Exhibit 10(a)
HARRIS CORPORATION RETIREMENT PLAN
(AMENDED AND RESTATED EFFECTIVE JANUARY 1, 2003)
Harris Corporation Retirement Plan
(Amended and Restated Effective January 1, 2003)
Table of Contents
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ARTICLE 1 TITLE....................................................................................... 1
ARTICLE 2 DEFINITIONS................................................................................. 2
ARTICLE 3 PARTICIPATION............................................................................... 10
Section 3.1. Eligibility for Participation......................................................... 10
Section 3.2. Election of Pre-Tax Contributions and After-Tax Contributions......................... 10
Section 3.3. Transfers to Affiliates............................................................... 11
ARTICLE 4 PRE-TAX, MATCHING AND PROFIT SHARING CONTRIBUTIONS.......................................... 12
Section 4.1. Pre-Tax Contributions................................................................. 12
Section 4.2. Matching Contributions................................................................ 14
Section 4.3. Profit Sharing Contributions.......................................................... 14
Section 4.4. Deposit of Contributions.............................................................. 15
Section 4.5. Form of Contributions................................................................. 15
ARTICLE 5 AFTER-TAX AND ROLLOVER CONTRIBUTIONS........................................................ 16
Section 5.1. After-Tax Contributions............................................................... 16
Section 5.2. Rollover Contributions................................................................ 17
ARTICLE 6 LIMITATIONS ON CONTRIBUTIONS................................................................ 18
Section 6.1. Annual Limit on Pre-Tax Contributions................................................. 18
Section 6.2. Limits on Contributions for Highly Compensated Employees.............................. 20
Section 6.3. Maximum Annual Additions under Section 415 of the Code................................ 25
Section 6.4. Other Limitations on Employer Contributions........................................... 27
ARTICLE 7 TRUST AND INVESTMENT FUNDS.................................................................. 28
Section 7.1. Trust................................................................................. 28
Section 7.2. Investments........................................................................... 29
ARTICLE 8 PARTICIPANT ACCOUNTS AND INVESTMENT ELECTIONS............................................... 29
Section 8.1. Participant Accounts.................................................................. 29
Section 8.2. Investment Elections.................................................................. 30
Section 8.3. Valuation of Funds and Plan Accounts.................................................. 32
Section 8.4. Valuation of Units within the Harris Stock Fund....................................... 33
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Section 8.5. Allocation of Contributions Other than Profit Sharing Contributions................... 33
Section 8.6. Allocation of Profit Sharing Contributions............................................ 34
Section 8.7. Correction of Error................................................................... 35
ARTICLE 9 WITHDRAWALS AND DISTRIBUTIONS............................................................... 35
Section 9.1. Withdrawals Prior to Termination of Employment........................................ 35
Section 9.2. Distribution of Account Upon Termination of Employment................................ 39
Section 9.3. Time and Form of Distribution upon Termination of Employment.......................... 40
Section 9.4. Payment of Small Account Balances..................................................... 42
Section 9.5. Medium and Order of Withdrawal or Distribution........................................ 43
Section 9.6. Direct Rollover Option................................................................ 43
Section 9.7. Designation of Beneficiary............................................................ 44
Section 9.8. Missing Persons....................................................................... 46
Section 9.9. Distributions to Minor and Disabled Distributees...................................... 46
Section 9.10. Payment of Group Insurance Premiums.................................................. 47
ARTICLE 10 LOANS....................................................................................... 48
Section 10.1. Making of Loans...................................................................... 48
Section 10.2. Restrictions......................................................................... 48
Section 10.3. Default.............................................................................. 49
Section 10.4. Applicability........................................................................ 49
ARTICLE 11 SPECIAL PARTICIPATION AND DISTRIBUTION RULES................................................ 50
Section 11.1. Change of Employment Status.......................................................... 50
Section 11.2. Reemployment of a Terminated Participant............................................. 50
Section 11.3. Employment by Affiliates............................................................. 51
Section 11.4. Leased Employees..................................................................... 51
Section 11.5. Reemployment of Veterans............................................................. 51
ARTICLE 12 SHAREHOLDER RIGHTS WITH RESPECT TO HARRIS STOCK............................................. 54
Section 12.1. Voting Shares of Harris Stock........................................................ 54
Section 12.2. Tender Offers........................................................................ 54
ARTICLE 13 ADMINISTRATION.............................................................................. 57
Section 13.1. The Administrative Committee......................................................... 57
Section 13.2. Named Fiduciaries.................................................................... 60
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Section 13.3. Allocation and Delegation of Responsibilities........................................ 60
Section 13.4. Professional and Other Services...................................................... 60
Section 13.5. Claims Procedure..................................................................... 61
Section 13.6. Notices to Participants.............................................................. 63
Section 13.7. Notices to Administrative Committee or Employers..................................... 63
Section 13.8. Records.............................................................................. 63
Section 13.9. Reports of Trustee and Accounting to Participants.................................... 63
ARTICLE 14 PARTICIPATION BY EMPLOYERS.................................................................. 64
Section 14.1. Adoption of Plan..................................................................... 64
Section 14.2. Withdrawal from Participation........................................................ 64
Section 14.3. Company, Administrative Committee, Compensation Committee and
Investment Committee as Agents for Employers......................................... 64
Section 14.4. Continuance by a Successor........................................................... 65
ARTICLE 15 MISCELLANEOUS............................................................................... 66
Section 15.1. Expenses............................................................................. 66
Section 15.2. Non-Assignability.................................................................... 66
Section 15.3. Employment Non-Contractual........................................................... 68
Section 15.4. Merger or Consolidation with Another Plan............................................ 68
Section 15.5. Gender and Plurals................................................................... 68
Section 15.6. Applicable Law....................................................................... 68
Section 15.7. Severability......................................................................... 69
Section 15.8. No Guarantee......................................................................... 69
Section 15.9. Plan Voluntary....................................................................... 69
ARTICLE 16 TOP-HEAVY PLAN REQUIREMENTS................................................................. 69
Section 16.1. Top-Heavy Plan Determination......................................................... 69
Section 16.2. Definitions and Special Rules........................................................ 70
Section 16.3. Minimum Contribution for Top-Heavy Years............................................. 71
ARTICLE 17 AMENDMENT, ESTABLISHMENT OF SEPARATE PLAN, PLAN
TERMINATION AND CHANGE OF CONTROL........................................................... 72
Section 17.1. Amendment............................................................................ 72
Section 17.2. Establishment of Separate Plan....................................................... 72
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Section 17.3. Termination.......................................................................... 73
Section 17.4. Change of Control.................................................................... 73
Section 17.5. Trust Fund to Be Applied Exclusively for Participants and Their
Beneficiaries........................................................................ 74
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ARTICLE 1
TITLE
The title of this Plan shall be the "Harris Corporation
Retirement Plan." This Plan is an amendment and restatement of the Plan in
effect as of December 31, 2002. This amendment and restatement shall be
effective January 1, 2003, except that:
(i) the provisions of Section 5.2 concerning a
Participant's rollover contribution to the Plan and Section 9.6
concerning a Participant's direct rollover distribution option shall be
effective January 1, 2002;
(ii) the provisions of Section 4.1(c) permitting certain
Participants to make catch-up contributions to the Plan shall be
effective May 1, 2002;
(iii) the provisions within the "Compensation" definition
set forth in Article 2 concerning the maximum amount of Compensation
taken into account under the Plan, Section 6.1(a) concerning the annual
limit on pre-tax contributions, Section 6.3 concerning the maximum
annual additions under section 415 of the Code and Section 16.2(b)
concerning the special rules in determining whether the Plan is
top-heavy shall be effective July 1, 2002; and
(iv) any provision of the Plan which specifies a different
effective date shall be effective as of the date specified.
The rights and benefits of any Participant whose employment
with all Employers and Affiliates terminates on or after January 1, 2003, and
the rights and benefits of any Beneficiary of any such Participant, shall be
determined solely by reference to the terms of the Plan as amended and restated
herein, as may be amended from time to time. The rights and benefits of any
Participant whose employment with all Employers and Affiliates terminated prior
to January 1, 2003 and who is not reemployed after such date, and the rights and
benefits of any Beneficiary of any such Participant, generally shall be
determined solely by reference to the terms of the Plan as in effect on the date
of the Participant's termination of employment.
The Plan is designated as a "profit sharing plan" within the
meaning of U.S. Treasury Regulation Section 1.401-1(a)(2)(ii).
ARTICLE 2
DEFINITIONS
As used herein, the following words and phrases shall have the
following respective meanings when capitalized:
Account. The aggregate of a Participant's accounts described
in Section 8.1 and such other accounts that may be established from time to time
on behalf of a Participant, to be credited with contributions made by or on
behalf of the Participant, adjusted for earnings and losses, and debited by
distributions to and withdrawals of the Participant and expenses.
Adjusted Consolidated Net Income. The adjusted consolidated
net income of the Company and its Consolidated Subsidiaries before net income
taxes for a Fiscal Year, determined by adjusting the consolidated net income
shown in the annual audit report prepared by the Company's independent public
accounts to eliminate the effect, if any, of the following items:
(1) any provision for taxes on or measured by income for such
Fiscal Year 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;
(4) all dividends received during such Fiscal Year with
respect to stock of an Affiliate that is not included among the
Consolidated Subsidiaries;
(5) any gains or losses from the sale, exchange or other
disposition of capital or depreciable property, as defined in the Code;
(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 an Affiliate of a business (i) which was formerly
conducted by an entity which was not then an Affiliate, and (ii) the
net income (or loss) of which was included for the first time in
determining the consolidated net income of the Company and its
Consolidated Subsidiaries for the Fiscal Year in question;
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(8) all exchange adjustments resulting from translating to
United States currency subsidiaries' year-end balance sheet items 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.
Administrative Committee. The Retirement Plan Administrative
Committee that is appointed pursuant to Section 13.1 to administer the Plan.
Reference herein to the Administrative Committee also shall include any person
to whom the Administrative Committee has delegated any of its authority pursuant
to Section 13.3.
Affiliate. (a) A corporation that is a member of the same
controlled group of corporations (within the meaning of section 414(b) of the
Code) as an Employer, (b) a trade or business (whether or not incorporated)
under common control (within the meaning of section 414(c) of the Code) with an
Employer, (c) any organization (whether or not incorporated) that is a member of
an affiliated service group (within the meaning of section 414(m) of the Code)
that includes an Employer, a corporation described in clause (a) of this
subdivision or a trade or business described in clause (b) of this subdivision,
or (d) any other entity that is required to be aggregated with an Employer
pursuant to Regulations promulgated under section 414(o) of the Code.
After-Tax Account. The account established pursuant to Section
8.1 to which any after-tax contributions made for the benefit of a Participant
pursuant to Section 5.1, and earnings and losses thereon, are credited.
Beneficiary. A person entitled under Section 9.7 to receive
benefits in the event of the death of a Participant.
Board. The Board of Directors of the Company.
Break in Service. A period other than a period included in an
Employee's Service; provided, however, that a Break in Service shall not include
a period of absence from employment 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.
Notwithstanding the foregoing, the immediately preceding sentence shall not
apply unless the Employee timely furnishes to the Administrative Committee or
its delegate such information as it may reasonably require to establish the
reason for such absence and its duration.
Change of Control. For purposes hereof, a "Change of Control"
shall be deemed to have occurred if:
(1) 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 Company
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representing 20% or more of the combined voting power of the Company's
then outstanding securities eligible to vote for the election of the
Board (the "Company Voting Securities"); provided however, that the
event described in this paragraph (1) shall not be deemed to be a
Change of Control by virtue of any of the following acquisitions: (A)
by the Company or any Subsidiary, (B) by any employee benefit plan
sponsored or maintained by the Company 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 (3));
(2) individuals who, on July 1, 2002, constitute the Board
(the "Incumbent Directors") cease for any reason to constitute at least
a majority of the Board, provided that any person becoming a director
subsequent to July 1, 2002, 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 Company 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
Company 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;
(3) the consummation of a merger, consolidation, share
exchange or similar form of corporate reorganization of the Company or
any such type of transaction involving the Company or any of its
Subsidiaries that requires the approval of the Company'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% 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% of the Company
Voting Securities) eligible to elect directors of such corporation is
represented by shares that were Company 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 Company Voting Securities
immediately prior to the Business Combination, (B) no person (other
than any publicly traded holding company resulting from such Business
Combination or any employee benefit plan sponsored or maintained by the
Company (or the corporation resulting from such Business Combination)),
becomes the beneficial owner, directly or indirectly, of 20% 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
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(4) the stockholders of the Company approve a plan of complete
liquidation or dissolution of the Company or the direct or indirect
sale or other disposition of all or substantially all of the assets of
the Company and its Subsidiaries.
Notwithstanding the foregoing, a "Change of Control" shall not
occur solely because any person acquires beneficial ownership of 20% or more of
the Company Voting Securities as a result of the acquisition of Company Voting
Securities by the Company which reduces the number of Company Voting Securities
outstanding; provided however, that if after such acquisition by the Company
such person becomes the beneficial owner of additional Company Voting Securities
that increase the percentage of outstanding Company Voting Securities
beneficially owned by such person, a "Change of Control" shall then occur.
For purposes of this definition of "Change of Control," the
term "Subsidiary" shall mean any corporation or other entity in which the
Company has a direct or indirect ownership interest of 50% 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 Company has the right to receive 50% or more of the distribution of profits
or 50% or more of the assets on liquidation or dissolution.
Code. The Internal Revenue Code of 1986, as amended.
Company. Harris Corporation, a Delaware corporation, and any
successor thereto.
Compensation. The following items of remuneration which a
Participant earns for work or personal services performed for an Employer: (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 an
Employer 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; or (g) any salary
reduction contributions to a cafeteria plan (within the meaning of section 125
of the Code) or a non-qualified deferred compensation plan maintained by an
Employer. Notwithstanding the foregoing, the following items shall be excluded
from "Compensation": (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 an Employer;
(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,
separation pay or special retirement pay; (iv) retention bonuses or completion
bonuses, unless authorized by the Administrative Committee in a uniform and
nondiscriminatory manner to be included in Compensation; (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; (vi) any salary reduction contributions to an
arrangement maintained by an Employer providing
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qualified transportation fringes (within the meaning of section 132(f)(4) of the
Code) or (vii) indirect compensation such as employer-paid group insurance
premiums or contributions under this Plan or any other qualified employee
benefit plan, other than a contribution described in item (f) or (g) above.
Notwithstanding any provision herein to the contrary, the
Compensation of a Participant taken into account for any purpose under the Plan
shall not exceed $200,000 (as adjusted pursuant to section 401(a)(17)(B) of the
Code). In addition, in the Plan Year in which an Eligible Employee becomes a
Participant, only Compensation received on or after the date he or she becomes a
Participant shall be taken into account under the Plan.
Compensation Committee. The Management Development and
Compensation Committee of the Board. Reference herein to the Compensation
Committee also shall include any person to whom the Compensation Committee has
delegated any of its authority pursuant to Section 13.3.
Consolidated Subsidiaries. The Company's subsidiaries which
are included in the consolidated annual financial statements for the Company.
Disability. A Participant's total and permanent physical or
mental disability, as evidenced by the Participant's eligibility for disability
benefits under Title II or Title XVI of the Federal Social Security Act. A
Participant's Disability shall be deemed to occur as of the effective date
determined by the Social Security Administration.
Effective Date. The effective date of this amendment and
restatement of the Plan, which, with respect to the Company and any other
Employer as of December 31, 2002 shall, except as otherwise provided in Article
1, be January 1, 2003 and, with respect to an entity that becomes an Employer on
or after January 1, 2003, shall be the effective date as of which the Plan is
adopted by such entity.
