AMENDMENTS TO
THE PEPSICO SALARIED EMPLOYEES RETIREMENT PLAN,
THE PEPSICO LONG TERM SAVINGS PROGRAM,
THE PEPSICO TRANSPORTATION EMPLOYEES RETIREMENT PLAN,
THE CHESAPEAKE PENSION PLAN,
THE SEVERANCE PLAN FOR PIZZA HUT, INC. HEADQUARTERS EMPLOYEES, and
THE ERIE BOTTLING CORPORATION SALARIED EMPLOYEES
401(K) WAGE REDUCTION AND PROFIT SHARING PLAN
The attached amendments to the PepsiCo Salaried Employees Retirement Plan
(Attachment 1), the PepsiCo Long Term Savings Program (Attachment 2), the
PepsiCo Transportation Employees Retirement Plan (Attachment 3) and the
Chesapeake Pension Plan (Attachment 4) are hereby adopted and approved this
9th day of November , 1995. These amendments replace certain current pages
of these plans with the corresponding attached pages.
In addition, the amendments to the Severance Plan for Pizza Hut, Inc.
Headquarters Employees (Attachment 5), and the Erie Bottling Corporation
Salaried Employees 401(k) Wage Reduction and Profit Sharing Plan (Attachment
6), are hereby ratified and adopted this 9th day of November, 1995.
PepsiCo, Inc.
By: /s/ J. Roger King
---------------------------------
APPROVED:
By: /s/ Alan R. Rockoff
----------------------------------
Law Department
By: /s/ Sylvester Holmes
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Tax Department
ATTACHMENT 2
AMENDMENTS TO
THE PEPSICO LONG TERM SAIVNGS PROGRAM
The PepsiCo Long Term Savings Program ("Plan") is hereby amended by
replacing the current pages of the Plan identified for deletion below
with the attached replacement pages.
Article Current Pages Deleted Replacement Pages
------- --------------------- -----------------
II II-17 to II-18 II-17 to II-18
IV IV-1 to IV-2 IV-1 to IV-2
V V-3 to V-11 V-3 to V-12
VII VII-3 VII-3
IX IX-1 IX-1
Appendix B B-2 to B-3 B-2 to B-3
Appendix C C-1 C-1
The revision to Article VII is effective as soon as practicable after
October 20, 1995. The revision to Article IX is effective January 1,
1989. The revisions to Appendix B are effective as soon as practicable
after September 30, 1995. The revisions to Article C are effective
January 1, 1993. All other revisions are effective January 1, 1996.
II-17
(jj) Salary Deferral Contributions: Any Employer
contributions made to the Plan at the election of a Participant,
in lieu of cash compensation, pursuant to Section 4.1.
(kk) Severance from Service Date: An Employee's
Severance from Service Date shall occur on the earlier of:
(1) The date the Employee quits, retires, is
discharged or dies; or
(2) The first anniversary of the date the
Employee is absent from service with an Employer (with or
without pay) for any reason other than a quit, retirement,
discharge or death, such as vacation, holiday, sickness,
disability, leave of absence or layoff.
(ll) Termination of Employment: The cessation of an
Employee's employment with an Employer or other member of the
PepsiCo Organization, whether by quit, resignation, discharge,
retirement, disability or indefinite layoff. However, such term
shall not include an Authorized Leave of Absence or the transfer
from the Employment of one Employer that maintains this Plan to
another such Employer, or to employment with any other member of
the PepsiCo Organization.
(mm) Trust (or Trust Fund): The fund established
pursuant to the Trust instrument to receive and to invest amounts
credited to Participants' Accounts and from which distributions
will be made.
(nn) Trustee: The individual or corporation appointed
by the Company pursuant to the Trust instrument to hold the Trust
Fund.
(oo) Valuation Date: Each business day, except that
the Trustee may temporarily suspend valuations when it deems it to
be necessary in accordance with Section 5.2(b). In all cases,
however, there shall be a Valuation Date on the last business day
of the Plan Year.
(pp) Year of Service: Each 12-month period of service
in the period of service commencing on an Employee's Employment
Commencement Date
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and ending on his Severance from Service Date, subject to the
following special rules.
(1) If an Employee has a Severance from
Service Date as a result of a quit, discharge or retirement
and then returns to the employment of the PepsiCo
Organization within 12 months from his Severance from
Service Date, the Employee's period of severance shall be
counted as part of his period of service.
(2) If an Employee terminates employment
because of a quit, discharge or retirement (during any
other absence from service of 12 months or less) and then
returns to the employment of the PepsiCo Organization
within 12 months from the date on which he was first
absent, the Employee's period of severance shall be counted
as part of his period of service.
(3) If an Employee has a break in service (as
defined below), his Years of Service prior to such break in
service shall only be taken into account if he has a Year
of Service following his rehire (determined under the
preceding provisions of this subsection as if his
employment first commenced on his date of rehire). A
"break in service" is a 12-month period beginning on an
Employee's Severance from Service Date during which the
Employee is not credited with an Hour of Service.
2.2 Construction: The terms of this Plan shall be
construed in accordance with this section.
(a) Gender and Number: The masculine gender, where
appearing in the Plan, shall be deemed to include the feminine
gender and the singular shall include the plural, unless the
context clearly indicates to the contrary.
(b) Headings: The headings of sections and
subsections are for ease of reference only and shall not be
construed to limit or modify the detailed provisions thereof.
IV-1
ARTICLE IV
Contributions and Deferral Amounts
4.1 Elective Deferrals: An Employee who is eligible under
Section 3.1 and who has Eligible Pay may elect to defer a portion of
his Eligible Pay in accordance with the following subsections.
(a) Deferral Amount: Subject to the limitations
established by this Article, each Active Participant may defer in
any Plan Year up to 10 percent (15 percent, effective January 1,
1996) of his Eligible Pay in accordance with this section. In the
event a Participant elects to defer a portion of his Eligible Pay
under the Plan, it will be designated for contribution by the
Employer to the Trust on behalf of the Participant, and for
deposit in his Salary Deferral Account. All amounts deposited to
a Participant's Salary Deferral Account shall at all times be
fully vested.
(b) Election to Defer: Each Employee who qualifies as an
eligible Employee under Section 3.1 may elect to defer a portion
of his Eligible Pay in accordance with subsection (d). An
eligible Employee shall make this election by:
(1) Completing and returning the enrollment form,
or utilizing the telephone enrollment system, provided by
the Plan Administrator,
(2) Designating a portion of his Eligible Pay to
be contributed by his Employer to the Plan, and
(3) Indicating how such amounts are to be
invested under Section 5.2.
An eligible Employee's election under this subsection shall be
effective as soon as practicable for his Employer and shall remain
in effect until it is modified or terminated under subsection (c)
below, or until his active participation terminates in accordance
with Section 3.2(b).
(c) Changes in Deferral Election: Subject to subsection
(d), an Active Participant may elect to increase, decrease or
terminate the amount of his deferral at any
IV-2
time by completing and returning a change of election form, or
using the telephone enrollment system to designate the revised
deferral rate to be contributed to the Plan. A Participant's
election under this subsection shall be effective as soon as
practicable for his Employer.
(d) Election Procedures: To be effective, an election made
pursuant to subsection (b) or (c) above must be made in the manner
specified by the Plan Administrator. In addition, the election
shall specify the amount of the deferral desired for each Plan
Year in the form of a whole dollar amount, a percentage of
Eligible Pay, or a combination of the two as specified by the Plan
Administrator from time to time (effective prior to 1996, only the
whole dollar amount form shall be available), subject to the
limitation in subsection (a) above. Any election purporting to
defer more than the maximum percentage of Eligible Pay permitted
under subsection (a) shall be treated as an election to defer such
maximum percentage of Eligible Pay. Notwithstanding the preceding
sentence, the Plan Administrator shall not give effect to
elections that do not meet the minimum standards for completeness
and accuracy the Plan Administrator establishes from time to time.
