FOURTH AMENDED AND RESTATED DEFERRED COMPENSATION PLAN

Exhibit 10.4

 

Best Buy

Fourth Amended and Restated

Deferred Compensation Plan

Master Plan Document

 

Effective April 1, 2004

 

 

BEST BUY

FOURTH AMENDED AND RESTATED

DEFERRED COMPENSATION PLAN

 

Effective April 1, 2004

 

Purpose

 

The purpose of this Plan is to provide specified benefits to a select group of management and highly compensated Employees and Directors who contribute materially to the continued growth, development and future business success of Best Buy Co., Inc., a Minnesota corporation, and its subsidiaries.  This Plan shall be unfunded for tax purposes and for purposes of Title I of ERISA.

 

The Plan was initially adopted effective as of April 1, 1998.  The Plan was amended and restated effective each of October 1, 1998, July 1, 1999 and January 1, 2001, and was amended effective January 1, 2003.  The Plan is being amended and restated effective April 1, 2004 (i) to change the name of the Plan, (ii) to change the date for commencement of participation in the Plan for new Participants, and (iii) to make certain other clarifying modifications.

 

ARTICLE 1

Definitions

 

For purposes of this Plan, unless otherwise clearly apparent from the context, the following phrases or terms shall have the following indicated meanings:

 

1.1                                  “Account Balance” shall mean, with respect to a Participant, a credit on the records of the Company equal to the sum of (i) the Deferral Account balance, (ii) the vested Company Contribution Account balance and (iii) the vested Company Matching Account balance.  The Account Balance, and each other specified account balance, shall be a bookkeeping entry only and shall be utilized solely as a device for the measurement and determination of the amounts to be paid to a Participant, or his or her designated Beneficiary, pursuant to this Plan.

 

1.2                                  “Accounting Firm” shall have the meaning set forth in Section 3.8.

 

1.3                                  “Annual Deferral Amount” shall mean that portion of a Participant’s Base Annual Salary, Bonus and Directors Fees that a Participant elects to have, and is deferred, in accordance with Article 3, for any one Plan Year.  In the event of a Participant’s Retirement, Disability (if deferrals cease in accordance with Section 8.1), death or a Termination of Employment prior to the end of a Plan Year, such year’s Annual Deferral Amount shall be the actual amount withheld prior to such event.

 

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1.4                                  “Base Annual Salary” shall mean the annual cash compensation relating to services performed during any calendar year, whether or not paid in such calendar year or included on the Federal Income Tax Form W-2 for such calendar year, excluding bonuses, commissions, overtime, fringe benefits, stock options, relocation expenses, incentive payments, non-monetary awards, directors fees and other fees, automobile and other allowances paid to a Participant for employment services rendered (whether or not such allowances are included in the Employee’s gross income).  Base Annual Salary shall be calculated before reduction for compensation voluntarily deferred or contributed by the Participant pursuant to all qualified or non-qualified plans of any Employer and shall be calculated to include amounts not otherwise included in the Participant’s gross income under Code Sections 125, 402(e)(3), 402(h), or 403(b) pursuant to plans established by any Employer; provided, however, that all such amounts will be included in compensation only to the extent that, had there been no such plan, the amount would have been payable in cash to the Employee.

 

1.5                                  “Beneficiary” shall mean one or more persons, trusts, estates or other entities, designated in accordance with Article 9, that are entitled to receive benefits under this Plan upon the death of a Participant.

 

1.6                                  “Beneficiary Designation Form” shall mean the form established from time to time by the Committee that a Participant completes, signs and returns to the Committee to designate one or more Beneficiaries.

 

1.7                                  “Board” shall mean the board of directors of the Company.

 

1.8                                  “Bonus” shall mean any compensation, in addition to Base Annual Salary relating to services performed during any calendar year, whether or not paid in such calendar year or included on the Federal Income Tax Form W-2 for such calendar year, payable to a Participant as an Employee under any Employer’s bonus and cash incentive plans, excluding stock options.

