Exhibit 10(iii)
HARRIS CORPORATION
RETIREMENT PLAN
(AMENDED AND RESTATED APRIL 1, 2001)
TABLE OF CONTENTS
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ARTICLE I DEFINITIONS .......................................................1
1.1 Accounts.............................................................1
1.2 After-Tax Account....................................................1
1.3 After-Tax Contributions..............................................1
1.4 Beneficiary..........................................................1
1.5 Break-in-Service.....................................................1
1.6 Code.................................................................1
1.7 Compensation.........................................................2
1.8 Consolidated Subsidiaries............................................4
1.9 Corporation..........................................................4
1.10 Disability...........................................................4
1.11 Early Retirement Age - means age 55..................................4
1.12 Employment Unit......................................................4
1.13 Employee.............................................................4
1.14 ERISA................................................................5
1.15 Excess Compensation..................................................5
1.16 Fiscal Year..........................................................5
1.17 Full-Time Employee...................................................6
1.18 Harris Stock Fund....................................................6
1.19 Harris Stock After-Tax Account.......................................6
1.20 Harris Stock Matching Account........................................6
1.21 Harris Stock Pre-Tax Account.........................................6
1.22 Highly Compensated Employee..........................................6
1.23 Hour of Service......................................................7
1.24 Investment Committee.................................................7
1.25 Investment Funds.....................................................7
1.26 Leave of Absence.....................................................7
1.27 Matching After-Tax Account...........................................7
1.28 Matching After-Tax Contributions.....................................7
1.29 Matching Contributions...............................................7
1.30 Matching Pre-Tax Account.............................................8
1.31 Matching Pre-Tax Contributions.......................................8
1.32 Military Leave.......................................................8
1.33 Normal Retirement Age................................................8
1.34 Participant..........................................................8
1.35 Participating Company................................................8
1.36 Plan.................................................................8
1.37 Plan Year............................................................8
1.38 Predecessor Company..................................................9
1.39 Pre-Tax Account......................................................9
1.40 Pre-Tax Contributions................................................9
1.41 Profit-Sharing Account...............................................9
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1.42 Profit-Sharing Contributions.........................................9
1.43 Related Company......................................................9
1.44 Release Employee....................................................10
1.45 Retirement Plan Administrative Committee............................10
1.46 Rollover Account....................................................10
1.47 Savings Account.....................................................10
1.48 Service.............................................................10
1.49 Taxable Wage Base...................................................10
1.50 Trust Agreement.....................................................11
1.51 Trust Fund..........................................................11
1.52 Trustee.............................................................11
1.53 USERRA..............................................................11
1.54 Valuation Date......................................................11
1.55 Year of Service.....................................................11
ARTICLE II PARTICIPATION ...................................................12
2.1 In General..........................................................12
2.2 Renewal of Participation on Reemployment............................12
2.3 Periods of Service on Reemployment..................................12
2.4 Service with Predecessor Company....................................13
2.5 Military Leave......................................................13
2.6 Joint Venture Service...............................................13
ARTICLE III CONTRIBUTIONS AND ALLOCATIONS...................................14
3.1 Profit-Sharing Contributions........................................14
3.2 Allocation of Profit-Sharing Contribution to Participants...........16
3.3 Pre-Tax Contributions...............................................17
3.4 Matching Pre-Tax Contributions......................................18
3.5 After-Tax Contributions.............................................19
3.6 Matching After-Tax Contributions....................................19
3.7 Elections to Make Pre-Tax and After-Tax Contributions...............20
3.8 Rollover Contributions..............................................21
3.9 Participating Company's Obligation to Make Contributions............22
3.10 Treatment of Forfeited Amounts......................................23
3.11 Finality of Allocations.............................................23
ARTICLE IV LIMITATIONS ON CONTRIBUTIONS.....................................24
4.1 In General..........................................................24
4.2 Pre-Tax Contributions...............................................24
4.3 Limitations on Contributions for Highly-Compensated Employees.......24
4.4 Limitations on Annual Additions.....................................36
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ARTICLE V VESTING AND FORFEITURES...........................................38
5.1 In General..........................................................38
5.2 Vesting on Retirement, Death or Disability..........................38
5.3 Vesting on Other Termination of Employment..........................38
5.4 Effect of In-Service Withdrawals on a Participant's Vested
Percentage..........................................................39
5.5 Forfeitures.........................................................41
ARTICLE VI ACCOUNTS AND INVESTMENTS.........................................42
6.1 Establishment of Accounts...........................................42
6.2 Investment of Accounts..............................................43
6.3 Allocation of Earnings and Losses...................................45
6.4 Special Rules Concerning Harris Stock Fund..........................45
ARTICLE VII DISTRIBUTIONS ..................................................47
7.1 In General..........................................................47
7.2 Small Benefit Cash-out..............................................48
7.3 Form of Payment.....................................................49
7.4 Time of Payment.....................................................49
7.5 Direct Rollover.....................................................50
7.6 Benefit Amount and Withholding......................................51
7.7 Order of Distributions..............................................52
7.8 Statutory Requirements..............................................52
7.9 Designating Beneficiaries...........................................55
7.10 Payment of Group Insurance Premiums.................................56
7.11 Inability to Locate Participant.....................................57
ARTICLE VIII LOANS .........................................................57
8.1 Loans to Participants...............................................57
8.2 Loan Administration.................................................60
8.3 Repayment and Default...............................................61
8.4 Special Powers......................................................63
ARTICLE IX IN-SERVICE WITHDRAWALS...........................................64
9.1 Withdrawals After Age 59-1/2........................................64
9.2 Withdrawals from Savings Account and After-Tax Account..............64
9.3 Withdrawals from Rollover, Pre-Tax and Profit Sharing Accounts......64
9.4 Conditions Applicable to All Withdrawals............................67
9.5 Reduction of Investment Fund Balances...............................67
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ARTICLE X TOP-HEAVY PROVISIONS..............................................68
10.1 In General..........................................................68
10.2 Minimum Allocation..................................................68
10.3 Minimum Vesting.....................................................68
10.4 Definitions.........................................................69
ARTICLE XI ADMINISTRATION ..................................................73
11.1 Named Fiduciaries...................................................73
11.2 Retirement Plan Administrative Committee............................73
11.3 Powers and Duties of Committee......................................74
11.4 Actions of Committee................................................74
11.5 Finality of Decisions...............................................74
11.6 Immunities..........................................................74
11.7 Advisors and Agents.................................................74
11.8 Committee Member who is Participant.................................75
11.9 Information Provided by Participating Companies.....................75
11.10 Expenses............................................................76
11.11 Trust...............................................................76
11.12 Trust Fund Available to Pay All Plan Benefits.......................76
ARTICLE XII AMENDMENT AND TERMINATION AND CHANGE OF CONTROL.................77
12.1 Amendment...........................................................77
12.2 Amendment of Appendix A.............................................78
12.3 Termination of Plan.................................................78
12.4 Discontinuance of Contributions.....................................78
12.5 Vesting on Termination or Discontinuance of Contributions...........78
12.6 Distribution on Termination.........................................78
12.7 Change of Control...................................................79
ARTICLE XIII MISCELLANEOUS PROVISIONS.......................................83
13.1 Restrictions on Alienation..........................................83
13.2 Exclusive Benefit Requirement.......................................85
13.3 Return of Contributions.............................................85
13.4 No Contract of Employment...........................................86
13.5 Payment of Benefits on Incapacity...................................86
13.6 Merger..............................................................86
13.7 Construction........................................................86
13.8 Governing Law.......................................................87
13.9 Mistaken Payments...................................................87
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APPENDIX A
Participating Companies.....................................................A-1
APPENDIX B
Former Participants In the Intraplex, Inc. 401(K) Profit Sharing Plan.......B-1
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INTRODUCTION
The Harris Corporation Retirement Plan (the "Plan") is hereby amended
and restated effective April 1, 2001. The provisions of the Plan to the extent
so amended and restated shall apply only to those participants in the Plan who
are Employees on or after April 1, 2001. Any benefits of an individual who
ceased being an Employee before April 1, 2001 and who is not re-employed by a
Participating Company after such date shall be determined under the terms of the
Plan that were in effect when such individual ceased to be an Employee.
The Plan and its related trust are intended to be a tax-exempt plan and
trust under sections 401(a) and 501(a) of the Code, respectively. The Plan also
is intended to be a profit-sharing plan that contains a qualified cash or
deferred arrangement under section 401(k) of the Code.
ARTICLE I
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DEFINITIONS
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1.1 ACCOUNTS - means all of the accounts described in Section 6.1, and
such other accounts that may be established on behalf of each Participant, to be
credited with contributions made on behalf of a Participant, adjusted for
earnings and losses as provided in the Plan and debited by Plan expenses
allocable to the Accounts, distributions, withdrawals and loans to the
Participant.
1.2 AFTER-TAX ACCOUNT - means the Account established to record
After-Tax Contributions made on a Participant's behalf other than those invested
in the Harris Stock Fund.
1.3 AFTER-TAX CONTRIBUTIONS - means the contributions described in
Section 3.5.
1.4 BENEFICIARY - means the person or persons entitled to receive any
benefits payable under the Plan on account of a Participant's death.
1.5 BREAK-IN-SERVICE - means a period other than a period included in
the Employee's Service; provided, however, that a Break-in-Service shall not
include a period of absence from employment during which the Employee is absent
from employment for any period not in excess of 24 consecutive months because of
(A) the Employee's pregnancy, (B) the birth of the Employee's child, (C) the
placement of a child with the Employee in connection with the Employee's
adoption of such child or (D) the need of the Employee to care for any such
child for a period beginning immediately following such birth or placement.
1.6 CODE - means the Internal Revenue Code of 1986, as amended from
time to time.
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1.7 COMPENSATION - means the following items of remuneration which an
Employee earns for work or personal services performed for a Participating
Company:
(a) salary or wages, including lump sum merit increases;
(b) commission paid pursuant to a sales incentive plan;
(c) overtime premium, shift differential or additional
compensation in lieu of overtime premium;
(d) compensation in lieu of vacation;
(e) any annual bonus or incentive compensation payable in the
form of cash pursuant to the Harris Corporation Annual
Incentive Plan or any successor thereto or other similar plan
or award program adopted from time to time by a Participating
Company or Employment Unit employing the Employee or any stock
award made in lieu of an annual cash bonus or incentive
compensation;
(f) any compensation of a type described in items (a) through
(e) above which is paid as an employee contribution to the
Plan;
(g) any salary reduction contributions to a cafeteria plan
(within the meaning of section 125 of the Code) maintained by
a Participating Company;
but excluding:
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(i) any extraordinary compensation of a recurring or
non-recurring nature not included under items (a) through (g)
above, including one-time recognition awards and rewards under
a referral program of a Participating Company;
(ii) any award made or amount paid pursuant to the Harris
Corporation Stock Incentive Plan or any successor thereto,
including, but not limited to, performance shares, stock
options, restricted stock, stock appreciation rights or other
stock-based awards or dividend equivalents;
(iii) severance pay or special retirement pay;
(iv) retention bonuses or completion bonuses, unless
authorized by the Retirement Committee in a uniform and
nondiscriminatory manner; and
(v) reimbursement or allowances with respect to expenses
incurred in connection with employment, such as tax
equalization, reimbursement for moving expenses, mileage or
expense allowance or education expenses.
In no event does the term "Compensation" include indirect compensation such as
employer-paid group insurance premiums or contributions under this or other
qualified employee benefit plan, other than as a contribution described in items
(f) and (g) above.
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Only compensation not in excess of $170,000 (as adjusted pursuant to
section 401(a)(17)(B) of the Code) shall be taken into account. In addition, in
the year in which any Employee becomes a Participant only Compensation received
after he becomes a Participant shall be taken into account. For purposes of any
test imposed under any section of the Code, the Plan authorizes the use of any
definition of Compensation that satisfies the requirements of such section.
1.8 CONSOLIDATED SUBSIDIARIES - means those subsidiaries of the
Corporation which are included in the consolidated annual financial statements
for the Corporation.
1.9 CORPORATION - means Harris Corporation, a Delaware corporation.
1.10 DISABILITY - means a disability that qualifies a Participant for
disability benefits under title II or title XVI of the Federal Social Security
Act; such disability for Plan purposes shall be deemed to occur on the effective
date determined by the Social Security Administration.
1.11 EARLY RETIREMENT AGE - means age 55.
1.12 EMPLOYMENT UNIT - means any division or other readily identifiable
segment of the operations of a Participating Company, for example, as identified
in the annual report or such other segment as may be established for purposes of
the Plan by the Corporation, in its discretion.
1.13 EMPLOYEE - means an individual who is reported on the payroll
records of the Corporation or other Participating Company as an employee unless
either (i) the individual's employment relationship is covered by a collective
bargaining agreement that does not provide for such individual's participation
in the Plan or (ii) the individual does not receive any Compensation payable in
U.S. dollars. No individual who renders services to a Participating
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Company shall be considered an Employee for purposes of the Plan if such
individual renders such services pursuant to (i) a written agreement providing
that such services are to be rendered by the individual as an independent
contractor, (ii) a written agreement with an entity, including a leasing
organization within the meaning of section 414(n)(2) of the Code, that is not a
Participating Company or Related Company, or (iii) a written agreement that
contains a waiver of participation in the Plan. In particular, it is expressly
intended that any individuals not treated as employees by a Participating
Company on its payroll records is to be excluded from Plan participation even if
a court or administrative agency determines that such an individual is a common
law employee of a Participating Company. With respect to a Participating Company
not all of whose employees are eligible to participate in the Plan (a "Limited
Participating Company"), the term "Employee" shall include those employees of
the Participating Company who were Participants immediately prior to their
commencement of employment by the Limited Participating Company. A leased
employee shall be treated as an Employee only for purposes of applying the
requirements described in section 414(n)(3) of the Code and determining the
number and identity of Highly Compensated Employees.
1.14 ERISA - means the Employee Retirement Income Security Act of 1974,
as amended from time to time.
1.15 EXCESS COMPENSATION - means the portion of a Participant's
Compensation that exceeds the Taxable Wage Base for the year in which the
Compensation is received.
1.16 FISCAL YEAR - means the fiscal year of the Corporation.
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1.17 FULL-TIME EMPLOYEE - means an Employee who is regularly scheduled
by a Participating Company to work 30 or more hours per week, and who is not
designated on the payroll records of a Participating Company as a temporary
employee.
1.18 HARRIS STOCK FUND - means the Investment Fund that is primarily
invested in qualifying employer securities (within the meaning of section 407 of
ERISA).
1.19 HARRIS STOCK AFTER-TAX ACCOUNT - means the portion of the
After-Tax Contributions made on a Participant's behalf invested in the Harris
Stock Fund.
1.20 HARRIS STOCK MATCHING ACCOUNT - means the portion of the Matching
Contributions made on a Participant's behalf invested in the Harris Stock Fund.
1.21 HARRIS STOCK PRE-TAX ACCOUNT - means the portion of the Pre-Tax
Contributions made on a Participant's behalf invested in the Harris Stock Fund.
1.22 HIGHLY COMPENSATED EMPLOYEE - means, for a Plan Year, any Employee
who is:
(a) a 5%-owner (as determined under section 416(i)(1) of the Code)
of an Employer at any time during the Plan Year or the preceding Plan Year; or
(b) paid Compensation in excess of $85,000 (as adjusted pursuant
to section 414(q)(1)(B)(ii) of the Code) from an Employer for the preceding Plan
Year. The Employees taken into account under this paragraph (b) for each Plan
Year shall be limited to those Employees who were members of the top-paid group
(as defined in section 414(q)(3) of the Code) for the preceding Plan Year,
unless otherwise elected by the Company for such Plan Year in accordance with
applicable law.
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1.23 HOUR OF SERVICE - means each hour for which an Employee is paid or
entitled to payment for the performance of duties for a Participating Company or
Related Company.
1.24 INVESTMENT COMMITTEE - means the Investment Committee - Retirement
Plans of the Corporation's Board of Directors.
1.25 INVESTMENT FUNDS - means the funds designated from time to time by
the Investment Committee in which contributions made on behalf of Participants
may be invested.
