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HARRIS CORPORATION
UNION RETIREMENT PLAN
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TABLE OF CONTENTS
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PAGE
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ARTICLE I
DEFINITIONS...........................................................................2
1.1 Accounts.....................................................................2
1.2 After-Tax Account............................................................2
1.3 After-Tax Contributions......................................................2
1.4 Balanced Fund................................................................2
1.5 Basic Account................................................................2
1.6 Beneficiary..................................................................2
1.7 Break-in-Service.............................................................3
1.8 Code.........................................................................3
1.9 Compensation.................................................................3
1.10 Consolidated Subsidiaries....................................................5
1.11 Corporate Plan...............................................................6
1.12 Corporation..................................................................6
1.13 Corporation Committee........................................................6
1.14 Disability...................................................................6
1.15 Early Retirement Age.........................................................6
1.16 Employment Unit..............................................................6
1.17 Employee.....................................................................6
1.18 ERISA........................................................................7
1.19 Excess Compensation..........................................................7
1.20 Fiscal Year..................................................................7
1.21 Full-Time Employee...........................................................8
1.22 Harris Stock Fund............................................................8
1.23 Harris Stock After-Tax Account...............................................8
1.24 Harris Stock Matching Account................................................8
1.25 Harris Stock Pre-Tax Account.................................................8
1.26 Highly Compensated Employee..................................................8
1.27 Hour of Service.............................................................10
1.28 Investment Funds............................................................10
1.29 Layoff......................................................................10
1.30 Leave of Absence............................................................11
1.31 Matching After-Tax Account..................................................11
1.32 Matching After-Tax Contributions............................................11
1.33 Matching Contributions......................................................11
1.34 Matching Pre-Tax Account....................................................11
1.35 Matching Pre-Tax Contributions..............................................12
1.36 Military Leave..............................................................12
1.37 Normal Retirement Age ......................................................12
1.38 Original Plan...............................................................12
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1.39 Participant.................................................................12
1.40 Participating Company.......................................................12
1.41 Period of Service...........................................................13
1.42 Period of Severance.........................................................13
1.43 Plan........................................................................13
1.44 Plan Year...................................................................13
1.45 Predecessor Company.........................................................13
1.46 Pre-Tax Account.............................................................14
1.47 Pre-Tax Contributions.......................................................14
1.48 Profit-Sharing Account......................................................14
1.49 Profit-Sharing Contributions................................................14
1.50 Related Company.............................................................14
1.51 Release Employee............................................................15
1.52 Rollover Account............................................................15
1.53 Savings Account.............................................................15
1.54 Severance from Service Date.................................................15
1.55 Supplemental Account........................................................16
1.56 Taxable Wage Base...........................................................16
1.57 Trust Agreement.............................................................16
1.58 Trust Fund..................................................................16
1.59 Trustee.....................................................................17
1.60 Valuation Date..............................................................17
ARTICLE II
PARTICIPATION........................................................................18
2.1 In General..................................................................18
2.2 Renewal of Participation on Reemployment....................................18
2.3 Periods of Service on Reemployment..........................................18
2.4 Service with Predecessor Company............................................20
ARTICLE III
CONTRIBUTIONS AND ALLOCATIONS........................................................21
3.1 Profit-Sharing Contributions................................................21
3.2 Allocation of Profit-Sharing Contribution to Participants...................24
3.3 Pre-Tax Contributions.......................................................25
3.4 Matching Pre-Tax Contributions..............................................26
3.5 After-Tax Contributions.....................................................27
3.6 Matching After-Tax Contributions............................................28
3.7 Elections to Make Pre-Tax and After-Tax Contributions.......................29
3.8 Rollover Contributions......................................................30
3.9 Participating Company's Obligation to Make Contributions....................31
3.10 Treatment of Forfeited Amounts..............................................32
3.11 Finality of Allocations.....................................................32
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ARTICLE IV
LIMITATIONS ON CONTRIBUTIONS.........................................................33
4.1 In General..................................................................33
4.2 Pre-Tax Contributions.......................................................33
4.3 Percentage Limitation on Pre-Tax Contributions..............................34
4.4 Percentage Limitation on After-Tax and Matching Contributions...............36
4.5 Multi-Use of Alternative Limitations........................................38
4.6 Limitations on Annual Additions.............................................38
ARTICLE V
VESTING AND FORFEITURES..............................................................41
5.1 In General..................................................................41
5.2 Vesting on Retirement, Death or Disability..................................41
5.3 Vesting on Other Termination of Employment..................................41
5.4 Effect of In-Service Withdrawals on a Participant's Vested Percentage.......42
5.5 Forfeitures.................................................................43
ARTICLE VI
ACCOUNTS AND INVESTMENTS.............................................................45
6.1 Establishment of Accounts...................................................45
6.2 Investment of Accounts......................................................46
6.3 Allocation of Earnings and Losses...........................................48
6.4 Special Rules Concerning Harris Stock Fund..................................49
ARTICLE VII
DISTRIBUTIONS........................................................................52
7.1 In General..................................................................52
7.2 Small Benefit Cash-out......................................................53
7.3 Form of Payment.............................................................53
7.4 Time of Payment.............................................................54
7.5 Direct Rollover.............................................................54
7.6 Payments on Death...........................................................56
7.7 Benefit Amount and Withholding..............................................56
7.8 Order of Distributions......................................................57
7.9 Statutory Requirements......................................................57
7.10 Designating Beneficiaries...................................................60
7.11 Payment of Group Insurance Premiums.........................................62
7.12 Inability to Locate Participant.............................................63
ARTICLE VIII
LOANS................................................................................64
8.1 In General..................................................................64
8.2 Loan Administration.........................................................64
8.3 Terms and Conditions of Loans...............................................64
8.4 Interest Rate...............................................................66
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8.5 Repayment and Default.......................................................67
8.6 Mechanics...................................................................69
8.7 Special Powers..............................................................69
ARTICLE IX
IN-SERVICE WITHDRAWALS...............................................................70
9.1 Withdrawals from Savings Account and After-Tax Account......................70
9.2 Withdrawals from Rollover, Pre-Tax and Profit Sharing Accounts..............70
9.3 Conditions Applicable to All Withdrawals....................................73
9.4 Reduction of Investment Fund Balances.......................................73
ARTICLE X
ADMINISTRATION.......................................................................75
10.1 Named Fiduciaries............................................................75
10.2 Corporation Committee.......................................................75
10.3 Powers and Duties of Committee..............................................75
10.4 Actions of Committee........................................................76
10.5 Finality of Decisions.......................................................76
10.6 Immunities of Committee.....................................................76
10.7 Advisers and Agents.........................................................76
10.8 Committee Member who is Participant.........................................77
10.9 Information Provided by Participating Companies.............................77
10.10 Expenses....................................................................78
10.11 Trust.......................................................................78
10.12 Trust Fund Available to Pay All Plan Benefits...............................79
ARTICLE XI
AMENDMENT AND TERMINATION AND CHANGE OF CONTROL......................................80
11.1 Amendment...................................................................80
11.2 Termination of Plan.........................................................80
11.3 Discontinuance of Contributions.............................................81
11.4 Vesting on Termination or Discontinuance of Contributions...................81
11.5 Distribution on Termination.................................................81
11.6 Change of Control...........................................................82
ARTICLE XII
MISCELLANEOUS PROVISIONS.............................................................88
12.1 Restrictions on Alienation: Qualified Domestic Relations Orders.............88
12.2 Exclusive Benefit Requirement...............................................89
12.3 Return of Contributions.....................................................89
12.4 No Contract of Employment...................................................90
12.5 Payment of Benefits on Incapacity...........................................90
12.6 Merger......................................................................91
12.7 Construction................................................................91
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12.8 Governing Law...............................................................91
12.9 Mistaken Payments...........................................................91
APPENDIX A
Investment Funds...........................................................A-1
APPENDIX B
Participating Companies.............................................................B-1
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INTRODUCTION
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The Harris Corporation Union Retirement Plan (the "Plan") is hereby
amended and restated effective January 1, 1998. The provisions of the Plan to
the extent so amended and restated shall apply only to those participants in the
Plan who are Employees on or after January 1, 1998. Any benefits of an
individual who ceased being an Employee before January 1, 1998 and who is not
reemployed by a Participating Company after such date shall be determined under
the terms of the Plan that were in effect when such individual ceased to be an
Employee.
The Plan and its related trust are intended to be a tax-exempt plan and
trust under sections 401(a) and 501(a) of the Code, respectively. The Plan also
is intended to be a profit-sharing plan that contains a qualified cash or
deferred arrangement under section 401(k) of the Code.
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ARTICLE I
DEFINITIONS
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1.1 ACCOUNTS -- means all of the accounts described in section 6.1, and
such other accounts that may be established on behalf of each Participant, to be
credited with contributions made on behalf of a Participant, adjusted for
earnings and losses as provided in the Plan and debited by Plan expenses
allocable to the Accounts, distributions, withdrawals and loans to the
Participant.
1.2 AFTER-TAX ACCOUNT -- means the Account established to record
After-Tax Contributions made on a Participant's behalf other than those invested
in the Harris Stock Fund.
1.3 AFTER-TAX CONTRIBUTIONS -- means the contributions described in
section 3.5.
1.4 BALANCED FUND -- means the Balanced Fund described in Appendix A.
1.5 BASIC ACCOUNT -- means the Account established to record the
portion of the Profit-Sharing Contributions allocable to a Participant's
Compensation.
1.6 BENEFICIARY -- means the person or persons entitled to receive any
benefits payable under the Plan on account of a Participant's death.
1.7 BREAK-IN-SERVICE -- means a Period of Severance, as defined below.
1.8 CODE -- means the Internal Revenue Code of 1986, as amended from
time to time.
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Definitions
1.9 COMPENSATION -- means the following items of remuneration which an
Employee earns for work or personal services performed for a Participating
Company:
(a) salary or wages;
(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 adopted from time to
time by the Corporation or other Participating Company employing the
Employee or any stock award made in lieu of an annual cash bonus or
incentive compensation;
(f) any other bonus or incentive compensation payable in the form
of cash or any stock awards made pursuant to an established plan of
the Corporation or Employee's Employment Unit, including but not
limited to, bonus awards, spot awards, lump sum, profit sharing, team
awards and gain sharing awards;
(g) any compensation of a type described in items (a) through (f)
above which is paid as an employee contribution to the Plan;
(h) any salary reduction contributions to a cafeteria plan
(within the meaning of section 125 of the Code) maintained by a
Participating Company; but excluding:
(i) any extraordinary compensation of a recurring or
non-recurring nature not included under items (a) to (f) above;
(ii) any extraordinary compensation in the nature of bonus,
commission or incentive compensation which is not paid pursuant
to an established plan of the Employee's Employment Unit or
pursuant to an established sales incentive plan;
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Definitions
(iii) 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, SARs, or other stock-based awards or dividend
equivalents;
(iv) severance pay or special retirement pay;
(v) retention bonuses or completion bonuses unless
authorized by the appropriate officer of the Corporation in a
uniform and nondiscriminatory manner;
(vi) 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 refund. In no event does the term "Compensation"
include indirect compensation such as employer-paid group
insurance premiums, or contributions under this or other
qualified employee benefit plan, other than as a contribution
described in item (g) above.
Only Compensation not in excess of the amount allowed under
section 401(a)(17) of the Code (as adjusted in accordance with such section for
increases in the cost of living) shall be taken into account. In addition, in
the year in which an Employee becomes a Participant, only Compensation received
after he becomes a Participant shall be taken into account. For purposes of any
test imposed under any section of the Code, the Plan authorizes the use of any
definition of Compensation that satisfies the requirements of such section.
1.10 CONSOLIDATED SUBSIDIARIES --means those subsidiaries of the
Corporation which are included in the consolidated annual financial statements
for the Corporation.
1.11 CORPORATE PLAN -- means the Harris Corporation Retirement Plan, as
it may be amended from time to time.
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Definitions
1.12 CORPORATION -- means Harris Corporation, a Delaware corporation.
1.13 CORPORATION COMMITTEE -- means the committee established under
section 11.3
1.14 DISABILITY --means a disability that qualifies a Participant for
disability benefits under title II or title XVI of the Federal Social Security
Act; such disability for Plan purposes shall be deemed to occur on the effective
date determined by the Social Security Administration.
1.15 EARLY RETIREMENT AGE --means age 55.
1.16 EMPLOYMENT UNIT --means any division or other readily identifiable
segment of the operations of a Participating Company, for example, as identified
in the annual report or such other segment as may be established for purposes of
the Plan by the Corporation, in its discretion.
1.17 EMPLOYEE -- means an individual whose employment relationship is
covered by a collective bargaining agreement which provides for such
individual's participation in the Plan. Notwithstanding the foregoing, no
individual who renders services to a Participating Company shall be considered
an Employee for purposes of the Plan if such individual renders such services
pursuant to (i) a written agreement providing that such services are to be
rendered by the individual as an independent contractor, (ii) a written
agreement (other than a collective bargaining agreement) with an entity,
including a leasing organization within the meaning of section 414(n)(2) of the
Code, that is not a Participating Company or Related Company, or (iii) a written
agreement that contains a waiver of participation in the Plan. A leased employee
shall be treated as an Employee only for purposes of applying the requirements
described in section 414(n)(3) of the Code and determining the number and
identity of Highly Compensated Employees.
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Definitions
1.18 ERISA -- means the Employee Retirement Income Security Act of
1974, as amended from time to time.
1.19 EXCESS COMPENSATION -- means the portion of a Participant's
Compensation that exceeds the Taxable Wage Base for the year in which the
Compensation is received.
