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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-K
Annual Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the fiscal year ended: Commission file number:
January 1, 1994 0-785
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NASH-FINCH COMPANY
(Exact name of Registrant as specified in its charter)
Delaware 41-0431960
(State of Incorporation) (I.R.S. Employer
Identification No.)
7600 France Avenue South
P.O. Box 355
Minneapolis, Minnesota
(Address of principal 55440-0355
executive offices) (Zip Code)
Registrant's telephone number, including area code: (612) 832-0534
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Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, par value $1.66-2/3 per share
Common Stock Purchase Rights
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Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months, and (2) has been subject to such filing
requirements for the past 90 days. Yes /X/ No / /
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. / /
As of March 21, 1994, 10,872,424 shares of Common Stock of the
Registrant were outstanding, and the aggregate market value of the Common
Stock of the Registrant as of that date (based upon the last reported sale
price of the Common Stock at that date by the NASDAQ National Market System),
excluding outstanding shares deemed beneficially owned by directors and
officers, was approximately $180,162,300.
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Parts I, II and IV of this Annual Report on Form 10-K incorporate by
reference information (to the extent specific pages are referred to herein)
from the Registrant's Annual Report to Stockholders for the Year Ended January
1, 1994 (the "1993 Annual Report"). Part III of this Annual Report on Form
10-K incorporates by reference information (to the extent specific sections
are referred to herein) from the Registrant's Proxy Statement for its Annual
Meeting to be held May 10, 1994 (the "1994 Proxy Statement").
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PART I
ITEM 1. BUSINESS.
(a) GENERAL DEVELOPMENT OF BUSINESS.
Nash Finch Company, a Delaware corporation organized in 1921 as the
successor to a business founded in 1885, has its principal executive offices
at 7600 France Avenue South, Edina, Minnesota 55435. Its telephone number is
(612) 832-0534. Unless the context otherwise indicates, the term "Company,"
as used in this Report, means Nash Finch Company and its consolidated
subsidiaries.
The Company is one of the largest food wholesalers in the United States,
serving approximately 700 affiliated and other independent retail supermarkets
as of January 1, 1994. In addition, the Company distributes food and related
products to approximately 5,000 convenience stores and other retail outlets
and institutional accounts, such as military base commissaries, restaurants,
schools and hospitals. No one customer accounts for a significant portion of
the Company's sales. The Company also operates and supplies, as of January 1,
1994, 102 Company-owned supermarkets and warehouse stores. The Company's
affiliated and Company-owned stores operate under a number of tradenames,
including ECONOFOODS-R-, FOOD BONANZA-R-, SUN MART-TM-, FAMILY THRIFT
CENTER-TM-, JACK & JILL-R-, ECONOMART-TM-, OUR FAMILY FOODS-R- and FOOD
PRIDE-R-. The Company's market areas are in 31 states in the Midwest, West,
Mid-Atlantic and Southeast and are serviced through 18 wholesale distribution
centers and two general merchandise warehouses. The Company packages, ships
and markets fresh produce from California and the country of Chile to a
variety of buyers across the United States, Canada and overseas.
In July 1993, the Company acquired a 16-store chain of supermarkets
operating in Iowa, western Illinois and northern Missouri, from an independent
retail store operator. In February 1994, the Company acquired a 23-store
chain of retail grocery stores operating in North Carolina (with one store in
South Carolina) from an independent retail store operator.
(b) FINANCIAL INFORMATION ABOUT INDUSTRY SEGMENTS.
Financial information about the Company's business segments for the most
recent three fiscal years is contained on page 25 of the 1993 Annual Report
(Note 12 to Consolidated Financial Statements). For segment financial
reporting purposes, a portion of the operational profits of fourteen wholesale
distribution centers are allocated to retail operations to the extent that
merchandise is purchased by these distribution centers and transferred to
retail stores directly operated by the Company. For fiscal 1993, 35% of such
warehouse operational profits were allocated to retail operations.
(c) NARRATIVE DESCRIPTION OF BUSINESS.
1. PRODUCTS SUPPLIED.
The Company distributes and sells a full line of food products, including
dry groceries, fresh fruits and vegetables, frozen foods, fresh and processed
meat products and dairy products, and a variety of non-food products,
including health and beauty aids, tobacco products, paper products, cleaning
supplies and small household items. The Company primarily distributes and
sells nationally advertised brand products and a number of unbranded products
(principally meats and produce) purchased directly from various manufacturers,
processors and suppliers or through manufacturers' representatives and
brokers. Many of the major suppliers of the Company are large companies.
<PAGE>
The Company has no significant long-term purchase obligations and believes
that adequate and alternative sources of supply are available in most cases.
The Company also distributes and sells private label products using the
Company's own trademarks. A wide variety of grocery, dairy, package meat,
frozen foods, health and beauty care products, paper and household products,
beverages, and other packaged products are manufactured or processed by others
for the Company and sold under Company brand names.
2. DISTRIBUTION.
The Company distributes products to Company-owned supermarkets and
warehouse stores and to independent customers and military base commissaries
from 18 distribution centers, as of January 1, 1994, located in Minnesota (1),
Iowa (1), Kansas (1), Nebraska (2), Colorado (1), North Dakota (2), South
Dakota (2), Wisconsin (1), North Carolina (3), Virginia (2), Maryland (1) and
Georgia (1). The Company's distribution centers are located at strategic
points to efficiently serve Company-owned stores and independent customers.
The distribution centers are equipped with modern materials handling equipment
for receiving, storing and shipping goods and merchandise and are designed for
high-volume operations at low unit costs. The Company also distributes health
and beauty aids and general merchandise products from two separate warehouse
facilities, one in South Dakota and the other in North Carolina, and
distributes produce from a separate warehouse facility in North Carolina.
The distribution centers serve as central sources of supply for
Company-owned and independent stores and institutional customers within their
operating areas. The distribution centers maintain complete inventories
containing virtually every national brand grocery product sold in
supermarkets, together with a wide variety of high-volume private label items.
In addition, the distribution centers provide full lines of perishables,
including fresh meats and poultry, fresh fruits and vegetables, dairy and
delicatessen products and frozen foods. Retailers order their inventory
requirements at regular intervals through direct linkage with Company
computers. Deliveries are made primarily by the Company's transportation
fleet. The frequency of deliveries varies, depending upon customer needs.
The Company currently has a modern fleet of approximately 368 tractors, 613
semi-trailers and 230 small trucks and vans, most of which are owned by the
Company. In addition, many types of meats, dairy products, bakery and other
products are sold by the Company but are delivered by the suppliers directly
to retail food stores.
Virtually all of the Company's wholesale sales to independent customers
are made on a cost-plus-fee basis, with the fee based on the type of commodity
and quantity purchased. Selling prices are changed promptly, based on the
latest cost information.
3. WHOLESALE OPERATIONS.
As of January 1, 1994, the Company distributed food products and non-food
items, on a wholesale basis, to approximately 700 affiliated and other
independent retail supermarkets and to approximately 5,000 convenience stores,
military base commissaries and other retail outlets and institutional
accounts. The Company's affiliated and other independent retail supermarkets
account for the major portion of the Company's wholesale sales. These are
primarily self-service supermarkets that carry a wide variety of grocery
products, health and beauty aids and general merchandise. Many stores also
have one or more specialty departments such as delicatessens, in-store
bakeries, restaurants, pharmacies and flower shops. The stores served by the
Company's
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wholesale operations range in size from small convenience stores to large
supermarkets containing approximately 50,000 square feet.
The Company offers its affiliated independent stores a broad range of
services, most of which are also made available to its other retailers.
Services offered include promotion, advertising and merchandising programs,
the installation of computerized ordering, receiving and scanning systems, the
establishment and supervision of computerized retail accounting, budgeting and
payroll systems, personnel management assistance and employee training,
consumer and market research, store development services and insurance
programs. The Company's retail counselors and other Company personnel advise
and counsel the affiliated independents, and directly provide many of the
above services. Separate charges are made for some of these services. Other
independent stores are charged for services on a negotiated basis. The
Company also provides retailers with marketing and store upgrade services,
many of which have been developed in connection with Company-owned stores.
For example, the Company assists retailers in installing and operating
delicatessens and other specialty food sections. Rather than develop a single
pattern for the services it provides, the Company has developed flexible
programs to serve the needs of most of its affiliated independents, whether
rural or urban, large or small.
The Company's assistance to its affiliated independent stores in store
development provides a means of continued growth for the Company through the
development of new retail store locations and the enlargement or remodeling of
existing retail stores. The services provided include site selection,
marketing studies, building design, store layout and equipment planning and
procurement. The Company assists its retail customers in securing existing
supermarkets that are for sale from time to time in market areas serviced by
the Company and, occasionally, acquires existing stores for resale to
customers.
The Company also may provide financial assistance to independent
retailers it services, generally in connection with new store development and
the upgrading or expansion of existing stores. The Company makes secured
loans to some of its affiliated independent operators, generally repayable
over a period of five or seven years, for inventories, store fixtures and
equipment, working capital and store improvements. Loans are secured by
liens on inventory or equipment or both, by personal guarantees and by other
types of security. As of January 1, 1994, the Company had outstanding
$27,965,573 in such secured loans to 96 independent operators. In addition,
the Company may provide such assistance to independent retailers by
guarantying loans from financial institutions and leases entered into directly
with lessors. The Company also uses its credit strength to lease supermarket
locations and sublease them to independent operators, at rates that are at
least as high as the rent paid by the Company.
4. RETAIL OPERATIONS.
As of January 1, 1994, the Company owned and operated 102 retail outlets,
including 57 supermarkets, 40 warehouse stores and 5 combination general
merchandise/food stores. The Company has devoted considerable resources in
recent years to acquire, construct, enlarge and modernize Company-owned
stores. Over the last several years, the Company has reduced (and expects to
continue to reduce) its number of smaller supermarkets. Concurrently with
such reductions, the Company seeks to add either larger conventional
supermarkets (at least 30,000 square feet) or warehouse stores (at least
45,000 square feet), as appropriate. The Company has implemented a number of
automated systems, including scanning and direct store delivery for its
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stores. These systems provide inventory control at delivery and checkout
points, reducing shrinkage and increasing labor efficiency.
The Company operates its 57 supermarkets principally under the names SUN
MART-TM-, EASTER FOODS-TM- and JACK & JILL-R-. These stores, of which the
Company leases 46 (the remainder are owned), range in size up to approximately
46,000 square feet. These stores are primarily self-service supermarkets that
carry a wide variety of grocery products, health and beauty aids and general
merchandise. Many stores also have one or more specialty departments such as
delicatessens, in-store bakeries, restaurants, pharmacies and flower shops.
The Company operates 40 warehouse stores principally under the names
ECONOFOODS-R- and FOOD BONANZA-R-. These stores, 13 of which the Company owns
(the remainder are leased), range in size up to approximately 73,000 square
feet. The Company's warehouse stores have evolved since the first was opened
in 1964. The early concept emphasized low prices, limited product selection
and none of the standard supermarket services such as bagging, carry-out,
trading stamps or other promotions. Today's new and expanded warehouse stores
offer a wide variety of high quality groceries, fresh fruits and vegetables,
dairy products, frozen foods, fresh fish, fresh and processed meat and health
and beauty aids, all at lower prices, and specialty departments such as
delicatessens, in-store bakeries, pharmacies, banks and floral and video
departments. These stores appeal to quality and price-conscious customers who
want national brands, broad selection, and availability of convenience foods,
but are willing, in some cases, to forgo standard supermarket services. The
stores are able to offer lower prices due to increased business volume as well
as the limited services available.
The Company also operates five combination general merchandise/food
stores principally under the name FAMILY THRIFT CENTER-TM-. These stores, two
of which the Company leases (the other three are owned), range in size up to
approximately 70,000 square feet. In addition to traditional supermarket food
departments, these stores have expanded general merchandise and health and
beauty aid departments and pharmacies, and some also have sit-down
restaurants, full-service floral departments and book departments.
5. PRODUCE MARKETING OPERATIONS.
Through a wholly owned subsidiary, Nash-DeCamp Company, the Company
grows, packs, ships and markets fresh fruits and vegetables from locations in
California and the country of Chile to customers across the United States and
Canada, and also overseas. For regulatory reasons, the amount of business
between Nash-DeCamp Company and the Company is limited. The Company owns and
operates four modern packing, shipping and/or cold storage facilities that
ship fresh grapes, citrus, plums, peaches, nectarines, apricots, pears,
persimmons, kiwi fruit and other products. The Company also acts as marketing
agent for other packers of fresh produce in California and in the country of
Chile. For the above services, the Company receives, in addition to a selling
commission, a fee for packing, handling and shipping produce. The Company
also owns vineyards and orchards for the production of table grapes, tree
fruit, kiwi and citrus.
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6. COMPETITION.
All segments of the Company's business are highly competitive. The
Company competes directly at the wholesale level with a number of wholesalers
that supply independent retailers, including "cooperative" wholesalers that
are owned by their retail customers and "voluntary" wholesalers who, like the
Company, are not owned by their retail customers but sponsor a program under
which single-unit or multi-unit independent retailers may affiliate under a
common name. The Company also competes indirectly with the warehouse and
distribution operations of the large integrated chains, which consist of
single entities owning both wholesale and retail operations. At the wholesale
level, the principal methods of competition are location of distribution
centers and the services offered to independent retailers, such as store
financing and use of store names. The success of the Company's wholesale
business also depends upon the ability of its retail store customers to
compete successfully with other retail food stores.
The Company competes on the retail level in a fragmented market with many
organizations of various sizes, ranging from national chains and voluntary or
cooperative groups to local chains and privately-owned unaffiliated stores.
Depending on the product and location involved, the principal methods of
competition at the retail level include price, service, quality, display,
selection and store location.
The Company competes directly in its produce marketing operations with a
large number of other firms that pack, ship and market produce, and competes
indirectly with larger, integrated firms that grow, pack, ship and market
produce. The principal methods of competition in this segment are service
provided to growers and the ability to sell produce at the most favorable
prices.
7. EMPLOYEES.
As of January 1, 1994, the Company employed approximately 11,900 persons
(approximately 6,000 full-time and 5,900 part-time).
ITEM 2. PROPERTIES.
The principal executive offices of the Company are located in Edina,
Minnesota, and consist of approximately 68,000 square feet of office space.
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The locations and sizes of the Company's distribution centers, as of
January 1, 1994, are as follows (all of which are owned, except as indicated):
<TABLE>
<CAPTION>
Approx. Size
Location (Square Feet)
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<S> <C>
Midwest/West:
*Denver, Colorado.................. 301,800
Cedar Rapids, Iowa................ 351,900
Liberal, Kansas................... 177,000
St. Cloud, Minnesota.............. 325,100
Grand Island, Nebraska............ 177,700
Lincoln, Nebraska................. 226,000
Fargo, North Dakota............... 288,800
Minot, North Dakota............... 185,200
Rapid City, South Dakota.......... 186,600
Sioux Falls, South Dakota......... 173,100
*Sioux Falls, South Dakota
(general merchandise warehouse). 79,300
Appleton, Wisconsin............... 430,900
Southeast:
Macon, Georgia................... 247,700
* Baltimore, Maryland.............. 215,000
(includes 60,000 square feet of
refrigerated warehouse space
located in Jessup, Maryland)
* Hickory, North Carolina.......... 120,500
(general merchandise warehouse)
* Lumberton, North Carolina........ 256,600
(includes produce warehouse of
16,100 square feet located
in Wilmington, North Carolina)
* Newton, North Carolina........... 208,900
* Rocky Mount, North Carolina...... 201,800
Bluefield, Virginia.............. 197,700
* Chesapeake, Virginia............. 233,300
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Total square feet................ 4,584,900
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<FN>
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* Leased facility (excluding produce warehouse in Wilmington, North Carolina,
which is owned).
</TABLE>
The distribution center facilities are leased for varying terms, all with
remaining terms of less than 20 years. Total rent in fiscal 1993 for the
leased facilities was $2,568,000.
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The following table shows the number and aggregate size of Company-owned and
operated supermarkets and warehouse stores operated at January 1, 1994:
<TABLE>
<S> <C>
*Supermarkets:
Number of Stores................62
Total Square Feet........1,601,000
Warehouse stores:
Number of Stores................40
Total Square Feet........1,658,000
Totals:
Number of Stores...............102
Total Square Feet........3,259,000
<FN>
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* Includes 5 combination general merchandise/food stores.
</TABLE>
The Company leases 48 of its supermarket and combination general
merchandise/food store buildings (the remainder are owned), which range in
size up to approximately 70,000 square feet. The Company also leases 27 of
its warehouse store buildings, which range in size up to approximately 73,000
square feet. These leases are for varying terms, primarily under 20 years.
The total rent in fiscal 1993 for store buildings was $7,994,000.
Further information about the lease obligations of the Company is given
in Note 8 to Consolidated Financial Statements on page 24 of the 1993
Annual Report, incorporated herein by reference.
Nash-DeCamp Company, a wholly owned subsidiary of the Company, owns and
operates four packing, shipping and/or cold storage facilities in California
in connection with its produce marketing operations, with total space of
approximately 184,500 square feet. Its executive offices, comprising
approximately 8,000 square feet, are in leased premises located in Visalia,
California. In addition, the Company owns approximately 800 acres for the
production of table grapes, 40 acres for the production of kiwi fruit, 820
acres for the production of peaches, plums, apricots and nectarines, and 255
acres for the production of citrus. These vineyards and orchards are located
in the San Joaquin Valley of California.
The Company makes a continuing effort to keep all of its properties and
facilities modern, efficient and adequate for its operational needs, through
the acquisition, disposition, expansion and improvement of such properties and
facilities. As a result, the Company believes that its properties and
facilities are, on an aggregate basis, fully utilized and adequate for the
conduct of its business.
ITEM 3. LEGAL PROCEEDINGS.
On August 31, 1993 one of the Company's customers, Paintsville Foods,
Inc. (the "Debtor"), filed a Chapter 11 bankruptcy petition in the United
States Bankruptcy Court for the Eastern District of Kentucky. The Company has
filed a plan of reorganization in this case that seeks approval of a bidding
procedure to sell the assets of the Debtor. As of March 25, 1994, the plan of
reorganization has not been approved by the court. For the fiscal year
ended January 1, 1994,
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the Company's increased provision for bad debts included $5,030,000 relating
to this bankruptcy proceeding. There are no other pending or threatened
material legal proceedings to which the Company or any of its subsidiaries is
a party.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
No matter was submitted to a vote of security holders during the fourth
quarter of the fiscal year covered by this Report.
ITEM 4A. EXECUTIVE OFFICERS OF THE REGISTRANT.
The executive officers of the Company, their ages, the year first
elected or appointed as an executive officer and the offices held as of
March 1, 1994 are as follows:
<TABLE>
<CAPTION>
Year First Elected
or Appointed as an
Name (Age) Executive Officer Title
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<S> <C> <C>
Harold B. Finch, Jr.(66) 1972 Chairman of the Board and Chief
Executive Officer
Alfred N. Flaten, Jr.(59) 1991 President and Chief Operating
Officer
Robert F. Nash (60) 1974 Vice President and Treasurer
Norman R. Soland (53) 1986 Vice President, Secretary and
General Counsel
David W. Bell (49) 1990 Vice President, Corporate Retail
Operations
Charles F. Ramsbacher (51) 1991 Vice President, Marketing
Clarence T. Walters (57) 1988 Vice President, Management
Information Systems
Steven L. Lumsden (48) 1992 Vice President, Warehouse and
Transportation
Gerald D. Maurice (60) 1993 Vice President, Store
Development
Lawrence A. Wojtasiak (48) 1990 Controller
</TABLE>
There are no family relationships between or among any of the executive
officers or directors of the Company. Executive officers of the Company are
elected by the Board of Directors for one-year terms, commencing with their
election at the first meeting of the Board of Directors immediately following
the annual meeting of stockholders and continuing until the next such meeting
of the Board of Directors. Except as indicated below, there has been no
change in position of any of the executive officers during the last five
years.
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Mr. Flaten's election as President and Chief Operating Officer was
effective in November 1991. He had been elected Executive Vice President,
Sales and Operations of Nash Finch in February 1991. He was previously an
operating officer, having served as Vice President, Corporate Retail
Operations from January 1989 to February 1991.
Mr. Bell was elected Vice President, Corporate Retail Operations in May
1991, having previously served as Vice President, Marketing from May 1990 to
May 1991, and Director of Marketing from February 1990 to May 1990. Mr. Bell
was previously employed by Shoprite Supermarkets, Inc., an operator of retail
grocery stores, as Executive Vice President, Merchandising and Operations from
1989 to 1990, and as Vice President and General Manager from 1987 to 1989.
Mr. Ramsbacher was elected Vice President, Marketing in May 1991, having
previously served as operating Vice President, Iowa Division from May 1990 to
May 1991, and Iowa Division Manager from August 1988 to May 1990.
Mr. Lumsden was elected Vice President, Warehouse and Transportation in
May 1992, having previously served as Director, Warehouse and Transportation
from May 1990 to May 1992, and Manager, Distribution Center Operations from
September 1987 to May 1990.
Mr. Maurice was elected Vice President, Store Development in May 1993,
having previously served as operating Vice President, Central Division for
more than five years.
Mr. Wojtasiak was elected Controller in May 1990. He was previously
employed by The Diana Corporation, a diversified holding company, as a special
project coordinator from July 1988 to April 1990.
PART II
ITEM 5. MARKET FOR COMPANY'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
The information under the caption "Price Range of Common Stock and
Dividends" on page 15 of the Company's 1993 Annual Report is incorporated
herein by reference.
ITEM 6. SELECTED FINANCIAL DATA
The financial information under the caption "Consolidated Summary of
Operations" on pages 26 and 27 of the Company's 1993 Annual Report is
incorporated herein by reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The information under the caption "Management's Discussion and Analysis
of Financial Condition and Results of Operations" on pages 14 and 15 of the
Company's 1993 Annual Report is incorporated herein by reference.
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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The Company's Consolidated Financial Statements and the report of its
independent auditors on pages 16-25 of the Company's 1993 Annual Report are
incorporated herein by reference, as is the unaudited information set forth
under the caption "Quarterly Financial Information" on page 15.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
Not applicable.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
A. DIRECTORS OF THE REGISTRANT.
The information under the captions "Election of Directors--Information
About Directors and Nominees" and "Election of Directors--Other Information
About Directors and Nominees" in the Company's 1994 Proxy Statement is
incorporated herein by reference.
B. EXECUTIVE OFFICERS OF THE REGISTRANT.
Information concerning Executive Officers of the Company is included in
this Report under Item 4A, "Executive Officers of the Registrant."
C. COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT OF 1934.
Information under the caption "Executive Compensation and Other
Benefits--Compliance with Section 16(a) of the Exchange Act" in the Company's
1994 Proxy Statement is incorporated herein by reference.
ITEM 11. EXECUTIVE COMPENSATION
The information under the captions "Election of Directors--Director
Compensation" and "Executive Compensation and Other Benefits" in the Company's
1994 Proxy Statement is incorporated herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information under the caption "Principal Stockholders and Beneficial
Ownership of Management" in the Company's 1994 Proxy Statement is incorporated
herein by reference.
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<PAGE>
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information under the caption "Election of Directors--Other
Information About Directors and Nominees" in the Company's 1994 Proxy
Statement is incorporated herein by reference.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) 1. FINANCIAL STATEMENTS:
The following Financial Statements are incorporated herein by
reference from the pages indicated in the Company's 1993 Annual Report:
Independent Auditors' Report -- page 16
Consolidated Statements of Earnings for the years ended January 1,
1994, January 2, 1993 and December 28, 1991 -- page 16
Consolidated Statements of Cash Flows for the years ended January
1, 1994, January 2, 1993 and December 28, 1991 -- page 17
Consolidated Balance Sheets as of January 1, 1994 and January 2,
1993 -- pages 18 and 19
Consolidated Statements of Stockholders' Equity for the years
ended January 1, 1994, January 2, 1993 and December 28, 1991 -- page 20
Notes to Consolidated Financial Statements -- pages 20-25
2. FINANCIAL STATEMENT SCHEDULES:
The following financial statement schedules and auditors' report
thereon are included herein and should be read in conjunction with the
consolidated financial statements referred to above (page numbers refer
to pages in this Report):
Page
----
Independent Auditors' Report on Consolidated Financial
Statement Schedules.............................................. 14
Financial Statement Schedules:
V. Property, Plant and Equipment, and Assets Under
Capitalized Leases......................................... 15
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VI. Accumulated Depreciation and Amortization of
Property, Plant and Equipment, and Assets
Under Capitalized Leases................................... 16
VIII. Valuation and Qualifying Accounts.......................... 17
IX. Short-Term Borrowings...................................... 18
All other schedules are omitted as the required information is
inapplicable or the information is presented in the consolidated financial
statements or related notes.
3. Exhibits:
The exhibits to this Report are listed in the Exhibit Index on pages 20
to 24 herein.
A copy of any of these exhibits will be furnished at a reasonable cost
to any person who was a stockholder of the Company as of March 21, 1994,
upon receipt from any such person of a written request for any such exhibit.
Such request should be sent to Nash Finch Company, 7600 France Avenue South,
P.O. Box 355, Minneapolis, Minnesota, 55440-0355, Attention: Secretary.
The following is a list of each management contract or compensatory plan
or arrangement required to be filed as an exhibit to this Annual Report on
Form 10-K pursuant to Item 14(c):
A. Nash Finch Profit Sharing Plan -- 1994 Revision and Nash Finch
Profit Sharing Trust Agreement (as restated effective January
1, 1994) (filed herewith as Exhibit 10.6).
B. Nash Finch Executive Incentive Bonus and Deferred Compensation
Plan (as amended and restated effective December 31, 1993)
(filed herewith as Exhibit 10.7).
C. Excerpt from minutes of the Board of Directors regarding Nash
Finch Pension Plan, as amended (incorporated by reference to
Exhibit 10.9 to the Company's Annual Report on Form 10-K for
the fiscal year ended January 3, 1987 (File No. 0-785)).
D. Nash Finch 1988 Long-Term Stock Incentive Plan (incorporated by
reference to Exhibit 10.14 to the Company's Annual Report on
Form 10-K for the fiscal year ended January 2, 1988 (File No.
0-785)).
E. Amendment to 1988 Long-Term Stock Incentive Plan (incorporated
by reference to Exhibit 28.2 to the Company's Registration
Statement on Form S-8 (File No. 33-26590)).
F. Letter agreement, dated June 12, 1979, between Nash Finch and
Donald R. Miller (incorporated by reference to Exhibit 10.8 to
the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1983 (File No. 0-785)).
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G. Excerpts from minutes of the Board of Directors regarding
director compensation (filed herewith as Exhibit 10.14).
H. Form of Director Fee Deferral Agreement (incorporated by
reference to Exhibit 10.19 to the Company's Annual Report on
Form 10-K for the fiscal year ended December 29, 1990 (File No.
0-785)).
I. Form of letter agreement specifying benefits in the event of
termination of employment following a change in control of Nash
Finch (incorporated by reference to Exhibit 10.20 to the
Company's Annual Report on Form 10-K for the fiscal year ended
December 29, 1990 (File No. 0-785)).
J. Nash Finch Company Income Deferral Plan (filed herewith as
Exhibit 10.17).
(b) Reports on Form 8-K:
No reports on Form 8-K were filed during the fourth quarter of the
fiscal year covered by this Report.
13
<PAGE>
INDEPENDENT AUDITORS' REPORT ON
CONSOLIDATED FINANCIAL STATEMENT SCHEDULES
The Board of Directors
Nash Finch Company:
Under date of March 1, 1994, we reported on the consolidated balance sheets of
Nash Finch Company and subsidiaries as of January 1, 1994 and January 2, 1993
and the related consolidated statements of earnings, stockholders' equity and
cash flows for each of the years in the three-year period ended January 1,
1994, as contained in the 1993 annual report to stockholders. These
consolidated financial statements and our report thereon are incorporated by
reference in the annual report on Form 10-K for the year 1993. In connection
with our audits of the aforementioned consolidated financial statements, we
have also audited the related consolidated financial statement schedules as
listed in the accompanying index. These financial statement schedules are the
responsibility of Company management. Our responsibility is to express an
opinion on these financial statement schedules based on our audits.
In our opinion, the related financial statement schedules, when considered in
relation to the basic consolidated financial statements taken as a whole,
present fairly, in all material respects, the information set forth therein.
KPMG Peat Marwick
Minneapolis, Minnesota
March 1, 1994
14
<PAGE>
NASH FINCH COMPANY and SUBSIDIARIES Schedule V
Property, Plant and Equipment, and Assets Under Capitalized Leases
Fiscal years ended January 1, 1994, January 2, 1993 and December 28, 1991
(In thousands)
<TABLE>
<CAPTION>
Classification
- --------------------------------- Balance at Additions
Property, plant and equipment beginning Additions due to Retirements Other changes Balance at
- --------------------------------- of year at cost acquisitions and sales add (deduct) end of year
--------- --------- ------------ --------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C>
52 weeks ended December 28, 1991:
Land $ 20,337 2,628 804 22,161
Buildings and improvements 80,278 2,024 2,675 8,511 (a) 88,197
101 (c)
(42)(b)
Furniture, fixtures and equipment 175,692 17,716 8,157 4,258 (a) 189,551
42 (b)
Leasehold improvements 22,509 477 477 2,658 (a) 25,066
(101)(c)
Construction in progress 5,725 13,991 415 (15,427)(a) 3,874
--------- ------- ------- -------- -------
$ 304,541 36,836 12,528 -- 328,849
--------- ------- ------- -------- -------
--------- ------- ------- -------- -------
53 weeks ended January 2, 1993:
Land $ 22,161 4,323 2,067 24,417
Buildings and improvements 88,197 6,093 5,517 10,606 (a) 100,772
1,393 (c)
Furniture, fixtures and equipment 189,551 14,884 3,316 10,721 3,680 (a) 199,420
(1,290)(c)
Leasehold improvements 25,066 568 638 (103)(c) 25,596
703 (a)
Construction in progress 3,874 17,123 354 (14,989)(a) 5,654
--------- ------- ------- ------- -------- -------
328,849 42,991 3,316 19,297 -- 355,859
--------- ------- ------- ------- -------- -------
--------- ------- ------- ------- -------- -------
52 weeks ended January 1, 1994:
Land $ 24,417 673 784 1,283 2,061 (a) 26,652
Buildings and improvements 100,772 2,547 3,090 5,114 784 (c) 105,650
3,571 (a)
Furniture, fixtures and equipment 199,420 18,972 4,701 14,242 1,105 (a) 209,172
(784)(c)
Leasehold improvements 25,596 635 1,618 2,353 520 (a) 26,016
Construction in progress 5,654 13,555 6,038 (7,257)(a) 5,914
--------- ------- ------- ------- -------- -------
$ 355,859 36,382 10,193 29,030 -- 373,404
--------- ------- ------- ------- -------- -------
--------- ------- ------- ------- -------- -------
Assets under capitalized leases
- -------------------------------
52 weeks ended December 28, 1991:
Buildings and improvements $ 5,507 -- -- -- 5,507
--------- ------- ------- -------- -------
--------- ------- ------- -------- -------
53 weeks ended January 2, 1993:
Buildings and improvements $ 5,507 -- 1,748 -- 3,759
--------- ------- ------- -------- -------
--------- ------- ------- -------- -------
52 weeks ended January 1, 1994:
Buildings and improvements $ 3,759 5,451 -- -- 9,210
--------- ------- ------- -------- -------
--------- ------- ------- -------- -------
<FN>
(a) Construction in progress transferred (to) from other property accounts.
(b) Elimination and reclassification entries.
(c) Transfers of equipment between classifications.
</TABLE>
15
<PAGE>
NASH FINCH COMPANY and SUBSIDIARIES Schedule VI
Accumulated Depreciation and Amortization of Property,
Plant and Equipment, and Assets Under Capitalized Leases
Fiscal years ended January 1, 1994, January 2, 1993 and December 28, 1991
(In thousands)
<TABLE>
<CAPTION>
Balance at Charged to Additions
beginning costs and due to Retirements Other changes Balance at
Description of year expenses acquisitions and sales add (deduct) end of year
--------------------------------- ----------- ---------- ------------ ----------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C>
Property, plant and equipment
-----------------------------
52 weeks ended December 28, 1991:
Buildings and improvements $ 21,490 3,213 622 53 (a) 24,134
Furniture, fixtures and equipment 117,180 20,572 7,389 10 (a) 130,373
Amortization of leasehold 9,769 1,835 273 (63)(a) 11,268
---------- -------- ------- ----- --------
$ 148,439 25,620 8,284 -- 165,775
---------- -------- ------- ----- --------
---------- -------- ------- ----- --------
53 weeks ended January 2, 1993:
Buildings and improvements $ 24,134 3,853 605 61 (a) 27,443
Furniture, fixtures and equipment 130,373 20,779 10,049 141,103
Amortization of leasehold 11,268 1,912 552 (61)(a) 12,567
---------- -------- ------- ----- --------
$ 165,775 26,544 11,206 -- 181,113
---------- -------- ------- ----- --------
---------- -------- ------- ----- --------
52 weeks ended January 1, 1994:
Buildings and improvements $ 27,443 4,829 1,117 2,798 (a) 33,953
Furniture, fixtures and equipment 141,103 20,477 13,320 (2,287)(a) 145,973
Amortization of leasehold 12,567 1,989 1,158 (511)(a) 12,887
---------- -------- ------- ----- --------
$ 181,113 27,295 15,595 -- 192,813
---------- -------- ------- ----- --------
---------- -------- ------- ----- --------
Assets under capitalized leases
-------------------------------
52 weeks ended December 28, 1991:
Buildings and improvements $ 4,532 218 -- -- 4,750
---------- -------- ------- ----- --------
---------- -------- ------- ----- --------
53 weeks ended January 2, 1993:
Buildings and improvements $ 4,750 225 1,748 -- 3,227
---------- -------- ------- ----- --------
---------- -------- ------- ----- --------
52 weeks ended January 1, 1994:
Buildings and improvements $ 3,227 310 -- -- 3,537
---------- -------- ------- ----- --------
---------- -------- ------- ----- --------
<FN>
(a) Transfers of equipment between classifications.
</TABLE>
16
<PAGE>
NASH FINCH COMPANY and SUBSIDIARIES Schedule VIII
Valuation and Qualifying Accounts
Fiscal years ended Janaury 1, 1994, January 2, 1993 and December 28, 1991
(In thousands)
<TABLE>
<CAPTION>
Additions
--------------------------- Charged
Balance at Charged to (credited) Balance
beginning costs and Due to to other at end
Description of year expenses acquisitions accounts Deductions of year
- ----------------------------------------- ---------- ---------- ------------ -------- ---------- -------
<S> <C> <C> <C> <C> <C> <C>
52 weeks ended December 28, 1991:
Allowance for doubtful receivables (d) $4,534 1,430 -- 124 (a) 938 (b) 5,150
Provision for losses relating to
leases on closed locations 2,526 514 -- 351 (c) 1,877 1,514
---------- ---------- ------------ -------- ---------- -------
$7,060 1,944 -- 475 2,815 6,664
---------- ---------- ------------ -------- ---------- -------
---------- ---------- ------------ -------- ---------- -------
53 weeks ended January 2, 1993:
Allowance for doubtful receivables (d) $5,150 3,668 -- (4,000) (e) 1,316 (b) 3,554
52 (a)
Provision for losses relating to
leases on closed locations 1,514 316 -- 178 (c) 1,341 667
---------- ---------- ------------ -------- ---------- -------
$6,664 3,984 -- (3,770) 2,657 4,221
---------- ---------- ------------ -------- ---------- -------
---------- ---------- ------------ -------- ---------- -------
52 weeks ended January 1, 1994:
Allowance for doubtful receivables (d) $3,554 10,146 -- (3,123) (e) 2,146 (b) 8,522
91 (a)
Provision for losses relating to
leases on closed locations 667 583 -- 677 (c) 1,759 168
---------- ---------- ------------ -------- ---------- -------
$4,221 10,729 -- (2,355) 3,905 8,690
---------- ---------- ------------ -------- ---------- -------
---------- ---------- ------------ -------- ---------- -------
<FN>
(a) Recoveries on accounts previously charged off.
(b) Accounts charged off.
(c) Change in current portion shown as current liability.
(d) Includes current and non-current receivables.
(e) Reserve for estimated losses on notes sold
reclassified to other current liability,
as to which the Company is contingently liable.
</TABLE>
17
<PAGE>
NASH FINCH COMPANY and SUBSIDIARIES Schedule IX
Short-term Borrowings
Fiscal years ended January 1, 1994, January 2, 1993 and December 28, 1991
(Dollar amounts in thousands)
<TABLE>
<CAPTION>
Maximum Average Weighted
Weighted amount daily amount daily average
Balance average oustanding outstanding interest rate
Category of aggregate at end of interest during the during the during the
short-term borrowings period rate period period period
- ------------------------------------------ --------- -------- ---------- ------------ -----------
<S> <C> <C> <C> <C> <C>
52 weeks ended December 28, 1991:
Payable to banks for borrowings $ 7,600 5.02 $ 19,000 $ 3,873 6.1
53 weeks ended January 2, 1993:
Payable to banks for borrowings $ 47,500 3.7 $ 51,500 $ 27,748 4.1
52 weeks ended January 1, 1994:
Payable to banks for borrowings $ 38,300 3.4 $ 56,400 $ 43,234 3.4
</TABLE>
18
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this Report to be signed
on its behalf by the undersigned, thereunto duly authorized.
Dated: March 30, 1994 NASH-FINCH COMPANY
By/s/Harold B. Finch, Jr.
-----------------------
Harold B. Finch, Jr.
Chairman of the Board and
Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
Report has been signed below on March 30, 1994 by the following persons on
behalf of the Registrant and in the capacities indicated.
/s/Harold B. Finch, Jr. /s/Alfred N. Flaten, Jr.
- ------------------------------------ ------------------------------------
Harold B. Finch, Jr., Chairman of the Alfred N. Flaten, Jr., President,
Board,Chief Executive Officer (Principal Chief Operating Officer and Director
Executive Officer) and Director
/s/Robert F. Nash /S/Lawrence A. Wojtasiak
- ---------------------------- ------------------------------------
Robert F. Nash, Vice President and Lawrence A. Wojtasiak, Controller
Treasurer (Principal Financial Officer) (Principal Accounting Officer)
and Director
/s/Carole F. Bitter /s/Richard A. Fisher
- ---------------------------- ------------------------------------
Carole F. Bitter, Director Richard A. Fisher, Director
/s/Allister P. Graham /s/John H. Grunewald
- ---------------------------- ------------------------------------
Allister P. Graham, Director John H. Grunewald, Director
/s/Richard G. Lareau /s/Russell N. Mammel
- ---------------------------- ------------------------------------
Richard G. Lareau, Director Russell N. Mammel, Director
/s/Donald R. Miller /s/Jerome O. Rodysill
- ---------------------------- ------------------------------------
Donald R. Miller, Director Jerome O. Rodysill, Director
/s/Arthur C. Wangaard, Jr.
- ----------------------------
Arthur C. Wangaard, Jr., Director
19
<PAGE>
NASH FINCH COMPANY
EXHIBIT INDEX TO ANNUAL REPORT
ON FORM 10-K
For Fiscal Year Ended January 1, 1994
Item
No. Item Method of Filing
- ---- ---- ----------------
3.1 Restated Certificate of
Incorporation of Nash
Finch.................... Incorporated by reference to Exhibit 3.1
to the Company's Annual Report on Form
10-K for the fiscal year ended December
28, 1985 (File No. 0-785)
3.2 Amendment to Restated
Certificate of Incorporation
of the Company, effective
May 29, 1986............. Incorporated by reference to Exhibit 19.1
to the Company's Quarterly Report on Form
10-Q for the quarter ended October 4, 1986
(File No. 0-785)
3.3 Amendment to Restated
Certificate Incorporation
of the Company, effective
May 15, 1987............. Incorporated by reference to Exhibit 4.5
to the Company's Registration Statement on
Form S-3 (File No. 33-14871)
3.4 Bylaws of the Company.... Incorporated by reference to Exhibit 3.3
to the Company's Annual Report on Form
10-K for the fiscal year ended December
31, 1983 (File No. 0-785)
3.5 Amendment to Bylaws of
the Company, effective
November 12, 1985........ Incorporated by reference to Exhibit 3.3
to the Company's Annual Report on Form
10-K for the fiscal year ended December
28, 1985 (File No. 0-785)
3.6 Amendment to Bylaws of
the Company, effective
May 13, 1986............. Incorporated by reference to Exhibit 19.2
to the Company's Quarterly Report on Form
10-Q for the Quarter ended October 4, 1986
(File No. 0-785)
20
<PAGE>
Item
No. Item Method of Filing
- ---- ---- ----------------
3.7 Amendment to Bylaws of the
Company, effective
May 12, 1987............. Incorporated by reference to Exhibit 4.9
to the Company's Registration Statement on
Form S-3 (File No. 33-14871)
4.1 Specimen Form of the
Company's Common Stock
Certificate.............. Incorporated by reference to Exhibit 4.1
to the Company's Annual Report on Form
10-K for the fiscal year ended December
30, 1989 (File No. 0-785).
