<PAGE>
As filed with the Securities and Exchange Commission on December 2, 1999
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-------------------------
THE HOME DEPOT, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 95-3261426
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
2455 PACES FERRY ROAD, ATLANTA, GA 30339-4024
(Address of Principal Executive Offices) (Zip Code)
THE MAINTENANCE WAREHOUSE FUTUREBUILDER
(Full title of the plan)
-------------------------
ARTHUR M. BLANK COPIES REQUESTED TO:
PRESIDENT & CHIEF EXECUTIVE OFFICER KELLY R. CAFFARELLI, ESQ.
THE HOME DEPOT, INC. THE HOME DEPOT, INC.
2455 PACES FERRY ROAD 2455 PACES FERRY ROAD
ATLANTA, GEORGIA 30339-4024 ATLANTA, GEORGIA 30339-4024
(770) 433-8211
(Name, address and telephone number of agent for service)
-------------------------
CALCULATION OF REGISTRATION FEE
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- ----------------------------------------------------------------------------------------------------------------------------------
Proposed
Proposed Maximum
Maximum Aggregate Amount of
Title of Securities Amount to be Offering Price Offering Registration
to be Registered Registered Per Share (*) Price (*) Fee
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock(**)
($.05 par value) 15,000 $80.00 $1,200,000 $316.80
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
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- ----------------
(*) Estimated solely for the purpose of calculating the registration fee
based on the average of the high and low prices on November 30, 1999,
pursuant to Rule 457 (c) and (h) under the Securities Act of 1933, as
amended.
(**) In addition, pursuant to Rule 416(c) under the Securities Act of 1933,
this registration statement also covers an indeterminate amount of interests
to be offered or sold pursuant to the employee benefit plan described
herein.
<PAGE>
EXPLANATORY NOTE
In accordance with the Note to Part I of Form S-8, the information
specified by Part I has been omitted from this Registration Statement.
PART II.
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents have been filed by The Home Depot, Inc. (the
"Registrant") with the Securities and Exchange Commission (the "Commission") and
are hereby incorporated by reference in this Registration Statement:
(1) The Registrant's Annual Report on Form 10-K for the year ended
January 31, 1999, as filed with the Commission pursuant to
Section 13 of the Securities Exchange Act of 1934, as amended
(the "1934 Act"); and
(2) The Registrant's Quarterly Reports on Form 10-Q for fiscal
quarters ended May 2, 1999 and August 1, 1999, and
(3) The section entitled "Description of Common Stock" in
Registrant's Report on Form 8-A, filed with the Commission
pursuant to the 1934 Act.
All documents subsequently filed by the Registrant and The Maintenance
Warehouse FutureBuilder (the "Plan") with the Commission pursuant to Sections
13(a), 13(c), 14, or 15(d) of the 1934 Act, prior to the filing of a
post-effective amendment which indicates that all securities offered have been
sold or which deregisters all securities then remaining unsold, shall be deemed
to be incorporated by reference in this Registration Statement and to be a part
thereof from the date of filing of such documents.
ITEM 4. DESCRIPTION OF SECURITIES.
Not Applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
The legality of the Common Stock covered hereby has been passed upon
for The Home Depot, Inc. by Kelly R. Caffarelli, Esq., Corporate Counsel. Ms.
Caffarelli owns shares of Common Stock, both directly and as a participant in
various employee benefit plans; however, she is not eligible to participate in
the Plan.
2
<PAGE>
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article IV, Section 4, of the Registrant's Restated By-Laws provides
that to the fullest extent permitted by Delaware law, each former, present or
future, director, officer, employee or agent of the Registrant, and each person
who may serve at the request of the Registrant as a director, officer, employee
or agent of another corporation, partnership, joint venture, trust or other
enterprise shall be indemnified by the Registrant in all events.
Article NINTH of the Registrant's Restated Certificate of Incorporation
provides that to the fullest extent permitted by Delaware law, no director of
the Registrant shall be liable to the Registrant or its stockholders for
monetary damages for breach of fiduciary duty as a director, except for
liability (i) for any breach of the director's duty of loyalty to the Registrant
or its stockholders, (ii) for acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of law, (iii) under
Section 174 of the Delaware General Corporation Law, or (iv) for any transaction
from which the director derived an improper personal benefit.
Section 145 of the General Corporation Law of the State of Delaware
sets forth the applicable terms, conditions and limitations governing the
indemnification of officers, directors and other persons.
In addition, the Registrant maintains officers' and directors'
liability insurance for the benefit of its officers and directors.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not Applicable.
ITEM 8. EXHIBITS.
The following exhibits are filed as a part of this Registration
Statement:
4 The Maintenance Warehouse FutureBuilder
5 Opinion of Kelly R. Caffarelli.
23.1 Consent of Kelly R. Caffarelli, included in Exhibit 5
23.2 Consent of KPMG LLP, Independent Certified Public
Accountants
24 Powers of Attorney from Directors
3
<PAGE>
ITEM 9. UNDERTAKINGS.
With respect to the Plan, the Registrant undertakes that the Plan will be
submitted to the Internal Revenue Service (the "IRS") in a timely manner and
that the Registrant will make all changes required by the IRS in order to obtain
a favorable determination letter with respect to the qualification of the Plan
under Section 401(a) of the Internal Revenue Code.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement to include any
material information with respect to the plan of distribution not previously
disclosed in the registration statement or any material change to such
information in the Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new Registration Statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
(4) That for the purposes of determining any liability under the
Securities Act of 1933, each filing of the Registrant's annual report pursuant
to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934, and
each filing of the Plan's annual report pursuant to Section 15(d) of the
Securities and Exchange Act of 1934, that is incorporated by reference in the
Registration Statement shall be deemed to be a new Registration Statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(5) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Atlanta, State of Georgia, on this 1st day of
December, 1999.
THE HOME DEPOT, INC.
By: /s/ Arthur M. Blank
---------------------------------------------
(Arthur M. Blank, President and CEO)
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
/s/ Bernard Marcus Chairman of the Board December 1 ,1999
- ------------------- (Principal Executive Officer)
(Bernard Marcus)
/s/ Arthur M. Blank President & CEO December 1, 1999
- ------------------- and Director
(Arthur M. Blank)
/s/ Ronald M. Brill Chief Administrative Officer, December 1, 1999
- ------------------- Executive Vice President
(Ronald M. Brill) and Director
/s/ Dennis J. Carey Executive Vice President and December 1, 1999
- ------------------- Chief Financial Officer
(Dennis J. Carey) (Principal Financial Officer)
5
<PAGE>
Signature Title Date
--------- ----- ----
/s/ Marshall L. Day Senior Vice President- December 1, 1999
- ------------------- Finance & Accounting
(Marshall L. Day) (Principal Accounting Officer)
* Director
- -------------------
(Frank Borman)
* Director
- -------------------
(John L. Clendenin)
* Director
- -------------------
(Berry R. Cox)
* Director
- -------------------
(William S. Davila)
* Director
- -------------------
(Milledge A. Hart, III)
* Director
- -------------------
(Bonnie G. Hill)
* Director
- -------------------
(Kenneth G. Langone)
* Director
- -------------------
(M. Faye Wilson)
* The undersigned, by signing his name hereto, does hereby sign this
registration statement on behalf of each of the above-indicated directors
of the Registrant pursuant to powers of attorney, executed on behalf of
each such director.
By: /s/Arthur M. Blank
-----------------------------------
(Arthur M. Blank, Attorney-in-fact)
6
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed on behalf of the Plan by the undersigned, thereunto
duly authorized, in the City of Atlanta, State of Georgia, on this 1st day of
December, 1999.
THE MAINTENANCE WAREHOUSE FUTUREBUILDER
By: /s/ Lawrence A. Smith
-----------------------------------
(Lawrence A. Smith, Member,
Administrative Committee)
7
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INDEX TO EXHIBITS
Exhibit No.
- -----------
4 The Maintenance Warehouse FutureBuilder
5 Opinion of Kelly R. Caffarelli
23.1 Consent of Kelly R. Caffarelli (included in Exhibit 5 above)
23.2 Consent of KPMG LLP, Independent Certified Public Accountants
24 Powers of Attorney from Directors
8
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THE MAINTENANCE WAREHOUSE FUTUREBUILDER
A 401(k) AND STOCK OWNERSHIP PLAN
<PAGE>
THE MAINTENANCE WAREHOUSE FUTUREBUILDER
A 401(k) AND STOCK OWNERSHIP PLAN
Effective as of the 1st day of December, 1999, Maintenance
Warehouse/America Corp., a corporation duly organized and existing under the
laws of the State of Texas (the "Controlling Company"), hereby amends and
restates the Maintenance Warehouse 401(k) Savings Plan, which shall hereafter be
called "The Maintenance Warehouse FutureBuilder" (the "Plan").
STATEMENT OF PURPOSE
A. The Controlling Company originally adopted the Maintenance Warehouse
401(k) Savings Plan, effective as of March 17, 1997. Effective December 1, 1999,
the Plan is hereby amended, restated and renamed "The Maintenance Warehouse
FutureBuilder."
B. The Plan, as set forth in this document, is intended and should be
construed as a restatement and continuation of the Plan as previously in effect.
C. The primary purpose of the Plan is to recognize the contributions
made to the participating companies by employees and to reward those
contributions by providing eligible employees with an opportunity to accumulate
savings for their future security.
<PAGE>
D. The Controlling Company intends that the Plan be a plan qualified
under Section 401(a) and 401(k) of the Internal Revenue Code of 1986, as
amended.
STATEMENT OF AGREEMENT
To amend, restate and rename the Plan with the purposes and goals as
herein above described, the Controlling Company hereby sets forth the terms and
provisions as follows:
<PAGE>
THE MAINTENANCE WAREHOUSE FUTUREBUILDER
TABLE OF CONTENTS
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ARTICLE I
DEFINITIONS..............................................................................................1
1.1 Account......................................................................................1
1.2 ACP or Average Contribution Percentage.......................................................1
1.3 ACP Tests....................................................................................1
1.4 Active Participant...........................................................................1
1.5 Administrative Committee.....................................................................2
1.6 ADP or Actual Deferral Percentage............................................................2
1.7 ADP Tests....................................................................................2
1.8 Affiliate....................................................................................2
1.9 Annual Addition..............................................................................2
1.10 Basic Matching Contribution..................................................................2
1.11 Before-Tax Account...........................................................................3
1.12 Before-Tax Contributions.....................................................................3
1.13 Beneficiary..................................................................................3
1.14 Board........................................................................................3
1.15 Break in Service.............................................................................3
(a) Leave of Absence.......................................................................3
(b) Maternity or Paternity Leave...........................................................3
(c) Family and Medical Leave Act...........................................................3
1.16 Business Day.................................................................................4
1.17 Code.........................................................................................4
1.18 Company Stock ...............................................................................4
1.19 Compensation.................................................................................4
(a) Benefit Compensation...................................................................4
(b) Section 404 Compensation...............................................................5
(c) Section 415 Compensation...............................................................5
(d) Key Employee Compensation..............................................................5
(e) Testing Compensation...................................................................5
1.20 Contributions................................................................................5
1.21 Controlling Company..........................................................................5
1.22 Covered Employee.............................................................................5
1.23 Deferral Election............................................................................6
1.24 Defined Benefit Minimum......................................................................6
1.25 Defined Benefit Plan.........................................................................6
1.26 Defined Benefit Plan Fraction................................................................6
1.27 Defined Contribution Minimum.................................................................6
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1.28 Defined Contribution Plan....................................................................6
1.29 Defined Contribution Plan Fraction...........................................................6
1.30 Determination Date...........................................................................6
1.31 Disability or Disabled.......................................................................6
1.32 Effective Date...............................................................................7
1.33 Elective Deferrals...........................................................................7
1.34 Eligible Participant.........................................................................7
1.35 Eligible Retirement Plan.....................................................................7
1.36 Eligible Rollover Distribution...............................................................7
1.37 Employee.....................................................................................8
1.38 Employment Date..............................................................................8
1.39 Entry Date...................................................................................8
1.40 ERISA........................................................................................8
1.41 Forfeiture...................................................................................8
1.42 Highly Compensated Employee..................................................................8
(a) General Rule...........................................................................8
(b) Excluded Employees.....................................................................9
(c) Former Employees.......................................................................9
(d) Nonresident Aliens.....................................................................9
(e) Compliance with Code Section 414(q)....................................................9
1.43 Home Depot...................................................................................9
1.44 Home Depot Board.............................................................................9
1.45 Hour of Service.............................................................................10
(a) General Rule..........................................................................10
(b) Equivalencies.........................................................................11
(c) Changes by Administrative Committee...................................................11
(d) Computation Period....................................................................11
1.46 Investment Committee........................................................................11
1.47 Investment Fund or Funds....................................................................11
1.48 Investment Manager..........................................................................11
1.49 Involuntary Cashout Amount..................................................................11
1.50 Key Employee................................................................................12
1.51 Leave of Absence............................................................................12
1.52 Limitation Year.............................................................................12
1.53 Matching Account............................................................................12
1.54 Matching Contributions......................................................................12
1.55 Maternity or Paternity Leave................................................................12
1.56 Maximum Deferral Amount.....................................................................12
1.57 Named Fiduciary.............................................................................12
1.58 Non-Key Employee............................................................................12
1.59 Normal Retirement Age.......................................................................12
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1.60 Participant.................................................................................12
1.61 Participating Company.......................................................................12
1.62 Permissive Aggregation Group................................................................13
1.63 Plan........................................................................................13
1.64 Plan Year...................................................................................13
1.65 QNEC Account................................................................................13
1.66 Qualified Non-Elective Contributions or QNECs...............................................13
1.67 Qualified Spousal Waiver....................................................................13
1.68 Required Aggregation Group..................................................................13
1.69 Restoration Contributions...................................................................13
1.70 Rollover Account............................................................................13
1.71 Rollover Contributions......................................................................13
1.72 Spouse or Surviving Spouse..................................................................14
1.73 Supplemental Annual Matching Contributions..................................................14
1.74 Top-Heavy Group.............................................................................14
1.75 Top-Heavy Plan..............................................................................14
1.76 Transfer Account............................................................................14
1.77 Transfer Contributions......................................................................14
1.78 Trust or Trust Agreement....................................................................14
1.79 Trustee.....................................................................................15
1.80 Trust Fund..................................................................................15
1.81 Valuation Date..............................................................................15
1.82 Year of Eligibility Service.................................................................15
(a) Computation Period....................................................................15
(b) Predecessor Employer..................................................................15
(c) Service Counted under The Home Depot FutureBuilder....................................15
1.83 Year of Vesting Service.....................................................................15
(a) Pre-Break Service.....................................................................15
(b) Post-Break Service....................................................................15
(c) Predecessor Plan......................................................................16
(d) Predecessor Employer..................................................................16
(e) Service Counted under The Home Depot FutureBuilder....................................16
ARTICLE II
ELIGIBILITY.............................................................................................17
2.1 Initial Eligibility Requirements............................................................17
(a) General Rule..........................................................................17
(b) Participation Upon Effective Date.....................................................17
(c) New Participating Companies...........................................................17
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2.2 Treatment of Interruptions of Service.......................................................17
(a) Termination Before Satisfying Eligibility Requirements................................17
(b) Termination Before Participation......................................................17
(c) Reparticipation Upon Reemployment.....................................................17
2.3 Change in Status............................................................................18
(a) Loss of Covered Employee Status.......................................................18
(b) Change to Covered Employee Status.....................................................18
(c) Change by Participant.................................................................18
ARTICLE III
CONTRIBUTIONS...........................................................................................19
3.1 Before-Tax Contributions....................................................................19
(a) Before-Tax Contributions..............................................................19
(b) Deferral Elections....................................................................19
3.2 Matching Contributions......................................................................20
(a) Basic Matching Contributions..........................................................20
(b) Supplemental Annual Matching Contributions............................................21
(c) Transitional Matching Contributions for December 1999.................................22
3.3 Qualified Non-Elective Contributions........................................................22
3.4 Form of Contributions.......................................................................22
3.5 Timing of Contributions.....................................................................22
(a) Before-Tax Contributions..............................................................22
(b) Matching and Qualified Non-Elective Contributions.....................................22
3.6 Contingent Nature of Contributions..........................................................23
3.7 Restoration Contributions...................................................................23
(a) Restoration of Forfeitures............................................................23
(b) Restoration Contribution..............................................................23
3.8 Reemployed Veterans.........................................................................23
ARTICLE IV
ROLLOVERS AND TRANSFERS BETWEEN PLANS...................................................................24
4.1 Rollover Contributions......................................................................24
(a) Request by Active Participant.........................................................24
(b) Acceptance of Rollover................................................................24
4.2 Transfer Contributions......................................................................24
(a) Direct Transfers Permitted............................................................24
(b) Mergers and Spin-offs Permitted.......................................................24
(c) Establishment of Transfer Accounts....................................................25
(d) Transfer Accounts.....................................................................25
4.3 Spin-offs to Other Plans....................................................................25
iv
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ARTICLE V
PARTICIPANTS' ACCOUNTS; CREDITING AND ALLOCATIONS.......................................................26
5.1 Establishment of Participants' Accounts.....................................................26
5.2 Allocation and Crediting of Before-Tax, Basic Matching,
Rollover and Transfer Contributions.........................................................26
5.3 Allocation and Crediting of Supplemental Annual Matching Contributions......................26
5.4 Allocation and Crediting of Qualified Non-Elective Contributions............................26
(a) General Provision.....................................................................26
(b) Per Capita QNECs......................................................................27
(c) Proportional QNECs....................................................................27
(d) Section 415 QNECs.....................................................................27
(e) Qualified Matching Contributions......................................................27
5.5 Allocation of Forfeitures...................................................................27
5.6 Allocation and Crediting of Investment Experience...........................................28
(a) Determination of Investment Experience................................................28
(b) Utilization of Investment Experience..................................................28
5.7 Allocation of Adjustments Upon Changes in Capitalization....................................28
5.8 Notice to Participants of Account Balances..................................................29
5.9 Good Faith Valuation Binding................................................................29
5.10 Errors and Omissions in Accounts............................................................29
ARTICLE VI
CONTRIBUTION AND SECTION 415 LIMITATIONS
AND NONDISCRIMINATION REQUIREMENTS......................................................................30
6.1 Deductibility Limitations...................................................................30
6.2 Maximum Limitation on Elective Deferrals....................................................30
(a) Maximum Elective Deferrals Under Participating Company Plans..........................30
(b) Return of Excess Before-Tax Contributions.............................................30
(c) Return of Excess Elective Deferrals Provided by
Other Participating Company Arrangements..............................................30
(d) Discretionary Return of Elective Deferrals............................................31
(e) Return of Excess Annual Additions.....................................................31
6.3 Nondiscrimination Requirements for Before-Tax Contributions.................................31
(a) ADP Test..............................................................................31
(b) Multiple Plans........................................................................32
(c) Adjustments to Actual Deferral Percentages............................................32
6.4 Nondiscrimination Requirements for Matching Contributions...................................33
(a) ACP Test..............................................................................33
(b) Multiple Plans........................................................................33
(c) Adjustments to Average Contribution Percentages.......................................33
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6.5 Multiple Use of Tests.......................................................................34
(a) Aggregate Limitation..................................................................34
(b) Multiple Plans........................................................................35
(c) Correction............................................................................35
(d) Application...........................................................................35
6.6 Order of Application........................................................................35
6.7 Code Section 415 Limitations on Maximum Contributions.......................................35
(a) General Limit on Annual Additions.....................................................35
(b) Combined Plan Limitation..............................................................36
(c) Correction of Excess Annual Additions.................................................36
(d) Special Definitions Applicable to Code Section 415 Limitations........................37
(e) Compliance with Code Section 415......................................................39
6.8 Construction of Limitations and Requirements................................................39
ARTICLE VII
INVESTMENTS.............................................................................................40
7.1 Establishment of Trust Account..............................................................40
7.2 Investment Funds............................................................................40
(a) Establishment of Investment Funds.....................................................40
(b) Reinvestment of Cash Earnings.........................................................40
7.3 Participant Direction of Investments........................................................40
(a) Investment of Contributions...........................................................40
(b) Investment of Existing Account Balances...............................................41
(c) Conditions Applicable to Elections....................................................41
(d) Restrictions on Investments...........................................................42
7.4 Valuation...................................................................................42
7.5 Voting and Tender Offer Rights with Respect to Investment Funds.............................42
7.6 Fiduciary Responsibilities for Investment Directions........................................42
7.7 Appointment of Investment Manager; Authorization to Invest in
Collective Trust............................................................................42
(a) Investment Manager....................................................................42
(b) Collective Trust......................................................................43
7.8 Value of Company Stock......................................................................43
7.9 Voting and Tender Offer Rights With Respect to Company Stock................................44
7.10 Purchase of Life Insurance..................................................................44
7.11 Transition Rule.............................................................................44
ARTICLE VIII
VESTING IN ACCOUNTS.....................................................................................45
8.1 Vesting.....................................................................................45
(a) General Vesting Rule..................................................................45
(b) Grandfathered Vesting.................................................................45
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8.2 Vesting Upon Attainment of Normal Retirement Age, Death or Disability.......................46
8.3 Timing of Forfeitures and Vesting after Restoration Contributions...........................46
(a) Reemployment and Vesting Before Any Distribution......................................46
(b) Reemployment and Vesting After Distribution...........................................46
8.4 Amendment to Vesting Schedule...............................................................47
ARTICLE IX
PAYMENT OF BENEFITS.....................................................................................48
9.1 Benefits Payable Upon Separation From Service for Reasons
Other Than Death............................................................................48
(a) General Rule Concerning Benefits Payable..............................................48
(b) Timing of Distribution................................................................48
(c) Restrictions on Distributions from Before-Tax and QNEC Accounts.......................49
(d) Delay Upon Reemployment or Termination of Disability..................................50
9.2 Death Benefits..............................................................................50
9.3 Manner of Distribution......................................................................51
(a) Method................................................................................51
(b) Direct Rollover Distributions.........................................................51
9.4 Cash-Out Payment of Benefits................................................................51
9.5 Qualified Domestic Relations Orders.........................................................51
9.6 Beneficiary Designation.....................................................................52
(a) General...............................................................................52
(b) No Designation or Designee Dead or Missing............................................52
9.7 Claims......................................................................................52
(a) Procedure.............................................................................52
(b) Review Procedure......................................................................53
(c) Satisfaction of Claims................................................................53
9.8 Explanation of Rollover Distributions.......................................................53
9.9 Unclaimed Benefits..........................................................................54
9.10 Transition Rule.............................................................................54
ARTICLE X
IN-SERVICE WITHDRAWALS AND LOANS........................................................................55
10.1 Hardship Withdrawals........................................................................55
(a) Parameters of Hardship Withdrawals....................................................55
(b) Immediate and Heavy Financial Need....................................................55
(c) Necessary to Satisfy a Financial Need.................................................55
(d) Form of Distribution..................................................................56
(e) Source of Funds.......................................................................56
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10.2 Age 65 Withdrawals..........................................................................56
(a) Conditions............................................................................56
(b) Source of Funds.......................................................................56
(c) Method................................................................................56
10.3 Rollover Account Withdrawals................................................................56
10.4 Election to Withdraw........................................................................57
10.5 Payment of Withdrawal.......................................................................57
10.6 Loans to Participants.......................................................................57
(a) Grant of Authority....................................................................57
(b) Nondiscriminatory Policy..............................................................57
(c) Minimum Loan Amount...................................................................57
(d) Maximum Loan Amount...................................................................58
(e) Maximum Loan Term.....................................................................58
(f) Terms of Repayment....................................................................58
(g) Adequacy of Security..................................................................59
(h) Rate of Interest......................................................................59
(i) Source of Loan Amounts................................................................59
(j) Crediting Loan Payments to Accounts...................................................59
(k) Remedies in the Event of Default......................................................60
(l) Qualified Military Service............................................................60
10.7 Transition Rule.............................................................................60
ARTICLE XI
ADMINISTRATION..........................................................................................61
11.1 Administrative Committee....................................................................61
(a) Appointment...........................................................................61
(b) Certification.........................................................................61
11.2 Organization of Administrative Committee....................................................61
11.3 Powers and Responsibility...................................................................61
11.4 Records of Administrative Committee.........................................................62
(a) Notices and Directions................................................................62
(b) Records...............................................................................62
11.5 Delegation..................................................................................63
11.6 Reporting and Disclosure....................................................................63
11.7 Construction of the Plan....................................................................63
11.8 Assistants and Advisors.....................................................................63
(a) Engaging Advisors.....................................................................63
(b) Reliance on Advisors..................................................................64
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11.9 Investment Committee........................................................................64
(a) Funding Policy........................................................................64
(b) Appointment...........................................................................64
(c) Duties................................................................................64
11.10 Direction of Trustee........................................................................65
11.11 Bonding.....................................................................................65
11.12 Indemnification.............................................................................65
ARTICLE XII
ALLOCATION OF AUTHORITY AND RESPONSIBILITIES............................................................66
12.1 Authority and Responsibilities..............................................................66
(a) General Responsibilities..............................................................66
(b) Authority of Participating Companies..................................................66
12.2 Administrative Committee....................................................................66
12.3 Investment Committee........................................................................66
12.4 Trustee.....................................................................................66
12.5 Limitations on Obligations of Fiduciaries...................................................67
12.6 Delegation..................................................................................67
12.7 Multiple Fiduciary Roles....................................................................67
ARTICLE XIII
AMENDMENT, TERMINATION AND ADOPTION.....................................................................68
13.1 Amendment...................................................................................68
13.2 Termination.................................................................................68
(a) Right to Terminate....................................................................68
(b) Vesting Upon Complete Termination.....................................................68
(c) Dissolution of Trust..................................................................69
(d) Vesting Upon Partial Termination......................................................69
13.3 Adoption of the Plan by a Participating Company.............................................69
(a) Procedures for Participation..........................................................69
(b) Single Plan...........................................................................70
(c) Authority under Plan..................................................................70
(d) Contributions to Plan.................................................................70
(e) Withdrawal from Plan..................................................................70
13.4 Merger, Consolidation and Transfer of Assets or Liabilities.................................71
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ARTICLE XIV
TOP-HEAVY PROVISIONS....................................................................................72
14.1 Top-Heavy Plan Years........................................................................72
14.2 Determination of Top-Heavy Status...........................................................72
(a) Application...........................................................................72
(b) Special Definitions...................................................................72
(c) Special Rules.........................................................................74
14.3 Top-Heavy Minimum Contribution..............................................................75
(a) Multiple Defined Contribution Plans...................................................75
(b) Defined Contribution and Benefit Plans................................................75
(c) Defined Contribution Minimum..........................................................75
(d) Defined Benefit Minimum...............................................................76
14.4 Top-Heavy Minimum Vesting...................................................................77
14.5 Adjustments in Code section 415 Limitations for Top-Heavy Plans.............................77
(a) Special Adjustment....................................................................77
(b) Exception.............................................................................77
14.6 Construction of Limitations and Requirements................................................77
ARTICLE XV
MISCELLANEOUS...........................................................................................79
15.1 Nonalienation of Benefits and Spendthrift Clause............................................79
(a) General Nonalienation Requirements....................................................79
(b) Exception for Qualified Domestic Relations Orders.....................................79
(c) Exception for Loans from the Plan.....................................................79
15.2 Headings....................................................................................80
15.3 Construction; Controlling Law...............................................................80
15.4 No Contract of Employment...................................................................80
15.5 Legally Incompetent.........................................................................80
15.6 Heirs, Assigns and Personal Representatives.................................................80
15.7 Title to Assets, Benefits Supported Only By Trust Fund......................................80
15.8 Legal Action................................................................................81
15.9 No Discrimination...........................................................................81
15.10 Severability................................................................................81
15.11 Exclusive Benefit; Refund of Contributions..................................................81
(a) Permitted Refunds.....................................................................81
(b) Payment of Refund.....................................................................82
(c) Limitation on Refund..................................................................82
15.12 Plan Expenses...............................................................................82
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15.13 Special Effective Dates.....................................................................82
(a) Intent of Plan........................................................................82
(b) Compliance............................................................................82
15.14 Contingency for Year 2000 Noncompliance. ..................................................83
SCHEDULE A PARTICIPATING COMPANIES AND EFFECTIVE DATES................................................A-1
</TABLE>
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ARTICLE I
DEFINITIONS
For purposes of the Plan, the following terms, when used with an
initial capital letter, shall have the meanings set forth below unless a
different meaning plainly is required by the context.