1.20 FISCAL YEAR -- means the fiscal year of the Corporation.
1.21 FULL-TIME EMPLOYEE -- means an Employee who is scheduled by a
Participating Company to work 30 or more hours per week.
1.22 HARRIS STOCK FUND -- means the Fund described in Appendix A that
is designed to be invested in qualifying employer securities within the meaning
of section 407 of ERISA.
1.23 HARRIS STOCK AFTER-TAX ACCOUNT -- means the portion of the
After-Tax Contributions made on the Participant's behalf invested in the Harris
Stock Fund.
1.24 HARRIS STOCK MATCHING ACCOUNT -- means the portion of the Matching
Contributions made on a Participant's behalf invested in the Harris Stock Fund.
1.25 HARRIS STOCK PRE-TAX ACCOUNT -- means the portion of the Pre-Tax
Contributions made on a Participant's behalf invested in the Harris Stock Fund.
1.26 HIGHLY COMPENSATED EMPLOYEE -- means any Employee who performs
services for the Employer during the "determination year" and who, during the
"look-back year": (a) received Compensation from the employer in excess of
$75,000 (as adjusted pursuant to section 415(d) of the Code); (b) received
compensation from the employer in excess of $50,000 (as adjusted pursuant to
section 415(d) of the Code) and was in the top 20 percent of employees based on
compensation for such year; or (c) was an officer of the employer and
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Definitions
received compensation during such year that is greater than 50 percent of the
dollar limitation in effect under section 415(b)(1)(A) of the Code, or if no
officer received Compensation in that amount, the highest paid officer for such
year. The term highly compensated employee also includes (1) employees who are
described in (a) through (c), above for the look-back year and are one of the
100 top-paid employees during the determination year; and (2) employees who are
5-percent owners at any time during the look-back year or determination year.
The determination year is the Plan Year and the look-back year is the prior Plan
Year.
If, during a determination year or look-back year, an Employee is a
family member of either a 5 percent owner who is an Employee or one of the 10
most Highly Compensated Employees based on compensation, then the family member
and the 5 percent owner or Highly Compensated Employee shall be treated as a
single employee receiving the aggregate compensation and contributions. For
purposes of this section, family member includes the spouse, lineal ascendants
and descendants of the employee and the spouses of such lineal ascendants and
descendants.
The determination of Highly Compensated Employee shall be made in
accordance with section 414(q) of the Code and the regulations thereunder, which
are incorporated herein by reference.
1.27 HOUR OF SERVICE -- means each hour for which an Employee is paid
or entitled to payment for the performance of duties for a Participating Company
or Related Company.
1.28 INVESTMENT FUNDS -- means the funds described in Appendix A and
any other fund designated by the Corporation Committee.
1.29 LAYOFF -- means a temporary suspension of the active employment of
an Employee with the understanding that the Employee will be recalled to active
employment if
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Definitions
and when his services are again required. A period of Layoff terminates, and the
Severance from Service Date of a Participant who is not recalled or otherwise
employed by a Related Company is deemed to occur on the earliest of the
following dates:
(a) the expiration date specified in a notice of recall
delivered to the Employee;
(b) the first anniversary of the date the Layoff began in
accordance with clause (b) of the definition of
"Severance from Service" contained in section 1.54;
or
(c) the election of an Employee to terminate the Layoff
by written notice delivered to the Corporation.
1.30 LEAVE OF ABSENCE -- means a period of interruption of the active
employment of an Employee granted by a Participating Company or Predecessor
Company with the understanding that the Employee will return to active
employment at the expiration of the period of time. A Leave of Absence as
originally granted may be extended by the Participating Company or Predecessor
Company for additional periods. The term "Leave of Absence" does not include a
Military Leave.
1.31 MATCHING AFTER-TAX ACCOUNT -- means the Account established to
record Matching After-Tax Contributions made on a Participant's behalf other
than those invested in the Harris Stock Fund.
1.32 MATCHING AFTER-TAX CONTRIBUTIONS -- means the contributions made
on behalf of a Participant under section 3.6.
1.33 MATCHING CONTRIBUTIONS -- means the aggregate of the Matching
After-Tax Contributions and the Matching Pre-Tax Contributions made on behalf of
a Participant.
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Definitions
1.34 MATCHING PRE-TAX ACCOUNT -- means the Account established to
record the Matching Pre-Tax Contributions made on a Participant's behalf other
than those invested in the Harris Stock Fund.
1.35 MATCHING PRE-TAX CONTRIBUTIONS -- means the contributions made on
behalf of a Participant under section 3.4.
1.36 MILITARY LEAVE -- means an Employee's absence from active
employment with a Participating Company or Predecessor Company for military
service with the armed forces of the United States, provided that such Employee
returns to active employment within the period required under any federal law
pertaining to veteran's reemployment rights.
1.37 NORMAL RETIREMENT AGE -- means age 65.
1.38 ORIGINAL PLAN -- means the terms of the 1990 Revised Harris
Corporation Union Retirement Plan, and any prior plan to the extent incorporated
therein.
1.39 PARTICIPANT -- means an Employee who satisfies the requirements of
section 2.1.
1.40 PARTICIPATING COMPANY -- means the Corporation or any Related
Company. Appendix B, as it may be amended from time to time, lists each
Participating Company, or division thereof, whose Employees may become
Participants.
1.41 PERIOD OF SERVICE -- means the period of time that begins on an
Employee's employment or reemployment date, whichever is applicable, and ends on
his Severance from Service Date. An Employee's employment date is the date on
which the Employee first performs an Hour of Service; an Employee's reemployment
date is the date on which the Employee first performs an Hour of Service after
his most recent Severance from Service Date.
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Definitions
1.42 PERIOD OF SEVERANCE -- means the period of time commencing on the
Severance from Service Date and ending on the date on which the Employee again
performs an Hour of Service.
1.43 PLAN -- means the Harris Corporation Union Retirement Plan.
1.44 PLAN YEAR -- means the Fiscal Year.
1.45 PREDECESSOR COMPANY -- means any corporation (a) of which a
Related Company is a successor by reason of having acquired all or substantially
all of its business and assets by purchase, merger, consolidation or
liquidation, or (b) from which a Related Company acquired a business formerly
conducted by such corporation; provided, however, that in the case of any such
corporation that continued to conduct a trade or business subsequent to the
acquisition by a Related Company referred in (a) or (b) above, the status of
such corporation as a Predecessor Company relates only to the period of time
prior to the date of such acquisition.
1.46 PRE-TAX ACCOUNT -- means the Account established to record the
Pre-Tax Contributions made on a Participant's behalf other than those invested
in the Harris Stock Fund.
1.47 PRE-TAX CONTRIBUTIONS -- means the contributions made on behalf of
a Participant under section 3.3.
1.48 PROFIT-SHARING ACCOUNT -- means the Account established to record
the Profit-Sharing Contributions made on a Participant's behalf, and includes
the Basic Account and the Supplemental Account.
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Definitions
1.49 PROFIT-SHARING CONTRIBUTIONS -- means the contributions described
in section 3.1.
1.50 RELATED COMPANY -- means the Corporation or any corporation that
is a member of a controlled group of corporations (as defined in section 414(b)
of the Code) with the Corporation; any trade or business (whether or not
incorporated) which is under common control (as defined in section 414(c) of the
Code) with the Corporation; any organization (whether or not incorporated) which
is a member of an affiliated service group (as defined in section 414(m) of the
Code) which includes the Corporation, or any other entity required to be
aggregated with the Corporation under section 414(o) of the Code.
1.51 RELEASE EMPLOYEE -- An employee of the Corporation who is
transferred by the Corporation to a Related Company (other than a Participating
Company) and who is designated by the Corporation Committee as a Release
Employee for purposes of receiving a Profit-Sharing Contribution for the Plan
Year in which such transfer occurred.
1.52 ROLLOVER ACCOUNT -- means the Account established to record the
rollover contributions made by a Participant pursuant to section 3.8.
1.53 SAVINGS ACCOUNT -- means the Account established under section
6.1(f).
1.54 SEVERANCE FROM SERVICE DATE -- means, with respect to a Related
Company, the earlier of (a) the date on which the Employee quits, retires, is
discharged or dies, and (b) the first anniversary of the first date of a period
in which an Employee remains absent from service (with or without pay) for any
reason other than quitting, retirement, discharge or death; provided that
"second anniversary" shall be substituted for "first anniversary" if the absence
is due to maternity or paternity reasons as defined in section 410(a)(5)(E) of
the Code.
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Definitions
The period between the first and the second anniversary shall not be a Period of
Service or a Period of Severance.
1.55 SUPPLEMENTAL ACCOUNT -- means the Account established to record
the portion of a Participant's Profit-Sharing Contribution allocable to the
Participant's Excess Compensation.
1.56 TAXABLE WAGE BASE -- means the maximum amount of earnings that may
be considered wages under section 3121(a)(1) of the Code, except for purposes of
Medicare taxes, as in effect on the first day of the Plan Year. In the case of
an Employee who was a Participant for only a portion of a particular Plan Year,
the Taxable Wage Base shall be multiplied by the ratio of the number of calendar
months (including a fraction of a month as a full month) in the Plan Year during
which he was a Participant to 12 months.
1.57 TRUST AGREEMENT -- means the Trust Agreement relating to the
Harris Corporation Retirement Plan, entered into between the Corporation and the
Trustee, as it may be amended from time to time.
1.58 TRUST FUND -- means the assets held by the Trustee in accordance
with the Trust Agreement.
1.59 TRUSTEE -- means Bankers Trust Company, or such successor (or
successors) thereto designated by the Corporation to act as trustee under the
provisions of the Trust Agreement, who shall agree to act as such by executing
the Trust Agreement.
1.60 VALUATION DATE -- means each day the New York Stock Exchange is
open, and any other day as the Corporation Committee may determine.
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ARTICLE II
PARTICIPATION
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2.1 IN GENERAL . An Employee shall become a Participant in the Plan on
the date he completes a one-year Period of Service, provided that he is employed
by a Participating Company on that date. Notwithstanding the above, and solely
for purposes of making Pre-Tax Contributions, After-Tax Contributions, and
Rollover Contributions, a Full-Time Employee shall become a Participant in the
Plan on the date he first performs an Hour of Service.
2.2 RENEWAL OF PARTICIPATION ON REEMPLOYMENT . An Employee who
terminates employment after he completes a one-year Period of Service and is
reemployed by a Participating Company shall become a Participant immediately on
reemployment. An Employee who terminates employment before he completes a
one-year Period of Service shall become a Participant as provided in section
2.1, provided that his Period of Service prior to reemployment shall be used to
satisfy the one-year Period of Service requirement of section 2.1 to the extent
provided under section 2.3.
2.3 PERIODS OF SERVICE ON REEMPLOYMENT . The following rules shall
apply to an Employee who terminates employment before he completes a one-year
Period of Service and is reemployed by a Related Company:
(a) CREDIT FOR PRIOR PERIOD OF SERVICE. If the Employee is
reemployed by a Related Company before his Period of Severance equals or exceeds
the greater of (i) his Period of Service before he terminated employment and
(ii) five years, then his Period of Service before he terminated employment
shall be taken into account in determining whether the Employee has completed a
one-year Period of Service for purposes of section 2.1 and for purposes of
determining a Participant's Period of Service under section 5.3.
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Participation
(b) CREDIT FOR PERIOD OF SEVERANCE. If the Employee terminates
employment due to quitting, discharge, or retirement and is reemployed by a
Related Company within 12 months of his termination date, his Period of
Severance shall be taken into account in determining whether the Employee has
completed a one-year Period of Service for purposes of section 2.1 and for
purposes of determining a Participant's Period of Service under section 5.3. If
the Employee terminates employment for any reason other than quitting,
discharge, or retirement, and subsequently quits, is discharged, or retires, his
Period of Severance shall be taken into account in determining whether the
Employee has completed a one-year Period of Service for purposes of section 2.1
and for purposes of determining a Participant's Period of Service under section
5.3 only if he is reemployed by a Related Company within 12 months of the date
of his termination of employment.
2.4 SERVICE WITH PREDECESSOR COMPANY . In the case of a corporation
(other than a Related Company) that becomes a Predecessor Company by reason of
the acquisition of all or substantially all of the assets and business of such
corporation by a Related Company, an Employee's Period of Service shall include
employment with such Predecessor Company, only to the extent expressly provided
in the corporate documents effecting the acquisition.
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ARTICLE III
CONTRIBUTIONS AND ALLOCATIONS
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3.1 PROFIT-SHARING CONTRIBUTIONS.
(a) BASIC. The amount of Profit-Sharing Contributions made on
behalf of Participating Companies for a Fiscal Year with respect to Participants
in this Plan and the Harris Corporation Retirement Plan shall equal 11 1/2
percent of the adjusted consolidated net income of the Corporation and its
Consolidated Subsidiaries before net income taxes for such Fiscal Year as
determined in subsection (d), reduced by the portion of such amount with respect
to Participants' Compensation that would have been allocable under section 3.2
of this Plan or section 3.2 of the Corporate Plan, if Compensation were
determined without regard to the statutory limits under section 401(a)(17) or
415 of the Code.
(b) SPECIAL. The Corporation, in its discretion, may provide for an
additional Profit-Sharing Contribution in a specified dollar amount or pursuant
to a formula with respect to any Fiscal Year.
