UNITED STATES OF AMERICA

Before the

SECURITIES AND EXCHANGE COMMISSION

ADMINISTRATIVE PROCEEDING 

File No. 3-20523

In the Matter of

The Kraft Heinz Co. and Eduardo 

Pelleissone,

Respondents.

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PLAN OF DISTRIBUTION

I. OVERVIEW

1. The Division of Enforcement submitted this Plan of Distribution (the “Plan”) to 

the United States Securities and Exchange Commission (the “Commission”) pursuant to Rule 

1101 of the Commission’s Rules on Fair Fund and Disgorgement Plans (the “Commission’s 

Rules”), 17 C.F.R. § 201.1101. This Plan provides for the distribution of a Fair Fund (the “Fair 

Fund”), comprised of disgorgement, prejudgment interest, and civil money penalties paid by The 

Kraft Heinz Co. (“KHC”) and Eduardo Pelleissone (collectively, the “Respondents”) in the 

above-captioned matter.1 

2. As described more specifically below, the Plan seeks to compensate investors 

who were harmed by the Respondents’ conduct described in the Order, in connection with a 

multi-year expense management scheme. As calculated using the methodology detailed in the 

Plan of Allocation (attached as Exhibit A), investors will be compensated for their losses on 

shares of KHC common stock (the “Security”) that were purchased or acquired between 

February 26, 2016 and February 21, 2019, inclusive (the “Relevant Period”). In the view of the 

Commission staff and the Fund Administrator, this methodology constitutes a fair and reasonable 

allocation of the Fair Fund. 

3. The Commission has custody of the Fair Fund and shall retain control of the 

assets of the Fair Fund. The Plan has been approved by the Commission, and the Commission 

retains jurisdiction over its implementation.

 1

 See Corrected Order Instituting Cease-and-Desist Proceedings, Pursuant to Section 8A of the Securities Act of 

1933 and Section 21C of the Securities Exchange Act of 1934, Making Findings, and Imposing a Cease-and-Desist 

Order, Securities Act Rel. No. 10977 (Sept. 3, 2021) (the “Order”).
2

II. BACKGROUND

4. On September 3, 2021, the Commission issued the Order instituting and 

simultaneously settling cease-and-desist proceedings against the Respondents. In the Order, the 

Commission found that from the last quarter of 2015 to the end of 2018, KHC engaged in 

various types of accounting misconduct, including recognizing unearned discounts from 

suppliers and maintaining false and misleading supplier contracts, which improperly reduced the 

company's cost of goods sold and allegedly achieved “cost savings.” KHC, in turn, touted these 

purported savings to the market, which were widely covered by financial analysts. The 

accounting improprieties resulted in KHC reporting inflated adjusted “EBITDA,” a key earnings 

performance metric for investors. KHC failed to design and maintain effective internal 

accounting controls for its procurement division. As a result, finance and gatekeeping personnel 

repeatedly overlooked indications that expenses were being improperly accounted for. In total, 

the Commission ordered the Respondents to pay $12,500 in disgorgement, $1,711.31 in 

prejudgment interest, and $62,300,000 in civil money penalties, for a collective total of 

$62,314,211.31, to the Commission. The Commission also created the Fair Fund, pursuant to 

Section 308(a) of the Sarbanes-Oxley Act of 2002, so the penalties paid, along with the 

disgorgement and interest paid, can be distributed to harmed investors.2

 

5. The Respondents have paid in full. The Fair Fund has been deposited at the 

United States Department of the Treasury’s Bureau of the Fiscal Service (“BFS”) for investment. 

III. DEFINITIONS

As used in this Plan, the following definitions will apply:

6. “Administrative Costs” means any administrative costs and expenses, including 

without limitation the fees and expenses of the Tax Administrator and the Fund Administrator, 

tax obligations, bond premium expenses, and investment and banking costs. 

7. “Claim Form” means the form designed by the Fund Administrator, in 

consultation with the Commission staff, for the filing of claims in accordance with this Plan. 

The claim form will require, at a minimum, sufficient documentation reflecting any Preliminary 

Claimant’s purchases and dispositions of the Security during the Relevant Period such that 

eligibility under the Plan can be determined, tax identification and other related information from 

the Preliminary Claimant as determined necessary by the Fund Administrator in coordination 

with the Tax Administrator, and a certification that the Preliminary Claimant is not an Excluded 

Party. 

8. “Claim Status Notice” means the notice sent by the Fund Administrator within 

one hundred twenty (120) days of the Claims Bar Date to any Preliminary Claimant that 

submitted a deficient Claim Form. The Claim Status Notice will provide to each Preliminary 

Claimant whose claim is deficient, in whole or in part, the reason(s) for the deficiency and in the 

event the claim is denied, the Claim Status Notice will state the reason(s) for such denial. The 

 2 In addition, $100,000 in civil penalties paid in a related civil action, SEC v. Hofmann, 21-CV-7407 (S.D.N.Y.) has 

been added to the Fair Fund, pursuant to an Order of the Court upon motion by the Commission. Docket No. 13. 
3

Claim Status Notice will also notify the Preliminary Claimant of the opportunity to cure any 

deficiency, request reconsideration, or dispute the determination made by the Fund 

Administrator and provide instructions regarding what is required to do so.

9. “Claims Bar Date” means the date established in accordance with this Plan by 

which a Preliminary Claimant’s Claim Form must be postmarked or submitted electronically in 

order to receive consideration under the Plan. The Claims Bar Date shall be one hundred twenty 

(120) days after the initial mailing of the Plan Notice. Claim Forms submitted by Preliminary 

Claimants postmarked or received after the Claims Bar Date will not be accepted unless the Fund 

Administrator is directed to do so by the Commission staff.

10. “Claims Packet” means the materials relevant to submitting a claim that will be 

provided to Preliminary Claimants who request such materials prior to the Claims Bar Date. The 

Claims Packet will include, at a minimum, a copy of the Plan Notice and a Claim Form (together 

with instructions for completion of the Claim Form).

11. “Determination Notice” shall mean the written notice sent by the Fund 

Administrator to all Preliminary Claimants who timely submitted a Claim Form notifying the 

Preliminary Claimant of its eligibility determination. The Determination Notice will further 

provide each Preliminary Claimant that is determined to be an Eligible Claimant with his, her, or 

its calculated Recognized Loss. The Determination Notice will constitute the Fund 

Administrator’s final ruling regarding the status of the claim.

12. “Distribution Payment” means a payment from the Fair Fund to a Payee in 

accordance with the terms of this Plan.

13. “Eligible Claimant” means a Preliminary Claimant, who is not an Excluded 

Party, who submitted a valid Claim Form and has suffered a Recognized Loss, as calculated in 

accordance with the Plan of Allocation. 

