Exhibit 10.9
SECOND AMENDMENT TO THE PBGC-RJR NABISCO HOLDINGS CORP.-
▇.▇. ▇▇▇▇▇▇▇▇ TOBACCO COMPANY AGREEMENT EFFECTIVE AS OF MAY 20, 1999
THIS SECOND AMENDMENT to the Agreement by and among the Pension Benefit
Guaranty Corporation, RJR Nabisco Holdings Corp. and ▇.▇. ▇▇▇▇▇▇▇▇ Tobacco
Company is made and entered into by and between the Pension Benefit Guaranty
Corporation, ▇.▇. ▇▇▇▇▇▇▇▇ Tobacco Holdings, Inc., and ▇.▇. ▇▇▇▇▇▇▇▇ Tobacco
Company, and is effective as of January 7, 2002.
DECLARATIONS
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Effective May 20, 1999, the Pension Benefit Guaranty Corporation ("PBGC"), RJR
Nabisco Holdings Corp. and ▇.▇. ▇▇▇▇▇▇▇▇ Tobacco Company ("Company") entered
into an Agreement ("First Agreement"); and
Effective June 14, 1999, PBGC, ▇.▇. ▇▇▇▇▇▇▇▇ Tobacco Holdings, Inc. ("RJR") and
Company executed an Amendment to the Agreement ("Amendment") substituting RJR
for Company as the party that is obligated to meet all of the obligations of the
First Agreement (the First Agreement as modified by the Amendment is hereinafter
referred to as the "Agreement"); and
Under section III of the Agreement, as amended, RJR is required to make certain
contributions to the ▇.▇. ▇▇▇▇▇▇▇▇ Retirement Plan (the "Plan"); RJR is current
to date on all contributions required under the Agreement; and
RJR now wishes to prepay all future contributions required under the Agreement;
PBGC and RJR have agreed that this prepayment amount shall be at least $183
million; and
Under section VI of the Agreement, RJR must provide an irrevocable Letter of
Credit to the PBGC; and
Under section IX(f) of the Agreement, RJR must provide PBGC's Corporate Finance
and Negotiations Department with advance written notice of any material
refinancing of debt or material change in debt amortization schedule; and
NOW THEREFORE, RJR, Company, and PBGC agree to the following:
1. Section III of the Agreement is replaced in its entirety with the
following:
III. Required Contributions to the Plan:
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On or before January ▇, ▇▇▇▇ ▇▇▇ shall make a $183 million cash
contribution to the Plan, subject to any limitations contained herein, including
but not limited to Section IV. For the Plan Years ending December 31, 2001 and
December 31, 2002, the "Required Contributions" to the Plan shall be $116
million ( $58 million for Plan Year 2001, ending December 31,2001 and $58
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million for Plan Year 2002, ending December 31, 2002) plus the normal cost as
used for Code ss. 412(b)(2)(A) for each of these Plan Years . The $183 million
cash contribution is expected to exceed the Required Contributions for Plan
Years 2001 and 2002. If the $183 million cash contribution is less than the
Required Contributions, RJR will make an additional cash contribution in the
amount of the deficiency on or before June 1, 2003. As further described in
Section V of this Agreement, to the extent that the Required Contributions
exceeds the minimum funding contributions required under Code ss. 412, it shall
be carried as a credit balance for the duration of the Agreement. If the $183
million cash contribution exceeds the Required Contributions for Plan Years 2001
and 2002, the excess shall not be considered when determining the Required
Credit Balance and the Plan's actuary will reconcile annually, the resulting
discrepancy between the Plan's actual credit balance and the Required Credit
Balance.
2. Section V of the Agreement shall be replaced in its entirety with the
following:
V. Required Credit Balance
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RJR shall maintain the Required Credit Balance for the term of
this Agreement. For each Plan Year after 2000, the Required Credit
Balance shall be
(1) The Plan's credit balance in its Funding Standard Account as
of the end of the prior Plan Year (the credit balance as of
the end of the 2000 Plan Year was $404,950,851; and
(2) The Required Contributions under Section III of this Agreement
to the extent that making the Required Contributions produces
a credit balance; and
(3) Interest at the Funding Standard Account Rate to the end of
the Plan Year for all amounts under subsections (1)-(2) above.
3. Section VI of the Agreement is replaced in its entirety with the
following:
VI. Return of Letter of Credit
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Upon receipt by PBGC of written confirmation from RJR that the
cash contribution of $183 million has been deposited in the Plan's
trust account in accordance with Section III of the Agreement, PBGC
shall return to RJR the Letter of Credit which PBGC retains as
beneficiary.
4. Section VII of the Agreement is deleted in its entirety. All subsequent
sections of the Agreement shall be renumbered to conform with this change.
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5. Subparagraph (f) of Section IX of the Agreement, as renumbered Section
VIII(f) under this Second Amendment, is modified to read as follows
(subparagraphs (a) through (e), and (g) through (j) remain unchanged):
VIII. Notice Requirements
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* * *
(f) Written notice thirty (30) days prior to any material
refinancing of private debt or material change in any private
debt amortization schedule, except that RJR is not required to
notify PBGC of borrowings and timely repayments under a
revolving credit facility. However, RJR shall notify PBGC of
any material change in RJR's debt amortization schedules if
such change is due to violation(s) of the terms of RJR's
credit facility. This notice provision is not intended to
require RJR to provide PBGC with notice of public debt
security transactions that RJR must report to the United
States Securities and Exchange Commission. However, PBGC
reserves the right to contact RJR with questions about any
public debt securities transactions.
6. A subparagraph (k) is added to Section IX of the Agreement, as
renumbered Section VIII under this Second Amendment, to read as follows:
VIII. Notice Requirements
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* * *
(k) A copy, within ten (10) business days after filing the Form
5500, of the Plan actuary's annual reconciliation of any
discrepancy between the Plan's actual credit balance and the
Required Credit Balance.
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7. Except as the Agreement is modified by this Second Amendment, the
Agreement remains unchanged and in full force and effect, and the parties hereby
ratify and affirm the Agreement as modified hereby.
IN WITNESS WHEREOF, the parties have signed and agreed as of the date first
written above.
PENSION BENEFIT GUARANTY CORPORATION
Date: 1/08/02 By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Chief Negotiator and Director
Corporate Finance and Negotiations Department
▇.▇. ▇▇▇▇▇▇▇▇ TOBACCO HOLDINGS, INC.
Date: 1/08/02 By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, III
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, III
Title: VP, Deputy General Counsel and Secretary
▇.▇. ▇▇▇▇▇▇▇▇ TOBACCO COMPANY
Date: 1/08/02 By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
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Name: ▇▇▇▇ ▇. ▇▇▇▇
Title: SVP & Treasurer
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