Exhibit 10-N
SECOND AMENDMENT OF
TRUSERV CORPORATION
SAVINGS AND COMPENSATION DEFERRAL PLAN
(AS AMENDED AND RESTATED EFFECTIVE AS OF JANUARY 1, 1998)
WHEREAS, TruServ Corporation (the "Company") has established and
maintains the TruServ Corporation Savings and Compensation Deferral Plan (the
"Plan"); and
WHEREAS, the Company has previously submitted the Plan to the Internal
Revenue Service in connection with a request for a favorable determination
letter evidencing the Plan's compliance with the Uruguay Round Agreements Act,
the Uniformed Services Employment and Reemployment Rights Act of 1994, the Small
Business Jobs Protection Act of 1996, the Tax Relief Act of 1997 and the
Community Renewal Tax Relief Act of 2000; and
WHEREAS, the Internal Revenue Service has requested that additional
amendments be made to the Plan before it will issue a favorable determination
letter for the Plan;
NOW, THEREFORE, by virtue and in exercise of the power reserved to the
Company by Section 10.01 of the Plan and pursuant to resolutions adopted by the
Board of Directors of the Company, the Plan be and is hereby amended in the
following particulars:
1. By substituting the phrase "Section 132(f)(4)" for the phrase
"Section 132(f)" where it appears in the first sentence of Section 1.17.
2. By substituting for the last sentence of Section 1.17 of the
Plan the following:
"Compensation of any Employee will not be taken into account to the
extent that it exceeds the Annual Dollar Limit as adjusted in
accordance with Section 401(a)(17)(B) of the Code as described in
Section 1.08, provided that such
Annual Dollar Limit shall not be applied in determining Highly
Compensated Employees under Section 1.27."
3. By substituting for subsection (a) of Section 3.06 of the Plan
the following:
"(a)(1) The Committee will calculate the dollar
amount of excess contributions for each affected Highly
Compensated Employee in a manner described in Section
401(k)(8)(B) of the Code and Treasury Regulation Section
1.401(k)-1(f)(2). To do so, the Committee will reduce the
Actual Deferral Ratio of the Highly Compensated Employee with
the highest Actual Deferral Ratio to the extent necessary to
(i) enable the Plan to satisfy the limitations of this Section
3.06, or (ii) cause such Highly Compensated Employee's Actual
Deferral Ratio to equal the Actual Deferral Ratio of the
Highly Compensated Employee with the next highest Actual
Deferral Ratio. This process will be repeated until the Plan
would satisfy the limitations of this Section 3.06. However,
rather than distributing this amount to each affected Highly
Compensated Employee in the order of these employees' Actual
Deferral Ratios, these amounts will be aggregated and
distributed pursuant to subsection (a)(3) below. For purposes
of this subsection (a) of Section 3.06, `Actual Deferral
Ratio' means the ratio of: (i) the Income Deferral
Contributions made to the Plan on behalf of a Highly
Compensated Employee during the Plan Year, to (ii) the
Compensation of such Highly Compensated Employee for the Plan
Year.
(2) The Committee will determine the total of
the dollar amounts calculated in under subsection (a)(1)
above.
(3) The Income Deferral Contributions of the
Highly Compensated Employee with the highest dollar amount of
Income Deferral Contributions will be reduced by the amount
required to cause that Highly Compensated Employee's Income
Deferral Contribution to equal the dollar amount of the Income
Deferral Contribution of the Highly Compensated Employee with
the next highest dollar amount of Income Deferral
Contribution. This amount will then be distributed to the
Highly Compensated Employee with the highest dollar amount.
However, if a lesser reduction, when added to the total dollar
amount already distributed under this step, would equal the
total excess contributions, the lesser reduction amount will
be distributed.
(4) If the total amount distributed is less than
the total excess contributions, the process described in
subsection (a)(3) is repeated."
4. By substituting for subsection (a) of Section 3.07 of the Plan
the following:
"(a)(1) The Committee will calculate the dollar amount of
excess aggregate contributions for each affected Highly
Compensated Employee in a manner described in Section
401(m)(6) of the Code and Treasury Regulation
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Section 1.401(m)-1(e)(2). To do so, the Committee will reduce the
Actual Contribution Ratio of the Highly Compensated Employee with the
highest Actual Contribution Ratio to the extent necessary to (i) enable
the Plan to satisfy the limitations of this Section 3.07, or (ii) cause
such Highly Compensated Employee's Actual Contribution Ratio to equal
the Actual Contribution Ratio of the Highly Compensated Employee with
the next highest Actual Contribution Ratio. This process will be
repeated until the Plan does not exceed the limitations of this Section
3.07. However, rather than distributing this amount to each affected
Highly Compensated Employee in the order of these employees' Actual
Contribution Ratios, these amounts will be aggregated and distributed
pursuant to subsection (a)(3) below. For purposes of this subsection
(a) of Section 3.07, `Actual Contribution Ratio' means the ratio of:
(i) the Matching Contributions (and any Income Deferral Contributions
taken into account in computing Actual Contribution Percentages) made
to the Plan on behalf of a Highly Compensated Employee during the Plan
Year, to (ii) the Compensation of such Highly Compensated Employee for
the Plan Year.
(2) The Committee will determine the total of
the dollar amounts calculated under subsection (a)(1) above.
