UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
FORM 10-K/A
AMENDMENT NO. 1
(Mark One)
X Annual report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 [No Fee Required]
For the fiscal year ended December 28, 1996
OR
Transition report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 [No Fee Required]
For the transition period from to .
Commission file number 33-48862
HOMELAND HOLDING CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 73-1311075
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2601 N. W. Expressway
Oil Center - East, Suite 1100 Oklahoma City,
Oklahoma 73112
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (405) 879-6600
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 $ .01 per share.
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days. Yes X
No
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. [ ]
Indicate by check mark whether the registrant has filed all documents
and reports required to be filed by Section 12, 13 or 15 (d) of the
Securities Exchange Act of 1934 subsequent to the distribution of
securities under a plan confirmed by a court. Yes X No
State the aggregate market value of the voting stock held by non-
affiliates of the registrant: There is no established public trading
market for the common stock of Homeland Holding Corporation.
Indicate the number of shares outstanding of each of the registrant's
classes of common stock as of March 18, 1997:
Homeland Holding Corporation
Common Stock: 4,758,025 shares
Documents incorporated by reference: None.
EXPLANATORY NOTE:
This Amendment No. 1 to the Form 10-K is being filed to provide the
Exhibits that were inadvertently removed in the EDGAR filing of the
Registrant's Form 10-K that was previously filed on March 28, 1997.
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.
HOMELAND HOLDING CORPORATION
Date: May 27, 1997 By: /s/ James A. Demme
James A. Demme, Chairman
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on behalf
of the registrant and in the capacities and on the dates indicated.
Signature Title Date
/s/ James A. Demme Chairman of the Board May 27, 1997
James A. Demme President, Chief Executive
Officer and Director
(Principal Executive Officer)
/s/ Larry W. Kordisch Executive Vice President/ May 27, 1997
Larry W. Kordisch Finance, C.F.O. and Secretary
(Principal Financial Officer)
/s/ Terry M. Marczewski Vice President, Controller May 27, 1997
Terry M. Marczewski (Principal Accounting Officer)
Signature Title Date
/s/ Robert E. (Gene) Burris Director May 27, 1997
Robert E. (Gene) Burris
/s/ Edward B. Krekeler, Jr. Director May 27, 1997
Edward B. Krekeler, Jr.
/s/ Laurie M. Shahon Director May 27, 1997
Laurie M. Shahon
/s/ John A. Shields Director May 27, 1997
John A. Shields
_________________________ Director May __, 1997
William B. Snow
/s/ David N. Weinstein Director May 27, 1997
David N. Weinstein
HOMELAND STORES, INC.
1996 MANAGEMENT INCENTIVE PLAN
1995 MANAGEMENT INCENTIVE PLAN
MANAGEMENT INCENTIVE PLAN
1) Purpose of Plan
Definitions
Administration and Interpretation
Eligible Employees
Amount Available for Annual Performance Bonus
Bonus Elements
Allocation of Annual Performance Bonus
Form and Settlement of Incentive Compensation Award
Limitations
Retail Management Incentive Plan
Amendment, Suspension or Termination of the Plan
Exhibits
1) PURPOSE OF THE PLAN
The purpose of this Plan is to aid in obtaining and retaining qualified
and competent management personnel and to encourage significant
contributions to the success of Homeland Stores, Inc. by providing
additional compensation to those individuals who contribute to the
successful and profitable operation of the affairs of Homeland Stores, Inc.
1) DEFINITIONS
Unless as otherwise defined elsewhere in this Plan, these terms shall have
the following meanings.
1) Annual Performance Incentive Award (Bonus) shall
mean an award of cash which is made pursuant to this
Plan;
2) Board of Directors shall mean the duly elected and
serving Board of Directors of the Company;
3) Committee shall mean the persons appointed to
administer the Plan in accordance with Section III;
4) Company shall mean Homeland Stores, Inc.;
5) EBITDA shall mean the consolidated net income (loss)
as determined by GAAP for any period adjusted to
exclude (without duplication) the following items
that are included in calculating such consolidated
net income:
(i) consolidated interest expense;
(ii) provision for income taxes;
(iii) extraordinary gains or losses;
(iv) depreciation and amortization;
(v) any other non-cash charges;
(vi) reorganization items.
6) Participant shall mean an employee to whom the
Committee makes an award under the Plan;
7) Performance Period shall be any twelve consecutive
month period designated by the Board of Directors.
Unless otherwise so specified, such period shall
commence on December 31, 1995 and expire on December
28, 1996 (fiscal 1996);
8) Plan shall mean this Management Incentive Plan;
9) ADMINISTRATION AND INTERPRETATION
The Plan shall be administered by a Committee which, unless otherwise
determined by the Board of Directors, shall be members of the Compensation
Committee of the Board of Directors who are not participants hereunder.
The membership of the Committee may be reduced, changed, or increased from
time to time at the absolute discretion of the Board of Directors. The
Committee shall have full power and authority to interpret and administer
the Plan and, subject to the provisions herein set forth, to prescribe,
amend and rescind rules and regulations and make all other determinations
necessary or desirable for the Plans administration.
The decision of the Committee relating to any question concerning or
involving the interpretation or administration of the Plan shall be final
and conclusive, and nothing in the Plan shall be deemed to give any officer
or employee his legal representatives or assignees, any right to participate
in the Plan except to such extent, if any, as the Committee may have
determined or approved pursuant to the provisions of the Plan.
1) ELIGIBLE EMPLOYEES
Employees eligible to participate in the Plan shall be management or
executive-level employees and corporate officers. Also included are
other key employees recommended by senior management. Any such employee
or officer may be designated a participant by the Board of Directors and
those eligible to participate for any given performance year shall be as
determined by such Board and set forth in Exhibit c for that performance
year.
1) AMOUNT AVAILABLE FOR ANNUAL PERFORMANCE BONUS
The bonus amounts to be made available to participants will be determined
from time to time by the Board of Directors of the Company, and will be set
forth in the exhibits of the Plan for each performance year. These
amounts will be determined and they will be:
1) Target Bonus Potential - This is an amount expressed
as a percentage of each participants base
compensation determined at the beginning of the
performance year which is payable if the plan EBITDA
goals as set forth in the exhibit are met.
2) Maximum Opportunity Bonus Potential - This is the
maximum amount of bonus which will be payable to a
participant and will be attained only if the EBITDA
plan goals are exceeded, as set forth in the exhibit.
3) Threshold Bonus Potential - This is the minimum
acceptable level of performance for awards to
commence. The Company has to achieve a minimum EBITDA
of $17.1 million before any bonus payout occurs
4) Newly Eligible or New Hires - Bonus paid is prorated,
based on length of time in current position.
Terminations - Not eligible to receive a bonus unless the individual was
employed at the end of the year unless otherwise provided for in any
severance agreement that has been approved by the Board of Directors.
Final determination, as in all cases, will be made by the Committee of
the Board of Directors.
1) BONUS ELEMENTS
The bonus structure shall be built around two separate individual elements
which together will determine the ultimate bonus to be paid. They are as
follows:
1) CORPORATE PERFORMANCE AWARD
(CPA) - This bonus award will be determined based
upon the achievement of specific goals by the
Company. This amount will represent a fixed
percentage of the total award, as defined in the
exhibit and will be different by level within the
organization.
2) INDIVIDUAL PERFORMANCE AWARD
(IPA) - This bonus award will be based upon the
participants performance of duties and achievement
of individual goals and objectives as determined by
the President. This bonus may be awarded or not
awarded or awarded in any percentage as determined
by the President, based upon attainment of goals as
set forth below.
The balance or weighting between each element will be determined by the
Committee each year based upon recommendations made by the President.
(The IPA will only be payable if the CPA is payable).
The threshold for the plan to be activated would be at 90% of Target
EBITDA ($17.1 million) net of bonus. The bonus amount for the various
management category at the different level of EBITDA is described in the
exhibit. At 100% attainment of goals for both corporate (EBITDA at
$19.0 million) and individual, a participant will receive the full
incentive award. To achieve the maximum bonus, the Company must reach
an EBITDA of $22.8 million, net of bonus.
1) ALLOCATION OF ANNUAL PERFORMANCE BONUS
As soon as practical after the end of the Companys fiscal year and after
audit, the Committee will assess the financial performance of the Company
and specifically determine if the incentive Target EBITDA in force for the
fiscal year has been met. The Committee will request of the President his
assessment of individual performance levels of Plan participants and
recommendation for Individual Performance Award levels.
Based upon achievement of performance levels and individual award
recommendations made by the President, the Committee will then determine
the amount of each Annual Performance Bonus for each participant in
accordance with the provisions of the Plan and the specifics in force for
the performance period.
The Committee shall be under no compulsion to award the full amount of the
bonus pool if the corporate awards and individual awards together do not
exhaust the potential bonus pool. Any bonuses available but not awarded,
will cease to be bonuses and will revert to the Company. Amounts awarded
are not to be considered as compensation of any employee for the purpose
of calculating benefits, unless expressly provided for under the provision
of a specific plan.
1) FORM AND SETTLEMENT OF INCENTIVE COMPENSATION AWARDS
Awards shall be paid in cash. The Committee shall have complete and
absolute authority to determine the form and settlement of each individual
bonus.
The settlement of an award to any participant for any year will be handled
in the following manner except for any separate severance agreement
approved by the Board.
Cash - Cash payment will be paid as soon as possible in a lump sum at the
end of the fiscal year following the Committee's decision that is made
pursuant to Section IV.
If a participant dies before the payment of a bonus and without having
forfeited his right to the payment thereof pursuant to Section IX hereof,
such unpaid bonus shall be paid to his estate or legal representative
either as originally provided or otherwise as the Committee may determine
in each individual case.
1) LIMITATIONS
No participant or any other person shall have any interest in any fund or
in any specific asset or assets of the Company by reason of a bonus that
has been made but has not been paid or distributed to him. No
participant shall have the right to assign, pledge or otherwise dispose
of any bonus distributable to him in the future, nor shall such
participant's contingent interests in such unpaid installments be subject
to garnishment, transfer by operation of law or any legal process.
1) RETAIL MANAGEMENT INCENTIVE PLAN ("Retail Plan")
The Retail Plan as more fully described in Exhibit D is applicable for
retail stores management (including district managers) only. There are
special payment terms in the Retail Plan that may be different to Section
VIII above. The special terms are an added incentive for the retail
management personnel.
1) AMENDMENT, SUSPENSION OR TERMINATION OF THE PLAN
The Board of Directors of the Company may at any time amend, suspend or
terminate the Plan, in whole or in part, except that no amendment,
suspension or termination shall reduce any benefits payable to a
participant or his estate or legal representative or shall reduce any
benefits awarded to a participant prior to the date of such amendment,
suspension or termination, except as provided for in Section IX.
1996 Incentive Plan
RETAIL OPERATIONS
DISTRICT MANAGERS
ELIGIBILITY
All District Managers are eligible to participate in the plan. The plan
will be paid semi-annually. Each participant in the plan must be actively
employed in the position at the time of payment. No bonus will be paid
unless the company achieves its hurdle rate of 90% of EBITDA plan. No bonus
will be paid unless the District hits a minimum of 90% of its N.O.P. target.
INCENTIVE PLAN PAYMENT
The total maximum bonus for all District Managers will be 50% of their base
pay, with the exception of the Special Incentive paid to District Managers
who exceed their N.O.P. target. There will be no cap on the Special
Incentive.
TRANSFERS AND NEW HIRES
District Managers will receive pro rata portion of bonus from the previous
District and a pro rata portion from the new District based on the length of
time in each assignment during the bonus period.
BONUS ELEMENTS
The bonus plan will be broken down into four parts, excluding the Special
Incentive. Eligible participants will be paid on the following:
1) .7 Percent of all N.O.P. up to 50% of their
eligible amount.
2) Up to 20% of their eligible amount for achievement
of their sales target.
3) An additional 15% of eligible amount for attaining
controllable expense targets:
Wages 6%
Supplies 2%
Checks 3%
Cash 2%
Inventory Turns 2%
1) Up to 15% of their eligible amount based on
achievement of the personal objectives set by the
District Manager and the Vice President of Retail
Operations.
AWARD PAYMENT
The incentive bonus will be paid out semi-annually. Payment
will be made as soon as practical after the close of each
bonus period. Ten Percent of the bonus payment will be held
back from the first semi-annual payment. The entire bonus
will be paid after the close of the fiscal year.
BONUS CALCULATION (After Eligibility of 90% of N.O.P. Target)
1) NOP: After eligibility participants earn .7% of N.O.P. up to 50% of
bonus rate.
90 to 94% of Sales Target .175% of N.O.P.
