Severance Plan For Officers - Albertson's Inc.
ALBERTSON'S SEVERANCE PLAN FOR OFFICERS
Effective October 1, 2002
SECTION 1--PURPOSE
The purpose of the Albertson's Severance Plan for Officers ("Plan") is to
provide severance pay and benefits to certain Officers of Albertson's, Inc. and
its subsidiaries (collectively the "Company") whose employment is involuntarily
terminated, where such employment termination is due to a job restructuring,
reduction in force, or job elimination and not due to any other reason,
including but not limited to unsatisfactory performance or voluntary termination
by the Officer. When the employment of such Officers is so terminated, the
employment relationship shall be completely severed and affected Officers shall
have no current or future right to employment on a full-time, part-time, per
diem, consulting or other basis.
The Plan is intended to be an "employee welfare benefit plan" as that term
is defined in Section 3(1) of the Employee Retirement Income Security Act of
1974, as amended. Severance benefits for eligible officers shall be determined
exclusively under this Plan unless a separate agreement has been or is reached.
All of the corporate policies and practices regarding severance or similar
payments upon employment termination, with respect to Officers eligible to
participate herein are hereby superseded by this Plan. Benefits under this Plan
are in no way contingent upon retirement under any Company retirement plan.
SECTION 2--DEFINITIONS
The following capitalized terms shall have the meanings set forth in this
Section 2 unless the context clearly indicates otherwise:
2.1 Administrator means the Company or its delegees.
2.2 Covered Reason means an involuntary termination of employment with the
company due to a job restructuring, reduction in force or job
elimination (and not due to any other reason, including but not limited
to unsatisfactory performance or voluntary termination by the Officer.)
2.3 Company means Albertson's, Inc. and its subsidiaries.
2.4 Effective Date means October 1, 2002.
2.5 ERISA means the Employee Retirement Income Security Act of 1974, as
amended.
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2.6 Officer means any active, regular officer of the Company who has been
employed by the Company for at least one year. For purposes of this
Plan, "Officer" excludes (a) any individual who has an individual
employment or severance agreement with the Company and (b) any
individual who is or may become entitled to severance benefits under
another severance plan sponsored by the Company.
2.7 Participant means an Officer who is notified by the Company that his or
her employment is to be involuntarily terminated by the Company on or
after the Effective Date, other than termination that is the result of
actions by the Officer which, as determined by the Company in its sole
discretion, would normally result in termination or discharge.
2.8 Pay or Base Pay means the Officer's regular base salary or wages on the
Officer's Severance Date, excluding all extra pay or special pay such
as premiums, bonuses, commissions, living or other allowance.
2.9 Plan means the Albertson's Severance Plan for Officers Effective
October 1, 2002.
2.10 Plan Year means the period from June 1 through May 31.
2.11 Release Agreement means the Severance and Release Agreement given by
the Participant to the Company and other matters stated therein. The
Severance and Release Agreement shall bind the Participant and the
Company.
2.12 Severance Date means the date established by the Company in its sole
discretion as a Participant's last day of employment.
2.13 Successor means any employer (whether or not the employer is affiliated
with the Company) which acquires (through merger, consolidation,
reorganization, transfer, sublease, assignment, or otherwise) (i) all
or substantially all of the business or assets of the Company, of a
division of the Company, or of a single facility or business unit of
the Company, or (ii) the facility where the Officer usually works.
2.14 Years of Service shall mean the completed 12-month periods during which
an Officer has been employed by the Company on a continuous basis
measured from the Officer's most recent hire or rehire date (not an
adjusted or reinstated hire date).
SECTION 3--ELIGIBILITY AND PAYMENT
3.1 Eligibility. Subject to Sections 3.2, 3.3, and 3.4 of this Plan, an
Officer shall become a Participant if on or after the Effective Date,
the Officer is notified by the Company that his or her employment with
the Company is to be involuntarily terminated by the Company, unless
such termination is the result of actions by the Officer which, as
determined by the Company in its sole discretion, would normally result
in a termination or discharge. An employee who is on a Company-approved
Family and Medical leave for a personal serious health condition,
worker's compensation leave or other medical or disability-related
leave will be subject to the appropriate Company leave policy when the
employee returns from leave.
