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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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<PAGE> 20
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 w