Eligible Employee. An Employee other than an Employee (i) the
terms of whose employment are subject to a collective bargaining agreement which
does not provide for the participation of such Employee in the Plan; (ii) who
does not receive any Compensation payable in United States dollars; (iii) who is
not treated as an employee of an Employer on such Employer's payroll records
(notwithstanding any determination by a court or administrative agency that such
individual is an Employee) or (iv) effective July 1, 2003, who is not a United
States citizen and who provides services in a location other than the United
States. No individual who renders services for an Employer shall be an Eligible
Employee if such individual renders services pursuant to an agreement or
arrangement (written or oral) (i) that such services are to be rendered by the
individual as an independent contractor; (ii) with an entity, including a
leasing organization within the meaning of section 414(n)(2) of the Code, that
is not an Employer or Affiliate or (iii) that contains a waiver of participation
in the Plan.
Employee. An individual whose relationship with an Employer
is, under common law, that of an employee.
Employer. The Company or any other entity that, with the
consent of the Compensation Committee, elects to participate in the Plan in the
manner described in Section
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14.1, including any successor entity that is substituted for an Employer
pursuant to Section 14.4. If an Employer withdraws from participation in the
Plan pursuant to Section 14.2, or terminates its participation in the Plan
pursuant to Section 17.3, it shall thereupon cease to be an Employer. An entity
shall cease being an Employer as of the date it ceases to be an Affiliate,
unless the Compensation Committee consents to such entity's continued
participation in the Plan.
ERISA. The Employee Retirement Income Security Act of 1974, as
amended.
Excess Compensation. The portion of a Participant's
Compensation that exceeds the Taxable Wage Base for the year in which the
Compensation is received.
Fiscal Year. The fiscal year of the Company.
Full-Time Employee. An Employee who regularly is scheduled by
an Employer to work 30 or more hours per week and who is not designated on the
payroll records of an Employer as a temporary employee.
Harris Stock. Common stock of the Company.
Harris Stock Fund. An investment option, the assets of which
consist primarily of shares of Harris Stock.
Highly Compensated Employee. For a Plan Year, any Employee who
(i) is a 5%-owner (as determined under section 416(i)(1) of the Code) at any
time during the current Plan Year or the preceding Plan Year or (ii) for the
preceding Plan Year, was paid compensation in excess of $90,000 (as adjusted in
accordance with section 414(q)(1)(B) of the Code) from an Employer or Affiliate
and was a member of the "top-paid group" (as defined in section 414(q)(3) of the
Code).
Hour of Service. Each hour for which an Employee is paid or
entitled to payment for the performance of duties for an Employer.
Investment Committee. The Investment Committee--Retirement
Plans of the Board. Reference herein to the Investment Committee also shall
include any person to whom the Investment Committee has delegated any of its
authority pursuant to Section 13.3.
Leave of Absence. A period of interruption of the active
employment of an Employee granted by an Employer or Predecessor Company with the
understanding that the Employee will return to active employment at the
expiration of such period (or such extension thereof granted by the Employer or
Predecessor Company). The term "Leave of Absence" does not include a period of
Qualified Military Service.
Matching Account. The account established pursuant to Section
8.1 to which any matching contributions made for the benefit of a Participant
pursuant to Section 4.2, and earnings and losses thereon, are credited.
Maximum Contribution Percentage. The maximum percentage of a
Participant's Compensation for a payroll period that may be contributed to the
Plan pursuant to Section 5.1, as
7
determined from time to time by the Administrative Committee. The Administrative
Committee in its sole discretion may establish different Maximum Contribution
Percentages with respect to Participants who are not Highly Compensated
Employees for a given Plan Year and Participants who are Highly Compensated
Employees for such Plan Year, and with respect to classes of Highly Compensated
Employees for a given Plan Year.
Maximum Deferral Percentage. The maximum percentage of a
Participant's Compensation for a payroll period that may be contributed to the
Plan pursuant to Section 4.1(a), as determined from time to time by the
Administrative Committee. The Administrative Committee in its sole discretion
may establish different Maximum Deferral Percentages with respect to
Participants who are not Highly Compensated Employees for a given Plan Year and
Participants who are Highly Compensated Employees for such Plan Year, and with
respect to classes of Highly Compensated Employees for a given Plan Year.
Participant. An Eligible Employee who has satisfied the
requirements set forth in Section 3.1. An individual shall cease to be a
Participant upon the complete distribution of his or her vested Account.
Plan. The plan herein set forth, as from time to time amended.
Plan Year. The Fiscal Year.
Predecessor Company. Any entity (i) of which an Affiliate is a
successor by reason of having acquired all or substantially all of its business
and assets or (ii) from which an Affiliate acquired a business formerly
conducted by such entity; provided, however, that in the case of any such entity
that continues to conduct a trade or business subsequent to the acquisition by
an Affiliate referred in (i) or (ii) above, the status of such entity as a
Predecessor Company relates only to the period of time prior to the date of such
acquisition.
Pre-Tax Account. The account established pursuant to Section
8.1 to which any pre-tax contributions made for the benefit of a Participant
pursuant to Section 4.1, and earnings and losses thereon, are credited.
Profit Sharing Account. The account established pursuant to
Section 8.1 to which any profit sharing contributions made for the benefit of a
Participant pursuant to Section 4.3, and earnings and losses thereon, are
credited.
Qualified Military Service. An individual's service in the
uniformed services (as defined in 38 U.S.C. Section 4303) if such individual is
entitled to reemployment rights under USERRA with respect to such service.
Reduction in Force. An involuntary or voluntary reduction in
force, as defined in the Company's Severance Pay Program.
Regulations. Written regulations promulgated by the Department
of Labor construing Title I of ERISA or by the Internal Revenue Service
construing the Code.
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Rollover Account. The account established pursuant to Section
8.1 to which any rollover contributions made by a Participant pursuant to
Section 5.2, and earnings and losses thereon, are credited.
Savings Account. The account established pursuant to Section
8.1 to which any savings contributions under the Plan as in effect prior to July
1, 1983, and earnings and losses thereon, are credited.
Service. The aggregate of the periods during which an Employee
is employed by an Employer and any periods of employment or service taken into
account pursuant to Sections 11.3 and 11.4, subject to the following:
(1) An Employee shall be deemed to be employed by an Employer
during (i) any period of absence from employment by an Employer that is
of less than twelve months' duration, (ii) the first twelve months of
any period of absence from employment by an Employer for any reason
other than the Employee's quitting, retiring, being discharged or
death, and (iii) any period of absence from employment by an Employer
during which the Employee is in Qualified Military Service, provided
that the Employee returns to the employ of an Employer within the
period prescribed by USERRA.
(2) An Employee's period of employment by an entity other than
an Affiliate that becomes a Predecessor Company shall be included as
Service only to the extent expressly provided in the documents
effecting the acquisition or otherwise required by law.
(3) An Employee's period of employment by an entity in which
the Company owns less than 80% but more than 1% of the outstanding
equity interest (a "joint venture") shall be included as Service if (i)
the Company or its delegate designates employment with the joint
venture as eligible for service credit under the Plan; (ii) such
Employee was employed by an Affiliate prior to such Employee's
employment by the joint venture and was not employed by any person or
entity other than an Affiliate (an "unrelated employer") between such
Employee's employment by an Affiliate and the joint venture; and (iii)
such Employee returns to employment with an Affiliate 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 an Affiliate.
(4) Solely for purposes of determining the nonforfeitable
portion of a Participant's Account under Section 9.2(b), the Service of
an Employee whose employment is terminated by an Employer or Affiliate
in connection with a Reduction in Force shall include the first twelve
months of absence from employment, effective as of the date of such
termination of employment.
Service shall be computed in terms of completed years and completed days.
Taxable Wage Base. 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 a Plan Year.
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Trust. The trust described in Section 7.1 and created by
agreement between the Company and the Trustee.
Trust Fund. All money and property of every kind of the Trust
held by the Trustee pursuant to the terms of the agreement governing the Trust.
Trustee. The person or entity appointed by the Investment
Committee and serving as trustee of the Trust or, if there is more than one such
trustee acting at a particular time, all of such trustees collectively.
USERRA. The Uniformed Services Employment and Reemployment
Rights Act of 1994, as amended.
Valuation Date. Each day on which the New York Stock Exchange
is open for trading and any other day determined by the Administrative
Committee.
Year of Service. A period of Service of 365 days.
ARTICLE 3
PARTICIPATION
Section 3.1. Eligibility for Participation. Each Eligible
Employee who was a Participant immediately before the Effective Date shall
continue to be a Participant as of the Effective Date. Each other Eligible
Employee who is a Full-Time Employee shall become a Participant on the day he or
she first performs an Hour of Service. Each other Eligible Employee who is not a
Full-Time Employee shall become a Participant on the day he or she first
completes a Year of Service.
Section 3.2. Election of Pre-Tax Contributions and After-Tax
Contributions. (a) Participant Election. A Participant who desires to make
pre-tax contributions or after-tax contributions to the Plan shall make an
election, in accordance with procedures prescribed by the Administrative
Committee, specifying the Participant's chosen rate of such contributions. Such
election shall authorize the Participant's Employer to reduce the Participant's
Compensation by the amount of any such pre-tax contributions, shall authorize
the Participant's Employer to make
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regular payroll deductions of any such after-tax contributions, shall specify
the Participant's investment election as described in Section 8.2(a) and shall
evidence the Participant's acceptance and agreement to all provisions of the
Plan. Any election made pursuant to this Section 3.2(a) shall be effective only
with respect to Compensation not immediately available to the Participant as of
the effective date of such election and shall be effective as of the first
payroll period commencing after the date on which the election is received, or
such later date as may be administratively practicable.
(b) Participant Deemed Election. A Participant who does not at
the time and in the manner prescribed by the Administrative Committee elect
otherwise shall be deemed to have elected to make pre-tax contributions to the
Plan each payroll period at a rate of 6% of the Participant's Compensation for
such payroll period and to have authorized the Participant's Employer to reduce
his or her Compensation by the amount thereof. Any deemed election described in
this Section 3.2(b) shall be effective only with respect to Compensation not
immediately available to the Participant as of the effective date thereof and
shall be effective as of the first payroll period commencing after the Eligible
Employee becomes a Participant, or such later date as may be administratively
practicable.
Section 3.3. Transfers to Affiliates. If a Participant is
transferred from one Employer to another Employer or from an Employer to an
Affiliate that is not an Employer, such transfer shall not terminate the
Participant's participation in the Plan, and such Participant shall continue to
participate in the Plan until an event occurs which would have entitled the
Participant to a complete distribution of the Participant's vested interest in
his or her Account had the Participant continued to be employed by an Employer
until the occurrence of such event. Notwithstanding the foregoing, a Participant
shall not be entitled to make pre-tax contributions,
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after-tax contributions or rollover contributions to the Plan, to receive under
the Plan allocations of matching contributions or, except as otherwise provided
in Section 8.6(a), to receive under the Plan allocations of profit sharing
contributions during any period of employment by an Affiliate that is not an
Employer, and periods of employment by an Affiliate that is not an Employer
shall be taken into account only to the extent set forth in Section 11.3.
Payments that are received by a Participant from an Affiliate that is not an
Employer shall not be treated as Compensation for any purpose under the Plan.
ARTICLE 4
PRE-TAX, MATCHING AND PROFIT SHARING CONTRIBUTIONS
Section 4.1. Pre-Tax Contributions. (a) Initial Election.
Subject to the limitations set forth in Article 6, each Employer shall make a
pre-tax contribution for each payroll period on behalf of each Participant who
is an Eligible Employee of such Employer in an amount equal to a whole
percentage of such Participant's Compensation for such payroll period as elected
by the Participant pursuant to Section 3.2. The percentage of Compensation so
designated by a Participant for a payroll period may not be less than 1% and may
not be more than the Maximum Deferral Percentage with respect to such
Participant. Notwithstanding the foregoing, the aggregate of a Participant's
pre-tax contributions for a payroll period pursuant to this Section 4.1(a) and a
Participant's after-tax contributions for a payroll period pursuant to Section
5.1 may not exceed an amount equal to the Maximum Deferral Percentage with
respect to such Participant.
(b) Changes in the Rate or Suspension of Pre-Tax
Contributions. A Participant's pre-tax contributions shall continue in effect at
the rate elected by the Participant pursuant to Section 3.2 until the
Participant changes or suspends such election. A Participant may change or
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suspend such election at such time and in such manner as may be prescribed by
the Administrative Committee, provided that only the last change made by a
Participant during a payroll period shall be effectuated. Such change or
suspension shall be effective as of the first payroll period commencing after
the date on which the change or suspension is received, or such later payroll
period as may be administratively practicable. A Participant who has suspended
pre-tax contributions pursuant to this subsection may resume pre-tax
contributions by making an election at such time and in such manner as may be
prescribed by the Administrative Committee.
(c) Catch-Up Contributions. Each Participant who (i) is
eligible to make pre-tax contributions under the Plan and (ii) will attain age
50 before the end of a calendar year ending with or within a Plan Year shall be
eligible to have pre-tax contributions made on his or her behalf in addition to
those described in Section 4.1(a) ("catch-up contributions"). Catch-up
contributions shall be elected, made, suspended, resumed and credited in
accordance with and subject to the rules and limitations of section 414(v) of
the Code and such other rules and limitations prescribed by the Administrative
Committee from time to time; provided, however, that (i) the amount of catch-up
contributions made on behalf of a Participant during a calendar year shall not
exceed the maximum amount permitted under section 414(v)(2) of the Code for the
calendar year ($2,000 for 2003); (ii) the amount of catch-up contributions made
on behalf of a Participant for a payroll period shall not exceed ten percent
(10%) of the Participant's Compensation for the payroll period and (iii) no
matching contributions shall be made pursuant to Section 4.2 in connection with
catch-up contributions. Catch-up contributions shall not be taken into account
for purposes of Sections 6.1 and 6.3, and the Plan shall not be treated as
failing to satisfy its provisions implementing the requirements of section
401(k)(3), 401(k)(11),
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401(k)(12), 410(b) or 416 of the Code, as applicable, by reason of the making of
catch-up contributions.
Section 4.2. Matching Contributions. Subject to the
limitations set forth in Article 6, each Employer shall make a matching
contribution for each payroll period on behalf of each Participant who is an
Eligible Employee of such Employer, and who has completed a Year of Service, in
an amount equal to 100% of the aggregate of (i) the pre-tax contribution made on
behalf of such Participant pursuant to Section 4.1 and (ii) the after-tax
contribution made on behalf of such Participant pursuant to Section 5.1,
provided that the matching contribution shall not exceed 6% of the Participant's
Compensation for such payroll period.
Section 4.3. Profit Sharing Contributions. (a) Basic. Subject
to the limitations set forth in Article 6, the Employers shall make a profit
sharing contribution for each Plan Year in an amount equal to eleven and
one-half percent (11 1/2%) of Adjusted Consolidated Net Income for the Fiscal
Year that ends with such Plan Year, reduced by the portion of such amount with
respect to Participants' Compensation that would have been allocable under
Section 8.6 if Compensation were determined without regard to statutory limits
under section 401(a)(17) or 415 of the Code. A profit sharing contribution made
pursuant to this Section 4.3 shall be allocated to Participants in accordance
with Section 8.6.
(b) Special. Subject to the limitations set forth in Article
6, the Company may, in its discretion, make a profit sharing contribution for a
Plan Year (in addition to the profit sharing contribution made pursuant to
subsection (a) above) in a specified dollar amount or pursuant to a formula, to
be allocated to Participants in accordance with Section 8.6.
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Section 4.4. Deposit of Contributions. An Employer shall
deliver to the Trustee any pre-tax contributions for a payroll period as soon as
administratively practicable after the date such contributions otherwise would
have been paid to the Participants as cash compensation, but in no event later
than the 15th business day of the month following the month during which such
contributions otherwise would have been paid to the Participants. An Employer
shall deliver to the Trustee any matching contributions for a payroll period
concurrently with the delivery of the pre-tax contributions or after-tax
contributions to which such matching contributions relate. An Employer shall
deliver to the Trustee any profit sharing contribution for a Plan Year no later
than the date prescribed by the Code, including any authorized extensions
thereof, for filing such Employer's federal income tax return for the Fiscal
Year which ends with such Plan Year.
