Exhibit 10(iii)(A)(vii)
SUPPLEMENTAL RETIREMENT PLAN FOR
SELECT SENIOR MANAGEMENT OF
MELVILLE CORPORATION
as amended through
May 12, 1989
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TABLE OF CONTENTS
Page
ARTICLE 1. Definitions........................................... 1
ARTICLE 2. Membership............................................
ARTICLE 3. Amount and Payment of Supplemental
Benefits ........................................
ARTICLE 4. Administration .......................................
ARTICLE 5. General Provisions ...................................
ARTICLE 6. Amendment or Termination .............................
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Article 1. Definitions
1.01 (a) "Annual Benefit" shall mean, with respect to a Member who became or
becomes a Retiree after December 31, 1985, the amount by which
50%, or such lesser percentage specified in clause (b) below, of
such Member's Compensation exceeds the sum of
(i) the aggregate annualized value of any retirement and/or
deferred profit sharing benefits in respect of such Member
which have previously been received or which such Member of
any other person has a vested right to receive at the time of
the commencement of payment of such Member's benefit under
Section 3.04 of the Plan, under any arrangement maintained by
the Corporation other than the Plan, computed pursuant to
clause (c) below, and
(ii) the Annual Benefit used in computing any lump sum payment
previously made pursuant to Section 3.04 to such a Member
becoming entitled to a recomputation of the Annual Benefit
pursuant to Section 3.05.
(b) In the case of any Member whose retirement allowance under Section
3.04 of the Plan commences to be paid on
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or after his reaching age 55 years but prior to his reaching age 60
years, there shall be substituted for "50%" in clause (a) above
that lower percentage which results from subtracting that
percentage which is the product of 5 times the number of whole and
partial years (treating a partial year as a whole year) until such
Member's 60th birthday so that, for example, the applicable
percentage for a Member age 58-1/2 years would be 40% (50% - (5 X
2)% = 40%).
(c) The annualized value of a Member's retirement and deferred profit
sharing benefits shall be computed as follows:
(i) with respect to any benefit which such Member is thereupon
commencing to receive at the time of such computation in the
form of an annuity, the annual payment to which such Member
would be entitled under the terms of the plan under which such
benefit is to be paid, were such benefit to be paid in the
form of a single life annuity for the Member's life,
(ii) with respect to any other benefit, the annual amount of the
actuarial equivalent of such benefit computed as if such
benefit were to be paid in the form of a single life annuity
to such Member commencing at the time of such computation. In
computing such actuarial equivalents, the
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actuarial assumptions to be used shall be (i) the mortality
tables used in calculating actuarial equivalents under the
Melville Corporation Retirement Plan at the time of such
calculation and (ii) an interest rate assumption equal to the
applicable interest rate (expressed as a percentage) used by
the Pension Benefit Guaranty Corporation for valuing benefits
for single employer plans that terminate on the date of such
calculation, minus .5%.
1.02 "Board of Directors" shall mean the Board of Directors of Melville
Corporation.
1.03 "Change in Control" shall mean any of the following occurrences: (a) any
"person" or "group of persons" as such terms are used in Section 13(d)
and 14(d) of the Securities Exchange Act of 1934 (the "Exchange Act")
purchases or otherwise becomes "beneficial owner" (as defined in Rule
13d-3 under the Exchange Act) directly or indirectly, of securities
representing 25% or more of the combined voting power of Melville
Corporation (including, without limitation, securities which may be
acquired upon the exercise of any option or options owned by such person
or group of persons to purchase any such voting securities, or
conversion of securities convertible into such voting securities,
whether or not
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such option or options or convertible securities were outstanding on the
date hereof and whether or not such options are exercisable or such
securities are convertible at the time of the Change in Control); (b)
during any period of two consecutive years, the individuals who at the
beginning of such period constitute the Board of Directors cease for any
reason to constitute at least a majority thereof, unless (i) there are
four or more directors then still in office who were directors at the
beginning of the period and (ii) the election, or the nomination for
election, by Melville Corporation's shareholders of each new director
was approved by a vote of at least two thirds of the directors then
still in office who were directors at the beginning of the period; (c)
the shareholders of Melville Corporation shall have voted to approve an
agreement to merge or consolidate Melville Corporation with or into
another corporation as a result of which less than 50% of the
outstanding voting securities of the surviving or resulting entity are
or are to be owned by the former shareholders of Melville Corporation
(excluding from former shareholders a shareholder who is an "affiliate,"
as defined in Rule 12b-2 under the Exchange Act, of any party to such
consolidation or merger); or (d) the shareholders of Melville
Corporation approve the sale
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of all or substantially all of Melville Corporation's business and/or
assets to a person or entity which is not a wholly-owned subsidiary of
Melville Corporation; provided, however, that none of the foregoing
shall be deemed to constitute a Change in Control if in connection
therewith it shall be necessary to file a Schedule 13E-3 pursuant to
Rule 13e-3 under the Securities Exchange Act of 1934, unless immediately
prior to such event the Board of Directors shall determine such event to
constitute a Change in Control.
