As filed with the Securities and Exchange Commission on January 4, 2000
Registration No. ___
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
--------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
MICRON ELECTRONICS, INC.
(Exact name of issuer as specified in its charter)
Minnesota 41-1404301
(State or other Jurisdiction (I.R.S. Employer
of incorporation or Identification No.)
organization)
900 East Karcher Rd., Nampa, Idaho 83687
(Address of Principal Executive Offices and Zip Code)
AMENDED AND RESTATED MICRON ELECTRONICS, INC.
RETIREMENT AT MICRON (RAM) PLAN
(Full title of plan)
Joel J. Kocher
Chairman of the Board, President and Chief Executive Officer
Micron Electronics, Inc.
900 East Karcher Rd.
Nampa, Idaho 83687
(Name and address of agent for service)
(208) 898-3434
(Telephone number, including area code, of agent for service)
Copy to: Holland & Hart LLP
Attn: Dennis M. Jackson, Esq.
555 Seventeenth Street, Suite 3200
Denver, Colorado 80202
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Proposed Proposed
Title of Amount to Maximum maximum Amount
Securities be offering aggregate of
to be registered price per offering registration
registered (1) share price fee
- ---------------------------------------------------------------
<S> <C> <C> <C> <C>
Common 1,000,000 $11.375(2) $11,375,000 $3,003
Stock
(no par
value)
- ---------------------------------------------------------------
Interests Indeterminate N/A (2) N/A N/A
in the (3)
Retirement
at Micron
(RAM) Plan
- ---------------------------------------------------------------
</TABLE>
(1) This Registration Statement includes shares of the Registrant to be
contributed to the employee benefit plan described herein by the
Registrant or acquired by such plan pursuant to one of its investment
options. The shares registered pursuant to this Registration Statement
will be purchased in the open market. Accordingly, the number of shares
that is being registered is an estimate. This Registration Statement also
includes such indeterminate number of shares as may be issued to prevent
dilution resulting from stock splits, stock dividends or similar
transactions in accordance with Rule 416 under the Securities Act of 1933.
(2) Estimated pursuant to Rule 457(h) under the Securities Act of 1933 solely
for the purpose of calculating the registration fee and based on the
average of the high and low sales prices for the Registrant's common stock
as reported on the Nasdaq Stock Market on December 29, 1999. No fee is
paid for the interests in the employee benefit plan described herein
pursuant to Rule 457(h).
(3) Pursuant to Rule 416(c) under the Securities Act of 1933, this
Registration Statement covers an indeterminate amount of interests to be
offered or sold pursuant to the employee benefit plan described herein.
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
The documents containing the information required by Part I of Form S-8
will be sent or given to participants in the Amended and Restated Micron
Electronics, Inc. Retirement at Micron (RAM) Plan (the "Plan") as specified by
Rule 428(b)(1) under the Securities Act of 1933, as amended (the "Securities
Act"). In reliance on Rule 428, such documents (i) are not being filed with the
Securities and Exchange Commission (the "Commission") either as part of this
registration statement or as prospectuses or prospectus supplements pursuant to
Rule 424, and (ii) along with the documents incorporated by reference into this
registration statement pursuant to Item 3 of Part II hereof, constitute a
prospectus (the "Prospectus") that meets the requirements of Section 10(a) of
the Securities Act.
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents are hereby incorporated by reference in this
registration statement:
(1) The Registrant's Annual Report on Form 10-K, filed pursuant to Section
13 or 15(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), for the fiscal year ended September 2, 1999.
(2) All other reports filed by the Registrant pursuant to Section 13 or
15(d) of the Exchange Act since September 2, 1999.
(3) The description of the Registrant's Common Stock contained in the
Registrant's Registration Statement on Form 8-A (SEC File No. 0-17932)
filed with the Commission on August 16, 1989 pursuant to Section 12(g) of
the 1934 Act, as amended.
All documents filed by the Registrant pursuant to Sections 13, 14 or 15(d)
of the Exchange Act subsequent to the date of this registration statement, and
prior to the filing of a post-effective amendment which indicates that all
shares offered hereby have been sold or which deregisters all shares then
remaining unsold, shall be deemed to be incorporated by reference in this
registration statement and to be a part hereof from the date of filing such
documents. Any statement contained in the Prospectus, this registration
statement or in a document incorporated or deemed to be incorporated by
reference herein shall be deemed to be modified or superseded for purposes of
the Prospectus and this registration statement to the extent that a statement
contained in any subsequently filed document that also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of the Prospectus or this registration
statement.
Item 4. Description of Securities.
Not applicable.
Item 5. Interests of Named Experts and Counsel.
Not applicable.
Item 6. Indemnification of Directors and Officers.
Section 302A.521 of the Minnesota Business Corporation Act authorizes a
corporation's Board of Directors to grant indemnity to directors and officers in
terms sufficiently broad to permit such indemnification under certain
circumstances for liabilities (including reimbursement for expenses incurred)
arising under the Securities Act of 1933, as amended. Article IX of the
Company's Bylaws provides for indemnification of its directors, officers,
employees and other agents to the extent permitted by the Minnesota Business
Corporation Act. The Company also has entered into written indemnification
agreements with certain of its officers and directors which provide the
Company's officers and directors with indemnification to the extent permitted by
the Minnesota Business Corporation Act.
Item 7. Exemption from Registration Claimed.
Not applicable.
<PAGE>
<TABLE>
<CAPTION>
Item 8. Exhibits.
Exhibit Description.
No.
- -----------------------
<S> <C>
4.1 Articles of Incorporation, as amended (incorporated by reference to
Exhibit 3.1 to Registrant's Quarterly Report on Form 10-Q for the
quarterly period ended April 1, 1995).
4.2 Bylaws, as amended (incorporated by reference to Exhibit 3.2 to
Annual Report on Form 10-K for the fiscal year ended August 28,
1997).
4.3 Amended and Restated Micron Electronics, Inc.
Retirement at Micron (RAM) Plan.
5.1 Omitted as inapplicable pursuant to Item 8 of Form S-8 which provides
that a legal opinion as to the legality of the securities being
registered is required only with respect to original issuance
securities.
23.1 Consent of PricewaterhouseCoopers LLP.
24.1 Power of Attorney (included on signature page).
</TABLE>
In lieu of an opinion of counsel concerning compliance with the
requirements of ERISA, or an Internal Revenue Service ("IRS") determination
letter that the Plan is qualified under Section 401 of the Code, the registrant
hereby undertakes to cause the Plan to be submitted and any amendments thereto
to the IRS in order to qualify the Plan and the registrant undertakes to cause
all changes to be made which are required by the IRS in order to qualify the
Plan.
Item 9. Undertakings.
(a) 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:
(i) To include any prospectus required by section 10(a)(3) of
the Securities Act;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set
forth in the registration statement;
(iii) 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;
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
registration statement is on Form S-3 or Form S-8, and the information required
to be included in a post-effective amendment by those paragraphs is contained in
periodic reports filed with or furnished to the Commission by the registrant
pursuant to section 13 or section 15(d) of the Exchange Act that are
incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act 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.
<PAGE>
(3) To remove from the registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act 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.
Insofar as indemnification for liabilities arising under the Securities
Act 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 Commission such indemnification is
against public policy as expressed in the Securities 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 Securities Act and will be governed by the final
adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act, 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 Nampa, State of Idaho, on December 30, 1999.
MICRON ELECTRONICS, INC.
By: /s/ James R. Stewart
----------------------------------------
James R. Stewart, Senior Vice President,
Finance, and Chief Financial Officer
<PAGE>
Pursuant to the requirements of the Securities Act, this registration
statement has been signed by the following persons in the capacities and on the
dates indicated.
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Joel J. Kocher, jointly and severally,
his attorneys-in-fact, each with the power of substitution, for him in any and
all capacities, to sign any amendments to this Registration Statement on Form
S-8, and to file the same, with exhibits thereto and other documents in
connection therewith, with the Securities and Exchange Commission, hereby
ratifying and confirming all that each of said attorneys-in-fact, or his
substitute or substitutes, may do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
<S> <C> <C>
/s/ Joel J. Kocher Chairman of the December 30, 1999
- ----------------------- Board,
Joel J. Kocher President and
Chief Executive
Officer
/s/ Steven R. Appleton Director December 30, 1999
- -----------------------
Steven R. Appleton
/s/ Robert Lee Director December 30, 1999
- -----------------------
Robert Lee
/s/ Robert A. Lothrop Director December 30, 1999
- -----------------------
Robert A. Lothrop
/s/ John B. Balousek Director December 30, 1999
- -----------------------
John B. Balousek
</TABLE>
<PAGE>
Pursuant to the requirements of the Securities Act, the trustees (or other
persons who administer the Plan) have duly caused this registration statement to
be signed on its behalf by the undersigned, thereto duly authorized, in the City
of Nampa, State of Idaho, on December 30, 1999.
Amended and Restated Micron Electronics, Inc. Retirement at Micron (RAM) Plan
By: /s/ JoAnne S. Pfeifer
---------------------------------------
JoAnne S. Pfeifer, Vice President,
Administration, and Corporate Secretary
<PAGE>
<TABLE>
<CAPTION>
EXHIBITS INDEX
Exhibit Description.
No.
- -----------------------
<S> <C>
4.1 Articles of Incorporation, as amended (incorporated by reference to
Exhibit 3.1 to Quarterly Report on Form 10-Q for the quarterly period
ended April 1, 1995).
4.2 Bylaws, as amended (incorporated by reference to Exhibit 3.2 to
Annual Report on Form 10-K, for the fiscal year ended August 28,
1997).
4.3 Amended and Restated Micron Electronics, Inc.
Retirement at Micron (RAM) Plan.
5.1 Omitted as inapplicable pursuant to Item 8 of Form S-8 which provides
that a legal opinion as to the legality of the securities being
registered is required only with respect to original issuance
securities.
23.1 Consent of PricewaterhouseCoopers, LLP.
24.1 Power of Attorney (included on signature page).
</TABLE>
<PAGE>
MICRON ELECTRONICS, INC.
RETIREMENT AT MICRON ("RAM") PLAN
Amended and Restated
Effective January 1, 2000
TABLE OF CONTENTS
ARTICLE 1 INTRODUCTION.......................................1
1.1 Establishment of Plan; Background .....................1
1.2 Purpose ...............................................2
1.3 Plan Governs Distribution of Benefits .................2
ARTICLE 2 DEFINITIONS........................................2
ARTICLE 3 PARTICIPATION.....................................14
3.1 Participation ........................................14
3.2 Authorized Leave of Absence...........................14
3.3 Participation and Rehire .............................15
3.4 Acquisitions .........................................15
3.5 Not Contract for Employment ..........................15
3.6 Transfer of Employment from MTI ......................15
ARTICLE 4 PRE-TAX CONTRIBUTIONS; ROLLOVERS..................15
4.1 Pre-Tax Contributions ................................15
4.2 Elections Regarding Pre-Tax Contributions ............16
4.3 Change in Pre-Tax Contribution Percentage or
Suspension of Contributions ..........................16
4.4 Deadline for Contributions and Allocation of Pre-Tax
Contributions ........................................17
4.5 Rollover Contribution ................................17
ARTICLE 5 EMPLOYER CONTRIBUTIONS............................18
5.1 Employer Matching Contribution .......................18
5.2 Profit Sharing Contribution ..........................19
5.3 Qualified Nonelective Contributions ..................19
5.4 Form and Timing of Contributions .....................19
5.5 Forfeitures ..........................................20
<PAGE>
ARTICLE 6 ACCOUNTS AND ALLOCATIONS..........................21
6.1 Participant Accounts .................................21
6.2 Allocation of Adjustments ............................22
6.3 Plan Expenses ........................................22
6.4 Investment Funds and Elections .......................23
6.5 Errors ...............................................23
6.6 Valuation For Purposes of Distributions ..............24
ARTICLE 7 VESTING...........................................25
7.1 Retirement ...........................................25
7.2 Permanent Disability .................................25
7.3 Death ................................................25
7.4 Other Termination Date ...............................25
7.5 Forfeitures ..........................................26
7.6 Transfer of Employment from an Affiliate .............27
7.7 Vesting Credit for Acquisitions ......................27
ARTICLE 8 DISTRIBUTIONS.....................................28
8.1 Commencement of Distribution .........................28
8.2 Method of Distribution ...............................29
8.3 Payment to Minors and Incapacitated Persons ..........30
8.4 Application for Benefits .............................30
8.5 Special Distribution Rules ...........................30
8.6 Distributions Pursuant to Qualified Domestic
Relations Orders ..............;......................31
8.7 Direct Rollovers .....................................31
ARTICLE 9 IN-SERVICE WITHDRAWALS............................33
9.1 Hardship Withdrawal of Account .......................33
9.2 Definition of Hardship ...............................33
9.3 Maximum and Minimum Hardship Distribution ............33
9.4 Procedure to Request Hardship ........................34
9.5 Participant Withdrawals After Age 59 1/2 .............35
9.6 Valuation for Purposes of In-Service Withdrawals .....35
9.7 Other Rules for In-Service Distributions .............35
9.8 Prior Employer Account ...............................35
ARTICLE 10 ADMINISTRATION OF THE PLAN.......................36
10.1 Named Fiduciaries ...................................36
10.2 Board of Directors ..................................36
10.3 Trustee .............................................36
10.4 Committee ...........................................37
<PAGE>
10.5 Authorized Officer ..................................38
10.6 Standard of Fiduciary Duty ..........................39
10.7 Claims Procedure ....................................39
10.8 Indemnification of Committee ........................40
ARTICLE 11 AMENDMENT AND TERMINATION........................41
11.1 Right to Amend ......................................41
11.2 Termination and Discontinuance of Contributions .....41
11.3 IRS Approval of Termination .........................41
ARTICLE 12 SPECIAL DISCRIMINATION RULES.....................42
12.1 Definitions ........................................42
12.2 Limit on Pre-Tax Contributions .....................45
12.3 Average Actual Deferral Percentage .................47
12.4 Special Rules For Determining Average Actual Deferral
Percentage .........................................48
12.5 Distribution of Excess ADP Deferrals ...............48
12.6 Average Actual Contribution Percentage .............50
12.7 Special Rules For Determining Average Actual
Contribution Percentages ...........................51
12.8 Distribution of Excess ACP Contributions ...........51
12.9 Combined ACP and ADP Test ..........................53
12.10 Order of Applying Certain Sections of Article 12 ...54
ARTICLE 13 HIGHLY COMPENSATED EMPLOYEES.....................55
13.1 In General ..........................................55
13.2 Highly Compensated Employees ........................55
13.3 Former Highly Compensated Employee ..................55
13.4 Definitions .........................................55
13.5 Other Methods Permissible ...........................56
ARTICLE 14 MAXIMUM BENEFITS.................................58
14.1 General Rule ........................................58
14.2 Definitions .........................................60
ARTICLE 15 TOP HEAVY RULES..................................61
15.1 General .............................................61
15.2 Definitions .........................................61
15.3 Minimum Benefit .....................................62
<PAGE>
ARTICLE 16 MISCELLANEOUS....................................64
16.1 Headings ...........................................64
16.2 Action by Employer .................................64
16.3 Spendthrift Clause .................................64
16.4 Distributions Upon Special Occurrences .............64
16.5 Discrimination .....................................64
16.6 Release ............................................64
16.7 Compliance with Applicable Laws ....................65
16.8 Agent for Service of Process .......................65
16.9 Merger .............................................65
16.10 Governing Law ......................................65
16.11 Adoption of the Plan by an Affiliated Sponsor ......65
16.12 Protected Benefits .................................67
16.13 Location of Participant or Beneficiary Unknown .....67
16.14 Qualified Military Service .........................67
16.15 Not Contract for Employment ........................67
16.16 Special Rules for Permanent and Total Disability ...67
16.17 Protection of Optional Forms of Benefit for Money
Purchase Plan Assets ...............................67
<PAGE>
MICRON ELECTRONICS, INC.
RETIREMENT AT MICRON ("RAM") PLAN
Amended and Restated
Effective January 1, 2000
<PAGE>
MICRON ELECTRONICS, INC.
RETIREMENT AT MICRON ("RAM") PLAN
Amended and Restated Effective January 1, 2000
ARTICLE 1
INTRODUCTION
1.1 Establishment of Plan; Background.
(a) Effective September 1, 1995, Micron Electronics, Inc. adopted the
Micron Electronics, Inc. Retirement at Micron Plan (the "Prior Plan"). The Prior
Plan was an amendment and restatement of the ZEOS International Retirement
Savings Plan and Trust which was first established May 1, 1991 and was renamed
the Micron Electronics, Inc. Retirement at Micron Plan effective September 1,
1995. The Prior Plan was amended from time to time and at all times was
maintained as a plan intended to meet the requirements of Sections 401(a) and
401(k) of the Internal Revenue Code of 1986, as amended, and of the Employee
Retirement Income Security Act of 1974.
(b) Effective January 1, 2000 (the "Effective Date"), the Prior Plan is
continued in an amended and restated form as set forth in its entirety in this
document, which shall be called the Micron Electronics, Inc. Retirement at
Micron ("RAM") Plan (the "Plan"). Notwithstanding this general effective date,
certain provisions of this Plan (as set forth in this document) shall be
effective earlier than the Effective Date.
1.2 Purpose. Micron Electronics, Inc. intends to operate the Plan for the
purpose of enabling Eligible Employees and their Beneficiaries to accumulate
funds to provide for their retirement income requirements. The Plan is intended
to qualify, and the Plan assets held in a Trust Fund are intended to be exempt
from federal income tax, under the pertinent provisions of the Internal Revenue
Code of 1986, as amended, and any successor Federal income tax statute of the
same or similar effect.
1.3 Plan Governs Distribution of Benefits. The distribution of benefits for all
Participants (whether employed by the Employer before or after the Effective
Date) shall be governed by the provisions of this Plan. Nevertheless, early
retirement benefits, retirement-type subsidies, or optional forms of benefit
protected under Code Section 411(d)(6) shall not be reduced or eliminated unless
such reduction or elimination is permitted under the Code, Treasury Regulations,
authority issued by the Internal Revenue Service, or judicial authority.
ARTICLE 2
DEFINITIONS
Certain terms of this Plan have defined meanings which are set forth in
this Article and which shall govern unless the context in which they are used
clearly indicates that some other meaning is intended.
Account shall mean the Account established and maintained by the Committee
or Trustee for each Participant or their Beneficiaries to which shall be
allocated each Participant's interest in the Fund. Each Account shall be
comprised of the sub-accounts described in Section 6.1.