14. “Excluded Party” shall mean:

(a) The Respondents in this matter and the defendant in SEC v. Hofmann, 

21-CV-7407 (SDNY);

(b) Any Person who served at any time from July 2, 2015 through the end of 

the Relevant Period as an officer3 or director of KHC;

(c) Any employee or former employee of KHC or any of its affiliates who has 

been disciplined, terminated, or has otherwise resigned, in connection with 

the conduct described in the Order;

(d) Any Person employed within the procurement division at KHC at any time 

 3 An “officer” excluded under this paragraph is any officer of KHC required to file a Form 3, 4, or 5 with the 

Commission pursuant to Section 16 of the Securities Exchange Act of 1934 to report transactions in the Security 

during the Relevant Period.
4

from July 2, 2015 through the end of the Relevant Period;

(e) Any Person who, as of the Claims Bar Date, has been the subject of 

criminal charges related to the conduct described in the Order or any 

related Commission action;

(f) Any firm, trust, corporation, officer, or other entity in which Respondents 

has or had a controlling interest;

(g) Any Person, firm, trust, corporation, or other entity that beneficially 

owned more than 20% of KHC common stock at any time from July 2, 

2015 through the end of the Relevant Period; 

(h) The Fund Administrator, its employees, and those Persons assisting the 

Fund Administrator in its role as the Fund Administrator; 

(i) Any assigns, creditors, heirs, distributees, spouses, parents, dependent 

children or controlled entities of any of the foregoing Persons or entities in 

Paragraph 14(a)-(h) above; or

(j) Any purchaser or assignee of another Person’s right to obtain a recovery 

from the Fair Fund for value; provided, however, that this provision shall 

not be construed to exclude those Persons who obtained such a right by 

gift, inheritance or devise.

The Claim Form will require claimants to certify that they are not an Excluded Party. All 

Excluded Parties will be deemed ineligible to participate in the distribution of the Fair Fund.

15. “Fair Fund” means the fund created by the Commission pursuant to Section 

308(a) of the Sarbanes-Oxley Act of 2002, for the benefit of investors harmed by Respondents’ 

violations described in the Order.

16. “Net Available Fair Fund” means the Fair Fund, plus any interest or earnings, 

less Administrative Costs. 

17. “Payee” means an Eligible Claimant whose Recognized Loss calculates, in 

accordance with the Plan of Allocation, to a distribution amount equal to or greater than $10.00 

who will receive a Distribution Payment. 

18. “Person” means natural individuals as well as legal entities such as corporations, 

partnerships, or limited liability companies.

19. “Plan Notice” means a written notice from the Fund Administrator to Preliminary 

Claimants informing them of the Fair Fund; the Plan and its eligibility requirements; explaining 

how to submit a claim, including instructions for any online claims process; and how to obtain a 

copy of the approved Plan and Claim Form by request or from the Fair Fund’s website. The Plan 
5

Notice will also be available on the Fair Fund’s website that is maintained by the Fund 

Administrator. 

20. “Plan of Allocation” means the methodology used by the Fund Administrator to 

calculate if a Preliminary Claimant has suffered a Recognized Loss. The Plan of Allocation is 

attached as Exhibit A.

21. “Preliminary Claimant” shall mean a Person, or their lawful successors, 

identified by the Fund Administrator as having possible claim to recover from the Fair Fund 

under this Plan, or a Person asserting prior to the Claims Bar Date that he, she, or it has a 

possible claim to recover from the Fair Fund under this Plan. 

22. “Recognized Loss” means the amount of loss calculated in accordance with the 

Plan of Allocation.

23. “Relevant Period” means the period of time between February 26, 2016 and 

February 21, 2019, inclusive.

24. “Security” refers to shares of Kraft Heinz Company common stock listed on a 

U.S. exchange and registered with the Commission and traded under the symbol KHC during the 

Relevant Period.

25. “Summary Notice” means the notice published in print or internet media that 

shall include, at a minimum, a statement of the purpose of the Fair Fund and the Plan, the means 

of obtaining a Claims Packet, and the Claims Bar Date. The Summary Notice will be published 

online within ten (10) days of the initial mailing of the Plan Notice.

26. “Third-Party Filer” means a third party, including without limitation a nominee, 

custodian, or an intermediary holding in street name, who is authorized to submit and submits a 

claim(s) on behalf of one or more Preliminary Claimants. Third-Party Filer does not include 

assignees or purchasers of claims that are excluded from receiving Distribution Payments under 

paragraph 14(j) above.

IV. TAX COMPLIANCE

27. On December 29, 2021, the Commission appointed Miller Kaplan Arase LLP as 

the tax administrator (the “Tax Administrator”) for the Fair Fund to handle the tax obligations of 

the Fair Fund.

4

 The Tax Administrator will be compensated for reasonable fees and expenses 

from the Fair Fund in accordance with its 2019-2021 Engagement Letter Agreement with the 

Commission.5

28. The Fair Fund constitutes a Qualified Settlement Fund (“QSF”) under Section 

468B(g) of the Internal Revenue Code of 1986, as amended, 26 U.S.C. § 468B(g), and related 

 4

 See Order Appointing Tax Administrator, Exchange Rel. No. 93878 (Dec. 29, 2021). 5

 See Omnibus Order Directing the Appointment of Tax Administrator in Administrative Proceedings that Establish 

Distribution Funds, Exchange Act Rel. No. 85174 (Feb. 22, 2019).
6

regulations, 26 C.F.R. §§ 1.468B-1 through 1.468B-5. The Tax Administrator is the 

administrator of such QSF, for purposes of Treas. Reg. § 1.468B-2(k)(3)(I) and shall satisfy the 

tax-related administrative requirements imposed by Treas. Reg. § 1.468B-2, including, but not 

limited to:

(a) Obtaining a taxpayer identification number; 

(b) Requesting funds necessary for the timely payment of all applicable taxes, 

the payment of taxes for which the Tax Administrator has received funds, 

and the filing of applicable returns; and 

(c) Fulfilling any information reporting or withholding requirements required 

for distributions from the Fair Fund.

29. All tax obligations will be paid from the Fair Fund, subject to the review and 

approval of Commission staff.

V. FUND ADMINISTRATOR

30. On March 8, 2022, the Commission appointed RCB Fund Services LLC, as the 

fund administrator for the Fair Fund (the “Fund Administrator”), and the Fund Administrator has 

obtained a bond in the amount of $62,314,211.31, as ordered.6

 Pursuant to Rule 1105(a) of the 

Commission’s Rules, 17 C.F.R. § 201.1105(a), the Fund Administrator may be removed at any 

time by order of the Commission or hearing officer. 

31. The Fund Administrator will be responsible for administering the Fair Fund in 

accordance with the Plan. This will include, among other things, taking reasonable steps to 

identify and contact Preliminary Claimants; obtaining mailing information for Preliminary 

Claimants; establishing a website and staffing a call center to address inquiries during the claims 

process; developing a claims database; preparing accountings; cooperating with the tax 

administrator appointed by the Commission to satisfy any tax liabilities and to ensure 

compliance with income tax reporting requirements, including but not limited to Foreign 

Account Tax Compliance Act (FATCA); advising Preliminary Claimants of deficiencies in 

claims and providing an opportunity to cure any documentary defects; taking antifraud measures, 

such as identifying false, ineligible and overstated claims; making determinations under the 

criteria established herein as to Preliminary Claimant eligibility; advising Preliminary Claimants 

of final claim determinations; disbursing the Fair Fund in accordance with this Plan, as ordered 

by the Commission; and researching and reconciling errors and reissuing payments, when 

possible.

