UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Thirteen Weeks Ended May 4, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
--------------- ---------------
Commission File No. 1-4844
ECKERD CORPORATION
(Exact name of registrant as specified in charter)
DELAWARE 13-3302437
(State of incorporation) (I.R.S. Employer Identification No.)
8333 Bryan Dairy Road
Largo, Florida 34647
(Address and zip code of principal executive offices)
(813) 399-6000
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes X No
--- ---
As of June 1, 1996, 70,071,072 shares of Common Stock, $.01 par value, were
outstanding.
1
<TABLE>
<CAPTION>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
ECKERD CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS EXCEPT SHARE DATA)
Unaudited Audited
ASSETS 5/4/96 2/3/96
----------- ----------
<S> <C> <C>
Current assets:
Cash $ 8,706 7,922
Receivables, less allowance for doubtful receivables of $3,000 88,775 70,137
Merchandise inventories 857,185 835,551
Prepaid expenses and other current assets 3,842 4,396
----------- ----------
Total current assets 958,508 918,006
----------- ----------
Property, plant and equipment, at cost 660,071 634,023
Less accumulated depreciation 296,270 282,974
----------- ----------
Net property, plant and equipment 363,801 351,049
----------- ----------
Excess of cost over net assets acquired, less
accumulated amortization 61,513 62,162
Favorable lease interests, less accumulated amortization 130,723 131,961
Unamortized debt expense 5,883 6,086
Other assets 32,112 31,055
----------- ----------
$1,552,540 1,500,319
=========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Bank debit balances $ 32,908 59,620
Current installments of long-term debt 874 1,020
Accounts payable 301,523 311,411
Accrued expenses 248,181 234,957
----------- ----------
Total current liabilities 583,486 607,008
----------- ----------
Other noncurrent liabilities 136,718 136,772
Long-term debt, excluding current installments 737,472 701,798
Stockholders' equity:
Preferred stock of $.01 par value.
Authorized 20,000,000 shares; none issued - -
Voting common stock of $.01 par value.
Authorized 96,481,272 shares; issued 70,062,202
and 69,937,790 700 700
Nonvoting common stock of $.01 par value.
Authorized 3,518,728 shares; none issued - -
Capital in excess of par value 318,367 317,654
Retained deficit (224,203) (263,613)
----------- -----------
Total stockholders' equity 94,864 54,741
----------- -----------
$1,552,540 1,500,319
=========== ===========
See accompanying notes to condensed consolidated financial statements.
</TABLE>
2
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<CAPTION>
ECKERD CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(IN THOUSANDS EXCEPT PER SHARE DATA)
Thirteen Weeks Ended
---------------------------
5/4/96 4/29/95
---------- -----------
<S> <C> <C>
Sales and other operating revenue $1,354,619 1,219,594
---------- -----------
Costs and expenses:
Cost of sales, including store
occupancy, warehousing and
delivery expense 1,051,423 939,488
Operating and administrative expenses 237,533 220,591
---------- -----------
Earnings before interest expense and income taxes 65,663 59,515
Interest expense:
Interest expense, net 14,886 19,817
Amortization of original issue discount
and deferred debt expenses 253 539
---------- -----------
Total interest expense 15,139 20,356
---------- -----------
Earnings before income taxes 50,524 39,159
Income tax expense 11,114 8,615
---------- -----------
Net earnings for the period $ 39,410 30,544
========== ===========
Net earnings per common share $ .55 .47
========== ===========
See accompanying notes to condensed consolidated financial statements.
</TABLE>
3
<TABLE>
<CAPTION>
ECKERD CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(IN THOUSANDS)
Thirteen Weeks Ended
-------------------------------
5/4/96 4/29/95
Cash flows from operating activities: ------------- -------------
<S> <C> <C>
Net earnings for the period $ 39,410 30,544
Adjustments to reconcile net earnings for the period to net cash provided
by operating activities:
Depreciation and amortization 22,362 19,537
Amortization of original issue discount
and deferred debt expenses 253 539
Increase in receivables, merchandise
inventories and prepaid expenses (39,718) (4,858)
Decrease in accounts payable and
accrued expenses (2,052) (16,568)
------------- -------------
Net cash provided by operating activities 20,255 29,194
------------- -------------
Cash flows from investing activities:
Additions to property, plant and equipment (25,804) (15,694)
Sale of property, plant and equipment 242 395
Acquisition of certain drug store assets (860) (1,424)
Other (2,529) 1,754
------------- -------------
Net cash used in investing activities (28,951) (14,969)
------------- -------------
Cash flows from financing activities:
Decrease in bank debit balances (26,712) (34,706)
Additions to long-term debt - 312
Reductions of long-term debt (472) (489)
Net additions under current credit agreement 36,000 21,453
Other 664 292
------------- -------------
Net cash provided by (used in) financing
activities 9,480 (13,138)
------------- -------------
Net increase in cash 784 1,087
Cash at beginning of period 7,922 8,898
------------- -------------
Cash at end of period $ 8,706 9,985
============= =============
See accompanying notes to condensed consolidated financial statements.
</TABLE>
4
ECKERD CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(IN THOUSANDS)
Note 1.
-------
The condensed consolidated financial statements include the accounts of
the Company and its subsidiaries, and were prepared from the books and
records of the Company without audit or verification and in the opinion
of management include all adjustments (none of which were other than
recurring accruals) necessary to present a fair statement of results
for such periods. It is suggested that these condensed consolidated
financial statements should be read in conjunction with the financial
statements and notes filed as part of the Form 10-K report for the
fiscal year ended February 3, 1996. The results of operations of the
periods indicated should not be considered as necessarily indicative of
operations for the full year.
Certain amounts have been reclassified in the February 3, 1996
condensed consolidated balance sheet to conform to the May 4, 1996
presentation.
Note 2.
-------
Substantially all inventories are determined on a last-in, first-out
(LIFO) cost basis. At May 4, 1996 and February 3, 1996 inventories
would have been greater by approximately $96,100 and $91,900,
respectively, if inventories were valued on a first-in, first-out
(FIFO) cost basis. Since LIFO inventory costs can only be determined at
the end of each fiscal year when inflation rates and inventory levels
are finalized, estimates of LIFO inventory costs are used for interim
financial statements. The cost of merchandise sold is calculated on an
estimated basis and adjusted based on inventories taken during the
fiscal year.
Note 3.
-------
The weighted average number of shares outstanding for thirteen weeks
ended May 4, 1996 and April 29, 1995 were 71,887 in 1996 and 65,626 in
1995.
Note 4.
-------
All share information in these condensed consolidated financial
statements reflect the two-for-one stock split effected in the form of
a stock dividend which was payable to stockholders of record April 22,
1996 and paid on May 13, 1996.
Note 5.
-------
Effective February 4, 1996, the Company adopted Statement of Financial
Accounting Standard No. 123, "Accounting for Stock Based Compensation"
(SFAS No. 123). This standard allows the Company to select either a
fair value based method or the current intrinsic value based method of
accounting for employee stock-based compensation. The Company retained
the intrinsic value method of accounting and, therefore, the adoption
of this standard did not have a material effect on the Company's
financial statements. The disclosure only provisions, as permitted by
SFAS No. 123, will be disclosed annually in the Company's audited
consolidated financial statements.
5
Item 2. Management's Discussion and Analysis of Results of Operations and
Financial Condition.
ECKERD CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
Results of Operations
The Company's sales and other operating revenue for the first quarter
of fiscal 1996 was $1.4 billion, an 11.1% increase over the first
quarter of fiscal 1995. Sales benefited from significant increases in
prescription sales as well as from increases in front end sales and
from the acquisition of certain Florida drug stores from Rite Aid (the
"Florida Rite Aid Acquisition") at the beginning of the third quarter
of fiscal 1995. Prescription sales were $751.6 million, a 16.0%
increase over the first quarter of fiscal 1995. In addition, front end
sales increased to $601.2 million, a 5.6% increase over the first
quarter of fiscal 1995. Comparable drug store sales (stores open for
one year or more, excluding 0.7% from the impact of relocated stores
open less than one year) increased 8.9%, compared to an 8.6% increase
in the first quarter of fiscal 1995. The increase in comparable drug
store sales was primarily attributable to the increase in sales of
prescription drugs. Comparable drug store sales growth was also
positively affected by increased sales of non-prescription items in the
health/wellcare, cosmetics and convenience categories.
Prescription sales as a percentage of drug store sales were
approximately 55.6% as compared with approximately 53.1% for the first
quarter of fiscal 1995. The growth in prescription sales was primarily
the result of increased managed care prescription sales, the Company's
competitive cash pricing strategy and the Florida Rite Aid Acquisition.
These strong sales were in spite of a more severe cough, cold and flu
season in the first quarter of fiscal 1995 compared to the first
quarter of fiscal 1996. Managed care prescription sales increased to
approximately 73.9% of the Company's prescription sales for the first
quarter of fiscal 1996 from approximately 68.9% in fiscal 1995. The
Company expects prescription sales to managed care payors, in terms of
both dollar volume and as a percentage of total prescription sales, to
continue to increase in fiscal 1996 and for the foreseeable future.
Managed care payors typically negotiate lower prescription prices than
those on non-managed care prescriptions, resulting in decreasing gross
profit margins on the Company's prescription sales. However, contracts
with managed care payors generally increase the volume of prescription
sales and gross profit dollars.
6
As a percentage of sales, cost of sales and related expenses were 77.6%
compared to 77.0% for the first quarter of fiscal 1995. The increase in
cost of sales and related expenses as a percentage of sales resulted
primarily from the continued increase in managed care prescription
sales which generally have lower gross profit margins than non-managed
care prescription sales. The LIFO charge was $4.2 million compared to
$2.9 million for the first quarter of fiscal 1995.
Operating and administrative expenses were $237.5 million, a 7.7%
increase over the first quarter of fiscal 1995. As a percentage of
sales, operating and administrative expenses decreased to 17.5% from
18.1% for the first quarter of fiscal 1995. The decrease in operating
and administrative expenses as a percentage of sales resulted primarily
from operating efficiencies related to higher sales and cost controls
which helped produce lower costs as a percentage of sales in such
expense categories as payroll and insurance.
Earnings before interest expense and income taxes was $65.7 million, a
10.3% increase over the first quarter of fiscal 1995. The increase in
earnings before interest expense and income taxes was due primarily to
the increase in gross profit dollars as a result of higher sales and
other operating revenue, and the decrease in operating and
administrative expenses as a percentage of sales due to improved
productivity and expense control compared to the first quarter of
fiscal 1995.
Total interest expense was $15.1 million, a decrease of 25.6% from the
first quarter of fiscal 1995. The decrease in interest expense was due
to lower average borrowings, lower bank loan interest spreads and the
early retirement of high interest cost subordinated debentures in the
second and third quarters of fiscal 1995.
