EXHIBIT 10.4

 

THE KROGER CO.

EXECUTIVE DEFERRED COMPENSATION PLAN

 

The Kroger Co. hereby states, originally effective as of December 3, 1993, its
Executive Deferred Compensation Plan established for the purpose of providing to
certain key salaried executive employees who are eligible to participate in the
Plan the option of deferring a portion of future compensation which may become
due from the Company.

 

ARTICLE I

DEFINITIONS

 

For purposes hereof, the following words and phrases shall have the meanings
indicated:

 

1. The “Plan” shall mean The Kroger Co. Executive Deferred Compensation Plan, as
set forth herein, together with all amendments hereto.

 

2. The “Committee” shall mean the Retirement Management Committee.

 

3. The “Compensation Committee” shall mean the Compensation Committee of the
Board of Directors of the Company.

 

4. The “Company” shall mean The Kroger Co., an Ohio corporation, its corporate
successor, and the surviving corporation, resulting from any merger of the
Company with any other corporation or corporations.

 

5. An “Eligible Executive” shall mean any salaried employee of the Company who
is classified as a “Director” or who holds a higher position in the Company and
who may or may not be an officer of the Company.

 

6. “Compensation” shall mean the base salary and any bonus which may be payable
to an Eligible Executive during a calendar year.

 

7. A “Participant” shall mean an Eligible Executive who has elected to defer
payment of all or a portion of his/her Compensation in accordance with the Plan.

 

8. A “Deferral Year” shall mean the calendar year during which, but for an
election to defer under the Plan, the Eligible Executive would actually receive
Compensation from the Company.

 

9. A “Deferral Election Agreement” shall mean the agreement, such as the
attached Exhibit A, executed by the Eligible Executive in order to defer
Compensation in accordance with the provisions of the Plan.

 

10.

A “Deferred Compensation Account” shall mean the bookkeeping account for each
Deferral Year on which the amount of Compensation that is deferred by a

 

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Participant for the Deferral Year shall be recorded and on which interest shall
be credited in accordance with the Plan.

 

11. “Deferred Compensation” shall mean the amount of Compensation and interest
recorded on the Deferred Compensation Account.

 

12. A “Designated Beneficiary” shall mean the person(s) designated by a
Participant on his/her Deferral Election Agreement, and in accordance with the
Plan, to receive payment of the remaining balance of the Deferred Compensation
Account in the event of the death of the Participant prior to Participant’s
receipt of the entire amount of the Deferred Compensation Account.

 

ARTICLE II

DEFERRAL OF COMPENSATION

 

1. Deferral Election. For each Deferral Year, each Eligible Executive shall be
entitled to defer the receipt of payment of the following amounts of
Compensation:

 

  (A) Up to 100% (or an stated dollar amount) of the gross amount of the salary
portion of his/her Compensation otherwise payable during the Deferral Year which
exceeds the sum of the FICA wage base in effect for the Deferral Year and
Internal Revenue Code 125 cafeteria plan contributions for the Deferral Year;
and/or

 

  (B) Up to 100% (or any stated dollar amount) of the bonus portion of his/her
Compensation otherwise payable during the Deferral Year.

 

The Eligible Executive shall make all deferral elections on a Deferral Election
Agreement. The Committee shall establish procedures to make deferral elections
which shall include the times during which the deferral elections can be made
and shall be designed to comply with applicable Internal Revenue Service
requirements.

 

2. Period of Deferral. The Eligible Executive shall, in his/her Deferral
Election Agreement, designate the time and manner in which Deferred Compensation
is to be later paid, all in accordance with the distribution option prescribed
in Article III.

 

Upon making a deferral election pursuant to the foregoing provisions, an
Eligible Executive shall become a Participant of the Plan and shall continue to
be a Participant until all amounts of Deferred Compensation have been paid from
the Plan.

 

3.

Deferred Compensation Account. The amount of Compensation deferred by a
Participant for any Deferral Year shall be credited to a separate Deferred

 

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Compensation Account for that Deferral Year in the name of the Participant. The
Compensation amount shall be credited to the Participant’s Deferred Compensation
Account effective as of the day on which the Compensation otherwise would have
been paid to the Participant. Thereafter, the Participant’s Deferred
Compensation Account for the year shall be credited with interest pursuant to
Section 4 of this Article.