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The forgoing, to the contrary notwithstanding, the Company reserves the
right to determine the applicability or non-applicability of the Plan
in its sole and absolute discretion based on the facts and
circumstances of each situation and administered in a fair and
non-discriminatory manner.
3.2 Payment. A Participant shall be entitled to the severance pay set forth
in Section 4 hereof, if:
(a) he or she returns, and does not revoke, a completed and
executed Release Agreement to the Company within the time
specified in the Release Agreement; and
(b) he or she is not and does not become disqualified from
receiving severance pay pursuant to Section 3.3 hereof at any
time prior to such person's Severance Date.
3.3 Disqualifying Events. A Participant shall not be entitled to the
severance pay set forth in Section 4 hereof, if:
(a) the Officer either (i) fails to return a signed Release
Agreement to the Company within the time period specified by
the Company after that person's Severance Date or (ii) revokes
such Release Agreement within the time period specified in the
Release Agreement;
(b) the Officer is notified of a subsequent termination date for
his or her employment and, prior to such date, the Officer (i)
terminates voluntarily his or her employment, (ii) fails to
show up and properly attend work, and/or (iii) fails to
adequately perform his or her employment duties as established
by the Company in its sole discretion;
(c) the Officer rejects an offer or fails to accept an offer of
another position from the Company, a Successor or from any
affiliate of the Company; provided, however, that an Officer
may still receive his or her severance benefits despite
rejecting such offer if either (i) the new position has a Base
Pay less than eighty (80) percent of his or her current Base
Pay, or (ii) the new job will require the Officer to work in a
location more than 50 miles from his or her current workplace.
3.4 Release. Prior to the date the Participant's employment with the
Company will terminate, such Participant will receive a Release
Agreement in a form satisfactory to the Company, substantially in the
form attached to this Plan as Exhibit A-1 or Exhibit A-2. If the
Participant accepts and agrees to his or her severance pay and benefits
as determined, he or she shall execute the Release Agreement and return
it to the Group Vice President, HR Administration and Employee Benefits
within the time period specified by the Company following his or her
Severance Date. Such Release Agreement must be timely and appropriately
executed by its terms for the Participants to qualify for payments and
benefits under Section 4.
3.5 Reemployment. By accepting a severance payment under the Plan, the
Participant agrees not to reapply for employment with the Company
within six months (or such other period as provided in the Severance
and Release Agreement) of the Participants' severance date.
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SECTION 4--AMOUNT AND PAYMENT OF SEVERANCE PAY
4.1 Amount and Timing. A Participant's severance pay under this Section 4
shall be the number of weeks of Pay set forth in the schedule below
based on such Participant's status and his or her number of full Years
of Service and shall be paid in one lump sum as soon as
administratively practicable after the Participant's Severance Date and
the Company's receipt of the Participant's signed Release Agreement.
Amounts to be paid are as follows:
Two week's pay per full Year of Service, with a minimum of 8
weeks' Pay, plus 100 percent target bonus prorated based on the
number of weeks actually worked during the fiscal year less any
bonus already paid.
Employment taxes shall be withheld from all severance payments but
voluntary deductions shall not be allowed. In addition, any amount
payable under this Section shall be reduced (but not below zero) by any
payment made as required by government-mandated programs that require
payment of wages and fringe benefits in lieu of appropriate notice
of closing, layoffs or termination of employment.
4.2 Additional Benefits. The Company will also offer the following
additional benefits.
(a) Participants shall have the right to continue medical and
dental benefits under the continuation health coverage
provisions of Title X of the Consolidated Omnibus Budget
Reconciliation Act of 1986 (COBRA) after his or her Severance
Date, if otherwise eligible and/or, if eligible, may enroll in
the Retiree Health Plan. To the extent that the Participant is
eligible for and elects COBRA coverage, the Company shall
cover the premiums or cost of such coverage (excluding IRC
section 125 flexible spending accounts) on a monthly basis for
the lesser of (1) the first 6 months of coverage or (2) until
Participant no longer qualifies to participate. At the end of
the Officer's Company-paid COBRA coverage, the Officer may
continue COBRA coverage at the Officer's expense or to the
extent eligible under the terms of such Plan may elect to
participate in the Company's self-pay retiree health care
plan.
