-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, WiE52oH+qRAKaICFBBA1YG6Vg9ZKBQ626nxURbtW3rd/POxW6Hg6UcmqRPqUuNe/ Albl/CmAF+LzeUw1PXI/uA== 0000031364-96-000004.txt : 19960627 0000031364-96-000004.hdr.sgml : 19960627 ACCESSION NUMBER: 0000031364-96-000004 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 19960504 FILED AS OF DATE: 19960618 DATE AS OF CHANGE: 19960626 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: ECKERD CORP CENTRAL INDEX KEY: 0000031364 STANDARD INDUSTRIAL CLASSIFICATION: 5912 IRS NUMBER: 133302437 STATE OF INCORPORATION: DE FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-04844 FILM NUMBER: 96583503 BUSINESS ADDRESS: STREET 1: 8333 BRYAN DAIRY ROAD CITY: LARGOO STATE: FL ZIP: 34647 BUSINESS PHONE: 8133996000 MAIL ADDRESS: STREET 1: JACK ECKERD CORPORATION STREET 2: P O BOX 4689 CITY: CLEARWATER STATE: FL ZIP: 34618 FORMER COMPANY: FORMER CONFORMED NAME: ECKERD DRUGS OF FLORIDA INC DATE OF NAME CHANGE: 19700112 10-Q 1 10-Q 1ST QUARTER ENDED MAY 4, 1996 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For Thirteen Weeks Ended May 4, 1996 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to --------------- --------------- Commission File No. 1-4844 ECKERD CORPORATION (Exact name of registrant as specified in charter) DELAWARE 13-3302437 (State of incorporation) (I.R.S. Employer Identification No.) 8333 Bryan Dairy Road Largo, Florida 34647 (Address and zip code of principal executive offices) (813) 399-6000 (Registrant's telephone number, including area code) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No --- --- As of June 1, 1996, 70,071,072 shares of Common Stock, $.01 par value, were outstanding. 1
PART I. FINANCIAL INFORMATION Item 1. Financial Statements ECKERD CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (IN THOUSANDS EXCEPT SHARE DATA) Unaudited Audited ASSETS 5/4/96 2/3/96 ----------- ---------- Current assets: Cash $ 8,706 7,922 Receivables, less allowance for doubtful receivables of $3,000 88,775 70,137 Merchandise inventories 857,185 835,551 Prepaid expenses and other current assets 3,842 4,396 ----------- ---------- Total current assets 958,508 918,006 ----------- ---------- Property, plant and equipment, at cost 660,071 634,023 Less accumulated depreciation 296,270 282,974 ----------- ---------- Net property, plant and equipment 363,801 351,049 ----------- ---------- Excess of cost over net assets acquired, less accumulated amortization 61,513 62,162 Favorable lease interests, less accumulated amortization 130,723 131,961 Unamortized debt expense 5,883 6,086 Other assets 32,112 31,055 ----------- ---------- $1,552,540 1,500,319 =========== ========== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Bank debit balances $ 32,908 59,620 Current installments of long-term debt 874 1,020 Accounts payable 301,523 311,411 Accrued expenses 248,181 234,957 ----------- ---------- Total current liabilities 583,486 607,008 ----------- ---------- Other noncurrent liabilities 136,718 136,772 Long-term debt, excluding current installments 737,472 701,798 Stockholders' equity: Preferred stock of $.01 par value. Authorized 20,000,000 shares; none issued - - Voting common stock of $.01 par value. Authorized 96,481,272 shares; issued 70,062,202 and 69,937,790 700 700 Nonvoting common stock of $.01 par value. Authorized 3,518,728 shares; none issued - - Capital in excess of par value 318,367 317,654 Retained deficit (224,203) (263,613) ----------- ----------- Total stockholders' equity 94,864 54,741 ----------- ----------- $1,552,540 1,500,319 =========== =========== See accompanying notes to condensed consolidated financial statements.
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ECKERD CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (IN THOUSANDS EXCEPT PER SHARE DATA) Thirteen Weeks Ended --------------------------- 5/4/96 4/29/95 ---------- ----------- Sales and other operating revenue $1,354,619 1,219,594 ---------- ----------- Costs and expenses: Cost of sales, including store occupancy, warehousing and delivery expense 1,051,423 939,488 Operating and administrative expenses 237,533 220,591 ---------- ----------- Earnings before interest expense and income taxes 65,663 59,515 Interest expense: Interest expense, net 14,886 19,817 Amortization of original issue discount and deferred debt expenses 253 539 ---------- ----------- Total interest expense 15,139 20,356 ---------- ----------- Earnings before income taxes 50,524 39,159 Income tax expense 11,114 8,615 ---------- ----------- Net earnings for the period $ 39,410 30,544 ========== =========== Net earnings per common share $ .55 .47 ========== =========== See accompanying notes to condensed consolidated financial statements.
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ECKERD CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (IN THOUSANDS) Thirteen Weeks Ended ------------------------------- 5/4/96 4/29/95 Cash flows from operating activities: ------------- ------------- Net earnings for the period $ 39,410 30,544 Adjustments to reconcile net earnings for the period to net cash provided by operating activities: Depreciation and amortization 22,362 19,537 Amortization of original issue discount and deferred debt expenses 253 539 Increase in receivables, merchandise inventories and prepaid expenses (39,718) (4,858) Decrease in accounts payable and accrued expenses (2,052) (16,568) ------------- ------------- Net cash provided by operating activities 20,255 29,194 ------------- ------------- Cash flows from investing activities: Additions to property, plant and equipment (25,804) (15,694) Sale of property, plant and equipment 242 395 Acquisition of certain drug store assets (860) (1,424) Other (2,529) 1,754 ------------- ------------- Net cash used in investing activities (28,951) (14,969) ------------- ------------- Cash flows from financing activities: Decrease in bank debit balances (26,712) (34,706) Additions to long-term debt - 312 Reductions of long-term debt (472) (489) Net additions under current credit agreement 36,000 21,453 Other 664 292 ------------- ------------- Net cash provided by (used in) financing activities 9,480 (13,138) ------------- ------------- Net increase in cash 784 1,087 Cash at beginning of period 7,922 8,898 ------------- ------------- Cash at end of period $ 8,706 9,985 ============= ============= See accompanying notes to condensed consolidated financial statements.
4 ECKERD CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (IN THOUSANDS) Note 1. ------- The condensed consolidated financial statements include the accounts of the Company and its subsidiaries, and were prepared from the books and records of the Company without audit or verification and in the opinion of management include all adjustments (none of which were other than recurring accruals) necessary to present a fair statement of results for such periods. It is suggested that these condensed consolidated financial statements should be read in conjunction with the financial statements and notes filed as part of the Form 10-K report for the fiscal year ended February 3, 1996. The results of operations of the periods indicated should not be considered as necessarily indicative of operations for the full year. Certain amounts have been reclassified in the February 3, 1996 condensed consolidated balance sheet to conform to the May 4, 1996 presentation. Note 2. ------- Substantially all inventories are determined on a last-in, first-out (LIFO) cost basis. At May 4, 1996 and February 3, 1996 inventories would have been greater by approximately $96,100 and $91,900, respectively, if inventories were valued on a first-in, first-out (FIFO) cost basis. Since LIFO inventory costs can only be determined at the end of each fiscal year when inflation rates and inventory levels are finalized, estimates of LIFO inventory costs are used for interim financial statements. The cost of merchandise sold is calculated on an estimated basis and adjusted based on inventories taken during the fiscal year. Note 3. ------- The weighted average number of shares outstanding for thirteen weeks ended May 4, 1996 and April 29, 1995 were 71,887 in 1996 and 65,626 in 1995. Note 4. ------- All share information in these condensed consolidated financial statements reflect the two-for-one stock split effected in the form of a stock dividend which was payable to stockholders of record April 22, 1996 and paid on May 13, 1996. Note 5. ------- Effective February 4, 1996, the Company adopted Statement of Financial Accounting Standard No. 123, "Accounting for Stock Based Compensation" (SFAS No. 123). This standard allows the Company to select either a fair value based method or the current intrinsic value based method of accounting for employee stock-based compensation. The Company retained the intrinsic value method of accounting and, therefore, the adoption of this standard did not have a material effect on the Company's financial statements. The disclosure only provisions, as permitted by SFAS No. 123, will be disclosed annually in the Company's audited consolidated financial statements. 5 Item 2. Management's Discussion and Analysis of Results of Operations and Financial Condition. ECKERD CORPORATION AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION Results of Operations The Company's sales and other operating revenue for the first quarter of fiscal 1996 was $1.4 billion, an 11.1% increase over the first quarter of fiscal 1995. Sales benefited from significant increases in prescription sales as well as from increases in front end sales and from the acquisition of certain Florida drug stores from Rite Aid (the "Florida Rite Aid Acquisition") at the beginning of the third quarter of fiscal 1995. Prescription sales were $751.6 million, a 16.0% increase over the first quarter of fiscal 1995. In addition, front end sales increased to $601.2 million, a 5.6% increase over the first quarter of fiscal 1995. Comparable drug store sales (stores open for one year or more, excluding 0.7% from the impact of relocated stores open less than one year) increased 8.9%, compared to an 8.6% increase in the first quarter of fiscal 1995. The increase in comparable drug store sales was primarily attributable to the increase in sales of prescription drugs. Comparable drug store sales growth was also positively affected by increased sales of non-prescription items in the health/wellcare, cosmetics and convenience categories. Prescription sales as a percentage of drug store sales were approximately 55.6% as compared with approximately 53.1% for the first quarter of fiscal 1995. The growth in prescription sales was primarily the result of increased managed care prescription sales, the Company's competitive cash pricing strategy and the Florida Rite Aid Acquisition. These strong sales were in spite of a more severe cough, cold and flu season in the first quarter of fiscal 1995 compared to the first quarter of fiscal 1996. Managed care prescription sales increased to approximately 73.9% of the Company's prescription sales for the first quarter of fiscal 1996 from approximately 68.9% in fiscal 1995. The Company expects prescription sales to managed care payors, in terms of both dollar volume and as a percentage of total prescription sales, to continue to increase in fiscal 1996 and for the foreseeable future. Managed care payors typically negotiate lower prescription prices than those on non-managed care prescriptions, resulting in decreasing gross profit margins on the Company's prescription sales. However, contracts with managed care payors generally increase the volume of prescription sales and gross profit dollars. 