Document:

Exhibit 10.4

 

Best

Buy Co., Inc.

Third Amended and Restated

Deferred Compensation Plan

Master Plan Document

 

Effective January 1, 2001

 

 

Copyright © 2001

By Compensation Resource Group, Inc.

All Rights Reserved

 

 

BEST BUY CO., INC.

THIRD AMENDED AND RESTATED

DEFERRED COMPENSATION PLAN

 

Effective January 1, 2001

 

Purpose

 

The purpose of

this Plan is to provide specified benefits to a select group of management and

highly compensated Employees and Directors who contribute materially to the

continued growth, development and future business success of Best Buy Co.,

Inc., a Minnesota corporation, and its subsidiaries.  This Plan shall be unfunded for tax purposes and for purposes of

Title I of ERISA.

 

The Plan was

initially adopted effective as of April 1, 1998.  The Plan was amended and restated effective October 1, 1998, and

subsequently amended and restated effective July 1, 1999. The Plan is being

amended and restated effective January 1, 2001 (i) to eliminate the minimum

deferral amount requirement, (ii) to specifically authorize separate investment

allocation among the Measurement Funds for existing Account Balance sums and

future contributions, (iii) to allow Participants to change their investment

elections daily rather than monthly, (iv) to remove the list of Measurement

Funds from the Plan, (v) to make certain administrative changes relating to the

enrollment process, (vi) to remove superfluous provisions relating to stock

option gain deferral, and (vii) to make certain other clarifying modifications.

 

ARTICLE 1

Definitions

 

For purposes

of this Plan, unless otherwise clearly apparent from the context, the following

phrases or terms shall have the following indicated meanings:

 

1.1                                 “Account Balance”

shall mean, with respect to a Participant, a credit on the records of the

Company equal to the sum of (i) the Deferral Account balance, (ii) the vested

Company Contribution Account balance and (iii) the vested Company Matching

Account balance.  The Account Balance,

and each other specified account balance, shall be a bookkeeping entry only and

shall be utilized solely as a device for the measurement and determination of

the amounts to be paid to a Participant, or his or her designated Beneficiary,

pursuant to this Plan.

 

1.2                                 “Accounting Firm”

shall have the meaning set forth in Section 3.8.

 

1.3                                 “Annual Deferral

Amount” shall mean that portion of a Participant’s Base Annual Salary, Bonus

and Directors Fees that a Participant elects to have, and is deferred, in

accordance with Article 3, for any one Plan Year.  In the event of a Participant’s Retirement, Disability

 

1

 

(if deferrals cease in accordance with Section 8.1), death or a

Termination of Employment prior to the end of a Plan Year, such year’s Annual

Deferral Amount shall be the actual amount withheld prior to such event.

 

1.4                                 “Base Annual Salary”

shall mean the annual cash compensation relating to services performed during

any calendar year, whether or not paid in such calendar year or included on the

Federal Income Tax Form W-2 for such calendar year, excluding bonuses,

commissions, overtime, fringe benefits, stock options, relocation expenses,

incentive payments, non-monetary awards, directors fees and other fees,

automobile and other allowances paid to a Participant for employment services

rendered (whether or not such allowances are included in the Employee’s gross

income).  Base Annual Salary shall be

calculated before reduction for compensation voluntarily deferred or

contributed by the Participant pursuant to all qualified or non-qualified plans

of any Employer and shall be calculated to include amounts not otherwise

included in the Participant’s gross income under Code Sections 125, 402(e)(3),

402(h), or 403(b) pursuant to plans established by any Employer; provided,

however, that all such amounts will be included in compensation only to the

extent that, had there been no such plan, the amount would have been payable in

cash to the Employee.

 

1.5                                 “Beneficiary” shall

mean one or more persons, trusts, estates or other entities, designated in

accordance with Article 9, that are entitled to receive benefits under this

Plan upon the death of a Participant.

 

1.6                                 “Beneficiary

Designation Form” shall mean the form established from time to time by the

Committee that a Participant completes, signs and returns to the Committee to

designate one or more Beneficiaries.

 

1.7                                 “Board” shall mean the

board of directors of the Company.

 

1.8                                 “Bonus” shall mean any

compensation, in addition to Base Annual Salary relating to services performed

during any calendar year, whether or not paid in such calendar year or included

on the Federal Income Tax Form W-2 for such calendar year, payable to a

Participant as an Employee under any Employer’s bonus and cash incentive plans,

excluding stock options.

 

1.9                                 “Business Day” shall

mean any day other than Saturday, Sunday or any legal holiday observed by the

New York Stock Exchange.

 

1.10                           “Change in Control” shall

mean the first to occur of any of the following events:

 

(a)                                  Any “person” (as that

term is used in Section 13 and 14(d)(2) of the Securities Exchange Act of 1934

(“Exchange Act”)) becomes the beneficial owner (as that term is used in Section

13(d) of the Exchange Act), directly or indirectly, of fifty percent (50%) or

more of the Company’s capital stock entitled to vote in the election of

directors;

 

2

 

(b)                                 During any period of

not more than two consecutive years, not including any period prior to the

adoption of this Plan, individuals who at the beginning of such period

constitute the board of directors of the Company, and any new director (other

than a director designated by a person who has entered into an agreement with

the Company to effect a transaction described in clause (a), (c), (d) or (e) of

this Section) whose election by the board of directors or nomination for

election by the Company’s stockholders was approved by a vote of at least

three-fourths (3⁄4ths) of the directors then still in office who either were

directors at the beginning of the period or whose election or nomination for

election was previously so approved, cease for any reason to constitute at

least a majority thereof;

 

(c)                                  The shareholders of

the Company approve any consolidation or merger of the Company, other than a

consolidation or merger of the Company in which the holders of the common stock

of the Company immediately prior to the consolidation or merger hold more than

fifty percent (50%) of the common stock of the surviving corporation

immediately after the consolidation or merger;

 

(d)                                 The shareholders of

the Company approve any plan or proposal for the liquidation or dissolution of

the Company; or

 

(e)                                  The shareholders of

the Company approve the sale or transfer of all or substantially all of the

assets of the Company to parties that are not within a “controlled group of

corporations” (as defined in Code Section 1563) in which the Company is a

member.

 

1.11                           “Claimant” shall have the

meaning set forth in Section 14.1.

 

1.12                           “Code” shall mean the

Internal Revenue Code of 1986, as it may be amended from time to time.

 

1.13                           “Committee” shall mean the

committee described in Article 12.

 

1.14                           “Company” shall mean Best

Buy Co., Inc., a Minnesota corporation, and any successor to all or

substantially all of the Company’s assets or business.

 

1.15                           “Company Contribution

Account” shall mean (i) the sum of the Participant’s Company Contribution

Amounts, plus or minus (ii) amounts credited or debited in accordance with all

the applicable crediting and debiting provisions of this Plan that relate to

the Participant’s Company Contribution Account, less (iii) all distributions

made to the Participant or his or her Beneficiary pursuant to this Plan that

relate to the Participant’s Company Contribution Account.

 

3

 

1.16                           “Company Contribution

Amount” shall mean, for any one Plan Year, the amount determined in accordance

with Section 3.5.

 

1.17                           “Company Matching Account”

shall mean (i) the sum of all of a Participant’s Company Matching Amounts, plus

or minus (ii) amounts credited or debited in accordance with all the applicable

crediting and debiting provisions of this Plan that relate to the Participant’s

Company Matching Account, less (iii) all distributions made to the Participant

or his or her Beneficiary pursuant to this Plan that relate to the

Participant’s Company Matching Account.

 

1.18                           “Company Matching Amount”

for any one Plan Year shall be the amount determined in accordance with Section

3.6.

 

1.19                           “Deduction Limitation” shall

mean the following described limitation on a benefit that may otherwise be

distributable pursuant to the provisions of this Plan.  Except as otherwise provided, this

limitation shall be applied to all distributions that are “subject to the

Deduction Limitation” under this Plan. 

If the Company determines in good faith prior to a Change in Control

that there is a reasonable likelihood that any compensation paid to a

Participant for a taxable year of the Employer would not be deductible by the

Employer solely by reason of the limitation under Code Section 162(m), then to

the extent deemed necessary by the Company to ensure that the entire amount of

any distribution to the Participant pursuant to this Plan prior to the Change

in Control is deductible, the Company may defer all or any portion of a

distribution under this Plan.  Any

amounts deferred pursuant to this limitation shall continue to be

credited/debited with additional amounts in accordance with Section 3.9 below,

even if such amount is being paid out in installments.  The amounts so deferred and amounts credited

thereon shall be distributed to the Participant or his or her Beneficiary (in

the event of the Participant’s death) at the earliest possible date, as

determined by the Company in good faith, on which the deductibility of

compensation paid or payable to the Participant for the taxable year of the

Employer during which the distribution is made will not be limited by Code

Section 162(m), or if earlier, the effective date of a Change in Control.  Notwithstanding anything to the contrary in

this Plan, the Deduction Limitation shall not apply to any distributions made

after a Change in Control.

 

1.20                           “Deferral Account” shall

mean (i) the sum of all of a Participant’s Annual Deferral Amounts, plus or

minus (ii) amounts credited or debited in accordance with all the applicable

crediting and debiting provisions of this Plan that relate to the Participant’s

Deferral Account, less (iii) all distributions made to the Participant or his

or her Beneficiary pursuant to this Plan that relate to his or her Deferral

Account.

 

1.21                           “Director” shall mean any

member of the board of directors of any Employer.

 

1.22                           “Directors Fees” shall mean

the annual fees paid by any Employer, including retainer fees and meetings

fees, as compensation for serving on the board of directors.

 

4

 

1.23                           “Disability” shall mean a

period of disability during which a Participant qualifies for permanent

disability benefits under the Participant’s Employer’s long-term disability

plan, or, if a Participant does not participate in such a plan, a period of

disability during which the Participant would have qualified for permanent

disability benefits under such a plan had the Participant been a participant in

a plan, as determined in the sole discretion of the Committee.  If the Participant’s Employer does not

sponsor such a plan, or discontinues to sponsor such a plan, Disability shall

be determined by the Committee in its sole discretion.

 

1.24                           “Disability Benefit” shall

mean the benefit set forth in Article 8.

