LOWE S COMPANIES SEVERANCE PAY PLAN

Transcription

1 LOWE S COMPANIES SEVERANCE PAY PLAN Section 1. Nature of the Plan. The purpose of this Plan is to provide transitional income for eligible employees of Lowe s Companies, Inc. ( Lowe s or the Company ), or any participating Affiliated Company, as defined in this Plan, for the events described herein. The Plan is intended to be unfunded and all severance pay benefits under this Plan shall be made from the general assets of the Company. Any person who is entitled to severance pay benefits under this Plan shall not have any claim against specific assets of the Company and shall be only a general creditor of the Company. This Summary Plan Description ( SPD ) reflects the provisions of the Plan in effect as of September 1, 2010, and also serves as the Plan document. This Plan and SPD supersede all prior written or unwritten severance pay plans, practices, or programs offered or established by the Employer. If the Plan is amended, copies of the SPD can be obtained from the Plan Administrator. Section 2. Definitions. In this Plan, whenever the context so indicates, the singular or plural number shall be deemed to include the other. Unless otherwise indicated, section references shall be to this Plan. Where the following terms appear hereafter in this Plan, they shall have the meanings indicated below: Affiliated Company... Aviation Any corporation that is a member of a controlled group of corporations (as defined in Internal Revenue Code Section 414(b)) which includes Lowe s; any trade or business (whether or not incorporated) which is under common control (as defined in Internal Revenue Code Section 414(c)) with Lowe s; any organization (whether or not incorporated) which is a member of an affiliated service group (as defined in Internal Revenue Code Section 414(m)) which includes Lowe s; and any other entity required to be aggregated with Lowe s pursuant to Treasury regulations under Internal Revenue Code Section 414(o). Affiliated Company also includes any parent corporation or subsidiary corporation (within the meaning of Internal Revenue Code Section 424) of the Company, including a corporation or limited liability company that becomes an Affiliated Company after the adoption of this Plan. The Company s aviation operations, functions, employees and locations.

2 Base Pay... The employee s regular straight time pay for the last regularly scheduled workweek immediately preceding the date of the employee s Separation from Service. Base Pay does not include overtime pay; shift premiums; bonuses; commissions; incentives; reimbursements or other expense allowances; fringe benefits (cash and noncash); moving or relocation expenses or allowances; cost-of-living adjustments or cost-ofliving allowances (COLAs); market incentives; equity, stock or restricted stock grants or options; and Company matching contributions to the Lowe s 401(k) Plan, Benefit Restoration Plan, Cash Deferral Plan, or any other tax-qualified or nontax-qualified retirement, savings or pension plan sponsored by Lowe s or welfare benefits. Central Purchasing Office or CPO The Company s operations, facilities, functions and employees for the coordination of installed sales, but only to the extent those operations, facilities, functions and employees are outside the Company s store locations. Company... Customer Support Center Business Unit or CSC... Disability. Lowe s Companies, Inc., a North Carolina corporation, and its direct or indirect wholly-owned subsidiaries (including wholly-owned limited liability companies). The Company s corporate operations, functions, employees and locations in the United States of America, including all corporate employees based in corporate or supply chain locations in the United States of America but outside of the Company s headquarters in Mooresville and North Wilkesboro, North Carolina (i.e., in the field or fieldbased ). For purposes of this Plan, the Customer Support Center Business Unit includes Aviation, the Central Purchasing Office, and Information Technology. The Customer Support Center Business Unit does not include the Distribution Center Business Unit or any store locations and employees. In accordance with Treasury Regulations 1.409A-3(a), a medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than six months, where such impairment causes the employee to be unable to perform the duties of his or her position of employment or any substantially similar position of employment

3 Distribution Center Business Unit or DC The Company s supply chain operations, functions, employees and locations in the United States of America, including, but not limited to, Regional Distribution Centers, Flatbed Distribution Centers, Millwork Distribution Centers, and Specialty Distribution Centers. The Distribution Center Business Unit excludes the Customer Support Center Business Unit and all store locations and employees. For purposes of this Plan, the Distribution Center Business Unit does not include any operations, functions, employees or locations of Marble and Granite Works, LLC. Employer... Information Technology Minimum Scheduled Benefit. Participant... Plan... Plan Administrator... Separation from Service.. Severance Pay... Successor Company... Lowe s Companies, Inc. and any participating Affiliated Company. The Company s information technology, information security, and information technology support operations, functions, employees and locations. The benefit described in Section 7 of this Plan. Any employee who has met the applicable eligibility requirements of Section 3. The Lowe s Companies Severance Pay Plan, as set forth herein, and as it may be amended from time to time. The Senior Vice President, Employee Rewards and Services, of the Company, or any successor position to the Senior Vice President, Employee Rewards and Services. In accordance with Treasury Regulations 1.409A-1(h) and 1.409A-3(a), a permanent change in the relationship between the Employer and employee occurring as of the date that the Employer and employee reasonably anticipate that the employee will not perform any further services for the Employer. A benefit payable to an eligible Participant under and pursuant to the terms and provisions of this Plan. Any business entity acquiring all or a portion of the assets of a business operated by the Company, or any business entity - 3 -