Section 4.5. Form of Contributions. Pre-tax contributions,
matching contributions and profit sharing contributions shall be contributed to
the Plan in cash; provided, however, that if a Participant elects that pre-tax
contributions and matching contributions made on his or her behalf be invested
in the Harris Stock Fund, the Company in its discretion may make such
contributions in shares of Harris Stock, which may be contributed at a discount
from fair market value. The portion of any such contribution that is
attributable to a discount from fair market value on shares of Harris Stock
shall be disregarded for purposes of determining (i) whether the pre-tax
contributions made on behalf of a Participant exceed the Maximum Deferral
Percentage under Section 4.1(a) with respect to such Participant; (ii) whether
the pre-tax contributions made on behalf of a Participant exceed the annual
limit on pre-tax contributions described in Section 6.1(a); and (iii) whether
the matching contributions made on behalf of a
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Participant exceed 6% of the Participant's Compensation for a payroll period, as
described in Section 4.2.
ARTICLE 5
AFTER-TAX AND ROLLOVER CONTRIBUTIONS
Section 5.1. After-Tax Contributions. (a) Initial Election.
Subject to the limitations set forth in Article 6, each Participant may elect in
accordance with Section 3.2 to make an after-tax contribution for each payroll
period by payroll deduction. The percentage of a Participant's Compensation for
a payroll period subject to such election shall be a whole percentage not less
than 1% and not more than the Maximum Contribution Percentage with respect to
such Participant. Notwithstanding the foregoing, the aggregate of a
Participant's pre-tax contributions for a payroll period pursuant to Section
4.1(a) and a Participant's after-tax contributions for a payroll period pursuant
to this Section 5.1 may not exceed an amount equal to the Maximum Contribution
Percentage with respect to such Participant. An Employer shall deliver to the
Trustee any after-tax contributions for a payroll period as soon as
administratively practicable after the date such contributions otherwise would
have been paid to the Participants as cash compensation, but in no event later
than the 15th business day of the month following the month during which such
contributions otherwise would have been paid to the Participants.
(b) Changes in the Rate or Suspension of After-Tax
Contributions. A Participant's after-tax contributions shall continue in effect
at the rate elected by the Participant pursuant to Section 3.2 until the
Participant changes or suspends such election. A Participant may change or
suspend such election at such time and in such manner as may be prescribed by
the Administrative Committee, provided that only the last change made by a
Participant during a payroll period shall be effectuated. Such change or
suspension shall be effective as of the first
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payroll period commencing after the date on which the change or suspension is
received, or such later payroll period as may be administratively practicable. A
Participant who has suspended after-tax contributions pursuant to this
subsection may resume after-tax contributions by making an election at such time
and in such manner as may be prescribed by the Administrative Committee.
(c) Form of Contributions. After-tax contributions shall be
contributed to the Plan in cash; provided, however, that if a Participant elects
that after-tax contributions made on his or her behalf be invested in the Harris
Stock Fund, the Company in its discretion may make such contributions in shares
of Harris Stock, which may be contributed at a discount from fair market value.
The portion of any such contribution that is attributable to a discount from
fair market value on shares of Harris Stock shall be disregarded for purposes of
determining whether the after-tax contributions made on behalf of a Participant
exceed the Maximum Contribution Percentage under Section 5.1(a) with respect to
such Participant.
Section 5.2. Rollover Contributions. (a) Requirements for
Rollover Contributions. If a Participant receives an "eligible rollover
distribution" (within the meaning of section 402(c)(4) of the Code) from an
employees' trust described in section 401(a) of the Code that is exempt from tax
under section 501(a) of the Code, from a qualified annuity plan described in
section 403(a) of the Code or from an individual retirement account or annuity
described in section 408(a) or (b) of the Code (provided that such amount is
eligible to be rolled over from such individual retirement account or annuity
and no amount in such individual retirement account or annuity is attributable
to any source other than an eligible rollover distribution from an employees'
trust described in section 401(a) of the Code that 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
17
any earnings thereon), then such Participant may contribute to the Plan an
amount that does not exceed the amount of such eligible rollover distribution
(including the proceeds from the sale of any property received as part of such
eligible rollover distribution). Notwithstanding the foregoing, rollover
contributions to the Plan may not include any portion of an eligible rollover
distribution that consists of after-tax employee contributions. A rollover
contribution may be in the form of cash or, with the consent of the
Administrative Committee or its delegate, a promissory note evidencing an
outstanding loan balance.
(b) Delivery of Rollover Contributions. Any rollover
contribution made pursuant to this Section shall be delivered by the Participant
to the Trustee on or before the 60th day after the day on which the Participant
receives the distribution (or on or before such later date as may be prescribed
by law) or shall be transferred to the Trustee on behalf of the Participant
directly from the trust from which the eligible rollover distribution is made.
Any such contribution must be accompanied by any information or documentation in
connection therewith requested by the Administrative Committee or the Trustee.
Notwithstanding the foregoing, the Administrative Committee shall not permit a
rollover contribution if in its judgment accepting such contribution would cause
the Plan to violate any provision of the Code or Regulations.
ARTICLE 6
LIMITATIONS ON CONTRIBUTIONS
Section 6.1. Annual Limit on Pre-Tax Contributions. (a)
General Rule. Notwithstanding the provisions of Section 4.1, pre-tax
contributions made on behalf of a Participant pursuant to such Section for any
calendar year shall not exceed the dollar limitation in effect for such calendar
year under section 402(g) of the Code, except to the extent permitted
18
under Section 4.1(c) of the Plan and section 414(v) of the Code with respect to
"catch-up contributions."
(b) Excess Pre-Tax Contributions.
(1) Characterization as After-Tax Contributions. Except to the
extent set forth in Section 4.1(c) of the Plan and section 414(v) of the Code
with respect to "catch-up contributions," if for any calendar year the pre-tax
contributions to the Plan or the aggregate of the pre-tax contributions to the
Plan plus amounts contributed under other plans or arrangements described in
section 401(k), 403(b), 408(k) or 408(p) of the Code for a Participant reach the
limit imposed by subsection (a) of this Section for such calendar year, any
contributions under the Plan during the calendar year that exceed such limit
("excess deferrals") shall be characterized as after-tax contributions.
(2) Distribution. Notwithstanding the foregoing, and except to
the extent set forth in Section 4.1(c) of the Plan and section 414(v) of the
Code with respect to "catch-up contributions," if any excess deferrals of a
Participant are not characterized as after-tax contributions, because of the
limitation set forth in Section 5.1 on the amount of after-tax contributions
that may be made to the Plan or otherwise, such Participant shall, pursuant to
such rules and at such time following such calendar year as determined by the
Administrative Committee, be allowed to submit a written request that the excess
deferrals, plus any income and minus any loss allocable thereto, be distributed
to the Participant. The amount of any income or loss allocable to such excess
deferrals shall be determined pursuant to Regulations. Such amount of excess
deferrals, as adjusted for income or loss, shall be distributed to the
Participant no later than April 15 following the calendar year for which such
contributions were made. Notwithstanding the provisions of this subsection
(b)(2), any such excess deferrals shall be
19
treated as "annual additions" for purposes of Section 6.3 for the limitation
year in which such contributions were made. The amount of excess deferrals that
may be distributed under this subsection (b)(2) with respect to a Participant
for a calendar year shall be reduced by any amounts previously distributed
pursuant to Section 6.2(d)(1) with respect to such Participant for such year.
Section 6.2. Limits on Contributions for Highly Compensated
Employees.
(a) Actual Deferral Percentage Test Imposed by Section
401(k)(3) of the Code. Notwithstanding the provisions of Section 4.1, if the
pre-tax contributions made pursuant to Section 4.1 for a Plan Year fail, or in
the judgment of the Administrative Committee are likely to fail, to satisfy both
of the tests set forth in paragraphs (1) and (2) of this subsection, the
adjustments prescribed in Section 6.2(d)(1) shall be made. Any pre-tax
contributions which are "catch-up contributions" described in Section 4.1(c)
shall not be considered to be pre-tax contributions for purposes of determining
whether the tests set forth in paragraphs (1) and (2) of this subsection are
satisfied or for purposes of making any adjustments prescribed by Section
6.2(d)(1).
(1) The HCE average deferral percentage for such year does not
exceed the product of the NHCE average deferral percentage for such
year and 1.25.
(2) The HCE average deferral percentage for such year (i) does
not exceed the NHCE average deferral percentage for such year by more
than two percentage points and (ii) does not exceed the product of the
NHCE average deferral percentage for such year and 2.0.
(b) Actual Contribution Percentage Test Imposed by Section
401(m) of the Code. Notwithstanding the provisions of Sections 4.2 and 5.1, if
the aggregate of the matching contributions made pursuant to Section 4.2 and the
after-tax contributions made pursuant to Section 5.1 for a Plan Year fail, or in
the judgment of the Administrative Committee are likely to
20
fail, to satisfy both of the tests set forth in paragraphs (1) and (2) of this
subsection, the adjustments prescribed in Section 6.2(d)(2) shall be made.
(1) The HCE average contribution percentage for such year does
not exceed the product of the NHCE average contribution percentage for
such year and 1.25.
(2) The HCE average contribution percentage for such year (i)
does not exceed the NHCE average contribution percentage for such year
by more than two percentage points and (ii) does not exceed the product
of the NHCE average contribution percentage for such year and 2.0.
(c) Definitions and Special Rules. For purposes of this
Section, the following definitions and special rules shall apply:
(1) The "actual deferral percentage test" refers collectively
to the tests set forth in paragraphs (1) and (2) of subsection (a) of
this Section relating to pre-tax contributions. The actual deferral
percentage test shall be satisfied if either of such tests are
satisfied.
(2) The "HCE average deferral percentage" for a Plan Year is a
percentage determined for the group of Eligible Employees who are
eligible to make pre-tax contributions for the current Plan Year and
who are Highly Compensated Employees for the current Plan Year. Such
percentage shall be equal to the average of the ratios, calculated
separately for each such Eligible Employee to the nearest one-hundredth
of one percent, of the pre-tax contributions for the benefit of such
Eligible Employee for the current Plan Year (if any) to the total
compensation for the current Plan Year paid to such Eligible Employee.
(3) The "NHCE average deferral percentage" for a Plan Year is
a percentage determined for the group of Eligible Employees who were
eligible to make pre-tax contributions for the immediately preceding
Plan Year and who were not Highly Compensated Employees for the
immediately preceding Plan Year. Such percentage shall be equal to the
average of the ratios, calculated separately for each such Eligible
Employee to the nearest one-hundredth of one percent, of the pre-tax
contributions for the benefit of such Eligible Employee for the
immediately preceding Plan Year (if any) to the total compensation for
the immediately preceding Plan Year paid to such Eligible Employee.
(4) The "actual contribution percentage test" refers
collectively to the tests set forth in paragraphs (1) and (2) of
subsection (b) of this Section relating to matching contributions and
after-tax contributions. The actual contribution percentage test shall
be satisfied if either of such tests are satisfied.
(5) The "HCE average contribution percentage" for a Plan Year
is a percentage determined for the group of Eligible Employees who are
eligible to have matching contributions, after-tax contributions, or in
the discretion of the Administrative
21
Committee and to the extent permitted under rules prescribed by the
Secretary of the Treasury or otherwise under the law, pre-tax
contributions, made for their benefit for the current Plan Year and who
are Highly Compensated Employees for the current Plan Year. Such
percentage shall be equal to the average of the ratios, calculated
separately for each such Eligible Employee to the nearest one-hundredth
of one percent, of the matching contributions, after-tax contributions
and, in the discretion of the Administrative Committee and to the
extent permitted under rules prescribed by the Secretary of the
Treasury or otherwise under the law, pre-tax contributions, made for
the benefit of such Eligible Employee for the current Plan Year (if
any) to the total compensation for the current Plan Year paid to such
Eligible Employee.
(6) The "NHCE average contribution percentage" for a Plan Year
is a percentage determined for the group of Eligible Employees who were
eligible to have matching contributions, after-tax contributions, or in
the discretion of the Administrative Committee and to the extent
permitted under rules prescribed by the Secretary of the Treasury or
otherwise under the law, pre-tax contributions, made for their benefit
for the immediately preceding Plan Year and who were not Highly
Compensated Employees for the immediately preceding Plan Year. Such
percentage shall be equal to the average of the ratios, calculated
separately for each such Eligible Employee to the nearest one-hundredth
of one percent, of the matching contributions, after-tax contributions
and, in the discretion of the Administrative Committee and to the
extent permitted under rules prescribed by the Secretary of the
Treasury or otherwise under the law, pre-tax contributions, made for
the benefit of such Eligible Employee for the immediately preceding
Plan Year (if any) to the total compensation for the immediately
preceding Plan Year paid to such Eligible Employee.
(7) The term "compensation" shall have the meaning set forth
in section 414(s) of the Code or, in the discretion of the
Administrative Committee, any other meaning in accordance with the Code
for these purposes.
(8) If the Plan and one or more other plans of an Employer 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 an Employer to which any such contributions are made, all such
contributions shall be aggregated for purposes of this Section.
(9) Solely for purposes of this Section 6.2, if shares of
Harris Stock are contributed to the Plan at a discount from fair market
value in connection with a Participant's election to invest his or her
pre-tax contribution in the Harris Stock Fund, then the amount of such
discount shall be treated as a matching contribution.
22
(d) Adjustments to Comply with Limits.
(1) Adjustments to Comply with Actual Deferral Percentage
Test. The Administrative Committee shall cause to be made such periodic
computations as it shall deem necessary or appropriate to determine
whether the actual deferral percentage test will be satisfied during a
Plan Year, and, if it appears to the Administrative Committee that such
test will not be satisfied, the Administrative Committee shall take
such steps as it deems necessary or appropriate to adjust the pre-tax
contributions made pursuant to Section 4.1 for all or a portion of the
remainder of such Plan Year for the benefit of some or all of the
Highly Compensated Employees to the extent necessary in order for the
actual deferral percentage test to be satisfied. If, after the end of
the Plan Year, the Administrative Committee determines that,
notwithstanding any adjustments made pursuant to the preceding
sentence, the actual deferral percentage test was not satisfied, the
Administrative Committee shall calculate a total amount by which
pre-tax contributions must be reduced in order to satisfy 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 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 Employee or until
the total reduction equals the excess contributions amount. If further
reductions are necessary, then the pre-tax contributions on behalf of
each Participant who is a Highly Compensated Employee and whose actual
dollar amount of pre-tax contributions for such Plan Year is the
highest (determined after the reduction described in the preceding
sentence) shall be reduced in accordance with the preceding sentence.
Such reductions shall continue to be made to the extent necessary so
that the total reduction equals the excess contributions amount. The
portion of a Participant's pre-tax contributions to be reduced in
accordance with this Section 6.2(d)(1) shall be recharacterized as an
after-tax contribution, and the Participant shall be notified of such
recharacterization and the tax consequences thereof no later than 2 1/2
months after the end of the Plan Year (or if notification by such date
is administratively impracticable, no later than the last day of the
subsequent Plan Year). The amount of a Participant's pre-tax
contributions to be reduced in accordance with this Section shall be
reduced by any excess deferrals previously distributed to such
Participant pursuant to Section 6.1 in order to comply with the
limitations of section 402(g) of the Code. The amount of any income or
loss allocable to any such reductions shall be determined pursuant to
the applicable Regulations promulgated by the U.S. Treasury Department.
