{"id":38545,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/benefit-equalization-plan-philip-morris-cos-inc.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"benefit-equalization-plan-philip-morris-cos-inc","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/compensation\/benefit-equalization-plan-philip-morris-cos-inc.html","title":{"rendered":"Benefit Equalization Plan &#8211; Philip Morris Cos. Inc."},"content":{"rendered":"<pre>\n                       PHILIP MORRIS BENEFIT EQUALIZATION PLAN\n\n\n\n\n\n\n                             Effective September 2, 1974\n\n                   (As amended and in effect as of January 1, 1994)\n\n\n                       PHILIP MORRIS BENEFIT EQUALIZATION PLAN\n\n\n\n    The Philip Morris Benefit Equalization Plan governs the rights of a person\nwhose benefits under the Retirement Plan or the Profit-Sharing Plan, or both\nPlans, are subject to the Statutory Limitations.\n\n         The Plan as hereinafter set forth shall, in the case of Benefit\nEqualization Retirement Allowances payable under Article II, A hereof, be\neffective with respect to each Employee whose date of retirement (as specified\nin an application for retirement under Article II, B of the PM Retirement Plan)\nis on or after April 1, 1993 or who has filed an application for an Optional\nPayment pursuant to Article II, C(2) of the Plan after March 1, 1992.  The\nrights of a person who retired or otherwise terminated employment before March\n1, 1993 shall be governed by the provisions of the Plan as in effect on the date\nof retirement or other termination of employment, unless an application for an\nOptional Payment was filed after March 1, 1992.\n\n         The Plan as hereinafter set forth shall, in the case of Benefit\nEqualization Profit-Sharing Allowances payable under Article II, B hereof, be\neffective with respect to Employees whose date of retirement or other\ntermination of employment is on or after April 1, 1993 or who has filed an\napplication for an Optional Payment pursuant to Article II, C(2) of the Plan\nafter March 1, 1992.  The rights of a person who retired or otherwise terminated\nemployment before April 1, 1993 shall be governed by the provisions of the Plan\nas in effect on the date of retirement or other termination of employment,\nunless an application for an Optional Payment was filed after March 1, 1992.\n\n         That portion of the Philip Morris Benefit Equalization Plan which\nprovides benefits to a Beneficiary solely in excess of the Section 415\nLimitations shall be treated as a separate plan from that portion of the Plan\nwhich provides benefits to a Beneficiary attributable solely to the Compensation\nLimitation or to the Compensation Limitation and the Section 415 Limitations. \n\n\n                                      ARTICLE I\n\n                                     DEFINITIONS\n\n\n    The following terms as used herein shall have the meanings set forth below. \nCapitalized terms used herein and not defined below shall have the meanings set\nforth in the PM Retirement Plan or the Profit-Sharing Plan, as the context may\nrequire.  \n\n         (a)  'ACTUARIAL EQUIVALENT' shall mean a benefit which is equivalent\n    in value to the benefit otherwise payable pursuant to the terms of the\n    Plan, based on the actuarial principles and assumptions set forth in\n    Exhibit 'I' to the PM Retirement Plan; provided, however, that a Single Sum\n    Payment shall be the Actuarial Equivalent of the Benefit Equalization\n    Retirement Allowance payable in equal monthly payments during a twelve (12)\n    month period for the life of the Retired Employee, using the actuarial\n    principles and assumptions set forth in Exhibit 'A' to the Plan. \n\n         (b)  'ALLOWANCES' shall mean a Benefit Equalization Retirement\n    Allowance and a Benefit Equalization Profit-Sharing Allowance.\n\n         (c)  'BENEFICIARY' shall mean an Employee or the Spouse or other\n    beneficiary of such Employee whose benefits under the Retirement Plan or\n    Profit-Sharing Plan, or both Plans, are subject to the Statutory\n    Limitations.\n\n         (d)  'BENEFIT EQUALIZATION PROFIT-SHARING ALLOWANCE' or 'PROFIT-\nSHARING ALLOWANCE' shall mean the benefit determined under Article II, B hereof\nand payable at the time and in the manner set forth in Article II, D hereof. \n\n         (e)  'BENEFIT EQUALIZATION JOINT AND SURVIVOR ALLOWANCE' shall mean\n    the total amount payable during a twelve (12) month period as a reduced\n    Benefit Equalization Retirement Allowance to a Retired Employee for life\n    and after his death the amount payable to his Spouse for life equal to\n    one-half of the reduced Benefit Equalization Retirement Allowance payable\n    to the Retired Employee, which together shall be the Actuarial Equivalent\n    of the Benefit Equalization Retirement Allowance of the Retired Employee. \n\n         (f)  'BENEFIT EQUALIZATION OPTIONAL PAYMENT ALLOWANCE' shall mean (1)\n    the total amount payable during a twelve (12) month period in accordance\n    with one of the payment methods described in Article II, A(4)(d) of the PM\n    Retirement Plan designated by the Employee in the application for an\n    Optional Payment under Article II, C(2) hereof pursuant to which the\n    Employee receives for life after his retirement a reduced Benefit\n    Equalization Retirement Allowance and after his death after retirement his\n    beneficiary receives for life a benefit according to the option elected by\n\n                                          1\n\n\n\n    the Employee, which together shall be the Actuarial Equivalent of the\n    Benefit Equalization Retirement Allowance payable in equal monthly\n    payments for the life of the Employee after his retirement, or (2) the\n    total amount payable during a twelve (12) month period in accordance\n    with one of the payment methods described in Article II, A(4)(d) of\n    the PM Retirement Plan pursuant to an election described in Article\n    II, A(4)(c) of the PM Retirement Plan and designated by the Employee\n    in the application for an Optional Payment under Article