EXHIBIT 10.31

 

TOOTSIE ROLL INDUSTRIES, INC.
CAREER ACHIEVEMENT PLAN

 

(As Amended and Restated Effective as of January 1, 2005)

 

1.             Purpose.  The purpose of the Career Achievement Plan (the “Plan”)
of Tootsie Roll Industries, Inc. (the “Company”) is to promote the financial
interests and growth of the Company by increasing motivation on the part of its
senior officers and key employees by creating an incentive for them to remain in
the long term employ of the Company and to work to the best of their abilities
for the achievement of the Company’s strategic growth objectives.

 

2.             Participation.  Participation in the Plan will be limited to
those senior officers and other key employees of the Company as the Board of
Directors (the “Board”) in its sole discretion shall designate from time to time
to be eligible to receive Career Achievement Awards hereunder.  The Board may,
in its sole discretion, delegate to the Administrative Committee (as defined in
Section 8) the power to designate those key employees of the Company who shall
be selected for participation in this Plan, provided that the Board reserves the
sole right to determine participation with respect to any key employee of the
Company who is required to comply with the requirements of Section 16 of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”).

 

3.             Career Achievement Awards.  As of the date determined by the
Board for any calendar year during the term of the Plan, the Board may, but
shall not be required to, grant an award to any or all of the participants of
the Plan. Each such award (a “Career Achievement Award”) shall be for a fixed
dollar amount, and shall be calculated based on such formulas or other criteria
as may be established by the Board in its sole discretion. Each Career
Achievement Award shall be communicated in a written notice to the affected
participant within ninety (90)

 

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days of the beginning of the applicable calendar year, setting forth the
performance criteria and the award amount.  Such notice shall be provided to the
participant as soon as practicable after the amount of the Career Achievement
Award has been determined by the Board.  Except as otherwise provided in
Section 5 hereof, once an award has been communicated to a participant pursuant
to this Section 3, such award may not be canceled, reduced or diminished in any
manner without the written consent of the participant.  The Board may, in its
sole discretion, delegate to the Administrative Committee its powers and duties
under this Section 3 with respect to any participant herein other than a
participant who is required to comply with the requirements of Section 16 of the
Exchange Act.

 

4.             Career Achievement Account.

 

(a)           Establishment of Accounts.  There shall be established on the
books of the Company a Career Achievement Account in the name of each
participant in the Plan. Career Achievement Awards made under the Plan shall be
credited to a participant’s Career Achievement Account as of the January 1st
specified in the written notice of the award delivered to the participant. Each
participant’s Career Achievement Account shall consist of the aggregate amount
of such Career Achievement Awards credited thereto, and earnings and losses on
such amounts determined in the manner prescribed by Section 4(b). Nothing
contained in this Section 4 shall require the Company to invest any assets of
the Company in any particular investment vehicle, or to set aside any assets to
provide for the payment of benefits hereunder.

 

(b)           Career Achievement Account Earnings and Losses.

 

(1)           Deemed Investment of Account.  For bookkeeping purposes only, each
participant may from time to time direct that the balance of his or her Career
Achievement

 

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Account be deemed to be invested in certain investment alternatives described in
Section 4(b)(2). Each such direction made by the participant shall be effective
until a new direction is filed by him or her with the Company. If the
participant fails to direct the manner in which any portion of his or her Career
Achievement Account is deemed to be invested, the balance credited to such
account shall be deemed to be invested in any investment alternative designed by
the Board in its sole discretion. The Board shall prescribe rules governing a
participant’s deemed investment direction of his or her Career Achievement
account hereunder, including, but not limited to, the time and manner pursuant
to which a participant may provide deemed investment directions to the Company,
and the frequency at which a participant may make changes with respect to such
investment directions as they relate to the existing balance of his or her
Career Achievement Account as well as to future Career Achievement Awards. 
Although the Company might actually invest assets of the Company according to a
participant’s investment directions, it is not required to do so nor to set
aside an amount equal to all or any portion of a Participant’s Career
Achievement Account, The balance in the participant’s Career Achievement Account
shall be increased by gains or decreased by losses that would be realized or
paid by the Company as if assets of the Company in an amount equal to such
balance were actually invested in the investment alternatives specified by the
participant.