Income tax expense for the first quarter of fiscal 1996 and 1995 was
$11.1 million and $8.6 million, respectively, an effective income tax
rate of 22%. Income tax expense in the first quarters of both fiscal
1996 and 1995 represents alternative minimum tax and state income taxes
for the Company, and reflects the utilization of net operating loss
carryforwards.
As a result of the foregoing factors, the Company had net earnings of
$39.4 million, compared to $30.5 million for the first quarter of
fiscal 1995, an increase of $8.9 million or 29.0%.
At May 4, 1996 the Company operated 1,715 Eckerd Drug stores and 517
Eckerd Express Photo labs.
7
Financial Condition and Liquidity
At May 4, 1996, the Company had $496.0 million in borrowings
outstanding under its bank credit agreement ($220.0 million under the
term loan facility and $276.0 million under the revolving loan
facility) and $125.1 million available for borrowing under the
revolving loan facility portion of the bank credit agreement which is
net of $98.9 million of letters of credit. The term loan facility of
$220.0 million amortizes in quarterly payments of $10.0 million at the
end of each of the first three quarters and $20.0 million at the end of
the fourth quarter of each fiscal year for a total amortization of
$50.0 million annually, and matures in full in November 2000. The
revolving loan facility of $500.0 million matures in full in November
2000. At May 4, 1996 the Company had excess availability under the
revolving loan commitment and accordingly did not treat the required
amortization repayments as current.
On May 4, 1996 the Company had working capital of $375.0 million and a
current ratio of 1.6 to 1 compared to $311.0 million and 1.5 to 1 at
February 3, 1996. Cash flow provided by operating activities decreased
$8.9 million to $20.3 million compared to $29.2 million for the first
quarter of fiscal 1995. The decrease was due to a $20.3 million higher
use of operating cash for working capital items, including receivables,
merchandise inventory, accounts payable and accrued expenses, which was
partially offset by higher earnings of $8.9 million and $2.5 million
more depreciation and amortization (including amortization of original
issue discount and deferred debt expenses).
Net cash from investing activities for the first quarter of fiscal
1996, and 1995 used $29.0 million and $15.0 million, respectively. Uses
of cash were principally for capital expenditures of $25.8 million and
$15.7 million for fiscal 1996 and 1995, respectively, for additions to
the Company's drug stores and Express Photo units and improvements to
existing stores and for the installation of point-of-sale product
scanning equipment. Capital improvements for fiscal 1996, are estimated
at approximately $130.0 million on an annual basis. Funds for the
planned cash capital expenditures are expected to come from cash flow
from operating activities and available borrowings, if necessary.
Financing activities for the first quarter of fiscal 1996 provided $9.5
million. Funds were provided by $36.0 million of bank borrowings which
were primarily offset by the reduction of $26.7 million of bank debit
balances. Financing activities for the first quarter of fiscal 1995
used $13.1 million primarily for the reduction of $34.7 million of bank
8
debit balances, of which funds were partially provided for by $21.5
million of bank borrowings.
Based upon the Company's ability to generate cash flow from operating
activities, the available unused portion of the revolving loan facility
under the bank credit agreement and other existing sources, the Company
believes that it will have the funds necessary to meet the principal
and interest payments on its debt as they become due and to operate and
expand its business.
REVIEW BY INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Company's independent public accountants have made a limited review
of the financial information furnished herein in accordance with
standards established by the American Institute of Certified Public
Accountants. The Accountants' Report is presented on page 10 of this
report.
9
Accountants' Report
The Board of Directors
Eckerd Corporation:
We have reviewed the condensed consolidated balance sheet of Eckerd
Corporation and subsidiaries as of May 4, 1996, and the related
condensed consolidated statements of operations and cash flows for the
thirteen weeks ended May 4, 1996 and April 29, 1995. These condensed
consolidated financial statements are the responsibility of the
Company's management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical
procedures to financial data, and making inquiries of persons
responsible for financial and accounting matters. It is substantially
less in scope than an audit conducted in accordance with generally
accepted auditing standards, the objective of which is the expression
of an opinion regarding the financial statements taken as a whole.
Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications
that should be made to the accompanying condensed consolidated
financial statements for them to be in conformity with generally
accepted accounting principles.
We have previously audited, in accordance with generally accepted
auditing standards, the consolidated balance sheet as of February 3,
1996, and the related consolidated statements of operations,
stockholders' equity, and cash flows, for the year then ended (not
presented herein); and in our report dated March 26, 1996, we expressed
an unqualified opinion on those consolidated financial statements. In
our opinion, the information set forth in the accompanying condensed
consolidated balance sheet as of February 3, 1996 is fairly stated, in
all material respects, in relation to the consolidated balance sheet
from which it has been derived.
KPMG PEAT MARWICK LLP
June 14, 1996
10
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
The Company's Annual Meeting of Stockholders was held on May 23, 1996.
As of that date proxies covering 55,948,500 shares of 69,966,834 shares
outstanding were present and entitled to vote. The following Class III
directors were elected to the Company's Board of Directors for a term
of three years until the Annual Meeting in 1999.
Withheld
Nominee In Favor Authority
Albert J. Fitzgibbons, III 55,573,236 375,264
Lewis W. Lehr 55,563,050 385,450
Stewart Turley 55,024,488 924,012
John W. Boyle, Dr. James T. Doluisio and Rupinder S. Sidhu are Class I
directors and their terms expire on the date of the Annual Meeting in
1997. Donald F. Dunn, Margaret H. Jordan and Francis A. Newman are
Class II directors and their terms expire on the date of the Annual
Meeting in 1998. Alexis P. Michas, who was a Class II director,
resigned from the Company's Board of Directors, immediately after the
Company's Annual Meeting on May 23, 1996.
The results of the voting by stockholders (proxies covering 55,938,900
shares) on the adoption of a resolution ratifying the appointment of
KPMG Peat Marwick LLP, by the Board of Directors as independent
auditors of the Company for the Company's 1996 fiscal year was as
follows:
In Favor Opposed Abstained
55,841,178 22,692 75,030
11
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
10.1 The First Executive Supplemental Benefit Plan of
Eckerd Corporation and Its Subsidiaries
10.2 The Second Executive Supplemental Benefit Plan of
Eckerd Corporation and Its Subsidiaries
15.1 Letter re unaudited interim financial information
27 Financial Data Schedule
(b) Reports on Form 8-K
The Company did not file any reports on Form 8-K during the
thirteen weeks ended May 4, 1996.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
ECKERD CORPORATION
(Registrant)
June 18, 1996 /s/ Samuel G. Wright
----------------------
Samuel G. Wright
Executive Vice President/
Chief Financial Officer
(Principal Accounting Officer)
12
Exhibit Index
Eckerd Corporation
Form 10-Q
Exhibit No. Description of Exhibit Page
10.1 The First Executive Supplemental Benefit Plan of
Eckerd Corporation and Its Subsidiaries
10.2 The Second Executive Supplemental Benefit Plan of
Eckerd Corporation and Its Subsidiaries
15.1 Letter re unaudited interim financial information
27 Financial Data Schedule
13
Exhibit 10.1
THE FIRST
EXECUTIVE SUPPLEMENTAL BENEFIT PLAN
OF
ECKERD CORPORATION
AND ITS SUBSIDIARIES
(As Amended and Restated as of February 3, 1996)
ECKERD CORPORATION, a Delaware corporation, desiring to provide an
income for its executives after their retirement as well as pre-retirement death
benefits to beneficiaries of such executives hereby establishes this FIRST
EXECUTIVE SUPPLEMENTAL BENEFIT PLAN.
It is intended that this Plan shall be for the benefit of only those
executive employees of the Company who are selected by the Board of Directors of
the Company on or before February 3, 1996.
1. Definitions Applicable to the Plan. The words and phrases defined
below have the meanings herein set out:
a. "Accrued Benefit" shall mean an annual annuity commencing
at age 65 and continuing for fifteen (15) years certain in an annual amount
equal to the product of i. multiplied by ii.:
i. Twenty-five percent (25%) of the Participant's Covered
Salary.
ii. A fraction, the numerator of which is the number of
years of service with the Company and the denominator of which is the number of
years from Participant's age on the date he commenced service with the Company
to the Participant's Normal Retirement Date; PROVIDED, HOWEVER, if the sum of
the Participant's age upon termination of employment with the Company and the
Participant's years of service with the Company is equal to or greater than 70
years, then the Accrued Benefit shall be i. above; PROVIDED FURTHER, HOWEVER,
the Board of Directors, in its sole discretion, shall have the right to waive
the requirements of this Subparagraph ii. and to provide an accrued benefit
equal to i. above to any participant.
For the purposes of this definition, all service and age determinations
shall be computed utilizing all full calendar years and completed calendar
months, and all years and months of service as an employee shall be counted.
Notwithstanding the above, a Participant must have five (5) years of
service with the Company to have an accrued benefit. The Board, in its sole
discretion, shall have the right to waive the years of service requirement
hereunder as to any Participant. In addition, the Board, in its sole discretion,
shall have the right to include service with a business operation acquired by
the Company in the determination of years of service of a Participant with the
Company.
b. "Actuarial Equivalent" shall mean an equivalent in value,
taking into account an annual effective interest rate of six percent (6%) per
year compounded annually, and without taking into account any discount based on
mortality tables.
c. "Beneficiary" shall mean the person or persons (including a
trust created by a person or the estate of a person) designated by the
Participant entitled to receive any benefits under this Plan upon the death of a
Participant or, in the event no such person or persons are designated or survive
the Participant, then the estate of the Participant.
d. "Board" or "Board of Directors" shall mean the Board of
Directors of Eckerd Corporation or the Executive Compensation and Stock Option
Committee of the Board of Directors of the Eckerd Corporation or the Executive
Committee of the Board of Directors.
e. "Committee" shall mean the Administrative Committee
appointed to manage and administer the Plan in accordance with the provisions of
Section 12 of this Plan.
f. "Company" shall mean Eckerd Corporation and its
subsidiaries.
g. "Covered Salary" shall mean, unless otherwise agreed
between the Participant and the Company in the Plan Agreement, the midpoint (on
an annualized basis) established by the Company for the Participant's Salary
Grade (as defined by the personnel practices of the Company) as of the date the
Participant and the Company execute the Plan Agreement and, as such midpoint may
be modified, from time to time, during the Participant's employment with the
Company.
h. "Death Benefit" shall mean an annual benefit equal to
ninety percent (90%) of the Participant's Covered Salary for the first year
after death and forty-five percent (45%) of the Participant's Covered Salary for
the next nine (9) years. The annual benefit shall be payable to the Beneficiary
in equal annual installments. In the alternative, a Participant may elect to
have a Death Benefit in an amount equal to four (4) times the Participant's
Covered Salary payable to the Beneficiary in a lump sum.
i. "Early Retirement Date" shall be the first day of the month
following the month in which a Participant who has attained the age of 55
retires with the consent of the Committee prior to his or her Normal Retirement
Date. Notwithstanding the above, the Board, in its sole discretion, shall have
the right to waive the age requirement for early Retirement.
j. "Employee" shall mean any person regularly employed full
time by the Company in any capacity (including officers and directors who
regularly render services to the Company as regular full time employees).