4.2 Amended and Restated
Stockholder Rights
Agreement, dated
January 18, 1990, between
the Company and Norwest
Bank Minnesota,
National Association..... Incorporated by reference to Exhibit 1 to
the Company's Amendment to Application or
Report on Form 8 dated January 18, 1990
(File No. 0-785)
10.1 Note Agreement, dated
August 1, 1986, between the
Company and Nationwide Life
Insurance Company........ Incorporated by reference to Exhibit 19.3
to the Company's Quarterly Report on Form
10-Q for the quarter ended October 4, 1986
(File No. 0-785)
10.2 Note Agreements, dated
September 15, 1987, between
the Company and IDS Life
Insurance Company, and
between the Company and IDS
Life Insurance Company of
New York................. Incorporated by reference to Exhibit 19.1
to the Company's Quarterly Report on Form
10-Q for the quarter ended October 10,
1987 (File No. 0-785)
21
<PAGE>
Item
No. Item Method of Filing
- ---- ---- ----------------
10.3 Note Agreements, dated
September 29, 1989,
between the Company
and Nationwide Life
Insurance Company, and
between the Company and
West Coast Life
Insurance Company........ Incorporated by reference to Exhibit 19.1
to the Company's Quarterly Report on Form
10-Q for the quarter ended October 7, 1989
(File No. 0-785)
10.4 Note Agreements dated
March 22, 1991, between the
Company and The Minnesota
Mutual Life Insurance
Company, and between the
Company and The Minnesota
Mutual Life Insurance
Company - Separate
Account F................ Incorporated by reference to Exhibit 19.1
to the Company's Quarterly Report on Form
10-Q for the quarter ended March 23, 1991
(File No. 0-785)
10.5 Note Agreements, dated as of
February 15, 1993 between
the Company and Principal
Mutual Life Insurance Company,
and between the Company and
Aid Association for
Lutherans................ Incorporated by reference to Exhibit 19.1
to the Company's Quarterly Report on Form
10-Q for the quarter ended March 27, 1993
(File No. 0-785).
10.6 Nash Finch Profit Sharing
Plan--1994 Revision and
Nash Finch Profit Sharing
Trust Agreement (as
restated effective
January 1, 1994)......... Filed herewith
10.7 Nash Finch Company Executive
Incentive Bonus and
Deferred Compensation Plan
(as amended and restated
effective December 31,
1993).................... Filed herewith
22
<PAGE>
Item
No. Item Method of Filing
- ---- ---- ----------------
10.8 Excerpts from Minutes of
Board of Directors
regarding Nash Finch
Company Pension Plan,
as amended effective
January 2, 1966.......... Incorporated by reference to Exhibit 10.9
to the Company's Annual Report on Form
10-K for the fiscal year ended January 3,
1987 (File No. 0-785)
10.9 Nash-Finch Company 1988
Long-Term Stock Incentive
Plan, effective
May 10, 1988............. Incorporated by reference to Exhibit 10.14
to the Company's Annual Report on Form
10-K for the fiscal year ended January 2,
1988 (File No. 0-785)
10.10 Amendment to 1988 Long-
Term Stock Incentive Plan,
effective December 22,
1988..................... Incorporated by reference to Exhibit 28.2
to the Company's Registration Statement on
Form S-8 (File No. 33-26590)
10.11 Form of Stock Option
Agreement under
1988 Long-Term Stock
Incentive Plan........... Incorporated by reference to Exhibit 10.12
to the Company's Annual Report on Form
10-K for the fiscal year ended December
31, 1988 (File No. 0-785)
10.12 Form of Restricted Stock
Award Agreement under
1988 Long-Term Stock
Incentive Plan........... Incorporated by reference to Exhibit 10.13
to the Company's Annual Report on Form
10-K for the fiscal year ended December
31, 1988 (File No. 0-785)
10.13 Letter Agreement, dated
June 12, 1979, between the
Company and Donald R.
Miller................... Incorporated by reference to Exhibit 10.8
to the Company's Annual Report on Form
10-K for the fiscal year ended December
31, 1983 (File No. 0-785)
23
<PAGE>
Item
No. Item Method of Filing
- ---- ---- ----------------
10.14 Excerpts from Board minutes
regarding director
compensation............. Filed herewith
10.15 Form of Director Fee
Deferral Agreement....... Incorporated by reference to Exhibit 10.19
to the Company's Annual Report on Form
10-K for the fiscal year ended December
29, 1990 (File No. 0-785)
10.16 Form of Letter Agreement
Specifying Benefits in the
Event of Termination of
Employment Following a
Change in Control of the
Company................... Incorporated by reference to Exhibit 10.20
to the Company's Annual Report on Form
10-K for the fiscal year ended December
29, 1990 (File No. 0-785)
10.17 Nash Finch Company
Income Deferral Plan...... Filed herewith
13.1 1993 Annual Report to
Stockholders (selected
portions of pages 14-27)... Filed herewith
21.1 Subsidiaries of the
Registrant................ Filed herewith
23.1 Independent Auditors'
Consent................... Filed herewith
24
<PAGE>
NASH-FINCH COMPANY
PROFIT SHARING PLAN
1994 REVISION
<PAGE>
NASH-FINCH COMPANY
PROFIT SHARING PLAN
1994 REVISION
TABLE OF CONTENTS
PAGE
----
ARTICLE I DESCRIPTION AND PURPOSE................................... 1
1.1 Plan Name................................................. 1
1.2 Plan Description.......................................... 1
1.3 Plan Purposes............................................. 1
1.4 Plan Background........................................... 1
ARTICLE II ELIGIBILITY............................................... 2
2.1 Eligibility Requirements.................................. 2
2.2 Termination or Transfer Prior to Entry Date............... 2
2.3 Transfer to or Among Participating Employers.............. 2
2.4 Multiple Employment....................................... 3
2.5 Ceasing to be a Qualified Employee........................ 3
2.6 Condition of Participation................................ 3
2.7 Termination of Participation.............................. 3
ARTICLE III CONTRIBUTIONS............................................. 4
3.1 Pre-Tax Contributions..................................... 4
3.2 Profit Sharing Contributions.............................. 5
3.3 Rollovers and Transfers................................... 7
3.4 Corrective Contributions.................................. 7
ARTICLE IV TRUSTEE'S ACCOUNTS AND VALUATION.......................... 8
4.1 Establishment of Accounts................................. 8
4.2 Valuation and Account Adjustment.......................... 8
4.3 Adjustment Accounting..................................... 8
4.4 Allocations Do Not Create Rights.......................... 8
ARTICLE V PARTICIPANT INVESTMENT DIRECTION.......................... 9
5.1 Establishment of Investment Funds......................... 9
5.2 Investment Directions..................................... 9
5.3 Investment Direction Responsibility Resides With
Participants.............................................. 10
5.4 Beneficiaries and Alternate Payees........................ 10
i
<PAGE>
PAGE
----
ARTICLE VI WITHDRAWALS DURING EMPLOYMENT............................. 11
6.1 Hardship Withdrawals from Pre-Tax Contribution Account.... 11
6.2 Withdrawals from Pre-Tax Contribution Account After
Age 59-1/2................................................ 12
6.3 Rules for Withdrawals..................................... 12
6.4 No Withdrawals from Profit Sharing Contribution or
Rollover Accounts......................................... 12
ARTICLE VII VESTING................................................... 13
7.1 Full and Immediate Vesting................................ 13
ARTICLE VIII DISTRIBUTIONS AFTER TERMINATION........................... 14
8.1 Form and Time of Distribution............................. 14
8.2 Beneficiary Designation................................... 16
8.3 Assignment, Alienation of Benefits........................ 17
8.4 Payment in Event of Incapacity............................ 17
8.5 Payment Satisfies Claims.................................. 18
8.6 Disposition if Distributee Cannot be Located.............. 18
8.7 Direct Rollovers and Transfers............................ 18
8.8 Suspension of Distributions Following Reemployment........ 18
ARTICLE IX CONTRIBUTION LIMITATIONS.................................. 19
9.1 Pre-Tax Contribution Dollar Limitation.................... 19
9.2 Actual Deferral Percentage Limitations.................... 19
9.3 Earnings on Excess Contributions.......................... 21
9.4 Aggregate Defined Contribution Limitations................ 21
9.5 Aggregate Defined Contribution/Defined Benefit
Limitations............................................... 22
9.6 Administrator's Discretion................................ 23
ARTICLE X SERVICE RULES............................................. 24
10.1 Computation Period....................................... 24
10.2 Year of Service.......................................... 24
10.3 Hour of Service.......................................... 24
10.4 One-Year Break in Service................................ 26
10.5 Loss of Service.......................................... 27
10.6 Pre-Acquisition Services................................. 27
ARTICLE XI ADOPTION, AMENDMENT AND TERMINATION...................... 28
11.1 Adoption by Affiliated Organizations..................... 28
11.2 Authority to Amend and Procedure......................... 28
11.3 Authority to Terminate and Procedure..................... 28
ii
<PAGE>
PAGE
----
11.4 Vesting Upon Termination, Partial Termination or
Discontinuance of Contributions.......................... 29
11.5 Distribution Following Termination, Partial
Termination or Discontinuance of Contributions........... 29
ARTICLE XII DEFINITIONS, CONSTRUCTION AND INTERPRETATIONS............ 30
12.1 Account.................................................. 30
12.2 Administrator............................................ 30
12.3 Affiliated Organization.................................. 30
12.4 Beneficiary.............................................. 30
12.5 Board.................................................... 30
12.6 Code..................................................... 30
12.7 Committee................................................ 30
12.8 Company.................................................. 30
12.9 Consent of Spouse........................................ 30
12.10 Effective Date........................................... 31
12.11 Eligible Earnings........................................ 31
12.12 Employee................................................. 32
12.13 Fund..................................................... 32
12.14 Governing Law............................................ 32
12.15 Headings................................................. 32
12.16 Highly Compensated Employee.............................. 32
12.17 Number and Gender........................................ 34
12.18 Participant.............................................. 34
12.19 Participating Employer................................... 34
12.20 Plan..................................................... 34
12.21 Plan Rule................................................ 34
12.22 Plan Year................................................ 34
12.23 Pre-Tax Contribution Account............................. 34
12.24 Pre-Tax Contributions.................................... 34
12.25 Profit Sharing Contribution Account...................... 34
12.26 Profit Sharing Contributions............................. 34
12.27 Qualified Employee....................................... 34
12.28 Rollover Account......................................... 35
12.29 Section 415 Wages......................................... 35
12.30 Termination of Employment................................. 35
12.31 Testing Wages............................................. 36
12.32 Treasury Regulations...................................... 36
12.33 Trust..................................................... 36
12.34 Trustee................................................... 36
12.35 Valuation Date............................................ 36
ARTICLE XIII ADMINISTRATION OF PLAN.................................... 37
13.1 Administrator, Named Fiduciary............................ 37
13.2 Compensation and Expenses................................. 37
iii
<PAGE>
PAGE
----
13.3 Adoption of Rules......................................... 38
13.4 Administrator's Discretion................................ 38
13.5 Indemnification........................................... 38
13.6 Benefit Claim Procedure................................... 38
13.7 Correction of Errors...................................... 39
ARTICLE XIV MISCELLANEOUS............................................. 40
14.1 Merger, Consolidation, Transfer of Assets................. 40
14.2 Limited Reversion of Fund................................. 40
14.3 Top-Heavy Provisions...................................... 40
14.4 No Employment Rights Created.............................. 44
iv
<PAGE>
NASH-FINCH COMPANY
PROFIT SHARING PLAN
1994 REVISION
ARTICLE I
DESCRIPTION AND PURPOSE
1.1 PLAN NAME. The name of the Plan is the "Nash-Finch Company Profit
Sharing Plan."
1.2 PLAN DESCRIPTION. The Plan is a profit sharing plan providing for
Pre-Tax Contributions pursuant to a cash or deferred arrangement and
discretionary Profit Sharing Contributions. The Plan is intended to qualify
under Code section 401(a) and to satisfy the requirements of Code section
401(k). Notwithstanding the designation of the Plan as a profit sharing plan,
a Participating Employer may make contributions to the Plan even though the
Participating Employer has no current or accumulated earnings and profits.
1.3 PLAN PURPOSES. The purposes of the Plan are to promote effort and
cooperation on the part of participating Qualified Employees; to provide a
measure of economic security to each such Qualified Employee by accumulating
contributions for distribution upon retirement, as a supplement to other
resources then available; and to permit participating Qualified Employees to
share in the profits and growth of their Participating Employer.
1.4 PLAN BACKGROUND. (A) Effective as of January 2, 1966, the Company
established the Plan and created the Trust for the benefit of Qualified
Employees. Thereafter, the Plan was amended from time to time and restated in
its entirety by way of the 1976, 1984 and 1989 Revisions.
(B) For purposes of incorporating two separate Declarations of
Amendment that were adopted with respect to the 1989 Revision, to bring the
Plan into compliance with applicable laws that became effective subsequent to
the 1989 Revision and to make other miscellaneous changes to the Plan, the
Plan was amended and restated in the manner set forth in this 1994 Revision,
effective generally as of January 1, 1994, and in connection therewith, the
provisions of the Trust were restated in a separate agreement.
1
<PAGE>
ARTICLE II
ELIGIBILITY
2.1 ELIGIBILITY REQUIREMENTS. (A) An Employee is eligible to
participate in the Plan on the dates provided in clause (1), (2) and (3) for
the purposes specified in such clauses, provided, in any case, that the
Employee is a Qualified Employee on such date:
(1) the day he or she completes an Hour of Service of the type
specified in Section 10.3(A)(1) for the purpose of having a rollover or
transfer made on his or her behalf pursuant to Section 3.3;
(2) the first day of the calendar quarter that falls on or next
follows the last day of the Computation Period during which he or she
first completes one Year of Service for the purpose of having Pre-Tax
Contributions made on his or her behalf pursuant to Section 3.1; and
(3) the first day of the calendar quarter that falls on or next
follows the last day of the Computation Period during which he or she
first completes two Years of Service for the purpose of being eligible
to share in the allocation of Profit Sharing Contributions made pursuant
to Section 3.2.
(B) If an Employee is not a Qualified Employee on the date on which he
or she would otherwise be eligible to participate in the Plan for a purpose
specified in clause (2) or (3) of Subsection (A), he or she will become
eligible to participate in the Plan as of the first day of the calendar
quarter that falls on or next follows the date he or she becomes a Qualified
Employee if he or she remains a Qualified Employee on that date.
(C) Notwithstanding Subsection (A), in conjunction with an
acquisition, the Company's Board may specify a special entry date for those
Qualified Employees with respect to whom pre-acquisition service is taken into
account pursuant to Section 10.6.
2.2 TERMINATION OR TRANSFER PRIOR TO ENTRY DATE. An Employee whose
employment is terminated or who is transferred to an employment classification
that is excluded from the definition of the term "Qualified Employee" after
satisfying the applicable service requirement under Section 2.1(A)(2) or (3)
but prior to the date he or she would first become eligible to participate in
the Plan for the corresponding purpose specified in Section 2.1(A)(2) or (3)
will, subject to Section 10.5, upon subsequent reemployment in, or retransfer
to, an employment classification included in the definition of "Qualified
Employee," be eligible to commence participation in the Plan for such purpose
as of the first day of the calendar quarter that falls on or next follows the
day he or she first completes an Hour of Service of the type specified at
Section 10.3(A)(1) as a Qualified Employee following the termination or
transfer.
2.3 TRANSFER TO OR AMONG PARTICIPATING EMPLOYERS. (A) Notwithstanding
Section 2.1(A), an Employee who transfers employment from an Affiliated
Organization that is not a Participating Employer to a Participating Employer
and who, immediately prior to such transfer, was an active participant in a
profit sharing plan qualified under Code section 401(a) maintained by the
Affiliated Organization, is eligible to participate in the Plan for all
purposes as of the first day of the calendar quarter that falls on or next
follows the day he or she first completes an Hour of Service of the type
specified in Section 10.3(A)(1) as a Qualified Employee following such
transfer.
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(B) A Participant who transfers from one Participating Employer to
another Participating Employer as a Qualified Employee will participate in the
Plan for the Plan Year during which the transfer occurs on the basis of his or
her separate Eligible Earnings from each Participating Employer.
2.4 MULTIPLE EMPLOYMENT. A Participant who is simultaneously employed as
a Qualified Employee with more than one Participating Employer during a Plan
Year will participate in the Plan as a Qualified Employee of all such
Participating Employers on the basis of his or her separate Eligible Earnings
for the Plan Year from each such Participating Employer.
2.5 CEASING TO BE A QUALIFIED EMPLOYEE. No contribution will be made by
or on behalf of a Participant after the Participant ceases to be a "Qualified
Employee," except for any contribution due on account of the portion of the
Plan Year preceding the cessation. Such a Participant will, subject to
Section 10.5, be eligible to resume active participation in the Plan as of the
first day of the calendar quarter that falls on or next follows the day he or
she first completes an Hour of Service of the type specified in Section
10.3(A)(1) after reemployment as a Qualified Employee.
2.6 CONDITION OF PARTICIPATION. Each Qualified Employee, as a condition
of participation, is bound by all of the terms and conditions of the Plan and
must furnish to the Administrator such pertinent information and execute such
instruments as the Administrator may require.
2.7 TERMINATION OF PARTICIPATION. A Participant will cease to be such as
of the later of the date on which
(a) he or she ceases to be a Qualified Employee, or
(b) all benefits, if any, to which he or she is entitled under
this Plan have been distributed.
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ARTICLE III
CONTRIBUTIONS
3.1 PRE-TAX CONTRIBUTIONS. (A) Subject to the limitations of Article
IX, for each Plan Year the Participating Employer of each Participant who is
eligible to participate in the Plan for the purpose of having Pre-Tax
Contributions made on his or her behalf pursuant to Article II will make
Pre-Tax Contributions to the Trust on behalf of such Participant in the amount
by which the Participant's Eligible Earnings have been reduced in accordance
with the succeeding provisions of this section. Pre-Tax Contributions will be
paid to the Trustee as soon as practicable after the date on which the
Participant would have otherwise received the Eligible Earnings with respect
to which such contribution is made.
(B) Except as provided in Subsection (C), a Participant's Eligible
Earnings will be reduced in accordance with the following rules:
(1) A Participant may elect to reduce his or her Eligible
Earnings by any one percent increment from one percent to 15 percent,
and the percentage so elected will automatically apply to the
Participant's Eligible Earnings as adjusted from time to time. Plan
Rules may, however, specify a lower maximum percentage for Highly
Compensated Employees.
(2) In conjunction with a Participant's entering or reentering
the Plan pursuant to Article II, reduction of the Participant's Eligible
Earnings will commence as of the first payroll period that begins at
least 30 days (or such shorter period as Plan Rules may allow) after the
Administrator receives the Participant's complete and accurate election
in form prescribed by Plan Rules. If, however, the election is not
received until after the last day of the month during which the
Participant enters or reenters the Plan, it will not be effective and
commencement of Eligible Earnings reductions will be made in accordance
with clause (3).
(3) If a Participant does not elect to commence reductions of
his or her Eligible Earnings in conjunction with his or her entry or
reentry into the Plan in accordance with clause (2), he or she may
thereafter elect to have such reductions commence as of the first
payroll period that begins on or after the first day of the calendar
quarter that follows by at least 30 days (or such shorter period as Plan
Rules may allow) the date on which the Administrator receives a complete
and accurate election in form prescribed by Plan Rules.
(4) No Pre-Tax Contributions will be made on behalf of a
Participant with respect to a period during which he or she is not a
Qualified Employee. Only Eligible Earnings payable after a
Participant's election has been received and become effective will be
reduced pursuant to the election.
(5) A Participant may change the percentage rate at which his or
her Eligible Earnings will be reduced as of the first payroll period
that begins on or after the first day of the calendar quarter that
follows by at least 30 days (or such shorter period as Plan Rules may
allow) the date on which the Administrator receives a complete and
accurate notice of such change in form prescribed by Plan Rules.
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(6) A Participant may suspend Eligible Earnings reductions
beginning with the first payroll period that begins at least 30 days (or
such shorter period as Plan Rules may allow) after the date on which the
Administrator receives a complete and accurate notice of such suspension
in form prescribed by Plan Rules. Eligible Earnings reductions for any
Participant who makes a hardship withdrawal under Section 6.1 will be
automatically suspended for the 12-month period beginning on the date of
the withdrawal distribution.
(7) A Participant whose Eligible Earnings reductions have ceased
by reason of an automatic or voluntary suspension may, after the
restoration of eligibility or the end of the suspension period, resume
Eligible Earnings reductions by submitting a notice of change in
accordance with paragraph (5).
(C) In addition to Eligible Earnings reductions on a continuing
payroll period basis pursuant to Subsection (B), a Participant may elect, in
accordance with, and subject to any limitations specified in, Plan Rules, a
percentage reduction with respect to any bonus payments to which a Participant
is otherwise entitled.
(D) Participants' Eligible Earnings will be reduced in accordance with
uniform procedures established by the Administrator. If any election or
notice submitted by a Participant to the Administrator is not processed on a
timely basis or if, for any reason, a Participant's Eligible Earnings are not
reduced in accordance with the Participant's election, no retroactive
adjustments of the Participant's Eligible Earnings reductions will be made to
take into account the effect of any such delay or failure. A Participant may,
however, elect to reduce his or her Eligible Earnings payable during any
remaining portion of the Plan Year in which the delay or failure occurred at
more than the otherwise applicable percentage to adjust for the effect of such
delay or failure so long as the total reductions for the Plan Year do not
exceed the applicable maximum percentage.
3.2 PROFIT SHARING CONTRIBUTIONS. (A) Each Participating Employer may,
but is not required to, make a Profit Sharing Contribution to the Trust for
any Plan Year in such amount, if any, as determined by the Participating
Employer's Board.
(B) To be eligible to share in a Participating Employer's Profit
Sharing Contribution for a particular Plan Year, a Participant must have
(1) entered the Plan as a Participant for the purpose of being
eligible to share in the allocation of Profit Sharing Contributions for
the Plan Year pursuant to Article II,
(2) been a Qualified Employee of the Participating Employer
during the Plan Year,
(3) completed at least 1000 Hours of Service during the Plan
Year or, in the case of either
(a) a Qualified Employee who, during the Plan Year, first
entered the Plan for the purpose of being eligible to share in the
allocation of Profit Sharing Contributions, or
(b) a former Participant who terminated his or her
employment and was rehired as a Qualified Employee during such
Plan Year,
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either completed at least 1000 Hours of Service during such Plan Year
or, during the period beginning on the date on which he or she entered
or reentered the Plan as a Participant during such Plan Year and ending
on the last day of the Plan Year, completed at least the number of Hours
of Service equal to the product of 1000 multiplied by a fraction, the
numerator of which is the number of full months from such entry or
reentry date to the last day of the Plan Year and the denominator of
which is 12, and
(4) been either actively employed by an Affiliated Organization
on the last day of the Plan Year or absent from active employment in
connection with
(a) a leave authorized by an Affiliated Organization for
any cause for the authorized period or, in the absence of an
authorized period, for 90 days, plus any extensions granted by the
Affiliated Organization,
(b) any circumstances (whether or not he or she has
terminated employment) so long as the Participant continues to
receive his or her regular compensation from an Affiliated
Organization for the period extending to or beyond the last day of
the Plan Year,
(c) service in the armed forces of the United States or
other government service in time of war or national emergency, or
(d) illness or disability.
(C) Subject to the limitations of Article IX, each eligible
Participant's allocated share of his or her Participating Employer's Profit
Sharing Contribution for a Plan Year will bear the same ratio to the
Participating Employer's total Profit Sharing Contribution as such
Participant's Eligible Earnings for the Plan Year bear to the aggregate
Eligible Earnings of all Participants who share in such Profit Sharing
Contribution for the Plan Year.
(D) Profit Sharing Contributions, if any, will be paid to the Trustee
on such date or dates as the Participating Employer may elect during or
following the Plan Year for which they are made; provided, first, that the
total amount of any such Profit Sharing Contributions for a particular Plan
Year will be paid in full on or before the date required for filing the
employer's federal income tax return for its fiscal year ending with or within
the Plan Year, or such date as duly extended; and, second, that the
Participating Employer will either
(1) designate the payment in writing to the Trustee as a payment
on account of such fiscal year, or
(2) claim such payment as a deduction on its federal income tax
return for such fiscal year.
(E) Any Profit Sharing Contribution made prior to completion of the
allocation of such contribution among Participants eligible to share in the
contribution will be carried in a suspense account until the allocation is
made, but the allocation, when made, will be made as of the last day of the
Plan Year for which such contribution is made. The Trustee will invest the
suspense account in accordance with the directions of the Committee, and any
earnings or losses will be allocated in the same manner as the contribution.
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3.3 ROLLOVERS AND TRANSFERS. (A) A Participant may, with the prior
consent of the Administrator, contribute to the Trust, within 60 days of
receipt,
(1) the balance of an individual retirement account to which the
only contributions have been one or more "eligible rollover
distributions," within the meaning of Code section 402(c)(4), from a
plan qualified under Code section 401(a), or
(2) an eligible rollover distribution from such a qualified
plan.
(B) With the prior consent of the Administrator, a Participant's
accounts under another plan qualified under Code section 401(a) may be
transferred directly to the Trust. Other than in connection with an
acquisition, such a transfer will not be permitted if, as a result of the
transfer, the Plan would be required to provide any option with respect to the
form or time of distribution or any other right, benefit or feature not
available under the Plan prior to the transfer.
(C) Other than in connection with an acquisition, any contribution or
transfer to the Trust pursuant to Subsection (A) or (B) must be made in cash
and will be credited to the Participant's Rollover Account.
3.4 CORRECTIVE CONTRIBUTIONS. For any Plan Year a Participating Employer
may, but is not required to, contribute to the Profit Sharing Contribution
Accounts of Qualified Employees other than Highly Compensated Employees, or
any group of such Qualified Employees, such amounts as it deems advisable to
assist the Plan in satisfying the requirements of Section 9.2 or other
applicable requirements under the Code and Treasury Regulations for such Plan
Year. Such contributions will be allocated among such Accounts in proportion
to the Qualified Employees' Eligible Earnings, in proportion to the Pre-Tax
Contributions made for such Qualified Employees or in equal shares, as the
Participating Employer directs at the time such contribution is made.
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ARTICLE IV
TRUSTEE'S ACCOUNTS AND VALUATION
4.1 ESTABLISHMENT OF ACCOUNTS. The following Accounts will be established and
maintained for each Participant:
(a) Pre-Tax Contribution Account, to which any Pre-Tax
Contributions made on the Participant's behalf will be added;
(b) Profit Sharing Contribution Account, to which any Profit
Sharing Contributions made on the Participant's behalf will be added;
and
(c) Rollover Account, to which any rollover or trust-to-trust
transfer made by or on behalf of the Participant will be added.
One or more additional accounts may be established for any Participant or
group of similarly situated Participants in connection with a merger of
another plan into the Plan, in which case provisions of the Plan applicable to
such Accounts will be set forth on an exhibit to the Plan in accordance with
Section 14.1(B).
4.2 VALUATION AND ACCOUNT ADJUSTMENT. (A) As of the close of business
on each Valuation Date, each Participant's Accounts within each investment
fund established pursuant to Section 5.1 will be separately adjusted in a
uniform and equitable manner for income, expense, gains and losses of the
investment fund since the last prior adjustment.
(B) The Committee may from time to time cause Participants' Accounts
to be adjusted on any interim Valuation Date where the Committee deems such
adjustment to be necessary to prevent inequitable results because of
extraordinary increases or decreases in the value of the Fund since the last
preceding Valuation Date or other events.
4.3 ADJUSTMENT ACCOUNTING. The adjustments made under Section 4.2 will
be set forth in the accounting rendered as of the Valuation Date for which
they were made.
4.4 ALLOCATIONS DO NOT CREATE RIGHTS. The fact that allocations are made
and credited to the Accounts of a Participant will not vest in the Participant
any right, title or interest in or to any portion of the Fund except at the
time or times and upon the terms and conditions expressly set forth in the
Plan. Notwithstanding any allocation or credit to the Account of any
Participant, the issuance of any statement to the Participant or the
distribution of all or any portion of a Participant's Account balance, the
Administrator may direct the Participant's Account to be adjusted to the
extent necessary to correct any error in such Account, whether caused by a
misapplication of any provision of the Plan or otherwise, and may recover from
the Participant or the Participant's Beneficiary the amount of any excess
distribution. Any such adjustment will be made within a reasonable time after
the error is discovered.
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ARTICLE V
PARTICIPANT INVESTMENT DIRECTION
5.1 ESTABLISHMENT OF INVESTMENT FUNDS. (A) In order to allow each
Participant to determine the manner in which his or her Accounts will be
invested, the Trustee will maintain, within the Trust, three or more separate
investment funds of such nature and possessing such characteristics as the
Committee may specify from time to time. Each Participant's Accounts will be
invested in the investment funds in the proportions directed by the
Participant in accordance with the procedures set forth in Section 5.2. The
Committee may, from time to time, direct the Trustee to establish additional
investment funds or terminate any existing investment fund.
(B) Notwithstanding any other provision of the Plan to the contrary,
the Committee may direct the Trustee to suspend Participant investment
activity (including such activity in connection with the withdrawals and
distributions) in any or all investment funds, or impose special rules or
restrictions of uniform application, for a period determined by the Committee
to be necessary in connection with
(1) the establishment or termination of any investment fund,
(2) the receipt by the Trustee from, or transfer by the Trustee
to, another trust of account balances pursuant to Section 3.3 or 8.7 in
connection with an acquisition or divestiture or otherwise,
(3) a change of Trustee or investment manager, or
(4) such other circumstances determined by the Committee as
making such suspension or special rules or restrictions necessary or
appropriate.
5.2 INVESTMENT DIRECTIONS. (A) Each new Participant will direct the
manner in which contributions to his or her Accounts will be invested among
the investment funds maintained pursuant to Section 5.1. Investment
directions must be made in five percent increments and may be made separately
with respect to the Participant's Pre-Tax Contribution Account and with
respect to the aggregate of his or her Profit Sharing Contribution and
Rollover Accounts. Each direction must be made, in accordance with Plan
Rules, in conjunction with the Participant's enrollment in the Plan. To the
extent a Participant fails to direct Account investments, the Accounts will be
invested in accordance with Plan Rules.
(B) A Participant may direct a change in the manner in which his or
her Accounts will be invested among the investment funds maintained pursuant
to Section 5.1. Such a direction will be subject to the rules set forth in
Subsection (A), and will be effective as of the first day of the calendar
quarter that begins at least 30 days (or such shorter period as the Plan Rules
may allow) after the date on which the Trustee receives direction from the
Participant in accordance with Plan Rules.
(C) Contributions or transfers made prior to a date on which they may
be invested in the investment fund directed by the Participant will be
invested in short-term investments until such date, at which time the
contributions will be invested in the appropriate investment fund or funds in
accordance with the Participants' directions. Any income realized from such
short-term
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investments will be allocated in a uniform and equitable manner among the
investment funds in which such contributions are invested.
(D) Plan Rules will include procedures that provide Participants with
the opportunity to obtain written confirmation of investment directions made
pursuant to this section.
5.3 INVESTMENT DIRECTION RESPONSIBILITY RESIDES WITH PARTICIPANTS.
Neither the Administrator, the Trustee nor any Affiliated Organization has any
authority, discretion, responsibility or liability with respect to a
Participant's selection of the investment funds in which his or her Accounts
will be invested, the entire authority, discretion and responsibility for, and
any results attributable to, the selection being that of the Participant.
5.4 BENEFICIARIES AND ALTERNATE PAYEES. Solely for purposes of this
article, the term "Participant" includes the Beneficiary of a deceased
Participant and an alternate payee under a qualified domestic relations order
within the meaning of Code section 414(p) unless otherwise provided in such
order, but only after
(1) the Administrator has determined the identity of the
Beneficiary and the amount of the Account balance to which he or she is
entitled in the case of a Beneficiary of a deceased Participant, or
(2) the Administrator has, in accordance with Plan Rules, made a
final determination that the order is a qualified domestic relations
order and all rights to contest such determination in a court of
competent jurisdiction within the time prescribed by Plan Rules have
expired or been exhausted in the case of an alternate payee.
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ARTICLE VI
WITHDRAWALS DURING EMPLOYMENT
6.1 HARDSHIP WITHDRAWALS FROM PRE-TAX CONTRIBUTION ACCOUNT. (A) Subject
to the provisions of Section 6.3, a Participant may withdraw from his or her
Pre-Tax Contribution Account an amount not in excess of the lesser of (1) the
balance of the Account as of the Valuation Date that last precedes the date of
distribution by at least 45 days (or such shorter period as Plan Rules may
allow) or (2) the balance of the Account on December 31, 1988 increased by the
amount of Pre-Tax Contributions added to the Account after December 31, 1988
and reduced by the amount of any withdrawals from the Account after December
31, 1988 on account of hardship. Such withdrawal will be made only if the
Administrator determines that the distribution is made on account of an
immediate and heavy financial need of the Participant and is necessary to
satisfy such financial need.
(B) The existence of an immediate and heavy financial need will be
made by the Administrator on the basis of all relevant facts and circumstances
demonstrating that a need exists to enable the Participant to secure or
maintain a livelihood or provide for the needs of his or her spouse or
dependent (as described in Code section 152). A distribution will be deemed
to be made on account of an immediate and heavy financial need, however, if it
is determined by the Administrator to be on account of:
(1) expenses for medical care, described in Code section 213(d),
incurred or to be incurred by the Participant, the Participant's spouse
or the Participant's dependent (as described in Code section 152);
(2) costs directly related to the purchase (excluding mortgage
payments) of a principal residence of the Participant;
(3) payment of tuition and related educational expenses for the
next year of post-secondary education for the Participant or his or her
spouse, child or other dependent; or
(4) payments necessary to prevent the eviction of the
Participant from his or her principal residence or foreclosure of the
mortgage on the Participant's principal residence.
(C) A distribution will be deemed to be necessary to satisfy the
immediate and heavy financial need of the Participant only if the
Administrator determines that each of the following requirements is satisfied.
(1) The distribution is not in excess of the sum of the amount
of the immediate and heavy financial need of the Participant plus, if
elected by the Participant, the amount necessary to pay any federal,
state or local income taxes or penalties reasonably anticipated by the
Administrator to result from the distribution.
(2) The Participant has received all withdrawals and has taken
all nontaxable loans available under all qualified plans maintained by
any Affiliated Organization.
(3) All Pre-Tax Contributions under this Plan and all elective
deferrals and after-tax employee contributions by or on behalf of the
Participant under any other qualified or nonqualified plan of deferred
compensation (including stock option, stock purchase and
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similar plans) maintained by any Affiliated Organization are suspended
for a period of 12 months following the date of the distribution.
(4) For the Participant's taxable year following the taxable
year during which he or she received the distribution, the amount of
Pre-Tax Contributions under the Plan and elective contributions that may
be made on the Participant's behalf pursuant to Code section 402(g)
under any other qualified plan maintained by any Affiliated Organization
will be reduced by the sum of Pre-Tax Contributions and such other
elective contributions made on the Participant's behalf for the taxable
year during which he or she received the distribution.
(D) The Administrator's determination of the existence of a
Participant's financial hardship and the amount that may be withdrawn to
satisfy the need created by such hardship will be made in accordance with
Treasury Regulations, and will be final and binding on the Participant. Such
withdrawal distribution will be made as soon as administratively practicable
following the Administrator's determination that a financial hardship exists.
The Administrator may require the Participant to make representations and
certifications concerning his or her entitlement to a withdrawal pursuant to
this section and is entitled to rely on such representations and
certifications unless the Administrator has actual knowledge to the contrary.
The Administrator will not be obligated to supervise or otherwise verify that
amounts withdrawn are applied in the manner specified in the Participant's
withdrawal application.
6.2 WITHDRAWALS FROM PRE-TAX CONTRIBUTION ACCOUNT AFTER AGE 59-1/2.
Subject to the provisions of Section 6.3, a Participant who has attained age
59-1/2 may withdraw all or any portion of his or her Pre-Tax Contribution
Account balance as of the Valuation Date that last precedes the date of
distribution by at least 45 days (or such shorter period as Plan Rules may
allow). Such withdrawal distribution will be made as soon as administratively
practicable following the date of the Administrator's determination that the
Participant is entitled to the withdrawal.
6.3 RULES FOR WITHDRAWALS. (A) Any withdrawal from a Participant's
Pre-Tax Contribution Account reduces the balance of the Account and the
Account will thereafter share in income, expense, gains and losses of the Fund
on the basis of the reduced balance.
(B) A withdrawal distribution will be made only upon the Participant's
application made in accordance with Plan Rules.
(C) The Participant's withdrawal application may specify the
investment fund or funds from which the withdrawal is to be made and the
relative amounts to be withdrawn from such funds, and the Trustee will make
the distribution in accordance with such specifications. If the withdrawal
application does not otherwise specify, the withdrawal will be made from each
investment fund in which the Participant's Pre-Tax Contribution Account is
then invested on a pro rata basis.
(D) The provisions of Section 8.7(A) will apply to any withdrawal
distribution that constitutes an "eligible rollover distribution" within the
meaning of Code section 402(c)(4).
6.4 NO WITHDRAWALS FROM PROFIT SHARING CONTRIBUTION OR ROLLOVER ACCOUNTS.
Except as provided in Sections 8.1 and 8.8, in no case may a Participant make
a withdrawal from his or her Profit Sharing Contribution Account or Rollover
Account while employed with an Affiliated Organization.
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ARTICLE VII
VESTING
7.1 FULL AND IMMEDIATE VESTING. Each Participant always has a fully
vested, nonforfeitable interest in his or her Accounts.
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ARTICLE VIII
DISTRIBUTIONS AFTER TERMINATION
8.1 FORM AND TIME OF DISTRIBUTION. (A) Following a Participant's
termination of employment or earlier attainment of age 70-1/2, the Trustee
will distribute to the Participant or, if the Participant has died, to his or
her Beneficiary, the balance of the Participant's Accounts. The amount of any
distribution made in the form of a lump sum payment will be equal to the
aggregate balance of the Participant's Accounts as of the Valuation Date that
coincides with or last precedes the distribution date. If a lump sum
distribution is made prior to the completion of the valuation as of such
Valuation Date, the distribution may be made in two payments, one preceding
the completion of the valuation and one following as soon as administratively
practicable thereafter, in accordance with Plan Rules. Subject to the
remaining subsections of this Section 8.1 and Sections 8.7 and 8.8,
distributions will be made in accordance with the following provisions.
(1) If the aggregate balance of the Participant's Accounts at
the time of the distribution is not more than $3500, distribution to the
Participant will be made, in the form of a lump sum cash payment, as
soon as administratively practicable following the Participant's
termination of employment. This clause will not apply, however, if the
Participant's Account balance exceeded $3500 at the time of any previous
distribution.
(2) If clause (1) does not apply, distribution to the
Participant will be made or commence, in the form of a lump sum cash
payment or installment cash payments, according to the Participant's
election, on or as soon as administratively practicable after a date
specified by the Participant. If the Participant terminates employment
before attaining age 62, distribution to the Participant must be made or
commence not later than the date on which the Participant attains age
65. If the Participant had attained age 62 when he or she terminated
employment, distribution to the Participant must be made or commence not
later than the date determined under Subsection (C)(1) unless the
Participant elects to defer the distribution in the manner described in
Subsection (B).
(3) If the aggregate balance of a Participant's Accounts at the
time of his or her death is not more than $3500, distribution to the
Participant's Beneficiary will be made, in the form of a lump sum cash
payment, as soon as administratively practicable following the
Administrator's receipt of notice of the Participant's death. If the
foregoing sentence does not apply, distribution to the Participant's
Beneficiary will be made at such time or times and in such manner as the
Beneficiary elects in accordance with Subsection (E).