1.04 "Compensation" shall mean the greater of (i) a Member's annual base pay
rate plus full annual normal incentive compensation award as in effect
on such Member's Compensation Measurement Date and (ii) the average of
such Member's actual base pay and incentive compensation received during
the 5 full calendar years immediately prior to such Member's
Compensation Measurement Date. A Member's Compensation Measurement Date
shall be the date on which such Member terminates employment with the
Corporation for any reason, including retirement, death or disability,
unless using the date of a Change in Control as of which such Member was
a Member would result in a higher amount in which case the date of such
Change in Control shall be such Member's Compensation Measurement Date.
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1.05 "Corporation" shall mean Melville Corporation and any subsidiary or
other entity at any time at which 50% or more of the voting power or
beneficial interest of such subsidiary or other entity, is owned
directly or indirectly by Melville Corporation. References in the Plan
to Melville Corporation shall be deemed to include successors to
Melville Corporation.
1.06 "Executive Employee" shall mean the Chairman, Vice Chairman, President
or any corporate Vice President or more senior officer of Melville
Corporation.
1.07 "Lump Sum Benefit" shall mean
(a) with respect to a Member to whom payment of benefits under
Section 3.04 has not commenced or, if previously commenced, has been
discontinued pursuant to Section 3.05, and who has made no election
under Section 3.04 or has elected a form of benefit under Section 3.04
making no provision for the Spouse, the lump sum actuarial equivalent of
a single life annuity for the Member commencing at such date (but not
prior to such Member's attaining age 60) as of which such Member would
have had 15 years of Service assuming no termination of employment with
the Corporation following a Change in Control (the "Presumed Starting
Date"), under which annuity the annual payment is equal to the Projected
Annual Benefit times a fraction, the numerator of which is such Member's
years of Service as
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of such Member's Termination of Employment (but not more than 15) and
the denominator of which is 15,
(b) with respect to (i) a Member to whom payment of benefits under
Section 3.04 has not commenced or, if previously commenced, has been
discontinued pursuant to Section 3.05 and who has elected an optional
form of benefit under Section 3.04 making a provision for the Spouse and
(ii) the Spouse of such Member, the lump sum actuarial equivalent of
that part of the benefit described in clause (a) to be paid to such
Member, or to such Spouse, respectively, pursuant to the optional form
of benefit elected by such Member under Section 3.04, or
(c) with respect to (i) a Spouse to whom payment of benefits under
Section 3.03 has commenced, (ii) a Member to whom payment of benefits
under Section 3.04 has commenced and has not been discontinued pursuant
to Section 3.05 and (iii) the Spouse of such a Member, the lump sum
actuarial equivalent of all future benefits, if any, payable to such
Member or to such Spouse, as the case may be, under the Plan.
The amount of such actuarial equivalents computed under this
Section 1.07 shall be determined by the Compensation Committee of the
Board of Directors with sole discretion using the actuarial assumptions
described in Section 1.01(c).
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1.08 "Member" shall mean any person included in the membership of the Plan as
provided in Article 2.