 

1.25                           “Election Form and Plan

Agreement” shall mean the form(s) established from time to time by the

Committee that a Participant completes, signs and returns (or completes and

submits online) to the Committee to indicate participation in the Plan and/or

to make an election under the Plan. The terms of any Election Form and Plan

Agreement may be different for any Participant, and any Election Form and Plan

Agreement may provide additional benefits not set forth in the Plan or limit

the benefits otherwise provided under the Plan; provided, however, that any

such additional benefits or benefit limitations must be agreed to by the

Company, the Employer and the Participant.

 

1.26                           “Employee” shall mean a

person who is an employee of any Employer. 

The term “Employee” does not include any person performing services

purportedly as an independent contractor, consultant, or “leased” worker, even

if such person alleges or is found to be a “common-law employee” of the Company

and/or any of its subsidiaries, and such persons are not eligible to

participate in the Plan.

 

1.27                           “Employer(s)” shall mean the

Company and/or any of its subsidiaries (now in existence or hereafter formed or

acquired) whose Employees and/or Directors have been selected by the Board to

participate in the Plan.

 

1.28                           “ERISA” shall mean the

Employee Retirement Income Security Act of 1974, as it may be amended from time

to time.

 

1.29                           “401(k) Plan” shall be that

certain Best Buy Co., Inc. Retirement Savings Plan dated October 1, 1990 and

adopted by the Company, as it may be amended from time to time.

 

1.30                           “In-Service Distribution”

shall mean the payout set forth in Section 4.1.

 

1.31                           “Participant” shall mean any

Employee or Director (i) who is selected to participate in the Plan, (ii) who

elects to participate in the Plan, (iii) who properly completes and submits an

Election Form and Plan Agreement and a Beneficiary Designation Form, (iv) whose

Election Form and Plan Agreement and Beneficiary Designation Form are accepted

by the Committee, (v) who commences participation in the Plan, and (vi) whose

Election Form and Plan Agreement has not terminated.  A spouse or former spouse of a Participant shall not be

 

5

 

treated as a Participant in the Plan or have an Account Balance under

the Plan, even if he or she has an interest in the Participant’s benefits under

the Plan as a result of applicable law or property settlements resulting from

legal separation or divorce.

 

1.32                           “Plan” shall mean the

Company’s Deferred Compensation Plan, which shall be evidenced by this

instrument, as it may be amended from time to time.

 

1.33                           “Plan Year” shall mean a

period beginning on January 1 of each calendar year and continuing through

December 31 of such calendar year.

 

1.34                           “Pre-Retirement Survivor

Benefit” shall mean the benefit set forth in Article 6.

 

1.35                           “Quarterly Installment

Method” shall be a quarterly installment payment over the number of quarters

selected by the Participant in accordance with this Plan, calculated as

follows: The Account Balance of the Participant shall be calculated as of the

close of business on the last business day of the quarter.  The quarterly installment shall be

calculated by multiplying this balance by a fraction, the numerator of which is

one, and the denominator of which is the remaining number of quarterly payments

due the Participant.  By way of example,

if the Participant elects a forty (40) quarter Annual Installment Method, the

first payment shall be one-fortieth (1/40th) of the Account Balance, calculated

as described in this definition.  The

following quarter, the payment shall be one-thirty-ninth (1/39th) of the

Account Balance, calculated as described in this definition.  Each quarterly installment shall be paid on

or as soon as practicable after the last business day of the applicable

quarter.  Unless the Committee

determines otherwise, quarterly installment payments shall be drawn on a

pro-rata basis from each of the applicable Measurement Funds used to determine

amounts to be credited or debited to the Participant’s Account Balance pursuant

to Section 3.9 below.

 

1.36                           “Retirement”, “Retire(s)” or

“Retired” shall mean, with respect to an Employee, severance from employment

from all Employers for any reason other than a leave of absence, death or

Disability on or after the attainment of age sixty (60); and shall mean with

respect to a Director who is not an Employee, severance of his or her

directorships with all Employers on or after the attainment of age seventy

(70).  If a Participant is both an

Employee and a Director, Retirement shall not occur until he or she Retires as

both an Employee and a Director, which Retirement shall be deemed to be a

Retirement as a Director; provided, however, that such a Participant may elect,

at least five years prior to Retirement and in accordance with the policies and

procedures established by the Committee, to Retire for purposes of this Plan at

the time he or she Retires as an Employee, which Retirement shall be deemed to

be a Retirement as an Employee.

 

1.37                           “Retirement Benefit” shall

mean the benefit set forth in Article 5.

 

1.38                           “Termination Benefit” shall

mean the benefit set forth in Article 7.

 

6

 

1.39                           “Termination of Employment”

shall mean the severing of employment with all Employers, or service as a

Director of all Employers, voluntarily or involuntarily, for any reason other

than Retirement, Disability, death or an authorized leave of absence.  If a Participant is both an Employee and a

Director, a Termination of Employment shall occur only upon the termination of

the last position held; provided, however, that such a Participant may elect,

at least five years before cessation of employment with all Employers and in

accordance with the policies and procedures established by the Committee, to be

treated for purposes of this Plan as having experienced a Termination of

Employment at the time he or she ceases employment with all Employers as an

Employee.

 

1.40                           “Trust” shall mean one or

more trusts established pursuant to that certain Master Trust Agreement, dated

as of April 1, 1998 between the Company and the trustee named therein, as

amended from time to time.

 

1.41                           “Unforeseeable Financial

Emergency” shall mean an unanticipated emergency that is caused by an event

beyond the control of the Participant that would result in severe financial

hardship to the Participant resulting from (i) a sudden and unexpected illness

or accident of the Participant or a dependent of the Participant, (ii) a loss

of the Participant’s property due to casualty, or (iii) such other

extraordinary and unforeseeable circumstances arising as a result of events

beyond the control of the Participant, all as determined in the sole discretion

of the Committee.

 

1.42                           “Years of Service” shall

mean the total number of years in which a Participant has been employed by one

or more Employers, as defined in Article IV of the 401(k) Plan.

 

ARTICLE 2

Selection,

Enrollment, Eligibility

 

2.1                                 Selection by Committee.  Participation in the Plan shall be limited

to a select group of management and highly compensated Employees and Directors

of the Employers, as determined by the Committee in its sole discretion.  From that group, the Committee shall select,

in its sole discretion, Employees and Directors to participate in the Plan.

 

2.2                                 Enrollment Requirements.  As a condition to participation, each

selected Employee or Director shall complete, sign and return (or complete and

submit online, to the extent available) to the Committee an Election Form and

Plan Agreement and a Beneficiary Designation Form, all within thirty (30) days

after he or she is selected to participate in the Plan.  In addition, the Committee shall establish

from time to time such other enrollment requirements as it determines in its

sole discretion are necessary.

 

2.3                                 Eligibility; Commencement of Participation.  Provided an Employee or Director selected to

participate in the Plan has met all enrollment requirements set forth in this

Plan and

 

7

 

required by the Committee, including returning all required documents

to the Committee within the specified time period, that Employee or Director

shall commence participation in the Plan on the first day of the pay period

commencing in the Plan Year following the date on which the Employee or

Director completes all enrollment requirements.  If an Employee or a Director fails to meet all such requirements

within the period required, in accordance with Section 2.2, that Employee or

Director shall not be eligible to participate in the Plan until the first day

of the pay period commencing in the Plan Year following the delivery to and

acceptance by the Committee of the required documents.

 

2.4                                 Termination of Participation and/or Deferrals.  If the Committee determines in good faith

that a Participant no longer qualifies as a member of a select group of

management or highly compensated employees, as membership in such group is determined

in accordance with Sections 201(2), 301(a)(3) and 401(a)(1) of ERISA, the

Committee shall have the right, in its sole discretion, to (i) terminate any

deferral election the Participant has made for the remainder of the Plan Year

in which the Participant’s membership status changes, (ii) prevent the

Participant from making future deferral elections and/or (iii) immediately

distribute the Participant’s then Account Balance as a Termination Benefit

subject to Article 7 and terminate the Participant’s participation in the Plan.

 

ARTICLE 3

Deferral

Commitments/Company Matching/Crediting/Taxes

 

3.1                                 Minimum Deferral.  There is no minimum amount for deferral of Base Annual Salary,

Bonus or Director’s Fees under the Plan. If no election is made, the amount deferred

shall be zero.

 

3.2                                 Maximum Deferral.

 

(a)                                  Base Annual Salary, Bonus and

Directors Fees. For each Plan Year, a Participant may elect to

defer, as his or her Annual Deferral Amount, Base Annual Salary, Bonus and/or

Directors Fees up to the following maximum percentages for each deferral

elected:

 

	

  Deferral

  	

   

  	

  Maximum

  Amount

  	

   

  
	

  Base Annual Salary

  	

   

  	

  75

  	

  %

  
	

  Bonus

  	

   

  	

  100

  	

  %

  
	

  Directors Fees

  	

   

  	

  100

  	

  %

  

 

(b)                                 Notwithstanding the

foregoing, if a Participant first becomes a Participant after the first day of

a Plan Year, the maximum Annual Deferral Amount, with respect to Base Annual

Salary, Bonus and Directors Fees shall be limited to the amount of

 

8

 

compensation not yet earned by the Participant as of the date the

Participant submits an Election Form and Plan Agreement to the Committee for

acceptance.

 

3.3                                 Election to Defer; Effect of Election Form and Plan Agreement.

 

(a)                                  Elections.  For each Plan Year, the Participant shall

make an irrevocable deferral election for that Plan Year, and such other

elections as the Committee deems necessary or desirable under the Plan.  For these elections to be valid, the

Election Form and Plan Agreement must be completed and submitted by the

Participant, timely delivered to the Committee, in accordance with its rules

and procedures, before the end of the Plan Year preceding the Plan Year for

which the election is made.  If no such

Election Form and Plan Agreement is timely delivered for a Plan Year, the

Annual Deferral Amount shall be zero for that Plan Year.

 

(b)                                 Effect of Termination on Pending

Election.  Upon the

occurrence of a Termination of Employment, any pending election shall be

automatically terminated.

