Year after the Participant becomes a former Participant
other than the contribution for his last year of participation if he is
otherwise eligible for such contributions.
(d) Lump Sum Payment of Amounts of $5,000 or Less.
Notwithstanding the foregoing, if the vested value of the Account Balances of a
Participant, former Participant or Beneficiary does not exceed $5,000, payment
will be made as soon as practicable in a single payment in cash. If the vested
value of such Account Balances is zero, then such vested value will be deemed
paid to the Participant immediately as a full payment of the vested value of his
Account Balances. Notwithstanding the foregoing, if the Participant, former
Participant or Beneficiary has begun receiving payments and there is at least
one periodic payment that has yet to be made, such vested value will not be paid
in a single payment in cash without such Participant's or former Participant's
consent (and his spouse's or surviving spouse's consent, if applicable)
(e) Reduction of Account Balances and Investment Funds From
Periodic Installments. Payments made in periodic installments pursuant to
Section 8.01(a)(3) will be withdrawn from a Participant's Account Balances in
the order prescribed in Section 9.02(d). Payments in periodic installments made
pursuant to Section 8.01(a)(3) will be withdrawn from the Investment Funds on a
pro rata basis in which such Accounts are invested.
8.02. Time of Payment.
(a) Payment Upon Termination of Employment. Subject to Section
8.02(c) below, if a Participant terminates employment for any reason (whether
Retirement, Disability, Termination of Employment Without Fault, death or other
reason), his vested Account Balances will be paid to or applied for the
Participant's benefit as soon as practicable following the later of the
Participant's termination of employment or receipt by the Committee or its
designee of a request for payment through an Approved Form of Election. Such
Account Balances will be valued (1) as of the day on which such request is
received by the Committee or its designee, if such request is received before
the Close of Business on a Business Day, or (2) as of the next Business Day, if
such request is received by the Committee or its designee on a day other than a
Business Day or after the Close of Business on a Business Day. Payment will be
made in one of the forms specified in Section 8.01 or Section 8.03, where
applicable. Any Profit-Sharing Contribution allocable to the Participant's
Profit-Sharing Account or Cash Option Account after the date of such payment
will be paid in a single payment in cash as soon as practicable after such
allocation. Except as otherwise provided in Section 8.01(b), if a Participant,
former Participant or Beneficiary elects payment of his Account Balances in
periodic installments pursuant to Section 8.01(a)(3), the Participant, former
Participant or Beneficiary may change the amount (either through a decrementing
counter or fixed dollar amount) of such periodic installments no more frequently
than once per calendar year.
(b) Payment Beginning Date. Unless a Participant elects
otherwise in accordance with Section 8.02(c), payment of the Participant's
Account Balances will be paid in a single cash payment in accordance with
Section 8.01(a)(1) not later than the 60th day after the close of the Plan Year
in which the Participant attains age 65 or terminates employment, whichever is
later.
(c) Deferred Payment. Except as otherwise provided in Section
8.05(b), if the Account Balances of a Participant, former Participant or
Beneficiary exceeds $5,000 (or such other amount permitted by Treasury
Regulations) at the time the Account Balances become payable, the Account
Balances will not be paid to him or applied for his benefit, unless the
Participant, former Participant or Beneficiary elects otherwise through an
Approved Form of Election. The Participant or former Participant may elect that
payments be deferred until the minimum required beginning date described in
Section 8.02(d). So long as the Account Balances are being so held, such
Participant, former Participant or Beneficiary will, 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 will not share in any contributions made by
a Participating Employer for any Plan Year after the Participant became a former
Participant.
(d) Minimum Payment Requirements. A Participant, former
Participant or Beneficiary designated pursuant to Section 8.05(a) may also elect
through an Approved Form of Election before payment of Account Balances begins,
that payment be further deferred (except as otherwise provided herein or in
Section 8.05(b)). Notwithstanding any other provision of this Plan to the
contrary, a Participant or former Participant who has incurred Severance From
Service or who is a 5% owner as defined in Code Section 416(i)(1) (whether he
incurred Severance From Service or not), must begin receiving benefits no later
than April 1 of the calendar year that follows the calendar year in which the
Participant or former Participant attains age 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 paid to him, or if payment has begun to his designated
Beneficiary, the Participant's or former Participant's entire interest (or the
remaining part of such interest if payment has begun) will be paid within five
years after his death (or the death of his designated Beneficiary).
Notwithstanding the foregoing, the preceding sentence will not apply if (A) the
payment of the Participant's or former Participant's interest has begun and is
for a certain term permitted under (2) and such payment to the designated
Beneficiary begins 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 will be paid
over a period not extending beyond the life expectancy of the surviving spouse
and such payment begins no later than the date on which the Participant or
former Participant would have attained age 70 1/2. If the Participant or former
Participant dies after payments have begun, the remaining portion of such
interest will continue to be paid at least as rapidly as under the method of
payment being used before the Participant's or former Participant's death. All
payments will be made in accordance with the regulations under Code Section
401(a)(9), including Treasury Regulation Section 1.401(a)(9)-2.
(e) Notice Requirement. Any election pursuant to Section
8.01(b) or this Section 8.02 must be made through an Approved Form of Election.
(f) Earlier Payments to Alternate Payees. Notwithstanding any
provision of this Plan to the contrary, an Alternate Payee may elect to receive,
pursuant to the terms of a Qualified Domestic Relations Order, payment at any
time sooner than the "earliest retirement age" (within the meaning of Code
Section 414(p)(4)(B)). Such payment will be made from the Plan as soon as
practicable after the election has been received by the Participant's
Participating Employer.
8.03. Payment of Kensington Money Purchase Account Balances.
(a) Section 401(a)(11) Assets. The Trustee will be directed to
pay to a Participant all amounts held in the Participant's Kensington Money
Purchase Account and amounts transferred from the CSI Donner 401(k) Retirement
Plan, which amounts are subject to the joint and survivor annuity requirements
of Code Section 401(a)(11) 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 will 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). If the Participant is married, such election must be made pursuant
to a qualified election, as described in Section 8.03(d).
(c) Payment Forms.
(1) If a Participant is legally married on his annuity
starting date as defined by Treasury Regulation Section 1.401(a)-20,
payment to the Participant of his Section 401(a)(11) Assets will 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 will be equal in value
to a single life annuity. The joint and survivor benefits following the
Participant's death will continue to his spouse during his spouse's
lifetime at a rate equal to 50% of the rate at which such benefits were
payable to the Participant. The Participant may elect to receive a
smaller annuity benefit with payments continuing to his spouse at a
rate of 75% or 100% of the rate payable to a Participant during his
lifetime.
(2) If a Participant is not married on his annuity starting
date as defined in Treasury Regulation Section 1.401(a)-20, payment to
the Participant of his Section 401(a)(11) Assets will be made in
accordance with the methods available under Section 8.01(a), or in
accordance with the following options for the Kensington Money Purchase
Account or option (B) for amounts transferred from the CSI Donner
401(k) Retirement Plan:
(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 will 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 90-day period ending on his annuity starting date, as defined by
Treasury Regulation Section 1.401(a)-20. A married Participant's spouse must
consent to the Participant's waiver of the joint and survivor annuity. The
spouse's consent to the 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.
To be valid, the spousal consent must be witnessed by a notary public. The
Participant's spouse may revoke such consent 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. If the Participant's
spouse is legally incompetent to give consent, such consent may be given by the
spouse's legal guardian, which will include the Participant if the Participant
is the spouse's legal guardian. If the Participant is legally separated or has
been abandoned, as provided by a court order, spousal consent will not be
required, except where otherwise provided by a Qualified Domestic Relations
Order.
Any consent necessary under this provision will 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 will not be limited.
The Committee will provide to each Participant, within a
reasonable period prior to his 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;
(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 his annuity starting date, payment of his vested Account
Balance attributable to Section 401(a)(11) Assets will 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. Such a Beneficiary designation will not
be valid unless:
(1) it was made after the first day of the Plan Year in which
the Participant attains age 35;
(2) it contains a waiver of the qualified pre-retirement
survivor annuity; and
(3) the Participant's spouse consents 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 must be witnessed by
either a notary public and must 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 will 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 32 and ending with the close of
the Plan Year preceding the Plan Year in which the Participant attains
age 35;
(2) a reasonable period ending after the individual becomes a
Participant; or
(3) a reasonable period ending after Code Section 401(a)(11)
first applies to the Participant.
Notwithstanding the foregoing, in the case of a Participant
who separates from service before attaining age 35, the applicable period means
the period beginning one year before the separation from service and ending one
year after such separation. The written explanation of the qualified
pre-retirement survivor annuity will 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
before the first day of the Plan Year in which the Participant attains age 35 if
the Committee provides a written explanation of the pre-retirement survivor
annuity before the time of such designation. Such early nonspouse Beneficiary
designation will become invalid as of the first day of the Plan Year in which
the Participant attains age 35. If the Participant marries or remarries, his
designation of a nonspouse Beneficiary will be revoked automatically upon such
marriage or remarriage. Notwithstanding the foregoing, the spousal consent
requirement will 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 Code Section 417 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 will be paid to his designated Beneficiary in any of
the forms permitted under Section 8.01(a) or 8.03(c)(2) for his Kensington Money
Purchase Account or 8.03(c)(2)(B) for his transferred CSI Donner 401(k)
Retirement Plan amount.
If the Participant's surviving spouse is his Beneficiary, the
Participant's surviving spouse may elect to receive payments in any of the forms
permitted under Section 8.01(a) or 8.03(c)(2) for his Kensington Money Purchase
Account or 8.03(c)(2)(B) for his transferred CSI Donner 401(k) Retirement Plan
amount.
8.04. Certain Retroactive Payments. If the amount of the
payment required to be made or to begin 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 60 days after the earliest date on which the
amount of such payment can be ascertained under the Plan for his Kensington
Money Purchase Account or Section 8.03(c)(2)(B).
8.05. Designation of Beneficiary.
(a) Designation by Participant. At any time before payment of
the Account Balances in a Participant's Accounts or, if payment has begun in
periodic installments, then at any time before payment of the last installment,
a Participant or former Participant may designate a Beneficiary or Beneficiaries
(who may be executors or trustees and who will be the same person or persons for
each of the Participant's Accounts) in a writing filed with the Participating
Employer or its designee on a form approved by the Committee, signed by the
Participant or former Participant. The Participant or former Participant may
change or revoke any such designation in a writing filed with his Participating
Employer or its designee on a form approved by the Committee, at any time before
payment of his Account Balances or, if payment has begun in periodic
installments, then at any time before the last installment has been paid. The
spouse of a Participant or former Participant will in all cases be deemed to be
the Beneficiary of the Participant or former Participant unless (1) the
Participant or former Participant has filed with the Participating Employer or
its designee on a form approved by the Committee a designation of someone else
as Beneficiary, and (2) the spouse of the Participant or former Participant has
consented in writing to such designation and the consent acknowledges the effect
of the designation and is witnessed by a notary public. The spouse's consent may
be dispensed with only if the Participant establishes to the satisfaction of the
Participating Employer or its designee 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 there is no effective
Beneficiary designation by a Participant or former Participant on file with the
Participating Employer or its designee when Account Balances would otherwise be
payable to a Beneficiary designated by a Participant or former Participant, then
such balance will be distributed to (1) the spouse of the Participant or former
Participant, or (2) if there is no spouse, to the executor of the will or the
administrator of the estate of the Participant or former Participant, or (3) if
no such executor or administrator is appointed within six months after the death
of such Participant or former Participant, the Committee will direct that
payment be made, in such shares as the Committee will 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 primary
Beneficiary designated pursuant to Section 8.05(a) who survives the Participant
or former Participant ("Surviving Primary Beneficiary") may designate a
secondary Beneficiary or Beneficiaries ("Secondary Beneficiary") to receive all
or any portion of the Account Balances otherwise payable to the Surviving
Primary Beneficiary as of the Surviving Beneficiary's date of death. The
Surviving Primary Beneficiary may only make such designation after the
Participant's or former Participant's death. Such Secondary Beneficiary may be
an executor or trustee and will be the same person or persons for each of the
Participant's Accounts. Notwithstanding any other provision of this Plan to the
contrary, any balance payable to any Secondary Beneficiary will be paid pursuant
to one of the payment methods provided in Section 8.01(a)(1) or (a)(2), as
elected by the Secondary Beneficiary as soon as practicable after the date of
the Surviving Primary Beneficiary's death. Such balance will be computed as of
the Business Day immediately preceding or coincident with the Surviving Primary
Beneficiary's date of death. Any designation made pursuant to this Section
8.05(b) may be made at any time before the payment of the Participant's or
former Participant's Accounts to the Surviving Primary Beneficiary, or if
payment has begun in periodic installments, before payment of the last
installment to the Surviving Primary Beneficiary. Any designation by a Surviving
Primary Beneficiary must be made in a writing filed with the Participating
Employer or its designee on a form approved by the Committee and signed by the
Surviving Primary Beneficiary. Any Surviving Primary Beneficiary may revoke or
change his designation of a Secondary Beneficiary, in a writing filed with the
Participating Employer or its designee on a form approved by the Committee, at
any time before such Account Balances have been paid to the Surviving Primary
Beneficiary or, if payment has begun in periodic installments, at any time
before payment of the last installment to the Surviving Primary Beneficiary. If
no effective designation of Beneficiary pursuant to this Section 8.05(b) is on
file with the Participating Employer or its designee upon the death of the
Surviving Primary Beneficiary, any balance otherwise then payable to the
Surviving Primary Beneficiary will be (1) paid to the spouse of the Surviving
Primary Beneficiary, or (2) if there is no spouse, to the executor of the will
or the administrator of the estate of the Surviving Primary Beneficiary, or (3)
if no such executor or administrator is appointed within six months after the
death of the Surviving Primary Beneficiary, the Committee will direct that
distribution be made, in such shares as the Committee will determine, to the
child, parent or other blood relative of the Surviving Primary 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 to his personal financial matters properly, the Trustee may
make such payments in such of the following ways as the Committee directs 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 determines until such date as the Committee determines 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 payable
hereunder and his whereabouts is then unknown to the Participating Employer or
its designee and the Participating Employer or its designee fails to receive a
claim for such payment from the person entitled to such payment, or from any
other person validly acting in his behalf, then within two years thereafter, the
amount of such payment will be forfeited as of the next Business Day.