6 As a percentage of sales, cost of sales and related expenses were 77.6% compared to 77.0% for the first quarter of fiscal 1995. The increase in cost of sales and related expenses as a percentage of sales resulted primarily from the continued increase in managed care prescription sales which generally have lower gross profit margins than non-managed care prescription sales. The LIFO charge was $4.2 million compared to $2.9 million for the first quarter of fiscal 1995. Operating and administrative expenses were $237.5 million, a 7.7% increase over the first quarter of fiscal 1995. As a percentage of sales, operating and administrative expenses decreased to 17.5% from 18.1% for the first quarter of fiscal 1995. The decrease in operating and administrative expenses as a percentage of sales resulted primarily from operating efficiencies related to higher sales and cost controls which helped produce lower costs as a percentage of sales in such expense categories as payroll and insurance. Earnings before interest expense and income taxes was $65.7 million, a 10.3% increase over the first quarter of fiscal 1995. The increase in earnings before interest expense and income taxes was due primarily to the increase in gross profit dollars as a result of higher sales and other operating revenue, and the decrease in operating and administrative expenses as a percentage of sales due to improved productivity and expense control compared to the first quarter of fiscal 1995. Total interest expense was $15.1 million, a decrease of 25.6% from the first quarter of fiscal 1995. The decrease in interest expense was due to lower average borrowings, lower bank loan interest spreads and the early retirement of high interest cost subordinated debentures in the second and third quarters of fiscal 1995. Income tax expense for the first quarter of fiscal 1996 and 1995 was $11.1 million and $8.6 million, respectively, an effective income tax rate of 22%. Income tax expense in the first quarters of both fiscal 1996 and 1995 represents alternative minimum tax and state income taxes for the Company, and reflects the utilization of net operating loss carryforwards. As a result of the foregoing factors, the Company had net earnings of $39.4 million, compared to $30.5 million for the first quarter of fiscal 1995, an increase of $8.9 million or 29.0%. At May 4, 1996 the Company operated 1,715 Eckerd Drug stores and 517 Eckerd Express Photo labs. 7 Financial Condition and Liquidity At May 4, 1996, the Company had $496.0 million in borrowings outstanding under its bank credit agreement ($220.0 million under the term loan facility and $276.0 million under the revolving loan facility) and $125.1 million available for borrowing under the revolving loan facility portion of the bank credit agreement which is net of $98.9 million of letters of credit. The term loan facility of $220.0 million amortizes in quarterly payments of $10.0 million at the end of each of the first three quarters and $20.0 million at the end of the fourth quarter of each fiscal year for a total amortization of $50.0 million annually, and matures in full in November 2000. The revolving loan facility of $500.0 million matures in full in November 2000. At May 4, 1996 the Company had excess availability under the revolving loan commitment and accordingly did not treat the required amortization repayments as current. On May 4, 1996 the Company had working capital of $375.0 million and a current ratio of 1.6 to 1 compared to $311.0 million and 1.5 to 1 at February 3, 1996. Cash flow provided by operating activities decreased $8.9 million to $20.3 million compared to $29.2 million for the first quarter of fiscal 1995. The decrease was due to a $20.3 million higher use of operating cash for working capital items, including receivables, merchandise inventory, accounts payable and accrued expenses, which was partially offset by higher earnings of $8.9 million and $2.5 million more depreciation and amortization (including amortization of original issue discount and deferred debt expenses). Net cash from investing activities for the first quarter of fiscal 1996, and 1995 used $29.0 million and $15.0 million, respectively. Uses of cash were principally for capital expenditures of $25.8 million and $15.7 million for fiscal 1996 and 1995, respectively, for additions to the Company's drug stores and Express Photo units and improvements to existing stores and for the installation of point-of-sale product scanning equipment. Capital improvements for fiscal 1996, are estimated at approximately $130.0 million on an annual basis. Funds for the planned cash capital expenditures are expected to come from cash flow from operating activities and available borrowings, if necessary. Financing activities for the first quarter of fiscal 1996 provided $9.5 million. Funds were provided by $36.0 million of bank borrowings which were primarily offset by the reduction of $26.7 million of bank debit balances. Financing activities for the first quarter of fiscal 1995 used $13.1 million primarily for the reduction of $34.7 million of bank 8 debit balances, of which funds were partially provided for by $21.5 million of bank borrowings. Based upon the Company's ability to generate cash flow from operating activities, the available unused portion of the revolving loan facility under the bank credit agreement and other existing sources, the Company believes that it will have the funds necessary to meet the principal and interest payments on its debt as they become due and to operate and expand its business. REVIEW BY INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS The Company's independent public accountants have made a limited review of the financial information furnished herein in accordance with standards established by the American Institute of Certified Public Accountants. The Accountants' Report is presented on page 10 of this report. 9 Accountants' Report The Board of Directors Eckerd Corporation: We have reviewed the condensed consolidated balance sheet of Eckerd Corporation and subsidiaries as of May 4, 1996, and the related condensed consolidated statements of operations and cash flows for the thirteen weeks ended May 4, 1996 and April 29, 1995. These condensed consolidated financial statements are the responsibility of the Company's management. We conducted our review in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical procedures to financial data, and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. Based on our review, we are not aware of any material modifications that should be made to the accompanying condensed consolidated financial statements for them to be in conformity with generally accepted accounting principles. We have previously audited, in accordance with generally accepted auditing standards, the consolidated balance sheet as of February 3, 1996, and the related consolidated statements of operations, stockholders' equity, and cash flows, for the year then ended (not presented herein); and in our report dated March 26, 1996, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of February 3, 1996 is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived. KPMG PEAT MARWICK LLP June 14, 1996 10 PART II. OTHER INFORMATION Item 4. Submission of Matters to a Vote of Security Holders The Company's Annual Meeting of Stockholders was held on May 23, 1996. As of that date proxies covering 55,948,500 shares of 69,966,834 shares outstanding were present and entitled to vote. The following Class III directors were elected to the Company's Board of Directors for a term of three years until the Annual Meeting in 1999. Withheld Nominee In Favor Authority Albert J. Fitzgibbons, III 55,573,236 375,264 Lewis W. Lehr 55,563,050 385,450 Stewart Turley 55,024,488 924,012 John W. Boyle, Dr. James T. Doluisio and Rupinder S. Sidhu are Class I directors and their terms expire on the date of the Annual Meeting in 1997. Donald F. Dunn, Margaret H. Jordan and Francis A. Newman are Class II directors and their terms expire on the date of the Annual Meeting in 1998. Alexis P. Michas, who was a Class II director, resigned from the Company's Board of Directors, immediately after the Company's Annual Meeting on May 23, 1996. The results of the voting by stockholders (proxies covering 55,938,900 shares) on the adoption of a resolution ratifying the appointment of KPMG Peat Marwick LLP, by the Board of Directors as independent auditors of the Company for the Company's 1996 fiscal year was as follows: In Favor Opposed Abstained 55,841,178 22,692 75,030 11 Item 6. Exhibits and Reports on Form 8-K (a) Exhibits 10.1 The First Executive Supplemental Benefit Plan of Eckerd Corporation and Its Subsidiaries 10.2 The Second Executive Supplemental Benefit Plan of Eckerd Corporation and Its Subsidiaries 15.1 Letter re unaudited interim financial information 27 Financial Data Schedule (b) Reports on Form 8-K The Company did not file any reports on Form 8-K during the thirteen weeks ended May 4, 1996. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. ECKERD CORPORATION (Registrant) June 18, 1996 /s/ Samuel G. Wright ---------------------- Samuel G. Wright Executive Vice President/ Chief Financial Officer (Principal Accounting Officer) 12 Exhibit Index Eckerd Corporation Form 10-Q Exhibit No. Description of Exhibit Page 10.1 The First Executive Supplemental Benefit Plan of Eckerd Corporation and Its Subsidiaries 10.2 The Second Executive Supplemental Benefit Plan of Eckerd Corporation and Its Subsidiaries 15.1 Letter re unaudited interim financial information 27 Financial Data Schedule 13 EX-10.1 2 FIRST EXECUTIVE SUPPLEMENTAL BENEFIT PLAN Exhibit 10.1 THE FIRST EXECUTIVE SUPPLEMENTAL BENEFIT PLAN OF ECKERD CORPORATION AND ITS SUBSIDIARIES (As Amended and Restated as of February 3, 1996) ECKERD CORPORATION, a Delaware corporation, desiring to provide an income for its executives after their retirement as well as pre-retirement death benefits to beneficiaries of such executives hereby establishes this FIRST EXECUTIVE SUPPLEMENTAL BENEFIT PLAN. It is intended that this Plan shall be for the benefit of only those executive employees of the Company who are selected by the Board of Directors of the Company on or before February 3, 1996. 1. Definitions Applicable to the Plan. The words and phrases defined below have the meanings herein set out: a. "Accrued Benefit" shall mean an annual annuity commencing at age 65 and continuing for fifteen (15) years certain in an annual amount equal to the product of i. multiplied by ii.: i. Twenty-five percent (25%) of the Participant's Covered Salary. ii. A fraction, the numerator of which is the number of years of service with the Company and the denominator of which is the number of years from Participant's age on the date he commenced service with the Company to the Participant's Normal Retirement Date; PROVIDED, HOWEVER, if the sum of the Participant's age upon termination of employment with the Company and the Participant's years of service with the Company is equal to or greater than 70 years, then the Accrued Benefit shall be i. above; PROVIDED FURTHER, HOWEVER, the Board of Directors, in its sole discretion, shall have the right to waive the requirements of this Subparagraph ii. and to provide an accrued benefit equal to i. above to any participant. For the purposes of this definition, all service and age determinations shall be computed utilizing all full calendar years and completed calendar months, and all years and months of service as an employee shall be counted. Notwithstanding the above, a Participant must have five (5) years of service with the Company to have an accrued benefit. The Board, in its sole discretion, shall have the right to waive the years of service requirement hereunder as to any Participant. In addition, the Board, in its sole discretion, shall have the right to include service with a business operation acquired by the Company in the determination of years of service of a Participant with the Company. b. "Actuarial Equivalent" shall mean an equivalent in value, taking into account an annual effective interest rate of six percent (6%) per year compounded annually, and without taking into account any discount based on mortality tables. c. "Beneficiary" shall mean the person or persons (including a trust created by a person or the estate of a person) designated by the Participant entitled to receive any benefits under this Plan upon the death of a Participant or, in the event no such person or persons are designated or survive the Participant, then the estate of the Participant. d. "Board" or "Board of Directors" shall mean the Board of Directors of Eckerd Corporation or the Executive Compensation and Stock Option Committee of the Board of Directors of the Eckerd Corporation or the Executive Committee of the Board of Directors. e. "Committee" shall mean the Administrative Committee appointed to manage and administer the Plan in accordance with the provisions of Section 12 of this Plan. f. "Company" shall mean Eckerd Corporation and its subsidiaries. g. "Covered Salary" shall mean, unless otherwise agreed between the Participant and the Company in the Plan Agreement, the midpoint (on an annualized basis) established by the Company for the Participant's Salary Grade (as defined by the personnel practices of the Company) as of the date the Participant and the Company execute the Plan Agreement and, as such midpoint may be modified, from time to time, during the Participant's employment with the Company. h. "Death Benefit" shall mean an annual benefit equal to ninety percent (90%) of the Participant's Covered Salary for the first year after death and forty-five percent (45%) of the Participant's Covered Salary for the next nine (9) years. The annual benefit shall be payable to the Beneficiary in equal annual installments. In the alternative, a Participant may elect to have a Death Benefit in an amount equal to four (4) times the Participant's Covered Salary payable to the Beneficiary in a lump sum. i. "Early Retirement Date" shall be the first day of the month following the month in which a Participant who has attained the age of 55 retires with the consent of the Committee prior to his or her Normal Retirement Date. Notwithstanding the above, the Board, in its sole discretion, shall have the right to waive the age requirement for early Retirement. j. "Employee" shall mean any person regularly employed full time by the Company in any capacity (including