Registration of Securities (General Form) — Form 10
Filing Table of Contents
Document/Exhibit Description Pages Size
1: 10-12B Form 10 100 444K
2: EX-2.1 Form of Separation and Distribution Agreement 38 170K
3: EX-3.1 Form of Certificate of Incorporation 7 27K
4: EX-3.2 Form of By-Laws of Vlasic Foods International, 12 56K
Inc.
5: EX-9.1 Major Stockholders' Voting Trust Agreement 29 57K
6: EX-10.1 Form of Transition Services Agreement 7 26K
15: EX-10.10 Annual Incentive Plan 11 42K
16: EX-10.11 Director Compensation Plan 14 52K
7: EX-10.2 Form of Benefits Sharing Agreement 27 115K
8: EX-10.3 Form of Swanson Trademark License Agreement 26 94K
9: EX-10.4 Form of Technology Sharing Agreement 13 44K
10: EX-10.5 Form of Tax Sharing and Indemnification Agreement 22 69K
11: EX-10.6 Credit Agreement Dated 2/20/98 99 323K
12: EX-10.7 Personal Choice Plan 5 16K
13: EX-10.8 Deferred Compensation Plan 12 43K
14: EX-10.9 1998 Long-Term Incentive Plan 20 71K
17: EX-21 Subsidiaries of Vlasic Foods International Inc. 1 8K
18: EX-27 Selected Financial Data Schedule 2 12K
EXHIBIT 10.2
FORM OF BENEFITS SHARING AGREEMENT
dated as of
March 30, 1998
between
CAMPBELL SOUP COMPANY
and
VLASIC FOODS INTERNATIONAL INC.
TABLE OF CONTENTS
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ARTICLE I - DEFINITIONS........................................................................................................ 1
ARTICLE II - EMPLOYEES AND ALLOCATIONS OF LIABILITIES.......................................................................... 6
Section 2.1 Identification and Employment of Active Vlasic Employees..................................................... 6
Section 2.2 Vlasic Assumption of Liabilities............................................................................. 6
ARTICLE III - RETIREMENT PLANS................................................................................................. 6
Section 3.1 General Principles........................................................................................... 6
Section 3.2 Defined Benefit Pension Plans................................................................................ 8
Section 3.3 Defined Contribution Plans................................................................................... 10
ARTICLE IV - WELFARE PLANS..................................................................................................... 11
Section 4.1 General Principles........................................................................................... 11
Section 4.2 Establishment of Mirror Welfare Plans........................................................................ 13
Section 4.3 Vacation and Sick Pay Liabilities............................................................................ 13
Section 4.4 Medical Spending/Dependent Care Accounts..................................................................... 13
Section 4.5 Severance.................................................................................................... 13
Section 4.6 Vendor Contracts............................................................................................. 13
Section 4.7 Coverage of Certain Former Vlasic Employees and Surviving Dependents......................................... 14
Section 4.8 Workers' Compensation and Unemployment Compensation.......................................................... 14
ARTICLE V - EXECUTIVE COMPENSATION AND DIRECTOR OPTION PLANS................................................................... 15
Section 5.1 General Principles........................................................................................... 15
Section 5.2 Bonus and Incentive Plans.................................................................................... 15
Section 5.3 Director Compensation Plan................................................................................... 17
ARTICLE VI - FOREIGN PLANS AND TRANSITION EMPLOYEES............................................................................ 17
Section 6.1 Foreign Plans................................................................................................ 17
Section 6.2 Transition Employees......................................................................................... 17
ARTICLE VII - GENERAL.......................................................................................................... 17
Section 7.1 Payment of and Accounting Treatment for Expenses and Balance Sheet Amounts................................... 17
Section 7.2 Accounting Adjustments....................................................................................... 18
Section 7.3 Notices...................................................................................................... 18
Section 7.4 Amendment and Waiver......................................................................................... 19
Section 7.5 Sharing of Participant Information........................................................................... 19
Section 7.6 Entire Agreement............................................................................................. 19
Section 7.7 Parties in Interest.......................................................................................... 19
Section 7.8 No Third-Party Beneficiaries; No Termination of Employment................................................... 19
Section 7.9 Right to Amend or Terminate Any Plans........................................................................ 20
Section 7.10 Fiduciary and Related Matters............................................................................... 20
Section 7.11 Effect if Distribution Does Not Occur....................................................................... 20
Section 7.12 Relationship of Parties..................................................................................... 20
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Section 7.13 Affiliates.................................................................................................. 20
Section 7.14 Audits...................................................................................................... 20
Section 7.15 Collective Bargaining....................................................................................... 21
Section 7.16 Requests for Internal Revenue Service Rulings and Determinations and United States Department of Labor
Opinions................................................................................................... 22
Section 7.17 Further Assurances and Consents............................................................................. 22
Section 7.18 Severability................................................................................................ 22
Section 7.19 Governing Law............................................................................................... 22
Section 7.20 Counterparts................................................................................................ 22
Section 7.21 Disputes.................................................................................................... 23
Section 7.22 Assignment.................................................................................................. 23
Section 7.23 Interpretation.............................................................................................. 23
Section 7.24 Headings.................................................................................................... 23
TABLE OF APPENDICES
Appendix A - Executive and Director Compensation Plans
Appendix B - Welfare Plans
Appendix C - Retirement Plans
Appendix D - Conversion Formulas
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BENEFITS SHARING AGREEMENT
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THIS IS A BENEFITS SHARING AGREEMENT, dated as of March 30, 1998 (the
AGREEMENT), by and between Campbell Soup Company, a New Jersey corporation
(together with its successors and permitted assigns, CSC), and Vlasic Foods
International Inc., a New Jersey corporation (together with its successors and
permitted assigns, VLASIC) (collectively, the PARTIES or individually, a PARTY).
Background
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A. The Board of Directors of CSC has determined that it is in the
best interest of CSC and the shareowners of CSC to distribute (the DISTRIBUTION)
to the holders of CSC Common Stock (as defined below) all of the shares of
Vlasic Common Stock (as defined below).
B. CSC and Vlasic have entered into a Separation and Distribution
Agreement, dated as of March 30, 1998 (the DISTRIBUTION AGREEMENT), and certain
other agreements that will govern certain matters relating to the Distribution
and the relationship of CSC and Vlasic and their respective subsidiaries and
affiliates following the Distribution.
C. This Agreement sets forth the arrangements between the Parties
relating to employee benefits and compensation matters.
Terms
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THEREFORE, in consideration of the foregoing premises and the mutual
agreements and covenants contained in this Agreement, the Parties hereby agree
as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 DEFINITIONS. The following words and phrases used in
this Agreement shall have the meanings set forth below unless a different
meaning is plainly required by the context.
414(l)(1) AMOUNT means the minimum amount necessary to fund vested
benefits under the CSC Pension Plans and the Vlasic Pension Plans under section
414(l)(1) of the Code in accordance with the actuarial assumptions reasonably
determined by CSC.
ACTION means any claim, demand, suit, countersuit, arbitration,
inquiry, proceeding or investigation by or before any Governmental Authority or
any arbitration or mediation tribunal, pending or threatened, known or unknown.
ACTIVE VLASIC EMPLOYEE means:
(a) Any Employee who is actively performing services for the Vlasic
Business on the Distribution Date, including any such Employee who is not
actively performing
such service as a result of sick leave, short-term disability, other authorized
leave of absence under the policies of the CSC Group that are in effect on the
Distribution Date or who is not actively performing such service and has
reemployment rights under the policies of the CSC Group that are in effect on
the Distribution Date; and
(b) Any corporate staff Employee of the CSC Group who is designated
by Vlasic and CSC as an Employee to whom Vlasic offers employment beginning on
or before the Distribution Date and who has accepted such offer.
ANNUAL INCENTIVE PLAN, when immediately preceded by "CSC," means the
Campbell Soup Company Management Worldwide Incentive Plan. When immediately
preceded by "Vlasic," ANNUAL INCENTIVE PLAN means the management annual
incentive plan to be established by Vlasic pursuant to Section 5.2(a).
ASSET TRANSFER means the transfer of assets equal to the aggregate
interests of the Vlasic Pension Plans determined under Section 3.2(d)(i),
adjusted by CSC as of the date of the Asset Transfer to the extent necessary or
appropriate to reflect individuals whose employment changes between the CSC
Group and the Vlasic Group following the Distribution Date and prior to the date
of any transfer of assets, additional pension contributions, income, realized
and unrealized investment gains and losses experienced in the CSC Master Pension
Trust, benefit payments, expenses, data corrections, enhancements, and
computational refinements from Immediately after the Distribution Date through
the date of the actual asset transfer of such assets.
