AMENDED AND RESTATED DELL COMPUTER CORPORATION 401(k) PLAN
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DELL COMPUTER CORPORATION
401(k) PLAN
AS AMENDED AND RESTATED
EFFECTIVE JANUARY 1, 2000
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TABLE OF CONTENTS
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I. DEFINITIONS AND CONSTRUCTION
1.1 DEFINITIONS................................................1
1.2 NUMBER AND GENDER..........................................9
1.3 HEADINGS...................................................9
1.4 CONSTRUCTION...............................................9
1.5 PROFIT SHARING PLAN.......................................10
II. PARTICIPATION
2.1 PARTICIPATION.............................................11
2.2 AUTOMATIC ENROLLMENT......................................11
2.3 CESSATION OF PARTICIPATION................................11
2.4 SUSPENSION OF PARTICIPATION REQUIREMENTS..................12
III. CONTRIBUTIONS
3.1 SALARY REDUCTION CONTRIBUTIONS............................13
3.2 EMPLOYER MATCHING CONTRIBUTIONS...........................14
3.3 EMPLOYER RETIREMENT SAVINGS CONTRIBUTIONS.................15
3.4 EMPLOYER FAIL SAFE CONTRIBUTIONS..........................16
3.5 RETURN OF CONTRIBUTIONS...................................16
3.6 DISPOSITION OF EXCESS DEFERRALS AND EXCESS
CONTRIBUTIONS...........................................17
3.7 ROLLOVER CONTRIBUTIONS....................................18
IV. ALLOCATIONS AND LIMITATIONS
4.1 SUSPENDED AMOUNTS.........................................20
4.2 ALLOCATION OF CONTRIBUTIONS TO ACCOUNTS...................20
4.3 TIME OF ALLOCATION OF CONTRIBUTIONS.......................21
4.4 APPLICATION OF FORFEITURES................................22
4.5 VALUATION OF ACCOUNTS.....................................22
4.6 CODE SECTION 415 LIMITATIONS AND CORRECTIONS..............22
V. INVESTMENT OF ACCOUNTS
5.1 INVESTMENT OF ACCOUNTS BY PARTICIPANTS....................25
5.2 RESTRICTION ON ACQUISITION OF COMPANY STOCK...............25
5.3 PASS-THROUGH VOTING OF COMPANY STOCK......................25
5.4 STOCK RIGHTS, STOCK SPLITS, AND STOCK DIVIDENDS...........26
5.5 PARTICIPANT RIGHTS........................................26
VI. IN-SERVICE WITHDRAWALS
6.1 AGE 59 1/2 WITHDRAWALS....................................27
6.2 FINANCIAL HARDSHIP WITHDRAWALS............................27
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6.3 RESTRICTIONS ON IN-SERVICE WITHDRAWALS....................28
VII. DISTRIBUTIONS AFTER SEPARATION FROM SERVICE
7.1 RETIREMENT BENEFITS.......................................30
7.2 DISABILITY BENEFITS.......................................30
7.3 DEATH BENEFITS............................................30
7.4 SEPARATION FROM SERVICE PRIOR TO RETIREMENT...............31
VIII. TIME AND FORM OF PAYMENT OF BENEFITS
8.1 TIME OF PAYMENT...........................................35
8.2 DETERMINATION OF BENEFIT COMMENCEMENT DATE................35
8.3 FORMS OF BENEFITS.........................................37
8.4 CASH-OUT OF BENEFIT NOT IN EXCESS OF $5,000...............37
8.5 DIRECT ROLLOVER ELECTION..................................37
8.6 PAYEE OF BENEFITS.........................................38
8.7 BENEFITS FROM ACCOUNT BALANCES............................38
8.8 UNCLAIMED BENEFITS........................................38
8.9 CLAIMS REVIEW.............................................38
IX. LOANS
9.1 ELIGIBILITY FOR LOAN......................................40
9.2 MINIMUM LOAN..............................................40
9.3 MAXIMUM LOAN..............................................40
9.4 INTEREST, SECURITY, AND FEES..............................41
9.5 REPAYMENT TERMS OF LOAN...................................41
9.6 DEFAULT AND OFFSET........................................42
X. ADMINISTRATION OF THE PLAN
10.1 APPOINTMENT OF COMMITTEE.................................44
10.2 TERM, VACANCIES, RESIGNATION, AND REMOVAL.................44
10.3 OFFICERS, RECORDS, AND PROCEDURES.........................44
10.4 MEETINGS..................................................44
10.5 SELF-INTEREST OF MEMBERS..................................44
10.6 COMPENSATION AND BONDING..................................45
10.7 COMMITTEE POWERS AND DUTIES...............................45
10.8 EMPLOYER TO SUPPLY INFORMATION............................46
10.9 INDEMNIFICATION...........................................46
10.10 TEMPORARY RESTRICTIONS....................................47
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XI. TRUSTEE AND ADMINISTRATION OF TRUST FUND
11.1 APPOINTMENT, RESIGNATION, REMOVAL, AND REPLACEMENT OF
TRUSTEE.................................................48
11.2 TRUST AGREEMENT...........................................48
11.3 PAYMENT OF EXPENSES.......................................48
11.4 TRUST FUND PROPERTY.......................................48
11.5 DISTRIBUTIONS FROM PARTICIPANTS' ACCOUNTS.................48
11.6 PAYMENTS SOLELY FROM TRUST FUND...........................49
11.7 NO BENEFITS TO THE EMPLOYER...............................49
XII. FIDUCIARY PROVISIONS
12.1 ARTICLE CONTROLS..........................................50
12.2 GENERAL ALLOCATION OF FIDUCIARY DUTIES....................50
12.3 FIDUCIARY DUTY............................................50
12.4 DELEGATION OF FIDUCIARY DUTIES............................50
12.5 INVESTMENT MANAGER........................................51
XIII. AMENDMENTS
13.1 RIGHT TO AMEND............................................52
13.2 LIMITATION ON AMENDMENTS..................................52
XIV. DISCONTINUANCE OF CONTRIBUTIONS, TERMINATION, PARTIAL
TERMINATION, AND MERGER OR CONSOLIDATION
14.1 RIGHT TO DISCONTINUE CONTRIBUTIONS, TERMINATE, OR PARTIALLY
TERMINATE.................................................53
14.2 PROCEDURE IN THE EVENT OF DISCONTINUANCE OF CONTRIBUTIONS,
TERMINATION, OR PARTIAL TERMINATION.....................53
14.3 MERGER, CONSOLIDATION, OR TRANSFER........................54
XV. PARTICIPATING EMPLOYERS
15.1 DESIGNATION OF OTHER EMPLOYERS............................55
15.2 SINGLE PLAN...............................................56
XVI. MISCELLANEOUS PROVISIONS
16.1 NOT CONTRACT OF EMPLOYMENT................................57
16.2 ALIENATION OF INTEREST FORBIDDEN..........................57
16.3 UNIFORMED SERVICES EMPLOYMENT AND REEMPLOYMENT RIGHTS ACT
REQUIREMENTS............................................57
16.4 PAYMENTS TO MINORS AND INCOMPETENTS.......................57
16.5 ACQUISITION AND HOLDING OF COMPANY STOCK..................57
16.6 PARTICIPANT'S AND BENEFICIARY'S ADDRESSES.................58
16.7 SEVERABILITY..............................................58
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16.8 JURISDICTION..............................................58
16.9 INCORRECT INFORMATION OR ERROR............................58
16.10 MERGED PLANS..............................................58
XVII. TOP-HEAVY STATUS
17.1 ARTICLE CONTROLS..........................................59
17.2 DEFINITIONS...............................................59
17.3 TOP-HEAVY STATUS..........................................60
17.4 TOP-HEAVY VESTING SCHEDULE................................61
17.5 TOP-HEAVY CONTRIBUTION....................................61
17.6 TERMINATION OF TOP-HEAVY STATUS...........................62
17.7 EFFECT OF ARTICLE.........................................62
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DELL COMPUTER CORPORATION
401(k) PLAN
WITNESSETH:
WHEREAS, DELL COMPUTER CORPORATION (the "Company") has heretofore
adopted and maintains the DELL COMPUTER CORPORATION 401(k) PLAN (the "Plan") for
the benefit of eligible employees of the Company and participating affiliates;
and
WHEREAS, the Company desires to restate the Plan and to amend the Plan
in several respects, intending thereby to provide an uninterrupted and
continuing program of benefits;
NOW THEREFORE, the Plan is hereby restated in its entirety as follows
with no interruption in time, effective as of January 1, 2000, except as
otherwise indicated herein:
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I.
DEFINITIONS AND CONSTRUCTION
1.1 DEFINITIONS. Where the following words and phrases appear capitalized
in the Plan, they shall have the respective meanings set forth below,
unless their context clearly indicates to the contrary.
(a) ACCOUNT(S): Accounts means accounts or records maintained by
the administrator or its agent indicating the monetary value
of the total interest in the Trust Fund of each Participant,
each former Participant, and each beneficiary. The types of
individual accounts under this Plan are:
(1) Salary Reduction Contribution Account;
(2) Employer Contribution Account; and
(3) Rollover Contribution Account.
(b) BENEFIT COMMENCEMENT DATE: With respect to each Participant or
beneficiary, the first day of the first period for which such
Participant's or beneficiary's benefit is payable to him from
the Trust Fund, determined in accordance with Section 8.2.
(c) BONUS: Bonus means the amount paid to an IBP Participant
pursuant to the Company's Annual Incentive Bonus Plan. All
other bonus payments, if any, including "sign-on bonuses," "on
the spot awards," and other customized bonus programs shall
not be considered a Bonus under the Plan and will be included
in that Participant's Considered Compensation.
(d) CODE: The Internal Revenue Code of 1986, as amended.
(e) COMMITTEE: The administrative committee appointed by the
Directors to administer the Plan.
(f) COMPANY: Dell Computer Corporation.
(g) COMPANY STOCK: The common stock of Dell Computer Corporation.
(h) COMPENSATION: A Participant's Compensation for a Limitation
Year shall include all the items in Section 1.1(h)(1) below,
exclude all the items in Section 1.1(h)(2) below, and shall be
subject to the limitation provided in Section 1.1(h)(3) below.
The determination of a Participant's Compensation for periods
prior to January 1, 2000 shall be controlled by the prior plan
document.
(1) All of the following items shall be included:
(i) The total of all wages, salaries, fees for
professional services, and other amounts
received by a Participant in cash or in kind
for
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services actually rendered in the course of
employment with the Employer while a
Participant and an Employee to the extent
such amounts are includable in gross income
(but determined without regard to the
exclusions from gross income under sections
931 and 933 of the Code);
(ii) In the case of a Participant who is an
employee within the meaning of section
401(c)(1) of the Code and the Treasury
regulations thereunder, the Employee's
earned income (as described in section
401(c)(2) of the Code and the Treasury
regulations thereunder) determined without
regard to the exclusions from gross income
under sections 931 and 933 of the Code;
(iii) Foreign earned income (as defined in section
911(b) of the Code) whether or not
excludable from gross income;
(iv) Amounts described in sections 104(a)(3),
105(a), and 105(h) of the Code, but only to
the extent these amounts are includable in
the gross income of the Participant;
(v) The value of a non-qualified stock option
granted to the Participant by the Employer,
but only to the extent that the value of the
option is includable in the gross income of
the Participant for the taxable year in
which it is granted;
(vi) The amount includable in the gross income of
the Participant upon making an election
described in section 83(b);
(vii) Elective contributions made on a
Participant's behalf by the Employer that
are not includable in income under section
125, section 402(e)(3), section 402(h),
section 403(b), or section 457 of the Code;
(viii) Any amounts that are not includable in the
gross income of a Participant under a salary
reduction agreement by reason of the
application of section 132(f) of the Code;
(ix) For Plan Years beginning on or after January
1, 2001, on the spot awards; and
(x) For Plan Years beginning on or after January
1, 2001, noncash awards such as gifts and
trips.
(2) All of the following items shall be excluded to the
extent they would otherwise be included under Section
1.1(i)(1):
(i) Reimbursements and other expense allowances;
(ii) Cash and noncash fringe benefits;
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(iii) Moving expenses;
(iv) Deferred compensation under any plan or
program other than as specifically included
in Section 1.1(i)(1)(vii);
(v) Welfare benefits;
(vi) Employer contributions to or payments from
this or any other deferred compensation
program, whether such program is qualified
under section 401(a) of the Code or
nonqualified;
(vii) Amounts realized from the exercise of a
stock option that is not an incentive stock
option within the meaning of section 422 of
the Code;
(viii) Amounts realized at the time restricted
stock or property is freely transferable or
no longer subject to a substantial risk of
forfeiture in accordance with section 83 of
the Code;
(ix) Amounts realized from the sale, exchange,
disqualifying disposition or other
disposition of stock acquired under an
incentive stock option;
(x) Any other amounts that receive special tax
benefits under the Code, such as premiums
for group life insurance (but only to the
extent such premiums are not includable in
the gross income of the Participant);
(xi) On the spot awards; and
(xii) Noncash awards such as gifts and trips.
(3) The Compensation of any Participant taken into
account for purposes of the Plan shall be limited to
$170,000 for any Plan Year with such limitation to
be:
(i) Adjusted automatically to reflect any
amendments to section 401(a)(17) of the Code
and any cost-of-living increases authorized
by section 401(a)(17) of the Code; and
(ii) Prorated for a Plan Year of less than twelve
months and to the extent otherwise required
by applicable law.
(i) CONSIDERED COMPENSATION: A Participant's Considered
Compensation for a Limitation Year shall include his
Compensation (as defined above) reduced by any Bonus paid to
the Participant. Any bonus payments made to a Participant that
is not an IBP Participant shall be included in that
Participant's Considered Compensation.
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(j) CONTROLLED ENTITY: Each entity that is a member of a
controlled group of corporations (within the meaning of
sections 414(b) and 414(c) of the Code) or an affiliated
service group (within the meaning of sections 414(m) or 414(o)
of the Code) of which the Employer is a member.
(k) DIRECT ROLLOVER: A payment by the Plan to an Eligible
Retirement Plan designated by a Distributee.
(l) DIRECTORS: The Board of Directors of the Company.
(m) DISTRIBUTEE: Each (i) Participant entitled to an Eligible
Rollover Distribution, (ii) Participant's surviving spouse
with respect to the interest of such surviving spouse in an
Eligible Rollover Distribution, and (iii) individual who is an
alternate payee under a qualified domestic relations order, as
defined in section 414(p) of the Code, with regard to the
interest of such former spouse in an Eligible Rollover
Distribution.
(n) EFFECTIVE DATE: January 1, 2000, as to this restatement of the
Plan, except (i) as otherwise indicated in specific provisions
of the Plan, or (ii) where provisions of the Plan are required
to have an earlier effective date by applicable statute or
regulation such provision shall be effective as of the
required effective date. The original effective date of the
Plan was June 1, 1989.
(o) ELIGIBLE EMPLOYEE: Any Employee eligible to participate in the
Plan in accordance with Section 2.1.
(p) ELIGIBLE RETIREMENT PLAN: (i) With respect to a Distributee
other than a surviving spouse, an individual retirement
account described in section 408(a) of the Code, an individual
retirement annuity described in section 408(b) of the Code, an
annuity plan described in section 403(a) of the Code, or a
qualified plan described in section 401(a) of the Code, which
under its provisions does, and under applicable law may,
accept such Distributee's Eligible Rollover Distribution, and
(ii) with respect to a Distributee who is a surviving spouse,
an individual retirement account described in section 408(a)
of the Code or an individual retirement annuity described in
section 408(b) of the Code.
(q) ELIGIBLE ROLLOVER DISTRIBUTION: With respect to a Distributee,
any distribution of all or part of the Accounts of a
Participant other than (i) a distribution that is one of a
series of substantially equal periodic payments (not less
frequently than annually) made for the life (or life
expectancy) of the Distributee or the joint lives (or joint
life expectancies) of the Distributee and the Distributee's
designated beneficiary or for a specified period of ten years
or more, (ii) a distribution to the extent such distribution
is required under section 401(a)(9) of the Code, (iii) the
portion of a distribution that is not includable in gross
income (determined without regard to the exclusion for net
unrealized appreciation with respect to employer securities),
(iv) a loan treated as a distribution under section 72(p) of
the Code and not excepted by section 72(p)(2) of the Code, (v)
a loan in default that is a deemed distribution, (vi) any
corrective distribution provided in Section 3.6
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and Subsection 4.6(b), and (vii) any other distribution so
designated by the Internal Revenue Service in revenue rulings,
notices, and other guidance of general applicability. Further,
a distribution pursuant to Section 6.2 from the Salary
Reduction Account of a Participant who has not attained age 59
1/2 shall not constitute an Eligible Rollover Distribution.
(r) EMPLOYEE: Each individual employed by an Employer (including
Leased Employees).
(s) EMPLOYER: The Company and each entity that has been designated
to participate in the Plan pursuant to the provisions of
Article XV.