officers and directors who regularly render services to the Company as regular full time employees). Employees shall not include part-time employees, consultants or independent contractors of the Company. k. "Late Retirement Date" shall be the first day of the month following the month in which a Participant retires who, with the consent of the Committee (if such consent is permissible under existing law), had remained in the employment of the Company after his or her Normal Retirement Date. l. "Normal Retirement date" shall be the first day of the month following the month in which the Participant attains his or her 65th birthday. m. "Participant" shall mean an Employee who is eligible to participate herein in accordance with Section 2 hereof and who has executed a Plan Agreement in the form attached hereto as Exhibit A. n. "Plan" shall mean The First Executive Supplemental Benefit Plan of Eckerd Corporation and its subsidiaries, which shall be evidenced by this instrument as amended from time to time and by each Plan Agreement. o. "Plan Agreement" shall mean the form of written agreement, attached hereto as Exhibit A, which is entered into from time to time by and between the Company and a Participant. Each Plan Agreement executed by a Participant shall provide for the entire benefit to which such Participant is entitled under the Plan, and the Plan Agreement bearing the latest date shall govern such entitlement. p. "Retirement" and "Retire" shall mean severance from employment with the Company on or after the Normal Retirement Date or with the consent of the Committee after the attainment of his or her Early Retirement Date. 2. Eligibility to Participate in the Plan. a. Those executive employees selected from time to time by the Board of Directors on or before February 3, 1996 upon the recommendation of the Committee shall be eligible to become Participants in accordance with the purposes of the Plan. As a condition of participation, each Participant so selected shall complete, execute and return to the Committee a Plan Agreement in the form attached hereto as Exhibit A and comply with such further conditions as may be established (prior to the Employee's commencement of participation) by and in the sole discretion of the Committee. b. In the event that subsequent to commencement of participation in the Plan, a Participant fails to maintain a position of employment in the Company which, in the sole discretion of the Board, qualifies for participation in the Plan, then such Participant shall cease to accrue further benefits under the Plan. Such Participant, however, shall be entitled to receive his/her Accrued Benefit at the time and in the manner provided by this Plan. If at any future time the former Participant becomes, in the sole discretion of the Board, eligible to participate in the Plan, then such Participant's Accrued Benefit shall be calculated as if the Participant had continuously been a Participant from his/her original date of participation. 3. Benefit Upon Retirement. Upon Retirement, a Participant shall be entitled to receive the following benefit: a. Normal Retirement. A Participant who Retires on his or her Normal Retirement Date shall receive an annual benefit equal to the Participant's Accrued Benefit payable in equal monthly installments for a period of fifteen (15) years commencing in the month following the month in which Participant Retires. b. Early Retirement. A Participant who, with the consent of the Committee, Retires at any time after his or her Early Retirement Date and before his or her Normal Retirement Date shall receive an annual benefit equal to the Actuarial Equivalent, as determined by the Committee, of the Participant's Accrued Benefit payable in equal monthly installments for a period of fifteen (15) years, commencing on such date as may be agreed upon by the Participant and the Committee or, in the absence of such agreement, in the month following the month in which the Participant Retires; provided, however, the Participant may elect to have the annual benefit paid up to the month in which the Participant becomes eighty-one (81) years old in equal monthly installments adjusted to represent the Actuarial Equivalent of the Participant's Accrued Benefit on the basis of the number of monthly payments. c. Late Retirement. A Participant who Retires on a Late Retirement Date at any time after his or her Normal Retirement Date shall receive an annual benefit equal to the Actuarial Equivalent, as determined by the Committee, of the Participant's Accrued Benefit payable in equal monthly installments for a period of fifteen (15) years commencing in the month following the month in which the Participant Retires. d. Death After Retirement. if a Participant dies after retiring but before receiving the number of monthly payments provided for in the Plan, the Beneficiary shall receive the remaining payments to which the Participant would have been entitled if the Participant had lived. 4. Death, Disability and Termination of Employment. a. Benefits in the Case of Death of a Participant While Employed. If a Participant dies while employed by the Company, in lieu of any other benefit payable hereunder, a Death Benefit shall be payable to the Beneficiary. Provided, however, the Company shall not be obligated to pay a Death Benefit if: i. the Participant's death was the result of a suicide within two (2) years after the date of the Plan Agreement, ii. the Participant's death was from a bodily or mental cause or causes, the information about which was withheld or knowingly concealed or falsely provided by the Participant when requested by the Company to furnish evidence of good health upon the Participant's becoming enrolled in this Plan or upon the Participant's being granted additional benefits as a result of an increase in Participant's covered salary. b. Benefits in the Case of Disability. i. If, in the sole opinion of the Committee, a Participant is, because of physical or mental disability, incapable of performing the duties of his regular position of employment with the Company, then the Participant shall continue to accrue years-of-service credits (as if the Participant were employed by the Company) until age 65 or commencement of benefits, if earlier. Except as provided in Paragraph 14, if the Participant ceases to be so disabled (in the sole opinion of the Committee) and returns to work at the Company in the position of employment he formerly held with the Company or in another position which, in the sole discretion of the Board, qualifies for participation in the Plan, the Participant shall again participate on the same basis as other Participants. if the Participant ceases to be so disabled and does not return to work at the Company in his former position of employment or in another position which, in the sole discretion of the board, qualified for participation in the Plan, the Participant shall be considered to have returned to work and immediately terminated employment on the date that such disability ceases. ii. In the event that a participant referred to in Paragraph i. above does not qualify for or ceases to receive disability payments under the long-term disability insurance program sponsored by the Company and, in the opinion of the Committee, such Participant is or continues to be so physically or mentally disabled so as not to be capable of performing the duties of his regular position of employment with the Company, then the Committee may, in its sole discretion, authorize payment of an annual benefit equal to the Actuarial Equivalent of the Participant's Accrued Benefit. Such benefit shall be payable in equal monthly installments over a period of fifteen (15) years commencing on the first day of the month following determination of disability by the Committee or the termination of the Company sponsored long-term disability payments to the Participant, whichever last occurs. Except as hereinafter provided, such payment shall be in lieu of any other payment provided pursuant to the Plan. If the Participant ceases to be disabled and returns to work at the Company in the position of employment he formerly held with the Company or in another position which, in the sole discretion of the Board, qualifies for participation in the Plan, the participant shall again participate on the same basis as other participants except that: aa. the Participant shall not accrue years-of-service credits during the period the Participant received payments hereunder, and bb. the payments made to such Participant pursuant to the Plan during his/her disability shall be deducted from any award hereunder to which the Participant or his/her Beneficiary may become entitled. If the Participant ceases to be disabled and does not return to work at the Company, the Participant shall be considered to have terminated employment with the Company as of the date benefits became payable hereunder, and any payments made to such Participant pursuant to the Plan during his/her disability shall be deducted from any award to which the Participant or his/her Beneficiary may become entitled. iii. If a participant referred to in i. above dies before commencement of benefits hereunder, in lieu of any other benefit payable hereunder, the Death Benefit in subsection a. above shall be payable as if the Participant had been employed. c. Termination of Employment. i. Upon termination of employment (other than by death, disability or Retirement), a Participant shall be entitled to receive an annual benefit equal to his Accrued Benefit payable in equal monthly installments for a period of fifteen (15) years commencing on his Normal Retirement Date; provided, however, with the consent of the Committee, such Participant may receive benefits commencing on his or her Early Retirement Date on the same basis as any other Participant retiring early. ii. If a Participant terminates employment with the Company (other than by death, disability or Retirement) and dies before commencement of benefits, in lieu of any other benefits payable hereunder, the Participant's Beneficiary shall be entitled to receive an amount equal to the Actuarial Equivalent of the Participant's Accrued Benefit payable in a lump sum. Such lump sum payment shall supersede any prior election for periodic payments made pursuant to the Plan. 5. Obligation to Pay Benefits Hereunder. Except as required by the Jack Eckerd Corporation Benefit Plans Trust (the "Trust"), the Company shall have no obligation to fund a trust fund, escrow account or otherwise to segregate assets to guarantee, secure or assure the payment of any benefit under the Plan, but the Company may (and to the extent required by the Trust, shall) fund a nonqualified grantor trust to provide for the payment of benefits under the Plan. The establishment or funding of any such nonqualified grantor trust shall not relieve the Company of any of its obligations pursuant to the Plan, except that amounts paid to the Participants or other payees hereunder from any such trust shall be offset against the amount of payments required to be made hereunder by the Company to the Participant or other payee. To the extent that any person acquires a right to receive payments from the Company or from any trust pursuant to the Plan, such right shall be no greater than the right of an unsecured general creditor of the Company and shall not be deemed to be a right to payment of wages for purposes of any law providing for a lien or any other priority for claims for wages. Any trust established to provide for any payments hereunder shall be subject to the claims of creditors of the Company in the event of any insolvency of the Company, and all the Company's obligations to pay benefits pursuant to the Plan shall constitute only a general and unsecured contractual liability of the Company to the participants and other payees hereunder in accordance with the terms hereof. Amounts payable hereunder, whether from such a nonqualified grantor trust or from the Company's general assets, shall be subject in all respects to claims of general creditors of the Company until actually paid over to the person(s) entitled to receive the same. 6. Other Provisions Concerning Payment. All amounts payable during the lifetime of a Participant shall be paid directly to the Participant unless applied for the Participant's benefit in accordance with Section 9 hereof. Except as otherwise provided in this Plan, all amounts payable after the death of a Participant shall be payable to the Beneficiary or Beneficiaries in the manner designated by the Participant. If a Participant who is being paid pursuant to the normal method of payment has received any payment or payments during his or her lifetime, the number of installments payable to the Beneficiary or Beneficiaries after the Participant's death shall be reduced by the number of installments paid to such Participant. All amounts payable, whether to a living person or to the estate of a deceased person, shall be paid net after the withholding of any federal, state or local income, earnings and other taxes which might be required to be withheld from such payments. 