Act or ERISA shall mean Public Law No. 93-406, the Employee Retirement
Income Security Act of 1974, as amended from time to time. A reference to a
specific provision of ERISA shall include such provision and any applicable
Department of Labor Regulations pertaining thereto.
Adjustment shall mean, for any Valuation Date, the aggregate earnings,
realized or unrealized appreciation, losses, expenses, and realized or
unrealized depreciation of the Fund since the immediately preceding Valuation
Date. The determination of the Adjustment shall be made by the Trustee and shall
be final and binding.
<PAGE>
Affiliate shall mean the Company and any corporation which is a member of
a controlled group of corporations (as defined in Code Section 414(b)) which
includes the Company; any trade or business which is under common control (as
defined in Code Section 414(c)) with the Company; any organization which is a
member of an affiliated service group (as defined in Code Section 414(m)) which
includes the Company; and any other entity required to be aggregated with the
Company pursuant to regulations under Code Section 414(o).
Affiliated Sponsor shall mean any corporation and any other entity that
wishes to adopt this Plan; provided, however, that any such entity described in
this paragraph must be designated by the Committee as an Affiliated Sponsor
under the Plan. See Section 16.11 for provisions relating to an Affiliated
Sponsor's adoption of the Plan. All Affiliated Sponsors, groups of employees
designated as participating in the Plan by such Affiliated Sponsors (if not all
employees), and the effective date of a company's designation as an Affiliated
Sponsor shall be specified in Schedule A.
Authorized Leave of Absence shall mean any absence authorized by the
Employer under the Employer's standard personnel practices provided that all
persons under similar circumstances must be treated alike in the granting of
such Authorized Leaves of Absence and provided further that the Participant
returns within the period of authorized absence. An absence due to service in
the Armed Forces of the United States shall be considered an Authorized Leave of
Absence to the extent required by federal law.
Authorized Officer shall mean the Company's Vice President of
Administration or, in the absence of such an office or title, such other officer
that has primary responsibility for overseeing the administration of the
Company's employee benefit programs.
Beneficiary.
(a) Unmarried Participants. For unmarried Participants, any individual(s),
trust(s), estate(s), partnership(s), corporation(s) or other entity or entities
designated by the Participant in accordance with procedures established by the
Committee to receive any distribution to which the Participant is entitled under
the Plan in the event of the Participant's death. The Committee may require
certification by a Participant in any form it deems appropriate of the
Participant's marital status prior to accepting or honoring any Beneficiary
designation. Any Beneficiary designation shall be void if the Participant
revokes the designation or marries. Any Beneficiary designation shall be void to
the extent it conflicts with the terms of a qualified domestic relations order.
If an unmarried Participant fails to designate a Beneficiary or if the
designated Beneficiary fails to survive (or is deemed to have failed to survive)
the Participant and the Participant has not designated a contingent Beneficiary,
<PAGE>
the Beneficiary shall be the Participant's estate. For the purposes of the
foregoing sentence, the term "descendants" shall include any persons adopted by
a Participant or by any of his descendants.
(b) Married Participants. A married Participant's Beneficiary shall be his
Spouse at the time of his death unless the Participant has designated a
non-spouse Beneficiary (or Beneficiaries) with the written consent of his Spouse
given in the presence of a notary public on a form provided by the Committee, or
unless the terms of a qualified domestic relations order require payment to a
non-spouse Beneficiary. A married Participant's designation of a non-spouse
Beneficiary in accordance with the preceding sentence shall remain valid until
revoked by the Participant or until the Participant marries a Spouse who has not
consented to a designation in accordance with the preceding sentence.
For the purposes of this Section, revocation of a prior Beneficiary
designation will occur when a Participant files a valid subsequent designation
with the Committee.
Board shall mean the Board of Directors of the Company.
Break in Service shall occur when a Participant has a Termination Date and
does not return to Employment for five or more consecutive years following such
Termination Date.
Code shall mean the Internal Revenue Code of l986, as amended. A reference
to a specific provision of the Code shall include such provision and any
applicable Treasury Regulation pertaining thereto.
Committee shall mean the Committee appointed by the Authorized Officer
under Article 10 to administer the Plan. This term is interchangeable with "Plan
Administrator."
Company shall mean Micron Electronics, Inc. and its successors and
assigns which adopt this Plan.
Compensation.
(a) Compensation shall mean the "safe harbor" definition of compensation
as defined in Code section 415(c)(3) and modified by Treasury Regulation Section
1.414(s)-1(c)(3). Compensation therefore means an Eligible Employee's wages,
salaries, fees for professional services, and other amounts received (without
regard to whether an amount is paid in cash) for personal services actually
rendered in the course of employment with the Company. Compensation includes (1)
the value of a non-qualified stock option granted to an employee by the Company,
but only to the extent that the value of the option is includible in gross
income for the taxable year in which granted; and (2) the amount includible in
<PAGE>
gross income upon making a Code section 83(b) election. Compensation does not
include the following items, even if includible in gross income: (1)
reimbursements or other expense allowances; (2) fringe benefits (cash and
non-cash), (3) moving expenses, (4) deferred compensation; (5) welfare benefits;
(6) amounts realized from the exercise of a nonqualified stock option or when
restricted stock or property held by an employee is not longer subject to a
substantial risk of forfeiture; (7) amounts realized from the sale, exchange or
other disposition of stock acquired under an incentive stock option or qualified
stock purchase plan; and (8) other amounts which receive special tax benefits,
such as premiums for group term life insurance (only to the extent that the
premiums are not includible in the gross income of the employee) or
contributions made by an employer toward the purchase of an annuity contract
described in Code section 403(b).
(b) The annual Compensation of each employee taken into account under the
Plan shall not exceed the limitations of Code Section 401(a)(17) in effect as of
the beginning of the Plan Year (e.g., $170,000 in 2000).
Credited Service shall mean the number of years of service as an Employee
of the Employer (with proportionate allowance for fractional years) measured in
accordance with the following rules:
(a) In General. An Employee shall receive Credited Service for the elapsed
time of his Employment beginning on the Employee's Date of Hire and ending on
his Termination Date. If an Employee has a Termination Date and is subsequently
rehired, such Employee shall again receive Credited Service (subject to the
Break in Service rules set forth below) beginning on the date of the Employee's
first Hour of Service on or after his re-employment and ending on his subsequent
Termination Date. See subsection (f) for a special transition rule involving
service crediting.
(b) Break in Service. Credited Service shall not include any period of
Employment which precedes a Break in Service if as of the first day of the Break
in Service, the Employee is not vested in any portion of his Employer Accounts.
(c) Employment with Affiliated Sponsors; Predecessor Businesses. Subject
to subsection (e) below, Credited Service shall not include any period of
employment with any Affiliated Sponsor prior to its designation as an Affiliated
Sponsor except to the extent provided in Schedule A.
(d) Military Service. Credited Service shall not include any period of
service in the military, except to the extent such service is required to be
credited under applicable federal law.
<PAGE>
(e) Employment with Affiliates. An Employee's service with an Affiliate
while an Affiliated Sponsor shall be considered Employment with the Employer.
(f) Special Transition Rule.
(1) Background. Prior to January 1, 1999, an Employee's service
credit was computed using the "hours of service" method
described in Code Section 410 and ERISA Sections 201 and
202. Beginning on January 1, 1999, an Employee's Credited
Service is determined using the "elapsed time" method
described herein. The purpose of this subsection (f) is to
provide a transitional rule arising from the Plan having
changed its service crediting method. This rule affects
Employees whose Date of Hire precedes January 1, 1999.
(2) Transitional Rule. For an Employee whose Date of Hire precedes
January 1, 1999, such Employee's Credited Service
shall equal the sum of:
(A) the Employee's years of service computed under the hours of
service method as of the day preceding the Employee's 1998
anniversary date;
(B) the greater of (1) the period of service computed under the
elapsed time method for the twelve-month period beginning
on the Employee's 1998 anniversary date or (2) the service
taken into account under the hours of service method for
the period beginning on the Employee's 1998 anniversary
date and ending on January 1, 1999; and
(C) beginning with the Employee's 1999 anniversary date, the
period of service computed under the elapsed time method
commencing from such anniversary date and ending on the
Employee's Termination Date.
(3) No Double Counting. The provisions of this subsection (f) are
not intended to grant an Employee service credit twice under
this Plan for the same period of service (whether worked for MTI
or the Employer, or their respective Affiliated Employers).
(g) Service Crediting Rules for Former Employees of MTI.
<PAGE>
(1) Background. Until April 7, 1995, the Company was a wholly
owned subsidiary of MTI. From time to time, employees who
worked for MTI or entities that are aggregated with MTI
under Code Section 414 ("MTI Affiliate") will commence
employment with the Company or an Affiliate thereof. The
purpose of this subsection (g) is to grant service credit
under this Plan for these Former MTI Employees and their
employment with MTI or an MTI Affiliate.
(2) Vesting. A Former MTI Employee's Credited Service under the MTI
Plan shall count as Credited Service under this Plan.
Furthermore, for purposes of determining whether a Former MTI
Employee earned a year of Credited Service during the Plan Year
in which the Former MTI Employee became an Employee under this
Plan, the Former MTI Employee's most recent "Date of Hire" (as
defined in the MTI Plan) shall be deemed to be the Employee's
anniversary date under this Plan in order to compute such
Credited Service. For example, if the Former MTI Employee
commenced work for MTI on 4/1/96 and transferred employment to
the Company on 9/15/99, the Former MTI Employee's anniversary
year for determining Credited Service shall be 4/1 to 3/31.
(3) No Double Counting. The provisions of this subsection (g) are
not intended to grant an Employee service credit twice under
this Plan for the same period of service (whether worked for MTI
or the Employer, or their respective Affiliates).
(4) Definition of Former MTI Employee. Any Employee who previously
worked for MTI or an MTI Affiliate and participated in the MTI
Plan. The Committee in its sole discretion shall determine in a
uniform and nondiscriminatory manner if an individual is a
Former MTI Employee and eligible to receive Credited Service
under this subsection (g). Any such determination shall be
conclusive and binding.
(5) Compliance with Code. No service credit shall be granted under
this subsection (g) to the extent such service credit would
violate a requirement of Code Section 401(a) or otherwise
jeopardize the qualified status of the Plan.
(h) Service Crediting Rules for Employees Who Transfer Employment from an
Employer to MTI.
<PAGE>
(1) Background. From time to time, Eligible Employees terminate
-----------
employment with an Employer and immediately commence
employment with MTI or an MTI Affiliate (such employee known
as a "Transferred MTI Employee"). It is the purpose of this
subsection (h) to give Credited Service for vesting purposes
under this Plan to a Transferred MTI Employee who continues
to work for MTI or an MTI Affiliate immediately following
his or her Termination Date with an Employer.
(2) Vesting. A Transferred MTI Employee shall continue to receive
Credited Service for vesting purposes only under this Plan for
his or her employment with MTI or an MTI Affiliate. Such
Credited Service shall be granted following the rules and
procedures of this Plan but by counting the Transferred MTI
Employee's employment at MTI or at an MTI Affiliate as service
for an Employer. Such Credited Service shall not apply for any
other purpose (e.g., for purposes of any contribution under this
Plan). However, if the Transferred MTI Employee requests and
receives a complete Distribution of his or her vested Account
from this Plan, the Transferred MTI Employee shall cease
accruing Credited Service for vesting purposes under this Plan
for his employment with MTI or an MTI Affiliate.
(3) No Double Counting. The provisions of this subsection (h) are
not intended to grant an Employee service credit twice under
this Plan for the same period of service (whether worked for MTI
or the Employer, or their respective Affiliates).
(4) Definition of Transferred MTI Employee. Any Employee who worked
for an Employer and participated in the Plan and immediately
thereafter commenced work for MTI. The Committee in its sole
discretion, shall determine in a uniform and nondiscriminatory
manner if an individual is a Transferred MTI Employee and
eligible to receive Credited Service under this subsection (h).
(5) Compliance with Code. No service credit shall be granted under
this subsection (h) to the extent such service credit would
violate a requirement of Code Section 401(a) or otherwise
jeopardize the qualified status of the Plan.
<PAGE>
Date of Hire shall mean the date the Employee first performs an Hour of
Service for an Employer.
Dependent shall mean an individual who qualifies as a "dependent" within
the meaning of Section 152 of the Code.
Distribution shall mean payment by the Trustee to or for the benefit of a
Participant, Spouse, Beneficiary or other person entitled to benefits as
provided in this Plan.
Effective Date shall mean January 1, 2000, the date of the Plan's
amendment and restatement.
Eligible Employee shall mean, except for those Employees identified in the
following sentence, all Employees employed by the Employer. The following
Employees shall not be considered Eligible Employees:
(a) any Employee included in a collective bargaining unit for which
a labor organization is recognized as collective bargaining
agent unless such employee has been designated by the Committee
as an "Eligible Employee" for the purposes of this Plan;
(b) any "leased employee," with respect to the Employer or deemed
employee under Code Section 414(o); or
(c) any Employee who is a nonresident alien whether or not such
Employee receives earned income from the Employer which
constitutes income from sources within the United States.
Employee shall mean any person employed by or on Authorized Leave of
Absence from the Employer, and any person who is a "leased employee" with
respect to the Employer. However, if such "leased employees" constitute less
than 20 percent of the Employer's combined non-highly compensated work force,
within the meaning of Code Section 414(n)(1)(C)(ii), the term "Employee" shall
not include "leased employees" covered by a plan described in Code Section
414(n)(5). Individuals classified by the Employer as independent contractors
shall not be considered Employees and shall not be eligible to participate in
the Plan. However, in the event an individual classified as an independent
contractor by an Employer is subsequently determined by a court of competent
jurisdiction to be an Employee, then such individual shall be eligible to
participate in this Plan prospectively from the date of such court
determination, provided such individual otherwise satisfies the Plan's
eligibility requirements.
<PAGE>
Employer shall mean the Company and any Affiliated Sponsor. All Affiliated
Sponsors are listed on Schedule A.
Employer Contributions shall mean Employer Matching Contributions,
Qualified Nonelective Contributions, and/or Profit Sharing Contributions.
Employer Matching Contribution Account shall mean the portion of a
Participant's Account attributable to the Employer Matching Contributions, and
the total of the Adjustments which have been credited to or deducted from a
Participant's Account with respect to such Employer Matching Contributions.
Employer Matching Contributions shall have that meaning as defined in
Section 5.1.
Employer Securities shall mean the common stock of Micron Electronics,
Inc.
Employment shall mean the active service of an Employee with the Employer.
Employment Commencement Date shall mean the date on which the Employee
first performs an Hour of Service for an Employer.
Fiduciary shall mean any party named as a Fiduciary in Article 10 of the
Plan. Any party shall be considered a Fiduciary of the Plan only to the extent
of the powers and duties specifically allocated to such party under the Plan.
Forfeiture. See Section 7.5.
Former MTI Employee. See definition of "Credited Service."
Former Participant shall have that meaning as defined in Section 3.3(a).
Fund shall mean the money and other properties held and administered by
the Trustee in accordance with the Plan and Trust Agreement. If the Committee so
directs, multiple trust funds may be established under this Plan, which together
shall comprise the Fund hereunder.
Highly Compensated Employee shall have that meaning as defined in Article
13.
Investment Fund shall mean the separate funds under the Fund which are
distinguished by their investment objectives. Investment Fund may include a fund
comprised primarily of Employer Securities on either a unitized or a share
accounting basis.
<PAGE>
MTI shall mean Micron Technology, Inc., an Idaho corporation, and any
entity that is aggregated with Micron Technology, Inc. under Code Section
414.
Maternity or Paternity Leave shall mean the Employee's cessation of
Employment on account of (i) the pregnancy of the Employee, (ii) the birth of
the Employee's child, (iii) the child's placement with the Employee in
connection with the Employee's adoption of such child, or (iv) caring for a
child described in (i) through (iii) above immediately following the child's
birth or placement. This definition shall be interpreted in accordance with Code
Sections 410(a)(5)(E) and 411(a)(6)(E).
Non-highly Compensated Employee shall mean an Employee of the Employer who
is not a Highly Compensated Employee.
Normal Retirement Date shall mean the date a Participant attains age
sixty-two (62).
Participant shall mean an Eligible Employee who becomes eligible to
participate in the Plan as provided in Article 3 or who has made a roll-over
contribution to the Plan as provided in Article 4.
Pay Date shall mean with respect to an Employee, the regularly scheduled
bi-weekly date on which payroll checks are issued by the Company to such
Employee.
Permanent Disability shall mean a disability of a Participant within the
meaning of Code Section 22(e)(3), to the extent that the Participant is, or
would be, entitled to disability retirement benefits under the Federal Social
Security Act or to the extent that the Participant is entitled to recover
benefits under any long term disability plan or policy maintained by the
Employer. The determination of whether or not a Permanent Disability exists
shall be determined by the Committee in its sole discretion.
Plan shall mean the Plan as set forth in this document together with any
subsequent amendments hereto. See Section 1.1.
Plan Administrator or Administrator shall mean the Committee appointed by
the Authorized Officer pursuant to Article 10 to administer the Plan. All
references in the Plan to the Administrator shall be deemed to apply to the
Committee and vice versa. The Committee so appointed is hereby designated as the
"Administrator" of the Plan within the meaning of Section 3(16) of the Act.
Plan Year shall be the calendar year.
Pre-Tax Contribution shall mean contributions made to the Plan during the
Plan Year by the Employer, at the election of the Participant, in lieu of cash
<PAGE>
compensation and that are made pursuant to a salary reduction agreement. Such
contributions are nonforfeitable when made and distributable only as specified
in Article 8, Article 9 or Article 16.
Pre-Tax Contribution Account shall mean the portion of a Participant's
Account attributable to Pre-Tax Contributions, and the total of the Adjustments
which have been credited to or deducted from a Participant's Account with
respect to Pre-Tax Contributions.
Prior Plan. See Section 1.1.
Profit Sharing Contribution shall have that meaning as defined in Section
5.3.
Profit Sharing Contribution Account shall mean the portion of a
Participant's Account attributable to Profit Sharing Contributions and the total
of the Adjustments which have been credited to or deducted from a Participant's
Account with respect to Profit Sharing Contributions.
Qualified, as used in "qualified plan" or "qualified trust" shall mean a
plan and trust which are entitled to the tax benefits provided respectively by
Sections 401 and 501 of the Code, and related provisions of the Code.