 

4. Crediting of Interest. The Participant’s Deferred Compensation Account for
the Deferral Year shall be credited with interest based upon the interest rate
established for the Deferral Year by the Board of Directors of the Company, or
by the Compensation Committee of the Board of Directors, before the beginning of
the Deferral Year. Subject to future change by the Board of Directors or the
Compensation Committee, such interest rate shall apply to all subsequent years
until the Deferred Compensation is paid out to the Participant or his/her
Beneficiary. For the Deferral year and each subsequent year, the Participant’s
Deferred Compensation Account shall be credited with interest on a quarterly
basis pursuant to the following provisions:

 

  (A) The interest for a calendar quarter shall be credited effective as of the
last day of the calendar quarter.

 

  (B) The interest credited for a calendar quarter shall be in an amount equal
to (i)  1/4 of the applicable interest rate for the Deferral Year, multiplied by
(ii) the average of the beginning and ending balances of the Participant’s
Deferred Compensation Account for the calendar quarter.

 

5. Designated Beneficiary. The Participant shall, in his/her Deferral Election
Agreement, name a Designated Beneficiary with respect to his/her Deferred
Compensation. The Participant shall be entitled to provide for multiple or
contingent persons as Designated Beneficiary. The Participant may change or
revoke his/her designation of a Designated Beneficiary by written notice to the
Committee.

 

6. Continued Right to Defer. An Eligible Executive’s right to defer his/her
Compensation shall cease when he/she retires, dies or otherwise terminates
his/her employment with the Company, or ceases to be an Eligible Executive;
provided, however, that in the case of a transfer to an affiliate of the
Company, the Eligible Executive shall be permitted to defer any Compensation not
yet paid with respect to his/her services for the Company.

 

7. Effect Upon The Kroger Co. Retirement Benefit Plan. Compensation deferred
under the Plan is not taken into account in computing the monthly benefits to
which a Participant and/or Participant’s spouse or beneficiary is entitled under
The Kroger Co. Retirement Benefit Plan.

 

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ARTICLE III

PAYMENT OF DEFERRED COMPENSATION

 

1. Payment Upon Participant’s Termination of Employment. The Participant, in
his/her Deferral Election Agreement, shall specify the time and manner that
Deferred Compensation is to be paid to the Participant upon his/her termination
of employment with the Company (for any reason other than death) from among the
following choices, as irrevocably elected by the Participant:

 

  (A) Immediate (Next Quarter) Lump Sum. The Participant’s Deferred Compensation
Account shall be paid to the Participant in a single cash lump sum payment as
soon as administratively possible after the first day of the calendar quarter
following the date of the Participant’s termination of employment. The amount of
the lump sum payment shall be equal to the balance of the Participant’s Deferred
Compensation Account as of the last day of the calendar quarter preceding the
date of payment to the Participant.

 

  (B) Deferred (Next Year) Lump Sum. The Participant’s Deferred Compensation
Account shall be paid to the Participant in a single cash lump sum payment as
soon as administratively possible after the first day of the calendar year
following the date of the Participant’s termination of employment. The amount of
the lump sum payment shall be equal to the balance of the Participant’s Deferred
Compensation Account as of the last day of the calendar year preceding the date
of payment to the Participant.

 

In the event that the Participant dies before the date of actual payment of the
lump sum payment, the Participant’s Designated Beneficiary shall receive the
Participant’s lump sum payment at the same time and manner prescribed by
subsections (A) and (B).

 

  (C) Immediate (Next Quarter) Quarterly Installments. The Participant’s
Deferred Compensation Account shall be paid to the Participant in quarterly
installment payments (not less than 4 nor more than 40) commencing as soon as
administratively possible after the first day of the calendar quarter following
the date of the Participant’s termination of employment. The amount of each
quarterly installment shall be determined by dividing (i) the balance of the
Participant’s Deferred Compensation Account as of the last day of the calendar
quarter preceding the quarterly installment payment to the Participant, by (ii)
the number of the remaining quarterly installment payments to be made to the
Participant plus the payment currently being made.

