FLEMING COMPANIES, INC.
CORPORATE OFFICER INCENTIVE PLAN
(Adopted January 19, 1999)
FLEMING COMPANIES, INC.
CORPORATE OFFICER INCENTIVE PLAN
TABLE OF CONTENTS
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ARTICLE I Name and Purpose of Plan. . . . . . . . . . . . . 1
1.1 Name of Plan . . . . . . . . . . . . . . . 1
1.2 Purpose. . . . . . . . . . . . . . . . . . 1
ARTICLE II Definitions and Construction. . . . . . . . . . . 1
2.1 Definitions. . . . . . . . . . . . . . . . 1
2.2 Construction . . . . . . . . . . . . . . . 4
ARTICLE III Participation . . . . . . . . . . . . . . . . . . 4
3.1 Selection for Participation. . . . . . . . 4
3.2 Relationship to Change of
Control Agreements . . . . . . . . . . . . 4
ARTICLE IV Determination of Awards . . . . . . . . . . . . . 4
4.1 Determination. . . . . . . . . . . . . . . 4
4.2 Committee to Establish Targets . . . . . . 5
ARTICLE V Payment of Awards . . . . . . . . . . . . . . . . 5
5.1 Date of Payment of Awards. . . . . . . . . 5
5.2 Certain Terminations of
Employment . . . . . . . . . . . . . . . . 5
5.3 Forfeiture, Reduction and
Elimination of Awards. . . . . . . . . . . 5
5.4 Awards Exceeding IRS Limits. . . . . . . . 6
ARTICLE VI General Benefit Provisions. . . . . . . . . . . . 6
6.1 No Trust . . . . . . . . . . . . . . . . . 6
6.2 Withholding for Income and
Employment Taxes . . . . . . . . . . . . . 6
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6.3 No Interest on Awards. . . . . . . . . . . 6
6.4 Payments by the Company or
Subsidiary . . . . . . . . . . . . . . . . 7
6.5 Payment in Event of Death. . . . . . . . . 7
6.6 Restriction on Alienation
of Awards. . . . . . . . . . . . . . . . . 7
6.7 Expenses . . . . . . . . . . . . . . . . . 7
6.8 No Prior Right or Offer. . . . . . . . . . 7
6.9 No Continued Employment. . . . . . . . . . 7
6.10 No Vested Rights . . . . . . . . . . . . . 7
6.11 No Part of Other Benefits. . . . . . . . . 7
6.12 Other Plans. . . . . . . . . . . . . . . . 8
ARTICLE VII Provisions Relating to Participants . . . . . . . 8
7.1 Information Required of
Participants . . . . . . . . . . . . . . . 8
7.2 Benefits Payable to Incompetents . . . . . 8
ARTICLE VIII Administration. . . . . . . . . . . . . . . . . . 8
8.1 The Committee Shall Administer
the Plan . . . . . . . . . . . . . . . . . 8
8.2 Claims Procedure . . . . . . . . . . . . . 8
8.3 Review Procedure . . . . . . . . . . . . . 9
8.4 Records and Reports. . . . . . . . . . . . 9
8.5 Rules and Decisions. . . . . . . . . . . . 9
ARTICLE IX Amendment and Termination . . . . . . . . . . . . 9
9.1 Right to Amend Plan. . . . . . . . . . . . 9
9.2 Right to Terminate Plan. . . . . . . . . . 9
ARTICLE X Miscellaneous Provisions. . . . . . . . . . . . . 10
10.1 Articles and Section Titles
and Headings . . . . . . . . . . . . . . . 10
10.2 Laws of Oklahoma to Govern . . . . . . . . 10
10.3 Effective Date of Plan;
Shareholder Approval . . . . . . . . . . . 10
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FLEMING COMPANIES, INC.
