Exhibit 10.46
SUPPLEMENTARY EXECUTIVE RETIREMENT PLAN
OF
FEDERATED DEPARTMENT STORES, INC.
(As amended and restated effective as of January 1, 1997)
TABLE OF CONTENTS
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Page
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ARTICLE I NAME AND PURPOSE OF PLAN....................................................................I-1
1.1 Name of Plan................................................................................I-1
1.2 Purpose of Plan.............................................................................I-1
1.3 Effective Date of Plan Document.............................................................I-1
ARTICLE II DEFINITIONS................................................................................II-1
2.1 Annuity....................................................................................II-1
2.2 Basic Pension Plan.........................................................................II-1
2.3 Board of Directors.........................................................................II-1
2.4 Code.......................................................................................II-1
2.5 Committee..................................................................................II-1
2.6 Effective Amendment Date...................................................................II-1
2.7 Employee...................................................................................II-1
2.8 Employer...................................................................................II-1
2.9 ERISA......................................................................................II-1
2.10 Executive..................................................................................II-1
2.11 Executive Deferred Compensation Plan.......................................................II-2
2.12 Federated..................................................................................II-2
2.13 Participant................................................................................II-2
2.14 Plan.......................................................................................II-2
ARTICLE III ELIGIBILITY AND PARTICIPATION.............................................................III-1
3.1 Eligibility...............................................................................III-1
3.2 Entry as Participants.....................................................................III-2
3.3 Duration of Participation.................................................................III-2
3.4 Reinstatement of Participation............................................................III-2
ARTICLE IV SUPPLEMENTAL RETIREMENT BENEFITS...........................................................IV-1
4.1 Supplemental Retirement Benefit............................................................IV-1
4.2 Benefit Formula for Supplemental Retirement Benefit........................................IV-1
4.3 Form and Amount of Supplemental Retirement Benefit.........................................IV-2
4.4 Effect on Supplemental Retirement Benefit of Reemployment or Continued Employment
After Commencement of Such Benefit.........................................................IV-3
4.5 Definitions for Determination of Supplemental Retirement Benefit...........................IV-3
4.6 Other Cessation of Employment..............................................................IV-4
ARTICLE V PRE-PENSION DEATH BENEFITS..................................................................V-1
5.1 Eligibility for Pre-Pension Death Benefit...................................................V-1
5.2 Beneficiary.................................................................................V-1
i
5.3 Form and Amount of Pre-Pension Death Benefit if Beneficiary is Participant's Spouse.........V-1
5.4 Form and Amount of Pre-Pension Death Benefit if Beneficiary is Not Participant's
Spouse......................................................................................V-2
ARTICLE VI ADDITIONAL BENEFIT PROVISIONS..............................................................VI-1
6.1 Benefits Not Assignable....................................................................VI-1
6.2 Benefits Payable to Minors, Incompetents, and Others.......................................VI-1
6.3 Administrative Adjustment for Small Benefits...............................................VI-1
6.4 Timing of Benefit Distributions............................................................VI-1
6.5 References to Form of Payment..............................................................VI-2
6.6 Actuarial Assumptions......................................................................VI-2
6.7 Applicable Benefit Provisions..............................................................VI-2
6.8 Merger of Prior Plans and Coverage of Pre-Effective Amendment Date Participants............VI-3
ARTICLE VII SOURCE OF BENEFITS........................................................................VII-1
ARTICLE VIII ADMINISTRATION...........................................................................VIII-1
8.1 Committee................................................................................VIII-1
8.2 Powers of Committee......................................................................VIII-1
8.3 Actions of Committee.....................................................................VIII-1
8.4 Compensation of Committee and Payment of Administrative Expenses.........................VIII-1
8.5 Limits on Liability......................................................................VIII-1
8.6 Claims Procedure.........................................................................VIII-2
ARTICLE IX TERMINATION OR AMENDMENT...................................................................IX-1
9.1 Right and Procedure to Terminate...........................................................IX-1
9.2 Amendment of Plan..........................................................................IX-1
ARTICLE X MISCELLANEOUS...............................................................................X-1
10.1 Plan Not a Contract of Employment...........................................................X-1
10.2 Construction................................................................................X-1
SIGNATURE PAGE.....................................................................................Signature Page-1
ii
SUPPLEMENTARY EXECUTIVE RETIREMENT PLAN
OF
FEDERATED DEPARTMENT STORES, INC.
(As amended and restated effective as of January 1, 1997)
ARTICLE I
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NAME AND PURPOSE OF PLAN
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1.1 NAME OF PLAN. The name of this Plan shall be the Supplementary
Executive Retirement Plan of Federated Department Stores, Inc.
1.2 PURPOSE OF PLAN. The purpose of the Plan is to provide certain
executives of the Employer with additional amounts of retirement pay.
1.3 EFFECTIVE DATE OF PLAN DOCUMENT. The Plan was originally adopted as
of January 1, 1984. This Plan document amends and restates the Plan effective as
of the Effective Amendment Date.
I-1
ARTICLE II
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DEFINITIONS
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As used in the Plan, the following terms shall have the meanings
indicated below unless it is clear from the context that another meaning is
intended:
2.1 ANNUITY - means a form of benefit, without any life insurance,
which provides for equal payments in monthly installments (or, to the extent
provided under Section 6.3 below, quarterly installments) over more than a
one-year period.
2.2 BASIC PENSION PLAN - means the plan which is known as the Federated
Department Stores, Inc. Cash Account Pension Plan, as such plan exists as of the
Effective Amendment Date or as it may thereafter be amended. The Basic Pension
Plan, as herein defined, is a defined benefit plan (as such term is defined in
Section 414(j) of the Code and Section 3(35) of ERISA), is intended to be
qualified as a tax-favored plan under Section 401(a) of the Code, and is
sponsored by Federated.
2.3 BOARD OF DIRECTORS - means the Board of Directors of Federated.
2.4 CODE - means the Internal Revenue Code of 1986, as such code exists
as of the Effective Amendment Date or as it may thereafter be amended.
2.5 COMMITTEE - means all of the committees appointed under Section 8.1
below to administer the Plan.
