Exhibit 10.6
THE HERSHEY
COMPANY
COMPENSATION LIMIT REPLACEMENT
PLAN
Amended and Restated as of
January 1, 2009
The purpose of The Hershey Company
Compensation Limit Replacement Plan (hereinafter called the
“Plan”) is to ensure that the amount of future
retirement benefits of executives of The Hershey Company
(hereinafter called the “Company”) are not reduced by
federally regulated limits on the amount of compensation that may
be included in the calculation of retirement benefits payable from
the Company’s Retirement Plan. The Plan constitutes an
amendment, restatement and continuation of the prior plan which was
most recently restated effective as of October 2,
2007.
All of the capitalized terms used in
this Plan and not defined herein shall have the same meaning as in
the Company’s Retirement Plan, as may be amended from time to
time. The following words and phrases as used in this Plan shall
have the following meanings unless a different meaning is plainly
required by the context:
|
|
(a)
|
“Average
Annual Earnings” as of any date during a Participant’s
employment with an Employer means the average of the
Participant’s Earnings for the five (5) calendar years
preceding such date of calculation.
|
|
|
(b)
|
“Board”
or “Board of Directors” means the Board of Directors of
the Company.
|
|
|
(c)
|
“Change
in Control,” for purposes of this Plan, shall have the same
meaning as provided in The Hershey Company Equity and Incentive
Compensation Plan (and any successor or replacement plan
thereof).
|
|
|
(d)
|
“Code”
means the Internal Revenue Code of 1986, as amended from time to
time.
|
|
|
(e)
|
“Committee”
or “Compensation Committee” means the Compensation and
Executive Organization Committee of the Board or any successor
committee having similar authority.
|
|
|
(f)
|
“Company”
means The Hershey Company, a Delaware Corporation.
|
|
|
(g)
|
“Credits”
means the sum of the Participant’s Basic Credits, Prior
Service Credits, Supplemental Prior Service Credits, and Periodic
Adjustment Credits.
|
|
|
(h)
|
“DB
SERP” means The Hershey Company Supplemental Executive
Retirement Plan, as amended from time to time, and any successor or
replacement plan thereof.
|
|
|
(i)
|
“DC
SERP” means Defined Contribution Supplemental Executive
Retirement Plan benefit of the Deferred Compensation Plan, and any
successor or replacement plan thereof.
|
|
|
(j)
|
“Deferred
Compensation Plan” means The Hershey Company Deferred
Compensation Plan, as amended from time to time, and any successor
or replacement Plan thereof.
|
|
|
(k)
|
“Disabled”
means Disabled as that term is defined in The Hershey Company
Retirement Plan, as in effect from time to time, and any successor
plan thereto.
|
|
|
(l)
|
“Earnings,”
for purposes of this Plan, shall have the same meaning as provided
in the Retirement Plan, except that such Earnings shall not be
subject to the compensation limits of Section 401(a)(17) of
the Code.
|
|
|
(m)
|
“Effective
Date” means January 1, 2009, except as specifically
provided otherwise in this Plan.
|
|
|
(n)
|
“Excess
Account” as of a determination date equals the excess
of:
|
|
|
1.
|
the
sum of the Credits to the Participant’s Accounts (including
Grandfather benefits) for all years ending on or before the
determination date, including years prior to the Effective Date,
that would have been made under Article 4 of the Retirement Plan,
if Earnings and Average Annual Earnings defined in this Plan were
used in such calculation, over
|
|
|
2.
|
the
sum of the Credits to the Participant’s Accounts (including
Grandfather Benefits) in all years ending on the determination
date, including years prior to the Effective Date, under Article 4
of the Retirement Plan.
|
Notwithstanding the foregoing, for
purposes of determining the Excess Account of any participant
eligible for the DC SERP, the Credits to the Participant’s
Accounts determined under subsections 1 and 2 above for periods of
participation in DC SERP shall be determined by assuming pay-based
credits equal 3% of “Earnings” (as defined in this Plan
or under the Retirement Plan, as applicable).