1.26 LEAVE OF ABSENCE - means a period of interruption of the active
employment of an Employee granted by a Participating Company or Predecessor
Company with the understanding that the Employee will return to active
employment at the expiration of the period of time. A Leave of Absence as
originally granted may be extended by the Participating Company or Predecessor
Company for additional periods. The term "Leave of Absence" does not include a
Military Leave.
1.27 MATCHING AFTER-TAX ACCOUNT - means the Account established to
record Matching After-Tax Contributions made on a Participant's behalf other
than those invested in the Harris Stock Fund.
1.28 MATCHING AFTER-TAX CONTRIBUTIONS - means the contributions made on
behalf of a Participant under Section 3.6.
1.29 MATCHING CONTRIBUTIONS - means the aggregate of the Matching
After-Tax Contributions and the Matching Pre-Tax Contributions made on behalf of
a Participant.
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1.30 MATCHING PRE-TAX ACCOUNT - means the Account established to record
the Matching Pre-Tax Contributions made on a Participant's behalf other than
those invested in the Harris Stock Fund.
1.31 MATCHING PRE-TAX CONTRIBUTIONS - means the contributions made on
behalf of a Participant under Section 3.4.
1.32 MILITARY LEAVE - means an Employee's absence from active
employment with a Participating Company or Predecessor Company for a period of
service in the "uniformed services", within the meaning of the Uniformed
Services Employment and Reemployment Rights Act of 1994, as amended, which
entitles the person rendering such service to reemployment under such Act.
1.33 NORMAL RETIREMENT AGE - means age 65.
1.34 PARTICIPANT - means an Employee who satisfies the requirements of
Section 2.1.
1.35 PARTICIPATING COMPANY - means the Corporation or any Related
Company, or division or operation thereof so designated by the Retirement Plan
Administrative Committee. Appendix A, as it may be amended by the Retirement
Plan Administrative Committee from time to time, lists each Participating
Company, or division thereof, whose Employees may become Participants.
1.36 PLAN - means the Harris Corporation Retirement Plan.
1.37 PLAN YEAR - means the Fiscal Year.
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1.38 PREDECESSOR COMPANY - means any corporation (a) of which a Related
Company is a successor by reason of having acquired all or substantially all of
its business and assets by purchase, merger, consolidation or liquidation, or
(b) from which a Related Company acquired a business formerly conducted by such
corporation; provided, however, that in the case of any such corporation that
continued to conduct a trade or business subsequent to the acquisition by a
Related Company referred in (a) or (b) above, the status of such corporation as
a Predecessor Company relates only to the period of time prior to the date of
such acquisition.
1.39 PRE-TAX ACCOUNT - means the Account established to record the
Pre-Tax Contributions made on a Participant's behalf other than those invested
in the Harris Stock Fund.
1.40 PRE-TAX CONTRIBUTIONS - means the contributions made on behalf of
a Participant under Section 3.3.
1.41 PROFIT-SHARING ACCOUNT - means the Account established to record
the Profit-Sharing Contributions made on a Participant's behalf.
1.42 PROFIT-SHARING CONTRIBUTIONS - means the contributions described
in Section 3.1.
1.43 RELATED COMPANY - means the Corporation or any corporation that is
a member of a controlled group of corporations (as defined in section 414(b) of
the Code) with the Corporation; any trade or business (whether or not
incorporated) which is under common control (as defined in section 414(c) of the
Code) with the Corporation; any organization (whether or not incorporated) which
is a member of an affiliated service group (as defined in section 414(m) of the
Code) which includes the Corporation, or any other entity required to be
aggregated with the Corporation under section 414(o) of the Code.
9
1.44 RELEASE EMPLOYEE - An employee of the Corporation who is
transferred by the Corporation to a Related Company (other than a Participating
Company) and who is designated by the Retirement Plan Administrative Committee
as a Release Employee for purposes of receiving a Profit-Sharing Contribution
for the Plan Year in which such transfer occurred.
1.45 RETIREMENT PLAN ADMINISTRATIVE COMMITTEE - means the committee
established pursuant to Section 11.2.
1.46 ROLLOVER ACCOUNT - means the Account established to record the
rollover contributions made by a Participant pursuant to Section 3.8.
1.47 SAVINGS ACCOUNT - means the Account established under Section
6.1(f).
1.48 SERVICE - means the periods during which the Employee is employed
by a Related Company, determined in accordance with the elapsed time rules set
forth in section 1.410(a)-7 of the Treasury Regulations; provided, however, that
an individual on Military Leave shall have the period of such leave credited as
a period of Service provided such Employee returns to the employ of a Related
Company within the period prescribed by USERRA. Service shall be computed in
terms of completed years and completed days.
1.49 TAXABLE WAGE BASE - means the maximum amount of earnings that may
be considered wages under section 3121(a)(1) of the Code, except for purposes of
Medicare taxes, as in effect on the first day of the Plan Year. In the case of
an Employee who was a Participant for only a portion of a particular Plan Year,
the Taxable Wage Base shall be multiplied by the ratio of the number of calendar
months (including a fraction of a month as a full month) in the Plan Year during
which he was a Participant to 12 months.
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1.50 TRUST AGREEMENT - means the trust agreement relating to the Harris
Corporation Retirement Plan, entered into between the Corporation and the
Trustee, as it may be amended from time to time.
1.51 TRUST FUND - means the assets held by the Trustee in accordance
with the Trust Agreement.
1.52 TRUSTEE - means Bankers Trust Company, or such successor (or
successors) thereto designated by the Corporation to act as trustee under the
provisions of the Trust Agreement, who shall agree to act as such by executing
the Trust Agreement.
1.53 USERRA - the Uniformed Services Employment and Reemployment Rights
Act of 1994, as amended.
1.54 VALUATION DATE - means each day the New York Stock Exchange is
open and any other day as the Retirement Plan Administrative Committee may
determine.
1.55 YEAR OF SERVICE. A period of Service of 365 days.
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ARTICLE II
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PARTICIPATION
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2.1 IN GENERAL. An Employee shall become a Participant in the Plan on
the date he completes a Year of Service, provided that he is employed by a
Participating Company on that date. Notwithstanding the above, and solely for
purposes of making Pre-Tax Contributions, After-Tax Contributions and Rollover
Contributions, a Full-Time Employee shall become a Participant in the Plan on
the date he first performs an Hour of Service.
2.2 RENEWAL OF PARTICIPATION ON REEMPLOYMENT. An Employee who
terminates employment after he completes a Year of Service and is reemployed by
a Participating Company shall become a Participant immediately on reemployment.
An Employee who terminates employment before he completes a Year of Service
shall become a Participant as provided in Section 2.1, provided that his Service
prior to reemployment shall be used to satisfy the Year of Service requirement
of Section 2.1 to the extent provided under Section 2.3.
2.3 PERIODS OF SERVICE ON REEMPLOYMENT. The following rules shall apply
to an Employee who terminates employment before he completes a Year of Service
and is re-employed by a Related Company:
(a) CREDIT FOR PRIOR PERIOD OF SERVICE. If the Employee is
re-employed by a Related Company, then his Service before he terminated
employment shall be taken into account in determining whether the Employee has
completed a Year of Service for purposes of Section 2.1 and for purposes of
determining a Participant's Service under Section 5.3.
(b) CREDIT FOR PERIOD OF ABSENCE. If the Employee terminates
employment due to quitting, discharge, or retirement and is re-employed by a
Related Company within 12
12
months of his termination date, his period of absence shall be taken into
account in determining whether the Employee has completed a Year of Service for
purposes of Section 2.1 and for purposes of determining a Participant's Service
under Section 5.3. If the Employee terminates employment for any reason other
than quitting, discharge, or retirement, and subsequently quits, is discharged,
or retires, his period of absence shall be taken into account in determining
whether the Employee has completed a Year of Service for purposes of Section 2.1
and for purposes of determining a Participant's Service under Section 5.3 only
if he is re-employed by a Related Company within 12 months of the date of his
termination of employment.
2.4 SERVICE WITH PREDECESSOR COMPANY. In the case of a corporation
(other than a Related Company) that becomes a Predecessor Company by reason of
the acquisition of all or substantially all of the assets and business of such
corporation by a Related Company, an Employee's Service shall include employment
with such Predecessor Company only to the extent expressly provided in the
corporate documents effecting the acquisition.
2.5 MILITARY LEAVE. Notwithstanding any provision of the Plan to the
contrary, (i) a Participant who returns to employment after a period of Military
Leave may elect to make Pre-Tax Contributions and After-Tax Contributions to the
Plan in respect of such period of Military Leave and (ii) the Participating
Company that employs such a Participant shall make any Profit-Sharing
Contributions and Matching Contributions on behalf of such Participant to the
Plan upon the Participant's reemployment to the extent required by applicable
law and in accordance with section 414(u) of the Code.
2.6 JOINT VENTURE SERVICE. Notwithstanding anything in the Plan to the
contrary, an Employee's Service shall include the Employee's period of
employment by an entity in which
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the Corporation owns less than 80% but more than 1% of the outstanding equity
interest in such entity (a "joint venture") only if (i) the joint venture is
designated by the Retirement Plan Administrative Committee as eligible for
service credit under this Section 2.6; (ii) such Employee was employed by a
Related Company prior to such Employee's employment by the joint venture and was
not employed by any person or entity other than a Related Company (an "unrelated
employer") between such Employee's employment by a Related Company and the joint
venture; and (iii) such Employee returns to employment with a Related Company
following the Employee's termination of employment with the joint venture
without having been employed by an unrelated employer between such Employee's
employment by the joint venture and a Related Company.
ARTICLE III
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CONTRIBUTIONS AND ALLOCATIONS
-----------------------------
3.1 PROFIT-SHARING CONTRIBUTIONS.
(a) BASIC. The amount of Profit-Sharing Contributions made on
behalf of Participating Companies for a Fiscal Year with respect to Participants
in the Plan shall equal 11 1/2 percent of the adjusted consolidated net income
of the Corporation and its Consolidated Subsidiaries before net income taxes for
such Fiscal Year as determined in subsection (c), reduced by the portion of such
amount with respect to Participants' Compensation that would have been allocable
under Section 3.2 of the Plan if Compensation were determined without regard to
statutory limits under section 401(a)(17) or 415 of the Code.
(b) SPECIAL. The Corporation, in its discretion, may provide for
an additional Profit-Sharing Contribution in a specified dollar amount or
pursuant to a formula with respect to any Fiscal Year.
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(c) ADJUSTED CONSOLIDATED NET INCOME. The adjusted consolidated net
income of the Corporation and its Consolidated Subsidiaries before net income
taxes shall be determined on the basis of the annual audit report prepared by
the Corporation's independent public accountants by adjusting the consolidated
net income shown in the report to eliminate the effect, if any, of the following
items:
(1) any provision for taxes on or measured by income for such years
required by the laws of the United States or of any state or
political subdivision thereof (including, however, any taxes
required under the Ohio Franchise Income Tax, whether or not in
fact measured by income), or any provision for similar taxes
required by the laws of any other country;
(2) all items consisting of credits or deficiencies relating to taxes
described in clause (1) above on or measured by income for prior
Fiscal Years;
(3) any provision for contributions for such Fiscal Year under this
Plan or under any profit-sharing retirement plan of a
Consolidated Subsidiary of the Corporation;
(4) all dividends received during such Fiscal Year with respect to
stock of a Related Company which is not included among the
Consolidated Subsidiaries;
(5) gains or losses from the sale, exchange or other disposition of
capital or depreciable property, as defined in the Code;
15
(6) any income from the use of the "lifo" inventory method resulting
from either a reduction in inventory or a decrease in the cost
index;
(7) all items of income and expense which relate directly to the
conduct by a Related Company of a business (i) which was formerly
conducted by a corporation which was not then a Related Company,
and (ii) the net income (or loss) of which was included for the
first time in determining the consolidated net income of the
Corporation and its Consolidated Subsidiaries for the Fiscal Year
in question;
(8) all exchange adjustments resulting from translating to United
States currency those year-end balance sheet items of
subsidiaries which are denominated in a foreign currency; and
(9) any item of income or expense relating to the right of any
employee to receive cash upon cancellation of an unexercised
stock option.
3.2 ALLOCATION OF PROFIT-SHARING CONTRIBUTION TO PARTICIPANTS.
(a) IN GENERAL. The Profit-Sharing Contributions for a Plan Year
with respect to an Employment Unit shall be allocated among eligible
Participants described in subsection (c) who are employed by the Employment Unit
during some part or all of the Plan Year based on the ratio of each eligible
Participant's Compensation plus Excess Compensation for the Plan Year to the
Compensation plus Excess Compensation of all eligible Participants for the Plan
Year.
(b) LIMITATION ON AMOUNT. Notwithstanding subsection (a), the
amount allocated to an eligible Participant with respect to Excess Compensation
shall not exceed the
16
"base contribution percentage" by more than the lesser of (i) the base
contribution percentage and (ii) 5.7% (or if greater, the percentage equal to
the Old Age portion of the tax under section 3111(a) of the Code, as in effect
on the first day of the Plan Year). Any remaining amount shall be allocated
based on the ratio of each Participant's Compensation for the Plan Year to the
Compensation of all eligible Participants for the Plan Year. The term "base
contribution percentage" means the percentage of Compensation contributed by the
Participating Company with respect to each Participant's Compensation not in
excess of the Participant's Taxable Wage Base.
(c) LIMITATION ON ELIGIBILITY. A Participant shall be eligible to
receive an allocation of Profit-Sharing Contributions for a Plan Year if (i) the
Participant is employed on the earlier of (A) the last day of the Plan Year and
(B) the June 30 nearest to the last day of the Plan Year or (ii) the Participant
terminated employment during the Plan Year on or after Early Retirement Age or
Normal Retirement Age, or due to Disability, death, reduction-in-force program,
Leave of Absence or Military Leave, or is transferred by the Corporation as a
Release Employee to an entity that is not a Participating Company.
3.3 PRE-TAX CONTRIBUTIONS.
(a) CONTRIBUTION ELECTION. Each Participant shall be deemed to
have elected to defer 6% of his Compensation for a Plan Year in the form of
Pre-Tax Contributions, to become effective as of the first payroll period as
soon as administratively practicable following his satisfaction of the
participation requirements set forth in Section 2.1, unless the Participant
elects otherwise prior to such payroll period in the time and manner prescribed
by the Retirement Plan Administrative Committee. If a Participant who elects not
to make Pre-Tax Contributions to the Plan in accordance with the foregoing
sentence subsequently decides to make Pre-Tax
17
Contributions to the Plan, such Participant's election to make Pre-Tax
Contributions shall become effective as of the first payroll period commencing
immediately after the effective date of the election or such later date as may
be administratively practicable. An election shall remain in effect until
revised or revoked. Pre-Tax Contributions shall be contributed to the Plan in
cash; PROVIDED that the Corporation, in its discretion, may contribute Pre-Tax
Contributions to be invested in the Harris Stock Fund in shares of common stock
of the Corporation, which may be contributed at a discount from fair market
value. The sum of the Pre-Tax Contributions and other elective deferrals (within
the meaning of section 402(g)(3)) made on behalf of the Participant to the Plan
and any other plan of a Participating Company or Related Company for any
calendar year shall not exceed $10,500 (as adjusted in accordance with section
402(g)(5)). The portion of any Pre-Tax Contribution made on behalf of a
Participant that is attributable to a discount from fair market value on shares
of common stock of the Corporation shall be disregarded for the purposes of
determining (i) whether the Participant's Pre-Tax Contributions exceed 12
percent of his Compensation for the Plan Year, and (ii) whether the
Participant's Pre-Tax Contributions and other elective deferrals exceed $10,500
(as adjusted in accordance with section 402(g)(5)) for the calendar year.
(b) CONTRIBUTIONS IN EXCESS OF THE MAXIMUM. If the Pre-Tax
Contributions on behalf of a Participant for a calendar year reach the limit
described in subsection (a), any additional contributions to be made during the
calendar year pursuant to the Participant's election shall be made as After-Tax
Contributions and any Matching Pre-Tax Contributions with respect to that amount
shall be made as Matching After-Tax Contributions.