1.1 ACCOUNT shall mean, with respect to a Participant or Beneficiary,
the amount of money or other property in the Trust Fund, as is evidenced by the
last balance posted in accordance with the terms of the Plan to the account
record established for such Participant or Beneficiary. The Administrative
Committee, as required by the terms of the Plan and otherwise as it deems
necessary or desirable in its sole discretion, may establish and maintain
separate subaccounts for each Participant and Beneficiary, provided allocations
are made to such subaccounts in the manner described in Article V of the Plan.
"Account" shall refer to the aggregate of all separate subaccounts or to
individual, separate subaccounts, as may be appropriate in context.
1.2 ACP OR AVERAGE CONTRIBUTION PERCENTAGE shall mean, with respect to
a specified group of Participants for a Plan Year, the average of the ratios
(calculated separately for each Participant in such group and rounded to the
nearest 1/100th of a percent) of (i) the total of the amount of Matching
Contributions and, to the extent designated by the Administrative Committee, the
Before-Tax and/or Qualified Non-Elective Contributions (excluding Before-Tax
and/or Qualified Non-Elective Contributions counted for purposes of Section 6.3
and any Contributions returned to a Participant or otherwise removed from his
Account to correct excess Annual Additions) actually paid to the Trustee on
behalf of each such Participant for a specified Plan Year, to (ii) such
Participant's Compensation for such specified Plan Year. If a Highly Compensated
Employee participates in the Plan and one or more other plans of any Affiliates
to which matching or after-tax contributions are made (other than a plan for
which aggregation with the Plan is not permitted), the matching and after-tax
contributions made with respect to such Highly Compensated Employee shall be
aggregated for purposes of determining his ACP. The ACP shall be calculated in a
manner consistent with the terms of Code Section 401(m) and the regulations
promulgated thereunder. If a Participant is eligible to participate in the Plan
for all or a portion of a Plan Year by reason of satisfying the eligibility
requirements of Article II but makes no Before-Tax Contributions which are taken
into account (as described above) for purposes of calculating his ACP, and if he
receives no allocations of Matching Contributions or Qualified Non-Elective
Contributions which are taken into account (as described above) for purposes of
calculating his ACP, such Participant's ACP for such Plan Year shall be zero.
1.3 ACP TESTS shall mean, collectively, the nondiscrimination tests
described in Section 6.4 and Section 6.5.
1.4 ACTIVE PARTICIPANT shall mean, for any Plan Year (or any portion
thereof), any Covered Employee who, pursuant to the terms of Article II, has
been admitted to, and not removed from, active participation in the Plan since
the last date his employment commenced or recommenced.
<PAGE>
1.5 ADMINISTRATIVE COMMITTEE shall mean the committee which shall
administer the Plan, all as provided in Article XI. The Administrative Committee
shall be the plan administrator, as that term is defined in Code Section 414(g).
1.6 ADP OR ACTUAL DEFERRAL PERCENTAGE shall mean, with respect to a
specified group of Participants for a Plan Year, the average of the ratios
(calculated separately for each Participant in such group and rounded to the
nearest 1/100th of a percent) of (i) the total of the amount of Before-Tax
Contributions (excluding Before-Tax Contributions, if any, designated by the
Administrative Committee to be taken into account under Section 6.4 to help
satisfy the ACP Tests, or returned to a Participant to correct excess Annual
Additions) and, to the extent designated under Section 6.3(b) by the
Administrative Committee, the Qualified Non-Elective Contributions [excluding
the Qualified Non-Elective Contributions counted for purposes of Section 6.4(c)]
made on behalf of each such Participant for a specified Plan Year, to (ii) such
Participant's Compensation for such specified Plan Year. If a Highly Compensated
Employee participates in the Plan and one or more other plans of any Affiliates
to which before-tax contributions are made (other than a plan for which
aggregation with the Plan is not permitted), the before-tax contributions made
with respect to such Highly Compensated Employee shall be aggregated for
purposes of determining his ADP. The ADP shall be calculated in a manner
consistent with the terms of Code Section 401(k) and the regulations promulgated
thereunder. If a Participant is eligible to participate in the Plan for all or a
portion of a Plan Year by reason of satisfying the eligibility requirements of
Article II but makes no Before-Tax Contributions and receives no allocation of
Qualified Non-Elective Contributions that are taken into account for purposes of
the ADP Tests, such Participant's ADP for such Plan Year shall be zero percent.
1.7 ADP TESTS shall mean the nondiscrimination tests described in
Section 6.3 and Section 6.5.
1.8 AFFILIATE shall mean, as of any date, (i) a Participating Company,
and (ii) any company, person or organization which, on such date, (A) is a
member of the same controlled group of corporations [within the meaning of Code
Section 414(b)] as is a Participating Company; (B) is a trade or business
(whether or not incorporated) which controls, is controlled by or is under
common control [within the meaning of Code Section 414(c)] with a Participating
Company; (C) is a member of an affiliated service group [as defined in Code
Section 414(m)] which includes a Participating Company; or (D) is required to be
aggregated with a Participating Company pursuant to regulations promulgated
under Code Section 414(o); provided, solely for purposes of Section 6.7, the
term "Affiliate" as defined in this Section shall be deemed to include any
corporation that would be an Affiliate if the phrase "more than 50 percent" were
substituted for the phrase "at least 80 percent" in each place the latter phrase
appears in Code Section 1563(a)(1).
1.9 ANNUAL ADDITION shall mean the sum of the amounts described in
Section 6.7(d)(1).
1.10 BASIC MATCHING CONTRIBUTION shall mean the amounts paid by each
Participating Company to the Trust Fund as a basic match to Participants'
Before-Tax Contributions as provided in Section 3.2(a).
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1.11 BEFORE-TAX ACCOUNT shall mean the separate subaccount established
and maintained on behalf of a Participant or Beneficiary to reflect his interest
in the Trust Fund attributable to Before-Tax Contributions.
1.12 BEFORE-TAX CONTRIBUTIONS shall mean the before-tax amounts paid by
each Participating Company to the Trust Fund at the election of Participants
pursuant to Section 3.1.
1.13 BENEFICIARY shall mean the person(s) designated in accordance with
Section 9.6 to receive any death benefits that may be payable under the Plan
upon the death of a Participant.
1.14 BOARD shall mean the board of directors of the Controlling
Company; provided, to the extent any Committee of the Board has the authority to
act on behalf of the Board, an action taken by such committee shall be treated
as an action by the Board. A reference to the board of directors of any other
Participating Company shall specify it as such.
1.15 BREAK IN SERVICE means any Plan Year during which an Employee
fails to complete at least 1 Hour of Service; provided, in determining whether a
Break in Service has occurred, the terms of subsections (a), (b) and (c) hereof
shall apply.
(a) LEAVE OF ABSENCE. A Break in Service shall not be deemed
to have occurred during any period for which he is granted a Leave of Absence.
(b) MATERNITY OR PATERNITY LEAVE. For purposes of determining
whether or not an Employee has incurred a Break in Service, an Employee absent
from work due to a Maternity or Paternity Leave shall be credited with at least
1 Hour of Service in the year in which the Maternity or Paternity Leave begins,
unless such Hour of Service is not required to prevent the Employee from
incurring a Break in Service in such year, in which event such Hour of Service
shall be credit to the Employee in the immediately following year. No Hour of
Service shall be credited due to Maternity or Paternity Leave as described in
this Section unless the Employee furnishes proof satisfactory to the
Administrative Committee (A) that his absence from work was due to a Maternity
or Paternity and (B) of the number of days he was absent due to the Maternity or
Paternity Leave. The Administrative Committee shall prescribe uniform and
nondiscriminatory procedures by which to make the above determinations.
(c) FAMILY AND MEDICAL LEAVE ACT. In addition, solely for the
purpose of avoiding a Break in Service, to the extent required under the Family
and Medical Leave Act of 1993 and the regulations thereunder, an Employee shall
be deemed to be performing services for an Affiliate during any period the
Employee is granted leave under such Act for (i) the birth of a child, (ii) the
placement with the Employee of a child for adoption or foster care, (iii) to
care for the spouse or a child or parent of the Employee with a serious health
condition, or (iv) for a serious health condition that makes the Employee unable
to perform the functions of the Employee's job.
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1.16 BUSINESS DAY shall mean each day on which the Trustee operates and
is open to the public for its business.
1.17 CODE shall mean the Internal Revenue Code of 1986, as amended.
1.18 COMPANY STOCK means the $.05 par value per share common stock of
Home Depot.
1.19 COMPENSATION shall have the meaning set forth in subsection (a),
(b), (c), (d) or (e) hereof, whichever is applicable:
(a) BENEFIT COMPENSATION. For purposes of determining the
amount of Before-Tax Contributions under Section 3.1, determining the amount of
Matching Contributions under Section 3.2, allocating Qualified Non-Elective
Contributions under Section 5.4, and for all other purposes except those set
forth in subsections (b), (c), (d) and (e) hereof, "Compensation" shall mean,
for any Plan Year, the total of the amounts described in subsections (a)(1) and
(2), minus the amounts described in subsections (a)(3), (4), (5) and (6), as
follows:
(1) all of a Participant's wages as defined in Code
Section 3401(a) for purposes of income tax withholding at the source
that are reportable for federal income tax purposes on IRS Form W-2,
but determined without regard to any rules that limit the remuneration
included in wages based on the nature or location of employment or the
services performed [such as the exception for agricultural labor in
Code Section 3401(a)(2)]; PLUS
(2) all before-tax, salary deferral or reduction
contributions made to the Plan and other Code Section 401(k) and Code
Section 125 plans of the Affiliates on behalf of a Participant for such
Plan Year [including any contributions made under Code Section
402(e)(3), Section 402(h)(1)(B) or Section 403(b)]; MINUS
(3) all amounts included in subsection (a)(1) or (2)
hereof that consist of reimbursements or other expense allowances,
fringe benefits (cash and noncash), moving expenses, deferred
compensation and welfare benefits (even if includable in gross income);
MINUS
(4) any amounts paid to a Participant during the
Plan Year while he is not an Active Participant; MINUS
(5) all amounts included in subsection (a)(1) or (2)
that consist of payments under a legal settlement or judgment involving
the Controlling Company or an Affiliate, unless such settlement or
judgment expressly provides that such payments are to be taken into
account for purposes of determining a Participant's benefits under the
Plan; and MINUS
4
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(6) all Compensation in excess of $160,000 ($170,000
beginning with 2000), as adjusted by the Secretary of the Treasury
under Code Section 401(a)(17) for cost of living increases. In
determining the Compensation of a Participant for purposes of the Code
Section 401(a)(17) limitation, the rules of Code Section 414(q)(6)
shall apply.
(b) SECTION 404 COMPENSATION. Solely for purposes of Section
6.1 (relating to maximum deductible contribution limitations under Code Section
404) and Section 14.3 (relating to minimum Contributions under a Top-Heavy
Plan), "Compensation" shall mean, with respect to a Participant for a specified
period, the amounts from all Affiliates referred to in subsection (a)(1) hereof
minus the amounts described in subsection (6) hereof.
(c) SECTION 415 COMPENSATION. Solely for the purpose of
Section 3.2(b) (relating to who are the highest paid Highly Compensated
Employees) and Section 6.7 (relating to maximum contribution and benefit
limitations under Code Section 415), "Compensation" shall mean, with respect to
a Participant for a Limitation Year, the amounts from all Affiliates referred to
in subsection (a)(1) hereof, PLUS, for all Limitation Years beginning on and
after January 1, 1998, the total of the amounts from all Affiliates determined
under subsection (a)(2) hereof.
(d) KEY EMPLOYEE COMPENSATION. Solely for purposes of
determining which Employees are Key Employees under Section 14.2 and which
Employees are Highly Compensated Employees under Section 1.42, for any
applicable Plan Year, "Compensation" shall mean the total of the amounts from
all Affiliates determined under subsections (a)(1) plus (a)(2) hereof.
(e) TESTING COMPENSATION. For purposes of performing
discrimination testing to ensure compliance with Code Section 401(a)(4), Section
401(k) and Section 401(m), "Compensation" generally shall mean the total of the
amounts from all Affiliates determined under subsections (a)(1) and (a)(2),
minus the amounts described in subsections (a)(4) and (a)(6); provided, on a
plan year-by-plan year basis, the Administrative Committee may elect to use the
definition of "Compensation" as set forth in subsection (b) or (c) hereof or any
other definition that satisfies the nondiscrimination requirements of Code
Section 414(s).
1.20 CONTRIBUTIONS shall mean, individually or collectively, the
Before-Tax, Matching, Qualified NonElective, Restoration, Rollover and Transfer
Contributions permitted under the Plan.
1.21 CONTROLLING COMPANY shall mean Maintenance Warehouse/America
Corp., a Texas corporation, and its successors which adopt the Plan.
1.22 COVERED EMPLOYEE shall mean an Employee of a Participating Company
each year, other than:
(a) An Employee who is a member of a collective bargaining
unit for which a savings plan was the subject of negotiations between the
Participating Company of the Employee
5
<PAGE>
and the bargaining unit, unless the terms of the collective bargaining agreement
require that the Employee be eligible to participate in the Plan;
(b) An Employee who is a "leased employee" within the
meaning of Code Section 414(n);
(c) An Employee who is a nonresident alien who receives no
earned income from an Affiliate that constitutes income from sources within the
United States; or
(d) An individual who is classified as an independent
contractor or leased employee under a Participating Company's customary worker
classification practices, regardless of whether such person is an Employee.
1.23 DEFERRAL ELECTION shall mean an election by an Active Participant
directing the Participating Company of which he is an Employee to withhold a
percentage of his current Compensation from his paychecks and to contribute such
withheld amounts to the Plan as Before-Tax Contributions, all as provided in
Section 3.1.
1.24 DEFINED BENEFIT MINIMUM shall mean the minimum benefit level as
described in Section 14.3(d).
1.25 DEFINED BENEFIT PLAN shall mean a plan described in
Section 6.7(d)(2).
1.26 DEFINED BENEFIT PLAN FRACTION shall mean the fraction described in
Section 6.7(d)(3).
1.27 DEFINED CONTRIBUTION MINIMUM shall mean the minimum contribution
level as described in Section 14.3(c).
1.28 DEFINED CONTRIBUTION PLAN shall mean a plan described in
Section 6.7(d)(4).
1.29 DEFINED CONTRIBUTION PLAN FRACTION shall mean the fraction
described in Section 6.7(d)(5).
1.30 DETERMINATION DATE shall mean the date described in Section
14.2(b)(1).
1.31 DISABILITY OR DISABLED means that a Participant is wholly
prevented from engaging in any substantial gainful employment activity by reason
of a medically determinable physical or mental impairment that can be expected
to result in death or to be of long-continued and indefinite duration. The
determination of Disability shall be made by the Administrative Committee or an
entity or person appointed by the Administrative Committee; provided, until the
Administrative Committee determines otherwise, such determination shall be made
by an insurance carrier that offers long-term disability insurance to the public
and that is selected by the Administrative Committee. In determining whether a
Participant has suffered a Disability, the Administrative Committee or its
designee may require such medical proof as it deems necessary, including the
6
<PAGE>
certificate of one or more licensed physicians selected by the Administrative
Committee. The decision of the Administrative Committee as to Disability shall
be final and binding. Notwithstanding anything herein to the contrary, a
Participant shall be deemed to be Disabled upon a determination by the Social
Security Administration, while the Participant is an Employee, that the
Participant is eligible for Social Security disability benefits.
1.32 EFFECTIVE DATE shall mean December 1, 1999, the date that this
restatement of the Plan generally shall be effective; provided, any effective
date specified herein for any provision, if different from the Effective Date,
shall control. The Plan was initially effective March 17, 1997. The effective
date of participation in the Plan for each Participating Company shall be the
date set forth with respect to the Participating Company in Schedule A hereto.
1.33 ELECTIVE DEFERRALS shall mean, with respect to a Participant for
any calendar year, the total amount of his Before-Tax Contributions plus such
other amounts as shall be determined pursuant to the terms of Code
Section 402(g)(3).
1.34 ELIGIBLE PARTICIPANT shall mean, for purposes of allocating
Qualified Non-Elective Contributions for any Plan Year pursuant to Section 5.4
hereof, any individual who was not a Highly Compensated Employee.
1.35 ELIGIBLE RETIREMENT PLAN which is a defined contribution plan, the
terms of which permit the acceptance of rollover distributions and which is
either (i) an individual retirement account described in Code Section 408(a),
(ii) an individual retirement annuity described in Code Section 408(b) (other
than an endowment contract), (iii) a qualified trust described in Code Section
401(a) and exempt from tax under Code Section 501(a), or (iv) an annuity plan
described in Code Section 403(a). In the case of a distribution to the Surviving
Spouse, Eligible Retirement Plan shall mean the Plan described in either clause
(i) or (ii) hereof.
1.36 ELIGIBLE ROLLOVER DISTRIBUTION shall mean any distribution to (i)
a Participant, (ii) his Surviving Spouse (after his death), or (iii) his Spouse
or former Spouse who is his alternate payee under a qualified domestic relations
order (see Section 9.5 and Section 15.1), of all or any portion of the balance
to his credit in a qualified trust (including any distribution to a Participant
of all or any portion of his Account); provided, an "Eligible Rollover
Distribution" shall not include (i) any distribution which is one of a series of
substantially equal periodic payments made, not less frequently than annually,
(A) for the life (or life expectancy) of the employee or the joint lives (or
joint life expectancies) of the employee and his beneficiary, or (B) for a
specified period of 10 years or more, (ii) any distribution to the extent such
distribution is required under Code Section 401(a)(9), (iii) the portion of any
distribution that is not includable in gross income of the employee, (iv)
distributions which total less than $200 during the Plan Year, and (v) effective
for any hardship withdrawal distributed on or after December 1, 1999, any
portion of such withdrawal paid from a Participant's Before-Tax Account.
7
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1.37 EMPLOYEE shall mean any individual who is employed by an Affiliate
(including officers, but excluding independent contractors and directors who are
not officers or otherwise employees) and shall include leased employees of an
Affiliate within the meaning of Code Section 414(n). Notwithstanding the
foregoing, if leased employees constitute 20 percent or less of an Affiliate's
nonhighly compensated work force within the meaning of Code Section
414(n)(5)(C)(ii), the term "Employee" shall not include those leased employees
covered by a plan described in Code Section 414(n)(5)(B).
1.38 EMPLOYMENT DATE shall mean, with respect to any Employee, the date
on which he first completes an Hour of Service. Unless otherwise determined by
the Administrative Committee, if an Employee was employed by one or more
companies or enterprises acquired by or merged into, or all or a portion of the
assets or business of which are acquired by, an Affiliate, such Employee's
Employment Date shall be the date on which he first completed an Hour of Service
with such company, enterprise or business.
1.39 ENTRY DATE shall mean the first day of each calendar quarter
during which the Plan remains in effect. In addition, the Administrative
Committee may prescribe and set forth on Schedule B hereto a special Entry Date
for any individuals who are employed by an acquired company [as described in
Section 1.82(b)], and who otherwise have satisfied the requirements for
eligibility.
1.40 ERISA shall mean the Employee Retirement Income Security Act of
1974, as amended.
1.41 FORFEITURE shall mean the amount that is removed from the Account
of a former Employee as provided in Section 8.3 during such Plan Year.
1.42 HIGHLY COMPENSATED EMPLOYEE shall mean, effective for Plan Years
commencing on and after January 1, 1997, an Employee who is described either (i)
in subsections (a)(1) or (2) below, as modified by subsections (b), (c) and (d)
hereof, or (ii) in subsection (e) hereof.
(a) GENERAL RULE.
(1) An Employee who at any time during the current
Plan Year or the immediately preceding Plan Year owned [or was
considered as owning within the constructive ownership rules of Code
Section 318 as modified by Code Section 416(i)(1)(B)(iii)] more than 5
percent of the outstanding stock of a corporate Affiliate or stock
possessing more than 5 percent of the total combined voting power of
all stock of a corporate Affiliate or more than 5 percent of the
capital or profits interest in a noncorporate Affiliate; or
(2) An Employee who at any time during the
immediately preceding Plan Year:
8
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(A) received Compensation from an Affiliate
in excess of $80,000 (as adjusted by the Internal Revenue
Service under Code Section 414(q) [which references Code
Section 415(d)] and the regulations promulgated thereunder
for cost of living increases); and
(B) if the Controlling Company so elects,
was within the group consisting of the most highly
compensated 20 percent of the Employees of all Affiliates
(determined on the basis of "Compensation" as defined in
Section 1.19(d)).
(b) EXCLUDED EMPLOYEES. For purposes of subsections
(a)(2)(B) hereof, the following may be excluded when determining the most highly
compensated 20 percent of the Employees:
(1) employees who have not completed 6 months of
service;
(2) employees who normally work fewer than 17 1/2
hours per week;
(3) employees who normally work during not more than
6 months during any Plan Year; and
(4) employees who have not attained age 21.
(c) FORMER EMPLOYEES. For purposes of this Section, a former
employee shall be treated as a Highly Compensated Employee if (i) the former
employee was a Highly Compensated Employee at the time the employee separated
from service with all Affiliates or (ii) the former employee was a Highly
Compensated Employee at any time after he attained age 55.
(d) NONRESIDENT ALIENS. For purposes of this Section,
nonresident aliens who receive no earned income from an Affiliate which
constitutes income from sources within the United States [as described in Code
Section 414(q)(8)] shall not be treated as employees.
(e) COMPLIANCE WITH CODE Section 414(q). The determination of
who is a Highly Compensated Employee shall be made in accordance with Code
Section 414(q) and the regulations promulgated thereunder.
1.43 HOME DEPOT shall mean The Home Depot, Inc.
1.44 HOME DEPOT BOARD shall mean the board of directors of Home Depot.
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1.45 HOUR OF SERVICE shall mean each increment of time described in
subsection (a) hereof, as modified by subsections (b), (c) and (d) hereof:
(a) GENERAL RULE.
(1) Each hour for which an Employee is paid, or
entitled to payment, for the performance of duties for an Affiliate
during the applicable computation period;
(2) Each hour for which an Employee is paid, or
entitled to payment, by an Affiliate on account of a period of time
during which no duties are performed (irrespective of whether the
employment relationship has terminated) due to vacation, holiday,
illness, incapacity (including disability), layoff, jury duty or Leave
of Absence; provided:
(A) No more than 501 Hours of Service shall
be credited under this subsection (2) to an Employee for
any single continuous period during which he performs no
duties as an Employee (whether or not such period occurs in
a single computation period);
(B) An hour for which an Employee is
directly or indirectly paid, or entitled to payment, on
account of a period during which he performs no duties as
an Employee shall not be credited as an Hour of Service if
such payment is made or due under a plan maintained solely
to comply with applicable workers' compensation,
unemployment compensation or disability insurance laws; and
(C) Hours of Service shall not be credited
to an Employee for a payment which solely reimburses such
Employee for medical or medically related expenses incurred
by him.
For purposes of this subsection (2), a payment shall be deemed to be
made by or due from an Affiliate regardless of whether such payment is
made by or due from an Affiliate directly, or indirectly through, among
others, a trust fund or insurer, to which the Affiliate contributes or
pays premiums and regardless of whether contributions made or due to
the trust fund, insurer or other entity are for the benefit of
particular employees or are on behalf of a group of employees in the
aggregate;
(3) Each hour for which back pay, irrespective of
mitigation of damages, is either awarded or agreed to by an Affiliate;
provided, the same Hours of Service shall not be credited both under
subsection (1) or subsection (2), as the case may be, and under this
subsection (3); and, provided further, crediting of Hours of Service
for back pay awarded or agreed to with respect to periods described in
subsection (2) shall be subject to the limitations set forth in that
subsection; and
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(4) Each hour for which an Employee is required to be
granted leave under the Uniformed Services Employment and Reemployment
Rights Act of 1994; provided, the same Hours of Service shall not be
created under subsections (1), (2) or (3), as the case may be, and
under this subsection (4).
(b) EQUIVALENCIES. Notwithstanding anything herein to the
contrary, in accordance with this Section and applicable regulations promulgated
by the Department of Labor, the following Employees shall be credited with 45
Hours of Service for each week for which such Employee would be required to be
credited with at least 1 Hour of Service:
(1) For all periods on or after the Effective Date,
each Employee who is a salaried Employee; and
(2) For all periods on and after the Effective Date
for which the payroll system of an Affiliate (other than Home Depot)
can not adequately track actual Hours of Service for hourly Employees,
each hourly Employee.
(c) CHANGES BY ADMINISTRATIVE COMMITTEE. The rate or manner
used for crediting Hours of Service may be changed at the direction of the
Administrative Committee from time to time so as to facilitate administration
and to equitably reflect the purposes of the Plan; provided, no change shall be
effective as to any Plan Year for which allocations have been made pursuant to
Article V at the time such change is made; and, provided further, Hours of
Service shall be credited and determined in compliance with Department of Labor
Regulation Section 2530.200b-2(b) and (c), 29 CFR Part 2530, as may be amended
from time to time, or such other federal regulations as may from time to time be
applicable.
(d) COMPUTATION PERIOD. For purposes of this Section, a
"computation period" shall mean the 12- month period that forms the basis for
determining an Employee's Years of Eligibility Service or Years of Vesting
Service, whichever is applicable.
1.46 INVESTMENT COMMITTEE shall mean the committee which shall make and
effect investment decisions, all as provided in Article XI.
1.47 INVESTMENT FUND OR FUNDS shall mean one or all of the investment
funds established from time to time pursuant to the terms of Section 7.2.
1.48 INVESTMENT MANAGER shall mean an "investment manager" within the
meaning of ERISA Section 3(38).
1.49 INVOLUNTARY CASHOUT AMOUNT shall mean $5,000; provided, with
respect to Participants who separated from service with all Affiliates before
the Effective Date, such amount shall be $3,500.
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1.50 KEY EMPLOYEE shall mean the persons described in Section
14.2(b)(2).
1.51 LEAVE OF ABSENCE shall mean an excused leave of absence granted to
an Employee by an Affiliate in accordance with applicable federal or state law
or the Affiliate's personnel policy. Among other things, Leave of Absence shall
be granted to an Employee under such circumstances as the Administrative
Committee shall determine are fair, reasonable and equitable, as applied
uniformly among Employees under similar circumstances.
1.52 LIMITATION YEAR shall mean the 12-month period ending on each
December 31, which shall be the "limitation year" for purposes of Code Section
415 and the regulations promulgated thereunder.
1.53 MATCHING ACCOUNT shall mean the separate subaccount established
and maintained on behalf of a Participant or Beneficiary to reflect his interest
in the Trust Fund attributable to Matching Contributions.