7. Designation of a Beneficiary. Each Participant shall specifically designate, by name, on forms provided by the Company, the Beneficiary(ies) who shall receive any benefits which might be payable after his or her death. Such designation may be made at any time satisfactory to the Company. If a Participant has not designated a Beneficiary in the manner provided above, the Participant's estate shall be the Beneficiary. A designation of a Beneficiary may be changed or revoked without the consent of the Beneficiary at any time or from time to time in such manner as may be provided by the Company, and the Company shall have no duty to notify any person designated as a Beneficiary of any change in any such designation which might affect such person's present or future rights hereunder. If the designated Beneficiary does not survive the Participant, all amounts which would have been paid to such deceased Beneficiary shall be paid to the alternative or successor Beneficiary or Beneficiaries (if any) designated by the Participant or, if the Participant has not designated any alternative or successor Beneficiary, to the estate of the deceased Participant, but, if a designated Beneficiary, having survived the Participant, dies before receiving all of the amount payable hereunder, the amount which such Beneficiary would have received had he lived to receive benefits shall be paid to the estate of such deceased Beneficiary unless a contrary direction was made by the Participant, in which event such direction shall control. Not more than five (5) persons or, if a greater number, that number of persons as shall be necessary to permit the Participant to designate as simultaneous Beneficiaries any or all of the Participant's surviving children and spouse, may be named as simultaneous Beneficiaries of any Participant at any one time, and, if two or more persons are to be simultaneous beneficiaries, or, if the Participant wishes to designate alternative, successor or contingent Beneficiaries, the Participant shall specify the shares, terms and conditions upon which amounts shall be paid to such multiple, alternative, successor or contingent Beneficiaries, all of which must be clearly stated to the satisfaction of the Committee. Any payment under this Plan which may be made to a Beneficiary after the death of a Participant shall be made only to the person (s) designated pursuant to this section by the Participant who would otherwise have been paid such amounts. 8. Payees Presumed Competent. Every person receiving or claiming amounts payable under this Plan shall be conclusively presumed to be mentally competent and of legal age until the Company receives a written notice, in form, manner and substance acceptable to it, that any such person has been adjudged legally incompetent or is a minor or that a guardian or other person legally vested with the care of such person's estate has been appointed. 9. Distribution to Persons Under a Legal Disability. If any amount payable hereunder is payable to a minor or other person under legal disability, the Company shall make payments thereof in one (or any combination) of the following ways, as the Committee shall determine in its sole right, but is not obligated, to insist that a legal guardian be appointed before making any payments hereunder: a. directly to said minor or other person; b. to the legal representatives of said minor or other person; or c. to some relative or friend of said minor or other person for the support, welfare or education of such minor or other person. The Company shall not be required to see to the application of any payment so made, and the receipt of the person in one of the above three categories to whom such payment is actually made shall fully discharge the Company from any further accountability or responsibility with respect to the amount so paid. 10. Notice of Address; Lost Payees. a. Every Participant shall file a notice of his or her post office address and of the post office address and Social Security number of each Beneficiary designated by him or her and of each change of any such address, in writing, with the Company. Any communication, statement or notice addressed to any such person at the latest post office address on file shall be binding upon such person for all purposes, and the Company shall not be obliged to search for or attempt to ascertain the whereabouts of any such person except as hereinafter provided, and, if a Participant fails or neglects to file such addresses, the Participant's address shall be presumed to be his or her last address on file in the personnel records of the Company, and, in the case of a person whole rights accrued through or from a Participant, his or her last address shall be presumed to be in care of the last address of such Participant on file in the personnel records of the Company. b. If the Company is unable to locate any person entitled to receive a payment hereunder or the estate of any such person, if deceased, and if the Company shall make a search for such person and/or such person's estate in the manner hereinafter prescribed, the right and interest of such payee in and to the amount payable shall terminate on the last day of the one (1) year period commencing with the publication of the notice hereinafter described, and the amount so payable shall be payable to the estate of the Participant to whom such amount had originally been payable; provided, however, that, if the estate of such Participant cannot be located within an additional one (1)-year period, the unclaimed amount shall be forfeited. In its search for such payee, the Company shall mail a notice, postage prepaid, by U.S. registered or certified mail, return receipt requested and return postage guarantee, to the last known address of such payee or (if the payee is not the Participant and if the address of the payee is unknown) to such payee in care of the last known address of the Participant from whom such payee's rights are derived. If all notices sent as aforesaid are returned unclaimed or addressee unknown, the Company shall publish a notice in a newspaper having a general circulation in the same general area as the last known address of the payee stating that the Company holds an amount of payment hereunder and giving such additional information as may be reasonably calculated to come to the notice of the parties having an interest herein. The foregoing actions shall satisfy the Company's obligation to conduct a search for such payee or the estate of the Participant; provided, however, that the Company shall never be required to expend in such search an amount greater than the amount payable hereunder, and all amounts so expended shall be charged against the amounts held for payment. 11. No Liability for Participant's Debts (Other than Indebtedness to the Company). If, at the time any benefit becomes payable hereunder, there is any indebtedness due the Company from the payee thereof, the Company (without being obligated to do so) may direct that some or all of the amounts payable to such party be applied against such indebtedness (including any interest properly payable on such indebtedness), and only the unapplied balance shall be paid to the party otherwise entitled to receive such payment. Except to the extent amounts otherwise payable are applied against indebtedness of the Participant or Beneficiary to the Company in accordance with the foregoing authority, this Plan and the amounts payable hereunder shall not, in any manner, be liable for or subject to the debts or liabilities of any payee, and no amount payable hereunder shall, at any time or in any manner, be subject to anticipation, alienation, sale, transfer, assignment, pledge or encumbrance of any kind, whether to the Company or to any other party whomsoever, and whether with or without consideration. If any payee shall attempt to, or shall, anticipate, alienate, sell, transfer, assign, pledge or otherwise encumber any amounts payable hereunder or any part thereof, or, if by reason of bankruptcy or other event, such amounts would at any time be received or enjoyed by persons other than such payee except as otherwise permitted by this Plan, the Company, in its sole discretion, may terminate such person's interest in any such amounts and hold or apply such amounts to or for the use of such person or such person's spouse, children or other dependents, or any of them, as the Company may determine. 12. Administration. This Plan shall be administered by the Committee, which shall have full power, authority and discretion to do all things necessary or appropriate to the proper administration hereof, except that the Board shall have sole power to determine whether any Employee is entitled to participate in the Plan. The Committee's power, authority and discretion shall include, without limiting the generality of the foregoing, full power, authority and discretion to construe the Plan and the Plan Agreements and to determine all questions which may arise hereunder relating to the administration of the Plan and the Plan agreements (other than eligibility to participate in the Plan), including questions relating to the status and rights of Participant, Beneficiaries and other persons hereunder. Any rules adopted by the Committee shall be administered uniformly and applied with equal effectiveness and in a nondiscriminatory manner to all persons similarly situated. Notwithstanding any other provision hereof, the trustee of the Trust (the "Trustee") shall have the power, authority, and discretion, pursuant to and to the extent provided in the Trust, to override any determination or interpretation by the Committee, the Board or the Company affecting the rights of any Participant or Beneficiary to a benefit under the Plan. Except as provided in the next sentence, notwithstanding any other provision hereof, all power, authority and discretion vested in the Committee, the Board, or the Company under the Plan shall, on or after the date on which a Change in Control (as defined in the Trust) occurs, no longer be vested in the Company, the Board, or the Committee and instead shall be vested in the Trustee, and any matter which requires the mutual agreement of a Participant and the Company, Board or Committee shall instead require the agreement of the Participant and the Trustee. Notwithstanding the preceding sentence, following a Change in Control, the Trustee shall not be vested with the power, authority, or discretion provided by the following provisions of the Plan, which power, authority, or discretion shall remain with the same entity (whether the Board or the Committee) that exercised such power, authority, or discretion prior to the Change in Control: (i) to waive the application of the fraction set forth in subparagraph 1(a)(ii) and instead provide an accrued benefit to a Participant equal to the amount in subparagraph 1(a)(i), as provided in subparagraph 1(a)(ii); (ii) to waive the years of service requirement set forth in the final paragraph of subsection 1(a), as provided in that paragraph; (iii) to waive the age requirement for early Retirement, as provided in subsection 1(i); (iv) to consent, if such consent is permitted under existing law, to a Participant's continued employment with the Company after his or her Normal Retirement Date, as provided in subsection 1(k); (v) to determine whether a Participant is disabled, as provided in Subsection 4(b); (vi) to pay a lump sum, as provided in subsection 14(c); and (vii) to deviate from the normal methods of payment, as provided in subsection 14(d). 