AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 25, 1999
REGISTRATION NO. 333-63019
===========================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------------------------
POST EFFECTIVE AMENDMENT NO. 1
ON FORM S-8
TO
FORM S-4
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
-----------------------------------
ALBERTSON'S, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 82-0184434
(State or other (I.R.S. Employer
jurisdiction of Identification Number)
incorporation or
organization)
250 PARKCENTER BLVD. BOX 20
BOISE, IDAHO 83726
(Address of registrant's
principal executive offices)
ALBERTSON'S AMENDED AND RESTATED 1995 STOCK-BASED INCENTIVE PLAN
AMERICAN STORES COMPANY 1997 STOCK OPTION AND STOCK AWARD PLAN
AMERICAN STORES COMPANY 1997A STOCK OPTION AND STOCK AWARD PLAN
AMERICAN STORES COMPANY 1997 STOCK PLAN FOR NON-EMPLOYEE DIRECTORS
AMERICAN STORES COMPANY AMENDED AND RESTATED 1989 STOCK OPTION AND
STOCK AWARD PLAN
AMERICAN STORES COMPANY AMENDED AND RESTATED
1985 STOCK OPTION AND STOCK AWARD PLAN
AMERICAN STORES RETIREMENT ESTATES
THOMAS R. SALDIN, ESQ.
EXECUTIVE VICE PRESIDENT AND GENERAL COUNSEL
ALBERTSON'S, INC.
250 PARKCENTER BOULEVARD
P.O. BOX 20
BOISE, IDAHO 83726
(208) 395-6300
(Name, address, and telephone number of agent for service)
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
- ------------------------------------------ -------------------- ----------------- ----------------- ---------------------
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF SECURITIES AMOUNT TO BE OFFERING PRICE AGGREGATE AMOUNT OF
TO BE REGISTERED REGISTERED (1) PER SHARE OFFERING PRICE REGISTRATION FEE
- ------------------------------------------ -------------------- ----------------- ----------------- ---------------------
<S> <C> <C> <C> <C>
Common Stock, par value $1.00 per share 20,000,000 shares $51.50 (2) $1,030,000,000 $ 286,340
- ------------------------------------------ -------------------- ----------------- ----------------- ---------------------
Common Stock, par value $1.00 per share 2,465,295 shares(3) $33.96 (4) $ 83,721,418 $ 23,275
- ------------------------------------------ -------------------- ----------------- ----------------- ---------------------
Common Stock, par value $1.00 per share 650,000 shares(5) 51.50 (6) $ 33,475,000 $ 9,306
- ------------------------------------------ -------------------- ----------------- ----------------- ---------------------
Preferred Stock Purchase Rights (7) 23,115,295 shares N/A N/A N/A
- ------------------------------------------ -------------------- ----------------- ----------------- ---------------------
Total Registration fee $ 182,211(8)
- ------------------------------------------ -------------------- ----------------- ----------------- ---------------------
<FN>
(1) Plus such additional number of shares as may be required in the event
of a stock dividend, stock split, recapitalization or other similar
event in accordance with Rule 416(a) of the Securities Act of 1933, as
amended (the "Securities Act").
(2) Estimated solely for the purpose of determining the registration fee
pursuant to Rule 457(h) of the Securities Act based upon the average
of the high and low prices of the Registrant's common stock, par value
$1.00 per share ("Common Stock"), as reported by the New York Stock
Exchange on July 24, 1999.
(3) Represents the maximum number of shares of Common Stock issuable upon
exercise of options and limited stock appreciation rights granted
under the ASC 1997 Stock Option and Stock Award Plan, the ASC 1997A
Stock Option and Stock Award Plan, the ASC Amended and Restated 1989
Stock Option and Stock Award Plan, the ASC Amended and Restated 1985
Stock Option and Stock Award Plan and the ASC 1997 Stock Plan for
Non-Employee Directors outstanding immediately prior to the merger
(the "Merger") described in the Agreement and Plan of Merger, dated as
of August 2, 1998, by and among the Registrant, American Stores
Company ("ASC") and Abacus Holdings, Inc. (the "Merger Agreement").
(4) Pursuant to Rule 457(h) of the Securities Act, the amounts are
calculated based upon the weighted average exercise price at which the
stock options and limited stock appreciation rights described in
footnote 3 above may be exercised.
(5) Represents shares of Common Stock which may be issued pursuant to the
American Stores Retirement Estates subsequent to the Merger. Pursuant
to Rule 416(c) of the Securities Act, this Registration Statement also
covers an indeterminate amount of interests to be offered pursuant to
the American Stores Retirement Estates defined contribution plan.
(6) Estimated solely for the purpose of determining the registration fee
pursuant to Rule 457(h) of the Securities Act based upon the average
of the high and low prices of Common Stock, as reported by the New
York Stock Exchange on July 24, 1999.
(7) Associated with Common Stock are rights to purchase Series A Junior
Participating Preferred Stock that will not be exercisable or
evidenced separately from such Common Stock prior to the occurrence of
certain events.
(8) Pursuant to Rule 429(b) of the Securities Act, such amounts represent
an aggregate fee of $318,921 less $136,710 previously paid with
respect to 15,776,142 shares of ASC common stock covered by the
Registration Statement on Form S-4 (Registration No. 333-63019), to
which this amendment relates.
</FN>
</TABLE>
<PAGE>
PART I
EXPLANATORY NOTE
This Post-Effective Amendment No. 1 on Form S-8 to Form S-4 relates to
(a) 20,000,000 shares of common stock of Albertson's, Inc., par value
$1.00 per share, and the associated preferred share purchase
rights, together (the "Common Stock"), which may be issued under
our 1995 Amended and Restated Stock-Based Incentive Plan (the
"Albertson's Plan");
(b) 2,465,295 shares of Common Stock which may be issued upon the
exercise of options and/or limited stock appreciation rights
granted under the American Stores Company 1997 Stock Option and
Stock Award Plan, 1997A Stock Option and Stock Award Plan, 1997
Stock Plan for Non-Employee Directors, Amended and Restated 1989
Stock Option and Stock Award Plan and Amended and Restated 1985
Stock Option and Stock Award Plan (the "ASC Stock Plans");
(c) 650,000 shares of Common Stock which may be issued pursuant to
the American Stores Retirement Estates defined contribution plan
("ASRE") subsequent to the Merger as defined below; and
(d) an indeterminate amount of interests to be offered pursuant to
the ASRE.
Pursuant to the Agreement and Plan of Merger (the "Merger Agreement")
dated August 2, 1998 by and between Albertson's, Inc., American Stores
Company ("ASC"), and Abacus Holdings, Inc. ("Sub"), the following events,
among others, occurred:
(a) ASC was acquired by, and became a wholly-owned subsidiary of,
Albertson's, Inc. through the merger of Sub with and into ASC
(the "Merger");
(b) outstanding options and limited stock appreciation rights to
purchase shares of ASC common stock granted under the ASC Stock
Plans were converted into options and limited stock appreciation
rights to purchase shares of Common Stock; and
(c) shares of Common Stock, in lieu of ASC common stock, became
issuable pursuant to the ASRE.
The documents containing information specified by Part I of this
Registration Statement have been or will be sent or given to participants
in the Albertson's Plan, holders of options granted under the ASC Stock
Plans and participants in the ASRE, as specified in Rule 428(b)(1)
promulgated by the Securities and Exchange Commission (the "SEC") under the
Securities Act. Such document(s) are not required to be filed with the SEC
but constitute (along with the documents incorporated by reference into
this Registration Statement pursuant to Item 3 of Part II hereof) a
prospectus that meets the requirements of Section 10(a) of the Securities
Act of 1933.
References to the "Company" shall mean Albertson's, Inc., a Delaware
corporation.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference
We file annual, quarterly and special reports, proxy statements and
other information with the SEC. You may read and copy any document we file
at the SEC's public reference rooms in Washington, D.C., New York, NY and
Chicago, IL. Please call the SEC at 1-800-SEC-0330 for further information
on the public reference rooms. Our SEC filings are also available to the
public from the SEC's web site at http://www.sec.gov. Reports, proxy and
information statements and other information concerning us can also be
inspected at the offices of the New York Stock Exchange, 20 Broad Street,
New York, NY 10005.
The SEC allows us to "incorporate by reference" information into this
Registration Statement, which means that we can disclose important
information to you by referring you to another document filed separately
with the SEC. The information incorporated by reference is considered to be
part of this Registration Statement, and later information that we file
with the SEC will automatically update this Registration Statement. We
incorporate by reference the following documents listed below and any
future filings made with the SEC under Sections 13(a), 13(c), 14 or 15(d)
of the Securities Exchange Act of 1934, as amended, prior to the
termination of the offering:
(a) The description of the Common Stock included in our Registration
Statement on Form 8-A, filed with the SEC on January 29, 1976,
and all amendments or reports filed for the purpose of updating
such description;
(b) Our Quarterly Report on Form 10-Q, filed with the SEC on June 3,
1999, for the 13 week period ending April 29, 1999;
(c) Our Annual Report on Form 10-K, filed with the SEC on April 8,
1999 for the fiscal year ended January 28, 1999;
(d) The Annual Report on Form 11-K for the ASRE, filed by ASC with
the SEC on June 25, 1999;
(e) Our Current Report on Form 8-K filed with the SEC on January 11,
1999 filing the Joint Proxy Statement and Prospectus, dated
October 9, 1998;
(f) Our Current Report on Form 8-K filed with the SEC on April 6,
1999; and
(g) The description of the Preferences and Rights of Series A Junior
Participating Preferred Stock included in our Registration
Statement on Form 8-A dated March 4, 1997, as amended by
Amendment No. 1 on Form 8-A dated August 6, 1998.
Item 4. Description of Securities
Not applicable.
Item 5. Interests of Named Experts and Counsel
The legality of the Common Stock covered by this Registration
Statement has been passed on for the Company by Thomas R. Saldin, Esq.,
Executive Vice President and General Counsel for the Company. Mr. Saldin
owns 26,813 shares of Common Stock and has an option under the Company's
1986 Nonqualified Stock Option Plan to purchase 4,000 shares of Common
Stock for $16.5625 per share (the fair market value on the date of grant),
an option under the Company's 1986 Nonqualified Stock Option Plan to
purchase 16,000 shares of Common Stock for $24.3125 per share (the fair
market value on the date of grant), an option under the Company's 1986
Nonqualified Stock Option Plan to purchase 15,000 shares for $25.125 per
share (the fair market value on the date of the grant), and three options
under the Company's 1995 Stock-Based Incentive Plan to purchase a total of
75,000 shares of Common Stock, at exercise prices (the fair market value on
the date of grant) per share of $31.875 (25,000 options), $35.00 (25,000
options) and $45.6875 (25,000 options). All of these Options became
exercisable upon completion of the American Stores acquisition. Mr. Saldin
has been granted an option to purchase $4,000,000 worth of Common Stock
with the number of shares and the option price to be determined based upon
the closing price of the Common Stock on the New York Stock Exchange on
June 24, 1999 (the fair market value on the date of grant).
Item 6. Indemnification of Directors and Officers
Section 145 of the Delaware General Corporate Law (the "DGCL")
provides that a corporation may indemnify officers, directors, employees
and agents against expenses, judgments and other amounts paid if such
person acted in good faith and in a manner they reasonably believed to be
in, or not opposed to, the best interests of the corporation, and for any
criminal action, which they had no reason to believe was unlawful. Upon
receipt of a written undertaking to reimburse the corporation if
indemnification is not appropriate the DGCL provides that a corporation may
advance expenses of defense and must reimburse a successful officer or
director defendant for expenses paid, including attorney's fees, and
permits a corporation to purchase liability insurance for its directors and
officers. The DGCL provides that an individual may not be indemnified for
any claim or matter where a court has determined that the individual is
liable to the corporation, unless the court determines otherwise.
Our Restated Certificate of Incorporation and Bylaws provide that each
person who is involved in any actual or threatened action, suit or
proceeding, whether civil, criminal, administrative or investigative, by
reason of the fact that he or she is or was serving as our director,
officer, employee or agent, or is or was serving at our request as a
director, officer, employee or agent of another corporation or other
enterprise, including service with respect to an employee benefit plan,
will be indemnified by us to the extent permitted by the DGCL. The
indemnification rights in our Restated Certificate are not exclusive of any
other indemnification that may be given under any law, bylaw, agreement,
vote of stockholders or disinterested directors or otherwise. We are
authorized to purchase insurance on behalf of our directors, officers,
employees and agents.
Pursuant to our merger agreement with ASC, following our acquisition
of ASC, we will indemnify and hold harmless each present and former
director and officer of ASC or any of its subsidiaries, when acting in such
capacity, against all expenses, including attorney's fees, judgments and
other amounts paid for any action, suit, proceeding or investigation
whether civil, criminal, administrative or investigative for acts or
omissions, existing on or prior to our acquisition of ASC to the extent
permitted by the DGCL. Additionally, our merger agreement with ASC requires
us to purchase and maintain insurance covering present and former officers,
directors, employees, trustees and agents of ASC for at least six years
following our acquisition of ASC, subject to certain limitations.
This summary is subject to the DGCL, the Company's Restated
Certificate of Incorporation, By-laws and agreements referred to above.
Item 7. Exemption from Registration Claimed
Not applicable.
Item 8. Exhibits
The American Stores Retirement Estates is qualified under Section
401(a) of the Internal Revenue Code of 1986, as amended, and the plan has
been, and any future amendment thereto will be, submitted to the Internal
Revenue Service in a timely manner and all changes required by the IRS in
order to qualify the plan will be made.
EXHIBIT NO. DESCRIPTION OF EXHIBIT
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4.1 Restated Certificate of Incorporation of the
Company (as amended) previously filed as Exhibit
3.1 to the Company's Quarterly Report on Form 10-Q
for the quarter ended April 30, 1998, and
incorporated herein by reference
4.2 By-Laws of the Company previously filed as Exhibit
3.2 to the Company's Annual Report on Form 10-K for
the fiscal year ended January 28, 1999, and
incorporated herein by reference
4.3 Stockholder Rights Plan Agreement previously filed
as Exhibit 1 to the Company's Registration
Statement on Form 8-A filed with the SEC on March
4, 1997, and incorporated herein by reference
4.4 Amendment No. 1 to Stockholder Rights Plan
Agreement, dated August 2, 1998, previously filed
as Exhibit 1 of Amendment to the Company's
Registration Statement on Form 8-A filed with the
SEC on August 6, 1998, and incorporated herein by
reference
4.5 Amendment No. 2 to Stockholders Rights Plan
Agreement, dated March 16, 1999, previously filed
as Exhibit 1 of Amendment to the Company's
Registration Statement on Form 8-A filed with the
SEC on March 25, 1999, and incorporated herein by
reference
4.6 Certificate of Designation, Preferences and Rights
of Series A Junior Participating Preferred Stock,
previously filed as Exhibit 3.1.1 to the Company's
Annual Report on Form 10-K for the year ended
January 30, 1998, and incorporated herein by
reference
4.7 Amendment to Certificate of Designation,
Preferences and Rights of Series A Junior
Participating Preferred Stock, previously filed as
Exhibit 3.1.2 to the Company's Annual Report on
Form 10-K for the year ended January 28, 1999, and
incorporated herein by reference
4.8 Agreement and Plan of Merger, dated as of August 2,
1998, by and between the Company, ASC and Abacus
Holdings, Inc. previously filed as Exhibit 2 to the
Company's Quarterly Report on Form 10-Q for the
quarter ended July 30, 1998, and incorporated
herein by reference
4.9 Albertson's, Inc. Amended and Restated 1995
Stock-Based Incentive Plan previously filed as
Exhibit 10.26 to the Company's Quarterly Report on
Form 10-Q for the quarter ended October 29, 1998,
and incorporated herein by reference
4.10 American Stores Company 1997 Stock Option and Stock
Award Plan previously filed as Exhibit B to the
American Stores Company 1997 Annual Proxy Statement
filed with the SEC on May 2, 1997, and incorporated
herein by reference
4.11 Amendment to the American Stores Company 1997 Stock
Option and Stock Award Plan, dated October 8, 1998,
previously filed as Exhibit 10.1 to the American
Stores Company Quarterly Report on Form 10-Q filed
on December 11, 1998, and incorporated herein by
reference
4.12* American Stores Company 1997A Stock Option and
Stock Award Plan
4.13 American Stores Company 1997 Stock Plan for
Non-Employee Directors previously filed as Exhibit
C to the American Stores Company 1997 Annual Proxy
Statement filed with the SEC on May 2, 1997, and
incorporated herein by reference
4.14* Amended and Restated American Stores Company 1989
Stock Option and Stock Award Plan
4.15* Amended and Restated American Stores Company 1985
Stock Option and Stock Award Plan
4.16* American Stores Retirement Estates (1994
Restatement)
4.17* First Amendment to the American Stores Retirement
Estates
4.18* Second Amendment to the American Stores Retirement
Estates
4.19* Third Amendment to the American Stores Retirement
Estates
4.20* Fourth Amendment to the American Stores Retirement
Estates
4.21* Fifth Amendment to the American Stores Retirement
Estates
4.22* Sixth Amendment to the American Stores Retirement
Estates
4.23* Seventh Amendment to the American Stores Retirement
Estates
4.24* Eighth Amendment to the American Stores Retirement
Estates
4.25* Ninth Amendment to the American Stores Retirement
Estates
5.1* Opinion of Thomas R. Saldin, Esq.
23.1 Consent of Thomas R. Saldin, Esq. (included in
Exhibit 5.1)
23.2* Consent of Deloitte & Touche LLP, Independent
Auditors
23.3* Consent of Ernst & Young LLP, Independent Auditors
24.1 Power of Attorney (included on signature page)
- ------------------------
* filed herewith
<PAGE>
Item 9. Undertakings
The Company hereby undertakes:
(a) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3)
of the Securities Act;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of this Registration Statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental change
in the information set forth in this Registration Statement;
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in this
Registration Statement or any material change to such information
in this Registration Statement;
provided, however, that paragraphs (i) and (ii) do not apply if the
information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed with or
furnished to the SEC by the Company pursuant to Section 13 or Section
15(d) of the Exchange Act that are incorporated by reference in this
Registration Statement.
(b) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(c) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold
at the termination of the offering.
(d) That, for the purpose of determining any liability under the
Securities Act, each filing of the Company's annual report pursuant to
Section 13(a) or Section 15(d) of the Exchange Act that is
incorporated by reference in this Registration Statement shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling
persons of the Company pursuant to the provisions described in Item 6 of
this Registration Statement, or otherwise, the Company has been advised
that in the opinion of the SEC such indemnification is against public
policy as expressed in the Securities Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities
(other than the payment by the Company of expenses incurred or paid by a
director, officer or controlling person of the Company in the successful
defense of any action, suit or proceeding) is asserted by such director,
officer or controlling person in connection with the securities being
registered, the Company will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be
governed by the final adjudication of such issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant
certifies that it has reasonable grounds to believe that it meets all of
the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Boise, State of Idaho, on June
23, 1999.
Albertson's, Inc.
/s/ Gary G. Michael
------------------------------------------
By: Gary G. Michael
Chairman of the Board and Chief
Executive Officer
POWER OF ATTORNEY
KNOW BY ALL PERSONS BY THESE PRESENTS:
That the undersigned officers and directors of Albertson's, Inc., a
Delaware corporation, do hereby constitute and appoint each of Gary G.
Michael, Thomas R. Saldin, Esq. and A. Craig Olson, the lawful
attorneys-in-fact and agents with full power and authority to do any and
all acts and things and to execute any and all instruments which said
attorneys and agents, and any one of them, determine may be necessary or
advisable or required to enable said corporation to comply with the
Securities Act and any rules or regulations or requirements of the SEC in
connection with this Registration Statement. Without limiting the
generality of the foregoing power and authority, the powers granted include
the power and authority to sign the names of the undersigned officers and
directors in the capacities indicated below to this Registration Statement,
to any and all amendments, both pre-effective and post-effective, and
supplements to this Registration Statement, and to any and all instruments
or documents filed as part of or in conjunction with this Registration
Statement or amendments or supplements thereof, and each of the undersigned
hereby ratifies and confirms that all said attorneys and agents, or any one
of them, shall do or cause to be done by virtue hereof. This Power of
Attorney may be signed in several counterparts.
<PAGE>
IN WITNESS WHEREOF, each of the undersigned has executed this Power of
Attorney as of the date indicated.
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed below by the following persons in the capacities
and on the dates indicated.
Signature Title Date
- --------- ----- ----
Chairman of the Board and
Chief Executive Officer
/s/ Gary G. Michael and Director June 23, 1999
- -------------------------
Gary G. Michael
Executive Vice President
/s/ A. Craig Olson and Chief Financial Officer June 23, 1999
- -------------------------
A. Craig Olson
President and Chief
Operating Officer and
/s/ Michael F. Reuling Director June 23, 1999
- -------------------------
Michael F. Reuling
Senior Vice President and
/s/ Richard J. Navarro Controller June 23, 1999
- -------------------------
Richard J. Navarro
/s/ A. Gary Ames Director June 23, 1999
- -------------------------
A. Gary Ames
/s/ Cecil D. Andrus Director June 23, 1999
- -------------------------
Cecil D. Andrus
/s/ Pamela G. Bailey Director June 23, 1999
- -------------------------
Pamela G. Bailey
/s/ Teresa Beck Director June 23, 1999
- -------------------------
Teresa Beck
/s/ Henry I. Bryant Director June 23, 1999
- -------------------------
Henry I. Bryant
/s/ John B. Carley Director June 23, 1999
- -------------------------
John B. Carley
/s/ Paul I. Corddry Director June 23, 1999
- -------------------------
Paul I. Corddry
/s/ John B. Fery Director June 23, 1999
- -------------------------
John B. Fery
/s/ Fernando R. Gumucio Director June 23, 1999
- -------------------------
Fernando R. Gumucio
Director
- -------------------------
Clark A. Johnson
/s/ Charles D. Lein Director June 23, 1999
- -------------------------
Charles D. Lein
Vice Chairman of the Board
/s/ Victor L. Lund and Director June 23, 1999
- -------------------------
Victor L. Lund
/s/ Beatriz Rivera Director June 23, 1999
- -------------------------
Beatriz Rivera
/s/ J.B. Scott Director June 23, 1999
- -------------------------
J.B. Scott
Director
- -------------------------
Arthur K. Smith
/s/ Thomas L. Stevens, Jr. Director June 23, 1999
- -------------------------
Thomas L. Stevens, Jr.
/s/ Will M. Storey Director June 23, 1999
- -------------------------
Will M. Storey
/s/ Steven D. Symms Director June 23, 1999
- -------------------------
Steven D. Symms
/s/ Thomas J. Wilford Director June 23, 1999
- -------------------------
Thomas J. Wilford
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, the
administrator of the American Stores Retirement Estates has duly caused
this registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Boise, State of Idaho, on June
24, 1999.
American Stores Retirement Estates
By: American Stores Company
/s/ Thomas R. Saldin
----------------------------------
By: Thomas R. Saldin
Senior Vice President
<PAGE>
Index to Exhibits
EXHIBIT NO. DESCRIPTION OF EXHIBIT
- ----------- ----------------------
4.1 Restated Certificate of Incorporation of the
Company (as amended) previously filed as Exhibit
3.1 to the Company's Quarterly Report on Form 10-Q
for the quarter ended April 30, 1998, and
incorporated herein by reference
4.2 By-Laws of the Company previously filed as Exhibit
3.2 to the Company's Annual Report on Form 10-K for
the fiscal year ended January 28, 1999, and
incorporated herein by reference
4.3 Stockholder Rights Plan Agreement previously filed
as Exhibit 1 to the Company's Registration
Statement on Form 8-A filed with the SEC on March
4, 1997, and incorporated herein by reference
4.4 Amendment No. 1 to Stockholder Rights Plan
Agreement, dated August 2, 1998, previously filed
as Exhibit 1 of Amendment to the Company's
Registration Statement on Form 8-A filed with the
SEC on August 6, 1998, and incorporated herein by
reference
4.5 Amendment No. 2 to Stockholders Rights Plan
Agreement, dated March 16, 1999, previously filed
as Exhibit 1 of Amendment to the Company's
Registration Statement on Form 8-A filed with the
SEC on March 25, 1999, and incorporated herein by
reference
4.6 Certificate of Designation, Preferences and Rights
of Series A Junior Participating Preferred Stock,
previously filed as Exhibit 3.1.1 to the Company's
Annual Report on Form 10-K for the year ended
January 30, 1998, and incorporated herein by
reference
4.7 Amendment to Certificate of Designation,
Preferences and Rights of Series A Junior
Participating Preferred Stock, previously filed as
Exhibit 3.1.2 to the Company's Annual Report on
Form 10-K for the year ended January 28, 1999, and
incorporated herein by reference
4.8 Agreement and Plan of Merger, dated as of August 2,
1998, by and between the Company, ASC and Abacus
Holdings, Inc. previously filed as Exhibit 2 to the
Company's Quarterly Report on Form 10-Q for the
quarter ended July 30, 1998, and incorporated
herein by reference
4.9 Albertson's, Inc. Amended and Restated 1995
Stock-Based Incentive Plan previously filed as
Exhibit 10.26 to the Company's Quarterly Report on
Form 10-Q for the quarter ended October 29, 1998,
and incorporated herein by reference
4.10 American Stores Company 1997 Stock Option and Stock
Award Plan previously filed as Exhibit B to the
American Stores Company 1997 Annual Proxy Statement
filed with the SEC on May 2, 1997, and incorporated
herein by reference
4.11 Amendment to the American Stores Company 1997 Stock
Option and Stock Award Plan, dated October 8, 1998,
previously filed as Exhibit 10.1 to the American
Stores Company Quarterly Report on Form 10-Q filed
on December 11, 1998, and incorporated herein by
reference
4.12* American Stores Company 1997A Stock Option and
Stock Award Plan
4.13 American Stores Company 1997 Stock Plan for
Non-Employee Directors previously filed as Exhibit
C to the American Stores Company 1997 Annual Proxy
Statement filed with the SEC on May 2, 1997, and
incorporated herein by reference
4.14* Amended and Restated American Stores Company 1989
Stock Option and Stock Award Plan
4.15* Amended and Restated American Stores Company 1985
Stock Option and Stock Award Plan
4.16* American Stores Retirement Estates (1994
Restatement)
4.17* First Amendment to the American Stores Retirement
Estates
4.18* Second Amendment to the American Stores Retirement
Estates
4.19* Third Amendment to the American Stores Retirement
Estates
4.20* Fourth Amendment to the American Stores Retirement
Estates
4.21* Fifth Amendment to the American Stores Retirement
Estates
4.22* Sixth Amendment to the American Stores Retirement
Estates
4.23* Seventh Amendment to the American Stores Retirement
Estates
4.24* Eighth Amendment to the American Stores Retirement
Estates
4.25* Ninth Amendment to the American Stores Retirement
Estates
5.1* Opinion of Thomas R. Saldin, Esq.
23.1 Consent of Thomas R. Saldin, Esq. (included in
Exhibit 5.1)
23.2* Consent of Deloitte & Touche LLP, Independent
Auditors
23.3* Consent of Ernst & Young LLP, Independent Auditors
24.1 Power of Attorney (included on signature page)
- -----------------------------
* filed herewith
Exhibit 4.12
AMERICAN STORES COMPANY
1997A STOCK OPTION AND STOCK AWARD PLAN
1. Adoption and Purpose of Plan. American Stores Company, a Delaware
corporation (the "Company"), hereby adopts a stock option plan providing
for the granting of stock options and stock appreciation rights to key
management employees (the "Plan"). The general purpose of the Plan is to
promote the interests of the Company and its shareholders in attracting,
maintaining and developing a management capable of assuring the future
success of the Company and by providing to key employees of the Company and
its subsidiaries and affiliates additional incentives to continue to
increase their efforts with respect to, and to remain in the employ of, the
Company or its subsidiaries or affiliates.
2. Terms and Conditions of the Plan. Unless and to the extent
specifically provided to the contrary herein, the terms and conditions of
the Plan, including but not limited to those pertaining to administration,
time of granting options, eligibility, option prices, terms of options,
adjustments upon changes in capitalization, option agreements, securities
laws, government and other regulations, non-exclusivity, no affect on
employment, transfer of employment, termination and amendment, and change
in control, shall be identical to the terms and conditions of the American
Stores Company 1989 Stock Option and Stock Award Plan, as amended (the
"1989 Plan"), which is incorporated herein by reference. To the extent the
1989 Plan is amended subsequent to the adoption of the Plan, the Plan shall
be deemed to have also been amended so that the terms and conditions of the
Plan remain identical to the terms and conditions of the 1989 Plan except
and as to the extent provided to the contrary herein.
3. Shares Subject to the Plan. The Committee, from time to time, may,
pursuant to the Plan, provide for the grant of options for the purchase of
common stock of the Company upon the exercise thereof, and may grant stock
appreciation rights, for an aggregate of up to 1,337,000 shares, subject to
adjustment as provided in Section 8 of the 1989 Plan. Shares shall be made
available under the Plan only from treasury stock. No restricted stock
awards shall be made under the Plan.
Exercise of an option in any manner shall be result in a decrease in
the number of shares which thereafter may be available under the Plan by
the number of shares as to which such option is exercised.
4. Effectiveness of the Plan. The Plan shall become effective as of
March 27, 1997.
Exhibit 4.14
AMERICAN STORES COMPANY
AMENDED AND RESTATED
1989 STOCK OPTION AND STOCK AWARD PLAN
1. Adoption and Purpose of Plan. American Stores Company, a Delaware
corporation (the "Company"), hereby adopts a stock option, stock
appreciation rights and stock award plan providing for the granting of
stock options, stock appreciation rights and stock awards to key management
employees (the "Plan"). The general purpose of the Plan is to promote the
interests of the Company and its shareholders in attracting, maintaining
and developing a management capable of assuring the future success of the
Company and by providing to key employees of the Company and its
subsidiaries and affiliates additional incentives to continue and increase
their efforts with respect to, and to remain in the employ of, the Company
or its subsidiaries or affiliates. So that maximum incentive can be
provided each particular employee participating in the Plan by granting him
an option or options best suited to his circumstances, the Plan provides
for granting both incentive (as defined in Section 422A of the Internal
Revenue Code of 1986, as amended (the "Code")) and nonqualified stock
options. The Plan also provides for the grant of stock appreciation rights,
and for the grant of shares to eligible participants, subject to forfeiture
restrictions which will lapse upon the passage of time, the participant's
continued employment with the Company, and certain other events.
2. Administration. The Plan shall be administered by a committee (the
"Committee") of not less than three Directors of the Company who shall be
appointed by the Board of Directors of the Company, none of whom shall be
eligible (or shall have been eligible within one year prior to the date of
their appointments) to participate in the Plan or to be selected as a
participant under any other discretionary plan of the Company or any of its
affiliates entitling them to acquire stock, stock options or stock
appreciation rights of the Company or any of its affiliates. The Committee
shall be authorized to interpret the Plan, to prescribe, amend and rescind
rules and regulations relating to it and to make all other determinations
necessary or advisable for its administration.
3. Shares Subject to Plan. The Committee, from time to time, may,
pursuant to the Plan, provide for the grant of options for the purchase of
common stock of the Company upon the exercise thereof, and may grant stock
appreciation rights and make restricted stock awards, for an aggregate of
up to 1,200,000 shares, subject to adjustment as provided in Section 8
hereof. The Committee, from time to time, may also grant stock appreciation
rights for up to an aggregate of 767,450 shares to be issued in connection
with options outstanding as of February 1, 1989 under the Company's 1974
Stock Option Plan and the Company's 1975 Employees' Stock Option Plan, said
stock appreciation rights to have the same terms as the stock appreciation
rights which are provided in connection with options granted hereunder
pursuant to Section 19 of the Plan. If an option ceases to be exercisable
in whole or in part for any reason, the shares which were subject to such
option, but as to which the option had not been exercised or exercisable at
the time of the termination of the option, shall continue to be available
under the Plan to be granted to other participants. Shares subject to
restricted stock awards which are forfeited to the Company shall also be
available under the Plan to be granted to other participants. Shares shall
be made available under the Plan from authorized and unissued stock or from
treasury stock.
Exercise of an option in any manner, including an exercise involving
an election of a stock appreciation right with respect to an option, shall
result in a decrease in the number of shares which thereafter may be
available under the Plan by the number of shares as to which the option is
exercised.
4. Time of Granting of Options. The effective date of the granting of
an option (the "Granting Date") shall be the date specified by the
Committee in its determination or designation relating to the award of such
option.
5. Eligibility. Options, stock appreciation rights and restricted
stock awards may be granted only to key employees (which term shall include
officers) who on the Granting Date are in the employ of the Company or any
of its present and future subsidiary corporations, as defined in Section
425(f) of the Code ("Subsidiaries"), provided that nonqualified options may
also be granted to key employees of any business entity in which the
Company shall have a substantial interest (an "Affiliate"). A director of
the Company or of a Subsidiary or Affiliate who is not also such an
employee shall not be eligible to receive an option or restricted stock
award. Options, stock appreciation rights and restricted stock awards may
be granted to eligible employees whether or not they hold or have held
options, stock appreciation rights or grants of restricted stock under the
Plan or under previously adopted plans.
6. Option Prices. The option price per share to be specified in each
option agreement shall be (i) with respect to incentive stock options, the
mean between the high and low prices of the common stock on the New York
Stock Exchange on the Granting Date, or such other price as the Committee
shall determine to be not less than 100% of fair market value of the common
stock on the Granting Date, provided, however, that with respect to any
incentive stock option granted to a person who on the Granting Date owns,
either directly or within the meaning of the attribution rules contained in
section 425(d) of the Code, stock possessing more than 10% of the total
combined voting power of all classes of stock of his or her employer
corporation or of its parent or subsidiary corporations, as defined
respectively in sections 425(e) and (f) of the Code (a "Ten Percent
Shareholder"), the option price per share shall not be less than 110% of
the fair market value of the common stock on the Granting Date; and (ii)
with respect to nonqualified stock options, such price as the Committee
shall in its sole discretion determine.
7. Certain Terms of Options.
(a) Nontransferability. No option (or related stock appreciation
rights, if any) granted under the Plan shall be transferable by the
optionee other than (i) by will or by the laws of descent and distribution;
(ii) in the case of a Non-Qualified Stock Option, pursuant to a qualified
domestic relations order (as defined in the Code or Title I of the Employee
Retirement Income Security Act of 1974, as amended, or the rules
thereunder); or (iii) pursuant to approval by the Committee on the terms
set forth below. The Committee may, in its discretion, authorize all or a
portion of the options granted or to be granted to an optionee to be on
terms which permit transfer by such optionee to (i) the spouse, children or
grandchildren of the optionee ("Immediate Family Members"), (ii) a trust or
trusts for the exclusive benefit of such Immediate Family members, or (iii)
a partnership in which such Immediate Family Members are the only partners,
provided that (x) there may be no consideration for any such transfer, (y)
the stock option agreement pursuant to which such options are granted must
be approved by the Committee, and must expressly provide for
transferability in a manner consistent with this Section 7(a), and (z)
subsequent transfers of transferred options shall be prohibited except
those in accordance with this Section 7(a). Following transfer, any such
options shall continue to be subject to the same terms and conditions as
were applicable immediately prior to transfer, provided that for purposes
of Section 7(a) hereof the term "optionee" shall be deemed to refer to the
transferee. The events of termination of employment of Section 7(b) hereof
shall continue to be applied with respect to the original optionee,
following which the options shall be exercisable by the transferee only to
the extent, and for the periods specified in Section 7(b). All options
shall be exercisable, subject to the terms of the Plan, during the
optionee's lifetime only by the optionee or by the transferee. In the event
an option or options are transferred by an optionee in the manner provided
herein, the original optionee shall remain subject to withholding taxes for
the amount of the income realized upon exercise of the options, and the
Company shall have no obligation to provide notice to the transferee of the
termination of the option due to termination of the original optionee's
employment or the death, disability or retirement of such original
optionee. Further, the Company shall be under no obligation to file a
registration statement under the Securities Act of 1933, as amended, with
respect to the shares issuable upon exercise of the options that have been
transferred.
(b) Period of Exercise; Termination. An option may be exercised in
whole at any time or in part from time to time during the option period,
subject to such limitations and restrictions as may be included in the
option, provided, however, that no option may be exercised within a period
of one year from the Granting Date thereof. In the case of termination of
employment by reason of retirement at or after age 57, the employee may,
(i) within three months of said retirement date in the case of incentive
stock options, or (ii) within twelve months of said retirement date in the
case of nonqualified stock options, exercise all of the option rights which
were exercisable on the day before said retirement date and any such
options not so exercised shall thereupon terminate. In the case of
termination of employment by reason of death, the employee's legal
representative may, within one year of the date of death (subject to the
limitation on the exercise of incentive stock options contained in Section
7(g)), exercise all of the option rights of the employee (whether or not
such options were exercisable on the day before the employee's death), and
any such options not so exercised shall thereupon terminate. In the case of
termination of employment by reason of disability (within the meaning of
Section 22(e)(3) of the Code), the employee or his legal representative, as
the case may be, may (i) with regard to stock options granted with an
exercise price equal to or greater than the fair market value of the
applicable shares on the date such options are granted, within one year of
the date of disability (subject to the limitation on the exercise of
incentive stock options contained in Section 7(g)), exercise all of such
option rights of the employee (whether or not such options were exercisable
on the day before such termination), and any such options not so exercised
shall thereupon terminate; and (ii) with regard to stock options granted
with an exercise price less than the fair market value of the applicable
shares on the date such options are granted, the employee shall be deemed
not to have terminated his employment by reason of his disability for the
purpose of determining when such options become exercisable and whether the
employee may exercise such options, whether or not such options were
exercisable on the day before such disability, and the options shall
terminate one year from the date which all of the options become
exercisable, unless the employee's disability terminates and he accepts
employment with an employer other than the Company, in which case the
employee's right to exercise options pursuant to this alternative shall
cease immediately, and any of such option rights not so exercised shall
terminate. In all other cases all rights to exercise options shall
terminate once the employee ceases to be an employee of the Company or any
of its Subsidiaries ( or, in the case of a nonqualified option, an
Affiliate), provided, however, that the Committee shall have the discretion
to permit options to be exercised in such circumstances for a period of up
to nine months after termination of employment. Each incentive stock option
shall expire not more than ten years (or, if granted to a Ten Percent
Shareholder, five years) after the Granting Date (or, if earlier, within
the above-stated period after death, disability or retirement). Each
nonqualified option shall expire not more than ten years after the Granting
Date (or if earlier, within the above-stated period after death, disability
or retirement). Notwithstanding the foregoing exercise rules relating to
death, disability or retirement, all options shall expire not more than 10
years (or, in the case of an incentive stock option granted to a Ten
Percent Shareholder, five years) after the Granting Date.
(c) Payment for Shares. Full payment for shares purchased upon the
exercise of an option shall be made in cash or, at the election of the
optionee and as the Committee may, in its sole discretion, approve, by
surrendering shares of common stock of the Company with an aggregate fair
market value (determined in accordance with Section 6, above) equal to the
aggregate option price, or by delivering such combination of shares of
common stock and cash as the Committee shall, in its sole discretion,
approve.