Qualified Nonelective Contribution Account shall mean the portion of a
Participant's Account attributable to Qualified Nonelective Contributions, and
the total of the Adjustments which have been credited to or deducted from a
Participant's Account with respect to Qualified Nonelective Contributions.
Qualified Nonelective Contribution shall have that meaning as defined in
Section 5.4.
Retirement shall mean the Termination Date of a Participant on or after
his Normal Retirement Date.
Spouse shall mean the person who was married to the Participant (in a
civil or religious ceremony recognized under the laws of the state where the
marriage was contracted) immediately prior to the date on which payments to the
Participant from the Plan begin. If the Participant dies prior to the
commencement of benefits, Spouse shall mean a person who is married to a
Participant (as defined in the immediately preceding sentence) on the date of
the Participant's death and who has not failed (or is not deemed to have failed)
to survive the Participant's death. A Participant shall not be considered
married to another person as a result of any common law marriage whether or not
such common law marriage is recognized by applicable state law.
Termination Date shall mean the first to occur of the following events:
<PAGE>
(a) Voluntary resignation from service of the Employer; or
(b) Discharge from the service of the Employer by the Employer; or
(c) Retirement; or
(d) Death; or
(e) The second anniversary of the date the Employee ceases Employment due
to Maternity or Paternity Leave; or
(f) The first anniversary of the date the Employee ceases Employment for
any reason not described above (e.g., vacation, holiday, sickness, disability,
leave of absence, or layoff).
If, however, an Employee terminates his Employment on account of an event
described in paragraphs (a) - (c) above and the Employee performs an "hour of
service" as defined in Department of Labor regulations Title 29, Chapter XXV,
subchapter C, part 2530, Section 200b within twelve months following such
termination of Employment (or such lesser period as provided in Treasury
Regulation Section 1.410(a)-7(d)(iii)(B)), the Employee shall be considered as
having been in active Employment during such period of absence. An Employee on
Authorized Leave of Absence will not have a Termination Date during such
Authorized Leave of Absence nor will such Authorized Leave of Absence count
toward the 12-month period described in subparagraph (f) above.
Treasury Regulation means regulations pertaining to certain Sections of
the Code as issued by the Secretary of the Treasury.
Trust or Trust Agreement shall mean the agreement of trust (and all
amendments thereto) pursuant to which the Fund is created and maintained and
which is entered into between the Employer and one or more trustees (sometimes
referred to as sub-trusts). It is expressly intended that (if the Committee so
directs) multiple sub-trusts may be established under this Plan, which together
shall comprise the Trust Fund hereunder and that all of the sub-trusts shall be
considered a single trust fund for purposes of Treasury Regulation Section
1.414(1)-1(b)(1).
Trustee shall mean any institution or individual(s) who shall accept the
appointment of the Committee to serve as Trustee to the Plan.
Valuation Date shall mean each business day of the Plan Year on which plan
assets are traded on a national exchange or such other day as selected by the
Committee.
<PAGE>
Other Rules. A defined term, such as "Retirement," will normally govern
the definitions of derivatives therefrom, such as "Retire," even though such
derivatives are not specifically defined and even if they are or are not
initially capitalized. The masculine gender, where appearing in the Plan, shall
be deemed to include the feminine gender, unless the context clearly indicates
to the contrary. Singular and plural nouns and pronouns shall be interchangeable
as the factual context may allow or require. The words "hereof," "herein,"
"hereunder" and other similar compounds of the word "here" shall mean and refer
to the entire Plan and not to any particular provision or Section.
ARTICLE 3
PARTICIPATION
3.1 Participation.
(a) Eligible Employees on the Effective Date. Any Eligible Employee who
participated in the Prior Plan and who is in Employment with an Employer on the
Effective Date shall continue his or her participation in this Plan as of the
Effective Date.
(b) Other Employees. An Eligible Employee who does not satisfy the
requirements of subsection (a) above shall become a Participant in the Plan upon
his or her Date of Hire. See Section 3.4 below for special rules that apply to
new Employees following an acquisition.
(c) Employees of Foreign Affiliates. Individuals who are employed by a
foreign affiliate (as defined in Code Section 3121(l)) are not eligible to
participate in this Plan.
(d) Other Participation Rules. If an Eligible Employee either (i) is no
longer employed by the Employer or (ii) is no longer an Eligible Employee on the
earliest date on or after which such Employee satisfies the requirements
described above, but either (i) returns to work for an Employer or (ii) again
becomes an Eligible Employee, such Eligible Employee shall commence
participation immediately following the later of the date such Employee (i)
returns to work for an Employer or (ii) again becomes an Eligible Employee.
(e) Enrollment. An Eligible Employee who becomes eligible to participate
in this Plan will be asked to follow certain procedures to enroll in the Plan,
and pursuant to which he will designate Beneficiaries and may elect to make
Pre-Tax Contributions. An Eligible Employee's participation in the Plan shall be
contingent upon completion of such enrollment process.
3.2 Authorized Leave of Absence. A period during which an Employee is on
Authorized Leave of Absence shall not count towards the Employee's Break in
Service, but such Authorized Leave of Absence shall only be ignored in
<PAGE>
determining an Employee's Break in Service if such Employee resumes Employment
immediately after the end of such Authorized Leave of Absence.
3.3 Participation and Rehire.
(a) Status as a Participant. A Participant's participation in the Plan
shall continue until the Participant's Termination Date. On or after his
Termination Date, the Employee shall be known as a "Former Participant" and his
benefits shall thereafter be governed by the provisions of Article 8. The
individual's status as a Former Participant shall cease as of the date the
individual ceases to have any balance in his Account. If a Participant ceases to
be an Eligible Employee but does not have a Termination Date, then such person
shall continue to be known as a "Participant," but shall not be eligible to make
Pre-Tax Contributions and shall not be eligible to receive Employer
Contributions.
(b) Rehire of Person who was a Participant in this Plan. An Eligible
Employee who was a Participant in this Plan at the time of his Termination Date
and who is subsequently rehired by an Employer, shall be eligible to participate
in this Plan immediately following the later of (i) his rehire date, or (ii) the
date he becomes an Eligible Employee.
3.4 Acquisitions. If a group of persons becomes employed by an Employer (or any
of its subsidiaries or divisions) as a result of an acquisition of another
employer, employees of an acquired business shall be treated as having become
Employees as of the date of the Employer's acquisition of such business.
3.5 Not Contract for Employment. Participation in the Plan shall not give any
Employee the right to be retained in the Employer's employ, nor shall any
Employee, upon dismissal from or voluntary termination of his employment, have
any right or interest in the Fund, except as herein provided.
3.6 Transfer of Employment from MTI. If an Employee transfers employment
directly from MTI to an Employer, then such Employee shall be eligible to
participate in the Plan as of his Date of Hire provided he is an Eligible
Employee as of such date, and if not, he shall be eligible to participate in the
Plan on the date on which he becomes an Eligible Employee.
ARTICLE 4
PRE-TAX CONTRIBUTIONS; ROLLOVERS
4.1 Pre-Tax Contributions.
(a) Payroll Deduction and Amount of Pre-Tax Contributions. Except during
periods of suspension as set forth in Section 4.3(b), a Participant may elect to
make Pre-Tax Contributions to the Plan by means of payroll deduction. A
<PAGE>
Participant may contribute as a Pre-Tax Contribution any whole percentage from
1% to 16% of his Compensation during any Plan Year. It is expressly intended
that, to the extent allowable by law, Pre-Tax Contributions shall not be
included in the gross income of the Participant for income tax purposes and
shall be deemed contributions under a cash or deferred arrangement pursuant to
Code Section 401(k).
(b) Additional Rules. The Committee may establish guidelines and rules in
order to effectuate the provisions of this Section.
(c) Compensation. For this purpose, Compensation prior to becoming a
Participant is ignored.
4.2 Elections Regarding Pre-Tax Contributions.
(a) Procedure for Making Initial Elections. The initial election by a
Participant to make Pre-Tax Contributions to the Plan shall be made in writing
on a form prescribed by the Committee or by enrolling through the Plan's on-line
benefits system (or such other method as may be adopted by the Committee on a
nondiscriminatory basis) and by designating on such form or system (or by such
other means as may be adopted by the Committee) the percentage of Compensation
that will be contributed as a Pre-Tax Contribution during each payroll period.
The initial election to make Pre-Tax Contributions shall be effective for the
first Pay Date following the Participant's satisfaction of (1) the requirements
in Section 3.1; and (2) the receipt by the Plan Administrator at least seven
days prior to such Pay Date of the Participant's initial election in a form
approved by the Committee.
(b) Additional Limitations of Pre-Tax Contributions. Pre-Tax Contributions
shall be subject to the limitations described in Section 12.2 (maximum dollar
contribution limit), Section 12.3 if applicable (ADP non-discrimination test)
and Article 14 (Code Section 415 limit).
4.3 Change in Pre-Tax Contribution Percentage or Suspension of
Contributions.
(a) Change of Contribution Percentage. A Participant may increase or
decrease the percentage of his Compensation contributed as a Pre-Tax
Contribution at any time by submitting a written notice to the Plan
Administrator or by making such change through the Plan's on-line benefits
system (or such other method as may be adopted by the Committee on a
nondiscriminatory basis). Such change shall be effective on the first Pay Date
that follows the date on which the Participant makes the requested change and
the Plan Administrator receives, at least seven days prior to such Pay Date, the
Participant's election in a form approved by the Committee.
<PAGE>
(b) Suspension of Contributions. A Participant may suspend his Pre-Tax
Contributions at any time by properly completing a form prescribed by the Plan
Administrator or by making such change through the Plan's on-line benefits
system (or such other method as may be adopted by the Committee on a
nondiscriminatory basis). The suspension of Pre-Tax Contributions shall be
effective on the first Pay Date following the date on which the Participant
requests the suspension and the Plan Administrator receives, at least seven days
prior to such Pay Date, the Participant's election in a form approved by the
Committee. A Participant may resume making Pre-Tax Contributions on the first
Pay Date following the date on which the Participant requests the resumption of
Pre-Tax Contributions and the Plan Administrator receives, at least seven days
prior to such Pay Date, the Participant's election in a form approved by the
Committee.
(c) Other Rules.
(1) See Section 9.3 for circumstances under which a
Participant's Pre-Tax Contributions could be suspended for a period
of at least 12 months after such Participant receives a hardship
distribution.
(2) In order to satisfy the provisions of Article 12 and Article
14, the Committee may from time to time either temporarily suspend
the Pre-Tax Contributions of Participants or reduce the maximum
permissible Pre-Tax Contribution that may be made to the Plan by
Participants.
(3) Any reduction, increase, or suspension of Pre-Tax
Contributions described in this Article 4.3 shall be made in such
manner as the Committee may prescribe from time to time consistent
with the provisions of this Article.
4.4 Deadline for Contributions and Allocation of Pre-Tax Contributions.
Pre-Tax Contributions shall be deducted by the Employer from the Participant's
Compensation and paid to the Trustee as promptly as possible following each
regular Pay Date, but in no event later than 15 business days after the end of
the month in which such Pre-Tax Contributions have been retained by the
Employer.
4.5 Rollover Contribution.
(a) Without regard to any limitation on contributions set forth in this
Article 4, and without regard to any waiting period described in Article 3, an
Eligible Employee may, absent an objection by the Committee (based on
non-discriminatory criteria), transfer to the Trustee during any Plan Year
property, provided such property:
<PAGE>
(1) is cash that was received by the Participant from a
Qualified Plan maintained by a previous employer of the Participant
and qualifies as a rollover contribution within the meaning of Code
Section 402(c)(4);
(2) is cash that was received by the Participant from an
individual retirement account or individual retirement annuity and
qualifies as a rollover contribution within the meaning of Code
Section 408(d)(3)(A)(ii); or
(b) Such cash shall be held by the Trustee in the Participant's Rollover
Account. All such amounts so held shall at all times be fully vested and
nonforfeitable. Such amounts shall be distributed to the Participant after his
Termination Date in the manner provided in Article 8.
ARTICLE 5
EMPLOYER CONTRIBUTIONS
5.1 Employer Matching Contribution.
(a) Amount and Allocation of Employer Matching Contribution. The Employer
Matching Contribution shall be made in the sole discretion of the Company, and,
if any Employer Matching Contribution is made, shall be made on a Pay Date basis
and shall be equal to a uniform percentage, a uniform dollar amount, or a
combination of the two, of a Participant's Pre-Tax Contributions made on such
Pay Date. The Committee may specify the uniform percentage or uniform dollar
amount for any Plan Year, as well as a maximum contribution cap to the Employer
Matching Contribution in Schedule C attached to this Plan. Notwithstanding the
foregoing, the Company may, at the end of the Plan Year, make "true-up" Employer
Matching Contributions to the Account of any Participant who has not yet
received the maximum contribution in Schedule C for any reason, including a
situation where the Participant deferred the maximum amount permitted by law
into his or her Pre-Tax Contributions Account prior to Plan Year-end and
therefore had not received the maximum Employer Matching Contribution to which
the Participant otherwise would be entitled.
(b) Eligibility to Receive Contribution. The Employer Matching
Contribution, if any, shall be allocated among the Employer Matching
Contribution Accounts of Participants who made a Pre-Tax Contribution to the
Plan on the Pay Date on which the Employer Matching Contribution is made.
Notwithstanding the foregoing, no Plan Year-end "true-up" Employer Matching
Contribution described in Section 5.1(a) shall be allocated to a Participant's
Account unless the Participant is employed on the last day of the Plan Year.
<PAGE>
5.2 Profit Sharing Contribution.
(a) Amount and Allocation of Profit Sharing Contribution. At the end of
each Plan Year, the Employer or its designee may, in its sole discretion, make a
discretionary contribution in an amount equal to a uniform percentage or a
uniform dollar amount of a Participant's Compensation for such Plan Year, or a
uniform number of shares of Employer Securities.
(b) Eligibility to Receive Contribution. The Profit Sharing Contribution,
if any, shall be allocated among the Profit Sharing Contribution Accounts of
Participants who are actively employed by an Employer on the last day of the
Plan Year.
5.3 Qualified Nonelective Contributions. In the sole discretion of the Employer
or its designee, an additional Employer Contribution may be made to the Plan
which shall be known as a "Qualified Nonelective Contribution." Such
contribution may be made for the purpose, among others, of satisfying the
requirements of Article 12, and shall be allocated to the Qualified Nonelective
Contribution Accounts of those Non-highly Compensated Employees selected by the
Committee at the time such Qualified Nonelective Contribution is made, or as
soon thereafter as possible.
In addition, the Committee may make such other Qualified Nonelective
Contributions as determined by the Committee which are necessary to maintain the
qualified status of the Plan.
5.4 Form and Timing of Contributions.
(a) Employer Contributions shall be made in cash or in shares of Employer
Securities valued as of the date such contributions are made, as determined by
the Employer or its designee in its sole discretion. Employer Contributions
(other than Qualified Nonelective Contributions) shall be delivered to the
Trustee no later than the date prescribed by the Code for filing the Employer's
federal income tax return, including authorized extensions. Qualified
Nonelective Contributions shall be delivered to the Trustee on or before the
last day of the twelfth month following the close of the Plan Year to which the
contribution relates.
(b) Except as provided in this Section 5.5, all Employer Contributions
shall be irrevocable, shall never inure to the benefit of any Employer, shall be
held for the exclusive purpose of providing benefits to Participants and their
Beneficiaries (and contingently for defraying reasonable expenses of
administering the Plan), and shall be held and distributed by the Trustee only
in accordance with this Plan.
<PAGE>
(c) Upon an Employer's request and to the extent permitted by the Code and
other applicable laws and regulations thereunder, a contribution (either
Employee or Employer Contribution) which was made by a mistake in fact, or
conditioned upon the initial qualification of the Plan under Code Section 401(a)
or upon the deductibility of the contribution under Section 404 of the Code
shall be returned to the Employer within one year after the payment of the
contribution, the denial of the Plan's initial qualification, or the
disallowance of the deduction (to the extent disallowed) whichever is
applicable. All contributions to this Plan are expressly conditioned on the
deductibility of such contributions under Code Section 404 and on the initial
qualification of the Plan.
5.5 Forfeitures. Forfeitures shall first be applied to restore amounts
previously forfeited pursuant to Section 7.5(c). Thereafter any remaining
Forfeitures shall be applied to reduce Plan administrative expenses and/or
reduce Employer Contributions. See Section 7.5 to determine when a forfeiture of
a Participant's Account occurs.
ARTICLE 6
ACCOUNTS AND ALLOCATIONS
6.1 Participant Accounts.
(a) Individual Account Plan. This Plan is an "individual account plan," as
that term is used in ERISA. A separate Account shall be maintained for each
Participant, Former Participant or Beneficiary, as the case may be, so long as
he has an interest in the Plan.
(b) Sub-Accounts. Each Account shall be divided (as appropriate) into the
following parts and sub-parts:
(1) The Pre-Tax Contribution Account, which shall reflect
Pre-Tax Contributions contributed to the Plan and any Adjustments
thereto.
(2) The Employer Matching Contribution Account, which shall
reflect Employer Matching Contributions contributed to the Plan and
any Adjustments thereto. The Employer Matching Contribution Account
shall be further divided into such additional sub-portions as the
Committee deems necessary or appropriate to maintain, including
assets contributed prior to January 1, 2000 which remain subject to a
vesting schedule.
(3) The Employer ROE Account, which shall reflect Employer ROE
Contributions contributed to the Plan and any Adjustments thereto.
<PAGE>
(4) The Profit Sharing Contribution Account, which shall
reflect Profit Sharing Contributions contributed to the Plan and
any Adjustments thereto.
(5) The Qualified Nonelective Contribution Account, which
shall reflect Qualified Nonelective Contributions contributed to
the Plan and any Adjustments thereto.
(6) The Rollover Account, which shall reflect the value of all
investments derived from the Participant's Rollover Contributions
under the Plan and any Adjustments thereto.
(7) The Prior Employer Account, which shall reflect assets
transferred directly from a trustee of another Qualified Plan to the
Trustee of this Plan (and Adjustments thereto). The Prior Employer
Account shall be further divided into such additional sub-portions as
the Committee deems necessary or appropriate to maintain, including
assets contributed to the Qualified Plan as pre-tax contributions
(Pre-Tax Contributions), after-tax contributions, employer matching
contributions, rollover contributions, etc. To the extent deemed
appropriate, portions or sub-portions of this Account may be
allocated to and held in other Accounts. For example, pre-tax
contributions transferred to this Plan from another Qualified Plan,
may be allocated to and held as part of the Pre-Tax Contribution
Account.