 

3.4                                 Withholding of Annual Deferral Amounts.  For each Plan Year, the Base Annual Salary

portion of the Annual Deferral Amount shall be withheld from each regularly

scheduled Base Annual Salary payroll in equal amounts, as may be adjusted from

time to time for increases and decreases in Base Annual Salary.  The Bonus and/or Directors Fees portion of

the Annual Deferral Amount shall be withheld at the time the Bonus or Directors

Fees are or otherwise would be paid to the Participant, whether or not this

occurs during the Plan Year itself.

 

3.5                                 Company Contribution Amount.  For each Plan Year, the Company, in its sole

discretion, may, but is not required to, credit any amount it desires to any

Participant’s Company Contribution Account under this Plan, which amount shall

be for that Participant the Company Contribution Amount for that Plan

Year.  The amount so credited to a

Participant may be smaller or larger than the amount credited to any other

Participant, and the amount credited to any Participant for a Plan Year may be

zero, even though one or more other Participants receive a Company Contribution

Amount for that Plan Year.  The Company

Contribution Amount, if any, shall be credited as of the date(s) selected by

the Company.

 

3.6                                 Company Matching Amount.  For each Plan Year, the Company, in its sole

discretion, may, but is not required to, credit to each Participant’s Company

Matching Account a Company Matching Amount for any Plan Year equal to a

percentage of all or a portion of the Participant’s Annual Deferral Amount for

such Plan Year.  Such Company Matching

Amount may, but need not be, coordinated with any matching contribution made to

the 401(k) Plan on the Participant’s behalf for the plan year of the 401(k)

Plan that corresponds to the Plan Year. 

The Company Matching Amount, if any, shall be credited as of the date(s)

selected by the Company, which may, but need not be, the same date(s) that

matching contributions are credited under the 401(k) Plan.

 

9

 

3.7                                 Investment of Trust Assets.  The trustees of the Trust shall be

authorized, upon written instructions received from the Committee or investment

manager appointed by the Committee, to invest and reinvest the assets of the

Trust in accordance with the applicable trust agreements, including the

disposition of Company stock and reinvestment of the proceeds in one or more

investment vehicles designated by the Committee.

 

3.8                                 Vesting.

 

(a)                                  A Participant shall

at all times be one hundred percent (100%) vested in his or her Deferral

Account.

 

(b)                                 A Participant shall be

vested in his or her Company Contribution Account, if any, and any earnings

credited thereon pursuant to Section 3.9 below, in accordance with the vesting

schedule established by the Company in its sole discretion.

 

(c)                                  A Participant shall

be vested in his or her Company Matching Account, and any earnings credited

thereon pursuant to Section 3.9 below, as follows: (i) with respect to all

benefits under this Plan other than the Termination Benefit, a Participant’s

vested Company Matching Account shall equal one hundred percent (100%) of such

Participant’s Company Matching Account; and (ii) with respect to the

Termination Benefit, a Participant’s Company Matching Account shall vest on the

basis of the Participant’s Years of Service at the time the Participant

experiences a Termination of Employment, in accordance with the following

schedule:

 

	

  Years of Service at Date of

  Termination of Employment

  	

   

  	

  Vested

  Percentage of

  Company Matching Account

  	

   

  
	

  Less than 2 years

  	

   

  	

  0

  	

  %

  
	

  2 years or more, but less than 3

  	

   

  	

  20

  	

  %

  
	

  3 years or more, but less than 4

  	

   

  	

  40

  	

  %

  
	

  4 years or more, but less than 5

  	

   

  	

  60

  	

  %

  
	

  5 years or more

  	

   

  	

  100

  	

  %

  

 

(d)                                 Notwithstanding

anything to the contrary contained in this Section 3.8, in the event of either

(i) a Change in Control, or (ii) a termination of the Plan as described in

Section 11.1 below, a Participant’s Company Contribution Account and Company

Matching Account shall immediately become one hundred percent (100%) vested (if

it is not already vested in accordance with the above vesting schedules).

 

(e)                                  Notwithstanding subsection

(d), the vesting schedule for a Participant’s Company Contribution Account and

Company Matching Account shall not be accelerated upon a Change in Control to

the extent that the Committee determines that such acceleration would cause the

deduction limitations of Section 280G of the Code to

 

10

 

become effective.  In the event

that all of a Participant’s Company Contribution Account and/or Company

Matching Account is not vested pursuant to such a determination, the

Participant may request independent verification of the Committee’s

calculations with respect to the application of Section 280G.  In such case, the Committee must provide to

the Participant within fifteen (15) business days of such a request an opinion

from a nationally recognized accounting firm selected by the Participant (the

“Accounting Firm”).  The opinion shall

state the Accounting Firm’s opinion that any limitation in the vested

percentage hereunder is necessary to avoid the limits of Code Section 280G and

contain supporting calculations.  The

cost of such opinion shall be paid for by the Company.

 

3.9                                 Crediting/Debiting of Account Balances.  In accordance with, and subject to, the

rules and procedures that are established from time to time by the Committee,

in its sole discretion, amounts shall be credited or debited to a Participant’s

Account Balance, which solely for purposes of this Section 3.9 shall include

the Participant’s Company Contribution Account and Company Matching Account regardless

of vesting status,  in accordance with

the following rules:

 

(a)                                  Election of Measurement Funds.  A Participant, in connection with his or her

initial deferral election in accordance with Section 3.3(a) above, shall elect,

on the Election Form and Plan Agreement, one or more Measurement Fund(s) (as

described in Section 3.9(c) below) to be used to determine the additional

amounts to be credited or debited to his or her Account Balance for the first

day in which the Participant commences participation in the Plan and continuing

thereafter for each subsequent day in which the Participant participates in the

Plan, unless changed in accordance with the next sentence. Commencing with the

first day that follows the Participant’s commencement of participation in the

Plan and continuing thereafter for each subsequent day in which the Participant

participates in the Plan, the Participant may (but is not required to) elect,

by submitting an Election Form and Plan Agreement to the Committee that is

accepted by the Committee, to add or delete one or more Measurement Fund(s) to

be used to determine the additional amounts to be credited or debited to his or

her Account Balance, or to change the portion of his or her Account Balance

allocated to each previously or newly elected Measurement Fund. The Participant

may change the percentage of future contributions to be invested in each

Measurement Fund and/or elect to have all or part the Participant’s previously

invested Account Balance transferred among the Measurement Funds at any time.

If an election is made in accordance with this Subsection (a), it shall be

effective as soon as administratively practicable after the election is

made.  Generally, an election shall

become effective on the day such election is made if such election is received

before 3:00 PM CT on any Business Day, and any election received after 3:00 PM

CT on a Business Day, or any election received on a day other than a Business

Day, shall be effective as of the next Business Day.  Any election shall continue thereafter

 

11

 

for each subsequent day in which the Participant participates in the

Plan, unless changed in accordance with this Subsection (a).

 

(b)                                 Proportionate Allocation.  In making any election described in Section

3.9(a) above, the Participant shall specify on the Election Form and Plan

Agreement, in increments of one percentage point (1%), the percentage of his or

her Account Balance to be allocated to a Measurement Fund (as if the Participant

was making an investment in that Measurement Fund with that portion of his or

her Account Balance).

 

(c)                                  Measurement Funds. The

Participant may elect one or more measurement funds described in the Election

Form and Plan Agreement and/or accompanying Plan enrollment materials, based on

certain mutual funds (the “Measurement Funds”), for the purpose of crediting or

debiting additional amounts to his or her Account Balance. As necessary, the

Committee may, in its sole discretion, discontinue, substitute or add a

Measurement Fund.  Each such action will

take effect as of the first day of the calendar month that follows by thirty

(30) days the day on which the Committee gives Participants advance written

notice of such change.

 

(d)                                 Crediting or Debiting Method.  The performance of each elected Measurement

Fund (either positive or negative) will be determined by the Committee, in its

reasonable discretion, based on the performance of the Measurement Funds

themselves.  A Participant’s Account

Balance shall be credited or debited on a daily basis based on the performance

of each Measurement Fund selected by the Participant, as determined by the

Committee in its sole discretion, as though (i) a Participant’s Account Balance

were invested in the Measurement Fund(s) selected by the Participant, in the

percentages applicable to such day, at the closing price on such date; (ii) the

portion of the Annual Deferral Amount that was actually deferred during any day

were invested in the Measurement Fund(s) selected by the Participant, in the

percentages applicable to such day, on the day on which such amounts are

actually deferred from the Participant’s Base Annual Salary through reductions

in his or her payroll, at the closing price on such date; and (iii) any

distribution made to a Participant that decreases such Participant’s Account

Balance ceased being invested in the Measurement Fund(s), in the percentages

applicable to such day, on the Business Day prior to the distribution, at the

closing price on such prior Business Day. The Participant’s Company Matching

Amount shall be credited to his or her Company Matching Account for purposes of

this Section 3.9(d) as of the close of business on the date(s) that matching

contributions are credited under the 401(k) Plan.  The Participant’s Company Contribution Amount shall be credited

to his or her Company Contribution Account on any date(s) selected by the

Company.

 

(e)                                  No Actual Investment.  Notwithstanding any other provision of this

Plan that may be interpreted to the contrary, the Measurement Funds are to be

used for

 

12

 

measurement purposes only, and a Participant’s election of any such

Measurement Fund, the allocation to his or her Account Balance thereto, the

calculation of additional amounts and the crediting or debiting of such amounts

to a Participant’s Account Balance shall not be considered or construed in any

manner as an actual investment of his or her Account Balance in any such

Measurement Fund.  In the event that the

Company or the trustees of the Trust, in their own discretion, decide to invest

funds in any or all of the Measurement Funds, no Participant shall have any

rights in or to such investments themselves. 

Without limiting the foregoing, a Participant’s Account Balance shall at

all times be a bookkeeping entry only and shall not represent any investment

made on his or her behalf by the Company or the Trust; the Participant shall at

all times remain an unsecured creditor of the Company, and where applicable,

the Participant’s Employer.

 

3.10                           FICA and Other Taxes.

 

(a)                                  Annual Deferral Amounts.  For each Plan Year in which an Annual

Deferral Amount is being withheld from a Participant, the Participant’s

Employer(s) shall withhold from that portion of the Participant’s Base Annual

Salary and Bonus that is not being deferred, in a manner determined by the

Employer(s), the Participant’s share of FICA and other employment taxes on such

Annual Deferral Amount.  If necessary,

the Committee may reduce the Annual Deferral Amount in order to comply with

this Section 3.10.