(d) Delivery of Shares; Withholding. Upon payment of the option price,
a certificate for the number of whole shares to which the participant is
entitled shall be delivered to such participant by the Company, provided,
however, that in the case of the exercise of a nonqualified option, the
participant has remitted to his employer an amount, determined by such
employer, necessary to satisfy applicable federal, state or local tax
withholding requirements, or made other arrangements with his or her
employer for the satisfaction of such tax withholding requirements.
(e) Stock Appreciation Rights. As an alternative to the payment by the
holder for the number of shares in respect of which an option is exercised,
the Committee may provide alternative settlement methods (hereinafter
referred to as stock appreciation rights) as follows:
(i) The Committee, in its discretion, may provide that any stock
option by its terms may permit the holder to elect any of the stock
appreciation rights set forth in subsection (iii) below.
(ii) The Committee, in its discretion, may at the request of an
employee holding a nonqualified option under the Plan which does not by its
terms include stock appreciation rights, amend the option to permit the
election of such rights by the holder.
(iii) The stock appreciation rights permit the holder to receive
from the Company: (A) cash in an amount equal to the excess of the value of
one share over the option price times the number of shares as to which the
stock appreciation right is exercised; (B) the number of whole shares
having an aggregate value not greater than the cash amount calculated under
alternative (A); or (C) any combination of cash and stock having an
aggregate value not greater than the cash amount calculated under
alternative (A). For purposes of determining the value of a stock
appreciation right, the value per share shall be determined as of the
exercise date in the manner specified in Section 6 above.
(iv) The exercise of a stock appreciation right with respect to
an option shall result in the expiration of such related option to the
extent of the number of stock appreciation rights exercised. In addition,
all stock appreciation rights related to incentive stock options shall be
subject to the following terms: (A) such stock appreciation rights shall be
exercisable only when the fair market value of the stock subject to the
related option exceeds the option price of the related option, and such
option is otherwise exercisable; (B) such stock appreciation rights are
transferable only when the related option is otherwise transferable, and
(C) such other terms as the Committee shall in its discretion determine to
be necessary to enable the related option to qualify as an incentive stock
option within the meaning of section 422A of the Code.
(v) Any election of any stock appreciation rights provided for
under this Section 7 shall be subject to the consent or disapproval of the
Committee at any time after the election is made and the Committee shall
have sole discretion to determine whether, and to what extent, the stock
appreciation right elected shall be paid in cash, in common stock, or
partially in cash and partially in common stock.
(vi) Any shares of common stock due upon exercise of a stock
appreciation right shall be delivered to the participant by the Company and
any payment of cash shall be made by the employer of the participant. The
employer of the participant shall deduct from the amount of any cash so
payable an amount necessary to satisfy applicable federal, state, or local
tax withholding requirements. If no cash is payable (or if the amount of
cash payable is insufficient to satisfy applicable tax withholding
requirements), no shares shall be delivered by the Company to the
participant until the participant remits to his or her employer an amount,
determined by such employer, necessary to satisfy applicable federal,
state, or local tax withholding requirements or makes other arrangements
for the satisfaction of such tax withholding requirements.
(f) No Fractional Shares. Only whole shares shall be issuable upon
exercise of options and stock appreciation rights. Any right to a
fractional share shall be satisfied in cash, or shall be eliminated, in the
sole discretion of the Committee.
(g) Limitation on Exercise of Incentive Stock Options. The aggregate
fair market value (determined as of the time options are granted) of the
shares with respect to which incentive stock options may first become
exercisable by a holder in any one calendar year under the Plan and any
other plan of his employer corporation and its parent and subsidiary
corporations, as defined respectively in section 425(e) and (f) of the
Code, shall not exceed $100,000. The foregoing limitation shall apply only
to incentive stock options granted under the Plan, and not to nonqualified
options granted under the Plan.
8. Adjustments Upon Changes in Capitalization. Except as may be
determined in the sole discretion of the Committee and provided in the
option agreement with respect to any option, in the event of changes in the
outstanding common stock of the Company by reason of stock dividends, stock
splits, recapitalizations, combinations or exchanges of shares, split-ups,
split-offs, spin-offs, or other similar changes in capitalization, or any
distribution to common stockholders other than cash dividends, the number
and class of shares subject to each outstanding option, the option prices,
the number and class of shares subject to stock appreciation rights or
restricted stock awards, and the aggregate number and class of shares
available under the Plan shall be appropriately adjusted by the Committee;
provided that, in the event the outstanding shares of common stock shall be
changed into or exchanged for any other class or series of capital stock or
cash, securities or other property pursuant to a recapitalization,
reclassification, merger, consolidation, combination or similar
transaction, then each option shall thereafter become exercisable for the
number and/or kind of capital stock, and/or the amount of cash, securities
or other property so distributed, into which the shares of common stock
subject to the option would have been changed or exchanged had the option
been exercised in full prior to such transaction, provided further that, if
the kind or amount of capital stock or cash, securities or other property
received in such transaction is not the same for each outstanding share of
common stock, then the kind or amount of capital stock or cash, securities
or other property for which the option shall thereafter become exercisable
shall be the kind and amount so receivable per share by a plurality of the
shares, and provided further that if necessary, the provisions of the
option shall be appropriately adjusted so as to be applicable, as nearly as
may reasonably be, to any shares of capital stock, cash, securities or
other property thereafter issuable or deliverable upon exercise of the
option.
9. Option Agreements. Each option and agreement (and amendments
thereof) shall contain such terms and provisions, consistent with the
requirements of this Plan, as the Committee in its discretion shall
determine, including without limitation such terms and provisions as shall
be requisite to cause certain stock options to qualify as incentive stock
options under Section 422A of the Code. Option agreements need not be
identical.
10. Restricted Stock Awards. The Committee, in its sole discretion,
may award to eligible participants shares of common stock of the Company
(such shares, while subject to such restrictions to be hereinafter referred
to as "Restricted Stock"). All shares of Restricted Stock awarded to
participants under the Plan shall be subject to the following terms and
conditions and to such other terms, restrictions and conditions (including,
but not limited to, conditions and restrictions relating to the attainment
of performance goals), not inconsistent with the Plan, as shall be
prescribed by the Committee in its sole discretion and as shall be
contained in the Agreement referred to in Section 10(d) hereof.
(a) Restrictions. At the time of an award of Restricted Stock,
the Committee shall establish for each participant a Restricted Period.
Shares of Restricted Stock may not be sold, assigned, transferred, pledged
or otherwise encumbered by the participant, except as hereinafter provided,
during the Restricted Period. Except for such restrictions, and subject to
Sections 10(c) , 10(d), 10(e) and 10(f) hereof, the participant as owner of
such shares shall have all the rights of a stockholder including but not
limited to the right to receive all dividends paid on such shares and the
right to vote such shares. The Committee shall have the authority, in its
discretion, to accelerate the time at which any or all of the restrictions
shall lapse with respect to any shares of Restricted Stock prior to the
expiration of the Restricted Period with respect thereto, or to remove any
or all of such restrictions, whenever it may determine that such action is
appropriate.
(b) Termination of Employment. If a participant ceases to be an
employee of the Company for any reason (including death, disability or
retirement), all shares of Restricted Stock theretofore awarded to him
shall upon such termination of employment be forfeited and returned to the
Company, unless otherwise provided in the restricted stock agreement,
provided, however, that the Committee may, but need not, within 120 days of
such termination of employment, determine that some or all of such shares
shall be free of restrictions and shall not be forfeited.
(c) Legended Certificates. Each certificate issued in respect of
shares of Restricted Stock awarded under the Plan shall be registered in
the name of the participant and deposited by the participant, together with
a stock power endorsed in blank, with the Company and shall bear the
following (or similar) legend:
"The transferability of this certificate and the shares of stock
represented hereby are subject to the terms and conditions (including
forfeiture) contained in the 1989 Stock Option and Stock Award Plan of
American Stores Company and an Agreement entered into between the
registered owner and American Stores Company. Copies of such Plan and
Agreement are on file in the offices of the Secretary of American Stores
Company."
(d) Agreements. At the time of an award of shares of Restricted
Stock, the participant shall enter into an Agreement with the Company, in a
form specified by the Committee, agreeing to the terms and conditions of
the award and such other matters as the Committee shall in its sole
discretion determine.
(e) Withholding. At the time of vesting of any shares of
Restricted Stock, and as a further condition to such vesting, the
participant shall remit to his employer an amount, determined by such
employer, necessary to satisfy applicable federal, state or local tax
withholding requirements, or shall make other arrangements with his or her
employer for the satisfaction of such tax withholding requirements.
(f) Delivery of Certificates. At the expiration of the
restrictions imposed by Section 10(a) hereof, the Company shall redeliver
to the participant (or where the relevant provision of Section 10(b) hereof
applies, in the case of a deceased participant, his or her legal
representative, beneficiary or heir) the certificate(s) and stock power
deposited with it pursuant to Section 10(c) hereof and the shares of Common
Stock represented by such certificate(s) shall be free of the restrictions
referred to in Section 10(a) hereof and the legend referred to in Section
10(c) hereof.
11. Securities Laws. The Committee may make each grant of an
option or a stock appreciation right or award of Restricted Stock under the
Plan subject to such conditions as shall cause the award of Restricted
Stock and the grant and exercise of any option or stock appreciation right
to comply with the then-existing requirements of Rule 16b-3 (or any similar
rule) of the Securities and Exchange Commission ("Rule 16b-3").
12. Government and Other Regulations. The obligation of the Company
to issue shares under the Plan shall be subject to (i) all applicable laws,
rules and regulations, and such approvals by any governmental agencies as
may be required, including, but not by way of limitation, the effectiveness
of a Registration Statement under the Securities Act of 1933 as deemed
necessary or appropriate by counsel for the Company and (ii) the condition
that the shares of common stock reserved for issuance upon the exercise of
options granted under the Plan shall have been duly listed upon the New
York Stock Exchange or any other stock exchange on which the Company's
common stock is actively traded.
13. Non-Exclusivity of the Plan. Neither the adoption of the Plan by
the Board of Directors nor the submission of the Plan to the stockholders
of the Company for approval shall be construed as creating any limitations
on the power of the Board of Directors to adopt such other incentive
arrangements as it may deem desirable, including, without limitation, the
granting of stock options otherwise than under the Plan, and such
arrangement may be either generally applicable or applicable only in
specific cases.
14. Rights As Shareholder. Neither an optionee nor a holder of a
stock appreciation right shall have any right as a shareholder with respect
to any shares subject to his or her options or stock appreciation rights
until the date of the issuance of a stock certificate to him or her for
such shares.
15. Plan Not To Affect Employment. Neither the Plan nor any option or
stock appreciation right shall confer upon any employee of the Company any
right to continue in the employment of the Company.
16. Transfer of Employment. For purposes of the Plan, a transfer of a
participant between the Company, a Subsidiary (or, in the case of a holder
of a nonqualified option, an Affiliate) shall not be deemed a termination
of employment.
17. Termination and Amendment. Unless the Plan shall theretofore have
been terminated as hereinafter provided, it shall terminate on, and no
option shall be granted thereunder after, December 6, 1998. The Board of
Directors may also terminate the Plan or make such modifications or
amendments thereof as it shall deem advisable; provided, however, that the
Board of Directors may not, without further approval by the holders of a
majority of the outstanding stock of the Company having general voting
power, (a) increase the maximum number of shares for which options may be
granted under the Plan in the aggregate, (b) change the requirements as to
the class of employees eligible to receive options, or (c) make any other
change that requires the approval of shareholders in order to maintain the
exemption under Rule 16b-3. The Committee may, however, authorize
amendments of outstanding options including without limitation the
reduction of the option prices specified therein (or the granting of new
options at lower prices upon cancellation of outstanding options), so long
as all options granted hereunder outstanding at any one time shall not call
for issuance of more shares of common stock than those provided for in
Section 3 hereof and so long as the provisions of any amended option would
have been permissible under the Plan if such option had been originally
granted as of the date of such amendment with such amended terms. No
termination, modification, or amendment of the Plan or any option may,
without the consent of the employee to whom any option shall theretofore
have been granted, adversely affect the rights of such employee under such
option.
18. Effectiveness of the Plan. The Plan shall become effective as of
December 6, 1988; provided, however, that no option granted thereunder may
be exercised until the stockholders of the Company approve the Plan at
their 1989 Annual Meeting. If the stockholders fail to give such approval,
the Plan and any and all options granted thereunder shall be null and void.
Approval of stockholders shall require the affirmative votes of the holders
of a majority of the outstanding common stock of the Company voting at a
meeting where a quorum is present, in person or by proxy.
19. Change in Control. The Board of Directors of the Company may, at
its discretion, accelerate the right to exercise all or any part of any
unexercisable option granted under the Plan or accelerate the time at which
any or all of the restrictions shall lapse with respect to any shares of
Restricted Stock awarded under the Plan; provided, however, that
notwithstanding the foregoing, unless otherwise provided at the time of
grant, from and after a Change of Control (as hereinafter defined) each
unexercisable option shall vest and each option shall become immediately
exercisable to the full extent of the original grant and all of the
restrictions (including the Restricted Period) with respect to any shares
of Restricted Stock (including any provision providing for the forfeiture
of any Restricted Stock under any circumstances) shall terminate
immediately and share certificates relating to the Restricted Stock shall
be delivered to participants pursuant to the terms of Section 10(f) hereof.
Notwithstanding anything contained in Section 7 hereof to the
contrary, if an optionee's employment is terminated (i) by action of his
employer, other than discharge for Cause (as hereinafter defined), or (ii)
by voluntary resignation of the optionee, in either case within 18 months
following a Change of Control, any options that are then exercisable held
by the optionee may be exercised by him until the earlier of six months and
one day after such termination or the expiration of such options in
accordance with their terms. "Cause" for the purposes of this paragraph
shall mean an act or acts of dishonesty on employee's part which are
intended or result in his substantial personal enrichment at the expense of
the Company or his conviction for commission of a felony.
Notwithstanding anything contained in the Plan to the contrary,
unless otherwise provided at the time of grant, during the 60-day period
from and after a Change of Control an optionee (other than an optionee who
initiated a Change of Control in a capacity other than as an officer or
director of the Company) with respect to an option that is unaccompanied by
a stock appreciation right shall, unless the Committee shall determine
otherwise at the time of grant, have the right, in lieu of the payment of
the full purchase price of the shares of common stock being purchased under
the option and by giving written notice to the Company, to elect (within
such 60-day period) to surrender all or part of the option to the Company
and to receive in cash an amount equal to the amount by which the fair
market value per share of the common stock on the date of exercise shall
exceed the purchase price per share under the option multiplied by the
number of shares of common stock granted under the option as to which the
right granted by this paragraph shall have been exercised; provided, that
if any right granted pursuant to this sentence would make a Change in
Control transaction ineligible for pooling of interests accounting under
APB No. 16 that is intended to be eligible for such accounting treatment,
(i) the Committee shall have the ability to substitute the cash payable
pursuant to this paragraph with common stock with a fair market value equal
to the cash that would otherwise be payable hereunder, (ii) the period for
the holder to elect such right shall terminate as of the close of business
on the date of consummation of such Change of Control transaction and (iii)
the Change of Control Fair Market Value shall be adjusted to provide the
holders of such rights with fair value in exchange for any reduction in the
period for such election as determined by the Committee in its sole
judgment. The fair market value of the common stock on the date of exercise
shall mean: (a) with respect to an election by an optionee to receive cash
in respect of an option which is not an incentive stock option, the "Change
of Control Fair Market Value," as defined below; and (b) with respect to an
election by an optionee to receive cash in respect of an option which is an
incentive stock option, the mean of the high and low prices of the common
stock on the New York Stock Exchange on such date.
Notwithstanding anything contained in the Plan to the contrary, the
payment in settlement of a stock appreciation right during the 60-day
period (or such shorter period as the rights granted pursuant to the
previous paragraph are exercisable) from and after a Change of Control
shall be entirely in cash and during the 60-day period (or such shorter
period as the rights granted pursuant to the previous paragraph are
exercisable) from and after a Change of Control the value of a share of
common stock on the date of exercise shall mean (i) with respect to the
exercise of a stock appreciation right accompanying an option which is not
an incentive stock option, the "Change of Control Fair Market Value" and
(ii) with respect to the exercise of a stock appreciation right
accompanying an incentive stock option, the mean of the high and low prices
of the common stock on the New York Stock Exchange on such date; provided,
that if any right granted pursuant to this sentence would make a Change in
Control transaction ineligible for pooling of interests accounting under
APB No. 16 that is intended to be eligible for such accounting treatment,
the Committee shall have the ability to substitute the cash payable
pursuant to this paragraph with common stock with a fair market value equal
to the cash that would otherwise be payable hereunder.
For the purpose of the Plan, a "Change of Control" shall mean any of
the following events:
(i) The acquisition, other than from the Company, by any
individual, entity or group (within the meaning of Section 13(d)(3) or
14(d)(2) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act")) other than L.S. Skaggs, his affiliates and associates, his heirs and
any trust or foundation to which he has transferred or may transfer shares
of common stock, of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of 20% or more of either the then
outstanding shares of common stock of the Company (the "Outstanding Company
Common Stock") or the combined voting power of the then outstanding voting
securities of the Company entitled to vote generally in the election of
directors (the "Company Voting Securities"), provided, however, that any
acquisition by the Company or its subsidiaries, or any employee benefit
plan (or related trust) of the Company or its subsidiaries, or any
corporation with respect to which, following such acquisition, more than
80% of, respectively, the then outstanding shares of common stock of such
corporation and the combined voting power of the then outstanding voting
securities of such corporation entitled to vote generally in the election
of directors is then beneficially owned, directly or indirectly, by the
individuals and entities who were the beneficial owners, respectively, of
the Outstanding Company Common Stock and Company Voting Securities
immediately prior to such acquisition in substantially the same proportion
as their ownership, immediately prior to such acquisition, of the
Outstanding Company Common Stock and Company Voting Securities, as the case
may be, shall not constitute a Change of Control; or
(ii) Individuals who, as of February 1, 1989, constitute the
Board of Directors of the Company (as of February 1, 1989, as adjusted
below, the "Incumbent Board") cease for any reason to constitute at least a
majority of the Board, provided that any individual becoming a director
subsequent to February 1, 1989 whose election, or nomination for election
by the Company's stockholders, was approved by a vote of at least a
majority of the directors then comprising the Incumbent Board shall be
considered a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office is in
connection with an actual or threatened election contest relating to the
election of the Directors of the Company (as such terms are used in Rule
14a-11 of Regulation 14A promulgated under the Exchange Act); or
(iii) Approval by the stockholders of the Company of a
reorganization, merger or consolidation, in each case, with respect to
which the individuals and entities who were the respective beneficial
owners of the common stock and voting securities of the Company immediately
prior to such reorganization, merger or consolidation do not, following
such reorganization, merger or consolidation, beneficially own, directly or
indirectly, more than 80% of, respectively, the then outstanding shares of
common stock and the combined voting power of the then outstanding voting
securities entitled to vote generally in the election of directors, as the
case may be, of the corporation resulting from such reorganization, merger
or consolidation, or a complete liquidation or dissolution of the Company
or of the sale or other disposition of all or substantially all of the
assets of the Company.
For purposes of the Plan, the "Change of Control Fair Market Value"
shall mean, subject to adjustment by the Committee pursuant to the third
paragraph of Section 19, the higher of (x) the highest reported sales
price, regular way, of a share of common stock on the Composite Tape for
New York Stock Exchange Listed Stocks during the 60-day period prior to the
date of the Change of Control and (y) if the Change of Control is the
result of a transaction or series of transactions described in paragraphs
(i) or (iii) of the definition of Change of Control set forth in this
Section, the highest price per share of common stock paid in such
transaction or series of transactions (in the case of a Change of Control
described in such paragraph (i) of such definition), as reflected in a
Schedule 13D filed by the person having made the acquisition.
Exhibit 4.15
American Stores Company
Amended and Restated
1985 Stock Option and Stock Award Plan
1. Adoption and Purpose of Plan. American Stores Company, a Delaware
corporation (hereinafter called the Company), hereby adopts a stock option,
stock appreciation rights and stock award plan providing for the granting
of stock options, stock appreciation rights and stock awards to key
management employees (hereinafter called the Plan). The general purpose of
the Plan is to promote the interests of the Company and its stockholders in
attracting, maintaining and developing a management capable of assuring the
future success of the Company and by providing to key employees of the
Company and its subsidiaries and affiliates additional incentives to
continue and increase their efforts with respect to, and to remain in the
employ of, the Company or its subsidiaries or affiliates. So that maximum
incentive can be provided each particular employee participating in the
Plan by granting him an option or options best suited to his circumstances,
the Plan provides for granting both "incentive" (as defined in Section 422A
of the Internal Revenue Code of 1954) and "non-qualified" stock options.
The Plan also provides for the grant of stock appreciation rights, and for
the grant of shares to eligible participants, subject to forfeiture
restrictions which will lapse upon the passage of time, the participant's
continued employment with the Company, and certain other events.
2. Administration. The Plan shall be administered by a committee
(hereinafter called the Committee) of not less than three Directors of the
Company who shall be appointed by the Board of Directors of the Company,
none of whom shall be eligible (or shall have been eligible within one year
prior to the date of their appointments) to participate in the Plan or to
be selected as a participant under any other discretionary plan of the
Company or any of its affiliates entitling them to acquire stock, stock
option or stock appreciation rights of the Company or any of its
affiliates. The Committee shall prescribe the form and content of options
to be granted under the Plan; shall receive elections for the exercise of
stock appreciation rights and have full discretion regarding the approval
or disapproval of such elections, and whether, and to what extent, such
stock appreciation rights shall be paid in cash, in common stocks, or a
combination of both; and shall determine the terms and restrictions on all
restricted stock awards granted under the Plan. The Committee shall be
authorized to interpret the Plan, to prescribe, amend and rescind rules and
regulations relating to it and to make all other determinations necessary
or advisable for its administration.
3. Shares Subject to Plan. The Committee, from time to time, may,
pursuant to the Plan, provide for the grant of options for the purchase of
common stock of the Company upon the exercise thereof, and may grant stock
appreciation rights and make restricted stock awards, for an aggregate of
up to 1,000,000 shares, subject to adjustment as provided in Section 8
hereof. If an option ceases to be exercisable in whole or in part by reason
of the expiration of the term of the option, cancellation of the option
with the consent of the optionee, or upon or following termination of
employment of the optionee, the shares which were subject to such option,
but as to which the option had not been exercised or exercisable at the
time of the termination of the option or employment, as the case may be,
shall continue to be available under the Plan to be granted to other
participants. Shares subject to restricted stock awards which are forfeited
to the Company shall also be available under the Plan to be granted to
other participants. Shares shall be made available under the Plan from
authorized and unissued stock or from treasury stock.
4. Time of Granting of Options. The effective date of the granting of
an option (hereinafter called the Granting Date) shall be the date
specified by the Committee in its determination or designation relating to
the award of such option. The Committee shall promptly notify a grantee of
the grant of an option and a written option agreement shall promptly be
executed and delivered by or on behalf of the Company and the grantee,
provided that such grant of an option shall expire (to the extent not
theretofore exercised) if a written option agreement is not signed by such
grantee (or his agent or attorney) and returned to the Company within 60
days from the Granting Date.
5. Eligibility. Options, stock appreciation rights and restricted
stock awards may be granted only to key employees (which term shall be
deemed to include officers) who on the Granting Date are in the employ of
the Company or any of its present and future subsidiary corporations, as
defined in Section 425(f) of the Internal Revenue Code of 1954 as the same
shall be amended from time to time (hereinafter called Subsidiaries),
provided that "non-qualified" options may also be granted to key employees
of any business entity in which the Company shall have a substantial
interest (hereinafter called an Affiliate). A director of the Company or of
a Subsidiary or Affiliate who is not also such an employee shall not be
eligible to receive an option or restricted stock award. Options, stock
appreciation rights and restricted stock awards may be granted to eligible
employees whether or not they hold or have held options, stock appreciation
rights or grants of restricted stock under the Plan or under previously
adopted plans.
6. Option Prices. The option price per share to be specified in each
option agreement shall be (i) with respect to "incentive" stock options,
the mean between the high and low prices of the common stock on the New
York Stock Exchange on the Granting Date, or such other price as the
Committee shall determine to be not less than 100% of the fair market value
of the common stock on the Granting Date, provided, however, that with
respect to any "incentive" stock option granted to a person who on the
Granting Date owns, either directly or within the meaning of the
attribution rules contained in Section 425(d) of the Internal Revenue Code,
stock possessing more than 10 percent of the total combined voting power of
all classes of stock of his or her employee corporation or of its parent or
subsidiary corporations, as defined respectively in Sections 425(e) and (f)
of the Internal Revenue Code (hereinafter called a Ten Percent
Shareholder), the option price per share not be less than 110% of the fair
market value of the common stock on the Granting Date; and (ii) with
respect to non-qualified stock options, such price as the Committee shall
in its sole discretion determine.
7. Certain Terms of Options. Each option (and related stock
appreciation rights, if any) granted under the Plan shall be
nontransferable otherwise than by will or under the laws or descent and
distribution and may be exercised during the lifetime of the holder thereof
only by him or her. An option may be exercised in whole at any time or in
part from time to time during the option period, subject to such
limitations and restrictions as may be included in the option, provided,
however, that no option may be exercised within a period of one year from
the Granting Date thereof. In the case of termination of employment by
reason of retirement at or after age 57, the employee may, (i) within three
months of said retirement date in the case of "incentive" stock options, or
(ii) within twelve months of said retirement date in the case of
non-qualified stock options, exercise all of the option rights which were
exercisable on the day before said retirement date and any such options not
so exercised shall thereupon terminate. In the case of termination of
employment by reason of death, the employee's legal representative may,
within one year of the date of death (subject to the limitation on the
exercise of incentive stock options contained in Section 7(d)), exercise
all of the option rights of the employee (whether or not such options were
exercisable on the day before the employee's death), and any such options
not so exercised shall thereupon terminate. In the case of termination of
employment by reason of disability (within the meaning of Section 22(e)(3)
of the Code), the employee or his legal representative, as the case may be,
may (i) with regard to stock options granted with an exercise price equal
to or greater than the fair market value of the applicable shares on the
date such options are granted, within one year of the date of disability
(subject to the limitation on the exercise of incentive stock options
contained in Section 7(d)), exercise all of such option rights of the
employee (whether or not such options were exercisable on the day before
such termination), and any such options not so exercised shall thereupon
terminate; and (ii) with regard to stock options granted with an exercise
price less than the fair market value of the applicable shares on the date
such options are granted, the employee shall be deemed not to have
terminated his employment by reason of his disability for the purpose of
determining when such options become exercisable and whether the employee
may exercise such options, whether or not such options were exercisable on
the day before such disability, and the options shall terminate one year
from the date which all of the options become exercisable, unless the
employee's disability terminates and he accepts employment with an employer
other than the Company, in which case the employee's right to exercise
options pursuant to this alternative shall cease immediately, and any of
such option rights not so exercised shall terminate. In all other cases all
rights to exercise options shall terminate once the employee ceases to be
an employee of the Company or any of its Subsidiaries (or, in the case of a
non-qualified option, an Affiliate). Each incentive stock option shall
expire not more than ten years (or, if granted to a Ten Percent
Shareholder, five years) after the Granting Date (or, if earlier, within
the above-stated period after death, disability or retirement). Each
non-qualified option shall expire not more than ten years after the
Granting Date (or if earlier, within the above-stated period after death,
disability or retirement). Notwithstanding the foregoing exercise rules
relating to death, disability or retirement, all options shall expire not
more than 10 years (or, in the case of an incentive stock option granted to
a Ten Percent Shareholder, five years) after the Granting Date.
Full payment for shares purchased upon the exercise of an option shall
be made in cash or, at the election of the optionee and as the Committee
may, in its sole discretion, approve, by surrendering shares of common
stock of the Company with an aggregate fair market value (determined in
accordance with Section 6, above) equal to the aggregate option price, or
by delivering such combination of shares of common stock and cash as the
Committee shall, in its sole discretion, approve. As an alternative to the
payment by the holder for the number of shares in respect of which an
option is exercised, the Committee may provide alternative settlement
methods (hereinafter referred to as stock appreciation rights) as follows:
(a) The Committee, in its discretion, may provide that any option by
its terms may permit the holder to elect any of the stock
appreciation rights set forth in subsection (c) below.
(b) The Committee, in its discretion, may at the request of an
employee holding a non-qualified option under the Plan which does
not by its terms include stock appreciation rights, amend the
option to permit the election of such rights by the holder,
provided that the election of any such rights shall not be
exercisable until six months after the date of such amendment
except in the event of the death or disability of the holder
prior thereto.
(c) The stock appreciation rights are for the holder to receive from
the Company: (i) cash in an amount equal to the excess of the
value of one share over the option price times the number of
shares as to which the option is exercised; (ii) the number of
whole shares having an aggregate value not greater than the cash
amount calculated under alternative (i); or (iii) any combination
of cash and stock having an aggregate value not greater than the
cash amount calculated under alternative (i). For purposes of
determining the value of a stock appreciation right, the value
per share shall be the mean between the high and low prices of
the common stock of the Company on the New York Stock Exchange on
the date of the exercise of the stock appreciation right, or such
other price as the Committee shall determine to be the fair
market value of the common stock on the date of exercise.
The exercise of an alternative stock appreciation right with respect
to an option shall result in the expiration of such related option to the
extent of the number of stock appreciation rights exercised. In addition,
all stock appreciation rights related to incentive stock options shall be
subject to the following terms: (i) such stock appreciation rights shall be
exercisable only when the fair market value of the stock subject to the
related option exceeds the option price of the related option, and such
option is otherwise exercisable; (ii) such stock appreciation rights are
transferable only when the related option is otherwise transferable, and
(iii) such other terms as the Committee shall in its discretion determine
to be necessary to enable the related option to qualify as an incentive
stock option within the meaning of Section 422A of the Internal Revenue
Code.
Any election of any of the stock appreciation rights provided for
under this Section 7 shall be subject to the consent or disapproval of the
Committee at any time after the election is made and the Committee shall
have sole discretion to determine whether, and to what extent, the stock
appreciation right elected shall be paid in cash, in common stock, or
partially in cash and partially in common stock, provided that the
aggregate value of the payments shall not be greater than the cash amount
calculated under alternative (i). No fractional shares of common stock
shall be issued and the Committee shall determine whether cash shall be
paid in lieu of such fractional share interest or whether such fractional
share interest shall be eliminated.
Any shares of common stock due upon exercise of a stock appreciation
right shall be delivered to the participant by the Company and any payment
of cash shall be made by the employer of the participant. The employer of
the participant shall deduct from the amount of any cash so payable an
amount necessary to satisfy applicable federal, state, or local tax
withholding requirements. If no cash is payable (or if the amount of cash
payable is insufficient to satisfy applicable tax withholding
requirements), no shares shall be delivered by the Company to the
participant until the participant remits to his or her employer an amount,
determined by such employer, necessary to satisfy applicable federal,
state, or local tax withholding requirements or makes other arrangements
for the satisfaction of such tax withholding requirements.
Only whole shares shall be issuable upon exercise of Options. Any
right to a fractional share shall be satisfied in cash, or shall be
eliminated, in the sole discretion of the Committee. Upon payment of the
option price, a certificate for the number of whole shares to which the
participant is entitled shall be delivered to such participant by the
Company, provided, however, that in the case of the exercise of a
non-qualified option, the participant has remitted to his employer an
amount, determined by such employer, necessary to satisfy applicable
federal, state, or local tax withholding requirements, or made other
arrangements with his or her employer for the satisfaction of such tax
withholding requirements.
Exercise of an option in any manner, including an exercise involving
an election of a stock appreciation right with respect to an option, shall
result in a decrease in the number of shares which thereafter may be
available under the Plan by the number of shares as to which the option is
exercised.
(d) Limitation on Exercise of Incentive Stock Options
The aggregate fair market value (determined as of the time
options are granted) of the shares with respect to which
incentive stock options may first become exercisable by a holder
in any one calendar year under the Plan and any other plan of his
employer corporation and its parent and subsidiary corporations,
as defined respectively in Section 425(e) and (f) of the Internal
Revenue Code, shall not exceed $100,000. The foregoing limitation
shall apply only to incentive stock options granted under the
Plan, and not to non-qualified options granted under the Plan.
8. Adjustments Upon Changes in Capitalization. In the event of changes
in the outstanding common stock of the Company by reason of stock
dividends, stock splits, recapitalizations, combinations or exchanges of
shares, split-ups, split-offs, spin-offs, or other similar changes in
capitalization, or any distribution to common stockholders other than cash
dividends, the number and class of shares subject to each outstanding
option, the option prices, the number and class of shares subject to stock
appreciation rights or restricted stock awards, and the aggregate number
and class of shares available under the Plan shall be appropriately
adjusted by the Committee; provided that in the event the outstanding
shares of common stock shall be changed into or exchanged for any other
class or series of capital stock or cash, securities or other property
pursuant to a recapitalization, reclassification, merger, consolidation,
combination or similar transaction, then each option shall thereafter
become exercisable for the number and/or kind of capital stock, and/or the
amount of cash, securities or other property so distributed, into which the
shares of common stock subject to the option would have been changed or
exchanged had the option been exercised in full prior to such transaction,
provided further that, if the kind or amount of capital stock or cash,
securities or other property received in such transaction is not the same
for each outstanding share of common stock, then the kind or amount of
capital stock or cash, securities or other property for which the option
shall thereafter become exercisable shall be the kind and amount so
receivable per share by a plurality of the shares, and provided further
that if necessary, the provisions of the option shall be appropriately
adjusted so as to be applicable, as nearly as may reasonably be, to any
shares of capital stock, cash, securities or other property thereafter
issuable or deliverable upon exercise of the option.
9. Option Agreements. Each option and agreement (and amendments
thereof) shall contain such terms and provisions, consistent with the
requirements of this Plan, as the Committee in its discretion shall
determine, including without limitation such terms and provisions as shall
be requisite to cause certain stock options to qualify as "incentive" stock
options under Section 422A of the Internal Revenue Code of 1954, as
amended. Option agreements need not be identical.
10. Restricted Stock Awards. The Committee, in its sole discretion,
may award to eligible participant's shares of common stock of the Company
(such shares, while subject to such restrictions to be hereinafter referred
to as Restricted Stock). All shares of Restricted Stock awarded to
participants under the Plan shall be subject to the following terms and
conditions and to such other terms and conditions, not inconsistent with
the Plan, as shall be prescribed by the Committee in its sole discretion
and as shall be contained in the Agreement referred to in Section 10(d)
hereof.
(a) At the time of an award of Restricted Stock, the Committee shall
establish for each participant a Restricted Period. Shares of
Restricted Stock may not be sold, assigned, transferred, pledged
or otherwise encumbered by the participant, except as hereinafter
provided, during the Restricted Period. Except for such
restrictions, and subject to Sections 10(c), 10(d), 10(e), and
10(f) hereof, the participant as owner of such shares shall have
all the rights of a stockholder including but not limited to the
right to receive all dividends paid on such shares and the right
to vote such shares. The Committee shall have the authority, in
its discretion, to accelerate the time at which any or all of the
restrictions shall lapse with respect to any shares of Restricted
Stock prior to the expiration of the Restricted Period with
respect thereto, or to remove any or all of such restrictions,
whenever it may determine that such action is appropriate by
reason of changes in applicable tax or other laws or other
changes in circumstances occurring after the commencement of such
Restricted Period.
(b) If a participant ceases to be an employee of the Company for any
reason (including death, disability or retirement), all shares of
Restricted Stock theretofore awarded to him shall, upon such
termination of employment, be forfeited and returned to the
Company, provided, however, that the Committee may, but need not,
within 120 days of such termination of employment, determine that
some or all of such shares shall be free of restrictions and
shall not be forfeited. Unless the Committee in its sole
discretion determines (and so provides in the Restricted Stock
agreement with respect to any grant, or in any amendment thereof)
that upon the death or disability of a participant, shares of
Restricted Stock theretofore granted to such participant shall be
free of all restrictions.
(c) Each certificate issued in respect of shares of Restricted Stock
awarded under the Plan shall be registered in the name of the
participant and deposited by the participant, together with a
stock power endorsed in blank, with the Company and shall bear
the following (or similar) legend:
"The transferability of this certificate and the shares of
stock represented hereby are subject to the terms and
conditions (including forfeiture) contained in the 1985 Stock
Option and Stock Award Plan of American Stores Company and an
Agreement entered into between the registered owner and
American Stores Company. Copies of such Plan and Agreement
are on file in the offices of the Secretary of American
Stores Company."
(d) At the time of an award of shares of Restricted Stock, the
participant shall enter into an Agreement with the Company, in a
form specified by the Committee, agreeing to the terms and
conditions of the award and such other matters as the Committee
shall in its sole discretion determine.
(e) At the time of vesting of any shares of Restricted Stock, and as
a further condition to such vesting, the participant shall remit
to his employer an amount, determined by such employer, necessary
to satisfy applicable federal, state, or local tax withholding
requirements, or shall make other arrangements with his or her
employer for the satisfaction of such tax withholding
requirements.
(f) At the expiration of the restrictions imposed by Section 10(a)
hereof, the Company shall redeliver to the participant (or where
the relevant provision of Section 10(b) hereof applies, in the
case of a deceased participant, his or her legal representative,
beneficiary or heir) the certificate(s) and stock power deposited
with it pursuant to Section 10(c) hereof and the shares of Common
Stock represented by such certificate(s) shall be free of the
restrictions referred to in Section 10(a) hereof.
11. Securities Laws. The Committee may make each grant of an option or
a stock appreciation right or award of Restricted Stock under the Plan
subject to such conditions as shall cause the award of Restricted Stock and
the grant and exercise of any option or stock appreciation right to comply
with the then-existing requirements of Rule 16b-3 (or any similar rule) of
the Securities and Exchange Commission.
12. Termination and Agreement. Unless the Plan shall theretofore have
been terminated as hereinafter provided, it shall terminate on, and no
option shall be granted thereunder after, September 10, 1995. The Board of
Directors may also terminate the Plan or make such modifications or
amendments thereof as it shall deem advisable, including such modifications
or amendments as it shall deem advisable in order to cause certain stock
options to quality as "incentive" stock options under Section 422A of the
Internal Revenue Code or to conform to any law or regulation applicable
thereto; provided, however, that the Board of Directors may not, without
further approval by the holders of a majority of the outstanding stock of
the Company having general voting power, (a) increase the maximum number of
shares for which options may be granted under the Plan in the aggregate,
(b) change the requirements as to the class of employees eligible to
receive options, or (c) make any other change that requires the approval of
shareholders in order to maintain the exemption under Rule 16b-3 (or any
similar rule) of the Securities and Exchange Commission. The Committee may,
however, authorize amendments of outstanding options including without
limitation the reduction of the option prices specified therein (or the
granting of new options at lower prices upon cancellation of outstanding
options), so long as all options granted hereunder outstanding at any one
time shall not call for issuance of more shares of common stock than those
provided for in Section 3 hereof and so long as the provisions of any
amended option would have been permissible under the Plan if such option
had been originally granted as of the date of such amendment with such
amended terms. No termination, modification, or amendment of the Plan may,
without the consent of the employee to whom any option shall theretofore
have been granted, adversely affect the rights of such employee under such
option.