(b) The Company may offer outplacement services to Participants,
which will be based on the Participant's position.
4.3 Vacation Pay. Participants shall be paid for normal termination
vacation pay and any other earned pay (if any) pursuant to existing
Company policy and applicable state law.
4.4 Other Benefit Plans. Benefits under any other employee benefit plans,
including but not limited to, tax-qualified retirement plans, retiree
health care plans, medical or dependent care expense accounts, fringe
benefit plans, policies, programs, stock option plans and nonqualified
deferred compensation plans sponsored by the Company are governed
solely by the terms of those plans, programs or policies. Participants
may exercise stock options, to the extent that such options are
exercisable under their terms. This Plan does not change the
eligibility, termination or other provisions for those benefits.
4.5 Offset. The Company reserves the right to offset the benefits payable
under Section 4, by any advance, loan or other monies the Participant
owes the Company.
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SECTION 5--DEATH BENEFITS
5.1 Death. If a Participant dies before receiving all of his or her
severance pay due under this Plan, such pay will be distributed in one
lump sum cash payment to the Officer's estate.
5.2 Payment after Death. The Administrator may require that any individual
or entity purporting to represent a Participant's estate provide such
proof of such status as the Administrator may deem appropriate,
including but not limited to letters testamentary or letters of
administration. The Administrator may also require that such
individual, as a condition to receiving severance pay, agree in a
provision to be incorporated in the Release Agreement, to indemnify and
hold harmless the Administrator and such other persons deemed
appropriate by the Administrator for any financial responsibility,
liability or expense arising out of a claim by another party or parties
asserting entitlement to all or part of the benefit payable hereunder.
In addition, the Company reserves the right to offset the benefits
payable under this Section 5 by any advance, loan or other monies the
Participant, with respect to whom the severance pay is being paid, owes
the Company.
SECTION 6--ADMINISTRATION
6.1 Interpretation. The Company shall have sole discretionary authority to
interpret, construe, apply and administer the terms of the Plan and to
determine eligibility for and the amounts of benefits under the Plan,
including interpretation of ambiguous Plan provisions, determination of
disputed facts or application of Plan provisions to unanticipated
circumstances. The Company's decision on any such matter shall be final
and binding.
6.2 Reporting and Disclosure. The Company shall be the administrator of the
Plan for purposes of Section 3(16) of ERISA and shall have
responsibility for complying with any ERISA reporting and disclosure
rules applicable to the Plan for any Plan Year. The Administrator may
at any time delegate to any other named person or body, or reassume
therefrom, any of its fiduciary responsibilities (other than trustee
responsibilities as defined in Section 405(c)(3) of ERISA) or
administrative duties with respect to this Plan.
6.3 Service Providers. The Administrator may contract with one or more
persons to render advice or services with regard to any responsibility
it has under this Plan.
6.4 Rules. Subject to the limitations of this Plan, the Administrator shall
from time to time establish such rules for the administration of this
Plan as the Administrator may deem desirable.
SECTION 7--CLAIMS PROCEDURE
7.1 If a Participant believes he or she has not been provided with
severance pay benefits due under the Plan, then the Participant may
file a request for benefits under this procedure with the Employee
Benefits Department or its delegate within ninety (90) days after the
date the Participant believes he or she should have received such
benefits. If a Participant makes such a request for benefits under the
Plan and that claim is denied, in whole or in part, the Administrator
shall notify the Participant of the adverse determination within ninety
(90) calendar days unless the Administrator determines
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that special circumstances require an extension of time for
processing. If the Administrator determines that an extension of time
is necessary, written notice shall be furnished to the claimant prior
to the end of the initial ninety-day period and the extension shall not
exceed ninety days from the original ninety-day period. The extension
notice shall indicate the special circumstances requiring an extension
and the date by which the Administrator expects to render a
determination.
