EXHIBIT 10(H)
CONFORMED COPY
FRED MEYER
SUPPLEMENTAL INCOME PLAN
January 1, 1994
Fred Meyer, Inc.
a Delaware corporation
PO Box 42121
Portland, Oregon 97202 Company
TABLE OF CONTENTS
Page
Index of Terms iii
1. Administration 1
1.1 Compensation Committee 1
1.2 Administrator 1
2. Application to the Company and Affiliates 1
2.1 Adoption 1
2.2 Definition of Affiliate 2
2.3 Loss of Affiliate Status 2
2.4 Merger or Consolidation of Affiliate 2
2.5 Transfers of Employment 2
2.6 Benefit Obligation of Company 2
3. Eligibility and Participation 2
3.1 Eligibility 2
3.2 Continuation of participation 2
4. Retirement Benefits 3
4.1 Entitlement 3
4.2 Amount of Retirement Benefit 3
4.3 Time of Payment 3
5. Severance Benefits 3
5.1 Entitlement 3
5.2 Amount of Severance Benefit 4
5.3 Time of Payment 4
5.4 Definition of Cause 4
6. Death Benefit 5
6.1 Death during Employment 5
6.2 Death After Termination 5
6.3 Death Beneficiary 5
6.4 Suicide 6
7. Company Investments; Calculation of Benefits 6
7.1 Company Investments 6
7.2 Calculation of Benefits 6
7.3 Present Value; Adjustment 8
7.4 Absence of Funding 8
8. Amendment and Termination 8
8.1 Amendment 8
8.2 Termination 8
8.3 Termination Benefit 9
9. Claims Procedure 9
9.1 Claim or Request 9
9.2 Denial 10
9.3 Response Time 10
9.4 Request for Review 10
9.5 Decision on Review 10
10. Participation Statement 10
10.1 Requirement 10
10.2 Contents of Statement 11
11. General Provisions 11
11.1 Succession 11
11.2 Not Contract of Employment 11
11.3 Applicable Law 11
11.4 Notices 11
11.5 Attorney Fees 12
11.6 Indemnity 12
11.7 Facility of Payment 12
11.8 Entire Arrangement 12
12. Effective Date 13
INDEX OF TERMS
Term Section Page
Adjusted Present Value 7.3(d) 8
Administrator 1.2 1
Affiliate 2.2 2
Beneficiary 6.3 5
Cause 5.4 4
Committee 1.1 1
Company Heading 1
Death Benefit 6 5
Early Payment Reduction 5.2(b) 4
Effective Date 12 13
Eligible Employees 3.1 2
Employer 2.2 2
Normal Retirement Age 4.1 3
Normal Retirement Benefit 4.3 3
Normal Retirement Date 4.3 3
Notice 11.4 11
Participants 3.1 2
Participation Statement 7.2 6
Percent Value 7.3 8
Preretirement Death Benefit 6 5
Present Value 7.3 8
Retirement Benefit Preamble 1
Severance Benefit Preamble 1
Termination Benefit 11.4 11
Termination Date 11.3 11
FRED MEYER
SUPPLEMENTAL INCOME PLAN
January 1, 1994
Fred Meyer, Inc.
a Delaware corporation
PO Box 42121
Portland, Oregon 97202 Company
The Company wishes to supplement benefits otherwise
provided for key executives by providing certain retirement and
death benefits.
This Plan is intended to be and shall be administered and
maintained as an unfunded plan primarily for the purpose
of providing deferred compensation for a select group of manage-
ment or highly compensated employees within the meaning of sections
201(2), 301(a)(3), and 401(a)(1) of the Employee Retirement Income
Security Act of 1974, as amended.
1. Administration
1.1 Compensation Committee
This Plan shall be administered by a Compensation
Committee appointed by the Board of Directors of the Company (the
Committee). The Committee shall interpret and administer the Plan
and for that purpose may make, amend or revoke rules and
regulations at any time. The Committee shall also make
determinations about benefits. Any decision of the Committee
within its authority shall be final and binding on all parties.
1.2 Administrator
Day-to-day functions of the Committee shall be carried
out by or at the direction of the Senior Vice President for Human
Resources (the Administrator).
2. Application to the Company and Affiliates
2.1 Adoption
The Company has adopted this Plan and any affiliate
approved by the Company may adopt this Plan with respect to its
employees by a statement in writing that is signed by the affiliate
and the Company.
