SUPPLEMENTAL EXECUTIVE CHOICE PROGRAM
THE HOME DEPOT
EFFECTIVE JANUARY 1, 1999
SUMMARY
Each calendar year every officer receives a supplemental benefit allowance
under the Supplemental Executive Choice Program (SECP). This allowance may be
used to purchase additional disability or life insurance benefits, or to
reimburse themselves for financial services or for health care expenses not
covered under Home Depot's standard health care plans.
ELIGIBILITY
To be eligible for SECP, an employee must be an officer of the Company. The
officer must elect coverage from the options available through SECP.
ENROLLMENT
Choices for enrollment will be available immediately upon eligibility and/or
during annual enrollment in the fall of each year.
MAXIMUM ANNUAL BENEFIT
The maximum benefits payable during a calendar year for all options combined is
$15,000 for senior officers and $10,000 for all other officers.
OPTIONS AVAILABLE
- SUPPLEMENTAL LONG TERM DISABILITY (LTD) INSURANCE (SDIP) - additional LTD
insurance designed to replace a greater percentage of the value of the
officers total compensation.
- SUPPLEMENTAL LIFE INSURANCE (SLI) - Variable Universal Life Insurance for
up to three times base salary plus bonus minus the $300,000 already
provided by The Home Depot, up to a specified maximum.
- FINANCIAL PLANNING & COUNSELING SERVICES - reimbursement for financial
planning and counseling services up to a specified amount which varies by
year.
- EXECUTIVE MEDICAL REIMBURSEMENT ACCOUNT (EMRA) - reimbursement for most
medical and dental expenses not covered under the standard medical and
dental plans for self and family up to a maximum of the SECP benefits
allowance. Expenses must qualify under applicable IRS regulations.
TAXES
The dollars one elects to spend for SDIP, SLI, Financial Planning & Counseling
Services and EMRA under SECP will be taxable in the year in which the benefits
are paid. This amount will be reported on the W-2 for that same year.
Applicable taxes include Federal and State income taxes, and FICA if the
employee's pay falls below the FICA salary limit.
ADDITIONAL REIMBURSEMENT
In March of each year, while the SECP remains in effect, the Company will make
an additional payment to help cover the taxes incurred for benefits paid in the
previous year. This additional payment will be taxable income and will be
reported on the W-2 in the year in which it is paid.
TERMINATION OF COVERAGE
Coverage will terminate on the earliest of the following dates. In some
instances, portability of coverage may be applicable.
1. An employee terminates employment with Home Depot.
2. At the end of an approved leave of absence, unless the employee
returns to full-time employment with the Company.
3. The employee is no longer an officer of the Company.
4. The Company elects to discontinue the Supplemental Executive Choice
Program.
5. Coverage under the EMRA option only will terminate when coverage under
the Company's Group Health Plan terminates, either due to voluntary
action on the part of the employee, or because the Company cancels the
Group Health Plan.
6. Coverages under SDIP, SLI and Financial Planning & Counseling Services
will terminate when the plan(s) is canceled either individually or
collectively due to voluntary action on the part of the employee or at
the discretion of the Company.
ERISA
SECP is a cash bonus plan. It is not funded, nor does it come under provisions
of the Federal Employee Retirement Income Security Act (ERISA).