Exhibit 10.2
HERSHEY FOODS CORPORATION
DEFERRED COMPENSATION PLAN
(AMENDED AND RESTATED AS OF AUGUST 19, 2002)
This Deferred Compensation Plan (the "Plan") allows
participants in the following programs of Hershey Foods Corporation's Key
Employee Incentive Plan to defer receipt of all or part of their awards: (1)
cash awards under the Annual Incentive Program (the "AIP"); (2) the cash
equivalent or Common Stock of Hershey Foods Corporation (the "Company")
representing performance stock unit ("PSU") awards under the Long Term Incentive
Program ("LTIP"); and (3) awards of Common Stock of the Company pursuant to
Restricted Stock Unit ("RSU") awards under the LTIP granted on or after January
1, 2001. The Plan is intended to benefit those key executives of Hershey Foods
Corporation and subsidiaries as specified in the AIP and LTIP who participate in
the AIP or LTIP, to secure their goodwill, loyalty and achievement, and to help
attract and retain highly qualified executives.
The Compensation and Executive Organization Committee of the
Company's Board of Directors has established certain minimum stockholding
requirements for employees who are eligible to receive awards under the LTIP.
The Committee may, in its discretion, allow credit towards such requirement for
Company Common Stock constructively invested by such employee pursuant to a
vested PSU or vested RSU deferred under this Plan. Dividends previously earned,
as well as future dividends earned on deferred PSU awards and deferred RSU
awards, are eligible for deferral under the Plan.
ARTICLE I
DEFINITIONS
The following definitions apply to this Plan:
1.1 ACCOUNT. "Account" means the Account maintained by the
Company pursuant to Article II with respect to each Participant and each
Deferral Election by such Participant.
1.2 AIP. "AIP" means the Annual Incentive Program, and any similar
or successor plan or program, of the Company's Key Employee Incentive Plan and
annual incentives awarded under the Company's Sales Incentive Plan and any
successor or replacement plan thereof.
1.3 BOARD. "Board" or "Board of Directors" means the Board of
Directors of the Company.
1.4 CHANGE IN CONTROL. "Change in Control" means a Change in
Control as such term is defined under the Company's Executive Benefits
Protection Plan (Group 3A).
1.5 COMMITTEE OR COMPENSATION COMMITTEE. "Committee" or
"Compensation Committee" means the Compensation and Executive Organization
Committee of the Board or any successor committee having similar authority.
1.6 COMPANY. "Company" means Hershey Foods Corporation, a
Delaware corporation.
1.7 COMPANY COMMON STOCK OR COMMON STOCK. "Company Common Stock"
or "Common Stock" means the common stock of the Company.
1.8 DEFERRAL ELECTION. "Deferral Election" means a Participant's
election to defer all or part of the Participant's AIP, PSU or RSU award as
described in Article II.
1.9 DETERMINATION DATE. "Determination Date" means the last day
of each calendar quarter.
1.10 DISABILITY. "Disability" means a condition or circumstance
entitling a Participant to be classified as "disabled" pursuant to the Long Term
Disability program of the Company's Flexible Benefits Plan.
1.11 EBPP means, with respect to a Participant, the Company's
Employee Benefits Protection Plan (Group 2), Executive Benefits Protection Plan
(Group 3), Executive Benefits Protection Plan (Group 3A), or Severance and
Benefits Plan (Amended and Restated) as applicable to such Participant.
1.12 INVESTMENT OPTIONS. "Investment Options" means the following
investment options which are to be used as earnings indices as described in
Section 2.2:
1. Hershey Fixed Income Fund
2. American Express Cash Management Fund
3. American Express Trust Equity Index Fund I
4. Company Common Stock
Except as hereafter provided with respect to a Participant's constructive
investment in Company Common Stock: (a) the Investment Options are chosen by the
Plan Administrator and are subject to change from time to time as the Plan
Administrator, in its sole discretion, deems necessary or appropriate, and (b)
no provision of this Plan shall be construed as giving any Participant an
interest in any of these Investment Options nor shall any provision require that
the Company make any investment in any such funds. Investment Options, other
than the Company Common Stock Investment Option, may be added, modified or
deleted from time to time in the discretion of the Plan Administrator; provided,
however, that after the occurrence of a Change in Control, the Plan
Administrator shall not alter any Investment Option in effect immediately prior
to the Change in Control unless the Investment Options provided are
substantially the same as those provided to participants in the Company's
tax-qualified retirement plan having the most investment options available for
selection by participants.
1.13 LTIP. "LTIP" means the Long Term Incentive Program of the
Company's Key Employee Incentive Plan (the "KEIP") and any similar or successor
plan or program.