32. To carry out the purposes of this Plan, the Fund Administrator is authorized to 

make and implement immaterial changes to the Plan upon agreement of the Commission staff. If 

a change is deemed to be material by the Commission staff, Commission approval is required 

prior to implementation by amending the Plan.

 6

 See Order Appointing Fund Administrator and Setting Bond Amount, Exchange Act Rel. No. 94380 (Mar. 8, 

2022).
7 

33. The Fund Administrator may extend any procedural deadline contained in the 

Plan for good cause shown, if agreed upon by the Commission staff. 

34. The Fund Administrator is authorized to enter into agreements with third parties 

as may be appropriate or necessary in the administration of the Fair Fund, provided such third 

parties are not excluded pursuant to other provisions of this Plan. In connection with such 

agreements, the third parties shall be deemed to be agents of the Fund Administrator under this 

Plan. 

35. The Fund Administrator will be entitled to payment from the Fair Fund of 

reasonable fees and expenses, including the bond premium, incurred in the performance of its 

duties (including any such fees and expenses incurred by agents, consultants or third parties 

retained by the Fund Administrator in furtherance of its duties). 

VI. ADMINISTRATION OF THE FAIR FUND

Identification of and Notification to Preliminary Claimants

36. The Fund Administrator will, insofar as practicable, use its best efforts to 

identify Preliminary Claimants from a review of trading records, obtaining records from 

registered broker-dealers and investment advisors, and seeking information from any other 

source available to it. The Fund Administrator may also engage a third party firm, after 

consultation with and approval of the Commission staff, to assist in identifying Preliminary 

Claimants to maximize the participation rate of KHC investors in the Fair Fund. 

37. Within sixty (60) days after Commission approval of the Plan, the Fund 

Administrator shall:

(a) design and submit a Claims Packet, including the Plan Notice and the 

Claim Form, to the Commission staff for review and approval; 

(b) create a mailing and claim database of all Preliminary Claimants based 

upon information identified by the Fund Administrator; 

(c) run a National Change of Address search to retrieve updated addresses for 

all records in the database, thereby ensuring the mailing information for 

Preliminary Claimants is up-to-date;

(d) email and/or mail a Plan Notice to each Preliminary Claimant identified 

by the Fund Administrator and to the Fund Administrator’s list of banks, 

brokers, and other nominees in accordance with paragraph 42 below; 

(e) establish and maintain a website devoted solely to the Fair Fund. The Fair 

Fund’s website, located at www.khcfairfund.com, will make available a 

copy of the approved Plan; provide information regarding the claims 
8 

process and eligibility requirements for participation in the Fair Fund in 

the form of frequently asked questions; include in downloadable form, the 

Claim Form and other related materials; and such other information the 

Fund Administrator believes will be beneficial to Preliminary Claimants;

(f) establish and maintain a toll-free telephone number for Preliminary 

Claimants to call to speak to a live representative of the Fund 

Administrator during its regular business hours or, outside of such hours, 

to hear prerecorded information about the Fair Fund. The toll-free number 

will be listed on all correspondence from the Fund Administrator to 

Preliminary Claimants as well as on the Fair Fund’s website; and

(g) establish and maintain a traditional mailing address and an email address 

which will be listed on all correspondence from the Fund Administrator to 

Preliminary Claimants as well as on the Fair Fund’s website. 

38. The Fund Administrator will publish the Summary Notice on the internet and/or 

in print media acceptable to Commission staff within ten (10) days of the initial mailing of the 

Plan Notice. 

39. The Commission staff retains the right to review and approve any material posted 

on the Fair Fund’s website, any material mailed, and any scripts used in connection with any 

communication with Preliminary Claimants. 

40. In all materials that refer to the Claims Bar Date, the filing deadline will be 

clearly identified with the calendar date, which is one hundred twenty (120) days from the date 

of the initial mailing of the Plan Notice.

41. The Fund Administrator will promptly provide a Plan Notice to any Preliminary 

Claimant upon request made via mail, phone, or email prior to the Claims Bar Date. 

42. The Fund Administrator will send by mail, email, or other means, the Plan Notice 

to the Fund Administrator’s list of banks, brokers, and other nominees, as well as any other 

institutions identified during the outreach process, that may have records of the Security during 

the Relevant Period (collectively, the “Nominees or Custodians”). The Fund Administrator will 

request that these entities, to the extent that they were record holders for beneficial owners of the 

Security: 

(a) within fourteen (14) days of the Nominees’ or Custodians’ receipt of the 

Plan Notice, notify and send the Plan Notice to the respective beneficial 

owners, and, as requested, provide to the beneficial owners a Plan Notice, 

so that the beneficial owners may timely file a claim. The burden will be 

on the Nominees or Custodians to ensure the claims process information, 

including, if requested, the Plan Notice and other relevant materials, is 

properly disseminated to the beneficial owners; and/or 
9 

(b) provide to the Fund Administrator, within fourteen (14) days of receipt of 

the Plan Notice, a list of last known names and addresses for all beneficial 

owners for whom/which they purchased, as the record holder, the Security

during the Relevant Period, so that the Fund Administrator can 

communicate with the beneficial owners directly.

43. At the discretion of the Fund Administrator, in consultation with the Commission 

staff, a reasonable number of additional copies of the Plan Notice shall be made available to any 

Nominee or Custodian requesting it for the purpose of distribution to beneficial owners. 

44. Requests to the Fund Administrator for additional copies of the Plan Notice are 

subject to approval by the Fund Administrator, in consultation with the Commission staff. 

45. Documented reasonable out-of-pocket expenses incurred by the Nominees or the 

Custodians, which would not have been incurred but for compliance with paragraph 42 above, 

shall be reimbursed from the Fair Fund. The amount of such expenses allowed will be at the 

discretion of the Fund Administrator, in consultation with the Commission staff. Unless 

otherwise determined by the Fund Administrator in consultation with the Commission staff, outof-pocket expenses based on the following rates will be considered reasonable: 

(a) a maximum of $0.08 per Plan Notice, plus postage at the pre-sort postage 

rate per Plan Notice actually mailed; 

(b) a maximum of $0.05 per email of Summary Notice or Plan Notice and 

Claim Form link disseminated; or

(c) $0.20 per name, address, and email address provided to the Fund 

Administrator, up to a maximum of amount of $1,500.00. 

46. The Fund Administrator will attempt to locate any Preliminary Claimant whose 

mailing is returned as “undeliverable” and will document all such efforts. The Fund 

Administrator shall use its best efforts to make use of commercially available resources and other 

reasonably appropriate means to obtain updated addresses in response to “undeliverable” notices, 

and forward any returned mail for which an updated address is provided or obtained. The Fund 

Administrator will make available, upon request by the Commission staff, a list of all 

Preliminary Claimants whose Plan Notice have been returned as “undeliverable” due to incorrect 

addresses and for which the Fund Administrator has been unable to locate current addresses. 

Filing a Claim

47. To avoid being barred from asserting a claim, on or before the Claims Bar Date, 

each Preliminary Claimant must submit to the Fund Administrator a properly completed Claim 

Form reflecting such Preliminary Claimant’s claim, together with all required supporting 

documentation as the Fund Administrator, in its discretion, deems necessary or appropriate to 

substantiate the claim. Without limitation, this information may include third party documentary 

evidence of purchases and dispositions of the Security during the Relevant Period, as well as 
10

holdings of the Security at pertinent dates. 