The Committee may divide any Account into such additional sub-portions as
the Committee deems to be necessary or advisable under the circumstances or to
establish other accounts or sub-accounts as needed. The Committee may delegate
the responsibility for the maintenance of any Account or sub-account(s).
(c) Value of Account as of Valuation Date. As of each Valuation Date, each
Participant's Account shall equal:
(1) his total Account as determined on the immediately
preceding Valuation Date, plus
(2) his Pre-Tax Contributions added to his Account since the
immediately preceding Valuation Date, plus
(3) his Employer Contributions added to his Account since the
immediately preceding Valuation Date, plus
(4) his Rollover Contributions or amounts transferred to this
Plan from the trustee of another Qualified plan and which were added
<PAGE>
to his Account since the immediately preceding Valuation Date, minus
(5) his Distributions, if any, since the immediately preceding
Valuation Date, plus or minus
(6) his allocable share of Adjustments.
6.2 Allocation of Adjustments. The Adjustment for each Investment Fund shall be
calculated as of each Valuation Date. The Adjustment for a given Investment Fund
shall be allocated to each Account invested in such Investment Fund in the
proportion that each such Account bears to the total of all such Accounts. Such
Valuation shall occur prior to the allocation of all contributions and all
distributions.
6.3 Plan Expenses. The Committee may direct that expenses attributable to
general Plan administration be allocated among the Accounts of all Participants
in proportion to their Account balances. Furthermore, to the extent permitted by
ERISA, expenses attributable to a specific Participant's Account may be charged
to that Participant's Account.
6.4 Investment Funds and Elections.
(a) Election of Investment Funds. Each Participant shall direct, following
such procedures as may be specified by the Committee, to have his Account
allocated or reallocated among the Investment Funds.
(b) Initial Investment Direction. A Participant's initial investment
election must allocate his entire Account in whole percentage points among the
Investment Funds, as of the date of the directive, and all subsequent
contributions to each sub-account for so long as the election remains in effect.
An Employee who fails to make a proper investment election by the deadline
established by the Committee for such purpose, shall be deemed to have elected
to allocate the non-directed portion of his Account in the Investment Fund as
determined by the Committee in its nondiscriminatory discretion.
(c) Subsequent Elections. Investment elections will remain in effect until
changed by a subsequent election. Subsequent elections may be made by a
Participant in any amount or percentage among the Investment Funds on any
business day of the Plan Year on which plan assets are traded on a national
exchange or such other day as selected by the Committee. New elections may
change future allocations to the Participant's Account, may reallocate between
the Investment Funds any amounts previously credited to the Participant's
Account, or may leave the allocation of such prior amounts unchanged.
<PAGE>
(d) Investment Options. The Committee shall select such Investment Funds
as are deemed appropriate and shall notify affected Participants of such
Investment Funds. The Committee may modify, eliminate or select new Investment
Funds from time to time and shall notify affected Participants of such changes
and solicit new investment elections, if appropriate.
6.5 Errors. Where an error or omission is discovered in any Participant's
Account, the Committee shall make appropriate corrective adjustments as of the
end of the Plan Year in which the error or omission is discovered. If it is not
practical to correct the error retroactively, then the Committee shall take such
action in its sole discretion as may be necessary to make such corrective
adjustments, provided that any such actions shall treat similarly situated
Participants alike and shall not discriminate in favor of Highly Compensated
Employees.
6.6 Valuation For Purposes of Distributions.
(a) For the purposes of Article 8, each Participant's Account shall be
valued as of the Valuation Date immediately preceding the Distribution of the
Participant's Account.
(b) No person entitled to a Distribution shall receive interest or other
earnings on the Account from the applicable Valuation Date described in
subsection (a) or subsection (b) above, to the date of actual Distribution to
such person.
(c) This Section 6.6 shall not apply to the valuation of Accounts for
purposes of in-service withdrawals. Instead, see Section 9.6.
ARTICLE 7
VESTING
7.1 Retirement. A Participant who is in active Employment on his Normal
Retirement Date shall become 100% vested in his Account. Upon such Participant's
Termination Date, the Participant's Account will be distributed on the date and
in the form specified in Article 8.
7.2 Permanent Disability. A Participant who has a Termination Date on account of
Permanent Disability shall become 100% vested in his Account as of the date of
such Termination Date and shall be entitled to a Distribution of his Account on
the date and in the form specified in Article 8.
7.3 Death. A Participant who has a Termination Date on account of death shall
become 100% vested in his Account. The Participant's Beneficiary shall receive a
Distribution of such Account on the date and in the form specified in Article 8.
<PAGE>
7.4 Other Termination Date.
(a) In General. Upon a Participant's Termination Date for any reason other
than Retirement, Permanent Disability or death, the Participant shall be
entitled to the vested portion of his Account, which shall be distributed on the
date and in the form specified in Article 8.
(b) 100% Vesting in Certain Sub-Accounts. A Participant shall always be
one hundred percent (100%) vested in his Pre-Tax Contribution Account, Qualified
Nonelective Contribution Account, Rollover Account, and all amounts contributed
to the Employer Matching Contribution Account for Plan
Years beginning on or after January 1, 2000.
(c) Vesting Schedule in Employer Contributions. Any Participant who
terminates Employment for any reason other than Retirement, Permanent Disability
or death shall be vested in his pre-2000 Employer Matching Contribution Account,
and Profit Sharing Account pursuant to the applicable vesting schedule set forth
below.
<TABLE>
<CAPTION>
Years of Credited Service Vested Percentage
as of Termination Date
- ----------------------------------------------
<S> <C>
Less than 2 Years 0%
2 Years 25%
3 Years 50%
4 Years 75%
5 Years or More 100%
</TABLE>
(d) Forfeiture. That portion of the Participant's Account which is not
vested upon the Participant's Termination Date shall be forfeited in accordance
with Section 7.5.
7.5 Forfeitures.
(a) No Distribution of Account Prior to Break in Service. A Participant
who has a Termination Date but who does not receive a Distribution of his vested
Account prior to incurring a Break in Service shall, upon incurring the Break in
Service, forfeit the non-vested portion of his Account. If the terminated
Participant resumes Employment with the Employer prior to incurring a Break in
Service, then the Participant's entire Account, unreduced by any forfeiture,
shall become his beginning Account on the date he resumes participation in the
Plan.
(b) Distribution of Vested Account Prior to Break in Service. A
Participant who has a Termination Date and receives a Distribution of his entire
vested Account prior to incurring a Break in Service, shall, upon such
Distribution, forfeit the non-vested portion of his Account. A Participant who
is not vested in any portion of his Account shall be deemed to have received a
Distribution of his entire vested account upon his incurring a Break in Service
<PAGE>
and such Participant's non-vested Account shall be immediately forfeited after
incurring such Break in Service.
(c) Repayment of Account; Restoration of Non-Vested Account. Except as
provided below, a Participant who is re-hired by the Employer shall have the
right to repay to the Plan the portion of the Participant's Account which was
previously distributed to him. In the event the Participant repays the entire
Distribution he received from the Plan, the Employer shall restore the
non-vested portion of the Participant's Account. A Participant's Account shall
first be restored, to the extent possible, out of forfeitures under the Plan in
the Plan Year in which he was reemployed. To the extent such forfeitures are
insufficient to restore the Participant's Account, restoration shall be made
from Employer Contributions.
(d) Restrictions of Repayment Account. Notwithstanding anything to the
contrary in this Plan, a Participant shall not have the right to repay to the
Plan the portion of his Account which was previously distributed to him after
any of the following events: (i) the Participant incurs a Break in Service
before returning to Employment, (ii) the Participant fails to repay the prior
Distribution within five years after the Participant is re-employed by the
Employer, or (iii) the Participant received a Distribution of his entire Account
balance at the time of such earlier Distribution.
(e) Allocation of Forfeitures. See Section 5.6 for the allocation of
forfeitures.
7.6 Transfer of Employment from an Affiliate. If an employee transfers
employment directly from an Affiliate that does not participate in this Plan to
an Employer, such employee shall receive Years of Credited Service for vesting
purposes for the time worked with the Affiliate on the date on which such
employee becomes an Eligible Employee.
7.7 Vesting Credit for Acquisitions. If a group of persons becomes employed by
an Employer (or any of its subsidiaries or divisions) as a result of an
acquisition of another employer, the Committee shall determine in a
nondiscriminatory manner whether and to what extent employment with such prior
employer shall be treated as vesting service for purposes of this Article 7.
Such terms and conditions which apply to vesting shall be set forth in Schedule
B to this Plan by action of the Committee.
ARTICLE 8
DISTRIBUTIONS
8.1 Commencement of Distribution. The Participant's Account shall be distributed
at the earliest of the following dates:
<PAGE>
(a) Termination of Employment. If a Participant has a Termination Date
other than on account of death, the Participant's Account will commence to be
distributed as soon as administratively practicable, generally no later than 90
days following the end of the calendar quarter in which such Participant
requests a Distribution of his Account. Such request shall be made on a form
provided by the Committee or such other method as may be approved by the
Committee. See Section 8.1(c) for circumstances where the Participant's consent
to a Distribution is not required.
(b) Death. If a Participant has a Termination Date on account of death,
the Participant's Account balance shall be distributed in a lump sum as soon as
administratively practicable to the Beneficiary following a distribution request
by such Beneficiary, and in no event later than December 31 of the calendar year
in which falls the fifth anniversary of the death of the Participant.
(c) Consent of Participant. A Participant's consent to a Distribution of
his Account shall not be required in the circumstances described below, and the
Committee shall direct the Trustee to distribute the Participant's Account as
provided below:
(i) Account Less Than $5,000. Effective for Plan Years beginning on or
after August 5, 1997, except as provided in Section 8.1(g), if the
Participant's vested Account balance is less than or equal to $5,000 at the
time of the Distribution (or, for distributions between January 1, 1998 and
March 22, 1999, the vested Account balance was at all times less than or
equal to $5,000) such Account will be distributed in a lump sum as soon as
administratively practicable following the Participant's Termination Date.
(ii) Age 70 1/2. If a distribution is required under Section 8.5
(relating to mandatory distributions for Participants age 70 1/2), the
Participant's Account will be distributed as provided in such Section.
(iii)Age 62. If a Participant has incurred a Termination Date and is
age 62 or older, then the Participant may cause the Plan to begin
distribution of the Participant's Account no later than 60 days following
the end of the Plan Year in which such Participant attains age 62 or, if
later, within 60 days following the end of the Plan Year in which such
Participant has a Termination Date.
<PAGE>
(d) In-Service Withdrawals. Hardship withdrawals and age 59 1/2
distributions (see Article 9) shall commence as soon as administratively
practicable, generally no later than 90 days after such request is approved by
the Committee.
(e) Committee Direction to Trustee. The Committee shall issue directions
to the Trustee concerning the recipient and the distribution date of benefits
which are to be paid from the Trust pursuant to the Plan.
(f) Committee Guidelines. The Committee may establish, for administrative
purposes, uniform and nondiscriminatory guidelines concerning the commencement
of benefits.
(g) Involuntary Cashouts of Transferred MTI Employees. Effective for Plan
Years beginning on or after August 5, 1997, if a Transferred MTI Employee's
vested Account balance is $5,000 or less at the time of such employee's
Distribution, the Plan shall not automatically cash out such Transferred MTI
Employee's vested Account balance. The Transferred MTI Employee may nevertheless
request a distribution of his or her vested Account balance. If a Transferred
MTI Employee does request a Distribution of his or her vested Account balance,
however, the Transferred MTI Employee shall not receive continued Credited
Service. (See subsection (h) of the definition of Credited Service for rules
applicable to the continued accrual of Credited Service following a Transferred
MTI Employee's Termination Date if the employee does not receive a Distribution
of his or her vested Account balance. Also see such subsection (h) of the
definition of Credited Service for the definition of a Transferred MTI
Employee.)
8.2 Method of Distribution.
(a) Lump Sum Payment. The normal method of distribution of a Participant's
Account (regardless of whether such distribution is made by reason of an
in-service withdrawal or Termination Date) shall be payment in a single lump
sum.
(b) Medium of Distribution. Distributions shall be made solely in cash.
(c) Special Distribution Rules. See Schedule B for additional distribution
options available to Participants whose account balances in a predecessor plan
were transferred to this Plan in a plan-to-plan transfer or plan merger.
8.3 Payment to Minors and Incapacitated Persons. In the event that any amount is
payable to a minor or to any person who, in the judgment of the Committee, is
incapable of making proper disposition thereof, such payment shall be made for
<PAGE>
the benefit of such minor or such person in any of the following ways as the
Committee, in its sole discretion, shall determine:
(a) By payment to the legal representative of such minor or such
person;
(b) By payment directly to such minor or such person;
(c) By payment in discharge of bills incurred by or for the benefit of
such minor or such person. The Trustee shall make such payments as directed by
the Committee without the necessary intervention of any guardian or like
fiduciary, and without any obligation to require bond or to see to the further
application of such payment. Any payment so made shall be in complete discharge
of the Plan's obligation to the Participant and his Beneficiaries.
8.4 Application for Benefits. The Committee may require a Participant, Former
Participant or Beneficiary to complete and file with the Committee (or its
designee) certain forms as a condition precedent to the payment of benefits. The
Committee may rely upon all such information given to it, including the
individual's current mailing address. Each person interested in distributions
from the Fund shall have the responsibility to keep the Committee informed of
his or her current mailing addresses.
8.5 Special Distribution Rules.
(a) To the extent that the distribution rules described in this Section
provide a limitation upon distribution rules stated elsewhere in this Plan, the
distribution rules stated in this Section shall take precedence over such
conflicting rules. However, under no circumstances shall the rules stated in
this Section be deemed to provide distribution rights to Participants, Former
Participants or their Beneficiaries which are more expansive or greater than the
distribution rights stated elsewhere in this Plan.
(b) Effective January 1, 1997, in no event may the distribution of a
Participant's Account commence later than the April 1 following the later of the
calendar year in which the Participant (i) attains age 70 1/2 or (ii) terminates
employment. However, a Participant who is a 5 Percent Owner (as defined in
Section 13.4) must receive a distribution of his Account no later than April 1
following the calendar year in which the Participant attains age 70 1/2
(collectively the "Required Beginning Date").
(c) The entire interest of each Participant shall be distributed,
beginning not later than the Required Beginning Date, in a single lump sum
(which may, at the Participant's request, be divided between the amount required
to be distributed under section 401(a)(9) and the balance available for
rollover), unless a different distribution option is available under Schedule B
and such distribution option satisfies the minimum distribution requirements of
Code Section 401(a)(9).
(d) If a Participant dies before the Required Beginning Date, the
Participant's vested Account must be distributed in a lump sum within five years
after the death of the Participant.
(e) Notwithstanding anything to the contrary herein, distributions under
the Plan will comply with Treasury Regulations issued under Code Section
401(a)(9) and any other provisions reflecting Code Section 401(a)(9) as
prescribed by the Commissioner of the Internal Revenue Service.
8.6 Distributions Pursuant to Qualified Domestic Relations Orders.
Notwithstanding anything to the contrary in this Plan, a "qualified domestic
relations order," as defined in Code Section 414(p), may provide that any amount
to be distributed to an alternate payee may be distributed immediately even
though the Participant is not yet entitled to a distribution under the Plan. The
intent of this Section is to provide for the distribution of benefits to an
alternate payee as permitted by Treasury Regulation Section 1.401(a)-13(g)(3).
8.7 Direct Rollovers.
(a) In General. Notwithstanding any provision of the Plan to the contrary
that would otherwise limit a Distributee's election under this Section, a
Distributee may elect, at the time and in the manner prescribed by the Plan
Administrator, to have any portion of an Eligible Rollover Distribution paid
directly to an Eligible Retirement Plan specified by the Distributee in a direct
rollover.
(b) Definitions.
Eligible Rollover Distribution. An Eligible Rollover Distribution is any
distribution of all or any portion of the balance to the credit of the
Distributee, except that an Eligible Rollover Distribution does not include (i)
any distribution that is one of a series of substantially equal periodic
payments (not less frequently than annually) made for the life (or life
expectancy) of the Distributee or the joint lives (or joint life expectancies)
of the Distributee and the Distributee's designated Beneficiary, or for a
specified period of ten years or more; (ii) any distribution to the extent such
distribution is required under Section 401(a)(9) of the Code; (iii) the portion
of any distribution that is not includable in gross income (determined without
regard to the exclusion for net unrealized appreciation with respect to employer
securities); and (iv) effective January 1, 1999, any distribution on account of
hardship pursuant to Section 9.1 of this Plan.
<PAGE>
Eligible Retirement Plan. An Eligible Retirement Plan is an individual
retirement account described in Section 408(a) of the Code, an individual
retirement annuity described in Section 408(b) of the Code, an annuity plan
described in Section 403(a) of the Code, or a qualified trust described in
Section 401(a) of the Code, that accepts the Distributee's Eligible Rollover
Distribution. However, in the case of an Eligible Rollover Distribution to the
surviving spouse, an Eligible Retirement Plan is an individual retirement
account or individual retirement annuity.
Distributee. A Distributee includes a Participant or Former Participant.
In addition, the Participant's or Former Participant's surviving spouse and the
Participant's or Former Participant's spouse or former spouse who is an
alternate payee under a qualified domestic relations order, as defined in
Section 414(p) of the Code, are Distributees with regard to the interest of the
spouse or former spouse.
Direct Rollover. A Direct Rollover is a payment by the Plan to the
Eligible Retirement Plan specified by the Distributee.
(c) Waiver of 30-day Notice. If a distribution is one to which Sections
401(a)(11) and 417 of the Internal Revenue Code do not apply, such distribution
may commence less than 30 days after the notice required under Section
1.411(a)-11(c) of the Treasury Regulations is given, provided that:
(1) the Plan Administrator clearly informs the Participant that
the Participant has a right to a period of at least 30 days after
receiving the notice to consider the decision of whether or not to
elect a distribution (and, if applicable, a particular distribution
option), and
(2) the Participant, after receiving the notice, affirmatively
elects a distribution.
<PAGE>
ARTICLE 9
IN-SERVICE WITHDRAWALS
9.1 Hardship Withdrawal of Account.
(a) In General. Any Participant or Former Participant may request the
Committee to distribute to him part or all of his Pre-Tax Contribution Account
(other than earnings on the Participant's Pre-Tax Contribution Account as
provided below) and Rollover Account on account of Hardship.