(B) Subject to the provisions of the other subsections of this Section
8.1, a Participant described in clause (2) of Subsection (A) who has attained
age 62 when he or she terminates employment may elect to defer commencement of
his or her distribution under the Plan by providing to the Administrator, by a
date determined in accordance with Plan Rules, a written, signed statement
describing whether the benefit is to be distributed in the form of a lump sum
payment or installment payments and specifying the date on which the payment
is to be made or commence; provided, that distribution to the Participant must
be made or commence not later than the April 1 of the calendar year following
the calendar year during which the Participant attains age 70-1/2. Plan Rules
may permit a Participant to modify any election in any manner determined by
the Administrator to be consistent with Code section 401(a)(14) and Treasury
Regulations thereunder and the other provisions of this Section 8.1.
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(C) Except as provided in Subsection (B), distribution to the
Participant will be made, or in the case of installment payments will
commence, not later than the earlier of -
(1) The sixtieth day following the close of the Plan Year during
which there occurs the later of -
(a) the date of his or her termination of employment,
(b) his or her sixty-fifth birthday, or
(c) the tenth anniversary of the Plan Year in which he or
she commenced participation in the Plan; or
(2) April 1 of the calendar year following the calendar year
during which he or she attains age 70-1/2, except that this clause does
not apply to any Participant who attained age 70-1/2 before January 1,
1988 and who is not a "five-percent owner" as defined in Treasury
Regulations under Code section 401(a)(9).
(D) If a distribution is to be made in installments, such installments
will be substantially equal in amount and paid on a quarterly, semi-annual or
annual basis, for a period not extending beyond either the Participant's life
expectancy or the life expectancy of the Participant and the Participant's
Beneficiary; and, if the Participant's Beneficiary is not the Participant's
spouse, the period over which such payments are to be made will be determined
by reference to the applicable table of joint life expectancies set forth in
Treasury Regulation section 1.401(a)(9)-2. Notwithstanding the foregoing, not
more than once each Plan Year, a Participant who is receiving installment
payments may elect, in accordance with Plan Rules, to either increase the
amount of the installment payments or to receive a lump sum payment of all or
a portion of the amount by which his or her Account balances as of the
Valuation Date immediately preceding the date on which such distribution is
made exceeds the aggregate amount of installment payments made to the
Participant since Valuation Date. Prior to April 1 of the calendar year
following the calendar year during which the Participant attains age 70-1/2,
the Participant may elect, in writing to the Administrator, whether the life
expectancies for the Participant and the Participant's spouse are to be
recalculated on an annual basis for purposes of determining the amount of each
installment payment. Any such election will become irrevocable as of the date
specified above. If no such election is made, the life expectancies of the
Participant and the Participant's spouse will not be recalculated on an annual
basis.
(E) If a Participant dies before receiving the full amount to which he
or she is entitled, the amount remaining will be distributed to the
Participant's Beneficiary at such time or times and in such manner as the
Beneficiary elects, subject, however to the following rules -
(1) If the Participant dies after April 1 of the calendar year
following the calendar year during which he or she attains age 70-1/2,
the distribution will be made to the Beneficiary at a rate that would
result in the benefit being distributed at least as rapidly as if
distribution were made at the same rate as was in effect immediately
prior to the Participant's death.
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(2) If the Participant dies before April 1 of the calendar year
following the calendar year during which he or she attains age 70-1/2,
the distribution will, at the Beneficiary's election, be made either -
(a) in its entirety no later than December 31 of the
calendar year which contains the fifth anniversary of the date of
the Participant's death, or
(b) in installments, commencing no later than December 31
of the calendar year immediately following the calendar year in
which the Participant died (unless the Beneficiary is the
Participant's spouse, in which case payments will begin no later
than the later of the date specified above or December 31 of the
calendar year in which the Participant would have attained age
70-1/2 had he or she lived), and being paid over a period not
exceeding the Beneficiary's remaining life expectancy (as
determined on the basis of the Beneficiary's age as of the date on
which payments are required to commence under this clause (2) and,
if the Beneficiary is the Participant's spouse, as redetermined on
an annual basis).
A Beneficiary's election with respect to the time and manner in which any
amount remaining at the Participant's death will be distributed must be made
no later than the earlier of the dates set forth in clause 2(a) and (b) above,
and is irrevocable following such date. If the Beneficiary fails to make an
election under clause (2), distribution will be made in the manner set forth
at clause (2)(a). If the Participant's spouse is the Beneficiary and dies
after the Participant's death but before distributions to such spouse have
commenced, the foregoing rules will be applied as if the surviving spouse were
the Participant, including the substitution of the surviving spouse's date of
death for the Participant's date of death; provided that the alternative
commencement date in clause (2)(b) relating to the date on which the
Participant would have attained age 70-1/2 had he or she lived will not be
available.
(F) Notwithstanding any other provision of the Plan to the contrary,
distributions will be made in accordance with Treasury Regulations issued
under Code section 401(a)(9), including Treasury Regulation section
1.401(a)(9)-2, and any provisions of the Plan reflecting Code section
401(a)(9) take precedence over any distribution options that are inconsistent
with Code section 401(a)(9).
8.2 BENEFICIARY DESIGNATION. (A) (1) Each Participant may designate,
upon forms furnished by the Administrator, one or more persons to be
primary Beneficiaries or alternative Beneficiaries for all or a
specified fractional part of his or her aggregate Accounts and may
change or revoke any such designation from time to time. No such
designation, change or revocation will be effective unless executed by
the Participant and received by the Administrator during the
Participant's lifetime. Except as provided in Subsection (B), no such
change or revocation will require the consent of any person.
(2) If a Participant
(a) fails to designate a Beneficiary, or
(b) revokes a Beneficiary designation without naming
another Beneficiary, or
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(c) designates as Beneficiaries one or more persons none
of whom survives the Participant,
for all or any portion of the Participant's Accounts, such Accounts or
portion will be distributed to the first class of the following classes
of automatic Beneficiaries that includes a member surviving the
Participant:
Participant's spouse;
Participant's issue, per stirpes and not per capita;
Participant's parents;
Participant's brothers and sisters;
Representative of Participant's estate.
(3) When used in this section and, unless the designation
otherwise specifies, when used in a Beneficiary designation: the term
"per stirpes" means in equal shares among living children and the issue
(taken collectively) of each deceased child, with such issue taking by
right of representation; "children" means issue of the first generation;
and "issue" means all persons who are descended from the person referred
to, either by legitimate birth or legal adoption. The automatic
Beneficiaries specified above and, unless the designation otherwise
specifies, the Beneficiaries designated by the Participant, will become
fixed as of the Participant's death so that, if a Beneficiary survives
the Participant but dies before the receipt of all payments due such
Beneficiary, any remaining payments will be made to the representative
of such Beneficiary's estate. Any designation of a Beneficiary by name
that is accompanied by a description of relationship or only by
statement of relationship to the Participant will be effective only to
designate the person or persons standing in such relationship to the
Participant at the Participant's death.
(B) Notwithstanding Subsection (A), no designation of a Beneficiary
other than the Participant's spouse will be effective unless such spouse
consents to the designation. Any such consent will be effective only with
respect to the Beneficiary or class of Beneficiaries so designated and only
with respect to the spouse who so consented.
8.3 ASSIGNMENT, ALIENATION OF BENEFITS. (A) Except as required under a
qualified domestic relations order, no benefit under the Plan may in any
manner be anticipated, alienated, sold, transferred, assigned, pledged,
encumbered or charged, and any attempt to do so will be void; and no such
benefit will in any manner be liable for, or subject to, the debts, contracts,
liabilities, engagements or torts of the person entitled to such benefit.
(B) To the extent provided in a qualified domestic relations order,
distribution of benefits assigned to an alternate payee by such order may be
distributed to the alternate payee prior to the Participant's earliest
retirement age. The terms "qualified domestic relations order," "alternate
payee" and "earliest retirement age" have the meanings given in Code section
414(p).
8.4 PAYMENT IN EVENT OF INCAPACITY. If any person entitled to receive
any payment under the Plan is physically, mentally, or legally incapable of
receiving or acknowledging receipt of the payment, and no legal representative
has been appointed for such person, the Administrator in his or her discretion
may (but will not be required to) cause any sum otherwise payable to such
person to be paid to any one or more as may be chosen by the Administrator
from the following: the Beneficiaries, if any, designated by such person, the
institution maintaining such person, a custodian
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for such person under the Uniform Transfers to Minors Act of any state or such
person's spouse, children, parents or other relatives by blood or marriage.
Any payment so made will be a complete discharge of all liability under the
Plan with respect to any such payment.
8.5 PAYMENT SATISFIES CLAIMS. Any payment to or for the benefit of any
Participant, legal representative or Beneficiary in accordance with the
provisions of the Plan will, to the extent of such payment, be in full
satisfaction of all claims against the Trustee, the Administrator and the
Participating Employer, any of whom may require the payee to execute a
receipted release as a condition precedent to such payment.
8.6 DISPOSITION IF DISTRIBUTEE CANNOT BE LOCATED. If the Administrator
is unable to locate a Participant or Beneficiary to whom a distribution is
due, the Participant's Accounts will continue to be held in the Fund until
such time as the Administrator has located the Participant or Beneficiary or
the Participant or Beneficiary makes a proper claim for the benefit, as the
case may be; provided, that, any Accounts not claimed within the period
prescribed by applicable escheat laws will be paid to such governmental
authorities, in such manner, as is specified in such laws.
8.7 DIRECT ROLLOVERS AND TRANSFERS. (A) To the extent a distribution
on or after December 31, 1992, is an "eligible rollover distribution," within
the meaning of Code section 402(c)(4), the Administrator will, if so
instructed by the distributee in accordance with Plan Rules, direct the
Trustee to make the distribution to an "eligible retirement plan," within the
meaning of Code section 402(c)(8). The foregoing provision will not apply if
the aggregate taxable distributions to be made to the distributee during the
calendar year are less than $200 or, if less than the entire taxable amount of
the distribution is to be distributed to the eligible retirement plan, such
amount is less than $500.
(B) The Administrator may, in conjunction with the sale by an
Affiliated Organization of all or a portion of a business operation of the
Affiliated Organization, direct the Trustee to make a trust-to-trust transfer
of the balance of any or all of the Accounts of a Participant who is employed
with the purchaser of such business operation or an affiliate thereof, to the
trustee of a plan sponsored by such purchaser or affiliate, provided
(1) such other plan is qualified under Code section 401(a),
(2) such other plan satisfies the withdrawal requirements set
forth in Code section 401(k) with respect to such transferred Accounts
to which such requirements are applicable under the Plan, and
(3) such trustee is willing to accept such transfer.
8.8 SUSPENSION OF DISTRIBUTIONS FOLLOWING REEMPLOYMENT. If a Participant
who is receiving a distribution of his or her Accounts in connection with his
or her termination of employment is reemployed by a Participating Employer as
a Qualified Employee, the distribution of the pre-termination Account balances
will continue during each month of such reemployment unless he or she has
elected, in form prescribed by Plan Rules, to have the distribution cease, in
which case the undistributed remainder of his or her Accounts will continue as
a part of the Trust for his or her benefit until he or she again becomes
entitled to receive a distribution.
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ARTICLE IX
CONTRIBUTION LIMITATIONS
9.1 PRE-TAX CONTRIBUTION DOLLAR LIMITATION. The aggregate amount of
Pre-Tax Contributions and other "elective deferrals" (within the meaning of
the Code section 402(g)(3)) under any other qualified plan maintained by any
Affiliated Organization with respect to a Participant for any taxable year of
the Participant may not exceed $7000 (automatically adjusted for increases in
the cost of living in accordance with Treasury Regulations). The limitation
for any Participant who received a hardship distribution under Section 6.1
will, for the year following the year in which such distribution was made, be
reduced as provided in Section 6.1(C)(4). If the foregoing limitation is
exceeded for any taxable year of the Participant, the amount of Pre-Tax
Contributions in excess of such limitation, increased by Fund earnings or
decreased by Fund losses attributable to the excess, will be returned to the
Participant. Such distribution may be made at any time after the excess
contributions are received, but not later than April 15 of the taxable year
following the taxable year to which such limitation relates. The amount
returned to a Participant who has made elective deferrals for the taxable year
other than pursuant to Section 3.1 will, to the extent of such other elective
deferrals, be determined in accordance with written allocation instructions
received by the Administrator from the Participant not later than March 1 of
the taxable year following the taxable year with respect to which the Pre-Tax
Contributions were made. The amount of Fund earnings or losses attributable
to Pre-Tax Contributions returned to a Participant pursuant to this Section
will be determined in the manner specified in Section 9.3.
9.2 ACTUAL DEFERRAL PERCENTAGE LIMITATIONS. (A) Notwithstanding Section
3.1, for any Plan Year, Pre-Tax Contributions may be made on behalf of
Participants who are Highly Compensated Employees only if the requirements of
Code section 401(k)(3), as set forth in Subsection (B), are satisfied. To the
extent deemed necessary by the Administrator in order to comply with such
requirements, the Administrator may, in accordance with Plan Rules,
prospectively decrease the rate at which a Participant's Eligible Earnings
will be reduced.
(B) (1) The requirements of Code section 401(k)(3) will be satisfied
for any Plan Year if, for that Plan Year, the Plan satisfies the
requirements of Code section 410(b)(1) with respect to "eligible
Employees" and either of the following tests.
(a) The "actual deferral percentage" for eligible
Employees who are Highly Compensated Employees is not more than
the product of the actual deferral percentage for all other
eligible Employees, multiplied by one and one-quarter.
(b) The excess of the actual deferral percentage for
eligible Employees who are Highly Compensated Employees over the
actual deferral percentage for all other eligible Employees is not
more than two percentage points and the actual deferral percentage
for such Highly Compensated Employees is not more than the product
of the actual deferral percentage of all other eligible Employees,
multiplied by two.
(2) For purposes of this subsection,
(a) "eligible Employee" means a Qualified Employee who is
eligible to have Pre-Tax Contributions made on his or her behalf
for the Plan Year in question or would be so eligible but for a
suspension imposed under Section 6.1(C)(3); and
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(b) "actual deferral percentage," with respect to either
of the two groups of eligible Employees referenced above, is the
average of the ratios, calculated separately for each eligible
Employee in the particular group of the amount of Pre-Tax
Contributions made on the eligible Employee's behalf for that Plan
Year, to the Employee's Testing Wages for either the Plan Year or
the portion of the Plan Year during which he or she was an
eligible Employee, as specified in Plan Rules. In computing the
actual deferral percentage, the following rules will apply.
(i) If aggregation of Testing Wages and Pre-Tax
Contributions is required under Section 12.16(C) and
12.31(C), the actual deferral percentage of the Highly
Compensated Employee to whom the aggregate amounts are
attributed is the actual deferral percentage determined for
the group of all eligible family members, treating such
group as a single eligible Employee.
(ii) If any eligible Employee is required to be
aggregated with more than one family group under Section
12.16(C), all the groups with which such Employee is
aggregated will be treated as a single family group.
(iii) Any Pre-Tax Contributions made on behalf of an
eligible Employee who is not a Highly Compensated Employee
that are in excess of the limitation of Section 9.1 will be
excluded.
(iv) Any Pre-Tax Contributions made on behalf of an
eligible Employee that are distributed to the eligible
Employee pursuant to Section 9.4(C) or 9.5(D) will be
excluded.
(v) To the extent determined by the Administrator,
all or any portion of the Profit Sharing Contribution for
the Plan Year on behalf of all, or any similarly situated
group of, eligible Employees will be included.
(vi) Elective contributions under any other plan that
is aggregated with this Plan to satisfy the requirements of
Code section 410(b) will be included.
(vii) To the extent provided in Treasury Regulations,
elective contributions made under any other cash or deferred
arrangement of any Affiliated Organization on behalf of any
eligible Employee who is a Highly Compensated Employee will
be included.
(C) If, for any Plan Year, the requirements of Subsection (B) are not
satisfied, the Administrator will determine the amount by which Pre-Tax
Contributions made on behalf of each Highly Compensated Employee for the Plan
Year exceeds the permissible amount as determined under Subsection (B). The
determination will be made by successively decreasing the rate of Eligible
Earnings reductions for Highly Compensated Employees who, during the Plan
Year, had the greatest percentage of Eligible Earnings reductions made on
their behalf, to the next lower percentage, then again decreasing the
percentage of such Highly Compensated Employees Eligible Earnings reductions,
together with the percentage of Eligible Earnings reductions of such Highly
Compensated Employees who were already at such lower percentage, to the next
lower percentage,
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and continuing such procedure for as many percentage decreases as the
Administrator deems necessary. The Administrator may, in his or her
discretion, make such reductions in any amount, in lieu of one percent
increments.
(D) At such time as the Administrator specifies on or following the
last day of the Plan Year for which such determination is made, but in no case
later than the last day of the following Plan Year, the excess will be
corrected by taking either or both of the following steps.
(1) The amount of excess Pre-Tax Contributions so determined,
increased by Fund earnings or decreased by Fund losses attributable to
such excess as determined under Section 9.3, will be returned to each
such Highly Compensated Employee. The amount to be returned pursuant to
the foregoing sentence with respect to any Plan Year will be reduced by
the portion of the amount, if any, distributed pursuant to Section 9.1
that is attributable to Pre-Tax Contributions that relate to such Plan
Year, determined by assuming that Pre-Tax Contributions in excess of the
limitation described in Section 9.1 for a given taxable year are the
first contributions made for a Plan Year falling within such taxable
year.
(2) The Participating Employer will make an additional
contribution for the Plan Year pursuant to Section 3.4.
(E) Any excess amount determined under Subsection (C) for a Highly
Compensated Employee whose actual deferral percentage is determined under item
(i) of Subsection (B)(2)(b) will be allocated among all persons whose
contributions are aggregated to determine such percentage in proportion to the
amount of Pre-Tax Contributions made on behalf of each with respect to the
Plan Year.
9.3 EARNINGS ON EXCESS CONTRIBUTIONS. The amount of Fund earnings or
losses with respect to the excess amount of contributions returned to a Highly
Compensated Employee pursuant to the foregoing provisions of this article is
an amount equal to the product of the total earnings or losses for the
Participant's Pre-Tax Contribution Account for the Plan Year, multiplied by a
fraction, the numerator of which is the excess amount of contributions made on
the Participant's behalf to such Account for the Plan Year, and the
denominator of which is the closing balance of such Account for the Plan Year,
decreased by the amount of earnings credited to that Account, or increased by
the amount of losses debited to that Account, for the Plan Year.
9.4 AGGREGATE DEFINED CONTRIBUTION LIMITATIONS. (A) Notwithstanding any
contrary provisions of this Plan, there will not be allocated to any
Participant's Accounts for a Plan Year any amount that would cause the
aggregate "annual additions," with respect to the Participant for the Plan
Year to exceed the lesser of:
(1) $30,000 (or, if greater, one-fourth of the dollar limitation
in effect under Code section 415(b)(1)(A) for the calendar year during
which the Plan Year in question begins); and
(2) 25 percent of the Participant's Section 415 Wages for the
Plan Year.
(B) For purposes of Subsection (A), the "annual additions" with
respect to a Participant for a Plan Year are the sum of -
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(1) the aggregate amount of Pre-Tax and Profit Sharing
Contributions allocated to the Participant's Accounts under the Plan for
the Plan Year (including any Pre-Tax Contributions that are distributed
pursuant to Section 9.2, but excluding any Pre-Tax Contributions in
excess of the limitation of Section 9.1 that are distributed to the
Participant by the April 15 following the Plan Year to which such
contributions relate) and employer contributions, employee contributions
and forfeitures allocated to the Participant's accounts under any other
qualified defined contribution plan maintained by any Affiliated
Organization for the Plan Year; plus
(2) the amount, if any, attributable to post-retirement medical
benefits that is allocated to a separate account for the Participant as
a "key employee" (as defined in Section 14.3(C)), to the extent required
under Code section 419A(d)(1).
(C) (1) If the Administrator, in his or her discretion, determines
that the limitation under Subsection (A) would otherwise be exceeded for
a Plan Year, to the extent necessary to prevent such excess from
occurring, the amount of a Participant's Eligible Earnings reductions
and Pre-Tax Contributions will be prospectively reduced.
(2) If a further reduction is required, the amount of the Profit
Sharing Contribution that would otherwise be allocated to the
Participants' Profit Sharing Contribution Account will be reduced to the
extent necessary to prevent the limitation under Subsection (A) from
being exceeded and such amount will be allocated among other
Participants who are Qualified Employees of the Participating Employer
of the Participant with respect to whom the reduction is made as an
additional Profit Sharing Contribution by the Participating Employer for
the Plan Year.
(3) If, in spite of such reductions and as a result of
reasonable error in estimating the amount of the Participant's Eligible
Earnings, Pre-Tax Contributions, other elective deferrals within the
meaning of Code section 402(g)(3) or Section 415 Wages for the Plan
Year, the limitation would otherwise be exceeded, then, to the extent
required to prevent such excess,
(a) the amount of Pre-Tax Contributions made for the
Participant will be distributed to the Participant, and
(b) if a further excess would otherwise exist, the amount of
such excess will be held unallocated in a suspense account and
will be allocated to all other eligible Participants for the Plan
Year and, to the extent necessary, subsequent Plan Years, before
Participating Employer contributions are made for such Plan Year
or Years, and will operate to reduce the amount of Participating
Employer contributions for such Plan Year or Years.
9.5 AGGREGATE DEFINED CONTRIBUTION/DEFINED BENEFIT LIMITATIONS. (A) In
no event will the amount of a Participant's annual additions under the Plan
exceed an amount that would cause the decimal equivalent of the sum of the
"defined benefit fraction" plus the "defined contribution fraction" to exceed
one.
(B) The "defined benefit fraction" is a fraction, the numerator of
which is the Participant's aggregate projected annual benefit under all
defined benefit pension plans maintained by any
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Affiliated Organization (determined as of the end of the Plan Year), and the
denominator of which is the lesser of:
(1) 125 percent of the maximum dollar benefit limitation in
effect under Code section 415(b)(1) for the calendar year during which
the Plan Year in question begins; and
(2) 140 percent of the average Section 415 Wages of the
Participant during the three consecutive Plan Years during which he or
she was a Participant in any such defined benefit pension plan that
produce the highest average.
(C) The "defined contribution fraction" is a fraction, the numerator of
which is the sum of the annual additions to the Participant's accounts for the
Plan Year under this Plan and any other defined contribution plans maintained
by any Affiliated Organization, determined in the manner described in Section
9.4, and the denominator of which is the aggregate of the lesser of:
(1) 125 percent of the maximum annual addition dollar limit in
effect for the Plan Year under such defined contributions plans; and
(2) 140 percent of 25 percent of the Participant's Section 415
Wages for the Plan Year,
applied for all years during which the Participant was employed with an
Affiliated Organization, without regard to whether there was a defined
contribution plan in effect during all such years.
(D) If the annual additions that would otherwise be made with respect
to a Participant for a Plan Year would cause the limitation of Subsection (A)
to be exceeded, the Participant's benefit under one or more defined benefit
pension plans maintained by an Affiliated Organization will, to the extent
provided in such plans, be reduced to the extent necessary to prevent such
excess from occurring, and, if a sufficient reduction cannot be made under
such plans, the provisions of Section 9.4(C) will be applied to reduce the
amount of the annual additions to the Participant's Accounts under this Plan
for such Plan Year to the extent necessary to prevent such excess.
9.6 ADMINISTRATOR'S DISCRETION. Notwithstanding the foregoing provisions
of this article, the Administrator may, in his or her discretion, apply the
provisions of Sections 9.1 through 9.5 in any manner permitted by Treasury
Regulations that will cause the Plan to satisfy the limitations of the Code
incorporated in such sections, and the Administrator's good faith application
of Treasury Regulations will be binding on all Participants and Beneficiaries.
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ARTICLE X
SERVICE RULES
10.1 COMPUTATION PERIOD. The "Computation Period" with respect to an
Employee is the 12-month period commencing with the date on which he or she
first completes an Hour of Service of the type specified at Section 10.3(A)(1)
and each subsequent 12-month period beginning on the anniversary of that date.
10.2 YEAR OF SERVICE. The term "Year of Service" with respect to an
Employee means a Computation Period during which he or she completes at least
1000 Hours of Service.
10.3 HOUR OF SERVICE. (A) Subject to the remaining subsections of this
section, the term "Hour of Service," with respect to an Employee, includes and
is limited to -
(1) each hour for which the Employee is paid, or entitled to
payment, for the performance of duties for an Affiliated Organization;
(2) each hour for which the Employee is paid, or entitled to
payment, by an Affiliated Organization on account of a period of time
during which no duties are performed (irrespective of whether the
employment relationship has terminated) due to vacation, holiday,
illness (including disability), layoff, jury duty, military duty or
leave of absence;
(3) Each hour for which the Employee is not paid or entitled to
payment but which is required by federal law to be credited to the
Employee on account of his or her military service or similar duties;
and
(4) each hour for which back pay, irrespective of mitigation of
damages, is either awarded or agreed to by an Affiliated Organization;
provided, first, that Hours of Service taken into account under clause
(1) or (2) will not also be taken into account under this clause (4);
and second, that Hours of Service taken into account under this clause
(4) that relate to periods specified in clause (2) will be subject to
the rules under Subsection (B).
(B) The following rules will apply for purposes of determining the
Hours of Service completed by an Employee under Subsection (A)(2):
(1) No more than 501 hours will be credited to the Employee on
account of any single continuous period during which the Employee
performs no duties (whether or not such period occurs in a single
Computation Period).
(2) No more than the number of hours regularly scheduled for the
performance of duties for the period during which no duties are
performed will be credited to the Employee for such period.
(3) The Employee will not be credited with hours for which
payments are made or due under a plan maintained solely for the purpose
of complying with workers' compensation, unemployment compensation or
disability insurance laws, or for which payments are made solely to
reimburse medical or medically related expenses.
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(4) A payment will be deemed to be made by or due from an
Affiliated Organization, regardless of whether such payment is made by
or due from the Affiliated Organization directly or indirectly through a
trust fund or insurer to which the Affiliated Organization contributes
or pays premiums.
(5) If the payment made or due is calculated on the basis of
units of time, the number of Hours of Service to be credited will be the
number of regularly scheduled working hours included in the units of
time on the basis of which the payment is calculated; provided, that, if
such a payment is made to an Employee described in Subsection (D)(1),
the number of Hours of Service to be credited will be the number of
equivalent hours determined under Subsection (D)(1) that are included in
the units of time on the basis of which the payment is calculated.
(6) If the payment made or due is not calculated on the basis of
units of time, the number of Hours of Service to be credited will be
equal to the amount of the payment, divided by the Employee's most
recent hourly rate of compensation before the period during which no
duties are performed.
(C) Hours of Service will be credited -
(1) in the case of Hours of Service described in Subsection
(A)(1), to the Computation Period in which the duties are performed;
(2) in the case of Hours of Service described in Subsection
(A)(2), to the Computation Period or Periods in which the period during
which no duties are performed occurs; provided, that, if the payment is
not calculated on the basis of units of time, the Hours of Service will
not be allocated between more than the first two Computation Periods of
such period;
(3) in the case of Hours of Service described in Subsection
(A)(4), to the Computation Period or Periods to which the award or
agreement for back pay pertains.
(D) For purposes of determining the number of Hours of Service
completed by an Employee during a particular period of time -
(1) an Employee who is not subject to the overtime provisions of
the Fair Labor Standards Act of 1938, as from time to time amended, will
be credited with 45 Hours of Service for each seven consecutive days, or
fraction thereof, during which he or she completes at least one Hour of
Service;
(2) each other Employee will be credited with the number of
Hours of Service that he or she completes during such period.
(E) Notwithstanding the foregoing provisions of this section, a person
will be credited with the number of Hours of Service he or she completes,
determined in the manner specified in Subsections (A) through (E),
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(1) while, although not employed with an Affiliated
Organization, he or she is considered to be a "leased employee" of an
Affiliated Organization or of a "related person" (within the meaning of
Code sections 414(n)(2) and 144(a)(3)), respectively, and
(2) with any other organization to the extent such Hours of
Service are required to be taken into account pursuant to Treasury
Regulations under Code section 414(o).
10.4 ONE-YEAR BREAK IN SERVICE. (A) An Employee will incur a "One-Year
Break in Service" if the Employee fails to complete more than 500 Hours of
Service during a Computation Period; provided, that, for purposes only of
determining whether an Employee has incurred such a One-Year Break in Service,
in addition to Hours of Service credited under Section 10.3, there will be
taken into account the number of Hours of Service that otherwise would have
been credited to the Employee, or, if the number of such Hours of Service
cannot be determined, eight Hours of Service for each day on which the
Employee would have otherwise performed services for an Affiliated
Organization, during an authorized leave of absence, while still employed with
the Affiliated Organization, due to -
(1) the Employee's pregnancy,
(2) the birth of the Employee's child,
(3) the placement of a child with the Employee in connection
with the adoption of such child by the Employee, or
(4) the Employee's caring for such child for a period beginning
immediately following such birth or placement;
provided, first, that the total number of such additional Hours of Service
taken into account by reason of any such absence will not exceed 501; second,
that, if the Employee would be prevented from incurring a One-Year Break in
Service for the Computation Period in which such absence commenced solely
because the additional Hours of Service are so credited, such Hours of Service
will be credited only to such Computation Period or, if a One-Year Break in
Service for such Computation Period would not be so prevented, such additional
Hours of Service will be credited to the Computation Period following the
Computation Period during which such absence commenced; and third, that,
notwithstanding the foregoing, no such additional Hours of Service will be
credited unless the Employee furnishes to the Administrator, on a timely
basis, such information as the Administrator reasonably requires in order to
establish the number of days during which the Employee was absent for one of
the reasons set forth at items (1) through (4).
(B) Notwithstanding Subsection (A), an Employee will not incur a
One-Year Break in Service during any period of "excused absence." An excused
absence means any of the following:
(1) absence on a leave authorized by an Affiliated Organization
for any cause for the authorized period or, in the absence of an
authorized period, for 90 days, plus any extensions granted by the
Affiliated Organization;
(2) absence in any circumstances so long as the Employee
continues to receive his or her regular compensation from an Affiliated
Organization;
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(3) absence for service in the armed forces of the United States
or other government service in time of war or national emergency; or
(4) absence by reason of illness or disability.
An excused absence ceases to be such and will be deemed a Break in Service
(unless the Employee has completed more than 500 Hours of Service in the
applicable Computation Period) as of the first day of such absence if the
Employee fails to return to the service of an Affiliated Organization (i) on
the first scheduled workday following expiration of any leave of absence
referred to in clause (1) hereof, (ii) at such time as the payment of regular
compensation is discontinued, as referred to in clause (2) hereof, (iii)
within 90 days following his or her discharge or release from active duty or,
if the Employee does not return to service with the Affiliated Organization
within the said 90-day period by reason of a disability incurred while in the
armed forces, if he or she returns to service with the Affiliated Organization
upon the termination of such disability, as evidenced by release from
confinement in a military or veterans hospital, or (iv) upon recovery from
illness or disability (as determined by the Affiliated Organization).
10.5 LOSS OF SERVICE.If an Employee experiences at least a One-Year Break
in Service before he or she completes two Years of Service, his or her Years
of Service completed before the Break in Service will not be taken into
account for purposes of determining the date on which he or she enters the
Plan for the purpose of being eligible to share in the allocation of Profit
Sharing Contributions.
10.6 PRE-ACQUISITION SERVICES.Hours of Service completed by an Employee
with an Affiliated Organization prior to the date on which it became an
Affiliated Organization (or, with another entity prior to the acquisition of
such entity's business or assets by an Affiliated Organization) will be taken
into account under this Plan only if, to the extent and for the purposes,
provided in any agreement pursuant to which it became an Affiliated
Organization (or such business or assets were acquired) or as provided by
resolution of the Company's Board. If such Hours of Service are to be taken
into account, unless otherwise specifically provided in such agreement or
resolution, such Hours of Service will be determined in accordance with the
provisions of this article. If less than the entire period of employment with
an Affiliated Organization prior to its becoming such (or with another entity
prior to the acquisition of its business or assets) is to be taken into
account, the extent to which such period of employment is to be taken into
account will be specified in an exhibit to the Plan.
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ARTICLE XI
ADOPTION, AMENDMENT AND TERMINATION
11.1 ADOPTION BY AFFILIATED ORGANIZATIONS. An Affiliated Organization may
adopt this Plan and become a Participating Employer with the prior approval of
the Committee by furnishing a certified copy of a resolution of its Board
adopting the Plan. Any adoption of the Plan by an Affiliated Organization,
however, must either be authorized by the Company's Board in advance or be
ratified by such Board prior to the end of the fiscal year of such Affiliated
Organization in which it adopts the Plan.
11.2 AUTHORITY TO AMEND AND PROCEDURE. (A) The Company reserves the
right to amend the Plan at any time, to any extent that it may deem advisable.
Each amendment will be stated in a written instrument, executed in the name of
the Company by two duly authorized officers. Upon the execution of such
instrument, the Plan will be deemed to have been amended as set forth in the
instrument, and all interested person will be bound by the amendment;
provided, first, that no amendment will increase the duties or liabilities of
the Trustee without its written consent; and, second, that no amendment will
have any retroactive effect so as to deprive any Participant, or any
Beneficiary of a deceased Participant, of any benefit already accrued or
vested or of any option with respect to the form of such benefit that is
protected by Code section 411(d)(6), except that any amendment that is
required to conform the Plan with government regulations so as to qualify the
Trust for income tax exemption may be made retroactively to the Effective Date
of the Plan or to any later date.
(B) If the schedule for determining the extent to which benefits under
the Plan are vested is changed, whether by amendment or on account of the
Plan's becoming or ceasing to be a top-heavy plan, each Participant with at
least three years of service may elect to have his or her vested benefits
determined without regard to such change by giving written notice of such
election to the Administrator within the period beginning on the date such
change was adopted (or the Plan's top heavy status changed) and ending 60 days
after the latest of (a) the date such change is adopted, (b) the date such
change becomes effective or (c) the date the Participant is issued notice of
such change by the Administrator or the Trustee. Except as otherwise provided
in an amendment permitted by Treasury Regulations, if an optional form of
benefit payment protected under Code section 411(d)(6) is eliminated, each
Participant may elect to have that portion of the value of his or her Accounts
that was accrued as of the date of such elimination, distributed in the
optional form of benefit payment that was eliminated.
(C) The provisions of the Plan in effect at the termination of a
Participant's employment will, except as specifically provided otherwise by a
subsequent amendment, continue to apply to such Participant.
11.3 AUTHORITY TO TERMINATE AND PROCEDURE. The Company expects to
continue the Plan indefinitely but reserves the right to terminate the Plan in
its entirety at any time. Each Participating Employer expects to continue its
participation in the Plan indefinitely but reserves the right to cease its
participation in the Plan at any time. The Plan will terminate in its
entirety or with respect to a particular Participating Employer as of the date
specified by the Company or such Participating Employer, as the case may be,
to the Trustee in a written notice executed in the manner of an amendment.
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11.4 VESTING UPON TERMINATION, PARTIAL TERMINATION OR DISCONTINUANCE OF
CONTRIBUTIONS. Upon termination of the Plan or upon the complete
discontinuance of contributions by all Participating Employers, the Accounts
of each Participant who is an Employee of a Participating Employer or another
affiliated organization will, to the extent funded, vest in full. Upon a
partial termination of the Plan, the Accounts of each Participant as to whom
the Plan has been partially terminated will, to the extent funded, vest in
full.
11.5 DISTRIBUTION FOLLOWING TERMINATION, PARTIAL TERMINATION OR
DISCONTINUANCE OF CONTRIBUTIONS. After termination or partial termination
of the Plan or the complete discontinuance of contributions under the Plan,
the Trustee will continue to hold and distribute the Fund at the times and in
the manner provided by Article VIII as if such event had not occurred or, if
the Committee so directs in accordance with Treasury Regulations, will
distribute to each Participant the entire balance of his or her Accounts.
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ARTICLE XII
DEFINITIONS, CONSTRUCTION AND INTERPRETATIONS
The definitions and the rules of construction and interpretations set forth in
this article will be applied in construing this instrument unless the context
otherwise indicates.
12.1 ACCOUNT. An "Account" with respect to a Participant is any or all
of the accounts maintained on his or her behalf pursuant to Section 5.1, as
the context requires.
12.2 ADMINISTRATOR. The "Administrator" of the Plan is the Committee or
the person to whom administrative duties are delegated pursuant to Section
13.1(E), as the context requires.
12.3 AFFILIATED ORGANIZATION. An "Affiliated Organization" is the
Company and any corporation that is a member of a controlled group of
corporations (within the meaning of section 1563(a) of the Code without regard
to Code sections 1563(a)(4) and 1563(e)(3)(C)) that includes the Company; any
trade or business (whether or not incorporated) that is controlled (within the
meaning of Code section 414(c)) by the Company; any member of an "affiliated
service group" (within the meaning of Code section 414(m)) of which the
Company is a member; or any other organization that, together with the
Company, is treated as a single employer pursuant to Code section 414(o) and
Treasury Regulations; provided, that, for purposes of applying the limitations
set forth at Sections 9.4 and 9.5 of the Plan, Code section 1563(a) will be
applied by substituting the phrase "more than 50 percent" for the phrase "at
least 80 percent" wherever it appears in such Code section.
12.4 BENEFICIARY. A "Beneficiary" is a person designated under the
provisions of Section 8.2 as the distributee of benefits payable after the
death of a Participant; provided that such a person will not become a
Beneficiary, and will have no interest in or rights under the Plan, until the
Participant has died.
12.5 BOARD. The "Board" is the board of directors of the Affiliated
Organization in question. When the Plan provides for an action to be taken by
the Board, the action may be taken by any committee or individual authorized
to take such action pursuant to a proper delegation by the board of directors
in question.
12.6 CODE. The "Code" is the Internal Revenue Code of 1986, as amended.
Any reference to a specific provision of the Code will include a reference to
such provision as it may be amended from time to time and to any successor
provision.
12.7 COMMITTEE. The "Committee" is the administrative committee described
in Section 13.1.
12.8 COMPANY. The "Company" is Nash-Finch Company or any successor
thereto.
12.9 CONSENT OF SPOUSE. Whenever the consent of a Participant's spouse is
required with respect to any act of the Participant, such consent will be
deemed to have been obtained only if:
(a) the Participant's spouse executes a written consent to such
act, which consent acknowledges the effect of such act and is witnessed
by the Administrator or a notary public; or
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(b) the Administrator determines that no such consent can be
obtained because the Participant has no spouse, because the
Participant's spouse cannot be located, or because of such other
circumstances as may, under Treasury Regulations, justify the lack of
such consent.
Any such consent by the Participant's spouse or such determination by the
Administrator that such spouse's consent is not required will be effective
only with respect to the particular spouse of the Participant who so consented
or with respect to whom such determination was made. Any such consent by the
Participant's spouse to an act of the Participant under the Plan will be
irrevocable with respect to that act.
12.10 EFFECTIVE DATE. The "Effective Date" of the Plan is January 2,
1966, the date as of which the Plan was first established.
12.11 ELIGIBLE EARNINGS. (A) The "Eligible Earnings" of a Participant
for any Plan Year are, except as provided in the succeeding subsections of
this section, the total remuneration paid by a Participating Employer to the
Participant during the portion of the Plan Year following his or her entry or
reentry into the Plan for the purpose in question and while he or she is a
Qualified Employee, increased by the amount of Eligible Earnings reductions
experienced by the Participant pursuant to the provisions of this Plan and of
any cafeteria plan maintained by the Participating Employer pursuant to Code
section 125 for that portion of the Plan Year, to the extent such reductions
are not otherwise included.
(B) Notwithstanding Subsection (A), in no event will a Participant's
Eligible Earnings for any Plan Year be taken into account to the extent they
exceed $150,000 (automatically adjusted for increases in the cost of living in
accordance with Treasury Regulations).
(C) In the case of a Participant who is a Highly Compensated Employee
described in clause (1) of Section 12.16(A), or of a Highly Compensated
Employee described in clause (2) or (3) of Section 12.16(A) whose Eligible
Earnings for the Plan Year is not less than the Eligible Earnings of at least
ten other Highly Compensated Employees (determined in each case without regard
to Section 12.16(C)), the limitation set forth in Subsection (B) will be
applied to the Participant, the Participant's spouse and the Participant's
lineal descendants who have not attained age nineteen prior to the end of the
Plan Year in question as if they were a single Participant.
(D) Notwithstanding the provisions of Subsection (A), a Participant's
Eligible Earnings will not include:
(1) any remuneration not paid in cash;
(2) the value of life insurance coverage included in the
Participant's wages under Code section 79;
(3) any long-term disability benefit paid by a third party;
(4) any car allowance or moving expense or mileage
reimbursement;
(5) any educational assistance payment;
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(6) severance pay;
(7) payments under any plan of deferred compensation; or
(8) any benefit under any qualified or nonqualified stock option
or stock purchase plan.