13. Effectiveness of the Plan. The Plan shall become effective as of
September 10, 1985; provided, however, that it and any and all options
granted thereunder shall be and become null and void if the stockholders of
the Company shall fail to approve the Plan at their 1986 Annual Meeting.
Such approval of stockholders shall require the affirmative votes of the
holders of a majority of the outstanding common stock of the Company.
14. Government and Other Regulations. The obligation of the Company to
issue shares under the Plan shall be subject to (i) all applicable laws,
rules and regulations, and such approvals by any governmental agencies as
may be required, including, but not by way of limitation, the effectiveness
of a Registration Statement under the Securities Act of 1933 as deemed
necessary or appropriate by counsel for the Company and (ii) the condition
that the shares of common stock reserved for issuance upon the exercise of
options granted under the Plan shall have been duly listed upon the New
York Stock Exchange.
15. Non-Exclusivity of the Plan. Neither the adoption of the Plan by
the Board of Directors nor the submission of the Plan to the stockholders
of the Company for approval shall be construed as creating any limitations
on the power of the Board of Directors to adopt such other incentive
arrangements as it may deem desirable, including, without limitation, the
granting of stock options otherwise than under the Plan, and such
arrangement may be either generally applicable or applicable only in
specific cases.
16. Rights As Shareholders. Neither an optionee nor a holder of a
stock appreciation right shall have any right as a shareholder with respect
to any shares subject to his or her options or stock appreciation rights
until the date of the issuance of a stock certificate to him or her for
such shares.
17. Plan Not To Affect Employment. Neither the Plan nor any option or
stock appreciation right shall confer upon any employee of the Company any
right to continue in the employment of the Company.
18. Change in Control.
(a) Notwithstanding any provision in this plan to the contrary, the
Committee may, at its discretion, accelerate the right to exercise
all or any part of any unexercisable option granted under the Plan
or accelerate the time at which any or all of the restrictions
shall lapse with respect to any shares of Restricted Stock awarded
under the Plan; provided, however, that notwithstanding the
foregoing, from and after a Change of Control (as hereinafter
defined) each unexercisable option shall vest and each option
shall become immediately exercisable to the full extent of the
original grant and all of the restrictions (including the
Restricted Period) with respect to any shares of Restricted Stock
shall expire immediately (including any provision providing for
the forfeiture of any Restricted Stock under any circumstances)
and share certificates relating to the Restricted Stock shall be
delivered to participants pursuant to the terms of Section 10(f)
hereof. Notwithstanding anything contained in this Section 18 to
the contrary, the provisions of this Section 18 shall not apply
with respect to awards of Restricted Stock to former employees of
Lucky Stores, Inc. who are parties to employment agreements
referred to on Annex A hereto, unless and until such employees
enter into an amendment to such agreement approved by the Board of
Directors of the Company on February 1, 1989.
Notwithstanding anything contained in Section 7 hereof to the
contrary, in the case of a non-qualified option or an "incentive"
stock option granted after February 1, 1989, if an optionee's
employment is terminated (i) by action of his employer, other
than discharge for Cause (as hereinafter defined), or (ii) by
voluntary resignation of the optionee, in either case within 18
months following a Change of Control, any options held by the
optionee may be exercised by him until the earlier of six months
and one day after such termination or the expiration of such
options in accordance with their terms. "Cause" for the purposes
of this paragraph shall mean an act or acts of dishonesty on
employee's part which are intended or result in his substantial
personal enrichment at the expense of the Company or his
conviction for commission of a felony.
Notwithstanding anything contained in the Plan to the contrary,
during the 60-day period from and after a Change of Control an
optionee (other than an optionee who initiated a Change of
Control in a capacity other than as an officer or director of the
Company) with respect to an option that is unaccompanied by a
stock appreciation right shall, unless the Committee shall
determine otherwise at the time of grant, have the right, in lieu
of the payment of the full purchase price of the shares of common
stock being purchased under the option and by giving written
notice to the Company, to elect (within such 60-day period) to
surrender all or part of the option to the Company and to receive
in cash an amount equal to the amount by which the fair market
value per share of the common stock on the date of exercise shall
exceed the purchase price per share under the option multiplied
by the number of shares of common stock granted under the option
as to which the right granted by this paragraph shall have been
exercised; provided, that if any right granted pursuant to this
sentence would make a Change in Control transaction ineligible
for pooling of interests accounting under APB No. 16 that is
intended to be eligible for such accounting treatment, (i) the
Committee shall have the ability to substitute the cash payable
pursuant to this paragraph with common stock with a fair market
value equal to the cash that would otherwise be payable
hereunder, (ii) the period for the holder to elect such right
shall terminate as of the close of business on the date of
consummation of such Change of Control transaction and (iii) the
Change of Control Fair Market Value shall be adjusted to provide
the holders of such rights with fair value in exchange for any
reduction in the period for such election as determined by the
Committee in its sole judgment. The fair market value of the
common stock on the date of exercise shall mean: (a) with respect
to an election by an optionee to receive cash in respect of an
option which is not an "incentive" stock option, the "Change of
Control Fair Market Value," as defined below; and (b) with
respect to an election by an optionee to receive cash in respect
of an option which is an "incentive" stock option, the mean of
the high and low prices of the common stock on the New York Stock
Exchange on such date.
Notwithstanding anything contained in the Plan to the contrary,
the payment in settlement of a stock appreciation right during
the 60-day period (or such shorter period as the rights granted
pursuant to the previous paragraph are exercisable) from and
after a Change of Control shall be entirely in cash and during
the 60-day period (or such shorter period as the rights granted
pursuant to the previous paragraph are exercisable) from and
after a Change of Control the value of a share of common stock on
the date of exercise shall mean (i) with respect to the exercise
of a stock appreciation right accompanying an option which is not
an incentive stock option, the "Change of Control Fair Market
Value" and (ii) with respect to the exercise of a stock
appreciation right accompanying an incentive stock option, the
mean of the high and low prices of the common stock on the New
York Stock Exchange on such date; provided, that if any right
granted pursuant to this sentence would make a Change in Control
transaction ineligible for pooling of interests accounting under
APB No. 16 that is intended to be eligible for such accounting
treatment, the Committee shall have the ability to substitute the
cash payable pursuant to this paragraph with common stock with a
fair market value equal to the cash that would otherwise be
payable hereunder.
For the purpose of the Plan, a "Change of Control" shall mean any
of the following events: (i) The acquisition, other than from the
Company, by any individual, entity or group (within the meaning
of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of
1934, as amended (the "Exchange Act")) other than L. S. Skaggs,
his affiliates and associates, his heirs and any trust or
foundation to which he has transferred or may transfer shares of
common stock, of beneficial ownership (within the meaning of Rule
13d-3 promulgated under the Exchange Act) of 20% or more of
either the then outstanding shares of common stock of the Company
(the "Outstanding Company Common Stock") or the combined voting
power of the then outstanding voting securities of the Company
entitled to vote generally in the election of directors (the
"Company Voting Securities"), provided, however, that any
acquisition by the Company or its subsidiaries, or any employee
benefit plan (or related trust) of the Company or its
subsidiaries, or any corporation with respect to which, following
such acquisition, more than 80% of, respectively, the then
outstanding shares of common stock of such corporation and the
combined voting power of the then outstanding voting securities
of such corporation entitled to vote generally in the election of
directors is then beneficially owned, directly or indirectly, by
the individuals and entities who were the beneficial owners,
respectively, of the Outstanding Company Common Stock and Company
Voting Securities immediately prior to such acquisition in
substantially the same proportion as their ownership, immediately
prior to such acquisition, of the Outstanding Company Common
Stock and Company Voting Securities, as the case may be, shall
not constitute a Change of Control; or (ii) Individuals who, as
of February 1, 1989, constitute the Board of Directors of the
Company (as of February 1, 1989, as adjusted below, the
"Incumbent Board") cease for any reason to constitute at least a
majority of the Board, provided that any individual becoming a
director subsequent to February 1, 1989 whose election, or
nomination for election by the Company's stockholders, was
approved by a vote of at least a majority of the directors then
comprising the Incumbent Board shall be considered a member of
the Incumbent Board, but excluding, for this purpose, any such
individual whose initial assumption of office is in connection
with an actual or threatened election contest relating to the
election of the Directors of the Company (as such terms are used
in Rule 14a-11 of Regulation 14A promulgated under the Exchange
Act); or (iii) approval by the stockholders of the Company of a
reorganization, merger or consolidation, in each case, with
respect to which the individuals and entities who were the
respective beneficial owners of the common stock and voting
securities of the Company immediately prior to such
reorganization, merger or consolidation do not, following such
reorganization, merger or consolidation, beneficially own,
directly or indirectly, more than 80% of, respectively, the then
outstanding shares of common stock and the combined voting power
of the then outstanding voting securities entitled to vote
generally in the election of directors, as the case may be, of
the corporation resulting from such reorganization, merger or
consolidation, or a complete liquidation or dissolution of the
Company or of the sale or other disposition of all or
substantially all of the assets of the Company.
For purposes of the Plan, the "Change of Control Fair Market
Value" shall mean, subject to adjustment by the Committee
pursuant to the third paragraph of Section 18(a), the higher of
(x) the highest reported sales price, regular way, of a share of
common stock on the Composite Tape for New York Stock Exchange
Listed Stocks during the 60-day period prior to the date of the
Change of Control and (y) if the Change of Control is the result
of a transaction or series of transactions described in
paragraphs (i) or (iii) of the definition of Change of Control
set forth in this Section, the highest price per share of common
stock paid in such transaction or series of transactions (in the
case of a Change of Control described in such paragraph (i) of
such definition), as reflected in a Schedule 13D filed by the
person having made the acquisition).
Exhibit 4.16
AMERICAN STORES
RETIREMENT ESTATES
(1994 RESTATEMENT)
<PAGE>
ARTICLE I.............................................................. 1
DEFINITIONS............................................................ 3
2.1 Accounts......................................................... 3
2.2 Additional Contributions......................................... 3
2.3 Affiliated Company............................................... 4
2.4 Anniversary Date................................................. 4
2.5 Annual Additions................................................. 4
2.6 Beneficiary...................................................... 5
2.7 Board of Directors............................................... 5
2.8 Break in Service................................................. 5
2.9 Calendar Quarter................................................. 7
2.10 Code............................................................ 7
2.11 Committee....................................................... 7
2.12 Company......................................................... 7
2.13 Company Contributions........................................... 7
2.14 Company Stock................................................... 8
2.15 Compensation.................................................... 8
2.16 Computation Period.............................................. 9
2.17 Disability...................................................... 9
2.18 Disability Leave of Absence..................................... 10
2.19 Earnings........................................................ 10
2.20 Effective Date.................................................. 10
2.21 Eligible Employee............................................... 10
2.22 Employee........................................................ 10
2.23 Employment Commencement Date.................................... 11
2.24 ERISA........................................................... 11
2.25 Forfeitures..................................................... 11
2.26 Fund Unit....................................................... 11
2.27 Hardship........................................................ 11
2.28 Highly Compensated Employee..................................... 12
2.29 Hour of Service................................................. 15
2.30 Investment Fund................................................. 16
2.31 Investment Manager.............................................. 16
2.32 Leave of Absence................................................ 16
2.33 Normal Retirement Age........................................... 16
2.34 Participant..................................................... 16
2.35 Participant Contributions....................................... 17
2.36 Plan............................................................ 17
2.37 Plan Administrator.............................................. 17
2.38 Plan Year....................................................... 17
2.39 Regular Full-Time Employee...................................... 17
2.40 Regular Part-Time Employee...................................... 17
2.41 Reemployment Commencement Date.................................. 17
2.42. Rollover Contributions......................................... 17
2.43 Sharing Contributions........................................... 18
2.44 Suspense Account................................................ 18
2.45 Tax Deferred Contributions...................................... 18
2.46 Taxed Contributions............................................. 18
2.47 Trust and Trust Fund............................................ 18
2.48 Trustee......................................................... 19
2.49 Valuation Date.................................................. 19
2.50 Year of Service................................................. 19
ARTICLE III............................................................ 21
ELIGIBILITY AND PARTICIPATION.......................................... 21
3.1 Participation.................................................... 21
3.2 Participants in Prior Plans...................................... 21
ARTICLE IV............................................................. 22
PARTICIPANT CONTRIBUTIONS.............................................. 22
4.1 Election......................................................... 22
4.2 Amount Subject to Election....................................... 22
4.3 Limitation on Compensation Deferrals............................. 23
4.4 Provisions for Return of Excess Tax Deferred Contribution
over $7,000...................................................... 26
4.5 Provision for Recharacterization or Return of Excess
Deferrals by Highly Compensated Participants..................... 27
4.6 Limitations on Taxed Contributions and Company Contributions..... 28
4.7 Provision for Disposition of Excess Taxed Contributions
or Company Match on Contributions on Behalf of Highly
Compensated Participants......................................... 31
4.8 Termination of, Change in Rate of, or Resumption of Deferrals.... 33
4.9 Character of Contributions....................................... 33
4.10 Rollover Contributions.......................................... 33
4.11 Effective Date of Article IV.................................... 34
ARTICLE V.............................................................. 35
TRUST FUND AND COMPANY CONTRIBUTIONS................................... 35
5.1 Trust Fund....................................................... 35
5.2 Company Contributions............................................ 35
5.3 Form of Company Contributions.................................... 35
5.4 Investment of Trust Assets....................................... 35
5.5 American Stores Company Stock Fund............................... 37
5.6 Irrevocability................................................... 38
5.7 Company, Committee and Trustee Not Responsible for
Adequacy of Trust Fund........................................... 38
ARTICLE VI............................................................. 39
ACCOUNTS AND ALLOCATIONS............................................... 39
6.1 Participants'Accounts............................................ 39
6.2 Allocation of Amounts Contributed by Participants................ 39
6.3 Allocation of Company Contributions and Forfeitures.............. 39
6.4 Valuation of Participants'Accounts............................... 43
6.5 Treatment of Accounts Upon Termination of Employment............. 45
6.6 Miscellaneous Valuation Rules.................................... 45
ARTICLE VII............................................................ 46
VESTING IN PLAN ACCOUNTS............................................... 46
7.1 No Vested Rights Except as Herein Provided....................... 46
7.2 Vesting Schedule................................................. 46
7.3 Permissive Vesting............................................... 47
7.4 Vesting of Participant Contributions............................. 47
7.5 Vesting During Leave of Absence.................................. 47
ARTICLE VIII........................................................... 48
PAYMENT OF PLAN BENEFITS............................................... 48
8.1 Payment of Benefits.............................................. 48
8.2 Designation of Beneficiary....................................... 52
8.3 Distribution Rules............................................... 52
8.4 Forfeitures...................................................... 55
8.5 Valuation of Plan Benefits....................................... 55
8.6 Lapsed Benefits.................................................. 55
8.7 Persons Under Legal Disability................................... 56
8.8 Additional Documents............................................. 56
8.9 Direct Transfers................................................. 56
ARTICLE IX............................................................. 59
OPERATION AND ADMINISTRATION OF THE PLAN............................... 59
9.1 Plan Administration.............................................. 59
9.2 Committee Powers................................................. 59
9.3 Investment Manager............................................... 60
9.4 Funding Policy................................................... 61
9.5 Committee Procedure.............................................. 61
9.6 Compensation of Committee Members and Plan Expenses.............. 62
9.7 Resignation and Removal of Members............................... 63
9.8 Appointment of Successors........................................ 63
9.9 Records.......................................................... 63
9.10 Reporting and Disclosure........................................ 63
9.11 Reliance Upon Documents and Opinions............................ 64
9.12 Reliance on Committee Memorandum................................ 64
9.13 Multiple Fiduciary Capacity..................................... 64
9.14 Limitation on Liability......................................... 64
9.15 Indemnification................................................. 65
9.16 Bonding......................................................... 65
9.17 Voting and Other Rights of Company Stock........................ 65
9.18 Prohibition Against Certain Actions............................. 67
ARTICLE X.............................................................. 69
MERGER OF COMPANY, MERGER OF PLAN...................................... 69
10.1 Effect of Reorganization or Transfer of Assets.................. 69
10.2 Merger Restriction.............................................. 69
ARTICLE XI............................................................. 70
11.1 Plan Termination................................................ 70
11.2 Discontinuance of Contributions................................. 70
11.3 Rights of Participants.......................................... 71
11.4 Trustee's Duties on Termination................................. 71
11.5 Partial Termination............................................. 71
ARTICLE XII............................................................ 73
APPLICATION FOR BENEFITS............................................... 73
12.1 Application for Benefits........................................ 73
12.2 Action on Application........................................... 73
12.3 Appeals......................................................... 74
ARTICLE XIII........................................................... 75
LIMITATIONS ON CONTRIBUTIONS........................................... 75
13.1 General Rule.................................................... 75
13.2 Other Defined Contribution Plans................................ 76
13.3 Defined Benefit Plans........................................... 76
13.4 Adjustments for Excess Annual Additions......................... 77
13.5 Affiliated Company.............................................. 79
13.6 Effective Date.................................................. 79
ARTICLE XIV............................................................ 80
RESTRICTION ON ALIENATION.............................................. 80
14.1 General Restrictions Against Alienation......................... 80
14.2 Qualified Domestic Relations Orders............................. 80
14.3 Authorized Participant Loans.................................... 84
14.4 Group Insurance Payments Through December 31, 1992.............. 87
ARTICLE XV............................................................. 88
SPECIAL TOP-HEAVY RULES................................................ 88
15.1 Applicability................................................... 88
15.2 Definitions..................................................... 88
15.3 Top-Heavy Status................................................ 89
15.4 Contributions................................................... 91
15.5 Maximum Annual Additions........................................ 92
15.6 Vesting Rules................................................... 92
15.7 Noneligibile Employees.......................................... 93
ARTICLE XVI............................................................ 94
PLAN AMENDMENTS........................................................ 94
16.1 Amendments...................................................... 94
16.2 Retroactive Amendments.......................................... 94
ARTICLE XVII........................................................... 95
SURVIVOR ANNUITY REQUIREMENTS.......................................... 95
17.1 Application of Article.......................................... 95
17.2 Definitions..................................................... 95
17.3 Form of Benefits Provided....................................... 96
17.4 Elections With Respect to Survivor Annuities.................... 96
17.5 Marriage Requirement............................................ 98
17.6 Lump Sum Distributions.......................................... 98
17.7 Security for Loans.............................................. 99
17.8 Purchase of Annuity Contract to Provide Benefits................ 99
ARTICLE XVIII.......................................................... 101
MISCELLANEOUS.......................................................... 101
18.1 No Enlargement of Employee Rights............................... 101
18.2 Inspection of Records........................................... 101
18.3 Mailing of Payments and Addresses............................... 101
18.4 Notices and Communications...................................... 101
18.5 Governing Law................................................... 102
18.6 Interpretation.................................................. 102
18.7 Withholding For Taxes........................................... 102
18.8 Successors and Assigns.......................................... 102
18.9 Counterparts.................................................... 102
<PAGE>
AMERICAN STORES
RETIREMENT ESTATES
(1994 RESTATEMENT)
ARTICLE I
NAME AND PURPOSES
Effective as of January 1, 1985, American Stores Company ("Company")
established a tax qualified profit sharing plan under Code Section 401(a)
with a cash or deferred arrangement feature under Code Section 401(k), for
Eligible Employees of the Company, known as the "American Stores Retirement
Estates" (the "Plan"). A restated Plan document was adopted, effective
January 1, 1989 (the "1989 Restatement"), and was intended to fully replace
and restate the provisions of the Plan document in effect prior to said
date in order to accomplish the following:
(a) To bring certain Plan language into conformity with recent
developments in applicable federal pension law; and,
(b) To implement certain Plan design modifications intended to
facilitate and improve the efficient administration of the Plan.
A restated Plan document was adopted in 1990 (the "1990 Restatement"),
generally effective January 1, 1989, and was intended to fully replace and
restate the provisions of the 1989 Restatement and all amendments to the
1989 Restatement in order to accomplish the following:
(a) To incorporate the provisions of the First, Second, and Third
Amendments to the 1989 Restatement into a single restated document;
and,
(b) To implement the proposed Fourth Amendment to the 1989 Restatement
submitted to the Internal Revenue Service for a favorable
determination letter and on which such favorable determination letter
was issued on June 7, 1990.
A second restated Plan document was adopted in 1990 (the "Second 1990
Restatement"), effective January 1, 1989, and was intended fully to replace
and restate the provisions of the 1990 Restatement primarily to provide for
the merger of the Lucky Stores Retirement Estates into the Plan as of
January 1, 1991 and the compliance with the requirements of Code Section
411(d)(6).
A restated Plan document was adopted in 1992 (the "1992 Restatement"),
effective December 14, 1992 and was intended fully to replace and restate
the provisions of the Second 1990 Restatement primarily to provide for the
transfer of the recordkeeping and administrative services for the Plan from
the Company to Fidelity Institutional Retirement Services Company. All
administrative rules adopted prior to December 14, 1992 in connection with
this Plan were superseded and repealed.
A First Amendment and a Second Amendment to the 1992 Restatement were
adopted effective as of the dates specified therein in order to comply with
recent changes in applicable law and to implement certain Plan
modifications. The sole purpose of this 1994 Restatement is to incorporate
the 1992 Restatement and document for submission to the Internal Revenue
Service for a favorable determination letter.
The Plan is intended to constitute a plan described in ERISA Section
404(c). Consequently, notwithstanding any other provision of this Plan to
the contrary, that one or more fiduciaries of the Plan shall be relieved of
responsibility for investment decisions made by Participants to the maximum
extent contemplated by ERISA Section 404(c) and the Department of Labor
Regulations promulgated thereunder.
<PAGE>
ARTICLE II
DEFINITIONS
2.1 ACCOUNTS.
"Accounts" or "Participant's Accounts" shall mean each of the
following accounts maintained for a Participant:
(a) Taxed Contributions Account which holds his/her Taxed
Contributions made hereunder and earnings thereon as well as post-tax
contributions made under the American Stores Company Employees' Thrift
Plan and earnings thereon.
(b) Tax Deferred Contributions Account which holds his/her Tax
Deferred Contributions and earnings thereon as well as similar
contributions made under the Lucky Stores Retirement Estates and
earnings thereon.
(c) Company Match on Contributions Account which holds his/her share
of the Company contribution made under Section 6.3(b) hereof and
earnings thereon.
(d) Company Contribution on Pay Account which holds his/her share of
the Company contribution made with respect to his/her Compensation
during a Plan Year under Section 6.3 hereof and earnings thereon.
(e) Company Contribution on Pay (Fully Vested) Account which holds
his/her share of the Company contribution made with respect to his/her
deemed compensation as provided in Section 6.3(c)(iii) hereof during a
Plan Year under Section 6.3(c) hereof and earnings thereon and amounts
transferred as provided in Section 7.3 hereof and earnings thereon.
(f) Rollover Account which holds his/her amounts representing Rollover
Contributions made after September 30, 1992 and earnings thereon.
(g) Prior Plans Account which holds his/her amounts representing
Rollover Contributions made prior to October 1, 1992 and earnings
thereon and interests in the American Stores Retirement Plan, American
Stores Stock Ownership Plan, the Skaggs Profit Sharing Plan, and
employer contributions under the American Stores Company Employees'
Thrift Plan and earnings thereon; provided, however, that amounts
representing Rollover Contributions by a Participant who had fewer
than five (5) years of participation in the Plan as of October 1, 1992
or whose Rollover Contributions were made after September 30, 1990
shall be credited to the Participant's Rollover Account.
2.2 ADDITIONAL CONTRIBUTIONS.
"Additional Contributions" of a Participant shall mean his/her
Contributions (whether Taxed or Tax Deferred) in excess of six percent (6%)
of Compensation. Additional Contributions shall not share in allocations of
Company Contributions and Forfeitures.
2.3 AFFILIATED COMPANY.
"Affiliated Company" shall mean:
(a) Any corporation that is included in a controlled group of
corporations, within the meaning of Section 414(b) of the Code, that
includes the Company;
(b) Any trade or business that is under common control with the
Company within the meaning of Section 414(c) of the Code; and
(c) Any Participant of an affiliated service group, within the meaning
of Section 414(m) of the Code, that includes the Company.
2.4 ANNIVERSARY DATE.
"Anniversary Date" shall mean the last day of each Plan Year.
2.5 ANNUAL ADDITIONS.
"Annual Additions" shall mean, for a particular Participant on behalf
of any Plan Year, the sum of:
(a) The amount credited to the Participant's Accounts from Company
Contributions (including Tax Deferred Contributions) for the Plan
Year;
(b) The Participant's Taxed Contributions;
(c) Forfeitures;
(d) Any amounts allocated to an account established under a pension or
annuity plan to provide medical benefits with respect to a Participant
after retirement under Section 401(h) of the Code.
(e) Any amounts allocated for such Plan Year which amounts are derived
from contributions paid or accrued after December 31, 1985, in taxable
years ending after such date, which are attributable to post
retirement medical or life insurance benefits allocated to the
separate account of a key employee (as defined in Code Section 416(i))
under Code Section 419A(d)(1).
(f) Excess deferral amounts determined pursuant to Section 4.4, 4.5,
and 4.7.
Notwithstanding the foregoing, Paragraphs (d) and (e) above shall not be
included as Annual Additions for the purpose of applying the limitation
contained in Section 13.1(a)(ii). A Participant's Rollover Contributions
shall not be taken into account in determining the amount of his/her Annual
Additions.
2.6 BENEFICIARY.
"Beneficiary" or "Beneficiaries" shall mean the person or persons last
designated by a Participant as set forth in Section 8.2 or, if there is no
designated Beneficiary or surviving Beneficiary, the person or persons
designated pursuant to Section 8.2 to receive the interest of a deceased
Participant in such event.
2.7 BOARD OF DIRECTORS.
"Board of Directors" shall mean the Board of Directors (or its
delegate) of American Stores Company as it may from time to time be
constituted.
2.8 BREAK IN SERVICE
"Break in Service" shall mean:
(a) In the case of (i) a Regular Full-Time Employee, or (ii) a Regular
Part-Time Employee or any other Employee after he/she has become a
Participant and while he/she remains a Participant, a twelve (12)
consecutive month period commencing with the date on which the
Employee's employment or Leave of Absence is terminated during which
the Employee is not credited with an Hour of Service. Notwithstanding
the above, for Plan Years beginning after December 31, 1984, in the
case of an Employee who is subject to the rules of this Paragraph (a)
and is absent from work for Maternity or Paternity Leave, the twelve
(12) consecutive month period beginning on the date on which the
Employee's employment or Leave of Absence is terminated shall not
constitute a Break in Service. The termination date of an Employee who
is absent from service beyond the first anniversary date of absence by
reason of a Maternity or Paternity Leave shall occur on the second
anniversary of the first date of such absence. The period between the
first and second anniversaries of the first date of absence from work
shall be considered neither a Year of Service nor a Break in Service.
"Maternity or Paternity Leave" shall mean an absence from work for any
period --
(i) By reason of the pregnancy of the Employee,
(ii) By reason of the birth of a child of the Employee,
(iii) By reason of the placement of a child with the Employee in
connection with the adoption of the child by the Employee, or
(iv) For purposes of caring for the child for a period beginning
immediately following the birth or placement.
However, the provisions of the preceding sentence shall not apply
unless the Employee provides such timely information as the Committee
may reasonably require to establish that the absence is for the
reasons listed above and the number of days for which there was such
an absence.
(b) In the case of any Regular Part-Time Employee or any other
Employee to whom Paragraph (a) does not apply, a twelve (12)
consecutive month period commencing on his/her Employment Commencement
Date or Reemployment Commencement Date (as the case may be) in which
the Employee does not complete more than five hundred (500) Hours of
Service.
(c) The following provisions of this Section 2.8 shall apply in Plan
Years beginning after December 31, 1984 to an Employee described in
Paragraph (b) who is absent from work for any period
(i) By reason of the pregnancy of the Employee,
(ii) By reason of the birth of a child of the Employee,
(iii) By reason of the placement of a child with the Employee in
connection with the adoption of the child by the Employee, or
(iv) For purposes of caring for the child for a period beginning
immediately following the birth or placement.
(d) The number of Hours of Service to which an Employee described in
Paragraph (c) shall be credited with shall be --
(i) The number which otherwise would normally have been credited
to the Employee but for the absence, or
(ii) If the number described in Subparagraph (i) above is not
capable of being determined, eight (8) Hours of Service per day
of such absence, provided that the total number of hours treated
as Hours of Service under this Paragraph (d) shall not exceed
five hundred one (501) and that these Hours of Service shall be
taken into account solely for purposes of determining whether or
not the Employee has incurred a Break in Service.
(e) The Hours described in Paragraph (d) shall be credited to the
Computation Period --
(i) In which the absence from work begins, if the Employee would
be prevented from incurring a Break in Service in that
Computation Period solely because the period of absence is
treated as Hours of Service under this Section 2.8, or as
(ii) In any other case, in the immediately following Computation
Period.
(f) The above provisions of this Section 2.8 shall not apply to an
Employee described in Paragraph (b) unless the Employee provides such
timely information as the Committee may reasonably require to
establish that
(i) The absence is for reasons described in Paragraph (c), and
(ii) The number of days for which there was such an absence.
2.9 CALENDAR QUARTER.
"Calendar Quarter" shall mean the period of three (3) successive
months beginning on the first day of any January, April, July or October.
2.10 CODE.
"Code" shall mean the Internal Revenue Code of 1986, as in effect on
the date of execution of this Plan document and as thereafter amended from
time to time.
2.11 COMMITTEE.
"Committee" shall mean the American Stores Company Benefit Plans
Committee described in Article IX.
2.12 COMPANY.
(a) "Company" shall mean American Stores Company, or any successor
thereof, if its successor shall adopt this Plan.
(b) In addition, unless the context indicates otherwise, as used in
this Plan the term "Company" shall also mean and include any
Affiliated Company (or similar entity) that has been granted
permission by the Board of Directors to participate in this Plan. This
permission shall be granted under such conditions and upon such
conditions as the Board of Directors deems appropriate.
2.13 COMPANY CONTRIBUTIONS.
"Company Contributions" shall mean all amounts (whether in cash or
other property, including Company Stock) paid by the Company into the Trust
Fund established and maintained under the provisions of this Plan for the
purpose of providing benefits for Participants and their Beneficiaries.
2.14 COMPANY STOCK.
"Company Stock" shall mean whichever of the following is applicable.
(a) So long as the Company has only one class of common stock, that
class of stock.
(b) In the event the Company at any time has more than one class of
stock, the class (or classes) of the Company's stock that constitutes
"Employer Securities" as that term is defined Code Section 409(1).
2.15 COMPENSATION.
(a) "Compensation" shall mean a Participant's straight-time earnings,
overtime, and any bonus or other amounts paid by the Company by reason
of services performed by an Employee (including payments pursuant to
amounts previously deferred under a nonqualified deferred compensation
plan), and wage replacement benefits under Company-sponsored programs
for either occupational or non-occupational disability benefits,
except as provided in (b)(iv) below, before deductions authorized by
the Employee or required by law to be withheld from the Employees of
the Company.
(b) Notwithstanding the foregoing, a Participant's Compensation shall
be determined without taking into account any of the following:
(i) Contributions or payments by the Company for or on account of
an Employee under any employee benefit plan (other than payments
pursuant to a nonqualified deferred compensation plan), including
but not limited to this Plan and any health or welfare plans;
(ii) Compensation that is not subject to employer income tax
withholding under Code Section 3402 (or any successor thereof),
except such Compensation as is provided in Paragraph (d) of this
Section 2.15;
(iii) Income caused by the exercise of stock options or stock
appreciation rights;
(iv) Income attributable to benefits received under the long term
disability plan maintained by the Company; and
(v) Income attributable to severance from Company employment.
(c) A Participant's Compensation for purposes of this Plan shall be
the compensation paid to him/her during the portion of the relevant
Plan Year during which he/she was a Participant, irrespective of when
such compensation was actually earned.
(d) Except as is expressly provided to the contrary in this Plan, a
Participant's Compensation shall include his Participant Contributions
and any amounts covering employee contributions from the pre-tax
health care premium payment arrangement under the American Stores
Company Before Tax Plan or any similar arrangement sponsored by the
Company pursuant to Code Section 125.
(e) Notwithstanding the foregoing, for all Plan Years beginning on or
after January 1, 1989, a Participant's Compensation for purposes of
this Plan shall only include so much of his/her Compensation as does
not exceed two hundred thousand dollars ($200,000.00) (or such amount
as the Secretary of the Treasury shall adjust at the same time and in
the same manner as under Code Section 415(d)). In the determining the
Compensation of a Participant, the family aggregation rules of Code
Section 414(q)(6) shall apply, except that in applying such rules, the
term "family" shall include only the spouse of the Participant and any
lineal descendants of the Participant who have not attained age 19
before the close of the year.
2.16 COMPUTATION PERIOD.
(a) "Computation Period" shall mean the consecutive twelve (12) month
period used for determining whether the Employee is to be credited
with a Year of Service or a Break in Service.
(b) For periods preceding the Effective Date, an Employee's Initial
Computation Period shall be the twelve-month period commencing on
his/her Employment Commencement Date or Reemployment Commencement Date
(whichever is applicable) and an Employee's second Computation Period
(and all subsequent periods) shall be the Plan Year that includes or
starts on the same day as the first anniversary of his/her Employment
Commencement Date or Reemployment Commencement Date (whichever is
applicable).
(c) Effective as of the Effective Date, an Employee's Computation
Period shall be the twelve-month period commencing on his/her
Employment Commencement Date or Reemployment Commencement Date
(whichever is applicable).
2.17 DISABILITY.
"Disability" shall mean the permanent and total disability of a
Participant while an Eligible Employee whereby the Participant is unable to
engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be expected to result
in death or which has lasted or can be expected to last for a continuous
period of not less than 12 months. The determination as to whether a
Participant has incurred a Disability shall be made by the Committee (or
its representative).
2.18 DISABILITY LEAVE OF ABSENCE.
"Disability Leave of Absence" shall mean a Leave of Absence that has
continued beyond 52 weeks and that is due to a Disability. The
determination as to whether a Participant is on a Disability Leave of
Absence shall be made by the Committee (or its representative).
2.19 EARNINGS.
"Earnings" shall mean the Company's operating profits for its fiscal
year beginning within the Plan Year before any reduction for retirement
plan contributions plus its retained earnings.
2.20 EFFECTIVE DATE.
"Effective Date" shall mean January 1, 1994, which shall be the
Effective Date of this restated Plan document (except as otherwise provided
herein). Notwithstanding the foregoing, for periods prior to said Effective
Date, Plan matters shall be subject to the provisions of the predecessor
plan document and amendments thereto as in effect prior to January 1, 1994
(except as specifically provided herein), which established the terms of
the Plan prior to January 1, 1994.
2.21 ELIGIBLE EMPLOYEE.
"Eligible Employee" shall mean any Employee who is not represented in
employment by a labor organization unless such organization and the Company
have specifically agreed that the Plan shall be applicable to employees so
represented, and who is regularly employed in the United States by one or
more of the Companies; provided that if an Employee becomes represented in
employment by a labor organization and the Company and the labor
organization do not specifically agree that the Plan will be applicable to
employees so represented, the Employee will cease to be an Eligible
Employee.
2.22 EMPLOYEE.
(a) "Employee" shall mean each person currently employed in any
capacity by the Company or Affiliated Company any portion of whose
income is subject to withholding of income tax and/or for whom Social
Security contributions are made by the Company, as well as any other
person qualifying as a common law employee of the Company or
Affiliated Company.
(b) Although Eligible Employees are the only class of Employees
eligible to participate in this Plan, the term "Employee" is used to
refer to persons employed in a non-Eligible Employee capacity as well
as Eligible Employee category. Thus, those provisions of this Plan
that are not limited to Eligible Employees, such as those relating to
Hours of Service, apply to both Eligible and non-Eligible Employees.
2.23 EMPLOYMENT COMMENCEMENT DATE.
(a) "Employment Commencement Date" shall mean the date on which an
Employee is first credited with an Hour of Service for the Company or
an Affiliated Company.
(b) Except to the extent the Company shall expressly determine
otherwise or as expressly provided otherwise in this Plan, an Employee
shall not, for purposes of determining his/her Employment Commencement
Date, be deemed to have commenced employment with the Company or an
Affiliated Company prior to the date on or as of which the operating
unit or entity employing him or her became part of or acquired by the
Company or an Affiliated Company.
2.24 ERISA.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time.
2.25 FORFEITURES.
"Forfeitures" shall mean the nonvested portion of a Participant's
benefit that is forfeited in accordance with the provisions of Article
VIII.
2.26 FUND UNIT.
"Fund Unit" shall mean a unit of participation in any separate
Investment Fund maintained under the Trust pursuant to Section 5.4(b),
representing an undivided interest in all of the assets of any such
Investment Fund.
2.27 HARDSHIP.
"Hardship" shall mean, for the purpose of determining whether a
Participant has incurred a "hardship" that would permit him or her to
receive a distribution under Section 8.1(b), the occurrence of an immediate
and heavy financial need of such Participant. The determination of the
existence of a Hardship and the amount to be distributed to meet the need
created by the Hardship shall be made by the Committee (or its
representative) in accordance with the provisions of Section 8.1(b) in a
uniform and nondiscriminatory manner.
2.28 HIGHLY COMPENSATED EMPLOYEE.
(a) "Highly Compensated Employee" shall mean any Employee who
(i) was a Five Percent Owner during the Determination Year or the
Look Back Year;
(ii) received Compensation from an Employer in excess of $75,000
(as adjusted by the Secretary of Treasury) during the Look Back
Year;
(iii) received Compensation from an Employer in excess of $50,000
(as adjusted by the Secretary of Treasury) during the Look Back
Year and was in the "top-paid group" of Employees for such Look
Back Year;
(iv) was at any time an officer during the Look Back Year and
received Compensation greater than fifty percent (50%) of the
amount in effect under Section 415(b)(1)(A) of the Code in such
Look Back Year; or
(v) was an Employee described in Subparagraph (ii), (iii), or
(iv) above for the Determination Year and was a member of the
group consisting of the 100 Employees paid the greatest
Compensation during the Determination Year.
(b) Determination of a Highly Compensated Employee shall be in
accordance with the following definitions and special rules:
(i) "Determination Year" shall mean the Plan Year for which the
determination of Highly Compensated Employee is being made.
(ii) "Look Back Year" shall mean the twelve (12) month period
preceding the Determination Year. Notwithstanding the foregoing,
the Company may elect to designate the calendar year ending
within any Determination Year as the "Look Back Year" for any
such Determination Year provided such election applies to all
plans, entities and arrangements of the Company for any such
Determination Year.
(iii) An Employee shall be treated as a Five Percent Owner for
any Determination Year or Look Back Year if at any time during
such Year such Employee was a Five Percent Owner (as defined in
Section 15.2).
(iv) An Employee is in the "top-paid group" of Employees for any
Determination Year or Look Back Year if such Employee is in the
group consisting of the top twenty percent (20%) of the Employees
when ranked on the basis of Compensation paid during such Year.
(v) For purposes of this Section, no more than fifty (50)
Employees (or, if lesser, the greater of three (3) Employees or
ten percent (10%) of the Employees) shall be treated as officers.