2.6 EFFECTIVE AMENDMENT DATE - refers to the effective date of this
amendment and restatement of the Plan and means January 1, 1997.
2.7 EMPLOYEE - means, at any point in time, any individual who is a
common law employee of the Employer and who is classified as an employee by the
Employer for payroll payment and withholding purposes at such time.
2.8 EMPLOYER - means Federated and each other corporation which is a
member of the controlled group of corporations (within the meaning of Section
414(b) of the Code) which includes Federated.
2.9 ERISA - means the Employee Retirement Income Security Act of 1974,
as such act exists as of the Effective Amendment Date or as it may thereafter be
amended.
2.10 EXECUTIVE - means, at any point in time, any Employee who at such
time, pursuant to the provisions of Section 3.1 below, meets the criteria
necessary to become a Participant in the Plan and to accrue benefits under the
Plan.
II-1
2.11 EXECUTIVE DEFERRED COMPENSATION PLAN - means the plan which is
known as the Executive Deferred Compensation Plan of Federated Department
Stores, Inc., as such plan exists as of the Effective Amendment Date or as it
may thereafter be amended. The Executive Deferred Compensation Plan, as herein
defined, allows certain executives of the Employer to defer a portion of their
compensation and is sponsored by Federated.
2.12 FEDERATED - means Federated Department Stores, Inc., or any
corporate successor thereto. Federated, as herein defined, is the sponsor of the
Plan.
2.13 PARTICIPANT - means, at any point in time, any person who at such
time either is accruing benefits under the Plan or still has accrued benefits
under the Plan. The provisions of Article III below determine when a person is a
Participant on or after the Effective Amendment Date.
2.14 PLAN - means the plan contained in this document, which is named
the Supplementary Executive Retirement Plan of Federated Department Stores, Inc.
II-2
ARTICLE III
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ELIGIBILITY AND PARTICIPATION
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3.1 ELIGIBILITY.
3.1.1 Only Executives are eligible to become Participants in
the Plan and thereby accrue benefits under the Plan. A person is considered to
be an Executive at any point in time if, and only if, he or she is an Employee,
and meets the criteria established and in effect under Section 3.1.2 below, at
such time.
3.1.2 In order for an Employee to be considered an Executive
under the Plan, he or she must meet the criteria established in accordance with
the following provisions of this Section 3.1.2 (such criteria being called in
the following provisions of this Section 3.1.2 as the "eligibility criteria"):
(a) As of the Effective Amendment Date and at any later point in
time until changed under paragraph (b) below, the eligibility criteria which
must be met by an Employee in order for him or her to be considered an Executive
shall be an annualized rate of base compensation (not including, among other
things, bonuses, commissions, overtime pay, stock options, severance pay,
retention bonuses, fringe benefits, or welfare benefits) of $100,000 or more.
(b) Subject to the provisions of paragraph (c) below but
notwithstanding the provisions of paragraph (a) above, the Committee may, at any
time and from time to time, increase the dollar amount set forth in paragraph
(a) above, or otherwise change the eligibility criteria, pursuant to a written
resolution adopted either at any meeting of the Committee or in a writing signed
by all members of the Committee.
(c) Notwithstanding any other provision of the Plan, all
Employees who meet the eligibility criteria must be part of a select group of
management or other highly compensated employees (within the meaning of Sections
201, 301, and 401 of ERISA) of the Employer. As a result, the Committee shall,
pursuant to its power to amend the eligibility criteria under the provisions of
paragraph (b) above, amend the eligibility criteria at any time if necessary to
ensure that all of the Employees who meet the eligibility criteria in effect at
such time are part of such a select group of management or other highly
compensated employees of the Employer.
(d) Any eligibility criteria which is established under the
foregoing provisions of this Section 3.1.2 shall remain in effect until changed
by the Committee pursuant to the foregoing provisions of this Section 3.1.2. In
addition, any written resolution of the Committee which amends the eligibility
criteria shall hereby be incorporated by reference into, and hereby made a part
of, the Plan.
III-1
3.2 ENTRY AS PARTICIPANTS. Executives shall become Participants in the
Plan on or after the Effective Amendment Date only in accordance with the
following provisions:
3.2.1 Each person who, as of any Entry Date which occurs on
or after the Effective Amendment Date, is an Executive on such date shall become
a Participant on such Entry Date.
3.2.2 For purposes of Section 3.2.1 above, an "Entry Date"
means the first day of any calendar year.
3.3 DURATION OF PARTICIPATION. Each Participant in the Plan shall
continue to be a Participant until he or she ceases to be an Executive and the
entire amount of his or her benefit, if any, under the Plan has been paid by the
Employer.
3.4 REINSTATEMENT OF PARTICIPATION. Any person who ceases to be a
Participant, but who is thereafter reemployed as an Executive by the Employer,
shall be reinstated as a Participant only when, and if, he or she becomes a
Participant under the provisions of Section 3.2 above (determined as if he or
she had not previously been a Participant in the Plan).
III-2
ARTICLE IV
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SUPPLEMENTAL RETIREMENT BENEFITS
--------------------------------
4.1 SUPPLEMENTAL RETIREMENT BENEFIT. Subject to the other provisions of
the Plan, a Participant in the Plan shall be entitled to a retirement benefit
under the Plan, called in the other provisions of the Plan as the "supplemental
retirement benefit," if, and only if, he or she ceases to be an Employee and is
eligible to receive a retirement benefit under the Basic Pension Plan.
4.2 BENEFIT FORMULA FOR SUPPLEMENTAL RETIREMENT BENEFIT. Subject to the
other provisions of the Plan, if a Participant is entitled to a supplemental
retirement benefit under the Plan, the monthly amount of such benefit, if it is
payable in the form of a single life annuity which commences as of the later of
the Participant's normal retirement date or the first day of the first month
which begins on or after he or she ceases to be an Employee, shall be equal to
the result produced by first multiplying the amount determined under Section
4.2.1 below by Section 4.2.2 below and second subtracting from such product the
amount determined under Section 4.2.3 below ((4.2.1 x 4.2.2) - 4.2.3), where
Sections 4.2.1, 4.2.2, and 4.2.3 are as follows:
4.2.1 The amount determined under this Section 4.2.1 is
equal to the difference between (1) 1.5% of the Participant's highest average
monthly compensation for any five calendar years (regardless of whether they are
consecutive) falling within the latest ten calendar years which end prior to the
date the Participant ceases to be an Executive and (2) 2.5% of the Participant's
estimated monthly social security benefit.