12.12 EMPLOYEE. An "Employee" is an individual who performs services as a
common-law employee for an Affiliated Organization.
12.13 FUND. The "Fund" is the total of all of the assets of every kind
and nature, both principal and income, held in the Trust at any particular
time or, if the context so requires, one or more of the investment funds
described in Section 5.1.
12.14 GOVERNING LAW. To the extent that state law is not preempted by
provisions of the Employee Retirement Income Security Act of 1974 or any other
laws of the United States, this Plan will be administered, construed and
enforced according to the internal, substantive laws of the State of
Minnesota, without regard to its conflict of laws rules.
12.15 HEADINGS. The headings of articles and sections are included solely
for convenience. If there exists any conflict between such headings and the
text of the Plan, the text will control.
12.16 HIGHLY COMPENSATED EMPLOYEE. (A) A "Highly Compensated Employee"
for any Plan Year is any employee who -
(1) at any time during such Plan Year or the preceding Plan
Year, owns or owned (or is considered as owning or having owned within
the meaning of Code section 318) more than five percent of the
outstanding stock of Affiliated Organization or stock possessing more
than five percent of the total combined voting power of all outstanding
stock of an Affiliated Organization, or
(2) during the Plan Year preceding such Plan Year -
(a) received compensation in excess of $75,000 (or such
dollar amount, adjusted to reflect increases in the cost of
living, as in effect under Code section 414(q)(1)(B) for the
calendar year during which the Plan Year in question begins), or
(b) received compensation in excess of $50,000 (or such
dollar amount, adjusted to reflect increases in the cost of
living, as in effect under Code section 414(q)(1)(C) for the
calendar year during which the Plan Year in question begins) and
whose compensation exceeded the compensation of at least 80
percent of all employees, excluding, for purposes of determining
the number of employees in such group but not for purposes of
determining the specific employees comprising the group, all
employees who
(i) have completed less than six months of service
with the Affiliated Organizations,
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(ii) normally work fewer than 17-1/2 hours per week
for the Affiliated Organizations,
(iii) normally work for the Affiliated Organizations
during not more than six months during any calendar year, or
(iv) have not attained age 21, or
(c) was at any time an officer (as defined in Code section
416(i) and Treasury Regulation sections 1.416-1 A-T 13 and A-T 15)
of an Affiliated Organization and received compensation in excess
of 50 percent of the amount in effect under Code section
415(b)(1)(A) for the calendar year during which the Plan Year in
question begins, but in no case will there be taken into account
more than the lesser of (i) 50 persons, or (ii) the greater of
three persons or ten percent of the aggregate number of all
employees excluding, for purposes of determining the number of
such officers, any employees that are excluded pursuant to clause
(b); or, if no officer of an Affiliated Organization received
compensation in excess of such amount, the officer of the
Affiliated Organization with the highest compensation for the Plan
Year, or
(3) during such Plan Year, is described in items (a), (b) or (c)
of clause (2) and received compensation in an amount that is not less
than the amount of compensation received by at least 100 other
employees.
(B) For purposes of this section,
(1) an "employee" is any individual who is not described in
clause (b) of Section 12.27 and who, during the Plan Year for which the
determination is being made, performs services for an Affiliated
Organization as -
(a) a common law employee,
(b) an employee pursuant to Code section 401(c)(1), or
(c) a leased employee who is treated as an employee of an
Affiliated Organization pursuant to Code section 414(n)(2) or
414(o)(2), and
(2) "compensation" for any period means an employee's Section
415 wages for the period increased by the amount of any reductions to
the employee's compensation for the period in connection with an
election by the employee made pursuant to a Plan maintained under Code
section 125 or 401(k).
(C) For purposes of applying Section 9.2, any employee who is the
spouse, a lineal ascendant or descendant or the spouse of a lineal ascendant
or descendant of a Highly Compensated Employee described in clause (1) of
Subsection (A), or of a Highly Compensated Employee described in clause (2) or
(3) of Subsection (A) whose compensation for the Plan Year is not less than
the compensation of at least ten other Highly Compensated Employees, will not
be considered a separate employee of the Affiliated Organization and any
Eligible Earnings with respect to such employee, and any contributions
allocated to the employee's Accounts under this
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Plan if the employee is a Participant, will be deemed to have been paid to, or
allocated to the Accounts of such Highly Compensated Employee.
12.17 NUMBER AND GENDER. Wherever appropriate, the singular number may be
read as the plural, the plural may be read as the singular, and the masculine
gender may be read as the feminine gender.
12.18 PARTICIPANT. A "Participant" is a current or former Qualified
Employee who has entered the Plan pursuant to Article II and has not ceased to
be a Participant pursuant to Section 2.7.
12.19 PARTICIPATING EMPLOYER. A "Participating Employer" is the Company
and any other Affiliated Organization that has adopted the Plan, or all of
them collectively, as the context requires, and their respective successors.
An Affiliated Organization will cease to be a Participating Employer upon a
termination of the Plan as to its Employees or upon its ceasing to be an
Affiliated Organization.
12.20 PLAN. The "Plan" is that set forth in this instrument as it may be
amended from time to time.
12.21 PLAN RULE. A "Plan Rule" is a rule, policy, practice or procedure
adopted by the Administrator. Each Plan Rule will be uniform and
nondiscriminatory with respect to similarly situated individuals.
12.22 PLAN YEAR. A "Plan Year" is the 12-month period beginning on
January 1 of each calendar year and ending on December 31 of such calendar
year.
12.23 PRE-TAX CONTRIBUTION ACCOUNT. The "Pre-Tax Contribution Account"
is the account established pursuant to clause (a) of Section 4.1 to evidence
Pre-Tax Contributions made on behalf of a Participant.
12.24 PRE-TAX CONTRIBUTIONS. "Pre-Tax Contributions" means contributions
made pursuant to Section 3.1.
12.25 PROFIT SHARING CONTRIBUTION ACCOUNT. The "Profit Sharing
Contribution Account" is the account established pursuant to clause (b) of
Section 4.1 to evidence Profit Sharing Contributions made on behalf of a
Participant.
12.26 PROFIT SHARING CONTRIBUTIONS. "Profit Sharing Contributions" means
contributions made pursuant to Section 3.2.
12.27 QUALIFIED EMPLOYEE. A "Qualified Employee" is any person who
performs services for a Participating Employer as a common-law employee,
excluding, however, any such person who is -
(a) covered by a collective bargaining agreement, for whom
retirement benefits were the subject of good faith bargaining between
such person's representative and the Participating Employer, and who is
not, as a result of such bargaining, specifically covered by this Plan;
or
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(b) a nonresident alien who receives no earned income (within
the meaning of Code section 911(d)(2)) from a Participating Employer
that constitutes income from sources within the United States (within
the meaning of Code section 861(a)(3)).
12.28 ROLLOVER ACCOUNT. The "Rollover Account" is the account
established pursuant to clause (c) of Section 4.1 to evidence the amounts, if
any, rolled over from an individual retirement arrangement or another
qualified plan, or transferred directly from another qualified plan with
respect to a Participant, pursuant to Section 3.3.
12.29 SECTION 415 WAGES. (A) An individual's "Section 415 Wages" for
any period is the sum of all remuneration received by such individual during
such period from all Affiliated Organizations that constitutes "compensation"
within the meaning of Code section 415(c)(3) and Treasury Regulations
thereunder.
(B) The Administrator may, in his or her discretion, for any Plan
Year, determine the items of remuneration that, in accordance with Treasury
Regulations, will be included in Section 415 Wages for such Plan Year;
provided that for each purpose under this Plan, the Administrator's
determination will be uniform throughout any Plan Year.
(C) Section 415 Wages will not include the amount by which an
individual's remuneration is reduced in connection with an election by the
individual made pursuant to a plan maintained under Code section 125 or
401(k).
12.30 TERMINATION OF EMPLOYMENT. For purposes of determining entitlement
to a distribution under this Plan, a Participant will be deemed to have
terminated employment only if he or she has completely severed his or her
employment relationship with all Participating Employers and other Affiliated
Organizations or if the Affiliated Organization with which he or she is
employed ceases to be an Affiliated Organization. Neither transfer of
employment among Participating Employers and other Affiliated Organizations
nor absence from active service by reason of disability leave, other than in
connection with a permanent total disability, or any other leave of absence
will constitute a termination of employment. Notwithstanding the preceding
sentence, a Participant who, in conjunction with the disposition of all or any
portion of a business operation of the Participating Employer or an Affiliated
Organization which is not a disposition of a subsidiary or substantially all
of the assets used in a trade or business of the Participating Employer or
Affiliated Organization within the meaning of Code section 401(k)(10)(A) with
respect to which the requirements of Code section 401(k)(10)(B) and (C) are
satisfied, transfers employment to the acquiror of such business operation or
to any affiliate of such acquiror will not be considered to have terminated
employment. If a Participant is deemed to have continued employment by reason
of the preceding sentence, such sentence will continue to apply to such
Participant in the event of any subsequent transfer of employment in
conjunction with the disposition of all or any portion of a business operation
of the initial acquiror or any subsequent acquirors that is not a disposition
of a subsidiary of such acquiror or of substantially all of the assets used in
a trade or business of such acquiror within the meaning of Code section
401(k)(10)(A) with respect to which the requirements of Code section
401(k)(10)(B) and (C) are satisfied. Except in conjunction with such a
disposition of a subsidiary or substantially all of the assets used in a trade
or business of the seller that satisfies the requirements of Code section
401(k)(10)(B) and (C), such a Participant will be considered to have
terminated employment only when he or she has severed the employment
relationship with all such acquirors and their affiliates.
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12.31 TESTING WAGES. (A) An individual's "Testing Wages" for any period
is the sum of all of his or her remuneration from all Affiliated Organizations
that is reportable in box 1 (wages, tips, other compensation) of Internal
Revenue Service Form W-2, increased by the amount by which the individual's
remuneration is reduced in connection with an election by the individual made
pursuant to a Plan maintained under Code section 125 or 401(k).
(B) In no event will an individual's Testing Wages for any Plan Year
be taken into account to the extent they exceed $150,000 (automatically
adjusted for increases in the cost of living in accordance with Treasury
Regulations).
(C) In the case of a Participant who is a Highly Compensated Employee
described in clause (1) of Section 12.16(A), or a Highly Compensated Employee
described in clause (2) or (3) of Section 12.16(A) whose Testing Wages for a
Plan Year are not less than the Testing Wages of at least ten other Highly
Compensated Employees (determined in each case without regard to Section
12.16(C) and this subsection), the limitation set forth in Subsection (B) will
be applied to the Participant, the Participant's spouse and the Participant's
lineal descendants who have not attained age 19 before the last day of the
Plan Year in question as if they were a single Participant.
(D) The Administrator may, in his or her discretion, for any Plan
Year, adopt any alternative definition of Testing Wages that complies with
Code section 414(s) and Treasury Regulations thereunder; provided, that for
each purpose under this Plan, the definition so adopted will be uniform
throughout any Plan Year.
12.32 TREASURY REGULATIONS. "Treasury Regulations" mean regulations,
rulings, notices and other promulgations issued under the authority of the
Secretary of the Treasury that apply to, or may be relied upon in the
administration of, this Plan.
12.33 TRUST. The "Trust" is that created by the Company, as grantor, for
purposes of implementing benefits under the Plan, and may, as from time to
time amended, be referred to as the "Nash-Finch Company Profit Sharing Trust."
12.34 TRUSTEE. The "Trustee" is the corporation and/or individual or
individuals who from time to time is or are the duly appointed and acting
trustee or trustees of the Trust.
12.35 VALUATION DATE. A "Valuation Date" is the last day of each
calendar quarter and such interim dates as the Administrator may from time to
time specify pursuant to Section 4.2(B).
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ARTICLE XIII
ADMINISTRATION OF PLAN
13.1 ADMINISTRATOR, NAMED FIDUCIARY. (A) The general administration of
the Plan and the duty to carry out its provisions is vested in the Company,
which is the "named fiduciary" of the Plan for purposes of the Employee
Retirement Income Security Act of 1974, as amended. To carry out such duties,
the Company's Board will appoint a Committee of three members who will serve
at the pleasure of the Board. Any Committee member may be dismissed at any
time, with or without cause, on ten days' notice from the Company's Board.
Any Committee member may resign by delivering his or her written resignation
to the Company's Board. Vacancies arising by the death, resignation or
removal of a Committee member will be filled by the Company's Board.
(B) The Committee will elect one of its number to serve as Chair. The
Chair will preside at all meetings of the Committee or will delegate such
responsibility to another Committee member. The Committee will elect one
person to serve as Secretary to the Committee. The Secretary may, but need
not, be a member of the Committee. All third parties may rely on any
communication signed by the Secretary, acting as such, as an official
communication from the Committee.
(C) Any and all acts of the Committee will be by majority rule;
provided, first, that if at any time, there are less than three members of the
Committee in office, pending the appointment of a successor to fill an
existing vacancy, the remaining members have the authority to act; and,
second, that if the Board fails to fill a vacancy, and in any event, until the
Board fills the vacancy, the remaining members of the Committee may appoint an
interim Committee member to fill any vacancy occurring on the Committee. The
Committee may act by vote taken in a meeting, or by action taken in writing
without the formality of convening a meeting. The Secretary will keep written
minutes of each meeting, and of all actions taken without a meeting, including
the vote of each Committee member as to all matters considered.
(D) The Committee may delegate to each or any one of its members or to
its Secretary authority to sign any documents on its behalf, or to perform
ministerial acts, but no member to whom such authority is delegated may
perform any act involving the exercise of any discretion other than pursuant
to a written delegation pursuant to Subsection (E).
(E) The Committee may delegate to any person, whether or not such
person is a Committee member, any fiduciary duty under the Plan. Each such
delegation must be in writing and must be furnished to the person to whom the
duty is delegated. Upon such person's filing an acknowledgement and
acceptance of such delegation, that person will become a fiduciary of the Plan
and Administrator with respect to that duty and, to the extent allowed under
applicable law, the Committee will be relieved of fiduciary responsibility
with respect to that duty. Such person's fiduciary responsibility with
respect to that duty will terminate upon revocation of such delegation by the
Committee or upon revocation of such acceptance by such person. Any such
revocation must be in writing, and will be effective upon delivery thereof to
the person to whom the duty was delegated or to a member of the Committee, as
the case may be.
(F) The Committee will render an annual report to the Company's Board.
All actions taken by the Committee will be deemed to be those of the Company
acting as Administrator.
13.2 COMPENSATION AND EXPENSES. An employee of an Affiliated
Organization performing administrative duties in connection with the Plan will
receive no compensation from the Fund for
37
<PAGE>
such services, but will be entitled to reimbursement from the Fund for all
sums reasonably and necessarily expended in the performance of such duties.
The Administrator may retain such independent accounting, legal, clerical and
other services as may reasonably be required in the administration of the Plan
and may pay reasonable compensation from the Fund for such services. Any such
reimbursement or compensation and all other costs of administering the Plan
will, to the extent not paid by the Participating Employers, be paid by the
Trustee from the Fund upon statements issued by the Administrator.
13.3 ADOPTION OF RULES. The Administrator has the discretionary power to
make and enforce such Plan Rules the Administrator deems to be required or
advisable for the effective administration of the Plan.
13.4 ADMINISTRATOR'S DISCRETION. The Administrator has the discretionary
power and authority to make all determinations necessary for administration of
the Plan, except those determinations that the Plan requires others to make,
and to construe, interpret, apply and enforce the provisions of the Plan and
Plan Rules, including the power to remedy ambiguities, inconsistencies,
omissions and erroneous account balances. In the exercise of discretionary
powers, the Administrator will treat all similarly situated Participants and
Beneficiaries uniformly.
13.5 INDEMNIFICATION. The Participating Employers jointly and severally
agree to indemnify and hold harmless, to the extent permitted by law, each
director, officer, and employee of any Affiliated Organization against any and
all liabilities, losses, costs and expenses (including legal fees) of every
kind and nature that may be imposed on, incurred by, or asserted against such
person at any time by reason of such person's services in connection with the
Plan, but only if such person did not act dishonestly or in bad faith or in
willful violation of the law or regulations under which such liability, loss,
cost or expense arises. The Participating Employers have the right, but not
the obligation, to select counsel and control the defense and settlement of
any action for which a person may be entitled to indemnification under this
provision.
13.6 BENEFIT CLAIM PROCEDURE. If a request for a benefit by a Participant
or Beneficiary of a deceased Participant is denied in whole or in part, he or
she may within 30 days after denial file with the Administrator a written
claim objecting to the denial. Not later than 90 days after receipt of such
claim, the Administrator will render a written decision on the claim to the
claimant. If the claim is denied in whole or in part, such decision will
include: the reasons for the denial; a reference to the Plan provision that
is the basis for the denial; a description of any additional material or
information necessary for the claimant to perfect the claim; an explanation as
to why such information or material is necessary; and an explanation of the
Plan's claim procedure. Not later than 60 days after receiving the
Administrator's written decision, the claimant may file with the Administrator
a written request for review of the Administrator's decision, and the claimant
or the representative may thereafter review Plan documents that relate to the
claim and submit written comments to the Administrator. Not later than 60
days after the Administrator's receipt of the request for review, the
Administrator will render a written decision on the claim, which decision will
include the specific reasons for the decision, including references to
specific Plan provisions where appropriate. The 90- and 60-day periods during
which the Administrator must respond to the claimant may be extended by up to
an additional 90 or 60 days, respectively, if circumstances beyond the
Administrator's control so require and if notice of such extension is given to
the claimant.
38
<PAGE>
13.7 CORRECTION OF ERRORS. If the Committee determines that, by reason of
administrative error or other cause attributable to a Participating Employer,
the Account of any Participant has incurred a loss, the Committee may enter
into an agreement with such Participating Employer under which the Account is
fully restored and may, upon such restoration, release the Participating
Employer from further responsibility.
39
<PAGE>
ARTICLE XIV
MISCELLANEOUS
14.1 MERGER, CONSOLIDATION, TRANSFER OF ASSETS. (A) If this Plan is
merged or consolidated with, or its assets or liabilities are transferred to,
any other plan, each Participant will be entitled to receive a benefit
immediately after such merger, consolidation or transfer (if such other plan
were then terminated) that is equal to or greater than the benefit he or she
would have been entitled to receive immediately before such merger,
consolidation or transfer (if this Plan had then terminated).
(B) If any other plan is merged into this Plan, any provisions unique
to the Accounts resulting from such merger will be set forth on an exhibit to
the Plan.
14.2 LIMITED REVERSION OF FUND. (A) Except as provided in Subsection
(B), no corpus or income of the Trust will at any time revert to Participating
Employer or be used other than for the exclusive benefit of Eligible
Employees, Participants and Beneficiaries by paying benefits and, if
applicable, administrative expenses of the Plan.
(B) Notwithstanding any contrary provision in the Plan,
(1) All contributions made by a Participating Employer to the
Trustee prior to the initial determination of the Internal Revenue
Service as to qualification of the Plan under section 401(a) of the Code
and the tax exempt status of the Trust under Code section 501(a) will be
repaid by the Trustee to such Participating Employer, upon the
Participating Employer's written request, if the Internal Revenue
Service rules that the Plan, as adopted by that Participating Employer,
is not qualified or the Trust is not tax exempt; provided, that the
Participating Employer requests such determination within a reasonable
time after adoption of the Plan, and the repayment by the Trustee to
such Participating Employer is made within one year after the date of
denial of qualification of the Plan; and
(2) To the extent a contribution is made by a Participating
Employer by a mistake of fact or a deduction is disallowed a
Participating Employer under Code section 404, the Trustee will repay
the contribution to such Participating Employer upon the Participating
Employer's written request; provided, that such repayment is made within
one year after the mistaken payment is made or the deduction is
disallowed, as the case may be. The amount returned to the
Participating Employer will not include any investment gains or earnings
but will be reduced by any investment losses. Each contribution to the
Plan by a Participating Employer is expressly conditioned on such
contribution's being fully deductible by the Participating Employer
under Code section 404.
14.3 TOP-HEAVY PROVISIONS. (A) The following provisions will apply to
and control the operation and administration of the Plan for those Plan Years
during which the Plan is a top-heavy plan.
(1) Notwithstanding the provisions of Sections 3.1 and 3.2, the
amount of contributions (excluding Pre-Tax Contributions) made and
allocated for such Plan Year on behalf of each Participant who is not a
key employee and who is employed with an Affiliated Organization on the
last day of the Plan Year (whether or not such Participant completed at
least 1000 Hours of Service during the Plan Year), expressed as a
percentage of the Participant's Testing Wages for the Plan Year, will be
at least equal to the lesser of
40
<PAGE>
(a) three percent, or
(b) the largest percentage of such Testing Wages at which
contributions (including Pre-Tax Contributions) are made and
allocated on behalf of any key employee for such Plan Year.
(2) If, in addition to this Plan, an Affiliated Organization
maintains another qualified defined contribution plan or qualified
defined benefit plan during a Plan Year, the provisions of clause (1)
will be applied for such Plan Year -
(a) by taking into account employer contributions (other
than elective contributions for a non-key employee) on behalf of
the Participant under all such defined contribution plans;
(b) without regard to any Participant who is not a key
employee and whose accrued benefit, expressed as a single life
annuity, under a defined benefit pension plan maintained by the
Affiliated Organization for such Plan Year is not less than the
product of -
(i) the Participant's average Testing Wages for the
period of consecutive years not exceeding the period of
consecutive years (not exceeding five) when the Participant
had the highest aggregate Testing Wages, disregarding years
in which the Participant completed less than 1000 Hours of
Service, multiplied by
(ii) the lesser of (A) two percent per year of
service, disregarding years of service beginning after the
close of the last Plan Year in which such defined benefit
plan was a top heavy plan, or (B) 20 percent.
(3) Each Participant's vested interest in his or her Profit
Sharing Contribution Account will be the vested interest otherwise
determined under the Plan or determined in accordance with the following
schedule, whichever provides the greater vested interest for the
Participant:
<TABLE>
<CAPTION>
YEARS OF VESTING SERVICE EXTENT OF VESTED INTEREST
------------------------ -------------------------
<S> <C>
Less than Two Years 0%
Two Years 20%
Three Years 40%
Four Years 60%
Five Years 80%
Six or more Years 100%
</TABLE>
If the Plan ceases to be a top-heavy plan, the portion of a
Participant's Profit Sharing Contribution Account that has vested
pursuant to the foregoing schedule will remain nonforfeitable,
notwithstanding the subsequent application of the otherwise applicable
vesting schedule to amounts subsequently allocated to the Profit Sharing
Contribution Account.
41
<PAGE>
(B) For purposes of Subsection (A),
(1) (a) The Plan will be a "top-heavy plan" for a particular
Plan Year if, as of the last day of the preceding Plan Year, the
aggregate of the Account balances of key employees is greater than
60 percent of the aggregate of the Account balances of all
Participants.
(b) For purposes of calculating the aggregate Account
balances for both key employees and employees who are not key
employees:
(i) Any distributions made within the five-year
period preceding the Plan Year for which the determination
is being made, other than a distribution transferred or
rolled over to a plan maintained by an Affiliated
Organization, will be included;
(ii) Amounts transferred or rolled over from a plan
not maintained by an Affiliated Organization at the
initiation of the Participant will be excluded;
(iii) The Account balances of any key employee and any
employee who is not a key employee who has not performed an
Hour of Service of the type specified at Section 10.3(A)(1)
at any time during the five-year period ending on the date
as of which the determination is being made will be
excluded; and
(iv) The terms "key employee" and "employee" include
the Beneficiaries of such persons who have died.
(2) (a) Notwithstanding the provisions of clause (1), this
Plan will not be a top-heavy plan if it is part of either a
"required aggregation group" or a "permissive aggregation group"
and such aggregation group is not top-heavy. An aggregation group
will be top-heavy if the sum of the present value of accrued
benefits and account balances of key employees is more than 60
percent of the sum of the present value of accrued benefits and
account balances for all Participants, such accrued benefits and
account balances being calculated in each case in the same manner
as set forth in clause (1).
(b) Each plan in a required aggregation group will be
top-heavy if the group is top-heavy. No plan in a required
aggregation group will be top-heavy if the group is not top-heavy.
(c) If a permissive aggregation group is top-heavy, only
those plans that are part of an underlying top-heavy, required
aggregation group will be top-heavy. No plan in a permissive
aggregation group will be top-heavy if the group is not top-heavy.
(3) The "required aggregation group" consists of (i) each plan
of an Affiliated Organization in which a key employee participates, and
(ii) each other plan of an Affiliated
42
<PAGE>
Organization that enables a plan in which a key employee participates to
meet the nondiscrimination requirements of Code sections 401(a)(4) and
410.
(4) A "permissive aggregation group" consists of those plans
that are required to be aggregated and one or more plans (providing
comparable benefits or contributions) that are not required to be
aggregated, which, when taken together, satisfy the requirements of Code
sections 401(a)(4) and 410.
(5) For purposes of applying clauses (2), (3) and (4) of this
Subsection (B), any qualified defined contribution plan maintained by a
Participating Employer or another Affiliated Organization at any time
within the five-year period preceding the Plan Year for which the
determination being made which, as of the date of such determination,
has been formally terminated, has ceased crediting service for benefit
accruals and vesting and has been or is distributing all plan assets to
participants or their beneficiaries, will be taken into account to the
extent required or permitted under such clauses and under Code section
416.
(C) A "key employee" is any person who is or was employed with an
Affiliated Organization and who, at any time during the Plan Year in question
or any of the preceding four Plan Years is or was:
(1) An officer of the Affiliated Organization (an administrative
executive in regular and continued service with the Affiliated
Organization) whose compensation for such Plan Year exceeds 50 percent
of the amount in effect under Code section 415(b)(1)(A) for such Plan
Year, but in no case will there be taken into account more than the
lesser of (a) 50 persons, or (b) the greater of (i) three persons or
(ii) ten percent of the number of the Affiliated Organization's
employees, excluding for purposes of determining the number of such
officers, any employees that are excluded pursuant to Section
12.16(A)(2)(b);
(2) The owner of an interest in the Affiliated Organization,
including business entities that are required to be aggregated under
Code section 414(b), (c) or (m), that is not less than the interest
owned by at least ten other persons employed with the Affiliated
Organization; provided, that, such owner will not be a key employee
solely by reason of such ownership for a Plan Year if he or she does not
own more than one-half of one percent of the value of the outstanding
interests of the Affiliated Organization or if the amount of his or her
compensation for such Plan Year is less than the amount in effect under
Code section 415(c)(1)(A) for such Plan Year;
(3) The owner of more than five percent of the Affiliated
Organization's outstanding stock or more than five percent of the total
combined voting power of the Affiliated Organization's stock; or
(4) The owner of more than one percent of the Affiliated
Organization's outstanding stock or more than one percent of the total
combined voting power of the Affiliated Organization's stock, whose
compensation for such Plan Year exceeds $150,000.
For purposes of this Subsection (C), the term "compensation" has the same
meaning as in Section 12.16(B)(2) and ownership of the Affiliated
Organization's stock will be determined in accordance with Code section 318;
provided, that subparagraph 318(a)(2)(C) will be applied by substituting the
phrase "5 percent" for the phrase "50 percent" wherever it appears in such
Code section.
43
<PAGE>
(D) If an Affiliated Organization maintains a qualified defined
contribution plan and a qualified defined benefit plan, the limitation on
combined contributions and accrued benefits will be adjusted by substituting
"100 percent" for "125 percent" in the definitions of the defined benefit
fraction and the defined contribution fraction in Section 9.5; provided,
first, that this Subsection (D) will be applied prospectively only to prohibit
additional contributions allocated, and forfeitures reallocated, to and
defined benefit accruals for, a Participant and will not reduce any
allocations or reallocations made to, or benefits accrued for, such
Participant prior to the Plan Year for which it first becomes effective; and,
second, that if the Plan would not be a top heavy plan if "90 percent" were
substituted for "60 percent" in clause (1)(a) of Subsection (B), this
Subsection (D) will not apply if -
(1) the aggregate employer contribution (other than elective
contributions) under all such qualified defined contribution plans on
behalf of each Participant who is not a key employee and who is employed
with an Affiliated Organization on the last day of the Plan Year is not
less than seven and one-half percent of his or her Testing Wages for the
Plan Year, or
(2) the accrued benefit for each Participant under the qualified
defined benefit pension plan is not less than the benefit described in
Subsection (A)(2)(b), applied by substituting "three percent" for "two
percent" in item (A) of clause (ii) and "30 percent" for "20 percent" in
item (B) of clause (ii).
14.4 NO EMPLOYMENT RIGHTS CREATED. The establishment and maintenance of
the Plan neither give any Employee a right to continuing employment nor limit
the right of an Affiliated Organization to discharge or otherwise deal with
the Employee without regard to the effect such action might have on his or her
initial or continued participation in the Plan.
44
<PAGE>
NASH-FINCH COMPANY
PROFIT SHARING PLAN
EXHIBIT A
SPECIAL PROVISIONS APPLICABLE TO FORMER
PARTICIPANTS IN THE THOMAS & HOWARD COMPANY, INCORPORATED
AND AFFILIATED EMPLOYERS PROFIT-SHARING PLAN AND TRUST
Effective as of January 1, 1987, the Thomas & Howard Company, Incorporated and
Affiliated Employers Profit-Sharing Plan and Trust, as separately adopted and
applied to Thomas & Howard Company of Hickory, Inc., T & H Service
Merchandisers, Inc., Thomas & Howard Company of Rocky Mount, Inc. and Virginia
Foods of Bluefield, Inc. ("Thomas & Howard Plan"), was amended by way of
adoption of the Plan. For purposes of applying the provisions of the Plan to
the participation of participants in the Thomas & Howard Plan prior to January
1987 ("Thomas & Howard Participants") from and after January 1987, and to the
assets and liabilities attributable to contributions made by and on behalf of
Thomas & Howard Participants, the terms of this Exhibit A control to the
extent such terms are inconsistent with the remaining provisions of the Plan.
(1) A separate account will be maintained for each Thomas & Howard
Participant with respect to assets and liabilities of the Trust Fund
attributable to contributions made on his or her behalf under the Thomas &
Howard Plan for Plan Years beginning prior to January 1, 1987.
(2) A Thomas & Howard Participant will acquire a vested, nonforfeitable
interest in his or her separate account established pursuant to paragraph (1)
above, in accordance with the following rules.
(a) Such a Participant will acquire a fully vested interest in such
separate account upon attaining age 65 or upon his or her death or
becoming totally and permanently disabled (unable to continue his or her
usual and customary employment with the Affiliated Organizations, as
determined by a physician selected by the Administrator) prior to his or
her termination of employment.
(b) (i) Upon such a Participant's termination of employment in
circumstances other than those described in clause (a) above, the
Participant will acquire a vested interest in such separate
account to the extent set forth in the following schedule:
<TABLE>
<CAPTION>
YEARS OF SERVICE EXTENT OF VESTED INTEREST
---------------- -------------------------
<S> <C>
Less than 3 0%
3 20%
4 40%
5 60%
6 80%
7 or more 100%
</TABLE>
(ii) For purpose of applying, the foregoing schedule, the number
of such Participant's Years of Service is the sum of:
45
<PAGE>
(A) The number of years of service that he or she had
completed under the Thomas & Howard Plan as of the
last day of the Plan Year ending prior to December 31,
1986; plus
(B) One year, if he or she completes at least 1000 Hours
of Service during the 12-month period that begins on
the first day of the most recent Plan Year that
commences prior to January 1987; plus
(C) The number of Plan Years, commencing with the Plan
Year that begins on January 1, 1987, during each of
which he or she completes at least 1000 Hours of
Service.
(iii) Following a Participant's termination of employment, prior
to its forfeiture and reallocation in accordance with the
next sentence, the nonvested portion of a Participant's
separate account will be invested in accordance with the
Plan Rules. The nonvested portion of such a Participant's
separate account will be forfeited upon his or her incurring
five consecutive One-Year Breaks in Service (determined on
the basis of Plan Year computation periods) following his or
her termination of employment. Such forfeited amount will
be reallocated, as of the last day of the Plan Year during
which such forfeiture occurred, among the separate accounts
of those Thomas & Howard Participants who, as of the last
day of such Plan Year, were employed as Qualified Employees
of the Participating Employer with whom the terminating
Participant was last employed. Each such Participant's
allocated share of such forfeiture will bear the same ratio
to the total amount of such forfeiture as such Participant's
Eligible Earnings for such Plan Year bears to the total
amount of Eligible Earnings of all such Participants who are
eligible to share in such forfeiture allocation.
(c) Such a Participant will, at all times, have a fully vested
interest in any Rollover Account established under the Thomas & Howard
Plan on his or her behalf.
(3) Appointments of beneficiaries to receive the undistributed portion of
such separate account following the death of a Thomas & Howard Participant
will be made in accordance with the provisions of Section 8.2.
(4) Distribution of such separate account following a Thomas & Howard
Participant's termination of employment or attainment of age 70-1/2 will be
made in accordance with the provisions of Article VIII.
46
<PAGE>
NASH FINCH COMPANY
PROFIT SHARING PLAN
EXHIBIT B
SPECIAL PROVISIONS APPLICABLE TO FORMER PARTICIPANTS IN
THE TIMBERLAKE GROCERY COMPANY OF MACON PROFIT SHARING
PLAN AND TRUST.
Effective as of January 1, 1991, the Timberlake Grocery Company of Macon
Profit Sharing Plan and Trust ("Timberlake Plan") maintained by the Timberlake
Grocery Company of Macon ("Timberlake") was merged into the Nash-Finch Company
Profit Sharing Plan. All benefits accrued and unpaid under the Timberlake
Plan as of the date of the merger were transferred to this Plan.
Notwithstanding anything in this Plan to the contrary, the following
provisions of this Exhibit B apply to former participants in the Timberlake
Plan and to the benefits transferred from the Timberlake Plan on behalf of
such former participants:
(1) Separate accounts will be maintained for Timberlake Plan participants
with respect to assets and liabilities of the Trust Fund attributable to
amounts transferred from the Timberlake Plan. More than one separate
account may be established if required by the Plan or if considered
advisable by the Plan Administrator.
(2) Former Timberlake Plan participants for whom a separate account is
established pursuant to paragraph (1) above will at all times be fully
vested in the amounts held in such accounts to the extent attributable
to the participant's Basic Contribution Account and Rollover Account
under the Timberlake Plan. Any other amounts held in such accounts on
behalf of a former Timberlake Plan participant will become vested in
accordance with the following rules:
(a) Full vesting will occur upon the participant's death, Disability
or Retirement. Whether Disability or Retirement has occurred will be
determined under the terms of the Timberlake Plan as in effect
immediately prior to the merger.
(b) In all other cases, vesting will be determined according to the
following schedule:
<TABLE>
<CAPTION>
VESTED
YEARS OF SERVICE PERCENTAGE
---------------- ----------
<S> <C>
Less than 3 years 0%
3 years but less than 4 20%
4 years but less than 5 40%
5 years but less than 6 60%
6 years but less than 7 80%
7 years or more 100%
</TABLE>
For purposes of applying this schedule, a participant's Years of
Service will be the sum of the following:
47
<PAGE>
(i) the participant's full years of service under the Timberlake
Plan as of December 31, 1990, plus
(ii) One Year of Service if the participant would have been
credited with a year of service under the Timberlake Plan
for a 12-month period beginning after January 1, 1991 and on
or before December 31, 1991 had the merger not occurred;
(iii) the number of the participant's Years of Service for service
on and after January 1, 1991 determined in accordance with
the terms of the Plan.
(c) In the case of a former Timberlake Plan participant whose unvested
benefits are transferred to the Plan and who thereafter receives, not
later than the last day of the second Plan Year following the Plan Year
during which he or she terminates employment, a distribution of his or
her entire vested account balance under the Plan, the unvested portion
of the participant's separate account will, as of the last day of the
Plan Year during which such distribution occurs, be forfeited and be
used to reduce the amount of the Profit Sharing Contributions for such
Plan Year of the Participating Employer with whom he or she was last
employed and, to the extent not so used, for subsequent Plan Years;
provided, that, if such participant (i) received a distribution of less
than the entire balance of his or her separate accounts, (ii) resumes
employment with a Participating Employer as a Qualified Employee, and
(iii) repays to the Trustee the full amount distributed from his or her
separate account before the earlier of five years following the date of
his or her reemployment with the Participating Employer as a Qualified
Employee, or the date on which he or she incurs five consecutive
One-Year Breaks in Service, then the amount of any forfeitures will be
restored by the Participating Employer to his or her separate account,
unadjusted for any change in value occurring after the Valuation Date on
which the distribution was based. Such restoration will be made from
forfeitures that arise for the Plan Year for which such restoration is
to be made. To the extent such forfeitures are insufficient for such
purpose, the Participating Employer will contribute an amount sufficient
to restore such separate accounts.
(d) Except as otherwise provided in subparagraph (c), the unvested
portion of a former Timberlake Plan participant's separate account will
be held in the account following the participant's termination of
employment until he or she incurs five consecutive One-Year Breaks in
Service, at which time such portion will be forfeited and used to reduce
the amount of the Profit Sharing Contribution of the Participating
Employer with whom the participant was last employed for the Plan Year
during which such forfeiture occurs and, to the extent not so used, for
succeeding Plan Years.
(e) Notwithstanding anything in this paragraph (2) to the contrary,
all amounts held on behalf of a former Timberlake Plan participant whose
unvested benefits were forfeited prior to the plan merger and whose
forfeited benefits have not been restored to his or her separate
account, will be fully vested. If such a participant is reemployed by
an Employer as an Employee prior to incurring five consecutive One-Year
Breaks in Service, the amount forfeited prior to the merger will be
restored as follows:
(i) If the former Timberlake Plan participant received a
distribution of his or her entire vested balance
attributable to the Timberlake Plan not later than
48
<PAGE>
the last day of the second Plan Year following the Plan Year
during which his or her employment terminated, the amount
forfeited will be restored only if such participant repays
to the Plan the full amount distributed before the earlier
of five years following the date of his or her reemployment
with a Participating Employer as a Qualified Employee, or
the date on which he or she incurs five consecutive One-Year
Breaks in Service.
(ii) If clause (i) does not apply, the amount forfeited will be
restored upon such participant's completion of a Year of
Service. No repayment to the Plan is required.
(iii) Restoration of accounts pursuant to (i) or (ii) above will
be done in a manner similar to the manner described in
subparagraph (c).
(f) If amounts forfeited by a former Timberlake Plan participant are
restored to such participant's separate account pursuant to subparagraph
(e)(ii), or the unvested portion of a participant's separate account is
being held pursuant to subparagraph (d), and such participant is not
fully vested at the time of his or her subsequent termination, his or
her vested interest in the portion of his separate account subject to
vesting will not be less than the amount "X" determined by the formula:
X = P (AB + (RxD)) - (RxD), where P is his or her vested percentage at
the time of determination; AB is the value of the relevant portion of
his or her separate account at the time of determination; D is the
amount previously distributed; and R is the ratio of the relevant
portion of the separate account at the time of determination, to such
portion of the account immediately following the distribution.
(3) Appointments of beneficiaries to receive the undistributed portion of
such separate accounts will be made in accordance with Section 8.2.
(4) Distribution of such separate account following a former Timberlake Plan
participant's termination of employment or attainment of age 70-1/2 will be
made in accordance with the provisions of Article VIII.
(5) Former Timberlake Plan participants may make withdrawals from the
portion of a separate account established pursuant to paragraph (1) above that
is attributable to basic contributions under the Timberlake Plan, subject to
the following:
(a) Such participants may withdraw all or any portion of the
withdrawable assets in their separate accounts at any time after
attaining age 59-1/2.
(b) Prior to age 59-1/2, withdrawals will be permitted only for an
immediate and heavy financial need of the participant for which funds
are not reasonably available from other resources of the participant.
If approved by the Administrator, such withdrawal will equal the lesser
of (i) the amount required to be distributed to meet the need created by
the hardship, (ii) the participant's basic contributions under the
Timberlake Plan (less any amounts previously withdrawn by the
participant, whether before or after the merger). The circumstances
which may warrant approval of a participant's application for a hardship
withdrawal are:
49
<PAGE>
(i) Educational expenses for undergraduate education for the
participant or his or her dependents;
(ii) Medical expenses (to the extent not otherwise reimbursed
under any other medical care programs) incurred by the
participant or his or her dependents;
(iii) Expenses for the purchase of a principal residence or major
alteration thereto; or
(iv) Such other circumstances as the Administrator may determine
to be within the intent of this section and permitted under
Code section 401(k).