Employees shall not include part-time employees, consultants or independent
contractors of the Company.
k. "Late Retirement Date" shall be the first day of the month
following the month in which a Participant retires who, with the consent of the
Committee (if such consent is permissible under existing law), had remained in
the employment of the Company after his or her Normal Retirement Date.
l. "Normal Retirement date" shall be the first day of the
month following the month in which the Participant attains his or her 65th
birthday.
m. "Participant" shall mean an Employee who is eligible to
participate herein in accordance with Section 2 hereof and who has executed a
Plan Agreement in the form attached hereto as Exhibit A.
n. "Plan" shall mean The First Executive Supplemental Benefit
Plan of Eckerd Corporation and its subsidiaries, which shall be evidenced by
this instrument as amended from time to time and by each Plan Agreement.
o. "Plan Agreement" shall mean the form of written agreement,
attached hereto as Exhibit A, which is entered into from time to time by and
between the Company and a Participant. Each Plan Agreement executed by a
Participant shall provide for the entire benefit to which such Participant is
entitled under the Plan, and the Plan Agreement bearing the latest date shall
govern such entitlement.
p. "Retirement" and "Retire" shall mean severance from
employment with the Company on or after the Normal Retirement Date or with the
consent of the Committee after the attainment of his or her Early Retirement
Date.
2. Eligibility to Participate in the Plan.
a. Those executive employees selected from time to time by the
Board of Directors on or before February 3, 1996 upon the recommendation of the
Committee shall be eligible to become Participants in accordance with the
purposes of the Plan. As a condition of participation, each Participant so
selected shall complete, execute and return to the Committee a Plan Agreement in
the form attached hereto as Exhibit A and comply with such further conditions as
may be established (prior to the Employee's commencement of participation) by
and in the sole discretion of the Committee.
b. In the event that subsequent to commencement of
participation in the Plan, a Participant fails to maintain a position of
employment in the Company which, in the sole discretion of the Board, qualifies
for participation in the Plan, then such Participant shall cease to accrue
further benefits under the Plan. Such Participant, however, shall be entitled to
receive his/her Accrued Benefit at the time and in the manner provided by this
Plan. If at any future time the former Participant becomes, in the sole
discretion of the Board, eligible to participate in the Plan, then such
Participant's Accrued Benefit shall be calculated as if the Participant had
continuously been a Participant from his/her original date of participation.
3. Benefit Upon Retirement. Upon Retirement, a Participant shall be
entitled to receive the following benefit:
a. Normal Retirement. A Participant who Retires on his or her
Normal Retirement Date shall receive an annual benefit equal to the
Participant's Accrued Benefit payable in equal monthly installments for a period
of fifteen (15) years commencing in the month following the month in which
Participant Retires.
b. Early Retirement. A Participant who, with the consent of
the Committee, Retires at any time after his or her Early Retirement Date and
before his or her Normal Retirement Date shall receive an annual benefit equal
to the Actuarial Equivalent, as determined by the Committee, of the
Participant's Accrued Benefit payable in equal monthly installments for a period
of fifteen (15) years, commencing on such date as may be agreed upon by the
Participant and the Committee or, in the absence of such agreement, in the month
following the month in which the Participant Retires; provided, however, the
Participant may elect to have the annual benefit paid up to the month in which
the Participant becomes eighty-one (81) years old in equal monthly installments
adjusted to represent the Actuarial Equivalent of the Participant's Accrued
Benefit on the basis of the number of monthly payments.
c. Late Retirement. A Participant who Retires on a Late
Retirement Date at any time after his or her Normal Retirement Date shall
receive an annual benefit equal to the Actuarial Equivalent, as determined by
the Committee, of the Participant's Accrued Benefit payable in equal monthly
installments for a period of fifteen (15) years commencing in the month
following the month in which the Participant Retires.
d. Death After Retirement. if a Participant dies after
retiring but before receiving the number of monthly payments provided for in the
Plan, the Beneficiary shall receive the remaining payments to which the
Participant would have been entitled if the Participant had lived.
4. Death, Disability and Termination of Employment.
a. Benefits in the Case of Death of a Participant While
Employed. If a Participant dies while employed by the Company, in lieu of any
other benefit payable hereunder, a Death Benefit shall be payable to the
Beneficiary. Provided, however, the Company shall not be obligated to pay a
Death Benefit if:
i. the Participant's death was the result of a suicide
within two (2) years after the date of the Plan Agreement,
ii. the Participant's death was from a bodily or mental
cause or causes, the information about which was withheld or knowingly concealed
or falsely provided by the Participant when requested by the Company to furnish
evidence of good health upon the Participant's becoming enrolled in this Plan or
upon the Participant's being granted additional benefits as a result of an
increase in Participant's covered salary.
b. Benefits in the Case of Disability.
i. If, in the sole opinion of the Committee, a Participant
is, because of physical or mental disability, incapable of performing the duties
of his regular position of employment with the Company, then the Participant
shall continue to accrue years-of-service credits (as if the Participant were
employed by the Company) until age 65 or commencement of benefits, if earlier.
Except as provided in Paragraph 14, if the Participant ceases to be so disabled
(in the sole opinion of the Committee) and returns to work at the Company in the
position of employment he formerly held with the Company or in another position
which, in the sole discretion of the Board, qualifies for participation in the
Plan, the Participant shall again participate on the same basis as other
Participants. if the Participant ceases to be so disabled and does not return to
work at the Company in his former position of employment or in another position
which, in the sole discretion of the board, qualified for participation in the
Plan, the Participant shall be considered to have returned to work and
immediately terminated employment on the date that such disability ceases.
ii. In the event that a participant referred to in Paragraph
i. above does not qualify for or ceases to receive disability payments under the
long-term disability insurance program sponsored by the Company and, in the
opinion of the Committee, such Participant is or continues to be so physically
or mentally disabled so as not to be capable of performing the duties of his
regular position of employment with the Company, then the Committee may, in its
sole discretion, authorize payment of an annual benefit equal to the Actuarial
Equivalent of the Participant's Accrued Benefit. Such benefit shall be payable
in equal monthly installments over a period of fifteen (15) years commencing on
the first day of the month following determination of disability by the
Committee or the termination of the Company sponsored long-term disability
payments to the Participant, whichever last occurs. Except as hereinafter
provided, such payment shall be in lieu of any other payment provided pursuant
to the Plan.
If the Participant ceases to be disabled and returns to
work at the Company in the position of employment he formerly held with the
Company or in another position which, in the sole discretion of the Board,
qualifies for participation in the Plan, the participant shall again participate
on the same basis as other participants except that:
aa. the Participant shall not accrue years-of-service
credits during the period the Participant received payments hereunder, and
bb. the payments made to such Participant pursuant to
the Plan during his/her disability shall be deducted from any award hereunder to
which the Participant or his/her Beneficiary may become entitled.
If the Participant ceases to be disabled and does not
return to work at the Company, the Participant shall be considered to have
terminated employment with the Company as of the date benefits became payable
hereunder, and any payments made to such Participant pursuant to the Plan during
his/her disability shall be deducted from any award to which the Participant or
his/her Beneficiary may become entitled.
iii. If a participant referred to in i. above dies before
commencement of benefits hereunder, in lieu of any other benefit payable
hereunder, the Death Benefit in subsection a. above shall be payable as if the
Participant had been employed.
c. Termination of Employment.
i. Upon termination of employment (other than by death,
disability or Retirement), a Participant shall be entitled to receive an annual
benefit equal to his Accrued Benefit payable in equal monthly installments for a
period of fifteen (15) years commencing on his Normal Retirement Date; provided,
however, with the consent of the Committee, such Participant may receive
benefits commencing on his or her Early Retirement Date on the same basis as any
other Participant retiring early.
ii. If a Participant terminates employment with the
Company (other than by death, disability or Retirement) and dies before
commencement of benefits, in lieu of any other benefits payable hereunder, the
Participant's Beneficiary shall be entitled to receive an amount equal to the
Actuarial Equivalent of the Participant's Accrued Benefit payable in a lump sum.
Such lump sum payment shall supersede any prior election for periodic payments
made pursuant to the Plan.
5. Obligation to Pay Benefits Hereunder. Except as required by the Jack
Eckerd Corporation Benefit Plans Trust (the "Trust"), the Company shall have no
obligation to fund a trust fund, escrow account or otherwise to segregate assets
to guarantee, secure or assure the payment of any benefit under the Plan, but
the Company may (and to the extent required by the Trust, shall) fund a
nonqualified grantor trust to provide for the payment of benefits under the
Plan. The establishment or funding of any such nonqualified grantor trust shall
not relieve the Company of any of its obligations pursuant to the Plan, except
that amounts paid to the Participants or other payees hereunder from any such
trust shall be offset against the amount of payments required to be made
hereunder by the Company to the Participant or other payee. To the extent that
any person acquires a right to receive payments from the Company or from any
trust pursuant to the Plan, such right shall be no greater than the right of an
unsecured general creditor of the Company and shall not be deemed to be a right
to payment of wages for purposes of any law providing for a lien or any other
priority for claims for wages. Any trust established to provide for any payments
hereunder shall be subject to the claims of creditors of the Company in the
event of any insolvency of the Company, and all the Company's obligations to pay
benefits pursuant to the Plan shall constitute only a general and unsecured
contractual liability of the Company to the participants and other payees
hereunder in accordance with the terms hereof. Amounts payable hereunder,
whether from such a nonqualified grantor trust or from the Company's general
assets, shall be subject in all respects to claims of general creditors of the
Company until actually paid over to the person(s) entitled to receive the same.
6. Other Provisions Concerning Payment. All amounts payable during the
lifetime of a Participant shall be paid directly to the Participant unless
applied for the Participant's benefit in accordance with Section 9 hereof.
Except as otherwise provided in this Plan, all amounts payable after the death
of a Participant shall be payable to the Beneficiary or Beneficiaries in the
manner designated by the Participant. If a Participant who is being paid
pursuant to the normal method of payment has received any payment or payments
during his or her lifetime, the number of installments payable to the
Beneficiary or Beneficiaries after the Participant's death shall be reduced by
the number of installments paid to such Participant. All amounts payable,
whether to a living person or to the estate of a deceased person, shall be paid
net after the withholding of any federal, state or local income, earnings and
other taxes which might be required to be withheld from such payments.