2.2 Definition of Affiliate
"Affiliate" means a corporation, person or other entity
that is a member, with the Company, of a controlled group of
corporations or a group of trades or businesses under common
control under sections 414(b) or (c) of the Internal Revenue Code.
"Employer" means the Company, any adopting affiliate and any
nonadopting affiliate treated as an Employer under 2.5.
2.3 Loss of Affiliate Status
If an Employer ceases to be an affiliate of the
Company, the Plan shall be terminated as to the participants
employed by that Employer and 8.2 shall apply.
2.4 Merger or consolidation of Affiliate
If an Employer merges, consolidates, or otherwise
reorganizes or if its business or assets are acquired by another
entity and it remains an affiliate of the Company, this Plan shall
continue with respect to those eligible individuals who continue
as employees of the successor company. The transition of Employers
shall not be considered a termination of employment for purposes
of this Plan.
2.5 Transfers of Employment
Transfer of employment between affiliates shall not
cause a termination of participation in this Plan. A transferee
affiliate that has not adopted this Plan shall be treated as an
Employer with respect to that participant.
2.6 Benefit Obligation of Company
Benefits payable under this Plan shall be an obligation
of the Company, which may charge the cost back to the Employer of
the participant.
3. Eligibility and Participation
3.1 Eligibility
Any key executive of Employer who holds the position of
Senior Vice President or higher (or its functional equivalent)
shall be eligible to participate in this Plan. The Committee shall
select the participants from those eligible employees recommended
by the Company's Chief Executive Officer.
3.2 Continuation of participation
Subject to 8.2, participation shall continue until
death, retirement or other termination of employment.
4. Retirement Benefits
4.1 Entitlement
A participant who terminates employment after Normal
Retirement Age of 62 shall be retired and shall be entitled to a
Retirement Benefit.
4.2 Amount of Retirement Benefit
A participant's Normal Retirement Benefit shall be as
follows:
(a) The amount shall be that specified in the
Participation Statement under 10 below, subject to
calculation and adjustment under 7.2 below.
(b) The amount in (a) shall be paid in equal
monthly installments for 15 years, subject to (c),
below.
(c) The Company may elect at any time to convert
the unpaid balance to an adjusted present value
under 7.3(d) and pay it as a lump sum.
4.3 Time of Payment
(a) Normal Retirement Benefits shall start as of
the first day of the month after Normal Retirement
(Normal Retirement Date) and continue until fully
paid.
(b) Any payment not made when due shall bear
interest at the rate of 12 percent per annum,
compounded each January 1, until fully paid.
5. Severance Benefits
5.1 Entitlement
A participant shall be entitled to a Severance Benefit
on termination of employment other than by death, Normal Retirement
under 4.1, or termination by the Company for cause under 5.4.
5.2 Amount of Severance Benefit
A participant's Severance Benefit on termination of
employment under 5.1 shall be as follows:
(a) To the extent the benefit is covered by
insurance owned by Employer under 7.1(a), the
severance amount shall be determined based on the
Employer contributions and policy experience to the
date of termination of employment. No further
contributions shall be made after that date.
(b) If (a) does not apply, the Normal Retirement
Benefit under 4.2(a) shall be reduced by
multiplying by the number of whole months of
participation and dividing by the number of whole
months between the participant's first date of
participation in the plan and the end of the last
month before participant's Normal Retirement Age.
(c) The amount determined under (a) or (b) shall
be paid in the manner provided under 4.2(b) and (c)
for a Normal Retirement Benefit.
5.3 Time of Payment
Severance Benefits shall be paid or commence as of the
participant's Normal Retirement Date and continue until fully paid.
5.4 Definition of Cause
"Termination for Cause," which results in loss of all
benefits under this Agreement, means termination after commission
by the participant of one or more of following acts that the
Committee reasonably determines have resulted or will result in
demonstrable adverse consequences to the Company:
(a) Fraud, embezzlement or theft against the
Company, an affiliate, or a supplier or customer of
the Company or an affiliate.
(b) A crime involving moral turpitude for which
the participant is convicted.
6. Death Benefit
6.1 Death during Employment
Subject to 6.4, a Preretirement Death Benefit shall be
paid as follows to the beneficiary under 6.3 if a participant dies
while employed by an Employer:
(a) The amount shall be that specified in the
Participation Statement as the Preretirement Death
Benefit, subject to calculation and adjustment
under 7.2, below.