(e) Payroll Deductions: A Participant's Salary Deferral
Contributions shall be withheld from his Eligible Pay through
automatic payroll deductions. The amount to be withheld in any
pay period shall be a ratable share of the Participant's currently
effective salary deferral election for the entire Plan Year.
Salary Deferral Contributions may not be withheld after they have
been actually or constructively received by the Participant.
4.2 Dollar Limits on Elective Deferrals: Notwithstanding
Section 4.1, a Participant's Elective Deferrals shall be limited as
provided in this section.
(a) Initial Limit: Effective for calendar years beginning
on and after January 1, 1987, a Participant's Elective Deferrals
under the Plan shall be limited to $7,000 or, if greater, the
adjusted amount in effect under Code section 402(g) for the
preceding calendar year.
(b) Additional Limit: Effective for Plan Years beginning
after 1987, a Participant's Elective Deferrals, which are made in
any calendar year to the Plan or any
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performance. Investments in this investment option are
subject to fluctuations, and there is no guarantee of
future performance. The Participant's interest in the Fund
will be denominated as "units." The value of a unit in
this Fund will fluctuate based on the performance of the
Fund. The number of units credited to a Participant will
not fluctuate based upon the performance of the Fund.
(3) The Equity-Income Fund: This Fund is
primarily invested in the Fidelity Equity-Income Fund,
which invests primarily in income-reducing stocks. The
Fund's chief objective is to provide reasonable income,
although some consideration is given to capital
appreciation. Amounts invested in this investment option
are subject to fluctuations, and there is no guarantee of
future performance. The Participant's interest in the Fund
will be denominated as "units." The value of a unit in
this Fund will fluctuate based on the performance of the
Fund. the number of units credited to a Participant will
not fluctuate based upon the performance of the Fund.
(4) The PepsiCo Capital Stock Fund: This investment
option is invested primarily in Company Stock. Earnings
will be applied primarily to the purchase of additional
share of Company Stock. The objective of the Fund is to
parallel the total return (stock price
appreciation/depreciation plus dividends) of Company
Stock. Amounts invested in this investment option are
subject to fluctuations and there is not guarantee of
future performance.
A Participant's interest in the Fund will be denominated as
"units." The initial value of a unit (as of February 29,
1992) in this Fund is $10.00 and thereafter the value of a
unit will fluctuate in response to various factors
including, but not limited to, the price of and dividends
paid on Company Stock, earnings and losses on other
investments in the Fund, the mix of assets in the Fund and
Fund expenses. The number of units credited to a
Participant's account will not fluctuate based upon the
performance of the Fund. Shares of PepsiCo Capital Stock
held in the Fund and dividends and other
V-4
distributions on PepsiCo Capital Stock are not specifically
allocated to Participant accounts. Each Participant's
investment in the PepsiCo Capital Stock Fund will be based
on the proportion of his investment in the Fund to the
total investment in the Fund of all Plan Participants.
All dividends on shares of Company Stock in the
Fund are paid to the Fund. Dividends on these shares are
added to the Fund without the purchase of additional units
in the Fund. The Trustee shall use the dividend income to
purchase additional share of Company Stock for the Fund or
to meet the cash demands of the Fund. Any Company Stock
received by the Trustee as a stock split or dividend, or as
a result of a reorganization or other recapitalization of
PepsiCo, will be added to the assets of the Fund. Any
other property (other than shares of Company Stock)
received by the Trustee may be sold by the Trustee and the
proceeds added to the fund. Any rights to subscribe to
additional shares of Company Stock shall be sold by the
Trustee and the proceeds credited to the Fund.
Participants who have invested in the Fund may
direct the Trustee how to vote (or tender, if applicable)
Company Stock. The Trustee will determine each
Participant's proportional share of the Company Stock in
the Fund (based on the number of units allocated to the
Participant's Accounts) and solicit the Participant's
instructions. The Trustee shall vote (and/or tender) this
stock according to the Participant's directions. The
Trustee shall not vote stock in the Fund for which it does
not receive directions
The Company shall assist the Trustee in
furnishing Participants investing in the PepsiCo Capital
Stock Fund with proxy materials, notices and information
statements at the time voting rights are to be exercised.
In general, the materials to be furnished Participants
shall be the same as those provided to security holders.
V-5
Shares of Company Stock will be purchased for
the Fund in the open market or in privately negotiated
transactions, at prices not in excess of the fair market
value of the Company Stock on the date of purchase. Sales
of shares will also be made in the open market or in
privately negotiated transactions at prices not lower than
the fair market value of Company Stock on the date of
sale. The Trustee, or its designated agent, may limit the
daily volume of purchases and sales to the extent it
believes it will be in the interest of Participants to do
so.
(5) The Brokerage Option:
(i) Description of Funds: This
investment option will be administered by State
Street Band and the agents it employs as securities
brokers to execute Participants' trades. This option
permits certain Participants and Beneficiaries to
invest all or a portion of their interest in the Plan
in additional choices for self-directed investment.
The Plan Administrator shall publish written rules
and procedures for the election of these additional
choices by Participants and Beneficiaries, and may
revise such rules and procedures at any time and for
any reason. The investments expected to be available
under the Brokerage Option are generally as follows:
securities traded on the New York Stock Exchange, the
American Stock Exchange and the NASDAQ exchange, and
certain mutual funds as specified by the Plan
Administrator.
(A) The following investments will
not be available through the Brokerage Option:
Non-taxable bonds; options; futures;
commodities; limited partnerships which are
unlisted on the New York or American Stock
Exchange or the NASDAQ exchange; foreign
securities which are unlisted on the New York
or American Stock Exchange or the NASDAQ
exchange; commercial paper; bank investments
(such as
V-6
certificates of deposits and bank investment
contracts); physical assets (such as coins,
art, jewelry and real estate); insurance
investment or insurance investment funds;
mutual funds not specified by the Plan
Administrator; and securities of the Company or
its subsidiaries (even if listed on the New
York or American Stock Exchange or the NASDAQ
exchange).
(B) The following trading
practices are prohibited under the Brokerage
Option: Short sales, margin trades, third
party trades, direct trades and any trades
occurring outside the procedures established by
the Plan Administrator.
(ii) Restrictions: Each Participant who
participates in the Brokerage Option shall have his
interest in the Plan reduced by any brokerage
commissions and fees (including fees charged on
account of one or more investments in a mutual fund)
payable on their individual transactions and shall
also have his interest in the Plan reduced by an
access fee (initially $4.20) for each month or part
thereof that the Participant participates in the
Brokerage Option. Such access fee will be taken from
the Plan in the following order: Security Plus Fund,
Equity-Index Fund, Equity Income Fund, PepsiCo
Capital Stock Fund and the Brokerage Option. The
Plan Administrator and its agent, are authorized to
sell securities or other assets held within a
Participant's Account for the purpose of paying the
commissions and fees described in this subsection.
Investment in the Brokerage Option is subject to the
following restrictions:
(A) To commence investing under
this program, the Participant must first be
eligible to enroll in the Brokerage Option. A
Participant is eligible to enroll if he has at
least $1,000.00 in his Participant Account;
completes and returns the
V-7
application as required by the Plan
Administrator or its agent; and his initial
transfer election into the Brokerage Option is
at least $1,000. Subsequent transfers to and
from the Brokerage Option must be at least $250
unless such transfer is to close the
Participant's account under the Brokerage
Option. All transfers to the Brokerage Option
must be from prior savings.