 

  (D)

Deferred (Retirement Age) Quarterly Installments. The Participant’s Deferred
Compensation Account shall be paid to the Participant in quarterly installment
payments (not less than 4 nor more than 40)

 

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commencing as soon as administratively possible after the first day of the
calendar quarter following the date of the Participant’s retirement age
specified in his/her Deferral Election Agreement. The amount of each quarterly
installment shall be determined by dividing (i) the balance of the Participant’s
Deferred Compensation Account as of the last day of the calendar quarter
preceding the quarterly installment payment to the Participant, by (ii) the
number of the remaining quarterly installment payments to be made to the
Participant plus the payment currently being made.

 

In the event that the Participant dies before commencement of his/her quarterly
installment payments, or the Participant dies after commencement of his/her
quarterly installment payments, the Participant’s Designated Beneficiary shall
receive the Participant’s quarterly installment payments, at the election of the
Participant in Deferral Election Agreement, either (i) at the same time and
manner prescribed by subsections (C) and (D) as if the quarterly installment
payments were being made to the Participant or (ii) in a single lump sum payment
as soon as administratively possible after the first day of the calendar quarter
following the date of the Participant’s death in an amount equal to the balance
of the Participant’s Deferred Compensation Account as of the last day of the
calendar year preceding the date of payment to the Designated Beneficiary.

 

2. Payment Upon Participant’s Death. The Participant, in his/her Deferral
Election Agreement, shall specify the time and manner that the Deferred
Compensation is to be paid to the Participant’s Designated Beneficiary upon
his/her death during his/her employment with the Company from among the
following choices, as irrevocably elected by the Participant:

 

  (A) Immediate (Next Quarter) Lump Sum. The Participant’s Deferred Compensation
Account shall be paid to the Designated Beneficiary in a single cash lump sum
payment as soon as administratively possible after the first day of the calendar
quarter following the date of the Participant’s death. The amount of the lump
sum payment shall be equal to the balance of the Participant’s Deferred
Compensation Account as of the last day of the calendar quarter preceding the
date of payment to the Designated Beneficiary.

 

  (B) Deferred (Next Year) Lump Sum. The Participant’s Deferred Compensation
Account shall be paid to the Designated Beneficiary in a single cash lump sum
payment as soon as administratively possible after the first day of the calendar
year following the date of the Participant’s death. The amount of the lump sum
payment shall be equal to the balance of the Participant’s Deferred Compensation
Account as of the last day of the calendar year preceding the date of payment to
the Designated Beneficiary.

 

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  (C) Immediate (Next Quarter) Quarterly Installments. The Participant’s
Deferred Compensation Account shall be paid to the Designated Beneficiary in
quarterly installment payments (not less than 4 nor more than 40) commencing as
soon as administratively possible after the first day of the calendar quarter
following the date of the Participant’s death. The amount of each quarterly
installment shall be determined by dividing (i) the balance of the Participant’s
Compensation Account as of the last day of the calendar quarter preceding the
quarterly installment payment to the Designated Beneficiary, by (ii) the number
of the remaining quarterly installment payments to be made to the Designated
Beneficiary plus the payment currently being made.

 

3. Special Death Distribution Provisions. In the event of the death of a
Participant, the Committee must receive written notice and verification of the
death of the Participant and reserves the right to delay distribution of a
Participant’s Deferred Compensation Account to the Participant’s Designated
Beneficiary until the Committee’s receipt and acceptance of such notice and
verification.

 

The distribution options elected by the Participant in Sections 1 and 2 of this
Article shall apply to and be binding upon any subsequent Designated
Beneficiary, including any such subsequent Designated Beneficiary arising by a
change by the Participant or by operation of any contingency provisions of the
Participant’s beneficiary designation.

 

The Participant’s written designation of his/her Designated Beneficiary and its
contingency provisions (if any) shall govern the determination of the proper
person entitled to benefits under the Plan following the death of the
Participant and the Participant’s Designated Beneficiary. However, in the
absence of a specific contingency provision therefor, the following default
provisions shall apply:

 

  (A) In the event that the Participant dies without any Designated Beneficiary,
the Participant’s Designated Beneficiary shall be deemed his/her estate.

