Document:

exv10w5

 

Exhibit 10.5

Dell
Inc. 401(k) Plan

As Amended and Restated

Effective January 1, 2007

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	article and section	 	page
	ARTICLE I DEFINITIONS
	 	 	2	 
	 
	 	 	 	 
	1.1. Account Balance
	 	 	2	 
	1.2. Accounting Date
	 	 	2	 
	1.3. Administrator
	 	 	2	 
	1.4. Agreement
	 	 	2	 
	1.5. Alternate Payee
	 	 	2	 
	1.6. Allocation Date
	 	 	2	 
	1.7. Anniversary Date
	 	 	3	 
	1.8. Annual Additions Limit
	 	 	3	 
	1.9. Annual Compensation
	 	 	3	 
	1.10. Beneficiary
	 	 	5	 
	1.11. Break In Service
	 	 	7	 
	1.12. Catch-up Contributions
	 	 	8	 
	1.13. Code
	 	 	8	 
	1.14. Committee
	 	 	8	 
	1.15. Computation Period
	 	 	8	 
	1.16. Determination Date
	 	 	8	 
	1.17. Effective Date
	 	 	8	 
	1.18. Employee
	 	 	9	 
	1.19. Employment Commencement Date
	 	 	9	 
	1.20. Employer
	 	 	9	 
	1.21. Employer Securities
	 	 	9	 
	1.22. ERISA
	 	 	10	 
	1.23. Five Percent Owner
	 	 	10	 
	1.24. Forfeiture
	 	 	10	 
	1.25. Former Employee
	 	 	10	 
	1.26. Former Participant
	 	 	10	 
	1.27. Highly Compensated Employee
	 	 	11	 
	1.28. Hour Of Service
	 	 	11	 
	1.29. Individual Accounts
	 	 	12	 
	1.30. Limitation Year
	 	 	13	 
	1.31. Named Fiduciary
	 	 	13	 
	1.32. Nonforfeitable
	 	 	14	 
	1.33. Non-Highly Compensated Employee
	 	 	14	 
	1.34. Normal Retirement Age
	 	 	14	 
	1.35. Normal Retirement Date
	 	 	14	 
	1.36. Participant
	 	 	14	 
	1.37. Participating Employer
	 	 	14	 
	1.38. Plan
	 	 	14	 
	1.39. Plan Sponsor
	 	 	14	 
	1.40. Plan Year
	 	 	14	 
	1.41. Predecessor Employer
	 	 	15	 
	1.42. Related Employer
	 	 	15	 
	1.43. Service
	 	 	15	 
	1.44. Severance from Employment
	 	 	16	 
	1.45. Total and Permanent Disability
	 	 	16	 
	1.46. Trust Agreement
	 	 	16	 
	1.47. Trust Fund
	 	 	16	 
	1.48. Trustee
	 	 	16	 

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	article and section	 	page
	1.49. Valuation Date
	 	 	16	 
	 
	 	 	 	 
	ARTICLE II ELIGIBILITY AND PARTICIPATION
	 	 	1	 
	 
	 	 	 	 
	2.1. Eligibility Conditions
	 	 	1	 
	2.2. Participation Election
	 	 	2	 
	2.3. Participant Re-Entry
	 	 	3	 
	 
	 	 	 	 
	ARTICLE III CONTRIBUTIONS
	 	 	1	 
	 
	 	 	 	 
	3.1. Salary Reduction Contributions
	 	 	1	 
	3.2. Safe Harbor Matching Contributions
	 	 	3	 
	3.3. Employer Retirement Savings Contributions
	 	 	5	 
	3.4. Rules Governing Deposits of Contributions
	 	 	5	 
	3.5. Participant Voluntary After Tax Contributions
	 	 	6	 
	 
	 	 	 	 
	ARTICLE IV INVESTMENT OF ACCOUNTS
	 	 	6	 
	 
	 	 	 	 
	4.1. Investment of Accounts by Participants
	 	 	6	 
	4.2. Restriction on Acquisition of Employer Securities
	 	 	6	 
	4.3. Pass-Through Voting of Employer Securities
	 	 	7	 
	4.4. Stock Rights, Stock Splits, and Stock Dividends
	 	 	7	 
	4.5. Participant Rights
	 	 	7	 
	 
	 	 	 	 
	ARTICLE V ALLOCATION OF EMPLOYER CONTRIBUTIONS TO INDIVIDUAL ACCOUNTS
	 	 	1	 
	 
	 	 	 	 
	5.1. Allocation of Safe Harbor Matching Contributions
	 	 	1	 
	5.2. Allocation of Employer Retirement Savings Contributions
	 	 	1	 
	5.3. Suspension of the Allocation Rules Applicable to Employer Retirement Savings
Contributions in order to Satisfy Code Section 410(b) Requirements
	 	 	2	 
	5.4. Limitations on Allocations under Code Section 415
	 	 	3	 
	5.5. Post-Allocation Adjustments to Accounts
	 	 	7	 
	5.6. Employer Contribution Accounts Defined
	 	 	8	 
	 
	 	 	 	 
	ARTICLE VI IN-SERVICE DISTRIBUTIONS
	 	 	9	 
	 
	 	 	 	 
	6.1. Withdrawal from Certain Individual Accounts Upon Attainment of Age 591/2
	 	 	9	 
	6.2. Withdrawal from Certain Accounts Prior to Attainment of Age 591/2 or Account of
Financial Hardship
	 	 	9	 
	6.3. Additional Restrictions on In-Service Withdrawals
	 	 	12	 
	 
	 	 	 	 
	ARTICLE
VII DISTRIBUTIONS AFTER TERMINATION OF EMPLOYMENT
	 	 	13	 
	 
	 	 	 	 
	7.1. Eligibility Due to Retirement, Death or Total and Permanent Disability
	 	 	13	 
	7.2. Eligibility Due to Termination of Employment
	 	 	13	 
	7.3. Payment of Benefits
	 	 	14	 
	 
	 	 	 	 
	ARTICLE
VIII MANDATORY DISTRIBUTION OF BENEFITS
	 	 	16	 
	 
	 	 	 	 
	8.1. General
	 	 	16	 
	8.2. Form of Distribution
	 	 	16	 
	8.3. Limits on Distribution Periods
	 	 	16	 
	8.4. Mandatory Distribution of Benefits During a Participant’s Lifetime
	 	 	17	 
	8.5. Mandatory Distribution of Benefits Upon a Participant’s Death
	 	 	18	 
	8.6. Definitions
	 	 	20	 
	 
	 	 	 	 
	ARTICLE
IX OPTIONAL FORMS OF DISTRIBUTION
	 	 	22	 
	 
	 	 	 	 
	9.1. Forms of Payment of Benefits
	 	 	22	 
	9.2. Direct Rollover Benefit
	 	 	22	 
	9.3. Election to Receive Benefits
	 	 	23	 
	9.4. Minority or Disability
	 	 	24	 
	9.5. Unclaimed Account Procedure
	 	 	25	 
	9.6. Qualified Joint And Survivor Annuity Requirements
	 	 	26	 

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	article and section	 	page
	 
	 	 	 	 
	ARTICLE X PLAN SPONSOR AND PARTICIPATING EMPLOYERS
	 	 	27	 
	 
	 	 	 	 
	10.1. Employer Action
	 	 	27	 
	10.2. Plan Amendment
	 	 	27	 
	10.3. Discontinuance, Termination of Plan
	 	 	28	 
	10.4. Prohibition Against Reversion to Plan Sponsor or a Participating Employer
	 	 	29	 
	10.5. Adoption by Related Employers
	 	 	29	 
	10.6. Authority of Administrator over Participating Employers
	 	 	32	 
	10.7. Deficiency of Earnings or Profits
	 	 	32	 
	 
	 	 	 	 
	ARTICLE
XI THE COMMITTEE
	 	 	34	 
	 
	 	 	 	 
	11.1. Committee Appointment
	 	 	34	 
	11.2. Committee Action and Procedure
	 	 	34	 
	11.3. Committee Powers and Duties
	 	 	34	 
	11.4. Committee Reliance
	 	 	36	 
	11.5. Committee Authority
	 	 	36	 
	11.6. Conflicts in Interest
	 	 	36	 
	11.7. Appointment of Agent and Legal Counsel
	 	 	36	 
	11.8. Appointment of Investment Manager
	 	 	36	 
	11.9. Annual Accounting
	 	 	37	 
	11.10. Funding Policy
	 	 	38	 
	11.11. Indemnification
	 	 	38	 
	 
	 	 	 	 
	ARTICLE
XII ADMINISTRATION
	 	 	39	 
	 
	 	 	 	 
	12.1. Administrator Appointment
	 	 	39	 
	12.2. Summary Plan Description
	 	 	39	 
	12.3. Summary Annual Report
	 	 	39	 
	12.4. Individual Benefit Statements
	 	 	39	 
	12.5. Copies of Additional Documents
	 	 	40	 
	12.6. Documents Available for Examination
	 	 	40	 
	12.7. Notice of Participant Rights under ERISA
	 	 	40	 
	12.8. Notice to Participant on Participant Termination
	 	 	40	 
	12.9. Notice to Trustee on Participant Termination
	 	 	40	 
	12.10. Claim for Benefits
	 	 	41	 
	12.11. Appeal for Decision of Committee
	 	 	41	 
	 
	 	 	 	 
	ARTICLE
XIII INVESTMENT OF TRUST ASSETS
	 	 	43	 
	 
	 	 	 	 
	13.1. Appointment of Trustee
	 	 	43	 
	13.2. Investment of Accounts
	 	 	43	 
	13.3. Investment in Employer Securities
	 	 	44	 
	13.4. Income and Expenses
	 	 	45	 
	13.5. Exclusive Benefit
	 	 	46	 
	13.6. Valuation
	 	 	46	 
	13.7. Investment Policy
	 	 	46	 
	13.8. Valuation of the Trust Fund
	 	 	47	 
	 
	 	 	 	 
	ARTICLE
XIV PARTICIPANT LOANS
	 	 	48	 
	 
	 	 	 	 
	14.1. General Rules Regarding the Participant Loan Program
	 	 	48	 
	 
	 	 	 	 
	ARTICLE
XV ROLLOVERS, MERGERS, DIRECT TRANSFERS
	 	 	50	 
	 
	 	 	 	 
	15.1. Participant Rollover Contributions
	 	 	50	 
	15.2. Merger and Direct Transfer
	 	 	51	 
	15.3. Rules Concerning Certain Rollovers, Mergers and Direct Transfers
	 	 	52	 
	 
	 	 	 	 
	ARTICLE
XVI TOP HEAVY PROVISIONS
	 	 	53	 
	 
	 	 	 	 
	16.1. Top-Heavy Plan Status/Super Top-Heavy Plan Status
	 	 	53	 

iii

 

	 	 	 	 	 
	article and section	 	page
	16.2. Top-Heavy Allocations
	 	 	57	 
	 
	 	 	 	 
	ARTICLE
XVII EXCLUSIVE BENEFIT
	 	 	60	 
	 
	 	 	 	 
	17.1. Exclusive Benefit
	 	 	60	 
	17.2. Denial of Request for Initial Approval
	 	 	60	 
	17.3. Mistake of Fact
	 	 	60	 
	17.4. Disallowance of Deduction
	 	 	60	 
	17.5. Spendthrift Clause
	 	 	61	 
	17.6. Termination
	 	 	62	 
	 
	 	 	 	 
	ARTICLE
XVIII CONSTRUCTION
	 	 	64	 
	 
	 	 	 	 
	18.1. Headings
	 	 	64	 
	18.2. Context
	 	 	64	 
	18.3. Employment not Guaranteed
	 	 	64	 
	18.4. Waiver of Notice
	 	 	64	 
	18.5. State Law
	 	 	64	 
	18.6. Parties Bound
	 	 	64	 
	18.7. Severance
	 	 	65	 
	18.8. Employees In Qualified Military Service
	 	 	65	 
	 
	 	 	 	 
	APPENDIX A EGTRRA PROVISIONS
	 	 	66	 
	 
	 	 	 	 
	APPENDIX B MODEL AMENDMENT FOR COMPLIANCE WITH FINAL TREASURY REGULATIONS UNDER CODE SECTION
401(A)(9)
	 	 	71	 
	 
	 	 	 	 
	APPENDIX C SPECIAL VESTING PROVISIONS FOR REEMPLOYED FORMER PARTICIPANTS WHO ARE NOT CREDITED WITH
AN HOUR OF SERVICE ON JANUARY 1, 2005
	 	 	75	 

iv

 

Dell Inc. 

401(k) Plan

     Dell Inc., (the “Employer”), hereby adopts this 401(k) Plan, effective January 1, 2007.

RECITALS:

     A. The Employer has previously established a 401(k) Plan for the exclusive benefit of its
eligible Employees and their Beneficiaries;

     B. The Employer recognizes the lasting contribution made by its Employees to its successful
operation and wants to reward their contribution by continuing the 401(k) Plan;

     C. The Employer wishes to amend and restate the existing 401(k) Plan;

     D. The Employer has authorized the execution of this Agreement intended to continue the 401(k)
Plan to qualify under Sections 401(a) and 501(a) of the Internal Revenue Code of 1986, as amended
and the regulations promulgated thereunder;

     E. The provisions of this Plan, as amended and restated, shall apply solely to an Employee who
terminates employment with the Employer on or after the restated Effective Date of this Plan; and

     F. If an Employee terminates employment with the Employer prior to the restated Effective
Date, that Employee shall be entitled to benefits under the Plan as the Plan existed on the
Employee’s termination date.

     NOW, THEREFORE, considering the premises and their mutual covenants, the Employer agrees as
follows:

1

 

ARTICLE I

Definitions

The following terms used in this Agreement shall have the meanings set forth in this Article unless
a different meaning is clearly indicated by the context:

	1.1.	 	Account Balance
	 
	 	 	Account Balance means the amount held in a Participant’s Individual Account(s) as of any
date derived from both Employer Contributions and Employee Contributions, if any.
	 
	1.2.	 	Accounting Date
	 
	 	 	Accounting Date means the Anniversary Date of the Plan Year or such other date as may be
designated by the Employer, but only if the Employer has specifically requested the Trustee
to prepare an accounting on or before such date.
	 
	1.3.	 	Administrator
	 
	 	 	Administrator means the Employer unless the Employer designates another person to hold the
position of Administrator by written Employer action. In addition to its other duties, the
Employer has full responsibility for compliance with the reporting and disclosure rules
under ERISA pertaining to this Agreement.
	 
	1.4.	 	Agreement
	 
	 	 	Agreement means this Plan Agreement and all amendments or addenda to this Agreement.
	 
	1.5.	 	Alternate Payee
	 
	 	 	Alternate Payee means any spouse, former spouse, child, or other dependent of a Participant
who is recognized by a domestic relations order as having a right to receive all, or a
portion of, the benefits payable under the Plan with respect to such Participant.
	 
	1.6.	 	Allocation Date
	 
	 	 	Allocation Date means with respect to Employer Contributions the Anniversary Date of each
Plan Year. The Allocation Date for Participant Salary Reduction Contributions is the last
day of each payroll period. Notwithstanding the foregoing, the Employer may, at its
election, concurrently allocate its Safe Harbor Matching Contributions with Participant
Salary Reduction Contributions on the Allocation Date of each payroll period, provided that
the total amount contributed to the Plan on behalf of each Participant eligible to share in
the Safe Harbor Matching Contribution for a Plan Year conforms to the requirements of Code
Section 401(k)(12).

2

 

	1.7.	 	Anniversary Date
	 
	 	 	Anniversary Date means the last day of each Plan Year. The Anniversary Date is an Allocation
Date.
	 
	1.8.	 	Annual Additions Limit
	 
	 	 	Annual Additions Limit means the annual contribution limit described in Section 5.4.
	 
	1.9.	 	Annual Compensation

	 	(a)	 	For the Plan Year ending December 31, 2007, Annual Compensation, pursuant to
the safe harbor definition of Treas. Reg. § 1.415-2(d)(11), means wages as defined in
Code Section 3401(a) and all other payments of compensation to an Employee in the
course of the Employer’s or Participating Employer’s trade or business for which the
Employer or Participating Employer is required to furnish the Employee a written
statement under Code Section 6041(d) and 6051(a)(3). Compensation must be determined
without regard to any rules under Code Section 3401(a) that limit the remuneration
included in wages based on the nature or location of the employment or the services
performed such as the exception for agricultural labor in Code Section 3401(a)(2).
“Annual Compensation” shall not include the following:

	 	(i)	 	contributions by the Employer to any deferred compensation plan
(to the extent the contributions are not included in the Participant’s gross
income for the taxable year in which contributed) or Simplified Employees
Pension defined in Code Section 408(k) (to the extent the contributions are
excludable from the Participant’s gross income);
	 
	 	(ii)	 	distributions from any plan of deferred compensation regardless
of whether such amounts are includable in the gross income of the Employee when
distributed;
	 
	 	(iii)	 	amounts realized from the exercise of any nonqualified stock
option, or, when restricted stock becomes freely transferable or is no longer
subject to a substantial risk of forfeiture;
	 
	 	(iv)	 	amounts realized from the sale, exchange, or other disposition
of stock acquired under a qualified stock option described in Part II,
Subchapter D, Chapter I of the Code;
	 
	 	(v)	 	premiums paid by the Employer for group term life insurance (to
the extent the premiums are not includable in the Participant’s gross income),
contributions by the Employer to an annuity under Code Section 403(b) (to the
extent not includable in the Participant’s gross income), and any other amounts
received under any Employer sponsored fringe benefit plan (to the extent no
includable in the Participant’s gross income);

3

 

	 	(vi)	 	Reimbursements and other expense allowances;
	 
	 	(vii)	 	Cash and noncash fringe benefits;
	 
	 	(viii)	 	Moving expenses;
	 
	 	(ix)	 	Welfare benefits;
	 
	 	(x)	 	Noncash awards such as gifts and trips;
	 
	 	(xi)	 	Earned income (as defined in Code Section 911(d)(2)) from the
Employer that does not constitute United States source income (as defined in
Code Section 861(a)(3));
	 
	 	(xii)	 	For any individual who is a nonresident alien and who has
received earned income (including income defined in Code Section 911(d)(2))
from the Employer that constitutes United States source income (as defined in
Code Section 861(a)(3), all income received from the Employer;
	 
	 	(xiii)	 	Cash retention awards made under the Company’s Long Term Incentive Program;
and

Notwithstanding the foregoing, Annual Compensation includes contributions that are
made by the Employer on behalf of its Employees that are not includable in gross
income under Code Section 125 relating to a cafeteria plan; Code Section 402(g)
relating to a “401(k)” plan; and Code Section 132(f)(4) relating to a qualified
transportation fringe benefit.

For Plan Years commencing on or after January 1, 2008, Annual Compensation means the
sum of:

	 	(i)	 	Base salary;
	 
	 	(ii)	 	Hourly pay;
	 
	 	(iii)	 	Overtime pay and shift differential pay
	 
	 	(iv)	 	Commissions and similar incentive compensation payments;
	 
	 	(v)	 	Incentive Cash Plan payments;
	 
	 	(vi)	 	Incentive Bonus Plan payments;
	 
	 	(vii)	 	cash patent awards;
	 
	 	(viii)	 	on the spot awards; and
	 
	 	(ix)	 	friends for hire payments which are paid in cash.

4

 

	 	 	 	Notwithstanding the foregoing, Annual Compensation includes contributions that are
made by the Employer on behalf of its Employees that are not includable in gross
income under Code Section 125 relating to a cafeteria plan; Code Section 402(g)
relating to a “401(k)” plan; and Code Section 132(f)(4) relating to a qualified
transportation fringe benefit. For purposes of the foregoing, these amounts are
payable as part of a Participant’s base salary and/or hourly pay.
	 
	 	(b)	 	In addition to other applicable limitations set forth in the Plan, and
notwithstanding any other provision of the Plan to the contrary, the Annual
Compensation of each Employee taken into account under the Plan shall not exceed
$200,000, pursuant to Appendix A.1.3, as adjusted by the Commissioner for increases in
the cost of living in accordance with Code Section 401(a)(17)(B). The cost-of-living
adjustment in effect for a calendar year applies to any period, not exceeding twelve
(12) months, over which compensation is determined (“determination period”) beginning
in such calendar year. If a determination period consists of fewer than twelve (12)
months, the Annual Compensation limit will be multiplied by a fraction, the numerator
of which is the number of months in the determination period, and the denominator of
which is twelve (12).
	 
	 	(c)	 	For purposes of determining whether the Plan discriminates in favor of Highly
Compensated Employees, Annual Compensation means Annual Compensation defined in this
Section, except any exclusions from Annual Compensation other than the exclusions
described in clauses (a)(i), (ii), (iii), (iv), and (v), if applicable, do not apply.

	1.10.	 	Beneficiary

	 	(a)	 	Beneficiary means any person or fiduciary designated by a Participant or Former
Participant who is or may become entitled to receive benefits under Article VII
following the death of the Participant or Former Participant. A Beneficiary who becomes
entitled to a benefit under the Plan shall remain a Beneficiary under the Plan until
the Trustee has fully distributed the benefits to the Beneficiary. A Beneficiary’s
right to information or data concerning the Plan, and the respective duties of the
Administrator, the Committee and the Trustee to provide to the Beneficiary information
or data concerning the Plan, shall not arise until the Beneficiary first becomes
entitled to receive a benefit under the Plan. For purposes of determining whether the
Plan is a Top-Heavy Plan, a Beneficiary of a deceased Participant shall be considered a
Key Employee or a Non-Key Employee in accordance with the applicable Treasury
Regulations.
	 
	 	(b)	 	Each Participant and Former Participant may from time to time designate one or
more Beneficiaries to receive benefits under this Plan on the death of the Participant
or Former Participant. The selection shall be made in writing on a form provided by the
Committee and shall be filed with the Committee. Subject to Subsection (c) below, the
last selection filed with the Committee shall control.

5

 

	 	 	 	A married Participant’s Beneficiary designation is not valid unless the
Participant’s spouse consents, in writing, to the Beneficiary designation. The
spouse’s consent must acknowledge the effect of that consent and a notary public or
the Administrator (or Plan representative) must witness that consent. The spousal
consent requirements of this Subsection do not apply if:

	 	(i)	 	the Participant and spouse are not married throughout the one
year period ending on the date of the Participant’s death;
	 
	 	(ii)	 	the Participant’s spouse is the Participant’s sole primary
beneficiary;
	 
	 	(iii)	 	the Administrator is not able to locate the Participant’s
spouse;
	 
	 	(iv)	 	the Participant is legally separated or has been abandoned
(within the meaning of State law) and the Participant has a court order to that
effect; or
	 
	 	(v)	 	other circumstances exist under which the Secretary of the
Treasury will excuse the consent requirement.

	 	 	 	If the Participant’s spouse is legally incompetent to give consent, the spouse’s
legal guardian (even if the guardian is the Participant) may give consent.
	 
	 	(c)	 	Unless elected in accordance with Subsection (d) below, a Participant’s
Beneficiary shall be his spouse. Notwithstanding the foregoing, the Participant may
designate a Beneficiary other than the spouse if

(i) the Participant has no spouse; or

(ii) the spouse cannot be located.

	 	(d)	 	In the case of a married Participant or Former Participant, the designation of
a non-spouse as Beneficiary shall be valid only if:

(i) the spouse consents in writing to the designation;

      (ii) the designation specifies the beneficiary and the method of
payment of benefits and may not be changed without spousal consent (or the
spouse’s consent expressly permits designations by the Participant without any
requirement of further spousal consent); and

      (iii) the spouse’s consent acknowledges the effect of the election
and the written consent is witnessed by a Plan representative or by a Notary
Public.

	 	(e)	 	If a Participant dies without a spouse or alternative Beneficiary surviving; if
the alternative Beneficiary (other than the spouse) does not survive until final
distribution of the Participant’s balance; if a Participant who is not married dies

6

 

	 	 	 	without having designated a Beneficiary and/or alternative Beneficiary; or if a
Participant who is not married dies after having made and revoked a designation but
prior to having made a subsequent designation, then the amount remaining in the
deceased Participant’s Individual Account shall be payable to (i) the Participant’s
executor or administrator, or (ii) his heirs at law (as determined by reference to
Texas law) if there is no administration of such Participant’s estate.

	 	 	Payment made pursuant to the power conferred on the Committee in this Section shall operate
as a complete discharge of all obligations under the Plan concerning the share of a deceased
Participant and shall not be subject to review by anyone but shall be final, binding and
conclusive on all persons for all purposes.
	 
	1.11.	 	Break In Service

	 	(a)	 	A Break in Service means a Period of Severance of at least 365 days. A Period
of Severance means a continuous period of time during which an Employee is not employed
by the Employer. Such period shall begin on the date the Employee retires, quits, is
discharged, or dies, or, if earlier, the twelve (12) month anniversary of the date on
which the Employee was otherwise first absent from work.
	 
	 	(b)	 	An Employee shall receive credit for purposes of determining whether he has
incurred a Break in Service under Subsection (a) above for the aggregate of all time
period(s) commencing with such Employee’s Employment Commencement Date (including such
day following reemployment) and ending on the date a Break in Service begins. An
Employee shall also receive credit for any Period of Severance of less than 365 days.
Fractional periods of a year shall be expressed in terms of days.
	 
	 	(c)	 	In the case of an Employee who is absent from work for “authorized reasons” or
for “maternity or paternity reasons,” the 365-day period beginning on the first
anniversary of the first day of such absence shall not be a Break in Service.

	 	(i)	 	For purposes of this Subsection (c), absence from work for
“authorized reasons” means an unpaid temporary cessation from active employment
with the Employer pursuant to an established nondiscriminatory policy, whether
occasioned by illness, military service or any other reason.
	 
	 	(ii)	 	For purposes of this Subsection (c), absence from work for
“maternity or paternity reasons” means an absence from work for any period
because of the pregnancy of the individual, the birth of a child of the
individual, the placement of a child with the individual relating to the
adoption of such child by such individual, or for the purpose of caring for
such child for a period beginning immediately following such birth or
placement. In the case of absence from work for “maternity or paternity
reasons,” the period between the first and second anniversaries of the first
date of absence due

7

 

	 	 	 	to said leave shall be treated as neither a Period of Service nor a Period
of Severance.
	 
	 	(iii)	 	For purposes of this Subsection (c), a Period of Service means
each period of an individual’s Service, commencing on his Employment
Commencement Date or Reemployment Commencement Date, if applicable, and ending
on the date of termination of employment. A Period of Service shall include any
period required to be credited under this Section 1.11, Section 1.28, Section
1.43, Appendix C.1.1 and by federal law, but only under the conditions and to
the extent so required by federal law.

	1.12.	 	Catch-up Contributions
	 
	 	 	Catch-up Contributions are those Salary Reduction Contributions which: (1) exceed an
applicable limit; (2) are treated by the Plan as Catch-up Contributions; and (3) do not
exceed the annual catch-up limit effective for the calendar year ($5,000 for 2006). An
“applicable limit” is a statutory limit described in Code Sections 402(g) or 415, a Plan
limit described in Section 3.1(a) or, with respect to Highly Compensated Employees, the
limit resulting from the application of the nondiscrimination requirements described in Code
Section 401(k)(3).
	 
	1.13.	 	Code
	 
	 	 	Code means the Internal Revenue Code of 1986, as amended from time to time. A reference to a
Code Section in this Agreement means the provisions or successor provisions of the
particular Code Section, as amended or replaced from time to time.
	 
	1.14.	 	Committee
	 
	 	 	Committee means the Plan Committee as from time to time constituted pursuant to Article XI.
	 
	1.15.	 	Computation Period
	 
	 	 	Computation Period means the period of time used to calculate a Participant’s Years of
Vesting Service under the terms of the Plan in effect prior to January 1, 2005. For purposes
of determining a Participant’s Years of Vesting Service under Appendix C.1.1, the
Computation Period shall be 365 days of credited Service, measured from the Participant’s
Employment Commencement Date, which shall equal one (1) Year of Vesting Service. Such
periods of credited Service need not be consecutive.
	 
	1.16.	 	Determination Date
	 
	 	 	Determination Date means (i) the last day of the preceding Plan Year or (ii) in the case of
the first Plan Year, the last day of the first Plan Year.
	 
	1.17.	 	Effective Date

8

 

	 	 	The original Effective Date of this Plan is June 1, 1989. Except as otherwise noted herein,
the Effective Date of this Plan as restated is January 1, 2007.
	 
	1.18.	 	Employee

	 	(a)	 	Employee means any individual currently employed by the Employer maintaining
the Plan or of any other Employer required to be aggregated with the Employer under
Code Sections 414(b), (c), (m) or (o) and any Leased Employee treated as an Employee of
the Employer.
	 
	 	(b)	 	The Plan treats any Leased Employee as an Employee of the Employer. A Leased
Employee is an individual, who otherwise is not an Employee of the Employer, who,
pursuant to a leasing agreement between the Employer and a Participating Employer, has
performed services for the Participating Employer (or for the Participating Employer
and any persons related to the Participating Employer within the meaning of Code
Section 144(a)(3)) on a substantially full time basis for at least one (1) year (unless
such individual is otherwise earlier considered a Leased Employee treated as an
Employee of the Employer pursuant to the eligibility conditions elected by a
Participating Employer in the Participation Agreement) and such services are performed
under the primary direction or control of the Participating Employer. If a Leased
Employee is treated as an Employee because of this Section, Annual Compensation
includes compensation from the Employer which is attributable to services performed for
the Participating Employer.
	 
	 	(c)	 	Notwithstanding the preceding, the term “Employee” shall not include any
individual who is designated as an “Independent Contractor” by the Employer, even if
the status of such individual subsequently is changed from that of an Independent
Contractor to that of an Employee as a result of administrative or legal proceedings.

	1.19.	 	Employment Commencement Date
	 
	 	 	Employment Commencement Date means the date on which an Employee is
first entitled to credit for an Hour of Service.
	 
	1.20.	 	Employer
	 
	 	 	Employer means the Plan Sponsor, and any other Participating Employer under this Agreement.
	 
	1.21.	 	Employer Securities

	 	(a)	 	Employer Securities means any common or preferred stock issued by the Employer
or by a corporation which is a member of the same controlled group of corporations.