 

(2)           Investment Alternatives.  The Company shall make available a
number of investment alternatives for purposes of determining the deemed
earnings to be credited and the deemed losses to be debited to a participant’s
Career Achievement Account under Section 4(b)(1).  Such investment alternatives
shall be designated from time to time by the Board, including, but not limited
to, (i) for periods prior to a participant’s termination of employment, an
investment alternative the performance of which is based on the yield of the

 

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Moody’s Seasoned Bond Index, (ii) for periods after a participant’s termination
of employment, the yield on five-year United States Treasury Notes, and
(iii) for all periods hereunder, investment alternatives the performance of
which is based on publicly traded mutual funds and other investments designated
by the Board.  The Company also may make available for all periods hereunder an
investment alternative the performance of which is based on the price of the
Company’s common stock (referred to herein as the “Company Stock Alternative”).
Each participant’s proportional interest in the Company Stock Alternative shall
be represented by units of participation, each of which shall be equivalent to
one share of common stock of the Company. The Board shall prescribe
rules relating to the deemed investment of a participant’s Career Achievement
Account among the available investment alternatives, including, but not limited
to, a maximum limitation on the amount that a participant can direct to be
deemed invested in any particular investment alternative, restrictions on a
participant’s ability to direct a deemed transfer from any particular investment
alternative to another, and the manner in which any deemed cash dividends that
are paid with respect to a participant’s units of participation in the Company
Stock Alternative shall deemed to be invested.

 

(3)           Delegation of Powers.  The Board may, in its sole discretion,
delegate to the Administrative Committee its powers and duties under this
Section 4(b).

 

5.             Payment of Career Achievement Account Upon Termination of
Employment.  A participant’s Career Achievement Account shall be paid to the
participant’s designated beneficiary in the event of the participant’s death, or
shall be forfeited, depending upon the time and circumstances of the
participant’s termination of employment, as provided below:

 

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(a)           Termination of Employment Other than for Retirement, Death or
Disability.  Subject to Sections 5(c), 5(d), 5(e) and 5(f) hereof, if a
participant’s employment with the Company terminates other than as a result of
the participant’s retirement, death or permanent disability, the participant
shall be entitled to receive, on the “date of distribution”, a lump sum payment
equal to the “vested” portion of the participant’s Career Achievement Account as
for the date of termination of employment (as such “vested portion is determined
below), plus any earnings credited, and minus any losses debited, to the
participant’s account under Section 4(b)(2) following such date of termination
of employment.  For purposes of this Section 5(a), the “date of distribution”
means the later of (1) the first anniversary of the date of the participant’s
termination of employment or (ii) sixty (60) days after the earlier of the
participant’s 65th birthday or his or her death. The portion of a participant’s
Career Achievement Account which has not “vested” as of the date of the
participant’s termination of employment shall be forfeited, and the participant
shall not be entitled to any payment of such forfeited amount or any earnings or
losses thereon.

 

The “vested” portion of a participant’s Career Achievement Account as of the
date of termination shall equal the aggregate of the “vested” portions of each
Career Achievement Award previously granted to the participant. The “vested’
portion of each Career Achievement Award shall be separately determined and
shall equal the product of the Career Achievement Award (plus any earnings
previously credited, and minus any losses previously debited, to the
participant’s account with respect to such Career Achievement Award under
Section 4(b) hereof) multiplied by the Vested Percentage of such award.  The
Vested Percentage of a Career Achievement Award shall be determined according to
the number of the participant’s consecutive full calendar years of employment
with the Company beginning with the calendar year in which

 

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such award was credited to the participant’s Career Achievement Account and
ending with the calendar year immediately prior to the year in which termination
occurs, pursuant to the following table:

 

Years of
Continuous Employment

 

Vested
Percentage

1

 

20%

2

 

40%

3

 

60%

4

 

80%

5 or more

 

100%

 

For purposes of this Section 5(a), if a participant first becomes an employee of
the Company during the calendar year in which a Career Achievement Award is
credited to such participant’s account, such year shall count as a full calendar
year of employment.