4.2.2 The amount determined under this Section 4.2.2 is
equal to the number, up to but not in excess of 30, of the Participant's years
of vesting service as of the date he or she ceases to be an Executive
(disregarding any fractional part of a year of vesting service).
4.2.3 The amount determined under this Section 4.2.3 is
equal to the monthly amount of a benefit which, if paid to the Participant in
the form of a single life annuity which commences as of the later of the
Participant's normal retirement date or the first day of the first month which
begins on or after he or she ceases to be an Employee, would be actuarially
equivalent to the aggregate of: (1) the benefits which the Participant accrues
under the Basic Pension Plan; and, if and to the extent applicable, (2) the sum
of (x) the account balance of the Participant under the Retirement Income (the
"RI") portion of the prior Federated Department Stores, Inc. Retirement Income
and Thrift Incentive Plan determined as of December 31, 1995, (y) the account
balance of the Participant under the Profit Sharing Retirement Plan (the "PSRP")
portion of Part B of the prior Allied Stores Corporation Retirement Benefit and
Profit Sharing Investment Program determined as of December 31, 1979, and (z)
the account balance of the Participant under the R.H. Macy & Co., Inc. Profit
Sharing Plan determined as of December 31, 1996.
IV-1
4.3 FORM AND AMOUNT OF SUPPLEMENTAL RETIREMENT BENEFIT. If a
Participant becomes entitled to a supplemental retirement benefit under this
Article IV, then the form and amount of such supplemental retirement benefit
shall be determined in accordance with the following provisions:
4.3.1 Subject to the provisions of Sections 4.3.2 and 4.3.3
below, the supplemental retirement benefit which is payable to the Participant
under the Plan shall be paid in the form of a single life annuity which
commences as of the later of the Participant's normal retirement date or the
first day of the first month which begins on or after the date he or she ceases
to be an Employee. The monthly amount of such benefit shall be equal to the
amount determined under the provisions of Section 4.2 above.
4.3.2 (a) Subject to the provisions of Section 4.3.3 below
but notwithstanding the provisions of Section 4.3.1 above, the Participant may,
at any time prior to the commencement of his or her supplemental retirement
benefit under the Plan and in lieu of any other possible form of payment for
such benefit, elect that payment of his or her supplemental retirement benefit
under the Plan be made in any Annuity form different from the benefit form
described in Section 4.3.1 above, provided that the Annuity form being requested
is permitted as a form of payment for the Participant's benefit under the Basic
Pension Plan.
(b) Further, and also subject to the provisions of
Section 4.3.3 below but notwithstanding the provisions of Section 4.3.1 above,
if the Participant requests, prior to the date he or she ceases to be an
Employee, that the payment of his or her supplemental retirement benefit under
the Plan be made in the form of a lump sum cash payment which is paid as of the
first day of the first month both which begins after the date he or she ceases
to be an Employee and during which the Committee can administratively determine
and process the payment of such benefit, the Committee may, in its sole
discretion and after taking into account the interests of the Employer, agree to
such request and cause such benefit to be paid in accordance with the lump sum
form of payment so requested and in lieu of any other possible form of payment
for such benefit. The Committee is not in any manner obligated to agree to such
request, however.
(c) If, under the provisions of paragraph (a) or
(b) above, the Participant's supplemental retirement benefit under the Plan is
paid in a form different from the benefit form described in Section 4.3.1 above,
then the monthly amount or lump sum amount, as the case may be, of the
Participant's supplemental retirement benefit when it is to be paid in
accordance with the different form shall be that amount which makes such
supplemental retirement benefit actuarially equivalent to the Participant's
supplemental retirement benefit if it were to be paid in the form of payment
described in Section 4.3.1 above.
4.3.3 Further, notwithstanding the provisions of Sections
4.3.1 and 4.3.2 above, if the supplemental retirement benefit payable under the
Plan to the Participant has a present value of $15,000 or less as of the first
day of the first month both which begins on or after the date that the
Participant ceases to be an Employee and during which the Committee can
IV-2
administratively determine and process the payment of the benefit, then such
supplemental retirement benefit shall be converted to and paid as a lump sum
cash payment as of such date (with the amount of such payment equal to such
present value amount). For purposes hereof, the present value of the
Participant's supplemental retirement benefit as of any date shall be equal to
the amount that a lump sum cash payment made as of such date would be if such
lump sum payment were to be actuarially equivalent to the Participant's
supplemental retirement benefit if it were to be paid in the form of payment
described in Section 4.3.1 above.
4.4 EFFECT ON SUPPLEMENTAL RETIREMENT BENEFIT OF REEMPLOYMENT OR
CONTINUED EMPLOYMENT AFTER COMMENCEMENT OF SUCH BENEFIT. If a Participant who
becomes entitled to the distribution of a supplemental retirement benefit under
the Plan is reemployed by or continues in employment with the Employer as an
Executive, then the provisions of the Basic Pension Plan which apply to the
effect on a participant's retirement benefit of the reemployment or continued
employment of the participant by or with the Employer shall apply in similar
fashion to the Participant's supplemental retirement benefit under the Plan as
if such supplemental retirement benefit were payable under the Basic Pension
Plan.