1.54 MATCHING CONTRIBUTIONS shall mean the amounts paid by each
Participating Company to the Trust Fund as Basic and/or Supplemental Annual
Matching Contributions and as transitional matching contributions as provided
under Section 3.2(c).
1.55 MATERNITY OR PATERNITY LEAVE shall mean any period during which an
Employee is absent from work as an employee of an Affiliate (i) because of the
pregnancy of such Employee; (ii) because of the birth of a child of such
Employee; (iii) because of the placement of a child with such Employee in
connection with the adoption of such child by such Employee; or (iv) for
purposes of such Employee caring for a child immediately after the birth or
placement of such child.
1.56 MAXIMUM DEFERRAL AMOUNT shall mean $10,000 ($10,500 beginning with
2000), as adjusted from time to time in accordance with Code Section 402(g)(5).
1.57 NAMED FIDUCIARY shall mean the Controlling Company, the Board, the
Administrative Committee and the Investment Committee.
1.58 NON-KEY EMPLOYEE shall mean the persons described in Section
14.2(b)(3).
1.59 NORMAL RETIREMENT AGE shall mean age 65.
1.60 PARTICIPANT shall mean any person who has been admitted to, and
has not been removed from, participation in the Plan pursuant to the provisions
of Article II. "Participant" shall include Active Participants and former
Employees who have an Account under the Plan.
1.61 PARTICIPATING COMPANY shall mean any company that has adopted or
hereafter may adopt the Plan for the benefit of its employees and which
continues to participate in the Plan, all as provided in Section 13.3.
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1.62 PERMISSIVE AGGREGATION GROUP shall mean the group of plans
described in Section 14.2(b)(4).
1.63 PLAN shall mean The Maintenance Warehouse FutureBuilder as
contained herein and all amendments thereto. The Plan is intended to be a plan
qualified under Code Sections 401(a) and 401(k).
1.64 PLAN YEAR shall mean the 12-month period ending on each
December 31.
1.65 QNEC ACCOUNT shall mean the separate subaccount established and
maintained on behalf of a Participant or Beneficiary to reflect his interest in
the Trust Fund attributable to Qualified Non-Elective Contributions.
1.66 QUALIFIED NON-ELECTIVE CONTRIBUTIONS OR QNECS shall mean the
amounts paid to the Trust Fund by each Participating Company pursuant to
Section 3.3.
1.67 QUALIFIED SPOUSAL WAIVER shall mean a written election executed by
a Spouse, delivered to the Administrative Committee and witnessed by a notary
public or a Plan representative, which consents to the payment of all or a
specified portion of a Participant's death benefit to a Beneficiary other than
such Spouse and which acknowledges that such Spouse has waived his right to be
the Participant's Beneficiary under the Plan. A Qualified Spousal Waiver shall
be valid only with respect to the Spouse who signs it and shall apply only to
the alternative Beneficiary designated therein, unless the written election
expressly permits other designations without further consent of the Spouse. A
Qualified Spousal Waiver shall be irrevocable unless revoked by the Participant
by way of (i) a written statement executed by the Participant and delivered to
the Administrative Committee or (ii) a written revocation of the nonspouse
Beneficiary designation to which such Spouse has consented; provided, any such
revocation must be received by the Administrative Committee prior to the
Participant's date of death.
1.68 REQUIRED AGGREGATION GROUP shall mean the group of plans described
in Section 14.2(b)(5).
1.69 RESTORATION CONTRIBUTIONS means the amounts paid to the Trust Fund
on behalf of a rehired individual pursuant to Section 3.7.
1.70 ROLLOVER ACCOUNT shall mean the separate subaccount established
and maintained on behalf of a Participant or Beneficiary to reflect his interest
in the Trust Fund attributable to Rollover Contributions.
1.71 ROLLOVER CONTRIBUTIONS shall mean the amounts contributed to the
Trust Fund (and received and accepted by the Trustee) as "rollover"
contributions as defined in Code Section 402 and/or Eligible Rollover
Distributions. An amount shall be treated as a Rollover Contribution only to the
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extent that its acceptance by the Trustee is permitted under the Code (including
the regulations and rulings promulgated thereunder).
1.72 SPOUSE OR SURVIVING SPOUSE shall mean, with respect to a
Participant, the person who is treated as married to such Participant under the
laws of the state in which the Participant resides. The determination of a
Participant's Spouse or Surviving Spouse shall be made as of the earlier of the
date as of which benefit payments from the Plan to such Participant are made or
commence (as applicable) or the date of such Participant's death. In addition, a
Participant's former spouse shall be treated as his Spouse or Surviving Spouse
to the extent provided under a qualified domestic relations order as defined in
Code Section 414(p).
1.73 SUPPLEMENTAL ANNUAL MATCHING CONTRIBUTIONS shall mean the amounts
paid by each Participating Company to the Trust Fund as a supplemental annual
matching contribution to Participants' Before-Tax Contributions as provided in
Section 3.2(b).
1.74 TOP-HEAVY GROUP shall mean the group of plans described in
Section 14.2(b)(6).
1.75 TOP-HEAVY PLAN shall mean a plan to which the conditions set forth
in Article XIV apply.
1.76 TRANSFER ACCOUNT shall mean one or more separate subaccounts
established and maintained on behalf of a Participant or Beneficiary to reflect
his interest in the Trust Fund attributable to Transfer Contributions; provided,
to the extent that the Administrative Committee (in conjunction with the Plan's
recordkeeper) deems appropriate, other subaccounts (for example, Before-Tax or
Matching Accounts) may be used to reflect Participant's interests attributable
to Transfer Contributions. "Transfer Account" shall refer to the aggregate of
all separate subaccounts established for Transfer Contributions or to
individual, separate subaccounts appropriately described, as may be appropriate
in context. Transfer Accounts shall be reflected and described on a schedule
hereto.
1.77 TRANSFER CONTRIBUTIONS shall mean amounts which are received
either (i) by a direct trustee to trustee transfer or (ii) as part of a
spin-off, merger or other similar event by the Trustee from the trustee or
custodian of another qualified retirement plan and held in the Trust Fund on
behalf of a Participant or Beneficiary. Transfer Contributions shall retain the
character that those contributions had under the other qualified retirement
plan; for example, after-tax contributions under the prior plan shall continue
to be treated as after-tax contributions when held in the Transfer Account.
1.78 TRUST OR TRUST AGREEMENT shall mean the separate agreement between
the Controlling Company and the Trustee governing the creation of the Trust Fund
and all amendments thereto.
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1.79 TRUSTEE shall mean the party or parties so designated from time to
time under the Trust Agreement.
1.80 TRUST FUND shall mean the total amount of cash and other property
held by the Trustee (or any nominee thereof) at any time under the Trust
Agreement.
1.81 VALUATION DATE shall mean each Business Day, except as provided by
Section 15.14.
1.82 YEAR OF ELIGIBILITY SERVICE shall mean a 12-consecutive month
period during which an Employee completes no less than 1,000 Hours of Service,
subject to subsections (a) and (b) below:
(a) COMPUTATION PERIOD. For purposes of determining whether an
Employee has completed a Year of Eligibility Service, the computation period
initially shall be the 12-consecutive- month period beginning on the Employee's
Employment Date and thereafter shall be each Plan Year, beginning with the Plan
Year that includes the first anniversary of the Employee's Employment Date.
(b) PREDECESSOR EMPLOYER. Unless otherwise determined by the
Administrative Committee and not otherwise counted hereunder, an Employee's
periods of employment with one or more companies or enterprises (i) acquired in
whole or in part by, (ii) merged into, or (iii) all or a portion of the assets
or business of which are acquired by, an Affiliate shall be taken into account
in determining whether he has completed a Year of Eligibility Service.
(c) SERVICE COUNTED UNDER THE HOME DEPOT FUTUREBUILDER. For
the purpose of determining a Year of Eligibility Service, any service which
would count as service for eligibility purposes under The Home Depot
FutureBuilder shall be included in the determination of whether an Employee has
completed a Year of Eligibility Service.
1.83 YEAR OF VESTING SERVICE shall mean each Plan Year during which an
Employee completes at least 1,000 Hours of Service; provided:
(a) PRE-BREAK SERVICE. If a Participant incurs a Break in
Service, the Participant shall not be credited with Years of Vesting Service
completed prior to such Break in Service unless and until such Participant has
completed a Year of Vesting Service following his reemployment. In addition,
Years of Vesting Service completed prior to a period in which the Participant
incurred 5 or more consecutive Breaks in Service shall be disregarded under the
Plan if the Participant had no vested interest in his Account at the time the
first Break in Service commenced.
(b) POST-BREAK SERVICE. Years of Vesting Service completed
after a period in which the Participant had at least 5 consecutive Breaks in
Service shall be disregarded for the purpose of determining his vested interest
in that portion of his Account which accrued before such Breaks in Service.
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(c) PREDECESSOR PLAN. To the extent required by Code Section
414(a)(1) and not otherwise counted hereunder, if an Affiliate maintains a plan
that is or was the qualified retirement plan of a predecessor employer, an
Employee's periods of employment with such predecessor employer shall be taken
into account in determining his Years of Vesting Service.
(d) PREDECESSOR EMPLOYER. Unless otherwise determined by the
Administrative Committee, and not otherwise counted hereunder, an Employee's
periods of employment with one or more companies or enterprises acquired by or
merged into, or all or a portion of the assets or business of which are acquired
by, an Affiliate shall be taken into account in determining his Years of Vesting
Service.
(e) SERVICE COUNTED UNDER THE HOME DEPOT FUTUREBUILDER. For
the purpose of determining a Year of Vesting Service, any service which would
count as service for vesting purposes under The Home Depot FutureBuilder shall
be included in the determination of an Employee's Years of Vesting Service.
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ARTICLE II
ELIGIBILITY
2.1 INITIAL ELIGIBILITY REQUIREMENTS.
(a) GENERAL RULE. Except as provided below in subsections (b)
and (c) hereof, every Covered Employee shall become an Active Participant on the
Entry Date coincident with or next following the date on which he first
completed 1 Year of Eligibility Service, provided he is a Covered Employee on
such Entry Date.
(b) PARTICIPATION UPON EFFECTIVE DATE. Each Covered Employee
who is an Active Participant in the Plan on the day immediately preceding the
Effective Date shall continue as an Active Participant in the Plan in accordance
with the terms of the Plan.
(c) NEW PARTICIPATING COMPANIES. For employees of companies
that become Participating Companies after the Effective Date, each Covered
Employee employed by a Participating Company on the date such Participating
Company first becomes a Participating Company shall become an Active Participant
as of such Participating Company's effective date under the Plan, if, as of the
Participating Company's effective date, the Covered Employee has met the
eligibility requirements under Section 2.1(a).
2.2 TREATMENT OF INTERRUPTIONS OF SERVICE.
(a) TERMINATION BEFORE SATISFYING ELIGIBILITY REQUIREMENTS. If
a Covered Employee terminates employment before satisfying the eligibility
requirements set forth in Section 2.1 and then is reemployed by a Participating
Company, he shall become an Active Participant in accordance with the
requirements of Section 2.1(a).
(b) TERMINATION BEFORE PARTICIPATION. If a Covered Employee
satisfies the eligibility requirements set forth in Section 2.1, terminates
employment with a Participating Company (and all other Participating Companies)
before the Entry Date on which he otherwise would become an Active Participant,
and then is reemployed by a Participating Company prior to completing a Break in
Service, he shall become an Active Participant as of the later of (i) the Entry
Date on which he otherwise would have become an Active Participant if he had not
terminated employment or (ii) the Entry Date coinciding with or immediately
preceding the date he is reemployed as a Covered Employee.
(c) REPARTICIPATION UPON REEMPLOYMENT. If an Active
Participant terminates employment with a Participating Company (and all other
Participating Companies), his active participation in the Plan shall cease
immediately, and he again shall become an Active Participant as of the day he
again becomes a Covered Employee. However, regardless of whether he again
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becomes an Active Participant, he shall continue to be a Participant until he no
longer has an Account under the Plan.
2.3 CHANGE IN STATUS.
(a) LOSS OF COVERED EMPLOYEE STATUS. If a Covered Employee (i)
satisfies the eligibility requirements set forth in Section 2.1, (ii) changes
his employment status (but remains employed) so that he ceases to be a Covered
Employee before the Entry Date on which he otherwise would become an Active
Participant, and (iii) then again changes his employment status and becomes a
Covered Employee, he shall become an Active Participant as of the later of the
date he again becomes a Covered Employee or the Entry Date on which he otherwise
would become and Active Participant.
(b) CHANGE TO COVERED EMPLOYEE STATUS. If an Employee who
first satisfies the eligibility requirements of Section 2.1 while he is not a
Covered Employee subsequently changes his employment status so that he becomes a
Covered Employee, he shall become an Active Participant as of the later of the
date of his change in status or the Entry Date on which he otherwise would
become an Active Participant.
(c) CHANGE BY PARTICIPANT. If an Active Participant changes
his status of employment (but remains employed) so that he is no longer a
Covered Employee, his active participation in the Plan shall cease immediately,
and he shall again become an Active Participant in the Plan as of the day he
again becomes a Covered Employee. However, regardless of whether he again
becomes an Active Participant, he shall continue to be a Participant until he no
longer has an Account under the Plan.
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ARTICLE III
CONTRIBUTIONS
3.1 BEFORE-TAX CONTRIBUTIONS.
(a) BEFORE-TAX CONTRIBUTIONS. Each Participating Company shall
contribute to the Plan, on behalf of each Active Participant employed by such
Participating Company and for each regular payroll period for which an Active
Participant has a Deferral Election in effect with such Participating Company, a
Before-Tax Contribution in an amount equal to the amount by which such Active
Participant's Compensation has been reduced for such period pursuant to his
Deferral Election. The amount of the Before-Tax Contribution shall be determined
in 1 percent increments from 1 percent to a maximum of 15 percent (or such other
minimum or maximum percentage and/or amount established by the Administrative
Committee from time to time), subject to the maximum limitations in Article VI.
(b) DEFERRAL ELECTIONS. Each Active Participant who desires
that his Participating Company make a Before-Tax Contribution on his behalf
shall make a Deferral Election. Such Deferral Election shall provide for the
reduction of his Compensation while he is an Active Participant employed by such
Participating Company. A Deferral Election may be made on a form, through an
interactive telephone system, or through such other format or process permitted
by the Administrative Committee. The Administrative Committee may prescribe such
nondiscriminatory terms and conditions governing the use of the Deferral
Elections as it deems appropriate. Subject to any modifications, additions or
exceptions which the Administrative Committee, in its sole discretion, deems
necessary, appropriate or helpful, the following terms shall apply to Deferral
Elections:
(1) EFFECTIVE DATE. An Active Participant's initial
Deferral Election with a Participating Company shall be effective for the first
paycheck payable on or after an Entry Date. If an Active Participant fails to
submit a Deferral Election in a timely manner, he shall be deemed to have
elected a deferral of zero percent.
(2) TERM. Each Active Participant's Deferral Election
with a Participating Company shall remain in effect in accordance with its
original terms until the earlier of (A) the date the Active Participant ceases
to be a Covered Employee of all Participating Companies, (B) the date the Active
Participant revokes such Deferral Election pursuant to the terms of subsection
(b)(3) hereof, or (C) the date the Active Participant or the Administrative
Committee modifies such Deferral Election pursuant to the terms of subsections
(b)(4) or (b)(5) hereof. If the final payment of Compensation to an Active
Participant is not made through the Participating Company's regular payroll
process, the Active Participant's Deferral Election shall not apply to such
payment. If a Participant is transferred from the employment of a Participating
Company to the employment of another Participating Company, his Deferral
Election with the first Participating Company will
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remain in effect and will apply to his Compensation from the second
Participating Company until the earlier of (A), (B) or (C) of the preceding
sentence.
(3) REVOCATION. An Active Participant's Deferral
Election shall terminate upon his ceasing to be a Covered Employee. In addition,
an Active Participant may revoke his Deferral Election with a Participating
Company in the manner prescribed by the Administrative Committee, and such
revocation shall be effective as soon as administratively practicable after the
date on which it is received. An Active Participant who revokes a Deferral
Election may enter into a new Deferral Election in the manner prescribed by the
Administrative Committee, effective as soon as administratively practicable
after the date of such election.
(4) MODIFICATION BY PARTICIPANT. Effective as soon as
administratively practicable after the date of such election, an Active
Participant may modify his existing Deferral Election to increase or decrease
the percentage of his Contribution by making a new Deferral Election in the
manner prescribed by the Administrative Committee.
(5) MODIFICATION BY ADMINISTRATIVE COMMITTEE.
Notwithstanding anything herein to the contrary, the Administrative Committee
may modify any Deferral Election of any Active Participant at any time by
decreasing the percentage of any Before-Tax Contributions to any extent the
Administrative Committee believes necessary to comply with the limitations
described in Article VI.
3.2 MATCHING CONTRIBUTIONS.
(a) BASIC MATCHING CONTRIBUTIONS. Effective January 1, 2000,
for each Active Participant on whose behalf a Participating Company has made any
Before-Tax Contributions, such Participating Company shall make, with respect to
such payroll period or other payment of Compensation, a Basic Matching
Contribution to the Plan equal to:
(1) 150 percent of the amount of such Before-Tax
Contributions to the extent such Before-Tax Contributions do not exceed 2
percent of a Participant's Compensation for a payroll period (that is, such
Matching Contributions shall not exceed 3 percent of the Active Participant's
Compensation for such payroll period); and
(2) 100 percent of the amount of such Before-Tax
Contributions to the extent such Before-Tax Contributions exceed 2 percent but
do not exceed 5 percent of a Participant's Compensation for such payroll period;
(that is, the aggregate Matching Contributions made under this subsection (a)(2)
shall not exceed 3 percent of the Active Participant's Compensation for such
payroll period).
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(b) SUPPLEMENTAL ANNUAL MATCHING CONTRIBUTIONS.
(1) GENERAL. For each Plan Year commencing on or
after January 1, 2000, for each Active Participant who satisfies all of the
conditions set forth in subsection (b)(2) hereof for all periods through the
last day of such Plan Year, such Participating Company shall make, with respect
to such Plan Year, a Supplemental Annual Matching Contribution equal to 4.5
percent of such Active Participant's Compensation paid by the Controlling
Company to such Active Participant during the Plan Year in which the Active
Participant was employed by the Controlling Company.
(2) CONDITIONS FOR ELIGIBILITY. In order to be
eligible for a Supplemental Annual Matching Contribution under this subsection
(b) for a Plan Year, the Active Participant must meet the following eligibility
conditions:
(A) The individual must have been employed
by the Controlling Company on July 1, 1999;
(B) Commencing on or before the later of
December 31, 1999 or the individual's Entry Date into the Plan, the individual
(i) must have enrolled in the Plan, and (ii) must have in effect at all times
while he is employed by the Controlling Company (to the extent permitted by the
maximum limits under the Plan) a Deferral Election pursuant to which he has
elected to contribute at least 3 percent of his Compensation as a Before-Tax
Contribution to the Plan; and
(C) The individual must be in the active
employ of the Controlling Company or an Affiliate on the last day of such Plan
Year.
In the event a Participant fails to satisfy any of these conditions with respect
to a Plan Year, such Participant shall not be eligible to receive a Supplemental
Annual Matching Contribution for such Plan Year and shall permanently forfeit
the right to receive Supplemental Annual Matching Contributions under this
subsection (b) in all future Plan Years.
(3) LIMITATIONS ON SUPPLEMENTAL ANNUAL MATCHING
CONTRIBUTIONS MADE ON BEHALF OF HIGHLY COMPENSATED EMPLOYEES. Notwithstanding
the foregoing, to the extent (if any) necessary to satisfy the nondiscrimination
requirements of Code Section 401(a)(4) with respect to a Plan Year, the number
of Highly Compensated Employees who are otherwise eligible to receive a
Supplemental Annual Matching Contribution pursuant to this subsection (b) shall
be reduced to the number of Highly Compensated Employees that the Administrative
Committee determines is necessary to satisfy the requirements of Code Section
401(a)(4). Such limitation on the number of Highly Compensated Employees
eligible to receive a Supplemental Annual Matching Contribution for such Plan
Year shall be made in accordance with the following procedure:
(A) First, the number of Highly Compensated
Employees who are otherwise eligible to receive the Supplemental Annual Matching
Contribution for such Plan Year
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shall be reduced by the number of Highly Compensated Employee(s) that the
Administrative Committee determines is necessary to satisfy the
nondiscrimination requirements of Code Section 401(a)(4), beginning with the
Highly Compensated Employee(s) with the highest dollar amount of Compensation
for such Plan Year. Those Highly Compensated Employee(s) with the highest dollar
amount of Compensation who are affected by this reduction shall not be eligible
for a Supplemental Annual Matching Contribution for such Plan Year.
(B) Substantially identical steps shall be
followed for making further reductions in the number of Highly Compensated
Employees who are otherwise eligible to receive the Supplemental Annual Matching
Contribution for the Plan Year, using the next highest dollar amount of
Compensation for the Plan Year, until the nondiscrimination requirements of Code
Section 401(a)(4) are satisfied.
(c) TRANSITIONAL MATCHING CONTRIBUTIONS FOR
DECEMBER 1999. For the period beginning on the Effective Date and ending on
December 31, 1999, Matching Contributions shall be made in such amounts as
determined under the terms of the Plan document in effect prior to this
amendment and restatement.
3.3 QUALIFIED NON-ELECTIVE CONTRIBUTIONS.
To the extent and in such amounts as the Administrative
Committee, in its sole discretion, deems desirable or helpful as a method to
help satisfy the ADP and/or ACP Tests for any Plan Year and subject to the
requirements and limitations set forth in Section 6.1, Section 6.3, Section 6.4,
and Section 6.7, each Participating Company shall make a Qualified Non-Elective
Contribution for a Plan Year.
3.4 FORM OF CONTRIBUTIONS.
Contributions shall be paid to the Trustee in the form of cash
or shares of Company Stock, as determined by the Board.
3.5 TIMING OF CONTRIBUTIONS.
(a) BEFORE-TAX CONTRIBUTIONS. Each Participating Company that
withholds Before-Tax Contributions from an Active Participant's paycheck
pursuant to Section 3.1(a) shall pay such Before-Tax Contributions to the
Trustee as of the earliest date on which such Contributions can reasonably be
segregated from the Participating Company's general assets (not to exceed 15
business days after the end of the month within which such amounts otherwise
would have been payable to such Active Participant in cash or such earlier time
as may be required by law).
(b) MATCHING AND QUALIFIED NON-ELECTIVE CONTRIBUTIONS. All
Matching and Qualified Non-Elective Contributions shall be paid to the Trustee
no later than (i) the date for filing the Participating Company's federal income
tax return (including extensions thereof) for the tax year to which such
Matching and Qualified Non-Elective Contributions relate, or (ii) such other
date as
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shall be within the time allowed to permit the Participating Company to properly
deduct, for federal income tax purposes and for the tax year of the
Participating Company in which the obligation to make such Contributions was
incurred, the full amount of such Matching and Qualified Non-Elective
Contributions.
3.6 CONTINGENT NATURE OF CONTRIBUTIONS.
Notwithstanding Section 3.1 and subject to the terms of
Section 15.11, each Contribution made to the Plan by a Participating Company is
made expressly contingent upon the deductibility thereof for federal income tax
purposes for the taxable year of the Participating Company with respect to which
such Contribution is made.
3.7 RESTORATION CONTRIBUTIONS.
(a) RESTORATION OF FORFEITURES. If a Participant has forfeited
his nonvested Account in accordance with Section 8.3, and such Participant
subsequently is rehired as a Covered Employee prior to the occurrence of 5
consecutive Breaks in Service, his Account shall be credited with all of the
benefits (unadjusted for gains or losses) which were forfeited, as determined
pursuant to the terms of Section 8.3.
(b) RESTORATION CONTRIBUTION. The assets necessary to fund the
Account of the rehired individual shall be provided no later than as of the end
of the Plan Year following the Plan Year in which the individual is rehired and
shall be provided in the discretion of the Administrative Committee from (i)
income or gain to the Trust Fund, (ii) Forfeitures, or (iii) contributions by
the Participating Companies.
3.8 REEMPLOYED VETERANS.
Notwithstanding any provision in this Plan to the contrary,
contributions, benefits and service credit with respect to qualified military
service will be provided in accordance with Code Section 414(u).
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ARTICLE IV
ROLLOVERS AND TRANSFERS BETWEEN PLANS
4.1 ROLLOVER CONTRIBUTIONS.
(a) REQUEST BY ACTIVE PARTICIPANT. An Active Participant may
make a written request (in writing or in such other format as permitted by the
Administrative Committee) to the Administrative Committee that he be permitted
to contribute, or cause to be contributed, to the Trust Fund a Rollover
Contribution which is received by such Active Participant or to which such
Active Participant is entitled. Such request shall contain information
concerning the type of property constituting the Rollover Contribution and a
statement, satisfactory to the Administrative Committee, that the property
constitutes a Rollover Contribution.
(b) ACCEPTANCE OF ROLLOVER. Subject to the terms of the Plan
and the Code (including regulations and rulings promulgated thereunder), the
Administrative Committee, in its sole discretion, shall determine whether (and
if so, under what conditions and in what form) a Rollover Contribution shall be
accepted at any time by the Trustee. For example, the Administrative Committee,
in its sole discretion, may decide to allow Rollover Contributions from
Participants and/or direct Rollover Contributions from another qualified
retirement plan [as described in Code Section 401(a)(31)] and may decide to pass
through to the Active Participant making the Rollover Contribution any
recordkeeping fees directly attributable to his Rollover Contribution. In the
event the Administrative Committee permits an Active Participant to make a
Rollover Contribution, the amount of the Rollover Contribution shall be
transferred to the Trustee and allocated as soon as practicable thereafter to a
Rollover Account for the Active Participant. Unless the Administrative Committee
permits otherwise, all Rollover Contributions shall be made in cash.
4.2 TRANSFER CONTRIBUTIONS.
(a) DIRECT TRANSFERS PERMITTED. The Administrative Committee,
in its sole discretion, shall permit direct trustee-to-trustee transfers of
assets and liabilities to the Plan [which shall be distinguished from direct
Rollover Contributions as described in Code Section 401(a)(31)] as a Transfer
Contribution on behalf of an Active Participant.
(b) MERGERS AND SPIN-OFFS PERMITTED. The Administrative
Committee, in its sole discretion, shall permit other qualified retirement plans
to transfer assets and liabilities to the Plan as part of a merger, spin-off or
similar transaction. Any such transfer shall be made in accordance with the
terms of the Code and subject to such rules and requirements as the
Administrative Committee may deem appropriate. Without limitation, the
Administrative Committee shall determine the schedule under which such Transfer
Contributions shall vest. Notwithstanding anything herein to the contrary, in no
event shall a Transfer Contribution be accepted if the transferring plan is
subject to the requirements of providing any alternative form of benefit not
permitted under the Plan.
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(c) ESTABLISHMENT OF TRANSFER ACCOUNTS. As soon as practicable
after the date the Trustee receives a Transfer Contribution, there shall be
credited to one or more Transfer Accounts of each Participant the total amount
received from the respective accounts of such Participant in the transferring
qualified retirement plan. Any amounts so credited as a result of any such
merger or spin-off or other transfer shall be subject to all of the terms and
conditions of the Plan from and after the date of such transfer.
(d) TRANSFER ACCOUNTS. The rules and terms applicable to
Transfer Contributions and resulting Transfer Accounts shall be reflected on a
schedule hereto.