4 designated by the Plan Administrator as such, for the purposes of this Plan. Term of Service Benefit United States of America.. Year of Service... The benefit described in Section 5 of this Plan. The fifty (50) States and the District of Columbia. A period of eligible employment for a complete year consisting of twelve months. An employee s Years of Service will be based on the employee s most recent period of continuous eligible employment (a prior period of employment will not be considered) and will be determined according to records in the PeopleSoft system or its equivalent. Any period of employment shorter than a full year (twelve full months) shall be rounded up or down to the previous or next full year, using conventional rounding logic. For example, eligible employment with an Employer for three years and eleven months will count as four Years of Service. An employee with three years and five months will count as three Years of Service. Years of Service as an ineligible employee are not counted, although the Plan Administrator retains the discretion to include in calculating an employee s Years of Service any continuous period of employment with an Employer outside the United States of America. Section 3. Eligibility and Participation. The following employees are eligible to participate in the Plan: (a) Non-temporary, full-time salaried or hourly employees of an Employer, in a position below Senior Vice President, assigned to work in an Employer s Customer Support Center Business Unit, and employed in such capacity for a minimum of six months prior to Separation from Service; and (b) Non-temporary, full-time salaried employees of an Employer, in a supervisory position or higher, assigned to work in an Employer s Distribution Center Business Unit, and employed in such capacity for a minimum of six months prior to Separation from Service. For the purposes of this Plan, a supervisory position in an Employer s Distribution Center Business Unit is equivalent in level to the position named Coach, or any subsequent named position which replaces the Coach position in the future. Employees assigned to work regularly in any location outside the United States of America are not eligible to participate in the Plan. Members of any collective bargaining unit are not eligible to participate in the Plan. Part-time, temporary employees, seasonal - 4 -

5 employees, leased employees and individuals classified by an Employer as nonemployees are not eligible to participate even if they could qualify as, or are subsequently determined to be, common law employees. Section 4. Eligibility for Severance Pay. Any eligible employee who experiences an involuntary Separation from Service by unilateral action of an Employer after September 1, 2010, will be eligible for Severance Pay. Employees experiencing an involuntary Separation from Service for cause and/or for violating a Company policy and Separations from Service due to death, Disability, retirement, or failure or inability to return from a leave of absence are not eligible for Severance Pay. Additionally an employee who experiences a Separation from Service will not be eligible for Severance Pay if any of the following applies: (a) The employee is offered employment with an Employer or any Affiliated Company, a buyer, or any other Successor Company whether or not the employee accepts the offer and whether or not the employment is comparable; (b) The employee accepts an engagement with an Employer or an Affiliated Company as an independent contractor, leased employee, or provides services to an Employer or an Affiliated Company pursuant to a contract for services on a substantially full time, non-temporary basis (as determined at the time of the employee s Separation from Service); or (c) A separate and individualized written agreement exists between the Company and the employee providing benefits contingent upon the employee s experiencing a Separation from Service and which makes available to the employee benefits differing from those available under and through this Plan. Section 5. Severance Pay Benefits Term of Service Benefit. Except as provided below in Section 7 Minimum Severance Pay Benefits, a Participant under this Plan who is eligible to receive Severance Pay will receive the approximate equivalent of one week s Base Pay after six months of service, and will receive an additional week of Base Pay for every completed Year of Service. Further, and except as provided below under Section 6 Maximum Severance Pay Benefits, a Participant eligible to receive Severance Pay who has completed fifteen Years of Service will receive sixteen weeks Base Pay (representing fifteen Years of Service) plus two weeks Base Pay for each completed Year of Service over fifteen years. Section 6. Maximum Severance Pay Benefits. Notwithstanding the Severance Pay Benefits described in Section 5, the maximum Term of Service Benefit payable to any Participant eligible for Severance Pay under the Plan is 52 weeks Base Pay