7. Designation of a Beneficiary. Each Participant shall specifically
designate, by name, on forms provided by the Company, the Beneficiary(ies) who
shall receive any benefits which might be payable after his or her death. Such
designation may be made at any time satisfactory to the Company. If a
Participant has not designated a Beneficiary in the manner provided above, the
Participant's estate shall be the Beneficiary. A designation of a Beneficiary
may be changed or revoked without the consent of the Beneficiary at any time or
from time to time in such manner as may be provided by the Company, and the
Company shall have no duty to notify any person designated as a Beneficiary of
any change in any such designation which might affect such person's present or
future rights hereunder. If the designated Beneficiary does not survive the
Participant, all amounts which would have been paid to such deceased Beneficiary
shall be paid to the alternative or successor Beneficiary or Beneficiaries (if
any) designated by the Participant or, if the Participant has not designated any
alternative or successor Beneficiary, to the estate of the deceased Participant,
but, if a designated Beneficiary, having survived the Participant, dies before
receiving all of the amount payable hereunder, the amount which such Beneficiary
would have received had he lived to receive benefits shall be paid to the estate
of such deceased Beneficiary unless a contrary direction was made by the
Participant, in which event such direction shall control. Not more than five (5)
persons or, if a greater number, that number of persons as shall be necessary to
permit the Participant to designate as simultaneous Beneficiaries any or all of
the Participant's surviving children and spouse, may be named as simultaneous
Beneficiaries of any Participant at any one time, and, if two or more persons
are to be simultaneous beneficiaries, or, if the Participant wishes to designate
alternative, successor or contingent Beneficiaries, the Participant shall
specify the shares, terms and conditions upon which amounts shall be paid to
such multiple, alternative, successor or contingent Beneficiaries, all of which
must be clearly stated to the satisfaction of the Committee. Any payment under
this Plan which may be made to a Beneficiary after the death of a Participant
shall be made only to the person (s) designated pursuant to this section by the
Participant who would otherwise have been paid such amounts.
8. Payees Presumed Competent. Every person receiving or claiming
amounts payable under this Plan shall be conclusively presumed to be mentally
competent and of legal age until the Company receives a written notice, in form,
manner and substance acceptable to it, that any such person has been adjudged
legally incompetent or is a minor or that a guardian or other person legally
vested with the care of such person's estate has been appointed.
9. Distribution to Persons Under a Legal Disability. If any amount
payable hereunder is payable to a minor or other person under legal disability,
the Company shall make payments thereof in one (or any combination) of the
following ways, as the Committee shall determine in its sole right, but is not
obligated, to insist that a legal guardian be appointed before making any
payments hereunder:
a. directly to said minor or other person;
b. to the legal representatives of said minor or other person;
or
c. to some relative or friend of said minor or other person
for the support, welfare or education of such minor or other person.
The Company shall not be required to see to the application of
any payment so made, and the receipt of the person in one of the above three
categories to whom such payment is actually made shall fully discharge the
Company from any further accountability or responsibility with respect to the
amount so paid.
10. Notice of Address; Lost Payees.
a. Every Participant shall file a notice of his or her post
office address and of the post office address and Social Security number of each
Beneficiary designated by him or her and of each change of any such address, in
writing, with the Company. Any communication, statement or notice addressed to
any such person at the latest post office address on file shall be binding upon
such person for all purposes, and the Company shall not be obliged to search for
or attempt to ascertain the whereabouts of any such person except as hereinafter
provided, and, if a Participant fails or neglects to file such addresses, the
Participant's address shall be presumed to be his or her last address on file in
the personnel records of the Company, and, in the case of a person whole rights
accrued through or from a Participant, his or her last address shall be presumed
to be in care of the last address of such Participant on file in the personnel
records of the Company.
b. If the Company is unable to locate any person entitled to
receive a payment hereunder or the estate of any such person, if deceased, and
if the Company shall make a search for such person and/or such person's estate
in the manner hereinafter prescribed, the right and interest of such payee in
and to the amount payable shall terminate on the last day of the one (1) year
period commencing with the publication of the notice hereinafter described, and
the amount so payable shall be payable to the estate of the Participant to whom
such amount had originally been payable; provided, however, that, if the estate
of such Participant cannot be located within an additional one (1)-year period,
the unclaimed amount shall be forfeited. In its search for such payee, the
Company shall mail a notice, postage prepaid, by U.S. registered or certified
mail, return receipt requested and return postage guarantee, to the last known
address of such payee or (if the payee is not the Participant and if the address
of the payee is unknown) to such payee in care of the last known address of the
Participant from whom such payee's rights are derived. If all notices sent as
aforesaid are returned unclaimed or addressee unknown, the Company shall publish
a notice in a newspaper having a general circulation in the same general area as
the last known address of the payee stating that the Company holds an amount of
payment hereunder and giving such additional information as may be reasonably
calculated to come to the notice of the parties having an interest herein. The
foregoing actions shall satisfy the Company's obligation to conduct a search for
such payee or the estate of the Participant; provided, however, that the Company
shall never be required to expend in such search an amount greater than the
amount payable hereunder, and all amounts so expended shall be charged against
the amounts held for payment.
11. No Liability for Participant's Debts (Other than Indebtedness to
the Company). If, at the time any benefit becomes payable hereunder, there is
any indebtedness due the Company from the payee thereof, the Company (without
being obligated to do so) may direct that some or all of the amounts payable to
such party be applied against such indebtedness (including any interest properly
payable on such indebtedness), and only the unapplied balance shall be paid to
the party otherwise entitled to receive such payment. Except to the extent
amounts otherwise payable are applied against indebtedness of the Participant or
Beneficiary to the Company in accordance with the foregoing authority, this Plan
and the amounts payable hereunder shall not, in any manner, be liable for or
subject to the debts or liabilities of any payee, and no amount payable
hereunder shall, at any time or in any manner, be subject to anticipation,
alienation, sale, transfer, assignment, pledge or encumbrance of any kind,
whether to the Company or to any other party whomsoever, and whether with or
without consideration. If any payee shall attempt to, or shall, anticipate,
alienate, sell, transfer, assign, pledge or otherwise encumber any amounts
payable hereunder or any part thereof, or, if by reason of bankruptcy or other
event, such amounts would at any time be received or enjoyed by persons other
than such payee except as otherwise permitted by this Plan, the Company, in its
sole discretion, may terminate such person's interest in any such amounts and
hold or apply such amounts to or for the use of such person or such person's
spouse, children or other dependents, or any of them, as the Company may
determine.
12. Administration. This Plan shall be administered by the Committee,
which shall have full power, authority and discretion to do all things necessary
or appropriate to the proper administration hereof, except that the Board shall
have sole power to determine whether any Employee is entitled to participate in
the Plan. The Committee's power, authority and discretion shall include, without
limiting the generality of the foregoing, full power, authority and discretion
to construe the Plan and the Plan Agreements and to determine all questions
which may arise hereunder relating to the administration of the Plan and the
Plan agreements (other than eligibility to participate in the Plan), including
questions relating to the status and rights of Participant, Beneficiaries and
other persons hereunder. Any rules adopted by the Committee shall be
administered uniformly and applied with equal effectiveness and in a
nondiscriminatory manner to all persons similarly situated. Notwithstanding any
other provision hereof, the trustee of the Trust (the "Trustee") shall have the
power, authority, and discretion, pursuant to and to the extent provided in the
Trust, to override any determination or interpretation by the Committee, the
Board or the Company affecting the rights of any Participant or Beneficiary to a
benefit under the Plan. Except as provided in the next sentence, notwithstanding
any other provision hereof, all power, authority and discretion vested in the
Committee, the Board, or the Company under the Plan shall, on or after the date
on which a Change in Control (as defined in the Trust) occurs, no longer be
vested in the Company, the Board, or the Committee and instead shall be vested
in the Trustee, and any matter which requires the mutual agreement of a
Participant and the Company, Board or Committee shall instead require the
agreement of the Participant and the Trustee. Notwithstanding the preceding
sentence, following a Change in Control, the Trustee shall not be vested with
the power, authority, or discretion provided by the following provisions of the
Plan, which power, authority, or discretion shall remain with the same entity
(whether the Board or the Committee) that exercised such power, authority, or
discretion prior to the Change in Control: (i) to waive the application of the
fraction set forth in subparagraph 1(a)(ii) and instead provide an accrued
benefit to a Participant equal to the amount in subparagraph 1(a)(i), as
provided in subparagraph 1(a)(ii); (ii) to waive the years of service
requirement set forth in the final paragraph of subsection 1(a), as provided in
that paragraph; (iii) to waive the age requirement for early Retirement, as
provided in subsection 1(i); (iv) to consent, if such consent is permitted under
existing law, to a Participant's continued employment with the Company after his
or her Normal Retirement Date, as provided in subsection 1(k); (v) to determine
whether a Participant is disabled, as provided in Subsection 4(b); (vi) to pay a
lump sum, as provided in subsection 14(c); and (vii) to deviate from the normal
methods of payment, as provided in subsection 14(d).
13. Negation of Employment Contract. This Plan is intended to, and
does, relate exclusively to benefits payable after termination of employment and
does not create an employment contract. Nothing contained herein shall be
deemed:
a. to give a Participant the right to be retained in the
employ of the Company;
b. to interfere with the right of the Company to discharge or
demote a Participant at any time;
c. to give the Company the right to require a Participant to
remain in its employ; or
d. to interfere with the right of a Participant to terminate
employment at any time.