13. Negation of Employment Contract. This Plan is intended to, and does, relate exclusively to benefits payable after termination of employment and does not create an employment contract. Nothing contained herein shall be deemed: a. to give a Participant the right to be retained in the employ of the Company; b. to interfere with the right of the Company to discharge or demote a Participant at any time; c. to give the Company the right to require a Participant to remain in its employ; or d. to interfere with the right of a Participant to terminate employment at any time. 14. Modification, Amendment or Termination. a. The Company reserves the absolute right to modify or amend this Plan in whole or in part, at any time and from time to time, effective as of any specified prior, current or future date, by action of the Board of Directors or its delegate; provided, however, that except as necessary to prevent this Plan from being subject to any provision of Title I, Subtitle B, Parts 2, 3 or 4 of the Employee Retirement Income Security Act of 1974, as amended, or any successor thereto, no Participant affected by any such modification or amendment shall be deprived of the right to receive any part of the Accrued Benefit he would have been entitled to receive under the terms of the Plan as in effect immediately prior to such modification or amendment if he had terminated employment with the Company on the date of such modification or amendment; and provided further that, on or after the date of a Change in Control (as defined in the Trust), the Company shall have no power to modify, amend or interpret the Plan in any manner that would result in any Participant receiving a smaller Accrued Benefit than such Participant would have received under the terms of the Plan as in effect on the day immediately preceding the date on which the Change in Control occurs. b. The Company also reserves the right to terminate this Plan, in whole or in part, voluntarily as of any specified current or future date by action of the Board. This Plan shall be automatically terminated upon a dissolution of the Company (but not upon a merger, consolidation, reorganization or recapitalization of the Company if a surviving corporation therein assumes this Plan); upon the Company being legally adjudicated a bankrupt; upon the appointment of a receiver or trustee in bankruptcy with respect to the Company's assets and business if such appointment is not set aside within ninety (90) days thereafter; or upon the making by the Company of an assignment for the benefit of creditors. Upon termination of this Plan, no additional Employees shall be selected to participate herein, and no additional benefits shall be accrued hereunder. Notwithstanding the total or partial termination of this Plan, except as necessary to prevent this Plan from being subject to any provision of Title I, Subtitle B, Parts 2, 3 or 4 of the Employee Retirement Income Security Act of 1974, as amended, or any successor thereto, no Participant affected thereby shall be deprived of the right to receive any part of the Accrued Benefit he would have been entitled to receive under the terms of the Plan as in effect immediately prior to the termination of the Plan had he terminated employment with the Company on the date of such termination. Such Accrued Benefit shall be paid at the time and in the manner provided by this Plan (as in effect immediately prior to the termination) upon observance and performance of the Participant's obligations under the Plan Agreement to which the Participant is a party. c. If any benefit payable hereunder becomes payable to any person, the amount thereof may, in the sole discretion of the Committee, be paid in a single lump sum, the amount of which shall be Actuarial Equivalent of the total amount of benefits thereafter payable. d. In any instance in which the Committee in its sole and uncontrolled discretion believes such action to be in the best interest of the party entitled to receive any payment provided by this Plan, or to be in the best interests of the Company (such as to eliminate small account balances or to avoid the administrative inconvenience and expense which might be incurred if relatively small amounts were to be paid to multiple recipients over lengthy periods of time), amounts payable in installments pursuant to the provisions of this Plan may be paid in a single lump sum, the amount of which shall be determined in the manner provided in paragraph (c) above. It is intended by this paragraph to vest the Committee with full discretion to administer this Plan and to determine when and under what circumstances deviations which accelerate the normal method of payments of benefits are necessary, desirable or appropriate, and the Committee shall have full plenary power to authorize such deviations as regards to each payee separately, notwithstanding that one or more persons may be payees of benefits relating to the same Participant. To illustrate, the Committee shall be free to authorize a lump sum distribution to one Beneficiary of a deceased Participant, while directing that another Beneficiary of the same deceased Participant receive the amount to which he is entitled over a period of time. The Committee will normally consider the wishes of any payee who might request a deviation from the normal method of payment applicable to him, but shall not be obligated to honor any request for deviation. In any case, any payment method which deviates from the norm shall be the Actuarial Equivalent of the normal method of payment. e. In the event of the death of a Participant or any Beneficiary designated by him or her, the Company need not make any payment provided for by this Plan until it shall have received proof satisfactory to it of such death and of the identity, existence and location of the party thereafter entitled to received payments under this Plan. f. In making any payment or taking any action under this Plan, the Company shall be absolutely protected in relying upon any finding or statement of facts believed by it to have been signed by the proper party. g. This Plan and all Participation Agreements entered into hereunder shall be construed and enforced under and in accordance with the laws of the State of Florida. 15. Plan Agreement. Each Participant shall be entitled to benefits in accordance with this Plan and his Plan Agreement. The Plan Agreement may modify any of the terms of this Plan as it applies to the Participant. In the event of a conflict between the Plan Agreement and this Plan, the Plan Agreement shall control. 16. Claims Procedure. In the event that benefits under this Plan are not paid to the Participant (or his Beneficiary in the case of Participant's death), and such person feels entitled to receive them, a claim shall be made in writing to the Committee within sixty (60) days from the date payments are not made. Such claim shall be reviewed by the Committee and the Board of Directors of the Company. If the claim is denied in full or in part, the Committee shall provide a written notice within ninety (90) days setting forth the specific reasons for denial, specific reference to the provisions of this Plan or the Plan Agreement upon which the denial is based and any additional material or information necessary to perfect the claim, if any. Also, such written notice shall indicate the steps to be taken if a review of the denial is desired. However, under no circumstances, shall a notification of denial which does not satisfy all of the foregoing requirements be deemed to constitute an acceptance of a claim. If the Committee does not provide the Participant (or the Beneficiary in the case that the Participant is dead) with notice of its decision within ninety (90) days, the claim shall be deemed to be denied. If a claim is denied and a review is desired, the Participant or his Beneficiary in the case of the Participant's death, shall notify the Committee in writing within sixty (60) days after receipt of either the notification or denial or the expiration of the said ninety (90) day period, whichever first occurs. In requesting a review, the Participant or his Beneficiary may review this Plan or the Plan Agreement or any documents relating to it and submit any written issues and comments he or she may feel appropriate. In its sole discretion, the Committee shall then review the claim and provide a written decision within sixty (60) days. This decision, likewise, shall state the specific reasons for the decision and shall include reference to specific provisions of this Plan or the Plan Agreement on which the decision is based. IN WITNESS WHEREOF, ECKERD CORPORATION has caused this Amended and Restated Plan to be executed, and its corporate seal to be hereunto affixed, by its officers hereunto duly authorized, effective as of February 3, 1996. ECKERD CORPORATION By: /s/ Francis A. Newman (SEAL) Name: Francis A. Newman Its: President ATTEST: /s/ James M. Santo Secretary g: exsuppl3/doc EXHBIT "A" FIRST EXECUTIVE SUPPLEMENTAL BENEFIT PLAN AGREEMENT OF ECKERD CORPORATION AND ITS SUBSIDIARIES The undersigned executive employee ("Employee") acknowledges that as an Employee of Eckerd Corporation and its Subsidiaries ("Employer"), Employee has been offered an opportunity to participate in The First Executive Supplemental Benefit Plan ("Plan") subject to the terms and conditions stated in the Plan, a copy of which is attached hereto and incorporated herein by reference. In the event of any inconsistencies between the provisions of this Plan Agreement and the Plan, the provisions of the Plan shall prevail. Employee's Covered Salary, benefits and designated beneficiary(ies) are agreed to be as follows: 1. Employee's Covered Salary: per annum. 2. Years of Service as of 00 YEARS; 00 MONTHS 3. Death Benefit: (elect one option only) a. Option A i.Ninety percent (90%) of the Employee's Covered Salary per annum payable in one installment for the first year after death; plus ii. Forty-five percent (45%) of the Employee's Covered Salary per annum for the next nine (9) years. b. Option B payable in a lump sum. c. Subject to Paragraph 14.d. of the Plan, in the event of a failure to make an election herein, the Employer will pay the Death Benefit pursuant to Option A above. 4. Retirement Benefit: a. Retirement at age 65: per annum payable in 180 equal monthly installments of . b. Early Retirement: The Employee's Accrued Benefit (as defined in Paragraph 1.a. of the Plan) reduced in accordance with Paragraph 3.b. of the Plan. c. Late Retirement: The benefit payable in a. above as adjusted pursuant to Paragraph 3.c. of the Plan. d. Termination Benefit: The Employee's Accrued Benefit payable as provided in Paragraph 4.c. of the Plan. e. Disability Benefit. Determined in accordance with Paragraph 4.b. of the Plan. f. Commencement of Retirement Benefits. Thirty (30) days prior to Employee's Normal Retirement Date or Early Retirement Date application may be made to the Committee to have such Retirement Benefits commence on the first day of the month following the Normal or Early Retirement Date. 5. Beneficiary(ies): a. The Employee hereby designates as primary beneficiary or beneficiaries to receive any benefits payable after the death of Employee: Primary Beneficiary(ies): Address & Name Share Relationship Social Security Number b. The Employee designates the following person or persons as successor beneficiary or beneficiaries to receive any benefits payable after the death of Employee and the primary beneficiary(ies): Successor Beneficiary(ies): Address & Name Share Relationship Social Security Number 6. The Employee has read this Plan Agreement and the Plan and is aware of and accepts the terms and conditions set forth in each document. In particular, Employee understands that the benefits payable pursuant to the Plan and the Plan Agreement are unsecured contractual obligations of the Employer and the Employer has no obligation whatsoever to set aside funds in advance for the payment of benefits hereunder. IN WITNESS WHEREOF the parties hereto have hereunto set their hands effective as of the day of , . EMPLOYER: ECKERD CORPORATION AND ITS SUBSIDIARIES ATTEST: By: ------------------------- - - ----------------------- TITLE: ---------------------- WITNESS: EMPLOYEE: - - ----------------------- ---------------------------- Signature ---------------------------- Type or Print Name ---------------------------- ---------------------------- Address of Employee a: 96sup2 EX-10.2 3 SECOND EXECUTIVE SUPPLEMENTAL BENEFIT PLAN Exhibit 10.2 THE SECOND EXECUTIVE SUPPLEMENTAL BENEFIT PLAN OF ECKERD CORPORATION AND ITS SUBSIDIARIES (Effective as of February 4, 1996) ECKERD CORPORATION, a Delaware corporation, desiring to provide an income for its executives after their retirement as well as pre-retirement death benefits to beneficiaries of such executives hereby establishes this SECOND EXECUTIVE SUPPLEMENTAL BENEFIT PLAN. It is intended that this Plan shall be for the benefit of only those executive employees of the Company who are selected by the Board of Directors of the Company after February 3, 1996. 