Exh. 10.20
RANDALL'S FOOD MARKETS, INC.
DIRECTORS' DEFERRED COMPENSATION PLAN
-------------------------------------
RANDALL'S FOOD MARKETS, INC.
DIRECTORS' DEFERRED COMPENSATION PLAN
-------------------------------------
Table of Contents
-----------------
ARTICLE I DEFINITIONS................................................. 1
ARTICLE II ELECTION TO DEFER........................................... 3
ARTICLE III DEFERRED COMPENSATION ACCOUNTS.............................. 3
ARTICLE IV PAYMENT OF DEFERRED COMPENSATION............................ 4
ARTICLE V ADMINISTRATION.............................................. 5
ARTICLE VI AMENDMENT OF PLAN........................................... 5
ARTICLE I.
DEFINITIONS
I.1 "Board" shall mean the Board of Directors of Randall's Food Markets,
Inc.
I.2 "Book Value" shall be the quotient of (a) (i) $359,839,700 million
plus (ii) the aggregate net income of the Company from and after
June 29, 1997 (as decreased by any net losses from and after June
29, 1997 plus (iii) the aggregate dollar amount contributed to the
Company after June 29, 1997 as equity by the shareholders of the
Company (including consideration to be received upon exercise of the
Options and other stock equivalents), (iv) plus, to the extent
reflected as deductions to Book Value in clause (ii) above, or minus,
to the extent reflected as additions to Book Value in clause (ii)
above, unusual noncash items recognized by the Company, if and to
the extent determined in the sole discretion of the Compensation
Committee of the Board of Directors of the Company, minus (v) the
aggregate dollar amount of any dividends paid by the Company on and
after June 29, 1997 divided by (b) the sum of the number of shares
of Common Stock then outstanding and the number of shares of Common
Stock issuable upon the exercise of all outstanding stock options
and other rights to acquire Common Stock and the conversion of all
securities convertible into shares of Common Stock. The calculations
set forth in clauses (a) (ii), (a) (iii), (a) (iv) and (a) (v) of
the immediately preceding sentence shall be determined in accordance
with generally accepted accounting principles applied on a basis
consistent with any prior periods as reflected in the consolidated
financial statements of the Company.
I.3 "Change of Control" shall mean (i) a sale of all or substantially
all of the assets of the Company (other than in connection with
financing transactions or other similar transactions) to a person
who is not KKR or an affiliate (as such term is defined in Section
12b-2 of the Securities Exchange Act of 1934, as amended) of KKR
("KKR Affiliates" and, together with KKR, the "KKR Entities"), (ii)
a sale by KKR or any KKR Affiliate resulting in more than 50% of the
voting stock of the Company being held by a person or group that
does not include a KKR Entity or (iii) (a) a merger or consolidation
of the Company into another person which is not a KKR Entity or (b)
any dilution of KKR's beneficial ownership interest in the Company
which results in the KKR Entities owning less than 50% of the
outstanding shares of the Common Stock of the Company; if and only
if any such event described in either (iii) (a) or (b) results in
the inability of the KKR Entities to elect a majority of the Board
of the Company (or a
resulting entity).
I.4 "KKR" shall mean Kohlberg, Kravis, Roberts & Co., L.P.
I.5 "Director" shall mean a member of the Board of Directors of the
Company who is not an employee of the Company or any of its
subsidiaries.
I.6 "Plan" shall mean this Deferred Compensation Plan for Directors as
it may be amended from time to time.
I.7 "Fees" shall mean amounts earned for serving as a member of the
Board, including any committees of the Board.
I.8 "Year" shall mean calendar year.
I.9 "Common Stock" shall mean the Common Stock of the Company.
I.10 "Company" means Randall's Food Markets, Inc.
I.11 "Stock Account" shall mean the account created by the Company
pursuant to Article III of this Plan in accordance with an election
by a Director to receive stock compensation under Article II hereof.