(c) APPORTIONMENT BETWEEN THE PLAN AND THE HARRIS CORPORATION
RETIREMENT PLAN. Profit-Sharing Contributions for a Plan Year shall be
apportioned for accounting and payment purposes between the Plan and the
Corporate Plan based on the ratio of the total Compensation plus Excess
Compensation for the Plan Year of participants in each plan to the total
Compensation plus Excess Compensation of all participants in the Plan and the
Corporate Plan for the Plan Year.
(d) ADJUSTED CONSOLIDATED NET INCOME. The adjusted consolidated net
income of the Corporation and its Consolidated Subsidiaries before net income
taxes shall be determined on the basis of the annual audit report prepared by
the Corporation's independent
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public accountants by adjusting the consolidated net income shown in the report
to eliminate the effect, if any, of the following items:
16
23
Contributions and Allocations
(1) any provision for taxes on or measured by
income for such years required by the laws
of the United States or of any state or
political subdivision thereof (including,
however, any taxes required under the Ohio
Franchise Income Tax, whether or not in fact
measured by income), or any provision for
similar taxes required by the laws of any
other country;
(2) all items consisting of credits or
deficiencies relating to taxes described in
clause (1) above on or measured by income
for prior Fiscal Years;
(3) any provision for contributions for such
Fiscal Year under this Plan or under any
profit-sharing retirement plan of a
Consolidated Subsidiary of the Corporation;
(4) all dividends received during such Fiscal
Year with respect to stock of a Related
Company which is not included among the
Consolidated Subsidiaries;
(5) gains or losses from the sale, exchange or
other disposition of capital or depreciable
property, as defined in the Code;
(6) any income from the use of the "lifo"
inventory method resulting from either a
reduction in inventory or a decrease in the
cost index;
(7) all items of income and expense which relate
directly to the conduct by a Related Company
of a business (i) which was formerly
conducted by a corporation which was not
then a Related Company, and (ii) the net
income (or loss) of which was included for
the first time in determining the
consolidated net income of the Corporation
and its Consolidated Subsidiaries for the
Fiscal Year in question;
17
24
Contributions and Allocations
(8) all exchange adjustments resulting from
translating to United States currency those
year-end balance sheet items of subsidiaries
which are denominated in a foreign currency;
(9) any item of income or expense relating to
the right of any employee to receive cash
upon cancellation of an unexercised stock
option; and
(10) the net of all items of income and expense,
other than tax items described in subsection
(1) and (2) above, relating to Lanier
Worldwide, Inc. and any subsidiary thereof
which is a Related Company.
3.2 ALLOCATION OF PROFIT-SHARING CONTRIBUTION TO PARTICIPANTS .
(a) IN GENERAL. The Profit-Sharing Contributions for a Plan Year
with respect to an Employment Unit shall be allocated among eligible
Participants described in subsection (c) who are employed by the Employment Unit
during some part or all of the Plan Year based on the ratio of each eligible
Participant's Compensation plus Excess Compensation for the Plan Year to the
Compensation plus Excess Compensation of all eligible Participants for the Plan
Year.
(b) LIMITATION ON AMOUNT. Notwithstanding subsection (a), the
amount allocated to an eligible Participant with respect to Excess Compensation
shall not exceed the "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). The term "base
contribution percentage" means the percentage of Compensation contributed by the
Participating Company with respect to each Participant's Compensation not in
excess of the Participant's Taxable Wage Base.
18
25
Contributions and Allocations
(c) LIMITATION ON ELIGIBILITY. A Participant shall be eligible to
receive an allocation of Profit-Sharing Contributions for a Plan Year if (i) the
Participant is employed on the earlier of (A) the last day of the Plan Year and
(B) the June 30 coincident with or immediately following the last day of the
Plan Year or (ii) the Participant terminated employment during the Plan Year on
or after Early Retirement Age or Normal Retirement Age, or due to Disability,
death, Layoff, Leave of Absence or Military Leave, or is transferred by the
Corporation as a "Release Employee" to an entity that is not a Participating
Company.
3.3 PRE-TAX CONTRIBUTIONS.
(a) MAXIMUM ELECTION. A Participant may elect to reduce his
Compensation for a Plan Year by an amount equal to any whole percentage not
exceeding 12 percent and have that amount contributed to the Plan on his behalf
as a Pre-Tax Contribution. Pre-Tax Contributions shall be contributed to the
Plan in cash; provided, that the Corporation, in its discretion, may contribute
Pre-Tax Contributions to be invested in the Harris Stock Fund in shares of
common stock of the Corporation, which may be contributed at a discount from
fair market value. The sum of the Pre-Tax Contributions and other elective
deferrals (within the meaning of section 402(g)(3)) made on behalf of the
Participant to the Plan and any other plan of a Participating Company or Related
Company for any calendar year shall not exceed $10,000 (as adjusted in
accordance with section 402(g)(5) for increases in the cost of living). The
portion of any Pre-Tax Contribution made on behalf of a Participant that is
attributable to a discount from fair market value on shares of common stock of
the Corporation shall be disregarded for the purposes of determining (i) whether
the Participant's Pre-Tax Contributions exceed 12 percent of his Compensation
for the Plan Year, and (ii) whether the Participant's Pre-Tax Contributions and
other elective deferrals exceed $10,000 (as adjusted in accordance with section
402(g)(5) for increases in the cost of living) for the calendar year.
19
26
Contributions and Allocations
(b) CONTRIBUTIONS IN EXCESS OF THE MAXIMUM. If the Pre-Tax
Contributions on behalf of a Participant for a calendar year reach the limit
described in subsection (a), any additional contributions to be made during the
calendar year pursuant to the Participant's election shall be made as After-Tax
Contributions and any Matching Pre-Tax Contributions with respect to that amount
shall be made as Matching After-Tax Contributions.
3.4 MATCHING PRE-TAX CONTRIBUTIONS. Each Participating Company shall
make a Matching Pre-Tax Contribution to the Plan on behalf of each Participant
who is employed by such Participating Company and has completed a one-year
Period of Service in the amount of 100 percent of the Pre-Tax Contributions made
on behalf of the Participant for the Plan Year, but only to the extent that such
Pre-Tax Contributions do not exceed six percent of the Participant's
Compensation for such Plan Year. Matching Pre-Tax Contributions shall be
contributed in cash; provided, that the Corporation, in its discretion, may
contribute Matching Pre-Tax Contributions to be invested in the Harris Stock
Fund in shares of common stock of the Corporation, which may be contributed at a
discount from fair market value. The portion of any Matching Pre-Tax
Contribution made on behalf of a Participant for a Plan Year that is
attributable to a discount from fair market value on shares of common stock of
the Corporation shall be disregarded for the purpose of determining whether the
Matching Pre-Tax Contributions made on behalf of the Participant exceed six
percent of the Participant's Compensation for such Plan Year.
3.5 AFTER-TAX CONTRIBUTIONS.
(a) PARTICIPANT CREDITED WITH AT LEAST A ONE-YEAR PERIOD OF
SERVICE. A Participant who does not elect to have Pre-Tax Contributions made to
the Plan on his behalf for a Plan Year and who is credited with at least a
one-year Period of Service may elect to contribute to the Plan as an After-Tax
Contribution an amount equal to any whole percentage of his Compensation for
such Plan Year not exceeding 12 percent. After-Tax Contributions
20
27
Contributions and Allocations
shall be contributed in cash; provided, that the Corporation, in its discretion,
may contribute After-Tax Contributions to be invested in the Harris Stock Fund
in shares of common stock of the Corporation, which may be contributed at a
discount from fair market value. The portion of any After-Tax Contribution made
by a Participant for a Plan Year that is attributable to a discount from fair
market value on shares of common stock of the Corporation shall be disregarded
for the purpose of determining whether the Participant's After-Tax Contributions
exceed twelve percent of his Compensation for such Plan Year. Notwithstanding
any other provision of this section 3.5(a), a Participant who elects to have
Pre-Tax Contributions made to the Plan on his behalf for a Plan Year may not
elect to make After-Tax Contributions for such Plan Year other than pursuant to
section 3.3(b) or 4.2.
(b) PARTICIPANT NOT CREDITED WITH AT LEAST A ONE-YEAR PERIOD OF
SERVICE. A Participant who is not credited with at least a one-year Period of
Service may not elect to make After-Tax Contributions for that Plan Year other
than pursuant to section 3.3(b) or 4.2.
3.6 MATCHING AFTER-TAX CONTRIBUTIONS . Each Participating Company shall
make a Matching After-Tax Contribution to the Plan on behalf of each Participant
who is employed by such Participating Company in the amount of 100 percent of
the After-Tax Contributions made by the Participant, for the Plan Year, but only
to the extent that such After-Tax Contributions do not exceed six percent of the
Participant's Compensation for such Plan Year. Matching After-Tax Contributions
shall be contributed in cash; provided, that the Corporation, in its discretion,
may contribute Matching After-Tax Contributions to be invested in the Harris
Stock Fund in shares of common stock of the Corporation, which may be
contributed at a discount from fair market value. The portion of any Matching
After-Tax Contribution made on behalf of a Participant for a Plan Year that is
attributable to a discount from fair market value on shares of common stock of
the Corporation shall be disregarded for the purpose of determining whether the
Matching After-Tax Contributions made on behalf of the Participant exceed six
percent of the Participant's Compensation for such Plan Year.
21
28
Contributions and Allocations
3.7 ELECTIONS TO MAKE PRE-TAX AND AFTER-TAX CONTRIBUTIONS.
(a) WRITTEN ELECTIONS. A Participant's initial election to reduce
his Compensation and have Pre-Tax Contributions and/or After-Tax Contributions
made on his behalf shall be made in writing by filing the appropriate form,
which shall specify the effective date of the election. The initial election
shall take effect as of the first payroll period commencing immediately after
the effective date of the election or such later date as may be administratively
practicable.
(b) CHANGING ELECTIONS. A Participant may change the percentage (in
increments of one percent) of future Pre-Tax Contributions and/or After-Tax
Contributions made on his behalf by filing the appropriate form or by following
the appropriate telephone procedures for changing elections as established by
the Corporation Committee. A change may be made not more than once each payroll
period. A change of election shall become effective as of the first payroll
period commencing immediately after the date of the election, or such later date
as may be administratively practicable.
(c) TERMINATING ELECTIONS. A Participant may terminate his election
to have Pre-Tax Contributions and/or After-Tax Contributions made on his behalf
by filing the appropriate form. The termination election shall become effective
as of the first payroll period commencing immediately after the date of the
election, or such later date as may be administratively practicable.
(d) CORPORATION'S DISCRETION TO LIMIT ELECTIONS. The Corporation
Committee may direct that Participant elections with respect to Pre-Tax
Contributions and/or After-Tax Contributions be changed in any manner the
Corporation Committee, in its discretion, shall determine appropriate to
preserve the qualification of the Plan under section 401(a) of the Code and as a
qualified cash or deferred arrangement under section 401(k) of the Code.
22
29
Contributions and Allocations
3.8 ROLLOVER CONTRIBUTIONS. A Participant, with the consent of the
Corporation Committee or its delegate, may at any time make a rollover
contribution to the Plan. Rollover contributions shall include only (a) cash
funds transferred directly from a tax-qualified plan within the meaning of
section 401 of the Code, and (b) cash funds distributed from a tax-qualified
plan or a conduit individual retirement account that are eligible for rollover
treatment and are transferred to the Plan within 60 days of the Participant's
receipt thereof. A Participant may be required to establish that the transfer of
amounts into a Rollover Account will not require any changes to the terms of the
Plan or will not expose the Plan or Trust to adverse tax consequences.
3.9 PARTICIPATING COMPANY'S OBLIGATION TO MAKE CONTRIBUTIONS.
(a) CONTRIBUTIONS. Each Participating Company agrees to pay to the
Trustee the contributions that are required with respect to Participants who are
performing services at one of such Participating Company's Employment Units.
Profit-Sharing Contributions with respect to a Fiscal Year shall be paid to the
Trustee no later than the due date for filing the Participating Company's
federal income tax return for such Fiscal Year, including extensions. Pre-Tax
Contributions and After-Tax Contributions shall be withheld and paid by the
Employment Unit, and Matching Contributions shall be paid by the Participating
Company to the Trustee no later than 20 days following the last day of the
calendar month in which the amounts were withheld from the Participants'
Compensation, or sooner as required by Federal law.
(b) LIMITATION. Contributions under this Article III shall not be
required to the extent they exceed the deduction limitations of section 404 of
the Code, in which case such contributions shall be reduced to the extent
allowable and necessary in the following order: (1) Profit-Sharing
Contributions; (2) Matching Contributions, and (3) Pre-Tax Contributions.
23
30
Contributions and Allocations
3.10 TREATMENT OF FORFEITED AMOUNTS.
(a) REDUCTION OF CONTRIBUTIONS. Forfeitures shall be allocated to
Employment Units as provided in subsection (b) and used to reduce Profit-Sharing
Contributions and Matching Contributions of the Participating Companies in which
the Employment Units are included.
(b) ALLOCATION OF FORFEITURES TO EMPLOYMENT UNITS. Forfeitures of
Profit-Sharing Contributions and Matching Contributions shall be credited to the
Employment Unit with which the Participant was last employed before the
forfeiture occurred, or as otherwise determined by the Corporation Committee.
3.11 FINALITY OF ALLOCATIONS . The Corporation Committee shall cause a
written benefit statement to be given to each Participant at least annually
setting forth the amount of the contributions allocated to his Accounts;
provided, however, that if any such Participant is deceased, such statement
shall be given to his Beneficiary. Any Participant or Beneficiary claiming that
an error has been made in a benefit statement shall notify the Corporation
Committee in writing within 90 days following the delivery or mailing of such
statement. The Corporation Committee shall review the claim and advise the
Participant or Beneficiary of its decision in writing. If no such notice of
error is filed, the benefit statement shall be presumed to be correct.