1.14 PARTICIPANT. "Participant" means an employee of the Company
who is eligible to participate in the AIP or LTIP, who meets the eligibility
criteria for participation in this Plan
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established by the Plan Administrator from time to time, and who elects to
participate in this Plan by filing a Deferral Election as provided in Article
II.
1.15 PLAN. "Plan" means this Hershey Foods Corporation Deferred
Compensation Plan as set forth herein and as amended from time to time.
1.16 PLAN ADMINISTRATOR. "Plan Administrator" means the Employee
Benefits Committee of the Company, or any successor committee having similar
authority, or such other individual or committee as may be determined by the
Committee from time to time.
1.17 PLAN YEAR. "Plan Year" means the calendar year.
1.18 PSU. "PSU" means performance stock units granted under the
LTIP.
1.19 RSU. "RSU" means restricted stock units granted under the
LTIP.
1.20 RETIREMENT. "Retirement" means termination of employment with
the Company after becoming eligible for retirement under the Company's
Retirement Plan.
1.21 SERP. "SERP" means the Company's Amended and Restated
(2002) Supplemental Executive Retirement Plan.
1.22 TRUST. "Trust" means the trust described in Section 7.2.
ARTICLE II
DEFERRAL ELECTIONS: ACCOUNTS
2.1 ELECTION TO DEFER.
a. AIP AWARDS. A Participant may elect under the Plan to
defer receipt of all or a portion of his or her anticipated bonus under the AIP.
A Participant's election must be made no later than November 1st of the Plan
Year in which the Participant renders the services which may result in the AIP
bonus award.
b. PSU AWARDS. A Participant may elect under the Plan to
defer receipt of all or a portion of the cash or Company Common Stock amount
earned as a PSU award under the LTIP, provided that, unless the Committee has
determined otherwise, an election to defer a cash PSU award under this Plan can
only be made if the Participant has satisfied the minimum stockholding
requirements established by the Board of Directors. A Participant's election to
defer a PSU award, whether in cash or Company Common Stock, must be made at
least sixty (60) days prior to the date the PSU award will be paid or, if
earlier, by the December 31 preceding the date such PSU award will be paid.
c. RSU AWARDS. A Participant may elect under the Plan to
defer receipt of all or a portion of the amount earned as an RSU award under the
LTIP. A Participant's election must be made at least sixty (60) days prior to
the date the RSU award will be paid or, if earlier, by the December 31
immediately preceding the date such RSU award will be paid. Upon the
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occurrence of a Change in Control, all restrictions on a Participant's RSU award
shall lapse pursuant to the terms of the KEIP.
d. CHANGE IN CONTROL ELECTION FOR EBPP PARTICIPANTS. For
each Participant who is covered by an EBPP, the Company shall, on the later of
(i) the first day of January of the year first following the year during which a
Change in Control occurs and (ii) the one hundred twentieth (120th) day
following such Change in Control, pay to him or her a lump sum cash payment
equal to the amount of his or her Account if prior to such Change in Control,
such Participant elects, in his or her sole discretion, to receive such lump sum
cash payment at such time.
e. VESTED PENSION BENEFIT. If a Participant does not elect,
pursuant to Section 2.4 of the EBPP applicable to him or her, to receive his or
her Vested Pension Benefit (as such term is defined in such EBPP), such amount
shall be deferred under the Plan in accordance with the terms of such EBPP.
f. PARTICIPANTS WHO ARE NOT EBPP PARTICIPANTS. Any
Participant who is not a participant in any EBPP shall, upon the occurrence of a
Change in Control, become fully vested in his or her Account; and for each such
Participant the Company shall, on the later of (i) the first day of January of
the year first following the year during which a Change in Control occurs and
(ii) the one hundred twentieth (120th) day following such Change in Control, pay
to him or her a lump sum cash payment equal to the amount of his or her Account
if prior to such Change in Control, such Participant elects, in his or her sole
discretion, to receive such lump sum cash payment at such time.
g. Any deferral election under this Section 2.1 shall be
made on a form supplied by the Plan Administrator. The election to defer an AIP
bonus, a PSU award or an RSU award is irrevocable except as specifically
provided otherwise in this Plan.