(2) Adjustments to Comply with Actual Contribution Percentage
Test. The Administrative Committee shall cause to be made such periodic
computations as it shall deem necessary or appropriate to determine
whether the average contribution percentage test will be satisfied
during a Plan Year, and, if it appears to the Administrative Committee
that such test will not be satisfied, the Administrative Committee
shall take such steps as it deems necessary or appropriate to adjust
the matching contributions and the after-tax contributions made
pursuant to Section 4.2 and 5.1, respectively, for all or a portion of
the remainder of such Plan Year on behalf of some or all of the Highly
23
Compensated Employees to the extent necessary in order for the average
contribution percentage test to be satisfied. If, after the end of the
Plan Year, the Administrative Committee determines that,
notwithstanding any adjustments made pursuant to the preceding
sentence, the average contribution percentage test was not satisfied,
the Administrative Committee shall, in its discretion, (1) allocate a
qualified nonelective contribution pursuant to Section 6.2(e) or (2)
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 the average contribution percentage test. The reduction
described in the preceding 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 contributions attributable thereto, and
third with respect to any other matching contributions. With respect to
contributions to be so reduced, no later than 2 1/2 months after the
end of the Plan Year (or if correction by such date is administratively
impracticable, no later than the last day of the subsequent Plan Year),
the Administrative Committee shall cause to be distributed to each such
Participant the amount of such reductions made with respect to vested
matching contributions 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 on the
date of the Participant's actual termination of employment, if earlier)
and with respect to after-tax contributions (plus any income and minus
any loss allocable thereto), and any remaining amount of such
reductions (plus any income and minus any loss allocable thereto) shall
be forfeited. Any amounts forfeited pursuant to this paragraph shall be
treated in the same manner as forfeitures described in Section 9.2(b).
The amount of any such income or loss allocable to any such reduction
to be so distributed or forfeited shall be determined pursuant to
applicable Regulations promulgated by the U.S. Treasury Department.
(e) Qualified Nonelective Contributions. Subject to the
limitations set forth in Sections 6.3 and 6.4, and to the extent permitted by
Regulations or other pronouncements of the Internal Revenue Service, for
purposes of satisfying the actual contribution percentage test set forth in
Section 6.2(b), the Employers may contribute for a Plan Year such amount, if
any, as may be designated as a "qualified nonelective contribution" within the
meaning of section 401(m)(4)(C) of the Code. Any qualified nonelective
contribution to the Plan shall be allocated to the Accounts of those
Participants who are not Highly Compensated Employees for the Plan Year with
respect to which such qualified nonelective contribution is made and who are
actively employed by the contributing Employer on the date such contribution is
made, beginning with
24
the Participant with the lowest Compensation for such Plan Year and allocating
the maximum amount permissible under Section 6.3 before allocating any portion
of such qualified nonelective contribution to the Participant with the next
lowest Compensation for the Plan Year. Such allocation shall continue until the
Plan satisfies the requirements in Section 6.2(b) or until the amount of such
qualified nonelective contribution has been completely allocated. Any such
qualified nonelective contributions and earnings and losses thereon shall be
accounted for separately by the Trustee and shall be distributable in accordance
with the provisions of Article 9. Notwithstanding any provision of the Plan to
the contrary, the portion of a Participant's account derived from qualified
nonelective contributions at all times shall be nonforfeitable.
Section 6.3. Maximum Annual Additions under Section 415 of the
Code. Notwithstanding any other provision of the Plan, and except to the extent
permitted under Section 4.1(c) of the Plan and section 414(v) of the Code with
respect to "catch-up contributions," the amounts allocated to the Account of
each Participant for any limitation year shall be limited so that the aggregate
annual additions for such year to the Participant's Account and to the
Participant's accounts in all other defined contribution plans maintained by an
employer shall not exceed the lesser of:
(a) $40,000 (as adjusted pursuant to section 415(d) of the
Code); and
(b) 100% of the Participant's compensation for such limitation
year (or such other percentage of compensation set forth in section 415(c) of
the Code).
If the annual additions to a Participant's Account exceed the
limitations set forth above for any limitation year (i) as a result of a
reasonable error in estimating a Participant's annual compensation, (ii) as a
result of a reasonable error in determining the amount of pre-tax contributions
that may be made by a Participant under section 415 of the Code or (iii) under
25
other limited facts and circumstances as determined by the Commissioner of
Internal Revenue, the amounts to be allocated to such Participant's Account for
such year shall be reduced to the extent of the excess in the following order:
(1) Pre-tax contributions in excess of 6% of the Participant's
Compensation;
(2) Remaining pre-tax contributions and any matching
contributions attributable thereto on a pro rata basis;
(3) Profit sharing contributions;
(4) After-tax contributions in excess of 6% of the
Participant's Compensation; and
(5) Remaining after-tax contributions and any matching
contributions attributable thereto on a pro rata basis.
Any pre-tax contributions or after-tax contributions so reduced, plus earnings
thereon, shall be distributed to the Participant. Any matching contributions or
profit sharing contributions so reduced, plus earnings thereon, shall be held in
a segregated suspense account and shall be treated in the next limitation year
as matching contributions or profit sharing contributions, as the case may be,
thereby reducing amounts actually contributed by the Employers for such year.
Upon termination of the Plan, any balance in such suspense account shall be
returned to each Employer in the amount determined by the Administrative
Committee, but only if the allocation upon Plan termination of such amount to
Participants would cause all Participants to receive annual additions in excess
of the limitations of section 415 of the Code.
The "annual additions" for a Plan Year to a Participant's
Account and to the Participant's accounts in any other defined contribution plan
is the sum for such limitation year of:
(a) the amount of employer contributions (including pre-tax
contributions) allocated to the Participant's account, excluding, however, any
pre-tax contributions that are
26
"catch-up contributions" made pursuant to Section 4.1(c) of the Plan and section
414(v) of the Code,
(b) the amount of forfeitures allocated to the Participant's
account,
(c) the amount allocated to any individual medical benefit
account (as defined in section 415(l) of the Code) maintained on behalf of the
Participant, and
(d) the amount of contributions by the Participant to any such
plan, but excluding any rollover contribution made thereto.
For purposes of this Section, the "limitation year" shall be
the Plan Year, the terms "compensation" and "defined contribution plan" shall
have the meanings set forth in section 415 of the Code and Regulations, and a
Participant's employer shall include entities that are members of the same
controlled group (within the meaning of section 414(b) of the Code as modified
by section 415(h) of the Code) or affiliated service group (within the meaning
of section 414(m) of the Code) as the Participant's employer or under common
control (within the meaning of section 414(c) of the Code as modified by section
415(h) of the Code) with the Participant's employer or such entities.
Section 6.4. Other Limitations on Employer Contributions. The
contributions of the Employers for a Plan Year shall not exceed the maximum
amount for which a deduction is allowable to such Employers for federal income
tax purposes for the fiscal year of such Employers that ends with such Plan
Year.
Any contribution made by an Employer by reason of a good faith
mistake of fact, or the portion of any contribution made by an Employer that
exceeds the maximum amount for which a deduction is allowable to such Employer
for federal income tax purposes by reason of a good faith mistake in determining
the maximum allowable deduction, shall upon the request of
27
such Employer be returned by the Trustee to the Employer. An Employer's request
and the return of any such contribution must be made within one year after such
contribution was mistakenly made or after the deduction of such excess portion
of such contribution was disallowed, as the case may be. The amount to be
returned to an Employer pursuant to this paragraph shall be the excess of (i)
the amount contributed over (ii) the amount that would have been contributed had
there not been a mistake of fact or a mistake in determining the maximum
allowable deduction. Earnings attributable to the mistaken contribution shall
not be returned to the Employer, but losses attributable thereto shall reduce
the amount to be so returned. If the return to the Employer of the amount
attributable to the mistaken contribution would cause the balance of any
Participant's Account as of the date such amount is to be returned (determined
as if such date coincided with the close of a Plan Year) to be reduced to less
than what would have been the balance of such Account as of such date had the
mistaken amount not been contributed, the amount to be returned to the Employer
shall be limited so as to avoid such reduction.
ARTICLE 7
TRUST AND INVESTMENT FUNDS
Section 7.1. Trust. A Trust shall be created by the execution
of a trust agreement between the Company (acting on behalf of the Employers) 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 Administrative
Committee directs in accordance with the Plan.
28
Section 7.2. Investments. (a) In General. The Investment
Committee shall establish an investment policy for the Plan. The Investment
Committee shall cause the Trustee to establish and maintain two or more separate
investment funds exclusively for the collective investment and reinvestment as
directed by Participants of amounts credited to their Accounts. Additional
investment funds may be established as determined by the Investment Committee
from time to time in its sole discretion. The Investment Committee, in its sole
discretion, may appoint investment managers to provide services in connection
with the investment funds established under the Plan.
(b) Harris Stock Fund. In addition to the investment funds
established pursuant to Section 7.2(a), the Investment Committee may cause the
Trustee to establish, operate and maintain a Harris Stock Fund. The assets of
the Harris Stock Fund shall be invested primarily in shares of Harris Stock. The
assets of the Harris Stock Fund also may be invested in short-term liquid
investments. Each Participant's interest in the Harris Stock Fund shall be
represented by units of participation, and each such unit shall represent a
proportionate interest in all the assets of such fund.
ARTICLE 8
PARTICIPANT ACCOUNTS
AND INVESTMENT ELECTIONS
Section 8.1. Participant Accounts. The Administrative
Committee shall establish and maintain, or cause the Trustee or such other agent
as the Administrative Committee may select, to establish and maintain a separate
Account for each Participant. Such Account shall be solely for accounting
purposes, and no segregation of assets of the Trust Fund among the separate
Accounts shall be required. Each Account shall consist of the following
subaccounts:
29
(i) if pre-tax contributions have been made for the
benefit of a Participant pursuant to Section 4.1, a Pre-Tax Account to
which shall be credited such amounts and subsequent earnings and losses
thereon;
(ii) if matching contributions have been made for the
benefit of a Participant pursuant to Section 4.2, a Matching Account to
which shall be credited such amounts and subsequent earnings and losses
thereon;
(iii) if profit sharing contributions have been made for
the benefit of a Participant pursuant to Section 4.3, a Profit Sharing
Account to which shall be credited such amounts and subsequent earnings
and losses thereon;
(iv) if after-tax contributions have been made by a
Participant pursuant to Section 5.1, an After-Tax Account to which
shall be credited such amounts and subsequent earnings and losses
thereon;
(v) if a rollover contribution has been made by a
Participant pursuant to Section 5.2, a Rollover Account to which shall
be credited such amount and subsequent earnings and losses thereon; and
(vi) if applicable, a Savings Account to which shall be
credited a Participant's savings contributions under the Plan as in
effect prior to July 1, 1983, and subsequent earnings and losses
thereon.
The Administrative Committee shall establish and maintain, or
cause the Trustee or such other agent as the Administrative Committee may
select, to establish and maintain investment subaccounts with respect to each
investment fund described in Section 7.2 to which amounts contributed under the
Plan shall be credited according to each Participant's investment elections
pursuant to Section 8.2. All such investment subaccounts shall be solely for
accounting purposes, and there shall be no segregation of assets within the
investment funds among the separate investment subaccounts.
Section 8.2. Investment Elections. (a) Initial Election. Each
Participant shall make, in the manner prescribed by the Administrative
Committee, an investment election that shall apply to the investment of
contributions made for a Participant's benefit and any earnings on such
contributions, subject to such limitations set forth herein or imposed by the
30
Administrative Committee from time to time. Such election shall specify that
such contributions be invested either (i) wholly in one of the funds maintained
by the Trustee pursuant to Section 7.2, or (ii) divided among two or more of
such funds in increments of 1% (or such larger percentage established by the
Administrative Committee from time to time). During any period in which no
direction as to the investment of a Participant's Account is on file with the
Administrative Committee, contributions made for a Participant's benefit shall
be invested in the Balanced Fund.
(b) Change of Election. A Participant may change his or her
investment election as of any Valuation Date, subject to such limitations as the
Administrative Committee from time to time may impose (including restrictions on
investment election changes that apply solely to a particular investment fund).
A Participant's investment election change shall be limited to the investment
funds then maintained by the Trustee pursuant to Section 7.2. A change in
investment election made pursuant to this Section shall apply to a Participant's
existing Account or contributions made for the benefit of the Participant after
such change, or both. Any such change shall specify that such Account or
contributions be invested either (i) wholly in one of the funds maintained by
the Trustee pursuant to Section 7.2 or (ii) divided among two or more of such
funds in increments of 1% (or such larger percentage established by the
Administrative Committee from time to time) or, solely with respect to a
Participant's existing Account, in fixed dollar amounts. A Participant's change
of investment election must be made in the manner prescribed by the
Administrative Committee. The Administrative Committee shall prescribe rules
regarding the time by which such an election must be made in order to be
effective for a particular Valuation Date.
31
(c) Special Rules Concerning the Harris Stock Fund.
Notwithstanding any provision of the Plan to the contrary, the following rules
shall apply to investments in the Harris Stock Fund:
(1) Availability. Only pre-tax contributions, after-tax
contributions and matching contributions may be invested in the Harris
Stock Fund. The aggregate of the pre-tax contribution and after-tax
contribution invested in the Harris Stock Fund for any payroll period
shall not exceed 1% (or such larger percentage established by an
appropriate committee of the Board from time to time) of the
Participant's Compensation for the payroll period; provided, however,
that the portion of any pre-tax contribution or after-tax contribution
that is attributable to a discount from fair market value on shares of
Harris Stock shall be disregarded for purposes of this sentence. To the
extent that pre-tax contributions or after-tax contributions are
invested in the Harris Stock Fund, the matching contributions
attributable thereto also shall be invested in the Harris Stock Fund.
(2) 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 before the
expiration of the Holding Period if a Participant or Beneficiary is
entitled to a distribution under the Plan pursuant to Section 9.3. The
Investment Committee, in its sole discretion, may impose additional
restrictions or requirements regarding transfers from the Harris Stock
Fund.
(3) Dividends. A Participant's allocable share of cash or
stock dividends (and other cash earnings) credited to the Harris Stock
Fund shall 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 dividends (or other cash earnings) are paid.
(4) Contributions. Amounts invested in the Harris Stock Fund
normally shall be contributed in cash; provided, however, that the
Company, in its discretion, may contribute such amounts in Harris
Stock, which may be contributed at a discount from fair market value.
The Trustee is authorized to purchase shares of Harris Stock on the
open market, and to give effect to any discount from fair market value
established from time to time by allocating shares to a 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.
Section 8.3. Valuation of Funds and Plan Accounts. The value
of an investment fund as of any Valuation Date shall be the market value of all
assets (including any uninvested cash) held by the fund on such Valuation Date
as determined by the Trustee, reduced by the
32
amount of any accrued liabilities of the fund on such Valuation Date. The
Trustee's determination of market value shall be binding and conclusive upon all
parties. The value of a Participant's Account as of any Valuation Date shall be
the sum of the values of his or her investment subaccounts in each of the
accounts listed in Section 8.1.
Section 8.4. Valuation of Units within the Harris Stock Fund.
As soon as practicable after the close of business on each Valuation Date, the
Trustee shall determine the value of the Harris Stock Fund on such Valuation
Date in the manner prescribed in Section 8.3, and the value so determined shall
be divided by the total number of Harris Stock Fund participating units
allocated to the investment subaccounts of Participants. The resulting quotient
shall be the value of a participating unit in the Harris Stock Fund as of such
Valuation Date and shall constitute the "price" of a participating unit as of
such Valuation Date. Participating units shall be credited, at the price so
determined, to the investment subaccounts of Participants with respect to moneys
contributed or transferred to such investment subaccounts on their behalf on
such Valuation Date. The price of such participating units shall be debited to
the investment subaccounts of Participants with respect to moneys divested from
such investment subaccounts on their behalf on such Valuation Date. The value of
all participating units credited to Participants' investment subaccounts shall
be redetermined in a similar manner as of each Valuation Date.