48. Electronic claims submission is encouraged; the Plan Notice will include 

directions on how Preliminary Claimants can submit their claims electronically via the Fair 

Fund’s website. If using the web-based claim filing option, a Preliminary Claimant must submit 

his, her, or its claim to the Fund Administrator by 11:59 p.m. on the Claims Bar Date. The Plan 

Notice will also include directions for submission of claims if the Preliminary Claimant is unable 

to submit his, her, or its claim electronically. 

49. The burden will be upon the Preliminary Claimant to ensure that his, her or its 

Claim Form has been properly and timely received by the Fund Administrator. A Claim Form 

that is postmarked or otherwise received after the Claims Bar Date will not be accepted unless 

the deadline is extended by the Fund Administrator for good cause shown, after consultation 

with the Commission staff. 

50. All Claim Forms and supporting documentation necessary to determine a 

Preliminary Claimant’s eligibility to receive a distribution from the Fair Fund under the terms of 

the Plan must be endorsed by a declaration executed by the Preliminary Claimant under penalty 

of perjury under the laws of the United States. The declaration must be executed by the 

Preliminary Claimant, unless the Fund Administrator accepts such declaration from a Person 

authorized to act on the Preliminary Claimant’s behalf, whose authority is supported by such 

documentary evidence as the Fund Administrator deems necessary. 

51. When submitting claims to the Fair Fund on behalf of its clients, all Third-Party 

Filers must use the electronic filing template provided by the Fund Administrator in this matter. 

Third-Party Filers that do not comply with the template and format provided by the Fund 

Administrator may be rejected. Third-Party Filers must also submit a signed master proof of 

claim and release, as well as proof of authority to file on behalf of the claimant(s) at the time the 

electronic file of transactions is submitted. Failure to do so may result in rejection of the claim.

52. Each Third-Party Filer must establish the validity and amount of each claim in its 

submission. Third-Party Filers must submit such supporting documentary evidence of 

purchases, dispositions, and holdings of the Security as the Fund Administrator deems necessary 

or appropriate to substantiate each individual claim. Without limitation, this includes the 

complete name of the Preliminary Claimant (beneficial account owner) and its TIN (for 

individuals) or EIN (for companies), sufficient contact information to confirm the identity of the 

beneficial owner, and documentation from the original bank, broker or other institution of 

purchases and dispositions of the Security (account statements, confirmations and other 

documentation of purchases and dispositions), as well as holdings of the Security on pertinent 

dates. Documentation generated by the Third-Party Filer as well as affidavits in lieu of 

supporting documentation will not be accepted unless, for good cause, the Fund Administrator 

determines it acceptable. The Fund Administrator will have the right to request, and the ThirdParty Filer will have the burden of providing to the Fund Administrator, any additional 

information and/or documentation deemed necessary by the Fund Administrator to substantiate 

the claim(s) contained in the submission. Documentation from a Third-Party Filer that is not 

acceptable to the Fund Administrator will result in rejection of the affected claim(s). The 
11 

determination of the Fund Administrator to reject a claim for insufficient documentation, as 

reflected on the Final Determination Notice, is final and within the discretion of the Fund 

Administrator. 

53. The receipt of the Security by gift, inheritance, devise, or operation of law will 

not be deemed to be a purchase of the Security, nor will it be deemed an assignment of any claim 

relating to the purchase of such Security unless specifically so provided in the instrument of 

inheritance. The recipient of the Security as a gift, inheritance, devise or by operation of law will 

be eligible to file a Claim Form and participate in the distribution of the Fair Fund to the extent 

the original purchaser would have been eligible under the terms of the Plan. Only one claim may 

be submitted with regard to the same transactions in the Security, and in cases where duplicative 

claims are filed by the donor and donee, the donee claim will be honored, assuming it is 

supported by proper documentation. 

54. Claims on behalf of a retirement plan covered by Section 3(3) of ERISA, 29 

U.S.C.§ 1002(3), which do not include Individual Retirement Accounts and such plan’s 

participants, are properly made by the administrator, custodian or fiduciary of the plan and not 

by the plan’s participants. The Fund Administrator will distribute any payments on such claims 

directly to the administrator, custodian or fiduciary of the retirement plan. The custodian or 

fiduciary of the retirement plan will distribute any payments received in a manner consistent with 

its fiduciary duties and the governing account or plan provisions. 

55. The Preliminary Claimant has the burden of notifying the Fund Administrator of a 

change in his, her or its current address and other contact information, and of ensuring that such 

information is properly reflected on the Fund Administrator's records. 

Claims Review Process

56. The Fund Administrator will review all claim submissions and determine the 

eligibility of each Preliminary Claimant to participate in the Fair Fund by reviewing claim data 

and supporting documentation (or the lack thereof) and verifying the claim. Each Preliminary 

Claimant will have the burden of proof to establish the validity and amount of his, her or its 

claim. The Fund Administrator will have the right to request, and the Preliminary Claimant will 

have the burden of providing to the Fund Administrator, any additional information and/or 

documentation deemed relevant by the Fund Administrator. 

57. The Fund Administrator will provide a Claim Status Notice within one hundred 

twenty (120) days of the Claims Bar Date to each Preliminary Claimant who has filed a deficient 

Claim Form with the Fund Administrator. The Claim Status Notice will provide to each 

Preliminary Claimant whose claim is deficient, in whole or in part, the reason(s) for the 

deficiency (e.g., failure to provide required information or documentation). In the event the 

claim is denied, in whole or in part, the Claim Status Notice will state the reason(s) for such 

denial. The Claim Status Notice will also notify the Preliminary Claimant of the opportunity to 

cure any deficiency, request reconsideration, or dispute the determination made by the Fund 

Administrator and provide instructions regarding what is required to do so. 
12 

58. Any Preliminary Claimant with a deficient claim will have thirty (30) days from 

the date of the Claim Status Notice to cure any deficiencies identified in theClaim Status Notice.

59. Any Preliminary Claimant seeking reconsideration of a denied claim must advise 

the Fund Administrator in writing within thirty (30) days of the date of the Claim Status Notice. 

All requests for reconsideration must include the necessary documentation to substantiate the 

basis upon which the Preliminary Claimant is requesting reconsideration of his, her, or its claim. 

60. The Fund Administrator will have the authority, in its sole discretion, to waive 

technical claim deficiencies and approve claims on a case-by-case basis, or in groups of claims. 

All determinations made by the Fund Administrator in accordance with the Plan in any dispute, 

request for reconsideration, or request to cure a deficient claim will be final and not subject to 

appeal.

Claims Eligibility Determination

61. Within two hundred ten (210) days of the Claims Bar Date, the Fund 

Administrator will complete all claims determinations and send a Determination Notice to all 

Preliminary Claimants who submitted a Claim Form notifying the Preliminary Claimant of its 

eligibility determination. The Determination Notice will further provide each Preliminary 

Claimant that is determined to be an Eligible Claimant with his, her, or its calculated Recognized 

Loss. The Determination Notice will constitute the Fund Administrator’s final ruling regarding 

the eligibility status of the claim.