6 Section 7. Minimum Severance Pay Benefits Minimum Scheduled Benefit. A Participant under this Plan who is eligible to receive Severance Pay will be eligible to receive the greater of the Term of Service Benefit or the Minimum Scheduled Benefit as determined according to the following schedule. The Minimum Scheduled Benefit is a substitute for the Term of Service Benefit. Minimum Scheduled Benefit 4 weeks Base Pay 5 weeks Base Pay 6 weeks Base Pay 8 weeks Base Pay Positions and Grades CSC employees in positions graded A04 through A10, T01 through T02 for Aviation positions. CPO employees in positions graded A04 through A10. CSC employees in positions graded E03 through E06, M03 through M06 for Information Technology positions, EG3 for field-based positions, T03 through T07 for Aviation positions. DC employees in positions graded D03 through D05. CPO employees in positions graded C03 through C06. CSC employees in positions graded E07 and E08, M07, M08 and M09 for Information Technology positions, T08 through T10 for Aviation positions. DC employees in positions graded D06 through D08. CPO employees in positions graded C07 and C08. CSC employees in positions graded E09 through E14, T11 through T14 for Aviation positions. DC employees in positions graded E09 through E11. CPO employees in positions graded E09 through E11. Section 8. Transition Assistance. Every Participant eligible to receive Severance Pay under this Plan will be eligible to receive, in addition to the Severance Pay, a transition assistance payment equal to $ per week of Base Pay awarded under this Plan. For instance, if a Participant is eligible to receive Severance Pay equal to five weeks Base Pay, then the Participant will also be eligible to receive a transition assistance payment of $ ($ multiplied by five). Section 9. Employee Insurance and Welfare Benefits, Pension Service. All employee insurance and welfare benefits and pension service (including eligibility to contribute salary deferrals to or to receive employee matching contributions under the Lowe s 401(k) Plan and Benefit Restoration Plan) will end on the date of the Participant s Separation from Service except as otherwise provided in those benefit plans

7 Section 10. Additional Severance Benefits. A Participant is eligible to receive Severance Pay under this Plan may, in the sole and exclusive discretion of the Plan Administrator, be provided with additional severance benefits, including, but not limited to, outplacement assistance and other consideration. The Plan Administrator has the discretion to decide the nature and extent of any such additional severance benefits, and the Plan Administrator or its delegate will communicate to the Participant in writing any such additional benefits. A Participant is not eligible for any additional severance benefit not communicated in writing to the Participant by the Plan Administrator or its delegate. Section 11. Limitations on Severance Benefits. As a condition to receiving Severance Pay under this Plan, on or before ninety (90) days after the date of the Participant s Separation from Service, a Participant must sign and return to the Plan Administrator a full general release of all claims (the Release ) and not revoke the Release during any revocation period required by applicable law. The Plan Administrator will provide the Participant with the Release. The Plan Administrator may, however, modify the form of the Release from time to time, and the proper form and content of the Release shall be determined in the sole discretion of the Plan Administrator. Participants who do not wish to sign, or otherwise fail to sign and return timely to the Plan Administrator (on or before ninety (90) days after the date of the Participant s Separation from Service), or revoke the Release will not receive Severance Pay or any other benefit under this Plan. Any Participant who is eligible to receive Severance Pay and who is rehired by an Employer before receiving Severance Pay, or rehired during the period while he or she is receiving Severance Pay, will not be eligible for any further benefits. Upon subsequent Separation from Service, such Participant shall be eligible to receive the Severance Pay lost as a result of reemployment, if any, and any additional Severance Pay earned under the Plan following reemployment. Benefits under this Plan will also be reduced by the amount of any other severance benefits required to be paid by the Employer under, or any payment(s) made by an Employer in lieu of notice as may be required by, federal, state or local law. Section 12. How Benefits are Paid. The normal form of payment of Severance Pay under this Plan is a lump sum payment to the Participant on the fourteenth business day following the date of the full execution of the Release. If the Participant subsequently revokes his or her acceptance of the Release (by, for instance, commencing a civil action against any released party on any of the release claims), the Participant agrees to forfeit any unpaid benefits under this Plan and to repay all benefits to the Employer, including, but not limited to, holding the value of benefits paid to the Participant in constructive trust for the benefit of the Employer