To the extent required by Code Section 414(q), if for any
Determination Year or Look Back Year no officer of the Employer
is described in this Section, the highest paid officer of the
Employer for such year shall be treated as described in this
section. Employees who are excluded in determining the "top-paid
group" shall also be excluded in determining the 10% limit
referenced in the first sentence of this Subparagraph (v).
(vi) If any individual is a "family member" with respect to a
Five Percent Owner or of a Highly Compensated Employee in the
group consisting of the ten (10) Highly Compensated Employees
paid the greatest Compensation during the Determination Year or
Look Back Year, then
(A) such individual shall not be considered a separate
Employee, and
(B) any Compensation paid to such individual (and any
applicable contribution or benefit on behalf of such
individual) shall be treated as if it were paid to (or on
behalf of) the Five Percent Owner or Highly Compensated
Employee.
For purposes of this Subparagraph (vi), the term "family member"
means, with respect to any Employee, such Employee's Spouse and
lineal ascendants or descendants and the spouses of such lineal
ascendants or descendants.
(vii) For purposes of this Section the term "Compensation" means
Compensation as defined in Code Section 415(c)(3), without regard
to the limitations of Code Section 401(a)(17); provided, however,
the determination under this Subparagraph (vii) shall be made
without regard to Code Sections 125, 402(a)(8), and 402(h)(1)(B),
and in the case of employer contributions made pursuant to a
salary reduction agreement, without regard to Code Section
403(b).
(viii) For purposes of determining the number of Employees in the
"top-paid" group under this Section, the following Employees
shall be excluded:
(A) Employees who have not completed six (6) months of
service with the Company,
(B) Employees who normally work less than 17-1/2 hours per
week,
(C) Employees who normally work not more than six (6) months
during any Plan Year, and
(D) Employees who have not attained age 21,
(E) Except to the extent provided in Treasury Regulations,
Employees who are included in a unit of employees covered by
an agreement which the Secretary of Labor finds to be a
collective bargaining agreement between Employee
representatives and Employer, and
(F) Employees who are nonresident aliens and who receive no
earned income (within the meaning of Code Section 911(d)(2)
from the Employer which constitutes income from sources
within the United States (within the meaning of Code Section
861(a)(3)).
The Employer may elect to apply Subparagraphs (viii)(A) through
(D) above by substituting a shorter period of service, smaller
number of hours or months, or lower age for the period of
service, number of hours or months, or (as the case may be) than
as specified in such Subparagraphs.
(ix) A former Employee shall be treated as a Highly Compensated
Employee if
(A) such Employee was a Highly Compensated Employee when
such Employee incurred a Severance, or
(B) such Employee was a Highly Compensated Employee at any
time after attaining age fifty-five (55).
(x) Code Sections 414(b), (c), (m), and (o) shall be applied
before the application of this Section. Also, the term "Employee"
shall include "leased employee," within the meaning of Code
Section 414(n), unless such leased Employee is covered under a
"safe harbor" plan of the leasing organization and not covered
under a qualified plan of the Employer.
(xi) For the purpose of this section, the term "Employer" shall
mean the Company and any Affiliated Company.
(xii) Notwithstanding the forgoing, non-resident aliens without
U.S. source income from the Employer shall be disregarded for all
purposes in determining the Highly Compensated Employees of the
Employer.
(c) Notwithstanding the foregoing, for administrative convenience, the
Committee may establish rules and procedures for purposes of
identifying Highly Compensated Employees, which rules and procedures
may result in an Eligible Employee being deemed to be a Highly
Compensated Employee for purposes of the limitations of Article IV and
Article VI, whether or not such Eligible Employee is an individual
described in Code Section 414(q).
2.29 HOUR OF SERVICE.
(a) "Hour of Service" of an Employee shall mean the following:
(i) Each hour for which the Employee is paid by the Company or an
Affiliated Company or entitled to payment for the performance of
services as an Employee.
(ii) Each hour in or attributable to a period of time during
which the Employee performs no duties (irrespective of whether
he/she has terminated his/her Employment) due to a vacation,
holiday, illness, incapacity (including pregnancy or disability),
layoff, jury duty, military duty or a Leave of Absence (if the
Leave of Absence is an unpaid medical Leave of Absence, the
Employee will accrue hours for the duration of such leave for the
first six months of such leave), for which he/she is so paid or
so entitled to payment, whether direct or indirect. However, no
such hours shall be credited to an Employee if (A) such Employee
is directly or indirectly paid or entitled to payment for such
hours and (B) such payment or entitlement is made or due under a
plan maintained solely for the purpose of complying with
applicable worker's compensation, unemployment compensation, or
disability insurance laws, or is a payment which solely
reimburses the Employee for medical or medically-related expenses
incurred by him/her.
(iii) Each hour for which he/she is entitled to back pay,
irrespective of mitigation of damages, whether awarded or agreed
to by the Company or an Affiliated Company, provided that such
Employee has not previously been credited with an Hour of Service
with respect to such hour under Subparagraphs (i) or (ii) above.
Hours of Service under Paragraphs (a)(ii) and (a)(iii) shall be
calculated in accordance with Department of Labor Regulation 29 C.F.R.
ss. 2530.200b-2(b). All Hours of Service determined under the rules of
Paragraph (a) shall be credited to the Computation Period to which the
payment relates, rather than the period in which it is made.
(b) In the event that an Employee is compensated for duties performed
on a basis other than actual hours worked and no records of the
Employee's actual working hours are maintained, the Employee shall be
deemed to have completed forty-five (45) Hours of Service for each
week, and one-hundred ninety (190) hours per month for monthly paid
employees, or portion thereof during which he/she is credited with an
Hour of Service for the Company or an Affiliated Company.
(c) Except to the extent the Company shall expressly determine
otherwise or as expressly provided otherwise in this Plan, an Employee
shall not receive credit for his/her Hours of Service completed with
an Affiliated Company or any operating unit or entity employing
him/her prior to the date on or as of which such company, unit or
entity becomes part of or is acquired by the Company or an Affiliated
Company.
2.30 INVESTMENT FUND.
"Investment Fund" shall mean any of the separate investment funds,
including the American Stores Company Stock Fund, established by the
Committee pursuant to Section 5.4 (b) to provide investment alternatives to
Participants for the investment of their Account.
2.31 INVESTMENT MANAGER.
"Investment Manager" shall mean the one or more Investment Managers,
if any, that are appointed pursuant to Section 9.3.
2.32 LEAVE OF ABSENCE.
"Leave of Absence" shall mean any absence without pay authorized by
the Company or an Affiliated Company under its standard personnel
practices. All persons under similar circumstances shall be treated alike
in the granting of such leaves.
2.33 NORMAL RETIREMENT AGE.
"Normal Retirement Age" shall mean the Participant's sixty-fifth
(65th) birthday.
2.34 PARTICIPANT.
"Participant" shall mean any Eligible Employee who is a participant in
the Plan or any Employee who once was but no longer is an Eligible Employee
but who continues to have amounts held in one or more Accounts under the
Plan.
2.35 PARTICIPANT CONTRIBUTIONS.
"Participant Contributions" shall mean all of a Participant's
Contributions to the Plan, including Taxed Contributions and Tax Deferred
Contributions.
2.36 PLAN.
"Plan" shall mean the American Stores Retirement Estates herein set
forth, and as it may be amended from time to time.
2.37 PLAN ADMINISTRATOR.
"Plan Administrator" shall mean the administrator of the Plan, within
the meaning of Section 3 (16) (A) of ERISA. The Plan Administrator shall be
American Stores Company.
2.38 PLAN YEAR.
"Plan Year" shall mean the fiscal year of the Plan, which shall be the
calendar year.
2.39 REGULAR FULL-TIME EMPLOYEE.
"Regular Full-Time Employee" shall mean an Employee who ordinarily and
on a regular basis works to the number of hours prescribed by the Employer
from time to time as the normal full-time work week of the Employee group
to which the Employee is assigned.
2.40 REGULAR PART-TIME EMPLOYEE.
"Regular Part-Time Employee" means an employee whose customary
employment is less than the normal full-time work week of the Employee
group to which the Employee is assigned.
2.41 REEMPLOYMENT COMMENCEMENT DATE.
"Reemployment Commencement Date" shall mean, in the case of an
Employee whose employment is terminated and who is subsequently reemployed
by the Company or an Affiliated Company, the first day following the
termination of his/her employment on which the Employee is credited with an
Hour of Service for the Company or an Affiliated Company as an Employee.
2.42 ROLLOVER CONTRIBUTIONS.
"Rollover Contributions" shall mean:
(i) A contribution by an Eligible Employee as the result of a
distribution from another tax-qualified plan or an individual
retirement account or individual retirement annuity (as defined
in Code Section 408), but only if such contribution consists of
amounts attributable to a "qualified total distribution" from a
qualified trust as such term is defined in Code Section 402 (a)
(5) (E) and earnings thereon or, effective with respect to
amounts attributable to distributions made after December 31,
1992, such contribution consists of amounts attributable to an
"eligible rollover distribution" as defined in Code Section 402
(c) (4) and earnings thereon;
(ii) A transfer of assets from the trustee of a tax-qualified
retirement plan to the Trustee of this Plan, provided the
transaction satisfies the requirements of Section 10.2; or
(iii) A direct transfer of assets consisting only of amounts
attributable to a qualified total distribution from a qualified
trust and earnings thereon or, effective with respect to amounts
attributable to distribution made after December 31, 1992,
amounts attributable to an eligible rollover distribution, from
the trustee of a qualified trust or, to the extent permitted by
law, from the trustee or custodian of an individual retirement
account or individual retirement annuity to the Trustee.
2.43 SHARING CONTRIBUTIONS.
"Sharing Contributions" of a Participant shall mean his/her
Contributions (whether Taxed or Tax Deferred) not in excess of six percent
(6%) of Compensation. Sharing Contributions shall participate in
allocations of Company Contributions and Forfeitures.
2.44 SUSPENSE ACCOUNT.
"Suspense Account" shall mean the Account established pursuant to the
provisions of Section 13.4 to hold any excess Annual Additions.
2.45 TAX DEFERRED CONTRIBUTIONS.
"Tax Deferred Contributions" shall mean those contributions made by a
Participant which represent pre-tax contributions.
2.46 TAXED CONTRIBUTIONS.
"Taxed Contributions" shall mean those contributions made by a
Participant which represent post-tax contributions.
2.47 TRUST AND TRUST FUND.
"Trust" or "Trust Fund" shall mean the one or more trusts created for
funding purposes under the Plan.
2.48 TRUSTEE.
"Trustee" shall mean the individual or entity acting as a Trustee of
the Trust Fund.
2.49 VALUATION DATE.
Effective for all additions (including Participant, Company and
Rollover Contributions, loan repayments, repayments of prior distributions
under Section 8.4 (b) and forfeitures allocated under Section 6.3 (a) (i)
to the Trust from and after October 1, 1992 and effective as of the
Effective Date for all assets of the Trust, "Valuation Date" shall mean the
date as of which the Trustee shall determine the value of the assets in the
Trust Fund for purposes of determining the value of each Account, which
shall be each day of a calendar year on which the New York Stock Exchange
is open.
2.50 YEAR OF SERVICE.
(a) The length of service of a Regular Part-Time Employee shall be
computed under the following rules of this Paragraph (a):
(i) Except to the extent the Company shall expressly determine
otherwise or as expressly provided otherwise in this Plan, an
Employee shall not receive credit for his/her Hours of Service
completed with an Affiliated Company or any operating unit or
entity employing him/her prior to the date on or as of which such
company, unit or entity becomes part of or is acquired by the
Company or an Affiliated Company. For periods of service prior to
the date on which the Employee becomes a Participant, the
Employee will be deemed to have completed a "Year of Service" if
he/she completes one thousand (1,000) or more Hours of Service
during the relevant Computation Period; provided, however, that
as of the Effective Date, a Regular Part-Time Employee shall be
credited with Years of Service equal to the number of Years of
Service earned through December 31, 1992 using the Computation
Periods specified in Section 2.16 (b).
(ii) For periods of service on or after the date on which the
Employee becomes a Participant, the Employee will receive credit
for the elapsed period of time between the date on which he/she
became a Participant and the date on which his/her employment is
terminated.
(b) A Regular Full-Time Employee shall receive credit for the elapsed
period of time between his/her Employment Commencement Date (or
Reemployment Commencement Date) and the date on which his/her
Employment Commencement Date (or Reemployment Commencement Date) and
the date on which his/her employment is terminated.
(c) If the employment of (i) a Regular Full-Time Employee or (ii) a
Regular Part-Time Employee who has become a Participant is terminated
by reason of a quit, discharge, or retirement during an absence from
work of twelve months or less for any reason other than a quit,
discharge, retirement, or death, and the Employee performs an Hour of
Service within twelve (12) months of the date on which the Employee
was first absent from work, he/she shall be treated as if no
termination had occurred.
(d) For all purposes of this Plan, the period of service of any
Employee who has become a Participant and subsequently incurs a Break
in Service shall be determined by aggregating all separate periods of
service separated by a Break in Service. The period of service of any
Employee who has not become a Participant, does not have to his credit
three Years of Service, and incurs one or more Breaks in Service shall
be determined by disregarding all service before such Break(s) if the
number of consecutive Breaks in Service equals or exceeds the greater
of: five (5) or the Employee's total number of Years of Service before
his Break(s).
(e) An Employee shall be credited with his Years of Service with an
Affiliated Company, but only to the extent that such service would
have been credited under the rules set forth in this Section 2.50.
Notwithstanding the foregoing, unless the Company shall provide by
resolution of its Board of Directors, an Employee shall not receive
credit for his Years of Service with an Affiliated Company for any
period of employment with an Affiliated Company prior to such entity
becoming an Affiliated Company. Effective for any individual who
became an Employee as of the date Lucky Stores Company was acquired by
the Company, such Employee shall be credited with his/her years of
service with Lucky Stores Company for all purposes under this Plan for
the period of employment prior to such acquisition to the extent that
such service would have been credited under the rules set forth in
this Section 2.50.
(f) For any individual who is an Employee on January 1, 1985, his/her
Years of Service shall be the length of his/her service, as determined
under the tax-qualified retirement plan maintained by the Company in
which the individual participated immediately prior to that date.
(g) A Participant's years of participation in the Plan shall be
measured on the basis of the elapsed period of time between his/her
Eligibility Date and the date on which his/her employment is
terminated, taking into account all periods of service as provided in
Paragraph (d) and disregarding absences of less than twelve (12)
months as provided in Paragraph (c).
<PAGE>
ARTICLE III
ELIGIBILITY AND PARTICIPATION
3.1 PARTICIPATION.
(a) Each Eligible Employee shall become eligible to participate in the
Plan upon the day ("Eligibility Date") coincident with the earlier of:
(i) The completion of two Years of Service; or
(ii) Attainment of the later of age twenty-one (21) or completion
of one (1) Year of Service.
(b) If an Eligible Employee's employment with the Company terminates
(i) after satisfaction of the requirements of Paragraph (a) above but
prior to his/her Eligibility Date, or (ii) after the Employee has
become a Participant in the Plan, the Employee shall become eligible
to participate in the Plan immediately upon his/her Reemployment
Commencement Date.
3.2 PARTICIPANTS IN PRIOR PLANS.
Any Employee who was eligible to participate in the Jewel Companies
Retirement Estates, the Jewel Supplementary Retirement Estates, the
American Stores Company Retirement Plan, or the American Stores
Company Employees' Thrift Plan on December 31, 1984, shall
automatically be eligible to participate in the Plan on January 1,
1985, provided he/she is an Eligible Employee on that date.
<PAGE>
ARTICLE IV
PARTICIPANT CONTRIBUTIONS
4.1 ELECTION.
(a) Each Eligible Employee may elect to defer the receipt of a portion
of his/her Compensation and to have the deferred amount contributed
directly by the Company out of its current or accumulated profits for
the fiscal year ending within that Plan Year to the Plan as Tax
Deferred Contributions. Tax Deferred Contributions may be made only by
means of payroll deduction.
(b) Each Eligible Employee may elect to contribute to the Plan a
portion of his/her Compensation as Taxed Contributions. Taxed
Contributions may be made by means of either payroll deduction or lump
sum contributions. Lump sum contributions will be allocated for all
purposes of this Plan to the Plan Year in which received.
(c) The Committee shall prescribe such procedures, either in writing
or in practice, as it deems necessary or appropriate for each
Participant and each Eligible Employee who will become a Participant
to make Contributions pursuant to this Article IV.
4.2 AMOUNT SUBJECT TO ELECTION.
(a) Each Participant who is an Eligible Employee may elect to
contribute a whole percentage of his/her Compensation to the Plan as
Tax Deferred Contributions not to exceed twelve percent (12%).
Notwithstanding the foregoing, no Participant shall be permitted to
make Tax Deferred Contributions to the Plan during any calendar year
in excess of Seven Thousand Dollars ($7,000), or such larger amount as
may be determined by the Secretary of the Treasury pursuant to Code
Section 402(g)(2), or which exceed the limitations set forth in
Section 4.3.
(b) Each Participant who is an Eligible Employee may elect to
contribute a whole percentage of his/her Compensation to the Plan as
Taxed Contributions not to exceed sixteen percent (16%), reduced by
the amount of his/her Tax Deferred Contributions. Notwithstanding the
foregoing, no Participant shall be permitted to make Taxed
Contributions to the Plan during any Plan Year which exceed the
limitations set forth in Section 4.6.
(c) The Committee shall prescribe such procedures, either in writing
or in practice, as it deems necessary or appropriate regarding the
maximum amount that a Participant may elect to defer and the timing of
such an election. These procedures shall apply to all individuals
eligible to make an election described in Section 4.1. The Committee
may, at any time during a Plan Year, require the suspension,
reduction, or recharacterization of Tax Deferred Contributions of any
Highly Compensated Participant (as defined in Section 4.3(b)(ii)) such
that the limitations of Section 4.2(a) and (b) are satisfied.
(d) Notwithstanding anything to the contrary in this Section 4.2, a
Participant who ceases to be an Eligible Employee due to termination
of employment (i) after age fifty-seven (57), (ii) by reason of his
death or disability, or (iii) by reason of the sale or transfer of a
unit or operation of the Company or an Affiliated Company to a third
party which is not affiliated in any manner with the Company or an
Affiliated Company, or (iv) by reason of the discontinuance of a unit
or operation of the Company or an Affiliated Company, and who receives
Compensation in the Plan Year of such termination, but after the date
of such termination, for services rendered prior to the date of such
termination may elect to contribute amounts from such Compensation
subject to the limitations prescribed in Paragraphs (a), (b) and (c)
above.
4.3 LIMITATION ON COMPENSATION DEFERRALS.
With respect to each Plan Year, Compensation Deferral Contributions by
a Participant for the Plan Year shall not exceed the limitation on
contributions by or on behalf of Highly Compensated Participants under
Section 401(k) of the Code, as provided in this Section. In the event that
Compensation Deferral Contributions under this Plan by or on behalf of
Highly Compensated Participants exceed the limitations of this Section for
any reason, either such excess contributions shall be recharacterized as
Taxed Contributions or such excess contributions, adjusted for any income
or loss allocable thereto, shall be returned to the Participant, as
provided in Section 4.5.
(a) The Compensation Deferral Contributions by Participants for a Plan
Year shall satisfy the Actual Deferral Percentage Test set forth in
(i) below, or, to the extent not precluded by applicable regulations,
the alternative Actual Deferral Percentage test set forth in (ii)
below:
(i) The average Actual Deferral Percentage for the Highly
Compensated Participants shall not be more than the average
Actual Deferral Percentage of all other Participants multiplied
by 1.25, or
(ii) The excess of the average Actual Deferral Percentage for the
Highly Compensated Participants over the average Actual Deferral
Percentage for all other Participants shall not be more than two
(2) percentage points (or such lesser percentage as the Secretary
of the Treasury shall prescribe to prevent the multiple use of
the alternative limitation set forth in this Section 4.3(a)(ii)
with respect to any Highly Compensated Participants), and the
average Actual Deferral Percentage for the Highly Compensated
Participants shall not be more than the average Actual Deferral
Percentage of all other Participants multiplied by 2.0.
(iii) In the event the test under (i) above cannot be satisfied,
the Committee shall determine if the use of the alternative test
under (ii) above is available under regulations relating to the
multiple use of the alternative limitation, as prescribed by the
Secretary of the Treasury under Code Section 401(m)(2)(A). If the
Committee determines that the alternative test is not available,
either the Actual Deferral Percentage or the Average Contribution
Percentage (as defined in Section 4.6) for Highly Compensated
Participants eligible to participate in this Plan and a plan of
the Company or an Affiliated Company that is subject to the
limitations of Section 401(k) and (m) of the Code, including, if
applicable, this Plan, shall be reduced in accordance with, and
to the extent necessary to satisfy, the requirements of
regulations issued under Code Section 401(m).
(b) For the purposes of the limitations of this Article IV, the
following definitions shall apply:
(i) "Actual Deferral Percentage" shall mean, with respect to the
group of Highly Compensated Participants and the group of all
other Participants for a Plan Year, the ratio, calculated
separately for each Participant in such group, of the amount of
the Participant's Compensation Deferral Contribution for such
Plan Year, to such Participant's Compensation for such Plan Year,
in accordance with regulations prescribed by the Secretary of the
Treasury under Code Section 401(k). To the extent determined by
the Committee and in accordance with regulations issued by the
Secretary of the Treasury, qualified nonelective contributions on
behalf of a Participant that satisfy the requirements of Code
Section 401(k)(3)(D)(ii) may also be taken into account for the
purpose of determining the Actual Deferral Percentage of such
Participant.
(ii) "Highly Compensated Participant" shall mean for any Plan
Year any Participant who is a Highly Compensated Employee.
(iii) "Participant" shall mean any Eligible Employee who
satisfied the requirements under Section 3.1 during the Plan
Year, whether or not such Eligible Employee has elected to
contribute to the Plan for such Plan Year.
(iv) "Compensation Deferral Contributions" shall mean amounts
contributed to the Plan by a Participant as Tax Deferred
Contributions pursuant to Section 4.2(a), including excess Tax
Deferred Contributions, and may include, at the election of the
Company, any Company Contributions which meet the requirements
for such inclusion under Code Section 401(k)(3)(D).
(c) In the event that as of the last day of a Plan Year this Plan
satisfies the requirements of Section 401(a)(4) or 410(b) of the Code
only if aggregated with one or more other plans which include
arrangements under Code Section 401(k), then this Section 4.3 shall be
applied by determining the Actual Deferral Percentages of Participants
as if all such plans were a single plan in accordance with regulations
prescribed by the Secretary of the Treasury under Section 401(k) of
the Code.
(d) For purposes of this Section 4.3, the "Actual Deferral Percentage"
for any Highly Compensated Participant who is a Participant under two
or more Code Section 401(k) arrangements of the Company shall be
determined by taking into account the Highly Compensated Participant's
compensation under each such arrangement and contributions under each
such arrangement which qualify for treatment under Code Section
401(k), in accordance with regulations prescribed by the Secretary of
the Treasury under Section 401(k) of the Code.
(e) For purposes of determining the Actual Deferral Percentage of a
Highly compensated Participant, the Compensation Deferral Contribution
and Compensation of such Highly Compensated Participant shall include
the Compensation Deferral Contribution and Compensation of "family
members", as such individuals are described in Section 414(q)(6)(B) of
the Code, and such "family members" shall be disregarded in
determining the Actual Deferral Percentage for Participants who are
not Highly Compensated Participants.
(f) The determination and treatment of Compensation Deferral
Contributions and the Actual Deferral Percentage of any Participant
shall satisfy such other requirements as may be prescribed by the
Secretary of the Treasury.
(g) The Committee shall keep or cause to have kept such records as are
necessary to demonstrate that the Plan satisfies the requirements of
Code Section 401(k) and (m) and the regulations thereunder, in
accordance with regulations prescribed by the Secretary of the
Treasury.
(h) Notwithstanding the foregoing, the Actual Deferred percentage test
shall be applied separately to the portion of the Plan which covers
Eligible Employees who are not represented in employment by a labor
organization, and, for Plan Years beginning on or after January 1,
1993, shall be applied separately to each portion of the Plan covering
a group of Eligible Employees who are represented in employment by a
labor organization pursuant to a separate collective bargaining
agreement; provided, however, the Company may elect to treat two or
more separate collective bargaining units as a single collective
bargaining unit in accordance with Proposed Income Tax Regulation
Section 1.401(k)-1(g)(11)(iii).
4.4 PROVISIONS FOR RETURN OF EXCESS TAX DEFERRED CONTRIBUTIONS OVER
$7,000.
(a) In the event that due to error or otherwise, an amount of a
Participant's Compensation in excess of the $7,000 limitation (after
application of any necessary adjustment) described in Section 4.2(a)
is deferred under this Plan in any calendar year pursuant to such
Participant's Compensation deferral agreement (but without regard to
amounts deferred under any other plan), the excess Tax Deferred
Contributions, if any, together with income allocable to such amount
shall be returned to the Participant (after withholding applicable
federal, state and local taxes due on such amounts) on or before the
first April 15 following the close of the calendar year in which such
excess contribution is made; provided, however, if there is a loss
allocable to the excess Tax Deferred Contributions, the amount
distributed shall be the amount of the excess as adjusted to reflect
such loss. Any Company Contributions allocated to the Participant's
Sharing Contributions pursuant to Section 6.3(b) which are
attributable to any excess Tax Deferred Contributions by a
Participant, and any income or loss allocable to such Company
Contributions, shall either be returned to the Company or applied to
reduce future Company Contributions by the Company.
(b) The amount of income or loss attributable to any excess Tax
Deferred Contributions described in Paragraph (a) above shall be equal
to the income or loss allocable to the Participant's Tax Deferred
Contributions Account for the Plan Year multiplied by a fraction, the
numerator of which is the excess Tax Deferred Contributions as
Determined under Paragraph (a) above, and the denominator of which is
the balance of the Participant's Tax Deferred Contributions Account as
of the last day of the Plan Year, reduced by income allocable to such
Account and increased by losses allocable to such Account during the
Plan Year.
(c) In accordance with procedures as may be established, either in
writing or in practice, by the Committee, not later than March 1 of a
calendar year a Participant may submit a claim to the Committee in
which he certifies in writing the specific amount of his Tax Deferred
Contributions for the preceding calendar year which, when added to
amounts deferred for such calendar year under other plans or
arrangements described in Section 401(k), 408(k) or 403(b) of the
Code, will cause the Participant to exceed the $7,000 limitation as
described in Section 4.2(a) for such preceding calendar year.
Notwithstanding the amount of the Participant's Tax Deferred
Contributions under the Plan for such preceding calendar year, the
Committee shall treat the amount specified by the Participant in his
claim as a Tax Deferred Contribution in excess of the $7,000
limitation (after application of any necessary adjustment) for such
calendar year and return it to the Participant in accordance with
Section 4.4(a) above.
(d) Any Tax Deferred Contributions in excess of the $7,000 limitation
(after application of any necessary adjustment) described in Section
4.2(a) which are distributed to a Participant in accordance with this
Section, shall to the extent required by regulations issued by the
Secretary of the Treasury be treated as Annual Additions under Article
XIII for the Plan Year for which the excess Tax Deferred Contributions
were made.
(e) The Committee shall not be liable to any Participant (or his/her
Beneficiary, if applicable), for any losses caused by a mistake in
calculating the amount of any Participant's excess Tax Deferred
Contributions or the income or losses attributable thereto.
4.5 PROVISION FOR RECHARACTERIZATION OR RETURN OF EXCESS DEFERRALS BY
HIGHLY COMPENSATED PARTICIPANTS.
The provisions of this Section 4.5 shall be applied after
implementation of the provisions of Section 4.4.
(a) The Committee shall determine in accordance with the procedures
set forth in Section 4.3, as soon as is reasonably possible following
the close of each Plan Year, the extent (if any) to which deferral
treatment under Code Section 401(k) may not be available for
Compensation Deferral Contributions on behalf of any Highly
Compensated Participants. If, pursuant to these determinations by the
Committee, a Highly Compensated Participant's Compensation Deferral
Contributions are not eligible for tax deferral treatment then, as
determined by the Committee, either (1) any excess Compensation
Deferral Contributions shall be recharacterized as Taxed Contributions
in accordance with regulations issued under Code Section 401(k), or
(2) any excess Compensation Deferral Contributions together with any
income or loss allocable thereto shall be returned to the Highly
Compensated Participant (after withholding applicable federal, state
and local taxes due on such amounts). Such return or
recharacterization shall be made within the first two and one-half
(2-1/2) months following the close of the Plan Year for which such
excess deferrals were made, provided, however, that if any excess
deferrals and income or loss allocable thereto are, due to error or
otherwise, not returned by such date, such amounts as are required to
be returned shall be returned not later than the end of the first Plan
Year following the Plan Year for which such excess deferrals where
made.
(b) For purposes of satisfying the Actual Deferral Percentage test of
Section 4.3(a), the amount of any excess Compensation Deferral
Contributions by a Highly Compensated Participant shall be determined
by the Committee by application of the leveling method set forth in
regulations prescribed by the Secretary of the Treasury under Section
401(k) of the Code.
(c) The amount of income or loss attributable to any excess
Compensation Deferral Contributions by a Highly Compensated
Participant for a Plan Year shall be equal to the income or loss
allocable to the Highly Compensated Participant's Compensation
Deferral Contribution Accounts for the Plan Year multiplied by a
fraction, the numerator of which is the excess Compensation Deferral
Contribution as determined under Section 4.3, and the denominator of
which is the balance of the Highly Compensated Participant's
Compensation Deferral Contribution Accounts as of the last day of the
Plan Year reduced by income allocable to such Accounts and increased
by losses allocable to such Accounts during the Plan Year.
(d) For the purpose of this Section 4.5, "Compensation Deferral
Contribution Accounts" shall mean the Participant's Tax Deferred
Contributions Account and shall mean any other accounts of the
Participant to which Company Contributions have been allocated where
such Company Contributions have been included as Compensation Deferral
Contributions pursuant to Section 4.3(b)(iv).
(e) For purposes of this Section, the amount of Compensation Deferral
Contributions by a Participant who is not a Highly Compensated
Participant for a Plan Year shall be reduced by any Tax Deferred
Contributions which have been distributed to the Participant under
Section 4.4, in accordance with regulations prescribed by the
Secretary of the Treasury under Section 401(k) of the Code.
(f) In the event that the Committee determines that an amount to be
deferred pursuant to the Compensation deferral agreement provided in
Section 4.1 would cause the Company contributions under this and any
other tax-qualified retirement plan maintained by the Company to
exceed the applicable deduction limitations contained in Code Section
404, or to exceed the maximum Annual Addition determined in accordance
with Article XIII, the Committee may treat such amount in accordance
with the rules set forth above in Section 4.5(a).
(g) The Committee shall not be liable to any Participant (or his/her
Beneficiary, if applicable) for any losses caused by a mistake in
calculating the amount of any Participant's excess Compensation
Deferral Contribution or the income or losses attributable thereto.
(h) To the extent required by regulations under Section 401(k) or 415
of the Code, any excess Compensation Deferral Contributions with
respect to a Highly Compensated Participant shall be treated as Annual
Additions under Article XIII for the Plan Year for which the excess
Compensation Deferral Contributions were made, notwithstanding the
distribution of such excess in accordance with the provisions of this
Section.
4.6 LIMITATIONS ON TAXED CONTRIBUTIONS AND COMPANY CONTRIBUTIONS.
With respect to each Plan Year, Taxed Contributions and Company Match
on Contributions under the Plan for the Plan Year shall not exceed the
limitations by or on behalf of Highly Compensated Participants under
Section 401(m) of the Code, as provided in this Section. In the event that
Taxed Contributions and Company Match on Contributions under this Plan by
or on behalf of Highly Compensated Participants for any Plan Year exceed
the limitations of this Section for any reason, such excess Taxed
Contributions and Company Match on Contributions and any income or loss
allocable thereto shall be disposed of in accordance with Section 4.7.
(a) The Taxed Contributions by Participants and Company Match on
Contributions on behalf of Participants for a Plan Year shall satisfy
the Average Contribution Percentage test set forth in (i) below, or to
the extent not precluded by applicable regulations, the alternative
Average Contribution Percentage test set forth in (ii) below:
(i) The "Average Contribution Percentage" for the Highly
Compensated Participants shall not be more than the Average
Contribution Percentage of all other Participants multiplied by
1.25, or
(ii) The excess of the Average Contribution Percentage for the
Highly Compensated Participant over the Average Contribution
Percentage for all other Participants shall not be more than two
(2) percentage points (or such lesser percentage as the Secretary
of the Treasury shall prescribe to prevent the multiple use of
the alternative limitation set forth in this Section 4.6(a)(ii)
with respect to any Highly Compensated Participant), and the
Average Contribution Percentage of the Highly Compensated
Participant shall not be more than the Average Contribution
Percentage of all other Participants multiplied by 2.0.
(iii) In the event the test under (i) above cannot be satisfied,
the Committee shall determine if the use of the alternative test
under (ii) above is available under regulations relating to the
multiple use of the alternative limitation, as prescribed by the
Secretary of the Treasury under Code Section 401(m)(2)(A). If the
Committee determines that the alternative test is not available,
either the Actual Deferral Percentage or the Average Contribution
Percentage for Highly Compensated Participants eligible to
participate in this Plan and a plan of the Company or an
Affiliate Company that is subject to the limitation of Sections
401(k) and (m) of the Code, including, if applicable, this Plan,
shall be reduced in accordance with, and to the extent necessary
to satisfy, the requirements of treasury regulations under Code
Section 401(m).
(b) For purposes of Section 4.6 and 4.7, the following definitions
shall apply:
(i) "Average Contribution Percentage" shall mean, with respect to
a group of Participants for a Plan Year, the average of the
"Contribution Percentage" in such group. The "Contribution
Percentage" for any Participant is determined by dividing the sum
of the Participant's Taxed Contributions and Company Match on
Contributions under the Plan on behalf of such Participant for
such Plan Year by such Participant's Compensation for the Plan
Year in accordance with regulations prescribed by the Secretary
of the Treasury under Code Section 401(m). To the extent
determined by the Committee and in accordance with regulations
issued by the Secretary of the Treasury under Code Section
401(m)(3), Tax Deferred Contributions and any qualified
nonelective contributions, within the meaning of Code Section
401(m)(4)(C) on behalf of a Participant may also be taken into
account for purposes of calculating the Contribution Percentage
of a Participant, but shall not otherwise be taken into account.
However, if any Company Contributions are taken into account for
purposes of determining Actual Deferral Percentages under Section
4.3 then such Company Contributions shall not be taken into
account under this Section 4.6.
(ii) "Highly Compensated Participant" shall mean for any Plan
Year any Participant who is a Highly Compensated Employee.
(iii) "Participant" shall mean any Eligible Employee who
satisfied the requirements under Section 3.1 during the Plan Year
whether or not such Eligible Employee has elected to contribute
to the Plan for such Plan Year.
(iv) "Company Match on Contributions" shall mean the Company
Contributions allocated to a Participant's Company Match on
Contributions Account pursuant to Section 6.3(b) of the Plan.
(c) For the purposes of this Section 4.6, if two or more plans
described in Code Section 401(a) are considered one plan for the
purposes of Section 401(a)(4) or 410(b), the Contribution Percentages
of Participants shall be treated as made under one plan.
(d) For the purposes of this Section 4.6, the Contribution Percentage
for any Participant who is a Highly Compensated Participant under two
or more plans qualified under Code Section 401(a) of the Company or an
Affiliated Company shall to the extent required by Code Section
401(m), be determined by taking into account the Participant after-tax
voluntary contributions and Company matching contributions for such
Participant under each of such plans.
(e) For purposes of determining the Contribution Percentage of a
Participant who is a Highly Compensated Participant, the Taxed
Contributions, Company Match on Contributions and Compensation of such
Participant shall include the voluntary contributions, Company Match
on Contributions and Compensation of "family members", as such
individuals are described in Section 414(q)(6)(B) of the Code and such
"family members" shall be disregarded in determining the Contribution
Percentage for Participants who are not Highly Compensated
Participants.
(f) The determination and treatment of the Contribution Percentage of
any Participant shall satisfy such other requirements as may be
prescribed by the Secretary of the Treasury.
(g) The Committee shall keep or cause to have kept such records as are
necessary to demonstrate that the Plan satisfied the requirements of
the Code Section 401(m) and the regulations thereunder, in accordance
with regulations prescribed by the Secretary of the Treasury.
(h) Notwithstanding the general Effective Date of this Plan, the
provisions of this Section 4.6 shall be effective January 1, 1987.
4.7 PROVISION FOR DISPOSITION OF EXCESS TAXED CONTRIBUTIONS OR COMPANY
MATCH ON CONTRIBUTIONS ON BEHALF OF HIGHLY COMPENSATED PARTICIPANTS.
After application of the provisions of Section 4.4 and 4.5, the
following provisions shall be implemented:
(a) The Committee shall determine, as soon as is reasonably possible
following the close of each Plan Year, the extent (if any) to which
contributions by or on behalf of Highly Compensated Participants may
cause the plan to exceed the limitations of Section 4.6 for such Plan
Year. If, pursuant to the determination by the Committee and as
required by the leveling method described in subsection (b) below,
contributions by or on behalf of a Highly Compensated Participant may
cause the Plan to exceed such limitations, then the Committee shall
take the following steps:
(i) First, any excess Taxed Contributions that were not matched
by Company Match on Contributions, together with income or loss
allocable to such amount (determined in accordance with (c)
below) shall be returned to the Highly Compensated Participant.
(ii) Second, if any excess remains after the provisions of (i)
above are applied, to the extent necessary to eliminate the
excess, Company Match on Contributions on Tax Deferred Deposits
by Highly Compensated Participants returned pursuant to Section
4.4 or 4.5, and any income or loss allocable thereto, shall
either be distributed (if non-forfeitable) to the Highly
Compensated Participant or forfeited (to the extent forfeitable
under the Plan).
(iii) Third, if any excess remains after the provisions of (i)
and (ii) above are applied, to the extent necessary to eliminate
the excess, Company Match on Contributions on Taxed Contributions
by Highly Compensated Participants, any corresponding matched
Taxed Contributions, and any income or loss allocable thereto,
shall either be distributed (if non-forfeitable) to the Highly
Compensated Participant or forfeited (to the extent forfeitable
under the Plan), on a pro rata basis.
(iv) Fourth, if any excess remains after the provisions of (i),
(ii) and (iii) above are applied, to the extent necessary to
eliminate the excess, Company Match on Contributions on Tax
Deferred Contributions by Highly Compensated Participants not
returned pursuant to Section 4.4 or 4.5, and any income or loss
allocable thereto, shall either be distributed (if
non-forfeitable) to the Highly Compensated Participant or
forfeited (to the extent forfeitable under the Plan).
(v) Amounts of excess Company Match on Contributions forfeited by
Highly Compensated Participants under this Section 4.7, including
any income or loss allocable thereto, shall be applied to reduce
Company Match on Contributions by the Company or the Affiliated
Company that made the Matching Contribution on behalf of the
Highly Compensated Participant for the Plan Year for which the
excess contribution was made.