The determination of the existence of financial hardship and the amount
required to be distributed to meet the need created by the hardship must
be made in a uniform and non-discriminatory manner.
(c) No more than one withdrawal under subparagraph (a) and one
hardship withdrawal under subparagraph (b) will be permitted during any
12-month period.
50
<PAGE>
NASH-FINCH COMPANY
PROFIT SHARING TRUST AGREEMENT
(AS RESTATED EFFECTIVE JANUARY 1, 1994)
<PAGE>
NASH-FINCH COMPANY
PROFIT SHARING TRUST AGREEMENT
TABLE OF CONTENTS
PAGE
PREAMBLE................................................................... 1
ARTICLE I GENERAL....................................................... 2
1.1 Name of Trust................................................ 2
1.2 Acceptance of Trust.......................................... 2
1.3 Part of Plan................................................. 2
1.4 Certification of Fiduciaries and Administrator............... 2
1.5 Construction and Applicable Law.............................. 2
1.6 Board........................................................ 2
1.7 Committee.................................................... 2
ARTICLE II TRUST FUND.................................................... 3
2.1 Composition.................................................. 3
2.2 Contributions................................................ 3
2.3 Exclusive Benefit of Participants and Beneficiaries.......... 3
ARTICLE III TRUSTEE....................................................... 4
3.1 General Responsibility....................................... 4
3.2 Powers of Trustee............................................ 5
3.3 Compensation and Expenses.................................... 7
3.4 Records and Accountings...................................... 8
3.5 Record Retention............................................. 8
ARTICLE IV INVESTMENTS................................................... 9
4.1 General...................................................... 9
4.2 Appointment of Insurance Company as Investment Manager....... 10
4.3 Appointment of Investment Adviser as Investment Manager...... 11
4.4 Appointment of Bank as Investment Manager.................... 13
4.5 Directions of Committee...................................... 15
ARTICLE V CHANGE IN TRUSTEE............................................. 18
5.1 Resignation.................................................. 18
5.2 Removal...................................................... 18
5.3 Successor.................................................... 18
5.4 Duties on Succession......................................... 18
5.5 Changes in Organization of Trustee........................... 18
<PAGE>
ARTICLE VI MISCELLANEOUS................................................. 19
6.1 Benefits May Not Be Assigned or Alienated.................... 19
6.2 Evidence..................................................... 19
6.3 Dealings of Others With Trustee.............................. 19
6.4 Insurance Company Not Party.................................. 19
6.5 Audits....................................................... 19
6.6 Successor Company............................................ 19
6.7 Waiver of Notice............................................. 19
6.8 Headings..................................................... 19
6.9 Use of Compounds of Word "Here".............................. 19
6.10 Construed as a Whole......................................... 19
6.11 Counterparts................................................. 20
ARTICLE VII AMENDMENT AND TERMINATION..................................... 21
7.1 No Diversion................................................. 21
7.2 Amendment.................................................... 21
7.3 Termination of Plan.......................................... 21
7.4 Transfer to Other Funding Agency............................. 22
<PAGE>
NASH-FINCH COMPANY
PROFIT SHARING TRUST AGREEMENT
This Trust Agreement is made and entered into as of January 1, 1994, by
and between NASH-FINCH COMPANY, a Delaware corporation (the "Company"), and
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION, a national banking association
with trust powers, as trustee (the "Trustee").
RECITALS:
1. The Company maintains the Nash-Finch Company Profit Sharing Plan
(the "Plan") and, in connection therewith, has previously created an
implementing trust. An organization that is affiliated with the Company in a
manner specified in the Plan may adopt the Plan for the benefit of its
eligible employees and the Company and each such organization that has adopted
the Plan is sometimes referred to in this Agreement as a "Participating
Employer."
2. The Trustee is the duly appointed and acting trustee of the trust.
3. In connection with the restatement of the Plan in the manner set
forth in the 1994 Revision thereof, the Company and the Trustee desire to
restate the terms of the agreement evidencing the trust.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements herein contained, the parties agree as follows:
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ARTICLE I
GENERAL
1.1 NAME OF TRUST. The name of the Trust evidenced by this Trust
Agreement is the "Nash-Finch Company Profit Sharing Trust" (the "Trust").
1.2 ACCEPTANCE OF TRUST. The Trustee confirms its prior acceptance of
its appointment as trustee of the Trust.
1.3 PART OF PLAN. This Trust forms a part of the Plan. The Company
warrants that promptly upon the adoption of any amendment to the Plan it will
furnish the Trustee with a copy of the amendment and with an appropriate
certificate evidencing its due adoption. The Company further agrees that no
amendment of the Plan will have the effect of changing the rights, duties or
obligations of the Trustee without its written consent. The Trustee may rely
on the latest Plan document furnished it as above provided without further
inquiry or verification.
1.4 CERTIFICATION OF FIDUCIARIES AND ADMINISTRATOR. The Secretary or an
Assistant Secretary of the Company will certify to the Trustee the names of
the Committee members and of each other person who has authority on behalf of
the Company to direct the Trustee as to disbursements from the Fund for
purposes of the Plan and to communicate with the Trustee with respect to any
other matter or matters relating to the Fund and will provide the Trustee with
a specimen signature of each such person. Action by the Board of a
Participating Employer will be certified by the Secretary or an Assistant
Secretary of the Participating Employer. The Trustee may rely on the latest
relevant certificate without further inquiry or verification.
1.5 CONSTRUCTION AND APPLICABLE LAW. This Trust is intended to
constitute a qualified trust under section 401(a) of the Internal Revenue Code
of 1986, as amended (the "Code") exempt from federal income tax under section
501(a) of the Code, and the Trustee may assume such, until advised to the
contrary. The Company and the Trustee also intend that the Trust be in full
compliance with applicable requirements of the Code and the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), and this
Agreement will be construed and administered consistent with such intent. To
the extent that state law is not preempted by ERISA or any other laws of the
United States, this Agreement will also be construed, administered and
enforced according to the internal laws of the State of Minnesota (without
regard to the conflict of law rules of the State of Minnesota or of any other
jurisdiction) and all controversies, disputes and claims arising under or in
connection with this Agreement will be submitted to the United States District
Court for the District of Minnesota.
1.6 BOARD. The "Board" is the board of directors of the Company or other
Participating Employer in question. When this Agreement provides for an
action to be taken by the Board, the action may be taken by any committee or
individual authorized to take such action pursuant to a proper delegation by
such board of directors.
1.7 COMMITTEE. The "Committee" is the committee established pursuant to
the provisions of the Plan to carry out certain duties and responsibilities
related to the Plan and this Trust. When this Agreement provides for an
action to be taken by the Committee, the action may be taken by any person who
is authorized to take such action pursuant to a proper delegation by the
Committee.
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ARTICLE II
TRUST FUND
2.1 COMPOSITION. All sums of money, securities and other property
acceptable to the Trustee and received by it to be held in trust under this
Agreement or under any prior version of this Agreement, as evidenced by its
receipts, from whatever source received, together with all investments made
therewith, the proceeds thereof, and all earnings and accumulations thereon,
and the part thereof from time to time remaining, will be held and
administered by the Trustee, in trust, in a fund referred to herein as the
"Fund," in accordance with the terms and provisions of this Agreement. The
Fund will be held, administered and disbursed by the Trustee without
distinction between principal and income.
2.2 CONTRIBUTIONS. The Trustee has no duty to require that any
contributions be made to it, to determine that the contributions received by
it comply with the provisions of the Plan or with any applicable resolution of
the Board of any Participating Employer providing therefor, or to collect any
transfers or contributions payable to it pursuant to the Plan. The
responsibility of the Trustee is limited to the sums of money, securities and
other property actually received by it.
2.3 EXCLUSIVE BENEFIT OF PARTICIPANTS AND BENEFICIARIES. The Fund will be
used for the exclusive benefit of the participants and their beneficiaries
covered by the Plan. Nothing contained in this Agreement, however, will be
construed to prevent any right of return or refund of assets of the Fund to a
Participating Employer as authorized under the Plan or to restrict the use of
such assets for the payment of taxes, expenses of administration or other
charges properly assessed against the Fund under the Plan or pursuant to this
Agreement.
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ARTICLE III
TRUSTEE
3.1 GENERAL RESPONSIBILITY. The general responsibilities of the Trustee
are as follows:
(a) Except as expressly otherwise provided in this Agreement, the
Trustee has exclusive authority and discretion to manage and
control the assets held in the Fund.
(b) The Trustee will hold, administer, invest and reinvest, and
disburse the Fund in accordance with the powers and subject to the
restrictions stated in this Agreement.
(c) The Trustee will disburse monies and other properties from the
Fund in accordance with the direction of the Committee in such
form as the Trustee may reasonably require. The Trustee is not
liable for any disbursement made by it pursuant to such directions
and has no duty to make inquiry as to whether any disbursement
made by it pursuant to any such direction is made pursuant to the
provisions of the Plan. The receipt of the payee will constitute
a full acquittance to the Trustee.
(d) The Trustee has the responsibilities, if any, expressly allocated
to it by the Plan. Except as responsibilities may be expressly so
allocated, the Trustee, in its capacity as such, has no
responsibility or authority with respect to the operation and
administration of the Plan, and the rights, powers and duties of
the Trustee are governed solely by the terms of this Agreement
without reference to the provisions of the Plan.
(e) The Trustee will reimburse the Company from the Fund for expenses
incurred by the Company or any employee or agent thereof in
connection with the administration of the Plan to the extent
permitted by ERISA and the Code upon its receipt of written
statements therefor in form acceptable to the Trustee.
(f) The Trustee will maintain separate investment funds and effect
investment directions of Plan participants, beneficiaries of
deceased participants and alternate payees under domestic
relations orders that the Administrator has determined to be
qualified under section 414(p) of the Code which directions are in
accordance with the provisions of the Plan and this Agreement and
such procedures as the Committee and the Trustee may from time to
time establish.
(g) The Trustee will establish and maintain a trust account with
respect to the Plan. The Trustee will also establish and maintain
such participant accounts and subaccounts as the Committee may
direct and such other subaccounts as may be appropriate or
desirable to aid in the administration of the Plan. The Committee
will give instructions to the Trustee specifying the participant
accounts and subaccounts to which transfers and contributions are
to be added and from which withdrawals, distributions or transfers
are to be subtracted and the amounts thereof.
(h) The Trustee will provide such additional administrative services
as may be agreed upon by the Company or the Committee and the
Trustee.
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3.2 POWERS OF TRUSTEE. The Trustee has the right, power and authority to
take any action and to enter into and carry out every agreement with respect
to the Fund that it deems necessary or advisable to discharge its
responsibilities under this Agreement, and without limiting the generality of
the foregoing and in addition to all other rights, powers and authorities
expressly granted to the Trustee elsewhere in this Agreement, the Trustee has
the following rights, powers and authorities to be exercised in its absolute
discretion, except as otherwise expressly provided in this Agreement -
(a) To hold securities and other properties in bearer form or in the
name of a nominee or nominees without disclosing any fiduciary
relationship; provided, however, that on the books and records of
the Trustee such securities and properties will at all times be
shown to be a part of the Fund, and no such registration or
holding by the Trustee relieves it from liability for the safe
custody and proper disposition of such securities and properties
in accordance with the terms and provisions of this Agreement and
the requirements of ERISA, the Code and other applicable law.
(b) To sell, grant options to buy, transfer, assign, convey, exchange,
mortgage, pledge, lease or otherwise dispose of any of the
properties comprising the Fund at such prices and on such terms
and in such manner as it may deem proper, and for terms within or
extending beyond the duration of the Trust.
(c) To manage, administer, operate, lease for any number of years,
regardless of any restrictions on leases made by fiduciaries,
develop, improve, repair, alter, demolish, mortgage, pledge, grant
options with respect to, or otherwise deal with any real property
or interest therein at any time held by it; and to cause to be
formed a corporation or trust to hold title to any such real
property with such powers, all upon such terms and conditions as
may be deemed advisable.
(d) To renew or extend or participate in the renewal or extension of
any note, bond or other evidence of indebtedness, or any other
contract or lease, or to exchange the same, or to agree to a
reduction in the rate of interest or rent thereon or to any other
modification or change in the terms thereof, or of the security
therefor, or any guaranty thereof, in any manner and to any extent
that it may deem advisable in its absolute discretion; to waive
any default, whether in the performance of any covenant or
condition of any such note, bond or other evidence of
indebtedness, or any other contract or lease, or of the security
therefor, and to carry the same past due or to enforce any such
default as it may in its absolute discretion deem advisable; to
exercise and enforce any and all rights to foreclose, to bid in
property on foreclosure; to exercise and enforce in any action,
suit, or proceeding at law or in equity any rights or remedies in
respect to any such note, bond or other evidence of indebtedness,
or any other contract or lease, or the security therefor; to pay,
compromise, and discharge with the funds of the Fund any and all
liens, charges, or encumbrances upon the same, in its absolute
discretion, and to make, execute, and deliver any and all
instruments, contracts, or agreements necessary or proper for the
accomplishment of any of the foregoing powers.
(e) To borrow such sums of money for the benefit of the Fund from any
lender upon such terms, for such period of time, at such rates of
interest, and upon giving such collateral as it may determine; to
secure any loan so made by pledge or mortgage of the trust
property; and to renew existing loans.
5
<PAGE>
(f) To use the assets of the Fund, whether principal or income, for
the purpose of improving, maintaining or protecting property
acquired by the Fund, and to pay, compromise and discharge with
the assets of the Fund any and all liens, charges or encumbrances
at any time upon the same.
(g) To hold uninvested reasonable amounts of cash whenever the Trustee
determines it is advisable to do so to facilitate disbursements or
for other operational reasons, and to deposit the same, with or
without interest, in the commercial or savings departments of the
Trustee or of any other bank, trust company or other financial
institution including those affiliated with the Trustee.
(h) To receive, collect and give receipts for every item of income or
principal of the Fund.
(i) To institute, prosecute, maintain or defend any proceeding at law
or in equity concerning the Fund or the assets thereof, at the
sole cost and expense of the Fund, and to compromise, settle and
adjust any claims and liabilities asserted against or in favor of
the Fund or of the Trustee; but the Trustee is under no duty or
obligation to institute, maintain or defend any action, suit or
other legal proceeding unless it has been indemnified to its
satisfaction against any and all loss, cost, expense and liability
it may sustain or anticipate by reason thereof.
(j) To vote all stocks and to exercise all rights incident to the
ownership of stocks, bonds or other securities or properties held
in the Fund and to issue proxies to vote such stocks; to enter
into voting trusts for such period and upon such terms as it may
determine; to give general or special proxies or powers of
attorney, with or without substitution; to sell or exercise any
and all subscription rights and conversion privileges; to sell or
retain any and all stock dividends; to oppose, consent to or join
in any plan of reorganization, readjustment, merger or
consolidation in respect to any corporation whose stocks, bonds or
other securities are a part of the Fund, including becoming a
member of any stockholders' or bondholders' committee; to accept
and hold any new securities issued pursuant to any plan of
reorganization, readjustment, merger, consolidation or
liquidation; to pay any assessments on stocks or securities or to
relinquish the same; and to otherwise exercise any and all rights
and powers to deal in and with the securities and properties held
in the Fund in the same manner and to the same extent as any
individual owner and holder thereof might do.
(k) To make application for any contract issued by an insurance
company to be purchased under a Plan, to accept and hold any such
contract, and to assign and deliver any such contract.
(l) To employ such agents, experts, counsel and other persons (any of
whom may also be employed by or represent a Participating
Employer) deemed by the Trustee to be necessary or proper for the
administration of the Trust; to rely and act on information and
advice furnished by such agents, experts, counsel and other
persons; and to pay their reasonable expenses and compensation for
services to the Trust from the Fund. Notwithstanding the
foregoing, no person so serving may receive compensation from the
Fund for fiduciary services if such person, natural or
6
<PAGE>
otherwise, is affiliated with the Company, and no person so
serving who already receives full-time pay from any Participating
Employer may receive compensation from the Fund for fiduciary
services, except for reimbursement of expenses properly and
actually incurred.
(m) To pay out of the Fund all real and personal property taxes,
income taxes, and other taxes of any and all kinds levied or,
assessed under existing or future laws against the Fund, without
any approval or direction of the Company.
(n) To pay any estate, inheritance, income or other tax, charge or
assessment attributable to any benefit which, in the Trustee's
opinion, it is or may be required to pay out of such benefit; and
to require, before making any payment, such release or other
document from any taxing authority and such indemnity from the
intended payee as the Trustee deems necessary for its protection.
(o) To retain any funds or property subject to any dispute without
liability for the payment of interest, and to decline to make
payment or delivery thereof until final adjudication is made by a
court of competent jurisdiction.
(p) To provide ancillary services to the Trust for not more than
reasonable compensation.
(q) To serve not only as Trustee but also in any other fiduciary
capacity with respect to the Plan pursuant to such agreements or
practices as the Trustee considers necessary or appropriate under
the circumstances.
(r) To participate in and use the Federal Book-entry Account System (a
service provided by the Federal Reserve Bank for its member banks
for deposit of Treasury securities), or to use the Depository
Trust Company, Midwest Trust Company or other generally accepted
central depositories.
(s) To make, execute, acknowledge and deliver any and all documents of
transfer and conveyance and any and all other instruments that may
be necessary or appropriate to carry out the powers granted to the
Trustee in this Agreement.
(t) To bring action before any court of competent jurisdiction for
instructions with respect to any matter pertaining to the
interpretation of this Agreement or the administration of the
Fund.
3.3 COMPENSATION AND EXPENSES. The Trustee is entitled to receive such
reasonable compensation for its services as Trustee or in any other capacity
in connection with the Plan as may be agreed upon with the Company. The
Trustee is entitled to reimbursement for all reasonable and necessary costs,
expenses and disbursements incurred by it in the performance of such services.
Such compensation and reimbursements will be charged to and paid out of the
Fund as an administrative expense, but if not so paid or if the Committee so
specifies, will be paid directly by the Participating Employers in such
proportions as the Committee determines.
7
<PAGE>
3.4 RECORDS AND ACCOUNTINGS. The Trustee will keep accurate and detailed
records and accounts of all investments, receipts, disbursements and other
transactions under this Agreement, and all records, books and accounts
relating thereto will be open to inspection by the Committee at all reasonable
times. As soon as reasonably practicable following the close of each annual
accounting period of the Trust, and as soon as reasonably practicable after
the resignation or removal of a Trustee has become effective, the Trustee will
file with the Committee a written account setting forth all investments,
receipts, disbursements and other transactions effected by it during such
year, or during the part of the year to the date the resignation or removal is
effective, as the case may be, and containing a description of all securities
purchased and sold, the cost or net proceeds of sale, the securities and
investments held at the end of such period and the cost of each item thereof
as carried on the books of the Trustee. The accounting will also furnish the
Committee such other information as the Trustee may possess and as may be
necessary to comply with the reporting requirements of ERISA. If the fair
market value of an asset in the Fund is not available, when necessary for
accounting or reporting purposes the fair value of the asset will be
determined in good faith by the Trustee, assuming an orderly liquidation at
the time of such determination. If there is a disagreement between the
Trustee and anyone as to any act or transaction reported in an accounting, the
Trustee has the right to have its account settled by a court of competent
jurisdiction. The Trustee will make such other reports as may be agreed upon
with the Company or the Committee.
3.5 RECORD RETENTION. The Trustee will retain its records relating to
the Trust as long as necessary for the proper administration thereof and at
least for any period required by ERISA or other applicable law.
8
<PAGE>
ARTICLE IV
INVESTMENTS
4.1 GENERAL. Except as otherwise expressly provided in this Agreement,
the Trustee has exclusive authority and discretion to invest and reinvest the
principal and income of the Fund in real or personal property of any kind and
will do so in accordance with ERISA and other applicable law. The Trustee is
not limited by the laws of any state proscribing or limiting the investment of
trust funds by corporate or individual trustees in or to certain kinds, types
or classes of investments or limiting the value or proportion of the trust
assets that may be invested in any one property or kind, type or class of
investment. Without limiting the generality of the foregoing investments and
reinvestments are also subject to the following -
(a) Investments will be consistent with any funding policy or
investment guidelines communicated to the Trustee in writing by
the Committee pursuant to the Plan. The Trustee may rely on the
latest such communication received by it without further inquiry
or verification.
(b) The Trustee may invest and reinvest principal and income of the
Fund in common, preferred and other stocks of any corporation;
voting trust certificates; interests in investment trusts,
including, without limiting the generality thereof, participations
issued by an investment company as defined in the Investment
Company Act of 1940, as from time to time amended; bonds, notes
and debentures, secured or unsecured; mortgages on real or
personal property; conditional sales contracts; real estate and
leases; and limited partnerships.
(c) The Trustee may invest and reinvest the principal and income of
the Fund through any common or collective trust fund or pooled
investment fund maintained by the Trustee for the collective
investment of funds held by it in a fiduciary capacity. The
provisions of the document governing any such common or collective
trust fund as it may be amended from time to time govern any
investment therein and are hereby made a part of this Agreement.
(d) The Trustee may commingle for investment all or any part of the
funds of the Fund with funds of other trusts entitled to tax
exemption under section 501(a) of the Code established by the
Company or any entity directly or indirectly controlling,
controlled by, or under common control with the Company; provided
that records are at all times maintained of the portion of the
commingled funds properly allocable to each trust.
(e) The Trustee may invest and reinvest the principal and income of
the Fund by investing in an annuity contract or contracts
(including any agreement or agreements supplemental thereto)
issued by an insurance company.
(f) The Trustee may engage in the writing, sale and buying in, of
covered call option contracts; and the Trustee may acquire and may
exercise options to purchase or sell securities or other assets.
(g) The Trustee may invest and reinvest principal and income of the
Fund in deposits (including savings accounts, savings certificates
and similar interest-bearing
9
<PAGE>
instruments or accounts) in itself or its affiliates, provided
such deposits bear a reasonable rate of interest and otherwise
comply with ERISA, the Code and other applicable law.
(h) The Declaration of Trust executed by Norwest Bank Minnesota,
National Association on April 3, 1989, establishing the Norwest
Bank Collective Funds for Employee Benefit Plans, is hereby made a
part of this Agreement. Notwithstanding any other provision of
this Agreement, the Trustee may cause any part or all of the money
of this Trust without limitation as to amount to be commingled
with the money of trusts created by others and invested and
reinvested as a part of any one or more of the funds heretofore or
hereafter created by said Declaration of Trust. Money of this
Trust so added to any of the funds heretofore or hereafter created
by said Declaration of Trust will be subject to all of the
provisions of said Declaration of Trust as it is amended from time
to time.
(i) The Trustee may purchase or sell financial futures contracts in
transactions executed through a generally recognized commodities
or securities exchange.
(j) The Trustee may transfer, at any time and from time to time, all
or any part of the funds of the Trust to any trust which is
qualified under section 401(a) and exempt under section 501(a) of
the Code and is maintained as a medium for the pooling of a
portion of the funds of pension and profit sharing trusts for
diversifying investments, and may execute such documents and other
instruments as may be necessary in connection therewith. The
terms and provisions of any such trust will, upon such transfer
and execution, be incorporated by reference into this Agreement to
the extent of the assets so transferred.
(k) The Trustee may participate in interest rate swaps.
4.2 APPOINTMENT OF INSURANCE COMPANY AS INVESTMENT MANAGER. The
Committee may appoint one or more insurance companies that meet the
requirements of section 3(38) of ERISA to serve as an investment manager as
defined in ERISA. The appointment of any such investment manager and
investment of the Fund pursuant to such appointment are subject to the
provisions of this Section 4.2, notwithstanding any other provisions of this
Agreement to the contrary.
(a) Written notice of each such appointment must be given to the
Trustee a reasonable time in advance of the effective date of the
appointment.
(b) The Committee will determine the terms of each contract to be
entered into between such insurance company and the Trustee
(including any agreement or agreements supplemental thereto)
pursuant to which investment management services are to be
performed by the insurance company. On written direction of the
Committee, the Trustee will make application for each such
contract and will hold the contract as an asset of the Fund.
(c) The Trustee will pay such premiums to the insurance company
pursuant to such contract as may be directed in writing by the
Committee; provided, however, that no such payment will be made
until the Trustee has been furnished with an
10
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acknowledgement in writing by the insurance company that it is a
fiduciary with respect to the Plan and this Trust.
(d) Except as otherwise agreed in writing by the Trustee and the
Committee, the Trustee will take only such actions as
contractholder of such contract as may be directed in writing by
the Committee.
(e) Any direction by the Committee with respect to such contract will
be complete as to the terms with respect thereto, it being
intended that the Trustee will have no discretion whatsoever with
respect to the provisions of such contract or actions taken
pursuant thereto.
(f) The Participating Employers jointly and severally agree to
indemnify the Trustee for and to hold it harmless against any and
all liabilities, losses, costs or reasonable expenses (including
legal fees and expenses) of whatsoever kind and nature which may
be imposed on, incurred by or asserted against the Trustee at any
time by reason of actions taken in connection with any such
contract in accordance with directions of an insurance company or
action omitted because no such directions are given. However, no
such indemnification will be required in any case in which such
liabilities, losses, costs or expenses are incurred by the Trustee
because it participated knowingly in, or knowingly undertook to
conceal, an act or omission of an insurance company acting as
investment manager, knowing that such act or omission was a breach
of fiduciary duty by said insurance company. The Participating
Employers have the right, but not the obligation, to select
counsel and control the defense and settlement of any action
against the Trustee for which the Trustee may be entitled to
indemnification under this provision.
4.3 APPOINTMENT OF INVESTMENT ADVISER AS INVESTMENT MANAGER. The
Committee may appoint one or more registered investment advisers under the
Investment Advisers Act of 1940 to serve as an investment manager as defined
in ERISA. The appointment of any such investment manager and investment of
the Fund pursuant to such appointment are subject to the provisions of this
Section 4.3, notwithstanding any other provisions of this Agreement to the
contrary.
(a) Written notice of each such appointment must be given to the
Trustee a reasonable time in advance of the effective date of the
appointment. The notice will state what portion of the Fund is to
be invested by the investment manager and will direct the Trustee
to segregate such portion of the Fund into a separate account for
the investment manager. Each such separate account is referred to
in this section as an "Investment Account."
(b) The Trustee will not act on any direction or instruction of the
investment manager until the Trustee has been furnished with an
acknowledgement in writing by the investment manager that it is a
fiduciary with respect to the Plan and this Trust.
(c) There will be a written agreement between the Company or Committee
and each investment manager. The Trustee will receive a copy of
each such agreement and all amendments thereto and will give
written acknowledgement of receipt of same. Alternatively, the
Committee may direct the Trustee to enter into such agreement
11
<PAGE>
and any ancillary agreements that the Committee determines to be
necessary or appropriate. Each agreement with an investment
manager will provide that:
(1) All directions given by an investment manager to the Trustee
will be in writing, signed by an officer or partner of the
investment manager or by such other person as may be
designated in writing by the investment manager; provided,
however, that the Trustee will accept oral directions for
the purchase or sale of securities, which will be confirmed
by such authorized personnel of the investment manager in
writing;
(2) All settlements of purchases and sales will be in the city
where the Trustee, or an agent thereof with custody of the
assets in question, is located, or such other place as the
Trustee may direct;
(3) In all events the Trustee, or an agent thereof, is to retain
physical custody of or title to all assets included in an
Investment Account; and
(4) The Committee, by written notice to the investment manager
and the Trustee, may modify or terminate the authority of
the investment manager.
(d) Payment of the cost of the acquisition, sale or exchange of any
security or other property for an Investment Account will be
charged to that Investment Account unless the agreement between
the Company, Committee or Trustee and the investment manager
provides otherwise.
(e) So long as the appointment of an investment manager is in effect,
the investment manager has full power and authority to direct the
Trustee as to, and full responsibility for, investment of its
Investment Account and for the retention and disposition of any
assets in its Investment Account. Subject to any limitations in
the agreement between the Company, Committee or Trustee and the
investment manager, the investment manager has the same investment
discretion as is accorded the Trustee under Section 4.1. The
Trustee may invest any portion of an Investment Account that would
otherwise be held in cash but has no obligation to do so.
(f) Unless the written agreement between the Company, Committee or
Trustee and the investment manager expressly provides to the
contrary, the Trustee has voting power with respect to all stocks
and other securities in the Investment Account.
(g) The Trustee will make available to an investment manager copies of
or extracts from such portions of its accounts, books or records
relating to the Investment Account of such investment manager as
the Trustee may deem necessary or appropriate in connection with
the exercise of the investment manager's function, or as the
Committee may direct.
(h) All charges (other than those covered in subsection (d) above)
against each Investment Account will be made in such proportions
as the Committee may direct from time to time.
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(i) If the authority of an investment manager is terminated and a
successor investment manager is not appointed, the assets held in
its Investment Account may or may not continue to be segregated as
the Trustee may determine. Until receipt of written notice of the
termination of the authority of an investment manager, the Trustee
will be fully protected in assuming the continuing authority of
such investment manager.
(j) Any direction by an investment manager must be complete as to the
terms with respect thereto, it being intended that the Trustee has
no obligation whatsoever to invest or otherwise manage any asset
of an Investment Account.
(k) An investment adviser acting as investment manager is entitled to
receive such reasonable compensation for services as may be agreed
upon with the Committee. Such compensation will be paid from the
Fund if not paid directly by the participating Employers in such
proportions as the Committee may determine. The Trustee is not
responsible for determining the reasonableness of any compensation
paid to an investment adviser.
(l) The Participating Employers jointly and severally agree to
indemnify the Trustee for and to hold it harmless against any and
all liabilities, losses, costs or reasonable expenses (including
legal fees and expenses) of whatsoever kind and nature which may
be imposed on, incurred by, or asserted against the Trustee at any
time by reason of action taken in accordance with directions of an
investment manager or action omitted because no such directions
are given. However, no such indemnification will be required in
any case in which such liabilities, losses, costs or expenses are
incurred by the Trustee because it participated knowingly in, or
knowingly undertook to conceal, an act or omission of an
investment manager, knowing that such act or omission was a breach
of fiduciary duty by said investment manager. The Participating
Employers have the right, but not the obligation, to select
counsel and control the defense and settlement of any action
against the Trustee for which the Trustee may be entitled to
indemnification under this provision.
4.4 APPOINTMENT OF BANK AS INVESTMENT MANAGER. The Committee may appoint
one or more banks that meet the requirements of Section 3(38) of ERISA to
serve as an investment manager as defined in said Act. The appointment of any
such investment manager and investment of the Fund pursuant to such
appointment shall be subject to the following, notwithstanding any provisions
of this Trust Agreement to the contrary.
(a) Written notice of each such appointment must be given to the
Trustee a reasonable time in advance of the effective date of the
appointment. The notice will state what portion of the Fund is to
be invested by the investment manager and will direct the Trustee
to segregate such portion of the Fund into a separate account for
such bank. Each such separate account is hereinafter in this
section referred to as a "Bank Managed Account."
(b) The Trustee will not act on any direction of the bank until the
Trustee has been furnished with an acknowledgment in writing by
the bank that it is a fiduciary with respect to the Plan and this
Trust.
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(c) There will be a written agreement between the Company or Committee
and each bank. The Trustee will receive a copy of each such
agreement and all amendments thereto and will give written
acknowledgement or receipt of same. Alternatively, the Committee
may direct the Trustee to enter into such agreement and any
ancillary agreements that the Committee determines to be necessary
or appropriate. Each agreement with a bank will provide that:
(1) All directions given by a bank to the Trustee will be in
writing, signed by an officer or partner of the bank or by
such other person as may be designated in writing by the
bank; provided, however, that the Trustee will accept oral
directions for the purchase or sale of securities, which
will be confirmed by such authorized personnel of the bank
in writing;
(2) All settlement of purchases and sales will be in the city
where the Trustee, or an agent thereof with custody of the
assets in question, is located, or such other place as the
Trustee may direct;
(3) In all events, the Trustee, or an agent thereof, is to
retain physical custody of or title to all of the assets
included in a Bank Managed Account; and
(4) The Committee, by written notice to the bank and the
Trustee, may modify or terminate the authority of the bank.
(d) Payment of the cost of the acquisition, sale or exchange of any
security or other property for a Bank Managed Account will be
charged to that Bank Managed Account unless the agreement between
the Company, Committee or Trustee and the bank provides otherwise.
(e) So long as the appointment of a bank as investment manager is in
effect, the bank has full power and authority to direct the
Trustee as to, and responsibility for, investment of its Bank
Managed Account and for the retention and disposition of any
assets in its Bank Managed Account. Subject to any limitations in
the agreement between the Company, Committee or Trustee and the
bank, the bank has the same investment discretion as is accorded
the Trustee under Section 4.1. The Trustee may invest any portion
of a Bank Managed Account that would otherwise be held by it in
cash but has no obligation to do so.
(f) Unless the written agreement between the Company, Committee or
Trustee and the bank expressly provides to the contrary, the
Trustee has voting power with respect to all stocks and other
securities in the Bank Managed Account.
(g) The Trustee will make available to the bank serving as investment
manager copies of or extracts from such portions of its accounts,
books or records relating to the Bank Managed Account of such bank
as the Trustee may deem necessary or appropriate in connection
with the exercise of the bank's function, or as the Committee may
direct.
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(h) All charges (other than those covered in subsection (d) above)
against each Bank Managed Account will be made in such proportions
as the Committee may direct from time to time.
(i) If the authority of a bank as investment manager is terminated and
a successor investment manager is not appointed, the assets held
in its Bank Managed Account may or may not continue to be
segregated, as the Trustee may determine. Until receipt of
written notice of the termination of the authority of a bank as
investment manager, the Trustee will be fully protected in
assuming the continuing authority of such bank.
(j) Any direction by a bank as investment manager will be complete as
to the terms with respect thereto, it being intended that the
Trustee has no obligation whatever to invest or otherwise manage
any asset of a Bank Managed Account.
(k) A bank acting as investment manager is entitled to receive such
reasonable compensation for its services as may be agreed upon
with the Committee. Such compensation will be paid from the Fund
if not paid directly by the Participating Employers in such
proportions as the Committee determines. The Trustee is not
responsible for determining the reasonableness of any compensation
to be paid to a bank.
(l) The Participating Employers jointly and severally agree to
indemnify the Trustee for, and to hold it harmless against, any
and all liabilities, losses, costs or expenses (including legal
fees and expenses) of whatsoever kind and nature which may be
imposed on, reasonably incurred by, or asserted against the
Trustee at any time by reason of actions of a bank as investment
manager, actions taken in accordance with directions of such bank,
or action omitted because no such directions are given. However,
no such indemnification will be required in any case in which such
liabilities, losses, costs or expenses are incurred by the Trustee
because it participated knowingly in, or knowingly undertook to
conceal, an act or omission of a bank acting as investment
manager, knowing such act or omission was a breach of fiduciary
duty by said bank. The Participating Employers have the right,
but not the obligation, to select counsel and control the defense
and settlement of any action against the Trustee for which the
Trustee may be entitled to indemnification under this provision.
4.5 DIRECTIONS OF COMMITTEE. The Committee, as a named fiduciary, will
direct the Trustee as to the establishment of three or more separate
investment funds in accordance with the terms of the Plan, and may otherwise
direct the Trustee as to the investment and reinvestment of all or a part of
the Fund, subject to the following provisions of this Section 4.5,
notwithstanding any other provisions of this Agreement to the contrary.
(a) Written notice of each such direction must be given to the Trustee
a reasonable time in advance of the effective date of the
direction. Such notice will state what portion of the Fund is to
be invested by the Committee and will direct the Trustee to
segregate such portion of the Fund into a separate account for the
Committee. Each such separate account is referred to in this
section as a "Committee Account."
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(b) All directions given by the Committee to the Trustee must be in
writing, signed by the duly authorized person or persons; provided
that the Trustee will accept oral directions for the purchase or
sale of securities which will be confirmed by such authorized
personnel in writing.
(c) All settlements of purchases and sales are to be in the city where
the Trustee, or an agent thereof with custody of the assets in
question, is located, or such other place as the Trustee may
direct.
(d) In all events the Trustee or an agent thereof is to retain
physical custody of or title to all assets comprising a Committee
Account.
(e) Payment of the cost of the acquisition, sale or exchange of any
security for a Committee Account will be charged to such Account.
(f) The Committee has full power and authority to direct the Trustee
as to, and full responsibility for, investment of each Committee
Account and for the retention and disposition of any assets at any
time included in each Committee Account. The Committee has the
same investment discretion as is accorded the Trustee under
Section 4.1 of this Agreement. The Trustee may invest any portion
of a Committee Account that would otherwise be held in cash but
has no obligation to do so.
(g) The Trustee has the voting power with respect to all stocks and
other securities in a Committee Account except to the extent
written directions by the Committee to the Trustee grant voting
power to the Committee.
(h) The Trustee will make available to the Committee copies of or
extracts from such portions of its accounts, books or records
relating to any Committee Account as the Committee may direct.
(i) All charges (other than those covered in subsection (e) above)
against each Committee Account will be made in such proportions as
the Committee may direct from time to time.
(j) Any direction by the Committee must be complete as to its terms,
it being intended that the Trustee will have no obligation
whatsoever to invest or otherwise manage any asset of a Committee
Account.
(k) The Trustee will follow all proper directions of the Committee
which are made in accordance with the terms of this Agreement and
which are not contrary to Title I of ERISA.
(l) The Participating Employers jointly and severally agree to
indemnify the Trustee for and to hold it harmless against any and
all liabilities, losses, costs or reasonable expenses (including
legal fees and expenses) of whatsoever kind and nature which may
be imposed on, incurred by, or asserted against the Trustee at any
time by reason of actions taken in accordance with directions of
the Committee in connection with a Committee Account or action
omitted because no such directions are given. However, no such
indemnification will be required in any case in which
16
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such liabilities, losses, costs or expenses are incurred by the
Trustee because it participated knowingly in, or knowingly
undertook to conceal, an act or omission by the Committee, knowing
that such act or omission was a breach of fiduciary duty of the
Committee. The Participating Employers have the right, but not
the obligation, to select counsel and control the defense and
settlement of any action against the Trustee for which the Trustee
may be entitled to indemnification under this provision.
17
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ARTICLE V
CHANGE IN TRUSTEE
5.1 RESIGNATION. The Trustee may resign at any time by giving 90 days'
advance written notice to the Company, to the attention of the General Counsel
with a copy to the Treasurer.
5.2 REMOVAL. The Company may remove the Trustee by giving 30 days'
advance written notice to the Trustee.
5.3 SUCCESSOR. In the event of the resignation or removal of the
Trustee, the Company will promptly appoint a successor. If no appointment of
a successor is made by the Company within a reasonable time after resignation
or removal of the Trustee, any court of competent jurisdiction may appoint a
successor, after such notice, if any, solely to the Company and the retiring
Trustee, as such court may deem proper and suitable. The retiring Trustee
will be furnished with written notice from the Company or the court, as the
case may be, of the appointment of the successor, and will also be furnished
with written evidence of the successor's acceptance of the trusteeship. Only
then will the retiring Trustee cease to be such.
5.4 DUTIES ON SUCCESSION. Every successor Trustee accepting a
trusteeship under this Agreement has all the right, title, powers, duties,
exemptions, and limitations of the predecessor Trustee under this Agreement.
No predecessor Trustee has any right, title, or interest in the Fund except as
provided in this Section 5.4. The Trustee will, upon the appointment and
acceptance of a successor Trustee, transfer and deliver the assets of the Fund
to the successor, after reserving such reasonable amount as it deems necessary
to provide for its fees and expenses and any sums chargeable against the Fund
for which it may be liable. Any predecessor Trustee will do all acts
necessary to vest title of record in the successor Trustee. If any assets in
the Fund have been invested in a common or collective trust fund, the
predecessor will cause such investment to be liquidated at the earliest
practical time after notice has been given or received by the predecessor of
the resignation or removal. No person becoming a Trustee under this Agreement
will be in any way liable or responsible for anything done or omitted to be
done by any Trustee prior to such person's acceptance of the trusteeship, nor
will such person have any duty to examine the administration of the Trust
prior to such acceptance.