I.12 "Stock Value" shall mean, for any given day, (i) if the Common Stock
of the Company is not publicly traded, the Book Value of the
Company's Common Stock on such day, and (ii) if the Common Stock of
the Company is publicly traded, the closing price of the Company's
Common Stock as reported on the exchange upon which such Common
Stock is listed on such day or, if the closing price is not
available for the Common Stock on a date in question, then the next
preceding practicable date for which such closing price is available
(the "Public Stock Price"). Notwithstanding the foregoing, in the
event of a Change of Control and, within thirty (30) days,
thereafter, a Director becomes entitled to a distribution of the
Director's Stock Account, the Stock Value shall mean the price paid
in cash or the value of any consideration received in the
transaction resulting in the Change of Control by each holder of the
Company's Common Stock or, if greater, the Public Stock Price.
I.13 "He", "Him" or "His" shall apply equally to male and female members
of the Board.
ARTICLE II
ELECTION TO DEFER
II.1 A Director may elect, on or before December 31 of any Year, to defer
payment of all or a specified part of all Fees earned during the Year
following such election and succeeding Years (until the Director
ceases to be a Director); provided, however, that with respect to Year
1998 a Director may elect, on or before March 31, 1998, to defer all
or a specified part of all Fees earned on or after March 31, 1998. Any
person who shall become a Director during any Year, and who was not a
Director of the Company on the preceding December 31, may elect,
before the Director's term begins, to defer payment of all or a
specified part of such Fees earned during the remainder of such Year
and for succeeding Years. Any Fees deferred pursuant to this Paragraph
shall be paid to the Director at the time(s) and in the manner
specified in Article IV hereof, as designated by the Director.
II.2 The election to participate in the Plan and manner of payment shall be
designated by submitting a letter in the form attached hereto as
Appendix A to the Secretary of the Company.
II.3 The election shall continue from Year to Year unless the Director
terminates it by written request delivered to the Secretary of the
Company prior to the commencement of the Year for which the
termination is first effective.
ARTICLE III
DEFERRED COMPENSATION ACCOUNTS
III.1 The Company shall maintain separate memorandum accounts for the Fees
deferred by each Director.
III.2 The Company shall credit, on the date Fees become payable, the Stock
Account of each Director with the number of shares of Common Stock
which is equal to the deferred portion of any Fee due the Director as
to which an election to receive the Company Common Stock has been
made, divided by the Stock Value on the date such fees would otherwise
have been paid. For purposes of this Section 3.3, the Stock Value
shall be determined on the date fees would otherwise have been paid.
III.3 The Company shall credit the Stock Account of each Director who has
elected to defer Fees with the number shares of Common Stock equal
to the cash dividends payable on the number of shares of Common Stock
represented in each Director's Stock Account divided by the Stock
Value on the dividend payment date. If adjustments are made to the
outstanding shares of Common Stock as a result of split-ups,
recapitalizations, mergers, consolidations and the like, an appropriate
adjustment also will be made in the number of Shares of Common Stock
credited to the Director's Stock Account.
III.4 Common Stock shall be computed to three decimal places.
III.5 Nothing contained herein shall be deemed to create a trust of any
kind or any fiduciary relationship. To the extent that any person
acquires a right to receive payments from the Company under the Plan,
such right shall be no greater than the right of any unsecured
general creditor of the Company.
ARTICLE IV
PAYMENT OF DEFERRED COMPENSATION
-------------------------------
IV.1 Subject to the second succeeding sentence, amounts contained in a
Director's Stock Account shall be distributed as the Director's
election (made pursuant to Paragraph 2.2 of Article II hereof)
shall provide Distributions shall begin with the first day of the
Year following the Director's retirement or separation from the
Board, or the termination of the Plan. Amounts credited to a
Director's Stock Account shall be paid, in cash (determined by
multiplying the number of full shares in the Director's Stock
Account by the then Stock Value).