(vi) If administratively feasible, any amounts distributed
pursuant to Subparagraphs (i), (ii), (iii) and (iv) shall be
returned within two and one-half (2-1/2) months following the
close of the Plan Year for which such excess Taxed Contributions
or Company Match on Contributions were made, but in any event no
later than the end of the first Plan Year following the Plan Year
for which the excess Taxed Contributions or Company Match on
Contributions were made. Any distribution or forfeiture of excess
Taxed Contributions and Company Match on Contributions for any
Plan Year shall be made on the basis of the respective portions
of such excess Taxed Contributions and Company Match on
Contributions attributable to each Highly Compensated
Participant.
(b) For purposes of satisfying the Average Contribution Percentage
test, the amount of any excess Taxed Contributions or Company Match on
Contributions by or on behalf of Highly Compensated Participants for a
Plan Year under Section 4.6 shall be determined by the Committee using
the leveling method set forth in regulations prescribed by the
Secretary of the Treasury under Section 401(m) of the Code.
(c) The amount of income or loss attributable to any excess Taxed
Contributions or Company Match on Contributions, as determined under
Paragraph (b) above, (the "Excess Aggregate Contribution"), by a
Highly Compensated Participant for a Plan Year shall be equal to the
income or loss allocable to the Highly Compensated Participant's
Excess Aggregate Contribution Accounts for the Plan Year multiplied by
a fraction, the numerator of which is the Excess Aggregate
Contribution and the denominator of which is the sum of the balance of
the Highly Compensated Participant's Excess Aggregate Contribution
Accounts as of the last day of the Plan Year reduced by income
allocable to such Accounts and increased by losses allocable to such
Accounts during the Plan Year.
(d) For the purpose of this Section 4.7, "Excess Aggregate
Contribution Accounts" shall mean the Participant's Taxed
Contributions Account and the Company Match on Contributions Account.
(e) Any excess Taxed Contributions and/or Company Match on
Contributions distributed to a Highly Compensated Participant or
forfeited by a Highly Compensated Participant in accordance with this
Section 4.7, shall to the extent required by regulations issued by the
Secretary of the Treasury, be treated as Annual Additions under
Section 2.5 for the Plan Year for which the excess contribution was
made.
(f) The Committee shall not be liable to any Participant (or his/her
Beneficiary, if applicable), for any losses caused by a mistake in
calculating the amount of any Excess Aggregate Contributions by or on
behalf of a Highly Compensated Participant and the income or loss
allocable thereto.
(g) Notwithstanding the general Effective Date of this Plan, the
provisions of this Section 4.7 shall be effective January 1, 1987.
4.8 TERMINATION OF, CHANGE IN RATE OF, OR RESUMPTION OF DEFERRALS.
(a) A Participant may elect to change the rate or form of investment
of Tax Deferred Contributions or Taxed Contributions at any time. Any
such change shall be effective as soon as practicable following any
such election, but normally not later than the first day of the second
payroll period following the date such election is made.
Notwithstanding the foregoing, a Participant shall change the rate of
his Tax Deferred or Taxed Contributions as may be required pursuant to
Section 4.2.
(b) Except as provided in Section 4.2(d), the right of a Participant
to make Contributions shall cease upon termination of employment by
the Company. A Participant who is on a Leave of Absence, however, may
continue to make Contributions during such period.
4.9 CHARACTER OF CONTRIBUTIONS.
Tax Deferred Contributions shall be treated as Company Contributions
for purposes of Code Sections 401(k) and 414(h). Taxed Contributions shall
not constitute "qualified voluntary employee contributions" under Code
Section 219 (relating to the deductibility of those amounts).
4.10 ROLLOVER CONTRIBUTIONS.
(a) Pursuant to procedures as the Committee may prescribe (either in
writing or in practice), an Eligible Employee may make a Rollover
Contribution to the Plan.
(b) Any Rollover Contribution to the Plan must be made in the form of
cash.
(c) A Rollover Contribution shall not be considered a Participant
Contribution.
(d) A Participant's Rollover Contribution made pursuant to the rules
of this Section 4.10 shall be held in a separate Rollover Contribution
Account for the Employee. This Rollover Contribution Account will not
share in allocations of Company Contributions or Forfeitures under
Section 6.3.
(e) The provisions of this Section 4.10 shall be effective October 1,
1992.
4.11 EFFECTIVE DATE OF ARTICLE IV.
Notwithstanding the general Effective Date of this Plan, the
provisions of this Article IV shall be effective January 1, 1987, except as
otherwise expressly provided herein.
<PAGE>
ARTICLE V
TRUST FUND AND COMPANY CONTRIBUTIONS
5.1 TRUST FUND.
The Company has entered into a Trust Agreement for the establishment
of a Trust to hold the assets of the Plan. The Trustee has agreed to hold
and administer all funds and assets that may be deposited with the Trustee
pursuant to the terms of this Plan.
5.2 COMPANY CONTRIBUTIONS.
The Board of Directors shall contribute an amount on behalf of each
Plan Year determined in its sole discretion. The amount of this
contribution, however, shall not exceed the lesser of (a) the amount of its
Earnings for its fiscal year beginning within that Plan Year, or (b) the
maximum deductible amount determined under Code Section 404.
5.3 FORM OF COMPANY CONTRIBUTIONS.
The Company's contributions to the Trust Fund shall be paid in cash or
Company Stock as the Company may from time to time determine.
5.4 INVESTMENT OF TRUST ASSETS.
(a) The manner in which assets of the Trust will be invested shall be
chosen by the Committee at its discretion, although the Committee may
delegate the management to one or more Investment Managers appointed
pursuant to Section 9.3.
(b) The Committee may establish separate Investment Funds under the
Plan, with each fund representing an investment alternative available
to Participants and Eligible Employees for the investment of their
Accounts as provided in Sections 5.4(c) and (d) below. Each
Participant and Eligible Employee shall have a subaccount under the
Plan corresponding to such individual's interest, if any, which is
allocated to each Investment Fund. Each such subaccount shall be
measured in Fund Units. The Committee may, at its discretion,
establish alternative Investment Funds or eliminate any previously
established funds, including but not limited to the following types of
Investment Funds:
(i) The Regular (Balanced) Fund consisting of stocks, bonds, real
estate, and other securities including obligations of the United
States Government and its agencies and short-term liquid
investments;
(ii) The Fixed Income Fund consisting of bonds and other
securities including obligations of the United States Government
and its agencies and short-term liquid investments;
(iii) The American Stores Company Common Stock Fund invested in
Company Stock and short-term liquid investments;
(iv) The Safety Fund available exclusively to Participants and
Eligible Employees who are age 50 or older and invested in
short-term fixed income investments and other securities
including obligations of the United States Government and its
agencies and short-term liquid investments; and
(v) The All Equity Fund invested exclusively in stocks and
short-term liquid investments.
Notwithstanding the establishment of separate Investment Funds, the
Plan is authorized for purposes of Section 407 of ERISA to have up to
one hundred percent (100%) of its assets invested in Company Stock,
subject to any directions or action by the Committee or Participants
specified herein.
(c) A Participant may elect the Investment Fund to which his/her Tax
Deferred Contributions or Taxed Contributions are made under the Plan
or may change such elections pursuant to Section 4.8(a). An Eligible
Employee may elect the Investment Fund to which his/her Rollover
Contribution is made under the Plan. Any such elections shall be
limited to the Investment Funds currently offered by the Committee and
currently available pursuant to Paragraph (b) above. A Participant or
Eligible Employee, as applicable, shall effect any such elections in
the manner prescribed by the Committee.
(d) Company Contributions allocated to a Participant's Accounts in a
Plan Year shall be invested in the same manner as the most recent
election made by the Participant and on file with the Company for the
Participant's Tax Deferred Contributions and Taxed Contributions
pursuant to Paragraph (c) above. If the Participant has elected to
invest his/her Tax Deferred Contributions and Taxed Contributions in
more than one Investment Fund, Company Contributions shall be
allocated among the Investment Funds in which the Tax Deferred
Contributions and Taxed Contributions of such Participant are invested
in respective percentages determined with respect to each such
Investment Fund equal to the percentage of the sum of such
Participant's Tax Deferred Contributions and Taxed Contributions which
are invested in each such Investment Fund pursuant to his/her election
under Paragraph (c). If a Participant has made no such Contributions,
he/she may direct the investment of such Company Contributions
allocated to his/her Accounts by making an election in the same manner
as provided under Paragraph (c) above. If there is no valid election
on file for such Participant, such Company Contributions for such
Participant shall be invested entirely in the Fixed Income Fund,
unless and until the Participant directs otherwise.
(e) A Participant or Eligible Employee, as applicable, may elect to
exchange up to one hundred percent (100%) of the amounts accrued in
such individual's accounts once every thirty (30) days among any of
the Investment Funds currently offered by the Committee and currently
available to such individual. A Participant or Eligible Employee shall
effect such an exchange in the manner prescribed by the Committee. To
the extent there is insufficient liquidity in the Trust, transactions
described in this Section 5.4(e) may be suspended for a term certain
or queued on a first come-first served basis as such liquidity is
restored.
(f) Amounts invested in any one of the Investment Funds shall not
share in gains and losses experienced by any other fund.
(g) Notwithstanding the establishment of separate Investment Funds
within the Trust, the Trust shall at all times constitute a single
trust.
5.5 AMERICAN STORES COMPANY STOCK FUND.
(a) The American Stores Company Stock Fund ("Stock Fund") shall be
invested in Company Stock and short-term liquid investments in amounts
needed to satisfy the liquidity needs of the Stock Fund for exchanges,
distributions and the exercise of stock rights, warrants or options
issued on Company Stock. The extent to which this fund is invested in
short-term liquid investments shall be as agreed from time to time
between the Committee and the Trustee. The Trustee shall be
responsible to maintain liquidity in the Stock Fund to the extent
agreed upon with the Committee.
(b) In the event any rights, warrants, or options are issued on
Company Stock, the Trustee shall exercise them for the acquisition of
additional Company Stock for the Stock Fund as directed by the
Committee to the extent that cash is then available in the Stock Fund.
(c) Any Company Stock received by the Trustee as a stock split,
dividend, or as a result of a reorganization or other recapitalization
of the Company shall be added to the Stock Fund.
(d) All cash dividends paid to the Trustee with respect to Company
Stock shall be applied by the Trustee to purchase additional shares of
Company Stock for the Stock Fund or shall be used to provide liquidity
for the Stock Fund in accordance with Paragraph (a).
(e) The provisions of this Section 5.5 shall be effective October 1,
1992.
5.6 IRREVOCABILITY.
The Company shall have no right or title to, nor interest in, the
contributions made to the Trust Fund, and no part of the Trust Fund shall
revert to the Company except that on and after January 1, 1989, funds may
be returned to the Company as follows:
(a) In the case of a Company Contribution which is made by a mistake
of fact, at the Company's written request, that contribution may be
returned to the Company within one (1) year after it is made.
(b) All Company Contributions to the Trust are hereby conditioned upon
the Plan satisfying all of the requirements of Code Section 401(a). If
the Plan does not qualify, at the Company's written election, the Plan
may be revoked and all such contributions may be returned to the
Company within one (1) year after the date of Internal Revenue Service
denial of the qualification of the Plan. Upon such a revocation, the
affairs of the Plan and Trust shall be terminated and wound up as the
Company shall direct.
(c) All Company Contributions to the Plan are conditioned upon the
deductibility of those contributions under Code Section 404. To the
extent a deduction is disallowed, at the Company's written request the
contribution may be returned to the Company within one (1) year after
the disallowance.
(d) In the event that the Plan is terminated when there are amounts
remaining in the Suspense Account, the excess funds may revert to the
Company to the extent provided in Section 13.4(i).
5.7 COMPANY, COMMITTEE AND TRUSTEE NOT RESPONSIBLE FOR ADEQUACY OF TRUST
FUND.
(a) The Company, Committee, and the Trustee shall not be liable or
responsible for the adequacy of the Trust Fund to meet and discharge
any or all payments and liabilities hereunder. All Plan benefits will
be paid only from the Trust assets, and neither the Company, the
Committee, nor the Trustee shall have any duty or liability to furnish
the Trust with any funds, securities, or other assets except as
expressly provided in the Plan.
(b) Except as required under the Plan or Trust or under Part 4 of
Subtitle B of Title I of ERISA, the Company shall not be responsible
for any decision, act or omission of the Trustee, the Committee, or
the Investment Manager (if applicable), and shall not be responsible
for the application of any moneys, securities, investments or other
property paid or delivered to the Trustee.
<PAGE>
ARTICLE VI
ACCOUNTS AND ALLOCATIONS
6.1 PARTICIPANTS' ACCOUNTS.
In order to account for the allocated interest of each Participant in
the Trust Fund, there shall be established and maintained for each
Participant (making such form of contribution or as otherwise applicable)
the Accounts enumerated in Section 2.1 hereof.
6.2 ALLOCATION OF AMOUNTS CONTRIBUTED BY PARTICIPANTS.
All Taxed Contributions and Tax Deferred Contributions contributed by
a Participant shall be allocated to the separate Account established and
maintained for the Participant for such form of contributions. Such
contributions shall be paid by the Company to the Trustee as soon as
practicable after such amounts are withheld from the Participant's
paychecks.
6.3 ALLOCATION OF COMPANY CONTRIBUTIONS AND FORFEITURES.
(a) (i) Any Forfeitures occurring during the Plan Year and all
Company Contributions shall first be used to restore the Accounts
of rehired Participants pursuant to the rules of Section 8.4.
(ii) If any Forfeitures remain after application of Subparagraph
(i), such funds shall be allocated to the appropriate Accounts of
Participants to the extent necessary to correct insufficient
allocations made to such Accounts in prior periods discovered
during the Plan Year to which such Forfeitures are attributable.
(iii) Any Company Contributions and Forfeitures which remain
after the application of Subparagraphs (i) and (ii) above shall
be allocated in accordance with the following provisions of this
Section 6.3.
(b) Twenty-five percent (25%) of the Company's remaining contribution
determined under the rules of Section 5.2 and the remaining
Forfeitures shall be allocated in accordance with the rules of this
Paragraph (b).
(i) This amount shall be allocated to the Company Match on
Contributions Account of each Participant who made Sharing
Contributions (whether Tax Deferred Contributions or Taxed
Contributions) during the Plan Year. The portion of the total
amount that will be allocated to the Account of a Participant
will be the same ratio as the amount of the Participant's Sharing
Contributions during the Plan Year (which have not been withdrawn
by the Participant pursuant to Section 8.1 or returned pursuant
to Section 4.4, 4.5, or 4.7), bear to the total amount of all
such Sharing Contributions of all Participants.
(ii) A Participant who is an Eligible Employee and who is on a
Disability Leave of Absence for any Plan year or portion thereof
shall be deemed to have made Sharing Contributions equal to the
greater of: (A) any Sharing Contributions actually made by the
Participant during the Plan Year; or (B) the amount of any
Sharing Contributions made by the Participant during the Plan
Year immediately preceding the Plan Year in which the Disability
began. However, in no event shall a Participant be considered to
have made Sharing Contributions pursuant to this Subparagraph
(ii) in an amount greater than six percent (6%) of his/her deemed
Compensation as determined under Section 6.3(c)(iii) below.
(c) Seventy-five percent (75%) of the Company's remaining contribution
determined under the rules of Section 5.2 and the remaining
Forfeitures shall be allocated in accordance with the rules of this
Paragraph (c). This amount shall be allocated to the Company
Contribution on Pay Account or, in the case of a Participant on a
Disability Leave of Absence on or after October 1, 1992, the Company
Contribution on Pay (Fully Vested) Account, of each eligible
Participant, whether or not he/she made any Sharing Contributions for
that Plan Year.
(i) First, a portion of this amount shall be allocated to the
appropriate Account, as indicated above, of each Participant who
received Noncovered Compensation during the Plan Year while a
Participant and Eligible Employee. The amount that will be
allocated to each such Participant will be determined by
multiplying his/her Noncovered Compensation by the Noncovered
Compensation Percentage. "Noncovered Compensation" shall mean
that portion of a Participant's Compensation received while a
Participant and Eligible Employee which is in excess of the
maximum amount that may be treated as "wages" subject to Social
Security taxes determined as of the beginning of any such Plan
Year. The Noncovered Compensation Percentage shall mean the
greater of 5.7% or the percentage equal to the portion of the
rate of tax under Code Section 3111(a) (in effect as of the
beginning of the Plan Year) which is attributable to old-age
insurance, provided, however, if such Noncovered Compensation
Percentage is greater than the Total Compensation Percentage (as
defined in Subparagraph (c)(ii)), then such Noncovered
Compensation Percentage shall be adjusted pursuant to
Subparagraph (c)(ii).
(ii) Next, the portion of the remaining amount of the Company
Contribution shall be allocated to the appropriate Accounts, as
indicated above, of Participants. Such allocation for each
Participant shall be equal to the Total Compensation Percentage
multiplied by the Participant's Compensation of the Plan Year
received while both a Participant and Eligible Employee. "Total
Compensation Percentage" shall mean the portion of the remaining
amount of the Company Contribution (after application of
Subparagraph (i) above), divided by the total amount of all
Participants' Compensation for the Plan Year received while both
Participants and Eligible Employees. Notwithstanding the
foregoing, should the Noncovered Compensation Percentage be
greater than the Total Compensation Percentage, both such
percentages shall be adjusted such that both equal the following:
(75% of Company Contribution) / (Compensation of all
Participants + Noncovered Compensation of all Participants)
The 75% of the Company Contribution shall then be
reallocated in the same manner as provided in this
Subparagraph (ii) and Subparagraph (i) above, using such
adjusted Noncovered Compensation Percentage and Total
Compensation Percentage.
(iii) Effective January 1, 1991, for purposes of this Paragraph
(c), a Participant who is an Eligible Employee and who is on a
Disability Leave of Absence for any Plan Year or portion thereof,
shall be deemed to have received Compensation (and Noncovered
Compensation, if applicable) in an amount equal to his/her
annualized base salary determined immediately prior to becoming
disabled. Such deemed Compensation shall be reduced by the amount
of any disability benefits taken into account as Compensation.
The Participant will receive such deemed Compensation in whole
year increments for the Plan Year in which he/she became disabled
and for a period (the "Period") commencing with the Plan Year
immediately following the Plan Year in which the Participant
became disabled through the Plan Year prior to the Plan Year in
which the Participant returns to employment from his/her
disability. The Participant's deemed Compensation for such Plan
Year of return shall equal the whole year deemed Compensation
multiplied by a fraction, the numerator of which is the number of
whole months of such Participant's absence for such Year and the
denominator of which is twelve (12). The Period shall not exceed
the number of Years of Service the Participant has accrued at the
beginning of such Period for vesting purposes, except that if the
Participant has ten (10) or more of such Years of Service, the
Period shall continue until the earlier of the date on which the
Participant reaches age fifty-seven (57) or dies.
(iv) The rules of this Paragraph (c) regarding Participants on a
Disability Leave of Absence shall be applied in a manner
consistent with the provisions of Code Section 415(c)(3)(C).
Accordingly, the deemed Compensation rules of Subparagraph (iii)
shall not apply with respect to any Participant who is an
officer, owner, or highly compensated employee, within the
meaning of Code Section 415(c)(3)(C).
(d) Notwithstanding the above, if an "Accrued Contribution" on behalf
of an individual exists for the Plan Year during the period while the
individual was a Participant, the total allocation on behalf of the
Participant (determined under the rules of Paragraphs (b) and (c)
above) shall be reduced (but not below zero) by the Participant's
Accrued Contribution. For the purpose of this Paragraph (d), "Accrued
Contribution" shall mean (i) an obligation by the Company, pursuant to
a collective bargaining agreement, to make a contribution on behalf of
a Participant to another tax-qualified retirement plan during the Plan
Year, and/or (ii) a deemed obligation by the Company to make such a
contribution, pursuant to an agreement between the Participant's
employer and the respective collective bargaining unit which specifies
the amount of such deemed obligation, although no such contribution
was actually made because the Company was not currently required to
contribute to another tax-qualified retirement plan due to the
overfunded status of such plan, even though such Participant continued
to accrue additional benefits under such plan.
(e) Notwithstanding the above, a Participant shall not be entitled to
share in an allocation under Paragraphs (b), (c), or (d) above for a
particular Plan Year unless that Participant is employed by the
Company as an Eligible Employee on the last day of that Plan Year.
However, the rule in the preceding sentence shall not apply to a
Participant who is an Eligible Employee and whose employment with the
Company and all Affiliated Companies is terminated during the Plan
Year (i) after age fifty-seven (57), (ii) by reason of his death or
Disability, (iii) by reason of the sale or transfer of a unit or
operation of the Company or an Affiliated Company to a third party
which is not affiliated in any manner with the Company or an
Affiliated Company, or (iv) by reason of the discontinuance of such
unit or operation. Any such Participant shall be entitled to share in
an allocation under Paragraphs (b), (c), or (d) above for the Plan
Year in which such termination occurs and with respect to all
Compensation actually paid to such Participant while both a
Participant and an Eligible Employee or after termination of
employment in such Plan Year.
(f) The allocations of Company Contributions under this Section 6.3
shall be made after the allocations required by Sections 6.4 and 13.4
have been made.
(g) Notwithstanding the above, if a Participant leaves Eligible
Employee status during a Plan Year but continues to remain an Employee
through the last day of such Plan Year, such Participant shall be
entitled to share in an allocation under Paragraphs (b), (c), or (d)
above based only on the Compensation of such Participant for the
period of time during such Plan Year that such Participant was an
Eligible Employee.
(h) Notwithstanding anything to the contrary in this Section 6.3,
allocations of Company Contributions made pursuant to Paragraph (b) or
(c) above may be adjusted such that allocations to Participants who
are Highly Compensated Employees as compared to allocations to
Participants who are not Highly Compensated Employees when expressed
as a percentage of Compensation may differ in order to satisfy the
requirements of Code Section 410(b) and the regulations thereunder.
6.4 VALUATION OF PARTICIPANTS' ACCOUNTS.
On each Valuation Date, the Trustee shall value the assets of the
Trust on the basis of fair market values. Each separate Investment Fund
shall be valued separately and the net asset value ("NAV") of each
outstanding Fund Unit for each Investment Fund shall be determined. The
valuation and allocation provisions of this Section 6.4 shall be applied
and implemented in accordance with the following rules:
(a) The Trustee shall determine the fair market value of each
Investment Fund as of each Valuation Date, taking into account any
increase or decrease in the market value of the assets of any such
Investment Fund, any dividends, interest or other income received by
such Investment Fund, any loss or expense attributable to Trust
expenses that were not paid by the Company, and any other gains or
losses allocable to such Investment Fund. The net income or loss of
any Investment Fund for any Valuation Date shall not include the
following transactions ("Transactions") made as of such date:
(i) Company or Participant Contributions, Rollover Contributions,
distributions recontributed pursuant to Section 8.4(b),
forfeitures allocated to Participants' Accounts pursuant to
Section 6.3(a)(i) or loan repayments by Participants;
(ii) Distributions, withdrawals, forfeitures of nonvested Account
balances pursuant to Section 8.4(a), or loan disbursements to
Participants under Section 14.3; or
(iii) Exchanges pursuant to Section 5.4(e).
(b) The Trustee shall determine the NAV of each Fund Unit of each
Investment Fund by dividing the fair market value of each such
Investment Fund, determined under Paragraph (a), by the number of Fund
Units outstanding with respect to each such Investment Fund as of such
Valuation Date prior to effecting the purchase or sale of Fund Units,
as applicable, to reflect Transactions made on such Valuation Date.
(c) Following the determination of the NAV for each Fund Unit of each
Investment Fund as of any Valuation Date under Paragraph (b), the
Trustee shall effect the purchase or sale of Fund Units, as
applicable, within each Investment Fund to reflect Transactions made
on such Valuation Date with respect to each such Investment Fund on
the basis of the NAV of the applicable Fund Unit as so determined.
(d) Following the purchase or sale of Fund Units to reflect
Transactions made as of any Valuation Date in each Investment Fund,
the Trustee shall revalue the Accounts and subaccounts (established
pursuant to Section 5.4(b)) of each Participant as of such Valuation
Date so as to reflect any increase or decrease in the number of Fund
Units credited to each such Participant's Accounts and subaccounts and
the value of the Fund Units credited to each such Account and
subaccount.
(e) For purposes of the application of this Section 6.4, the Valuation
Date as of which a Transaction shall be considered made shall be
determined as follows:
(i) Except as provided in Subparagraph (ii), any Transaction
described in Section 6.4(a)(i) shall be considered made as of the
Valuation Date on which the wire transfer to the Trustee of funds
pertaining to such Transaction is effected no later than 4:00
p.m. Eastern Standard Time.
(ii) In the case of a Rollover Contribution by a Participant or a
contribution to the Trust by a Participant effected other than by
payroll deduction for any reason, such Transaction shall be
considered made as of the Valuation Date on which the funds
pertaining to such Transaction are received by the Trustee no
later than 2:00 p.m. Eastern Standard Time.
(iii) Any Transaction described in Section 6.4(a)(ii), other than
forfeitures of nonvested Account balances pursuant to Section
8.4(a), shall be considered made as of the Valuation Date upon
which the request pertaining to such Transaction is made by the
Participant, or if later, the Valuation Date upon which the
request is approved by the Committee or its representative,
provided notice of such request, or approval, as applicable, is
received by the Trustee no later than 4:00 p.m. Eastern Standard
Time on such Valuation Date. A forfeiture described in Section
6.4(a)(ii) shall be considered made as of the same Valuation Date
as of which the distribution of the vested portion of the
Participant's Accounts with respect to which the forfeiture
pertains is considered made.
(iv) Any exchange pursuant to Section 5.4(e) shall be considered
made as of the Valuation Date upon which notice of such
Transaction, delivered in the manner prescribed by the Committee,
is received by the Trustee by 4:00 p.m. Eastern Standard Time.
(v) Any Transaction described in Subparagraphs (i), (ii), (iii)
and (iv) which occurs on a Valuation Date but after the time
specified in any such Subparagraph shall be considered made as of
the next succeeding Valuation Date.
(f) The determination of net income and losses under Section 6.4 shall
be made prior to the allocations required under Sections 6.3 and 13.4,
if any, and prior to the adjustments required under Sections 4.4, 4.5
and 4.7, if any.
6.5 TREATMENT OF ACCOUNTS UPON TERMINATION OF EMPLOYMENT.
Upon a Participant's termination of employment, pending distribution
of the Participant's benefit pursuant to the provisions of Article VIII
below, the Participant's Accounts shall continue to be maintained and
accounted for in accordance with all applicable provisions of this Plan,
including but not limited to the applicable provisions of Sections 6.3 and
6.4 as of any Anniversary Date or other date preceding the distribution of
the Participant's entire benefit under the Plan.
6.6 MISCELLANEOUS VALUATION RULES.
(a) The Committee and the Trustee shall establish such additional
accounting procedures as may be necessary for the purpose of making
the allocations, valuations and adjustments to Participants' Accounts
provided for in this Article VI. From time to time, the Committee and
Trustee may modify such additional accounting procedures for the
purpose of achieving equitable, nondiscriminatory, and
administratively feasible allocations among the Accounts of
Participants in accordance with the general concepts of the Plan and
the provisions of this Article VI.
(b) The Company, the Committee, and the Trustee do not in any manner
or to any extent whatsoever warrant, guarantee or represent that the
value of a Participant's Account shall at any time equal or exceed the
amount previously contributed thereto.
<PAGE>
ARTICLE VII
VESTING IN PLAN ACCOUNTS
7.1 NO VESTED RIGHTS EXCEPT AS HEREIN PROVIDED.
No Participant shall have any vested right or interest to, or any
right of payment of, any assets of the Trust Fund, except as expressly
provided in this Plan. Neither the making of any allocations nor the credit
to any Account of a Participant shall vest in any Participant any right,
title, or interest in or to any assets of the Trust Fund.
7.2 VESTING SCHEDULE.
(a) A Participant's interest in his/her Company Contribution on Pay
Account shall vest in accordance with the following schedule:
Years of Service Vested Percentage
---------------- -----------------
Less than 3 0%
3 but less than 4 30%
4 but less than 5 40%
5 but less than 6 50%
6 but less than 7 60%
7 but less than 8 70%
8 but less than 9 80%
9 but less than 10 90%
10 or more 100%
(b) Notwithstanding the above, for all Plan Years beginning on or
after January 1, 1989, a Participant's interest in his/her Company
Contributions on Pay Account shall vest in accordance with the
following schedule, provided such Participant performs at least one
(1) Hour of Service in any Plan Year beginning on or after January 1,
1989:
Years of Service Vested Percentage
---------------- -----------------
Less than 3 0%
3 but less than 4 30%
4 but less than 5 40%
5 but less than 6 60%
6 but less than 7 80%
7 or more 100%
(c) Notwithstanding the above, a Participant shall become fully vested
in his/her Company Contribution on Pay Account upon the occurrence of
any of the following events, if such Participant is then still an
Employee:
(i) Attainment of age fifty-seven (57);
(ii) Death;
(iii) Adjudication as incompetent by a court having jurisdiction
over such matters; or
(iv) Termination of employment due to a Disability.
7.3 PERMISSIVE VESTING.
Notwithstanding the rules of Section 7.2 above, all Participants who
are affected by a closure or sale of a unit of the Company to an entity
that is not an Affiliated Company which does not constitute a partial
termination under Section 11.5, shall become fully vested in their benefit
under the Plan, unless the Board of Directors has, prior to such closure or
sale, determined otherwise. The account balance credited to the Company
Contribution on Pay Account of each Participant which becomes 100% vested
as a result of the application of this Section 7.3, determined as of the
last day of the Plan Year in which the closure or sale of a unit occurs,
shall be transferred to a Company Contribution on Pay (Fully Vested)
Account to be maintained in the Trust for each such affected Participant.
7.4 VESTING OF PARTICIPANT CONTRIBUTIONS.
A Participant shall at all times have a 100% vested interest in
his/her Tax Deferred Contributions Account, Taxed Contributions Account,
Company Match on Contributions Account, Prior Plans Account and Company
Contribution on Pay (Fully Vested) Account and Rollover Account.
7.5 VESTING DURING LEAVE OF ABSENCE.
Effective October 1, 1992, in the case of a Participant who is on a
Disability Leave of Absence, such Participant shall be 100% vested in all
amounts allocated to such Participant's Company Contribution on Pay (Fully
Vested) Account pursuant to Section 6.3 during such Disability Leave of
Absence and earnings thereon. Prior to October 1, 1992, a Participant to
whom amounts are allocated under Section 6.3 hereof while on Disability
Leave of Absence, shall be 100% vested in such allocated amounts and the
earnings accrued thereon during such Disability Leave of Absence. Earnings
accrued on such amounts after any such Participant recommenced active
employment with the Company and before October 1, 1992, shall be credited
to his/her Company Contribution on Pay Account, subject to the vesting
schedule of Section 7.2 hereof.
<PAGE>
ARTICLE VIII
PAYMENT OF PLAN BENEFITS
8.1 PAYMENT OF BENEFITS.
(a) Subject to the provisions of Section 8.3 and Article XVII, if a
Participant terminates employment for any reason other than death,
such Participant shall receive a distribution of his/her entire vested
interest under the Plan as soon as is reasonably practicable following
such termination of employment. Such distribution shall be made in any
of the following forms, at the election of the Participant:
(i) One lump sum distribution made in cash, except to the extent
any of the vested portion of such Participant's Accounts is
invested in the American Stores Company Common Stock Fund, and
such Participant elects a single lump sum distribution of his
entire vested Account, then such distribution may be made in such
stock at the election of the Participant to the extent so
invested in such stock;
(ii) Two or more equal or unequal cash installment distributions
at specified intervals (subject to the limitations of Section
8.3(c)).
Upon the sale of a subsidiary, as described in Section
401(k)(10)(A)(iii) of the Code, that is an Affiliated Company to an
entity that is not an Affiliated Company, the Committee shall direct
the Trustee to make a distribution of an affected Participant's
distributable benefit in the Trust Fund as if such Participant's
employment had terminated; provided, however, that the portion of such
Participant's distributable benefit that consists of his Tax Deferred
Contributions Account may only be distributed in the form described in
Section 8.1(a)(i) hereof. Prior to January 1, 1993, an affected
Participant shall not be considered to have terminated employment upon
the sale of an entity that is not a subsidiary of an Affiliated
Company. Effective upon the later to occur of (i) January 1, 1993, or
(ii) the date of the transaction, an affected Participant shall be
considered to have terminated employment as a result of the sale of an
entity that is not a subsidiary solely for purposes of receiving
distributions under Section 8.1(a) hereof from Accounts other than
such Participant's Tax Deferred Contributions Account. For purposes of
receiving a distribution from such Participant's Tax Deferred
Contributions Account under Section 8.1(a), an affected Participant
will be considered to have terminated employment only to the extent he
would be considered to have separated from service for purposes of
Code Section 401(k)(2)(B)(i)(I) or any successor provision thereto.
(b) Subject to the provisions of Article XVII, a Participant who is an
Employee may withdraw amounts from his/her Taxed Contributions Account
or Prior Plans Account at any time. Subject to the provisions of
Article XVII, a Participant who is an Employee and who has withdrawn
all amounts from his/her Taxed Contributions Account and Prior Plans
Account may, prior to termination of employment upon incurring a
Hardship as determined by the Committee, withdraw amounts from his/her
Company Match on Contributions Account, Company Contribution on Pay
(Fully Vested) Account, Company Contribution on Pay (Fully Vested)
Account, and Rollover Account; provided that the Participant may only
withdraw amounts from an Account if the Hardship persists and all
amounts in the next previously enumerated Account have been withdrawn.
If the Hardship persists and all amounts from the Accounts enumerated
in the previous sentence have been withdrawn, the Participant who is
an Employee may withdraw amounts from his/her Tax Deferred
Contributions Account (excluding any earnings on such Account earned
after December 31, 1988). Committee determinations on Hardships shall
be made in accordance with the following procedures:
(i) A Hardship distribution shall be made to a Participant only
if the Committee (or its representative) determines that the
Participant has an immediate and heavy financial need and that a
withdrawal from the Plan is necessary in order to satisfy such
need.
(ii) The following situations shall be "deemed" to be immediate
and heavy financial needs:
(1) Medical expenses described in Code Section 213(d)
incurred by the Participant, the Participant's spouse, or
any dependents of the Participant (as defined in Code
Section 152);
(2) The purchase (excluding mortgage payments) of a
principal residence for the Participant only;
(3) Payment of tuition for the next twelve (12) months of
post-secondary education for the Participant, the
Participant's spouse, children, or other dependents;
(4) The need to prevent the eviction of the Participant from
his/her principal residence or foreclosure on the mortgage
of the Participant's principal residence; and
(5) Any other situation deemed an immediate and heavy
financial need by the Internal Revenue Service through the
publication of revenue rulings, notices, and other documents
of general applicability.
(iii) The Committee (or its representative) may determine that a
Participant has incurred an immediate and heavy financial need in
situations other than those listed in (ii) above on the basis of
guidelines determined by the Committee, in its sole discretion,
taking into account all relevant facts and circumstances. A
financial need shall not fail to qualify as immediate and heavy
merely because such need was reasonably foreseeable or
voluntarily incurred by the Participant.
(iv) The determination as to whether a withdrawal from the Plan
is necessary to satisfy an immediate and heavy financial need is
to be made on the basis of all relevant facts and circumstances.
However, a withdrawal from the Plan shall be necessary in order
to satisfy an immediate and heavy financial need only if:
(1) The amount of the withdrawal is not in excess of the
amount required to relieve the financial need or in excess
of the amount that such need could not be satisfied from
other sources that are reasonably available to the
Participant.
(2) The Participant represents to the Committee, in a manner
on which the Committee can reasonably rely, to the extent
that the need cannot be relieved:
(A) Through reimbursement or compensation by insurance
or otherwise;
(B) By reasonable liquidation of the Participant's
assets, to the extent such liquidation would not itself
cause an immediate and heavy financial need;
(C) By cessation of Tax Deferred Contributions or Taxed
Contributions under the Plan; or
(D) By other withdrawals or distributions or nontaxable
(at the time of the loan) loans from any plan
maintained by the Company (including this Plan) or from
any other employer, or by borrowing from commercial
sources on reasonable commercial terms.
(v) A Participant's resources shall be deemed to include those
assets of his/her spouse and minor children that are reasonably
available to the Participant.
(c) Subject to the provisions of Article XVII, in the case of a
Participant who is on a Disability Leave of Absence, such Participant
may receive a distribution from his/her Accounts under the Plan. The
total amount of any such distribution shall not exceed eighty percent
(80%) of the total vested portion of such Participant's Accounts.
(d) Except as provided in Paragraphs (b), (c) and (f), Participants
may not receive a distribution of their benefits under the Plan prior
to termination of employment.
(e) In the event of the death of a Participant, the Participant's
benefit under the Plan (reduced by any security interest held by the
Plan by reason of a loan outstanding to such Participant pursuant to
Section 14.3 and subject to the rights of any person pursuant to a
Qualified Domestic Relations Order as defined in Section 14.2) shall
be distributed to the Participant's Beneficiary designated pursuant to
Section 8.2. Distributions to the Beneficiary pursuant to this
Paragraph (e) shall be in the same form and at the same time as
specified in Paragraph (a) above, as elected by the Beneficiary,
subject to the limitations of Section 8.3 and Article XVII.
(f) A Participant who has attained age 59-1/2 may withdraw all or a
portion of the current balance of his/her Accounts at any time by
submitting a request therefor to the Committee in the manner
prescribed by it, subject to the requirements of Article XVII.
Withdrawal from Accounts shall occur in the following order, with each
enumerated Account to be totally depleted before amounts in the next
enumerated Account may be withdrawn: Taxed Contributions Account,
Prior Plans Account, Company Match on Contributions Account, Company
Contribution on Pay (Fully Vested) Account, Rollover Account, Tax
Deferred Contributions Account, and Company Contribution on Pay
Account.
(g) Notwithstanding the provisions contained in the foregoing
Paragraphs of this Section 8.1, any provision which restricts or would
deny a Participant through the withholding of consent or the exercise
of discretion by some person or persons other than the Participant
(and where relevant, other than the Participant's spouse) of an
alternative form of benefit, in violation of Code Section 411(d)(6)
and the regulations promulgated thereunder, is hereby amended by the
deletion of the consent and/or discretion requirement.
<PAGE>
8.2 DESIGNATION OF BENEFICIARY.
(a) Each Participant or Beneficiary entitled to receive a benefit
under this Article VIII (collectively referred to as a "Distributee")
shall have the right to designate a Beneficiary or Beneficiaries to
receive his/her interest in the Trust Fund in the event of his/her
death before receipt of his/her entire interest in the Trust Fund.
This designation is to be made on the form prescribed by and delivered
to the Committee. In the case of a Participant who is married as of
the date of his/her death, such Participant's Beneficiary shall be
his/her surviving spouse, unless such Participant has designated
another Beneficiary with the written consent of such spouse. Any such
consent must acknowledge the effect of such designation on the rights
of such spouse and must be witnessed by a Plan Representative or a
notary public unless it is established to the satisfaction of a Plan
Representative that such consent may not be obtained because there is
no spouse, because the spouse cannot be located, or such other
circumstances as may be prescribed in regulations under Code Section
417. For purposes of this Paragraph (a), "Plan Representative" shall
mean the person or persons designated by the Committee to perform the
duties specified herein.