4.5 DEFINITIONS FOR DETERMINATION OF SUPPLEMENTAL RETIREMENT BENEFIT.
For purposes of the other provisions of the Plan, the following terms, all of
which relate to the determination of any Participant's supplemental retirement
benefit under the Plan, shall have the meanings hereinafter set forth unless the
context otherwise requires:
4.5.1 A Participant's "compensation" for any period (for
purposes of this Section 4.5.1, the "subject period") means, except as is
otherwise noted below, his or her Compensation for the subject period under, and
as such term is defined in, the Basic Pension Plan. However, notwithstanding the
foregoing, any amounts which would be part of the Participant's Compensation for
the subject period under the Basic Pension Plan but for the fact such amount is
deferred (for purposes of receipt by the Participant) to a later period by
reason of an election of the Participant under the Executive Deferred
Compensation Plan shall still be considered as part of the Participant's
compensation for the subject period under the Plan. Also, notwithstanding the
foregoing, the limitations of Section 401(a)(17) of the Code shall not apply to
the determination of the Participant's compensation for purposes of the Plan. In
addition, and also notwithstanding the foregoing, any remuneration that the
Participant receives for services performed after the latest date on which he or
she qualifies as an Executive, regardless of the form in which it is paid, shall
not be considered as part of the Participant's compensation for purposes of the
Plan.
4.5.2 A Participant's "estimated monthly social security
benefit" means the monthly primary insurance benefit which would be payable to
the Participant under Title II of the Federal Social Security Act, as amended,
as of the later of the date the Participant first attains his or her normal
retirement date or the date on which the Participant ceases to be an Employee,
if such benefit was computed on the basis of the benefit and wage base levels in
effect under the Federal Social Security Act, as amended, as of the date on
which the Participant
IV-3
ceases to be an Employee and on the basis of a compensation record determined in
accordance with the following rules:
(a) For each of the first calendar year in which
the Participant performs services as an Employee and all prior calendar years,
the Participant shall be deemed to have wages for Federal Social Security Act
purposes equal to the result produced by discounting his or her compensation for
the calendar year immediately following the first calendar year in which the
Participant performs services as an Employee backwards to the applicable
calendar year, using for this purpose the actual change in the average wages as
determined by the Federal Social Security Administration;
(b) For each of the calendar years beginning
with the calendar year immediately following the first calendar year in which
the Participant first performs services as an Employee and ending with the last
full calendar year ending on or before the date on which the Participant ceases
to be an Employee, the Participant shall be deemed to have wages for Federal
Social Security Act purposes equal to his or her compensation for the applicable
calendar year; and
(c) For the period which begins on the first
day of the first calendar year ending after the date on which the Participant
ceases to be an Employee and ends on the date the Participant first attains his
or her normal retirement date, the Participant shall be deemed to have an annual
rate of wages for Federal Social Security Act purposes equal to the
Participant's compensation for the latest calendar year which ends prior to the
date the Participant ceases to be an Employee.
4.5.3 A Participant's "normal retirement date" means his or
her Normal Retirement Date as such term is defined in the Basic Pension Plan.
4.5.4 A "single life annuity" means an Annuity which is
payable monthly for the life of the applicable Participant, ending with the last
monthly payment due for the month in which the Participant dies.
4.5.5 A Participant's "years of vesting service" means,
except as noted below, the number of years of Vesting Service with which he or
she is credited with under, and in accordance with, the provisions of the Basic
Pension Plan; except that any such years of Vesting Service which are
disregarded under the Basic Pension Plan solely by reason of a break-in-service
of the Participant shall still be included as years of vesting service for
purposes of the Plan if the Participant is reemployed by the Employer for at
least five years after such break-in-service. In addition, and notwithstanding
the foregoing, any services completed by the Participant after the latest date
on which he or she qualifies as an Executive shall be disregarded in determining
the Participant's years of vesting service for purposes of the Plan.
4.6 OTHER CESSATION OF EMPLOYMENT. Except as may otherwise be provided
in Article V below, if a Participant dies prior to the date as of which any
supplemental retirement
IV-4
benefit to which he or she is entitled under the Plan begins to be paid, or if
the Participant ceases to be an Employee for any reason at a time when he or she
is not entitled to a retirement benefit under the Basic Pension Plan (and hence
is not entitled to a supplemental retirement benefit under the Plan), neither he
or she nor any person claiming by or through him or her shall be entitled to
receive any benefit under the Plan. In such case, his or her interest under the
Plan shall be forfeited.
IV-5
ARTICLE V
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PRE-PENSION DEATH BENEFITS
--------------------------
5.1 ELIGIBILITY FOR PRE-PENSION DEATH BENEFIT.
------------------------------------------
5.1.1 A death benefit, called in the other provisions of the
Plan as a "pre-pension death benefit," shall be paid to the beneficiary of a
Participant who both (1) dies while still an Employee (and prior to any
supplemental retirement benefit beginning to be paid to him or her under the
Plan) and (2) would have been entitled to a supplemental retirement benefit
under Article IV above if he or she had not died but had ceased to be an
Employee on the date of his or her death.
5.1.2 In addition, a pre-pension death benefit shall also be
paid to the beneficiary of a Participant who dies after terminating employment
as an Employee at a time when he or she was entitled to a supplemental
retirement benefit under Article IV above but prior to the date as of which such
supplemental retirement benefit begins to be paid to him or her.
5.1.3 Except as may be provided in Sections 5.1.1 and 5.1.2
above, no pre-pension death benefit (or any other death benefit) is payable
under the Plan with respect to a Participant who dies prior to the date he or
she is eligible for or begins to receive a supplemental retirement benefit under
Article IV above.
5.2 BENEFICIARY. For purposes of this Article V, the "beneficiary" of
any Participant shall mean the person who is the Participant's lawful spouse at
the time of the Participant's death; except that, if it is established to the
satisfaction of the Committee that the Participant is not survived by a lawful
spouse or such spouse cannot reasonably be located, the Participant's
"beneficiary" shall be the person or trust named by the Participant as his or
her beneficiary for purposes of the Plan's pre-pension death benefit in a
writing or form which is filed with the Committee prior to the Participant's
death; and except that, if the Committee determines that the Participant is not
survived by a lawful spouse or other properly designated beneficiary who can
reasonably be located, the Participant's "beneficiary" shall be deemed to be the
Participant's estate.