3.4 MATCHING PRE-TAX CONTRIBUTIONS. Each Participating Company shall
make a Matching Pre-Tax Contribution to the Plan on behalf of each Participant
who is employed by
18
such Participating Company and has completed a Year of Service in the amount of
100 percent of the Pre-Tax Contributions made on behalf of the Participant for
the Plan Year, but only to the extent that such Pre-Tax Contributions do not
exceed six percent of the Participant's Compensation for such Plan Year.
Matching Pre-Tax Contributions shall be contributed in cash; provided, that the
Corporation, in its discretion, may contribute Matching Pre-Tax Contributions to
be invested in the Harris Stock Fund in shares of common stock of the
Corporation, which may be contributed at a discount from fair market value. The
portion of any Matching Pre-Tax Contribution made on behalf of a Participant for
a Plan Year that is attributable to a discount from fair market value on shares
of common stock of the Corporation shall be disregarded for the purpose of
determining whether the Matching Pre-Tax Contributions made on behalf of the
Participant exceed six percent of the Participant's Compensation for such Plan
Year.
3.5 AFTER-TAX CONTRIBUTIONS. A Participant may elect to contribute to
the Plan as an After-Tax Contribution an amount equal to any whole percentage of
his Compensation for such Plan Year not exceeding 12 percent. After-Tax
Contributions shall be contributed in cash; provided that the Corporation, in
its discretion, may contribute After-Tax Contributions to be invested in the
Harris Stock Fund in shares of common stock of the Corporation, which may be
contributed at a discount from fair market value. The portion of any After-Tax
Contribution made by a Participant for a Plan Year that is attributable to a
discount from fair market value on shares of common stock of the Corporation
shall be disregarded for the purpose of determining whether the Participant's
After-Tax Contributions exceed 12 percent of his Compensation for such Plan
Year.
3.6 MATCHING AFTER-TAX CONTRIBUTIONS. Each Participating Company shall
make a Matching After-Tax Contribution to the Plan on behalf of each Participant
who is employed by
19
such Participating Company in the amount of 100 percent of the After-Tax
Contributions made by the Participant for the Plan Year, but only to the extent
that such After-Tax Contributions do not exceed six percent of the Participant's
Compensation for such Plan Year. Matching After-Tax Contributions shall be
contributed in cash; provided, that the Corporation, in its discretion, may
contribute Matching After-Tax Contributions to be invested in the Harris Stock
Fund in shares of common stock of the Corporation, which may be contributed at a
discount from fair market value. The portion of any Matching After-Tax
Contribution made on behalf of a Participant for a Plan Year that is
attributable to a discount from fair market value on shares of common stock of
the Corporation shall be disregarded for the purpose of determining whether the
Matching After-Tax Contributions made on behalf of the Participant exceed six
percent of the Participant's Compensation for such Plan Year.
3.7 ELECTIONS TO MAKE PRE-TAX AND AFTER-TAX CONTRIBUTIONS.
(a) INITIAL ELECTIONS. If a Participant elected not to begin
making automatic Pre-Tax Contributions to the Plan in accordance with the first
sentence of Section 3.3(a), then the Participant may elect subsequently to begin
making Pre-Tax Contributions to the Plan at such times and in such manner as may
be prescribed by the Retirement Plan Administrative Committee. A Participant may
elect to begin making After-Tax Contributions at such times and in such manner
as may be prescribed by the Retirement Plan Administrative Committee. Any
election made under this Section 3.7(a) shall become effective as of the first
payroll period commencing immediately after the later of the date on which the
Employer receives the Participant's election, the date designated by the
Participant in his election or such later date as may be administratively
practicable.
20
(b) CHANGING ELECTIONS. A Participant may change the percentage
(in increments of one percent) of future Pre-Tax Contributions or After-Tax
Contributions (or both) made on his behalf at such times and in such manner as
may be prescribed by the Retirement Plan Administrative Committee. A change may
be made not more than once each payroll period. A change of election shall
become effective as of the first payroll period commencing immediately after the
date of the election, or such later date as may be administratively practicable.
(c) TERMINATING ELECTIONS. A Participant may terminate his
election to have Pre-Tax Contributions or After-Tax Contributions (or both) made
on his behalf at such times and in such manner as may be prescribed by the
Retirement Plan Administrative Committee. The termination election shall become
effective as of the first payroll period commencing immediately after the date
of the election, or such later date as may be administratively practicable.
(d) CORPORATION'S DISCRETION TO LIMIT ELECTIONS. The Retirement
Plan Administrative Committee may direct that Participant elections with respect
to Pre-Tax Contributions or After-Tax Contributions (or both) be changed in any
manner the Retirement Plan Administrative Committee, in its discretion, shall
determine appropriate to preserve the qualification of the Plan under section
401(a) of the Code and as a qualified cash or deferred arrangement under section
401(k) of the Code.
3.8 ROLLOVER CONTRIBUTIONS. A Participant, with the consent of the
Retirement Plan Administrative Committee or its delegate, may at any time make a
rollover contribution to the Plan. Rollover contributions may include only (a)
cash amounts and participant loan notes that
21
are eligible rollover distributions (as defined in section 402(c)(4) of the
Code) transferred directly from a trust described in section 401(a) of the Code
which is exempt from tax under section 501(a) of the Code or from a qualified
annuity plan described in section 403(a) of the Code, and (b) cash amounts equal
to eligible rollover distributions paid into the Trust no later than the 60th
day following the day on which the individual received the eligible rollover
distribution from a trust described in section 401(a) of the Code which is
exempt from tax under section 501(a) of the Code or from a conduit individual
retirement account or individual retirement annuity within the meaning of
section 408 of the Code (provided that no amount in such account or value of
such annuity is attributable to a source other than an eligible rollover
distribution as defined in section 402(c)(4) of the Code (and any related
earnings)). A Participant may be required to establish that the transfer of
amounts into a Rollover Account will not require any changes to the terms of the
Plan or will not expose the Plan or Trust to adverse tax consequences.
3.9 PARTICIPATING COMPANY'S OBLIGATION TO MAKE CONTRIBUTIONS.
(a) CONTRIBUTIONS. Each Participating Company agrees to pay to the
Trustee the contributions that are required with respect to Participants who are
performing services at one of such Participating Company's Employment Units.
Profit-Sharing Contributions with respect to a Fiscal Year shall be paid to the
Trustee no later than the due date for filing the Participating Company's
federal income tax return for such Fiscal Year, including extensions. Pre-Tax
Contributions and After-Tax Contributions shall be withheld and paid by the
Employment Unit, and Matching Contributions shall be paid by the Participating
Company to the Trustee no later than 20 days following the last day of the
calendar month in which the amounts were withheld from the Participants'
Compensation, or sooner as required by Federal law.
22
(b) LIMITATION. Contributions under this Article III shall not be
required to the extent they exceed the deduction limitations of section 404 of
the Code, in which case such contributions shall be reduced to the extent
allowable and necessary in the following order: (1) Profit-Sharing
Contributions; (2) Matching Contributions; and (3) Pre-Tax Contributions.
3.10 TREATMENT OF FORFEITED AMOUNTS.
(a) REDUCTION OF CONTRIBUTIONS. Forfeitures shall be allocated to
Employment Units as provided in subsection (b) and used to reduce Profit-Sharing
Contributions and Matching Contributions of the Participating Companies in which
the Employment Units are included.
(b) ALLOCATION OF FORFEITURES TO EMPLOYMENT UNITS. Forfeitures of
Profit-Sharing Contributions and Matching Contributions shall be credited to the
Employment Unit with which the Participant was last employed before the
forfeiture occurred, or as otherwise determined by the Retirement Plan
Administrative Committee.
3.11 FINALITY OF ALLOCATIONS. The Retirement Plan Administrative
Committee shall cause a written benefit statement to be given to each
Participant at least annually setting forth the amount of the contributions
allocated to his Accounts; provided, however, that if any such Participant is
deceased, such statement shall be given to his Beneficiary. Any Participant or
Beneficiary claiming that an error has been made in a benefit statement shall
notify the Retirement Plan Administrative Committee in writing within 90 days
following the delivery or mailing of such statement. The Retirement Plan
Administrative Committee shall review the claim and advise the Participant or
Beneficiary of its decision in writing. If no such notice of error is filed, the
benefit statement shall be presumed to be correct.
23
ARTICLE IV
----------
LIMITATIONS ON CONTRIBUTIONS
----------------------------
4.1 IN GENERAL. Notwithstanding any provisions of Article III to the
contrary, the contributions provided for in Article III shall be limited to the
extent necessary to meet the requirements of this Article IV.
4.2 PRE-TAX CONTRIBUTIONS.
(a) TREATMENT OF CERTAIN CONTRIBUTIONS AS AFTER-TAX. If the
Retirement Plan Administrative Committee determines that a Participant's Pre-Tax
Contributions for a calendar year have reached the dollar limit described in
Section 3.3(a), any additional contributions for that calendar year pursuant to
the Participant's Pre-Tax Contribution election shall be treated in the manner
provided under Section 3.3.
(b) RETURN OF EXCESS DEFERRALS. In the event that a Participant's
Pre-Tax Contributions made to the Plan for a calendar year exceed the dollar
limit described in Section 3.3(a), the excess amount, as adjusted for income and
loss, may, in the discretion of the Retirement Plan Administrative Committee, be
distributed to the Participant no later than April 15 of the following year in
accordance with the requirements of section 402(g) of the Code and Treasury
Regulation section 1.402(g)-l.
4.3 LIMITATIONS ON CONTRIBUTIONS FOR HIGHLY-COMPENSATED EMPLOYEES.
(a) LIMITS IMPOSED BY SECTION 401(K)(3) OF THE CODE.
Notwithstanding the provisions of Section 3.3, if the Pre-Tax Contributions made
for a Plan Year fail to satisfy both of the tests set forth in subparagraphs (1)
and (2) of this paragraph, the adjustments prescribed in Section 4.3(e)(1) shall
be made.
24
(1) The average deferral percentage for the group consisting of
all highly compensated Employees for the Plan Year does not
exceed the product of the average deferral percentage for
the group consisting of all non-highly compensated
Employees for the immediately preceding Plan Year and 1.25.
(2) The average deferral percentage for the group consisting of
all highly compensated Employees for the Plan Year (i) does
not exceed the average deferral percentage of the group
consisting of all non-highly compensated Employees for the
immediately preceding Plan Year by more than 2 percentage
points, and (ii) does not exceed the product of the average
deferral percentage of the group consisting of all
non-highly compensated Employees for the immediately
preceding Plan Year and 2.0.
(b) LIMITS IMPOSED BY SECTION 401(M) OF THE CODE. Notwithstanding
the provisions of Sections 3.1, 3.4 and 3.6, if the aggregate of the Matching
Contributions and After-Tax Contributions made for a Plan Year fail to satisfy
both of the tests set forth in subparagraphs (1) and (2) of this paragraph, the
adjustments prescribed in Section 4.3(e)(2) shall be made.
(1) The average contribution percentage for the group
consisting of all highly compensated Employees for the Plan
Year does not exceed the product of the average
contribution percentage for the group consisting of all
non-highly compensated Employees for the immediately
preceding Plan Year and 1.25.
25
(2) The average contribution percentage for the group
consisting of all highly compensated Employees for the Plan
Year (i) does not exceed the average contribution
percentage of the group consisting of all non-highly
compensated Employees for the immediately preceding Plan
Year by more than 2 percentage points, and (ii) does not
exceed the product of the average contribution percentage
of the group consisting of all non-highly compensated
Employees for the immediately preceding Plan Year and 2.0.
(c) AGGREGATE LIMIT ON CONTRIBUTIONS. Notwithstanding anything
herein to the contrary, for Plan Years commencing prior to January 1, 2002, if
the aggregate of the Pre-Tax Contributions, Matching Contributions and After-Tax
Contributions made for a Plan Year fail to satisfy all of the tests set forth in
subparagraphs (1), (2) and (3) of this paragraph, the adjustments prescribed in
Section 4.3(e)(3) shall be made.
(1) The average deferral percentage for the group consisting of
highly compensated Employees for the Plan Year does not
exceed the product of the average deferral percentage for
the group consisting of all non-highly compensated
Employees for the immediately preceding Plan Year and 1.25.
(2) The average contribution percentage for the group
consisting of highly compensated Employees for the Plan
Year does not exceed the product of the average
contribution percentage for the group consisting of all
non-highly compensated Employees for the immediately
preceding Plan Year and 1.25.
26
(3) The sum of the average deferral percentage (as determined
under Section 4.3(d)(1) after making the adjustments
required by Section 4.3(e)(1) for the Plan Year) and the
average contribution percentage (as determined under
Section 4.3(d)(2) after making the adjustments required by
Section 4.3(e)(2) for the Plan Year) for the group
consisting of highly compensated Employees for the Plan
Year does not exceed the aggregate limit for such Plan
Year.
(d) DEFINITIONS AND SPECIAL RULES. For purposes of this Section:
(1) The "average deferral percentage"
(i) for the group of highly compensated Employees for a
Plan Year shall be the average of the ratios, calculated
separately for each Employee in such group to the nearest
one-hundredth of one percent, of the Pre-Tax Contributions made
for the benefit of such Employee to the total compensation for
such Plan Year paid to such Employee, and
(ii) for the group of non-highly compensated Employees for
the immediately preceding Plan Year shall be the average of the
ratios, calculated separately for each Employee in such group to
the nearest one-hundredth of one percent, of the Pre-Tax
Contributions made for the benefit of such Employee for the
immediately preceding Plan Year to the total compensation for the
immediately preceding Plan Year paid to such Employee.
(2) The "average contribution percentage"
27
(i) for the group of highly compensated Employees for a
Plan Year shall be the average of the ratios, calculated
separately for each Employee in such group to the nearest
one-hundredth of one percent, of the Matching Contributions, the
After-Tax Contributions and, in the Retirement Plan Administrative
Committee's sole discretion, to the extent permitted under rules
prescribed by the Secretary of the Treasury or otherwise under the
law, the Pre-Tax Contributions made during such year for the
benefit of such Employee to such Employee's compensation for such
Plan Year, and
(ii) for the group of non-highly compensated Employees for
the immediately preceding Plan Year shall be the average of the
ratios, calculated separately for each Employee in such group to
the nearest one-hundredth of one percent, of the Employer matching
contributions, After-Tax Contributions and, in the Retirement Plan
Administrative Committee's sole discretion, to the extent
permitted under rules prescribed by the Secretary of the Treasury
or otherwise under the law, the Pre-Tax Contributions made during
the immediately preceding Plan Year for the benefit of such
Employee to such Employee's compensation for the immediately
preceding Plan Year.