24
31
ARTICLE IV
LIMITATIONS ON CONTRIBUTIONS
----------------------------
4.1 IN GENERAL. Notwithstanding any provisions of Article III to the
contrary, the contributions provided for in Article III shall be limited to the
extent necessary to meet the requirements of this Article IV.
4.2 PRE-TAX CONTRIBUTIONS.
(a) TREATMENT OF CERTAIN CONTRIBUTIONS AS AFTER-TAX. If the
Corporation Committee determines that a Participant's Pre-Tax Contributions for
a calendar year have reached the dollar limit described in section 3.3(a), any
additional contributions for that calendar year pursuant to the Participant's
Pre-Tax Contribution election shall be deemed to be After-Tax Contributions and
the Matching Contributions with respect to that amount, if any, shall be deemed
to be Matching After-Tax Contributions.
(b) RETURN OF EXCESS DEFERRALS. In the event that a Participant's
Pre-Tax Contributions made to the Plan for a calendar year exceed the dollar
limit described in section 3.3(a), the excess amount, as adjusted for income and
loss, may, in the discretion of the Corporation Committee, be distributed to the
Participant no later than April 15 of the following year in accordance with the
requirements of section 402(g) of the Code and Treasury Regulation section
1.402(g)-1.
4.3 PERCENTAGE LIMITATION ON PRE-TAX CONTRIBUTIONS.
(a) SATISFYING THE ACTUAL DEFERRAL PERCENTAGE TEST. Subject to
subsection (c), the Pre-Tax Contributions made on behalf of Participants with
respect to a Plan Year shall
25
32
Limitations on Contributions
satisfy the "actual deferral percentage test" of section 401(k)(3) of the Code
and Treasury Regulation section 1.401(k)-1(b)(2), the provisions of which are
incorporated herein by reference.
(b) TREATMENT OF EXCESS CONTRIBUTIONS AS AFTER-TAX. In the event it
is necessary to reduce or limit the amount of any Pre-Tax Contributions made on
behalf of Highly Compensated Employees to satisfy the "actual deferral
percentage test", the "excess contributions", as defined herein, shall be deemed
to be After-Tax Contributions and any Matching After-Tax Contributions made with
respect to such excess contributions shall be deemed to be Matching After-Tax
Contributions. The following rules shall apply in the case of recharacterization
of "excess contributions":
(1) Recharacterization shall occur no later than two and
one-half months after the end of the Plan Year which the
excess contributions arose and shall be deemed to occur no
earlier than the date the last Highly Compensated Employee
is informed in writing of the amount recharacterized and the
consequences thereof. Recharacterized amounts will be
taxable to the Participant for the Participant's tax year in
which he or she would have received the amounts in cash.
(2) The amount of any excess contributions to be recharacterized
shall be reduced by the amount of any excess deferrals
previously recharacterized or distributed under section 4.2
for the taxable year ending in the same Plan Year, and excess
deferrals to be recharacterized or distributed under section
4.2 for a taxable year shall be reduced by excess
contributions previously distributed or recharacterized for
the Plan Year beginning in such taxable year.
26
33
Limitations on Contributions
(3) Excess Contributions shall mean, with respect to any Plan
Year, the excess of (i) the aggregate amount of employer
contributions taken into account in computing the actual
deferral percentage of Highly Compensated Employees for such
Plan Year, over (ii) the maximum amount of such
contributions permitted by the actual deferral percentage
test (determined by reducing contributions made on behalf of
Highly Compensated Employees in order of the actual deferral
percentages, beginning with the highest of such
percentages). In the case of a Highly Compensated Employee
whose actual deferral ratio is determined under the family
aggregation rules, the determination of the amount of excess
contributions shall be made by applying the "leveling" method
described in Treasury Regulations section 1.401(k)-1(f)(2) and
the excess contributions shall be allocated among the family
members in proportion to the contributions of each family
member.
(4) Recharacterized excess contributions shall continue to be
fully vested at all times and shall be subject to the
limitations on distributions described in section 7.1 with
respect to Pre-Tax Contributions.
(5) Recharacterization of excess contributions shall conform to
the requirements of Treasury Regulations section
1.401(k)-1(f)(2), which are incorporated herein by reference.
(c) DISCOUNT ON SHARES OF COMMON STOCK NOT TREATED AS PRE-TAX
CONTRIBUTION. Solely for purposes of this section 4.3, if shares of common stock
of the
27
34
Limitations on Contributions
Corporation are contributed to the Plan as a Pre-Tax Contribution at a discount
from fair market value, then the amount of such discount shall not be treated as
a Pre-Tax Contribution but shall be treated as a Matching Contribution as
described in section 4.4(c).
4.4 PERCENTAGE LIMITATION ON AFTER-TAX AND MATCHING CONTRIBUTIONS.
(a) SATISFYING THE ACTUAL CONTRIBUTION PERCENTAGE TEST. The
After-Tax Contributions and Matching Contributions made on behalf of
Participants with respect to a Plan Year shall satisfy the "actual contribution
percentage test" of section 401(m)(3) of the Code and Treasury Regulation
section 1.401(m)-1(b), the provisions of which are incorporated herein by
reference.
(b) REDUCTION AND FORFEITURE OF AFTER-TAX CONTRIBUTIONS AND
MATCHING CONTRIBUTIONS. In the event it is necessary to reduce or limit a
Participant's After-Tax Contributions and Matching Contributions to satisfy the
actual contribution percentage test, the amount of such contributions, as
adjusted for income and losses, on behalf of Highly Compensated Employees shall
be reduced in accordance with Treasury Regulation section 1.401(m)-1(e)(2), the
provisions of which are incorporated herein by reference. The reduction or
limitation shall be applied as follows:
(1) first, to After-Tax Contributions in excess of six
percent of Compensation, and then
(2) to remaining After-Tax-Contributions and Matching
After-Tax Contributions attributable thereto.
28
35
Limitations on Contributions
The amount by which a Participants After-Tax Contributions and vested Matching
Contributions are reduced shall be returned to the Highly Compensated Employees.
The amount by which a Participant's invested Matching Contributions are reduced
shall be forfeited and used to reduce contributions in accordance with section
3.10.
(c) DISCOUNT ON SHARES OF COMMON STOCK TREATED AS MATCHING
CONTRIBUTION. Solely for purposes of this section 4.4, if shares of common stock
of the Corporation are contributed to the Plan at a discount from fair market
value as a Pre-Tax Contribution, then the amount of such discount shall be
treated as a Matching Contribution.
4.5 MULTI-USE OF ALTERNATIVE LIMITATIONS. Multiple use of the
alternative limitations of sections 401(k)(3)(A)(iii)(II) and 401(m)(A)(ii) of
the Code shall be restricted in accordance with Treasury Regulation section
1.401(m)-2, the provisions of which are incorporated herein by reference.
4.6 LIMITATIONS ON ANNUAL ADDITIONS
(a) THE DEFINED CONTRIBUTION LIMIT. The "annual addition," as
defined herein, for any Plan Year to a Participant's account in all defined
contribution plans maintained by each Participating Company or Related Company
shall not exceed the lesser of (1) 25 percent of the Participant's Compensation
for the Plan Year, and (2) $30,000 (as adjusted in accordance with section
415(d) of the Code). The term "annual additions" means the sum of all
contributions and forfeitures allocated to a Participant's accounts (other than
a rollover account).
(b) THE COMBINED LIMIT. If the Participant also has participated in
a defined benefit plan maintained by a Participating Company or Related Company,
then the limitations of section 415(e) of the Code shall apply. If such
limitations are exceeded, then the benefits under
29
36
Limitations on Contributions
any defined plan maintained by the Participating Company or Related Company
shall be reduced before the annual additions to the Plan are reduced.
(c) REDUCTION OF CONTRIBUTIONS. If the Corporation Committee
determines at any time that the annual addition to any Participant's Accounts
exceeds such limitation for any Plan Year, then the contributions on behalf of
the Participant shall be reduced, to the extent necessary, in the following
order:
(1) Pre-Tax Contributions in excess of six percent of the
Participant's Compensation;
(2) Remaining Pre-Tax Contributions and Matching Pre-Tax
Contributions attributable thereto on a pro rata basis;
(3) Profit-Sharing Contributions;
(4) After-Tax Contributions in excess of six percent of the
Participant's Compensation;
(5) Remaining After-Tax Contributions and Matching
After-Tax Contributions attributable thereto on a pro
rata basis.
After-Tax Contributions, Pre-Tax Contributions and Profit-Sharing
Contributions, each as adjusted for gains, shall be returned to the Participant.
Matching Contributions, as adjusted for gains, to the extent allowable shall be
held in a suspense account and allocated to the accounts of such Participant in
the next Plan Year; provided that if the Participant is not covered by the Plan
in the next Plan Year, the amount shall be allocated to the remaining
Participants in the Plan who are employed by the Employment Unit that employed
the Participant.
30
37
Limitations on Contributions
(d) LIMITS ON LIMITS. The limits stated on this Article IV
shall apply only to the extent required under the Code. Except as otherwise
specifically provided in this section 4.6, all of the requirements of section
415 of the Code, and limitations thereon, including the transitional rules and
grandfather rules, are incorporated herein by reference.
31
38
ARTICLE V
VESTING AND FORFEITURES
-----------------------
5.1 IN GENERAL. A Participant shall have a fully vested interest at
all times in his Pre-Tax Account, After-Tax Account, Harris Stock Pre-Tax
Account, Harris Stock After-Tax Account and Savings Account (other than the
portion of such accounts attributable to matching contributions) .and Rollover
Account.
5.2 VESTING ON RETIREMENT, DEATH OR DISABILITY. A Participant shall
have a fully vested interest in his Profit Sharing Account, Matching Pre-Tax
Account, Matching After-Tax Account, Harris Stock Matching Account, and portion
of his Savings Account attributable to matching contributions, on termination of
his employment by any Related Company in the event of the Participant's:
(a) retirement on or after Early Retirement Age;
(b) retirement on after the effective date of the Participant's
Disability; or
(c) death.
5.3 VESTING ON OTHER TERMINATION OF EMPLOYMENT.
(a) VESTING SCHEDULE. A Participant who terminates employment other
than on the occurrence of one of the events described in section 5.2 shall have
a vested interest in his Profit-Sharing Account, Matching Pre-Tax Account,
Matching After-Tax Account, Harris Stock Matching Account, and the portion of
his Savings Account attributable to matching contributions in accordance with
the following schedule:
Period of Service Vested Percentage
----------------- -----------------
Less than 3 years 0%
3 years but less than 4 years 30%
4 years but less than 5 years 40%
5 years but less than 6 years 60%
6 years but less than 7 years 80%
7 years or more 100%
32
39
Vesting and Forfeitures
(b) COMPUTING A PARTICIPANT'S PERIOD OF SERVICE. All Periods of
Service shall be taken into account for purposes of subsection (a). In addition,
any prior Period of Service or Period of Severance shall be taken into account
in determining a Participant's Period of Service for purposes of subsection (a)
as provided in sections 2.3(a) and 2.3(b).
(c) VESTING ON SALE OF BUSINESS. In the event of the sale or
disposition of a business or a sale of substantially all of the assets of a
trade or business, the Corporation may, in its discretion, provide for
accelerated vesting with respect to those Participants affected by the sale.
5.4 EFFECT OF IN-SERVICE WITHDRAWALS ON A PARTICIPANT'S VESTED
PERCENTAGE.
If a Participant receives a withdrawal under Article IX or a
distribution under Article VII from his Profit-Sharing Account at a time when
the Participant has less than a fully vested interest in that account, the
dollar amount of his vested interest in his Profit-Sharing Account (X) shall be
determined at any subsequent time by the following formula:
X = P(AB + D) - D
For the purpose of applying the formula, P is the percentage of the
Participant's interest in his Profit-Sharing Account that is vested at the time
the determination is made, AB is the balance credited to the Profit-Sharing
Account at the time the determination is made, and D is the amount of the
withdrawal.
5.5 FORFEITURES.
(a) TIMING OF FORFEITURE. A Participant who terminates employment
with less than a fully vested interest in his Accounts shall forfeit the
nonvested interest on the earliest of:
33
40
Vesting and Forfeitures
(1) the date on which the Participant receives a lump sum
distribution of all or a portion of the vested interest
in such Accounts, provided that such distribution is
made no later than the close of the second Plan Year
following the year in which the Participant terminates
employment;
(2) the date on which the Participant incurs five
consecutive one-year Periods of Severance; and
(3) the earliest date allowable under the Code.
(b) EFFECT OF PARTIAL DISTRIBUTION ON A PARTICIPANT'S VESTED
PERCENTAGE. If the Participant elects to receive a lump sum distribution of less
than the full amount of his vested interest, the part of his nonvested interest
that shall be forfeited under subsection (a)(1) is the total nonvested interest
multiplied by a fraction, the numerator of which is the amount of the
distribution and the denominator of which is the total value of his vested
interest in his Accounts other than his After-Tax Account, Harris Stock
After-Tax Account and Rollover Account.
(c) EFFECT OF REEMPLOYMENT ON FORFEITURE. If a Participant incurs a
forfeiture under subsection (a)(1) and subsequently returns to employment with a
Participating Company and becomes a Participant in the Plan before incurring
five consecutive one-year Periods of Severance, then the forfeited amount shall
be restored by the Employment Unit of the Participating Company with which the
Participant is reemployed.
