THE J. M. SMUCKER
COMPANY
VOLUNTARY DEFERRED COMPENSATION
PLAN
(Amended and Restated Effective
January 1, 2005)
The J. M. Smucker
Company Deferred Compensation Plan (hereinafter referred to as the
“Plan”), established effective as of May 1, 2003,
by The J. M. Smucker Company, (hereinafter referred to as the
“Company”) and will be maintained by the Company for
the purpose of providing benefits for certain employees as provided
herein. The Plan has been operated in good faith compliance with
the provisions of Code §409A and the Treasury regulations, and
other guidance promulgated thereunder, and the Company adopts this
amendment and restatement, effective January 1, 2005, in order
to comply with Code § 409A and the regulations and other
guidance promulgated thereunder.
ELIGIBILITY AND
PARTICIPATION
Section 1.1 Participants . The Company’s
Board of Directors has identified certain members of management who
are highly compensated employees eligible to participate in the
Plan and has provided such individuals with written notice of
eligibility (each a “Participant”).
Section 1.2 Elections to Defer . The individuals
described in Section 1.1 shall be eligible to participate in
the Plan and may do so by filing a written election with the
Company in such form as approved by the Company. In the first year
in which a Participant becomes eligible
to participate
in the Plan, in order to participate in the Plan, the newly
eligible Participant must make an election to defer compensation
for services to be performed for the Company within 30 days after
he or she becomes eligible. Subsequent elections to defer payment
of compensation that would otherwise be paid as annual base salary
must be made before the beginning of the calendar year for which
the compensation is earned. Subsequent elections to defer payment
of compensation that would otherwise be paid as an annual bonus
award must be made before the beginning of the fiscal year (May 1)
for which the bonus compensation is earned.
Section 1.3 Participant Accounts . For each
Participant, the Company shall establish and maintain a separate
deferred compensation account (the “Voluntary Deferral
Account”). The amount of each Participant’s
compensation which is deferred pursuant to the deferral election
form shall be credited to the Voluntary Deferral Account as of the
date such compensation otherwise would be payable. Participants
shall always be 100% percent vested in the balance in their
Voluntary Deferral Account and any earnings and losses on such
amounts. In addition, for each Participant who has a Grandfathered
Benefit, as defined in this Section 1.3, the Company shall
determine the portion of the Participant’s Voluntary Deferral
Account that is a Grandfathered Benefit (as defined in this
Section 1.3) (the “Grandfathered Portion”) which
shall consist of all amounts to which a Participant has a legally
binding right to be paid and to which the right to be paid was
earned and vested prior to January 1, 2005, and any earnings
or losses on such amounts (the “Grandfathered
Benefit”). Determination of the Grandfathered Benefit shall
be made in accordance with the provisions of Code § 409A and
Treasury Regulation §1.409A-6(a)(3)(ii) and (iv). No amount
shall actually be set aside for payment under the Plan, and the
Voluntary Deferral Account shall be maintained for record
keeping
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purposes only.
Any Participant to whom an amount is credited under the Plan shall
be deemed a general, unsecured creditor of the Company.
Section 1.4 Elections to Defer Compansation .
Any Participant may defer all or any portion (up to the limits
specified in Section 2.1 of this Plan) of his or her
compensation otherwise earned by him or her for the calendar year
or fiscal year, as applicable, beginning after the date of such
election. Any amounts deferred shall be paid to the Participant
only as provided in this Plan. Any Participant may change the
amount of, or suspend, future deferrals with respect to
compensation otherwise payable to him or her for calendar or fiscal
years, as applicable, beginning after the date of change or
suspension. The election to defer shall be irrevocable as to the
deferred compensation for the period for which the election is
made.
Section 2.1 Deferred Compensation . Each
Participant will have the right to defer up to fifty percent (50%)
of his/her respective annual base salary and up to one hundred
percent (100%) of his/her respective annual bonus award, and such
amounts will be deemed contributed to the Participant’s
Voluntary Deferral Account. Annually, the Company will provide to
each Participant an election to defer form, either as a paper form
or electronically, which must be completed before:
(i) December 31, in order to be effective for the
subsequent calendar year’s compensation that would otherwise
have been paid as annual base salary, and (ii) April 30,
in order to be effective for the subsequent fiscal year’s
compensation that would
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otherwise have
been paid as an annual bonus award.
Section 2.2 Deemed Investment Earnings . All
amounts credited under the terms of the Plan to the Voluntary
Deferral Account maintained in the name of a Participant by the
Company shall be credited with earnings or losses based upon the
Participant’s deemed investments made pursuant to an
investment election form provided by the Company either as a paper
form or electronically. The investment vehicles available pursuant
to this Plan are listed in Exhibit A attached to the Plan.
Such earnings or losses shall continue to be credited to the
Participant’s balance in the Voluntary Deferral Account until
the entire amount credited to the account has been distributed to
the Participant or to the Participant’s beneficiary in
accordance with a beneficiary designation form delivered to the
Company. The Company retains the right to change the available
investment vehicles at its sole discretion. Participants will have
the right to change deemed investment vehicles in accordance with
administrative procedures adopted by the Company by completing new
investment elections in the paper or electronic form provided by
the Company.
Section 3.1 Distribution of Grandfathered
Benefit . Notwithstanding any provisions of the Plan to the
contrary, distribution of a Grandfathered Benefit shall be
determined in accordance with the provisions of the Plan in effect
on December 31, 2004, and as provided on Addendum I to
the Plan.