14. Modification, Amendment or Termination.
a. The Company reserves the absolute right to modify or amend
this Plan in whole or in part, at any time and from time to time, effective as
of any specified prior, current or future date, by action of the Board of
Directors or its delegate; provided, however, that except as necessary to
prevent this Plan from being subject to any provision of Title I, Subtitle B,
Parts 2, 3 or 4 of the Employee Retirement Income Security Act of 1974, as
amended, or any successor thereto, no Participant affected by any such
modification or amendment shall be deprived of the right to receive any part of
the Accrued Benefit he would have been entitled to receive under the terms of
the Plan as in effect immediately prior to such modification or amendment if he
had terminated employment with the Company on the date of such modification or
amendment; and provided further that, on or after the date of a Change in
Control (as defined in the Trust), the Company shall have no power to modify,
amend or interpret the Plan in any manner that would result in any Participant
receiving a smaller Accrued Benefit than such Participant would have received
under the terms of the Plan as in effect on the day immediately preceding the
date on which the Change in Control occurs.
b. The Company also reserves the right to terminate this Plan,
in whole or in part, voluntarily as of any specified current or future date by
action of the Board. This Plan shall be automatically terminated upon a
dissolution of the Company (but not upon a merger, consolidation, reorganization
or recapitalization of the Company if a surviving corporation therein assumes
this Plan); upon the Company being legally adjudicated a bankrupt; upon the
appointment of a receiver or trustee in bankruptcy with respect to the Company's
assets and business if such appointment is not set aside within ninety (90) days
thereafter; or upon the making by the Company of an assignment for the benefit
of creditors. Upon termination of this Plan, no additional Employees shall be
selected to participate herein, and no additional benefits shall be accrued
hereunder. Notwithstanding the total or partial termination of this Plan, except
as necessary to prevent this Plan from being subject to any provision of Title
I, Subtitle B, Parts 2, 3 or 4 of the Employee Retirement Income Security Act of
1974, as amended, or any successor thereto, no Participant affected thereby
shall be deprived of the right to receive any part of the Accrued Benefit he
would have been entitled to receive under the terms of the Plan as in effect
immediately prior to the termination of the Plan had he terminated employment
with the Company on the date of such termination. Such Accrued Benefit shall be
paid at the time and in the manner provided by this Plan (as in effect
immediately prior to the termination) upon observance and performance of the
Participant's obligations under the Plan Agreement to which the Participant is a
party.
c. If any benefit payable hereunder becomes payable to any
person, the amount thereof may, in the sole discretion of the Committee, be paid
in a single lump sum, the amount of which shall be Actuarial Equivalent of the
total amount of benefits thereafter payable.
d. In any instance in which the Committee in its sole and
uncontrolled discretion believes such action to be in the best interest of the
party entitled to receive any payment provided by this Plan, or to be in the
best interests of the Company (such as to eliminate small account balances or to
avoid the administrative inconvenience and expense which might be incurred if
relatively small amounts were to be paid to multiple recipients over lengthy
periods of time), amounts payable in installments pursuant to the provisions of
this Plan may be paid in a single lump sum, the amount of which shall be
determined in the manner provided in paragraph (c) above. It is intended by this
paragraph to vest the Committee with full discretion to administer this Plan and
to determine when and under what circumstances deviations which accelerate the
normal method of payments of benefits are necessary, desirable or appropriate,
and the Committee shall have full plenary power to authorize such deviations as
regards to each payee separately, notwithstanding that one or more persons may
be payees of benefits relating to the same Participant. To illustrate, the
Committee shall be free to authorize a lump sum distribution to one Beneficiary
of a deceased Participant, while directing that another Beneficiary of the same
deceased Participant receive the amount to which he is entitled over a period of
time. The Committee will normally consider the wishes of any payee who might
request a deviation from the normal method of payment applicable to him, but
shall not be obligated to honor any request for deviation. In any case, any
payment method which deviates from the norm shall be the Actuarial Equivalent of
the normal method of payment.
e. In the event of the death of a Participant or any
Beneficiary designated by him or her, the Company need not make any payment
provided for by this Plan until it shall have received proof satisfactory to it
of such death and of the identity, existence and location of the party
thereafter entitled to received payments under this Plan.
f. In making any payment or taking any action under this Plan,
the Company shall be absolutely protected in relying upon any finding or
statement of facts believed by it to have been signed by the proper party.
g. This Plan and all Participation Agreements entered into
hereunder shall be construed and enforced under and in accordance with the laws
of the State of Florida.
15. Plan Agreement. Each Participant shall be entitled to benefits in
accordance with this Plan and his Plan Agreement. The Plan Agreement may modify
any of the terms of this Plan as it applies to the Participant. In the event of
a conflict between the Plan Agreement and this Plan, the Plan Agreement shall
control.
16. Claims Procedure. In the event that benefits under this Plan are
not paid to the Participant (or his Beneficiary in the case of Participant's
death), and such person feels entitled to receive them, a claim shall be made in
writing to the Committee within sixty (60) days from the date payments are not
made. Such claim shall be reviewed by the Committee and the Board of Directors
of the Company. If the claim is denied in full or in part, the Committee shall
provide a written notice within ninety (90) days setting forth the specific
reasons for denial, specific reference to the provisions of this Plan or the
Plan Agreement upon which the denial is based and any additional material or
information necessary to perfect the claim, if any. Also, such written notice
shall indicate the steps to be taken if a review of the denial is desired.
However, under no circumstances, shall a notification of denial which does not
satisfy all of the foregoing requirements be deemed to constitute an acceptance
of a claim. If the Committee does not provide the Participant (or the
Beneficiary in the case that the Participant is dead) with notice of its
decision within ninety (90) days, the claim shall be deemed to be denied. If a
claim is denied and a review is desired, the Participant or his Beneficiary in
the case of the Participant's death, shall notify the Committee in writing
within sixty (60) days after receipt of either the notification or denial or the
expiration of the said ninety (90) day period, whichever first occurs.
In requesting a review, the Participant or his Beneficiary may
review this Plan or the Plan Agreement or any documents relating to it and
submit any written issues and comments he or she may feel appropriate. In its
sole discretion, the Committee shall then review the claim and provide a written
decision within sixty (60) days. This decision, likewise, shall state the
specific reasons for the decision and shall include reference to specific
provisions of this Plan or the Plan Agreement on which the decision is based.
IN WITNESS WHEREOF, ECKERD CORPORATION has caused this Amended and
Restated Plan to be executed, and its corporate seal to be hereunto affixed, by
its officers hereunto duly authorized, effective as of February 3, 1996.
ECKERD CORPORATION
By: /s/ Francis A. Newman
(SEAL) Name: Francis A. Newman
Its: President
ATTEST:
/s/ James M. Santo
Secretary
g: exsuppl3/doc
EXHBIT "A"
FIRST EXECUTIVE SUPPLEMENTAL BENEFIT
PLAN AGREEMENT
OF
ECKERD CORPORATION AND ITS SUBSIDIARIES
The undersigned executive employee ("Employee") acknowledges that as an
Employee of Eckerd Corporation and its Subsidiaries ("Employer"), Employee has
been offered an opportunity to participate in The First Executive Supplemental
Benefit Plan ("Plan") subject to the terms and conditions stated in the Plan, a
copy of which is attached hereto and incorporated herein by reference. In the
event of any inconsistencies between the provisions of this Plan Agreement and
the Plan, the provisions of the Plan shall prevail.
Employee's Covered Salary, benefits and designated beneficiary(ies) are
agreed to be as follows:
1. Employee's Covered Salary: per annum.
2. Years of Service as of
00 YEARS; 00 MONTHS
3. Death Benefit: (elect one option only)
a. Option A
i.Ninety percent (90%) of the Employee's Covered Salary per annum
payable in one installment for the first year after death; plus
ii. Forty-five percent (45%) of the Employee's Covered Salary
per annum for the next nine (9) years.
b. Option B
payable in a lump sum.
c. Subject to Paragraph 14.d. of the Plan, in the event of a failure to
make an election herein, the Employer will pay the Death Benefit
pursuant to Option A above.
4. Retirement Benefit:
a. Retirement at age 65: per annum payable in 180 equal
monthly installments of .
b. Early Retirement: The Employee's Accrued Benefit (as defined in
Paragraph 1.a. of the Plan) reduced in accordance with Paragraph
3.b. of the Plan.
c. Late Retirement: The benefit payable in a. above as adjusted
pursuant to Paragraph 3.c. of the Plan.
d. Termination Benefit: The Employee's Accrued Benefit payable as
provided in Paragraph 4.c. of the Plan.
e. Disability Benefit. Determined in accordance with Paragraph 4.b. of
the Plan.
f. Commencement of Retirement Benefits. Thirty (30) days prior to
Employee's Normal Retirement Date or Early Retirement Date
application may be made to the Committee to have such Retirement
Benefits commence on the first day of the month following the Normal
or Early Retirement Date.
5. Beneficiary(ies):
a. The Employee hereby designates as primary beneficiary or
beneficiaries to receive any benefits payable after the death of
Employee:
Primary Beneficiary(ies):
Address &
Name Share Relationship Social Security Number
b. The Employee designates the following person or persons as successor
beneficiary or beneficiaries to receive any benefits payable after
the death of Employee and the primary beneficiary(ies):
Successor Beneficiary(ies):
Address &
Name Share Relationship Social Security Number
6. The Employee has read this Plan Agreement and the Plan and is aware of and
accepts the terms and conditions set forth in each document. In particular,
Employee understands that the benefits payable pursuant to the Plan and the Plan
Agreement are unsecured contractual obligations of the Employer and the Employer
has no obligation whatsoever to set aside funds in advance for the payment of
benefits hereunder.
IN WITNESS WHEREOF the parties hereto have hereunto set their hands
effective as of the day of , .
EMPLOYER:
ECKERD CORPORATION AND
ITS SUBSIDIARIES
ATTEST: By:
-------------------------
- - ----------------------- TITLE:
----------------------
WITNESS: EMPLOYEE:
- - ----------------------- ----------------------------
Signature
----------------------------
Type or Print Name
----------------------------
----------------------------
Address of Employee
a: 96sup2
Exhibit 10.2
THE SECOND
EXECUTIVE SUPPLEMENTAL BENEFIT PLAN
OF
ECKERD CORPORATION
AND ITS SUBSIDIARIES
(Effective as of February 4, 1996)
ECKERD CORPORATION, a Delaware corporation, desiring to provide an
income for its executives after their retirement as well as pre-retirement death
benefits to beneficiaries of such executives hereby establishes this SECOND
EXECUTIVE SUPPLEMENTAL BENEFIT PLAN.
It is intended that this Plan shall be for the benefit of only those
executive employees of the Company who are selected by the Board of Directors of
the Company after February 3, 1996.
1. Definitions Applicable to the Plan. The words and phrases defined
below have the meanings herein set out:
a. "Accrued Benefit" shall mean an annual annuity commencing
at age 65 and continuing for fifteen (15) years certain in an annual amount
equal to the product of i. multiplied by ii.:
i. Twenty-five percent (25%) of the Participant's Covered
Salary.
ii. A fraction, the numerator of which is the number of
years of service with the Company and the denominator of which is 25; PROVIDED,
HOWEVER, the Board of Directors, in its sole discretion, shall have the right to
waive the requirements of this Subparagraph ii. and to provide an accrued
benefit equal to i. above to any participant.
For the purposes of this definition, all service and age determinations
shall be computed utilizing all full calendar years and completed calendar
months, and all years and months of service as an employee shall be counted.
