-----BEGIN PRIVACY-ENHANCED MESSAGE-----
Proc-Type: 2001,MIC-CLEAR
Originator-Name: webmaster@www.sec.gov
Originator-Key-Asymmetric:
MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen
TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB
MIC-Info: RSA-MD5,RSA,
JqQcG0V8sIMTEPIhCy1hudhTgiRO4uTyZ4/f1DOQOS36l2B5r2jGxfxNhBKDyQKR
a+gKssPvuOfKY5HY8yKLvg==
<SEC-DOCUMENT>0000950144-03-005180.txt : 20030421
<SEC-HEADER>0000950144-03-005180.hdr.sgml : 20030421
<ACCEPTANCE-DATETIME>20030418195726
ACCESSION NUMBER: 0000950144-03-005180
CONFORMED SUBMISSION TYPE: 10-K
PUBLIC DOCUMENT COUNT: 18
CONFORMED PERIOD OF REPORT: 20030202
FILED AS OF DATE: 20030421
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: HOME DEPOT INC
CENTRAL INDEX KEY: 0000354950
STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-LUMBER & OTHER BUILDING MATERIALS DEALERS [5211]
IRS NUMBER: 953261426
STATE OF INCORPORATION: DE
FISCAL YEAR END: 0131
FILING VALUES:
FORM TYPE: 10-K
SEC ACT: 1934 Act
SEC FILE NUMBER: 001-08207
FILM NUMBER: 03656257
BUSINESS ADDRESS:
STREET 1: 2455 PACES FERRY ROAD
CITY: ATLANTA
STATE: GA
ZIP: 30339-4024
BUSINESS PHONE: 770-433-82
MAIL ADDRESS:
STREET 1: 2455 PACES FERRY ROAD
CITY: ATLANTA
STATE: GA
ZIP: 30339-4024
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-K
<SEQUENCE>1
<FILENAME>g81844e10vk.txt
<DESCRIPTION>THE HOME DEPOT, INC.
<TEXT>
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
FOR ANNUAL AND TRANSITION REPORTS PURSUANT
TO SECTIONS 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED FEBRUARY 2, 2003
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission File Number 1-8207
THE HOME DEPOT, INC.
(Exact Name of Registrant as Specified in Its Charter)
DELAWARE
(State or Other Jurisdiction of Incorporation or Organization)
95-3261426
(I.R.S. Employer Identification No.)
2455 PACES FERRY ROAD, ATLANTA, GEORGIA 30339-4024
(Address of Principal Executive Offices, including Zip Code)
Registrant's telephone number, including area code: (770) 433-8211
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
<TABLE>
<CAPTION>
NAME OF EACH EXCHANGE
TITLE OF EACH CLASS ON WHICH REGISTERED
-------------------------------------- -----------------------
<S> <C>
Common Stock, $.05 Par Value Per Share New York Stock Exchange
</TABLE>
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: NONE
Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [X]
Indicate by check mark whether the Registrant is an accelerated filer
(as defined in Exchange Act Rule 12b-2). Yes [X] No [ ]
The aggregate market value of the Common Stock of the Registrant held
by nonaffiliates of the Registrant on August 2, 2002 was $64.5 billion.
The number of shares outstanding of the Registrant's Common Stock as
of April 1, 2003 was 2,293,783,938 shares.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Registrant's 2002 Annual Report to Stockholders are
incorporated by reference in Part II. Portions of the Registrant's Proxy
Statement for the 2003 Annual Meeting of Stockholders to be held on May 30,
2003, are incorporated by reference in Part III.
<PAGE>
CAUTIONARY STATEMENT PURSUANT TO THE
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
Certain statements made herein regarding strategic alliances with suppliers,
implementation of store initiatives, store openings and capital expenditures
constitute "forward-looking statements" as defined in the Private Securities
Litigation Reform Act of 1995. These statements are subject to various risks
and uncertainties that could cause actual results to differ materially from our
historical experience and our present expectations. These risks and
uncertainties include, but are not limited to, fluctuations in and the overall
condition of the U.S. economy, stability of costs and availability of sourcing
channels, conditions affecting new store development, our ability to implement
new technologies and processes, our ability to attract, train and retain
highly-qualified associates, unanticipated weather conditions, the impact of
competition and the effects of regulatory and litigation matters. You should
not place undue reliance on such forward-looking statements as such statements
speak only as of the date on which they are made. Additional information
concerning these and other risks and uncertainties is contained in our periodic
filings with the Securities and Exchange Commission.
PART I
ITEM 1. BUSINESS
The Home Depot, Inc. ("Home Depot" or the "Company") is the world's largest
home improvement retailer and the second largest retailer in the United States,
based on net sales volume for fiscal 2002. At the end of the fiscal year ended
February 2, 2003 ("fiscal 2002"), we were operating 1,532 stores. Most of our
stores are either Home Depot(R) stores or EXPO Design Center(R) stores. A
description of each of these types of stores is as follows:
- HOME DEPOT STORES: Home Depot stores sell a wide assortment
of building materials and home improvement and lawn and
garden products and provide a number of services. Home Depot
stores average approximately 108,000 square feet of enclosed
space, with an additional approximately 22,000 square feet in
the outside garden area. At the end of fiscal 2002, we had
1,471 Home Depot stores located throughout the United States
(including Puerto Rico), Canada and Mexico. In February 2002,
the Company sold its four stores in Argentina.
- EXPO DESIGN CENTER STORES: EXPO Design Center stores sell
products and services primarily for home decorating and
remodeling projects. Unlike Home Depot stores, EXPO Design
Center stores do not sell building materials and lumber. EXPO
Design Center stores offer interior design products, such as
kitchen and bathroom cabinetry, soft and hard flooring,
appliances, window treatments, lighting fixtures and
installation services. An average EXPO Design Center has
approximately 100,000 square feet of enclosed space. At the
end of fiscal 2002, we were operating 52 EXPO Design Center
stores in the United States.
In addition to Home Depot and EXPO Design Center Stores, we also have two new
store formats focused on the professional customer called Home Depot Supply and
Home Depot Landscape Supply. At the end of fiscal 2002, we were operating five
Home Depot Supply stores and three Home Depot Landscape Supply stores. We also
have one test store located in Texas called The Home Depot Floor Store(SM) that
sells only flooring products.
We operate four wholly-owned subsidiaries, Georgia Lighting, Inc., Apex Supply
Company, Inc., Your "other" Warehouse, Inc. and HD Builder Solutions Group,
Inc. Georgia Lighting(R), a specialty lighting designer, distributor and
retailer, has five showroom locations in Georgia. Apex Supply
2
<PAGE>
Company is a wholesale supplier of plumbing, HVAC, appliances and other related
professional products with 23 locations in Florida, Georgia, South Carolina and
Tennessee. Your "other" Warehouse(R) is a plumbing distributor that focuses on
special order fulfillment through its five distribution centers and one call
center located in Louisiana and Nevada. HD Builder Solutions Group, Inc.
provides products and arranges flooring installation services for professional
homebuilders through 16 locations in Maryland, Virginia, New Jersey, Ohio,
Pennsylvania, Kentucky, Florida, Colorado and Arizona. This business was
acquired in October 2002 when the Company acquired substantially all of the
assets of FloorWorks, Inc. and Arvada Hardwood Floor Company, and all of the
common stock of Floors, Inc.
In addition to these subsidiaries, we offer products through two direct
marketing subsidiaries. Maintenance Warehouse(R), a wholly-owned subsidiary, is
a direct marketer of maintenance, repair and operations products serving
primarily the multi-family housing and lodging facilities management market.
The company fills orders through its 21 distribution centers, which are located
in the United States. National Blinds & Wallpaper(SM), a wholly-owned subsidiary
operating under the name Designplace Direct(SM), is a mail order service for
wallpaper, custom window treatments and rugs.
The Home Depot, Inc. is a Delaware corporation that was incorporated in 1978.
Our Store Support Center (corporate office) is located at 2455 Paces Ferry
Road, Atlanta, Georgia 30339-4024. The telephone number is (770) 433-8211.
We maintain an internet website at www.homedepot.com. We make available on the
website, free of charge, our Annual Reports on Form 10-K, Quarterly Reports on
Form 10-Q and Current Reports on Form 8-K and amendments to those reports filed
or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act
of 1934, as amended, as soon as reasonably practicable after filing such
material electronically with, or furnishing such material to, the Securities
and Exchange Commission.
We have included our website addresses throughout this filing only as textual
references. The information contained on our websites is not incorporated by
reference into this Form 10-K.
RETAIL BUSINESSES
HOME DEPOT STORES
OPERATING STRATEGY. The operating strategy of Home Depot is to offer a broad
assortment of high-quality merchandise and services at competitive prices using
highly knowledgeable, service-oriented personnel and aggressive advertising. We
believe that our associates' knowledge of products and home improvement
techniques and applications is very important to our marketing approach and our
ability to maintain customer satisfaction. We regularly check our competitors'
prices to ensure that our prices are competitive within each market.
CUSTOMERS. Home Depot stores serve three primary customer groups:
- DO-IT-YOURSELF ("D-I-Y") CUSTOMERS: These customers are
typically homeowners who purchase products and complete their
own projects and installations. To complement the in-store
expertise of our associates, Home Depot stores offer many
D-I-Y "how-to" clinics taught by associates and merchandise
vendors.
3
<PAGE>
- DO-IT-FOR-ME ("D-I-F-M") CUSTOMERS: These customers are
typically homeowners who purchase materials themselves and
hire third parties to complete the project and/or
installation. We offer these customers installation services
for a variety of products through third party contractors.
- PROFESSIONAL CUSTOMERS: These customers are professional
remodelers, general contractors, repairmen and tradesmen. In
many stores we offer a variety of programs to these
professional customers, including additional delivery and
will-call services, dedicated staff, extensive merchandise
selections and expanded credit programs, all of which we
believe increase sales.
PRODUCTS. A typical Home Depot store stocks approximately 40,000 to 50,000
products during the year, including both national brand name and proprietary
items. The following table shows the percentage of revenues of each major
product group (and related services) for each of the last three fiscal years:
<TABLE>
<CAPTION>
Percentage of Revenues for
Fiscal Year Ended
----------------------------------
Feb. 2, Feb. 3, Jan. 28,
Product Group 2003 2002 2001
- ------------- ------- ------- --------
<S> <C> <C> <C>
Building materials, lumber and millwork .... 23.1% 23.6% 23.6%
Plumbing, electrical and kitchen ........... 28.7 28.1 27.6
Hardware and seasonal ...................... 27.4 27.6 28.3
Paint, flooring and wall coverings ......... 20.8 20.7 20.5
----- ----- -----
Total ...................................... 100.0% 100.0% 100.0%
===== ===== =====
</TABLE>
We buy our store merchandise from vendors located throughout the world. We are
not dependent on any single vendor. Most of our merchandise is purchased
directly from manufacturers, which eliminates "middleman" costs. We believe
that competitive sources of supply are readily available for substantially all
of the products we sell in Home Depot stores.
We maintain a global sourcing merchandise program to source high-quality
products directly from overseas manufacturers, which gives our customers a
broader selection of products and better values while enhancing our gross
margin. Our product development merchants travel internationally to identify
opportunities to purchase items directly for our stores. Additionally, we have
opened two sourcing offices located in Shanghai and Shenzhen, China, and have a
product development merchant located in Bonn, Germany. These initiatives enable
us to improve product quality, to import products not currently available to
our customers and to offer products at a lower price than would otherwise be
available if purchased from third-party importers. We currently source products
from more than 500 factories in approximately 40 countries.
To complement and enhance our current product selection, we have formed
strategic alliances and exclusive relationships with certain suppliers to
market products under a variety of well-recognized brand names. At the end of
fiscal year 2002, we offered a number of proprietary and exclusive brands,
including, but not limited to, John Deere(R) lawn and garden tractors;
Thomasville(R) kitchen and bathroom cabinets; Silestone(R) countertops;
RIDGID(R) power tools; Behr Premium Plus(R) paint; Mill's Pride(R) cabinets;
Husky(R) hand tools; GE SmartWater(TM) water heaters; Philips(R) light bulbs;
Toro(R) lawn mowers; Vigoro(R) lawn care products GAF(R) roofing products,
Honda(R) lawn mowers and Lithonia Lighting(TM) fluorescent lighting products.
In the future, we may consider additional strategic alignments with other
suppliers and will continue to assess opportunities to expand the range of
products available under brand names that are exclusive to the Home Depot.
4
<PAGE>
AT-HOME SERVICES. Home Depot stores offer a variety of installed sales and home
maintenance programs through its At-Home Services(R) business. This service
targets the Do-It-For-Me customer who will select and purchase materials for a
project and prefers the Company to arrange professional installation. We
implement our installed sales programs through independent qualified
contractors and strategic partners in the U.S., Canada and Mexico. These
programs include the installation of products that are sold in our stores, such
as carpeting, hard flooring, cabinets and solid surface countertops, as well as
the installation by strategic partners of products such as roofing, generators
and furnace and central air systems.
STORE-RELATED PROGRAMS. We continually assess our business to find
opportunities to increase customer loyalty, thereby increasing sales.
Accordingly, we implemented or expanded a number of in-store initiatives in
Home Depot stores and programs aimed at supporting store operations during
fiscal 2002, including:
- Professional Business Customer Initiative. We are committed
to being the supplier of choice to a variety of professional
customers, including remodelers, carpenters, plumbers,
painters, electricians, building maintenance professionals
and designers. During fiscal 2002, we continued to expand our
"Pro" initiative, which adds service-related programs to our
stores that are designed to increase sales to professional
customers. Stores participating in the program have added
associates at a sales desk dedicated to providing more
personalized service to professional customers, including
managing accounts and taking and filling orders for pick-up
or delivery. Additionally, during the hours when
professionals typically shop, these stores have assigned
sales associates in certain departments to assist these
customers. To better serve our professional customers, we
have also increased quantities of existing products typically
purchased by professionals in bulk quantities, and we offer
certain items in each department packaged in bulk to offer
additional savings. While aimed at the professional customer,
this program also enables us to better serve our D-I-Y
customer with improved customer service, including delivery
and will-call services, expanded credit programs and
additional merchandise. Through this initiative, we have
identified best practices in serving our professional
customers that are being implemented in many of our stores
without material additional costs. By the end of fiscal 2002,
we had expanded the Pro initiative into 1,135 stores, 600 of
which were added during the year. We anticipate that during
fiscal 2003, we will expand this initiative to more than 204
additional stores.
- SPI Program. During fiscal 2002, we implemented the Service
Performance Improvement or "SPI" program in all of our new
stores. Through the program, certain associates are assigned
specific tasks, allowing others to focus on assisting
customers. Additionally, we schedule associates to receive
shipments and stock merchandise when our stores are closed or
during hours when they have fewer customers.
- Appliance Sales. During fiscal 2002, we continued the
roll-out of our appliance sales program to our stores in the
U.S. Through this program we sell appliances manufactured by
General Electric(R), Maytag(R) and other manufacturers
through 1,500 to 2,000 feet of dedicated appliance selling
space in selected stores. We display and stock the more
popular appliances in our stores and offer the ability to
special order over 2,300 additional products through computer
kiosks located in the stores. Through the computer kiosks we
can check inventory and arrange for delivery to the customer
directly from the manufacturer as soon as 48 hours after the
order is placed. 743 of our stores had appliance showrooms at
the end of fiscal 2002, and we anticipate adding the
appliance sales program to an additional 671 stores by the
end of fiscal 2003.
5
<PAGE>
- Designplace Initiative. We continued to implement our
Designplace initiative during fiscal 2002, rolling the
initiative out to an additional 668 stores. The initiative
offers an enhanced shopping experience to our design and
decor customers by providing personalized service from
specially trained associates and enhanced merchandise
selection in an attractive setting. We expect to add the
Designplace initiative to an additional 556 stores during
fiscal 2003.
- Tool Rental. As part of our efforts to satisfy a broad range
of the needs of our professional and D-I-Y customers, we
offer a tool rental service in certain stores. Under this
program, we rent approximately 200 commercial-quality tools
in ten categories, including saws, floor sanders, generators,
gas powered lawn equipment and plumbing tools. Customers can
rent the tools on an hourly, daily, weekly or monthly basis.
Our associates who work in the tool rental area receive
special training in the use and maintenance of the tools. At
the end of fiscal 2002, we offered tool rental service in 601
stores compared to 466 stores at the end of fiscal 2001. By
the end of fiscal 2003, we anticipate having tool rental
services in approximately 800 stores. We believe that
offering this service increases the sales of related
merchandise without reducing the sales of equipment similar
to that available for rental.
- Customer Contact Center. During fiscal 2001, we began testing
the use of a customer contact center to assist with
expediting special orders and managing installation projects.
The customer contact center also supports the sale and
installation of water heaters and HVAC equipment nationwide.
Calls come into the center where customer service
representatives assist customers with product selection and
scheduling installations. The orders are then fulfilled
through our stores. We believe that the customer contact
center will allow us to provide better customer service, both
in our stores and on the phone, while reducing costs. We
anticipate continuing this test during fiscal 2003.
- Customer Education Programs. We offer several programs to
enhance the skills and confidence of our D-I-Y customers. Our
associates and vendors teach "how-to" clinics that focus on
D-I-Y projects, such as installing garbage disposals, laying
patio pavers or building a deck. In addition to the clinics,
we offer Home Depot University(SM), which presents four-week
modules allowing our customers to learn about several facets
of a home improvement topic. For example, a room enhancement
module may provide instruction on paint, wallpaper and window
treatments. Through The Home Depot's Kids Workshop(SM)
program, children are instructed in tool safety and complete a
small building project, such as a birdhouse or tool box. We
believe that these types of educational programs increase our
sales by encouraging our customers to undertake more projects,
differentiating us from our competition and reinforcing our
position as experts in home improvement.
STORE GROWTH
United States. At the end of fiscal 2002, we were operating 1,370 Home Depot
stores in the United States, including Puerto Rico. During fiscal 2002, we
opened 167 new Home Depot stores in the U.S. Although these new store openings
occurred primarily in existing markets, we continued our geographic expansion
by opening stores in a number of new markets.
To increase customer service levels, gain incremental sales and enhance
long-term market penetration, we often open new stores near the edge of market
areas served by existing stores. While these openings may initially have a
negative impact on comparable store-for-store sales, we believe this
"cannibalization" strategy increases customer satisfaction and overall market
share by reducing delays in shopping, increasing utilization by existing
customers and attracting new customers to more
6
<PAGE>
convenient locations. At the end of fiscal 2002, we believe that approximately
21% of our stores were cannibalized by certain new stores.
Canada. At the end of fiscal 2002, we were operating 89 Home Depot stores in
seven Canadian provinces. Of these stores, 11 were opened during fiscal 2002.
Mexico. In June 2002, we purchased the assets of Madereria Del Norte, a
four-store chain of home improvement stores in Juarez, Mexico. At the end of
fiscal 2002, we were operating 12 stores in Mexico.
HOME DEPOT URBAN STORES
We opened our first two urban stores in fiscal 2002. The first opened in
Brooklyn with approximately 61,000 square feet and the second opened in Staten
Island with approximately 79,000 square feet. These stores will carry
approximately 20,000 items, which are selected specifically for the
neighborhood in which the store is located. We plan to open two other urban
stores in fiscal 2003. We are continuing to analyze other urban and
high-density suburban markets throughout the country for additional sites to
test this smaller store concept.
EXPO DESIGN CENTER STORES
OPERATING STRATEGY. The operating strategy behind our EXPO Design Center stores
is to be a complete home decorating and remodeling resource. Each of these
stores offers 10 specialty businesses under one roof and features design
showrooms with full-size displays to help customers visualize the end result of
possible interior design projects. To assist our customers, we also offer
complete project management and installation services. Accordingly, we employ
associates who have expertise in designing, planning and completing decorating
and remodeling projects.
CUSTOMERS. Typically, customers at EXPO Design Center stores are middle to
upper income D-I-F-M customers, who purchase merchandise for installation by
others. Accordingly, we offer installation services for most of the products we
sell at these stores. Additionally, our trade customers are generally custom
builders, remodelers, designers and architects.
PRODUCTS. EXPO Design Center stores offer interior design products and
installation services for kitchens, baths and appliances, as well as products
for lighting, decorating and storage and organization projects.
EXPO Design Center stores offer a broad range of merchandise in an effort to
meet the needs of shoppers whose interior design preferences may go beyond the
items available in a Home Depot store. While there is minimal overlap between
the products offered in Home Depot stores and EXPO Design Center stores, those
products available at EXPO Design Center stores represent a broader and more
unique assortment of merchandise. In addition to nationally advertised brand
name products, we also offer items that must be special ordered or that are
typically offered through showrooms open only to design professionals.
IN-STORE SERVICES. We have associates at our EXPO Design Center stores to
assist with every phase of a project. Certified kitchen and bath designers are
on staff, as well as design professionals to help our customers design
lighting, tile and flooring, custom upholstery and bedding, custom closets and
window treatments. Installation services are available for most products at
EXPO Design Center stores, including kitchens, baths, flooring, wallpaper,
tile, lighting fixtures and window treatments. Our project managers ensure that
the products are available and then schedule licensed third party
7
<PAGE>
contractors to complete the work. We also offer special trade services, such as
dedicated outside sales people and designers who are dedicated to helping
professional customers.
STORE GROWTH. At the end of fiscal 2002, we were operating 52 EXPO Design
Center stores, 11 of which were opened during 2002. We currently anticipate
opening two additional EXPO Design Center stores in 2003. These new stores are
expected to average approximately 90,000 square feet and will incorporate a
showroom environment.
We currently plan to open total of 206 stores during fiscal 2003, including
Home Depot stores, EXPO Design Center stores and other formats.
OTHER BUSINESSES
APEX SUPPLY COMPANY
Apex Supply Company is a wholesale distributor of plumbing, HVAC, appliances
and other related products. The Company employs approximately 570 associates
through 23 locations in Florida, Georgia, South Carolina and Tennessee. Apex
assisted us with the development of our HVAC installation program.
GEORGIA LIGHTING
Georgia Lighting is a specialty lighting designer, distributor and retailer
based in Atlanta, Georgia. The company, which has five showroom locations,
offers an extensive collection of decorative lighting fixtures, supplies,
accents and accessories to commercial and retail customers. We believe that the
acquisition of Georgia Lighting has allowed us to strengthen our sourcing,
training and merchandising in lighting for both The Home Depot and EXPO Design
Center stores. In fiscal 2003, Georgia Lighting will transfer its retail
operations to EXPO Design Center and its distribution operations to Your
"other" Warehouse.