 

(b)           Termination of Employment by Reason of Retirement, Death or
Disability.  Subject to Section 5(a), 5(e) and 5(f) hereof, if a participant’s
employment with the Company terminates by reason of the participant’s
retirement, death or permanent disability, the Company shall pay to the
participant or the beneficiary designated by the participant pursuant to
Section 9(a) hereof, as the case may be, a lump sum amount equal to the full
balance of the participant’s Career Achievement Account as of the date of
termination, plus any earnings credited, and minus any losses debited, to the
participant’s account under Section 4(b)(2) following such termination of
employment. Such payment shall be made not later than sixty (60) days after the
date of the participant’s termination of employment. For purposes of this Plan,
(i) a participant shall be considered to have retired if the participant’s
employment with the Company terminates on or after the participant’s 65th
birthday and (ii) a participant shall be deemed to be permanently disabled if
such participant is unable to perform any substantial gainful activity by

 

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reason of any medically determinable physical or mental impairment which can be
expected to result in death or can be expected to last for a continuous period
of not less than 12 months.

 

(c)           Termination of Employment for Cause.  Notwithstanding any
provision of this Plan to the contrary, if the Board, in its sole discretion,
shall determine that the participant’s employment with the Company was
terminated for “cause” (as defined below), the participant’s Career Achievement
Account shall be forfeited in its entirety, and the participant shall not be
entitled to any payments under this Plan. For purposes of this Plan, “cause”
shall mean any act or conduct by a participant that consists of or constitutes
fraud, theft, dishonesty, alcohol or drug use on the job, willful injury to or
destruction of the Company’s property or property of any person dealing with the
Company, any act or conduct injurious to the goodwill of the Company or its
relations with its customers or any other person dealing with the Company or
derogatory of any of the Company’s methods or products, any violation of the
duty imposed upon employees by contract or by law in their relationship with the
Company, or engaging in any activities described in Section 7(1), 7(2), 7(3) or
7(4) hereof.

 

(d)           Election of Alternative Payment Option.  Notwithstanding Sections
5(a) and 5(b), within sixty (60) days of the receipt of the Career Achievement
Award Notice a participant may elect to receive payment of his or her Career
Achievement Account in the form of annual installment payments in lieu of a lump
sum distribution.  The participant may elect that such installment payments be
made over any whole number of years not less than two nor more than ten.  The
first such installment payment shall be made at the same time as the lump sum
payment described in Section 5(a) or 5(b), as the case may be, would have been
made.  The amount of each installment payment shall be equal to the balance of
the Participant’s Career Achievement Account determined as near as practicable
to the date of payment divided by the

 

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number of annual installment payments remaining to be made.  For the period
during which such installment payments are being made until the date as near as
practicable to the date on which the final installment payment is made, a
participant’s remaining Career Achievement Account shall continue to be adjusted
for earnings and losses pursuant to Section 4(b) hereof.

 

The failure to elect the annual installment payment option, shall be treated as
a deemed election to receive payment in the form of a lump sum.

 

Notwithstanding any provision contained herein to the contrary, payment to a
participant’s beneficiary in the event of the participant’s death shall be made
only in the form of a  lump sum payment. In the case of a participant who had
commenced receiving installment payments prior to the date of his or her death,
such lump sum payment shall be equal to the remaining balance of the
participant’s Career Achievement Account, and shall be paid within ninety (90)
days after the date of the participant’s death.

