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Hannaford Cash Balance Plan

This is an actual contract by Hannaford Brothers.

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Sectors: Retail
Governing Law: United States
Effective Date: January 01, 1998
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Exhibit 10.3


HANNAFORD CASH BALANCE PLAN


(as amended and restated effective January 1, 1998)


Table of Contents


ARTICLE I


Definitions


ARTICLE II


Participation
2.1 Date of Participation
2.2 Participation Requirements
2.3 Transfers Among Affiliated Employers
2.4 Re-employed Former Participant


ARTICLE III


Retirement Dates
3.1 Normal Retirement Date
3.2 Early Retirement Date
3.3 Deferred Retirement Date


ARTICLE IV


Benefit Formulas
4.1 Benefits For Participants Other Than Warehouse Participants


(a) Cash Balance Account
(b) Contribution Credit
(c) Interest Credit
(d) Normal Retirement Benefit
(e) Early Retirement Benefit
(f) Deferred Retirement Benefit
(g) Vested Benefit


4.2 Benefits For Certain Warehouse Participants
4.3 Employment Transfers


ARTICLE V


Retirement at Normal Retirement Date
5.1 Normal Retirement Benefit
5.2 Form of Normal Retirement Benefit
5.3 Qualified Joint and Survivor Annuity
5.4 Disability Benefit


ARTICLE VI


Retirement at Early Retirement Date
6.1 Early Retirement Benefit
6.2 Form of Early Retirement Benefit
6.3 Qualified Joint and Survivor Annuity


ARTICLE VII


Retirement at Deferred Retirement Date
7.1 Deferred Retirement Benefit
7.2 Form of Deferred Retirement Benefit
7.3 Qualified Joint and Survivor Annuity


ARTICLE VIII


Termination of Employment
8.1 Termination of Employment
8.2 Vested Benefit
8.3 Form of Benefit
8.4 Qualified Joint and Survivor Annuity
8.5 Forfeitures


ARTICLE IX


Death Benefits
9.1 Death Before Annuity Starting Date
9.2 Death After Annuity Starting Date
9.3 Designation of Beneficiary
9.4 Qualified Domestic Relations Orders


ARTICLE X


Qualified Joint and Survivor Annuity Election
10.1 Election Period
10.2 Written Explanation
10.3 Additional Information Furnished Upon Request
10.4 Election Not to Receive Qualified Joint and Survivor Annuity
10.5 Qualified Joint and Survivor Annuity
10.6 Spousal Consent


ARTICLE XI


Optional Forms of Benefits
11.1 Early Retirement Benefit - Optional Lump Sum
11.2 Vested Benefit - Optional Lump Sum
11.3 Contingent Annuitant Option
11.4 Five Year Certain and Life Annuity Option
11.5 Life Annuity Option
11.6 Lump Sum Option



ARTICLE XII


Actuarial Assumptions and Lump Sum Distributions
12.1 Actuarial Equivalency Assumptions
12.2 Lump Sum Distributions


ARTICLE XIII


Limitation on Benefits
13.1 Limitation For Defined Benefit Plans
13.2 Adjustments
13.3 Reduction For Less Than Ten (10) Years of Participation or Service
13.4 Adjustment to Dollar Limitation
13.5 Limitation For Defined Benefit Plan and Defined Contribution Plan
13.6 Combining and Aggregating Plans
13.7 Certain Contributions Treated as Annual Additions
13.8 Definitions


ARTICLE XIV


Restriction on Benefits Payable to Certain Participants
14.1 Nondiscriminatory Benefit
14.2 Limits on Annual Payments


ARTICLE XV
Credit For Years of Benefit Service Upon Re-employment Following Receipt
of an Optional Lump Sum Distribution
15.1 Re-employment With Credit For Prior Years of Benefit Service
15.2 Re-employment Without Credit For Prior Years of Benefit Service
15.3 Re-employment With Partial Credit For Prior Years of Benefit
Service


ARTICLE XVI


Top Heavy Provisions
16.1 Top Heavy Requirements
16.2 Minimum Vesting Requirement
16.3 Minimum Benefit Requirement
16.4 Modified Limitation on Annual Additions
16.5 Present Value Factors
16.6 Definitions


ARTICLE XVII


Contributions
17.1 Employer Contributions
17.2 Erroneous Employer Contributions
17.3 Application For Forfeitures
17.4 Trust