HD BUILDER SOLUTIONS GROUP
In October 2002, we became the largest residential floor covering company
servicing the new home construction industry through our acquisition of Floors,
Inc., Arvada Hardwood Floor Company and FloorWorks, Inc. As a result of these
acquisitions, HD Builder Solutions Group has relationships with each of the top
10 homebuilders in the United States, as well as other regional and local
homebuilders. Through these operations we manage the complete new-home flooring
process, from helping the homebuilder's customer make flooring design choices
to scheduling and overseeing the installation of flooring for entire housing
developments. We currently conduct operations from 16 facilities and employ
approximately 1,100 associates.
HOME DEPOT LANDSCAPE SUPPLY
During fiscal 2002, we opened three Home Depot Landscape Supply stores in the
Atlanta, Georgia market. Home Depot Landscape Supply locations are designed to
extend the reach of Home Depot's garden departments, focusing on the
professional landscapers and avid do-it-yourself garden enthusiasts. Each
location has a heated/cooled space of about 12,000 square feet, complete with a
tool rental department, in front of a covered greenhouse. Each site also
features a 1 to 3 acre fenced-in "Pro-Yard." During fiscal 2003, we plan to
open six additional stores in Georgia and Texas.
8
<PAGE>
HOME DEPOT SUPPLY
Home Depot Supply stores offer personal service to contractors and other
professional customers by providing experienced account managers, expanded
assortments, greater quantities of merchandise and expanded delivery services.
At the end of fiscal 2002, we were operating 5 of these stores in California,
Arizona, Texas and Colorado.
MAINTENANCE WAREHOUSE
Our Maintenance Warehouse subsidiary is a leading distributor of maintenance,
repair and operating supplies to the multi-family housing and lodging
industries. Through its catalogs and direct mail programs, Maintenance
Warehouse offers approximately 12,500 items. Maintenance Warehouse, which
employs approximately 1,400 people, emphasizes accurate order taking, delivery
and personalized service. Orders are typically placed over the telephone,
through a field sales representative or through the company's website at
www.mwh.com. Orders are filled through one of Maintenance Warehouse's 21
distribution centers and are shipped for same-day or next-day delivery to
customers across the United States.
NATIONAL BLINDS & WALLPAPER
National Blinds and Wallpaper sells decor products through telephone sales
under the name Designplace Direct(SM). Designplace Direct markets primarily
through Home Depot advertising and direct mail pieces. Designplace Direct
maintains no inventory, as orders are shipped directly from the supplier to the
customer.
THE HOME DEPOT FLOOR STORE
During fiscal 2000, we opened a test store in Plano, Texas that offers only
flooring products. The Home Depot Floor Store's merchandise assortment includes
carpet, ceramic, wood, laminate and vinyl flooring. We continue to analyze the
results of this test.
YOUR "OTHER" WAREHOUSE
Acquired in November 2001, Your "other" Warehouse is a distributor of special
order faucet and plumbing fixture products, serving both Home Depot and other
third party resellers. Your "other" Warehouse carries over 36,000 products from
over 100 plumbing vendors, including Kohler(R), American Standard(R) and other
major manufacturers. Your "other" Warehouse operates five distribution
facilities and a call center.
INTERNET
Our primary website is located at www.homedepot.com. The site offers an
assortment of products available for sale on-line, information about projects
and our products, calculators to estimate the amount and kinds of materials
needed to complete a project, as well as information about our Company and
links to our other on-line businesses. As with our stores, the focus of our
website is customer service. We believe our Internet site provides us with an
opportunity to build relationships with our customers, educate our customers,
improve service, provide convenient shopping from home and increase store
sales. Customers may also order select products from www.expo.com, the website
of our EXPO Design Center stores, and obtain information about these stores and
the products and services they offer.
9
<PAGE>
Through www.homedepot.com, we offer an assortment of approximately 18,000 items
for sale. These items are chosen based on their potential for online sales and
their ability to be delivered via United Parcel Service(R) and FedEx(R).
Managing product selection and pricing nationally allows us to promote the same
product and price to all www.homedepot.com visitors and allows us to leverage
certain online marketing channels that reach across many or all Home Depot
store pricing markets.
During fiscal 2002, we enhanced the content of the website associated with our
At-Home Services Division to describe each of the services offered and added
the capability to allow potential customers to conveniently sign up online for
in-home consultations. We anticipate continuing to improve the quality and
quantity of services-related content on the site.
In fiscal 2002, the website www.homedepot.ca was launched to service our
Canadian customers. The site is informational only and provides information on
The Home Depot, a store locator, as well as a link to www.homedepot.com. The
website is bilingual (English and French) to service our customers in Canada's
two official languages.
STORE SUPPORT SERVICES
INFORMATION TECHNOLOGIES. During fiscal 2002, the Company increased its focus
on the information technology needs of our growing business and family of
companies. Currently we provide business information through extensive
fault-tolerant, high-speed networks and through an array of approximately
135,000 personal computers, 7,000 servers and 125,000 other network-connected
devices. These systems provide store, corporate, financial, merchandising and
other back office function support.
During fiscal 2002, the Company began the installation of self-checkout
systems, as well as a total replacement and upgrade of our POS systems. In
addition, store managers received new tools for labor planning, staffing,
scheduling and workload management to better allocate associates to support
customer service and improve execution of in-store initiatives. The Company
also deployed automated tools to assist our merchants with assortment planning,
pricing, markdown management and space management. We have also implemented an
enterprise-wide data warehouse to capture, manage and report information
relating to our customers and associates. We believe these system enhancements
will provide more efficient customer check-out and returns, store-based
inventory management, rapid order replenishment, labor planning support and
improved analytical tools.
While our technology investments are primarily focused on our stores, we are
also making technology improvements in logistics and the administrative
functions of the Company. During fiscal 2002, we continued multi-year projects
to upgrade our human resources and enterprise financial systems. We believe
these investments will help us manage and control the growth and increasing
complexity of our business, as well as provide more comprehensive management
reporting.
ASSOCIATE DEVELOPMENT. At the end of fiscal 2002, we employed over 280,000
associates, of whom approximately 17,000 were salaried, with the remainder
compensated on an hourly basis. Approximately 63% of our associates are
employed on a full-time basis. We believe that our employee relations are good.
To attract and retain qualified personnel, we seek to maintain competitive
salary and wage levels in each market area. Store managers have access to
information regarding competitive salary rates in their respective markets.
10
<PAGE>
We develop our training programs in a continuing effort to service the needs of
our associates. These programs, including mandatory product knowledge training
classes, are designed to increase associates' knowledge of merchandising
departments and products, and to educate, develop and test the skills of those
associates who are interested in being promoted. Because we promote or relocate
current associates to serve as managers and assistant managers for new stores,
training and assessment of our associates is essential to our growth. Our
district managers and store managers typically meet with our human resources
managers to discuss the development of assistant managers and certain
department heads and consider possible candidates for promotion.
We have implemented programs in our stores and divisional offices to ensure we
hire and promote the most qualified associates in a non-discriminatory way. One
of the most significant programs we have is our annual Human Resources Review
process, which assesses leaders and teams, reviews succession planning and
executive pipeline, high potential associates, staffing, retention, diversity,
training and compliance. The program is closely linked to our Performance
Management Process, which evaluates the performance, leadership and potential
of all associates. We also maintain a list of qualified associates who are
interested in new assignments and of qualified outside applicants that can be
reviewed when positions become available.
MARKETING. We are one of the nation's largest retail advertisers, and we utilize
all forms of mass media and selected forms of highly targeted media. We also
incorporate major sponsorships into our marketing plan, such as NASCAR(R), the
Olympic(R) games, The Home Depot Center, CBS(R) College Football and home and
garden shows. We extend our reach and educate our customers through proprietary
publications, such as the 1-2-3(SM) home improvement book series and Style
Ideas(SM) magazine.
We execute our marketing campaigns on both a national and local basis. Because
the vast majority of our stores are located throughout the United States and
Canada, we can achieve greater efficiencies than smaller retailers by using
national advertising. At the same time, we tailor the majority of our
advertising locally to respond to market differences, both in terms of products
and the competitive environment.
CREDIT SERVICES. Home Depot offers credit purchase programs through third-party
credit providers to both professional customers and D-I-Y and D-I-F-M
customers. In fiscal 2002, 3.3 million of these new Home Depot credit accounts
were opened, bringing the total number of Home Depot account holders to
approximately 12 million. Proprietary credit card sales accounted for
approximately 23% of all Home Depot sales in fiscal 2002. We also offer an
unsecured Home Improvement Loan that gives our customers the opportunity to
purchase products and services in our stores. We believe that this loan program
not only increases large sales, such as kitchen and bath remodels, but also
generates incremental sales from our customers.
INTELLECTUAL PROPERTY. Through our wholly-owned subsidiary, Homer TLC, Inc., we
have registered or applied for registration for a variety of trade names,
service marks, trademarks and copyrights for use in our business, including The
Home Depot(R), the "Homer"(R) character, EXPO Design Center(R) stores, Hampton
Bay(R) fans, lighting and accessories, Glacier Bay(R) toilets, sinks and
faucets, Pegasus(R) faucets and bath accessories, Traffic Master(R) carpet,
Commercial Electric(R) lighting fixtures, Workforce(R) tools, tool boxes and
shelving and PremiumCut(R) lumber. We regard our intellectual property as
having significant value and as being an important factor in the marketing of
our Company and our stores. We are not aware of any facts that could be
expected to negatively impact our intellectual property.
11
<PAGE>
QUALITY ASSURANCE PROGRAM. For our globally sourced products that we directly
import, we have a quality assurance program. Through this program, we have
established criteria for vendor or factory and product performance, which
measure factors including product quality, timely shipments and fill rate. The
performance record is made available to the factories to allow them to strive
for improvement. The quality assurance program has four components:
- we authorize laboratories to test products prior to purchase
to ensure compliance with requirements;
- we develop and document product requirements, based on test
results, applicable national and international standards and
features determined by our merchants;
- we assess the capability of factories to manufacture quality
products that meet the expectations we have developed, as
well as to assess their compliance with Home Depot policies;
and
- we routinely assess product quality and factory performance
by conducting inspections at the factory on shipments to
assure continued compliance with our product requirements.
LOGISTICS. We use several mechanisms to lower distribution costs and increase
our efficiencies. Import distribution centers process our globally-sourced
merchandise. At the end of fiscal 2002, we had eight import distribution
centers located in the United States and Canada. At the end of fiscal 2002, we
also had 30 lumber distribution centers in the United States and Canada to
support the lumber demands of our stores. During fiscal 2002, we opened seven
transit facilities, increasing our transit facility network to ten. At these
facilities, we receive merchandise from manufacturers and immediately cross
dock it onto trucks for delivery to our stores. We plan to add between four and
six transit facilities in fiscal 2003. The transit facility network will
provide service to all stores in the continental United States and to eastern
Canada by the end of 2003. We also operate other specialty distribution centers
for specific merchandise needs. The distribution centers and transit facilities
allow us to provide high service levels to our stores at relatively low costs.
At the end of fiscal 2002, approximately 30% of the merchandise shipped to our
stores was processed through our network of distribution centers and transit
facilities. As our networks evolve, we expect to increase the percent of
merchandise processed by our facilities. The remaining merchandise will be
shipped directly from our vendors to our stores.
In addition to replenishing merchandise supplies at our stores, we also provide
delivery services directly to our customers. We continually assess
opportunities to improve our distribution network to better satisfy the needs
of our stores and our customers and to lower costs.
SAFETY. We are committed to maintaining a safe environment for our customers
and associates. Our Safety Department consists of a team of directors and
managers in the field focused primarily on education and training, as well as
an Atlanta-based team of dedicated safety professionals who evaluate and
implement policies and processes Company-wide. Our Safety Department is
responsible for managing our Company's safety program, which is implemented in
conjunction with store-level associates, store and Division management, and the
Human Resources and Merchandising Departments. The primary elements of our
safety program are (1) establishment of safety standards and processes for all
aspects of store operations and merchandising, (2) effective training of
appropriate associates on all applicable standards and (3) monitoring
compliance with established safety standards.
12
<PAGE>
COMPETITION. Our business is highly competitive, based in part on price, store
location, customer service and depth of merchandise. In each of the markets we
serve, there are a number of other home improvement stores, electrical,
plumbing and building materials supply houses and lumber yards. With respect to
some products, we also compete with discount stores, local, regional and
national hardware stores, mail order firms, warehouse clubs, independent
building supply stores and, to a lesser extent, other retailers. In addition to
these entities, our EXPO Design Center stores also compete with specialty
design stores or showrooms, some of which are only open to interior design
professionals. Due to the variety of competition we face, we are unable to
precisely measure the impact on our sales by our competitors. We estimate that
our share of the home improvement industry is approximately 10% and we believe
that we are an effective and significant competitor in our markets.
13
<PAGE>
ITEM 2. PROPERTIES
The following tables show locations of the 1,370 Home Depot stores in the
United States and the 101 stores outside of the United States at the end of
fiscal 2002:
<TABLE>
<CAPTION>
U.S. Locations Number of Stores
- -------------- ----------------
<S> <C>
Alabama 15
Alaska 2
Arizona 37
Arkansas 5
California 163
Colorado 28
Connecticut 21
Delaware 5
District of Columbia 1
Florida 109
Georgia 56
Hawaii 4
Idaho 8
Illinois 47
Indiana 19
Iowa 6
Kansas 12
Kentucky 11
Louisiana 18
Maine 8
Maryland 35
Massachusetts 33
Michigan 59
Minnesota 25
Mississippi 7
Missouri 23
Montana 5
Nebraska 5
Nevada 14
New Hampshire 12
New Jersey 56
New Mexico 9
New York 76
North Carolina 33
North Dakota 1
Ohio 55
Oklahoma 10
Oregon 15
Pennsylvania 48
Puerto Rico 8
Rhode Island 5
South Carolina 18
South Dakota 1
Tennessee 25
Texas 121
Utah 12
Vermont 2
Virginia 34
Washington 25
Wisconsin 21
Wyoming 2
- -------------------- -----
Total U.S. 1,370
</TABLE>
<TABLE>
<CAPTION>
International
Locations Number of Stores
- ------------- ----------------
<S> <C>
Canada:
Alberta 10
British Columbia 12
Manitoba 3
Nova Scotia 2
Ontario 49
Quebec 11
Saskatchewan 2
- -------------------- ---
Total Canada 89
Mexico:
Nuevo Leon 3
Chihuahua 4
Distrito Federal 1
Baja California 2
San Luis Potosi 1
Sinaloa 1
- -------------------- -----
Total Mexico 12
</TABLE>
14
<PAGE>
The following table shows the number of the EXPO Design Center stores in the
U.S. at the end of fiscal 2002:
<TABLE>
<CAPTION>
U.S. Locations Number of Stores
- -------------- ----------------------
<S> <C>
California 14
Colorado 1
Florida 5
Georgia 3
Illinois 5
Kansas 1
Maryland 2
Massachusetts 2
Michigan 3
Missouri 1
New Jersey 3
New York 5
Tennessee 1
Texas 5
Virginia 1
- -------------------------- --
Total EXPO Design Center 52
</TABLE>
Additionally, at the end of fiscal 2002, we were operating five Georgia
Lighting showroom locations that are open to the public, all of which are
located in Georgia; 23 Apex Supply locations, of which two are located in
Florida, 15 are located in Georgia, four are located in Tennessee and two are
located in South Carolina; five Home Depot Supply Stores located in California,
Arizona, Texas and Colorado; three Home Depot Landscape Supply stores located
in Georgia; one The Home Depot Floor Store location in Texas; and six Your
"other" Warehouse locations in Louisiana and Nevada.
HD Builder Solutions Group conducts its operations through 16 distribution
centers located in Arizona, Colorado, Florida, Kentucky, Maryland, New Jersey,
Ohio, Pennsylvania and Virginia. Maintenance Warehouse conducts its operations
through 21 distribution centers located in Arizona, California, Colorado,
Connecticut, Florida, Georgia, Maryland, Missouri, Ohio, Texas, Virginia,
Washington and Wisconsin.
Of our 1,532 Home Depot stores, EXPO Design Center stores, Home Depot Landscape
Supply, Home Depot Supply and The Home Depot Floor Store, at fiscal 2002 year
end, approximately 82% were owned (including those owned subject to a ground
lease) consisting of approximately 137,001,000 square feet, and approximately
18% were leased consisting of approximately 29,122,000 square feet. In recent
years, we have increased the relative percentage of new stores that are owned.
Although we take advantage of lease financing opportunities, we generally
prefer to own stores because of greater operating control and flexibility,
generally lower occupancy costs and certain other economic advantages. We
believe that at the end of existing lease terms, our current leased space can
be either relet or replaced by alternate space for lease or purchase that is
readily available.
Our executive, corporate staff and financial offices occupy approximately
1,774,000 square feet of leased and owned space in Atlanta, Georgia. In
addition, at the end of fiscal 2002, we occupied an aggregate of approximately
3,301,000 square feet, of which approximately 759,000 square feet is owned and
approximately 2,542,000 square feet is leased, for divisional store support
centers, subsidiary store support centers and subsidiary customer support
centers. At the end of fiscal 2002,
15
<PAGE>
the primary support centers were located in Orange, California; Tampa, Florida;
Atlanta, Georgia; Arlington Heights, Illinois; Canton, Massachusetts; South
Plainfield, New Jersey; Dallas, Texas; Tukwila, Washington; Scarborough,
Ontario and Quebec, Canada; Monterrey and Juarez, Mexico; and Shenzen and
Shanghai, China.
At the end of fiscal 2002, we utilized approximately 12,398,000 square feet of
warehousing and distribution space, of which approximately 3,166,000 is owned
and approximately 9,232,000 is leased.
ITEM 3. LEGAL PROCEEDINGS
The Company is a party to various legal proceedings arising in the ordinary
course of its business, but is not currently a party to any legal proceeding
that management believes will have a material adverse effect on our
consolidated financial position or our results of operations.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of security holders during the fourth
quarter of fiscal 2002.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
The information required by this item is incorporated herein by reference to
the section entitled "Corporate and Stockholder Information" in the Company's
2002 Annual Report, and is also attached in Exhibit 13.
ITEM 6. SELECTED CONSOLIDATED FINANCIAL DATA
The information required by this item is incorporated herein by reference to
the section entitled "Management's Discussion and Analysis of Results of
Operations and Financial Condition - Selected Consolidated Statements of
Earnings Data" in the Company's 2002 Annual Report, and attached in Exhibit 13
hereto.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL CONDITION
The information required by this item is incorporated herein by reference to
the section entitled "Management's Discussion and Analysis of Results of
Operations and Financial Condition" in the Company's 2002 Annual Report, and is
also attached in Exhibit 13 hereto.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The information required by this item is incorporated herein by reference to
the section entitled "Management's Discussion and Analysis of Results of
Operations and Financial Condition - Quantitative and Qualitative Disclosures
about Market Risk" in the Company's 2002 Annual Report, and is also attached in
Exhibit 13 hereto.
16
<PAGE>
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The information required by this item is incorporated herein by reference to
the sections entitled "Consolidated Statements of Earnings," "Consolidated
Balance Sheets," "Consolidated Statements of Stockholders' Equity and
Comprehensive Income," "Consolidated Statements of Cash Flows," "Notes to
Consolidated Financial Statements" and "Independent Auditors' Report" in the
Company's 2002 Annual Report, and is also attached in Exhibit 13 hereto.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Information concerning the directors of the Company and compliance with Section
16(a) of the Securities and Exchange Act of 1934, as amended, is incorporated
herein by reference to the sections entitled "Board of Directors Information,"
"Election of Directors" and "General - Compliance with Section 16(a) Beneficial
Ownership Reporting Requirements," in the Company's Proxy Statement for the
Annual Meeting of Stockholders to be held on May 30, 2003 (the "Proxy
Statement"). The Company intends to file the Proxy Statement within 120 days
after the end of its fiscal year.
EXECUTIVE OFFICERS
Executive officers of The Home Depot are elected by, and serve at the pleasure
of, the Board of Directors. At the end of fiscal 2002, the Executive Officers
of the Company were as follows:
ROBERT L. NARDELLI, age 54, has been President and Chief Executive Officer
since December 2000 and Chairman since January 1, 2002. Prior thereto, Mr.
Nardelli served as President and Chief Executive Officer of GE Power Systems, a
division of General Electric Company, since 1995. Mr. Nardelli serves as a
director of The Coca-Cola Company.
FRANCIS S. BLAKE, age 53, has been Executive Vice President - Business
Development and Corporate Operations since March 2002. He was formerly the
Deputy Secretary of Energy from May 2001 until March 2002. From June 2000 until
May 2001 he was a Senior Vice President at General Electric Company and was
Vice President of GE Power Systems, a division of General Electric Company,
from February 1996 until June 2000.
JOHN H. COSTELLO, age 55, has been Executive Vice President - Chief Marketing
Officer since November 2002. He was previously the Advisor and Chief Global
Marketing Officer for Yahoo! from September 2001 until November 2002. From
September 1999 until August 2001 he was the Chief Executive Officer of MVP.com.
He was President of AutoNation from December 1998 until August 1999 and Senior
Executive Vice President of Sears from April 1993 until December 1998.
ROBERT P. DERODES, age 52, has been Executive Vice President - Information
Technology and Chief Information Officer since February 2002. He previously
served as President and Chief Executive Officer of Delta Technology, Inc. and
Chief Information Officer for Delta Airlines, Inc. from September 1999 until
February 2002. From February 1995 until September 1999 he was Senior
17
<PAGE>
Vice President - Operations and Technology for Delta Technology, Inc. From
February 1995 to September 1999, he served as Senior Technology Officer at
Citibank for the Card Products Group.
DENNIS M. DONOVAN, age 54, has been Executive Vice President - Human Resources
since April 2001. From October 1998 until that time he served as Senior Vice
President - Human Resources of Raytheon Company, and from February 1986 until
September 1998 he served as Vice President - Human Resources of GE Power
Systems, a division of General Electric Company.
JERRY W. EDWARDS, age 61, has been Executive Vice President - Merchandising
since February 2002. From August 2001 until that time he was Senior Vice
President - Merchandising. He served as President of the South American
Division from November 2000 until August 2001 and President of the Southwest
Division from January 1999 until November 2000. From January 1997 until
December 1998 he was Vice President - Merchandising of the Southwest Division.