2.2 ACCOUNTS.
a. ESTABLISHMENT OF ACCOUNTS. Except as provided in
Section 7.2, any amounts deferred by a Participant will not be funded or set
aside for future payment by the Company. Instead, an Account will be noted for
the Participant on the Company's books. A Participant's Account will be credited
with amounts deferred and with investment credits as provided in paragraph c.
below. A separate Account will be established for each Deferral Election.
b. PARTICIPANTS AS UNSECURED CREDITORS. A Participant's
entitlement to receive the amount reflected by his or her Accounts will be based
solely on an unfunded unsecured unconditional promise to pay by the Company that
is not assignable; however, except as provided in Section 7.6 below or under the
terms of a Participant's RSU award, the Participant at all times will be fully
vested in the Accounts.
c. INVESTMENT CREDITS TO ACCOUNTS. Subject to such
limitations as may from time to time be required by law, imposed by the Plan
Administrator or as set forth in paragraph (6) below, and subject to such
operating rules and procedures as may be imposed from time to time by the Plan
Administrator, each Participant may express to the Plan Administrator a
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preference as to how the Participant's Accounts should be constructively
invested among the Investment Options; provided that, following a Change in
Control, any such preference expressed by a Participant (whether such preference
is expressed prior to, or following, a Change in Control) shall be binding upon
the Plan Administrator. Such preference shall designate the percentage of the
Participant's Accounts which is requested to be constructively invested in each
Investment Option.
(1) Any initial or subsequent expression of
investment preference shall be in writing, on a form supplied by and filed with
the Plan Administrator. Participants may change their investment preferences
effective as of the beginning of each Plan Year, or more frequently if permitted
in the discretion of the Plan Administrator; provided, however, that following a
Change in Control, Participants shall be permitted to change their investment
preferences at least as frequently as they could under procedures in effect
immediately prior to the Change in Control.
(2) Except as set forth above following a Change in
Control, all investment preferences shall be advisory only and shall not bind
the Company or the Plan Administrator and the Company shall not be obligated to
invest any funds in connection with this Plan. If, however, the Company chooses
to invest any amount to provide for its liabilities under this Plan, the Plan
Administrator shall have complete discretion as to investments and no
Participant shall have any claim on such investments as a fund to provide
benefits hereunder.
(3) From time to time, but not less frequently than
each Determination Date, the Plan Administrator shall allocate the net earnings
or losses of the Plan since the preceding Determination Date among the Accounts
of Participants, and to the extent a Participant's Investment Option preferences
are honored by the Plan Administrator, such net earnings or losses shall be
allocated as though the Accounts had been invested in the Investment Option in
accordance with the Participant's indicated preference. The "net earnings or
losses" of the Plan shall be equal to the net increase or net decrease (taking
into account any constructive dividends or interest thereon), as the case may
be, in the value of a Participant's Accounts since the last Determination Date
in accordance with the Participant's investment preferences or other such
allocation of such net increase or net decrease in the value of funds
constructively invested by the Plan Administrator and allocated to the Accounts
of Participants hereunder.
(4) If the Plan Administrator receives an initial
or revised investment preference which it deems to be incomplete, unclear or
improper, the Participant's investment preference then in effect shall remain in
effect (or, in the case of a deficiency in an initial investment preference, the
Participant shall be deemed to have filed no investment preference) until the
beginning of the next Plan Year, unless the Plan Administrator provides for, and
permits the application of, corrective action prior thereto. If a Participant
fails to file an effective investment preference, the Participant's Accounts
will be constructively invested in the American Express Cash Management Fund (or
such Investment Option designated by the Plan Administrator from time to time as
a substitute for such Fund).
(5) If the Plan Administrator determines that the
constructive value of an Account as of any date on which distributions are to be
made differs materially from the constructive value of the Account on the prior
Determination Date upon which the distribution is
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to be based, the Plan Administrator, in its discretion, shall have the right to
designate any date in the interim as a Determination Date for the purpose of
constructively revaluing the Account so that the Account from which the
distribution is being made will, prior to the distribution, reflect its share of
such material difference in value. Similarly, the Plan Administrator may adopt a
policy of providing for regular interim valuations without regard to the
materiality of changes in the value of the Accounts.
(6) The foregoing provisions of this paragraph
2.2(c) to the contrary notwithstanding: (i) prior to a Change in Control, that
portion of all deferred PSUs that is payable in Company Common Stock under the
LTIP and all deferred RSUs shall be constructively invested in Company Common
Stock; (ii) the Participant's Accounts shall be credited from time to time with
the amount of any dividends declared and paid on such Company Common Stock, and
shall be adjusted in connection with any stock dividend, split, reorganization,
liquidation or other event which affects the number of shares of Common Stock
represented by such PSUs and RSUs; and (iii) no other amounts deferred under
this Plan shall be constructively invested in Company Common Stock. Following a
Change in Control, no amounts deferred under this Plan shall be required to be
constructively invested in Company Common Stock.
d. STATEMENT OF ACCOUNTS. Within a reasonable time after
the end of each Plan Year, the Plan Administrator shall submit to each
Participant a statement of the balance in his Accounts; provided, however, that
following a Change in Control, such statement of Accounts shall be provided on
at least a quarterly basis.