 

(e)           Forfeiture for Career Achievement Account.  Notwithstanding any
provision of this Plan to the contrary, a participant will forfeit all rights to
any amounts previously credited to his or her Career Achievement Account if,
after the termination of the participant’s employment, the participant engages
in any activities in violation of Section 7 hereof or fails to enter into the
agreement described in Section 7 hereof as provided in such Section 7.

 

(f)            Further Deferral.  To the extent determined by the Board in its
sole discretion, the Board shall have the authority (i) to delay any payments
otherwise due under this Plan to the extent necessary to avoid a limitation on
the deductibility of compensation paid to a participant pursuant to
Section 162(m) of the Internal Revenue Code of 1986 (the “Code”), or

 

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any successor provision, and (ii) to take such action as it shall deem
appropriate to specifically approve or delay any payments otherwise due under
this Plan to a participant who is subject to Section 16 of the Exchange Act in
order to enable such participant to comply with such Section 16. To the extent
any payments under this Plan are deferred under this Section 5(f), such amounts
shall continue to be adjusted for earnings and losses pursuant to
Section 4(b) hereof, and shall be paid at such time or from time to time to the
extent such payments would not cause or increase a limitation on deductibility
under such Section 162(m), or would not result in a participant subject to
Section 16 of the Exchange Act failing to comply with such Section 16, as the
case may be.

 

6.             Immediate Distribution of Career Achievement Accounts Upon Change
of Control of the Company.  Notwithstanding any provision of this Plan to the
Contrary, and provided that the participant enters into the agreement described
in Section 7 hereof as provided in such Section 7, the Company shall pay the
entire balance of a participant’s Career Achievement Account to such participant
in a lump sum payment within three business days after the occurrence of a
“change of control” of the Company. A “change of control” of the Company shall
occur when: (1) any person, including a “group,” as described in
Section 13(d)(3) of the Exchange Act, acquires after the effective date of this
Plan when taken together with equity securities already held by such Persons the
beneficial ownership of, and the right to vote, shares having the right to cast
more than fifty percent (50%) of the votes permitted to be cast in any election
of members to the Board; (2) any person, including a “group,” as described in
Section 13(d)(3) of the Exchange Act,  acquires (or have acquired during the
12-month period ending on the date of the most recent acquisition by such person
or persons) ownership of the equity securities of the Company possessing 30% or
more of the total voting power of the equity

 

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securities of the Company; or (3) as the result of any tender or exchange offer,
substantial purchase of the Company’s equity securities, merger, consolidation,
sale of assets or contested election, or any combination of the foregoing
transactions, the persons who were directors of the Company immediately prior to
such transaction or transactions (together with any new or replacement directors
whose election by the Board, or whose nomination for election by the Company’s
shareholders was approved by a vote of at least a majority of the directors then
still in office who were either directors at the beginning of such period or
whose election or nomination for election was previously so approved) do not
constitute a majority of the Board (or of the board of directors of any
successor to or assignee of the Company) at any time within the twelve (12)
month period following such transaction; except that no event described in
clause (1) or (2) above shall constitute a “change of control” if immediately
after such event Melvin J. Gordon or Ellen R. Gordon, their descendants (and
spouses of such descendants) and any trusts or estates in which such persons
have an interest own, directly or indirectly, shares having the right to cast at
least fifty percent (50%) of the votes permitted to be cast in any election of
members of the Board.