1. Definitions Applicable to the Plan. The words and phrases defined below have the meanings herein set out: a. "Accrued Benefit" shall mean an annual annuity commencing at age 65 and continuing for fifteen (15) years certain in an annual amount equal to the product of i. multiplied by ii.: i. Twenty-five percent (25%) of the Participant's Covered Salary. ii. A fraction, the numerator of which is the number of years of service with the Company and the denominator of which is 25; PROVIDED, HOWEVER, the Board of Directors, in its sole discretion, shall have the right to waive the requirements of this Subparagraph ii. and to provide an accrued benefit equal to i. above to any participant. For the purposes of this definition, all service and age determinations shall be computed utilizing all full calendar years and completed calendar months, and all years and months of service as an employee shall be counted. Notwithstanding the above, a Participant must have five (5) years of service with the Company to have an accrued benefit. The Board, in its sole discretion, shall have the right to waive the years of service requirement hereunder as to any Participant. In addition, the Board, in its sole discretion, shall have the right to include service with a business operation acquired by the Company in the determination of years of service of a Participant with the Company. b. "Actuarial Equivalent" shall mean an equivalent in value, taking into account an annual effective interest rate of six percent (6%) per year compounded annually, and without taking into account any discount based on mortality tables. c. "Beneficiary" shall mean the person or persons (including a trust created by a person or the estate of a person) designated by the Participant entitled to receive any benefits under this Plan upon the death of a Participant or, in the event no such person or persons are designated or survive the Participant, then the estate of the Participant. d. "Board" or "Board of Directors" shall mean the Board of Directors of Eckerd Corporation or the Executive Compensation and Stock Option Committee of the Board of Directors of the Eckerd Corporation or the Executive Committee of the Board of Directors. e. "Committee" shall mean the Administrative Committee appointed to manage and administer the Plan in accordance with the provisions of Section 12 of this Plan. f. "Company" shall mean Eckerd Corporation and its subsidiaries. g. "Covered Salary" shall mean, unless otherwise agreed between the Participant and the Company in the Plan Agreement, the midpoint (on an annualized basis) established by the Company for the Participant's Salary Grade (as defined by the personnel practices of the Company) as of the date the Participant and the Company execute the Plan Agreement and, as such midpoint may be modified, from time to time, during the Participant's employment with the Company. h. "Early Retirement Date" shall be the first day of the month following the month in which a Participant who has attained the age of 55 retires with the consent of the Committee prior to his or her Normal Retirement Date. Notwithstanding the above, the Board, in its sole discretion, shall have the right to waive the age requirement for early Retirement. i. "Employee" shall mean any person regularly employed full time by the Company in any capacity (including officers and directors who regularly render services to the Company as regular full time employees). Employees shall not include part-time employees, consultants or independent contractors of the Company. j. "Late Retirement Date" shall be the first day of the month following the month in which a Participant retires who, with the consent of the Committee (if such consent is permissible under existing law), had remained in the employment of the Company after his or her Normal Retirement Date. k. "Normal Retirement date" shall be the first day of the month following the month in which the Participant attains his or her 65th birthday. l. "Participant" shall mean an Employee who is eligible to participate herein in accordance with Section 2 hereof and who has executed a Plan Agreement in the form attached hereto as Exhibit A. m. "Plan" shall mean The Second Executive Supplemental Benefit Plan of Eckerd Corporation and its subsidiaries, which shall be evidenced by this instrument as amended from time to time and by each Plan Agreement. n. "Plan Agreement" shall mean the form of written agreement, attached hereto as Exhibit A, which is entered into from time to time by and between the Company and a Participant. Each Plan Agreement executed by a Participant shall provide for the entire benefit to which such Participant is entitled under the Plan, and the Plan Agreement bearing the latest date shall govern such entitlement. o. "Retirement" and "Retire" shall mean severance from employment with the Company on or after the Normal Retirement Date or with the consent of the Committee after the attainment of his or her Early Retirement Date. 2. Eligibility to Participate in the Plan. a. Those executive employees selected from time to time by the Board of Directors after February 3, 1996 upon the recommendation of the Committee shall be eligible to become Participants in accordance with the purposes of the Plan. As a condition of participation, each Participant so selected shall complete, execute and return to the Committee a Plan Agreement in the form attached hereto as Exhibit A and comply with such further conditions as may be established (prior to the Employee's commencement of participation) by and in the sole discretion of the Committee. b. In the event that subsequent to commencement of participation in the Plan, a Participant fails to maintain a position of employment in the Company which, in the sole discretion of the Board, qualifies for participation in the Plan, then such Participant shall cease to accrue further benefits under the Plan. Such Participant, however, shall be entitled to receive his/her Accrued Benefit at the time and in the manner provided by this Plan. If at any future time the former Participant becomes, in the sole discretion of the Board, eligible to participate in the Plan, then such Participant's Accrued Benefit shall be calculated as if the Participant had continuously been a Participant from his/her original date of participation. 3. Benefit Upon Retirement. Upon Retirement, a Participant shall be entitled to receive the following benefit: a. Normal Retirement. A Participant who Retires on his or her Normal Retirement Date shall receive an annual benefit equal to the Participant's Accrued Benefit payable in equal monthly installments for a period of fifteen (15) years commencing in the month following the month in which Participant Retires. b. Early Retirement. A Participant who, with the consent of the Committee, Retires at any time after his or her Early Retirement Date and before his or her Normal Retirement Date shall receive an annual benefit equal to the Actuarial Equivalent, as determined by the Committee, of the Participant's Accrued Benefit payable in equal monthly installments for a period of fifteen (15) years, commencing on such date as may be agreed upon by the Participant and the Committee or, in the absence of such agreement, in the month following the month in which the Participant Retires; provided, however, the Participant may elect to have the annual benefit paid up to the month in which the Participant becomes eighty-one (81) years old in equal monthly installments adjusted to represent the Actuarial Equivalent of the Participant's Accrued Benefit on the basis of the number of monthly payments. c. Late Retirement. A Participant who Retires on a Late Retirement Date at any time after his or her Normal Retirement Date shall receive an annual benefit equal to the Actuarial Equivalent, as determined by the Committee, of the Participant's Accrued Benefit payable in equal monthly installments for a period of fifteen (15) years commencing in the month following the month in which the Participant Retires. d. Death After Retirement. if a Participant dies after retiring but before receiving the number of monthly payments provided for in the Plan, the Beneficiary shall receive the remaining payments to which the Participant would have been entitled if the Participant had lived. 4. Disability and Termination of Employment. a. Benefits in the Case of Disability. i. If, in the sole opinion of the Committee, a Participant is, because of physical or mental disability, incapable of performing the duties of his regular position of employment with the Company, then the Participant shall continue to accrue years-of-service credits (as if the Participant were employed by the Company) until age 65 or commencement of benefits, if earlier. Except as provided in Paragraph 14, if the Participant ceases to be so disabled (in the sole opinion of the Committee) and returns to work at the Company in the position of employment he formerly held with the Company or in another position which, in the sole discretion of the Board, qualifies for participation in the Plan, the Participant shall again participate on the same basis as other Participants. if the Participant ceases to be so disabled and does not return to work at the Company in his former position of employment or in another position which, in the sole discretion of the board, qualified for participation in the Plan, the Participant shall be considered to have returned to work and immediately terminated employment on the date that such disability ceases. ii. In the event that a participant referred to in Paragraph i. above does not qualify for or ceases to receive disability payments under the long-term disability insurance program sponsored by the Company and, in the opinion of the Committee, such Participant is or continues to be so physically or mentally disabled so as not to be capable of performing the duties of his regular position of employment with the Company, then the Committee may, in its sole discretion, authorize payment of an annual benefit equal to the Actuarial Equivalent of the Participant's Accrued Benefit. Such benefit shall be payable in equal monthly installments over a period of fifteen (15) years commencing on the first day of the month following determination of disability by the Committee or the termination of the Company sponsored long-term disability payments to the Participant, whichever last occurs. Except as hereinafter provided, such payment shall be in lieu of any other payment provided pursuant to the Plan. If the Participant ceases to be disabled and returns to work at the Company in the position of employment he formerly held with the Company or in another position which, in the sole discretion of the Board, qualifies for participation in the Plan, the participant shall again participate on the same basis as other participants except that: aa. the Participant shall not accrue years-of-service credits during the period the Participant received payments hereunder, and bb. the payments made to such Participant pursuant to the Plan during his/her disability shall be deducted from any award hereunder to which the Participant or his/her Beneficiary may become entitled. If the Participant ceases to be disabled and does not return to work at the Company, the Participant shall be considered to have terminated employment with the Company as of the date benefits became payable hereunder, and any payments made to such Participant pursuant to the Plan during his/her disability shall be deducted from any award to which the Participant or his/her Beneficiary may become entitled. b. Termination of Employment. i. Upon termination of employment (other than by death, disability or Retirement), a Participant shall be entitled to receive an annual benefit equal to his Accrued Benefit payable in equal monthly installments for a period of fifteen (15) years commencing on his Normal Retirement Date; provided, however, with the consent of the Committee, such Participant may receive benefits commencing on his or her Early Retirement Date on the same basis as any other Participant retiring early. ii. If a Participant terminates employment with the Company (other than by death, disability or Retirement) and dies before commencement of benefits, in lieu of any other benefits payable hereunder, the Participant's Beneficiary shall be entitled to receive an amount equal to the Actuarial Equivalent of the Participant's Accrued Benefit payable in a lump sum. Such lump sum payment shall supersede any prior election for periodic payments made pursuant to the Plan. 5. Obligation to Pay Benefits Hereunder. Except as required by the Jack Eckerd Corporation Benefit Plans Trust (the "Trust"), the Company shall have no obligation to fund a trust fund, escrow account or otherwise to segregate assets to guarantee, secure or assure the payment of any benefit under the Plan, but the Company may (and to the extent required by the Trust, shall) fund a nonqualified grantor trust to provide for the payment of benefits under the Plan. The establishment or funding of any such nonqualified grantor trust shall not relieve the Company of any of its obligations pursuant to the Plan, except that amounts paid to the Participants or other payees hereunder from any such trust shall be offset against the amount of payments required to be made hereunder by the Company to the Participant or other payee. To the extent that any person acquires a right to receive payments from the Company or from any trust pursuant to the Plan, such right shall be no greater than the right of an unsecured general creditor of the Company and shall not be deemed to be a right to payment of wages for purposes of any law providing for a lien or any other priority for claims for wages. Any trust established to provide for any payments hereunder shall be subject to the claims of creditors of the Company in the event of any insolvency of the Company, and all the Company's obligations to pay benefits pursuant to the Plan shall constitute only a general and unsecured contractual liability of the Company to the participants and other payees hereunder in accordance with the terms hereof. Amounts payable hereunder, whether from such a nonqualified grantor trust or from the Company's general assets, shall be subject in all respects to claims of general creditors of the Company until actually paid over to the person(s) entitled to receive the same. 6. Other Provisions Concerning Payment. All amounts payable during the lifetime of a Participant shall be paid directly to the Participant unless applied for the Participant's benefit in accordance with Section 9 hereof. Except as otherwise provided in this Plan, all amounts payable after the death of a Participant shall be payable to the Beneficiary or Beneficiaries in the manner designated by the Participant. If a Participant who is being paid pursuant to the normal method of payment has received any payment or payments during his or her lifetime, the number of installments payable to the Beneficiary or Beneficiaries after the Participant's death shall be reduced by the number of installments paid to such Participant. All amounts payable, whether to a living person or to the estate of a deceased person, shall be paid net after the withholding of any federal, state or local income, earnings and other taxes which might be required to be withheld from such payments. 