5.3 FORM AND AMOUNT OF PRE-PENSION DEATH BENEFIT IF BENEFICIARY IS
PARTICIPANT'S SPOUSE. If a Participant's beneficiary becomes entitled to a
pre-pension death benefit under this Article V and such beneficiary is the
Participant's surviving spouse, then the form and amount of such death benefit
shall be determined in accordance with the following provisions:
5.3.1 Subject to the provisions of Sections 5.3.2 below, the
pre-pension death benefit which is payable to the Participant's surviving spouse
under the Plan shall be paid in the form of a lump sum cash payment which is
paid as of the first day of the first month both which begins on or after the
date of the Participant's death and during which the Committee can
V-1
administratively determine and process the payment of the death benefit to the
surviving spouse. The amount of such lump sum payment shall be the amount which
makes such lump sum payment actuarially equivalent to the supplemental
retirement benefit that would have been payable to the Participant under the
Plan if (1) the Participant, if he or she had not yet terminated employment with
the Employer prior to his or her death, had terminated such employment on the
date of his or her death and (2) the Participant had survived to the date which
would have been the Participant's normal retirement date had he or she survived
(or, if such Participant dies after his or her normal retirement date, the first
day of the first calendar month which begins on or after the date of the
Participant's death) and began receiving as of such date his or her supplemental
retirement benefit in the form of a single life annuity.
5.3.2 Notwithstanding the provisions of Section 5.3.1 above,
the Participant may, in a writing or form which is filed with the Committee at
any time prior to his or her death and in lieu of any other possible form of
payment for such pre-pension death benefit, elect that payment of such
pre-pension death benefit be made in any Annuity form which is permitted as a
benefit form for a surviving spouse's pre-pension death benefit under the Basic
Pension Plan, provided that such election shall not be effective if the lump sum
payment of such pre-pension death benefit which would otherwise be made under
Section 5.3.1 above would be $15,000 or less. If such pre-pension death benefit
is paid in an Annuity form pursuant to the Participant's election under this
Section 5.3.2, then the periodic amount of such pre-pension death benefit shall
be that amount which makes such pre-pension death benefit actuarially equivalent
to the supplemental retirement benefit that would have been payable to the
Participant under the Plan if (1) the Participant, if he or she had not yet
terminated employment with the Employer prior to his or her death, had
terminated such employment on the date of his or her death and (2) the
Participant had survived to the date which would have been the Participant's
normal retirement date had he or she survived (or, if such Participant dies
after his or her normal retirement date, the first day of the first calendar
month which begins on or after the date of the Participant's death) and began
receiving as of such date his or her supplemental retirement benefit in a single
life annuity.
5.4 FORM AND AMOUNT OF PRE-PENSION DEATH BENEFIT IF BENEFICIARY IS NOT
PARTICIPANT'S SPOUSE. If a Participant's beneficiary becomes entitled to a
pre-pension death benefit under this Article V and such beneficiary is not the
Participant's surviving spouse, then such death benefit shall be paid in the
form of a lump sum cash payment which is paid as of the first day of the first
month both which begins on or after the date of the Participant's death and
during which the Committee can administratively determine and process the
payment of the death benefit to the beneficiary. The amount of such lump sum
payment shall be the amount which makes such lump sum payment actuarially
equivalent to the supplemental retirement benefit that would have been payable
to the Participant under the Plan if (1) the Participant, if he or she had not
yet terminated employment with the Employer prior to his or her death, had
terminated such employment on the date of his or her death and (2) the
Participant had survived to the date which would have been the Participant's
normal retirement date had he or she survived (or, if such Participant dies
after his or her normal retirement date, the first day of the
V-2
first calendar month which begins on or after the date of the Participant's
death) and began receiving as of such date his or her supplemental retirement
benefit in a single life annuity.
V-3
ARTICLE VI
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ADDITIONAL BENEFIT PROVISIONS
-----------------------------
6.1 BENEFITS NOT ASSIGNABLE. Except to the extent required by
applicable law, benefits provided under the Plan may not in any manner be
anticipated, assigned (either at law or in equity), or alienated or be subject
to attachment, garnishment, levy, execution, or any other legal or equitable
process.
6.2 BENEFITS PAYABLE TO MINORS, INCOMPETENTS, AND OTHERS. In the event
any benefit is payable under the Plan to a person who, in the sole discretion of
the Committee, is a minor, an incompetent, or otherwise under a legal
disability, is, by reason of advanced age, illness, or other physical or mental
incapacity, incapable of handling and disposing of his or her property, or
otherwise is in such position or condition that the Committee believes that such
person could not utilize the benefit for his or her support or welfare, the
Committee shall have discretion to apply the whole or any part of such benefit
directly to the care, comfort, maintenance, support, education, or use of such
person or pay the whole or any part of such benefit to the parent of such
person, the guardian, committee, conservator, or other legal representative,
wherever appointed, of such person, the person with whom such person is
residing, or any other person having the care and control of such person. The
receipt of any such person to whom any such payment on behalf of any Participant
(or his or her beneficiary) is made shall be a sufficient discharge therefor.
6.3 ADMINISTRATIVE ADJUSTMENT FOR SMALL BENEFITS. Notwithstanding any
other provision of the Plan to the contrary, as an administrative convenience,
if the monthly amount of any supplemental retirement benefit or pre-pension
death benefit which is payable under the Plan in the form of an Annuity would
otherwise be less than $50, the Committee may direct that such benefit begin to
be paid in quarterly installments instead of monthly installments at any time.
6.4 TIMING OF BENEFIT DISTRIBUTIONS. For purposes of the Plan, each
benefit payment under the Plan shall always be made "as of" a certain date
specified in an appropriate section of the Plan, which means that the amount of
the payment shall be determined as of such date and the actual payment shall be
made on or as soon as practical after such date (to allow the Committee time to
ascertain the applicable person's entitlement to a benefit and the amount of
such benefit and to process and payout such benefit). If a person entitled to a
benefit hereunder dies subsequent to the date as of which such payment was to
have been made but, because of administrative reasons, prior to the actual
payment thereof, such benefit shall be paid to his or her estate. If,
notwithstanding the foregoing, a Participant (or a beneficiary of the
Participant) who is entitled to a benefit hereunder cannot reasonably be
located, then such benefit shall thereupon be deemed forfeited. If, however, the
lost Participant (or the beneficiary) thereafter makes a claim for the amount
previously forfeited hereunder, such benefit shall be paid or commence, with any
unpaid installments thereof which otherwise would have previously been
VI-1
paid also being paid (but without any interest credited on such unpaid
installments), as soon as administratively possible.