8 All benefits paid under this Plan will be subject to all employment and income tax withholding and any other required withholdings. Notwithstanding the foregoing, in no event will payment of any nonqualified deferred compensation within the meaning of Internal Revenue Code 409A(d)(1) be made to a Participant who is a specified employee within the meaning of Internal Revenue Code Section 409A(a)(2)(B)(i) and the regulations thereunder, prior to the date which is six (6) months after such Participant s Separation from Service within the meaning of Internal Revenue Code Section 409A and the regulations thereunder. Section 13. Acts that May Cause Benefits Under the Plan to End. As a condition to a Participant s receipt and retention of any of the benefits under this Plan, the Participant must return all Employer property that is in the Participant s possession, custody or control. This property includes all materials, documents, plans, records, data, or papers or any copies of such documents which in any way relate to the Employer s affairs. This property further includes all tools, telephones, computers, vehicles, credit cards, manuals and any money due to the Employer. As a condition to the receipt and retention of any of the benefits under this Plan, the Participant agrees not to disclose, reveal or release to any third party any technical information, trade secrets or other proprietary information of the Employer. The Participant further agrees not to solicit business from any of the Employer s customers in competition with the Employer. If the Plan Administrator determines the Participant is engaging in or has engaged in activities that violate these provisions, it may, in its discretion, terminate the severance benefits the Participant is eligible to receive under the Plan and may initiate proceedings to recover any payment the Participant received. Section 14. Plan Administration. The Plan Administrator shall have complete and exclusive discretion and authority to administer all aspects of this the Plan. The Plan Administrator s authority shall include the exclusive discretionary authority to construe and interpret the provisions of the Plan and to determine all questions arising in connection with the administration of the Plan, including, but not limited to, questions regarding eligibility for or the level of benefits payable under the Plan

9 Section 15. Claims Procedure. If a Participant has any complaint or claim concerning any aspect of the operation or administration of the Plan, he or she must submit the claim to the Plan Administrator. Claims must be submitted in writing directly to the Plan Administrator and should include a statement of the relief requested and the reasons the relief should be granted. Claims must be submitted within two (2) years of a claimant s Separation from Service. Claimants should include any documentary or other evidence which they believe support the claim. If a claim is denied in whole or in part, the Plan Administrator will send written notice of the decision within ninety (90) days of the date the claim was received. This 90- day period may be extended for an additional ninety (90) days by written notice from the Plan Administrator. If there is no response to the claim within the 90-day period(s), the claim will be deemed denied and the claimant may request review by the Plan Administrator. If a claim is denied in whole or in part or if the claimant receives no response to the claim, the claimant may appeal the denial to the Plan Administrator in writing within sixty (60) days of receipt of written notice of denial or sixty (60) days of the expiration of the 90-day response period. In pursuing the appeal, the claimant should submit all evidence and arguments in favor of the claim in writing. The Plan Administrator will make a decision on review within sixty (60) days of receipt of the request for review, unless special circumstances require an extension of time. In that case a decision will be rendered as soon as possible, but not later than 120 days after receipt of the request for review. The Plan Administrator will furnish written notice of the extension to the claimant before the end of the original 60-day period. The decision on review will be made in writing. No legal action to recover benefits under this Plan may be commenced without prior exhaustion of this administrative claim and review procedure, and no legal action to recover benefits under this Plan may be commenced later than two years from the date of the decision on review (or if no decision is furnished within 120 days of receipt of the request for review, the 120th day after receipt of the request for review). Section 16. Miscellaneous. A Participant cannot assign, pledge, or otherwise alienate any rights or benefits payable under the Plan prior to receipt of those benefits. The Plan will not be liable for or subject to the debts, garnishments or other obligations of any Participant eligible for benefits under this Plan

10 Section 17. Plan Amendment or Termination. The Company reserves the right to amend or terminate the Plan at any time, in any manner and for any reason. Termination or amendment may be prospective or retroactive, as deemed appropriate by the Company. Section 18. Governing Law. The provisions of this Plan shall be construed and interpreted in accordance with the laws of the State of North Carolina, except to the extent such laws are superseded by the Employee Retirement Income Security Act of 1974, as amended ( ERISA ). Section 19. Compliance with Code Section 409A. Nothing in this Plan shall operate or be construed to cause the Plan to fail to comply with the requirements of Internal Revenue Code Section 409A and, to the extent applicable, it is intended that the Plan comply with the provisions of Internal Revenue Code Section 409A and shall be administered in a manner consistent with that intent. Any provision of this Plan that would cause the Plan or any payment made hereunder to fail to satisfy Internal Revenue Code Section 409A shall have no force and effect until amended by the Company to comply with Internal Revenue Code Section 409A (which amendment may be retroactive to the extent permitted by Internal Revenue Code Section 409A) and may be made by the Company without the consent of any Participant. Section 20. ERISA Information About the Plan. Name of Plan... The full name of the Plan is the Lowe s Companies Severance Pay Plan. The Plan is a component of the Lowe s Welfare Plan. Plan Identification No Plan Sponsor Lowe s Companies, Inc Lowe s Boulevard Mooresville, NC Employer Identification Number (EIN) for Plan Sponsor Type of Plan The Plan is an employee welfare benefit plan as defined in ERISA Section 3(1) and a severance pay plan as defined in 29 C.F.R (b). Type of Administration Self-administration by plan sponsor