(t) EMPLOYER CONTRIBUTION ACCOUNT: An individual account for each
Participant, which is credited with the sum of: (i) any
Employer Matching Contributions made on such Participant's
behalf pursuant to Section 3.2; (ii) any Employer Retirement
Savings Contributions made on such Participant's behalf
pursuant to Section 3.3; and (iii) any Employer Fail Safe
Contributions made on such Participant's behalf pursuant to
Section 3.4 to satisfy the restrictions set forth in
Subsection 3.2(c). The Administrator or any recordkeeper
retained by the Administrator shall create such sub-accounts
to the Participant's Employer Contribution Account as are
necessary to separately account for each of the Employer
Contributions described above and in Section 1.1(u).
(u) EMPLOYER CONTRIBUTIONS: The total of (i) Employer Matching
Contributions, (ii) Employer Retirement Savings Contributions,
and (iii) Employer Fail Safe Contributions.
(v) EMPLOYER MATCHING CONTRIBUTIONS: Contributions made to the
Plan by the Employer pursuant to Section 3.2.
(w) EMPLOYER RETIREMENT SAVINGS CONTRIBUTIONS: Contributions made
to the Plan by the Employer pursuant to Section 3.3.
(x) EMPLOYER FAIL SAFE CONTRIBUTIONS: Contributions made to the
Plan by the Employer pursuant to Section 3.4.
(y) EMPLOYMENT COMMENCEMENT DATE: The date on which an individual
first performs an Hour of Service.
(z) ERISA: The Employee Retirement Income Security Act of 1974, as
amended.
(aa) HIGHLY COMPENSATED EMPLOYEE: Each Employee who performs
services during the Plan Year for which the determination of
who is highly compensated is being made (the "Determination
Year") and who:
(1) Is a five-percent owner of the Employer (within the
meaning of section 416(i)(1)(A)(iii) of the Code) at
any time during the Determination Year or the
twelve-month period immediately preceding the
Determination Year (the "Look-Back Year"); or
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(2) During the Determination Year or the Look-Back Year
received Compensation (within the meaning of section
414(q)(4) of the Code); in excess of $80,000 (with
such amount to be adjusted automatically to reflect
any cost-of-living adjustments authorized by section
414(q)(1) of the Code).
For purposes of the preceding sentence, (i) all
employers aggregated with the Employer under section
414(b), (c), (m), or (o) of the Code shall be treated
as a single employer and (ii) a former Employee who
had a separation year (generally, the Determination
Year such Employee separates from service) prior to
the Determination Year and who was an active Highly
Compensated Employee for either such separation year
or any Determination Year ending on or after such
Employee's fifty-fifth birthday shall be deemed to be
a Highly Compensated Employee. To the extent that the
provisions of this Paragraph are inconsistent or
conflict with the definition of a "highly compensated
employee" set forth in section 414(q) of the Code and
the Treasury regulations thereunder, the relevant
terms and provisions of section 414(q) of the Code
and the Treasury regulations thereunder shall govern
and control. Notwithstanding the above, the Company
may apply the top paid group election permitted by
section 414(q) of the Code.
(bb) HOUR OF SERVICE: Each hour for which an individual is directly
or indirectly paid, or entitled to payment, by the Employer or
a Controlled Entity for the performance of duties.
(cc) IBP PARTICIPANT: IBP Participant means any employee that is
participating in the Company's Annual Incentive Bonus Plan and
is assigned an employment classification of D3 or higher, as
determined by the Company.
(dd) INVESTMENT FUND: Investment funds made available from time to
time by the Committee for the investment of Plan assets as
described in Article V.
(ee) LEASED EMPLOYEE: Each person who is not an employee of the
Employer or a Controlled Entity but who performs services for
the Employer or a Controlled Entity pursuant to an agreement
(oral or written) between the Employer or a Controlled Entity
and any leasing organization, provided that such person has
performed such services for the Employer or a Controlled
Entity or for related persons (within the meaning of section
144(a)(3) of the Code) on a substantially full-time basis for
a period of at least one year and such services are performed
under primary direction or control by the Employer or a
Controlled Entity.
(ff) LIMITATION YEAR: The Limitation Year is equal to the Plan
Year.
(gg) NORMAL RETIREMENT DATE: The date a Participant attains the age
of sixty-five.
(hh) PARTICIPANT: Each individual who (i) has met the eligibility
requirements for participation in the Plan pursuant to Article
II or (ii) has made a Rollover Contribution in accordance with
Section 3.7, but only to the extent provided in Section 3.7.
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(ii) PERIOD OF SERVICE: Each period of an individual's Service
commencing on his Employment Commencement Date or Reemployment
Commencement Date, if applicable, and ending on a Severance
from Service Date. Notwithstanding the foregoing:
(1) A period during which an individual is absent from
Service by reason of the individual's pregnancy, the
birth of a child of the individual, the placement of
a child with the individual in connection with the
adoption of such child by the individual, or for the
purposes of caring for such child for the period
immediately following such birth or placement shall
not constitute a Period of Service between the first
and second anniversary of the first date of such
absence or during any subsequent period.
(2) A Period of Service shall also include any period
required to be credited as a Period of Service by
federal law, but only under the conditions and to the
extent so required by such federal law.
(3) If an individual terminates his Service (at a time
other than during a leave of absence) and
subsequently resumes his Service, if his Reemployment
Commencement Date is within twelve months of his
Severance from Service Date, such Period of Severance
shall be treated as a Period of Service.
(4) If an individual terminates his Service during a
leave of absence and subsequently resumes his
Service, if his Reemployment Commencement Date is
within twelve months of the beginning of such leave
of absence, such Period of Severance shall be treated
as a Period of Service.
(5) The Committee, in its discretion, may credit an
individual with Period(s) of Service for
"pre-participation service" (within the meaning of
Treasury Regulation Section
1.401(a)(4)-11(d)(3)(ii)(A)), but only if (i) such
pre-participation service would not otherwise be
credited as a Period of Service and (ii) such
crediting of Period(s) of Service (A) has a
legitimate business reason, (B) does not by design or
operation discriminate significantly in favor of
Highly Compensated Employees, and (C) is applied to
all similarly situated employees. Moreover, the
Committee, in its discretion, may credit an
individual with Period(s) of Service for "imputed
service" (within the meaning of Treasury regulation
Section 1.401(a)(4)-11(d)(3)(ii)(B)), but only if (i)
such imputed service would not otherwise be credited
as a Period of Service, (ii) such crediting of
Period(s) of Service (A) has a legitimate business
reason, (B) does not by design or operation
discriminate significantly in favor of Highly
Compensated Employees, and (C) is applied to all
similarly situated employees, and (iii) the
individual has not permanently ceased to perform
services as an employee of the Employer or a
Controlled Entity, provided
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that clause (iii) of this sentence shall not apply if
(A) the individual is not performing services for the
Employer or a Controlled Entity because of a
disability, (B) the individual is performing services
for another employer under an arrangement that
provides some ongoing business benefit to the
Employer or a Controlled Entity, or (C) for purposes
of vesting and accrual, the individual is performing
service for another employer which is being treated
under the Plan as actual service with the Employer or
a Controlled Entity.
(6) In the event that the Plan constitutes a plan of a
predecessor employer within the meaning of section
414(a) of the Code, service for such predecessor
employer shall be treated as a Period of Service to
the extent required by section 414(a) of the Code.
(jj) PERIOD OF SEVERANCE: Each period of time commencing on an
individual's Severance from Service Date and ending on a
Reemployment Commencement Date.
(kk) PLAN: The Dell Computer Corporation 401(k) Plan, as amended
from time to time.
(ll) PLAN YEAR: The twelve-consecutive month period commencing
January 1 of each year.
(mm) REEMPLOYMENT COMMENCEMENT DATE: The first date on which an
individual performs an Hour of Service following a Severance
from Service Date.
(nn) ROLLOVER CONTRIBUTION ACCOUNT: An individual account for an
Eligible Employee, which is credited with the Rollover
Contributions of such Employee.
(oo) ROLLOVER CONTRIBUTIONS: Contributions made by an Eligible
Employee pursuant to Section 3.7.
(pp) SALARY REDUCTION CONTRIBUTION ACCOUNT: An individual account
for each Participant, which is credited with any Salary
Reduction Contributions made by the Employer on such
Participant's behalf and any Employer Fail Safe Contributions
made on such Participant's behalf pursuant to Section 3.4 to
satisfy the restrictions set forth in Subsection 3.1(e).
(qq) SALARY REDUCTION CONTRIBUTIONS: Contributions made to the Plan
by the Employer on a Participant's behalf in accordance with
the Participant's elections to defer Considered Compensation
or Bonus under the Plan's qualified cash or deferred
arrangement as described in Section 3.1.
(rr) SERVICE: The period of an individual's employment with the
Employer or a Controlled Entity (but only for periods of
employment while the entity is a Controlled Entity).
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(ss) SEVERANCE FROM SERVICE DATE: The first date on which an
individual terminates his Service following his Employment
Commencement Date or Reemployment Commencement Date, if
applicable. Notwithstanding the foregoing, the Severance from
Service Date of an individual who is absent from Service by
reason of pregnancy, the birth of a child, the placement of a
child with the individual in connection with the adoption of
such child by the individual, or for purposes of caring for
such child for the period immediately following such birth or
placement shall be the second anniversary of the first date of
such absence. The Severance from Service Date of an individual
who is absent from Service due to an authorized leave of
absence and who does not recommence Service at the end of such
leave of absence shall be the first date on which the leave of
absence commenced.
(tt) TRUST: The trust(s) established under the Trust Agreement(s)
to hold and invest contributions made under the Plan and
income thereon, and from which Plan benefits are distributed.
(uu) TRUST AGREEMENT: The agreement(s) entered into between the
Company and the Trustee establishing the Trust, as such
agreement(s) may be amended from time to time.
(vv) TRUST FUND: The funds and properties held pursuant to the
provisions of the Trust Agreement for the use and benefit of
the Participants, together with all income, profits, and
increments thereto.
(ww) TRUSTEE: The trustee or trustees qualified and acting under
the Trust Agreement at any time.
(xx) VALUATION DATE: Each day that the New York Stock Exchange is
open for business.
(yy) VESTED INTEREST: The percentage of a Participant's Accounts
that, pursuant to the Plan, is nonforfeitable.
(zz) VESTING SERVICE: The measure of service used in determining a
Participant's Vested Interest as determined in accordance with
Section 7.4.
1.2 NUMBER AND GENDER. Wherever appropriate herein, words used in the
singular shall be considered to include the plural, and words used in
the plural shall be considered to include the singular. The masculine
gender, where appearing in the Plan, shall be deemed to include the
feminine gender.
1.3 HEADINGS. The headings of Articles and Sections herein are included
solely for convenience, and if there is any conflict between such
headings and the text of the Plan, the text shall control.
1.4 CONSTRUCTION. It is intended that the Plan be qualified within the
meaning of section 401(a) of the Code and that the Trust be tax exempt
under section 501(a) of the Code, and all provisions herein shall be
construed in accordance with such intent.
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<PAGE> 17
1.5 PROFIT SHARING PLAN. The Plan is intended to qualify as a profit
sharing plan for purposes of sections 401(a), 402, 412, and 417 of the
Code. Contributions to this Plan are not dependent on profits by an
Employer.
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II.
PARTICIPATION
2.1 PARTICIPATION.
(a) Each Eligible Employee shall be eligible to become a
Participant in the Plan upon the date coincident with such
Eligible Employee's Employment Commencement Date.
(b) Notwithstanding Subsection 2.1(a), an Eligible Employee who
was a Participant in the Plan on the day prior to the
Effective Date shall remain a Participant in this restatement
thereof as of the Effective Date.
(c) The following groups of Employees are not eligible to
participate in the Plan:
(1) An Employee whose terms and conditions of employment
are governed by a collective bargaining agreement,
unless such agreement provides for his coverage under
the Plan;
(2) A nonresident alien who receives no earned income
from an Employer that constitutes income from sources
within the United States unless otherwise
specifically covered by a participating entity
pursuant to the provisions of Article XV;
(3) An individual who is a Leased Employee or who would
be a Leased Employee but for the fact that he has not
performed services on a substantially full-time basis
for a period of at least one year;
(4) Any employee that is not included on the payroll
records of the Company or a Controlled Entity as a
common law employee or is otherwise classified or
treated by an Employer as an independent contractor
or other non-common law employee, and it is expressly
intended that such individuals are to be excluded
from Plan participation even if a court or
administrative agency determines that such
individuals are common law employees; or
(5) Any individual on the payroll of Spherion
Corporation.
2.2 AUTOMATIC ENROLLMENT. Each Eligible Employee shall automatically become
a Participant upon the date on which he first becomes eligible under
the provisions of Section 2.1.
2.3 CESSATION OF PARTICIPATION.
(a) Except as provided in Subsections 2.3(b) and 2.3(c), a
Participant shall continue to be a Participant so long as (and
only so long as) he maintains a balance in any of his
Accounts.
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<PAGE> 19
(b) A Participant who ceases to be an Eligible Employee but
remains an Employee shall continue to be a Participant, but,
on and after the date he ceases to be an Eligible Employee, he
shall no longer be entitled to make deferrals hereunder or
share in allocations of Employer Contributions unless and
until he shall again become an Eligible Employee.
(c) A Participant who ceases to be an Employee shall remain a
Participant as long as he has any balance is his Accounts, but
he shall not be entitled to actively participate in the Plan
except as otherwise specifically provided herein.
2.4 SUSPENSION OF PARTICIPATION REQUIREMENTS. In the event that, after
application of Section 3.3(b), the group of Employees covered by the
Plan do not satisfy the ratio percentage test in accordance with
section 410(b) of the Code, certain employees of Spherion Corporation
who provide services to Dell (the "Spherion Employees") shall be
permitted to participate the Plan as described below. The participation
requirements will be suspended, beginning first with the Spherion
Employee(s) with the lowest Compensation during the Plan Year, and
continuing to suspend in ascending order the participation requirements
for each Spherion Employee with a higher level of Compensation, from
the lowest to the highest Compensation level, until the Plan satisfies
section 410(b)(1) of the Code. If two or more Spherion Employees have
the same Compensation, the Plan will suspend the participation
requirements for all such Spherion Employees, irrespective of whether
the Plan can satisfy section 410(b)(1)of the Code by accruing benefits
for fewer than all such Spherion Employees. If the Plan suspends the
participation requirements for a Spherion Employee, that Employee will
share in the allocation of Employer contributions and Participant
forfeitures, if any, in accordance with the following:
(a) In addition to the Employer Retirement Savings Contribution
provided for in Subsections 3.3(a) and (b), the Employer may
make an Employer Retirement Savings Contribution to the
Employer Retirement Savings Contribution sub-account of each
Spherion Employee permitted to Participate in the Plan
pursuant to Subsection 2.4 in accordance with Subsection
3.3(a);
(b) In addition to the Employer Fail Safe Contribution provided
for in Section 3.4, the Employer may make an additional
Employer Fail Safe Contribution to the Employer Fail Safe
Contribution sub-account of each Spherion Employee permitted
to Participate in the Plan pursuant to Subsection 2.4 in an
amount determined by multiplying the Employee's Compensation
by the "average deferral percentage" (as defined in Subsection
3.1(f) ) of all other Participants in the Plan; and
(c) In addition to the Employer Matching Contribution provided for
in Section 3.2, the Employer may make an Employer Matching
Contribution to the Employer Matching Contribution sub-account
of each Spherion Employee permitted to Participate in the Plan
pursuant to section 2.4 of the Plan in an amount determined by
multiplying the Employee's Compensation by the "average
contribution percentage" (as defined in Subsection 3.2(d)) of
all other Participants in the Plan.
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III.
CONTRIBUTIONS
3.1 SALARY REDUCTION CONTRIBUTIONS.
(a) A Participant shall elect to defer an integral percentage from
0% to 15% (or such lesser percentage as may be prescribed from
time to time by the Committee) of his Considered Compensation
for a Plan Year by having the Employer contribute the amount
so deferred to the Plan.
(b) Notwithstanding the preceding, an IBP Participant must make a
separate election to defer an integral percentage from 0% to
15% (or such lesser percentage as may be prescribed from time
to time by the Committee) of his Bonus, if any, by having the
Employer contribute the amount so deferred to the Plan.
(c) A Participant's election to defer an amount of his Considered
Compensation and Bonus, if any, shall be made by authorizing
his Employer, in the manner prescribed by the Committee, to
reduce his Considered Compensation and Bonus, if any, in the
elected amount, and the Employer, in consideration thereof,
agrees to contribute an equal amount to the Plan. A
Participant's election made pursuant to this Subsection shall
be implemented as soon as administratively practicable after
such election is made.
A Participant's Considered Compensation deferral election
shall remain in force and effect for all periods following its
implementation until modified in accordance with Subsection
3.1(c) or canceled in accordance with Subsection 3.1(d) or
until such Participant ceases to be an Eligible Employee. A
Participant's Bonus deferral election shall remain in force
and effect until the end of the Plan Year for which such
election was made unless earlier modified in accordance with
Subsection 3.1(c) or canceled in accordance with Subsection
3.1(d) or until such Participant ceases to be an Eligible
Employee. Considered Compensation and Bonus for a Plan Year
not so deferred by a Participant shall be received by such
Participant in cash.