95 to 99% of Sales Target .35% of N.O.P.
100% of Sales Target .7% of N.O.P.
1) SALES: (Maximum 20% of Bonus Rate) to be paid in the following
manner:
90 to 94% of Sales Target 10%
95 to 99% of Sales Target 15%
100% of Sales Target 20%
1) CONTROLLABLES: (Maximum 15% of Bonus Rate)
Wages 6%
Supplies 2%
Checks 3%
Cash 2%
Inventory Turns 2%
1) Up to 15% of their eligible amount based on achievement of the
personal objectives set by the District Manager and the Vice President of
Retail Operations.
*SPECIAL INCENTIVE N.O.P.
Eligible participants will receive an additional .7% of all N.O.P. over
their N.O.P. target. This special incentive will have no cap on it.
1996 Incentive Plan
RETAIL OPERATIONS
ELIGIBILITY
All Store Managers, Assistant Store Managers, Pharmacy Managers and
Assistant Pharmacy Managers are eligible to participate in the plan. The
plan will be paid semi-annually. Each participant in the plan must be
actively employed in the position at the time of payment. No bonus will be
paid unless the company achieves its hurdle rate of 90% of EBITDA plan. No
store bonus will be paid unless store hits a minimum of 90% of its N.O.P.
target.
INCENTIVE PLAN PAYMENT
The total maximum bonus for all Store Managers will be 30% of their base
pay, with the exception of the Special Incentive paid to Store Managers who
exceed their N.O.P. target. There will be no cap on the Special Incentive.
First Assistant Managers will be paid 10% of the Store Managers bonus and 5%
will be paid to Second Assistants.
TRANSFERS AND NEW HIRES
Store Managers will receive pro rata portion of bonus from the previous store
and a pro rata portion from the new store based on the length of time in each
assignment during the bonus period. Assistant Store Managers bonus will be
based on the store assigned to at the end of the bonus period. New hires or
newly eligible participants will have their bonus based on length in current
position.
BONUS ELEMENTS
The bonus plan will be broken down into three parts, excluding the Special
Incentive. Eligible participants will be paid on the following:
1) One Percent of all N.O.P.
up to 50% of their eligible amount.
2) Up to 30% of their eligible amount for
achievement of their sales target.
3) An additional 20% of eligible amount for
attaining controllable expense target:
Wages 12%
Supplies 2%
Checks 2%
Cash 2%
Inventory Turns 2%
AWARD PAYMENT
The incentive bonus will be paid out semi-annually. Payment will be made as
soon as practical after the close of each bonus period. Ten Percent of the
bonus payment will be held back from the first semi-annual payment. The
entire bonus will be paid after the close of the fiscal year.
BONUS CALCULATION (After Eligibility of 90% of N.O.P.
Target)
1) NOP: After eligibility participants earn 1% of N.O.P.
up to 50% of bonus rate.
90 to 94% of Sales Target .25% of N.O.P.
95 to 99% of Sales Target .5% of N.O.P.
100% of Sales Target 1% of N.O.P.
1) SALES: (Maximum 30% of Bonus Rate) to be paid in the
following manner:
90 to 94% of Sales Target 10%
95 to 99% of Sales Target 20%
100% of Sales Target 30%
1) CONTROLLABLES: (Maximum 20% of Bonus Rate)
Wages 12%
Supplies 2%
Checks 2%
Cash 2%
Inventory Turns 2%
*SPECIAL INCENTIVE N.O.P.
Eligible participants will receive an additional 1% of all N.O.P. over
their N.O.P. target. This special incentive will have no cap on it.
PHARMACY INCENTIVE BONUS
Pharmacy Manager receives .6% of store
pharmacy sales.
Assistant Pharmacy Manager receives .45% of
store pharmacy sales.
This incentive will be paid out on a quarterly basis, one quarter in arrears,
and is independent of corporate EBITDA performance.
HOMELAND STORES, INC.
EMPLOYEE STOCK BONUS PLAN
Effective August 2, 1996
TABLE OF CONTENTS
Page
PREAMBLE . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE I
DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II
ELIGIBILITY AND PARTICIPATION. . . . . . . . . . . . . . . . . 16
Section 2.1. Eligibility. . . . . . . . . . . . . . . . . . . 16
Section 2.2. Periods of Eligibility . . . . . . . . . . . . . 16
ARTICLE III
CONTRIBUTIONS. . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 3.1. Initial Company Contributions. . . . . . . . . . 17
Section 3.2. Additional Company Contributions Based on
EBITDA. . . . . . . . . . . . . . . . . . . . . . . . 17
Section 3.3. Discretionary Company Contributions. . . . . . . 18
Section 3.4. Participant Pre-Tax Contributions. . . . . . . . 18
Section 3.5. Matching Company Contributions . . . . . . . . . 19
Section 3.6. Additional Contributions Upon Change of
Control of the Company . . . . . . . . . . . . . . . 20
Section 3.7. Limitations on Contributions . . . . . . . . . . 21
ARTICLE IV
ALLOCATION OF CONTRIBUTIONS. . . . . . . . . . . . . . . . . . 24
Section 4.1. Establishment of Accounts. . . . . . . . . . . . 24
Section 4.2. Allocations to Participants' Accounts. . . . . . 24
Section 4.3. Overall Annual and Cumulative
Limitations . . . . . . . . . . . . . . . . . . . . . 26
Section 4.4. Basis for Limitation Computations. . . . . . . . 27
Section 4.5. Definitions for Limitation
Computations. . . . . . . . . . . . . . . . . . . . . 27
ARTICLE V
VALUATION OF FUND AND ADJUSTMENTS TO ACCOUNTS. . . . . . . . . 28
Section 5.1. Determination of Number of Shares of Stock
and Market Value . . . . . . . . . . . . . . . . . . 28
Section 5.2. Adjustments for Net Changes in Assets. . . . . . 28
Section 5.3. Treatment of Expenses. . . . . . . . . . . . . . 29
ARTICLE VI
ROLLOVERS. . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 6.1. Direct Rollovers and Rollover
Notices . . . . . . . . . . . . . . . . . . . . . . . 29
Section 6.2. Waiver of 30-Day Notice. . . . . . . . . . . . . 32
ARTICLE VII
VESTING AND FORFEITURES. . . . . . . . . . . . . . . . . . . . 32
Section 7.1. Vesting Schedule . . . . . . . . . . . . . . . . 32
Section 7.2. Vesting and Nonforfeitability. . . . . . . . . . 32
ARTICLE VIII
PAYMENT OF BENEFITS. . . . . . . . . . . . . . . . . . . . . . 33
Section 8.1. Distributions to Participants. . . . . . . . . . 33
Section 8.2. Distributions to Beneficiaries . . . . . . . . . 34
Section 8.3. Distributions in Shares of Stock . . . . . . . . 34
Section 8.4. Delay in Benefit Determination . . . . . . . . . 35
Section 8.5. Accounting for Benefit Payments. . . . . . . . . 35
Section 8.6. Designation of Beneficiaries . . . . . . . . . . 35
Section 8.7. Option to Have Company Purchase Stock. . . . . . 36
ARTICLE IX
ORGANIZATION OF PLAN COMMITEE;
ADMINISTRATION OF PLAN . . . . . . . . . . . . . . . . . . 38
Section 9.1. The Committee. . . . . . . . . . . . . . . . . . 38
Section 9.2. Committee Action, Rules and Expenses . . . . . . 38
Section 9.3. Plan Administered By Committee . . . . . . . . . 39
Section 9.4. Retention of Advisors and
Service-Providers . . . . . . . . . . . . . . . . . . 40
Section 9.5. Instructions to Trustee, Funding
Policy. . . . . . . . . . . . . . . . . . . . . . . . 40
Section 9.6. Valuation of Stock . . . . . . . . . . . . . . . 40
Section 9.7. Voting of Stock. . . . . . . . . . . . . . . . . 41
Section 9.8. Power of Delegation. . . . . . . . . . . . . . . 41
Section 9.9. Communication By Committee . . . . . . . . . . . 41
Section 9.10. Reports of the Committee . . . . . . . . . . . . 42
Section 9.11. Resignation or Removal of Committee
Member. . . . . . . . . . . . . . . . . . . . . . . . 42
ARTICLE X
CLAIMS PROCEDURES. . . . . . . . . . . . . . . . . . . . . . . 42
Section 10.1. Claim for Benefits. . . . . . . . . . . . . . . 42
Section 10.2. Request for Additional Information. . . . . . . 43
Section 10.3. Committee Claim Determination . . . . . . . . . 43
Section 10.4. Extension of Claim Processing Time. . . . . . . 44
Section 10.5. Claims Appeal Procedure . . . . . . . . . . . . 45
Section 10.6. Submission of Comments By Claimant. . . . . . . 45
Section 10.7. Extension of Claim Appeal Processing
Time. . . . . . . . . . . . . . . . . . . . . . . . 46
Section 10.8. Claimant's Right to a Conference. . . . . . . . 46
ARTICLE XI
TRUST FUND . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Section 11.1. Creation of Trust Fund. . . . . . . . . . . . . 46
Section 11.2. No Right to Assets. . . . . . . . . . . . . . . 47
Section 11.3. Benefits Provided Solely By Trust . . . . . . . 47
ARTICLE XII
AMENDMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . 47
ARTICLE XIII
TERMINATION; DISCONTINUANCE OFCONTRIBUTIONS; MERGER OF
PLANS; ADOPTION CONDITIONED UPON QUALIFICATION . . . . . . . 48
Section 13.1. Right to Terminate Plan . . . . . . . . . . . . 48
Section 13.2. Discontinuance of Contributions . . . . . . . . 49
Section 13.3. Evidence of Termination . . . . . . . . . . . . 49
Section 13.4. Merger of Plans . . . . . . . . . . . . . . . . 49
Section 13.5. Plan Adoption Conditioned Upon Qualification. . 50
ARTICLE XIV
MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . . 51
Section 14.1. Alternative Payees in the Event of
Incapacity . . . . . . . . . . . . . . . . . . . . . 51
Section 14.2. Nonassignment of Benefits, Qualified Domestic
Relations Orders. . . . . . . . . . . . . . . . . . 51
Section 14.3. Plan Creates No Employment Rights . . . . . . . 52
Section 14.4. Limit on Company Liability. . . . . . . . . . . 53
Section 14.5. Nondiversion of Assets. . . . . . . . . . . . . 53
Section 14.6. Missing Participants and
Beneficiaries . . . . . . . . . . . . . . . . . . . 54
Section 14.7. Indemnification of Committee Members. . . . . . 55
Section 14.8. Plan Headings . . . . . . . . . . . . . . . . . 55
Section 14.9. Number and Gender . . . . . . . . . . . . . . . 55
Section 14.10. Separability of Provisions. . . . . . . . . . . 56
Section 14.11. Interpretation of Provisions. . . . . . . . . . 56
PREAMBLE
This Plan shall be known as the "Homeland Stores, Inc.
Employee Stock Bonus Plan". The object of the Plan is to provide
certain Bargaining Unit Employees of Homeland Stores, Inc. with an
ownership interest in Homeland Stores, Inc. The Plan is intended to
be qualified as a stock bonus plan under Section 401(a) of the Code.
ARTICLE I
DEFINITIONS
Section 1.1 "Adjustment Factor" shall mean the cost of living
adjustment factor prescribed by the Secretary of the Treasury under
Section 415(d) of the Code, as applied to such items and in such
manner as the Secretary shall provide.
Section 1.2 "Affiliate" shall mean any entity affiliated with the
Company as described in Section 414(b) of the Code with respect to
controlled groups of corporations, Section 414(c) of the Code with
respect to trades or businesses under common control, Section 414(m)
of the Code with respect to affiliated service groups, or regulations
which may be prescribed under Section 414(o) of the Code with respect
to any entity required to be aggregated with the Company pursuant to
regulations under such Section of the Code; except that, for purposes
of applying the provisions of Sections 4.3, 4.4 and 4.5 with respect
to the limitations on contributions, Section 415(h) of the Code shall
apply.
Section 1.3 "Bargaining Unit Employee" shall mean an individual
who, following the completion of the Employee Buyout Plan (as defined
in the Collective Bargaining Agreements), performs services for the
Company in an employer-employee relationship on a regular and non-
temporary basis, and who is in a bargaining unit covered by a
Collective Bargaining Agreement. For purposes of computing the
number of Years of Vesting Service to be credited to a Bargaining
Unit Employee, any period during which the Bargaining Unit Employee
was a Leased Employee of the Company, and any period of employment
with (or as a leased employee of) any other corporation, partnership,
or proprietorship which is not the Company, shall be taken into
account to the same extent it would have been if it had been employ-
ment by the Company, but only to the extent that (i) the other corpo-
ration, partnership, or proprietorship is or was, at the time such
employment occurred, an Affiliate or (ii) such employment constitutes
service with a predecessor employer within the meaning of Sec-
tion 414(a) of the Code. The term Bargaining Unit Employee does not
include any such person employed on a temporary or casual basis. A
person otherwise regularly employed by the Company shall be deemed to
continue to be regularly employed by the Company if such person is on
Leave of Absence.