(b) The amount under (a) shall be paid as
provided under 4.2(b) and (c) for a Normal
Retirement Benefit unless the recipient is an
estate. Payment to an estate shall be by a lump
sum present value in all cases.
(c) Payment shall be made or started as of the
first day of the third month after the month of
death.
6.2 Death After Termination
Subject to 6.4, a benefit shall be paid as follows to
the beneficiary under 6.3 if a participant dies after termination
of employment before full Retirement or Severance Benefits have
been paid:
(a) The amount shall be the Normal Retirement
Benefit or Severance Benefit that the participant
was receiving or was entitled to receive.
(b) The amount in (a) shall be paid for the
balance of the 15 year term under 4.2(b) unless
converted to a lump sum present value under 4.2(c).
Payment to an estate shall be by a lump sum present
value in all cases.
(c) Payments shall start or continue in
accordance with 4.3 or 5.3.
6.3 Death Beneficiary
(a) A participant's death beneficiary shall be
determined in the following order of priority:
(1) The surviving beneficiaries
designated by the participant in writing to
the Committee.
(2) The participant's surviving spouse.
(3) The participant's estate.
(b) If a beneficiary under (a) becomes eligible
for a benefit and dies before receiving the entire
benefit, the balance shall be paid by a lump sum
present value to the beneficiary's estate.
(c) If a beneficiary under (a) disclaims a
benefit, the benefit shall be paid as though the
beneficiary had predeceased the participant.
(d) A participant may designate partial or
alternate beneficiaries or change designated
beneficiaries at any time. A single, final
determination of the beneficiary or beneficiaries
entitled to benefits shall be made as of the date
of death by the Administrator.
6.4 Suicide
If death is by suicide during the first 12 months of
participation, no death benefit shall be paid.
7. Company Investments; Calculation of Benefits
7.1 Company Investments
(a) The Company has invested in certain
corporate-owned life insurance covering
participants and may continue to do so. The
Company may wholly or partly discontinue acquiring,
holding, or contributing to such insurance at any
time and may or may not substitute any other
investments.
(b) Any investment under (a) shall be owned
exclusively by the Company who shall have absolute
discretion over its use, retention or disposition.
The Company shall have no obligation to maintain
any investment or identify any assets as related to
the obligations under this Plan.
7.2 Calculation of Benefits
(a) The Benefits shown in the initial
Participation Statements dated January 1, 1994 are
based on the insurance described in 7.1(a). The
stated Benefit on Normal Retirement or
Preretirement
Death are estimates of the amounts that would be
funded by the policies based on the following assumptions:
(1) Employer contributes to the
policies in accordance with a predetermined
schedule except as otherwise provided in
this Plan.
(2) Benefits are funded by the policy
values remaining after recovery of all
Employer contributions.
(b) The actual Benefit for a participant or
beneficiary shall be an amount more or less than
the estimated amount described in (a) based on
actual experience under the policies. The actual
benefit shall not be less than 60 percent of the
estimated amount in (a), subject to adjustments
under 5.2(a) or (b) and the rights of the Committee
under 8 below.
(c) If the Company exercises its option not to
continue to invest in insurance to cover the
benefit for a participant, the amount of Benefit
shall be converted to a fixed sum using the
procedure in (b). Policy value shall be
extrapolated to normal retirement date based on the
assumptions in (a)(1) and (2) and on policy
experience to the date policy contributions are
discontinued. The resulting amount shall be
inserted in the Participation Statement and (a) and
(b) shall no longer apply.
(d) If the Company does not initially invest in
insurance to cover a participant's benefit, the
benefit amounts stated in the Participation
Statement shall be commitments, and (a) and (b)
above shall not apply.
(e) If a participant retires after age 62, the
amount of Normal Retirement Benefit shall be
increased for each month up to the date of
retirement as follows:
(1) If the benefit is covered by
insurance and the amount is determined
under (b) above, Employer shall continue
scheduled contributions until age 65 and
the increase shall be based on the increase
in value of the insurance policies.
(2) If (1) does not apply, the benefit
shall be increased by 5/9 of one percent
per month.
7.3 Present Value; Adjustment
(a) If a Benefit is determined under 7.2(b), the
present value shall be based on the accumulated
experience under the insurance.
(b) If a benefit is determined under 7.2(c) or
(d) the present value shall be determined under the
laws and regulations then in effect for determining
the present value of an annuity benefit under a tax
qualified pension plan.