II, C(2)\n    hereof pursuant to which the Employee receives for life after his\n    retirement a reduced Benefit Equalization Retirement Allowance and\n    after his death his beneficiary receives for life a benefit according\n    to the option elected by the Employee, which together shall be the\n    Actuarial Equivalent of the Benefit Equalization Retirement Allowance\n    accrued to the date of election. \n\n         (g)  'BENEFIT EQUALIZATION RETIREMENT ALLOWANCE' shall mean the\n    benefit determined under Article II, A hereof and payable at the time and\n    in the manner set forth in Article II, C, provided, that payment to a\n    Retired Employee in any form shall be the Actuarial Equivalent of a Benefit\n    Equalization Retirement Allowance expressed as a benefit payable in equal\n    monthly payments during a twelve (12) month period for the life of the\n    Retired Employee commencing at the Retired Employee's Normal Retirement\n    Age.\n\n         (h)  'BENEFIT EQUALIZATION SURVIVOR ALLOWANCE' shall mean the total\n    amount payable during a twelve (12) month period in equal monthly payments\n    for the life of the Spouse of a Deceased Employee or deceased Retired\n    Employee who has died after the date of his retirement and prior to the\n    date his Optional Payment under Paragraph I(r)(i) or (ii) hereof commences\n    to be paid in an amount equal to one-half of the reduced Benefit\n    Equalization Retirement Allowance which would have been payable as a\n    Benefit Equalization Joint and Survivor Allowance to the Deceased Employee\n    or deceased Retired Employee.\n\n         (i)  'CHANGE IN CIRCUMSTANCE' shall mean (1) the marriage of the\n    Employee or Retired Employee, (2) the divorce of the Employee or Retired\n    Employee from his Spouse, provided such Spouse was designated as the\n    beneficiary in the currently effective application to receive an Optional\n    Payment, or the Employee or Retired Employee elected to receive an Optional\n    Payment pursuant to clause (i) of Paragraph (r) hereof, (3) the death of\n    the beneficiary designated in the application to receive an Optional\n    Payment, or (4) a medical condition, based on medical evidence satisfactory\n    to the Administrator, which is expected to result in the death of the\n    beneficiary (including the Spouse) who is designated to receive a benefit\n    after the death of the Retired Employee in accordance with the application\n    to receive an Optional Payment originally filed with the Administrator,\n    within five (5) years of the filing of an application for change in\n    Optional Payment method pursuant to Article II, C(2) or Article II,D(2)\n    hereof.      \n\n                                          2\n\n\n\n         (j)  'COMMITTEE' shall mean the Corporate Employee Benefit Committee\n    of the Company charged with the administration of the Plan as from time to\n    time constituted.\n\n         (k)  'COMPANY' shall mean Philip Morris Companies Inc.\n\n         (l)  'COMPENSATION LIMITATION' shall mean the limitation of Section\n    401(a)(17) of the Code on the annual compensation of an Employee which may\n    be taken into account under the Plans.  \n\n         (m)  'DEFERRED RETIREMENT ALLOWANCE' shall mean the Retirement\n    Allowance payable pursuant to Article II, A(2) of the PM Retirement Plan.\n\n         (n)  'EARLY RETIREMENT ALLOWANCE' shall mean the Retirement Allowances\n    payable pursuant to Article II, A(3) of the PM Retirement Plan. \n\n         (o)  'EMPLOYEE' shall mean any person employed by a Participating\n    Company on a salaried basis whose benefits under the Retirement Plan or\n    Profit-Sharing Plan, or both Plans, are subject to the Statutory\n    Limitations.\n\n         (p)  'FULL RETIREMENT ALLOWANCE' shall mean the Retirement Allowance\n    payable pursuant to Article II, A(1) of the PM Retirement Plan.\n\n         (q)  'FUND' shall mean the trust fund provided for in the\n    Profit-Sharing Plan and established under the trust agreement with respect\n    to the Profit-Sharing Plan.\n\n\n         (r)  'OPTIONAL PAYMENT' shall mean (1) in the case of a Benefit\n    Equalization Retirement Allowance, the following optional forms in which\n    the Benefit Equalization Retirement Allowance of an Employee who has made\n    an election pursuant to Article II, C(2) hereof may be paid: (i) in equal\n    monthly payments for the life of the Retired Employee, (ii) as a Benefit\n    Equalization Joint and Survivor Allowance, or (iii) as a Benefit\n    Equalization Optional Payment Allowance, and (2) in the case of a Benefit\n    Equalization Profit-Sharing Allowance, any of the methods of distribution\n    permitted under Article VI of the Profit-Sharing Plan (other than a Single\n    Sum Payment payable at the time specified in Article II, D(1) hereof) and\n    in the event the Retired Employee dies before distribution of his Benefit\n    Equalization Profit-Sharing Allowance is made, commences to be made or is\n    fully distributed, to the beneficiary designated in the notification set\n    forth in Article II, E, hereof, in accordance with the method of\n    distribution specified in such notification; provided however, that an\n    Employee may not revoke or modify the method or the timing of any\n    distribution of his Benefit Equalization Profit-Sharing Allowance later\n    than at the times specified in Article II, D(2) hereof.  Any election to\n    receive an Optional Payment with respect to a Retired Employee's Allowances\n    under the Plan shall be \n\n                                          3\n\n\n\n    independent of any election with respect to his benefits payable under\n    the Retirement Plan, the Profit-Sharing Plan, or any other plan of a\n    member of the Controlled Group.       \n\n         (s)  'PARTICIPATING COMPANY' shall mean the Company and any other\n    corporation which is a member of the Controlled Group and which, with the\n    approval of the Committee, determines to participate in the Plan for the\n    benefit of its eligible employees and executes such instruments of\n    participation as the Committee deems necessary.