	 	(b)	 	Qualifying Employer Securities means:

9

 

	 	(i)	 	Common stock issued by the Employer (or by a corporation which
is a member of the same controlled group) which is readily tradeable on an
established securities market; or
	 
	 	(ii)	 	If there is no common stock which meets the requirements of (i)
above, then common stock issued by the Employer (or by a corporation which is a
member of the same controlled group) having a combination of voting power and
dividend rights equal to or in excess of:
	 
	 	(iii)	 	that class of common stock of the Employer (or any other such
corporation) having the greatest voting power; and
	 
	 	(iv)	 	that class of common stock of the Employer (or of any other
such corporation) having the greatest dividend rights; or
	 
	 	(v)	 	Noncallable preferred stock, if such stock is convertible at
any time into stock which meets the requirements of (i) or (ii) above
(whichever is applicable) and if such conversion is at a conversion price that
is reasonable. A preferred stock will be considered noncallable if after the
call there will be a reasonable opportunity for a conversion which meets the
requirements of the preceding sentence in accordance with the applicable
Treasury Regulations.

	1.22.	 	ERISA
	 
	 	 	ERISA means the Employee Retirement Income Security Act of 1974, as amended.
	 
	1.23.	 	Five Percent Owner
	 
	 	 	A “Five Percent Owner” is a Participant who owns, or is considered as owning within the
meaning of Code Section 318, more than five percent (5%) of the outstanding stock of the
Employer or stock possessing more than five percent (5%) of the total combined voting power
of all stock of the Employer; or in the case of an unincorporated business, any person who
owns more than five percent (5%) of the capital or profits interest in the Employer.

	1.24.	 	Forfeiture
	 
	 	 	Forfeiture means the loss, by a Participant or Beneficiary of that part of the benefit which
the Participant or Beneficiary otherwise would have received under the Plan at any time
prior to the termination of the Plan or the complete discontinuance of benefits under the
Plan, arising from the Participant’s termination of employment.
	 
	1.25.	 	Former Employee
	 
	 	 	Former Employee means any individual who is no longer employed by the Employer.
	 
	1.26.	 	Former Participant 
	 

10

 

	 	 	Former Participant means any individual who has been a Participant in the Plan, but who is
either no longer employed by the Employer or is otherwise no longer eligible to participate
and has not yet received the entire benefit to which the individual is entitled under the
Plan or incurred five (5) consecutive one year Breaks in Service.
	 
	1.27.	 	Highly Compensated Employee
	 
	 	 	Highly Compensated Employee means any Participant or Former Participant who is a Highly
Compensated Employee, as defined in Code Section 414(q). Generally, any Participant or
Former Participant is considered a Highly Compensated Employee if:

	 	(a)	 	during the Plan Year (the “Determination Year”) or during the twelve month
period immediately preceding the Determination Year (the “Look Back Year”), the
Participant or Former Participant was a Five Percent Owner at any time; or
	 
	 	(b)	 	for the Look Back Year the Participant or Former Participant had Annual
Compensation from the Employer in excess of $80,000, as adjusted by the Secretary of
the Treasury for the relevant year $100,000 for the 2006 Look Back Year).
	 
	 	 	 	For purposes of the preceding sentence, (i) all employers aggregated with the
Employer under Code Section 414(b), (c), (m), or (o) shall be treated as a single
employer and (ii) a former Employee who had a separation year (generally, the
Determination Year such Employee terminates employment) prior to the Determination
Year and who was an active Highly Compensated Employee for either such termination
year or any Determination Year ending on or after such Employee’s fifty-fifth
birthday shall be deemed to be a Highly Compensated Employee. To the extent that the
provisions of this paragraph are inconsistent or conflict with the definition of a
“highly compensated employee” set forth in Code Section 414(q) and the Treasury
Regulations thereunder, the relevant terms and provisions of Code Section 414(q) and
the Treasury Regulations thereunder shall govern and control.
	 
	 	(c)	 	For purposes of this Section, “Annual Compensation” means Annual Compensation
as defined in Section 1.9(c).

	1.28.	 	Hour Of Service
	 
	 	 	For purposes of crediting Hours of Service, the Plan will be treated as a single plan and
Service with any Related Employer of the Employer and with any Participating Employer and
its Related Employers shall be considered Service for the Employer.

	 	(a)	 	Any Employee or Participant who is compensated on an hourly-rated basis shall
be credited with an Hour of Service for:

	 	(i)	 	each hour for which the Employee or Participant is either
directly or indirectly paid or entitled to payment by the Employer for the
performance of duties or for reasons other than for the performance of duties
due to

11

 

	 	 	 	vacation, holiday, illness, incapacity (including disability), layoff, jury
duty, military duty or leave of absence, whether or not the employment
relationship was terminated; and
	 
	 	(ii)	 	each hour for which back pay has been awarded to the Employee
or Participant or agreed to by the Employer, irrespective of mitigation of
damages.

	 	(b)	 	Any Employee or Participant who is compensated on a basis other than an
hourly-rated basis and who, if hourly-rated, would be credited with one (1) Hour of
Service pursuant to the preceding sentence, shall be credited with the number of Hours
of Service as follows:

	 	(i)	 	ten (10) hours of service per day, if compensated on a daily basis;
	 
	 	(ii)	 	forty-five (45) hours of service per week, if compensated on a
weekly basis;
	 
	 	(iii)	 	ninety (90) hours of service per bi-weekly period, if
compensated on a bi-weekly basis;
	 
	 	(iv)	 	ninety-five (95) hours of service per semi-monthly period, if
compensated on a semi-monthly basis; or
	 
	 	(v)	 	one hundred ninety (190) hours of service per month, if
compensated on a monthly basis.

	 	(c)	 	The number of Hours of Service which shall be credited to an Employee or
Participant for being entitled to payment for reasons other than for the performance of
duties shall be determined under Sections 2530.200b-2(b) and (c) of the Department of
Labor Regulations which are incorporated herein by this reference. The method for
crediting Hours of Service under Subsection (b) above for each Participant shall be the
same method used for crediting Hours of Service for which the Participant received
compensation. Notwithstanding the foregoing, not more than five hundred one (501) Hours
of Service shall be credited to any Employee or Participant during any Computation
Period for any single, continuous period during which the Employee or Participant
performs no duties.
	 
	 	(d)	 	An Hour of Service performed for any other entity that is a Related Employer
with respect to the Employer shall be considered an Hour of Service performed for the
Employer.

	1.29.	 	Individual Accounts
	 
	 	 	Individual Accounts means accounts or records maintained by the Committee or its agent
indicating the monetary value of the total interest in the Trust Fund of each Participant,
each Former Participant, and each Beneficiary. The types of Individual Accounts under this
Plan are:

12

 

	 	(a)	 	Employer Contribution Accounts. The types of Employer Contribution
Accounts maintained by this Plan are:

	 	(i)	 	Safe Harbor Matching Contribution Accounts holding
Employer Matching Contributions made to the Plan for Plan Years beginning on
and after January 1, 2005, for the benefit of an Employee because of a Salary
Reduction Contribution made with respect to the Employee or a contribution by
the Employee that satisfy the requirements of Code Section 401(k)(12). Safe
Harbor Matching Contributions, if any, shall be maintained separately for the
benefit of the Participant so that all applicable distribution restrictions may
be strictly observed. Safe Harbor Matching Contributions shall be 100% vested
at all times.
	 
	 	(ii)	 	Matching Contribution Accounts holding discretionary
Employer Matching Contributions made to the Plan for Plan Years beginning prior
to January 1, 2005, for the benefit of an Employee because of a Salary
Reduction Contribution made with respect to the Employee or a contribution by
the Employee.
	 
	 	(iii)	 	Retirement Savings Contribution Accounts holding the
Employer’s discretionary Retirement Savings Contributions made to the Plan for
the benefit of an Employee, which the Employee could not have elected to
receive in the form of cash or other taxable benefit, if any.

	 	(b)	 	Participant Contribution Accounts. The types of Participant
Contribution Accounts maintained by this Plan are:

	 	(i)	 	Rollover Accounts holding the Participant’s qualified
rollover to the Plan pursuant to Article XVI.
	 
	 	(ii)	 	Salary Reduction Contribution Accounts, holding the
amount contributed by the Employer as the result of an election by a
Participant to have that amount contributed to the Plan rather than paid as
cash or other taxable benefit plus any Failsafe Contributions that may have
been made by the Employer to the Plan for Plan Years beginning prior to January
1, 2005. A Failsafe Contribution is a 100% vested Matching Contribution or a
Retirement Savings Contribution that the Employer contributed to the Plan on
behalf of certain Nonhighly Compensated Employees to satisfy nondiscrimination
requirements under Code Section 401(k) or 401(m).

Participant Contribution Accounts shall be 100% vested at all times.

	1.30.	 	Limitation Year
	 
	 	 	Limitation Year means the Plan Year, as such term is defined in this Article I.
	 
	1.31.	 	Named Fiduciary

13

 

	 
	 	 	Named Fiduciary means one or more fiduciaries named in this Agreement who jointly and
severally shall have authority to control or manage the operation and administration of the
Plan. The Committee shall be the Named Fiduciary unless the Employer designates another
person by written Plan Sponsor action.
	 
	1.32.	 	Nonforfeitable
	 
	 	 	Nonforfeitable means a vested interest attained by a Participant or Beneficiary in that part
of the Participant’s benefit under the Plan arising from the Participant’s Service, which
claim is unconditional and legally enforceable against the Plan.
	 
	1.33.	 	Non-Highly Compensated Employee
	 
	 	 	Non-Highly Compensated Employee means an Employee, Former Employee or Beneficiary who is not
a Highly Compensated Employee.
	 
	1.34.	 	Normal Retirement Age
	 
	 	 	Normal Retirement Age means, for each Participant, the date the Participant attains age 65.
	 
	1.35.	 	Normal Retirement Date
	 
	 	 	Normal Retirement Date means, for each Participant, the date the Participant attains Normal
Retirement Age.
	 
	1.36.	 	Participant
	 
	 	 	Participant means an Employee of the Employer who has met the eligibility requirements of
this Plan and who has been enrolled as a Participant in this Plan.
	 
	1.37.	 	Participating Employer
	 
	 	 	Participating Employer means any entity that is related to the Employer or that is a
recipient of the services of a Leased Employees pursuant to a written agreement with the
Employer and who elects to adopt this Plan pursuant to Article X.
	 
	1.38.	 	Plan
	 
	 	 	Plan means the qualified retirement plan embodied in this Agreement, as amended from time to
time, designated as the Dell Inc. 401(k) Plan.
	 
	1.39.	 	Plan Sponsor
	 
	 	 	Plan Sponsor means Dell Inc., and any successor corporation or business organization that
may be substituted for the Plan Sponsor under this Agreement.
	 
	1.40.	 	Plan Year

14

 

	 
	 	 	Plan Year means the twelve (12) consecutive month period from January 1 of each year to the
next following December 31.
	 
	1.41.	 	Predecessor Employer
	 
	 	 	Predecessor Employer means a business organization, all or a portion of whose assets and
business has been acquired by the Employer or a Participating Employer, whether by merger,
stock purchase or acquisition of the assets and business of the business organization.
	 
	1.42.	 	Related Employer
	 
	 	 	A related group of employers is a controlled group of corporations (defined in Code Section
414(b)), trades or businesses (whether or not incorporated) which are under common control
(defined in Code Section 414(c)) or an affiliated service group (defined in Code Section
414(m) or in Code Section 414(o)). If the Employer is a member of a related group, the term
“Employer” includes the related group members for purposes of crediting Hours of Service,
determining Years of Service and Breaks in Service under Articles II and VII, applying the
minimum coverage test of Code Section 410(b), applying the limitations on allocations in
Article V, applying the top-heavy rules and the minimum allocation requirements of Article
V, the definitions of Employee, Highly Compensated Employee, Annual Compensation and Leased
Employee, and for any other purpose required by the applicable Code Section or by a Plan
provision. However, an Employer may contribute to the Plan only by being a signatory to a
Participation Agreement to the Plan. If one or more of the Employer’s related group members
become Participating Employers by executing a Participation Agreement to the Plan, the term
“Employer” includes the participating related group members for all purposes of the Plan,
and Administrator means the Employer that is the signatory to the Plan. For Plan allocation
purposes, Annual Compensation does not include Annual Compensation received from a Related
Employer that is not participating in this Plan.
	 
	1.43.	 	Service

	 	(a)	 	Service means any period of time the Employee is in the employ of the Employer.
Service in all cases includes periods during which the Employee is on an “authorized
leave of absence” or a “maternity or paternity leave of absence” relating to a Break in
Service. Leaves of absence also shall include periods of absence in connection with
military service during which the Employee’s re-employment rights are legally
protected. Except for absence by reason of military service, leaves of absence shall be
for a maximum period of two (2) years, unless the Employer has adopted a policy that
specifies a lesser period. Leaves of absence shall be granted on a uniform and
nondiscriminatory basis.
	 
	 	 	 	Notwithstanding the foregoing, an Employee who is absent from Service due to an
authorized leave of absence described in the preceding paragraph and who does not
recommence Service at the end of such authorized leave shall not receive credit for
Service for such leave if a Break in Service would otherwise have

15

 

	 	 	 	occurred and shall be deemed to have terminated employment with the Employer on the
first date on which the authorized leave of absence commenced.
	 
	 	(b)	 	If the Employer maintains the plan of a Predecessor Employer, Service shall
include service for the Predecessor Employer. To the extent it may be required under
applicable Treasury Regulations under Code Section 414, Service shall include all
service for any Predecessor Employer.

	1.44.	 	Severance from Employment
	 
	 	 	Severance from Employment means an Employee no longer is an Employee of the Employer or any
Related Employer and the Employee’s new employer does not maintain the plan of the Employer
or Related Employer. The terms Severance from Employment and “termination of employment”
when used herein shall have the same meaning.
	 
	1.45.	 	Total and Permanent Disability
	 
	 	 	Total and Permanent Disability means the physical or mental incapacity of a Participant
which, in the opinion of a physician approved by the Committee (unless such evaluation is
waived by the Committee as unnecessary), will render the Participant permanently incapable
of performing his job for physical or mental reasons and such Participant has incurred a
“disability” within the meaning of Code Section 401(k)(2)(B)(i)(I).
	 
	1.46.	 	Trust Agreement
	 
	 	 	Trust Agreement means the agreement, entered into by the Employer and the Trustee, or any
successor Trustee, establishing the Trust and specifying the duties of the Trustee.
	 
	1.47.	 	Trust Fund
	 
	 	 	Trust Fund means all assets of any kind and nature from time to time held by the Trustee or
its agent under the Trust Agreement without distinction between income and principal. This
Plan contemplates a single Trust for all Employers participating under the Dell Inc. 401(k)
Plan. However, the Trustee will maintain separate records of account to reflect properly
each Participant’s Account Balance from each Participating Employer, if any.
	 
	1.48.	 	Trustee
	 
	 	 	Trustee means at any particular time, the then acting Trustee or, collectively, if there is
more than one, the then acting Trustees of the Trust.
	 
	1.49.	 	Valuation Date
	 
	 	 	Valuation Date means any day the NYSE is open.

* * * *

16

 

ARTICLE II

Eligibility And Participation

2.1. Eligibility Conditions

	 	(a)	 	Each Employee shall be eligible to participate in this Plan on his Employment
Commencement Date.
	 
	 	(b)	 	Notwithstanding the preceding sentence, an Employee who satisfied the
eligibility conditions of Section 2.1(a) prior to the Effective Date of this Plan shall
be eligible to participate in this Plan on the Effective Date.
	 
	 	(c)	 	The following Employees and individuals are not eligible to participate in the
Plan:

	 	(i)	 	All Employees of Alienware Corporation or for periods prior to January 1, 2008,
Dell Financial Service, L.P.;
	 
	 	(ii)	 	Each Employee who is a member of a collective bargaining unit
shall not be eligible to participate in this Plan unless the collective
bargaining agreement provides otherwise. An Employee is a member of a
collective bargaining unit if the Employee is included in a unit of Employees
covered by an agreement which the Secretary of Labor finds to be a collective
bargaining agreement between Employee representatives and one or more employers
if there is evidence that retirement benefits were the subject of good faith
bargaining between the Employee representatives and the employer or employers.
The term “Employee representatives” does not include an organization of which
more than one-half (1/2) the members are owners, officers or executives of the
Employer;
	 
	 	(iii)	 	A nonresident alien who receives no earned income (as defined
in Code Section 911(d)(2)) from the Employer that constitutes United States
source income (as defined in Code Section 861(a)(3)), unless otherwise
specifically covered by a Participating Employer pursuant to the provisions of
Article X;
	 
	 	(iv)	 	An individual classified as a Leased Employee;
	 
	 	(v)	 	Any individual that is not included on the payroll records of
the Employer or a Related Employer as a common law employee or is otherwise
classified or treated by an Employer as an independent contractor or other
non-common law employee, and it is expressly intended that such individuals are
to be excluded from Plan participation even if a court of administrative agency
determines that such individuals are common law employees;

1

 

	 	(vi)	 	Any individual on the payroll of Spherion Corporation;
	 
	 	(vii)	 	Any individual who is classified as a college or high school
intern by the Employer (including, but not limited to, individuals with job
codes ADIN001, ADIN002, ADIN003), other than any individual who has submitted
an election to make Salary Reduction Contributions to the Plan on or before
July 31, 2003;
	 
	 	(viii)	 	Any individual who is classified as a security guard by the Employer and who
also is employed by a law enforcement agency or a security firm (other than any
individual who has submitted an election to make Salary Reduction Contributions
to the Plan on or before July 31, 2003); or
	 
	 	(ix)	 	Any individual who is not on either the Company’s or a
subsidiary’s U.S. payroll, as documented in the Employer’s HR Direct personnel
system.
	 
	 	 	 	Any individual designated by the Company as having a “permanent transfer” to
a business location outside of the United States shall not be considered to
be on the Company’s US payroll for purposes of this Plan. Such individuals
qualifying under this group are not eligible to participate in the Plan and
their ability to take either hardship distributions or loans is suspended
due to potential foreign exchange issues.

	 	(d)	 	If a Participant is no longer a member of an eligible class of Employees and
becomes ineligible to participate but has not incurred a Break in Service, such
Employee will participate immediately upon returning to an eligible class of Employees.
If a Participant incurs a Break in Service, eligibility will be determined as provided
in the definition of Break in Service in Article I. Conversely, if an Employee who is
not a member of an eligible class of Employees subsequently becomes a member of an
eligible class, such Employee shall participate immediately upon entering such class.

	2.2.	 	Participation Election
	 
	 	 	Each Employee who is not otherwise excluded under Section 2.1(c) will automatically become a
Participant upon meeting the eligibility conditions of Section 2.1(a).
	 
	 	 	Whenever a new Employee is hired by the Employer and such Employee is a member of an
eligible class of Employees under Section 2.1 of the Plan, the Employer immediately shall
give notice to the Committee of the new Employee. The Committee shall notify in writing each
new Employee of his eligibility not later than thirty (30) days following his Employment
Commencement Date and shall furnish the Employee a copy of this Agreement or any other
explanation of the Plan that the Committee shall provide for that purpose. Each Employee so
notified automatically will become a Participant upon meeting the requirements of Section
2.1(a).

2

 

	2.3.	 	Participant Re-Entry
	 
	 	 	If the employment of a Participant is terminated and the Participant subsequently is
re-employed, the re-employed Employee shall become a Participant on the date of
re-employment, provided such rehired Employee is not a member of an ineligible class of
Employees under Section 2.1(c) of the Plan. Should such Employee not be immediately eligible
to participate in the Plan because of an ineligible job classification, such Employee shall
become eligible to participate in the Plan as provided in Section 2.1(d).

* * * * *

3

 

ARTICLE III

Contributions

	3.1.	 	Salary Reduction Contributions

	 	(a)	 	Basic Salary Reduction Contributions. For each Plan Year, the amount of
the basic Salary Reduction Contribution to the Trust Fund will equal the amount
determined under this Section. Each Participant may elect to defer, in whole
percentages, from 0% to 50% of his or her Annual Compensation, but shall not elect to
defer an amount to cause the Plan to violate the limitations of this Section or Code
Section 415, or to exceed the applicable maximum amount allowable as a deduction to the
Employer or the Participating Employer under Code Section 404. A Participant may elect
to defer Annual Compensation under this Section only in an amount which the Participant
otherwise could elect to receive in cash and which is currently available to the
Participant. Annual Compensation is not currently available to the Participant if the
Participant is not eligible to receive it at the time of the deferral election. The
amounts by which a Participant elects to reduce Annual Compensation under this Plan
shall be his Salary Reduction Contribution. The Employer shall contribute to the Trust
Fund the amount of the Salary Reduction Contributions which shall be treated as
Employer Contributions and credited to the Salary Reduction Contribution Account of
each Participant.
	 
	 	(b)	 	Catch-up Contributions. Notwithstanding the foregoing and pursuant to
Appendix A.1.8, all Participants who are eligible to make basic Salary Reduction
Contributions under this Plan and who have attained age 50 before the close of the Plan
Year shall be eligible to make Catch-up Contributions in accordance with, and subject
to the limitations of, Code Section 414(v). Such Catch-up Contributions shall not be
taken into account for purposes of the provisions of the Plan implementing the required
limitations of Code Sections 402(g) and 415 and if not otherwise limited by such
sections may exceed the Plan’s percentage limitation described in Section 3.1(a). The
Plan shall not be treated as failing to satisfy the provisions of the Plan implementing
the requirements of Code Sections 401(k)(3), 401(k)(11), 401(k)(12), 410(b) or 416, as
applicable, by reason of the making of such Catch-up Contributions. The Participant’s
election under this paragraph shall be submitted as a separate Salary Reduction
Election from the Participant’s deferral election for Salary Reduction Contributions.
	 
	 	(c)	 	Salary Reduction Election

	 	(i)	 	The Employer and the Committee shall adopt a procedure
necessary to implement the Salary Reduction Elections. Any contributions made
pursuant to a Salary Reduction Election shall not be made before the earlier of
(1) the Participant’s performance of Service with respect to which the
contribution is made and (2) when the compensation that is

1

 

	 	 	 	subject to the election would be currently available to the Employee in the
absence of an election to defer.
	 
	 	(ii)	 	A Participant’s Salary Reduction Election shall remain in force
and effect for all periods following its implementation until modified or
revoked by the Participant. The Employer shall permit a Participant to modify
or revoke his Salary Reduction Election as of any calendar day during the Plan
Year, such change to become effective as soon as administratively feasible
thereafter. A Participant may file a new Salary Reduction Election as of any
calendar day during the Plan Year.
	 
	 	(iii)	 	Salary Reduction Contributions means for any taxable year the
sum of:

	 	(A)	 	any Employer contribution under a qualified
cash or deferred arrangement defined in Code Section 401(k), determined
without regard to the dollar limitation under Code Section 402(g);
	 
	 	(B)	 	any Employer contribution under a simplified
employee pension as defined in Code Section 408(k)(6), pursuant to a
salary reduction agreement; and
	 
	 	(C)	 	any employer contribution toward the purchase
of a tax sheltered annuity contract as defined in Code Section 403(b),
if any, pursuant to a salary reduction agreement.

Salary Reduction Contributions shall not include any deferrals properly
distributed as excess Annual Additions.

	 	(d)	 	Annual Dollar Limit on Salary Reduction Contributions. A Participant’s
Salary Reduction Contributions under Section 3.1(a) shall not exceed the statutory
dollar limitation under Code Section 402(g) for the taxable year of the Participant.
The statutory dollar limitation is the amount of the dollar limitation under Code
Section 402(g) in effect on January 1 of each calendar year, as adjusted annually by
the Secretary of the Treasury ($15,500 for 2007). “Excess Salary Deferrals” are Salary
Reduction Contributions that exceed the statutory dollar limitation and are includable
in a Participant’s gross income under Code Section 402(g). Excess Salary Deferrals
shall be treated as Annual Additions under the Plan, unless such amounts are
distributed no later than the first April 15 following the close of the Participant’s
taxable year.

	 	(i)	 	If the statutory dollar limitation under Code Section 402(g) is
exceeded, the Committee shall direct the Trustee to distribute the Excess
Salary Deferrals, and any income or loss allocable to the Excess Salary
Deferrals, to the Participant not later than the first April 15 following the
close of the Participant’s taxable year.
	 
	 	(ii)	 	If there is a loss allocable to a Participant’s Excess Salary
Deferral, the distribution shall in no event be less than the lesser of the
Participant’s

2

 

	 	 	 	Salary Reduction Contribution Account or the Participant’s Salary Reduction
Contributions for the Plan Year. The amount of Excess Salary Deferrals to be
distributed to a Participant for a taxable year will be reduced by Excess
Contributions previously distributed or recharacterized for the Plan Year
beginning in the taxable year of the Employee.
	 
	 	(iii)	 	If a Participant is also a participant in (A) another
qualified cash or deferred arrangement defined in Code Section 401(k); (B) a
simplified employee pension defined in Code Section 408(k); or (C) a salary
reduction arrangement pursuant to which an employer purchases a tax sheltered
annuity contract defined in Code Section 403(b), and such Participant’s Salary
Reduction Contributions made under the other arrangement(s) and this Plan
cumulatively exceed the amount of the statutory dollar limitation under Code
Section 402(g) in effect on January 1 of each calendar year, as adjusted
annually by the Secretary of the Treasury ($15,500 for 2007), then the
Participant may, not later than March 1 following the close of the
Participant’s taxable year in which such excess occurred, notify the
Administrator in writing of the excess and request that his Salary Reduction
Contributions under this Plan be reduced by an amount specified by the
Participant. The specified amount then shall be distributed in the same manner
as provided in clause (i) above. A Participant is deemed to notify the
Administrator of any Excess Salary Deferrals that arise by taking into account
only those Salary Reduction Contributions made to this Plan and any other plans
of this Employer.
	 
	 	(iv)	 	If any of the foregoing provisions of this Section do not
conform with applicable Treasury Regulations, the nonconforming provisions may
be amended retroactively to assure conformity.

	3.2.	 	Safe Harbor Matching Contributions
	 
	 	 	For each Plan Year, the Employer shall contribute a Safe Harbor Matching Contribution to the
Trust Fund equal to 100% of each Participant’s Salary Reduction Contributions for the Plan
Year that do not exceed (i) for Plan Years ending on or before December 31, 2007, four
percent (4%) of each such Participant’s Annual Compensation for the Plan Year; and (ii) for
Plan Years commencing on or after January 1, 2008, five percent (5%) of each such
Participant’s Annual Compensation for the Plan Year. The Safe Harbor Matching Contribution
on behalf of each Participant shall be credited to each Participant’s Safe Harbor Matching
Contribution Account and shall be 100% vested at all times.
	 
	 	 	The Employer may, at its election, credit the Safe Harbor Matching Contribution for each
Participant based on the portion of each Participant’s Annual Compensation that is paid each
payroll period; provided, however, that in no event shall the Safe Harbor Matching
Contribution be contributed to the Plan prior to such Participant’s Salary Reduction
Contribution to which the Safe Harbor Matching Contribution relates. Further, pursuant to
the safe harbor requirements of Code Section 401(k)(3), the Employer shall be

3

 

	 	 	required to contribute before the due date of the Employer’s tax return, as extended, such
additional amount as may be necessary to ensure that each Participant eligible to receive an
allocation of the Safe Harbor Matching Contribution for the Plan Year shall receive an
amount for such Plan Year equal to the lesser of 100% of the amount deferred by such
Participant for such Plan Year or (i) for Plan Years ending on or before December 31, 2007,
four percent (4%) of such Participant’s Annual Compensation for such Plan Year, and (ii) for
Plan Years beginning on or after January 1, 2008, five percent (5%) of such Participant’s
Annual Compensation for such Plan Year. The Participant shall not be required to complete a
specified Period of Service or be employed on the last day of the Plan Year in order to
share in this additional amount.
	 
	 	 	The Safe Harbor Matching Contribution for any Plan Year shall not exceed the maximum amount
allowable as a deduction to the Employer under Code Section 404. The Safe Harbor Matching
Contribution for any Plan Year on behalf of a Participant shall not exceed the Participant’s
Annual Additions Limit, even if the contribution formula otherwise would require a larger
contribution. The Safe Harbor Matching Contribution on behalf of each Participant shall be
credited to each Participant’s Safe Harbor Matching Contribution Account and shall be 100%
vested at all times.
	 
	 	 	The Employer shall provide written notice to each Employee, who is eligible to participate
in the Plan under Section 2.1, that this Plan is exempt from the general nondiscrimination
rules of Code Sections 401(k)(3) and 401(m)(2) prior to (i) the Employee’s Employment
Commencement Date or as soon as administratively feasible thereafter, and (ii) the beginning
of each Plan Year. This notice shall be provided at least 30 days, but not more than 90
days, before the beginning of each Plan Year, shall provide a comprehensive description of
each Employee’s rights and obligations under the Plan, and shall be written in a manner
calculated to be understood by the average Employee.
	 
	 	 	Notwithstanding the foregoing, the Employer may amend the Plan during a Plan Year to reduce
or eliminate prospectively, any safe harbor contribution which is a basic matching or
enhanced matching contribution provided: (i) the Administrator provides a notice to the
Participants which explains the effect of the amendment, specifies the amendment’s effective
date and informs Participants they will have a reasonable opportunity to modify their salary
reduction agreements, and if applicable, Employee contributions; (ii) Participants have a
reasonable opportunity and period prior to the effective date of the amendment to modify
their salary reduction agreements, and if applicable, Employee contributions; and (iii) the
amendment is not effective earlier than the later of: (a) 30 days after the Administrator
gives notice of the amendment; or (b) the date the Employer adopts the amendment. If the
Employer amends the Plan to eliminate or reduce the Safe Harbor Matching Contribution under
this Section, it shall continue to apply all of the safe harbor requirements of this Section
until the amendment or termination becomes effective, and shall also apply for the entire
Plan Year, using the current year testing method, the nondiscrimination tests described in
Code Sections 401(k)(3) and 401(m)(2).

4

 

	3.3.	 	Employer Retirement Savings Contributions
	 
	 	 	For each Plan Year, the amount of the Employer Retirement Savings Contribution to the Trust
Fund will equal the amount that the Employer may from time to time determine and authorize.
Although the Employer may authorize contributions to this Plan whether or not the Employer
or the Participating Employers, if any, have net profits, the Employer intends the Plan to
be a profit sharing plan including a qualified cash or deferred arrangement for all purposes
of the Code. The Employer shall not authorize contributions at such times or in such amounts
that the Plan in operation discriminates in favor of Highly Compensated Employees.
Notwithstanding the foregoing, the Employer Retirement Savings Contributions for any Plan
Year shall not exceed the applicable maximum amount allowable as a deduction to the Employer
or a Participating Employer under Code Section 404. The Employer Retirement Savings
Contributions allocated to each Participant shall be credited to such individual’s
Retirement Savings Contribution Account under the formula provided in Section 5.2(b).
	 