 

1.9                                  “Business Day” shall mean any day other than Saturday, Sunday or any legal holiday observed by the New York Stock Exchange.

 

1.10                            “Change in Control” shall mean the first to occur of any of the following events:

 

(a)                                   Any “person” (as that term is used in Section 13 and 14(d)(2) of the Securities Exchange Act of 1934 (“Exchange Act”)) becomes the beneficial owner (as that term is used in Section 13(d) of the Exchange Act), directly or indirectly, of fifty percent (50%) or more of the Company’s capital stock entitled to vote in the election of directors;

 

(b)                                  During any period of not more than two consecutive years, not including any period prior to the adoption of this Plan, individuals who at the beginning of such period constitute the board of directors of the Company, and any new director (other than a

 

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director designated by a person who has entered into an agreement with the Company to effect a transaction described in clause (a), (c), (d) or (e) of this Section) whose election by the board of directors or nomination for election by the Company’s stockholders was approved by a vote of at least three-fourths (¾ths) of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved, cease for any reason to constitute at least a majority thereof;

 

(c)                                   The shareholders of the Company approve any consolidation or merger of the Company, other than a consolidation or merger of the Company in which the holders of the common stock of the Company immediately prior to the consolidation or merger hold more than fifty percent (50%) of the common stock of the surviving corporation immediately after the consolidation or merger;

 

(d)                                  The shareholders of the Company approve any plan or proposal for the liquidation or dissolution of the Company; or

 

(e)                                   The shareholders of the Company approve the sale or transfer of all or substantially all of the assets of the Company to parties that are not within a “controlled group of corporations” (as defined in Code Section 1563) in which the Company is a member.

 

1.11                            “Claimant” shall have the meaning set forth in Section 14.1.

 

1.12                            “Code” shall mean the Internal Revenue Code of 1986, as it may be amended from time to time.

 

1.13                            “Committee” shall mean the committee described in Article 12.

 

1.14                            “Company” shall mean Best Buy Co., Inc., a Minnesota corporation, and any successor to all or substantially all of the Company’s assets or business.

 

1.15                            “Company Contribution Account” shall mean (i) the sum of the Participant’s Company Contribution Amounts, plus or minus (ii) amounts credited or debited in accordance with all the applicable crediting and debiting provisions of this Plan that relate to the Participant’s Company Contribution Account, less (iii) all distributions made to the Participant or his or her Beneficiary pursuant to this Plan that relate to the Participant’s Company Contribution Account.

 

1.16                            “Company Contribution Amount” shall mean, for any one Plan Year, the amount determined in accordance with Section 3.5.

 

1.17                            “Company Matching Account” shall mean (i) the sum of all of a Participant’s Company Matching Amounts,  plus or minus (ii) amounts credited or debited in accordance with all the

 

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applicable crediting and debiting provisions of this Plan that relate to the Participant’s Company Matching Account, less (iii) all distributions made to the Participant or his or her Beneficiary pursuant to this Plan that relate to the Participant’s Company Matching Account.

 

1.18                            “Company Matching Amount” for any one Plan Year shall be the amount determined in accordance with Section 3.6.

 

1.19                            “Deduction Limitation” shall mean the following described limitation on a benefit that may otherwise be distributable pursuant to the provisions of this Plan.  Except as otherwise provided, this limitation shall be applied to all distributions that are “subject to the Deduction Limitation” under this Plan.  If the Company determines in good faith prior to a Change in Control that there is a reasonable likelihood that any compensation paid to a Participant for a taxable year of the Employer would not be deductible by the Employer solely by reason of the limitation under Code Section 162(m), then to the extent deemed necessary by the Company to ensure that the entire amount of any distribution to the Participant pursuant to this Plan prior to the Change in Control is deductible, the Company may defer all or any portion of a distribution under this Plan.  Any amounts deferred pursuant to this limitation shall continue to be credited/debited with additional amounts in accordance with Section 3.9 below, even if such amount is being paid out in installments.  The amounts so deferred and amounts credited thereon shall be distributed to the Participant or his or her Beneficiary (in the event of the Participant’s death) at the earliest possible date, as determined by the Company in good faith, on which the deductibility of compensation paid or payable to the Participant for the taxable year of the Employer during which the distribution is made will not be limited by Code Section 162(m), or if earlier, the effective date of a Change in Control.  Notwithstanding anything to the contrary in this Plan, the Deduction Limitation shall not apply to any distributions made after a Change in Control.