\n\n         (t)  'PLAN' shall mean the Philip Morris Benefit Equalization Plan\n    described herein and in any amendments hereto.\n\n         (u)  'PLANS' shall mean the Retirement Plan and the Profit-Sharing\n    Plan.\n\n         (v)  'PM RETIREMENT PLAN' shall mean the Philip Morris Salaried\n    Employees' Retirement Plan, effective as of September 1, 1978 and as\n    amended from time to time.\n\n         (w)  'PROFIT-SHARING PLAN' shall mean the Philip Morris Deferred\n    Profit-Sharing Plan, effective January 1, 1956 and as amended from time to\n    time.\n\n         (x)  'RETIREMENT PLAN' shall mean the PM Retirement Plan and each\n    other defined benefit plan qualified under Section 401(a) of the Code\n    maintained by a member of the Controlled Group in which an Employee has an\n    accrued benefit, other than a defined benefit plan whose benefits in excess\n    of the Statutory Limitations are payable from one or more of the following\n    plans maintained by a member of the Controlled Group other than a\n    Participating Company: (1) an excess benefit plan (as defined in Section\n    3(36) of ERISA), or (2) a plan maintained primarily for the purpose of\n    providing deferred compensation for a select group of management or highly\n    compensated employees.\n\n         (y)  'SECTION 415 LIMITATIONS' shall mean: (1) in the case of the\n    Retirement Plan, the limitations on benefits applicable to defined benefit\n    plans set forth in Section 415 of the Code and the Treasury Regulations\n    promulgated thereunder, and (2) in the case of the Profit-Sharing Plan, the\n    limitations on contributions applicable to defined contribution plans set\n    forth in Section 415 of the Code and the Treasury Regulations promulgated\n    thereunder.\n\n         (z)  'SINGLE SUM PAYMENT' shall mean (1) in the case of a Benefit\n    Equalization Retirement Allowance, the normal form of distribution to a\n    Retired Employee who is eligible for a Full, Deferred or Early Retirement\n    Allowance, which distribution shall be made in one payment to the Retired\n    Employee (or his Spouse or \n\n                                          4\n\n\n\n    other beneficiary) at the time set forth in Article II, C(1)(a) hereof\n    and which is the Actuarial Equivalent of the Benefit Equalization\n    Retirement Allowance payable in equal monthly payments during a twelve\n    (12) month period for the life of the Retired Employee and (2) in the\n    case of a Benefit Equalization Profit-Sharing Allowance, the normal\n    form of distribution of the balance to the credit of a Retired\n    Employee as determined in accordance with Article II, B hereof, which\n    distribution shall be made in one payment to the Retired Employee (or\n    his Spouse or other beneficiary) at the time set forth in Article II,\n    D(1) hereof.\n\n         (aa) 'STATUTORY LIMITATIONS' shall mean (1) the Section 415\n    Limitations and (2) the Compensation Limitation. \n\n         (ab) 'VESTED RETIREMENT ALLOWANCE' shall mean the Retirement Allowance\n    payable pursuant to Article II, A(6) of the PM Retirement Plan.\n\n                                          5\n\n\n\n                                      ARTICLE II\n\n                    BENEFIT EQUALIZATION RETIREMENT ALLOWANCES AND\n                    BENEFIT EQUALIZATION PROFIT-SHARING ALLOWANCES\n\n\nA.  Benefit Equalization Retirement Allowances and other benefits payable under\n    this Plan shall be as follows:\n\n    (1)  (a)  The Benefit Equalization Retirement Allowance with respect to a\nRetired Employee who has retired on a Full, Deferred or Early Retirement\nAllowance shall equal the amount by which the Full, Deferred or Early Retirement\nAllowance under the Retirement Plan accrued to the date of retirement, if\ncomputed without regard to the Statutory Limitations, exceeds the amount of the\nFull, Deferred or Early Retirement Allowance actually payable under the\nRetirement Plan; provided, however, that in the event the Benefit Equalization\nRetirement Allowance with respect to the Retired Employee is paid in a Single\nSum Payment pursuant to Paragraph C(1)(a) hereof prior to the Retired Employee's\nBenefit Commencement Date, the amount of such Benefit Equalization Retirement\nAllowance shall equal the amount by which the Full, Deferred or Early Retirement\nAllowance under the Retirement Plan accrued to the date of retirement, if\ncomputed without regard to the Statutory Limitations, is reasonably estimated by\nthe Administrator to exceed the amount of the Full, Deferred or Early Retirement\nAllowance which is projected by the Administrator to be actually payable under\nthe Retirement Plan. \n\n         (b)  (i)  The Spouse of a Retired Employee described in Subparagraph\n(1)(a) above whose request for an Optional Payment pursuant to Article\nI(r)(1)(i) or (ii) hereof has been granted by the Management Committee, but who\nhas died after the date of his retirement and prior to the date his Optional\nPayment commences to be paid shall be eligible to receive a Benefit Equalization\nSurvivor Allowance.\n\n              (ii) The beneficiary of a Retired Employee described in\n         Subparagraph (1)(a) above whose request for a Benefit Equalization\n         Optional Payment Allowance pursuant to Article I(f)(1) has been\n         granted by the Management Committee, but who has died after the date\n         of his retirement and prior to the date his Optional Payment commences\n         to be paid shall be eligible to receive that portion of the Benefit\n         Equalization Optional Payment Allowance elected by the Retired\n         Employee which is payable after the death of the Retired Employee.\n\n    (2)  (a)  The Benefit Equalization Retirement Allowance with respect to a\nRetired Employee who is only eligible for a Vested Retirement Allowance and who\nis living on his Benefit Commencement Date shall equal the amount by which the\nVested Retirement Allowance under the Retirement Plan accrued to the date of his\ntermination of employment \n\n                                          6\n\n\n\nwith the Controlled Group, if computed without regard to the Statutory\nLimitations, exceeds the amount of the Vested Retirement Allowance actually\npayable under the Retirement Plan.