4.3 SPIN-OFFS TO OTHER PLANS.
The Administrative Committee, in its sole discretion, may
cause the Plan to transfer to another qualified retirement plan (as part of a
spin-off or similar transaction) assets and liabilities maintained under the
Plan. Any such transfer shall be made in accordance with the terms of the Code
and subject to such rules and requirements as the Administrative Committee may
deem appropriate. Upon the effectiveness of any such transfer, the Plan and
Trust shall have no further responsibility or liability with respect to the
transferred assets and liabilities.
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ARTICLE V
PARTICIPANTS' ACCOUNTS; CREDITING AND ALLOCATIONS
5.1 ESTABLISHMENT OF PARTICIPANTS' ACCOUNTS.
The Administrative Committee shall establish and maintain, on
behalf of each Participant and Beneficiary, an Account which shall be divided
into segregated subaccounts. The subaccounts shall include (to the extent
applicable) Before-Tax, Matching, QNEC, Rollover and Transfer Accounts and such
other subaccounts as the Administrative Committee shall deem appropriate or
helpful. Each Account shall be credited with Contributions allocated to such
Account and generally shall be credited with income on investments derived from
the assets of such Accounts. Notwithstanding anything herein to the contrary,
while Contributions may be allocated to a Participant's Account as of a
particular date (as specified in the Plan), such Contributions shall actually be
added to a Participant's Account and shall be credited with investment
experience only from the date such Contributions are received and credited to
the Participant's Account by the Trustee. Each Account of a Participant or
Beneficiary shall be maintained until the value thereof has been distributed to
or on behalf of such Participant or Beneficiary.
5.2 ALLOCATION AND CREDITING OF BEFORE-TAX, BASIC MATCHING, ROLLOVER
AND TRANSFER CONTRIBUTIONS.
As of each Valuation Date coinciding with or immediately
following the date on which Before-Tax, Basic Matching, Rollover and Transfer
Contributions are received on behalf of an Active Participant, such
Contributions shall be allocated and credited directly to the appropriate
Before-Tax, Matching, Rollover and Transfer Accounts, respectively, of such
Active Participant.
5.3 ALLOCATION AND CREDITING OF SUPPLEMENTAL ANNUAL MATCHING
CONTRIBUTIONS.
As of the last day of each Plan Year for which the
Participating Companies make (or are deemed to have made) Supplemental Annual
Matching Contributions, each Participant who satisfies the eligibility
requirements of Section 3.2(b)(2) for such Plan Year shall have allocated and
credited to his Matching Account a portion of such Supplemental Annual Matching
Contributions.
5.4 ALLOCATION AND CREDITING OF QUALIFIED NON-ELECTIVE CONTRIBUTIONS.
(a) GENERAL PROVISION. As of the last day of each Plan Year
for which the Participating Companies make (or are deemed to have made)
Qualified Non-Elective Contributions, the Administrative Committee shall cause
such Qualified Non-Elective Contributions to be allocated in accordance with the
terms of subsection (b), (c), (d) or (e) hereof, whichever is applicable.
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(b) PER CAPITA QNECS. To the extent that the Administrative
Committee designates all or any portion of the Qualified Non-Elective
Contributions for a Plan Year as "Per Capita QNECs," such Contributions shall be
allocated to the QNEC Accounts of all Eligible Participants who were in the
active employ of an Affiliate on the last day of the Plan Year on a per capita
basis (that is, the same dollar amount shall be allocated to the QNEC Account of
each such Eligible Participant).
(c) PROPORTIONAL QNECS. To the extent that the Administrative
Committee designates all or any portion of the Qualified Non-Elective
Contributions for a Plan Year as "Proportional QNECs," such Contributions shall
be allocated to the QNEC Account of each Eligible Participant who was in the
active employ of an Affiliate on the last day of the Plan Year in the same
proportion that (i) the Compensation of such Eligible Participant for such Plan
Year bears to (ii) the total Compensation of all such Eligible Participants for
such Plan Year.
(d) SECTION 415 QNECS. To the extent that the Administrative
Committee designates all or any portion of the Qualified Non-Elective
Contributions for a Plan Year as "Section 415 QNECs," such Contributions shall
be allocated to the QNEC Account of some or all Eligible Participants (i)
beginning with such Eligible Participant(s) who have the lowest Compensation
[within the meaning of "Testing Compensation" as described in Section 1.19(e)],
until such Eligible Participant(s) reach their annual addition limits (as
described in Section 6.7), or the amount of the Qualified Non-Elective
Contributions is fully allocated, and then (ii) continuing with successive
individuals or groups of such Eligible Participants in the same manner until the
amount of the Section 415 Qualified Non-Elective Contributions is fully
allocated.
(e) QUALIFIED MATCHING CONTRIBUTIONS. To the extent that the
Administrative Committee designates all or any portion of the Qualified
Non-Elective Contributions as "Qualified Matching Contributions," such
contributions shall be allocated to the QNEC Account of each Eligible
Participant who was in the active employ of an Affiliate on the last day of the
Plan Year in the same proportion that (i) the Before-Tax Contribution of such
Eligible Participant for such Plan Year bears to (ii) the total Before-Tax
Contribution of all such Eligible Participants for such Plan Year.
5.5 ALLOCATION OF FORFEITURES.
To the extent Forfeitures for a Plan Year are not used to
replace abandoned Accounts as provided in Section 9.9, make Restoration
Contributions pursuant to Section 3.7, or to pay Plan expenses as provided in
Section 15.12, the Administrative Committee, in its sole discretion, may deem
such Forfeitures to be Matching Contributions (which shall first be used to
reduce the Participating Companies' obligation, if any, to make such
Contributions pursuant to the terms of the Plan and then shall be added to, and
combined with, any such other Contributions made for such Plan Year by the
Participating Companies), and such Forfeitures shall be allocated pursuant to
the terms of Section 5.2, Section 5.3 or Section 5.4, as applicable.
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5.6 ALLOCATION AND CREDITING OF INVESTMENT EXPERIENCE.
As of each Valuation Date, the Trustee shall determine the
fair market value of the Trust Fund which shall be the sum of the fair market
values of the Investment Funds. The Administrative Committee shall determine the
amount of the Accounts as follows:
(a) DETERMINATION OF INVESTMENT EXPERIENCE. As of each
Valuation Date, the investment earnings (or losses) of each Investment Fund
shall be the amount by which the sum determined in (1) exceeds (or is less than)
the sum determined in (2), where (1) and (2) are as follows:
(1) The sum of (A) the fair market value of such
Investment Fund as of such Valuation Date, plus (B) the amount of
distributions and withdrawals and any transfers to other Investment
Funds made since the immediately preceding Valuation Date from amounts
invested in the Investment Fund; and
(2) The sum of (A) the fair market value of the
Investment Fund as of the immediately preceding Valuation Date, plus
(B) Contributions deposited in and amounts transferred to such
Investment Fund since the immediately preceding Valuation Date.
(b) UTILIZATION OF INVESTMENT EXPERIENCE. To the extent
directed by the Administrative Committee, investment earnings initially shall be
used to pay Restoration Contributions pursuant to Section 3.7(b), to replace
abandoned Accounts as provided in Section 9.9, or to pay Plan expenses as
provided in Section 15.12. As of each Valuation Date and prior to the
allocations described in Section 5.2, Section 5.3, Section 5.4 and Section 5.5,
each Participant's Account shall be allocated and credited with a portion of
such remaining earnings or debited with a portion of such losses of each
Investment Fund, as determined in accordance with subsection (a) hereof, in the
proportion that (i)(A) the amount credited to such Account that was invested in
such Investment Fund as of the immediately preceding Valuation Date, minus (B)
any distributions or withdrawals or transfers to other Investment Funds which
were made from such Account since such preceding Valuation Date and on or before
such current Valuation Date, plus (C) any amounts transferred to such Investment
Fund since the immediately preceding Valuation Date; bears to (ii)(A) the total
amount invested in such Investment Fund by all Participants as of the
immediately preceding Valuation Date, minus (B) any distributions or withdrawals
or transfers to other Investment Funds which were made since such preceding
Valuation Date and on or before such current Valuation Date, plus (C) any
amounts transferred to such Investment Fund since the immediately preceding
Valuation Date.
5.7 ALLOCATION OF ADJUSTMENTS UPON CHANGES IN CAPITALIZATION.
If the outstanding shares of Company Stock held in the Plan
increase or decrease by reason or a recapitalization, reclassification, stock
split, combination of shares or dividend payable in shares of Company Stock,
such increase or decrease shall be allocated to each Account,
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as of the date on which the event requiring such adjustment occurs, in the same
manner as the share to which it is attributable is then allocated.
5.8 NOTICE TO PARTICIPANTS OF ACCOUNT BALANCES.
At least once each Plan Year, the Administrative Committee
shall cause a written statement of a Participant's Account balance to be
distributed to the Participant.
5.9 GOOD FAITH VALUATION BINDING.
In determining the value of the Trust Fund and the Accounts,
the Trustee and the Administrative Committee shall exercise their best judgment,
and all such determinations of value (in the absence of bad faith) shall be
binding upon all Participants and Beneficiaries.
5.10 ERRORS AND OMISSIONS IN ACCOUNTS.
If an error or omission is discovered in the Account of a
Participant or Beneficiary, the Administrative Committee shall cause
appropriate, equitable adjustments to be made as of the Valuation Date as soon
as practicable following the discovery of such error or omission.
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ARTICLE VI
CONTRIBUTION AND SECTION 415 LIMITATIONS
AND NONDISCRIMINATION REQUIREMENTS
6.1 DEDUCTIBILITY LIMITATIONS.
In no event shall the total Contribution amount for any
taxable year of a Participating Company exceed that amount which is properly
deductible for federal income tax purposes under the then appropriate provisions
of the Code. Generally, the maximum, tax-deductible Contribution amount for any
taxable year of a Participating Company shall be equal to 15 percent of the
total Compensation paid or accrued during such taxable year to all Participants
employed by such Participating Company; provided, no Contribution amount shall
be deductible if it shall cause the Plan to exceed the applicable maximum
allocation limitations under Code Section 415, as described in Section 6.7. For
purposes of this Section, a Contribution may be deemed made by a Participating
Company for a taxable year if it is paid to the Trustee on or before the date of
filing the Participating Company's federal income tax return (including
extensions thereof) for that year or on or before such other date as shall be
within the time allowed to permit proper deduction by the Participating Company
of the amount so contributed for federal income tax purposes for the year in
which the obligation to make such Contribution was incurred.
6.2 MAXIMUM LIMITATION ON ELECTIVE DEFERRALS.
(a) MAXIMUM ELECTIVE DEFERRALS UNDER PARTICIPATING COMPANY
PLANS. The aggregate amount of a Participant's Elective Deferrals made for any
calendar year under the Plan and any other plans, contracts or arrangements with
the Participating Companies shall not exceed the Maximum Deferral Amount.
(b) RETURN OF EXCESS BEFORE-TAX CONTRIBUTIONS. If the
aggregate amount of a Participant's Before-Tax Contributions made for any
calendar year by itself exceeds the Maximum Deferral Amount, the Participant
shall be deemed to have notified the Administrative Committee of such excess,
and the Administrative Committee shall cause the Trustee to distribute to such
Participant, on or before April 15 of the next succeeding calendar year, the
total of (i) the amount by which such Before-Tax Contributions exceed the
Maximum Deferral Amount, plus (ii) any earnings allocable thereto (including, in
the Administrative Committee's discretion, any gap income). In addition,
Matching Contributions made on behalf of the Participant which are attributable
to the distributed Before-Tax Contributions shall be forfeited.
(c) RETURN OF EXCESS ELECTIVE DEFERRALS PROVIDED BY OTHER
PARTICIPATING COMPANY ARRANGEMENTS. If after the reduction described in
subsection (b) hereof, a Participant's aggregate Elective Deferrals under plans,
contracts and arrangements with Participating Companies still exceed the Maximum
Deferral Amount, then, the Participant shall be deemed to have notified the
Administrative Committee of such excess, and, unless the Administrative
Committee directs
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otherwise, such excess shall be reduced by distributing to the Participant
Elective Deferrals that were made for the calendar year under such plans,
contracts and/or arrangements with Participating Companies other than the Plan.
However, if the Administrative Committee decides to make any such distributions
from Before-Tax Contributions made to the Plan, such distributions (including
forfeiture of Matching Contributions) shall be made in a manner similar to that
described in subsection (b) hereof.
(d) DISCRETIONARY RETURN OF ELECTIVE DEFERRALS. If after the
reductions described in subsections (b) and (c) hereof, (i) a Participant's
aggregate Elective Deferrals made for any calendar year under the Plan and any
other plans, contracts or arrangements with Participating Companies and any
other employers still exceed the Maximum Deferral Amount, and (ii) such
Participant submits to the Administrative Committee, on or before the March 1
following the end of such calendar year, a written request that the
Administrative Committee distribute to such Participant all or a portion of his
remaining Before-Tax Contributions made for such calendar year, and any earnings
attributable thereto (including, in the Administrative Committee's discretion,
any gap income), then the Administrative Committee may, but shall not be
required to, cause the Trustee to distribute such amount to such Participant on
or before the following April 15. However, if the Administrative Committee
decides to make any such distributions from Before-Tax Contributions made to the
Plan, such distributions (including forfeiture of Matching Contributions) shall
be made in a manner similar to that described in subsection (b) hereof.
(e) RETURN OF EXCESS ANNUAL ADDITIONS. Any Before-Tax
Contributions returned to a Participant to correct excess Annual Additions shall
be disregarded for purposes of determining whether the Maximum Deferral Amount
has been exceeded.
6.3 NONDISCRIMINATION REQUIREMENTS FOR BEFORE-TAX CONTRIBUTIONS.
(a) ADP TEST. The annual allocation of the aggregate of all
Before-Tax Contributions and, to the extent taken into account under subsection
(b) hereof, elective and/or qualified nonelective contributions made under
another plan shall satisfy at least one of the following ADP Tests for each Plan
Year:
(1) The ADP for the current Plan Year for the Highly
Compensated Employees who are Active Participants shall not exceed the
product of (A) the ADP for such Plan Year for the Active Participants
who are not Highly Compensated Employees, multiplied by (B) 1.25; or
(2) The ADP for the current Plan Year for the Highly
Compensated Employees who are Active Participants shall not exceed the
ADP for such Plan Year for the Active Participants who are not Highly
Compensated Employees by more than 2 percentage points, nor shall it
exceed the product of (A) the ADP for such Plan Year of the Active
Participants who are not Highly Compensated Employees, multiplied by
(B) 2.
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(b) MULTIPLE PLANS. If before-tax and/or qualified nonelective
contributions are made to one or more other plans [other than employee stock
ownership plans as described in Code Section 4975(e)(7)] which, along with the
Plan, are considered as a single plan for purposes of Code Section 401(a)(4) or
Section 410(b), such plans shall be treated as one plan for purposes of this
Section, and the before-tax and applicable qualified nonelective contributions
made to those other plans shall be combined with the Before-Tax Contributions
for purposes of performing the tests described in subsection (a) hereof. In
addition, the Administrative Committee may elect to treat the Plan as a single
plan along with the one or more other plans [other than employee stock ownership
plans as described in Code Section 4975(e)(7)] to which before-tax and/or
qualified nonelective contributions are made for purposes of this Section;
provided, the Plan and all of such other plans also must be treated as a single
plan for purposes of satisfying the requirements of Code Section 401(a)(4) and
Section 410(b) [other than the requirements of Code Section 410(b)(2)(A)(ii)].
However, plans may be aggregated for purposes of this subsection only if they
have the same plan year.
(c) ADJUSTMENTS TO ACTUAL DEFERRAL PERCENTAGES. In the event
that the allocation of the Before-Tax Contributions and qualified nonelective
contributions for a Plan Year does not satisfy one of the ADP Tests of
subsection (a) hereof, the Administrative Committee shall cause the Before-Tax
Contributions for such Plan Year to be adjusted by the last day of the Plan Year
following the Plan Year in which the annual allocation failed both of the ADP
Tests. To do so, the Administrative Committee shall direct the Trustee to reduce
the Before-Tax Contributions taken into account with respect to Highly
Compensated Employees under such failed ADP Tests by the dollar amount necessary
to satisfy one of the ADP Tests. Any amount by which Before-Tax Contributions
are so reduced, plus any earnings attributable thereto (including, in the
Administrative Committee's discretion, any gap income or loss), shall be
distributed to the Highly Compensated Employees from whose Before-Tax Accounts
such reductions shall have been made. Such reductions in Before-Tax
Contributions shall be made in accordance with, and solely to the Accounts of
those Highly Compensated Employees who are affected by, the following procedure:
(1) First, the Before-Tax Contributions of the Highly
Compensated Employee(s) with the highest dollar amount of Before-Tax
Contributions for such Plan Year shall be reduced by the lesser of (i)
the entire amount necessary to satisfy one of the ADP Tests, or (ii)
that part of the entire amount necessary to satisfy one of the ADP
Tests as shall cause the amount of Before-Tax Contributions of each
such Highly Compensated Employee to equal the amount of Before-Tax
Contributions of each of the Highly Compensated Employees with the next
highest dollar amount of Before-Tax Contributions for such Plan Year.
In addition, to the extent that a Highly Compensated Employee's
Before-Tax Contributions are reduced pursuant to this Section, any
Matching Contributions made on behalf of a Highly Compensated Employee
which are attributable to the distributed Before-Tax Contributions
shall be forfeited.
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(2) Substantially identical steps shall be followed
for making further reductions in the Before-Tax Contributions of each
of the Highly Compensated Employees with the next highest dollar amount
of Before-Tax Contributions for such Plan Year until one of the ADP
Tests has been satisfied.
6.4 NONDISCRIMINATION REQUIREMENTS FOR MATCHING CONTRIBUTIONS.
(a) ACP TEST. The amount of the aggregate of all of a Plan
Year's Matching Contributions, and to the extent designated by the
Administrative Committee pursuant to subsection (b) hereof, other elective
and/or qualified nonelective contributions made under another plan shall satisfy
at least one of the following ACP Tests for such Plan Year:
(1) The ACP for the current Plan Year for the Highly
Compensated Employees who are Active Participants shall not exceed the
product of (A) the ACP for such Plan Year for the Active Participants
who are not Highly Compensated Employees, multiplied by (B) 1.25; or
(2) The ACP for the current Plan Year for the Highly
Compensated Employees who are Active Participants shall not exceed the
ACP for such Plan Year for the Active Participants who are not Highly
Compensated Employees by more than 2 percentage points, nor shall it
exceed the product of (A) the ACP for such Plan Year of the Active
Participants who are not Highly Compensated Employees, multiplied by
(B) 2.
(b) MULTIPLE PLANS. If matching, after-tax, elective and/or
qualified nonelective contributions are made to one or more other plans [other
than employee stock ownership plans as described in Code Section 4975(e)(7)]
which, along with the Plan, are considered as a single plan for purposes of Code
Section 401(a)(4) or Section 410(b), such plans shall be treated as one plan for
purposes of this Section, and the matching, after-tax, before-tax and applicable
qualified nonelective contributions made to those other plans shall be combined
with the Matching, Before-Tax, and Supplemental Contributions for purposes of
performing the tests described in subsection (a) hereof. In addition, the
Administrative Committee may elect to treat the Plan as a single plan along with
one or more other plans [other than employee stock ownership plans as described
in Code Section 4975(e)(7)] to which matching, after-tax, elective and/or
qualified nonelective contributions are made for purposes of this Section;
provided, the Plan and all of such other plans also must be treated as a single
plan for purposes of satisfying the requirements of Code Section 401(a)(4) and
Section 410(b) [other than the requirements of Code Section 410(b)(2)(A)(ii)].
However, plans may be aggregated for purposes of this subsection only if they
have the same plan year.
(c) ADJUSTMENTS TO AVERAGE CONTRIBUTION PERCENTAGES. In the
event that the allocation of the Before-Tax and Matching Contributions and other
elective and qualified nonelective contributions for a Plan Year does not
satisfy one of the ACP Tests of subsection (a) hereof, the Administrative
Committee shall cause such Matching Contributions for the Plan Year to be
adjusted by the last day of the Plan Year following the Plan Year in which the
annual allocation
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failed both of the ACP Tests. To do so, the Administrative Committee shall
direct the Trustee to reduce the Matching Contributions taken into account with
respect to Highly Compensated Employees under such failed ACP Tests by the
dollar amount necessary to satisfy one of the ACP Tests. The amount by which
Matching Contributions are to be reduced, plus any earnings attributable
thereto, shall be distributed to the Highly Compensated Employees from whose
Matching Accounts such reductions have been made. Such reductions in
Contributions shall be made in accordance with, and solely to the Accounts of
those Highly Compensated Employees who are affected by, the following procedure:
(1) First, the Matching Contributions of the Highly
Compensated Employee(s) with the highest dollar amount of Matching
Contributions for such Plan Year shall be reduced by the lesser of (i)
the entire amount necessary to satisfy one of the ACP Tests, or (ii)
that part of the entire amount necessary to satisfy one of the ACP
Tests as shall cause the dollar amount of Matching Contributions of
each such Highly Compensated Employee to equal the amount of Matching
Contributions of each of the Highly Compensated Employees with the next
highest dollar amount of Matching Contributions for such Plan Year.
(2) Substantially identical steps shall be followed
for making further reductions in the Matching Contributions of each of
the Highly Compensated Employees with the next highest dollar amount of
Matching Contributions for such Plan Year until one of the ACP Tests
has been satisfied.
6.5 MULTIPLE USE OF TESTS.
(a) AGGREGATE LIMITATION. The sum of the ADP and the ACP for
the current Plan Year for the entire group of eligible Highly Compensated
Employees who are Active Participants, following and taking into account the
application of Section 6.3(c) and Section 6.4(c) for such Plan Year, may not
exceed the greater of (1) or (2) below (or such other applicable limits as may
be established under the Code, regulations or otherwise):
(1) the sum of:
(A) 125 percent of the greater of (i) the
ADP for such Plan Year for the group of non-Highly
Compensated Employees eligible under the Plan for the Plan
Year, or (ii) the ACP for such Plan Year for the group of
non-Highly Compensated Employees who are eligible under the
Plan for the Plan Year; plus
(B) the lesser of 2 plus or 2 times the
lesser of the amount determined in subsection (a)(1)(A)(i)
or (a)(1)(A)(ii) hereof; or
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(2) the sum of:
(A) 125 percent of the lesser of (i) the ADP
for such Plan Year for the group of non-Highly Compensated
Employees eligible under the Code Section 401(k)
arrangements for the Plan Year, or (ii) the ACP for such
Plan Year for the group of non-Highly Compensated Employees
who are eligible under the Plan beginning with or within
the plan year of the Code Section 401(k) arrangement; plus
(B) the lesser of 2 plus or 2 times the
greater of the amount determined in subsection (a)(2)(A)(i)
or (a)(2)(A)(ii) hereof.
(b) MULTIPLE PLANS. If at least one Highly Compensated
Employee participates in another qualified retirement plan maintained by the
Participating Company which (i) permits before-tax contributions and/or
after-tax contributions or matching contributions, and (ii) is not aggregated
with the Plan for purposes of nondiscrimination testing, then the multiple use
aggregate limitations described in subsection (a) shall apply separately with
respect to each such other plan.
(c) CORRECTION. If the maximum limitation of the combination
of the Highly Compensated Employees' ADPs and ACPs, as described in subsection
(a) hereof, is exceeded, this excess shall be reduced or otherwise corrected by
any method permissible under Section 6.3 for satisfying the ADP Test or through
any method permitted under Section 6.4 to satisfy the ACP Test, or any
combination thereof. Any adjustment necessary to satisfy said maximum limitation
shall be made by adjusting the Highly Compensated Employees' ADPs or the ACPs.
(d) APPLICATION. This Section shall be operated and
interpreted in a manner consistent with regulations and other published
authority promulgated under Code Section 401(m).
6.6 ORDER OF APPLICATION.
For any Plan Year in which adjustments shall be necessary or
otherwise made pursuant to the terms of Section 6.2, Section 6.3 and/or Section
6.4, such adjustments shall be applied in the order prescribed by the Secretary
of Treasury in Treasury Regulations or other published authority.
6.7 CODE Section 415 LIMITATIONS ON MAXIMUM CONTRIBUTIONS.
(a) GENERAL LIMIT ON ANNUAL ADDITIONS. In no event shall the
Annual Addition to a Participant's Account for any Limitation Year, under the
Plan and any other Defined Contribution Plan maintained by an Affiliate, exceed
the lesser of:
(1) $30,000 (as adjusted by the Secretary of the
Treasury under Code Section 415(d) to reflect cost-of-living increases); or
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(2) 25 percent of such Participant's Compensation.
(b) COMBINED PLAN LIMITATION. For Limitation Years beginning
prior to January 1, 2000, if an Employee is a Participant in the Plan and any
one or more Defined Benefit Plans, welfare benefit funds [as defined in Code
Section 419(e)] or individual medical accounts [as defined in Code Section
415(l)(2)], maintained by an Affiliate, the sum of his Defined Benefit Plan
Fraction and his Defined Contribution Plan Fraction shall not exceed 1.0 for any
Limitation Year. (For purposes of this subsection, any adjustments in the
definition of "Compensation" permitted by the Internal Revenue Service for
purposes of determining this combined limit are included herein by reference.)
If any corrective adjustment in any Participant's benefits is required to comply
with this subsection, such adjustment shall be made exclusively under the
Defined Benefit Plans maintained by the Affiliates. If an Employee is a
Participant in the Plan and any one or more other Defined Contribution Plans
maintained by an Affiliate and a corrective adjustment in such Participant's
benefits is required to comply with this subsection, such adjustment shall be
made under the Plan.
(c) CORRECTION OF EXCESS ANNUAL ADDITIONS. If, as a result
of either the allocation of Forfeitures to an Account, a reasonable error in
estimating a Participant's Compensation or Elective Deferrals, or such other
occurrences as the Internal Revenue Service permits to trigger this subsection,
the Annual Addition made on behalf of a Participant exceeds the limitations set
forth in this Section, the Administrative Committee shall direct the Trustee to
take such of the following actions as it shall deem appropriate, specifying in
each case the amount of Contributions involved:
(1) As the first step in reducing a Participant's
Annual Addition, then the Before-Tax Contributions allocated to the
Participant's Before-Tax Account shall be reduced in the amount of the
excess, up to the total amount of Before-Tax Contributions made on
behalf of such Participant. The amount of the reduction (plus any
earnings thereon) shall be returned to the Participant. In addition,
any Matching Contributions (and earnings thereon) attributable to the
returned Before-Tax Contributions shall be forfeited, placed in a
suspense account and reallocated in the manner described in subsection
(c)(2) hereof.
(2) As the second step in reducing a Participant's
Annual Addition, Qualified Non-Elective Contributions (whether funded
by Contributions or Forfeitures) allocated to the Participant's QNEC
Account shall be reduced in the amount of the remaining excess, up to
the total amount of Qualified Non-Elective Contributions allocated to
such Participant's QNEC Account. The total amount of these reductions
shall be held in a suspense account and shall be applied to reduce
permissible Contributions in each successive year until such amount is
fully allocated; provided, so long as any suspense account is
maintained pursuant to this Section: (A) no Contributions shall be made
to the Plan which would be precluded by this Section; (B) investment
gains and losses of the Trust Fund shall not be allocated to such
suspense account; and (C) amounts in the suspense account shall be
allocated in the same manner as Contributions as of the earliest
Valuation Date possible, until such suspense account is exhausted.