ASO CONTRACT means an administrative services only contract, related
prior practice, or related understanding with a third-party administrator that
pertains to any CSC Welfare Plan or Vlasic Welfare Plan.
BENEFITS ADMINISTRATION TRANSITION PERIOD means the period beginning
Immediately after the Distribution Date and ending on March 29, 1999.
CLOSE OF THE DISTRIBUTION DATE means 11:59:59 P.M., Eastern Time, on
the Distribution Date.
CODE means the Internal Revenue Code of 1986, as amended.
CONVERSION FORMULA means the formula used to adjust options and
restricted stock granted to Active Vlasic Employees by CSC prior to the
Distribution Date as outlined in Section 5.2 and set forth in Appendix D.
CSC COMMON STOCK means the shares of capital stock, par value $.0375
per share, of CSC.
CSC GROUP means CSC and its Subsidiaries, excluding any member of the
Vlasic Group.
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DEFERRED COMPENSATION PROGRAMS means, when preceded by CSC, the
Campbell Soup Company Deferred Compensation Program (including the Salary
Deferral Plan and the Supplemental Saving Plan and amounts deferred under the
CSC Annual Incentive Plan and the CSC LTIP) and the Campbell Soup Company
Supplemental Pension Plan. When immediately preceded by "Vlasic," DEFERRED
COMPENSATION PROGRAMS means the deferred compensation plans, programs and
policies required pursuant to Section 5.2(d) and identified in Part 2 of
Appendix A to this Agreement that are sponsored by a member of the Vlasic Group
for all periods after the Distribution Date.
DISTRIBUTION AGREEMENT is defined in the Background Section to this
Agreement.
DISTRIBUTION DATE means March 30, 1998.
EMPLOYEE means any individual who performs services pursuant to a
common-law employer-employee relationship.
ERISA means the Employee Retirement Income Security Act of 1974, as
amended.
EXECUTIVE COMPENSATION PROGRAM, when immediately preceded by CSC,
means the executive compensation plans, programs and policies listed in Part 1
of Appendix A to this Agreement that are sponsored by CSC. When immediately
preceded by "Vlasic," EXECUTIVE COMPENSATION PROGRAM means the executive
compensation plans, programs and policies listed in Part 2 of Appendix A to this
Agreement that are sponsored by a member of the Vlasic Group for all periods
after the Distribution Date.
FOREIGN PLAN, when immediately preceded by "CSC," means a Plan
maintained by the CSC Group or when immediately preceded by "Vlasic," a Plan
maintained by the Vlasic Group, in either case for the benefit of employees who
perform services and/or are compensated under a payroll that is administered
outside the 50 United States, its territories and possessions, and the District
of Columbia.
FORMER VLASIC EMPLOYEE means an Employee whose employment with the
Vlasic Business terminated for any reason (including retirement) before the
Distribution Date and who, as of the Distribution Date, is not employed by CSC
or a member of the CSC Group.
GOVERNMENTAL AUTHORITY means any federal, state or local court,
government, department, commission, board, bureau, agency, official or other
regulatory, administrative or governmental authority, including, without
limitation, the United States Department of Labor, the Internal Revenue Service,
and the Pension Benefit Guaranty Corporation.
GROUP INSURANCE POLICY means a group insurance policy issued under any
CSC Welfare Plan or any Vlasic Welfare Plan, as applicable.
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HMO AGREEMENTS means contracts, letter agreements, practices and
understandings with HMOs that provide medical services under the CSC Welfare
Plans and Vlasic Welfare Plans.
HMO means a health maintenance organization that provides benefits
under the CSC Welfare Plans or the Vlasic Welfare Plans.
IMMEDIATELY AFTER THE DISTRIBUTION DATE means 12:00 A.M., Eastern
Time, on the day after the Distribution Date.
LIABILITIES means any and all losses, claims, charges, debts, demands,
actions, costs and expenses (including, without limitation, administrative and
related costs and expenses of any Plan, program or arrangement), of any nature
whatsoever, whether absolute or contingent, matured or unmatured, liquidated or
unliquidated, accrued or unaccrued, known or unknown, whenever arising.
LTIP, when immediately preceded by "CSC," means the Campbell Soup
Company 1994 Long-Term Incentive Plan. When immediately preceded by "Vlasic,"
LTIP means the long-term incentive plan established by Vlasic pursuant to
Section 5.2(b).
MASTER PENSION TRUST, when immediately preceded by "CSC," means the
CSC Pension Plans Master Retirement Trust dated January 25, 1989, as amended,
and currently associated with the CSC Pension Plans. When immediately preceded
by "Vlasic," MASTER PENSION TRUST means the master trust established by Vlasic
pursuant to Section 3.2(b) that corresponds to the CSC Master Pension Trust.
MASTER SAVINGS TRUST, when immediately preceded by "CSC," means the
Trust Agreement dated April 1, 1994 between Campbell Soup Company and Fidelity
Management Trust Company for Master Trust under Campbell Soup Company Savings
and 401(k) Plans, as amended and currently associated with the CSC Savings
Plans. When immediately preceded by "Vlasic," MASTER SAVINGS TRUST means the
master trust to be established by Vlasic pursuant to Section 3.3(b) that
corresponds to the CSC Master Savings Trust.
MATERIAL FEATURE means any feature of a Plan that could reasonably be
expected to be of material importance to the sponsoring employer or the
participants and beneficiaries of the Plan, which could include, without
limitation, depending on the type and purpose of the particular Plan, the class
or classes of employees eligible to participate in such Plan, the nature, type,
form, source, and level of benefits provided by the employer under such Plan and
the amount or level of contributions, if any, required to be made by
participants (or their dependents or beneficiaries) to such Plan or that is a
benefit, right or feature within the meaning of Code section 411(d)(6).
NON-EMPLOYER STOCK FUND is defined in Section 3.3(d)(ii) of this
Agreement.
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PARTICIPATING COMPANY means any Person (other than an individual) that
is participating in a Plan sponsored by a member of the CSC Group or a member of
the Vlasic Group, as the context requires.
PERSON means an individual, a general or limited partnership, a
corporation, a trust, a joint venture, an unincorporated organization, a limited
liability entity, any other entity, and Governmental Authority.
PLAN means any plan, policy, program, payroll practice, on-going
arrangement, contract, trust, insurance policy or other agreement or funding
vehicle, whether written or unwritten, providing benefits to Employees or former
Employees of the CSC Group or the Vlasic Group.
RETIREMENT PLANS, when immediately preceded by "CSC," means the
retirement plans listed and further defined in Part 1 of Appendix C to this
Agreement that are sponsored by a member of the CSC Group. When immediately
preceded by "Vlasic," RETIREMENT PLANS means the retirement plans listed and
further defined in Part 2 of Appendix C to this Agreement that are sponsored by
a member of the Vlasic Group for periods immediately after the Distribution
Date.
SUBSIDIARY means, with respect to any specified Person, any
corporation or other legal entity of which such Person or any of its
Subsidiaries owns or controls, directly or indirectly, more than 50% of the
stock or other equity interest entitled to vote on the election of members to
the board of directors or similar governing body.
VLASIC BUSINESS means the business or businesses that, after giving
effect to the Internal Transfer Transactions (as that term is defined in Section
1.1 of the Distribution Agreement), are conducted by Vlasic or any other member
of the Vlasic Group.
VLASIC COMMON STOCK means the outstanding shares of common stock, no
par value, of Vlasic.
VLASIC DIRECTOR means a person who is a member of the Board of
Directors of Vlasic on or after the Distribution Date.
VLASIC GROUP means Vlasic and its Subsidiaries as of the Distribution
Date and any Subsidiary or division of any member of the CSC Group whose assets
and liabilities are included in the Vlasic Balance Sheet (as that term is
defined in Section 1.1 of the Distribution Agreement).
VLASIC LIABILITIES means (i) Liabilities of or related to Active
Vlasic Employees incurred in connection with the conduct or operation of the
Vlasic Business, whether arising before, on or after the Distribution Date,
except as specifically provided otherwise in this Agreement; (ii) Liabilities
arising on or after the Distribution Date relating to employment with any member
of the Vlasic Group; and (iii) all other Liabilities related to, arising out of,
or resulting from obligations, liabilities, and responsibilities assumed or
retained by Vlasic or
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another member of the Vlasic Group under this Agreement, or a Plan sponsored or
maintained by any member of the Vlasic Group, unless CSC expressly retains any
such Liability in writing or excludes the Liability in writing from those being
assumed by Vlasic.