Notwithstanding the foregoing, if the person entitled to receive such payment
subsequently claims it, the amount will be restored. Any such Forfeiture will 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 will 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 its designee, or if no such address was filed with the
Participating Employer or its designee then at his last post office address as
shown in a Participating Employer's records, if any, will be binding on such
person for all purposes of this Plan. Neither any Participating Employer,
Trustee or their respective designees will 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 will 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 distribution is required under
Code Section 401(a)(9), (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) and (4) any
hardship distribution described in Code Section 401(k)(2)(B)(i)(IV), which will
include "hardship withdrawals" described in Section 9.01.
(c) Eligible Retirement Plan Defined. For purposes of this
Section 8.09, an eligible retirement plan is (1) an individual retirement
account described in Code Section 408(a), (2) an individual retirement annuity
described in Code Section 408(b), (3) an annuity plan described in Code Section
403(a), or (4) a qualified trust described in Code Section 401(a), 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 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.
8.10. Waiver of 30-Day Notice Period. If a payment is one to
which Code Sections 401(a)(11) and 417 do not apply, such payment may begin less
than 30 days after the notice required under Treasury Regulation 1.411(a)-11(c)
is given, provided that:
(a) the Participant is informed that the Participant has a
right to a period of at least 30 days after receiving the notice to consider the
decision of whether to elect a payment (and, if applicable, a particular payment
option); and
(b) the Participant, after receiving the notice, affirmatively
elects a distribution.
ARTICLE IX
IN-SERVICE WITHDRAWALS
9.01. Hardship Withdrawals.
(a) Amount. A Participant may, prior to his Severance From
Service, apply for a hardship withdrawal of all or any part of the vested
Account Balances in his Accounts (except his Kensington Money Purchase Account),
not previously withdrawn (excluding earnings credited on Tax Deferred
Contributions after December 31, 1988).
(b) Amount and Frequency. 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 twice during any
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). The minimum amount that may be withdrawn
for any hardship withdrawal is $500 or the total remaining balance in the
Participant's Accounts (except any Kensington Money Purchase Account), whichever
is less.
(c) 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 will 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 any
dependents for the following 12 months, and (4) the need to prevent eviction
from or foreclosure on the Participant's principal residence. A Participant will
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 his Participating Employer. The
Participating Employer will determine whether a financial hardship exists and
the amount to be paid as a result of the hardship. Such determinations will be
made in accordance with the Code and the applicable regulations and using a
uniform and nondiscriminatory standard. If the Participating Employer or its
designee approves the hardship withdrawal, the hardship withdrawal will not
exceed the amount required to meet the need created by the hardship, including
any amounts necessary to pay any Federal income taxes or penalties reasonably
anticipated to result from the withdrawal.
(d) Notice Requirement. Any application for a hardship
withdrawal must be made through an Approved Form of Election.
(e) Effective Date and Valuation Date. A hardship withdrawal
will be effective and valued (1) as of the day on which such request is approved
by the Participating Employer or its designee, if such approval is made before
the Close of Business on a Business Day, or (2) as of the next Business Day, if
such request is approved by the Committee or its designee on a day other than a
Business Day or after the Close of Business on a Business Day. Payment of any
amount withdrawn pursuant to this Section 9.01 will be made as soon as
practicable on or after the effective date of such hardship withdrawal.
(f) Effect on Account Balances and Investment Funds. Whenever
a Participant's Account Balances are withdrawn pursuant to this Section 9.01,
such Account Balances will be reduced from his Accounts in the following order:
(1) any After-Tax Account; (2) any Rollover Account; (3) any Tax Deferred
Account; (4) any Cash Option Account; (5) any Company Matching Account; (6) any
Profit-Sharing Account balances attributable to Profit-Sharing Contributions
from Fortune or an ACCO Participating Employer; and (7) any Profit-Sharing
Account balances attributable to Profit-Sharing Contributions from a Beam
Participating Employer. Notwithstanding the foregoing, any amounts transferred
from the CSI Donner 401(k) Retirement Plan will be reduced from the
Participant's Accounts last. Amounts allocated to the Investment Funds in the
Accounts from which amounts are withdrawn pursuant to this Section 9.01 will be
reduced on a pro rata basis.
(g) Limitations. If a hardship withdrawal is made pursuant to
this Section 9.01, the Participant may not make Tax Deferred Contributions or
Cash Option Contributions or, in the case of a Participant employed by a
MasterBrand Participating Employer, After-Tax Contributions for a period of 12
months following the date he receives the payment, and the dollar limitation
specified in Section 4.04 will be reduced for the Plan Year following the year
of withdrawal by the amount of any Tax Deferred Contributions or Cash Option
Contributions made by the Participant during the Plan Year of the hardship
withdrawal. If a hardship withdrawal is made pursuant to this Section 9.01, any
amount otherwise allocable as a Cash Option Contribution to a Participant during
the 12-month period following the date such Participant receives a hardship
withdrawal will be paid the Participant in cash.
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 9.02(e), a Participant may before 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) after he has attained age 59 1/2.
(b) Notice Requirement. Any application for a withdrawal made
pursuant to this Section 9.02 must be made through an Approved Form of Election.
(c) Effective Date and Valuation Date. A withdrawal made
pursuant to this Section 9.02 will be effective and valued (1) as of the day on
which such request is approved by the Committee or its designee, if such
approval is made before the Close of Business on a Business Day, or (2) as of
the next Business Day, if such request is approved by the Committee or its
designee on a day other than a Business Day or after the Close of Business on a
Business Day. Payment of any amount withdrawn pursuant to this Section 9.02 will
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 will be reduced from his Accounts in the following order:
(1) any After-Tax Account; (2) any Grandfathered After-Tax Account; (3) any
Grandfathered Withdrawal Account; (4) any Rollover Account; (5) any Tax Deferred
Account; (6) any Cash Option Account; (7) any Company Matching Account; (8) any
Profit-Sharing Account balances attributable to any Profit-Sharing Contributions
from Fortune or an ACCO Participating Employer; and (9) any Profit-Sharing
Account balances attributable to any Profit-Sharing Contributions from a Beam
Participating Employer. Notwithstanding the foregoing, any amounts transferred
from the CSI Donner 401(k) Retirement Plan will be reduced from the
Participant's Accounts last. Amounts allocated to the Investment Funds in the
Accounts from which amounts are withdrawn pursuant to this Section 9.02 will be
reduced on a pro rata basis.
(e) Limitations. In addition to any hardship withdrawal, a
Participant may not receive more than two in-service withdrawals under this
Article IX in any 12-month period. The minimum amount that may be withdrawn for
any in-service withdrawal (except a hardship withdrawal) is $1,000 or the total
remaining balance in the Participant's Accounts (except any Kensington Money
Purchase Account), whichever is less.
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 through an Approved Form
of Election. If such Participant elects to withdraw all of the Account Balances
in his Grandfathered After-Tax Account, such Account Balances will be
distributed to him pursuant to one of the methods of distribution provided for
in Section 8.01(a)(1) or (2) as he will 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 will 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 will be valued (1) as of the day on which
such request is approved by the Committee or its designee, if such approval is
made before the Close of Business on a Business Day, or (2) as of the next
Business Day, if such request is approved by the Committee or its designee on a
day other than a Business Day or after the Close of Business on a Business Day.
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
will be reduced on a pro rata basis.
(b) Limitations. In addition to any hardship withdrawal, a
Participant may not receive more than two in-service withdrawals under this
Article IX in any 12-month period. The minimum amount that may be withdrawn for
any in-service withdrawal (except a hardship withdrawal) is $1,000 or the total
remaining balance in the Participating Grandfathered Withdrawal Account and
Grandfathered After-Tax Account, whichever is less.
9.04. In-Service Withdrawals for Inactive Participants.
Notwithstanding any other provision of this Plan to the contrary, any
Participant who is transferred to a Non-Participating Employer or a class of
employees that is not eligible to participate in this Plan will be eligible to
receive in-service withdrawals under Sections 9.01, 9.02 and 9.03.
ARTICLE X
LOANS
10.01. Availability. Loans may be made to Participants in
accordance with this Article X under uniform rules and conditions as the
Committee may prescribe. A Participant may apply to borrow from the vested
portion of his Account Balances (except any Account Balances in his Kensington
Money Purchase Account). A loan must be requested through an Approved Form of
Election. The Committee may require the Participant to sign certain documents
and provide certain written documentation as it deems necessary. A Participant
may not have outstanding at any one time more than one loan 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. A Participant
may not apply for a new loan until 30 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, an ACCO Participating
Employer or a Beam Participating Employer (1) will not be included for purposes
of determining the number of loans that may be outstanding under this Plan, (2)
will not be subject to the 30-day limitation set forth in the immediately
preceding sentence, and (3) will not be refinanced. A Participant who transfers
employment to a Non-Participating Employer or a class of employees that is not
eligible to participate in this Plan may also apply to borrow in accordance with
this Section 10.01. A former Participant whose Accounts have not been paid out
and who is a party-in-interest within the meaning of Section 3(14) of ERISA may
also apply to borrow to the extent required by Federal law.
10.02. Effect on Account Balances and Investment Funds.
Whenever all or any part of a Participant's Account Balances are borrowed, the
amount representing such vested Account Balances or part thereof transferred to
the Loan Fund will be reduced in the following order: (a) any Profit-Sharing
Account balances attributable to Profit-Sharing Contributions from Fortune or an
ACCO Participating Employer; (b) any Profit-Sharing Account balances
attributable to Profit-Sharing Contributions from a Beam Participating Employer;
(c) any Company Matching Account; (d) any Tax Deferred Account; (e) any Cash
Option Account; (f) any Rollover Account; (g) any After-Tax Account; (h) any
Grandfathered Withdrawal Account; and (i) any Grandfathered After-Tax Account.
Notwithstanding the foregoing, any amounts transferred from the CSI Donner
401(k) Retirement Plan will be reduced from the Participant's Accounts last. A
loan will be withdrawn from the respective Investment Funds in which such vested
Account Balances are invested on a pro rata basis. A loan will be effective and
the amount of the loan will be transferred to the Loan Fund (1) as of the day on
which such loan application is approved by the Committee or its designee, if
such approval is made before the Close of Business on a Business Day, or (2) as
of the next Business Day, if such loan application is approved by the Committee
or its designee on a day other than a Business Day or after the Close of
Business on a Business Day.
10.03. Amount. The amount of any loan made pursuant to this
Article X will not be less than $1,000. The aggregate amount of all such loans
to a Participant or eligible former Participant will not exceed 50% of the
vested portion of his Account Balances under the Plan, and will not exceed
$50,000 minus his highest outstanding Plan loan balance during the 12-month
period ending the day before the loan is made.
10.04. Term of Loan. The term of a loan will not exceed five
years. Notwithstanding the foregoing, the term of a loan will not exceed ten
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 will be
delivered to the Trustee or its agent 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 will be fixed by the Committee at a rate
reasonably equivalent to prevailing market interest rates.
10.06. Repayment. The loan will be repaid in regular
installments in each pay period, by means of payroll deductions. Prepayment of a
loan in its entirety without penalty will be permitted at any time. Partial
prepayment of a loan will not be permitted provided that a Participant or former
Participant may repay his loan in part if the loan becomes due and payable as a
result of his termination of employment for any reason for up to 60 days after
such termination of employment. Notwithstanding the foregoing, repayment by (a)
a Participant who is on an Approved Leave of Absence, (b) a Participant who
transfers employment to a Non-Participating Employer or class of employees that
is not eligible to participate in the Plan, or (c) a former Participant who is a
party-in-interest within the meaning of Section 3(14) of ERISA will be made by
such Participant or former Participant on at least a monthly basis to the
Trustee by means of a certified check or money order delivered to the Trustee or
its agent. A loan which is not repaid when due will be deemed to be in default.
A loan under the Plan will constitute an earmarked investment of the borrowing
Participant's Accounts. Loan repayments will be credited to the Participant's
Account or Accounts from which the loan was made as of the date such payment is
received by the Trustee or its agent a pro rata basis. Loan repayments will 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 Balanced 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, will become due and
payable, and the Trustee will 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.
ARTICLE XI
ADMINISTRATION OF PLAN
11.01. Fiduciaries.
(a) Allocation of Responsibility Among Fiduciaries for Plan
and Trust Administration. The Fiduciaries will have only those specific powers,
duties, responsibilities and obligations as are specifically given them under
this Plan or the Trust Agreement or delegated to them by the Company. In
general, the respective Participating Employers will have the sole
responsibility for making the contributions provided for under Article III. The
Board of Directors will 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;
provided, however, that the Committee will have the authority to amend the Plan
solely with respect to matters affecting Participating Employers other than
Fortune. The Company will be the Plan Administrator for purposes of ERISA and
will 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 will have the sole responsibility for the performance of
those administrative duties specifically given them as described in this Plan.
The Trusts Investment Committee will have the sole authority to appoint
Investment Managers and select mutual funds. The Trustee will 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 will have sole authority and responsibility
for the investment and reinvestment of such portion of the Investment Funds as
the Trusts Investment Committee directs. The Investment Managers will have the
sole authority to exercise the right to vote proxies with respect to any
securities held in the Trust, except as otherwise provided in Section 5.21 and
except for proxies with respect to Fortune Common Stock held in the Fortune
Stock Fund and Gallaher ADRs held in the Gallaher Fund.
(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 will be responsible for the proper exercise of its own
powers, duties, responsibilities and obligations under this Plan and will not be
responsible for any act or failure to act of another Fiduciary. To the maximum
extent permitted by ERISA, no other Fiduciary will 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 will be the "Named Fiduciary" for
purposes of ERISA. The Secretary of Fortune will 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 will 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
will 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 will
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 will 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 will constitute a quorum for the transaction of business. All
resolutions adopted or other action taken by the Committee will be by vote of a
majority of the members of the Committee present at 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, will not be responsible for any such action or failure to act.
11.05. Disqualification of Committee Members. No member of the
Committee will 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, will from time to time
establish rules for the administration of the Plan and the transaction of its
business and will 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, 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 will 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 will be exercised in accordance with the
provisions of Sections 11.07 and 11.14.
11.07. Committee Powers and Duties. The Committee will 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;
(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
and Participants such information as is 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;
(g) to amend the Plan solely with respect to matters affecting
Participating Employers other than Fortune;
(h) to direct the Trustee with respect to the payment of
benefits; and
(i) to employ agents, attorneys, accountants, or other persons
(who also may be employed by any Participating Employer or the Trustee) and to
allocate or delegate to them such powers, rights, and duties as the Committeemay
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,
will be in writing.