(b) If a deceased Participant shall have failed to designate a
Beneficiary, or if the Committee shall be unable to locate a
designated Beneficiary after reasonable efforts have been made, or if
for any reason the designation shall be legally ineffective, or if the
Beneficiary shall have predeceased the Participant, any distribution
required to be made under the provisions of this Plan shall commence
within five (5) years after the Participant's death to the
Participant's estate. However, if the Committee cannot locate a
qualified representative of the deceased Participant's estate, or if
administration of the estate is not otherwise required, the Committee
in its discretion may make the distribution under this subparagraph to
the deceased Participant's heirs at law, determined in accordance with
the law of the State of the Participant's domicile in effect as of the
date of the Participant's death.
(c) The Committee shall prescribe such procedures, either in writing
or in practice, as it deems appropriate to implement the provisions of
this Section 8.2.
8.3 DISTRIBUTION RULES.
Notwithstanding any other provisions of this Article VIII of the Plan
regarding distributions of Participant's Accounts, the following additional
rules shall apply to all such distributions, effective January 1, 1987.
(a) In no event shall any benefits under this Plan, including benefits
upon retirement, termination of employment, or disability, be paid (or
commence to be paid) to a Participant prior to the "Consent Date" (as
defined herein) unless the Participant consents in writing (or on some
electronically recorded device susceptible to written reproduction) to
the payment (or commencement of payment) of such benefits prior to
said Consent Date. As used herein, the term "Consent Date" shall mean
the later of (1) the Participant's 62nd birthday, or (2) the
Participant's Normal Retirement Age. Notwithstanding the foregoing,
the provisions of this paragraph shall not apply (1) following the
Participant's death, or (2) with respect to a lump sum distribution of
the vested portion of a Participant's Account if the total amount of
such vested portion does not exceed $3,500.
(b) Unless a Participant elects otherwise pursuant to Paragraph (a)
above, distributions of the vested portion of a Participant's Accounts
shall commence no later than the 60th day after the close of the Plan
Year in which the latest of the following events occurs: (1) the
Participant's Normal Retirement Age; (2) the tenth anniversary of the
year in which the Participant commenced participation in the Plan; or
(3) the termination of the Participant's employment with the Company.
(c) Notwithstanding Paragraph (a) or (b) above, distributions of the
entire vested portion of a Participant's Accounts shall be made no
later than the Participant's Required Beginning Date, or, if such
distribution is to be made over the life of such Participant or over
the lives of such Participant and a Beneficiary (or over a period not
extending beyond the life expectancy of such Participant and
Beneficiary) then such distribution shall commence no later than the
Participant's Required Beginning Date. Required Beginning Date shall
mean:
(1) For the period prior to January 1, 1989, April 1 of the
calendar year following the later of the calendar year in which
the Participant (i) attains age 70-1/2, or (ii) retires;
provided, however the foregoing clause (ii) shall not apply with
respect to a Participant who is a Five Percent Owner (as defined
in Section 416(i) of the Code) at any time during the five Plan
Year period ending in the calendar year in which the Participant
attains age 70-1/2. If the Participant becomes a Five Percent
Owner during any Plan Year subsequent to the five Plan Year
period referenced above, the Required Beginning Date under this
Subparagraph (1) shall be April 1 of the calendar year following
the calendar year in which such subsequent Plan Year ends.
(2) For the period after December 31, 1988, April 1 of the
calendar year following the calendar year in which the
Participant attains age 70-1/2; provided, however, if the
Participant attains age 70-1/2 before January 1, 1988, and the
Participant was not a Five Percent Owner (as defined in Section
416(i) of the Code) at any time during the Plan Year ending with
or within the calendar year in which such Participant attains age
66-1/2 or any subsequent Plan Year, then this Subparagraph (2)
shall not apply and the Required Beginning Date shall be
determined under Subparagraph (1) above.
(d) Notwithstanding anything to the contrary in this Plan, if a
Participant dies before distribution of his/her vested benefit has
begun in accordance with Paragraph (c) above, the Participant's vested
benefit shall be distributed to his Beneficiary within five years from
the date of the Participant's death except that any portion of the
Account balance meeting the following requirements shall not be
subject to this rule:
(1) A Beneficiary has been designated to receive the
Participant's Account balance and such designation is effective
at the Participant's death;
(2) The Account balance is paid to the Beneficiary over the
Beneficiary's life or over a period not to exceed the
Beneficiary's life; and
(3) The payments to the Beneficiary commence within one year of
the Participant's death, or, if the Beneficiary is the spouse,
before the time the deceased Participant would have attained age
70-1/2.
(e) All distributions under this Plan shall be made in accordance with
the minimum distribution incidental benefit requirements of Code
Section 401(a)(9)(G) and in accordance with all regulations issued
under Code Section 401(a)(9).
(f) If a distribution is to be made over the life of a Participant or
the joint lives of a Participant and his or her spouse, the life
expectancy of the Participant and/or the life expectancy of the spouse
(if a distribution is to be made over the joint lives of the
Participant and his or her spouse) shall not be recalculated annually
unless the Participant elects recalculation prior to his or her
Required Beginning Date as determined under paragraph (c) above. If a
Participant dies before the distribution of his or her vested benefit
has begun in accordance with paragraph (c) above and the distribution
of the Participant's vested benefit is to be made to the Participant's
spouse over the life of such spouse, the life expectancy of the spouse
shall not be recalculated unless such spouse elects otherwise prior to
the date the deceased Participant would have attained age 70-1/2.
(g) If it is not administratively practical to calculate and commence
payments by the latest date specified in the rules of Paragraphs (b),
(c) and (d) above because the amount of the Participant's benefit
cannot be calculated, or because the Committee is unable to locate the
Participant (or eligible Beneficiary) after making reasonable efforts
to do so, the payment shall be made as soon as is administratively
possible (but not more than 60 days) after the Participant (or
Beneficiary) can be located and the amount of the distributable
benefit can be ascertained.
8.4 FORFEITURES.
(a) In the event that a distribution of Company Contributions is made
to a Participant due to a termination of employment when he/she is not
fully vested in such amounts, the non-vested portion of the
Participant's Account(s) shall be forfeited upon the earlier to occur
of the following: (i) the date the distribution is considered made,
determined pursuant to the provisions of Section 6.4, or (ii) the date
upon which the former Participant incurs five consecutive one-year
Breaks in Service.
(b) A Participant who received a distribution described in Paragraph
(a) above may recontribute the amount of the distribution he/she
received. Such a repayment must be made before the earlier of (i) the
end of the first period of five consecutive one-year Breaks in Service
commencing after the payment of the distribution made pursuant to
Section 8.4(a) above, or (ii) five years after the first date on which
the Participant is subsequently reemployed. If the Participant repays
the amount of the distribution within the prescribed time period, the
amount of his/her Account balances shall be completely restored.
Neither the amount recontributed nor the Account balances shall be
adjusted for gains, losses, or interest in the interim period. A
Participant who receives a distribution subject to the rules of this
Section 8.4 and who does not recontribute such amounts shall not be
entitled to any portion of the non-vested portion of his/her Account
balances (determined as of the date of the first distribution).
(c) Forfeitures shall be used as provided in Section 6.3.
8.5 VALUATION OF PLAN BENEFITS.
For the purpose of any withdrawal or distribution of benefits under
this Article VIII, the value of a Participant's Accounts shall be equal to
the value determined as of the Valuation Date coinciding with the date the
distribution is considered made, determined pursuant to the provisions of
Section 6.4.
8.6 LAPSED BENEFITS.
(a) In the event that a benefit is payable under this Plan to a
Participant and after reasonable efforts the Participant and his/her
Beneficiary cannot be located for the purpose of paying the benefit
during a period of two (2) consecutive years, the Participant shall be
presumed dead and the benefit shall be treated as a Forfeiture under
Section 8.4.
(b) Notwithstanding the provisions of Paragraph (a) above, if the
Participant or his/her Beneficiary shall subsequently present a valid
claim to the benefit, the Accounts of the Participant shall be
reinstated (pursuant to Section 6.3(a)) and the benefit shall be
payable to the Participant or Beneficiary.
8.7 PERSONS UNDER LEGAL DISABILITY.
(a) If any payee under the Plan is a minor or if the Committee
reasonably believes that any payee is legally incapable of giving a
valid receipt and discharge for any payment due him/her, the Committee
may have the payment, or any part thereof, made to the person (or
persons or institution) whom it reasonably believes is caring for or
supporting the payee, unless it has received due notice of claim
therefore from a duly appointed guardian or committee of the payee.
(b) Any such payment shall be a payment from the Accounts of the payee
and shall, to the extent thereof, be a complete discharge of any
liability under the Plan to the payee.
8.8 ADDITIONAL DOCUMENTS.
(a) The Committee or the Company may require satisfactory proof of any
matter under this Plan from or with respect to any Employee,
Participant, or Beneficiary, and no person shall be entitled to
receive any benefits under this Plan until the required proof shall be
furnished.
(b) The Committee or Trustee, or both, may require the execution and
delivery of such documents, papers and receipts as the Committee or
Trustee may determine necessary or appropriate in order to establish
the fact of death of the deceased Participant and of the right and
identity of any Beneficiary or other person or persons claiming any
benefits under this Article VIII.
(c) The Committee or the Trustee, or both, may, as a condition
precedent to the payment of death benefits hereunder, require an
inheritance tax release and/or such security as the Committee or
Trustee, or both, may deem appropriate as protection against possible
liability for State or Federal death taxes attributable to any death
benefits.
8.9 DIRECT TRANSFERS.
(a) Effective with respect to distributions made before January 1,
1993, in the case of any Participant or Participants who have
terminated employment with the Company and all Affiliated Companies,
as determined under the provisions of Section 8.1(a) hereof, and
subsequently become employed by an unrelated successor employer, the
Committee shall, at the request of such Participant or Participants,
direct the Trustee to transfer the assets in the Accounts of such
Participant or Participants either (i) directly to the trustee of any
retirement plan maintained by such successor employer or employers in
lieu of any distribution described in the preceding provisions of this
Article VIII but only if (A) the retirement plan maintained by such
successor employer is determined to the satisfaction of the Committee
to be qualified under Section 401 of the Code, (B) the sponsor and
trustee of such plan consent to the transfer, and (C)(i) such transfer
satisfies the conditions of Section 10.2 hereof, or (ii) directly to
the custodian or trustee of an individual retirement account under
Section 408(a) of the Code or an individual retirement annuity under
Section 408(b) of the Code.
(b) In the case of any Participant or Participants who are or were
employed by a unit of the Company or all or part of an Affiliated
Company which is the subject of a corporate reorganization, sale or
other transaction under circumstances such that it would not be
permissible under Section 8.1(a) hereof solely as a result of such
transaction to make distribution of one or more of the Accounts of
such Participant or Participants actively employed by the successor
entity, then the Committee may, at its discretion, direct the Trustee
to transfer the assets in the Accounts of such Participant or any or
all such Participants with respect to which no distribution is
permitted under Section 8.1(a) directly to the trustee of any
retirement plan maintained by a successor employer, but only if the
transfer meets the requirements of Paragraph (a) of this Section 8.9.
(c) Direct Rollover.
(i) This Section applies to distributions made on or after
January 1, 1993. Notwithstanding any provisions of the Plan to
the contrary that would otherwise limit a distribution election
under this Section, a distributee may elect, at the time and in
the manner prescribed by the Plan Administrator, to have any
portion of an eligible rollover distribution paid directly to an
eligible retirement plan specified by the distributee in a direct
rollover.
(ii) Definitions.
(A) Eligible Rollover Distributions: An eligible rollover
distribution is any distribution of all or any portion of
the balance to the credit of the distributee, except that an
eligible rollover distribution does not include: any
distribution that is one of a series of substantially equal
periodic payments (not less frequently than annually) made
for the life (or life expectancy) of the distributee or the
joint lives (or joint life expectancies) of the distributee
and the distributee's designated beneficiary, or for a
specified period of ten years or more; any distribution to
the extent such distribution is required under Code Section
401(a)(9); and the portion of any distribution that is not
includable in gross income (determined without regard to the
exclusion for net realized appreciation with respect to
employer securities).
(B) Eligible Retirement Plan: An eligible retirement plan is
an individual retirement account described in Code Section
408(a), an individual retirement annuity described in Code
Section 408(b), an annuity plan described in Code Section
403(b), or a qualified trust described in Code Section
401(a), that accepts the distributee's eligible rollover
distribution. However, in the case of an eligible rollover
distribution to the surviving spouse, an eligible retirement
plan is an individual retirement account or individual
retirement annuity.
(C) Distributee: A distributee includes an employee or
former employee. In addition, the employee's or former
employee's surviving spouse and the employee's or former
employee's spouse or former spouse who is the alternate payee
under a Qualified Domestic Relations Order, as defined in
Code Section 414(p), are distributees with regard to
interest of the spouse or former spouse.
(D) Direct Rollover: A direct rollover is a payment by the
Plan to the eligible retirement plan specified by the
distributee.
<PAGE>
ARTICLE IX
OPERATION AND ADMINISTRATION OF THE PLAN
9.1 PLAN ADMINISTRATION.
(a) Authority to control and manage the operation and administration
of the Plan shall be vested in the American Stores Company Benefit
Plans Committee ("Committee").
(b) The Participants of the Committee shall be appointed by the Board
of Directors and shall hold office until termination of such status in
accordance with the provisions of Section 9.7.
(c) For purposes of ERISA Section 402(a), the Participants of the
Committee shall be the Named Fiduciaries of this Plan.
(d) The Secretary of the Committee shall cause to be attached to the
copy of the Plan maintained in the office of the Committee an accurate
schedule listing the names of all persons from time to time serving as
the Named Fiduciaries of the Plan for the purpose of inspection.
(e) For purposes of ERISA Section 404(c) and the Department of Labor
Regulations promulgated thereunder, the Chairman of the Committee
shall be the fiduciary responsible for the provision and distribution
of all information required by such statutory and regulatory
requirements.
9.2 COMMITTEE POWERS.
The Committee shall have all powers necessary to supervise the
administration of the Plan and control its operations. In addition to any
powers of authority conferred on the Committee elsewhere in the Plan or by
law, the Committee shall have, by way of illustration but not by way of
limitation, the following discretionary powers and authority:
(a) To allocate fiduciary responsibilities (other than "Trustee
Responsibilities") among the Named Fiduciaries and to designate one or
more other persons to carry out fiduciary responsibilities (other than
Trustee Responsibilities). However, no allocation or delegation under
this Section 9.2(a) shall be effective until the person or persons to
whom the responsibilities have been allocated or delegated agree to
assume the responsibilities. The term "Trustee Responsibilities" shall
have the meaning set forth in Section 405(c) of ERISA.
(b) To designate representatives to carry out responsibilities
relating to the Plan, other than fiduciary responsibilities.
(c) To employ such legal, actuarial, medical, accounting, clerical,
and other assistance as it may deem appropriate in carrying out the
provisions of this Plan, including one or more persons to render
advice with regard to any responsibility any Named Fiduciary or any
other fiduciary may have under the Plan.
(d) To establish rules and procedures from time to time for the
conduct of the Committee's business and the administration and
effectuation of this Plan.
(e) To administer, interpret, construe and apply this Plan. To decide
all questions which may arise or which may be raised under this Plan
by any Employee, Participant, former Participant, Beneficiary or other
person whatsoever, including but not limited to all questions relating
to eligibility to participate in the Plan, the amount of service of
any Participant, and the amount of benefits to which any Participant
or his/her Beneficiary may be entitled.
(f) To determine the manner in which the assets of this Plan, or any
part thereof, shall be disbursed.
(g) To direct the Trustee, in writing, from time to time, to invest
and reinvest the Trust Fund, or any part thereof, or to purchase,
exchange, or lease any property, real or personal, which the Committee
may designate. This shall include the right to direct the investment
of all or any part of the Trust in any one security or any one type of
securities permitted hereunder. Among the securities which the
Committee may direct the Trustee to purchase are "Employer Securities"
as defined in Code Section 409(1).
(h) To perform or cause to be performed such further acts as it may
deem to be necessary, appropriate or convenient in the efficient
administration of the Plan.
Any action taken in good faith by the Committee in the exercise of
discretionary authority conferred upon it by this Plan shall be conclusive
and binding upon the Participants and their Beneficiaries. All
discretionary powers conferred upon the Committee shall be absolute.
However, all discretionary powers shall be exercised in a uniform and
nondiscriminatory manner. This Section 9.2 shall be effective on or after
January 1, 1987.
9.3 INVESTMENT MANAGER.
(a) Notwithstanding anything in this Article IX to the contrary, the
Committee, by action reflected in the minutes thereof, may appoint one
or more Investment Managers, as defined in Section 3(38) of ERISA, to
manage all or a portion of the assets of the Plan.
(b) An Investment Manager shall discharge its duties in accordance
with applicable law and in particular in accordance with Section
404(a)(1) of ERISA.
(c) An Investment Manager, when appointed, shall have full power to
manage the assets of the Plan for which it has responsibility, and
neither the Company nor the Committee shall thereafter have any
responsibility for the management of those assets, except as otherwise
provided by law.
(d) As shall be provided in any contract between an Investment Manager
and the Committee, such Investment Manager shall hold a revocable
proxy with respect to all securities which are held under the
management of such Investment Manager pursuant to such contract except
for Company Stock, and such Investment Manager shall report the voting
of all securities subject to such proxy on an annual basis to the
Committee.
9.4 FUNDING POLICY.
(a) At periodic intervals, not less frequently than annually, the
Committee shall review the long-run and short-run financial needs of
the Plan and shall determine a funding policy for the Plan consistent
with the objectives of the Plan and the need to have sufficient funds
and/or shares of Company Stock to pay benefits under the Plan.
(b) In determining the funding policy the Committee shall take into
account, at a minimum, not only the long-term investment objectives of
the Trust Fund consistent with the prudent management of the assets
thereof, but also the short-run needs of the Plan to pay benefits.
(c) All actions taken by the Committee with respect to the funding
policy of the Plan, including the reasons therefore, shall be fully
reflected in the minutes of the Committee.
9.5 COMMITTEE PROCEDURE.
(a) A majority of the members of the Committee as constituted at any
time shall constitute a quorum, and any action by a majority of the
members present at any meeting, or authorized by a majority of the
members in writing without a meeting, shall constitute the action of
the Committee.
(b) The Committee may designate one or more of its members
("Designated Members") as authorized to execute any document or
documents on behalf of the Committee, in which event the Committee
shall notify the Trustee of this action and the name or names of the
Designated Members.
(c) The Trustee, Company, Participants, Beneficiaries, and any other
party dealing with the Committee may accept and rely upon any document
executed by the Designated Members as representing action by the
Committee until the Committee shall file with the Trustee a written
revocation of the authorization of the Designated Members.
9.6 COMPENSATION OF COMMITTEE MEMBERS AND PLAN EXPENSES.
(a) Members of the Committee shall serve without compensation unless
the Company shall otherwise determine. However, in no event shall any
member of the Committee who receives full-time pay from the Company
receive compensation from the Plan for his/her services as a member of
the Committee.
(b) All members shall be reimbursed for any necessary or appropriate
expenditures incurred in the discharge of duties as members of the
Committee.
(c) The compensation or fees, as the case may be, of all officers,
representatives, counsel, the Trustee, or other persons retained or
employed by the Committee shall be fixed by the Committee, subject to
approval by the Company.
(d) The expenses incurred in the establishment and administration of
the Plan, including but not limited to the expenses incurred by the
members of the Committee in exercising their duties, shall be paid out
of the Trust assets, to the extent they are not paid by the Company.
(e) Notwithstanding the provisions of Paragraph (d) above, to the
extent provided by rules prescribed by the Committee, the cost of
interest, transfer taxes, and normal brokerage charges which are
included in the cost of securities (or other forms of investments)
purchased by the Trust Fund (or charged to proceeds in the case of
sales) shall be charged and allocated in a fair and equitable manner
to the Accounts of the Participants to which the securities (or other
forms of investments) are allocated.
<PAGE>
9.7 RESIGNATION AND REMOVAL OF MEMBERS.
(a) Any member of the Committee may resign at any time by giving
written notice to the Chairman or Secretary of the Committee,
effective as therein stated.
(b) Any member of the Committee may, at any time, be removed by the
Board of Directors.
(c) In the case of a Committee member who is also an Employee of the
Company, his/her status as a Committee member shall terminate as of
the effective date of the termination of his/her employment, except as
otherwise provided by the Company.
9.8 APPOINTMENT OF SUCCESSORS.
(a) Upon the death, resignation, or removal of any Committee member,
the Board of Directors may appoint a successor.
(b) Upon termination, for any reason, of a Committee member's status
as a member of the Committee, the member's status as a Named Fiduciary
shall concurrently be terminated, and upon the appointment of a
successor Committee member the successor shall assume the status of a
Named Fiduciary as provided in Section 9.1.
9.9 RECORDS.
(a) The Committee shall keep a record of all its proceedings and shall
keep, or cause to be kept, all such books, accounts, records or other
data as may be necessary or advisable in its judgment for the
administration of the Plan and to properly reflect the affairs
thereof, and to satisfy the requirements of ERISA Section 107.
(b) However, nothing in this Section 9.9 shall require the Committee
or any member thereof to perform any act which, pursuant to law or the
provisions of this Plan, is the responsibility of the Plan
Administrator (e.g., such as satisfying the reporting and disclosure
requirements, as provided in Section 9.10), nor shall this Section
relieve the Plan Administrator from such responsibility.
9.10 REPORTING AND DISCLOSURE.
The Plan Administrator shall be responsible for the reporting and
disclosure of information required to be reported or disclosed
pursuant to ERISA or any other applicable law.
9.11 RELIANCE UPON DOCUMENTS AND OPINIONS.
(a) The members of the Committee, the Board of Directors, the Company
and any person delegated under the provisions hereof to carry out any
fiduciary responsibilities under the Plan ("Delegated Fiduciary"),
shall be entitled to rely upon any tables, valuations, computations,
estimates, certificates and reports furnished by any consultant, or
firm or corporation which employs one or more consultants, upon any
opinions furnished by legal counsel, and upon any reports furnished by
the Trustee.
(b) The members of the Committee, the Board of Directors, the Company
and any Delegated Fiduciary shall be fully protected and shall not be
liable in any manner whatsoever for anything done or action taken or
suffered in reliance upon any such consultant or firm or corporation
which employs one or more consultants, Trustee, or counsel, except as
otherwise provided by law.
(c) Any and all such things done or actions taken or suffered by the
Committee, the Board of Directors, the Company, and any Delegated
Fiduciary shall be conclusive and binding on all Employees,
Participants, Beneficiaries, and any other persons whomsoever, except
as otherwise provided by law.
(d) The Committee and any Delegated Fiduciary may, but are not
required to, rely upon all records of the Company with respect to any
matter or thing whatsoever, and may likewise treat those records as
conclusive with respect to all Employees, Participants, Beneficiaries,
and any other persons whomsoever, except as otherwise provided by law.
9.12 RELIANCE ON COMMITTEE MEMORANDUM.
Any person dealing with the Committee may rely on and shall be fully
protected in relying on a certificate or memorandum in writing signed by
the Committee Chairman as authorized by the majority of the members of the
Committee, as constituted as of the date of the certificate or memorandum,
as evidence of any action taken or resolution adopted by the Committee.
9.13 MULTIPLE FIDUCIARY CAPACITY.
Any person or group of persons may serve in more than one fiduciary
capacity with respect to the Plan.
<PAGE>
9.14 LIMITATION ON LIABILITY.
(a) Except as provided in Part 4 of Subtitle B of Title I of ERISA, no
person shall be subject to any liability with respect to his/her
duties under the Plan unless he/she acts fraudulently or in bad faith.
(b) No person shall be liable for any breach of fiduciary
responsibility resulting from the act or omission of any other
fiduciary or any person to whom fiduciary responsibilities have been
allocated or delegated, except as provided in Part 4 of Subtitle B of
Title I of ERISA.
(c) No action or responsibility shall be deemed to be a fiduciary
action or responsibility except to the extent required by ERISA.
9.15 INDEMNIFICATION.
(a) To the extent permitted by law, the Company shall indemnify each
member of the Board of Directors and the Committee, and any other
Employee of the Company with duties under the Plan, against expenses
(including any amount paid in settlement) reasonably incurred by
him/her in connection with any claims against him/her by reason of
his/her conduct in the performance of his/her duties under the Plan,
except in relation to matters as to which he/she acted fraudulently or
in bad faith in the performance of such duties.
(b) The preceding right of indemnification shall be in addition to any
other right to which the Board or Committee member or other person may
be entitled as a matter of law or otherwise, and shall pass to the
estate of a deceased Committee member.
(c) For purposes of satisfying its indemnity obligations under this
Section, the Company may (but need not) purchase and pay premiums for
one or more policies of insurance. However, this insurance shall not
release the Company of its liability under this section.
9.16 BONDING.
Members of the Committee and all other Employees having
responsibilities under the Plan shall be bonded to the extent required by
Section 412 of ERISA or any other applicable law.
<PAGE>
9.17 VOTING AND OTHER RIGHTS OF COMPANY STOCK.
(a) With respect to the voting rights of all Company Stock held in
Participant's Accounts (both vested and non-vested), all such voting
rights on all matters submitted to shareholders shall be exercised by
the Trustee as directed by such Participants pursuant to procedures
established by the Committee. Notwithstanding any other provision
hereof, the Participants returning directions on Company Stock held in
their respective Accounts shall be Named Fiduciaries, for purposes of
ERISA, with respect to such directions on such shares. With respect to
the voting rights of Company Stock on which Participants fail to
return directions, such voting rights shall be exercised by the
Trustee by voting such shares on any given issue in the same
proportion as are the voted shares of Company Stock with respect to
which Participants do affirmatively provide directions.
(b) Notwithstanding the provisions of Paragraph (a) above, in the
event the Company is the subject of a tender offer (as such term is
used in Section 14 of the Securities Exchange Act of 1934) for any or
all shares of Company Stock held by the Trust, the Committee shall
pass through to the Participants the right to determine confidentially
whether shares (both vested and non-vested) held subject to the Plan
will be tendered pursuant to the offer, in accordance with the
following rules:
(i) Solely for the purposes of this Section 9.17(b), each
Participant shall be deemed a Named Fiduciary (within the meaning
of Section 402 of ERISA) with respect to Company Stock held in
his Accounts.
(ii) During the pendency of the tender offer, this Plan shall
continue to operate under its respective normal rules except as
expressly provided in this Section 9.17. Accordingly,
Participants may, among other things, continue to receive
withdrawals and distributions, make changes in the investment of
assets held in their respective Accounts and make changes with
respect to the investment of prospective contributions as per the
terms of the Plan.
(iii) To the extent that the tender offer results in the sale of
Company Stock in the Trust, the Committee or an Investment
Manager shall instruct the Trustee as to the investment of the
proceeds of such sale. The sale proceeds shall not be reinvested
in Company Stock except as to Accounts of Participants who so
consent.
(iv) The Trustee shall distribute at the Company's expense copies
of all relevant material filed with the Securities and Exchange
Commission which are distributed to shareholders of the Company
with such offer or regarding such offer, and shall seek
confidential written instructions from each Participant as to
whether the Company Stock credited to his Accounts should be
tendered pursuant to the tender offer. The identities and
addresses of Participants and the amount of Company Stock held in
their respective Accounts shall be delivered to the Trustee based
on the information provided by the Committee and maintained by
the Trustee in the normal course as part of its recordkeeping
duties.
(v) Each Participant may choose to instruct the Trustee directly
in one of the following three ways: (A) to tender a specified
percentage but less than all of the Company Stock held in his
Accounts regardless of the elections of other Participants, (B)
to tender all Company Stock held in his Accounts regardless of
the elections of other Participants, or (C) not to tender any
Company Stock held in his Accounts regardless of the elections of
other Participants. The Trustee shall not tender shares of
Company Stock for which it has received no directions from a
Participant.
(vi) The Trustee shall follow up with additional mailings as
reasonable under the time constraints then prevailing, to obtain
instructions from Participants not otherwise responding to such
request for instructions.
(c) For purposes of ERISA Section 404(c) and the Department of Labor
Regulations promulgated thereunder, in connection with any investment
in Company Stock, the Chairman of the Committee shall be responsible
for compliance with all required confidentiality procedures associated
with the exercise of any rights appurtenant to the investment in
Company Stock and for ensuring the appointment of an independent
fiduciary in situations where the potential for undue employer
influence indicates the appropriateness of the appointment of an
independent fiduciary, it being contemplated that in the ordinary
course the Trustee shall be such independent fiduciary.
9.18 PROHIBITION AGAINST CERTAIN ACTIONS.
(a) In administering this Plan, the Committee shall not discriminate
in favor of any class of Employees and particularly it shall not
discriminate in favor of highly compensated Employees, or Employees
who are officers or shareholders of the Company.
(b) Also, the Committee shall not cause the Plan to engage in any
transaction that constitutes a non-exempt Prohibited Transaction under
Section 4975(c) of the Code or Section 406(a) of ERISA.
(c) The Committee shall not be required to engage in any transaction,
including without limitation, directing the purchase or sale of
Company Stock, which it determines, in its sole discretion, might tend
to subject itself, its members, the Plan, the Company, or any
Participant to liability under federal or state securities law.
(d) No member of the Committee who is also a Participant or former
Participant of this Plan shall vote or decide any matter relating
solely to that person's rights under this Plan.
<PAGE>
ARTICLE X
MERGER OF COMPANY, MERGER OF PLAN
10.1 EFFECT OF REORGANIZATION OR TRANSFER OF ASSETS.
In the event of a consolidation, merger, sale, liquidation, or other
transfer of the operating assets of the Company to any other company, the
ultimate successor or successors to the business of the Company shall
automatically be deemed to have elected to continue this Plan in full force
and effect, in the same manner as if the Plan had been adopted by
resolution of its board of directors, unless the successor(s), by
resolution of its board of directors, shall elect not to so continue this
Plan in effect, in which case the Plan shall automatically be deemed
terminated as of the applicable effective date set forth in the board
resolution.
10.2 MERGER RESTRICTION.
Notwithstanding any other provision in this document, this Plan shall
not in whole or in part merge or consolidate with, or transfer its assets
and/or liabilities to any other plan unless each affected Participant in
this Plan would receive a benefit immediately after the merger,
consolidation, or transfer (if the Plan then terminated) which is equal to
or greater than the benefit he/she would have been entitled to receive
immediately before the merger, consolidation, or transfer (if the Plan had
then terminated). Provided the requirements set forth in the preceding
sentence are satisfied, the Committee may direct that the Plan may merge,
consolidate with, or transfer its assets and/or liabilities to another
tax-qualified employee pension benefit plan. Any such transaction shall be
effected in accordance with any and all applicable law.
<PAGE>
ARTICLE XI
PLAN TERMINATION AND
DISCONTINUANCE OF CONTRIBUTIONS
11.1 PLAN TERMINATION.
(a) The Company may terminate the Plan and the Trust Agreements at any
time by an instrument in writing executed in the name of the Company
by an officer or officers duly authorized to execute such an
instrument, and delivered to the Trustee.
(b) Upon and after the effective date of the termination, the Company
shall not make any further contributions under the Plan and no
contributions need be made by the Company applicable to the Plan Year
in which the termination occurs, except as may otherwise be required
by law.
(c) The rights of all affected Participants to benefits accrued to the
date of termination of the Plan, to the extent funded as of the date
of termination, shall automatically become fully vested as of that
date.
11.2 DISCONTINUANCE OF CONTRIBUTIONS.
(a) In the event the Company decides it is impossible or inadvisable
for business reasons to continue to make Company Contributions under
the Plan, the Company by resolution of its Board of Directors may
discontinue contributions to the Plan. Upon and after the effective
date of this discontinuance, the Company shall not make any further
Company Contributions under the Plan and no Company Contributions need
be made by the Company with respect to the Plan Year in which the
discontinuance occurs, except as may otherwise be required by law.
(b) The discontinuance of Company Contributions on the part of the
Company shall not terminate the Plan as to the funds and assets then
held by the Trustee, or operate to accelerate any payments of
distributions to or for the benefit of Participants or Beneficiaries,
and the Trustee shall continue to administer the Trust Fund in
accordance with the provisions of the Plan until all of the
obligations under the Plan shall have been discharged and satisfied.
(c) However, if this discontinuance of Company Contributions shall
cause the Plan to lose its status as a tax-qualified plan under Code
Section 401(a), the Plan shall be terminated in accordance with the
provisions of this Article XI.
(d) On and after the effective date of a complete discontinuance of
Company Contributions, the rights of all affected Participants to the
balance in their Accounts as of that date, shall automatically become
fully vested.
(e) The failure of the Company to contribute to the Trust in any year,
if contributions are not required under the Plan for that year, shall
not constitute a complete discontinuance of contributions to the Plan.
11.3 RIGHTS OF PARTICIPANTS.
In the event of the termination of the Plan, for any cause whatsoever,
all assets of the Plan, after payment of expenses, shall be used for the
exclusive benefit of Participants and their Beneficiaries and no part
thereof shall be returned to the company, except as provided in Section 5.6
of this Plan.
11.4 TRUSTEE'S DUTIES ON TERMINATION.
(a) On or before the effective date of termination of this Plan, the
Trustee shall proceed as soon as possible to reduce all of the assets
of the Trust Fund to cash and/or common stock and other securities in
such proportions as the Committee shall determine (after approval by
the Internal Revenue Service, if necessary or desirable, with respect
to any portion of the assets of the Trust Fund held in common stock or
securities of the Company).
(b) After first deducting the estimated expenses for liquidation and
distribution chargeable to the Trust Fund, and after setting aside a
reasonable reserve for expenses and liabilities (absolute or
contingent) of the Trust, the Committee shall make the allocations
required under Article VI, where applicable, with the same effect as
though the date of completion of liquidation were an Anniversary Date
of the Plan.
(c) Following these allocations, the Trustee shall promptly, after
receipt of appropriate instructions from the Committee, distribute in
accordance with Article VIII to each former Participant a benefit
equal to the amount credited to his/her Accounts as of the date of
completion of the liquidation. Notwithstanding the foregoing, if the
value of all of a Participant's Accounts exceeds $3,500, no
distribution will be made without his/her written consent before
he/she attains Normal Retirement Age or dies.
(d) The Trustee and the Committee shall continue to function as such
for such period of time as may be necessary for the winding up of this
Plan and for the making of distributions in accordance with the
provisions of this Plan.
11.5 PARTIAL TERMINATION.
(a) In the event of a partial termination of the Plan within the
meaning of Code Section 411(d)(3), the interests of affected
Participants in the Trust Fund, as of the date of the partial
termination, shall become fully vested as of that date.
(b) That portion of the assets of the Plan affected by the partial
termination shall be used exclusively for the benefit of the affected
Participants and their Beneficiaries, and no part thereof shall
otherwise be applied, except as provided in Section 5.6.
(c) With respect to Plan assets and Participants affected by a partial
termination, the Committee and the Trustee shall follow the same
procedures and take the same actions prescribed in this Article XI in
the case of a total termination of the Plan.
<PAGE>
ARTICLE XII
APPLICATION FOR BENEFITS
12.1 APPLICATION FOR BENEFITS.
(a) The Committee may require any person claiming benefits under the
Plan to submit an application therefor, together with such other
documents and information as the Committee may require.
(b) In the case of any person suffering from a disability which
prevents such claimant from making personal application for benefits,
the Committee may, in its discretion, permit application to be made by
another person acting on his/her behalf.
(c) The Committee, or its representative, shall be permitted to
consider certain requests or inquiries by or on behalf of a
Participant (or Beneficiary if applicable) as a claim for benefits. If
the Committee considers such a request or inquiry, such Participant
(or Beneficiary if applicable) shall be notified by the Committee or
its representative that such request or inquiry is considered a claim
for benefits.
12.2 ACTION ON APPLICATION.
(a) Within ninety (90) days following receipt of an application
described in Section 12.1 and all necessary documents and information,
the Committee's authorized representative reviewing such claim shall
furnish the claimant with written notice of the decision rendered with
respect to such application.
(b) Should special circumstances require an extension of time for
processing the claim, written notice of the extension shall be
furnished to the claimant prior to the expiration of the initial
ninety (90) day period. The notice shall indicate the special
circumstances requiring an extension of time and the date by which a
final decision is expected to be rendered. In no event shall the
period of the extension exceed ninety (90) days from the end of the
initial ninety (90) day period.
(c) In the case of a denial of the claimant's application, such
written notice shall set forth:
(i) The specific reasons for the denial;
(ii) References to the Plan provisions upon which the denial is
based;
(iii) A description of any additional information or material
necessary for perfection of the application (together with an
explanation why such material or information is necessary); and
(iv) An explanation of the Plan's claim review procedure.
(d) A claimant who wishes to contest the denial of his/her application
for benefits or to contest the amount of benefits payable shall follow
the administrative procedures for an appeal of benefits as set forth
in Section 12.3 below, and shall exhaust such administrative
procedures prior to seeking any other form of relief.
(e) The decision on review shall be in writing and shall include
specific reasons for the decisions, written in a manner calculated to
be understood by the claimant with specific reference to the pertinent
Plan provisions upon which the decision is based.
12.3 APPEALS.
(a) In order to appeal the decision rendered with respect to his/her
application for benefits or with respect to the amount of his/her
benefits, the claimant must follow the appeal procedures set forth in
this Section 12.3.
(b) The appeal must be made, in writing, within sixty-five (65) days
after the date of notice of the decision with respect to the
application, or if the application has neither been approved nor
denied within the applicable period provided in Section 12.2 above,
then the appeal must be made within sixty-five (65) days after the
expiration of such period.
(c) The claimant may request that his/her application be given full
and fair review by the Committee. The claimant may review all
pertinent documents and submit issues and comments in writing in
connection with the appeal.
(d) The decision of the Committee shall be made promptly, and not
later than sixty (60) days after the Committee's receipt of a request
for review, unless special circumstances require an extension of time
for processing, in which case a decision shall be rendered as soon as
possible, but not later than one hundred twenty (120) days after
receipt of a request for review.
(e) The decision on review shall be in writing and shall include
specific reasons for the decision, written in a manner calculated to
be understood by the claimant with specific reference to the pertinent
Plan provisions upon which the decision is based.
<PAGE>
ARTICLE XIII
LIMITATIONS ON CONTRIBUTIONS
13.1 GENERAL RULE.
(a) Notwithstanding anything to the contrary contained in this Plan,
the total Annual Additions under this Plan to a Participant's Accounts
for any Plan Year shall not exceed the lesser of:
(i) Thirty Thousand Dollars ($30,000) (or if greater, one-fourth
of the dollar limit in effect under Section 415(b)(1)(A) or such
other amount as may be permitted pursuant to regulations issued
under Section 415(d)(1) of the Code); or
(ii) Twenty-five percent (25%) of the Participant's total
Compensation (determined in accordance with Section 13.1(d)
below) from the Company and any Affiliated Companies for the
year.
(b) For purposes of this Article XIII, a Participant's Compensation
shall be reduced by the amount of his or her Tax Deferred
Contributions made pursuant to Article IV.
(c) For purposes of this Article XIII, the Company has elected a
"Limitation Year" corresponding to the Plan Year.