(3) The "aggregate limit" shall equal the greater of (A) the
sum of (i) 1.25 times the greater of the average deferral
percentage or the average contribution percentage for the
immediately preceding Plan Year for the group consisting of
non-highly compensated Employees for such immediately
preceding Plan Year, plus (ii) the lesser of (a) the sum of
two percentage points and the lesser of the average
deferral percentage or the
28
average contribution percentage for the immediately
preceding Plan Year for the group consisting of all
non-highly compensated Employees for such immediately
preceding Plan Year, and (b) 200% of the lesser of the
average deferral percentage or the average contribution
percentage for the immediately preceding Plan Year for the
group consisting of all non-highly compensated Employees
for such immediately preceding Plan Year, and (B) the sum
of (i) 1.25 times the lesser of the average deferral
percentage or the average contribution percentage for the
immediately preceding Plan Year for the group consisting of
all non-highly compensated Employees for such immediately
preceding Plan Year, plus (ii) the lesser of (a) the sum of
two percentage points plus the greater of the average
deferral percentage or the average contribution percentage
for the immediately preceding Plan Year for the group
consisting of all non-highly compensated Employees for such
immediately preceding Plan Year, and (b) 200% of the
greater of the average deferral percentage and the average
contribution percentage for the immediately preceding Plan
Year for the group consisting of all non-highly compensated
Employees for such immediately preceding Plan Year;
(4) "highly compensated Employee" shall mean any Employee who
has become a Participant who performs services in the
determination year and is in one or more of the following
groups: (i) Employees who were five percent owners as
determined in section 416(i)(1)(A)(iii) of the Code at any
time during the determination year or the look-back year,
or (ii)
29
Employees with compensation greater than $85,000 (as
adjusted pursuant to section 415(d) of the Code) during the
look-back year and who were in the top-paid group during
the look-back year. Any former Employee who had a
separation year prior to the determination year and was a
highly compensated Employee as described in any of clauses
(i) and (ii) above for either (A) his separation year or
(B) any determination year ending on or after this
attainment of age 55 shall be considered a "highly
compensated Employee". For purposes of determining whether
a person is a highly compensated Employee of a
Participating Company with respect to a Plan Year, the term
"determination year" means the Plan Year for which the
determination is being made; the term "look-back year"
means the twelve-month period immediately preceding the
determination year; the term "top-paid group" means the top
20% of employees of the Participating Company ranked on the
basis of compensation received during the year (provided,
however, that when determining the number of employees in
such group, employees described in section 414(q)(8) of the
Code and Q&A 9(b) of Treasury Regulation section
1.414(q)-1T are excluded); "compensation" means
compensation within the meaning of section 415(c)(3) of the
Code, including elective or salary reduction contributions
to a cafeteria plan, qualified transportation fringe
benefits, cash or deferred arrangement or tax-sheltered
annuity; employers aggregated under section 414(b), (c),
(m) or (o) of the Code are treated as a single employer;
and "separation year" means the determination year the
30
Employee separates from service with the applicable
Participating Company.
(5) "non-highly compensated Employee" shall mean any Employee
who has become a Participant who performs services in the
determination year (as defined in subparagraph (4) of this
paragraph) and is not a highly compensated Employee.
(6) "compensation" shall have the meaning set forth in section
414(s) of the Code or, in the discretion of the Retirement
Plan Administrative Committee, any other meaning in
accordance with the Code for these purposes;
(7) if the Plan and one or more other plans of a Participating
Company or any of its affiliates to which pre-tax
contributions, matching contributions or employee
contributions (as such terms are defined for purposes of
section 401(m) of the Code), or qualified non-elective
contributions (as such term is defined in section
401(m)(4)(C) of the Code), are made are treated as one plan
for purposes of section 410(b) of the Code, such plans
shall be treated as one plan for purposes of this Section.
If a highly compensated Employee participates in the Plan
and one or more other plans of his employer or any of its
affiliates to which any such contributions are made, all
such contributions shall be aggregated for purposes of this
Section.
(e) ADJUSTMENTS TO COMPLY WITH LIMITS. (1) ADJUSTMENTS TO
COMPLY WITH SECTION 401(k)(3) OF THE CODE. The Retirement
Plan Administrative
31
Committee shall cause to be made such periodic computations
as it shall deem necessary or appropriate to determine
whether either of the tests set forth in Section 4.3(a)(1)
or 4.3(a)(2) will be satisfied during a Plan Year and, if
it appears to the Retirement Plan Administrative Committee
that neither of such tests will be satisfied, the
Retirement Plan Administrative Committee shall take such
steps as it deems necessary or appropriate to adjust the
Pre-Tax Contributions made for all or a portion of the
remainder of such Plan Year on behalf of each Participant
who is a highly compensated Employee to the extent
necessary in order for one of such tests to be satisfied.
If after the end of a Plan Year it is determined that
regardless of any such steps taken neither of the tests set
forth in Section 4.3(a)(1) or 4.3(a)(2) will be satisfied
with respect to such Plan Year, the Retirement Plan
Administrative Committee shall calculate a total amount by
which Pre-Tax Contributions must be reduced in order to
satisfy either such test, in the manner prescribed by
section 401(k)(8)(B) of the Code (the "excess contributions
amount"). The amount of Pre-Tax Contributions to be reduced
for each Participant who is a highly compensated Employee
shall be determined by first reducing the Pre-Tax
Contributions of each Participant whose actual dollar
amount of Pre-Tax Contributions for such Plan Year is the
highest until such reduced dollar amount equals the next
highest actual dollar amount of Pre-Tax Contributions made
for such Plan Year on behalf of any highly compensated
Participant or until the total reduction equals the excess
32
contributions amount. If further reductions are necessary,
then such contributions on behalf of each Participant who
is a highly compensated Employee and whose actual dollar
amount of Pre-Tax Contributions made for such Plan Year is
the highest (determined after the reduction described in
the previous sentence) shall be reduced in accordance with
the previous sentence. Such reductions shall continue to be
made to the extent necessary so that the total reduction
equals the excess contributions amount. The amount by which
Pre-Tax Contributions are to be reduced in accordance with
this Section 4.3(e) shall be deemed to be After-Tax
Contributions and any Matching Pre-Tax Contributions made
with respect to such Pre-Tax Contributions shall be deemed
to be After-Tax Matching Contributions. The amount by which
a Participant's Pre-Tax Contributions are reduced in
accordance with this Section 4.3(e) shall be reduced by any
Pre-Tax Contributions previously distributed to such
Participant pursuant to Section 4.2 for such Plan Year. The
amount of any income allocable to any such reductions shall
be determined pursuant to applicable regulations
promulgated by the U.S. Treasury Department. The unadjusted
amount of any reductions distributed shall be treated as
"annual additions" for purposes of Section 4.4.
(2) ADJUSTMENTS TO COMPLY WITH SECTION 401(m) OF THE CODE. The
Retirement Plan Administrative Committee shall cause to be
made such periodic computations as it shall deem necessary
or appropriate to determine whether either of the tests set
forth in Section 4.3(b)(1) or 4.3(b)(2) will be
33
satisfied during a Plan Year with respect to the Plan, and
if it appears to the Retirement Plan Administrative
Committee that neither of such tests will be satisfied, the
Retirement Plan Administrative Committee shall take such
steps as it deems necessary or appropriate to adjust the
Matching Contributions and the After-Tax Contributions made
for all or a portion of the remainder of such Plan Year on
behalf of each Participant who is a highly compensated
Employee to the extent necessary in order for one of such
tests to be satisfied. If after the end of a Plan Year it
is determined that regardless of any steps taken neither of
the tests set forth in Section 4.3(b)(1) or 4.3(b)(2) will
be satisfied with respect to such Plan Year, the Retirement
Plan Administrative Committee shall calculate the maximum
contribution percentage permissible for Participants who
are highly compensated Employees under the tests set forth
in Sections 4.3(b)(1) and 4.3(b)(2) and reduce the Matching
Contributions and After-Tax Contributions made on behalf of
each Participant who is a highly compensated Employee and
whose actual dollar amount of Matching Contributions and
After-Tax Contributions for such Plan Year is the highest
in the same manner described in subparagraph (1) of this
paragraph to the extent necessary to comply with Section
4.3(b)(1) or 4.3(b)(2). The reduction described in the
foregoing sentence shall be made first with respect to a
Participant's After-Tax Contributions in excess of six
percent of Compensation, second with respect to any
remaining After-Tax Contributions and any Matching
After-Tax
34
Contributions attributable thereto, third with respect to
any Matching Pre-Tax Contributions. The Retirement Plan
Administrative Committee shall distribute no later than the
last day of the subsequent Plan Year to each such
Participant the amount of such reductions made with respect
to vested Matching Contributions and After-Tax
Contributions plus any income allocable thereto to which
such Participant would be entitled under the Plan if such
Participant had terminated service on the last day of the
Plan Year for which such contributions are made (or earlier
if such Participant actually terminates service at any
earlier date), and any remaining amount of such reductions
plus any income allocable thereto shall be forfeited and
used to reduce contributions in accordance with Section
3.10. The amount of any such income allocable to any such
reductions to be so distributed or forfeited shall be
determined pursuant to applicable regulations promulgated
by the U.S. Treasury Department.
(3) ADJUSTMENTS TO COMPLY WITH THE AGGREGATE LIMIT. For Plan
Years commencing prior to January 1, 2002, if after making
the adjustments required by subparagraphs (1) and (2) of
this paragraph for a Plan Year the Retirement Plan
Administrative Committee determines that the sum of the
average deferral percentage and the average contribution
percentage for the group consisting of Participants who are
highly compensated Employees exceeds the aggregate limit
for such Plan Year, the Retirement Plan Administrative
Committee shall no later than the last day of the
subsequent Plan Year reduce (i) first the After-Tax
Contributions made for
35
such Plan Year on behalf of each Participant who is a
highly compensated Employee and any corresponding Matching
Contributions and (ii) second, the Pre-Tax Contributions
made for such Plan Year on behalf of each Participant who
is a highly compensated Employee and any corresponding
Matching Contributions to the extent necessary to eliminate
such excess. Such reduction shall be effected in the same
manner described in subparagraphs (1) and (2), as
applicable, of this Section 4.3(e).
(4) DISCOUNT ON SHARES OF COMMON STOCK TREATED AS MATCHING
CONTRIBUTION. Solely for purposes of this Section 4.3, if
shares of common stock of the Corporation are contributed
to the Plan at a discount from fair market value as a
Pre-Tax Contribution, then the amount of such discount
shall be treated as a Matching Pre-Tax Contribution.
4.4 LIMITATIONS ON ANNUAL ADDITIONS.
(a) THE DEFINED CONTRIBUTION LIMIT. The "annual addition," as
defined herein, for any Plan Year to a Participant's accounts in all defined
contribution plans maintained by each Participating Company or Related Company
shall not exceed the lesser of (1) 25 percent of the Participant's Compensation
for the Plan Year, and (2) $35,000 (as adjusted in accordance with section
415(d) of the Code). The term "annual additions" means the sum of all
contributions and forfeitures allocated to a Participant's accounts (other than
a rollover account).
(b) REDUCTION OF CONTRIBUTIONS. If the Retirement Plan
Administrative Committee determines at any time that the annual addition to any
Participant's Accounts exceeds
36
such limitation for any Plan Year, then the contributions on behalf of the
Participant shall be reduced, to the extent necessary, in the following order:
(1) Pre-Tax Contributions in excess of six percent of the
Participant's Compensation;
(2) Remaining Pre-Tax Contributions and Matching Pre-Tax
Contributions attributable thereto on a pro rata basis;
(3) Profit-Sharing Contributions;
(4) After-Tax Contributions in excess of six percent of the
Participant's Compensation;
(5) Remaining After-Tax Contributions and Matching After-Tax
Contributions attributable thereto on a pro rata basis.
After-Tax Contributions and Pre-Tax Contributions, each as adjusted for
gains, shall be returned to the Participant. Matching Contributions and
Profit-Sharing Contributions, as adjusted for gains, to the extent allowable
shall be held in a suspense account and allocated to the accounts of such
Participant in the next Plan Year. If the Participant is not covered by the Plan
in the next Plan Year, the amount shall be allocated to the remaining
Participants in the Plan who are employed by the Employment Unit that employed
the Participant.
37
ARTICLE V
---------
VESTING AND FORFEITURES
-----------------------
5.1 IN GENERAL. A Participant shall have a fully vested interest at all
times in his Pre-Tax Account, After-Tax Account, Harris Stock Pre-Tax Account,
Harris Stock After-Tax Account and Savings Account (other than the portion of
such accounts attributable to matching contributions made after October 1, 1984)
and Rollover Account.
5.2 VESTING ON RETIREMENT, DEATH OR DISABILITY. A Participant shall
have a fully vested interest in his Profit Sharing Account, Matching Pre-Tax
Account, Matching After-Tax Account, Harris Stock Matching Account, and portion
of his Savings Account attributable to matching contributions made after October
1, 1984, on termination of his employment by any Related Company in the event of
the Participant's:
(a) retirement on or after Early Retirement Age;
(b) retirement on or after the effective date of the
Participant's Disability; or
(c) death.
5.3 VESTING ON OTHER TERMINATION OF EMPLOYMENT.
(a) VESTING SCHEDULE. A Participant who terminates employment
other than on the occurrence of one of the events described in Section 5.2 shall
have a vested interest in his Profit-Sharing Account, Matching Pre-Tax Account,
Matching After-Tax Account, Harris Stock Matching Account and the portion of his
Savings Account attributable to matching contributions made after October 1,
1984 in accordance with the following schedule:
38
Years of Service Vested Percentage
---------------- -----------------
Less than 3 years 0%
3 years but less than 4 years 30%
4 years but less than 5 years 40%
5 years but less than 6 years 60%
6 years but less than 7 years 80%
7 years or more 100%
(b) COMPUTING A PARTICIPANT'S SERVICE. All periods of Service
shall be taken into account for purposes of subsection (a). In addition, (i) in
the case of a Participant whose employment is terminated by a Related Company or
Participating Company in connection with a reduction-in-force, the period of
time that begins on the Participant's employment termination date and ends 12
months thereafter shall be taken into account for purposes of subsection (a) and
(ii) any prior Service or period of absence shall be taken into account in
determining a Participant's Service for purposes of subsection (a) as provided
in Section 2.3(a) and 2.3(b).
(c) VESTING ON SALE OF BUSINESS. In the event of the sale or
disposition of a business or a sale of substantially all of the assets of a
trade or business, the Corporation may, in its discretion, provide for
accelerated vesting with respect to those Participants affected by the sale.
5.4 EFFECT OF IN-SERVICE WITHDRAWALS ON A PARTICIPANT'S VESTED
PERCENTAGE. If a Participant receives a withdrawal under Article IX or a
distribution under Article VII from his
39
Profit-Sharing Account at a time when the Participant has less than a fully
vested interest in that account, the dollar amount of his vested interest in his
Profit-Sharing Account (X) shall be determined at any subsequent time by the
following formula:
X = P(AB + D) - D
For the purpose of applying the formula, P is the percentage of the
Participant's interest in his Profit-Sharing Account that is vested at the time
the determination is made, AB is the balance credited to the Profit-Sharing
Account at the time the determination is made, and D is the amount of the
withdrawal.
40
5.5 FORFEITURES.
(a) TIMING OF FORFEITURE. A Participant who terminates employment
with less than a fully vested interest in his Accounts shall forfeit the
nonvested interest of such Accounts upon termination of employment.
(b) EFFECT OF PARTIAL DISTRIBUTION ON A PARTICIPANT'S VESTED
PERCENTAGE. If the Participant elects to receive a lump sum distribution of less
than the full amount of his vested interest, the part of his nonvested interest
that shall be forfeited under subsection (a) is the total nonvested interest
multiplied by a fraction, the numerator of which is the amount of the
distribution and the denominator of which is the total value of his vested
interest in his Accounts other than his After-Tax Account, Harris Stock
After-Tax Account and Rollover Account.
(c) EFFECT OF REEMPLOYMENT ON FORFEITURE. If a Participant incurs
a forfeiture under subsection (a) and subsequently returns to employment with a
Participating Company and becomes a Participant in the Plan before incurring
five consecutive one-year Periods of Severance, then the forfeited amount shall
be restored by the Employment Unit of the Participating Company with which the
Participant is reemployed.
41
ARTICLE VI
----------
ACCOUNTS AND INVESTMENTS
------------------------
6.1 ESTABLISHMENT OF ACCOUNTS. The Retirement Plan Administrative
Committee shall establish and maintain for each Participant the following
Accounts showing the Participant's interest under the Plan:
(a) Profit-Sharing Account to reflect Profit-Sharing Contributions
made on the Participant's behalf.
(b) Pre-Tax Account to reflect Pre-Tax Contributions made on the
Participant's behalf other than those invested in the Harris Stock Fund;
(c) After-Tax Account to reflect After-Tax Contributions made on
the Participant's behalf other than those invested in the Harris Stock Fund;
(d) Matching Pre-Tax Account to reflect Matching Pre-Tax
Contributions made on the Participant's behalf other than those invested in the
Harris Stock Fund;
(e) Matching After-Tax Account to reflect Matching After-Tax
Contributions made on the Participant's behalf other than those invested in the
Harris Stock Fund;
(f) Savings Account to reflect the Savings Contributions under the
Plan as in effect prior to July 1, 1990, and the aggregate of the Participant's
voluntary and required contributions to the Harris Video Systems
Savings/Incentive Plan less withdrawals, as of June 30, 1990;
(g) Harris Stock Pre-Tax Account to reflect the portion of the
Pre-Tax Contributions made on the Participant's behalf invested in the Harris
Stock Fund;
42
(h) Harris Stock After-Tax Account to reflect the portion of the
After-Tax Contributions made on the Participant's behalf invested in the Harris
Stock Fund;
(i) Harris Stock Matching Account to reflect the portion of the
Matching Pre-Tax Contributions and Matching After-Tax Contributions made on the
Participant's behalf and invested in the Harris Stock Fund; and
(j) Rollover Account to reflect the Participant's Rollover
Contributions.