FRANK L. FERNANDEZ, age 52, has been Executive Vice President - Corporate
Secretary & General Counsel since April 2001. From 1990 until that time he was
managing partner at Fernandez, Burstein, Tuckzinski and Collura, P.C., in
Albany, New York.
TROY A. RICE, age 39, has been Senior Vice President - Operations since August
2002. He was previously President of the Northwest Division from August 2001
until August 2002. From July 1999 until August 2001 he was a Regional Vice
President. From August 1996 to July 1999 he was a District Manager.
CAROL B. TOME, age 46, has been Executive Vice President and Chief Financial
Officer since May 2001, and prior thereto had been Senior Vice President -
Finance and Accounting/Treasurer since February 2000. From 1995 until 2000, she
served as Vice President and Treasurer. From 1992 until 1995, when she joined
The Home Depot, Ms. Tome was Vice President and Treasurer of Riverwood
International Corporation. Ms. Tome serves as a director of United Parcel
Service, Inc.
ITEM 11. EXECUTIVE COMPENSATION
The information required by this item is incorporated by reference to the
sections entitled "Executive Compensation," "Compensation Committee Report,"
"Board of Directors Information" and "General - Compensation Committee
Interlocks and Insider Participation" in the Company's Proxy Statement.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS
The information required by this item is incorporated by reference to the
sections entitled "Beneficial Ownership of Common Stock" and "Executive
Compensation" in the Company's Proxy Statement.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information required by this item is incorporated by reference to the
sections entitled "Executive Compensation" and "General - Insider Transactions"
in the Company's Proxy Statement.
ITEM 14. CONTROLS AND PROCEDURES
The Company maintains disclosure controls and procedures that are designed to
ensure that information required to be disclosed in the Company's Securities
Exchange Act reports is recorded, processed, summarized and reported within the
time periods specified in the Securities and Exchange
18
<PAGE>
Commission's rules and forms, and that such information is accumulated and
communicated to the Company's management, including the Chief Executive Officer
and Chief Financial Officer, as appropriate, to allow timely decisions
regarding required disclosure.
During the 90-day period prior to the date of this report, an evaluation was
performed under the supervision and with the participation of the Company's
Disclosure Committee and management, including the Chief Executive Officer and
the Chief Financial Officer, of the effectiveness of the design and operation
of the Company's disclosure controls and procedures. Based upon that
evaluation, the Chief Executive Officer and the Chief Financial Officer
concluded that the Company's disclosure controls and procedures were effective.
There have been no significant changes in the Company's internal controls or in
other factors that could significantly affect these controls, and no corrective
actions taken with regard to significant deficiencies or material weaknesses in
such controls, subsequent to the date of our most recent evaluation of internal
controls.
PART IV
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) 1. Financial Statements
The following financial statements are incorporated by reference from our
fiscal 2002 Annual Report, as provided in Item 8 hereof:
- Consolidated Statements of Earnings for the fiscal years
ended February 2, 2003, February 3, 2002 and January 28,
2001;
- Consolidated Balance Sheets as of February 2, 2003 and
February 3, 2002;
- Consolidated Statements of Stockholders' Equity and
Comprehensive Income for the fiscal years ended February 2,
2003, February 3, 2002 and January 28, 2001;
- Consolidated Statements of Cash Flows for the fiscal years
ended February 2, 2003, February 3, 2002 and January 28,
2001;
- Notes to Consolidated Financial Statements, and
- Independent Auditors' Report.
(c) Financial Statement Schedules
All schedules are omitted as the required information is inapplicable or the
information is presented in the consolidated financial statements or related
notes.
(c) Reports on Form 8-K
There were no Current Reports on Form 8-K filed during the fourth quarter of
fiscal 2002.
19
<PAGE>
(c) Exhibits
Exhibits marked with an asterisk (*) are incorporated by reference to exhibits
or appendices previously filed with the SEC, as indicated by the references in
brackets.
The Registrant agrees to furnish a copy of all agreements relating to long-term
debt upon request of the Commission.
<TABLE>
<S> <C>
*3.1 Amended and Restated Certificate of Incorporation of The Home Depot, Inc., as amended. [FORM 10-Q FOR THE FISCAL
QUARTER ENDED AUGUST 4, 2002, EXHIBIT 3.1]
*3.2 By-laws, as amended and restated. [FORM 10-K FOR THE FISCAL YEAR ENDED JANUARY 30, 2000, EXHIBIT 3.2]
*4.1 Indenture, dated as of September 27, 1999 among The Home Depot, Inc., Credit Suisse First Boston Corporation and
Invemed Associates. [FORM S-4 (FILE NO. 333-89935) FILED OCTOBER 29, 1999, EXHIBIT 4.1]
*4.2 Indenture, dated as of April 12, 2001, between The Home Depot, Inc. and The Bank of New York. [FORM S-4 (FILE NO.
333-61548) FILED MAY 24, 2001, EXHIBIT 4.1]
*4.3 Form of 5-3/8% Note due April 1, 2006 [FORM 10-K FOR THE FISCAL YEAR ENDED FEBRUARY 3, 2002, EXHIBIT 4.2]
*10.1 Credit Agreement dated September 17, 1999 (the "Credit Agreement") by and among The Home Depot, Inc., Bank of
America, N.A., as Administrative Agent, Wachovia Bank, N.A., as Syndication Agent, First Union National Bank and The
Bank of New York, as Co-Documentation Agents, and banks party thereto. [FORM 10-Q FOR THE FISCAL QUARTER ENDED
OCTOBER 31, 1999, EXHIBIT 10.1]
*10.2 Assignment and Acceptance of the Credit Agreement dated February 23, 2000 by and among The Home Depot, Inc., the
banks party thereto, Bank of America, N.A., as Administrative Agent, Wachovia Bank, N.A., as Syndication Agent, and
First Union National Bank and Bank of New York, as Co-Documentation Agents. [FORM 10-K FOR THE FISCAL YEAR ENDED
JANUARY 30, 2000, EXHIBIT 10.2]
*10.3 Assignment and Acceptance of the Credit Agreement dated March 31, 2000 by and among The Home Depot, Inc., the banks
party thereto, Bank of America, N.A., as Administrative Agent, Wachovia Bank, N.A., as Syndication Agent, and First
Union National Bank and The Bank of New York, as Co-Documentation Agents. [FORM 10-K FOR THE FISCAL YEAR ENDED
JANUARY 30, 2000, EXHIBIT 10.3]
*10.4 +Employee Stock Purchase Plan, as amended. [FORM 10-K FOR THE FISCAL YEAR ENDED JANUARY 28, 2001, EXHIBIT 10.5]
*10.5 +Senior Officers' Bonus Pool Plan, as amended. [APPENDIX A TO REGISTRANT'S PROXY STATEMENT FOR THE ANNUAL MEETING OF
STOCKHOLDERS HELD MAY 26, 1999]
*10.6 +Executive Officers' Bonus Plan. [APPENDIX B TO REGISTRANT'S PROXY STATEMENT FOR THE ANNUAL MEETING OF STOCKHOLDERS
HELD MAY 27, 1998]
*10.7 +The Home Depot, Inc. 1997 Omnibus Stock Incentive Plan. [FORM 10-Q FOR THE QUARTER ENDED AUGUST 4, 2002, EXHIBIT
10.1]
</TABLE>
20
<PAGE>
<TABLE>
<S> <C>
*10.8 +The Home Depot FutureBuilder Restoration Plan. [FORM 10-K FOR THE FISCAL YEAR ENDED FEBRUARY 3, 2002, EXHIBIT 10.10]
*10.9 Participation Agreement dated as of October 22, 1998 among The Home Depot, Inc. as Guarantor; Home Depot U.S.A., Inc.
as Lessee; HD Real Estate Funding Corp. II as Facility Lender; Credit Suisse Leasing 92A L.P. as Lessor; The Bank of
New York as Indenture Trustee; and Credit Suisse First Boston Corporation and Invemed Associates, Inc. as Initial
Purchasers. [FORM 10-K FOR THE YEAR ENDED JANUARY 31, 1999, EXHIBIT 10-10.]
*10.10 Participation Agreement dated as of June 25, 1996 among The Home Depot, Inc. as Guarantor; Home Depot U.S.A., Inc. as
Lessee and Construction Agent; HD Real Estate Funding Corp. as Facility Lender; the lenders named on the Schedule
thereto as Lenders; Credit Suisse First Boston Corporation as Agent Bank and Lender; and Credit Suisse Leasing 92A
L.P. as Lessor. [FORM 10-K FOR THE YEAR ENDED JANUARY 31, 1999, EXHIBIT 10.11]
*10.11 First Amendment and Supplement to the Participation Agreement dated as of May 8, 1997 among The Home Depot, Inc. as
Guarantor; Home Depot U.S.A., Inc. as Lessee and Construction Agent; HD Real Estate Funding Corp. as Facility Lender;
the lenders named on the Schedule thereto as Lenders; Credit Suisse First Boston Corporation as Agent Bank and
Lender; and Credit Suisse Leasing 92A L.P. as Lessor. [FORM 10-K FOR THE YEAR ENDED JANUARY 31, 1999, EXHIBIT 10-12.]
*10.12 Master Modification Agreement dated as of April 20, 1998 among The Home Depot, Inc. as Guarantor; Home Depot U.S.A.,
Inc., as Lessee and Construction Agent; HD Real Estate Funding Corp., as Facility Lender; Credit Suisse Leasing 92A
L.P. as Lessor; the lenders named on the Schedule thereto as Lenders; and Credit Suisse First Boston Corporation as
Agent Bank. [FORM 10-K FOR THE YEAR ENDED JANUARY 31, 1999, EXHIBIT 10.13]
*10.13 +Supplemental Executive Choice Program, effective January 1, 1999. [FORM 10-K FOR THE FISCAL YEAR ENDED FEBRUARY 3,
2002, EXHIBIT 10.15]
*10.14 +Employment Agreement between Robert L. Nardelli and The Home Depot, Inc., dated as of December 4, 2000. [FORM 10-Q
FOR THE QUARTER ENDED OCTOBER 28, 2001, EXHIBIT 10.1]
*10.15 +Promissory Note between Robert L. Nardelli and The Home Depot, Inc. dated as of December 4, 2000. [FORM 10-K FOR THE
YEAR ENDED JANUARY 28, 2001, EXHIBIT 10.18]
*10.16 +Deferred Stock Units Plan and Agreement between Robert L. Nardelli and The Home Depot, Inc., effective as of
September 17, 2001. [FORM 10-Q FOR THE QUARTER ENDED OCTOBER 28, 2001, EXHIBIT 10.2]
*10.17 Commercial Paper Dealer Agreement between Credit Suisse First Boston Corporation, as Dealer, and The Home Depot,
Inc., dated as of January 24, 2001. [FORM 10-K FOR THE YEAR ENDED JANUARY 28, 2001, EXHIBIT 10.19]
*10.18 +Non-Qualified Stock Option and Deferred Stock Unit Plan and Agreement dated as of December 4, 2001. [FORM 10-K FOR
THE YEAR ENDED JANUARY 28, 2001, EXHIBIT 10.20]
</TABLE>
21
<PAGE>
<TABLE>
<S> <C>
*10.19 +Agreement between Bernard Marcus and The Home Depot, Inc. dated as of February 22, 2001. [FORM 10-K FOR THE YEAR
ENDED JANUARY 28, 2001, EXHIBIT 10.21]
*10.20 +Employment Agreement between Dennis M. Donovan and The Home Depot, Inc., dated March 16, 2001. [FORM S-4 (FILE NO.
333-61548) FILED MAY 24, 2001, EXHIBIT 10.1]
*10.21 +Employment Agreement between Frank L. Fernandez and The Home Depot, Inc., dated April 2, 2001. [FORM S-4 (FILE NO.
333-61548) FILED MAY 24, 2001, EXHIBIT 10.2]
*10.22 +Deferred Stock Units Plan and Agreement between Frank L. Fernandez and The Home Depot, Inc. dated April 2, 2001.
[FORM S-4 (FILE NO. 333-61548) FILED MAY 24, 2001, EXHIBIT 10.3]
*10.23 +Deferred Stock Units Plan and Agreement between Dennis M. Donovan and The Home Depot, Inc., dated as of May 30,
2001. [FORM 10-K FOR THE FISCAL YEAR ENDED FEBRUARY 3, 2002, EXHIBIT 10.25]
*10.24 +Promissory Note between Dennis M. Donovan and The Home Depot, Inc. dated June 7, 2001. [FORM 10-K FOR THE FISCAL
YEAR ENDED FEBRUARY 3, 2002, EXHIBIT 10.26]
*10.25 +Promissory Note between Frank L. Fernandez and The Home Depot, Inc. dated June 18, 2001. [FORM 10-K FOR THE FISCAL
YEAR ENDED FEBRUARY 3, 2002, EXHIBIT 10.27]
*10.26 +Employment Agreement between Frank Blake and The Home Depot, Inc., effective as of March 9, 2002. [FORM 10-Q FOR THE
QUARTER ENDED NOVEMBER 3, 2002, EXHIBIT 10.1]
*10.27 +Employment Agreement between Robert DeRodes and The Home Depot, Inc., effective as of February 7, 2002. [FORM 10-Q
FOR THE QUARTER ENDED NOVEMBER 3, 2002, EXHIBIT 10.2]
*10.28 +Employment Agreement between John Costello and The Home Depot, Inc., effective as of September 28, 2002. [FORM 10-Q
FOR THE QUARTER ENDED NOVEMBER 3, 2002, EXHIBIT 10.3]
*10.29 +Separation Agreement and Release between Larry M. Mercer and The Home Depot, Inc., effective as of October 7, 2002.
[FORM 10-Q FOR THE QUARTER ENDED NOVEMBER 3, 2002, EXHIBIT 10.4]
10.30 +Non-Competition Agreement between Home Depot U.S.A., Inc. and Carol Tome dated as of March 24, 2003.
10.31 +Separation Agreement and Release between Home Depot U.S.A., Inc. and Dennis J. Carey effective as of August 21, 2002.
10.32 +Consulting Agreement between Home Depot U.S.A., Inc. and Dennis J. Carey effective as of August 14, 2002.
</TABLE>
22
<PAGE>
<TABLE>
<S> <C>
10.33 Commercial Paper Dealer Agreement between Home Depot U.S.A., Inc. and Chase Securities, Inc. dated as of April 19, 2001.
10.34 +The Maintenance Warehouse FutureBuilder, together with the First, Second and Third Amendments thereto.
10.35 +The Home Depot FutureBuilder for Puerto Rico, together with the First and Second Amendments thereto.
10.36 +The Home Depot, Inc. Non-U.S. Employee Stock Purchase Plan.
10.37 +The Home Depot, Inc. Non-Employee Director's Deferred Stock Compensation Plan.
10.38 +Home Depot U.S.A., Inc. Deferred Compensation Plan for Officers.
10.39 +The Home Depot Executive Life Insurance, Death Benefit Only Plan.
10.40 +The Home Depot Executive Physical Program.
*10.41 +The Home Depot Management Incentive Plan. [APPENDIX A TO REGISTRANT'S PROXY STATEMENT FOR THE ANNUAL
MEETING OF STOCKHOLDERS ON MAY 30, 2003]
10.42 +The Home Depot Long-Term Incentive Plan.
*11 Computation of Earnings Per Common and Common Equivalent Share. [NOTE 7 TO THE COMPANY'S CONSOLIDATED FINANCIAL
STATEMENTS INCLUDED IN THE COMPANY'S 2002 ANNUAL REPORT TO STOCKHOLDERS FILED HEREWITH AS EXHIBIT 13.]
13 The Registrant's Annual Report to Stockholders for the fiscal year ended February 2, 2003. Only those portions of the
report which are specifically designated in this Form 10-K as being incorporated by reference are being
electronically filed pursuant to the Securities Exchange Act of 1934, as amended.
21 List of Subsidiaries of the Registrant.
23 Consent of Independent Auditors.
99.1 Certification of Chief Executive Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002
99.2 Certification of Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002
</TABLE>
- ---------
+ Management contract or compensatory plan or arrangement required to be
filed as an exhibit pursuant to Item 15(c) of this report.
23
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
THE HOME DEPOT, INC.
By: /s/ Robert L. Nardelli
----------------------------------------
(Robert L. Nardelli, Chairman,
President & CEO)
Date: April 14, 2003
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant, The Home Depot, Inc., and in the capacities and on the dates
indicated.
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/ Robert L. Nardelli Chairman, President & CEO April 14, 2003
- ---------------------------- (Principal Executive Officer)
(Robert L. Nardelli)
/s/ Carol B. Tome Executive Vice President and April 14, 2003
- ---------------------------- Chief Financial Officer
(Carol B. Tome) (Principal Financial Officer
and Principal Accounting Officer)
</TABLE>
24
<PAGE>
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/ Gregory D. Brenneman Director 4/11/03
- ---------------------------- ------------------
(Gregory D. Brenneman)
/s/ Richard H. Brown Director 4/16/03
- ---------------------------- ------------------
V(Richard H. Brown)
/s/ John L. Clendenin Director 4/14/03
- ---------------------------- ------------------
V(John L. Clendenin)
/s/ Berry R. Cox Director 4/11/03
- ---------------------------- ------------------
(Berry R. Cox)
/s/ William S. Davila Director 4/10/03
- ---------------------------- ------------------
(William S. Davila)
/s/ Claudio X. Gonzalez Director 4/11/03
- ---------------------------- ------------------
(Claudio X. Gonzalez)
/s/ Richard A. Grasso Director 4/14/03
- ---------------------------- ------------------
Richard A. Grasso
/s/ Milledge A. Hart, III Director 4/14/03
- ---------------------------- ------------------
(Milledge A. Hart, III)
/s/ Bonnie G. Hill Director 4/13/03
- ---------------------------- ------------------
(Bonnie G. Hill)
/s/ Kenneth G. Langone Director 4/15/03
- ---------------------------- ------------------
(Kenneth G. Langone)
/s/ Roger S. Penske Director 4/14/03
- ---------------------------- ------------------
(Roger S. Penske)
</TABLE>
25
<PAGE>
CERTIFICATIONS
I, Robert L. Nardelli, certify that:
1. I have reviewed this annual report on Form 10-K of The Home Depot,
Inc.;
2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report;
4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:
(a) designed such disclosure controls and procedures to ensure
that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this annual report
is being prepared;
(b) evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to the
filing date of this annual report (the "Evaluation Date"); and
(c) presented in this annual report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officer and I have disclosed, based
on our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent functions):
(a) all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrant's
ability to record, process, summarize and report financial data and
have identified for the registrant's auditors any material weaknesses
in internal controls; and
(b) any fraud, whether or not material, that involves management
or other employees who have a significant role in the registrant's
internal controls; and
6. The registrant's other certifying officer and I have indicated in this
annual report whether there were significant changes in internal controls or in
other factors that could significantly affect internal controls subsequent to
the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.
Date: April 14, 2003
/s/ Robert L. Nardelli
Robert L. Nardelli
Chairman, President and
Chief Executive Officer
<PAGE>
CERTIFICATIONS
I, Carol B. Tome, certify that:
1. I have reviewed this annual report on Form 10-K of The Home Depot,
Inc.;
2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report;
4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:
(a) designed such disclosure controls and procedures to ensure
that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this annual report
is being prepared;
(b) evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to the
filing date of this annual report (the "Evaluation Date"); and
(c) presented in this annual report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officer and I have disclosed, based
on our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent functions):
(a) all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrant's
ability to record, process, summarize and report financial data and
have identified for the registrant's auditors any material weaknesses
in internal controls; and
(b) any fraud, whether or not material, that involves management
or other employees who have a significant role in the registrant's
internal controls; and
6. The registrant's other certifying officer and I have indicated in this
annual report whether there were significant changes in internal controls or in
other factors that could significantly affect internal controls subsequent to
the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.
Date: April 4, 2003
/s/ Carol B. Tome
Carol B. Tome
Executive Vice President and
Chief Financial Officer
<PAGE>
INDEX OF ATTACHED EXHIBITS
<TABLE>
<S> <C>
10.30 +Non-Competition Agreement between Home Depot U.S.A., Inc. and Carol Tome dated as of March 24, 2003.
10.31 +Separation Agreement and Release between Home Depot U.S.A., Inc. and Dennis J. Carey effective as of August 21, 2002.
10.32 +Consulting Agreement between Home Depot U.S.A., Inc. and Dennis J. Carey effective as of August 14, 2002.
10.33 Commercial Paper Dealer Agreement between Home Depot U.S.A., Inc. and Chase Securities, Inc. dated as of April 19, 2001.
10.34 +The Maintenance Warehouse FutureBuilder, together with the First, Second and Third Amendments thereto.
10.35 +The Home Depot FutureBuilder for Puerto Rico, together with the First and Second Amendments thereto.
10.36 +The Home Depot, Inc. Non-U.S. Employee Stock Purchase Plan.
10.37 +The Home Depot, Inc. Non-Employee Director's Deferred Stock Compensation Plan.
10.38 +Home Depot U.S.A., Inc. Deferred Compensation Plan for Officers.
10.39 +The Home Depot Executive Life Insurance, Death Benefit Only Plan.
10.40 +The Home Depot Executive Physical Program.
*10.41 +The Home Depot Management Incentive Plan. [APPENDIX A TO THE REGISTRANT'S PROXY STATEMENT FOR THE ANNUAL MEETING OF
STOCKHOLDERS ON MAY 30, 2003]
10.42 +The Home Depot Long-Term Incentive Plan.
13 The Registrant's Annual Report to Stockholders for the fiscal year ended February 2, 2003. Only those portions of the
report which are specifically designated in this Form 10-K as being incorporated by reference are being electronically
filed pursuant to the Securities Exchange Act of 1934, as amended.
21 List of Subsidiaries of the Registrant.
23 Consent of Independent Auditors.
99.1 Certification of Chief Executive Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002
99.2 Certification of Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002
</TABLE>
- ---------
+ Management contract or compensatory plan or arrangement required to be
filed as an exhibit pursuant to Item 15(c) of this report.
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.30
<SEQUENCE>3
<FILENAME>g81844exv10w30.txt
<DESCRIPTION>EX-10.30 NON-COMPETITION AGREEMENT
<TEXT>
<PAGE>
EXHIBIT 10.30
HOME DEPOT U.S.A., INC.