1.09 "Normal Retirement Date" shall mean the first day of the calendar month
next succeeding the month in which the Member's 65th birthday occurs.
1.10 "Plan" shall mean the Supplemental Retirement Plan for Select Senior
Management of Melville Corporation, as described herein or as hereafter
amended.
1.11 "Projected Annual benefit" shall mean
(a) with respect to a Member of the Plan at the time of a Change in
Control to whom payment of benefits under Section 3.04 has not
commenced, the amount by which 50% of such Member's Compensation exceeds
the sum of
(i) the aggregate annualized value of any retirement and deferred
profit sharing benefits in respect of such Member which have
previously been received or which such Member or any other person
has a vested right to receive at the time of such Member's
termination of employment under any arrangement maintained by the
Corporation, other than the Plan, computed in the manner described
in Section 1.01 (c), assuming payment of such benefits will
commence at such Member's Presumed Starting Date, as defined in
Section 1.07, and
(ii) the Annual Benefit used in computing any lump sum payment
previously made to such Member pursuant to
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Section 3.04; or
(b) with respect to a Member of the Plan at the time of a Change in
Control to whom payment of benefits under Section 3.04 has previously
commenced but who has been restored to employment with the Corporation,
the amount computed pursuant to (a) above, but in no event less than
such Member's Annual Benefit computed pursuant to Section 3.05 as if
such Member had then terminated employment with the Corporation.
1.12 "Retiree" shall mean a Member who has 15 or more years of Service and
terminates employment with the Corporation at or after age 55 for any
reason, including disability but excluding death, provided, however,
that if such Member shall be eligible upon such termination of
employment to commence to receive payments under the Retirement Plan in
which he is a participant, if any, he shall not be a Retiree unless he
commences to receive such payment upon such termination of employment.
1.13 "Retirement Administration Committee" shall mean the Retirement
Administration Committee of the Retirement Plan.
1.14 "Retirement Plan" shall mean, with respect to a participant in the
Melville Corporation Retirement Plan, said Plan or, with respect to a
Member who is not participant in said Plan, such other pension plan,
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maintained by the Corporation, meeting the requirements of Section 401
of the Internal Revenue Code of 1986, as amended, in which such Member
shall be a participant, if any.
1.15 "Service" shall mean with respect to a Member the period of such
Member's active employment with the Corporation, whether or not as an
Executive Employee.
1.16 "Spouse" shall mean the Member's lawfully married spouse (1) at the time
payments to the Member commence under the Plan or (2) in the case of
benefits payable under Section 3.03, at the time of the Member's death.
1.17 "Termination of Employment" shall have the meaning assigned to such term
in the Income Continuation Policy for Select Senior Executive of
Melville Corporation.
Article 2. Membership
2.01 Every Member of the Plan on May 12, 1988 and every Executive Employee in
the employ of the Corporation on May 12, 1988 who can complete 15 years
of Service by his Normal Retirement Date shall continue to be or shall
become a Member of the Plan on May 12, 1988, as the case may be.
2.02 Any other employee of the Corporation who becomes an Executive Employee
shall thereupon become a Member of the Plan provided he can complete 15
years of Service by his Normal Retirement Date.
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2.03 Any former employee of the Corporation who is a Retiree under the Plan
on May 12, 1988 and any Member who thereafter becomes a Retiree shall
continue to be a Member of the Plan until the later of (a) the
termination of his employment and (b) the payment of all benefits in
respect to such Retiree under the Plan.
2.04 The membership under the Plan of an Executive Employee who is not a
Retiree shall terminate if his employment with the Corporation as an
executive Employee terminates unless at the time of such termination, or
within 60 days thereafter, he becomes a Retiree or unless upon such
termination he continues to be entitled to a benefit hereunder pursuant
to Section 3.06.
2.05 A Member whose membership in the Plan terminates pursuant to Section
2.03 or Section 2.04 shall be restored to membership in the Plan at such
time as he is restored to employment as an Executive Employee of the
Corporation, provided he meets the requirements of Section 2.01 at the
time of such restoration to employment.