2.3 CREDIT OF PRE-1995 AIP DEFERRALS TO ACCOUNTS. Participants
who previously deferred AIP awards under the deferral arrangements in effect for
awards prior to 1995 may elect as of any beginning of any Plan Year to credit
any portion of their deferral accounts under the prior arrangement to their
Accounts under this Plan. Credits shall be made to this Plan pursuant to this
Section on January 1 of the Plan Year subsequent to any such election being
made. Amounts so credited shall become part of a Participant's Accounts and
shall be subject to the terms and conditions of this Plan, except that prior
elections as to payment of deferred amounts shall remain in effect. Once amounts
are credited to a Participant's Accounts pursuant to this Section 2.3, they may
not thereafter be returned to the Participant's deferral accounts under the
prior deferral arrangement.
2.4 CREDIT OF PRE-1995 DIVIDENDS PAID ON PSU DEFERRALS TO ACCOUNTS.
Participants who previously received dividends on deferred PSU awards under the
deferral arrangements in effect for awards prior to 1995 may elect as of the
beginning of any Plan Year to credit any portion of their previously deferred
dividends under the prior arrangement to their Accounts under this Plan.
Notwithstanding the above, previously deferred PSU dividends are not eligible to
be deferred pursuant to the terms of the Plan unless the Participant has
satisfied the employee minimum stockholding requirements established by the
Committee. Credits shall be made to this Plan pursuant to this Section on the
January 1 of the Plan Year subsequent to any such election being made. Amounts
so credited shall become part of a Participant's Accounts and shall be subject
to the terms and conditions of this Plan, except that prior elections as to
payment of deferred amounts shall remain in effect. Once amounts are credited to
a Participant's Accounts
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pursuant to this Section 2.4, they may not thereafter be returned to the
Participant's deferral accounts under the prior deferral arrangement.
ARTICLE III
DISTRIBUTION OF DEFERRALS
3.1 INITIAL ELECTION OF DISTRIBUTION OPTIONS IN DEFERRAL ELECTION.
a. A Participant must specify in each of his or her
Deferral Elections when such Account will be distributed. Distribution may be
made or begin in any future Plan Year or Years, but distributions must begin not
later than the Plan Year following the calendar year in which the Participant
attains age 70. The Participant may elect to receive amounts deferred in a lump
sum or in up to ten substantially equal annual installments. A Participant may
specify different distribution dates and forms of payment under each of his or
her Deferral Elections. All amounts of a Participant's Accounts constructively
invested in Company Common Stock shall be distributed in the form of Company
Common Stock, except in the event a Change in Control occurs, in which case
amounts constructively invested in Company Common Stock shall be dealt with in
accordance with the terms of the EBPP applicable to such Participant. All other
amounts shall be distributed in cash.
b. Any provision of this Plan to the contrary
notwithstanding, all distributions hereunder shall be deferred until such time
(but not beyond the occurrence of a Change in Control unless otherwise specified
in a Participant's Deferral Election), in the discretion of the Committee, as
such distribution would not be disallowed as a deduction under Section 162(m) of
the Internal Revenue Code.
3.2 CHANGES IN DISTRIBUTION OPTIONS.
a. A Participant is entitled to one future opportunity to
further lengthen (not shorten) the deferral period provided in a Deferral
Election and to make one future change with regard to lengthening (not
shortening) the payment schedule provided in that Deferral Election up to a
maximum payment schedule of ten years.
b. Any change in the deferral period or the payment
schedule must be submitted to the Plan Administrator in writing, on a form
provided by the Plan Administrator, at least twelve months, or such shorter
period as the Plan Administrator may accept, but in no event later than the
December 31, before the date payments were originally scheduled to begin. No
change in the deferral period shall be permitted if such change would cause
payments to begin after the Plan Year following the calendar year in which the
Participant attains age 70.