NON-COMPETITION AGREEMENT
This Non-Competition Agreement (the "Agreement") is entered into as of
the 24th day of March, 2003, by and between Home Depot U.S.A., Inc., a Delaware
corporation ("Home Depot" or the "Company") and Carol B. Tome ("Executive").
WITNESSETH:
WHEREAS, the Company desires to provide certain additional benefits to
Executive as approved by the Compensation Committee of the Company's Board of
Directors (the "Committee"); and
WHEREAS, in consideration for such benefits, Executive agrees to be
bound by the terms and conditions as set forth in this Agreement;
WHEREAS, to further the interests of the Company and Executive, the
parties hereto have set forth the terms of such benefits and conditions in
writing in the Agreement;
NOW, THEREFORE, for and in consideration of the mutual promises herein
contained, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
1. SEVERANCE PAYMENTS.
(a) In the event Home Depot terminates Executive's
employment involuntarily and without cause, Executive will be eligible to
receive, in exchange for Executive's execution of a general release in a form
acceptable to Home Depot's legal counsel, twenty-four (24) months of base
salary continuation (less applicable taxes and withholdings) in accordance with
the Company's normal payroll practices. The end of the salary continuation
period will be Executive's last day of employment ("Termination Date"). During
the period of salary continuation, outstanding options will continue to vest
and restrictions on outstanding restricted shares will continue to lapse.
Executive will have ninety (90) days from the Termination Date to exercise any
options that are vested at that time.
(b) Executive will not be entitled to receive these
payments and benefits in the event Executive voluntarily resigns from Home
Depot, but all other provisions of this Agreement shall remain in effect.
Executive will be entitled to receive the payments and benefits set forth in
this Agreement if Executive resigns for "good reason." "Good reason" shall
mean, without Executive's consent:
<PAGE>
(i) an assignment or restructured role outside
the Atlanta Metropolitan area;
(ii) an assignment or restructured role with a
decrease in base salary; or
(iii) an assignment to a position other than
Executive Vice President (EVP), or a
position that does not report to the CEO.
(c) Executive will not be entitled to receive these
payments and benefits in the event Executive is unable to continue employment
due to a death or disability; however, in such an event, Executive may be
eligible for disability or death benefits under the Company employee benefit
plans or programs in which Executive then participates, pursuant to the terms
and conditions of such plans and programs.
(d) Executive will not be entitled to receive these
payments and benefits, or any other type of payment or benefit, if Executive is
terminated "for cause." All other provisions of this Agreement shall remain in
effect. For purposes of this Agreement, "for cause" shall mean:
(i) Conviction of a felony involving theft or
moral turpitude;
(ii) Conduct that constitutes willful gross
neglect or willful gross misconduct with
respect to Executive's employment duties
which results in material economic harm to
the Company; or
(iii) Willful conduct that constitutes a material
violation of the Company's mutual
attraction policy, substance abuse policy,
or compliance policies (each as shall be in
place from time to time).
To the extent that any plan or program has a different definition of "for
cause," such definition shall control for purposes of benefits under such plan
or program.
2. CHANGE IN EMPLOYMENT STATUS.
If Executive is demoted to or voluntarily accepts a position
that the Company deems to be ineligible for the severance payments and benefits
set forth in Paragraph 1, Executive will not be entitled to receive such
payments and benefits upon termination.
2
<PAGE>
3. NON-COMPETITION AND NON-SOLICITATION.
(a) The Executive agrees that Executive will not, for a
period of thirty-six (36) months subsequent to the earlier of either (a) the
beginning of the salary continuation period referenced in Paragraph 1 or (b)
the Executive's Termination Date, enter into or maintain an employment or
contractual relationship, either directly or indirectly, to provide financial,
executive or managerial services in the same or similar manner as Executive did
for the Company to any company or entity in the home improvement industry
engaged in any way in a business that competes directly or indirectly with the
Company, its parents, subsidiaries, affiliates or related entities, in the
United States, Canada, Puerto Rico, Mexico, or any other location in which the
Company currently conducts business or may conduct business prior to the end of
the above-referenced thirty-six month period, without the prior written consent
of the Company. Businesses that compete with the Company in the home
improvement industry specifically include, but are not limited to, the
following entities and each of their subsidiaries, affiliates, assigns, or
successors in interest: Lowe's Companies, Inc. (including, but not limited to,
Eagle Hardware and Garden); Sears (including, but not limited to, Orchard
Supply and Hardware Company); Wal-Mart; and Menard, Inc.
(b) In the event the Executive wishes to enter into any
relationship or employment prior to the end of the period referenced in
Paragraph 3(a), which would be covered by the above non-compete provision,
Executive agrees to request written permission from the Executive Vice
President, Human Resources of the Company prior to entering any such
relationship or employment. The Company may approve or not approve of the
relationship or employment at its absolute discretion.
(c) The Executive agrees that for a period of thirty-six
(36) months subsequent to the termination of her employment, she will not
directly or indirectly solicit any person who is an employee of the Company to
terminate his or her relationship with the Company without prior written
approval from the Executive Vice President, Human Resources of the Company.
4. CONFIDENTIAL INFORMATION. The Executive acknowledges that
through her employment with the Company she has acquired and had access to the
Company's confidential and proprietary business information and trade secrets.
The Executive agrees that the Company may prevent the use or disclosure of its
confidential information and proprietary business information and trade secrets
and acknowledges that the Company has taken all reasonable steps necessary to
protect the secrecy of the information. "Confidential Information" shall
include any data or information that is valuable to the Company and not
generally known to competitors of the Company or other outsiders, regardless of
whether the confidential information is in printed, written or electronic form,
retained in the Executive's memory or has been compiled or created by the
Executive. This includes, but is not limited to: technical, financial,
personnel, staffing, payroll, computer systems, marketing, advertising,
merchandising, product, vendor, customer or store planning data, trade secrets,
or other information similar to the foregoing. The Executive agrees that she
3
<PAGE>
has not and in the future will not use or disclose to any third party
Confidential Information, unless compelled by law and after notice to the
Company.
5. MISCELLANEOUS.
(a) LIMITATION OF RIGHTS. The granting of the benefits
set forth in this Agreement and the execution of the Agreement shall not give
Executive any right to be retained in the employ or service of the Company, its
parents, subsidiaries, or affiliates or interfere in any way with the right of
the Company, its parents, subsidiaries, or affiliates to terminate Executive's
services at any time or to assign Executive to a position that is ineligible
for the severance benefits set forth herein, or the right of Executive to
terminate Executive's services at any time.
(b) SEVERABILITY. If any term, provision, covenant or
restriction contained in the Agreement is held by a court or a federal
regulatory agency of competent jurisdiction to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions contained in the Agreement shall remain in full force and effect,
and shall in no way be affected, impaired or invalidated.
(c) CONTROLLING LAW. This Agreement shall be construed,
interpreted and applied in accordance with the law of the State of Delaware,
without giving effect to the choice of law provisions thereof. Executive and
the Company hereby irrevocably submit to the exclusive concurrent jurisdiction
of the courts of Delaware. Executive and the Company also both irrevocably
waive, to the fullest extent permitted by applicable law, any objection either
may now or hereafter have to the laying of venue of any such dispute brought in
such court or any defense of inconvenient forum for the maintenance of such
dispute, and both parties agree to accept service of legal process in Delaware.
(d) CONSTRUCTION. The Agreement contains the entire
understanding between the parties and supersedes any prior understanding and
agreements between them representing the subject matter hereof. There are no
representations, agreements, arrangements or understandings, oral or written,
between and among the parties hereto relating to the subject matter hereof
which are not fully expressed herein. Any modifications to this Agreement must
be in writing and signed by the Executive and an authorized executive of the
Company.
4
<PAGE>
(e) HEADINGS. Section and other headings contained in
the Agreement are for reference purposes only and are in no way intended to
describe, interpret, define or limit the scope, extent or intent of the
Agreement or any provision hereof.
IN WITNESS WHEREOF, the parties hereto have executed the Agreement as
of day and year first set forth above.
HOME DEPOT U.S.A., INC.
/s/ Robert L. Nardelli
- -------------------------------
By: Robert L. Nardelli
Chairman, President and
Chief Executive Officer
EXECUTIVE:
/s/ Carol B. Tome
- -------------------------------
By: Carol B. Tome
5
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.31
<SEQUENCE>4
<FILENAME>g81844exv10w31.txt
<DESCRIPTION>EX-10.31 SEPARATION AGREEMENT
<TEXT>
<PAGE>
EXHIBIT 10.31
SEPARATION AGREEMENT & RELEASE
This is an Agreement between Home Depot U.S.A., Inc. (hereinafter
"Home Depot" or the "Company") and Dennis J. Carey (the "Executive").
WHEREAS, the Company and the Executive intend the terms and conditions
of this Agreement to govern all issues related to the Executive's employment
and termination from the Company; and,
WHEREAS, the Executive acknowledges that he has been given a
reasonable period of time, up to and including twenty-one (21) days, to
consider the terms of this Agreement; and,
WHEREAS, the Company advises the Executive to consult with a lawyer
before signing this Agreement; and,
WHEREAS, the Executive acknowledges that the consideration provided
him under this Agreement is sufficient to support the releases provided by him
under this Agreement; and,
WHEREAS, the Executive represents that he has not filed any charges,
claims or lawsuits against the Company involving any aspect of his employment
which have not been terminated as of the date of this Agreement; and,
WHEREAS, the Executive understands that the Company regards the
representations by him as material and that the Company is relying on these
representations in entering into this Agreement,
NOW, THEREFORE, the Company and the Executive agree as follows:
1. Employment Status and Termination Date. The Executive will provide
services at the direction of the Chief Executive Officer and/or the Executive
Vice President of Strategy, Business Development and Corporate Operations from
April 1, 2002 until September 30, 2002. The Executive will maintain his current
salary and benefits during this time. The Executive will be placed on a paid
Leave of Absence ("LOA") commencing on September 30, 2002 and extending through
September 30, 2003. Executive's last day of employment will be September 30,
2003 ("Termination Date"), or as otherwise provided in Paragraph 10 (Breach by
Executive) below. Executive shall not accrue any vacation days or credit
subsequent to September 30, 2002.
2. Annual Salary. Executive shall continue at his current salary level
during the paid LOA.
3. Annual Bonus. Executive will receive a bonus of $300,000 for Fiscal
Year 2001 and $600,000 for Fiscal Year 2002, such payments to be paid at the
same time as the Company normally pays its other officers their bonuses for
those respective years. Executive will not receive or be eligible for any other
bonus payments of any kind, including any bonus payments relating to Fiscal
Year 2003.
<PAGE>
4. Benefits. The Executive will be eligible to continue to participate in
the Company's Executive benefit plans and programs during the paid LOA.
5. Stock Options.
(a) All of Executive's outstanding, non-vested stock options will
vest in accordance with the terms of the original grant
except that none of such options shall vest after the
Termination Date. All of Executive's vested stock options
must be exercised within 90 days of the Termination Date.
(b) On the Termination Date, the restrictions on all of
Executive's outstanding shares of restricted stock will lapse
immediately.
(c) Executive shall not be eligible to receive any other
equity-based awards after the Effective Date set forth in
Paragraph 17.
6. Outplacement Services. The Company shall provide outplacement services
for the Executive during the paid LOA. Such services shall be provided through
an agency selected by the Company. The Company shall also reimburse Executive
for the reasonable expenses for up to four (4) trips during the paid LOA for
job search purposes, pursuant to the Company's standard expense reimbursement
policies. The expenses for each trip may not exceed $2,500. To be eligible to
receive this reimbursement, Executive must not receive reimbursement from other
parties for the trip(s) and Executive must submit documentation of the expenses
in a form acceptable to the Company.
7. Release of Claims. The Executive and his heirs, assigns, and agents
release, waive and discharge the Company and its past and present directors,
officers, employees, parents, subsidiaries, affiliates, related entities, and
agents from each and every claim, action or right of any sort, known or
unknown, arising on or before the Effective Date.
(a) The foregoing release includes, but is not limited to, any
claim of discrimination on the basis of race, sex, religion,
sexual orientation, national origin, disability, age, or
citizenship status; any other claim based on any local,
state, or federal prohibition, including but not limited to
claims under Title VII of the Civil Rights Act of 1964, as
amended, the Age Discrimination in Employment Act of 1967, as
amended, or the Americans With Disabilities Act; any claim
arising out of or related to any alleged express or implied
employment contract, any other alleged contract affecting
terms and conditions of employment, or an alleged covenant of
good faith and fair dealing; or any claim for severance pay,
bonus, salary, sick leave, stocks, attorneys' fees, holiday
pay, vacation pay, life insurance, health or medical
insurance or any other fringe benefit, workers' compensation
or disability.
(b) The Executive represents that he understands the foregoing
release, that rights and claims under the Age Discrimination
in Employment Act of 1967, as amended, are among the rights
and claims against the Company he is releasing, and that he
understands that he is not presently releasing any future
rights or claims that might arise after the Effective Date.
2
<PAGE>
(c) The Executive further agrees never to sue the Company or
cause the Company to be sued regarding any matter within the
scope of the above release. If the Executive violates this
Release by suing the Company or causing the Company to be
sued, the Company may recover all damages as allowed by law,
including all costs and expenses, including reasonable
attorneys' fees, incurred by the Company in defending against
the suit.
8. Confidential Information. The Executive acknowledges that through his
employment with the Company he has acquired and had access to the Company's
confidential and proprietary business information and trade secrets. The
Executive agrees that the Company may prevent the use or disclosure of its
confidential information and proprietary business information and trade secrets
and acknowledges that the Company has taken all reasonable steps necessary to
protect the secrecy of the information. "Confidential Information" shall
include any data or information that is valuable to the Company and not
generally known to competitors of the Company or other outsiders, regardless of
whether the confidential information is in printed, written or electronic form,
retained in the Executive's memory or has been compiled or created by the
Executive. This includes, but is not limited to: technical, financial,
personnel, staffing, payroll, computer systems, marketing, advertising,
merchandising, product, vendor, customer or store planning data, trade secrets,
or other information similar to the foregoing. The Executive agrees that he has
not and in the future will not use or disclose to any third party Confidential
Information, unless compelled by law and after notice to the Company, and
further agrees to return all documents, disks, or any other item or source
containing Confidential Information, or any other Company property, to the
Company on or before September 30, 2002. If the Executive has any question
regarding what data or information would be considered by the Company to be
information subject to this provision, the Executive agrees to contact the
Executive Vice President, Human Resources for written clarification.
9. Non-Competition and Non-Solicitation.
(a) The Executive agrees that he will not, prior to October 1,
2006, enter into or maintain an employment or contractual
relationship, either directly or indirectly, to provide
financial, executive or managerial services in the same or
similar manner as he did for the Company to any company or
entity engaged in any way in a business that competes
directly or indirectly with the Company, its parents,
subsidiaries, affiliates or related entities, in the United
States, Canada, Puerto Rico, Mexico, or any other location in
which the Company, its parents, subsidiaries, affiliates or
related entities currently conduct business or may conduct
business prior to October 1, 2006, without the prior written
consent of the Company. Businesses that compete with the
Company specifically include, but are not limited to, the
following entities and each of their subsidiaries,
affiliates, assigns, or successors in interest: Lowe's
Companies, Inc. (including, but not limited to, Eagle
Hardware and Garden); Hechinger Investment Company, Inc.
(including, but not limited to, Home Quarters, Hechinger, and
Builder's Square); Payless Cashways, Inc.; Dekor; Sears
(including, but not limited to, Orchard Supply and Hardware
Company); Wal-Mart; Home Base, Inc; and Menard, Inc.
(b) In the event the Executive wishes to enter into any
relationship or employment prior to October 1, 2006 which
would be covered by the above non-compete provision,
3
<PAGE>
Executive agrees to request written permission from the
Executive Vice President, Human Resources of the Company
prior to entering any such relationship or employment. The
Company may approve or not approve of the relationship or
employment at its absolute discretion.
(c) The Executive agrees that prior to October 1, 2006, he will
not directly or indirectly solicit any person who is an
employee of the Company to terminate his or her relationship
with the Company without prior written approval from the
Executive Vice President, Human Resources of the Company.
10. Breach by Executive. The Company's obligations to the Executive under
this Agreement are contingent on Executive's performance of his obligations
under this Agreement. Any material breach by Executive of this Agreement will
result in the immediate cancellation of all Executive's stock options and
shares of restricted stock, the immediate termination of Executive's
employment, as well as entitle the Company to all its other remedies allowed in
law or equity, including but not limited to the return of any payments that it
made to Executive under this Agreement and the return to the Company of any
proceeds Executive received from stock options exercised after April 1, 2002 or
from shares of restricted stock.
11. Executive Availability.
(a) During the paid LOA, the Executive agrees to make himself
reasonably available to the Company to respond to requests by
the Company for information pertaining to or relating to the
Company and/or the Company's affiliates, subsidiaries,
agents, officers, directors or employees which may be within
the knowledge of the Executive.
(b) At all times, including after the Termination Date, Executive
agrees to cooperate fully with the Company in connection with
any and all existing or future litigation, charges, or
investigations brought by or against the Company or any of
its past or present affiliates, agents, officers, directors
or employees, whether administrative, civil or criminal in
nature, in which and to the extent the Company deems the
Executive's cooperation necessary.
(c) In conjunction with Executive's commitments under subsections
(a) or (b) of this paragraph, the Company will reimburse the
Executive for reasonable out-of-pocket expenses incurred as a
result of such cooperation.
12. Non-Disparagement. The Executive agrees that he will not make or cause
to be made any statements that disparage, are inimical to, or damage the
reputation of the Company or any of its past or present affiliates,
subsidiaries, agents, officers, directors or employees. In the event such a
communication is made to anyone, including but not limited to the media, public
interest groups and publishing companies, it will be considered a material
breach of the terms of this Agreement and the Executive will be required to
reimburse the Company for any and all compensation and benefits paid under the
terms of this Agreement and all commitments to make additional payments to the
Executive will be null and void.
4
<PAGE>
13. Insider Trading. The Executive acknowledges that prior to the
Termination Date, he remains subject to the restrictions of the Company's
Insider Trading Policy. After the Termination Date, the Insider Trading Policy
will no longer apply to the Executive. However, the Executive acknowledges that
through his employment with the Company he may have learned material,
non-public information regarding the Company. The federal securities laws
prohibit trading by persons while aware of material, non-public information.
The Executive should seek advice of his legal counsel prior to conducting any
transactions in the Company's stock if the Executive thinks he may possess such
information.
14. Future Employment. The Executive hereby understands and agrees that he
will not be re-employed by the Company in the future and that Executive will
never knowingly apply to the Company, its subsidiaries, affiliates, parents or
divisions for any job or position in the future.
15. Severability of Provisions. In the event that any provision in this
Agreement is determined to be legally invalid or unenforceable by any court of
competent jurisdiction, and cannot be modified to be enforceable, the affected
provision shall be stricken from the Agreement, and the remaining terms of the
Agreement and its enforceability shall remain unaffected.
16. Right to Revoke this Agreement. The Executive may revoke this
Agreement in writing within seven (7) days of signing it. The Agreement will
not take effect until the Effective Date. If the Executive revokes this
Agreement, all of its provisions shall be void and unenforceable.
17. Effective Date. The Effective Date shall be the day after the end of
the revocation period described in Paragraph 16.
18. Confidentiality. The Executive shall keep strictly confidential all
the terms and conditions, including amounts, in this Agreement and shall not
disclose them to any person other than the Executive's spouse and the
Executive's legal or financial advisor, unless compelled by law to do so. If a
person not a party to this Agreement requests or demands, by subpoena or
otherwise, that the Executive disclose or produce this Agreement or any terms
or conditions thereof, the Executive shall immediately notify the Company and
shall give the Company an opportunity to respond to such notice before taking
any action or making any decision in connection with such request or subpoena.
19. Arbitration. Any dispute regarding any aspect of this Agreement or any
act which allegedly has or would violate any provision of this Agreement
("arbitrable dispute") will be submitted for final and binding arbitration in
Delaware before an experienced employment arbitrator licensed to practice law
in Delaware and selected in accordance with the rules of the American
Arbitration Association, as the exclusive remedy for such claim or dispute. The
decision of the arbitrator shall be final and binding and judgment on the award
may be entered in any court of competent jurisdiction. Should any party to this
Agreement hereafter institute any legal action or administrative proceeding
against the other with respect to any claim waived by this Agreement or pursue
any arbitrable dispute by any method other than said arbitration, the
responding party shall be entitled to recover from the initiating party all
damages as allowed by law, including but not limited to reasonable attorneys'
fees, costs and expenses incurred as a
5
<PAGE>
result of such action. This paragraph is not applicable to claims of violation
of Paragraphs 8, 9, 12 or 18 (Confidential Information; Non-Competition and
Non-Solicitation; Non-Disparagement; Confidentiality) of this Agreement.
20. Non-Assignment. The Executive represents and warrants that as of the
date of this Agreement he has not assigned or transferred, or purported to
assign or transfer, to any person, firm, corporation, association or entity
whatsoever any released claim. Executive hereby agrees to indemnify and hold
the Company harmless against, without any limitation, any and all rights,
claims, warranties, demands, debts, obligations, liabilities, costs, court
costs, expenses, including attorneys' fees, causes of action or judgments based
on or arising out of any such assignment or transfer.
21. Entire Agreement. This Agreement constitutes the entire understanding
between the parties. The parties have not relied on any oral statements that
are not included in this Agreement. Any modifications to this Agreement must be
in writing and signed by the Executive and an authorized Executive or agent of
the Company.
22. Governing Law. This Agreement shall be construed, interpreted and
applied in accordance with the law of the State of Delaware, without giving
effect to the choice of law provisions thereof. Executive and the Company
hereby irrevocably submit to the exclusive concurrent jurisdiction of the
courts of Delaware. Executive and the Company also both irrevocably waive, to
the fullest extent permitted by applicable law, any objection either may now or
hereafter have to the laying of venue of any such dispute brought in such court
or any defense of inconvenient forum for the maintenance of such dispute, and
both parties agree to accept service of legal process in Delaware.
THE EXECUTIVE UNDERSTANDS AND ACKNOWLEDGES THE SIGNIFICANCE AND
CONSEQUENCES OF THIS AGREEMENT, THAT THE CONSIDERATION PROVIDED HEREIN IS FAIR
AND ADEQUATE, AND REPRESENTS THAT THE TERMS OF THIS AGREEMENT ARE FULLY
UNDERSTOOD AND VOLUNTARILY ACCEPTED.