WELFARE PLANS, when immediately preceded by "CSC," means the welfare
benefit plans, programs, and policies listed in Part 1 of Appendix B to this
Agreement that are sponsored by a member of the CSC Group. When immediately
preceded by "Vlasic," WELFARE PLANS means benefit plans, programs, and policies
listed in Part 2 of Appendix B to this Agreement that are sponsored by a member
of the Vlasic Group for all periods after the Distribution Date.
ARTICLE II
EMPLOYEES AND ALLOCATIONS OF LIABILITIES
SECTION 2.1 IDENTIFICATION AND EMPLOYMENT OF ACTIVE VLASIC
EMPLOYEES. At the Distribution Date, CSC shall provide Vlasic with a list
(which shall be current as of a date no more than 10 days prior to the
Distribution Date) of the name, job title, social security number, employee
identification number and assigned location of each Active Vlasic Employee.
Effective as of the later of the Distribution Date or the date an Active Vlasic
Employee returns from a covered leave, Vlasic shall employ all such identified
Active Vlasic Employees.
SECTION 2.2 VLASIC ASSUMPTION OF LIABILITIES. Vlasic shall, on
behalf of itself and its Subsidiaries, assume, or cause another member of the
Vlasic Group to assume, the Vlasic Liabilities.
ARTICLE III
RETIREMENT PLANS
SECTION 3.1 GENERAL PRINCIPLES.
(a) Assumption of Vlasic Liabilities. Effective as of the
Distribution Date, the Vlasic Group and its applicable Retirement Plans shall
assume all Vlasic Liabilities in connection with the assets to be transferred
with respect to Active Vlasic Employees and their alternate payees and the CSC
Group shall have no further liability with respect to such assets and Vlasic
Liabilities. The CSC Group shall have no liability with respect to the Vlasic
Retirement Plans, except as otherwise provided in Section 3.2(d), and the Vlasic
Group shall have no liability with respect to the CSC Retirement Plans.
(b) Governmental Filings. Vlasic and CSC shall make the filings
required under the Code and ERISA in connection with the transfers described in
this Article III in a timely manner. The Parties agree that the transfers
described in Sections 3.2(d) and 3.3(d) shall be made in accordance with section
414(1) of the Code.
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(c) Determination Letters. Vlasic shall apply to the Internal
Revenue Service for favorable determination letters with respect to the tax-
qualified status of the Vlasic Retirement Plans as soon as practicable after the
Distribution Date, and Vlasic, consistent with the terms of this Agreement,
shall make such amendments to such Plans as may be required by the Internal
Revenue Service in order for Vlasic to receive favorable determination letters
with respect to these Plans.
(d) Terms of Participation - Active Vlasic Employees. With respect
to Active Vlasic Employees, the Vlasic Retirement Plans shall be the successors
in interest to, shall recognize all Material Features as of the Distribution
Date under, and shall not provide benefits that duplicate benefits provided by,
the corresponding CSC Retirement Plans for such Active Vlasic Employees. CSC and
Vlasic shall agree on methods and procedures, including amending the respective
Plan documents, to prevent Active Vlasic Employees from receiving duplicative
benefits from the CSC Retirement Plans and the Vlasic Retirement Plans. Each
Vlasic Retirement Plan shall provide that all service, all compensation, and all
other benefit-affecting determinations that, as of the Distribution Date, were
recognized under the corresponding CSC Retirement Plan (for periods immediately
before the Distribution Date) shall, as of Immediately after the Distribution
Date, receive full recognition, credit and validity and be taken into account
under such Vlasic Retirement Plan to the same extent as if such items occurred
under such Vlasic Retirement Plan, except to the extent that duplication of
benefits would result. The provisions of this Agreement for the transfer of
assets from certain trusts relating to CSC Retirement Plans to the corresponding
trusts relating to Vlasic Retirement Plans are based upon the understanding of
the Parties that, subject to Section 3.2(e), each such Vlasic Retirement Plan
will assume all Vlasic Liabilities of the corresponding CSC Retirement Plan to
or relating to Active Vlasic Employees, as provided for in this Agreement. If
there are any legal or other authoritative reasons that any of such Vlasic
Liabilities are not effectively assumed by the appropriate Vlasic Retirement
Plan, then the amount of assets transferred to the trust relating to such Vlasic
Retirement Plan from the trust relating to the corresponding CSC Retirement Plan
shall be recomputed, ab initio, as set forth in Section 3.2(d)(i) but taking
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into account the retention of such Vlasic Liabilities by such CSC Retirement
Plan, and assets shall be transferred by the trust relating to such Vlasic Plan
to the trust relating to such CSC Retirement Plan so as to place each such trust
in the position it would have been in, had the initial asset transfer been made
in accordance with such recomputed amount of assets.
(e) Limitation on Certain Plan Amendments. During the Benefits
Administration Transition Period and subject to the general limitation of
Section 7.9, Vlasic shall not adopt any amendment, or allow any amendment to be
adopted, to any Vlasic Retirement Plan that, in the opinion of counsel
acceptable to both CSC and Vlasic, would violate, or create an optional form of
benefit subject to, Code section 411(d)(6).
(f) Beneficiary Designations. All beneficiary designations made by
Active Vlasic Employees or their respective alternate payees for CSC Retirement
Plans shall be transferred to and be in full force and effect under the
corresponding Vlasic Retirement Plans until such beneficiary designations are
replaced or revoked by the individual who made such beneficiary designation.
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SECTION 3.2 DEFINED BENEFIT PENSION PLANS.
(a) Establishment of Mirror Pension Plans. Effective as of the
Distribution Date, Vlasic shall adopt the Vlasic Pension Plans, which shall
provide benefits with respect to Active Vlasic Employees and their respective
alternate payees that are substantially similar in all Material Features to
those provided under the CSC Pension Plans immediately before the Distribution
Date.
(b) Establishment of Mirror Pension Trust. Effective as of the
Distribution Date, Vlasic shall establish or cause to have established the
Vlasic Master Pension Trust, which shall be exempt from taxation under Code
section 501(a)(1).
(c) Appointment of Trustee. Effective as of the Distribution Date,
Vlasic shall use its reasonable best efforts to enter into such agreements to
accomplish the assumption of Vlasic Liabilities and transfer of assets outlined
in this Section 3.2, the maintenance of the necessary participant records and
the appointment of an initial trustee under the Vlasic Pension Plans.
(d) Transfer of Pension Plan Assets.
(i) Calculation of Pension Plan Asset Allocation. As soon as
practicable after the Distribution Date, CSC shall cause the enrolled actuary
for the Pension Plans to calculate the 414(l)(1) Amount with respect to Active
Vlasic Employees under each CSC Pension Plan as of the Close of the Distribution
Date.
(ii) Transfer of Assets to the Vlasic Master Pension Trust. As
soon as practicable after the completion of the calculation required by Section
3.2(d)(i), but in no event before CSC, or its authorized representative,
determines that the calculation and the data on which it is based are acceptably
complete and accurate, CSC shall cause the Asset Transfer from the CSC Master
Pension Trust to the Vlasic Master Pension Trust of not less than the 414(l)(1)
Amount calculated under Section 3.2(d)(i). Notwithstanding the preceding
sentence, the Asset Transfer from the CSC Master Pension Trust to the Vlasic
Master Pension Trust shall not occur until the Internal Revenue Service has
issued favorable letters of determination finding that the Vlasic Pension Plans
are tax-qualified within the meaning of section 401(a) of the Code.
Specifically, with respect to the CSC Salaried Pension Plan, at CSC's sole
discretion, the Asset Transfer from the CSC Master Pension Trust to the Vlasic
Master Pension Trust also shall not occur until the Internal Revenue Service has
issued a favorable letter of determination finding that the CSC Salaried Pension
Plan is tax-qualified within the meaning of section 401(a) of the Code.