Section 8.5. Allocation of Contributions Other than Profit
Sharing Contributions. Any pre-tax contribution, matching contribution,
after-tax contribution or rollover contribution shall be allocated to the
Pre-Tax Account, Matching Account, After-Tax Account or Rollover Account, as
applicable, of the Participant for whom such contribution is made as soon as
practicable after the Valuation Date coinciding with or next following the date
on which such
33
contribution is delivered to the Trustee and shall be credited to such
Participant's Account as of such Valuation Date.
Section 8.6. Allocation of Profit Sharing Contributions. (a)
Eligibility. A profit sharing contribution made by the Employers or the Company
pursuant to Section 4.3 for a Plan Year shall be allocated to the Profit Sharing
Accounts of Participants who have completed a Year of Service on or prior to the
last day of such Plan Year and who (i) are actively employed as Eligible
Employees on the earlier of (A) the last day of such Plan Year and (B) the June
30th nearest to the last day of such Plan Year (the "Eligibility Date"); (ii)
were actively employed as Eligible Employees during such Plan Year but are not
actively employed on the Eligibility Date due to Leave of Absence or a period of
Qualified Military Service; or (iii) were actively employed as Eligible
Employees during such Plan Year but terminated employment during such Plan Year
(A) on or after the attainment of age 55, (B) due to death or Disability, (C) as
a result of a Reduction in Force or (D) as a result of a transfer from
employment with an Employer to employment with an Affiliate that is not an
Employer. A Participant who is eligible for an allocation of a profit sharing
contribution for a Plan Year shall be referred to within this Section 8.6 as an
"Eligible Participant."
(b) Amount. A profit sharing contribution for a Plan Year
shall be allocated among the Eligible Participants in the proportion that the
aggregate of the Compensation and Excess Compensation paid by the Employers or
the Company to each such Eligible Participant during such Plan Year bears to the
aggregate of the total Compensation and Excess Compensation paid by the
Employers or the Company to all such Eligible Participants during such Plan
Year. Such allocation shall be made as soon as practicable after the Valuation
Date coinciding with or next following the date on which the profit sharing
contribution is delivered to
34
the Trustee and shall be credited to such Participants' Profit Sharing Accounts
as of such Valuation Date.
(c) Limitation On Amount. Notwithstanding subsection (b), the
amount allocated to an Eligible Participant with respect to Excess Compensation
shall not exceed the "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 Eligible 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 of an Eligible Participant contributed by the Employers or the
Company with respect to such Participant's Compensation not in excess of the
Participant's Taxable Wage Base.
Section 8.7. Correction of Error. If it comes to the attention
of the Administrative Committee that an error has been made in any of the
allocations prescribed by this Article 8, appropriate adjustment shall be made
to the Accounts of all Participants and Beneficiaries that are affected by such
error, except that no adjustment need be made with respect to any Participant or
Beneficiary whose Account has been distributed in full prior to the discovery of
such error.
ARTICLE 9
WITHDRAWALS AND DISTRIBUTIONS
Section 9.1. Withdrawals Prior to Termination of Employment.
(a) Withdrawals from After-Tax Account and Savings Account. As of any Valuation
Date, a
35
Participant may withdraw all or any portion of his or her After-Tax Account or
Savings Account; provided, however, that (i) only one such withdrawal may be
made in any three-month period; (ii) such withdrawal shall be in the form of a
lump sum payment; (iii) a Participant may not withdraw any amount from his or
her Savings Account until the entire balance of his or her After-Tax Account has
been withdrawn; and (iv) a Participant's election under the Plan to make
after-tax contributions, if any, shall be suspended, and no after-tax
contributions or matching contributions attributable to after-tax contributions
shall be allocated to the Participant's Account, for a period of three months
after the date of such withdrawal from the Participant's After-Tax Account. At
the expiration of such three-month suspension period, a Participant may resume
making after-tax contributions in accordance with the procedures set forth in
Section 5.1.
(b) Hardship Withdrawals. Subject to the provisions of this
subsection, a Participant who has taken all loans available to the Participant
under Article 10, has taken all withdrawals available to the Participant under
Sections 9.1(a) and (c) and has incurred a financial hardship may withdraw as of
any Valuation Date all or any portion of the combined balance of his or her (i)
pre-tax contributions, (ii) Rollover Account and (iii) vested Profit Sharing
Account. The amount of such withdrawal shall not exceed the amount needed to
satisfy the financial hardship, including amounts necessary to pay any federal,
state or local taxes or any penalties reasonably anticipated to result from the
hardship withdrawal. The determination of the existence of a financial hardship
and the amount required to be distributed to satisfy such hardship shall be made
in a uniform and non-discriminatory manner according to the following rules:
(1) A financial hardship shall be deemed to exist if and only
if the Participant certifies that the financial need is on account of:
(A) expenses for medical care described in section
213(d) of the Code previously incurred by the Participant, the
Participant's spouse, or any dependents
36
of the Participant (as defined in section 152 of the Code) or
necessary for such persons to obtain medical care described in
section 213(d) of the Code;
(B) costs directly related to the purchase of a
principal residence for the Participant (excluding mortgage
payments);
(C) payment of tuition, room and board and related
educational fees for the next 12 months of post-secondary
education for the Participant, the Participant's spouse or any
dependents of the Participant (as defined in section 152 of
the Code);
(D) payments necessary to prevent the eviction of the
Participant from the Participant's principal residence or
foreclosure of the mortgage on that residence; or
(E) 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).
(2) A distribution shall be treated as necessary to satisfy a
financial need if and only if the Participant certifies (and if the
Administrative Committee has no reason to believe that such
certification is inaccurate) that such hardship cannot be relieved by
or through:
(A) reimbursement or compensation by insurance or
otherwise;
(B) cessation of pre-tax contributions and after-tax
contributions under the Plan;
(C) reasonable liquidation of the Participant's
assets (including assets of the Participant's spouse and minor
children that are reasonably available to the Participant), to
the extent such liquidation would not itself cause an
immediate and heavy financial need; or
(D) other distributions or nontaxable (at the time of
the loan) loans from this Plan or other plans maintained by an
Employer or by another employer, or by borrowing from
commercial sources on reasonable commercial terms.
(3) The Participant shall be required to submit any additional
supporting documentation as may be requested by the Administrative
Committee.
(4) Any hardship withdrawal pursuant to this Section 9.1(b)
shall be in the form of a lump sum payment.
(5) A Participant may receive a hardship withdrawal pursuant
to this Section 9.1(b) no more than once during any six-month period.
(6) Amounts distributed to a Participant pursuant to this
Section 9.1(b) shall be withdrawn first from the Participant's Rollover
Account, next from the Participant's pre-
37
tax contributions and finally from the vested portion of the
Participant's Profit Sharing Account and shall not be taken from the
next source until the previous source has been depleted.
(7) Notwithstanding any provision of the Plan to the contrary,
a Participant who receives a hardship withdrawal hereunder on or after
July 1, 2003 shall be prohibited from making any pre-tax contributions
or after-tax contributions under Section 4.1 or Section 5.1,
respectively, and under all other plans of the Employers and Affiliates
until the first payroll period commencing coincident with or next
following the date which is six months after the date the hardship
withdrawal was made (or such earlier date as may be permitted by
applicable Regulations). Such a Participant may elect to resume making
pre-tax contributions in accordance with the procedures set forth in
Section 4.1 and resume making after-tax contributions in accordance
with the procedures set forth in Section 5.1. For purposes of this
paragraph, "all other plans of the Employers and Affiliates" shall
include stock option plans, stock purchase plans, qualified and
nonqualified deferred compensation plans and such other plans as may be
designated under Regulations, but shall not include health and welfare
plans and the mandatory employee contribution portion of a defined
benefit plan.
(c) Withdrawals On or After Age 59 1/2. As of any Valuation
Date, a Participant who has attained age 59 1/2 may withdraw all or any portion
of his or her vested Account. A withdrawal made pursuant to this Section 9.1(c)
shall be made at the Participant's election in any form of payment provided
under Section 9.3(c).
(d) Conditions Applicable to All Withdrawals. A Participant's
request for a withdrawal pursuant to this Section 9.1 shall be made at such time
and in such manner as may be prescribed by the Administrative Committee. The
amount available for withdrawal pursuant to this Section 9.1 shall be reduced by
the amount of any loan made pursuant to Article 10 that is outstanding at the
time of withdrawal, and no withdrawal pursuant to this Section 9.1 shall be
permitted to the extent that such withdrawal would cause the aggregate amount of
such outstanding loan to exceed the limits described in Section 10.1. No
withdrawal shall be permitted under this Section 9.1 of the portion of a
Participant's Account, if any, which is invested in the Harris Stock Fund and
which has not satisfied the Holding Period described in Section 8.2(c). The
amount available for withdrawal under this Section 9.1 is subject to
38
reduction in the sole discretion of the Administrative Committee to take into
account the investment experience of the Trust Fund between the date of the
withdrawal election and the date of the withdrawal.
Section 9.2. Distribution of Account Upon Termination of
Employment. (a) Termination of Employment under Circumstances Entitling
Participant to Full Distribution of Account. If a Participant's employment with
all Employers and Affiliates terminates under any of the following
circumstances, then the Participant or his or her designated Beneficiary, as the
case may be, shall be entitled to receive the Participant's entire Account:
(1) on or after the date the Participant attains age 55;
(2) on account of the Participant's death;
(3) on account of the Participant's Disability; or
(4) after the Participant is credited with at least six Years
of Service.
(b) Termination of Employment under Circumstances Resulting in
Partial Forfeiture of the Participant's Account. If a Participant's employment
with all Employers and Affiliates terminates under circumstances other than
those set forth in Section 9.2(a), then the Participant shall be entitled to
receive (i) the entire balance of the Participant's Pre-Tax Account, After-Tax
Account, Rollover Account and Savings Account and (ii) a percentage of the
balance of the Participant's Matching Account and Profit Sharing Account, which
percentage shall be determined as follows by reference to the Participant's
Years of Service as of the date of the Participant's termination of employment:
Years of Service Percentage
---------------- ----------
Less than 2 0%
At least 2 but less than 3 20%
At least 3 but less than 4 40%
At least 4 but less than 5 60%
39
At least 5 but less than 6 80%
6 or more 100%
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, a Participant
affected by such sale may be entitled to the entire balance of the Participant's
Account, irrespective of the Participant's Years of Service, if expressly
provided in the documents effecting the transaction or otherwise authorized by
the Company.
Any portion of a Participant's Matching Account and Profit
Sharing Account which the Participant is not entitled to receive pursuant to
this Section 9.2(b) shall be charged to such accounts and forfeited as of the
earlier of (i) the date the Participant receives a distribution of the
Participant's vested Account pursuant to Section 9.3 or 9.4 and (ii) the last
day of the calendar year during which the Participant's employment terminates.
If such Participant is reemployed prior to incurring a Break in Service of five
consecutive years, then such forfeiture shall be reinstated as prescribed in
Section 11.2(b). Amounts forfeited pursuant to this Section shall be used first
to restore the Accounts of "missing" Participants or Beneficiaries of the
Employer of the Participant whose Account was forfeited as described in Section
9.8, next to restore the Accounts of Participants who are reemployed by the
Employer of such Participant as described in Sections 11.2(b) and finally to
reduce future contributions to the Plan by the Employer of such Participant.
Section 9.3. Time and Form of Distribution upon Termination of
Employment. (a) In General. A Participant shall be entitled to a distribution of
his or her vested Account upon the Participant's termination of employment with
all Employers and Affiliates.
(b) Time of Distribution. A Participant shall be entitled to a
distribution of his or her vested Account as soon as administratively
practicable after the date of the Participant's
40
termination of employment, or, subject to Section 9.4, may defer distribution to
a later date; provided, however, that:
(1) subject to Section 9.4, a Participant's Account shall not
be distributed prior to the Participant's 65th birthday unless the
Participant has consented in writing to such distribution;
(2) if a Participant dies before the commencement of
distribution of his or her Account, distributions paid or commencing
after the Participant's death shall be completed no later than December
31 of the calendar year which contains the fifth anniversary of the
Participant's death, except that (i) if the Participant's Beneficiary
is the Participant's spouse, distribution may be deferred until
December 31 of the calendar year in which the Participant would have
attained age 70 1/2 and (ii) if the Participant's Beneficiary is a
natural person other than the Participant's spouse and distributions
commence on or before December 31 of the calendar year immediately
following the calendar year in which the Participant died, such
distributions may be made over a period not longer than the life
expectancy of such Beneficiary;
(3) if at the time of a Participant's death, distribution of
his or her Account has commenced, the remaining portion of the
Participant's Account shall be paid at least as rapidly as under the
method of distribution being used prior to the Participant's death;
(4) unless a Participant files a written election to defer
distribution, distribution shall be made to a Participant by payment in
a single lump sum payment no later than 60 days after the end of the
Plan Year which contains the latest of (i) the date of the
Participant's termination of employment, (ii) the tenth anniversary of
the date the Participant commenced participation in the Plan and (iii)
the Participant's 65th birthday; provided, however, that if the
Participant does not elect a distribution prior to the latest to occur
of the events listed above, the Participant shall be deemed to have
elected to defer such distribution until a date no later than April 1
of the calendar year following the calendar year in which the
Participant attains age 70 1/2; and
(5) with respect to a Participant who continues in employment
after attaining age 70 1/2, distribution of the Participant's Account
shall commence no later than the Participant's required beginning date.
For purposes of this paragraph, the term "required beginning date"
shall mean (A) with respect to a Participant who is a 5%-owner (within
the meaning of section 416(i) of the Code), April 1 of the calendar
year following the calendar year in which the Participant attains age
70 1/2 and (B) with respect to any other Participant, April 1 of the
calendar year following the calendar year in which the Participant
terminates employment with all Employers and Affiliates. Distributions
made under this paragraph shall be made in accordance with Section
9.3(d).
(c) Form of Distribution. Any distribution to which a
Participant (or in the event of the Participant's death, his or her Beneficiary)
becomes entitled upon the Participant's
41
termination of employment shall be distributed by the Trustee by whichever of
the following methods the Participant (or Beneficiary) elects:
(i) an amount not greater than the vested balance of the
Participant's Account, provided, however, that only one such payment
may be made in any single month;
(ii) substantially equal periodic installment payments,
payable not less frequently than annually and not more frequently than
monthly, over a period to be elected by the Participant (or
Beneficiary); or
(iii) a combination of (i) and (ii).
A Participant (or Beneficiary) may change his or her election with respect to
the form of distribution at any time before or after distribution of benefits
commences.
(d) Required Minimum Distributions. Notwithstanding any
provision of the Plan to the contrary, 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. This Section 9.3(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) or such other date as may be specified in
guidance published by the Internal Revenue Service.
Section 9.4. Payment of Small Account Balances.
Notwithstanding any provision of Section 9.3 to the contrary and subject to
Section 9.6, if a Participant's vested Account to be distributed upon the
Participant's termination of employment does not exceed $5,000 (or such other
amount prescribed by section 411(a)(11) of the Code), then such amount shall be
distributed as soon as practicable after the Participant's termination of
employment in the form of a lump sum payment to the Participant or his or her
Beneficiary, as the case may be.
42
Section 9.5. Medium and Order of Withdrawal or Distribution.
(a) Medium of Withdrawal or Distribution. All withdrawals and distributions
under the Plan shall be made in cash; provided, however, that other than with
respect to withdrawals pursuant to Sections 9.1(a) and (b), a Participant or
Beneficiary may elect, in accordance with procedures established by the
Administrative Committee, to receive the portion of his or her Account, if any,
that is invested in the Harris Stock Fund in shares of Harris Stock (with
fractional shares and de minimis amounts, as determined by the Administrative
Committee, distributed in cash). If a Participant or Beneficiary has elected to
receive a withdrawal or distribution of any portion of his or her Account that
is invested in the Harris Stock Fund in shares of Harris Stock, then such
distribution shall, in the discretion of the Administrative Committee, either be
made in certificated form or credited to an account established for the
Participant under a plan maintained by an Affiliate.