	3.4.	 	Rules Governing Deposits of Contributions

	 	(a)	 	Salary Reduction Contributions accumulated through payroll deductions shall be
paid to the Trustee with reasonable promptness and not later than the fifteenth
(15th) working day of the succeeding month following the payroll deductions.
	 
	 	(b)	 	The Employer shall pay to the Trustee the Employer Contributions (other than
Salary Reduction Contributions) at any time and from time to time; except that the
total Employer Contribution for any Plan Year shall be paid in full not later than the
time prescribed by Code Section 404(a)(6) to enable the Employer to obtain a deduction
on its federal income tax return for the Employer’s taxable year. The total Employer
Contribution (other than Salary Reduction Contributions) for any Plan Year shall be
deemed made on the Anniversary Date of that Plan Year immediately following such
contribution, except for contributions made after the end of the Plan Year, but within
the time prescribed by Code Section 404(a)(6) which shall be deemed made on the last
day of the Plan Year.
	 
	 	(c)	 	On payment to the Trustee, all Employer Contributions shall be added
immediately to and become a part of the Trust Fund.
	 
	 	(d)	 	All Salary Reduction Contributions and Safe Harbor Matching Contributions shall
be credited to the Salary Reduction Contribution Account and the Safe Harbor Matching
Contribution Account, respectively, of each Participant as of each Allocation Date. All
Employer Retirement Savings Contributions, if any, shall be credited to the Employer
Retirement Savings Contribution Account of each Participant as of each Anniversary
Date.

5

 

	3.5.	 	Participant Voluntary After Tax Contributions
	 
	 	 	This Plan does not permit or accept Participant Voluntary After Tax Contributions.

* * * * *

ARTICLE IV

Investment of Accounts

	4.1.	 	Investment of Accounts by Participants
	 
	 	 	Each Participant shall designate, in accordance with the following subsections and the
procedures established from time to time by the Committee, the manner in which the amounts
allocated to each of his Individual Accounts shall be invested among the investment funds
made available from time to time by the Committee for this purpose.

	 	(a)	 	A Participant may designate one of such Investment Funds for all amounts
allocated to his Individual Accounts, or he may split the investment of such amounts
among such Investment Funds in such increments as the Committee may prescribe. If a
Participant fails to make a designation with respect to all or any of such amounts,
then such non-designated amounts shall be invested in the Investment Fund designated by
the Committee as the default Investment Fund from time to time in a uniform and
nondiscriminatory manner.
	 
	 	(b)	 	A Participant may (i) change his investment designation for future
contributions to be allocated to his Individual Accounts or (ii) convert his investment
designation with respect to amounts already allocated to his Individual Accounts. Any
such change shall be made in accordance with the procedures established by the
Committee, and the frequency of such changes may be limited by the Committee.

	 	 	A Participant shall be responsible for reviewing the information concerning investment
directives and earnings allocations on his or her Participant statement. If there is any
inaccuracy in the information contained on such statement, the Participant shall report such
inaccuracies to the Committee or the Trustee within the ninety (90)-day period immediately
following the date such statement was received. If a Participant fails to report an
inaccuracy within this ninety (90)-day period, the Plan shall not be required to make
retroactive adjustments to the Participant’s Individual Account but shall rectify any errors
on a prospective basis.
	 
	4.2.	 	Restriction on Acquisition of Employer Securities
	 
	 	 	Notwithstanding any other provision hereof, it is specifically provided that the Trustee
shall not purchase Employer Securities during any period in which such purchase is, in the
opinion of counsel for the Employer or the Committee, restricted by any law or

6

 

	 	 	regulation applicable thereto. During such period, amounts that would otherwise be invested
in Employer Securities pursuant to an investment designation shall be invested in such other
assets as the Trustee may in its discretion determine, or the Trustee may hold such amounts
uninvested for a reasonable period pending the purchase of such securities.
	 
	4.3.	 	Pass-Through Voting of Employer Securities
	 
	 	 	To the extent permitted by Section 404(a) of ERISA, at each annual meeting and special
meeting of the shareholders of the Employer, a Participant may direct the voting of the
number of whole shares of Employer Securities attributable to his Individual Accounts as of
the Valuation Date coinciding with or, if none, next preceding the record date for such
meeting. The Committee shall forward or cause to be forwarded to each such Participant
copies of pertinent proxy solicitation materials provided by the Employer together with a
request for such Participant’s confidential instructions as to the manner in which such
shares are to be voted. The Committee shall direct the Trustee to vote such shares in
accordance with such instructions and, to the extent permitted by Section 404(a) of ERISA,
shall also direct the Trustee as to the manner in which to vote any shares of Employer
Securities at any such meeting for which the Committee has not received, or is not subject
to receiving, such voting instructions.
	 
	4.4.	 	Stock Rights, Stock Splits, and Stock Dividends
	 
	 	 	No Participant shall have any right to request, direct, or demand that the Committee or the
Trustee exercise on his behalf rights or privileges to acquire, convert, or exchange
Employer Securities. The Trustee shall exercise or sell any such rights or privileges as
directed by the Committee. Employer Securities received by the Trustee by reason of a stock
split, stock dividend, or recapitalization shall be appropriately allocated to the
Individual Accounts of each affected Participant.
	 
	4.5.	 	Participant Rights
	 
	 	 	For purposes of this Article IV only, the Beneficiary of a deceased Participant and any
Alternate Payee under a Qualified Domestic Relations Order (as defined in Code Section
414(p)) shall have the rights of a Participant.

* * * * *

7

 

ARTICLE V

Allocation of Employer Contributions to Individual Accounts

	5.1.	 	Allocation of Safe Harbor Matching Contributions

	 	(a)	 	Allocation Rules. As of each Anniversary Date, but after the adjustment
of Individual Accounts as provided in Article IV, the Safe Harbor Matching
Contributions, allocated as of the Anniversary Date for the Plan Year which ends on the
Anniversary Date, shall be allocated and credited to the Safe Harbor Matching
Contribution Account of each Participant who was an eligible Participant, as determined
under Section 2.1, at any time during the Plan Year and who made Salary Reduction
Contributions under Section 3.1 for one or more payroll periods during the Plan Year
for which the Safe Harbor Matching Contribution is made.
	 
	 	(b)	 	Allocation Formula. Safe Harbor Matching Contributions shall be
allocated to each eligible Participant’s Safe Harbor Matching Contribution Account
under the formula described in Section 3.2 of the Plan.
	 
	 	 	 	As provided under Section 3.2, the Employer may elect to
pre-fund the Safe Harbor Matching Contribution for a Plan Year by
allocating the Safe Harbor Matching Contribution to the Individual
Accounts of eligible Participants as of the Allocation Date of each
payroll period during the Plan Year. The amount of the Safe Harbor
Matching Contribution to be allocated for any payroll period on
behalf of a Participant shall be determined under the contribution
formula described in Section 3.2, taking into account only the
Participant’s eligible compensation paid for such payroll period and
the Participant’s Salary Reduction Contribution for such payroll
period; provided, however, that no later than the due date of the
Employer’s tax return for the Plan Year, the Employer shall make an
additional Safe Harbor Matching Contribution to the Individual
Accounts of any Participant or Former Participant who failed to
receive a Safe Harbor Matching Contribution for such Plan Year that
is equal to the amount provided by the contribution formula described
in Section 3.2, based on such Participant’s Annual Compensation and
Salary Reduction Contributions for such Plan Year.

	5.2.	 	Allocation of Employer Retirement Savings Contributions

	 	(a)	 	Allocation Rules. As of each Anniversary Date, the Employer Retirement
Savings Contributions, allocated as of the Anniversary Date, for the Plan Year which
ends on the Anniversary Date shall be allocated and credited to the Employer Retirement
Savings Contribution Account of each eligible Participant in the Plan on the
Anniversary Date. A Participant who is employed by the Employer on the Anniversary Date
for the Plan Year will be allocated Employer Retirement Savings Contributions and
Participant Forfeitures under the allocation formula of Subsection (b) below. No
Participant, other than one who terminated employment

1

 

	 	 	 	with the Employer during the Plan Year on account of death, Total and Permanent
Disability or retiring after attaining his Normal Retirement Date, shall be entitled
to have any Employer Retirement Savings Contributions allocated to his Individual
Account, unless the Participant shall be employed by the Employer on the Anniversary
Date for the Plan Year.
	 
	 	(b)	 	Allocation Formula. The Committee shall allocate the Employer
Retirement Savings Contributions and Participant Forfeitures, if any, to each eligible
Participant’s Employer Retirement Savings Contribution Account in the same ratio that
each Participant’s Annual Compensation for the Plan Year bears to the total Annual
Compensation of all Participants for the Plan Year.

	5.3.	 	Suspension of the Allocation Rules Applicable to Employer Retirement Savings
Contributions in order to Satisfy Code Section 410(b) Requirements
	 
	 	 	For any Plan Year, if the allocation of the Employer Retirement Savings Contribution to
eligible Participants fails to satisfy the ratio percentage test under Code Section
410(b)(1)(B) for the Plan Year, the Employer may elect to suspend the requirements to share
in the allocation of such contribution for such Plan Year. If this paragraph applies for a
Plan Year, the Committee will suspend the requirements to share in the allocation of the
Employer Retirement Savings Contribution for a given Plan Year in the following manner.

	 	(a)	 	The Committee will identify the termination date for each Participant who
terminated employment with the Employer during the Plan Year. The Committee shall then
designate as “Includable Employees” all such Participants other than: (i) those
individuals excluded from participating in the Plan for the entire Plan Year under
Section 2.1(c) and (ii) any Participant who terminates employment with the Employer
during the Plan Year and fails to complete at least 91 consecutive calendar days for
such Plan Year.
	 
	 	(b)	 	The Committee will suspend the accrual requirements for Includable Employees
who are Participants, beginning first with the Includable Employee(s) employed with the
Employer on the next to last day of the Plan Year.
	 
	 	(c)	 	If the Plan does not satisfy the ratio percentage test under Code Section
410(b)(1) once the accrual requirements for the individuals identified in (b) above are
suspended, the Committee shall suspend the accrual requirements for the Includable
Employee(s) who have the next latest termination of employment date during the Plan
Year, and continuing to suspend in descending order the accrual requirements for each
Includable Employee who terminated employment, from the latest to the earliest
termination date, until the Plan satisfies the ratio percentage test under Code Section
410(b)(1) the Plan Year.
	 
	 	(d)	 	If two or more Includable Employees terminated employment on the same day, the
Committee will suspend the accrual requirements for all such Includable Employees,
irrespective of whether the Plan can satisfy the ratio percentage test

2

 

	 	 	 	under Code Section 410(b)(1) by accruing benefits for fewer than all such Includable
Employees.
	 
	 	(e)	 	If the Plan suspends the accrual requirements for an Includable Employee, that
Employee will share in the allocation of Employer contributions and Participant
Forfeitures, if any, without regard to whether he is employed by the Employer on the
last day of the Plan Year.
	 
	 	(f)	 	If the Employer’s Plan includes Employer matching contributions subject to Code
Section 401(m), this suspension of accrual requirements shall apply separately to the
Code Section 401(m) portion of the Plan, and the Committee will treat an Employee as
benefiting under that portion of the Plan if the Employee is an “eligible employee” for
purposes of the Code Section 401(m) nondiscrimination test.
	 
	 	(g)	 	For purposes of the ratio percentage test under Code Section 410(b)(1), an
Employee is benefiting under the Plan on a particular date if he or she is entitled to
an allocation for the Plan Year under this Section or as otherwise provided under
applicable Treasury Regulations.

	5.4.	 	Limitations on Allocations under Code Section 415

	 	(a)	 	Defined Contribution Plan Limits. The amount of Annual Additions which
the Committee may allocate under this Plan on a Participant’s behalf for a Limitation
Year may not exceed the Maximum Permissible Amount. If the amount the Employer
otherwise would contribute to the Participant’s Individual Account would cause the
Annual Additions for the Limitation Year to exceed the Maximum Permissible Amount, the
Employer will reduce the amount of its contribution so the Annual Additions for the
Limitation Year will equal the Maximum Permissible Amount. If an allocation of Employer
contributions pursuant to Article V would result in an Excess Amount (other than an
Excess Amount resulting from the circumstances described in Subsection 5.4(c)) to the
Participant’s account, the Committee will reallocate the Excess Amount to the remaining
Participants who are eligible for an allocation of Employer contributions for the Plan
Year in which the Limitation Year ends. The Committee will make this reallocation on
the basis of the allocation method under the Plan as if the Participant whose
Individual Account otherwise would receive the Excess Amount is not eligible for an
allocation of Employer contributions.
	 
	 	(b)	 	Estimation. Prior to the determination of the Participant’s actual 415
Compensation for a Limitation Year, the Committee may determine the Maximum Permissible
Amount on the basis of the Participant’s estimated 415 Compensation (as defined in
Subsection 5.4(e) for the Limitation Year). The Committee must make this determination
on a reasonable and uniform basis for all Participants similarly situated. The
Committee must reduce any Employer contributions (including any allocation of
Forfeitures) based on estimated 415 Compensation by any Excess Amounts carried over
from prior years. As soon as

3

 

	 	 	 	administratively feasible after the end of the Limitation Year, the Committee will
determine the Maximum Permissible Amount for the Limitation Year based on the
Participant’s actual 415 Compensation for the Limitation Year.
	 
	 	(c)	 	Disposition of Excess Amount. If pursuant to Subsection 5.4(b) or
because of an allocation of Forfeitures, there is an Excess Amount attributable to a
Participant for a Limitation Year, then the Committee will dispose of the Excess Amount
as follows:

	 	(i)	 	The Committee shall return any nondeductible Participant
Voluntary After Tax Contributions to the Participant to the extent that the
return would reduce the Excess Amount.
	 
	 	(ii)	 	If, after the application of clause (i) an Excess Amount still
exists, and the Plan covers the Participant at the end of the Limitation Year,
then the Committee will use the Excess Amounts to reduce future Employer
contributions (including any allocation of Forfeitures) under the Plan for the
next Limitation Year and for each succeeding Limitation Year, as is necessary,
for the Participant. The Participant may elect to limit 415 Compensation for
allocation purposes to the extent necessary to reduce the allocation for the
Limitation Year to the Maximum Permissible Amount and eliminate the Excess
Amount.
	 
	 	(iii)	 	If, after the application of clause (i) an Excess Amount still
exits and the Plan does not cover the Participant at the end of the Limitation
Year, then the Committee shall hold the Excess Amount in a suspense account and
use the Excess Amount to reduce Employer contributions on behalf of remaining
Participants and shall allocate and reallocate to the Individual Accounts of
remaining Participants in succeeding Limitation Years to the extent permissible
under the foregoing limitations, prior to any further Annual Additions to the
Plan. If the Plan should be terminated or contributions should be completely
discontinued, the funds in the suspense account will be allocated to the extent
not prohibited by Code Section 415. Any suspense account shall not be adjusted
for investment gains or losses of the Trust Fund.
	 
	 	(iv)	 	The Committee will not distribute any Excess Amount(s) to
Participants or to Former Participants.
	 
	 	(v)	 	Notwithstanding the foregoing sentence and the foregoing
clauses (i) through (iv), the Committee may distribute Salary Reduction
Contributions or return Voluntary After Tax Contributions, to the extent the
distribution or return would reduce the excess amounts in the Participant’s
Individual Accounts.

	 	(d)	 	Multiple Defined Contribution Plan Limits. If the Employer,
Participating Employer and any Related Employers maintain any other qualified defined

4

 

	 	 	 	contribution plan, the amount of the Annual Addition which may be allocated to a
Participant’s Individual Accounts in this Plan shall not exceed the Maximum
Permissible Amount, reduced by the amount of Annual Additions to such Participant’s
accounts for the same Limitation Year in the other plan(s). The Excess Amount
attributed to this Plan equals the product of:

	 	(i)	 	the total Excess Amount allocated as of such date (including
any amount the Committee would have allocated but for the limitations of Code
Section 415), multiplied by
	 
	 	(ii)	 	the ratio of

	 	(A)	 	the amount allocated to the Participant as of
such date under this Plan, divided by
	 
	 	(B)	 	the total amount allocated as of such date
under all qualified defined contribution plans (determined without
regard to the limitations of Code Section 415).

	 	(e)	 	Definitions. For purposes of the limitations of Code Section 415 set
forth in this Section, the following definitions shall apply:

	 	(i)	 	Annual Additions means the sum of the following amounts
allocated on behalf of a Participant for a Limitation Year:

	 	(A)	 	all Employer contributions;
	 
	 	(B)	 	all Forfeitures;
	 
	 	(C)	 	all Voluntary After Tax Contributions;
	 
	 	(D)	 	excess contributions described in Code Section
401(k) and excess aggregate contributions described in Code Section
401(m), irrespective of whether the Plan distributes or forfeits such
Excess Amounts, and Excess Salary Deferrals described in Code Section
402(g), unless the Excess Salary Deferrals are distributed no later
than the first April 15 following the close of the Participant’s
taxable year;
	 
	 	(E)	 	Excess Amounts reapplied to reduce Employer
contributions under this Section 5.4.
	 
	 	(F)	 	amounts allocated to an individual medical
account, as defined in Code Section 415(l)(2), included as part of a
pension or annuity plan maintained by the Employer;
	 
	 	(G)	 	contributions which are attributable to
post-retirement medical benefits allocated to the separate account of a
Key Employee as

5

 

	 	 	 	defined in Code Section 419A(d)(3), under a welfare benefit fund, as
described in Code Section 419(e), maintained by the Employer,
Participating Employer, and any Related Employers; and
	 
	 	(H)	 	allocations under a simplified employee pension plan.

	 	(ii)	 	415 Compensation means the total amount of salary,
wages, commissions, bonuses and overtime, paid or otherwise includable in the
gross income of a Participant during the Limitation Year plus any amounts
excluded from a Participant’s income pursuant to Code Sections 125, 401(k) and
Code Section 132(f)(4), but excluding:

	 	(A)	 	contributions by the Employer, a Participating
Employer, and any Related Employer to any deferred compensation plan
(to the extent the contributions are not included in the Participant’s
gross income for the taxable year in which contributed) or simplified
employee pension under Code Section 408(k), to the extent the
contributions are excludable form the Participant’s gross income (other
than amounts excluded from a Participant’s income pursuant to Code
Sections 125, 132(f)(4) or 401(k));
	 
	 	(B)	 	distributions from any plan of deferred
compensation, whether or not such amounts are includable in the gross
income of the Employees when distributed;
	 
	 	(C)	 	amounts realized from the exercise of any
nonqualified stock option, or when restricted stock becomes freely
transferable or is no longer subject to a substantial risk of
forfeiture;
	 
	 	(D)	 	amounts realized from the sale, exchange, or
other disposition of stock acquired under a qualified stock option
described in Part II, Subchapter D, Chapter 1 of the Code;
	 
	 	(E)	 	premiums paid by the Employer, a Participating
Employer, and any Related Employer, for group term life insurance (to
the extent the premiums are not includable in the Participant’s gross
income); contributions by the Employer, a Participating Employer, and
any Related Employer, to an annuity under Code Section 403(b) (to the
extent not includable in the Participant’s gross income); and any other
amounts received under any Employer fringe benefit plan sponsored by
the employers, a Participating Employer or any Related Employer (to the
extent not includable in the Participant’s gross income);
	 
	 	(F)	 	any contribution for medical benefits, within
the meaning of Code Section 419A(f)(2), after termination of employment
which is otherwise treated as an Annual Addition; and

6

 

	 	(G)	 	any amount otherwise treated as an Annual
Addition under Code Section 415(l)(1).

	 	(iii)	 	Employer means the Plan Sponsor and any successor
corporation or business organization which may be substituted for the Plan
Sponsor under this Agreement. All Related Employers shall be considered a
single entity for purposes of applying the limitations of this Section.
However, Participating Employers who are not Related Employers, but receive
services of Employees of the Employer under an employee leasing arrangement
shall be treated as separate employers for purposes of these top-heavy rules.
	 
	 	(iv)	 	Excess Amount means the excess of the Participant’s
Annual Additions for the Limitation Year over the Maximum Permissible Amount,
less administrative charges allocable to such Excess Amount.
	 
	 	(v)	 	Limitation Year means the Limitation Year specified in the Plan.
	 
	 	(vi)	 	Maximum Permissible Amount means, pursuant to Appendix
A.1.2., the lesser of:

	 	(A)	 	the Defined Contribution Dollar Limitation, or
	 
	 	(B)	 	one hundred percent (100%) of the Participant’s
415 Compensation, within the meaning of Code Section 415(c)(3) for a
Limitation Year with respect to any Participant.

	 	 	 	Defined Contribution Dollar Limitation means $40,000, as adjusted for
increases in the cost of living under Code Section 415(d). The compensation
limit referred to in (B) shall not apply to any contribution for medical
benefits after separation from service (within the meaning of Code Section
401(h) or 419A(f)(2)).

	5.5.	 	Post-Allocation Adjustments to Accounts
	 
	 	 	After the amount or amounts have been allocated and credited to each Participant’s Employer
Contribution Account, as provided in this Article, the then value of each Employer
Contribution Account shall remain unchanged until the next Accounting Date. Notwithstanding
the foregoing, the Participant’s Employer Contribution Account may be adjusted prior to the
next Accounting Date under other provisions in this Agreement authorizing the Committee to
reduce the Participant’s Individual Accounts by disbursements properly chargeable to them or
increased by funds received and credited to them.

7

 

	5.6.	 	Employer Contribution Accounts Defined
	 
	 	 	For purposes of this Article, reference to the Employer Contribution Accounts of
Participants shall include the Employer Contribution Accounts of those Participants who die,
become disabled or retire during the Plan Year considered.

* * * * *

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ARTICLE VI

In-Service Distributions

	6.1.	 	Withdrawal from Certain Individual Accounts Upon Attainment of Age 591/2
	 
	 	 	Prior to termination of employment and upon attainment of age 591/2, a Participant shall have
the right to request withdrawal of all or any portion from the Participant’s fully vested
and Nonforfeitable Individual Accounts. Amounts withdrawn shall come, first, from the
Participant’s Rollover Account; second, from his Employer Retirement Savings Contribution
Account; third, from his Matching Contribution Account; and finally, from his Salary
Reduction Contribution Account. All determinations of the amount credited to such accounts
shall be made as of the most recent Valuation Date. A Participant shall make an election
under this Section in the manner and format prescribed by the Committee, including
electronic delivery, at any time during the Plan Year for which the election will be
effective. In the election, whether written or electronic, the Participant shall specify the
desired percentage or dollar amount to be distributed by the Trustee to the Participant.
Furthermore, the Participant’s election shall relate solely to the dollar amount specified
in the election form. The Participant’s right to elect to receive an amount, if any, for a
particular Plan Year greater than the dollar amount specified in the election form shall
terminate on the Anniversary Date. The Trustee shall distribute to a Participant as elected
under this Section within the ninety (90) day period, or as soon as administratively
feasible, after the Participant files the election with the Committee. The Trustee shall
distribute the balance of the Participant’s Individual Accounts not distributed pursuant to
the election(s) according to the form of distribution selected under Article IX when the
Participant terminates employment with the Employer.

	6.2.	 	Withdrawal from Certain Accounts Prior to Attainment of Age 591/2 or Account of Financial
Hardship

	 	(a)	 	General Order of Distribution. Prior to termination of employment and before
attainment of age 591/2, a Participant shall have the right to request a withdrawal in an
amount sufficient to satisfy a financial hardship, as defined in Subsection (b), from
the Participant’s fully vested and Nonforfeitable in the following priority: (1)
Rollover Account, (2) Employer Retirement Savings Contribution Account, (3) Matching
Contribution Account, other than Safe Harbor Matching Contribution Account. If the
amounts available to the Participant from these accounts are not sufficient to satisfy
the Participant’s financial hardship, the remainder may be withdrawn from the
Participant’s Salary Reduction Contribution Account, other than accumulated earnings,
Qualified Non-Elective Contributions and Qualified Matching Contributions.
	 
	 	(b)	 	Hardship Distribution Rules. Distribution may be made to a Participant in the
event of financial hardship. For purposes of this Section, a “hardship distribution” is
a distribution that is necessary to satisfy an immediate and heavy financial need of an
Employee who lacks other available resources to satisfy such need.

9

 

	 	(i)	 	A distribution will be considered to satisfy an immediate and
heavy need of a Participant if the distribution is for:

	 	(A)	 	expenses incurred for or necessary to obtain
medical care that would be deductible under Code Section 213(a)
(determined without regard to whether the expenses exceed 7.5% of
adjusted gross income), of the Participant, the Participant’s spouse,
children, or dependents;
	 
	 	(B)	 	costs directly related to the purchase,
excluding mortgage payments, of a principal residence for the Employee;
	 
	 	(C)	 	payment of tuition, related educational fees,
and room and board expenses, for up to the next twelve (12) months of
post-secondary education for the Participant, the Participant’s spouse,
children or dependents (as defined in Code Section 152, and, for
taxable years beginning on or after January 1, 2005, without regard to
Code Section 152(b)(1), (b)(2) and (d)(1)(B));
	 
	 	(D)	 	payment necessary to prevent the eviction of
the Employee from, or a foreclosure on the mortgage of, the Employee’s
principal residence;
	 
	 	(E)	 	payment for burial or funeral expenses for the
Participant’s deceased parent, spouse, children or dependents (as
defined in Code Section 152, and, for taxable years beginning on or
after January 1, 2005, without regard to Code Section 152(d)(1)(B)); or
	 
	 	(F)	 	expenses for the repair of damage to the
Participant’s principal residence that would qualify for the casualty
deduction under Code Section 165 (determined without regard to whether
the loss exceeds 10% of adjusted gross income).

	 	(ii)	 	A distribution will be considered necessary to satisfy an
immediate and heavy financial need of a Participant who lacks other available
resources only if:

	 	(A)	 	the Participant has obtained all distributions,
other than hardship distributions, and all nontaxable loans under all
plans maintained by the Employer; and
	 
	 	(B)	 	the distribution is not in excess of the amount
of an immediate and heavy financial need, including amounts necessary
to pay any federal, state or local income taxes or penalties reasonably
anticipated to result from the distribution.

	 	(iii)	 	In addition to the conditions above:

10

 

	 	(A)	 	each plan maintained by the Employer or a
legally enforceable arrangement provide that the Employee’s Salary
Reduction Contributions and Voluntary After Tax Contributions, if any,
will be suspended for six (6) months, pursuant to Appendix A.1.9, after
the receipt of the hardship distribution.
	 
	 	(B)	 	Any hardship withdrawal to a Participant made
pursuant to this Section shall be increased by an amount equal to the
lesser of:

	 	(1)	 	all federal, state, and local
income taxes and associated penalties (including, if applicable,
the additional income tax described in Code Section 72(t))
imposed with respect to such hardship withdrawal; or
	 
	 	(2)	 	the amount, if any, in such
Participant’s Salary Reduction Contribution Account in excess of
such hardship withdrawal.

	 	(C)	 	All distributions that may be made pursuant to
this Section are subject to the spousal and participant consent
requirements, if applicable, of Code Sections 401(a)(11) and 417 (which
currently do not apply to this Plan)
	 
	 	(D)	 	Hardship distributions shall not be made to any
individual who (i) is not included on the U.S. payroll of the Company
or any Subsidiary, or (ii) has been designated by the Company as having
a “permanent transfer” outside the United States.

	 	(c)	 	Statutory Restriction on Disbursements. Amounts held in the Salary Reduction
Contribution Account of a Participant, including Qualified Non-Elective Contributions
and Qualified Matching Contributions, if any, may not be distributable prior to the
earliest of:

	 	(i)	 	Severance from Employment, Total and Permanent Disability or
death. For purposes of these distribution restrictions, “Severance from
Employment” means when an Employee ceases to be an Employee of the Employer
maintaining the Plan. An Employee does not have a Severance from Employment if,
in connection with a change of employment, the Employee’s new employer
maintains the Plan with respect to the Employee, by assuming sponsorship of the
Plan or by accepting a transfer of Plan assets and liabilities (within the
meaning of Code Section 414(l)) with respect to the Employee;
	 
	 	(ii)	 	Attainment of age fifty-nine and one-half (591/2) years;
	 
	 	(iii)	 	Plan termination without establishment of an alternative
defined contribution plan, other than an employee stock ownership plan (as
defined in Code Sections 4975(e) or 409), a simplified employee pension

11

 

	 	 	 	plan as defined in Code Section 408(k), a tax sheltered annuity plan under
Code Section 403(b), a deferred compensation plan maintained by state and
local governments and tax-exempt organizations under Code Section 457(b), or
a SIMPLE IRA under Code Section 408(p);
	 
	 	(iv)	 	proven financial hardship, subject to the limitations in
Subsection (b).

	 	 	 	All distributions that may be made pursuant to one or more of the foregoing
distributable events are subject to the spousal and participant consent
requirements, if applicable, of Code Sections 401(a)(11) and 417 (but which
currently do not apply to this Plan). In addition, distributions that are by reason
of Plan termination, as described in paragraph (iii) above, shall be in the form of
a lump sum distribution. Notwithstanding the foregoing, distributions of amounts
attributable to Safe Harbor Matching Contributions shall not be permitted for any
reason prior to Severance from Employment.

	6.3.	 	Additional Restrictions on In-Service Withdrawals

	 	(a)	 	All withdrawals pursuant to this Article shall be made only in the manner and
within the time prior to the proposed date of withdrawal prescribed by the Committee.
	 
	 	(b)	 	No withdrawal shall be made from an Individual Account to the extent such
Individual Account has been pledged to secure a loan from the Plan.
	 
	 	(c)	 	If a Participant’s Individual Account from which a withdrawal is made is
invested in more than one Investment Fund, the withdrawal shall be made pro rata from
each Investment Fund in which such Individual Account is invested.
	 
	 	(d)	 	All withdrawals under this Article shall be paid in cash.
	 
	 	(e)	 	Any withdrawal hereunder that constitutes an Eligible Rollover Distribution
shall be subject to the Direct Rollover election described in Article IX.
	 
	 	(f)	 	This Article shall not be applicable to a Participant following termination of
employment with the Employer, and the amounts in such Participant’s Individual Accounts
shall be distributable only in accordance with the provisions of Article VII.

* * * * *

12

 

ARTICLE VII

Distributions after Termination of Employment

	7.1.	 	Eligibility Due to Retirement, Death or Total and Permanent Disability

	 	(a)	 	Retirement. At Normal Retirement Age, a Participant shall be fully
vested in the Participant’s Individual Accounts and the Trustee shall hold such
Individual Accounts for the Participant’s benefit. If a Participant retires (or
otherwise terminates employment) on or after the Participant’s Normal Retirement Date,
the Committee shall credit and adjust the Participant’s Individual Accounts as provided
in Articles IV and V, as of the Valuation Date immediately preceding a distribution
pursuant to Section 7.3 below.
	 