11 Funding The Plan is funded solely by the plan sponsor and its Affiliated Companies. Benefits under the Plan are paid as needed for the general assets of the plan sponsor and its Affiliated Companies. Claims Administration Plan Administrator. Agent for Service of Process. Plan Year Lowe s Companies, Inc. Attn: Senior Vice President, Employee Rewards and Services 1000 Lowe s Boulevard Mooresville, NC Telephone (704) The Senior Vice President, Employee Rewards and Services, for the Lowe s Companies, Inc. is the Plan Administrator within the meaning of Section 3(16) of ERISA. The Plan Administrator s address is the same as Claims Administration above. General Counsel Lowe s Companies, Inc Lowe s Boulevard Mooresville, NC The Plan Year is the calendar year. Statement of ERISA Rights The following statement is required by federal law and regulation. All participants in the Lowe s Companies Severance Pay Plan are entitled to certain rights and protections under the Employee Retirement Income Security Act of 1974 (ERISA). ERISA provides that all plan participants shall be entitled to: Receive Information about the Plan and Benefits Specifically, ERISA entitles all plan participants to: Examine, without charge, at the plan administrator s office and at other specified locations, such as work sites, all documents governing the plan, including insurance contracts and a copy of the latest annual report (Form 5500 Series) filed by the plan with the U.S. Department of Labor and available at the Public Disclosure Room of the Employee Benefits Security Administration. Obtain, upon written request to the plan administrator, copies of documents governing the operation of the plan, including insurance contracts and copies of the latest annual report

12 (Form 5500 Series) and updated summary plan description. The administrator may make a reasonable charge for the copies. Receive a summary of the plan s annual financial report. The plan administrator is required by law to furnish each participant with a copy of this summary annual report. Prudent Actions by Plan Fiduciaries In addition to creating rights for plan participants, ERISA imposes duties upon the people who are responsible for the operation of the employee benefit plans. The people who operate the plan, called fiduciaries of the plans, have a duty to do so prudently and in the interest of plan participants and beneficiaries. No one, including your employer, or any other person, may fire you or otherwise discriminate against you in any way to prevent you from obtaining a welfare benefit or exercising your rights under ERISA. Enforce Your Rights If your claim for a welfare benefit is denied or ignored, in whole or in part, you have a right to know why this was done and have the right to obtain copies of documents relating to the decision, without charge, and to appeal any denial, all within certain time schedules. Under ERISA, there are steps you can take to enforce the above rights. For instance, if you request a copy of plan documents or the latest annual report from the plan and do not receive them within 30 days, you may file suit in a federal court. In such a case, the court may require the plan administrator to provide the materials and pay you up to $110 a day until you receive the materials, unless the materials were not sent because of reasons beyond the control of the administrator. If you have a claim for benefits that is denied or ignored, in whole or in part, you may file suit in a state or federal court. In addition, if you disagree with the plan s decision or lack thereof concerning the qualified status of a domestic relations order or a medical child support order, you may file suit in federal court. If it should happen that plan fiduciaries misuse the plans money, or if you are discriminated against for asserting your rights, you may seek assistance from the U.S. Department of Labor, or you may file suit in a federal court. The court will decide who should pay court costs and legal fees. If you are successful the court may order the person you have sued to pay these costs and fees. If you lose, the court may order you to pay these costs and fees, for example, if it finds your claim is frivolous. Assistance with Your Questions If you have any questions about your plan, you should contact the plan administrator. If you have any questions about this statement or about your rights under ERISA, or if you need assistance in obtaining documents from the plan administrator, you should contact the nearest office of the Employee Benefits Security Administration, U.S. Department of Labor, listed in your telephone directory or the Division of Technical

13 Assistance and Inquiries, Employee Benefits Security Administration, U.S. Department of Labor, 200 Constitution Avenue N.W., Washington, D.C You may also obtain certain publications about your rights and responsibilities under ERISA by calling the publications hotline of the Employee Benefits Security Administration