3.3 PAYMENT OF DEFERRED AMOUNTS.
a. Upon the date elected by the Participant, the Company
shall begin to pay to the Participant an amount equal to the total amount then
credited to the Participant's Accounts. Such amount is to be paid either in one
lump sum or in substantially equal annual installments over a period of years as
previously elected by the Participant, which period shall be not more
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than ten years. Each annual installment shall include investment credits on the
remaining balance during the previous Plan Year until the Accounts shall have
been paid in full. A Participant may continue to express investment preferences
as provided in paragraph c of Section 2.2 during the period that an Account is
being distributed.
b. If the Participant dies before payment in full of the
amount standing to the Participant's credit in the Accounts, the unpaid balance
may be paid in one lump sum or in substantially equal installments to the
Participant's beneficiary over the remaining distribution period elected by the
Participant. If the Participant dies before the beginning date of the deferred
payment and did not indicate a specific method of distribution, then the
Participant's designated beneficiary may petition the Plan Administrator
regarding the method of distribution. In the absence of a designated
beneficiary, the balance of the Accounts will be paid in a lump sum to the
estate of the Participant as soon as possible.
c. If the Participant's employment is terminated for
any reason other than Retirement, death or Disability before the elected payment
date, then the Company, acting through the Plan Administrator, at its
discretion, but subject to any limitations set forth in the EBPP applicable to
such Participant (or any similar or successor plan or program) or any employment
agreement to which the Participant is a party or is covered, at any time
thereafter may:
(1) Immediately pay over any amounts credited to the
Participant's Accounts to the Participant; provided, however, if such
termination of employment occurs at any time following a Change in Control, the
Company and the Plan Administrator may not pay over any amounts credited to a
Participant's Accounts, unless prior to the occurrence of the Change in Control,
such Participant made an election pursuant to which such Participant consented
to receive an immediate payment of such Participant's Accounts in the event such
Participant's employment is terminated following a Change in Control for any
reason other than Retirement, death or Disability.
(2) Deposit any amounts credited to the Participant's
Accounts in a grantor trust for the Company's benefit who will manage and pay
over such amounts to the Participant in accordance with the terms of this Plan,
with administrative costs in such event being charged to the Participant's
Accounts; provided, however, that following a Change in Control, all such
administrative costs shall be borne solely by the Company.
(3) Continue to itself maintain and pay over amounts
deferred to the Participant in accordance with the terms of this Plan and the
Participant's election pursuant thereto.
d. If both the Participant and his beneficiary die
after payments to the Participant begin and before all payments are made from
the Participant's Accounts, the remaining value of the Accounts shall be
determined as of the date of death of the beneficiary or Participant, whichever
is later, and shall be paid as promptly as possible in one lump sum to the
estate of the survivor of the Participant and such beneficiary.
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e. A Participant may designate or change his or her
beneficiary (without the consent of any prior beneficiary) on a form provided by
the Plan Administrator and delivered to the Plan Administrator before the
Participant's death.
f. Subject to Section 3.1: (1) if a Participant elects
to receive amounts deferred in a lump sum or in annual installments on a date
prior to Retirement, such payments will commence or payment will be made in the
month of January of the Plan Year selected by the Participant; (2) if the
Participant elects to receive amounts deferred in a lump sum (other than amounts
deferred as Common Stock for payment in a lump sum) or in annual installments
after Retirement, such payments shall commence or payment shall be made in the
month of January of the Plan Year following the calendar year in which the
Participant retires; and (3) if a Participant elects to receive amounts deferred
as Common Stock in a lump-sum after Retirement, such payment will be made in the
month of January of the Plan Year following the calendar year in which the
Participant retires, unless an earlier date is approved by the Plan
Administrator upon application by the Participant.
g. Notwithstanding anything herein to the contrary, if, at
any time, the Company determines (based on advice of tax counsel), by reason of
legislation relating to, amendment of, or interpretation by a court or
administrative body of, the provisions of the Internal Revenue Code of 1986, as
amended, or any rules and regulations promulgated thereunder, that any amounts
deferred by a Participant under this Plan shall be currently taxable, such
Participant shall be entitled to elect to receive immediate payment of any such
deferred amounts (without any reduction other than applicable tax withholding).
3.4 HARDSHIP DISTRIBUTIONS. The Compensation Committee may, in
its discretion, accelerate payments to a Participant in an amount up to the AIP
bonus or the cash portion of a PSU award previously deferred, together with
investment credits to date, in the event of demonstrated severe financial
hardship (or any similar circumstances under which a payment would be permitted
without causing the imposition of federal income taxes on Participants' Accounts
that have not been distributed, pursuant to Revenue Procedure 92-65 or any
successor Revenue Procedure, Revenue Ruling, regulation or other applicable
administrative determination issued by the Internal Revenue Service.) Any such
payments made will be limited to the amount needed to meet the demonstrated
financial need. A Participant seeking a financial hardship withdrawal from his
or her Accounts must request a hearing with the Plan Administrator, who will
gather facts and render a report to the Compensation Committee for a decision.