7. Designation of a Beneficiary. Each Participant shall specifically designate, by name, on forms provided by the Company, the Beneficiary(ies) who shall receive any benefits which might be payable after his or her death. Such designation may be made at any time satisfactory to the Company. If a Participant has not designated a Beneficiary in the manner provided above, the Participant's estate shall be the Beneficiary. A designation of a Beneficiary may be changed or revoked without the consent of the Beneficiary at any time or from time to time in such manner as may be provided by the Company, and the Company shall have no duty to notify any person designated as a Beneficiary of any change in any such designation which might affect such person's present or future rights hereunder. If the designated Beneficiary does not survive the Participant, all amounts which would have been paid to such deceased Beneficiary shall be paid to the alternative or successor Beneficiary or Beneficiaries (if any) designated by the Participant or, if the Participant has not designated any alternative or successor Beneficiary, to the estate of the deceased Participant, but, if a designated Beneficiary, having survived the Participant, dies before receiving all of the amount payable hereunder, the amount which such Beneficiary would have received had he lived to receive benefits shall be paid to the estate of such deceased Beneficiary unless a contrary direction was made by the Participant, in which event such direction shall control. Not more than five (5) persons or, if a greater number, that number of persons as shall be necessary to permit the Participant to designate as simultaneous Beneficiaries any or all of the Participant's surviving children and spouse, may be named as simultaneous Beneficiaries of any Participant at any one time, and, if two or more persons are to be simultaneous beneficiaries, or, if the Participant wishes to designate alternative, successor or contingent Beneficiaries, the Participant shall specify the shares, terms and conditions upon which amounts shall be paid to such multiple, alternative, successor or contingent Beneficiaries, all of which must be clearly stated to the satisfaction of the Committee. Any payment under this Plan which may be made to a Beneficiary after the death of a Participant shall be made only to the person (s) designated pursuant to this section by the Participant who would otherwise have been paid such amounts. 8. Payees Presumed Competent. Every person receiving or claiming amounts payable under this Plan shall be conclusively presumed to be mentally competent and of legal age until the Company receives a written notice, in form, manner and substance acceptable to it, that any such person has been adjudged legally incompetent or is a minor or that a guardian or other person legally vested with the care of such person's estate has been appointed. 9. Distribution to Persons Under a Legal Disability. If any amount payable hereunder is payable to a minor or other person under legal disability, the Company shall make payments thereof in one (or any combination) of the following ways, as the Committee shall determine in its sole right, but is not obligated, to insist that a legal guardian be appointed before making any payments hereunder: a. directly to said minor or other person; b. to the legal representatives of said minor or other person; or c. to some relative or friend of said minor or other person for the support, welfare or education of such minor or other person. The Company shall not be required to see to the application of any payment so made, and the receipt of the person in one of the above three categories to whom such payment is actually made shall fully discharge the Company from any further accountability or responsibility with respect to the amount so paid. 10. Notice of Address; Lost Payees. a. Every Participant shall file a notice of his or her post office address and of the post office address and Social Security number of each Beneficiary designated by him or her and of each change of any such address, in writing, with the Company. Any communication, statement or notice addressed to any such person at the latest post office address on file shall be binding upon such person for all purposes, and the Company shall not be obliged to search for or attempt to ascertain the whereabouts of any such person except as hereinafter provided, and, if a Participant fails or neglects to file such addresses, the Participant's address shall be presumed to be his or her last address on file in the personnel records of the Company, and, in the case of a person whole rights accrued through or from a Participant, his or her last address shall be presumed to be in care of the last address of such Participant on file in the personnel records of the Company. b. If the Company is unable to locate any person entitled to receive a payment hereunder or the estate of any such person, if deceased, and if the Company shall make a search for such person and/or such person's estate in the manner hereinafter prescribed, the right and interest of such payee in and to the amount payable shall terminate on the last day of the one (1) year period commencing with the publication of the notice hereinafter described, and the amount so payable shall be payable to the estate of the Participant to whom such amount had originally been payable; provided, however, that, if the estate of such Participant cannot be located within an additional one (1)-year period, the unclaimed amount shall be forfeited. In its search for such payee, the Company shall mail a notice, postage prepaid, by U.S. registered or certified mail, return receipt requested and return postage guarantee, to the last known address of such payee or (if the payee is not the Participant and if the address of the payee is unknown) to such payee in care of the last known address of the Participant from whom such payee's rights are derived. If all notices sent as aforesaid are returned unclaimed or addressee unknown, the Company shall publish a notice in a newspaper having a general circulation in the same general area as the last known address of the payee stating that the Company holds an amount of payment hereunder and giving such additional information as may be reasonably calculated to come to the notice of the parties having an interest herein. The foregoing actions shall satisfy the Company's obligation to conduct a search for such payee or the estate of the Participant; provided, however, that the Company shall never be required to expend in such search an amount greater than the amount payable hereunder, and all amounts so expended shall be charged against the amounts held for payment. 11. No Liability for Participant's Debts (Other than Indebtedness to the Company). If, at the time any benefit becomes payable hereunder, there is any indebtedness due the Company from the payee thereof, the Company (without being obligated to do so) may direct that some or all of the amounts payable to such party be applied against such indebtedness (including any interest properly payable on such indebtedness), and only the unapplied balance shall be paid to the party otherwise entitled to receive such payment. Except to the extent amounts otherwise payable are applied against indebtedness of the Participant or Beneficiary to the Company in accordance with the foregoing authority, this Plan and the amounts payable hereunder shall not, in any manner, be liable for or subject to the debts or liabilities of any payee, and no amount payable hereunder shall, at any time or in any manner, be subject to anticipation, alienation, sale, transfer, assignment, pledge or encumbrance of any kind, whether to the Company or to any other party whomsoever, and whether with or without consideration. If any payee shall attempt to, or shall, anticipate, alienate, sell, transfer, assign, pledge or otherwise encumber any amounts payable hereunder or any part thereof, or, if by reason of bankruptcy or other event, such amounts would at any time be received or enjoyed by persons other than such payee except as otherwise permitted by this Plan, the Company, in its sole discretion, may terminate such person's interest in any such amounts and hold or apply such amounts to or for the use of such person or such person's spouse, children or other dependents, or any of them, as the Company may determine. 12. Administration. This Plan shall be administered by the Committee, which shall have full power, authority and discretion to do all things necessary or appropriate to the proper administration hereof, except that the Board shall have sole power to determine whether any Employee is entitled to participate in the Plan. The Committee's power, authority and discretion shall include, without limiting the generality of the foregoing, full power, authority and discretion to construe the Plan and the Plan Agreements and to determine all questions which may arise hereunder relating to the administration of the Plan and the Plan agreements (other than eligibility to participate in the Plan), including questions relating to the status and rights of Participant, Beneficiaries and other persons hereunder. Any rules adopted by the Committee shall be administered uniformly and applied with equal effectiveness and in a nondiscriminatory manner to all persons similarly situated. Notwithstanding any other provision hereof, the trustee of the Trust (the "Trustee") shall have the power, authority, and discretion, pursuant to and to the extent provided in the Trust, to override any determination or interpretation by the Committee, the Board or the Company affecting the rights of any Participant or Beneficiary to a benefit under the Plan. Except as provided in the next sentence, notwithstanding any other provision hereof, all power, authority and discretion vested in the Committee, the Board, or the Company under the Plan shall, on or after the date on which a Change in Control (as defined in the Trust) occurs, no longer be vested in the Company, the Board, or the Committee and instead shall be vested in the Trustee, and any matter which requires the mutual agreement of a Participant and the Company, Board or Committee shall instead require the agreement of the Participant and the Trustee. Notwithstanding the preceding sentence, following a Change in Control, the Trustee shall not be vested with the power, authority, or discretion provided by the following provisions of the Plan, which power, authority, or discretion shall remain with the same entity (whether the Board or the Committee) that exercised such power, authority, or discretion prior to the Change in Control: (i) to waive the application of the fraction set forth in subparagraph 1(a)(ii) and instead provide an accrued benefit to a Participant equal to the amount in subparagraph 1(a)(i), as provided in subparagraph 1(a)(ii); (ii) to waive the years of service requirement set forth in the final paragraph of subsection 1(a), as provided in that paragraph; (iii) to waive the age requirement for early Retirement, as provided in subsection 1(h); (iv) to consent, if such consent is permitted under existing law, to a Participant's continued employment with the Company after his or her Normal Retirement Date, as provided in subsection 1(j); (v) to determine whether a Participant is disabled, as provided in Subsection 4(a); (vi) to pay a lump sum, as provided in subsection 14(c); and (vii) to deviate from the normal methods of payment, as provided in subsection 14(d). 