\n\n         (b)  The Spouse of a Retired Employee described in Subparagraph 2(a)\nabove who has died after termination of his employment with the Controlled Group\nand prior to his Benefit Commencement Date shall be eligible to receive a\nBenefit Equalization Survivor Allowance.  \n\n    (3)  (a)  The Spouse of a Deceased Employee who has died prior to the date\nof his retirement or other termination from the service of any member of the\nControlled Group shall be eligible to receive a Benefit Equalization Survivor\nAllowance unless the Management Committee has granted the request of the\nDeceased Employee to receive a Benefit Equalization Optional Payment Allowance\ndescribed in Article I(f)(2) hereof in which event such Spouse shall receive the\nBenefit Equalization Survivor Allowance accrued after the date specified in the\nelection. \n\n         (b)  The beneficiary of a Deceased Employee or deceased Retired\nEmployee whose request for a Benefit Equalization Optional Payment Allowance\ndescribed in Article I(f)(2) has been granted by the Management Committee shall\nbe eligible to receive that portion of the Benefit Equalization Optional Payment\nAllowance elected by the Retired Employee which is payable after the death of\nthe Deceased Employee or deceased Retired Employee.\n\n\nB.  Benefit Equalization Profit-Sharing Allowances payable under this Plan\n    shall be as follows:\n\n    The Benefit Equalization Profit-Sharing Allowance with respect to a Retired\n    Employee shall equal the amounts which would have been credited, but were\n    not credited to his Company Account as a result of the Statutory\n    Limitations.  All such amounts shall be deemed to have been invested in\n    Part C of the Fund and valued in accordance with the provisions of the\n    Profit-Sharing Plan.\n\n\nC.  Commencement and termination of Benefit Equalization Retirement Allowances:\n\n    (1)  (a)  The Benefit Equalization Retirement Allowance payable pursuant to\nParagraph A(1)(a) hereof shall be distributed to the Retired Employee in a\nSingle Sum Payment no later than sixty (60) days following the Retired\nEmployee's date of retirement (or, if the Retired Employee dies after the date\nof retirement and before distribution of his Single Sum Payment is made, to his\nbeneficiary as determined pursuant to Paragraph E hereof, in a Single Sum\nPayment within sixty (60) days following the date of the Retired \n\n                                          7\n\n\n\nEmployee's death) unless the Employee has elected to have distribution of his\nBenefit Equalization Retirement Allowance made in accordance with Subparagraph\n(2) hereof.\n \n         (b)  The Benefit Equalization Retirement Allowance payable pursuant to\nParagraph A(2)(a) hereof shall be distributed as an Optional Payment under\nArticle I(r)(1)(i) or (ii) hereof (which Optional Payment shall be in the same\nform which the Retired Employee's benefits are paid from the PM Retirement Plan)\nand shall commence on the Employee's Benefit Commencement Date. \n\n         (c)  (i)  The Benefit Equalization Survivor Allowance payable pursuant\nto Paragraphs A(1)(b)(i), (A)(2)(b) and A(3)(a) hereof shall commence to be paid\non the later of (A) the first day of the calendar month coincident with or next\nfollowing the date the Deceased Employee or deceased Retired Employee would have\nattained the age of fifty-five (55) years, or (B) the first day of the calendar\nmonth in which the Deceased Employee or deceased Retired Employee died, provided\nthat the Spouse may elect in accordance with the provisions of Article II,\nA(5)(c) or (f) of the PM Retirement Plan, as applicable to the Spouse, that the\nBenefit Equalization Survivor Allowance shall commence on the first day of any\nmonth thereafter, but not later than the first day of the calendar month in\nwhich the Deceased Employee or deceased Retired Employee would have attained his\nNormal Retirement Age.  Any such Benefit Equalization Survivor Allowance shall\nterminate with the payment due on the first day of the month in which the Spouse\ndies.\n\n              (ii) The benefit payable to the beneficiary of the Deceased\n         Employee or deceased Retired Employee pursuant to Paragraph\n         A(1)(b)(ii) or (3)(b) hereof shall commence on the first day of the\n         calendar month following the month in which the Deceased Employee or\n         deceased Retired Employee died.    \n\n    (2)  An Employee who is eligible to retire on a Full, Deferred or Early\nRetirement Allowance and whose Benefit Equalization Retirement Allowance is\notherwise payable in a Single Sum Payment pursuant to Paragraph C(1)(a) hereof\nmay make application to the Administrator to receive an Optional Payment.  The\napplication may be filed prior to the date the Employee is eligible for an Early\nRetirement Allowance and shall specify the form of Optional Payment, the\nbeneficiary and the date on which the Optional Payment is to commence to be\nmade, which date shall be on or before the first day of the month coincident\nwith or next preceding the Employee's Required Benefit Commencement Date, but in\nno event shall the Employee's Optional Payment commence to be paid prior to the\nlater of the first day of the month following the first anniversary of the date\nof the filing of his application with the Administrator or the Employee's\nBenefit Commencement Date; provided, however, that in the event the Employee or\nformer Employee incurs a Change in Circumstance on or after the date of the\nfiling of the application and prior to the date his Optional Payment commences\nto be paid, the Employee or former Employee may file an application with the\nAdministrator within ninety (90) days of the Change in Circumstance, \n\n                                          8\n\n\n\nbut in no event later than the date his Optional Payment is to commence, to\nchange the form of Optional Payment or to change the beneficiary who is\ndesignated to receive a benefit after the death of the Retired Employee in\naccordance with the Optional Payment method originally filed with the\nAdministrator; provided, further that any election to change the form of\nOptional Payment filed after the date of his retirement and prior to the date\nhis Optional Payment is to commence may only change the form of Optional Payment\nto one of the forms specified in Article I(r)(i) or (ii) hereof.   