6.2 INVESTMENT OF ACCOUNTS. Subject to Section 6.4, each Participant
shall have the right to direct the investment of his Accounts and future
contributions to his Accounts among the Investment Funds in accordance with the
following procedures and such other procedures provided in the documents
pertaining to each Investment Fund.
(a) ELECTION PROCEDURES. Each election shall be made in accordance
with the rules and procedures established by the Retirement Plan Administrative
Committee in its absolute discretion.
(b) ELECTIONS FOR CURRENT BALANCES. A Participant's election to
transfer his or her Account balances between Investment Funds shall be made with
respect to the Investment Fund from which the amount is to be transferred in
either (i) increments of one percent (or such larger percentage as determined by
the Retirement Plan Administrative Committee) or (ii) a fixed dollar amount.
(c) ELECTIONS IN 1% INCREMENTS FOR FUTURE CONTRIBUTIONS. A
Participant's election with respect to future contributions shall be made in
increments of one percent (or such larger percentage as determined by the
Retirement Plan Administrative Committee) of the
43
contribution (after the contribution is reduced by any dollar amount directed
into the Harris Stock Fund), provided that the combined Pre-Tax Contributions
and After-Tax Contributions invested in the Harris Stock Fund shall equal no
more than one percent (or such larger percentage as determined by the Retirement
Plan Administrative Committee) of Compensation as provided under Section 6.4(a).
To the extent Pre-Tax Contributions and After-Tax Contributions are invested in
the Harris Stock Fund, the Matching Contributions attributable thereto also
shall be invested in the Harris Stock Fund;
(d) CHANGING ELECTIONS. A Participant may elect to change his
investment election at such times and in such manner as determined by the
Retirement Plan Administrative Committee. An investment election change shall be
effective on the day the change is made, provided that such day is a Valuation
Date and that the Participant makes the election change on such date before the
deadline established from time to time by the Retirement Plan Administrative
Committee, except as provided in the last sentence of this subsection (d). An
investment election change (i) made on a day that is not a Valuation Date or
(ii) made on a Valuation Date after the deadline established by the Retirement
Plan Administrative Committee shall become effective on the next following
Valuation Date. If more than one election change is made on a Valuation Date
before the applicable deadline, the most recent election change shall be given
effect. Notwithstanding the foregoing, certain Investment Funds may be subject
to additional restrictions on investment election changes according to such
Investment Fund's terms or conditions imposed by the Retirement Plan
Administrative Committee.
(e) ELECTIONS APPLY TO ALL ACCOUNTS. Each of the Participant's
Accounts shall be invested among the Investment Funds in the same manner, such
that each election by a
44
Participant with respect to the Investment Funds shall apply to all of his
Accounts in the same proportion.
(f) INVESTMENT ABSENT ELECTION. A Participant's Accounts and
contributions made on behalf of the Participant shall be invested in such
Investment Fund as the Retirement Plan Administrative Committee shall designate
from time to time until the Participant makes a valid investment election
pursuant to this Section 6.2.
6.3 ALLOCATION OF EARNINGS AND LOSSES. In determining a Participant's
share of the earnings or losses of each of the Investment Funds as of any
Valuation Date, the total earnings or losses of the particular Investment Fund
since the immediately preceding Valuation Date, net of expenses allocable to
such fund, shall be allocated among the Participants' Accounts invested in the
fund on such Valuation Date based on the ratio of each Participant's Accounts to
the aggregate of the Accounts of all Participants, before taking into account
any contributions or loan repayments that are required to be but are not yet
made as of the Valuation Date and before taking into account any transfers
resulting from investment election changes pursuant to Section 6.2(d),
distributions, withdrawals or loans to Participants made as of the Valuation
Date. Contributions and loan repayments to an Account are not credited with
earnings for the Valuation Date on which the contributions or loan repayments
are credited to the Account.
6.4 SPECIAL RULES CONCERNING HARRIS STOCK FUND. Notwithstanding any
provision of Section 6.2 to the contrary, the rules set forth in this Section
shall apply to investments in the Harris Stock Fund.
(a) AVAILABILITY. Only Pre-Tax Contributions, After-Tax
Contributions and Matching Contributions made with respect to Compensation
earned on or after October 1, 1993
45
may be invested in the Harris Stock Fund. For any Plan Year, the combined
Pre-Tax Contributions and After-Tax Contributions invested in the Fund on behalf
of a Participant in each Plan Year shall equal no more than one percent (or such
larger percentage as determined by the Retirement Plan Administrative Committee)
of the Participant's Compensation for such Plan Year. The portion of any Pre-Tax
Contribution or After-Tax Contribution that is attributable to a discount from
fair market value on shares of common stock of the Corporation shall be
disregarded for purposes of the immediately preceding sentence. An election to
invest in the Harris Stock Fund shall take effect as soon as administratively
feasible after the election is received.
(b) RESTRICTIONS ON TRANSFERS. A Participant may not transfer
amounts from other Investment Funds to the Harris Stock Fund. Any contributions
invested in the Harris Stock Fund must remain in the fund for a minimum of two
Plan Years following the end of the Plan Year in which the investment is made
(the "Holding Period"), provided that amounts invested in the Harris Stock Fund
may be distributed to the Participant before the expiration of the Holding
Period if the Participant is otherwise entitled to a distribution under the
Plan. The Retirement Plan Administrative Committee, in its sole discretion, may
impose additional restrictions or requirements regarding transfers from the
Harris Stock Fund.
(c) DIVIDENDS. A Participant's allocable share of cash or stock
dividends (and other cash earnings) credited to the Harris Stock Fund will be
reinvested in the Harris Stock Fund and shall be subject to the same Holding
Period as applies to the underlying stock on which the dividend (or other
earnings) is paid pursuant to Section 6.4(b).
46
(d) CONTRIBUTIONS. The normal form of contributions for amounts
invested in the Harris Stock Fund shall be in cash; provided, however, that the
Corporation, in its discretion, may make the contribution in common stock of the
Corporation, which may be contributed at a discount from fair market value. The
Trustee is authorized to purchase common stock of the Corporation on the open
market, and to give effect to the discount, if any, established from time to
time by allocating shares to each Participant's Account in addition to the
number of shares that would have been allocated to the Participant's Account if
the discount had not been established.
(e) DISTRIBUTIONS. Distributions from the Harris Stock Fund shall
be in the form of cash or shares of Harris Stock at the election of the
Participant. Fractional shares and distributions of a de minimis amount as
determined by the Retirement Plan Administrative Committee shall be paid in
cash.
(f) VOTING. Participants may submit non-binding proxies to the
Trustee, which will vote the shares in the Harris Stock Fund in the exercise of
its sole discretion.
ARTICLE VII
-----------
DISTRIBUTIONS
-------------
7.1 IN GENERAL. A Participant shall be entitled to receive a
distribution of the vested interest in his Accounts upon the Participant's
termination of employment. As permitted under law and as may be determined by
the Retirement Plan Administrative Committee in its sole discretion,
distributions may be made to affected Participants upon the sale or disposition
of the stock in a subsidiary or the sale or disposition of assets of a trade or
business. A termination of employment shall not be deemed to occur for purposes
of this Section 7.1 and Section 7.2 until
47
the Participant is no longer employed by a Related Company. A Participant may
elect, in accordance with procedures established by the Retirement Plan
Administrative Committee, to receive the sum of the balances of his Accounts, if
any, that are invested in the Harris Stock Fund either in (a) cash, or (b) in
shares of common stock of the Corporation; provided, however, that distributions
of fractional shares and de minimis amounts (as determined by the Retirement
Plan Administrative Committee) shall be made in cash. If a Participant has
elected to receive a distribution of the balances of his Accounts that are
invested in the Harris Stock Fund in shares of common stock of the Corporation,
then such distribution shall, in the discretion of the Retirement Plan
Administrative Committee, either be made in certificated form or credited to an
account established for the Participant under a plan maintained by a Related
Company.
7.2 SMALL BENEFIT CASH-OUT. Except as provided in Section 7.5, in any
case in which the vested interest in a Participant's Accounts does not exceed
$5,000 (or such larger amount as may be permitted by law) the vested interest
shall be paid to the Participant in a lump sum as soon as reasonably practicable
after the Participant's termination of employment. In the case of a deceased
Participant, such vested interest shall be paid, to the deceased Participant's
beneficiary in a lump sum as soon as reasonably practicable after the
Participant's death, except that if such Beneficiary is the deceased
Participant's spouse, then the Beneficiary may elect a direct rollover in
accordance with Section 7.5. Effective as of March 22, 1999, for purposes of
this Section 7.2 and Section 12.6, if at the time of commencement of the
distribution of a Participant's vested interest in his Accounts in scheduled
periodic payments the value of such interest exceeded $5,000, then at the time
of any subsequently scheduled periodic payment such account balance will be
deemed to exceed $5,000 (or such larger amount as may be permitted by law)
unless otherwise permitted under the law.
48
7.3 FORM OF PAYMENT.
(a) OPTIONS. In any case in which a Participant's vested interest
in his Accounts exceeds the amount provided in Section 7.2, the Participant (or
in the event of death, his Beneficiary) entitled to receive a distribution may
elect at any time to receive payment in:
(1) an amount not greater than the vested balance of the
Participant's Accounts, provided, however, that only one
such payment may be made in any single month;
(2) substantially equal periodic installment payments, payable
not less frequently than annually and not more frequently
than monthly, over a period of time to be elected by the
Participant (or Beneficiary);
(3) a combination of (1) and (2); or
(4) a direct rollover pursuant to Section 7.5.
(b) CHANGES ALLOWED. A Participant (or, in the event of death, his
Beneficiary) may change his election with respect to the form of payment at any
time before or after distribution of benefits commences, subject to the
provisions of Section 7.8.
(c) EFFECT OF FAILURE TO SPECIFY AN OPTION. If a Participant (or
Beneficiary) fails to file an election under this Section 7.3, then his benefits
shall be paid in accordance with Section 7.4.
7.4 TIME OF PAYMENT.
(a) On termination of employment, a Participant, other than one
described in Section 7.2, may elect that payment of benefits begins as soon as
administratively practicable or
49
at any other time permitted under the Plan. If such a Participant fails to file
an election as to the timing of his benefit payment, then payment of his benefit
shall commence in accordance with the provisions of Section 7.8.
(b) If a Participant dies before his required beginning date (as
described in Section 7.8(b)) and there is no election in effect with respect to
the payment of the Participant's benefits to his Beneficiary who is not his
spouse, then payment of the Participant's benefits shall be made in a single sum
no later than the December 31 of the calendar year which contains the fifth
anniversary of the Participant's death.
(c) Installment payments described in Section 7.3(a)(2) or (3)
shall not be made to a Participant who terminated employment with a
Participating Company and who subsequently becomes employed by a Participating
Company, unless such Participant has attained age 59 1/2 on or before the date
of such subsequent employment. Any remaining Account balances shall be
distributed to the Participant in accordance with the terms of this Article VII
upon the earlier to occur of the Participant's (i) subsequent termination of
employment and (ii) attainment of age 59 1/2.
7.5 DIRECT ROLLOVER.
(a) A Participant or "distributee" may elect at any time to have
any portion of an "eligible rollover distribution" paid in a direct rollover to
the trustee or custodian of an "eligible retirement plan" specified by the
Participant or distributee, whichever is applicable. Payment of a direct
rollover in the form of a check payable to the trustee or custodian of an
eligible retirement plan, for the benefit of the Participant or distributee, may
be mailed to the Participant or distributee.
50
(b) For purposes of this Section 7.5, the following terms shall
have the following meanings:
(1) "distributee" means a surviving spouse, or a spouse or
former spouse who is an alternate payee under a qualified
domestic relations order defined in section 414(p) of the
Code.
(2) "eligible retirement plan" means 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 an eligible rollover distribution.
(3) "eligible rollover distribution" means any distribution of
all or a portion of the Participant's Accounts, other than
the portion of his After-Tax Account and Harris Stock
After-Tax Account attributable to After-Tax Contributions,
but does not include a distribution (i) in installments
over a period of ten years or more or over a period
described in Section 7.8(c), (ii) to the extent the
distribution is required under section 401(a)(9) of the
Code or (iii) to the extent the distribution constitutes a
hardship distribution of Pre-Tax Contributions described in
section 401(k)(2)(B)(i)(IV) of the Code.
7.6 BENEFIT AMOUNT AND WITHHOLDING.
(a) VESTED AMOUNT AND ADJUSTMENTS. For purposes of this Article
VII, a Participant's vested interest in his Accounts shall be determined as of
the Valuation Date
51
coinciding with or immediately following the date of the event giving rise to
the distribution, plus any Profit-Sharing Contribution to which the Participant
may be entitled under Section 3.2 that has not yet been credited to the
Participant's Profit-Sharing Account. Any unpaid amount in the Participant's
Accounts shall continue to be adjusted for earnings and losses as provided in
Section 6.3 until it is distributed.
(b) WITHHOLDING. The amount of any distribution shall be reduced
to the extent necessary to comply with Federal, state and local income tax
withholding requirements.
7.7 ORDER OF DISTRIBUTIONS. Any distribution under this Plan shall be
charged against the Participant's Accounts pursuant to administrative procedures
designed to maximize the tax benefits to the Participant by distributing to him
first his After-Tax Contributions to the extent permitted by law.
7.8 STATUTORY REQUIREMENTS. Notwithstanding any other provisions of the
Plan to the contrary, the following rules shall apply to all payments under the
Plan:
(a) LATEST COMMENCEMENT DATE. Unless the Participant files a
written election to defer payment of benefits, benefits payments with respect to
any Participant shall commence no later than the 60th day after the close of the
Plan Year in which the latest of the following occurs:
(1) the date on which the Participant attains Normal Retirement
Age;
(2) the 10th anniversary of the date on which the Participant
commenced participation in the Plan; and
52
(3) the date on which the Participant terminated employment.
Failure to file an election under Section 7.4 for payment
of benefits to commence shall be deemed to be a written
election to defer payment of benefits under this subsection
(a).
(b) REQUIRED BEGINNING DATE. Notwithstanding subsection (a) above,
payment of benefits to a Participant shall commence no later than the later of
(i) April 1 of the calendar year following the calendar year in which the
Participant attains age 70 1/2 and (ii) April 1 of the calendar year following
the calendar year in which the Participant retires.
(c) MAXIMUM DURATION OF DISTRIBUTIONS. Payment of a Participant's
benefit shall be made over a period not to exceed one of the following periods:
(1) the life of the Participant;
(2) the life of the Participant and the Participant's
Beneficiary;
(3) a period certain not extending beyond the life expectancy
of the Participant; or
(4) a period certain not extending beyond the joint and last
survivor expectancy of the Participant and his Beneficiary.
(d) MINIMUM DISTRIBUTION REQUIREMENTS. With respect to
distributions under the Plan made for calendar years beginning on or after
January 1, 2001, the Plan will apply the minimum distribution requirements of
section 401(a)(9) of the Code in accordance with the regulations under section
401(a)(9) that were proposed on January 17, 2001, notwithstanding any
53
provision of the Plan to the contrary. This Section 7.8(d) shall continue in
effect until the end of the last calendar year beginning before the effective
date of final regulations under section 401(a)(9) of the Code or such other date
specified in guidance published by the Internal Revenue Service.