 

7.             Noncompetition.  As a condition to the payment of any portion of
the participant’s Career Achievement Account following a change of control of
the Company pursuant to Section 6 or upon the participant’s termination of
employment with the Company pursuant to Section 5 (other than by reason of the
participant’s death), the participant shall be required to enter into an
agreement with the Company which provides that, for the period commencing on the
effective date of the change of control of the Company or the effective date of
the participant’s termination of employment with the Company, as the case may be
and ending on the first anniversary of the participant’s termination of
employment with the Company, the participant will not:

 

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(1)           directly or indirectly engage in, own, manage, operate,
participate in, render advice to or have any interest in any person, firm,
corporation, or business (whether as an owner, partner, employee, officer,
director, agent, security holder, creditor, consultant, or otherwise) that
engages in any activity which is the same as, similar to, or competitive with
any activity then, or within the prior twelve (12) months, engaged in by the
Company or any affiliate of the Company; or

 

(2)           directly or indirectly solicit for employment or employ or become
employed by any person then, or within the prior twelve (12) months, employed by
the Company or any affiliate of the Company, or request, influence or advise any
person who is or shall be employed by or is in the service of the Company or any
affiliate of the Company to leave such employment or service of the Company or
any affiliate of the Company; or

 

(3)           directly or indirectly influence or advise any competitor of or
anyone intending to compete with the Company any affiliate of the Company to
employ or otherwise engage the services of any person who is or shall be
employed by or is in the service of the Company or any affiliate of he Company;
or

 

(4)           directly or indirectly solicit or accept any business which is the
same as, similar to or competitive with that of the Company or any affiliate of
the Company from customers of the Company or any affiliate of the Company or
request, induce or advise customers of the Company or any affiliate of the
Company to withdraw, curtail or cancel their business with the Company or any
affiliate of the Company.

 

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For purposes of this Plan, the term “affiliate” means any entity engaged in the
same or similar business as the Company or a related business, which is
controlled by or under common control with the Company.

 

8.             Administration of the Plan.

 

(a)           Powers and Duties of the Board.  The Plan shall be administered
and interpreted by the Board. The Board shall, subject to the terms of the Plan,
make or refrain from making Career Achievement Awards, determine the amount of
Career Awards, establish rules and regulations for the administration of the
Plan, impose conditions with respect to competitive employment or other
activities with respect to any such award, and establish the written form to be
used to evidence such awards pursuant to Section 3 hereof.  The Board shall have
full authority to construe and interpret the terms and provisions of the Plan,
to adopt, alter and repeal such administrative rules, guidelines and practices
governing this Plan and to perform all acts,  including the delegation of its
administrative responsibilities as it shall, from time to time, deem advisable,
and to otherwise supervise the administration of this Plan.  All such rules,
regulations and interpretations relating to the Plan which are adopted by the
Board shall be conclusive and binding on all parties.  The Board may correct any
defect, supply any omission or reconcile any inconsistency in the Plan or in any
award granted hereunder, in the manner and to the extent it shall deem necessary
to carry the Plan into effect.

 

(b)           Administrative Committee.  The Board may, in its sole discretion,
appoint a committee of two or more employees of the Company which shall be
designated the “Administrative Committee.”  The Administrative Committee shall
have such powers and responsibilities under this Plan as shall be delegated to
such committee by the Board from time

 

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to time pursuant to resolutions adopted by the Board.  The Board, in its sole
discretion, may remove any member of the Administrative Committee at any time,
may appoint additional employees of the Company to be members of the
Administrative Committee from time to time, and may fill any vacancies that
arise upon the death, resignation or removal of any member of the Administrative
Committee.  The Board also shall have the power, in its sole discretion, to
discontinue the existence of the Administrative Committee at any time and assume
any powers and duties which it previously delegated to such committee.

 

9.             Miscellaneous.

 

(a)           Designation of Beneficiary.  In the event of the death of a
participant, the amount payable under Section 5 hereof shall, unless the
participant shall designate to the contrary as provided below, thereafter be
made to such person or persons who, as of the date payment is to be made under
this Plan, would receive distribution of the participant’s account balance under
the terms of the Tootsie Roll Employee’s Pension Plan.  Notwithstanding the
preceding sentence, a participant may specifically designate the person or
persons (who may be designate successively or contingently) to receive payments
under this Plan following the participant’s death by filing a written
beneficiary designation with the Company during the participant’s lifetime. 
Such beneficiary designation shall be in such form as may be prescribed by the
Company and may be amended from time to time or may be revoked by the
participant pursuant to written instruments filed with the Company during his or
her lifetime.