(b) No Distribution of Earnings. Income or gain that is allocated to the
Participant's Pre-Tax Contribution Account may not be distributed in a hardship
withdrawal.
9.2 Definition of Hardship. Hardship shall mean an immediate and heavy financial
need experienced by reason of:
(a) Unreimbursed expenses of any accident to or sickness of such
Participant, his Spouse or his Dependents or expenses necessary to provide
medical care for such Participant, his Spouse or his Dependents;
(b) Purchase of a primary residence for such Participant;
(c) Payment of tuition and related educational fees for the next twelve
months of post-secondary education for the Participant, his Spouse, or
Dependents;
(d) The need to prevent the eviction of the Participant from his principal
residence or foreclosure on the Participant's principal residence; or
(e) Payment of funeral expenses of a child, parent (or legal guardian) or
sibling of a Participant, his Spouse or Dependents.
9.3 Maximum and Minimum Hardship Distribution. A hardship distribution cannot
exceed the amount required to meet the immediate financial need created by the
hardship (after taking into account applicable federal, state, or local income
taxes and penalties) and not reasonably available from other resources of the
Participant. In order to ensure compliance with this requirement, the
Participant must satisfy the provisions described below in (a) and (b) as a
condition precedent to the Participant receiving a hardship distribution:
(a) Receipt of all Distributions Available; Suspension of Future
Contributions. Receipt by the Participant of all distributions that he is
eligible to receive (including loans and other in-service withdrawals) under
this Plan and under any other plan maintained by the Employer.
<PAGE>
In addition, the Participant must agree to the following limitations and
restrictions:
(1) The Participant's Pre-Tax Contributions shall automatically
be suspended beginning on the first Pay Date that follows the date on
which the Plan Administrator approves the hardship distribution
provided the hardship distribution was approved at least seven days
prior to such Pay Date. Otherwise, the suspension shall be effective
as of the next succeeding Pay Date. Such Participant may resume
making Pre-Tax Contributions no earlier than 12 months from the
effective date of such suspension and only after informing the
Committee in writing or by electing to resume making Pre-Tax
Contributions through the Plan's on-line benefits system (or such
other method as may be adopted by the Committee on a
nondiscriminatory basis). Subject to the foregoing, the resumption of
Pre-Tax Contributions will become effective on the first Pay Date
that follows the date on which the Participant makes the resumption
request provided the Plan Administrator receives the Participant's
request at least seven days prior to such Pay Date. Otherwise, the
resumption request shall be effective as of the next succeeding Pay
Date.
(2) The maximum Pre-Tax Contribution the Participant may make
for the calendar year following his hardship distribution shall be
reduced by the amount of Pre-Tax Contributions made by the
Participant during the calendar year in which he received his
hardship distribution.
(3) The Participant shall be prohibited under a legally
enforceable agreement from making an employee contribution to this
Plan and any other plan maintained by the Employer for at least 12
months after the receipt of the hardship distribution. For this
purpose, the phrase "any other plan" includes all qualified and
nonqualified plans of deferred compensation, stock option plans and
stock purchase plans. It does not include a health or welfare plan
including one that is part of a Section 125 cafeteria plan.
(b) Other. Any other condition or method approved by the Internal Revenue
Service.
9.4 Procedure to Request Hardship. The request to receive a hardship
distribution shall be made on such forms and following such procedures as the
Committee may prescribe from time to time. Under no circumstances shall the
Committee permit a Participant to repay to the Plan the amount of any withdrawal
by a Participant under this Section.
<PAGE>
9.5 Participant Withdrawals After Age 59 1/2. At any time after a Participant in
active Employment attains age 59 1/2, such Participant may elect to withdraw all
or part of his or her vested Account (including any earnings thereon). A
Participant who receives an age 59 1/2 withdrawal is not suspended from
continuing or commencing to make (in accordance with the Plan) Pre-Tax
contributions to the Plan.
9.6 Valuation for Purposes of In-Service Withdrawals. The Participant's Account
for purposes of determining the amount of an in-service withdrawal shall be
determined as of the Valuation Date preceding the date the in-service withdrawal
is made (or such other date as determined by the Committee for administrative
purposes).
9.7 Other Rules for In-Service Distributions.
(a) All in-service distributions shall be made in the form of a single
lump sum cash distribution.
(b) If the Participant withdraws only a portion of a vested Account, the
source of the Accounts and Investment Funds from which the withdrawal shall be
made shall be as set forth in the Trust Agreement or the Trustee's
nondiscriminatory procedures, as the case may be.
(c) In no event shall a Participant be permitted to repay the amount of
his or her in-service withdrawal.
(d) The request to receive an in-service distribution shall be made on
such forms and following such procedures as the Committee may prescribe from
time to time.
9.8 Prior Employer Account. See Schedule B for in-service distribution
options available for a Prior Employer Account.
<PAGE>
ARTICLE 10
ADMINISTRATION OF THE PLAN
10.1 Named Fiduciaries. The following parties are named as Fiduciaries of the
Plan and shall have the authority to control and manage the operation and
administration of the Plan:
(a) The Company;
(b) The Board;
(c) The Trustee;
(d) The Committee; and
(e) The Authorized Officer.
The Fiduciaries named above shall have only the powers and duties
expressly allocated to them in the Plan and in the Trust Agreement and shall
have no other powers and duties in respect of the Plan; provided, however, that
if a power or responsibility is not expressly allocated to a specific named
fiduciary, the power or responsibility shall be that of the Company. No
Fiduciary shall have any liability for, or responsibility to inquire into, the
acts and omissions of any other Fiduciary in the exercise of powers or the
discharge of responsibilities assigned to such other Fiduciary under this Plan
or the Trust Agreement.
10.2 Board of Directors.
(a) The Board shall have the following powers and duties with respect to
the Plan:
(1) to terminate the Plan in whole or in part; and
(2) to amend any or all Plan provisions; however, the Authorized
Officer shall also have amendment powers as described in Section 10.5.
(b) The Board shall have no other responsibilities with respect to the
Plan.
10.3 Trustee. The Trustee shall exercise all of the powers and duties assigned
to the Trustee as set forth in the Trust Agreement. The Trustee shall have no
other responsibilities with respect to the Plan.
<PAGE>
10.4 Committee.
(a) A Committee of one or more individuals shall be appointed by and shall
serve at the pleasure of the Authorized Officer to administer the Plan. Any
Participant, any Employee of the Company, or before January 1, 2000 any employee
of MTI shall be eligible to be appointed a member of the Committee and all
members shall serve as such without compensation. Upon termination of his
employment with the Company, a Committee member shall cease to be a member of
the Committee. The Authorized Officer shall have the right to remove any member
of the Committee at any time, with or without cause. A member may resign at any
time by written notice to the Committee and the Authorized Officer. If a vacancy
in the Committee should occur, a successor shall be appointed by the Authorized
Officer. The Committee shall by written notice keep the Trustee notified of
current membership of the Committee, its officers and agents. The Committee
shall furnish the Trustee a certified signature card for each member of the
Committee and for all purposes hereunder the Trustee shall be conclusively
entitled to rely upon such certified signatures.
(b) The Authorized Officer shall appoint a Chairman and a Secretary from
among the members of the Committee, including the Authorized Officer. All
resolutions, determinations and other actions shall be by a majority vote of all
members of the Committee. The Committee may appoint such agents, who need not be
members of the Committee, as it deems necessary for the effective performance of
its duties, and may delegate to such agents such powers and duties, whether
ministerial or discretionary, as the Committee deems expedient or appropriate.
The compensation of such agents shall be fixed by the Committee; provided,
however, that in no event shall compensation be paid if such payment violates
the provisions of Section 408 of the Act and is not exempted from such
prohibitions by Section 408 of the Act.
(c) The Committee shall have complete control of the administration of the
Plan with all powers necessary to enable it to properly carry out the provisions
of the Plan. In addition to all implied powers and responsibilities necessary to
carry out the objectives of the Plan and to comply with the requirements of the
Act, the Committee shall have the following specific powers and
responsibilities:
(1) The sole discretion to construe the Plan and Trust Agreement
and to determine all questions arising in the administration,
interpretation and operation of the Plan;
(2) To decide all questions relating to the eligibility of
Employees to participate in the benefits of the Plan and Trust
Agreement;
<PAGE>
(3) To determine the benefits of the Plan to which any
Participant, Beneficiary or other person may be entitled;
(4) To keep records of all acts and determinations of the
Committee, and to keep all such records, books of accounts, data and
other documents as may be necessary for the proper administration of
the Plan;
(5) To prepare and distribute to all Plan Participants and
Beneficiaries information concerning the Plan and their rights under
the Plan, including, but not limited to, all information which is
required to be distributed by the Act, the regulations thereunder, or
by any other applicable law;
(6) To file with the Secretary of Labor such reports and
additional documents as may be required by the Act and regulations
issued thereunder, including, but not limited to, summary plan
description, modifications and changes, annual reports, terminal
reports and supplementary reports;
(7) To file with the Secretary of the Treasury all reports and
information required to be filed by the Internal Revenue Code, the
Act and regulations issued under each;
(8) To do all things necessary to operate and administer the
Plan in accordance with its provisions and in compliance with
applicable provisions of federal law; and
(9) To appoint and remove the Trustee.
(d) To enable the Committee to perform its functions, the Employer shall
supply full and timely information of all matters relating to the compensation
and length of service of all Participants, their retirement, death or other
cause of termination of employment, and such other pertinent facts as the
Committee may require. The Committee shall advise the Trustee of such facts and
issue to the Trustee such instructions as may be required by the Trustee in the
administration of the Plan. The Committee and the Employer shall be entitled to
rely upon all certificates and reports made by a Certified Public Accountant
selected or approved by the Employer. The Committee, the Employer and its
officers shall be fully protected in respect of any action suffered by them in
good faith in reliance upon the advice or opinion of any accountant or attorney,
and all action so taken or suffered shall be conclusive upon each of them and
upon all other persons interested in the Plan.
10.5 Authorized Officer. The Authorized Officer shall have authority to amend
the Plan as recommended by legal counsel in order to comply with changes in the
<PAGE>
law that are necessary to maintain the tax-qualified status of the Plan, and to
make such other amendments to the Plan whether or not they materially increase
the costs associated with the Plan as he or she deems appropriate, necessary,
advisable or convenient, and to amend or terminate the Trust Agreement.
10.6 Standard of Fiduciary Duty. Any Fiduciary, or any person designated by a
Fiduciary to carry out fiduciary responsibilities with respect to the Plan,
shall discharge his duties solely in the interests of the Participants, Former
Participants and Beneficiaries for the exclusive purpose of providing them with
benefits and defraying the reasonable expenses of administering the Plan. Any
Fiduciary shall discharge his duties with the care, skill, prudence and
diligence under the circumstances then prevailing that a prudent man acting in a
like capacity and familiar with such matter would use in the conduct of an
enterprise of a like character and with like aims. Any Fiduciary shall discharge
his duties in accordance with the documents and instruments governing the Plan
insofar as such documents and instruments are consistent with the provisions of
the Act. Notwithstanding any other provisions of the Plan, no Fiduciary shall be
authorized to engage in any transaction which is prohibited by Sections 408 and
2003(a) of the Act or Section 4975 of the Code in the performance of its duties
hereunder.
10.7 Claims Procedure. Any Participant, Former Participant, Beneficiary, or
Spouse or authorized representative thereof (hereinafter referred to as
"Claimant"), may file a claim for benefits under the Plan by submitting to the
Committee a written statement describing the nature of the claim and requesting
a determination of its validity under the terms of the Plan. Within sixty (60)
days after the date such claim is received by the Committee, it shall issue a
ruling with respect to the claim.
If special circumstances require an extension of time for processing, the
Committee shall send the Claimant written notice of the extension prior to the
termination of the 60-day period. In no case, however, shall the extension of
time delay the Committee's decision on such appeal request beyond one hundred
twenty (120) days following receipt of the actual request.
If the claim is wholly or partially denied, written notice shall be
furnished to the Claimant, which notice shall set forth in a manner calculated
to be understood by the Claimant:
(a) The specific reason or reasons for denial;
(b) Specific reference to pertinent Plan provisions on
which the denial is based;
<PAGE>
(c) A description of any additional material or information
necessary for the Claimant to perfect the claim and an explanation of
why such material or information is necessary; and
(d) An explanation of the claims review procedures.
Any Claimant whose claim for benefits has been denied may appeal such
denial by resubmitting to the Committee a written statement requesting a further
review of the decision within one hundred eighty (180) days of the date the
Claimant receives notice of such denial. Such statement shall set forth the
reasons supporting the claim, the reasons such claim should not have been
denied, and any other issues or comments which the Claimant deems appropriate
with respect to the claim.
If the Claimant shall request in writing, the Committee shall make copies
of the Plan documents pertinent to his claim available for examination of the
Claimant.
Within sixty (60) days after the request for further review is received,
the Committee shall review its determination of benefits and the reasons
therefor and notify the Claimant in writing of its final decision.
If special circumstances require an extension of time for processing, the
Committee shall send the Claimant written notice of the extension prior to the
termination of the 60-day period. In no case, however, shall the extension of
time delay the Committee's decision on such appeal request beyond one hundred
twenty (120) days following receipt of the actual request.
Such written notice shall include specific reasons for the decision,
written in a manner calculated to be understood by the Claimant, with specific
references to the pertinent Plan provisions on which the decision is based.
10.8 Indemnification of Committee. To the extent permitted under the Act, the
Plan shall indemnify the Board, the Committee and the Authorized Officer against
any cost or liability which they may incur in the course of administering the
Plan and executing the duties assigned pursuant to the Plan except for costs or
liabilities attributable to gross and intentional negligence. The Company shall
indemnify the Committee, the Authorized Officer and the members of the Board
against any personal liability or cost not provided for in the preceding
sentence which they may incur as a result of any act or omission in relation to
the Plan or its Participants except for costs or liabilities attributable to
gross and intentional negligence. The Company may purchase fiduciary liability
insurance to insure its obligation under this Section.
<PAGE>
ARTICLE 11
AMENDMENT AND TERMINATION
11.1 Right to Amend. The Company intends for the Plan to be permanent so long as
the corporation exists; however, it reserves through action of the Board (or
through action of the Authorized Officer to amend those items described in
Section 10.5) the right to modify, alter, or amend this Plan or the Trust
Agreement, from time to time, to any extent that it may deem advisable,
including, but not limited to any amendment deemed necessary to insure the
continued qualification of the Plan under Sections 40l(a) and 401(k) of the Code
or to insure compliance with the Act; provided, however, that the Company shall
not have the authority to amend this Agreement in any manner which will:
(a) Permit any part of the Fund (other than such part as is required to
pay taxes and administrative expenses) to be used for or diverted to purposes
other than for the exclusive benefit of the Participants or their Beneficiaries;
(b) Cause or permit any portion of the funds to revert to or become the
property of the Employer; or
(c) Change the duties, liabilities, or responsibilities of the Trustee
without its prior written consent.
See Section 16.11(c) regarding the inability of an Affiliated Sponsor to
amend or terminate the Plan.
11.2 Termination and Discontinuance of Contributions. The provisions of Section
11.1 to the contrary notwithstanding, the Company shall have the right at any
time and for any reason to terminate this Plan (hereinafter referred to as "Plan
Termination"). Upon Plan Termination, the Committee shall direct the Trustee
with reference to the disposition of the Fund, after payment of any expenses
properly chargeable against the Fund. The Trustee shall distribute all amounts
held in the Fund to the Participants and others entitled to Distributions based
on each Participant's Account balance in the Plan. In the event that this Plan
is partially terminated, then the provisions of this Section 11.2 shall apply,
but solely with respect to the Employees affected by the partial termination.
The termination of sponsorship of the Plan by any Affiliated Sponsor shall not
affect the sponsorship of the Plan by the Company or any other Affiliated
Sponsor.
11.3 IRS Approval of Termination. Notwithstanding Section 11.2, the Trustee
shall not be required to make any Distribution from this Plan in the event of
complete or partial termination until the authorized officials of the Internal
Revenue Service shall have determined that there will be no liability against
the Trustee by reason of such Distribution.
<PAGE>
ARTICLE 12
SPECIAL DISCRIMINATION RULES
12.1 Definitions.
Actual Contribution Percentage or ACP shall mean the ratio (expressed as a
percentage) of (i) the sum of the Employer Matching Contributions on behalf of
the Participant for the Plan Year and, to the extent permitted in Treasury
Regulations and elected by the Employer, the Participant's Qualified Elective
Deferrals and Qualified Nonelective Contributions ("Aggregate Contributions") to
(ii) the Participant's Compensation for the Plan Year. The Employer, on an
annual basis, may elect to include or not to include Qualified Elective
Deferrals and Qualified Nonelective Contributions in computing the ACP for a
Plan Year. An Employer may elect on an annual basis to count a Participant's
Employer Matching Contribution toward satisfying the required minimum
contribution under Section 15.3 (minimum contribution for Non-Key Employees in a
top-heavy plan) in lieu of including such contributions in the ACP. If a
Participant (as defined below) does not receive an allocation of Employer
Contributions for a Plan Year, such Participant's ACP for the Plan Year shall be
zero.
Actual Deferral Percentage or ADP shall mean the ratio (expressed as a
percentage) of (i) the sum of Pre-Tax Contributions on behalf of a Participant
for the Plan Year (excluding any Excess Deferrals by a Non-highly Compensated
Employee) and, to the extent permitted in Treasury Regulations and elected by
the Employer, the Participant's Qualified Nonelective Contributions to
("Aggregate Deferrals") (ii) the Participant's Compensation for the Plan Year.
The Employer, on an annual basis, may elect to include or not to include
Employer Matching Contributions (to the extent such contributions are "qualified
matching contributions" under Section 1.401(k)-1(b)(5) of the Treasury
Regulations) and Qualified Nonelective Contributions in computing the ADP for a
Plan Year. In the case of a Participant (as defined below) who does not make a
Pre-Tax Contribution for a Plan Year and is not allocated a Qualified
Nonelective Contribution for such Plan Year, such Participant's ADP for the Plan
Year shall be zero.
Average Actual Contribution Percentage shall mean the average (expressed
as a percentage) of the Actual Contribution Percentages of the Participants in a
group. The percentage shall be rounded to the nearest one-hundredth of one
percent (four decimal places).
Average Actual Deferral Percentage shall mean the average (expressed as a
percentage) of the Actual Deferral Percentages of the Participants in a group.
The percentage shall be rounded to the nearest one-hundredth of one percent
(four decimal places).
