Albertsons 2007 Annual Report Download - page 118

SU
PERVAL
U
IN
C
. and
S
ubsidiaries
N
OTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
P
ension Plan / Health and Welfare Plan Contingencies
T
he Compan
y
contributes to various multi-emplo
y
er pension plans under collective bar
g
ainin
g
a
g
reements
,
primarily defined benefit pension plans. These plans generally provide retirement benefits to participants based
o
nt
h
e
i
r serv
i
ce to contr
ib
ut
i
ng emp
l
oyers. Base
d
on ava
il
a
bl
e
i
n
f
ormat
i
on, t
h
e Company
b
e
li
eves t
h
at some o
f
the multi-emplo
y
er plans to which it contributes are under-funded. Compan
y
contributions to these plans ar
e
l
ikely to continue to increase in the near term. However, the amount of any increase or decrease in contributions
will d
epen
d
on a var
i
ety o
ff
actors,
i
nc
l
u
di
ng t
h
e resu
l
ts o
f
t
h
e Company’s co
ll
ect
i
ve
b
arga
i
n
i
ng e
ff
orts,
investment return on the assets held in the plans, actions taken b
y
the trustees who mana
g
e the plans, an
d
re
q
uirements under the Pension Protection Act and /or Section 412 (e) of the Internal Revenue Code
.
F
urt
h
ermore,
if
t
h
e Company were to ex
i
t certa
i
n mar
k
ets or ot
h
erw
i
se cease ma
ki
ng contr
ib
ut
i
ons to t
h
ese p
l
ans
a
t this time, it could tri
gg
er a withdrawal liabilit
y
that would require the Compan
y
to fund its proportionate share
o
fa
p
lan’s unfunded vested benefits
.
T
he Compan
y
also makes contributions to multi-emplo
y
er health and welfare plans in amounts set forth in th
e
related collective bargaining agreements. Some of the collective bargaining agreements contain reserve
requ
i
rements t
h
at may tr
i
gger unant
i
c
i
pate
d
contr
ib
ut
i
ons resu
l
t
i
ng
i
n
i
ncrease
dh
ea
l
t
h
care expenses. I
f
t
h
ese
h
ealth care provisions cannot be rene
g
otiated in a manner that reduces the prospective health care cost as th
e
C
ompany intends, the Company’s Selling and administrative expenses could increase in the future.
NOTE 17—
S
HAREHOLDER RIGHT
S
PLA
N
On Apr
il
24, 2000, t
h
e Company announce
d
t
h
at t
h
e Boar
d
o
f
D
i
rectors a
d
opte
d
aS
h
are
h
o
ld
er R
i
g
h
ts P
l
an un
d
er
w
hich one preferred stock purchase ri
g
ht is distributed for each outstandin
g
share of common stock. The ri
g
hts,
w
hich expire on April 12, 2010, are exercisable only under certain conditions, and may be redeemed by th
e
B
oard of Directors for
$
0.01 per right. The plan contains a three-year independent director evaluation provisio
n
w
hereb
y
a committee of the Compan
y
’s independent directors will review the plan at least once ever
y
three
years. The rights become exercisable, with certain exceptions, after a person or group acquires beneficial
o
wnership of 15 percent or more of the outstanding voting stock of the Company.
N
O
TE 18—
S
E
G
MENT INF
O
RMATI
O
N
R
efer to pa
g
eF-
5
for the Compan
y
’s se
g
ment information
.
NOTE 19—SUBSEQUENT EVENT
S
On March 8, 2007, the Company executed an amendment to the existing credit facility, resulting in ne
w
a
pp
li
ca
bl
e
i
nterest rates
f
or
i
ts term
l
oans. Rates on Term Loan A an
d
Term Loan B were c
h
ange
d
to LIBOR p
l
u
s
0.37
5
percent to 1.
5
0 percent and LIBOR plus 1.2
5
percent to 1.7
5
percent, respectivel
y
, dependin
g
on the
C
ompany’s credit ratings. This amendment resulted in the rates on the outstanding Term Loan A and Term Loan
B
balances changing to LIBOR plus 1.375 percent and LIBOR plus 1.50 percent, respectively
.
On April 18, 2007, the Company’s Board of Directors adopted a new share repurchase program authorizing the
C
ompany to purchase up to
$
235 of the Company’s common stock. Share repurchases will be made with the cash
g
enerated from the exercise of stock options and mandator
y
convertible securities equit
y
issuance. This pro
g
ra
m
replaces all previously existing programs
.
On April 18, 2007, the Compan
y
cancelled the interest rate swap a
g
reements disclosed in Note 8 – Financia
l
I
nstruments
.
F-
52