Notwithstanding the above, a Participant must have five (5) years of
service with the Company to have an accrued benefit. The Board, in its sole
discretion, shall have the right to waive the years of service requirement
hereunder as to any Participant. In addition, the Board, in its sole discretion,
shall have the right to include service with a business operation acquired by
the Company in the determination of years of service of a Participant with the
Company.
b. "Actuarial Equivalent" shall mean an equivalent in value,
taking into account an annual effective interest rate of six percent (6%) per
year compounded annually, and without taking into account any discount based on
mortality tables.
c. "Beneficiary" shall mean the person or persons (including a
trust created by a person or the estate of a person) designated by the
Participant entitled to receive any benefits under this Plan upon the death of a
Participant or, in the event no such person or persons are designated or survive
the Participant, then the estate of the Participant.
d. "Board" or "Board of Directors" shall mean the Board of
Directors of Eckerd Corporation or the Executive Compensation and Stock Option
Committee of the Board of Directors of the Eckerd Corporation or the Executive
Committee of the Board of Directors.
e. "Committee" shall mean the Administrative Committee
appointed to manage and administer the Plan in accordance with the provisions of
Section 12 of this Plan.
f. "Company" shall mean Eckerd Corporation and its
subsidiaries.
g. "Covered Salary" shall mean, unless otherwise agreed
between the Participant and the Company in the Plan Agreement, the midpoint (on
an annualized basis) established by the Company for the Participant's Salary
Grade (as defined by the personnel practices of the Company) as of the date the
Participant and the Company execute the Plan Agreement and, as such midpoint may
be modified, from time to time, during the Participant's employment with the
Company.
h. "Early Retirement Date" shall be the first day of the month
following the month in which a Participant who has attained the age of 55
retires with the consent of the Committee prior to his or her Normal Retirement
Date. Notwithstanding the above, the Board, in its sole discretion, shall have
the right to waive the age requirement for early Retirement.
i. "Employee" shall mean any person regularly employed full
time by the Company in any capacity (including officers and directors who
regularly render services to the Company as regular full time employees).
Employees shall not include part-time employees, consultants or independent
contractors of the Company.
j. "Late Retirement Date" shall be the first day of the month
following the month in which a Participant retires who, with the consent of the
Committee (if such consent is permissible under existing law), had remained in
the employment of the Company after his or her Normal Retirement Date.
k. "Normal Retirement date" shall be the first day of the
month following the month in which the Participant attains his or her 65th
birthday.
l. "Participant" shall mean an Employee who is eligible to
participate herein in accordance with Section 2 hereof and who has executed a
Plan Agreement in the form attached hereto as Exhibit A.
m. "Plan" shall mean The Second Executive Supplemental Benefit
Plan of Eckerd Corporation and its subsidiaries, which shall be evidenced by
this instrument as amended from time to time and by each Plan Agreement.
n. "Plan Agreement" shall mean the form of written agreement,
attached hereto as Exhibit A, which is entered into from time to time by and
between the Company and a Participant. Each Plan Agreement executed by a
Participant shall provide for the entire benefit to which such Participant is
entitled under the Plan, and the Plan Agreement bearing the latest date shall
govern such entitlement.
o. "Retirement" and "Retire" shall mean severance from
employment with the Company on or after the Normal Retirement Date or with the
consent of the Committee after the attainment of his or her Early Retirement
Date.
2. Eligibility to Participate in the Plan.
a. Those executive employees selected from time to time by the
Board of Directors after February 3, 1996 upon the recommendation of the
Committee shall be eligible to become Participants in accordance with the
purposes of the Plan. As a condition of participation, each Participant so
selected shall complete, execute and return to the Committee a Plan Agreement in
the form attached hereto as Exhibit A and comply with such further conditions as
may be established (prior to the Employee's commencement of participation) by
and in the sole discretion of the Committee.
b. In the event that subsequent to commencement of
participation in the Plan, a Participant fails to maintain a position of
employment in the Company which, in the sole discretion of the Board, qualifies
for participation in the Plan, then such Participant shall cease to accrue
further benefits under the Plan. Such Participant, however, shall be entitled to
receive his/her Accrued Benefit at the time and in the manner provided by this
Plan. If at any future time the former Participant becomes, in the sole
discretion of the Board, eligible to participate in the Plan, then such
Participant's Accrued Benefit shall be calculated as if the Participant had
continuously been a Participant from his/her original date of participation.
3. Benefit Upon Retirement. Upon Retirement, a Participant shall be
entitled to receive the following benefit:
a. Normal Retirement. A Participant who Retires on his or her
Normal Retirement Date shall receive an annual benefit equal to the
Participant's Accrued Benefit payable in equal monthly installments for a period
of fifteen (15) years commencing in the month following the month in which
Participant Retires.
b. Early Retirement. A Participant who, with the consent of
the Committee, Retires at any time after his or her Early Retirement Date and
before his or her Normal Retirement Date shall receive an annual benefit equal
to the Actuarial Equivalent, as determined by the Committee, of the
Participant's Accrued Benefit payable in equal monthly installments for a period
of fifteen (15) years, commencing on such date as may be agreed upon by the
Participant and the Committee or, in the absence of such agreement, in the month
following the month in which the Participant Retires; provided, however, the
Participant may elect to have the annual benefit paid up to the month in which
the Participant becomes eighty-one (81) years old in equal monthly installments
adjusted to represent the Actuarial Equivalent of the Participant's Accrued
Benefit on the basis of the number of monthly payments.
c. Late Retirement. A Participant who Retires on a Late
Retirement Date at any time after his or her Normal Retirement Date shall
receive an annual benefit equal to the Actuarial Equivalent, as determined by
the Committee, of the Participant's Accrued Benefit payable in equal monthly
installments for a period of fifteen (15) years commencing in the month
following the month in which the Participant Retires.
d. Death After Retirement. if a Participant dies after
retiring but before receiving the number of monthly payments provided for in the
Plan, the Beneficiary shall receive the remaining payments to which the
Participant would have been entitled if the Participant had lived.
4. Disability and Termination of Employment.
a. Benefits in the Case of Disability.
i. If, in the sole opinion of the Committee, a Participant
is, because of physical or mental disability, incapable of performing the duties
of his regular position of employment with the Company, then the Participant
shall continue to accrue years-of-service credits (as if the Participant were
employed by the Company) until age 65 or commencement of benefits, if earlier.
Except as provided in Paragraph 14, if the Participant ceases to be so disabled
(in the sole opinion of the Committee) and returns to work at the Company in the
position of employment he formerly held with the Company or in another position
which, in the sole discretion of the Board, qualifies for participation in the
Plan, the Participant shall again participate on the same basis as other
Participants. if the Participant ceases to be so disabled and does not return to
work at the Company in his former position of employment or in another position
which, in the sole discretion of the board, qualified for participation in the
Plan, the Participant shall be considered to have returned to work and
immediately terminated employment on the date that such disability ceases.
ii. In the event that a participant referred to in
Paragraph i. above does not qualify for or ceases to receive disability payments
under the long-term disability insurance program sponsored by the Company and,
in the opinion of the Committee, such Participant is or continues to be so
physically or mentally disabled so as not to be capable of performing the duties
of his regular position of employment with the Company, then the Committee may,
in its sole discretion, authorize payment of an annual benefit equal to the
Actuarial Equivalent of the Participant's Accrued Benefit. Such benefit shall be
payable in equal monthly installments over a period of fifteen (15) years
commencing on the first day of the month following determination of disability
by the Committee or the termination of the Company sponsored long-term
disability payments to the Participant, whichever last occurs. Except as
hereinafter provided, such payment shall be in lieu of any other payment
provided pursuant to the Plan.
If the Participant ceases to be disabled and returns
to work at the Company in the position of employment he formerly held with the
Company or in another position which, in the sole discretion of the Board,
qualifies for participation in the Plan, the participant shall again participate
on the same basis as other participants except that:
aa. the Participant shall not accrue
years-of-service credits during the period the Participant received payments
hereunder, and
bb. the payments made to such Participant pursuant
to the Plan during his/her disability shall be deducted from any award hereunder
to which the Participant or his/her Beneficiary may become entitled.
If the Participant ceases to be disabled and does not
return to work at the Company, the Participant shall be considered to have
terminated employment with the Company as of the date benefits became payable
hereunder, and any payments made to such Participant pursuant to the Plan during
his/her disability shall be deducted from any award to which the Participant or
his/her Beneficiary may become entitled.
b. Termination of Employment.
i. Upon termination of employment (other than by death,
disability or Retirement), a Participant shall be entitled to receive an annual
benefit equal to his Accrued Benefit payable in equal monthly installments for a
period of fifteen (15) years commencing on his Normal Retirement Date; provided,
however, with the consent of the Committee, such Participant may receive
benefits commencing on his or her Early Retirement Date on the same basis as any
other Participant retiring early.
ii. If a Participant terminates employment with the
Company (other than by death, disability or Retirement) and dies before
commencement of benefits, in lieu of any other benefits payable hereunder, the
Participant's Beneficiary shall be entitled to receive an amount equal to the
Actuarial Equivalent of the Participant's Accrued Benefit payable in a lump sum.
Such lump sum payment shall supersede any prior election for periodic payments
made pursuant to the Plan.
5. Obligation to Pay Benefits Hereunder. Except as required by the Jack
Eckerd Corporation Benefit Plans Trust (the "Trust"), the Company shall have no
obligation to fund a trust fund, escrow account or otherwise to segregate assets
to guarantee, secure or assure the payment of any benefit under the Plan, but
the Company may (and to the extent required by the Trust, shall) fund a
nonqualified grantor trust to provide for the payment of benefits under the
Plan. The establishment or funding of any such nonqualified grantor trust shall
not relieve the Company of any of its obligations pursuant to the Plan, except
that amounts paid to the Participants or other payees hereunder from any such
trust shall be offset against the amount of payments required to be made
hereunder by the Company to the Participant or other payee. To the extent that
any person acquires a right to receive payments from the Company or from any
trust pursuant to the Plan, such right shall be no greater than the right of an
unsecured general creditor of the Company and shall not be deemed to be a right
to payment of wages for purposes of any law providing for a lien or any other
priority for claims for wages. Any trust established to provide for any payments
hereunder shall be subject to the claims of creditors of the Company in the
event of any insolvency of the Company, and all the Company's obligations to pay
benefits pursuant to the Plan shall constitute only a general and unsecured
contractual liability of the Company to the participants and other payees
hereunder in accordance with the terms hereof. Amounts payable hereunder,
whether from such a nonqualified grantor trust or from the Company's general
assets, shall be subject in all respects to claims of general creditors of the
Company until actually paid over to the person(s) entitled to receive the same.
6. Other Provisions Concerning Payment. All amounts payable during the
lifetime of a Participant shall be paid directly to the Participant unless
applied for the Participant's benefit in accordance with Section 9 hereof.
