EDS 401(K) PLAN

EXHIBIT 10.3

EDS 401(k) PLAN

(Amended and Restated Document - January 1, 2003)

(Conformed copy reflecting Amendments One through Six)

TABLE OF CONTENTS

 

 

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EDS 401(k) PLAN

(Amendment and Restatement effective January 1, 2003)

THIS amended and restated employee benefit plan is adopted on this 20th day of December, 2002, by Electronic Data Systems Corporation, a company organized pursuant to the laws of the State of Delaware, with its principal office in Plano, Collin County, Texas.

ARTICLE 1

INTRODUCTION

1.1 Creation . By authorization of its Board of Directors (“Board”), the Company adopted the EDS Deferred Compensation Plan and Trust (the “Plan”), effective July 1, 1983, a qualified profit-sharing plan with provisions pursuant to section 401(k) of the Internal Revenue Code of 1954. The Plan shall be administered under the supervision of the Benefits and Compensation Committee for the sole benefit of the Employee Participants and their Beneficiaries, and no part of the Trust shall ever revert to the Company or any Employer, except as hereinafter provided in Article 4 (Contributions).

1.2 Amendment and Restatement . The initial Plan document was first amended and restated effective July 1, 1984. In accordance with the intentions of the Plan and in order to secure and maintain the initial qualification of the Plan and Trust in compliance with the applicable provisions of the Internal Revenue Code of 1986, as amended (the “Code”), it was determined that the Plan should again be completely amended and restated. The Plan has been amended since then as necessary to comply with changes in applicable law and to make certain changes to the design and operation of the Plan. This amendment and restatement of the Plan is adopted as a complete amendment of the Plan as initially created and qualified without a lapse in coverage, time or effect as a qualified Plan.

1.3 Purpose . The purpose of the Plan is to provide Employees with a retirement savings program through which they may elect to defer a portion of their salaries which their Employer will contribute to the Trust pursuant to the provisions herein. Further, the Company intends to provide the Employees with an additional incentive and retirement security by providing a uniform and nondiscriminatory plan through which contributions may be accumulated and distributed to Participants or their Beneficiaries in the case of the disability, death, attainment of age fifty-nine and one-half (59-1/2), or retirement of a Participant, as hereinafter provided. Subject to the powers reserved herein to amend and terminate the Plan, the Plan has been adopted by the Company with the intention of creating a permanent and continuing plan for the exclusive benefit of the Employees and their Beneficiaries.

1.4 Merger . This amendment and restatement reflects the merger of the Unigraphics Solutions, Inc. 401(k) Plan (the “UGS Plan”) and the A.T. Kearney, Inc. Profit Sharing and 401(k) Retirement Plan (the “ATK Plan”) into this Plan, which mergers are effective January 1, 2003. All of the provisions of the ATK Plan and the UGS Plan are expressly incorporated herein by this reference for purposes of determining the amount, allocation of and limitations on any

 

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contributions that are made to this Plan for the benefit of the ATK Plan Participants and the UGS Plan Participants for the plan years ended December 31, 2002. For purposes of determining the amount and allocation of all contributions relating to plan years beginning on and after January 1, 2003, the provisions of the ATK Plan and UGS Plan shall no longer apply and the provisions of this Plan shall control. In addition to the foregoing, effective December 17, 2004, the Wendover Funding, Inc. Savings Plus Plan (the “Wendover Plan”) is merged into this Plan and each person’s account in the Wendover Plan shall be transferred to and maintained under this Plan in accordance with its terms provided that such transferred Wendover Plan accounts shall not be available for distributions, loans or withdrawals, and shall not be subject to a former Wendover Plan participant’s investment directions, until December 20, 2004 or such later date as the Plan Administrator determines is necessary.

ARTICLE 2

DEFINITIONS

2.1 Definitions . The following words shall, when used herein, have the following meanings unless the context indicates otherwise:

(1) Account Manager means a Fiduciary appointed by the Investment Committee pursuant to Section 9.9 (Duties and Authorities of the Investment Committee) to manage any or all assets of the Plan not otherwise managed by Investment Managers.

(2) Actual Deferral Percentage is defined in Section 4.4(b) (Limitation on Elective Contributions for Highly Compensated Employees).

(3) Actual Contribution Percentage is defined in Section 4.5(b) (Limitation on Employer Matching Contributions).

(4) Adjustment means, as of any Valuation Date, the gains and income minus the losses and the expenses, costs or fees actually incurred and paid from the Trust since the immediately preceding Valuation Date.

(5) Aggregation Group means two or more plans of any Controlled Group Member aggregated pursuant to the aggregation rules of Code Section 416 in order to determine whether such plans, as a group, are Top-Heavy Plans. The Aggregation Group must include any Qualified Plan sponsored by a Controlled Group Member in which a Key Employee also participates as of the Determination Date or any of the four (4) preceding Plan Years. Additionally, the Aggregation Group must include any other Qualified Plan of a Controlled Group Member which covers a Key Employee and any other Qualified Plan which enables any Qualified Plan covering a Key Employee to meet the qualification requirements pursuant to the coverage and anti-discrimination rules set forth in Code Sections 401(a)(4) and 410(b).

(6) Alternate Payee shall have the same meaning as set forth in Code Section 414(p)(8).

 

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(7) Annual Addition shall mean, for any Limitation Year, the amount allocated to a Participant’s Individual Account which is attributable to contributions paid by an Employer to the Trustee and any forfeitures for a particular Plan Year. Annual Additions shall not include Rollover Contributions, but shall include the following:

(i) employer contributions, including Elective Contributions;

(ii) employee contributions;

(iii) forfeitures; and

(iv) contributions during the Limitation Year allocated to any individual medical benefit account (within the meaning of Code Sections 415(l) and 419A(d)(2)) that is established for the Participant.

(8) Annuity Starting Date shall mean the first day of the first period for which an amount is paid as an annuity or, if payable in a form other than an annuity, the first day on which all events have occurred which entitle the Participant to such benefit under the Plan, but in no event is the Annuity Starting Date earlier than a Participant’s separation from Service.

(9) ATK Plan Participant shall mean any person who was a participant in the ATK Plan on December 31, 2002 and whose account in the ATK Plan was transferred to this Plan in connection with the merger of the ATK Plan into this Plan.

(10) Beneficiary (also Designated Beneficiary) shall mean such person, or a trust created for the benefit of such a person, or the Participant’s estate, whoever or whichever is entitled to receive benefits hereunder in the event of the Participant’s death prior to the complete distribution of the balance credited to such Participant’s Individual Account.

(11) Benefit Credit shall mean amounts that would be credited to an eligible Participant’s Personal Pension Account, as defined in the EDS Retirement Plan, pursuant to Section 5.2 of the EDS Retirement Plan, determined without regard to any choice election made under Section 5.8 of that plan.

(12) Benefit Dollars shall mean those dollars provided by an Employer to an Employee during a calendar year for the purposes of purchasing certain welfare or fringe benefits through a cafeteria plan maintained by the Company pursuant to Code Section 125. The term Benefit Dollars shall not include any portion of Employer-provided dollars which are not actually used by the Employee to purchase welfare and fringe benefits and are treated as income taxable to the Employee.

 

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(13) Benefits Administration Committee means the committee set forth in Section 9.2.

(14) Choice Allocation Account shall mean the portion of a Participant’s Individual Account consisting of Choice Allocation Contributions allocated to such Participant pursuant to Section 5.4 (Allocation of Employer Contributions), together with Adjustments thereto, plus, in the case of a UGS Plan Participant, the amount of choice allocation contributions that are transferred to this Plan on behalf of such Participant as a result of the merger of the UGS Plan into this Plan.

(15) Choice Allocation Contribution shall mean a contribution made by an Employer pursuant to Section 4.1(c) (Employer Contributions).

(16) Company shall mean Electronic Data Systems Corporation, a corporation established under the laws of the State of Delaware, its successors and assigns.

(17) Compensation shall mean for all purposes under the Plan except as otherwise provided in this section 2.1(17), total earnings prior to withholding, as reported on Internal Revenue Service Form W-2, paid to any Employee by an Employer. Compensation shall be increased by Elective Contributions made to any Qualified Plan maintained by an Employer or Controlled Group Member on behalf of such Employee. Compensation shall exclude the following:

(i) amounts not included in income pursuant to a salary deferral election made pursuant to a cafeteria plan described in Code Section 125 or, effective for Plan Years beginning on or after January 1, 2001, pursuant to a salary reduction agreement under Code Section 132(f)(4);

(ii) extraordinary expenses such as moving expenses, overseas living allowances, imputed value of group life insurance or such other similar amounts and any benefits provided through a welfare benefit fund;

(iii) Benefit Dollars;

(iv) payments in the form of Employer Stock; and

(v) severance payments and benefits.

For purposes of applying the limitations of Section 5.6 and the provisions of Article 12; for purposes of determining whether an individual is a Highly Compensated Employee pursuant to Section 2.1(50); and for purposes of applying the limitations described in Sections 4.4 and 4.5; Compensation means an Employee’s Compensation required to be reported under Code Sections 6041 and 6051 (i.e., Box 1 Compensation) but determined without regard to any rules that limit remuneration included in wages based on the nature or location of the employment or the services performed, increased, effective January 1, 1998 for purposes of applying the limitations of Section 5.6 and the provisions of Article

 

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12 and January 1, 2002 for all other purposes, by amounts excluded from compensation in lieu of benefits under a cash or deferred arrangement under Code Section 401(k), a cafeteria plan under Code Section 125 or, effective for Plan Years beginning on or after January 1, 2001, a salary reduction agreement under Code Section 132(f)(4); provided; however, that in lieu of the definition of Compensation set forth herein, the Benefits Administration Committee may elect an alternative definition of compensation permitted under Treasury regulations for purposes of applying the limitations described in Sections 4.4 and 4.5.

Notwithstanding anything herein to the contrary, for purposes of calculating an ATK Participant’s allocation of Employer Matching Contributions and Choice Allocation Contributions, Compensation shall not include any awards or payments under the 1996 Incentive Plan of Electronic Data Systems Corporation (or any predecessor or successor plan), the A.T. Kearney, Inc. Intellectual Capital Recognition Program and the A.T. Kearney Enhanced Leave of Absence program.

The maximum amount of Compensation that may be taken into account each Plan Year shall not exceed $200,000 (or $150,000 effective for Plan Years beginning prior to January 1, 2002), as adjusted pursuant to Code Section 401(a)(17).