3.5 OTHER WITHDRAWALS: FORFEITURE PENALTY. A Participant may,
by written request on a form provided by the Plan Administrator, withdraw all or
any portion of any of his Accounts as of any Determination Date, provided that
the Participant shall forfeit 10% of the amount withdrawn as a penalty.
3.6 WITHHOLDING. Any payments made pursuant to this Article III
shall be subject to appropriate federal, state or local income tax withholdings.
Any withholdings required in respect of a distribution of Company Common Stock
shall be deducted from other cash amounts then distributed hereunder or, if
none, from other cash compensation payable to Participant. If no other cash
compensation is then payable to the Participant then, in the discretion of the
Committee, such distribution of Company Common Stock shall be deferred until
such time as
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(a) such cash distribution or other compensation is payable to the Participant
that can be withheld hereunder, or (b) the Participant deposits with the Company
such amount of cash and/or directs the Company to withhold from such
distribution such number of shares of Company Common Stock having a fair market
value (as defined in the LTIP) equal to the amount required to satisfy such
withholding tax obligation.
ARTICLE IV
CLAIMS PROCEDURE
4.1 The following provisions are incorporated in the Plan in
accordance with the requirements of the Employee Retirement Income Security Act
of 1974:
a. The following claims procedure is hereby established:
(1) A Participant or beneficiary shall make a claim
for the benefits provided hereunder by delivering a written request to the Plan
Administrator. Upon receipt of a claim, the Plan Administrator shall determine
whether to grant the claim, deny it, or grant it in part.
(2) If a claim is wholly or partially denied, notice
of the decision, meeting the requirements of paragraph (3) following shall be
furnished to the claimant within a reasonable period of time after receipt of a
claim by the Plan Administrator.
(3) The Plan Administrator shall provide to every
claimant who is denied a claim for benefits, written notice setting forth in a
manner calculated to be understood by the claimant, the specific reason or
reasons for the denial; specific reference to pertinent Plan provisions on which
denial is based; a description of any additional material or information
necessary for the claimant to perfect the claim and an explanation of why such
material or information is necessary; and an explanation of the Plan's claim
review procedure as set forth herein.
(4) The purpose of the review procedures set forth
herein is to provide a procedure by which a claimant under the Plan may have a
reasonable opportunity to appeal a denial of a claim to the named fiduciary for
a full and fair review. To accomplish that purpose, the claimant or his duly
authorized representative may request a review upon written application to the
Committee; may review pertinent Plan documents; and may submit issues and
comments in writing. A claimant (or his duly authorized representative) shall
request a review by filing a written application for review with the Plan
Administrator at any time within sixty (60) days after receipt by the claimant
of written notice of denial of this claim.
(5) The decision on review of a denied claim shall
be made as follows. The decision on review shall be made by the Plan
Administrator, which may in its discretion hold a hearing on the denied claim.
The Plan Administrator shall make a decision promptly, and not later than sixty
(60) days after receipt of the request for review, unless special circumstances
(such as the need to hold a hearing) require an extension of time, in which
case a decision shall be rendered as soon as possible, but not later than one
hundred twenty (120) days after receipt of the request for review. The decision
on review shall be in writing and shall include specific reasons for the
decisions, written in the manner calculated to be understood by the claimant,
and
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specific references to the pertinent Plan revisions on which the decision is
based. The Plan Administrator shall have full discretion to decide the claim and
its decision on review shall be final and binding on all parties.
b. For the sole purpose of implementing the claims procedure
(and not for any other purposes), the Plan Administrator is hereby designated as
a named fiduciary of this Plan.
ARTICLE V
PLAN ADMINISTRATOR
5.1 PLAN ADMINISTRATOR DUTIES. The Plan Administrator shall
administer this Plan. All members of the committee comprising the Plan
Administrator may be Participants. A member of the committee comprising the Plan
Administrator who is a Participant may not vote on matters affecting his or her
personal benefit under this Plan, but any such individual shall otherwise be
fully entitled to act in matters arising out of or affecting this Plan
notwithstanding his or her participation herein. The Plan Administrator shall
have the authority to make, amend, interpret, and enforce all appropriate rules
and regulations for the administration of this Plan and decide or resolve any
and all questions, including interpretations of this Plan, as may arise in
connection with the Plan.
5.2 AGENTS. In the administration of this Plan, the Plan
Administrator may, from time to time, employ agents and delegate to them or to
others (including employees of the Company) such administrative duties as it
sees fit. The Plan Administrator may from time to time consult with counsel, who
may be counsel to the Company.