5.5 CHANGES IN ORGANIZATION OF TRUSTEE. If any corporate trustee acting
under this Agreement is merged with another corporation or association, or is
succeeded by another corporation or association, through consolidation or
otherwise, the acquiring corporation or association will thereupon become
Trustee under this Agreement. If any corporate trustee acting under this
Agreement sells and transfers substantially all of its assets and business to
another corporation or association, the acquiring corporation or association
will thereupon become Trustee under this Agreement. When authorized by
statute or court order any corporate trustee acting hereunder may permit
itself to be succeeded as such corporate trustee by another corporation or
association in which case the acquiring corporation or association will
thereupon become Trustee under this Agreement. In each case the acquiring
corporation or association will be Trustee of the Trust as though specifically
so named in this Agreement. Notwithstanding the foregoing provisions of this
Section 5.5, an acquiring corporation or association will become Trustee
hereunder only if it has trust powers and is formed under the laws of the
United States of America or any subdivision thereof.
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ARTICLE VI
MISCELLANEOUS
6.1 BENEFITS MAY NOT BE ASSIGNED OR ALIENATED. Except as otherwise
expressly permitted by the Plan or required by law, the interests of
participants and their beneficiaries under the Plan or this Agreement may not
in any manner whatsoever be assigned or alienated, whether voluntarily or
involuntarily, or directly or indirectly.
6.2 EVIDENCE. Evidence required of anyone under this Agreement may be by
certificate, affidavit, document, or other instrument which the person acting
in reliance thereon considers to be pertinent and reliable, and to be signed,
made, or presented by the proper party.
6.3 DEALINGS OF OTHERS WITH TRUSTEE. No person (corporate or individual)
dealing with the Trustee is required to see to the application of any money
paid or property delivered to the Trustee or to determine whether the Trustee
is acting pursuant to any authority granted to it under this Agreement.
6.4 INSURANCE COMPANY NOT PARTY. No insurance company that issues a
contract held by the Trustee will be construed to be a party to this
Agreement, nor will such insurance company have any responsibility for the
validity of this Agreement. An insurance company to which an application may
be submitted by the Trustee may accept such application and has no duty to
make any investigation or inquiry regarding the authority of the Trustee to
make such application or any amendment thereto or to inquire as to whether a
person on whose life any contract is to be issued is entitled to such contract
under the Plan.
6.5 AUDITS. The Committee has the right to cause the books, records, and
accounts of the Trustee that relate to the Trust to be examined and audited by
independent auditors designated by the Committee at such times as the
Committee may determine, and the Trustee will make such books, records, and
accounts available for such purposes at all reasonable times.
6.6 SUCCESSOR COMPANY. If a successor to the Company or a purchaser of
all or substantially all of the Company's assets elects to continue the Trust,
such successor or purchaser will be substituted for the Company under this
Agreement.
6.7 WAIVER OF NOTICE. Any notice required under this Agreement may be
waived by the person entitled thereto.
6.8 HEADINGS. Headings at the beginning of articles and sections are for
convenience of reference, will not be considered a part of this Agreement and
will not influence its construction.
6.9 USE OF COMPOUNDS OF WORD "HERE". Use of the words "hereof",
"herein", "hereunder", or similar compounds of the word "here" mean and refer
to the entire Agreement unless the context clearly indicates otherwise.
6.10 CONSTRUED AS A WHOLE. The provisions of this Agreement will be
construed as a whole in such manner as to carry out the provisions thereof and
will not be construed separately without relation to the context.
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6.11 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which will be deemed an original. Such counterparts
will constitute but one and the same instrument, which may be sufficiently
evidenced by any one counterpart.
20
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ARTICLE VII
AMENDMENT AND TERMINATION
7.1 NO DIVERSION. The Fund will be for the exclusive purpose of
providing benefits to participants under the Plan and their beneficiaries and
defraying reasonable expenses of administering the Plan. No part of the
corpus or income of the Fund may be used for, or diverted to, purposes other
than for the exclusive benefit of participants under the Plan or their
beneficiaries. Notwithstanding the foregoing:
(a) If any contribution or portion thereof is made by a Participating
Employer by a mistake of fact, the Trustee will, upon written
request of the Committee, return such contribution or portion
thereof to the Participating Employer within one year after the
payment of the contribution to the Trustee. However, earnings
attributable to such contribution or portion thereof will not be
returned to the Participating Employer but will remain in the
Fund, and the amount returned to the Participating Employer will
be reduced by any losses attributable to such contribution or
portion thereof.
(b) Contributions by a Participating Employer are conditioned upon
initial qualification of the Plan as to such Participating
Employer under section 401(a) of the Code. If the Plan receives
an adverse determination letter with respect to such initial
qualification, the Trustee will, upon written request of the
Committee, return the amount of such contribution to the
Participating Employer within one year after the date of denial of
qualification of the Plan. For this purpose, the amount to be so
returned will be the contributions actually made, adjusted for the
investment experience of, and any expenses chargeable against, the
portion of the Fund attributable to the contributions actually
made.
(c) Contributions by the Participating Employers are conditioned upon
the deductibility of each contribution under section 404 of the
Code. To the extent the deduction is disallowed, the Trustee will
return such contribution (to the extent disallowed) to the
Participating Employer within one year after the disallowance of
the deduction. However, earnings attributable to such
contribution (or disallowed portion thereof) will not be returned
to the Participating Employer but will remain in the Trust Fund,
and the amount returned to the Participating Employer will be
reduced by any losses attributable to such contribution (or
disallowed portion thereof). Return of non-deductible
contributions will be made in accordance with the requirements of
Revenue Procedure 90-49 or any other applicable regulations or
procedures.
7.2 AMENDMENT. This Agreement may be amended at any time or from time to
time and in any manner by written agreement of the Trustee and the Company,
and the provisions of any such amendment may be made applicable to the Fund as
constituted at the time of the amendment as well as to the part of the Fund
subsequently acquired.
7.3 TERMINATION OF PLAN. If the Plan is terminated, this Trust will
nevertheless continue in effect until the Fund has been distributed in
accordance with the provisions of the Plan pursuant to directions under
Section 3.1(c).
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7.4 TRANSFER TO OTHER FUNDING AGENCY. If pursuant to directions under
Section 3.1(c), the entire Fund is transferred to a funding agency for the
Plan that is not a trustee, this Trust will thereupon terminate.
22
<PAGE>
IN WITNESS WHEREOF, the Company and Trustee have caused this Agreement
to be executed by their duly authorized officers and their respective
corporate seals to be hereunto affixed as of the day and year first above
written.
NASH-FINCH COMPANY
(Corporate Seal) By_______________________________________
Its____________________________________
And______________________________________
Its____________________________________
NORWEST BANK MINNESOTA, NATIONAL
ASSOCIATION
(Corporate Seal) By_______________________________________
Its____________________________________
And______________________________________
Its____________________________________
23
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STATE OF MINNESOTA )
) ss.
COUNTY OF HENNEPIN )
On this _____ day of December, 1993, before me personally appeared
___________________________ and ______________________, to me personally
known, who, being each by me duly sworn, did say that they are respectively
the ______________________________ and _______________________ of NASH-FINCH
COMPANY, the corporation named in the foregoing instrument, and that the seal
affixed to said instrument is the corporate seal of said corporation, and that
said instrument was signed and sealed in behalf of said corporation by
authority of its Board of Directors, and they acknowledged said instrument to
be the free act and deed of said corporation.
Notary Public,_____________________________
Hennepin County, Minnesota
My commission expires______________________
STATE OF MINNESOTA )
) ss.
COUNTY OF HENNEPIN )
On this _____ day of December, 1993, before me personally appeared
___________________________ and ______________________, to me personally
known, who, being each by me duly sworn, did say that they are respectively
the _________________________________ and _______________________ of NORWEST
BANK MINNESOTA, NATIONAL ASSOCIATION, the national banking association named
in the foregoing instrument, and that the seal affixed to said instrument is
the corporate seal of said association, and that said instrument was signed
and sealed in behalf of said association by authority of its Board of
Directors, and they acknowledged said instrument to be the free act and deed
of said association.
Notary Public,_____________________________
Hennepin County, Minnesota
My commission expires______________________
This document was drafted by
OPPENHEIMER WOLFF & DONNELLY
3400 Plaza VII Building
45 South Seventh Street
Minneapolis, Minnesota 55402
24
<PAGE>
25
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NASH FINCH COMPANY
EXECUTIVE INCENTIVE BONUS AND
DEFERRED COMPENSATION PLAN
(AS AMENDED AND RESTATED EFFECTIVE DECEMBER 31, 1993.)
1. PURPOSE OF THE PLAN. The purpose of this Executive Incentive Bonus and
Deferred Compensation Plan is to increase the interest of the Company's top
executives and key employees in continuing their employment and to increase
their incentive in the management, growth and success of the business by giving
such employees an opportunity to participate in the profits and growth of the
business in the same manner as if they were shareholders. The term "Company" as
used in this Plan includes Nash Finch Company and each of its present and future
subsidiaries.
2. ADMINISTRATION OF THE PLAN. This Plan will be administered by the
Compensation Committee (the "Committee") of the Board of Directors. Members of
the Committee shall not be eligible to vote on any resolution relating to their
individual eligibility to participate in the Plan or individual contract. The
Committee is empowered to make such rules and regulations and interpretations as
may be necessary to carry out the Plan, and its decisions by majority vote shall
be binding and conclusive upon all persons participating in this Plan or
claiming any rights thereunder. A majority of the members of the Committee shall
constitute a quorum for the transaction of business and all actions taken at a
meeting shall be by the vote of a majority of those present at such meeting. Any
action may be taken by the Committee without a meeting upon written consent
signed by all the members of the Committee. The Committee shall authorize
records required to be maintained under the Plan. The form of the agreement
under this Plan to be entered into with employees shall be approved by the
Committee.
3. PARTICIPANTS. The Committee shall determine from time to time which
executives or key employees of the Company or any subsidiary shall participate
in the Plan. Participants may include (a) directors who are fulltime officers or
employees of the Company, (b) fulltime officers and other executive employees of
the Company or any subsidiary, and (c) any other fulltime executives or key
employees of the Company or any subsidiary selected by the Committee for any
calendar year, established by the Committee pursuant to its rules and
regulations.
4. PROCEDURE FOR SELECTION OF PARTICIPANTS. At the end of each year or at
such time as the Committee shall establish under its rules and regulations, the
Committee shall, exclusive of any participants who may be members of the
Committee, select the participants to whom allotments are to be made for such
year. The selection of a participant for any year shall not entitle such
participant to an allotment for any subsequent year for which he is not selected
for an allotment.
<PAGE>
5. AMOUNT OF ALLOTMENTS. As of the end of each year, the Committee shall
allot to the participants selected for such year from the amount of the
Incentive Bonus Fund for that year as hereinafter determined, such amount as the
Committee in its sole discretion deems to be advisable and appropriate, but not
more than 33-1/3% of each participant's basic annual salary from the Company or
any subsidiary for such year shall be allotted to him. The Committee shall
notify each participant promptly in writing of any allotment made to him. Such
allotment shall be evidenced by a written agreement between the Company and the
participant if such allotment is the first for such participant, or such
allotment shall be included as part of the agreement for any prior year entered
into between the Company and the participant. Each allotment shall be
contingently credited and converted into share equivalents, as further provided
herein, and shall be distributable only in the manner and subject to the
conditions set forth herein. The entire amount of each allotment to each
participant shall be contingently credited to him at the end of each year. The
portion of the Incentive Bonus Fund for any year in excess of the maximum
limitation for all participants, as determined by the Committee, shall be
cancelled. In order to qualify for an allotment, a participant must be actively
employed by the Company, or be on an approved leave of absence, on the last day
of the year for which the allotment is made.
The allotments to participants for any year shall be made from an Incentive
Bonus Fund computed to be 5% of the excess, if any, of the consolidated net
income of the Company and its consolidated subsidiaries for the year over 6% of
the stockholders' equity as shown in the consolidated balance sheet of the
Company and its consolidated subsidiaries at the end of the preceding year as
certified by the Company's independent certified public accountants. No
Incentive Bonus Fund shall be computed if the consolidated net income of the
Company and its consolidated subsidiaries for a year does not exceed 6% of the
stockholders' equity at the end of the preceding year. However, the Committee
may, in its discretion and by appropriate action, authorize an Incentive Bonus
Fund of any amount for such year in the event that the amount of the Incentive
Bonus Fund computed under the formula for such year is zero or an insignificant
amount in the judgment of the Committee. "Consolidated net income" as used
herein, shall mean the amount of the net earnings as shown in the consolidated
statement of earnings of the Company and its consolidated subsidiaries for the
year as certified by the Company's independent certified public accountants
subject, however, to the discretion of the Committee to exclude all or any items
of material amount therein applicable to any prior year.
6. CONVERSION OF ALLOTMENTS INTO SHARE EQUIVALENTS AND CREDIT OF DIVIDEND
AND INTEREST EQUIVALENTS. Each allotment contingently credited to a participant
shall be converted into an equivalent number of shares of the common stock of
the Company (the "Common Stock"). Commencing with any such allotment for 1993,
and for subsequent years, the number of such share equivalents shall be
determined by dividing (a) the amount of the allotment by (b) the
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<PAGE>
average, rounded to the nearest one-tenth of a cent ($.001), of the closing
sales prices per share for the Common Stock reported by the NASDAQ National
Market System, or such other stock exchange or market on which the Common Stock
may be listed at any particular time (the "Average Price"), for the last
calendar quarter of the year for which the allotment is made. The number of
share equivalents so determined shall be computed to four decimal places. For
purposes of determining the Average Price, the closing sales price for any
trading day for which there are no reported sales of the Common Stock shall be
deemed to be the last previously reported closing sales price.
Each participant shall also be contingently credited as of the end of each year
with an amount equal to the product of (x) the total dividends per share on the
Common Stock declared in such year multiplied by (y) the aggregate number of
share equivalents contingently credited to the said participant as of the
beginning of such year. The amount so determined and credited shall be converted
to additional share equivalents in the manner stated in the preceding paragraph
using the Average Price for the last calendar quarter of such year. In the event
that the authorized shares of Common Stock are split or changed in any manner by
reason of any reorganization, merger, consolidation, stock split, stock
dividend, or recapitalization, then the number of share equivalents and the
market value equivalent thereof contingently credited to each participant shall
be appropriately adjusted.
The methods for determining share equivalents to be credited to participants, as
set forth in the preceding two paragraphs of this Section 6, shall be effective
for allotments and dividend equivalents contingently credited to participants
for 1993 and subsequent years. Further, the total "cash" balances contingently
credited to participants' accounts for 1992 and prior years for (i) dividends
declared and (ii) partial share equivalents, shall be converted as of December
31, 1993, into additional share equivalents in the manner stated in the first
paragraph of this Section 6, using the Average Price for the last calendar
quarter of 1993. The conversion of allotments for 1992 and prior years into
share equivalents shall remain as originally determined; that is, on the basis
of the last available closing market quotation price per share for the Common
Stock for the applicable year.
In the event that a participant's allotment and dividend equivalents are to be
distributed to the participant in more than one (1) installment, then the
participant shall be paid an amount, within fifteen (15) days of the end of each
quarter of the calendar year, equal to the interest which would have accrued
during the quarter on the unpaid balance due the participant at the end of such
calendar quarter. The interest rate shall equal the prime interest rate charged
by Norwest Bank Minnesota, N.A. on the last business day of each quarter. For
example, assume that the unpaid balance due a
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<PAGE>
participant on December 31, Year I is $240,000 and that the participant will
receive monthly payments of $2,000 for a ten (10) year period beginning in Year
II. Further assume that the prime interest rates in effect on the last business
day of March, June, September and December, Year II, are 6-1/4%, 6-3/4%, 7-1/4%
and 7-3/4%, respectively. During Year II, the participant will be due the
following additional interest equivalency payments:
<TABLE>
<CAPTION>
Quarterly Interest
Equivalency Payments
--------------------
<S> <C>
1st Quarter -- $ 234,000 x .0625 x .25 = $ 3,656.25
2nd Quarter -- 228,000 x .0675 x .25 = 3,847.50
3rd Quarter -- 222,000 x .0725 x .25 = 4,023.75
4th Quarter -- 216,000 x .0775 x .25 = 4,185.00
</TABLE>
7. TERMS OF AGREEMENTS. Each agreement authorized under this Plan shall
cover a period of one year unless additional allotments are made in any
subsequent year in which case such agreement shall also constitute an agreement
for such subsequent year or years. Each agreement shall provide that (a) the
participant will continue in full-time employment with the Company or a
subsidiary until age 65 or other age approved and authorized by the Committee
but in no case earlier than age 60, (b) the participant will, upon retirement,
agree to be available for consultation during the period that he is receiving
distributions hereunder, (c) the participant will refrain from actively
participating or engaging in any business in competition with the Company or any
subsidiary, (d) the participant will agree to the terms of accumulation and
distribution of his allotments, and (e) the participant will agree to be bound
concurrently with the Company under this Plan and the rules and regulations of
the Committee promulgated thereunder.
8. FORFEITURES. Upon termination of a participant's service with the
Company or a subsidiary prior to age 65, such participant shall forfeit 50% of
all allotments and dividend equivalents contingently credited to him in any year
except that such forfeiture shall not apply in the case of termination of
service (a) attributable to death, disability, or discharge without cause, (b)
for any reason after the participant has attained age 60, or (c) attributable to
any reason approved by the Committee. The entire amount of a participant's
allotments, dividend equivalents, and interest equivalents shall be forfeited
and cancelled if, without the prior written consent of the Company, the
participant at any time prior to his termination of service, or during the
period that he is receiving distributions hereunder, actively participates or
engages in any business in competition with the Company or any subsidiary or
fails to hold himself available for consultation, or if the employment of the
participant is terminated at any time prior to age 65 because of evidence of
dishonesty or mistrust in his employment or because of his involvement in a
crime or misdemeanor against the
-4-
<PAGE>
Company or any subsidiary or any employee thereof for which he is convicted or
which he has confessed in writing to the Company or to any law enforcement
agency. Allotments and dividend equivalents contingently credited to a
participant, as well as interest equivalents, that shall have been forfeited by
such participant shall be cancelled and shall not thereafter be reallotted to
any other participant.
9. DISTRIBUTION OF ALLOTMENTS. Distribution of the allotments and
dividend equivalents contingently credited to and accumulated for the benefit
of, a participant as of the end of the year in which termination of his service
occurs, or as of an earlier date of retirement or other date of termination
which does not entitle him to participate under this Plan for such year, shall
be made by payments in cash in such manner and on such dates as determined by
the Committee in its sole discretion immediately prior to the date the first
payment is due or, if the Committee shall not have made such prior determination
as aforesaid, then in equal monthly installments over a period of 120 months
commencing with the second month following the month or following the end of the
year of termination of service, whichever is applicable. Such installment
payments shall also include an additional sum representing interest equivalency
pursuant to Section 6 hereof.
In the event that a participant dies after retirement but before any or all
payments have been made, all remaining payments shall be made to the person or
persons or the survivors thereof as designated by the participant pursuant to
his agreement with the Company. The Committee shall cause the Company to make
such payments in the manner of payment then in effect pursuant to said
agreement, or in one or more installments, as the Committee in its sole
discretion may then determine. The Company shall deduct from the amount of all
payments made under this Plan any taxes required to be withheld under federal,
state or local laws.
The amount distributable to a participant shall be the greater of (a) the amount
at which the participant's total share equivalents were contingently credited to
the participant, or (b) an amount equal to the product of (x) the total share
equivalents contingently credited to the participant multiplied by (y) the
Average Price of the Common Stock for either (i) the calendar quarter ending on
the date of termination (if the participant's date of termination is the last
day of a calendar quarter or the next following day) or (ii) the last
sixty-three (63) days U.S. stock markets are open for the trading of shares
prior to or coinciding with the date of termination (if the participant's date
of termination is not the last day of a calendar quarter or the next following
day).
-5-
<PAGE>
10. RIGHTS OF PARTICIPANTS. No participant or any other person shall
acquire or have any interest in any fund or in any specific asset or assets of
the Company or any subsidiary by reason of any allotments to him hereunder, nor
any right to receive any distribution under this Plan, except as and to the
extent expressly provided in the Plan. Nothing in this Plan shall be deemed to
give any officer or employee of the Company or any subsidiary any right to
participate in the Plan except to such extent, if any, as the Committee may
determine in accordance with the provisions of this Plan. The adoption of this
Plan or the authorization and execution of an agreement thereunder shall not be
held or construed to confer upon any employee any right or guarantee of
continuation of employment by the Company or any subsidiary, nor shall it affect
in any way the terms of any employment agreement now or hereafter in effect
between the employee and the Company or a subsidiary and, further, it shall not
confer upon any participant any rights of a shareholder by reason of the share
equivalents contingently credited to him under this Plan.
11. NON-ASSIGNABILITY OF AGREEMENT. The agreement authorized under this
Plan when entered into between the Company and the employee shall not be
assignable or otherwise subject to hypothecation by the employee, nor shall the
employee acquire any rights to any distributable amount thereunder except as
provided in this Plan and such agreement. Such agreement shall continue in force
under its terms whether or not this Plan is amended or terminated, and shall
constitute a legally enforceable contract between the Company and the employee
during the period of its existence.
12. AMENDMENT OR TERMINATION OF PLAN. The Committee may amend or
discontinue this Plan at any time by the affirmative vote of a majority of such
Committee who are not participants under this Plan. No amendment, however, shall
alter or impair any agreement then in force without the consent of the employee
covered thereby, and no amendment shall apply to or affect the payment or
distribution of any participant of any amounts contingently credited to him for
any year ended prior to the effective date of such amendment. Termination of the
Plan shall not affect the agreements theretofore entered into between the
Company and its employees, but all such agreements shall continue in force after
the termination of this Plan in accordance with their terms and provisions.
13. EFFECTIVE DATE OF PLAN. This Plan shall become effective upon the
approval of the Executive Committee of the Board of Directors of the Company at
any regular or special meeting, or at any adjournment thereof, called and held
before December 31, 1967, and shall remain in effect until terminated by the
Board of Directors.
-6-
<PAGE>
14. CHANGE IN CONTROL. For purposes of this Section 14, a "Change in
Control" of the Company shall mean (a) the sale, lease, exchange or other
transfer of all or substantially all of the assets of the Company (in one
transaction or in a series of related transactions) to any person that is not
controlled by the Company, (b) the approval by the stockholders of the Company
of any plan or proposal for the liquidation or dissolution of the Company, or
(c) a change in control of a nature that would be required to be reported
(assuming such event has not been "previously reported") in response to Item
1(a) of the Current Report on Form 8-K, as in effect on May 1, 1988, pursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), whether or not the Company is then subject to such reporting
requirement; provided that, without limitation, such a Change in Control shall
be deemed to have occurred at such time as (x) any person is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly
or indirectly, of 20% or more of the combined voting power of the Company's
outstanding securities ordinarily having the right to vote at elections of
directors; or (y) individuals who constitute the Board of Directors on May 1,
1988, cease for any reason to constitute at least a majority thereof, provided
that any person becoming a director subsequent to May 1, 1988, whose election,
or nomination for election by the Company's stockholders, was approved by a vote
of at least a majority of the directors comprising the Board of Directors on May
1, 1988, (either by a specific vote or by approval of the proxy statement of the
Company in which such person is named as a nominee for director, without
objection to such nomination) shall be, for purpose of this clause (y),
considered as though such person were a member of the Board of Directors on
May 1, 1988.
The Company expressly recognizes that a Change in Control of the Company would
be likely to result in a material alteration or diminution of a participant's
position and responsibilities, and if that were to occur, certain of the terms
of this Plan would be unreasonable or unfair in their application to
participants.
Accordingly, if, during the term of this Plan any Change in Control of the
Company shall occur, the following provisions shall be applicable and shall
supersede all other provisions of this Plan:
a. CURRENT ALLOTMENTS. Notwithstanding provisions to the contrary in
Section 5 and without any need for formal action by the Company, the amounts
credited to and accumulated for the benefit of a participant under this Plan
shall be increased to include an amount equal to the amount allotted to such
participant with respect to the calendar year immediately preceding the
occurrence of the Change in Control;
-7-
<PAGE>
b. FORFEITURES. The provisions of Section 8 shall lapse and shall
have no further applicability to any participant; and
c. ACCELERATION. All amounts credited to and accumulated for the
benefit of a participant (or other person receiving payments or entitled to
receive payments under Section 9, such other person to be hereinafter called
"other recipient"), including the current allotment provided in Section 14a, if
any, shall become due and payable and shall be paid in full on the day the
Change in Control becomes effective unless a participant or other recipient,
prior thereto, shall notify the Committee, in writing, that such participant or
other recipient waives the right to acceleration in which case the provision of
Section 9 shall continue to apply to such participant or other recipient. In
effecting such payment, the Committee may make such arrangements, including
deposits in escrow or in trust in advance of the anticipated effective date of
the Change in Control, as it may deem advisable to carry out the foregoing and
to protect the interests of the Company in the event such Change in Control does
not occur.
-8-
<PAGE>
EXCERPTS FROM MINUTES OF
BOARD OF DIRECTORS MEETING OF
NASH-FINCH COMPANY ON
FEBRUARY 22, 1994
The Chairman then announced that the next item of business concerned
compensation paid to outside directors, and called upon Mr. Flaten to report the
recommendation of the Executive Committee. Mr. Flaten offered the following
resolution and moved its adoption:
RESOLVED, that effective as of March 1, 1994, outside members of the Board
of Directors of the Company be compensated at the rate of $1,000 plus
reasonable expenses incurred for each meeting of the Board of Directors of
the Company attended, $1,000 per month retainer and $600 plus reasonable
expenses incurred for attendance at meetings of committees of the Board
unless the committee meeting is held on the same day as a Board meeting or
is held by telephone conference, in which cases the fee shall be $400. For
the purposes of this resolution, an outside director is defined as any
director who is not a present full time employee of Nash Finch Company or
its subsidiaries.
RESOLVED FURTHER, that upon becoming effective, the foregoing resolution
shall supersede any resolution heretofore adopted by this Board of
Directors pertaining to compensation of outside directors.
The above resolution was seconded by Mr. Nash and, upon vote being taken, all
present voted unanimously in favor thereof and the same was declared duly
adopted.
<PAGE>
EXHIBIT 10.17
NASH FINCH COMPANY
INCOME DEFERRAL PLAN
<PAGE>
NASH FINCH COMPANY
INCOME DEFERRAL PLAN
TABLE OF CONTENTS
ARTICLE 1 DESCRIPTION................................................... 1
1.1 Plan Name..................................................... 1
1.2 Plan Purpose.................................................. 1
1.3 Plan Type..................................................... 1
ARTICLE 2 PARTICIPATION................................................. 2
2.1 Eligibility................................................... 2
2.2 Transfer Among Participating Employers........................ 2
2.3 Multiple Employment........................................... 2
2.4 Termination or Ceasing to be a Qualified Employee............. 3
2.5 Condition of Participation.................................... 3
2.6 Termination of Participation.................................. 3
ARTICLE 3 BENEFITS...................................................... 4
3.1 Participant Accounts.......................................... 4
3.2 Deferral Credits.............................................. 4
3.3 Earnings Credits.............................................. 5
3.4 Vesting....................................................... 5
ARTICLE 4 DISTRIBUTION.................................................. 6
4.1 Distribution to Participant................................... 6
4.2 Distribution to Beneficiary................................... 7
4.3 Payment in Event of Incapacity................................ 8
ARTICLE 5 SOURCE OF PAYMENTS; NATURE OF INTEREST........................ 10
5.1 Establishment of Trust........................................ 10
5.2 Source of Payments............................................ 10
5.3 Status of Plan................................................ 10
5.4 Non-assignability of Benefits................................. 10
ARTICLE 6 MISCELLANEOUS................................................. 11
6.1 Administration................................................ 11
6.2 Benefit Claim Procedure....................................... 11
6.3 Adoption by Affiliated Organization........................... 12
6.4 Amendment and Termination..................................... 12
6.5 Withholding and Offsets....................................... 13
6.6 Disputes...................................................... 13
6.7 Other Benefits................................................ 13
6.8 No Warranties Regarding Tax Treatment......................... 13
-i-
<PAGE>
6.9 No Employment Rights Created.................................. 13
ARTICLE 7 DEFINITIONS, CONSTRUCTION AND INTERPRETATION.................. 14
7.1 Account....................................................... 14
7.2 Active Participant............................................ 14
7.3 Affiliated Organization....................................... 14
7.4 Annual Bonus.................................................. 14
7.5 Base Salary................................................... 14
7.6 Board......................................................... 15
7.7 Beneficiary................................................... 15
7.8 Change in Control............................................. 15
7.9 Code.......................................................... 16
7.10 Committee..................................................... 16
7.11 Company....................................................... 16
7.12 Cross Reference............................................... 16
7.13 Effective Date................................................ 16
7.14 Employee...................................................... 16
7.15 ERISA......................................................... 16
7.16 Governing Law................................................. 17
7.17 Headings...................................................... 17
7.18 Participant................................................... 17
7.19 Participating Employer........................................ 17
7.20 Plan.......................................................... 17
7.21 Plan Year..................................................... 17
7.22 Plan Rule..................................................... 17
7.23 Profit Sharing Plan........................................... 17
7.24 Qualified Employee............................................ 17
7.25 Retirement.................................................... 17
7.26 Termination of Employment..................................... 17
7.27 Trust......................................................... 18
7.28 Trustee....................................................... 18
7.29 Unforeseeable Emergency....................................... 18
-ii-
<PAGE>
NASH FINCH COMPANY
INCOME DEFERRAL PLAN
ARTICLE 1
DESCRIPTION
1.1 PLAN NAME. The name of the Plan is the "Nash Finch Company Income
Deferral Plan."
1.2 PLAN PURPOSE. The purpose of the Plan is to provide Active
Participants with the opportunity to defer a portion of the Base Salary
or Annual Bonus or both that would otherwise be payable to them and to
compensate Active Participants for the amount, if any, by which such
deferrals decrease the amount of profit sharing contributions that
would otherwise be made on their behalf pursuant to the Profit Sharing
Plan.
1.3 PLAN TYPE. The Plan is an unfunded plan maintained primarily for
the purpose of providing deferred compensation for a select group of
management or highly compensated employees and, as such, is intended to
be exempt from the provisions of Parts 2, 3 and 4 of Subtitle B of
Title I of ERISA by operation of sections 201(2), 301(a)(3) and
401(a)(4) thereof, respectively, and from the provisions of Title IV of
ERISA, to the extent otherwise applicable, by operation of section
4021(b)(6) thereof. The Plan will be construed and administered in a
manner that is consistent with and gives effect to such intent.
<PAGE>
ARTICLE 2
PARTICIPATION
2.1 ELIGIBILITY.
(A) Prior to the beginning of each Plan Year, the Committee will
determine which Qualified Employees, if any, are eligible to make
deferral elections pursuant to Section 3.2 with respect to the
Plan Year.
(B) At any time during a Plan Year, the Committee may determine that
a Qualified Employee who became such after the beginning of the
Plan Year is eligible to make a deferral election pursuant to
Section 3.2 with respect to the remainder of the Plan Year.
(C) The fact that an Employee has been eligible to make deferral
elections with respect to any particular Plan Year does not give
the Employee any right to make deferral elections in any other
Plan Year.
(D) A Participant who, pursuant to Section 3.2(B), has revoked an
Annual Bonus deferral election in connection with an
Unforeseeable Emergency is not eligible to elect additional
deferrals (of either Base Salary or Annual Bonus) with respect to
the remainder of the Plan Year during which the revocation occurs
or the immediately following Plan Year. A Participant who has
received a distribution pursuant to Section 4.1(D) is not
eligible to elect additional deferrals (of either Base Salary or
Annual Bonus) with respect to the Plan Year during which the
distribution is received or the four immediately following Plan
Years. In either case, however, for the Plan Year during which
the revocation or distribution occurs, the Participant's Account
will be credited with the amount, if any, determined pursuant to
Section 3.2(E) based on his or her deferrals for the portion of
the Plan Year preceding the revocation or distribution.
(E) In conjunction with his or her initial election to participate in
the Plan, a Participant must elect whether his or her
distribution made pursuant to Section 4.1(A)(2) following his or
her disability or termination of employment on or after attaining
Retirement Age will (1) be made or commence within 60 days after
termination of employment or within the first 60 days of the
following calendar year and (2) be made in the form of a lump sum
payment or installments. Such elections are irrevocable and
apply to all benefits distributed to the Participant pursuant to
the Plan.
2.2 TRANSFER AMONG PARTICIPATING EMPLOYERS. An Active Participant who
transfers employment from one Participating Employer to another
Participating Employer and who continues to be a Qualified Employee
after the transfer will, for the duration of the Plan Year during which
the transfer occurs, continue to participate in the Plan, in accordance
with the election in effect for the portion of the Plan Year before the
transfer, as a Qualified Employee of such other Participating Employer.
2.3 MULTIPLE EMPLOYMENT. An Active Participant who is simultaneously
employed as a Qualified Employee with more than one Participating
Employer will participate in the Plan as a Qualified Employee of all
such Participating Employers on the basis of a single
- 2 -
<PAGE>
deferral election pursuant to Section 3.2 applied separately to his or
her Base Salary and Annual Bonus from each such Participating Employer.
2.4 TERMINATION OR CEASING TO BE A QUALIFIED EMPLOYEE. An Active
Participant who, during a Plan Year, terminates his or her employment
with all Participating Employers or is determined by the Committee to
have otherwise ceased to be a Qualified Employee is not eligible for
further deferral credits for the Plan Year pursuant to Section 3.2
other than such credits relating to the period prior to such
termination or cessation.
2.5 CONDITION OF PARTICIPATION. Each Qualified Employee, as a condition
of participation, is bound by all of the terms and conditions of the
Plan and the Plan Rules, including but not limited to the reserved
right of the Company to amend or terminate the Plan, and must furnish
to the Committee such pertinent information, and must execute such
election forms and other instruments, as the Committee or Plan Rules
may require by such dates as the Committee or Plan Rules may establish.
2.6 TERMINATION OF PARTICIPATION. A Participant or Beneficiary will
cease to be such as of the date on which his or her entire Account
balance has been distributed.
- 3 -
<PAGE>
ARTICLE 3
BENEFITS
3.1 PARTICIPANT ACCOUNTS. The Committee will establish and maintain an
Account for each Participant to evidence amounts credited with respect
to the Participant pursuant to Sections 3.2 and 3.3. If a Participant
makes deferrals with respect to Base Salary, Annual Bonus or both from
more than one Participating Employer, the Committee will establish a
separate Account for the Participant with respect to each such
Participating Employer.
3.2 DEFERRAL CREDITS.
(A) An Active Participant may elect to defer his or her Base Salary
for a Plan Year by any one percent increment from one percent to
a maximum percentage specified in Plan Rules and the percentage
so elected will automatically apply to the Participant's Base
Salary as adjusted from time to time. An election made pursuant
to this subsection will not be effective unless it is made on a
properly completed election form received by the Committee by a
date specified by the Committee which is prior to the first day
of the Plan Year to which the election relates or, in the case of
an Active Participant who is determined by the Committee to be
eligible to participate for a Plan Year pursuant to Section
2.1(B), within 30 days after the Committee's determination. An
Active Participant may revoke a deferral election made pursuant
to this subsection at any time. The revocation will be effective
as soon as administratively practicable after the Committee
receives a properly completed revocation form. Any election or
revocation pursuant to this subsection applies only to Base
Salary relating to services performed after the effective date of
the election or revocation.
(B) An Active Participant who is determined by the Committee to be
eligible to participate for a Plan Year pursuant to Section
2.1(A) may elect to defer his or her Annual Bonus for the Plan
Year by any five percent increment from five percent to a maximum
percentage specified in Plan Rules. An Active Participant who is
determined by the Committee to be eligible to participate for a
Plan Year pursuant to Section 2.1(B) may, if and to the extent
specified by the Committee in conjunction with such
determination, elect to defer his or her Annual Bonus for the
Plan Year. An election made pursuant to this subsection will not
be effective unless it is made on a properly completed election
form received by the Committee by a date specified by the
Committee which is prior to the first day of the Plan Year to
which the election relates or, in the case of an Active
Participant who is determined by the Committee to be eligible to
participate for a Plan Year pursuant to Section 2.1(B), within 30
days after the Committee's determination. An election pursuant
to this subsection is irrevocable after the latest date by which
it must be received by the Committee to be effective; provided,
that Plan Rules may permit a Participant to revoke the election
after that date if the Participant has an Unforeseeable
Emergency, in which case no additional deferrals of either Base
Salary or Annual Bonus will be made with respect to the portion
of the Plan Year following the revocation and the Participant
will be ineligible to elect additional deferrals for the period
specified in Section 2.1(D).
(C) Notwithstanding Subsections (A) and (B), Plan Rules may impose a
dollar limitation on the total amount of deferrals that may be
made during a Plan Year
- 4 -
<PAGE>
and may establish procedures to be applied in the event that a
Participant's deferral elections for a Plan Year would otherwise
cause such limitation to be exceeded. Plan Rules may also impose
conditions and limitations on participation by any Qualified
Employee or any group of similarly situated Qualified Employees.
(D) Reductions to an Active Participant's Base Salary and Annual
Bonus pursuant to this section will be credited to his or her
Account as of the day on which the Participant would have
otherwise received the Base Salary or Annual Bonus with respect
to which such credit relates.
(E) The Account of an Active Participant who is eligible to share in
the allocation of a Participating Employer's profit sharing
contribution for a Plan Year pursuant to the Profit Sharing Plan
will be credited with an amount equal to the amount, if any, by
which (1) the amount of the profit sharing contribution that
would have been allocated to his or her account under the Profit
Sharing Plan but for deferrals made pursuant to this Plan exceeds
(2) the amount of the profit sharing contribution actually
allocated to his or her account under the Profit Sharing Plan.
The Account will be credited as of the first day of the month
next following the month during which the Participatory
Employer's profit sharing contribution has been made in full.
3.3 EARNINGS CREDITS. As of the last day of each calendar quarter, the
Committee will, in accordance with Plan Rules, credit a Participant's
Account, including the undistributed portion of an Account being
distributed in the form of installment payments, with earnings in an
amount equal to the "applicable percentage" of the average daily
balance of the Account for the quarter. The applicable percentage for
a given calendar quarter is the quarterly equivalent of the average of
the annual yield set forth for each month during the quarter in the
MOODY'S BOND RECORD, published by Moody's Investor's Service, Inc.
(or any successor thereto) under the heading of "Moody's Corporate Bond
Yield Averages -- Av. Corp." or, if such yield is no longer available,
a substantially similar average selected by the Committee.
3.4 VESTING. Each Participant always has a fully vested nonforfeitable
interest in his or her Account.
- 5 -
<PAGE>
ARTICLE 4
DISTRIBUTION
4.1 DISTRIBUTION TO PARTICIPANT.
(A) FORM.
(1) TERMINATION PRIOR TO RETIREMENT AGE. If a Participant
terminates employment prior to attaining Retirement Age,
distribution to the Participant will be made in the form of
a lump sum payment.
(2) DISABILITY OR TERMINATION ON OR AFTER RETIREMENT AGE.
If a Participant
(a) is determined by the Committee to be absent from
active employment because of illness, injury or
disease that is likely to be of long or indefinite
duration or result in death or
(b) terminates employment on or after attaining
Retirement Age,
distribution to the Participant will be made in the form of
ten annual installment payments made on or around the same
date in each of the ten years unless, at the time of his or
her initial enrollment in the Plan, the Participant makes
an irrevocable election to receive his or her distribution
in the form of a lump sum payment.
(B) TIME. Distribution to a Participant will be made or commence, as
the case may be, within the 60-day period following the date on
which the Participant is determined to be disabled or terminates
employment, unless the distribution is made pursuant to
Subsection (A)(2), in which case the distribution will be made
or commence within the first 60 days of the calendar year
following the calendar year during which he or she is determined
to be disabled or terminates employment if the Participant so
elected pursuant to Section 2.1(E); provided, that if the
Participant makes a written claim pursuant to Section 6.2
objecting to the benefit, distribution will be made or commence
as soon as administratively practicable after the Committee's
final determination with respect to the claim.
(C) AMOUNT. If distribution is made in the form of a lump sum
payment, the amount of the payment will be equal to the sum of
(1) the balance of the Participant's Account as of the last day
of the calendar quarter immediately preceding the date of the
distribution plus (2) deferrals credited to the Account pursuant
to Section 3.2 since the last day of the calendar quarter
immediately preceding the date of the distribution plus (3)
earnings on the average daily balance of the Account for the
period beginning on the first day of the calendar quarter during
which the distribution occurs and ending on the day before the
distribution at the rate applied pursuant to Section 3.3 for the
calendar quarter immediately preceding the distribution. If
distribution is made in the form of installment payments, the
amount of the payment each year will be determined by dividing
the Participant's Account balance as of the last day of the
calendar quarter immediately preceding the payment date by the
total number of remaining payments (including the
- 6 -
<PAGE>
payment in question); provided, that the amount of the final
installment payment will be determined in accordance with the
preceding sentence.