(B) No amounts invested either in
the Security Plus Fund or in the Guaranteed
Income Fund may be directly transferred to the
Brokerage Option, and no amounts invested
either in the Security Plus Fund or in the
Guaranteed Income Fund may be indirectly
transferred to the Brokerage Option, i.e., by
first transferring the amounts to some other
investment fund (or funds) under the Plan,
unless such amounts remain invested in the
intervening fund (or funds) for at least 3
months.
(C) Except as provided in the last
sentence of this clause (C), no security or
investment held by a Participant's account
within the Brokerage Option may be transferred
or distributed directly to the Participant.
The Participant must initially sell the
security or investment. The Trustee will place
the proceeds of such sale in a short-term
investment fund, designed to generate a money
market rate of return, within the Brokerage
Option. The proceeds will remain in such
account until the Participant instructs the
Plan Administrator or its agent to transfer all
or a portion of such proceeds into one or more
of the other separate investment options within
the Trust Fund provided that the investment
option chosen by the Participant permits
contributions. The crediting of earnings
within the short-term investment fund and the
transfer of funds to other
V-8
investment funds within the Trust Fund may be
delayed until after the settlement period for
the class of security sold by the Participant,
ranging from one to five business days.
In-kind distributions are permitted in the
event of a complete distribution of a
Participant's interest as specified under
Section 6.1 or 6.2.
(6) The Guaranteed Income Fund: This fund is
established through contractual arrangements with one or
more insurance companies or other financial institutions.
Effective January 1, 1992, the Guaranteed Income Fund no
longer accepts additional deposits. As of January 1, 1992,
two 1991 Guaranteed Income Funds contracts, both issued by
Metropolitan Life, were transferred to the Security Plus
Fund. The return on amounts that remain invested in the
Guaranteed Income Fund is determined in accordance with the
contract (or contracts) applicable to the year in which the
amounts were invested. Guarantees of principal and
interest are provided solely by the insurance company or
other financial institution issuing the contract. The
transfer of funds invested in the Guaranteed Income Fund to
other separate investment funds within the Trust Fund will
be restricted in the following manner:
(i) No amounts invested in the Guaranteed
Income Fund for any Plan Year may be transferred by a
Participant directly into the Security Plus Fund or
the Brokerage Option. No amounts invested in the
Guaranteed Income Fund for any Plan Year may be
transferred by a Participant indirectly to the
Security Plus Fund or the Brokerage Option, i.e., by
first transferring the amounts to some other
investment fund (or funds) under the Plan, unless
such amounts remain invested in the intervening fund
(or funds) for at least 3 months; and
V-9
(ii) A Participant can transfer amounts
from the Guaranteed Income Fund into some other
investment fund (or funds) under the Plan no more
than 12 times during the Plan Year.
(b) Maintaining Liquidity: Notwithstanding
subsection (a) above, for the purpose of providing liquidity in
each of the separate investment options (other than the Brokerage
Option) under the Plan, the Trustee may invest a portion of each
fund or investment option under the Plan in cash or short-term
securities. The percentage of assets held for this purpose is
normally expected to range from 2-10 percent, but under
extraordinary circumstances the percentages may be substantially
higher. Consequently, the mix of cash, securities and other
investments in each of the investment funds could vary
significantly at any given time and the performance of any
particular fund may not match the performance of the fund or
stock, as the case may be, outside the Plan. In the unlikely
event that the amount of liquid assets held by these funds is
insufficient to satisfy the immediate demand for liquidity under
the Plan, the Trustee, in consultation with the Plan
Administrator, may temporarily limit or suspend transfers of any
type (including withdrawals and distribution) to or from the
investment options specified in subsection (a). In any such case,
the Plan Administrator shall temporarily change the Plan's
Valuation Date or, in its discretion, the Valuation Date for a
specific option. During this period, contributions to any
affected option may be redirected to substitute investments chosen
by the Trustee.
(c) Procedures for Investment Directions: A
Participant may direct the investment of the amounts credited to
him under the Plan into the investment options described in
subsection (a) only in accordance with this subsection. A
Participant shall direct the investment, or change the direction
of the investment, of his future or existing investment by
directing the Plan Administrator through the telephone enrollment
system provided by the Plan Administrator for such purpose (or
through any other method made available by the Plan Administrator)
and by specifying whether the Participant's investment
instructions apply to existing savings, future contributions or
both.
V-10
(1) The Participant will have sole
responsibility for the investment of his savings and for
transfers among the available investment funds, and no
named fiduciary or other person will have any liability for
any loss or diminution in value resulting from the
Participant's exercise of such investment responsibility.
In addition, because Participants control the investment of
Participant Accounts, the Plan is intended to be covered to
the maximum extent possible by section 404(c) of ERISA and
related Department of Labor regulations, which provide that
Plan fiduciaries may be relieved of liability for any
losses that are the result of investment instructions given
by a Participant or Beneficiary.
(2) In the case of an option other than the
Brokerage Option, a Participant's investment instruction or
change in investment instruction shall take effect as of
the end of the day on which the Participant gives such
instruction or change to the Plan Administrator (or its
agent), provided the Participant executes such instruction
or change by 3:00 p.m. (Eastern time) on a business day.
If the Participant executes his instruction or change on a
Saturday, Sunday, holiday or after 3:00 p.m. (Eastern time)
on a business day, such instruction or change will become
effective on the next following business day.
(3) In the case of the Brokerage Option, a
Participant's investment instruction or change within the
Brokerage Option or fund transfers into the Brokerage
Option shall be effective in accordance with rules set
forth by the Plan Administrator consistent with the rules
that govern the exchange or fund ion which Participants
invest.
Any investment direction submitted by a Participant must specify,
in whole percentages (1 to 100), the percentage of his accounts to
be invested in any or all of the separate investment funds
maintained under the Plan. If a Participant fails to submit a
statement of direction properly directing the investment of 100
percent of his accounts, and such failure is not corrected, the
Participant shall not be eligible to participate actively, or to
V-11
continue to participate actively, in the Plan; provided, however,
that amounts previously invested pursuant to a properly executed
statement of investment direction shall continue to remain
invested in the Fund or Funds so elected. The rules for transfers
set forth in paragraphs (2) and (3) above are subject to the last
3 sentences of subsection (b) above.
(d) Miscellaneous:
(1) It is expressly permissible under this Plan
for Trust assets to be invested in qualifying employer
securities, as that term is defined in section 407(d)(5) of
ERISA, up to and including 100 percent of the total Trust
assets. If Company Stock is purchased other than on the
open market, the Company Stock shall be valued in good faith
and based on all relevant factors, including the sales
prices of such stock, as reported on the New York Stock
Exchange, on the date of purchase.
(2) The separate investment funds made
available under the Trust Fund and their rules of operation
and valuation may be changed from time to time by agreement
between the Company and the Trustee.
(3) As of each Valuation Date, the Trustee will
determine the fair market value of the assets in each
separate investment fund of the Trust Fund, relying upon
such evidence of valuation as the Trustee deems appropriate.
5.3 Adjusting Account Balances: As of the close of
business on each Valuation Date (before adjusting for contributions,
distributions and investment transfers), Participants' Accounts shall
be charged or credited with:
(a) Investment Expenses,
(b) Investment income, and
(c) Gains and losses in asset values, which have
occurred with respect to each separate option (and each separate
investment within the Brokerage Option) since the preceding
Valuation Date. Thereafter, the final Account balances as of the
Valuation Date will be determined by adjusting the amounts
determined under the
V-12
preceding sentence for contributions, distributions and
investment transfers. The allocation of Investment Expenses and
investment results as of a Valuation Date shall be in proportion
to the final Account balances in the fund or investment as of the
preceding Valuation Date. Gains and losses in assets values as
of a Valuation Date shall be determined in accordance with rules
of the Plan Administrator and may not reflect the closing values
of the assets on such Valuation Date.