Section 1.4 "Beneficiary" shall mean the person or persons
(including a trust or estate) who are entitled to receive any benefit
payable hereunder by reason of the death of a Participant, as
designated pursuant to Section 8.6.
Section 1.5 "Board" shall mean the Board of Directors of the
Company.
Section 1.6 "Change of Control" shall mean a change of control as
defined in the Indenture Agreement, dated as of August 2, 1996, by
and among the Company, Homeland Holding Corporation and Fleet
National Bank.
Section 1.7 "Code" shall mean the Internal Revenue Code of 1986,
as amended.
Section 1.8 "Collective Bargaining Agreements" shall mean the
modified union agreement between United Food & Commercial Workers
Union, Locals No. 76, 322, 340, 540, 1000, chartered by the United
Food and Commercial Workers International Union, and the Company
effective as of August 4, 1996, the AFL-CIO agreement between the
Company and the Bakery Confectionery & Tobacco Workers Union, Local
No. 173 effective as of August 4, 1996.
Section 1.9 "Committee" shall mean the committee appointed in
accordance with Article IX.
Section 1.10 "Company" shall mean Homeland Stores, Inc., or any
successor corporation by merger, purchase, consolidation or
otherwise.
Section 1.11 "Compensation" shall mean a Bargaining Unit Employee's
total taxable compensation from the Company for the Plan Year;
provided, however, that Compensation shall not include any amounts in
excess of $150,000 (or such other amount as may be determined from
time to time under Section 401(a)(17) of the Code).
Section 1.12 "Computation Period" shall mean the Plan Year.
Section 1.13 "EBITDA" shall have the meaning ascribed thereto in
the New Bank Credit Agreement, dated as of August 2, 1996.
Section 1.14 "Effective Date" shall mean August 2, 1996, the
Effective Date as defined in the Company's First Amended Joint Plan
of Reorganization dated June 13, 1996.
Section 1.15 "Employment Commencement Date" shall mean the date on
which a Bargaining Unit Employee first performs an Hour of Service
for the Company.
Section 1.16 "ERISA" shall mean the Employee Retirement Income
Security Act of 1974, as amended.
Section 1.17 "Highly Compensated Employee" shall mean, with respect
to a Plan Year, any employee (and any Leased Employee of the Company)
who during the Plan Year or the preceding Plan Year:
(a) was an owner of more than five percent of the value
of outstanding stock, or of stock possessing more than five
percent of the total combined voting power of all stock, of the
Company which is a corporation, or of more than five percent of
the capital or profits interest of the Company which is not a
corporation; or
(b) received compensation from the Company in excess of
$75,000 (or such other amount determined from time to time
under Section 414(q)(l) of the Code); or
(c) received compensation from the Company in excess of
$50,000 (or such other amount determined from time to time
under Section 414(q)(l) of the Code) and was in the Top-Paid
Group of Employees (as defined below) for the Plan Year; or
(d) was at any time during the Plan Year an officer of
the Company and received compensation exceeding 50 percent of
the limitation in effect under Section 415(b)(l)(A) of the
Code.
An employee who for the current Plan Year, but not for the preceding
Plan Year, is described in subsection (b), (c) or (d) above shall not
be considered to be described in such subsections unless he is also
one of the 100 highest paid employees of the Company for the Plan
Year. For purposes of subsection (d) above, the number of employees
counted as "officers" shall be limited to the lesser of (i) 50 or
(ii) the greater of three or ten percent of all active employees of
the Company, and, if for a Plan Year there is no officer of the
Company who receives compensation exceeding 50 percent of the
limitation in effect under Section 415(b)(l)(A) of the Code, the
highest paid officer of the Company shall be deemed to be a Highly
Compensated Employee. The "Top-Paid Group of Employees" for a Plan
Year is the group consisting of the top twenty percent of the
employees when ranked on the basis of compensation paid during the
Plan Year. In determining the number of employees in the "Top-Paid
Group of Employees" there shall be excluded any employee (i) who has
been employed for less than 6 months, (ii) who normally works less
than 17-1/2 hours each week or less than 6 months each year,
(iii) who has not reached age 21, (iv) except to the extent required
otherwise in regulations under Section 414(q) of the Code, whose
employment is covered by a collective bargaining agreement between
the Company and the employee's collective bargaining representative,
or (v) who is a nonresident alien who did not receive any earned
income from the Company which constitutes income from sources within
the United States. If an individual is a member of the family (that
is, the spouse, a lineal ascendant or descendant, or the spouse of a
lineal ascendant or descendant) of an employee described in sub-
section (a) above, or of an employee who is one of the ten Highly
Compensated Employees paid the greatest compensation for the Plan
Year, such individual shall not be considered to be a separate
employee and such individual's compensation shall be treated as if
paid to the employee described in subsection (a) above or who is one
of the ten Highly Compensated Employees paid the greatest
compensation for the Plan Year. For purposes of this Section 1.18,
"the Company" shall include all corporations, partnerships and pro-
prietorships which are Affiliates and an employee's annual
compensation from all such entities shall be aggregated and shall
include compensation for services which would be currently includible
but for a salary reduction election under Section 125 or Sec-
tion 401(k) of the Code. However, for purposes of the ownership test
in subsection (a) above, each such entity shall be considered
separately as the Company, and "ownership" shall be determined by
applying the constructive ownership rules contained in Section 318 of
the Code (but applied by substituting five percent for fifty percent
in Section 318(a)(2)(C) of the Code).
Section 1.18 "Hour of Service" shall mean:
(a) Each hour for which an employee is paid or is
entitled to be paid for the performance of duties for the
Company.
(b) Each hour for which an employee is directly or
indirectly paid or is entitled to be paid for a period of time
during which no duties are performed (irrespective of whether
the employment relationship has terminated) due to vacation,
holidays, illness, disability, layoff, jury duty, temporary
military duty, or Leave of Absence. However, no more than 501
Hours of Service shall be credited under this subsection (b)
for any single continuous period during which an employee
performs no duties (whether or not such period occurs in a
single Computation Period). Further, no Hours of Service shall
be credited on account of payments made solely under a plan
maintained to comply with worker's compensation, unemployment
compensation, or disability insurance laws, or to reimburse an
employee for medical expenses.
(c) Each hour for which back pay (ignoring any
mitigation of damages) is either awarded to the employee or
agreed to by the Company. However, no more than 501 Hours of
Service shall be credited under this subsection (c) for any
single continuous period during which an employee would not
have performed any duties.
(d) Solely for purposes of determining whether an
employee has incurred a Break in Service, an employee who is
not otherwise credited with an Hour of Service under sub-
section (a), (b) or (c) above shall be credited with an Hour of
Service for each additional hour that is part of an employee's
customary work week with the Company during which the employee
is on a Leave of Absence, provided the employee resumes
employment with the Company upon the expiration of such Leave
of Absence.
(e) Notwithstanding the foregoing, Hours of Service
shall be credited in any Computation Period only under one of
paragraphs (a), (b), (c) and (d) above; an employee may not
receive double credit for the same Computation Period.
(f) If the Company finds it impractical to count the
actual Hours of Service for any class or group of employees,
each employee in that class or group shall be credited with 10
Hours of Service for each day in which he has at least one Hour
of Service. However, an employee shall be credited only for
his normal working hours during a paid absence.
(g) Hours of Service to be credited on account of
payment to an employee (including back pay) shall be recorded
in the period of service for which the payment was made. If
the period overlaps two or more Computation Periods, the Hours
of Service credit shall be allocated in proportion to the
respective portions of the period included in the several Com-
putation Periods. However, in the case of periods of 31 days
or less, the Committee may apply a uniform policy of crediting
the Hours of Service to either the first Computation Period or
the second.
(h) In all respects an employee's Hours of Service shall
be counted as required by Section 2530.200b-2 of the Department
of Labor's regulations under Title I of ERISA which is
incorporated herein by this reference.
Section 1.19 "Initial Outstanding Shares" shall mean 522,222 shares
of Stock.
Section 1.20 "Leave of Absence" shall mean the interruption of the
actual performance of services for and with the approval of the
Company on account of (i) governmental service, sickness, disability,
education or other cause interfering with the ability of such
individual to perform services for the Company, (ii) the first 12
weeks of any leave approved in writing, under uniform and non-
discriminatory rules in accordance with the Family Medical Leave Act
of 1993, or (iii) any other approved Leave of Absence which is in
accordance with the Collective Bargaining Agreements.
Section 1.21 "Leased Employee" shall mean a person who is
performing services for the Company (and is not a common-law employee
of the Company) if:
(a) such services are provided pursuant to an agreement
between the Company and any other entity (hereinafter referred
to as the "leasing organization"),
(b) such person has performed the services for the
Company (or a related company within the meaning of Section
144(a)(3) of the Code) on a substantially full-time basis for a
period of at least one year, and
(c) such services are of a type historically performed,
in the business field of the Company, by its employees.
Notwithstanding the foregoing, a person shall not be
considered a Leased Employee if (i) he is covered by a plan
maintained by the leasing organization that constitutes a safe harbor
plan under Section 414(n)(5) of the Code and (ii) Leased Employees do
not constitute more than 20% of the Company's non-highly compensated
work force. In applying the provisions of this paragraph, the
Company may rely upon a written certification by the leasing organi-
zation as to whether a person is covered by a plan of the type
described.
Section 1.22 "Matching Company Contributions" shall mean Company
Contributions made pursuant to Section 3.5.
Section 1.23 "Maternity or Paternity Absence" shall mean a period
during which an employee is absent from work (i) by reason of the
employee's pregnancy, (ii) by reason of the birth of a child of the
employee, (iii) by reason of the placement of a child with the
employee in connection with the employee's adoption of the child, or
(iv) for purposes of caring for a child described in clause (ii) or
(iii) above for a period beginning immediately following the birth or
placement. In no event shall an employee be considered to have been
on a Maternity or Paternity Absence unless the employee timely pro-
vides the Committee with sufficient information to establish that the
employee's absence from work was on account of a Maternity or
Paternity Absence and the number of days of such Maternity or
Paternity Absence.
Section 1.24 "Normal Retirement Age" shall mean the age of the
Participant on the date on which occurs his Normal Retirement Date.
Section 1.25 "Normal Retirement Date" shall mean the first to occur
of (i) the last to occur of (A) a Participant's 65th birthday or (B)
the fifth anniversary of the Participant's initial participation in
the Plan or (ii) the Participant's mandatory retirement date under
any retirement plan maintained by the Company or an Affiliate.
Section 1.26 "Participant" shall mean any Bargaining Unit Employee
who meets the requirements for eligibility under Article II or who
has a Stock Account balance under the Trust.
Section 1.27 "Plan" shall mean the Homeland Stores, Inc. Employee
Stock Bonus Plan, as described herein or hereinafter amended.
Section 1.28 "Plan Administrator" shall mean the Committee
described in Article IX of the Plan.
Section 1.29 "Plan Year" shall mean for the first Plan Year the
short period beginning on the Effective Date and ending on December
31, 1996 and for any Plan Year after the first Plan Year, the 12-
month period beginning on January 1 and ending on December 31.
Section 1.29 "Re-Employment Commencement Date" shall mean the first
date following a Termination of Employment on which a Bargaining Unit
Employee performs an Hour of Service for the Company.
Section 1.30 "Stock" shall mean shares of common stock of the
Homeland Holding Corporation, the parent company of Homeland Stores,
Inc.
Section 1.31 "Stock Account" shall mean a separate account
reflecting a Participant's interest in the Stock held in the Trust.
Each Participant's Stock Account shall be consist of the following
Sub-Accounts:
(a) A "Company Contribution Account" shall be maintained
for each Participant which reflects the Company Contributions
allocated to the Participant pursuant to Sections 3.1 and 3.2,
adjusted for earnings and losses attributable to the investment
thereof.
(b) A "Profit Sharing Company Contribution Account"
shall be maintained for each Participant which reflects Company
Contributions pursuant to Section 3.3, adjusted for earnings and
losses attributable to the investment thereof.
(c) A "Pre-Tax Employee Contribution Account" shall be
maintained for each Participant which includes the Pre-Tax
Contributions made by the Company on behalf of the Participant
pursuant to Section 3.4, adjusted for earnings and losses
attributable to the investment thereof.