(d) A Participant may change his deferral election percentage,
effective (i) as soon as administratively feasible, in the
case of Considered Compensation deferrals, and (ii) the next
following Bonus payment date, in the case of Bonus deferrals,
in each case by communicating such new deferral election
percentage to his Employer in the manner and within the time
period prescribed by the Committee.
(e) A Participant may cancel his Considered Compensation deferral
election, effective as of the first day of any pay period, and
his Bonus deferral election, effective as of the next
following Bonus payment date, in each case by communicating
such cancellation to his Employer in the manner and within the
time period prescribed by the Committee. A Participant who so
cancels his deferral election may resume deferrals, effective
as of (i) the first day of any subsequent pay period in the
case of Considered Compensation deferrals and (ii) the next
following Bonus payment date in the case of Bonus deferrals,
in each case by communicating his new deferral election to his
Employer in the manner and within the time period prescribed
by the Committee.
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<PAGE> 21
(f) In restriction of the Participants' elections, the Salary
Reduction Contributions and the elective deferrals (within the
meaning of section 402(g)(3) of the Code) under all other
plans, contracts, and arrangements of the Employer on behalf
of any Participant for any calendar year shall not exceed
$10,500 (with such amount to be adjusted automatically to
reflect any cost-of-living adjustments authorized by section
402(g)(5) of the Code).
(g) In further restriction of the Participants' elections, it is
specifically provided that one of the "actual deferral
percentage" tests set forth in section 401(k)(3) of the Code
and the Treasury regulations thereunder must be met in each
Plan Year with respect to which the Plan does not satisfy the
alternative method of satisfying the nondiscrimination
requirements as set forth in section 401(k)(12) of the Code.
Such testing shall utilize the prior year testing method as
such term is defined in Internal Revenue Service Notice 98-1.
If multiple use of the alternative limitation (within the
meaning of section 401(m)(9) of the Code and Treasury
regulation Section 1.401(m)-2(b)) occurs during a Plan Year,
such multiple use shall be corrected in accordance with the
provisions of Treasury regulation Section 1.401(m)-2(c);
provided, however, that if such multiple use is not eliminated
by making Employer Fail Safe Contributions, then the "actual
contribution percentages" of all Highly Compensated Employees
participating in the Plan shall be reduced, and the excess
contributions distributed, in accordance with the provisions
of Subsection 3.6(c) and applicable Treasury regulations, so
that there is no such multiple use.
(h) If the Committee determines that a reduction of the Considered
Compensation or Bonus deferral elections made pursuant to
Subsection 3.1(a), 3.1(c), or 3.1(d) is necessary to ensure
that the restrictions set forth in Subsection 3.1(e) or 3.1(f)
are met for any Plan Year, the Considered Compensation or
Bonus deferral elections made pursuant to Subsections 3.1(a),
3.1(c), and 3.1(d) of affected Participants may be reduced by
the Committee on a temporary and prospective basis in such
manner as the Committee shall determine.
(i) As soon as administratively feasible following (i) the end of
each pay period (in the case of deferrals of Considered
Compensation) and (ii) the Bonus payment date (in the case of
deferrals of Bonus) but no later than the time required by
applicable law, the Employer shall contribute to the Trust, as
Salary Reduction Contributions with respect to each
Participant, an amount equal to the amount of Considered
Compensation and Bonus deferred, pursuant to Subsection 3.1(a)
(as adjusted pursuant to Subsection 3.1(g)), by such
Participant during such period.
3.2 EMPLOYER MATCHING CONTRIBUTIONS.
(a) For each pay period, the Employer shall contribute to the
Trust, as Employer Matching Contributions, an amount that
equals 100% of the Salary Reduction Contributions that were
made pursuant to Section 3.1 on behalf of each of the
Participants during such pay period and that were not in
excess of 3% of each such Participant's Considered
Compensation and Bonus, as applicable, for such pay period.
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<PAGE> 22
(b) In addition to the Employer Matching Contributions made
pursuant to Subsection 3.2(a), for each calendar quarter the
Employer may in its discretion contribute to the Trust an
additional Employer Matching Contribution on behalf of each
Participant who is an Eligible Employee on the last day of
such calendar quarter. The additional Employer Matching
Contribution made pursuant to this Subsection shall be an
amount that equals the difference, if any, between (i) 100% of
the total Salary Reduction Contributions made pursuant to
Section 3.1 on behalf of each Participant for the current and
all prior calendar quarters in the current Plan Year not in
excess of 3% of each such Participant's total Considered
Compensation and Bonus for the current and all prior calendar
quarters in the current Plan Year and (ii) the total Employer
Matching Contributions made on behalf of such Participant for
the current pay period and all prior pay periods in the
current Plan Year (pursuant to Subsection 3.2(a)) and for all
prior calendar quarters in the Plan Year (pursuant to this
Subsection).
(c) In restriction of the Employer Matching Contributions
hereunder, it is specifically provided that one of the "actual
contribution percentage" tests or alternative methods of
satisfying such tests set forth in section 401(m) of the Code
and the Treasury regulations thereunder must be met in each
Plan Year. Such testing shall utilize the prior year testing
method as such term is defined in Internal Revenue Service
Notice 98-1. The Committee may elect, in accordance with
applicable Treasury regulations, to treat Salary Reduction
Contributions to the Plan as Employer Matching Contributions
for purposes of meeting this requirement.
3.3 EMPLOYER RETIREMENT SAVINGS CONTRIBUTIONS.
(a) For each Plan Year, the Employer in its discretion may
contribute to the Trust an Employer Retirement Savings
Contribution on behalf of each Participant who either (i) was
employed by the Employer on the last day of such Plan Year or
(ii) terminated employment with the Employer during such Plan
Year on or after his Normal Retirement Date or by reason of
death or total and permanent disability (as defined in Section
7.2) during such Plan Year. The Employer Retirement Savings
Contribution made pursuant to this Subsection 3.3(a) shall
equal a percentage (selected by and in the discretion of the
Employer) of the Compensation of each such eligible
Participant for such Plan Year or any amount as determined by
the Employer in its discretion.
(b) For each Plan Year, the Employer in its discretion may
contribute to the Trust an Employer Retirement Savings
Contribution on behalf of certain Participants who are not
Highly Compensated Employees for such Plan Year as described
below. The Employer Retirement Savings Contribution made
pursuant to this Subsection 3.3(b) shall equal an amount as
determined by the Employer in its discretion. Any amounts
contributed pursuant to this Subsection 3.3(b) shall be
allocated in
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<PAGE> 23
accordance with Subsection 4.2(c). The Employer Retirement
Savings Contribution will be made by suspending the accrual
requirements for Includable Employees who are Participants,
beginning first with the Includable Employee(s) employed with
the Employer on the last day of the Plan Year, then the
Includable Employee(s) who have the latest Separation from
Service during the Plan Year, and continuing to suspend in
descending order the accrual requirements for each Includable
Employee who incurred an earlier Separation from Service, from
the latest to the earliest separation from service date, until
the Plan satisfies the section 410(b)(1) of the Code coverage
test for the Plan Year. If two or more Includable Employees
have a separation from service on the same day, the Committee
will suspend the accrual requirements for all such Includable
Employees, irrespective of whether the Plan can satisfy the
section 410(b)(1) of the Code coverage test by accruing
benefits for fewer than all such Includable Employees. If the
Plan suspends the accrual requirements for an Includable
Employee, that Employee will share in the allocation of
Employer contributions and Participant forfeitures, if any,
without regard to the Service he has earned for the Plan Year
and without regard to whether he is employed by the Employer
on the last day of the Plan Year. This suspension of accrual
requirements applies separately to the section 401(m) of the
Code portion of the Plan, and the Committee will treat an
Employee as benefiting under that portion of the Plan if the
Employee is an Eligible Employee for purposes of the section
401(m) of the Code nondiscrimination test. "Includable
Employees" are all Employees that are not Highly Compensated
Employees other than: (a) those Employees excluded from
participating in the Plan for the entire Plan Year by reason
of the collective bargaining unit exclusion or the nonresident
alien exclusion or by reason of the participation requirements
Article II and (b) any Employee who incurs a separation from
service during the Plan Year.
3.4 EMPLOYER FAIL SAFE CONTRIBUTIONS.
(a) In addition to the Employer Matching Contributions made
pursuant to Section 3.2 and the Employer Retirement Savings
Contribution made pursuant to Section 3.3, for each Plan Year
the Employer in its discretion may contribute to the Trust as
a "fail safe contribution" for such Plan Year the amounts
necessary to cause the Plan to satisfy the restrictions set
forth in Subsection 3.1(e) (with respect to certain
restrictions on Salary Reduction Contributions) and Subsection
3.2(c) (with respect to certain restrictions on Employer
Matching Contributions). Amounts contributed in order to
satisfy the restrictions set forth in Subsection 3.1(f) shall
be considered "qualified matching contributions" (within the
meaning of Treasury regulation Section 1.401(k)-1(g)(13)) for
purposes of such Subsection, and amounts contributed in order
to satisfy the restrictions set forth in Subsection 3.2(c)
shall be considered Employer Matching Contributions for
purposes of the Plan. Any amounts contributed pursuant to this
Section shall be allocated in accordance with Subsections
4.2(e) and 4.2(f).
3.5 RETURN OF CONTRIBUTIONS. Anything to the contrary herein
notwithstanding, the Employer's contributions to the Plan are
contingent upon the deductibility of such contributions under section
404 of the Code. To the extent that a deduction for
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<PAGE> 24
contributions is disallowed, such contributions shall, upon the written
demand of the Employer, be returned to the Employer by the Trustee
within one year after the date of disallowance, reduced by any net
losses of the Trust Fund attributable thereto but not increased by any
net earnings of the Trust Fund attributable thereto, which net earnings
shall be treated as a forfeiture. Moreover, if Employer contributions
are made under a mistake of fact, such contributions shall, upon the
written demand of the Employer, be returned to the Employer by the
Trustee within one year after the payment thereof, reduced by any net
losses of the Trust Fund attributable thereto but not increased by any
net earnings of the Trust Fund attributable thereto, which net earnings
shall be treated as a forfeiture.
3.6 DISPOSITION OF EXCESS DEFERRALS AND EXCESS CONTRIBUTIONS.
(a) Anything to the contrary herein notwithstanding, any (i)
Salary Reduction Contributions to the Plan for a calendar year
on behalf of a Participant in excess of the limitations set
forth in Subsection 3.1(e) and (ii) "excess deferrals" from
other plans that are allocated to the Plan by such Participant
no later than March 1 of the next following calendar year
within the meaning of, and pursuant to the provisions of,
section 402(g)(2) of the Code shall be distributed to such
Participant not later than April 15 of the next following
calendar year.
(b) Anything to the contrary herein notwithstanding, if for any
Plan Year the aggregate Salary Reduction Contributions made by
the Employer on behalf of Highly Compensated Employees exceeds
the maximum amount of Salary Reduction Contributions permitted
on behalf of such Highly Compensated Employees pursuant to
Subsection 3.1(f), such excess (determined by reducing Salary
Reduction Contributions on behalf of Highly Compensated
Employees in order of the highest dollar amounts contributed
on behalf of such Highly Compensated Employees in accordance
with section 401(k)(8)(C) of the Code and the Treasury
regulations thereunder) shall be distributed to the Highly
Compensated Employees on whose behalf such excess was
contributed before the end of the next following Plan Year.
(c) Anything to the contrary herein notwithstanding, if, for any
Plan Year, the aggregate Employer Matching Contributions
allocated to the Accounts of Highly Compensated Employees
exceeds the maximum amount of such Employer Matching
Contributions permitted on behalf of such Highly Compensated
Employees pursuant to Subsection 3.2(c), such excess
(determined by reducing Employer Matching Contributions made
on behalf of Highly Compensated Employees in order of the
highest dollar amounts contributed on behalf of such Highly
Compensated Employees in accordance with section 401(m)(6)(C)
of the Code and Treasury regulations thereunder) shall be
distributed to the Highly Compensated Employees on whose
behalf such excess contributions were made (or, if such excess
contributions are forfeitable, they shall be forfeited) before
the end of the next following Plan Year.
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<PAGE> 25
(d) In coordinating the disposition of excess deferrals and excess
contributions pursuant to this Section, such excess deferrals
and excess contributions shall be disposed of in the following
order:
(1) First, Salary Reduction Contributions that constitute
excess deferrals described in Subsection 3.6(a) that
are not considered in determining the amount of
Employer Matching Contributions pursuant to Section
3.2 shall be distributed;
(2) Next, excess Salary Reduction Contributions that
constitute excess deferrals described in Subsection
3.6(a) that are considered in determining the amount
of Employer Matching Contributions pursuant to
Section 3.2 shall be distributed, and the Employer
Matching Contributions with respect to such excess
Salary Reduction Contributions shall be forfeited;
(3) Next, excess Salary Reduction Contributions described
in Subsection 3.6(b) that are not considered in
determining the amount of Employer Matching
Contributions pursuant to Section 3.2 shall be
distributed;
(4) Next, excess Salary Reduction Contributions described
in Subsection 3.6(b) that are considered in
determining the amount of Employer Matching
Contributions pursuant to Section 3.2 shall be
distributed, and the Employer Matching Contributions
with respect to such excess Salary Reduction
Contributions shall be forfeited; and
(5) Finally, excess Employer Matching Contributions
described in Subsection 3.6(c) shall be distributed
(or, if forfeitable, forfeited).
(e) Any distribution or forfeiture of excess deferrals or excess
contributions pursuant to the provisions of this Section shall
be adjusted for income or loss allocated thereto in the manner
determined by the Committee in accordance with any method
permissible under applicable Treasury regulations. Any
forfeiture pursuant to the provisions of this Section shall be
considered to have occurred on the date that is 2 1/2 months
after the end of the Plan Year.
3.7 ROLLOVER CONTRIBUTIONS.
(a) Qualified Rollover Contributions may be made to the Plan by
any Eligible Employee of amounts received by such Eligible
Employee from certain individual retirement accounts or
annuities or from an employees' trust described in section
401(a) of the Code, which is exempt from tax under section
501(a) of the Code, but only if any such Rollover Contribution
is an "eligible rollover distribution" within the meaning of
section 402(f)(2)(A) of the Code and is made pursuant to and
in accordance with applicable provisions of the Code and
Treasury regulations promulgated thereunder. A Rollover
Contribution of such eligible rollover distribution may be
made to the Plan irrespective of whether such eligible
rollover distribution was paid to the Eligible Employee or
paid to the Plan as a "direct" Rollover Contribution. A direct
Rollover Contribution to the Plan may be effectuated only by
wire transfer directed to the Trustee or by issuance of a
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<PAGE> 26
check made payable to the Trustee that is negotiable only by
the Trustee and that identifies the Eligible Employee for
whose benefit the Rollover Contribution is being made. Any
Eligible Employee desiring to effect a Rollover Contribution
to the Plan must execute and file with the Committee the form
prescribed by the Committee for such purpose. The Committee
may require as a condition to accepting any Rollover
Contribution that such Eligible Employee furnish any evidence
that the Committee in its discretion deems satisfactory to
establish that the proposed Rollover Contribution is in fact
eligible for rollover to the Plan and is made pursuant to and
in accordance with applicable provisions of the Code and
Treasury regulations. All Rollover Contributions to the Plan
must be made in cash.
(b) An Eligible Employee who has made a Rollover Contribution in
accordance with this Section, but who has not otherwise become
a Participant in the Plan in accordance with Article II, shall
become a Participant coincident with such Rollover
Contribution; provided, however, that such Participant shall
not have a right to make deferrals or have Employer
Contributions made on his behalf until he has otherwise
satisfied the requirements imposed by Article II.
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<PAGE> 27
IV.
ALLOCATIONS AND LIMITATIONS
4.1 SUSPENDED AMOUNTS. All contributions, forfeitures, and the net income
or net loss of the Trust Fund shall be held in suspense until allocated
or applied as provided herein.
4.2 ALLOCATION OF CONTRIBUTIONS TO ACCOUNTS.
(a) Salary Reduction Contributions made by the Employer on a
Participant's behalf pursuant to Section 3.1 shall be
allocated to such Participant's Salary Reduction Contribution
Account.
(b) The Employer Matching Contributions made pursuant to
Subsections 3.2(a) and 3.2(b) shall be allocated to the
Employer Contribution Accounts of the Participants for whom
such contributions were made.