62. The Fund Administrator may consider disputes of an Eligible Claimant’s 

Recognized Loss calculation if notice of the dispute is presented in writing to the Fund 

Administrator within thirty (30) days of the date of the Determination Notice. The Fund 

Administrator will consult Commission staff as appropriate. Within sixty (60) days of the 

receiving an Eligible Claimant’s notice of dispute, the Fund Administrator will notify the 

Eligible Claimant, in writing, of its calculation of the Eligible Claimant’s Recognized Loss after 

considering the dispute. This notice will constitute the Fund Administrator’s final ruling 

regarding the loss calculations for the claim.

Third Party Review

63. After the Fund Administrator has completed the process of analyzing the claims 

and determining claim amounts in accordance with the Plan, and prior to the distribution of any 

funds, the Fund Administrator will engage an independent, third party firm, not unacceptable to 

Commission staff, to perform a set of agreed upon procedures, review a statistically significant 

sample of claims and ensure accurate and comprehensive application of the Plan of Allocation. 

The Fund Administrator will communicate the results of the review to Commission staff together 

with any written analysis or reports related to the review, and, upon request, will make the firm 

available to the Commission staff to respond to questions concerning the review. 
13 

Distribution Methodology 

64. Any Preliminary Claimant, who is not an Excluded Party, who submitted a valid 

Claim Form and has suffered a Recognized Loss, as calculated in accordance with the Plan of 

Allocation, will be deemed an Eligible Claimant. 

65. No Distribution Payments will be made for less than $10.00. If an Eligible 

Claimant’s Recognized Loss, in accordance with the Plan of Allocation, calculates to a 

distribution amount less than $10.00, that Eligible Claimant will be deemed ineligible to receive 

a Distribution Payment and his, her, or its distribution amount will be reallocated on a pro-rata

basis to Eligible Claimants whose distribution amounts are greater than or equal to $10.00. All 

Eligible Claimants whose Recognized Loss calculates in accordance with the Plan of Allocation, 

to a distribution amount equal to or greater than $10.00 will deemed a Payee and receive a 

Distribution Payment. 

Establishment of a Reserve

66. Before determining the amount of funds available for distribution and calculating 

each Payee’s Distribution Payment, the Fund Administrator, in conjunction with the Tax 

Administrator, will establish a reserve to pay Administrative Costs and to accommodate any 

unexpected expenditures (the “Reserve”).

67. After all disbursements and Administrative Costs are paid, any remaining 

amounts in the Reserve will become part of the Residual described in paragraph 91 below. 

Preparation of the Payment File 

68. Within ninety (90) days following the date of the Determination Notices 

described above, paragraph 61, the Fund Administrator will compile and send to the Commission 

staff the Payee information, including the name, address, calculated Recognized Loss, and the 

amount of the Distribution Payment for all Payees (the “Payee List”). The Fund Administrator 

will also provide a Reasonable Assurances Letter to the Commission staff, representing that the 

Payee List: (a) was compiled in accordance with the approved Plan; (b) is accurate as to Payees’ 

names, addresses, Recognized Losses and amounts of their Distribution Payment; (c) includes 

the number of Payees compensated; (d) the percentage of the Payee’s Recognized Loss being 

compensated by the disbursement from the Fair Fund, and if applicable, the total percentage to 

include all prior disbursements; (e) the total amount of funds to be disbursed; and (f) provides all 

information necessary to make a payment to each Payee.

The Escrow Account 

69. Prior to the disbursement of funds from the Net Available Fair Fund, the Fund 

Administrator will establish an escrow account (the “Escrow Account”) with a United States 

commercial bank that is a well-capitalized financial institution as defined by the Federal Reserve 

Act, Subpart D, 12 C.F.R. 208.43 and that is not unacceptable to the Commission staff (the 
14 

“Bank”), pursuant to an escrow agreement (the “Escrow Agreement”) to be provided by 

Commission staff.

70. The Fund Administrator, pursuant to the Escrow Agreement, shall also establish 

with the Bank a separate deposit account (e.g. controlled distribution account, managed 

distribution account, linked checking and investment account) (the “Distribution Account”), 

insured by the Federal Deposit Insurance Corporation (“FDIC”) up to the guaranteed FDIC pass 

through limit. The Distribution Account shall be linked with the Escrow Account and shall be 

named, and records maintained, in accordance with the Escrow Agreement. 

71. During the term of the Escrow Agreement, the portions of the Fair Fund transferred 

to the Escrow Account (the “Escrow Property”), shall be invested and reinvested in short-term 

U.S. Treasury securities backed by the full faith and credit of the United States Government or 

an agency thereof. The investment shall be, of a type and term necessary to meet the cash 

liquidity requirements for payments to Payees, tax obligations, and/or fees of the Tax 

Administrator and/or Fund Administrator, including investment or reinvestment in a bank 

account insured by the FDIC up to the guaranteed FDIC limit, or in money market mutual funds 

registered under the Investment Company Act of 1940 that invest 100% of their assets in direct 

obligations of the United States Government. 

72. The Fund Administrator shall provide duplicate original bank and/or investment 

statements on any accounts established by the Fund Administrator to the Tax Administrator on a 

monthly basis and shall assist the Tax Administrator in obtaining mid-cycle statements, as 

necessary.

73. The Fund Administrator shall deposit or invest funds in the Escrow and 

Distribution Accounts so as to result in the maximum reasonable net return, taking into account 

the safety of such deposits or investments. In consultation with Commission staff, the Fund 

Administrator shall work with the Bank on an ongoing basis to determine an allocation of funds 

between the Escrow and Distribution Account. 

74. All interest, dividends, and/or income earned by the Escrow Property will accrue 

for the benefit of the Escrow Property. All Administrative Costs associated with the Escrow and 

Distribution Accounts will be the responsibility of the Fund Administrator, who may be 

reimbursed for said costs as provided in this Plan. No such Administrative Costs may be paid to 

the Bank, its agents, and/or its affiliates from the Escrow Property. 

 Distribution of the Fair Fund 

75. The Fund Administrator will seek to distribute the Net Available Fair Fund to all 

Payees only after all Claim Forms have been processed and all Preliminary Claimants whose 

claims have been rejected or disallowed, in whole or in part, have been notified and provided the 

opportunity to contest or cure pursuant to the procedures set forth herein. 

76. Upon the Commission’s staff’s receipt, review, and acceptance of the Payee List 

and Reasonable Assurances Letter from the Fund Administrator, the Commission staff will seek 
15

an Order from the Commission pursuant to Rule 1101(b)(6) of the Commission’s Rules, 17 

C.F.R. § 210.1101(b)(6), to disburse funds from the Net Available Fair Fund to the Bank in 

accordance with the Payee List for distribution by the Fund Administrator in accordance with the 

Plan. All disbursements will be made pursuant to a Commission Order. 

77. Upon issuance of an Order to Disburse, the Commission staff will direct the 

transfer of funds in accordance with the Payee List to the Bank. The Fund Administrator will 

then use its best efforts to commence mailing Distribution Payment checks and/or effect wire 

transfers within ten (10) business days of the release of the funds into the Escrow Account. All 

efforts will be coordinated to limit the time between the Escrow Account’s receipt of the funds 

and the issuance of Distribution Payments.