ARTICLE XVIII


Retirement Committee
18.1 Appointment of Retirement Committee
18.2 Appointment, Resignation and Removal
18.3 Duties
18.4 Notice to Trustee
18.5 Fiduciary Duties
18.6 Reporting and Disclosure
18.7 Delegation of Ministerial Duties
18.8 Compensation and Reimbursement of Expenses
18.9 Uniformity of Rules and Regulations
18.10 Reliance on Reports
18.11 Multiple Signatures
18.12 Payment of Plan Expenses


ARTICLE XIX


Finance Committee
19.1 Duties
19.2 Fiduciary Duties
19.3 Compensation and Reimbursement of Expenses
19.4 Reliance on Reports
19.5 Multiple Signatures


ARTICLE XX


Claims Procedure
20.1 Filing a Claim For Benefits
20.2 Denial of Claim
20.3 Appeal of Denied Claim
20.4 Decision on Appeal


ARTICLE XXI


Amendment and Termination
21.1 Amendment
21.2 Termination


ARTICLE XXII


Retiree Medical Benefits
22.1 401(h) Account
22.2 Retiree Medical Benefits
22.3 Contributions
22.4 Forfeitures
22.5 Investments
22.6 Reversion to Employer
22.7 Key Employees


ARTICLE XXIII


Inalienability of Benefits; Qualified Domestic Relations Orders
23.1 Inalienability of Benefits
23.2 Qualified Domestic Relations Orders
23.3 Notice
23.4 Representative
23.5 Separate Account
23.6 Determination by Retirement Committee
23.7 Definitions


ARTICLE XXIV


Direct Rollovers
24.1 Eligibility
24.2 Notice
24.3 Election


ARTICLE XXV


Miscellaneous
25.1 Merger or Consolidation of Plan
25.2 Distributions to Minors and Incompetent Persons
25.3 Commencement of Distributions
25.4 No Duplication of Benefits
25.5 Exclusive Benefit
25.6 Employment
25.7 Predecessor Employer Plan
25.8 Governing Law
25.9 Article and Section Headings and Table of Contents
25.10 Delegation of Authority by Subsidiaries
25.11 Directed Payments
25.12 USERRA Requirements
25.13 EPCRS Adjustments


APPENDIX A


APPENDIX B


HANNAFORD CASH BALANCE PLAN


Hannaford Bros. Co. hereby amends and restates the Hannaford Bros. Co. Employees' Retirement Plan (renamed the Hannaford Cash Balance Plan) effective generally January 1, 1998. It is intended that the Plan, as amended and restated, meet all applicable requirements of the Internal Revenue Code of 1986 and the Employee Retirement Income Security Act of 1974 ("ERISA"), as the same may from time to time be amended. The Plan shall, therefore, be interpreted to comply with the applicable terms of the Code and ERISA and all applicable regulations and rulings issued thereunder.


ARTICLE I
Definitions


The following terms, when used herein, shall have the meanings as hereinafter set forth, unless the context indicates otherwise:


1.1 "Accrued Benefit" shall mean, as of any date of reference (and except as otherwise provided in Section 1.11), a Participant's monthly retirement benefit commencing on the first day of the month coinciding with or next following his or her Normal Retirement Date (or, if later, the date of reference) payable in the normal form and in an amount determined in accordance with the Normal Retirement Benefit formula set forth in Article IV. The Accrued Benefit of a Participant whose benefit under the Plan is expressed as a Cash Balance Account shall be determined as of any date of reference prior to his or her Normal Retirement Date by (i) projecting the future value of the Account balance to the Participant=s Normal Retirement Date at the rate interest is credited under Section 4.1(c), and then (ii) converting the projected Account balance to a monthly retirement benefit payable in the form of a life annuity, based on the factors set forth in Section 12.2(a).


1.2 "Actuarial Equivalence," "Actuarial Equivalent," or "Actuarially Equivalent" shall mean equality in value of the aggregate amounts expected to be received under different forms of payment, based on the assumptions set forth in Section 12.1.


1.3 "Affiliated Employer" shall mean any Employer which has adopted the Plan in accordance with Section 1.19 and any other corporation or other business organization if any such Employer and such other corporation or business organization are members of a controlled group of corporations (as defined in Section 414(b) of the Code), trades or businesses (whether or not incorporated) which are under common control (as defined in Section 414(c) of the Code) or an affiliated service group (as defined in Section 414(m) of the Code).


1.4 "Annuity Starting Date" shall mean the first day of the first month for which an amount is payable as an annuity or, in the case of an optional lump sum benefit, the first day on which such lump sum is payable.