(a) Order of Withdrawal or Distribution. To the extent not
otherwise set forth in Section 9.1, any withdrawal pursuant to Section 9.1 and
any distribution pursuant to Section 9.3 shall be charged against a
Participant's subaccounts in the order determined by the Administrative
Committee; provided, however, that in order to maximize the tax benefits
associated with participation in the Plan, any such withdrawal or distribution
first shall be charged against the Participant's After-Tax Account. In the case
of a withdrawal made pursuant to Section 9.1, reduction of amounts invested in
the Harris Stock Fund shall be subject to the satisfaction of the Holding Period
prescribed in Section 8.2(c).
Section 9.6. Direct Rollover Option. In the case of a
distribution that is an "eligible rollover distribution" within the meaning of
section 402(c)(4) of the Code, a Participant, a Beneficiary who is a surviving
spouse of a Participant, or a spouse or former
43
spouse who is an alternate payee under a qualified domestic relations order, as
defined in section 414(p) of the Code, may elect that all or any portion of such
distribution to which he or she is entitled shall be directly transferred from
the Plan to (i) an individual retirement account or annuity described in section
408(a) or (b) of the Code, or (ii) if the terms of which permit the acceptance
of eligible rollover distributions, to another retirement plan qualified under
section 401(a) of the Code, to a qualified annuity plan described in section
403(a) of the Code, to an annuity contract described in section 403(b) of the
Code or to an eligible plan under section 457(b) of the Code which is maintained
by a state, political subdivision of a state, or any agency or instrumentality
of a state or political subdivision of a state and which agrees to account
separately for amounts transferred into such plan from this Plan.
Notwithstanding the foregoing, any portion of an eligible rollover distribution
that consists of after-tax contributions which are not includible in gross
income may be transferred only to an individual retirement account or annuity
described in section 408(a) or (b) of the Code or to a qualified defined
contribution plan described in section 401(a) or 403(a) of the Code that agrees
to account separately for amounts so transferred.
Section 9.7. Designation of Beneficiary. (a) In General. Each
Participant shall have the right to designate a Beneficiary or Beneficiaries
(who may be designated contingently or successively and that may be an entity
other than a natural person) to receive any distribution to be made under this
Article upon the death of such Participant or, in the case of a Participant who
dies after his or her termination of employment but prior to the distribution of
the entire amount to which he or she is entitled under the Plan, any
undistributed balance to which such Participant would have been entitled. No
such designation of a Beneficiary other than a Participant's spouse shall be
effective if the Participant was married through the one-year period
44
ending on the date of his or her death unless such designation was consented to
in writing (or by such other method permitted by the Internal Revenue Service)
at the time of such designation by the person who was the Participant's spouse
during such period, acknowledging the effect of such consent and witnessed by a
notary public or, prior to October 1, 1993, a Plan representative, or it is
established to the satisfaction of the Administrative Committee that such
consent could not be obtained because the Participant's spouse could not be
located or because of the existence of other circumstances as the Secretary of
the Treasury may prescribe as excusing the requirement of such consent. Subject
to the immediately preceding sentence, a Participant may from time to time,
without the consent of any Beneficiary, change or cancel any such designation.
Such designation and each change thereof shall be made in the manner prescribed
by the Administrative Committee and shall be filed with the Administrative
Committee. If (i) no Beneficiary has been named by a deceased Participant, (ii)
a Beneficiary designation is not effective pursuant to the second sentence of
this section, or (iii) the designated Beneficiary has predeceased the
Participant, any undistributed Account of the deceased Participant shall be
distributed by the Trustee (a) to the surviving spouse of such deceased
Participant, if any, (b) if there is no surviving spouse, to the then living
descendants, if any, of the deceased Participant, per stirpes, or (c) if there
is no surviving spouse and there are no living descendants, to the executor or
administrator of the estate of such deceased Participant.
(b) Successor Beneficiaries. A Beneficiary who has been
designated in accordance with Section 9.7(a) may name a successor beneficiary or
beneficiaries in the manner prescribed by the Administrative Committee. If a
Beneficiary dies after the Participant and before distribution of the entire
amount of the Participant's benefit under the Plan in which the Beneficiary has
an interest, then any remaining amount shall be distributed, as soon as
45
practicable after the death of such Beneficiary, in the form of a lump sum
payment to the successor beneficiary or beneficiaries or, if there is no such
successor beneficiary, to the executor or administrator of the estate of such
deceased Beneficiary.
Section 9.8. Missing Persons. If following the date on which
pursuant to Section 9.3(b) or 9.4 a Participant's Account may be distributed
without the Participant's consent, the Administrative Committee in the exercise
of reasonable diligence has been unable to locate the person or persons entitled
to the Participant's Account, then the Participant's Account shall be forfeited;
provided, however, that to the extent required by law the Plan shall reinstate
and pay to such person or persons the amount so forfeited upon a claim for such
amount made by such person or persons. The amount to be so reinstated shall be
obtained from the total amount that shall have been forfeited pursuant to this
Section and Section 9.2(b) during the Plan Year that the claim for such
forfeited benefit is made, and shall not include any earnings or losses from the
date of the forfeiture under this Section. If the amount to be reinstated
exceeds the amount of such forfeitures, the Employer in respect of whose
Eligible Employee the claim for forfeited benefit is made shall make a
contribution in an amount equal to such excess. To the extent the forfeitures
under this Section exceed any claims for forfeited benefits made pursuant to
this Section, such excess shall be utilized first to restore the Accounts as
described in Section 11.2(b) of Participants who are reemployed by the Employer
in respect of whose Eligible Employee experienced the forfeiture hereunder and
next to reduce future contributions to the Plan by such Employer.
Section 9.9. Distributions to Minor and Disabled Distributees.
Any distribution that is payable to a distributee who is a minor or to a
distributee who has been legally determined to be unable to manage his or her
affairs by reason of illness or mental incompetency may be
46
made to, or for the benefit of, any such distributee at such time consistent
with the provisions of this Plan and in such of the following ways as the legal
representative of such distributee shall direct: (a) directly to any such minor
distributee if, in the opinion of such legal representative, he or she is able
to manage his or her affairs, (b) to such legal representative, (c) to a
custodian under a Uniform Gifts to Minors Act for any such minor distributee, or
(d) as otherwise directed by such legal representative. Neither the
Administrative Committee nor the Trustee shall be required to oversee the
application by any third party other than the legal representative of a
distributee of any distribution made to or for the benefit of such distributee
pursuant to this Section.
Section 9.10. Payment of Group Insurance Premiums. The
Administrative Committee may, in its sole discretion, permit a Participant who
(i) is eligible to be included in any contributory group insurance program
maintained or sponsored by an Employer, (ii) elects to be covered under such
contributory group insurance program and (iii) is receiving benefits under the
Plan in monthly installments to direct that a specified portion of the
installment payments be withheld and paid by the Trustee on the Participant's
behalf to the Employer as the Participant's contribution under such contributory
group insurance program. Such direction by a Participant, if permitted by the
Administrative Committee, shall be made at the time and in the manner prescribed
by the Administrative Committee. Any such direction may be revoked by a
Participant upon at least 15 days' prior written notice to the Administrative
Committee. Any withholding and payment of insurance costs on behalf of a
Participant shall be made in accordance with Treasury Regulation section
1.401(a)-13.
47
ARTICLE 10
LOANS
Section 10.1. Making of Loans. Subject to the provisions of
this Article 10, the Administrative Committee shall establish a loan program
whereby any Participant who is an Employee may request, by such method
prescribed by the Administrative Committee, to borrow funds from the
Participant's Pre-Tax Account, After-Tax Account and Rollover Account, and which
loan program hereby is incorporated into this Plan by reference. The principal
balance of such loan, when aggregated with the outstanding balances of all other
loans of the Participant from plans maintained by the Employers and Affiliates,
shall not exceed the least of:
(a) $50,000, reduced by the excess, if any, of (x) the highest
outstanding loan balance of the Participant under all plans maintained by the
Employers and Affiliates during the period beginning one year and one day prior
to the date on which such loan is made and ending on the day prior to the date
on which such loan is made, over (y) the outstanding loan balance from all such
plans on the date on which such loan is made;
(b) fifty percent (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
(c) the aggregate value of the Participant's Pre-Tax Account,
After-Tax Account and Rollover Account as of the Valuation Date coinciding with
or immediately preceding the date on which the loan is made.
Section 10.2. Restrictions. An application for a loan shall be
made at the time and in the manner prescribed by the Administrative Committee.
The action of the Administrative Committee or its delegate in approving or
disapproving a request for a loan shall
48
be final. Any loan under the Plan shall be subject to the terms, conditions and
restrictions set forth in the loan program established by the Administrative
Committee.
Section 10.3. Default. If any loan or portion of a loan made
to a Participant under the Plan, together with the accrued interest thereon, is
in default, the Trustee, upon direction from the Administrative Committee, shall
take appropriate steps to collect the outstanding balance of the loan and to
foreclose on the security; provided, however, that the Trustee shall not levy
against any portion of the Participant's Account until such time as a
distribution from such Account otherwise could be made under the Plan. Default
shall occur (i) if the Participant fails to make any scheduled loan payment when
due or within 90 days thereafter (or within such other grace period as permitted
under applicable law and by the Administrative Committee) or (ii) upon the
occurrence of any other event that is considered a default event under the loan
program established by the Administrative Committee. On the date a Participant
is entitled to receive a distribution of his or her Account pursuant to Article
9, any defaulted loan or portion thereof, together with the accrued interest
thereon, shall be charged to the Participant's Account after all other
adjustments required under the Plan, but before any distribution pursuant to
Article 9.
Section 10.4. Applicability. Notwithstanding the foregoing,
for purposes of this Article 10, any Participant or Beneficiary who is a "party
in interest" as defined in section 3(14) of ERISA may apply for a loan from the
Plan, regardless of such Participant's or Beneficiary's employment status. As a
condition of receiving a loan from the Plan, such a Participant or Beneficiary
who is not an Employee shall consent to have such loan repaid in substantially
equal installments at the times and in the manner determined by the
Administrative Committee, but not less frequently than quarterly.
49
ARTICLE 11
SPECIAL PARTICIPATION AND DISTRIBUTION RULES
Section 11.1. Change of Employment Status. If an Employee who
is not an Eligible Employee becomes an Eligible Employee, then the Employee
shall become a Participant (i) as of the date such Employee becomes an Eligible
Employee, if such Employee has satisfied the service requirement set forth in
Section 3.1, or (ii) as of the date such Employee satisfies the service
requirement set forth in Section 3.1.
Section 11.2. Reemployment of a Terminated Participant. (a)
Participation. If a terminated Participant is reemployed as an Eligible
Employee, then the terminated Participant again shall become a Participant as of
the date of the terminated Participant's reemployment. If a terminated
Participant is receiving installment payments pursuant to Section 9.3(c), such
payments shall be suspended upon such terminated Participant's reemployment
unless such Participant has attained age 59 1/2 on or before the date of such
reemployment.
(b) Restoration of Forfeitures. If a terminated Participant is
reemployed prior to incurring a Break in Service of five consecutive years, and,
at or after the Participant's termination of employment, any portion of the
Participant's Account was forfeited pursuant to Section 9.2(b), then an amount
equal to the portion of the Participant's Account that was forfeited shall be
credited to the Participant's Account as soon as administratively practicable
after the Participant is reemployed. Any amount to be restored pursuant to this
subsection shall be obtained from the total amounts that have been forfeited
pursuant to Sections 9.2(b) and 9.8 during the Plan Year in which such
Participant is reemployed from the Accounts of Participants employed by the same
Employer as the reemployed Participant. If the aggregate amount to be so
restored to the Accounts of Participants who are Employees of a particular
Employer exceeds the
50
amount of such forfeitures, such Employer shall make a contribution in an amount
equal to such excess. Any such contribution shall be made without regard to
whether or not the limitations set forth in Article 6 will be exceeded by such
contribution.
Section 11.3. Employment by Affiliates. If an individual is
employed by an Affiliate that is not an Employer, then any period of such
employment shall be taken into account under the Plan solely for the purposes of
(i) measuring such individual's Service and (ii) determining when such
individual has terminated his or her employment for purposes of Article 9, to
the same extent it would have been had such period of employment been as an
Employee.
Section 11.4. Leased Employees. If an individual who performed
services as a leased employee (within the meaning of section 414(n)(2) of the
Code) of an Employer or an Affiliate becomes an Employee, or if an Employee
becomes such a leased employee, then any period during which such services were
so performed shall be taken into account under the Plan solely for the purposes
of (i) measuring such individual's Service and (ii) determining when such
individual has terminated his or her employment for purposes of Article 9, to
the same extent it would have been had such period of service been as an
Employee. This Section shall not apply to any period of service during which
such a leased employee was covered by a plan described in section 414(n)(5) of
the Code.
Section 11.5. Reemployment of Veterans. The provisions of this
Section shall apply in the case of the reemployment by an Employer of an
Eligible Employee, within the period prescribed by USERRA, after the Eligible
Employee's completion of a period of Qualified Military Service. The provisions
of this Section are intended to provide such Eligible
51
Employee with the rights required by USERRA and section 414(u) of the Code, and
shall be interpreted in accordance with such intent.
(a) Make-Up of Pre-Tax and After-Tax Contributions. Such
Eligible Employee shall be entitled to make contributions under the Plan
("make-up participant contributions"), in addition to any pre-tax and after-tax
contributions which the Eligible Employee elects to have made under the Plan
pursuant to Sections 4.1 and 5.1. From time to time while employed by an
Employer, such Eligible Employee may elect to contribute such make-up
participant contributions during the period beginning on the date of such
Eligible Employee's reemployment and ending on the earlier of:
(i) the end of the period equal to the product of three and
such Eligible Employee's period of Qualified Military Service, and
(ii) the fifth anniversary of the date of such reemployment.
Such Eligible Employee shall not be permitted to contribute make-up participant
contributions to the Plan in excess of the amount which the Eligible Employee
could have elected to have made under the Plan in the form of pre-tax and
after-tax contributions if the Eligible Employee had continued in active
employment with his or her Employer during such period of Qualified Military
Service. The manner in which an Eligible Employee may elect to contribute
make-up participant contributions pursuant to this subsection (a) shall be
prescribed by the Administrative Committee.
(b) Make-Up of Matching Contributions. An Eligible Employee
who contributes make-up participant contributions as described in subsection (a)
of this Section shall be entitled to an allocation of matching contributions to
his or her Account in an amount equal to the amount of matching contributions
that would have been allocated to the Account of such Eligible Employee during
the period of Qualified Military Service if such make-up participant
52
contributions had been made in the form of pre-tax and after-tax contributions
during such period. The Eligible Employee's Employer shall make a special
contribution to the Plan which shall be utilized solely for purposes of such
allocation.
(c) Make-Up of Profit Sharing Contributions. Upon the timely
reemployment of an Eligible Employee following the completion of a period of
Qualified Military Service, such Eligible Employee shall be entitled to an
allocation of profit sharing contributions to his or her Account in an amount
equal to the difference between (i) the amount of profit sharing contributions
that would have been allocated to the Account of such Eligible Employee during
the period of Qualified Military Service if the Eligible Employee had continued
in active employment with his or her Employer during such period and (ii) the
amount of profit sharing contributions that was allocated to the Account of such
Eligible Employee during the period of Qualified Military Service pursuant to
Section 8.6. The Eligible Employee's Employer shall make a special contribution
to the Plan which shall be utilized solely for purposes of such allocation.