(c) The Employer Retirement Savings Contribution, if any, made
pursuant to Section 3.3 for a Plan Year shall be allocated to
the Employer Contribution Accounts of the Participants
eligible to receive an allocation of such contribution. The
allocation to each such eligible Participant's Employer
Contribution Account shall be (i) in the case of the Employer
Retirement Savings Contribution made pursuant to Subsection
3.3(a), the portion of such Employer Retirement Savings
Contribution that is in the same proportion that such
Participant's Compensation for such Plan Year bears to the
total of all such eligible Participants' Compensation for such
Plan Year and (ii) in the case of the Employer Retirement
Savings Contribution made pursuant to Subsection 3.3(b), the
amount of such Employer Retirement Savings Contribution made
on behalf of such Participant in accordance with Subsection
3.3(b).
(d) The Employer Fail Safe Contribution, if any, made pursuant to
Section 3.4 for a Plan Year in order to satisfy the
restrictions set forth in Subsection 3.1(f) shall be allocated
to the Salary Reduction Contribution Accounts of Participants
who (i) received an allocation of Salary Reduction
Contributions for such Plan Year and (ii) were not Highly
Compensated Employees for such Plan Year (with each such
Participant individually hereinafter referred to as an
"Eligible Participant" for purposes of this Subsection). Such
allocation shall be made, first, to the Salary Reduction
Contribution Account of the Eligible Participant who received
the least amount of Compensation for such Plan Year until the
limitation set forth in Section 4.6 has been reached as to
such Eligible Participant, then to the Salary Reduction
Contribution Account of the Eligible Participant who received
the next smallest amount of Compensation for such Plan Year
until the limitation set forth in Section 4.6 has been reached
as to such Eligible Participant, and continuing in such manner
until the Employer Fail Safe Contribution for such Plan Year
has been completely allocated or the limitation set forth in
Section 4.6 has been reached as to all Eligible Participants.
Any remaining Employer Fail Safe Contribution for such Plan
Year shall be allocated among the Salary Reduction
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<PAGE> 28
Contribution Accounts of all Participants who were Eligible
Employees during such Plan Year, with the allocation to each
such Participant's Salary Reduction Contribution Account being
the portion of such remaining Employer Fail Safe Contribution
which is in the same proportion that such Participant's
Compensation for such Plan Year bears to the total of all such
Participants' Compensation for such Plan Year.
(e) The Employer Fail Safe Contribution, if any, made pursuant to
Section 3.4 for a Plan Year in order to satisfy the
restrictions set forth in Subsection 3.2(c) shall be allocated
to the Employer Contribution Accounts of Participants who (i)
received an allocation of Employer Matching Contributions for
such Plan Year and (ii) were not Highly Compensated Employees
for such Plan Year (with each such Participant individually
hereinafter referred to as an "Eligible Participant" for
purposes of this Subsection). Such allocation shall be made,
first, to the Employer Contribution Account of the Eligible
Participant who received the least amount of Compensation for
such Plan Year until the limitation set forth in Section 4.6
has been reached as to such Eligible Participant, then to the
Employer Contribution Account of the Eligible Participant who
received the next smallest amount of Compensation for such
Plan Year until the limitation set forth in Section 4.6 has
been reached as to such Eligible Participant, and continuing
in such manner until the Employer Fail Safe Contribution for
such Plan Year has been completely allocated or the limitation
set forth in Section 4.6 has been reached as to all Eligible
Participants. Any remaining Employer Fail Safe Contribution
for such Plan Year shall be allocated among the Employer
Contribution Accounts of all Participants who were Eligible
Employees during such Plan Year, with the allocation to each
such Participant's Employer Contribution Account being the
portion of such remaining Employer Fail Safe Contribution
which is in the same proportion that such Participant's
Compensation for such Plan Year bears to the total of all such
Participants' Compensation for such Plan Year.
(f) If an Employer Fail Safe Contribution is made in order to
satisfy the restrictions set forth in both Subsection 3.1(f)
and Subsection 3.2(c) for the same Plan Year, the Employer
Fail Safe Contribution made in order to satisfy the
restrictions set forth in Subsection 3.1(f) shall be allocated
(pursuant to Subsection 4.2(f)) prior to allocating the
Employer Fail Safe Contribution made in order to satisfy the
restrictions set forth in Subsection 3.2(c) (pursuant to
Subsection 4.2(f)). In determining the application of the
limitations set forth in Section 4.6 to the allocations of
Employer Fail Safe Contributions, all Annual Additions (as
such term is defined in Section 4.6) to a Participant's
Accounts other than Employer Fail Safe Contributions shall be
considered allocated prior to Employer Fail Safe
Contributions.
4.3 TIME OF ALLOCATION OF CONTRIBUTIONS. All contributions to the Plan
shall be considered allocated to Participants' Accounts when received
by the Trustee, but no later than the last day of the Plan Year for
which they were made, as determined pursuant to Article III, except
that, for purposes of valuation of the Participants' Accounts under
Section 4.5, contributions shall be considered allocated to
Participants' Accounts only when received by the Trustee
notwithstanding that this may be later than the last day of the Plan
Year for which such contributions were made.
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4.4 APPLICATION OF FORFEITURES. Any amounts that are forfeited under any
provision hereof during a Plan Year shall be applied in the manner
determined by the Committee to reduce Employer Contributions or to pay
expenses incident to the administration of the Plan and Trust. Prior to
such application, forfeited amounts shall be invested in the Investment
Fund(s) designated from time to time by the Committee.
4.5 VALUATION OF ACCOUNTS. All amounts contributed to the Trust Fund shall
be invested as soon as administratively feasible following their
receipt by the Trustee, and the balance of each Account shall reflect
the result of daily pricing of the assets in which such Account is
invested from the time of receipt by the Trustee until the time of
distribution. Such daily pricing shall include the valuation of assets
of the Investment Funds in which each such Account is invested, the
earnings and losses attributable to such Investment Fund allocable to
each such Account, and the payment of any expenses or fees charged
against each such Account. In the case of any contributions temporarily
held in suspense pursuant to Section 4.1, any earnings (or losses)
attributable to such contributions during such period of suspension
shall be allocated to the Accounts of Participants receiving an
allocation of such contributions under any reasonable allocation method
determined by the Committee.
4.6 CODE SECTION 415 LIMITATIONS AND CORRECTIONS.
(a) Contrary Plan provisions notwithstanding, in no event shall
the Annual Additions credited to a Participant's Accounts for
any Limitation Year exceed the Maximum Annual Additions for
such Participant for such year. For purposes of determining
whether the Annual Additions under this Plan exceed the
limitations herein provided, all defined contribution plans of
the Employer are to be treated as one defined contribution
plan. In addition, all defined contribution plans of
Controlled Entities (as defined in Subsection 4.6(c)) shall be
aggregated for this purpose.
(b) If as a result of a reasonable error in estimating a
Participant's compensation, a reasonable error in determining
the amount of elective deferrals (within the meaning of
section 402(g)(3) of the Code) that may be made with respect
to any individual under the limits of section 415 of the Code,
or because of other limited facts and circumstances, the
Annual Additions that would be credited to a Participant's
Accounts for a Limitation Year would nonetheless exceed the
Maximum Annual Additions for such Participant for such year,
the excess Annual Additions that, but for this Section, would
have been allocated to such Participant's Accounts shall be
disposed of as follows:
(1) First, any such excess Annual Additions in the form
of Salary Reduction Contributions on behalf of such
Participant that would not have been considered in
determining the amount of Employer Matching
Contributions pursuant to Section 3.2 shall be
distributed to such Participant, adjusted for income
or loss allocated thereto;
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(2) Next, any such excess Annual Additions in the form of
Salary Reduction Contributions on behalf of such
Participant that would have been considered in
determining the amount of Employer Matching
Contributions pursuant to Section 3.2 shall be
distributed to such Participant, adjusted for income
or loss allocated thereto, and the Employer Matching
Contributions that would have been allocated to such
Participant's Accounts based upon such distributed
Salary Reduction Contributions shall, to the extent
such amounts would have otherwise been allocated to
such Participant's Accounts, be treated as a
forfeiture;
(3) Finally, any such excess Annual Additions in the form
of Employer Retirement Savings Contributions shall,
to the extent such amounts would otherwise have been
allocated to such Participant's Accounts, be treated
as a forfeiture.
If the Annual Additions credited to a Participant's
Accounts for any Limitation Year under this Plan plus
the additions credited on his behalf under other
defined contribution plans required to be aggregated
pursuant to this Subsection would exceed the Maximum
Annual Additions for such Participant for such
Limitation Year, the Annual Additions under this Plan
and the additions under such other plans shall be
reduced on a pro rata basis and allocated,
reallocated, or returned in accordance with
applicable plan provisions regarding Annual Additions
in excess of Maximum Annual Additions.
(c) For purposes of this Section, the following terms and phrases
when capitalized shall have these respective meanings:
(1) ANNUAL ADDITIONS: With respect to a Participant for
any Limitation Year, the total of (i) the Employer
Contributions, Salary Reduction Contributions, and
forfeitures, if any, allocated to such Participant's
Accounts for such year, (ii) Participant's
contributions, if any, (excluding any Rollover
Contributions) for such year, and (iii) amounts
referred to in sections 415(l)(1) and 419A(d)(2) of
the Code.
(2) CONTROLLED ENTITY: For purposes of this Section only,
a "Controlled Entity" as defined in Subsection
1.1(j), but excluding an affiliated service group
member within the meaning of section 414(m) of the
Code and determined by application of a more than a
50% control standard in lieu of an 80% control
standard.
(3) MAXIMUM ANNUAL ADDITIONS: With respect to a
Participant for any Limitation Year, the lesser of
(i) $30,000 (with such amount to be adjusted
automatically to reflect any cost-of-living
adjustment authorized by section 415(d) of the Code)
or (ii) 25% of such Participant's Compensation during
such Limitation Year.
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(d) If the Committee determines that a reduction of the Considered
Compensation and Bonus deferral elections, if any, made
pursuant to Section 3.1 is necessary to ensure that the
limitations set forth in this Section are met for any
Limitation Year, the Considered Compensation or Bonus deferral
elections of affected Participants made pursuant to Section
3.1 may be reduced by the Committee on a temporary and
prospective basis in such manner as the Committee shall
determine.
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V.
INVESTMENT OF ACCOUNTS
5.1 INVESTMENT OF ACCOUNTS BY PARTICIPANTS. Each Participant shall
designate, in accordance with the following Subsections and the
procedures established from time to time by the Committee, the manner
in which the amounts allocated to each of his Accounts shall be
invested among the Investment Funds made available from time to time by
the Committee for this purpose.
(a) A Participant may designate one of such Investment Funds for
all amounts allocated to his Accounts, or he may split the
investment of such amounts among such Investment Funds in such
increments as the Committee may prescribe. If a Participant
fails to make a designation with respect to all or any of such
amounts, then such non-designated amounts shall be invested in
the Investment Fund or Investment Funds designated by the
Committee from time to time in a uniform and nondiscriminatory
manner.
(b) A Participant may (i) change his investment designation for
future contributions to be allocated to his Accounts or (ii)
convert his investment designation with respect to amounts
already allocated to his Accounts. Any such change shall be
made in accordance with the procedures established by the
Committee, and the frequency of such changes may be limited by
the Committee.
Effective September 1, 2000, a Participant's "Accounts" for purposes of
this Section 5.1 shall include all Accounts of the Participant.
Effective for periods prior to September 1, 2000, a Participant's
"Accounts" shall include only those Accounts of the Participant that
are 100% vested.
5.2 RESTRICTION ON ACQUISITION OF COMPANY STOCK. Notwithstanding any other
provision hereof, it is specifically provided that the Trustee shall
not purchase Company Stock or other Company securities during any
period in which such purchase is, in the opinion of counsel for the
Company or the Committee, restricted by any law or regulation
applicable thereto. During such period, amounts that would otherwise be
invested in Company Stock or other Company securities pursuant to an
investment designation shall be invested in such other assets as the
Trustee may in its discretion determine, or the Trustee may hold such
amounts uninvested for a reasonable period pending the purchase of such
stock or securities.
5.3 PASS-THROUGH VOTING OF COMPANY STOCK. To the extent permitted by
section 404(a) of ERISA, at each annual meeting and special meeting of
the shareholders of the Company, a Participant may direct the voting of
the number of whole shares of Company Stock attributable to his
Accounts as of the Valuation Date coinciding with or, if none, next
preceding the record date for such meeting. The Committee shall forward
or cause to be forwarded to each such Participant copies of pertinent
proxy solicitation materials provided by the Company together with a
request for such Participant's confidential instructions as to the
manner in which such shares are to be voted. The Committee shall direct
the Trustee to vote such shares in accordance with such instructions
and, to the extent permitted by section 404(a) of ERISA, shall also
direct the Trustee as to the manner in which to vote any shares of
Company Stock at any such meeting for which the Committee has not
received, or is not subject to receiving, such voting instructions.
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<PAGE> 33
5.4 STOCK RIGHTS, STOCK SPLITS, AND STOCK DIVIDENDS. No Participant shall
have any right to request, direct, or demand that the Committee or the
Trustee exercise on his behalf rights or privileges to acquire,
convert, or exchange Company Stock or other securities. The Trustee
shall exercise or sell any such rights or privileges as directed by the
Committee. Company Stock received by the Trustee by reason of a stock
split, stock dividend, or recapitalization shall be appropriately
allocated to the Accounts of each affected Participant.
5.5 PARTICIPANT RIGHTS. For purposes of Article V only, the beneficiary of
a deceased Participant and any alternate payee under a qualified
domestic relations order (as defined in Section 17.2) shall have the
rights of a Participant.
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VI.
IN-SERVICE WITHDRAWALS
6.1 AGE 59 1/2 WITHDRAWALS. A Participant who has attained age fifty-nine
and one-half may withdraw from his Accounts an amount not exceeding the
then value of his Vested Interest in such Accounts. Such withdrawal
shall come, first, from such Participant's Rollover Contribution
Account, second, from his Vested Interest in his Employer Contribution
Account, and, finally, from his Salary Reduction Contribution Account.
6.2 FINANCIAL HARDSHIP WITHDRAWALS.
(a) A Participant who has a "financial hardship," as determined by
the Committee, and who has made all available withdrawals
pursuant to Section 6.1 and pursuant to the provisions of any
other plans of the Employer and any Controlled Entities of
which he is a member and who has obtained all available loans
pursuant to Article IX and pursuant to the provisions of any
other plans of the Employer and any Controlled Entities of
which he is a member may withdraw from his Employer
Contribution Account, his Rollover Contribution Account, and
his Salary Reduction Contribution Account amounts not to
exceed the lesser of (i) such Participant's Vested Interest in
such Accounts or (ii) the amount determined by the Committee
as being available for withdrawal pursuant to this Subsection.
Such withdrawal shall come, first, from the Participant's
Rollover Contribution Account, second, from his Vested
Interest in his Employer Contribution Account, and, finally,
from his Salary Reduction Contribution Account.
(b) For purposes of this Section, "financial hardship" shall mean
the immediate and heavy financial needs of the Participant. A
withdrawal based upon financial hardship pursuant to this
Section shall not exceed the amount that is both required to
meet the immediate financial needs created by the hardship and
not reasonably available from other resources of the
Participant. The amount required to meet the Participant's
immediate financial needs may include any amounts necessary to
pay any federal, state, or local income taxes or penalties
reasonably anticipated to result from the distribution. The
determination of the existence of a Participant's financial
hardship and the amount required to be distributed to meet the
needs created by the hardship shall be made by the Committee.
The decision of the Committee shall be final and binding,
provided that all Participants similarly situated shall be
treated in a uniform and nondiscriminatory manner. A
withdrawal shall be deemed to be made on account of the
immediate and heavy financial needs of a Participant if the
withdrawal is for:
(1) Expenses for medical care described in section 213(d)
of the Code previously incurred by the Participant,
the Participant's spouse, or any dependents of the
Participant (as defined in section 152 of the Code)
or necessary for those persons to obtain medical care
described in section 213(d) of the Code and not
reimbursed or reimbursable by insurance;
(2) Costs directly related to the purchase of a principal
residence of the Participant (excluding mortgage
payments);
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(3) Payment of tuition and related educational fees, and
room and board expenses, for the next twelve months
of post-secondary education for the Participant or
the Participant's spouse, children, or dependents (as
defined in section 152 of the Code);
(4) Payments necessary to prevent the eviction of the
Participant from his principal residence or the
foreclosure on the mortgage of the Participant's
principal residence; or
(5) Such other financial needs that the Commissioner of
Internal Revenue may deem to be immediate and heavy
financial needs through the publication of revenue
rulings, notices, and other documents of general
applicability.
(c) The above Subsections of this Section notwithstanding, in
addition to the restrictions on all in-service withdrawals set
forth in Section 6.3, the following restrictions on financial
hardship withdrawals under this Section shall apply:
(1) Withdrawals under this Section from a Participant's
Salary Reduction Contribution Account shall be
limited to the sum of the Participant's Salary
Reduction Contributions to the Plan, plus income
allocable thereto and credited to the Participant's
Salary Reduction Account as of December 31, 1988,
less any previous withdrawals of such amounts;
(2) Employer Contributions used to satisfy the
restrictions set forth in Subsection 3.1(f), and
income allocable thereto, shall not be subject to
withdrawal under this Section; and
(3) A Participant who makes a withdrawal from his Salary
Reduction Contribution Account under this Section may
not (i) make elective contributions or employee
contributions to the Plan or any other qualified or
nonqualified plan of the Employer or any Controlled
Entity for a period of twelve months following the
date of such withdrawal or (ii) make elective
contributions under the Plan or any other plan
maintained by the Employer or any Controlled Entity
for such Participant's taxable year immediately
following the taxable year of the withdrawal in
excess of the applicable limit set forth in
Subsection 3.1(e) for such next taxable year less the
amount of such Participant's elective contributions
for the taxable year of the withdrawal.