11.08. Reports. The Committee will 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 will be
submitted to the Board of Directors and a copy thereof will be filed with the
Secretary of the Committee. The Committee will 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
Revenue Service and annual reports to the Department of Labor.
11.09. Claims Procedure. The Participating Employer will 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 will be stated in writing by the
Participating Employer and delivered or mailed to the Participant, former
Participant or Beneficiary within 90 days after receipt by the Participating
Employer; and such notice will 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 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 will act upon such
request for review within 60 days after receipt thereof unless special
circumstances require further time, but in no event later than 120 days after
receipt. If the Committee confirms the denial, in whole or in part, the
Committee will 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 will
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 will 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 Plan will 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 Committee and the members
of the Trusts Investment Committee will 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 will indemnify members of the Board of
Directors, members of the boards of directors of each other Participating
Employer, 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 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 Committee and the members of the
Trusts Investment Committee and any other employee who may act on their behalf,
and each of them, will 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 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 will be consistently and
uniformly applied to all persons similarly situated, and no such action will be
taken which will 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 its
counsel or agents, expenses incident to investments of the Trust and any
Federal, state or other taxes levied against the Trust, fees of accountants,
actuaries, attorneys, and Investment Managers and any other proper expenses of
administering the Plan as determined by the Committee, will be paid from the
Trust; provided, however, that the Participating Employers may pay their
respective shares of such expenses directly.
ARTICLE XII
MANAGEMENT OF TRUSTS
12.01. Funds in Trusts. All the assets of the Plan will be
held in the Trust, comprising 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,
Balanced Fund, Corporate/Government Bond Fund, Government Securities Fund,
Short-Term Investment Fund and Loan Fund, 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 tax qualified defined contribution 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 will be
held, invested and disposed of in accordance with the terms of the Trust
Agreement. All contributions under this Plan will be paid to the Trustee and,
except as otherwise provided in Section 14.03, all assets of the Trust Fund
allocable to the Plan, including income from investments and from all other
sources, will be retained for the exclusive benefit of Participants, former
Participants and Beneficiaries, and will be used to pay benefits to such persons
or to pay expenses of administration of the Plan and the Trust to the extent not
paid by Fortune or another Participating Employer.
12.02. Trustee and Trust Agreement. The Trust will be held by
a Trustee under a Trust Agreement approved by the Board of Directors, with such
powers in the Trustee as will 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
will be such bank or trust company as may be appointed by the Board of 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 will appoint a successor Trustee.
12.03. Investment Managers. The Trusts Investment Committee
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 Trusts Investment Committee may remove an Investment Manager at any
time, upon reasonable notice, and upon such removal, or upon the resignation of
an Investment Manager, the Trusts Investment Committee may appoint another
Investment Manager. The Trusts Investment Committee will also have authority to
designate mutual funds for investments of the Plan.
12.04. Conclusiveness of Reports. Any report of the Trustee
required or permitted under the Plan will be conclusive upon all Participants,
former Participants, and Beneficiaries.
ARTICLE XIII
AMENDMENT AND TERMINATION
13.01. Reserved Powers. Fortune will 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 the Committee
will have the power at any time to amend the Plan solely with respect to matters
affecting Participating Employers other than Fortune. Notwithstanding the
foregoing, 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. In addition, 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 3/8ths of 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 will 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 Account Balances of
all Participants and former Participants will be distributable as provided in
Article VIII, except that the Committee may direct, then or at any subsequent
time, 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, will be fully vested and nonforfeitable and will be
distributable in accordance with Article VIII. The Plan is partially terminated
for Participants whose employment is terminated on or after April 27, 1999 as a
result of the relocation of the Company's principal executive offices from Old
Greenwich, Connecticut to Lincolnshire, Illinois and each such Participant shall
have a nonforfeitable right to his Accounts.
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 Code Section 401(a), at any time upon action by the
Committee. 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 Code
Section 401(a), provision will 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 continues to carry on all or a substantial
part of its business, and such successor elects 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.
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 may 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 becomes bankrupt or attempts to anticipate, alienate, sell,
transfer, assign, pledge, encumber or charge any benefit under the Plan or
interest in the Trust, then such benefit or interest will cease and determine,
and in that event the Trustee will hold or apply it, in such shares as the
Committee determines, 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 will 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
will 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 will 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 will
have no right, title or interest in the assets of the Trust, nor will any part
of the assets of the Trust at 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 Code Section 401(a), the assets of the
Trust attributable to contributions made by that Participating Employer under
the Plan will be returned to that Participating Employer within one 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 will not be considered to have been contributed to
the Trust by that Participating Employer and, after having been reduced by any
losses of the Trust attributable thereto, will be returned to that Participating
Employer within one year of the date the amount is paid to the 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 attributable thereto will 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 will include the feminine and neuter genders, the singular
will include the plural and the plural will include the singular.
14.05. Right to Discharge. Every Employee and Participant will
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.
14.06. Absence of Guaranty. No Participating Employer in any
way guarantees the Trust against loss or depreciation. The liability of the
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, is limited to the
available assets of the 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 will 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.
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 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 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 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
plans for all key employees (including any part of the accrued benefit
distributed in the five-year period ending on the determination
date(s)) and the sum of account balances under the aggregate defined
contribution 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
plans (including any part of the accrued benefit distributed in the
five-year period ending on the determination date(s)) for all
Participants and the sum of the account balances under the aggregate
defined contribution plans for all Participants as of the determination
date(s).
Both the numerator and the denominator are determined in
accordance with Code Section 416 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-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 12-month
period ending on the determination date, except as provided in Code Section 416
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-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 Code Section 416 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 subparagraph (1) to meet the
requirements of Code Section 401(a)(4) or 410.
(d) Permissive Aggregation Group. A permissive aggregation
group consists of:
(1) the required aggregation group; and
(2) any other plans of the Related Employers which,
when considered as a group with the required aggregation group, would
continue to satisfy the requirements of Code Sections 401(a)(4) and
410.
(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 50% of the dollar limitation under Code Section
415(b)(1)(A);
(2) an owner (or considered an owner under Code
Section 318) of one of the ten largest interests in a Related Employer
if the individual's annual compensation exceeds the dollar limitation;
(3) a 5% owner of a Related Employer; or
(4) a 1% owner of a Related Employer with annual
compensation exceeding $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. 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 will 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
Code Section 411(b)(1)(C).
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 will have and retain a 100% vested interest
in his Account Balances if he has at least three 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 2% of his average annual compensation during the five 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 (disregarding any years after
the last Plan Year with respect to which the Plan is top-heavy), each
Participating Employer will make such additional contributions as is necessary
to provide contributions for each Employee eligible to participate under Article
II who is not a key employee equal to 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 will 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:
(1) the individual failed to complete 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 will make such additional
contribution to this Plan as will be necessary to provide a contribution to such
Employee equal to 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 Code Section 415.
15.04. Special Annual Additions Limitation. With respect to
Plan Years commencing before January 1, 2000, in any Plan Year for which the
Plan is top-heavy, the fraction 1.0 will be used in place of the fraction 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.
Notwithstanding any other provision of this Plan to the contrary, effective as
of January 1, 2000, this Section 15.04 will no longer limit the benefits of any
Participant and will be deleted from the Plan (and Section 15.05 will
automatically be redesignated as Section 15.04) without need for further
amendment.
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 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 will continue to apply with respect to a Participant.
Date: October 11, 1999
FORTUNE BRANDS, INC.
By: /s/ Anne C. Linsdau
-------------------------
Name: Anne C. Linsdau
Title: Vice President,
Human Resources
EXHIBIT A
TRANSITIONAL PROVISIONS
A.1. 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 will 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.
A.2. 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.
401(k) Savings Plan will participate in this Plan on January 1, 1998 and
Employees of May Tag & Label Corp. will 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. 401(k) Savings Plan, amounts held as
tax deferred elective contributions thereunder will be held in the Tax Deferred
Contribution Account under this Plan and amounts held as employer matching
contributions thereunder will be held in the Company Matching Account under this
Plan.
A.3. Transitional Provision for Salaried Employees of Schrock
Cabinet Company. Notwithstanding any other provision of this Plan to the
contrary, an Employee of Schrock Cabinet Company on June 12, 1998 will
participate in this Plan on such date and will be credited with Hours of Service
and periods of employment with Schrock Cabinet Company, a division of White
Consolidated Industries, Inc., prior to the date that it became a Related
Employer in determining a Year of Eligibility Service and Vesting Service.
A.4. Transitional Provision for Employees of Peak Wines
International, Inc. Notwithstanding any other provision of this Plan to the
contrary, Peak Wines International, Inc. Employees who participated in the
Geyser Peak Winery Employees' Savings Plan immediately prior to August 23, 1998
will become Participants as of August 23, 1998 and will be eligible to have Tax
Deferred Contributions made on their behalf under Article IV as soon as
administratively practicable thereafter. Effective as of August 23, 1998, all
Employees of Geyser Peak Winery will be credited with Hours of Service and
periods of employment under this Plan to the same extent such hours of and
periods of service had been credited immediately prior to such date under the
Geyser Peak Winery Employees' Savings Plan in determining a Year of Eligibility
Service and Vesting Service.
A.5. Transitional Provision for Employees of Creative
Specialties, Inc. Notwithstanding any other provision of this Plan to the
contrary, any Employee of Creative Specialties, Inc. who participated in the CSI
Donner 401(k) Retirement Plan will participate in this Plan on January 1, 1999
and Employees of Creative Specialties, Inc. will be credited with Hours of
Service and periods of employment with Creative Specialties, Inc. 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 CSI Donner 401(k) Retirement Plan, amounts held
as tax deferred elective contributions or qualified nonelective contributions
thereunder will be held in the Tax Deferred Contribution Account under this
Plan, amounts held as employer matching contributions thereunder will be held in
the Company Matching Account under this Plan and other employer contributions
thereunder will be held in the Profit-Sharing Account under this Plan.
Exhibit 99b1
MASTER TRUST AGREEMENT
Between
- -------------------------------------------------------------------------------
FORTUNE BRANDS, INC.
And
FIDELITY MANAGEMENT TRUST COMPANY
- -------------------------------------------------------------------------------
FORTUNE BRANDS, INC. SAVINGS PLANS
MASTER TRUST
Dated as of October 1, 1999
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<TABLE>
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TABLE OF CONTENTS
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<S> <C> <C>
Section Page
- ------- ----
Section 1. Definitions..................................................................................2
Section 2. Trust........................................................................................3
Section 3. Exclusive Benefit and Reversion of Contributions.............................................4
Section 4. Disbursements................................................................................5
(a) Administrator Directed Disbursements.............................................................5
(b) Participant Withdrawal Requests..................................................................5
(c) Limitations......................................................................................5
Section 5. Investment of Trust..........................................................................5
(a) Selection of Investment Options..................................................................5
(b) Available Investment Options.....................................................................6
(c) Participant Direction............................................................................6
(d) Mutual Funds.....................................................................................6
Section 6. Administration of Fortune Stock Fund.........................................................7
(a) Investment in Fortune Common Stock...............................................................7
(b) Voting of Shares in Fortune Stock Fund......................................................... 11
(c) Tender Offers...................................................................................14
(d) Certain Rights Held in Fortune Stock Fund.......................................................18
Section 7. Administration of Gallaher Fund.............................................................19
(a) Investment in Gallaher ADRs.....................................................................19
(b) Voting of Gallaher ADRs.........................................................................22
(c) Tendering of Gallaher ADRs......................................................................24
Section 8. Investment Options..........................................................................28
(a) Participant Loans...............................................................................28
(b) Outside Managed Separate Investment Funds.......................................................29
(c) Reliance of Trustee on Directions...............................................................31
Section 9. Trustee Powers..............................................................................31
Section 10. Recordkeeping and Administrative Services to Be Performed...................................32
(a) General.........................................................................................32
(b) Accounts........................................................................................33
(c) Inspection and Audit............................................................................33
(d) Effect of Plan Amendment........................................................................33
(e) Returns, Reports and Information................................................................34
(f) Allocation of Plan Interests....................................................................34
Section 11. Compensation and Expenses..................................................................34
Section 12. Directions and Indemnification.............................................................35
(a) Identity of Administrator and Named Fiduciaries.................................................35
(b) Directions from Fortune or Administrator........................................................35
(c) Directions from Named Fiduciary.................................................................35
(d) Co-Fiduciary Liability..........................................................................36
(e) Indemnification.................................................................................36
(f) Survival........................................................................................36
Section 13. Resignation or Removal of Trustee..........................................................36
(a) Resignation.....................................................................................36
(b) Removal.........................................................................................37
Section 14. Successor Trustee..........................................................................37
(a) Appointment.....................................................................................37
(b) Acceptance......................................................................................37
(c) Corporate Action................................................................................37
Section 15. Termination................................................................................37
Section 16. Resignation, Removal, and Termination Notices..............................................38
Section 17. Duration...................................................................................38
Section 18. Amendment or Modification..................................................................38
Section 19. Electronic Services........................................................................38
Section 20. General....................................................................................39
(a) Performance by Trustee, its Agents or Affiliates................................................39
(b) Delegation by Employer..........................................................................39
(c) Entire Agreement................................................................................40
(d) Waiver..........................................................................................40
(e) Successors and Assigns..........................................................................40
(f) Partial Invalidity..............................................................................40
(g) Section Headings................................................................................40
Section 21. Governing Law..............................................................................40
(a) Massachusetts Law Controls......................................................................40
(b) Trust Agreement Controls........................................................................41
Section 22. Plan Qualification ........................................................................41
</TABLE>
<PAGE>
MASTER TRUST AGREEMENT, dated as of the first day of October, 1999,
between FORTUNE BRANDS, INC., a Delaware corporation, having an office at 1700
East Putnam Avenue, Old Greenwich, Connecticut 06870 ("Fortune"), and FIDELITY
MANAGEMENT TRUST COMPANY, a Massachusetts trust company, having an office at 82
Devonshire Street, Boston, Massachusetts 02109 (the "Trustee").