(d) A "Matching Company Contribution Account" shall be
maintained for each Participant which reflects the Matching Company
Contributions allocated to the Participant pursuant to Section 3.5,
adjusted for earnings and losses attributable to the investment
thereof.
(e) An "After-Tax Contribution Account" shall be
maintained for each Participant which includes the Participant's
After-Tax Contributions, adjusted for earnings and losses
attributable to the investment thereof.
Section 1.33 "Termination of Employment" shall mean (a) the
resignation of a Bargaining Unit Employee for any reason, (b) the
dismissal of a Bargaining Unit Employee for any reason, or (c) the
death or retirement of a Bargaining Unit Employee, including a
cessation of employment on account of Total Disability. Transfers by
a Bargaining Unit Employee from employment by any The Company to
employment by another employer shall not be regarded as a Termination
of Employment as long as such Bargaining Unit Employee is still
performing substantially the same services for the successor
employer.
Section 1.34 "Totally Disabled" or "Total Disability" shall mean a
disability which entitles a Participant to benefits under the
Company's Long-Term Disability Income Plan. Any determination of
whether a Participant is Totally Disabled shall be made under rules
uniformly applied to all Participants.
Section 1.35 "Trust" shall mean the legal entity created by the
Trust Agreement (and any amendments thereto) between the Company and
the Trustee.
Section 1.36 "Trust Agreement" shall mean the agreement between the
Company and the Trustee establishing the Trust, as may be amended
from time to time.
Section 1.37 "Trust Fund" shall mean all property, real or
personal, received or held by the Trustee as part of the Trust, plus
all income and gains and minus all losses, expenses, and
distributions chargeable thereto.
Section 1.38 "Trustee" shall mean any corporation, individual or
individuals who shall accept the appointment as Trustee to execute
the duties of the Trustee as specifically set forth in the Trust
Agreement.
Section 1.39 "Valuation Date" shall mean the last day of each Plan
Year and such other date or dates during the Plan Year as may be
designated as such by the Committee.
Section 1.40 "Year of Vesting Service" shall mean any Plan Year
beginning on or after the Effective Date during which a Bargaining
Unit Employee is credited with at least an Hour of Service.
ARTICLE II
ELIGIBILITY AND PARTICIPATION
Section 2.1 Eligibility. Each person who is a Bargaining Unit
Employee on the Effective Date shall become a Participant in the Plan
on the Effective Date. Any person who becomes a Bargaining Unit
Employee of the Company after the Effective Date shall become a
Participant in the Plan on the January 1 or July 1 following the date
on which he first becomes a Bargaining Unit Employee.
Section 2.2 Periods of Eligibility. A Bargaining Unit Employee
who becomes a Participant in accordance with Section 2.1 shall
continue to be eligible to receive contributions under the Plan until
the earlier to occur of (i) his Termination of Employment or (ii) the
date he is no longer a Bargaining Unit Employee. For this purpose, a
Bargaining Unit Employee who previously satisfied the initial
eligibility requirements of Section 2.1, but who either ceased to be
a Bargaining Unit Employee or terminated employment, shall enter or
re-enter the Plan, as the case may be, as of either (i) the next
January 1 or July 1, after he again becomes a Bargaining Unit
Employee, if the Bargaining Unit Employee was not previously a
Participant, or (ii) the Bargaining Unit Employee's Re-employment
Commencement Date or the date the Bargaining Unit Employee again
satisfies the eligibility requirements of Section 2.1, as the case
may be, if he was previously a Participant.
ARTICLE III
CONTRIBUTIONS
Section 3.1 Initial Company Contributions. As soon as
practicable following the completion of the Employee Buyout Plan and
as of each of the first two anniversaries thereof, the Company shall
contribute to the Trust 58,025 shares of Stock.
Section 3.2 Additional Company Contributions Based on
EBITDA.
(a) If the Company's EBITDA for the period beginning on
the Effective Date and ending on the day immediately prior to the
first anniversary of the Effective Date exceeds $25 million, then the
Company shall contribute to the Trust, as soon as practicable
following the first anniversary of Effective Date, 58,025 shares of
Stock.
(b) If the Company's EBITDA for the period beginning on
the first anniversary of the Effective Date and ending on the day
immediately prior to the second anniversary of the Effective Date
exceeds $27.5 million, then the Company shall contribute to the
Trust, as soon as practicable following the second anniversary of
Effective Date, 58,025 shares of Stock.
(c) If the Company's EBITDA for the period beginning on
the second anniversary of the Effective Date and ending on the day
immediately prior to the third anniversary of the Effective Date
exceeds $30.25 million, then the Company shall contribute to the
Trust, as soon as practicable following the third anniversary of
Effective Date, 58,025 shares of Stock.
Section 3.3 Discretionary Company Contributions. In
addition to contributions made pursuant to Sections 3.1 and 3.2
above, the Company, in its sole discretion, may make additional
contributions of cash or Stock to the Plan.
Section 3.4 Participant Pre-Tax Contributions. Within 30
days (or such greater or lesser period as the Committee shall
determine, subject to all applicable laws) after the completion of
the Employee Buyout Plan, and each of the first two anniversaries
thereof, each Participant who is employed by the Company or on a
Leave of Absence as of such date, shall be entitled to enter into a
salary reduction agreement with the Company pursuant to which the
Employee's salary shall be reduced by an amount and the Company shall
contribute Stock to the Plan on behalf of the Employee, with a value
(determined in accordance with Section 9.6) equal to the amount the
Participant so elects up to the Applicable Limit. For purposes of
the paragraph the Applicable Limit (determined on an aggregate basis
for all Participants) shall mean 58,025 shares of Stock. If, as of
the beginning of the Plan Year, the Participants (in the aggregate)
have elected to reduce their salary in an amount in excess of the
Applicable Limit, then the Participant's election with the highest
salary reduction request shall be reduced by the dollar amount
required to cause such Participant's salary reduction request to
equal the salary reduction request of the Participant with the next
highest salary reduction request. If a lesser reduction would enable
the aggregate amount of Stock requested to be purchased by the
Company and contributed on behalf of the Participants not to exceed
the Applicable Limit, then only this lesser reduction shall be made.
This process is repeated until the Applicable Limit is not exceeded.
Section 3.5 Matching Company Contributions. With respect to
any Bargaining Unit Employee who makes a timely contribution pursuant
Section 3.4, the Company shall make a Matching Company Contribution
in the form of Stock, as soon as practicable after the end of each
period during which Bargaining Unit Employees can make a contribution
under such Section, equal to 33 1/3% of the amount actually contributed
by the Participant pursuant to Section 3.4. Any such matching
contribution shall be allocated to each Participant's Matching
Company Contribution Account in accordance with Article IV of the
Plan.
Section 3.6 Additional Contributions Upon Change of Control
of the Company. In the event of a Change of Control of the Company:
(a) The Company shall contribute the number of shares of
Stock that have been contributed under Sections 3.1, 3.2 and 3.5, on
behalf of Participants on the date of the Change of Control (or as
soon as practicable thereafter) on behalf of such Participants
whether or not the criteria applicable to such contributions set
forth in Sections 3.1, 3.2 and 3.5, respectively, have been
satisfied. Contributions pursuant to this paragraph 3.6(a) shall be
allocated in accordance with Article 4 and the Participants receiving
such contributions shall be immediately vested in any Stock allocated
to their Stock Account.
(b) In addition to paragraph (a) above, the Company
shall contribute Stock or cash (at the option of the Company) on the
date of the Change of Control (or as soon as practicable thereafter),
on the Participant's behalf, in an amount equal to 174,074 shares of
Stock (3 1/3% of Initial Outstanding Shares) less the value of any
amount that the Company has previously contributed pursuant to
Section 3.5 hereof. The additional contribution made pursuant to
this Section 3.6(b) shall be allocated to all Participants who are
Bargaining Unit Employees on the date of the Change in Control on a
per capita basis.
(c) If any contributions provided for in this Section
3.6 cannot be allocated to a Participant because of the limitations
set forth in Sections 3.7 and 4.3, then such Participant's allocation
shall be reduced by the amount required to cause the Participant not
to exceed such limits. Any amount that is reduced under this
paragraph (c) shall be reallocated to the remaining Participants who
are Bargaining Unit Employees on the date of the Change in Control on
a per capita basis.
Section 3.7 Limitations on Contributions.
(a) No Participant shall be permitted elect to receive
Company contributions under Section 3.4 of the Plan during any
calendar year in excess of $9,500 (adjusted by the Adjustment
Factor). If a Participant's contributions to the Plan and to any
other plan, contract or arrangement maintained by the Company during
any calendar year would exceed $9,500 (as adjusted by the Adjustment
Factor), the contributions will be deemed to be after-tax
contributions in accordance with Regulation Section 1.402(a)-1(d)(1)
and will be credited to the Participant's After-Tax Contribution
Account.
(b) The Company shall have the right, as and to the
extent that it, in its discretion, deems necessary or appropriate, to
limit contributions by any Highly Compensated Employee to the extent
necessary to assure that the Average Actual Deferral Percentage for
all Eligible Participants who are Highly Compensated Employees meets
either of the following tests:
(i) The Average Actual Deferral Percentage for Eligible
Participants who are Highly Compensated Employees for the Plan
Year shall not exceed the Average Actual Deferral Percentage
for Eligible Participants who are not Highly Compensated
Employees for the Plan Year multiplied by 1.25; or
(ii) The Average Actual Deferral Percentage for Eligible
Participants who are Highly Compensated Employees for the Plan
Year shall not exceed the Average Actual Deferral Percentage
for Eligible Participants who are not Highly Compensated
Employees for the Plan Year multiplied by two (2), provided,
that the Average Actual Deferral Percentage for Eligible
Participants who are Highly Compensated Employees does not
exceed the Average Actual Deferral Percentage for Eligible
Participants who are not Highly Compensated Employees by more
than two (2) percentage points or such lesser amount as the
Secretary of the Treasury shall prescribe to prevent the
multiple use of this alternative limitation with respect to any
Highly Compensated Employee.
(c) For purposes of this Section 3.7, the following
terms shall have the following meanings:
(i) "Actual Deferral Percentage" shall mean the ratio
(expressed as a percentage) of Contributions on behalf of the
Eligible Participant for the Plan Year to the Eligible
Participant's Compensation for the Plan Year. For purposes of
determining the Actual Deferral Percentage of a Participant who
is a Highly Compensated Employee, the Employee Contributions -
and Compensation for such Participant shall include the
contributions and Compensation of Family Members, but such
Family Members shall be disregarded in determining the Actual
Deferral Percentage for Eligible Participants who are not
Highly Compensated Employees. For purposes of this Section 3.8
"Family Members" shall mean a Participant's spouse and lineal
ascendants or descendants and the spouses of such lineal
ascendants or descendants.
(ii) "Average Actual Deferral Percentage" shall mean the
average (expressed as a percentage) of the Actual Deferral
Percentages of the Eligible Participants in a specified group.
(iii)"Eligible Participant" shall mean a Covered Employee
who is otherwise authorized under the terms of the Plan to have
contribution and employer nonelective contributions allocated
to the Participant's Pre-Tax Employee Contribution Account for
the Plan Year.
ARTICLE IV
ALLOCATION OF CONTRIBUTIONS
Section 4.1 Establishment of Accounts. There shall be established
a Stock Account in the name of each Participant. All shares of Stock
allocated to a Participant shall be credited to his appropriate sub-
account in his Stock Account.
Section 4.2 Allocations to Participants' Accounts.
(a) As of the last day of each Plan Year, but subject to
the limitations in Section 4.3, the Stock contributed, or acquired by
the Plan with cash contributions from the Company during the Plan
Year, in accordance with Section 3.1 shall be allocated among the
Stock Accounts of Participants who were employed both on the date of
completion of the Employee Buyout Plan and on the last day of the
applicable Plan Year, on a per capita basis, except that Bargaining
Unit Employees who are scheduled to work part-time (as defined in the
Collective Bargaining Agreements) and any Bargaining Unit Employee
who first becomes a Participant during such Plan Year shall receive
one-half the number of shares granted to full-time Bargaining Unit
Employees.
(b) The Stock contributed by the Company during the Plan
Year, in accordance with Section 3.2 shall be allocated to
Participants who were employed for at least six months of the
applicable Plan Year and are employed on the last day of the Plan
Year, on a per capita basis, except that Bargaining Unit Employees
who are scheduled to work part-time (as defined in the Collective
Bargaining Agreements) and any Bargaining Unit Employee who first
becomes a Participant during such Plan Year shall receive one-half
the number of shares granted to full-time Bargaining Unit Employees.