|
|
(o)
|
“For
Cause” means, as determined by the Committee in its
reasonable discretion, the willful engaging by an employee of the
Company in illegal conduct or gross misconduct which is materially
and demonstrably injurious to the Company, including, without
limitation, illegal conduct or gross misconduct that causes, or has
the potential to cause, material financial or reputational injury
to the Company.
|
For purposes of this definition, no
act or failure to act, on the part of the Participant shall be
considered “willful” unless it is done, or omitted to
be done, by the Participant in bad faith and without reasonable
belief that the Participant’s action or omission was in the
best interest of the Company. Any act or failure to act, based on
prior approval given by the Board or upon the instruction or with
the approval of
2
the Chief Executive Officer or the
employee’s superior or based upon the advice of counsel for
the Company (provided such approval, instruction, or advice of
counsel is made by or from someone other than the Participant)
shall be conclusively presumed to be done, or omitted to be done,
by the Participant in good faith and in the best interest of the
Company.
|
|
(p)
|
“Long
Term Disability Plan” means The Hershey Company Long Term
Disability Plan, and any successor or replacement Plan
thereof.
|
|
|
(q)
|
“Participant”
means an employee of the Company who becomes eligible to receive a
benefit under this Plan in accordance with the provisions of
Section III.
|
|
|
(r)
|
“Plan
Administrator” means the Employee Benefits Committee of the
Company, or any successor committee having similar authority, or
such other individual or committee as may be determined by the
Compensation Committee from time to time.
|
|
|
(s)
|
“Plan”
means The Hershey Company Compensation Limit Replacement Plan,
Amended and Restated as of January 1, 2009, as set forth
herein and as amended from time to time.
|
|
|
(t)
|
“Retirement
Plan” means The Hershey Company Retirement Plan, as in effect
from time to time and any successor plan thereto.
|
|
|
(u)
|
“Separation
from Service” or “Separates from Service” means a
“separation from service” within the meaning of Code
section 409A; provided that, in the event a Participant becomes
Disabled and takes a leave of absence in connection therewith, a
Separation from Service shall not occur for up to 29 months
following the first day of such leave of absence as permitted under
Code section 409A and the regulations issued thereunder.
|
|
|
(a)
|
A
U.S. paid executive who is an employee of the Company shall be a
participant in this Plan if (i) he or she is an active
participant in the Retirement Plan on or after January 1,
1995, and (ii) his or her pension benefit, determined on the
basis of the provisions of the Retirement Plan without regard to
the limitations of Section 415 or Section 401(a)(17) of
the Code, would exceed the benefit payable from the Retirement Plan
with regard to such limits. An employee of the Company hired on or
after January 1, 2007 shall not be a participant in this
Plan.
|
|
|
(b)
|
Except
as provided in Section III.(c), in the event that a Participant in
this Plan is designated by the Committee to be eligible to
participate in the DB SERP, regardless of whether he or she reaches
at least fifty-five (55) years of age and completes five
(5) Years of Service, the Participant shall no longer be
eligible to participate in this Plan or to receive a benefit
hereunder, even for periods prior to being designated as eligible
to participate in the DB SERP.
|
3
|
|
(c)
|
In
the event that an employee described in Section III.(b) above
(i) ceases to be designated by the Committee as eligible to
participate in the DB SERP prior to his or her termination of
employment with the Company, or (ii) has his or her employment
involuntarily terminated by the Company (other than For Cause)
(i.e., not as a result of a voluntary termination or resignation by
the Participant) prior to reaching at least fifty-five
(55) years of age and completing five (5) Years of
Service, such employee shall become eligible to participate in this
Plan, and to receive a benefit hereunder for all years in which he
or she would have been a Participant, but for his or her
designation by the Committee to be eligible to participate in the
DB SERP.
|
An employee who qualifies as a
Participant and who retires or whose employment is otherwise
terminated other than For
|