(18) Compensation and Benefits Committee shall mean the subcommittee of the Board of Directors of the Company authorized to carry out such duties as determined by the Board of Directors and set forth in the Plan and Trust Agreement.

(19) Computation Period shall mean any twelve-consecutive-month period commencing or ending on the dates specified herein.

(20) Controlled Group Member shall mean a company which is a member of a controlled group of companies, a group of trades or businesses under common control or an affiliated service group as defined, respectively, in Code Sections 414(b), (c) and (m), of which an Employer is also a member, and any other entity required to be aggregated with an Employer pursuant to Code Section 414(o). For purposes of Section 5.8, Controlled Group Member shall be determined pursuant to Code Sections 414(b), (c), (m) and (o) as amended by Code Section 415(h).

(21) Credited Service is defined in Section 3.3 (Credited Service).

(22) Customer shall mean any entity for which an Employer provides any trade, goods, or services.

(23) Date of Employment shall mean the date on which an Employee first performs an Hour of Service for an Employer.

(24) Date of Reemployment shall mean the date an Employee first performs an Hour of Service for an Employer after a termination of Service.

 

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(25) Defined Benefit Plan means a plan as defined in ERISA section 3(35).

(26) Defined Contribution Plan  means a plan as defined in ERISA section 3(34).

(27) Determination Date is defined in Section 12.1 (Top-Heavy Provisions).

(28) Discretionary Profit Sharing Contribution Account shall mean the amount of nonelective contributions that are transferred to this Plan on behalf of an ATK Participant as a result of the merger of the ATK Plan into this Plan as well as any such contributions made to this Plan pursuant to Section 1.4 for the 2002 plan year.

(29) Disability means a disability which entitles a Participant to benefits under the Company’s long-term disability plan.

(30) Disability Leave of Absence means an Employee’s absence from active employment with an Employer by reason of Disability.

(31) EDS Retirement Plan shall mean the EDS Retirement Plan, effective July 1, 1998.

(32) EDS Stock Fund is defined in Section 8.2 (Direction of Investments).

(33) Effective Date of this restatement of the Plan is January 1, 2003 except where otherwise specified or where an earlier effective date is legally required.

(34) Election Date shall mean the date an Employee elects to participate in the Plan in accordance with Section 3.2 (Participation).

(35) Elective Contribution shall mean any amounts contributed on behalf of a Participant by an Employer on account of a Participant’s Salary Reduction Agreement made pursuant to Section 4.2 (Elective Contributions).

(36) Elective Contribution Account shall mean the portion of a Participant’s Individual Account consisting of the Elective Contribution allocated to such Participant pursuant to Section 5.4 (Allocation of Employer Contributions), together with Adjustments thereto, plus, in the case of an ATK Plan Participant or UGS Plan Participant, the amount of elective contributions that are transferred to this Plan on behalf of such Participant as a result of the mergers of the ATK Plan and the UGS Plan into this Plan as well as any such contributions that are made to this Plan pursuant to Section 1.4 for the 2002 plan year.

(37) Employee means a person employed by an Employer and on the payroll of an Employer, who, effective prior to July 1, 1998, does not participate in any other

 

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defined contribution plan as defined in ERISA Section 3(34). Unless otherwise expressly stated, no provision of the Plan shall apply to an Employee any earlier than the effective date of his or her Employer’s participation in the Plan as set forth on Schedule E.

(i) The term “Employee” shall include (A) any Expatriate assigned to any Non-US Subsidiary Company who, while assigned to such Non-US Subsidiary Company, is not eligible to participate in any plan maintained by such Non-US Subsidiary Company on behalf of its employees into which the Non-US Subsidiary Company makes contributions and (B) any citizen of a country other than the United States who is employed by an Employer within the United States.

(ii) The term “Employee” shall not include the following:

(A) nonresident aliens who are not subject to United States Federal income taxation on Compensation;

(B) resident aliens who are not subject to United States Federal income taxation on Compensation;

(C) any person eligible to participate in the EDS Puerto Rico Savings Plan;

(D) any leased employee or any person who performs services for an Employer pursuant to an arrangement wherein the person is designated as a consultant or independent contractor. For purposes of this subparagraph, the term “leased employee” means, effective for Plan Years beginning on or after January 1, 1997, any person who is not employed by an Employer but who provides services performed under the primary direction or control of the Employer and pursuant to an agreement between the Employer and a third party; and

(E) any individual whose employment is transferred from a non-US subsidiary of A.T. Kearney, Inc. to A.T. Kearney, Inc. and who by special agreement with such non-US subsidiary remains eligible to participate in its pension or retirement plan or any individual who is employed by A.T. Kearney, Inc. and who pursuant to an agreement waives participation in the Plan.

(iii) Notwithstanding anything herein to the contrary, all persons described above who are not considered an Employee are not eligible to participate in the Plan even if such persons are retroactively re-classified as an Employee by any court, the Internal Revenue Service or any other federal, state or administrative agency, even if such persons otherwise meet the eligibility provisions contained in this Plan but for these exclusions.

 

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(iv) Notwithstanding anything herein or in a prior Plan document to the contrary, for the period from July 1, 1983, to December 31, 2001, the term “Employee” includes any citizen of a country other than the United States who is employed by an Employer within the United States, including holders of permits issued pursuant to 8 U.S.C. § 1101 et seq. (commonly referred to as holders of green cards and work visas).

(38) Employer means, collectively or individually, as the context may indicate, the Company and any other organization which has satisfied all requirements as a signatory to the Plan and Trust Agreement pursuant to Article 11 (Provisions Relative to Employers Included in the Plan).

(39) Employer Matching Contribution shall mean a contribution made by an Employer pursuant to Section 4.1(b) (Employer Contributions).

(40) Employer Matching Contribution Account shall mean the portion of a Participant’s Individual Account consisting of the Employer Matching Contribution allocated to such Participant pursuant to Section 5.4 (Allocation of Employer Contributions), together with the Adjustments thereto, plus, in the case of a UGS Plan Participant, the amount of special contributions and Unigraphics Solutions, Inc. and Electronic Data Systems Corporation matching contributions that are transferred to this Plan on behalf of such Participant as a result of the merger of the UGS Plan into this Plan as well as any special and matching contributions that are made to this Plan pursuant to Section 1.4 for the 2002 plan year.

(41) Employer Stock means the common stock, par value $0.01 per share, of Electronic Data Systems Corporation and any other security which is a Qualifying Employer Security, as such term as defined in Code Section 4975(e)(8), of Electronic Data Systems Corporation.

(42) Employment Year means any twelve (12) consecutive month period beginning on an Employee’s date of employment or any subsequent anniversary thereof.

(43) Equalization Bonus is defined in Appendix B.

(44) Expatriate means any Employee of the Company who, as a requirement of a temporary assignment, is located at the site of a Non-US Subsidiary Company and who has completed the necessary documentation as may be required of Expatriates by the Company.

(45) Fiduciary means any Employer, the Trustee, the Compensation and Benefits Committee, the Investment Committee, the Benefits Administration Committee, Participants, to the extent provided herein, and any individual, corporation or other entity which assumes responsibilities of the aforementioned in respect to the management or operation of the Plan or the investment or disposition of any assets held in the Trust.

 

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(46) Fifty Percent (50%) Joint and Survivor Annuity is defined in Section 6.5(b)(i) (Distribution of Benefits).

(47) Forfeiture is defined in Section 6.9 (Forfeiture Occurs and Restoration of Non-Vested Accrued Benefit) and Section 9.16 (Missing Persons).

(48) Hardship is defined in Section 7.2 (Special Hardship Withdrawal).

(49) Highly Compensated Employee , as determined pursuant to Code Section 414(q) and the Regulations thereunder, means, effective for Plan Years beginning on or after January 1, 1997, any Employee of any employer required to be aggregated pursuant to the aggregation rules of Code Section 414(b), (c), (m) or (o), who:

(i) Was a 5-percent owner (as defined in Code Section 416(i)(1)) at any time during the Plan Year or the twelve-month period preceding the Plan Year; or

(ii) Had Compensation in excess of $80,000 (or such greater amount as results from adjustment by the Secretary of the Treasury in the same manner as under Code Section 415(d)) for the preceding Plan Year.

(50) Hour of Service shall be determined and credited in the manner set forth in Department of Labor Regulation Section 2530.200-2(b) and (c). The provisions of this subsection shall be construed so as to resolve any ambiguities in favor of crediting an Employee with Hours of Service. Except as otherwise provided by any law or regulation cited in this subsection, an Hour of Service shall mean:

(i) Each hour for which an Employee is compensated, or entitled to compensation, for the performance of duties for the Employer during the applicable Employment Year;

(ii) Each hour for which disputed compensation, irrespective of mitigation of damages, is either awarded or agreed to by the Employer, provided, however, that the same Hours of Service shall not be credited under any other subsection herein, and that crediting of Hours of Service for compensation awarded or agreed to with respect to periods described in subparagraph (iii) below shall be subject to the limitation set forth in such subsection; and,

(iii) Each hour for which an Employee is compensated, or entitled to compensation, by the Employer for a period of time when no duties were performed for the Employer by the Employee for reason of vacation, holiday,

 

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illness, incapacity, disability, layoff, jury duty, military duty, or leave of absence. For purposes of this subsection:

(A) For periods prior to July 1, 1998, no more than five hundred and one (501) Hours of Service are required to be credited to an Employee during any single continuous period during which no duties are performed whether or not such continuous period occurs during one Employment Year;

(B) Hours of Service are not required to be credited to the Employee for which such Employee is directly or indirectly compensated, or entitled to compensation, on account of a period during which no duties are performed, if such payment is made or due pursuant to a plan maintained solely for the purpose of complying with applicable workers’ compensation or unemployment compensation or disability insurance laws:

(C) Hours of Service are not required to be credited to the Employee for a payment which wholly reimburses an Employee for medical or medically related expenses incurred by the Employee; and

(D) For periods prior to July 1, 1998, the Employer or Controlled Group Member shall determine Hours of Service by substituting forty-five (45) Hours of Service for each week in which the Employee would otherwise have been credited with one (1) Hour of Service.

(iv) For periods prior to July 1, 1998, for purposes of this Section, a Participant who is absent from work for reason of a Permitted Absence is to be considered to have completed either the number of hours that normally would have been credited if such absence has not occurred or eight (8) Hours of Service for each normal work day during the absence. In no event shall more than five hundred and one (501) Hours of Service be treated as completed pursuant to this Section.