(iii) Identification of Assets Transferred. The specific assets
to be transferred from the CSC Master Pension Trust to the Vlasic Master Pension
Trust in the Asset Transfer shall represent a reasonable cross-section of the
asset classes in the CSC Master Pension Trust consistent with the objective of
enabling Vlasic to implement an investment program for the Vlasic Master Pension
Trust, but in no event shall CSC or the CSC Master Pension Trust be required to
incur unreasonable transaction costs in the process of transferring assets and
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subsequently re-balancing the investment portfolio held by the CSC Master
Pension Trust. CSC shall not be required to transfer any shares of CSC or Vlasic
stock or any interests in group annuity contracts held by the CSC Master Pension
Trust. CSC shall not be required to transfer any specific asset, any portion of
any specific fund or investment manager account, or any specific portion of any
specific asset, fund or investment manager account. By accepting the assets
transferred, Vlasic acknowledges that it and not CSC is serving as the fiduciary
for the Vlasic Master Pension Trust with respect to the determination and actual
transfer of assets from the CSC Master Pension Trust and that, acting as
fiduciary for the Vlasic Pension Plans, Vlasic further acknowledges that it is
able to change the asset allocation as it deems appropriate at any time after
the Asset Transfer. Once the assets have been transferred to and received by the
Vlasic Master Pension Trust, such event shall fully and finally foreclose any
issue or matter of any nature whatsoever by Vlasic, the Vlasic Master Pension
Trust, the Vlasic Pension Plans or any other trust related to such Plans against
CSC, the CSC Master Pension Trust, the CSC Pension Plans, or any other trust
related to such Plans relating to the condition, identity, or value of such
assets and Vlasic shall fully indemnify CSC, its employees, officers, directors,
and the CSC Pension Plans and the CSC Master Pension Trust regarding any Vlasic
Liabilities or regulatory issue of any nature with respect to the CSC Pension
Plans and the CSC Master Pension Trust.
(e) PBGC Intervention. Notwithstanding any provision of this
Agreement to the contrary, in the event that at any time the Pension Benefit
Guaranty Corporation (PBGC) or any other Governmental Authority asserts that the
Distribution may provide justification for the PBGC to seek termination of any
CSC Pension Plan or Vlasic Pension Plan pursuant to ERISA section 4042 or
otherwise asserts that the Distribution may increase unreasonably the long-run
loss to the PBGC (within the meaning of ERISA section 4042(a)(4)) with respect
to any CSC Pension Plan or Vlasic Pension Plan, CSC may, in its sole discretion:
(i) Retain all assets and Vlasic Liabilities with respect to
Active Vlasic Employees and their respective alternate payees arising prior to
the Distribution Date under the applicable CSC Pension Plan and require Vlasic
to provide equivalent benefits under plans maintained by it with an offset for
any benefits continued to be provided under the applicable CSC Pension Plan;
(ii) Enter into negotiations with the PBGC to resolve these
issues and, upon satisfactorily resolving such issues, Vlasic shall fully comply
with the terms of this Section 3.2(e); or
(iii) Reach such other agreement as may be satisfactory to CSC
and Vlasic.
In any case and notwithstanding any other provision of this Agreement, Vlasic
shall be fully responsible and liable for any obligation to, agreement with, or
undertaking (on behalf of or relating to any Vlasic Pension Plan) to the PBGC
and shall hold CSC free from and fully indemnify it against any such obligation,
agreement, or undertaking. If CSC retains any Vlasic Liabilities with respect
to any Active Vlasic Employee and their respective alternate payees
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under any CSC Pension Plan, Vlasic shall fully reimburse CSC for the reasonable
administrative expenses relating to any such liabilities.
SECTION 3.3 DEFINED CONTRIBUTION PLANS.
(a) Establishment of Mirror Savings Plans. Prior to and effective on
the Distribution Date, Vlasic shall adopt the Vlasic Savings Plans, which shall
provide benefits to Active Vlasic Employees and their respective alternate
payees that are substantially similar in all Material Features to those provided
under the CSC Savings Plans immediately before the Distribution Date.
(b) Establishment of Mirror Savings Trust. Effective on the
Distribution Date, Vlasic shall establish or cause to be established the Vlasic
Master Savings Trust, which shall be exempt from taxation under Code section
501(a)(1).
(c) Appointment of Trustee/Recordkeeper. Effective no later than the
Distribution Date, Vlasic shall use its reasonable best efforts to enter into
such agreements to accomplish the assumption of Vlasic Liabilities and transfer
of assets outlined in this Section 3.3, the maintenance of the necessary
participant records, the appointment of Fidelity Management Trust Company as
initial trustee under the Vlasic Savings Plans, and the engagement of Fidelity
Management Trust Company as initial recordkeeper under such plans.
(d) Transfer of Savings Plan Assets.
(i) Transfer of Assets to the Vlasic Master Savings Trust. CSC
shall cause the accounts of the Active Vlasic Employees and their respective
alternate payees, if any, under the applicable CSC Savings Plan that are held by
its related trust as of the Distribution Date to be transferred to the
applicable Vlasic Savings Plan and its related trust, and Vlasic shall cause
such transferred accounts to be accepted by such plan and trust. As soon as
practicable after the Distribution Date, assets related to the accounts of all
Active Vlasic Employees and their alternate payees shall be transferred from the
CSC Master Savings Plan Trust to the Vlasic Master Savings Plan Trust. The
transfer of such accounts shall be made: (A) in kind, to the extent the assets
consist of investments in a CSC Common Stock fund or a Vlasic Common Stock fund
and (B) otherwise in cash, interests in mutual funds, securities, or other
property or in a combination thereof, at CSC's sole discretion, but, to the
extent practicable, shall be invested initially in comparable investment options
in the Vlasic Savings Plans as such accounts were invested immediately before
the date of transfer. Any outstanding balances of loans under any CSC Savings
Plans to Active Vlasic Employees shall be transferred with the underlying
accounts.
(ii) Non-Employer Stock Funds. Effective Immediately after the
Distribution Date, a Vlasic Common Stock fund shall be added as an investment
option to the CSC Savings Plans and the Vlasic Savings Plans shall provide for
both a CSC Common Stock fund and a Vlasic Common Stock fund as investment
options. The Vlasic Common Stock fund in the CSC Savings Plan and the CSC Common
Stock fund in the Vlasic Savings Plan are each referred to as a NON-EMPLOYER
STOCK FUND with respect to the applicable plan. The
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Parties intend that each Non-Employer Stock Fund will be maintained under the
respective Savings Plan through December 31, 1999; provided, however that the
respective Plan fiduciaries have the ultimate and sole responsibility for
determining the investment options available under the Plans. On December 31,
1999 or earlier as directed by the relevant Plan fiduciaries, all Non-Employer
Stock shall be liquidated and the proceeds of such liquidation shall be invested
as directed by the relevant Plan fiduciaries. The CSC Savings Plans and the
Vlasic Savings Plans shall each provide that, after the Distribution Date, no
new contributions may be invested in, and no amounts may be transferred from
other investment options to, the Non-Employer Stock Fund under the respective
Plans. The CSC Savings Plans shall provide that no earnings or dividends under
its Non-Employer Stock Fund may be reinvested in Vlasic Common Stock fund and
the Vlasic Savings Plan shall provide that no earnings or dividends under its
Non-Employer Stock Fund may be reinvested in its CSC Common Stock fund.
(iii) Provision of Disclosure Materials Relating to Non-Employer
Stock Funds. Each Party shall provide to the other Party in a timely manner
such proxy statements, annual reports, and other materials with respect to the
Party's stock held in the Non-Employer Stock Fund under the Savings Plan of the
other Party as may be reasonably requested by the other Party.
(iv) Miscellaneous Funds. In the event that CSC determines that
it is not feasible or appropriate to transfer in-kind the assets of a particular
investment fund from one or more CSC Savings Plans to the applicable Vlasic
Savings Plan, then the fair market value of the assets, as of the close of
business on the Distribution Date (and earnings, gains and losses attributable
to such amount from the Distribution Date to the date the assets are actually
transferred) shall be transferred in cash to the Vlasic Savings Plan and Vlasic
shall invest such cash in its Plan and trust in the same manner and proportion
as it was invested in the CSC Savings Plan or otherwise at the direction of each
individual entitled to direct investments.
ARTICLE IV
WELFARE PLANS
SECTION 4.1 GENERAL PRINCIPLES.
(a) Assumption of Welfare Plan Liabilities. Immediately after the
Distribution Date, all Vlasic Liabilities for or relating to Active Vlasic
Employees and certain Former Vlasic Employees and surviving dependents as set
forth in Section 4.7 under the CSC Welfare Plans or Vlasic Welfare Plans shall
cease to be Liabilities of CSC or the CSC Welfare Plans and shall be assumed by
the Vlasic Group and the Vlasic Welfare Plans (on a claims-made basis)
including, without limitation, retiree medical benefits. Unless otherwise
specifically set forth in writing, Vlasic shall not be entitled to assets
associated with any CSC Welfare Plan or Vlasic Welfare Plan.
(b) Continuation of Elections. Vlasic shall cause the Vlasic Welfare
Plans to recognize and maintain all coverage and contribution elections made by
Active Vlasic Employees under the CSC Welfare Plans in effect for the period
immediately before the
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Distribution Date and shall apply such elections under the Vlasic Welfare Plans
for the remainder of the period or periods for which such elections are by their
terms applicable. Vlasic shall provide coverage to Active Vlasic Employees under
the Vlasic Welfare Plans without the need to undergo a physical examination or
otherwise provide evidence of insurability, will not impose pre-existing
condition exclusions and will recognize and maintain all irrevocable assignments
and elections made by Active Vlasic Employees in connection with any life
insurance coverage under the CSC Welfare Plans and any predecessor plans.
