Exhibit 10.15
Kraft Foods Inc.
2001 Compensation Plan for Non-Employee Directors
SECTION 1. Purpose; Definitions
The purpose of the Plan is to afford each Non-Employee Director the option to
make a Deferral Election to defer the receipt of all or part of his or her
Compensation until such future date as he or she may elect pursuant to the terms
and conditions of the Plan.
For purposes of the Plan, the following terms are defined as set forth below:
a. "Allocation Date" means the date on which an amount representing all or
part of a Participant's Compensation is to be credited to his or her
Deferred Fee Account pursuant to a Deferral Election. The Allocation Date
for the Retainer Fee shall be the first day of each calendar quarter; the
Allocation Date for Meeting Fees shall be the first day of the month
following the relevant meeting.
b. "Beneficiary" means any person or entity designated as such in an
Election Form. If a Participant has not made a valid designation of a
Beneficiary on an Election Form submitted to the Secretary of the Company,
or if no designated Beneficiary survives the Participant or is in existence
on the date of the Participant's death, the Beneficiary is the
Participant's estate.
c. "Board" means the Board of Directors of the Company.
d. "Code" means the Internal Revenue Code of 1986, as amended from time to
time, and the rules and regulations thereunder.
e. "Common Stock" means the common stock of the Company.
f. "Company" means Kraft Foods Inc., a corporation organized under the
laws of the Commonwealth of Virginia, or any successor corporation.
g. "Compensation" means the Retainer Fee and the Meeting Fees payable by
the Company to each Participant.
h. "Deferral Election" means the election by a Participant on an Election
Form to defer the payment of all or a part of his or her Compensation to be
earned and payable after the applicable effective date set forth in
Sections 2.1.1 or 2.1.2.
i. "Deferred Amount" means the amount of Compensation (determined as a
percentage of the Retainer Fee and the Meeting Fees) subject to a Deferral
Election submitted to the Secretary of the Company.
j. "Deferred Fee Account" means an unfunded deferred compensation account
established by the Company on behalf of each Non-Employee Director who
makes a Deferral Election. The Company may establish more than one Deferred
Fee Account on behalf of any Non-Employee Director who submits a Modified
Election Form in accordance with Section 2.3.2 to modify his or her
election as to the Distribution Date with respect to Compensation to be
earned and payable thereafter. Each Deferred Fee Account shall consist of
one or more Subaccounts established in accordance with Section 2.2.2.
k. "Deferred Fee Program" means the program established under the
provisions of the Plan that permit Participants to defer all or part of
their Compensation.
l. "Disability" means permanent and total disability as determined under
procedures established by the Board for purposes of the Deferred Fee
Program.
m. "Distribution Date" means the date designated by a Participant on an
Election Form in accordance with Sections 2.3.1 and 2.3.2 for the payment
or commencement of payment of amounts credited to a Deferred Fee Account.
n. "Election Date" means the date an Election Form is received by the
Secretary of the Company.
o. "Election Form" means an Initial Election Form or Modified Election
Form completed and executed by the Participant. An "Initial Election Form"
means the first Election Form that the Participant submits to the Secretary
of the Company pursuant to Section 2.1.1. A "Modified Election Form" means
an Election Form that the Participant submits to the Secretary of the
Company pursuant to Section 2.1.2, 2.1.3, 2.1.4, 2.2.4, and 2.3.2 to modify
in whole or in part an Initial Election Form or to modify in whole or in
part a Modified Election Form previously submitted to the Secretary of the
Company.
p. "Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time and the rules and regulations thereunder.
q. "Extraordinary Distribution Request Date" means the date an
Extraordinary Distribution Request Form is received by the Secretary of the
Company.
r. "Extraordinary Distribution Request Form" means the Extraordinary
Distribution Request Form completed and executed by a Participant or
Beneficiary who wishes to request an extraordinary distribution of amounts
credited to a Deferred Fee Account in accordance with Section 2.3.3.
s. "Fund" means any one of the investment vehicles in which the trust fund
established under the trust agreement, as amended from time to time,
entered into by the Company (or its delegate) in connection with the
Profit-Sharing Plan, is invested.
t. "Meeting Fees" means the portion of a Participant's Compensation that
is based upon his or her attendance at Board meetings and meetings of
committees of the Board.