CORPORATE OFFICER INCENTIVE PLAN
FLEMING COMPANIES, INC., an Oklahoma corporation, hereby adopts the
Fleming Companies, Inc. Corporate Officer Incentive Plan upon the following
terms and conditions:
ARTICLE I
NAME AND PURPOSE OF PLAN
1.1 NAME OF PLAN. This Plan shall be hereafter known as the
FLEMING COMPANIES, INC. CORPORATE OFFICER INCENTIVE PLAN.
1.2 PURPOSE. The purpose of the Plan is to provide the Key
Associates who are selected to be Participants under the Plan an incentive to
motivate and financially reward such individuals by providing the opportunity to
earn a bonus if certain Targets are met. The general objective of the Plan is
to establish intense focus upon those performance criteria which are most
critical to the Company's success in 1999 and thereafter. Certain primary goals
of the Plan are to (i) attain substantial improvement in Sales, (ii) improve
Earnings, (iii) provide a concrete and understandable linkage between
performance, rewards and share value creation for the Company's stockholders,
and (iv) encourage team work. The Plan is not an "employee benefit plan" under
the Employee Retirement Security Act of 1974, as amended.
ARTICLE II
DEFINITIONS AND CONSTRUCTION
2.1 DEFINITIONS. Where the following capitalized words and
phrases appear in this instrument, they shall have the respective meanings set
forth below unless a different context is clearly expressed herein.
(a) ANNIVERSARY DATE: The words "Anniversary Date" shall
mean the last Saturday of December which is end of each Year of the Company.
(b) AWARD: The word "Award" shall mean, with respect to
any Participant, the amount of bonus calculated in accordance with Section 4.1
hereof.
(c) BENEFICIARY: The word "Beneficiary" shall mean that
person designated by the Participant pursuant to Section 6.5 hereof.
(d) BASE SALARY: The words "Base Salary" shall mean the
Participant's base salary as determined by the Committee for each Year of the
Plan adjusted for salary merit increases or any salary decreases occurring
during such Year.
(e) BOARD: The word "Board" shall mean the Board of
Directors of the Company.
(f) CODE: The word "Code" shall mean the Internal Revenue
Code of 1986, as amended from time to time.
(g) COMMITTEE: The word "Committee" shall mean the
Compensation and Organization Committee appointed by the Board which in
accordance with Article VIII herein will administer the Plan.
(h) COMPANY: The word "Company" shall mean Fleming
Companies, Inc., or its successor.
(i) DISABILITY: The word "Disability" shall have the
meaning set forth in the Company's Long Term Disability Plan.
(j) EARNINGS: The word "Earnings" shall mean, for the Year
of determination of an Award, the consolidated gross revenues of the Company
(excluding Extraordinary Revenue Items) computed in accordance with GAAP,
consistently applied, from which shall be deducted an amount for such period
equal to the aggregate of all consolidated expenses and other charges for such
period (excluding Extraordinary Charge Items) and income taxes for such period
computed in accordance with GAAP, consistently applied.
(k) EARNINGS PER SHARE: The words "Earnings Per Share"
shall mean, for the Year of determination of an Award, Earnings divided by the
weighted average shares outstanding for a fully diluted earnings per share
calculation as determined in accordance with GAAP consistently applied.
(l) EFFECTIVE DATE: The words "Effective Date" shall mean
December 27, 1998.
(m) EMPLOYER: The word "Employer" shall mean the Company
or any Subsidiary.
(n) EXTRAORDINARY CHARGE ITEMS: The words "Extraordinary
Charge Items" shall mean for the Year of determination of an Award: (i) expense
items and other charges as determined extraordinary in accordance with GAAP,
consistently applied, as shall appear on the consolidated earnings statements of
the Company for such Year; and (ii) expense items and other charges the
Committee considers non-operating and by nature unusual or infrequent.
(o) EXTRAORDINARY REVENUE ITEMS: The words "Extraordinary
Revenue Items" shall mean for the Year of determination of an Award: (i)
revenue items determined as extraordinary in accordance with GAAP, consistently
applied, as shall appear on the consolidated
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earnings statements of the Company, and (ii) revenue items the Committee
considers non-operating and by nature unusual or infrequent.