6.3 RESTRICTIONS ON IN-SERVICE WITHDRAWALS.
(a) All withdrawals pursuant to this Article shall be made only in
the manner and within the time prior to the proposed date of
withdrawal prescribed by the Committee.
(b) No withdrawal shall be made from an Account to the extent such
Account has been pledged to secure a loan from the Plan.
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(c) If a Participant's Account from which a withdrawal is made is
invested in more than one Investment Fund, the withdrawal
shall be made pro rata from each Investment Fund in which such
Account is invested.
(d) All withdrawals under this Article shall be paid in cash.
(e) Any withdrawal hereunder that constitutes an Eligible Rollover
Distribution shall be subject to the Direct Rollover election
described in Article VII.
(f) This Article shall not be applicable to a Participant
following termination of employment with the Employer, and the
amounts in such Participant's Accounts shall be distributable
only in accordance with the provisions of Article VII.
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VII.
DISTRIBUTIONS AFTER SEPARATION FROM SERVICE
7.1 RETIREMENT BENEFITS. A Participant who terminates his employment with
the Employer and all Controlled Entities on or after his Normal
Retirement Date shall be entitled to a "retirement benefit," payable at
the time and in the form provided in Article VIII. A Participant's
retirement benefit shall be equal to the value of his Accounts on his
Benefit Commencement Date.
7.2 DISABILITY BENEFITS. In the event a Participant becomes totally and
permanently disabled, as determined pursuant to this subsection, such
Participant shall be entitled to a "disability benefit," payable at the
time and in the form provided in Article VIII. A Participant's
disability benefit shall be equal to the value of his Accounts on his
Benefit Commencement Date. A Participant shall be considered totally
and permanently disabled if the Committee determines, based on a
written medical opinion (unless waived by the Committee as
unnecessary), that such Participant is permanently incapable of
performing his job for physical or mental reasons and has incurred a
"disability" within the meaning of section 401(k)(2)(B)(i)(I) of the
Code.
7.3 DEATH BENEFITS. Upon the death of a Participant while an Employee or an
employee of a Controlled Entity, the Participant's designated
beneficiary shall be entitled to a "death benefit," payable at the time
and in the form provided in Article VIII. A Participant's death benefit
shall be equal to the value of his Accounts on his Benefit Commencement
Date.
(a) Each Participant shall have the right to designate the
beneficiary or beneficiaries to receive payment of his benefit
in the event of his death. Each such designation shall be made
by executing the beneficiary designation form prescribed by
the Committee and filing such form with the Committee. Any
such designation may be changed at any time by such
Participant by execution and filing of a new designation in
accordance with this Section. Notwithstanding the foregoing,
if a Participant who is married on the date of his death has
designated an individual or entity other than his surviving
spouse as his beneficiary, such designation shall not be
effective unless (i) such surviving spouse has consented
thereto in writing and such consent (A) acknowledges the
effect of such specific designation, (B) either consents to
the specific designated beneficiary (which designation may not
subsequently be changed by the Participant without spousal
consent) or expressly permits such designation by the
Participant without the requirement of further consent by such
spouse, and (C) is witnessed by a Plan representative (other
than the Participant) or a notary public or (ii) the consent
of such spouse cannot be obtained because such spouse cannot
be located or because of other circumstances described by
applicable Treasury Regulations. Any such consent by such
surviving spouse shall be irrevocable.
(b) If no beneficiary designation is on file with the Committee at
the time of the death of the Participant or if such
designation is not effective for any reason as
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determined by the Committee, the designated beneficiary or
beneficiaries to receive such death benefit shall be as
follows:
(1) If a Participant leaves a surviving spouse, his
designated beneficiary shall be such surviving
spouse; and
(2) If a Participant leaves no surviving spouse, his
designated beneficiary shall be (i) such
Participant's executor or administrator or (ii) his
heirs at law if there is no administration of such
Participant's estate.
(c) Notwithstanding the preceding provisions of this Section and
to the extent not prohibited by state or federal law, if a
Participant is divorced from his spouse and at the time of his
death is not remarried to the person from whom he was
divorced, any designation of such divorced spouse as his
beneficiary under the Plan filed prior to the divorce shall be
null and void unless the contrary is expressly stated in
writing filed with the Committee by the Participant. The
interest of such divorced spouse failing hereunder shall vest
in the persons specified in Subsection 7.3(b) as if such
divorced spouse did not survive the Participant.
7.4 SEPARATION FROM SERVICE PRIOR TO RETIREMENT. Each Participant whose
employment with the Employer and all Controlled Entities is terminated
prior to his Normal Retirement Date for any reason other than total and
permanent disability or death shall be entitled to a "termination
benefit," payable at the time and in the form provided in Article VIII.
A Participant's termination benefit shall be equal to his Vested
Interest in the value of his Accounts on his Benefit Commencement Date.
(a) DETERMINATION OF VESTED INTEREST.
(1) A Participant shall have a 100% Vested Interest in
his Salary Reduction Contribution Account and his
Rollover Contribution Account at all times.
(2) A Participant's Vested Interest in his Employer
Contribution Account shall be determined by such
Participant's years of Vesting Service in accordance
with the following schedule:
<Table>
<Caption>
YEARS OF VESTING SERVICE VESTED INTEREST
------------------------ ---------------
<S> <C> <C>
Less than 1 year 0%
1 year 20%
2 years 40%
3 years 60%
4 years 80%
5 years or more 100%
</Table>
(3) Notwithstanding Subsection 7.4(a)(2), with respect to
any Participant who was a Participant in the Plan on
the day prior to the Effective Date, in no event
shall such Participant's Vested Interest in his
Employer Contribution Account after the Effective
Date be less than such Vested Interest would have
been had the Plan provisions prior to such date been
in effect.
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(4) Notwithstanding Subsection 7.4(a)(2), a Participant
shall have a 100% Vested Interest in his Employer
Contribution Account upon the earliest to occur of
(i) the attainment of his Normal Retirement Date
while employed by the Employer or a Controlled
Entity, (ii) the date such Participant is determined
by the Committee to be "totally and permanently
disabled" (as later defined in this Subsection),
(iii) the death of such Participant while an Employee
or an employee of a Controlled Entity, or (iv) if
such Participant is an affected Participant, the
occurrence of an event described in, and under the
conditions set forth in, Article XIV. For purposes of
Clause (ii) of the preceding sentence, "totally and
permanently disabled" shall mean either "totally and
permanently disabled" as defined in Section 7.2 or a
determination by the Committee that, because of
physical or mental reasons, the Participant is
permanently incapable of performing any duties for
the Employer or a Controlled Entity.
(b) CREDITING OF VESTING SERVICE.
(1) For the period preceding the Effective Date, subject
to the provisions of Section 7.4(c), an individual
shall be credited with Vesting Service in an amount
equal to all service credited to him for vesting
purposes under the Plan as it existed on the day
prior to the Effective Date.
(2) On and after the Effective Date, subject to the
remaining Subsections of this Section and to the
provisions of Section 7.4(c), an individual shall be
credited with Vesting Service in an amount equal to
his aggregate Periods of Service whether or not such
Periods of Service are completed consecutively. The
completion of 365 days of Periods of Service shall
constitute one year of Vesting Service.
(c) FORFEITURE OF VESTING SERVICE.
(1) In the case of an individual who terminates
employment with the Employer and all Controlled
Entities at a time when he has a 0% Vested Interest
in his Employer Contribution Account and who then
incurs a Period of Severance that equals or exceeds
the greater of five years or his aggregate Periods of
Service completed before such Period of Severance,
such individual's Periods of Service completed before
such Period of Severance shall be forfeited and
completely disregarded in determining his years of
Vesting Service.
(2) In the case of a Participant who terminates
employment with the Employer and all Controlled
Entities at a time when he has a Vested Interest in
his Employer Contribution Account of more than 0% but
less than 100% and then incurs a Period of Severance
of five consecutive years, such Participant's Periods
of Service completed after such Period of Severance
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<PAGE> 40
shall be disregarded for purposes of determining such
Participant's Vested Interest in any Plan benefits
derived from Employer Contributions made on his
behalf before such Period of Severance, but such
Participant's Periods of Service completed before
such Period of Severance shall not be disregarded in
determining his Vested Interest in any Plan benefits
derived from Employer Contributions made on his
behalf after such Period of Severance.
(3) A Participant who terminates employment with the
Employer and all Controlled Entities at a time when
he has a 100% Vested Interest in his Employer
Contribution Account shall not forfeit any of his
Vesting Service for purposes of determining such
Participant's Vested Interest in any Plan benefits
derived from Employer Contributions made on his
behalf.
(d) FORFEITURES OF NONVESTED ACCOUNT BALANCE.
(1) With respect to a Participant who terminates
employment with the Employer and all Controlled
Entities with a Vested Interest in his Employer
Contribution Account that is less than 100% and
receives a distribution from the Plan of the balance
of his Vested Interest in his Accounts in the form of
a lump sum distribution by the close of the second
Plan Year following the Plan Year in which his
employment is terminated, the nonvested portion of
such terminated Participant's Employer Contribution
Account as of the Valuation Date next preceding his
Benefit Commencement Date shall become a forfeiture
as of his Benefit Commencement Date (or as of his
date of termination of employment with the Employer
and all Controlled Entities if no amount is payable
from the Trust Fund on behalf of such Participant
with such Participant being considered to have
received a distribution of zero dollars on his date
of termination of employment).
(2) With respect to a Participant who terminates
employment with the Employer and all Controlled
Entities with a Vested Interest in his Employer
Contribution Account less than 100% and who is not
otherwise subject to the forfeiture provisions of
Subsection 7.4(d)(1), the nonvested portion of his
Employer Contribution Account shall be forfeited as
of the earlier of (i) the date the Participant
completes a Period of Severance of five consecutive
years or (ii) the date of the terminated
Participant's death.
(e) RESTORATION OF FORFEITED ACCOUNT BALANCE. In the event that
the nonvested portion of a terminated Participant's Employer
Contribution Account becomes a forfeiture, the terminated
Participant shall, upon subsequent reemployment with the
Employer or a Controlled Entity prior to incurring a Period of
Severance of five consecutive years, have the forfeited amount
restored to such Participant's Employer Contribution Account,
unadjusted by any subsequent gains or losses of the Trust
Fund; provided, however, that such restoration shall be made
only if such Participant repays in cash an amount equal to the
amount so distributed to him within five years from the date
the Participant is reemployed; provided, further, that such
Participant's repayment of amounts distributed to
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him from his Salary Reduction Contribution Account shall be
limited to the portion thereof that was attributable to
contributions with respect to which the Employer made Employer
Matching Contributions. A reemployed Participant who was not
entitled to a distribution from the Plan on his date of
termination of employment shall be considered to have repaid a
distribution of zero dollars on the date of his reemployment.
Any such restoration shall be made as of the Valuation Date
coincident with or next succeeding the date of repayment.
Notwithstanding anything to the contrary in the Plan,
forfeited amounts to be restored by the Employer pursuant to
this Section shall be charged against and deducted from
forfeitures for the Plan Year in which such amounts are
restored. If such forfeitures otherwise available are not
sufficient to provide such restoration, the portion of such
restoration not provided by forfeitures shall be charged
against and deducted from Employer Retirement Savings
Contributions otherwise available for allocation to other
Participants, and any additional amount needed to restore such
forfeited amounts shall be a minimum required Employer
Retirement Savings Contribution (which shall be made without
regard to current or accumulated earnings and profits).
(f) SPECIAL FORMULA FOR DETERMINING VESTED INTEREST FOR PARTIAL
ACCOUNTS. With respect to a Participant whose Vested Interest
in his Employer Contribution Account is less than 100% and who
makes a withdrawal from or receives a termination distribution
from his Employer Contribution Account other than a lump sum
distribution by the close of the second Plan Year following
the Plan Year in which his employment is terminated, any
amount remaining in his Employer Contribution Account shall
continue to be maintained as a separate account. At any
relevant time, such Participant's nonforfeitable portion of
his separate account shall be determined in accordance with
the following formula:
X=P(AB + (R X D)) - (R X D)
For purposes of applying the formula: X is the amount of such
separate account in which the Participant has a Vested
Interest at the relevant time; P is the Participant's Vested
Interest in his Employer Contribution Account at the relevant
time; AB is the balance of such separate account at the
relevant time; R is the ratio of the balance of such separate
account at the relevant time to the balance of such separate
account after the withdrawal or distribution; and D is the
amount of the withdrawal or distribution. For all other
purposes of the Plan, a Participant's separate account shall
be treated as an Employer Contribution Account. Upon his
incurring a Period of Severance of five consecutive years, the
forfeitable portion of a Participant's separate account and
Employer Contribution Account shall be forfeited as of the end
of the Plan Year during which the Participant completes such
Period of Severance if not forfeited earlier pursuant to the
provisions of Section 6.4(d)(1).
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VIII.
TIME AND FORM OF PAYMENT OF BENEFITS
8.1 TIME OF PAYMENT. A Participant's benefit shall be paid or commence, as
applicable, on his Benefit Commencement Date. Any amount allocable to a
Participant's Accounts after his Benefit Commencement Date shall be
distributed, as soon as administratively feasible after the date that
such amount is paid to the Trust Fund and allocated to his Accounts.
8.2 DETERMINATION OF BENEFIT COMMENCEMENT DATE.
(a) Subject to the provisions of the remaining Subsections of this
Section, a Participant's Benefit Commencement Date shall be
the date that is as soon as administratively feasible after
the date the Participant or his beneficiary becomes entitled
to a benefit pursuant to Article VII.
(b) As provided in Subsection 8.2(g) and in Section 8.4 unless a
terminated Participant consents to a distribution pursuant to
Subsection 8.2(a), his Benefit Commencement Date shall be
deferred beyond the date specified in Subsection 8.2(a) to the
date that is as soon as administratively feasible after the
earliest of (i) the date the Participant attains age
sixty-five, (ii) the Participant's date of death, or (iii) the
date the Participant (or, if applicable, his beneficiary)
elects by written notice to the Committee prior to such date.
The Committee shall furnish information to each Participant or
beneficiary pertinent to such Participant's or beneficiary's
consent no less than thirty days (unless such thirty-day
period is waived by an affirmative election in accordance with
applicable Treasury regulations) and no more than ninety days
before such Participant's Benefit Commencement Date, and the
furnished information shall include a general description of
the material features of, and an explanation of the relative
values of, the alternative forms of benefit available under
the Plan and must inform the Participant (or, if applicable,
his beneficiary) of his right to defer his Benefit
Commencement Date and of his Direct Rollover right pursuant to
Section 8.5 below, if applicable.
(c) Except as otherwise specifically provided in this Section 8.2,
a Participant's Benefit Commencement Date shall in no event be
later than the sixtieth day following the close of the Plan
Year during which such Participant attains, or would have
attained, his Normal Retirement Date or, if later, terminates
his employment with the Employer and all Controlled Entities.
(d) A Participant's Benefit Commencement Date shall be in
compliance with the provisions of section 401(a)(9) of the
Code and applicable Treasury regulations thereunder and shall
in no event be later than:
(1) April 1 of the calendar year following the later of
(i) the calendar year in which such Participant
attains the age of seventy and one-half or (ii) the
calendar year in which such Participant terminates
his employment with the Employer and all Controlled
Entities (provided, however, that clause
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(ii) of this sentence shall not apply in the case of
a Participant who is a "five-percent owner" (as
defined in section 416 of the Code) with respect to
the Plan Year ending in the calendar year in which
such Participant attains the age of seventy and
one-half); and
(2) In the case of a benefit payable pursuant to Section
7.3, (i) if payable to other than the Participant's
spouse, the last day of the one-year period following
the death of such Participant or (ii) if payable to
the Participant's spouse, after the date upon which
such Participant would have attained the age of
seventy and one-half, unless such surviving spouse
dies before payments commence, in which case the
Benefit Commencement Date may not be deferred beyond
the last day of the one-year period following the
death of such surviving spouse.
The provisions of this Section notwithstanding, a
Participant may not elect to defer the receipt of his
benefit hereunder to the extent that such deferral
creates a death benefit that is more than incidental
within the meaning of section 401(a)(9)(G) of the
Code and applicable Treasury regulations thereunder.