In the case\nof an Employee who eighteen (18) months prior to attaining the age of sixty-five\n(65) years could be compulsorily retired by his Participating Company upon\nattaining the age of sixty-five (65) years pursuant to Section 12(c) of the Age\nDiscrimination in Employment Act, any application to receive an Optional Payment\nmust be filed with the Administrator more than one (1) year preceding the date\nthe Employee attains the age of sixty-five (65) years.  The Administrator shall\nnotify the Management Committee of all applications for an Optional Payment. \nThe Management Committee may grant or deny any such application in its sole and\nabsolute discretion.  Any such application shall be of no force and effect if\n(i) the Employee does not retire on a Full, Deferred or Early Retirement\nAllowance, (ii) the Employee incurs a disability at any time before the date his\nOptional Payment commences to be made which causes him to be eligible for\nbenefits under the Philip Morris Long-Term Disability Plan, or (iii) the\nEmployee is retired for ill health, disability or hardship under Article II,\nA(3)(a) of the PM Retirement Plan, provided that in the event the application is\nof no force and effect under clauses (ii) or (iii) hereof, payment of the\nEmployee's Benefit Equalization Retirement Allowance shall be made in a Single\nSum Payment pursuant to Paragraph C(1)(a) hereof within sixty (60) days of the\ndate of his retirement, but otherwise such application shall be irrevocable and\neffective on the Employee's retirement on a Full, Deferred or Early Retirement\nAllowance and the Employee's benefits shall commence on the date specified in\nthe application; provided, however, that (A) if within the one (1) year period\nfollowing the date of the filing of the application with the Administrator the\nEmployee's service with any member of the Controlled Group is involuntarily\nterminated other than by reason of the Employee's death, disability or\nmisconduct (as determined by the Management Committee), such Employee's Optional\nPayment shall commence to be paid on the Employee's Benefit Commencement Date,\nor (B) if within the one (1) year period following the date of the filing of the\napplication with the Administrator the Employee voluntarily retires or his\nemployment is terminated for misconduct (as determined by the Management\nCommittee) by any member of the Controlled Group, the Optional Payment shall be\nreduced as specified in Paragraph C(4)(a) hereof.  \n\n    (3)  (a)  Notwithstanding the preceding provisions of this Paragraph, the\nCommittee may cause the distribution of the Benefit Equalization Retirement\nAllowance to any group of similarly situated Beneficiaries in a Single Sum\nPayment or as an Optional Payment. \n\n         (b)  Notwithstanding the preceding provisions of this Paragraph, the\nAdministrator shall distribute an Employee's Benefit Equalization Retirement\nAllowance in a \n\n                                          9\n\n\n\nSingle Sum Payment if the Benefit Equalization Retirement Allowance payable in\nequal monthly payments is not more than $250 per month.\n\n    (4)  (a)  The Benefit Equalization Retirement Allowance payable to an\nEmployee pursuant to clause (B) of Paragraph C(2) hereof shall be further\nreduced by one percent (1%) for each month (or portion of a month) by which the\nmonth in which the Employee's termination of employment precedes the first\nanniversary of the filing of the application with the Administrator.  \n\n         (b)  Any Benefit Equalization Survivor Allowance or Benefit\nEqualization Optional Payment Allowance payable under this Plan to any\nBeneficiary other than a Retired Employee commencing at an age other than the\nRetired Employee's Normal Retirement Age shall be the Actuarial Equivalent of\nthe Beneficiary's benefit payable pursuant to the terms of the Plan in equal\nmonthly payments for life commencing at the Retired Employee's Normal Retirement\nAge.\n\n\nD.  Commencement and termination of Benefit Equalization Profit-Sharing\n    Allowances:\n\n    (1)  The Benefit Equalization Profit-Sharing Allowance payable pursuant to\nParagraph B shall be distributed to the Retired Employee in a Single Sum Payment\nno later than sixty (60) days following the Retired Employee's date of\nretirement (or, if the Retired Employee dies after the date of retirement and\nbefore distribution of his Single Sum Payment is made, to his beneficiary as\ndetermined pursuant to Paragraph E hereof, in a Single Sum Payment within sixty\n(60) days following the date of the Retired Employee's death) unless the\nEmployee's Benefit Equalization Profit-Sharing Allowance is distributed in\naccordance with Subparagraph (2) hereof.\n \n    (2)  An Employee who is eligible for a Benefit Equalization Profit-Sharing\nAllowance may make application to the Administrator to receive an Optional\nPayment.  The application shall specify the form of Optional Payment, the\nbeneficiary and the date on which the Optional Payment is to be paid or commence\nto be paid, which date shall be on or before the first day of the month\ncoincident with or next preceding the Employee's Required Benefit Commencement\nDate, but in no event shall the Employee's Optional Payment commence to be paid\nprior to the later of the first day of the month following the first anniversary\nof the date of the filing of his application with the Administrator or the\nEmployee's date of retirement; provided, however, that in the event the Employee\nor former Employee has elected to receive his Optional Payment over the joint\nlife expectancies of the Employee and his beneficiary and incurs a Change in\nCircumstance described in Article I(i)(2), (3) or (4) hereof on or after the\ndate of the filing of the application and prior to the date his Optional Payment\ncommences to be paid, the Employee or former Employee may file an application\nwith the Administrator within ninety (90) days of the Change in Circumstance,\nbut in no event later than the date his Optional Payment commences to be made to\ndesignate a new \n\n                                          10\n\n\n\nbeneficiary or elect to receive his Optional Payment over the life expectancy of\nthe Employee or former Employee.  