5.3 BINDING EFFECT OF DECISIONS. In carrying out its duties
herein, the Plan Administrator (or its designee) shall have full discretion to
exercise all powers and to make all determinations, consistent with the terms of
the Plan, in all matters entrusted to it, and its determinations shall be final
and binding on all parties.
5.4 INDEMNITY. The Company shall indemnify and hold harmless
the Plan Administrator and any employees to whom administrative duties under
this Plan are delegated, against any and all claims, loss, damage, expense, or
liability arising from any action or failure to act with respect to this Plan,
except in the case of willful misconduct.
ARTICLE VI
AMENDMENT AND TERMINATION
6.1 AMENDMENT. The Committee may at any time amend the Plan in
whole or in part. However, no amendment shall be effective to decrease or
restrict any then existing Account or to change the Company's obligations under
any then existing Deferral Election or as otherwise may be provided in an
agreement entered into between the Company and the Participant prior to the date
of such Deferral Election or the Company's Executive Benefits Protection Plan
(or any similar or successor plan or program). After the occurrence of a Change
in Control, no amendment to the Plan may be made to this Section 6.1 or to
Sections 1.11, 2.2(c), 2.2(d), 3.1(b), 3.2, 3.3, 3.4, 3.5, 6.2, 7.6 or 7.9 that
would adversely affect the rights of any Participant without the consent of such
Participant, except for such changes that the Committee reasonably
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determines, upon the advice of nationally recognized tax counsel, are necessary
to fulfill the intent of the Plan to defer federal income taxation of
Participants' Accounts until such Accounts are paid in accordance with the terms
of the Plan.
6.2 BOARD'S RIGHT TO TERMINATE. The Board may at any time
terminate the Plan in its entirety, in which event no new Deferral Elections
shall be made, but the obligations of the Company under this Plan and under
existing Deferral Elections shall continue.
ARTICLE VII
MISCELLANEOUS
7.1 UNFUNDED PLAN. This Plan is intended to be an "unfunded"
plan maintained primarily to provide deferred compensation for a "select group
of management or highly compensated employees" within the meaning of the
Employee Retirement Income Security Act of 1974, as amended, and shall be so
construed.
7.2 RABBI TRUST. The Company shall establish promptly a revocable
trust to hold assets, subject to the claims of the Company's creditors in the
event of the Company's insolvency, for the purpose of the payment of the
benefits hereunder, which shall become irrevocable upon a Change in Control. The
Company shall contribute to the Trust cash in such amounts and at such times as
are specified in this Plan and in the applicable trust agreement. Upon the
occurrence of a Change in Control, the Company shall contribute to a separate
Trust account maintained for each Participant under the Trust, in cash, an
amount equal to 100% of the value of each such Participant's Account, less any
amount credited to such Participant's Trust account as of the date of such
contribution. Amounts paid to Participants from the Trust shall discharge the
obligations of the Company hereunder to the Participants to the extent of the
payments so made.
7.3 UNSECURED GENERAL CREDITOR. This Plan is unfunded. Benefits
shall be paid from the Company's general assets. Participants and their
beneficiaries, heirs, successors, and assigns shall have no legal or equitable
rights, interest or claims in any property or assets owned or which may be
acquired by the Company. Such assets of the Company shall not be held under any
trust for the benefit of Participants, their beneficiaries, heirs, successors or
assigns, or held in any way as collateral security against the obligations of
the Company under this Plan. The Company's obligation under the Plan shall be
that of an unfunded and unsecured promise of the Company to pay money in the
future. The Company in its sole discretion, may, however, elect to provide for
its liabilities under this Plan through a trust or funding vehicle, provided,
however, that the terms of any such trust or funding vehicle shall not alter the
status of Participants and beneficiaries as mere general unsecured creditors of
the Company or otherwise cause the Plan to be funded or benefits taxable to
Participants except upon actual receipt.
7.4 NONASSIGNABILITY. Neither a Participant nor any other person
shall have any right to commute, sell, assign, transfer, pledge, anticipate,
mortgage, or otherwise encumber, transfer, hypothecate, or convey in advance of
actual receipt the amounts, if any, payable hereunder, or any part thereof. The
rights to all such amounts are expressly declared to be unassignable and
non-transferable. No part of the amounts payable shall, prior to actual payment,
be subject to seizure or sequestration for the payment of any debts, judgments,
alimony, or separate
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maintenance owed by Participants or any other person, nor be transferable by
operation of law in the event of a Participant's or any other person's
bankruptcy or insolvency, except as required by law.