(e) If (i) a Participant attained age seventy and one-half, but
did not terminate employment with the Employer and all
Controlled Entities prior to 1997, (ii) such Participant's
Benefit Commencement Date occurred prior to his termination of
employment pursuant to the provisions of Subsection 8.2(d) as
in effect prior to the Effective Date, (iii) such Participant
is an Employee, and (iv) such Participant was not a
"five-percent owner" (as defined in section 416 of the Code)
with respect to the Plan Year ending in the calendar year in
which such Participant attained the age of seventy and
one-half, such Participant may affirmatively elect to cease
the distribution of his Accounts hereunder until the time
described in Subsection 8.2(d)(1).
(f) Subject to the provisions of Subsection 8.2(d), a
Participant's Benefit Commencement Date shall not occur unless
the Article VI event entitling the Participant to a benefit
constitutes a distributable event described in section
401(k)(2)(B) of the Code and, in the case of an Section 7.1,
7.3 or 7.4 event, shall not occur while the Participant is
employed by the Employer or any Controlled Entity.
(g) Subject to the provisions of Subsection 8.2(d), a Participant
(other than a Participant who dies or whose Vested Interest in
his Accounts is not in excess of $5,000) must request and file
a claim for benefits in the manner prescribed by the Committee
before payment of his benefit will commence.
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8.3 FORMS OF BENEFITS.
(a) A Participant's benefit shall be paid (or transferred pursuant
to Section 8.5, if applicable) in a single lump sum payment.
Benefits shall be paid or transferred in cash.
(b) Effective only for periods prior to May 1, 2001, a Participant
whose Benefit Commencement Date was required to occur pursuant
to 8.2(d) may be paid in one of the following alternative
forms to be selected by such Participant or, in the absence of
such selection, by the Committee.
(1) A lump sum.
(2) Semi-annual or quarterly installment payments for any
term certain to such Participant or, in the event of
such Participant's death before the end of such term
certain, to his designated beneficiary. Upon the
death of a beneficiary who is receiving installment
payments under this Subsection, the remaining balance
in the Participant's Accounts shall be paid as soon
as administratively feasible, in one lump sum cash
payment, to the beneficiary's executor or
administrator or to his heirs at law if there is no
administration of such beneficiary's estate.
8.4 CASH-OUT OF BENEFIT NOT IN EXCESS OF $5,000. Notwithstanding any
provision of the Plan to the contrary, if a Participant terminates his
employment with the Employer and all Controlled Entities and his Vested
Interest in his Accounts is not in excess of $5,000, such Participant's
benefit shall be paid in one lump sum cash payment in lieu of any other
form of benefit herein provided. Any such payment shall be made at the
time specified in Subsection 8.2(a) without regard to the consent
restrictions of Subsection 8.2(b). The provisions of this Section shall
not be applicable to a Participant following his Benefit Commencement
Date.
8.5 DIRECT ROLLOVER ELECTION. Notwithstanding any provision of the Plan to
the contrary that would otherwise limit a Distributee's election under
this Section, a Distributee may elect, at the time and in the manner
prescribed by the Committee, to have all or any portion of an Eligible
Rollover Distribution (other than any portion attributable to the
offset of an outstanding loan balance of such Participant pursuant to
the Plan's loan procedure) paid directly to an Eligible Retirement Plan
specified by the Distributee in a Direct Rollover. The preceding
sentence notwithstanding, a Distributee may elect a Direct Rollover
pursuant to this Section only if such Distributee's Eligible Rollover
Distributions during the Plan Year are reasonably expected to total
$200 or more. Furthermore, if less than 100% of the Participant's
Eligible Rollover Distribution is to be a Direct Rollover, the amount
of the Direct Rollover must be $500 or more. Prior to any Direct
Rollover pursuant to this Section, the Committee may require the
Distributee to furnish the Committee with a statement from the plan,
account, or annuity to which the benefit is to be transferred verifying
that such plan, account, or annuity is, or is intended to be, an
Eligible Retirement Plan. Notwithstanding the above, any financial
hardship withdrawal made to a Participant pursuant to Article VI shall
not qualify as an Eligible Rollover Distribution and the Participant
shall not be entitled to make a direct rollover election with respect
to such distribution.
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8.6 PAYEE OF BENEFITS. Unless otherwise provided in the Plan, a
Participant's benefit shall be paid to such Participant unless the
Participant has died, in which case such Participant's benefit shall be
paid to his beneficiary designated in Section 7.3.
8.7 BENEFITS FROM ACCOUNT BALANCES. With respect to any benefit payable in
any form pursuant to the Plan, such benefit shall be provided from the
Account balance(s) to which the particular Participant or beneficiary
is entitled.
8.8 UNCLAIMED BENEFITS. In the case of a benefit payable on behalf of a
Participant, if the Committee is unable to locate the Participant or
beneficiary to whom such benefit is payable, upon the Committee's
determination thereof, such benefit shall be forfeited. Notwithstanding
the foregoing, if subsequent to any such forfeiture the Participant or
beneficiary to whom such benefit is payable makes a valid claim for
such benefit, such forfeited benefit shall be restored to the Plan in
the manner provided in Section 7.4(e).
8.9 CLAIMS REVIEW.
(a) In any case in which a claim for Plan benefits of a
Participant or beneficiary is denied or modified, the
Committee shall furnish written notice to the claimant within
ninety days of the date such claim is received by the
Committee (or within 180 days if additional information
requested by the Committee necessitates an extension of the
ninety-day period and the claimant is informed of such
extension in writing within the original ninety-day period),
which notice shall:
(1) State the specific reason or reasons for the denial
or modification;
(2) Provide specific reference to pertinent Plan
provisions on which the denial or modification is
based;
(3) Provide a description of any additional material or
information necessary for the Participant, his
beneficiary, or representative to perfect the claim
and an explanation of why such material or
information is necessary; and
(4) Explain the Plan's claim review procedure described
in Subsection 8.9(b).
(b) In the event a claim for Plan benefits is denied or modified,
if the Participant, his beneficiary, or a representative of
such Participant or beneficiary desires to have such denial or
modification reviewed, he must, within sixty days following
receipt of the notice of such denial or modification, submit a
written request for review by the Committee of its initial
decision. In connection with such request, the Participant,
his beneficiary, or the representative of such Participant or
beneficiary may review any pertinent documents upon which such
denial or modification was based and may submit issues and
comments in writing. Within sixty days following such request
for review the Committee shall, after providing a full and
fair review, render its final decision in writing to the
Participant, his beneficiary, or the representative of such
Participant or beneficiary stating specific reasons for
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such decision and making specific references to pertinent Plan
provisions upon which the decision is based. If special
circumstances require an extension of such sixty-day period,
the Committee's decision shall be rendered as soon as
possible, but not later than 120 days after receipt of the
request for review. If an extension of time for review is
required, written notice of the extension shall be furnished
to the Participant, his beneficiary, or the representative of
such Participant or beneficiary prior to the commencement of
the extension period.
(c) Timely completion of the claims procedures described in this
Section shall be a condition precedent to the commencement of
any legal or equitable action in connection with a claim for
benefits under the Plan by a Participant or by any other
person or entity claiming rights through such Participant;
provided, however, that the Committee in its discretion may
waive compliance with such claims procedures as a condition
precedent to any such action.
(d) Any legal action with respect to a claim for Plan benefits
must be filed no later than one year after the later of (i)
the date the claim is denied by the Committee or (ii) if a
review of such denial is requested, the date of the final
decision by the Committee with respect to such request.
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IX.
LOANS
9.1 ELIGIBILITY FOR LOAN.
(a) Subject to the provisions of this Article, the following
individuals shall be eligible for loans under the Plan: (i)
each Participant who is an Employee and (ii) each
party-in-interest, as that term is defined in section 3(14) of
ERISA, as to the Plan, but only if such party-in-interest (i)
retains an Account balance under the Plan and (ii) is either a
Participant no longer employed by the Employer, a beneficiary
of a deceased Participant, or an alternate payee under a
qualified domestic relations order, as that term is defined in
section 414(p)(8) of the Code. (An individual who is eligible
to apply for a loan under the Plan as described in the
preceding sentence shall hereinafter be referred to as a
"Participant" for purposes of this Article.)
(b) Notwithstanding the above, a Participant shall not be eligible
for a loan if he has on the date of the request for the
current loan two outstanding loans previously made to him from
the Plan.
(c) Upon application by a Participant and subject to such uniform
and nondiscriminatory rules and regulations as the Committee
may establish, the Committee may in its discretion direct the
Trustee to make a loan or loans to such Participant.
9.2 MINIMUM LOAN. A loan to a Participant may not be for an amount less
than $500.00.
9.3 MAXIMUM LOAN.
(a) A loan to a Participant may not exceed 50% of the then value
of such Participant's Vested Interest in his Accounts.
(b) Notwithstanding anything to the contrary, no loan shall be
made from the Plan to a Participant to the extent such loan
would cause the total of all loans made to the Participant
from all qualified plans of the Employer and Controlled
Entities ("Outstanding Loans") to exceed the lesser of:
(1) $50,000 (reduced by the excess, if any, of (i) the
highest outstanding balance of Outstanding Loans
during the one-year period ending on the day before
the date on which the loan is to be made, over (ii)
the outstanding balance of Outstanding Loans on the
date on which the loan is to be made); or
(2) One-half of the present value of the Participant's
nonforfeitable accrued benefit under all qualified
plans of the Employer and Controlled Entities.
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9.4 INTEREST, SECURITY, AND FEES.
(a) Any loan made pursuant to this Article shall bear interest at
a rate established by the Committee from time to time and
communicated to the Participants, which rate shall provide the
Plan with a return commensurate with the interest rates
charged by persons in the business of lending money for loans
which would be made under similar circumstances.
(b) Any loan shall be made as an investment of a segregated loan
fund to be established in the Trust Fund for the Participant
to whom the loan is made. Any loan shall be considered to
come, first, from the Participant's Rollover Contribution
Account, second, from the Participant's Vested Interest in his
Employer Contribution Account, and, finally, from the
Participant's Salary Reduction Contribution Account. The
Trustee shall fund a Participant's segregated loan fund by
liquidating such portion of the assets of the Accounts from
which the Participant's loan is to be made as is necessary to
fund the loan and transferring the proceeds to such segregated
loan fund. If a Participant's Accounts are invested in more
than one Investment Fund, the transfer shall be made pro rata
from each such Investment Fund.
(c) The loan shall be secured by a pledge of the Participant's
segregated loan fund. By agreeing to the pledge of the
segregated loan fund as security for the loan, a Participant
shall be deemed to have consented to the distribution of such
segregated loan fund prior to the time specified in section
411(a)(11) of the Code and the applicable Treasury regulations
thereunder.
(d) The Committee in its discretion may impose a reasonable fee on
the issuance of each loan.
9.5 REPAYMENT TERMS OF LOAN.
(a) A Participant who is an Employee receiving compensation from
the Employer at the time of receipt of a loan shall be
required, as a condition to receiving a loan, to enter into an
irrevocable agreement authorizing the Employer to make payroll
deductions from his compensation so long as the Participant is
such an Employee and to transfer such payroll deduction
amounts to the Trustee in payment of such loan plus interest.
In the case of a Participant who (i) is not at the time of
commencement of his loan an Employee, or (ii) is not at the
commencement of his loan receiving compensation from the
Employer (or is receiving insufficient compensation to cover
his scheduled loan repayments), or (iii) was an Employee
receiving compensation from the Employer at the time of
commencement of his loan and either (A) continues to be an
Employee but ceases to receive compensation from the Employer
(or is receiving insufficient compensation to cover his
scheduled loan repayments), (B) ceases to be an Employee and
is not entitled to a distribution of his Accounts under the
terms of the Plan, or (C) ceases to be an Employee and
immediately commences employment with a Controlled Entity or
Dell Financial Services L.P., except as otherwise permitted in
Subsection 9.5(c), each such Participant shall make or
continue to make his loan repayments (or portion of his loan
repayments not covered by his compensation) in the manner
prescribed by the Committee.
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(b) The terms of the loan shall (i) require level amortization
with payments not less frequently than quarterly, (ii) require
that the loan be repaid (i) over an amortization period of one
to five years for the period from the Effective Date through
December 31, 2000, and over an amortization period of one to
four and one-half years effective as of January 1, 2001,
(unless the Participant certifies in writing to the Committee
that the loan is to be used to acquire any dwelling unit which
within a reasonable time is to be used (determined at the time
the loan is made) as a principal residence of the Participant,
in which case the loan must be repaid over an amortization
period of five to twenty years), (iii) allow prepayment
without penalty at any time, provided that any prepayment must
be for the full outstanding loan balance (including interest),
(iv) require that the balance of the loan (including interest)
shall become due and payable (to the extent not otherwise due
and payable) within ninety days of the date the Participant
or, if applicable, the Participant's beneficiary, is first
entitled to a distribution from the Plan (other than a
distribution pursuant to Article VIII) irrespective of whether
such Participant or beneficiary elects or consents to such
distribution, and (v) provide that such Participant's
outstanding loan balance (including interest), if not paid in
accordance with the repayment provisions of the loan, shall be
treated as a deemed distribution upon the end of the grace
period permitted by applicable Treasury Regulations and repaid
by offsetting such balance against the amount in the
Participant's segregated loan fund pledged as security for the
loan.
(c) The above notwithstanding, a Participant who is on an unpaid
leave of absence from the Employer may elect to suspend
payments on his loan during such leave of absence for a period
of up to one year. Upon such Participant's return to active
employment with the Employer at the conclusion of such leave
of absence, or upon the expiration of such one-year period, if
earlier, such Participant shall be permitted to refinance his
loan, including all accrued and unpaid interest, over a term
that does not extend beyond the expiration of the original
term of the loan.
(d) Amounts tendered to the Trustee by a Participant in repayment
of a loan made pursuant to this Article (i) shall initially be
credited to the Participant's segregated loan fund, (ii) then
shall be transferred as soon as practicable following receipt
thereof to the Account or Accounts from which the
Participant's loan was made, and (iii) finally, shall be
invested in accordance with the current designation in effect
as to the investment of contributions being allocated to such
Accounts pursuant to Article V.
9.6 DEFAULT AND OFFSET.
(a) If the Participant fails in any way to comply with the
repayment terms of a loan, such loan shall be repaid by
offsetting the Participant's outstanding loan balance
(including interest) against the amount in the Participant's
segregated loan fund pledged as security for the loan. Except
as provided in Subsection 9.6(b), any such outstanding loan
balance (including interest) shall be so offset and repaid as
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soon as administratively feasible after such failure to
comply, and such repayment shall be prior to any withdrawal or
distribution of benefits from the pledged portion of the
Participant's Accounts pursuant to the provisions of the Plan.
(b) Notwithstanding Subsection 9.6(a), amounts in a Participant's
Accounts may not be offset and used to satisfy the payment of
a defaulted outstanding loan (including interest) prior to the
earliest time the amounts in any such Account are otherwise
permitted to be distributed under applicable law. In the event
an offset of a defaulted loan is not permitted pursuant to the
preceding sentence, such outstanding loan balance (including
interest) shall be deemed distributed to such Participant on
the last day of the calendar quarter (effective January 1,
2001, on the ninetieth day) following the calendar quarter in
which the first unpaid installment on such loan was due and
unpaid.
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X.
ADMINISTRATION OF THE PLAN
10.1 APPOINTMENT OF COMMITTEE. The general administration of the Plan shall
be vested in the Company. The Company may delegate certain duties to
the Committee which shall be appointed by the Directors and shall
consist of one or more persons. Any individual, whether or not an
Employee, is eligible to become a member of the Committee. Each member
of the Committee shall, before entering upon the performance of his
duties, qualify by signing a consent to serve as a member of the
Committee under and pursuant to the Plan and by filing such consent
with the records of the Committee. For purposes of ERISA, the Company
shall be the Plan "administrator" and the Committee shall be the "named
fiduciary" with respect to the general administration of the Plan
(except as to the investment of the assets of the Trust Fund).
10.2 TERM, VACANCIES, RESIGNATION, AND REMOVAL. Each member of the Committee
shall serve until he resigns, dies, or is removed by the Directors. At
any time during his term of office, a member of the Committee may
resign by giving written notice to the Directors and the Committee,
such resignation to become effective upon the appointment of a
substitute member or, if earlier, the lapse of thirty days after such
notice is given as herein provided. At any time during his term of
office, and for any reason, a member of the Committee may be removed by
the Directors with or without cause, and the Directors may in their
discretion fill any vacancy that may result therefrom. Any member of
the Committee who is an Employee shall automatically cease to be a
member of the Committee as of the date he ceases to be employed by the
Employer and all Controlled Entities.
10.3 OFFICERS, RECORDS, AND PROCEDURES. The Committee may select officers
and may appoint a secretary who need not be a member of the Committee.
The Committee shall keep appropriate records of its proceedings and the
administration of the Plan and shall make available for examination
during business hours to any Participant or beneficiary such records as
pertain to that individual's interest in the Plan. The Committee shall
designate the person or persons who shall be authorized to sign for the
Committee and, upon such designation, the signature of such person or
persons shall bind the Committee.