(A) If such crediting is necessary to prevent a One-Year Break-in-Service for the Computation Period in which the Permitted Absence began, then such Hours of Service to be credited pursuant to this Section shall be credited to a Computation Period commencing on the date which the Permitted Absence begins. In all other instances the crediting of Hours of Service pursuant to this Section shall apply to the Computation Period immediately following the Computation Period in which the Permitted Absence begins.

 

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(B) For any Participant who is absent from work for more than twelve (12) consecutive months because of a Permitted Absence, the Computation Period commencing on the first anniversary of the first date of such Permitted Absence shall be treated as neither a period of service nor a period of absence.

(51) Individual Account means the detailed record kept of the items and amounts credited or charged to each Participant in accordance with the terms hereof. Such Individual Account includes, as applicable, an Elective Contribution Account, an Employer Matching Contribution Account, a Choice Allocation Account, a Discretionary Profit Sharing Contribution Account, a Prior Employer Voluntary Contribution Account, a Prior Employer Non-Elective Contribution Account, a Prior Employer Matching Contribution Account, a Prior Employer Elective Contribution Account, a Prior Employer Rollover Account and a Rollover Account.

(52) Investment Committee means the committee set forth in Section 9.3.

(53) Investment Date  means the date as of which Elective Contributions are delivered to the Trustee.

(54) Investment Funds is defined in Section 9.9 (Duties and Authorities of the Investment Committee).

(55) Investment Manager shall mean any Fiduciary as defined in ERISA Section 3(38) appointed by the Investment Committee pursuant to Section 9.9 (Duties and Authorities of the Investment Committee).

(56) Key Employee as determined pursuant to Code Section 416(i) and the Regulations thereunder, is any person who is at any time during the Plan Year, or, effective only for Plan Years beginning prior to January 1, 2002, during any of the four preceding Plan Years was:

(i) an officer of the Employer or a Controlled Group Member whose Compensation is more than $130,000 (or fifty percent (50%) of the amount set out in Code Section 415(b)(1)(A) for any such Plan Year for Plan Years beginning prior to January 1, 2002),

(ii) effective only for Plan Years beginning prior to January 1, 2002, one of the ten (10) Employees having Compensation from the Employer of more than the limitation set forth in Code Section 415(c)(1)(A) and owning or considered owning within the meaning of Code Section 318, the largest interests in the Company,

(iii) a five percent (5%) owner of the Employer or a Controlled Group Member, or,

 

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(iv) a one percent (1%) owner of the Employer or a Controlled Group Member having Compensation of more than $150,000.

(57) Leave of Absence means an Employee’s absence from active employment with an Employer by reason of leave granted in conformity with the Employer’s policy other than a Disability Leave of Absence or a Permitted Absence.

(58) Limitation Year shall mean the Plan Year or any other twelve (12) consecutive month period adopted pursuant to a written resolution of the Board of Directors.

(59) Named Fiduciaries are defined and designated in Section 9.11 (Named Fiduciaries and Allocation of Responsibilities).

(60) Non-Key Employee shall mean any Employee who is not a Key Employee as that term is defined herein or otherwise defined in Code Section 416(i) or the Regulations thereunder.

(61) Non-US Subsidiary Company means:

(a) A foreign company not less than twenty percent (20%) of the voting stock of which is owned by the Company; or

(b) A foreign company more than fifty percent (50%) of the voting stock of which is owned by the foreign company described in subparagraph (a) above.

(62) Normal Retirement Age of a Participant is the date on which such Participant attains sixty-five (65) years of age; with the following exceptions:

(a) The Normal Retirement Age of an ATK Plan Participant is the date on which such Participant attains fifty-five (55) years of age; and

(b) The Normal Retirement Age of a UGS Plan Participant who was a participant in the Engineering Animation, Inc. Retirement Plan on May 30, 2001 and was credited with at least three years of service under such plan on May 30, 2001 is the date on which such Participant attains fifty-five (55) years of age.

(63) Normal Retirement Date shall mean the first day of the month coincident with or first following the date on which a Participant attains Normal Retirement Age and has elected to retire.

(64) One-Year Break-in-Service is defined in Section 3.5 (One-Year Break-in-Service).

 

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(65) Participant refers to any Employee who has met the qualification requirements to participate in the Plan pursuant to the provisions of Article 3 (Eligibility, Participation, and Beneficiary Designation). Any person who at one time was a Participant in the Plan and has since severed employment with an Employer, or no longer has amounts contributed to the Plan but who has an Individual Account balance shall also be considered to be a Participant. Unless otherwise indicated herein, an Alternate Payee and Beneficiary shall be considered to be a Participant.

(66) Permissive Aggregation Group means two or more plans of a single Employer aggregated pursuant to the aggregation rules of Code Section 416 whereby the group of such plans include at least one plan which is not required to be aggregated but satisfies the qualification requirements pursuant to the coverage and anti-discrimination rules set forth in the Code.

(67) A Permitted Absence occurs when such Participant’s absence from work is either:

(i) by reason of the pregnancy of such Participant,

(ii) by reason of the birth of a child of such Participant,

(iii) by reason of the placement of a child in connection with the adoption of a child by such Participant, or

(iv) for purposes of caring for such child immediately following the birth or placement by adoption.

(68) Plan refers to the EDS Deferred Compensation Plan as amended and restated and set forth in and given effect to by this instrument and all amendments hereto. Effective July 1, 1998, the name of the Plan shall be the EDS 401(k) Plan.

(69) Plan Administrator shall mean the Plan’s Benefits Administration Committee as duly appointed and authorized herein to perform those actions and duties in the administration of the Plan.

(70) Plan Coverage Change shall mean a change in the group or groups of Employees eligible to participate in the Plan on account of (i) the amendment of the Plan; (ii) a plan merger, consolidation or spin-off under Code Section 414(l); (iii) a change in the aggregation of the Plan with another Plan for purposes of complying with Code Section 401(k); or (iv) a combination of the foregoing.

(71) Plan Year shall mean the consecutive twelve-month period beginning on January 1.

 

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(72) Preretirement Survivor Annuity is defined in Section 6.5(b)(i) (Distribution of Benefits).

(73) Prior Employer Elective Contribution shall mean any amounts transferred to the Plan on behalf of an Employee who had such amounts contributed by an employer on account of such Employee’s elective deferral and pursuant to Code Section 401(k) and made when such Employee participated in a Qualified Plan maintained by an employer other than an Employer, plus, in the case of an ATK Plan Participant or UGS Plan Participant, the amount of prior employer elective contributions that are transferred to this Plan on behalf of such Participant as a result of the mergers of the ATK Plan and the UGS Plan into this Plan.

(74) Prior Employer Elective Contribution Account shall mean the portion of a Participant’s Individual Account attributable to Prior Employer Elective Contributions which were transferred into the Plan, together with the Adjustments thereto.

(75) Prior Employer Matching Contribution shall have the same meaning as set forth in Code Section 401(m)(4)(A) and generally means any amounts transferred to the Plan on behalf of an Employee who had such amounts contributed by an employer on account of such Employee’s elective deferral and made when such Employee participated in a Qualified Plan maintained by an employer other than an Employer, plus, in the case of a UGS Plan Participant, the amount of prior employer matching contributions that are transferred to this Plan on behalf of such Participant as a result of the merger of the UGS Plan into this Plan.

(76) Prior Employer Matching Contribution Account shall mean the portion of a Participant’s Individual Account attributable to Prior Employer Matching Contributions which were transferred into the Plan, together with the Adjustments thereto.

(77) Prior Employer Non-Elective Contribution shall have the same meaning as set forth in Treasury Regulation Section 1.401(k)-1(g)(10) and generally shall mean any amounts, other than Prior Employer Matching Contributions, contributed on behalf of an employee by an employer while such employee was a participant in a Qualified Plan maintained by an employer other than an Employer, and which such employee could not have elected to receive in the form of cash or other taxable benefit.

(78) Prior Employer Non-Elective Contribution Account shall mean the portion of a Participant’s Individual Account attributable to Prior Employer Non-Elective Contributions which were transferred into the Plan, together with any Adjustments thereto.

(79) Prior Employer Rollover shall mean any amounts transferred to the Plan on behalf of an Employee who previously had rolled such amounts over to an employer’s qualified retirement plan pursuant to the requirements of Code Section 401(a)(31) and the regulations thereunder.

 

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(80) Prior Employer Rollover Account shall mean the portion of a Participant’s Individual Account attributable to Prior Employer Rollovers which were transferred into the Plan, together with any Adjustments thereto.

(81) Prior Employer Voluntary Contribution shall mean voluntary after-tax contributions made under a Qualified Plan and generally means any amounts transferred to the Plan on behalf of an Employee who contributed such amounts when such Employee participated in a Qualified Plan maintained by an employer other than an Employer plus, in the case of an ATK Plan Participant, the amount of after-tax contributions that are transferred to this Plan on behalf of such Participant as a result of the merger of the ATK Plan into this Plan as well as any such contributions that are made to this Plan pursuant to Section 1.4 for the 2002 plan year.

(82) Prior Employer Voluntary Contribution Account shall mean the portion of a Participant’s Individual Account attributable to Prior Employer Voluntary Contributions which were transferred into the Plan, together with the Adjustments thereto.

(83) QDRO Account shall mean the account established by the Plan Administrator for the benefit of an Alternate Payee pursuant to a Qualified Domestic Relations Order.

(84) Qualified Consent means an irrevocable written consent of the spouse of a Participant which acknowledges the effect of the consent and is witnessed by a notary public in accordance with the then established policies of the Plan Administrator. However, any requirement for Qualified Consent may be deemed waived by the Plan Administrator when the Plan Administrator establishes to its satisfaction that there is not a spouse of the Participant, or the spouse of the Participant cannot be located. Any consent obtained hereby shall be effective only with respect to the signing spouse. A consent that permits designations by the Participant without any requirement for further consent by such spouse must acknowledge that the spouse has the right to limit consent to a specific Beneficiary, and a specific form of benefit where applicable, and that the spouse voluntarily, elects to relinquish either or both of such rights. A revocation of a prior waiver may be made by a Participant without the consent of the spouse at any time before the commencement of benefits. The number of revocations shall not be limited. No qualified consent required under Section 6.5(b) shall be valid unless the Participant has received notice as provided in Section 6.14 (Required Notifications).

(85) Qualified Domestic Relations Order shall mean a domestic relations order which meets the requirements of Code Section 414(p).

(86) Qualified Matching Contribution is defined in Section 4.1(e) (Employer Contributions).

 

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(87) Qualified Nonelective Contribution is defined in Section 4.1(d) (Employer Contributions).