(d) Miscellaneous Rules Regarding Make-Up Contributions. For
purposes of determining the amount of contributions to be made under this
Section, an Eligible Employee's "Compensation" during any period of Qualified
Military Service shall be determined in accordance with section 414(u) of the
Code. Any contributions made by an Eligible Employee or an Employer pursuant to
this Section on account of a period of Qualified Military Service in a prior
Plan Year shall not be subject to the limitations prescribed by Sections 6.1,
6.3 and 6.4 of the Plan (relating to sections 402(g), 415, and 404 of the Code)
for the Plan Year in which such contributions are made. The Plan shall not be
treated as failing to satisfy the nondiscrimination rules of Section 6.2 of the
Plan (relating to sections 401(k)(3) and 401(m) of the Code) for any
53
Plan Year solely on account of any make-up contributions made by an Eligible
Employee or an Employer pursuant to this Section.
ARTICLE 12
SHAREHOLDER RIGHTS WITH RESPECT TO HARRIS STOCK
Section 12.1. Voting Shares of Harris Stock. Each Participant
(or Beneficiary) may submit non-binding voting instructions, at such time and in
such manner as may be prescribed by the Trustee, with respect to the number of
shares of Harris Stock represented by the participating units in the Harris
Stock Fund then allocated to his or her Account. The Trustee shall vote, in
person or by proxy, the shares of Harris Stock held by the Trustee in the Harris
Stock Fund in its sole discretion.
Written notice of any meeting of shareholders of the Company
and a request for non-binding voting instructions shall be given by the Trustee,
at such time and in such manner as the Trustee shall determine, to each
Participant (or Beneficiary) with amounts invested in the Harris Stock Fund. The
Administrative Committee shall establish, and the Company shall pay for, a means
by which such non-binding voting instructions expeditiously can be delivered to
the Trustee. The Administrative Committee at its election may engage an agent to
receive such instructions and transmit them to the Trustee. All such individual
instructions shall be confidential and shall not be disclosed to any person,
including any Employer.
Section 12.2. Tender Offers. (a) Rights of Participants. In
the event a tender offer is made generally to the shareholders of the Company to
transfer all or a portion of their shares of Harris Stock in return for valuable
consideration, including, but not limited to, offers regulated by section 14(d)
of the Securities Exchange Act of 1934, as amended, the Trustee shall
54
respond to such tender offer in respect of shares of Harris Stock held by the
Trustee in the Harris Stock Fund in accordance with instructions obtained from
Participants (or Beneficiaries). Each Participant (or Beneficiary) shall be
entitled to instruct the Trustee regarding how to respond to any such tender
offer with respect to the number of shares of Harris Stock represented by the
participating units in the Harris Stock Fund then allocated to his or her
Account. Each Participant (or Beneficiary) who does not provide timely
instructions to the Trustee shall be presumed to have directed the Trustee not
to tender shares of Harris Stock represented by the participating units then
allocated to his or her Account. A Participant (or Beneficiary) shall not be
limited in the number of instructions to tender or withdraw from tender which he
or she can give, but a Participant (or Beneficiary) shall not have the right to
give instructions to tender or withdraw from tender after a reasonable time
established by the Trustee pursuant to subsection (c) of this Section. For
purposes of this Section, the shares of Harris Stock held in the Harris Stock
Fund shall be treated as allocated to the accounts of Participants in proportion
to their respective participating units in the Harris Stock Fund as of the
immediately preceding record date for ownership of Harris Stock for stockholders
entitled to tender. The Administrative Committee may direct the Trustee to make
a special valuation of the Harris Stock Fund in connection with such tender
offer.
(b) Duties of the Administrative Committee. Within a
reasonable time after the commencement of a tender offer, the Administrative
Committee shall cause the Trustee to provide to each Participant or Beneficiary,
as the case may be:
(i) the offer to purchase as distributed by the offeror to the
shareholders of the Company;
(ii) a statement of the number of shares of Harris Stock
represented by the participating units in the Harris Stock Fund
allocated to his or her Account; and
55
(iii) directions as to the means by which instructions with
respect to the tender offer can be given.
The Administrative Committee shall establish, and the Company
shall pay for, a means by which instructions with respect to a tender offer
expeditiously can be delivered to the Trustee. The Administrative Committee at
its election may engage an agent to receive such instructions and transmit them
to the Trustee. All such individual instructions shall be confidential and shall
not be disclosed to any person, including any Employer.
For purposes of allocating the proceeds of any sale or
exchange pursuant to a tender offer, the Trustee shall then treat as having been
sold or exchanged from each of the Accounts of Participants (and Beneficiaries)
who provided timely directions to the Trustee under this Section to tender that
number of shares of Harris Stock represented by participating units in the
Harris Stock Fund (if any) subject to such directions and the proceeds of such
sale or exchange shall be allocated accordingly. Any proceeds from the sale or
exchange of shares of Harris Stock in the Harris Stock Fund shall be invested in
a commingled fund maintained by the Trustee designated to hold such amounts
pending investment instructions from the Participants (and Beneficiaries) or the
Administrative Committee, as the case may be.
(c) Duties of the Trustee. The Trustee shall follow the
instructions of the Participants (and Beneficiaries) with respect to the tender
offer as transmitted to the Trustee. The Trustee may establish a reasonable
time, taking into account the time restrictions of the tender offer, after which
it shall not accept instructions of Participants (or Beneficiaries).
56
ARTICLE 13
ADMINISTRATION
Section 13.1. The Administrative Committee. (a) The Chief
Executive Officer of the Company shall appoint at least two members to the
Administrative Committee, unless a committee of the Board is empowered to
appoint members to the Administrative Committee. The Administrative Committee
shall be the "administrator" of the Plan within the meaning of such term as used
in ERISA and shall be responsible for the administration of the Plan. The Chief
Executive Officer of the Company, or such Board committee, as the case may be,
shall have the right at any time, with or without cause, to remove any member of
the Administrative Committee. In addition, any member of the Administrative
Committee at any time may resign by giving at least fifteen (15) days' advance
written notice to the Chief Executive Officer or such Board committee (or such
shorter period of advance written notice acceptable to the Chief Executive
Officer or such Board committee). An Employee who serves on the Administrative
Committee shall be deemed to have resigned from such committee upon the
termination of the Employee's employment with the Company and its Affiliates,
effective as of the date of the termination of employment. Upon the removal or
resignation of any member of the Administrative Committee, or the failure or
inability for any reason of any member of the Administrative Committee to act
hereunder, the Chief Executive Officer of the Company or such Board committee,
as the case may be, shall appoint a successor member of the Administrative
Committee if such removal, resignation, failure or inability causes the
Administrative Committee to have fewer than two members. Any successor member of
the Administrative Committee shall have all the rights, privileges and duties of
the predecessor, but shall not be held accountable for the acts of the
predecessor.
57
(b) Any member of the Administrative Committee may, but need
not, be an employee, director, officer or shareholder of an Employer and such
status shall not disqualify him or her from taking any action hereunder or
render him or her accountable for any distribution or other material advantage
received by such member under the Plan, provided that no member of the
Administrative Committee who is a Participant shall take part in any action of
the Administrative Committee or any matter involving solely his or her rights
under the Plan.
(c) Promptly after the appointment of the members of the
Administrative Committee and promptly after the appointment of any successor
member of the Administrative Committee, the Trustee shall be notified in writing
as to the names of the new members.
(d) The Administrative Committee shall have the duty and
authority to interpret and construe, in its sole discretion, the terms of the
Plan in all respects, including, but not limited to, all questions of
eligibility, the status and rights of Participants, distributees and other
persons under the Plan, and the manner, time and amount of payment of any
distribution under the Plan. Each Employer shall, from time to time, upon
request of the Administrative Committee, furnish to the Administrative Committee
such data and information as the Administrative Committee shall require in the
performance of its duties. All determinations and actions of the Administrative
Committee shall be conclusive and binding upon all affected parties, except that
the Administrative Committee may revoke or modify a determination or action that
it determines to have been in error. Benefits will be paid under the Plan only
if the Administrative Committee decides in its sole discretion that the
applicant is entitled to the benefits.
(e) The Administrative Committee shall direct the Trustee to
make payments of amounts to be distributed from the Trust under Article 9.
58
(f) The Administrative Committee may act at a meeting by the
vote of a majority of its members or without a meeting by the unanimous written
consent of its members. The Administrative Committee shall keep records of all
of its meetings and forward all necessary communications to the Trustee. The
Administrative Committee may adopt such rules and procedures as it deems
desirable for the conduct of its affairs and the administration of the Plan,
provided that any such rules and procedures shall be consistent with the
provisions of the Plan and ERISA.
(g) The members of the Administrative Committee shall
discharge their duties with respect to the Plan (i) solely in the interest of
the Participants and Beneficiaries, (ii) for the exclusive purpose of providing
benefits to the Participants and Beneficiaries and of defraying reasonable
expenses of administering the Plan and (iii) with the care, skill, prudence, and
diligence under the circumstances then prevailing that a prudent person acting
in a like capacity and familiar with such matters would use in the conduct of an
enterprise of a like character and with like aims. The Employers hereby jointly
and severally indemnify the members of the Administrative Committee, the members
of the Compensation Committee and the members of the Investment Committee from
the effects and consequences of their acts, omissions and conduct in their
official capacity, except to the extent that such effects and consequences
result from their own willful or gross misconduct or criminal acts.
(h) The members of the Administrative Committee shall not
receive any compensation or fee for services as members of the Administrative
Committee. The Employers shall reimburse the members of each of the
Administrative Committee, Compensation Committee and Investment Committee for
any necessary expenditures incurred in the discharge of their duties hereunder.
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Section 13.2. Named Fiduciaries. The Investment Committee
shall be a "named fiduciary" of the Plan within the meaning of such term as used
in ERISA solely with respect to its power to appoint certain fiduciaries under
the Plan and its management of the assets of the Plan. The Administrative
Committee shall be a "named fiduciary" of the Plan within the meaning of such
term as used in ERISA solely with respect to its power to appoint certain
fiduciaries under the Plan and the exercise of its administrative duties set
forth in the Plan that are fiduciary acts. The Compensation Committee shall be a
"named fiduciary" of the Plan within the meaning of such term as used in ERISA
solely with respect to its power to appoint certain fiduciaries under the Plan.
Each fiduciary has only those duties and responsibilities specifically assigned
to such fiduciary under the Plan.
Section 13.3. Allocation and Delegation of Responsibilities.
Each of the Administrative Committee, the Compensation Committee and the
Investment Committee may allocate its responsibilities among its members and may
designate any person, partnership, corporation or another committee to carry out
any of its responsibilities with respect to the Plan. Any such allocation or
designation shall be in writing and shall be kept with the records of the Plan.
Section 13.4. Professional and Other Services. The Company may
employ counsel (who may be counsel for an Employer) to advise the Administrative
Committee, the Compensation Committee and the Investment Committee and their
agents and may arrange for clerical and other services as the Administrative
Committee, the Compensation Committee and the Investment Committee and their
agents may require in carrying out their duties hereunder.
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Section 13.5. Claims Procedure. If any Participant or
distributee believes he or she is entitled to benefits in an amount greater than
those which he or she is receiving or has received, he or she (or his or her
duly authorized representative) may file a claim with the Administrative
Committee. Such a claim shall be in writing and state the nature of the claim,
the facts supporting the claim, the amount claimed and the address of the
claimant. The Administrative Committee shall review the claim and, unless
special circumstances require an extension of time, within 90 days after receipt
of the claim give written or electronic notice to the claimant of its decision
with respect to the claim. If special circumstances require an extension of
time, the claimant shall be so advised in writing or by electronic means within
the initial 90-day period and in no event shall such an extension exceed 90
days. The notice of the decision of the Administrative Committee with respect to
the claim shall be written in a manner calculated to be understood by the
claimant and, if the claim is wholly or partially denied, shall set forth the
specific reasons for the denial, specific references to the pertinent Plan
provisions on which the denial is based, a description of any additional
material or information necessary for the claimant to perfect the claim and an
explanation of why such material or information is necessary, and an explanation
of the claim review procedure under the Plan and the time limits applicable to
such procedure (including a statement of the claimant's right to bring a civil
action under section 502(a) of ERISA following the final denial of a claim).
The claimant (or his or her duly authorized representative)
may request a review of the denial by filing with the Administrative Committee a
written request for such review within 60 days after notice of the denial has
been received by the claimant. Within the same 60-day period, the claimant may
submit to the Administrative Committee written comments, documents, records and
other information relating to the claim. Upon request and free of charge,
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the claimant also may have reasonable access to, and copies of, documents,
records and other information relevant to the claim. If a request for review is
so filed, review of the denial shall be made by the Administrative Committee and
the claimant shall be given written or electronic notice of the Administrative
Committee's final decision within, unless special circumstances require an
extension of time, 60 days after receipt of such request. If special
circumstances require an extension of time, the claimant shall be so advised in
writing or by electronic means within the initial 60-day period and in no event
shall such an extension exceed 60 days. If the appeal of the claim is wholly or
partially denied, the notice of the Administrative Committee's final decision
shall include specific reasons for the denial, specific references to the
pertinent Plan provisions on which the denial is based and a statement that the
claimant is entitled, upon request and free of charge, to reasonable access to,
and copies of, all relevant documents, records and information. The notice shall
be written in a manner calculated to be understood by the claimant and shall
notify the claimant of his or her right to bring a civil action under section
502(a) of ERISA.
In making determinations regarding claims for benefits, the
Administrative Committee shall consider all of the relevant facts and
circumstances, including, without limitation, governing plan documents,
consistent application of Plan provisions with respect to similarly situated
claimants and any comments, documents, records and other information with
respect to the claim submitted by the claimant (the "Claimant's Submissions").
The Claimant's Submissions shall be considered by the Administrative Committee
without regard to whether the Claimant's Submissions were submitted or
considered by the Administrative Committee in the initial benefit determination.
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Section 13.6. Notices to Participants. All notices, reports
and statements given, made, delivered or transmitted to a Participant or
distributee or any other person entitled to or claiming benefits under the Plan
shall be deemed to have been duly given, made, delivered or transmitted when
provided via such written or other means as may be permitted by applicable
Regulations. A Participant, distributee or other person may record any change of
his or her address by written notice filed with his or her Employer.
Section 13.7. Notices to Administrative Committee or
Employers. Written directions and notices and other written or electronic
communications from Participants, distributees or other persons entitled to or
claiming benefits under the Plan to the Administrative Committee or the
Employers shall be deemed to have been duly given, made, delivered or
transmitted when given, made, delivered or transmitted in the manner and to the
location prescribed by the Administrative Committee or the Employers for the
giving of such directions, notices and other communications.
Section 13.8. Records. The Administrative Committee shall keep
a record of all of its proceedings with respect to the Plan and shall keep or
cause to be kept all books of account, records and other data as may be
necessary or advisable in its judgment for the administration of the Plan.
Section 13.9. Reports of Trustee and Accounting to
Participants. The Administrative Committee shall keep on file, in such form as
it shall deem convenient and proper, all reports concerning the Trust Fund
received by it from the Trustee, and, as soon as practicable after the close of
each Plan Year, each Participant and Beneficiary shall be provided a written
benefit statement indicating the balance credited to any Account for such
individual as of
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the close of such Plan Year. Any Participant or Beneficiary claiming that an
error has been made with respect to such balance shall notify the Administrative
Committee in writing within ninety (90) days following the delivery of such
benefit statement. If no notice of error timely is provided, the benefit
statement shall be presumed to be correct.
ARTICLE 14
PARTICIPATION BY EMPLOYERS
Section 14.1. Adoption of Plan. With the consent of the
Compensation Committee, any entity may become an Employer under the Plan by (a)
taking such action as shall be necessary to adopt the Plan and (b) executing and
delivering such instruments and taking such other action as may be necessary or
desirable to put the Plan and Trust into effect with respect to such entity, as
prescribed by the Compensation Committee. The powers and control of the Company,
as provided in the Plan and the trust agreement, shall not be diminished by
reason of participation of any such adopting entity in the Plan.
Section 14.2. Withdrawal from Participation. An Employer may
withdraw from participation in the Plan at any time by filing with the
Compensation Committee a duly certified copy of a written instrument duly
adopted by the Employer to that effect and giving notice of its intended
withdrawal to the Compensation Committee, the Employers and the Trustee prior to
the effective date of withdrawal.