 

Beneficiaries designated by a participant may be any natural or legal person or
persons, including a fiduciary, such as a trustee of a trust or the legal
representative of an estate.  Unless otherwise provided by the beneficiary
designation filed by a participant, if all of the persons so

 

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designated die before a participant on the occurrence of a contingency not
contemplated in such beneficiary designation, then the amount payable under this
Plan shall be paid to the person or persons determined in accordance with the
first sentence of this Section 9(a).

 

(b)           Assets.  No assets shall be segregated or earmarked in respect of
any Career Achievement Award or Career Achievement Account and no participant
shall have any right to assign, transfer, pledge or hypothecate his or her
interest, or any portion thereof, in his or her Career Achievement Account.  The
Plan and the crediting of Career Achievement Accounts hereunder shall not
constitute a trust and shall be structured solely for the purpose of recording
an unsecured contractual obligation.  All amounts payable pursuant to the terms
of this Plan shall be paid from the general assets of the Company.

 

(c)           Reports.  Until a participant’s entire Career Achievement Account
shall have been paid in full or forfeited, the Company will furnish to the
participant a report, at least annually, setting forth transactions in such
account and the status of such account with respect to the vested and unvested
portions thereof and the earnings and losses related thereto.

 

(d)           Acceleration of Vesting. Notwithstanding any other provision of
this Plan to the contrary, the Board, in its sole discretion, is empowered to
accelerate the vesting of all or a portion of a participant’s Career Achievement
Account for any reason the Board may determine to be appropriate. Neither the
Company nor the Board shall have any obligation to make any such acceleration
for any reason whatsoever.

 

(e)           Liability.  No member of the Board or of the Administrative
Committee shall be liable for any act or action hereunder, whether of omission
or commission, by any other member or employee or by any agent to whom duties in
connection with the administration of

 

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the Plan have been delegated or, member’s bad faith, gross negligence or fraud,
for such member. The Company will fully indemnify hold each member of the Board
and of the Administrative Committee harmless from any liability hereunder,
except in circumstances involving such member’s bad faith, gross negligence or
fraud. The Company, the Board or the Administrative Committee may consult with
legal counsel, who may be counsel for the Company, with respect to its
obligations or duties hereunder, or with respect to any action or proceeding or
any question of law, and shall not be liable with respect to any action taken or
omitted by it in good faith pursuant to the advice of such counsel.

 

(f)            Amendment or Termination.

 

(1) General Rule.  This Plan may be amended or terminated in any respect at any
time by the Board; provided, however, that except as otherwise provided in
Section 9(1) hereof, no amendment or termination of the Plan shall be effective
to reduce any benefits that accrue before the adoption of such amendment or
termination.  If and to the extent permitted without violating the requirements
of Section 409A of the Code, the Board may require that all of the participant’s
Career Achievement Account (including, without limitation, any remaining
benefits payable to participants or beneficiaries receiving distributions in
installments at the time of the termination) be distributed as soon as
practicable after such termination, notwithstanding any elections by
participants or beneficiaries with regard to the timing or form in which their
benefits are to be paid.  If and to the extent that the Board does not
accelerate the timing of distributions on account of the termination of the Plan
pursuant to the preceding sentence, payment of any remaining benefits under the
Plan shall be made at the same times and in the same manner as such
distributions would have been made based upon the most recent effective

 

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elections made by participants and beneficiaries, and the terms of the Plan, as
in effect at the time the Plan is terminated.