(88) Qualified Plan shall mean any employee benefit plan which satisfies the provisions of Code Section 401(a).

(89) Required Aggregation Group means each a Qualified Plan of the Employer in which a Key Employee is a participant, and each other employee pension benefit plan of the Employer which enables any employee pension benefit plan in which a Key Employee participates to meet the requirements of Code Sections 401(a)(4) or 410. In the case of a Required Aggregation Group, each employee pension benefit plan in the group will be considered a Top Heavy Plan if the Required Aggregation Group is a Top-Heavy Group. No employee pension benefit plan in the Required Aggregation Group will be considered a Top Heavy Plan if the Required Aggregation Group is not a Top-Heavy Group.

(90) Required Beginning Date shall mean (a) in the case of a Participant who attains age seventy and one-half (70  ¹ / 2 ) prior to January 1, 1997, or who is a five percent (5%) owner within the meaning of Code Section 416(i) at any time during the calendar year in which such individual attains age seventy and one-half (70  ¹ / 2 ), the April 1 first following the calendar year in which a Participant attains age seventy and one-half (70  ¹ / 2 ); or (b) in the case of any other Participant who attains age seventy and one-half (70  ¹ / 2 ) on or after January 1, 1997, the April 1 first following the later of the calendar year in which the Participant attains seventy and one-half (70  ¹ / 2 ), or retires.

(91) Rollover Account shall mean the portion of a Participant’s Individual Account consisting of contributions made pursuant to Section 4.6 (Rollover Contribution) by such Participant to the Plan, together with any Adjustments thereto, plus, in the case of an ATK Plan Participant or UGS Plan Participant, the amount of rollover contributions that are transferred to this Plan on behalf of such Participant as a result of the mergers of the ATK Plan and UGS Plan into this Plan.

(92) Rollover Contribution shall mean an amount contributed pursuant to Section 4.6 (Rollover Contribution) by a Participant of the Plan to establish, or add to, a Rollover Account and subject to the requirements set forth herein.

(93) Salary Reduction Agreement shall mean an election made by a Participant in accordance with Section 4.2(a) (Elective Contributions) by which the Participant agrees that the Employer will reduce the Participant’s Compensation by a designated percentage and contribute that designated percentage to the Plan on behalf of the Participant.

(94) Service is defined in Section 3.4 (Service).

 

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(95) Top-Heavy Group means a Required or Permissive Aggregation Group, if applicable, in which, as of the Determination Date, the sum of the present value of the accumulated accrued benefits of Key Employees under all Defined Benefit Plans included in the group, and the aggregate of the accounts of Key Employees under all Defined Contribution Plans included in the group, exceed sixty percent (60%) of a similar sum determined for all Participants.

(96) Top-Heavy Plan generally means, for any Plan Year, any plan under which, as of any Determination Date, the present value of the sum of the Individual Account balances under the plan for Key Employees exceeds sixty percent (60%) of the sum of the Individual Account balances for all Employees.

(97) Trust shall mean, as of a particular date, the total of the contributions made in accordance with the Plan, increased by the net income thereon and decreased by the benefits paid under the Plan, losses incurred, and expenses, costs or fees of administering the Plan held by the Trustee pursuant to the terms of the Trust Agreement.

(98) Trust Agreement means the agreement entered into between the Company or an Employer and the Trustee pursuant to Section 8.1 (Trustee).

(99) Trustee shall mean such individual or financial institution, or a combination, as shall be designated by the Trust Agreement to hold in trust any assets of the Plan for purposes of providing benefits under the Plan, and shall include any successor Trustee to the Trustee, initially designated thereunder. The Trustee shall be a named fiduciary.

(100) UGS Plan Participant shall mean any person who was a Participant in the UGS Plan on December 31, 2002 and whose account in the UGS Plan was transferred to this Plan in connection with the merger of the UGS Plan into this Plan.

(101) Valuation Date shall mean each day on which the New York Stock Exchange is trading or as otherwise determined by the Trustee, on which the Trust shall be valued at fair market value. In no event shall a Valuation Date occur less frequently than once in a consecutive twelve (12) month period.

(102) Year of Service shall mean a Computation Period, commencing on the first day a person becomes employed or reemployed by an Employer and prior to July 1, 1998, during which such Employee has not less than one thousand (1,000) Hours of Service.

2.2 Construction . The headings and subheadings in the Plan are provided for convenience of reference only and shall not affect the construction or interpretation of the provisions. In any necessary construction of a plan provision, the masculine gender may include the feminine or neuter, and the singular may include the plural, and vice versa.

 

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ARTICLE 3

ELIGIBILITY, PARTICIPATION, AND

BENEFICIARY DESIGNATION

3.1 Eligibility Period . Each Employee shall automatically be eligible to participate in the Plan upon commencing the first Hour of Service with an Employer.

3.2 Participation . Each eligible Employee of an Employer shall be given written notice by the Employer of the requirements of eligibility and shall become a Participant as of his Election Date by notifying the Plan Administrator in accordance with the then established policies of the Plan Administrator and agreeing to accept and be bound by all the terms and conditions of the Plan. Such Participant shall remain a Participant for so long as there exists a remaining balance in such Participant’s Individual Account. Notwithstanding the foregoing, each ATK Plan Participant and UGS Plan Participant shall automatically become a Participant on January 1, 2003.

3.3 Credited Service means the sum of (i) all periods of Service beginning after the later of June 30, 1998, or the Participant’s Date of Employment or Date of Reemployment, as applicable; and (ii) a Participant’s Years of Service as of June 30, 1998, if any; provided, however, that such Participant’s Credited Service shall be increased by one (1) if, as of June 30, 1998, the Participant had not completed at least 1,000 Hours of Service during the twelve (12) consecutive month period beginning on the later of (A) the Participant’s Date of Employment or Date of Reemployment, if applicable or (B) the most recent anniversary of the date in (A).

3.4 Service means all periods of the Employee’s common law employment with an Employer, subject to the rules in this Section and the One-Year Break-in-Service rules in Section 3.5 (One-Year Break-in-Service).

(a) A Participant shall earn Service for all periods of common law employment. Unless a period of Service may be disregarded pursuant to the Break-in-Service rules in Section 3.5 (Break-in-Service), all periods of non-continuous Service shall be aggregated so that a one (1) year period of Service shall be completed as of the date an Employee completes three hundred and sixty-five (365) days of Service.

(i) An Employee’s Service shall commence (or recommence) on the Employee’s Date of Employment (or Date of Reemployment).

(ii) A period of Service of an Employee shall terminate upon the first to occur of:

(A) The date on which the Employee quits, retires, is discharged or dies;

(B) The date on which the Employee is deemed to terminate employment due to failure to return to active employment upon the expiration of a Leave of Absence or Disability Leave of Absence; or

 

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(C) The first anniversary of the date on which the Employee is first absent from active employment for any reason other than retirement, quit, discharge, Leave of Absence, Disability Leave of Absence, or death.

(iii) For an Employee who is on a Permitted Absence and who is absent from Service beyond the first anniversary of the date such Permitted Absence commenced, a termination of Service shall occur on the second anniversary of the date such Permitted Absence commenced; provided, however, that the period between the first and second anniversaries of the date such Permitted Absence commenced is neither a period of Service nor a period of severance for purposes of Section 3.5 (One-Year Break-in-Service). In order for an employee’s absence to qualify as a Permitted Absence, the Employee must furnish the Plan Administrator with such timely information as the Plan Administrator requires in order to establish that the absence was a Permitted Absence in accordance with procedures established by the Plan Administrator.

(iv) If an Employee terminates Service due to a quit, discharge, or retirement, but is reemployed by an Employer within twelve months of such termination of Service, then the period of termination shall be counted as a period of Service. If an Employee is on Leave of Absence of twelve months or less, and then terminates Service due to a quit, discharge, or retirement, but is reemployed by an Employer within twelve months from the date on which the Employee was first absent from Service, then the period of termination shall be counted as a period of Service. If an Employee is on Disability Leave of Absence and then terminates Service due to a quit, discharge, or retirement, but is reemployed by an Employer within twelve months from the date on which the Employee was first absent from Service, then the period of the termination shall be counted as a period of Service.

(b) Service shall exclude any period of employment completed prior to the Participant’s attainment of age 18; provided, however, that for a Participant whose Date of Employment is on or after July 1, 1998, Service shall include any period of employment completed prior to attainment of age 18.

(c) Employment with a Controlled Group Member or a Non-US Subsidiary Company as reported to the Plan Administrator by such Controlled Group Member or Non-US Subsidiary Company, shall be treated as Service.

(d) Any individual who becomes an Employee as a result of a facilities management contract or an outsourcing agreement between an Employer and a Customer or who becomes an Employee as a result of a stock purchase, asset purchase or other acquisition shall, unless the individual is covered by one of the facilities management contracts, outsourcing agreements or acquisition agreements listed on Appendix G, which Appendix shall be revised from time to time in the sole discretion of EDS’ Executive Vice President, Human Resources, receive one year of Service for each year employed with and as reported by such Employee’s former employer.

 

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(e) An Employee entitled to benefits under the long term disability plan will be credited with Service during a Disability Leave of Absence until the earlier of the date as of which (i) the Employee is fully vested in the balance in his Individual Account pursuant to Section 6.4 (Other Termination of Service), or (ii) the Employee’s attainment of Normal Retirement Age.

(f) Any individual who is a “leased employee” (as defined in Section 414(n) of the Internal Revenue Code) of an Employer and who later becomes an Employee shall have his or her service as such a leased employee for an Employer treated as Service.

(g) Any individual who immediately prior to becoming an Employee was actively employed by an employer listed on Appendix A (an “In-Sourced Employee”), which Appendix may be revised from time to time by EDS’ Vice President, Global Compensaiton and Benefits in accordance with the delegation of authority from EDS’ Benefits Oversight Committee, shall receive one year of Service for each year employed with and as reported by such Employee’s former employer.

3.5 One -Year Break-in-Service .

(a) Effective prior to July 1, 1998, One-Year Break-in-Service shall mean an Employment Year during which a Participant is not credited with more than five hundred (500) Hours of Service.

(b) Effective July 1, 1998, a Break-in-Service shall mean a period of severance following an Employee’s termination of Service. An Employee shall have a One-Year Break-in-Service for each twelve month period ending on the anniversary of the Employee’s termination of Service.