(c) The Stock contributed by the Company during the Plan
Year in accordance with Section 3.3 shall be allocated among the
Stock Accounts of Participants who are employed on the last day of
the Plan Year, on a per capita basis, except that Bargaining Unit
Employees who are scheduled to work part-time (as defined in the
Collective Bargaining Agreements) and any Bargaining Unit Employee
who first becomes a Participant during such Plan Year shall receive
one-half the number of shares granted to full-time Bargaining Unit
Employees.
(d) The Stock contributed by the Company on the behalf
of Participants during the Plan Year and pursuant to Section 3.4,
shall be allocated in accordance with Participants' salary reduction
agreements.
(e) The Stock contributed by the Company during the Plan
Year, in accordance with Section 3.5, shall be allocated based on the
ratio of each Participant's Pre-Tax Contributions pursuant to Section
3.4 for such Plan Year to the total Pre-Tax Contributions of all
Participants who made Contributions pursuant to Section 3.4 for such
Plan Year.
Section 4.3 Overall Annual and Cumulative Limitations.
(a) Basic Limitations. The "annual addition" (as
defined in Section 4.5) for any Plan Year with respect to a Partici-
pant shall not exceed the least of (i) $30,000, or 25 percent of the
dollar limitation in effect for such Plan Year under Section
415(b)(l)(A) of the Code, if that is greater, (ii) 25 percent of the
Participant's total compensation for the Plan Year (including
bonuses, commissions and overtime pay, but excluding any amounts
which would not be included in his compensation for purposes of
Section 415 of the Code), or (iii) the maximum amount that can be
allocated to the Participant without resulting in the sum of the
Participant's defined benefit fraction (within the meaning of Section
415(e)(2) of the Code) and the Participant's defined contribution
fraction (within the meaning of Section 415(e)(3) of the Code)
exceeding 1.0 for such Plan Year. For the purpose of this Section,
all defined benefit plans (whether or not terminated) of the
Company and Affiliates shall be treated as a single defined benefit
plan and all defined contribution plans (whether or not terminated)
of the Company and Affiliates shall be treated as one defined
contribution plan.
(b) Adjustments. To the extent that the annual addition
otherwise allocable to a Participant exceeds the limitation pre-
scribed in this Section 4.3, the annual addition to the Stock Account
of a Participant shall be reduced by such portion of such excess as
the Committee determines is necessary to reduce the annual addition
to an amount that complies with such limitation; provided, however,
any such reduction in the annual addition under this Plan shall be
made only after (x) the projected annual benefit of the Participant
has been reduced to the maximum extent possible pursuant to the terms
of any defined benefit plans of the Company and Affiliates (if the
limit described in clause (iii) of Section 4.3(a) may be exceeded)
and then (y) the maximum possible reduction is made in the annual
addition to the accounts of the Participant under all other defined
contribution plans of the Company and Affiliates (if any limit may
be exceeded). To the extent the contributions are reduced as
provided for herein, contributions made pursuant to Sections 3.4 and
3.5 shall be reduced before any other amounts.
Section 4.4 Basis for Limitation Computations. All computations
with respect to the limitations under this Article on annual
additions shall be made on the basis of each Plan Year, pursuant to
the rules set forth in Section 415 of the Code and the regulations
promulgated thereunder which are herein incorporated by this
reference.
Section 4.5 Definitions for Limitation Computations. As used
herein, the term "annual addition" means, with respect to any Active
Participant, the sum of (i) with respect to this Plan, that
percentage of the Company' contributions allocated to the Partici-
pant's Stock Account as of the end of the Plan Year pursuant to Sec-
tion 4.3 and (ii) with respect to other defined contribution plans
(as defined in Section 414(i) of the Code) maintained by the
Company and Affiliates, (1) all contributions made by the Company
and Affiliates allocable to the Participants' account and (2) all
contributions made by a Participant thereunder.
ARTICLE V
VALUATION OF FUND AND ADJUSTMENTS TO ACCOUNTS
Section 5.1 Determination of Number of Shares of Stock and Market
Value. Subject to Section 9.6, the Trustee, or investment manager if
so designated, shall determine the current fair market value of all
assets held in the Trust Fund as of each Valuation Date.
Section 5.2 Adjustments for Net Changes in Assets. As of each
Valuation Date, the Trustee shall determine the net increase or
decrease in the number of shares of Stock, and the net increase or
decrease in the current fair market value of all other assets held in
the Trust Fund since the prior Valuation Date as follows: the number
of shares of Stock credited to a Participant's Stock Account
immediately after the preceding Valuation Date shall be the number or
balance as adjusted for (i) payment of benefits under Article VIII
during the valuation period, (ii) contributions by the Company or the
Participant under Article III of the Plan, and (iii) any dividends or
other distributions issued on the Stock in the Participant's Account.
The adjustments described in this Section 5.2 shall be made each Plan
Year or other valuation period designated by the Committee before any
Stock or other amounts are allocated to Participants' Stock Accounts
with respect to such Plan Year or valuation period pursuant to
Section 4.3.
Section 5.3 Treatment of Expenses. All expenses incurred by the
Committee and the Trustee in connection with administering the Plan
and the Trust Fund shall be paid by the Trustee from the Trust Fund
to the extent the expenses have not been paid or assumed by the
Company within 30 days of a request for such payment by the Trustee.
ARTICLE VI
ROLLOVERS
Section 6.1 Direct Rollovers and Rollover Notices.
Notwithstanding any provision in the Plan to the contrary that would
otherwise limit a distributee's election under this Section, a
Participant or other distributee under the Plan may elect to have any
portion of an eligible rollover distribution paid directly to an
eligible retirement plan specified by the distributee in a direct rollover.
Any such election shall be made at the time and in the
manner prescribed by the plan administrator and shall be subject to
any uniform restrictions or limitations (permissible under Section
401(a)(31) and other applicable Code provisions) that the plan
administrator may impose under rules adopted by it.
To the extent and in the manner required by Section
402(f) of the Code, each distributee who is to receive an eligible
rollover distribution from the Plan shall be notified of the special
Federal income tax provisions applicable to such distribution.
For purposes of this Section, the following definitions
shall apply:
(a) An "eligible rollover distribution" is any lump sum
payment or other distribution of all or any portion of the
balance to the credit of the distributee, except that an
eligible rollover distribution does not include: (i) any life
annuity or other distribution that is one of a series of
substantially equal periodic payments (not less frequently than
annually) made for the life (or life expectancy) of the
distributee or the joint lives (or joint life expectancies) of
the distributee and the distributee's designated beneficiary,
or for a specified period of 10 years or more; (ii) any
distribution to the extent such distribution is required under
Section 401(a)(9) of the Code; and (iii) the portion of any
distribution that is not includible in gross income (determined
without regard to the exclusion for net unrealized appreciation
with respect to employer securities).
(b) An "eligible retirement plan" is an individual
retirement account described in Section 408(a) of the Code, an
individual retirement annuity described in Section 408(b) of
the Code, an annuity plan described in Section 403(a) of the
Code, or a qualified trust described in Section 401(a) of the
Code, that accepts the distributee's eligible rollover
distribution. However, in the case of an eligible rollover
distribution to the surviving spouse, an eligible retirement
plan is an individual retirement account or individual
retirement annuity.
(c) A "distributee" includes a Participant (whether or
not he has terminated employment). In addition, the
Participant's surviving spouse and the Participant's spouse or
former spouse who is the alternate payee under a qualified
domestic relations order, as defined in Section 414(p) of the
Code, are distributees with regard to the interest of the
spouse or former spouse.
(d) A "direct rollover" is a payment by the Plan to the
eligible retirement plan specified by the distributee.
Section 6.2 Waiver of 30-Day Notice. If a Participant receives a
distribution to which Sections 401(a)(11) and 417 of the Code do not
apply, such distribution may commence less than 30 days after the
notice required under Section 1.411(a)-11(c) of the Income Tax
Regulations is given, provided that:
(a) the Plan Administrator clearly informs the
Participant that such Participant has a right to a period of at least
30 days after receiving the notice to consider the decision of
whether or not to elect a distribution (and, if applicable, a
particular distribution option), and
(b) the Participant, after receiving the notice,
affirmatively elects a distribution.
ARTICLE VII
VESTING AND FORFEITURES
Section 7.1 Vesting Schedule. A Participant shall be fully
vested at all times in his Stock Account.
Section 7.2 Vesting and Nonforfeitability. A Participant's
interest in his Stock Account which has become vested shall not be
forfeited for any reason.
ARTICLE VIII
PAYMENT OF BENEFITS
Section 8.1 Distributions to Participants. Except as
otherwise provided below, any Participant who incurs a Termination of
Employment may elect to receive the vested balance in his Stock
Account (i) in a single lump sum as soon as practicable after the
Valuation Date coincident with or next following the Participant's
Termination of Employment or (ii) in up to two approximately equal
annual installments (but in no event shall installment payments be
permitted over a period exceeding the Participant's life expectancy)
commencing as soon as practicable after the Valuation Date coincident
with or next following the Participant's Termination of Employment.
If the Participant's vested balance in his Stock Account
is more than $3,500 (as valued in accordance with Section 9.6),
unless the Participant elects an earlier payment, no distribution
shall commence prior to the later of the date the Participant reaches
Normal Retirement Age or has a Termination of Employment. Such
Participant's vested balance in his Stock Account shall be
distributed as soon as practicable following the Valuation Date
coincident with or next following the later of the date the
Participant reaches Normal Retirement Age or has a Termination of
Employment. If a Participant's vested balance in his Stock Account
is $3,500 or less (as valued in accordance with Section 9.6) at his
Termination of Employment, the Participant shall receive an immediate
lump sum distribution of such interest as soon as practicable after
the Valuation Date coincident with or next following his Termination
of Employment. In any event, distribution of the vested balance of a
Participant's Stock Account shall commence no later than the April
1st next following the end of the calendar year in which he reaches
age 70-1/2, regardless of whether he is employed on such date.
Section 8.2 Distributions to Beneficiaries. If a
Participant's employment is ended by his death, or if a Participant
has any vested interest in his Stock Account at his Termination of
Employment and he dies before all of his benefits are paid, his
vested interest in his Stock Account shall be paid to his
Beneficiary. The Beneficiary's benefits will be paid as soon as
practicable in a single lump sum (as valued in accordance with
Section 9.6) not later than the end of the 60-day period commencing
on the first day of the Plan Year commencing on or after the date of
the Participant's death.
Section 8.3 Distributions in Shares of Stock. Except as
provided in Section 8.1 or 8.2, a Participant's benefits shall be
paid in shares of Stock, provided, however, that the value of any
fractional share of Stock shall be paid in cash.
Section 8.4 Delay in Benefit Determination. If the
Committee is unable to determine the benefits payable to a
Participant or Beneficiary on or before the latest date prescribed
for payment pursuant to Section 8.1 or 8.2, the benefits shall in any
event be paid within 60 days after they can first be determined, with
whatever make-up payments may be appropriate in view of the delay.
Section 8.5 Accounting for Benefit Payments. Any benefit
payment shall be charged to the Participant's Stock Account as of the
first day after the Valuation Date coincident with or next preceding
the date of such benefit payment.
Section 8.6 Designation of Beneficiaries. A Participant may
designate a Beneficiary or Beneficiaries (in any order of priority)
by written notice filed with the Committee, and may change his
designated Beneficiary at any time by designating a new Beneficiary
or Beneficiaries in the same manner, and no notice need be given to
any prior designated Beneficiary; provided, however, that a Partici-
pant's Beneficiary shall be the Participant's surviving spouse, if
any, unless (i) such spouse consents in writing to the designation of
another beneficiary acknowledging the effect of such designation and
the nonspouse Beneficiary (including class of Beneficiaries or any
contingent Beneficiaries) designated by the Participant, and such
consent is witnessed by a notary public or the Plan Administrator, or
(ii) it is established to the satisfaction of the Committee that such
consent may not be obtained because there is no spouse, because the
spouse cannot be located, or because of such other circumstances as
prescribed by regulations issued under Section 417 of the Code. Any
consent by a spouse under the preceding sentence shall be irrevocable
but shall be effective only with respect to such spouse. Consent by
a Participant's spouse shall not be necessary if a prior consent by
the Participant's spouse expressly permits the Participant to make
designations and changes without the spouse's subsequent consent. If
no beneficiary as designated or provided for above shall survive a
deceased Participant, the payment of any death benefit shall be made
to the Participant's surviving spouse, if any, or, if none, to such
of his descendants as shall survive him, if any, in equal shares, per
stirpes, or, if none, to his surviving parents, or, if none, to his
surviving brothers and sisters, or, if none, to his estate; and for
all purposes hereof, any such Beneficiary shall be treated as if he
had been designated by the Participant.