1.5 "Average Annual Compensation" shall mean a Participant's annual Compensation averaged over the sixty (60) consecutive calendar months of his or her employment for which such average is the highest during the one hundred and twenty (120) consecutive calendar month period immediately prior to the date as of which such Participant's Average Annual Compensation is to be determined. If a Participant has fewer than sixty (60) calendar months of employment during such period, such average shall be taken over all of his or her calendar months of employment. Any calendar month during such sixty (60) consecutive month averaging period (or during all calendar months of employment, if shorter) in which a Participant receives no Compensation shall be disregarded in determining his or her Average Annual Compensation.


The Average Annual Compensation of a Disabled Participant shall be determined based on the assumption that such Participant's rate of Compensation during the Plan Year immediately preceding commencement of his or her disability continued during the period of such disability.


1.6 "Beneficiary" shall mean the person or persons designated by a Participant as provided in Section 9.3 to receive any death benefits payable under the Plan following the death of a Participant.


1.7 "Board of Directors" shall mean the Board of Directors of Hannaford Bros. Co. or any corporation into which Hannaford Bros. Co. may be merged or consolidated.


1.8 "Break in Service" shall have the meaning set forth in subsection (a), (b) or (c) below, whichever is applicable:


(a) In the case of an hourly Employee other than a Driver Employee or any full-time Employee of Progressive Distributors, Inc. who is employed as a truck driver, the term "Break in Service" with regard to Plan Years commencing prior to January 1, 1980, shall have the meaning under the terms of the Plan as in effect on December 31, 1979, and with regard to Plan Years commencing on or after January 1, 1980, shall mean a Plan Year in which such Employee is not credited with more than four hundred and thirty-five (435) Hours of Service on account of any one or more of the following:


(i) discharge from employment;


(ii) voluntary termination of employment;


(iii) effective December 12, 1994, failure to return to the employ of an Affiliated Employer prior to the expiration of the period entitling such Employee to re-employment rights under the Uniformed Services Employment and Reemployment Rights Act of 1994 after a period of "service in the uniformed services" as defined in such Act;


(iv) failure to return to the employ of an Affiliated Employer upon the expiration of any period of absence due to sickness, accident or disability for which such an Employee is entitled to receive benefits under any welfare plan sponsored by an Affiliated Employer; or


(v) failure to return to the employ of an Affiliated Employer when recalled following a temporary period of layoff for a period not to exceed twelve (12) months.


(b) In the case of a Driver Employee or any full-time Employee of Progressive Distributors, Inc. who is employed as a truck driver, the term "Break in Service" with regard to Plan Years commencing prior to January 1, 1983, shall have the meaning applicable to other hourly Employees in accordance with subsection (a) of this Section and with regard to Plan Years commencing on or after January 1, 1983, shall have the meaning applicable to salaried and salaried nonexempt Employees in accordance with subsection (c) of this Section.


(c) In the case of a salaried or salaried nonexempt Employee, the term "Break in Service" shall mean a Plan Year in which such Employee is not credited with more than five hundred (500) Hours of Service on account of any one or more of the reasons set forth in paragraphs (i) through (v) of subsection (a) of this Section.


1.9 "Cash Balance Account" or "Account" shall mean the account established pursuant to Section 4.1.


1.10 "Code" shall mean the Internal Revenue Code of 1986, as amended.


1.11 "Compensation" shall mean the basic compensation paid, before any reduction pursuant to a deferral election under a Code Section 401(k) plan or a benefit election under a Code Section 125 plan sponsored by an Employer, to a Participant by an Employer, including compensation for incentive hours and excluding reimbursements or other expense allowances, fringe benefits (cash and noncash), moving expenses, deferred compensation, welfare benefits, unguaranteed overtime pay, bonuses and other irregular payments.


Notwithstanding the preceding sentence to the contrary, for benefits accruing in Plan Years beginning on or after January 1, 1989, the annual Compensation of any Participant in excess of Two Hundred Thousand Dollars ($200,000), or such higher amount as the Secretary of the Treasury may prescribe, shall not be taken into account under the Plan; and for benefits accruing in Plan Years beginning on or after January 1, 1994, the annual Compensation of any Participant in excess of One Hundred Fifty Thousand Dollars ($150,000), or such higher amount as the Secretary of the Treasury may prescribe, shall not be taken into account under the Plan. In the event Compensation is determined for a period which contains fewer than twelve (12) calendar months, the annual Compensation limit shall be an amount equal


to the annual Compensation limit for the calendar year in which the period begins multiplied by a fraction, the numerator of which is the number of calendar months in the period and the denominator of which is twelve (12).