(D) SPECIAL RULES.
(1) WITHDRAWALS DUE TO UNFORESEEABLE EMERGENCY.
Notwithstanding Subsections (A) or (B), a distribution will
be made to a Participant if the Participant submits a
written distribution request to the Committee and the
Committee determines that the Participant has experienced
an Unforeseeable Emergency. The amount of the distribution
may not exceed the lesser of (a) the amount necessary to
satisfy the emergency, as determined by the Committee or
(b) the balance of the Account as of the date of the
distribution determined in accordance with Subsection (C).
The distribution will be made in the form of a lump sum
payment as soon as administratively practicable after the
Committee's determination that the Participant has
experienced an Unforeseeable Emergency.
(2) ACCELERATED DISTRIBUTION. Notwithstanding Subsections
(A) or (B), a Participant may elect an immediate
distribution of his or her Account in an amount equal to 90
percent of the balance of the Account as of the date of the
distribution determined in accordance with Subsection (C),
in which case the remaining balance of the Account will be
forfeited. The distribution will be made in the form of a
lump sum payment as soon as administratively practicable
after the Committee's receipt of a written application on a
form furnished by the Committee.
(3) NONDEDUCTIBILITY. If the Committee determines in good
faith that there is a reasonable likelihood that any
compensation paid to a Participant by an Affiliated
Organization for a taxable year of the Affiliated
Organization would not be deductible by the Affiliated
Organization solely by reason of the limitation under Code
section 162(m), to the extent deemed necessary by the
Committee to ensure that the entire amount of any
distribution to the Participant pursuant to this subsection
is deductible, the Committee may defer all or any portion
of the distribution.
4.2 DISTRIBUTION TO BENEFICIARY.
(A) FORM. In the event of a Participant's death, the balance of
the Participant's Account will be distributed to the
Participant's Beneficiary in a lump sum payment whether or not
payments had commenced to the Participant in the form of
installments prior to his or her death.
(B) TIME. Distribution to a Beneficiary will be made within the
60-day period following the date on which the Committee receives
notice of the Participant's death; provided, that if the
Beneficiary makes a written claim pursuant to Section 6.2
objecting to the benefit, distribution will be made as soon as
administratively practicable after the Committee's final
determination with respect to the claim.
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(C) AMOUNT. The amount of the payment will be determined in
accordance with Section 4.1(C).
(D) BENEFICIARY DESIGNATION.
(1) Each Participant may designate, on a form furnished by the
Committee, one or more primary Beneficiaries or alternative
Beneficiaries to receive all or a specified part of his or
her Account after his or her death, and the Participant may
change or revoke any such designation from time to time.
No such designation, change or revocation is effective
unless executed by the Participant and received by the
Committee during the Participant's lifetime. No
designation of a Beneficiary other than the Participant's
spouse is effective unless the spouse consents to the
designation or the Committee determines that spousal
consent cannot be obtained because the spouse cannot
reasonably be located or is legally incapable of
consenting. The consent must be in writing, must
acknowledge the effect of the election and must be
witnessed by a notary public. The consent is effective
only with respect to the Beneficiary or class of
Beneficiaries so designated and only with respect to the
spouse who so consented.
(2) If a Participant -
(a) fails to designate a Beneficiary, or
(b) revokes a Beneficiary designation without naming
another Beneficiary, or
(c) designates one or more Beneficiaries none of whom
survives the Participant or exists at the time in
question,
for all or any portion of his or her Account, such Account
or portion will be paid to the Participant's surviving
spouse or, if the Participant is not survived by a spouse,
to the representative of the Participant's estate.
(3) The automatic Beneficiaries specified above and, unless the
designation otherwise specifies, the Beneficiaries
designated by the Participant, become fixed as of the
Participant's death so that, if a Beneficiary survives the
Participant but dies before the receipt of the payment due
such Beneficiary, the payment will be made to the
representative of such Beneficiary's estate. Any
designation of a Beneficiary by name that is accompanied by
a description of relationship or only by statement of
relationship to the Participant is effective only to
designate the person or persons standing in such
relationship to the Participant at the Participant's death.
4.3 PAYMENT IN EVENT OF INCAPACITY. If any individual entitled to
receive any payment under the Plan is, in the judgment of the
Committee, physically, mentally or legally incapable of receiving or
acknowledging receipt of the payment, and no legal representative has
been appointed for the individual, the Committee may (but is not
required to) cause the payment to be made to any one or more of the
following as may be chosen by the Committee: the Beneficiary (in the
case of the incapacity of a Participant); the institution
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maintaining the individual; a custodian for the individual under the
Uniform Transfers to Minors Act of any state; or the individual's
spouse, children, parents, or other relatives by blood or marriage.
The Committee is not required to see to the proper application of any
such payment and the payment completely discharges all claims under the
Plan against the Participating Employer, the Plan and Trust to the
extent of the payment.
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ARTICLE 5
SOURCE OF PAYMENTS; NATURE OF INTEREST
5.1 ESTABLISHMENT OF TRUST.
(A) A Participating Employer may establish a Trust, or may be covered
by a Trust established by another Participating Employer, with an
independent corporate trustee. The Trust must be a grantor trust
that conforms substantially with the model trust described in
Revenue Procedure 92-64. The Participating Employers may from
time to time transfer to the Trust cash, marketable securities or
other property acceptable to the Trustee in accordance with the
terms of the Trust.
(B) Notwithstanding Subsection (A), not later than the effective date
of a Change in Control, each Participating Employer must transfer
to the Trust an amount not less than the amount by which (1) 125
percent of the aggregate balance of all Participants' Accounts
attributable to the Participating Employer as of the last day of
the month immediately preceding the effective date of the Change
in Control (determined in the manner specified in Section 4.1(C)
if the last day of the month is not also the last day of a
calendar quarter) exceeds (2) the value of the Trust assets
attributable to amounts previously contributed by the
Participating Employer as of the most recent date as of which
such value was determined.
5.2 SOURCE OF PAYMENTS.
(A) Each Participating Employer will pay, from its general assets,
the portion of any benefit pursuant to Article 4 or Section 6.4
attributable to a Participant's Account with respect to that
Participating Employer, and all costs, charges and expenses
relating thereto.
(B) The Trustee will make distributions to Participants and
Beneficiaries from the Trust in satisfaction of a Participating
Employer's obligations under the Plan in accordance with the
terms of the Trust. The Participating Employer is responsible
for paying any benefits attributable to a Participant's Account
with respect to that Participating Employer that are not paid by
the Trust.
5.3 STATUS OF PLAN. Nothing contained in the Plan or Trust is to be
construed as providing for assets to be held for the benefit of any
Participant or any other person or persons to whom benefits are to be
paid pursuant to the terms of this Plan, the Participant's or other
person's only interest under the Plan being the right to receive the
benefits set forth herein. The Trust is established only for the
convenience of the Participating Employers and the Participants, and no
Participant has any interest in the assets of the Trust prior to
distribution of such assets pursuant to the Plan. To the extent the
Participant or any other person acquires a right to receive benefits
under this Plan or the Trust, such right is no greater than the right
of any unsecured general creditor of the Participating Employer.
5.4 NON-ASSIGNABILITY OF BENEFITS. The benefits payable under the Plan
and the right to receive future benefits under the Plan may not be
anticipated, alienated, sold, transferred, assigned, pledged,
encumbered, or subjected to any charge or legal process.
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ARTICLE 6
MISCELLANEOUS
6.1 ADMINISTRATION.
(A) The Plan will be administered on behalf of the Company by a
committee whose members will be appointed by and will serve at
the pleasure of the Company's Board. Any Committee member may be
dismissed at any time, with or without cause, on ten days' notice
from the Company's Board. Any Committee member may resign by
delivering his or her written resignation to the Company's Board.
Vacancies arising by the death, resignation or removal of a
Committee member may (but need not) be filled by the Company's
Board.
(B) The Committee will operate in accordance with such rules as the
Company's Board may from time to time specify.
(C) The Committee may delegate to any person authority to perform
nondiscretionary, ministerial acts determined by the Committee to
be necessary or desirable in connection with the administration
of the Plan.
(D) The Committee has discretionary power and authority to adopt,
modify and rescind Plan Rules, make all determinations necessary
for the administration of the Plan, to construe, interpret, apply
and enforce the Plan and Plan Rules and to remedy ambiguities,
inconsistencies, omissions and erroneous Account balances.
(E) The Committee will maintain records, make the requisite
calculations and disburse or direct the Trustee to disburse
payments under the Plan. The Committee's interpretations,
determinations, regulations and calculations are final and
binding on all persons and parties concerned.
(F) The Participating Employers jointly and severally agree to
indemnify and hold harmless, to the extent permitted by law, each
member of the Committee or other director, officer or employee of
any Affiliated Organization performing administrative duties in
connection with the Plan against any and all liabilities, losses,
costs and expenses (including legal fees) of every kind and
nature that may be imposed on, incurred by, or asserted against
such person at any time by reason of such person's services in
connection with the Plan, but only if such person did not act
dishonestly or in bad faith or in willful violation of the law or
regulations under which such liability, loss, cost or expense
arises. The Participating Employers have the right, but not the
obligation, to select counsel and control the defense and
settlement of any action for which a person may be entitled to
indemnification under this provision.
6.2 BENEFIT CLAIM PROCEDURE. Within a reasonable time following
termination of a Participant's employment, the Committee will determine
and notify the Participant or, if the Participant is deceased, his or
her Beneficiary, of his or her benefits, if any, payable under the
Plan. Not later than 30 days after receipt of such notice, the
Participant or his or her Beneficiary, as the case may be, may file
with the Committee a written claim objecting to the Committee's
determination. Not later than 90 days after receipt of such claim, the
Committee will render a written decision on the claim to the claimant.
If the
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claim is denied in whole or in part, such decision will include: the
reasons for the denial; a reference to the Plan provision that is the
basis for the denial; a description of any additional material or
information necessary for the claimant to perfect the claim; an
explanation as to why such information or material is necessary; and an
explanation of the Plan's claim procedure. Not later than 60 days
after receiving the Committee's written decision, the claimant may file
with the Committee a written request for review of the Committee's
decision, and the claimant or his or her representative may thereafter
review Plan documents that relate to the claim and submit written
comments to the Committee. Not later than 60 days after receiving such
request, the Committee will afford the claimant or his or her
representative an opportunity to present the claim in person to the
Committee. Not later than 60 days after such presentation or, if there
is no such presentation, not later than 60 days after the Committee's
receipt of the request for review, the Committee will render a final
written decision on the claim, which decision will include the specific
reasons for the decision, including references to specific Plan
provisions where appropriate. The 90- and 60-day periods during which
the Committee must respond to the claimant may be extended by up to an
additional 90 or 60 days, respectively, if special circumstances beyond
the Committee's control so require and if notice of such extension is
given to the claimant prior to the expiration of the initial 90- or
60-day period.
6.3 ADOPTION BY AFFILIATED ORGANIZATION. With the prior approval of the
Committee, an Affiliated Organization may, by action of its Board,
adopt this Plan and become a Participating Employer.
6.4 AMENDMENT AND TERMINATION.
(A) By action of its Board, the Company may amend the Plan at any
time and in any manner, except that (1) no amendment may
adversely affect a benefit to which a Participant or the
Beneficiary of a deceased Participant is entitled under the Plan
as of the later of the adoption date or effective date of the
amendment and (2) no attempted amendment to Section 5.1(B), this
clause (2) or Section 7.8 will be effective with respect to any
Change in Control, as defined in Section 7.8 without regard to
the attempted amendment, occurring within 12 months after the
date on which the attempted amendment is approved by the
Company's Board unless each Participant provides his or her prior
written consent to the amendment. Any amendment that changes the
rate of earnings credited to Participants' Accounts pursuant to
Section 3.3 is effective with respect to the portion of the
Accounts attributable to credits made before the date on which
the amendment is adopted only if the Company's Board determines
in good faith that on that date, it is reasonably likely that, in
the long run, the new rate will not result in materially lower
earnings credits than the old rate. Any amendment to the Plan
applies only to Participants who terminate employment after the
effective date of the amendment unless the amendment expressly
otherwise provides.
(B) By action of its Board, the Company may terminate the Plan at any
time. By action of its Board, any other Participating Employer
may terminate its participation in the Plan at any time. If the
Plan or a Participating Employer's participation in the Plan is
terminated, no additional deferrals or deferral credits will be
made with respect to affected Participants, other than credits
relating to the period prior to the effective date of the
termination, and the Accounts of affected
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Participants will continue to be credited with earnings pursuant
to Section 3.3 until they are distributed pursuant to Article 4
following the Participant's termination of employment or death.
(C) Notwithstanding any other provision of the Plan to the contrary,
the Committee may cause a Participating Employer to make an
immediate lump sum distribution to any Participant of the balance
of his or her Account (determined in the manner specified in
Section 4.1(C)) and/or transfer the benefits that would otherwise
be payable under the Plan for all or any Participants to a new
plan that is similar in all material respects (other than those
which require the action in question to be taken), if the
Committee in good faith determines that:
(1) such action is necessary to ensure the continued status of
the Plan (or the transferee plan) as an unfunded plan
maintained primarily for the purpose of providing deferred
compensation to a select group of management or highly
compensated employees, or
(2) a Participant's interest in the Plan has been or is likely
to be includable in the Participant's gross income for
federal income tax purposes prior to the actual payment of
benefits pursuant to the Plan.
6.5 WITHHOLDING AND OFFSETS. The Participating Employers and the
Trustee retain the right to withhold from any benefit payment under the
Plan, any and all income, employment, excise and other tax as the
Participating Employers or Trustee deems necessary and the
Participating Employers may offset against amounts payable to a
Participant or Beneficiary under the Plan any amounts then owing to the
Participating Employers by such Participant or Beneficiary.
6.6 DISPUTES. In the event of a dispute over whether any person is
entitled to a benefit under the Plan, the amount, form or timing of
payment of any such benefit or any other provision of the Plan, the
person is responsible for paying any costs he, she or it incurs,
including attorney's fees and legal expenses, and each Participating
Employer is responsible for paying any costs it incurs, including
attorney's fees and legal expenses.
6.7 OTHER BENEFITS. Neither amounts deferred nor amounts paid pursuant
to the Plan constitute salary or compensation for the purpose of
computing benefits under any other benefit plan, practice, policy or
procedure of a Participating Employer unless otherwise expressly
provided thereunder.
6.8 NO WARRANTIES REGARDING TAX TREATMENT. The Participating Employers
make no warranties regarding the tax treatment to any person of any
deferrals or payments made pursuant to the Plan and each Participant
will hold the Committee and the Participating Employers and their
officers, directors, employees, agents and advisors harmless from any
liability resulting from any tax position taken in good faith in
connection with the Plan.
6.9 NO EMPLOYMENT RIGHTS CREATED. Neither the establishment of or
participation in the Plan confers on any Employee the right to
continued employment or limits the right of the Participating Employer
to discharge, transfer, demote, modify terms and conditions of
employment or otherwise deal with any Employee without regard to the
effect which such action might have on him or her with respect to the
Plan.
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ARTICLE 7
DEFINITIONS, CONSTRUCTION AND INTERPRETATION
The definitions and rules of construction and interpretation set forth in this
article apply in construing the Plan unless the context otherwise indicates.
7.1 ACCOUNT. "Account" means the bookkeeping account maintained with
respect to a Participant pursuant to Section 3.1.
7.2 ACTIVE PARTICIPANT. "Active Participant" with respect to a Plan
Year is a Qualified Employee who the Committee has determined is
eligible to participate in the Plan for the Plan Year pursuant to
Section 2.1 for the portion of the Plan Year during which he or she
remains eligible.
7.3 AFFILIATED ORGANIZATION. An "Affiliated Organization" is the
Company and any corporation that is a member of a controlled group of
corporations (within the meaning of Code section 1563(a) without regard
to Code sections 1563(a)(4) and 1563(e)(3)(C)) that includes the
Company or any trade or business (whether or not incorporated) that is
controlled (within the meaning of Code section 414(c)) by the Company.
7.4 ANNUAL BONUS. "Annual Bonus" with respect to a Participant for a
Plan Year means the discretionary annual cash bonus paid to the
Participant by a Participating Employer during the calendar quarter
first following the Plan Year or that would have been so paid but for
an election made pursuant to the Plan.
7.5 BASE SALARY. "Base Salary" with respect to a Participant for a Plan
Year means the regular cash remuneration for services rendered as a
Qualified Employee paid to the Participant by a Participating Employer
during the Plan Year or that would have been so paid but for an
election made pursuant to the Plan, excluding the following:
(1) any bonus;
(2) the value of life insurance coverage included in the
Participant's wages under Code section 79;
(3) any car allowance, moving expense or mileage reimbursement;
(4) any educational assistance payment;
(5) any severance pay;
(6) any payments under any plan of deferred compensation; or
(7) any benefit under any qualified or nonqualified stock
option or stock purchase plan; or
(8) any other element of compensation specified in Plan Rules.
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7.6 BOARD. "Board" means the board of directors of the Affiliated
Organization in question. When the Plan provides for an action to be
taken by the Board, the action may be taken by any committee or
individual authorized to take such action pursuant to a proper
delegation by the board of directors in question.
7.7 BENEFICIARY. "Beneficiary" with respect to a Participant is the
person designated or otherwise determined under the provisions of
Section 4.2(D) as the distributee of benefits payable after the
Participant's death who has not ceased to be a Beneficiary pursuant to
Section 2.6.
7.8 CHANGE IN CONTROL.
(A) "Change in Control" is any of the following:
(1) the sale, lease, exchange or other transfer, directly or
indirectly, of all or substantially all of the assets of
the Company, in one transaction or in a series of related
transactions, to any person;
(2) the approval by the stockholders of the Company of any plan
or proposal for the liquidation or dissolution of the
Company;
(3) any person is or becomes the beneficial owner (as defined
in Rule 13d-3 under the Exchange Act), directly or
indirectly, of (a) 20 percent or more, but not more than 50
percent, of the combined voting power of the Company's
outstanding securities ordinarily having the right to vote
at elections of directors, unless the transaction resulting
in such ownership has been approved in advance by the
continuity directors or (b) more than 50 percent of the
combined voting power of the Company's outstanding
securities ordinarily having the right to vote at elections
of directors(regardless of any approval by the continuity
directors);
(4) a merger or consolidation to which the Company is a party
if the stockholders of the Company immediately prior to the
effective date of such merger or consolidation have
beneficial ownership (as defined in Rule 13d-3 under the
Exchange Act) immediately following the effective date of
such merger or consolidation of securities of the surviving
company representing (a) 50 percent or more, but not more
than 80 percent, of the combined voting power of the
surviving corporation's then outstanding securities
ordinarily having the right to vote at elections of
directors, unless such merger or consolidation has been
approved in advance by the continuity directors, or (b)
less than 50 percent of the combined voting power of the
surviving corporation's then outstanding securities
ordinarily having the right to vote at elections of
directors (regardless of any approval by the continuity
directors);
(5) the continuity directors cease for any reason to constitute
at least a majority of the Company's board of directors; or
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(6) a change in control of the Company of a nature that would
be required to be reported pursuant to section 13 or 15(d)
of the Exchange Act, whether or not the Company is then
subject to such reporting requirement.
(B) For purposes of this section:
(1) a "continuity director" means any individual who is a
member of the Company's board of directors on the Effective
Date while he or she is a member of the board, and any
individual who subsequently becomes a member of the
Company's board of directors whose election or nomination
for election by the Company's stockholders was approved by
a vote of at least a majority of the directors who are
continuity directors (either by a specific vote or by
approval of the proxy statement of the Company in which
such individual is named as a nominee for director without
objection to such nomination);
(2) "Exchange Act" is the Securities Exchange Act of 1934, as
amended from time to time; and
(3) "person" includes any individual, corporation, partnership,
group, association or other "person," as such term is
defined in section 14(d) of the Exchange Act, other than
(i) the Company; (ii) any corporation at least a majority
of whose securities having ordinary voting power for the
election of directors is owned, directly or indirectly, by
the Company; (iii) any other entity in which the Company,
by virtue of a direct or indirect ownership interest, has
the right to elect a majority of the members of the
entity's governing body; or (iv) any benefit plan sponsored
by the Company, a corporation described in clause (ii) or
an entity described in clause (iii).
7.9 CODE. "Code" means the Internal Revenue Code of 1986, as amended
from time to time.
7.10 COMMITTEE. "Committee" means the administrative committee described
in Section 6.1.
7.11 COMPANY. "Company" means Nash Finch Company or any successor
thereto.
7.12 CROSS REFERENCE. References within a section of the Plan to a
particular subsection refer to that subsection within the same section
and references within a section or subsection to a particular clause
refer to that clause within the same section or subsection, as the case
may be.
7.13 EFFECTIVE DATE. "Effective Date" means June 1, 1994 or an earlier
date specified by the Committee.
7.14 EMPLOYEE. "Employee" is an individual who performs services as a
common law employee of a Participating Employer.
7.15 ERISA. "ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time.
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7.16 GOVERNING LAW. To the extent that state law is not preempted by the
provisions of ERISA, or any other laws of the United States, all
questions pertaining to the construction, validity, effect and
enforcement of the Plan will be determined in accordance with the
internal, substantive laws of the State of Minnesota without regard to
its conflict of laws rules of the State of Minnesota or any other
jurisdiction.
7.17 HEADINGS. The headings of articles and sections are included solely
for convenience of reference; if there exists any conflict between such
headings and the text of the Plan, the text will control.
7.18 PARTICIPANT. "Participant" is a current or former Active
Participant to whose Account amounts have been credited pursuant to
Article 3 and who has not ceased to be a Participant pursuant to
Section 2.6.
7.19 PARTICIPATING EMPLOYER. "Participating Employer" is the Company and
any other Affiliated Organization that has adopted the Plan, or all of
them collectively, as the context requires. An Affiliated Organization
will cease to be a Participating Employer upon a termination of the
Plan as to its Employees and the satisfaction in full of all of its
obligations under the Plan or upon its ceasing to be an Affiliated
Organization.
7.20 PLAN. "Plan" means the Nash Finch Company Income Deferral Plan, as
from time to time amended or restated.
7.21 PLAN YEAR. "Plan Year" means the period beginning on the Effective
Date and ending on December 31, 1994 and, thereafter, the calendar
year.
7.22 PLAN RULE. "Plan Rule" is a rule, policy, practice or procedure
adopted by the Committee. Each Plan Rule will be uniform and
nondiscriminatory with respect to persons determined by the Committee
to be similarly situated.
7.23 PROFIT SHARING PLAN. "Profit Sharing Plan" means the Nash Finch
Company Profit Sharing Plan as amended from time to time.
7.24 QUALIFIED EMPLOYEE. "Qualified Employee" means an Employee who is
considered to be a management or highly compensated employee under Plan
Rules.
7.25 RETIREMENT AGE. "Retirement Age" means the earliest age at or after
which a termination of employment is considered to be a retirement
under policies of the Participating Employer generally applicable to
Qualified Employees as in effect from time to time.
7.26 TERMINATION OF EMPLOYMENT.
(A) For purposes of determining entitlement to distribution under
this Plan, subject to Subsections (B) and (C), a Participant will
be deemed to have terminated his or her employment only if the
Committee determines that he or she has completely severed his or
her employment relationship with all Affiliated Organizations or
has become disabled within the meaning of Section 4.1(A)(2).
Accordingly, neither transfer of employment among Affiliated
Organizations nor absence from active service by reason of leave
of absence of any nature (other than in connection with a
Participant becoming disabled within the meaning of Section
4.1(A)(2)) will
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constitute a termination of employment. In addition, neither
termination of the Plan nor, subject to Subsection (C),
termination of participation in the Plan by a Participating
Employer will be deemed to result in a termination of employment
with respect to any affected Participant.
(B) If some or all of the assets of a Participating Employer are
acquired by a unrelated third party, a Participant who is
employed by the acquiror or an affiliate of the acquiror in
connection with the acquisition will be deemed to have terminated
his or her employment unless the acquiror adopts a successor plan
which is substantially similar to the Plan in all material
respects and expressly assumes the Participating Employer's
obligation to provide benefits to the Participant, in which case
the Participating Employer will cease to have any obligation to
provide benefits to the Participant pursuant to the Plan as of
the effective date of the assumption.
(C) If a Participating Employer ceases to be an Affiliated
Organization, unless otherwise provided in an agreement between
the Company or the Participating Employer and an unrelated third
party acquiror:
(1) a Participant who is employed with the Participating
Employer; or
(2) a Participant who is not employed with the Participating
Employer but has an Account balance attributable to the
Participating Employer
will not be deemed to have terminated his or her employment with
respect to his or her Account balance attributable to the
Participating Employer and the Participating Employer will, after
the date on which it ceases to be an Affiliated Organization,
continue to be solely responsible to provide benefits to the
Participant equal to the balance of the Account as of the
effective date of the cessation and as thereafter increased by
deferral credits relating to the period before the effective date
and earnings credits pursuant to Section 3.3.
7.27 TRUST. "Trust" means any trust or trusts established by a
Participating Employer pursuant to Section 5.1.
7.28 TRUSTEE. "Trustee" means the one or more banks or trust companies
that at the relevant time has or have been appointed by the Company to
act as Trustee of the Trust.
7.29 UNFORESEEABLE EMERGENCY. "Unforeseeable Emergency" means an
unanticipated emergency that is caused by an event beyond the control
of a Participant and that would result in severe financial hardship to
the Participant if the revocation or distribution, as the case may be,
were not permitted. An Unforeseeable Emergency includes a sudden and
unexpected illness or accident of the Participant or a dependent (as
defined in Code section 152(a)) of the Participant, the loss of the
Participant's property due to casualty or other similar extraordinary
and unforeseeable circumstances arising as a result of events beyond
the control of the Participant. An Unforeseeable Emergency does not
exist if the financial hardship may be relieved (1) through
reimbursement or compensation by insurance or otherwise, (2) by
liquidation of the Participant's assets, to the extent the liquidation
itself would not cause severe hardship or (3) by cessation of deferrals
under
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the Plan. The existence of an Unforeseeable Emergency will be
determined by the Committee.
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Total sales and revenues increased 8.3% for the 52 weeks of fiscal 1993 to
$2.724 billion compared to $2.515 billion in the 53 weeks of 1992 and $2.343
billion in 1991. The increase is primarily attributed to the acquisitions of the
military wholesale business of B. Green & Company, which occurred at the end of
fiscal 1992, and the 16-store Easter chain, which was acquired at the end of the
second quarter of fiscal 1993.
In 1993, wholesale sales increased 9.7%. When sales gains realized from
acquisitions and the effect of an additional week of operations last year are
excluded, the increase was 1.7%. Sales growth continued to be hampered by a
general weakness in the economy and deflation in food prices. An internally
measured inflation index showed a deflation rate of .75 % in food prices in 1993
compared to an inflation rate of .5 % in 1992. Wholesale sales for 1992 improved
over 1991 due to the acquisition of the Tidewater Wholesale Grocery division in
January 1992, and the additional week of sales in 1992.
Retail sales for 1993 increased 5.1% overall due to acquisitions and the
opening of new and expanded stores. When the effects of stores acquired or sold
during the year and the extra week of sales last year are eliminated, however,
the result is a decline of 1.3%. This is principally attributable to increasing
competitive pressures in certain market areas and, to a lesser extent, deflation
in food prices. Retail sales increased 2.0% in 1992 compared to 1991 largely due
to the additional week of sales.
Gross margins were 14.6%, 14.6% and 14.8% in 1993, 1992 and 1991,
respectively. Although wholesale sales, which typically achieve lower margins
than retail, accounted for a slightly greater proportion of total sales in
fiscal 1993 than in 1992, margin improvements for both wholesale and retail
segments were sufficient to offset any reduction that might have resulted from
the proportionate change in sales. The decrease in margins in 1992 compared to
1991 resulted from a higher proportion of lower margin wholesale sales.
Margin improvements in 1993 were the result of an increase in sales, as a
percentage of total sales, of higher margin product categories.
<PAGE>
Selling, general and administrative expenses, as a percentage of revenues
were 12.2% in 1993 compared to 11.9% in 1992 and 1991. During 1993, the Company
increased its provision for bad debts by $10.1 million compared with $3.7
million in 1992. This represented a substantial portion of the increase in
expense over the prior year. The increased provision primarily consisted of
approximately $5.0 million relating to the bankruptcy of a multi-store customer
in the Southeast and $3.1 million associated with the debt-workout acquisition
of 23 Food Folks stores which was completed in January 1994 (see Note 13 of
notes to consolidated financial statements). It is the Company's intention to
operate these stores as part of its corporate retail operations. Selling,
general and administrative expenses showed no change as a percent of revenues in
1992 compared to 1991. Cost containment measures have been successful in
controlling costs, especially in the areas of health care and workers'
compensation in each of the last two years compared to fiscal 1991. The Company
continues to concentrate on cost controls as well as productivity gains in an
effort to reduce operating expenses.
Depreciation and amortization expense increased 7.7% and 3.5% for 1993 and
1992 compared to their respective prior years. These changes are consistent with
increases in property, plant and equipment and intangible assets. Depreciation
and amortization expense for 1993 also reflects the expense related to
acquisitions which occurred at the end of 1992 as well as the mid-year 1993
acquisition of 16 retail stores.
Interest expense in 1993 increased 8.8% over 1992 as a result of greater
average short-term borrowings partially offset by more favorable borrowing
rates. As a percentage of revenues, interest expense was .37%, .36% and .38% for
1993, 1992 and 1991, respectively. The increase in capital lease obligations
also contributed to higher interest expense in fiscal 1993.
Earnings before income taxes decreased $5.9 million, or 18.2%, from fiscal
1992. The decrease is attributed to higher bad debt expense at the wholesale
level which was partially offset by the profit contribution of the recent
acquisitions, especially our Baltimore-based military distribution operation.
Retail operations in 1993, both corporate and independent, were hampered by more
intense competitive pressures in certain regions. This is expected to continue
in 1994 making expense control for our wholesale and retail segments imperative
to increasing both profit and return on investment.
The operating results of Nash DeCamp, the Company's produce marketing
subsidiary, were excellent. Nash DeCamp enjoyed a record year of revenues and
earnings as a result of improved prices for most commodities in contrast to the
excessive supply of quality fruit and depressed markets which adversely affected
1992.
The Company's effective tax rates are 40.5%, 38.4% and 38.1% for 1993, 1992
and 1991, respectively. The rate increase reflects the new federal tax
legislation enacted in 1993 and higher state tax rates. The increase in 1992
over 1991 was due
<PAGE>
to a reduction in the federal targeted jobs credit and higher state tax rates.
LIQUIDITY AND CAPITAL RESOURCES
Historically, the Company has financed its capital needs through a
combination of internal and external sources. These sources include retained
earnings, short- term bank borrowings, various types of long-term debt, leasing
and equity financing. As external financing is required in the future, the
Company believes that its conservative debt structure and strong financial
position will continue to support its ability to obtain the required funds.
Cash provided from operations increased from $30.8 million in 1992 to $83.0
million in 1993. The main reason for this increase was that inventories in
existing businesses decreased by $26.5 million in 1993 compared with an increase
in inventories in 1992 of $22.2 million. This reduction in 1993 represents the
results of sustained efforts to effectively manage inventories thereby freeing
cash to fund other corporate needs.
The Easter group of stores was acquired during 1993 for cash totaling $27.0
million. The acquisition included 16 stores located in Iowa, Illinois and
Missouri.
The ratio of current assets to current liabilities at the close of 1993,
1992 and 1991 was 1.37%, 1.45% and 1.55%, respectively. The decrease in current
ratio and working capital is principally the result of utilizing short-term
financing to fund acquisitions. The Company may consider alternate financing at
a later date. The Company's short- term liquidity is, however, stronger than its
current ratio would indicate because, as shown in the notes to the January 1,
1994 consolidated financial statements, the replacement value of inventories is
$42.5 million more than the reported LIFO inventory values.
Excluding acquisitions and capital leases, capital expenditures were $36.4
million in 1993, a decrease of $6.6 million from $43.0 million in 1992. Capital
expenditures include improvements to distribution centers and existing retail
stores and new store construction. Truck and trailer replacement continued in
accordance with pre-established schedules to maintain an up-to-date delivery
fleet. Capital expenditures for 1994 are estimated at $40.9 million, exclusive
of acquisitions.
Dividend payments in 1993 were $.72 per share, up from $.71 per share in
1992. These amounts represented 49% and 38% of net earnings in 1993 and 1992,
respectively.
On April 2, 1992, the Company sold notes receivable with an approximate
principal balance of $22.8 million to an investor for cash. In addition, new
loans to customers totaling $15.9 million were made during 1993 compared with
$23.0 million in 1992.
<PAGE>
Long-term debt decreased from $92.1 million at the end of 1992 to $89.8
million at the end of 1993. The amount of long-term debt at the end of 1992
includes short-term debt of $25.0 million reclassified for financial statement
presentation purposes to long-term debt based on commitments entered into and
finalized subsequent to year end. Long- term debt and capitalized leases as a
percentage of total capital decreased from 33.0% at the end of 1992 to 32.9% at
the end of 1993. Return on average stockholders' equity was 8.1% in 1993, down
from 10.8% in 1992.
At year end, the Company had $115 million in informal committed and
uncommitted short-term lines of credit with banks. Short-term bank borrowing
arrangements have been sufficient to meet funding requirements. Short-term bank
borrowings averaged $43.2 million during 1993 and were $38.3 million at year
end. Borrowings ranged from a high of $77.5 million, before reclassification of
$25.0 million to long- term as explained above, to a low of $18.0 million during
the year. Interest on short-term borrowings were generally at negotiated rates.
Lines of credit are renewable each year under terms to be negotiated. The
Company believes that additional short-term credit would be available if needed.
Stockholders' equity increased to $199.3 million at the end of 1993 from
$191.2 million at the end of the previous year. This increase will provide an
additional equity base for future growth.
<PAGE>
PRICE RANGE OF COMMON STOCK AND DIVIDENDS
Nash Finch Company Common Stock is traded in the national over-the-counter
market under the symbol NAFC. The following table sets forth, for each of the
calendar periods indicated, the range of high and low closing sales prices for
the Common Stock as reported by the NASDAQ National Market System, and the cash
dividends paid per share of Common Stock. Prices do not include adjustments for
retail mark-ups, mark-downs or commissions. At January 1, 1994 there were 2,074
stockholders of record.
<TABLE>
<CAPTION>
Dividends
1993 1992 Per Share
------------- ----------- ------------
High Low High Low 1993 1992
- --------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
First Quarter $23 1/4 18 1/4 19 1/2 17 1/4 .18 .17
Second Quarter 21 3/4 19 1/4 19 1/4 17 3/8 .18 .17
Third Quarter 22 1/2 19 3/8 19 3/4 17 1/4 .18 .18
Fourth Quarter 20 1/2 17 19 1/4 16 1/4 .18 .19
</TABLE>
<PAGE>
NASH FINCH COMPANY AND SUBSIDIARIES
Quarterly Financial Information (Unaudited)
<TABLE>
<CAPTION>
A summary of quarterly financial information
is presented.
First Quarter Second Quarter Third Quarter Fourth Quarter
12 Weeks 12 Weeks 16 Weeks 12 Weeks 13 Weeks
-------------------- ----------------- ------------------ ---------------------
(In thousands, except per share amounts) 1993 1992 1993 1992 1993 1992 1993 1992
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net sales and other income $ 601,066 531,883 631,266 567,871 856,551 784,421 634,652 631,263
Cost of sales 516,583 454,212 540,365 483,600 726,926 668,911 541,375 541,122
Earnings before income taxes 4,021 3,698 8,218 7,765 5,384 10,217 9,055 10,918
Income taxes 1,568 1,433 3,205 3,009 2,364 3,959 3,667 4,129
Net earnings 2,453 2,265 5,013 4,756 3,020 6,258 5,388 6,789
Percent to sales and revenues .41 .42 .79 .83 .36 .80 .84 1.08
Net earnings per share $ .23 .21 .46 .44 .27 .57 .50 .63
Average number of shares outstanding 10,872 10,871 10,872 10,872 10,872 10,872 10,872 10,872
</TABLE>
<PAGE>
[LOGO]
NASH-FINCH COMPANY AND SUBSIDIARIES
Consolidated Financial Statements
January 1, 1994 and January 2, 1993
<PAGE>
[LOGO]
INDEPENDENT AUDITORS' REPORT
The Board of Directors and Stockholders
Nash Finch Company:
We have audited the accompanying consolidated balance sheets of Nash Finch
Company and subsidiaries as of January 1, 1994 and January 2, 1993 and the
related consolidated statements of earnings, stockholders' equity, and cash
flows for each of the years in the three-year period ended January 1, 1994.
These consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Nash Finch Company
and subsidiaries at January 1, 1994 and January 2, 1993, and the results of
their operations and their cash flows for each of the years in the three-year
period ended January 1, 1994 in conformity with generally accepted accounting
principles.
As discussed in notes 1, 6 and 11 to the consolidated financial statements, the
Company adopted the provisions of the Financial Accounting Standards Board's
Statement of Financial Accounting Standards No. 106, EMPLOYERS' ACCOUNTING FOR
POSTRETIREMENT BENEFITS OTHER THAN PENSIONS, and Statement of Financial
Accounting Standards No. 109, ACCOUNTING FOR INCOME TAXES, in 1993.