 

1.20                            “Deferral Account” shall mean (i) the sum of all of a Participant’s Annual Deferral Amounts, plus or minus (ii) amounts credited or debited in accordance with all the applicable crediting and debiting provisions of this Plan that relate to the Participant’s Deferral Account, less (iii) all distributions made to the Participant or his or her Beneficiary pursuant to this Plan that relate to his or her Deferral Account.

 

1.21                            “Director” shall mean any member of the board of directors of any Employer.

 

1.22                            “Directors Fees” shall mean the annual fees paid by any Employer, including retainer fees and meetings fees, as compensation for serving on the board of directors.

 

1.23                            “Disability” shall mean a period of disability during which a Participant qualifies for permanent disability benefits under the Participant’s Employer’s long-term disability plan, or, if a Participant does not participate in such a plan, a period of disability during which the Participant would have qualified for permanent disability benefits under such a plan had the Participant been a participant in a plan, as determined in the sole discretion of the

 

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Committee.  If the Participant’s Employer does not sponsor such a plan, or discontinues to sponsor such a plan, Disability shall be determined by the Committee in its sole discretion.

 

1.24                            “Disability Benefit” shall mean the benefit set forth in Article 8.

 

1.25                            “Election Form and Plan Agreement” shall mean the form(s) established from time to time by the Committee that a Participant completes, signs and returns (or completes and submits online) to the Committee to indicate participation in the Plan and/or to make an election under the Plan. The terms of any Election Form and Plan Agreement may be different for any Participant, and any Election Form and Plan Agreement may provide additional benefits not set forth in the Plan or limit the benefits otherwise provided under the Plan; provided, however, that any such additional benefits or benefit limitations must be agreed to by the Company, the Employer and the Participant.

 

1.26                            “Employee” shall mean a person who is an employee of any Employer.   The term “Employee” does not include any person performing services purportedly as an independent contractor, consultant, or “leased” worker, even if such person alleges or is found to be a “common-law employee” of the Company and/or any of its subsidiaries, and such persons are not eligible to participate in the Plan.

 

1.27                            “Employer(s)” shall mean the Company and/or any of its subsidiaries (now in existence or hereafter formed or acquired) whose Employees and/or Directors have been selected by the Board to participate in the Plan.

 

1.28                            “ERISA” shall mean the Employee Retirement Income Security Act of 1974, as it may be amended from time to time.

 

1.29                            “401(k) Plan” shall be that certain Best Buy Retirement Savings Plan dated October 1, 1990 and adopted by the Company, as it may be amended from time to time.

 

1.30                            “In-Service Distribution” shall mean the payout set forth in Section 4.1.

 

1.31                            “Participant” shall mean any Employee or Director (i) who is selected to participate in the Plan, (ii) who elects to participate in the Plan, (iii) who properly completes and submits an Election Form and Plan Agreement and a Beneficiary Designation Form, (iv) whose Election Form and Plan Agreement and Beneficiary Designation Form are accepted by the Committee, (v) who commences participation in the Plan, and (vi) whose Election Form and Plan Agreement has not terminated.  A spouse or former spouse of a Participant shall not be treated as a Participant in the Plan or have an Account Balance under the Plan, even if he or she has an interest in the Participant’s benefits under the Plan as a result of applicable law or property settlements resulting from legal separation or divorce.