The rules of this paragraph are effective January 1, 1994. If the Secretary of the Treasury increases the annual Compensation limit for a calendar year, the increased limit shall apply to any period beginning in such calendar year over which Compensation is determined ("determination period"). If Compensation for a prior determination period is taken into account for a determination period beginning on or after January 1, 1994, such Compensation shall be subject to the annual Compensation limit (determined under this Section) in effect for such prior determination period. For purposes of this paragraph, the annual Compensation limit is $150,000 for determination periods beginning before January 1, 1994.


The average percentage of total compensation (as defined in Treasury Regulation Section 1.414(s)-1(d)(3)(ii)) included in the Compensation of Participants who are highly compensated employees (within the meaning of section 414(q) of the Code) as a group shall not exceed by more than a de minimis amount the average percentage of total compensation included in the Compensation of all other Participants as a group. For purposes of this Section "de minimis amount" shall mean (5%).


Effective January 1, 1994, the Accrued Benefit of a Section 401(a)(17) Participant shall be equal to the greater of:


(a) the Participant's Accrued Benefit as of the date such benefit is determined; or


(b) the sum of:


(i) the Participant's Accrued Benefit based on his or her average annual compensation, covered compensation and years of benefit service as of December 31, 1993, determined under the terms of the Plan in effect on that date; and


(ii) the Participant's Accrued Benefit (disregarding Years of Benefit Service prior to January 1, 1994) as of the date such benefit is determined.


"Section 401(a)(17) Participant" means a Participant whose Accrued Benefit determined on or after January 1, 1994, is based on annual Compensation for a period beginning before that date in excess of One Hundred Fifty Thousand Dollars ($150,000). In the event the Plan is amended after January 1, 1994, to add an optional form of benefit (within the meaning of Treasury Regulation Section 1.401(a)(4)-4(e)), such benefit, if subsidized, shall not be available to a Section 401(a)(17) Participant.


1.12 "Disabled Employee" shall mean an Employee whose service with an Employer is terminated on account of a nonwork-related disability for which he or she receives Social Security disability income benefits.


1.13 "Disabled Participant" shall mean a Participant who is a Disabled Employee.


1.14 "Driver Employee" shall mean an Employee who is employed as a truck driver by Hannaford Bros. Co. or any subsidiary thereof and whose employment was governed prior to January 1, 1995, by a collective bargaining agreement.


1.15 "Driver Participant" shall mean a Participant who, as of the date of his or her retirement or separation from service, is a Driver Employee.


1.16 "Effective Date" of this Amendment and Restatement shall mean January 1, 1998, except as otherwise specifically provided.


1.17 "Eligibility Computation Period" shall mean the initial twelve (12) consecutive month period beginning with the date on which an Employee first performs an Hour of Service and thereafter each Plan Year commencing with the Plan Year which includes the first anniversary of the Employee's Employment Commencement Date.


In the case of an hourly Employee other than a Driver Employee or any full-time Employee of Progressive Distributors, Inc. who is employed as a truck driver, if such an Employee is credited with the number of Hours of Service determined in accordance with (a) or (b) below, whichever is applicable, in his or her initial Eligibility Computation Period and in the Plan Year which includes the first anniversary of his or her Employment Commencement Date, he or she shall be credited with two (2) Years of Participation Service:


(a) with regard to initial Eligibility Computation Periods and Plan Years commencing on or after January 1, 1980, eight hundred and seventy (870) Hours of Service; and


(b) with regard to initial Eligibility Computation Periods and Plan Years commencing before January 1, 1980, one thousand (1,000) Hours of Service.


In the case of a Driver Employee or any full-time Employee of Progressive Distributors, Inc. who is employed as a truck driver, if such an Employee is credited with the number of Hours of Service determined in accordance with (a), (b), or (c) below, whichever is applicable, in his or her initial Eligibility Computation Period and in the Plan Year which includes the first anniversary of his or her Employment Commencement Date, he or she shall be credited with two (2) Years of Participation Service:


(a) with regard to initial Eligibility Computation Periods and Plan Years commencing on or after January 1, 1983, one thousand (1,000) Hours of Service;


(b) with regard to initial Eligibility Computation Periods and Plan Years commencing on or after January 1, 1980, but prior to January 1, 1983, eight hundred and seventy (870) Hours of Service; and


(c) with regard to initial Eligibility Computation Periods and Plan Years commencing before January 1, 1980, one thousand (1,000) Hours of Service.


In the case of a salaried or salaried nonexempt Employee, if such an Employee is credited with one thousand (1,000) Hours of Service in both his or her initial Eligibility Computation Period and the Plan Year which includes the first anniversary of his or her Employment Commencement Date, he or she shall be credited with two (2) Years of Participation Service.