10.4 MEETINGS. The Committee shall hold meetings upon such notice and at
such time and place as it may from time to time determine. Notice to a
member shall not be required if waived in writing by that member. A
majority of the members of the Committee duly appointed shall
constitute a quorum for the transaction of business. All resolutions or
other actions taken by the Committee at any meeting where a quorum is
present shall be by vote of a majority of those present at such meeting
and entitled to vote. Resolutions may be adopted or other action taken
without a meeting upon written consent signed by all of the members of
the Committee.
10.5 SELF-INTEREST OF MEMBERS. No member of the Committee shall have any
right to vote or decide upon any matter relating solely to himself
under the Plan or to vote in any case in which his individual right to
claim any benefit under the Plan is particularly involved. In any case
in which a Committee member is so disqualified to act and the remaining
members cannot agree, the Directors shall appoint a temporary
substitute member to exercise all the powers of the disqualified member
concerning the matter in which he is disqualified.
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10.6 COMPENSATION AND BONDING. The members of the Committee shall not
receive compensation with respect to their services for the Committee.
To the extent required by ERISA or other applicable law, or required by
the Company, members of the Committee shall furnish bond or security
for the performance of their duties hereunder.
10.7 COMMITTEE POWERS AND DUTIES. The Committee shall supervise the
administration and enforcement of the Plan according to the terms and
provisions hereof and shall have all powers necessary to accomplish
these purposes, including, but not by way of limitation, the right,
power, authority, and duty:
(a) To make rules, regulations, and bylaws for the administration
of the Plan that are not inconsistent with the terms and
provisions hereof, provided such rules, regulations, and
bylaws are evidenced in writing and copies thereof are
delivered to the Trustee and to the Company, and to enforce
the terms of the Plan and the rules and regulations
promulgated thereunder by the Committee;
(b) To construe in its discretion all terms, provisions,
conditions, and limitations of the Plan, and, in all cases,
the construction necessary for the Plan to qualify under the
applicable provisions of the Code shall control;
(c) To correct any defect or to supply any omission or to
reconcile any inconsistency that may appear in the Plan in
such manner and to such extent as it shall deem expedient in
its discretion to effectuate the purposes of the Plan;
(d) To employ and compensate such accountants, attorneys,
investment advisors, and other agents, employees, and
independent contractors as the Committee may deem necessary or
advisable for the proper and efficient administration of the
Plan;
(e) To determine in its discretion all questions relating to
eligibility;
(f) To make a determination in its discretion as to the right of
any person to a benefit under the Plan and to prescribe
procedures to be followed by distributees in obtaining
benefits hereunder;
(g) To prepare, file, and distribute, in such manner as the
Committee determines to be appropriate, such information and
material as is required by the reporting and disclosure
requirements of ERISA;
(h) To furnish the Employer any information necessary for the
preparation of such Employer's tax return or other information
that the Committee determines in its discretion is necessary
for a legitimate purpose;
(i) To require and obtain from the Employer and the Participants
and their beneficiaries any information or data that the
Committee determines is necessary for the proper
administration of the Plan;
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(j) To instruct the Trustee as to the loans to Participants
pursuant to the provisions of Article XII;
(k) To instruct the Trustee as to the management, investment, and
reinvestment of the Trust Fund as provided in the Trust
Agreement;
(l) To appoint investment managers;
(m) To receive and review reports from the Trustee and from
investment managers as to the financial condition of the Trust
Fund, including its receipts and disbursements;
(n) To review periodically the Plan's short-term and long-term
investment needs and goals and to communicate such needs and
goals to the Trustee and any investment manager as frequently
as the Committee, in its discretion, deems necessary for the
proper administration of the Plan and Trust;
(o) To establish or designate Investment Funds as investment
options under the Plan as provided in Article V;
(p) To determine in its discretion administrative expenses
properly payable from the Plan and allocate the payment of
such expenses from Participants' Accounts or forfeitures.
(q) To direct the Trustee as to the exercise of rights or
privileges to acquire, convert, or exchange Company Stock
pursuant to Article V; and
(r) To amend the Plan in accordance with and to the extent
provided in Article XIII.
10.8 EMPLOYER TO SUPPLY INFORMATION. The Employer shall supply full and
timely information to the Committee, including, but not limited to,
information relating to each Participant's compensation, age,
retirement, death, or other cause of termination of employment and such
other pertinent facts as the Committee may require. The Employer shall
advise the Trustee of such of the foregoing facts as are deemed
necessary for the Trustee to carry out the Trustee's duties under the
Plan. When making a determination in connection with the Plan, the
Committee shall be entitled to rely upon the aforesaid information
furnished by the Employer.
10.9 INDEMNIFICATION. The Company shall, to the extent permitted by law,
indemnify and hold harmless each member of the Committee and each
Employee who is a fiduciary or a delegate of the Committee against any
and all expenses and liabilities arising out of his administrative
functions or fiduciary responsibilities, including any expenses and
liabilities that are caused by or result from an act or omission
constituting the negligence of such individual in the performance of
such functions or responsibilities, but excluding expenses and
liabilities that are caused by or result from such individual's own
gross negligence or willful misconduct. Expenses against which such
individual shall be indemnified hereunder shall include, without
limitation, the amounts of any settlement or judgment, costs, counsel
fees, and related charges reasonably incurred in connection with a
claim asserted or a proceeding brought or settlement thereof.
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10.10 TEMPORARY RESTRICTIONS. In order to ensure an orderly transition in the
transfer of assets to or from the Trust Fund associated with a merger
or spin-off of the Plan, a merger of another qualified plan into the
Plan, a transfer of assets from another qualified plan to the Plan, a
change in Trustee or recordkeeper, or other similar activity, the
Committee in its discretion may temporarily prohibit or restrict
withdrawals, loans, changes to contribution elections, changes of
investment designation, or such other activity as the Committee deems
appropriate; provided, however, that any such temporary prohibition or
restriction shall be in compliance with all applicable law.
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XI.
TRUSTEE AND ADMINISTRATION OF TRUST FUND
11.1 APPOINTMENT, RESIGNATION, REMOVAL, AND REPLACEMENT OF TRUSTEE. The
Trustee shall be appointed, removed, and replaced by and in the sole
discretion of the Directors. The Trustee shall be the "named fiduciary"
with respect to investment of the Trust Fund's assets.
11.2 TRUST AGREEMENT. As a means of administering the assets of the Plan,
the Company has entered into a Trust Agreement with the Trustee. The
administration of the assets of the Plan and the duties, obligations,
and responsibilities of the Trustee shall be governed by the Trust
Agreement. The Trust Agreement may be amended from time to time as the
Company deems advisable in order to effectuate the purposes of the
Plan. The Trust Agreement is incorporated herein by reference and
thereby made a part of the Plan.
11.3 PAYMENT OF EXPENSES. All expenses incident to the administration of the
Plan and Trust, including but not limited to, legal, accounting,
Trustee fees, direct expenses of the Employer and the Committee
incurred in the administration of the Plan, and the cost of furnishing
any bond or security required of the Committee, shall be paid by the
Trustee from the Trust Fund, and, until paid, shall constitute a claim
against the Trust Fund that is paramount to the claims of Participants
and beneficiaries; provided, however, that (i) the obligation of the
Trustee to pay such expenses from the Trust Fund shall cease to exist
to the extent such expenses are paid by the Employer and (ii) in the
event the Trustee's compensation is to be paid, pursuant to this
Section, from the Trust Fund, any individual serving as Trustee who
already receives full-time pay from an Employer or an association of
Employers whose employees are Participants, or from an employee
organization whose members are Participants, shall not receive any
additional compensation for serving as Trustee. This Section shall be
deemed to be a part of any contract to provide for expenses of Plan and
Trust administration, whether or not the signatory to such contract is,
as a matter of convenience, the Employer.
11.4 TRUST FUND PROPERTY. All income, profits, recoveries, contributions,
forfeitures, and any and all moneys, securities, and properties of any
kind at any time received or held by the Trustee hereunder shall be
held for investment purposes as a commingled Trust Fund. The Committee
shall maintain Accounts in the name of each Participant, but the
maintenance of an Account designated as the Account of a Participant
shall not mean that such Participant shall have a greater or lesser
interest than that due him by operation of the Plan and shall not be
considered as segregating any funds or property from any other funds or
property contained in the commingled fund. No Participant shall have
any title to any specific asset in the Trust Fund.
11.5 DISTRIBUTIONS FROM PARTICIPANTS' ACCOUNTS. Distributions from a
Participant's Accounts shall be made by the Trustee only if, when, and
in the amount and manner directed in writing by the Committee. Any
distribution made to a Participant or for his benefit shall be debited
to such Participant's Account or Accounts. All distributions hereunder
shall be made in cash except as otherwise specifically provided herein.
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11.6 PAYMENTS SOLELY FROM TRUST FUND. All benefits payable under the Plan
shall be paid or provided for solely from the Trust Fund, and neither
the Employer nor the Trustee assumes any liability or responsibility
for the adequacy thereof. The Committee or the Trustee may require
execution and delivery of such instruments as are deemed necessary to
ensure proper payment of any benefits.
11.7 NO BENEFITS TO THE EMPLOYER. No part of the corpus or income of the
Trust Fund shall be used for any purpose other than the exclusive
purpose of providing benefits for the Participants and their
beneficiaries and of defraying reasonable expenses of administering the
Plan and Trust. Anything to the contrary herein notwithstanding, the
Plan shall not be construed to vest any rights in the Employer other
than those specifically given hereunder.
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XII.
FIDUCIARY PROVISIONS
12.1 ARTICLE CONTROLS. This Article shall control over any contrary,
inconsistent or ambiguous provisions contained in the Plan.
12.2 GENERAL ALLOCATION OF FIDUCIARY DUTIES. Each fiduciary with respect to
the Plan shall have only those specific powers, duties,
responsibilities and obligations as are specifically given him under
the Plan. The Directors shall have the sole authority to appoint and
remove the Trustee and members of the Committee. Except as otherwise
specifically provided herein, the Committee shall have the sole
responsibility for the administration of the Plan, which responsibility
is specifically described herein. Except as otherwise specifically
provided herein and in the Trust Agreement, the Trustee shall have the
sole responsibility for the administration, investment, and management
of the assets held under the Plan. It is intended under the Plan that
each fiduciary shall be responsible for the proper exercise of his or
its own powers, duties, responsibilities, and obligations hereunder and
shall not be responsible for any act or failure to act of another
fiduciary except to the extent provided by law or as specifically
provided herein.
12.3 FIDUCIARY DUTY. Each fiduciary under the Plan, including, but not
limited to, the Committee and the Trustee as "named fiduciaries," shall
discharge his duties and responsibilities with respect to the Plan:
(a) Solely in the interest of the Participants, for the exclusive
purpose of providing benefits to Participants and their
beneficiaries and of defraying reasonable expenses of
administering the Plan and Trust;
(b) With the care, skill, prudence, and diligence under the
circumstances then prevailing that a prudent man acting in a
like capacity and familiar with such matters would use in the
conduct of an enterprise of a like character and with like
aims;
(c) By diversifying the investments of the Plan so as to minimize
the risk of large losses, unless under the circumstances it is
prudent not to do so; and
(d) In accordance with the documents and instruments governing the
Plan insofar as such documents and instruments are consistent
with applicable law.
No fiduciary shall cause the Plan or Trust Fund to enter into a "prohibited
transaction" as provided in section 4975 of the Code or section 406 of ERISA.
12.4 DELEGATION OF FIDUCIARY DUTIES. The Committee may appoint
subcommittees, individuals, or any other agents as it deems advisable
and may delegate to any of such appointees any or all of the powers and
duties of the Committee. Such appointment and delegation must specify
in writing the powers or duties being delegated, and must be accepted
in writing by the delegatee. Upon such appointment, delegation, and
acceptance, the delegating Committee members shall have no liability
for the acts or omissions of any such delegatee, as long as the
delegating Committee members do not violate any fiduciary
responsibility in making or continuing such delegation.
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12.5 INVESTMENT MANAGER.
(a) The Committee may, in its sole discretion, appoint an
"investment manager" with power to manage, acquire or dispose
of any asset of the Plan and to direct the Trustee in this
regard, so long as:
(1) The investment manager is (i) registered as an
investment adviser under the Investment Advisers Act
of 1940; (ii) not registered as an investment adviser
under such Act by reason of paragraph (i) of section
203A(a) of such Act but is registered as an
investment adviser under the laws of the state
(referred to in such section 203A(a) in which it
maintains its principal office and place of business,
and, at the time it last filed the registration form
most recently filed by it with such state in order to
maintain its registration under the laws of such
state, also filed a copy of such form with the
Secretary of Labor; (iii) a bank, as defined in Act;
or (iv) an insurance company qualified to do business
under the laws of more than one state; and
(2) Such investment manager acknowledges in writing that
he or it is a fiduciary with respect to the Plan.
(b) Upon the appointment of an investment manager pursuant to
Subsection 12.5(a), the Committee shall not be liable for the
acts of the investment manager, as long as the Committee
members do not violate any fiduciary responsibility in making
or continuing such appointment. The Trustee shall follow the
directions of such investment manager and shall not be liable
for the acts or omissions of such investment manager. The
investment manager may be removed by the Committee at any time
in the Committee's sole discretion.
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XIII.
AMENDMENTS
13.1 RIGHT TO AMEND. Subject to Section 13.2 and any other limitations
contained in ERISA or the Code, the Directors may from time to time
amend, in whole or in part, any or all of the provisions of the Plan on
behalf of the Company and all Employers. Specifically, but not by way
of limitation, the Directors may make any amendment necessary to
acquire or maintain the Plan's qualified status under the Code, whether
or not retroactive.
13.2 LIMITATION ON AMENDMENTS. No amendment of the Plan shall be made that
would vest in the Employer, directly or indirectly, any interest in or
control of the Trust Fund. No amendment shall be made that would vary
the Plan's exclusive purpose of providing benefits to Participants and
their beneficiaries and of defraying reasonable expenses of
administering the Plan or that would permit the diversion of any part
of the Trust Fund from that exclusive purpose. No amendment shall be
made that would reduce any then nonforfeitable interest of a
Participant. No amendment shall increase the duties or responsibilities
of the Trustee unless the Trustee consents thereto in writing.
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XIV.
DISCONTINUANCE OF CONTRIBUTIONS, TERMINATION,PARTIAL TERMINATION, AND MERGER
OR CONSOLIDATION
14.1 RIGHT TO DISCONTINUE CONTRIBUTIONS, TERMINATE, OR PARTIALLY TERMINATE.
The Employer has established the Plan with the bona fide intention and
expectation that from year to year it will be able to, and will deem it
advisable to, make its contributions as herein provided. However, the
Directors realize that circumstances not now foreseen, or circumstances
beyond its control, may make it either impossible or inadvisable for
the Employer to continue to make its contributions to the Plan.
Therefore, the Directors shall have the right and the power to
discontinue contributions to the Plan, terminate the Plan, or partially
terminate the Plan at any time hereafter. Each member of the Committee
and the Trustee shall be notified of such discontinuance, termination,
or partial termination.
14.2 PROCEDURE IN THE EVENT OF DISCONTINUANCE OF CONTRIBUTIONS, TERMINATION,
OR PARTIAL TERMINATION.
(a) If the Plan is amended so as to permanently discontinue
Employer Contributions, or if Employer Contributions are in
fact permanently discontinued, the Vested Interest of each
affected Participant shall be 100%, effective as required by
the Code and applicable Treasury Regulations. In case of such
discontinuance, the Committee shall remain in existence and
all other provisions of the Plan that are necessary, in the
opinion of the Committee, for equitable operation of the Plan
shall remain in force.
(b) If the Plan is terminated or partially terminated, the Vested
Interest of each affected Participant shall be 100%, effective
as of the termination date or partial termination date, as
applicable. Unless the Plan is otherwise amended prior to
dissolution of the Company, the Plan shall terminate as of the
date of dissolution of the Company.
(c) Upon discontinuance of contributions, termination, or partial
termination, any previously unallocated contributions,
forfeitures, and net income (or net loss) shall be allocated
among the Accounts of the Participants on such date of
discontinuance, termination, or partial termination according
to the provisions of Article IV. Thereafter, the net income
(or net loss) shall continue to be allocated to the Accounts
of the Participants until the balances of the Accounts are
distributed.
(d) In the case of a termination or partial termination of the
Plan, and in the absence of a Plan amendment to the contrary,
the Trustee shall pay the balance of the Accounts of a
Participant for whom the Plan is so terminated, or who is
affected by such partial termination, to such Participant,
subject to the time of payment, form of payment, and consent
provisions of Article VIII.
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14.3 MERGER, CONSOLIDATION, OR TRANSFER. This Plan and Trust Fund may not
merge or consolidate with, or transfer its assets or liabilities to,
any other plan, unless immediately thereafter each Participant would,
in the event such other plan terminated, be entitled to a benefit equal
to or greater than the benefit to which he would have been entitled if
the Plan were terminated immediately before the merger, consolidation,
or transfer.
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XV.