(e) DISTRIBUTION AFTER THE PARTICIPANT'S DEATH. In the event a
Participant who is receiving benefits dies, the remaining balance of his
benefits shall be distributed at least as rapidly as under the method of
distribution elected by the Participant unless otherwise permitted under law. If
a Participant dies before distribution of benefits commences, the Participant's
entire interest will be distributed no later than five years after the end of
the year of the Participant's death, except to the extent that an election is
made to receive distributions in accordance with (1) or (2) below:
(1) if any portion of the Participant's benefit is payable to a
Beneficiary who is not the Participant's spouse, then
distributions may be made over the life or life expectancy
of the Beneficiary, provided that distributions commence on
or before December 31 of the calendar year immediately
following the calendar year in which the Participant died,
and
(2) if the Beneficiary is the Participant's spouse, then
distributions may commence on or before the later of (i)
December 31 of the calendar year immediately following the
calendar year in which the Participant died and (ii)
December 31 of the calendar year in which the Participant
would have attained age 70 1/2. If the Participant's spouse
dies before payments begin,
54
then subsequent distribution shall be made as if the spouse
had been the Participant.
Any amount paid to a child of the Participant shall be treated as if it
had been paid to the surviving spouse if the amount becomes payable to the
spouse when the child reaches the age of majority.
7.9 DESIGNATING BENEFICIARIES.
(a) WRITTEN DESIGNATION. Each Participant may designate, in the
manner prescribed by the Retirement Plan Administrative Committee, a Beneficiary
or Beneficiaries to receive any benefits payable as a result of the death of the
Participant. This designation may be changed by the Participant at any time by
giving notice to the Retirement Plan Administrative Committee in accordance with
rules and procedures established by the Retirement Plan Administrative
Committee. Any designation of a Beneficiary other than the Participant's spouse
must be consented to by the spouse in writing (or other method permitted by the
Internal Revenue Service) and witnessed by a notary public (or a representative
of the Plan prior to October 1, 1993). Any consent required under this Section
7.9 shall be valid only with respect to the spouse who signed it. Spousal
consent shall not be required if the Participant establishes to the satisfaction
of a Plan representative that such consent may not be obtained because (a) there
is no spouse; (b) the spouse cannot be located, or (c) there exists such other
circumstances as the Secretary of the Treasury may prescribe as excusing the
requirement for such consent. A Participant may revoke any prior election
without obtaining the consent of the spouse to such revocation. In the absence
of a new election that meets the requirements of this Section 7.9, the
Participant's surviving spouse shall be the Beneficiary.
55
(b) DEATH PRIOR TO DESIGNATING BENEFICIARY OR DEATH AFTER
DESIGNATED BENEFICIARY'S DEATH. In the event a Participant dies with no
beneficiary designation on file or after the death of a designated Beneficiary,
the Participant's Beneficiary with respect to the portion of the benefits for
which no Beneficiary has been designated shall be the deceased Participant's
surviving spouse, if any, and if there is no surviving spouse, the descendants
of the deceased Participant, if any, per stirpes, or if there are no
descendants, the estate of the deceased Participant.
(c) SUCCESSOR BENEFICIARIES. A Beneficiary who has been designated
in accordance with Section 7.9(a) may name a successor beneficiary or
beneficiaries in accordance with procedures established by the Retirement Plan
Administrative Committee. If the designated Beneficiary dies after the
Participant and before the entire amount of the Participant's benefit under the
Plan in which the designated Beneficiary has an interest has been distributed,
then any remaining amount shall be distributed, as soon as practicable after the
death of such designated Beneficiary, in the form of a single sum payment to the
successor beneficiary or if there is no such successor beneficiary, to the
Beneficiary's estate.
7.10 PAYMENT OF GROUP INSURANCE PREMIUMS. The Retirement Plan
Administrative Committee may, in its sole discretion, permit a retired
Participant who (i) is eligible to be included in any contributory group
insurance program maintained or sponsored by an Employment Unit, (ii) is
receiving benefits under the Plan in monthly installments and (iii) elects to be
covered under such contributory group insurance program to direct that a
specified portion of the installment payments be withheld and paid by the
Trustee on the Participant's behalf to the Employment Unit as his contribution
under such group insurance program. Such direction by a retired Participant, if
permitted by the Retirement Plan Administrative Committee, shall be in
56
writing on a form prescribed by the Retirement Plan Administrative Committee.
Any such direction may be revoked by the retired Participant not less than 15
days prior to the effective date of such revocation. Any withholding and payment
of insurance costs on behalf of a retired Participant shall be made in
accordance with Treasury Regulation section 1.401(a)-13.
7.11 INABILITY TO LOCATE PARTICIPANT. If, at any time after a
Participant's benefit becomes payable, a check or other instrument in payment of
such benefit is returned unclaimed or the Retirement Plan Administrative
Committee is otherwise unable to locate the individual to whom a payment is due,
then all payments to such individual shall be discontinued. If, after exercising
reasonable diligence, the Retirement Plan Administrative Committee is unable to
locate such individual, the portion of the Participant's benefit payable to such
individual shall be forfeited and applied to reduce the administrative expenses
of the Plan; provided, that if such individual subsequently makes a claim for
benefits, then the forfeited amount shall be reinstated to the extent required
by law by the Participating Company that last employed the Participant.
ARTICLE VIII
------------
LOANS
-----
8.1 LOANS TO PARTICIPANTS.
(a) MAKING OF LOANS. Subject to the restrictions set forth in this
section, the Retirement Plan Administrative Committee shall establish a loan
program whereby any Participant who is currently employed by a Participating
Company may request, by such method prescribed by the Retirement Plan
Administrative Committee for such purpose, to borrow funds from such
Participant's Pre-Tax Account, After-Tax Account and Rollover Account. The
principal balance of such loan shall not be less than $500, shall be in
increments of $100 and
57
shall not exceed the lesser of:
(1) 50% of the vested portion of the Participant's Account as
of the Valuation Date coinciding with or immediately
preceding the date on which the loan is made; and
(2) $50,000, reduced by the highest outstanding loan balance of
the Participant of any previous loans from the Plan and any
other plans of a Related Company during the one year period
ending immediately before the date of which the current
loan is made.
(b) RESTRICTIONS.
(1) The Participant shall execute a loan application on the
form supplied by the Retirement Plan Administrative
Committee and submit such application to the Retirement
Plan Administrative Committee, or shall comply with one or
more alternative methods prescribed by the Retirement Plan
Administrative Committee for such purpose.
(2) A Participant shall not have more than two loans
outstanding at any time.
(3) The period for repayment of the loan shall be at least
twelve months, but shall not exceed four and one-half
years, or such other periods as may be established from
time to time by the Retirement Plan Administrative
Committee; provided, however, that the period for repayment
shall always be in six-month intervals.
58
(4) Except as provided in Section 8.1(d), no loan shall be made
unless the Participant consents to have such loan repaid in
substantially equal installments deducted from (i) the
regular payments of the Participant's compensation during
the term of the loan while the Participant is employed by a
Related Company and (ii) any severance payments received
from a Related Company.
(5) Each loan shall be secured by the vested portion of the
Participant's Accounts under the Plan in an amount equal to
the initial principal amount of such loan.
(6) The interest rate for a loan made under this Plan shall be
fixed for the term of each loan, and shall be set as
determined by the Retirement Plan Administrative Committee
at a rate which it deems reasonable at the time for a fully
secured loan and which is consistent with applicable
Department of Labor regulations.
(7) If a Participant who has terminated employment with a
Related Company has an outstanding loan balance and
requests a distribution of his Accounts, the amount
available for such distribution shall be reduced by the
amount of any outstanding loan balances.
(8) Loan application and processing fees and any other
reasonable expenses which the Plan incurs to extend, make
and service a loan shall be specified from time to time by
the Retirement Plan Administrative Committee and shall be
charged against the Accounts of a Participant requesting a
loan in
59
the manner described in Section 8.1(c). In addition, each
Participant requesting a loan shall, as a condition of
receiving such loan, authorize the relevant Participating
Company to deduct from such Participant's wages, any state
documentary stamp and other taxes required to be paid on
such loan.
(c) ACCOUNTS. A loan to an individual under this Plan shall be
made from his Pre-Tax Account, After-Tax Account and Rollover Account. The
amount of the loan and any applicable fees shall be withdrawn from the
Investment Funds other than the Harris Stock Fund in which the Participant has
chosen to invest his Accounts in proportion to their value in his Accounts as of
the Valuation Date immediately preceding the loan.
(d) APPLICABILITY. Notwithstanding the foregoing, loans shall be
available under this Section 8.1 to any Participant or Beneficiary who is a
"party in interest" as defined in section 3(14) of ERISA, regardless of such
Participant's or Beneficiary's employment status, provided that each such
Participant or Beneficiary who requests a loan shall, as a condition of
receiving a loan, agree to the repayment of the loan at the times and in the
manner determined by the Retirement Plan Administrative Committee, but not less
frequently than quarter-annually.
8.2 LOAN ADMINISTRATION. The Retirement Plan Administrative Committee
shall be responsible for administering the loan program, but may delegate the
operation of the program to the Plan's record-keeper. The procedures for
applying for a loan and the basis on which loans will be approved or denied
shall be described in the summary plan description for the Plan or in other
documents prepared by or at the direction of the Retirement Plan Administrative
60
Committee for this purpose and such additional documents are hereby incorporated
by reference to the extent required by the Department of Labor.
8.3 REPAYMENT AND DEFAULT.
(a) PREPAYMENT. An individual may repay, at any time, all of the
outstanding principal balance of his loan, plus interest due, without penalty.
(b) CREDITING PAYMENTS. Principal and interest payments shall be
credited to the Participant's Pre-Tax Account, After-Tax Account and Rollover
Account, as applicable, and shall be invested in the same manner as Pre-Tax
Contributions, After-Tax Contributions and Rollover Contributions.
(c) RETIREMENT. An individual who terminates employment with a
Related Company on or after Early Retirement Age, and who at the time of
termination has an outstanding loan, may elect to either (i) continue his loan
repayments on a monthly basis until such outstanding loan is paid in full, or
(ii) repay the outstanding principal balance of his loan, plus interest due,
within 90 days of his termination of employment.
(d) MILITARY LEAVE. Loan repayments for individuals on Military
Leave shall be temporarily suspended during the period of such leave, and the
period of such suspension shall not count toward the maximum period of repayment
set forth in Section 8.1(b)(3).
(e) DEFAULT. The events of default shall be set forth in the
agreement evidencing the loan. Such events shall include, but not be limited to,
the following:
(1) an individual terminates employment with a Related Company
for any reason other than retirement on or after Early
Retirement Age and does not
61
repay the loan(s) in full within 90 days after the
individual's last day of such employment or, to the extent
loan repayments are deducted from a Participant's severance
pay in accordance with Section 8.1(b)(4), such Participant
does not repay the loan(s) in full within 90 days after the
final severance payment is made;
(2) an individual terminates employment with a Related Company
on or after Early Retirement Age and fails to make a
payment within 90 days after the due date of the payment.
(3) an individual who has had loan repayments suspended during
a period of Military Leave fails to return to employment
within the time prescribed by USERRA and does not repay the
loan(s) in full within 90 days after the expiration of the
period prescribed by USERRA for reemployment.
(4) the Trustee concludes that the individual no longer is a
good credit risk;
(5) to the extent permissible under federal law, the
individual's obligation to repay the loan has been
discharged through bankruptcy or any other legal process of
action which did not actually result in payment in full;
and
(6) the individual does not make payments when due, subject to
any applicable grace period.
(f) EFFECT OF DEFAULT. Upon the existence or occurrence of an
event of default, the loan may become due and payable in full and, if such loan
is not actually repaid in full, shall be canceled on the books and records of
the Plan and the amount otherwise distributable to such
62
individual shall be reduced, as of the date his Accounts otherwise become
distributable, by the principal amount of the loan then due plus any accrued but
unpaid interest. Such principal and interest shall be determined without regard
to whether the loan had been discharged through bankruptcy or any other legal
process or action which did not actually result in payment in full; however,
interest shall continue to accrue on such loan only to the extent permitted
under applicable law. Cancellation of the amount distributable to an individual
under this subsection (d) shall not occur until a distributable event occurs
under the Plan. In the event a default occurs before a distributable event
occurs, the Retirement Plan Administrative Committee shall take such other steps
to cure the default as it deems appropriate under the circumstances to preserve
Plan assets.
8.4 SPECIAL POWERS The Retirement Plan Administrative Committee shall
have the power to take such action as it deems necessary or appropriate to stop
the benefit payments to or on behalf of an individual who fails to repay a loan
(without regard to whether the obligation to repay the loan had been discharged
through bankruptcy or other legal process or action) until his Pre-Tax Account,
After-Tax Account and Rollover Account have been reduced by the principal due
(without regard to such discharge) on such loan or to distribute the note which
evidences such loan in full satisfaction of any interest in the Pre-Tax Account,
After-Tax Account, and Rollover Account which is attributable to the unpaid
balance of such loan.
63
ARTICLE IX
----------
IN-SERVICE WITHDRAWALS
----------------------
9.1 WITHDRAWALS AFTER AGE 59-1/2. A Participant who has attained age
59-1/2 may withdraw at the time and in the manner prescribed by the Committee
all or any portion of the vested interests in his Accounts. A distribution made
pursuant to this Section 9.1 may be made in any form of payment provided under
Section 7.3.
9.2 WITHDRAWALS FROM SAVINGS ACCOUNT AND AFTER-TAX ACCOUNT.
(a) AVAILABILITY. Subject to Sections 9.4 and 9.5, a Participant
may elect to withdraw from the Plan at any time in a single sum an amount not
greater than the balances of his Savings Account and After-Tax Account in the
time and manner prescribed by the Retirement Plan Administrative Committee. The
amount withdrawn shall be debited first to his Savings Account and then to his
After-Tax Account. Effective June 10, 2001, the amount withdrawn shall be
debited first to his After-Tax Account and then to his Savings Account.
(b) LIMITATIONS. A Participant may make a withdrawal under this
Section 9.2 no more than once in any calendar quarter. A Participant's election
to make After-Tax Contributions shall be suspended, and no After-Tax
Contributions or Matching After-Tax Contributions shall be credited to the
Participant's Account, for a period of three months after the date of a
Participant's withdrawal from his After-Tax Account. The Participant's election
shall automatically be reinstated at the expiration of such three-month period,
unless the Participant has filed a change of election pursuant to Section 3.7.
9.3 WITHDRAWALS FROM ROLLOVER, PRE-TAX AND PROFIT SHARING ACCOUNTS.
64
(a) AVAILABILITY. Subject to Sections 9.4 and 9.5, a Participant
who has taken all available loans under Article VIII hereof and who has
exhausted his right to withdrawals under Sections 9.1 and 9.2 may elect, if he
has an immediate and heavy financial need within the meaning of Treasury
Regulation section 1.401(k)-1(d)(2)(iv), to withdraw in a single sum an amount
not greater than (i) 100 percent of his Pre-Tax Contributions, (ii) the entire
balance of his Rollover Account, and (iii) the vested balance of his Profit
Sharing Account, in the time and manner prescribed by the Retirement Plan
Administrative Committee. A Participant shall be deemed to have an immediate and
heavy financial need if the withdrawal is requested for any of the following
reasons:
(1) to pay expenses for medical care previously incurred by the
Participant, his spouse or any of his dependents or
necessary for these persons to obtain medical care;
(2) to purchase (excluding mortgage payments) a principal
residence for the Participant;
(3) to pay for tuition and related education fees for the next
12 months of post-secondary education for the Participant,
his spouse, children or dependents;
(4) to prevent the eviction of the Participant from his
principal residence or a foreclosure on the mortgage of the
Participant's principal residence; or
65
(5) the occurrence of any other event determined by the
Commissioner of Internal Revenue pursuant to Treasury
Regulation section 1.401(k)-1(d)(2)(iv).
A withdrawal to satisfy an immediate and heavy financial need of the
Participant may be made only if:
(i) the withdrawal is not in excess of the amount required
to meet the financial need of the Participant, including taxes and
additions to tax applicable to such withdrawal, and
(ii) the Participant has obtained all other distributions,
withdrawals, and all nontaxable loans currently available under
the Plan and any other plans maintained by a Related Company.