(p) GAAP: "GAAP" shall mean Generally Accepted Accounting
Principles.
(q) KEY ASSOCIATE: The words "Key Associate" shall mean
any full time employee of the Company or a Subsidiary who holds the position of
Chairman, Chief Executive Officer, President, Executive Vice President, Senior
Vice President or Vice President or any other associate who is an officer of the
Company or a Subsidiary and who is selected for participation in the Plan.
(r) PARTICIPANT: The word "Participant" shall mean a Key
Associate who has been selected for participation in the Plan by the Committee.
(s) PLAN: The word "Plan" shall mean the "Fleming
Companies, Inc. Corporate Officer Incentive Plan" as set forth in this
instrument, and as hereafter amended from time to time.
(t) RETIREMENT: The word "Retirement" means the date that
a Participant terminates employment in accordance with the Company's retirement
policy after (i) attaining the age of at least 55 years and (ii) earning at
least 10 years of employment service. Years of employment service will be
determined by the Committee in their sole discretion on a reasonable and
consistent basis for all Participants.
(u) SALES: The word "Sales" shall mean for the Year of
determination of an Award (i) MINUS (ii) where (i) is consolidated net sales of
the Company as determined in accordance with GAAP consistently applied and (ii)
is the sum of amounts included in (i) that represent bill-through sales,
selected drop ship sales, selected direct store delivery sales, fees charged
customers, transportation related fees and revenues, and miscellaneous revenues
and income.
(v) SUBSIDIARY: The word "Subsidiary" shall mean any
corporation consolidated with Company under GAAP.
(w) TARGETS: The word "Targets" shall mean those
performance goals established each Year by the Committee which require
predetermined levels of Earnings Per Share, Sales and Earnings be met before an
Award will be earned and payable. Targets for Sales and Earnings will consist
of a threshold Target, middle Target and maximum Target.
(x) YEAR: The word "Year" shall mean the fiscal year of
the Company.
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2.2 CONSTRUCTION. The masculine gender, wherever appearing in the
Plan, shall be deemed to include the feminine gender, unless the context clearly
indicates to the contrary. Any word appearing herein in the plural shall
include the singular, where appropriate, and likewise the singular shall include
the plural, unless the context clearly indicates to the contrary.
ARTICLE III
PARTICIPATION
3.1 SELECTION FOR PARTICIPATION. A Key Associate must be selected
by the Committee to be a Participant based on criteria determined by the
Committee, which may include the Key Associate's overall job level and his
ability to impact financial results of the Company or any Subsidiary. The
Committee may add or remove Key Associates from the group of Participants at any
time during each Year in its sole discretion.
3.2 RELATIONSHIP TO CHANGE OF CONTROL AGREEMENTS. If a
Participant is a party to an employment agreement with the Company which is
effective upon a "change of control" as such term is defined in the agreement
(the "Change of Control Agreement"), any provision of this Plan which would
result in a loss or reduction of an Award shall be subject to and superseded by
the applicable provisions of the Change of Control Agreement.
ARTICLE IV
DETERMINATION OF AWARDS
4.1 DETERMINATION.
(a) AWARD. For each Year, the Committee will determine the
amount of each Participant's Award by selecting a designated percentage of
the Participant's Base Salary which will be the amount which may be earned as
an Award for such Year if the middle level Targets for the Year are met. The
designated percentage of Base Salary may not be the same for each
Participant. Awards will be determined by performance of the Company based
on Earnings Per Share, Sales and Earnings. The Committee shall select the
applicable Targets for each Year. Participants will have their Awards for
each such Year based upon the same Targets.
(b) CALCULATION OF AWARD. For any Participant to be
entitled to an Award, the Target level of Earnings Per Share for the applicable
Year first must be attained or exceeded. Once the Target for Earnings Per Share
for such Year has been achieved, then the
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Award will be weighted based on Sales and Earnings, as such weighting is
determined each Year by the Committee.