7.5 NOT A CONTRACT OF EMPLOYMENT. The terms and conditions of
this Plan shall not be deemed to constitute a contract of employment between the
Company and a Participant, and a Participant shall have no rights against the
Company except as may otherwise be specifically provided herein. Moreover,
nothing in the Plan shall be deemed to give a Participant the right to be
retained in the service of the Company or to interfere with the right of the
Company to discipline or discharge an employee at any time. This foregoing
provisions of this Section 7.5 to the contrary notwithstanding, this Plan shall
not diminish any rights or increase any obligations of a Participant or the
Company under any employment agreement entered into by the Participant and the
Company prior to such Participant's Deferral Election, or after such Deferral
Election to the extent that such employment agreement specifically provides that
it shall supersede any inconsistency with the terms of this Plan.
7.6 FORFEITURE OF BENEFITS. If a Participant's employment is
terminated because of willful misfeasance or gross negligence in the performance
of his or her duties, his or her right to benefits under this Plan shall, in the
discretion of the Committee, be forfeited, and the Company shall have no further
obligation hereunder to such Participant or his or her beneficiary(ies);
provided, however, that notwithstanding any provision of the Plan, upon a Change
in Control, a Participant's AIP benefits, PSU benefits, Vested Pension Benefit
and RSU benefits deferred under the Plan (together, the "Deferred Benefits")
shall vest and be payable pursuant to the provisions of Sections 2.1, 2.2 and
2.5 of the EBPP applicable to such Participant and Section 7.IV(b) of the KEIP,
respectively, and such vested Deferred Benefits shall not be subject to
forfeiture under this Section 7.6. If a Participant is not a participant under
any EBPP or the KEIP, upon a Change in Control, Sections 2.1, 2.2 and 2.5 of the
Employee Benefits Protection Plan (Group 2) and Section 7.IV(b) of the KEIP
shall nevertheless apply to the Participant's Deferred Benefits and such
Deferred Benefits shall not be subject to forfeiture under this Section 7.6.
7.7 TERMS. Use of the masculine, feminine and neuter pronouns in
this Plan are intended to be interchangeable and use of the singular will
include the plural, unless the context clearly indicates otherwise.
7.8 CAPTIONS. The captions of the articles, sections and
paragraphs of this Plan are for convenience only and shall not control or affect
the meaning or construction of any of its provisions.
7.9 GOVERNING LAW. This Plan shall be governed by the laws of the
United States and, to the extent not preempted thereby, the laws of
Pennsylvania; provided, however, that after a Change in Control, any court or
tribunal that adjudicates any dispute, controversy or claim arising between the
Participants and the Committee, Plan Administrator, Company or any of their
delegates or successors, relating to or concerning the provisions of this Plan,
will apply a de novo standard of review to any determinations made by such
person. Such de novo standard shall apply notwithstanding the grant of full
discretion hereunder to any such person or characterization of any decision by
such person as final, binding or conclusive on any party.
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7.10 VALIDITY. The illegality or invalidity of any provision of
this Plan shall not affect its remaining parts, but this Plan shall be construed
and enforced without such illegal or invalid provisions.
7.11 NOTICE. Any notice or filing required or permitted to be
given to the Plan Administrator under the Plan shall be sufficient if in writing
and hand delivered, or sent by registered or certified mail, to:
Employee Benefits Committee
Hershey Foods Corporation
100 Crystal A Drive
Hershey, Pennsylvania 17033
Such notice shall be deemed given as of the date of delivery
or, if delivery is made by mail, as of the date shown on the postmark on the
receipt for registration or certification.
7.12 SUCCESSORS. The provisions of this Plan shall bind and inure
to the benefit of the Company and its successors and assigns. The term
successors as used herein shall include any corporation or other business entity
which shall, whether by merger, consolidation, purchase of assets, or otherwise,
acquire all or substantially all of the business or assets of the Company, and
successors of any such corporation or other business entity.
7.13 INCAPACITY. If the Plan Administrator finds that any
Participant or beneficiary to whom a benefit is payable under this Plan is
unable to care for his affairs, any payment due (unless prior claim therefore
shall have been made by a duly authorized guardian or other legal
representative) may be paid, upon appropriate indemnification of the Plan
Administrator, to any person who is charged with the support of the Participant
or beneficiary. Any such payment shall be payment for the account of the
Participant and shall be a complete discharge of any liability of the Company
under the Plan to the Participant or beneficiary.
IN WITNESS WHEREOF, the Company has caused this Deferred Compensation
Plan to be amended and restated as of the 19th day of August, 2002.
HERSHEY FOODS CORPORATION
By: /s/ Marcella K. Arline
----------------------
Marcella K. Arline
Senior Vice President, Human Resources
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