(c) Continuation of Co-Payments. Vlasic shall cause the Vlasic
Welfare Plans to recognize and give credit for all amounts applied to
deductibles, out-of-pocket maximums, and other applicable benefit coverage
limits for expenses that have been incurred by Active Vlasic Employees under the
CSC Welfare Plans for the remainder of the benefit limit year in which the
Distribution Date occurs.
(d) Continuation of Maximum Benefits. Vlasic shall cause the Vlasic
Welfare Plans to recognize and give credit for all benefits paid to Active
Vlasic Employees under the CSC Welfare Plans, before and during the benefit
limit year in which the Distribution occurs, for purposes of determining when
such persons have reached their lifetime maximum benefits under the Vlasic
Welfare Plans.
(e) Campbell Couples - Coordination of Benefits. To the extent
required by law, effective as of the first January 1 or CHANGE IN FAMILY STATUS
(within the meaning of the Code and applicable regulations) that occurs
Immediately after the Distribution Date, Vlasic shall cause the Vlasic Welfare
Plans to permit eligible Active Vlasic Employees to cover their lawful spouses
as dependents if such lawful spouses are active or retired CSC employees (but
were not otherwise covered as a dependent under the CSC Welfare Plans or other
CSC Plans due to their previous status as both employee and dependent of a CSC
employee). To the extent required by law, effective as of the first January 1 or
CHANGE IN FAMILY STATUS (within the meaning of the Code and applicable
regulations) that occurs Immediately after the Distribution Date, CSC shall
cause the CSC Welfare Plans to permit eligible CSC Group employees to cover
their spouses as dependents if such spouses are active or retired Vlasic
employees. All benefits provided under any such plans to a lawful spouse
dependent of the other Party's employee shall be coordinated pursuant to the
applicable CSC and Vlasic Plans.
(f) COBRA and HIPAA Obligations. For periods before the Distribution
Date, CSC shall be responsible for administering compliance with the
continuation coverage requirements for "group health plans" under Title X of the
Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (COBRA), and
the portability requirements under the Health Insurance Portability and
Accountability Act of 1996, as amended (HIPAA), with respect to Active Vlasic
Employees, Former Vlasic Employees and any beneficiaries and dependents thereof,
and shall be responsible for furnishing all necessary employee change notices
with respect to these persons in accordance with applicable CSC policies and
procedures. Effective on the Distribution Date and thereafter, Vlasic shall be
solely responsible for administering compliance with and satisfying any
outstanding COBRA or HIPAA obligation with respect to Active Vlasic Employees,
Former Vlasic Employees and their beneficiaries and dependents.
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(g) Subrogation. If Vlasic recovers any amounts through subrogation
or otherwise for claims paid by CSC reimbursed to Active Vlasic Employees and
certain Former Vlasic Employees and surviving dependents as set forth in Section
4.8 and their beneficiaries and dependents, Vlasic shall pay such amounts to
CSC.
SECTION 4.2 ESTABLISHMENT OF MIRROR WELFARE PLANS. Except as
otherwise set forth in this Article IV, Vlasic shall take all actions necessary
or appropriate to establish, on or before the Distribution Date, Vlasic Welfare
Plans to provide each Active Vlasic Employee with benefits substantially similar
to the benefits provided to him or her under the CSC Welfare Plans immediately
before the Distribution Date.
SECTION 4.3 VACATION AND SICK PAY LIABILITIES. Effective on the
Distribution Date, Vlasic shall assume all accrued Liabilities (whether vested
or unvested, and whether funded or unfunded) for vacation and sick leave in
respect of all Active Vlasic Employees as of the Distribution Date.
SECTION 4.4 MEDICAL SPENDING/DEPENDENT CARE ACCOUNTS. For the
calendar year that includes the Distribution Date, the Vlasic Flex Plan shall
recognize all elections, contributions and related claims by Active Vlasic
Employees to flexible spending or dependent care assistance accounts under the
CSC Flex Plan. As soon as practicable after the close of such calendar year and
in conjunction with any other appropriate accounting adjustments to be made
between the Parties, CSC shall reimburse Vlasic for the aggregate contributions
to such accounts withheld by CSC from Active Vlasic Employees prior to the
Distribution Date to the extent that CSC did not exhaust such contributions by
providing benefits to Active Vlasic Employees prior to the Distribution Date, or
if benefits paid by CSC to Active Vlasic Employees prior other Distribution Date
exceeds the contributions withheld by CSC from Active Vlasic Employees, Vlasic
shall reimburse CSC for such difference.
SECTION 4.5 SEVERANCE. The Parties agree that, with respect to
Active Vlasic Employees who, in connection with the Distribution, cease to be
employees of the CSC Group or Vlasic Group and become Employees of the Vlasic
Group or CSC Group, respectively, such cessation shall not be deemed a severance
of employment from either Group for purposes of any Plan that provides for the
payment of severance, salary continuation or similar benefits and shall, in
connection with the Distribution, if and to the extent appropriate, obtain
waivers from Active Vlasic Employees against any such assertion. The Parties
shall take all such action, including, but not limited to amending any Plan to
give effect to the provisions of this Section 4.5.
SECTION 4.6 VENDOR CONTRACTS.
(a) Pre-Distribution Date Negotiation. Before the Distribution Date,
CSC shall take such steps as are necessary under each ASO Contract, Group
Insurance Policy, HMO Agreement and letters of understanding and arrangements in
existence as of the date of this Agreement to permit Vlasic to participate in
the terms and conditions of such ASO Contract, Group Insurance Policy, HMO
Agreement or letters of understanding and arrangements beginning Immediately
after the Distribution Date.
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(b) Terms of Vlasic Participation. CSC shall determine, and shall
promptly notify Vlasic of, the manner in which Vlasic's participation in the
terms and conditions of ASO Contracts, Group Insurance Policies, HMO Agreements,
letters of understanding and arrangements as set forth above is to be
effectuated. Vlasic hereby authorizes CSC to act on its behalf to extend to
Vlasic the terms and conditions of the ASO Contracts, Group Insurance Policies,
HMO Agreements and letters of understanding and arrangements. Vlasic shall
fully cooperate with CSC in such efforts.
(c) Premium/Administration Rates. CSC and Vlasic shall use their
reasonable best efforts to cause each of the insurance companies, HMOs, paid
provider organizations and third-party administrators providing services and
benefits under the CSC Welfare Plans and the Vlasic Welfare Plans to maintain
the premium and/or administrative rates, based on the aggregate number of
participants in both the CSC Welfare Plans, after the Distribution Date, and the
Vlasic Welfare Plans.
(d) Management of the ASO Contracts, Group Insurance Policies, HMO
Agreements, Letters of Understanding and other Vendor Contracts. Vlasic shall
be responsible, subject to the direction and control of CSC, for the management
of the existing contractual and other arrangements pertaining to the
administration of the Vlasic Welfare Plans. Immediately after the Distribution
Date, Vlasic shall be responsible for the management and control of the ASO
contracts, Group Insurance Policies, HMO Agreements, letters of understanding,
arrangements and other vendor contracts and relationships to the extent such
contracts, policies and agreements apply to the Vlasic Welfare Plans.
Notwithstanding the foregoing, nothing contained in this Section 4.6(d) shall
permit Vlasic to direct any insurance carrier, third-party vendor or claims
administrator with respect to any contractual arrangement, policy or agreement
under any CSC Welfare Plan.
SECTION 4.7 COVERAGE OF CERTAIN FORMER VLASIC EMPLOYEES AND
SURVIVING DEPENDENTS. In addition to Active Vlasic Employees, Vlasic shall
cause the Vlasic Welfare Plans to cover: (a) each Former Vlasic Employee who is
totally disabled with at least ten (10) years of service with the CSC Group
prior to the Distribution Date, (b) eligible surviving spouses and dependents of
each Former Vlasic Employee and (c) each Former Vlasic Employee who is receiving
severance benefits from CSC prior to the Distribution Date.
SECTION 4.8 WORKERS' COMPENSATION AND UNEMPLOYMENT COMPENSATION.