Section 8.7 Option to Have Company Purchase Stock. Any
Participant or Beneficiary who receives any Stock and any person who
receives Stock from a Participant or Beneficiary by reason of the
Participant's or Beneficiary's death or incompetency may require the
Company to purchase such Stock for its fair market value (the "put
right") as described in this Section 8.7. This put right shall apply
only to the extent that Stock is not readily tradable on an
established securities market in accordance with federal and state
securities laws and regulations. The put right shall be exercisable
by written notice to the Committee during the first 60 days after the
Stock is distributed by the Plan, and, if not exercised in that
period, during the first 60 days of the next Plan Year following the
year of distribution. If the put right is exercised, the Trustee
may, if so directed by the Committee, assume the Company's rights and
obligations with respect to purchasing the Stock, provided that the
Company provides the Trustee with such funds as and when needed to
effect such purchases. (Any Stock repurchased by the Trustee
hereunder shall be used to satisfy the Company's obligations under
Article III and shall be allocated to Participants in accordance with
the provisions of Article 4. The Company or the Trustee (if so
directed by the Committee) may elect to pay for the Stock in equal
periodic installments (not less frequent than annually) over a period
not longer than two years from the date the put right is exercised,
with interest accruing on the unpaid balance at a reasonable rate to
be determined by the Committee, in its sole discretion, and the first
installment to be paid not later than 30 days after the Participant
exercises the put option. Nothing contained herein shall be deemed
to obligate the Company to register any Stock under any federal or
state securities law or to create a public market to facilitate
transferability of Stock.
ARTICLE IX
ORGANIZATION OF PLAN COMMITTEE;
ADMINISTRATION OF PLAN
Section 9.1 The Committee. The Plan shall be administered by a
Committee composed of not less than two members, to be appointed by
the Board, each of whom is a director, officer or employee of the
Company. Each member of the Committee shall serve at the will of the
Board and without compensation. Any person may serve in more than
one fiduciary capacity with respect to the Plan. The Committee is
the "named fiduciary" of the Plan within the meaning of ERISA and the
"plan administrator" of the Plan within the meaning of and for the
purposes of ERISA.
Section 9.2 Committee Action, Rules and Expenses. The Committee
shall appoint a chairperson and a secretary from among its members
approved by a majority of its members. Any action by the Committee
shall be taken by a vote of the majority of its members present at a
meeting, at which at least two members are present, or signed by a
majority of its members in writing without a meeting. A quorum shall
consist of two members. Minutes of each meeting shall be kept and
other appropriate books and records shall be maintained by the
Committee. The Committee may establish such rules as may be
necessary or desirable for its own operations. The proper expenses
of the Committee in the performance of its duties, including fees for
legal, clerical, accounting, appraisal and other services rendered to
the Committee shall be paid by the Trustee out of the Trust Fund
unless paid by the Company.
Section 9.3 Plan Administered By Committee. The Committee shall
administer the Plan and shall have complete control in the
administration thereof. In exercising any of its discretionary
powers with respect to the administration of the Plan, the Committee
shall act in a uniform and nondiscriminatory manner and for the ex-
clusive benefit of Participants and their Beneficiaries. The Board
shall have no responsibility for the operation of the Plan, except as
otherwise provided herein. The Committee shall have all powers which
are reasonably necessary to carry out its responsibilities under the
Plan including, but not by way of limitation, the power to construe
the Plan and to determine all questions that shall arise thereunder,
and shall also have all the powers elsewhere in the Plan conferred
upon it. Except as otherwise provided herein, the decision of the
Committee as to any disputed question arising hereunder, including
questions of construction, interpretation and administration shall be
final, binding and conclusive.
Section 9.4 Retention of Advisors and Service-Providers. The
Committee may employ one or more persons to render advice with regard
to any responsibility it has under the Plan or Trust. The
compensation of such person or persons shall be fixed by the
Committee and shall be paid by the trustee out of the Trust Fund
unless paid by the Company.
Section 9.5 Instructions to Trustee, Funding Policy. The
Committee shall give instructions or directions to the Trustee on all
matters within the Committee's discretion under the terms of the
Trust. All disbursements by the Trustee, except for the reasonable
expenses of administration of the Trust, shall be made upon, and in
accordance with, the written instructions of the Committee. The
Committee shall have the power and the responsibility to establish
and carry out a funding policy and method consistent with the objec-
tives of the Plan and the requirements of ERISA.
Section 9.6 Valuation of Stock. As long as shares of Stock are
not readily tradable on an established securities market, the fair
market value of a share of Stock as of the end of each Plan Year and
as of any other time shall, to the extent required pursuant to ERISA
and the Code, be determined by an independent appraiser retained for
such purpose by the Committee. To the extent permitted under ERISA,
the Committee shall be protected in relying upon the independent
appraiser's determination of the fair market value of a share of
Stock.
Section 9.7 Voting of Stock. To the extent that Stock held by the
Trust Fund is entitled to be voted, and notwithstanding the Trustee's
general authority to vote any Stock held by the Trust Fund, each
Participant shall be entitled to direct the Trustee as to the manner
in which such voting rights with respect to the shares of Stock
allocated to his Stock Account will be exercised.
Section 9.8 Power of Delegation. The Committee may allocate among
its members or delegate to any person who is not a member of the
Committee any administrative responsibility which it has hereunder.
The responsibility of the Committee with respect to the management or
control of the assets of the Trust Fund may be delegated or allocated
to the Trustee or to an "investment manager" within the meaning of
ERISA. Any delegation or allocation of a responsibility pursuant to
this Section shall be evidenced by the minutes of the meeting of the
Committee at which such delegation or allocation was approved or, if
no such meeting was held, by the writing under which such action was
taken.
Section 9.9 Communication By Committee. Decisions and directions
of the Committee may be communicated to the Trustee, a Participant, a
Beneficiary, the Company or any other person who is to receive such
decision or direction by a document signed by any one or more members
of the Committee (or persons other than members) so authorized, and
such decision or direction of the Committee may be relied upon by the
recipient as being the decision or direction of the Committee. The
Committee may authorize one or more of its members, or a designee who
is not a member, to sign on behalf of the entire Committee.
Section 9.10 Reports of the Committee. The Committee shall
report to the Board, not less often than annually, on the performance
of its responsibilities and on the performance of any persons to whom
any of its powers and responsibilities may have been delegated pursu-
ant to Section 9.8.
Section 9.11 Resignation or Removal of Committee Member. Any
member of the Committee may resign by giving written notice to the
Board not less than 30 days before the effective date of his
resignation. Any member of the Committee may be removed, with or
without cause, at any time by the Board. The Board shall fill
vacancies in the Committee as soon as is reasonably possible after a
vacancy occurs and, until a new appointment is made, the remaining
members shall have full authority to act.
ARTICLE X
CLAIMS PROCEDURE
Section 10.1 Claim for Benefits. Any request for a benefit payable
under the Plan shall be made in writing by a Participant or
Beneficiary (or an authorized representative of either of them), as
the case may be, and shall be delivered to any member of the
Committee. Such written request shall be deemed filed upon receipt
thereof by the Committee. Such request shall be made within the time
prescribed in the Plan for claiming a particular benefit or, if no
time is so prescribed, within a reasonable time before payment of the
benefit is to commence.
Section 10.2 Request for Additional Information. In the event a
request for benefits contains insufficient information, the Committee
shall, within 15 days after receipt of such request, send a written
notification to the claimant setting forth a description of any addi-
tional material or information necessary for the claimant to perfect
the claim and an explanation of why such material is necessary. The
claimant's request shall be deemed filed with the Committee on the
date the Committee receives in writing such additional information.
Section 10.3 Committee Claim Determination. The Committee shall
make a determination with respect to a request for benefits within 90
days after such request is filed (or within such extended period
prescribed below). The Committee shall notify the claimant whether
his claim has been granted or whether it has been denied in whole or
in part. Such notification shall be in writing and shall be
delivered, by mail or otherwise, to the claimant within the time
period described above. If the claim is denied in whole or in part,
the written notification shall set forth, in a manner calculated to
be understood by the claimant:
(a) the specific reason or reasons for the denial;
(b) specific reference to pertinent provisions of the
Plan on which the denial is based;
(c) any additional material or information necessary for
the claimant to perfect the claim as well as an explanation of
why such material or information is necessary; and
(d) an explanation of the Plan's claim review procedure.
Failure by the Committee to give notification pursuant to this
Section within the time prescribed shall be deemed a denial of the
request for the purpose of proceeding to the review stage.
Section 10.4 Extension of Claim Processing Time. If special
circumstances require an extension of time for processing the claim,
the Committee shall furnish the claimant with written notice of such
extension. Such notice shall be furnished prior to the termination
of the initial 90-day period and shall set forth the special cir-
cumstances requiring the extension and the date by which the
Committee expects to render its decision. In no event shall such
extension exceed a period of 90 days from the end of such initial 90-
day period.
Section 10.5 Claims Appeal Procedure. A claimant whose request for
benefits has been denied in whole or in part, or his duly authorized
representative, may, within 60 days after written notification of
such denial, file with the Committee a written request for a review
of his claim. Such written request shall be deemed filed upon
receipt of same by the Committee.
Section 10.6 Submission of Comments By Claimant. A claimant who
timely files a request for review of his claim for benefits, or his
duly authorized representative, may review pertinent documents (upon
reasonable notice to the Committee) and may submit the issues and his
comments to the Committee in writing. The Committee shall, within 60
days after receipt of the written request for review (or within such
extended period prescribed below), communicate its decision in
writing to the claimant and/or his duly authorized representative
setting forth, in a manner calculated to be understood by the
claimant, the specific reasons for its decision and the pertinent
provisions of the Plan on which the decision is based. If the
decision is not communicated within the time prescribed, the claim
shall be deemed denied on review.
Section 10.7 Extension of Claim Appeal Processing Time. If special
circumstances require an extension of time beyond the 60-day period
described above for the Committee to render its decision, such as the
need for holding a conference as provided below, the Committee shall
furnish the claimant with written notice of the extension required.
Such notice shall be furnished prior to the termination of the
initial 60-day period and shall set forth the special circumstances
requiring the extension period. In no event shall such extension
exceed a period of 60 days from the end of such initial 60-day
period.
Section 10.8 Claimant's Right to a Conference. If the claimant so
requests in his timely application for review, the Committee shall
schedule a conference with the claimant (and/or his duly authorized
representative). Such conference shall be held at the offices of the
Company at a date and time which is mutually agreed upon by the
parties concerned, provided that in no event shall the conference be
held more than 60 days after the Committee receives the claimant's
written request for review of his claim.
ARTICLE XI
TRUST FUND
Section 11.1 Creation of Trust Fund. The Trust Fund, created under
the Trust Agreement entered into by the Company, consists of all
payments to the Trustee as provided herein, together with the net
increase or decrease of the Common Stock which shall be produced by
the investments of the Trust Fund or the sale of any such
investments, which shall be added to or deducted from the Trust Fund
by the Trustee. The Trust Fund shall be held, administered and
invested in the manner provided in the Trust Agreement.
Section 11.2 No Right to Assets. All assets of the Trust Fund
shall be owned by the Trustee and no asset shall be considered as
belonging to any particular Account of a Participant or Beneficiary.
Section 11.3 Benefits Provided Solely By Trust. All benefits
payable under the Plan shall be paid or
provided for solely from the Trust Fund, and the Company assume no
liability or responsibility therefor.
ARTICLE XII
AMENDMENTS
The Board reserves the right at any time and from time to
time, and retroactively if appropriate (including to the extent
deemed necessary to meet the requirements of Section 401(a) of the
Code, ERISA and any other laws), to modify or amend in whole or in
part any or all of the provisions of the Plan; provided, however,
that no such modification or amendment may be made which would cause
or permit any part of the assets of the Trust Fund to be used for, or
diverted to, purposes other than for the exclusive benefit of
Participants or their Beneficiaries, or which would cause any part of
the assets of the Trust Fund to revert to or become the property of
the Company except as provided in Section 13.5 hereof; and provided,
further, that, no such modification or amendment shall be made which
would substantially and adversely affect the contributions or
benefits of the Participants without the written approval of the
unions subject to the Collective Bargaining Agreements which are
adversely affected.
ARTICLE XIII
TERMINATION; DISCONTINUANCE OF
CONTRIBUTIONS; MERGER OF PLANS;
ADOPTION CONDITIONED UPON QUALIFICATION
Section 13.1 Right to Terminate Plan. While the Company
intends to continue the Plan indefinitely, nevertheless it assumes no
contractual obligation as to its continuance and the Board may
terminate the Plan at any time in its discretion. Upon a termination
of the Plan, no portion of the Trust Fund shall revert to the Company
or an Affiliate or, after payment of all expenses of the Plan and
Trust, be used for any purpose other than for the exclusive benefit
of Participants and their Beneficiaries; except as provided in
Section 13.5 hereof.