VII-3
The value of the Participant's account balance and investment in the
Core Funds shall be based on the market values of such items at the
time of the Participant's Telephone Application or the issuance of the
loan, whichever is less.
7.4 Maximum Number of Outstanding Loans and Refinancing:
(a) A Participant shall not have more than one loan
outstanding from the Plan at any time. Subject to subsection
(b), no loan may be made to a Participant until the repayment of
any previous loan to such Participant.
(b) A Participant with an outstanding loan from the
Plan is eligible to apply for a refinanced loan, provided the
refinanced loan is issued at least two years (six months,
effective as soon as practicable after October 20, 1995) after
issuance of the outstanding loan. A refinanced loan shall meet
all the requirements for a loan set forth in this Article VII.
Its proceeds shall first be applied to repay the balance of the
outstanding loan, with any remainder payable to the Participant
as cash. The interest rate, fees, term and repayment schedule
applicable to a refinanced loan shall be determined without
reference to the original loan.
7.5 Effect on Participant's Investment: A loan shall
constitute a segregated investment solely of the Account of the
borrowing Participant.
(a) When initially made, a loan shall be funded from
the borrowing Participant's Core Fund investments, prorated based
on the Participant's balance in each Core Fund.
(b) All repayments of principal and related interest
and any gains and losses on a loan shall be credited to the
borrowing Participant's account. Loan repayments shall be
invested in accordance with the Participant's current investment
direction for Salary Deferral Contributions. If the Participant
does not have an investment direction in effect on the date of
the Participant's Loan Application, the Participant must provide
an investment
IX-1
ARTICLE IX
Administration
9.1 Allocation of Responsibility Among Fiduciaries for Plan
and Trust Administration: The Fiduciaries shall have only those specific
powers, duties, responsibilities, and obligations as are specifically
given them under this Plan or the Trust instrument. The Plan
Administrator shall have the sole responsibility for the administration
of the Plan, which responsibility is specifically described in this Plan
and the Trust instrument, except where an agent is appointed to perform
administrative duties as specifically agreed to by the Plan Administrator
and the agent. Subject to Section 5.2(c)(1), the Trustee shall have the
sole responsibility for the administration of the Trust and the
management of the assets held under the Trust as specifically provided in
the Trust instrument, except where an investment manager has been
appointed or as provided otherwise in the Trust instrument. Each
Fiduciary warrants that any directions given, information furnished, or
action taken by it shall be in accordance with the provisions of the Plan
or the Trust instrument, as the case may be, authorizing or providing for
such direction, information or action. Furthermore, each Fiduciary may
rely upon any direction, information or action of another Fiduciary as
being proper under this Plan or the Trust, and is not required under this
Plan or the Trust instrument to inquire into the propriety of any
direction, information or action of another Fiduciary as being proper
under this Plan or the Trust, and is not required under this Plan or the
Trust instrument to inquire into the propriety of any direction,
information or action. It is intended under this Plan and the Trust
instrument that each Fiduciary shall be responsible for the proper
exercise of its own powers, duties, responsibilities and obligations
under this Plan and the Trust instrument and shall not be responsible for
any act or failure to act of another Fiduciary. No Fiduciary guarantees
the Trust in any manner against investment loss or depreciation in asset
value.
9.2 Administration: The Plan shall be administered by the
Plan Administrator which may appoint or employ individuals to assist in
the administration of the Plan and which may appoint or employ any other
agents it deems advisable, including legal counsel, actuaries and
auditors to serve at the Plan Administrator's direction. All usual and
reasonable expenses of maintaining, operating and administering the Plan
and the Trust, including the expenses of the Plan Administrator and the
B-2
"(i) For purposes of Employees eligible under
Section B.1(a) of the Appendix, the election of a
full-time hourly Employee of KFC whose Employment
Commencement Date is before 1992 shall not be
effective until he has enrolled in his Employer's One
Plus program, and the election of a full-time hourly
Employee who is coded as a shift supervisor and whose
Employment Commencement Date is after 1991 shall not
be effective until he has attained age 21 and
completed one Year of Service.
"(ii) The election of an Employee eligible
under Appendix Section B.1(b) shall not be effective
until the first January 1 or July 1 following his
attainment of age 21 and his completion of a 12-month
period (measured as described below) in which he is
credited with at least 1,000 Hour of Service
(referred to as a `year of eligibility service').
The 12-month period between the date the Employee
first completes one Hour of Service and the first
anniversary thereof shall be used initially to
determine his eligibility to participate in the Plan;
thereafter, his eligibility to participate in the
Plan shall be determined by reference to whether he
completes 1,000 or more Hours of Service in a any
Plan Year, beginning with first Plan Year commencing
after he first completes one Hour of Service. An
employee who completes 1,000 or more Hours of Service
in both the initial 12-month eligibility computation
period and the first Plan Year commencing after he
first completes one Hour of Service shall be credited
with two years of eligibility service for purposes of
this section. Effective as soon as
B-3
practicable after September 30, 1995, the term
`payroll date' shall replace `January 1 or July' in
the first sentence of this subparagraph."
B.2 Modification to Section 4.1: For purposes of
determining the deferral amount in the case of an Active Participant
who is covered by this Article, subsections (a), (d) and (e) of Section
4.1 shall read as follows:
"(a) Deferral Amount: Subject to the limitations
established by this Article IV, each active Participant may defer
in any Plan Year up to $60 of his Eligible Pay per pay period, in
accordance with such rules and regulations as may be established
by the Plan Administrator. In the event that a Participant
elects to defer a portion of his Eligible Pay under the Plan, it
will be designated for contribution by the Employer to the Trust
on behalf of the Participant, and for deposit in his Salary
Deferral Account. All amounts deposited to a Participant's
Salary Deferral Account shall at all times be fully vested."
"(d) Election Procedures: An election made pursuant
to subsection (b) or (c) above shall be in the manner specified
by the Plan Administrator. Any election shall specify the amount
of the deferral desired as a whole dollar amount, subject to the
limitation in subsection (a) above. The Plan Administrator, in
its discretion, may give no effect to an election that does not
meet minimum standards for completeness and accuracy as the Plan
Administrator may establish."
"(e) Payroll Deductions: A Participant's Salary
Deferral Contributions shall be withheld from his Eligible Pay
through automatic payroll deductions. Salary Deferral
Contributions may not be withheld after they have been actually
or constructively received by the Participant."
C-1
ARTICLE C
Pizza Hut Hourly Employees
The terms of this Article apply to any Employee who is employed on an
hourly basis by Pizza Hut of America or its domestic locations and
subsidiaries (collectively referred to as "Pizza Hut") in any of the
following states: Alabama, Alaska, Arizona, Arkansas, California,
Colorado, District of Columbia, Florida, Georgia, Idaho, Kansas,
Kentucky, Louisiana, Maryland, Mississippi, Montana, Nebraska, Nevada,
New Mexico, North Carolina, North Dakota, Oklahoma, Oregon, South
Carolina, South Dakota, Tennessee, Texas, Utah, Virginia, Washington,
West Virginia or Wyoming.