Section 14.3. Company, Administrative Committee, Compensation
Committee and Investment Committee as Agents for Employers. Each entity which
becomes an Employer pursuant to Section 14.1 or Section 14.4 by so doing shall
be deemed to have appointed the Company, the Administrative Committee, the
Compensation Committee and the Investment
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Committee as its agents to exercise on its behalf all of the powers and
authorities conferred upon the Company, the Administrative Committee, the
Compensation Committee and the Investment Committee by the terms of the Plan.
The authority of the Company, the Administrative Committee, the Compensation
Committee or the Investment Committee to act as such agent shall continue unless
and until the portion of the Trust Fund held for the benefit of Employees of the
particular Employer and their Beneficiaries is set aside in a separate Trust
Fund as provided in Section 17.2.
Section 14.4. Continuance by a Successor. In the event that an
Employer other than the Company is reorganized by way of merger, consolidation,
transfer of assets or otherwise, so that another entity other than an Employer
succeeds to all or substantially all of such Employer's business, such successor
entity may, with the consent of the Compensation Committee, be substituted for
such Employer under the Plan by adopting the Plan. Contributions by such
Employer automatically shall be suspended from the effective date of any such
reorganization until the date upon which the substitution of such successor
entity for the Employer under the Plan becomes effective. If, within 90 days
following the effective date of any such reorganization, such successor entity
shall not have elected to adopt the Plan, the Compensation Committee fails to
consent to such adoption, or an Employer adopts a plan of complete liquidation
other than in connection with a reorganization, the Plan automatically shall be
terminated with respect to employees of such Employer as of the close of
business on the 90th day following the effective date of such reorganization or
as of the close of business on the date of adoption of such plan of complete
liquidation, as the case may be, and the Administrative Committee shall direct
the Trustee to distribute the portion of the Trust Fund applicable to such
Employer in the manner provided in Section 17.3.
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If such successor entity is substituted for an Employer as
described above, then, for all purposes of the Plan, employment of each Employee
with such Employer, including service with and compensation paid by such
Employer, shall be considered to be employment with such successor entity.
ARTICLE 15
MISCELLANEOUS
Section 15.1. Expenses. All costs and expenses of
administering the Plan and the Trust, including the expenses of the Company, the
Administrative Committee, the Compensation Committee and the Investment
Committee, the fees of counsel and of any agents for the Company or such
committees, investment advisory and recordkeeping fees, the fees and expenses of
the Trustee, the fees of counsel for the Trustee and other administrative
expenses, shall be paid under the direction of the Administrative Committee from
the Trust Fund to the extent such expenses are not paid by the Employers. The
Administrative Committee, in its sole discretion, having regard to the nature of
a particular expense, shall determine the portion of such expense that is to be
borne by each Employer. An Employer may seek reimbursement of any expense paid
by such Employer that the Administrative Committee determines is properly
payable from the Trust Fund.
Section 15.2. Non-Assignability.
(a) In General. No right or interest of any Participant or
Beneficiary in the Plan shall be assignable or transferable in whole or in part,
either directly or by operation of law or otherwise, including, but not by way
of limitation, execution, levy, garnishment, attachment, pledge or bankruptcy,
but excluding devolution by death or mental incompetency, and any
66
attempt to do so shall be void, and no right or interest of any Participant or
Beneficiary in the Plan shall be liable for, or subject to, any obligation or
liability of such Participant or Beneficiary, including claims for alimony or
the support of any spouse, except as provided below.
(b) Exception for Qualified Domestic Relations Orders.
Notwithstanding any provision of the Plan to the contrary, if a Participant's
Account under the Plan, or any portion thereof, is the subject of one or more
qualified domestic relations orders (as defined in section 414(p) of the Code),
such Account or portion thereof shall be paid to the person, at the time and in
the manner specified in any such order. The Administrative Committee shall adopt
rules and procedures, in accordance with section 414(p) of the Code, relating to
its (i) review of any domestic relations order for purposes of determining
whether the order is a qualified domestic relations order and (ii)
administration of a qualified domestic relations order. A domestic relations
order shall not fail to constitute a qualified domestic relations order solely
because such order provides for distribution to an alternate payee of the
benefit assigned to the alternate payee under the Plan prior to the applicable
Participant's earliest retirement age (as defined in section 414(p) of the Code)
under the Plan.
(c) Other Exception. Notwithstanding any provision of the Plan
to the contrary, if a Participant is ordered or required to pay an amount to the
Plan pursuant to (i) a judgement in a criminal action, (ii) a civil judgement in
connection with a violation (or alleged violation) of Part 4 of Subtitle B of
Title I of ERISA or (iii) a settlement agreement between the Secretary of Labor
and the Participant or the Pension Benefit Guaranty Corporation and the
Participant in connection with a violation (or alleged violation) of Part 4 of
Subtitle B of Title I of ERISA, the
67
Participant's Account under the Plan may, to the extent permitted by law, be
offset by such amount.
Section 15.3. Employment Non-Contractual. The Plan confers no
right upon an Employee to continue in employment.
Section 15.4. Merger or Consolidation with Another Plan. A
merger or consolidation with, or transfer of assets or liabilities to, any other
plan shall not be effected unless the terms of such merger, consolidation or
transfer are such that each Participant, distributee, Beneficiary or other
person entitled to receive benefits from the Plan would, if the Plan were to
terminate immediately after the merger, consolidation or transfer, receive a
benefit equal to or greater than the benefit such person would be entitled to
receive if the Plan were to terminate immediately before the merger,
consolidation, or transfer.
Section 15.5. Gender and Plurals. Wherever used in the Plan,
words in the masculine gender shall include the masculine or feminine gender,
and, unless the context otherwise requires, words in the singular shall include
the plural, and words in the plural shall include the singular.
Section 15.6. Applicable Law. The Plan and all rights
hereunder shall be governed by and construed in accordance with the laws of the
State of Florida to the extent such laws have not been preempted by applicable
federal law. Venue for any action arising under the Plan shall be in Brevard
County, Florida.
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Section 15.7. Severability. If any provision of the Plan is
held illegal or invalid, the illegality or invalidity shall not affect the
remaining provisions of the Plan and the Plan shall be construed and enforced as
if the illegal or invalid provision had not been included in the Plan.
Section 15.8. No Guarantee. None of the Company, the
Employers, the Administrative Committee, the Compensation Committee, the
Investment Committee or the Trustee in any way guarantees the Trust from loss or
depreciation nor the payment of any benefit that may be or become due to any
person from the Trust Fund. Nothing in the Plan shall be deemed to give any
Participant, distributee or Beneficiary an interest in any specific part of the
Trust Fund or any other interest except the right to receive benefits from the
Trust Fund in accordance with the provisions of the Plan and the trust
agreement.
Section 15.9. Plan Voluntary. Although it is intended that the
Plan shall be continued and that contributions shall be made as herein provided,
the Plan is entirely voluntary on the part of the Employers and the continuance
of the Plan and the contributions hereunder are not and shall not be regarded as
contractual obligations of the Employers.
ARTICLE 16
TOP-HEAVY PLAN REQUIREMENTS
Section 16.1. Top-Heavy Plan Determination. If as of the
determination date (as hereinafter defined) for any Plan Year the aggregate of
(a) the account balances under the Plan and all other defined contribution plans
in the aggregation group (as hereinafter defined) and (b) the present value of
accrued benefits under all defined benefit plans in such aggregation group of
all participants in such plans who are key employees (as hereinafter defined)
for such Plan Year exceeds 60% of the aggregate of the account balances and the
present value of accrued benefits
69
of all participants in such plans as of the determination date, then the Plan
shall be a "top-heavy plan" for such Plan Year, and the requirements of Section
16.3 shall be applicable for such Plan Year as of the first day thereof. If the
Plan is a top-heavy plan for any Plan Year and is not a top-heavy plan for any
subsequent Plan Year, the requirements of Section 16.3 shall not be applicable
for such subsequent Plan Year.
Section 16.2. Definitions and Special Rules.
(a) Definitions. For purposes of this Article 16, the
following definitions shall apply:
(1) Determination Date. The determination date for all plans
in the aggregation group shall be the last day of the preceding Plan
Year, and the valuation date applicable to a determination date shall
be (i) in the case of a defined contribution plan, the date as of which
account balances are determined that coincides with or immediately
precedes the determination date, and (ii) in the case of a defined
benefit plan, the date as of which the most recent actuarial valuation
for the Plan Year that includes the determination date is prepared,
except that if any such plan specifies a different determination or
valuation date, such different date shall be used with respect to such
plan.
(2) Aggregation Group. The aggregation group shall consist of
(a) each plan of an Employer in which a key employee is a participant,
(b) each other plan that enables such a plan to be qualified under
section 401(a) of the Code, and (c) any other plans of an Employer that
the Company designates as part of the aggregation group.
(3) Key Employee. Key employee shall have the meaning set
forth in section 416(i) of the Code.
(4) Compensation. Compensation shall have the meaning set
forth in U.S. Treasury Regulation Section 1.415-2(d).
(b) Special Rules. For the purpose of determining the accrued
benefit or account balance of a participant, (i) the accrued benefit or account
balance of any person who has not performed services for an Employer at any time
during the one-year period ending on the determination date shall not be taken
into account pursuant to this Section, and (ii) any person who received a
distribution from a plan (including a plan that has terminated) in the
aggregation
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group during the one-year period ending on the determination date shall be
treated as a participant in such plan, and any such distribution shall be
included in such participant's account balance or accrued benefit, as the case
may be; provided, however, that in the case of a distribution made for a reason
other than a person's severance from employment, death or disability, clause
(ii) of this Section 16.2(b) shall be applied by substituting "five-year period"
for "one-year period."
Section 16.3. Minimum Contribution for Top-Heavy Years.
Notwithstanding any provision of the Plan to the contrary, for any Plan Year for
which the Plan is a top-heavy plan, a minimum contribution shall be made on
behalf of each Participant (other than a key employee) who is an Employee on the
last day of the Plan Year in an amount equal to the lesser of (i) 3% of such
Participant's compensation during such Plan Year and (ii) the highest percentage
at which Employer contributions (including pre-tax contributions) are made on
behalf of any key employee for such Plan Year. If during any Plan Year for which
this Section 16.3 is applicable a defined benefit plan is included in the
aggregation group and such defined benefit plan is a top-heavy plan for such
Plan Year, the percentage set forth in clause (i) of the first sentence of this
Section 16.3 shall be 5%. The percentage referred to in clause (ii) of the first
sentence of this Section 16.3 shall be obtained by dividing the aggregate of
Employer contributions made pursuant to Article 4 and pursuant to any other
defined contribution plan that is required to be included in the aggregation
group (other than a defined contribution plan that enables a defined benefit
plan that is required to be included in such group to be qualified under section
401(a) of the Code) during the Plan Year on behalf of such key employee by such
key employee's compensation for the Plan Year. Notwithstanding the foregoing,
the minimum contribution described in this Section 16.3 for any Plan Year for
which the Plan is a top-heavy
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plan shall not be made under this Plan with respect to any Participant who
receives a minimum contribution or minimum benefit for purposes of section
416(c) of the Code under another plan maintained by an Affiliate.
In order to satisfy the minimum contribution required by this
Section 16.3, the profit sharing contribution for a Plan Year for which the Plan
is a top-heavy plan first shall be allocated, without regard to any Social
Security contribution, to all Participants who are Employees on the last day of
such Plan Year in an amount that meets the minimum contribution requirement. Any
remaining profit sharing contribution shall be allocated in accordance with
Section 8.6.
ARTICLE 17
AMENDMENT, ESTABLISHMENT OF
SEPARATE PLAN, PLAN TERMINATION AND CHANGE OF CONTROL
Section 17.1. Amendment. The Investment Committee (or such
other committee of the Board as the Board may designate from time to time) may,
at any time and from time to time, amend or modify the Plan. Any such amendment
or modification shall become effective as of such date determined by the
Investment Committee (or such other committee), including retroactively to the
extent permitted by law, and may apply to Participants in the Plan at the time
thereof as well as to future Participants.
Section 17.2. Establishment of Separate Plan. If an Employer
withdraws from the Plan pursuant to Section 14.2, then the Administrative
Committee shall determine the portion of each of the funds of the Trust Fund
that is applicable to the Participants of such Employer and their Beneficiaries
and direct the Trustee to segregate such portions in a separate trust. Such
separate trust thereafter shall be held and administered as a part of the
separate plan of such
72
Employer. The portion of a fund of the Trust Fund applicable to the Participants
(and Beneficiaries) of a particular Employer shall be an amount that bears the
same ratio to the value of such fund as the total value of the fund accounts of
Participants (and Beneficiaries) of such Employer bears to the total value of
the fund accounts of all Participants (and Beneficiaries).
Section 17.3. Termination. The Company at any time may
terminate the Plan by resolution of an appropriate committee of the Board. An
Employer at any time may terminate its participation in the Plan by resolution
of its board of directors. In the event of any such termination, or in the event
of the partial termination of the Plan with respect to a group of Participants,
the Accounts of Participants with respect to whom the Plan is terminated shall
become fully vested and thereafter shall not be subject to forfeiture. In the
event that an Employer terminates its participation in the Plan, the
Administrative Committee shall determine, in the manner provided in Section
17.2, the portion of each of the funds of the Trust Fund that is applicable to
the Participants of such Employer and their Beneficiaries and direct the Trustee
to distribute such portions to such Participants and Beneficiaries ratably in
proportion to the balances of their respective Accounts.
A complete discontinuance of contributions by an Employer
shall be deemed a termination of such Employer's participation in the Plan for
purposes of this Section.
Section 17.4. Change of Control. (a) Effect. Notwithstanding
any provision of the Plan to the contrary, during the period commencing on the
date of a Change of Control and ending at the close of business on the last day
of the Fiscal Year during which the Change of Control occurs (the "Restriction
Period"), the Plan may not be terminated, and the Plan may not be amended to:
73
(1) revise the definition of Eligible Employee such that fewer
Employees are eligible to participate in the Plan, lengthen the service
requirement for participation in the Plan, create an age requirement or
entry dates for participation in the Plan or otherwise reduce coverage
under the Plan;
(2) reduce the amount of profit sharing contribution required
to be made for the Plan Year ending on the last day of the Restriction
Period;
(3) reduce the amount of pre-tax contributions or after-tax
contributions that a Participant is permitted to make under the Plan;
or
(4) reduce the amount of matching contributions required to be
made under the Plan.
(b) Miscellaneous. (1) For the purpose of computing the amount
of the profit sharing contribution for the Plan Year ending on the last day of
the Restriction Period, Adjusted Consolidated Net Income shall be the forecast
of the consolidated net income of the Company and its Consolidated Subsidiaries
for the Fiscal Year ending on the last day of the Restriction Period as set
forth in the annual operating plan of the Company for such Fiscal Year.
(2) Any person who was an Eligible Employee on the day
immediately preceding a Change of Control shall be deemed to be an Eligible
Employee during the Restriction Period so long as the person 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 Company, any corporation which is the
survivor of any merger or consolidation to which the Company was a party, or any
corporation into which the Company has been liquidated.
Section 17.5. Trust Fund to Be Applied Exclusively for
Participants and Their Beneficiaries. Subject only to the provisions of Article
6 and Sections 15.2(b) and (c), and any other provision of the Plan to the
contrary notwithstanding, no part of the Trust Fund shall be used for or
diverted to any purpose not for the exclusive benefit of the Participants and
their Beneficiaries either by operation or termination of the Plan, power of
amendment or other means.
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IN WITNESS WHEREOF, the Company has caused this instrument to
be executed by its duly authorized officer this 3rd day of March, 2003.
HARRIS CORPORATION
By: /s/ Jeffrey P. Morrill
-------------------------------
Title: Assistant Treasurer
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