Home Depot U.S.A., Inc.
By: /s/ Dennis Donovan 8/14/02
--------------------------- -------------------------
Dennis Donovan Date
/s/ Dennis J. Carey
--------------------------- -------------------------
Dennis J. Carey Date
6
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.32
<SEQUENCE>5
<FILENAME>g81844exv10w32.txt
<DESCRIPTION>EX-10.32 CONSULTING AGREEMENT
<TEXT>
<PAGE>
EXHIBIT 10.32
CONSULTING AGREEMENT
This Consulting Agreement is made and entered into as of the last day
set forth in the signature area below, by and between Home Depot U.S.A., Inc.
("Home Depot") and Dennis J. Carey ("Consultant").
WHEREAS, Home Depot desires to utilize and avail itself of the
training and experience of Consultant as an independent contractor in a
consulting capacity, as more fully set forth herein; and
WHEREAS, Consultant desires to provide consulting services to Home
Depot in the manner, for the purposes, and under the terms and conditions
hereinafter set forth; and
NOW, THEREFORE, in consideration of the mutual covenants and
agreements hereinafter set forth, the parties hereby agree as follows:
1. Engagement and Duties. Commencing on October 1, 2003, Home Depot
engages Consultant, and Consultant agrees to serve, as an independent
contractor, to perform consulting services for the Chief Executive Officer
("CEO") and/or the Executive Vice President of Strategy, Business Development
and Corporate Operations ("EVP") of Home Depot relating to Six Sigma processes
and merger and acquisition issues, as may be requested by the CEO or EVP from
time to time. Consultant shall be available for consultation for a maximum of
forty (40) hours per month.
2. Term. This Consulting Agreement shall have a term commencing on
October 1, 2003 and ending on October 1, 2006. The parties may mutually agree
to terminate this Consulting Agreement at any time prior to October 1, 2006.
Home Depot has the sole discretion to terminate this Consulting Agreement at
any time prior to October 1, 2006. In the event Home Depot exercises this
right, and the termination of the Consulting Agreement is not pursuant to
Paragraph 9 (below), Home Depot will continue to pay Consultant as set forth in
Paragraph 3 (below).
3. Compensation. As compensation for the services to be rendered
hereunder during the term of this Consulting Agreement, Home Depot shall pay
Consultant a consulting fee at the rate of $600,000 per year, paid on a
bi-weekly basis, from October 1, 2003 through October 1, 2006. Such consulting
fee shall be payable to consultant irrespective of the actual amount of time
Consultant spends in consultation with Home Depot. Home Depot shall issue
Consultant a Form 1099 reflecting the payments to Consultant for such services.
4. Reimbursable Expenses. Home Depot shall reimburse Consultant only for
those reasonable and necessary expenses incurred by Consultant in performing
his duties hereunder as required by the CEO or EVP. Consultant shall include
receipts for all individual expenditures for which Consultant seeks
reimbursement.
<PAGE>
5. Ownership of Materials.
(a) Home Depot, or its assignee, will own and have all right and
title in all ideas, concepts, plans, creations or work
product produced at the request of Home Depot during the term
of this Consulting Agreement, including, without limitation,
any writings, drawings and documentation of any kind
(collectively, the "Works") and, to the extent possible, all
Works shall be considered a work made for hire for Home Depot
within the meaning of Title 17 of the United States Code (the
Copyright Act). Consultant hereby grants, transfers and
assigns any and all right, title and interest in and to the
Works and all materials contained therein or prepared
therefor, including all copyrights and rights under
copyright, to Home Depot worldwide and in perpetuity. In
addition, Consultant shall assign and hereby so assigns to
Home Depot all of its interest in the Works. Consultant
grants to Home Depot an irrevocable, non-exclusive,
worldwide, royalty-free license to use, execute and copy for
its internal purposes any pre-existing materials contained in
the Works. Consultant shall cooperate fully with Home Depot
and shall execute such further documentation as Home Depot
may request in order to establish, secure, maintain or
protect Home Depot's, or its assignee's, ownership of the
Works and of all rights therein. Furthermore, Consultant
agrees that he shall never transfer or assign the Works, or
any rights therein, to any third party.
(b) Consultant hereby (i) waives any so-called "moral rights"
with respect to the Works; (ii) agrees never to use the Works
without the prior express written consent of Home Depot;
(iii) agrees never to contest Home Depot's or its assignee's
exclusive, complete and unrestricted ownership in and to the
Works (including all copyright rights therein), or to claim
adverse rights therein; and (iv) acknowledges that it shall
not be entitled to any compensation beyond that specifically
provided herein for any of the Works.
6. Relationship Between Parties. Consultant is retained by Home Depot
only for the purposes and to the extent set forth in this Consulting Agreement,
and Consultant's relationship to Home Depot and its affiliated companies shall,
during the term of this Consulting Agreement, be that of an INDEPENDENT
CONTRACTOR. Consultant shall not be considered under the provisions of this
Consulting Agreement or otherwise as being an employee or as being entitled to
participate in any plans, arrangements or distributions by Home Depot or its
affiliated companies pertaining to or in connection with any pension, stock,
bonus, insurance or similar benefits available to employees. Consultant is
exclusively responsible for payment of all contributions and taxes due under
federal and/or state income, social security, FICA, old age benefit,
unemployment insurance or worker's compensation laws with respect to payment of
consulting fees from Home Depot to Consultant.
7. Injuries to Consultant. Consultant hereby waives, for Consultant and
Consultant's heirs, personal representatives, successors and assigns, any and
all rights that Consultant might otherwise have to any recovery from Home
Depot, whether for costs and expenses incurred, for damages or otherwise, in
the event Consultant suffers any personal injury or property damage in
rendering services hereunder.
2
<PAGE>
8. Confidential Information. Consultant acknowledges an obligation of
confidence to Home Depot and agrees that, during the term of this Consulting
Agreement and subsequent thereto, Consultant will not disclose to any third
party or use (other than as authorized by Home Depot) any of its confidential
or proprietary business information or trade secrets. "Confidential
Information" shall include any data or information that is valuable to Home
Depot and not generally known to competitors of Home Depot or other outsiders,
regardless of whether the confidential information is in printed, written or
electronic form, retained in the Consultant's memory or has been compiled or
created by the Consultant. This includes, but is not limited to: technical,
financial, personnel, staffing, payroll, computer systems, marketing,
advertising, merchandising, product, vendor, customer or store planning data,
trade secrets, or other information similar to the foregoing. Upon termination
of this Consulting Agreement, Consultant shall promptly deliver to Home Depot
all Confidential Information, including any analyses, reports or summaries
thereof, and all equipment and supplies of Home Depot which are then in
Consultant's possession.
9. Early Termination. This Consulting Agreement shall terminate in
advance of the time set forth in Paragraph 2, without any further liability on
the part of Home Depot except to pay any undisputed consulting fees or to
reimburse any undisputed expenses then owed to Consultant pursuant to
Paragraphs 3 or 4, in the event of Consultant's inability or refusal to comply
with the terms of this Consulting Agreement, or in the event Consultant
breaches this Consulting Agreement.
10. Non-Competition and Non-Solicitation. Consultant agrees to comply with
the non-competition and non-solicitation provisions of the Separation Agreement
& Release executed by him on June 14, 2002. Any breach of these provisions shall
result in the automatic termination of this Consulting Agreement and Executive
will be required to reimburse Home Depot for any and all compensation paid to
him under the terms of this Consulting Agreement. Home Depot would also have no
further obligation to pay Consultant pursuant to Paragraphs 3 or 4 and all
commitments to make additional payments to the Consultant will be null and void.
11. Consultant's Right to Engage in Other Independent Contractor
Relationships or to Obtain Employment. Nothing in this Consulting Agreement
shall restrict or prohibit Consultant from engaging in other independent
contractor relationships, or from obtaining employment with an entity other
than Home Depot, except that Consultant agrees not to engage in an independent
contractor or employer-employee relationship with a competitor of Home Depot,
as defined in the Separation Agreement & Release referenced in Paragraph 10
above.
12. Warranty.
(a) Consultant warrants to Home Depot that the services will be
performed in a competent manner in compliance with all
applicable laws and regulations. In performing the services,
Consultant shall use his best efforts in a diligent manner
and shall dedicate such time as necessary to perform them on
a timely basis. Consultant shall report to and keep informed
such persons as Home Depot shall designate and shall maintain
for Home Depot archival copies of its work on a weekly basis
or, if requested to do so by Home Depot, on a daily basis.
3
<PAGE>
(b) Subject to Paragraph 12(a), Consultant shall be solely
responsible for determining the means, location and manner by
which Consultant provides consulting services to Home Depot.
(c) As Home Depot's remedy for Consultant's failure to meet the
warranty of best efforts set forth in Paragraph 12(a),
Consultant will correct any failure, provided that Home Depot
reports the failure to Consultant in writing within thirty
(30) days after the date that Home Depot becomes aware of the
failure and makes available adequate information concerning
the failure. If Consultant is unable to provide a mutually
agreeable temporary solution to the failure within ten (10)
days after receipt of notice from Home Depot, or if
Consultant is unable to provide a permanent solution
acceptable to Home Depot within an additional twenty (20)
days, Consultant will refund to Home Depot all amounts paid
by Home Depot for the failed services.
13. Indemnity. Consultant shall indemnify, defend and hold harmless Home
Depot against any and all loss, damage, claim, lawsuit, judgment, liability,
taxes, penalties, cost or expense (including attorney's fees) arising out of
(a) the services provided by Consultant pursuant to this Consulting Agreement,
including for claims of infringement of any third party right or entitlement,
(b) any injury to persons or damage to property caused by Consultant during the
term of this Consulting Agreement, (c) any of the matters covered by the
warranties and representations contained in this Consulting Agreement, or (d)
any audits by any government entity resulting from the services provided by
Consultant or Consultant's receipt of the consulting fee paid by the Company.
14. Entire Agreement. This Consulting Agreement contains the complete and
exclusive understanding of the parties with respect to the matters contained
herein. No waiver, alteration or modification of any of the provisions of this
Consulting Agreement will be binding unless in writing and signed by a duly
authorized representative of the party to be bound. Neither the course of
conduct between the parties nor trade usage will act to modify or alter the
provisions of this Consulting Agreement.
15. Assignment. The rights and obligations of Consultant hereunder may not
be assigned or subjected to any security interest.
16. Binding Effect. This Consulting Agreement shall be binding upon and
inure to the benefit of Consultant and its heirs and personal representatives
and Home Depot and its successors and assigns.
17. Severability. The invalidity, illegality or unenforceability of any
provision of this Consulting Agreement shall not affect the validity, legality
or enforceability of any other provision of this Consulting Agreement, which
shall remain in full force and effect.
18. No Waiver. The waiver of either party of any breach of this Consulting
Agreement by the other party shall not waive subsequent breaches of the same or
different kind. The failure of either party to enforce any rights under this
Consulting Agreement in a particular instance shall not operate as a waiver of
said party's right to enforce the same or different rights in subsequent
instances.
4
<PAGE>
19. Governing Law. This Consulting Agreement shall be controlled,
construed and enforced in accordance with the laws of the State of Delaware
without regards to any conflict of laws provisions incorporated therein.
Home Depot U.S.A., Inc.
By: /s/ Dennis Donovan 8/14/02
-------------------------------- -------------------------
Dennis Donovan Date
/s/ Dennis J. Carey
-------------------------------- -------------------------
Dennis J. Carey Date
5
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.33
<SEQUENCE>6
<FILENAME>g81844exv10w33.txt
<DESCRIPTION>EX-10.33 COMMERCIAL DEALER PAPER AGREEMENT
<TEXT>
<PAGE>
EXHIBIT 10.33
COMMERCIAL PAPER DEALER AGREEMENT
[4(2) PROGRAM]
BETWEEN
THE HOME DEPOT, INC., AS ISSUER
AND
CHASE SECURITIES INC., AS DEALER
CONCERNING NOTES TO BE ISSUED PURSUANT TO AN ISSUING AND PAYING AGENCY
AGREEMENT DATED AS OF JANUARY 5, 1998 BETWEEN THE ISSUER AND BANK ONE, NATIONAL
ASSOCIATION, SUCCESSOR TO THE FIRST NATIONAL BANK OF CHICAGO, AS ISSUING AND
PAYING AGENT
DATED AS OF
APRIL 19, 2001
<PAGE>
COMMERCIAL PAPER DEALER AGREEMENT
[4(2) PROGRAM]
This agreement ("Agreement") sets forth the understandings between the
Issuer and the Dealer in connection with the issuance and sale by the Issuer of
its short-term promissory notes pursuant to the Issuing and Paying Agency
Agreement dated as of January 5, 1998 between the Issuer and Bank One, National
Association, successor to The First National Bank of Chicago, as Issuing and
Paying Agent (the "Notes") through the Dealer.
Certain terms used in this Agreement are defined in Section 6 hereof.
The Addendum to this Agreement, and any Annexes or Exhibits described
in this Agreement or such Addendum, are hereby incorporated into this Agreement
and made fully a part hereof.
Section 1. Offers, Sales and Resales of Notes.
1.1 While (i) the Issuer has and shall have no obligation to sell
the Notes to the Dealer or to permit the Dealer to arrange any sale of the
Notes for the account of the Issuer, and (ii) the Dealer has and shall have no
obligation to purchase the Notes from the Issuer or to arrange any sale of the
Notes for the account of the Issuer, the parties hereto agree that in any case
where the Dealer purchases Notes from the Issuer, or arranges for the sale of
Notes by the Issuer, such Notes will be purchased and sold in reliance on the
representations, warranties, covenants and agreements of the parties contained
herein or made pursuant hereto and on the terms and conditions and in the
manner provided herein.
1.2 So long as this Agreement shall remain in effect, and in
addition to the limitations contained in Section 1.7 hereof, the Issuer shall
not, without the consent of the Dealer (which consent shall not be unreasonably
withheld), offer, solicit or accept offers to purchase, or sell, any Notes
except (a) in transactions with one or more dealers which may from time to time
after the date hereof become dealers with respect to the Notes by executing
with the Issuer one or more agreements which contain provisions substantially
identical to Section I of this Agreement, of which the Issuer hereby undertakes
to provide the Dealer prompt notice or (b) in transactions with the other
dealers listed on the Addendum hereto, which are executing agreements with the
Issuer which contain provisions substantially identical to Section 1 of this
Agreement contemporaneously herewith. In no event shall the Issuer offer,
solicit or accept offers to purchase, or sell, any Notes directly on its own
behalf in transactions with persons other than broker-dealers as specifically
permitted in this Section 1.2.
1.3 The Notes shall be in a minimum denomination or minimum
amount, whichever is applicable, of $250,000 or integral multiples of $1,000 in
excess thereof, will bear such interest rates, if interest bearing, or will be
sold at such discount from their face amounts, as shall be agreed upon by the
Dealer and the Issuer, shall have a maturity not exceeding 270 days from the
date of issuance (exclusive of days of grace) and shall not contain any
provision for extension, renewal or automatic "rollover."
2
<PAGE>
1.4 The authentication, delivery and payment of the Notes shall
be effected in accordance with the Issuing and Paying Agency Agreement and the
Notes shall be either individual bearer physical certificates or represented by
book-entry Notes registered in the name of DTC or its nominee in the form or
forms annexed to the Issuing and Paying Agency Agreement.
1.5 If the Issuer and the Dealer shall agree on the terms of the
purchase of any Note by the Dealer or the sale of any Note arranged by the
Dealer (including, but not limited to, agreement with respect to the date of
issue, purchase price, principal amount, maturity and interest rate (in the
case of interest-bearing Notes) or discount thereof (in the case of Notes
issued on a discount basis), and appropriate compensation for the Dealer's
services hereunder) pursuant to this Agreement, the Issuer shall cause such
Note to be issued and delivered in accordance with the terms of the Issuing and
Paying Agency Agreement and payment for such Note shall be made by the
purchaser thereof, either directly or through the Dealer, to the Issuer. Except
as otherwise agreed, in the event that the Dealer is acting as an agent and a
purchaser shall either fail to accept delivery of or make payment for a Note on
the date fixed for settlement, the Dealer shall promptly notify the Issuer, and
if the Dealer has theretofore paid the Issuer for the Note, the Issuer will
promptly return such funds to the Dealer against its return of the Note to the
Issuer, in the case of a certificated Note, and upon notice of such failure in
the case of a book-entry Note. If such failure occurred for any reason other
than default by the Dealer, the Issuer shall reimburse the Dealer on an
equitable basis for the Dealer's loss of the use of such funds for the period
such funds were credited to the Issuer's account.
1.6 The Dealer and the Issuer hereby establish and agree to
observe the following procedures in connection with offers, sales and subsequent
resales or other transfers of the Notes:
(a) Offers and sales of the Notes by or through the
Dealer shall be made only to the following types of investors: (i)
investors reasonably believed by the Dealer to be Institutional
Accredited Investors, (ii) non-bank fiduciaries or agents that will be
purchasing Notes for one or more accounts, each of which is an
Institutional Accredited Investor, and (iii) Qualified Institutional
Buyers.
(b) Resales and other transfers of the Notes by the
holders thereof shall be made only in accordance with the restrictions
in the legends described in clause (e) below. No general solicitation
or general advertising shall be used in connection with the offering
of the Notes. Without limiting the generality of the foregoing,
without the prior written approval of Dealer, the Issuer shall not
issue any press release or place or publish any "tombstone" or other
advertisement relating to the Notes.
(c) No general solicitation or general advertising shall
be used in connection with the offering of the Notes. Without limiting
the generality of the foregoing, without the prior written approval of
Dealer, the Issuer shall not issue any press release or place or
publish any "tombstone" or other advertisement relating to the Notes.
(d) No sale of Notes to any one purchaser shall be for
less than $250,000 principal or face amount, and no Note shall be
issued in a smaller principal or face
3
<PAGE>
amount. If the purchaser is a non-bank fiduciary acting on behalf of
others, each person for whom such purchaser is acting must purchase at
least $250,000 principal or face amount of Notes.
(e) Offers and sales of the Notes by the Issuer through
the Dealer acting as agent for the Issuer shall be made in accordance
with Rule 506 under the Securities Act, and shall be subject to the
restrictions described in the legend appearing on Exhibit A hereto. A
legend substantially to the effect of such Exhibit A shall appear as
part of the Private Placement Memorandum used in connection with
offers and sales of Notes hereunder, as well as on each Note offered
and sold pursuant to this Agreement.
(f) Dealer shall furnish or shall have furnished to each
purchaser of Notes being sold to an ultimate purchaser for the first
time a copy of the then current Private Placement Memorandum unless
such purchaser has previously received a copy of the Private Placement
Memorandum as then in effect. The Private Placement Memorandum shall
expressly state that any person to whom Notes are offered shall have
an opportunity to ask questions of, and receive information from, the
Issuer and the Dealer and shall provide the names, addresses and
telephone numbers of the persons from whom information regarding the
Issuer may be obtained.
(g) The Issuer agrees, for the benefit of the Dealer and
each of the holders and prospective purchasers from time to time of
the Notes that, if at any time the Issuer shall not be subject to
Section 13 or 15(d) of the Exchange Act, the Issuer will furnish, upon
request and at its expense, to the Dealer and to holders and
prospective purchasers of Notes information required by Rule
144A(d)(4)(i) in compliance with Rule 144A(d).
(h) In the event that any Note offered or to be offered
by Dealer would be ineligible for resale under Rule 144A, the Issuer
shall immediately notify Dealer (by telephone, confirmed in writing)
of such fact and shall promptly prepare and deliver to Dealer an
amendment or supplement to the Private Placement Memorandum describing
the Notes that are ineligible, the reason for such ineligibility and
any other relevant information relating thereto.
(i) The Issuer represents that it is currently issuing
commercial paper in the United States market in reliance upon, and in
compliance with, the exemption provided by Section 3(a)(3) of the
Securities Act. In that connection, the Issuer agrees that: (a) the
proceeds from the sale of the Notes will be segregated from the
proceeds of the sale of any such commercial paper by being placed in a
separate account; and (b) the Issuer has instituted appropriate
corporate procedures to ensure that the offers and sales of notes
issued by the Issuer pursuant to the Section 3(a)(3) exemption are not
integrated with offerings and sales of Notes hereunder.
(j) The Issuer hereby agrees that, not later than 15
days after the first sale of Notes as contemplated by this Agreement,
it will file with the SEC a notice on Form D in accordance with Rule
503 under the Securities Act and that it will thereafter file such
amendments to such notice as Rule 503 may require.
4
<PAGE>
1.7 The Issuer hereby represents and warrants to the Dealer, in
connection with offers, sales and resales of Notes, as follows:
(a) Issuer hereby confirms to the Dealer that (except as
permitted by Section 1.6(i)) within the preceding six months neither
the Issuer nor any person other than the Dealer or the other dealers
referred to in Section 1.2 hereof acting on behalf of the Issuer has
offered or sold any Notes, or any substantially similar security of
the Issuer (including, without limitation, medium-term notes issued by
the Issuer), to, or solicited offers to buy any such security from,
any person other than the Dealer or the other dealers referred to in
Section 1.2 hereof. The Issuer also agrees that, as long as the Notes
are being offered for sale by the Dealer and the other dealers
referred to in Section 1.2 hereof as contemplated hereby and until at
least six months after the offer of Notes hereunder has been
terminated, neither the Issuer nor any person other than the Dealer or
the other dealers referred to in Section 1.2 hereof (except as
contemplated by Section 1.2 hereof) will offer the Notes or any
substantially similar security of the Issuer for sale to, or solicit
offers to buy any such security from, any person other than the Dealer
and the other dealers referred to in Section 1.2 hereof, it being
understood that such agreement is made with a view to bringing the
offer and sale of the Notes within the exemption provided by Section
4(2) of the Securities Act and Rule 506 thereunder and shall survive
any termination of this Agreement. The Issuer hereby represents and
warrants that it has not taken or omitted to take, and will not take
or omit to take, any action that would cause the offering and sale of
Notes hereunder to be integrated with any other offering of
securities, whether such offering is made by the Issuer or some other
party or parties.
(b) In the event that the Dealer purchases Notes as
principal and does not resell such Notes on the day of such purchase,
to the extent necessary to comply with Regulation T and the
interpretations thereunder, the Dealer will sell such Notes only to
offerees it reasonably believes to be QIBs or to QIBs it reasonably
believes are acting for other QIBs, in each case in accordance with
Rule 144A.