Article 3. Amount and Payment of Supplemental Benefits
3.01 Except as provided in Section 3.06, benefits under the Plan shall be
payable by Melville Corporation only with respect to Members who are
Retirees or become Retirees or, as provided in Section 3.03, to Spouses.
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3.02 Payment of benefits to a Retiree under the Plan shall commence upon
termination of employment with the Corporation.
3.03 In the event that a Member dies, after attaining age 55 with 15 years of
Service, prior to becoming a Retiree, or dies after becoming a Retiree
but prior to commencing to receive payments hereunder pursuant to
Section 3.04, his Spouse shall be entitled to the immediate commencement
of a single life annuity, with an annual payment equal to one-half of
the Annual Benefit, if any, computed under Section 1.01, including any
reduction under subsection (b) thereof, if applicable, for such Member
as if the Member were a Retiree and had commenced to receive payment of
benefits under Section 3.04 immediately prior to his death.
3.04 Except as provided in Section 3.06 and subject to the next succeeding
sentence, the benefit payable under the Plan to a Retiree shall be a
single life annuity for the life of the Retiree, with annual payments
equal to the annual Benefit computed under Section 1.01 for such Member
at the time of the commencement of payment of benefits under this
Section 3.04, adjusted annually to reflect the excess, if any, of the
annual retirement allowance for such year actually received by such
Retiree under any Retirement Plan over the amount
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deducted with respect to the vested benefit under such Retirement Plan
in the calculation of such Member's Annual benefit under Section
1.01(a)(i). A Member may elect in a writing filed with the Retirement
Administration Committee at least 12 months prior to the date of the
commencement of benefits hereunder to receive such benefits (a) in an
optional form permitted at the time of such election for the payment of
benefits under the Melville Corporation Retirement Plan or (b) in a lump
sum, provided, however, that (i) a Member may not name anyone as a
beneficiary under the Plan other than his Spouse and (ii) a Member may
not elect an optional form of benefit providing for a deferred
commencement date. Any such optional form of benefit or lump sum shall
be the actuarial equivalent of such single life annuity using the
actuarial assumptions described in Section 1.01(c).
3.05 If a Retiree who has terminated employment with the Corporation is
restored to employment after commencing to receive payments under
Section 3.04 of the Plan, the payment of benefits under the Plan shall
be discontinued (unless all such benefits have been previously paid in a
lump sum) and, upon such Member's subsequent termination of employment
with the Corporation for any reason, including retirement, death or
disability, the Member's Annual Benefit under the
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Plan or the Spouse's benefit under the Plan shall thereafter be
recomputed in accordance with Section 1.01, Section 3.03, Section 3.04
or Section 3.06, as applicable, and shall be payable in accordance with
the provisions of the Plan, provided, however, that such recomputation
shall be based upon the higher of (i) such Member's Compensation at the
time of such previous termination of employment and (ii) such Member's
Compensation at the time of such subsequent termination of employment.
3.06 Notwithstanding the provisions of Section 3.01 and Section 3.02, if a
Change in Control occurs:
(a) Each Member who is then a Retiree and each Spouse then entitled
to benefits under Section 3.03 or Section 3.04 shall be entitled to
receive an immediate payment in cash of such Retiree's or such Spouse's
Lump Sum Benefit.
(b) Each Member at the time of such Change in Control who
experiences a Termination of Employment, each Spouse of such a Member
who has elected an optional form of benefit under Section 3.04 making a
provision for such Spouse, and each Spouse of a Member at the time of
such Change in Control who dies within 2 years following such Change in
Control without having received a Lump Sum Benefit, shall, upon such
Termination of Employment or death, as the case may be,
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be entitled to receive an immediate payment in cash of such Member's or
such Spouse's Lump Sum Benefit.