78. All Distribution Payments will be issued by the Fund Administrator from the 

Distribution Account. All checks will bear a stale date of one hundred eighty (180) days from 

the date of issuance. Checks that are not negotiated by the stale date will be voided, and the 

Bank will be instructed to stop payment on those checks. A Payee’s claim will be extinguished 

if he, she, or it fails to negotiate his, her or its check by the stale date, and the funds will remain 

in the Fair Fund, except as provided in paragraph 87. 

79. All payments will be preceded or accompanied by a communication that includes, 

as appropriate: (a) a statement characterizing the distribution; (b) a statement that the tax 

treatment of the distribution is the responsibility of each Payee and that the Payee should consult 

his, her or its tax advisor for advice regarding the tax treatment of the distribution; (c) a 

statement that checks will be void and cannot be reissued after one hundred eighty (180) days 

from the date the original check was issued; and (d) contact information for the Fund 

Administrator for questions regarding the Distribution Payment. The letter or other mailings to 

Payees characterizing a Distribution Payment will be submitted to the Tax Administrator and 

Commission staff for review and approval. 

80. All Distribution Payments, either on their face or in the accompanying mailing, 

will clearly indicate that the money is being distributed from the Fair Fund established by the 

Commission to compensate investors for harm as a result of securities law violations. 

81. Distribution Payments must be made by check or electronic payment payable to 

the Payee (the beneficial account owner). A Third-Party Filer shall not be the payee of any 

Distribution Payment check or electronic Distribution Payment. Any other payment arrangement 

must be discussed with the Fund Administrator in consultation with the Commission staff and 

must be authorized by the Payee. Compensation to a Third-Party Filer for its services may not 

be paid or deducted from the Distribution Payment. 

82. If, after discussion with the Fund Administrator in consultation with the 

Commission staff, and authorization by the Payee(s), a Distribution Payment is to be made to a 

Third-Party Filer to distribute to the Payee(s), the Third-Party Filer will be required to complete 

a certification, which will require them, at a minimum, to attest that any distribution to the 

custodian, trustee, or investment professional representing multiple potentially eligible beneficial 

owners, will be allocated for the benefit of current or former pooled investors and not for the 
16 

benefit of management. The certification form will be available on the Fair Fund website and 

upon request from the Fund Administrator. All such Third-Party Filers must have an auditable 

mechanism available to the Fund Administrator and the Commission staff to confirm that each 

Payee received the Distribution Payment directed to them. 

83. The submission of a Claim Form and the receipt and acceptance of a Distribution 

Payment by a Payee is not intended to be a release of a Payee’s rights and claims against any 

party.

84. Electronic or wire transfers may be utilized at the discretion of the Fund 

Administrator to transfer approved Distribution Payments to filers of claims on behalf of twenty 

(20) or more Payees. Wire transfers will be initiated by the Fund Administrator using a twoparty check and balance system, whereby completion of a wire transfer will require an 

authorization by two members of the Fund Administrator’s senior staff. 

85. At the discretion of the Fund Administrator, certain costs that were not factored 

into the Reserve, such as bank fees for the return of a payment, may reduce the Payee’s 

Distribution Payment. In such situations, the Fund Administrator will immediately notify the

Tax Administrator of the reduction in the Distribution Payment.

Post Distribution; Handling of Returned or Uncashed Checks; and Reissues 

86. The Fund Administrator shall use its best efforts to make use of commercially 

available resources and other reasonably appropriate means to locate all Payees whose checks 

are returned to the Fund Administrator as “undeliverable.” If new address information becomes 

available, the Fund Administrator will repackage the distribution check and send it to the new 

address. If new address information is not available after a diligent search (and in no event no 

later than one hundred eighty (180) days after the initial mailing of the original check) or if the 

distribution check is returned again, the check shall be voided and the Fund Administrator shall 

instruct the issuing financial institution to stop payment on such check. If the Fund 

Administrator is unable to find a Payee’s correct address, the Fund Administrator, in its 

discretion, may remove such Payee from the distribution and the allocated Distribution Payment 

will remain in the Fair Fund for distribution, if feasible, to the remaining Payees.

87. The Fund Administrator will reissue checks to Payees upon the receipt of a valid, 

written request from the Payee prior to the initial stale date. In cases where a Payee is unable to 

endorse a Distribution Payment check as written (e.g., name changes, IRA custodian changes, or 

recipient is deceased) and the Payee or a lawful representative requests the reissuance of a 

Distribution Payment check in a different name, the Fund Administrator will request, and must 

receive, documentation to support the requested change. The Fund Administrator will review the 

documentation to determine the authenticity and propriety of the change request. If, in the 

discretion of the Fund Administrator, such change request is properly documented, the Fund 

Administrator will issue an appropriately redrawn Distribution Payment to the requesting party. 

Reissued checks will be void at the later of one hundred eighty (180) days from issuance of the 

original check or ninety (90) days from the reissuance, and in no event will a check be reissued 
17 

after one hundred eighty (180) days from the date of the original issuance without the approval 

of Commission staff.

88. The Fund Administrator will make reasonable efforts to contact Payees who have 

failed to negotiate their Distribution Payment check and take appropriate action to follow up on 

the status of uncashed checks at the request of Commission staff. The Fund Administrator may 

reissue such checks subject to the time limits detailed herein. 

Administrative Costs

89. All Administrative Costs will be paid from the Fair Fund in accordance with the 

Commission’s Rules. 

Disposition of Undistributed Funds 

90. If funds remain following the initial distribution and payment of all 

Administrative Costs, the Fund Administrator, in consultation with the Commission staff, may 

seek subsequent distribution of any available remaining funds, pursuant to the Commission’s 

Rules. 

91. A residual within the Fair Fund will be established for any amounts remaining 

after the final disbursement to Payees from the Fair Fund (the “Residual”). The Residual may 

include funds from, among other things, amounts remaining the Reserve, distribution checks that 

have not been cashed, checks or electronic payments that were not delivered or returned to the 

Commission, tax refunds for overpayment or for waiver of IRS penalties. 

92. All funds remaining in the Residual that are infeasible to distribute to investors 

will be returned to the Commission and transferred to the U.S. Treasury after the final 

accounting is approved by the Commission. Returning such money to Respondents would be 

inconsistent with the equitable principle that no Person should profit from their own wrongdoing. 

Therefore, in these circumstances, distributing disgorged funds to the U.S. Treasury is the most 

equitable alternative. 

Filing of Reports and Accountings 

93. In accordance with Rule 1105(f) of the Commission’s Rules, the Fund 

Administrator shall provide to the Commission staff a progress report and a quarterly account 

statement in a format to be provided by Commission staff, within forty-five (45) days of the 

Commission’s approval of the Plan, and shall provide to Commission staff additional reports and 

quarterly account statements within ten (10) days after the end of every calendar quarter. Such 

progress reports shall inform the Commission staff of the activities and status of the Fair Fund 

during the reporting period, and shall specify, at a minimum, the location of the account(s) 

comprising the Fair Fund, including among other things, an interim accounting of all monies in 

the Fair Fund. 
18 

94. When the final distribution is completed, the Fund Administrator shall provide to 

Commission staff a final report summarizing all tasks undertaken and the outcome of its 

administrative efforts. The Fund Administrator shall make arrangement for the final payment of 

all Administrative Costs, and submit a final accounting of all monies received, earned, spent, and 

distributed in connection with the administration of the Plan in a format provided by the 

Commission staff. The Fund Administrator will also submit a report to the Commission staff 

containing the final distribution statistics regarding distributions to individuals and entities, and 

such other information requested by the Commission staff. 