 

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1.32                            “Plan” shall mean the Company’s Deferred Compensation Plan, which shall be evidenced by this instrument, as it may be amended from time to time.

 

1.33                            “Plan Year” shall mean a period beginning on January 1 of each calendar year and continuing through December 31 of such calendar year.

 

1.34                            “Pre-Retirement Survivor Benefit” shall mean the benefit set forth in Article 6.

 

1.35                            “Quarterly Installment Method” shall be a quarterly installment payment over the number of quarters selected by the Participant in accordance with this Plan, calculated as follows: The Account Balance of the Participant shall be calculated as of the close of business on the last business day of the quarter.  The quarterly installment shall be calculated by multiplying this balance by a fraction, the numerator of which is one, and the denominator of which is the remaining number of quarterly payments due the Participant.  By way of example, if the Participant elects a forty (40) quarter Annual Installment Method, the first payment shall be one-fortieth (1/40th) of the Account Balance, calculated as described in this definition.  The following quarter, the payment shall be one-thirty-ninth (1/39th) of the Account Balance, calculated as described in this definition.  Each quarterly installment shall be paid on or as soon as practicable after the last business day of the applicable quarter.  Unless the Committee determines otherwise, quarterly installment payments shall be drawn on a pro-rata basis from each of the applicable Measurement Funds used to determine amounts to be credited or debited to the Participant’s Account Balance pursuant to Section 3.9 below.

 

1.36                            “Retirement”, “Retire(s)” or “Retired” shall mean, with respect to an Employee, severance from employment from all Employers for any reason other than a leave of absence, death or Disability on or after the attainment of age sixty (60); and shall mean with respect to a Director who is not an Employee, severance of his or her directorships with all Employers on or after the attainment of age seventy (70).  If a Participant is both an Employee and a Director, Retirement shall not occur until he or she Retires as both an Employee and a Director, which Retirement shall be deemed to be a Retirement as a Director; provided, however, that such a Participant may elect, at least five years prior to Retirement and in accordance with the policies and procedures established by the Committee, to Retire for purposes of this Plan at the time he or she Retires as an Employee, which Retirement shall be deemed to be a Retirement as an Employee.

 

1.37                            “Retirement Benefit” shall mean the benefit set forth in Article 5.

 

1.38                            “Termination Benefit” shall mean the benefit set forth in Article 7.

 

1.39                            “Termination of Employment” shall mean the severing of employment with all Employers, or service as a Director of all Employers, voluntarily or involuntarily, for any reason other than Retirement, Disability, death or an authorized leave of absence.  If a Participant is both an Employee and a Director, a Termination of Employment shall occur only upon the

 

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termination of the last position held; provided, however, that such a Participant may elect, at least five years before cessation of employment with all Employers and in accordance with the policies and procedures established by the Committee, to be treated for purposes of this Plan as having experienced a Termination of Employment at the time he or she ceases employment with all Employers as an Employee.

 

1.40                            “Trust” shall mean one or more trusts established pursuant to that certain Master Trust Agreement, dated as of April 1, 1998 between the Company and the trustee named therein, as amended from time to time.

 

1.41                            “Unforeseeable Financial Emergency” shall mean an unanticipated emergency that is caused by an event beyond the control of the Participant that would result in severe financial hardship to the Participant resulting from (i) a sudden and unexpected illness or accident of the Participant or a dependent of the Participant, (ii) a loss of the Participant’s property due to casualty, or (iii) such other extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant, all as determined in the sole discretion of the Committee.

 

1.42                            “Withdrawal Amount” shall mean the payout set forth in Section 4.4.

 

1.43                            “Years of Service” shall mean the total number of years in which a Participant has been employed by one or more Employers, as defined in Article IV of the 401(k) Plan.

 

ARTICLE 2

Selection, Enrollment, Commencement of Participation

 

2.1                                  Selection by Committee .   Participation in the Plan shall be limited to a select group of management and highly compensated Employees and Directors of the Employers, as determined by the Committee in its sole discretion.  From that group, the Committee shall select, in its sole discretion, Employees and Directors to participate in the Plan.