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u. "Non-Employee Director" means each member of the Board who is not a
full-time employee of the Company (or of any Corporation that owns,
directly or indirectly, stock possessing at least fifty percent (50%) of
the total combined voting power of all classes of stock entitled to vote in
the election of the Board or of any corporation in which the Company owns,
directly or indirectly, stock possessing at least fifty percent (50%) of
the total combined voting power of all classes of stock entitled to vote in
the election of directors in such corporation). A "Non-Employee Director"
does not include a Director Emeritus of the Company.
v. "Participant" means a Non-Employee Director who elects to make a
Deferral Election; provided, however, that a Participant shall also include
a person who was, but is no longer, a Non-Employee Director as long as a
Deferred Fee Account is being maintained for his or her benefit.
w. "Plan" means this Kraft Foods Inc. 2001 Compensation Plan for
Non-Employee Directors, as amended from time to time.
x. "Profit-Sharing Plan" means the Kraft Foods Thrift Plan, as amended
from time to time.
y. "Retainer Fee" means the portion of a Participant's Compensation that
is fixed and paid without regard to his or her attendance at meetings of
the Board or any committee of the Board, including any additional amount
paid to a chairman of a committee but shall not include awards of Common
Stock, stock options or other noncash compensation paid to a Non-Employee
Director.
z. "Subaccount" means one of the bookkeeping accounts established within a
Deferred Fee Account in accordance with Section 2.2.2.
aa. "Transfer Election Date" means the date set forth on a Transfer Form.
bb. "Transfer Form" means a Transfer Election Form completed and executed
by a Participant or Beneficiary in accordance with Section 2.2.5.
SECTION 2. Deferred Fee Program
2.1 Participation
2.1.1 Deferral Elections
A Non-Employee Director may make a Deferral Election by submitting an Initial
Election Form to the Secretary of the Company. Each Non-Employee Director who
makes a Deferral Election shall become a Participant in the Deferred Fee
Program.
Any Deferral Election relating to Retainer Fees shall be in integral multiples
of twenty-five percent (25%) of the Retainer Fee. Any Deferral Election relating
to Meeting Fees shall be one hundred percent (100%) of each Meeting Fee.
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The Participant shall indicate on the Initial Election Form:
a. the percentage of the Retainer Fee that he or she wishes to
defer and whether Meeting Fees are to be deferred;
b. the Distribution Date;
c. the Participant's Beneficiary or Beneficiaries; and
d. the Subaccounts to which the Deferred Amount is to be
allocated.
A Deferral Election submitted on an Initial Election Form shall become effective
with respect to a Participant's Retainer Fee accruing on and after the first day
of the calendar quarter following the Election Date of such Initial Election
Form; provided, however, that an Initial Election Form submitted within thirty
(30) days of an individual becoming a Non-Employee Director shall become
effective with respect to the Participant's Retainer Fee accruing on and after
the Election Date of such Initial Election Form. A Deferral Election submitted
on an Initial Election Form shall become effective with respect to a
Participant's Meeting Fees accruing on and after the first day of the calendar
month following the Election Date of such Initial Election Form; provided,
however, that an Initial Election Form submitted within thirty (30) days of an
individual becoming a Non-Employee Director shall be effective with respect to a
Participant's Meeting Fees accruing on and after the Election Date.
A Deferral Election shall remain in effect with respect to all future
Compensation until a new Deferral Election made by the Participant on a Modified
Election Form in accordance with Section 2.1.2 or Section 2.1.3 becomes
effective.
2.1.2 Change of Deferral Election.
A Participant may change his or her Deferral Election with respect to
Compensation to be earned and payable thereafter by submitting a Modified
Election Form to the Secretary of the Company.
A Modified Election Form which increases the amount of future Compensation to be
deferred shall become effective with respect to a Participant's Retainer Fee
accruing on and after the first day of the calendar quarter following the
Election Date of such Modified Election Form. A Modified Election Form to defer
Meeting Fees shall become effective with respect to a Participant's Meeting Fees
accruing on and after the first day of the calendar month following the Election
Date of such Modified Election Form.
Subject to Section 2.1.3, a Modified Election Form which decreases the amount of
future Retainer Fees to be deferred shall become effective with respect to
Compensation accruing on and after the later of (i) January 1 (and payable on
April 1) of the year following the Election Date of such Modified Election Form,
or (ii) the first day of the second calendar quarter (and payable on the first
day of the third calendar quarter) following the Election Date of such Modified
Election Form.
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2.1.3 Cessation of Deferrals
A Participant may cease to defer future Retainer Fees, Meeting Fees or both in
the Deferred Fee Program by submitting a Modified Election Form to the Secretary
of the Company. An election by a Participant to cease deferrals of Retainer
Fees, Meeting Fees or both in the Deferred Fee Program shall become effective
with respect to Compensation accruing on or after the later of (i) January 1
(and, with respect to Retainer Fees, payable on April 1) of the year following
the Election Date of such Modified Election Form, or (ii) the first day of the
second calendar quarter (and, with respect to Retainer Fees, payable on the
first day of the third calendar quarter) following the Election Date of such
Modified Election Form.