Section 13.2 Discontinuance of Contributions. To the extent
permitted by law, after a complete discontinuance of contributions by
the Company, the Plan and the Trust shall continue until all Stock
Accounts have been distributed. The Stock Account of each person
affected by a complete discontinuance of contributions shall be
distributed in any of the ways provided herein for the distribution
of benefits upon a termination of employment. Such distribution may
be postponed until the time it would otherwise have commenced had
there been no such discontinuance; provided, however, that the
Trustee shall, at the direction of the Committee, distribute the
amount in the Stock Account of such persons so affected at any prior
time.
Section 13.3 Evidence of Termination. A certified copy of
any resolution terminating the Plan, in whole or in part, shall be
delivered to the Committee and the Trustee.
Section 13.4 Merger of Plans. In the case of any merger or
consolidation of the Plan with, or any transfer of assets or
liabilities of the Plan to, any other plan, each Participant shall be
entitled to receive a benefit if the Plan were to terminate
immediately after the merger, consolidation or transfer, which is not
less than the benefit he would have been entitled to receive if the
Plan had terminated immediately before the merger, consolidation or
transfer.
Section 13.5 Plan Adoption Conditioned Upon Qualification.
Notwithstanding any other provision of the Plan, the adoption of the
Plan and the execution of the Trust Agreement are conditioned upon an
initial determination by the Internal Revenue Service that the Plan
meets the qualification requirements of Section 401(a) of the Code so
that the Company may deduct currently for federal income tax
purposes its contributions to the Trust and so that the Participants
may exclude the contributions (other than Participant After-Tax
Contributions) from their gross income and recognize income only when
they receive benefits. In the event that this Plan is determined by
the Internal Revenue Service not to qualify initially under Section
401(a) of the Code, the Plan may be amended retroactively to the
earliest date permitted by U.S. Treasury Regulations in order to
secure qualification under Section 401(a) of the Code. If this Plan
is held by the Internal Revenue Service not to qualify initially
under Section 401(a) of the Code as originally adopted or as so
amended, Company's contributions to the Trust under this Plan
(including any earnings thereon) shall be returned to it and this
Plan shall be terminated.
ARTICLE XIV
MISCELLANEOUS
Section 14.1 Alternative Payees in the Event of Incapacity.
If any person to whom a benefit is payable hereunder is a minor or if
the Committee determines that any person to whom such benefit is
payable is incompetent by reason of physical or mental disability,
the Committee may cause the payments becoming due to such person to
be made to another for his benefit without responsibility of the
Committee or the Trustee to see to the application of such payments.
Any payments made pursuant to such power shall, as to such payment,
operate as a complete discharge of the Trust Fund, the Trustee and
the Committee.
Section 14.2 Nonassignment of Benefits, Qualified Domestic
Relations Orders. Except as otherwise provided by law, including
pursuant to a "qualified domestic relations order" (as defined in
Section 414(p) of the Code), the interest of any Participant or
Beneficiary in the Trust Fund shall not be subject in any manner to
anticipation, alienation, sale, transfer, assignment, pledge, encum-
brance or charge, whether voluntary or involuntary, and any attempt
to so anticipate, alienate, sell, transfer, assign, pledge, encumber
or charge the same shall be void; nor shall any such distribution or
payment be in any way liable for or subject to the debts, contracts,
liabilities, engagements or torts of any person entitled to such
distribution or payment. If any Participant or Beneficiary is
adjudicated bankrupt or purports to anticipate, alienate, sell,
transfer, assign, pledge, encumber or charge any such distribution or
payment, voluntarily or involuntarily, the Committee, in its
discretion, may hold or cause to be held or applied such distribution
or payment or any part thereof to or for the benefit of such
Participant or Beneficiary in such manner as the Committee shall
direct. A determination by the Committee that a domestic relations
order constitutes a qualified domestic relations order shall be
binding and conclusive as to all parties. The Committee shall
establish reasonable procedures to determine the qualified status of
domestic relations orders and to administer distributions under such
qualified orders.
Section 14.3 Plan Creates No Employment Rights. This Plan
shall not be deemed to constitute a contract of employment between
the Company and any employee or other person whether or not in the
employ of the Company, nor shall anything herein contained be deemed
to give an employee or any other person, whether or not in the employ
of the Company, any right to be retained in the employ of the
Company, or to interfere with the right of the Company to discharge
an employee at any time or to treat him without any regard to the
effect which such treatment might have upon him as a Participant in
the Plan, or any right to any payment whatsoever, except to the
extent expressly provided for hereunder.
Section 14.4 Limit on Company Liability. No person shall
have any right or interest in the Trust Fund other than as provided
herein. All benefits under the Plan shall be paid or provided solely
from the Trust Fund and the Company assume no responsibility
therefor. Any final payment or final distribution to any Participant
or Beneficiary in accordance with the provisions of the Plan shall be
in full satisfaction of all claims against the Trust Fund, the
Trustee, the Committee, the Company, the Board and any fiduciary
with respect to the Plan or Trust. The Trustee or the Committee may
require any Participant or Beneficiary to execute a receipt and a
general release of any and all such claims upon a final payment or
final distribution, or a receipt to the extent of any partial payment
or partial distribution.
Section 14.5 Nondiversion of Assets. Notwithstanding
anything to the contrary contained in this Plan, or in any amendment
hereto, it shall be impossible, at any time prior to the satisfaction
of all liabilities with respect to the Participants or their
Beneficiaries under the Plan, for any part of the Trust Fund, other
than such part as is required to pay taxes and expenses of adminis-
tration of the Plan, to be used for, or diverted to, purposes other
than for the exclusive benefit of the Participants or their Benefici-
aries under the Plan; provided, however, that in the event that the
Committee shall certify that (i) any contribution has been made by
the Company by a mistake of fact, (ii) a contribution to the Trust
has been conditioned on qualification of the Plan under Section
401(a) of the Code and that such qualification has been denied or
(iii) a contribution has been conditioned upon the deductibility
thereof under Section 404 of the Code and that such deduction has
been disallowed, and shall direct the return of such contribution,
the Trustee shall return such contribution (or the value thereof if
lower than the amount of such contribution) to the Company in
accordance with such direction, but in no event shall any such return
be made other than prior to the expiration of one year following the
payment thereof in the case of a direction under (i) above, the
denial of qualification in the case of a direction under (ii) above,
or the disallowance of the deduction in the case of a direction under
(iii) above.
Section 14.6 Missing Participants and Beneficiaries. If a
Participant or any Beneficiary cannot be located after a reasonable
period of time but in any event prior to the date which such
Participant's or Beneficiary's benefit would escheat under the
applicable state law, such Participant's Stock Account or such
Beneficiary's interest shall be forfeited. If such Participant or
Beneficiary shall contact the Committee, the amount forfeited shall
be restored, to the extent possible, from forfeitures arising during
the then current Plan Year or otherwise by Company contributions
which shall be in addition to those provided for under Article III
and allocated to the restored account.
Section 14.7 Indemnification of Committee Members. The
Company shall indemnify each member of the Committee, each member of
the Board, and any employee of the Company to whom a fiduciary
responsibility with respect to the Plan is allocated or delegated
from and against all liabilities, costs and expenses (including
reasonable attorneys' fees) incurred by such person as a result of an
act, omission or conduct in connection with the performance of his
fiduciary duties, responsibilities and obligations under the Plan and
under ERISA, except with respect to liabilities and claims arising
from such person's own wilful misconduct or gross negligence. the
Company may obtain, pay for and maintain a policy or policies of
insurance, the proceeds of which may be used in satisfying their
obligations under this Section.
Section 14.8 Plan Headings. The headings in this Plan have
been inserted for convenience of reference only, and are to be
ignored in any construction of the provisions hereof.
Section 14.9 Number and Gender. In the construction of this
Plan, the masculine shall include the feminine and the singular the
plural, and vice versa, in all cases where such meanings would be
appropriate.
Section 14.10 Separability of Provisions. If any provision of
this Plan or the application of such provision to any person or
circumstance shall be held invalid, the remainder of this Plan (and
the application of such provision to any person or circumstance other
than the person or circumstance to which it is held invalid) shall
not be affected thereby.
Section 14.11 Interpretation of Provisions. The Company
intend this Plan and the Trust to be a qualified stock bonus plan
under Section 401(a) of the Code and to satisfy any applicable
requirement under ERISA. Accordingly, the Plan and Trust Agreement
shall be interpreted and applied in a manner consistent with this
intent, and to the extent not inconsistent therewith, in accordance
with the laws of the State of Oklahoma.
IN WITNESS WHEREOF, and as evidence of the adoption of
this Plan effective as of August 2, 1996 by the Company, it has
caused the same to be signed by its duly authorized officers this 2nd
day of August, 1996.
HOMELAND STORES, INC.
By:
ATTEST:
Homeland Holding Corporation
1996 Stock Option Plan
1. Purpose. This Homeland Holding Corporation 1996 Stock
Option Plan ("Plan") is intended as to encourage stock ownership by the
officers and the employees of Homeland Holding Corporation ("Holding")
and its subsidiaries in order to increase their proprietary interest in
the success of Homeland Holding Corporation. The term "Homeland" means
Holding and its subsidiaries.
2. Administration. The Plan shall be administered by the
Board of Directors of Holding ("Board") or, if the Board decides that
the Plan should be so administered, by a committee ("Committee") of at
least two (2) members of the Board appointed by the Board. Upon the
appointment of a Committee, the Board of Directors shall cease to
administer the Plan and the Committee shall administer the Plan.
The Board or, if there is a Committee, the Committee shall
determine the persons who may participate in the Plan and, subject to
the provisions of the Plan, the extent, the terms and the conditions of
their participation.
The interpretation and the construction by the Board or, if
there is a Committee, the Committee of any provision of the Plan or any
option granted under the Plan and any determination by the Board or, if
there is a Committee, the Committee pursuant to any provision of the
Plan or any such option shall be final and conclusive. No member of the
Board or the Committee, if any, shall be liable for any action or any
determination taken or made in good faith and the members of the Board
and the Committee, if any, shall be entitled to indemnification and
advancement of expenses as provided in the Bylaws of Holding.
3. Stock. The capital stock subject to options under the
Plan shall be authorized but unissued shares of Common Stock, par value
$0.01 per share ("Common Stock"), of Holding, subject to adjustment in
accordance with the Plan. Subject to adjustment in accordance with the
Plan, the total number of shares of Common Stock on which options may be
granted under the Plan may not exceed, in the aggregate, 263,158 shares.
If any option outstanding under the Plan expires or terminates for any
reason prior to the end of the period during which options may be
granted under the Plan, the shares of Common Stock covered by the
unexercised portion of such option may again be subject to an option
under the Plan.
4. Terms and Conditions of Stock Options. Options which are
granted under the Plan shall be "non-qualified options." Options which
qualify as "incentive stock options" under Section 422 of the Internal
Revenue Code of 1986, as amended may not be granted under the Plan.
All of the options granted under the Plan shall comply with,
and be subject to the following provisions:
4.1. Eligibility. The individuals who are eligible to
receive options under the Plan are the officers and the employees
of Homeland.
4.2. Option Price. The option price for each option shall
be not less than the fair market value as determined in accordance
with Section 5.
4.3. Term of Option. Any option granted under the Plan
shall expire and terminate on, and shall not be exercisable after,
the earliest of (a) ten (10) years from the date the option is
granted; (b) termination of the optionee's employment for cause;
and (c) forty-five (45) days after termination of the employment of
an optionee other than for cause.
Termination of employment for cause means termination due
to (a) any act of moral turpitude by an officer or an employee
which has or may have an adverse effect on Homeland or its
business, including, without limitation, commission of a felony;
(b) disloyalty to Homeland; (c) the failure or inability of an
officer or an employee to perform the duties assigned to the
officer or the employee as determined by Holding; or (d) a material
breach by an officer or an employee of the terms of his or her
employment.
4.4. Medium and Time of Payment. The Board or, if there
is a Committee, the Committee shall determine the medium and the
time of payment of the exercise price of each option granted under
the Plan. Unless the Board or the Committee otherwise determines,
the exercise price shall be paid in cash at the time at which the
option is exercised.