KPMG Peat Marwick
March 1, 1994
<PAGE>
NASH FINCH COMPANY AND SUBSIDIARIES
Consolidated Balance Sheets
<TABLE>
<CAPTION>
January 1, 1994 and January 2, 1993
(In thousands, except per share amounts)
ASSETS 1993 1992
------------------------------------------------------------------------------
<S> <C> <C>
Current assets:
Cash on hand $ 890 789
Accounts and notes receivable, net 95,952 97,292
Inventories 186,637 205,024
Prepaid expenses 7,391 6,668
Deferred tax assets 4,055 397
------- -------
Total current assets 294,925 310,170
Investments at net equity 7,137 6,108
Notes receivable, noncurrent 20,187 17,275
Property, plant and equipment:
Land 26,652 24,417
Buildings and improvements 105,650 100,772
Furniture, fixtures, and equipment 209,172 199,420
Leasehold improvements 26,016 25,596
Construction in progress 5,914 5,654
Assets under capitalized leases 9,210 3,759
------- -------
382,614 359,618
Less accumulated depreciation and amortization (196,350) (184,340)
------- -------
Net property, plant and equipment 186,264 175,278
------- -------
Intangible assets, net 9,512 2,854
Other assets 3,629 1,930
------- -------
Total assets $ 521,654 513,615
------- -------
------- -------
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
<TABLE>
<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY 1993 1992
------------------------------------------------------------------------------
<S> <C> <C>
Current liabilities:
Outstanding checks, net of cash in banks $ 14,301 19,890
Short-term debt payable to banks 38,300 47,500
Current maturities of long-term debt and
capitalized lease obligations 3,980 3,822
Accounts payable 119,970 113,732
Accrued expenses 27,032 21,647
Income taxes 4,315 7,100
Other current liabilities 7,123 --
------- -------
Total current liabilities 215,021 213,691
Long-term debt 89,811 92,114
Capitalized lease obligations 8,076 2,031
Deferred compensation 9,065 9,638
Other 417 4,937
Stockholders' equity:
Preferred stock - no par value,
Authorized 500 shares; none issued -- --
Common stock of $1.66-2/3 par value. Authorized
25,000 shares; issued 11,224 shares 18,706 18,706
Additional paid-in capital 11,954 11,944
Retained earnings 171,670 163,624
------- -------
202,330 194,274
Less cost of 351 shares and 352 shares of
common stock in treasury, respectively (3,066) (3,070)
------- -------
Total stockholders' equity 199,264 191,204
Commitments (Notes 5, 8 and 9) -- --
------- -------
Total liabilities and stockholders' equity $ 521,654 513,615
------- -------
------- -------
</TABLE>
<PAGE>
NASH FINCH COMPANY AND SUBSIDIARIES
Consolidated Statements of Earnings
<TABLE>
<CAPTION>
Fiscal years ended January 1, 1994,
January 2, 1993 and December 28, 1991 1993 1992 1991
(In thousands, except per share amounts) (52 weeks) (53 weeks) (52 weeks)
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
Income:
Net sales $ 2,679,410 2,474,013 2,307,410
Other revenues 44,125 41,425 35,868
--------- --------- ---------
Total revenues 2,723,535 2,515,438 2,343,278
Cost and expenses:
Cost of sales 2,325,249 2,147,845 1,997,462
Selling, general and
administrative, and other
operating expenses 332,349 298,663 279,933
Depreciation and amortization 29,145 27,038 26,124
Interest expense 10,114 9,294 8,966
--------- --------- ---------
Total costs and expenses 2,696,857 2,482,840 2,312,485
Earnings before income taxes 26,678 32,598 30,793
Income taxes 10,804 12,530 11,738
--------- --------- ---------
Net earnings $ 15,874 20,068 19,055
--------- --------- ---------
--------- --------- ---------
Weighted average number of
common shares outstanding 10,872 10,872 10,871
--------- --------- ---------
--------- --------- ---------
Earnings per share $ 1.46 1.85 1.75
--------- --------- ---------
--------- --------- ---------
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
NASH FINCH COMPANY AND SUBSIDIARIES
Consolidated Statements of Stockholders' Equity
<TABLE>
<CAPTION>
Fiscal years ended January 1, 1994,
January 2, 1993 and December 28, 1991
(In thousands, except per share amounts) Common Stock Additional Treasury Stock Total
--------------------- paid-in Retained -------------------- stockholder'
Shares Amount capital earnings Shares Amount equity
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at December 29, 1990 11,224 $ 18,706 11,929 139,829 (354) $ (3,076) 167,388
Net earnings -- -- -- 19,055 -- -- 19,055
Dividend declared of $.70 per share -- -- -- (7,610) -- -- (7,610)
Treasury stock issued upon exercise of
options and other insignificant items -- -- 9 -- 1 4 13
------ ------ ------ ------- ----- ------- -------
Balance at December 28, 1991 11,224 18,706 11,938 151,274 (353) (3,072) 178,846
Net earnings -- -- -- 20,068 -- -- 20,068
Dividend declared of $.71 per share -- -- -- (7,718) -- -- (7,718)
Treasury stock issued upon exercise of
options and other insignificant items -- -- 6 -- 1 2 8
------ ------ ------ ------- ----- ------- -------
Balance at January 2, 1993 11,224 18,706 11,944 163,624 (352) (3,070) 191,204
Net earnings -- -- -- 15,874 15,874
Dividend declared of $.72 per share -- -- -- (7,828) -- -- (7,828)
Treasury stock issued upon exercise of
options and other insignificant items -- -- 10 -- 1 4 14
------ ------ ------ ------- ----- ------- -------
Balance at January 1, 1994 11,224 $ 18,706 11,954 171,670 (351) $ (3,066) 199,264
------ ------ ------ ------- ----- ------- -------
------ ------ ------ ------- ----- ------- -------
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
NASH FINCH COMPANY AND SUBSIDIARIES
Consolidated Statements of Cash Flows
<TABLE>
<CAPTION>
Fiscal years ended January 1, 1994,
January 2, 1993 and December 28, 1991 1993 1992 1991
(In thousands) (52 weeks) (53 weeks) (52 weeks)
---------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Cash flows from operating activities:
Net earnings $ 15,874 20,068 19,055
Adjustments to reconcile net earnings to net cash
provided by operating activites:
Depreciation and amortization 29,145 27,038 26,124
Provision for bad debts 10,146 3,668 1,430
Recovery from losses on closed lease locations (499) (847) (1,012)
Deferred income taxes (4,395) (2,835) (411)
Deferred compensation (573) 129 17
Earnings of equity investments (1,534) (965) (618)
Other 65 137 (2)
Changes in current assets and liabilities:
Accounts and notes receivable (161) (5,676) (11,476)
Inventories 26,464 (22,242) 5,752
Prepaid expenses (411) (1,474) 409
Accounts payable 6,238 6,755 27
Accrued expenses 5,385 2,631 (2,698)
Income taxes (2,785) 4,429 (890)
-------- -------- --------
Net cash provided by operating activities $ 82,959 30,816 35,707
-------- -------- --------
Cash flows from investing activities:
Dividends received 506 435 510
Disposals of property, plant and equipment 13,435 8,091 4,244
Additions to property, plant and equipment
excluding capital leases (36,382) (42,991) (36,836)
Businesses acquired (27,087) (40,041) --
Investment in an unconsolidated company -- (3,000) --
Loans to customers (15,942) (22,977) (10,264)
Payments from customers on loans 8,286 7,500 7,287
Loans sold including current portion -- 22,847 --
Other (261) (37) 65
-------- -------- --------
Net cash used for investing activities $ (57,445) (70,173) (34,994)
-------- -------- --------
Cash flows from financing activities:
Dividends paid (7,828) (7,718) (7,610)
Proceeds (payments) of short-term debt (9,200) 39,900 (4,300)
Proceeds from long-term debt -- 25,000 15,000
Payments of long-term debt (2,352) (15,895) (7,528)
Payments of capitalized lease obligations (458) (174) (352)
Other 14 8 13
-------- -------- --------
Net cash (used for) provided by
financing activities (19,824) 41,121 (4,777)
-------- -------- --------
Net increase (decrease) in cash $ 5,690 1,764 (4,064)
-------- -------- --------
-------- -------- --------
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
NASH FINCH COMPANY AND SUBSIDIARIES
Notes to Consolidated
Financial Statements
(1) ACCOUNTING POLICIES
Fiscal Year
The Company's fiscal year ends on the Saturday nearest to December 31.
Fiscal year 1993 was a 52-week year; 1992 was a 53-week year while 1991 was 52
weeks.
Principles of Consolidation
The accompanying financial statements include the accounts of Nash Finch
Company (the Company), its majority-owned subsidiaries and Nash Finch
Company's share of net earnings or losses of 50%-owned companies. All material
intercompany accounts and transactions have been eliminated in the consolidated
financial statements. Certain reclassifications were made to prior year amounts
to conform with the fiscal 1993 presentation.
Cash and Cash Equivalents
In the accompanying financial statements, freely transferable cash in
banks has been netted for presentation purposes against checks outstanding that
have been drawn on other bank accounts. For purposes of the statements of cash
flows, cash and cash equivalents include cash on hand, short-term investments
with original maturities of three months or less, and outstanding checks, net of
cash in banks.
Inventories
Inventories are stated at the lower of cost or market. At January 1, 1994
and January 2, 1993, approximately 91% of the Company's inventories are valued
on the last-in, first-out (LIFO) method. During fiscal 1993 the Company
recorded a LIFO credit of $2.0 million primarily due to an overall reduction in
certain product costs during the year. The remaining inventories are valued on
the first-in, first-out (FIFO) method. If the FIFO method of accounting for
inventories had been used, inventories would have been $42.5 million and $44.5
million higher at January 1, 1994 and January 2, 1993, respectively.
Property, Plant and Equipment
Property, plant and equipment are stated at cost. Assets under capitalized
leases are recorded at the present value of future lease payments or fair market
value, whichever is lower. Expenditures which improve or extend the life of the
respective assets are capitalized while maintenance and repairs are expensed as
incurred.
<PAGE>
(1) ACCOUNTING POLICIES (CONTINUED)
Intangible Assets
Intangible assets consist primarily of covenants not to compete and
goodwill, and are carried at cost less accumulated amortization. Costs are
amortized over the estimated useful lives of the related assets ranging from 2-
20 years. Amortization expense charged to operations for fiscal years ended
January 1, 1994, January 2, 1993 and December 28, 1991 was $1.3 million, $.2
million and $.3 million, respectively. The accumulated amortization of
intangible assets was $2.8 million and $1.4 million at January 1, 1994 and
January 2, 1993, respectively.
Depreciation and Amortization
Property, plant and equipment are depreciated on a straight-line basis over
the estimated useful lives of the assets. Leasehold improvements and capitalized
leases are amortized to expense on a straight-line basis over the term of the
lease.
Income Taxes
In February 1992, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 109, ACCOUNTING FOR INCOME TAXES.
Statement 109 requires a change from the deferred method of accounting for
income taxes of APB Opinion 11 to the asset and liability method. Under the
asset and liability method of Statement 109, deferred tax assets and liabilities
are recognized for the future tax consequences attributable to differences
between the financial statement carrying amounts of existing assets and
liabilities and their respective tax bases. Deferred tax assets and liabilities
are measured using enacted tax rates expected to apply to taxable income in the
years in which those temporary differences are expected to be recovered or
settled. Under Statement 109, the effect on deferred tax assets and liabilities
of a change in tax rates is recognized in income in the period that includes the
enactment date.
The Company adopted Statement 109 in 1993 and determined that the cumulative
effect on prior years earnings was not material.
Earnings per Share
Earnings per share are computed by dividing net earnings by the weighted
average number of common shares outstanding during each year. Options granted
under the Company's stock option plans are considered common stock equivalents
but have been excluded from the computation since the effect is not material.
<PAGE>
(2) ACQUISITIONS
On June 21, 1993, the Company acquired sixteen supermarket stores (the
Easter Stores) from Easter Enterprises, Inc. for approximately $27.0 million.
The acquisition has been accounted for by the purchase method and, accordingly,
the results of operations of the Easter Stores are included in the accompanying
consolidated financial statements from the date of the acquisition. Included in
the purchase price is a covenent not to compete valued at $3.0 million. The
purchase price resulted in an excess of acquisition costs over net assets
acquired of approximately $3.6 million. The noncompete convenant and goodwill
are being amortized on a straight-line basis over a period of five years and
fifteen years, respectively.
On January 26, 1992, the Company acquired Tidewater Wholesale Grocery
located in Chesapeake, Virginia, from Provigo Corp., a wholly-owned subsidiary
of Provigo, Inc., for approximately $14.3 million. The results of Tidewater's
operations are included in the accompanying consolidated financial statements
from the date of acquisition.
On December 31, 1992 the Company completed two acquisitions. It purchased
the assets of a military wholesale distribution business from B. Green &
Company, Inc. in Baltimore, Maryland for approximately $20 million. In addition,
it acquired the operating assets of five supermarkets in Central Wisconsin from
a former customer for approximately $5.7 million.
The following unaudited pro forma summary for fiscal years 1993 and 1992
combines the consolidated results of the Company, the Easter Stores and the
military distribution business as if the acquisitions had occurred at the
beginning of the 1993 and 1992 fiscal years.
The unaudited pro forma summary is not necessarily indicative either of results
of operations that would have occurred had the purchase been made during the
periods presented, or of future results of operations of the combined companies
(in thousands, except per share amounts).
<TABLE>
<CAPTION>
1993 1992
---------- ----------
<S> <C> <C>
Net sales $2,781,987 2,775,603
Net earnings 16,605 21,985
Earnings per share 1.53 2.02
</TABLE>
<PAGE>
(3) ACCOUNTS AND NOTES RECEIVABLE
Accounts and notes receivable at the end of fiscal years 1993 and 1992 are
comprised of the following components
(in thousands):
<TABLE>
<CAPTION>
1993 1992
--------- ---------
<S> <C> <C>
Customer notes receivable $ 4,301 3,040
Customer accounts receivable 80,370 81,622
Other receivables 12,983 13,340
Allowance for doubtful accounts (1,702) (710)
--------- ---------
Net current accounts and
notes receivable $ 95,952 97,292
--------- ---------
--------- ---------
<CAPTION>
1993 1992
--------- ---------
<S> <C> <C>
Noncurrent notes receivable $ 27,007 20,119
Allowance for doubtful accounts (6,820) (2,844)
--------- ---------
Net non-current notes receivable $ 20,187 17,275
--------- ---------
--------- ---------
</TABLE>
Operating results include bad debt expense totaling $10.1 million, $3.7
million, and $1.4 million during fiscal years 1993, 1992 and 1991, respectively.
On April 2, 1992, the Company sold customer notes totaling $22.8 million.
The notes, which have maturities through the year 2000, were sold at face value
with limited recourse as to certain notes. The Company is responsible for
collection of the notes and remits the principal plus a floating rate of
interest to the purchaser on a monthly basis. Proceeds from the sale of the
notes receivable were used to pay off short-term bank debt.
The remaining balances of such sold notes receivable totaled $11.8 million
and $17.9 million at January 1, 1994 and January 2, 1993, respectively. The
Company is contingently liable should these notes become uncollectible. The
reserve for contingent losses on sold notes is $7.1 million at January 1, 1994
and $4.0 million at January 2, 1993, respectively. At January 1, 1994 this
reserve is classified as an other current liability since it relates entirely to
the transaction described in Note 13.
Substantially all notes receivable are based on floating interest rates
which adjust to changes in market rates. As a result, the carrying value of
notes receivable approximates market value.
(4) LINES OF CREDIT AND OUTSTANDING CHECKS
Formal and informal lines of credit are maintained at various banks.
Generally, banks are compensated through fees on used and unused lines of
credit. At January 1, 1994 unused lines of credit amount to $26.7 million.
<PAGE>
(5) LONG-TERM DEBT
Long-term debt at the end of the fiscal years 1993 and 1992 is summarized
as follows (in thousands):
<TABLE>
<CAPTION>
1993 1992
------ -------
<S> <C> <C>
Industrial development bonds,
3.8% to 11% due in annual
installments through 2006 $ 7,175 7,370
Term loans, 7.5% to 9.9%
due in semi-annual
installments through 2006 76,000 77,000
Notes payable and mortgage
notes, 8% to 13.5% due in various
installments through 2006 10,154 11,224
------ -------
93,329 95,594
Less current maturities 3,518 3,480
------ -------
$ 89,811 92,114
------ -------
------ -------
</TABLE>
During the first quarter of fiscal 1993, the Company finalized a $25
million long-term credit facility with two insurance companies. The proceeds of
this long-term loan were used to replace $25 million outstanding on the short-
term lines of credit with banks. Accordingly, this amount was classified as
long-term debt at January 2, 1993. Under the new loan, interest is fixed at
7.5%.
At January 1, 1994, land, buildings, and other assets pledged to secure
outstanding mortgage notes and obligations under issues of industrial
development bonds have a depreciated cost of approximately $8.3 million and $6.7
million, respectively.
Aggregate annual maturities of long-term debt for the five fiscal years
after January 1, 1994 are as follows (in thousands):
<TABLE>
<S> <C>
1994 $ 3,518
1995 5,369
1996 14,353
1997 6,415
1998 and thereafter 63,674
</TABLE>
Interest paid was $10.1 million, $9.3 million, and $9.0 million, for the
fiscal years 1993, 1992 and 1991, respectively.
Based on borrowing rates currently available to the Company for long-term
financing with similar terms and average maturities, the fair value of long-term
debt utilizing discounted cash flows is $ 98.5 million.
<PAGE>
(6) INCOME TAXES
As discussed in Note 1, the Company adopted Statement 109 as of January 3,
1993. The effect of this change in accounting for income taxes was not material.
Prior years' financial statements have not been restated to apply the provisions
of Statement 109.
Income tax expense for fiscal years 1993, 1992 and 1991 is made up of the
following components (in thousands):
<TABLE>
<CAPTION>
1993 1992 1991
------- ------ -----
<S> <C> <C> <C>
Current:
U.S. Federal $12,334 12,500 9,163
State and local 2,865 2,796 1,912
Deferred:
U.S. Federal (3,558) (2,324) 522
State and local (837) (442) 141
------- ------ -----
Total $10,804 12,530 11,738
------- ------ -----
------- ------ -----
</TABLE>
Deferred income tax expense (benefit) results from
timing differences in the recognition of revenue and expense
for tax and financial statement purposes. The source of
these differences and the tax effect of each for fiscal
years 1992 and 1991 are as follows (in thousands):
<TABLE>
<CAPTION>
1992 1991
------ -----
<S> <C> <C>
Excess of tax over
financial statement
depreciation $ (795) (768)
Provision for deferred
compensation (50) (7)
Provision for losses at
closed locations 398 524
Provision for bad debts (1,122) (237)
Provision for health
care claims (582) 1,151
Inventory capitalization (348) 9
Other, net (267) (9)
------ -----
$(2,766) 663
------ -----
------ -----
</TABLE>
Total income tax expense represents effective tax rates of 40.5%,
38.4% and 38.1%, for the fiscal years 1993, 1992 and 1991, respectively. The
reasons for differences compared with the U.S. federal statutory tax rate
(expressed as a percentage of pretax income) are as follows:
<PAGE>
(6) INCOME TAXES (CONTINUED)
<TABLE>
<CAPTION>
1993 1992 1991
----- ----- -----
<S> <C> <C> <C>
U.S. federal statutory
tax rate 35.0% 34.0% 34.0%
Items affecting federal
income tax rate:
State and local taxes,
net of federal income
tax benefit 4.9 4.8 4.4
Other, net .6 (.4) (.3)
----- ----- -----
Effective tax rate 40.5% 38.4% 38.1%
----- ----- -----
----- ----- -----
</TABLE>
Income taxes paid were $18.0 million, $11.1 million and $13.1 million
during fiscal years 1993, 1992 and 1991, respectively.
The tax effects of temporary differences that give rise to significant portions
of the deferred tax assets and deferred tax liabilities at January 1, 1994 are
presented as follows (in thousands):
<TABLE>
<CAPTION>
Deferred tax assets:
<S> <C>
Accounts and notes receivable,
principally due to allowance for
doubtful accounts $ 6,235
Inventories, principally due to
additional costs inventoried for
tax purposes pursuant to the
Tax Reform Act of 1986 1,653
Health care claims, principally due
to accrual for financial
reporting purposes 345
Deferred compensation, principally due
to accrual for financial reporting purposes 3,608
Compensated absences, principally due
to accrual for financial reporting purposes 1,124
Compensation and casualty loss, principally
due to accrual for financial reporting
purposes 1,407
Other 1,372
------
Total gross deferred tax assets 15,744
Less valuation allowance --
------
Net deferred tax assets 15,744
------
</TABLE>
<PAGE>
(6) INCOME TAXES (CONTINUED)
Deferred tax liabilities:
Plant and equipment, principally due
to differences in depreciation 7,255
Inventories, principally due to
differences in LIFO basis 2,724
Other 569
-----
Total gross deferred tax liabilities 10,548
-----
Net deferred tax asset $ 5,196
-----
-----
Since it is more likely than not that the deferred tax asset of $15,744
will be principally realized through carry back to taxable income in prior
years, in future reversals of existing taxable temporary differences, and, to a
lesser extent, future taxable income and tax planning strategies, the Company
has determined that it is not required to establish a valuation allowance for
the deferred tax asset as required by Statement 109.
<PAGE>
(7) STOCK RIGHTS AND OPTIONS
Under the Company's 1986 Stockholder Rights Plan, as amended January 18,
1990, one right is attached to each outstanding share of common stock. Each
right entitles the holder to purchase, under certain conditions, one-half share
of common stock at a price of $28.75 ($57.50 per full share). The rights are not
yet exercisable and no separate rights certificates have been distributed. All
rights expire on March 31, 1996.
The rights become exercisable 20 days after a "flip-in event" has occurred
or 10 business days (subject to extension) after a person or group makes a
tender offer for 15% or more of the Company's outstanding common stock. A
flip-in event would occur if a person or group acquires (1) 15% of the Company's
outstanding common stock, or (2) an ownership level set by the Board of
Directors at less than 15% if the person or group is deemed by the Board of
Directors to have interests adverse to those of the Company and its
stockholders. The rights may be redeemed by the Company at any time prior to the
occurrence of a flip-in event at $.01 per right. The power to redeem may be
reinstated within 20 days after a flip-in event occurs if the cause of the
occurrence is removed.
Upon the rights becoming exercisable, subject to certain adjustments or
alternatives, each right would entitle the holder (other than the acquiring
person or group, whose rights become void) to purchase a number of shares of the
Company's common stock having a market value of twice the exercise price of the
right. If the Company is involved in a merger or other business combination, or
certain other events occur, each right would entitle the holder to purchase
common shares of the acquiring company having a market value of twice the
exercise price of the right. Within 30 days after the rights become exercisable
following a flip-in event, the Board of Directors may exchange shares of Company
common stock or cash or other property for exercisable rights.
The Company provides a stock incentive plan for officers and key employees
which provides for the granting of stock options and restricted stock awards.
Under the terms of the plan, stock options are granted at 100% of fair market
value at dates of grant and are exercisable over a maximum of five years.
Restricted stock awards are subject to certain restrictions on transferability
that lapse after specified employment periods. At January 1, 1994, options to
purchase 1,500 shares of common stock of the Company, at an average price of
$23.00 per share, have been granted and are outstanding. No restricted stock
awards have been granted. An additional 243,796 shares are reserved for the
granting of future stock options and restricted stock awards.
<PAGE>
(7) STOCK RIGHTS AND OPTIONS (CONTINUED)
Changes in outstanding options during the three fiscal years ended January
1, 1994 are summarized as follows (in thousands):
<TABLE>
<CAPTION>
Options
Options currently
outstanding exercisable
----------------- ------------------
Option Option
Shares price Shares price
- ----------------------------------------------------------------
<S> <C> <C> <C> <C>
Balance at
December 29,
1990 166 $ 4,213 41 $ 1,032
Options
granted or
becoming
exercisable:
1991 -- -- 42 1,076
1992 -- -- 42 1,057
1993 -- -- 37 930
Options
exercised:
1991 -- -- -- --
1992 -- -- -- --
1993 -- -- -- --
Options
lapsed:
1991 (20) (507) (20) (507)
1992 (19) (477) (19) (477)
1993 (106) (2,678) (106) (2,678)
Options
canceled:
1991 (7) (188) (4) (106)
1992 (10) (258) (9) (233)
1993 (3) (70) (3) (70)
Balance at
January 1,
--- ---- --- -----
1994 1 $ 35 1 $ 24
--- ---- --- -----
--- ---- --- -----
</TABLE>
<PAGE>
(8) LEASE AND OTHER COMMITMENTS
A substantial portion of the store and warehouse properties of the Company
are leased. The following table summarizes assets under capitalized leases (in
thousands):
<TABLE>
<CAPTION>
1993 1992
------ ------
<S> <C> <C>
Buildings and improvements $9,210 3,759
Less accumulated amortization (3,537) (3,228)
------ ------
Net assets under capitalized
leases $5,673 531
------ ------
------ ------
</TABLE>
At January 1, 1994, future minimum rental payments under noncancelable
leases and subleases are as follows (in thousands):
<TABLE>
<CAPTION>
Operating Capital
leases leases
--------- -------
<S> <C> <C>
1994 $ 16,307 1,314
1995 13,848 1,280
1996 12,934 1,188
1997 11,115 1,148
1998- later years 71,208 12,751
--------- -------
Total minimum lease payments (a) $125,412 17,681
---------
---------
Less imputed interest
(rates ranging from 7.9% to 11.5%) (9,143)
-------
Present value of net
minimum lease payments 8,538
Less current maturities (462)
-------
Capitalized lease obligations $ 8,076
-------
-------
<FN>
(a) Future minimum payments for operating and capital leases have not been
reduced by minimum sublease rentals receivable under noncancelable
subleases. Total future minimum sublease rentals related to operating and
capital lease obligations as of January 1, 1994 are $53 million and $5
million, respectively.
</TABLE>
<PAGE>
(8) LEASE AND OTHER COMMITMENTS (CONTINUED)
Total rental expense under operating leases for fiscal years 1993, 1992 and
1991 is as follows (in thousands):
<TABLE>
<CAPTION>
1993 1992 1991
------ ------ ------
<S> <C> <C> <C>
Total rentals $27,706 25,384 24,323
Less real
estate taxes,
insurance and
other occupancy
costs (2,312) (2,236) (2,299)
------ ------ ------
Minimum rentals 25,394 23,148 22,024
Contingent rentals 248 394 414
Sublease rentals (7,060) (7,107) (7,264)
------ ------ ------
$18,582 16,435 15,174
------ ------ ------
------ ------ ------
</TABLE>
Most of the Company's leases provide that the Company pay real estate
taxes, insurance and other occupancy costs applicable to the leased premises.
Contingent rentals are determined on the basis of a percentage of sales in
excess of stipulated minimums for certain store facilities. Operating leases
often contain renewal options. Management expects that, in the normal course of
business, leases that expire will be renewed or replaced by other leases.
The Company has guaranteed certain lease and promissory note obligations of
customers aggregating approximately $19 million.
(9) CONCENTRATION OF CREDIT RISK
The Company provides financial assistance in the form of secured loans to
some of its affiliated independent retailers for inventories, store fixtures and
equipment, working capital and store improvements. Loans are secured by liens on
inventory or equipment or both, by personal guarantees and by other types of
collateral. In addition, the Company guarantees lease and promissory note
obligations of customers.
As of January 1, 1994, the Company has retained the credit risk associated
with outstanding secured loans with a customer which were sold in April 1992.
These loans and the Company's guarantee of the customer's bank debt total $11.4
million at January 1, 1994 (See Note 13).
As of January 1, 1994, the Company has guaranteed outstanding promissory
note obligations of one customer in the amount of $7.6 million and of another
customer in the amount of $4.0 million.
<PAGE>
(9) CONCENTRATION OF CREDIT RISK (CONTINUED)
In the normal course of business, the Company's produce marketing operation
in California makes cash advances to produce growers during various product
growing seasons, to fund production costs. Such advances are repayable at the
end of the respective growing seasons. Unpaid advances are generally secured by
liens on real estate. At January 1, 1994, $ 7.2 million in advances are
outstanding.
The Company establishes allowances for doubtful accounts based upon the
credit risk of specific customers, historical trends and other information.
Management believes that adequate provisions have been made for any doubtful
accounts.
(10) EMPLOYEE BENEFIT PLANS
The Company has a profit sharing plan covering substantially all employees
meeting specified requirements. Contributions, determined by the Board of
Directors, are made to a noncontributory profit sharing trust based on profit
performances. Profit sharing expense for 1993, 1992 and 1991 was $3.6 million,
$4.0 million and $3.8 million, respectively.
Certain officers and key employees are participants in a deferred
compensation plan providing fixed benefits payable in equal monthly installments
upon retirement. Annual increments to the deferred compensation plan are charged
to earnings.
(11) POSTRETIREMENT HEALTH CARE BENEFITS
The Company provides certain health care benefits for retired employees.
Substantially all of the Company's employees become eligible for those benefits
when they reach normal retirement age and have a minimum of 15 years of service
with the Company. Prior to 1993, the cost of retiree health care benefits was
recognized as expense as claims were paid. Claims paid were $68,000 and
$123,000, in fiscal 1992 and 1991, respectively.
During the fourth quarter of 1993, the Company adopted Statement of
Financial Accounting Standards No. 106, EMPLOYER'S ACCOUNTING FOR POSTRETIREMENT
BENEFITS OTHER THAN PENSIONS. SFAS 106 requires that costs of providing
postretirement benefits be expensed over an employee's service term and not on a
pay-as-you-go basis. The Company has adopted SFAS 106 on a prospective basis,
electing to amortize the liability of $4.9 million over the next twenty years.
<PAGE>
The periodic postretirement benefit cost for 1993 under Statement 106 was as
follows (in thousands):
<TABLE>
<CAPTION>
1993
-----
<S> <C>
Service costs $250
Interest costs 381
Amortization of unrecognized
transition obligation 248
-----
Net postretirement costs $879
-----
-----
</TABLE>
The actuarial present value of benefit obligations at January 1, 1994 is as
follows (in thousands):
<TABLE>
<S> <C>
Retirees eligible for benefits $1,743
Active employees fully eligible 470
Active employees not fully eligible 2,491
------
$4,704
------
------
</TABLE>
The assumed annual rate of future increases in per capita cost of health care
benefits was 15.0% in 1993, declining 1% per year to 9.0% in 1999 and .5% per
year to 6.5% in 2004 and thereafter. Increasing the health care cost trend by 1%
in each year would increase the accumulated benefit obligation by $227,646 at
January 1, 1994 and the service and interest costs by $39,334 for 1993. The
discount rate used in determining the accumulated benefit obligation was 7.5%.
(12) SEGMENT INFORMATION
The Company and its subsidiaries sell and distribute food and nonfood
products that are typically found in supermarkets.
The Company's wholesale distribution segment sells to independently owned
retail food stores and institutional customers while the retail distribution
segment sells directly to the consumer. Produce marketing includes farming,
packing and marketing operations.
Operating profit is net sales and revenues, less operating expenses. In
computing operating profit, none of the following items have been added or
deducted: general corporate expenses, interest expense, interest income, income
taxes and equity in income from equity-owned companies. Wholesale distribution
operating profits on sales through company- owned stores have been allocated to
the retail segment.
Identifiable assets are those used exclusively by that industry segment or
an allocated portion of assets used jointly by two industry segments. Corporate
assets are principally cash and cash equivalents, notes receivable, corporate
office facilities and equipment.
<PAGE>
(12) SEGMENT INFORMATION (CONTINUED)
<TABLE>
<CAPTION>
Major segments of business
(in thousands)
1993 1992 1991
- ---------------------------------------------------------------
<S> <C> <C> <C>
Net sales and other
operating revenues:
Wholesale distribution $1,836,405 1,673,955 1,517,039
Retail distribution 841,664 801,101 785,073
Produce marketing
and other 37,718 34,408 35,448
--------- --------- ---------
Total net sales and
other operating
revenues $2,715,787 2,509,464 2,337,560
--------- --------- ---------
--------- --------- ---------
Operating profit:
Wholesale distribution $ 23,697 28,730 28,975
Retail distribution 7,704 9,302 5,067
Produce marketing
and other 2,786 1,386 2,211
--------- --------- ---------
Total operating
profit 34,187 39,418 36,253
--------- --------- ---------
Interest income 2,604 2,474 3,506
Interest expense (10,113) (9,294) (8,966)
--------- --------- ---------
Earnings before
income taxes $ 26,678 32,598 30,793
--------- --------- ---------
--------- --------- ---------
Identifiable assets:
Wholesale distribution $ 237,554 245,520 197,011
Retail distribution 195,454 177,764 163,302
Produce marketing
and other 37,394 36,475 32,751
Corporate 51,252 53,856 36,584
--------- --------- ---------
$ 521,654 513,615 429,648
--------- --------- ---------
--------- --------- ---------
Capital Expenditures:
Wholesale distribution $ 9,199 10,585 9,051
Retail distribution 18,947 22,224 22,991
Produce marketing
and other 5,564 2,101 1,957
Corporate 2,672 8,081 2,837
--------- --------- ---------
$ 36,382 42,991 36,836
--------- --------- ---------
--------- --------- ---------
Depreciation and
amortization:
Wholesale distribution $ 11,641 11,281 11,056
Retail distribution 14,093 12,675 12,616
Produce marketing
and other 1,396 1,230 1,137
Corporate 2,015 1,852 1,315
--------- --------- ---------
$ 29,145 27,038 26,124
--------- --------- ---------
--------- --------- ---------
</TABLE>
<PAGE>
(13) SUBSEQUENT EVENT
Effective January 31, 1994, the Company acquired the assets of Food Folks,
Inc., a former customer with twenty- three stores located in the Carolina's.
Under the terms of the agreement, assets with a fair market value of
approximately $12.4 million will be transferred to the Company in exchange for
$1.8 million in cash, the assumption of liabilities of $3.2 million and the
forgiveness of $7.4 million in debt, sold with limited recourse (see Note 3) net
of a bad debt reserve established by the Company. This transaction will be
accounted for as a troubled debt restructuring in fiscal 1994.
<PAGE>
NASH FINCH COMPANY
Consolidated Summary of Operations
<TABLE>
<CAPTION>
Eleven years ended January 1, 1994 (not covered by Independent Auditors' Report)
(Dollar amounts in thousands except
per share amounts) 1993 1992 1991 1990 1989 1988
(52 weeks) (53 weeks) (52 weeks) (52 weeks) (52 weeks) (52 weeks)
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Sales and revenues $ 2,715,787 2,509,464 2,337,560 2,369,054 2,219,451 2,091,822
Other income 7,748 5,974 5,718 5,799 4,312 6,012
---------- --------- --------- --------- --------- ---------
Total sales, revenues and other
income 2,723,535 2,515,438 2,343,278 2,374,853 2,223,763 2,097,834
Cost of sales 2,325,249 2,147,845 1,997,462 2,036,335 1,904,041 1,807,448
Selling, general, administrative,
and other operating expenses,
including warehousing and
transportation expenses 328,703 294,700 276,144 271,735 264,024 230,221
Interest expense 10,114 9,294 8,966 8,670 8,277 8,106
Depreciation and amortization 29,145 27,038 26,124 25,551 23,170 20,193
Profit sharing contribution 3,646 3,963 3,789 3,603 3,089 2,832
Provision for income taxes 10,804 12,530 11,738 11,129 8,010 10,859
---------- --------- --------- --------- --------- ---------
Net earnings $ 15,874 20,068 19,055 17,830 13,152 18,175
---------- --------- --------- --------- --------- ---------
---------- --------- --------- --------- --------- ---------
Earnings per share: $ 1.46 1.85 1.75 1.64 1.21 1.67
---------- --------- --------- --------- --------- ---------
---------- --------- --------- --------- --------- ---------
Cash dividends declared
per common share (2) $ .72 .71 .70 .69 .67 .65
---------- --------- --------- --------- --------- ---------
---------- --------- --------- --------- --------- ---------
Average number of common shares
outstanding during period
(in thousands) (2) 10,872 10,872 10,871 10,870 10,868 10,881
---------- --------- --------- --------- --------- ---------
---------- --------- --------- --------- --------- ---------
Pre-tax earnings as a percent
of sales and revenues .98 1.30 1.31 1.22 .95 1.38
Net earnings as a percent of
sales and revenues .58 .80 .81 .75 .59 .87
Effective income tax rate 40.5 38.4 38.1 38.4 37.9 37.4
Current assets $ 294,925 310,170 239,850 234,121 212,264 219,956
Current liabilities $ 215,021 213,691 154,993 159,439 128,159 153,068
Net working capital $ 79,904 96,479 84,857 74,682 84,105 66,888
Ratio of current assets to
current liabilities 1.37 1.45 1.55 1.47 1.66 1.44
Total assets $ 521,654 513,615 429,648 416,233 380,771 388,269
Capital expenditures $ 36,382 42,991 36,836 36,129 34,635 52,019
Long-term obligations
(long-term debt and
capitalized lease obligations) $ 97,887 94,145 82,532 74,333 77,950 66,216
<CAPTION>
1987 1986 1985 1984 1983
(52 weeks) (53 weeks) (52 weeks) (52 weeks) (52 weeks)
---------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Sales and revenues $ 1,938,758 1,573,717 1,323,294 1,235,327 1,140,599
Other income 4,590 3,640 4,106 2,992 2,389
---------- --------- --------- --------- ---------
Total sales, revenues and other
income 1,943,348 1,577,357 1,327,400 1,238,319 1,142,988
Cost of sales 1,682,667 1,360,537 1,142,464 1,070,226 986,402
Selling, general, administrative,
and other operating expenses,
including warehousing and
transportation expenses 198,553 165,713 140,798 128,653 120,586
Interest expense 8,087 6,497 5,732 4,199 3,428
Depreciation and amortization 18,389 16,249 14,279 12,034 10,933
Profit sharing contribution 2,734 2,349 2,101 2,038 1,934
Provision for income taxes 14,416 12,178 10,020 9,483 8,638
---------- --------- --------- --------- ---------
Net earnings $ 18,502 13,834 12,006 11,686 11,067
---------- --------- --------- --------- ---------
---------- --------- --------- --------- ---------
Earnings per share: $ 1.75 1.35 1.18 1.15 1.09
---------- --------- --------- --------- ---------
---------- --------- --------- --------- ---------
Cash dividends declared
per common share (2) $ .57 .52 .50 .49 .47
---------- --------- --------- --------- ---------
---------- --------- --------- --------- ---------
Average number of common shares
outstanding during period
(in thousands) (2) 10,576 10,244 10,196 10,179 10,155
---------- --------- --------- --------- ---------
---------- --------- --------- --------- ---------
Pre-tax earnings as a percent
of sales and revenues 1.69 1.65 1.66 1.71 1.72
Net earnings as a percent of
sales and revenues .95 .88 .90 .94 .97
Effective income tax rate 43.8 46.8 45.5 44.8 43.8
Current assets $ 209,305 182,676 125,051 117,772 105,481
Current liabilities $ 127,608 120,687 77,867 71,465 61,091
Net working capital $ 81,697 61,989 47,183 46,306 44,390
Ratio of current assets to
current liabilities 1.64 1.51 1.61 1.65 1.73
Total assets $ 352,187 313,908 239,767 223,024 195,070
Capital expenditures $ 29,680 26,969 25,438 26,954 18,055
Long-term obilgations
(long-term debt and
capitalized lease obligations) 66,988 61,588 42,250 42,639 34,214
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
Stockholders' equity $ 199,264 191,204 178,846 167,388 157,024 151,043
Stockholders' equity
per share, (1), (2) $ 18.33 17.59 16.45 15.40 14.45 13.90
Return on average stockholders'
equity $ 8.13 10.85 11.01 10.99 8.54 12.45
Number of common stockholders
of record at year-end 2,074 2,087 2,122 2,138 2,146 2,227
Common stock high price, (2), (3) 23 1/4 19 3/4 20 1/4 25 1/4 25 3/4 27 1/2
Common stock low price, (2), (3) 17 16 1/4 16 1/2 16 1/4 21 1/4 18
Stockholders' equity $ 140,850 116,416 107,384 100,094 93,405
Stockholders' equity
per share, (1), (2) $ 12.97 11.34 10.51 9.84 9.17
Return on average stockholders'
equity $ 14.38 12.36 11.57 12.08 12.29
Number of common stockholders
of record at year-end 2,234 1,829 1,868 1,881 1,807
Common stock high price, (2), (3) 26 1/2 19 1/8 15 5/8 9 1/4 11
Common stock low price, (2), (3) 14 3/4 14 3/4 9 1/4 6 3/4 4 1/2
<FN>
(1) Based on outstanding shares at year-end.
(2) Adjusted to reflect 3-for-2 stock split 1983 and 2-for-1 stock split 1987.
(3) High and low closing sale price. Prior to February 1985 high and low bid quotation.
</TABLE>
<PAGE>
SUBSIDIARIES OF NASH FINCH COMPANY(1)
Direct subsidiaries of Nash Finch Company (the voting stock of which is owned,
with respect to each subsidiary, 100 percent by Nash Finch Company):
Subsidiary State of
Corporation Incorporation
- ---------------------------------------- -------------
Nash-DeCamp Company California
Visalia, California
Piggly Wiggly Northland Corporation Minnesota
Edina, Minnesota
GTL Truck Lines, Inc. Nebraska
Gering, Nebraska
Thomas & Howard Company of Hickory, Inc. North Carolina
Newton, North Carolina
N-F Liquor, Inc.(2) Wisconsin
Appleton, Wisconsin
Direct subsidiaries of Nash Finch Company (the voting stock of which is owned,
with respect to each subsidiary, 66.6 percent by Nash Finch Company):
Subsidiary State of
Corporation Incorporation
- ---------------------------------------- -------------
Gillette Dairy of the Black Hills, Inc. South Dakota
Rapid City, South Dakota
Nebraska Dairies, Inc. Nebraska
Norfolk, Nebraska
Subsidiaries of Nash-DeCamp Company (the voting stock of which is owned, with
respect to each subsidiary, 100 percent by Nash-Decamp Company):
Subsidiary State of
Corporation Incorporation
- --------------------------------------- -------------
Randolph Marketing Company(3) California
Porterville, California
- --------------------
(1) These subsidiaries are included in the consolidated financial statements of
Nash Finch Company and subsidiaries.
(2) Merged into Nash Finch effective as of January 2, 1994.
(3) Merged into Nash-DeCamp Company effective as of January 2, 1994.
<PAGE>
Forrest Transportation Service, Inc. California
Visalia, California
Subsidiary of Thomas & Howard Company of Hickory, Inc. (the voting stock of
which is owned 100 percent by Thomas & Howard Company of Hickory, Inc.)
Subsidiary State of
Corporation Incorporation
- --------------------------------------- -------------
T & H Service Merchandisers, Inc. North Carolina
Hickory, North Carolina
2
<PAGE>
INDEPENDENT AUDITORS' CONSENT
The Board of Directors
Nash Finch Company:
We consent to incorporation by reference in the Registration Statement (No.
33-26590) on Form S-8 of Nash Finch Company of our reports dated March 1,
1994, relating to the consolidated balance sheets of Nash Finch Company and
subsidiaries as of January 1, 1994 and January 2, 1993 and the related
consolidated statements of earnings, stockholders' equity, and cash flows and
related consolidated financial statement schedules for each of the years in
the three-year period ended January 1, 1994, which reports are included or
incorporated by reference in the January 1, 1994 annual report on Form 10-K of
Nash Finch Company.
KPMG Peat Marwick
Minneapolis, Minnesota
March 24, 1994