34
41
ARTICLE VI
ACCOUNTS AND INVESTMENTS
------------------------
6.1 ESTABLISHMENT OF ACCOUNTS. The Committee shall establish and
maintain for each Participant the following Accounts showing the Participant's
interest under the Plan:
(a) Profit-Sharing Account, which shall consist of
(1) a Basic Account to reflect the portion of
Profit-Sharing Contributions allocable to the
Participant's Compensation, and
(2) a Supplemental Account to reflect the portion of
Profit-Sharing Contributions allocable to the
Participant's Excess Compensation;
(b) Pre-Tax Account to reflect Pre-Tax Contributions made on the
Participant's behalf other than those invested in the Harris Stock Fund;
(c) After-Tax Account to reflect After-Tax Contributions made on
the Participant's behalf other than those invested in the Harris Stock Fund;
(d) Matching Pre-Tax Account to reflect Matching Pre-Tax
Contributions made on the Participant's behalf other than those invested in the
Harris Stock Fund;
(e) Matching After-Tax Account to reflect Matching After-Tax
Contributions made on the Participant's behalf other than those invested in the
Harris Stock Fund;
(f) Savings Account to reflect the Savings Contributions under the
Plan as in effect prior to July 1, 1990;
(g) Harris Stock Pre-Tax Account to reflect the portion of the
Pre-Tax Contributions made on the Participant's behalf invested in the Harris
Stock Fund;
35
42
Accounts and Investments
(h) Harris Stock After-Tax Account to reflect the portion of the
After-Tax Contributions made on the Participant's behalf invested in the Harris
Stock Fund;
(i) Harris Stock Matching Account to reflect the portion of the
Matching Pre-Tax Contributions and Matching After-Tax Contributions made on the
Participant's behalf and invested in the Harris Stock Fund; and
(j) Rollover Account to reflect the Participant's Rollover
Contributions.
6.2 INVESTMENT OF ACCOUNTS. Subject to section 6.4, each Participant
shall have the right to direct the investment of his Accounts and future
contributions to his Accounts among the Investment Funds in accordance with the
following procedures and such other procedures provided in the documents
pertaining to each Investment Fund;
(a) ELECTION PROCEDURES. Each election shall be made in accordance
with the rules and procedures established by the Corporation Committee in its
absolute discretion.
(b) ELECTIONS IN 1% INCREMENTS FOR CURRENT BALANCES. A
Participant's election with respect to his current Account balances shall be
made in increments of one percent (or such larger percentage as determined by
the Corporation Committee) of the Account balances;
(c) ELECTIONS IN 1% INCREMENTS FOR FUTURE CONTRIBUTIONS. A
Participant's election with respect to future contributions shall be made in
increments of one percent (or such larger percentage as determined by the
Corporation Committee) of the contribution (after the contribution is reduced by
any dollar amount directed into the Harris Stock Fund), provided that the
combined Pre-Tax Contributions and After-Tax Contributions invested in the
Harris Stock Fund shall equal no more than one percent (or such larger
percentage as determined by the Corporation Committee) of Compensation as
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Accounts and Investments
provided under section 6.4(a). To the extent Pre-Tax Contributions and After-Tax
Contributions are invested in the Harris Stock Fund, the Matching Contributions
attributable thereto also shall be invested in the Harris Stock Fund;
(d) CHANGING ELECTIONS. A Participant may change an investment
election at any time, provided that such change shall become effective on the
next succeeding Valuation Date. To be effective on the next succeeding Valuation
Date, an election must be made on or before the deadline established by the
Corporation Committee. If more than one election change is made on or before the
applicable deadline, the most recent election change shall be given effect.
(e) ELECTIONS APPLY TO ALL ACCOUNTS. Each of the Participant's
Accounts shall be invested among the Investment Funds in the same manner, such
that each election by a Participant with respect to the Investment Funds shall
apply to all of his Accounts in the same proportion.
(f) INVESTMENT IN BALANCED FUND ABSENT ELECTION. A Participant's
Accounts and contributions made on behalf of the Participant shall be invested
in the Balanced Fund until the Participant makes a valid investment election
pursuant to this section 6.2 and any other procedures established by the
Corporation Committee.
6.3 ALLOCATION OF EARNINGS AND LOSSES . In determining a Participant's
share of the earnings or losses of each of the Investment Funds as of any
Valuation Date, the total earnings or losses of the particular Investment Fund
since the immediately preceding Valuation Date, net of expenses allocable to
such fund, shall be allocated among the Participants' Accounts invested in the
fund on such Valuation Date based on the ratio of each Participant's Accounts to
the aggregate of the Accounts of all Participants, before taking into account
any contributions that are required to be but are not yet made as of the
Valuation Date and before taking into account any distributions, withdrawals or
loans to
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44
Accounts and Investments
Participants made as of the Valuation Date. Contributions to an Account are not
credited with earnings for the Valuation Date on which the contributions are
credited to the Account.
6.4 SPECIAL RULES CONCERNING HARRIS STOCK FUND. Notwithstanding any
provision of section 6.2 to the contrary, the rules set forth in this section
shall apply to investments in the Harris Stock Fund.
(a) AVAILABILITY. Only Pre-Tax Contributions, After-Tax
Contributions and Matching Contributions made with respect to Compensation
earned on or after October 1, 1993 may be invested in the Harris Stock Fund. For
any Plan Year, the combined Pre-Tax Contributions and After-Tax Contributions
invested in the Fund on behalf of a Participant in each Plan Year shall equal no
more than one percent (or such larger percentage as determined by the
Corporation Committee) of the Participant's Compensation for such Plan Year. The
portion of any Pre-Tax Contribution or After-Tax Contribution that is
attributable to a discount from fair market value on shares of common stock of
the Corporation shall be disregarded for purposes of the immediately preceding
sentence. An election to invest in the Harris Stock Fund shall take effect as
soon as administratively feasible after the election is received.
(b) RESTRICTIONS ON TRANSFERS. A Participant may not transfer
amounts from other Investment Funds to the Harris Stock Fund. Any contributions
invested in the Harris Stock Fund must remain in the fund for a minimum of 36
months provided that amounts invested in the Harris Stock Fund may be
distributed to the Participant before the expiration of the 36-month period, if
the Participant is otherwise entitled to a distribution under the Plan.
(c) DIVIDENDS. A Participant's allocable share of cash dividends
(and other cash earnings) credited to the Harris Stock Fund will be reinvested
in the Harris
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Accounts and Investments
Stock Fund unless the Participant elects with respect to the dividends credited
to his Account during a calendar quarter to invest such cash dividends (and
other cash earnings) among the Investment Funds other than the Harris Stock Fund
in increments of one percent (or such larger percentage as determined by the
Corporation Committee) of the amount of the dividends (and other earnings). Only
cash dividends (and earnings) that have been credited to the Participant's
Accounts for at least one month are subject to the Participant's investment
election under this section 6.4(c). Each election shall be completed in
accordance with rules and procedures as established by the Corporation Committee
pursuant to section 6.2. Dividends paid in the form of stock shall be retained
in a Participant's Account until liquidated, in the sole discretion of the
Trustee. Such liquidated dividends shall be considered cash earnings subject to
investment elections in accordance with this section 6.4(c).
(d) CONTRIBUTIONS. The normal form of contributions for amounts
invested in the Harris Stock Fund shall be in cash; provided, however, that the
Corporation, in its discretion, may make the contribution in common stock of the
Corporation, which may be contributed at a discount from fair market value. The
Trustee is authorized to purchase common stock of the Corporation on the open
market, and to give effect to the discount, if any, established from time to
time by allocating shares to each Participant's Account in addition to the
number of shares that would have been allocated to the Participant's Account if
the discount had not been established.
(e) DISTRIBUTIONS. Distributions from the Harris Stock Fund shall
be in the form of cash or shares of Harris Stock at the election of the
Participant. Fractional shares and distributions of a DE MINIMIS amount as
determined by the Corporation Committee shall be paid in cash.
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Accounts and Investments
(f) VOTING. Participants may submit non-binding proxies to the
Trustee, which will vote the shares in the Harris Stock Fund in the exercise of
its sole discretion.
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ARTICLE VII
DISTRIBUTIONS
-------------
7.1 IN GENERAL. A Participant shall be entitled to receive a
distribution of the vested interest in his Accounts on the earlier of the
Participant's (i) termination of employment and (ii) attainment of age 59 1/2,
except that his Pre-Tax Contributions and Matching Pre-Tax Contributions are
distributable only as allowed under section 401(k) of the Code. Distributions
shall be made upon the sale or disposition of the stock in a subsidiary, or the
sale or disposition of substantially all the assets of a trade or business, as
provided under the corporate documents effecting the sale or disposition and in
accordance with section 401(k)(10) of the Code. A termination of employment
shall not be deemed to occur for purposes of this section 7.1 and section 7.2
until the Participant is no longer employed by a Related Company. A Participant
may elect, in accordance with procedures established by the Corporation
Committee, to receive the sum of the balances of his Accounts, if any, that are
invested in the Harris Stock Fund either in (a) cash, or (b) in shares of common
stock of the Corporation; PROVIDED, however, that distributions of fractional
shares and de minimis amounts (as determined by the Corporation Committee) shall
be made in cash. If a Participant has elected to receive a distribution of the
balances of his Accounts that are invested in the Harris Stock Fund in shares of
common stock of the Corporation, then such distribution shall, in the discretion
of the Corporation Committee, either be made in certificated form or credited to
an account established for the Participant under a plan maintained by a Related
Company.
7.2 SMALL BENEFIT CASH-OUT. Except as provided in section 7.5, in any
case in which a Participant's vested interest in his Accounts does not (and did
not at the time of any prior distributions) exceed $3,500 (or such larger amount
as may be permitted by law), the vested
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Distributions
interest shall be paid to the Participant in a lump sum as soon as reasonably
practicable upon termination of employment.
7.3 FORM OF PAYMENT.
(a) OPTIONS. In any case in which a Participant's vested interest
in his Accounts exceeds the amount provided in section 7.2, the Participant (or
in the event of death, his Beneficiary) entitled to receive a distribution may
elect at any time to receive payment in:
(1) an amount not greater then the balance of the
Participant's Account provided, however, that only
one such payment may be made in any single month;
(2) substantially equal periodic installment payments,
payable not less frequently than annually and not
more frequently than monthly, over a period of time
to be elected by the Participant;
(3) a combination of (1) and (2); or
(4) a direct rollover pursuant to section 7.5.
(b) CHANGES ALLOWED. A Participant (or, in the event of death, his
Beneficiary) may change his election with respect to the form of payment at any
time before or after distribution of benefits commences, subject to the
provisions of section 7.9.
(c) EFFECT OF FAILURE TO SPECIFY AN OPTION. If a Participant fails
to file an election under this section 7.3., then his benefits shall be paid in
accordance with section 7.4.
7.4 TIME OF PAYMENT . On termination of employment, a Participant,
other than one described in section 7.2, may elect that payment of benefits
begin immediately or at any other time permitted under the Plan. If a
Participant fails to file an election under this section
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Distributions
7.4 and payment of benefits has not already commenced, payment of his benefits
shall commence in accordance with the provisions of section 7.9.
7.5 DIRECT ROLLOVER.
(a) A Participant or "distributee" may elect at any time to have
any portion of an "eligible rollover distribution" paid in a direct rollover to
the trustee or custodian of an "eligible retirement plan" specified by the
Participant or distributee, whichever is applicable. Payment of a direct
rollover in the form of a check payable to the trustee or custodian of an
eligible retirement plan, for the benefit of the Participant or distributee, may
be mailed to the Participant or distributee.
(b) For purposes of this section 7.5, the following terms shall have
the following meanings:
(1) "distributee" means a surviving spouse or a spouse or
former spouse who is an alternate payee under a qualified
domestic relations order defined in section 414(p) of the
Code.
(2) "eligible retirement plan" means an individual retirement
account described in section 408(a) of the Code, an
individual retirement annuity described in section 408(b)
of the Code, an annuity plan described in section 403(a) of
the Code, or a qualified trust described in section 401(a)
of the Code that accepts an eligible rollover distribution.
(3) "eligible rollover distribution" means any distribution of
all or a portion of the Participant's Accounts, other than
the portion of his After-Tax Account and Harris Stock
After-Tax Account attributable to After-Tax Contributions,
but does not include a distribution (i) in installments
over a period of ten years or more or over a period
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Distributions
described in section 7.9(c), or (ii) to the extent the
distribution is required under section 401(a)(9) of the
Code.
7.6 PAYMENTS ON DEATH . If a Participant dies before he has received
the full amount of the vested interest in his Accounts, the unpaid amount shall
be paid to his Beneficiary. If the unpaid amount does not exceed $3,500 (or such
larger amount as permitted under section 7.2), it shall be paid to the
Beneficiary as soon as reasonably practicable upon the Participant's death. If
the unpaid amount exceeds $3,500 (or such larger amount as may be permitted
under section 7.2), it shall be paid to the Beneficiary as provided in sections
7.3, 7.4 and, if the Beneficiary is the spouse, section 7.5; provided that, if
the Beneficiary fails to file an election, the unpaid amount shall be paid in a
lump sum as soon as reasonably practicable after the fifth anniversary of the
Participant's death.
7.7 BENEFIT AMOUNT AND WITHHOLDING.
(a) VESTED AMOUNT AND ADJUSTMENTS. For purposes of this Article
VII, a Participant's vested interest in his Accounts shall be determined as of
the Valuation Date coinciding with or immediately following the date of the
event giving rise to the distribution, plus any Profit-Sharing Contribution to
which the Participant may be entitled under section 3.2 that has not yet been
credited to the Participant's Profit-Sharing Account. Any unpaid amount in the
Participant's Accounts shall continue to be adjusted for earnings and losses as
provided in section 6.3 until it is distributed.