2.1.4 Beneficiary Election Modification
A Participant shall be permitted at any time to modify his or her Beneficiary
election, effective as of the Election Date, by submitting a Modified Election
Form to the Secretary of the Company.
2.2 Investments
2.2.1 Deferred Fee Accounts
The Company shall establish a Deferred Fee Account for each Participant who has
made a Deferral Election pursuant to Section 2.1.1. On each Allocation Date, the
Company shall allocate the amount of the Deferred Amount to be credited to each
Participant's Deferred Fee Account.
2.2.2 Subaccounts
The Company shall establish within each Deferred Fee Account one or more
Subaccounts to which the Deferred Amounts are to be allocated pursuant to the
Participant's Election Form or Election Forms. Such Subaccounts shall be
credited with earnings and charged with losses, if any, on the same basis as the
corresponding Fund, as the same may change from time to time. As of the date
hereof, the Subaccounts are, respectively:
A bookkeeping account whose value shall be based on a
theoretical investment in the Kraft Foods Stock Fund of the
Profit-Sharing Plan or, until such fund is established for the
Profit-Sharing Plan, a theoretical investment in Kraft Foods
common stock.
A bookkeeping account whose value shall be based on a
theoretical investment in the U.S. Obligations Fund of the
Profit-Sharing Plan.
A bookkeeping account whose value shall be based on a
theoretical investment in the Equity Index Fund of the
Profit-Sharing Plan.
A bookkeeping account whose value shall be based on a
theoretical investment in the Interest Income Fund of the
Profit-Sharing Plan.
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A bookkeeping account whose value shall be based on a
theoretical investment in the Balanced Fund of the
Profit-Sharing Plan.
A bookkeeping account whose value shall be based on a
theoretical investment in the International Equity Fund of the
Profit-Sharing Plan.
A bookkeeping account whose value shall be based on a
theoretical investment in the Growth Equity Fund of the
Profit-Sharing Plan.
A bookkeeping account whose value shall be based on a
theoretical investment in the Euro Equity Fund of the
Profit-Sharing Plan.
A bookkeeping account whose value shall be based on a
theoretical investment in the Philip Morris Stock Fund of the
Profit-Sharing Plan.
To the extent additional investment vehicles are added to the Fund, the senior
Human Resources officer of the Company is authorized to establish corresponding
Subaccounts under the Plan.
Subject to the provisions of Sections 2.2.3 and 2.2.4, on each Allocation Date,
each Participant's Subaccounts shall be credited with an amount equal to the
Deferred Amount designated by the Participant for allocation to such
Subaccounts. Each Subaccount shall be credited with earnings and charged with
losses as if the amounts allocated thereto had been invested in the
corresponding Fund.
The value of any Subaccount at any relevant time shall be determined as if all
amounts credited thereto had been invested in the corresponding Fund.
2.2.3 Investment Directions
Each Participant shall make an investment direction on his or her Initial
Election Form with respect to the portion of such Participant's Deferred Amount
that is to be allocated to a Subaccount. Any apportionment of Deferred Amounts
(and of increases or decreases in Deferred Amounts) among the Subaccounts shall
be in integral multiples of one percent (1%). An investment direction shall
become effective with respect to any Subaccount on the first day of the calendar
month following the Election Date of such Election Form. An investment direction
shall remain in effect with respect to all future Deferred Amounts until a new
investment direction made by the Participant in accordance with Section 2.2.4
becomes effective.
2.2.4 New Investment Directions
A Participant may make a new investment direction with respect to his or her
Deferred Amount only by submitting a Modified Election Form to the Secretary of
the Company. A new investment direction shall become effective with respect to
any Subaccount on the first day of the calendar month following the Election
Date of such Modified Election Form.
2.2.5 Investment Transfers
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A Participant may transfer to one or more different Subaccounts all or a part
(in integral multiples of one percent (1%)) of the amounts credited to a
Subaccount by submitting a Transfer Form to the Secretary of the Company;
provided however that no Transfer Form with respect to a transfer affecting
Subaccount D may be submitted by a Participant if a Transfer Form requesting an
opposite way transfer with respect to Subaccount D had been submitted by such
Participant within the preceding six months.
Any transfer of amounts among Subaccounts shall become effective on the first
day of the calendar month following the Transfer Election Date.