<PAGE>
Combined ADP and ACP Test shall have the meaning as defined in Section
12.9.
Compensation for purposes of this Section 12 shall be that definition
selected by the Committee that satisfies the requirements of Code Sections
414(s) and 401(a)(17). Such definition may change from year to year but must
apply uniformly among all Eligible Employees being tested under the Plan for a
given Plan Year and among all Employees being tested under any other plan that
is aggregated with this Plan during the Plan Year. If no such definition is
elected by the Committee (either formally or informally), Compensation shall
mean Compensation as defined in Article 2.
Employer Matching Contributions. For purposes of this Article 12, an
Employer Matching Contribution for a particular Plan Year includes only those
contributions that are (i) allocated to the Participant's Account under the Plan
as of any date within such Plan Year, (ii) contributed to the Trust no later
than the end of the 12-month period following the close of such Plan Year, and
(iii) made on account of such Participant's Pre-Tax Contributions for the Plan
Year.
Excess Deferrals shall have that meaning as defined in Section 12.2.
Excess ACP Contributions shall have that meaning as defined in Section
12.8.
Excess ADP Deferrals shall have that meaning as defined in Section 12.5.
Highly Compensated Employee. See Article 13.
Maximum Combined Percentage shall have the meaning as defined in Section
12.9(c).
Non-highly Compensated Employee. See Article 13.
Participant. For purposes of this Article 12, a Participant shall mean any
Eligible Employee who (i) is eligible to receive an allocation of an Employer
Matching Contribution, even if no Employer Matching Contribution is allocated
due to the Eligible Employee's failure to make a required Pre-Tax Contribution,
(ii) is eligible to make a Pre-Tax Contribution, including an Eligible Employee
whose right to make Pre-Tax Contribution has been suspended because of an
election not to participate or a hardship distribution, or (iii) is unable to
receive an Employer Matching Contribution or make a Pre-Tax Contribution because
his Compensation is less than a stated amount.
Pre-Tax Contributions. For purposes of this Article 12, a Pre-Tax
Contribution is taken into account only if the contribution (i) is allocated to
the Participant's Account under the terms of the Plan as of any date within the
<PAGE>
Plan Year, and (ii) relates to Compensation that would have been received by the
Participant during the Plan Year or within 2 1/2 months after the Plan Year but
for the deferral election. A Pre-Tax Contribution is considered to be allocated
as of a date within a Plan Year only if the allocation is not contingent on
participation in the Plan or performance of service after the Plan Year to which
the Pre-Tax Contribution relates.
Qualified Elective Deferral shall mean Pre-Tax Contributions designated by
the Committee as Qualified Elective Deferrals in order to meet the ACP testing
requirements of Section 12.6. In addition, the following requirements must be
satisfied:
(a) The aggregate of all Pre-Tax Contributions for the Plan Year
(including the Qualified Elective Deferrals) must satisfy the ADP
testing requirements set forth in Section 12.3(a).
(b) The aggregate of all Pre-Tax Contributions for the Plan Year
(excluding the Qualified Elective Deferrals) must satisfy the ADP
testing requirements set forth in Section 12.3(a).
(c) Qualified Elective Deferrals must satisfy all other
provisions of this Plan applicable to Pre-Tax Contributions and shall
remain part of the Participant's Pre-Tax Contribution Account.
(d) Except as provided by this definition, Qualified Elective
Deferrals shall be excluded in determining whether any other
contribution or benefit satisfies the nondiscrimination requirements
of Code Sections 401(a)(4) and 401(k)(3).
Qualified Nonelective Contribution shall mean an Employer contribution
designated by the Committee as a Qualified Nonelective Contribution in order to
meet the ADP testing requirements of Section 12.3 or the ACP testing
requirements of Section 12.6. In addition, the following requirements must be
satisfied:
(a) The Qualified Nonelective Contribution, whether or not used
to satisfy the requirements of Sections 12. 3 or 12.6, must meet the
requirements of Code Section 401(a)(4).
(b) Qualified Nonelective Contributions which are taken into
account in order to meet the requirements of Section 12.3 or 12.6 (as
applicable) shall not be counted in determining whether the testing
requirements of any of such other Sections are met.
(c) The Qualified Nonelective Contributions shall be subject to
all provisions of this Plan applicable to Pre-Tax Contributions
<PAGE>
(except that Qualified Nonelective Contributions cannot be
distributed in a hardship distribution).
(d) Except as provided in this paragraph, the Qualified
Nonelective Contributions shall be excluded in determining whether
any other contribution or benefit satisfies the nondiscrimination
requirements of Code Sections 401(a)(4) and 401(k)(3).
12.2 Limit on Pre-Tax Contributions.
(a) Notwithstanding any other provision of the Plan to the contrary, the
aggregate of a Participant's Pre-Tax Contributions during a calendar year may
not exceed the amount established by the Secretary of the Treasury pursuant to
Code Section 402(g) ($10,500 in 2000). Any Pre-Tax Contributions in excess of
the foregoing limit ("Excess Deferral"), plus any income and minus any loss
allocable thereto, may be distributed to the applicable Participant no later
than April 15 following the calendar year in which the Pre-Tax Contributions
were made.
(b) Any Participant who has an Excess Deferral during a calendar year may
receive a distribution of the Excess Deferral during such calendar year plus any
income or minus any loss allocable thereto, provided (1) the Participant
requests (or is deemed to request) the distribution of the Excess Deferral, (2)
the distribution occurs after the date the Excess Deferral arose, and (3) the
Committee designates the distribution as a distribution of an Excess Deferral.
(c) If a Participant makes a Pre-Tax Contribution under this Plan and in
the same calendar year makes a contribution to a Code Section 401(k) plan
containing a cash or deferred arrangement (other than this Plan), a Code Section
408(k) plan (simplified employee pension plan) or a Code Section 403(b) plan
(tax sheltered annuity) and, after the return of any Excess Deferral pursuant to
Section 12.2(a) and (b) the aggregate of all such Pre-Tax Contributions and
contributions exceed the limitations contained in Code Section 402(g), then such
Participant may request that the Committee return all or a portion of the
Participant's Pre-Tax Contributions for the calendar year plus any income and
minus any loss allocable thereto. The amount by which such Pre-Tax Contributions
and contributions exceed the Code Section 402(g) limitations will also be known
as an Excess Deferral.
(d) Any request for a return of Excess Deferrals arising out of
contributions to a plan described in Section 12.2(c) above which is maintained
by an entity other than the Employer must:
(1) be made in writing;
<PAGE>
(2) be submitted to the Committee not later than the March 1
following the Plan Year in which the Excess Deferral arose;
(3) specify the amount of the Excess Deferral; and,
(4) contain a statement that if the Excess Deferral is not
distributed, it will, when added to amounts deferred under other
plans or arrangements described in Sections 401(k), 408(k),or 403(b)
of the Code, exceed the limit imposed on the Participant by Section
402(g) of the Code for the year in which the Excess Deferral
occurred.
In the event an Excess Deferral arises out of contributions to a plan
(including this Plan) which is maintained by the Employer, the Participant
making the Excess Deferral shall be deemed to have requested a return of the
Excess Deferral.
(e) Pre-Tax Contributions may only be returned to the extent necessary to
eliminate a Participant's Excess Deferral. Excess Deferrals returned to the
Participant under this Section 12.2 shall not be treated as annual additions
under the Plan. In no event shall the returned Excess Deferrals for a particular
calendar year exceed the Participant's aggregate Pre-Tax Contributions for such
calendar year.
(f) The income or loss allocable to a Pre-Tax Contribution that is
returned to a Participant pursuant to Section 12.2(a) or (c) shall be determined
by multiplying the income or loss allocable to the Participant's Account for the
calendar year in which the Excess Deferral arose by a fraction. The numerator of
the fraction is the Excess Deferral. The denominator of the fraction is the
value of the Participant's Account balance on the last day of the calendar year
in which the Excess Deferral arose reduced by any income allocated to the
Participant's Account for such calendar year and increased by any loss allocated
to the Participant's Account for such calendar year.
(g) The income or loss allocable to an Excess Deferral that is returned to
a Participant pursuant to Section 12.2(b) shall be determined using any
reasonable method adopted by the Plan to measure income earned or loss incurred
during the Plan Year or any other method authorized by the Internal Revenue
Service to compute the income earned or loss incurred for the period commencing
on January 1 of the calendar year in which the Pre-Tax Contribution was made and
ending on the date the Excess Deferral was distributed.
(h) Any Employer Matching Contribution allocable to an Excess Deferral
that is returned to a Participant pursuant to this Section 12.2 shall be
forfeited notwithstanding the provisions of Article 7 (vesting). For this
<PAGE>
purpose, however, the Pre-Tax Contributions that are returned to the Participant
as an Excess Deferral shall be deemed to be first those Pre-Tax Contributions
for which no Employer Matching Contribution was made and second those Pre-Tax
Contributions for which an Employer Matching Contribution was made. Accordingly,
if the Pre-Tax Contributions that are returned to the Participant as Excess
Deferrals were not matched, no Employer Matching Contribution will be forfeited.
12.3 Average Actual Deferral Percentage.
(a) If required to be performed, the Average Actual Deferral Percentage
for Highly Compensated Employees for each Plan Year and the Average Actual
Deferral Percentage for Non-highly Compensated Employees for the same Plan Year
must satisfy one of the following tests:
(1) The Average Actual Deferral Percentage for Participants who
are Highly Compensated Employees for the Plan Year shall not exceed
the Average Actual Deferral Percentage for Participants who are
Non-highly Compensated Employees for the Plan Year multiplied by
1.25; or
(2) The excess of the Average Actual Deferral Percentage for
Participants who are Highly Compensated Employees for the Plan Year
over the Average Actual Deferral Percentage for Participants who are
Non-highly Compensated Employees for the Plan Year is not more than
two percentage points, and the Average Actual Deferral Percentage for
Participants who are Highly Compensated Employees is not more than
the Average Actual Deferral Percentage for Participants who are
Non-highly Compensated Employees multiplied by 2.0.
(b) The permitted disparity between the Average Actual Deferral Percentage
for Highly Compensated Employees and the Average Actual Deferral Percentage for
Non-Highly Compensated Employees may be further reduced as required by Section
12.9.
(c) If at the end of the Plan Year, the Plan does not comply with the
provisions of Section 12.3(a), the Employer may do any or all of the following,
except as otherwise provided in the Code or Treasury Regulations:
(1) Distribute Aggregate Deferrals to certain Highly Compensated
Employees as provided in Section 12.5; or
(2) Make a Qualified Nonelective Contribution on behalf of any
or all of the Non-highly Compensated Employees and aggregate such
contributions with the Non-highly Compensated Employees' Pre-Tax
<PAGE>
Contributions Deferrals as provided in Section 12. 1 (definition of
ADP).
12.4 Special Rules For Determining Average Actual Deferral Percentage.
(a) The Actual Deferral Percentage for any Highly Compensated Employee for
the Plan Year who is eligible to have Pre-Tax Contributions allocated to his
Account under two or more arrangements described in Section 401(k) of the Code
that are maintained by an Employer or its Affiliates shall be determined as if
such Pre-Tax Contributions were made under a single arrangement.
(b) If two or more plans maintained by the Employer or its Affiliates are
treated as one plan for purposes of the nondiscrimination requirements of Code
Section 401(a)(4) or the coverage requirements of Code Section 410(b) (other
than for purposes of the average benefits test), all Pre-Tax Contributions that
are made pursuant to those plans shall be treated as having been made pursuant
to one plan.
(c) The determination and treatment of the Aggregate Deferrals and Actual
Deferral Percentage of any Participant shall be in accordance with such other
requirements as may be prescribed from time to time in Treasury Regulations.
(d) Notwithstanding anything to the contrary in Section 12.3 or 12.4,
effective January 1, 1997, the Actual Deferral Percentage of Non-highly
Compensated Employees shall be calculated using data from the prior Plan Year.
12.5 Distribution of Excess ADP Deferrals.
(a) Effective January 1, 1997, Aggregate Deferrals exceeding the
limitations of Section 12.3(a) ("Excess ADP Deferrals") and any income or loss
allocable to such Excess ADP Deferral shall be designated by the Committee as
Excess ADP Deferrals and shall be distributed to Highly Compensated Employees
whose Accounts were credited with the largest dollar amount of Pre-Tax
Contributions. In determining the amount of Excess ADP Deferrals to be
distributed to each Highly Compensated Employee, the Committee shall reduce the
amount of Pre-Tax Contribution for each Highly Compensated Employee as follows:
(1) The Aggregate Deferrals made by the Highly Compensated
Employee(s) with the highest dollar amount of Aggregate Deferrals
will be reduced until all Excess ADP Deferrals have been distributed
or until equal with the second highest amount of Aggregate Deferrals
under the Plan, whichever comes first; then
<PAGE>
(2) Step (1) shall be repeated with respect to the second and
successive highest Aggregate Deferrals under the Plan until the Plan
has distributed all Excess ADP Deferrals.
(b) If these distributions are made, the Actual Deferral Percentage is
treated as meeting the nondiscrimination test of Section 401(k)(3) of the Code
regardless of whether the Actual Deferral Percentage, if recalculated after
distributions, would satisfy Section 401(k)(3) of the Code.
(c) The above procedures are used for the purposes of recharacterizing
excess contributions under Section 401(k)(8)(A)(ii) of the Code.
(d) For purposes of Section 401(m)(9) of the Code, if a corrective
distribution of Excess ADP Deferrals has been made, or a recharacterization has
occurred, the Actual Deferral Percentage for Highly Compensated Employees is
deemed to be the largest amount permitted under Section 401(k)(3) of the Code.
(e) To the extent administratively possible, the Committee shall
distribute all Excess ADP Deferrals and any income or loss allocable thereto
prior to 2 1/2 months following the end of the Plan Year in which the Excess ADP
Deferrals arose. In any event, however, the Excess ADP Deferrals and any income
or loss allocable thereto shall be distributed prior to the end of the Plan Year
following the Plan Year in which the Excess ADP Deferrals arose. Excess ADP
Deferrals shall be treated as annual additions under the Plan.
(f) The income or loss allocable to Excess ADP Deferrals shall be
determined by multiplying the income or loss allocable to the Participant's
Account for the Plan Year in which the Excess ADP Deferrals arose by a fraction.
The numerator of the fraction is the Excess ADP Deferral. The denominator of the
fraction is the value of the Participant's Account balance on the last day of
the Plan Year in which the Excess ADP Deferrals arose reduced by any income
allocated to the Participant's Account for such Plan Year and increased by any
loss allocated to the Participant's Account for the Plan Year.
(g) If an Excess Deferral has been distributed to the Participant pursuant
to Section 12.2(a) or (b) for any taxable year of a Participant, then any Excess
ADP Deferral allocable to such Participant for the same Plan Year in which such
taxable year ends shall be reduced by the amount of such Excess Deferral.
(h) Distribution of Excess ADP Deferrals to Participants described in this
Section 12.5 shall be made in accordance with the provisions of Treasury
Regulation Section 1.401(k)-1(f)(5)(ii) or any successor Treasury
Regulation thereto.
<PAGE>
(i) Any Employer Matching Contribution allocable to an Excess ADP Deferral
that is returned to the Participant pursuant to this Section 12.5 shall be
forfeited notwithstanding the provisions of Article 7 (vesting). For this
purpose, however, Pre-Tax Contributions that are returned to the Participant
shall be deemed to be first those Pre-Tax Contributions for which no Employer
Matching Contribution was made and second those Pre-Tax Contributions for which
an Employer Matching Contribution was made. Accordingly, unmatched Pre-Tax
Contributions shall be returned as an Excess ADP Deferral before matched Pre-Tax
Contributions.
12.6 Average Actual Contribution Percentage.
(a) If required to be performed, the Average Actual Contribution
Percentage for Highly Compensated Employees for each Plan Year and the Average
Actual Contribution Percentage for Non-highly Compensated Employees for the same
Plan Year must satisfy one of the following tests:
(1) The Average Actual Contribution Percentage for Participants
who are Highly Compensated Employees for the Plan Year shall not
exceed the Average Actual Contribution Percentage for Participants
who are Non-highly Compensated Employees for the Plan Year multiplied
by 1.25; or
(2) The excess of the Average Actual Contribution Percentage for
Participants who are Highly Compensated Employees for the Plan Year
over the Average Actual Contribution Percentage for Participants who
are Non-highly Compensated Employees for the Plan Year is not more
than two percentage points, and the Average Actual Contribution
Percentage for Participants who are Highly Compensated Employees is
not more than the Average Actual Contribution Percentage for
Participants who are Non-highly Compensated Employees multiplied by
2.0.
(b) If at the end of the Plan Year, the Plan does not comply with the
provisions of this Section 12.6(a), the Employer may do any or all of the
following in order to comply with such provision as applicable (except as
otherwise provided in the Code or in Treasury Regulations):
(1) Aggregate Qualified Elective Deferrals with the Employer
Matching Contributions of Non-highly Compensated Employees as
provided in Section 12.1 (definition of ACP).
(2) Distribute or forfeit Employer Matching Contributions to
certain Highly Compensated Employees as provided in Section 12.8.
<PAGE>
(3) Make a Qualified Nonelective Contribution on behalf of any
or all of the Non-highly Compensated Employees and aggregate such
contributions with the Non-highly Compensated Employees' Employer
Matching Contributions as provided in Section 12.1 (definition of
ACP).
12.7 Special Rules For Determining Average Actual Contribution Percentages.
(a) The Actual Contribution Percentage for any Highly Compensated Employee
for the Plan Year who is eligible to have Employer Matching Contributions
allocated to his Account under two or more arrangements described in Sections
401(a) or 401(m) of the Code that are maintained by an Employer or its
Affiliates shall be determined as if such contributions were made under a single
arrangement.
(b) If two or more plans maintained by the Employer or its Affiliates are
treated as one plan for purposes of the nondiscrimination requirements of Code
Section 401(a)(4) or the coverage requirements of Code Section 410(b) (other
than for purposes of the average benefits test), all Aggregate Contributions
that are made pursuant to those plans shall be treated as having been made
pursuant to one plan.
(c) The determination and treatment of the Actual Contribution Percentage
of any Participant shall satisfy such other requirements as may be prescribed by
the Secretary of the Treasury.
(d) Notwithstanding anything to the contrary in Section 12.6 or 12.7,
effective January 1, 1997, the Actual Contribution Percentage of Non-highly
Compensated Employees shall be calculated using data from the current Plan Year.