If so determined by the Board or the Committee, the
exercise price may (a) be paid in cash; (b) be paid by transferring
to Holding shares of Common Stock equal in value (as determined by
the Board or, if there is a Committee, the Committee) to the
exercise price; or (c) be paid in cash in an amount equal to the
par value of the shares of Common Stock with a binding obligation
to pay the balance of the exercise price on terms and subject to
conditions determined by the Board or, if there is a Committee, by
the Committee. The Board or, if there is a Committee, may at the
time that it grants an option, in its sole discretion, grant an
optionee the right to convert an unexercised option to a cash
payment equal to the difference between the exercise price and the
fair market value of the shares of Common Stock covered thereby on
the date of conversion (as determined in accordance with Section
5).
4.5. Written Agreement. Each option shall be evidenced
by a written agreement, which shall state, inter alia, the total
number of shares of Common Stock covered thereby.
4.6. Date of Exercise. The date on which options are
exercisable shall be determined by the Board or, if there is a
Committee, by the Committee. Unless the Board or the Committee
otherwise determines, each option shall become exercisable at a
rate equal to 20% of the number of shares covered thereby on the
first anniversary, 20% of the number of shares covered thereby on
the second anniversary, 20% of the number of shares covered thereby
on the third anniversary, 20% of the number of shares covered
thereby on the fourth anniversary and 20% of the number of shares
covered thereby on the fifth anniversary. After becoming
exercisable, an option may be exercised at any time and from time
to time in whole or in part until expiration or termination of the
option.
If there is a change in control of Holding, all options
granted under this Plan shall be immediately exercisable and each
optionee shall have the right to exercise the optionee's option at
any time prior to the expiration of the option.
The term "change of control" means (a) the earliest date
a new shareholder or related group of new shareholders acquires
beneficial ownership of 30% or more of the then issued and
outstanding Common Stock, (b) the date on which Holding ceases to
own all of the issued and outstanding capital stock of Homeland
Stores, Inc. or (c) the date on which Holding or Homeland Stores,
Inc. disposes of 50% or more of its assets.
4.7. Adjustments. The Board or, if there is a Committee,
the Committee may adjust the number and kind of shares covered by
each outstanding option and the price per share thereof for each
outstanding option as the Board or the Committee, as the case may
be, determines, in its sole discretion and good faith, is equitably
required to prevent dilution or enlargement of the rights of
optionees that would otherwise result from (a) any stock dividend,
stock split, combination of shares, recapitalization or other
change in the capital structure of Homeland; (b) any merger,
consolidation, separation, reorganization or partial or complete
liquidation; or (c) any other corporate transaction or event having
an effect similar to any of the foregoing events.
The Board or, if there is a Committee, the Committee may
adjust the number or kind of shares on which options may be granted
to persons participating under the Plan as the Board or, if there
is a Committee, the Committee, as the case may be, determines, in
its sole discretion and in good faith, is appropriate to reflect
any stock dividend, stock split, combination of shares,
recapitalization or other change in the capital structure of
Homeland.
No fractional shares shall be issued upon any exercise of
an option following an adjustment and the aggregate price paid
shall be appropriately reduced on account of any fractional share
not issued.
4.8. Assignability. No option is assignable or
transferable except by will or by the laws of descent and
distribution. During the lifetime of an optionee, an option is
exercisable only by the optionee.
4.9. Optionee's Agreement. If, at the time of the
exercise of any option, it is necessary, appropriate or advisable,
in order to comply with any applicable laws or regulations relating
to the sale of securities, that an optionee exercising an option
agree that the optionee will purchase the shares of Common Stock
covered by the option for investment and not with any present
intention to resell those shares or make other agreements, the
optionee will execute and deliver to Holding an agreement in form
and substance requested by Holding.
4.10. Rights as a Shareholder. An optionee has no
rights as a shareholder with respect to shares covered by an option
until the date of the issuance of the shares of Common Stock to the
optionee and only after such shares are fully paid.
4.11. Other Provisions. The written agreements
required under the Plan may contain such other terms and conditions
as the Board or, if there is a Committee, the Committee deems
appropriate or advisable.
5. Fair Market Value. Fair market value shall be determined
by the Board or, if there is a Committee, the Committee as provided in
this Section 5.
The term "fair market value" shall mean (a), if the shares are
listed on a national securities exchange, the closing price on the date
on which the fair market value is to be determined or, if none of the
shares were traded on that date, on the immediately preceding date on
which shares were traded; (b), if the shares are quoted on an
inter-dealer quotation system, the closing "asked" price on the date on
which fair market value is to be determined or, if such closing "asked"
price is not available, the last sales price on such date or, if no
shares were traded on such date, on the immediately preceding date on
which shares were traded; or (c), if the shares are not listed on a
national securities exchange or quoted on an inter-dealer quotation
system, the value determined by the Board or the Committee, as the case
may be, taking into account such factors reflecting value as they deem
appropriate.
6. Term of Plan. No stock option shall be granted pursuant
to the Plan after December 9, 2006.
7. Amendments. The Board may from time to time amend,
suspend, or discontinue the Plan or amend any option granted thereunder;
provided, however, no such action of the Board may, without approval of
the shareholders, alter the provisions of the Plan so as to (a)
materially increase the benefits accruing to participants under the
Plan; (b) materially increase the number of securities which may be
issued under the Plan; or (c) materially modify the requirements as to
eligibility for participation in the Plan and no amendment may, without
the consent of the optionee, affect any then outstanding options or
unexercised portions thereof.
8. No Obligation to Exercise Option. The granting of an
option does not impose any obligation upon the optionee to exercise the
option.
Form of Stock Option Agreement
Homeland Holding Corporation
Stock Option Agreement
(Non-Qualified Stock Option)
This Stock Option Agreement ("Agreement") is made this
day of , 199 , by and between Homeland Holding Corporation,
a Delaware corporation ("Holding"), and
, an officer and/or an employee
of Holding or a subsidiary thereof ("Holder").
In consideration of the mutual covenants hereinafter set forth
and for other good and valuable consideration, Holding and the Holder
agree as follows:
1. Grant of Stock Option. Holding hereby grants to the Holder
the right and option ("Option") to purchase an aggregate of
shares of Common Stock, par value $0.01 per share ("Common Stock"), of
Holding on the terms and subject to the conditions set forth in the
Homeland Holding Corporation 1996 Stock Option Plan ("Plan"), which is
incorporated by reference in this Agreement, and in this Agreement.
2. Purchase Price. The purchase price of the shares of
Common Stock subject to the Option shall be $ per share.
3. Option Vesting Schedule. The Option shall be exercisable
as follows:
Number of Shares First Date of Exercise
Such shares may be purchased either in whole or in part at any
time and from time to time on or after the First Date of Exercise and
prior to the Expiration Date, as defined below. The First Date of
Exercise will be accelerated as provided in Section 4.6 of the Plan.
The Board of Directors of Holding ("Board") or, if there is a
Stock Option Committee ("Committee"), the Committee may accelerate the
vesting of the Option, subject to the limitations contained in the Plan.
4. Term of Option. The Option shall expire and terminate on
the earliest of (a) ten (10) years from the date the Option is granted;
(b) termination of the Holder's employment for cause; and (c) forty-five
(45) days after the termination of the Holder's employment other than
for cause ("Expiration Date").
If the Holder dies or becomes disabled while in the employment
or service of Holding or any subsidiary thereof or within the period of
time after termination of employment or service during which the Holder
is entitled to exercise the Option, the legal representative of the
Holder shall have the right to exercise the Option during the period
which the Holder is entitled to exercise the Option.
The Holder shall have none of the rights of a shareholder with
respect to the shares of Common Stock subject to the Option until the
date of issuance of the shares to the Holder and only after such shares
are fully paid.
5. Nontransferability. The Option is not assignable or
transferable by the Holder, other than by will or the laws of descent
and distribution. During the life of Holder, the rights of the Holder
under this Agreement may be exercised only by the Holder. Any attempted
assignment or transfer, voluntarily or by operation of law, that is not
permitted by this Section 5 shall be null and void and without effect.
6. Adjustments. The Board or, if there is a Committee, the
Committee may adjust the number and kind of shares covered by the Option
and the price per share thereof as the Board or the Committee, as the
case may be, determines, in its sole discretion and good faith, is
equitably required to prevent dilution or enlargement of the rights of
the Holder that would otherwise result from (a) any stock dividend,
stock split, combination of shares, recapitalization or other change in
the capital structure of Holding; (b) any merger, consolidation,
separation, reorganization or partial or complete liquidation; or (c)
any other corporate transaction or event having an effect similar to any
of the foregoing events.
7. Investment Intent. The Holder represents and agrees for
the Holder and the Holder's legal representatives that any shares
purchased under the Option will be acquired for investment only and not
with a view to distribution.
8. Exercise of Option. The Option may be exercised by
delivering to the Secretary of Holding notice in writing (in form
satisfactory to Holding) of the Holder's election to exercise the Option
for a specified and permitted number of shares of Common Stock and by
paying to Holding, in the form designated by the Board or, if there is a
Committee, by the Committee, the purchase price for the shares of Common
Stock for which the Option is being exercised.
9. Governing Law; Interpretation. This Agreement shall be
subject to, and governed by, the laws of the State of Oklahoma
irrespective of the fact that one or more of the parties now is, or may
become, a resident of a different state. The Option is subject to the
terms and conditions of the Plan, a copy of which may be examined during
the business hours of Holding at its principal offices in Oklahoma City,
Oklahoma. To the extent there is any conflict or inconsistency between
the Plan and this Agreement, the Plan shall control. Any question of
interpretation or construction of the Plan or this Agreement shall be
determined by the Board or, if there is a Committee, the Committee and
such determination shall be final and binding upon Holding and the
Holder.
10. Section Headings. Section headings contained in this
Agreement are for reference purposes only and shall not affect in any
way the meaning or interpretation of this Agreement.
IN WITNESS WHEREOF, Holding has caused this Agreement to be
duly executed by its officers thereunto duly authorized, and the Holder
has hereunto set the Holder's hand and seal, all on the day and year
first above written.
Homeland Holding Corporation
By:
Name:
Title:
Name:
EXHIBIT 23
We consent to the incorporation by reference in the registration statement
of Homeland Holding Corporation on Form S-8 (File No. 33-37335) of our report
dated March 24, 1997, on our audits of the consolidated financial statements
of Homeland Holding Corporation and Subsidiary as of December 28, 1996,
and December 30, 1995, and for the 20 weeks ended December 28, 1996, 32 weeks
ended August 10, 1996, 52 weeks ended December 30, 1995, and December 31,
1994, which report is included in this Annual Report on Form 10-K.
COOPERS & LYBRAND, L.L.P.
Oklahoma City, Oklahoma
March 28, 1997
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-28-1996
<PERIOD-END> DEC-28-1996
<CASH> 1,492
<SECURITIES> 0
<RECEIVABLES> 10,109
<ALLOWANCES> 1,587
<INVENTORY> 45,009
<CURRENT-ASSETS> 57,783
<PP&E> 66,481
<DEPRECIATION> 3,012
<TOTAL-ASSETS> 168,486
<CURRENT-LIABILITIES> 37,214
<BONDS> 60,000
0
0
<COMMON> 48
<OTHER-SE> 52,893
<TOTAL-LIABILITY-AND-EQUITY> 168,486
<SALES> 527,773
<TOTAL-REVENUES> 527,773
<CGS> 398,522
<TOTAL-COSTS> 398,522
<OTHER-EXPENSES> 122,848
<LOSS-PROVISION> 25,996
<INTEREST-EXPENSE> 8,838
<INCOME-PRETAX> (28,431)
<INCOME-TAX> 0
<INCOME-CONTINUING> (28,431)
<DISCONTINUED> 0
<EXTRAORDINARY> 63,118
<CHANGES> 0
<NET-INCOME> 34,687
<EPS-PRIMARY> .50
<EPS-DILUTED> 0
</TABLE>
FOR IMMEDIATE RELEASE NEWS
Contact: James A. Demme, Chairman
(405) 879-6600
HOMELAND 4TH QUARTER SALES RESULTS
OKLAHOMA CITY, OK, February 7, 1997 -- Homeland Stores, Inc. announced today
its same-store sales for the 16-week fourth quarter ended December 28, 1996,
were 1.7% higher than the comparable quarter for 1995. In addition, the
company stated that same-store sales for the fiscal year increased by 0.3%.
Homeland plans to spend $12 million in 1997 to expand and remodel its
retail store base. Currently, there are 23 stores undergoing various capital
improvements.
Homeland is the leading supermarket chain in Oklahoma, southern, Kansas,
and the Texas panhandle region, operating a total of 66 stores. The company
operates in four distinct marketplaces: Oklahoma City, Oklahoma; Tulsa,
Oklahoma; Amarillo, Texas; and certain rural areas of Oklahoma, Kansas and
Texas.