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(d) SPECIAL DEFINITIONS APPLICABLE TO CODE Section 415
LIMITATIONS.
(1) ANNUAL ADDITION. For purposes of this Section,
the term "Annual Addition" for any Participant means the sum for any Limitation
Year of:
(A) contributions made by an Affiliate on
behalf of the Participant under all Defined Contribution
Plans;
(B) contributions made by the Participant
under all Defined Contribution Plans of an Affiliate
[excluding rollover contributions as defined in Code
Section 402(c)(4), 403(a)(4), 403(b)(8) and 408(d)(3) and
contributions of previously distributed benefits which result
in such a Plan's restoration of previously forfeited benefits
pursuant to Treasury Regulations Section 1.411(a)-7(d)];
provided, the Annual Additions limitation for Limitation Years
beginning before January 1, 1987 shall not be recomputed to
treat all after-tax Contributions as Annual Additions;
(C) forfeitures allocated to the Participant
under all Defined Contribution Plans of an Affiliate;
(D) amounts allocated for the benefit of the
Participant after March 31, 1984, to an individual medical
account established under a pension or annuity plan maintained
by an Affiliate, as described in Code Section 415(l); and
(E) if the Participant was a key employee
[as defined in Code Section 419A(d)(3)] at any time during the
Plan Year during which or coincident with which the Limitation
Year ends or during any preceding Plan Year, any amount paid
or accrued after December 31, 1985 by an Affiliate to a
special account under a welfare benefit fund [as defined in
Code Section 419(e)] to provide post-retirement medical or
life insurance benefits to the Participant, as described in
Code Section 419A(d)(2).
Contributions do not fail to be Annual Additions merely because they
are (i) Before-Tax Contributions that exceed the Maximum Deferral
Amount, (ii) Before-Tax Contributions that cause the Plan to fail the
ADP Tests, or (iii) Matching Contributions that cause the Plan to fail
the ACP Tests, or merely because the Contributions described in clauses
(ii) and (iii) immediately above are corrected through distribution or
recharacterization; Contributions described in clause (i) immediately
above that are distributed in accordance with the terms of Section 6.2
shall not be Annual Additions.
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(2) DEFINED BENEFIT PLAN. The term "Defined Benefit
Plan" shall mean any qualified retirement plan maintained by an
Affiliate which is not a Defined Contribution Plan.
(3) DEFINED BENEFIT PLAN FRACTION. The term "Defined
Benefit Plan Fraction" shall mean, with respect to a Participant for
any Limitation Year, a fraction, the numerator of which is his
projected annual benefit under all Defined Benefit Plans maintained by
an Affiliate, as determined as of the close of the Limitation Year, and
the denominator of which is the lesser of:
(A) 125 percent of the dollar limitation in
effect for such year under Code Section 415(b)(1)(A); or
(B) 140 percent of his average compensation
for his highest three consecutive plan years of
participation in such Defined Benefit Plans.
In appropriate cases, the Defined Benefit Plan Fraction will be
adjusted to reflect applicable transition rules provided by Code
Section 415 [inclusive of Code Section 415(b)] and the regulations
thereunder.
(4) DEFINED CONTRIBUTION PLAN. The term "Defined
Contribution Plan" shall mean any qualified retirement plan maintained
by an Affiliate which provides for an individual account for each
Participant and for benefits based solely on the amount contributed to
the Participant's account and any income, expenses, gains, losses and
forfeitures of accounts of other Participants, which may be allocated
to such Participant's account.
(5) DEFINED CONTRIBUTION PLAN FRACTION. The term
"Defined Contribution Plan Fraction" shall mean, with respect to a
Participant for any Limitation Year, a fraction, the numerator of which
is the sum of the Annual Additions to his Accounts in this Plan and to
his accounts in any other Defined Contribution Plans required to be
aggregated with this Plan under Code Section 415(h), as of the close of
the Limitation Year, and the denominator of which is the sum of the
lesser of the following amounts determined separately for the current
Limitation Year and for each prior Limitation Year in which the
Participant was employed by an Affiliate:
(A) 125 percent of the dollar limitation in
effect under Code Section 415(c)(1)(A) as of the last
day of such Limitation Year; or
(B) 35 percent of the Participant's
Compensation from Affiliates for the Limitation Year.
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In appropriate cases, the Defined Contribution Plan Fraction will be
adjusted to reflect applicable transition rules provided by Code
Section 415 and regulations thereunder.
(e) COMPLIANCE WITH CODE Section 415. The limitations in this
Section are intended to comply with the provisions of Code Section 415 so that
the maximum benefits permitted under plans of the Affiliates shall be exactly
equal to the maximum amounts allowed under Code Section 415 and the regulations
promulgated thereunder. The provisions of this Section generally are effective
as of the Effective Date, but to the extent the Code requires an earlier or
later effective date with respect to any portion(s) of this Section, such other
effective date shall apply. If there is any discrepancy between the provisions
of this Section and the provisions of Code Section 415 and the regulations
promulgated thereunder, such discrepancy shall be resolved in such a way as to
give full effect to the provisions of the Code.
6.8 CONSTRUCTION OF LIMITATIONS AND REQUIREMENTS.
The descriptions of the limitations and requirements set forth
in this Article are intended to serve as statements of the minimum legal
requirements necessary for the Plan to remain qualified under the applicable
terms of the Code. The Participating Companies do not desire or intend, and the
terms of this Article shall not be construed, to impose any more restrictions on
the operation of the Plan than required by law. Therefore, the terms of this
Article and any related terms and definitions in the Plan shall be interpreted
and operated in a manner which imposes the least restrictions on the Plan. For
example, if use of a more liberal definition of "Compensation" or a more liberal
multiple use test is permissible at any time under the law, then the more
liberal provisions may be applied as if such provisions were included in the
Plan.
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ARTICLE VII
INVESTMENTS
7.1 ESTABLISHMENT OF TRUST ACCOUNT.
All Contributions are to be paid over to the Trustee to be
held in the Trust Fund and invested in accordance with the terms of the Plan and
the Trust.
7.2 INVESTMENT FUNDS.
(a) ESTABLISHMENT OF INVESTMENT FUNDS. In accordance with
instructions from the Administrative Committee and/or the Investment Committee
and the terms of the Plan and the Trust, the Trustee shall establish and
maintain for the investment of assets of the Trust Fund, Investment Funds for
the investment of Contributions and Accounts. Such Investment Funds shall
include a "Home Depot Stock Fund" in which all Contributions may be invested.
Other Investment Funds shall be established and modified from time to time
without necessity of amendment to the Plan and shall have the investment
objectives prescribed by the Investment Committee. Investment Funds also may be
established and maintained for any limited purpose(s) the Investment Committee
may properly direct (for example, for the investment of certain specified
Accounts transferred from a prior plan). Similarly, at the proper direction of
the Investment Committee, the Trustee may eliminate one or more of the then
existing Investment Funds.
(b) REINVESTMENT OF CASH EARNINGS. Subject to the terms of
Article V, any investment earnings received in the form of cash or other
property with respect to any Investment Fund (in excess of the amounts necessary
to make cash distributions, replace abandoned Accounts, or Restoration
Contributions or to pay Plan or Trust expenses) shall be reinvested in such
Investment Fund.
7.3 PARTICIPANT DIRECTION OF INVESTMENTS.
Except as described in subsection (a) hereof, each Participant
or Beneficiary generally may direct the manner in which his Contributions and
Accounts shall be invested in and among the Investment Funds described in
Section 7.2; provided, until December 15, 1999 or such other date as permitted
by the Administrative Committee, no Participant or Beneficiary may direct
investment of any portion of his Account in the Home Depot Stock Fund.
Participant investment directions shall be made in accordance with the following
terms:
(a) INVESTMENT OF CONTRIBUTIONS. Except as otherwise provided
in this Section, each Participant may elect the percentage or amount of his
future Contributions (other than Matching Contributions) that will be invested
in each Investment Fund. An initial election of a Participant shall be made as
of the Entry Date coinciding with or immediately following the date the
Participant commences or recommences participation in the Plan and shall apply
to all such specified
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Contributions credited to such Participant's Account after such Entry Date. Such
Participant may make subsequent elections as of any Valuation Date, and such
elections shall apply to all such Contributions credited to such Participant's
Accounts the following such date; for purposes hereof, Contributions and/or
Forfeitures that are credited to a Participant's or Beneficiary's Account shall
be subject to the investment election in effect on the date on which such
amounts are actually received and credited, regardless of any prior date "as of"
which such Contributions may have been allocated to his Account. Any election
made pursuant to this subsection with respect to future Contributions shall
remain effective until changed by the Participant. In the event a Participant
never makes an investment election or makes an incomplete or insufficient
election in some manner, the Trustee, based on proper directions from the
Administrative Committee, shall direct the investment of the Participant's
future Contributions. Notwithstanding anything in this subsection (a) to the
contrary, all Matching Contributions (both Basic and Supplemental Annual) shall
be initially invested in the Home Depot Stock Fund; provided, the Participant or
Beneficiary may elect to direct the investment of his existing Matching Account
among other Investment Funds in accordance with subsection (b) below.
(b) INVESTMENT OF EXISTING ACCOUNT BALANCES. Except as
otherwise provided in this Section, each Participant or Beneficiary may elect
the percentage or amount of his existing Accounts that will be invested in each
Investment Fund. Such Participant or Beneficiary may make such elections
effective as of any Valuation Date following his Entry Date into the Plan. Each
such election shall remain in effect until changed by such Participant or
Beneficiary. In the event a Participant fails to make an election for his
existing Account pursuant to the terms of this subsection (b) which is separate
from any election he made for his Contributions pursuant to the terms of
subsection (a) hereof, or if a Participant's or Beneficiary's investment
election is incomplete or insufficient in some manner, the Participant's or
Beneficiary's existing Account will continue to be invested in the same manner
provided under the terms of the most recent election affecting his
Contributions. Notwithstanding anything in this subsection (b) to the contrary,
a Participant's or Beneficiary's Matching Account shall remain invested in the
Home Depot Stock Fund until the Participant or Beneficiary elects to change such
investment; and, thereafter, that portion of the Matching Account which has been
invested in other Investment Funds shall be reinvested according to the
Participant's or Beneficiary's subsequent investment elections along with all
other Accounts.
(c) CONDITIONS APPLICABLE TO ELECTIONS. Investment elections
described in subsections (a) and (b) hereof shall be made on a form provided by
the Administrative Committee, through an interactive telephone system or in such
other manner as the Administrative Committee may prescribe. Allocations of
investments in the various Investment Funds shall be made in even multiples of 1
percent or in such amounts as directed by the Participant or Beneficiary. A
Participant or Beneficiary may make an election under subsections (a) and (b) on
any Valuation Date and as frequently as he desires. The Administrative Committee
shall have complete discretion to adopt and revise procedures to be followed in
making such investment elections. Such procedures may include, but are not
limited to, the process of the election, the permitted frequency of making
elections, the deadline for making elections and the effective date of such
elections; provided, elections must be permitted at least once every 3 months.
Any procedures adopted by
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the Administrative Committee that are inconsistent with the deadlines or
procedures specified in this Section shall supersede such provisions of this
Section without the necessity of a Plan amendment.
(d) RESTRICTIONS ON INVESTMENTS. To the extent any
investment or reinvestment restrictions apply with respect to any Investment
Funds (for example, restrictions on changes of investments between competing
funds) or as a result of unanticipated depletion of cash liquidity within an
Investment Fund, a Participant's or Beneficiary's ability to direct investments
hereunder may be limited.
7.4 VALUATION.
As of each Valuation Date, the Trustee shall determine the
fair market value of each of the Investment Funds after first deducting any
expenses which have not been paid by the Participating Companies. All costs and
expenses incurred in connection with Plan investments and, unless paid by the
Participating Companies, all costs and expenses incurred in connection with the
general administration of the Plan and the Trust shall be allocated between the
Investment Funds in the proportion in which the amount invested in each
Investment Fund bears to the amount invested in all Investment Funds as of the
appropriate Valuation Date; provided, all costs and expenses directly
identifiable to one Investment Fund shall be allocated to that Investment Fund.
7.5 VOTING AND TENDER OFFER RIGHTS WITH RESPECT TO INVESTMENT FUNDS.
Only if, to the extent and in the manner, permitted by the
Trust and/or any documents establishing or controlling any of the Investment
Funds, shall Participants and Beneficiaries be given the opportunity to vote and
tender their interests in each such Investment Funds. Otherwise, such interests
shall be voted and/or tendered by the Investment Manager or other fiduciary that
controls such Investment Fund, as may be provided in the controlling documents.
7.6 FIDUCIARY RESPONSIBILITIES FOR INVESTMENT DIRECTIONS.
All responsibility with respect to the selection of Investment
Funds for the investment of a Participant's or Beneficiary's Accounts shall be
allocated to the Participant or Beneficiary who directs the investment. Neither
the Administrative Committee, the Investment Committee, the Trustee nor any
Participating Company shall be accountable for any loss sustained by reason of
any action taken, or investment made, pursuant to an investment direction.
7.7 APPOINTMENT OF INVESTMENT MANAGER; AUTHORIZATION TO INVEST IN
COLLECTIVE TRUST.
(a) INVESTMENT MANAGER. The Investment Committee may appoint
any one or more individuals or entities to serve as the Investment Manager or
Managers of the entire Trust or of all or any designated portion of a particular
Investment Fund or Investment Funds. The Investment Manager shall certify that
it is qualified to act as an "investment manager" within the meaning of Section
3(38) of ERISA and shall acknowledge in writing its fiduciary status with
respect to
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the assets placed under its control. The appointment of the Investment Manager
shall be effective upon the Trustee's receipt of a copy of an appropriate
Investment Committee resolution (or such later effective date as may be
contained therein), and the appointment shall continue in effect until receipt
by the Trustee of a copy of an Investment Committee resolution removing or
accepting the resignation of the Investment Manager (or such later effective
date as may be specified therein). If an Investment Manager is appointed, the
Investment Manager shall have the power to manage, acquire and dispose of any
and all assets of the Trust Fund, as the case may be, which have been placed
under its control, except to the extent that such power is reserved to the
Trustee by the Controlling Company. If an Investment Manager is appointed, the
Trustee shall be relieved of any and all liability for the acts or omissions of
the Investment Manager, and the Trustee shall not be under any obligation to
invest or otherwise manage any assets which are subject to the management of the
Investment Manager.
(b) COLLECTIVE TRUST. The Investment Committee may designate
that all or any portion of the Trust Fund shall be invested in a collective
trust fund, in accordance with the provisions of Revenue Ruling 81-100 or any
successor ruling, which collective trust fund shall have been specifically
identified in the Trust and adopted thereby as part of the Plan. The trustee of
said collective trust shall be appointed as either a co-trustee or Investment
Manager of the Plan, effective upon the Trustee's receipt of a copy of an
appropriate Investment Committee resolution (or such later effective date as may
be contained therein), and the investment in said collective trust shall
continue in effect until receipt by the Trustee of a copy of an Investment
Committee resolution terminating said investment (or such later effective date
as may be contained therein). Said designation or direction shall be in addition
to the powers to invest in commingled funds maintained by the Trustee provided
for in the Trust.
7.8 VALUE OF COMPANY STOCK.
For all purposes under the Plan for which the value of Company
Stock must be determined, the value of Company Stock shall be its fair market
value. If the Company Stock is listed on an established stock exchange, the fair
market value per share of Company Stock on any particular date shall be the
closing price of the stock on such exchange on the last business day of such
exchange which immediately precedes the date of valuation. If, for any reason,
the fair market value per share of Company Stock cannot be ascertained or is
unavailable for a particular date, the fair market value of such stock shall be
determined as of the nearest preceding date on which such fair market value can
be ascertained pursuant to the terms hereof. In the case of a transaction
between the Plan and a person described in Code Section 4975(e)(2), the value
shall be determined as of the date of the transaction; for all other purposes,
the value shall be determined as of the most recent Valuation Date.
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7.9 VOTING AND TENDER OFFER RIGHTS WITH RESPECT TO COMPANY STOCK.
Participants and Beneficiaries may exercise their voting and
tender offer rights with respect to Company Stock in the manner prescribed by
the terms of the Trust Agreement. The Administrative Committee shall be the
Named Fiduciary with respect to safeguarding the confidentiality of information
relating to the purchase, holding, and sale of Company Stock, and the exercise
of voting, tender and similar rights with respect to such Company Stock by
Participants and Beneficiaries. As required by ERISA Section 404(c), the
Administrative Committee shall ensure that procedures for safeguarding the
confidentiality of the information described in this Section are developed and
followed. In addition, to the extent (if any) required, the Administrative
Committee shall appoint an independent fiduciary to safeguard this
confidentiality in situations in which the Administrative Committee determines
there is a potential for undue influence by Home Depot with regard to the direct
or indirect exercise of shareholder rights of Participants and Beneficiaries.
7.10 PURCHASE OF LIFE INSURANCE.
Life insurance contracts shall not be purchased.
7.11 TRANSITION RULE.
For purposes of effectuating a change in the Plan's
recordkeeper, and notwithstanding anything contained in this Article VII to the
contrary, the Administrative Committee may designate a period during which no
participant direction of investments shall be permitted.
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ARTICLE VIII
VESTING IN ACCOUNTS
8.1 VESTING.
(a) GENERAL VESTING RULE.
(1) FULLY VESTED ACCOUNTS. All Participants shall at
all times be fully vested in their Before-Tax, QNEC and Rollover
Accounts. Transfer Accounts shall be subject to the vesting schedule in
subsection (a)(2) hereof unless a different vesting schedule is
specified on a schedule to the Plan.
(2) MATCHING ACCOUNT. Except as provided in
Section 8.1(b), Section 8.2 and Section 8.3, the Matching Account of
each Participant (i) who is not employed on July 1, 1999 by the
Controlling Company, and (ii) who either (A) is first employed by the
Controlling Company after July 1, 1999, or (B) is a former Employee who
is rehired after July 1, 1999 at a time when he has a Matching Account
balance remaining in the Plan which is less than 25% vested, shall vest
in accordance with the following vesting schedule, based on the total
of the Participant's Years of Vesting Service:
<TABLE>
<CAPTION>
Years of Vesting Service Vested Percentage of Participant's
Completed by Participant Matching Account
------------------------ ----------------
<S> <C>
Less than 3 Years 0%
3 Years or more 100%
</TABLE>
(b) GRANDFATHERED VESTING. The Matching Account of each
Participant who either (i) is employed by the Controlling Company on July 1,
1999, or (ii) is a former Employee of the Controlling Company who is rehired
after July 1, 1999 at a time when he has a Matching Account balance remaining in
the Plan which is at least 25% vested, shall vest in accordance with the
following schedule, based on the total of the Participant's Years of Vesting
Service:
<TABLE>
<CAPTION>
Years of Vesting Service Vested Percentage of Participant's
Completed by Participant Matching Account
------------------------ ----------------
<S> <C>
Less than 2 Years 0%
2 Years, but less than 3 25%
3 Years or more 100%
</TABLE>
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<PAGE>
8.2 VESTING UPON ATTAINMENT OF NORMAL RETIREMENT AGE, DEATH OR
DISABILITY.
Notwithstanding Section 8.1, a Participant's Matching Account
shall become 100 percENt vested and nonforfeitable upon the occurrence of any of
the following events:
(a) The Participant's attainment of Normal Retirement Age
while still employed as an Employee;
(b) The Participant's death while still employed as an
Employee; or
(c) The Participant's becoming Disabled while still employed
as an Employee.
8.3 TIMING OF FORFEITURES AND VESTING AFTER RESTORATION CONTRIBUTIONS.
If a Participant who is not yet 100 percent vested in his
Matching Account separates from service with all Affiliates, the nonvested
amount in his Matching Account shall be forfeited as soon as administratively
practicable and shall become available for allocation as a Forfeiture (in
accordance with the terms of Section 5.5) for the Plan Year during which such
separation occurs; provided if a Participant has no vested interest in his
Matching Account at the time he separates from service, he shall be deemed to
have received a cash-out distribution at the time he separates from service, and
the forfeiture provisions of this Section shall apply. If such a Participant
resumes employment with an Affiliate after he has incurred 5 or more consecutive
Breaks in Service, such nonvested amount shall not be restored. If such a
Participant resumes employment with an Affiliate before he has incurred 5
consecutive Breaks in Service, the nonvested amount shall be restored as
follows:
(a) REEMPLOYMENT AND VESTING BEFORE ANY DISTRIBUTION. If by
the date of reemployment such a Participant has not received any distributions
of his vested interest in his Matching Account, or if he has no vested interest
in his Matching Account (such that he had a deemed cashout of his Matching
Account), the nonvested amount of his Matching Account shall be restored
pursuant to the terms of Section 3.7 and shall be credited to his Matching
Account. The Participant's Matching Account then shall be subject to all of the
vesting rules in this Article VIII as if no Forfeitures had occurred.
(b) REEMPLOYMENT AND VESTING AFTER DISTRIBUTION. If by the
date of reemployment such a Participant has received a distribution of the
entire vested interest in his Matching Account, then, notwithstanding the
general rules set forth in Section 8.1, the nonvested amount of his Matching
Account shall be restored pursuant to the terms of Section 3.7. The vested
interest of such Participant in such Matching Account prior to the date such
Participant (i) again separates from service with all Affiliates, (ii) incurs 5
consecutive Breaks in Service (such that the nonvested
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<PAGE>
portion of his Matching Account is forfeited), or (iii) becomes 100 percent
vested pursuant to the terms of Section 8.1 or Section 8.2 hereof (whichever is
earliest), shall be determined pursuant to the following formula:
X= P(AB + [R x D]) - R x D),
where X is the vested interest at the relevant time (that is, the time at which
the vested percentage in such Matching Account cannot increase); P is the vested
percentage at the relevant time; AB is the balance of his Matching Account at
the relevant time; D is the amount of the distribution ; and R is the ratio of
his Matching Account balance at the relevant time in such Account's balance
immediately after the distribution.
8.4 AMENDMENT TO VESTING SCHEDULE.
Notwithstanding anything herein to the contrary, in no event
shall the terms of any amendment to the Plan reduce the vested percentage that
any Participant has earned under the Plan. In the event that the Plan provides
for Participants to vest in their Accounts at a rate which is faster than that
provided under any amendment hereto (or in the event any other change is made
that directly has an adverse effect on Participants' vested percentage), any
Participant who has 3 or more years of vesting service [calculated in a manner
consistent with Treasury Regulation Section 1.411(a)-8T (or any successor
Section)] may elect to have his vested percentage calculated under the schedule
in the Plan before any such change, and the Administrative Committee shall give
each such Participant notice of his rights to make such an election. The period
during which the election may be made shall commence with the date the amendment
is adopted or deemed to be made and shall end on the latest of: (1) 60 days
after the amendment is adopted; (2) 60 days after the amendment becomes
effective; or (3) 60 days after the Participant is issued written notice of the
amendment by a Participating Company or Administrative Committee.
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<PAGE>
ARTICLE IX
PAYMENT OF BENEFITS
9.1 BENEFITS PAYABLE UPON SEPARATION FROM SERVICE FOR REASONS OTHER
THAN DEATH.
(a) GENERAL RULE CONCERNING BENEFITS PAYABLE. In accordance
with the terms of subsection (b) hereof and subject to the restrictions set
forth in subsections (c) and (d) hereof, if a Participant separates from service
with all Affiliates for any reason other than death, or if a Participant becomes
Disabled but remains an employee of an Affiliate, he shall be entitled to
receive a distribution of the vested amount credited to his Account determined
as of the Valuation Date on which such distribution is processed. For purposes
of this Article, the "Valuation Date on which such distribution is processed"
refers to the Valuation Date on which the value of a Participant's Account is
determined for purposes of processing a distribution, even if actual payment is
made at a later date.
(b) TIMING OF DISTRIBUTION.
(1) Except as provided in subsections (b)(2),
(b)(3),(b)(4) and (c) hereof, benefits payable to a Participant who has
separated from service or become Disabled shall be distributed as soon
as administratively practicable following the last Business Day of the
first full calendar month following the later of (i) the date on which
the Participant affirmatively elects to receive such payment, or (ii)
the date on which the Participant's separation from service or
Disability has been processed by the Controlling Company's payroll
system and communicated to the Plan's third-party recordkeeper (that
is, the Administrative Committee's designee for processing
distributions). In order for such Participant's election to be valid,
he must actually separate from service or he must become Disabled on or
before the date his benefits are distributed, his election must be made
within the 90-day period ending on such date, and the Administrative
Committee (no later than 30 days and no earlier than 90 days before the
distribution date, or within such other period as may be permissible)
must have presented him with a notice informing him of his right to
defer his distribution. The Administrative Committee shall establish
terms and conditions governing elections made under this subsection
(b)(1).
(2) Notwithstanding the foregoing, in the event that
the value of the Participant's Account does not exceed the Involuntary
Cashout Amount, benefits shall be distributed as soon as
administratively practicable following the last Business Day of the
second full month following the date on which the Participant's
separation from service or Disability has been processed by the
Controlling Company's payroll system and communicated to the Plan's
third-party recordkeeper (that is, the Administrative Committee's
designee for processing distributions), unless the Participant has
elected to receive a distribution at an earlier date in accordance with
subsection (b)(1) above.
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<PAGE>
(3) Notwithstanding anything in the Plan to the
contrary, once a Participant files a claim for benefits under the Plan,
in no event shall payment of the Participant's benefit be made later
than 60 days after the end of the Plan Year which includes the latest
of (i) the date on which the Participant attained Normal Retirement
Age, (ii) the date which is the 10th anniversary of the date he
commenced participation in the Plan, or (iii) the date he actually
separates from service with all Affiliates; provided, if the amount of
the payment cannot be ascertained by the date as of which payments are
scheduled to be made hereunder, payment shall be made no later than 60
days after the earliest date on which such payment can be ascertained
under the Plan.
(4) Notwithstanding anything in the Plan to the
contrary, such Participant's benefit payments shall be made (or
commence) no later than the April 1 following the later of (i) the
calendar year in which the Participant attains age 70 1/2 or (ii) the
calendar year in which the Participant actually separates from service
with all Affiliates; provided, if such Participant is a 5% owner (as
defined in Code Section 416), benefit payments shall be made (or
commence) no later than the April 1 following the calendar year in
which the Participant attains age 70 1/2. All distributions will be
made in accordance with Code Section 401(a)(9), the regulations
promulgated under Code Section 401(a)(9), including Treasury Regulation
Section 1.401(a)(9)-2 (relating to incidental benefit limitations) and
any other provisions reflecting the requirements of Code Section
401(a)(9) and prescribed by the Internal Revenue Service; and the terms
of the Plan reflecting the requirements of Code Section 401(a)(9)
override the distribution options (if any) in the Plan which are
inconsistent with those requirements. For purposes of distributions
required under Code Section 401(a)(9), the Participant's life
expectancy shall be recalculated annually.