12.8 Distribution of Excess ACP Contributions.
(a) Effective January 1, 1997, Aggregate Contributions exceeding the
limitations of Section 12.6(a) ("Excess ACP Contributions") and any income or
loss allocable to such Excess ACP Contribution may be designated by the
Committee as Excess ACP Contributions and may be distributed in the Plan Year
following the Plan Year in which the Excess ACP Contributions arose to those
Highly Compensated Employees whose Accounts were credited with largest amount of
Aggregate Contributions during the preceding Plan Year. The amount of Aggregate
Contributions to be distributed to a Highly Compensated Employee shall be
determined as follows:
(1) The Aggregate Contributions of the Highly Compensated
Employee with the highest dollar amount of Aggregate Contributions
shall be reduced until all Excess ACP Contributions have been
<PAGE>
distributed or until such Aggregate Contributions equal the dollar
amount of Aggregate Contributions of the Highly Compensated Employee
with the next highest dollar amount of contributions, whichever comes
first.
(2) Step (1) shall be repeated with respect to the second and
successive highest Aggregate Contributions under the Plan until the
Plan has distributed all Excess ACP Contributions.
(b) If these distributions are made, the Actual Contribution Percentage is
treated as meeting the nondiscrimination test of Section 401(m)(2) of the Code
regardless of whether the Actual Contribution Percentage, if recalculated after
distributions, would satisfy Section 401(m)(2) of the Code.
(c) For purposes of Section 401(m)(9) of the Code, if a corrective
distribution of Excess ACP Contributions has been made, the Actual Contribution
Percentage for Highly Compensated Employees is deemed to be the largest amount
permitted under Section 401(m)(2) of the Code.
(d) To the extent administratively possible, the Committee shall
distribute all Excess ACP Contributions and any income or loss allocable thereto
prior to 2 1/2 months following the end of the Plan Year in which the Excess ACP
Contributions arose. In any event, however, the Excess ACP Contributions and any
income or loss allocable thereto shall be distributed prior to the end of the
Plan Year following the Plan Year in which the Excess ACP Contributions arose.
(e) The income or loss allocable to Excess ACP Contributions shall be
determined by multiplying the income or loss allocable to the Participant's
Account for the Plan Year in which the Excess ACP Contribution arose by a
fraction. The numerator of the fraction is the Excess ACP Contributions. The
denominator of the fraction is the value of the Participant's Account on the
last day of the Plan Year reduced by any income allocated to the Participant's
Account by such Plan Year and increased by any loss allocated to the
Participant's Account for the Plan Year.
(f) Amounts distributed to Highly Compensated Employees under this Section
12.8 shall be treated as annual additions with respect to the Employee who
received such amount.
(g) Distribution of Excess ACP Contributions to Participants described in
Section 12.8(c) shall be made in accordance with the provisions of Treasury
Regulation Section 1.401(m)-1(e)(2)(iii) or any successor Treasury Regulations
thereto. Excess ACP Contributions may be distributed to Highly Compensated
Employees only to the extent such Excess ACP Contributions are vested. Excess
ACP Contributions which are not vested shall be forfeited if correction of such
Excess ACP Contribution is made pursuant to this Section 12.8. For this purpose,
<PAGE>
Excess ACP Contributions shall first be comprised of vested Employer Matching
Contributions and second of non-vested Employer Matching Contributions.
12.9 Combined ACP and ADP Test.
(a) The Plan must satisfy the Combined ACP and ADP Test described in this
Section 12.9 only if (1) the Average Actual Deferral Percentage of the Highly
Compensated Employees exceeds 125% of the Average Actual Deferral Percentage of
the Non-highly Compensated Employees and (2) the Average Actual Contribution
Percentage of the Highly Compensated Employees exceeds 125% of the Average
Actual Contribution Percentage of the Non-highly Compensated Employees.
(b) The Combined ACP and ADP Test is satisfied if the sum of the Highly
Compensated Employees' Average Actual Deferral Percentage and Average Actual
Contribution Percentage is equal to or less than the Maximum Combined
Percentage defined in paragraph (c) below.
(c) The Maximum Combined Percentage shall be determined by adjusting the
Non-highly Compensated Employees' Average Actual Deferral Percentage and Average
Actual Contribution Percentage in the following manner:
(1) The greater of the two percentages shall be multiplied
by 1.25; and
(2) The lesser of the two percentages shall be increased by two
percentage points; however, in no event shall such adjusted
percentage exceed twice the original percentage.
The sum of (1) and (2) shall be the Maximum Combined Percentage.
Notwithstanding the foregoing, the Maximum Combined Percentage shall be
determined in the following manner if such calculation results in a higher
Maximum Combined Percentage than the formula specified above:
(1) The lesser of the Average Actual Deferral Percentage and
Average Actual Contribution Percentage of the Non-Highly Compensated
Employees shall be multiplied by 1.25; and
(2) The greater of such two percentages shall be increased by
two percentage points; however, in no event shall such percentage
exceed twice the original percentage.
(d) In the event the Plan does not satisfy the Combined ADP and ACP Test,
the Highly Compensated Employees' Average Actual Contribution Percentage shall
<PAGE>
be decreased by either distributing Employer Matching Contributions to certain
Highly Compensated Employees by using the procedures described in Section 12.8
or by making a Qualified Nonelective Contribution as provided in Section
12.6(b)(3) until the sum of such percentage and the Highly Compensated
Employees' Average Actual Deferral Percentage equals the Maximum Combined
Percentage.
(e) If Employer Matching Contributions are distributed to certain Highly
Compensated Employees in order to satisfy the Combined ADP and ACP Test, income
or loss allocable to such Employer Matching Contributions shall also be
distributed.
(f) To the extent administratively possible, the Committee shall
distribute the Employer Matching Contributions (if applicable) and allocable
income or loss prior to 2 1/2 months following the end of the Plan Year for
which the Combined ADP and ACP Test is computed. In any event, however, such
Employer Matching Contributions (if applicable) and allocable income or loss
shall be distributed by the end of the Plan Year following the Plan Year for
which the Combined ADP and ACP Test is computed. Employer Matching Contributions
that are distributed pursuant to this Section 12.9 shall be treated as annual
additions under the Plan.
(g) The income or loss allocable to returned Employer Matching
Contributions shall be determined using the same procedures as Section 12.5(c).
12.10 Order of Applying Certain Sections of Article 12. In applying the
provisions of this Article 12, the determination and distribution of Excess
Deferrals shall be made first, the determination and elimination of Excess ACP
Deferrals shall be made second, the determination and elimination of Excess ADP
Contributions shall be made third and finally the determination and any
necessary adjustment related to the Combined ADP and ACP Test shall be made.
<PAGE>
ARTICLE 13
HIGHLY COMPENSATED EMPLOYEES
13.1 In General. Effective January 1, 1997, for the purposes of this Plan, the
term "Highly Compensated Employee" is any active Employee described in Section
13.2 below and any Former Employee described in Section 13.3 below. Various
definitions used in this Article are contained in Section 13.4. A Non-Highly
Compensated Employee is an Employee who is not a Highly Compensated Employee.
13.2 Highly Compensated Employees.
(a) An Employee is a Highly Compensated Employee if the Employee:
(1) is a 5 Percent Owner at any time during the Determination
Year or the Look Back Year; or
(2) receives Compensation in excess of $80,000 during the Look
Back Year and, if the Employer so elects from year to year, is a
member of the Top Paid Group.
(b) The dollar amount described in (2) above shall be increased annually
as provided in Code Section 414(q)(1). For the Plan Year beginning on January 1,
2000, the dollar amount is $85,000.
13.3 Former Highly Compensated Employee. A Former Employee is a Highly
Compensated Employee if (applying the rules of Section 13.2) the Former Employee
was a Highly Compensated Employee during a Separation Year or during any
Determination Year ending on or after the Former Employee's 55th birthday.
13.4 Definitions. The following special definitions shall apply to this Article
13:
Compensation, for purposes of this Article 13, shall mean Compensation as
defined in Code section 415(c)(3) (and not modified by Treasury Regulation
1.414(s)-1(c)(3)). In addition, Compensation shall include compensation which is
not includable in the Participant's IRS Form W-2 (Box 1) by reason of Code
Section 402(a)(8) (employee pre-tax contributions under a Code Section 401(k)
plan) or Code Section 125 (salary deferrals under a cafeteria plan).
Determination Year shall mean the Plan Year for which the ADP is computed.
Employer for purposes of this Article 13 shall mean the Company and its
Affiliates.
<PAGE>
5 Percent Owner shall mean any Employee who owns or is deemed to own
(within the meaning of Code Section 318), more than five percent of the value of
the outstanding stock of the Employer or stock possessing more than five percent
of the total combined voting power of the Employer.
Former Employee shall mean an Employee (i) who has incurred a Termination
Date or (ii) who remains employed by the Employer but who has not performed
services for the Employer during the Determination Year (e.g., an Employee on
Authorized Leave of Absence).
Look Back Year shall mean the Plan Year preceding the Determination Year.
Separation Year shall mean any of the following years:
(a) An Employee who incurs a Termination Date shall have a
Separation Year in the Determination Year in which such Termination
Date occurs;
(b) An Employee who remains employed by the Employer but who
temporarily ceases to perform services for the Employer (e.g., an
Employee on Authorized Leave of Absence) shall have a Separation Year
in the calendar year in which he last performs services for the
Employer;
(c) An Employee who remains employed by the Employer but whose
Compensation for a calendar year is less than 50% of the Employee's
average annual Compensation for the immediately preceding three
calendar years (or the Employee's total years of employment, if less)
shall have a Separation Year in such calendar year. However, such
Separation Year shall be ignored if the Employee remains employed by
the Employer and the Employee's Compensation returns to a level
comparable to the Employee's Compensation immediately prior to such
Separation Year.
Top Paid Group shall mean the top 20% of all Employees ranked on the basis
of Compensation received from the Employer during the applicable year. The
number of employees in the Top Paid Group shall be determined by ignoring
employees who are non-resident aliens, Employees who do not perform services for
the Employer during the applicable year, Employees who do not satisfy the age
and service exclusion provided in applicable Treasury Regulations and Employees
who are covered by a collective bargaining agreement as provided in applicable
Treasury Regulations.
13.5 Other Methods Permissible. To the extent permitted by the Code, judicial
decisions, Treasury Regulations and IRS pronouncements, the Committee may
<PAGE>
(without further amendment to this Plan) take such other steps and actions or
adopt such other methods or procedures (in addition to those methods and
procedures described in this Article 13) to determine and identify Highly
Compensated Employees (including adopting alternative definitions of
Compensation which satisfy Code Section 414(q)(7) and are uniformly applied).
<PAGE>
ARTICLE 14
MAXIMUM BENEFITS
14.1 General Rule.
(a) Notwithstanding any other provision of this Plan, for any Plan Year
beginning on or after January 1, 1995, the Annual Additions to a Participant's
Account, when combined with the Annual Additions to the Participant's Account
under all other Qualified individual account plans maintained by the Employer or
its Affiliates shall not exceed the lesser of (i) $30,000 or (ii) twenty-five
percent (25%) of the Participant's Compensation for such Plan Year (the "maximum
permissible amount").
(b) The Employer hereby elects that the Limitation Year for purposes of
Code Section 415 shall be the Plan Year.
(c) For purposes of determining the limit on Annual Additions under
paragraph (a) of this Section, the dollar limit described therein ($30,000)
shall be increased for each Plan Year to the extent permitted by law.
(d) If, as a result of (1) a reasonable error in determining the amount of
Pre-Tax Contributions that may be made with respect to any Participant under the
limits of this Section, (2) an allocation of forfeitures, (3) a reasonable error
in estimating a Participant's annual Compensation, or (4) other facts and
circumstances with respect to which the rules of Treasury Regulation Section
1.415-6(b)(6) are available, the Annual Additions allocated to a Participant's
Account exceeds the maximum permissible amount for a Limitation Year, the excess
("Excess Amount") will be disposed of in the manner described by one or more of
the following:
(1) Such portion of the Excess Amount which consists of Pre-Tax
Contributions and the earnings thereon will be distributed to the affected
Participant:
(2) If the Participant is covered by the Plan at the end of the
Limitation Year, the Excess Amount in the Participant's Account will be
used to reduce Employer Contributions (including any allocation of
Forfeitures) for such Participant in the next Limitation Year, and each
succeeding Limitation Year if necessary;
(3) The Excess Amount will be held unallocated in a suspense account.
The suspense account will be applied to reduce Employer Contributions for
all
<PAGE>
remaining Participants in the next Limitation Year, and each succeeding
Limitation Year, if necessary;
(4) The Excess Amount will be allocated and reallocated to other
eligible Participants in the Plan; provided, however, that if the
allocation or reallocation of the Excess Amount causes the Annual Additions
(including the reallocation of the Excess Amount) to exceed the maximum
permissible amount with respect to each Participant for the Limitation
Year, then the Excess Amount, or the portion remaining, will be held
unallocated in a suspense account and allocated and reallocated to the
Accounts of all eligible Participants (subject to the limitations of this
Section) for the next (or if necessary, subsequent) Limitation Year(s)
before any Employer or Employee Contribution may be made to the Plan for
that Limitation Year(s).
(5) If a suspense account is in existence at any time during a
Limitation Year pursuant to this Section, it will not participate in the
allocation of the Trust's investment gains and losses. If a suspense
account is in existence at any time during a particular Limitation Year,
all amounts in the suspense account must be allocated and reallocated to
Participants' Accounts before any contributions may be made to the Plan for
that Limitation Year. Excess Amounts (other than Excess Amounts which
consist of Pre-Tax Contributions and earnings thereon) may not be
distributed to Participants or Former Participants. In the event of
termination of the Plan, the suspense account shall revert to the Employer
to the extent it may not then be allocated to any Participant's Account.
(e) If the Participant is covered under another qualified defined
contribution plan maintained by an Employer during any limitation year, the
annual additions which may be credited to a Participant's account under this
Plan for any such limitation year shall not exceed the maximum permissible
amount reduced by the annual additions credited to a Participant's account under
all such plans for the same limitation year. If a Participant's annual additions
under this Plan and such other plans would result in an excess amount for a
limitation year, the excess amount will be deemed to consist of the annual
additions last allocated (and for this purpose, Employer Contributions shall be
deemed to be allocated after Pre-Tax Contributions). If an excess amount is
<PAGE>
allocated to a Participant on an allocation date of this Plan which coincides
with an allocation date of another plan, the excess amount attributed to this
Plan will be the product of
(1) the total excess amount as of such date, multiplied by
(2) the ratio of (A) the annual additions allocated to the Participant
for the limitation year as of such date under this Plan to (B) the total
annual additions allocated to the Participant for the limitation year as of
such date under this and all the other qualified defined contribution plans
maintained by the Employer.
Any excess amount attributed to this Plan will be disposed in the manner
described in this Section 14.1 above.
14.2 Definitions. For the purposes of this Article 14, the following definitions
shall apply:
(a) Annual Addition shall mean the sum of:
(1) Pre-Tax Contributions;
(2) Employer Contributions;
(3) Forfeitures; and
(4) Amounts described in Code Sections 415(l)(1) and 419A(d)(2).
Annual Additions shall not include any amounts credited to the
Participant's Account resulting from Rollover Contributions.
(b) Affiliates shall have that meaning contained in Article 2 except
that for purposes of determining who is an Affiliate the phrase "more than 50
percent" shall be substituted for the phrase "at least 80 percent" each place it
appears in Code Section 1563(a)(1).
(c) Compensation shall have the same meaning as defined in Article 13.
<PAGE>
ARTICLE 15
TOP HEAVY RULES
15.1 General. The provisions of this Article of the Plan shall become effective
in any Plan Year in which the Plan is determined to be Top Heavy and shall
supersede any conflicting provision of this Plan.
15.2 Definitions.
(a) Top Heavy. The Plan shall be Top Heavy for the Plan Year if, as of the
Valuation Date which coincides with or immediately precedes the Determination
Date, the value of the Participant Accounts of Key Employees exceeds 60% of the
value of all Participant Accounts. If the Employer maintains more than one plan,
all plans in which any Key Employee participates and all plans which enable this
Plan to satisfy the anti-discrimination requirements of Code Sections 401(a)(4)
and 410 must be combined with this Plan ("Required Aggregation Group") for the
purposes of applying the 60% test described in the preceding sentence. Plans
maintained by the Employer which are not in the required aggregation group may
be combined at the Employer's election with this Plan for the purposes of
determining Top Heavy status if the combined plan satisfies the requirements of
Code Section 401(a)(4) and 410 ("Permissive Aggregation Group"). In determining
the value of Participant Accounts, all distributions made during the five-year
period ending on the Determination Date shall be included and any unallocated
Employer Contributions or forfeitures attributable to the Plan Year in which the
Determination Date falls shall also be included. The Account of (i) any Employee
who at one time was a Key Employee but who is not a Key Employee for any of the
five Plan Years ending on the Determination Date; and (ii) any Employee who has
not performed services for the Employer or a related employer maintaining a plan
in the aggregation group for the five Plan Years ending on the Determination
Date, shall be disregarded in determining Top Heavy status.
If the Employer maintains a defined benefit plan during the Plan Year
which is subject to aggregation with this Plan, the 60% test shall be applied
after calculating the present value of the Participants' accrued benefits under
the defined benefit plan in accordance with the rules set forth in that plan and
combining the present value of such accrued benefits with the Participant's
account balances under this Plan.
Solely for the purpose of determining if the Plan, or any other plan
included in the Required Aggregation Group, is Top-Heavy, a Non-Key Employee's
accrued benefit in a defined benefit plan shall be determined under (i) the
method, if any, that uniformly applies for accrual purposes under all plans
maintained by the Affiliates, or (ii) if there is no such method, as if such
<PAGE>
benefit accrued not more rapidly than the slowest accrual rate permitted under
the fractional accrual rate of Code Section 411(b)(1)(C).
(b) Key Employee. Any employee of the Employer who, during the Plan Year
or the four preceding Plan Years was an officer receiving Compensation in excess
of 50% of the limit described in Code Section 415(b)(1)(A), one of the ten
employees of the Employer owning the largest interests in the Employer and
receiving Compensation equal to or greater than the dollar limit described in
Code Section 415(c)(1)(A), a greater than 5% owner of the Employer, a greater
than 1% owner of the Employer receiving Compensation in excess of $150,000, or
the Beneficiary of a Key Employee. The Code Section 415(b)(1)(A) and
415(c)(1)(A) limits referred to in the preceding sentence shall be the specified
dollar limit plus any increases reflecting cost of living adjustments specified
by the Secretary of the Treasury.