 

2.2                                  Enrollment Requirements .   As a condition to participation, each selected Employee or Director shall complete, sign and return (or complete and submit online, to the extent available) to the Committee an Election Form and Plan Agreement and a Beneficiary Designation Form, all within thirty (30) days after he or she is selected to participate in the Plan.  In addition, the Committee shall establish from time to time such other enrollment requirements as it determines in its sole discretion are necessary.

 

2.3                                  Commencement of Participation .   Provided an Employee or Director selected to participate in the Plan has met all enrollment requirements set forth in this Plan and required by the Committee, including returning all required documents to the Committee within the specified time period, such Employee or Director shall commence participation in the Plan as soon as

 

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administratively practicable after the date on which such Employee or Director completes all enrollment requirements; provided, that no Employee may commence participation in the Plan prior to the first day of the calendar month coincident with or immediately following sixty (60) days of continuous employment with any Employer.  If an Employee or a Director fails to meet all such requirements within the period required, in accordance with Section 2.2, that Employee or Director shall not be eligible to participate in the Plan until the first day of the pay period commencing in the Plan Year following the delivery to and acceptance by the Committee of the required documents.

 

2.4                                  Termination of Participation and/or Deferrals .   If the Committee determines in good faith that a Participant no longer qualifies as a member of a select group of management or highly compensated employees, as membership in such group is determined in accordance with Sections 201(2), 301(a)(3) and 401(a)(1) of ERISA, the Committee shall have the right, in its sole discretion, to (i) terminate any deferral election the Participant has made for the remainder of the Plan Year in which the Participant’s membership status changes, (ii) prevent the Participant from making future deferral elections and/or (iii) immediately distribute the Participant’s then Account Balance as a Termination Benefit subject to Article 7 and terminate the Participant’s participation in the Plan.

 

ARTICLE 3

Deferral Commitments/Company Matching/Crediting/Taxes

 

3.1                                  Minimum Deferral .   There is no minimum amount for deferral of Base Annual Salary, Bonus or Director’s Fees under the Plan. If no election is made, the amount deferred shall be zero.

 

3.2                                  Maximum Deferral .

 

(a)                                   Base Annual Salary, Bonus and Directors Fees . For each Plan Year, a Participant may elect to defer, as his or her Annual Deferral Amount, Base Annual Salary, Bonus and/or Directors Fees up to the following maximum percentages for each deferral elected:

 

 

(b)                                  Notwithstanding the foregoing, if a Participant first becomes a Participant after the first day of a Plan Year, the maximum Annual Deferral Amount, with respect to Base Annual Salary, Bonus and Directors Fees shall be limited to the amount of

 

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compensation not yet earned by the Participant as of the date the Participant submits an Election Form and Plan Agreement to the Committee for acceptance.

 

3.3                                  Election to Defer; Effect of Election Form and Plan Agreement .

 

(a)                                   First Plan Year .   In connection with a Participant’s commencement of participation in the Plan, the Participant shall make an irrevocable deferral election for the Plan Year in which the Participant commences participation in the Plan, along with such other elections as the Committee deems necessary or desirable under the Plan. For these elections to be valid, the Election Form and Plan Agreement must be completed by the Participant and timely delivered to the Committee (in accordance with Section 2.2 above) and accepted by the Committee.

 

(b)                                  Subsequent Plan Years .  For each succeeding Plan Year, the Participant shall make an irrevocable deferral election for that Plan Year, and such other elections as the Committee deems necessary or desirable under the Plan.  For these elections to be valid, the Election Form and Plan Agreement must be completed by the Participant and timely delivered to the Committee, in accordance with its rules and procedures, before the end of the Plan Year preceding the Plan Year for which the election is made.  If no such Election Form and Plan Agreement is timely delivered for a Plan Year, the Annual Deferral Amount shall be zero for that Plan Year.