 

  (B) In the event that the Participant’s Designated Beneficiary dies after the
Participant and with outstanding benefits under the Plan, such Designated
Beneficiary’s own beneficiary designated in writing to the Committee (or, if
none, his/her estate) shall thereafter be considered the Participant’s
Designated Beneficiary.

 

  (C) In the event that the Participant and the Designated Beneficiary die
simultaneously or under circumstances such that the order of death cannot be
determined, the Participant, for purposes of the Plan, shall be deemed to have
survived the Designated Beneficiary.

 

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In the event the Participant has elected an installment distribution option and
his/her Designated Beneficiary is his/her estate (or, if applicable, the estate
of a Designated Beneficiary), the Participant’s Deferred Compensation Account
shall continue to be made in installment payments consistent with the
installment distribution option to whichever person(s) properly payable under
the estate of the Participant (or, if applicable, the estate of the Designated
Beneficiary).

 

4. Hardship. In instances of unforeseeable emergency arising from causes beyond
the Participant’s control and resulting in severe financial hardship to the
Participant if early withdrawal were not permitted, the Participant may apply in
writing to the Committee for an emergency payment under this Section 4. The
Company shall pay to the Participant that portion of his/her Deferred
Compensation Account(s) under the Plan which shall be necessary to meet such an
emergency. For purposes of this Section 4 such emergency payment shall be made
only in instances of hardship arising from such causes and only in the amount
that the Committee determines is necessary to meet the hardship. Upon such
application, the Participant shall furnish to the Committee such information as
the Participant deems appropriate and as the Company and counsel for the Company
deem necessary and appropriate to make such determination.

 

5. Committee Discretion to Modify Distribution. The Committee reserves the
right, in its sole and absolute discretion, to modify the time and manner of
payment of a Participant’s Deferred Compensation Account, without regard to the
Participant’s Deferral Election Agreement or any provision of the Plan.

 

ARTICLE IV

BENEFIT RELATED PROVISIONS

 

1. Plan Tax and ERISA Status. The Plan is intended to constitute an unfunded,
nonqualified deferred compensation arrangement with respect to section 451 (a)
of the Internal Revenue Code. The Plan is also intended to qualify for the “top
hat” plan exemption of Sections 201, 301 and 401 of the Employee Retirement
Income Security Act of 1974, as amended (ERISA), as a plan which is unfunded and
is maintained by an employer primarily for the purpose of providing deferred
compensation for a select group of management or highly compensated employees.

 

2. Plan Binding. A Participant shall, as a condition to participating in and
receiving benefits under this Plan, be bound by the provisions of this Plan.

 

3.

Fully Vested; Forfeiture For Cause. All amounts held in the Participant’s
Deferred Compensation Account shall be fully vested and nonforfeitable at all
times. Notwithstanding the foregoing, any Participant, regardless of age, who is
separated for theft or embezzlement of Company assets, or for accepting bribes
from suppliers, or who resigns during the pendency or carrying out of an

 

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investigation which established such conduct, shall forfeit 100% of the interest
therefore credited to his/her Deferred Compensation Account.

 

4. Unsecured Obligation. The obligation of the Company to make payments under
the Plan merely constitutes a general, unsecured promise of the Company to make
payments from its general assets. No Participant or Designated Beneficiary shall
have any interest in, or a lien or prior claim upon, any property of the
Company. The right of a Participant or a Designated Beneficiary to receive
benefits under the Plan therefore shall be an unsecured claim against the
general assets of the Company and the Participant and his/her Beneficiary shall
have no greater rights to the general assets of the Company than a general
creditor of the Company.

 

5. Nonalienation of Benefits. The Participant’s benefits under this Plan, or the
current right of a Participant or Designated Beneficiary to receive benefits
under the Plan, shall not be anticipated, alienated, sold, transferred,
assigned, pledged, encumbered, garnished or subjected to any charge or legal
process, by the Participant, Designated Beneficiary or any other person (such as
their creditors), and any attempt to do so shall be null and void and of no
force and effect.