In the case of an Employee who eighteen (18)\nmonths prior to attaining the age of sixty-five (65) years could be compulsorily\nretired by his Participating Company upon attaining the age of sixty-five (65)\nyears pursuant to Section 12(c) of the Age Discrimination in Employment Act, any\napplication to receive an Optional Payment must be filed with the Administrator\nmore than one (1) year preceding the date the Employee attains the age of\nsixty-five (65) years.  The Administrator shall notify the Management Committee\nof all applications for an Optional Payment.  The Management Committee may grant\nor deny any such application in its sole and absolute discretion.  If within the\none (1) year period following the date of the filing of the application with the\nAdministrator the Employee voluntarily retires (other than for ill health,\ndisability or hardship under Article II, A(3)(a) of the PM Retirement Plan),\nvoluntarily terminates his employment with his Participating Company (other than\nfor a disability which causes him to be eligible for benefits under the Philip\nMorris Long-Term Disability Plan) or his employment is terminated for misconduct\n(as determined by the Management Committee) by any member of the Controlled\nGroup, the Optional Payment shall be reduced in the same manner as specified in\nParagraph C(4)(a) hereof.  If the Employee dies after the date of retirement and\nprior to the date his Benefit Equalization Profit-Sharing Allowance is paid or\ncommences to be paid, payment shall be made to his designated beneficiary\ncommencing in the form and on the date specified in the application and if no\nsuch form or commencement date shall be specified in the application, to his\ndesignated beneficiary in a Single Sum Payment within sixty (60) days of the\ndate of his death.  \n    \n    (3)  (a)  Notwithstanding the preceding provisions of this Paragraph, the\nCommittee may cause the distribution of the Benefit Equalization Profit-Sharing\nAllowance to any group of similarly situated Beneficiaries in a Single Sum\nPayment or as an Optional Payment. \n\n         (b)  Notwithstanding the preceding provisions of this Paragraph, the\nAdministrator shall distribute an Employee's Benefit Equalization Profit-Sharing\nAllowance in a Single Sum Payment if the value of such Benefit Equalization\nProfit-Sharing Allowance is not more than $10,000.\n\n\nE.  Application or Notification for payment of Allowances: \n\n    An application for a Retirement Allowance, Survivor Allowance or optional\nform of benefit under the Retirement Plan shall be deemed notification to the\nAdministrator that payment of the Benefit Equalization Retirement Allowance or\nother benefit is to be made or commence to be made to the Retired Employee,\nSpouse \n\n                                          11\n\n\n\nor other beneficiary in accordance with the terms of this Plan.  An application\nfor distribution of the Employee's Accounts shall be deemed notification to the\nAdministrator that payment of the Benefit Equalization Profit-Sharing Allowance\nis to be made or commence to be made to the Retired Employee, Spouse or other\nbeneficiary in accordance with the terms of this Plan.  In the event the\nEmployee shall not have elected an Optional Payment method with respect to his\nBenefit Equalization Retirement Allowance, any such notification shall specify\nthe beneficiary to whom payment of the Single Sum Payment shall be made in the\nevent the Employee dies after the date of his retirement and prior to the date\nthe Single Sum Payment is made, provided, that if the Employee shall fail to\ndesignate a beneficiary or if the beneficiary shall predecease the Employee, the\nAdministrator shall distribute the Single Sum Payment to the duly authorized\nrepresentative of the former Employee's estate.  \n\n                                          12\n\n\n\n                                     ARTICLE III\n\n                       FUNDS FROM WHICH ALLOWANCES ARE PAYABLE\n\n\n    Individual accounts shall be established for the benefit of each\nBeneficiary under the Plan.  Separate individual accounts shall be established\nfor that portion of each Beneficiary's benefits under the Plan attributable\nsolely to the Section 415 Limitations, and for that portion of each\nBeneficiary's benefits under the Plan attributable solely to the Compensation\nLimitation, or to the Compensation Limitation and the Section 415 Limitations. \nIf any portion of a Beneficiary's benefits are attributable to the Compensation\nLimitation, the total amount of all benefits payable to the Beneficiary under\nthe Plan shall be paid from that portion of the Plan which provides benefits\nattributable solely to the Compensation Limitation or to the Compensation\nLimitation and the Section 415 Limitations.  Any benefits payable from an\nindividual account shall be payable solely to the Beneficiary for whom such\naccount was established.  The Plan shall be unfunded.  All benefits intended to\nbe provided under the Plan shall be paid from time to time from the general\nassets of the Employee's Participating Company and paid in accordance with the\nprovisions of the Plan; provided, however, that the Participating Companies\nreserve the right to meet the obligations created under the Plan through one or\nmore trusts or other agreements.  The contributions by each Participating\nCompany on behalf of its Employees to the individual accounts established\npursuant to the provisions of the Plan, whether in trust or otherwise, shall be\nin an amount which such Participating Company, with the advice of an actuary,\ndetermines to be sufficient to provide for the payment of the benefits under the\nPlan.