Except as otherwise provided in this Plan, all amounts payable after the death
of a Participant shall be payable to the Beneficiary or Beneficiaries in the
manner designated by the Participant. If a Participant who is being paid
pursuant to the normal method of payment has received any payment or payments
during his or her lifetime, the number of installments payable to the
Beneficiary or Beneficiaries after the Participant's death shall be reduced by
the number of installments paid to such Participant. All amounts payable,
whether to a living person or to the estate of a deceased person, shall be paid
net after the withholding of any federal, state or local income, earnings and
other taxes which might be required to be withheld from such payments.
7. Designation of a Beneficiary. Each Participant shall specifically
designate, by name, on forms provided by the Company, the Beneficiary(ies) who
shall receive any benefits which might be payable after his or her death. Such
designation may be made at any time satisfactory to the Company. If a
Participant has not designated a Beneficiary in the manner provided above, the
Participant's estate shall be the Beneficiary. A designation of a Beneficiary
may be changed or revoked without the consent of the Beneficiary at any time or
from time to time in such manner as may be provided by the Company, and the
Company shall have no duty to notify any person designated as a Beneficiary of
any change in any such designation which might affect such person's present or
future rights hereunder. If the designated Beneficiary does not survive the
Participant, all amounts which would have been paid to such deceased Beneficiary
shall be paid to the alternative or successor Beneficiary or Beneficiaries (if
any) designated by the Participant or, if the Participant has not designated any
alternative or successor Beneficiary, to the estate of the deceased Participant,
but, if a designated Beneficiary, having survived the Participant, dies before
receiving all of the amount payable hereunder, the amount which such Beneficiary
would have received had he lived to receive benefits shall be paid to the estate
of such deceased Beneficiary unless a contrary direction was made by the
Participant, in which event such direction shall control. Not more than five (5)
persons or, if a greater number, that number of persons as shall be necessary to
permit the Participant to designate as simultaneous Beneficiaries any or all of
the Participant's surviving children and spouse, may be named as simultaneous
Beneficiaries of any Participant at any one time, and, if two or more persons
are to be simultaneous beneficiaries, or, if the Participant wishes to designate
alternative, successor or contingent Beneficiaries, the Participant shall
specify the shares, terms and conditions upon which amounts shall be paid to
such multiple, alternative, successor or contingent Beneficiaries, all of which
must be clearly stated to the satisfaction of the Committee. Any payment under
this Plan which may be made to a Beneficiary after the death of a Participant
shall be made only to the person (s) designated pursuant to this section by the
Participant who would otherwise have been paid such amounts.
8. Payees Presumed Competent. Every person receiving or claiming
amounts payable under this Plan shall be conclusively presumed to be mentally
competent and of legal age until the Company receives a written notice, in form,
manner and substance acceptable to it, that any such person has been adjudged
legally incompetent or is a minor or that a guardian or other person legally
vested with the care of such person's estate has been appointed.
9. Distribution to Persons Under a Legal Disability. If any amount
payable hereunder is payable to a minor or other person under legal disability,
the Company shall make payments thereof in one (or any combination) of the
following ways, as the Committee shall determine in its sole right, but is not
obligated, to insist that a legal guardian be appointed before making any
payments hereunder:
a. directly to said minor or other person;
b. to the legal representatives of said minor or other person;
or
c. to some relative or friend of said minor or other person
for the support, welfare or education of such minor or other person.
The Company shall not be required to see to the application of
any payment so made, and the receipt of the person in one of the above three
categories to whom such payment is actually made shall fully discharge the
Company from any further accountability or responsibility with respect to the
amount so paid.
10. Notice of Address; Lost Payees.
a. Every Participant shall file a notice of his or her post
office address and of the post office address and Social Security number of each
Beneficiary designated by him or her and of each change of any such address, in
writing, with the Company. Any communication, statement or notice addressed to
any such person at the latest post office address on file shall be binding upon
such person for all purposes, and the Company shall not be obliged to search for
or attempt to ascertain the whereabouts of any such person except as hereinafter
provided, and, if a Participant fails or neglects to file such addresses, the
Participant's address shall be presumed to be his or her last address on file in
the personnel records of the Company, and, in the case of a person whole rights
accrued through or from a Participant, his or her last address shall be presumed
to be in care of the last address of such Participant on file in the personnel
records of the Company.
b. If the Company is unable to locate any person entitled to
receive a payment hereunder or the estate of any such person, if deceased, and
if the Company shall make a search for such person and/or such person's estate
in the manner hereinafter prescribed, the right and interest of such payee in
and to the amount payable shall terminate on the last day of the one (1) year
period commencing with the publication of the notice hereinafter described, and
the amount so payable shall be payable to the estate of the Participant to whom
such amount had originally been payable; provided, however, that, if the estate
of such Participant cannot be located within an additional one (1)-year period,
the unclaimed amount shall be forfeited. In its search for such payee, the
Company shall mail a notice, postage prepaid, by U.S. registered or certified
mail, return receipt requested and return postage guarantee, to the last known
address of such payee or (if the payee is not the Participant and if the address
of the payee is unknown) to such payee in care of the last known address of the
Participant from whom such payee's rights are derived. If all notices sent as
aforesaid are returned unclaimed or addressee unknown, the Company shall publish
a notice in a newspaper having a general circulation in the same general area as
the last known address of the payee stating that the Company holds an amount of
payment hereunder and giving such additional information as may be reasonably
calculated to come to the notice of the parties having an interest herein. The
foregoing actions shall satisfy the Company's obligation to conduct a search for
such payee or the estate of the Participant; provided, however, that the Company
shall never be required to expend in such search an amount greater than the
amount payable hereunder, and all amounts so expended shall be charged against
the amounts held for payment.
11. No Liability for Participant's Debts (Other than Indebtedness to
the Company). If, at the time any benefit becomes payable hereunder, there is
any indebtedness due the Company from the payee thereof, the Company (without
being obligated to do so) may direct that some or all of the amounts payable to
such party be applied against such indebtedness (including any interest properly
payable on such indebtedness), and only the unapplied balance shall be paid to
the party otherwise entitled to receive such payment. Except to the extent
amounts otherwise payable are applied against indebtedness of the Participant or
Beneficiary to the Company in accordance with the foregoing authority, this Plan
and the amounts payable hereunder shall not, in any manner, be liable for or
subject to the debts or liabilities of any payee, and no amount payable
hereunder shall, at any time or in any manner, be subject to anticipation,
alienation, sale, transfer, assignment, pledge or encumbrance of any kind,
whether to the Company or to any other party whomsoever, and whether with or
without consideration. If any payee shall attempt to, or shall, anticipate,
alienate, sell, transfer, assign, pledge or otherwise encumber any amounts
payable hereunder or any part thereof, or, if by reason of bankruptcy or other
event, such amounts would at any time be received or enjoyed by persons other
than such payee except as otherwise permitted by this Plan, the Company, in its
sole discretion, may terminate such person's interest in any such amounts and
hold or apply such amounts to or for the use of such person or such person's
spouse, children or other dependents, or any of them, as the Company may
determine.
12. Administration. This Plan shall be administered by the Committee,
which shall have full power, authority and discretion to do all things necessary
or appropriate to the proper administration hereof, except that the Board shall
have sole power to determine whether any Employee is entitled to participate in
the Plan. The Committee's power, authority and discretion shall include, without
limiting the generality of the foregoing, full power, authority and discretion
to construe the Plan and the Plan Agreements and to determine all questions
which may arise hereunder relating to the administration of the Plan and the
Plan agreements (other than eligibility to participate in the Plan), including
questions relating to the status and rights of Participant, Beneficiaries and
other persons hereunder. Any rules adopted by the Committee shall be
administered uniformly and applied with equal effectiveness and in a
nondiscriminatory manner to all persons similarly situated. Notwithstanding any
other provision hereof, the trustee of the Trust (the "Trustee") shall have the
power, authority, and discretion, pursuant to and to the extent provided in the
Trust, to override any determination or interpretation by the Committee, the
Board or the Company affecting the rights of any Participant or Beneficiary to a
benefit under the Plan. Except as provided in the next sentence, notwithstanding
any other provision hereof, all power, authority and discretion vested in the
Committee, the Board, or the Company under the Plan shall, on or after the date
on which a Change in Control (as defined in the Trust) occurs, no longer be
vested in the Company, the Board, or the Committee and instead shall be vested
in the Trustee, and any matter which requires the mutual agreement of a
Participant and the Company, Board or Committee shall instead require the
agreement of the Participant and the Trustee. Notwithstanding the preceding
sentence, following a Change in Control, the Trustee shall not be vested with
the power, authority, or discretion provided by the following provisions of the
Plan, which power, authority, or discretion shall remain with the same entity
(whether the Board or the Committee) that exercised such power, authority, or
discretion prior to the Change in Control: (i) to waive the application of the
fraction set forth in subparagraph 1(a)(ii) and instead provide an accrued
benefit to a Participant equal to the amount in subparagraph 1(a)(i), as
provided in subparagraph 1(a)(ii); (ii) to waive the years of service
requirement set forth in the final paragraph of subsection 1(a), as provided in
that paragraph; (iii) to waive the age requirement for early Retirement, as
provided in subsection 1(h); (iv) to consent, if such consent is permitted under
existing law, to a Participant's continued employment with the Company after his
or her Normal Retirement Date, as provided in subsection 1(j); (v) to determine
whether a Participant is disabled, as provided in Subsection 4(a); (vi) to pay a
lump sum, as provided in subsection 14(c); and (vii) to deviate from the normal
methods of payment, as provided in subsection 14(d).
13. Negation of Employment Contract. This Plan is intended to, and
does, relate exclusively to benefits payable after termination of employment and
does not create an employment contract. Nothing contained herein shall be
deemed:
a. to give a Participant the right to be retained in the
employ of the Company;
b. to interfere with the right of the Company to discharge or
demote a Participant at any time;
c. to give the Company the right to require a Participant to
remain in its employ; or
d. to interfere with the right of a Participant to terminate
employment at any time.