 

(c)                                   Effect of Termination on Pending Election .   Upon the occurrence of a Termination of Employment, any pending election shall be automatically terminated.

 

3.4                                  Withholding of Annual Deferral Amounts .   For each Plan Year, the Base Annual Salary portion of the Annual Deferral Amount shall be withheld from each regularly scheduled Base Annual Salary payroll in equal amounts, as may be adjusted from time to time for increases and decreases in Base Annual Salary.  The Bonus and/or Directors Fees portion of the Annual Deferral Amount shall be withheld at the time the Bonus or Directors Fees are or otherwise would be paid to the Participant, whether or not this occurs during the Plan Year itself.

 

3.5                                  Company Contribution Amount .   For each Plan Year, the Company, in its sole discretion, may, but is not required to, credit any amount it desires to any Participant’s Company Contribution Account under this Plan, which amount shall be for that Participant the Company Contribution Amount for that Plan Year.  The amount so credited to a Participant may be smaller or larger than the amount credited to any other Participant, and the amount credited to any Participant for a Plan Year may be zero, even though one or more other Participants receive a Company Contribution Amount for that Plan Year.  The Company Contribution Amount, if any, shall be credited as of the date(s) selected by the Company.

 

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3.6                                  Company Matching Amount .   For each Plan Year, the Company, in its sole discretion, may, but is not required to, credit to any Participant’s Company Matching Account a Company Matching Amount for any Plan Year equal to a percentage of all or a portion of the Participant’s Annual Deferral Amount for such Plan Year.  Such Company Matching Amount may, but need not be, coordinated with any matching contribution made to the 401(k) Plan on the Participant’s behalf for the plan year of the 401(k) Plan that corresponds to the Plan Year. The Company Matching Amount, if any, shall be credited as of the date(s) selected by the Company, which may, but need not be, the same date(s) that matching contributions are credited under the 401(k) Plan.

 

3.7                                  Investment of Trust Assets .   The trustees of the Trust shall be authorized, upon written instructions received from the Committee or investment manager appointed by the Committee, to invest and reinvest the assets of the Trust in accordance with the applicable trust agreements, including the disposition of Company stock and reinvestment of the proceeds in one or more investment vehicles designated by the Committee.

 

3.8                                  Vesting .

 

(a)                                   A Participant shall at all times be one hundred percent (100%) vested in his or her Deferral Account.

 

(b)                                  A Participant shall be vested in his or her Company Contribution Account, if any, and any earnings credited thereon pursuant to Section 3.9 below, in accordance with the vesting schedule established by the Company in its sole discretion.

 

(c)                                   A Participant shall be vested in his or her Company Matching Account, and any earnings credited thereon pursuant to Section 3.9 below, as follows: (i) with respect to all benefits under this Plan other than the Termination Benefit, a Participant’s vested Company Matching Account shall equal one hundred percent (100%) of such Participant’s Company Matching Account; and (ii) with respect to the Termination Benefit, a Participant’s Company Matching Account shall vest on the basis of the Participant’s Years of Service at the time the Participant experiences a Termination of Employment, in accordance with the following schedule:

 

 

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(d)                                  Notwithstanding anything to the contrary contained in this Section 3.8 except subsection (e), in the event of either (i) a Change in Control, or (ii) a termination of the Plan as described in Section 11.1 below, a Participant’s Company Contribution Account and Company Matching Account shall immediately become one hundred percent (100%) vested (if it is not already vested in accordance with the above vesting schedules).