The Participant shall be required (i) to certify to the Retirement Plan
Administrative Committee in the manner prescribed by the Retirement Plan
Administrative Committee both the reason for the financial need and that such
need cannot be satisfied from sources other than a withdrawal from the
Participant's Accounts, and (ii) to submit any additional supporting
documentation as may be requested by the Retirement Plan Administrative
Committee.
(b) ORDER OF WITHDRAWALS. Withdrawals under this Section 9.3 shall
be withdrawn from a Participant's Accounts in the following order: (i) from the
Participant's Rollover Account, if any; (ii) to the extent that the balance of
the Participant's Rollover Account is not sufficient to satisfy the amount of
the requested withdrawal, from the Participant's Pre-Tax Contributions; and
(iii) to the extent that the Participant's Rollover Account and Pre-Tax
66
Contributions are not sufficient to satisfy the amount of the requested
withdrawal, from the vested balance of the Participant's Profit Sharing Account.
(c) LIMITATIONS. A Participant may take a withdrawal under this
Section 9.3 no more than once in any six-month period.
9.4 CONDITIONS APPLICABLE TO ALL WITHDRAWALS. A Participant shall elect
to make any withdrawal permitted under this Article IX in such time and in such
manner as designated by the Retirement Plan Administrative Committee. The amount
available for withdrawal under this Article IX shall be reduced by the amount of
any outstanding loan balance under Article VIII hereof, and no withdrawal under
this Article IX shall be permitted to the extent that such withdrawal would
cause the aggregate amount of such outstanding loan balance to exceed the limits
described in Section 8.2. No withdrawal shall be permitted under this Article IX
of the portion of a Participant's Account, if any, which is invested in the
Harris Stock Fund and which has not met the Holding Period described in Section
6.4(b). The amount available for withdrawal under this Article IX is also
subject to reduction in the sole discretion of the Retirement Plan
Administrative Committee to take into account the investment experience of the
Trust Fund between the date of the election and the date of the withdrawal.
9.5 REDUCTION OF INVESTMENT FUND BALANCES. The Investment Funds in
which a Participant's Accounts are invested, other than amounts in the Harris
Stock Fund which have not satisfied the Holding Period set forth in Section
6.4(b), shall be reduced proportionately to reflect the amount of the
Participant's withdrawals under this Article IX.
67
ARTICLE X
---------
TOP-HEAVY PROVISIONS
--------------------
10.1 IN GENERAL. Notwithstanding any other provisions of the Plan to
the contrary, for any Plan Year in which this Plan is "top-heavy," as defined
herein, the provisions of this Article X shall apply. If the Plan is top-heavy
and then ceases to be top-heavy, except as otherwise provided in Section 10.3,
the provisions of this Article X shall cease to apply.
10.2 MINIMUM ALLOCATION.
(a) AMOUNT. For any Plan Year for which the Plan is top-heavy, a
minimum allocation shall be made for each "non-key employee" who is employed by
a Participating Company on the last day of the Plan Year in an amount equal to
the lesser of (1) three percent of Compensation or (2) the largest percentage of
Compensation allocated to any "key employee" during the Plan Year. The minimum
allocation shall be determined without regard to any Social Security
contribution, and without regard to any Pre-Tax Contributions made on behalf of
non-key employees. The minimum allocation shall not apply to any non-key
employee who receives a minimum contribution or minimum benefit under any other
plan of a Related Company.
(b) ALLOCATION. To satisfy subsection (a), the Profit-Sharing
Contributions for such Plan Year first shall be allocated to all Participants
employed on the last day of the Plan Year in an amount that meets the minimum
allocation amount, and any remaining Profit-Sharing Contribution then shall be
allocated in accordance with Section 3.2.
10.3 MINIMUM VESTING. For any Plan Year for which the Plan is
top-heavy, the vested interest of a Participant who is employed by a
Participating Company during any part of the Plan Year shall be determined under
the following schedule:
68
Period of Service Vested Percentage
----------------- -----------------
Less than 2 years 0%
2 years but less than 3 years 20%
3 years but less than 4 years 40%
4 years but less than 5 years 60%
5 years but less than 6 years 80%
6 years or more 100%
If the Plan becomes top-heavy and later ceases to be top-heavy, a
Participant who has three Years of Service as determined under Section 5.3 may
elect to have his vested interest continue to be determined under this Section
10.3, notwithstanding that the Plan is no longer top-heavy.
10.4 DEFINITIONS. For purposes of this Article X, the following terms
shall have the following meanings:
(a) "Determination date" means the last day of the preceding
Plan Year.
(b) "Determination period" means the Plan Year containing the
determination date and the four preceding Plan Years.
(c) "Key employee" means an Employee or former employee (and their
Beneficiaries) who, at any time during the determination period, is
69
(1) an officer of the Participating Company and has annual
compensation greater than 50 percent of the dollar
limitation in effect under section 415(b)(1)(A) of the Code
for any such Plan Year,
(2) one of the ten Employees having annual compensation in
excess of the limitation in effect under section
415(c)(1)(A) of the Code and owning (or considered as
owning with the meaning of section 318 of the Code) the
largest interests in the Participating Company,
(3) a five-percent owner (within the meaning of section
416(i)(1)(B) of the Code) of the Participating Company, or
(4) a one-percent owner of the Participating Company having
annual compensation from the Participating Company of more
than $150,000.
The determination of "key employee" shall be made under section
416(i)(1) of the Code, the terms of which are incorporated herein by reference.
(d) "Non-key employee" means any Employee who is not a key
employee.
(e) "Permissive aggregation group" means the "required aggregation
group" and any other plans of the Participating Company which, when considered
as a group with the required aggregation group, would continue to satisfy the
requirements of sections 401(a)(4) and 410 of the Code.
(f) "Required aggregation group" means (1) each qualified plan of
the Participating Company in which at least one key employee participates or
participated at any
70
time during the determination period (regardless of whether the plan has
terminated), and (2) any other qualified plan of the Participating Company which
enables a plan described in (1) to meet the requirements of sections 401(a) and
410 of the Code.
(g) "Top-heavy" means:
(1) the top-heavy ratio for the Plan exceeds 60 percent and the
Plan is not part of any required aggregation group or
permissive aggregation group;
(2) the Plan is part of a required aggregation group but not a
permissive aggregation group and the top-heavy ratio for
the required aggregation group exceeds 60 percent;
(3) the Plan is part of a required aggregation group and a
permissive aggregation group and the top-heavy ratio for
the permissive aggregation group exceeds 60 percent.
(h) "Top-heavy ratio" means:
(1) if the Participating Company or Related Company has not
maintained any defined benefit plan which during the
five-year period ending on the determination date had
accrued benefits, the top-heavy ratio is a fraction, the
numerator of which is the sum of the account balances of
all key employees as of the determination date (including
any part of any account balance distributed in the
five-year period ending on the determination date), and the
denominator of which is the sum of all account balances
71
(including any part of any account balance distributed in
the five-year period ending on the determination date).
(2) If a Related Company maintains or has maintained a defined
benefit plan which during the five-year period ending on
the determination date had accrued benefits, the top-heavy
ratio is a fraction, the numerator of which is the sum of
account balances under the defined contributions plans for
all key employees (including any part of any account
balance distributed in the five-year period ending on the
determination date), and the present value of accrued
benefits under the defined benefit plans for all key
employees as of the determination date, and the denominator
of which is the sum of the account balances under the
defined contribution plans for all participants (including
any part of any account balance distributed in the
five-year period ending on the determination date), and the
present value of accrued benefits under the defined benefit
plans for all participants as of the determination date.
(3) For purposes of (1) and (2) above, the value of account
balances and the present value of accrued benefits shall be
determined as of the most recent "valuation date" that
falls within or ends with the 12-month period ending on the
determination date, except as provided in section 416 of
the Code for the first and second plan years of a defined
benefit plan. In the case of a defined benefit plan, the
"present value of accrued benefits" shall be determined
under the terms of the applicable defined benefit plan. The
account balances and accrued benefits of a Participant who
is not a key
72
employee but who was a key employee in a prior year, or who
has not been credited with at least an Hour of Service with
any Participating Company maintaining the plan at any time
during the five-year period ending on the determination
date shall be disregarded. When aggregating plans, the
value of account balances and accrued benefits shall be
calculated with reference to the determination dates that
fall within the same calendar year.
(4) The calculation of the top-heavy ratio shall be determined
in accordance with section 416 of the Code, the provisions
of which are incorporated herein by reference.
(i) "Valuation date" means the last day of the Plan Year.
ARTICLE XI
----------
ADMINISTRATION
--------------
11.1 NAMED FIDUCIARIES. The Retirement Plan Administrative Committee
shall be the "named fiduciary" within the meaning of such term as used in ERISA;
provided that to the extent a Participant, former Participant or Beneficiary
directs that his Accounts be invested in the Harris Stock Fund, such Participant
or Beneficiary and not the Retirement Plan Administrative Committee shall be the
"named fiduciary" with respect to such investment decisions.
11.2 RETIREMENT PLAN ADMINISTRATIVE COMMITTEE. The Chief Executive
Officer of the Corporation shall have the power to appoint and to remove members
to the Retirement Plan Administrative Committee. A member of the Retirement Plan
Administrative Committee may
73
resign at any time by giving written notice to the Investment Committee or the
Chief Executive Officer of the Corporation at least 15 days prior to the
effective date of the resignation.
11.3 POWERS AND DUTIES OF COMMITTEE. The Retirement Plan Administrative
Committee shall have the powers and duties conferred on it by the terms of the
Plan. The Retirement Plan Administrative Committee may establish such rules and
regulations as it deems necessary to enable it to administer the Plan. The
Retirement Plan Administrative Committee shall have the discretionary authority
to determine eligibility for benefits and construe the terms of the Plan.
Benefits under the Plan will be paid only to a Participant or Beneficiary if the
Retirement Plan Administrative Committee decides in its discretion that the
Participant or Beneficiary is entitled to benefits.
11.4 ACTIONS OF COMMITTEE. No formal meeting and no minutes shall be
required with respect to actions taken by the Retirement Plan Administrative
Committee.
11.5 FINALITY OF DECISIONS. All decisions and directions made by the
Retirement Plan Administrative Committee, in the discretionary exercise of its
powers and duties, shall be final and binding on all parties concerned.
11.6 IMMUNITIES. Except as otherwise provided by law, no member of the
Investment Committee or Retirement Plan Administrative Committee shall be liable
to a Participating Company or to any Participant or Beneficiary by reason of
such committee's exercise in good faith of any power or discretion vested in
such committee under the Plan.
11.7 ADVISORS AND AGENTS. The Corporation, the Investment Committee,
or, with the consent of the Corporation or Investment Committee, the Retirement
Plan Administrative
74
Committee, may employ one or more persons to render advice with respect to any
responsibility it has under the Plan. The Corporation or the Investment
Committee may appoint unrelated parties to carry out trustee and investment
management responsibilities with respect to the Plan. The Corporation or the
Retirement Plan Administrative Committee may appoint an unrelated party to carry
out the record-keeping responsibilities with respect to the Plan. The
Corporation shall indemnify any person, including any employee of the
Corporation, who is acting on behalf of the Corporation, Investment Committee or
Retirement Plan Administrative Committee in this capacity with respect to
liability that may arise by reason of such person's action or failure to act
concerning the Plan, excepting any willful or gross misconduct or criminal acts
to the extent required in the respective contracts governing such arrangements.
11.8 COMMITTEE MEMBER WHO IS PARTICIPANT. A member of the Retirement
Plan Administrative Committee who also is a Participant shall have no right to
vote with respect to any action that pertains solely to him as a Participant. In
the event a majority of the remaining members are unable to agree as to the
action to be taken with respect to the Participant, the chief executive officer
of the Corporation shall appoint an impartial person to arbitrate the matter
between the remaining members and to reach a decision.
11.9 INFORMATION PROVIDED BY PARTICIPATING COMPANIES. Each
Participating Company and Employment Unit shall provide the Corporation, the
Retirement Plan Administrative Committee and the Trustee with complete and
timely information regarding employment data for each Employee and Participant
needed by the Corporation, Retirement Plan Administrative Committee or Trustee
to administer the Plan, including, but not limited to, information concerning
Compensation, date of employment, date of termination of employment, reason for
75
termination and any other information required by the Corporation, Retirement
Plan Administrative Committee, or Trustee.
11.10 EXPENSES. All costs and expenses incurred in administering the
Plan and the Trust, including the expenses of the Investment Committee and the
Retirement Plan Administrative Committee, investment advisory and record-keeping
fees, the fees of counsel and any agents for the Corporation, the fees and
expenses of the Trustee, the fees of counsel for the Trustee and other
administrative expenses shall be paid by the Trustee from the Trust Fund to the
extent that such expenses are not paid by the Participating Companies. The
Retirement Plan Administrative Committee, in its sole discretion, having regard
for the nature of the particular expense, shall determine the portion of such
expense, if any, which is to be borne by any Participating Company. A
Participating Company may seek reimbursement of any expense paid by such company
that the Retirement Plan Administrative Committee determines is properly payable
by the Trust Fund.
11.11 TRUST. A trust shall be created by the execution of the Trust
Agreement between the Corporation and the Trustee. All contributions under the
Plan shall be paid to the Trustee. The Trustee shall hold all monies and other
property received by it and invest and reinvest the same, together with the
income therefrom, on behalf of the Participants collectively in accordance with
the provisions of the Trust Agreement. The Trustee shall make distributions from
the Trust Fund at such time or times to such person or persons and in such
amounts as the Retirement Plan Administrative Committee directs in accordance
with the Plan.
11.12 TRUST FUND AVAILABLE TO PAY ALL PLAN BENEFITS. The Plan is
intended to be a single plan under Treasury Regulation section 1.414(l)-1(b)(1).
The maintenance of Accounts as
76
required by the terms of the Plan shall be for record-keeping purposes only. All
of the Trust Fund shall be available to pay benefits to all Participants and
Beneficiaries.
ARTICLE XII
-----------
AMENDMENT AND TERMINATION AND CHANGE OF CONTROL
-----------------------------------------------
12.1 AMENDMENT. The Corporation reserves the right to amend the Plan by
action of its Board of Directors or the Investment Committee thereof at any time
and from time to time, subject to the following limitations:
(a) no amendment shall be made which vests in any Participating
Company any interest in any assets of the Plan other than as specifically
provided in Section 12.3;
(b) no amendment shall be made which would have the effect of
decreasing a Participant's "accrued benefit" as proscribed in section 411(d)(6)
of the Code; and
(c) no amendment shall have the effect of reducing a Participant's
vested interest in his Accounts. If the Plan is amended to change the vesting
schedule, each Participant with at least three Years of Service shall have the
right to elect to have his vested interest computed without regard to the
amendment. Each Participant shall be permitted to make this election during the
period ending 60 days after the latest of the date (1) the amendment is adopted;
(2) the amendment is effective, and (3) the Participant is issued a written
notice of the amendment by the Corporation or its delegate.
77
12.2 AMENDMENT OF APPENDIX A. Notwithstanding Section 12.1, the
Retirement Plan Administrative Committee shall have the authority to designate
Participating Companies and to revise Appendix A from time to time.
12.3 TERMINATION OF PLAN. This Plan is intended to be permanent, and it
is the expectation of the Corporation that it will continue indefinitely.
However, the Corporation reserves the right to terminate the Plan by resolution
of its Board of Directors or the appropriate committee thereof. In the case of a
complete termination of the Plan, previously unallocated forfeitures shall be
allocated as otherwise provided in the Plan. To the extent previously
unallocated forfeitures cannot be allocated because all Participants have
reached the limitations of section 415 of the Code, the unallocated amount shall
revert back to the appropriate Participating Company, as provided in Section
3.10.
12.4 DISCONTINUANCE OF CONTRIBUTIONS. The Corporation reserves the
right to discontinue contributions to the Plan by amendment or by resolution of
the Board of Directors or the appropriate committee thereof.
12.5 VESTING ON TERMINATION OR DISCONTINUANCE OF CONTRIBUTIONS. As of
the date of the partial or complete termination of the Plan or upon the complete
discontinuance of contributions to the Plan, each affected Participant shall
become fully vested in his Accounts and no further allocations of contributions
or forfeitures shall be made after such date on behalf of an affected
Participant.