(c) A benefit shall not be treated as determined
under 7.2(b) if the benefit was not covered by an
insurance investment for at least 90 percent of the
period during which the employee was a participant.
(d) "Adjusted present value" means the amount
under (a) or (b) plus a tax adjustment as follows:
(1) Subject to (2) below, the
adjustment shall compensate, after tax, for
the tax increase, if any, because of
bunching income in one year. The
adjustment shall be determined by the
Administrator, whose decision shall be
final.
(2) The adjustment shall be zero if the
recipient is an estate or a tax exempt
entity.
7.4 Absence of Funding
This Plan and any benefits payable under it shall be
unfunded and shall be payable only from the general assets of the
Company. Participants and beneficiaries shall have no interest in
any assets of the Company and shall have no rights greater than the
rights of any unsecured general creditor of the Company.
8. Amendment and Termination
8.1 Amendment
The Committee may amend this Plan at any time so long
as existing participant's rights that would be preserved under 8.2
on termination are not reduced.
8.2 Termination
The Committee may terminate this Plan or terminate the
participation of one or more participants at any time as follows:
(a) Unless (b) applies, the termination date
shall not be effective earlier than the first day
of the third calendar year after the calendar year
in which notice is given to the affected
participants.
(b) For a participant who ceases to hold a
position of Senior Vice President or above (or its
functional equivalent) or whose responsibilities
are significantly diminished, the termination date
shall be the later of the date of demotion or the
first January 1 after notice is given to the
participant.
(c) After the effective date of the termination
no further benefits shall accrue for the affected
participants, who shall be entitled only to
termination benefits under 8.3.
8.3 Termination Benefit
(a) A participant's termination benefit shall
equal the participant's Severance Benefit
calculated under 5.2(a) or (b) as though the
participant had terminated employment as of the
Plan termination date. The resulting amount shall
be the participant's Normal Retirement Benefit for
all purposes under this Plan.
(b) The participant's termination benefit shall
be paid as follows:
(1) The benefit shall be paid at the
time provided in 4.3 or 5.3.
(2) The benefit shall be paid under the
terms of this Plan in effect at the
termination date.
(3) A preretirement death benefit shall
be paid if death is after the termination
date and 6 above would apply.
9. Claims Procedure
9.1 Claim or Request
Any person claiming a payment or requesting
information, an interpretation or a ruling under this Plan shall
present the request in writing to the Administrator, who shall
respond in writing as soon as practicable.
9.2 Denial
If the claim or request is denied, the written notice
of denial shall state the following:
(a) The reasons for denial, with specific
reference to the Plan provisions on which the
denial is based.
(b) A description of any additional material or
information required and an explanation of why it
is necessary.
(c) An explanation of the Plan's claim review
procedure.
9.3 Response Time
The initial notice of denial shall normally be given
within 90 days after receipt of the claim. If special
circumstances require an extension of time, the claimant shall be
so notified and the time limit shall be 180 days.
9.4 Request for Review
Any person whose claim or request is denied or who has
not received a response within 30 days may request review by notice
in writing to the Administrator. The initial claim decision shall
be reviewed by the Committee who may, but shall not be required to,
grant the claimant a hearing. On review, whether or not there is
a hearing, the claimant may have representation, examine pertinent
documents and submit issues and comments in writing.
9.5 Decision on Review
The decision on review shall normally be made within 60
days. If an extension is required for a hearing or other special
circumstances, the claimant shall be so notified and the time limit
shall be 120 days. The decision shall be in writing and shall
state the reasons and relevant Plan provisions. All decisions on
review shall be final and bind all parties concerned.
10. Participation Statement
10.1 Requirement
The Administrator shall give each participant a
Participation Statement signed by the Company as soon as
practicable after selection of the participant under 3.1 above.
10.2 Contents of Statement
The Participation Statement shall include without
limitation the following data, which shall be conclusive:
(a) The participant's name, address, social
security number and date of birth.
(b) The projected Retirement Benefit and
Preretirement Death Benefit for the participant.
(c) A statement of whether or not the projected
benefit is a firm figure or an estimate based on
related corporate-owned life insurance.
(d) The effective date of participation.
11. General Provisions
11.1 Succession
Except as provided in 6 above, no interest of any
participant or beneficiary under this Plan may be directly or
indirectly assigned, transferred, seized by legal process or
subjected to the claims of creditors in any way. Subject to this
limitation, this plan shall be binding on and enure to the benefit
of the parties, their successors and assigns.