(c) If a Participant incurs a period of five consecutive One-Year Breaks-in-Service, then any Credited Service completed after such One-Year Breaks-in-Service shall be disregarded for purposes of determining his vested right in the balance of his Individual Account as of the date he incurs the One-Year Breaks-in-Service.

(d) For purposes of determining if an Employee who is reemployed following July 1, 1998, has incurred a period of five consecutive One-Year Breaks-in-Service, the Employee’s period of Break in Service commencing on July 1, 1998, shall be combined with such Employee’s One-Year Breaks-in-Service, as defined prior to July 1, 1998, including any partial years.

 

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3.6. Special Rules Applicable to ATK Plan Participants, UGS Plan Participants and Certain Other Employees .

Notwithstanding the foregoing provisions of Sections 3.4 and 3.5, the following special rules shall apply (i) to those Participants whose account balances were transferred to this Plan in connection with the merger of the ATK Plan and the UGS Plan into this Plan effective as of January 1, 2003 and (ii) to certain other A.T. Kearney, Inc. and Unigraphics Solutions, Inc. Employees:

(a) For purposes of Section 3.3, Credited Service for an ATK Plan Participant shall mean the sum of (i) the ATK Plan Participant’s years of service (determined on the basis of 1,000 hours of service each calendar year in accordance with the provisions of the ATK Plan) credited as of January 1, 2003 under the ATK Plan and (ii) all periods of Service under this Plan beginning January 1, 2003 (provided that for purposes of determining the start of an ATK Plan Participant’s Computation Period under this Plan, the date on which the Participant, according to A.T. Kearney, Inc.’s records, first became employed or was reemployed, as the case may be, shall be used and provided further that an ATK Plan Participant shall receive one year of Credited Service for Service earned under the provisions of Section 3.4 for the period January 1, 2003 through the anniversary of such employment or reemployment date even if such period of Service is less than 365 days).

(b) For purposes of Section 3.3, Credited Service for a UGS Plan Participant shall mean the sum of (i) the UGS Plan Participant’s service period (determined on the elapsed time basis in accordance with the provisions of the UGS Plan) credited as of January 1, 2003 under the UGS Plan and (ii) all periods of Service under this Plan beginning January 1, 2003 (provided that for purposes of determining the start of a UGS Plan Participant’s Computation Period under this Plan, the date on which the Participant, according to Unigraphics Solutions, Inc.’s records, first became employed or was reemployed, as the case may be, shall be used and provided further that a UGS Plan Participant shall receive one year of Credited Service for Service earned under the provisions of Section 3.4 for the period January 1, 2003 through the anniversary of such employment or reemployment date even if such period of Service is less than 365 days).

(c) For purposes of determining if an ATK Plan Participant or a UGS Plan Participant who is reemployed after December 31, 2002 has incurred a period of five consecutive One-Year Breaks-in-Service, the Participant’s period of Break-in-Service commencing on January 1, 2003 shall be combined with such Participant’s break-in-service years (and any partial break-in-service years in the case of the UGS Plan) recognized under the ATK Plan or the UGS Plan, as the case may be, as of January 1, 2003.

(d) For purposes of Section 3.3, Credited Service for an Employee who is included on the payroll of Unigraphics Solutions, Inc. or A.T. Kearney, Inc. on January 1, 2003 but who is not an ATK Plan Participant or UGS Plan Participant shall mean all

 

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periods of Service under this Plan beginning January 1, 2003 (provided that for purposes of determining the start of such an Employee’s Computation Period under this Plan, the date on which the Employee, according to A.T. Kearney, Inc.’s or Unigraphics Solutions, Inc.’s records, first became employed or was reemployed, as the case may be, shall be used and provided further that such an Employee shall receive one year of Credited Service for Service earned under the provisions of Section 3.4 for the period January 1, 2003 through the anniversary of such employment or reemployment date even if such period of Service is less than 365 days).

(e) For purposes of determining an ATK Plan Participant’s years of Credited Service under the vesting provisions of Section 6.4, each ATK Plan Participant who was credited with three or four years of vesting service under the ATK Plan as of December 31, 2002 shall, in order to ensure compliance with Code Section 411(a)(10), receive an additional year of Credited Service.

3.7 Beneficiary Designation . At any time, and in accordance with the policies then established by the Plan Administrator, each Participant may designate the Beneficiary or Beneficiaries to receive such Participant’s death benefit and shall have the restricted right to revoke any such designation. Each such designation or revocation shall be evidenced by written instrument filed with the Plan Administrator, signed by the Participant. Any designation of a Beneficiary other than the Participant’s spouse shall be void and without effect unless such designation includes a Qualified Consent. Any revocation of a designation of a Participant’s spouse as Beneficiary is void without a proper Spousal Consent. If no such designation is on file with the Plan Administrator at the time of the Participant’s death or if, for any reason, the Plan Administrator determines that no such designation is in effect, then the Participant’s spouse shall be deemed the Beneficiary. If at the time of death the Participant has no spouse, then the estate of such Participant shall be conclusively deemed to be the Beneficiary designated to receive such Participant’s death benefit or, if the Participant does not have an estate, then the Participant’s death benefit shall be paid in accordance with the intestate succession laws of the state where the Participant maintained his or her principal residence at the time of death. If a Participant has designated the Participant’s spouse as a Beneficiary, and as of the time of the occurrence of a distributable event, the Participant is no longer married to such designated Beneficiary, and has not properly designated another as Beneficiary in lieu of the Participant’s ex-spouse, then such designated Beneficiary shall be paid benefits in accordance with the Beneficiary designation and the terms of the Plan. If a designated Beneficiary shall die before the Participant, his or her interest under this Section 3.6 shall terminate, and, unless otherwise provided in the Participant’s designation if the designation included more than one Beneficiary, such interest shall be paid in equal shares to those Beneficiaries, if any, who survive the Participant. For purposes of the immediately preceding sentence, a Beneficiary who makes a “qualified disclaimer” (as such term is defined in Code Section 2518(b)) that meets the requirements of Code Section 2518(b) and that is valid under applicable state law shall be treated as dying before the Participant, provided that such disclaimer is actually received by the Plan Administrator prior to the payment of any death benefit under the Plan. If a designated Beneficiary is accused of feloniously or intentionally killing the Participant and such Beneficiary resides in a state that has enacted a “killer statute,” the Plan Administrator shall not pay any of the Participant’s death benefit to such Beneficiary pending the outcome of the Beneficiary’s trial, and if the Beneficiary is found

 

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guilty of feloniously or intentionally killing the Participant, the Beneficiary shall have no right to receive any of the Participant’s death benefit and the Beneficiary shall be treated as having died before the Participant for purposes of this Section 3.7. Notwithstanding anything to the contrary in this Section 3.7, if a designated Beneficiary does not predecease the Participant but dies prior to the distribution of the Participant’s death benefit to the Beneficiary, then such death benefit shall be paid to the Beneficiary’s estate.

ARTICLE 4

CONTRIBUTIONS

4.1 Employer Contributions . Subject to the limitations set forth in this Article 4, for each Plan Year, each Employer shall make Contributions to the Plan as provided in this Section 4.1. Contributions shall be paid to the Trustee. All contributions by the Employer shall be irrevocable, except as herein provided, and may be used only for the exclusive benefit of the Participants and their Beneficiaries.

(a) Elective Contributions . The Employer shall make an Elective Contribution in an amount equal to the amount by which each Participant has agreed, in accordance with the provisions of Section 4.2 (Elective Contributions), to reduce his Compensation.

(b) Employer Matching Contributions . Effective July 1, 1998, the Employer shall make Employer Matching Contributions as follows:

(i) As of each Investment Date, an Employer Matching Contribution in an amount that equals twenty-five percent (25%) of the Elective Contribution contributed on behalf of each Participant since the immediately preceding Investment Date, made with respect to Elective Contributions equal to no more than six percent (6%) of such Participant’s Compensation.

(ii) An Employer Matching Contribution on behalf of each Participant who is in the Service of an Employer on the last day of the Plan Year in an amount as necessary such that the aggregate Employer Matching Contribution for the Plan Year made on behalf of such Participant equals twenty-five percent (25%) of the Elective Contribution contributed on behalf of such Participant for the Plan Year with respect to Elective Contributions equal to no more than six percent (6%) of such Participant’s Compensation for the Plan Year. Notwithstanding anything herein to the contrary, for the Plan Year ending December 31, 1998, the Employer Matching Contribution made pursuant to this Section 4.1(b)(ii), shall be in an amount as necessary such that the aggregate Employer Matching Contribution for the Participant equals (A) twenty-five percent (25%) of the Elective Contribution contributed on behalf of such Participant with respect to Elective Contributions equal to no more than six percent (6%) of such Participant’s Compensation for the Plan Year, divided by (B) two.

 

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(iii) Employer Matching Contributions are subject to the limitations on investment provided in Section 8.2 (Direction of Investments).

(iv) Notwithstanding anything herein to the contrary, in the event that the Salary Reduction Contribution to which an Employer Matching Contribution relates is treated as an Excess Contribution, an Excess Aggregate Contribution, or an excess deferral (as defined in Section 4.2(c) (Elective Contributions)), then such Employer Matching Contribution shall be forfeited and the Participant’s Employer Matching Contribution Account adjusted accordingly.

(v) Notwithstanding anything herein to the contrary, in the event that an Employer Matching Contribution is made on behalf of a Participant who is not eligible for an Employer Matching Contribution or is made in an amount that exceeds the Employer Matching Contribution to which the Participant is entitled, such Employer Matching Contribution or excess Employer Matching Contribution, as the case may be, shall constitute a Forfeiture for the Plan Year in which the discovery is made.

(vi) Effective for Plan Years beginning on or after January 1, 2002, Employer Matching Contributions shall be taken into account for purposes of satisfying the top heavy minimum contribution requirements of section 416(c)(2) of the Code and Article 12 of the Plan, if applicable. Employer Matching Contributions that are used to satisfy the top heavy minimum contribution requirements, if applicable, shall be treated as matching contributions for purposes of the actual contribution percentage test and other requirements of section 401(m) of the Code.

(vii) Notwithstanding anything herein to the contrary, no Employer Matching Contribution shall be made with respect to that portion of a Participant’s Elective Contributions that constitute “catch-up” contributions under Section 4.2(c).