Section 2. Representations and Warranties of Issuer.
The Issuer represents and warrants that:
2.1 The Issuer is a corporation duly incorporated, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation and has all the requisite corporate power and authority to
execute, deliver and perform its obligations under the Notes, this Agreement
and the Issuing and Paying Agency Agreement.
2.2 This Agreement and the Issuing and Paying Agency Agreement
have been duly authorized, executed and delivered by the Issuer and constitute
legal, valid and binding obligations of the Issuer enforceable against the
Issuer in accordance with their terms subject to applicable bankruptcy,
insolvency and similar laws affecting creditors' rights generally, and subject,
as to enforceability, to general principles of equity (regardless of whether
enforcement is
5
<PAGE>
sought in a proceeding in equity or at law) and except insofar as rights to
indemnifications and contributions may be limited by applicable law.
2.3 The Notes have been duly authorized, and when issued and
delivered as provided in the Issuing and Paying Agency Agreement, will be duly
and validly issued and delivered and will constitute legal, valid and binding
obligations of the Issuer enforceable against the Issuer in accordance with
their terms subject to applicable bankruptcy, insolvency and similar laws
affecting creditors' rights generally, and subject, as to enforceability, to
general principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law).
2.4 The offer and sale of Notes in the manner contemplated hereby
do not require registration of the Notes under the Securities Act, pursuant to
the exemption from registration contained in Section 4(2) thereof and
Regulation D thereunder, and no indenture in respect of the Notes is required
to be qualified under the Trust Indenture Act of 1939, as amended.
2.5 The Notes will rank at least pari passu with all other
unsecured and unsubordinated indebtedness of the Issuer.
2.6 Except as provided in Section 1.6(j), no consent or action
of, or filing or registration with, any governmental or public regulatory body
or authority, including the SEC, is required to be obtained by the Issuer to
authorize, or is otherwise required to be obtained by the Issuer in connection
with the execution, delivery or performance of, this Agreement, the Notes or
the Issuing and Paying Agency Agreement, except as may be required by the
securities or Blue Sky laws of the various states in connection with the offer
and sale of the Notes.
2.7 Neither the execution and delivery of this Agreement and the
Issuing and Paying Agency Agreement, nor the issuance and delivery of the Notes
in accordance with the Issuing and Paying Agency Agreement, nor the fulfillment
of or compliance with the terms and provisions hereof or thereof by the Issuer,
will (i) result in the creation or imposition of any mortgage, lien, charge or
encumbrance of any nature whatsoever upon any of the properties or assets of
the Issuer, or (ii) violate or result in a breach or an event of default under
any of the terms of the Issuer's charter documents or by-laws, any contract or
instrument to which the Issuer is a party or by which it or its property is
bound and that is material to the Issuer, or any law or regulation, or any
order, writ, injunction or decree of any court or government instrumentality,
to which the Issuer is subject or by which it or its property is bound, which
violation, breach or event of default might reasonably be expected to have a
material adverse effect on the earnings, business or operations of the Issuer
or the ability of the Issuer to perform its obligations under this Agreement,
the Notes or the Issuing and Paying Agency Agreement.
2.8 Except as disclosed in the Company Information, there is no
litigation or governmental proceeding pending, or to the knowledge of the
Issuer threatened, against or affecting the Issuer or any of its subsidiaries
which might reasonably be expected to have a material adverse effect on the
earnings, business or operations of the Issuer or the ability of the Issuer to
perform its obligations under this Agreement, the Notes or the Issuing and
Paying Agency Agreement.
6
<PAGE>
2.9 The Issuer is not an "investment company" or an entity
"controlled" by an "investment company" within the meaning of the Investment
Company Act of 1940, as amended.
2.10 Neither the Private Placement Memorandum nor the Company
Information contains any untrue statement of a material fact or omits to state
a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading, provided that the Issuer makes no representation or warranty
relating to Dealer Information.
2.11 Each (a) issuance of Notes by the Issuer hereunder and (b)
amendment or supplement of the Private Placement Memorandum shall be deemed a
representation and warranty by the Issuer to the Dealer, as of the date
thereof, that, both before and after giving effect to such issuance and after
giving effect to such amendment or supplement, (i.) the representations and
warranties given by the Issuer set forth above in this Section 2 remain true
and correct on and as of such date as if made on and as of such date, (ii) in
the case of an issuance of Notes, the Notes being issued on such date have been
duly and validly issued and constitute legal, valid and binding obligations of
the Issuer, enforceable against the Issuer in accordance with their terms,
subject to applicable bankruptcy, insolvency and similar laws affecting
creditors' rights generally and subject, as to enforceability, to general
principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law) and (iii) in the case of an issuance of Notes,
since the date of the most recent Private Placement Memorandum, there has been
no material adverse change in the earnings, business or operations of the
Issuer which has not been disclosed in the Company Information.
Section 3. Covenants and Agreements of Issuer.
The Issuer covenants and agrees that:
3.1 The Issuer will give the Dealer prompt notice (but in any
event prior to any subsequent issuance of Notes hereunder) of any amendment to,
modification of, or waiver with respect to, the Notes, the Issuing and Paying
Agency Agreement, including a complete copy of any such amendment, modification
or waiver.
3.2 The Issuer shall, whenever there shall occur any change in
the Issuer's earnings, business or operations that would be material to holders
of the Notes or potential holder of the Notes (including any downgrading or
receipt of any notice of intended or potential downgrading or any review for
potential change in the rating accorded any of the Issuer's securities by any
nationally recognized statistical rating organization which has published a
rating of the Notes), promptly, and in any event prior to any subsequent
issuance of Notes hereunder, notify the Dealer (by telephone, confirmed in
writing) of such change, development, or occurrence.
3.3 The Issuer shall from time to time furnish to the Dealer such
information as the Dealer may reasonably request, including, without
limitation, any press releases or material provided by the Issuer to any
national securities exchange or rating agency, regarding the due authorization
and execution of the Notes and the Issuer's ability to pay the Notes as they
mature.
7
<PAGE>
3.4 The Issuer will take all such action as the Dealer may
reasonably request to ensure that each offer and each sale of the Notes will
comply with any applicable state Blue Sky laws; provided , that the Issuer
shall not be obligated to file any general consent to service of process or to
qualify as a foreign corporation in any jurisdiction in which it is not so
qualified or subject itself to taxation in respect of doing business in any
jurisdiction in which it is not otherwise so subject.
3.5 The Issuer shall not issue Notes hereunder until the Dealer
shall have received (a) an opinion of counsel to the Issuer, addressed to the
Dealer, satisfactory in form and substance to the Dealer, (b) a copy of the
executed Issuing and Paying Agency Agreement as then in effect, (c) a copy of
resolutions adopted by the Board of Directors of the Issuer, satisfactory in
form and substance to the Dealer and certified by the Secretary or similar
officer of the Issuer, authorizing execution and delivery by the Issuer of this
Agreement the Issuing and Paying Agency Agreement and the Notes and
consummation by the Issuer of the transactions contemplated hereby and thereby,
(d) prior to the issuance of any Notes represented by a book-entry note
registered in the name of DTC or its nominee, a copy of the executed Letter of
Representations among the Issuer, the Issuing and Paying Agent and DTC and (e)
such other certificates, opinions, letters and documents as the Dealer shall
have reasonably requested.
3.6 The Issuer shall reimburse the Dealer for all of the Dealer's
reasonable out-of-pocket expenses actually incurred by the Dealer related to
this Agreement, including expenses incurred in connection with its preparation
and negotiation, and the transactions contemplated hereby (including, but not
limited to, the printing and distribution of the Private Placement Memorandum),
and, if applicable, for the reasonable fees and out-of-pocket expenses of the
Dealer's counsel, not to exceed $5,000.
Section 4. Disclosure
4.1 The Private Placement Memorandum and its contents (other than
the Dealer Information) shall be the sole responsibility of the Issuer. The
Private Placement Memorandum shall contain a statement expressly offering an
opportunity for each prospective purchaser to ask questions of, and receive
answers from, the Issuer concerning the offering of Notes and to obtain
relevant additional information which the Issuer possesses or can acquire
without unreasonable effort or expense.
4.2 The Issuer agrees promptly to furnish the Dealer the Company
Information as it becomes publicly available.
4.3 (a) The Issuer further agrees, if the Issuer has any Notes
outstanding (whether or not with a purchaser or in inventory with the
Dealer) or in connection with any proposed issuance of Notes by the
Issuer, to notify the Dealer promptly upon the occurrence of any event
relating to or affecting the Issuer that would cause the Company
Information then in existence to include an untrue statement of
material fact or to omit to state a material fact necessary in order
to make the statements contained therein, in light of the
circumstances under which they are made, not misleading.
8
<PAGE>
(b) In the event that the Issuer gives the Dealer notice
pursuant to Section 4.3(a) and the Dealer notifies the Issuer that it
then has Notes it is holding in inventory, (i) the Issuer agrees
promptly to supplement or amend the Private Placement Memorandum so
that such Private Placement Memorandum, as amended or supplemented,
shall not contain an untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading, and the Issuer shall make such supplement or amendment
available to the Dealer or (ii) if the Issuer chooses not to promptly
amend or supplement the Private Placement Memorandum, the Dealer shall
have the right to resell to the Issuer any such Notes held in
inventory at a price equal to the face amount thereof discounted on a
ratable basis based on the Issuer's market rate reflecting the
remaining period until maturity in relation to the original term.
(c) In the event that (i) the Issuer gives the Dealer
notice pursuant to Section 4.3(a) and (ii) the Dealer does not notify
the Issuer that it is then holding Notes in inventory and (iii) the
Issuer chooses not to promptly amend or supplement the Private
Placement Memorandum in the manner described in clause (b) above, then
all solicitations and sales of Notes shall be suspended until such
time as the Issuer has so amended or supplemented the Private
Placement Memorandum, and made such amendment or supplement available
to the Dealer.
Section 5. Indemnification and Contribution.
5.1 The Issuer will indemnify and hold harmless the Dealer, each
individual, corporation, partnership, trust, association or other entity
controlling the Dealer, any affiliate of the Dealer or any such controlling
entity and their respective directors, officers, employees, partners,
incorporators, shareholders, servants, trustees and agents (hereinafter the
"Dealer Indemnitees") against any and all liabilities, penalties, suits, causes
of action, losses, damages, claims, costs and expenses (including, without
limitation, fees and disbursements of counsel) or judgments of whatever kind or
nature (each a "Claim"), imposed upon, incurred by or asserted against the
Dealer Indemnitees arising out of or based upon (i) any allegation that the
Private Placement Memorandum or the Company Information included (as of any
relevant time) or includes an untrue statement of a material fact or omitted
(as of any relevant time) or omits to state any material fact necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading or (ii) arising out of or based upon the breach by the
Issuer of any agreement, covenant or representation made in or pursuant to this
Agreement. This indemnification shall not apply to the extent that the Claim
arises out of or is based upon Dealer Information or, with respect to (ii)
only, the gross negligence or willful misconduct of any Dealer Indemnitee.
5.2 Provisions relating to claims made for indemnification under
this Section 5 are set forth on Exhibit B to this Agreement.
5.3 In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in this Section 5 is
held to be unavailable or insufficient to hold
9
<PAGE>
harmless the Indemnitees, although applicable in accordance with the terms of
this Section 5, the Issuer shall contribute to the aggregate costs incurred by
the Dealer in connection with any Claim in the proportion of the respective
economic interests of the Issuer and the Dealer; provided, however, that such
contribution by the Issuer shall be in an amount such that the aggregate costs
incurred by the Dealer do not exceed the aggregate of the commissions and fees
earned by the Dealer hereunder with respect to the issue or issues of Notes to
which such Claim relates. The respective economic interests shall be calculated
by reference to the aggregate proceeds to the Issuer of the Notes issued
hereunder and the aggregate commissions and fees earned by the Dealer
hereunder.
Section 6. Definitions.
6.1 "Claim" shall have the meaning set forth in Section 5.1.
6.2 "Company Information" at any given time shall mean the
Private Placement Memorandum (other than the Dealer Information) together with,
to the extent applicable, (i) the Issuer's most recent report on Form 10-K
filed with the SEC and each report on Form 10-Q or 8-K filed by the Issuer with
the SEC since the most recent Form 10-K, (ii) the Issuer's most recent annual
audited financial statements and each interim financial statement or report
prepared subsequent thereto, if not included in item (i) above, (iii) the
Issuer's other publicly available reports, including, but not limited to, any
publicly available filings or reports provided to its shareholders, (iv) any
other information or disclosure prepared pursuant to Section 4.3 hereof and (v)
any information prepared or approved by the Issuer in writing expressly for
dissemination to investors or potential investors in the Notes.
6.3 "Dealer Information" shall mean material concerning the
Dealer and provided by the Dealer in writing expressly for inclusion in the
Private Placement Memorandum, as set forth under the sections thereof entitled
"Chase Securities Inc. and Affiliates" and "Additional Information."
6.4 "DTC" shall mean The Depository Trust Company,
6.5 "Exchange Act" shall mean the U.S. Securities Exchange Act of
1934, as amended.
6.6 "Indemnitee" shall have the meaning set forth in Section 5.1.
6.7 "Institutional Accredited Investor" shall mean an
institutional investor that is an accredited investor within the meaning of
Rule 501 under the Securities Act and that has such knowledge and experience in
financial and business matters that it is capable of evaluating and bearing the
economic risk of an investment in the Notes, including, but not limited to, a
bank, as defined in Section 3(a)(2) of the Securities Act, or a savings and
loan association or other institution, as defined in Section 3(a)(5)(A) of the
Securities Act, whether acting in its individual or fiduciary capacity.
10
<PAGE>
6.8 "Issuing and Paying Agency Agreement" shall mean the issuing
and paying agency agreement described on the cover page of this Agreement, as
such agreement may be amended or supplemented from time to time.
6.9 "Issuing and Paying Agent" shall mean the party designated as
such on the cover page of this Agreement, as issuing and paying agent under the
Issuing and Paying Agency Agreement.
6.10 "Non-bank fiduciary or agent" shall mean a fiduciary or agent
other than (a) a bank, as defined in Section 3(a)(2) of the Securities Act, or
(b) a savings and loan association, as defined in Section 3(a)(5)(A) of the
Securities Act.
6.11 "Private Placement Memorandum" shall mean offering materials
prepared in accordance with Section 4 (including materials referred to therein
or incorporated by reference therein) provided to purchasers and prospective
purchasers of the Notes, and shall include amendments and supplements thereto
which may be prepared from time to time in accordance with this Agreement
(other than any amendment or supplement that has been completely superseded by
a later amendment or supplement).
6.12 "Qualified Institutional Buyer" shall have the meaning
assigned to that term in Rule 144A under the Securities Act.
6.13 "Regulation D" shall mean Regulation D (Rules 501 et seq.)
under the Securities Act.
6.14 "Rule 144A" shall mean Rule 144A under the Securities Act.
6.15 "SEC" shall mean the U.S. Securities and Exchange Commission.
6.16 "Securities Act" shall mean the U.S. Securities Act of 1933,
as amended.
Section 7. General
7.1 Unless otherwise expressly provided herein, all notices under
this Agreement to parties hereto shall be in writing and shall be effective
when received at the address of the respective party set forth in the Addendum
to this Agreement.
7.2 This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, without regard to its
conflict of laws provisions.
7.3 The Issuer agrees that any suit, action or proceeding brought
by the Issuer against the Dealer in connection with or arising out of this
Agreement or the Notes or the offer and sale of the Notes shall be brought
solely in the United States federal courts located in the borough of Manhattan
or the courts of the State of New York located in the Borough of Manhattan.
EACH OF THE DEALER AND THE ISSUER WAIVES ITS RIGHT TO TRIAL BY JURY IN ANY
11
<PAGE>
SUIT, ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY.
7.4 This Agreement may be terminated, at any time, by the Issuer,
upon one business day's prior notice to such effect to the Dealer, or by the
Dealer upon one business day's prior notice to such effect to the Issuer. Any
such termination, however, shall not affect the obligations of the Issuer under
Sections 3.7, 5 and 7.3 hereof, the obligations of the Dealer under Sections 5
and 7.3, or the respective representations, warranties, agreements, covenants,
rights or responsibilities of the parties made or arising prior to the
termination of this Agreement.
7.5 This Agreement is not assignable by either party hereto
without the written consent of the other party; provided, however, that the
Dealer may assign its rights and obligations under this Agreement to any
affiliate.
7.6 This Agreement may be signed in any number of counterparts,
each of which shall be an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument.
12
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed as of the date and year first above written.
THE HOME DEPOT, INC., AS ISSUER
By: /s/ Carol B. Tome
----------------------------------------
Name: CAROL B. TOME
Title: SVP - FINANCE, TREASURER
CHASE SECURITIES INC., AS DEALER
By:
----------------------------------------
Name:
Title:
13
<PAGE>
ADDENDUM
1. The other dealers referred to in clause (b) of Section 1.2 of the
Agreement are as follows:
Credit Suisse First Boston Corporation
2. The addresses of the respective parties for purposes of notices under
Section 7.1 are as follows:
For the Issuer: The Home Depot, Inc.
Address: 2455 Paces Ferry Road
Atlanta, GA 30339-4024
Attention: Rebecca Flick
Telephone number: 770-384-2657
Fax number: 770-384-4929
For the Dealer: Chase Securities Inc.
Address: Money Market Division
270 Park Avenue, 9th Floor
New York, N.Y. 10017
Attention: Short & Medium Term Finance
Telephone number: 212-325-7198
Fax number: 212-325-8183
14
<PAGE>
EXHIBIT A
FORM OF LEGEND FOR
PRIVATE PLACEMENT MEMORANDUM AND NOTES
THE NOTES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "ACT"), OR ANY OTHER APPLICABLE SECURITIES LAW, AND OFFERS AND SALES
THEREOF MAY BE MADE ONLY IN COMPLIANCE WITH AN APPLICABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS.
BY ITS ACCEPTANCE OF A NOTE, THE PURCHASER WILL BE DEEMED TO REPRESENT THAT IT
HAS BEEN AFFORDED AN OPPORTUNITY TO INVESTIGATE MATTERS RELATING TO THE ISSUER
AND THE NOTES, THAT IT IS NOT ACQUIRING SUCH NOTE WITH A VIEW TO ANY
DISTRIBUTION THEREOF AND THAT IT IS EITHER (A) AN INSTITUTIONAL INVESTOR THAT
IS AN ACCREDITED INVESTOR WITHIN THE MEANING OF RULE 501 (a) UNDER THE ACT AND
THAT EITHER IS PURCHASING NOTES FOR ITS OWN ACCOUNT, IS A U.S. BANK (AS DEFINED
IN SECTION 3(a)(2) OF THE ACT) OR A SAVINGS AND LOAN ASSOCIATION OR OTHER
INSTITUTION (AS DEFINED IN SECTION 3(a)(5)(A) OF THE ACT) ACTING IN ITS
INDIVIDUAL OR FIDUCIARY CAPACITY OR IS A FIDUCIARY OR AGENT (OTHER THAN A U.S.
BANK OR SAVINGS AND LOAN ASSOCIATION) PURCHASING NOTES FOR ONE OR MORE ACCOUNTS
EACH OF WHICH IS AN INSTITUTIONAL ACCREDITED INVESTOR (i) WHICH ITSELF
POSSESSES SUCH KNOWLEDGE AND EXPERIENCE OR (ii) WITH RESPECT TO WHICH SUCH
PURCHASER HAS SOLE INVESTMENT DISCRETION; OR (B) A QUALIFIED INSTITUTIONAL
BUYER ("QIB") WITHIN THE MEANING OF RULE 144A UNDER THE ACT WHICH IS ACQUIRING
NOTES FOR ITS OWN ACCOUNT OR FOR ONE OR MORE ACCOUNTS, EACH OF WHICH IS A QIB
AND WITH RESPECT TO EACH OF WHICH THE PURCHASER HAS SOLE INVESTMENT DISCRETION;
AND THE PURCHASER ACKNOWLEDGES THAT IT IS AWARE THAT THE SELLER MAY RELY UPON
THE EXEMPTION FROM THE REGISTRATION PROVISIONS OF SECTION 5 OF THE ACT PROVIDED
BY RULE 144A. BY ITS ACCEPTANCE OF A NOTE, THE PURCHASER THEREOF ALSO SHALL
ALSO BE DEEMED TO AGREE THAT ANY RESALE OR OTHER TRANSFER THEREOF WILL BE MADE
ONLY (A) IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER THE ACT, EITHER (1) TO
THE ISSUER OR TO CHASE SECURITIES INC. OR ANOTHER PERSON DESIGNATED BY THE
ISSUER AS A PLACEMENT AGENT FOR THE NOTES (COLLECTIVELY, THE "PLACEMENT
AGENTS"), NONE OF WHICH SHALL HAVE ANY OBLIGATION TO ACQUIRE SUCH NOTE, (2)
THROUGH A PLACEMENT AGENT TO AN INSTITUTIONAL ACCREDITED INVESTOR OR A QIB, OR
(3) TO A QIB IN A TRANSACTION THAT MEETS THE REQUIREMENTS OF RULE 144A AND (B)
IN MINIMUM AMOUNTS OF $250,000.
15
<PAGE>
EXHIBIT B
FURTHER PROVISIONS RELATING
TO INDEMNIFICATION
(a) The Issuer agrees to reimburse each Indemnitee for all
expenses (including reasonable fees and disbursements of internal and external
counsel) as they are incurred by it in connection with investigating or
defending any loss, claim, damage, liability or action in respect of which
indemnification may be sought under Section 5 of the Agreement (whether or not
it is a party to any such proceedings).