11.2 Not Contract of Employment
Nothing in this Plan shall give any employee the right
to continue employment. This Plan shall not prevent discharge of
any employee at any time for any reason.
11.3 Applicable Law
This Plan shall be construed according to the laws of
Oregon.
11.4 Notices
Notice under this Plan shall be in writing or by
electronic means, and shall be effective when actually delivered
or, if mailed, when deposited postpaid as first-class mail. Mail
shall be directed to the address shown in this Plan, a
Participation Statement, or the Company records, or to such other
address as a party may specify by notice in writing to the other
parties. Notices to the Administrator shall be sent to the
Company's address.
11.5 Attorney Fees
If suit or action is instituted to enforce any rights
under this Plan, the prevailing party may recover from the other
party reasonable attorneys' fees at trial and on any appeal.
11.6 Indemnity
The Company shall indemnify and defend the
Administrator, any member of the Committee or any officer, director
or employee of an Employer from any claim or liability that arises
from any action or inaction in connection with the Plan subject to
the following rules:
(a) Coverage shall be limited to actions taken
in good faith that the individual reasonably
believed were not opposed to the best interest of
the Plan.
(b) Negligence by the individual shall be
covered to the fullest extent permitted by law.
(c) Coverage shall be reduced to the extent of
any insurance coverage.
11.7 Facility of Payment
The Committee may decide that because of the mental or
physical condition of a person entitled to payments, or because of
other relevant factors, it is in the person's best interest to make
payments to others for the benefit of the person entitled to
payment. In that event, the Committee may in its discretion direct
that payments be made to one or more of the following:
(a) To a parent or spouse or a child of legal
age.
(b) To a legal guardian.
(c) To one furnishing maintenance, support, or
hospitalization.
11.8 Entire Arrangement
This Plan and the related Participation Statement shall
constitute the entire arrangement between the Company and any
participant, superseding all discussions, representations and other
written or oral arrangements. The arrangement
can be modified only by written amendment to the Plan pursuant
to 8.1 or by written amendment of the Participation Statement
signed by the Company and the participant.
12. Effective Date
This Plan shall be effective on January 1, 1994.
Adopted: December 29, 1993.
FRED MEYER, INC.
By ROBERT G. MILLER
-------------------------------------
Executed: December 29, 1993
FRED MEYER
SUPPLEMENTAL INCOME PLAN
PARTICIPATION STATEMENT
January 1, 1994
To: [Name]
[Address]
[Social Security No.]
[Date of Birth]
I. Participation
You have been selected as a participant in the Fred Meyer
Supplemental Income Plan. Your participation starts January 1,
1994.
II. Projected Benefit Bases
Your projected benefit bases are as follows:
Retirement Benefit Base $____________
Preretirement Death Benefit Base $____________
These base amounts are used in accordance with the plan
to calculate your benefits. The timing and other circumstances
surrounding your benefits will determine how much is actually paid.
These amounts are estimates derived from the expected
performance of certain corporate-owned life insurance the Company
has purchased in connection with this Plan. Subject to various
rights of the Company and the Compensation Committee under the
Plan, the actual benefit bases will be more or less than those
shown, depending on actual insurance policy performance. The
actual base amount will not be less than 60 percent of the
projected base amount except as otherwise provided in the Plan.
ANY LIFE INSURANCE OR OTHER ASSET HELD BY THE COMPANY IN
CONNECTION WITH THIS PLAN IS THE UNCONDITIONAL PROPERTY OF THE
COMPANY. NO ASSETS ARE HELD IN TRUST AND PARTICIPANTS HAVE NO
SPECIAL INTEREST IN ANY COMPANY ASSET. THIS IS AN UNFUNDED PLAN.
III. Payment and Withholding
If you or your beneficiary qualify for a benefit, payments
will be made by the Company from its general assets. All payments
are subject to applicable state and federal tax withholding.
IV. Plan Document
A copy of the Plan accompanies this Statement. The Plan
is the controlling document and you should examine it carefully.
If you have any questions, direct them to the Administrator of the
Plan, the Senior Vice President for Human Resources.
________________________, 199 .
FRED MEYER, INC.
By ROBERT G. MILLER
-------------------------
Robert G. Miller
Chairman, Chief Executive
Officer
Acknowledged , 199 .
_____________________________
Participant