(c) Choice Allocation Contributions . Effective for Plan Years beginning on or after January 1, 2000, the Employer shall make a Choice Allocation Contribution on behalf of each Participant who is also a participant in the EDS Retirement Plan and who properly elected not later than the immediately preceding December 31 and in accordance with the terms of the EDS Retirement Plan, to have a portion (not to exceed thirty-three percent (33%)) of any Benefit Credits that would otherwise be made in that Plan contributed instead on such Participant’s behalf under this Plan. Such Choice Allocation Contribution shall equal the Participant’s Benefit Credits for the period in which the election is in effect multiplied by the percentage of such Benefit Credits which the Participant elected to have contributed to this Plan.

 

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(d) Qualified Nonelective Contributions . In its sole and absolute discretion, an Employer may determine to make a Qualified Nonelective Contribution in an amount, if any, determined by the Employer for the benefit of Participants who are not Highly Compensated Employees. Such Qualified Nonelective Contribution shall be nonforfeitable. Such Qualified Nonelective Contribution shall be allocated in the ratio that each Participant’s Compensation for the Plan Year bears to the total Compensation of all such Particiants for such Plan Year.

(e) Qualified Matching Contributions . In its sole and absolute discretion, an Employer may determine to make a Qualified Matching Contribution in an amount, if any, determined by the Employer for the benefit of Participants who are not Highly Compensated Employees. Such Qualified Matching Contribution shall be nonforfeitable and shall be allocated on account of Elective Contributions. Any Qualified Matching Contribution shall be the same percent of each such Participant’s Elective Contribution.

4.2 Elective Contributions . Subject to the limitations set forth herein and the applicable requirements of Treasury regulation section 1.401(k)-1, a Participant may elect to have Elective Contributions contributed to the Plan on the Participant’s behalf as follows:

(a) Salary Reduction Election . Each Participant, in accordance with the policies then established, shall enter into a Salary Reduction Agreement with the Plan Administrator as to his election to reduce his Compensation. The designated percentage by which a Participant may reduce his Compensation pursuant to an election may be any whole percentage from one percent (1%) to twenty percent (20%) (effective May 31, 2002, twenty percent shall be increased to forty percent (40%)) of the Compensation otherwise payable to the Participant during the pay period. The last pay period with respect to which the Participant’s Compensation shall be reduced shall be the last pay period with respect to which the Employer’s payroll is processed before the Participant terminates employment. A Participant may elect to defer a portion of any Equalization Bonus to the extent provided in Appendix B. Such election shall be effective no sooner than the pay period first occurring after the receipt of such Salary Reduction Agreement by the Plan in accordance with the procedures then established by the Plan Administrator. Notwithstanding anything herein or in a prior Plan document to the contrary, effective for the period July 15, 2002 through December 9, 2002, the Salary Reduction Agreement that was in effect at the time a Participant terminates employment with the Employer shall, if such Participant is rehired by the Employer, apply again from the date of rehire until the earlier to occur of (i) the date the Participant files a new Salary Reduction Agreement or (ii) May 1, 2003.

(b) Revocation or Change of Election . Each Participant, by notice to the Plan Administrator in accordance with the procedures then established by the Plan Administrator and communicated to Participants, may prospectively elect to reduce or increase the amount of his Compensation deferred pursuant to a Salary Reduction Agreement made in accordance with this Section 4.2 or cease all reduction of Compensation. If Elective Contributions are ceased hereunder, a Participant may reinstate Elective Contributions by entering into a new Salary Reduction Agreement in accordance with this Section.

 

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(c) Limitation on Elective Contributions . For any Plan Year, no Participant shall make Elective Contributions in excess of $11,000 (or $9,500 effective for Plan Years beginning prior to January 1, 2002) or such increased amount as may from time to time be provided in accordance with Code Section 402(g) or the Regulations thereunder, except to the extent permitted under the following paragraph and Code Section 414(v), if applicable, effective May 31, 2002 for the 2002 Plan Year and for all subsequent Plan Years beginning on or after January 1, 2003. Effective for Plan Years beginning on or after January 1, 2001, if during a Plan Year, the Plan Administrator determines a Participant’s Elective Contributions to the Plan for a calendar year, in addition to the Participant’s elective deferrals to another plan described in the immediately following paragraph, would exceed the 402(g) limitation, the Employer will not make any additional elective deferrals with respect to that Participant for the remainder of that calendar year, paying in cash to the Participant any amounts which would result in the Participant’s Elective Contributions for the calendar year exceeding the 402(g) limitation. Effective for Plan Years beginning on or after January 1, 2001, if the Plan Administrator determines a Participant’s Elective Contributions already contributed to the Plan for a calendar year exceed the 402(g) limitation, the Plan Administrator will distribute the amount in excess of the 402(g) limitation (the “excess deferral”), as adjusted for income earned thereon in accordance with the last sentence of this paragraph, no later than April 15 of the following calendar year. If the Plan Administrator distributes the excess deferral by the appropriate April 15, it may make the distribution irrespective of any other provision under this Plan or under the Code. The Plan Administrator will reduce the amount of excess deferrals for a calendar year distributable to the Participant by the amount of Excess Contributions (as determined in Section 4.4), if any, previously distributed to the Participant for that calendar year. The Plan Administrator shall return the excess Elective Contributions together with income earned thereon through the end of each Plan Year, but shall not return any income earned thereon between the end of the Plan Year and the date the Trustee receives directions from the Plan Administrator to distribute such excess deferral to the Participant.

Effective for Plan Years beginning on or after January 1, 2001, if a Participant participates in another plan under which the Participant makes elective deferrals pursuant to a Code §401(k) arrangement, elective deferrals under a Simplified Employee Pension, or salary reduction contributions to a tax-sheltered annuity, irrespective of whether the Employer maintains the other plan, the Participant may provide the Plan Administrator a written claim for excess deferrals made for a calendar year. The Participant must submit the claim no later than the March 1 following the close of the particular calendar year and the claim must specify the amount of the Participant’s Elective Contributions under this Plan which are excess deferrals. If the Plan Administrator receives a timely claim, it will distribute the excess deferrals (as adjusted for income) the Participant has assigned to this Plan, in accordance with the distribution procedure described in the immediately preceding paragraph. In the case of 402(g) excess deferrals that exist during any calendar

 

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year under this Plan and all other plans, contracts or arrangements of the Employer maintaining this Plan, the Participant will be deemed to have submitted a claim for such excess deferrals pursuant to this paragraph.

Effective May 31, 2002 for the 2002 Plan Year and for all subsequent Plan Years beginning on or after January 1, 2003, all Participants who have attained age 50 before the close of the Plan Year shall be eligible to make catch-up contributions in accordance with, and subject to the limitations of, section 414(v) of the Code and the regulations thereunder. Such catch-up contributions shall not be taken into account for purposes of the provisions of the Plan implementing the required limitations of sections 402(g) and 415 of the Code. The Plan shall not be treated as failing to satisfy the provisions of the Plan implementing the requirements of section 401(k)(3), 401(k)(11), 401(k)(12), 410(b), or 416 of the Code, as applicable, by reason of the making of such catch-up contributions.

(d) Special Rules for ATK Plan Participants .

Notwithstanding anything herein to the contrary, an ATK Plan participant shall be permitted to prospectively revoke his or her existing salary reduction contribution election that was effective under the ATK Plan as of January 1, 2003 and, if the ATK Plan Participant wishes, to replace it with a Salary Reduction Agreement under this Plan, all in accordance with the policies and procedures established by the Plan Administrator under Sections 4.2(a) and (b). Unless and until such a revocation occurs, the ATK Plan Participant’s salary reduction contribution election that was effective under the ATK Plan as of January 1, 2003 shall continue in effect for purposes of determining such ATK Plan Participant’s Elective Contributions under this Plan.

4.3 Payment of Elective Contributions to the Trust . Elective Contributions shall be delivered by the Employer to the Trustee as soon as practicable. Except to the extent otherwise permitted in accordance with Department of Labor Regulation § 2510.3-102, the Employer shall pay Elective Contributions to the Trustee on the earliest date on which such contributions can reasonably be segregated from the Employer’s general assets, not to exceed the fifteenth business day of the month following the month in which (i) the contributions are received by the Employer or (ii) the date on which such amounts would otherwise have been payable to the Participant in cash. All contributions by the Employer must be delivered to the Trustee by the time prescribed by law for filing the Employer’s Federal income tax return (including extensions thereof). If the contribution is on account of the Employer’s preceding fiscal year, the contribution shall be accompanied by the Employer’s statement to the Trustee that payment is on account of such fiscal year.

4.4 Limitation on Elective Contributions for Highly Compensated Employees .

(a) Limitations . Notwithstanding the provisions of Section 4.1 (Employer Contributions), the Actual Deferral Percentage for the Highly Compensated Employees with respect to any Plan Year shall not exceed the greater of (i) or (ii):

 

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(i) The Actual Deferral Percentage for the Employees who are not Highly Compensated Employees or, effective only for Plan Years beginning January 1, 1999, 2000 and 2001, who were not Highly Compensated Employees for the preceding Plan Year, multiplied by one and one-fourth (1.25); or

(ii) The Actual Deferral Percentage for the Employees who are not Highly Compensated Employees or, effective only for Plan Years beginning January 1, 1999, 2000 and 2001, who were not Highly Compensated Employees for the preceding Plan Year, multiplied by two (2); provided, however, that the Actual Deferral Percentage for the Highly Compensated Employees may not exceed the Actual Deferral Percentage for the Employees who are not Highly Compensated Employees or, effective only for Plan Years beginning January 1, 1999, 2000 and 2001, who were not Highly Compensated Employees for the preceding Plan Year, by more than two (2) percentage points, but subject to the aggregate limitation rules of paragraph 4.4(c).

(b) “ Actual Deferral Percentage ” shall mean the average of the ratios (calculated separately for each Employee to the nearest one-hundredth of one percent) of:

(i) The amount of all Elective Contributions actually contributed to the Trust on behalf of such Employee and allocated to his Elective Contribution Account for such Plan Year, plus, in accordance with regulations promulgated by the Secretary of the Treasury, such Employer Matching Contributions, if any, as may be designated by the Plan Administrator as includible in this computation for the Plan Year to

(ii) The Employee’s Compensation, such average of ratios being multiplied by one hundred (100).

To the extent that the Plan Administrator elects, pursuant to the above paragraph, to take Employer Matching Contributions into account in computing the Actual Deferral Percentage, the Actual Contribution Percentage tests under Section 4.5 (Limitation on Employer Matching Contributions) must still be computed and satisfied separately, and in doing so the Plan Administrator shall disregard the Employer Matching Contributions used in computing the Actual Deferral Percentage for such Plan Year.