C.1 Modifications to Section 3.1(a): For purposes of
determining the eligibility to participate in the Plan of an Employee
who is covered by this Article, the introductory language of Section
3.1(a) (the portion preceding paragraph (a)(1)) shall read as follows:
"(a) General Rule: Effective, January 1, 1993, any hourly
Employee of Pizza Hut shall be eligible to participate in the Plan
while he is a participant in the Pizza Hut Hourly Employees Retirement
Plan, i.e., not before he attains age 21 and completes 1,000 hours of
service. The following Employees or classes of Employees shall not be
eligible to participate in this Plan:"
THE PEPSICO SALARIED EMPLOYEES RETIREMENT PLAN,
THE PEPSICO LONG TERM SAVINGS PROGRAM,
THE PEPSICO TRANSPORTATION EMPLOYEES RETIREMENT PLAN,
THE CHESAPEAKE PENSION PLAN,
THE SEVERANCE PLAN FOR PIZZA HUT, INC. HEADQUARTERS EMPLOYEES, and
THE ERIE BOTTLING CORPORATION SALARIED EMPLOYEES
401(K) WAGE REDUCTION AND PROFIT SHARING PLAN
The attached amendments to the PepsiCo Salaried Employees Retirement Plan
(Attachment 1), the PepsiCo Long Term Savings Program (Attachment 2), the
PepsiCo Transportation Employees Retirement Plan (Attachment 3) and the
Chesapeake Pension Plan (Attachment 4) are hereby adopted and approved this
9th day of November , 1995. These amendments replace certain current pages
of these plans with the corresponding attached pages.
In addition, the amendments to the Severance Plan for Pizza Hut, Inc.
Headquarters Employees (Attachment 5), and the Erie Bottling Corporation
Salaried Employees 401(k) Wage Reduction and Profit Sharing Plan (Attachment
6), are hereby ratified and adopted this 9th day of November, 1995.
PepsiCo, Inc.
By: /s/ J. Roger King
---------------------------------
APPROVED:
By: /s/ Alan R. Rockoff
----------------------------------
Law Department
By: /s/ Sylvester Holmes
------------------------------
Tax Department
ATTACHMENT 2
AMENDMENTS TO
THE PEPSICO LONG TERM SAIVNGS PROGRAM
The PepsiCo Long Term Savings Program ("Plan") is hereby amended by
replacing the current pages of the Plan identified for deletion below
with the attached replacement pages.
Article Current Pages Deleted Replacement Pages
------- --------------------- -----------------
II II-17 to II-18 II-17 to II-18
IV IV-1 to IV-2 IV-1 to IV-2
V V-3 to V-11 V-3 to V-12
VII VII-3 VII-3
IX IX-1 IX-1
Appendix B B-2 to B-3 B-2 to B-3
Appendix C C-1 C-1
The revision to Article VII is effective as soon as practicable after
October 20, 1995. The revision to Article IX is effective January 1,
1989. The revisions to Appendix B are effective as soon as practicable
after September 30, 1995. The revisions to Article C are effective
January 1, 1993. All other revisions are effective January 1, 1996.
(jj) Salary Deferral Contributions: Any Employer
contributions made to the Plan at the election of a Participant,
in lieu of cash compensation, pursuant to Section 4.1.
(kk) Severance from Service Date: An Employee's
Severance from Service Date shall occur on the earlier of:
(1) The date the Employee quits, retires, is
discharged or dies; or
(2) The first anniversary of the date the
Employee is absent from service with an Employer (with or
without pay) for any reason other than a quit, retirement,
discharge or death, such as vacation, holiday, sickness,
disability, leave of absence or layoff.
(ll) Termination of Employment: The cessation of an
Employee's employment with an Employer or other member of the
PepsiCo Organization, whether by quit, resignation, discharge,
retirement, disability or indefinite layoff. However, such term
shall not include an Authorized Leave of Absence or the transfer
from the Employment of one Employer that maintains this Plan to
another such Employer, or to employment with any other member of
the PepsiCo Organization.
(mm) Trust (or Trust Fund): The fund established
pursuant to the Trust instrument to receive and to invest amounts
credited to Participants' Accounts and from which distributions
will be made.
(nn) Trustee: The individual or corporation appointed
by the Company pursuant to the Trust instrument to hold the Trust
Fund.
(oo) Valuation Date: Each business day, except that
the Trustee may temporarily suspend valuations when it deems it to
be necessary in accordance with Section 5.2(b). In all cases,
however, there shall be a Valuation Date on the last business day
of the Plan Year.
(pp) Year of Service: Each 12-month period of service
in the period of service commencing on an Employee's Employment
Commencement Date
and ending on his Severance from Service Date, subject to the
following special rules.
(1) If an Employee has a Severance from
Service Date as a result of a quit, discharge or retirement
and then returns to the employment of the PepsiCo
Organization within 12 months from his Severance from
Service Date, the Employee's period of severance shall be
counted as part of his period of service.
(2) If an Employee terminates employment
because of a quit, discharge or retirement (during any
other absence from service of 12 months or less) and then
returns to the employment of the PepsiCo Organization
within 12 months from the date on which he was first
absent, the Employee's period of severance shall be counted
as part of his period of service.
(3) If an Employee has a break in service (as
defined below), his Years of Service prior to such break in
service shall only be taken into account if he has a Year
of Service following his rehire (determined under the
preceding provisions of this subsection as if his
employment first commenced on his date of rehire). A
"break in service" is a 12-month period beginning on an
Employee's Severance from Service Date during which the
Employee is not credited with an Hour of Service.
2.2 Construction: The terms of this Plan shall be
construed in accordance with this section.
(a) Gender and Number: The masculine gender, where
appearing in the Plan, shall be deemed to include the feminine
gender and the singular shall include the plural, unless the
context clearly indicates to the contrary.
(b) Headings: The headings of sections and
subsections are for ease of reference only and shall not be
construed to limit or modify the detailed provisions thereof.
ARTICLE IV
Contributions and Deferral Amounts
4.1 Elective Deferrals: An Employee who is eligible under
Section 3.1 and who has Eligible Pay may elect to defer a portion of
his Eligible Pay in accordance with the following subsections.
(a) Deferral Amount: Subject to the limitations
established by this Article, each Active Participant may defer in
any Plan Year up to 10 percent (15 percent, effective January 1,
1996) of his Eligible Pay in accordance with this section. In the
event a Participant elects to defer a portion of his Eligible Pay
under the Plan, it will be designated for contribution by the
Employer to the Trust on behalf of the Participant, and for
deposit in his Salary Deferral Account. All amounts deposited to
a Participant's Salary Deferral Account shall at all times be
fully vested.
(b) Election to Defer: Each Employee who qualifies as an
eligible Employee under Section 3.1 may elect to defer a portion
of his Eligible Pay in accordance with subsection (d). An
eligible Employee shall make this election by:
(1) Completing and returning the enrollment form,
or utilizing the telephone enrollment system, provided by
the Plan Administrator,
(2) Designating a portion of his Eligible Pay to
be contributed by his Employer to the Plan, and
(3) Indicating how such amounts are to be
invested under Section 5.2.
An eligible Employee's election under this subsection shall be
effective as soon as practicable for his Employer and shall remain
in effect until it is modified or terminated under subsection (c)
below, or until his active participation terminates in accordance
with Section 3.2(b).
(c) Changes in Deferral Election: Subject to subsection
(d), an Active Participant may elect to increase, decrease or
terminate the amount of his deferral at any
time by completing and returning a change of election form, or
using the telephone enrollment system to designate the revised
deferral rate to be contributed to the Plan. A Participant's
election under this subsection shall be effective as soon as
practicable for his Employer.
(d) Election Procedures: To be effective, an election made
pursuant to subsection (b) or (c) above must be made in the manner
specified by the Plan Administrator. In addition, the election
shall specify the amount of the deferral desired for each Plan
Year in the form of a whole dollar amount, a percentage of
Eligible Pay, or a combination of the two as specified by the Plan
Administrator from time to time (effective prior to 1996, only the
whole dollar amount form shall be available), subject to the
limitation in subsection (a) above. Any election purporting to
defer more than the maximum percentage of Eligible Pay permitted
under subsection (a) shall be treated as an election to defer such
maximum percentage of Eligible Pay. Notwithstanding the preceding
sentence, the Plan Administrator shall not give effect to
elections that do not meet the minimum standards for completeness
and accuracy the Plan Administrator establishes from time to time.