4.2 COMMITTEE TO ESTABLISH TARGETS. The Committee in its sole and
absolute discretion shall establish the Targets for each Year as well as any
threshold level, middle level and maximum level within each Target. If the
actual results for Sales or Earnings for a Year are between specified Target
levels, the Committee shall interpolate the value of any Award on an arithmetic
proportionate basis between such Targets. The determination of the Targets for
one Year may or may not be applicable for any following Year. Further, it is
the intent of the Company and the Committee that this Plan, the Awards and the
Targets satisfy the requirements of Section 162(m) of the Code. Accordingly,
the Committee will makes its determination as to the Targets and all other
applicable provisions of the Plan as are necessary in order to attempt to have
the Plan, the Awards and the Targets meet the requirements of Section 162(m) of
the Code.
ARTICLE V
PAYMENT OF AWARDS
5.1 DATE OF PAYMENT OF AWARDS. Payment of Awards shall be made,
in cash, as soon as practicable following the Anniversary Date of the Year which
relates to the Award.
5.2 CERTAIN TERMINATIONS OF EMPLOYMENT. Subject to Section 5.3
of the Plan, if, prior to the end of the year for which he would have
otherwise qualified for an Award, a Participant's employment with the
Employer is terminated due to death, Disability, Retirement or elimination
of his position with the Employer ("Approved Termination Events"), any Award
which would otherwise have been paid for such Year assuming the Participant
continued in the employ of the Employer for such Year, will be prorated based
on the number of completed months of employment during the Year of the
occurrence of the Approved Termination Event; and, payment will be made in
accordance with the terms of this Plan.
5.3 FORFEITURE, REDUCTION AND ELIMINATION OF AWARDS. Unless the
Committee otherwise determines, if, prior to the end of the Year for which he
would have otherwise qualified for an Award, a Participant's employment with
the Company is terminated for any reason other than the occurrence of an
Approved Termination Event, the Participant, his Beneficiary and any other
person will forfeit any interest which the Participant had in the Award. The
Committee has the right, in its sole and absolute discretion, to reduce or
eliminate any Award to any Participant in the event the Committee determines
that amounts to be paid under the Award are excessive or are not warranted.
While the Committee has the right to eliminate or reduce any Award, the
Committee does not have the right to increase any Award or change the Targets
which have been set for a particular Year except to the extent any Award is
increased because of the exclusion of any Extraordinary Charge Items as
determined by the Committee.
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5.4 AWARDS EXCEEDING IRS LIMITS. The Committee has the right to
determine if any Award (or portion thereof) exceeds the limit as established
under Section 162(m) of the Code so if paid it would not be deductible to the
Company for federal income tax purposes (the "Excess Amount"). If the Committee
makes this determination, the Committee may determine that such Excess Amount
shall be paid to the affected Participant (i) as provided under this Plan, (ii)
in a Year during which payment of such Excess Amount to the Participant would
not result in the payment of an Excess Amount, or (iii) as rapidly as possible
following the termination of employment of such Participant but made in a manner
which does not result in an Excess Amount being paid. The Committee may or may
not, in its sole discretion, credit interest with respect to any Excess Amounts
if payment is deferred.
ARTICLE VI
GENERAL BENEFIT PROVISIONS
6.1 NO TRUST. No action under this Plan by the Company, its Board
or the Committee shall be construed as creating a trust, escrow or other secured
or segregated fund in favor of the Participant or any other persons otherwise
entitled to his Award. The status of the Participant and any other person
entitled to his Award with respect to any liabilities assumed by the Company or
any Subsidiary hereunder shall be solely those of unsecured creditors of the
Company or such Subsidiary. Any asset acquired or held by the Company or any
Subsidiary in connection with liabilities assumed by it hereunder, shall not be
deemed to be held under any trust, escrow or other secured or segregated fund
for the benefit of the Participant or any other person entitled to his Award or
to be security for the performance of the obligations of the Company or any
Subsidiary, but shall be, and remain, a general, unpledged, unrestricted asset
of the Company or such Subsidiary at all times subject to the claims of general
creditors of the Company.