For purposes of this Section 4.4(b), the ratio calculated for any Employee who is a Highly Compensated Employee for the Plan Year and who is eligible to have Elective Contributions allocated to his accounts under two or more plans or arrangements described in Code Section 401(k) that are maintained by an Employer or a Controlled Group Member shall be determined as if all such contributions were made under a single arrangement provided that if such plans or arrangements have different plan years, then for Plan Years beginning before January 1, 2005, all such plans or arrangements ending with or within the same calendar year shall be treated as a single arrangement and for Plan Years beginning on or after January 1, 2005, all Elective Contributions made during

 

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the Plan Year under all such plans or arrangements shall be aggregated. Further, in the event that this Plan satisfies the requirements of Code Section 401(a)(4) or 410(b) (other than Code Section 410(b)(2)(A)(ii)) only if aggregated with one or more other plans, or if one or more other plans satisfy the requirements of Code Sections 401(a)(4) or 410(b) (other than Code Section 410(b)(2)(A)(ii)) only if aggregated with this Plan, then the Actual Deferral Percentage shall be determined by calculating the ratio for each Employee as if all such plans were a single plan. This Plan may only be aggregated with another plan or plans pursuant to the immediately preceding sentence if this Plan and such other plan or plans have the same Plan Year and such other plan or plans use the same Actual Deferral Percentage testing method.

Notwithstanding anything herein to the contrary, effective for Plan Years beginning on or after January 1, 2005, the Actual Deferral Percentage shall no longer be calculated separately for the ESOP portion of the Plan established under Article 15.

(c) Rules Applicable to Calculation of the Actual Deferral Percentage for Employees who are not Highly Compensated Employees .

(i) Effective only for Pan Years beginning January 1, 1999, 2000 and 2001, the Actual Deferral Percentage for the Employees who were not Highly Compensated Employees for the preceding Plan Year shall be determined by taking into account those Employees who were not Highly Compensated Employees for the preceding Plan Year, using the definition of Highly Compensated Employee in effect for the preceding Plan Year and determined without regard to the Employee’s status for the current Plan Year or, except as provided in paragraph (ii), below, changes in the group of Employees who are not Highly Compensated Employees for the current Plan Year.

(ii) Effective only for Plan Years beginning January 1, 1999, 2000 and 2001, for a Plan Year during which there is a Plan Coverage Change (other than a minor Plan Coverage Change), the Actual Deferral Percentage for the Employees who are not Highly Compensated Employees shall be the weighted average of the adjusted Actual Deferral Percentages for each subgroup of Employees who are not Highly Compensated Employees who were eligible to participate in a Section 401(k) plan maintained by a Controlled Group Member, as determined in accordance with Internal Revenue Service Notice 98-1.

(iii) Effective only for Plan Years beginning January 1, 1999, 2000 and 2001, any Qualified Non-Elective Contributions shall be taken into consideration for purposes of calculating the Actual Deferral Percentage for the Employees who were not Highly Compensated Employees for the preceding Plan Year only if such Qualified Non-Elective Contributions are allocated as of a date within the preceding Plan Year and contributed not later than the end of the twelve-month period following the end of the preceding Plan Year.

 

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(d) Aggregate Limit . Effective for Plan Years beginning prior to January 1, 2002, if one or more Highly Compensated Employees are eligible for contributions that are tested under both this Section 4.4 and Section 4.5 (Limitation on Employer Matching Contributions), multiple use of the alternative limit set forth in Section 4.4(a)(ii) shall be limited so that the aggregated Actual Deferral Percentage and Actual Contribution Percentage of such Highly Compensated Employees does not exceed the aggregate limit. For purposes of this Section 4.4(d), the “aggregate limit” is the greater of the following:

(i) The sum of:

(A) One and one-fourth (1.25) multiplied by the greater of (a) the Actual Deferral Percentage of the Employees who are not Highly Compensated Employees for the Plan Year, or, effective only for Plan Years beginning January 1, 1999, 2000 and 2001, the Employees who are not Highly Compensated Employees for the preceding Plan Year, or (b) the Actual Contribution Percentage of the Employees who are not Highly Compensated Employees for the Plan Year, or, effective only for Plan Years beginning January 1, 1999, 2000 and 2001, who were not Highly Compensated Employees for the preceding Plan Year; and

(B) Two (2) plus the lesser of (a) or (b) above; provided, however, that this amount shall not exceed two (2) multiplied by of the lesser of (a) or (b) above; or

(ii) The sum of:

(A) One and one-fourth (1.25) multiplied by the lesser of (a) the Actual Deferral Percentage of the Employees who are not Highly Compensated Employees for the Plan Year, or, effective only for Plan Years beginning January 1, 1999, 2000 and 2001, who were not Highly Compensated Employees for the preceding Plan Year, and (b) the Actual Contribution Percentage for the Employees who are not Highly Compensated Employees for the Plan Year or, effective only for Plan Years beginning January 1, 1999, 2000 and 2001, who were not Highly Compensated Employees for the preceding Plan Year; and

(B) Two (2) plus the greater of (a) and (b) in the immediately preceding subparagraph; provided, however, that this amount shall not exceed two (2) multiplied by the greater of (a) or (b) above.

Amounts in excess of the aggregate limit shall be treated as excess contributions and adjusted as provided in Section 4.4(e). For purposes of applying this multiple use limit, the Actual Contribution Percentage and the Actual Deferral Percentage shall be determined after any required distributions of excess contributions and deferrals under Sections 4.2(c) Elective Contributions), 4.4(e), and 4.5(e) (Limitation on Employer Matching Contributions) and any adjustment of Employer Matching Contributions in accordance with Section 4.1(b)(iv) (Employer Contributions).

 

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(e) Adjustments for Excess Contributions . If at any time during a Plan Year, the Actual Deferral Percentage for the Highly Compensated Employees exceeds or is reasonably expected by the Plan Administrator to exceed the amounts allowed under Sections 4.4(a) and 4.4(d), then the Plan Administrator, in its sole and absolute discretion, shall, at least once prior to the end of the Plan Year and more often if the Plan Administrator elects, do one or more of the following:

(i) Prospective Reduction of Excess Contributions . Prospectively and in the same proportion reduce the amount of Compensation to be deferred pursuant to Section 4.2 (Elective Contributions), by each Highly Compensated Employee who has elected to defer a portion of his Compensation until the Actual Deferral Percentage for Highly Compensated Employees for the Plan Year will equal the greater of (i) or (ii) of Section 4.4(a), as limited by Section 4.4(d).

(ii) Refund of Excess Contributions . Refund the portion of each Highly Compensated Employee’s Elective Contribution that constitutes a portion of the “Excess Contribution” (hereinafter defined) for the Plan Year, plus earnings (or less losses) thereon for the Plan Year. All refunds shall be distributed by the Trustee to the Employer within two and one-half (2  ¹ / 2 ) months after the close of the Plan Year in which the excess contribution arose, if administratively feasible, but in no event later than twelve (12) months after such date.

Excess Contribution shall mean, with respect to any Plan Year, the excess of:

(A) The aggregate amount of Elective Contributions actually paid over to the Trust on behalf of Highly Compensated Employees for such Plan Year, over

(B) The maximum amount of such Elective Contributions permitted under the limitations of Sections 4.4(a) and (d).

The total amount of Excess Contributions is to be determined by the following leveling method, under which the Actual Deferral Percentage of the Highly Compensated Employee with the highest Actual Deferral Percentage is reduced to the extent required to (i) enable the Plan to satisfy the limitations of Sections 4.4(a) and (d), or (ii) cause such Highly Compensated Employee’s Actual Deferral Percentage to equal the Actual Deferral Percentage of the Highly Compensated Employee with the next highest Actual Deferral Percentage, whichever occurs first. This process must be repeated until the Plan satisfies the limitations of Sections 4.4(a) and (d).

 

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Once the total amount of Excess Contributions is determined, such Excess Contributions shall be distributed to the Highly Compensated Employee with the greatest amount of Elective Contributions until such Highly Compensated Employee’s Elective Contributions are reduced by the full amount of the excess contributions or until such Highly Compensated Employee’s Elective Contributions equal the Elective Contributions of the Highly Compensated Employee with the next greatest amount of Elective Contributions, whichever comes first. This process must be repeated until all Excess Contributions are distributed. A Highly Compensated Employee’s Elective Contributions under this paragraph shall be the aggregate amount of Elective Contributions provided by the third paragraph of Section 4.4(b), if applicable, provided that only Excess Contributions under this Plan may be distributed to such Highly Compensated Employee pursuant to this paragraph.

The provisions of this Section 4.4(e) shall be applied after the provisions of Section 4.2(c) (Elective Contributions) and any distributions of excess deferrals thereunder. Any distribution made pursuant to this Section 4.4(e) may be made notwithstanding any other provision of this Plan.

Effective for Plan Years beginning on or after January 1, 2005, the amount of earnings or losses allocable to the excess contributions to be refunded pursuant to this Section 4.4(e)(ii) shall include earnings or losses allocable for the Plan Year to which such excess contributions relate and for the period between the end of the Plan Year and the date of distribution.

(iii) Determination of Earnings and Losses . The earnings or losses allocable to excess contributions for the Plan Year shall be determined in the manner prescribed by the applicable Treasury regulations.

(iv) Income Allocable to Excess Contributions . The income allocable to excess contributions, for purposes of Sections 4.4(e)(iii) and (iv), shall include all earnings and appreciation, including such items as interest, dividends, rent, royalties, gains from the sale of property, appreciation in the value of stock, bonds, annuity and life insurance contracts, and other property, without regard to whether such appreciation has been realized.

(f) Special Rules for ATK Plan Participants and UGS Plan Participants .

Notwithstanding anything herein to the contrary, the Code Section 401(k) elective contribution limitations shall apply separately to this Plan’s Participants, the ATK Plan Participants and the UGS Plan Participants for all periods prior to January 1, 2003. Further, the Code Section 401(k) elective contribution limitation provisions of the ATK Plan and the UGS Plan shall apply in lieu of this Section 4.4 to the ATK Plan Participants and the UGS Plan Participants, respectively, for periods prior to January 1, 2003. Such provisions include the use of the current year Actual Deferral Percentage for

 

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those ATK Plan Participants who were not Highly Compensated Employees and the prior year Actual Deferral Percentage for those UGS Plan Participants who were not Highly Compensated Employees. Effective for Elective Contributions made by ATK Plan Participants and UGS Plan Participants starting on January 1, 2003, the provisions of this Section 4.4 shall apply.