WITNESSETH:
WHEREAS, Fortune is the sponsor of the Fortune Brands Retirement
Savings Plan (the "Plan"); and
WHEREAS, a subsidiary of Fortune maintains the Fortune Brands Hourly
Employee Retirement Savings Plan, and other affiliates and subsidiaries of
Fortune may in the future maintain qualified defined contribution plans for the
benefit of their eligible employees; and
WHEREAS, Fortune desires to establish a single trust to hold all of the
assets of the Plan and such other tax-qualified defined contribution plans
maintained by Fortune, or any of its subsidiaries or affiliates, as elect to
participate therein; and
WHEREAS, the Trustee shall maintain a separate account reflecting the
equitable share of each Plan in the Trust and in all investments, receipts,
disbursements and other transactions hereunder, and shall report the value of
such equitable share at such times as may be mutually agreed upon by the Trustee
and Fortune. Such equitable share shall be used solely for the payment of
benefits, expenses and other charges properly allocable to each such Plan and
shall not be used for the payment of benefits, expenses or other charges
properly allocable to any other Plan; and
WHEREAS, the Trustee is willing to hold and invest the aforesaid plan
assets in trust pursuant to the provisions of this Trust Agreement, which trust
shall constitute a continuation, by means of an amendment and restatement, of
each of the prior trusts from which plan assets are transferred to the Trustee;
and
WHEREAS, The Trustee is willing to hold and invest the aforesaid plan
assets in trust among several investment options selected by Fortune; and
WHEREAS, the Trustee is willing to perform recordkeeping and
administrative services for the Plan if the services are ministerial in nature
and are provided within a framework of plan provisions, guidelines and
interpretations conveyed in writing to the Trustee by Fortune.
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants and agreements set forth below, Fortune and the Trustee agree
as follows:
Section 1. Definitions. The following terms as used in this Trust Agreement
have the meaning indicated unless the context clearly requires otherwise:
(a) "Administrator" shall mean, with respect to the Plan, the person or
entity which is the "administrator" of such Plan within the meaning of
section 3(16)(A) of ERISA.
(b) "Agreement" shall mean this Trust Agreement, as the same may be amended
and in effect from time to time.
(c) "Code" shall mean the Internal Revenue Code of 1986, as it has been or
may be amended from time to time.
(d) "ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as it has been or may be amended from time to time.
(e) "Fidelity Mutual Fund" shall mean any investment company advised by
Fidelity Management & Research Company or any of its affiliates.
(f) "Fortune" shall mean Fortune Brands, Inc., a Delaware corporation, or
any successor to all or substantially all of its businesses which, by
agreement, operation of law or otherwise, assumes the responsibility of
Fortune Brands, Inc. under this Agreement.
(f) "Fortune Common Stock" shall mean the common stock of Fortune or such
other publicly-traded stock of Fortune, or such other publicly-traded
stock of Fortune's affiliates as meets the requirements of section
407(d)(5) of ERISA with respect to the Plan.
(g) "Fortune Stock Fund" shall mean the fund through which Trust
investments in Fortune Common Stock are made.
(h) "Gallaher ADRs" shall mean American Depository Receipts of Gallaher
Group Plc, a public limited company incorporated under the laws of
England and Wales and a former affiliate of Fortune.
(i) "Gallaher Fund" shall mean the fund through which Trust investments in
Gallaher ADRs are held.
(j) "Mutual Fund" shall refer both to Fidelity Mutual Funds and
Non-Fidelity Mutual Funds.
(k) "Named Fiduciary" shall mean, with respect to the application of any
provision of this Agreement to any Plan, the person or entity which is
the relevant fiduciary under such Plan with respect to such matter
(within the meaning of section 402(a) of the Employee Retirement Income
Security Act of 1974, as amended).
(l) "Non-Fidelity Mutual Fund" shall mean certain investment companies not
advised by Fidelity Management & Research Company or any of its
affiliates.
(m) "Participant" shall mean, with respect to the Plan, any employee (or
former employee) with an account under the Plan, which has not yet been
fully distributed and/or forfeited, and shall include the designated
beneficiary(ies) with respect to the account of any deceased employee
(or deceased former employee) until such account has been fully
distributed and/or forfeited.
(n) "Participant Recordkeeping Reconciliation Period" shall mean the period
beginning on the date of the initial transfer of assets to the Trust
and ending on the date of the completion of the reconciliation of
Participant records.
(o) "Plan" shall mean the Fortune Brands Retirement Savings Plan and the
Fortune Brands Hourly Employee Retirement Savings Plan and such other
tax-qualified defined contribution plans which are maintained by
Fortune or any of its subsidiaries or affiliates that elect to
participate in the Trust established hereunder for the benefit of their
eligible employees and which are designated by Fortune in writing to
the Trustee as a Plan hereunder, such writing to be in the form of the
Plan Designation Form provided by the Trustee and signed by Fortune.
Each reference to "a Plan" or "the Plan" in this Agreement shall mean
and include the Plan or Plans to which the particular provision of this
Agreement is being applied or all Plans, as the context may require.
(p) "Reporting Date" shall mean the last day of each calendar quarter, the
date as of which the Trustee resigns or is removed pursuant to Section
13 hereof and the date as of which this Agreement terminates pursuant
to Section 15 hereof.
(q) "Trust" shall mean the Fortune Brands, Inc. Savings Plans Master Trust,
being the trust established by Fortune and the Trustee pursuant to the
provisions of this Agreement.
(r) "Trustee" shall mean Fidelity Management Trust Company, a Massachusetts
trust company and any successor to all or substantially all of its
trust business as described in Section 14(c). The term Trustee shall
also include any successor trustee appointed pursuant to Section 14 to
the extent such successor agrees to serve as Trustee under this
Agreement.
Section 2. Trust. Fortune hereby establishes the Fortune Brands, Inc. Savings
Plans Master Trust with the Trustee. The Trust shall consist of an initial
contribution of money or other property acceptable to the Trustee in its sole
discretion, made by Fortune or transferred from a previous trustee under the
Plan, such additional sums of money and Fortune Common Stock as shall from time
to time be delivered to the Trustee under a Plan, all investments made therewith
and proceeds thereof, and all earnings and profits thereon, less the payments
that are made by the Trustee as provided herein, without distinction between
principal and income. The Trustee hereby accepts the Trust on the terms and
conditions set forth in this Agreement. In accepting this Trust, the Trustee
shall be accountable for the assets received by it, subject to the terms and
conditions of this Agreement.
Section 3. Exclusive Benefit and Reversion of Contributions.
(a) Except as provided in paragraphs (b), (c) and (d) of this Section,
no part of the Trust may be used for, or diverted to, purposes other than the
exclusive benefit of the Participants in the Plan or their beneficiaries prior
to the satisfaction of all liabilities with respect to the Participants and
their beneficiaries.
(b) In the case of contributions made by the Plan Sponsor prior to the
receipt of an initial favorable determination letter from the Internal Revenue
Service ("IRS") with respect to the Plan, the Plan Sponsor may direct the
Trustee to return to the Plan Sponsor those contributions and all earnings
thereon within one year after the IRS refuses in writing to issue such a letter.
(c) In the case of any portion of a contribution made by the Plan
Sponsor by mistake of fact, the Plan Sponsor may direct the Trustee to return to
the Plan Sponsor that portion of the contribution within one year after the
payment of that portion of the contribution.
(d) In the case of any portion of a contribution made by the Plan
Sponsor and disallowed by the IRS as a deduction under section 404 of the Code,
the Plan Sponsor may direct the Trustee to return to the Plan Sponsor that
portion of the contribution within one year after the IRS disallows the
deduction in writing.
(e) Earnings attributable to the contributions returnable under
paragraph (c) or (d) shall not be returned to the Plan Sponsor, and any losses
attributable to those contributions shall reduce the amount returned.
Section 4. Disbursements.
(a) Administrator Directed Disbursements. The Trustee shall make
disbursements in the amounts and in the manner that the Administrator directs
from time to time in writing. The Trustee shall have no responsibility to
ascertain such direction's compliance with the terms of the Plan (except to the
extent the terms of the Plan have been communicated to the Trustee in writing)
or of any applicable law or the direction's effect for tax purposes or
otherwise; nor shall the Trustee have any responsibility to see to the
application of any disbursement.
(b) Participant Withdrawal Requests. Fortune hereby directs that,
pursuant to the Plan, a Participant withdrawal request (in-service or full
withdrawal) may be made by the Participant by telephone or such other electronic
means as may be mutually agreed upon by Fortune and Trustee, and the Trustee
shall process such request only after the identity of the Participant is
verified by use of a personal identification number ("PIN") and social security
number. The Trustee shall process such withdrawal in accordance with written
guidelines provided by Fortune and documented in the Plan Administrative Manual.
In the case of a hardship withdrawal request, the Trustee shall forward the
withdrawal document to the Participant for execution and submission for approval
to the Administrator. The Administrator shall have the responsibility for
approving the withdrawal and instructing the Trustee to send the proceeds to the
Administrator or to the Participant if so directed by the Administrator.
(c) Limitations. The Trustee shall not be required to make any
disbursement in excess of the net realizable value of the assets of the Trust at
the time of the disbursement. The Trustee shall be required to make all
disbursements in cash in accordance with the hierarchy of investments to be
converted to cash as detailed in the Plan Administrative Manual unless the
Administrator has provided written directions to the contrary.
Section 5. Investment of Trust.
(a) Selection of Investment Options. The Trustee shall have no
responsibility for the selection of investment options under the Trust and shall
not render investment advice to any person in connection with the selection of
such options.
(b) Available Investment Options. The Named Fiduciary with respect to a
Plan shall direct the Trustee as to the investment options in which the Trust
shall be invested during the Participant Recordkeeping Reconciliation Period,
and the investment options in which Plan Participants may invest, subject to the
following limitations. The Named Fiduciary may determine to offer as investment
options only (i) Mutual Funds, (ii) Fortune Common Stock, (iii) Gallaher ADRs,
(iv) notes evidencing loans to Participants in accordance with the terms of the
Plan, and (v) portfolios of assets managed by a third party investment manager
as defined in section 402(c)(3) of ERISA not affiliated with the Trustee.
The investment options initially selected by the Named Fiduciary are
identified on a Schedule of Administrative Services and a Schedule of Investment
Options provided by the Trustee and signed by Fortune. The Named Fiduciary may
add additional investment options with the consent of the Trustee and upon
mutual amendment of this Agreement and/or Schedules, as applicable, to reflect
such additions.
(c) Participant Direction. Each Participant shall direct the Trustee in
which investment option(s) to invest the assets in the Participant's individual
accounts. Such directions may be made by Participants by use of the telephone
exchange system, the internet, or in such other manner as may be agreed upon
from time to time by Fortune and the Trustee, maintained for such purposes by
the Trustee or its agent, in accordance with the written Schedule of Exchange
Guidelines provided by the Trustee and signed by Fortune. In the event that the
Trustee fails to receive a proper direction, the assets shall be invested in the
securities of the investment option set forth for such purpose on the Schedule
of Investment Options, until the Trustee receives a proper direction.
(d) Mutual Funds. Fortune hereby acknowledges that it has received from
the Trustee a copy of the prospectus for each Fidelity Mutual Fund selected by
the Named Fiduciary as a Plan investment option. All transactions involving
Non-Fidelity Mutual Funds shall be done in accordance with the Schedule of
Operational Guidelines for Non-Fidelity Mutual Funds provided by the Trustee and
signed by Fortune. Trust investments in Mutual Funds shall be subject to the
following limitations:
(i) Execution of Purchases and Sales. Purchases and sales of
Mutual Funds (other than for exchanges) shall be made on the date on which the
Trustee receives from Administrator in good order all information and
documentation necessary to accurately effect such purchases and sales (or in the
case of a purchase, the subsequent date on which the Trustee has received a wire
transfer of funds necessary to make such purchase). Exchanges of Mutual Funds
shall be made in accordance with the Schedule of Exchange Guidelines provided by
the Trustee and signed by Fortune.
(ii) Voting. At the time of mailing of notice of each annual or
special stockholders' meeting of any Mutual Fund, the Trustee shall send a copy
of the notice and all proxy solicitation materials to each Participant who has
shares of the Mutual Fund credited to the Participant's accounts, together with
a voting direction form for return to the Trustee or its designee. Fortune shall
have the right to direct the Trustee as to the manner in which the Trustee is to
vote the mutual fund shares held in any short-term investment fund or liquidity
reserve. The Participant shall have the right to direct the Trustee as to the
manner in which the Trustee is to vote the shares credited to the Participant's
accounts (both vested and unvested). The Trustee shall vote the shares as
directed by the Participant. The Trustee shall not vote shares for which it has
received no directions from the Participant. During the Participant
Recordkeeping Reconciliation Period, Fortune shall have the right to direct the
Trustee as to the manner in which the Trustee is to vote the shares of the
Mutual Funds in the Trust including Mutual Fund shares held in any short-term
investment fund for liquidity reserve. With respect to all rights other than the
right to vote, the Trustee shall follow the directions of the Participant and if
no such directions are received, the directions of the Named Fiduciary. The
Trustee shall have no duty to solicit directions from Participants or Fortune.
Section 6. Administration of Fortune Stock Fund.
(a) Investment in Fortune Common Stock. Trust investments in Fortune
Common Stock shall be made via the Fortune Stock Fund. Investments in the
Fortune Stock Fund shall consist primarily of shares of Fortune Common Stock. In
order to satisfy daily Participant exchange or withdrawal requests for transfers
and payments, the Fortune Stock Fund shall also include cash or short-term
liquid investments in accordance with this paragraph. Such holdings will include
Colchester Street Trust: Money Market Portfolio: Class I or such other Mutual
Fund commingled money market pool as agreed to by Fortune and Trustee. Fortune
shall, after consultation with the Trustee, establish and communicate to the
Trustee in writing a target percentage and drift allowance for such short-term
liquid investments. The Trustee shall be responsible for ensuring that the
actual cash held in the Fortune Stock Fund falls within the agreed upon range
over time. Each Participant's proportional interest in the Fortune Stock Fund
shall be measured in units of participation, rather than shares of Fortune
Common Stock. Such units shall represent a proportionate interest in all of the
assets of the Fortune Stock Fund, which includes shares of Fortune Common Stock,
short-term investments and at times, receivables for dividends and/or Fortune
Common Stock sold and payables for Fortune Common Stock purchased. The Trustee
shall determine a daily net asset value ("NAV") for each unit outstanding of the
Fortune Stock Fund. Valuation of the Fortune Stock Fund shall be based upon the
New York Stock Exchange ("NYSE") closing price of the stock, or if unavailable,
the latest available price as reported by the principal national securities
exchange on which the Fortune Common Stock is traded. The NAV shall be adjusted
by dividends paid on the shares of Fortune Common Stock held by the Fortune
Stock Fund, gains or losses realized on sales of Fortune Common Stock,
appreciation or depreciation in the market price of those shares owned, and
interest on the short-term investments held by the Fortune Stock Fund, expenses
that, pursuant to Fortune's direction, the Trustee accrues from the Fortune
Stock Fund, and commissions on purchases and sales of Fortune Common Stock.