In measuring completion of a Year of Participation Service upon an Employee's return after a Break in Service, the term "Eligibility Computation Period" shall mean the twelve (12) consecutive month period beginning on the Employee's Re-employment Commencement Date and, where necessary, Plan Years beginning with the Plan Year which includes the first anniversary of the Employee's Re-employment Commencement Date.


1.18 "Employee" shall mean any individual employed by an Employer, excluding -


(a) Leased Employees;


(b) any person who is classified by the Employer (without regard to the classification of such person by a third party) as an independent contractor; and


(c) prior to January 1, 1998, any individual employed in the Southeast Division, unless such individual commenced participation prior to being transferred to such division.


1.19 "Employer" shall mean Hannaford Bros. Co. or any other corporation identified on Schedule A which has adopted the Plan, and "Employers" shall mean Hannaford Bros. Co. and each such other corporation. If an Employer is a member of a group of employers which constitutes a controlled group of corporations (as defined in Section 414(b) of the Code), trades or businesses (whether or not incorporated) under common control (as defined in Section 414(c) of the Code) or an affiliated service group (as defined in Section 414(m) of the Code), all such employers shall be considered a single employer to the extent required by Sections 414(b), 414(c), 414(m) and 414(o) of the Code. For purposes of applying the limitations of Article XIII, Section 414(b) and 414(c) of the Code shall be applied with the modification provided by Section 415(h).


1.20 "Employment Commencement Date" shall mean the first day for which an Employee is entitled to be credited with an Hour of Service.


1.21 "ERISA" means the Employee Retirement Income Security Act of 1974, as amended from time to time.


1.22 "Finance Committee" shall mean the Finance Committee of the Board of Directors.


1.23 "Hour of Service" shall have the meaning set forth in subsection (a), (b) or (c) below, whichever is applicable:


(a) In the case of an hourly Employee, other than a Driver Employee or any full-time Employee of Progressive Distributors, Inc. who is employed as a truck driver, the term "Hour of Service":


(i) with regard to Plan Years commencing prior to January 1, 1980, shall mean an Hour of Service under the terms of the Plan as in effect on December 31, 1979;


(ii) with regard to Plan Years commencing on or after January 1, 1981, shall mean, for purposes of computing Years of Participation Service and Years of Vesting Service (aa) each hour for which such an Employee is paid, or entitled to payment, by an Affiliated Employer for the performance of duties during the applicable computation period and (bb) each hour for which back pay, irrespective of mitigation of damages, is either awarded or agreed to by an Affiliated Employer, provided the same Hours of Service shall not be credited both under this clause (bb) and the preceding clause (aa); and shall mean, for purposes of computing Years of Benefit Service, (aa) each hour for which such an Employee is paid, or entitled to payment, by an Employer for the performance of duties during the applicable computation period and (bb) each hour for which back pay, irrespective of mitigation of damages, is either awarded or agreed to by an Employer, provided the same Hours of Service shall not be credited both under this clause (bb) and the immediately preceding clause (aa).


(iii) with regard to the Plan Year commencing January 1, 1980, shall have the meaning set forth in (i) or (ii) above, whichever results in such an Employee being credited with the greater number of Hours of Service during such Plan Year;


(iv) with regard to any Plan Year in which such an Employee sustains one or more injuries as a result of which he or she is incapacitated for work and entitled to compensation under applicable workers compensation laws, such Employee shall be credited with four hundred and thirty-six (436) additional Hours of Service if such Plan Year commenced on or after January 1, 1980, or five hundred and one (501) additional Hours of Service if such Plan Year commenced before January 1, 1980, unless such


Employee is otherwise credited with at least eight hundred and seventy (870) Hours of Service in such Plan Year if such Plan Year commenced on or after January 1, 1980, or at least one thousand (1,000) Hours of Service in such Plan Year if such Plan Year commenced before January 1, 1980. If an Employee is not credited with additional Hours of Service in the Plan Year in which he or she sustains one or more such injuries by reason of the number of Hours of Service otherwise credited to him or her during such year and if such Employee's incapacity to work continues into the next succeeding Plan Year, he or she shall, with respect to such succeeding Plan Year, be credited with four hundred and thirty-six (436) additional Hours of Service if such Plan Year commenced on or after January 1, 1980, or five hundred and one (501) additional Hours of Service if such Plan Year commenced before January 1, 1980; provided, in no event shall more than four hundred and thirty-six (436) additional Hours of Service be credited pursuant to this paragraph in any Plan Year commencing on or after January 1, 1980, or five hundred and one (501) additional Hours of Service in any Plan Year commencing before January 1, 1980; or


(b) In the case of a Driver Employee or any
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