6.2 WITHHOLDING FOR INCOME AND EMPLOYMENT TAXES. Since all
amounts to be paid under the Plan to a Participant are to be considered as
compensation paid for services rendered by the Participant, the Company shall
comply with all federal and state laws and regulations respecting the
withholding, deposit and payment of any income, employment or other taxes
relating to any payments made under this Plan, and all Awards shall be subject
to and reduced by the amount of such taxes.
6.3 NO INTEREST ON AWARDS. Unless determined by the Committee
under Section 5.4 hereof, all Awards to be paid hereunder will be paid without
interest or investment earnings of any kind whatsoever.
6.4 PAYMENTS BY THE COMPANY OR SUBSIDIARY. The payments required
to fund the cost of the Awards provided by the Plan shall be made solely by the
Company or any Subsidiary whose Key Associates are participating in the Plan.
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6.5 PAYMENT IN EVENT OF DEATH. In the event of the death of a
Participant, the Participant's Award, if earned as provided in Section 5.2
above, shall be paid to the Beneficiary designated by the Participant on a form
provided by the Committee, who is (i) an individual or a trust established for
the benefit of an individual, and (ii) living on the date of the Participant's
death, and if there is no Beneficiary then living, the benefit will be paid to
the estate of the Participant and payment shall be made in a single lump sum.
While a Participant is employed by the Employer, the Participant may change his
Beneficiary by delivering to the Committee a properly executed form designating
a new Beneficiary.
6.6 RESTRICTION ON ALIENATION OF AWARDS. No right or benefit
under this Plan or under any Award shall be subject to anticipation, alienation,
sale, assignment, pledge, encumbrance or charge, and any attempt to anticipate,
alienate, sell, assign, pledge, encumber or charge the same shall be void. No
right or benefit hereunder shall in any manner be liable for or subject to the
debts, contracts, liabilities, or torts of the person entitled to such benefit.
6.7 EXPENSES. All expenses and costs in connection with adoption
and administration of the Plan shall be borne by the Company.
6.8 NO PRIOR RIGHT OR OFFER. No Key Associate shall have any
contractual or other right to participate in the Plan until he is selected for
participation by the Committee. No Award to any Participant in any Year shall
be deemed to create a right to receive any Award or to participate in the Plan
in any subsequent Year.
6.9 NO CONTINUED EMPLOYMENT. Neither the establishment of the
Plan nor the grant of an Award under the Plan shall be deemed to constitute an
express or implied contract of employment of any Participant for any period of
time or in any way abridge the rights of the Company to determine the terms and
conditions of employment or to terminate the employment of any Key Associate at
any time.
6.10 NO VESTED RIGHTS. Except as expressly provided herein, no Key
Associate or any other person shall have any claim or right (legal, equitable,
or otherwise) to any Award, allocation or distribution of any right, title or
vested interest in any amounts, and no officer or employee of the Company or any
Subsidiary or any other person shall have any authority to make representations
or agreements to the contrary.
6.11 NO PART OF OTHER BENEFITS. The benefits provided in this Plan
shall not be deemed a part of any other benefit provided by the Company or any
Subsidiary to its Key Associates. The Company assumes and shall have no
obligation to Participants except as expressly provided in the Plan. This Plan
is a complete statement of the terms and conditions of the Plan.
6.12 OTHER PLANS. Nothing contained herein shall limit the
Company's power to grant other bonuses to Key Associates regardless of their
participation in the Plan.
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ARTICLE VII
PROVISIONS RELATING TO PARTICIPANTS
7.1 INFORMATION REQUIRED OF PARTICIPANTS. Payment of Awards shall
be made as provided in this Plan and no formal claim shall be required therefor.