	 	(b)	 	Death. Upon death, a Participant shall be fully vested in his
Individual Accounts and the Trustee shall hold such Individual Accounts for the benefit
of the Participant’s Designated Beneficiary or Beneficiaries. The Committee shall
credit and adjust the deceased Participant’s Individual Accounts as provided in
Articles IV and V, as of the Valuation Date immediately preceding the date of a
distribution pursuant to Section 7.3 below. A Participant’s Designated Beneficiary or
Beneficiaries shall be entitled to benefits under Section 7.3 after the death of the
Participant or Former Participant. This provision shall only apply to an individual
who is employed by the Employer at the time of his or her death.
	 
	 	(c)	 	Total and Permanent Disability. Upon termination of employment due to
Total and Permanent Disability, a Participant shall be fully vested in his or her
Individual Accounts and the Trustee shall hold the Individual Accounts for the
Participant’s benefit. The Committee shall credit and adjust the Individual Accounts of
a disabled Participant, as provided in Articles IV and V, as of the Valuation Date
immediately preceding the date of a distribution pursuant to Section 7.3 below. A
disabled Participant shall be entitled to benefits under Section 7.3 after the
Participant’s date of Total and Permanent Disability.

	7.2.	 	Eligibility Due to Termination of Employment

	 	(a)	 	General. If a Participant’s employment by the Employer shall terminate
for any reason other than retirement, death or Disability, the Participant shall become
vested in his or her Individual Accounts as provided in Subsection (b) below, and the
Trustee shall hold the Nonforfeitable portion of the Participant’s Account Balance in
his Individual Accounts for the Participant’s benefit. The Committee shall credit and
adjust the Individual Accounts of the terminated Participant, as provided in Articles
IV and V, as of the Valuation Date immediately preceding the date of the distribution
pursuant to Section 7.3 below. A terminated Participant shall be entitled to benefits
under this Section 7.2 and Section 7.3 after the Participant’s date of termination of
employment.

13

 

	 	(b)	 	Vesting for Participants with Service Credited on and after January 1,
2005. A Participant to whom Subsection 7.2(a) applies shall be 100% vested at all
times in amounts credited to his Participant Contribution Accounts. In addition, the
Participant shall also be entitled to receive 100% of the balance credited to the
Participant’s Employer Contribution Accounts, provided the Employer’s HR Direct
personnel system classified such Participant as actively employed by the Employer or a
Related Employer on January 1, 2005. For this purpose, the term “actively employed”
includes both a Participant who completed at least one (1) Hour of Service on January
1, 2005 as an Employee of the Employer or a Related Employer and a Participant who on
January 1, 2005 was on an authorized leave of absence or a maternity or paternity leave
of absence and who did not incur a Break in Service during the 2005 Plan Year.
	 
	 	(c)	 	Transfers between Employers. A Participant’s transfer of employment from the
Employer to a Related Employer, or any transfer from one Related Employer to another
Related Employer, shall not be considered to be a termination of employment for
purposes of this Plan. This provision shall apply without regard to whether such
Related Employer is classified as a Participating Employer under this Plan’s terms.

	7.3.	 	Payment of Benefits

	 	(a)	 	Retirement, Death, Disability and Termination Benefits. As soon as
administratively feasible after a Participant terminates employment, and the Committee
has credited and adjusted the Individual Accounts of a Participant as provided in
Sections 7.1 and 7.2, the Trustee shall make payments to the Participant or his
Designated Beneficiary or Beneficiaries pursuant to Article IX, subject to the
mandatory distribution requirements of Article VIII and the Qualified Joint and
Survivor Annuity requirements of Section 9.6, if applicable. The Committee shall charge
each payment to the Participant’s Individual Accounts and payments shall continue until
the Nonforfeitable Account Balance is paid to the Participant in full. Notwithstanding
the preceding, in the event of a Participant’s death, the Committee shall distribute
the Participant’s Individual Accounts no less rapidly than is required under Article
VIII.
	 
	 	(b)	 	Commencement of Payments, Automatic Distribution. Unless a Participant
elects otherwise, payment of benefits shall commence not later than the sixtieth
(60th) day after the end of the Plan Year in which the latest of the
following events occurs: (i) the date on which the Participant attains the earlier of
age sixty-five (65) or Normal Retirement Age under the Plan; (ii) the tenth (10th)
anniversary of the year in which the Participant commenced participation in the Plan;
or (iii) the date on which the Participant terminates employment with the Employer.
These payments shall commence after the Plan has satisfied all applicable notification
and election requirements contained herein and in the Plan’s standard administrative
procedures. Notwithstanding the foregoing, a Participant may not defer commencement of
benefits or elect a form of installment payment which

14

 

	 	 	 	would result in the Participant receiving less than fifty-one percent (51%) of the
total benefits to be paid during the Participant’s life expectancy.
	 
	 	(c)	 	Cash Out Distributions.

	 	(i)	 	Notwithstanding the foregoing paragraph (b), if a Participant
terminates employment with the Employer and the Participant’s Nonforfeitable
Account Balance determined under Sections 7.1 or 7.2 is $1,000 or less after
excluding amounts attributable to the Participant’s Rollover Account in
accordance with Appendix A.1.7, the Committee may direct the Trustee to make
immediate distribution to the Participant in the form of a lump sum
distribution; provided, however, the Trustee shall not make a lump sum
distribution after benefit distributions have commenced, without the written
consent of the Participant and, if required by law, his spouse’s consent.
	 
	 	(ii)	 	If a Participant terminates employment with the Employer and
the Participant’s Nonforfeitable Account Balance determined under Sections 7.1
or 7.2 is greater than $1,000 but less than $5,000, after including amounts
attributable to the Participant’s Rollover Account, and the Participant does
not elect to have such distribution paid directly to an Eligible Retirement
Plan specified by the Participant in a Direct Rollover or to receive the
distribution directly in accordance with Article IX, then the Plan shall pay
the distribution in a Direct Rollover to an individual retirement account
designated by the Committee. The Committee shall cause the Plan to satisfy any
and all applicable notification requirements prior to the occurrence of any
distribution under this provision.
	 
	 	(iii)	 	Notwithstanding any contrary provision, if the Participant’s
Nonforfeitable Account Balance is greater than $5,000, the Trustee shall make
no distribution without the Participant’s and the spouse’s consent pursuant to
Article IX until the later of attainment of age sixty-two (62) years or
attainment of Normal Retirement Age. The foregoing sentence shall not apply
after the death of the Participant.
	 
	 	(iv)	 	The provisions of this Section 7.3 shall apply to any Alternate
Payee immediately following the date that such individual’s Qualified Domestic
Relations Order is approved and implemented by the Administrator.

* * * * *

15

 

ARTICLE VIII

Mandatory Distribution of Benefits

	8.1.	 	General
	 
	 	 	Pursuant to and in accordance with the minimum distribution requirements under Code Section
401(a)(9) and the applicable Treasury Regulations, as adopted by the Plan Sponsor and set
forth in Appendix B attached hereto, the Committee shall direct the Trustee to distribute a
Participant’s Nonforfeitable Account Balance to the Participant or, if the Participant is
deceased, to the Participant’s Designated Beneficiary under a method of payment, which as of
the Required Beginning Date, satisfies the minimum distribution requirements under Code
Section 401(a)(9) and the applicable Treasury Regulations.

	8.2.	 	Form of Distribution
	 
	 	 	Under no circumstances may a Participant elect payment of benefits in the form of an
annuity; provided, however, that any individual who is eligible to receive a distribution in
the form of an annuity may direct the Administrator to distribute his entire account in the
form of an annuity contract which contains distribution terms that satisfy the requirements
of Code Section 401(a)(9) and the applicable Treasury Regulations on his Required Beginning
Date. All distributions required under this Article shall be determined in the manner set
forth herein and made under Code Section 401(a)(9) and the applicable Treasury Regulations,
including the minimum distribution incidental benefit requirements of Treas. Reg.
§ 1.401(a)(9)-2. A mandatory distribution at the Participant’s Required Beginning Date will
be in lump sum unless the Participant, pursuant to this Article, makes a valid election to
receive an alternative form of payment.

	8.3.	 	Limits on Distribution Periods 
	 
	 	 	As of the first Distribution Calendar Year, distributions, if not make in a lump sum, may
only be made over one of the following periods or a combination of such periods:

	 	(i)	 	the life of the Participant;
	 
	 	(ii)	 	the life of the Participant and a Designated Beneficiary,
subject to the requirements of Code Section 401(a)(9) and the applicable
Treasury Regulations;
	 
	 	(iii)	 	a period certain not extending beyond the life expectancy of
the Participant; or
	 
	 	(iv)	 	a period certain not extending beyond the joint and last
survivor expectancy of the Participant and a Designated Beneficiary.

16

 

	8.4.	 	Mandatory Distribution of Benefits During a Participant’s Lifetime

	 	(a)	 	Commencement of Benefits. The Trustee must distribute or begin to
distribute the entire interest of a Participant no later than the Participant’s
Required Beginning Date. The minimum distribution for the first Distribution Calendar
Year is due by the Participant’s Required Beginning Date. The minimum distribution for
each subsequent Distribution Calendar Year is due by the Participant’s Required
Beginning Date. The minimum distribution for each subsequent Distribution Calendar
Year, including the calendar year of the Participant’s Required Beginning Date, is due
by December 31 of that year. A Participant’s “Required Beginning Date” shall be as
follows:

	 	(i)	 	For a Participant who is a Five Percent Owner, the Required
Beginning Date shall commence on the first day of April following the later of:

	 	(A)	 	the calendar year in which the Participant
attains age seventy and one-half (701/2) years; or
	 
	 	(B)	 	the earlier of the calendar year with or within
which ends during the Plan Year in which the Participant becomes a Five
Percent Owner, or the calendar year in which the Participant retires.

	 	(ii)	 	For a Participant who is not a Five Percent Owner, the Required
Beginning Date is the first day of April of the calendar year immediately
following the later of:

	 	(A)	 	the calendar year in which the Participant
attains age seventy and one-half (701/2); or
	 
	 	(B)	 	the calendar year in which the Participant
terminates employment with the Employer.

	 	 	 	Once distributions have begun to a Five Percent Owner under this Section, they must
continue to be distributed, even if the Participant ceases to be a Five Percent
Owner in a subsequent year. The Trustee must distribute or begin to distribute the
entire interest of a Participant no later than the Participant’s Required Beginning
Date. The minimum distribution for the first Distribution Calendar Year is due by
the Participant’s Required Beginning Date. The minimum distribution for each
subsequent Distribution Calendar Year, including the calendar year of the
Participant’s Required Beginning date, is due by December 31 of that year. Except as
provided in clause (ii) above, a Participant’s Required Beginning Date is the April
1 following the close of the calendar year in which the Participant attains age
seventy and one-half (701/2) years.
	 
	 	(b)	 	Minimum Distribution Amount. The required minimum distribution for each
calendar year is the lesser of: (1) the quotient obtained by dividing the Participant’s
Account Balance as of the last Valuation Date preceding the beginning of the
Distribution Calendar Year by the applicable distribution period

17

 

	 	 	 	in the Uniform Lifetime Table set forth in Treas. Reg. § 1.401(a)(9)-9, Q&A-2, using
the Participant’s age as of the Participant’s birthday in the Distribution Calendar
Year; or (2) if the Participant’s sole Designated Beneficiary for the Distribution
Calendar Year is the Participant’s spouse and the spouse is more than ten (10) years
younger than the Participant, the quotient obtained by dividing the Participant’s
Account Balance by the number in the Joint and Last Survivor Table set forth in
Treas. Reg. § 1.401(a)(9)-9, Q&A-3, using the Participant’s and Spouse’s attained
ages as of the Participant’s and Spouse’s birthdays in the Distribution Calendar
Year.
	 
	 	(c)	 	Distribution Period. The applicable distribution period for a
Distribution Calendar Year, including the calendar year of the Participant’s death, is
either the period stated in the Uniform Lifetime Table, set forth in Treas. Reg.
§ 1.401(a)(9)-9, Q&A-2, based on the Participant’s attained age, as recalculated, in
each Distribution Calendar Year or, if the Participant’s spouse is the Participant’s
sole Designated Beneficiary for the entire Distribution Calendar Year and the Spouse is
more than ten (10) years younger than the Participant, then the applicable distribution
period is the joint life expectancy factor determined under Treas. Reg.
§ 1.401(a)(9)-9, Q&A-3, using the Participant’s and Spouse’s attained ages, as
recalculated, as of the Participant’s and Spouse’s birthdays in the Distribution
Calendar Year.
	 
	 	 	 	The Committee will increase the Participant’s Nonforfeitable Account Balance, as
determined on the relevant Valuation Date, for contributions or Forfeitures
allocated after the Valuation Date by December 31 of the Valuation Calendar Year.
For purposes of this valuation, the Committee will treat any portion of the minimum
distribution for the first Distribution Calendar Year made after the close of that
year as a distribution occurring in the first Distribution Calendar Year.

	8.5.	 	Mandatory Distribution of Benefits Upon a Participant’s Death

	 	(a)	 	Death Occurs On or After a Participant’s Required Beginning Date. If
the Participant or Former Participant dies after distribution has commenced, the
Trustee shall continue to distribute the remaining portion of the Participant’s or
Former Participant’s Nonforfeitable Account Balance at least as rapidly as under the
method of distribution used prior to the Participant’s death. The minimum distribution
amount for the year of death is determined in the manner described in Section 8.4(b).
The “applicable distribution period” for Distribution Calendar Years after the
Distribution Calendar Year of the Participant’s death is determined as follows:

	 	(i)	 	Designated Beneficiary. If the Participant has a
Designated Beneficiary, determined as of September 30 of the calendar year
following the calendar year of the Participant’s death, the “applicable
distribution period” is the greater of: (1) the Participant’s remaining life
expectancy; or (2) the Designated Beneficiary’s remaining life expectancy.

18

 

	 	(A)	 	Spouse is Designated Beneficiary. If
the Participant’s Designated Beneficiary is the surviving Spouse, the
“applicable distribution period” is the Spouse’s life expectancy, as
determined under the Single Lifetime Table, described in Treas. Reg.
§ 1.401(a)(9)-9, for each Distribution Calendar Year beginning after
the Participant’s death based on the Spouse’s attained age, as
recalculated, in each calendar year.
	 
	 	(B)	 	Nonspouse Designated Beneficiary. If
the Participant’s Designated Beneficiary is not his surviving Spouse,
then the “applicable distribution period” is determined under the
Single Lifetime Table described in Treas. Reg. § 1.401(a)(9)-9, using
the nonspouse beneficiary’s age as of the beneficiary’s birthday in the
calendar year immediately following the calendar year of the
Participant’s death, reducing the “applicable distribution period” by
one for each calendar year thereafter. The nonspouse Designated
Beneficiary’s age shall not be recalculated.

	 	(ii)	 	Designated Beneficiary is Older than the Participant.
If the Participant’s remaining life expectancy is greater than the Designated
Beneficiary’s life expectancy, the Participant’s remaining life expectancy is
the “applicable distribution period”. The remaining life expectancy is the
Participant’s unrecalculated life expectancy determined under the Single
Lifetime Table, described in Treas. Reg. § 1.401(a)(9)-9, using the
Participant’s attained age in the year of death, and reduced by one for each
calendar year thereafter.
	 
	 	(iii)	 	No Designated Beneficiary. If a Participant dies
without a Designated Beneficiary, the “applicable distribution period” is the
remaining life expectancy of the Participant. The remaining life expectancy is
the Participant’s unrecalculated life expectancy determined under the Single
Lifetime Table of Treas. Reg. § 1.401(a)(9)-9, using the Participant’s attained
age in the year of death, reduced by one for each calendar year thereafter.

	 	(b)	 	Death Occurs Before a Participant’s Required Beginning Date.

	 	(i)	 	Designated Beneficiary. If the Participant or Former
Participant dies before the Participant’s Required Beginning date, the Trustee
shall complete distribution of the Participant’s or Former Participant’s
Nonforfeitable Account Balance by December 31 of the calendar year containing
the fifth (5th) anniversary of the Participant’s or Former Participant’s death.
If the Participant’s surviving Spouse is the Participant’s sole Designated
Beneficiary and the surviving spouse dies after the Participant but before
distributions to either the Participant or the surviving spouse begin, this
paragraph (b) shall apply as if the surviving spouse were the Participant.

19

 

	 	(ii)	 	No Designated Beneficiary. If the Participant or Former
Participant dies before the Participant’s Required Beginning date and there is
no Designated Beneficiary as of September 30 of the year following the year of
the Participant’s death, distribution of the Participant’s entire
Nonforfeitable Account Balance will be completed by December 31 of the calendar
year containing the fifth (5th) anniversary of the Participant’s
death.

	 	(iii)	 	Death of Surviving Spouse before Distributions to
Surviving Spouse are Required to Begin. If the Participant dies before his
Required Beginning Date, the Participant’s surviving Spouse is the
Participant’s sole Designated Beneficiary, and the surviving Spouse dies before
distributions are required to begin to the surviving Spouse under this Section
8.5(b), distribution shall commence at the time specified under Section
8.5(b)(i) as if the surviving Spouse were the Participant.

	 	(c)	 	Time and Manner of Distribution. Distributions under this Section 8.5
are considered to begin on the Participant’s Required Beginning Date. If the
Participant’s surviving Spouse is the Participant’s sole Designated Beneficiary and the
surviving Spouse dies after the Participant but before distributions to either the
Participant or the surviving spouse begin, the distributions are considered to begin on
the date distributions are required to begin to the surviving Spouse. If distributions
under an annuity purchased from an insurance company irrevocably commence to the
Participant before the Participant’s Required Beginning Date (or to the Participant’s
surviving Spouse before the date distributions are required to begin to the surviving
Spouse), the date distributions are considered to begin is the date distributions
actually commence.

	8.6.	 	Definitions

	 	(a)	 	Designated Beneficiary means, pursuant to Appendix B.5.1, the
individual who is designated as the Beneficiary under the Plan and is the designated
beneficiary under Code Section 401(a)(9) and the applicable Treasury Regulations.
	 
	 	(b)	 	Distribution Calendar Year means, pursuant to Appendix B.5.2., a
calendar year for which a minimum distribution is required. For distributions beginning
before the Participant’s death, the first Distribution Calendar Year is the calendar
year immediately preceding the calendar year which contains the Participant’s Required
Beginning Date. For distributions beginning after the Participant’s death, the first
distribution calendar year is the calendar year in which distributions are required to
begin under Section 8.5. The required minimum distribution for the Participant’s first
distribution calendar year will be made on or before the Participant’s Required
Beginning Date. The required minimum distribution for other distribution calendar
years, including the required minimum distribution for the distribution calendar year
in which the Participant’s required Beginning Date occurs, will be made on or before
December 31 of that Distribution Calendar Year.

20

 

	 	(c)	 	Life expectancy, means the period of time during which minimum
distributions are required to be made to the Participant or the Participant and his
Designated Beneficiary based on the Uniform Lifetime Table or the Single Lifetime
Table, as applicable, described in Treas. Reg. § 1.401(a)(9)-9.
	 
	 	(d)	 	Nonforfeitable Account Balance means the Account Balance as of the last
Valuation Date in the calendar year immediately preceding the Distribution Calendar
Year (Valuation Calendar Year), increased by the amount of any contributions or
Forfeitures allocated to the Account Balance as of the dates in the Valuation Calendar
Year after the Valuation Date and decreased by distributions made in the Valuation
Calendar Year after the Valuation Date. If any portion of the minimum distribution for
the first Distribution Calendar Year is made in the second Distribution Calendar Year
on or before the Required Beginning Date, the amount of the minimum distribution made
in. the second Distribution Calendar Year shall be treated as if it had been made in
the immediately preceding Distribution Calendar Year.

* * * * *

21

 

ARTICLE IX

Optional Forms of Distribution

9.1. Forms of Payment of Benefits

	 	(a)	 	Subject to the survivor annuity requirements of Section 9.6 below, if
applicable, a Participant, Former Participant or Beneficiary shall receive a
distribution of his or her benefits in a single lump sum, payable in cash at the fair
market value when distributed.
	 
	 	(b)	 	Notwithstanding the above, a Participant shall have the right to receive
payment of his benefits in any optional form of benefit payment to which that
Participant would have been entitled under a plan sponsored by a Predecessor Employer
in which that Participant was a Participant.
	 
	 	(c)	 	Notwithstanding the foregoing, a distribution made pursuant to this Section
shall be subject to the immediate distribution provisions of Subsection 7.3(c).

9.2. Direct Rollover Benefit

	 	(a)	 	Direct Rollover. Notwithstanding any provision of the Plan to the
contrary that would otherwise limit a Distributee’s election under this Section, a
Distributee may elect, at the time and in the manner prescribed by the Administrator,
to have any portion of an Eligible Rollover Distribution paid directly to an Eligible
Retirement Plan specified by the Distributee in a Direct Rollover. However, if the
Eligible Retirement Plan contains a cash or deferred arrangement, the Trustee must
reasonably conclude, prior to permitting a Direct Rollover, that the transferee plan
will continue the distribution restrictions described in Section 6.2(b) on any amounts
included in the Direct Rollover that are attributable to the Participant’s Salary
Reduction Contributions.
	 
	 	(b)	 	Definitions

	 	(i)	 	Eligible Rollover Distribution. An Eligible Rollover
Distribution is any distribution of all or any portion of the balance to the
credit of the Distributee, except that an Eligible Rollover Distribution does
not include: any distribution that is one of a series of substantially equal
periodic payments (not less frequently than annually) made for the life (or
life expectancy) of the Distributee or the joint lives (or joint life
expectancies) of the Distributee and the Distributee’s Designated Beneficiary,
or for a specified period of ten years or more; any distribution to the extent
such distribution is required under Code Section 401(a)(9), the portion of any
distribution that is not includable in gross income (determined without regard
to the exclusion for net unrealized appreciation with respect to employer
securities) and any distribution pursuant to Section 6.2(c) hereof.
Notwithstanding the foregoing, a portion of a distribution shall not

22

 

	 	 	 	fail to be an eligible rollover distribution merely because the portion
consists of after-tax employee contributions which are not includable in
gross income. However, such portion may be transferred only to an individual
retirement account or annuity described in Code Sections 408(a) or 408(b),
or to a qualified defined contribution plan described in Code Sections
401(a) or 403(a) that agrees to separately account for amounts so
transferred, including separately accounting for the portion of such
distribution which is includable in gross income and the portion of such
distribution which is not so includable.
	 
	 	(ii)	 	Eligible Retirement Plan is an individual retirement
account described in Code Section 408(a) an individual retirement annuity plan
described in Code Section 408(b) an annuity plan described Code Section 403(a),
an annuity contract described in Code Section 403(b) and an eligible plan under
Code Section 457(b) which is maintained by a state, political subdivision of a
state, or any agency or instrumentality of a state or political subdivision of
a state and which agrees to separately account for amounts transferred into
such plan from this Plan, or a qualified trust described in Code Section 401(a)
that accepts the Distributee’s Eligible Rollover Distribution. The definition
of eligible retirement plan shall also apply in the case of a distribution to a
surviving spouse, or to a spouse or former spouse who is the alternate payee
under a Qualified Domestic Relations Order.
	 
	 	(iii)	 	Distributee. A Distributee includes an Employee or
former Employee. In addition, the Employee’s or former Employee’s Surviving
Spouse and the Employee’s or former Employee’s spouse or former spouse who is
the alternate payee under a qualified domestic relations order, as defined in
Code Section 414(p) are Distributees with regard to the interest of the spouse
or former spouse.
	 
	 	(iv)	 	Direct Rollover. A Direct Rollover is a payment by the
plan to the Eligible Retirement Plan specified by the Distributee.

9.3. Election to Receive Benefits

	 	(a)	 	Notwithstanding the foregoing, a Participant who leaves the employment of the
Employer before his or her Normal Retirement Date may elect to leave his or her
Nonforfeitable Account Balance until Normal Retirement Date. The Trustee shall, subject
to the Participant’s direction, if any, invest and reinvest and shall credit and charge
the Individual Accounts with their proportionate share of gains and losses of the Trust
Fund pursuant to Article V until the Nonforfeitable Account Balance is paid out to the
Former Participant under this Article. Any election made under this Section shall be
irrevocable and shall be made no later than fourteen (14) days before the electing
Participant becomes entitled to receive his or her Nonforfeitable Account Balance in
the Plan. Notwithstanding the foregoing, a Participant who has elected to leave his or
her Nonforfeitable

23

 

	 	 	 	Account Balance under the management of the Trustee may later elect to have the
Account Balance transferred to any pension or profit sharing plan maintained by
another Employer in which the Participant has, at the time of the later election,
become a Participant under the transferee plan.
	 
	 	(b)	 	The Participant, Former Participant, or Beneficiary shall elect the form or
forms of payment of benefits permitted in Section 9.1 which the Committee and Trustee
shall implement. Not earlier than ninety (90) days, but not later than thirty (30)
days, before the Participant’s Annuity Starting Date, the Committee must provide a
benefit notice to a Participant who is eligible to make an election under this Section.
The Participant’s Annuity Starting Date means the first day of the first period for
which an amount is paid as an annuity or any other form. The benefit notice must
explain the optional forms of benefit in the Plan, including the material features and
relative values of those options, and the Participant’s right to defer distribution
until he or she attains Normal Retirement Age (provided such age is at least age 62).

	 	(i)	 	If a distribution is one to which Code Sections 401(a)(11) and
417 do not apply, such distribution may commence less than thirty (30) days
after the notice required under Treas. Reg. § 1.411(a)-11(c) is given, provided
that:

	 	(A)	 	the Plan Administrator clearly informs the
Participant that he or she has a right to a period of at least thirty
(30) days after receiving the notice to consider the decision of
whether or not to elect a distribution (and, if applicable, a
particular distribution option), and
	 
	 	(B)	 	the Participant, after receiving the notice,
affirmatively elects a distribution.

	 	(ii)	 	If a Participant, Former Participant, or Beneficiary makes an
election prescribed by this Section, the Committee will direct the Trustee to
distribute the Participant’s Nonforfeitable Account Balance pursuant to that
election. Any election under this Section is subject to the mandatory
distribution requirements of Article VIII and the survivor annuity requirements
of Section 9.6 if applicable. The Participant, Former Participant or
Beneficiary must make an election under this Section by filing an election form
with the Committee at any time before the Trustee otherwise would commence to
pay a Participant’s Account Balance under the applicable requirements of
Article VII.

9.4. Minority or Disability

	 	 	 	During the minority or disability of an individual entitled to receive benefits under this
Plan, the court may direct the Committee to instruct the Trustee to make payments due the
individual directly to the individual or to the spouse or a relative or to any individual or
institution having custody of the individual. Neither the Committee nor the Trustee

24

 

	 	 	 	shall be required to cause or to verify the application of any payments so made, and the
receipt of the payee, including the endorsement of a check or checks, shall be conclusive to
all interested parties.

9.5. Unclaimed Account Procedure

	 	 	 	The Plan does not require either the Trustee or the Committee to search for, or to ascertain
the whereabouts of, any Participant or Beneficiary. At the time the Participant’s or
Beneficiary’s benefit becomes distributable under Article VII, the Committee, by certified
or registered mail addressed to his or her last known address of record with the Committee
or the Employer, must notify any Participant or Beneficiary, that he or she is entitled to a
distribution under this Plan. The notice must quote the provisions of this Section and
otherwise must comply with the applicable notice requirements of Article VII. If the
Participant, or Beneficiary, fails to claim his or her distributive share or make his or her
whereabouts known in writing to the Committee within six (6) months from the date of mailing
of the notice, the Committee will treat the Participant’s or Beneficiary’s unclaimed payable
Account Balance as forfeited and will reallocate the unclaimed payable Account Balance in
accordance with this Article IX. A Forfeiture under this paragraph will occur at the end of
the notice period or, if later, the earliest date applicable Treasury Regulations would
permit the Forfeiture. Pending Forfeiture, the Committee, following the expiration of the
notice period, may direct the Trustee to segregate the Nonforfeitable Account Balance in a
segregated account and to invest that segregated account in Federally insured interest
bearing savings accounts or time deposits (or in a combination of both), or in other fixed
income investments.
	 
	 	 	 	If a Participant or Beneficiary who has incurred a Forfeiture of his or her Account Balance
under the provisions of the first paragraph of this Section makes a claim, at any time, for
the forfeited Account Balance, the Committee must restore the Participant’s or Beneficiary’s
forfeited Account Balance to the same dollar amount as the dollar amount of the Account
Balance forfeited, unadjusted for any gains or losses occurring subsequent to the date of
the forfeiture. The Committee will make the restoration during the Plan Year in which the
Participant or Beneficiary makes the claim, first from the amount, if any, of Participant
forfeitures the Committee otherwise would allocate for the Plan Year, then from the amount,
if any, of the Trust Fund net income or gain for the Plan Year, and then from the amount, or
additional amount, the Employer contributes to enable the Committee to make the required
restoration. The Committee must direct the Trustee to distribute the Participant’s or
Beneficiary’s restored Account Balance not later than 60 days after the close of the Plan
Year in which the Committee restores the forfeited Account Balance. The forfeiture
provisions of this Section apply solely to the Participant’s, or the Beneficiary’s Account
Balance derived from Employer contributions.
	 
	 	 	 	Upon termination of the Plan, in lieu of the unclaimed account procedure set forth in this
Section, Section 17.6 shall apply.

25

 

9.6. Qualified Joint And Survivor Annuity Requirements

	 	 	 	The Qualified Joint and Survivor Annuity requirements do not apply to this Plan. The Plan
does not provide any annuity distributions to Participants nor to Surviving Spouses. A
transfer agreement described in Section 15.2 may not permit a plan which is subject to Code
Section 417 to transfer assets to this Plan, unless the transfer is an elective transfer as
described in Section 15.3.

* * * * *

26

 

ARTICLE X

Plan Sponsor and Participating Employers

10.1. Employer Action

	 	 	 	Whenever the Employer is permitted or required to do or perform any act under this
Agreement, it shall be done and performed by the Benefits Administration Committee or where
applicable a person duly authorized to do or perform the act by its legally constituted
authority.

10.2. Plan Amendment

	 	(a)	 	At any time the Plan Sponsor, by formal written action, may amend or modify
this Agreement in any manner it deems necessary or desirable, retroactively or
prospectively, subject to the following provisions of this Article. The Trustee need
only join in an amendment if it affects any duty of such Trustee.
	 