Effective on the Distribution Date, Vlasic shall assume all Vlasic Liabilities
for Active Vlasic Employees related to any and all workers' compensation and
unemployment compensation matters under any law of any state, territory, or
possession of the United States or the District of Columbia and Vlasic shall be
fully responsible for the administration of all such claims. If Vlasic is
unable to assume any of such Vlasic Liabilities or the administration of any
such claim because of the operation of applicable state law or for any other
reason, Vlasic shall reimburse CSC for all such Vlasic Liabilities.
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ARTICLE V
EXECUTIVE AND DIRECTOR COMPENSATION PROGRAMS
SECTION 5.1 GENERAL PRINCIPLES.
(a) Assumption of Vlasic Liabilities. Except as otherwise provided
in this Agreement, effective as of the Distribution Date, the Vlasic Group and
its applicable Plan shall assume all Vlasic Liabilities in connection with
Vlasic Executive Compensation Programs for Active Vlasic Employees and the CSC
Group shall have no further liability with respect to such Vlasic Liabilities.
The CSC Group shall have no liability with respect to the Vlasic Executive
Compensation Programs, and the Vlasic Group shall have no liability with respect
to the CSC Executive Compensation Programs.
(b) Establishment of Mirror Plans. Unless specifically provided for
otherwise in this Article V, effective on the Distribution Date, Vlasic shall
establish the Vlasic Executive Compensation Programs, which shall provide
benefits to eligible Active Vlasic Employees that are comparable to the
corresponding CSC Executive Compensation Programs. Notwithstanding the
foregoing, Vlasic has sole authority to determine which Active Vlasic Employees
shall be eligible to participate in one or more of the Vlasic Executive
Compensation Programs.
(c) Cessation of Participation. All Active Vlasic Employees, whether
or not eligible to participate in one or more of the Vlasic Executive
Compensation Programs, shall cease to be eligible to participate in the CSC
Executive Compensation Programs as of the Distribution Date, except as otherwise
provided pursuant to the CSC Executive Compensation Programs.
SECTION 5.2 BONUS AND INCENTIVE PLANS.
(a) Annual Incentive Plan. CSC shall retain all Liabilities for or
related to Active Vlasic Employees payable under the CSC Annual Incentive Plan
to Active Vlasic Employees with respect to the one year performance period
ending on August 2, 1998; provided, however, that CSC shall make such
adjustments to the financial goals, targets, payments and forms of payment as
CSC in its sole discretion deems appropriate to reflect the Distribution. For
periods beginning on or after August 3, 1998, Vlasic shall establish the Vlasic
Annual Incentive Plan covering such of its Active Vlasic Employees as it in its
sole discretion deems appropriate.
(b) LTIP - Restricted Stock Awards for Active Vlasic Employees.
Except as otherwise provided pursuant to the CSC LTIP, CSC shall retain all
Liabilities for Active Vlasic Employees payable under the CSC LTIP with respect
to (i) performance-based restricted shares (the PERFORMANCE AWARDS) for the
performance period ending August 2, 1998 and (ii) time-lapse restricted shares.
With respect to all such awards held by Active Vlasic Employees and awards of
restricted shares of CSC Stock held by CSC Group employees after the
Distribution, the number of such shares shall be adjusted by the Campbell
Conversation Ratio, as set forth in Appendix D, in lieu of receiving shares of
Vlasic Stock pursuant to the Distribution. With respect to Performance Awards
for the performance period ending on August 2, 1998, CSC will adjust the
performance goals for the period beginning Immediately After the Distribution
Date to reflect the Distribution. Active
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Vlasic Employees will receive (i) a full payout of their Performance Awards for
the performance period ending August 2, 1998 if the adjusted performance goals
are met or (ii) a pro-rated payout of their Performance Awards for the
performance period ending August 2, 1998 if the adjusted performance goals are
not met. Performance Awards under the CSC LTIP for Active Vlasic Employees for
performance periods ending after August 3, 1998 will be cancelled.
(c) LTIP - Stock Option Awards for Active Vlasic Employees.
(i) Vested Options. Effective Immediately after the
Distribution Date, each unexercised stock option for CSC Stock held by an Active
Vlasic Employee that was vested as of the Distribution Date shall continue to be
held as a vested option for CSC Stock and issuable under the CSC LTIP; provided,
however, that as soon as practicable after the Distribution Date, the number of
options and the exercise price for such options shall be adjusted, as of
Immediately after the Distribution Date, by the applicable Conversion Formula.
Employment by the Vlasic Group of Active Vlasic Employees holding options for
CSC Stock shall be treated as employment by the CSC Group for purposes of the
CSC LTIP. With respect to the adjusted stock options for CSC Stock exercised by
Active Vlasic Employees, CSC shall be entitled to any tax deduction and any
other treatment related to any such tax deduction with respect to the exercise
of such stock options.
(ii) Unvested Options. Effective Immediately after the
Distribution Date, each stock option for CSC Stock held by an Active Vlasic
Employee that are not vested as of the Distribution Date shall be converted into
unvested options for Vlasic Stock and issuable under the Vlasic LTIP; provided,
however, that as soon as practicable after the Distribution Date, the number of
options and the exercise price for such options shall be adjusted, as of
Immediately after the Distribution Date, by the applicable Conversion Formula.
With respect to the adjusted stock options for Vlasic Stock exercised by Active
Vlasic Employees, Vlasic shall be entitled to any tax deduction and any other
treatment related to any such tax deduction with respect to the exercise of such
stock options.
(d) Deferred Compensation Program. Except as otherwise set forth in
this Section 5.2 or as otherwise specifically provided in one or more CSC
Executive Compensation Programs, effective Immediately after the Distribution
Date, Vlasic shall assume all Vlasic Liabilities for Active Vlasic Employees
under all CSC Deferred Compensation Programs. Vlasic shall administer the
Vlasic Deferred Compensation Program so as to continue all elections by Active
Vlasic Employees under the CSC Deferred Compensation Program assumed under the
Vlasic Deferred Compensation Programs. Vlasic shall administer the Vlasic
Deferred Compensation Program in a manner that will ensure that, as of the
Distribution Date, the investment choices will be substantially similar to the
hypothetical investment choices available under the CSC Deferred Compensation
Programs on the Distribution Date; provided, however, that Vlasic, may in its
sole discretion amend, modify or terminate investment choices after the
Distribution Date. Account amounts stated in whole or in part in CSC phantom
shares as of the Distribution Date, shall be converted into amounts stated in
phantom shares of CSC and Vlasic in a manner consistent with the treatment of
employer securities in the CSC Savings Plans and
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the Vlasic Savings Plans, as determined by CSC. Immediately after the
Distribution Date, Vlasic shall have the right to amend or modify such
hypothetical investment choices.
(e) Mid-Career Hire Pension Plan. Vlasic shall assume, discharge and
hold CSC harmless from all Vlasic Liabilities to or relating to Active Vlasic
Employees under the CSC Mid-Career Hire Pension Plan. Vlasic may, at its sole
discretion, establish a comparable Mid-Career Hire Pension Plan for any or all
of its employees, including any Active Vlasic Employee.
SECTION 5.3 DIRECTOR COMPENSATION PLAN. Prior to and effective on
the Distribution Date, Vlasic shall establish a director compensation plan for
eligible Vlasic Directors.
ARTICLE VI
FOREIGN PLANS AND TRANSITION EMPLOYEES
SECTION 6.1 FOREIGN PLANS. CSC and Vlasic shall use their
reasonable best efforts so that, as soon as practicable after the Distribution
Date, CSC and Vlasic shall agree regarding the treatment of Foreign Plans,
which, to the extent allowed under foreign laws, mirrors the approach outlined
in this Agreement for the various employee benefit plans.
SECTION 6.2 TRANSITION EMPLOYEES. CSC and Vlasic shall use their
reasonable best efforts so that as soon as practicable after the Distribution
Date, CSC and Vlasic shall agree, on a case-by-case basis, regarding the
treatment, for purposes of their respective employee benefit plans, of
individuals whose employment changes between the CSC Group and the Vlasic Group
during an agreed upon period following the Distribution Date.
ARTICLE VII
GENERAL
SECTION 7.1 PAYMENT OF AND ACCOUNTING TREATMENT FOR EXPENSES AND
BALANCE SHEET AMOUNTS.
(a) Expenses. All expenses (and the accounting treatment related to
such expenses) through the Close of the Distribution Date regarding matters
addressed in this Agreement shall be handled and administered in the ordinary
course by CSC and Vlasic in accordance with past CSC accounting and financial
practices and procedures pertaining to such matters. To the extent expenses are
unpaid as of the Close of the Distribution Date that pertain to Active Vlasic
Employees, Vlasic shall be solely responsible for such payment, without regard
to any accounting treatment to be accorded such expense by CSC or Vlasic on
their respective books and records. The accounting treatment to be accorded all
such expenses, whether such expenses are paid by CSC or Vlasic, shall be
determined by CSC.