Investments in Fortune Common Stock shall be subject to the following
limitations:
(i) Acquisition Limit. Pursuant to the Plan,
the Trust may be invested in Fortune Common Stock to the extent necessary to
comply with investment directions in accordance with this Agreement.
(ii) Fiduciary Duty. Fortune shall continually
monitor the suitability under the fiduciary duty rules of section 404(a)(1) of
ERISA (as modified by section 404(a)(2) of ERISA) of acquiring and holding
Fortune Common Stock. The Trustee shall not be liable for any loss, or by reason
of any breach, which arises from the directions of the Named Fiduciary with
respect to the acquisition and holding of Fortune Common Stock, unless it is
clear on their face that the actions to be taken under those directions would be
prohibited by the foregoing fiduciary duty rules or would be contrary to the
terms of this Agreement.
(iii) Each Participant with an interest in Fortune
Common Stock (or, in the event of the Participant's death, his beneficiary) is,
for the purposes of Section 6(a)(ii), hereby designated as a "named fiduciary"
(within the meaning of Section 403(a)(1) of ERISA), with respect to a pro rata
portion of (i) the shares of Fortune Common Stock held which are allocated to
other Participants' accounts but as to which directions are not timely received
by the Trustee, and (ii) the shares of Fortune Common Stock not allocated to
Participants' accounts, and (iii) allocated shares not purchased at the
direction of Participants, and such Participant (or beneficiary) shall have the
right to direct the Trustee in writing as to the manner in which the Trustee is
to vote such shares.
(iv) Purchase and sales of Fortune Common Stock shall
be made on the open market as necessary to maintain the target cash percentage
and drift allowance for the Fortune Stock Fund, provided that:
(A) If the Trustee is unable to purchase
or sell the total number of shares required to be purchased or sold on such day
as a result of market conditions; or
(B) If the Trustee is prohibited by the
Securities and Exchange Commission, the NYSE, or any other regulatory body from
purchasing or selling any or all of the shares required to be purchased or sold
on such day, then the Trustee shall purchase or sell such shares as soon as
possible thereafter. The Trustee may follow directions from Fortune to deviate
from the above purchase and sale procedures provided that such direction is made
in writing by Fortune.
(v) Execution of Purchases and Sales. (A) Purchases
and sales of units in the Fortune Stock Fund (other than for exchanges) shall be
made on the date on which the Trustee receives from Fortune in good order all
information, documentation, and wire transfers of funds (if applicable),
necessary to accurately effect such transactions. Exchanges of units in the
Fortune Stock Fund shall be made in accordance with the Schedule of Exchange
Guidelines provided by the Trustee and signed by Fortune. The Trustee may follow
directions from Fortune to deviate from the above purchase and sale procedures
provided that such direction is made in writing by Fortune.
(B) Purchases and Sales from or to Fortune.
If agreed to between Fortune and the Trustee in writing prior to the trading
date, the Trustee may purchase or sell Fortune Common Stock from or to Fortune
if the purchase or sale is for adequate consideration (within the meaning of
section 3(18) of ERISA) and no commission is charged. If employer contributions
or contributions made on behalf of the Participants (employee) under the Plans
are to be invested in Fortune Common Stock, Fortune may transfer Fortune Common
Stock in lieu of cash to the Trust. In either case, the number of shares to be
transferred will be determined by dividing the total amount of Fortune Common
Stock to be purchased or sold by the NYSE closing price of the Fortune Common
Stock on the trading date.
(C) Use of an Affiliated Broker. Fortune
hereby directs the Trustee to use Fidelity Capital Markets and its affiliates
("Capital Markets") to provide brokerage services in connection with any
purchase or sale of Fortune Common Stock in accordance with directions from Plan
Participants. Capital Markets shall execute such directions directly or through
its affiliate, National Financial Services Company ("NFSC"). The provision of
brokerage services shall be subject to the following:
(1) As consideration for such
brokerage services, Fortune agrees that Capital Markets shall be entitled to
remuneration under this direction provision in an amount of no more than three
and one-fifth cents ($.032) commission on each share of Fortune Common Stock.
Any change in such remuneration may be made only by a signed agreement between
Fortune and Trustee.
(2) The Trustee will provide Fortune
with a description of Capital Markets' brokerage placement practices and a form
by which Fortune may terminate this direction to use a broker affiliated with
the Trustee. The Trustee will provide Fortune with this termination form
annually, as well as quarterly and annual reports which summarize all securities
transaction-related charges incurred by the Plan.
(3) Any successor organization of
Capital Markets, through reorganization, consolidation, merger or similar
transactions, shall, upon consummation of such transaction, become the successor
broker in accordance with the terms of this direction provision.
(4) The Trustee and Capital Markets
shall continue to rely on this direction until notified to the contrary. Fortune
reserves the right to terminate this direction upon written notice to Capital
Markets (or its successor) and the Trustee, in accordance with Section 16 of
this Agreement.
(vi) Securities Law Reports. Fortune shall be
responsible for filing all reports required under Federal or state securities
laws with respect to the Trust's ownership of Fortune Common Stock, including,
without limitation, any reports required under section 13 or 16 of the
Securities Exchange Act of 1934, and shall immediately notify the Trustee in
writing of any requirement to stop purchases or sales of Fortune Common Stock
pending the filing of any report. The Trustee shall provide to Fortune such
information on the Trust's ownership of Fortune Common Stock as Fortune may
reasonably request in order to comply with Federal or state securities laws.
(b) Voting of Shares in Fortune Stock Fund.
(i) No Trustee Discretion. Notwithstanding any other
provision of the Plans or this Agreement, the Trustee shall have no discretion
or authority to exercise any voting rights with respect to the Fortune Common
Stock held in the Fortune Stock Fund except as provided in this Section 6.
(ii) Participant Direction. Each Participant in the
Plans shall be entitled to direct the Trustee in writing or by such other means
as agreed to by the Trustee and Fortune, and the Trustee shall solicit the
direction of such Participant, as to the manner in which any voting rights of
shares attributable to the Participant's proportional interest in the Fortune
Stock Fund (vested or unvested) 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 most recent timely direction
received by the Trustee from such Participant. With respect to the voting rights
of shares of Fortune Common Stock held in the Fortune Stock Fund as to which
timely directions have not been received by the Trustee as provided in the
preceding sentence and any shares of Fortune Common Stock representing the
proportional interest in the Fortune Stock Fund which are unallocated to
accounts of Participants, 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 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. In giving directions
to the Trustee as provided herein, each Participant shall be acting as a named
fiduciary with respect to the exercise of voting rights of shares of Fortune
Common Stock in accordance with such directions.
(iii) Trustee to Communicate Voting Procedures. When
Fortune prepares for any annual or special meeting, Fortune shall notify the
Trustee at least thirty (30) days in advance of the intended record date and
shall cause a copy of all proxy solicitation materials to be sent to the
Trustee. If requested by the Trustee, Fortune shall certify to the Trustee that
the aforementioned materials represents the same information that is distributed
to shareholders of Fortune Common Stock. The Trustee will distribute or cause to
be distributed as promptly as possible to all Participants 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 Fortune) 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 Fortune will promptly
furnish to the Trustee all such communications and other materials, if any, as
are being distributed by or on behalf of Fortune. Fortune will provide the
Trustee with such information, documents and assistance as the Trustee may
reasonably request in connection with any communications or distributions to
Participants as aforesaid. This information will include the names and current
addresses of Participants and the number of shares of Fortune Common Stock
representing their proportional interest in the Fortune Stock Fund upon which
the Trustee may conclusively rely. Based on these materials, the Trustee shall
prepare a voting instruction form and will communicate or cause to be
communicated to all Participants the procedures regarding the exercise of voting
rights of shares of Fortune Common Stock held in the Fortune Stock Fund. The
form shall show the proportional interest in the number of full and fractional
shares of Fortune Common Stock credited to the Participant's accounts held in
the Fortune Stock Fund. Notwithstanding any other provision of this Section 6,
the Plan (as communicated to the Trustee by Fortune) or the Trust Agreement to
the contrary, unless Fortune or one of its affiliated organizations serves as
recordkeeper, to the extent necessary to provide Fortune or one of its
affiliated organizations as recordkeeper with information necessary accurately
to maintain records of the interest in the Plan of Participants, the Trustee
will use its best efforts (A) to keep confidential the direction (or the absence
thereof) from each Participant 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 and (B) not to divulge such direction or identity
to any person or entity, including, without limitation, Fortune, its affiliated
organizations and any director, officer, employee or agent thereof. It is the
intent of this Section 6 that Fortune, its affiliated organizations and their
directors, officers, employees and agents not be able to ascertain the direction
given (or not given) by any Participant in connection with the exercise of
voting rights of such shares.
(iv) Invalidity. If a court of competent jurisdiction
issues an opinion, order or decree which, in the opinion of counsel to Fortune
or the Trustee, will, in all or any particular circumstances; (A) 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; (B) cause any such provision or
provisions to conflict with ERISA, or (C) 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 will be given no further
force or effect in such circumstances. Except to the extent otherwise specified
in such opinion, order or decree, the Trustee will 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 will exercise such
voting rights in accordance with the most recent timely directions received from
Participants, to the extent such directions have not been invalidated. To the
extent the Trustee, in order to comply with ERISA or other applicable law,
exercises any fiduciary responsibility it may have in any circumstances 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 will take directions timely received from Participants as
being valid direction with respect to the exercise of such voting rights. In the
event that the Trustee, in its sole discretion, determines that in exercising
its fiduciary responsibility Under this Section 6(b)(iv) any relevant financial
factors bearing on the exercise of voting rights are equal or substantially
equal, the Trustee may take into account such non-financial factors as the
Trustee deems appropriate in its sole discretion.
<PAGE>
(c) Tender Offers.
(i) Tender by Trustee. Notwithstanding any other
provision of the Plan or the Trust Agreement to the contrary, the Trustee will
have no discretion or authority to tender, deposit, sell, exchange or transfer
any shares of Fortune Common Stock (which, for purposes of this Section 6, will
include any rights within the meaning of Section 6(d)) held in the Fortune Stock
Fund pursuant to any tender offer (as defined herein) except as provided in this
Section 6. For purposes of this Section 6, a "tender offer" will mean any tender
or exchange offer for or request or invitation for tenders or exchanges of
shares of Fortune Common Stock and will include, without limitation, any such
tender offer made by or on behalf of Fortune.
(ii) Participant Direction. Each Participant will be
entitled to direct the Trustee in writing or by such other means as agreed to by
the Trustee and Fortune, and the Trustee will solicit the direction of such
Participant as to the tendering, depositing, selling, exchanging or transferring
of shares of Fortune Common Stock attributable to his proportionate interest in
the Fortune Stock Fund pursuant to any tender offer, and the Trustee will
tender, deposit, sell, exchange or transfer such shares (or will not tender such
shares of Fortune Common Stock) pursuant to such tender offer in accordance with
the most recent timely direction received by the Trustee from such Participant.
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, such Participants will be deemed to have directed the Trustee that
such shares of Fortune Common Stock, subject to all provisions of the Plans, the
Trust Agreement, and applicable law, not be tendered, deposited, sold, exchanged
or transferred pursuant to such tender offer, and the Trustee will not tender,
deposit, sell, exchange or transfer any of such shares pursuant thereto. If,
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 will
(A) use its best efforts to solicit the direction of each Participant, 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 6, and (B)
exercise (or refrain from exercising) such withdrawal rights in the same manner
as will reflect the most recent timely directions received with respect to the
exercise of such withdrawal rights. The Trustee will not withdraw shares except
pursuant to a timely direction of a Participant. The Trustee will combine
fractional interests of Participants 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 in
accordance with this Section 6. In giving or being deemed to have given
directions to the Trustee as provided in this Section 6(c), each Participant
will 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
this Section 6(c) 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 6(c).
(iii) Trustee to Communicate Tender Procedures. In
the event that Fortune receives notice of the commencement of a tender offer for
Fortune Common Stock as to which Participants are entitled to give directions as
provided in this Section 6, Fortune shall notify the Trustee as soon as
administratively possible and shall cause a copy of all materials available to
Fortune to be sent to the Trustee. If requested by the Trustee, Fortune shall
certify to the Trustee that the aforementioned materials represent the same
information available to Fortune. In the event of a tender offer, the Trustee
will distribute or cause to be distributed as promptly as possible to all
Participants 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 Fortune) 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 Fortune will promptly furnish to the Trustee all such
communications and other materials, if any, as are being distributed by or on
behalf of Fortune. Fortune will provide the Trustee with such information,
documents and assistance as the Trustee may reasonably request in connection
with any communications or distributions to Participants as aforesaid. This
information will include the names and current addresses of Participants and the
number of shares of Fortune Common Stock credited to the accounts of each of
them, upon which the Trustee may conclusively rely. Based on these materials and
after consultation with Fortune, the Trustee shall prepare a tender instruction
form to be sent to each Plan Participant with an interest in the Fortune Stock
Fund containing the procedures relating to their right to give directions as
named fiduciaries to the Trustee. The tender instruction form shall show the
number of full and fractional shares of Fortune Common Stock that reflect the
Participants' proportional interest in the Fortune Stock Fund. Notwithstanding
any other provision of this Section 6, the Plan (as communicated to the Trustee
by Fortune) or the Trust Agreement to the contrary, except if Fortune or one of
its affiliated organizations serves as recordkeeper, to the extent necessary to
provide Fortune or one of its affiliated organizations with information
necessary accurately to maintain records of the interest in the Plans of
Participants, the Trustee will use it best efforts (A) to keep confidential the
direction (or the absence thereof) from each Participant with respect to any
tender offer and the identity of such Participant and (B) not to divulge such
direction or identity to any person or entity, including, without limitation,
Fortune, its affiliated organizations and any director, officer, employee or
agent thereof. It is the intent of this Section 6(c) that Fortune, its
affiliated organizations 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 with respect to any tender offer.
(iv) Invalidity. If a court of competent jurisdiction
issues an opinion, order or decree which, in the opinion of counsel to Fortune
or the Trustee, will, in all or any particular circumstances; (A) 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; (B) cause any such provision or provisions to conflict with
ERISA; or (C) 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 will be given no further force or effect in such
circumstances. Except to the extent otherwise specified in such opinion, order
or decree, the Trustee will 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 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 will act in
accordance with the most recent timely directions received from Participants to
the extent such directions have not been invalidated. To the extent the Trustee,
in order to comply with ERISA or other applicable law, 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 will take directions timely received
from Participants as being valid direction with respect to a tender offer. In
the event that the Trustee, in its sole discretion, determines that in
exercising its fiduciary responsibility under this Section 6(c)(iv) any relevant
financial factors bearing on the exercise of tender rights are equal or
substantially equal, the Trustee may take into account such non-financial
factors as the Trustee deems appropriate in its sole discretion.