(d) For purposes of this Article XIII, "Compensation" shall mean a
Participant's earned income, wages, salaries, fees for professional
service and other amounts received for personal services actually
rendered in the course of employment with the Company including, but
not limited to, commissions paid to sales personnel, compensation for
services on the basis of a percentage of profits, commissions on
insurance premiums, tips, and bonuses, and excluding the following:
(i) Company contributions to a plan of deferred compensation to
the extent contributions are not included in gross income of the
Employee for the taxable year in which contributed, or on behalf
of an Employee to a simplified employee pension plan to the
extent such contributions are deductible under Code Section
219(b)(7), and any distributions from a plan of deferred
compensation whether or not includable in the gross income of the
Employee when distributed;
(ii) Amounts realized from the exercise of a non-qualified stock
option, or when restricted stock (or property) held by an
Employee becomes freely transferable or is no longer subject to a
substantial risk of forfeiture;
(iii) Amounts realized from the sale, exchange or other
disposition of stock acquired under a qualified stock option; and
(iv) Other amounts which receive special tax benefits or
contributions made by the Company (whether or not under a salary
reduction agreement) towards the purchase of an annuity contract
as defined under Code Section 403(b) (whether or not the
contributions are excludable from the gross income of the
Employee).
Compensation for any limitation year is the compensation actually paid
or includable in gross income during such year. In the case of a
Participant who is on a Disability Leave of Absence, Compensation
means the amount of deemed Compensation determined pursuant to Section
6.3(c)(iii). Notwithstanding the foregoing, for all Plan Years
beginning on or after January 1, 1989, Compensation for any limitation
year shall only include so much of any Participant's Compensation as
does not exceed $200,000 (or such amount as the Secretary of the
Treasury shall adjust at the same time and in the same manner as under
Code Section 415(d)).
(e) For Limitation Years beginning after December 31, 1986, the
limitations contained in Section 13.1(a)(ii) shall not apply to
amounts treated as Annual Additions by reason of Section 2.5(d).
13.2 OTHER DEFINED CONTRIBUTION PLANS.
If the Company or an Affiliated Company is contributing to any other
defined contribution plan (as defined in Section 414(i) of the Code) for
its Employees, some or all of whom may be Participants in this Plan, then
each Participant's Annual Additions in the other plan shall be aggregated
with the Participant's Annual Additions under this Plan for the purposes of
applying the limitations of Section 13.1.
13.3 DEFINED BENEFIT PLANS.
If a Participant of this Plan is or has been a Participant of a
defined benefit plan (as defined in Section 414(j) of the Code) to which
contributions are made by the Company or an Affiliated Company, then in
addition to the limitation contained in Section 13.1 of this Plan, the
"Combined Plan Fraction" shall not exceed 1.0.
(a) "Combined Plan Fraction" means the sum of the Defined Contribution
Plan Fraction and the Defined Benefit Plan Fraction.
(b) "Defined Contribution Plan Fraction" means a fraction determined
in accordance with the provisions of Code Section 415(e).
(c) "Defined Benefit Plan Fraction" means a fraction determined in
accordance with the provisions of Code Section 415(e).
13.4 ADJUSTMENTS FOR EXCESS ANNUAL ADDITIONS.
In general, the amount of Company Contributions for any Plan Year
under this Plan and any other defined contribution plans (as defined in
Code Section 414(i)) maintained by the Company or an Affiliated Company
will be determined so as to avoid Annual Additions in excess of the
limitations set forth in Sections 13.1 through 13.3. However, if as a
result of an administrative error in calculating those Company
Contributions, the Annual Additions to a Participant's Accounts under this
Plan (after giving effect to the maximum permissible adjustments under the
other plans) would exceed the applicable limitations described in Sections
13.1 through 13.3, the excess amount shall be subject to the following
rules:
(a) First, if the Participant had made any Taxed Contributions to the
Plan during the Plan Year (taking into account any after-tax
contributions to any other defined contribution plan that is
maintained by the Company or an Affiliated Company which would be
aggregated with this Plan under Section 13.2) with respect to which no
Company Match on Contributions are deemed to be allocated under
Section 6.3(b), these contributions shall be returned to the
Participant to the extent of any excess Annual Additions;
(b) Next, if the Participant had made any Taxed Contributions (taking
into account any after-tax contributions to any other defined
contribution plan that is maintained by the Company or an Affiliated
Company which would be aggregated with this Plan under Section 13.2)
with respect to which Company Match on Contributions are deemed to be
allocated for such Plan Year, the portion of such Taxed Contributions
plus the Company Match on Contributions deemed allocated thereto which
constitute excess Annual Additions shall be treated as follows:
(i) Such Taxed Contributions shall be returned to the
Participant; and
(ii) Such Company Match On Contributions shall be allocated as
provided in Paragraph (f).
(c) Next, if the Participant made any Tax Deferred Contributions to
the Plan during the Plan Year with respect to which no Company Match
On Contributions are deemed to be allocated for such Plan Year, the
portion of such Tax Deferred Contributions which constitutes excess
Annual Additions shall be applied to reduce future Company
Contributions. However, the Company shall be obligated to compensate
the Participant promptly in the amount of the annual additions to
reduce future Company Contributions, the Plan may refund such excess
Annual Additions to the applicable participants with any earnings
thereon.
(d) Next, if the Participant made any Tax Deferred Contributions to
the Plan during the Plan Year with respect to which Company Match On
Contributions are deemed to be allocated for such Plan Year, the
portion of such Tax Deferred Contributions plus the Company Match On
Contributions deemed allocated thereto which constitute excess Annual
Additions shall be treated as follows:
(i) Such Tax Deferred Contributions shall be governed under the
rules of Paragraph (c); and
(ii) Such Company Match On Contributions shall be allocated as
provided in Paragraph (f).
(e) For purposes of the application of the ordering rules of this
Section 13.4 only, Company Match On Contributions under Section 6.3(b)
for any Plan Year shall be deemed allocated first to the Sharing
Contributions of Participants which constitute Tax Deferred
Contributions, then, to the extent such Tax Deferred Contributions
constitute less than 6% of such Participant's Compensation, to the
remaining portion, if any, of such Participant's Sharing Contributions
which constitute Taxed Contributions.
(f) Finally, if excess Annual Additions remain, Company Contributions
which give rise to the excess Annual Additions under this Plan (other
than Tax Deferred Contributions) shall be reallocated, to the extent
possible, to the Accounts of the Participants who do not have excess
Annual Additions in accordance with the allocation formula applicable
to Company Contributions provided under Section 6.3. After each
Participant's Accounts have been credited with a sum equaling his/her
maximum Annual Addition (determined under the foregoing provisions of
Section 13.1 through 13.3), the residue of the foregoing excess
amount, if any, shall be held in a Suspense Account.
(g) Any amounts held in the Suspense Account described in Paragraph
(f) shall be allocated to the Accounts of Participants as of the next
succeeding Anniversary Date in accordance with the allocation formula
provided in Section 6.3 on a first-in, first-out basis. The value of
the Company Stock for purposes of this allocation shall be determined
by applying the rules of Section 5.5 on the date of the allocation.
The Suspense Account shall be exhausted before any Company
Contributions shall be allocated to the Accounts of Participants
subsequent to the date upon which the residue excess described in
Section 13.4(f) is credited to the Suspense Account.
(h) The Trustee shall segregate any amounts held in the Suspense
Account from other assets of the Plan and may place the cash portions
thereof in an interest-bearing account in any bank or savings and loan
institution, including the Trustee's own banking department (if
applicable). Any amounts held in the Suspense Account shall not
participate in any allocation of forfeitures, or net income or loss of
other assets of the Trust Fund under Article VI.
(i) In the event the Plan shall terminate at a time when all amounts
in the Suspense Account have not been allocated to the Accounts of the
Participants, the Suspense Account amounts shall be applied as
follows:
(i) The amount in the Suspense Account shall first be allocated,
as of the Plan termination date, to Participants on the same
basis as specified in Section 13.4(g) above, with the allocation
to be made to the maximum extent permissible under the Annual
Additions limitations of this Article XIII, and
(ii) If after those allocations have been made, any further
residue funds remain in the Suspense Account, the residue shall
revert to the Company in accordance with the applicable
provisions of the Code.
(j) The amended provisions of Paragraphs (a), (b), (c), (d) and (e)
shall be effective as of the Effective Date.
13.5 AFFILIATED COMPANY.
For purposes of this Article XIII, the status of an entity as an
Affiliated Company shall be determined by reference to the percentage tests
set forth in Code Section 415(h).
13.6 EFFECTIVE DATE.
Notwithstanding the general Effective Date of this Plan, the
provisions of this Article XIII shall be effective January 1, 1987, except
as otherwise indicated.
<PAGE>
ARTICLE XIV
RESTRICTION ON ALIENATION
14.1 GENERAL RESTRICTIONS AGAINST ALIENATION.
(a) The interest of any Participant or Beneficiary in the income,
benefits, payments, claims or rights hereunder, or in the Trust Fund
shall not in any event be subject to sale, assignment, hypothecation,
or transfer. Each Participant and Beneficiary is prohibited from
anticipating, encumbering, assigning, or in any way alienating his/her
interest under the Trust Fund, and is without power to do so, except
as may otherwise be provided for in this Article XIV. The interest of
any Participant or Beneficiary shall not be liable or subject to
his/her debts, liabilities, or obligations, now contracted, or which
may be subsequently contracted.
(b) In the event any person attempts to take any action contrary to
this Article XIV, that action shall be void and the Company, the
Committee, the Trustees and all Participants and their Beneficiaries,
may disregard that action and are not in any manner bound thereby, and
they, and each of them separately, shall suffer no liability for any
disregard of that action, and shall be reimbursed on demand out of the
Trust Fund for the amount of any loss, cost or expense incurred as a
result of disregarding or of acting in disregard of that action.
(c) The preceding provisions of this Section 14.1 shall be interpreted
and applied by the Committee in accordance with the requirements of
Code Section 401(a)(13) and ERISA Section 206(d) as construed and
interpreted by authoritative judicial and administrative rulings and
regulations.
14.2 QUALIFIED DOMESTIC RELATIONS ORDERS.
The rules set forth in Section 14.1 above shall not apply with respect
to a "Qualified Domestic Relations Order" described below.
(a) A "Qualified Domestic Relation Order" is a judgment, decree, or
order (including approval of a property settlement agreement) that --
(i) Creates or recognizes the existence of an Alternate Payee's
right to, or assigns to an Alternate Payee the right to, receive
all or a portion of the benefits payable with respect to a
Participant,
(ii) Relates to the provisions of child support, alimony
payments, or marital property rights to a spouse, child or other
dependent of a Participant,
(iii) Is made pursuant to a State domestic relations law
(including a community property law), and
(iv) Clearly specifies:
(A) The name and last known mailing address (if any) of the
Participant and the name and mailing address of each
Alternate Payee covered by the order;
(B) The amount or percentage of Participant's benefits to be
paid to each Alternate Payee, or the manner in which the
amount or percentage is to be determined,
(C) The number of payments or period to which the order
applies, and
(D) Each plan to which the order applies.
For purposes of this Section 14.2, the term "Alternate Payee" means
any spouse, former spouse, child or other dependent of a Participant
who is recognized by a domestic relations order as having a right to
receive all, or a portion of, the benefits payable with respect to the
Participant. Both the Participant and an Alternate Payee may designate
a representative for the receipt of copies of notices with respect to
an order.
(b) A domestic relations order is not a Qualified Domestic Relations
Order if it requires -- (i) The Plan to provide any type or form of
benefit, or any option, not otherwise provided under the Plan,
(ii) The Plan to provide increased benefits, (determined on the
basis of actuarial value), or
(iii) The payment of benefits to an Alternate Payee that are
required to be paid to another Alternate Payee under a previous
Qualified Domestic Relations Order.
(c) A domestic relations order shall not be considered to fail to
satisfy the requirements of Paragraph (b)(i) above with respect to any
payment made before a Participant has separated from service solely
because the order requires that payment of benefits be made to an
Alternate Payee --
(i) On or after the date on which the Plan Administrator notifies
the Participant and each Alternate Payee that the order is a
Qualified Domestic Relations Order,
(ii) As if the Participant had retired on the date on which such
payment is to begin under the order (based on the value of the
Participant's Account balances at that time), or
(iii) In any form in which the benefits may be paid under the
Plan to the Participant (other than in the form of a joint and
survivor annuity with respect to the Alternate Payee and his or
her subsequent spouse).
(d) In the case of any domestic relations order received by the Plan--
(i) The Committee or its delegate shall promptly notify the
Participant and any Alternate Payee of the receipt of the order
and the Plan's procedures as set forth in this Section 14.2 for
determining the qualified status of domestic relations orders,
and
(ii) Within a reasonable period after the receipt of the order,
the Committee or its delegate shall determine whether the order
is a Qualified Domestic Relations Order and shall notify the
Participant and each Alternate Payee and any designated
representative of the determination. The Committee or its
delegate may refer such determination to counsel for the Plan for
an opinion on such issue. The Committee or its delegate shall
notify the Participant, each Alternate Payee and any designated
representatives of the determination on the qualified status of
the order, and include with such notification a copy of any legal
opinion rendered on the question. If the order is determined to
be a Qualified Domestic Relations Order, the terms and directions
as to payment and entitlement contained in the order will be
promptly communicated to each payee and any designated
representative.
(e) To the extent provided in any Qualified Domestic Relations Order,
the former spouse of the Participant shall be treated as a surviving
spouse of the Participant for purposes of applying the rules of
Article XVII (relating to minimum survivor annuity requirements) and
any current spouse of the Participant shall not be treated as a spouse
of the Participant for such purposes.
(f) The Committee or its delegate shall, in determining the qualified
status of domestic relations orders and administering distributions
under Qualified Domestic Relations orders observe the following:
(i) During any period in which the issue of whether a domestic
relations order is a Qualified Domestic Relations order is being
determined (by the Committee or its delegate, by a court of
competent jurisdiction, or otherwise), the Committee shall
segregate in a separate account in the Plan (or in an escrow
account) the amounts which would have been payable to the
Alternate Payee during the period if the order had been
determined to be a Qualified Domestic Relations Order.
(ii) If within the "Eighteen Month Period" (as defined below) the
order (or modification thereof) is determined to be a Qualified
Domestic Relations Order, the Committee or its delegate shall pay
the segregated amounts (adjusted for investment experience) to
the person or persons entitled thereto.
(iii) If within the "Eighteen Month Period" --
(A) It is determined that the order is not a Qualified
Domestic Relations Order, or
(B) The issue as to whether Qualified Domestic Relations
Order is not resolved,
then the Plan Administrator shall pay the segregated amounts
(adjusted for investment experience) to the person or persons who
would have been entitled to the amounts if there had been no
order, including restoration of such amounts to the Account(s) of
the Participant (assuming such benefits were otherwise payable).
If the order is determined not to be a Qualified Domestic
Relations Order within the 18-month period, the Committee or its
delegate may delay payment until the expiration of the 18-month
period if the Committee or its delegate receives notice that the
parties are attempting to rectify any deficiencies in the order.
(iv) Any determination that an order is a Qualified Domestic
Relations Order that is made after the close of the Eighteen
Month Period shall be applied prospectively only. For the
purposes of this Paragraph (f), the "Eighteen Month Period" shall
mean the eighteen month period beginning on the date on which the
first payment would be required to be made under the domestic
relations order.
(g) Unless directed otherwise by a court order, upon receipt of an
order, a subpoena or similar court order requesting information
regarding a Participant's benefits under the Plan (but which does not
purport actually to order or direct payment) in connection with a
domestic relations proceeding involving the Participant, the Committee
shall restrain 50% (or such other amount, if any, specified in the
order) of the Participant's account balance under the Plan to prevent
loans, withdrawals or distributions. Such restraint shall remain in
place until the earliest of the following:
(i) A division of the account is made pursuant to an order
entered in the proceeding which is determined to be a Qualified
Domestic Relations Order;
(ii) Receipt by the Committee of an order entered in the
proceeding purporting to divide the marital or community estate
and making no assignment of an interest in the Plan to an
alternate payee;
(iii) Receipt by the Committee of a written waiver of the
restraint by the party (e.g., Participant's spouse) to the
domestic relations proceeding who is adverse to the Participant;
or
(iv) The lapse of 18 months following imposition of the
restraint; provided that the Committee is not aware of efforts to
enter an order which would assign the Participant's benefits
under the Plan.
14.3 AUTHORIZED PARTICIPANT LOANS.
The Committee may authorize loans from the Trust Fund to Participants
at such times and upon such conditions as determined pursuant to procedures
developed by the Committee in writing. These procedures shall be designed
to ensure that the loans satisfy the requirements of Code Sections
4975(d)(1) and 72(p), and the provisions of any other statutes that are, or
may become applicable. These procedures shall provide that:
(a) The loans shall be available to all Participants who are Eligible
Employees of the Company and who have attained at least age eighteen
(18) and such other individuals as determined by the Committee
consistent with or as required by applicable law, on a reasonably
equivalent basis; provided that the Committee may, in its discretion,
establish a minimum loan amount, applicable to all Participants
uniformly, not to exceed $1,000.
(b) The loans are not made available to Participants who are officers
or shareholders of the Company or who are highly compensated Employees
in amounts greater than the amounts made available to other
Participants.
(c) The rate of interest charged for a loan approved in a particular
month shall be:
(i) The quoted rate of one-year U.S. Treasury Securities for any
loan with a one-year repayment period;
(ii) The quoted rate for five-year U.S. Treasury Securities for
any loan with a two to five year repayment period; and
(iii) The quoted rate for ten-year U.S. Treasury Securities for
any loan with a six to ten year repayment period.
The quoted rate to be applied for any particular month shall be the
rate for the applicable U.S. Treasury Securities as of the last
business day of the preceding month, rounded to the nearest 1/4%.
Notwithstanding the foregoing, the Committee shall establish any other
interest rate it deems appropriate at any time or from time to time in
order to comply with applicable statutes or regulations.
(d) The security for the loan shall be the balance in the
Participant's Accounts. Notwithstanding the foregoing, not more than
one-half of the vested amount of a Participant's Accounts may be used
as security for any loan made hereunder.
(e) The amount of the loan, including principal and interest, shall be
amortized in equal monthly installments over a period not exceeding
five (5) years. The preceding sentence shall not apply to any loan
used to acquire any dwelling unit which within a reasonable time is to
be used (determined at the time the loan is made) as a principal
residence of the Participant. Any such loan shall be repaid in monthly
installments over a period not exceeding 10 years. Payments for all
loans shall be made by means of payroll deductions during the time in
which the Participant is employed by the Company.
(f) The Participant who receives the loan must pay the administrative
costs associated with the origination, servicing, and other incidental
expenses associated with the loan not so paid by the Company or the
Trust.
(g) The funding of the loan shall be disbursed from the Accounts
enumerated in Section 14.3(g)(iii) hereof in the order set forth
therein with no amount to be disbursed from an Account until all
amounts in the next previously enumerated Account have been disbursed.
The amount of any loan to a Participant, when added to the outstanding
balance of any of his or her previous loans from the Plan, and, when
added to the outstanding balances of any loans from any other plans
maintained by the Company or any Affiliated Companies, shall not
exceed the lesser of:
(i) Fifty Thousand Dollars ($50,000), reduced by the excess (if
any) of:
(A) the highest outstanding balance of loans from the Plan
during the one-year period ending on the day before the date
on which such loan is made, over
(B) the outstanding balance of loans from the Plan on the
date on which such loan is made;
(ii) One-half (1/2) of the Participant's vested interest in his
or her Accounts; or
(iii) The sum of the balances of a Participant's Taxed
Contributions Account, Prior Plans Account, Company Match On
Contributions Account, Company Contribution on Pay (Fully Vested)
Account, Rollover Account, and Tax Deferred Contributions
Account.
(h) If, for any reason, repayment of any loan granted to a Participant
pursuant to this Section 14.3 can no longer be made by means of
payroll deduction, including but not limited to separation from
service, and such Participant does not, immediately upon the request
of Plan administrators, submit payment for the outstanding balance of
such loan, such loan shall be considered in default with the
outstanding balance of such loan immediately due and payable. The Plan
Administrator may, however, upon the occurrence of a Leave of Absence
by a Participant or a separation from service whereby the Internal
Revenue Service's "same desk rule" applies to the Participant, permit
such Participant to continue voluntarily to make regularly scheduled
loan payments other than by payroll deduction. If such a Participant
does not make all such payments as scheduled, the loan shall be
considered in default, with the outstanding balance of the loan
immediately due and payable. Upon such default, the Participant's
interest in his or her Accounts, as security for such loan, shall be
reduced by the amount of such outstanding balance and such reduction
shall be treated as a distribution under this Plan. Notwithstanding
the foregoing, any amounts in the Participant's Tax Deferred
Contributions Account shall not be reduced in satisfaction of the
outstanding loan balance unless or until such Participant has
separated from service or unless such Participant qualifies for a
Hardship distribution pursuant to Section 8.1(b).
(i) A loan shall be considered made on the date specified in Section
6.4(e)(iii) hereof.
(j) If a Participant's Accounts are subject to the Provisions of
Article XVII of this Plan, the spousal consent provisions of Section
17.7 must be met before a loan may be made to the Participant.
(k) At no time shall a Participant be permitted to have more than two
(2) loans outstanding with respect to his Accounts under this Plan.
(l) Notwithstanding the general Effective Date of this Plan, the
provisions of this Section 14.3 shall be effective January 1, 1987,
except that paragraphs (a), (c) and (d) shall be effective for any
loans made or renegotiated after October 18, 1989.
14.4 GROUP INSURANCE PAYMENTS THROUGH DECEMBER 31, 1992.
(a) Notwithstanding anything in the Plan to the contrary (including
the provisions of Section 14.1 above), upon receipt of written
authorization from a Participant or Beneficiary, as applicable, who
continues to participate in the Company's group insurance plan for
retirees, the Committee may make periodic distributions from the
individual's Account to the Company through the period ending December
31, 1992, in payment of the individual's cost of participation in such
plan.
(b) The Committee shall prescribe such rules and procedures as it
deems necessary or appropriate for purposes of implementing the
provisions of this Section 14.4; provided, however, that no
distributions shall be made to the Company pursuant to paragraph (a)
after December 31, 1992.
<PAGE>
ARTICLE XV
SPECIAL TOP-HEAVY RULES
15.1 APPLICABILITY.
(a) Notwithstanding any provision in this Plan to the contrary, the
provisions of this Article XV shall apply in the case of any Plan Year
in which the Plan is determined to be a Top-Heavy Plan under the rules
of Section 15.3.
(b) Except as is expressly provided to the contrary, the rules of this
Article XV, shall be applied after the application of the Affiliated
Company rules of Section 2.3.
15.2 DEFINITIONS.
(a) For purposes of this Article XV, the term "Key Employee" shall
mean any Employee who, at any time during the Plan Year or any of the
four (4) preceding Plan Years, is or was --
(i) An officer of the Company having an annual compensation from
the Company greater than one hundred fifty percent (150%) of the
amount in effect under Section 415(c)(1)(A) of the Code for the
applicable Plan Year. However, no more than fifty (50) Employees
(or, if lesser, the greater of three (3) or ten percent (10%) of
the Employees) shall be treated as officers;
(ii) One of the ten (10) employees having annual compensation
from the company of more than the limitation in effect under Code
Section 415(c)(1)(A) and owning (or considered as owning within
the meaning of Code Section 318) the largest interests in the
Company. For this purpose, if two (2) Employees have the same
interest in the Company, the employees having greater annual
compensation from the Company shall be treated as having a larger
interest;
(iii) A Five Percent Owner of the Company; or
(iv) A One Percent Owner of the Company having an annual
compensation from the Company of more than one hundred fifty
thousand dollars ($150,000.00).
(b) For purposes of this Section 15.2, the term "Five Percent Owner"
means any person who owns (or is considered as owning within the
meaning of Code Section 318) more than five percent (5%) of the
outstanding stock of the Company or stock possessing more than five
percent (5%) of the total combined voting power of all stock of the
Company. The rules of Subsections (b), (c), and (m) of Code Section
414 shall not apply for purposes of applying these ownership rules.
(c) For purposes of this Section 15.2, the term "One Percent Owner"
means any person who would be described in Paragraph (b) if "one
percent (1%)" were substituted for "five percent (5%)" each place
where it appears therein.
(d) For purposes of this Section 15.2, the rules of Code Section
318(a)(2)(C) shall be applied by substituting "five percent (5%)" for
"fifty percent (50%)."
(e) For purposes of this Article XV, the term "Non-Key Employee" shall
mean any Employee who is not a Key Employee.
(f) For purposes of this Article XV, the terms "Key Employee" and
"Non-Key Employee" include their Beneficiaries.
15.3 TOP-HEAVY STATUS.
(a) The term "Top-Heavy Plan" means, with respect to any Plan Year --
(i) Any defined benefit plan if, as of the Determination Date,
the present value of the cumulative accrued benefits under the
Plan for Key Employees exceeds sixty percent (60%) of the present
value of the cumulative accrued benefits under the plan for all
Employees, and
(ii) Any defined contribution plan, if, as of the Determination
Date, the aggregate of the account balances of Key Employees
under the Plan exceeds sixty percent (60%) of the present value
of the aggregate of the account balance of all Employees under
the plan.
For purposes of this Paragraph (a), the term "Determination Date"
means, with respect to any plan year, the last day of the preceding
plan year. In the case of the first plan year of any plan, the term
"Determination Date" shall mean the last day of that plan year.
(b) Each plan maintained by the Company required to be included in the
Aggregation Group shall be treated as a Top-Heavy Plan if the
Aggregation Group is a Top-Heavy Group.
(i) The term "Aggregation Group" means --
(A) Each Plan of the Company in which a Key Employee is a
Participant, and
(B) Each other plan of the Company which enables any plan
described in Subdivision (A) to meet the requirements of
Code Sections 401(a)(4) or 410.
Also, any plan not required to be included in an Aggregation Group
under the preceding rules may be treated as being part of such a group
if the group would continue to meet the requirements of Code Sections
401(a)(4) and 410 with the plan being taken into account.
(ii) For purposes of determining --
(A) The present value of the cumulative accrued benefit of
any Employee, or
(B) The amount of the account balance of any Employee, such
present value or amount shall be increased by the aggregate
distributions made with respect to the Employee under the
plan during the five (5) year period ending on the
Determination Date. The preceding shall also apply to
distributions under a terminated plan which, if it had not
been terminated, would have required to be included in any
Aggregation Group. Also, any rollover contribution or
similar transfer initiated by the Employee and made after
December 31, 1983 to a plan shall not be taken into account
with respect to the transferee plan for purposes of
determining whether such plan is a Top-Heavy Plan (or
whether any Aggregation Group which includes such plan is a
Top-Heavy Group).
(c) If any individual is a Non-Key Employee with respect to any plan
for any plan year, but the individual was a Key Employee with respect
to the plan for any prior plan year, any accrued benefit for the
individual (and the account balance of the individual) shall not be
taken into account for purposes of this Section 15.3.
(d) If any individual has not performed services for the Company at
any time during the five (5) year period ending on the Determination
Date, any accrued benefit for such individual (and the account of the
individual) shall not be taken into account for purposes of this
Section 15.3 even though such individual may have received payments
from the Company after separation from service.
(e) In applying the foregoing provisions of this Section, the accrued
benefit of a Non-Key Employee shall be determined (i) under the
method, if any, which is used for accrual purposes under all plans of
the Company and Affiliated Companies, or (ii) if there is no such
uniform method, as if such benefit accrued not more rapidly than the
slowest accrual rate permitted under Code Section 411(b)(1)(C).
15.4 CONTRIBUTIONS.
For each Plan Year in which the Plan is Top-Heavy, the minimum
contributions for that year shall be determined in accordance with the
rules of this Section 15.4.
(a) Except as provided below, the minimum contribution for each
Non-Key Employee shall be not less than three percent (3%) of his
Compensation. For this purpose, the individual's Compensation shall be
determined in accordance with the rules of Code Section 415.
(b) Subject to the following rules of this Paragraph (b), the
percentage set forth in Paragraph (a) above shall not be required to
exceed the percentage at which contributions (including amounts
deferred by an individual under a cash or deferred arrangement under
Section 401(k) of the Code) are made (or are required to be made)
under the Plan for the year for the Key Employee for whom the
percentage is the highest for the year. This determination shall be
made by dividing the contributions for each Key Employee by so much of
his total compensation for the year as does not exceed two hundred
thousand dollars ($200,000.00). For purposes of this Paragraph (b),
all defined contribution plans required to be included in an
Aggregation Group shall be treated as one plan. However, the rules of
this Paragraph (b) shall not apply to any plan required to be included
in an Aggregation Group if the Plan enables a defined benefit plan to
meet the requirements of Code Sections 401(a)(4) or 410.
(c) The requirements of this Section 15.4 must be satisfied without
taking into account contributions under Chapters 2 or 21 of the Code,
Title II of the Social Security Act, or any other Federal or State
law.
(d) In the event a Participant is covered by both a defined
contribution and a defined benefit plan maintained by the Company,
both of which are determined to be Top-Heavy, the Company may elect,
in its discretion, to satisfy either the defined benefit minimum with
regulations issued under Code Section 416(f).
(e) In no instance may the Plan take into account an Employee's
compensation in excess of the first two hundred thousand dollars
($200,000) (or such greater Section 416(d)(2) of the Code).
<PAGE>
15.5 MAXIMUM ANNUAL ADDITIONS.
(a) Except as set forth below, in the case of any Top-Heavy Plan the
definitions of Section 13.4(b) and (c) shall be applied by
substituting "1.0" for "1.25".
(b) The rule set forth in Paragraph (a) above shall not apply if the
requirements of Subparagraphs (i) and (ii) are satisfied.
(i) The requirements of this Subparagraph (i) are satisfied if
the rules of Paragraph (a) above would be satisfied after
substituting "four percent (4%)" for "three percent (3%)" where
it appears therein.
(ii) The requirements of this Subparagraph (ii) are satisfied if
the Plan would not be a "Top-Heavy Plan" if "ninety percent
(90%)" were substituted for "sixty percent (60%)" each place it
appears in Section 15.3(a)(ii).
(c) The rules of Paragraph (a) shall not apply with respect to any
individual as long as there are no --
(i) Company Contributions, forfeitures, or voluntary
nondeductible contributions allocated to the individual, or
(ii) Accruals to the individual under a defined benefit plan
maintained by the Company.
(d) In the case where the Plan is subject to the rules of Paragraph
(a) above, the definitions of Section 13.4(b) shall be applied by
substituting "$41,500" for "$51,875."
15.6 VESTING RULES.
In the event that the Plan is determined to be Top-Heavy in accordance
with the rules of Section 15.3, then the vesting schedule of the Plan set
forth in Section 7.2 must be changed to that below.
Years of Service Unforfeitable Percentage
---------------- ------------------------
2 20%
3 40%
4 60%
5 80%
6 100%
15.7 NONELIGIBILE EMPLOYEES.
The rules of this Article XV shall not apply to any Employee included
in a unit of employees covered by an agreement which the Secretary of
Labor finds to be a collective bargaining agreement between employee
representatives and one or more employees if there is evidence that
retirement benefits were the subject of good faith bargaining between
such employee representatives and the employer or employers.
<PAGE>
ARTICLE XVI
PLAN AMENDMENTS
16.1 AMENDMENTS.
The Board of Directors or the Committee (to the extent consistent with
its charter as may be in effect from time to time) may at any time, and
from time to time, amend the Plan by an instrument in writing executed in
the name of the company by an officer or officers duly authorized to
execute such instrument, and delivered to the applicable trustee. However,
no amendment shall be made at any time, the effect of which would be:
(a) To cause any assets of the Trust Fund to be used for or diverted
to purposes other than providing benefits to the Participants and
their Beneficiaries, and defraying reasonable expenses of
administering the Plan, except as provided in Section 5.6;
(b) To have any retroactive effect so as to deprive any Participant or
Beneficiary of any accrued benefit to which he/she would be entitled
under this Plan, in contravention of Code Section 411(d)(6); or
(c) To alter or increase the responsibilities or liabilities of a
Trustee or an Investment Manager without his/her written consent.
Notwithstanding the foregoing, Sections 5.2, 5.5(c), 5.5(d), 5.5(e)
and 6.3 shall not be amended more than once in any six month period,
except as may be required to comply with changes in the Code, ERISA or
the regulations promulgated thereunder.
16.2 RETROACTIVE AMENDMENTS.
Notwithstanding any provisions of this Article XVI to the contrary,
the Plan may be amended prospectively or retroactively (as provided in
Section 401(b) of the Code) to make the Plan conform to any provision of
ERISA, any Code provisions dealing with tax-qualified employees' trusts, or
any regulation under either.
<PAGE>
ARTICLE XVII
SURVIVOR ANNUITY REQUIREMENTS
17.1 APPLICATION OF ARTICLE.
The provisions of this Article XVII shall apply only to those
Participants with respect to whom the Plan constitutes a transferee of a
tax qualified retirement plan to which the minimum survivor annuity
requirements of Code Section 401 (a)(11) apply. The provisions of this
Article XVII shall be effective January 1, 1985, except as otherwise
expressly provided in this Article XVII.
17.2 DEFINITIONS.
(a) "Qualified Joint and Survivor Annuity" shall mean an annuity --
(i) For the life of the Participant with a survivor annuity for
the life of the spouse which is not less than fifty percent (50%)
and is not greater than one hundred (100%) of the amount of the
annuity which is payable during the joint lives of the
Participant and the spouse, and
(ii) which is the actuarial equivalent of a single life annuity
for the life of the Participant.
(b) "Qualified Pre-retirement Survivor Annuity" shall mean an annuity
for the life of the surviving spouse the actuarial equivalent of which
is not less than fifty percent (50%) of the Account balance of the
Participant as of the date of his death. Notwithstanding the
foregoing, in the case of a Participant who separates from service
prior to death and dies on or before the date on which the Participant
would have attained the earliest retirement age, shall be calculated
by reference to the actual date of separation from service rather than
the date of death. For purposes of determining the amount of a
Qualified Pre-retirement Survivor Annuity, any security interest held
by the Plan by reason of a loan outstanding to the Participant shall
be taken into account.
(c) "Earliest Retirement Age" shall mean the earliest date on which,
under the Plan, the Participant could elect to receive retirement
benefits.
(d) "Annuity Starting Date" shall mean (i) the first day of the first
period for which an amount is payable as an annuity, however, the
first day of the first period for which a benefit is to be received by
reason of a Disability shall be treated as the Annuity Starting Date
only if such benefit is not an auxiliary benefit within the meaning of
Code Section 417 (f)(2)(B); or (ii) in the case of a benefit not
payable in the form of an annuity, the first day on which all events
have occurred which entitle the Participant to such benefit.
(e) "Application Election period" shall mean --
(i) In the case of an election to waive the Qualified Joint and
Survivor Annuity, the ninety (90) day period ending on the
Annuity Starting Date, or
(ii) In the case of an election to waive the Qualified
Pre-retirement Survivor Annuity, the period that begins on the
first day of the Plan Year in which the Participant attains the
age thirty-five (35) and ends on the date of the Participants
death.
In the case of a Participant who has separated from service, the period
under Subparagraph (ii) with respect to benefits accrued before the date of
separation shall not begin later than the date of the separation.
17.3 FORM OF BENEFITS PROVIDED.
Except as otherwise provided under Sections 17.4 and 17.5 --
(a) In the case of a Participant with a vested interest in the Plan
who retires, the vested portion of his or her Accounts shall be paid
in the form of a Qualified Joint and Survivor Annuity, and
(b) In the case of a Participant with a vested interest who dies
before his or her Annuity Starting Date and who has a surviving
spouse, the vested portion of his or her Accounts shall be paid in the
form of a qualified Pre-retirement Survivor Annuity to such
Participant's surviving spouse.
17.4 ELECTIONS WITH RESPECT TO SURVIVOR ANNUITIES.
(a) At any time during the Applicable Election Period, each
participant may--
(i) Elect to waive the Qualified Joint and Survivor Annuity or
the Qualified Pre-retirement Survivor Annuity (or both) for all
or any portion of his or her Accounts, and
(ii) Revoke any such election.
(b) An election under Paragraph (a) (i) above shall not take effect
unless --
(i) The spouse of the Participant consents in writing to the
election, such election designates a beneficiary or a form of
benefits (including remaining benefits that a beneficiary may
receive) which may not be changed without spousal consent (unless
the original consent (1) acknowledges the right to limit consent
to a specific beneficiary and (2) expressly permits designations
by the Participant without the requirement of any further consent
by the spouse), and the spouse's consent acknowledges the effect
of the election and is witnessed by a Plan representative or a
notary public; or
(ii) It is established to the satisfaction of a Plan
Representative that the consent required by Subparagraph (i)
above may not be obtained because there is no spouse, because the
spouse cannot be located, or because of such other circumstances
as may be set forth in regulations under Code Section 417 (a)(2),
and
(iii) Any consent (or establishment that the consent of a spouse
may not be obtained) under this Paragraph (b) shall be effective
only with respect to that spouse.
For purposes of this Paragraph (b), "Plan Representative" shall mean
the person or persons designated by the Committee to perform the
duties required specified herein.
(c) Within a reasonable period of time before the Participant's
Annuity Starting Date (and consistent with regulations under Section
417 (a)(3)(A) of the Code) each Participant shall receive a written
explanation of --
(i) The terms and conditions of the Qualified Joint and Survivor
Annuity,
(ii) The Participant's right to make, and the effect of, an
election under Paragraph (a) above to waive the Qualified Joint
and Survivor Annuity form of benefit,
(iii) The rights of the Participant's spouse under Paragraph (b)
above, and
(iv) The right to make, and the effect of, a revocation of an
election under Paragraph (a) above.
(d) To the extent and in the manner required under applicable
Regulations, each Participant shall be given a written explanation
with respect to the Qualified Pre-retirement Annuity comparable to
that required under Paragraph (c) above. The explanation shall be
given to the Participant within the "applicable period". The
"applicable period" shall mean whichever of the following ends latest:
(i) the period beginning with the first day of the Plan Year in which
the Participant attains age 32 and ending with the close of the Plan
Year in which the Participant attains age 35; (ii) a reasonable period
after becoming a Participant; (iii) a reasonable period after the
survivor benefit applicable to a Participant is no longer subsidized
as defined in Code ss.417(a)(4); (iv) a reasonable period after the
survivor benefit provisions of ss.401(a)(11) become applicable with
respect to a Participant; or (v) a reasonable period after separation
of service in he case of a Participant who incurs a severance prior to
attaining age 35. Notwithstanding the above, (i) in the case of
Participant who separates from service prior to attaining age 32, such
applicable period shall be within one year after the date of
separation; or (ii) in the case of an Employee who becomes a
Participant after attaining age 32, such applicable period shall be no
later than the end of the three-year period beginning with the first
day of the Plan Year in which the Employee becomes a Participant. The
provisions of the Paragraph (d) shall be interpreted and carried out
in a manner that is consistent with the regulations issued under Code
ss.417(a)(3)(B).
(e) The above provisions of this Section 17.4 shall not apply with
respect to any benefits attributable to a plan if the failure to waive
the Qualified Joint and Survivor Annuity or the Qualified
Pre-retirement Survivor Annuity would not result in a (i) decrease in
any benefit payable with respect to the Participant or (ii) increased
contributions from the Participant.