2.2 Distributions
2.3.1 Distribution Elections
Pursuant to Section 2.1.1, each Participant shall designate on his or her
Initial Election Form the Distribution Date. A Participant shall designate on
his or her Initial Election Form one of the following dates as a Distribution
Date with respect to amounts credited to his or her Deferred Fee Account
thereafter:
a. the first day of the calendar month following the date of
termination of the Participant's service as a member of the
Board; or
b. the first day of a calendar month specified by the Participant
which is at least six months after the Election Date.
A Distribution Date election shall become effective on the Election Date of such
Initial Election Form.
All distributions shall be paid in a lump sum in cash.
2.3.2 Modified Distribution Elections
A Participant may modify his or her election as to the Distribution Date with
respect to Compensation to be earned and payable thereafter by submitting a
Modified Election Form to the Secretary of the Company. No more than one such
modification shall be permitted. Any modification of a Distribution Date
election shall become effective on the Election Date of such Modified Election
Form.
2.3.3 Extraordinary Distributions
Notwithstanding the foregoing, a Participant may request an extraordinary
distribution of all or part of the amount credited to his or her Deferred Fee
Account because of hardship. A distribution shall be deemed to be "because of
hardship" if such distribution is necessary to alleviate or satisfy an immediate
and heavy financial need of the Participant.
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A request for an extraordinary distribution shall be made by submitting an
Extraordinary Distribution Request Form to the Secretary of the Company. All
extraordinary distributions shall be subject to approval by the Board.
The Extraordinary Distribution Request Form shall indicate:
a. the amount to be distributed from the Deferred Fee Account;
b. the Subaccount(s) from which the distribution is to be made;
and
c. the "hardship" requiring the distribution.
The amount of any extraordinary distribution shall not exceed the amount
determined by the Board to be required to meet the immediate financial need of
the Participant.
An extraordinary distribution shall be made with respect to amounts credited to
each Subaccount on the first day of the calendar month next following approval
of the extraordinary distribution request by the Board; provided, however, that
no extraordinary distribution shall be made from Subaccount D if a Transfer Form
pursuant to Section 2.2.5 requesting an opposite way transfer with respect to
Subaccount D had been submitted by such Participant within the preceding six
months.
SECTION 3. General Provisions
3.1 Unfunded Plan
It is intended that the Plan constitute an "unfunded" plan for deferred
compensation. The Company may authorize the creation of trusts or other
arrangements to meet the obligations created under the Plan; provided, however,
that, unless the Company otherwise determines, the existence of such trusts or
other arrangements is consistent with the "unfunded" status of the Plan.
3.2 Rules of Construction
Headings are given to the sections of the Plan solely as a convenience to
facilitate reference. The reference to any statute, regulation, or other
provision of law shall be construed to refer to any amendment to or successor of
such provision of law.
3.3 Withholding
No later than the date as of which an amount first becomes includible in the
gross income of the Participant for Federal income tax purposes under the Plan,
the Participant shall pay to the Company, or make arrangements satisfactory to
the Company regarding the payment of, any Federal, state, local or foreign taxes
of any kind required by law to be withheld with respect to such amount.
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3.4 Amendment
The Plan may be amended by the Board, but no amendment shall be made that would
impair prior rights of a Participant to his or her Deferred Fee Account without
his or her consent. No amendment may become effective until shareholder approval
is obtained if the amendment (i) materially increases the benefits accruing to
Participants under the Plan, or (ii) modifies the eligibility requirements for
participation in the Plan.
3.5 Duration of Plan
The Company hopes to continue the Plan indefinitely, but reserves the right to
terminate the Plan by appropriate action of the Board at any time. Upon
termination of the Plan, amounts then credited to each Deferred Fee Account
shall be paid in accordance with the Election Form then governing such Deferred
Fee Account or as otherwise provided in Section 2.3.1.
3.6 Assignability
No Participant or Beneficiary shall have the right to assign, pledge or
otherwise transfer any payments to which such Participant or Beneficiary may be
entitled under the Plan, other than by will or by the laws of descent and
distribution or pursuant to a domestic relations order which meets the relevant
requirements of a "qualified domestic relations order" (as defined by Section
414(p) of the Code).
3.7 Adoption of Procedures
The Secretary of the Company shall have the authority to adopt such procedures
as are appropriate to administer the Plan.
3.8 Construction
The Plan shall be construed and interpreted in accordance with Virginia law. The
Plan is intended to be construed so that participation in the Plan will be
exempt from Section 16(b) of the Exchange Act pursuant to regulations and
interpretations issued from time to time by the Securities and Exchange
Commission.
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