(v) Proceeds of Tender. A direction by a Participant
to the Trustee to tender shares of Fortune Common Stock reflecting the
Participant's proportional interest in the Fortune Stock Fund shall not be
considered a written election under the Plan by the Participant to withdraw, or
have distributed, any or all of his withdrawable shares. The Trustee shall
credit to each proportional interest of the Participant from which the tendered
shares were taken the proceeds received by the Trustee in exchange for the
shares of Fortune Common Stock tendered from that interest. Pending receipt of
directions from the Participant or the Named Fiduciary, as provided in the Plan,
as to which of the remaining investment options the proceeds should be invested
in, the Trustee shall invest the proceeds in the investment option described the
Schedule of Investment Options provided by the Trustee and signed by Fortune and
the Trustee.
(d) Certain Rights Held in Fortune Stock Fund.
(i) Sale or Exchange of Preferred Share Purchase
Rights. If 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") become transferable separately from the shares of Fortune Common
Stock held in the Fortune Stock Fund as provided in the Plan or Trust Agreement,
Fortune agrees to purchase the rights from the Trustee as soon as practicable.
As soon as administratively feasible after the rights become separately
transferable from the shares of Fortune Common Stock, the Trustee shall, in its
sole discretion, appoint an independent financial advisor as specifically
permitted under Section 9 of this Trust Agreement. The independent financial
advisor shall be retained at the Fortune's expense for the purpose of
determining a price at which the rights shall be sold to Fortune by the Trustee.
Notwithstanding the foregoing, if prior to the sale of the rights by the Trustee
to Fortune, Fortune determines to exchange one right for a share of Fortune, the
Trustee will surrender each right that it holds in exchange for a share of
Fortune Common Stock.
(ii) Invalidity. If a court of competent
jurisdiction issues an opinion, order or decree which, in the opinion of counsel
to Fortune or the Trustee, will, in all or any particular circumstances, (A)
invalidate under ERISA or otherwise any provision or provisions of the Plans or
the Trust Agreement with respect to the sale of rights by the Trustee to Fortune
or the exchange of rights, (B) cause any such provision or provisions to
conflict with ERISA, or (C) require the Trustee not to sell to Fortune or
exchange the rights, 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 will be given no
further force or effect in such circumstances. In the event such opinion, order
or decree invalidates the sale or exchange of rights to Fortune on the basis
that the price at which the rights are valued by the independent financial
advisor does not constitute adequate consideration under ERISA, Fortune shall
purchase the rights from the Trustee for adequate consideration as set forth in
or determined pursuant to such opinion, order or decree. In the event such
opinion, order or decree invalidates the sale or exchange of rights to Fortune
for any other reason, the Trustee shall sell the rights to a person or persons
not affiliated with Fortune. If the Trustee is unable to sell the rights to a
person or persons not affiliated with Fortune, the Trustee shall then follow the
directions of Fortune as Named Fiduciary with respect to the disposition of the
rights unless it is clear on the direction's face that the actions to be taken
under the direction would be prohibited by the fiduciary duty rules of section
404(a) of ERISA or would be contrary to the terms of the Plan (as communicated
by Fortune to the Trustee in writing) or this Agreement. It is agreed that the
Trustee shall in no way be required to retain the rights
(iii) Allocation of Proceeds. Pending receipt of
directions from the Named Fiduciary or the Participant as provided in the Plan,
as to which of the remaining investment options the proceeds of the rights
should be invested in, the Trustee shall invest the proceeds in the investment
option described in the Schedule of Investment Options provided by the Trustee
and signed by Fortune and the Trustee.
Section 7. Administration of Gallaher Fund.
(a) Investment in Gallaher ADRs. Trust investments in Gallaher ADRs
shall be made via the Gallaher Fund. In order to satisfy daily Participant
exchange or withdrawal requests for transfers and payments, the Gallaher Fund
shall also include cash or short-term liquid investments in accordance with this
paragraph. Such holdings will include Colchester Street Trust: Money Market
Portfolio: Class I or such other Mutual Fund or commingled money market pool as
agreed to by Fortune and Trustee. Fortune shall, after consultation with the
Trustee, establish and communicate to the Trustee in writing a target percentage
and drift allowance for such short-term liquid investments. The Trustee shall be
responsible for ensuring that the actual cash held in the Gallaher Fund falls
within the agreed upon range over time. Each Participant's proportional interest
in the Gallaher Fund shall be measured in units of participation, rather than
numbers of Gallaher ADRs. Such units shall represent a proportionate interest in
all of the assets of the Gallaher Fund, which includes Gallaher ADRs and
short-term investments. The Trustee shall determine the NAV for each unit
outstanding of the Gallaher Fund. Valuation of the Gallaher Fund shall be based
on the NYSE closing price of the Gallaher ADRs, or if unavailable, the latest
available price as reported by the principal national securities exchange on
which the Gallaher ADRs are traded. The NAV shall be adjusted by dividends paid
on the Gallaher ADRs held in the Gallaher Fund, gains or losses realized on
sales of Gallaher ADRs, appreciation or depreciation in the market price of
those shares owned, and interest on the short-term investments held by the
Gallaher Fund, expenses that, pursuant to Fortune's direction, the Trustee
accrues from the Gallaher Fund, and commissions on sales of Gallaher ADRs.
Investments in Gallaher ADRs shall be subject to the following limitations:
(i) Acquisition Limit. No further contributions
will be invested in the Gallaher Fund, nor may any exchanges be made to the
Gallaher Fund from any of the other investment options. The proceeds of any
distribution received by the Gallaher Fund with respect to Gallaher ADRs will be
invested as directed by Participants or the Named Fiduciary in accordance with
the Plan. Nothing in this Section 7(a)(i), 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.
(ii) Sales of Gallaher ADRs. Sales of Gallaher ADRs
shall be made on the open market as necessary to maintain the target cash
percentage and drift allowance for the Gallaher Fund, provided that:
(A) If the Trustee is unable to sell the
total number of Gallaher ADRs to be sold on such day as a result of market
conditions; or
(B) If the Trustee is prohibited by the
Securities and Exchange Commission, NYSE, or any other regulatory body from
selling any or all of the Gallaher ADRs required to be sold on such day, then
the Trustee shall purchase or sell such Gallaher ADRs as soon as possible
thereafter. The Trustee may follow directions from Fortune to deviate from the
above sale procedures provided that such direction is made in writing by
Fortune.
(iii) Execution of Sales. (A) Sales of Gallaher
ADRs in the Gallaher Fund shall be made on the date on which the Trustee
receives from Fortune in good order all information and documentation necessary
to accurately effect such transactions. Exchange of units out of the Gallaher
Fund shall be made in accordance with the Schedule of Exchange Guidelines
provided by the Trustee and signed by Fortune and the Trustee. The Trustee may
follow directions from Fortune to deviate from the above sale procedures
provided that such direction is made in writing by Fortune.
(B) Use of an Affiliated Broker. Fortune
hereby directs the Trustee to use Capital Markets to provide brokerage services
in connection with any sale of Gallaher ADRs in accordance with directions from
Plan Participants. Capital Markets shall execute such directions directly or
through NFSC. The provision of brokerage services shall be subject to the
following:
(1) As consideration for such
brokerage services, Fortune agrees that Capital Markets shall be entitled to
remuneration under this direction provision in an amount of no more than three
and one-fifth cents ($.032) commission on each Gallaher ADR. Any change in such
remuneration may be made only by a signed agreement between Fortune and Trustee.
(2) The Trustee will provide Fortune
with a description of Capital Markets' brokerage placement practices and a form
by which Fortune may terminate this direction to use a broker affiliated with
the Trustee. The Trustee will provide Fortune with this termination form
annually, as well as quarterly and annual reports which summarize all securities
transaction-related charges incurred by the Plan.
(3) Any successor organization of
Capital Markets, through reorganization, consolidation, merger or similar
transactions, shall, upon the consummation of such transaction, become the
successor broker in accordance with the terms of this direction.
(4) The Trustee and Capital Markets
shall continue to rely on this direction provision until notified to the
contrary. Fortune reserves the right to terminate this direction upon written
notice to Capital Markets (or its successor) and the Trustee, in accordance with
Section 16 of this Agreement.
(b) Voting of Gallaher ADRs.
(i) No Trustee Discretion. Notwithstanding any
other provision of the Plans or the Trust Agreement to the contrary, the Trustee
will 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 7.
(ii) Participant Direction. Each Participant will be
entitled to direct the Trustee in writing, or by such other means as agreed to
by Fortune and the Trustee, and the Trustee will solicit the direction of such
Participant 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 proportionate interest in the Gallaher Fund. The Trustee will instruct
the Gallaher ADR depositary that such Gallaher ADRs be voted with respect to any
matter in accordance with the most recent timely direction received by the
Trustee from such Participant. With respect to the voting of Gallaher ADRs held
in the Gallaher Fund as to which timely directions have not been received by the
Trustee, the Trustee will 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 will combine fractional
interests of Participants 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. In
giving directions to the Trustee as provided in this Section 6(b), each
Participant will be acting as a named fiduciary with respect to the voting
rights of Gallaher ADRs in accordance with such directions pursuant to this
Section 7(b).
(iii) Trustee to Communicate Voting Procedures. In
the event that Fortune receives notice of any annual or special meeting of the
issuer of Gallaher ADRs, Fortune shall notify the Trustee as soon as
administratively feasible of the intended record date and shall cause a copy of
all related materials obtained by Fortune to be sent to the Trustee. The Trustee
will distribute or cause to be distributed as promptly as possible to all
Participants 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 Fortune will promptly
furnish to the Trustee all such communications and other materials, if any, that
it receives that are being distributed by or on behalf of Gallaher. Fortune will
use its reasonable best efforts to provide the Trustee with such information,
documents and assistance as the Trustee may reasonably request in connection
with any communications or distributions to Participants as aforesaid. This
information will include the names and current addresses of Participants and the
Gallaher ADRs representing their proportional interest in the Gallaher Fund,
upon which the Trustee may conclusively rely. Based on these materials, the
Trustee shall prepare a voting instruction form and will communicate or cause to
be communicated to all Participants the procedures regarding the exercise of
voting rights of Gallaher ADRs held in the Gallaher Fund. The form shall show
the proportional interest in the number of full and fractional shares of
Gallaher ADRs credited to the Participant's accounts held in the Gallaher Fund.
Notwithstanding any other provision of this Section 6, the Plans (as
communicated to the Trustee by Fortune) or the Trust Agreement to the contrary,
except if Fortune or one of its affiliated organizations serves as recordkeeper,
to the extent necessary to provide Fortune or one of its affiliated
organizations as recordkeeper with information necessary accurately to maintain
records of the interest in the Plans of Participants, the Trustee will use its
best efforts (A) to keep confidential the direction (or the absence thereof)
from each Participant in connection with the voting of Gallaher ADRs held in the
Gallaher Fund and the identity of such Participant, and (B) not to divulge such
direction or identity to any person or entity, including, without limitation,
Gallaher, Fortune, their affiliated organizations and any director, officer,
employee or agent thereof. It is the intention of this Section 7 that Gallaher,
Fortune, their affiliated organizations and their directors, officers, employees
and agents not be able to ascertain the direction given (or not given) by any
Participant in connection with the voting of Gallaher ADRs.
(iv) Invalidity. If a court of competent
jurisdiction issues an opinion, order or decree which, in the opinion of counsel
to Fortune or the Trustee, will, in all or any particular circumstances; (A)
invalidate under ERISA or otherwise any provision or provisions of the Plans or
the Trust Agreement with respect to the voting of Gallaher ADRs held in the
Gallaher Fund; (B) cause any such provision or provisions to conflict with
ERISA; or (C) 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 will be given no further force or effect in such
circumstances. Except to the extent otherwise specified in such opinion, order
or decree, the Trustee will have no discretion or authority in such
circumstances to provide voting instructions with respect to Gallaher ADRs held
in the Gallaher Fund, but will exercise such voting rights in accordance with
the most recent timely directions received from Participants to the extent such
directions have not been invalidated. To the extent the Trustee, in order to
comply with ERISA or other applicable law, 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, will take into account directions
timely received from Participants as being valid direction.
(c) Tendering of Gallaher ADRs.
(i) Tender by Trustee. Notwithstanding any other
provision of the Plans or the Trust Agreement to the contrary, the Trustee will
have no discretion or authority to tender, deposit, sell, exchange or transfer
any Gallaher ADRs representing the proportional interest in the Gallaher Fund
(or to give 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 7(c). For purposes of this Section 7(c), a
"tender offer" will mean any tender or exchange offer for or request or
invitation for tenders or exchanges of Gallaher ADRs (or securities underlying
the Gallaher ADRs) and will include, without limitation, any such tender offer
made by or on behalf of Gallaher Group Plc.
(ii) Participant Direction. Each Participant will be
entitled to direct the Trustee in writing, or by such other means as agreed to
by the Trustee and Fortune, and the Trustee will solicit the written direction
of such Participant as to the tendering, depositing, selling, exchanging or
transferring of Gallaher ADRs attributable to his proportionate 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 will tender, deposit, sell, exchange or transfer Gallaher
ADRs (or will not tender such Gallaher ADRs) (or will provide instructions to
the Gallaher ADR depositary with respect to securities underlying the Gallaher
ADRs) pursuant to such tender offer in accordance with the most recent timely
direction received by the Trustee from such Participant. With respect to
Gallaher ADRs held in the Gallaher Fund as to which timely directions have not
been received by the Trustee from Participants, such Participants will be deemed
to have directed the Trustee not to tender such Gallaher ADRs in the Gallaher
Fund (or to provide instructions to the Gallaher ADR depositary that securities
underlying the Gallaher ADRs not be tendered by the Gallaher ADR depositary)
subject to all provisions of the Plans, the Trust Agreement, and applicable law,
not be tendered, deposited, sold, exchanged or transferred pursuant to such
tender offer, and the Trustee will act in accordance therewith. In the event
that, under the terms of such tender offer or otherwise, any Gallaher ADRs (or
securities underlying Gallaher ADRs) tendered or deposited pursuant thereto may
be withdrawn, the Trustee will use its best efforts to solicit the direction of
each Participant 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 7(c), and the Trustee will 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 will
reflect the most recent timely directions received with respect thereto. The
Trustee will not withdraw Gallaher ADRs (or instruct the Gallaher ADR depositary
to withdraw securities underlying Gallaher ADRs) except pursuant to a timely
direction of a Participant. The Trustee will combine fractional interests of
Participants 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 in accordance with this Section
7(c). In giving or being deemed to have given directions to the Trustee as
provided in this Section 7(c), each Participant will be acting as a named
fiduciary in accordance with such directions pursuant to this Section 7(c).