 

6. Tax Withholding. The Company shall have the right to deduct from any payments
under the Plan any taxes required by law to be withheld. The Participant and
Designated Beneficiary shall be responsible for all taxes on amounts paid under
the Plan, except to the extent taxes are withheld thereon.

 

7. Benefit Payments in the Event of Incapacity. If the Committee finds that any
Participant or Designated Beneficiary is unable to care for his/her affairs
because of illness or injury, or is a minor, then any such payment due under the
Plan shall be made, in the discretion of the Committee, to the spouse, child,
brother, sister or parent of such a Participant or Designated Beneficiary, for
his/her benefit, unless a prior claim shall have been made by a duly appointed
guardian or other legal representative.

 

ARTICLE V

ADMINISTRATION

 

1.

Committee Authority. The committee shall be responsible for the general
administration of the Plan and for carrying out the provisions hereof. The
Committee shall have all such powers as may be necessary to carry out the
provisions of the Plan, including the discretionary authority to interpret and
construe all provisions of the Plan and make all benefit determinations under
the Plan, including but not limited to eligibility for and the amount in the
Deferred Compensation Account, crediting and calculation of interest, and all
questions pertaining to claims for benefits and procedures for claim review. The
Committee also shall be so empowered to take such further action as the
Committee shall deem advisable in the administration of the Plan. The actions

 

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taken and the decisions made hereunder shall be final and binding upon all
interested parties.

 

2. Claims Procedure. In accordance with the provisions of Section 503 of ERISA,
the Company shall provide a procedure for handling claims of Participants or
their Designated Beneficiaries under the Plan. Such procedure shall be in
accordance with regulations issued by the Secretary of Labor and shall provide
adequate written notice within a reasonable period of time with respect to the
Committee’s denial of any such claim, as well as a reasonable opportunity for a
full fair review of any such denial. The decision after such review shall be
conclusive and binding upon Participants, Designated Beneficiaries and the
Company.

 

3. Account Statements. As soon as administratively possible after the end of
each calendar year, the Company shall prepare and furnish to each Participant a
statement of the status of each of his/her Deferred Compensation Account of the
Plan effective as of the last day of the calendar year. The statement shall show
the contributions and earnings credited to the Account during the year and the
payments made from the Account during the year, and such other information as
the Committee may prescribe.

 

4. Indemnification. The Company shall indemnify, through insurance or otherwise,
each member of the Committee against any claims, losses, expenses, damages or
liabilities arising out of the performance (or failure of performance) of their
responsibilities under the Plan.

 

ARTICLE VI

AMENDMENT AND TERMINATION

 

The Company reserves the right to amend or modify the Plan at any time by action
of its Board of Directors or the Compensation Committee. The Board of Directors
may terminate this Plan at any time. No such action shall adversely affect any
Participant or Designated Beneficiary who has a Deferred Compensation Account.
The Board may, however, direct that all Deferred Compensation be paid out in a
lump sum or in a series of payments upon, and commencing with, termination of
the Plan. The Board shall not be bound by any elections theretofore made by
Participants to receive extended payouts.

 

ARTICLE VII

MISCELLANEOUS

 

1. Claims of Other Persons. The Plan shall not be construed as giving any
person, firm or corporation any legal or equitable right as against the Company,
their officers, employees, or directors, except any such rights as are
specifically provided for in the Plan or are hereafter created in accordance
with the terms and provisions of the Plan.

 

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2. Plan Noncontractual. Nothing herein contained shall be construed as a
commitment or agreement on the part of any person employed by the Company and
nothing herein contained shall be construed as a commitment or agreement on the
part of the Company to continue the employment or the annual rate of
compensation of any such persons for any period, and all employees shall remain
subject to discharge to the same extent as if the Plan had never been put into
effect.

 

3. Severability. The invalidity or unenforceability of any particular provision
of the Plan shall not affect any other provisions hereof, and the Plan shall be
construed in all respects as if such invalid or unenforceable provisions were
omitted herefrom.

 

4. Governing Law. Except to the extent preempted by ERISA or other federal laws,
the provisions of the Plan shall be governed and construed in accordance with
the laws of the State of Ohio.

 

/sc

 

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