4.5 Limitation on Employer Matching Contributions .

(a) Limitations . Notwithstanding the provisions of Sections 4.1(b) (Employer Contributions), the Actual Contribution Percentage for the Highly Compensated Employees with respect to any Plan Year shall not exceed the greater of (i) or (ii):

(i) The Actual Contribution Percentage for the Employees who are not Highly Compensated Employees or, effective only for Plan Years beginning January 1, 1999, 2000 and 2001, who were not Highly Compensated Employees for the preceding Plan Year, multiplied by one and one-fourth (1.25); or

(ii) The Actual Contribution Percentage for the Employees who are not Highly Compensated Employees or, effective only for Plan Years beginning January 1, 1999, 2000 and 2001, who were not Highly Compensated Employees for the preceding Plan Year, multiplied by two (2); provided, however, that the Actual Contribution Percentage for the Highly Compensated Employees may not exceed the Actual Contribution Percentage for the Employees who are not Highly Compensated Employees or, effective only for Plan Years beginning January 1, 1999, 2000 and 2001, who were not Highly Compensated Employees for the preceding Plan Year, by more than two (2) percentage points, but subject to the aggregate limitation rules of paragraph 5.3(b).

(b) “ Actual Contribution Percentage ” shall mean, for a specified group of Employees, the average of the ratios (calculated separately for each Employee in such group to the nearest one one-hundredth percent (.01%)) of:

(i) The amount of all Employer Matching Contributions actually contributed to the Trust on behalf of such Employee and allocated to his Employer Matching Contribution Account for such Plan Year and, in accordance with regulations promulgated by the Secretary of the Treasury, such Elective Contributions, if any, as may be designated by the Plan Administrator as includible in this computation for the Plan Year; to

(ii) The Employee’s Compensation, such average of ratios being multiplied by one hundred (100).

To the extent the Plan Administrator elects, pursuant to the above paragraph, to take Elective Contributions into account in computing the Actual Contribution Percentage, the Actual Deferral Percentage tests under Section 4.4 (Limitation on Elective Contributions

 

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for Highly Compensated Employees) must still be computed and satisfied separately, and in doing so the Employer shall disregard the Elective Contributions used in computing the Actual Contribution Percentage for such Plan Year.

For purposes of this Section 4.5(b) the ratio calculated for any Employee who is a Highly Compensated Employee for the Plan Year and who is eligible to have Employer Matching Contributions allocated to his accounts under two or more plans described in Code Section 401(a) that are maintained by an Employer or a Controlled Group Member shall be determined as if all such contributions were made under a single plan provided that if such plans have different plan years, then for Plan Years beginning before January 1, 2005, all such plans ending with or within the same calendar year shall be treated as a single plan and for Plan Years beginning on or after January 1, 2005, all Employer Matching Contributions made during the Plan Year under all such plans shall be aggregated. Further, in the event that this Plan satisfies the requirements of Code Section 401(a)(4) or 410(b) (other than Code Section 410(b)(2)(A)(ii)) only if aggregated with one or more other plans, or if one or more other plans satisfy the requirements of Code Sections 401(a)(4) or 410(b) (other than Code Section 410(b)(2)(A)(ii)) only if aggregated with this Plan, then the Actual Contribution Percentage shall be determined by calculating the ratio for each Employee as if all such plans were a single plan. This Plan may only be aggregated with another plan or plans pursuant to the immediately preceding sentence if this Plan and such other plan or plans have the same Plan Year and such other plan or plans use the same Actual Contribution Percentage testing method.

Notwithstanding anything herein to the contrary, effective for Plan Years beginning on or after January 1, 2005, the Actual Contribution Percentage shall no longer be calculated separately for the ESOP portion of the Plan established under Article 15.

(c) Rules Applicable to Calculation of the Actual Contribution Percentage for Employees who are not Highly Compensated Employees .

(i) Effective only for Plan Years beginning January 1, 1999, 2000 and 2001, the Actual Contribution Percentage for the Employees who were not Highly Compensated Employees for the preceding Plan Year shall be determined by taking into account those Employees who were not Highly Compensated Employees for the preceding Plan Year, using the definition of Highly Compensated Employee in effect for the preceding Plan Year and determined without regard to the Employee’s status for the current Plan Year or, except as provided in paragraph (ii), below, changes in the group of Employees who are not Highly Compensated Employees for the current Plan Year.

(ii) Effective only for Plan Years beginning January 1, 1999, 2000 and 2001, for a Plan Year during which there is a Plan Coverage Change (other than a minor Plan Coverage Change), the Actual Contribution Percentage for the Employees who are not Highly Compensated Employees shall be the weighted average of the adjusted Actual Contribution Percentages for each subgroup of

 

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Employees who are not Highly Compensated Employees and who were eligible to participate in a Section 401(k) plan maintained by a Controlled Group Member, as determined in accordance with Internal Revenue Service Notice 98-1.

(iii) Effective only for Plan Years beginning January 1, 1999, 2000 and 2001, any Qualified Non-Elective Contributions shall be taken into consideration for purposes of calculating the Actual Contribution Percentage for the Employees who were not Highly Compensated Employees for the preceding Plan Year only if such Qualified Matching Contributions are allocated as of a date within the preceding Plan Year and contributed not later than the end of the twelve-month period following the end of the preceding Plan Year.

(d) Aggregate Limit . Effective for Plan Years beginning prior to January 1, 2002, if one or more Highly Compensated Employees are eligible for contributions that are tested under both this Section 4.5 and Section 4.4 (Limitation on Elective Contributions for Highly Compensated Employees), multiple use of the alternative limit set forth in Section 4.5(a)(ii) shall be limited so that the aggregated Actual Deferral Percentage and Actual Contribution Percentage of such Highly Compensated Employees does not exceed the aggregate limit. The “aggregate limit,” for purposes of this Section 4.5, is the greater of the following:

(i) The sum of:

(A) One and one-fourth (1.25) multiplied by the greater of (i) the Actual Deferral Percentage of the Employees who are not Highly Compensated Employees for the Plan Year, or, effective only for Plan Years beginning January 1, 1999, 2000 and 2001, the Employees who were not Highly Compensated Employees for the preceding Plan Year, or (ii) the Actual Contribution Percentage of the Employees who are not Highly Compensated Employees for the Plan Year, or, effective only for Plan Years beginning January 1, 1999, 2000 and 2001, the Employees who were not Highly Compensated Employees for the preceding Plan Year; and

(B) Two (2) plus the lesser of (i) or (ii) above; provided, however, that this amount shall not exceed two (2) multiplied by the lesser of (i) or (ii) above; or

(ii) The sum of:

(A) One and one-fourth (1.25) multiplied by the lesser of (a) the Actual Deferral Percentage of the Employees who are not Highly Compensated Employees for the Plan Year, or, effective only for Plan Years beginning January 1, 1999, 2000 and 2001, the Employees who were not Highly Compensated Employees for the preceding Plan Year,

 

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and (b) the Actual Contribution Percentage for the Employees who are not Highly Compensated Employees for the Plan Year or, effective only for Plan Years beginning January 1, 1999, 2000 and 2001, who were not Highly Compensated Employees for the preceding Plan Year; and

(B) Two (2) plus the greater of (a) and (b) in the immediately preceding subparagraph; provided, however, that this amount shall not exceed two (2.0) multiplied by the greater of (a) or (b) above.

Amounts in excess of the aggregate limit shall be treated as excess aggregate contributions and adjusted as provided in Section 4.5(e). For purposes of applying this multiple use limit, the Actual Contribution Percentage and the Actual Deferral Percentage shall be determined after any required distributions of excess contributions and deferrals under Sections 4.2(c) (Elective Contributions), 4.4(e) (Limitation on Elective Contributions for Highly Compensated Employees) and 4.5(e) and any adjustment of Employer Matching Contributions in accordance with Section 4.1(b)(iv).

(e) Adjustments for Excess Contributions .

(i) Distribution of Excess Employer Matching Contributions . To the extent that the Actual Contribution Percentage for the Highly Compensated Employees during a Plan Year would exceed, if not adjusted in accordance with this Section, the amounts allowable under Section 4.5(a) or (d), ‘Excess Aggregate Contributions’ (hereinafter defined) for the Plan Year, plus earnings and less losses thereon for the Plan Year allocable thereto, shall be forfeited, if forfeitable, or if not forfeitable, distributed by the Trustee to the Highly Compensated Employees within two and one-half months after the close of the Plan Year in which such Excess Aggregate Contributions arose, if administratively feasible, and within twelve (12) months after the close of such Plan Year, at the latest. To the extent required by law, Excess Aggregate Contributions shall be treated as Annual Additions under Sections 5.7 (Correction for Excess Annual Additions) and 5.8 (Limitation for Multiple Plan Participants).

Effective for Plan Years beginning on or after January 1, 2005, the amount of earnings or losses allocable to the excess aggregate contributions to be refunded pursuant to this Section 4.5(e)(i) shall include earnings or losses allocable for the Plan Year to which such excess aggregate contributions relate and for the period between the end of the Plan Year and the date of distribution.

(ii) Excess Aggregate Contributions . Excess Aggregate Contribution shall mean, with respect to any Plan Year, the excess of:

(A) The aggregate amount of Employer Matching Contributions actually paid over to the Trust on behalf of Highly Compensated Employees for such Plan Year, over

 

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(B) The maximum amount of such Employer Matching Contributions permitted under the limitations of Sections 4.5(a) and (d).

The total amount of Excess Aggregate Contributions is to be determined by the following leveling method, under which the Actual Contribution Percentage of the Highly Compensated Employee with the highest Actual Contribution Percentage is reduced to the extent required to (i) enable the Plan to satisfy the limitations of Sections 4.5(a) and (d), or (ii) cause such Highly Compensated Employee’s Actual Contribution Percentage to equal the Actual Contribution Percentage of the Highly Compensated Employee with the next highest Actual Contribution Percentage, whichever occurs first. This process must be repeated until the Plan satisfies the limitations of Sections 4.5(a) and (d).

Once the total amount of Excess Aggregate Contributions is determined, such Excess Aggregate Contributions shall be distributed to the Highly Compensated Employee with the greatest amount of Employer Matching Contributions until such Highly Compensated Employee’s Employer Matching Contributions are reduced by the full amount of the Excess Aggregate Contributions or until such Highly Compensated Employee’s Employer Matching Contributions equal the Employer Matching Contributions of the Highly Compensated Employee with the next greatest amount of Employer Matching Contributions, whichever comes first. This process must be repeated until all Excess Aggregate Contributions are distributed. A Highly Compensated Employee’s Employer Matching Contributions