(iii) Trustee to Communicate Tender Procedures. In
the event that Fortune receives notice of the commencement of a tender offer as
to which Participants are entitled to give directions as provided in this
Section 7(c), Fortune shall notify the Trustee as soon as administratively
feasible of the intended record date and shall cause a copy of all related
materials obtained by Fortune to be sent to the Trustee. In the event of such a
tender offer, the Trustee will distribute or cause to be distributed as promptly
as possible to all Participants 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 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. Fortune will use its reasonable best efforts to provide the
Trustee with such information, documents and assistance as the Trustee may
reasonably request in connection with any communications or distributions to
Participants, as aforesaid. This information will include the names and current
addresses of Participants and the Gallaher ADRs or securities underlying such
Gallaher ADRs representing their proportionate interests in the Gallaher Fund,
upon which the Trustee may conclusively rely. Based on these materials and after
consultation with Fortune, the Trustee shall prepare a tender instruction form
to be sent to each Plan Participant with an interest in the Gallaher Fund
containing the procedures relating to their right to give directions as named
fiduciaries to the Trustee. The tender instruction form shall show the number of
full and fractional Gallaher ADRs that reflect the Participants proportional
interest in the Gallaher Fund. Notwithstanding any other provision of this
Section 7(c), the Plans (as communicated to the Trustee by Fortune) or the Trust
Agreement to the contrary, except if Fortune or one of its affiliated
organizations serves as recordkeeper, to the extent necessary to provide Fortune
or one of its affiliated organizations as recordkeeper with information
necessary accurately to maintain records of the proportional interest in the
Plan of Participants, the Trustee will use its best efforts (A) to keep
confidential the direction (or the absence thereof) from each Participant with
respect to any tender offer and the identity of such Participant, and (B) not to
divulge such direction or identity to any person or entity, including, without
limitation, Gallaher, Fortune, their affiliated organizations and any director,
officer, employee or agent thereof. It is the intent of this Section 7 that
Gallaher, Fortune, their affiliated organizations 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 with respect to any tender
offer.
(iv) Invalidity. If a court of competent
jurisdiction issues an opinion, order or decree which, in the opinion of counsel
to Fortune or the Trustee, will, in all or any particular circumstances; (A)
invalidate under ERISA or otherwise any provision or provisions of the Plans or
the Trust Agreement with respect to the tendering, depositing, sale, exchange or
transfer of Gallaher ADRs (or securities underlying 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; (B) cause any such provision or provisions to conflict with
ERISA; or (C) 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 will be given no further force or effect in such circumstances.
Except to the extent otherwise specified in such opinion, order or decree, the
Trustee will 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 will act in
accordance with the most recent timely directions received from Participants to
the extent such directions have not been invalidated. To the extent the Trustee,
in order to comply with ERISA or other applicable law, 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, will take into account directions timely received from Participants as being
valid direction.
(v) Proceeds of Tender. The proceeds of any sale,
exchange or transfer of Gallaher ADRs (or securities underlying Gallaher ADRs)
will be allocated pursuant to the direction of a Participant; provided, however,
that the proceeds thereof will not be held in the Gallaher Fund.
Section 8. Investment Options.
(a) Participant Loans. (i) General Purpose Loans. The Administrator
shall act as the Trustee's agent for Participant loan notes and as such shall
(i) separately account for repayments of such loans and clearly identify such
assets as Plan assets and (ii) collect and remit all principal and interest
payments to the Trustee. To originate a Participant loan, the Plan Participant
shall direct the Trustee as to the term and amount of the loan to be made from
the Participant's individual account. Such directions shall be made by Plan
Participants by use of the exchange system maintained for such purpose by the
Trustee or its agent. The Trustee shall determine, based on the current value of
the Participant's account on the date of the request and any guidelines provided
by Fortune, the amount available for the loan. Based on the interest rate
supplied by Fortune in accordance with the terms of the Plan, the Trustee shall
advise the Participant of such interest rate, as well as the installment payment
amounts. The Trustee shall distribute the loan agreement and truth-in-lending
disclosure with the proceeds check to the Participant. To facilitate
recordkeeping, the Trustee may destroy the original of any proceeds check made
in connection with a loan to a Participant under the Plan, provided that the
Trustee or its agent first creates a duplicate by a photographic or optical
scanning or other process yielding a reasonable facsimile of the promissory note
and the Plan Participant's signature thereon, which duplicate may be reduced or
enlarged in size from the actual size of the original promissory note.
(ii) Loans for the Purchase of a Primary
Residence. The Administrator shall act as the Trustee's agent for the purpose of
holding all trust investments in Participant loan notes and related
documentation and as such shall (i) hold physical custody of and keep safe the
notes and other loan documents, (ii) separately account for repayments of such
loans and clearly identify such assets as Plan assets, (iii) collect and remit
all principal and interest payments to the Trustee, and (iv) cancel and
surrender the notes and other loan documentation when a loan has been paid in
full. To originate a Participant loan, the Plan Participant shall direct the
Trustee as to the type of loan to be made from the Participant's individual
account. Such directions shall be made by Plan Participants by use of the
exchange system maintained for such purpose by the Trustee or its agent. The
Trustee shall determine, based on the current value of the Participant's
account, the amount available for the loan. Based on the interest rate supplied
by Fortune in accordance with the terms of the Plan, the Trustee shall advise
the Participant of such interest rate, as well as the installment payment
amounts. The Trustee shall forward the loan document to the Participant for
execution and submission for approval to the Administrator. The Administrator
shall have the responsibility for approving the loan and instructing the Trustee
to send the loan proceeds to the Administrator or to the Participant if so
directed by the Administrator. In the event that approval or disapproval by the
Administrator is not made within thirty (30) days of the Participant's initial
request (the origination date), the loan shall be deemed disapproved.
(b) Outside Managed Separate Investment Funds. This Paragraph is
intended to authorize appointment of an investment manager as contemplated in
Section 402(c)(3) of ERISA.
Fortune may appoint an investment manager with respect to some or all
of the assets of the Plan. The appointment of the investment manager shall be
made by an officer of Fortune or other named fiduciary authorized by a
resolution of Fortune's Board of Directors to make such appointments. The
authority of the investment manager shall not begin until Trustee receives from
Fortune notice satisfactory to Trustee that the investment manager has been
appointed and that the investment manager has acknowledged in writing that with
respect to the relevant assets of the Fund he or she or it is a fiduciary with
respect to the Plan within the meaning of ERISA. The investment manager's
authority shall continue until Trustee receives similar notice that the
appointment has been rescinded. By notifying Trustee of the appointment of an
investment manager, Fortune shall be deemed to warrant that such investment
manager meets the requirements of Section 3(38) of ERISA, but Trustee may demand
independent evidence that any investment manager meets those requirements.
The assets with respect to which a particular investment manager has
been appointed shall be segregated from all other assets held by Trustee under
this Agreement and the investment manager shall have the duty and power to
direct Trustee in every aspect of their investment. The Trustee shall follow the
directions of an investment manager regarding the investment and reinvestment of
the Trust, or such portion thereof as shall be under management by the
investment manager, and shall be under no duty or obligation to review any
investment to be acquired, held or disposed of pursuant to such directions nor
make any recommendations with respect to the disposition or continued retention
of any such investment. The Trustee shall have no liability or responsibility
for acting without question on the direction of, or failing to act in the
absence of any direction from an investment manager, unless the trustee has
knowledge that by such action or failure to act it will be participating in or
undertaking to conceal a breach of fiduciary duty by that investment manager.
Upon request, Trustee shall execute appropriate powers of attorney authorizing
an investment manager appointed hereunder to exercise the powers and duties of
the investment manager.
Trustee may rely upon any order, certificate, notice, direction or
other documentary confirmation purporting to have been issued or given by an
investment manager which Trustee believes to be genuine and to have been issued
or given by such investment manager.
An investment manager shall certify, at the request of the Trustee, the
value of any securities or other property held in any fund managed by such
investment manager, and such certification shall be regarded as a direction with
regard to such valuation. The Trustee shall be entitled to conclusively rely
upon such valuation.
Any oral direction shall be followed by a written confirmation as soon
as practical. Trustee shall follow the procedures established by Fortune to
validate such oral directions.
(c) Reliance of Trustee on Directions.
(i) The Trustee shall not be liable for any loss, or expense
which arises from any Participant's exercise or non-exercise of rights under
this Section 8 over the assets in the Participant's accounts.
(ii) The Trustee shall not be liable for any loss or expense which
arises from the Named Fiduciary's exercise or non-exercise of rights under this
Section 8, unless it was clear on their face that the actions to be taken under
the Named Fiduciary's directions were prohibited by the fiduciary duty rules of
Section 404(a) of ERISA or were contrary to the terms of the Plan as
communicated in writing to the Trustee.
Section 9. Trustee Powers. The Trustee shall have the following powers and
authority:
(a) Subject to the provisions of this Trust Agreement, to sell,
exchange, convey, transfer, or otherwise dispose of any property held in the
Trust, by private contract or at public auction. No person dealing with the
Trustee shall be bound to see to the application of the purchase money or other
property delivered to the Trustee or to inquire into the validity, expediency,
or propriety of any such sale or other disposition.
(b) To cause any securities or other property held as part of the
Trust to be registered in the Trustee's own name, in the name of one or more of
its nominees, or in the Trustee's account with the Depository Trust Company of
New York and to hold any investments in bearer form, but the books and records
of the Trustee shall at all times show that all such investments are part of the
Trust.
(c) To keep that portion of the Trust in cash or cash balances as
Fortune may, from time to time, deem to be in the best interest of the Trust.
(d) To make, execute, acknowledge, and deliver any and all
documents of transfer or conveyance and to carry out the powers herein granted.
(e) To borrow funds from a bank not affiliated with the Trustee
in order to provide sufficient liquidity to process Plan transactions in a
timely fashion, provided that the cost of borrowing shall be allocated in a
reasonable fashion to the investment fund(s) in need of liquidity.
(f) To settle, compromise, or submit to arbitration any claims,
debts, or damages due to or arising from the Trust; to commence or defend suits
or legal or administrative proceedings; to represent the Trust in all suits and
legal and administrative hearings; and to pay all reasonable expenses arising
from any such action, from the Trust if not paid by Fortune.
(g) To employ legal, accounting, clerical, and other assistance
as may be required in carrying out the provisions of this Agreement and to pay
their reasonable expenses and compensation from the Trust if not paid by
Fortune.
(h) To invest all of any part of the assets of the Trust in
guaranteed interest contracts and short-term investments (including interest
bearing accounts with the Trustee of money market mutual funds advised by
affiliates of the Trustee) and in any collective investment trust or group
trust, including any collective investment trust or group trust maintained by
the Trustee, which then provides for the pooling of the assets of plans
described in Section 401(a) and exempt from tax under Section 501(a) of the
Code, or any comparable provisions of any future legislation that amends,
supplements, or supersedes those sections, provided that such collective
investment trust or group trust is exempt from tax under the Code or regulations
or rulings issued by the Internal Revenue Service; the provisions of the
document governing such collective investment trusts or group trusts, as it may
be amended from time to time, shall govern any investment therein and are hereby
made a part of this Trust Agreement.
(i) To do all other acts although not specifically mentioned
herein, as the Trustee may deem necessary to carry out any of the foregoing
powers and the purposes of the Trust.
Section 10. Recordkeeping and Administrative Services to Be Performed.
(a) General. The Trustee shall perform those recordkeeping and
administrative functions described in the Schedule of Administrative Services
provided by the Trustee and signed by Fortune. These recordkeeping and
administrative functions shall be performed within the framework of Fortune's
written directions regarding the Plan's provisions, guidelines and
interpretations.
(b) Accounts. The Trustee shall keep accurate accounts of all
investments, receipts, disbursements, and other transactions hereunder, and
shall report the value of the assets held in the Trust as of each Reporting
Date. Within thirty (30) days following each Reporting Date or within sixty (60)
days in the case of a Reporting Date caused by the resignation or removal of the
Trustee, or the termination of this Agreement, the Trustee shall file with
Fortune a written account setting forth all investments, receipts,
disbursements, and other transactions effected by the Trustee between the
Reporting Date and the prior Reporting Date, and setting forth the value of the
Trust as of the Reporting Date. Except as otherwise required under ERISA, upon
the expiration of six (6) months from the date of filing such account, the
Trustee shall have no liability or further accountability with respect to the
propriety of its acts or transactions shown in such account, except with respect
to such acts or transactions as to which a written objection shall have been
filed with the Trustee within such six (6) month period.
(c) Inspection and Audit. All records generated by the Trustee in
accordance with paragraphs (a) and (b) shall be open to inspection and audit,
during the Trustee's regular business hours prior to the termination of this
Agreement, by Fortune or any person designated by Fortune. Upon the resignation
or removal of the Trustee or the termination of this Agreement, the Trustee
shall provide to Fortune, at no expense to Fortune, in the format regularly
provided to Fortune, a statement of each Participant's accounts as of the
resignation, removal, or termination, and the Trustee shall provide to Fortune
or the Plan's new recordkeeper such further records as are reasonable, at
Fortune's expense.
(d) Effect of Plan Amendment. Fortune has delivered to the Trustee
confirmation that the Plans are tax qualified under the Code. The Trustee's
provision of the recordkeeping and administrative services set forth in this
Section 10 shall be conditioned on Fortune delivering to the Trustee a copy of
any amendment to the Plan as soon as administratively feasible following the
amendment's adoption, with, if requested, an IRS determination letter or an
opinion of counsel covering such amendment, and on Fortune providing the Trustee
on a timely basis with all the information Fortune deems necessary for the
Trustee to perform the recordkeeping and administrative services and such other
information as the Trustee may reasonably request.