(b) WITHHOLDING. The amount of any distribution shall be reduced to
the extent necessary to comply with Federal, state and local income tax
withholding requirements.
7.8 ORDER OF DISTRIBUTIONS . Any distribution under this Plan shall be
charged against the Participant's Accounts pursuant to administrative procedures
designed to maximize the tax benefits to the Participant by distributing to him
first his After-Tax Contributions to the extent permitted by law.
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Distributions
7.9 STATUTORY REQUIREMENTS . Notwithstanding any other provisions of
the Plan to the contrary, the following rules shall apply to all payments under
the Plan:
(a) LATEST COMMENCEMENT DATE. Unless the Participant files a
written election to defer payment of benefits, benefits payments with respect to
any Participant shall commence no later than the 60th day after the close of the
Plan Year in which the latest of the following occurs:
(1) the date on which the Participant attains Normal Retirement
Age;
(2) the 10th anniversary of the date on which the Participant
commenced participation in the Plan; and
(3) the date on which the Participant terminated employment.
Failure to file an election under section 7.4 for payment of benefits
to commence shall be deemed to be a written election to defer payment of
benefits under this subsection (a).
(b) REQUIRED BEGINNING DATE. Notwithstanding subsection (a) above,
payment of benefits to a Participant shall commence no later than April 1 of the
calendar year following the calendar year in which the Participant attains age
70 1/2.
(c) MAXIMUM DURATION OF DISTRIBUTIONS. Payment of a Participant's
benefit shall be made over a period not to exceed one of the following periods:
(1) the life of the Participant;
(2) the life of the Participant and the Participant's
Beneficiary;
(3) a period certain not extending beyond the life
expectancy of the Participant; or
(4) a period certain not extending beyond the joint and last
survivor expectancy of the Participant and his
Beneficiary.
The amount to be distributed each year must be at least equal to the
quotient obtained by dividing the Participant's benefit by the life expectancy
of the Participant or the joint and last survivor expectancy of the Participant
and his Beneficiary. Life expectancy and joint and
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52
Distributions
last survivor expectancy shall be computed by the use of the return multiples
contained in Treasury Regulation section 1.72-9. For purposes of this
computation, a Participant's and a spouse's life expectancy may be recalculated
annually; however, the life expectancy of a Beneficiary, other than the
Participant's spouse, may not be recalculated. If the Participant's spouse is
not the Beneficiary, the method of distribution selected must ensure that at
least 50 percent of the present value of the amount available for distribution
is paid within the life expectancy of the Participant.
(d) DISTRIBUTION AFTER THE PARTICIPANT'S DEATH. In the event a
Participant who is receiving benefits dies, the remaining balance of his
benefits shall be distributed at least as rapidly as under the method of
distribution elected by the Participant. If a Participant dies before
distribution of benefits commences, the Participant's entire interest will be
distributed no later than five years after the Participant's death, except to
the extent that an election is made to receive distributions in accordance with
(1) or (2) below:
(1) if any portion of the Participant's benefit is payable
to a Beneficiary, installment distributions may be
made over the life or life expectancy of the
Beneficiary, provided that the installments commence
no later than one year after the Participant's death,
and
(2) if the Beneficiary is the Participant's spouse, the
commencement of distributions may be delayed until the
date on which the Participant would have attained age
70 1/2. If the spouse dies before payments begin,
subsequent distribution shall be made as if the spouse
had been the Participant.
For purposes of the foregoing, payments may be calculated by use of the
return multiples specified in Treasury Regulation section 1.72-9. The life
expectancy of a spouse or other Beneficiary shall be calculated at the time
payment first commences without subsequent recalculation. Any amount paid to a
child of the Participant shall be treated as if it had been
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Distributions
paid to the surviving spouse if the amount becomes payable to the spouse when
the child reaches the age of majority.
(e) LIMIT ON LIMITS. All distributions under this section 7.9
shall be determined and made in accordance with section 401(a)(9) of the Code,
including the minimum distribution incidental benefit requirement of proposed
Treasury Regulation section 1.401(a)(9)-2, the provisions of which are
incorporated herein by reference.
7.10 DESIGNATING BENEFICIARIES.
(a) WRITTEN DESIGNATION. Each Participant may designate, in the
manner prescribed by the Corporation Committee, a Beneficiary or Beneficiaries
to receive any benefits payable as a result of the death of the Participant.
This designation may be changed by the Participant at any time by giving notice
to the Corporation Committee in accordance with rules and procedures established
by the Corporation Committee. Any designation of a Beneficiary other than the
Participant's spouse must be consented to by the spouse in writing (or other
method permitted by the Internal Revenue Service) and witnessed by a notary
public (or a representative of the Plan prior to October 1, 1993). Any consent
required under this section 7.10 shall be valid only with respect to the spouse
who signed it. Spousal consent shall not be required if the Participant
establishes to the satisfaction of a Plan representative that such consent may
not be obtained because (a) there is no spouse; (b) the spouse cannot be
located, or (c) there exists such other circumstances as the Secretary of the
Treasury may prescribe as excusing the requirement for such consent. A
Participant may revoke any prior election without obtaining the consent of the
spouse to such revocation. In the absence of a new election that meets the
requirements of this section 7.10, the Participant's surviving spouse shall be
the Beneficiary.
(b) DEATH PRIOR TO DESIGNATING BENEFICIARY OR DEATH AFTER
DESIGNATED BENEFICIARY'S DEATH. In the event the Participant dies with no
beneficiary designation on file or after the death of a designated Beneficiary,
the Participant's Beneficiary with respect to the
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Distributions
portion of the benefits for which no Beneficiary has been designated shall be
the Participant's surviving spouse, if any, and if there is no surviving spouse,
the Participant's estate.
(c) SUCCESSOR BENEFICIARIES. A Beneficiary who has been
designated in accordance with section 7.10(a) may name a successor beneficiary
or beneficiaries in accordance with procedures established by the Corporation
Committee. If the designated Beneficiary dies after the Participant and before
the entire amount of the Participant's benefit under the Plan in which the
designated Beneficiary has an interest has been distributed, then any remaining
amount shall be distributed, as soon as practicable after the death of such
designated Beneficiary, in the form of a single sum payment to the successor
beneficiary or if there is no such successor beneficiary, to the Beneficiary's
estate.
7.11 PAYMENT OF GROUP INSURANCE PREMIUMS. If a retired Participant is
eligible to be included in any contributory group insurance program maintained
or sponsored by an Employment Unit, a retired Participant who is receiving
benefits under the Plan in installments and who elects to be covered under such
contributory group insurance program may direct that a specified portion of the
installment payments be withheld and paid by the Trustee on his behalf to the
Employment Unit as his contribution under such group insurance program. Such
direction by a retired Participant shall be in writing on a form prescribed by
the Corporation Committee. Any such direction may be revoked by the retired
Participant not less than 15 days prior to the effective date of such
revocation. Any withholding and payment of insurance costs on behalf of a
retired Participant shall be made in accordance with Treasury Regulation section
1.401(a)-13.
7.12 INABILITY TO LOCATE PARTICIPANT. If, at any time after a
Participant's benefit becomes payable, a check or other instrument in payment of
such benefit is returned unclaimed or the Corporation Committee is otherwise
unable to locate the individual to whom a payment is due, then all payments to
such individual shall be discontinued. If, after
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Distributions
exercising reasonable diligence, the Corporation Committee is unable to locate
such individual, the portion of the Participant's benefit payable to such
individual shall be forfeited and applied to reduce the administrative expenses
of the Plan; PROVIDED, that if such individual subsequently makes a claim for
benefits then the forfeited amount shall be reinstated to the extent required by
law by the Participating Company that last employed the Participant.
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56
ARTICLE VIII
LOANS
-----
8.1 IN GENERAL. Each "party in interest," as defined in section 3(14)
of ERISA, with respect to the Plan for whom a Pre-Tax Account, After-Tax Account
and/or Rollover Account is maintained may request that a loan be made to him
from his Pre-Tax Account, After-Tax Account and/or Rollover Account by filing an
appropriate application, pursuant to procedures adopted by the Corporation
Committee. All loan requests shall be approved on a reasonably equivalent basis
(within the meaning of section 4975(d)(1)(A) of the Code and section
408(b)(1)(A) of ERISA), subject to the conditions set forth in this Article
VIII.
8.2 LOAN ADMINISTRATION . The Corporation Committee shall be
responsible for administering the loan program, but may delegate the operation
of the program to the Plan's record-keeper. The procedures for applying for a
loan and the basis on which loans will be approved or denied shall be described
in the summary plan description for the Plan or in other documents prepared by
or at the direction of the Corporation for this purpose and such additional
documents are hereby incorporated by reference to the extent required by the
Department of Labor.
8.3 TERMS AND CONDITIONS OF LOANS . The terms and conditions of each
loan shall be set forth in the agreement evidencing the loan and shall include,
but not be limited to, the following:
(a) MAXIMUM AMOUNT. The principal amount of a loan made under this
Plan to any individual together with the outstanding principal amount of any
other loan made to such individual under any other qualified plan under section
401(a) of the Code maintained by a Related Company shall not exceed the least of
(1) 50 percent of the individual's vested interest in his
Accounts
50
57
Loans
(2) $50,000 reduced by the highest outstanding balance of
any previous loans from the Plan and any other plans
of a Related Company during the one-year period
ending immediately before the date on which the
current loan is made, and
(3) such amount that repayment of principal plus interest
does not exceed 25 percent of the individual's gross
pay.
(b) MINIMUM AMOUNT. The minimum loan amount shall be $500 and all
loan amounts shall be in increments of $100.
(c) PERIOD. No loan shall be made for a period less than 12 months
or longer than four and one-half years or such other periods as may be
established from time to time under the Corporation Committee's written loan
procedures.
(d) SECURITY. A loan shall be secured by the Participant's Accounts
up to the amount of the outstanding balance of the loan.
(e) NUMBER OF LOANS. Two loans shall be available under the Plan to
a Participant at any time, but no third loan shall be made to an individual
within 30 days following the repayment in full of a prior loan, or such other
time period as may be provided from time to time under Plan procedures.
(f) PARTICIPANT COVERS LOAN EXPENSES. Any loan made under the Plan
shall be subject to such other terms and conditions as the Corporation Committee
shall deem necessary or appropriate, including the condition that the individual
applying for the loan reimburse the Plan for any state documentary stamps and
other taxes, and any other reasonable expenses specified by the Corporation
Committee, which the Plan incurs to extend, make and service the loan.
(g) HOW TO APPLY. A loan may be initiated by following the
appropriate telephonic or other procedures established by the record-keeper, as
the delegate of the Corporation Committee.
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Loans
8.4 INTEREST RATE. The interest rate for a loan made under this Plan
shall be fixed for the term of each loan, and shall be set as determined by the
Corporation Committee on a quarterly basis at a rate which it deems reasonable
at the time for a fully secured loan and which is consistent with applicable
Department of Labor regulations.
8.5 REPAYMENT AND DEFAULT.
(a) PAYMENTS. A loan made under the Plan shall require that
repayment be made in substantially level installments through payroll
withholding while the individual is an Employee and through such other means
(not less frequently than quarterly) as the Corporation Committee deems
appropriate for an individual who is not an Employee. Nevertheless, any
individual who terminates employment for any reason other than retirement,
discharge or Layoff must repay all of the outstanding principal balance of his
loan, plus interest due, within 90 days of the date of termination.
(b) PREPAYMENT. An individual may repay, at any time, all of the
outstanding principal balance of his loan, plus interest due, without penalty.
(c) CREDITING PAYMENTS. Principal and interest payments shall be
credited to the Participant's Pre-Tax Account, After-Tax Account and/or Rollover
Account and shall be invested in the same manner as Pre-Tax Contributions,
After-Tax Contributions and Rollover Contributions.
(d) DEFAULT. The events of default shall be set forth in the
agreement evidencing the loan. Such events shall include, but not be limited to,
the following:
(1) an individual terminates employment as an Employee
for any reason and does not make payments when due,
subject to a 90-day grace period;
(2) the Trustee concludes that the individual no longer
is a good credit risk;
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59
Loans
(3) to the extent permissible under federal law, the
individual's obligation to repay the loan has been
discharged through bankruptcy or any other legal
process of action which did not actually result in
payment in full; and
(4) the individual does not make payments then due,
subject to the applicable 90 day grace period.
(e) EFFECT OF DEFAULT. Upon the existence or occurrence of an event
of default, the loan may become due and payable in full and, if such loan is not
actually repaid in full, shall be canceled on the books and records of the Plan
and the amount otherwise distributable to such individual shall be reduced, as
of the date his Accounts otherwise become distributable, by the principal amount
of the loan then due plus any accrued but unpaid interest. Such principal and
interest shall be determined without regard to whether the loan had been
discharged through bankruptcy or any other legal process or action which did not
actually result in payment in full; however, interest shall continue to accrue
on such loan only to the extent permitted under applicable law. Cancellation of
the amount distributable to an individual under this subsection (e) shall not
occur until a distributable event occurs under the Plan. In the event a default
occurs before a distributable event occurs, the Corporation Committee shall take
such other steps to cure the default as it deems appropriate under the
circumstances to preserve Plan assets.