 

(b)                                 Company Matching and Contribution

Amounts.  When a

Participant becomes vested in a portion of his or her Company Matching Account

or Company Contribution Account, the Participant’s Employer(s) shall withhold

from the Participant’s Base Annual Salary and/or Bonus that is not deferred, in

a manner determined by the Employer(s), the Participant’s share of FICA and

other employment taxes.  If necessary,

the Committee may reduce the vested portion of the Participant’s Company

Matching Account in order to comply with this Section 3.10.

 

3.11                           Distributions.  The Company, or the trustees of the Trust, shall withhold from

any payments made to a Participant under this Plan all federal, state and local

income, employment and other taxes required to be withheld in connection with

such payments, in amounts and in a manner to be determined in the sole

discretion of the Company and the trustees of the Trust.

 

13

 

ARTICLE 4

In-Service

Distribution; Unforeseeable Financial Emergencies

 

4.1                                 In-Service Distribution.  In connection with each election to defer an

Annual Deferral Amount, a Participant may irrevocably elect to receive a future

“In-Service Distribution” from the Plan with respect to all or a portion of

such Annual Deferral Amount.  Subject to

the Deduction Limitation, the In-Service Distribution shall be a lump sum

payment in an amount that is equal to the portion of the Annual Deferral Amount

for which the Participant has elected to receive an In-Service Distribution

plus or minus amounts credited or debited in the manner provided in Section 3.9

above on that amount, determined at the time that the In-Service

Distribution  becomes payable (rather

than the date of a Termination of Employment). 

Subject to the Deduction Limitation and the other terms and conditions

of this Plan, each In-Service Distribution elected shall be paid out during a

sixty (60) day period commencing immediately after the last day of any Plan

Year designated by the Participant that is at least five Plan Years after the

Plan Year in which the Annual Deferral Amount is actually deferred.  By way of example, if a five year In-Service

Distribution is elected for Annual Deferral Amounts that are deferred in the

Plan Year commencing January 1, 2001, the five year In-Service Distribution

would become payable during a sixty (60) day period commencing no earlier than

January 1, 2007.

 

4.2                                 Other Benefits Take Precedence Over In-Service Distribution.  Should an event occur that triggers a

benefit under Article 5, 6, 7 or 8, any Annual Deferral Amount, plus amounts

credited or debited thereon, that is subject to an In-Service Distribution

election under Section 4.1 shall not be paid in accordance with Section 4.1 but

shall be paid in accordance with the other applicable Article.

 

4.3                                 Withdrawal Payout/Suspensions for Unforeseeable

Financial Emergencies. 

If the Participant experiences an Unforeseeable Financial Emergency, the

Participant may petition the Committee to (i) suspend any deferrals required to

be made by a Participant and/or (ii) receive a partial or full payout from the

Plan.  The payout shall not exceed the

lesser of the Participant’s Account Balance, calculated as if such Participant

were receiving a Termination Benefit, or the amount reasonably needed to

satisfy the Unforeseeable Financial Emergency. 

If, subject to the sole discretion of the Committee, the petition for a

suspension and/or payout is approved, suspension shall take effect upon the

date of approval and any payout shall be made within sixty (60) days of the

date of approval.  The payment of any

amount under this Section 4.3 shall not be subject to the Deduction Limitation.

 

14

 

ARTICLE 5

Retirement Benefit

 

5.1                                 Retirement Benefit.  Subject to the Deduction Limitation, a

Participant who Retires shall receive, as a Retirement Benefit, his or her

Account Balance.

 

5.2                                 Payment of Retirement Benefit.  A Participant, in connection with his or her

commencement of participation in the Plan, shall elect on an Election Form and

Plan Agreement to receive the Retirement Benefit in a lump sum or pursuant to a

Quarterly Installment Method of twenty (20), forty (40) or sixty (60) quarters.  If the Participant’s Account Balance at the

time of Retirement is less than $10,000, the Committee, at its discretion, may

allow the Retirement Benefit to be paid in a lump sum.  The Participant may annually change his or

her election to an allowable alternative payout period by submitting a new

Election Form and Plan Agreement to the Committee, provided that any such

Election Form and Plan Agreement is submitted at least 3 years prior to the

Participant’s Retirement and is accepted by the Committee in its sole discretion.

The Election Form and Plan Agreement most recently accepted by the Committee

shall govern the payout of the Retirement Benefit.  If a Participant does not make any election with respect to the

payment of the Retirement Benefit, then such benefit shall be payable in a lump

sum.  The lump sum payment shall be

made, or installment payments shall commence, no later than sixty (60) days

after the last day of the Plan Year in which the Participant Retires.  Any payment made shall be subject to the

Deduction Limitation.

 

5.3                                 Death Prior to Completion of Retirement Benefit.  If a Participant dies after Retirement but

before the Retirement Benefit is paid in full, the Participant’s unpaid

Retirement Benefit payments shall continue and shall be paid to the Participant’s

Beneficiary (i) over the remaining number of quarters and in the same amounts

as that benefit would have been paid to the Participant had the Participant

survived, or (ii) in a lump sum, if requested by the Beneficiary and allowed in

the sole discretion of the Committee, that is equal to the Participant’s unpaid

remaining Account Balance.

 

ARTICLE 6

Pre-Retirement

Survivor Benefit

 

6.1                                 Pre-Retirement Survivor Benefit.  Subject to the Deduction Limitation, the

Participant’s Beneficiary shall receive a Pre-Retirement Survivor Benefit equal

to the Participant’s Account Balance if the Participant dies before he or she

Retires, experiences a Termination of Employment or suffers a Disability.

 

6.2                                 Payment of Pre-Retirement Survivor Benefit.  A Participant, in connection with his or her

commencement of participation in the Plan, shall elect on an Election Form and

Plan

 

15

 

Agreement whether the Pre-Retirement Survivor Benefit shall be received

by his or her Beneficiary in a lump sum or pursuant to a Quarterly Installment

Method of twenty (20) or forty (40) quarters. 

The Participant may annually change this election to an allowable

alternative payout period by submitting a new Election Form and Plan Agreement

to the Committee, which form must be accepted by the Committee in its sole

discretion.  The Election Form and Plan

Agreement most recently accepted by the Committee prior to the Participant’s

death shall govern the payout of the Participant’s Pre-Retirement Survivor

Benefit.  If a Participant does not make

any election with respect to the payment of the Pre-Retirement Survivor

Benefit, then such benefit shall be paid in a lump sum.  Despite the foregoing, if the Participant’s

Account Balance at the time of his or her death is less than $25,000, payment

of the Pre-Retirement Survivor Benefit may be made, in the sole discretion of

the Committee, in a lump sum or pursuant to a Quarterly Installment Method of

not more than twenty (20) quarters.  The

lump sum payment shall be made, or installment payments shall commence, no

later than sixty (60) days after the last day of the Plan Year in which the

Committee is provided with proof that is satisfactory to the Committee of the

Participant’s death.  Any payment made

shall be subject to the Deduction Limitation.

 

ARTICLE 7

Termination Benefit

 

7.1                                 Termination Benefit.  Subject to the Deduction Limitation, the

Participant shall receive a Termination Benefit, which shall be equal to the

Participant’s vested Account Balance (with vesting determined as of the date of

the Participant’s Termination of Employment), if a Participant experiences a

Termination of Employment prior to his or her Retirement, death or Disability.

 

7.2                                 Payment of Termination Benefit.  If the Participant’s Account Balance at the

time of his or her Termination of Employment is less than $25,000, payment of

his or her Termination Benefit shall be paid in a lump sum.  If his or her Account Balance at such time

is equal to or greater than that amount, the Participant may request and the

Committee, in its sole discretion, may allow the Termination Benefit to be paid

in a lump sum or pursuant to a Quarterly Installment Method of twenty (20)

quarters.  The lump sum payment shall be

made, or installment payments shall commence, no later than sixty (60) days

after the last day of the Plan Year in which the Participant experiences the

Termination of Employment.  Any payment

made shall be subject to the Deduction Limitation.

 

16

 

ARTICLE 8

Disability Waiver and

Benefit

 

8.1                                 Disability Waiver.

 

(a)                                  Waiver of Deferral.  A Participant who is determined by the

Committee to be suffering from a Disability shall be excused from fulfilling

that portion of the Annual Deferral Amount commitment that would otherwise have

been withheld from a Participant’s Base Annual Salary, Bonus and/or Directors

Fees for the Plan Year during which the Participant first suffers a

Disability.  During the period of

Disability, the Participant shall not be allowed to make any additional

deferral elections, but will continue to be considered a Participant for all

other purposes of this Plan.

 

(b)                                 Return to Work.  If a Participant returns to employment, or

service as a Director, with an Employer, after a Disability ceases, the

Participant may elect to defer an Annual Deferral Amount for the Plan Year

following his or her return to employment or service and for every Plan Year

thereafter while a Participant in the Plan; provided such deferral elections

are otherwise allowed and an Election Form and Plan Agreement is delivered to

and accepted by the Committee for each such election in accordance with Section

3.3 above.

 

8.2                                 Continued Eligibility; Disability Benefit.  A Participant suffering a Disability shall,

for benefit purposes under this Plan, continue to be considered to be employed,

or in the service of an Employer as a Director, and shall be eligible for the

benefits provided for in Articles 4, 5, 6 or 7 in accordance with the

provisions of those Articles. 

Notwithstanding the above, the Committee shall have the right to, in its

sole and absolute discretion and for purposes of this Plan only, and must in

the case of a Participant who is otherwise eligible to Retire, deem the

Participant to have experienced a Termination of Employment, or in the case of

a Participant who is eligible to Retire, to have Retired, at any time (or in

the case of a Participant who is eligible to Retire, as soon as practicable)

after such Participant is determined to be suffering a Disability, in which

case the Participant shall receive a Disability Benefit equal to his or her

Account Balance at the time of the Committee’s determination; provided,

however, that should the Participant otherwise have been eligible to Retire, he

or she shall be paid in accordance with Article 5.  The Disability Benefit shall be paid in a lump sum within sixty

(60) days of the Committee’s exercise of such right.  Any payment made shall be subject to the Deduction Limitation.