 

(e)                                   Notwithstanding subsection (d), the vesting schedule for a Participant’s Company Contribution Account and Company Matching Account shall not be accelerated upon a Change in Control to the extent that the Committee determines that such acceleration would cause the deduction limitations of Section 280G of the Code to become effective.  In the event that all of a Participant’s Company Contribution Account and/or Company Matching Account is not vested pursuant to such a determination, the Participant may request independent verification of the Committee’s calculations with respect to the application of Section 280G.  In such case, the Committee must provide to the Participant within fifteen (15) business days of such a request an opinion from a nationally recognized accounting firm selected by the Participant (the “Accounting Firm”).  The opinion shall state the Accounting Firm’s opinion that any limitation in the vested percentage hereunder is necessary to avoid the limits of Code Section 280G and contain supporting calculations.  The cost of such opinion shall be paid for by the Company.

 

3.9                                  Crediting/Debiting of Account Balances .   In accordance with, and subject to, the rules and procedures that are established from time to time by the Committee, in its sole discretion, amounts shall be credited or debited to a Participant’s Account Balance, which solely for purposes of this Section 3.9 shall include the Participant’s Company Contribution Account and Company Matching Account regardless of vesting status,  in accordance with the following rules:

 

(a)                                   Election of Measurement Funds .   A Participant, in connection with his or her initial deferral election in accordance with Section 3.3(a) above, shall elect, on the Election Form and Plan Agreement, one or more Measurement Fund(s) (as described in Section 3.9(c) below) to be used to determine the additional amounts to be credited or debited to his or her Account Balance for the first day in which the Participant commences participation in the Plan and continuing thereafter for each subsequent day in which the Participant participates in the Plan, unless changed in accordance with the next sentence. Commencing with the first day that follows the Participant’s commencement of participation in the Plan and continuing thereafter for each subsequent day in which the Participant participates in the Plan, the Participant may (but is not required to) elect, by submitting an Election Form and Plan Agreement to the Committee that is accepted by the Committee, to add or delete one or more Measurement Fund(s) to be used to determine the additional amounts to be credited or debited to his or her Account Balance, or to change the portion of his or her

 

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Account Balance allocated to each previously or newly elected Measurement Fund. The Participant may change the percentage of future contributions to be invested in each Measurement Fund and/or elect to have all or part the Participant’s previously invested Account Balance transferred among the Measurement Funds at any time. If an election is made in accordance with this Subsection (a), it shall be effective as soon as administratively practicable after the election is made.  Generally, an election shall become effective on the day such election is made if such election is received before 3:00 PM CT on any Business Day, and any election received after 3:00 PM CT on a Business Day, or any election received on a day other than a Business Day, shall be effective as of the next Business Day.  Any election shall continue thereafter for each subsequent day in which the Participant participates in the Plan, unless changed in accordance with this Subsection (a).

 

(b)                                  Proportionate Allocation .   In making any election described in Section 3.9(a) above, the Participant shall specify on the Election Form and Plan Agreement, in increments of one percentage point (1%), the percentage of his or her Account Balance to be allocated to a Measurement Fund (as if the Participant was making an investment in that Measurement Fund with that portion of his or her Account Balance).

 

(c)                                   Measurement Funds . The Participant may elect one or more measurement funds described in the Election Form and Plan Agreement and/or accompanying Plan enrollment materials, based on certain mutual funds (the “Measurement Funds”), for the purpose of crediting or debiting additional amounts to his or her Account Balance. As necessary, the Committee may, in its sole discretion, discontinue, substitute or add a Measurement Fund.  Each such action will take effect as of the first day of the calendar month that follows by thirty (30) days the day on which the Committee gives Participants advance written notice of such change.

 

(d)                                  Crediting or Debiting Method .   The performance of each elected Measurement Fund (either positive or negative) will be determined by the Committee, in its reasonable discretion, based on the performance of the Measurement Funds themselves.  A Participant’s Account Balance shall be credited or debited on a daily basis based on the performance of each Measurement Fund selected by the Participant, as determined by the Committee in its sole discretion, as though (i) a Participant’s Account Balance were invested in the Measurement Fund(s) selected by the Participant, in the percentages applicable to such day, at the closing price on such date; (ii) the portion of the Annual Deferral Amount that was actually deferred during any day were invested in the Measurement Fund(s) selected by the Participant, in the percent