Termination of the Fair Fund 

95. The Fair Fund will be eligible for termination and the Fund Administrator will be 

eligible for discharge after all of the following have occurred (a) a final accounting, in a standard 

accounting format provided by the Commission staff, has been submitted by the Fund 

Administrator and approved by the Commission; (b) all Administrative Costs have been paid; 

and (c) any amount remaining in the Fair Fund has been returned to the Commission for transfer 

to U.S. Treasury. Once the Commission has approved the final accounting, the Commission 

staff will seek an order from the Commission authorizing: (a) the transfer of any amounts 

remaining in the Fair Fund that is infeasible to return to investors, and any amounts returned to 

the Fair Fund in the future that are infeasible to return to investors, to the U.S. Treasury, subject 

to Section 21F(g)(3) of the Exchange Act; (b) discharge of the Fund Administrator; (c) 

cancellation of the Fund Administrator’s bond; and (d) termination of the Fair Fund. 

96. Once the Fair Fund has been terminated and funds, if any, are transferred to the 

U.S. Treasury, no further claims will be allowed and no additional payments will be made 

whatsoever.

Miscellaneous

97. When administering this Plan, the Fund Administrator, and/or each of its 

designees, agents and assigns, may rely on: all applicable law; orders issued by the Commission, 

including orders issued by delegated authority; orders issued by an administrative law judge, if 

any, appointed in this proceeding; and any records, including records containing investor 

information, provided by Commission staff. 

98. Should any additional funds be received pursuant to Commission or Court order, 

agreement, or otherwise, prior to the Commission’s termination of the Fair Fund, such funds will 

be added to the Fair Fund and distributed, if feasible, in accordance with the Plan, pursuant to the 

Commission’s Rules. 

Wind-down and Document Retention 

99. The Fund Administrator will shut down the website, P.O. Box and customer 

service telephone line(s) established specifically for the administration of the Fair Fund six (6) 

months after the transfer of any remaining funds to the Commission, or at such earlier time as the 

Fund Administrator determines with the concurrence of the Commission staff. 
19

100. The Fund Administrator will retain all materials submitted by Preliminary 

Claimants in either paper or electronic form for a period of six (6) years from the date of 

approval of a final fund accounting. Materials maintained in electronic form must be accessible 

and readable for the duration of retention. Pursuant to the Commission staff's direction, the Fund 

Administrator will either turn over to the Commission or destroy all materials, including 

documents in any media, upon expiration of this period.
Exhibit A

PLAN OF ALLOCATION

This Plan of Allocation is designed to compensate investors based on their losses on shares 

of KHC common stock (the “Security”) purchased or acquired between February 26, 2016 and 

February 21, 2019, inclusive, (the “Relevant Period”) due to the misconduct of the Respondents 

relating to a multi-year earnings mismanagement scheme. Investors who did not purchase or acquire 

shares of the Security during the Relevant Period or who are an Excluded Party1 are ineligible to 

recover under this Plan. Artificial inflation in the price of the Security over various date ranges 

surrounding corrective disclosures and average closing prices of the Security have been calculated 

by the Commission’s economists and are reflected in Table A and Table B, respectively.

 

The Fund Administrator will calculate the amount of loss for each share of the Security 

purchased or acquired during the Relevant Period (“Recognized Loss per Share”) as follows: 

For each share of the Security purchased or acquired between February 26, 2016 and 

February 21, 2019, inclusive, and

A. Sold prior to the opening of trading on February 22, 2019, the Recognized Loss per 

Share is $0.00. 

B. Sold after the opening of trading on February 22, 2019 and prior to the close of 

trading on May 22, 2019 (the “Lookback Period”) the Recognized Loss per Share is 

the least of: 

1. the amount of inflation per share on the purchase/acquisition date as set forth 

in Table A below; or 

2. the purchase/acquisition price minus the sale price; or

3. the purchase/acquisition price minus the moving average closing price of the 

Security on the sale date as set forth in Table B below.

C. Held as of the close of trading on May 22, 2019, the last day of the Lookback Period, 

Recognized Loss per Share is the lesser of: 

1. the amount of inflation per share on the purchase/acquisition date as set forth 

in Table A below; or 

2. the purchase/acquisition price minus $32.65, the average closing price of the 

Security during the Lookback Period, as shown in the last row in Table B 

below. 

If the Recognized Loss per Share calculates to a negative number, reflecting a gain, the 

Recognized Loss per Share on such shares will be $0.00. 

 

1 All capitalized terms used herein but not defined shall have the same meanings ascribed to them in the Plan.
2 

All prices mentioned in the calculations exclude all taxes, fees and commissions. Purchases, 

acquisitions, and sales shall be deemed to have occurred on the “contract” or “trade” date as opposed 

to the “settlement” or “payment” date.

A Preliminary Claimant’s Recognized Loss will be the sum of the Recognized Loss per 

Share, as calculated above, on all shares of the Security purchased or acquired during the Relevant 

Period. If the Recognized Loss calculates to a gain, then the Recognized Loss will be $0.00. 

A Preliminary Claimant who is determined to have suffered a Recognized Loss in 

accordance with the calculation above and who is not an Excluded Party will be deemed an Eligible 

Claimant.

Additional Provisions 

FIFO Methodology: Transactions for an Eligible Claimant who made multiple 

purchases/acquisitions and sales of the Security during the Relevant Period will be matched 

according to the first-in, first-out (“FIFO”) method. The earliest sales during the Relevant Period 

will be matched first against any holdings at the opening of the Relevant Period. Once the beginning 

holdings all have been matched, or in the event there are no beginning holdings, then any further 

sales will be matched against the earliest Relevant Period purchases/acquisitions, and 

chronologically thereafter. 

Acquisitions: The receipt or grant of the Security to the Eligible Claimant by gift, devise, 

inheritance, or operation of law during the Relevant Period is not considered an eligible purchase if 

the original purchase did not occur during the Relevant Period. Shares acquired outside the Relevant 

Period will be excluded from the calculation of the Recognized Loss. 

Options and Derivatives: KHC common stock is the only security eligible for recovery under 

this Plan. Option contracts to purchase or sell the Security are not eligible for recovery under the 

Plan. With respect to the Security purchased or sold through the exercise of an option, the 

purchase/sale date is the exercise date of the call and the assignment date of the put, and the 

purchase/sale price is the strike price of the call at the time of exercise and the strike price of the put 

at the time of assignment. Transactions in the Security during the Relevant Period that are pursuant 

to, or in connection with, a swap or another derivative will not be eligible for a recovery and will be 

excluded from the Recognized Loss calculation. 