	 	(b)	 	The Plan Sponsor must make all amendments in writing, signed by the duly
authorized person(s) with the legally constituted authority of the Plan Sponsor and
joined in, if required by the last sentence of subparagraph (a), by the Trustee. An
amendment shall become effective upon execution by the duly authorized person(s), and
if required by the last sentence of subparagraph (a), by execution of the Trustee. Each
amendment must state the date on which it is either retroactively or prospectively
effective.
	 
	 	(c)	 	Unless it is made to secure the approval of the Commissioner of the Internal
Revenue Service or other governmental bureau or agency, no amendment or modification of
this Agreement by the Plan Sponsor shall:

	 	(i)	 	operate retroactively to reduce or divest the then vested
interest in any Individual Accounts or to reduce or divest any benefit then
payable hereunder unless all Participants, Former Participants and
Beneficiaries then having Individual Accounts or benefit payments affected
thereby shall consent to the amendments or modifications;
	 
	 	(ii)	 	directly or indirectly affect any Participant’s Nonforfeitable
percentage outside the protection of Treas. Reg. § 1.411(a)(8);
	 
	 	(iii)	 	decrease a Participant’s accrued benefit, except to the extent
permitted under Code Section 412(c)(8), and reduce or eliminate Code Section
411(d)(6) protected benefits determined immediately prior to the adoption date
(or, if later, the effective date) of the amendment, except as permitted by
applicable Treasury Regulations. (An amendment reduces or eliminates Code
Section 411(d)(6) protected benefits if the amendment has the effect of either:
(A) eliminating or reducing an early retirement benefit or a retirement-type
subsidy (as defined in applicable Treasury Regulations);

27

 

	 	 	 	or (B) except as provided by applicable Treasury Regulations, eliminating an
optional form of benefit. The Committee must disregard an amendment to the
extent application of the amendment would fail to satisfy this paragraph. If
the Committee must disregard an amendment because the amendment would
violate clause (A) or clause (B), the Committee must maintain a schedule of
the early retirement option or other optional forms of benefit the Plan must
continue for the affected Participant); or
	 
	 	(iv)	 	affect the rights, duties or responsibilities of the Trustees,
the Plan Administrator or the Committee without the written consent or approval
of the Trustee, Administrator, or affected Committee member.

	 	(d)	 	If the vesting schedule described in Section 7.2 is amended, a Participant’s
vested interest in any contribution to which the vesting schedule in Section 7.2
applied, shall not be less than the Nonforfeitable percentage determined as of the
later of the effective date of the amendment or the date of its adoption. A Participant
with at least three (3) Years of Service on the last day of the election period
described in this paragraph, may elect to have the Nonforfeitable percentage of the
Employer Contribution Accounts determined without regard to the amendment. If a
Participant fails to make an election, then the Participant shall be subject to the new
vesting schedule. The election period shall commence on the date the amendment is
adopted or deemed to be made and shall end sixty (60) days after the latest of:

	 	(i)	 	the date of the adoption of the amendment;
	 
	 	(ii)	 	the effective date of the amendment; or
	 
	 	(iii)	 	the date the Participant receives written notice of the
amendment from the Employer or Administrator.

	 	(e)	 	The Employer as Plan Sponsor, without the consent of any Participating
Employer, may amend the Plan and Trust, from time to time, in order to conform the Plan
and Trust to any requirement for qualification of the Plan and Trust under the Code.
The Plan Sponsor may not amend the Plan in any manner which would modify any election
made by a Participating Employer in its Participation Agreement without the
Participating Employer’s written consent. Furthermore, the Plan Sponsor may not amend
the Plan in any manner which would violate the proscriptions of this Section 10.2. The
Trustee does not have the power to amend the Plan and Trust.

10.3. Discontinuance, Termination of Plan

	 	(a)	 	The Plan Sponsor has the right, at any time, to suspend or discontinue its
contributions under the Plan to the Trust Fund, and to terminate, at any time, the Plan
and the Trust created under this Agreement. The Plan will terminate on the first to
occur of the following events:

28

 

	 	(i)	 	the date the Plan is terminated by action of the Employer;
	 
	 	(ii)	 	the date the Employer is judicially declared bankrupt or
insolvent, unless the proceeding authorized continued maintenance of the Plan;
or
	 
	 	(iii)	 	the dissolution, merger, consolidation or reorganization of
the Employer or the sale by the Employer of all or substantially all of its
assets, unless the successor or purchaser elects and makes provision to
continue the Plan, in which event the successor or purchaser will substitute
itself as the Employer under this Plan.

	 	(b)	 	Upon either full or partial termination of the Plan, or, if applicable, upon
complete discontinuance of contributions to the Plan, the Individual Accounts of all
Participants, Former Participants and Beneficiaries shall be and become fully vested
and Nonforfeitable, if not otherwise fully vested under Section 7.2 of the Plan. The
Trustee, in its discretion, may convert some or all of the Trust Fund to cash and shall
deduct therefrom all unpaid charges and expenses, except as the same may be paid by the
Employer. The Committee then shall adjust the balance of all Individual Accounts on the
basis of the net cash balance and fair market value of all property in the Trust Fund.
Thereafter, the Trustee shall distribute the amount to the credit of each Participant,
Former Participant and Beneficiary in cash, in kind, or partly in cash and partly in
kind, as the Committee shall direct. Notwithstanding the foregoing, a distribution made
because of a termination of the Plan shall be subject to the mandatory distribution
requirements of Article VIII, the survivor annuity requirements of Section 9.6, if
applicable, and the immediate distribution provisions of Subsection 7.3(c).
	 
	 	(c)	 	To the extent that this Plan is maintained as a multiple employer plan, the
provisions governing the discontinuance or termination of the Plan with respect to a
Participating Employer which is not a Related Employer will be governed under Section
10.5.

10.4. Prohibition Against Reversion to Plan Sponsor or a Participating Employer

	 	 	 	Under no circumstances or conditions, other than those specifically provided herein, shall
the Trust Fund or any portion thereof revert to the Plan Sponsor or any Participating
Employer or be used for or diverted to purposes other than the exclusive benefit of the
Participants, Former Participants and Beneficiaries. No amendment or revocation by the Plan
Sponsor of this Section may cause or permit any portion of the Trust Fund to revert to or
become a property of the Plan Sponsor or any Participating Employer.

10.5. Adoption by Related Employers

	 	(a)	 	With the written consent of the Plan Sponsor, any other association,
corporation, or other business organization, may adopt this Plan and Trust in its
entirety, participate herein and be known as a Participating Employer, by executing a
properly authorized document (a “Participation Agreement”) evidencing the intent and
will of the Participating Employer. The participation of a Participating

29

 

	 	 	 	Employer that is a recipient of Leased Employee services from the Plan Sponsor shall
be limited to such Leased Employees unless otherwise provided in the Participating
Employer’s Participation Agreement.
	 
	 	(b)	 	The following requirements shall apply to any Participating Employer who elects
to adopt this Plan pursuant to this Article:

	 	(i)	 	Each Participating Employer shall be required to use the same
Trustee as provided in this Agreement.
	 
	 	(ii)	 	The Trustee may, but shall not be required to, commingle, hold
and invest as one (1) Trust Fund all contributions made by Participating
Employers and all increments thereof.
	 
	 	(iii)	 	The transfer of any Participant from or to any corporation
participating in this Plan, whether the Participant is an Employee of the Plan
Sponsor or a Participating Employer, shall not affect the Participant’s rights
under the Plan; all amounts credited to the Participant’s Individual Accounts,
all accumulated service with the transferor or Predecessor Employer, and the
length of participation in the Plan shall continue to the Participant’s credit.

	 	(c)	 	All rights and values forfeited by termination of employment shall inure only
to the benefit of the Employees and Participants of the Participating Employer which
employed the forfeiting Participant, except, if the Forfeiture is for an Employee whose
Employer is a Related Employer, then the Forfeiture shall be allocated based on Annual
Compensation to all Individual Accounts of Participating Employers who are Related
Employers. Should an Employee of one (“First”) Employer be transferred to a Related
(“Second”) Employer the transfer shall not cause the Employee’s Account Balance,
generated while an Employee of the First Employer, in any manner or by any amount, to
be forfeited. The Employee’s Account Balance for all purposes of the Plan, including
length of service, shall be considered as though the Employee had always been employed
by the Second Employer and as such had received contributions, forfeitures, earnings or
losses, and appreciation or depreciation in value of assets totaling the amount so
transferred.
	 
	 	(d)	 	Upon an Employee’s transfer between Participating Employers, the Employee
involved shall carry accumulated Years of Vesting Service. No transfer shall effect a
termination of employment under this Agreement and the Participating Employer to which
the Employee transfers shall thereupon become obligated under this Agreement to the
Employee in the same manner as the Participating Employer from whom the Employee
transfers.
	 
	 	(e)	 	Any expenses of the Plan and Trust which are to be paid by the Employer or
borne by the Trust Fund shall be paid by each Participating Employer in the same
proportion that the total amount standing to the credit of all Participants employed

30

 

	 	 	 	by the Participating Employer bears to the total amount standing to the credit of
all Participants.
	 
	 	(f)	 	Any contribution made by a Participating Employer that is a Related Employer of
the Employer shall be paid to and held by the Trustee for the exclusive benefit of the
Employees of the Participating Employer and the Beneficiaries of the Employees, subject
to all the terms and conditions of this Plan. Any payment to the Employer made by a
Participating Employer that is a recipient of the services of Leased Employees pursuant
to a written agreement with the Employer to the Trustee and held by the Trustee for the
exclusive benefit of the Participants providing leased employee services to the
Participating Employer and their Beneficiaries, subject to all the terms and conditions
of this Plan.
	 
	 	 	 	All contributions or payments made by a Participating Employer shall be determined
separately on the basis of its net profit and total Annual Compensation paid.
	 
	 	(g)	 	Based on information furnished by the Administrator, and each Participating
Employer, the Committee and the Trustee shall keep separate books and records
concerning the affairs of each Participating Employer and of the Account Balances of
the Participants of each Participating Employer.
	 
	 	(h)	 	Each Participating Employer indemnifies and saves harmless the Employer, the
Plan Sponsor, the Administrator, the members of the Committee, the Trustee, and each of
their employees and agents from and against any and all loss resulting from liability
to which the Employer, the Plan Sponsor, the Administrator, the Trustees or the members
of the Committee, or their employees and agents, may be subjected by reason of the
failure by the deemed separate plan of such Participating Employer to satisfy the
minimum coverage requirements under Code Section 410(b), the nondiscrimination
requirements under Code Sections 401(a)(4), 401(k), and 401(m), Code Section 415
limitations, Code Section 416 top-heavy requirements, and any other qualification
requirements applicable to the Participating Employer on a deemed separate plan basis.
Further, the Employer, the Plan Sponsor and each Participating Employer indemnify and
save harmless the Administrator, the members of the Committee, the Trustee or their
employees and agents, from and against any and all loss resulting from liability to
which the Administrator and the Committee, or the members of the Committee, and each of
their employees and agents, may be subjected by reason of any act or conduct (except
willful misconduct or gross negligence) in their official capacities in the
administration of this Trust or Plan or both, including all expenses reasonably
incurred in their defense, in case the Employer, the Plan Sponsor, or the Participating
Employers fail to provide such defense. The indemnification provisions of this Section
do not relieve the Administrator, any Committee member, or the Trustee, or their
employees and agents, from any liability he may have under ERISA for breach of a
fiduciary duty. Moreover, the Administrator, the Committee members, the Trustee, the
Plan Sponsor, the Participating Employers, and their employees and agents, may execute
a letter agreement

31

 

	 	 	 	further delineating the indemnification agreement of this Section, provided the
letter agreement is consistent with and does not violate ERISA.
	 
	 	(i)	 	Each Participating Employer shall be deemed to be a part of this Plan; however,
each Participating Employer shall be deemed to have designated irrevocably the Plan
Sponsor as its agent in all of its relations with the Trustee, the Committee and the
Administrator under this Agreement.
	 
	 	(j)	 	Any Participating Employer shall be permitted to discontinue or revoke its
participation in this Plan. Upon any discontinuance or revocation, satisfactory
evidence thereof and of any applicable conditions imposed shall be delivered to the
Trustee. The Trustee shall thereafter transfer, deliver and assign Contracts and other
Trust Fund assets allocable to the Participants of the Participating Employer to the
new plan as shall have been designated by the Participating Employer, if it has
established a separate employee benefit pension plan for its employees. If no successor
plan is designated, the Trustee shall retain the assets for the Employees of the
Participating Employer under this Article X. No part of the corpus or income of the
Trust Fund relating to the Participating Employer shall be used for or diverted to
purposes other than the exclusive benefit of the Employees of the Participating
Employer and the Beneficiaries of the Employees.
	 
	 	(k)	 	A withdrawal by any Participating Employer without any provision for the
continuation of a plan for its Employees or, if the Participating Employer is a
recipient of the services of Leased Employees, for its Leased Employees, shall
constitute a termination of the Plan with respect to that Participating Employer.
Withdrawal from the Plan by any Participating Employer shall not affect the continued
operation of the Plan with respect to the other Employers; provided, however, in the
event of the withdrawal of a Participating Employer which is a member of a group of
Related Employers with respect to which the Plan constitutes a single plan and in the
event that provision is made for the continuation of a defined contribution plan for
its Employers separate and distinct from the Plan herein set forth, the share of the
assets of the Trust Fund allocable to such group of Employers that is transferred to
such other Plan shall be determined by the Committee subject to the provisions of
Section 15.2.
	 
	 	(l)	 	If the Plan Sponsor discontinues or terminates the Plan under Subsection
10.3(a) above, the provisions of Subsection 10.5(d) shall govern the portion of the
Plan which covers employees of a Participating Employer.

	10.6.	 	Authority of Administrator over Participating Employers

	 	 	 	The Administrator shall have the authority to make any and all necessary rules or
regulations binding on all Participating Employers and all Participants and Beneficiaries to
effectuate the purposes of this Article.

	10.7.	 	Deficiency of Earnings or Profits

32

 

	 	 	 	If any Participating Employer is prevented in whole or in part from making a contribution to
the Trust Fund which it otherwise would have made under the Plan because of having no
current or accumulated earnings or profits, or because the earnings or profits are less than
the contribution which it otherwise would have made, then so much of the contribution which
the Participating Employer was prevented from making may be made for the benefit of the
Participating Employees of the Participating Employer by the other Participating Employers
who are Related Employers. The contribution by each other Participating Employer shall be
limited to the proportion of its total current and accumulated earnings or profits remaining
after adjustment for its contribution to the Plan made without regard to this Section, which
the total prevented contribution bears to the total current and accumulated earnings or
profits of all the Participating Employers remaining after adjustment for all contributions
made to the Plan without regard to this Section. A Participating Employer on behalf of whose
Employees a contribution is made under this Section shall not reimburse the contributing
Participating Employer unless it has otherwise agreed to do so in writing.

* * * * *

33

 

ARTICLE XI

The Committee

11.1. Committee Appointment

	 	 	 	The Plan Sponsor shall appoint a Committee consisting of one (1) or more members. The Plan
Sponsor may remove any member of the Committee at any time and a member may resign by
written notice to the Plan Sponsor, such resignation to become effective upon the
appointment of a substitute member or, if earlier, the lapse of thirty (30) days after such
resignation is effective. Any vacancy in the membership of the Committee shall be filled by
appointment made by the Plan Sponsor, but pending the filling of any vacancy, the then
members of the Committee may act under this Agreement as though they alone constitute the
full Committee. The Plan Sponsor shall notify the Trustee promptly of the appointment of the
original Committee and of any change in the membership of the Committee. Any member of the
Committee who is an Employee shall automatically cease to be a member of the Committee as of
the date he terminates employment with the Employer and all Related Employers.

11.2. Committee Action and Procedure

	 	(a)	 	Any and all acts and decisions of the Committee shall be by at least a majority
of the then members. The Committee may delegate to any one or more of its members the
authority to sign notices or other documents on its behalf or to perform ministerial
acts for it, in which event the Trustee and any other person may accept the notice,
document or act without question as having been authorized by the Committee.
	 
	 	(b)	 	The Committee may, but need not, call or hold formal meetings, and any
decisions made or actions taken pursuant to written approval of a majority of the then
members shall be sufficient.
	 
	 	(c)	 	The Committee shall maintain adequate records of its decisions, which records
shall be subject to inspection by the Employer and by any Participant, Former
Participant, or Beneficiary, but only to the extent that they apply to the individuals.
	 
	 	(d)	 	The Committee may designate one (1) of its members as Chairman and one (1) of
its members as Secretary and may establish policies and procedures governing it if they
are consistent with this Agreement.

11.3. Committee Powers and Duties

	 	 	 	The Committee shall perform the duties and may exercise the powers and discretion given to
it in this Agreement, and its decisions and actions shall be final and conclusive regarding
all persons affected thereby. The Committee shall exercise its discretion at all times in a
nondiscriminatory manner. Subject to any limitations stated in this Agreement,

34

 

	 	 	 	the Committee is authorized and empowered with the following powers, rights, and duties:

	 	(a)	 	To select a Secretary, who need not be a member of the Committee;
	 
	 	(b)	 	To determine the rights of eligibility of an Employee to participate in the
Plan, the value of a Participant’s Account Balance and the Nonforfeitable percentage of
each Participant’s Individual Accounts;
	 
	 	(c)	 	To adopt written rules of procedure and regulations necessary for the proper
and efficient administration of the Plan provided the rules are consistent with the
terms of this Agreement and copies of all such rules and regulations are delivered to
both the Plan Sponsor and the Trustee as soon as administratively feasible but no later
than the effective date of the such rules and regulations;
	 
	 	(d)	 	To construe and enforce the terms of the Plan and the rules and regulations it
adopts, including interpretation of the Plan documents and documents related to the
Plan’s operation;
	 
	 	(e)	 	To amend the Plan to the extent the authority to do so is delegated by the Plan
Sponsor;
	 
	 	(f)	 	To direct the Trustee concerning the crediting and distribution of the Trust;
	 
	 	(g)	 	To review and render decisions respecting a claim for, or denial of a claim
for, a benefit under the Plan;
	 
	 	(h)	 	To furnish the Employer with information which the Employer may require for tax
or other purposes;
	 
	 	(i)	 	To engage the service of agents whom it may deem advisable to assist it with
the performance of its duties;
	 
	 	(j)	 	To engage the services of an Investment Manager or Managers (as defined in
ERISA Section 3(38)), each of whom will have full power and authority to manage,
acquire or dispose, or direct the Trustee with respect to acquisition or disposition,
of any Plan asset under its control;
	 
	 	(k)	 	To establish, in its sole discretion, a nondiscriminatory policy, pursuant to
this Section, which the Trustee must observe in making loans, if any, to Participants
and Beneficiaries;
	 
	 	(l)	 	To establish and maintain a funding standard account and to make credits and
charges to the account to the extent required by and in accordance with applicable Code
provisions;
	 
	 	(m)	 	To adopt a loan policy;

35

 

	 	(n)	 	To direct the Trustee as to the exercise of rights or privileges to acquire,
convert, or exchange Employer Stock; and
	 
	 	(o)	 	To establish or designate Investment Funds as investment options under the Plan
as provided in Article IV.

	 	 	 	The Committee must exercise all of its powers, duties, and discretion under the Plan in a
uniform and nondiscriminatory manner.

11.4. Committee Reliance

	 	 	 	The Trustee may rely without question on any notices or other documents received from the
Committee. The Plan Sponsor and each Participating Employer shall furnish the Committee with
all data and information available to the Employer, which the Committee may reasonably
require to perform its functions under this Agreement. The Committee may rely without
question on any data or information furnished by the Plan Sponsor and each Participating
Employer.

11.5. Committee Authority

	 	 	 	Any and all disputes which may arise involving Participants, Former Participants,
Beneficiaries and/or the Trustee shall be referred to the Committee, and its decisions shall
be final and conclusive regarding all affected persons. Furthermore, if any issue arises
concerning the meaning, interpretation or application of any provisions of this Agreement,
the decision of the Committee on any issue shall be final.

11.6. Conflicts in Interest

	 	 	 	Notwithstanding any other provisions of this Agreement, no member of the Committee shall
vote or act on any matter involving the Committee member’s rights, benefits or other
participation under this Agreement.

11.7. Appointment of Agent and Legal Counsel

	 	 	 	The Committee may engage agents to assist it and may engage legal counsel who may be counsel
for the Plan Sponsor. The Committee shall not be responsible for any action taken or omitted
to be taken on the advice of counsel. All reasonable expenses incurred by the Committee
shall be paid by the Plan Sponsor.

11.8. Appointment of Investment Manager

	 	 	 	The Committee may delegate investment management authority pertaining to all or a portion of
the Plan assets by appointing an Investment Manager(s) and may authorize payment of the fees
and expenses of the Investment Manager(s) from the Plan assets. For purposes of this
Agreement, any Investment Manager so appointed shall, during the period of appointment,
possess fully and absolutely those powers, rights and duties of the Trustee (to the extent
delegated by the Committee) regarding the investment or reinvestment of that portion of the
Plan assets over which the Investment Manager has

36

 

	 	 	 	investment management authority. An Investment Manager must be one (1) of the following:

	 	(a)	 	an Investment Advisor registered under the Investment Advisors Act of 1940;
	 
	 	(b)	 	a bank, as defined in the Investment Advisors Act of 1940; or
	 
	 	(c)	 	an insurance company qualified to manage, acquire, or dispose of Plan assets
under the laws of more than one (1) state.

	 	 	 	Any Investment Manager shall acknowledge in writing to the party making the appointment and
to the Trustee that it is a fiduciary respecting the Plan. During any period when the
Investment Manager is appointed and serving, and regarding those assets in the Plan over
which the Investment Manager exercises investment management authority, the Trustee’s
responsibility shall be limited to holding assets as a custodian, providing accounting
services, disbursing benefits as authorized, and executing investment instructions only as
directed by the Investment Manager. Any certificates or other instrument duly signed by the
Investment Manager (or the authorized representative of the Investment Manager), purporting
to evidence any instruction, direction or order of the Investment Manager regarding the
investment of those assets of the Plan over which the Investment Manager has investment
management authority, shall be accepted by the Trustee as conclusive proof thereof. The
Trustee also shall be fully protected in acting in good faith on any notice, instruction,
direction, order, certificate, opinion, letter, telegram or other document believed by the
Trustee to be genuine and to be from the Investment Manager (or the authorized
representative of the Investment Manager). The Trustee shall not be liable for any action
taken or omitted by the Investment Manager or for any mistakes of judgment or other action
made, taken or omitted by the Trustee in good faith on direction of the Investment Manager.

11.9. Annual Accounting

	 	 	 	As soon as administratively feasible after the Accounting Date of each Plan Year, but within
the time prescribed by ERISA and the applicable Labor regulations and at least annually, the
Committee shall advise each Participant, Former Participant and Beneficiary for whom
Individual Accounts are held under this Plan of the then balance in the Participant’s
Individual Accounts and the other information ERISA requires to be furnished. No Participant
except a member of the Committee shall have the right to inspect the records reflecting the
Individual Accounts of any other Participant.

37

 

11.10. Funding Policy

	 	 	 	The Committee will review, not less often than annually, all pertinent Employee information
and Plan data to establish the funding policy of the Plan and to determine the appropriate
methods of carrying out the Plan’s objectives. The Committee must communicate periodically,
as it deems appropriate, to the Trustee and to any Plan Investment Manager the Plan’s
short-term and long-term financial needs so investment policy can be coordinated with Plan
financial requirements.

11.11. Indemnification

	 	 	 	The Plan Sponsor, shall, to the extent permitted by law, indemnify and hold harmless each
member of the Committee and each Employee who is a fiduciary or a delegate of the Committee
against any and all expenses and liabilities arising out of his administrative functions or
fiduciary responsibilities, including any expenses and liabilities that are caused by or
result from an act or omission constituting the negligence of such individual in the
performance of such functions or responsibilities, but excluding expenses and liabilities
that are caused by or result from such individual’s own gross negligence or willful
misconduct. Expenses against which such individual shall be indemnified hereunder shall
include, without limitation, the amounts of any settlement or judgment, costs, counsel fees,
and related charges reasonably incurred in connection with a claim asserted or a proceeding
brought or settlement thereof.

* * * * *

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ARTICLE XII

Administration

	12.1.	 	Administrator Appointment
	 
	 	 	The Plan Sponsor shall be the Administrator of this Plan and shall be responsible for filing
all reporting and disclosure documents required by the Department of Labor and the Internal
Revenue Service in accordance with ERISA, the Code and the respective regulations. The
Employer may delegate any of its duties and responsibilities as Administrator to the
Committee. Service of process on the Plan or Trust may be obtained by personal service on
the Employer or any Committee member.
	 
	12.2.	 	Summary Plan Description
	 
	 	 	The Administrator shall furnish a summary plan description to each Participant within ninety
(90) days after becoming a Participant and to each Beneficiary receiving benefits under the
Plan within ninety (90) days after beginning to receive benefits. Every fifth (5th) year
after the Effective Date of the Plan, the Administrator shall furnish an updated summary
plan description, which integrates all amendments made within the five (5) year period, to
each Participant and Beneficiary receiving benefits. If no amendments have been made within
the five (5) year period, the Administrator shall furnish the updated summary plan
description only every tenth (10th) year. If there is a modification or change in the Plan,
the Administrator shall furnish to each Participant and each Beneficiary who is receiving
benefits, a summary description of the change or modification not later than two hundred ten
(210) days after the end of the Plan Year in which the change is adopted.
	 
	12.3.	 	Summary Annual Report
	 
	 	 	The Administrator shall furnish to each Participant and each Beneficiary receiving benefits
a summary of the Annual Return/Report of the Plan containing a statement of the Plan assets
and liabilities, receipts and disbursements and other information fairly summarizing the
Plan’s financial statement within two hundred ten (210) days after the close of each Plan
Year, or an extended period as may be permitted by the Secretary of Labor.
	 
	12.4.	 	Individual Benefit Statements
	 
	 	 	The Administrator shall furnish to any Participant or Beneficiary receiving benefits, who
requests in writing, a statement reporting the total benefits accrued and the Nonforfeitable
benefits, if any, which have accrued or the earliest date on which benefits will become
Nonforfeitable. For periods prior to January 1, 2007, a Participant or Beneficiary is not
entitled to receive the report described in this Section more than once in every twelve (12)
month period. Effective January 1, 2007, the Administrator shall provide this report to
each Participant or Beneficiary on a quarterly basis.

39

 

	12.5.	 	Copies of Additional Documents
	 
	 	 	Upon written request from a Participant or Beneficiary receiving benefits, the Administrator
shall furnish a copy of any one (1) or all of the following documents: the latest updated
summary plan description, the latest annual report, any terminal report, Trust agreement,
contract or other instruments under which the Plan was established or is operated. The
Administrator may make a reasonable charge to cover the cost of furnishing complete copies.
	 
	12.6.	 	Documents Available for Examination
	 
	 	 	Copies of the Plan description and the latest annual report, Trust agreement, contract or
other instruments under which the Plan was established or is operated shall be available for
examination at the principal office of the Employer by any Participant or Beneficiary
receiving benefits. Examination may be made during reasonable hours in person or by agent,
accountant or attorney.
	 
	12.7.	 	Notice of Participant Rights under ERISA
	 
	 	 	The Committee shall furnish to each Participant and to each Beneficiary receiving benefits
information on their rights under the Plan and how the rights may be protected by law.
	 
	12.8.	 	Notice to Participant on Participant Termination
	 
	 	 	The Administrator shall furnish a statement to a Participant who terminated Service with the
Employer for any of the reasons set forth in Articles VI through IX, describing the nature,
amount and form of the Nonforfeitable Account Balance, if any, to which the Participant is
entitled as soon as administratively feasible after the close of the Plan Year in which the
Participant terminated Service.
	 
	12.9.	 	Notice to Trustee on Participant Termination

	 	(a)	 	As soon as practicable after a Participant terminates Service with the Employer
for any of the reasons set forth in Article VII, the Committee shall give written
notice to the Trustee, including the following information and directions which may be
necessary or advisable under the circumstances:

	 	(i)	 	name and address of the Participant;
	 
	 	(ii)	 	reason the Participant terminated Service with the Employer;
	 
	 	(iii)	 	name and address of the Beneficiary or Beneficiaries of a
deceased Participant;
	 
	 	(iv)	 	Nonforfeitable percentage or amount to which the Participant is
entitled on termination of employment pursuant to Article VII; and

40

 

	 	(v)	 	time, manner and amount of payment to be made pursuant to the
Participant’s election under Article X.

	 	 	 	If a Former Participant or Beneficiary dies, the Committee shall give like notice to
the Trustee, but only if the Committee learns of the death.
	 
	 	(b)	 	At any time and from time to time after giving the notice provided under this
Section, the Committee may modify the original notice or any subsequent notice by a
further written notice or notices to the Trustee, but any action taken or payments made
by the Trustee pursuant to a prior notice shall not be affected by a subsequent notice.
	 
	 	(c)	 	A copy of each notice provided under this Section shall be mailed by the
Committee to the Participant, Former Participant or Beneficiary involved, but the
failure to send or receive the copy shall not affect the validity of any action taken
or payment made pursuant thereto.
	 
	 	(d)	 	Upon receipt of any notice provided under this Section, the Trustee shall
promptly take any action and make any payments directed in the notice. The Trustee may
rely on the information and directions in the notice absolutely and without question.
However, the Trustee may inform the Committee of any error or oversight which the
Trustee believes to exist in any notice.

	12.10.	 	Claim for Benefits
	 
	 	 	Normally, whenever a Participant or Beneficiary becomes entitled to benefits under this
Agreement, the Committee and the Trustee will automatically initiate procedures to provide
for the payment of the benefits. If a Participant or Beneficiary believes that he or she is
entitled to the payment of benefits under this Agreement and no action is forthcoming from
the Committee or the Trustee, then the Participant or Beneficiary may file a written claim
for benefits with the Committee or the Trustee.
	 
	12.11.	 	Appeal for Decision of Committee

	 	(a)	 	If any Participant or Beneficiary files a claim for benefits under this Plan
(“Claimant”) and the claim is denied in whole or in part, the Administrator shall give
notice of the decision to the Claimant in writing setting forth:

	 	(i)	 	the specific reasons for the denial;
	 
	 	(ii)	 	a specific reference to pertinent provisions of the Plan, if
any, upon which the denial is based;
	 
	 	(iii)	 	a description of any additional material or information
necessary for the Claimant to perfect the claim with an explanation of the
necessity therefor; and

41

 

	 	(iv)	 	that any appeal the Claimant wishes to make of the adverse
determination must be in writing to the Committee within ninety (90) days after
receipt of the Administrator’s notice of denial of benefits. The
Administrator’s notice must further advise the Claimant that failure to appeal
the action to the Committee in writing within the ninety (90) day period will
render the Committee’s determination final, binding and conclusive.