 

8.3                                 Short-Term Disability Waiver.  If a Participant qualifies for and receives

short-term disability benefits under any short-term disability plan maintained

by Participant’s Employer, the Participant shall continue to be considered

employed by the Employer for purposes of this Plan and the Participant shall be

excused from making deferrals under the

 

17

 

Plan until the earlier of the date the short-term disability benefits

expire or the Participant returns to a paid employment status.  Upon such expiration or return, deferrals

shall resume for the remaining portion of the Plan Year in which the expiration

or return occurs, based on the deferral election, if any, made for that Plan

Year.  If no election was made for that

Plan Year, no deferral shall be withheld.

ARTICLE 9

Beneficiary

Designation

 

9.1                                 Beneficiary.  Each Participant shall have the right, at any time, to designate

his or her Beneficiary(ies) (both primary as well as contingent) to receive any

benefits payable under the Plan to a beneficiary upon the death of a

Participant.  The Beneficiary designated

under this Plan may be the same as or different from the Beneficiary

designation under any other plan of an Employer in which the Participant

participates.

 

9.2                                 Beneficiary Designation; Change;

Spousal Consent.  A

Participant shall designate his or her Beneficiary by completing and signing

the Beneficiary Designation Form, and returning it to the Committee or its

designated agent.  A Participant shall

have the right to change a Beneficiary by completing, signing and otherwise

complying with the terms of the Beneficiary Designation Form and the

Committee’s rules and procedures, as in effect from time to time.  If the Participant names someone other than

his or her spouse as a Beneficiary of at least fifty percent (50%) of the

Participant’s benefits,  a spousal

consent, in the form designated by the Committee, must be signed by that

Participant’s spouse and returned to the Committee.  Upon the acceptance by the Committee of a new Beneficiary

Designation Form, all Beneficiary designations previously filed shall be

canceled.  The Committee shall be

entitled to rely on the last Beneficiary Designation Form filed by the

Participant and accepted by the Committee prior to his or her death.

 

9.3                                 Acknowledgment.  No designation or change in designation of a Beneficiary shall be

effective until received and acknowledged in writing by the Committee or its

designated agent.

 

9.4                                 No Beneficiary Designation.  If a Participant fails to designate a Beneficiary

as provided in Sections 9.1, 9.2 and 9.3 above or, if all designated

Beneficiaries predecease the Participant or die prior to complete distribution

of the Participant’s benefits, then the Participant’s designated Beneficiary

shall be deemed to be his or her surviving spouse.  If the Participant has no surviving spouse, the benefits

remaining under the Plan to be paid to a Beneficiary shall be payable to the

executor or personal representative of the Participant’s estate.

 

9.5                                 Doubt as to Beneficiary.  If the Committee has any doubt as to the

proper Beneficiary to receive payments pursuant to this Plan, the Committee

shall have the right, exercisable in its

 

18

 

discretion, to cause the Company to withhold such payments until this

matter is resolved to the Committee’s satisfaction.

 

9.6                                 Discharge of Obligations.  The payment of benefits under the Plan to a

Beneficiary shall fully and completely discharge all Employers and the

Committee from all further obligations under this Plan with respect to the

Participant.

 

ARTICLE 10

Leave of Absence

 

10.1                           Paid Leave of Absence.  If a Participant is authorized by the

Participant’s Employer for any reason to take a paid leave of absence from the

employment of the Employer, the Participant shall continue to be considered

employed by the Employer and the Annual Deferral Amount shall continue to be

withheld during such paid leave of absence in accordance with Section 3.4.

 

10.2                           Unpaid Leave of Absence.  If a Participant is authorized by the

Participant’s Employer for any reason to take an unpaid leave of absence from

the employment of the Employer, the Participant shall continue to be considered

employed by the Employer and the Participant shall be excused from making

deferrals until the earlier of the date the leave of absence expires or the

Participant returns to a paid employment status.  Upon such expiration or return, deferrals shall resume for the

remaining portion of the Plan Year in which the expiration or return occurs,

based on the deferral election, if any, made for that Plan Year.  If no election was made for that Plan Year,

no deferral shall be withheld.

 

ARTICLE 11

Termination,

Amendment or Modification

 

11.1                           Termination.  Although the Company anticipates that it will continue the Plan

for an indefinite period of time, there is no guarantee that the Company will

continue the Plan or will not terminate the Plan at any time in the

future.  Accordingly, the Company reserves

the right to discontinue its sponsorship of the Plan and/or to terminate the

Plan at any time with respect to any or all of the participating Employees and

Directors, by action of its board of directors.  Upon the termination of the Plan with respect to the Employees

and/or Directors of any Employer, the Election Form and Plan Agreements of the

affected Participants who are employed by that Employer, or in the service of

that Employer as Directors, shall terminate, and such affected Participants (i)

shall immediately become one hundred percent (100%) vested in their Company

Contribution Accounts and Company Matching Accounts as provided in Section

3.8(d) above (subject to Section 3.8(e)), and (ii) shall have their Account

Balances (determined as if they had experienced a Termination of Employment on

the date of Plan termination or, if Plan termination occurs after the date upon

which a

 

19

 

Participant was eligible to Retire, then with respect to that

Participant as if he or she had Retired on the date of Plan termination) paid

to them as follows:  Prior to a Change

in Control, if the Plan is terminated with respect to all of the Employees

and/or Directors of an Employer, the Company shall have the right, in its sole

discretion, and notwithstanding any elections made by the Participant, to pay

such benefits in a lump sum or pursuant to a Quarterly Installment Method of up

to sixty (60) quarters, with amounts credited and debited during the

installment period as provided herein. 

If the Plan is terminated with respect to less than all of the Employees

and/or Directors of an Employer, the Company shall be required to pay such

benefits in a lump sum.  After a Change

in Control, the Company shall be required to pay such benefits in a lump

sum.  The termination of the Plan shall

not adversely affect any benefits to which a Participant or Beneficiary has

become entitled under the Plan as of the date of termination; provided however,

that the Company shall have the right to accelerate installment payments without

a premium or prepayment penalty by paying the Account Balance in a lump sum or

pursuant to a Quarterly Installment Method using fewer quarters (provided that

the present value of all payments that will have been received by a Participant

at any given point of time under the different payment schedule shall equal or

exceed the present value of all payments that would have been received at that

point in time under the original payment schedule).

 

11.2                           Amendment.  The Company may, at any time, amend or modify the Plan in whole

or in part by the action of its board of directors; provided, however, that:

(i) no amendment or modification shall be effective to decrease or restrict the

value of a Participant’s Account Balance in existence at the time the amendment

or modification is made, calculated as if the Participant had experienced a

Termination of Employment as of the effective date of the amendment or

modification or, if the amendment or modification occurs after the date upon

which the Participant was eligible to Retire, the Participant had Retired as of

the effective date of the amendment or modification, and (ii) no amendment or

modification of this Section 11.2 or Section 12.2 of the Plan shall be

effective.  The amendment or

modification of the Plan shall not adversely affect any benefits to which a

Participant or Beneficiary has become entitled under the Plan as of the date of

the amendment or modification; provided, however, that the Company shall have

the right to accelerate installment payments by paying the Account Balance in a

lump sum or pursuant to a Quarterly Installment Method using fewer quarters

(provided that the present value of all payments that will have been received

by a Participant at any given point of time under the different payment

schedule shall equal or exceed the present value of all payments that would

have been received at that point in time under the original payment schedule).

 

11.3                           Election Form and Plan Agreement.  Despite the provisions of Sections 11.1 and

11.2 above, if a Participant’s Election Form and Plan Agreement contains

benefits or limitations that are not in this Plan document, the Company may

only amend or terminate such provisions with the consent of the Participant.

 

20

 

11.4                           Effect of Payment.  The full payment of the applicable benefit

under Articles 4, 5, 6, 7 or 8 of the Plan shall completely discharge all

obligations to a Participant and his or her designated Beneficiaries under this

Plan and the Participant’s Election Form and Plan Agreement shall terminate.

 

ARTICLE 12

Administration

 

12.1                           Committee Duties.  Except as otherwise provided in this Article

12, this Plan shall be administered by a Committee which shall consist of the

Board, or such committee as the Board shall appoint.  Members of the Committee may be Participants under this

Plan.  The Committee shall also have the

discretion and authority to (i) make, amend, interpret, and enforce all

appropriate rules and regulations for the administration of this Plan and (ii)

decide or resolve any and all questions including interpretations of this Plan,

as may arise in connection with the Plan. 

Any individual serving on the Committee who is a Participant shall not vote

or act on any matter relating solely to himself or herself. When making a

determination or calculation, the Committee shall be entitled to rely on

information furnished by a Participant or the Company.

 

12.2                           Administration Upon Change In Control.  For purposes of this Plan, the Company shall

be the “Administrator” at all times prior to the occurrence of a Change in

Control.  Upon and after the occurrence

of a Change in Control, the “Administrator” shall be an independent third party

selected by the trustee of the Master Trust and approved by the individual who,

immediately prior to such event, was the Company’s Chief Executive Officer or,

if not so identified, the Company’s highest ranking officer (the

“Ex-CEO”).  The Administrator shall have

the discretionary power to determine all questions arising in connection with

the administration of the Plan and the interpretation of the Plan and Trust

including, but not limited to benefit entitlement determinations; provided,

however, upon and after the occurrence of a Change in Control, the Administrator

shall have no power to direct the investment of Plan assets or assets of the

Trust or select any investment manager or custodial firm for the Plan or

Trust.  Upon and after the occurrence of

a Change in Control, the Company must: (i) pay all reasonable administrative

expenses and fees of the Administrator; and (ii) supply full and timely

information to the Administrator or all matters relating to the Plan, the

Trust, the Participants and their Beneficiaries, the Account Balances of the

Participants, the date of circumstances of the Retirement, Disability, death or

Termination of Employment of the Participants, and such other pertinent

information as the Administrator may reasonably require.  Upon and after a Change in Control, the

Administrator may be terminated (and a replacement appointed) by the trustee of

the Master Trust only with the approval of the Ex-CEO.  Upon and after a Change in Control, the

Administrator may not be terminated by the Company.

 

21

 

12.3                           Agents. 

In the administration of this Plan, the Committee may, from time to

time, employ agents and delegate to them such administrative duties as it sees

fit (including acting through a duly appointed representative) and may from

time to time consult with counsel who may be counsel to any Employer.