(3) The Matching Contribution of the Highly
Compensated Employee with the highest dollar amount of
Matching Contributions (and any Income Deferral Contributions
taken into account in computing Actual Contribution
Percentages) will be reduced by the amount required to cause
that Highly Compensated Employee's Matching Contributions (and
any Income Deferral Contributions taken into account in
computing Actual Contribution Percentages) to equal the dollar
amount of the Matching Contributions (and any Income Deferral
Contributions taken into account in computing Actual
Contribution Percentages) of the Highly Compensated Employee
with the next highest dollar amount of Matching Contributions
(and any Income Deferral Contributions taken into account in
computing Actual Contribution Percentages). This amount will
then be distributed to the Highly Compensated Employee with
the highest dollar amount. However, if a lesser reduction,
when added to the total dollar amount already distributed
under this step, would equal the total excess aggregate
contributions, the lesser reduction amount will be
distributed.
(4) If the total amount distributed is less than
the total excess aggregate contributions, the process
described in subsection (a)(3) is repeated."
5. By substituting for subsection (b) of Section 3.07 of the Plan
the following:
"(b) With respect to Matching Contributions (together with
Earnings) to be distributed under subsection (a) above, vested Matching
Contributions, together with applicable Earnings, shall be paid to the
Participant and Matching
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Contributions which are forfeitable under the Plan, together with
applicable Earnings, shall be forfeited and applied to reduce future
Company contributions."
6. By substituting for the last sentence of subsection (c) of
Section 3.10 of the Plan the following:
"Notwithstanding the foregoing, for limitation years commencing prior
to January 1, 1998, remuneration shall exclude amounts contributed by
the Company pursuant to a salary reduction agreement which are not
includible in the gross income of the Participant under Sections 125,
132(f)(4), 402(g)(3) or 457 of the Code."
7. By substituting for the first sentence of subsection (a) of
Section 3.12 of the Plan the following:
"Effective as of December 12, 1994 and notwithstanding any provision of
this Plan to the contrary, contributions, benefits and service credit
with respect to qualified military service will be provided in
accordance with Section 414(u) of the Code."
8. By substituting for subsection (e)(iii) of Section 6.04 of the
Plan the following:
"(iii) Notwithstanding the foregoing provisions of this
Article, if a Participant dies before his Accounts have been
distributed, the value of his Account shall be distributed as follows:
(A) if the Participant is unmarried on his date
of death, it shall be paid in a lump sum to
his Beneficiary as soon as practicable; or
(B) if such Participant is married at the time
of his death, and his Account is only
distributable in a lump sum under Section
6.04(a), then the Participant's surviving
spouse shall be entitled to 100% of such
Participant's accounts. Notwithstanding the
foregoing, a Participant may waive the death
benefit otherwise payable to the surviving
spouse under this subsection in favor of a
different Beneficiary. Such waiver must
specify such other Beneficiary and include
the written acknowledgement and irrevocable
consent of the Participant's spouse and be
witnessed by a Plan representative or notary
public. The consent of the spouse is not
necessary if it is established to the
satisfaction of the Plan representative that
such consent may not be
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obtained because there is no spouse, the
spouse cannot be located, or such other
circumstances as the Secretary of the
Treasury may prescribe by regulations; or
(C) if the Participant is married on his date of
death, and his Account may be distributed in
the form of a life annuity under Sections
6.04(b), (c), (d) or (e), it shall be used
to purchase a fixed annuity for the life of
his spouse which is not less than the
actuarial equivalent of 50% of the
nonforfeitable Account balance of the
Participant as of the date of the
Participant's death, unless the spouse
elects, in accordance with such procedures
as the Committee shall prescribe, to receive
a lump sum payment in lieu thereof. Annuity
payments may be directed by the spouse
within a reasonable time following the
Participant's death."
9. By substituting for subsection (a) of Section 6.07 of the Plan
the following:
"(a) "Eligible rollover distribution' means any
distribution of all or any portion of the balance to the credit of the
distributee, except that an eligible rollover distribution does not
include: any distribution that is one of a series of substantially
equal periodic payments (not less frequently than annually) made for
the life (or life expectancy) of the distributee or the joint lives (or
joint life expectancies) of the distributee and the distributee's
designated beneficiary, or for a specified period of ten years or more;
any distribution to the extent such distribution is required under
Section 401(a)(9) of the Code; the portion of any distribution that is
not includible in gross income (determined without regard to the
exclusion for net unrealized appreciation with respect to employer
securities); and any hardship distribution described in Section
401(k)(2)(B)(i)(IV) of the Code."
10. By adding the new subsection (j) to Section 7.05 to the Plan
as a part thereof:
"(j) If the Participant uses his Account as security for a
loan made by the Plan and the Participant is married and his Account is
subject to Section 417 of the Code, the Participant's spouse must
consent to the Participant's use of his Account as security for a loan.
The spouse's consent must be in writing in a form and in a manner
determined by the Committee. The spousal consent must be obtained
during the 90-day period prior to the date on which the loan is to be
secured. Spousal consent is required even if the Account is not the
primary security for the loan.
Notwithstanding the foregoing paragraph, spousal consent is not
required when the Plan is not subject to the survivor annuity rules,
there is no spouse, if the spouse can not be located, if the
Participant is legally separated from his spouse, if
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the accrued benefit subject to the security does not exceed $5,000, or
in other situations specifically excluded by law."
11. By substituting the word "Compensation" for the word
"compensation" everywhere such term appears in subsection (a) of Section 12.02
of the Plan as a part thereof.
Particular 7 shall be effective as of December 12, 1994; particulars 3,
4 and 5 shall be effective as of January 1, 1997; particulars 1, 2, 6, 8, 10 and
11 shall be effective as of January 1, 1998; and particular 9 shall be effective
as of January 1, 2000.
IN WITNESS WHEREOF, TruServ Corporation has caused this amendment to be
executed on its behalf by its duly authorized officer, this 19th day of
December, 2003.
TruServ Corporation
By: /s/ Amy W. Mysel
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Its: SVP of Human Resources and Communication
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