Retirement Restoration Plan - Safeway Inc.
RETIREMENT RESTORATION PLAN
OF
SAFEWAY INC.
Effective January 1, 1994
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TABLE OF CONTENTS
Page
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ARTICLE I - Definitions 1
ARTICLE II - Eligibility for and Amount of Retirement
Related Benefits 2
ARTICLE III - Executive Death Benefits 6
ARTICLE IV - Miscellaneous 7
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1
SAFEWAY INC.
RETIREMENT RESTORATION PLAN
This Retirement Restoration Plan for designated employees of Safeway Inc. is
adopted by the Company to be effective as of January 1, 1994.
ARTICLE I
DEFINITIONS
1.01 "Actuarial Equivalent" shall mean the equivalent of a given
benefit or a given amount payable in another manner or by other means,
determined by or under the direction of the Committee in accordance with
actuarial principles, methods and assumptions which are found to be
appropriate by the Committee. Unless otherwise determined by the
Committee, such assumptions shall be those assumptions which are in
effect from time to time under the Basic Plan.
1.02 "Affiliate" means any corporation, partnership or other entity
in which the Company has a substantial economic interest and which the
Committee designates as an Affiliate.
1.03 "Basic Plan" means the Employee Retirement Plan of Safeway Inc.
and its Domestic Subsidiaries, as amended and restated from time to
time.
1.04 "Beneficiary" means any person designated in writing by the
Participant to receive benefits under the terms of the Basic Plan.
"Life Insurance Beneficiary" means any person designated in writing by
the Participant to receive benefits under the terms of the Safeway Inc.
Group Term Life Insurance Plan.
1.05 "Board of Directors" means the Board of Directors of Safeway
Inc.
1.06 "Committee" means the Executive Compensation Committee
appointed by the Board of Directors of the Company, and given authority
by the Board of Directors to administer this Plan.
1.07 "Company" means Safeway Inc.
1.08 "Executive Officer" means any Senior Vice President, Executive
Vice President or more senior executive officer of the Company (or an
Affiliate of the Company) provided that he is on a U.S. payroll.
Certain Executive Officers are eligible for special death benefits under
Article III. By written resolution, the Committee may specify other key
employees to be eligible for those benefits or may discontinue coverage
for otherwise eligible Executive Officers.
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1.09 "Participant" means any employee who was a Participant in the
Senior Executive Supplemental Benefit Plan as of December 31, 1993, or
any salaried employee on the U.S. payroll of the Company, any
Subsidiary, or any Affiliate, who is a Participant in the Basic Plan and
whose benefits under the Basic Plan are limited by the restrictions of
Sections 401(a)(17) and/or 415 of the Internal Revenue Code of 1954 or
the Internal Revenue Code of 1986, as amended (collectively, the
"Code"); provided that no employee shall become or remain a Participant
if the Committee determines that such employee is not a member of "a
select group of management 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 ("ERISA"). Certain
employees who might otherwise qualify as Participants in this Plan shall
specifically be ineligible for benefits set forth in Article II, Article
III or both Articles of this Plan as set forth in Appendix B, which
appendix may be amended or supplemented by the Committee, from time to
time, in its sole discretion and the Committee shall have the power to
exclude current Participants from the Plan in its sole discretion.
1.10 "Plan" means this Retirement Restoration Plan.
1.11 "Service" shall mean service of a Participant as a common law
employee of the Company, any Subsidiary, or any Affiliate.
1.12 "Subsidiary" means any corporation in which the Company holds
stock, directly or indirectly, possessing more than 50% of the total
combined voting power of all classes of stock of such corporation.
1.13 The masculine gender, where appearing in the Plan will be
deemed to include the feminine gender, and the singular may include the
plural, unless the context clearly indicates the contrary.
ARTICLE II
ELIGIBILITY FOR AND AMOUNT OF RETIREMENT RELATED BENEFITS
2.01 Eligibility
Each Participant is eligible to receive a retirement benefit under
this Plan if he is eligible to receive a benefit under the terms of
the Basic Plan and if he separates from Service after attaining age
55. Notwithstanding the foregoing, the Beneficiary of a Participant
who separates from Service due to death shall be eligible for a
benefit hereunder regardless of the Participant's age at death.