 

12.4                           Binding Effect of Decisions.  The decision or action of the Administrator

with respect to any question arising out of or in connection with the

administration, interpretation and application of the Plan and the rules and

regulations promulgated hereunder shall be final and conclusive and binding

upon all persons having any interest in the Plan.

 

12.5                           Indemnity of Committee.  The Company shall indemnify and hold

harmless the members of the Committee, and any Employee or agent to whom the

duties of the Committee may be delegated, and the Administrator against any and

all claims, losses, damages, expenses or liabilities arising from any action or

failure to act with respect to this Plan, except in the case of gross

negligence or willful misconduct by the Committee, any of its members, any such

Employee or the Administrator.

 

12.6                           Employer Information.  To enable the Committee and/or Administrator to perform its

functions, the Company and each Employer shall supply full and timely

information to the Committee and/or Administrator, as the case may be, on all

matters relating to the compensation of its Participants, the date and

circumstances of the Retirement, Disability, death or Termination of Employment

of its Participants, and such other pertinent information as the Committee or

Administrator may reasonably require.

 

ARTICLE 13

Other Benefits and

Agreements

 

13.1                           Coordination with Other Benefits.  The benefits provided for a Participant and

Participant’s Beneficiary under the Plan are in addition to any other benefits

available to such Participant under any other plan or program for employees of

the Participant’s Employer.  The Plan

shall supplement and shall not supersede, modify or amend any other such plan

or program except as may otherwise be expressly provided.

 

ARTICLE 14

Claims Procedures

 

14.1                           Presentation of Claim.  Any Participant or Beneficiary of a deceased

Participant (such Participant or Beneficiary being referred to below as a

“Claimant”) may deliver to the Committee a written claim for a determination

with respect to the amounts distributable to such Claimant from the Plan.  If such a claim relates to the contents of a

notice received by the Claimant, the claim must be made within sixty (60) days

after such notice was received

 

22

 

by the Claimant.  All other

claims must be made within one hundred eighty (180) days of the date on which

the event that caused the claim to arise occurred.  The claim must state with particularity the determination desired

by the Claimant.

 

14.2                           Notification of Decision.  The Committee shall consider a Claimant’s

claim within a reasonable time, and shall notify the Claimant in writing:

 

(a)                                  that the Claimant’s

requested determination has been made, and that the claim has been allowed in

full; or

 

(b)                                 that the Committee has

reached a conclusion contrary, in whole or in part, to the Claimant’s requested

determination, and such notice must set forth in a manner calculated to be

understood by the Claimant:

 

(i)                                     the

specific reason(s) for the denial of the claim, or any part of it;

 

(ii)                                  specific

reference(s) to pertinent provisions of the Plan upon which such denial was

based;

 

(iii)                               a

description of any additional material or information necessary for the

Claimant to perfect the claim, and an explanation of why such material or

information is necessary; and

 

(iv)                              an

explanation of the claim review procedure set forth in Section 14.3 below.

 

14.3                           Review of a Denied Claim.  Within sixty (60) days after receiving a

notice from the Committee that a claim has been denied, in whole or in part, a

Claimant (or the Claimant’s duly authorized representative) may file with the

Committee a written request for a review of the denial of the claim.  Thereafter, but not later than thirty (30)

days after the review procedure began, the Claimant (or the Claimant’s duly

authorized representative):

 

(a)                                  may review pertinent

documents;

 

(b)                                 may submit written

comments or other documents; and/or

 

(c)                                  may request a

hearing, which the Committee, in its sole discretion, may grant.

 

14.4                           Decision on Review.  The Committee shall render its decision on review promptly, and

not later than sixty (60) days after the filing of a written request for review

of the denial, unless a hearing is held or other special circumstances require

additional time, in which case the Committee’s decision must be rendered within

one hundred twenty (120) days after such date. 

Such decision must be written in a manner calculated to be understood by

the Claimant, and it must contain:

 

23

 

(a)                                  specific reasons for

the decision;

 

(b)                                 specific reference(s)

to the pertinent Plan provisions upon which the decision was based; and

 

(c)                                  such other matters as

the Committee deems relevant.

 

14.5                           Subsequent Action; Mandatory Arbitration.

 

(a)                                  Subsequent Action.  A Claimant’s compliance with the foregoing

provisions of this Article 14 is a mandatory prerequisite to a Claimant’s right

to commence any subsequent action with respect to any claim for benefits under

this Plan.

 

(b)                                 Mandatory Arbitration.  Any controversy or claim arising out of or

relating to this Plan shall be resolved by arbitration in accordance with the

Commercial Arbitration Rules of the American Arbitration Association.  Arbitration shall be by a single arbitrator

experienced in the matters at issue and selected by the parties in accordance

with the Commercial Arbitration Rules of the American Arbitration

Association.  The arbitration shall be

held in such place in Minneapolis, Minnesota, as may be specified by the

arbitrator (or any place agreed to by the parties and the arbitrator).  The decision of the arbitrator shall be

final and binding as to any matters submitted under this Article 14; provided,

however, if necessary, such decision may be enforced in any court having

jurisdiction over the subject matter or over any of the parties to this

Plan.  All costs and expenses incurred

in connection with any such arbitration proceeding (including reasonable

attorneys’ fees) shall be borne by the party against which the decision is

rendered.  If the arbitrator’s decision

is a compromise, the determination of which party or parties bears the costs

and expenses incurred in connection with such arbitration proceeding shall be

made by the arbitrator on the basis of the arbitrator’s assessment of the

relative merits of the parties’ positions.

 

ARTICLE 15

Establishment of The

Trust

 

15.1                           Establishment and Funding of the Trust.

The Company shall establish the Trust. The Company shall at least annually

transfer over to the Trust such assets as the Company determines, in its sole

discretion, are necessary to provide, on a present value basis, for its

respective future liabilities created with respect to the Annual Deferral

Amounts, Company Contribution Amounts, and Company Matching Amounts for the

Participants for all periods prior to the transfer, as well as any debits and

credits to the Participants’ Account Balances

 

24

 

for all periods prior to the transfer, taking into consideration the

value of the assets in such Trust at the time of the transfer.

 

15.2                           Interrelationship of the

Plan and the Trust.  The

provisions of the Plan shall govern the rights of a Participant to receive

distributions pursuant to the Plan.  The

provisions of the Trust shall govern the rights of the Company, the

Participants, and the creditors of the Company and, where applicable, creditors

of Employers other than the Company, to the assets transferred to the

Trust.  The Company shall at all times

remain liable to carry out its obligations under the Plan.

 

15.3                           Distributions From the

Trust.  The Company’s

obligations under the Plan may be satisfied with assets of the Trust distributed

pursuant to the terms of the Trust, and any such distribution shall reduce the

Company’s obligations under this Plan.

 

ARTICLE 16

Miscellaneous

 

16.1                           Status of Plan.  The Plan is intended to be a plan that is not qualified within the

meaning of Code Section 401(a) and that “is unfunded and is maintained by an

employer primarily for the purpose of providing deferred compensation for a

select group of management or highly compensated employees” within the meaning

of ERISA Sections 201(2), 301(a)(3) and 401(a)(1).  The Plan shall be administered and interpreted to the extent

possible in a manner consistent with that intent.

 

16.2                           Unsecured General Creditor.  Participants and their Beneficiaries, heirs,

successors and assigns shall have no legal or equitable rights, interests or

claims in any property or assets of an Employer.  For purposes of the payment of benefits under this Plan, any and

all of the Company’s assets shall be, and remain, the general, unpledged

unrestricted assets of the Company.  The

Company’s obligation under the Plan shall be merely that of an unfunded and

unsecured promise to pay money in the future.

 

16.3                           Employer Liability.  The Company’s liability for the payment of

benefits, and the obligation of any Employer, shall be defined only by the Plan

and the Election Form and Plan Agreements, as entered into between the Company,

the Employer (if different from the Company) and a Participant.  Neither the Company nor an Employer shall

have any obligation to a Participant under the Plan except as expressly

provided in the Plan and his or her Election Form and Plan Agreement.

 

16.4                           Nonassignability.  Neither a Participant nor any other person

shall have any right to commute, sell, assign, transfer, pledge, anticipate,

mortgage or otherwise encumber, transfer, hypothecate, alienate or convey in

advance of actual receipt, the amounts, if any, payable hereunder, or any part

thereof, which are, and all rights to which are expressly declared to be,

 

25

 

unassignable and non-transferable. 

No part of the amounts payable shall, prior to actual payment, be

subject to seizure, attachment, garnishment or sequestration for the payment of

any debts, judgments, alimony or separate maintenance owed by a Participant or

any other person, be transferable by operation of law in the event of a

Participant’s or any other person’s bankruptcy or insolvency or be transferable

to a spouse as a result of a property settlement or otherwise.

 

16.5                           Not a Contract of Employment.  The terms and conditions of this Plan shall

not be deemed to constitute a contract of employment between any Employer and

the Participant.  Such employment is

hereby acknowledged to be an “at will” employment relationship that can be

terminated at any time for any reason, or no reason, with or without cause, and

with or without notice, unless expressly provided in a written employment

agreement.  Nothing in this Plan shall

be deemed to give a Participant the right to be retained in the service of any

Employer, either as an Employee or a Director, or to interfere with the right

of any Employer to discipline or discharge the Participant at any time.

 

16.6                           Furnishing Information.  A Participant or his or her Beneficiary will

cooperate with the Committee by furnishing any and all information requested by

the Committee and take such other actions as may be requested in order to

facilitate the administration of the Plan and the payments of benefits

hereunder, including but not limited to taking such physical examinations as

the Committee may deem necessary.

 

16.7                           Terms. 

Whenever any words are used herein in the masculine, they shall be

construed as though they were in the feminine in all cases where they would so

apply; and whenever any words are used herein in the singular or in the plural,

they shall be construed as though they were used in the plural or the singular,

as the case may be, in all cases where they would so apply.

 

16.8                           Captions. 

The captions of the articles, sections and paragraphs of this Plan are

for convenience only and shall not control or affect the meaning or

construction of any of its provisions.

 

16.9                           Governing Law.  Subject to ERISA, the provisions of this Plan shall be construed

and interpreted according to the internal laws of the State of Minnesota

without regard to its conflicts of laws principles.

