EXHIBIT 10.8
THIRD AMENDMENT
TO THE
SMITH'S FOOD & DRUG CENTERS, INC.
EMPLOYEE PROFIT SHARING PLAN
WHEREAS, Smith's Food & Drug Centers, Inc. (the "Company")
has received a favorable determination letter from the Internal
Revenue Service as to the form of the Smith's Food & Drug
Centers, Inc. Employee Profit Sharing Plan, established January
3, 1993 (the "Plan"), under Section 401(a) of the Internal
Revenue Code (the "Code");
WHEREAS, in order to maintain the qualified status of the
Plan, the Internal Revenue Service has required in Revenue
Procedure 94-13 that the Plan be amended to comply with Section
401(a)(17) of the Code;
WHEREAS, in Revenue Procedure 93-47, the Internal Revenue
Service has allowed qualified plans to be amended to permit
participants to waive the 30-day notice requirement in connection
with certain distributions from such plans.
WHEREAS, the Company has established other retirement plans
for the benefit of its non-union employees, including the Smith's
Food & Drug Center, Inc. Defined Benefit (Flat Unit Benefit) Non-
Union Pension Plan and the Smith's Food & Drug Centers, Inc.
401(K) Savings Plan, and the Company contributes to various
multiemployer pension plans pursuant to collective bargaining
agreements;
WHEREAS, those retirement plans invest in a diversified
group of assets;
WHEREAS, the Company established the Plan for the purpose of
making its employees beneficial owners of stock in the Company
for the sole purpose of aligning the interests of employees with
the interests of the shareholders of the Company and thus
providing employees with greater incentives to strive for the
success of the operations of the Company; but for said purpose,
the Company would not have established the Plan;
WHEREAS, the Company desires to clarify its intent that the
Trustees of the Plan invest Plan assets exclusively in Company
common stock which is readily tradable on an established
securities market, except to the extent cash or marketable
securities are necessary to meet the liquidity needs of the Plan
or the value of Company common stock falls below a specified
level;
NOW, THEREFORE, the following amendments to the Plan are
hereby adopted:
1. Effective January 3, 1993, Section 7.5 of the Plan is
amended to add the following new paragraph at the end thereof:
If a distribution is one 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:
7.5.1 the Committee clearly informs the Participant
that the Participant has a right to a period of at last
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
7.5.2 the Participant, after receiving the notice,
affirmatively elects in writing to receive a
distribution.
2. Effective January 1, 1994, the definition of
Compensation in Article I of the Plan is amended to add the
following new paragraphs at the end thereof:
In addition to other applicable limitations set
forth in the Plan, and notwithstanding any other
provisions of the Plan to the contrary, for Plan Years
beginning on or after January 1, 1994, the annual
Compensation of each Employee taken into account under
the Plan shall not exceed the OBRA '93 annual
Compensation limit. the OBRA '93 annual Compensation
limit is $150,000, as adjusted by the Commissioner for
increases in the cost of living in accordance with
Section 401(a)(17)(B) of the Code. The cost-of-living
adjustment in effect for a calendar year applies to any
period, not exceeding 12 months, over which
Compensation is determined (determination period)
beginning in such calendar year. If a determination
period consists of fewer than 12 months, the OBRA '93
annual Compensation limit will be multiplied by a
fraction, the numerator of which is the number of
months in the determination period, and the denominator
of which is 12.
For Plan Years beginning on or after January 1,
1994, any reference in the Plan to the limitation under
Section 401(a)(17) of the Code shall mean the OBRA '93
annual Compensation limit set forth in this provision.
If Compensation for any prior determination period
is taken into account in determining an Employee's
benefits accruing in the current Plan Year, the
Compensation for that prior determination period is
subject to the OBRA '93 annual Compensation limit in
effect for that prior determination period. For this
purpose, for determination periods beginning before the
first day of the first Plan Year beginning on or after
January 1, 1994, the OBRA '93 annual Compensation limit
is $150,000.
3. Effective January 1, 1994, the definition of "Plan
Year" in Article I of the Plan is amended and restated to read,
in its entirety, as follows:
"Plan Year" means the fiscal year of the Plan and shall
be the 52- or 53-week period (depending on the ending
date of previous Plan Year) ending on the Saturday
preceding the last Friday of December of each year.
4. Effective January 1, 1994, Section 2.1 of the Plan is
amended and restated to read, in its entirety, as follows:
2.1 Years of Services. Years of Service shall
include each Plan Year during which an Employee has
completed at least 1,000 Hours of Service with the
Company.
2.1.1 Years of Service shall not include Plan
Years beginning prior to the effective date of the
Plan.
2.1.2 If a Participant who incurred a Break in
Service is reemployed by the Company, Years of Service
before such Break shall be disregarded until the
Participant has completed a Year of Service after such
Break; provided that the Participant satisfies the
conditions of 2.1.3; in which event Years of Service
before such Break shall be reinstated.
2.1.3 Subject to 2.1.2, if a Participant who
incurred a Break in Service is reemployed by the
Company, his Years of Service shall include Years of
Service to his credit at the beginning of such Break in
Service, unless (a) the Participant did not have a
vested and nonforfeitable right to any portion of his
Participant Account prior to such Break in Service, and
(b) the number of consecutive one-year Breaks in
Service equals or exceeds five.
5. Effective January 1, 1994, Section 10.3 of the Plan is
amended and restated to read, in its entirety, as follows:
10.3 Trust Fund Investments. The Trustees are
directed to invest the Trust Fund exclusively in shares
of Common Stock of the Company, except to the extent
cash or marketable securities are necessary to meet the
liquidity needs of the Plan. Notwithstanding the
foregoing, if the value of shares of Common Stock falls
below $5.00 per share, the Trustees shall be authorized
to liquidate a portion of the shares of Common Stock
held in the Trust Fund and invest in other assets to
the extent the Trustees deem appropriate for
diversification purposes. In the event that the shares
of Common Stock should, as a result of a stock split or
stock dividend or combination of shares or any other
change, or exchange for other securities, by
reclassification, reorganization, redesignation,
merger, consolidation, recapitalization or otherwise,
be increased or decreased or changed into or exchanged
for a different number or kind of shares of stock or
other securities of the Company or another company, the
foregoing dollar amount shall be appropriately adjusted
to reflect such action. The Trustees may purchase or
sell Common Stock from or to the Company (provided, the
requirements of Section 408(e) of ERISA are satisfied)
or from or to any other source, and such Common Stock
may be outstanding, newly issued or treasury
securities. The Trustees shall not borrow funds from
the Company for the purpose of purchasing Common Stock.
IN WITNESS WHEREOF, Smith's Food & Drug Centers, Inc. has
caused this instrument to be executed by its duly authorized
officer this 1st day of November, 1994.
SMITH'S FOOD & DRUG CENTERS, INC.
By: /s/ Matthew G. Tezak
Its Sr. V.P.
ATTEST:
/s/ Michael C. Frei