(c) Each Member at the time of such Change in Control who neither
dies within 2 years following such Change in Control nor experiences a
Termination of Employment shall, upon such Member's later termination of
employment with the Corporation for any reason other than death, without
becoming a Retiree and, with respect to each such Member who later dies,
the Spouse of such Member is such Spouse is not otherwise entitled to a
benefit under Section 3.03, shall nevertheless be entitled to a Benefit
commencing at the Presumed Starting Date in the form specified in
Section 3.04 or Section 3.03, as the case may be, provided that in
computing such benefit there shall be substituted for the term Annual
Benefit in Section 3.04 or Section 3.03, as the case may be, the
following: the Projected Annual Benefit times a fraction, the numerator
of which is such Member's years of Service as of such Change in Control
(but not more than 15) and the denominator of which is 15.
(d) The benefits to be paid pursuant to paragraph (c) of this
Section 3.06 shall not be payable from the assets of the trust to be
established in connection with the Income Continuation Policy for Select
Senior Executives of Melville Corporation pursuant to a
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resolution of the Board of Directors on May 12, 1988.
Article 4. Administration
4.01 The administration of the Plan, the exclusive power to interpret it, and
the responsibility for carrying out it provisions are vested in the
Retirement Administration Committee, except that the determinations of
whether any Member or Spouse is entitled to payment of a Lump Sum
Benefit pursuant to Section 3.06 and the amount thereof shall be within
the exclusive authority of the Investment Committee under the Trust
Agreement to be established in connection with the Plan pursuant to a
resolution of the Board of Directors on May 12, 1988.
4.02 The provisions of Article 11 of the Melville Corporation Retirement Plan
concerning Retirement Administration Committee membership, meetings,
maintenance of records and Retirement Administration Committee powers
shall apply under the Plan. The expenses of the Retirement
Administration Committee incurred in connection with the Plan shall be
paid directly by the Corporation.
Article 5. General Provisions
5.01 Neither the establishment of the Plan nor the crediting of any Service
under Section 4.01 shall be construed as conferring any legal rights
upon any Executive Employee
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or other person for a continuation of employment, nor shall such actions
interfere with the rights of the Corporation to discharge or demote any
Executive Employee and to treat him without regard to the effect which
such treatment might have upon him as a Member of the Plan.
5.02 In the event that the Retirement Administration Committee shall find
that a Member is unable to care for his affairs because of illness or
accident, the Retirement Administration Committee may direct that any
benefit payment due him, unless claim shall have been made therefor by a
duly appointed legal representative, be paid to his spouse, a child, a
parent or other blood relative, or to a person with whom he resides, and
any such payment so made shall be a complete discharge of the
liabilities of the Plan therefore.
5.03 Melville Corporation shall have the right to deduct from each payment to
be made under the Plan any required withholding taxes.
5.04 Subject to any applicable law, no benefit under the Plan shall be
subject in any manner to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance or charge, and any attempt so to do
shall be void, nor shall any such benefit be in any manner liable for or
subject to the debts, contracts, liabilities, engagements or torts of
the Retiree.
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5.05 In the event that a Member or Retiree shall at any time be convicted of
a crime involving dishonesty or fraud on the part of such Member in his
relationship with the Corporation, all benefits which would otherwise be
payable to him under the Plan shall be forfeited.
5.06 The rights of any Member or Retiree to benefits under the Plan prior to
the actual receipt of such benefits shall be limited to those of a
general unsecured creditor of Melville Corporation.
5.07 The Plan shall be construed, regulated and administered under the laws
of the State of New York. 5.08 The masculine pronoun shall mean the
feminine wherever appropriate.
Article 6. Amendment or Termination
The Board of Directors reserves the right to modify or to amend, in whole
or in part, or to terminate, this Supplemental Retirement Plan for Select Senior
Management of Melville Corporation at any time; provided, however, that no such
modification, amendment or termination shall adversely affect the right of any
Member (or the Spouse of such Member) to receive the benefits such Member (or
the Spouse of such Member) would have received under the Plan upon termination
of employment with the Corporation for any reason, including retirement, death
or disability, had the Plan not been so modified, amended or terminated, taking
into account such Member's Service and age at
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the time of such Member's actual termination of employment with the Corporation
for any such reason.
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