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2.02 Amount of Benefit
Unless a Participant is entitled to receive a greater retirement
benefit under paragraph 2.03 below, the Participant's retirement
benefit under this Plan shall be the Actuarial Equivalent of the
Participant's benefits under the Basic Plan with respect to the period
of the Participant's participation in the Basic Plan, subject to the
adjustments described in subparagraphs (a), (b), and (c) below,
reduced by the Actuarial Equivalent of the benefits to which the
Participant is entitled under the Basic Plan:
(a) "Compensation", as defined in the Basic Plan shall be
determined without reference to the limitations of Section
401(a)(17) of the Code,
(b) the limitation on benefits of Section 415 of the Code shall
not apply, and
(c) a Participant's number of Years of Participation which are
taken into account in determining the Participant's benefits
under the Basic Plan shall be limited to 35 years, unless the
Participant had more than 35 Years of Participation as of
December 31, 1993, in which case the Participant's Years of
Participation shall be the Participant's number of Years of
Participation as of the date of his separation from Service.
2.03 Minimum Benefit
The amount of monthly benefit payable to a Participant who was a
member of the Senior Executive Supplemental Benefit Plan as of
December 31, 1993 under paragraph 2.02 above shall not be less than
the "gross frozen benefit" defined in (a) below, minus the "frozen
offsets" defined in (b) below, minus the amount deemed payable to the
Participant under the terms of the Basic Plan offset defined in (c)
below.
(a) "Gross frozen benefit" shall mean the Participant's retirement
benefit under the Senior Executive Supplemental Benefit Plan
as in effect immediately prior to its termination based on the
Participant's age and service determined as of December 31,
1993, and final average compensation calculated as of December
31, 1993 as if the Participant separated from Service on such
date, as modified below. This amount shall be frozen as of
December 31, 1993 and shall equal the product of (i), (ii) and
(iii), as follows:
(i) 85% of the Participant's final average annual
compensation calculated as of December 31, 1993 as if
the Participant separated from Service on such date
under the terms of the Senior Executive Supplemental
Benefit Plan, divided by 12.
(ii) The early retirement factor under the terms of the
Senior Executive Supplemental Benefit Plan based on
the Participant's age as of December 31, 1993,
provided that if the Participant is then under age
55, the early retirement factor for age 55 will be
used.
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(iii) A fraction, not to exceed 1.0, where the numerator is
the Participant's years of Service determined as of
December 31, 1993 under the terms of the Senior
Executive Supplemental Benefit Plan and the
denominator is 20 years.
(b) The "frozen offsets" shall also be calculated under the terms
of the Senior Executive Supplemental Benefit Plan as in effect
immediately prior to its termination, as modified below, and
shall equal the sum of (i) and (ii), as follows.
(i) The Participant's maximum monthly primary Social
Security benefit projected to be payable at age 65
based on the Social Security law in effect on
December 31, 1993 and assuming:
* 4% annual growth in the National Average
Earnings Index, and
* 3% annual increases in the Consumer Price
Index.
This amount shall be multiplied by an early
retirement factor under the Senior Executive
Supplemental Benefit Plan based on the Participant's
actual retirement date, as selected from the
following table:
Actual Retirement Age Early Retirement Factor
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65 100.0%
64 93.3
63 86.7
62 80.0
61 73.3
60 66.7
59 63.3
58 60.0
57 56.7
56 53.3
55 50.0
The early retirement factor shall be
interpolated for fractional ages.
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(ii) The monthly benefit, payable as a single life
annuity, that can be purchased at the Participant's
actual retirement date based on:
* The Participant's assumed account balance in
the Safeway Inc. Profit Sharing Plan as of
December 31, 1992, increased by the lesser of
the GIC rate of return or the aggregate
annual earnings rate of the Profit Sharing
Plan for 1993. This amount shall be further
increased by 7% assumed annual growth
compounded from December 31, 1993 until the
Participant's actual retirement date.
* Single life annuity factors based on the 1983
Group Annuity Mortality Table discounted at
7% interest.