 

16.10                     Notice. 

Any notice or filing required or permitted to be given to the Committee

under this Plan shall be sufficient if in writing and hand-delivered, or sent

by registered or certified mail, to the address below:

 

	

   

  	

  Best Buy

  Co., Inc.

  
	

   

  	

  Office of

  the General Counsel

  
	

   

  	

  7075 Flying

  Cloud Drive

  
	

   

  	

  Eden

  Prairie, MN 55344

  

 

26

 

	

  with a copy

  to:

  	

   

  
	

   

  	

  Elliot S.

  Kaplan, Esq.

  
	

   

  	

  Robins,

  Kaplan, Miller & Ciresi L.L.P.

  
	

   

  	

  2800 LaSalle

  Plaza

  
	

   

  	

  800 LaSalle

  Avenue

  
	

   

  	

  Minneapolis,

  MN 55402

  

 

Such notice shall be deemed given as of the date of delivery or, if

delivery is made by mail, as of the date shown on the postmark on the receipt

for registration or certification.

 

Any notice or filing required or permitted to be given to a Participant

under this Plan shall be sufficient if in writing and hand-delivered, or sent

by mail, to the last known address of the Participant.

 

16.11                     Successors.  The provisions of this Plan shall bind and inure to the benefit

of the Company and, where applicable, the Participant’s Employer, their

respective successors and assigns, and the Participant and the Participant’s

designated Beneficiaries.

 

16.12                     Spouse’s Interest.  The interest in the benefits hereunder of a spouse of a

Participant who has predeceased the Participant shall automatically pass to the

Participant and shall not be transferable by such spouse in any manner,

including but not limited to such spouse’s will, nor shall such interest pass

under the laws of intestate succession.

 

16.13                     Validity. 

In case any provision of this Plan shall be illegal or invalid for any

reason, said illegality or invalidity shall not affect the remaining parts

hereof, but this Plan shall be construed and enforced as if such illegal or

invalid provision had never been inserted herein.

 

16.14                     Incompetence.  If the Committee determines in its discretion that a benefit under

this Plan is to be paid to a minor, a person declared incompetent or to a

person incapable of handling the disposition of that person’s property, the

Committee may direct payment of such benefit to the guardian, legal

representative or person having the care and custody of such minor, incompetent

or incapable person.  The Committee may

require proof of minority, incompetence, incapacity or guardianship, as it may

deem appropriate prior to distribution of the benefit.  Any payment of a benefit shall be a payment

for the account of the Participant and the Participant’s Beneficiary, as the

case may be, and shall be a complete discharge of any liability under the Plan

for such payment amount.

 

16.15                     Court Order.  The Committee is authorized to make any payments directed by

court order in any action in which the Plan or the Committee has been named as

a party.  In addition, if a court

determines that a spouse or former spouse of a Participant has an interest in

the Participant’s benefits under the Plan in connection with a property settlement

or otherwise, the Committee, in its sole discretion, shall have the right,

notwithstanding any election made

 

27

 

by a Participant, to immediately distribute the spouse’s or former

spouse’s interest in the Participant’s benefits under the Plan to that spouse

or former spouse.

 

16.16                 Distribution in the Event of Taxation.

 

(a)                                  In General.  If, for any reason, all or any portion of a

Participant’s benefits under this Plan becomes taxable to the Participant prior

to receipt, a Participant may petition the Committee before a Change in

Control, or the Administrator of the Trust after a Change in Control, for a

distribution of that portion of his or her benefit that has become

taxable.  Upon the grant of such a

petition, which grant shall not be unreasonably withheld (and, after a Change

in Control, shall be granted), the 

Company shall distribute to the Participant immediately available funds

in an amount equal to the taxable portion of his or her benefit (which amount

shall not exceed a Participant’s unpaid Account Balance under the Plan).  If the petition is granted, the tax

liability distribution shall be made within ninety (90) days of the date when

the Participant’s petition is granted. 

Such a distribution shall affect and reduce the benefits to be paid

under this Plan.

 

(b)                                 Trust.  If the Trust terminates in accordance with

Section 3.6(e) of such Trust and benefits are distributed from such Trust to a

Participant in accordance with that Section, the Participant’s benefits under

this Plan shall be reduced to the extent of such distributions.

 

16.17                     Insurance.  The Company, on its own behalf or on behalf of the trustees

of  the Trust, and, in its sole

discretion, may apply for and procure insurance on the life of the Participant,

in such amounts and in such forms as the trustees may choose.  The Company or the trustees of any of the

Trust, as the case may be, shall be the sole owner and beneficiary of any such

insurance.  The Participant shall have

no interest whatsoever in any such policy or policies, and at the request of

the Company shall submit to medical examinations and supply such information

and execute such documents as may be required by the insurance company or

companies to whom the Company has applied for insurance.

 

16.18                     Legal Fees To Enforce Rights After Change in

Control.  The Company is

aware that upon the occurrence of a Change in Control, the Board or the board

of directors of a Participant’s Employer (which might then be composed of new

members) or a shareholder of the Company or the Participant’s Employer, or of

any successor corporation might then cause or attempt to cause the Company, the

Participant’s Employer or such successor to refuse to comply with its

obligations under the Plan and might cause or attempt to cause the Company or

the Participant’s Employer to institute, or may institute, litigation seeking

to deny Participants the benefits intended under the Plan.  In these circumstances, the purpose of the

Plan could be frustrated.  Accordingly,

if, following a Change in Control, it should appear to any Participant that the

Company, the Participant’s Employer or any successor corporation has failed to

comply with any of its obligations under the Plan or any agreement thereunder

 

28

 

or, if the Company, such Employer or any other person takes any action

to declare the Plan void or unenforceable or institutes any litigation or other

legal action designed to deny, diminish or to recover from any Participant the

benefits intended to be provided, then the Company irrevocably authorizes such

Participant to retain counsel of his or her choice at the expense of the

Company to represent such Participant in connection with the initiation or

defense of any litigation or other legal action, whether by or against the

Company, the Participant’s Employer or any director, officer, shareholder or

other person affiliated with the Company, the Participant’s Employer or any

successor thereto in any jurisdiction.

 

IN WITNESS

WHEREOF, the Company has signed this Third Amended and Restated Plan document

effective as of January 1, 2001.

 

	

   

  	

  Best Buy

  Co., Inc., a Minnesota corporation

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

   /s/

  Richard M. Schulze

  	

   

  	

   

  
	

   

  	

  Richard M.

  Schulze

  	

   

  
	

   

  	

  Chief

  Executive Officer

  	

   

  
					

 

 

29

 

TABLE OF CONTENTS

 

	

  ARTICLE 1.

  	

  Definitions

  	

  1

  
	

   

  	

   

  	

   

  
	

  ARTICLE 2.

  	

  Selection, Enrollment, Eligibility

  	

  7

  
	

  2.1

  	

  Selection by Committee

  	

  7

  
	

  2.2

  	

  Enrollment

  Requirements.

  	

  7

  
	

  2.3

  	

  Eligibility;

  Commencement of Participation

  	

  8

  
	

  2.4

  	

  Termination

  of Participation and/or Deferrals

  	

  8

  
	

   

  	

   

  	

   

  
	

  ARTICLE 3.

  	

  Deferral Commitments/Company

  Matching/Crediting/Taxes

  	

  8

  
	

  3.1

  	

  Minimum Deferral

  	

  8

  
	

  3.2

  	

  Maximum Deferral

  	

  8

  
	

  3.3

  	

  Election to Defer; Effect of Election Form

  and Plan Agreement

  	

  9

  
	

  3.4

  	

  Withholding

  of Annual Deferral Amounts

  	

  9

  
	

  3.5

  	

  Company Contribution Amount

  	

  9

  
	

  3.6

  	

  Company

  Matching Amount

  	

  9

  
	

  3.7

  	

  Investment

  of Trust Assets

  	

  10

  
	

  3.8

  	

  Vesting

  	

  10

  
	

  3.9

  	

  Crediting/Debiting of Account Balances

  	

  11

  
	

  3.10

  	

  FICA and Other Taxes

  	

  13

  
	

  3.11

  	

  Distributions

  	

  13

  
	

   

  	

   

  	

   

  
	

  ARTICLE 4

  	

  In-Service Distribution; Unforeseeable Financial

  Emergencies

  	

  14

  
	

  4.1

  	

  In-Service Distribution

  	

  14

  
	

  4.2

  	

  Other Benefits Take Precedence Over

  In-Service Distribution

  	

  14

  
	

  4.3

  	

  Withdrawal

  Payout/Suspensions for Unforeseeable Financial Emergencies

  	

  14

  
	

   

  	

   

  	

   

  
	

  ARTICLE 5

  	

  Retirement Benefit

  	

  15

  
	

  5.1

  	

  Retirement

  Benefit

  	

  15

  
	

  5.2

  	

  Payment of Retirement Benefit

  	

  15

  
	

  5.3

  	

  Death Prior to Completion of Retirement

  Benefit

  	

  15

  
	

   

  	

   

  	

   

  
	

  ARTICLE 6

  	

  Pre-Retirement Survivor Benefit

  	

  15

  
	

  6.1

  	

  Pre-Retirement Survivor Benefit

  	

  15

  
	

  6.2

  	

  Payment

  of Pre-Retirement Survivor Benefit

  	

  15

  
	

   

  	

   

  	

   

  
	

  ARTICLE 7

  	

  Termination Benefit

  	

  16

  
	

  7.1

  	

  Termination Benefit

  	

  16

  
	

  7.2

  	

  Payment of Termination Benefit

  	

  16

  

 

i

 

	

  ARTICLE 8

  	

  Disability Waiver and Benefit

  	

  17

  
	

  8.1

  	

  Disability

  Waiver

  	

  17

  
	

  8.2

  	

  Continued Eligibility; Disability Benefit

  	

  17

  
	

  8.3

  	

  Short-Term Disability Waiver

  	

  17

  
	

   

  	

   

  	

   

  
	

  ARTICLE 9.