PARTICIPATING EMPLOYERS
15.1 DESIGNATION OF OTHER EMPLOYERS.
(a) The Committee may designate any entity or organization
eligible by law to participate in the Plan and the Trust as an
Employer by written instrument delivered to the Secretary of
the Company, the Trustee, and the designated Employer. Such
written instrument (i) shall specify the effective date of
such designated participation, (ii) may incorporate specific
provisions relating to the operation of the Plan that apply to
the designated Employer only, (iii) may designate that certain
Employees are Eligible Employees, and (iv) shall become, as to
such designated Employer and its Employees, a part of the Plan
and the Trust Agreement.
(b) Each designated Employer shall be conclusively presumed to
have consented to its designation and to have agreed to be
bound by the terms of the Plan and Trust Agreement and any and
all amendments thereto upon its submission of information to
the Committee required by the terms of or with respect to the
Plan or upon making a contribution to the Trust Fund pursuant
to the terms of the Plan; provided, however, that the terms of
the Plan may be modified so as to increase the obligations of
an Employer only with the consent of such Employer, which
consent shall be conclusively presumed to have been given by
such Employer upon its submission of any information to the
Committee required by the terms of or with respect to the Plan
or upon making a contribution to the Trust Fund pursuant to
the terms of the Plan following notice of such modification.
(c) The provisions of the Plan and the Trust Agreement shall apply
separately and equally to each Employer and its Employees in
the same manner as is expressly provided for the Company and
its Employees, except that the power to appoint or otherwise
affect the Committee or the Trustee and the power to amend or
terminate the Plan and Trust Agreement shall be exercised by
the Directors, or by the Committee, if applicable, and, in the
case of Employers that are Controlled Entities, Employer
Retirement Savings Contributions to be allocated pursuant to
Subsection 4.2(d) shall be allocated on an aggregate basis
among the Participants employed by all Employers; provided,
however, that each Employer shall contribute to the Trust Fund
its share of the Employer Retirement Savings Contribution for
a Plan Year based on the Participants in its employ during
such Plan Year who will receive such contribution for such
Plan Year.
(d) Transfer of employment among Employers shall not be considered
a termination of employment hereunder, and Service with one
shall be considered as Service with all others.
(e) Any Employer may, by appropriate action of its board of
directors or noncorporate counterpart communicated in writing
to the Secretary of the Company, the Trustee, and the
Committee, terminate its participation in the Plan and the
Trust. Moreover, the Committee may, in its discretion,
terminate an
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Employer's Plan and Trust participation at any time by written
instrument delivered to the Secretary of the Company and the
designated Employer.
15.2 SINGLE PLAN. For purposes of the Code and ERISA, the Plan as adopted by
the Employers shall constitute a single plan rather than a separate
plan of each Employer. All assets in the Trust Fund shall be available
to pay benefits to all Participants and their beneficiaries.
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XVI.
MISCELLANEOUS PROVISIONS
16.1 NOT CONTRACT OF EMPLOYMENT. The adoption and maintenance of the Plan
shall not be deemed to be either a contract between the Employer and
any person or consideration for the employment of any person. Nothing
herein contained shall be deemed to give any person the right to be
retained in the employ of the Employer or to restrict the right of the
Employer to discharge any person at any time, nor shall the Plan be
deemed to give the Employer the right to require any person to remain
in the employ of the Employer or to restrict any person's right to
terminate his employment at any time.
16.2 ALIENATION OF INTEREST FORBIDDEN. Except as otherwise provided with
respect to "qualified domestic relations orders" and certain judgments
and settlements pursuant to section 206(d) of ERISA and sections
401(a)(13) and 414(p) of the Code, and except as otherwise provided
under other applicable law, no right or interest of any kind in any
benefit shall be transferable or assignable by any Participant or any
beneficiary or be subject to anticipation, adjustment, alienation,
encumbrance, garnishment, attachment, execution, or levy of any kind.
Plan provisions to the contrary notwithstanding, the Committee shall
comply with the terms and provisions of any "qualified domestic
relations order," including an order that requires distributions to an
alternate payee prior to a Participant's "earliest retirement age" as
such term is defined in section 206(d)(3)(E)(ii) of ERISA and section
414(p)(4)(B) of the Code, and shall establish an appropriate procedure
to effect the same, which procedure shall be incorporated herein by
reference.
16.3 UNIFORMED SERVICES EMPLOYMENT AND REEMPLOYMENT RIGHTS ACT REQUIREMENTS.
Notwithstanding any provision of the Plan to the contrary,
contributions, benefits, and service credit with respect to qualified
military service will be provided in accordance with section 414(u) of
the Code.
16.4 PAYMENTS TO MINORS AND INCOMPETENTS. If a Participant or beneficiary
entitled to receive a benefit under the Plan is a minor, or is
determined by the Committee in its discretion to be incompetent, or is
adjudged by a court of competent jurisdiction to be legally incapable
of giving valid receipt and discharge for a benefit provided under the
Plan, the Committee may pay such benefit to the duly appointed guardian
or conservator of such Participant or beneficiary for the account of
such Participant or beneficiary. If no guardian or conservator has been
appointed for such Participant or beneficiary, the Committee may pay
such benefit to any third party who is determined by the Committee, in
its sole discretion, to be authorized to receive such benefit for the
account of such Participant or beneficiary. Such payment shall operate
as a full discharge of all liabilities and obligations of the
Committee, the Trustee, the Employer, and any fiduciary of the Plan
with respect to such benefit.
16.5 ACQUISITION AND HOLDING OF COMPANY STOCK. The Plan is specifically
authorized to acquire and hold up to 100% of its assets in Company
Stock so long as Company Stock is a "qualifying employer security," as
such term is defined in section 407(d)(e) of ERISA.
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16.6 PARTICIPANT'S AND BENEFICIARY'S ADDRESSES. It shall be the affirmative
duty of each Participant to inform the Committee of, and to keep on
file with the Committee, his current mailing address and the current
mailing address of his designated beneficiary. If a Participant fails
to keep the Committee informed of his current mailing address and the
current mailing address of his designated beneficiary, neither the
Committee, the Trustee, the Employer, nor any fiduciary under the Plan
shall be responsible for any late or lost payment of a benefit or for
failure of any notice to be provided timely under the terms of the
Plan.
16.7 SEVERABILITY. If any provision of the Plan shall be held illegal or
invalid for any reason, said illegality or invalidity shall not affect
the remaining provisions hereof. In such case, each provision shall be
fully severable, and the Plan shall be construed and enforced as if
said illegal or invalid provision had never been included herein.
16.8 JURISDICTION. The situs of the Plan and the Trust hereby created is
Texas. All provisions of the Plan shall be construed in accordance with
the laws of Texas except to the extent preempted by federal law.
16.9 INCORRECT INFORMATION OR ERROR. Any contrary provisions of the Plan
notwithstanding, if, because of a human or systems error, or because of
incorrect information provided by or correct information failed to be
provided by, fraud, misrepresentation, or concealment of any relevant
fact (as determined by the Committee) by any person, the Plan enrolls
any individual, pays any benefit, incurs a liability, or makes any
overpayment or erroneous payment, the Plan shall be entitled to recover
from such person the benefit paid or the liability incurred, together
with all expenses incidental to or necessary for such recovery.
16.10 MERGED PLANS. Notwithstanding any provision of the Plan to the
contrary, the Plan shall comply with the terms of each amendment and
merger document, which is listed on Appendix A and attached thereto,
providing for the merger of another plan with and into the Plan, the
provisions of which shall include, without limitation, the preservation
of all optional forms of benefits and other rights and features under
such other plan, as required to be preserved pursuant to section
411(d)(6) of the Code and applicable Treasury regulations issued
thereunder, and the preservation of certain vesting rights under such
other plan, but only to the extent that, when the terms of such
amendment conflict with the terms of the Plan as amended after the
adoption of such amendment and merger document, such compliance is
required by law.
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XVII.
TOP-HEAVY STATUS
17.1 ARTICLE CONTROLS. Any Plan provisions to the contrary notwithstanding,
the provisions of this Article shall control to the extent required to
cause the Plan to comply with the requirements imposed under section
416 of the Code.
17.2 DEFINITIONS. For purposes of this Article, the following terms and
phrases when capitalized shall have these respective meanings
notwithstanding that any such term or phrase may have a different
meaning ascribed to it elsewhere in the Plan:
(a) ACCOUNT BALANCE: As of any Valuation Date, the aggregate
amount credited to an individual's account or accounts under a
qualified defined contribution plan maintained by the Employer
or a Controlled Entity (excluding employee contributions that
were deductible within the meaning of section 219 of the Code
and rollover or transfer contributions made after December 31,
1983, by or on behalf of such individual to such plan from
another qualified plan sponsored by an entity other than the
Employer or a Controlled Entity), increased by (i) the
aggregate distributions made to such individual from such plan
during a five-year period ending on the Determination Date and
(ii) the amount of any contributions due as of the
Determination Date immediately following such Valuation Date.
(b) ACCRUED BENEFIT: As of any Valuation Date, the present value
(computed on the basis of the Assumptions) of the cumulative
accrued benefit (excluding the portion thereof that is
attributable to employee contributions that were deductible
pursuant to section 219 of the Code, to rollover or transfer
contributions made after December 31, 1983, by or on behalf of
such individual to such plan from another qualified plan
sponsored by an entity other than the Employer or a Controlled
Entity, to proportional subsidies or to ancillary benefits) of
an individual under a qualified defined benefit plan
maintained by the Employer or a Controlled Entity, increased
by (i) the aggregate distributions made to such individual
from such plan during a five-year period ending on the
Determination Date and (ii) the estimated benefit accrued by
such individual between such Valuation Date and the
Determination Date immediately following such Valuation Date.
Solely for the purpose of determining top-heavy status, the
Accrued Benefit of an individual shall be determined under (A)
the method, if any, that uniformly applies for accrual
purposes under all qualified defined benefit plans maintained
by the Employer and the Controlled Entities or (B) if there is
no such method, as if such benefit accrued not more rapidly
than under the slowest accrual rate permitted under section
411(b)(1)(C) of the Code.
(c) AGGREGATION GROUP: The group of qualified plans maintained by
the Employer and each Controlled Entity consisting of (i) each
plan in which a Key Employee participates and each other plan
that enables a plan in which a Key Employee participates to
meet the requirements of section 401(a)(4) or 410 of the Code
or (ii) each plan in which a Key Employee participates, each
other plan that enables a plan in which a Key Employee
participates to meet the requirements of section 401(a)(4) or
410 of the Code, and any other plan that the Employer elects
to
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include as a part of such group; provided, however, that the
Employer may elect to include a plan in such group only if the
group will continue to meet the requirements of sections
401(a)(4) and 410 of the Code with such plan being taken into
account.
(d) ASSUMPTIONS: The interest rate and mortality assumptions
specified for top-heavy status determination purposes in any
defined benefit plan included in the Aggregation Group that
includes the Plan.
(e) DETERMINATION DATE: For the first Plan Year of any plan, the
last day of such Plan Year and for each subsequent Plan Year
of such plan, the last day of the preceding Plan Year.
(f) KEY EMPLOYEE: A "key employee" as defined in section 416(i) of
the Code and the Treasury regulations thereunder.
(g) PLAN YEAR: With respect to any plan, the annual accounting
period used by such plan for annual reporting purposes.
(h) REMUNERATION: Compensation as defined in Article I.
(i) VALUATION DATE: With respect to any Plan Year of any defined
contribution plan, the most recent date within the
twelve-month period ending on a Determination Date as of which
the trust fund established under such plan was valued and the
net income (or loss) thereof allocated to participants'
accounts. With respect to any Plan Year of any defined benefit
plan, the most recent date within a twelve-month period ending
on a Determination Date as of which the plan assets were
valued for purposes of computing plan costs for purposes of
the requirements imposed under section 412 of the Code.
17.3 TOP-HEAVY STATUS. The Plan shall be deemed to be top-heavy for a Plan
Year if, as of the Determination Date for such Plan Year, (i) the sum
of Account Balances of Participants who are Key Employees exceeds 60%
of the sum of Account Balances of all Participants unless an
Aggregation Group including the Plan is not top-heavy or (ii) an
Aggregation Group including the Plan is top-heavy. An Aggregation Group
shall be deemed to be top-heavy as of a Determination Date if the sum
(computed in accordance with section 416(g)(2)(B) of the Code and the
Treasury regulations promulgated thereunder) of (i) the Account
Balances of Key Employees under all defined contribution plans included
in the Aggregation Group and (ii) the Accrued Benefits of Key Employees
under all defined benefit plans included in the Aggregation Group
exceeds 60% of the sum of the Account Balances and the Accrued Benefits
of all individuals under such plans. Notwithstanding the foregoing, the
Account Balances and Accrued Benefits of individuals who are not Key
Employees in any Plan Year but who were Key Employees in any prior Plan
Year shall not be considered in determining the top-heavy status of the
Plan for such Plan Year. Further, notwithstanding the foregoing, the
Account Balances and Accrued Benefits of individuals who have not
performed services for the Employer or any Controlled Entity at any
time during the five-year period ending on the applicable Determination
Date shall not be considered.
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17.4 TOP-HEAVY VESTING SCHEDULE. If the Plan is determined to be top-heavy
for a Plan Year, the Vested Interest in the Employer Contribution
Account of each Participant who is credited with an Hour of Service
during such Plan Year shall be determined in accordance with the
following schedule:
<Table>
<Caption>
YEARS OF
VESTING SERVICE VESTED INTEREST
--------------- ---------------
<S> <C>
Less than 1 year 0%
1 year 20%
2 years 40%
3 years 60%
4 years 80%
5 years or more 100%
</Table>
17.5 TOP-HEAVY CONTRIBUTION.
(a) If the Plan is determined to be top-heavy for a Plan Year, the
Employer shall contribute to the Plan for such Plan Year on
behalf of each Participant who is not a Key Employee and who
has not terminated his employment as of the last day of such
Plan Year an amount equal to:
(b) The lesser of (i) 3% of such Participant's Remuneration for
such Plan Year or (ii) a percent of such Participant's
Remuneration for such Plan Year equal to the greatest percent
determined by dividing for each Key Employee the amounts
allocated to such Key Employee's Salary Reduction Contribution
Account and Employer Contribution Account for such Plan Year
by such Key Employee's Remuneration; reduced by
(c) The amount of Employer Retirement Savings Contributions
allocated to such Participant's Employer Contribution Account
for such Plan Year.
(1) The minimum contribution required to be made for a
Plan Year pursuant to this Section for a Participant
employed on the last day of such Plan Year shall be
made regardless of whether such Participant is
otherwise ineligible to receive an allocation of the
Employer's contributions for such Plan Year.
(2) Notwithstanding the foregoing, if the Plan is deemed
to be top-heavy for a Plan Year, the Employer's
contribution for such Plan Year pursuant to this
Section shall be increased by substituting "4%" in
lieu of "3%" in Clause (i) hereof to the extent that
the Directors determine to so increase such
contribution to comply with the provisions of section
416(h)(2) of the Code.
(d) Notwithstanding the foregoing, no contribution shall be made
pursuant to this Section for a Plan Year with respect to a
Participant who is a participant in another defined
contribution plan sponsored by the Employer or a Controlled
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Entity if such Participant receives under such other defined
contribution plan (for the plan year of such plan ending with
or within the Plan Year of the Plan) a contribution that is
equal to or greater than the minimum contribution required by
section 416(c)(2) of the Code.
(e) Notwithstanding the foregoing, no contribution shall be made
pursuant to this Section for a Plan Year with respect to a
Participant who is a participant in a defined benefit plan
sponsored by the Employer or a Controlled Entity if such
Participant accrues under such defined benefit plan (for the
plan year of such plan ending with or within the Plan Year of
this Plan) a benefit that is at least equal to the benefit
described in section 416(c)(1) of the Code. If the preceding
sentence is not applicable, the requirements of this Section
shall be met by providing a minimum benefit under such defined
benefit plan which, when considered with the benefit provided
under the Plan as an offset, is at least equal to the benefit
described in section 416(c)(1) of the Code.
17.6 TERMINATION OF TOP-HEAVY STATUS. If the Plan has been deemed to be
top-heavy for one or more Plan Years and thereafter ceases to be
top-heavy, the provisions of this Article shall cease to apply to the
Plan effective as of the Determination Date on which it is determined
no longer to be top-heavy. Notwithstanding the foregoing, the Vested
Interest of each Participant as of such Determination Date shall not be
reduced and, with respect to each Participant who has three or more
years of Vesting Service on such Determination Date, the Vested
Interest of each such Participant shall continue to be determined in
accordance with the schedule Article VII.
17.7 EFFECT OF ARTICLE. Notwithstanding anything contained herein to the
contrary, the provisions of this Article shall automatically become
inoperative and of no effect to the extent not required by the Code or
ERISA.
EXECUTED this 26th day of December, 2000.
DELL COMPUTER CORPORATION
By: /s/ KATHLEEN ANGEL
-----------------------------------
Name: Kathleen Angel
---------------------------------
Title: Director of Global Benefits
--------------------------------
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