(e) Payroll Deductions: A Participant's Salary Deferral
Contributions shall be withheld from his Eligible Pay through
automatic payroll deductions. The amount to be withheld in any
pay period shall be a ratable share of the Participant's currently
effective salary deferral election for the entire Plan Year.
Salary Deferral Contributions may not be withheld after they have
been actually or constructively received by the Participant.
4.2 Dollar Limits on Elective Deferrals: Notwithstanding
Section 4.1, a Participant's Elective Deferrals shall be limited as
provided in this section.
(a) Initial Limit: Effective for calendar years beginning
on and after January 1, 1987, a Participant's Elective Deferrals
under the Plan shall be limited to $7,000 or, if greater, the
adjusted amount in effect under Code section 402(g) for the
preceding calendar year.
(b) Additional Limit: Effective for Plan Years beginning
after 1987, a Participant's Elective Deferrals, which are made in
any calendar year to the Plan or any
performance. Investments in this investment option are
subject to fluctuations, and there is no guarantee of
future performance. The Participant's interest in the Fund
will be denominated as "units." The value of a unit in
this Fund will fluctuate based on the performance of the
Fund. The number of units credited to a Participant will
not fluctuate based upon the performance of the Fund.
(3) The Equity-Income Fund: This Fund is
primarily invested in the Fidelity Equity-Income Fund,
which invests primarily in income-reducing stocks. The
Fund's chief objective is to provide reasonable income,
although some consideration is given to capital
appreciation. Amounts invested in this investment option
are subject to fluctuations, and there is no guarantee of
future performance. The Participant's interest in the Fund
will be denominated as "units." The value of a unit in
this Fund will fluctuate based on the performance of the
Fund. the number of units credited to a Participant will
not fluctuate based upon the performance of the Fund.
(4) The PepsiCo Capital Stock Fund: This investment
option is invested primarily in Company Stock. Earnings
will be applied primarily to the purchase of additional
share of Company Stock. The objective of the Fund is to
parallel the total return (stock price
appreciation/depreciation plus dividends) of Company
Stock. Amounts invested in this investment option are
subject to fluctuations and there is not guarantee of
future performance.
A Participant's interest in the Fund will be denominated as
"units." The initial value of a unit (as of February 29,
1992) in this Fund is $10.00 and thereafter the value of a
unit will fluctuate in response to various factors
including, but not limited to, the price of and dividends
paid on Company Stock, earnings and losses on other
investments in the Fund, the mix of assets in the Fund and
Fund expenses. The number of units credited to a
Participant's account will not fluctuate based upon the
performance of the Fund. Shares of PepsiCo Capital Stock
held in the Fund and dividends and other
distributions on PepsiCo Capital Stock are not specifically
allocated to Participant accounts. Each Participant's
investment in the PepsiCo Capital Stock Fund will be based
on the proportion of his investment in the Fund to the
total investment in the Fund of all Plan Participants.
All dividends on shares of Company Stock in the
Fund are paid to the Fund. Dividends on these shares are
added to the Fund without the purchase of additional units
in the Fund. The Trustee shall use the dividend income to
purchase additional share of Company Stock for the Fund or
to meet the cash demands of the Fund. Any Company Stock
received by the Trustee as a stock split or dividend, or as
a result of a reorganization or other recapitalization of
PepsiCo, will be added to the assets of the Fund. Any
other property (other than shares of Company Stock)
received by the Trustee may be sold by the Trustee and the
proceeds added to the fund. Any rights to subscribe to
additional shares of Company Stock shall be sold by the
Trustee and the proceeds credited to the Fund.
Participants who have invested in the Fund may
direct the Trustee how to vote (or tender, if applicable)
Company Stock. The Trustee will determine each
Participant's proportional share of the Company Stock in
the Fund (based on the number of units allocated to the
Participant's Accounts) and solicit the Participant's
instructions. The Trustee shall vote (and/or tender) this
stock according to the Participant's directions. The
Trustee shall not vote stock in the Fund for which it does
not receive directions
The Company shall assist the Trustee in
furnishing Participants investing in the PepsiCo Capital
Stock Fund with proxy materials, notices and information
statements at the time voting rights are to be exercised.
In general, the materials to be furnished Participants
shall be the same as those provided to security holders.
Shares of Company Stock will be purchased for
the Fund in the open market or in privately negotiated
transactions, at prices not in excess of the fair market
value of the Company Stock on the date of purchase. Sales
of shares will also be made in the open market or in
privately negotiated transactions at prices not lower than
the fair market value of Company Stock on the date of
sale. The Trustee, or its designated agent, may limit the
daily volume of purchases and sales to the extent it
believes it will be in the interest of Participants to do
so.
(5) The Brokerage Option:
(i) Description of Funds: This
investment option will be administered by State
Street Band and the agents it employs as securities
brokers to execute Participants' trades. This option
permits certain Participants and Beneficiaries to
invest all or a portion of their interest in the Plan
in additional choices for self-directed investment.
The Plan Administrator shall publish written rules
and procedures for the election of these additional
choices by Participants and Beneficiaries, and may
revise such rules and procedures at any time and for
any reason. The investments expected to be available
under the Brokerage Option are generally as follows:
securities traded on the New York Stock Exchange, the
American Stock Exchange and the NASDAQ exchange, and
certain mutual funds as specified by the Plan
Administrator.
(A) The following investments will
not be available through the Brokerage Option:
Non-taxable bonds; options; futures;
commodities; limited partnerships which are
unlisted on the New York or American Stock
Exchange or the NASDAQ exchange; foreign
securities which are unlisted on the New York
or American Stock Exchange or the NASDAQ
exchange; commercial paper; bank investments
(such as
certificates of deposits and bank investment
contracts); physical assets (such as coins,
art, jewelry and real estate); insurance
investment or insurance investment funds;
mutual funds not specified by the Plan
Administrator; and securities of the Company or
its subsidiaries (even if listed on the New
York or American Stock Exchange or the NASDAQ
exchange).
(B) The following trading
practices are prohibited under the Brokerage
Option: Short sales, margin trades, third
party trades, direct trades and any trades
occurring outside the procedures established by
the Plan Administrator.
(ii) Restrictions: Each Participant who
participates in the Brokerage Option shall have his
interest in the Plan reduced by any brokerage
commissions and fees (including fees charged on
account of one or more investments in a mutual fund)
payable on their individual transactions and shall
also have his interest in the Plan reduced by an
access fee (initially $4.20) for each month or part
thereof that the Participant participates in the
Brokerage Option. Such access fee will be taken from
the Plan in the following order: Security Plus Fund,
Equity-Index Fund, Equity Income Fund, PepsiCo
Capital Stock Fund and the Brokerage Option. The
Plan Administrator and its agent, are authorized to
sell securities or other assets held within a
Participant's Account for the purpose of paying the
commissions and fees described in this subsection.
Investment in the Brokerage Option is subject to the
following restrictions:
(A) To commence investing under
this program, the Participant must first be
eligible to enroll in the Brokerage Option. A
Participant is eligible to enroll if he has at
least $1,000.00 in his Participant Account;
completes and returns the
application as required by the Plan
Administrator or its agent; and his initial
transfer election into the Brokerage Option is
at least $1,000. Subsequent transfers to and
from the Brokerage Option must be at least $250
unless such transfer is to close the
Participant's account under the Brokerage
Option. All transfers to the Brokerage Option
must be from prior savings.