The Administrator shall notify the Participant of the specific reasons
for the denial with specific references to pertinent Plan provisions on
which the denial is based and shall notify the Participant of any
additional material or information that is needed to perfect the claim
and explanation of why such material or information is necessary. At
that time the Participant will be advised of his or her right to appeal
that determination, and given an explanation of the Plan's review and
appeal procedure including time limits, and a statement regarding the
Participant's right to bring a civil action under ERISA section 502(a)
following an adverse determination or appeal.
7.2 A Participant may appeal the determination or denial by submitting to
the Administrator within sixty (60) calendar days after receiving a
denial notice:
(a) Requesting a review by the Administrator of the claim;
(b) Setting forth all of the grounds upon which the request for
review is based and any facts in support thereof; and
(c) Setting forth any issues or comments which the Participant
deems relevant to the claim.
The Participant may submit written comments, documents, records and
other information relating to his claim. Upon request, the Participant
may obtain free of charge, copies of all documents and records relevant
to his claim.
7.3 The Administrator shall act upon the appeal taking into account all
comments, documents, records and other information submitted by the
Participant without regard to whether such information was submitted or
considered in the initial benefit determination and shall render a
decision within sixty (60) days or one hundred twenty (120) days in
special circumstances after its receipt of the appeal. If the
Administrator determines that an extension of time is necessary,
written notice of the extension shall be furnished to the Participant
prior to the end of the initial sixty-day period. The extension notice
shall indicate the special circumstances requiring an extension of time
and the date by which the Administrator expects to render a
determination.
The Administrator shall review the claim and all written materials
submitted by the Participant, and may require him or her to submit,
within ten (10) days of its written notice, such additional facts,
documents, or other evidence as the Administrator in its sole
discretion deems necessary or advisable in making such a review. On the
basis of its review, the Administrator shall make an independent
determination of the Participant's eligibility for benefits and the
amount of such benefits under the Plan. The decision of the
Administrator on any claim shall be final and conclusive upon all
persons if supported by substantial evidence.
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If the Administrator denies a claim on review in whole or in part, it
shall give the Participant written notice of its decision setting forth
the following: (a) the specific reasons for the denial and specific
references to the pertinent Plan provisions on which its decision was
based; (b) notice that the Participant may obtain free of charge,
copies of all documents, records and other information relevant to the
Participant's claim; and (c) a statement of the Participant's right to
bring a civil action under section 502(a) of ERISA.
7.4 A Participant or his or her legal representative may challenge any
final appeal decision by filing an action in a federal court of
competent jurisdiction, provided that such action is filed no later
than 90 days after receipt of a final decision by the Participant or
his or her legal representative.
SECTION 8--GENERAL
8.1 Funding. The benefits and costs of this Plan shall be paid by the
Company out of its general assets.
8.2 ERISA Status. This Plan is intended to be an "employee welfare benefit
plan", as defined in Section 3(1), Subtitle A of Title 1 of ERISA. The
Plan will be interpreted to effectuate this intent. Notwithstanding any
other provision of this Plan, no Officer shall receive hereunder any
payment exceeding twice that Officer's annual compensation during the
year immediately preceding the termination of his service, within the
meaning of 29 C.F.R. Section 2510.3-2, as the same was in effect on the
effective date of this Plan.
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SECTION 9--AMENDMENT AND TERMINATION
The Company reserves the right to amend this Plan, in whole or in part, or
discontinue or terminate the Plan; provided, however, that any such amendment,
discontinuance or termination shall not affect any right of any Participant to
claim benefits under the Plan or as in effect prior to such amendment,
discontinuance or termination, for events occurring prior to the date of such
amendment, discontinuance or termination. An amendment to this Plan, and/or
resolution of discontinuance or termination, may be made by the Administrator,
to the extent permitted by resolution of the Board of Directors.
IN WITNESS WHEREOF, the Company has caused its officer, duly authorized by
its Board of Directors to execute the Plan effective as of the 1st day of
October, 2002.
ALBERTSON'S, INC.
/S/ John Sims
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By:
Name: John Sims
Its: Executive Vice President &
General Counsel