6.5 REFERENCES TO FORM OF PAYMENT. Any references to the "form" of
payment of any benefit under the Plan shall be deemed to be referring to the
combination of the method by which such benefit shall be paid (E.G., an Annuity
form or a lump sum cash payment) and the date as of which such benefit is to
commence (if the method of payment is an Annuity) or the date as of which such
benefit is to be paid (if the method of payment is a lump sum cash payment).
6.6 ACTUARIAL ASSUMPTIONS. Under the Plan, any reference to actuarial
equivalent, actuarially equivalent, or actuarial equivalence means or refers to
equality in value of the aggregate amounts of a benefit when compared to the
aggregate amounts of such benefit if paid or determined in a different form. If
the Plan requires a determination that a benefit when paid in accordance with
any certain form of benefit (for purposes of this Section 6.6, the "actual
form") would be actuarially equivalent to such benefit if it were payable in a
different form (for purposes of this Section 6.6, the "other form"), then,
except as noted below, the following steps shall be taken: (1) the present value
of the other form as of the date as of which the actual form is to commence
shall first be determined; (2) if the actual form involves a single life
annuity, the monthly amount of such single life annuity shall then be determined
so as to be actuarially equivalent to the present value amount determined under
clause (1); (3) if the actual form involves an Annuity other than a single life
annuity, the monthly amount of such Annuity shall then be determined so as to be
actuarially equivalent to the single life annuity determined under clause (2)
above; and (4) if the actual form involves a lump sum cash payment, the lump sum
amount of such payment shall be equal to the present value amount determined
under clause (1) above. The actuarial assumptions to be used in making any such
determinations shall be the same assumptions as would be used pursuant to the
provisions of Sections 9.5.3 and 9.5.4 of the Basic Pension Plan (as in effect
on the Effective Amendment Date) to make such determinations if such
determinations were being made under the Basic Pension Plan. Notwithstanding the
foregoing, when any Annuity form of benefit under the Plan commences prior to
the applicable Participant's normal retirement date and within the ten year
period ending on the date which immediately precedes such normal retirement
date, the monthly amount of such Annuity shall not be less than the periodic
amount that would apply to such Annuity if it commenced as of the Participant's
normal retirement date, reduced by 0.4% for each full month by which the date as
of which the Annuity benefit actually commences.
6.7 APPLICABLE BENEFIT PROVISIONS. Subject to Section 4.4 above, any
supplemental retirement benefit to which a Participant becomes entitled (or any
pre-pension death benefit to which the Participant's beneficiary becomes
entitled) shall be determined on the basis of the provisions of the Plan in
effect as of the date the Participant last ceases to be an Employee
notwithstanding any amendment to the Plan adopted subsequent to such date,
except for subsequent amendments which are by their specific terms or by
applicable law made applicable to such Participant (or his or her beneficiary).
VI-2
6.8 MERGER OF PRIOR PLANS AND COVERAGE OF PRE-EFFECTIVE
AMENDMENT DATE PARTICIPANTS.
6.8.1 (a) The Plan amends and restates, effective as of the
Effective Amendment Date, the Supplementary Executive Retirement Plan of
Federated Department Stores, Inc. as it was in effect on December 31, 1996 (the
"Prior Federated Supplemental Plan"). In addition, two other supplemental
executive retirement plans, the R.H. Macy & Co., Inc. Benefit Equalization Plan
(the "Prior Macy's Supplemental Plan") and the Supplemental Executive Retirement
Plan of Broadway Stores Inc. (the "Broadway Supplemental Plan"), were merged
into the Prior Federated Supplemental Plan effective as of December 31, 1996. As
a result, the Plan also amends and restates, effective as of the Effective
Amendment Date, the Prior Macy's Supplemental Plan and the Prior Broadway
Supplemental Plan.
(b) However, notwithstanding any other provision
of the Plan to the contrary, the amendment and restatement of the Prior
Federated Supplemental Plan, the Prior Macy's Supplemental Plan, and the Prior
Broadway Supplemental Plan by the Plan shall not reduce the benefits accrued
under such prior plans by any Participant as of December 31, 1996. In
determining the benefits accrued under such prior plans as of December 31, 1996
by any Participant, however, any amounts by which such prior plans offset their
otherwise determined benefits for the Participant by reason of any amounts
described in Section 4.2.3 above, by reason of the benefits of any defined
benefit pension plans which were amended and restated as of the Effective
Amendment Date by the Basic Pension Plan, and/or by reason of the benefits of
any defined benefit pension plans which were merged immediately prior to the
Effective Amendment Date into the predecessor plan which was continued by the
Basic Pension Plan shall still be determined as of the date as of which the
benefit applicable to the Participant under this Plan commences to be paid.
6.8.2 In addition, except as is otherwise provided in this
Section 6.8.2, the provisions of the Plan only apply to persons who become
Participants in the Plan under Article III above. However, any person who never
becomes a Participant in the Plan under Article III above but both was a
participant in one or more of the Prior Federated Supplemental Plan, the Prior
Macy's Supplemental Plan, and the Prior Broadway Supplemental Plan and still is
entitled to a benefit under one or more of such prior plans as of December 31,
1996 (determined as if such person had not been employed by the Employer after
such date) shall be considered a participant in the Plan to the extent of his or
her right to such benefit. The amount of such benefit, the form in which such
benefit is to be paid, and the conditions (if any) which may cause such benefit
not to be paid shall be determined under the versions of such prior plans in
effect at the time he or she ceased to be an Employee.
VI-3
ARTICLE VII
-----------
SOURCE OF BENEFITS
------------------
All benefits payable under this Plan shall be paid exclusively from the
Employer's general assets, with the costs of such benefits to be appropriately
charged to each corporation included in the Employer being determined by the
Committee. No Participant (or any beneficiary of or other person claiming
through the Participant) shall have any right or claim to the payment of any
benefit under this Plan which in any manner whatsoever is superior to or
different from the right or claim of a general and unsecured creditor of the
corporation or corporations included in the Employer to which the costs of such
benefit are charged.