Short Sales: If the sale date for a share falls before the purchase date, then the share has a 

Recognized Loss per Share of $0.00. The date of covering a short sale is deemed to be the date of 

purchase of the Security and the date of a short sale is deemed to be the date of sale of the Security. 

The earliest Relevant Period purchases will be matched against any short position existing on the 

date prior to the start of the Relevant Period, and not be entitled to a recovery, until that short 

position is fully covered. 

Recognized Loss: Recognized Loss will be the sum of the Recognized Loss per Share, as 

calculated above, on all shares of the Security purchased or acquired during the Relevant Period. If 
3 

the Recognized Loss calculates to a negative number, reflecting a gain, then the Recognized Loss 

will be $0.00. 

Eligible Claimant: A Preliminary Claimant, who is not an Excluded Party, who submitted a 

valid Claim Form and has suffered a Recognized Loss, as calculated above, will be deemed an 

Eligible Claimant. 

Market Loss Limitation: If an Eligible Claimant’s actual market loss on shares of the 

Security purchased/acquired during the Relevant Period is less than his, her or its Recognized Loss, 

then the Eligible Claimant’s Recognized Loss shall be limited to the actual market loss amount. If 

the actual market loss calculates to a gain, then the Eligible Claimant’s Recognized Loss will be 

$0.00. The actual market loss will be calculated as (a) the total purchase amount for shares of the 

Security purchased/acquired during the Relevant Period,2 less (b) the sales proceeds from shares of 

the Security purchased/acquired during the Relevant Period and sold during the Relevant Period or 

during the Lookback Period,3

 and (c) the holding value on the remaining of those shares, which for 

purposes of this calculation will be $32.65 per share, the moving average price as of the last day of 

the Lookback Period.4

Allocation of Funds: If the Net Available Fair Fund is equal to or exceeds the sum of 

Recognized Losses of all Eligible Claimants, each Eligible Claimant’s distribution amount will equal 

his, her or its Recognized Loss, plus “Reasonable Interest” if applicable. If the Net Available Fair 

Fund is less than the sum of the Recognized Losses of all Eligible Claimants, each Eligible 

Claimant’s distribution amount will equal his, her or its “Pro Rata Share” of the Net Available Fair 

Fund (and no Reasonable Interest). In either case, the distribution amount will be subject to the 

“Minimum Distribution Amount.”

Reasonable Interest: If the Net Available Fair Fund exceeds that necessary to pay all Eligible 

Claimants their Recognized Losses in full, the Fund Administrator, in consultation with the Commission 

staff, may include interest in the distribution amount to compensate for the time value of money on 

Recognized Losses. Reasonable Interest will be calculated using the Short-term Applicable Federal Rate 

plus three percent (3%), compounded quarterly from the end of the Relevant Period through the 

approximate date of the disbursement of the funds. If there are insufficient funds to pay Reasonable 

Interest in full to all Eligible Claimants, Reasonable Interest will be awarded on a pro rata basis from the 

excess funds. 

Pro Rata Share: A Pro Rata Share computation is intended to measure Eligible Claimants’ 

Recognized Losses against one another. An Eligible Claimant’s Pro Rata Share will be calculated as the 

ratio of his, her, or its Recognized Loss to the sum of Recognized Losses of all Eligible Claimants. 

 

2 Purchases during the Relevant Period to cover short positions will be included in the calculation of actual market loss if 

the purchase is matched to a short sale during the Relevant Period. Purchases/acquisitions that are not eligible for 

recovery will not be considered for purposes of calculating the actual market loss.

3 Sales of the Security during the Relevant Period will be matched first against the opening position and the proceeds of 

such sales will not be considered for purposes of calculating the actual market loss. Short sales will be considered for 

purposes of calculating the actual market loss.

4 Any open short positions at the end of the Lookback Period will be ignored for purposes of calculating the actual 

market loss.
4 

Minimum Distribution Amount: The Minimum Distribution Amount will be $10.00. An 

Eligible Claimant whose distribution amount is less than the Minimum Distribution Amount will be 

deemed ineligible to receive a Distribution Payment and his, her, or its distribution amount will be 

reallocated on a pro rata basis to Eligible Claimants whose distribution amounts are greater than or 

equal to the Minimum Distribution Amount. 

Payee: An Eligible Claimant whose distribution amount (inclusive of Reasonable Interest, if 

any) equals or exceeds the Minimum Distribution Amount will be deemed a Payee and will receive a 

Distribution Payment for their distribution amount. 

Prior Recovery: To avoid payment of a windfall, the Distribution Payment will be no larger 

than the Payee’s Recognized Loss minus the amount of any compensation for the loss that resulted 

from the conduct described in the Order that was received from another source (e.g., class action 

settlement), to the extent known by the Fund Administrator. Reasonable Interest, if awarded, may 

be added to such Distribution Payment. 
5

Table A: KHC Common Stock Inflation Schedule

Date Range Inflation per Share

February 26, 2016 — February 21, 2019 $9.78

On or after February 22, 2019 $0.00

Table B: KHC Common Stock Moving Average Closing Price, February 22, 2019 – May 22, 2019

Moving 

Average 

Closing Price 

from 

February 22, 

2019 to Date 

Shown Date

Moving 

Average 

Closing Price 

from 

February 22, 

2019 to Date 

Shown Date

Moving 

Average 

Closing Price 

from 

February 22, 

2019 to Date 

Shown

2/22/2019 $34.95 3/25/2019 $32.61 4/24/2019 $32.72

2/25/2019 $34.59 3/26/2019 $32.62 4/25/2019 $32.72

2/26/2019 $34.10 3/27/2019 $32.62 4/26/2019 $32.73

2/27/2019 $33.63 3/28/2019 $32.63 4/29/2019 $32.74

2/28/2019 $33.54 3/29/2019 $32.63 4/30/2019 $32.75

3/1/2019 $33.35 4/1/2019 $32.63 5/1/2019 $32.75

3/4/2019 $33.33 4/2/2019 $32.61 5/2/2019 $32.74

3/5/2019 $33.30 4/3/2019 $32.60 5/3/2019 $32.74

3/6/2019 $33.25 4/4/2019 $32.60 5/6/2019 $32.74

3/7/2019 $33.11 4/5/2019 $32.62 5/7/2019 $32.73

3/8/2019 $33.02 4/8/2019 $32.63 5/8/2019 $32.73

3/11/2019 $32.95 4/9/2019 $32.64 5/9/2019 $32.73

3/12/2019 $32.87 4/10/2019 $32.65 5/10/2019 $32.72

3/13/2019 $32.83 4/11/2019 $32.66 5/13/2019 $32.71

3/14/2019 $32.77 4/12/2019 $32.68 5/14/2019 $32.70

3/15/2019 $32.73 4/15/2019 $32.69 5/15/2019 $32.70

3/18/2019 $32.69 4/16/2019 $32.70 5/16/2019 $32.69

3/19/2019 $32.66 4/17/2019 $32.70 5/17/2019 $32.69

3/20/2019 $32.62 4/18/2019 $32.71 5/20/2019 $32.68

3/21/2019 $32.63 4/22/2019 $32.71 5/21/2019 $32.67

3/22/2019 $32.61 4/23/2019 $32.72 5/22/2019 $32.65