8.6 MECHANICS. A loan to an individual under this Plan shall be made
from his Pre-Tax Account, After-Tax Account and Rollover Account, and the loan
shall be an asset of the respective accounts. For investment purposes, the
principal amount of the loan shall be deducted from the Participant's Investment
Funds other than the Harris Stock Fund in proportion to their value in his
Accounts as of the Valuation Date immediately preceding the loan.
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Loans
8.7 SPECIAL POWERS . The Corporation Committee shall have the power to
take such action as it deems necessary or appropriate to stop the benefit
payments to or on behalf of an individual who fails to repay a loan (without
regard to whether the obligation to repay the loan had been discharged through
bankruptcy or other legal process or action) until his Pre-Tax Account,
After-Tax Account and/or Rollover Account has been reduced by the principal due
(without regard to such discharge) on such loan or to distribute the note which
evidences such loan in full satisfaction of any interest in the Pre-Tax Account,
After-Tax Account, and/or Rollover Account which is attributable to the unpaid
balance of such loan.
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ARTICLE IX
IN-SERVICE WITHDRAWALS
----------------------
9.1 WITHDRAWALS FROM SAVINGS ACCOUNT AND AFTER-TAX ACCOUNT.
(a) AVAILABILITY. Subject to sections 9.3 and 9.4, a Participant
may elect to withdraw from the Plan at any time in a single sum an amount not
greater than the balances of his Savings Account and After-Tax Account in the
time and manner prescribed by the Corporation Committee. The amount withdrawn
shall be debited first to his Savings Account and then to his After-Tax Account.
(b) LIMITATIONS. A Participant may make a withdrawal under this
section 9.1 no more than once in any calendar quarter. A Participant's election
to make After-Tax Contributions shall be suspended, and no After-Tax
Contributions or Matching After-Tax Contributions shall be credited to the
Participant's Account, for a period of three months after the date of a
Participant's withdrawal from his After-Tax Account. The Participant's election
shall automatically be reinstated at the expiration of such three-month period,
unless the Participant has filed a change of election pursuant to section 3.7.
9.2 WITHDRAWALS FROM ROLLOVER PRE-TAX AND PROFIT SHARING ACCOUNTS.
(a) AVAILABILITY. Subject to sections 9.3 and 9.4, a Participant
who has taken all available loans under Article VIII hereof and who has
exhausted his right to withdrawals under section 9.1 may elect, if he has an
immediate and heavy financial need within the meaning of Treasury Regulation
section 1.401(k)-1(d)(2)(iv), to withdraw in a single sum an amount not greater
than (i) 100 percent of his Pre-Tax Contributions, (ii) the entire balance of
his Rollover Account, and (iii) the vested balance of his Profit Sharing
Account, in the time and manner prescribed by the Corporation Committee. A
Participant
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In-Service Withdrawals
shall be deemed to have an immediate and heavy financial need if the withdrawal
is requested for any of the following reasons:
(1) to pay expenses for medical care previously incurred
by the Participant, his spouse or any of his
dependents or necessary for these persons to obtain
medical care;
(2) to purchase (excluding mortgage payments) of a
principal residence for the Participant;
(3) to pay for tuition and related education fees for the
next 12 months of post-secondary education for the
Participant, his spouse, children or dependents;
(4) to prevent the eviction of the Participant from his
principal residence or a foreclosure on the mortgage
of the Participant's principal residence; or
(5) the occurrence of any other event determined by the
Commissioner of Internal Revenue pursuant to Treasury
Regulation section 1.401(k)-1(d)(2)(iv).
A withdrawal to satisfy an immediate and heavy financial need of the
Participant may be made only if:
(i) the withdrawal is not in excess of the amount
required to meet the financial need of the
Participant, including taxes and additions to tax
applicable to such withdrawal, and
(ii) the Participant has obtained all other distributions,
withdrawals, and all nontaxable loans currently
available under the Plan and any other plans
maintained by a Related Company.
The Participant shall be required (i) to certify to the Corporation Committee in
the manner prescribed by the Corporation Committee both the reason for the
financial need and that such need cannot be satisfied from sources other than a
withdrawal from the Participant's Accounts,
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In-Service Withdrawals
and (ii) to submit any additional supporting documentation as may be requested
by the Corporation Committee.
(b) ORDER OF WITHDRAWALS. Withdrawals under this section 9.2 shall
be withdrawn from a Participant's Accounts in the following order: (i) from the
Participant's Rollover Account, if any; (ii) to the extent that the balance of
the Participant's Rollover Account is not sufficient to satisfy the amount of
the requested withdrawal, from the Participant's Pre-Tax Contributions; and
(iii) to the extent that the Participant's Rollover Account and Pre-Tax
Contributions are not sufficient to satisfy the amount of the requested
withdrawal, from the vested balance of the Participant's Profit Sharing Account.
(c) LIMITATIONS. A Participant may take a withdrawal under this
section 9.2 no more than once in any six-month period.
9.3 CONDITIONS APPLICABLE TO ALL WITHDRAWALS . A Participant shall
provide to the Corporation Committee written notice of his election to make any
withdrawal permitted under this Article IX at least 30 days (or such shorter
period as may be designated by the Corporation Committee) prior to the date as
of which such withdrawal is to be effected. The amount available for withdrawal
under this Article IX shall be reduced by the amount of any outstanding loan
balance under Article VIII hereof, and no withdrawal under this Article IX shall
be permitted to the extent that such withdrawal would cause the aggregate amount
of such outstanding loan balance to exceed the limits described in section 8.2.
The amount available for withdrawal under this Article IX is also subject to
reduction in the sole discretion of the Corporation Committee to take into
account the investment experience of the Trust Fund between the date of the
election and the date of the withdrawal.
9.4 REDUCTION OF INVESTMENT FUND BALANCES. The Investment Funds in
which a Participant's Accounts are invested, other than the Harris Stock Fund,
shall be reduced proportionately to reflect the amount of the Participant's
withdrawals under this Article IX.
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ARTICLE X
ADMINISTRATION
--------------
10.1 NAMED FIDUCIARIES. The Corporation Committee shall be the "named
fiduciary" within the meaning of such term as used in ERISA; PROVIDED that to
the extent a Participant, former Participant or Beneficiary directs that his
Accounts be invested in the Harris Stock Fund, such Participant or Beneficiary
and not the Corporation Committee shall be the "named fiduciary" with respect to
such investment decisions.
10.2 CORPORATION COMMITTEE. The Corporation shall establish a
Corporation Committee to administer the Plan. The members of the Corporation
Committee shall be appointed, and removed at any time, by the appropriate
officers of the Corporation. A member of the Corporation Committee may resign at
any time by giving written notice to the Corporation at least 15 days prior to
the effective date of the resignation.
10.3 POWERS AND DUTIES OF COMMITTEE. The Corporation Committee shall
have the powers and duties conferred on it by the terms of the Plan. The
Corporation Committee may establish such rules and regulations as it deems
necessary to enable it to administer the Plan. The Corporation Committee shall
have the discretionary authority to determine eligibility for benefits and
construe the terms of the Plan.
10.4 ACTIONS OF COMMITTEE. No formal meeting and no minutes shall be
required with respect to actions taken by the Corporation Committee.
10.5 FINALITY OF DECISIONS. All decisions and directions made by the
Corporation Committee, in the discretionary exercise of its powers and duties,
shall be final and binding on all parties concerned.
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Administration
10.6 IMMUNITIES OF COMMITTEE. Except as otherwise provided by law, no
member of the Corporation Committee shall be liable to a Participating Company
or to any Participant or Beneficiary by reason of the Corporation Committee's
exercise in good faith of any power or discretion vested by such committee under
the terms of the Plan.
10.7 ADVISERS AND AGENTS. The Corporation, or the Corporation
Committee, with the consent of the Corporation, may employ one or more persons
to render advice with respect to any responsibility that the Corporation, or the
Corporation Committee, respectively, has under the Plan. The Corporation, or the
Corporation Committee, may appoint unrelated parties to carry out trustee,
investment management and record-keeping responsibilities with respect to the
Plan. The Corporation shall indemnify any person, including an employee of the
Corporation, who is acting on behalf of the Corporation or the Corporation
Committee in this capacity with respect to liability that may arise by reason of
his action or failure to act concerning the Plan, excepting any willful or gross
misconduct or criminal acts, to the extent required in the respective contracts
governing such arrangements.
10.8 COMMITTEE MEMBER WHO IS PARTICIPANT. A member of the Corporation
Committee who also is a Participant shall have no right to vote with respect to
any action that pertains solely to him as a Participant. In the event a majority
of the remaining members are unable to agree as to the action to be taken with
respect to the Participant, the chief executive officer of the Corporation shall
appoint an impartial person to arbitrate the matter between the remaining
members and to reach a decision.
10.9 INFORMATION PROVIDED BY PARTICIPATING COMPANIES. Each
Participating Company and Employment Unit shall provide the Corporation, the
Corporation Committee and the Trustee with complete and timely information
regarding employment data for each Employee and Participant needed by the
Corporation, Corporation Committee or Trustee to administer the Plan, including,
but not limited to, information concerning Compensation, date of
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Administration
employment, date of termination of employment, reason for termination and any
other information required by the Corporation, Corporation Committee, or
Trustee.
10.10 EXPENSES. All costs and expenses incurred in administering the
Plan and the Trust, including the expenses of the Corporation Committee,
investment advisory and record-keeping fees, the fees of counsel and any agents
for the Company, the fees and expenses of the Trustee, the fees of counsel for
the Trustee and other administrative expenses shall be paid by the Trustee from
the Trust Fund to the extent that such expenses are not paid by the
Participating Companies. The Corporation Committee, in its sole discretion,
having regard for the nature of the particular expense, shall determine the
portion of such expense, if any, which is to be borne by any Participating
Company. A Participating Company may seek reimbursement of any expense paid by
such company that the Corporation Committee determines is properly payable by
the Trust Fund.
10.11 TRUST. A trust shall be created by the execution of the Trust
Agreement between the Corporation and the Trustee. All contributions under the
Plan shall be paid to the Trustee. The Trustee shall hold all monies and other
property received by it and invest and reinvest the same, together with the
income therefrom, on behalf of the Participants collectively in accordance with
the provisions of the Trust Agreement. The Trustee shall make distributions from
the Trust Fund at such time or times to such person or persons and in such
amounts as the Corporation Committee directs in accordance with the Plan.
10.12 TRUST FUND AVAILABLE TO PAY ALL PLAN BENEFITS . The Plan is
intended to be a single plan under Treasury Regulation section 1.414(l)-l(b)(1).
The maintenance of Accounts as required by the terms of the Plan shall be for
record-keeping purposes only. All of the Trust Fund shall be available to pay
benefits to all Participants and Beneficiaries.
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ARTICLE XI
AMENDMENT AND TERMINATION AND CHANGE OF CONTROL
-----------------------------------------------
11.1 AMENDMENT. The Corporation reserves the right to amend the Plan
by action of its Board of Directors or the Retirement Plan Investment Committee
thereof at any time and from time to time, subject to the following limitations:
(a) no amendment shall be made which vests in any Participating
Company any interest in any assets of the Plan other than as specifically
provided in section 11.2;
(b) no amendment shall be made which would have the effect of
decreasing a Participant's "accrued benefit" as proscribed in section 411(d)(6)
of the Code; and
(c) no amendment shall have the effect of reducing a Participant's
vested interest in his Accounts. If the Plan is amended to change the vesting
schedule, each Participant with at least a three-year Period of Service shall
have the right to elect to have his vested interest computed without regard to
the amendment. Each Participant shall be permitted to make this election during
the period ending 60 days after the latest of the date (1) the amendment is
adopted; (2) the amendment is effective, and (3) the Participant is issued a
written notice of the amendment by the Corporation or its delegate.
11.2 TERMINATION OF PLAN. This Plan is intended to be permanent, and it
is the expectation of the Corporation that it will continue indefinitely.
However, the Corporation reserves the right to terminate the Plan by resolution
of its Board of Directors or the appropriate committee thereof. In the case of a
complete termination of the Plan, previously unallocated forfeitures shall be
allocated as otherwise provided in the Plan. To the extent previously
unallocated forfeitures cannot be allocated because all Participants have
reached the limitations of section 415 of the Code, the unallocated amount shall
revert back to the appropriate Participating Company, as provided in section
3.10.
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Amendment and Termination and Change of Control
11.3 DISCONTINUANCE OF CONTRIBUTIONS. The Corporation reserves the
right to discontinue contributions to the Plan by amendment or by resolution of
the Board of Directors or the appropriate committee thereof.
11.4 VESTING ON TERMINATION OR DISCONTINUANCE OF CONTRIBUTIONS. As of
the date of the partial or complete termination of the Plan or upon the complete
discontinuance of contributions to the Plan, each affected Participant shall
become fully vested in his Accounts and no further allocations of contributions
or forfeitures shall be made after such date on behalf of an affected
Participant.
11.5 DISTRIBUTION ON TERMINATION. Upon the complete termination of the
Plan, the Trustee shall distribute to each affected Participant the full amount
standing to the credit of his Accounts; provided that if such amount exceeds (or
at the time of any prior distribution exceeded) $3,500 (or such larger amount as
may be permitted by law) and the Participant is not yet age 65, such lump sum
shall not be paid without his consent. If the Participant does not consent, an
annuity contract shall be purchased for and distributed to the Participant.