13. Negation of Employment Contract. This Plan is intended to, and does, relate exclusively to benefits payable after termination of employment and does not create an employment contract. Nothing contained herein shall be deemed: a. to give a Participant the right to be retained in the employ of the Company; b. to interfere with the right of the Company to discharge or demote a Participant at any time; c. to give the Company the right to require a Participant to remain in its employ; or d. to interfere with the right of a Participant to terminate employment at any time. 14. Modification, Amendment or Termination. a. The Company reserves the absolute right to modify or amend this Plan in whole or in part, at any time and from time to time, effective as of any specified prior, current or future date, by action of the Board of Directors or its delegate; provided, however, that except as necessary to prevent this Plan from being subject to any provision of Title I, Subtitle B, Parts 2, 3 or 4 of the Employee Retirement Income Security Act of 1974, as amended, or any successor thereto, no Participant affected by any such modification or amendment shall be deprived of the right to receive any part of the Accrued Benefit he would have been entitled to receive under the terms of the Plan as in effect immediately prior to such modification or amendment if he had terminated employment with the Company on the date of such modification or amendment; and provided further that, on or after the date of a Change in Control (as defined in the Trust), the Company shall have no power to modify, amend or interpret the Plan in any manner that would result in any Participant receiving a smaller Accrued Benefit than such Participant would have received under the terms of the Plan as in effect on the day immediately preceding the date on which the Change in Control occurs. b. The Company also reserves the right to terminate this Plan, in whole or in part, voluntarily as of any specified current or future date by action of the Board. This Plan shall be automatically terminated upon a dissolution of the Company (but not upon a merger, consolidation, reorganization or recapitalization of the Company if a surviving corporation therein assumes this Plan); upon the Company being legally adjudicated a bankrupt; upon the appointment of a receiver or trustee in bankruptcy with respect to the Company's assets and business if such appointment is not set aside within ninety (90) days thereafter; or upon the making by the Company of an assignment for the benefit of creditors. Upon termination of this Plan, no additional Employees shall be selected to participate herein, and no additional benefits shall be accrued hereunder. Notwithstanding the total or partial termination of this Plan, except as necessary to prevent this Plan from being subject to any provision of Title I, Subtitle B, Parts 2, 3 or 4 of the Employee Retirement Income Security Act of 1974, as amended, or any successor thereto, no Participant affected thereby shall be deprived of the right to receive any part of the Accrued Benefit he would have been entitled to receive under the terms of the Plan as in effect immediately prior to the termination of the Plan had he terminated employment with the Company on the date of such termination. Such Accrued Benefit shall be paid at the time and in the manner provided by this Plan (as in effect immediately prior to the termination) upon observance and performance of the Participant's obligations under the Plan Agreement to which the Participant is a party. c. If any benefit payable hereunder becomes payable to any person, the amount thereof may, in the sole discretion of the Committee, be paid in a single lump sum, the amount of which shall be Actuarial Equivalent of the total amount of benefits thereafter payable. d. In any instance in which the Committee in its sole and uncontrolled discretion believes such action to be in the best interest of the party entitled to receive any payment provided by this Plan, or to be in the best interests of the Company (such as to eliminate small account balances or to avoid the administrative inconvenience and expense which might be incurred if relatively small amounts were to be paid to multiple recipients over lengthy periods of time), amounts payable in installments pursuant to the provisions of this Plan may be paid in a single lump sum, the amount of which shall be determined in the manner provided in paragraph (c) above. It is intended by this paragraph to vest the Committee with full discretion to administer this Plan and to determine when and under what circumstances deviations which accelerate the normal method of payments of benefits are necessary, desirable or appropriate, and the Committee shall have full plenary power to authorize such deviations as regards to each payee separately, notwithstanding that one or more persons may be payees of benefits relating to the same Participant. To illustrate, the Committee shall be free to authorize a lump sum distribution to one Beneficiary of a deceased Participant, while directing that another Beneficiary of the same deceased Participant receive the amount to which he is entitled over a period of time. The Committee will normally consider the wishes of any payee who might request a deviation from the normal method of payment applicable to him, but shall not be obligated to honor any request for deviation. In any case, any payment method which deviates from the norm shall be the Actuarial Equivalent of the normal method of payment. e. In the event of the death of a Participant or any Beneficiary designated by him or her, the Company need not make any payment provided for by this Plan until it shall have received proof satisfactory to it of such death and of the identity, existence and location of the party thereafter entitled to received payments under this Plan. f. In making any payment or taking any action under this Plan, the Company shall be absolutely protected in relying upon any finding or statement of facts believed by it to have been signed by the proper party. g. This Plan and all Participation Agreements entered into hereunder shall be construed and enforced under and in accordance with the laws of the State of Florida. 15. Plan Agreement. Each Participant shall be entitled to benefits in accordance with this Plan and his Plan Agreement. The Plan Agreement may modify any of the terms of this Plan as it applies to the Participant. In the event of a conflict between the Plan Agreement and this Plan, the Plan Agreement shall control. 16. Claims Procedure. In the event that benefits under this Plan are not paid to the Participant (or his Beneficiary in the case of Participant's death), and such person feels entitled to receive them, a claim shall be made in writing to the Committee within sixty (60) days from the date payments are not made. Such claim shall be reviewed by the Committee and the Board of Directors of the Company. If the claim is denied in full or in part, the Committee shall provide a written notice within ninety (90) days setting forth the specific reasons for denial, specific reference to the provisions of this Plan or the Plan Agreement upon which the denial is based and any additional material or information necessary to perfect the claim, if any. Also, such written notice shall indicate the steps to be taken if a review of the denial is desired. However, under no circumstances, shall a notification of denial which does not satisfy all of the foregoing requirements be deemed to constitute an acceptance of a claim. If the Committee does not provide the Participant (or the Beneficiary in the case that the Participant is dead) with notice of its decision within ninety (90) days, the claim shall be deemed to be denied. If a claim is denied and a review is desired, the Participant or his Beneficiary in the case of the Participant's death, shall notify the Committee in writing within sixty (60) days after receipt of either the notification or denial or the expiration of the said ninety (90) day period, whichever first occurs. In requesting a review, the Participant or his Beneficiary may review this Plan or the Plan Agreement or any documents relating to it and submit any written issues and comments he or she may feel appropriate. In its sole discretion, the Committee shall then review the claim and provide a written decision within sixty (60) days. This decision, likewise, shall state the specific reasons for the decision and shall include reference to specific provisions of this Plan or the Plan Agreement on which the decision is based. IN WITNESS WHEREOF, ECKERD CORPORATION has caused this Amended and Restated Plan to be executed, and its corporate seal to be hereunto affixed, by its officers hereunto duly authorized, effective as of February 4, 1996. ECKERD CORPORATION By: /s/ Francis A. Newman (SEAL) Name: Francis A. Newman Its: President ATTEST: /s/ James M. Santo Secretary a: exsuppl4/doc EXHIBIT "A" SECOND EXECUTIVE SUPPLEMENTAL BENEFIT PLAN AGREEMENT OF ECKERD CORPORATION AND ITS SUBSIDIARIES The undersigned executive employee ("Employee") acknowledges that as an Employee of Eckerd Corporation and its Subsidiaries ("Employer"), Employee has been offered an opportunity to participate in The Second Executive Supplemental Benefit Plan ("Plan") subject to the terms and conditions stated in the Plan, a copy of which is attached hereto and incorporated herein by reference. In the event of any inconsistencies between the provisions of this Plan Agreement and the Plan, the provisions of the Plan shall prevail. Employee's Covered Salary, benefits and designated beneficiary(ies) are agreed to be as follows: 1. Employee's Covered Salary: per annum. 2. Years of Service as of 00 YEARS; 00 MONTHS 3. Retirement Benefit: a. Retirement at age 65: per annum payable in 180 equal monthly installments of . b. Early Retirement: The Employee's Accrued Benefit (as defined in Paragraph 1.a. of the Plan) reduced in accordance with Paragraph 3.b. of the Plan. c. Late Retirement: The benefit payable in a. above as adjusted pursuant to Paragraph 3.c. of the Plan. d. Termination Benefit: The Employee's Accrued Benefit payable as provided in Paragraph 4.c. of the Plan. e. Disability Benefit. Determined in accordance with Paragraph 4.b. of the Plan. f. Commencement of Retirement Benefits. Thirty (30) days prior to Employee's Normal Retirement Date or Early Retirement Date application may be made to the Committee to have such Retirement Benefits commence on the first day of the month following the Normal or Early Retirement Date. 4. Beneficiary(ies): a. The Employee hereby designates as primary beneficiary or beneficiaries to receive any benefits payable after the death of Employee: Primary Beneficiary(ies): Address & Name Share Relationship Social Security Number b. The Employee designates the following person or persons as successor beneficiary or beneficiaries to receive any benefits payable after the death of Employee and the primary beneficiary(ies): Successor Beneficiary(ies): Address & Name Share Relationship Social Security Number 5. The Employee has read this Plan Agreement and the Plan and is aware of and accepts the terms and conditions set forth in each document. In particular, Employee understands that the benefits payable pursuant to the Plan and the Plan Agreement are unsecured contractual obligations of the Employer and the Employer has no obligation whatsoever to set aside funds in advance for the payment of benefits hereunder. IN WITNESS WHEREOF the parties hereto have hereunto set their hands effective as of the day of , . EMPLOYER: ECKERD CORPORATION AND ITS SUBSIDIARIES ATTEST: - - ------------------------ By: ------------------------- TITLE: ---------------------- WITNESS: EMPLOYEE: - - ----------------------- ---------------------------- Signature ---------------------------- Type or Print Name ---------------------------- ---------------------------- Address of Employee EX-15.1 4 LETTER: ACCOUNTANTS' AWARENESS EXHIBIT 15.1 The Board of Directors Eckerd Corporation and Subsidiaries: RE: Registration Statement on Form S-3 (No. 33-50223) Registration Statement on Form S-8 (No. 33-49977) Registration Statement on Form S-8 (No. 33-50755) Registration Statement on Form S-3 (No. 33-56261) Registration Statement on Form S-8 (No. 33-60175) With respect to the above referenced registration statements, we acknowledge our awareness of the incorporation by reference therein of our report dated June 14, 1996 related to our review of interim financial information, which report was included in the Form 10-Q of Eckerd Corporation and Subsidiaries for the thirteen weeks ended May 4, 1996. Pursuant to Rule 436(c) under the Securities Act of 1933, such report is not considered a part of a registration statement prepared or certified by an accountant or a report prepared or certified by an accountant within the meaning of Sections 7 and 11 of the Act. KPMG PEAT MARWICK LLP Tampa, Florida June 14, 1996 EX-27 5 FDS EXHIBIT 27
5 0000031364 ECKERD CORPORATION 1,000 3-MOS FEB-01-1997 FEB-04-1996 MAY-04-1996 8,706 0 91,775 3,000 857,185 958,508 660,071 296,270 1,552,540 583,486 737,472 700 0 0 94,164 1,552,540 1,354,619 1,354,619 1,051,423 1,051,423 236,599 934 15,139 50,524 11,114 39,410 0 0 0 39,410 .55 .55 EPS PRIMARY AND DILUTED REFLECTS THE TWO-FOR-ONE STOCK SPLIT EFFECTED IN THE FORM OF A STOCK DIVIDEND WHICH WAS PAYABLE TO STOCKHOLDERS OF RECORD APRIL 22, 1996 AND PAID ON MAY 13, 1996.
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