\n\n                                          13\n\n\n\n                                      ARTICLE IV\n\n             THE CORPORATE EMPLOYEE BENEFIT COMMITTEE AND ITS DELEGATEES\n\n\n    The general administration of the Plan shall be vested in the Committee,\nthe Management Committee and the Administrator.\n\n    All powers, rights, duties and responsibilities assigned to the Committee,\nthe Management Committee and the Administrator under the Retirement Plan\napplicable to this Plan shall be the powers, rights, duties and responsibilities\nof the Committee, the Management Committee and the Administrator under the terms\nof this Plan, except that the Committee, the Management Committee and the\nAdministrator shall not be fiduciaries (within the meaning of Section 3(21) of\nERISA) with respect to that portion of the Plan which is intended to be exempt\nfrom the requirements of ERISA pursuant to Section 4(b)(5) thereof.\n\n                                          14\n\n\n\n                                      ARTICLE V\n\n                       AMENDMENT AND DISCONTINUANCE OF THE PLAN\n\n\n    The Board may, from time to time, and at any time, amend the Plan;\nprovided, however, that authority to amend the Plan is delegated to the\nfollowing committees or individuals where approval of the Plan amendment or\namendments by the shareholders of the Company is not required: (1) to the\nCommittee, if the amendment (or amendments) will not increase the annual cost of\nthe Plan by $10,000,000, (2) to the Management Committee, if the amendment (or\namendments) will not increase the annual cost of the Plan by $4,000,000, (3) to\nthe Administrator, if the amendment (or amendments) will not increase the annual\ncost of the Plan by $500,000.\n\n    Any amendment to the Plan may effect a substantial change in the Plan and\nmay include (but shall not be limited to) any change deemed by the Company to be\nnecessary or desirable to obtain tax benefits under any existing or future laws\nor rules or regulations thereunder; provided, however, that no such amendment\nshall deprive any Beneficiary of any Allowances accrued at the time of such\namendment.\n\n    The Plan may be discontinued at any time by the Board; provided, however,\nthat such discontinuance shall not deprive any Beneficiary of any Allowances\naccrued at the time of such discontinuance.\n\n                                          15\n\n\n\n                                      ARTICLE VI\n\n                                FORMS; COMMUNICATIONS\n\n\n    The Management Committee shall provide such appropriate forms as it may\ndeem expedient in the administration of the Plan and no action to be taken under\nthe Plan for which a form is so provided shall be valid unless upon such form. \nAll communi-cations concerning the Plan shall be in writing addressed to the\nCommittee, the Management Committee or the Administrator at such address as may\nfrom time to time be designated.  No communication shall be effective for any\npurpose unless received by the Committee, the Management Committee or the\nAdministrator. \n\n                                          16\n\n\n\n                                     ARTICLE VII\n\n                             INTERPRETATION OF PROVISIONS       \n\n\n    The Management Committee shall have the full power and authority to grant\nor deny requests for payment of a Benefit Equalization Retirement Allowance in\naccordance with a form of distribution authorized under the Retirement Plan and\nthe Committee shall have full power and authority with respect to all other\nmatters arising in the administration, interpretation and application of the\nPlan.  Any member of the Management Committee who makes a request for payment of\na Benefit Equalization Retirement Allowance in accordance with a form of\ndistribution authorized under the Retirement Plan shall excuse himself from any\nand all deliberations and decisions of the Management Committee in connection\nwith such request.   \n\n                                          17\n\n\n\n                                     ARTICLE VIII\n\n                             CHANGE IN CONTROL PROVISIONS\n\n\nA.  In the event of a Change of Control, each Employee shall be fully vested in\n    his Allowances and any other benefits accrued through the date of the\n    Change of Control ('Accrued Benefits').  Each Employee (or his beneficiary)\n    shall, upon the Change of Control, be entitled to a lump sum in cash,\n    payable within 30 days of the Change of Control, equal to the actuarial\n    equivalent of his Accrued Benefits, determined using actuarial assumptions\n    no less favorable than those used under the Supplemental Management\n    Employees' Retirement Plan immediately prior to the Change of Control.\n\n\nB.  Definition of Change of Control.\n\n    'Change of Control' shall mean the happening of any of the following\nevents:\n\n    (1)  The acquisition by any individual, entity or group (within the meaning\nof Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, and\namended (the 'Exchange Act')) (a 'Person') of beneficial ownership (within the\nmeaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of\neither (i) the then outstanding shares of common stock of the Company (the\n'Outstanding Company Common Stock') or (ii) the combined voting power of the\nthen outstanding voting securities of the Company entitled to vote generally in\nthe election of directors (the 'Outstanding Company Voting Securities');\nprovided, however, that the following acquisitions shall not constitute a Change\nof Control: (i) any acquisition directly from the Company, (ii) any acquisition\nby the Company, (iii) any acquisition by any employee benefit plan (or related\ntrust) sponsored or maintained by the Company or any corporation controlled by\nthe Company or (iv) any acquisition by any corporation pursuant to a transaction\ndescribed in clauses (i), (ii) and (iii) of paragraph (3) of this Section B; or\n\n    (2)  Individuals who, as of the date hereof, constitute the