(b) Promptly after receipt by an Indemnitee of notice of the
existence of a Claim, such Indemnitee will, if a claim in respect thereof is to
be made against the Issuer, notify the Issuer in writing of the existence
thereof; provided that (i) the omission so to notify the Issuer will not
relieve it from any liability which it may have hereunder unless and except to
the extent it did not otherwise learn of such Claim and such failure results in
the forfeiture by the Issuer of substantial rights and defenses, and (ii) the
omission so to notify the Issuer will not relieve it from liability which it
may have to an Indemnitee otherwise than on account of this indemnity
agreement. In case any such Claim is made against any Indemnitee and it
notifies the Issuer of the existence thereof, the Issuer will be entitled to
participate therein, and to the extent that it may elect by written notice
delivered to the Indemnitee, to assume the defense thereof, with counsel
reasonably satisfactory to such Indemnitee; provided that if the defendants in
any such Claim include both the Indemnitee and the Issuer and the Indemnitee
shall have concluded that there may be legal defenses available to it which are
different from or additional to those available to the Issuer, the Issuer shall
not have the right to direct the defense of such Claim on behalf of such
Indemnitee, and the Indemnitee shall have the right to select separate counsel
to assert such legal defenses on behalf of such Indemnitee. Upon receipt of
notice from the Issuer to such Indemnitee of the Issuer's election so to assume
the defense of such Claim and approval by the Indemnitee of counsel, the Issuer
will not be liable to such Indemnitee for expenses incurred thereafter by the
Indemnitee in connection with the defense thereof (other than reasonable costs
of investigation) unless (i) the Indemnitee shall have employed separate
counsel in connection with the assertion of legal defenses in accordance with
the proviso to the next preceding sentence (it being understood, however, that
the Issuer shall not be liable for the expenses of more than one separate
counsel (in addition to any local counsel in the jurisdiction in which any
Claim is brought), approved by the Dealer, representing the Indemnitee who is
party to such Claim), (ii) the Issuer shall not have employed counsel
reasonably satisfactory to the Indemnitee to represent the Indemnitee within a
reasonable time after notice of existence of the Claim or (iii) the Issuer has
authorized in writing the employment of counsel for the Indemnitee. The
indemnity, reimbursement and contribution obligations of the Issuer hereunder
shall be in addition to any other liability the Issuer may otherwise have to an
Indemnitee and shall be binding upon and inure to the benefit of any
successors, assigns,
16
<PAGE>
heirs and personal representatives of the Issuer and any Indemnitee. The Issuer
agrees that without the Dealer's prior written consent, it will not settle,
compromise or consent to the entry of any judgment in any Claim in respect of
which indemnification may be sought under the indemnification provision of the
Agreement (whether or not the Dealer or any other Indemnitee is an actual or
potential party to such Claim), unless such settlement, compromise or consent
includes an unconditional release of each Indemnitee from all liability arising
out of such Claim.
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.34
<SEQUENCE>7
<FILENAME>g81844exv10w34.txt
<DESCRIPTION>EX-10.34 MAINTENANCE WAREHOUSE FUTUREBUILDER
<TEXT>
<PAGE>
EXHIBIT 10.34
THE MAINTENANCE WAREHOUSE FUTUREBUILDER
A 401(k) AND STOCK OWNERSHIP PLAN
AMENDMENT AND RESTATEMENT
EFFECTIVE JANUARY 1,2001
<PAGE>
THE MAINTENANCE WAREHOUSE FUTUREBUILDER
A 401(K) AND STOCK OWNERSHIP PLAN
On this 21st day of November, 2001, Maintenance Warehouse/America Corp.
(the "Controlling Company") hereby amends and restates The Maintenance Warehouse
FutureBuilder (the "Plan").
STATEMENT OF PURPOSE
A. The Plan initially was named the Maintenance Warehouse 401(k)
Savings Plan and was adopted effective as of March 17, 1997. It was renamed the
Maintenance Warehouse FutureBuilder and was last restated effective as of
December 1, 1999, and has been amended since that date. Generally effective
January 1, 2001, the Plan, as set forth in this document, is intended and
should be construed as a restatement and continuation of the Plan as previously
in effect. In addition to operational changes, this restatement of the Plan is
intended to bring the Plan into compliance with the requirements of current
laws and regulations enacted or issued prior to the adoption date of this
restatement, including, but not limited to, the General Agreement on Tariffs
and Trade as amended in 1994, the Uniformed Services Employment and
Reemployment Rights Act of 1994, the Small Business Job Protection Act of 1996,
the Taxpayer Relief Act of 1997 (the previous four laws and regulations are
collectively known as the "GUST Amendments"), and the Internal Revenue Service
Restructuring and Reform Act of 1998.
B. The primary purpose of the Plan is to recognize the
contributions made to the Controlling Company and its participating affiliates
by employees and to reward those
<PAGE>
contributions by providing eligible employees with an opportunity to accumulate
savings for their future security.
C. The Controlling Company intends that the Plan be a profit
sharing plan qualified under Sections 401(a) and 401(k) of the Internal
Revenue Code of 1986, as amended.
STATEMENT OF AGREEMENT
To amend and restate the Plan with the purposes and goals as
hereinabove described, the Controlling Company hereby sets forth the terms and
provisions as follows:
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
STATEMENT OF PURPOSE............................................................................................1
ARTICLE I DEFINITIONS...........................................................................................1
1.1 Account................................................................................................1
1.2 ACP or Actual Contribution Percentage..................................................................1
1.3 ACP Tests..............................................................................................1
1.4 Active Participant.....................................................................................1
1.5 Administrative Committee...............................................................................2
1.6 ADP or Actual Deferral Percentage......................................................................2
1.7 ADP Tests..............................................................................................2
1.8 Affiliate..............................................................................................2
1.9 Annual Addition........................................................................................2
1.10 Basic Matching Contribution............................................................................2
1.11 Before-Tax Account.....................................................................................3
1.12 Before-Tax Contributions...............................................................................3
1.13 Beneficiary............................................................................................3
1.14 Board..................................................................................................3
1.15 Break in Service.......................................................................................3
(a) Leave of Absence.......................................................................................3
(b) Maternity or Paternity Leave...........................................................................3
(c) Effect of Family and Medical Leave Act.................................................................3
1.16 Business Day...........................................................................................3
1.17 Code...................................................................................................3
1.18 Company Stock..........................................................................................4
1.19 Company Stock Fund.....................................................................................4
1.20 Compensation...........................................................................................4
(a) Benefit Compensation...................................................................................4
(b) Section 404 Compensation...............................................................................5
(c) Top-Heavy Compensation.................................................................................5
(d) Section 415 Compensation...............................................................................5
(e) Key Employee and Highly Compensated Employee Compensation..............................................5
(f) Testing Compensation...................................................................................5
1.21 Contributions..........................................................................................5
1.22 Controlling Company....................................................................................5
1.23 Covered Employee.......................................................................................5
1.24 Deferral Election......................................................................................6
1.25 Defined Benefit Minimum................................................................................6
1.26 Defined Benefit Plan...................................................................................6
1.27 Defined Contribution Minimum...........................................................................6
1.28 Defined Contribution Plan..............................................................................6
1.29 Determination Date.....................................................................................6
1.30 Disability or Disabled.................................................................................6
1.31 Effective Date.........................................................................................7
1.32 Elective Deferrals.....................................................................................7
</TABLE>
i
<PAGE>
<TABLE>
<S> <C>
1.33 Eligible Nonhighly Compensated Participant.............................................................7
1.34 Eligible Participant...................................................................................7
1.35 Eligible Retirement Plan...............................................................................7
1.36 Eligible Rollover Distribution.........................................................................7
1.37 Employee...............................................................................................7
1.38 Employment Date........................................................................................8
1.39 Entry Date.............................................................................................8
1.40 ERISA..................................................................................................8
1.41 Forfeiture.............................................................................................8
1.42 Highly Compensated Employee............................................................................8
(a) General Rule...........................................................................................8
(b) Excluded Employees.....................................................................................9
(c) Former Employees.......................................................................................9
(d) Nonresident Aliens.....................................................................................9
(e) Compliance with Code Section 414(q)....................................................................9
1.43 Home Depot.............................................................................................9
1.44 Home Depot Board.......................................................................................9
1.45 Hour of Service........................................................................................9
(a) General Rule...........................................................................................9
(b) Equivalencies.........................................................................................10
(c) Changes by Administrative Committee...................................................................10
(d) Computation Period....................................................................................11
1.46 Investment Committee..................................................................................11
1.47 Investment Fund or Funds..............................................................................11
1.48 Key Employee..........................................................................................11
1.49 Leave of Absence......................................................................................11
1.50 Limitation Year.......................................................................................11
1.51 Matching Account......................................................................................11
1.52 Matching Contributions................................................................................11
1.53 Maternity or Paternity Leave..........................................................................11
1.54 Maximum Deferral Amount...............................................................................11
1.55 Named Fiduciary.......................................................................................11
1.56 Non-Key Employee......................................................................................11
1.57 Normal Retirement Age.................................................................................12
1.58 Participant...........................................................................................12
1.59 Participating Company.................................................................................12
1.60 Permissive Aggregation Group..........................................................................12
1.61 Plan..................................................................................................12
1.62 Plan Year.............................................................................................12
1.63 Prior Plan............................................................................................12
1.64 Qualified Nonelective Account.........................................................................12
1.65 Qualified Nonelective Contributions...................................................................12
1.66 Qualified Spousal Waiver..............................................................................12
1.67 Required Aggregation Group............................................................................12
1.68 Restoration Contributions.............................................................................12
1.69 Rollover Account......................................................................................13
</TABLE>
ii
<PAGE>
<TABLE>
<S> <C>
1.70 Rollover Contribution.................................................................................13
1.71 Spouse or Surviving Spouse............................................................................13
1.72 Supplemental Annual Matching Contributions............................................................13
1.73 Top-Heavy Group.......................................................................................13
1.74 Top-Heavy Plan........................................................................................13
1.75 Transfer Account......................................................................................13
1.76 Transfer Contributions................................................................................13
1.77 Trust or Trust Agreement..............................................................................13
1.78 Trustee...............................................................................................14
1.79 Trust Fund............................................................................................14
1.80 Valuation Date........................................................................................14
1.81 Year of Eligibility Service...........................................................................14
(a) Computation Period....................................................................................14
(b) Predecessor Employer..................................................................................14
(c) Service Counted under The Home Depot FutureBuilder....................................................14
(d) Reemployed Veterans...................................................................................14
1.82 Years of Vesting Service..............................................................................14
(a) Pre-Break Service.....................................................................................15
(b) Post-Break Service....................................................................................15
(c) Predecessor Plan......................................................................................15
(d) Predecessor Employer..................................................................................15
(e) Service Counted under The Home Depot FutureBuilder....................................................15
(f) Reemployed Veterans...................................................................................15
ARTICLE II ELIGIBILITY.........................................................................................16
2.1 Initial Eligibility Requirements......................................................................16
(a) General Rule..........................................................................................16
(b) Participation Upon Effective Date.....................................................................16
(c) New Participating Companies...........................................................................16
(d) Predecessor Employer..................................................................................16
2.2 Treatment of Interruptions of Service.................................................................16
(a) Leave of Absence or Layoff............................................................................16
(b) Termination Before Participation......................................................................16
(c) Termination After Participation.......................................................................16
2.3 Change in Status......................................................................................17
(a) Exclusion Before Participation........................................................................17
(b) Exclusion After Participation.........................................................................17
(c) Change to Covered Employee Status.....................................................................17
ARTICLE III CONTRIBUTIONS......................................................................................18
3.1 Before-Tax Contributions.............................................................................18
(a) Generally.............................................................................................18
(b) Deferral Elections....................................................................................18
(1) Effective Date...............................................................................18
(2) Term.........................................................................................18
(3) Revocation...................................................................................19
(4) Modification by Participant..................................................................19
(5) Modification by Administrative Committee.....................................................19
</TABLE>
iii
<PAGE>
<TABLE>
<S> <C>
3.2 Matching Contributions................................................................................19
(a) Basic Matching Contributions..........................................................................19
(b) Supplemental Annual Matching Contributions............................................................19
(1) General......................................................................................19
(2) Conditions for Eligibility...................................................................20
(3) Limitations on Supplemental Annual Matching Contributions Made on
Behalf of Highly Compensated Employees....................................................20
3.3 Qualified Nonelective Contributions...................................................................20
3.4 Form of Contributions.................................................................................21
3.5 Timing of Contributions...............................................................................21
(a) Before-Tax Contributions..............................................................................21
(b) Matching and Qualified Nonelective Contributions......................................................21
3.6 Contingent Nature of Company Contributions............................................................21
3.7 Restoration Contributions.............................................................................21
(a) Restoration of Forfeitures............................................................................21
(b) Restoration Contribution..............................................................................21
3.8 Reemployed Veterans...................................................................................22
ARTICLE IV ROLLOVERS AND TRANSFERS BETWEEN PLANS...............................................................23
4.1 Rollover Contributions................................................................................23
(a) Request by Active Participant.........................................................................23
(b) Acceptance of Rollover................................................................................23
4.2 Transfer Contributions................................................................................23
(a) Direct Transfers Permitted............................................................................23
(b) Mergers and Spin-offs Permitted.......................................................................23
(c) Establishment of Transfer Accounts....................................................................23
(d) Transfer Accounts.....................................................................................24
4.3 Spin-offs to Other Plans..............................................................................24
ARTICLE V PARTICIPANTS' ACCOUNTS; CREDITING AND ALLOCATIONS....................................................25
5.1 Establishment of Participants' Accounts...............................................................25
5.2 Allocation and Crediting of Before-Tax, Basic Matching, Rollover and
Transfer Contributions............................................................................25
5.3 Allocation and Crediting of Supplemental Annual Matching Contributions................................25
5.4 Allocation and Crediting of Qualified Nonelective Contributions.......................................25
(a) General Provision.....................................................................................25
(b) Per Capita Qualified Nonelective Contributions........................................................26
(c) Proportional Qualified Nonelective Contributions......................................................26
(d) Section 415 Qualified Nonelective Contributions.......................................................26
(e) Qualified Nonelective Matching Contributions..........................................................26
5.5 Crediting of Restoration Contributions................................................................26
5.6 Adjustments to Accounts...............................................................................27
5.7 Allocation of Adjustments Upon Change in Capitalization...............................................27
5.8 Allocation of Forfeitures.............................................................................27
5.9 Notice to Participants of Account Balances............................................................27
5.10 Good Faith Valuation Binding..........................................................................27
5.11 Errors and Omissions in Accounts......................................................................28
</TABLE>
iv
<PAGE>
<TABLE>
<S> <C>
ARTICLE VI CONTRIBUTION AND SECTION 415 LIMITATIONS AND
NONDISCRIMINATION REQUIREMENTS...................................................................29
6.1 Deductibility Limitations.............................................................................29
6.2 Maximum Limitation on Elective Deferrals..............................................................29
(a) Maximum Elective Deferrals Under Participating Company Plans..........................................29
(b) Return of Excess Before-Tax Contributions.............................................................29
(c) Return of Excess Elective Deferrals Provided by Other Participating Company
Arrangements.......................................................................................29
(d) Discretionary Return of Elective Deferrals............................................................29
(e) Return of Excess Annual Additions.....................................................................30
6.3 Nondiscrimination Requirements for Before-Tax Contributions...........................................30
(a) ADP Test..............................................................................................30
(b) Multiple Plans........................................................................................30
(c) Adjustments to Actual Deferral Percentages............................................................31
6.4 Nondiscrimination Requirements for Matching Contributions.............................................32
(a) ACP Test..............................................................................................32
(b) Multiple Plans........................................................................................32
(c) Adjustments to Actual Contribution Percentages........................................................32
6.5 Multiple Use of Tests.................................................................................34
(a) Aggregate Limitation..................................................................................34
(b) Multiple Plans........................................................................................34
(c) Correction............................................................................................34
(d) Application...........................................................................................35
6.6 Order of Application..................................................................................35
6.7 Code Section 415 Limitations on Maximum Contributions.................................................35
(a) General Limit on Annual Additions.....................................................................35
(b) Combined Plan Limit...................................................................................35
(c) Correction of Excess Annual Additions.................................................................35
(d) Annual Addition.......................................................................................36
(e) Compliance with Code Section 415......................................................................37
6.8 Construction of Limitations and Requirements..........................................................37
ARTICLE VII INVESTMENTS........................................................................................38
7.1 Establishment of Trust Account........................................................................38
7.2 Investment Funds......................................................................................38
(a) Establishment of Investment Funds.....................................................................38
(b) Reinvestment of Cash Earnings.........................................................................38
7.3 Participant Direction of Investments..................................................................38
(a) Investment of Contributions...........................................................................38
(b) Investment of Existing Account Balances...............................................................39
(c) Conditions Applicable to Elections....................................................................39
(d) Restrictions on Investments...........................................................................39
7.4 Valuation.............................................................................................40
7.5 Voting and Tender Offer Rights with Respect to Investment Funds.......................................40
7.6 Purchase of Life Insurance............................................................................40
7.7 Fiduciary Responsibilities for Investment Directions..................................................40
</TABLE>
v
<PAGE>
<TABLE>
<S> <C>
7.8 Appointment of Investment Manager; Authorization to Invest in Collective Trust........................40
(a) Investment Manager....................................................................................40
(b) Collective Trust......................................................................................41
7.9 Value of Company Stock................................................................................41
7.10 Voting and Tender Offer Rights With Respect to Company Stock..........................................41
(a) Voting Rights.........................................................................................41
(b) Tender Offer Rights...................................................................................41
(c) Confidentiality.......................................................................................42
(d) Dissemination of Pertinent Information................................................................42
ARTICLE VIII VESTING IN ACCOUNTS...............................................................................43
8.1 Vesting...............................................................................................43
(a) General Vesting Rule..................................................................................43
(1) Fully Vested Accounts........................................................................43
(2) Matching Account.............................................................................43
(b) Grandfathered Vesting.................................................................................43
8.2 Vesting Upon Attainment of Normal Retirement Age, Death or Disability.................................43
8.3 Timing of Forfeitures and Vesting after Restoration Contributions.....................................44
8.4 Vesting following Partial Distributions...............................................................44
8.5 Amendment to Vesting Schedule.........................................................................44
ARTICLE IX PAYMENT OF BENEFITS FROM ACCOUNTS...................................................................46
9.1 Benefits Payable for Reasons Other Than Death.........................................................46
(a) General Rule..........................................................................................46
(b) Timing of Distribution................................................................................46
(c) Restrictions on Distributions from Before-Tax and Qualified Nonelective Accounts......................47
(d) Delay Upon Reemployment or Termination of Disability..................................................48
(e) Distribution Upon Sale of Business....................................................................48
9.2 Death Benefits........................................................................................49
9.3 Forms of Distribution.................................................................................49
(a) Method................................................................................................49
(b) Direct Rollover Distributions.........................................................................49
(c) Assets Distributed....................................................................................49
9.4 Cash-Out Payment of Benefits..........................................................................49
9.5 Qualified Domestic Relations Orders...................................................................50
9.6 Beneficiary Designation...............................................................................50
(a) General...............................................................................................50
(b) No Designation or Designee Dead or Missing............................................................51
9.7 Claims................................................................................................51
(a) Procedure.............................................................................................51
(b) Review Procedure......................................................................................51
(c) Satisfaction of Claims................................................................................52
9.8 Explanation of Rollover Distributions.................................................................52
9.9 Unclaimed Benefits....................................................................................52
9.10 Recordkeeper Transition Rule..........................................................................53
ARTICLE X WITHDRAWALS AND LOANS................................................................................54
</TABLE>
vi
<PAGE>
<TABLE>
<S> <C>
10.1 Hardship Withdrawals..................................................................................54
(a) Parameters of Hardship Withdrawals....................................................................54
(b) Immediate and Heavy Financial Need....................................................................54
(c) Necessary to Satisfy a Financial Need.................................................................54
(d) Form of Distribution..................................................................................55
(e) Source of Funds.......................................................................................55
10.2 Age 65 Withdrawals....................................................................................55
(a) Conditions............................................................................................55
(b) Source of Funds.......................................................................................55
(c) Method................................................................................................55
10.3 Rollover Account Withdrawals..........................................................................55
10.4 Election to Withdraw..................................................................................55
10.5 Payment of Withdrawal.................................................................................56
10.6 Distributions and Withdrawals from Transfer Accounts..................................................56
10.7 Loans to Participants.................................................................................56
(a) Grant of Authority....................................................................................56
(b) Nondiscriminatory Policy..............................................................................56
(c) Minimum Loan Amount...................................................................................57
(d) Maximum Loan Amount...................................................................................57
(e) Maximum Loan Term.....................................................................................57
(f) Terms of Repayment....................................................................................58
(g) Adequacy of Security..................................................................................58
(h) Rate of Interest......................................................................................58
(i) Source of Loan Amounts................................................................................58
(j) Crediting Loan Payments to Accounts...................................................................59
(k) Remedies in the Event of Default......................................................................59
(1) Qualified Military Service............................................................................59
10.8 Transition Rule.......................................................................................59
ARTICLE XI ADMINISTRATION......................................................................................60
11.1 Administrative Committee; Appointment and Term of Office..............................................60
(a) Appointment...........................................................................................60
(b) Certification.........................................................................................60
11.2 Organization of Administrative Committee..............................................................60
11.3 Powers and Responsibility.............................................................................60
11.4 Records of Administrative Committee...................................................................61
(a) Notices and Directions................................................................................61
(b) Records...............................................................................................61
11.5 Delegation............................................................................................61
11.6 Reporting and Disclosure..............................................................................62
11.7 Construction of the Plan..............................................................................62
11.8 Assistants and Advisors...............................................................................62
(a) Engaging Advisors.....................................................................................62
(b) Reliance on Advisors..................................................................................62
11.9 Investment Committee..................................................................................63
(a) Appointment...........................................................................................63
(b) Duties................................................................................................63
</TABLE>
vii
<PAGE>
<TABLE>
<S> <C>
11.10 Direction of Trustee..................................................................................63
11.11 Bonding...............................................................................................63
11.12 Indemnification.......................................................................................63
ARTICLE XII ALLOCATION OF AUTHORITY AND RESPONSIBILITIES.......................................................65
12.1 Controlling Company and Board.........................................................................65
(a) General Responsibilities..............................................................................65
(b) Authority of Participating Companies..................................................................65
12.2 Administrative Committee..............................................................................65
12.3 Investment Committee..................................................................................65
12.4 Trustee...............................................................................................65
12.5 Limitations on Obligations of Fiduciaries.............................................................65
12.6 Delegation............................................................................................66
12.7 Multiple Fiduciary Roles..............................................................................66
ARTICLE XIII AMENDMENT, TERMINATION AND ADOPTION...............................................................67
13.1 Amendment.............................................................................................67
13.2 Termination...........................................................................................67
(a) Right to Terminate....................................................................................67
(b) Vesting Upon Complete Termination.....................................................................67
(c) Dissolution of Trust..................................................................................67
(d) Vesting Upon Partial Termination......................................................................68
13.3 Adoption of the Plan by a Participating Company.......................................................68
(a) Procedures for Participation..........................................................................68
(b) Single Plan...........................................................................................68
(c) Authority under Plan..................................................................................69
(d) Contributions to Plan.................................................................................69
(e) Withdrawal from Plan..................................................................................69
13.4 Merger, Consolidation and Transfer of Assets or Liabilities...........................................69
ARTICLE XIV TOP-HEAVY PROVISIONS...............................................................................70
14.1 Top-Heavy Plan Years..................................................................................70
14.2 Determination of Top-Heavy Status.....................................................................70
(a) Application...........................................................................................70
(b) Special Definitions...................................................................................70
(1) Determination Date...........................................................................70
(2) Key Employee.................................................................................70
(3) Non-Key Employee.............................................................................71
(4) Permissive Aggregation Group.................................................................71
(5) Required Aggregation Group...................................................................71
(6) Top-Heavy Group..............................................................................72
(c) Special Rules.........................................................................................72
14.3 Top-Heavy Minimum Contribution........................................................................73
(a) Multiple Defined Contribution Plans...................................................................73
(b) Defined Contribution and Benefit Plans................................................................73
(c) Defined Contribution Minimum..........................................................................73
(d) Defined Benefit Minimum...............................................................................74
14.4 Top-Heavy Minimum Vesting.............................................................................74
14.5 Construction of Limitations and Requirements..........................................................74
</TABLE>
viii
<PAGE>
<TABLE>
<S> <C>
ARTICLE XV MISCELLANEOUS.......................................................................................76
15.1 Nonalienation of Benefits and Spendthrift Clause......................................................76
(a) General Nonalienation Requirements....................................................................76
(b) Exception for Qualified Domestic Relations Orders.....................................................76
(c) Exception for Loans from the Plan.....................................................................76
(d) Exception for Crimes against the Plan.................................................................76
15.2 Headings..............................................................................................77
15.3 Construction, Controlling Law.........................................................................77
15.4 No Contract of Employment.............................................................................77
15.5 Legally Incompetent...................................................................................77
15.6 Heirs, Assigns and Personal Representatives...........................................................77
15.7 Title to Assets, Benefits Supported Only By Trust Fund................................................78
15.8 Legal Action..........................................................................................78
15.9 No Discrimination.....................................................................................78
15.10 Severability..........................................................................................78
15.11 Exclusive Benefit; Refund of Contributions............................................................78
(a) Permitted Refunds.....................................................................................79
(b) Payment of Refund.....................................................................................79
(c) Limitation on Refund..................................................................................79
15.12 Plan Expenses.........................................................................................79
15.13 Special Effective Dates...............................................................................79
(a) Intent of Plan........................................................................................79
(b) Compliance............................................................................................79
SCHEDULE A PARTICIPATING COMPANIES AND EFFECTIVE DATES........................................................A-l
SCHEDULE B SERVICE WITH PREDECESSOR EMPLOYERS.................................................................B-l
</TABLE>
ix
<PAGE>
ARTICLE I
DEFINITIONS
For purposes of the Plan, the following terms, when used with an
initial capital letter, shall have the meanings set forth below unless a
different meaning plainly is required by the context.