(c) A Participant's Basic Plan offset shall equal the amount
payable to the Participant under the Basic Plan, in a single
life annuity form, increased by any additional benefits,
stated in single life annuity form, which the Participant
would have been entitled to receive with respect to any period
of time during which the Participant was eligible to, but
elected not to, participate in the Basic Plan and by the
single life annuity benefits attributable to any employee
contributions which were withdrawn by the Participant from the
Basic Plan.
This paragraph 2.03 generally grandfathers retirement benefits payable
under the Senior Executive Supplemental Benefit Plan prior to its
termination on December 31, 1993, but does not grandfather any
benefits that would have been payable on account of a Participant's
pre-retirement or post-retirement death, except to the extent that
post-retirement survivor benefits are payable in connection with the
annuity form payable under paragraph 2.04 below. To clarify the
calculation of the minimum benefit hereunder, Appendix A attached
hereto sets forth the amounts calculated under paragraph 2.03(a) and
under subparagraphs (i) and (ii) of paragraph 2.03(b) assuming
retirement occurs at age 65 or December 31, 1993, if later.
2.04 Forms and Times of Benefit Payments
Any benefit to which a Participant or Beneficiary is determined to be
entitled to under this Plan will be payable in the same form, at the
same time, and subject to the same actuarial reductions, if any, as
benefits payable under the terms of the Basic Plan; provided, however,
the option to choose a lump sum distribution shall not be available
under this Plan. Accordingly, if benefits under the Basic Plan are
paid in a lump sum, the Participant or Beneficiary shall elect, at
least one month prior to commencement of payments, one of the annuity
options offered under the Basic Plan for payment of benefits under
this Plan and the amount of the benefit shall be reduced if a form
other than single life annuity is elected. If periodic payments are
nominal, the Committee may, in its sole discretion, pay the benefit in
a lump sum payment on an Actuarially Equivalent present value basis.
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ARTICLE III
EXECUTIVE DEATH BENEFITS
3.01 Eligibility for Pre-retirement Death Benefit
A death benefit shall be payable to the Life Insurance Beneficiary of
any Executive Officer who is a Participant and who dies subsequent to
December 31, 1993 while employed as an Executive Officer by the
Company, a Subsidiary, or an Affiliate, regardless of whether death
occurs while performing services.
3.02 Amount of Pre-retirement Death Benefit
The death benefit payable to a Life Insurance Beneficiary on account
of the pre-retirement death of an eligible Executive Officer shall
equal 400% of the Executive Officer's annual rate of base salary in
effect at time of his death to a maximum death benefit of $4 million,
minus the amount payable on account of the Executive Officer's death
to his Life Insurance Beneficiary.
3.03 Eligibility for Post-retirement Death Benefit
A post-retirement death benefit shall be payable to the Life Insurance
Beneficiary of a Participant if and only if he retires from the
Company, a Subsidiary, or an Affiliate as an Executive Officer after
attaining age 55 and after December 31, 1993.
3.04 Amount of Post-retirement Death Benefit
The death benefit payable to a Life Insurance Beneficiary on account
of the post-retirement death of an eligible Executive Officer shall
equal the greater of (a) or (b), as follows:
(a) (i) Death prior to age 70: If the eligible Executive
Officer dies prior to age 70, 100% of the his final
average annual compensation at retirement as defined
under the Basic Plan, to a maximum of $1 million.
(ii) Death on or after attainment of age 70: If the
eligible Executive Officer dies upon or after
attaining age 70, 25% of the amount in (i) above.
(b) If the eligible Executive Officer was a member of the Senior
Executive Supplemental Benefit Plan, and had both attained age
50 and participated in the Safeway Executive Supplemental
Benefit Plan for at least five years as of December 31, 1993,
the lump sum post-retirement death benefit in effect on
December 31, 1993 under the terms of the Senior Executive
Supplemental Benefit Plan based on final average compensation
determined as of December 31, 1993.
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3.05 Post-retirement Death Benefit for Certain Former Senior Executive
Supplemental Benefit Plan Members
Participants who were members of the Senior Executive Supplemental
Benefit Plan who are not eligible for a post-retirement death benefit
under paragraph 3.03 shall be eligible for the Safeway Post-Retirement
Life Insurance Plan (irrespective of the 15-year service requirement).