(B) No amounts invested either in
the Security Plus Fund or in the Guaranteed
Income Fund may be directly transferred to the
Brokerage Option, and no amounts invested
either in the Security Plus Fund or in the
Guaranteed Income Fund may be indirectly
transferred to the Brokerage Option, i.e., by
first transferring the amounts to some other
investment fund (or funds) under the Plan,
unless such amounts remain invested in the
intervening fund (or funds) for at least 3
months.
(C) Except as provided in the last
sentence of this clause (C), no security or
investment held by a Participant's account
within the Brokerage Option may be transferred
or distributed directly to the Participant.
The Participant must initially sell the
security or investment. The Trustee will place
the proceeds of such sale in a short-term
investment fund, designed to generate a money
market rate of return, within the Brokerage
Option. The proceeds will remain in such
account until the Participant instructs the
Plan Administrator or its agent to transfer all
or a portion of such proceeds into one or more
of the other separate investment options within
the Trust Fund provided that the investment
option chosen by the Participant permits
contributions. The crediting of earnings
within the short-term investment fund and the
transfer of funds to other
investment funds within the Trust Fund may be
delayed until after the settlement period for
the class of security sold by the Participant,
ranging from one to five business days.
In-kind distributions are permitted in the
event of a complete distribution of a
Participant's interest as specified under
Section 6.1 or 6.2.
(6) The Guaranteed Income Fund: This fund is
established through contractual arrangements with one or
more insurance companies or other financial institutions.
Effective January 1, 1992, the Guaranteed Income Fund no
longer accepts additional deposits. As of January 1, 1992,
two 1991 Guaranteed Income Funds contracts, both issued by
Metropolitan Life, were transferred to the Security Plus
Fund. The return on amounts that remain invested in the
Guaranteed Income Fund is determined in accordance with the
contract (or contracts) applicable to the year in which the
amounts were invested. Guarantees of principal and
interest are provided solely by the insurance company or
other financial institution issuing the contract. The
transfer of funds invested in the Guaranteed Income Fund to
other separate investment funds within the Trust Fund will
be restricted in the following manner:
(i) No amounts invested in the Guaranteed
Income Fund for any Plan Year may be transferred by a
Participant directly into the Security Plus Fund or
the Brokerage Option. No amounts invested in the
Guaranteed Income Fund for any Plan Year may be
transferred by a Participant indirectly to the
Security Plus Fund or the Brokerage Option, i.e., by
first transferring the amounts to some other
investment fund (or funds) under the Plan, unless
such amounts remain invested in the intervening fund
(or funds) for at least 3 months; and
(ii) A Participant can transfer amounts
from the Guaranteed Income Fund into some other
investment fund (or funds) under the Plan no more
than 12 times during the Plan Year.
(b) Maintaining Liquidity: Notwithstanding
subsection (a) above, for the purpose of providing liquidity in
each of the separate investment options (other than the Brokerage
Option) under the Plan, the Trustee may invest a portion of each
fund or investment option under the Plan in cash or short-term
securities. The percentage of assets held for this purpose is
normally expected to range from 2-10 percent, but under
extraordinary circumstances the percentages may be substantially
higher. Consequently, the mix of cash, securities and other
investments in each of the investment funds could vary
significantly at any given time and the performance of any
particular fund may not match the performance of the fund or
stock, as the case may be, outside the Plan. In the unlikely
event that the amount of liquid assets held by these funds is
insufficient to satisfy the immediate demand for liquidity under
the Plan, the Trustee, in consultation with the Plan
Administrator, may temporarily limit or suspend transfers of any
type (including withdrawals and distribution) to or from the
investment options specified in subsection (a). In any such case,
the Plan Administrator shall temporarily change the Plan's
Valuation Date or, in its discretion, the Valuation Date for a
specific option. During this period, contributions to any
affected option may be redirected to substitute investments chosen
by the Trustee.
(c) Procedures for Investment Directions: A
Participant may direct the investment of the amounts credited to
him under the Plan into the investment options described in
subsection (a) only in accordance with this subsection. A
Participant shall direct the investment, or change the direction
of the investment, of his future or existing investment by
directing the Plan Administrator through the telephone enrollment
system provided by the Plan Administrator for such purpose (or
through any other method made available by the Plan Administrator)
and by specifying whether the Participant's investment
instructions apply to existing savings, future contributions or
both.
(1) The Participant will have sole
responsibility for the investment of his savings and for
transfers among the available investment funds, and no
named fiduciary or other person will have any liability for
any loss or diminution in value resulting from the
Participant's exercise of such investment responsibility.
In addition, because Participants control the investment of
Participant Accounts, the Plan is intended to be covered to
the maximum extent possible by section 404(c) of ERISA and
related Department of Labor regulations, which provide that
Plan fiduciaries may be relieved of liability for any
losses that are the result of investment instructions given
by a Participant or Beneficiary.
(2) In the case of an option other than the
Brokerage Option, a Participant's investment instruction or
change in investment instruction shall take effect as of
the end of the day on which the Participant gives such
instruction or change to the Plan Administrator (or its
agent), provided the Participant executes such instruction
or change by 3:00 p.m. (Eastern time) on a business day.
If the Participant executes his instruction or change on a
Saturday, Sunday, holiday or after 3:00 p.m. (Eastern time)
on a business day, such instruction or change will become
effective on the next following business day.
(3) In the case of the Brokerage Option, a
Participant's investment instruction or change within the
Brokerage Option or fund transfers into the Brokerage
Option shall be effective in accordance with rules set
forth by the Plan Administrator consistent with the rules
that govern the exchange or fund ion which Participants
invest.
Any investment direction submitted by a Participant must specify,
in whole percentages (1 to 100), the percentage of his accounts to
be invested in any or all of the separate investment funds
maintained under the Plan. If a Participant fails to submit a
statement of direction properly directing the investment of 100
percent of his accounts, and such failure is not corrected, the
Participant shall not be eligible to participate actively, or to
continue to participate actively, in the Plan; provided, however,
that amounts previously invested pursuant to a properly executed
statement of investment direction shall continue to remain
invested in the Fund or Funds so elected. The rules for transfers
set forth in paragraphs (2) and (3) above are subject to the last
3 sentences of subsection (b) above.
(d) Miscellaneous:
(1) It is expressly permissible under this Plan
for Trust assets to be invested in qualifying employer
securities, as that term is defined in section 407(d)(5) of
ERISA, up to and including 100 percent of the total Trust
assets. If Company Stock is purchased other than on the
open market, the Company Stock shall be valued in good faith
and based on all relevant factors, including the sales
prices of such stock, as reported on the New York Stock
Exchange, on the date of purchase.
(2) The separate investment funds made
available under the Trust Fund and their rules of operation
and valuation may be changed from time to time by agreement
between the Company and the Trustee.
(3) As of each Valuation Date, the Trustee will
determine the fair market value of the assets in each
separate investment fund of the Trust Fund, relying upon
such evidence of valuation as the Trustee deems appropriate.
5.3 Adjusting Account Balances: As of the close of
business on each Valuation Date (before adjusting for contributions,
distributions and investment transfers), Participants' Accounts shall
be charged or credited with:
(a) Investment Expenses,
(b) Investment income, and
(c) Gains and losses in asset values, which have
occurred with respect to each separate option (and each separate
investment within the Brokerage Option) since the preceding
Valuation Date. Thereafter, the final Account balances as of the
Valuation Date will be determined by adjusting the amounts
determined under the
preceding sentence for contributions, distributions and
investment transfers. The allocation of Investment Expenses and
investment results as of a Valuation Date shall be in proportion
to the final Account balances in the fund or investment as of the
preceding Valuation Date. Gains and losses in assets values as
of a Valuation Date shall be determined in accordance with rules
of the Plan Administrator and may not reflect the closing values
of the assets on such Valuation Date.