11.6 CHANGE OF CONTROL.
(a) DEFINITION. Change in Control means the occurrence of any one
of the following events:
(i) any "person" (as such term is defined in section 3(a)(9)
of the Securities Exchange Act of 1934 (the "Exchange Act") and as used in
sections 13(d)(3) and 14(d)(2) of the Exchange Act) is or becomes a "beneficial
owner" (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Corporation representing 20 percent or more of
the combined voting power of the Corporation's then outstanding securities
eligible to vote for the election of the Board of Directors (the "Board") of the
Corporation (the "Corporation Voting Securities"); PROVIDED HOWEVER, that the
event described in this paragraph (i) shall not be deemed to be a Change in
Control by virtue of any of the
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Amendment and Termination and Change of Control
following acquisitions: (A) by the Corporation or any Subsidiary, (B)
by any employee benefit plan sponsored or maintained by the Corporation or any
Subsidiary, (C) by any underwriter temporarily holding securities pursuant to an
offering of such securities, (D) pursuant to a "Non-Control Transaction" (as
defined in paragraph (iii)) or (E) pursuant to any acquisition by a corporate
officer of the Corporation or any group of persons including the corporate
officer;
(ii) individuals who, on July 1, 1996, constitute the Board
(the "Incumbent Directors") cease for any reason to constitute at least a
majority of the Board, provided that any person becoming a director subsequent
to July 1, 1996, whose election or nomination for election was approved by a
vote of at least two-thirds of the Incumbent Directors who remain on the Board
(either by a specific vote or by approval of the proxy statement of the
Corporation in which such person is named as a nominee for director, without
objection to such nomination) shall also be deemed to be an Incumbent Director;
PROVIDED, HOWEVER, that no individual initially elected or nominated as a
director of the Corporation as a result of an actual or threatened election
contest with respect to directors or any other actual or threatened solicitation
of proxies or consents by or on behalf of any person other than the Board shall
be deemed to be an Incumbent Director;
(iii) the consummation of a merger, consolidation, share
exchange or similar form of corporate reorganization of the Corporation or any
such type of transaction involving the Corporation or any of its Subsidiaries
that requires the approval of the Corporation's stockholders (whether for such
transaction or the issuance of securities in the transaction or otherwise) (a
"Business Combination"), unless immediately following such Business Combination:
(A) more than 80 percent of the total voting power of the corporation resulting
from such Business Combination (including, without limitation, any corporation
which directly or indirectly has beneficial ownership of 100 percent of the
Corporation Voting Securities) eligible to elect directors of such corporation
is represented by shares that were Corporation Voting Securities immediately
prior to such Business Combination (either by remaining outstanding or being
converted), and such voting power is in substantially the same
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Amendment and Termination and Change of Control
proportion as the voting power of such Corporation Voting Securities immediately
prior to the Business Combination, (B) no person (other than any publicly traded
holding company resulting from such Business Combination, any employee benefit
plan sponsored or maintained by the Corporation (or the corporation resulting
from such Business Combination)), becomes the beneficial owner, directly or
indirectly, of 20 percent or more of the total voting power of the outstanding
voting securities eligible to elect directors of the corporation resulting from
such Business Combination, and (C) at least a majority of the members of the
board of directors of the corporation resulting from such Business Combination
were Incumbent Directors at the time of the Board's approval of the execution of
the initial agreement providing for such Business Combination (any Business
Combination which satisfies the conditions specified in (A), (B) and (C) shall
be deemed to be a "Non-Control Transaction"); or
(iv) the stockholders of the Corporation approve a plan of
complete liquidation or dissolution of the Corporation or the direct or indirect
sale or other disposition of all or substantially all of the assets of the
Corporation and its Subsidiaries.
Notwithstanding the foregoing, a Change in Control of the Corporation
shall not be deemed to occur solely because any person acquires beneficial
ownership of more than 20 percent of the Corporation Voting Securities as a
result of the acquisition of Corporation Voting Securities by the Corporation
which reduces the number of Corporation Voting Securities outstanding, PROVIDED
THAT if after such acquisition by the Corporation such person becomes the
beneficial owner of additional Corporation Voting Securities that increases the
percentage of outstanding Corporation Voting Securities beneficially owned by
such person, a Change in Control of the Corporation shall then occur.
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Amendment and Termination and Change of Control
For purposes of the definition of a "Change of Control", the term
"Subsidiary" shall mean any corporation or other entity in which the Corporation
has a direct or indirect ownership interest of 50 percent or more of the total
combined voting power of the then outstanding securities of such corporation or
other entity entitled to vote generally in the election of directors or in which
the Corporation has the right to receive 50 percent or more of the distribution
of profits or 50 percent of the assets on liquidation or dissolution.
Notwithstanding any other provisions of the Plan to the contrary, if a
Change in Control occurs, then during the period commencing on the date of
acquisition of said voting power, control of the Board, or consummation of a
Business Combination, and ending at the close of business on the last day of the
Fiscal Year that includes such date (the "Restriction Period"), the provisions
of this section 11.6 shall apply.
(b) EFFECT. During the Restriction Period, the Plan may not be
terminated or amended to the extent the amendment would:
(1) reduce coverage under the Plan;
(2) reduce the amount of Profit-Sharing Contributions
required to be made for the Plan Year ending on the
last day of the Restriction Period;
(3) reduce the amount of After-Tax Contributions
eligible for a matching contribution that a
Participant is permitted to make or the amount of
the Matching After-Tax Contributions required under
sections 3.5 and 3.6; or
(4) reduce the amount of Pre-Tax Contributions that a
Participant is permitted to make or the amount of
Matching Pre-Tax Contributions required under
sections 3.3 and 3.4.
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Amendment and Termination and Change of Control
(c) For the purpose of computing the amount of the
Profit-Sharing Contributions for the twelve-month period ending on the last day
of a Restriction Period, the adjusted consolidated net income of the Corporation
and its Consolidated Subsidiaries before net income taxes for the Fiscal Year
ending on such date is deemed to be the forecast of the consolidated net income
of the Corporation and its Consolidated Subsidiaries for such Fiscal Year as set
forth in the annual operating plan of the Corporation for such Fiscal Year.
(d) During the Restriction Period, any person who was an
Employee on the day preceding the first day of the Restriction Period shall be
deemed to be an Employee so long as he is employed by a member of a "controlled
group of corporations" which includes, or by a trade or business that is under
common control with (as those terms are defined in sections 414(b) and (c) of
the Code) the Corporation, any corporation which is the survivor of any merger
or consolidation to which the Corporation was a party, or any corporation into
which the Corporation has been liquidated.
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ARTICLE XII
MISCELLANEOUS PROVISIONS
------------------------
12.1 RESTRICTIONS ON ALIENATION; QUALIFIED DOMESTIC RELATIONS ORDERS.
Except as otherwise may be required for Federal, state or local income tax
withholding purposes, no benefit or interest under this Plan shall be subject to
assignment or alienation, either voluntarily or involuntarily. The preceding
sentence shall apply to the creation, assignment or recognition of a right to
any benefit payable with respect to a Participant pursuant to a domestic
relations order, unless such order is determined by the Corporation Committee to
be a "qualified domestic relations order", as defined in section 414(p) of the
Code. In accordance with uniform and nondiscriminatory procedures established by
the Corporation Committee from time to time, the Corporation Committee upon the
receipt of a domestic relations order which seeks to require the distribution of
a Participant's Account in whole or in part to an "alternate payee" (as that
term is defined in section 414(p)(8) of the Code) shall:
(1) promptly notify the Participant and such "alternate payee" of
the receipt of such order and of the procedure which the Corporation Committee
will follow to determine whether such order constitutes a "qualified domestic
relations order" within the meaning of section 414(p) of the Code,
(2) determine whether such order constitutes a "qualified domestic
relations order" and notify the Participant and the "alternate payee" of the
results of such determination, and
(3) if the Corporation Committee determines that such order does
constitute a "qualified domestic relations order," distribute to such "alternate
payee" under the terms of such order the amount called for under the order in a
single sum within 60 days of the date such order is determined to constitute a
"qualified domestic relations order," without regard to whether a distribution
would be permissible to the Participant at such time under this Plan.
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Miscellaneous Provisions
The determination and the distribution made by, or at the direction of,
the Corporation Committee under this section 13.1 shall be final and binding on
the Participant and on all other persons interested in such order. An "alternate
payee" under this section 13.1 shall not be an eligible person for purposes of
obtaining a loan pending the distribution of such alternate payee's entire
interest under this Plan.
12.2 EXCLUSIVE BENEFIT REQUIREMENT. Except as provided in sections
12.2, 13.1 and 13.3, no assets of the Plan shall revert to a Participating
Company or be used for or diverted to purposes other than providing benefits to
Participants and their Beneficiaries and defraying reasonable costs of
administering the Plan.
12.3 RETURN OF CONTRIBUTIONS.
(a) MISTAKE OF FACT. Any contribution made by a Participating
Company due to a mistake of fact shall be returned to the Participating Company
within one year of the date the contribution was made.
(b) NONDEDUCTIBLE CONTRIBUTIONS. In the event the deduction of a
contribution made by a Participating Company is disallowed under section 404 of
the Code, such contribution (to the extent disallowed) shall be returned to the
Participating Company within one year of the disallowance of the deduction.
12.4 NO CONTRACT OF EMPLOYMENT. Neither the establishment and
maintenance of the Plan nor the participation in the Plan by any Employee shall
be construed as a contract between the Employee and any Participating Company so
as to give any Employee the right to be retained by any Participating Company,
or to interfere with the rights of any Participating Company to discharge the
Employee at any time.
12.5 PAYMENT OF BENEFITS ON INCAPACITY. In the event the Corporation
Committee determines that any person to whom a distribution is to be made is
unable to care for his
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Miscellaneous Provisions
affairs by reason of illness or other disability, any amount distributable to
such person (unless prior claim thereto shall have been made by a duly qualified
guardian or other legal representative) may, in the discretion of the
Corporation Committee, be paid to such other person deemed by the Corporation
Committee to be responsible for such person. Any such payment made under this
section 13.5 shall constitute a complete discharge of any liability under this
Plan.
12.6 MERGER. In the event of a merger or consolidation with, or
transfer of assets or liabilities to any other plan, each Participant shall
receive a benefit immediately after such merger, consolidation or transfer (if
the Plan then terminated) which is at least equal to the benefit the Participant
was entitled to receive immediately before such merger, consolidation or
transfer (if the Plan had then terminated).
12.7 CONSTRUCTION. The headings and subheadings in this Plan have been
inserted for convenience of reference only and are to be ignored in the
construction of its provisions. Wherever appropriate, the masculine shall be
read as the feminine, the plural as the singular, and the singular as the
plural. References in this Plan to a section shall be to a section in this Plan
unless otherwise indicated. References in this Plan to a section of the Code,
ERISA or any other federal law shall also refer to the regulations issued under
such section.
12.8 GOVERNING LAW. This Plan shall be construed, to the extent to
which state law is applicable, in accordance with the laws of the State of
Florida. Venue for any action arising under this Plan shall be in Brevard
County, Florida.
12.9 MISTAKEN PAYMENTS. If a mistake is made in favor of a Participant
Beneficiary or alternate payee in the payment of benefits under this Plan, then
the Corporation or the Trustee (acting at the Corporation direction and on
behalf of the Plan) shall take such action against such Participant, Beneficiary
or alternate payee to remedy such mistake and to make
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the Plan whole as the Corporation deems proper and appropriate under the
circumstances, and any mistake in favor of the Plan shall promptly be corrected
by, or at the direction of, the Corporation Committee.
HARRIS CORPORATION
Date: February 26, 1998 By: /s/ D.S. Wasserman
------------------------- ----------------------------------
Attest: /s/ Scott T. Mikuen Title: Vice President - Treasurer
----------------------- -------------------------------
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APPENDIX A
INVESTMENT FUNDS. The Investment Funds available under the plan as of January 1,
1998 are as follows:
(a) BALANCED Fund. Assets held in this fund will be invested in a variety
of stocks, bonds, mortgages, fixed-income securities such as U.S.
Treasury bills, certificates of deposit, commercial paper and real
estate.
(b) SHORT-TERM BOND FUND. Assets in this fund will be invested in
shorter-term fixed-income securities such as government bonds, U.S.
Treasury bills and notes, certificates of deposit, federal agency
obligations, mortgage securities and corporate bonds.
(c) MONEY MARKET FUND. Assets in this fund will be invested in a
diversified portfolio of high-quality, short-term fixed instruments
such as U.S. Treasury bills, federal agency obligations, commercial
paper, certificates of deposit and banker's acceptances.
(d) STABLE VALUE FUND. Assets held in this fund will be invested in a
diversified portfolio of investment contracts and short-term,
high-quality fixed income instruments that guarantee principal and a
specified rate of return for a specified period.
(e) EQUITY INCOME FUND. Assets held in this fund will be invested
primarily in dividend-paying common stocks of established companies
but may also be invested in convertible bonds and/or convertible
preferred stock.
(f) INDEXED EQUITY FUND. Assets held in this fund will be invested in a
stock portfolio that mirrors the Standard & Poor's 500 Stock Index.
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78
(g) GROWTH FUND. Assets in this fund will be invested for the longer
term, primarily in common stocks of companies which are currently
experiencing an above-average rate of earnings growth. The fund's
stock selection criteria include a requirement that each company have
a five-year average performance record of sales, earnings, dividend
growth, pre-tax margins, return on equity.
(h) HARRIS STOCK FUND. Assets in this fund will be invested in common
stock of the Corporation.
The Investment Funds may be changed at any time and from time to time.
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APPENDIX B
PARTICIPATING COMPANIES
-----------------------
As of January 1, 1998, the Related Companies that are Participating
Companies are:
Harris Corporation
R.F. Communications, Inc.
Harris Technical Services Corporation
Harris International Sales Corporation
Harris International Systems, Inc.
Baseview Products, Inc.
B-1