(c) RESTRICTIONS ON DISTRIBUTIONS FROM BEFORE-TAX AND QNEC
ACCOUNTS. Notwithstanding anything in the Plan to the contrary, (i) amounts in a
Participant's Before-Tax and QNEC Accounts and (ii) amounts in a Participant's
Transfer Accounts credited with before-tax contributions and company
contributions used to satisfy the Code Section 401(k) actual deferral percentage
test and company contributions used to satisfy the Code Section 401(m) average
contribution percentage test shall not be distributable to such Participant
earlier than the earliest of the following to occur:
(1) The Participant's death, Disability or separation
from service with all Affiliates;
(2) The termination of the Plan without the
establishment or maintenance of a successor defined contribution plan
[other than an employee stock ownership plan as defined in Code Section
4975(e)] at the time the Plan is terminated or within the period ending
12 months after the final distribution of all assets in all Before-Tax,
QNEC and Transfer Accounts described above in this subsection (c);
provided, if fewer than 2 percent of the Employees who are or were
eligible under the Plan at the time of its termination are or were
eligible under another defined contribution plan at any time during the
24-month period
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<PAGE>
beginning 12 months before the time of termination, such other plan
shall not be a successor plan;
(3) The date of disposition by the Participating
Company employing such Participant of substantially all of its assets
[within the meaning of Code Section 409(d)(2)] that were used by such
Participating Company in a trade or business; provided, such
Participant continues employment with the corporation acquiring such
assets. The sale of 85 percent of the assets used in a trade or
business will be deemed a sale of "substantially all" of the assets
used in such trade or business;
(4) The date of disposition by the Participating
Company employing such Participant of its interest in a subsidiary
[within the meaning of Code Section 409(d)(3)]; provided, such
Participant continues employment with such subsidiary;
(5) The attainment by such Participant of age 59 1/2;
or
(6) The Participant's incurrence of a financial
hardship as described in Section 10.1;
provided, for an event described in subsections (c)(2), (c)(3) or (c)(4) hereof
to constitute events permitting a distribution from the Before-Tax and QNEC
Accounts or the affected Transfer Accounts, such distribution must be made on
account of such event in the form of a lump-sum distribution, as defined in Code
Section 402(d)(4) (without regard to clauses (i), (ii), (iii) and (iv) of
subparagraph (A), or subparagraphs (B) and (F) thereof); and provided further,
for the events described in subsections (c)(3) or (c)(4) hereof to constitute
events permitting such a distribution, the Participating Company must maintain
the Plan after the disposition.
(d) DELAY UPON REEMPLOYMENT OR TERMINATION OF DISABILITY. If a
Participant becomes eligible to receive a benefit payment in accordance with the
terms of subsection (a) and subsequently is reemployed by an Affiliate (or
ceases to be Disabled, as applicable) prior to the time his Account has been
distributed, the distribution to such Participant shall be delayed until such
Participant again becomes eligible to receive a distribution from the Plan.
9.2 DEATH BENEFITS.
If a Participant dies before payment of his benefits from the
Plan is made, the Beneficiary or Beneficiaries designated by such Participant in
his latest beneficiary designation form filed with the Administrative Committee
in accordance with the terms of Section 9.6 shall be entitled to receive a
distribution of the total of the entire vested amount credited to such
Participant's Account determined as of the Valuation Date on which the
distribution is processed. The "Valuation Date on which the distribution is
processed" refers to the Valuation Date on which the value of a Participant's
Account is determined for purposes of processing a distribution, even if payment
is made at a later date. Benefits shall be distributed to such Beneficiary or
Beneficiaries as soon as
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administratively feasible following the second month after the date of the
Participant's death; provided, if the amount of the Participant's benefit is
greater than the Involuntary Cashout Amount, the Beneficiary or Beneficiaries
may elect to defer such distribution until the first day of any subsequent
month, but not later than 5 years after the date of the Participant's death. The
Administrative Committee may direct the Trustee to distribute a Participant's
Account to a Beneficiary without the written consent of such Beneficiary.
9.3 MANNER OF DISTRIBUTION.
(a) METHOD. All benefits described in this Article IX shall be
paid in the form of a single sum distribution which shall be paid in cash;
provided, to the extent a Participant's or Beneficiary's Account is invested in
Company Stock, the Participant or Beneficiary may elect to receive whole shares
of Company Stock. Any fractional shares of Company Stock shall be paid in cash.
(b) DIRECT ROLLOVER DISTRIBUTIONS. If a Participant, Surviving
Spouse or a spousal alternate payee under a qualified domestic relations order
who is the recipient of any Eligible Rollover Distribution, elects to have such
Eligible Rollover Distribution paid directly to an Eligible Retirement Plan and
specifies (in such form and at such time as the Administrative Committee may
prescribe) the Eligible Retirement Plan to which such distribution is to be
paid, such distribution shall be made in the form of a direct trustee-to-trustee
transfer to the specified Eligible Retirement Plan; provided, such transfer
shall be made only to the extent that the Eligible Rollover Distribution would
be included in gross income if not so transferred [determined without regard to
Code Section 402(c) and Section 403(a)(4)].
9.4 CASH-OUT PAYMENT OF BENEFITS.
Notwithstanding anything to the contrary in this Article IX,
in the event that the Account of any Participant who separates from the service
of all Affiliates is less than or equal to the Involuntary Cashout Amount, the
full amount of such benefit automatically shall be paid to such Participant in a
single-sum, cash-out distribution as soon as practicable following the end of
the second month following the month in which the Participant separates from
service, but in no event later than the end of the second Plan Year following
the Plan Year in which such Participant's separation occurs. In the event a
Participant has no vested interest in his Account at the time of his separation
from service, he shall be deemed to have received a cash-out distribution at the
time of his separation from service, and the forfeiture provisions of Section
8.3 shall apply.
9.5 QUALIFIED DOMESTIC RELATIONS ORDERS.
In the event the Administrative Committee receives a domestic
relations order which it determines to be a qualified domestic relations order,
the Plan shall pay such benefit to the prescribed alternate payee(s) at such
time and in such form as shall be described in the qualified domestic relations
order and permitted under Section 15.1(b). If the qualified domestic relations
order
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requires immediate payment, the specified benefit shall be paid to the alternate
payee as soon as practicable following the end of the month within which the
Administrative Committee determines that the order is qualified or, if later,
after timing restrictions and requirements under the Code are satisfied. To the
extent consistent with the qualified domestic relations order, the amount of the
payment to an alternate payee shall include earnings, interest and other
investment proceeds through (but not after) the Valuation Date as of which the
Trustee processes the distribution. If a Participant's Account is partially paid
or payable to an alternate payee, the Participant's remaining portion of his
Account shall be reduced accordingly and shall be subject to the distribution
provisions in this Article IX.
9.6 BENEFICIARY DESIGNATION.
(a) GENERAL. In accordance with the terms of this Section,
Participants shall designate and from time to time may redesignate their
Beneficiary or Beneficiaries in such form and manner as the Administrative
Committee may determine. A Participant shall be deemed to have named his
Surviving Spouse, if any, as his sole Beneficiary unless his Spouse consents to
the payment of all or a specified portion of the Participant's benefit to a
Beneficiary other than or in addition to the Surviving Spouse in a manner
satisfying the requirements of a Qualified Spousal Waiver and such other
procedures as the Administrative Committee may establish. Notwithstanding the
foregoing, a married Participant may designate a nonspouse Beneficiary without a
Qualified Spousal Waiver if the Participant establishes to the satisfaction of
the Administrative Committee that a Qualified Spousal Waiver may not be obtained
because his Spouse cannot be located or such other permissible circumstances
exist as the Secretary of the Treasury may prescribe by regulation.
(b) NO DESIGNATION OR DESIGNEE DEAD OR MISSING. In the event
that:
(1) a Participant dies without designating a
Beneficiary;
(2) the Beneficiary designated by a Participant is
not surviving when a payment is to be made to such person under the
Plan, and no contingent Beneficiary has been designated; or
(3) the Beneficiary designated by a Participant
cannot be located by the Administrative Committee within 1 year after
the date benefits are to commence to such person; then, in any of such
events, the Beneficiary of such Participant with respect to any
benefits that remain payable under this Article IX shall be the
Participant's Surviving Spouse, if any, and if not, then the estate of
the Participant.
9.7 CLAIMS.
(a) PROCEDURE. Claims for benefits under the Plan may be filed
with the Administrative Committee on forms supplied by the Administrative
Committee. The Administrative Committee shall furnish to the claimant written
notice of the disposition of a claim within 90 days
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after the application therefor is filed; provided, if special circumstances
require an extension of time for processing the claim, the Administrative
Committee shall furnish written notice of the extension to the claimant prior to
the end of the initial 90-day period, and such extension shall not exceed one
additional, consecutive 90-day period. In the event the claim is denied, the
notice of the disposition of the claim shall provide the specific reasons for
the denial, cites of the pertinent provisions of the Plan, and, where
appropriate, an explanation as to how the claimant can perfect the claim and/or
submit the claim for review.
(b) REVIEW PROCEDURE. Any Participant or Beneficiary who has
been denied a benefit, or his duly authorized representative, shall be entitled,
upon request to the Administrative Committee, to appeal the denial of his claim.
The claimant or his duly authorized representative may review pertinent
documents related to the Plan and in the Administrative Committee's possession
in order to prepare the appeal. The form containing the request for review,
together with a written statement of the claimant's position, must be filed with
the Administrative Committee no later than 60 days after receipt of the written
notification of denial of a claim provided for in subsection (a) hereof. The
Administrative Committee's decision shall be made within 60 days following the
filing of the request for review and shall be communicated in writing to the
claimant; provided, if special circumstances require an extension of time for
processing the appeal, the Administrative Committee shall furnish written notice
to the claimant prior to the end of the initial 60-day period, and such an
extension shall not exceed one additional 60-day period. If unfavorable, the
notice of decision shall explain the reason or reasons for denial and indicate
the provisions of the Plan or other documents used to arrive at the decision.
(c) SATISFACTION OF CLAIMS. Any payment to a Participant or
Beneficiary, or to his legal representative or heirs at law, all in accordance
with the provisions of the Plan, shall to the extent thereof be in full
satisfaction of all claims hereunder against the Trustee, the Administrative
Committee and the Participating Company, any of whom may require such
Participant, Beneficiary, legal representative or heirs at law, as a condition
to such payment, to execute a receipt and release therefor in such form as shall
be determined by the Trustee, the Administrative Committee or the Participating
Company, as the case may be. If receipt and release shall be required but
execution by such Participant, Beneficiary, legal representative or heirs at law
shall not be accomplished so that the terms of Section 9.1(b) (dealing with the
timing of distributions) may be fulfilled, such benefits may be distributed or
paid into any appropriate court or to such other place as such court shall
direct, for disposition in accordance with the order of such court, and such
distribution shall be deemed to comply with the requirements of Section 9.1(b).
9.8 EXPLANATION OF ROLLOVER DISTRIBUTIONS.
Within a reasonable period of time [as defined for purposes of
Code Section 402(f)] before making an Eligible Rollover Distribution from the
Plan to a Participant or Beneficiary, the Administrative Committee shall provide
such Participant or Beneficiary with a written explanation of (i) the provisions
under which the distributee may have the distribution directly transferred to
another Eligible Retirement Plan, (ii) the provisions which require the
withholding of tax on the
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distribution if it is not directly transferred to another Eligible Retirement
Plan, (iii) the provisions under which the distribution will not be subject to
tax if transferred to an Eligible Retirement Plan within 60 days after the date
on which the distributee receives the distribution, and (iv) such other terms
and provisions as may be required under Code Section 402(f) and the regulations
promulgated thereunder.
9.9 UNCLAIMED BENEFITS.
In the event a Participant becomes entitled to benefits under
this Article IX other than death benefits and the Administrative Committee is
unable to locate such Participant (after sending a letter, return receipt
requested, to the Participant's last known address, and after such further
diligent efforts as the Administrative Committee in its sole discretion deems
appropriate) within 1 year from the date upon which he becomes so entitled, the
Administrative Committee shall direct that such benefits be paid to the
person(s) who have been designated as the Participant's Beneficiary or, if none,
who have been designated as the Beneficiary by operation of the Plan under
Section 9.6, and, provided further, if the distribution is payable upon
termination of the Plan, the Administrative Committee shall not be required to
wait until the end of such 1-year period. If neither the Participant nor his
Beneficiary can be located and all of them fail to claim such benefits by the
end of the 5th Plan Year following the Plan Year in which such Participant
becomes entitled to such benefits, then the full Account of the Participant
shall be deemed abandoned and treated as a Forfeiture; provided, in the event
such Participant or Beneficiary is located or makes a claim subsequent to the
allocation of the abandoned Account, the amount of such abandoned Account
(unadjusted for any investment gains or losses from the time of abandonment)
shall be restored (from abandoned Accounts, Forfeitures, Trust earnings or
Contributions made by the Participating Companies) to such Participant or
Beneficiary, as appropriate; and, provided further, the Administrative
Committee, in its sole discretion, may delay the deemed date of abandonment of
any such Account for a period longer than the prescribed 5 Plan Years if it
believes that it is in the best interest of the Plan to do so.
9.10 TRANSITION RULE. For purposes of effectuating a change in the
Plan's recordkeeper, and notwithstanding anything contained in this Article IX
to the contrary, the Administrative Committee may designate a period during
which no distributions shall be permitted.
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ARTICLE X
IN-SERVICE WITHDRAWALS AND LOANS
10.1 HARDSHIP WITHDRAWALS.
(a) PARAMETERS OF HARDSHIP WITHDRAWALS. A Participant who is
an Employee of an Affiliate may make, on account of hardship, a withdrawal from
his Account in an amount up to, but not exceeding, the total of (i) 50 percent
of his vested Matching Account balance, and (ii) 100% of his Rollover and
Before-Tax Account balance, other than earnings attributable to Before-Tax
Contributions earned after December 31, 1988. For purposes of this subsection, a
withdrawal will be on account of "hardship" if it is necessary to satisfy an
immediate and heavy financial need of the Participant. A withdrawal based on
financial hardship cannot exceed the amount necessary to meet the immediate
financial need created by the hardship and not reasonably available from other
resources of the Participant. The Administrative Committee shall make its
determination as to whether a Participant has suffered an immediate and heavy
financial need and whether it is necessary to use a hardship withdrawal from the
Plan to satisfy that need on the basis of all relevant facts and circumstances.
The minimum amount of any hardship withdrawal shall be $1,000 or such lesser
amount established from time to time in a nondiscriminatory manner by the
Administrative Committee.
(b) IMMEDIATE AND HEAVY FINANCIAL NEED. For purposes of the
Plan, an immediate and heavy financial need exists if the withdrawal is on
account of (i) expenses for medical care described in Code Section 213(d)
previously incurred by the Participant, his Spouse or dependents, or necessary
to obtain such medical care for such persons, (ii) the purchase (excluding
mortgage payments) of a principal residence for the Participant, (iii) the
payment of tuition and related educational fees and room and board expenses for
the next 12 months of post-secondary education for the Participant, his Spouse
or dependents, (iv) the need to prevent eviction of the Participant from his
principal residence or foreclosure on the mortgage of the Participant's
principal residence, (v) the payment of funeral expenses for a member of the
Participant's immediate family (that is, his parent, step-parent, father-in-law
or mother-in-law, grandparent, brother or sister, half-brother or half-sister,
step-brother or step-sister, Spouse, child, step-child or grandchild), (vi) the
payment of federal income taxes with respect to the Participant's individual
income tax returns for the two most recently ended tax years (including
penalties and interest), (vii) the payment of legal fees and expenses incurred
as a direct result of the adoption of a child by the Participant, and (viii) the
payment of uninsured costs for repairs to the Participant's principal residence
as a result of unforeseen damages caused by a natural disaster or accident.
(c) NECESSARY TO SATISFY A FINANCIAL NEED. In determining
whether the withdrawal is necessary to relieve the Participant's immediate and
heavy financial need, the Administrative Committee shall rely upon the
Participant's reasonable representation that the need cannot be relieved: (i)
through reimbursement or compensation by insurance or otherwise; (ii) by
reasonable liquidation of the Participant's assets to the extent that
liquidation would not itself cause an
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immediate and heavy financial need; (iii) by cessation of Before-Tax
Contributions to the Plan; or (iv) by other distributions or nontaxable (at the
time of the loan) loans from plans maintained by one or more Participating
Companies or by borrowing from commercial sources on reasonable commercial
terms. In determining the amount of a Participant's assets, the resources of his
Spouse and minor dependents are considered to be reasonably available to the
Participant unless they are held for his child or children under an irrevocable
trust or under the Uniform Gifts to Minors Act. The amount of an immediate and
heavy financial need may include amounts necessary for the Participant to pay
any federal, state or local taxes which are reasonably anticipated to result
from the hardship withdrawal.
(d) FORM OF DISTRIBUTION. Subject to the election of a
Participant, any hardship withdrawal may be paid entirely in cash or entirely in
whole shares of Company Stock (with any portion of the withdrawal reprocessed by
a fractional share being paid in cash).
(e) SOURCE OF FUNDS. The amount of a Participant's hardship
withdrawal shall be charged first against his Rollover Account, then against his
Matching Account, and then against his Before-Tax Account.
10.2 AGE 65 WITHDRAWALS.
(a) CONDITIONS. A Participant who has attained age 65 and is
an Employee of an Affiliate may request a withdrawal of all or part of his
Account. A Participant may request two such withdrawals during any rolling
12-month period.
(b) SOURCE OF FUNDS. The amount of such withdrawal shall be
charged first against his Rollover Account, then against his Matching Account,
and then against his Before-Tax Account, and shall be charged pro-rata against
the Investment Funds in which such Accounts are invested.
(c) METHOD. A withdrawal described in this Section 10.2 shall
be paid in the form of a single-sum distribution which shall, except as
otherwise provided herein, be paid in cash. To the extent that a portion of a
Participant's Account that is to be withdrawn is invested in Company Stock, such
withdrawal shall be made in the form of Company Stock or cash, at the election
of the Participant.
10.3 ROLLOVER ACCOUNT WITHDRAWALS.
A Participant may request a withdrawal of all or part of his
Rollover Account. A withdrawal under this Section 10.3 shall be paid in the form
of a single-sum distribution which shall, except as otherwise provided herein,
be paid in cash. To the extent that a portion of a Participant's Account that is
to be withdrawn is invested in Company Stock, such withdrawal shall be made in
the form of Company Stock or cash, at the election of the Participant.
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10.4 ELECTION TO WITHDRAW.
All applications for withdrawals shall be in writing on a form
provided by the Administrative Committee and shall contain such information and
be made at such time as the Administrative Committee may reasonably request. Any
application for a withdrawal must be submitted to the Administrative Committee
(or its delegatee) in accordance with procedures established under the Plan
prior to the payment date of such withdrawal.
10.5 PAYMENT OF WITHDRAWAL.
The amount of any withdrawal under Section 10.1, Section 10.2
or Section 10.3 shall be paid to a Participant in a single-sum payment as soon
as practicable after the Administrative Committee receives and approves a
properly completed withdrawal application. At the time of making any withdrawals
for a Participant, his Account may be charged with any administrative expenses
(such as check processing fees) specifically allocable against his Account
pursuant to the policies of the Administrative Committee. Any withdrawal shall
be treated as a payment of benefits under Articles IX and X and all of the
requirements of those Articles.
10.6 LOANS TO PARTICIPANTS.
(a) GRANT OF AUTHORITY. Loans to Participants, Beneficiaries
and alternate payees who are parties-in-interest as defined in Section 3(14) of
ERISA generally shall be allowed; provided, if the Administrative Committee
determines in its sole discretion that it is not administratively feasible or
desirable to make such loans during any period of time, no loans shall be made
during such period. Subject to the limitations set forth in this Section and to
such uniform and nondiscriminatory rules as may from time to time be adopted by
the Administrative Committee and set forth in a written policy statement which
hereby is incorporated by reference, the Trustee, upon proper application by an
eligible Participant, Beneficiary or alternate payee on forms approved by the
Administrative Committee, may make a loan or loans to the borrower.
(b) NONDISCRIMINATORY POLICY. Loans shall be available to all
Participants, Beneficiaries and alternate payees who are parties-in-interest as
defined in Section 3(14) of ERISA on a reasonably equivalent basis, without
regard to an individual's race, color, religion, age, sex or national origin.
Loans shall not be made available to borrowers who are Highly Compensated
Employees in an amount greater than the amount available to other borrowers;
provided, this limitation shall be interpreted to mean that, subject to the
other limitations in this Section, the same percentage of each borrower's
Account balance may be loaned to each such borrower regardless of the actual
amount of his Account balance.
(c) MINIMUM LOAN AMOUNT. The minimum amount of any loan shall
be $1,000 or such lesser amount established by the Administrative Committee in
the written loan policy statement.
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(d) MAXIMUM LOAN AMOUNT. Unless the Administrative Committee,
in its sole discretion in the written loan policy statement, permits fewer or
additional loans, no borrower may have more than two loans outstanding at any
time not more than one of which may be a residential purchase loan described in
subsection (e)(2) below. In addition, no loan may be made to any borrower from
the Plan if the amount of such loan exceeds the lesser of:
(1) $50,000 minus the highest aggregate principal
balance, outstanding during the year ending on the day before such loan
is made, of all loans made to the borrower by the qualified employer
plans [as defined in Code Section 72(p)(4)(A)] maintained by the
Affiliates; or
(2) the difference between (A) 50 percent of the
borrower's total interest in the Plan and all other qualified employer
plans maintained by the Affiliates, minus (B) the total amount of all
loans outstanding on the date the loan is made from all qualified
employer plans maintained by the Affiliates.
(e) MAXIMUM LOAN TERM.
(1) Except as provided in subsection (e)(2) hereof,
the terms of any loan made to a borrower from the Plan shall require
that the full amount of the loan be repaid within the 5-year period (or
such other shorter maximum term as the Administrative Committee may
establish in its written loan policy statement) commencing on the date
the loan is made, and in no event shall the repayment period of the
loan subsequently be extended beyond such 5-year period. The Trustee
shall make a diligent effort to collect the full amount of the loan
within this specified repayment period and shall inform the borrower
that, in the event the loan is not fully repaid within the 5-year
period, the borrower will be treated as having received a taxable
distribution from the Plan.
(2) The 5-year repayment rule set forth in subsection
(e)(1) hereof shall not apply to the extent that a loan to a borrower
from the Plan is used to acquire any dwelling unit which is used, or
within a reasonable time is to be used, as a principal residence of the
borrower. Whether a dwelling unit is to be used within a reasonable
time as a principal residence is to be determined by the Administrative
Committee at the time the loan is made, and the Administrative
Committee may require such written statements and other evidence from
the borrower as it deems necessary to make this determination. Loans
made with respect to principal residences pursuant to this subsection
shall be repaid within a 15-year period (or such shorter maximum time
as the Administrative Committee may establish in its written loan
policy statement).
(f) TERMS OF REPAYMENT. All loans to borrowers made by the Trustee at
the direction of the Administrative Committee shall be subject to a definite
repayment schedule which requires substantially level amortization over the term
of the loan with payments to be made not less frequently than quarterly (and
more frequently if required by the Administrative Committee's written
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loan policy statement). Unless the Administrative Committee provides for
different methods in its written loan policy statement, payments shall be made
by Participants who are employees of Affiliates on a payroll deduction basis,
and payments from other borrowers shall be made by cash, check or other cash
equivalent.
(g) ADEQUACY OF SECURITY. All loans to borrowers made by the
Trustee at the direction of the Administrative Committee shall be secured by the
pledge of a dollar amount of the borrower's Account balance (i) which is not
less than the principal amount of the loan plus an additional amount, if any,
which the Administrative Committee, pursuant to its written loan policy
statement, deems desirable to secure payment of interest accruing on the loan,
and (ii) which in no event (when aggregated for all outstanding loans) is
greater than 50 percent of the borrower's Account balance immediately after the
origination of the loan. Notwithstanding anything herein to the contrary, the
pledge of such security shall be made in such manner and amount as the
Administrative Committee, pursuant to its written loan policy statement, may
require for the loan to be considered adequately secured. A loan will be
considered to be "adequately secured" if the security posted for such loan is in
addition to and supporting a promise to pay, if it is pledged in a manner such
that it may be sold, foreclosed upon, or otherwise disposed of upon default of
repayment of the loan, and if the value and liquidity of that security is such
that it may reasonably be anticipated that loss of principal or interest will
not result from the loan. The adequacy of such security will be determined in
light of the type and amount of security which would be required in the case of
an otherwise identical transaction in a normal commercial setting between
unrelated parties on arm's-length terms.
(h) RATE OF INTEREST. A loan from the Plan to a borrower must
bear a reasonable rate of interest. A loan will be considered to bear "a
reasonable rate of interest" if such loan provides the Plan with a return
commensurate with interest rates charged by persons in the business of lending
money for loans which would be made under similar circumstances. In general, the
Administrative Committee's decision as to the rate of interest for any Plan loan
shall be based primarily on the rate of interest that one or more local banks or
other lending institutions would charge on a similar loan, taking into account,
among other things, the collateral pledged to secure the loan.
(i) SOURCE OF LOAN AMOUNTS. The proceeds of a loan shall be
charged against the Accounts of the borrower in the manner described by the
Administrative Committee in its loan policy statement.
(j) CREDITING LOAN PAYMENTS TO ACCOUNTS. The loan shall be
considered a directed investment of the borrower and any principal and interest
paid on the loan shall be considered a part of his total Account. Each payment
of principal and interest shall be credited to the Investment Funds and
subaccounts of the Participant's Account in the manner described by the
Administrative Committee in its loan policy statement.
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(k) REMEDIES IN THE EVENT OF DEFAULT. If any loan payments are
not paid as and when due, the Administrative Committee may declare the loan to
be in default. The Administrative Committee may take such actions, as it deems
appropriate in accordance with its written loan policy statement, to allow the
borrower to cure such default or to otherwise collect such overdue payments or,
as the case may be, the outstanding balance of the loan. Among other things, the
Administrative Committee's actions may include causing all or any portion of the
borrower's Account which has been pledged to secure the loan to be used to repay
such loan; provided, although the Administrative Committee may treat any portion
of the loan balance that remains outstanding after a default as taxable income
to the borrower in accordance with the terms of Code Section 72(p), no portion
of such outstanding loan balance may be treated as a reduction of a
Participant's Account balance until such time as such reduction, if treated as a
distribution, will not breach the special distribution restrictions of Code
Section 401(k)(2)(B).
(l) QUALIFIED MILITARY SERVICE. Loan repayments will be
suspended under this Plan as permitted under Code Section 414(u)(4).
10.7 TRANSITION RULE. For purposes of effectuating a change in the
Plan's recordkeeper, and notwithstanding anything contained in this Article X to
the contrary, the Administrative Committee may designate a period during which
no withdrawals or loans shall be permitted.
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ARTICLE XI
ADMINISTRATION
11.1 ADMINISTRATIVE COMMITTEE.
(a) APPOINTMENT. The Administrative Committee shall serve as a
Named Fiduciary and consist of the Administrative Committee of The Home Depot
FutureBuilder or such other committee as is appointed by the Home Depot Board.
(b) CERTIFICATION. To the extent required by the Trustee, a
written certification shall be given to the Trustee by the Senior Human
Resources Officer of Home Depot of all members of the Administrative Committee
together with a specimen signature of each member. For all purposes hereunder,
the Trustee shall be conclusively entitled to rely upon such certification until
the Trustee is otherwise notified in writing.
11.2 ORGANIZATION OF ADMINISTRATIVE COMMITTEE.
The Administrative Committee may elect a Chairman and a
Secretary from among its members. In addition to those powers set forth
elsewhere in the Plan, the Administrative Committee may appoint such agents, who
need not be members of such Administrative Committee, as it may deem necessary
for the effective performance of its duties and may delegate to such agents such
powers and duties, whether ministerial or discretionary, as the Administrative
Committee may deem expedient or appropriate. The compensation of such agents who
are not full-time Employees of a Participating Company shall be fixed by the
Administrative Committee and, to the extent or in such portions as directed by
the Administrative Committee, shall be paid by a specified Participating Company
or from the Trust Fund. The Administrative Committee shall act by majority vote
or by resolutions signed by a majority of the Administrative Committee members.