The value of the Participant's account balance and investment in the
Core Funds shall be based on the market values of such items at the
time of the Participant's Telephone Application or the issuance of the
loan, whichever is less.
7.4 Maximum Number of Outstanding Loans and Refinancing:
(a) A Participant shall not have more than one loan
outstanding from the Plan at any time. Subject to subsection
(b), no loan may be made to a Participant until the repayment of
any previous loan to such Participant.
(b) A Participant with an outstanding loan from the
Plan is eligible to apply for a refinanced loan, provided the
refinanced loan is issued at least two years (six months,
effective as soon as practicable after October 20, 1995) after
issuance of the outstanding loan. A refinanced loan shall meet
all the requirements for a loan set forth in this Article VII.
Its proceeds shall first be applied to repay the balance of the
outstanding loan, with any remainder payable to the Participant
as cash. The interest rate, fees, term and repayment schedule
applicable to a refinanced loan shall be determined without
reference to the original loan.
7.5 Effect on Participant's Investment: A loan shall
constitute a segregated investment solely of the Account of the
borrowing Participant.
(a) When initially made, a loan shall be funded from
the borrowing Participant's Core Fund investments, prorated based
on the Participant's balance in each Core Fund.
(b) All repayments of principal and related interest
and any gains and losses on a loan shall be credited to the
borrowing Participant's account. Loan repayments shall be
invested in accordance with the Participant's current investment
direction for Salary Deferral Contributions. If the Participant
does not have an investment direction in effect on the date of
the Participant's Loan Application, the Participant must provide
an investment
ARTICLE IX
Administration
9.1 Allocation of Responsibility Among Fiduciaries for Plan
and Trust Administration: The Fiduciaries shall have only those specific
powers, duties, responsibilities, and obligations as are specifically
given them under this Plan or the Trust instrument. The Plan
Administrator shall have the sole responsibility for the administration
of the Plan, which responsibility is specifically described in this Plan
and the Trust instrument, except where an agent is appointed to perform
administrative duties as specifically agreed to by the Plan Administrator
and the agent. Subject to Section 5.2(c)(1), the Trustee shall have the
sole responsibility for the administration of the Trust and the
management of the assets held under the Trust as specifically provided in
the Trust instrument, except where an investment manager has been
appointed or as provided otherwise in the Trust instrument. Each
Fiduciary warrants that any directions given, information furnished, or
action taken by it shall be in accordance with the provisions of the Plan
or the Trust instrument, as the case may be, authorizing or providing for
such direction, information or action. Furthermore, each Fiduciary may
rely upon any direction, information or action of another Fiduciary as
being proper under this Plan or the Trust, and is not required under this
Plan or the Trust instrument to inquire into the propriety of any
direction, information or action of another Fiduciary as being proper
under this Plan or the Trust, and is not required under this Plan or the
Trust instrument to inquire into the propriety of any direction,
information or action. It is intended under this Plan and the Trust
instrument that each Fiduciary shall be responsible for the proper
exercise of its own powers, duties, responsibilities and obligations
under this Plan and the Trust instrument and shall not be responsible for
any act or failure to act of another Fiduciary. No Fiduciary guarantees
the Trust in any manner against investment loss or depreciation in asset
value.
9.2 Administration: The Plan shall be administered by the
Plan Administrator which may appoint or employ individuals to assist in
the administration of the Plan and which may appoint or employ any other
agents it deems advisable, including legal counsel, actuaries and
auditors to serve at the Plan Administrator's direction. All usual and
reasonable expenses of maintaining, operating and administering the Plan
and the Trust, including the expenses of the Plan Administrator and the
"(i) For purposes of Employees eligible under
Section B.1(a) of the Appendix, the election of a
full-time hourly Employee of KFC whose Employment
Commencement Date is before 1992 shall not be
effective until he has enrolled in his Employer's One
Plus program, and the election of a full-time hourly
Employee who is coded as a shift supervisor and whose
Employment Commencement Date is after 1991 shall not
be effective until he has attained age 21 and
completed one Year of Service.
"(ii) The election of an Employee eligible
under Appendix Section B.1(b) shall not be effective
until the first January 1 or July 1 following his
attainment of age 21 and his completion of a 12-month
period (measured as described below) in which he is
credited with at least 1,000 Hour of Service
(referred to as a `year of eligibility service').
The 12-month period between the date the Employee
first completes one Hour of Service and the first
anniversary thereof shall be used initially to
determine his eligibility to participate in the Plan;
thereafter, his eligibility to participate in the
Plan shall be determined by reference to whether he
completes 1,000 or more Hours of Service in a any
Plan Year, beginning with first Plan Year commencing
after he first completes one Hour of Service. An
employee who completes 1,000 or more Hours of Service
in both the initial 12-month eligibility computation
period and the first Plan Year commencing after he
first completes one Hour of Service shall be credited
with two years of eligibility service for purposes of
this section. Effective as soon as
practicable after September 30, 1995, the term
`payroll date' shall replace `January 1 or July' in
the first sentence of this subparagraph."
B.2 Modification to Section 4.1: For purposes of
determining the deferral amount in the case of an Active Participant
who is covered by this Article, subsections (a), (d) and (e) of Section
4.1 shall read as follows:
"(a) Deferral Amount: Subject to the limitations
established by this Article IV, each active Participant may defer
in any Plan Year up to $60 of his Eligible Pay per pay period, in
accordance with such rules and regulations as may be established
by the Plan Administrator. In the event that a Participant
elects to defer a portion of his Eligible Pay under the Plan, it
will be designated for contribution by the Employer to the Trust
on behalf of the Participant, and for deposit in his Salary
Deferral Account. All amounts deposited to a Participant's
Salary Deferral Account shall at all times be fully vested."
"(d) Election Procedures: An election made pursuant
to subsection (b) or (c) above shall be in the manner specified
by the Plan Administrator. Any election shall specify the amount
of the deferral desired as a whole dollar amount, subject to the
limitation in subsection (a) above. The Plan Administrator, in
its discretion, may give no effect to an election that does not
meet minimum standards for completeness and accuracy as the Plan
Administrator may establish."
"(e) Payroll Deductions: A Participant's Salary
Deferral Contributions shall be withheld from his Eligible Pay
through automatic payroll deductions. Salary Deferral
Contributions may not be withheld after they have been actually
or constructively received by the Participant."
ARTICLE C
Pizza Hut Hourly Employees
The terms of this Article apply to any Employee who is employed on an
hourly basis by Pizza Hut of America or its domestic locations and
subsidiaries (collectively referred to as "Pizza Hut") in any of the
following states: Alabama, Alaska, Arizona, Arkansas, California,
Colorado, District of Columbia, Florida, Georgia, Idaho, Kansas,
Kentucky, Louisiana, Maryland, Mississippi, Montana, Nebraska, Nevada,
New Mexico, North Carolina, North Dakota, Oklahoma, Oregon, South
Carolina, South Dakota, Tennessee, Texas, Utah, Virginia, Washington,
West Virginia or Wyoming.
C.1 Modifications to Section 3.1(a): For purposes of
determining the eligibility to participate in the Plan of an Employee
who is covered by this Article, the introductory language of Section
3.1(a) (the portion preceding paragraph (a)(1)) shall read as follows:
"(a) General Rule: Effective, January 1, 1993, any hourly
Employee of Pizza Hut shall be eligible to participate in the Plan
while he is a participant in the Pizza Hut Hourly Employees Retirement
Plan, i.e., not before he attains age 21 and completes 1,000 hours of
service. The following Employees or classes of Employees shall not be
eligible to participate in this Plan:"