	 	(b)	 	The written notice shall be given to the Claimant as soon as administratively
feasible after the decision is made, but not later than sixty (60) days after the claim
is filed. The Claimant shall have the right to be represented, to review pertinent
documents and to present written and oral evidence.
	 
	 	(c)	 	If the Claimant should appeal to the Committee, the Claimant or the duly
authorized representative, may submit, in writing, issues and comments the Claimant or
the duly authorized representative considers pertinent. The Committee shall render the
decision on the review and shall set forth the specific reasons for the decision with
specific references to pertinent provisions. The Committee shall render the decision in
writing within sixty (60) days after receipt of the request for review unless special
circumstances, such as the need for a hearing, require an extension which shall not
exceed an additional sixty (60) days.

* * * * *

42

 

ARTICLE XIII

Investment of Trust Assets

	13.1.	 	Appointment of Trustee
	 
	 	 	The Employer shall determine the number of Trustees, shall appoint such Trustees, and may at
any time and from time to time increase or decrease the number of Trustees. The Employer may
remove any Trustee at any time and appoint a successor Trustee or Trustees or reduce the
number of Trustees (but not to less than one). The Trustee or Trustees shall have such
rights, powers and duties as shall from time to time be specified in or determined pursuant
to the Trust Agreement. The Trust Agreement shall form a part of the Plan, and the Trust
Assets shall be administered in accordance with the terms of the Plan and the Trust
Agreement.
	 
	13.2.	 	Investment of Accounts

	 	(a)	 	All Individual Accounts shall be invested and reinvested by the Trustee in
accordance with Participant direction, as provided herein.

	 	(i)	 	Each Participant, in his written
application for participation or through such other means as may be
authorized by the Administrator, if any, shall direct the Committee
and the Trustee as to which Investment Fund(s) he wishes to utilize
and the percentage of his Individual Accounts he wishes to have
invested in each fund.
	 
	 	(ii)	 	A Participant may change his designation of
the manner for investment of such Participant’s Individual Accounts,
or current contributions made on behalf of or by the Participant, or
both, to any other manner permitted hereunder. This change may be
made in writing to the Committee or through such other means as may
be authorized by the Administrator, if any. A change shall be
applicable as soon as administratively feasible following its
delivery to the Trustee. In order to comply with applicable federal
or state securities laws, the Committee may establish such rules with
respect to the change of investment designation by Participants as it
shall deem necessary or advisable to prevent possible violations of
such laws.
	 
	 	(iii)	 	To the extent a Participant fails to
direct the investment of all or any portion of his account, the
Committee shall direct the Trustee to invest such Participant’s
Individual Accounts in an age appropriate Investment Fund as more
particularly described in the Committee’s written investment policy.

43

 

The Administrator may permit a Participant to make an election under this Section through
any electronic or telephonic means authorized by the Committee.

	 	(b)	 	Investment Funds. The Committee will select the “Investment Funds”
available under the Plan in accordance with a separate written Investment Policy. The
Committee shall select and maintain such Investment Funds in accordance with the
Committee’s written Investment Policy. Such Investment Funds shall be communicated to
Participants in writing. All Individual Accounts shall be allocated by the Committee to
the Investment Funds specified in the separate written Investment Policy. Dividends,
interest and other distributions shall be reinvested in the same Investment Fund from
which they are received.
	 
	 	 	 	The assets of each Investment Fund shall be invested exclusively in shares of the
registered investment company designated by the Committee, provided that such shares
constitute securities described in ERISA Section 401(b)(1). Amounts invested in any
such Investment Fund in amounts estimated by the Trustee to be needed for cash
withdrawals, or in amounts too small to be reasonably invested, or in amounts which
the Trustee deems to be in the best interest of the Participants, may be retained by
the Trustee in cash or invested temporarily.

	13.3.	 	Investment in Employer Securities

	 	(a)	 	The Plan is specifically authorized to acquire and hold up to 100% of its
assets of the Employer’s Common Stock (“Company Stock”) so long as the Common Stock are
a “qualifying employer security,” as such term is defined in Section 407(d)(e) of
ERISA. The Committee shall implement this Section 13.3 by directing the Plan’s Trustee
to establish a company stock fund (the “Stock Fund”) which will hold shares of Company
Stock. Investments will be made in the Stock Fund through the issuance of units in the
Stock Fund, the value of which shall be established at the end of each day that shares
of Company Stock are sold on the NASDAQ exchange. All purchases and sales of units in
the Stock Fund will be made based on the Stock Fund’s closing value as of the close of
business on the date a transaction occurs. The Stock Fund shall retain an appropriate
level of cash and cash equivalent investments to permit Plan participants to sell some
or all of the interests in the Stock Fund.
	 
	 	(b)	 	During any period in which the Participants are permitted to direct the Trustee
to sell shares of Company Stock that are allocated to their Accounts, the Committee
shall determine whether any portion of the Stock Fund may be “restricted shares”
subject to trading restrictions under Rule 144 promulgated under the Securities Act of
1933. The portion of the Stock Fund and a proportionate portion of the underlying
shares of Company Stock held by the Stock Fund, that are so determined by the Committee
to be subject to such restrictions shall be classified as “Restricted shares” and may
only be sold pursuant to Subsection 13.3 below.
	 
	 	(c)	 	The Company shall purchase any and all Restricted Shares from the Plan’s Trust
on the first trading date immediately following the date on which a Participant has

44

 

	 	 	 	elected to liquidate a restricted portion of the Stock Fund. This sale of such
Restricted Shares shall be made pursuant to the following steps;

	 	(i)	 	The Committee establish a procedure that will identify the
portion of the Stock Fund which constitutes Restricted Shares. This
identification will be performed not less often than once each calendar
quarter.
	 
	 	(ii)	 	The Trustee shall sell all such Restricted Shares to the
Company that are required to liquidate a portion of the Stock Fund as a result
of a Participant’s direction. The effective date of such sale shall be the
trading day immediately following the date the Participant elected to sell an
interest in the Stock Fund by a Participant shall occur on the trading date on
which the Participant elects to sell some or all of his interest in the Stock
Fund (or, if the date the election is made is a date where trading in Company
Stock does not occur, the immediately following trading date).
	 
	 	(iii)	 	The purchase price for the Restricted Shares sold under
Paragraph (ii) above shall be not less than adequate consideration for such
shares of Company Stock on the date the purchase occurs. For this purpose, the
“adequate consideration” shall be equal to the greater of (i) the weighted
average of the actual sales prices obtained by the Trust in connection with
other sales of shares of Company Stock sold on the NASDAQ exchange on the date
the sale occurs, and (ii) the volume weighted average price for all shares of
Dell’s common stock sold on the NASDAQ for such trading date.

	 	(d)	 	No purchase of shares of Company Stock shall be made unless the Company’s
common stock is then traded on the NASDAQ exchange.

	13.4.	 	Income and Expenses

	 	(a)	 	The dividends, capital gains distributions, and other earnings received on an
Investment Fund that is specifically credited to a Participant’s or Former
Participant’s separate Individual Accounts under the Plan shall be allocated to such
separate Individual Accounts and immediately reinvested, to the extent practicable, in
additional shares of such Investment Fund.
	 
	 	(b)	 	Fees charged by the Trustee and other expenses of operating the Trust shall be
paid by the Employers or, in the absence of such payments (which are not obligatory),
out of the general Trust assets and charged to the separate Individual Accounts of all
Participants and Former Participants under the Plan in the ratio that the fair market
value of each such Individual Account bears to the total fair market value of all
separate Individual Accounts; provided, however, that such amounts shall be adjusted to
reflect any revenue sharing payments received from an Investment Fund. However,
notwithstanding the above, any brokerage fees, commissions, taxes and other costs
incurred by the Trust (and not reimbursed by the Employer with respect to the purchase,
sale, or distribution of Employer

45

 

	 	 	 	Securities pursuant to an inter-fund transfer in connection with an in-service
withdrawal or a distribution made at the direction of a Participant, Former
Participant, or Beneficiary shall be charged to and paid by such Participant’s,
Former Participant’s, or Beneficiary’s separate Individual Accounts.

	13.5.	 	Exclusive Benefit
	 
	 	 	The Plan and the Trust are established and shall be maintained for the exclusive benefit of
the Participants, Former Participants and their Beneficiaries. Subject to the exceptions
expressly set forth in the Plan or the Trust Agreement, no part of the Trust Assets may ever
revert to an Employer or be used for or diverted to purposes other than the exclusive
benefit of the Participants, Former Participants and Beneficiaries.
	 
	13.6.	 	Valuation
	 
	 	 	The value of each Participant’s Individual Accounts shall be determined as of each Valuation
Date, on the basis of the fair market value of the assets allocated to each such
Participant’s Individual Accounts, as appraised by the Trustee.

	 	(a)	 	As of each Valuation Date, the Committee shall determine the fair market value
of each Investment Fund being administered by the Trustee. With respect to each such
Investment Fund, the Committee shall determine (i) the change in value between the
current Valuation Date and the then last preceding Valuation Date, (ii) the net gain or
loss resulting from expenses paid (including fees and expenses, if any, which are to be
charged to such Investment Fund), and (iii) realized and unrealized gains and losses.
	 
	 	 	 	The transfer of funds to or from an Investment Fund pursuant to Section 13.2(a) and
payments, distributions and withdrawals from an Investment Fund to provide benefits
under the Plan for Participants or Beneficiaries shall not be deemed to be gains,
expenses or losses of an Investment Fund.
	 
	 	 	 	As of each Valuation Date, the Committee shall allocate the net gain or loss of each
Investment Fund on the Valuation Date to the accounts of Participants participating
in such Investment Fund on such Valuation Date. Contributions and rollovers received
and credited to Participant’s Individual Accounts as of such Valuation Date, or as
of an earlier date since the last preceding Valuation Date shall not be considered
in allocating gains or losses allocated to Participants’ accounts.
	 
	 	(b)	 	The reasonable and equitable decision of the Committee as to the value of each
Investment Fund, and of any Individual Account as of each Valuation Date shall be
conclusive and binding upon all persons having any interest, direct or indirect, in the
Investment Funds or in any account.

	13.7.	 	Investment Policy 
	 
	 	 	The Committee shall be obliged only to use good faith and to exercise its honest

46

 

	 	 	judgment as to what investments are from time to time in the best interests of the Trust
Fund and the Participants and their Beneficiaries. Furthermore, the Committee may instruct
the Trustee to hold any portion of the Trust Fund in cash and uninvested whenever it deems
such holding necessary or advisable.
	 
	13.8.	 	Valuation of the Trust Fund
	 
	 	 	The Trustee shall value the Trust Fund as of each Accounting Date to determine the fair
market value of each Participant’s Account Balance as adjusted and credited under Articles
IV and V; and on such other dates as directed by the Committee.

* * * * *

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ARTICLE XIV

Participant Loans

	14.1.	 	General Rules Regarding the Participant Loan Program

	 	(a)	 	General. Unless otherwise provided by the Plan Sponsor, the Plan
authorizes the Trustee to make loans on a nondiscriminatory basis to a Participant or
Beneficiary in accordance with the written loan policy established by the Committee,
provided (i) the loan policy satisfies the requirements of Subsection 14.1(b); (ii)
loans are available to all Participants and Beneficiaries on a reasonably equivalent
basis and are not available in a greater amount for Highly Compensated Employees than
for other Employees; (iii) any loan is adequately secured and bears a reasonable rate
of interest; (iv) the loan provides for repayment within a specified time; (v) the
default provisions of the note prohibit offset of the Participant’s Nonforfeitable
Account Balance prior to the time the Trustee otherwise would distribute the
Participant’s Nonforfeitable Account Balance; and (vii) the loan otherwise conforms to
the exemption provided by Code Section 4975(d)(1). If the joint and survivor annuity
requirements of Section 9.6 apply to a Participant, the Participant may not pledge any
portion of his or her Account Balance as security for a loan unless, within the ninety
(90) day period ending on the date the pledge becomes effective, the Participant’s
spouse, if any, consents (in a manner described in Section 9.6 other than the
requirement relating to the consent of a subsequent spouse) to the security, or, by a
separate consent, to an increase in the amount of security.
	 
	 	(b)	 	Loan Policy. If the Committee adopts a loan policy, pursuant to
Subsection 11.3(m), the loan policy must be a written document and must include (i) the
identity of the person or positions authorized to administer the participant loan
program; (ii) a procedure for applying for the loan; (iii) the criteria for approving
or denying a loan; (iv) the limitations, if any, on the types and amounts of loans
available; (v) the procedure for determining a reasonable rate of interest; (vi) the
types of collateral which may secure the loan; and (vii) the events constituting
default and the steps the Plan will take to preserve Plan assets in the event of
default. This Section specifically incorporates any written loan policy adopted by the
Committee as part of this Plan.
	 
	 	(c)	 	Limitations. The following limitations shall apply to the Participant
Loan Program:

	 	(i)	 	This Plan shall not provide loans in any amount that would
exceed the applicable dollar limitations contained in Code Section 72(p)(2)(A),
which limitations shall be incorporated into the Plan’s loan policy and shall
be treated as being applicable under this Section.

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	 	(ii)	 	No loan shall be provided to a Participant unless such
Participant is on the U.S. payroll of the Employer or a Subsidiary when the
loan is initiated. A Participant who receives a loan and subsequently ceases
to be on a U.S. payroll may continue to make loan payments by manual check.
	 
	 	(iii)	 	A Participant may have no more than two (2) loans outstanding
at any one time.
	 
	 	(iv)	 	The Plan generally will not accept rollovers of loans;
provided, however, that the Benefits Administration Committee (or its delegate)
may authorize the Trustee to allow loan rollovers from another employer’s
qualified retirement plan during a fixed period of time following the
acquisition of a trade or business from the sponsor of such Plan. A rollover
of a loan fro another employer’s qualified retirement Plan does not permit a
Participant to have more than two loans outstanding at any one time.

	 	(d)	 	Special Rules under USERRA for Loan Repayments. Loan repayments will be
suspended under this Plan, as permitted under Code Section 414(u)(4), on behalf of
those Participants who are on an Authorized Leave of Absence pursuant to qualified
military service.

* * * * *

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ARTICLE XV

Rollovers, Mergers, Direct Transfers

	15.1.	 	Participant Rollover Contributions

	 	 	Any Participant who has the Employer’s written consent and who has filed with the Trustee
the form prescribed by the Committee may contribute cash the Trust other than as a voluntary
contribution if the contribution is a Rollover Contribution which the Code permits an
Employee to transfer either directly or indirectly from one qualified plan to another
qualified plan. Before accepting a Rollover Contribution, the Trustee may require an
Employee to furnish satisfactory evidence that the proposed transfer is in fact a Rollover
Contribution which the Code permits an Employee to make to a qualified plan. The Employer
will not accept a Participant’s Rollover Contribution arising from an annuity contract
described in Code Section 403(b) all or a portion of the assets of which are attributable to
the Participant’s deductible or nondeductible contributions. In addition, the Employer will
not accept Rollover Contributions which include voluntary after-tax contributions. A
Rollover Contribution is not an Annual Addition.
	 
	 	 	An eligible Employee, prior to satisfying the Plan’s conditions, may make a Rollover
Contribution to the Trust to the same extent and in the same manner as a Participant. If an
Employee makes a Rollover Contribution to the Trust prior to satisfying the Plan’s
eligibility conditions, the Committee and Trustee must treat the Employee as a Participant
for all purposes of the Plan except the Employee is not a Participant for purposes of
sharing in Employer contributions or Participant Forfeitures under the Plan until the
Employee actually becomes a Participant in the Plan. If the Employee has a Severance from
Employment prior to becoming a Participant, the Trustee will distribute the Rollover Account
to the Participant as if it were an Employer Contribution Account.
	 
	 	 	For any Rollover Contribution, the following requirements shall be met:

	 	(a)	 	The Committee shall maintain a Participant’s Rollover Contributions in a
separate Rollover Account;
	 
	 	(b)	 	Except with respect to a Plan asset under the control or direction of a
properly appointed Investment Manager or with respect to a Plan asset properly subject
to Employer, Participant or Committee direction of investment, the Trustee will invest
the Rollover Contribution in a segregated investment Rollover Account for the
Participant’s sole benefit unless the Trustee, in its sole discretion, agrees to invest
the Rollover Contribution as part of the Trust Fund. The Trustee will not have any
investment responsibility for a Participant’s segregated Rollover Account. The
Participant, however, from time to time, may direct the Trustee in writing on the
investment of the segregated Rollover Account in property, or property interests, of
any kind, real, personal or mixed; however, the Participant may not direct the Trustee
to make loans to the Employer. A Participant’s segregated Rollover Account alone will
bear any extraordinary expenses resulting

50

 

	 	 	 	from investments made at the direction of the Participant. As of the Accounting
Date, or other Valuation Date, for each Plan Year, the Committee will allocate and
credit the net income or charge the net loss from a Participant’s segregated
Rollover Account and credit or charge respectively the increase or decrease in the
fair market value of the assets of a segregated Rollover Account solely to that
Rollover Account. The Trustee is not liable nor responsible for any loss resulting
to any Beneficiary, nor to any Participant, because of any sale or investment made
or other action taken pursuant to and in accordance with the direction of the
Participant. In all other respects, the Trustee will hold, administer and distribute
a Rollover Contribution in the same manner as any Employer contribution made to the
Trust Fund.
	 
	 	(c)	 	A Participant’s Rollover Contributions shall not be forfeitable nor reduce in
any way the obligations of the Employer under this Agreement.
	 
	 	(d)	 	If any portion of a Participant’s Rollover Contribution is attributable to
Salary Reduction Contributions made by the Participant to the transferor plan, this
Plan shall continue the distributions restrictions described in Section 6.2(b) that
apply to such amounts.

	15.2.	 	Merger and Direct Transfer

	 	 	To the extent directed by the Committee, the Trustee possesses the specific authority to
enter into merger agreements or direct transfer of assets agreements with the trustees of
other retirement plans described in Code Section 401(a), including an Elective Transfer
defined in Section 15.3, and to accept the direct transfer of plan assets or to transfer
plan assets, as a party to any agreement. Further, the Trustee may permit the transfer of
plan assets to an individual retirement account or an individual retirement annuity.
However, the Trustee, before any merger or direct transfer is consummated, shall be
satisfied that the holding of any transferred assets is permitted by the transferee trusts.
In addition, if the transferee plan contains a cash or deferred arrangement, the Trustee
must reasonably determine, prior to permitting such a transfer, that the transferee plan
will continue the distribution restrictions of Code Sections 401(k)(2) and 401(k)(10) on any
transferred amounts that are attributable to Salary Reduction Contributions of Participants.
When the Trustee is so satisfied, the Trustee shall accept the direct transfer of plan
assets or shall cause to be transferred the assets directed to be transferred and as
appropriate shall direct the insurance company to transfer any contracts held by it to the
new Trustee. The Trustee may accept a direct transfer of plan assets on behalf of an
Employee prior to the date the Employee satisfies the Plan’s eligibility conditions. If the
Trustee accepts a direct transfer of plan assets, the Committee and Trustee must treat the
Employee as a Participant for all purposes of the Plan except that the Employee is not a
Participant for purposes of sharing in Employer contributions or Participant Forfeitures
under the Plan until the Employee actually becomes a Participant in the Plan.
	 
	 	 	The Trustee may not consent to, or be a party to, any merger or consolidation with another
plan or to a transfer of assets and liabilities to another plan, unless, immediately after
the merger, consolidation or transfer the surviving plan provides each Participant a

51

 

	 	 	benefit equal to or greater than the benefit each Participant would have received had the
plan terminated immediately before the merger, consolidation or transfer.

	15.3.	 	Rules Concerning Certain Rollovers, Mergers and Direct Transfers

	 	 	The Trustee will hold, administer and distribute the transferred assets as a part of the
Trust Fund and the Trustee must maintain a separate Employer Contribution Account for the
benefit of the Employee on whose behalf the Trustee accepted the transfer to reflect the
value of the transferred assets.
	 
	 	 	The Plan will preserve all Code Section 411(d)(6) protected benefits with respect to those
transferred assets, in the manner described in Subsection 10.2(c)(iii).
	 
	 	 	If the Plan receives a direct transfer, by merger or otherwise, of Salary Reduction
Contributions, or amounts treated as Salary Reduction Contributions, under a Plan with a
Code Section 401(k) arrangement, the distribution restrictions of Code Sections 401(k)(2)
and 401(k)(10) continue to apply to those transferred Salary Reduction Contributions.

* * * * *

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ARTICLE XVI

Top Heavy Provisions

	16.1.	 	Top-Heavy Plan Status/Super Top-Heavy Plan Status

	 	 	For purposes of determining Top-Heavy Plan status/super Top-Heavy Plan status, each
Participating Employer and its Related Employers shall be deemed to maintain a separate
plan. Related Employers shall be considered a single employer for purposes of applying the
limitations of this Section. However, Participating Employers who are not Related Employers,
but receive the services of Employees of the Employer under an employee leasing arrangement
shall be treated as separate employers for purposes of these top-heavy rules.
	 
	 	 	A Plan shall be a Top-Heavy Plan in any Plan Year in which, as of the Determination Date,
(i) the Present Value of Accrued Benefits of Key Employees, or (ii) the sum of the Aggregate
Accounts of Key Employees of any plan of an Aggregation Group, exceeds sixty percent (60%)
of the Present Value of Accrued Benefits or Aggregate Accounts of all Participants under
this Plan and any plan of an Aggregation Group.
	 
	 	 	If any Participant is a Non-Key Employee for any Plan Year, but the Participant was a Key
Employee for any prior Plan Year, the Participant’s Aggregate Account balance shall not be
taken into account in determining whether this Plan is a Top-Heavy Plan (or whether any
Aggregation Group which includes this Plan is a Top-Heavy Group) as further defined in Code
Section 416(g) and the applicable Treasury Regulations.
	 
	 	 	For purposes of determining Top-Heavy status, the following definitions shall apply:

	 	(a)	 	Aggregate Account means, as of the Determination Date, the sum of:

	 	(i)	 	the Participant Contribution Account and Employer Contribution
Account balances as of the most recent Valuation Date occurring within a twelve
(12) month period ending on the Determination Date;
	 
	 	(ii)	 	the contributions that would be allocated as of a date not
later than the Determination Date, even though those amounts are not yet made
or required to be made;
	 
	 	(iii)	 	any plan distributions made during the Determination Period
(however, in the case of distributions made after the Valuation Date and prior
to the Determination Date, such distributions are not included as distributions
for Top-Heavy purposes to the extent that the distributions are already
included in the Participant’s Aggregate Account balance as of the Valuation
Date);
	 
	 	(iv)	 	any Employee contributions, whether voluntary or mandatory;

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	 	(v)	 	Regarding unrelated rollovers and plan-to-plan transfers (those
which are (A) initiated by the Employee and (B) made from a plan maintained by
one employer to a plan maintained by another employer), if this Plan provides
for rollovers or plan-to-plan transfers, an unrelated rollover or plan-to-plan
transfer shall be considered as a distribution for purposes of this Section. If
this Plan is the plan accepting an unrelated rollover or plan-to-plan transfer,
an unrelated rollover or plan-to-plan transfer shall not be considered as part
of the Participant’s Aggregate Account balance;
	 
	 	(vi)	 	Regarding related rollovers and plan-to-plan transfers (those
either (A) not initiated by the Employee or (B) made to a plan maintained by
the same Employer), if this Plan provides for rollovers or plan-to-plan
transfers, a related rollover or plan-to-plan transfer shall be considered as a
distribution for purposes of this Section. If this Plan is the plan accepting a
related rollover or plan-to-plan transfer, a related rollover or plan-to-plan
transfer shall be considered as part of the Participant’s Aggregate Account
balance, irrespective of the date on which the related rollover or plan-to-plan
transfer is accepted; and
	 
	 	(vii)	 	The accounts of Participants who are Leased Employees of
Participating Employers, for purposes of these top-heavy rules, shall be
treated as being maintained under a separate plan by each respective
Participating Employer.

	 	(b)	 	Aggregation Group means either a Required Aggregation Group or a
Permissive Aggregation Group as hereinafter determined.

	 	(i)	 	Required Aggregation Group means the group of plans composed of
(A) each plan of the Employer in which a Key Employee is a participant or
participated at any time during the Determination Period, regardless of whether
the plan has terminated; and (B) each other plan of the Employer which enables
any plan in which a Key Employee participates to meet the requirements of Code
Sections 401(a)(4) or 410, which shall be aggregated.
	 
	 	 	 	In the case of a Required Aggregation Group, each plan in the group will be
considered a Top-Heavy Plan if the Required Aggregation Group is a Top-Heavy
Group. No plan in the Required Aggregation Group will be considered a
Top-Heavy Plan if the Required Aggregation Group is not a Top-Heavy Group.
	 
	 	(ii)	 	Permissive Aggregation Group means the Required
Aggregation Group plus any other plan not required to be included in the
Required Aggregation Group, provided the resulting group, taken as a whole,
would continue to satisfy Code Sections 401(a)(4) and 410.

54

 

	 	 	 	In the case of a Permissive Aggregation Group, only a plan that is part of
the Required Aggregation Group will be considered a Top-Heavy Plan if the
Permissive Aggregation Group is a Top-Heavy Group. No plan in the Permissive
Aggregation Group will be considered a Top-Heavy Plan if the Permissive
Aggregation Group is not a Top-Heavy Group.
	 
	 	(iii)	 	Only those plans of the Employer in which the Determination
Dates fall within the same calendar year shall be aggregated to determine
whether the plans are Top-Heavy Plans.

	 	(c)	 	Determination Date means for any Plan Year (i) the last day of the
preceding Plan Year, or (ii) in the case of the first Plan Year of the Plan, the last
day of the first Plan Year.
	 
	 	(d)	 	Determination Period means, pursuant to Appendix A.1.4(b), the one (1)
year period ending on the Determination Date.
	 
	 	(e)	 	Employer means the Plan Sponsor and any successor corporation or
business organization which may be substituted for the Plan Sponsor under this
Agreement. Related Employers shall be considered a single employer for purposes of
applying the limitations of this Section. However, Participating Employers who are not
Related Employers, but receive the services of Employees of the Plan Sponsor under an
employee leasing arrangement shall be treated as separate employers for purposes of
these top-heavy rules.
	 
	 	(f)	 	Excluded Employees means any Employee who has not performed any Service
for the Employer during the one (1) year period ending on the Determination Date.
Excluded Employees shall be excluded for purposes of a Top-Heavy determination.
	 
	 	(g)	 	Key Employee means, pursuant to Appendix A.1.4(a), any Employee or
Former Employee, or Beneficiary of the Employee, who, for any Plan Year in the
Determination Period is:

	 	(i)	 	An officer of the Employer having annual compensation from the
Employer and any Related Employer greater than $130,000 (as adjusted under Code
Section 416(i)(1) for Plan Years beginning after December 31, 2002;
	 
	 	(ii)	 	A Five Percent Owner; or
	 
	 	(iii)	 	A One Percent Owner of the Employer or a Participating
Employer having annual compensation from the Employer of more than $150,000.
(One Percent Owner means any person having annual compensation from the
Employer and any Related Employer in excess of $150,000 and owning, or
considered as owning within the meaning of Code Section 318, more than one
percent (1%) of the outstanding stock of the Employer or stock possessing more
than one percent (1%) of the total combined voting

55

 

	 	 	 	power of all stock of the Employer; or in the case of an unincorporated
business, any person who owns more than one percent (1%) of the capital or
profits interest in the Employer.)
	 
	 	(iv)	 	Notwithstanding the foregoing, Key Employee shall have the
meaning set forth in Code Section 416(i), as amended.
	 
	 	(v)	 	For purposes of determining whether an Employee or Former
Employee is an officer under this Subsection (g), an officer of the Employer
shall have the meaning set forth in the regulations under Code Section 416(i).
	 
	 	(vi)	 	For purposes of this Section, annual compensation means
“Compensation” as determined under the definition of Highly Compensated
Employee in Section 1.27.
	 
	 	(vii)	 	For purposes of determining ownership hereunder, entities that
would otherwise be aggregated as Related Employers shall be treated as separate
entities.

	 	(h)	 	Non-Key Employee means any Employee or Former Employee, or Beneficiary
of the Employee, who is not a Key Employee.
	 
	 	(i)	 	Present Value of Accrued Benefit. Solely for the purpose of determining
if the Plan, or any other plan included in a Required Aggregation Group of which this
Plan is a part, is a Top-Heavy Plan, the Accrued Benefit of a Non-Key Employee shall be
determined under (i) the method, if any, that uniformly applies for accrual purposes
under all plans maintained by the Related Employers, or (ii) if there is no uniform
method, in accordance with the slowest accrual rate permitted under the fractional
accrual method described in Code Section 411(b)(1)(C). To calculate the Present Value
of Accrued Benefits from a defined benefit plan, the Committee will use the actuarial
assumptions for interest and mortality only, prescribed by the defined benefit plan(s)
to value benefits for Top-Heavy purposes. If an aggregated plan does not have a
Valuation Date coinciding with the Determination Date, the Committee must value the
Accrued Benefits in the aggregated plan as of the most recent Valuation Date falling
within the twelve (12) month period ending on the Determination Date, except as Code
Section 416 and applicable Treasury Regulations require for the first and second plan
year of a defined benefit plan. The Committee will determine whether a plan is
Top-Heavy by referring to Determination Dates that fall within the same calendar year.
	 
	 	 	 	Notwithstanding the foregoing, pursuant to Appendix A.1.4(b)(i) the Present Values
of Accrued Benefits and the amounts of Account Balances of an Employee as of the
Determination Date shall be increased by the distributions made with respect to the
Employee under the Plan and any plan aggregated with the Plan under Code Section
416(g)(2) during the one (1) year period ending on the Determination Date. The
preceding sentence shall also apply to distributions under a terminated plan which,
had it not been terminated, would have been

56

 

	 	 	 	aggregated with the Plan under Code Section 416(g)(2)(A)(i). In the case of a
distribution made for a reason other than termination of employment, death or Total
and Permanent Disability, this provision shall be applied by substituting “5-year
period” for “1-year period”.
	 
	 	 	 	Pursuant to Appendix A.1.4(b)(ii), the accrued benefits and accounts of any
individual who has not performed services for the Employer during the 1-year period
ending on the determination date shall not be taken into account.