Board (the\n'Incumbent Board') cease for any reason to constitute at least a majority of the\nBoard; provided, however, that any individual becoming a director subsequent to\nthe date hereof whose election, or nomination for election by the Company's\nshareholders, was approved by a vote of at least a majority of the directors\nthen comprising the Incumbent Board shall be considered as though such\nindividual were a member of the Incumbent Board, but excluding, for this\npurpose, any such individual whose initial assumption of office occurs as a\nresult of an actual or threatened election contest with respect to the election\nor removal of directors or other actual or threatened solicitation of proxies or\nconsents by or on behalf of a Person other than the Board; or\n\n                                          18\n\n\n\n    (3)  Approval by the shareholders of the Company of a reorganization,\nmerger, share exchange or consolidation (a 'Business Combination'), in each\ncase, unless, following such Business Combination, (i) all or substantially all\nof the individuals and entities who were the beneficial owners, respectively, of\nthe Outstanding Company Common Stock and Outstanding Company Voting Securities\nimmediately prior to such Business Combination beneficially own, directly or\nindirectly, more than 80% of, respectively, the then outstanding shares of\ncommon stock and the combined voting power of the then outstanding voting\nsecurities entitled to vote generally in the election of directors, as the case\nmay be, of the corporation resulting from such Business Combination (including,\nwithout limitation, a corporation which as a result of such transaction owns the\nCompany through one or more subsidiaries) in substantially the same proportions\nas their ownership, immediately prior to such Business Combination of the\nOutstanding Company Common Stock and Outstanding Company Voting Securities, as\nthe case may be, (ii) no Person (excluding any employee benefit plan (or related\ntrust) of the Company or such corporation resulting from such Business\nCombination) beneficially owns, directly or indirectly, 20% or more of,\nrespectively, the then outstanding shares of common stock of the corporation\nresulting from such Business Combination or the combined voting power of the\nthen outstanding voting securities of such corporation except to the extent that\nsuch ownership existed prior to the Business Combination and (iii) at least a\nmajority of the members of the board of directors of the corporation resulting\nfrom such Business Combination were members of the Incumbent Board at the time\nof the execution of the initial agreement, or of the action of the Board,\nproviding for such Business Combination; or\n\n    (4)  Approval by the shareholders of the Company of (i) a complete\nliquidation or dissolution of the Company or (ii) the sale or other disposition\nof all or substantially all of the assets of the Company, other than to a\ncorporation, with respect to which following such sale or other disposition, (A)\nmore than 80% of, respectively, the then outstanding shares of common stock of\nsuch corporation and the combined voting power of the then outstanding voting\nsecurities of such corporation entitled to vote generally in the election of\ndirectors is then beneficially owned, directly or indirectly, by all or\nsubstantially all of the individuals and entities who were the beneficial\nowners, respectively, of the Outstanding Company Common Stock and Outstanding\nCompany Voting Securities immediately prior to such sale or other disposition in\nsubstantially the same proportion as their ownership, immediately prior to such\nsale or other disposition, of the Outstanding Company Common Stock and\nOutstanding Company Voting Securities, as the case may be, (B) less than 20% of,\nrespectively, the then outstanding shares of common stock of such corporation\nand the combined voting power of the then outstanding voting securities of such\ncorporation entitled to vote generally in the election of directors is then\nbeneficially owned, directly or indirectly, by any Person (excluding any\nemployee benefit plan (or related trust) of the Company or such corporation),\nexcept to the extent that such Person owned 20% or more of the Outstanding\nCompany Common Stock or Outstanding Company Voting Securities prior to the sale\nor disposition and (C) at least a majority of the members of the board of\ndirectors of such corporation were members of the Incumbent Board at the time of\nthe execution of the \n\n                                          19\n\n\n\ninitial agreement, or of the action of the Board, providing for such sale or\nother disposition of assets of the Company or were elected, appointed or\nnominated by the Board.\n\n                                          20\n\n\n\n                                      EXHIBIT A\n\n                       PHILIP MORRIS BENEFIT EQUALIZATION PLAN\n\n             ACTUARIAL ASSUMPTIONS USED TO CALCULATE A SINGLE SUM PAYMENT\n\n\n    INTEREST RATE: Average of the interest rates established by the Pension\nBenefit Guaranty Corporation to value immediate annuities in the case of a plan\ntermination for the 24 months preceding the Employee's date of retirement, less\n1\/2 of 1%.\n\n    MORTALITY ASSUMPTION:  UP-1984 Unisex Mortality Table\n\n\n\n                                          21\n\n\n\n\n<\/pre>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[8510],"corporate_contracts_industries":[9424],"corporate_contracts_types":[9540,9539],"class_list":["post-38545","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-philip-morris-cos-inc","corporate_contracts_industries-food__diversified","corporate_contracts_types-compensation__benefits","corporate_contracts_types-compensation"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/38545","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=38545"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=38545"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=38545"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=38545"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}