12.6 DISTRIBUTION ON TERMINATION. Upon the complete termination of the
Plan, the Trustee shall distribute to each affected Participant the full amount
standing to the credit of his Accounts; provided that if such amount exceeds (or
at the time of any prior distribution
78
exceeded) $5,000 (or such larger amount as may be permitted by law) and the
Participant is not yet age 65, such lump sum shall not be paid without his
consent. If the Participant does not consent, an annuity contract shall be
purchased for and distributed to the Participant.
12.7 CHANGE OF CONTROL.
(a) DEFINITION. Change in Control means the occurrence of any one
of the following events:
(i) any "person" (as such term is defined in section
3(a)(9) of the Securities Exchange Act of 1934 (the "Exchange
Act") and as used in sections 13(d)(3) and 14(d)(2) of the
Exchange Act) is or becomes a "beneficial owner" (as defined in
Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Corporation representing 20 percent or more of
the combined voting power of the Corporation's then outstanding
securities eligible to vote for the election of the Board of
Directors (the "Board") of the Corporation (the "Corporation
Voting Securities"); PROVIDED HOWEVER, -------- ------- that the
event described in this paragraph (i) shall not be deemed to be a
Change in Control by virtue of any of the following acquisitions:
(A) by the Corporation or any Subsidiary, (B) by any employee
benefit plan sponsored or maintained by the Corporation or any
Subsidiary, (C) by any underwriter temporarily holding securities
pursuant to an offering of such securities, or (D) pursuant to a
"Non-Control Transaction" (as defined in paragraph (iii));
(ii) individuals who, on July 1, 1996, constitute the Board
(the "Incumbent Directors") cease for any reason to constitute at
least a majority of the
79
Board, provided that any person becoming a director subsequent to
July 1, 1996, whose election or nomination for election was
approved by a vote of at least two-thirds of the Incumbent
Directors who remain on the Board (either by a specific vote or by
approval of the proxy statement of the Corporation in which such
person is named as a nominee for director, without objection to
such nomination) shall also be deemed to be an Incumbent Director;
PROVIDED, HOWEVER, that no individual initially elected or
nominated as a director of the Corporation as a result of an
actual or threatened election contest with respect to directors or
any other actual or threatened solicitation of proxies or consents
by or on behalf of any person other than the Board shall be deemed
to be an Incumbent Director;
(iii) the consummation of a merger, consolidation, share
exchange or similar form of corporate reorganization of the
Corporation or any such type of transaction involving the
Corporation or any of its Subsidiaries that requires the approval
of the Corporation's stockholders (whether for such transaction or
the issuance of securities in the transaction or otherwise) (a
"Business Combination"), unless immediately following such
Business Combination: (A) more than 80 percent of the total voting
power of the corporation resulting from such Business Combination
(including, without limitation, any corporation which directly or
indirectly has beneficial ownership of 100 percent of the
Corporation Voting Securities) eligible to elect directors of such
corporation is represented by shares that were Corporation Voting
Securities immediately prior to such Business Combination (either
by remaining outstanding or being converted), and such voting
power is in substantially the same proportion as the voting power
of such
80
Corporation Voting Securities immediately prior to the Business
Combination, (B) no person (other than any publicly traded holding
company resulting from such Business Combination, any employee
benefit plan sponsored or maintained by the Corporation (or the
corporation resulting from such Business Combination)), becomes
the beneficial owner, directly or indirectly, of 20 percent or
more of the total voting power of the outstanding voting
securities eligible to elect directors of the corporation
resulting from such Business Combination, and (C) at least a
majority of the members of the board of directors of the
corporation resulting from such Business Combination were
Incumbent Directors at the time of the Board's approval of the
execution of the initial agreement providing for such Business
Combination (any Business Combination which satisfies the
conditions specified in (A), (B) and (C) shall be deemed to be a
"Non-Control Transaction"); or
(iv) the stockholders of the Corporation approve a plan of
complete liquidation or dissolution of the Corporation or the
direct or indirect sale or other disposition of all or
substantially all of the assets of the Corporation and its
Subsidiaries.
Notwithstanding the foregoing, a Change in Control of the Corporation
shall not be deemed to occur solely because any person acquires beneficial
ownership of more than 20 percent of the Corporation Voting Securities as a
result of the acquisition of Corporation Voting Securities by the Corporation
which reduces the number of Corporation Voting Securities outstanding, PROVIDED
THAT if after such acquisition by the Corporation such person becomes the
beneficial owner of additional Corporation Voting Securities that increases the
percentage of
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outstanding Corporation Voting Securities beneficially owned by such person, a
Change in Control of the Corporation shall then occur.
For purposes of the definition of a "Change of Control", the term
"Subsidiary" shall mean any corporation or other entity in which the Corporation
has a direct or indirect ownership interest of 50 percent or more of the total
combined voting power of the then outstanding securities of such corporation or
other entity entitled to vote generally in the election of directors or in which
the Corporation has the right to receive 50 percent or more of the distribution
of profits or 50 percent of the assets on liquidation or dissolution.
Notwithstanding any other provisions of the Plan to the contrary, if a
Change in Control occurs, then during the period commencing on the date of
acquisition of said voting power, control of the Board, or consummation of a
Business Combination, and ending at the close of business on the last day of the
Fiscal Year that includes such date (the "Restriction Period"), the provisions
of this Section 12.7 shall apply.
(b) EFFECT. During the Restriction Period, the Plan may not be
terminated or amended to the extent the amendment would:
(1) reduce coverage under the Plan;
(2) reduce the amount of Profit-Sharing Contributions required
to be made for the Plan Year ending on the last day of the
Restriction Period;
(3) reduce the amount of After-Tax Contributions eligible for a
matching contribution that a Participant is permitted to
make or the amount of the Matching After-Tax Contributions
required under Sections 3.5 and 3.6; or
82
(4) reduce the amount of Pre-Tax Contributions that a
Participant is permitted to make or the amount of Matching
Pre-Tax Contributions required under Sections 3.3 and 3.4.
(c) For the purpose of computing the amount of the Profit-Sharing
Contributions for the twelve-month period ending on the last day of a
Restriction Period, the adjusted consolidated net income of the Corporation and
its Consolidated Subsidiaries before net income taxes for the Fiscal Year ending
on such date is deemed to be the forecast of the consolidated net income of the
Corporation and its Consolidated Subsidiaries for such Fiscal Year as set forth
in the annual operating plan of the Corporation for such Fiscal Year.
(d) During the Restriction Period, any person who was an Employee
on the day preceding the first day of the Restriction Period shall be deemed to
be an Employee so long as he is employed by a member of a "controlled group of
corporations" which includes, or by a trade or business that is under common
control with (as those terms are defined in sections 414(b) and (c) of the Code)
the Corporation, any corporation which is the survivor of any merger or
consolidation to which the Corporation was a party, or any corporation into
which the Corporation has been liquidated.
ARTICLE XIII
------------
MISCELLANEOUS PROVISIONS
------------------------
13.1 RESTRICTIONS ON ALIENATION: QUALIFIED DOMESTIC RELATIONS
ORDERS. Except as may be required (i) to offset an amount that a Participant is
ordered to pay to the Plan as a result of a judgement, settlement, order or
decree entered on or after August 5, 1997 as permitted under section
401(a)(13)(C) of the Code or (ii) for income tax withholding purposes, no
benefit or
83
interest under this Plan shall be subject to assignment or alienation, either
voluntarily or involuntarily. The preceding sentence shall apply to the
creation, assignment or recognition of a right to any benefit payable with
respect to a Participant pursuant to a domestic relations order, unless such
order is determined by the Retirement Plan Administrative Committee to be a
"qualified domestic relations order", as defined in section 414(p) of the Code.
In accordance with uniform and nondiscriminatory procedures established by the
Retirement Plan Administrative Committee from time to time, the Retirement Plan
Administrative Committee upon the receipt of a domestic relations order which
seeks to require the distribution of a Participant's Account in whole or in part
to an "alternate payee" (as that term is defined in section 414(p)(8) of the
Code) shall:
(1) promptly notify the Participant and such "alternate
payee" of the receipt of such order and of the
procedure which the Retirement Plan Administrative
Committee will follow to determine whether such
order constitutes a "qualified domestic relations
order" within the meaning of section 414(p) of the
Code,
(2) determine whether such order constitutes a
"qualified domestic relations order" and notify the
Participant and the "alternate payee" of the results
of such determination, and
(3) if the Retirement Plan Administrative Committee
determines that such order does constitute a
"qualified domestic relations order," distribute to
such "alternate payee" under the terms of such order
the amount called for under the order in a single
sum within 60 days of the date such order is
84
determined to constitute a qualified domestic
relations order, without regard to whether a
distribution would be permissible to the Participant
at such time under this Plan.
The determination and the distribution made by, or at the direction of,
the Retirement Plan Administrative Committee under this Section 13.1 shall be
final and binding on the Participant and on all other persons interested in such
order. An "alternate payee" under this Section 13.1 shall not be an eligible
person for purposes of obtaining a loan pending the distribution of such
alternate payee's entire interest under this Plan.
13.2 EXCLUSIVE BENEFIT REQUIREMENT. Except as provided in Sections
12.3, 13.1 and 13.3, no assets of the Plan shall revert to a Participating
Company or be used for or diverted to purposes other than providing benefits to
Participants and their Beneficiaries and defraying reasonable costs of
administering the Plan.
13.3 RETURN OF CONTRIBUTIONS.
(a) MISTAKE OF FACT. Any contribution made by a Participating
Company due to a mistake of fact shall be returned to the Participating Company
within one year of the date the contribution was made.
(b) NONDEDUCTIBLE CONTRIBUTIONS. In the event the deduction of a
contribution made by a Participating Company is disallowed under section 404 of
the Code, such contribution (to the extent disallowed) shall be returned to the
Participating Company within one year of the disallowance of the deduction.
85
13.4 NO CONTRACT OF EMPLOYMENT. Neither the establishment and
maintenance of the Plan nor the participation in the Plan by any Employee shall
be construed as a contract between the Employee and any Participating Company so
as to give any Employee the right to be retained by any Participating Company,
or to interfere with the rights of any Participating Company to discharge the
Employee at any time.
13.5 PAYMENT OF BENEFITS ON INCAPACITY. In the event the Retirement
Plan Administrative Committee determines that any person to whom a distribution
is to be made is unable to care for his affairs by reason of illness or other
disability, any amount distributable to such person (unless prior claim thereto
shall have been made by a duly qualified guardian or other legal representative)
may, in the discretion of the Retirement Plan Administrative Committee, be paid
to such other person deemed by the Retirement Plan Administrative Committee to
be responsible for such person. Any such payment made under this Section 13.5
shall constitute a complete discharge of any liability under this Plan.
13.6 MERGER. In the event of a merger or consolidation with, or
transfer of assets or liabilities to any other plan, each Participant shall
receive a benefit immediately after such merger, consolidation or transfer (if
the Plan then terminated) which is at least equal to the benefit the Participant
was entitled to receive immediately before such merger, consolidation or
transfer (if the Plan had then terminated).
13.7 CONSTRUCTION. The headings and subheadings in this Plan have been
inserted for convenience of reference only and are to be ignored in the
construction of its provisions. Wherever appropriate, the masculine shall be
read as the feminine, the plural as the singular, and the singular as the
plural. References in this Plan to a section shall be to a section in this Plan
86
unless otherwise indicated. References in this Plan to a section of the Code,
ERISA or any other federal law shall also refer to the regulations issued under
such section.
13.8 GOVERNING LAW. This Plan shall be construed, to the extent to
which state law is applicable, in accordance with the laws of the State of
Florida. Venue for any action arising under this Plan shall be in Brevard
County, Florida.
13.9 MISTAKEN PAYMENTS. If a mistake is made in favor of a Participant,
Beneficiary or alternate payee in the payment of benefits under this Plan, then
the Corporation or the Trustee (acting at the Corporation direction and on
behalf of the Plan) shall take such action against such Participant, Beneficiary
or alternate payee to remedy such mistake and to make the Plan whole as the
Corporation deems proper and appropriate under the circumstances, and any
mistake in favor of the Plan shall promptly be corrected by, or at the direction
of, the Retirement Plan Administrative Committee.
HARRIS CORPORATION
Date: 10/26/01 By: /s/ Jeffrey Pratt Morrill
-------------------------- -------------------------------
Title: Assistant Treasurer
----------------------------
87
APPENDIX A
PARTICIPATING COMPANIES
The following Related Companies are Participating Companies as of the
respective dates set forth below:
Harris Corporation (January 1, 1998)
Harris Publishing Systems Corporation (January 1, 1998 - August
16, 2001)
Harris Technical Services Corporation (January 1, 1998)
Baseview Products, Inc. (January 1, 1998 - August 16, 2001)
Maritime Communication Services, Inc. (January 1, 1998)
Harris Intraplex, Inc. (July 1, 1999)
Harris Pacific, Inc. (October 5, 1999)
Audio Broadcast Group, Inc. (November 24, 1999)
Harris Automation (January 11, 2000)
Harris Broadband Wireless Access, Inc. (September 1, 2000)
Harris-Exigent, Inc. (June 2, 2001)
A-1
APPENDIX B
FORMER PARTICIPANTS IN
THE INTRAPLEX, INC. 401(k) PROFIT SHARING PLAN
Effective as of July 1, 1999, the Harris Intraplex, Inc. 401(k)
Profit Sharing Plan (the "Intraplex Plan") was merged into the Plan and the
accounts maintained for participants under the Intraplex Plan were transferred
to the Plan. Notwithstanding anything in the Plan to the contrary, the following
provisions shall apply to the Participants whose accounts under the Intraplex
Plan were transferred to the Plan in connection with such merger (the "Intraplex
Participants"):
1. SERVICE. For purposes of determining an Intraplex Participant's
Service, the Intraplex Participant shall be credited with Service equal to (a)
the number of whole Years of Service credited to the Intraplex Participant under
the Intraplex Plan as of June 30, 1999, plus (b) the greater of (1) the Service
that would be credited the Intraplex Participant under Article 2 of the Plan
during the Plan Year commencing on July 1, 1999, and (2) the service that would
be credited to the Intraplex Participant under the terms of the Intraplex Plan
for the Plan Year commencing on July 1, 1999.
2. DISTRIBUTIONS
(a) AFTER ELIMINATION EFFECTIVE DATE. For distributions commencing
after the earlier of (i) the date which occurs 90 days following the date a
summary of material modification is furnished to Intraplex Participants
describing the elimination of optional forms of benefit, in accordance with
Treasury Regulation section 1.411(d)-4(e)(1)(ii) and (ii) July 1, 2002
(whichever date occurs first, the "Elimination Effective Date"), an Intraplex
Participant who is eligible to receive a distribution of his benefit under the
Plan may elect to have his benefit
B-1
distributed in any form of benefit offered under Section 7.3 of the Plan,
subject to the provisions of Section 7.2 of the Plan.
(b) DISTRIBUTIONS ON OR BEFORE ELIMINATION EFFECTIVE DATE. For
distributions commencing on or prior to the Elimination Effective Date, an
Intraplex Participant who is eligible to receive a distribution of his benefit
under the Plan may elect, in addition to any form of benefit offered under
Section 7.3 of the Plan, to have his benefit distributed in any one of the
following optional benefit forms, subject to the provisions of Section 7.2 of
the Plan:
(i) a joint and survivor annuity with the Participant's
spouse as contingent annuitant under which the amount payable to the
Participant's spouse is 50% of the amount payable during the joint lives of the
Participant and his spouse; or
(ii) a straight life annuity for the Participant's life.
(c) If an Intraplex Participant is married and elects that his
benefit be distributed on or prior to the Elimination Effective Date in the form
of a straight life annuity pursuant to Section 2(b)(ii) hereof, such benefit
shall be distributed in the form of a straight life annuity only if the
Participant's spouse consents in writing to such form of distribution and such
consent is witnessed by either a Plan representative or Notary Public. If a
Participant's spouse does not properly consent to such form of distribution,
benefits will be distributed in the form of a joint and survivor annuity.
B-2