(c) Determination Date. The last day of the Plan Year immediately
preceding the Plan Year for which Top Heavy status is determined. For the first
Plan Year, the Determination Date shall be the last day of the first Plan Year.
(d) Non-Key Employee. Any Participant who is not a Key Employee.
(e) Employer. The term "Employer" shall include any Affiliate of such
Employer.
(f) Compensation. The term "Compensation" shall have that meaning as
defined in Article 13.
15.3 Minimum Benefit.
(a) Except as provided below, the Employer Contributions allocated on
behalf of any Non-Key Employee who is employed by the Employer on the
Determination Date shall not be less than the lesser of (i) 3% of such Non-Key
Employee's Compensation or (ii) the largest percentage of Employer Contributions
and Pre-Tax Contributions, as a percentage of the Key Employee's Compensation,
allocated on behalf of any Key Employee for such Plan Year. Pre-Tax
Contributions allocated to the Accounts of Non-Key Employees shall not be
considered in determining whether a Non-Key Employee has received the minimum
contribution required by this Section 15.3.
(b) The minimum allocation is determined without regard to any Social
Security contribution and shall be made even though, under other Plan
provisions, the Non-Key Employee would have received a lesser allocation or no
allocation for the Plan Year because of the Non-Key Employee's failure to
complete 1,000 Hours of Service, his failure to make mandatory employee
contributions, or his earning compensation less than a stated amount.
<PAGE>
(c) If the Employer maintains a defined benefit plan in addition to this
Plan, the minimum contribution and benefit requirements for both plans in a Top
Heavy Plan Year may be satisfied by an allocation of Employer Contributions to
the Account of each Non-Key Employee in the amount of 5% of the Non-Key
Employee's compensation.
<PAGE>
ARTICLE 16
MISCELLANEOUS
16.1 Headings. The headings and sub-headings in this Plan have been inserted for
convenience of reference only and are to be ignored in any construction of the
provisions hereof.
16.2 Action by Employer. Any action by an Employer under this Plan shall be by
resolution of its Board of Directors, or by any person or persons duly
authorized by resolution of said Board to take such action.
16.3 Spendthrift Clause. Except as otherwise required by a "qualified domestic
relations order" as defined in Code Section 414(p), none of the benefits,
payments, proceeds or distributions under this Plan shall be subject to the
claim of any creditor of any Participant or Beneficiary, or to any legal process
by any creditor of such Participant or Beneficiary, and none of them shall have
any right to alienate, commute, anticipate or assign any of the benefits,
payments, proceeds or distributions under this Plan except for the extent
expressly provided herein to the contrary.
16.4 Distributions Upon Special Occurrences.
(a) Subject to Section 11.3, Pre-Tax Contributions and any income
attributable thereto, shall be distributed to Participants or their
Beneficiaries in a single lump sum as soon as administratively feasible after
the termination of the Plan, provided that neither the Employer nor its
Affiliates maintain a successor plan.
(b) The provisions of this Section 16.4 including the definition of
"successor plan" shall be governed by Treasury Regulation Section
1.401(k)-1(d)(1)(iii) or any successor Treasury Regulation thereto.
(c) The Distribution of a Participant's Pre-Tax Contribution Account will
occur under this Section 16.4 (as well as under this Plan) only to the extent
such Distribution satisfies the distribution requirements of Code Section
401(k).
16.5 Discrimination. The Employer, the Committee, Trustee and all other persons
involved in the administration and operation of the Plan shall administer and
operate the Plan and Fund in a uniform and consistent manner with respect to all
Participants similarly situated and shall not permit discrimination in favor of
Highly Compensated Employees.
16.6 Release. Any payment to a Participant, Former Participant or Beneficiary,
or to their legal representatives, in accordance with the provisions of this
Plan, shall to the extent thereof be in full satisfaction of all claims
<PAGE>
hereunder against the Trustee, Plan Administrator, Committee and the Employer,
any of whom may require such Participant, Former Participant, Beneficiary, or
legal representative, as a condition precedent to such payment, to execute a
receipt and release therefor in such form as shall be determined by the Trustee,
the Committee, or the Employer, as the case may be.
16.7 Compliance with Applicable Laws. The Company, through the Plan
Administrator, shall interpret and administer the Plan in such manner that the
Plan and Trust shall remain in compliance with the Code, with the Act, and all
other applicable laws, regulations, and rulings.
16.8 Agent for Service of Process. The agent for service of process of this Plan
shall be the person listed from time to time in the current records of the
Secretary of State of Idaho as the agent for the service of process for the
Company.
16.9 Merger. In the event of any merger or consolidation of the Plan with any
other Plan, or the transfer of assets or liabilities by the Plan to another
Plan, each Participant must receive (assuming that the Plan would terminate) the
benefit immediately after the merger, consolidation, or transfer which is equal
to or greater than the benefit such Participant would have been entitled to
receive immediately before the merger, consolidation, or transfer (assuming that
the Plan had then terminated), provided such merger, consolidation, or transfer
took place after the date of enactment of the Act.
16.10 Governing Law. The Plan shall be governed by the laws of the State of
Idaho to the extent that such laws are not preempted by Federal law.
16.11 Adoption of the Plan by an Affiliated Sponsor.
(a) The Committee shall determine which employers shall become Affiliated
Sponsors within the terms of the Plan. In order for the Committee to designate
an Employer as an Affiliated Sponsor, the Committee must approve the addition of
the Affiliated Sponsor's identity to Schedule A (which approval may be
retroactive to an earlier effective date). The Committee may also specify such
terms and conditions pertaining to the adoption of the Plan by the Affiliated
Sponsor as the Committee deems appropriate. With the Committee's consent, an
Affiliated Sponsor may limit participation in the Plan to certain of its
Employees.
(b) The Plan of the Affiliated Sponsor and of the Company shall be
considered a single plan for purposes of Treasury Regulation Section
1.414(1)-1(b)(1). All assets contributed to the Plan by the Affiliated Sponsor
shall be held in a single fund together with the assets contributed by the
Company (and with the assets of any other Affiliated Sponsors); and so long as
the Affiliated Sponsor continues to be designated as such, all assets held in
such fund shall be available to pay benefits to all Participants and
Beneficiaries covered by the Plan irrespective of whether such Employees are
<PAGE>
employed by the Company or by the Affiliated Sponsor. Nothing contained herein
shall be construed to prohibit the separate accounting of assets contributed by
the Company and the Affiliated Sponsors for purposes of cost allocation if
directed by the Committee or the holding of Plan assets in more than one Fund
with more than one Trustee.
(c) So long as the Affiliated Sponsor's designation as such remains in
effect, the Affiliated Sponsor shall be bound by, and subject to all provisions
of the Plan and Trust Agreement. The exclusive authority to amend the Plan shall
be shared by the Board and the Authorized Officer (see Article 10), while the
Authorized Officer shall have exclusive authority to amend the Trust Agreement.
No Affiliated Sponsor shall have any right to amend the Plan or the Trust
Agreement. Any amendment to the Plan or Trust Agreement adopted by the Board or
the Authorized Officer shall be binding upon every Affiliated Sponsor without
further action by such Affiliated Sponsor.
(d) Each Affiliated Sponsor shall be solely responsible for making an
Employer Contribution with respect to its Employees and solely responsible for
making any contribution required by Article 15. Furthermore, if an Affiliated
Sponsor determines to make a Qualified Nonelective Contribution on behalf of its
Employees, such Affiliated Sponsor shall be solely responsible for making such
contribution. Neither the Company nor any other Affiliated Sponsor is obligated
to make a Qualified Nonelective Contribution on behalf of the Employees of a
different Affiliated Sponsor.
(e) The Company and each Affiliated Sponsor which is an Affiliate will be
tested on a combined basis to determine whether the Company and such Affiliated
Sponsors satisfy the Average Actual Deferral Percentage Test and Average Actual
Contribution Percentage Test described in Article 12. An Affiliated Sponsor
which is not an Affiliate shall be tested separately from the Company and those
Affiliated Sponsors that are Affiliates for purposes of the ADP and ACP test
described in Article 12.
(f) No Affiliated Sponsor other than the Company shall have the right to
terminate the Plan. However, any Affiliated Sponsor may withdraw from the Plan
by action of its board of directors provided such action is communicated in
writing to the Committee. The withdrawal of an Affiliated Sponsor shall be
effective as of the last day of the Plan Year following receipt of the notice of
withdrawal (unless the Committee consents to a different effective date). In
addition, the Committee may terminate the designation of an Affiliated Sponsor
to be effective on such date as the Committee specifies. Any such Affiliated
Sponsor which ceases to be an Affiliated Sponsor shall be liable for all cost
accrued through the effective date of its withdrawal or termination and any
contributions owing as a result of Pre-Tax Contributions by its Employees or any
other contribution as provided in paragraphs (d) and (e). In the event of the
withdrawal or termination of an Affiliated Sponsor as provided in this
<PAGE>
paragraph, such Affiliated Sponsor shall have no right to direct that assets of
the Plan be transferred to a successor plan for its Employees unless such a
transfer is approved by the Committee in its sole discretion.
16.12 Protected Benefits. Early retirement benefits, retirement-type subsidies,
or optional forms of benefits protected under Code Section 411(d)(6) shall not
be reduced or eliminated unless such reduction or elimination is permitted under
the Code, Treasury Regulations, authority issued by the Internal Revenue
Service, or judicial authority.
16.13 Location of Participant or Beneficiary Unknown. In the event that all or
any portion of the distribution payable to a Participant, Former Participant or
his Beneficiary shall remain unpaid solely by reason of the Committee's
inability to ascertain the whereabouts of such Participant, Former Participant
or Beneficiary, the amount unpaid shall be forfeited. However, such forfeiture
shall not occur until five (5) years after the amount first became payable. The
Committee shall make a diligent effort to locate the Participant, Former
Participant or Beneficiary. In the event a Participant, Former Participant or
Beneficiary is located subsequent to his benefit being forfeited, such benefit
shall be restored and distributed.
16.14 Qualified Military Service. Notwithstanding any provision of this Plan to
the contrary, effective as of December 12, 1994, contributions, benefits, and
service credit with respect to qualified military service will be provided in
accordance with Section 414(u) of the Internal Revenue Code.
16.15 Not Contract for Employment. Participation in the Plan shall not give any
Employee the right to be retained in the Employer's employ, nor shall any
Employee, upon dismissal from or voluntary termination of his employment, have
any right or interest in the Fund, except as herein provided.
16.16 Special Rules for Permanent and Total Disability. Effective for Plan Years
beginning on or after January 1, 1997, if the Plan provides for the continuation
of contributions for a fixed or determinable period on behalf of all
Participants who are Permanently Disabled, the Employer may make contributions
on behalf of such Employees including Highly Compensated Employees without first
making the election required by section 414(c)(3)(C)(iii) of the Code.
16.17 Protection of Optional Forms of Benefit for Money Purchase Plan Assets.
Notwithstanding any provision of this Plan to the contrary, to the extent that
any optional form of benefit under this Plan permits a Distribution prior to the
Employee's Retirement, death, Permanent Disability, or Termination Date, and
prior to Plan termination, the optional form of benefit is not available with
respect to benefits attributable to assets (including the post-transfer earnings
thereon) and liabilities that are transferred, within the meaning of Section
<PAGE>
414(l) of the Code, to this Plan from a money purchase pension plan qualified
under Section 401(a) of the Code (other than any portion of those assets and
liabilities attributable to voluntary employee contributions).
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Plan to be duly executed
on the date indicated below, but effective as of January 1, 2000.
MICRON ELECTRONICS, INC.
/s/ JoAnne S. Pfeifer
-------------------------------------
By: JoAnne S. Pfeifer
------------------------------
Its: Vice President, Administration
------------------------------
Corporate Secretary
------------------------------
Date: December 30, 1999
------------------------------
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE A
AFFILIATED SPONSORS
Name Effective Date of Affiliation
- -------------------------------------------------------------
<S> <C>
Micron PC, Inc. November 22, 1998
Micron Commercial Computer November 22, 1998
Systems, Inc.
Micron Government Computer November 22, 1998
Systems, Inc.
Micron Computer Services, November 22, 1998
Inc.
Micron PC Web Services, June 15, 1999
Inc.
Micron Internet Services, September 3, 1999
Inc.
Micron Electronics (H.K.) January 1, 1999
Ltd. (expatriates only)
Micron Electronics Asia - January 1, 1999
Pacific Trading Ltd.
(expatriates only)
MEI California, Inc. November 22, 1998
SpecTek LLC November 22, 1998
NetLimited, Inc. d/b/a January 1, 2000
HostPro
LightRealm, Inc. January 1, 2000
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE B
PREDECESSOR EMPLOYERS
AND PRIOR EMPLOYER ACCOUNTS
Predecessor Date of Special Rules
Employer Acquisition
- --------------------------------------------------------------------------------
<S> <C> <C>
NetFRAME August 28, 1. Background. On August 28, 1997, Micron
Systems 1997 Electronics, Inc. (referred to as MEI in this
Incorporated Schedule B) through its wholly owned
subsidiary, Payette Acquisition Corp., merged into
NetFRAME Systems Incorporated ("NetFRAME").
Immediately following the merger ("NetFRAME
Merger"), Payette Acquisition Corp. changed its
name to NetFRAME Systems Incorporated with NetFRAME
remaining as a wholly owned subsidiary of MEI.
Following the NetFRAME merger, NetFRAME employees
continued to participate in the NetFRAME Systems
Incorporated Savings and Investment Plan and Trust
("NetFRAME Plan"). As of January 1, 1998, the
NetFRAME Plan was merged with and into this Plan.
2. Eligibility for Employee Contributions.
Effective January 1, 1998, any current or prior
NetFRAME employee who was an eligible participant
in the NetFRAME Plan on December 31, 1997
("NetFRAME Participant") and who is an Employee
under this Plan as of January 1, 1998, shall be
eligible to make Pre-Tax and Rollover Contributions
under this Plan as of January 1, 1998. All other
NetFRAME employees will be eligible to make Pre-Tax
and rollover contributions upon satisfying the
requirements of Article 4 (determined by counting
Hours of Service as defined in this Schedule B).
<PAGE>
3. Eligibility for Employer Contributions. Any
NetFRAME Participant who worked 1,000 or more Hours
of Service (as defined in this Schedule B) for
NetFRAME during 1997, shall be deemed to have
satisfied the 1,000 Hours of Service requirement to
the extent the hours of service method is
applicable to the determination of Credited
Service. All other NetFRAME Participants will
satisfy the 1,000 Hours of Service requirement, to
the extent applicable, upon the completion of 1,000
Hours of Service counting hours worked both before
and after January 1, 1998 (determined in accordance
with the Hours of Service definition set forth in
this Schedule B.
4. Hours of Service. In determining whether a
NetFRAME employee has earned sufficient Hours of
Service under this Plan to make Pre-Tax
Contributions or to have Employer Contributions
made on his or her behalf, the NetFRAME employee
shall be deemed to have earned 190 hours during
each month in which the NetFRAME employee worked
one or more Hours of Service for NetFRAME prior to
January 1, 1998. However, only continuous
employment with NetFRAME prior to January 1, 1998,
will be considered (i.e., service prior to an
employment break shall be ignored). On or after
January 1, 1998, only actual Hours of Service shall
be considered.
5. Special Vesting Rules. The NetFRAME Plan
provided automatic 100% vesting. This Plan uses a
graded vesting schedule (see Section 7.4(c)). The
graded vesting schedule of Section 7.4(c) shall
apply to all NetFRAME Participants who had less
than 3 years of vesting service under the NetFRAME
Plan as of January 1, 1998. A NetFRAME Participant
earned one year of vesting service for each Plan
Year (as defined in the NetFRAME Plan) in which the
NetFRAME Participant earned 1,000 or more Hours of
Service (as defined in this Schedule B). All other
NetFRAME Participants shall be 100% vested in their
account balances under this Plan.
<PAGE>
6. Special Distribution Rules. The NetFRAME Plan
allowed participants in that plan to elect a
distribution in the form of monthly, quarterly,
semi-annual or annual period certain cash
installments. The period over which such payment
may be made cannot extend beyond the Participant's
life expectancy (or the life expectancy of the
Participant and his designated Beneficiary). In
addition, such installment payments shall be
subject to other restrictions imposed by law such
as the incidental benefit requirement of Prop Reg.
ss. 1.401(a)(9)-2. Only the NetFRAME Participant's
12/31/97 account balance (as well as any earnings
on such account balance) may be distributed as an
installment payment. The remainder of the NetFRAME
Participant's account balance shall be subject to
the distribution options set forth in Section 8.2.
The Plan's recordkeeper is authorized to establish
such accounts or sub-accounts as may be necessary
to separately account for the 12/31/97 portion of
the NetFRAME Participant's account balance.
7. Loans. The NetFRAME Plan allowed participants to
make loans under that plan. NetFRAME Participants
who had loans under the NetFRAME Plan on December
31, 1997 shall have such loans transferred to this
Plan as part of the plan merger. Such loans shall
continue to be subject to the promissory notes and
loan rules in effect on December 31, 1997 (i.e. the
NetFRAME Plan provisions)or as subsequently amended
by MEI and as reflected in this Schedule B.
However, no additional loans shall be made under
this Plan.
NetLimited, Inc. August 2, Vesting Service shall be credited from an
d/b/a HostPro 1999 Employee's initial date of hire with NetLimited,
Inc. d/b/a HostPro.
LightRealm, Inc. December Vesting Service shall be credited from an
14, 1999 Employee's initial date of hire with LightRealm
Inc.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE C
RULES APPLICABLE TO EMPLOYER MATCHING CONTRIBUTIONS
<S> <C> <C>>
Plan Year Uniform Percentage Maximum
Match or Uniform Contribution Cap
Dollar Match
1/1/00-12/31/00 100% of a Participant's Greater of dollar-for
Pre-Tax Contributions dollar on first 4% of
Compensation for each
Pay Date or $1,500
for each Plan Year
</TABLE>
<PAGE>
Exhibit 23.1
Consent of Independent Accountants
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of our report dated September 27, 1999 relating to the
consolidated financial statements and financial statement schedule of Micron
Electronics, Inc., which appear in Micron Electronic, Inc.'s Annual Report
on Form 10-K for the year ended September 2, 1999.
/s/ PricewaterhouseCoopers LLP
- ------------------------------
PRICEWATERHOUSECOOPERS LLP
Boise, Idaho
December 30, 1999