(b) Balance Sheet Amounts. Vlasic shall assume any balance sheet
liability for any Liabilities assumed by it under this Agreement as of the Close
of the Distribution Date or
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thereafter, with respect to any Active Vlasic Employee. The determination of any
balance sheet liability as of the Close of the Distribution Date shall be
determined by CSC consistent with past accounting practices, consistently
applied.
SECTION 7.2 ACCOUNTING ADJUSTMENTS. Before the Distribution Date,
Vlasic will have established on its books for financial accounting purposes
liabilities and reserves for pension, deferred compensation, welfare and other
employee benefit plan obligations that will be retained or assumed by Vlasic
under this Agreement, and CSC will have adjusted the liabilities and reserves on
its books for financial accounting purposes to take into account Vlasic'
assumption or retention of Liabilities under this Agreement. The initial
adjustments as of the Distribution Date, will be made on an estimated basis.
After the Parties have finally calculated the actual liabilities under this
Agreement, each Party shall appropriately adjust its liabilities and reserves to
reflect the amount of the liabilities and reserves that are properly allocable
to that Party. Except as otherwise provided in Article III and Article VI,
neither Party shall have any obligation to make payments or transfer assets to
the other Party with respect to such adjustments.
SECTION 7.3 NOTICES. All notices, requests, claims and other
communications hereunder shall be in writing and shall be given or made (and
shall be deemed to have been duly given or made upon receipt) by delivery by
hand, by reputable overnight courier service, by facsimile transmission, or by
registered or certified mail (postage prepaid, return receipt requested) to the
respective parties at the addresses (or at such other address for a Party as
shall be specified in a notice given in accordance with this Section 7.3) listed
below:
if to CSC, to: Campbell Soup Company
Campbell Place
Camden, New Jersey 08101
Attn.: Linda A. Lipscomb, Esq.
Fax No.
if to Vlasic, to: Vlasic Foods International Inc.
Campbell Place
Camden, New Jersey 08101
Attn.: Norma B. Carter, Esq.
Fax No.
or to such other address as any Party may, from time to time, designate in a
written notice given in a like manner. Notice given by hand shall be deemed
delivered when received by the recipient. Notice given by mail as set out above
shall be deemed delivered five calendar days after the date the same is mailed.
Notice given by reputable overnight courier shall be deemed delivered on the
next following business day after the same is sent. Notice given by facsimile
transmission shall be deemed delivered on the day of transmission provided
telephone confirmation of receipt is obtained promptly after completion of
transmission.
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SECTION 7.4 AMENDMENT AND WAIVER. This Agreement may not be
altered or amended, nor may rights hereunder be waived, except by an instrument
in writing executed by the Party or Parties to be charged with such amendment or
waiver. No waiver of any term, provision or condition of or failure to exercise
or delay in exercising any rights or remedies under this Agreement, in any one
or more instances, shall be deemed to be, or construed as, a further or
continuing waiver of any such term, provision, condition, right or remedy or as
a waiver of any other term, provision or condition of this Agreement.
SECTION 7.5 SHARING OF PARTICIPANT INFORMATION. CSC and Vlasic
shall share, CSC shall cause each applicable member of the CSC Group to share,
and Vlasic shall cause each applicable member of the Vlasic Group to share,
with each other and their respective agents and vendors (without obtaining
releases) all participant information necessary for the efficient and accurate
administration of each of the CSC Benefit Plans and the Vlasic Benefit Plans
during the Benefits Administration Transition Period. CSC and Vlasic and their
respective authorized agents shall, subject to applicable laws on
confidentiality, be given reasonable and timely access to, and may make copies
of, all information relating to the subjects of this Agreement in the custody of
the other Party, to the extent necessary for such administration. Until the
Close of the Distribution Date, all participant information shall be provided in
the manner and medium applicable to Participating Companies in the CSC Plans
generally, and thereafter until December 31, 1998, all participant information
shall be provided in a manner and medium that is compatible with the data
processing systems of CSC as in effect as of the Close of the Distribution Date,
unless otherwise agreed to by CSC and Vlasic.
SECTION 7.6 ENTIRE AGREEMENT. This Agreement, together with the
Distribution Agreement and all other agreements between the Parties referred to
in the Distribution Agreement (the ANCILLARY AGREEMENTS), constitute the entire
understanding of the Parties with respect to the Distribution, superseding all
negotiations, prior discussions and prior agreements and understandings relating
to such subject matter. To the extent that the provisions of this Agreement are
inconsistent with the provisions of the Distribution Agreement or any other
ancillary agreement, the provisions of this Agreement shall prevail.
SECTION 7.7 PARTIES IN INTEREST. Neither of the Parties may assign
its rights or delegate any of its duties under this Agreement without the prior
written consent of the other Party (which consent shall not be unreasonably
withheld or delayed). This Agreement shall be binding upon, and shall inure to
the benefit of, the Parties and their respective successors and permitted
assigns.
SECTION 7.8 NO THIRD-PARTY BENEFICIARIES; NO TERMINATION OF
EMPLOYMENT. No provision of this Agreement or the Distribution Agreement shall
be construed to create any right, or accelerate entitlement, to any compensation
or benefit whatsoever on the part of any Active Vlasic Employee or other future,
present, or former employee of the CSC Group or the Vlasic Group under any CSC
Plan or Vlasic Plan or otherwise. Without limiting the generality of the
foregoing, except as expressly provided in this Agreement, neither the
Distribution nor the termination of the controlled group status of a member of
the Vlasic Group shall cause any employee to be deemed to have incurred a
termination of employment that by
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itself entitles such individual to the commencement of benefits under any of the
CSC Plans, any of the Vlasic Plans, or any individual agreements.
SECTION 7.9 RIGHT TO AMEND OR TERMINATE ANY PLANS. Nothing in this
Agreement other than those provisions specifically set forth in this Agreement
to the contrary shall preclude Vlasic or CSC, at any time after the Close of the
Distribution Date, from amending, merging, modifying, terminating, eliminating,
reducing, or otherwise altering in any respect any Vlasic Plan or CSC Plan,
respectively, any benefit under any Plan or any trust, insurance policy or
funding vehicle related to any Vlasic Plan or CSC Plan, respectively (the
BENEFIT ACTIONS). Notwithstanding the preceding sentence, however, the Vlasic
Group shall not take any Benefit Action that increases the administrative cost
or burden associated with the affected benefit during the Benefits
Administration Transition Period without obtaining CSC's prior written approval
of such Benefit Action unless the Vlasic Group undertakes to administer or cause
to be administered such affected benefit.
SECTION 7.10 FIDUCIARY AND RELATED MATTERS. Vlasic acknowledges
that CSC will not be a fiduciary with respect to any Vlasic Plans. Vlasic also
acknowledges that CSC shall not be deemed to be in violation of this Agreement
if it fails to comply with any provision of this Agreement based upon its good
faith determination that to do so would violate any applicable fiduciary duties
or standards of conduct under ERISA or other applicable law. Notwithstanding
any other provision in this Agreement, the Parties may take such actions as
necessary or appropriate to effectuate the terms and provisions of this
Agreement.
SECTION 7.11 EFFECT IF DISTRIBUTION DOES NOT OCCUR. If the
Distribution does not occur, then all actions and events that are, under this
Agreement, to be taken or occur effective as of the Close of the Distribution
Date, Immediately after the Distribution Date, or otherwise in connection with
the Distribution, shall not be taken or occur except to the extent specifically
agreed to in writing by Vlasic and CSC.
SECTION 7.12 RELATIONSHIP OF PARTIES. Nothing in this Agreement
shall be deemed or construed by the Parties or any third party as creating the
relationship of principal and agent, or a partnership or joint venture between
the Parties, it being understood and agreed that no provision contained in this
Agreement, and no act of the Parties, shall be deemed to create any relationship
between the Parties other than the relationship set forth in this Agreement.
SECTION 7.13 AFFILIATES. Each of CSC and Vlasic shall cause to be
performed, and hereby guarantees the performance of, all actions, agreements and
obligations set forth in this Agreement to be performed by members of the CSC
Group or members of the Vlasic Group, respectively, where relevant.
SECTION 7.14 AUDITS.
(a) Audit Rights With Respect to Information Provided.