If such a Participant's death benefit under the Post-Retirement Life
Insurance Plan is less than the amount payable under paragraph
3.04(b), and if the Participant had both attained age 50 and
participated in the Safeway Executive Supplemental Benefit Plan for at
least five years as of December 31, 1993, then the difference between
such amounts shall be paid under this Plan to the Participant's Life
Insurance Beneficiary.
3.06 Forms and Times of Benefit Payments
Death benefits shall be paid as soon as practicable to the Life
Insurance Beneficiary following submission of an authentic death
certificate. In the event that lump sum payments result in cash flow
strain or other adverse impact on the Company as determined by the
Committee, the Committee shall have sole discretion to make payment in
the form of periodic installments which have the same Actuarially
Equivalent value as the lump sum benefit specified herein.
ARTICLE IV
MISCELLANEOUS
4.01 Accrual and Vesting of Benefits
No Participant, or Life Insurance Beneficiary shall have accrued a
right to or vested in any benefits under Article III of this Plan
until the date on which payment of such benefits shall have commenced
thereunder. No Participant or Beneficiary shall have accrued a right
to or vested in any benefits under Article II of this Plan until the
earlier of the date on which payment of such benefits shall have
commenced thereunder or the last day of the calendar year of the
Participant's retirement.
4.02 Amendment and Plan Termination
The Company may, in its sole and absolute discretion, terminate,
suspend or amend this Plan at any time or from time to time, in whole
or in part. Any such termination, suspension or amendment may reduce
or eliminate any benefits payable hereunder except with respect to any
Participant, Beneficiary or Life Insurance Beneficiary who is
receiving benefit payments hereunder as of the date of such
termination, suspension or amendment.
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In the event of a Plan termination, the Board of Directors, may, at
its sole and absolute discretion, elect any one or more of the
following alternatives to satisfy the Company's obligations to
Participants or Beneficiaries who are then receiving benefits under
the Plan:
(a) Continue to provide benefit payments in accordance with
Articles II and III.
(b) Make lump sum payments which are Actuarially Equivalent to the
benefits payable under the Plan.
4.03 Not An Employment Agreement
Nothing contained herein will confer upon any Participant the right to
be retained in the service of the Company, nor will it interfere with
the right of the Company to deal with Participants without regard to
the existence of this Plan or to terminate a Participant's employment
at any time with or without cause.
4.04 No Advance Funding
This Plan is unfunded, and the Company will make Plan benefit payments
solely on a current disbursement basis. Nothing in the establishment
of this Plan is to be construed as requiring or authorizing the
Company to create or maintain any separate fund, account or reserve to
provide for the payment of the Company's liability to a Participant
under the Plan.
All payments hereunder shall be made from the general assets of the
Company and no Participant shall have any right hereunder to any
specific asset of the Company.
4.05 Assignment of Benefits
A Participant may not, either voluntarily or involuntarily, assign,
anticipate, alienate, commute, pledge, discount, borrow against or
encumber any benefits to which he is or may become entitled to under
the Plan, nor may the same be subject to attachment or garnishment by
any creditor of a Participant.
4.06 Interpretation
This Plan is intended to qualify for exemption from Parts II, III and
IV of the Employee Retirement Income Security Act of 1974, as amended,
as a plan maintained primarily for the purpose of providing deferred
compensation for a select group of management or highly compensated
employees under Sections 201(2), 301(a)(3) and 401(a)(1) of such Act,
and shall be so interpreted. Subject to that restriction, the
Committee shall have the sole discretion to interpret this Plan and to
adopt rules and interpretations for the application and implementation
of this Plan. The decisions and interpretations by the Committee
shall be final and binding on all Participants.
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4.07 Governing Law
This Plan shall be construed, administered and governed in all
respects under and by the laws of the State of California, except to
the extent preempted by federal law.
IN WITNESS WHEREOF, Safeway Inc. has adopted this Plan, effective
January 1, 1994.
SAFEWAY INC.
BY___________________________________
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APPENDIX A
Gross Frozen Frozen Offsets At Age 65 Under
Benefit Under ------------------------------
Participant Provision 2.03(b) Provision 2.03(b)(i) Provision 2.03(b)(ii)
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APPENDIX B
Ineligible for Benefits Under
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Employee Article II Article III Articles II and III
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