	 	(j)	 	Top-Heavy Group means an Aggregation Group in which, as of the
Determination Date, the sum of:

	 	(i)	 	the Present Value of Accrued Benefits of Key Employees under
all defined benefit plans included in the group;
	 
	 	(ii)	 	the Aggregate Accounts of Key Employees under all defined
contribution plans included in the group; and
	 
	 	(iii)	 	exceeds sixty percent (60%) of a similar sum determined for
all Participants.

	16.2.	 	Top-Heavy Allocations

	 	(a)	 	Minimum Allocation. Notwithstanding the foregoing, for any Plan Year in
which the Plan is determined to be Top-Heavy, the amount of Employer contributions and
Forfeitures allocated to the Individual Accounts of each Non-Key Employee shall be
equal to the lesser of three percent (3%) of each Non-Key Employee’s Compensation or
the highest contribution rate for the Plan Year made on behalf of any Key Employee.
However, if a defined benefit plan maintained by the Employer which benefits a Key
Employee depends on this Plan to satisfy the nondiscrimination rules of Code Section
401(a)(4) or the coverage rules of Code Section 410(b) (or another plan benefiting the
Key Employee so depends on the defined benefit plan), the top heavy minimum allocation
is three percent (3%) of the Non-Key Employee’s Compensation regardless of the
contribution rate for the Key Employee. The minimum allocation is determined without
any reference to any Social Security contribution. This minimum allocation shall be
made even though, under other Plan provisions, the Participant would not otherwise be
entitled to receive an allocation, or would have received a lesser allocation for the
year because of (i) the Participant’s failure to complete 1,000 Hours of Service (or
any equivalent provided herein), (ii) the Participant’s failure to make a mandatory
employee contribution to the Plan (as provided herein), or (iii) the Participant
received compensation less than a stated amount.
	 
	 	 	 	Pursuant to Appendix A.1.4(c), Employer Matching Contributions, including Safe
Harbor Matching Contributions, shall be taken into account for purposes of
satisfying the minimum contribution requirements of Code Section 416(c)(2) and the
Plan. The preceding sentence shall apply with respect to matching contributions
under the Plan or, if the Plan provides that the minimum

57

 

	 	 	 	contribution requirement shall be met in another plan, such other plan. Employer
Matching Contributions, including Safe Harbor Matching Contributions that are used
to satisfy the minimum contribution requirements shall be treated as matching
contributions for purposes of the Actual Contribution Percentage Test and other
requirements of Code Section 401(m).
	 
	 	(b)	 	Compensation. For purposes of this Section, Compensation means Annual
Compensation except (i) Compensation does not include Voluntary After Tax
Contributions, and (ii) any exclusions from Annual Compensation (other than the
exclusion of Voluntary After Tax Contributions and the exclusions described in clauses
(i) through (v) of the definition of Annual Compensation in Article I, if any) do not
apply. Notwithstanding the definition of Annual Compensation in Article I, the period
preceding a Participant’s Entry Date shall be included in determining the minimum
top-heavy allocation provided by this Section.
	 
	 	(c)	 	Contribution Rate. For purposes of this Section, a Participant’s
contribution rate is the sum of Employer contributions (not including Employer
contributions to Social Security) and Forfeitures allocated to the Participant’s
Individual Accounts for the Plan Year divided by his or her Compensation for the entire
Plan Year. To determine a Participant’s contribution rate, the Committee must treat all
qualified top-heavy defined contribution plans maintained by the Employer (or by any
Related Employers) as a single plan. 
	 
	 	 	 	Notwithstanding the preceding, if this plan is a plan which includes a cash or
deferred arrangement, then the following rules apply:

	 	(i)	 	Salary Reduction Contributions on behalf of Key Employees are
taken into account in determining the minimum required contribution under Code
Section 416(c)(2). However, Salary Reduction Contributions on behalf of
Employees other than Key Employees may not be treated as Employer contributions
for the minimum contribution or benefit requirement of Code Section 416.
	 
	 	(ii)	 	Matching Contributions allocated to Key Employees are treated
as Employer contributions for determining the minimum contribution or benefit
under Code Section 416. However, if a plan utilizes Matching Contributions
allocated to Employees other than Key Employees as Salary Reduction
Contributions to satisfy the minimum contribution requirement, the Matching
Contributions are not treated as Matching Contributions for applying the
requirements of Code Section 401(k) and 401(m).

	 	(d)	 	Participant Entitled to Top-Heavy Minimum Allocation. The minimum
allocation under this Section shall not be provided to any Participant who was not
employed by the Employer on the last day of the Plan Year. The provisions of this
Section shall not apply to any Participant to the extent the Participant is covered
under any other plan or plans of the Employer, Participating Employer, and any Related
Employer under which the minimum allocation or benefit requirements under

58

 

	 	 	 	Code Section 416(c)(1) or (c)(2) are met for the Participant. Notwithstanding any
limitations within the Plan’s definition of Annual Compensation, amounts earned
during the period preceding a Participant’s Entry Date shall be included for
purposes of determining the minimum top-heavy allocation provided by this Section.
	 
	 	(e)	 	Compliance. The Plan will satisfy the top-heavy minimum allocation
under this Section. The Committee first will allocate the Employer contributions for
the Plan Year pursuant to the allocation formula under Section 5.2. The Employer then
will contribute an additional amount for the Individual Accounts of any Participant
entitled under this Section to a top-heavy minimum allocation and whose contribution
rate for the Plan Year, under this Plan and any other plan aggregated under this
Section, is less than the top-heavy minimum allocation. The additional amount is the
amount necessary to increase the Participant’s contribution rate to the top-heavy
minimum allocation. The Committee will allocate the additional contribution to the
Individual Accounts of the Participant on whose behalf the Employer makes the
contribution.

* * * * *

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ARTICLE XVII

Exclusive Benefit

	17.1.	 	Exclusive Benefit
	 
	 	 	Except as provided under this Article and Article III, the Employer has no beneficial
interest in any asset of the Trust and no part of any asset in the Trust may ever revert to
or be repaid to an Employer, either directly or indirectly. Further, prior to the
satisfaction of all liabilities with respect to the Participants and their Beneficiaries
under the Plan, no part of the corpus or income of the Trust Fund, or any asset of the
Trust, may be used for, or diverted to, purposes other than the exclusive benefit of the
Participants or their Beneficiaries. No amendment or revocation by the Employer of this
Section may cause or permit any portion of the Trust Fund to revert to or become a property
of the Employer.
	 
	17.2.	 	Denial of Request for Initial Approval
	 
	 	 	Any contribution to the Trust Fund associated with this Plan is conditioned on initial
qualification of the Plan under applicable Code Sections 401(a), 403(a) or 405(a) and of the
exemption of the Trust created under the Plan under Code Section 501(a). If the Commissioner
of the Internal Revenue Service, upon the Employer’s request for initial approval of this
Plan and Trust, determines that the Plan is not qualified or the Trust is not exempt, then
the Trustee may return to the Employer, within one (1) year after the date of final
disposition of the Employer’s request for initial approval, any contribution made by the
Employer, and any increment attributable to the contribution.
	 
	17.3.	 	Mistake of Fact
	 
	 	 	Notwithstanding any contrary provision in this Agreement, if a contribution is made by an
Employer by a mistake of fact, the contribution may be returned to the Employer within one
(1) year after the payment of the contribution. The amount of the mistaken contribution is
equal to the excess of (i) the amount contributed over (ii) the amount that would have been
contributed had there not occurred a mistake of fact. Earnings attributable to mistaken
contributions may not be returned to the Employer, but losses attributable thereto shall
reduce the amount to be returned.
	 
	17.4.	 	Disallowance of Deduction
	 
	 	 	Notwithstanding any contrary provision in this Agreement, any contributions by the Employer
to the Plan and Trust are conditioned on the deductibility of the contribution by the
Employer under the Code. To the extent any deduction is disallowed, the Employer, within one
(1) year following a final determination of the disallowance, whether by agreement with the
Internal Revenue Service or by final decision in a court of competent jurisdiction, may
demand repayment of the disallowed contribution, and the Trustee shall return the
contribution within one (1) year following the disallowance. Earnings attributable to excess
contributions may not be returned to the Employer, but losses attributable thereto shall
reduce the amount to be returned.

60

 

	17.5.	 	Spendthrift Clause
	 
	 	 	Except as provided below, no Participant, Former Participant or Beneficiary shall have the
right to anticipate, assign or alienate any benefit provided under the Plan and the Trustee
will not recognize any anticipation, assignment or alienation. Furthermore, a benefit under
the Plan is not subject to attachment, garnishment, levy, execution or other legal or
equitable process. All provisions of this Agreement shall be for the exclusive benefit of
those designated herein. These restrictions shall not apply in the following case(s):

	 	(a)	 	Distributions Pursuant to Qualified Domestic Relations Orders. The
Committee may direct the Trustee under the nondiscriminatory policy adopted by the
Committee to pay an Alternate Payee designated under a Qualified Domestic Relations
Order as defined in Code Section 414(p). To the extent provided under a Qualified
Domestic Relations Order, a former spouse of a Participant shall be treated as the
spouse or Surviving Spouse for all purposes of the Plan.
	 
	 	(b)	 	Participant Loans. If a Participant, Former Participant or Beneficiary
who has become entitled to receive payment of benefits under this Agreement is indebted
to the Trustee, by virtue of a Participant Loan, the Committee may direct the Trustee
to pay the indebtedness and charge it against the Account Balance of the Participant,
Former Participant or Beneficiary.
	 
	 	(c)	 	Distributions Under Certain Judgments and Settlements. Nothing
contained in this Plan prevents the Trustee from complying with a judgment or
settlement which requires the Trustee to reduce a Participant’s benefits under the Plan
by an amount that the Participant is ordered or required to pay to the Plan if each of
the following criteria are satisfied:

	 	(i)	 	The order or requirement must arise –

	 	(A)	 	under a judgment or conviction for a crime
involving the Plan;
	 
	 	(B)	 	under a civil judgment (including a consent
order or decree) entered by a court in an action brought in connection
with an actual or alleged violation of Part 4 of Title I of ERISA; or
	 
	 	(C)	 	under a settlement agreement with either the
Secretary of Labor or the Pension Benefit Guarantee Corporation and the
Participant in connection with an actual or alleged violation of Part 4
of Title I of ERISA by a fiduciary or any other person.

	 	(ii)	 	The decree, judgment, order or settlement expressly provides
for the offset of all or part of the amount ordered or required to be paid to
the Plan against the Participant’s benefits under the Plan.
	 
	 	(iii)	 	To the extent that (A) the survivor annuity requirements of
Code Section 401(a)(11) apply to the portion of the Participant’s Account
Balance

61

 

	 	 	 	which will be reduced or offset, and (B) the Participant has a spouse at the
time at which the reduction or offset is to be made.

	 	(A)	 	(1) the spouse must consent to the reduction or
offset in writing, as witnessed by a notary public or a plan
representative, (2) it is established that such consent may not be
obtained for any of the reasons outlined in Code Section 417(a)(2)(B),
or (3) the spouse must previously have executed an election to waive
his or her right to a Qualified Joint and Survivor Annuity or a
Qualified Pre-Retirement Survivor Annuity in accordance with the
requirements of Code Section 417(a);
	 
	 	(B)	 	the decree, judgment, order or settlement must
require the spouse to pay an amount to the Plan in connection with a
violation of Part 4 of Title I of ERISA; or
	 
	 	(C)	 	the decree, judgment, order or settlement must
provide that the spouse shall retain his or her right to receive a
survivor annuity calculated as provided in Code Section 401(a)(13)(D).
Participant shall be treated as the spouse or Surviving Spouse for all
purposes of the Plan.

	17.6.	 	Termination
	 
	 	 	Upon termination of the Plan, in lieu of the distribution provisions of Article IX, the
Committee will direct the Trustee to distribute each Participant’s Nonforfeitable Account
Balance, in a single sum, as soon as administratively feasible after the later of the
termination of the Plan or the receipt of a favorable determination letter from the Office
of the Key District Director, if an application is filed, irrespective of the present value
of the Participant’s Nonforfeitable Account Balance and whether the Participant consents to
that distribution. This paragraph applies only if:

	 	(a)	 	the Plan does not provide an annuity option;
	 
	 	(b)	 	the Plan is a profit sharing plan on its termination date; and
	 
	 	(c)	 	as of the period between the Plan termination date and the final distribution
of assets, the Employer does not maintain any other defined contribution plan (other
than an employee stock ownership plan).

	 	 	For Participants or Beneficiaries who cannot be located upon Plan termination, and whose
Nonforfeitable Account Balance exceeds $1,000, to liquidate the Trust, the Committee will
purchase a deferred annuity contract, distribute the benefits to an individual retirement
account, or transfer the account to an ongoing qualified plan of the Employer or a Related
Employer. If the Committee distributes the lost Participant’s or Beneficiary’s benefits to
an individual retirement account or purchases an annuity, and the Participant’s or
Beneficiary’s whereabouts remain unknown for the duration of the escheat period, the
benefits will ultimately escheat to the state under applicable state law.

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	 	 	Notwithstanding the foregoing, distributions may not be made following termination of the
Plan if the Employer establishes or maintains an alternative defined contribution plan, as
more particularly described in Treasury Regulation § 1.401(k)-1(d)(4)(i).

* * * * *

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ARTICLE XVIII

Construction

	18.1.	 	Headings 
	 
	 	 	The headings in this Agreement are for convenience only and shall not be considered in
construing this Agreement.
	 
	18.2.	 	Context 
	 
	 	 	In this Agreement, wherever the context of the Plan dictates, words used in the masculine
may be construed in the feminine, the plural includes the singular and the singular includes
the plural.
	 
	18.3.	 	Employment not Guaranteed 
	 
	 	 	Nothing contained in this Agreement, or regarding the establishment of the Plan or Trust, or
any modification or amendment to the Agreement, Plan or Trust, or in the creation of any
Individual Accounts, or the payment of any benefit, shall be construed as giving any
Employee, Participant or Beneficiary whomsoever any right to continue in the Service of the
Employer, any legal or equitable right against the Committee, against the Employer, its
stockholders, officers or directors or against the Trustee, except as expressly provided by
the Agreement, the Plan, the Trust, ERISA or by separate agreement. Employment of all
persons by the Employer shall remain subject to termination by the Employer to the same
extent as if this Agreement had never been executed.
	 
	18.4.	 	Waiver of Notice 
	 
	 	 	Any person entitled to notice under the Plan may waive the notice unless the Code or
Treasury Regulations prescribe the notice or ERISA specifically or impliedly prohibits a
waiver.
	 
	18.5.	 	State Law 
	 
	 	 	This Agreement and each of its provisions shall be construed and their validity determined
by the laws of the State of Texas and applicable Federal law to the extent Federal statute
supersedes Texas law.
	 
	18.6.	 	Parties Bound 
	 
	 	 	This Agreement shall be binding on all persons entitled to benefits under the Plan, their
respective heirs and legal representatives, on the Employer, its successors and assigns, and
on the Trustee, the Committee and their successors.

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	18.7.	 	Severance
	 
	 	 	If any provisions of this Agreement shall be invalid or unenforceable, the remaining
provisions shall continue to be fully effective.
	 
	18.8.	 	Employees In Qualified Military Service
	 
	 	 	Notwithstanding any provision of this Plan to the contrary, contributions, benefits and
service credits with respect to qualified military service will be provided in accordance
with Code Section 414(u).

* * * * * * * * * *

          IN WITNESS WHEREOF, the Plan Sponsor, DELL INC., has caused this instrument to be
executed on this 13th day of December, 2007 (except as otherwise stated herein).

	 	 	 	 	 	 	 
	 	 	PLAN SPONSOR:
	 
	 	 	 	 	 	 
	 	 	DELL INC.
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 

	 	Its:	 	 	 	 
	 

	 	 	 	 

	 	 

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APPENDIX A

EGTRRA Provisions

	A.1.1.	 	General
	 
	 	 	This Article reflects certain provisions of the Economic Growth and Tax Relief
Reconciliation Act of 2001 (“EGTRRA”). This Article is intended as good faith compliance
with the requirements of EGTRRA and is to be construed in accordance with EGTRRA and the
guidance issued thereunder. This Article shall, to the extent not otherwise consistent,
supercede the foregoing provisions of the Plan to the extent those provisions are
inconsistent with the provisions of this Article.
	 
	A.1.2.	 	Amendment to Provisions Governing Code Section 415 Limitation
	 
	 	 	Except to the extent permitted under Section A.1.8 below and Code Section  414(v), if
applicable, the Annual Addition that may be contributed or allocated to a Participant’s
account under the Plan for any Limitation Year shall not exceed the lesser of:

	 	(a)	 	$40,000, as adjusted for increases in the cost-of-living under Code
Section 415(d), or
	 
	 	(b)	 	100 percent of the Participant’s compensation, within the meaning of Code
Section 415(c)(3), for the Limitation Year.

	 	 	The compensation limit referred to in (b) above shall not apply to any contribution for
medical benefits after termination of employment (within the meaning of Code
Section 401(h) or 419A(f)(2)), which is otherwise treated as an Annual Addition. This
Section A.1.2 shall be effective for Limitation Years beginning after December 31, 2001.
(For clarity, the language of this provision is also incorporated in Plan 5.4(e).)

	A.1.3.	 	Increase in Compensation Limit 
	 
	 	 	The Annual Compensation of each Participant taken into account in determining allocations
for any Plan Year beginning after December 31, 2001, shall not exceed $200,000, as
adjusted for cost-of-living increases in accordance with Code Section 401(a)(17)(b).
Annual Compensation means compensation during the Plan Year or such other consecutive
12-month period over which compensation is otherwise determined under the Plan (the
determination period). The cost-of-living adjustment in effect for a calendar year
applies to Annual Compensation for the determination period that begins with or within
such calendar year. (For clarity, the language of this provision is incorporated in Plan
Section 1.9.)

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	A.1.4.	 	Modification of Top-Heavy Rules
	 
	 	 	This Section A.1.4 shall apply for purposes of determining whether the Plan is a
Top-Heavy Plan under Code Section 416(g) for Plan Years beginning after December 31,
2001, and whether the Plan satisfies the minimum benefits requirements of Code
Section 416(c) for such years. This Section A.1.4 amends the top-heavy provisions of the
Plan as follows:

	 	(a)	 	“Key employee” shall mean any Employee or former Employee (including any
deceased Employee) who at any time during the Plan Year that includes the
Determination Date was an officer of the Employer having Annual Compensation greater
than $130,000 (as adjusted under Code Section 416(i)(1) for Plan Years beginning
after December 31, 2002), a 5-percent owner of the Employer, as defined in Plan
Section 1.23, or a 1-percent owner of the Employer, defined in Plan Section 16.1(g),
having Annual Compensation of more than $150,000. For this purpose, Annual
Compensation means compensation within the meaning of Code Section 415(c)(3). The
determination of who is a key employee will be made in accordance with Code
Section 416(i)(1) and the applicable regulations and other guidance of general
applicability issued thereunder.
	 
	 	(b)	 	The following provisions shall apply for purposes of determining the
present values of accrued benefits and the amounts of Account Balances of Employees
as of the Determination Date.

	 	(i)	 	The Present Values of Accrued Benefits and the amounts of
Account Balances of an Employee as of the Determination Date shall be
increased by the distributions made with respect to the Employee under the
Plan and any plan aggregated with the Plan under Code Section 416(g)(2)
during the 1-year period ending on the Determination Date. The preceding
sentence shall also apply to distributions under a terminated plan which, had
it not been terminated, would have been aggregated with the Plan under Code
Section 416(g)(2)(A)(i). In the case of a distribution made for a reason
other than termination of employment, death, or Total and Permanent
Disability, this provision shall be applied by substituting “5-year period”
for “1-year period.”
	 
	 	(ii)	 	The accrued benefits and accounts of any individual who
has not performed services for the Employer during the 1-year period ending
on the Determination Date shall not be taken into account.

	 	(c)	 	Matching Contributions. Employer Matching Contributions, including Safe
Harbor Matching Contributions described in Plan Section 3.2, shall be taken into
account for purposes of satisfying the minimum contribution requirements of Code
Section 416(c)(2) and the Plan. The preceding sentence shall apply with respect to
Matching Contributions under the Plan or, if the Plan provides that the minimum
contribution requirement shall be met in another plan, such

67

 

	 	 	 	other plan. Employer Matching Contributions that are used to satisfy the minimum
contribution requirements shall be treated as Matching Contributions for purposes
of the Actual Contribution Percentage Test and other requirements of Code
Section 401(m).

	A.1.5.	 	Amendment to Direct Rollover Rules

	 	(a)	 	For purposes of the Direct Rollover provisions of Plan Section 9.2, an
Eligible Retirement Plan shall also mean an annuity contract described in Code
Section 403(b) and an eligible plan under Code Section 457(b) which is maintained by
a state, political subdivision of a state, or any agency or instrumentality of a
state or political subdivision of a state and which agrees to separately account for
amounts transferred into such plan from this Plan. The definition of Eligible
Retirement Plan shall also apply in the case of a distribution to a surviving
spouse, or to a spouse or former spouse who is the Alternate Payee under a Qualified
Domestic Relations Order, as defined in Code Section 414(p).
	 
	 	(b)	 	For purposes of the Direct Rollover provisions of Plan Section 9.2, any
amount that is distributed on account of hardship shall not be an Eligible Rollover
Distribution and the Distributee may not elect to have any portion of such a
distribution paid directly to an Eligible Retirement Plan.
	 
	 	(c)	 	For purposes of the Direct Rollover provisions of Plan Section 9.2, a
portion of a distribution shall not fail to be an Eligible Rollover Distribution
merely because the portion consists of after-tax employee contributions that are not
includible in gross income. However, such portion may be transferred only to an
individual retirement account or annuity described in Code Section 408(a) or (b), or
to a qualified defined contribution plan described in Code Sections 401(a) or 403(a)
that agrees to separately account for amounts so transferred, including separately
accounting for the portion of such distribution which is includible in gross income
and the portion of such distribution which is not so includible.

	A.1.6.	 	Rollovers from Other Plans
	 
	 	 	The Employer, operationally and on a nondiscriminatory basis, may limit the source of
Rollover Contributions that may be accepted by this Plan.

	A.1.7.	 	Rollovers Disregarded in Involuntary Distributions
	 
	 	 	This Section A.1.7 shall be effective for distributions made after December 31, 2001, and
shall apply to all Participants. For purposes of the sections of the Plan that provide
for the involuntary distribution of vested accrued benefits of $5,000 or less, the value
of a Participant’s Nonforfeitable Account Balance shall be determined without regard to
that portion of the Account Balance that is attributable to Rollover Contributions (and
earnings allocable thereto) within the meaning of Code Sections 402(c), 403(a)(4),
403(b)(8), 408(d)(3)(a)(ii), and 457(e)(16). If the value of the Participant’s

68

 

	 	 	Nonforfeitable Account Balance as so determined is $5,000 or less, then the Plan shall
immediately distribute the Participant’s entire Nonforfeitable Account Balance.

	A.1.8.	 	Amendment to the Contribution Provisions of the Plan

	 	(a)	 	Effective January 1, 2002, all Employees who are eligible to make Salary
Reduction Contributions under this Plan and who have attained age 50 before the
close of the Plan Year shall be eligible to make Catch-up Contributions, as defined
in Plan Section 1.12, in accordance with, and subject to the limitations of, Code
Section 414(v). Such Catch-up Contributions shall not be taken into account for
purposes of the provisions of the Plan implementing the required limitations of Code
Sections 402(g) and 415. The Plan shall not be treated as failing to satisfy the
provisions of the Plan implementing the requirements of Code Sections 401(k)(3),
401(k)(11), 401(k)(12), 410(b), or 416, as applicable, by reason of the making of
such Catch-up Contributions.
	 
	 	(b)	 	The multiple use test described in Treasury Regulation § 1.401(m)-2 and
the Plan shall not apply for Plan Years beginning after December 31, 2001.
	 
	 	(c)	 	No Participant shall be permitted to have Salary Reduction Contributions
made under this Plan, or any other qualified plan maintained by the Employer during
any taxable year, in excess of the dollar limitation contained in Code
Section 402(g) in effect for such taxable year, except to the extent permitted under
Subsection (a) above and Code Section 414(v), if applicable.
	 
	 	(d)	 	The election made pursuant to this Section A.1.8 shall be submitted as a
separate election from a Participant’s deferral election for Salary Reduction
Contributions under Plan Section 3.1 above.

	A.1.9.	 	Suspension Period Following Hardship Distribution
	 
	 	 	A Participant who receives a distribution of Salary Rreduction Contributions after
December 31, 2001, on account of hardship shall be prohibited from making Salary
Reduction Contributions and employee contributions under this and all other plans of the
Employer for six (6) months after receipt of the distribution. A Participant who receives
a distribution of Salary Reduction Contributions in calendar year 2001 on account of
hardship shall be prohibited from making Salary Reduction Contributions and employee
contributions under this and all other plans of the Employer for the period specified in
Plan Section 6.2(c) as in effect prior to January 1, 2006.

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	A.1.10.	 	Distributions following Termination of Employment
	 
	 	 	A Participant’s Salary Reduction Contributions, Qualified Nonelective Contributions,
Qualified Matching Contributions, and earnings attributable to these contributions shall
be distributed on account of the Participant’s termination of employment. However, such a
distribution shall be subject to the other provisions of the Plan regarding
distributions, other than provisions that require a Severance from Employment before such
amounts may be distributed.

* * * * *

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APPENDIX B

Model Amendment for Compliance with Final Treasury Regulations

Under Code Section 401(a)(9)

Section 1. General Rules.

	B.1.1.	 	Effective Date. The provisions of this amendment
will apply for purposes of determining required
minimum distributions for calendar years beginning
with the 2003 calendar year.
	 
	B.1.2.	 	Precedence. The requirements of this amendment will
take precedence over any inconsistent provisions of
the plan.
	 
	B.1.3.	 	Requirements of Treasury Regulations Incorporated.
All distributions required under this amendment will
be determined and made in accordance with the
Treasury Regulations under Code Section 401(a)(9).
	 
	B.1.4.	 	TEFRA Section 242(b)(2) Elections. Notwithstanding
the other provisions of this amendment,
distributions may be made under a designation made
before January 1, 1984, in accordance with section
242(b)(2) of the Tax Equity and Fiscal
Responsibility Act (TEFRA) and the provisions of the
plan that relate to section 242(b)(2) of TEFRA.

Section 2.
Time and Manner of Distribution.

	B.2.1.	 	Required Beginning Date. The participant’s entire
interest will be distributed, or begin to be
distributed, to the participant no later than the
participant’s required beginning date.
	 
	B.2.2.	 	Death of Participant Before Distributions Begin. If
the participant dies before distributions begin, the
participant’s entire interest will be distributed,
and begin to be distributed, no later than as
follows:

	 	(a)	 	If the participant dies before distributions begin and there is a designated
beneficiary, the participant’s entire interest will be distributed to the designated
beneficiary by December 31 of the calendar year containing the fifth anniversary of the
participant’s death. If the participant’s surviving spouse is the participant’s sole
designated beneficiary and the surviving spouse dies after the participant but before
distributions to either the participant or the surviving spouse begin, this paragraph
will apply as if the surviving spouse were the participant.
	 
	 	(b)	 	If there is no designated beneficiary as of September 30 of the year following
the year of the participant’s death, the participant’s entire interest will be
distributed by December 31 of the calendar year containing the fifth anniversary of the
participant’s death.

	 	 	For purposes of this section B.2.2 and section B.4, unless the second sentence of section
B.2.2(a) applies, distributions are considered to begin on the participant’s required
beginning date. If the second sentence of section B.2.2(a) applies, distributions are
considered to begin on the date distributions are required to begin to the surviving spouse.
If distributions under an annuity purchased from an insurance company

71

 

	 	 	irrevocably commence to the participant before the participant’s required beginning date (or
to the participant’s surviving spouse before the date distributions are required to begin to
the surviving spouse), the date distributions are considered to begin is the date
distributions actually commence.

	B.2.3.	 	Forms of Distribution. Unless the
participant’s interest is distributed
in the form of an annuity purchased
from an insurance company or in a
single sum on or before the required
beginning date, as of the first
distribution calendar year
distributions will be made in
accordance with sections B.3 and B.4
of this amendment. If the
participant’s interest is distributed
in the form of an annuity purchased
from an insurance company,
distributions thereunder will be made
in accordance with the requirements
of Code Section 401(a)(9) and the
Treasury Regulations.

Section 3.
Required Minimum Distributions During Participant’s Lifetime.

	B.3.1.	 	Amount of Required Minimum
Distribution For Each Distribution
Calendar Year. During the
participant’s lifetime, the minimum
amount that will be distributed for
each distribution calendar year is
the lesser of:

	 	(a)	 	the quotient obtained by dividing the participant’s account balance by the
distribution period in the Uniform Lifetime Table set forth in section 1.401(a)(9)-9 of
the Treasury Regulations, using the participant’s age as of the participant’s birthday
in the distribution calendar year; or
	 
	 	(b)	 	if the participant’s sole designated beneficiary for the distribution calendar
year is the participant’s spouse, the quotient obtained by dividing the participant’s
account balance by the number in the Joint and Last Survivor Table set forth in section
1.401(a)(9)-9 of the Treasury Regulations, using the participant’s and spouse’s
attained ages as of the participant’s and spouse’s birthdays in the distribution
calendar year.

	B.3.2.	 	Lifetime Required Minimum Distributions Continue Through Year of Participant’s Death.
Required minimum distributions will be determined under this section B.3 beginning with the
first distribution calendar year and up to and including the distribution calendar year that
includes the participant’s date of death.

Section 4.
Required Minimum Distributions After Participant’s Death.

	B.4.1.	 	Death On or After Date Distributions Begin.

	 	(a)	 	Participant Survived by Designated Beneficiary. If the participant dies
on or after the date distributions begin and there is a designated beneficiary, the
minimum amount that will be distributed for each distribution calendar year after the
year of the participant’s death is the quotient obtained by dividing the participant’s
account balance by the longer of the remaining life expectancy of the participant or
the remaining life expectancy of the participant’s designated beneficiary, determined
as follows:

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	 	(1)	 	The participant’s remaining life expectancy is calculated using
the age of the participant in the year of death, reduced by one for each
subsequent year.
	 
	 	(2)	 	If the participant’s surviving spouse is the participant’s sole
designated beneficiary, the remaining life expectancy of the surviving spouse
is calculated for each distribution calendar year after the year of the
participant’s death using the surviving spouse’s age as of the spouse’s
birthday in that year. For distribution calendar years after the year of the
surviving spouse’s death, the remaining life expectancy of the surviving spouse
is calculated using the age of the surviving spouse as of the spouse’s birthday
in the calendar year of the spouse’s death, reduced by one for each subsequent
calendar year.
	 