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Section 3.2 Distribution of Nongrandfathered Benefit
Upon Separation from Service . Distribution of amounts deferred
under the Plan other than a Grandfathered Benefit, will commence:
on the first anniversary of the date on which a Participant has a
Separation from Service with the Company and all other related
employers of the Company (as determined under Code §414) for
any reason, (other than death, Total Disability, or Change in
Control). The distributions will be in ten annual installments, and
shall reflect any gains or losses in the Participant’s
Voluntary Deferral Account in such manner as the Company shall
determine. In the alternative, the Participant may select one of
the distribution alternatives set forth below:
(a) lump sum
payable within 60 days of Separation from Service due to
retirement or termination of employment; or
(b) substantially
equal annual installments for not less than two (2) and not
greater than ten (10) years. Distribution shall commence on
the first anniversary of the date on which the Participant has a
Separation from Service. Subsequent installments, if any, will be
made on each anniversary date following the date of the first
installment. The final installment will be the balance of the
Participant’s Voluntary Deferral Account.
Selection of an
alternative form of distribution must be made prior to the calendar
year or fiscal year, as applicable, in which the compensation would
be otherwise paid, as provided in Section 1.2 of the Plan.
Subsequent changes to an election of an alternative form of
distribution with respect to a calendar year or fiscal year, as
applicable, shall not be effective unless the election satisfies
the
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(a) A change
of election will not be effective until at least twelve
(12) months after the date on which it is filed by the
Participant with the Company.
(b) A change
of election with respect to a payment commencing on, or made on, a
specified date may not be filed with the Company less than twelve
(12) months prior to such date.
(c) A change
of election with respect to a time of payment or a method of
payment must provide that the payment subject to the change be
deferred for a period of not less than five (5) years from the
date such payment would otherwise have been made except in the
event of a payment made on account of the Participant’s death
or Total Disability.
Section 3.3 Distribution of Nongrandfathered Benefit
in Event of Death, Total Disability or Change in Control .
Within 30 days following the date on which a Participant
Separates from Service as a result of death, Total Disability, or
Change in Control, the Company will distribute in a single lump sum
the amount credited to the Participant’s Voluntary Deferral
Account in accordance with this Plan to the Participant, or in the
event of death, to the Participant’s Primary Beneficiary. If
the Primary Beneficiary is no longer alive, then such amounts shall
be distributed to the Participant’s Secondary Beneficiary. If
a Participant has not designated a beneficiary, or if no designated
beneficiary is living on the date of distribution, then such
amounts shall be distributed to such Participant’s spouse, or
if deceased, or none, then to the Participant’s children, per
stirpes, or if none, then to the Participant’s estate in a
lump sum
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distribution as
soon as administratively feasible following such
Participant’s death.
Section 3.4 Distribution of Nongrandfathered Benefit
When Distributions Have Commenced . If a Participant should die
before distribution of the full amount of the Voluntary Deferral
Account has been made to the Participant, any remaining amounts
shall be distributed to the Participant’s Primary Beneficiary
by the same method as distributions were being made to the
Participant. If the Primary Beneficiary is no longer alive, then
such amounts shall be distributed to the Participant’s
Secondary Beneficiary by the same method as distributions were
being made to the Participant. If a Participant has not designated
a beneficiary, or if no designated beneficiary is living on the
date of distribution, then, such amounts shall be distributed to
such Participant’s spouse, or if deceased or none, then to
the Participant’s children per stirpes, or if none, then to
the Participant’s estate, in a lump sum distribution as soon
as administratively feasible following such Participant’s
death.
Section 3.5 Distribution of Small Amounts . If,
at any time following termination of employment, the value of a
Participant’s Voluntary Deferral Account is less than
$10,000, the Company may elect to distribute such account balance
in a lump sum payment regardless of the Participant’s
election.
Section 3.6 Distributions of Amounts in Excess of
Code § 162(m) . Notwithstanding the above provisions, no
amount may be distributed from the Plan if the Company reasonably
anticipates that such amount would not be deductible under Code
§162(m), as determined by the Board of Directors in its sole
discretion, and in accordance with Code §409A and
the
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Treasury
regulations promulgated thereunder.
Section 3.7 Distributions of Amounts Deemed
Includable in Gross Income . Notwithstanding any provisions of
the Plan to the contrary, if, at any time, a court or the Internal
Revenue Service determines that an amount in a Participant’s
Voluntary Deferral Account is includable in the gross income of the
Participant and subject to tax, the Board of Directors of the
Company may, in its sole discretion, and in accordance with Code
§ 409A and the Treasury regulations promulgated thereunder,
permit a lump sum distribution of an amount equal to the amount
determined to be includable in the Participant’s gross
income.
Section 3.8 Distributions of Amounts in Violation of
Securities Laws . Notwithstanding any provisions of the Plan to
the contrary, a payment under the Plan may be delayed if the
Company reasonably anticipates that the making of such payment will
violate Federal securities laws or other applicable law, in the
Company’s sole discretion, and in accordance with Code
§409A and the Treasury regulations promulgated thereunder,
provided that the payment is made on the earliest at which the
Company reasonably anticipates that the making of the payment will
not cause such violation.
Section 3.9
Six-Month Delay of Distributions to Specified Employees .
Under no circumstances, other than death, will a Participant who is
a Specified Employee, as of the date of the Participant’s
Separation from Service, receive a distribution under the Plan
earlier than six (6) months following such Participant’s
Separation from Service.
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AMENDMENT AND TERMINATION OF
PLAN
The Company,
through the action of the Board or a committee designated by the
Board, reserves the right to amend or terminate the Plan at any
time. Any such termination shall be in writing and shall be
effective when made. The termination of the Plan shall be permitted
only under the circumstances provided and in accordance with Code
§409A and the regulations promulgated thereunder. Notification
to Participants of any amendment or termination shall be in writing
and delivered by first class mail, addressed to each Participant at
the Participant’s last known address, or by other notice
acknowledged in w
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