IV.2 Each Director shall have the right to designate a beneficiary who is
to succeed to his right to receive payments hereunder in the event of
death. Any designated beneficiary shall receive payments in the same
manner as the Director if he had lived. In case of a failure of
designation or the death of a designated beneficiary without a
designated successor, the balance of the amounts contained in the
Director's Stock Account shall be payable in accordance with Section
4.1 to the Director's or former Director's estate in full on the first
day of the Year following the Year in which he dies. No designation
of beneficiary or change in beneficiary shall be valid unless in
writing signed by the Director and filed with the Secretary of the
Company.
ARTICLE V
ADMINISTRATION
----------------
V.1 The Company shall administer the Plan at its expense. All decisions
made by the Company with respect to issues hereunder shall be final
and binding on all parties.
V.2 Except to the extent required by law, the right of any Director or
any beneficiary to any benefit or to any payment hereunder shall not
be subject in any manner to attachment or other legal process for
the debts of such Director or beneficiary; and any such benefit or
payment shall not be subject to alienation, sale, transfer,
assignment or encumbrance.
ARTICLE VI
AMENDMENT OF PLAN
-------------------
VI.1 The Plan may be amended, suspended or terminated in whole or in part
from time to time by the Board except that no amendment, suspension,
or termination shall apply to the payment to any Director or
beneficiary of a deceased Director of any amounts previously
credited to a Director's Stock Account.
APPENDIX A
----------
Date __________________
- -----------------------------
Corporate Secretary
Randall's Food Markets, Inc.
- -----------------------------
- ----------------, ------- ---------
Dear Mr. ____________________
Pursuant to the Randall's Food Markets, Inc. Directors' Deferred
Compensation Plan, (the "Plan"), I hereby elect to defer receipt of all or a
portion of my Director's fees commencing March [ ], 1998 and for succeeding
calendar years commencing January 1, 1999 in accordance with the percentages
indicated below.
I elect to have my Director's fees (and committee fees, if any) credited
as follows (fill in appropriate percentages for options a and b, below):
(a) ________% of the aggregate Director's fees shall be credited to my
Stock Account as defined in the Plan;
(b) ________% of the aggregate Director's fees shall not be deferred,
but shall be paid to me directly as they accrue.
Further, I elect to receive the payments pursuant to the Plan (check
method desired, below):
_____ in one lump sum
_____ in _____ equal annual installments
Further, I understand that my Stock Account shall become payable on the
first day of January or as soon thereafter as is practicable following my
retirement or separation from the Board.
In the event of my death prior to receipt of all or any balance of such
fees and interest or dividends thereon so accumulated, I designate
___________________________ as my beneficiary to receive the funds so
accumulated.
Very truly yours,
March 31, 1998
Mr. Lee Straus
Corporate Secretary
Randall's Food Markets, Inc.
3663 Briarpark
Houston, Texas 77042
Dear Mr. Straus:
Pursuant to the Randall's Food Markets, Inc. Directors' Deferred
Compensation Plan (the "Plan"), I hereby elect to defer receipt of all or a
portion of my Director's fees commencing March 31, 1998 and for succeeding
calendar years commencing January 1, 1999 in accordance with the percentages
indicated below.
I elect to have my Director's fees (and committee fees, if any) credited
as follows (fill in appropriate percentages for options a and b, below):
(a) _______% of the aggregate Director's fees shall be credited
to my Stock Account as defined in the Plan;
(b) _______% of the aggregate Director's fees shall not be
deferred, but shall be paid to me directly as they accrue.
Further, I elect to receive the payments pursuant to the Plan (check
method desired, below):
_______ in one lump sum
_______ in ____ equal annual installments
Further, I understand that my Stock Account shall become payable on the
first day of January or as soon thereafter as is practicable following my
retirement or separation from the Board.
In the event of my death prior to receipt of all or any balance of such
fees and interest or dividends thereon so accumulated, I designate ___________
______________________ as my beneficiary to receive the funds so accumulated.
Very truly yours,