  	

  Beneficiary Designation

  	

  18

  
	

  9.1

  	

  Beneficiary

  	

  18

  
	

  9.2

  	

  Beneficiary Designation; Change; Spousal Consent

  	

  18

  
	

  9.3

  	

  Acknowledgment

  	

  18

  
	

  9.4

  	

  No

  Beneficiary Designation

  	

  18

  
	

  9.5

  	

  Doubt as to Beneficiary

  	

  18

  
	

  9.6

  	

  Discharge of Obligations

  	

  19

  
	

   

  	

   

  	

   

  
	

  ARTICLE 10.

  	

  Leave of Absence

  	

  19

  
	

  10.1

  	

  Paid Leave of Absence

  	

  19

  
	

  10.2

  	

  Unpaid

  Leave of Absence

  	

  19

  
	

   

  	

   

  	

   

  
	

  ARTICLE 11.

  	

  Termination, Amendment or Modification

  	

  19

  
	

  11.1

  	

  Termination

  	

  19

  
	

  11.2

  	

  Amendment

  	

  20

  
	

  11.3

  	

  Election

  Form and Plan Agreement

  	

  20

  
	

  11.4

  	

  Effect

  of Payment

  	

  21

  
	

   

  	

   

  	

   

  
	

  ARTICLE 12.

  	

  Administration

  	

  21

  
	

  12.1

  	

  Committee Duties

  	

  21

  
	

  12.2

  	

  Administration

  Upon Change In Control

  	

  21

  
	

  12.3

  	

  Agents

  	

  22

  
	

  12.4

  	

  Binding Effect of Decisions

  	

  22

  
	

  12.5

  	

  Indemnity of Committee

  	

  22

  
	

  12.6

  	

  Employer Information

  	

  22

  
	

   

  	

   

  	

   

  
	

  ARTICLE 13.

  	

  Other Benefits and Agreements

  	

  22

  
	

  13.1

  	

  Coordination

  with Other Benefits

  	

  22

  
	

   

  	

   

  	

   

  
	

  ARTICLE 14.

  	

  Claims Procedures

  	

  22

  
	

  14.1

  	

  Presentation

  of Claim

  	

  23

  
	

  14.2

  	

  Notification

  of Decision

  	

  23

  
	

  14.3

  	

  Review of a Denied Claim

  	

  23

  
	

  14.4

  	

  Decision on Review

  	

  23

  
	

  14.5

  	

  Subsequent

  Action; Mandatory Arbitration

  	

  24

  

 

ii

 

	

  ARTICLE 15

  	

  Establishment of The Trust

  	

  24

  
	

  15.1

  	

  Establishment

  and Funding of the Trust

  	

  24

  
	

  15.2

  	

  Interrelationship

  of the Plan and the Trust

  	

  25

  
	

  15.3

  	

  Distributions From the Trust

  	

  25

  
	

   

  	

   

  	

   

  
	

  ARTICLE 16.

  	

  Miscellaneous

  	

  25

  
	

  16.1

  	

  Status

  of Plan

  	

  25

  
	

  16.2

  	

  Unsecured General Creditor

  	

  25

  
	

  16.3

  	

  Employer Liability

  	

  25

  
	

  16.4

  	

  Nonassignability

  	

  26

  
	

  16.5

  	

  Not

  a Contract of Employment

  	

  26

  
	

  16.6

  	

  Furnishing

  Information

  	

  26

  
	

  16.7

  	

  Terms

  	

  26

  
	

  16.8

  	

  Captions

  	

  26

  
	

  16.9

  	

  Governing

  Law

  	

  26

  
	

  16.10

  	

  Notice

  	

  26

  
	

  16.11

  	

  Successors

  	

  27

  
	

  16.12

  	

  Spouse’s Interest

  	

  27

  
	

  16.13

  	

  Validity

  	

  27

  
	

  16.14

  	

  Incompetence

  	

  27

  
	

  16.15

  	

  Court

  Order

  	

  27

  
	

  16.16

  	

  Distribution

  in the Event of Taxation

  	

  28

  
	

  16.17

  	

  Insurance

  	

  28

  
	

  16.18

  	

  Legal

  Fees To Enforce Rights After Change in Control

  	

  28

  

 

iii

 

FIRST AMENDMENT TO THE

BEST BUY CO., INC.
THIRD AMENDED AND RESTATED

DEFERRED COMPENSATION PLAN

 

JANUARY 1, 2003

 

This First

Amendment to the Best Buy Co., Inc. Third Amended and Restated Deferred

Compensation Plan (the “Plan”) is adopted by the Board of Directors of Best Buy

Co., Inc. (the “Company”) effective January 1, 2003.

 

A new Section 4.4 of the

Plan is hereby added as follows:

 

4.4                                 Withdrawal

Election. A Participant (or, after a Participant’s death, his or

her Beneficiary) may elect, at any time, to withdraw all of his or her Account

Balance, calculated as if there had occurred a Termination of Employment as of

the day of the election, less a withdrawal penalty equal to ten percent (10%)

of such amount (the net amount shall be referred to as the “Withdrawal

Amount”). This election can be made at any time, before or after Retirement,

Disability, death or Termination of Employment, and whether or not the

Participant (or Beneficiary) is in the process of being paid pursuant to an

installment payment schedule. If made before Retirement, Disability or death, a

Participant’s Withdrawal Amount shall be calculated as if there had occurred a

Termination of Employment as of the day of the election. No partial withdrawals

of the Withdrawal Amount shall be allowed. The Participant (or his or her

Beneficiary) shall make this election by giving the Committee advance written

notice of the election in a form determined from time to time by the Committee.

The Participant (or his or her Beneficiary) shall be paid the Withdrawal Amount

within sixty (60) days of his or her election. Once the Withdrawal Amount is

paid, the Participant’s participation in the Plan shall terminate and the

Participant shall not be eligible to participate in the Plan until the first

Plan Year following the one (1) year anniversary of the payment of the Withdrawal

Amount. The payment of any such Withdrawal Amount shall not be subject to the

Deduction Limitation.

 

 

IN WITNESS WHEREOF, the Company

has signed this First Amendment effective as of January 1, 2003.

 

	

   

  	

   

  	

  Best Buy

  Co., Inc., a Minnesota corporation

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  By:

  	

  /s/ John C.

  Walden

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

  John C.

  Walden

  	

   

  
	

   

  	

   

  	

   

  	

  Exec VP,

  Human CapitalExhibit 10.6 

 

CERTIFICATE

OF RESOLUTIONS

 

                I, Joseph M. Joyce, the

Assistant Secretary of Best Buy Co., Inc., a Minnesota corporation, do hereby

certify that the following resolutions were duly adopted by the Compensation

and Human Resources Committee of the Board of Directors of this corporation at

a meeting held on April 14, 2003, and that said resolutions are still in full

force and effect:

 

                WHEREAS, the

Compensation and Human Resources Committee of the Board of Directors of the

corporation (the “Committee”) is responsible for the review and approval of

incentive plans applicable to the corporation’s employees, including senior

executives; and

 

                WHEREAS,

since April 1999, senior executives of the corporation have received incentive

compensation under the corporation’s EVA Incentive Program; and

 

                WHEREAS,

management recommends that starting in fiscal year 2004, senior executives earn

incentive compensation under a new short-term incentive plan; and

 

                WHEREAS,

the Committee approves management’s recommendation;

 

                RESOLVED,

that effective March 2, 2003, the corporation adopts the Best Buy Short-Term

Incentive Plan (the “Plan”) containing the specifications set forth in Exhibit

A.

 

                FURTHER

RESOLVED, that commencing with fiscal year 2004, senior officers of the

corporation, excluding the Chief Executive Officer and Chief Operating Officer,

will cease to participate in the EVA Incentive Program and will instead be

entitled to participate in the Plan.

 

Dated: 

May 28, 2003.

 

 

 

	

   

  	

  /s/ Joseph M. Joyce

  	

   

  
	

   

  	

  Joseph M. Joyce

  	

   

  
	

   

  	

  Assistant Secretary

  	

   

  

 

 

 

 

EXHIBIT

A

FY04 Short-Term Incentive Plan:

 

                                   

 

 

	

  Funding

  Gate

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Enterprise or 

  Business Unit 

  Performance

  	

   

  	

  X

  	

   

  	

  Team 

  Performance

  	

   

  	

  X

  	

   

  	

  Individual

  Performance

  	

   

  	

  =

  	

   

  	

  Bonus

  Multiplier

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

  [max.2.00]

  

 

 

Features

of Proposed Plan Applicable to Officers (Vice Presidents and Above)

 

·        

3 elements for 3 performance levels — Enterprise (or

Business Unit), Team, and Individual — each weighted equally

·        

The product of the performance “scores” for each

element is multiplied against the others to produce an overall incentive

multiplier (multiplicative vs. additive formula)

·        

Enterprise or Business Unit EVA Performance sets the

initial “funding”

·        

Team and or Individual Performance can increase or

decrease the multiplier

·        

Team Performance is the average score of  2-4 Team-specific financial, operational and

customer metrics

·        

Individual Performance is scored by an overall

performance rating derived from a newly created performance appraisal process

·        

The incentive 

is capped at 2 times the incentive target (% of base salary)

 

Incentive Opportunity

 

	

  EVA Performance Against Plan

  	

   

  	

  Incentive Earned  

  (% of Target)

  
	

  64%

  	

   

  	

  0%

  
	

  70%

  	

   

  	

  17% - 43%

  
	

  75%

  	

   

  	

  28% - 72%

  
	

  80%

  	

   

  	

  39% - 100%

  
	

  85%

  	

   

  	

  39% - 100%

  
	

  90%

  	

   

  	

  39% - 100%

  
	

  95%

  	

   

  	

  45% - 115%

  
	

  97%

  	

   

  	

  50% - 130%

  
	

  100%

  	

   

  	

  56% - 144%

  
	

  102%

  	

   

  	

  56% - 144%

  
	

  105%

  	

   

  	

  62% - 158%

  
	

  110%

  	

   

  	

  67% - 173%

  
	

  115%

  	

   

  	

  73% - 187%

  
	

  120%

  	

   

  	

  78% - 200%

  
	

  125%

  	

   

  	

  78% - 200%

  
	

  130%

  	

   

  	

  78% - 200%

  
	

  136%

  	

   

  	

  78% - 200%

  
	

  140%

  	

   

  	

  78% - 200%

  
	

  145%

  	

   

  	

  78% - 200%

  
	

  150%

  	

   

  	

  78% - 200%

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00052-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00052-of-00352.parquet"}]]