	 	(3)	 	If the participant’s surviving spouse is not the participant’s
sole designated beneficiary, the designated beneficiary’s remaining life
expectancy is calculated using the age of the beneficiary in the year following
the year of the participant’s death, reduced by one for each subsequent year.

	 	(b)	 	No Designated Beneficiary. If the participant dies on or after the date
distributions begin and there is no designated beneficiary as of September 30 of the
year after the year of the participant’s death, the minimum amount that will be
distributed for each distribution calendar year after the year of the participant’s
death is the quotient obtained by dividing the participant’s account balance by the
participant’s remaining life expectancy calculated using the age of the participant in
the year of death, reduced by one for each subsequent year.

	B.4.2.	 	Death Before Date Distributions Begin.

	 	(a)	 	Participant Survived by Designated Beneficiary. If the participant dies
before distributions begin and there is a designated beneficiary, the participant’s
entire interest will be distributed, and begin to be distributed, to the designated
beneficiary by December 31 of the calendar year containing the fifth anniversary of the
participant’s death. If the participant’s surviving spouse is the participant’s sole
designated beneficiary and the surviving spouse dies after the participant but before
distributions to either the participant or the surviving spouse begin, this paragraph
will apply as if the surviving spouse were the participant.
	 
	 	(b)	 	No Designated Beneficiary. If the participant dies before the date
distributions begin and there is no designated beneficiary as of September 30 of the
year following the year of the participant’s death, distribution of the participant’s
entire interest will be completed by December 31 of the calendar year containing the
fifth anniversary of the participant’s death.

73

 

	 	(c)	 	Death of Surviving Spouse Before Distributions to Surviving Spouse Are
Required to Begin. If the participant dies before the date distributions begin, the
participant’s surviving spouse is the participant’s sole designated beneficiary, and
the surviving spouse dies before distributions are required to begin to the surviving
spouse, this section B.4.2 will apply as if the surviving spouse were the participant.

Section 5.
Definitions.

	B.5.1.	 	Designated beneficiary. The individual who is designated as the beneficiary under Plan Section 8.5 and is the
designated beneficiary under Code Section 401(a)(9) and section 1.401(a)(9)-1, Q&A-4, of the Treasury Regulations.
	 
	B.5.2.	 	Distribution calendar year. A calendar year for which a minimum distribution is required. For distributions
beginning before the participant’s death, the first distribution calendar year is the calendar year immediately
preceding the calendar year which contains the participant’s required beginning date. For distributions beginning
after the participant’s death, the first distribution calendar year is the calendar year in which distributions are
required to begin under section B.2.2. The required minimum distribution for the participant’s first distribution
calendar year will be made on or before the participant’s required beginning date. The required minimum
distribution for other distribution calendar years, including the required minimum distribution for the
distribution calendar year in which the participant’s required beginning date occurs, will be made on or before
December 31 of that distribution calendar year.
	 
	B.5.3.	 	Life expectancy. Life expectancy as computed by use of the Single Life Table in section 1.401(a)(9)-9 of the
Treasury Regulations.
	 
	B.5.4.	 	Participant’s Account Balance. The account balance as of the last valuation date in the calendar year immediately
preceding the distribution calendar year (valuation calendar year) increased by the amount of any contributions
made and allocated or forfeitures allocated to the account balance as of dates in the valuation calendar year after
the valuation date and decreased by distributions made in the valuation calendar year after the valuation date. The
account balance for the valuation calendar year includes any amounts rolled over or transferred to the plan either
in the valuation calendar year or in the distribution calendar year if distributed or transferred in the valuation
calendar year.
	 
	B.5.5	 	Required beginning date. The date specified in Plan Section 8.4(a).

* * * * *

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APPENDIX C

Special Vesting Provisions for Reemployed Former Participants

Who are not Credited with an Hour of Service on January 1, 2005

The provisions herein describe the terms of the Plan that were in effect prior to January 1, 2005,
regarding the determination of a Participant’s vested interest in his Individual Accounts. The
determination of Years of Vesting Service under this Appendix C shall apply only to a Former
Participant or to a reemployed Participant who has amounts credited to his Individual Accounts
attributable to Periods of Service completed prior to January 1, 2005.

	C.1.1	 	Year of Vesting Service
	 
	 	 	Year of Vesting Service means 365 days of Service. An Employee shall receive credit for the
aggregate of all time periods commencing on an Employee’s Employment Commencement Date,
including the Re-Employment Commencement Date, and ending on the date a Break in Service
begins. An Employee also shall receive credit for any Period of Severance of less than 365
days. Fractional periods of a year shall be expressed in terms of days. In computing an
Employee’s Years of Vesting Service, the following rules shall apply:

	 	(a)	 	For a Participant who terminates employment with the Employer and all Related
Employers at a time when he has a vested interest in his Employer Contribution Account
of more than 0% but less than 100% and who subsequently is re-employed after incurring
five (5) consecutive Breaks in Service, Years of Vesting Service earned by the
Participant after the Break in Service shall not be taken into account for purposes of
determining the Nonforfeitable percentage of the Participant’s Account Balance derived
from Employer Contributions which accrued before the Break in Service.
	 
	 	(b)	 	For a Participant who terminates employment with the Employer and all Related
Employers at a time when he has a 0% vested interest in his Employer Contribution
Account and who is re-employed after a Break in Service, Service before the Break in
Service shall not be taken into account if the number of consecutive Breaks in Service
equals or exceeds the greater of (A) five (5), or (B) the aggregate number of Years of
Vesting Service before the Break in Service. If the Participant has made any Salary
Reduction Contributions to the Plan, Service before the Break in Service shall not be
disregarded under the immediately preceding sentence.
	 
	 	(c)	 	Years of Vesting Service shall include all Years of Vesting Service of the
Employee with any Predecessor Employer; provided, however, that the number of years
credited under this provision shall not exceed five (5).
	 
	 	(d)	 	Years of Vesting Service with the Employer before a Participant enters the Plan
shall be considered for purposes of vesting.

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	 	(e)	 	If the Employer is a member of a group of Related Employers, then Years of
Vesting Service shall include Service with any Related Employer.
	 
	 	(f)	 	For purposes of determining Years of Vesting Service, the following definitions
shall apply:

	 	(i)	 	Period of Severance means the period of time commencing on the
Severance from Employment Date and ending on the date on which the Employee
again performs an Hour of Service for the Employer.
	 
	 	(ii)	 	Re-Employment Commencement Date means the first date, following
a Period of Severance which is not required to be considered under the Service
rules, on which the Employee performs an Hour of Service for the Employer.

ARTICLE
II  Severance from Employment Date means the date on which occurs the earlier of: (A) the
date on which an Employee quits, retires, is discharged or dies; or (B) the first anniversary of
the first date of a period in which an Employee remains absent from Service, with or without pay,
with the Employer for any other reason, such as vacation, holiday, sickness, disability, leave of
absence or layoff. However, with respect to the timing of any distributions that include Salary
Reduction Contributions, Severance from Employment Date shall have the same meaning set forth in
Plan Section 6.2(b).

	 	(g)	 	The Committee, in its discretion, may credit an individual with
“pre-participation service” (within the meaning of Treas. Reg.
§ 1.401(a)(4)-11(d)(3)(ii)(A)), but only if (i) such pre-participation service would
not otherwise be credited as Service and (ii) such crediting of Service (A) has a
legitimate business reason, (B) does not by design or operation discriminate
significantly in favor of Highly Compensated Employees, and (C) is applied to all
similarly situated employees. Moreover, the Committee, in its discretion, may credit an
individual with “imputed service” (within the meaning of Treas. Reg.
§ 1.401(a)(4)-11(d)(3)(ii)(B)), but only if (i) such imputed service would not
otherwise be credited as Service, (ii) such crediting of Service (A) has a legitimate
business reason, (B) does not by design or operation discriminate significantly in
favor of Highly Compensated Employees, and (C) is applied to all similarly situated
employees, and (iii) the individual has not permanently ceased to perform services as
an Employee of the Employer or a Related Employer, provided that clause (iii) of this
sentence shall not apply if (A) the individual is not performing services for the
Employer or a Related Employer because of a Disability, (B) the individual is
performing services for another employer which is being treated under the Plan as
actual service with the Employer or a Related Employer.
	 
	 	(h)	 	Special Rules for Certain Former Dell Financial Services, L.P.
Employees. A Participant or Former Participant who was a former employee of Dell
Financial Services, L.P. shall receive credit for vesting purposes for Service with
Dell Financial Services, L.P., provided, however, that such Participant became an

76

 

	 	 	 	Employee of the Employer or a Related Employer on the date next following the date
of his or her termination of employment with Dell Financial Services, L.P.

	C.1.2	 	Vesting Schedule for Service Credited Prior to January 1, 2005

	 	(a)	 	A Former Participant or reemployed Participant who was not “actively employed”,
pursuant to the Employer’s HR Direct personnel system, by the Employer or a Related
Employer on January 1, 2005, and not otherwise a member of the group of Participants
described in Plan Section 7.2(b), shall be entitled to receive 100% of his Participant
Contribution Account. In addition, the Participant shall be entitled to receive the
Nonforfeitable percentage of the balance credited to the Participant’s Employer
Contribution Account, as determined under the following vesting schedule:

	 	 	 	 	 
	YEARS OF VESTING SERVICE	 	NONFORFEITABLE PERCENTAGE
	Less than 1 Year
	 	 	0	%
	1 Year
	 	 	20	%
	2 Years
	 	 	40	%
	3 Years
	 	 	60	%
	4 Years
	 	 	80	%
	5 Years or more
	 	 	100	%

	 	 	 	Notwithstanding the preceding, if a Former Participant or reemployed Participant has
previously been granted credit for Years of Vesting Service with a Predecessor
Employer, such participant’s Nonforfeitable Percentage shall be no less than the
participant’s Nonforfeitable Percentage with his Predecessor Employer.

	C.1.3.	 	Forfeiture
	 
	 	 	A Former Participant who is not entitled to 100% vesting in his Employer Contribution
Account under Plan Section 7.2(a) shall forfeit that portion of the amount of his Individual
Accounts to which the Former Participant is not entitled on the earlier of the date on which
the Former Participant incurs five (5) consecutive Breaks in Service or the date on which
the Former Participant receives a Cashout Distribution (the Forfeiture Event).

	 	(i)	 	A Cashout Distribution means a lump sum distribution that occurs no later than
the last day of the second Plan Year following the Plan Year in which the Participant
terminates employment.
	 
	 	(ii)	 	A Former Participant who terminates employment without a Nonforfeitable
percentage in the Former Participant’s Employer Contribution Account shall be deemed to
have received a distribution of his Nonforfeitable Account Balance on the date of his
termination of employment.

77

 

	 	(iii)	 	The amount forfeited under this subsection, to the extent attributable to
Employer Contributions, shall remain in the Trust Fund and shall be used to reduce
Employer Contributions or to pay expenses incident to the administration of the Plan
and Trust as of the Anniversary Date of the Plan Year during which the Forfeiture Event
occurred.

	C.1.4.	 	Determination of Amount of Vested Undistributed Account, Forfeiture
	 
	 	 	If the Trustee pays any amount outstanding to the credit of a Former Participant or
Participant in the Participant’s Individual Accounts while the Former Participant or
Participant is not fully vested in his Individual Accounts, other than a Cashout
Distribution defined in Section C.1.3 above, and prior to the Anniversary Date on which the
Former Participant or Participant shall incur five (5) consecutive Breaks in Service, the
value of his or her vested and undistributed account shall be held in a separate account and
shall be determined at any time prior to and including the Anniversary Date on which the
Former Participant or Participant shall incur five (5) consecutive Breaks in Service under
the following formula.

	 	 	 
	 	X P(AB (RxD)) — (RxD).

	 
	 	For this formula, the variables represent the following factors:

	 
	 	X is the value of the vested portion of the Participant’s account;

	 
	 	P is the Participant’s Nonforfeitable percentage at the relevant
time;

	 
	 	AB is the Account Balance at the relevant time;

	 
	 	D is the amount of the distribution; and

	 
	 	R is the ratio of the Account Balance at the relevant time to the
Account Balance after the distribution.

	 
	 

	 	 	The nonvested portion of the Former Participant’s or Participant’s Individual Accounts shall
be forfeited on the Anniversary Date on which the Former Participant or Participant incurs
five (5) consecutive Breaks in Service.

78

 

	C.1.5.	 	Crediting Years of Vesting Service
	 
	 	 	If a Participant’s Service with the Employer is terminated and the Former Participant
receives a distribution from the Trustee and subsequently re-enters the Service of the
Employer after incurring five (5) consecutive Breaks in Service, the reemployed
Participant’s Service after the break shall not be taken into account to determine the
Nonforfeitable percentage of the Participant’s Account Balance derived from Employer
Contributions which accrued before the Break in Service.
	 
	 	 	If a Participant’s Service with the Employer is terminated and the Participant is reemployed
by the Employer prior to incurring five (5) consecutive Breaks in Service, the reemployed
Participant shall continue to vest at the level in the vesting schedule in Section C.1.2
above that the Participant had attained prior to termination in his pre-separation Account
Balance.

	C.1.6.	 	Restoration of Account Balance
	 
	 	 	If a partially vested Participant is reemployed after termination of employment, but prior
to incurring five (5) consecutive Breaks in Service, the Participant shall have the right to
repay the amount previously distributed pursuant to Section C.1.2. If the Participant repays
the entire amount previously distributed prior to the earlier of (i) incurring five (5)
consecutive Breaks in Service commencing. after the withdrawal, or (ii) five years after the
first date on which the Participant is subsequently reemployed by the Employer, then the
Committee shall restore to the Participant’s Individual Accounts an amount equal to the
amount forfeited. The Committee will treat a non-vested Participant who is deemed to have
received a distribution of the Participant’s Nonforfeitable Account Balance as having repaid
the deemed distribution on the first date of the Participant’s reemployment with the
Employer. Restoration of the Participant’s Account Balance includes restoration of all Code
Section 411(d)(6) protected benefits pertaining to that restored Account under applicable
Treasury Regulations. The restored amount shall immediately become 100% vested under Plan
Section 7.2(b).
	 
	 	 	Notwithstanding the foregoing, if the value of a re-employed Participant’s vested Employer
Contribution Account was zero and the Participant had made Salary Reduction Contributions to
the Plan prior to separating from Service, such Participant shall not be considered
nonvested under the Plan and shall be entitled to restoration of amounts forfeited from his
Employer Contribution Account only if he satisfies the repayment requirements described in
this Section C.1.6.

* * * * *

79exv10w17

 

Exhibit 10.17

EO Performance Based SU — Executive Officer

Amended & Restated 2002 Plan

DELL INC.

Performance Based Stock Unit Agreement

Dell Inc., a Delaware corporation (the “Company”), is pleased to grant you units representing the
right to receive shares of the Company’s common stock (the “Shares”), subject to the terms and
conditions described below. The target number of units that may be awarded to you (the “Target”)
is stated in step one of the Stock Plan Administrator’s online grant acceptance process (“Grant
Summary”). The number of units awarded to you (the “Units”) will be determined on the last day of
each Fiscal Year during the Performance Period. Each Unit represents the right to receive one
Share. As a material inducement to the Company to grant you this award, you agree to the following
terms and conditions. You agree that you are not otherwise entitled to this award, that the
Company is providing you this award in consideration for your promises and agreements below, and
that the Company would not grant you this award absent those promises and agreements. This Stock
Unit Agreement, the Grant Summary, and the Company’s Amended and Restated 2002 Long-Term (Incentive
Plan (the “Plan”) set forth the terms of your Units identified in your Grant Summary.

1. Performance Based Units - The Target represents the number of Units you have the
opportunity to receive based on the Company’s attainment of its annual performance goals. A
portion of the Units will be awarded to you as soon as administratively feasible following each
Fiscal Year during the Performance Period; the actual number of Units you receive will range from
80% to 120% of one third of the Target Units for the Performance Period, which will be determined
by the Company in its sole discretion. You will be notified of the annual performance goals and
the number of Units awarded to you if those goals are attained through separate written
communications. Notwithstanding the preceding paragraph, if your employment is terminated during
the Performance Period by reason of your death or Permanent Disability (as defined below), the
number of units awarded to you will be the Target Units for the Performance Period.

2. Vesting —The Company will issue you one Share for each vested Unit to be delivered on the
vesting date or as soon as administratively practicable thereafter. The Units will vest, and you
will receive Shares, in accordance with the schedule in your Grant Summary.

Notwithstanding the foregoing schedule, the Company, with the approval of the Chief Executive
Officer and upon written notice to you, may defer the vesting with respect to all or any portion of
the Units to any date that is not more than ten years after the Date of Grant stated in your Grant
Summary.

3. Expiration — If your Employment (as defined below) terminates for any reason other than your
death or “Permanent Disability” (as defined in the Plan described below), any Units that have not
vested as described above will expire at that time.

If your Employment is terminated by reason of your death or Permanent Disability, all Units will
vest immediately and automatically upon such termination of Employment.

As used herein, the term “Employment” means your regular full-time or part-time employment with the
Company or any of its Subsidiaries, and the term “Employer” means the Company (if you are employed
by the Company) or the Subsidiary of the Company that employs you.

4. Rights as a Stockholder — You will have no rights as a stockholder with respect to Shares that
may be received by you pursuant to this Agreement until those Shares are issued and registered in
your name on the books of the Company’s transfer agent. You will have no rights to receive
dividend equivalent payments with respect to Shares that may be received by you pursuant to this
Agreement. Units granted to you will be satisfied wholly through the issuance and delivery of
Shares.

5. Agreement With Respect to Taxes — You must pay any taxes that are required to be withheld by the
Company or your Employer. You may pay such amounts in cash or make other arrangements satisfactory
to the Company or your Employer for the payment of such amounts. You agree the Company or your
Employer, at its sole discretion and to the fullest extent permitted by law, shall have the right
to demand that you pay such amounts in cash, deduct such amounts from any payments of any kind
otherwise due to you, or withhold from Shares to which you would otherwise be entitled the number
of Shares having an aggregate market value at that time equal to the amount you owe. In the event
the Company, in its sole discretion, determines that your tax obligations will not be satisfied
under the methods described in this paragraph, you authorize the Company or the Company’s Stock
Plan Administrator to sell a number of Shares that are issued under the Units, which the Company
determines as having at least the market value sufficient to meet the tax withholding obligations
plus additional Shares to account for rounding and market fluctuations and pay such tax withholding
to the Company. The shares may be sold as part of a block trade with other participants and all
participants receive an average price.

You agree that, subject to compliance with applicable law, the Company and/or your Employer may
recover from you taxes which may be payable by the Company and/or your Employer in any jurisdiction
in relation to this award. You agree that the Company and/or your Employer shall be entitled to
use whatever method they may deem appropriate to recover such taxes including the sale of any
Shares, paying you a net amount of shares (or cash), recovering the taxes via payroll and direct
invoicing. You further agree that the Company and/or your Employer may, as it reasonably considers
necessary, amend or vary this agreement to facilitate such recovery of taxes.

6. Leaves of Absence — If you take a leave of absence from active Employment that has been approved
by the Company or your Employer or is one to which you are legally entitled regardless of such
approval, the following provisions will apply:

A. Vesting During Leave — Notwithstanding the vesting schedule set forth above, no Units will vest
during a leave of absence other than an approved employee medical, FMLA or military leave.
Notwithstanding the preceding, vesting shall not be deferred for any approved leave of absence of
less than 30 days. The vesting that would have otherwise occurred during a leave of absence other
than an approved employee medical, FMLA or military leave will be deferred by the number of days
you are on a leave of absence. For example, if your Units are scheduled to vest on August 1, 2007
through August 1, 2011, and you are on a 40-day leave of absence, the dates on which the vesting
occurs will be deferred to September 10, 2007 through September 10, 2011.

 

 

B. Effect of Termination During Leave — If your Employment is terminated during the leave of
absence, the Units will expire or vest in accordance with the terms stated in Paragraph 3
(Expiration) above.

7. Return of Share Value — By accepting this award, you agree that if the Company determines that
you engaged in “Conduct Detrimental to the Company” (as defined below) during your Employment or
during the one-year period following the termination of your Employment, you shall be required,
upon demand, to return to the Company, in the form of a cash payment, certain share value
(“Returnable Share Value”). For purposes of this provision, “Returnable Share Value” means a cash
amount equal to the gross value of the Shares that were issued to you pursuant to this Agreement
during the two-year period preceding the termination of your Employment, determined as of the date
such Shares were issued to you and using the Fair Market Value (as defined in the Plan) of Dell
stock on that date. You understand and agree that the repayment of the Returnable Share Value is
in addition to and separate from any other relief available to the Company due to your Conduct
Detrimental to the Company.

For purposes of this Agreement, you will be considered to have engaged in “Conduct Detrimental to
the Company” if:

(1) you engage in serious misconduct (whether or not such serious misconduct is discovered by the
Company prior to the termination of your Employment);

(2) you breach your obligations to the Company with respect to confidential and proprietary
information or trade secrets or breach any agreement between you and Dell relating to confidential
and proprietary information or trade secrets;

(3) you compete with the Company (as described below); or

(4) you solicit the Company’s employees (as described below).

For purposes of this provision, you shall be deemed to “compete” with the Company if you, directly
or indirectly:

	•	 	Are a principal, owner, officer, director, shareholder or other equity owner (other than a
holder of less than 5% of the outstanding shares or other equity interests of a publicly
traded company) of a Direct Competitor (as defined below);
	 
	•	 	Are a partner or joint venture in any business or other enterprise or undertaking with a
Direct Competitor; or
	 
	•	 	Serve or perform work (including consulting or advisory services) for a Direct Competitor
that is similar in a material way to the work you performed for the Company in the twelve
months preceding the termination of your Employment.

You understand and agree that this provision does not prohibit you from competing with the Company
but only requires repayment of Returnable Share Value in the event of such competition.

For purposes of this provision, a “Company’s employee” means any person employed by the Company or
any of its Subsidiaries and “solicit the Company’s employees” means that you communicate in any way
with any other person regarding (a) a Company Employee leaving the employ of the Company or any of
its Subsidiaries; or (b) a Company Employee seeking employments with any other employer. This
provision does not apply to those communications that are within the scope of your Employment that
are taken on behalf of your Employer.

The term “Direct Competitor” means any entity, or other business concern that offers or plans to
offer products or services that are materially competitive with any of the products or services
being manufactured, offered, marketed, or are actively developed by Dell as of the date your
employment with Dell ends. By way of illustration, and not by limitation, at the time of
execution of this Agreement, the following companies are currently Direct Competitors:
Hewlett-Packard, Lenovo, IBM, Gateway, Apple, Acer, CDW, EDS, EMC, Software House International,
Insight (Software Spectrum), Softchoice, and Digital River. You understand and agree that the
foregoing list of Direct Competitors represents a current list of Dell Direct Competitors as of the
date of execution of this Agreement and that other entities may become Direct Competitors in the
future.

8. Transferability — The Units are not transferable except as described in this Paragraph, and the
provisions of this Paragraph shall apply notwithstanding any other provision herein to the
contrary.

     (a) The Units are transferable by will or the laws of descent and distribution.

     (b) The Units may be transferred to (1) one or more “Family Members” (as defined below), (2)
a trust in which you or Family Members own more than 50% of the beneficial interests, (3) a
foundation in which you or Family Members control the management of assets or (4) any other entity
in which you or Family Members own more than 50% of the voting interests; provided, however, that
in any case, (A) the transfer is by way of gift or is otherwise a donative transfer or, in the
case of a transfer to an entity, the transfer is made in exchange for an interest in the entity
and (B) the transferee expressly acknowledges that the terms and provisions of this Agreement will
continue to apply to the Unit in the hands of the transferee. For purpose of this provision, the
term “Family Member” shall mean your spouse, former spouse, child, stepchild, grandchild, parent,
stepparent, grandparent, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law,
daughter-in-law, brother-in-law or sister-in-law (including adoptive relationships) or any person
sharing your household (other than a tenant or employee). Notwithstanding the provisions of this
subparagraph (b), any transfer described herein must be made in compliance with such procedural
rules and regulations (including those pertaining to the timing of transfers) as are established
from time to time by the Committee.

     (c) The Units may be transferred under a domestic relations order in settlement of marital
property rights.

9. Trading Restrictions —The Company may establish periods from time to time during which your
ability to engage in transactions involving the Company’s stock is subject to specified
restrictions (“ Restricted Periods”). Notwithstanding any other provisions herein, Units will not
vest, and Shares will not be issued, during an applicable Restricted Period and the applicable
period during which Units vest shall be extended until the end of such Restricted Period, unless
such vesting is specifically permitted by the Company (in its sole discretion). You may be subject
to a Restricted Period for any reason that the Company determines appropriate, including Restricted
Periods generally applicable to employees or groups of employees or Restricted Periods applicable
to you during an investigation of allegations of misconduct or Conduct Detrimental to the Company
by you.

10. Incorporation of Plan — This award is granted under the Plan and is governed by the terms of
the Plan in addition to the terms and conditions stated herein. All terms used herein with their
initial letters capitalized shall have the meanings given them in the Plan unless otherwise defined
herein. A copy of the Plan is available upon request from the Company’s Stock Option
Administration Department. Shares of common stock that are issued pursuant to this Agreement shall
be made available from authorized but unissued shares.

 

 

11. Prospectus — You may at any time obtain a copy of the prospectus related to the Dell common
stock underlying the Units by accessing the prospectus at
http://inside.us.dell.com/legal/corporate.htm. Additionally, you may request a copy of the
prospectus free of charge from the Company by contacting Stock Option Administration in writing at
Stock Option Administration, One Dell Way, Mail Stop 8038, Round Rock, Texas 78682, (512) 728-8644
or e-mail Stock_Option_Administrator @dell.com.

12. Notice — You agree that notices may be given to you in writing either at your home address as
shown in the records of the Company or your Employer, or by electronic transmission (including
e-mail or reference to a website or other URL) sent to you through the Company’s normal process for
communicating electronically with its employees.

13. No Right to Continued Employment — The granting of Units does not confer upon you any right to
expectation of employment by, or to continue in the employment of, your Employer.

14. Limitation on Rights; No Right to Future Grants; Extraordinary Item of Compensation — By
accepting this Agreement and the grant of the Units evidenced hereby, you expressly acknowledge
that (a) the Plan is discretionary in nature and may be suspended or terminated by the Company at
any time; (b) the grant of Units is a one-time benefit that does not create any contractual or
other right to receive future grants of Units, or benefits in lieu of Units; (c) all determinations
with respect to future grants, if any, including the grant date, the number of Units granted and
the vesting dates, will be at the sole discretion of the Company; (d) your participation in the
Plan is voluntary; (e) the value of the Units is an extraordinary item of compensation that is
outside the scope of your employment contract, if any, and nothing can or must automatically be
inferred from such employment contract or its consequences; (f) Units are not part of normal or
expected compensation for any purpose, and are not to be used for calculating any severance,
resignation, redundancy, end of service payments, bonuses, long-service awards, pension or
retirement benefits or similar payments, and you waive any claim on such basis; (g) the grant of an
equity interest in the Company gives rise to the Company’s need (on behalf of itself and its
stockholders) to protect itself from Conduct Detrimental to the Company, and your promises
described in Paragraph7 (Return of Share Value) above are designed to protect the Company and its
stockholders from Conduct Detrimental to the Company; (h) vesting of Units ceases upon termination
of Employment for any reason except as may otherwise be explicitly provided in the Plan document or
in this Agreement; (i) the future value of the Units is unknown and cannot be predicted with
certainty; and (j) you understand, acknowledge and agree that you will have no rights to
compensation or damages related to Units or Shares in consequence of the termination of your
Employment for any reason whatsoever and whether or not in breach of contract. Finally, you also
understand, acknowledge and agree that selling of Dell Inc.’s stock in the territory of the Russian
Federation is prohibited.

15. Data Privacy Consent — As a condition of the grant of the Units, you consent to the collection,
use and transfer of personal data as described in this paragraph. You understand that the Company
and its Subsidiaries hold certain personal information about you, including your name, home address
and telephone number, date of birth, social security number, salary, nationality, job title, any
ownership interests or directorships held in the Company or its Subsidiaries and details of all
Units, Shares, stock options or other equity awards awarded or cancelled (“Data”). You further
understand that the Company and its Subsidiaries will transfer Data among themselves as necessary
for the purposes of implementation, administration and management of your participation in the
Plan, and that the Company and any of its Subsidiaries may each further transfer Data to any third
parties assisting the Company in the implementation, administration and management of the Plan.
You understand that these recipients may be located in the European Economic Area or elsewhere,
such as the United States. You authorize them to receive, possess, use, retain and transfer such
Data as may be required for the administration of the Plan or the subsequent holding of shares of
common stock on your behalf, in electronic or other form, for the purposes of implementing,
administering and managing your participation in the Plan, including any requisite transfer to a
broker or other third party with whom you may elect to deposit any shares of common stock acquired
under the Plan. You understand that you may, at any time, view such Data or require any necessary
amendments to it.

17. Governing Law and Venue — This Agreement and the Plan shall be governed by, and construed in
accordance with, the laws of the State of Delaware, United States of America. The venue for any
and all disputes arising out of or in connection with this Agreement shall be New Castle County,
Delaware, United States of America, and the courts sitting exclusively in New Castle County,
Delaware, United States of America shall have exclusive jurisdiction to adjudicate such disputes.
Each party hereby expressly consents to the exercise of jurisdiction by such courts and hereby
irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so,
any objection that it may now or hereafter have to such laying of venue (including the defense of
inconvenient forum).

18. Effect of Invalid Provisions — If any of the promises, terms or conditions set forth herein are
determined by a court of competent jurisdiction to be unenforceable, any Units that have not vested
as described above will expire at that time and you agree to return to the Company an amount of
cash equal to the Fair Market Value (as defined in the Plan) of all Shares theretofore issued to
you pursuant to this Agreement, determined as of the date such Shares were issued.

19. Acceptance of Terms and Conditions — This award will not be effective and you may not take
action with respect to the Units or the Shares until you have acknowledged and agreed to the terms
and conditions set forth herein in the manner prescribed by the Company. You should print a copy of
this award and your Grant Summary for your records.

Awarded subject to the terms and conditions stated above:

DELL INC.

	 	 	 	 	 
	By:

	 	/s/ Dominick DiCosimo
	 	 
	 

	 	 	 	 
	 

	 	Dominick DiCosimo, VP, Global HR Operations

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