7.2 BENEFITS PAYABLE TO INCOMPETENTS. Any benefits payable
hereunder to a minor or other person under legal disability may be made, at the
discretion of the Committee, (i) directly to such person, or (ii) to a parent,
spouse, relative by blood or marriage, or the legal representative of such
person. The Committee shall not be required to see to the application of any
such payment, and the payee's receipt shall be a full and final discharge of the
Committee's responsibility hereunder.
ARTICLE VIII
ADMINISTRATION
8.1 THE COMMITTEE SHALL ADMINISTER THE PLAN. A member of the
Committee may not be eligible to become a Participant in the Plan. The
Committee shall have the power where consistent with the general purpose and
intent of the Plan to (i) establish Targets, (ii) modify the requirements of the
Plan to conform with the law or to meet special circumstances not anticipated or
covered in the Plan, (iii) suspend or discontinue the Plan, (iv) establish
policies and (v) adopt rules and regulations and prescribe forms for carrying
out the purposes and provisions of the Plan. The Committee shall have the
authority to interpret and construe the Plan, and determine all questions
arising under the Plan in its sole discretion. Any interpretation, decision or
determination made by the Committee shall be final, binding and conclusive. A
majority of the Committee shall constitute a quorum, and an act of the majority
of the members present at any meeting at which a quorum is present shall be the
act of the Committee.
8.2 CLAIMS PROCEDURE. The Committee shall in its sole discretion
make all determinations as to the right of any person to benefits under the
Plan. If any request for a benefit is wholly or partially denied, the Committee
shall notify the person requesting the benefits, in writing, of such denial,
including in such notification the following information:
(a) the specific reason or reasons for such denial;
(b) the specific references to the pertinent Plan
provisions upon which the denial is based;
(c) a description of any additional material and
information which may be needed to clarify the request, including an explanation
of why such information is required; and
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(d) an examination of this Plan's review procedure with
respect to denial of benefits.
8.3 REVIEW PROCEDURE. Any Participant or Beneficiary whose claim
has been denied in accordance with Section 8.2 above may appeal to the Committee
for review of such denial by making a written request therefor within 60 days of
receipt of the notification of such denial. Such Participant or Beneficiary may
examine documents pertinent to the review and may submit to the Committee
written issues and comments. Within 60 days after receipt of the request for
review, the Committee shall communicate to the claimant, in writing, its
decision, and the communication shall set forth the reason or reasons for the
decision and specific references to those Plan provisions upon which the
decision is based.
8.4 RECORDS AND REPORTS. The Committee shall exercise such
authority and responsibility as it deems appropriate in order to comply with
governmental laws and regulations.
8.5 RULES AND DECISIONS. The Committee may adopt such rules as it
deems necessary, desirable, or appropriate. When making a determination or
calculation, the Committee shall be entitled to rely upon information furnished
by a Participant, the Employer, the accountants of the Company or the legal
counsel of the Company.
ARTICLE IX
AMENDMENT AND TERMINATION
9.1 RIGHT TO AMEND PLAN. The Plan may be amended by the Committee
from time to time in any respect whatsoever. Any amendments may be made
retroactively which in the judgment of the Committee are necessary or advisable.
9.2 RIGHT TO TERMINATE PLAN. The Committee expressly reserves the
right to terminate this Plan in whole or in part at any time. The Company shall
determine a proposed date of termination, and the Committee shall notify the
Participants.
ARTICLE X
MISCELLANEOUS PROVISIONS
10.1 ARTICLES AND SECTION TITLES AND HEADINGS. The titles and
headings at the beginning of each Article and Section shall not be considered in
construing the meaning of any provisions in this Plan.
10.2 LAWS OF OKLAHOMA TO GOVERN. The provisions of this Plan shall
be construed, administered and enforced according to the laws of the State of
Oklahoma.
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10.3 EFFECTIVE DATE OF PLAN; SHAREHOLDER APPROVAL. This Plan shall
be effective as of the Effective Date subject to approval by the holders of a
majority of the Company's common stock having voting power in person or
represented by proxy at the 1999 annual meeting of shareholders.
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