VII-1
ARTICLE VIII
------------
ADMINISTRATION
--------------
8.1 COMMITTEE. The Plan shall be administered by one or more committees
which are appointed from time to time by, and which shall serve at the pleasure
of, the Board of Directors. If the Board of Directors appoints more than one
committee to administer the Plan, it shall assign to each such committee
different aspects of the administrative duties applicable to the Plan. Except
where the context otherwise requires, each such committee may be referred to in
this Article VIII as "a Committee," "any Committee," or "such Committee," but
all such committees shall be collectively referred to in the other Articles of
the Plan as "the Committee." Thus, any reference in any other Article of the
Plan to "the Committee" shall be deemed to refer to the committee appointed
under this Section 8.1 which has responsibility for the aspect of the Plan with
respect to which such provision applies.
8.2 POWERS OF COMMITTEE. Any Committee, in connection with
administering the Plan, is authorized to make such rules and regulations as it
may deem necessary to carry out the provisions of the Plan and, subject to the
scope of its powers as assigned by the Board of Directors, is given complete
discretionary authority to determine any person's eligibility for benefits under
the Plan, to construe the terms of the Plan, and to decide any other matters
pertaining to the Plan's administration. Any Committee shall, subject to the
scope of its powers as assigned by the Board of Directors, determine any
question arising in the administration, interpretation, and application of the
Plan, which determination shall be binding and conclusive on all persons. In the
administration of the Plan, any Committee may employ or permit any agents to
carry out any of its responsibilities hereunder.
8.3 ACTIONS OF COMMITTEE. Any Committee shall act by a majority of its
members at the time in office, and any such action may be taken either by a vote
at a meeting or in writing without a meeting. Any Committee may by such majority
action appoint subcommittees and may authorize any one or more of its members or
any agent of it to execute any document or documents or to take any other
action, including the exercise of discretion, on behalf of such Committee. Any
Committee may provide for the allocation of responsibilities for the operation
of the Plan.
8.4 COMPENSATION OF COMMITTEE AND PAYMENT OF ADMINISTRATIVE EXPENSES.
The members of any Committee shall serve without compensation for services as
such. All expenses of the administration of the Plan shall be paid by the
Employer, with the portion of such expenses to be appropriately charged to each
corporation included in the Employer being determined by the Committee which is
assigned this duty by the Board of Directors.
8.5 LIMITS ON LIABILITY. Federated and each other corporation included
in the Employer shall hold each member of a Committee harmless from any and all
claims, losses, damages, expenses, and liabilities arising from any act or
omission of the member.
VIII-1
8.6 CLAIMS PROCEDURE.
8.6.1 If a Participant, a Participant's beneficiary, or any
other person claiming through a Participant has a dispute as to the failure of
the Plan to pay or provide a benefit, as to the amount of Plan benefit paid, or
as to any other matter involving the Plan, the person may file a claim for the
benefit or relief believed by the person to be due. Such claim must be provided
by written notice to the Committee which is assigned by the Board of Directors
the duty to review initial claims or disputes (or its agent designated by it for
this purpose). Such Committee (or its agent) will decide any claims made
pursuant to this Section 8.6.
8.6.2 If a claim made pursuant to Section 8.6.1 above is
denied, in whole or in part, notice of the denial in writing will be furnished
by the Committee which is assigned by the Board of Directors the duty to review
initial claims or disputes (or its agent designated by it for this purpose) to
the claimant within 90 days after receipt of the claim by such Committee (or
such agent); except that if special circumstances require an extension of time
for processing the claim, the period in which such Committee (or such agent) is
to furnish the claimant written notice of the denial will be extended for up to
an additional 90 days (and such Committee or its agent will provide the claimant
within the initial 90-day period a written notice indicating the reasons for the
extension and the date by which such Committee or its agent expects to render
the final decision). The final notice of denial will be written in a manner
designed to be understood by the claimant and set forth: (1) the specific
reasons for the denial, (2) specific reference to pertinent Plan provisions on
which the denial is based, (3) a description of any additional material or
information necessary for the claimant to perfect the claim and an explanation
of why such material or information is necessary, and (4) information as to the
steps to be taken if the claimant wishes to appeal such denial of his or her
claim. If no written notice is provided the claimant within the applicable
90-day period or 180-day period, as the case may be, the claimant may assume his
or her claim has been denied and go immediately to the appeal process set forth
in Section 8.6.3 below.
8.6.3 Any claimant who has a claim denied under Sections
8.6.1 and 8.6.2 above may appeal the denied claim to the Committee which is
assigned by the Board of Directors the duty to review appeals of denied claims
(or its agent designated by it for this purpose). Such an appeal must, in order
to be considered, be filed by written notice to such Committee (or such agent)
within 60 days of the receipt by the claimant of a written notice of the denial
of his or her initial claim (unless it was not reasonably possible for the
claimant to make such appeal within such 60-day period, in which case the
claimant must file his or her appeal within 60 days after the time it becomes
reasonable for him or her so to file an appeal). If any appeal is filed in
accordance with such rules, the claimant, and any duly authorized representative
of the claimant, will be given the opportunity to review pertinent documents and
submit issues and comments in writing. A formal hearing may be allowed in its
discretion by such Committee (or its agent designated by it for this purpose)
but is not required.
VIII-2
8.6.4 Upon any appeal of a denied claim made pursuant to
Section 8.6.3 above, the Committee which is assigned by the Board of Directors
the duty to review appeals of denied claims (or its agent designated by it for
this purpose) will provide a full and fair review of the subject claim and
decide the appeal within 60 days after the filing of the appeal; except that if
special circumstances require an extension of time for processing the appeal,
the period in which the appeal is to be decided will be extended for up to an
additional 60 days (and the party deciding the appeal will provide the claimant
written notice of the extension prior to the end of the initial 60-day period).
The decision on appeal will be set forth in a writing designed to be understood
by the claimant, specify the reasons for the decision and references to
pertinent Plan provisions on which the decision is based, and be furnished to
the claimant by such Committee (or its agent) within the 60-day period or
120-day period, as is applicable, described above.