(e) Returns, Reports and Information. Except as set forth on the
Schedule of Administrative Services and in this Agreement, Fortune shall be
responsible for the preparation and filing of all returns, reports, and
information required of the Trust or Plan by law. The Trustee shall provide
Fortune with such information as Fortune may reasonably request to make these
filings. Fortune shall also be responsible for making any disclosures to
Participants required by law, except such disclosure as may be required under
federal or state truth-in-lending laws with regard to Participant loans, which
shall be provided by the Trustee.
(f) Allocation of Plan Interests. All transfers to, withdrawals from,
or other transactions regarding the Trust shall be conducted in such a way that
the proportionate interest in the Trust of each Plan and the fair market value
of that interest may be determined at any time. Whenever the assets of more than
one Plan are commingled in the Trust or in any investment option, the undivided
interest therein of each such Plan shall be debited or credited (as the case may
be) (i) for the entire amount of every contribution received on behalf of such
Plan, every benefit payment, or other expense attributable solely to such Plan,
and every other transaction relating only to such Plan; and (ii) for its
proportionate share of every item of collected or accrued income, gain or loss,
and general expense, and of any other transactions attributable to the Trust or
that investment option as a whole.
Section 11. Compensation and Expenses. All reasonable expenses of plan
administration as shown on the Schedule of Fees provided by the Trustee and
signed by Fortune, as amended from time to time, shall be a charge against and
paid from the appropriate Plan Participants' accounts, except to the extent such
amounts are paid by Fortune in a timely manner.
All expenses of the Trustee relating directly to the acquisition and
disposition of investments constituting part of the Trust, and all taxes of any
kind whatsoever that may be levied or assessed under existing or future laws
upon or in respect of the Trust or the income thereof, shall be a charge against
and paid from the appropriate Participants' accounts.
Section 12. Directions and Indemnification.
(a) Identity of Administrator and Named Fiduciaries. The Trustee shall
be fully protected in relying on the fact that the Administrator and the Named
Fiduciaries under a Plan are the individuals or persons named as such on the
Authorization Letters signed by Fortune or on a Plan Designation Form provided
by the Trustee and signed by Fortune or such other individuals or persons as
Fortune may notify the Trustee in writing.
(b) Directions from Fortune or Administrator. Whenever Fortune or the
Administrator provides a direction to the Trustee, the Trustee shall not be
liable for any loss or expense arising from the direction if the direction is
contained in a writing (or is oral and immediately confirmed in a writing)
signed by any individual whose name and signature have been submitted (and not
withdrawn) in writing to the Trustee by Fortune provided the Trustee reasonably
believes the signature of the individual to be genuine unless it is clear on the
direction's face that the actions to be taken under the direction would be
prohibited by the fiduciary duty rules of section 404(a) of ERISA or would be
contrary to the terms of this Agreement. Such direction may also be made via
Electronic Data Transfer ("EDT") in accordance with procedures agreed to by
Fortune and the Trustee; provided, however, that the Trustee shall be fully
protected in relying on such direction as if it were a direction made in writing
by Fortune. The Trustee shall have no responsibility to ascertain any
direction's (i) accuracy, (ii) compliance with the terms of the Plan or any
applicable law, or (iii) effect for tax purposes or otherwise.
(c) Directions from Named Fiduciary. Whenever Fortune or the Named
Fiduciary provides a direction to the Trustee, the Trustee shall not be liable
for any loss or expense arising from the direction (i) if the direction is
contained in a writing (or is oral and immediately confirmed in a writing)
signed by any individual whose name and signature have been submitted (and not
withdrawn) in writing to the Trustee by the Named Fiduciary and (ii) if the
Trustee reasonably believes the signature of the individual to be genuine,
unless it is clear on the direction's face that the actions to be taken under
the direction would be prohibited by the fiduciary duty rules of section 404(a)
of ERISA or would be contrary to the terms of the Plan (as communicated by
Fortune to the Trustee in writing) or this Agreement. For purposes of this
Section, such direction may also be made via electronic data transfer (EDT) or
other electronic means in accordance with procedures agreed to by the Named
Fiduciary and the Trustee; provided, however, that the Trustee shall be fully
protected in relying on such direction as if it were a direction made in writing
by the Named Fiduciary.
(d) Co-Fiduciary Liability. In any other case, the Trustee shall not be
liable for any loss, or by reason of any breach, arising from any act or
omission of another fiduciary under the Plan except as provided in section
405(a) of ERISA. Without limiting the foregoing, the Trustee shall have no
liability for the acts or omissions of any predecessor or successor trustee.
(e) Indemnification. Fortune shall indemnify the Trustee against, and
hold the Trustee harmless from, any and all loss, damage, penalty, liability,
cost, and expense, including without limitation, reasonable attorneys' fees and
disbursements, that may be incurred by, imposed upon, or asserted against the
Trustee by reason of any claim, regulatory proceeding, or litigation arising
from any act done or omitted to be done by any individual or person with respect
to the Plan or Trust, excepting only any and all loss arising solely from the
Trustee's negligence or bad faith.
The Trustee shall indemnify Fortune against and hold Fortune
harmless from any and all such loss, damage, penalty, liability, cost, and
expense, including without limitation, reasonable attorney's fees and
disbursements, that may be incurred by, imposed upon, or asserted against
Fortune solely as a result of (i) any defects in the investment methodology
embodied in the target asset allocation or model portfolio provided through
Fidelity Portfolio PlannerSM, except to the extent that any such loss, damage,
penalty, liability, cost or expense arises from information provided by the
Participant, Fortune or third parties; or (ii) any prohibited transactions
resulting from the provision by the Trustee of Fidelity PortfolioPlanner.
(f) Survival. The provisions of this Section 12 shall survive the
termination of this Agreement.
Section 13. Resignation or Removal of Trustee.
(a) Resignation. The Trustee may resign at any time upon sixty (60)
days' notice in writing to Fortune, unless a shorter period of notice is agreed
upon by Fortune.
(b) Removal. Fortune may remove the Trustee at any time upon sixty (60)
days' notice in writing to the Trustee, unless a shorter period of notice is
agreed upon by the Trustee.
Section 14. Successor Trustee.
(a) Appointment. If the office of Trustee becomes vacant for any
reason, Fortune may in writing appoint a successor trustee under this Agreement.
The successor trustee shall have all of the rights, powers, privileges,
obligations, duties, liabilities, and immunities granted to the Trustee under
this Agreement. The successor trustee and predecessor trustee shall not be
liable for the acts or omissions of the other with respect to the Trust.
(b) Acceptance. When the successor trustee accepts its appointment
under this Agreement, title to and possession of the Trust assets shall
immediately vest in the successor trustee without any further action on the part
of the predecessor trustee. The predecessor trustee shall execute all
instruments and do all acts that reasonably may be necessary or reasonably may
be requested in writing by Fortune or the successor trustee to vest title to all
Trust assets in the successor trustee or to deliver all Trust assets to the
successor trustee.
(c) Corporate Action. Any successor of the Trustee or successor
trustee, through sale or transfer of the business or trust department of the
Trustee or successor trustee, or through reorganization, consolidation, or
merger, or any similar transaction, shall, upon consummation of the transaction,
become the successor trustee under this Agreement.
Section 15. Termination. This Agreement may be terminated at any time by Fortune
upon sixty (60) days' notice in writing to the Trustee. On the date of the
termination of this Agreement, the Trustee shall forthwith transfer and deliver
to such individual or entity as Fortune shall designate, all cash and assets
then constituting the Trust. If, by the termination date, Fortune has not
notified the Trustee in writing as to whom the assets and cash are to be
transferred and delivered, the Trustee may bring an appropriate action or
proceeding for leave to deposit the assets and cash in a court of competent
jurisdiction. The Trustee shall be reimbursed by Fortune for all costs and
expenses of the action or proceeding including, without limitation, reasonable
attorneys' fees and disbursements.
Section 16. Resignation, Removal, and Termination Notices. All notices of
resignation, removal, or termination under this Agreement must be in writing and
mailed to the party to which the notice is being given by certified or
registered mail, return receipt requested, to Fortune c/o Director, Corporate
Employee Benefits, 1700 East Putnam Avenue, Old Greenwich, Connecticut 06870,
and to the Trustee c/o Legal Department, ERISA Group, Fidelity Investments, 82
Devonshire Street, Boston, Massachusetts 02109, or to such other addresses as
the parties have notified each other of in the foregoing manner.
Section 17. Duration. This Trust shall continue in effect without limit as to
time, subject, however, to the provisions of this Agreement relating to
amendment, modification, and termination thereof.
Section 18. Amendment or Modification. This Agreement may be amended or modified
at any time and from time to time only by an instrument executed by both Fortune
and the Trustee. Notwithstanding the foregoing, to reflect increased operating
costs the Trustee may once each calendar year amend the Schedule of Fees without
Fortune's consent upon seventy-five (75) days written notice to Fortune.
Section 19. Electronic Services.
(a) The Trustee may provide communications and services via electronic
medium ("Electronic Services"), including, but not limited to, Fidelity Plan
Sponsor WebStation, Client Intranet, Client e-mail, interactive software
products or any other information provided in an electronic format. Fortune, its
agents and employees agree to keep confidential and not publish, copy,
broadcast, retransmit, reproduce, commercially exploit or otherwise
redisseminate the data, information, software or services without the Trustee's
written consent.
(b) Fortune shall be responsible for installing and maintaining all
Electronic Services on its computer network and/or Intranet upon receipt in a
manner so that the information provided via the Electronic Services will appear
in the same form and content as it appears on the form of delivery, and for any
programming required to accomplish the installation. Materials provided for Plan
Sponsor's intranet web sites shall be installed by Fortune and shall be clearly
identified as originating from Fidelity. Fortune shall promptly remove
Electronic Services from its computer network and/or Intranet, or replace the
Electronic Services with an updated service provided by the Trustee, upon
written notification (including written notification via facsimile) by the
Trustee.
(c) All Electronic Services shall be provided to Fortune without any
express or implied legal warranties or acceptance of legal liability by the
Trustee relative to the use of material or Electronic Services by Fortune. No
rights are conveyed to any property, intellectual or tangible, associated with
the contents of the Electronic Services and related material.
(d) To the extent that any Electronic Services utilize Internet
services to transport data or communications, the Trustee will take, and Fortune
agrees to follow, reasonable security precautions; however, the Trustee
disclaims any liability for interception of any such data or communications. The
Trustee shall not be responsible for, and makes no warranties regarding access,
speed or availability of Internet or network services. The Trustee shall not be
responsible for any loss or damage related to or resulting from any changes or
modifications to the electronic material after delivering it to Fortune.
Section 20. General.
(a) Performance by Trustee, its Agents or Affiliates. Fortune
acknowledges and authorizes that the services to be provided under this
Agreement shall be provided by the Trustee, its agents or affiliates, including
Fidelity Investments Institutional Operations Company or its successor, and that
certain of such services may be provided pursuant to one or more other
contractual agreements or relationships.
(b) Delegation by Employer. By authorizing the assets of any Plan as to
which it is an employer to be deposited in the Trust, each employer, other than
Fortune, hereby irrevocably delegates and grants to Fortune full and exclusive
power and authority to exercise all of the powers conferred upon Fortune and
each employer by the terms of this Agreement, and to take or refrain from taking
any and all action which such employer might otherwise take or refrain from
taking with respect to this Agreement, including the sole and exclusive power to
exercise, enforce or waive any rights whatsoever which such employer might
otherwise have with respect to the Trust, and irrevocably appoints Fortune as
its agent for all purposes under this Agreement. The Trustee shall have no
obligation to account to any such employer or to follow the instructions of or
otherwise deal with any such employer, the intention being that the Trustee
shall deal solely with Fortune.
(c) Entire Agreement. This Agreement, including the Schedules referred
to herein which are incorporated herein by reference, contains all of the terms
agreed upon between the parties with respect to the subject matter hereof.
(d) Waiver. No waiver by either party of any failure or refusal to
comply with an obligation hereunder shall be deemed a waiver of any other or
subsequent failure or refusal to so comply.
(e) Successors and Assigns. The stipulations in this Agreement shall
inure to the benefit of, and shall bind, the successors and assigns of the
respective parties.
(f) Partial Invalidity. If any term or provision of this Agreement or
the application thereof to any person or circumstances shall, to any extent, be
invalid or unenforceable, the remainder of this Agreement, or the application of
such term or provision to persons or circumstances other than those as to which
it is held invalid or unenforceable, shall not be affected thereby, and each
term and provision of this Agreement shall be valid and enforceable to the
fullest extent permitted by law.
(g) Section Headings. The headings of the various sections and
subsections of this Agreement have been inserted only for the purposes of
convenience and are not part of this Agreement and shall not be deemed in any
manner to modify, explain, expand or restrict any of the provisions of this
Agreement.
Section 21. Governing Law.
(a) Massachusetts Law Controls. This Agreement is being made in the
Commonwealth of Massachusetts, and the Trust shall be administered as a
Massachusetts trust. The validity, construction, effect, and administration of
this Agreement shall be governed by and interpreted in accordance with the laws
of the Commonwealth of Massachusetts, except to the extent those laws are
superseded under section 514 of ERISA.
(b) Trust Agreement Controls. The Trustee is not a party to the Plan,
and in the event of any conflict between the provisions of the Plan and the
provisions of this Agreement, the provisions of this Agreement shall control.
Section 22. Plan Qualification. Fortune shall be responsible for verifying that
while any assets of a particular Plan are held in the Trust, the Plan (i) is
qualified within the meaning of section 401(a) of the Code; (ii) is permitted by
existing or future rulings of the United States Treasury Department to pool its
funds in a group trust; and (iii) permits its assets to be commingled for
investment purposes with the assets of other such plans by investing such assets
in this Trust. If any Plan ceases to be qualified within the meaning of section
401(a) of the Code, Fortune shall notify the Trustee as promptly as is
reasonable. Upon receipt of such notice, the Trustee shall promptly segregate
and withdraw from the Trust, the assets which are allocable to such disqualified
Plan, and shall dispose of such assets in the manner directed by Fortune.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers as of the day and year first above
written.
FORTUNE BRANDS, INC.
Attest: Mark S. Lyon By: /s/ Gilbert L. Klemann, II
--------------- -----------------------------------------
Secretary
Name: Gilbert L. Klemann, II
--------------------------------------
Title: Executive Vice President - Corporate
--------------------------------------
Date: September 30, 1999
--------------------------------------
FIDELITY MANAGEMENT TRUST
COMPANY
Attest: Douglas O. Kant
------------------ By: /s/ Carolyn Redden
Secretary ------------------------------------------
Name: Carolyn Redden
---------------------------------------
Title: Vice President
---------------------------------------
Date: October 7, 1999
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