14. Modification, Amendment or Termination.
a. The Company reserves the absolute right to modify or amend
this Plan in whole or in part, at any time and from time to time, effective as
of any specified prior, current or future date, by action of the Board of
Directors or its delegate; provided, however, that except as necessary to
prevent this Plan from being subject to any provision of Title I, Subtitle B,
Parts 2, 3 or 4 of the Employee Retirement Income Security Act of 1974, as
amended, or any successor thereto, no Participant affected by any such
modification or amendment shall be deprived of the right to receive any part of
the Accrued Benefit he would have been entitled to receive under the terms of
the Plan as in effect immediately prior to such modification or amendment if he
had terminated employment with the Company on the date of such modification or
amendment; and provided further that, on or after the date of a Change in
Control (as defined in the Trust), the Company shall have no power to modify,
amend or interpret the Plan in any manner that would result in any Participant
receiving a smaller Accrued Benefit than such Participant would have received
under the terms of the Plan as in effect on the day immediately preceding the
date on which the Change in Control occurs.
b. The Company also reserves the right to terminate this Plan,
in whole or in part, voluntarily as of any specified current or future date by
action of the Board. This Plan shall be automatically terminated upon a
dissolution of the Company (but not upon a merger, consolidation, reorganization
or recapitalization of the Company if a surviving corporation therein assumes
this Plan); upon the Company being legally adjudicated a bankrupt; upon the
appointment of a receiver or trustee in bankruptcy with respect to the Company's
assets and business if such appointment is not set aside within ninety (90) days
thereafter; or upon the making by the Company of an assignment for the benefit
of creditors. Upon termination of this Plan, no additional Employees shall be
selected to participate herein, and no additional benefits shall be accrued
hereunder. Notwithstanding the total or partial termination of this Plan, except
as necessary to prevent this Plan from being subject to any provision of Title
I, Subtitle B, Parts 2, 3 or 4 of the Employee Retirement Income Security Act of
1974, as amended, or any successor thereto, no Participant affected thereby
shall be deprived of the right to receive any part of the Accrued Benefit he
would have been entitled to receive under the terms of the Plan as in effect
immediately prior to the termination of the Plan had he terminated employment
with the Company on the date of such termination. Such Accrued Benefit shall be
paid at the time and in the manner provided by this Plan (as in effect
immediately prior to the termination) upon observance and performance of the
Participant's obligations under the Plan Agreement to which the Participant is a
party.
c. If any benefit payable hereunder becomes payable to any
person, the amount thereof may, in the sole discretion of the Committee, be paid
in a single lump sum, the amount of which shall be Actuarial Equivalent of the
total amount of benefits thereafter payable.
d. In any instance in which the Committee in its sole and
uncontrolled discretion believes such action to be in the best interest of the
party entitled to receive any payment provided by this Plan, or to be in the
best interests of the Company (such as to eliminate small account balances or to
avoid the administrative inconvenience and expense which might be incurred if
relatively small amounts were to be paid to multiple recipients over lengthy
periods of time), amounts payable in installments pursuant to the provisions of
this Plan may be paid in a single lump sum, the amount of which shall be
determined in the manner provided in paragraph (c) above. It is intended by this
paragraph to vest the Committee with full discretion to administer this Plan and
to determine when and under what circumstances deviations which accelerate the
normal method of payments of benefits are necessary, desirable or appropriate,
and the Committee shall have full plenary power to authorize such deviations as
regards to each payee separately, notwithstanding that one or more persons may
be payees of benefits relating to the same Participant. To illustrate, the
Committee shall be free to authorize a lump sum distribution to one Beneficiary
of a deceased Participant, while directing that another Beneficiary of the same
deceased Participant receive the amount to which he is entitled over a period of
time. The Committee will normally consider the wishes of any payee who might
request a deviation from the normal method of payment applicable to him, but
shall not be obligated to honor any request for deviation. In any case, any
payment method which deviates from the norm shall be the Actuarial Equivalent of
the normal method of payment.
e. In the event of the death of a Participant or any
Beneficiary designated by him or her, the Company need not make any payment
provided for by this Plan until it shall have received proof satisfactory to it
of such death and of the identity, existence and location of the party
thereafter entitled to received payments under this Plan.
f. In making any payment or taking any action under this Plan,
the Company shall be absolutely protected in relying upon any finding or
statement of facts believed by it to have been signed by the proper party.
g. This Plan and all Participation Agreements entered into
hereunder shall be construed and enforced under and in accordance with the laws
of the State of Florida.
15. Plan Agreement. Each Participant shall be entitled to benefits in
accordance with this Plan and his Plan Agreement. The Plan Agreement may modify
any of the terms of this Plan as it applies to the Participant. In the event of
a conflict between the Plan Agreement and this Plan, the Plan Agreement shall
control.
16. Claims Procedure. In the event that benefits under this Plan are
not paid to the Participant (or his Beneficiary in the case of Participant's
death), and such person feels entitled to receive them, a claim shall be made in
writing to the Committee within sixty (60) days from the date payments are not
made. Such claim shall be reviewed by the Committee and the Board of Directors
of the Company. If the claim is denied in full or in part, the Committee shall
provide a written notice within ninety (90) days setting forth the specific
reasons for denial, specific reference to the provisions of this Plan or the
Plan Agreement upon which the denial is based and any additional material or
information necessary to perfect the claim, if any. Also, such written notice
shall indicate the steps to be taken if a review of the denial is desired.
However, under no circumstances, shall a notification of denial which does not
satisfy all of the foregoing requirements be deemed to constitute an acceptance
of a claim. If the Committee does not provide the Participant (or the
Beneficiary in the case that the Participant is dead) with notice of its
decision within ninety (90) days, the claim shall be deemed to be denied. If a
claim is denied and a review is desired, the Participant or his Beneficiary in
the case of the Participant's death, shall notify the Committee in writing
within sixty (60) days after receipt of either the notification or denial or the
expiration of the said ninety (90) day period, whichever first occurs.
In requesting a review, the Participant or his Beneficiary may
review this Plan or the Plan Agreement or any documents relating to it and
submit any written issues and comments he or she may feel appropriate. In its
sole discretion, the Committee shall then review the claim and provide a written
decision within sixty (60) days. This decision, likewise, shall state the
specific reasons for the decision and shall include reference to specific
provisions of this Plan or the Plan Agreement on which the decision is based.
IN WITNESS WHEREOF, ECKERD CORPORATION has caused this Amended and
Restated Plan to be executed, and its corporate seal to be hereunto affixed, by
its officers hereunto duly authorized, effective as of February 4, 1996.
ECKERD CORPORATION
By: /s/ Francis A. Newman
(SEAL) Name: Francis A. Newman
Its: President
ATTEST:
/s/ James M. Santo
Secretary
a: exsuppl4/doc
EXHIBIT "A"
SECOND EXECUTIVE SUPPLEMENTAL BENEFIT
PLAN AGREEMENT
OF
ECKERD CORPORATION AND ITS SUBSIDIARIES
The undersigned executive employee ("Employee") acknowledges that as an
Employee of Eckerd Corporation and its Subsidiaries ("Employer"), Employee has
been offered an opportunity to participate in The Second Executive Supplemental
Benefit Plan ("Plan") subject to the terms and conditions stated in the Plan, a
copy of which is attached hereto and incorporated herein by reference. In the
event of any inconsistencies between the provisions of this Plan Agreement and
the Plan, the provisions of the Plan shall prevail.
Employee's Covered Salary, benefits and designated beneficiary(ies) are
agreed to be as follows:
1. Employee's Covered Salary: per annum.
2. Years of Service as of
00 YEARS; 00 MONTHS
3. Retirement Benefit:
a. Retirement at age 65: per annum payable in 180
equal monthly installments of .
b. Early Retirement: The Employee's Accrued Benefit (as defined in
Paragraph 1.a. of the Plan) reduced in accordance with
Paragraph 3.b. of the Plan.
c. Late Retirement: The benefit payable in a. above as adjusted
pursuant to Paragraph 3.c. of the Plan.
d. Termination Benefit: The Employee's Accrued Benefit payable as
provided in Paragraph 4.c. of the Plan.
e. Disability Benefit. Determined in accordance with Paragraph
4.b. of the Plan.
f. Commencement of Retirement Benefits. Thirty (30) days prior to
Employee's Normal Retirement Date or Early Retirement Date
application may be made to the Committee to have such
Retirement Benefits commence on the first day of the month
following the Normal or Early Retirement Date.
4. Beneficiary(ies):
a. The Employee hereby designates as primary beneficiary or
beneficiaries to receive any benefits payable after the death
of Employee:
Primary Beneficiary(ies):
Address &
Name Share Relationship Social Security Number
b. The Employee designates the following person or persons as
successor beneficiary or beneficiaries to receive any benefits
payable after the death of Employee and the primary
beneficiary(ies):
Successor Beneficiary(ies):
Address &
Name Share Relationship Social Security Number
5. The Employee has read this Plan Agreement and the Plan and is aware of and
accepts the terms and conditions set forth in each document. In particular,
Employee understands that the benefits payable pursuant to the Plan and the Plan
Agreement are unsecured contractual obligations of the Employer and the Employer
has no obligation whatsoever to set aside funds in advance for the payment of
benefits hereunder.
IN WITNESS WHEREOF the parties hereto have hereunto set their hands
effective as of the day of , .
EMPLOYER:
ECKERD CORPORATION AND
ITS SUBSIDIARIES
ATTEST:
- - ------------------------ By:
-------------------------
TITLE:
----------------------
WITNESS: EMPLOYEE:
- - ----------------------- ----------------------------
Signature
----------------------------
Type or Print Name
----------------------------
----------------------------
Address of Employee
EXHIBIT 15.1
The Board of Directors
Eckerd Corporation and Subsidiaries:
RE: Registration Statement on Form S-3 (No. 33-50223)
Registration Statement on Form S-8 (No. 33-49977)
Registration Statement on Form S-8 (No. 33-50755)
Registration Statement on Form S-3 (No. 33-56261)
Registration Statement on Form S-8 (No. 33-60175)
With respect to the above referenced registration statements, we
acknowledge our awareness of the incorporation by reference therein of
our report dated June 14, 1996 related to our review of interim
financial information, which report was included in the Form 10-Q of
Eckerd Corporation and Subsidiaries for the thirteen weeks ended May 4,
1996.
Pursuant to Rule 436(c) under the Securities Act of 1933, such report
is not considered a part of a registration statement prepared or
certified by an accountant or a report prepared or certified by an
accountant within the meaning of Sections 7 and 11 of the Act.
KPMG PEAT MARWICK LLP
Tampa, Florida
June 14, 1996
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<CIK> 0000031364
<NAME> ECKERD CORPORATION
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<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> FEB-01-1997
<PERIOD-START> FEB-04-1996
<PERIOD-END> MAY-04-1996
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0
0
<OTHER-SE> 94,164
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<OTHER-EXPENSES> 236,599
<LOSS-PROVISION> 934
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<INCOME-PRETAX> 50,524
<INCOME-TAX> 11,114
<INCOME-CONTINUING> 39,410
<DISCONTINUED> 0
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<CHANGES> 0
<NET-INCOME> 39,410
<EPS-PRIMARY> .55 <F1>
<EPS-DILUTED> .55 <F1>
<FN>
<F1>EPS PRIMARY AND DILUTED REFLECTS THE TWO-FOR-ONE STOCK SPLIT EFFECTED IN THE
FORM OF A STOCK DIVIDEND WHICH WAS PAYABLE TO STOCKHOLDERS OF RECORD APRIL
22, 1996 AND PAID ON MAY 13, 1996.
</FN>
</TABLE>