Its members shall serve as such without compensation.
11.3 POWERS AND RESPONSIBILITY.
The Administrative Committee shall fulfill the duties of
"administrator" as set forth in Section 3(16) of ERISA and shall have complete
control of the administration of the Plan hereunder, with all powers necessary
to enable it properly to carry out its duties as set forth in the Plan and the
Trust Agreement. The Administrative Committee shall have the following duties
and responsibilities:
(a) to construe the Plan and to determine all questions that
shall arise thereunder;
(b) to have all powers elsewhere herein conferred upon it;
(c) to decide all questions relating to the eligibility of
Employees to participate in the benefits of the Plan;
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(d) to determine the benefits of the Plan to which any
Participant or Beneficiary may be entitled;
(e) to maintain and retain records relating to Participants
and Beneficiaries;
(f) to prepare and furnish to Participants all information
required under federal law or provisions of the Plan to be furnished to them;
(g) to prepare and furnish to the Trustee sufficient employee
data and the amount of Contributions received from all sources so that the
Trustee may maintain separate accounts for Participants and Beneficiaries and
make required payments of benefits;
(h) to prepare and file or publish with the Secretary of
Labor, the Secretary of the Treasury, their delegates and all other appropriate
government officials all reports and other information required under law to be
so filed or published;
(i) as permitted in Trust Agreement, to provide directions to
the Trustee with respect to methods of benefit payment, and all other matters
where called for in the Plan or requested by the Trustee;
(j) to engage assistants and professional advisers;
(k) to arrange for fiduciary bonding; and
(l) to provide procedures for determination of claims for
benefits.
all as further set forth herein.
11.4 RECORDS OF ADMINISTRATIVE COMMITTEE.
(a) NOTICES AND DIRECTIONS. Any notice, direction, order,
request, certification or instruction of the Administrative Committee to the
Trustee shall be in writing and shall be signed by a member of the
Administrative Committee. The Trustee and every other person shall be entitled
to rely conclusively upon any and all such proper notices, directions, orders,
requests, certifications and instructions received from the Administrative
Committee and reasonably believed to be properly executed, and shall act and be
fully protected in acting in accordance with any such directions that are
proper.
(b) RECORDS. All acts and determinations of the Administrative
Committee shall be duly recorded by its Secretary or under his supervision, and
all such records (including records necessary to demonstrate compliance with the
nondiscrimination requirements of the Code), together with such other documents
as may be necessary for the administration of the Plan, shall be preserved in
the custody of such Secretary.
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11.5 DELEGATION.
The Administrative Committee shall have the power to delegate
specific fiduciary, administrative and ministerial responsibilities (other than
Trustee responsibilities). Such delegations may be to officers or Employees of a
Participating Company or to other persons, all of whom shall serve at the
pleasure of the Administrative Committee. References in the Plan to the
Administrative Committee are deemed to include any person authorized to act on
its behalf pursuant to this Section and Section 12.6.
11.6 REPORTING AND DISCLOSURE.
The Administrative Committee shall keep all individual and
group records relating to Participants and Beneficiaries and all other records
necessary for the proper operation of the Plan. Such records shall be made
available to the Participating Companies and to each Participant and Beneficiary
for examination during normal business hours except that a Participant or
Beneficiary shall examine only such records as pertain exclusively to the
examining Participant or Beneficiary and the Plan and Trust Agreement. The
Administrative Committee shall prepare and shall file as required by law or
regulation all reports, forms, documents and other items required by ERISA, the
Code and every other relevant statute, each as amended, and all regulations
thereunder. This provision shall not be construed as imposing upon the
Administrative Committee the responsibility or authority for the preparation,
preservation, publication or filing of any document required to be prepared,
preserved, published or filed by the Trustee or by any other Named Fiduciary to
whom such responsibilities are delegated by law or by the Plan.
11.7 CONSTRUCTION OF THE PLAN.
The Administrative Committee shall take such steps as are
considered necessary and appropriate to remedy any inequity that results from
incorrect information received or communicated in good faith or as the
consequence of an administrative error. The Administrative Committee, in its
sole and full discretion, shall interpret the Plan and shall determine the
questions arising in the administration, interpretation and application of the
Plan. The Administrative Committee shall endeavor to act, whether by general
rules or by particular decisions, so as not to discriminate in favor of or
against any person and so as to treat all persons in similar circumstances
uniformly. The Administrative Committee shall correct any defect, reconcile any
inconsistency or supply any omission with respect to the Plan.
11.8 ASSISTANTS AND ADVISORS.
(a) ENGAGING ADVISORS. The Administrative Committee shall have
the right to hire, at the expense of the Controlling Company (to be divided
equitably among the Participating Companies), such professional assistants and
consultants as it, in its sole discretion, deems necessary or advisable. To the
extent that the costs for such assistants and advisors are not so paid by the
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Controlling Company, they shall be paid at the direction of the Administrative
Committee from the Trust Fund as an expense of the Trust Fund.
(b) RELIANCE ON ADVISORS. The Administrative Committee and the
Participating Companies shall be entitled to rely upon all certificates and
reports made by an accountant, attorney or other professional adviser selected
pursuant to this Section; the Administrative Committee, the Participating
Companies, and the Trustee shall be fully protected in respect to any action
taken or suffered by them in good faith in reliance upon the advice or opinion
of any such accountant, attorney or other professional adviser; and any action
so taken or suffered shall be conclusive upon each of them and upon all other
persons interested in the Plan.
11.9 INVESTMENT COMMITTEE.
(a) FUNDING POLICY. The Investment Committee is the Named
Fiduciary to establish and carry out a funding policy consistent with the Plan
objectives and with the requirements of any applicable law. Such policy shall be
in writing and shall have due regard for the liquidity needs of the Trust. Such
funding policy shall also state the general investment objectives of the Trust
and the philosophy upon which maintenance of the Plan is based.
(b) APPOINTMENT. The Investment Committee shall consist of the
Investment Committee of The Home Depot FutureBuilder or such other committee as
is appointed by the Home Depot Board.
(c) DUTIES. The Investment Committee also shall have the
following duties:
(1) To appoint one or more persons to serve as
investment manager with respect to all or part of the Plan assets,
including assets maintained under separate accounts of an insurance
company;
(2) To allocate the responsibility and authority
being carried out by the Investment Committee among the members of the
Investment Committee;
(3) To take any action appropriate to ensure that the
Plan assets are invested for the exclusive purpose of providing
benefits to Participants and their Beneficiaries in accordance with the
Plan and defraying reasonable expenses of administering the Plan,
subject to the requirements of any applicable law; and
(4) To employ one or more persons to render advice
with respect to any responsibility or authority being carried out by
the Investment Committee. To the extent that the costs for such
assistants and advisors are not paid by a Participating Company, they
shall be paid at the direction of the Investment Committee from the
Trust Fund as an expense of the Trust Fund.
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11.10 DIRECTION OF TRUSTEE.
The Investment Committee shall have the power to provide the
Trustee with general investment policy guidelines and directions to assist the
Trustee respecting investments made in compliance with, and pursuant to, the
terms of the Plan.
11.11 BONDING.
The Administrative Committee shall arrange for fiduciary
bonding as is required by law, but no bonding in excess of the amount required
by law shall be required by the Plan.
11.12 INDEMNIFICATION.
Each of the Administrative Committee and the Investment
Committee and each member of those Committees shall be indemnified by the
Participating Companies against judgment amounts, settlement amounts (other than
amounts paid in settlement to which the Participating Companies do not consent)
and expenses, reasonably incurred by the Committee or him in connection with any
action to which the Committee or he may be a party (by reason of his service as
a member of a Committee) except in relation to matters as to which the Committee
or he shall be adjudged in such action to be personally guilty of gross
negligence or willful misconduct in the performance of its or his duties. The
foregoing right to indemnification shall be in addition to such other rights as
such Committee or each Committee member may enjoy as a matter of law or by
reason of insurance coverage of any kind. Rights granted hereunder shall be in
addition to and not in lieu of any rights to indemnification to which such
Committee or each Committee member may be entitled pursuant to the by-laws of
the Controlling Company. Service on the Administrative or Investment Committee
shall be deemed in partial fulfillment of a Committee member's function as an
Employee, officer and/or director of the Controlling Company or any
Participating Company, if he serves in such other capacity as well.
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ARTICLE XII
ALLOCATION OF AUTHORITY AND RESPONSIBILITIES
12.1 AUTHORITY AND RESPONSIBILITIES.
(a) GENERAL RESPONSIBILITIES. The Controlling Company, as Plan
sponsor, and the Board each shall serve as a fiduciary having the following (and
only the following) authority and responsibilities:
(1) To communicate such information to the
Administrative Committee and the Investment Committee as each needs for
the proper performance of its duties; and
(2) To provide channels and mechanisms through which
the Administrative Committee can communicate with Participants and
Beneficiaries.
(b) AUTHORITY OF PARTICIPATING COMPANIES. Notwithstanding
anything herein to the contrary, and in addition to the authority and
responsibilities specifically given to the Participating Companies in the Plan,
the Administrative Committee, in its sole discretion, may grant the
Participating Companies such authority and charge them with such
responsibilities as the Administrative Committee deems appropriate.
12.2 ADMINISTRATIVE COMMITTEE.
The Administrative Committee shall have the authority and
responsibilities imposed by Article XI and this Article XII. With respect to
said authority and responsibilities, the Administrative Committee shall be a
Named Fiduciary, and as such, shall have no authority or responsibilities other
than as granted in the Plan or as imposed as a matter of law.
12.3 INVESTMENT COMMITTEE.
The Investment Committee, if any is appointed, shall be a
Named Fiduciary with respect to its authority and responsibilities, as imposed
by Article XI and this Article XII. The Investment Committee shall have no
authority or responsibilities other than those granted in the Plan and the
Trust.
12.4 TRUSTEE.
The Trustee shall have the powers and duties set forth in the
Trust Agreement.
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12.5 LIMITATIONS ON OBLIGATIONS OF FIDUCIARIES.
No fiduciary shall have authority or responsibility to deal
with matters other than as delegated to it under the Plan, under the Trust
Agreement or by operation of law. A fiduciary shall not in any event be liable
for breach of fiduciary responsibility or obligation by another fiduciary
(including Named Fiduciaries) if the responsibility or authority for the act or
omission deemed to be a breach was not within the scope of such fiduciary's
authority or delegated responsibility.
12.6 DELEGATION.
Named Fiduciaries shall have the power to delegate specific
fiduciary responsibilities (other than Trustee responsibilities). Such
delegations may be to officers or Employees of a Participating Company or to
other persons, all of whom shall serve at the pleasure of the Named Fiduciary
making such delegation and, if full-time Employees of a Participating Company,
without compensation. Any such person may resign by delivering a written
resignation to the delegating Named Fiduciary. Vacancies created by any reason
may be filled by the appropriate Named Fiduciary or the assigned
responsibilities may be reabsorbed or redelegated by the Named Fiduciary.
12.7 MULTIPLE FIDUCIARY ROLES.
Any person may hold more than one position of fiduciary
responsibility and shall be liable for each such responsibility separately.
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ARTICLE XIII
AMENDMENT, TERMINATION AND ADOPTION
13.1 AMENDMENT.
The provisions of the Plan may be amended at any time and from
time to time by the Administrative Committee; provided:
(a) No amendment shall increase the duties or liabilities of
the Trustee without the consent of such party;
(b) No amendment shall decrease the balance or vested
percentage of an Account or eliminate an optional form of benefit;
(c) No amendment shall be made which would divert any of the
assets of the Trust Fund to any purpose other than the exclusive benefit of
Participants and Beneficiaries, except that the Plan and Trust Agreement may be
amended retroactively and to affect the Accounts of Participants and
Beneficiaries if necessary to cause the Plan and Trust to be qualified and
exempt from taxation under the Code;
(d) No amendment shall be made which constitutes a restatement
of the Plan that significantly changes the Plan design without approval of the
Board;
(e) No amendment shall effect any changes in the contribution
formula without approval of the Board; and
(f) Each amendment shall be approved by the Administrative
Committee by resolution.
13.2 TERMINATION.
(a) RIGHT TO TERMINATE. The Controlling Company expects the
Plan to be continued indefinitely, but it reserves the right to terminate the
Plan or to completely discontinue Contributions to the Plan at any time by
action of the Board. In either event, the Administrative Committee, Investment
Committee, each Participating Company and the Trustee shall be promptly advised
of such decision in writing. [For termination of the Plan by a Participating
Company as to itself (rather than the termination of the entire Plan) refer to
Section 13.3(e).]
(b) VESTING UPON COMPLETE TERMINATION. If the Plan is
terminated by the Controlling Company or Contributions to the Plan are
completely discontinued, the Accounts of all Participants, Beneficiaries or
other successors in interest as of such date shall become 100 percent vested and
nonforfeitable. Upon termination of the Plan, the Administrative Committee, in
its sole
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discretion, shall instruct the Trustee either (i) to continue to manage and
administer the assets of the Trust for the benefit of the Participants and
Beneficiaries pursuant to the terms and provisions of the Trust Agreement, or
(ii) if there is no successor plan permitted under the terms of Section 9.1(c)
or no benefits subject to the restrictions in said Section, to pay over to each
Participant the value of his interest in a single-sum and to thereupon dissolve
the Trust.
(c) DISSOLUTION OF TRUST. In the event that the Administrative
Committee decides to dissolve the Trust, as soon as practicable following the
termination of the Plan or the Administrative Committee's decision, whichever is
later, the assets under the Plan shall be converted to cash or other
distributable assets, to the extent necessary to effect a complete distribution
of the Trust assets as described hereinbelow. Following completion of the
conversion, on a date selected by the Administrative Committee, each individual
with an Account under the Plan on such date shall receive a distribution of the
total amount then credited to his Account. The amount of cash and other property
distributable to each such individual shall be determined as of the date of
distribution (treating, for this purpose, such distribution date as the
Valuation Date as of which the distributable amount is determined). In the case
of a termination distribution as provided herein, the Administrative Committee
may direct the Trustee to take any action provided in Article IX dealing with
unclaimed benefits, except that it shall not be necessary to hold funds for any
period of time stated in such Section. Within the expense limitations set forth
in the Plan, the Administrative Committee may direct the Trustee to use assets
of the Trust Fund to pay any due and accrued expenses and liabilities of the
Trust and any expenses involved in termination of the Plan (other than expenses
incurred for the benefit of the Participating Companies).
(d) VESTING UPON PARTIAL TERMINATION. In the event of a
partial termination of the Plan [as provided in Code Section 411(d)(3)], the
Accounts of those Participants and Beneficiaries affected shall become 100
percent vested and nonforfeitable and, unless transferred to another qualified
plan, shall be distributed in a manner and at a time consistent with the terms
of Article IX.
13.3 ADOPTION OF THE PLAN BY A PARTICIPATING COMPANY.
(a) PROCEDURES FOR PARTICIPATION. As of the Effective Date,
the Controlling Company and the other Affiliates listed on Schedule A hereto
shall be Participating Companies in the Plan. Any other company may become a
Participating Company and commence participation in the Plan subject to the
provisions of this subsection. In order for a company to become a Participating
Company, the Administrative Committee must designate such company as a
Participating Company and specify the effective date of such designation. The
name of any company which shall commence participation in the Plan, along with
the effective date of its participation, may be recorded in the records of the
Administrative Committee or on Schedule A hereto which may be appropriately
modified each time a Participating Company is added or deleted. To adopt the
Plan as a Participating Company, the board of directors of the company must
approve a resolution expressly adopting the Plan for the benefit of its eligible
employees and accepting designation as a Participating Company, subject to all
of the provisions of this Plan and of the Trust. The resolution shall specify
the date as of which the designation as a Participating Company shall be
effective. A
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copy of the resolution (certified if requested) of the board of directors of the
adopting Participating Company shall be provided to the Administrative
Committee. Upon adoption of the Plan by a Participating Company as herein
provided, the employees of such company shall be eligible to participate in the
Plan subject to the terms hereof and of the resolution of the Administrative
Committee designating the adopting company as such.
(b) SINGLE PLAN. The Plan, as adopted by all Participating
Companies, shall be considered a single plan for purposes of Treasury Regulation
Section 1.414(l)-1(b)(1). All assets contributed to the Plan by the
Participating Companies shall be held together in a single fund and shall be
available to pay benefits to all Participants and Beneficiaries. Nothing
contained herein shall be construed to prohibit the separate accounting of
assets contributed by the Participating Companies for purposes of cost
allocation, contributions, forfeitures and other purposes, pursuant to the terms
of the Plan and as directed by the Administrative Committee.
(c) AUTHORITY UNDER PLAN. As long as a Participating Company's
designation as such remains in effect, such Participating Company shall be bound
by, and subject to, all provisions of the Plan and the Trust. The exclusive
authority to amend the Plan and the Trust shall be vested in the Administrative
Committee, and no other Participating Company shall have any right to amend the
Plan or the Trust. Any amendment to the Plan or the Trust adopted by the
Administrative Committee shall be binding upon every Participating Company
without further action by such Participating Company.
(d) CONTRIBUTIONS TO PLAN. A Participating Company shall be
required to make Contributions to the Plan at such times and in such amounts as
specified in Articles III and VI. The Contributions made (or to be made) to the
Plan by the Participating Companies shall be allocated between and among such
companies in whatever equitable manner or amounts as the Administrative
Committee shall determine.
(e) WITHDRAWAL FROM PLAN. The Administrative Committee may
terminate the designation of a Participating Company, effective as of any date.
A company's status as a Participating Company automatically shall cease as of
the date it ceases to be an Affiliate with the Controlling Company. A
Participating Company may withdraw from participation in the Plan, with the
approval of the Administrative Committee, by action of its board of directors,
provided such action is communicated in writing to the Administrative Committee.
The withdrawal of a Participating Company shall be effective as of the last day
of the Plan Year in which the notice of withdrawal is received by the
Administrative Committee (unless the Controlling Company or Administrative
Committee consents to a different effective date). Any such Participating
Company which ceases to be a Participating Company shall be liable for all costs
and liabilities (whether imposed under the terms of the Plan, the Code or ERISA)
accrued through the effective date of its withdrawal or termination. The
withdrawing or terminating Participating Company shall have no right to direct
that assets of the Plan be transferred to a successor plan for its employees
unless such transfer is approved by the Controlling Company or Administrative
Committee in its sole discretion.
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13.4 MERGER, CONSOLIDATION AND TRANSFER OF ASSETS OR LIABILITIES.
In the event of any merger or consolidation of the Plan with,
or transfer of assets or liabilities of the Plan to, any other plan, each
Participant and Beneficiary shall have a plan benefit in the surviving or
transferee plan (determined as if such plan were then terminated immediately
after such merger, consolidation or transfer of assets or liabilities) that is
equal to or greater than the benefit he would have been entitled to receive
under the Plan immediately before such merger, consolidation or transfer of
assets or liabilities, if the Plan had terminated at that time.
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ARTICLE XIV
TOP-HEAVY PROVISIONS
14.1 TOP-HEAVY PLAN YEARS.
The provisions set forth in this Article XIV shall become
effective for any Plan Years with respect to which the Plan is determined to be
a Top-Heavy Plan and shall supersede any other provisions of the Plan which are
inconsistent with these provisions; provided, if the Plan is determined not to
be a Top-Heavy Plan in any Plan Year subsequent to a Plan Year in which the Plan
was a Top- Heavy Plan, the provisions of this Article XIV shall not apply with
respect to such subsequent Plan Year; and, provided, further, to the extent that
any of the requirements of this Article XIV shall no longer be required under
Code Section 416 or any other section of the Code, such requirements shall be of
no force or effect.
14.2 DETERMINATION OF TOP-HEAVY STATUS.
(a) APPLICATION. The Plan will be considered a Top-Heavy Plan
for a Plan Year if either:
(1) the Plan is not part of a Required Aggregation
Group or a Permissive Aggregation Group and, as of the Determination
Date of such Plan Year, the value of the Accounts of the Participants
who are Key Employees under the Plan exceeds 60 percent of the value of
the Accounts of all Participants; or
(2) the Plan is part of a Required Aggregation Group
which, as of the Determination Date of such Plan Year, is a Top-Heavy
Group;
provided, the Plan shall not be considered a Top-Heavy Plan for a Plan Year
under subsection (a)(2) hereof if the Plan also is part of a Permissive
Aggregation Group which is not a Top-Heavy Group for such Plan Year.
(b) SPECIAL DEFINITIONS.
(1) DETERMINATION DATE. The term "Determination Date"
shall mean (i) in the case of the Plan Year that includes the Effective
Date of the Plan, the last day of such Plan Year, and (ii) with respect
to any other Plan Year of the Plan, the last day of the immediately
preceding Plan Year and (iii) for any plan year of each other qualified
plan maintained by a Participating Company or Affiliate which is part
of a Required or Permissive Aggregation Group, the date determined
under (i) or (ii) above as if the term "Plan Year" means the plan year
for each such other qualified plan.
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(2) KEY EMPLOYEE. The term "Key Employee" shall mean
an Employee defined in Code Section 416(i) and the Treasury regulations
thereunder. Generally, Key Employee shall mean an Employee, former
Employee or deceased Employee (and the beneficiaries of any such
Employee) who, at any time during the Plan Year or the 4 previous Plan
Years, was either:
(A) an officer of an Affiliate having a
combined annual Compensation from all Affiliates greater than
50 percent of the amount in effect under Code Section
415(b)(1)(A) for any such Plan Year; provided, no less than
one nor more than fifty individuals shall be treated as
officers of an Affiliate;
(B) one of the ten individuals owning [or
considered as owning under Code Section 318, as modified by
Code Section 416(i)(1)(B)(iii)] the largest percentage
ownership interests in value in the Affiliates (as more fully
described in Treasury Regulation Section 1.416-1, T-19 and
T-20) and having a combined annual Compensation from all
Affiliates of more than the limitation in effect under Code
Section 415(c)(1)(A);
(C) a 5-percent owner [or constructive owner
within the meaning of Code Section 318, as modified by Code
Section 416(i)(1)(B)(iii)] of an Affiliate; or
(D) a 1-percent owner [or constructive owner
within the meaning of Code Section 318, as modified by Code
Section 416(i)(1)(B)(iii) and the Treasury regulations
thereunder] of an Affiliate having a combined annual
Compensation from all Affiliates of more than $150,000.
For purposes of subsection (B) hereof, if two individuals have the same
percentage ownership interest in an Affiliate, the individual having
greater combined annual Compensation from all Affiliates shall be
treated as having the larger interest. In determining percentage
ownership hereunder, employers that otherwise would be aggregated under
Code Sections 414(b), (c) and (m) shall be treated as separate
employers.
(3) NON-KEY EMPLOYEE. The term "Non-Key Employee"
shall mean any Employee who is not a Key Employee. For purposes hereof,
former Key Employees shall be treated as Non-Key Employees.
(4) PERMISSIVE AGGREGATION GROUP. The term
"Permissive Aggregation Group" shall mean a Required Aggregation Group
and any other qualified plan or plans maintained or contributed to by
an Affiliate which, when considered with the Required Aggregation
Group, would continue to satisfy the requirements of Code
Sections 401(a)(4) and 410.
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(5) REQUIRED AGGREGATION GROUP. The term "Required
Aggregation Group" shall mean a group of plans of the Affiliates
consisting of (i) each plan which, for such Plan Year or any of the 4
preceding Plan Years, qualifies under Code Section 401(a) and in which
a Key Employee is a participant, and (ii) each other plan which, during
this 5-year period, qualifies under Code Section 401(a) and which
enables any plan described in clause (i) hereof to satisfy the
requirements of Code Sections 401(a)(4) or 410.
(6) TOP-HEAVY GROUP. The term "Top-Heavy Group" shall
mean a Required or Permissive Aggregation Group with respect to which
the sum (determined as of a Determination Date) of (i) the present
value of the cumulative accrued benefits for Key Employees under all
Defined Benefit Plans included in such group, and (ii) the aggregate of
the accounts of Key Employees under all Defined Contribution Plans
included in such group, exceeds 60 percent of a similar sum determined
for all Employees.
(c) SPECIAL RULES. The following rules shall apply in
determining whether the Plan is a Top-Heavy Plan under subsection (a)(1) or
(a)(2) above:
(1) The value of any account balance under any
Defined Contribution Plan and the value of any accrued benefit under
any Defined Benefit Plan shall be determined as of the most recent
valuation date that falls within, or ends with, the 12-month period
ending on the Determination Date or, if plans are aggregated, the
Determination Dates that fall within the same calendar year;
(2) The value of the Accounts under the Plan or the
accounts under any other Defined Contribution Plan included in a
Required or Permissive Aggregation Group for any Determination Date,
other than the Determination Date for the first plan year, shall
include the amounts actually contributed and paid to the plan on or
before the Determination Date, and shall exclude any amounts to be
contributed with respect to such preceding plan year but not actually
paid to the plan on or before the Determination Date. The value of the
accounts under any Defined Contribution Plan for the Determination Date
of the first plan year shall include all amounts contributed to the
plan as of the Determination Date, regardless of whether such amounts
shall have been actually paid or merely accrued as of the Determination
Date;
(3) The value of any account balance under any
Defined Contribution Plan and the present value of any accrued benefit
under any Defined Benefit Plan as of any Determination Date shall be
increased by the aggregate distributions made under the plan during the
5-year period ending on the Determination Date;
(4) Accrued benefits and accounts of the following
individuals shall not be taken into account for a Plan Year: (A) any
Non-Key Employee who, in a prior Plan Year, was a Key Employee or (B)
any Employee who had not performed any services for a
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Participating Company at any time during the 5-year period ending on
the Determination Date for such Plan Year;
(5) The value of any account balance shall not
include deductible employee contributions, as described in Code
Section 72(o)(5)(A);
(6) The extent to which rollovers and plan to plan
transfers are taken into account in determining the value of any
account balance or accrued benefit shall be determined in accordance
with Code Section 416 and the regulations thereunder; and
(7) Effective for plan years beginning after December
31, 1986, each Non-Key Employee's accrued benefit under the Plan and
any Defined Benefit Plans shall be determined (A) under the method, if
any, that uniformly applies for accrual purposes under all Defined
Benefit Plans, or (B) if there is no such method, as if such benefit
accrued more rapidly than the slowest accrual rate permitted under the
fractional accrual rate set forth under Code Section 411(b)(1)(C).
14.3 TOP-HEAVY MINIMUM CONTRIBUTION.
(a) MULTIPLE DEFINED CONTRIBUTION PLANS. For any Plan Year in
which the Plan is a Top-Heavy Plan, the aggregate company Contributions (when
added to similar contributions made under other defined contribution plans)
allocated to the Account of any Active Participant who is a Non-Key Employee
shall not be less than the Defined Contribution Minimum. To the extent that the
company Contributions are less than the Defined Contribution Minimum, additional
company Contributions shall be provided under the Plan.
For purposes hereof, a Non-Key Employee shall not fail to
receive a minimum contribution hereunder for a Plan Year because (i) such
Non-Key Employee fails to complete 1,000 Hours of Service for such Plan Year or
(ii) such Non-Key Employee is excluded from participation (or receives no
allocation) merely because his Compensation is less than a stated amount or
because he failed to make a Deferral Election for such Plan Year.