8.6.5 Any Committee referred to in the foregoing provisions
of this Section 8.6 may prescribe additional rules which are consistent with the
other provisions of this Section 8.6, and the scope of the duties assigned to it
by the Board of Directors, in order to carry out the Plan's claims procedures.
VIII-3
ARTICLE IX
----------
TERMINATION OR AMENDMENT
------------------------
9.1 RIGHT AND PROCEDURE TO TERMINATE.
9.1.1 Federated reserves the right to terminate the Plan in
its entirety. The procedure for Federated to terminate this Plan in its entirety
is as follows. In order to completely terminate the Plan, the Board of Directors
shall adopt resolutions, pursuant and subject to the regulations or by-laws of
Federated and any applicable law, and either at a duly called meeting of the
Board of Directors or by a written consent in lieu of a meeting, to terminate
this Plan. Such resolutions shall set forth therein the effective date of the
Plan's termination.
9.1.2 In the event the Board of Directors adopts resolutions
completely terminating the Plan, no further benefits shall be paid after the
effective date of the Plan's termination, except for the benefits accrued by
Participants under the Plan as of the later of the effective date of the Plan's
termination or the date such resolutions terminating the Plan are adopted (and
such benefits will be paid in accordance with the provisions of the Plan as in
effect immediately prior to the later of such dates). In determining the benefit
accrued under the Plan as of the later of such dates by any Participant,
however, any amount by which the Plan offsets its otherwise determined benefit
for the Participant by reason of any amounts described in Section 4.2.3 above
shall still be determined as of the date as of which the benefit applicable to
the Participant under the Plan commences to be paid.
9.2 AMENDMENT OF PLAN. Subject to the other provisions of this Section
9.2, Federated may amend this Plan at any time and from time to time in any
respect, provided that no such amendment shall decrease the benefits accrued
under the Plan by Participants as of the later of the effective date of such
amendment or the date such amendment is adopted. In determining the benefit
accrued under the Plan as of the later of such dates by any Participant,
however, any amount by which the Plan offsets its otherwise determined benefit
for the Participant by reason of any amounts described in Section 4.2.3 above
shall still be determined as of the date as of which the benefit applicable to
the Participant under the Plan commences to be paid. The procedure for Federated
to amend this Plan is as follows:
9.2.1 Subject to Section 9.2.2 below, in order to amend the
Plan, the Board of Directors shall adopt resolutions, pursuant and subject to
the regulations or by-laws of Federated and any applicable law, and either at a
duly called meeting of the Board of Directors or by a written consent in lieu of
a meeting, to amend this Plan. Such resolutions shall either (1) set forth the
express terms of the Plan amendment or (2) simply set forth the nature of the
amendment and direct an officer of Federated or any other Federated employee to
have prepared and to sign on behalf of Federated the formal amendment to the
Plan. In the latter case, such officer or employee shall have prepared and shall
sign on behalf of Federated an amendment to the Plan which is in accordance with
such resolutions.
IX-1
9.2.2 In addition to the procedure for amending the Plan set
forth in Section 9.2.1 above, the Board of Directors may also adopt resolutions,
pursuant and subject to the regulations or by-laws of Federated and any
applicable law, and either at a duly called meeting of the Board of Directors or
by a written consent in lieu of a meeting, to delegate to any officer of
Federated the authority to amend the Plan. Such resolutions may either grant the
officer broad authority to amend the Plan in any manner the officer deems
necessary or advisable or may limit the scope of amendments he or she may adopt,
such as by limiting such amendments to matters related to the administration of
the Plan. In the event of any such delegation to amend the Plan, the officer to
whom authority is delegated shall amend the Plan by having prepared and signing
on behalf of Federated an amendment to the Plan which is within the scope of
amendments which he or she has authority to adopt. Also, any such delegation to
amend the Plan may be terminated at any time by later resolutions adopted by the
Board of Directors. Finally, in the event of any such delegation to amend the
Plan, and even while such delegation remains in effect, the Board of Directors
shall continue to retain its own right to amend the Plan pursuant to the
procedure set forth in Section 9.2.1 above.
IX-2
ARTICLE X
---------
MISCELLANEOUS
-------------
10.1 PLAN NOT A CONTRACT OF EMPLOYMENT. The Plan is not a
contract of employment, and the terms of employment of any Participant shall not
be affected in any way by the Plan except as specifically provided in the Plan.
The establishment of the Plan shall not be construed as conferring any legal
rights upon any Participant for a continuation of employment, nor shall it
interfere with the right of the Employer to discharge any Employee and to treat
him or her without regard to the effect which such treatment might have upon him
or her as a Participant in this Plan. Each Participant (and any beneficiary of
or other person claiming through the Participant) who may have or claim or right
under the Plan shall be bound by the terms of the Plan.
10.2 CONSTRUCTION.
10.2.1 The Plan is intended to be a plan which is unfunded
and maintained primarily for the purpose of providing deferred compensation for
a select group of management or highly compensated employees (within the meaning
of Sections 201, 301, and 401 of ERISA), and its terms shall be interpreted
accordingly.
10.2.2 Further, the provisions of the Plan shall be
administered and enforced according to applicable Federal law and, only to the
extent not preempted by ERISA, the laws of the State of Ohio.
10.2.3 If any provision of the Plan, or the application of
any such provision to any person or circumstances, shall be invalid under any
applicable law, neither the application of such provision to persons or
circumstances other than those as to which such provision is invalid nor any
other provisions of the Plan shall be affected thereby.
10.2.4 The headings and subheadings in the Plan have been
inserted for convenience of reference only and are to be ignored in any
construction of the provisions hereof.
10.2.5 In the construction of the Plan, the singular shall
include the plural, and the plural shall include the singular, in all cases
where such meanings would be appropriate.
X-1
IN WITNESS WHEREOF, the sponsor of the Plan hereby signs this amendment
and restatement of the Plan this 12th day of December, 1996, effective for
all purposes as of January 1, 1997.
FEDERATED DEPARTMENT STORES, INC.
By /s/ John R. Sims
--------------------------------
Title Vice President
------------------------------
Signature Page-1