 

(2)           Termination and Liquidation Subject to Certain Conditions.  If and
to the extent otherwise permitted by Section 409A of the Code and the Treasury
Regulations thereunder, the Company may terminate and liquidate the Plan if the
following requirements are met:

 

(i) the termination and liquidation does not occur proximate to a downturn in
the financial health of the Company;

 

(ii) the Company terminates and liquidates all agreements, methods, programs and
other arrangements sponsored by the Company that would be aggregated with any
terminated and liquidated agreements, methods, programs, and other arrangements
under Section 1.409A-1(c) of the Treasury Regulations if the participant had
deferrals of compensation under all of the agreements, methods, programs, and
other arrangements that are terminated and liquidated;

 

(iii) no payments in liquidation of the Plan are made within twelve (12) months
of the date the Company takes all necessary action to irrevocably terminate and
liquidate the Plan, other than payments that would be payable under the terms of
the Plan if the action to terminate and liquidate the Plan had not been taken;

 

(iv) all payments are made within twenty-four (24) months of the date the
Company takes all necessary action to irrevocably terminate and liquidate the
Plan; and

 

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(v) the Company does not adopt a new plan that would be aggregated with any
terminated and liquidated plan under applicable Treasury Regulations if the same
participant participated in both plans, at any time within three (3) years
following the date that the Company takes all necessary action to irrevocably
terminate and liquidate the Plan.

 

(g)           Expenses. The Company will bear all expenses incurred by it in
administering this Plan.

 

(h)           Withholding. The Company shall have the right to deduct from any
payment to be made pursuant to this Plan or to otherwise require prior to the
payment of any amount hereunder, payment by the participant of any Federal,
state or local taxes rewired by law to be withheld.

 

(i)            No Obligation. The designation by the Board or the Administrative
Committee of an individual as a participant in any year shall not require the
Board or the Administrative Committee to designate such person to receive a
Career Achievement Award in any other year. Neither this Plan nor any Career
Achievement Awards made hereunder shall create any obligation on the Company to
continue any other existing award plans or policies or to establish or continue
any other programs, plans or policies of any kind. Neither this Plan nor any
Career Achievement Award made pursuant to this Plan shall give any participant
or other employee any right with respect to continuance of employment by the
Company or any of its affiliates or of any specific aggregate amount of
compensation, nor shall there be a limitation in any way on the right of the
Company or any of its affiliates by which an employee is employed to terminate
such employee at any time for any reason whatsoever, nor shall this Plan or any
Career Achievement Award made hereunder create a contract of employment.

 

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(j)            No Assignment Resolution of Disputes. Except as otherwise
permitted under Section 9(a), no right or interest in any Career Achievement
Account under this Plan shall be assignable or transferable, and no right or
interest of any participant in any Career Achievement Account hereunder shall be
subject to any lien, obligation or liability of such participant. In the event
any conflicting demands are made upon the Company with respect to any payments
due as a result of this Plan, provided that the Company shall not have received
prior written notice that said conflicting demands have been finally settled by
court adjudication, arbitration, joint order or otherwise, the Company may pay
to the participant any and all amounts due hereunder and thereupon the Company
shall stand fully relieved and discharged of any further duties or liabilities
under this Plan.

 

(k)           Governing Law. This Plan and all actions taken in connection
herewith shall be governed and construed in accordance with the laws of the
State of Illinois (regardless of the law that might otherwise govern under
applicable Illinois principles of conflict of laws).

 

(1)           Compliance with Section 409A.  This Plan shall be construed in an
manner consistent with the applicable requirements of Section 409A of the Code,
and the Board, in its sole discretion and without the consent of any participant
or beneficiary, may amend the provisions of this Plan if and to the extent that
the Board determines that such amendment is necessary or appropriate to comply
with the applicable requirements of Section 409A of the Code.

 

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IN WITNESS WHEREOF, Tootsie Roll Industries, Inc. has caused this instrument to
be executed in its name and its corporate seal to be hereunder affixed on
this       day of                 , 2008.

 

TOOTSIE ROLL INDUSTRIES, INC.

 

By:

 

 

Title:

 

 

(Corporate Seal)

 

ATTEST:

 

 

 

Title:

 

 

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