(i) Each of CSC and Vlasic, and their duly authorized
representatives, shall have the right to conduct audits at any time upon
reasonable prior notice, at their own
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expense, with respect to all information provided to it or to any Plan trustee,
recordkeeper or third-party administrator by the other Party. The Party
conducting the audit shall have the sole discretion to determine the procedures
and guidelines for conducting audits and the selection of audit representatives
under this Section. The auditing Party shall have the right to make copies of
any records at its expense, subject to the confidentiality provisions set forth
in the Distribution Agreement, which are incorporated by reference in this
Agreement. The Party being audited shall provide the auditing Party's
representatives with reasonable access during normal business hours to its
operations, computer systems and paper and electronic files, and provide
workspace to its representatives. After any audit is completed, the Party being
audited shall have the right to review a draft of the audit findings and to
comment on those findings in writing within five business days after receiving
such draft.
(ii) The auditing Party's audit rights under this Section shall
include the right to audit, or participate in an audit facilitated by the Party
being audited, of any Subsidiaries and affiliates of the Party being audited and
of any benefit providers and third Parties with whom the Party being audited has
a relationship, or agents of such Party, to the extent any such persons are
affected by or addressed in this Agreement (collectively, the NON-PARTIES). The
Party being audited shall, upon written request from the auditing Party, provide
an individual (at the auditing Party's expense) to supervise any audit of any
such benefit provider or third-Party. The auditing Party shall be responsible
for supplying, at its expense, additional personnel sufficient to complete the
audit in a reasonably timely manner.
(b) Audits Regarding Vendor Contracts. From Immediately after the
Distribution Date through December 31, 1999, CSC and Vlasic and their duly
authorized representatives shall have the right to conduct joint audits with
respect to any vendor contracts that relate to both the CSC Welfare Plans and
the Vlasic Welfare Plans. The scope of such audits shall encompass the review
of all correspondence, account records, claim forms, canceled drafts (unless
retained by the bank), provider bills, medical records submitted with claims,
billing corrections, vendor's internal corrections of previous errors and any
other documents or instruments relating to the services performed by the vendor
under the applicable vendor contracts. CSC and Vlasic shall agree on the
performance standards, audit methodology, auditing policy and quality measures
and reporting requirements relating to the audits described in this Section, and
the manner in which costs incurred in connection with such audits will be
shared.
SECTION 7.15 COLLECTIVE BARGAINING. To the extent any provision of
this Agreement is contrary to the provisions of any applicable collective
bargaining agreement to which CSC or any affiliate of CSC is a party, the terms
of such collective bargaining agreement shall prevail. Should any provisions of
this Agreement be deemed to relate to a topic determined by an appropriate
authority to be a mandatory subject of collective bargaining, CSC or Vlasic may
be obligated to bargain with the union representing affected employees
concerning those subjects. Neither Party will agree to a modification of any
applicable collective bargaining agreement without the consent of the other.
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SECTION 7.16 REQUESTS FOR INTERNAL REVENUE SERVICE RULINGS AND
DETERMINATIONS AND UNITED STATES DEPARTMENT OF LABOR OPINIONS. Vlasic shall
cooperate fully with CSC on any issue relating to the transactions contemplated
by this Agreement for which CSC elects to seek a determination letter or private
letter ruling from the Internal Revenue Service or an advisory opinion from the
United States Department of Labor. CSC shall cooperate fully with Vlasic with
respect to any request for a determination letter or private letter ruling
from the Internal Revenue Service or an advisory opinion from the United States
Department of Labor with respect to any of the Vlasic Plans relating to the
transactions contemplated by this Agreement.
SECTION 7.17 FURTHER ASSURANCES AND CONSENTS. In addition to the
actions specifically provided for elsewhere in this Agreement, each of the
Parties will use its reasonable best efforts to (a) execute and deliver such
further instruments and documents and take such other actions as any other Party
may reasonably request in order to effectuate the purposes of this Agreement and
to carry out the terms of this Agreement and (b) take, or cause to be taken, all
actions, and to do, or cause to be done, all things, reasonably necessary,
proper or advisable under applicable laws, regulations and agreements or
otherwise to consummate and make effective the transactions contemplated by this
Agreement, including, without limitation, using its reasonable best efforts to
obtain any consents and approvals and to make any filings and applications
necessary or desirable in order to consummate the transactions contemplated by
this Agreement; provided that no Party shall be obligated to pay any
consideration therefor (except for filing fees and other similar charges) to any
third-party from whom such consents, approvals and amendments are requested or
to take any action or omit to take any action if the taking of or the omission
to take such action would be unreasonably burdensome to the Party or its Group
or the business thereof. To the extent that either Party is obligated to
deliver shares of the other Party in satisfaction of obligations under employee
or director benefit plans or other arrangements, including, without limitation,
savings plans, stock option plans, stock purchase plans and bonus and incentive
plans, the Party whose shares are required for such purpose shall make such
shares available, consistent with the terms of the relevant Plans, or treasury
shares on such terms as may be appropriate to the transaction.
SECTION 7.18 SEVERABILITY. The provisions of this Agreement are
severable and should any provision of this Agreement be void, voidable or
unenforceable under any applicable law, such provision shall not affect or
invalidate any other provision of this Agreement, which shall continue to govern
the relative rights and duties of the Parties as though such void, voidable or
unenforceable provision were not part of this Agreement.
SECTION 7.19 GOVERNING LAW. Subject to federal law, this Agreement
shall be construed in accordance with, and governed by, the laws of the State of
New Jersey, without regard to the conflicts of law rules of such state.
SECTION 7.20 COUNTERPARTS. This Agreement may be executed in one or
more counterparts each of which shall be deemed an original instrument, but all
of which together shall constitute but one and the same Agreement.
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SECTION 7.21 DISPUTES.
(a) Resolution of any and all disputes arising from or in connection
with this Agreement, whether based on contract, tort, statute or otherwise,
including, but not limited to, disputes in connection with claims by third
parties (collectively, DISPUTES), shall be subject to the provisions of this
Section 7.21; provided, however, that nothing contained in this Agreement shall
preclude either Party from seeking or obtaining (i) injunctive relief or (ii)
equitable or other judicial relief to enforce the provisions of this Agreement
or to preserve the status quo pending resolution of Disputes hereunder.
(b) Either Party may give the other Party written notice of any
Dispute not resolved in the normal course of business. The parties shall attempt
in good faith to resolve any Dispute promptly by negotiation between executives
of the parties who have authority to settle the controversy and who are at a
higher level of management than the persons with direct responsibility for
administration of this Agreement. Within 30 days after delivery of the notice,
the foregoing executives of both parties shall meet at a mutually acceptable
time and place, and thereafter as often as they reasonably deem necessary for a
period not to exceed 15 days, to attempt to resolve the Dispute. All reasonable
requests for information made by one Party to the other will be honored. If the
parties do not resolve the Dispute within such 45 day period (the INITIAL
MEDIATION PERIOD), the parties shall attempt in good faith to resolve the
Dispute by negotiation between (a) in the case of CSC, the Chief Financial
Officer or the Vice President - Treasurer and (b) in the case of Vlasic, the
Chief Financial Officer (collectively, DESIGNATED OFFICERS). Such officers
shall meet at a mutually acceptable time and place (but in any event no later
than 15 days following the expiration of the Initial Mediation Period) and
thereafter as often as they reasonably deem necessary for a period not to exceed
15 days, to attempt to resolve the Dispute.
(c) If the Dispute has not been resolved by negotiation within 75
days of the first Party's notice, or if the Parties failed to meet within 30
days of the first Party's notice, or if the Designated Officers failed to meet
within 60 days of the first Party's notice, either Party may commence any
litigation or other procedure allowed by law.
SECTION 7.22 ASSIGNMENT. Neither of the parties may assign or
delegate any of its rights or duties under this Agreement without the prior
written consent of the other party, which consent will not be unreasonably
withheld. This Agreement shall be binding upon, and shall inure to the benefit
of, the Parties and their respective successors and permitted assigns.
SECTION 7.23 INTERPRETATION. Words in the singular shall be held to
include the plural and vice versa and words of one gender shall be held to
include the other genders as the context requires. The word "including" and
words of similar import when used in this Agreement means "including, without
limitation," unless the context otherwise requires or unless otherwise
specified. The word "or" shall not be exclusive.
SECTION 7.24 HEADINGS. The Article and Section headings contained
in this Agreement are solely for the purpose of reference, are not part of the
agreement of the Parties and shall not in any way affect the meaning or
interpretation of this Agreement.
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* * * * *
IN WITNESS WHEREOF, the Parties have executed and delivered this
Agreement as of the day and year first above written.
CAMPBELL SOUP COMPANY
By: _____________________________
Name:
Title:
VLASIC FOODS INTERNATIONAL INC.
By: _____________________________
Name:
Title:
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Dates Referenced Herein and Documents Incorporated by Reference
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