(b) DEFINED CONTRIBUTION AND BENEFIT PLANS. In the event that
Non-Key Employees are covered under both the Plan and one or more Defined
Benefit Plans maintained by an Affiliate, the minimum contribution level set
forth in subsection (a) hereof shall be satisfied if each such Non- Key Employee
receives a benefit level under such Defined Contribution and Defined Benefit
Plans which is not less than the Defined Benefit Minimum offset by any benefits
provided under the Plan and any other Defined Contribution Plans maintained by
any Affiliate.
(c) DEFINED CONTRIBUTION MINIMUM. The term "Defined
Contribution Minimum" means, with respect to the Plan, a minimum level of
company Contributions allocated with respect to a Plan Year to the Account of
each Active Participant who is a Non-Key Employee, such level being the lesser
of:
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(1) 3 percent of such Active Participant's
Compensation for such Plan Year; or
(2) if no Defined Benefit Plan of an Affiliate uses
the Plan to satisfy the requirements of Code Sections 401(a)(4)
or 410, the highest percentage of Compensation at which company
Contributions are made, or are required to be made, under the Plan for
such Plan Year for any Key Employee.
For purposes of this subsection, (i) qualified nonelective contributions made by
the Company in order to satisfy the anti-discrimination tests of Code Section
401(k) or Section 401(m) (for example, Supplemental Contributions) may be
treated as company Contributions; (ii) Before-Tax and Matching Contributions
shall be taken into account as company Contributions for Key Employees; (iii)
Matching Contributions may be treated as company Contributions and may be taken
into account for satisfying the Minimum Contribution Requirement for Non-Key
Employees, but only if such Matching Contributions are not treated as Matching
Contributions for purposes of the ADP Tests or Code Section 401(m) and instead
satisfy the requirements of Code Section 401(a)(4) as company Contributions; and
(iv) Before-Tax Contributions shall not be taken into account for satisfying the
Minimum Contribution Requirement for Non-Key Employees.
(d) DEFINED BENEFIT MINIMUM. The term "Defined Benefit
Minimum" means, with respect to a Defined Benefit Plan, a minimum level of
accrued benefit derived from employer contributions with respect to a plan year
for each participant who is a Non-Key Employee; such level, when expressed as an
annual retirement benefit, being not less than the product of (1) and (2),
where:
(1) equals the Non-Key Employee's average
Compensation for the period of consecutive years (not exceeding 5) when
such Non-Key Employee had the highest aggregate Compensation from all
Affiliates; and
(2) equals the lesser of (A) 2 percent times such
Non-Key Employee's number of years of service or (B) 20 percent.
For purposes of determining the Defined Benefit Minimum, "years of service"
shall not include any year of service if the plan was not a Top-Heavy Plan for
the plan year ending during such year of service and shall not include any years
of service completed in a plan year beginning before January 1, 1984.
Compensation in years before January 1, 1984, and Compensation in years after
the close of the last plan year in which the plan is a Top-Heavy Plan shall be
disregarded. All accruals of employer-provided benefits, whether or not
attributable to years for which the Plan is top heavy, may be used in
determining whether the minimum contribution requirements set forth in this
Section are satisfied.
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14.4 TOP-HEAVY MINIMUM VESTING.
The vesting schedule set forth in Section 8.1 satisfies the
top-heavy minimum vesting requirements.
14.5 ADJUSTMENTS IN CODE Section 415 LIMITATIONS FOR TOP-HEAVY PLANS.
(a) SPECIAL ADJUSTMENT. In the event that, during a Plan Year
in which the Plan is a Top-Heavy Plan, an individual is a participant in both a
Defined Benefit Plan and a Defined Contribution Plan maintained by an Affiliate,
the computation of the Defined Benefit Plan Fraction and the Defined
Contribution Plan Fraction, as set forth in Sections 6.7(d)(3) and (5)
hereof, shall be modified by substituting "100 percent" for "125 percent" each
time it appears in said subsections; provided, in the event that the
requirements set forth in subsection (b) hereof are satisfied, the modifications
otherwise required by this subsection (a) shall not be required and shall be of
no effect.
(b) EXCEPTION. In the event that:
(1) the Plan would not be a Top-Heavy Plan if "90
percent" were substituted for "60 percent" each time it appears in
Section 14.2(a)(1) hereof and in the definition of Top-Heavy Group in
Section 14.2(b)(6);
(2) the Plan would continue to satisfy the
requirements of Section 14.3 hereof if "3 percent" were substituted for
"2 percent" each time it appears in Section 14.3(d), and if "20
percent", as used in Section 14.3(d), were increased by one percentage
point (but not by more than 10 percentage points) for each year for
which the plan was taken into account under this Section 14.5; and
(3) the Plan would continue to satisfy the
requirements of Section 14.3 hereof if "4 percent" were substituted for
"3 percent" each time it is used in Section 14.3(c);
then, the substitution of "100 percent" for "125 percent" as otherwise required
in subsection (a) hereof, shall not be required or effected.
14.6 CONSTRUCTION OF LIMITATIONS AND REQUIREMENTS.
The descriptions of the limitations and requirements set forth
in this Article are intended to serve as statements of the minimum legal
requirements necessary for the Plan to remain qualified under the applicable
terms of the Code. The Participating Companies do not desire or intend, and the
terms of this Article shall not be construed, to impose any more restrictions on
the operation of the Plan than required by law. Therefore, the terms of this
Article and any related terms
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<PAGE>
and definitions in the Plan shall be interpreted and operated in a manner which
imposes the least restrictions on the Plan. For example, if use of a more
liberal definition of "Compensation" is permissible at any time under the law,
then the more liberal provisions may be applied as if such provisions were
included in the Plan.
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<PAGE>
ARTICLE XV
MISCELLANEOUS
15.1 NONALIENATION OF BENEFITS AND SPENDTHRIFT CLAUSE.
(a) GENERAL NONALIENATION REQUIREMENTS. Except to the extent
permitted by law and as provided in subsections (b) and (c) hereof, none of the
Accounts, benefits, payments, proceeds or distributions under the Plan shall be
subject to the claim of any creditor of a Participant or Beneficiary or to any
legal process by any creditor of such Participant or of such Beneficiary; and
neither such Participant nor any such Beneficiary shall have any right to
alienate, commute, anticipate or assign any of the Accounts, benefits, payments,
proceeds or distributions under the Plan except to the extent expressly provided
herein.
(b) EXCEPTION FOR QUALIFIED DOMESTIC RELATIONS ORDERS.
(1) The nonalienation requirements of subsection (a)
hereof shall apply to the creation, assignment or recognition of a
right to any benefit, payable with respect to a Participant pursuant to
a domestic relations order, unless such order is (i) determined to be a
qualified domestic relations order, as defined in Code Section 414(p),
entered on or after January 1, 1985, or (ii) any domestic relations
order, as defined in Code Section 414(p), entered before January 1,
1985, pursuant to which a transferor plan was paying benefits on
January 1, 1985. The Administrative Committee shall establish
reasonable written procedures to determine the qualified status of a
domestic relations order. Further, 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
under the Plan.
(2) The Administrative Committee shall establish
reasonable procedures to administer distributions under qualified
domestic relations orders which are submitted to it. The Administrative
Committee, to the extent provided in a qualified domestic relations
order, shall direct the Trustee to pay, in a single-sum payment, the
full amount of the benefit payable to any alternate payee under a
qualified domestic relations order. Such cash-out payment shall be made
as soon as practicable after the end of the month within which the
Administrative Committee determines that a domestic relations order is
a qualified domestic relations order, or if later, when the terms of
the qualified domestic relations order permit such a distribution. (See
also Section 9.5.) If the terms of a qualified domestic relations order
do not permit an immediate cash-out payment, the benefits shall be paid
to the alternate payee in accordance with the terms of such order and
the applicable terms of the Plan.
(c) EXCEPTION FOR LOANS FROM THE PLAN. All loans made by the
Trustee to any Participant or Beneficiary shall be secured by a pledge of the
borrower's interest in the Plan.
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15.2 HEADINGS.
The headings and subheadings in the Plan have been inserted
for convenience of reference only and are to be ignored in any construction of
the provisions hereof.
15.3 CONSTRUCTION; CONTROLLING LAW.
In the construction of the Plan, the masculine shall include
the feminine and the feminine the masculine, and the singular shall include the
plural and the plural the singular, in all cases where such meanings would be
appropriate. Unless otherwise specified, any reference to a Section shall be
interpreted as a reference to a Section of the Plan. The Plan shall be construed
in accordance with the laws of the State of Georgia and applicable federal laws.
15.4 NO CONTRACT OF EMPLOYMENT.
Neither the establishment of the Plan, nor any modification
thereof, nor the creation of any fund, trust or account, nor the payment of any
benefits shall be construed as giving any Participant, Employee or any person
whomsoever the right to be retained in the service of any Affiliate, and all
Participants and other Employees shall remain subject to discharge to the same
extent as if the Plan had never been adopted.
15.5 LEGALLY INCOMPETENT.
The Administrative Committee may in its discretion direct that
payment be made, and the Trustee shall make payment on such direction, directly
to an incompetent or disabled person, whether incompetent or disabled because of
minority or mental or physical disability, or to the guardian of such person or
to the person having legal custody of such person, without further liability
with respect to or in the amount of such payment either on the part of any
Participating Company, the Administrative Committee or the Trustee.
15.6 HEIRS, ASSIGNS AND PERSONAL REPRESENTATIVES.
The Plan shall be binding upon the heirs, executors,
administrators, successors and assigns of the parties, including each
Participant and Beneficiary, present and future.
15.7 TITLE TO ASSETS, BENEFITS SUPPORTED ONLY BY TRUST FUND.
No Participant or Beneficiary shall have any right to, or
interest in, any assets of the Trust Fund upon termination of his employment or
otherwise, except as provided from time to time under the Plan, and then only to
the extent of the benefits payable under the Plan to such Participant out of the
assets of the Trust Fund. Any person having any claim under the Plan shall look
solely to the assets of the Trust Fund for satisfaction. The foregoing sentence
notwithstanding, each Participating Company shall indemnify and save any of its
officers, members of its board of directors or agents, and each of them,
harmless from any and all claims, loss, damages, expense and liability arising
from their responsibilities in connection with the Plan and from acts, omissions
and conduct
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in their official capacity, except to the extent that such effects and
consequences shall result from their own willful misconduct or gross negligence.
15.8 LEGAL ACTION.
In any action or proceeding involving the assets held with
respect to the Plan or Trust Fund or the administration thereof, the
Participating Companies, the Administrative Committee and the Trustee shall be
the only necessary parties and no Participants, Employees, or former Employees
of the Company, their Beneficiaries or any other person having or claiming to
have an interest in the Plan shall be entitled to any notice of process;
provided, that such notice as is required by the Internal Revenue Service and
the Department of Labor to be given in connection with Plan amendments,
termination, curtailment or other activity shall be given in the manner and form
and at the time so required. Any final judgment which is not appealed or
appealable that may be entered in any such action or proceeding shall be binding
and conclusive on the parties hereto, the Administrative Committee and all
persons having or claiming to have an interest in the Plan.
15.9 NO DISCRIMINATION.
The Controlling Company, through the Administrative Committee,
shall administer the Plan in a uniform and consistent manner with respect to all
Participants and Beneficiaries and shall not permit discrimination in favor of
officers, stockholders, supervisory or highly compensated Employees.
15.10 SEVERABILITY.
If any provisions of the Plan shall be held invalid or
unenforceable, such invalidity or unenforceability shall not affect any other
provisions hereof, and the Plan shall be construed and enforced as if such
provisions had not been included.
15.11 EXCLUSIVE BENEFIT; REFUND OF CONTRIBUTIONS.
No part of the Trust Fund shall be used for or diverted to
purposes other than the exclusive benefit of the Participants and Beneficiaries,
subject, however, to the payment of all costs of maintaining and administering
the Plan and Trust. Notwithstanding the foregoing, Contributions to the Trust by
a Participating Company may be refunded to the Participating Company under the
following circumstances and subject to the following limitations:
(a) PERMITTED REFUNDS. If and to the extent permitted by the
Code and other applicable laws and regulations thereunder, upon the
Participating Company's request, a Contribution which is (i) made by a mistake
in fact, or (ii) conditioned upon the deductibility of the Contribution under
Code Section 404, shall be returned to the Participating Company making the
Contribution within 1 year after the payment of the Contribution or the
disallowance of the deduction (to the extent disallowed), whichever is
applicable.
81
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(b) PAYMENT OF REFUND. If any refund is paid to a
Participating Company hereunder, such refund shall be made without interest or
other investment gains, shall be reduced by any investment losses attributable
to the refundable amount and shall be apportioned among the Accounts of the
Participants as an investment loss, except to the extent that the amount of the
refund can be attributed to one or more specific Participants (for example, as
in the case of certain mistakes of fact), in which case the amount of the refund
attributable to each such Participant's Account shall be debited directly
against such Account.
(c) LIMITATION ON REFUND. No refund shall be made to a
Participating Company if such refund would cause the balance in a Participant's
Account to be less than the balance would have been had the refunded
contribution not been made.
15.12 PLAN EXPENSES.
As permitted under the Code and ERISA, expenses incurred with
respect to administering the Plan and Trust shall be paid by the Trustee from
the Trust Fund to the extent such costs are not paid by the Participating
Companies or to the extent the Controlling Company requests that the Trustee
reimburse it or any other Participating Company for its payment of such
expenses. The Administrative Committee may provide for any expenses specifically
attributable to transactions involving an Account to be charged against such
Account; provided, such expenses may not reduce a Participant's Account to an
amount less than the Account balance as of the date the Administrative Committee
decides to charge such expenses against such Account.
15.13 SPECIAL EFFECTIVE DATES.
(a) INTENT OF PLAN. The Plan generally is effective as of the
Effective Date and is intended to be in compliance with all current laws and
regulations, including the following laws:
(1) Uniformed Services Employment and Reemployment
Rights Act of 1994;
(2) Small Business Job Protection Act of 1996;
(3) Taxpayer Relief Act of 1997; and
(4) Internal Revenue Service Restructuring and Reform
Act of 1998.
(b) COMPLIANCE. To the extent any of the changes and
provisions described above have requisite effective dates other than the
Effective Date, the Plan shall be deemed to be effective as of such requisite
effective dates solely for the purpose of satisfying the applicable legal and
regulatory requirements.
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15.14 CONTINGENCY FOR YEAR 2000 NONCOMPLIANCE.
In the event the computer hardware and software, either working
independently or as a system, used in the administration of the Plan by the
Controlling Company, any Participating Company, the Trustee, or any third party
service provider, its vendors and suppliers (including, but not limited to, the
Plan's record keeper and third party payroll processor) or any of their
designees are not "Year 2000 Compliant" as of January 1, 2000, the Valuation
Date for all purposes under the Plan shall be the last day of each calendar
month commencing with January 31, 2000. "Year 2000 Compliant" means that the
computer hardware and software, either working independently or as a system, are
able to accurately process date data as intended without interruption or delay
(including, but not limited to, calculating, comparing and sequencing) from,
into and between the calendar years 1999 and 2000, including leap year
calculations, in the normal course of business. Once the noncompliant hardware
and/or software becomes Year 2000 Compliant, the Valuation Date shall again mean
each Business Day, beginning with the Business Day designated by the
Administrative Committee or Senior Human Resources Officer of Home Depot as the
Plan's date of compliance.
IN WITNESS WHEREOF, the Controlling Company has caused the
Plan to be executed by its duly authorized officers, as of the date first above
written.
MAINTENANCE WAREHOUSE/AMERICA CORP.
By: /s/ Lawrence A. Smith
--------------------------------------
Title: Vice President - Legal & Secretary
----------------------------------
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<PAGE>
SCHEDULE A
THE MAINTENANCE WAREHOUSE FUTUREBUILDER
PARTICIPATING COMPANIES AND EFFECTIVE DATES
[see Plan Section 1.61 and Section 13.3]
As of the Effective Date, the following companies are Participating
Companies in the Plan. Any company which becomes a Participating Company after
the Effective Date shall be set forth below or in the records of the
Administrative Committee, including such company's effective date of
participation.
<TABLE>
<CAPTION>
Name Effective Date
---- --------------
<S> <C>
Maintenance Warehouse/America Corp. December 1, 1999
</TABLE>
A-1
<PAGE>
Exhibit 5
THE HOME DEPOT, INC.
2455 PACES FERRY ROAD
ATLANTA, GA 30339-4024
December 1, 1999
Board of Directors
The Home Depot, Inc.
2455 Paces Ferry Road
Atlanta, Georgia 30339
Re: The Home Depot, Inc., Registration Statement on Form S-8
for The Maintenance Warehouse FutureBuilder
(the "Registration Statement")
Ladies and Gentlemen:
In connection with the registration of 15,000 shares of the Common
Stock, par value $.05 per share (the "Securities"), of The Home Depot,
Inc. (the "Company"), issuable under The Maintenance Warehouse
FutureBuilder, I have examined the following:
1. A copy of the Registration Statement to be filed with the
Securities and Exchange Commission and the Exhibits to be filed
with and as a part of said Registration Statement; and
2. Copies of the minutes of meetings and/or consents of the Board of
Directors of the Company or committees thereof, deemed by me to be
relevant to this opinion.
Further, in connection with this matter, I have reviewed certain
of the Company's proceedings with respect to the authorization of the
issuance of such Securities and with respect to the filing of the
Registration Statement.
Based on the foregoing, it is my opinion that the Securities are
duly authorized and validly issued and, when issued, will be fully
paid, non-assessable and free of preemptive rights.
<PAGE>
Board of Directors
December 1, 1999
Page 2
I consent to the filing of this opinion as an Exhibit to the
Registration Statement on Form S-8. In giving this consent, I do not
hereby admit I come within the category of persons whose consent is
required under Section 7 of the Securities Act of 1933, or the rules and
regulations of the Securities and Exchange Commission thereunder.
Very truly yours,
/s/ Kelly R. Caffarelli, Esq.
- -----------------------------
Kelly R. Caffarelli, Esq.
Corporate Counsel
<PAGE>
Exhibit 23.1
ACCOUNTANT'S CONSENT
The Board of Directors of
The Home Depot, Inc.
We consent to the use of our report incorporated herein by
reference.
/s/ KPMG LLP
-----------------------------------
KPMG LLP
Atlanta, Georgia
November 30, 1999
<PAGE>
Exhibit 24
POWER OF ATTORNEY
The undersigned, a director of The Home Depot, Inc., a Delaware
corporation (the "Company"), hereby appoints Arthur M. Blank and Ronald M.
Brill, jointly and severally, the true and lawful attorneys of the undersigned,
each with full power of substitution and resolution, to execute in his or her
name, place and stead in any and all capacities, (i) a Registration Statement
under the Securities Act of 1933, on Form S-8 relating to shares of the
Company's Common Stock, $.05 par value, to be offered or sold pursuant to The
Maintenance Warehouse FutureBuilder, (ii) any amendments to such Registration
Statement (including post-effective amendments) and (iii) all instruments
necessary or incidental in connection herewith, and to file or cause to be filed
such Registration Statement, amendments, and other instruments with the
Securities and Exchange Commission. Said attorneys shall have full power and
authority to do and perform, in the name and on behalf of the undersigned, every
act whatsoever necessary or desirable to be done in the premises, as fully to
all intents and purposes as the undersigned could do in person. The undersigned
hereby ratifies and approves the actions of said attorneys.
IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney on
this 1st day of December, 1999.
/s/ Frank Borman
----------------------------------
Frank Borman
<PAGE>
POWER OF ATTORNEY
The undersigned, a director of The Home Depot, Inc., a Delaware
corporation (the "Company"), hereby appoints Arthur M. Blank and Ronald M.
Brill, jointly and severally, the true and lawful attorneys of the undersigned,
each with full power of substitution and resolution, to execute in his or her
name, place and stead in any and all capacities, (i) a Registration Statement
under the Securities Act of 1933, on Form S-8 relating to shares of the
Company's Common Stock, $.05 par value, to be offered or sold pursuant to The
Maintenance Warehouse FutureBuilder, (ii) any amendments to such Registration
Statement (including post-effective amendments) and (iii) all instruments
necessary or incidental in connection herewith, and to file or cause to be filed
such Registration Statement, amendments, and other instruments with the
Securities and Exchange Commission. Said attorneys shall have full power and
authority to do and perform, in the name and on behalf of the undersigned, every
act whatsoever necessary or desirable to be done in the premises, as fully to
all intents and purposes as the undersigned could do in person. The undersigned
hereby ratifies and approves the actions of said attorneys.
IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney on
this 1st day of December, 1999.
/s/ John L. Clendenin
----------------------------------
John L. Clendenin
<PAGE>
POWER OF ATTORNEY
The undersigned, a director of The Home Depot, Inc., a Delaware
corporation (the "Company"), hereby appoints Arthur M. Blank and Ronald M.
Brill, jointly and severally, the true and lawful attorneys of the undersigned,
each with full power of substitution and resolution, to execute in his or her
name, place and stead in any and all capacities, (i) a Registration Statement
under the Securities Act of 1933, on Form S-8 relating to shares of the
Company's Common Stock, $.05 par value, to be offered or sold pursuant to The
Maintenance Warehouse FutureBuilder, (ii) any amendments to such Registration
Statement (including post-effective amendments) and (iii) all instruments
necessary or incidental in connection herewith, and to file or cause to be filed
such Registration Statement, amendments, and other instruments with the
Securities and Exchange Commission. Said attorneys shall have full power and
authority to do and perform, in the name and on behalf of the undersigned, every
act whatsoever necessary or desirable to be done in the premises, as fully to
all intents and purposes as the undersigned could do in person. The undersigned
hereby ratifies and approves the actions of said attorneys.
IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney on
this 1st day of December, 1999.
/s/ Bonnie G. Hill
----------------------------------
Bonnie G. Hill
<PAGE>
POWER OF ATTORNEY
The undersigned, a director of The Home Depot, Inc., a Delaware
corporation (the "Company"), hereby appoints Arthur M. Blank and Ronald M.
Brill, jointly and severally, the true and lawful attorneys of the undersigned,
each with full power of substitution and resolution, to execute in his or her
name, place and stead in any and all capacities, (i) a Registration Statement
under the Securities Act of 1933, on Form S-8 relating to shares of the
Company's Common Stock, $.05 par value, to be offered or sold pursuant to The
Maintenance Warehouse FutureBuilder, (ii) any amendments to such Registration
Statement (including post-effective amendments) and (iii) all instruments
necessary or incidental in connection herewith, and to file or cause to be filed
such Registration Statement, amendments, and other instruments with the
Securities and Exchange Commission. Said attorneys shall have full power and
authority to do and perform, in the name and on behalf of the undersigned, every
act whatsoever necessary or desirable to be done in the premises, as fully to
all intents and purposes as the undersigned could do in person. The undersigned
hereby ratifies and approves the actions of said attorneys.
IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney on
this 1st day of December, 1999.
/s/ Berry R. Cox
----------------------------------
Berry R. Cox
<PAGE>
POWER OF ATTORNEY
The undersigned, a director of The Home Depot, Inc., a Delaware
corporation (the "Company"), hereby appoints Arthur M. Blank and Ronald M.
Brill, jointly and severally, the true and lawful attorneys of the undersigned,
each with full power of substitution and resolution, to execute in his or her
name, place and stead in any and all capacities, (i) a Registration Statement
under the Securities Act of 1933, on Form S-8 relating to shares of the
Company's Common Stock, $.05 par value, to be offered or sold pursuant to The
Maintenance Warehouse FutureBuilder, (ii) any amendments to such Registration
Statement (including post-effective amendments) and (iii) all instruments
necessary or incidental in connection herewith, and to file or cause to be filed
such Registration Statement, amendments, and other instruments with the
Securities and Exchange Commission. Said attorneys shall have full power and
authority to do and perform, in the name and on behalf of the undersigned, every
act whatsoever necessary or desirable to be done in the premises, as fully to
all intents and purposes as the undersigned could do in person. The undersigned
hereby ratifies and approves the actions of said attorneys.
IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney on
this 1st day of December, 1999.
/s/ Milledge A. Hart, III
----------------------------------
Milledge A. Hart, III
<PAGE>
POWER OF ATTORNEY
The undersigned, a director of The Home Depot, Inc., a Delaware
corporation (the "Company"), hereby appoints Arthur M. Blank and Ronald M.
Brill, jointly and severally, the true and lawful attorneys of the undersigned,
each with full power of substitution and resolution, to execute in his or her
name, place and stead in any and all capacities, (i) a Registration Statement
under the Securities Act of 1933, on Form S-8 relating to shares of the
Company's Common Stock, $.05 par value, to be offered or sold pursuant to The
Maintenance Warehouse FutureBuilder, (ii) any amendments to such Registration
Statement (including post-effective amendments) and (iii) all instruments
necessary or incidental in connection herewith, and to file or cause to be filed
such Registration Statement, amendments, and other instruments with the
Securities and Exchange Commission. Said attorneys shall have full power and
authority to do and perform, in the name and on behalf of the undersigned, every
act whatsoever necessary or desirable to be done in the premises, as fully to
all intents and purposes as the undersigned could do in person. The undersigned
hereby ratifies and approves the actions of said attorneys.
IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney on
this 1st day of December, 1999.
/s/ William S. Davila
----------------------------------
William S. Davila
<PAGE>
POWER OF ATTORNEY
The undersigned, a director of The Home Depot, Inc., a Delaware
corporation (the "Company"), hereby appoints Arthur M. Blank and Ronald M.
Brill, jointly and severally, the true and lawful attorneys of the undersigned,
each with full power of substitution and resolution, to execute in his or her
name, place and stead in any and all capacities, (i) a Registration Statement
under the Securities Act of 1933, on Form S-8 relating to shares of the
Company's Common Stock, $.05 par value, to be offered or sold pursuant to The
Maintenance Warehouse FutureBuilder, (ii) any amendments to such Registration
Statement (including post-effective amendments) and (iii) all instruments
necessary or incidental in connection herewith, and to file or cause to be filed
such Registration Statement, amendments, and other instruments with the
Securities and Exchange Commission. Said attorneys shall have full power and
authority to do and perform, in the name and on behalf of the undersigned, every
act whatsoever necessary or desirable to be done in the premises, as fully to
all intents and purposes as the undersigned could do in person. The undersigned
hereby ratifies and approves the actions of said attorneys.
IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney on
this 1st day of December, 1999.
/s/ Kenneth G. Langone
----------------------------------
Kenneth G. Langone
<PAGE>
POWER OF ATTORNEY
The undersigned, a director of The Home Depot, Inc., a Delaware
corporation (the "Company"), hereby appoints Arthur M. Blank and Ronald M.
Brill, jointly and severally, the true and lawful attorneys of the undersigned,
each with full power of substitution and resolution, to execute in his or her
name, place and stead in any and all capacities, (i) a Registration Statement
under the Securities Act of 1933, on Form S-8 relating to shares of the
Company's Common Stock, $.05 par value, to be offered or sold pursuant to The
Maintenance Warehouse FutureBuilder, (ii) any amendments to such Registration
Statement (including post-effective amendments) and (iii) all instruments
necessary or incidental in connection herewith, and to file or cause to be filed
such Registration Statement, amendments, and other instruments with the
Securities and Exchange Commission. Said attorneys shall have full power and
authority to do and perform, in the name and on behalf of the undersigned, every
act whatsoever necessary or desirable to be done in the premises, as fully to
all intents and purposes as the undersigned could do in person. The undersigned
hereby ratifies and approves the actions of said attorneys.
IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney on
this 1st day of December, 1999.
/s/ M. Fay Wilson
----------------------------------
M. Faye Wilson