17.5 MARRIAGE REQUIREMENT.
(a) Except as provided in Paragraph (b) below, a Qualified Joint and
Survivor Annuity (or a Qualified Pre-retirement Survivor Annuity) will
not be provided unless the Participant and his/her spouse have been
married throughout the one (1) year period ending on the earlier of
(i) the Participant's Annuity Starting Date, or (ii) the date of the
Participant's death.
(b) If (i) a Participant marries within one (1) year of his/her
Annuity Starting Date, and (ii) the Participant and the Participant's
spouse in such marriage have been married for at least a one (1) year
period ending on or before the date of the Participant's death, the
Participant and such spouse shall be treated as having been married
throughout the one (1) year period ending on the Participant's Annuity
Starting Date.
17.6 LUMP SUM DISTRIBUTIONS
(a) Notwithstanding the preceding provisions of this Article XVII, if
the present value of the Participant's benefit (payable in either the
Qualified Joint and Survivor Annuity or in the Qualified
Pre-retirement Survivor Annuity) does not exceed thirty-five hundred
dollars ($3,500), the benefit shall be paid in a single lump sum.
However, no such lump sum benefit shall be paid after the
Participant's Annuity Starting Date, unless the Participant and the
spouse of the Participant (or where the Participant has died, the
surviving spouse) consents in writing to such distribution in the same
manner as required under Section 17.4.
(b) If (i) the present value of the Participant's benefit exceeds
thirty-five hundred dollars ($3,500), and (ii) the Participant and the
spouse of the Participant (or where the participant has died, the
surviving spouse consent in writing to the distribution in the same
manner as required under Section 17.4, the benefit may be paid in a
lump sum.
(c) For purposes of this Section 17.6, the present value of a
qualified Joint and Survivor Annuity or a Qualified Pre-retirement
Survivor Annuity shall be determined as of the date of distribution
and by using the interest rate which could be used (as of the date of
the distribution) by the Pension Benefit Guaranty Corporation for
purposes of determining the present value of a lump sum distribution
on plan termination.
17.7 SECURITY FOR LOANS.
If the use of any Participant's Accounts (or any portion thereof)
as security for a loan made pursuant to Section 14.3 meets the
requirements of this Section 17.7, nothing in this Section or any
Section of this Plan intended to comply with Code Section 411(a)(11)
shall prevent any distribution required by failure to comply with the
terms of such loan. The requirements of this section are satisfied if:
(i) the spouse of the Participant (if any) consents in writing to
such use during the 90 day period ending on the date on which the
loan is to be so secured, and
(ii) requirements comparable to the requirements of Section 17.4
(b) are met with respect to such consent.
The provisions of this Section 17.7 shall apply to all loans made
after August 18, 1985.
17.8 PURCHASE OF ANNUITY CONTRACT TO PROVIDE BENEFITS.
The Committee shall provide any of the forms of benefits payable under
Section 17.3 by the application of the Participant's Account balances
to the purchase of an annuity or other insurance contract issued by
any insurance company authorized to conduct an insurance business
under the authority of any state government. Any annuity or other
insurance contract purchased by the Trustee and distributed to a
Participant or a spouse to provide benefits under the Plan shall
satisfy the applicable requirements of this Article XVII. It is the
intention of the Company that whenever an annuity or other insurance
contract providing benefits is purchased, the benefits anticipated to
be provided under such contract shall be the actuarial equivalent of
the Participant's Account balances applied to the purchase of such
contract. However, the purchase of such a contract at reasonable
annuity purchase rates prevailing at the time of purchase shall be
deemed to be the purchase of benefits having an actuarial equivalent
value of the amount of the Participant's Account balances applied to
purchase such contract. The purchase of any such contract shall be a
full and complete discharge of the Plan, the Trustee, the Company, and
any Committee acting on behalf of the Plan, with respect to the
payment of benefits of the Participant or his spouse under this Plan.
<PAGE>
ARTICLE XVIII
MISCELLANEOUS
18.1 NO ENLARGEMENT OF EMPLOYEE RIGHTS.
(a) This Plan is strictly a voluntary undertaking on the part of the
Company and shall not be deemed to constitute a contract between the
Company and any Employee, or to be consideration for, or an inducement
to, or a condition of, the employment of any Employee.
(b) Nothing contained in this plan or the Trust shall be deemed to
give any Employee the right to be retained in the employ of the
Company or to interfere with the right of the Company to discharge or
retire any Employee at any time.
(c) No Employee, nor any other person, shall have any right to or
interest in any portion of the Trust Fund other than as specifically
provided in this Plan.
18.2 INSPECTION OF RECORDS.
No Participant, other than a Participant of the Committee or an
individual authorized by the Committee or the Company, may inspect the
records of the Committee relating to any other Participant.
18.3 MAILING OF PAYMENTS AND ADDRESSES.
(a) All payments under the Plan shall be delivered in person or mailed
to the last address of the Participant (or, in the case of death of
the Participant, to the last address of any other person entitled to
such payments under the terms of the Plan).
(b) Each Participant shall be responsible for furnishing the Committee
with his/her correct current address and the correct current name and
address of his/her Beneficiary or Beneficiaries.
18.4 NOTICES AND COMMUNICATIONS.
(a) All applications, notices, designations, elections, and other
directions and correspondence from Participants shall be communicated
in the form and manner prescribed by the Committee.
(b) Each notice, report, remittance, statement, and other
communication directed to Participant or Beneficiary shall be in
writing and may be delivered in person or by mail. An item shall be
deemed to have been delivered and received by the Participant when it
is deposited in the United States Mail with postage prepaid, addressed
to the Participant or Beneficiary at his/her last address of record
with the Committee.
18.5 GOVERNING LAW.
All legal questions pertaining to the Plan shall be determined in
accordance with the provisions of ERISA and the laws of the State of
Delaware.
18.6 INTERPRETATION.
(a) Article and Section headings are for convenient reference only and
shall not be deemed to be part of the substance of this instrument or
in any way to enlarge or limit the contents of any Article or Section.
(b) Unless the context clearly indicates otherwise, masculine gender
shall include the feminine, and the singular shall include the plural
and the plural the singular.
(c) The provisions of this plan shall in all cases be interpreted in a
manner that is consistent with this Plan satisfying the requirements
of Code Section 401 (a) for qualification as an employees' trust.
18.7 WITHHOLDING FOR TAXES.
Any payments out of the Trust Fund may be subject to withholding for
taxes as may be required by any applicable federal or state law.
18.8 SUCCESSORS AND ASSIGNS.
This Plan and the Trust established hereunder shall insure to the
benefit of, and be binding upon, the parties hereto and their successors
and assigns.
18.9 COUNTERPARTS.
This plan document may be executed in any number of identical
counterparts. Each such counterpart shall be deemed a complete original in
itself and may be introduced in evidence or used for any other purpose
without the production of any other counterparts.
IN WITNESS WHEREOF, in order to record the restatement of this plan,
AMERICAN STORES COMPANY has caused this instrument to be executed by its
duly authorized officer _____ day of ________________, 19___.
AMERICAN STORES COMPANY
By:
-----------------------------------
Title:
--------------------------------
Exhibit 4.17
FIRST AMENDMENT TO THE
AMERICAN STORES RETIREMENT ESTATES
(1994) RESTATEMENT
The American Stores Retirement Estates (1994 Restatement) is hereby
amended in the following respects.
A. Section 2.15 (e) shall be amended in its entirety, effective
January 1, 1994, to read as follows:
"Compensation" of any Employee taken into account under the Plan
for any Plan Year that begins on or after January 1, 1989 shall not
exceed the annual compensation limit in effect under Section 401 (a)
(17) of the Code for a calendar year. Any cost-of-living adjustment in
effect for a calendar year under Section 401 (a) (17) of the Code
shall apply to any period used to determine Compensation, not to
exceed twelve (12) months, that begins in such calendar year.
(i) "Compensation" of any Employee taken into account under
the Plan for any Plan Year that begins on or after January 1,
1994 shall not exceed $150,000, as that amount is adjusted in
accordance with Section 401 (a) (17) (B) of the Code.
(ii) "Compensation" of any Employee taken into account under
the Plan any Plan Year that begins on or after January 1, 1989
and before January 1, 1994, shall not exceed $200,000, as that
amount is adjusted at the same time and in the same manner as
under Section 415 (d) of the Code.
(iii) If Compensation for a period of less than twelve (12)
months is taken into account for any Plan year, then, to the
extent required by regulations under Section 401 (a) (17) of the
Code, the otherwise applicable annual Compensation limit provided
under this Subsection is reduced in the same proportion as the
reduction in the twelve-month period.
(iv) The family aggregation rules of Section 414 (q) (6) of
the Code shall apply for purposes of the annual Compensation
limit provided under this Subsection, except in applying such
rules, the term "family" shall include only the Spouse of the
Employee and any lineal descendants of the Employee who have not
attained age 19 before the close of the year. If, as a result of
the application of such rules the limit is exceeded, then, the
limit shall be prorated among the affected individuals in
proportion to each such individual's Compensation as determined
under this Subsection prior to the application of this limit.
B. Section 8.9 (c) shall be deleted and a new Section 8.10 "Election
for Direct Rollover" shall be added, effective as of January 1, 1993, to
read in its entirety as follows:
(a) To the extent required by Section 401 (a) (31) of the Code, a
Participant whose Accounts become payable in an "eligible rollover
distribution," as defined in (b) (i) below, shall be entitled to make
an election for a direct rollover of all or a portion of such eligible
rollover distribution to an "eligible retirement plan", as defined in
(b) (ii) below. Any non-taxable portion of the value of a
Participant's Accounts shall be payable to the Participant as
otherwise provided elsewhere in the Plan.
(b) For purposes of this Section,
(i) an "eligible rollover distribution" shall mean any
distribution of all or any portion of the value of a
Participant's Accounts, except that an eligible rollover
distribution shall not include: any distribution that is one of a
series of substantially equal periodic payments (not less
frequently than annually) made for the life (or life expectancy)
of the Participant or the joint lives (or joint life
expectancies) of the Participant's designated Beneficiary, or for
a specified period of ten years or more; any distribution to the
extent such distribution is required under Section 401 (a) (9) of
the Code; and the portion of any distribution that is not
includible in gross income (determined without regard to the
exclusion for net unrealized appreciation with respect to
employer securities), and
(ii) an "eligible retirement plan" shall mean any plan
described in Code Section 402 (c) (8) (B), the terms of which
permit the acceptance of a direct rollover from a qualified plan.
(c) A Participant's direct rollover election under this Section
shall specify the dollar or percentage amount of the direct rollover,
the name and address of the eligible retirement plan selected by the
Participant and such additional information as the Committee deems
necessary of appropriate in order to implement the Participant's
election. It shall be the Participant's responsibility to confirm that
the eligible retirement plan designated in the direct rollover
election will accept the eligible rollover distribution. The Committee
shall be entitled to effect the direct rollover based on its
reasonable reliance on information provided by the Participant, and
shall not be required to independently verify such information, unless
it is clearly unreasonable not to do so.
(d) At least thirty (30) days, but not more than ninety (90)
days, prior to the date the value of a Participant's Accounts becomes
payable, the Participant shall be given written notice of any right he
may have to elect a direct rollover of his eligible rollover
distribution. Except in the case of a Participant to whom the
provisions of Article XVIII apply, a Participant who has received the
direct rollover notice may waive the thirty (30) day advance notice
requirement by making an affirmative election to make or not to make a
direct rollover of all or a portion of his Accounts.
(e) If a Participant whose Accounts become payable in an eligible
rollover distribution fails to file a direct rollover election with
the Committee within ninety (90) days after receipt of the direct
rollover notice, or if the Committee is unable to effect the rollover
within a reasonable time after the election is filed with the
Committee due to the failure of the Participant to take such actions
as may be required by the eligible retirement plan before it will
accept the rollover, the value of the eligible rollover distribution
shall be paid to them in accordance with the applicable provisions of
this Plan, after withholding any applicable income taxes.
(f) To the extent required by Section 401 (a) (31) of the Code,
if all or a portion of the value of a Participant's Accounts is
payable to this surviving spouse in an eligible rollover distribution,
or to a former spouse in accordance with a "qualified domestic
relations order," such surviving spouse or former spouse shall be
entitled to elect a direct rollover of all or a portion of such
distribution to an individual retirement account or an individual
retirement annuity in accordance with the provisions of this Section.
IN WITNESS WHEREOF, this instrument of amendment is executed this ____ day
of __________, 1994.
AMERICAN STORES COMPANY
By:
------------------------------
Title:
---------------------------
Exhibit 4.18
SECOND AMENDMENT TO THE
AMERICAN STORES RETIREMENT ESTATES
(1994 RESTATEMENT)
The American Stores Retirement Estates (1994 Restatement) is hereby
amended in the following respects.
A. Section 6.3(b)(i) shall be amended, effective January 1, 1994, to
read as follows:
(i) This amount shall be allocated to the Company Match on
Contributions Account of each Participant who made Spring Contributions
(whether Tax Deferred Contributions or Taxed Contributions) during the Plan
Year. The portion of the total amount that will be allocated to the Account
of a Participant will be the same ratio as the amount of the Participant's
Sharing Contributions during the Plan Year (which have not been withdrawn
by the Participant pursuant to Section 8.1 (other than withdrawals pursuant
to Section 8.1(f)) or returned pursuant to Section 4.4, 4.5, or 4.7) bear
to the total amount of all such Sharing Contributions of all Participants.
IN WITNESS WHEREOF, this instrument of amendment is executed this
___ day of _____________, 199_.
AMERICAN STORES COMPANY
By:
---------------------------
Title:
--------------------------
Exhibit 4.19
THIRD AMENDMENT TO THE
AMERICAN STORES RETIREMENT ESTATES
(1994 RESTATEMENT)
The American Stores Retirement Estates (1994 Restatement) is hereby
amended in the following respects.
A. Section 14.3 (h) shall be amended, effective January 1, 1995, to
read as follows:
(h) If, for any reason, repayment of any loan granted to a
Participant pursuant to this Section 14.3 can no longer be made by means of
payroll deduction, including but not limited to separation from service,
and such Participant does not, immediately upon the request of Plan
administrators, submit payment for the outstanding balance of such loan,
such loan shall be considered in default with the outstanding balance of
such loan immediately due and payable. The Plan administrator may, however,
upon (i) the occurrence of a Leave of Absence by a Participant, (ii) a
separation from service whereby the Internal Revenue Service's "same desk
rule" applies to the Participant, or (iii) upon closure or sale of a unit
of the Company to an entity that is not an Affiliated Company which does
not constitute a partial termination under Section 11.5 permit such
Participant to continue voluntarily to make regularly scheduled loan
payments other than by payroll deduction. If such a Participant does not
make all such payments as scheduled, the loan shall be considered in
default, with the outstanding balance of the loan immediately due and
payable. Upon such default, the Participant's interest in his or her
Accounts, as security for such loan, shall be reduced by the amount of such
outstanding balance and such reduction shall be treated as a distribution
under this Plan. Notwithstanding the foregoing, any amounts in the
Participant's Tax Deferred Contributions Account shall not be reduced in
satisfaction of the outstanding loan balance unless or until such
Participant has separated from service or unless such Participant qualifies
for a Hardship distribution pursuant to Section 8.1(b).
B. Section 14.3 shall be amended effective January 1, 1995 to add a
new paragraph (m) which shall read as follows:
(m) For purposes of this Section 14.3, the term
"Participant" shall include any Eligible Employee who has a Rollover
Account under the Plan regardless of whether such Eligible Employee has met
the eligibility requirements of Article III of the Plan.
IN WITNESS WHEREOF, this instrument of amendment is executed this
___ day of_______________, 199_.
AMERICAN STORES COMPANY
By:
-----------------------------
Title:
--------------------------
Exhibit 4.20
FOURTH AMENDMENT TO THE
AMERICAN STORES RETIREMENT ESTATES
(1994 RESTATEMENT)
The American Stores Retirement Estates (1994 Restatement) is hereby amended
in the following respects as a condition to the Favorable Determination
Letter issued by the Internal Revenue Service on May 9, 1995.
A. Section 2.39 of the Plan shall be deleted and the remaining sections
of Article II shall be renumbered accordingly. A new Section shall be
added following Section 2.25 and the remaining sections of Article II
shall be renumbered accordingly. The new section shall read as
follows:
Full-Time Employee
"Full-Time Employee" shall mean an Employee who ordinarily and on
a regular basis works to the number of hours prescribed by the
Employer from time to time as the normal full-time work week of the
Employee group to which the Employee is assigned.
B. Section 2.40 of the Plan shall be deleted and the remaining sections
of Article II shall be renumbered accordingly. A new Section shall be
added following Section 2.35 and the remaining sections of Article II
shall be renumbered accordingly. The new section shall read as
follows:
Part-Time Employee
"Part-time Employee" means an employee whose customary employment
is less than the normal full-time work week of the Employee group to
which the Employee is assigned.
C. The Plan shall be amended to change all references to "Regular
Full-Time Employee" to "Full-Time Employee" and all references to
"Regular Part-time Employee" to "Part-time Employee."
D. Section 3.1(a) of the Plan shall be revised as follows:
Prior to July 1, 1995, each Eligible Employee shall become
eligible to participate in the Plan upon the day ("Eligibility Date")
coincident with the earlier of:
(i) The completion of two Years of Service;
or
(ii) Attainment of the later of age twenty-one (21) or
completion of one (1) Year of Service.
Effective on and after July 1, 1995, each Eligible Employee shall
become eligible to participate in the Plan on the day ("Eligibility
Date") the Eligible Employee completes one (1) Year of Service.
E. Section 4.3(a)(iii) of the Plan shall be revised to read as follows:
(iii) In the event the test under (i) above cannot be satisfied,
the Committee shall determine if use of the alternative test
under (ii) above is available. If the Committee determines
that the alternative test is not available, either the
Actual Deferral Percentage or the Average Contribution
Percentage (as defined in Section 4.6) for Highly
Compensated Participants eligible to participate in this
Plan and a plan of the Company or an Affiliated Company that
is subject to the limitations of Section 401(k) and (m) of
the Code including, if applicable, this Plan, shall be
reduced as described below so that there is no multiple use
of the alternative limitation.
(A) The Actual Deferral Percentage of the Highly
Compensated Participant with the highest Actual Deferral
Percentage first is reduced by the amount required to cause
the employee's Actual Deferral Percentage to equal the ratio
of the Highly Compensated Participant with the next highest
Actual Deferral Percentage. If a lesser reduction would
enable the arrangement to satisfy the Actual Deferral
Percentage tests, only the lesser reduction shall be made.
This process shall be repeated until the Plan satisfies the
Actual Deferral Percentage tests. The highest Actual
Deferral Percentage remaining under the Plan after leveling
is the highest permitted Actual Deferral Percentage.
(B) The Contribution Percentage of the Highly
Compensated Participant with the highest Average
Contribution Percentage shall be reduced by the amount
required to cause the employee's Average Contribution
Percentage to equal the ratio of the Highly Compensated
Participant with the next highest Average Contribution
Percentage. If a lesser reduction would enable the Plan to
satisfy the Average Contribution Percentage test, only the
lesser reduction shall be made. This process shall be
repeated until the Plan satisfies the Average Contribution
Percentage test. The highest Average Contribution Percentage
remaining under the Plan after leveling is the highest
permitted Average Contribution Percentage.
F. Section 4.4(c) shall be revised to add the following new sentence to
the end thereof:
The amount of Tax Deferred Contributions in excess of the $7000
limit as described in Section 4.2(a) that may be distributed with
respect to a Participant for a taxable year shall be reduced by any
excess Compensation Deferral Contributions previously distributed with
respect to the Participant for the Plan Year beginning with or within
the taxable year.
G. Section 4.5(b) shall be revised to add the following new language to
the end thereof:
The amount of any excess Compensation Deferral Contributions is
the amount by which the Highly Compensated Participant's Compensation
Deferral Contributions must be reduced for the Highly Compensated
Participant's actual deferral ratio under the Plan. To calculate the
highest permitted Actual Deferral Percentage, the Actual Deferral
Percentage of the Highly Compensated Participant with the highest
Actual Deferral Percentage is reduced by the amount required to cause
the Highly Compensated Participant's Actual Deferral Percentage to
equal the ratio of the Highly Compensated Participant with the next
highest Actual Deferral Percentage. This process shall be repeated
until the Plan satisfies the Actual Deferral Percentage Test.
H. Section 4.5(b) shall be revised further to add the following new
language to the end thereof:
In the event a Highly Compensated Participant's Actual Deferral
Percentage is determined under Section 4.3(e) above ("family
aggregation rules"), excess Compensation Deferral Contributions shall
be determined by reducing the Actual Deferral Percentage in accordance
with the "leveling" method described in Treasury Regulation Section
1.401(k) - 1(f)(2) and the excess Compensation Deferral Contributions
shall be allocated among the family members in proportion to the
Compensation Deferral Contributions of each family member that have
been combined.
I. Section 4.7(b) shall be revised to add the following new language to
the end thereof:
The amount of any excess Taxed Contributions or Company Match on
Contributions is the amount by which the Highly Compensated
Participant's Taxed Contributions or Company Match on Contributions
must be reduced for the Highly Compensated Participant's Average
Contribution Percentage to equal the highest permitted Average
Contribution Percentage under the Plan. To calculate the highest
permitted Average Contribution Percentage, the Average Contribution
Percentage of the Highly Compensated Participant with the highest
Average Contribution Percentage is reduced by the amount required to
cause the Highly Compensated Participant's Average Contribution
Percentage to equal the ratio of the Highly Compensated Participant
with the next highest Average Contribution Percentage. This process
shall be repeated until the Plan satisfies the Average Contribution
Percentage Test.
J. Section 4.7(b) shall be revised further to add the following new
language to the end thereof:
In the event a Highly Compensated Participant's Average
Contribution Percentage is determined under Section 4.6(e) above
("family aggregation rules"), excess Company Match on Contributions
and Taxed Contributions shall be determined by reducing the Average
Contribution Percentage in accordance with the "leveling' method
described in Treasury Regulation Section 1.401(m) - 1(e)(2) and the
excess Company Match on Contributions and Taxed Contributions shall be
allocated among the family members in proportion to the Company Match
on Contributions and Taxed Contributions of each family member that
have been combined
K. The second sentence of Section 5.6(b) shall be revised to read as
follows:
All Company Contributions to the Trust are hereby conditioned
upon the Plan initially satisfying all of the requirements of Code
Section 401(a).
L. Section 8.3(d) shall be revised to add the following new sentence to
the end thereof:
If a Participant dies after distributions have begun in
accordance with paragraph (c) above, the remaining portion of the
Participant's vested benefit will be distributed at least as rapidly
as the method of distribution being used as of the date of the
Participant's death.
M. Section 13.3 of the Plan shall be amended to add a new paragraph (d)
which shall read as follows:
(d) Notwithstanding the above, if a Participant was a
participant as of the first day of the first limitation year
beginning after December 31, 1986 in one or more defined
benefit plans maintained by the Company which were in
existence on May 6, 1986, and such Participant's current
accrued benefit as of the end of the 1986 limitation year
exceeds the dollar limitations of Code Section 415 as
effective January 1, 1987, such Participant's dollar
limitation for purposes of Code Section 415 is the
Participant's accrued benefit as of the end of the 1986
limitation year provided the plan met the Code Section 415
requirements for all limitation years beginning prior to
January 1, 1987.
N. Section 13.3 of the Plan shall be amended to add a new paragraph (e)
which shall read as follows:
(e) If the accrued benefit of any Participant in a defined
benefit plan exceeds the dollar limitations of Code Section
415 as effective January 1, 1987 (including the protected
current accrued benefit), the accrued benefit shall be
reduced as of the first day of the first limitation year
beginning after December 31, 1986 to the level permitted by
Code Section 415 as effective January 1, 1987.
O. Section 13.6 of the Plan shall be amended to add the following new
provision to the end thereof:
Plans in existence on May 6, 1986 shall not be disqualified for
any limitation year beginning before January 1, 1987 only because such
plan provides for Annual Additions or annual benefits which exceed the
limits of Code Section 415 which were effective January 1, 1987,
provided the plans complied with Code Section 415 as then in effect
for all limitation years beginning before January 1, 1987.
P. Section 15.2 shall be amended to read as follows:
15.2 Definitions.
(a) For purposes of this Article XV, the term "Key Employee" shall
mean any Employee who, at any time during the Plan Year or any of
the four (4) preceding Plan Years, is or was --
(i) An officer of the Company having an annual compensation from
the Company greater than fifty percent (50%) of the amount
in effect under Section 415 (b)(1)(A) of the Code for the
applicable Plan Year. However, no more than fifty (50)
Employees (or, if lesser, the greater of three (3) or ten
percent (10%) of the Employees) shall be treated as
officers;
(ii) One of the ten (10) employees having annual compensation
from the Company of more than the limitation in effect under
Code Section 415 (c)(1)(A) and owning (or considered as
owning within the meaning of Code Section 318) the largest
interests in the Company. For this purpose, if two (2)
Employees have the same interest in the Company, the
employees having greater annual compensation from the
Company shall be treated as having a larger interest;
(iii) A Five Percent Owner of the Company;
or
(iv) A One Percent Owner of the Company having an annual
compensation from the Company of more than one hundred fifty
thousand dollars ($150,000.00).
(b) For purposes of this Section 15.2, the term "Five Percent Owner"
means any person who owns (or is considered as owning within the
meaning of Code Section 318) more than five percent (5%) of the
outstanding stock of the Company or stock possessing more than
five percent (5%) of the total combined voting power of all stock
of the Company. The rules of Subsections (b), (c), and (m) of
Code Section 414 shall not apply for purposes of applying these
ownership rules.
(c) For purposes of this Section 15.2, the term "One Percent Owner"
means any person who would be described in Paragraph (b) if "one
percent (1%)" were substituted for "five percent (5%)" each place
where it appears therein.
(d) For purposes of this Section 15.2, the rules of Code Section
318(a)(2)(C) shall be applied by substituting "five percent (5%)"
for "fifty percent (50%)."
(e) For purposes of this Article XV, the term "Non-Key Employee"
shall mean any Employee who is not a Key Employee.
(f) For purposes of this Article XV, the terms "Key Employee" and
"Non-Key Employee" include their Beneficiaries, and inherited
benefits will retain the character of the benefits of the
Employee who performed services for the Company.
Q. The second sentence of Section 15.4(b) shall be amended to read as
follows:
This determination shall be made by dividing the contributions
for each Key Employee by so much of his total compensation as does not
exceed $200,000 for Plan Years beginning prior to January 1, 1994 or
$150,000 for Plan Years beginning on or after January 1, 1994 (as
adjusted under the Code).
R. Section 15.4(b) shall be further amended to add a new sentence after
the second sentence which shall read as follows:
For any year in which the Plan is Top Heavy, each Non-Key
Employee will receive the minimum contribution if the Non-Key Employee
has not separated from service at the end of the Plan Year, regardless
of whether the Non-Key Employee has less than 1000 Hours of Service
(or the equivalent) and regardless of the Non-Key Employee's level of
Compensation.
S. Section 15.4(e) shall be amended to read as follows:
In no instance may the Plan take into account an Employee's
compensation in excess of the first $200,000 for Plan Years beginning
prior to January 1, 1994 or $150,000 for Plan Years beginning on or
after January 1, 1994.
T. Section 16.1 of the Plan shall be amended to add a new paragraph (d)
which shall read as follows:
Any Employee who was a Participant as of the later of the
effective date or adoption date of any amendment to the Plan's vesting
schedule and who completed 3 years of service may elect to have his
nonforfeitable percentage determined under the Plan without regard to
such amendment. Notwithstanding the foregoing, for Plan Years
beginning before January 1, 1989, or with respect to Employees who
fail to complete at least 1 Hour of Service in a Plan Year beginning
after December 31, 1988, 5 shall be substituted for 3 in the foregoing
sentence.
U. Section 16.1(b) of the Plan shall be amended to read as follows:
(b) To have the effect, retroactive or otherwise, of reducing,
restricting or depriving, either directly or indirectly, the accrued
benefit provided any Participant prior to the amendment.
V. Section 17.2(a) of the Plan shall be amended to read as follows:
(a) "Qualified Joint and Survivor Annuity" shall mean an annuity
that commences immediately
(i) For the life of the Participant with a survivor annuity
for the life of the spouse which is not less than fifty
percent (50%) and is not greater than one hundred
percent (100%) of the amount of the annuity which is
payable during the joint lives of the Participant and
the spouse, and which is the actuarial equivalent of a
single life annuity for the life of the Participant, or
(ii) For an unmarried Participant, an annuity for the life
of the Participant unless the Participant elects
otherwise during the Applicable Election Period.
Such term shall also refer to any annuity in a form having the effect
of an annuity described above.
The foregoing Amendments shall be effective as of the dates specified in
Section 2.20, Effective Date, except as otherwise indicated.
In Witness Whereof, this instrument of amendment is executed this day __ of
__________, 199_.
American Stores Company
By:
------------------------------
Title:
---------------------------
Exhibit 4.21
FIFTH AMENDMENT TO THE
AMERICAN STORES RETIREMENT ESTATES
(1994 RESTATEMENT)
The American Stores Retirement Estates (1994 Restatement)("ASRE") is
hereby amended in the following respects.
A. Effective August 1, 1996, ASRE shall be merged with Jewel Companies
Retirement Estates ("JCRE"), with ASRE being the surviving plan; provided
that the sum of the account balances in ASRE and JCRE prior to the merger
shall equal the fair market value of the assets of the merged plan, and
provided further, that immediately after the merger each participant in the
merged plan shall have an account balance equal to the sum of the account
balances the participant had in the plans immediately prior to the merger.
B. Effective October 1, 1996, Section 5.4(b)(iv) of the Plan shall be
amended to read as follows:
The Short Maturity Fund invested in short-term fixed income
investments and other securities including obligations of the United States
Government and its agencies and short-term liquid investments; and
IN WITNESS WHEREOF, this instrument of amendment is executed this ___
day of ___________, 199_.
AMERICAN STORES COMPANY
By:
------------------------------
Senior V.P. Human Resources
Exhibit 4.22
SIXTH AMENDMENT TO THE
AMERICAN STORES RETIREMENT ESTATES
(1994 RESTATEMENT)
The American Stores Retirement Estates is hereby amended in the
following respects.
A. Section 5.4(e) shall be amended to read as follows:
A Participant or Eligible Employee, as applicable, may elect to
exchange up to one hundred percent (100%) of the amounts accrued in
such individual's Accounts once each calendar day among any of the
Investment Funds currently offered by the Employee shall effect such
an exchange in the manner prescribed by the Committee. Notwithstanding
the foregoing, a Participant or Eligible Employee may not elect to
exchange amounts into or out of the American Stores Company Stock Fund
if the result would be effect an incoming exchange within 30 days of
an outgoing exchange or an insufficient liquidity in the Trust,
transactions described in this Section 5.4(e) may be suspended for a
term certain or queued on a first come - first serve basis as such
liquidity is restored.
The foregoing amendment shall be effective October ______, 1997.
In Witness Whereof, this instrument of amendment is executed this ______
day of _________ 1997.
American Stores Company
By:
------------------------------------
Chairman, Benefit Plans Committee and
Senior Vice President, American Stores
Company
Exhibit 4.23
SEVENTH AMENDMENT TO THE
AMERICAN STORES RETIREMENT ESTATES
(1994 RESTATEMENT)
The American Stores Retirement Estates is hereby amended in the
following respects.
A. Section 5.4(e) shall be amended to read as follows:
A Participant or Eligible Employee, as applicable, may elect to
exchange up to one hundred percent (100%) of the amounts accrued in
such individual's Accounts once each calendar day among any of the
Investment Funds currently offered by the Committee and currently
available to such individual. A Participant or Eligible Employee shall
effect such an exchange in the manner prescribed by the Committee.
Notwithstanding the foregoing, a Participant or Eligible Employee may
not elect to exchange amounts into or out of the American Stores
Company Stock Fund if the result would be to effect an incoming
exchange within 30 days of an outgoing exchange or an outgoing
exchange within 30 days of an incoming exchange. To the extent there
is insufficient liquidity in the Trust, transactions described in this
Section 5.4(e) may be suspended for a term certain or queued on a
first come - first serve basis as such liquidity is restored.
The foregoing amendment shall be effective October __, 1997.
In Witness Whereof, this instrument of amendment is executed this ____ day
of _______1997.
American Stores Company
By:
------------------------------------
Chairman, Benefit Plans Committee and
Senior Vice President, American Stores
Company
Exhibit 4.24
EIGHTH AMENDMENT TO THE
AMERICAN STORES RETIREMENT ESTATES
(1994 RESTATEMENT)
The American Stores Retirement Estates is hereby amended in the following
respects.
A. Section 8.3(c) shall be amended to add a new subparagraph (3) to
the end thereof which shall read as follows:
(3) For the period beginning after December 31, 1996, April 1 of
the calendar year following the later of the calendar year in which
the Participant (i) attains age 70 1/2, or (ii) retires; provided,
however, that the foregoing clause (ii) shall not apply with respect
to a Participant who is a Five Percent Owner (as defined in Section
416 of the Code) with respect to the Plan Year ending in the calendar
year in which the Participant attains age 70 1/2.
The foregoing amendment shall be effective January 1, 1997.
In Witness Whereof, this instrument of amendment is executed this ____ day
of _______1997.
American Stores Company
By:
------------------------------------
Chairman, Benefit Plans Committee
and Senior Vice President, American
Stores Company
Exhibit 4.25
NINTH AMENDMENT TO THE
AMERICAN STORES RETIREMENT ESTATES
(1994 RESTATEMENT)
The American Stores Retirement Estates is hereby amended in the following
respects.
A. Section 8.3(c) shall be amended to add a new subparagraph (4) to
the end thereof which shall read as follows:
(4) Special Rule For Certain Participants. Participants who began
receiving distributions under this Section 8.3(c) prior to January 1,
1997 but are currently actively employed by the Employer may elect on
such form or forms as the Plan Administrator shall prescribe to stop
distributions until such Participant's new Required Beginning Date
which shall be determined under Section 8.3(c) (3) above, subject to
the terms of any applicable Qualified Domestic Relations Order.
The foregoing amendment shall be effective January 1, 1997.
In Witness Whereof, this instrument of amendment is executed this ____ day
of _______1997.
American Stores Company
By:
------------------------------------
Chairman, Benefit Plans Committee
and Senior Vice President, American
Stores Company
EXHIBIT 5.1
[ALBERTSON'S INC. LETTERHEAD]
June 24, 1999
Albertson's, Inc.
250 Parkcenter Boulevard
P.O. Box 20
Boise, Idaho 83726
Re: Registration Statement on Form S-8
Ladies and Gentlemen:
I am the Executive Vice President and General Counsel of Albertson's,
Inc., a Delaware corporation (the "Company"). The Company is filing with
the Securities and Exchange Commission Post-Effective Amendment No. 1 on
Form S-8 to Form S-4 (the "Registration Statement") covering an aggregate
of 23,115,295 shares (the "Shares") of Common Stock, par value $1.00 per
share, of the Company, issuable pursuant to (i) the Company's Amended and
Restated 1995 Stock-Based Incentive Plan (the "Albertson's Stock Plan") -
(20,000,000 shares); (ii) options and/or limited stock appreciation rights
granted under the American Stores Company 1997 Stock Option and Stock Award
Plan, 1997A Stock Option and Stock Award Plan, 1997 Stock Plan for
Non-Employee Directors, 1989 Stock Option and Stock Award Plan and 1985
Stock Option and Stock Award Plan (the "ASC Plans") which were converted
into options and/or limited stock appreciation rights to purchase Shares of
the Company pursuant to the Agreement and Plan of Merger, dated August 2,
1998, by and between the Company, American Stores Company and Abacus
Holdings, Inc. (the "Merger Agreement") - (2,465,295 shares); and (iii) the
American Stores Retirement Estates (the "ASRE") subsequent to the closing
of the acquisition contemplated by the Merger Agreement - (650,000 shares).
All assumptions and statements of reliance herein have been made
without any independent investigation or verification on our part except to
the extent otherwise expressly stated, and we express no opinion with
respect to the subject matter or accuracy of such assumptions or items
relied upon.
In connection with this opinion, I have (i) investigated such
questions of law, (ii) examined originals or certified, conformed or
reproduction copies of such agreements, instruments, documents and records
of the Company, such certificates of public officials and such other
documents, and (iii) received such information from officers and
representatives of the Company, as I have deemed necessary or appropriate
for the purposes of this opinion. In all examinations, I have assumed the
legal capacity of all natural persons executing documents, the genuineness
of all signatures, the authenticity of original and certified documents and
the conformity to original or certified copies of all copies submitted to
us as conformed or reproduction copies. As to various questions of fact
relevant to the opinions expressed herein, I have relied upon, and assume
the accuracy of, representations and warranties contained in documents and
certificates and oral or written statements and other information of or
from representatives of the Company and others and assume compliance on the
part of all parties to the documents with their covenants and agreements
contained therein.
Based upon the foregoing and subject to the limitations,
qualifications and assumptions set forth herein, I am of the opinion that
the Shares, when issued or sold, and when delivered in accordance with the
provisions of the Albertson's Stock Plan, the ASC Plans and the ASRE, will
be duly authorized, validly issued, fully paid and non-assessable.
The opinion expressed herein is limited to the General Corporation Law
of the State of Delaware, as currently in effect.
I own 26,813 shares of the Company's Common Stock. I hold options
granted under the Albertson's 1986 Nonqualified Stock Option Plan and the
Albertson's Stock Plan to purchase 110,000 Shares, all of which became
exercisable upon completion of the American Stores acquisition. I have been
granted an option to purchase $4,000,000 worth of Shares with the number of
shares and the option price to be determined based upon the closing price
of the Common Stock of the Company on the New York Stock Exchange on June
24, 1999 (the fair market value on the date of the grant).
I hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. In giving such consent, I do not hereby admit that
I am in the category of such persons whose consent is required under
Section 7 of the Securities Act of 1933, as amended.
The opinions expressed herein are solely for your benefit in
connection with the Form S-8 and may not be relied on in any manner or for
any purpose by any other person or entity.
Very truly yours,
ALBERTSON'S, INC.
/s/ Thomas R. Saldin
-----------------------------
By: Thomas R. Saldin
Executive Vice President
and General Counsel
EXHIBIT 23.2
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Post Effective
Amendment No. 1 on Form S-8 to Registration Statement No. 333-63019 of
Albertson's, Inc. on Form S-4 of our report dated March 17, 1999,
incorporated by reference in the Annual Report on Form 10-K of Albertson's
Inc. and subsidiaries for the year ended January 28, 1999.
/s/ Deloitte & Touche LLP
Boise, Idaho
June 24, 1999
EXHIBIT 23.3
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Post Effective
Amendment No. 1 on Form S-8 to the Registration Statement (Form S-4 No.
333-63019) pertaining to Albertson's, Inc. of our report dated June 23,
1999, with respect to the financial statements of American Stores
Retirement Estates included in its Annual Report (Form 11-K) for the year
ended December 31, 1998 filed with the Securities and Exchange Commission.
/s/ Ernst & Young LLP
Salt Lake City, Utah
June 25, 1999