1.1 Account shall mean, with respect to a Participant or
Beneficiary, the amount of money or other property in the Trust Fund, as is
evidenced by the last balance posted in accordance with the terms of the Plan
to the account record established for such Participant or Beneficiary. The
Administrative Committee, as required by the terms of the Plan and otherwise as
it deems necessary or desirable in its sole discretion, may establish and
maintain separate subaccounts for each Participant and Beneficiary. "Account"
shall refer to the aggregate of all separate subaccounts or to individual,
separate subaccounts, as may be appropriate in context.
1.2 ACP or Actual Contribution Percentage shall mean, with
respect to a specified group of Participants for a Plan Year, the average of
the ratios (calculated separately for each Participant in such group and
rounded to the nearest 1/100th of a percent) of (i) the total of the amount of
Matching Contributions and, to the extent designated by the Administrative
Committee, the Before-Tax and/or Qualified Nonelective Contributions, as well
as other before-tax and/or qualified nonelective contributions (excluding
Before-Tax Contributions and Qualified Nonelective Contributions counted for
purposes of Section 6.3 and any Contributions returned to a Participant or
otherwise removed from his Account to correct excess Annual Additions) actually
paid to the Trustee on behalf of each such Participant for a specified Plan
Year, to (ii) such Participant's Compensation for such specified Plan Year. If
a Highly Compensated Employee participates in the Plan and one or more other
plans of any Affiliates to which matching or after-tax contributions are made
(other than a plan for which aggregation with the Plan is not permitted), the
matching and after-tax contributions made with respect to such Highly
Compensated Employee shall be aggregated for purposes of determining his ACP.
The ACP shall be rounded to the nearest 1/100th of a percent and shall be
calculated in a manner consistent with the terms of Code Section 401(m) and the
regulations promulgated thereunder. If a Participant is eligible to participate
in the Plan for all or a portion of a Plan Year by reason of satisfying the
eligibility requirements of Article II but makes no Before-Tax Contributions
which are taken into account (as described above) for purposes of calculating
his ACP, and if he receives no allocations of Matching Contributions or
qualified nonelective contributions which are taken into account (as described
above) for purposes of calculating his ACP, such Participant's ACP for such
Plan Year shall be zero.
1.3 ACP Tests shall mean the nondiscrimination tests described in
Sections 6.4 and 6.5.
1.4 Active Participant shall mean, for any Plan Year (or any
portion thereof), any Covered Employee who, pursuant to the terms of Article
II, has been admitted to, and not removed from, active participation in the
Plan since the last date his employment commenced or recommenced; provided, to
the extent applicable, "Active Participant" shall apply separately to each type
of Contribution which has a different eligibility requirement under
Section 2.1(a).
1
<PAGE>
1.5 Administrative Committee shall mean the committee which shall
act on behalf of the Controlling Company to administer the Plan as provided in
Article XI The Administrative Committee shall be the plan administrator, as
that term is defined in Code Section 414(g).
1.6 ADP or Actual Deferral Percentage shall mean, with respect to
a specified group of Participants for a Plan Year, the average of the ratios
(calculated separately for each Participant in such group and rounded to the
nearest 1/100th of a percent) of (i) the total of the amount of Before-Tax
Contributions (excluding Before-Tax Contributions, if any, designated by the
Administrative Committee to be taken into account under Section 6.4 to help
satisfy the ACP Tests, or removed from a Participant's Account to correct
excess Annual Additions) and, to the extent designated under Section 6.3(c) by
the Administrative Committee, the Qualified Nonelective Contributions
[excluding Qualified Nonelective Contributions counted for purposes of Section
6.4(c)] as well as other before-tax and/or qualified nonelective contributions
actually paid to the Trustee on behalf of each such Participant for a specified
Plan Year, to (ii) such Participant's Compensation for such specified Plan
Year. If a Highly Compensated Employee participates in the Plan and one or more
other plans of any Affiliates to which before-tax contributions are made (other
than a plan for which aggregation with the Plan is not permitted), the
before-tax contributions made with respect to such Highly Compensated Employee
shall be aggregated for purposes of determining his ADP. The ADP shall be
rounded to the nearest 1/100th of a percent and shall be calculated in a manner
consistent with the terms of Code Section 401(k)and the regulations promulgated
thereunder. If a Participant is eligible to participate in the Plan for all or
a portion of a Plan Year by reason of satisfying the eligibility requirements
of Article II but makes no Before-Tax Contributions and receives no allocation
of Qualified Nonelective Contributions that are taken into account for purposes
of the ADP Tests, such Participant's ADP for such Plan Year shall be zero.
1.7 ADP Tests shall mean the nondiscrimination tests described in
Sections 6.3 and 6.5.
1.8 Affiliate shall mean, as of any date, (i) a Participating
Company, and (ii) any company, person or organization which, on such date, (A)
is a member of the same controlled group of corporations [within the meaning of
Code Section 414(b)] as is a Participating Company; (B) is a trade or business
(whether or not incorporated) which controls, is controlled by or is under
common control [within the meaning of Code Section 414(c)] with a Participating
Company; (C) is a member of an affiliated service group [as defined in Code
Section 414(m)] which includes a Participating Company; or (D) is required to
be aggregated with a Participating Company pursuant to regulations promulgated
under Code Section 414(o). Solely for purposes of Sections 6.7 and 1.20(d), the
term "Affiliate" as defined in this Section shall be deemed to include any
entity that would be an Affiliate if the phrase "more than 50 percent" were
substituted for the phrase "at least 80 percent" in each place the latter
phrase appears in Code Section 1563(a)(l).
1.9 Annual Addition shall mean the sum of the amounts described
in Section 6.7(d).
1.10 Basic Matching Contribution shall mean the amounts paid by
each Participating Company to the Trust Fund as a basic match to Participants'
Before-Tax Contributions as provided in Section 3.2(a).
2
<PAGE>
1.11 Before-Tax Account shall mean the separate subaccount
established and maintained on behalf of a Participant or Beneficiary to reflect
his interest in the Trust Fund attributable to his Before-Tax Contributions.
1.12 Before-Tax Contributions shall mean the amount paid by each
Participating Company to the Trust Fund at the election of Participants
pursuant to the terms of Section 3.l(a).
1.13 Beneficiary shall mean the person(s) designated in accordance
with Section 9.6 to receive any death benefits that may be payable under the
Plan upon the death of a Participant.
1.14 Board shall mean the board of directors of the Controlling
Company or any committee(s) or individual(s) authorized to act on behalf of
such board of directors.
1.15 Break in Service means any Plan Year during which an Employee
fails to complete at least 1 Hour of Service; provided, in determining whether
a Break in Service has occurred, the terms of subsections (a), (b) and (c)
hereof shall apply.
(a) Leave of Absence. A Break in Service shall not be
deemed to have occurred during any period for which he is granted a Leave of
Absence.
(b) Maternity or Paternity Leave. For purposes of
determining whether or not an Employee has incurred a Break in Service, an
Employee absent from work due to a Maternity or Paternity Leave shall be
credited with at least 1 Hour of Service in the year in which the Maternity or
Paternity Leave begins, unless such Hour of Service is not required to prevent
the Employee from incurring a Break in Service in such year, in which event
such Hour of Service shall be credited to the Employee in the immediately
following year. No Hour of Service shall be credited due to Maternity or
Paternity Leave as described in this Section unless the Employee furnishes
proof satisfactory to the Administrative Committee (A) that his absence from
work was due to a Maternity or Paternity and (B) of the number of days he was
absent due to the Maternity or Paternity Leave. The Administrative Committee
shall prescribe uniform and nondiscriminatory procedures by which to make the
above determinations.
(c) Effect of Family and Medical Leave Act. For purposes
of determining whether or not an Employee has incurred a Break in Service, and
solely for the purpose of avoiding a Break in Service, to the extent required
under the Family and Medical Leave Act of 1993 and the regulations thereunder,
an Employee shall be deemed to be performing services for an Affiliate during
any period the Employee is granted leave under such Act (i) for the birth of a
child, (ii) the placement with the Employee of a child for adoption or foster
care, (iii) to care for the spouse or a child or parent of the Employee with a
serious health condition, or (iv) for a serious health condition that makes the
Employee unable to perform the functions of the Employee's job.
1.16 Business Day shall mean any day other than a Saturday, Sunday
or a day designated as a holiday by the Federal Government.
1.17 Code shall mean the Internal Revenue Code of 1986, as
amended, and any succeeding federal tax provisions.
3
<PAGE>
1.18 Company Stock shall mean the $.05 par value per share common
stock of Home Depot.
1.19 Company Stock Fund shall mean the Investment Fund invested
primarily in shares of Company Stock.
1.20 Compensation shall have the meaning set forth in subsection
(a), (b), (c), (d), (e) or (f) hereof, whichever is applicable:
(a) Benefit Compensation. For purposes of determining
the amount of Before-Tax Contributions pursuant to Section 3.1, determining the
amount of Matching Contributions pursuant to Section 3.2, allocating Qualified
Nonelective Contributions pursuant to Section 5.4, and for all other purposes
except those set forth in subsections (b), (c), (d), (e) and (f) hereof,
"Compensation" shall mean, for any Plan Year, the total of the amounts
described in subsections (1) and (2) minus the amounts described in subsections
(3), (4), (5) and (6), as follows:
(1) all amounts that are wages within the
meaning of Code Section 3401 (a) and all other payments of
compensation to an Employee by an Affiliate (in the course of the
Affiliate's trade or business) for which the Affiliate is required to
furnish the Employee a written statement under Code Sections 6041(d),
6051(a)(3) and 6052 (i.e., all amounts reportable by Affiliates on IRS
Form W-2); provided, such amounts shall be determined without regard
to any rules that limit the remuneration included in wages based on
the nature or location of employment or the services performed [such
as the exception for agricultural labor in Code Section 3401(a)(2)];
plus
(2) any elective deferral (as defined in
Section 402(g)(3)), and any amount which is contributed or deferred by
an Affiliate at the election of the Employee and which is not
includible in the gross income of the Employee by reason of Code
Section 125 or 457, or for Plan Years beginning on or after January 1,
2001, by reason of Code Section 132(f)(4); minus
(3) all amounts included in subsection (1) that
consist of any reimbursements or other expense allowances, fringe
benefits (cash and noncash), moving expenses, deferred compensation
and welfare benefits (even if includible in gross income); minus
(4) any amounts included in subsection (1) or
(2) that consist of amounts paid or made available to a Participant
during the Plan Year while he is not an Active Participant; minus
(5) any payments under a legal settlement or
judgment involving the Controlling Company or an Affiliate, unless
such settlement or judgment expressly provides that such payments are
to be taken into account for purposes of determining a Participant's
benefits under the Plan; minus
(6) all Compensation in excess of $170,000 (or
such other limit as is applicable for the Plan Year under Code Section
401(a)(17)).
4
<PAGE>
(b) Section 404 Compensation. Solely for purposes of
Section 6.1 (relating to maximum deductible contribution limitations under Code
Section 404), "Compensation" shall mean, with respect to a Participant for a
specified period, the amounts from all Affiliates referred to in subsection
(a)(l) hereof minus the amount described in (a)(6) hereof.
(c) Top-Heavy Compensation. Solely for purposes of
Section 14.3 (relating to minimum Contributions under a Top-Heavy Plan),
"Compensation" shall mean, with respect to a Participant for a specified
period, the amounts from all Affiliates referred to in subsections (a)(l) and
(a)(2) hereof minus the amount described in (a)(6) hereof.
(d) Section 415 Compensation. Solely for purposes of
Section 6.7 (relating to maximum contribution and benefit limitations under
Code Section 415), "Compensation" shall mean, with respect to a Participant for
a Limitation Year, the total of the amounts from all Affiliates referred to in
subsections (a)(l) and (a)(2) hereof if "Limitation Year" were substituted for
"Plan Year"; provided, prior to January 1, 1998, only the amounts in subsection
(a)(l) shall be included.
(e) Key Employee and Highly Compensated Employee
Compensation. Solely for purposes of determining which Employees are Key
Employees under Section 14.2(b)(2) and which Employees are Highly Compensated
Employees under Section 1.42 for any applicable Plan Year, "Compensation" shall
mean, with respect to an Employee for a specified Plan Year, the total of the
amounts from all Affiliates referred to in subsections (a)(l) and (a)(2)
hereof; provided that for determining Highly Compensated Employees for Plan
Years beginning prior to January 1, 2002, amounts described in Code Section
132(f)(4) shall be disregarded.
(f) Testing Compensation. For purposes of performing
discrimination testing to ensure compliance with Code Sections 401(a)(4),
401(k)and 401(m)and for purposes of allocating Qualified Nonelective
Contributions under Section 5.4(d), "Compensation" generally shall mean the
total of the amounts from all Affiliates determined under subsection (a)
without regard to subsection (a)(5); provided, on a plan year-by-plan year
basis, the Administrative Committee may elect to use any other definition that
satisfies the nondiscrimination requirements of Code Section 414(s).
1.21 Contributions shall mean, individually or collectively, the
Before-Tax, Matching, Qualified Nonelective, Rollover, Restoration and Transfer
Contributions permitted under the Plan.
1.22 Controlling Company shall mean Maintenance Warehouse/America
Corp., a Texas corporation, and its successors which adopt the Plan.
1.23 Covered Employee shall mean an Employee of a Participating
Company other than:
(a) An Employee who is a leased employee within the
meaning of Code Section 414(n);
5
<PAGE>
(b) An individual classified as an independent
contractor or leased employee under a Participating Company's customary worker
classification procedures (whether or not such individual is actually an
Employee);
(c) An Employee who is a member of a collective
bargaining unit, unless the terms of the collective bargaining agreement
require that the Employee be eligible to participate in the Plan; or
(d) An Employee who is a nonresident alien who receives
no earned income from an Affiliate which constitutes income from sources within
the United States.
1.24 Deferral Election shall mean an election by an Active
Participant directing the Participating Company of which he is an Employee to
withhold a percentage of his current Compensation from his paychecks and to
contribute such withheld amount to the Plan as Before-Tax Contributions,
pursuant to the terms of Section 3.1.
1.25 Defined Benefit Minimum shall mean the minimum benefit level
as described in Section 14.3(d).
1.26 Defined Benefit Plan shall mean any qualified retirement plan
maintained by an Affiliate which is not a Defined Contribution Plan.
1.27 Defined Contribution Minimum shall mean the minimum
contribution level as described in Section 14.3(c).
1.28 Defined Contribution Plan shall mean any qualified retirement
plan maintained by an Affiliate which provides for an individual account for
each participant and for benefits based solely on the amount contributed to the
participant's account and any income, expenses, gains, losses and forfeitures
of accounts of other participants, which may be allocated to such participant's
account.
1.29 Determination Date shall mean the date described in Section
14.2(b)(l).
1.30 Disability or Disabled shall mean that a Participant is
wholly prevented from engaging in his regular duties for the Controlling
Company or an Affiliate by reason of a medically determinable physical or
mental impairment that can be expected to result in death or to be of
long-continued and indefinite duration. The determination of Disability shall
be made by the Administrative Committee or an entity or person appointed by the
Administrative Committee; provided, until the Administrative Committee
determines otherwise, such determination shall be made by an insurance carrier
that offers long-term disability insurance to the public and that is selected
by the Administrative Committee. In determining whether a Participant has
suffered a Disability, the Administrative Committee or its designee may require
such medical proof as it deems necessary, including the certificate of one or
more licensed physicians selected by the Administrative Committee. The decision
of the Administrative Committee as to Disability shall be final and binding.
Notwithstanding anything herein to the contrary, a Participant shall be deemed
to be Disabled upon a determination by the Social Security Administration,
while the Participant is an Employee, that the Participant is eligible for
Social Security disability benefits.
6
<PAGE>
1.31 Effective Date shall mean January 1, 2001, the date that this
restatement of the Plan generally shall be effective; provided, any effective
date specified herein for any provision, if different from the "Effective
Date," shall control (see also Section 15.14). The effective date of
participation in the Plan for each Participating Company shall be the date set
forth with respect to the Participating Company in Schedule A hereto.
1.32 Elective Deferrals shall mean, with respect to a Participant
for any calendar year, the total amount of his Before-Tax Contributions plus
such other amounts as shall be determined pursuant to the terms of Code Section
402(g)(3).
1.33 Eligible Nonhighly Compensated Participant shall mean, for a
Plan Year, a Participant who (i) is taken into account in performing the ADP
and ACP Tests for the Plan Year, and (ii) is not a Highly Compensated Employee.
1.34 Eligible Participant shall mean, for purposes of allocating
Qualified Nonelective Contributions for a Plan Year, an Employee (i) who is not
a Highly Compensated Employee, and (ii) who is taken into account in performing
the ADP and ACP Tests for such Plan Year.
1.35 Eligible Retirement Plan shall mean a plan which is a defined
contribution plan, the terms of which permit the acceptance of rollover
distributions and which is either (i) an individual retirement account
described in Code Section 408(a), (ii) an individual retirement annuity
described in Code Section 408(b) (other than an endowment contract), (iii) a
qualified trust described in Code Section 401(a) and exempt from tax under
Code Section 501(a), or (iv) an annuity plan described in Code Section 403(a).
In the case of a distribution to the Surviving Spouse, Eligible Retirement Plan
shall mean the Plan described in either clause (i) or (ii) hereof.
1.36 Eligible Rollover Distribution shall mean any distribution to
(i) a Participant, (ii) his Surviving Spouse (after his death), or (iii) his
Spouse or former Spouse who is his alternate payee under a qualified domestic
relations order (see Sections 9.5 and 15.1), of all or any portion of the
balance to his credit in a qualified trust (including any distribution to a
Participant of all or any portion of his Account); provided, an "Eligible
Rollover Distribution" shall not include (i) any distribution which is one of a
series of substantially equal periodic payments made, not less frequently than
annually, (A) for the life (or life expectancy) of the Participant or the joint
lives (or joint life expectancies) of the Participant and his Beneficiary, or
(B) for a specified period of 10 years or more, (ii) any distribution to the
extent such distribution is required under Code Section 401(a)(9), (iii) the
portion of any distribution that is not includible in gross income of the
distributee, (iv) as of December 1, 1999, withdrawals on account of hardship,
as described in Code Section 401(k)(2)(B)(i)(IV) and the regulations
promulgated thereunder, to the extent such withdrawals are made from Before-Tax
Contributions, and (v) distributions which total less than $200 in a Plan Year.
1.37 Employee shall mean any individual who is employed by an
Affiliate (including officers, but excluding independent contractors and
directors who are not officers or otherwise employees) and shall include leased
employees of an Affiliate within the meaning of Code Section 414(n).
Notwithstanding the foregoing, if leased employees constitute 20 percent or
less of an Affiliate's non-highly compensated work force within the meaning of
Code Section 1.24
7
<PAGE>
414(n)(5)(C)(ii), the term "Employee" shall not include those leased employees
covered by a plan described in Code Section 414(n)(5)(B). Effective March 17,
1997, the term "leased employee" shall include only persons performing services
under the primary direction and control of an Affiliate and otherwise meeting
the definition of Code Section 414(n).
1.38 Employment Date shall mean, with respect to any Employee, the
date on which he first completes an Hour of Service. Unless otherwise
determined by the Administrative Committee, if an Employee was employed by one
or more companies or enterprises acquired by or merged into, or all or a
portion of the assets or business of which are acquired by, an Affiliate, such
Employee's Employment Date shall be the date on which he first completed an
Hour of Service with such company, enterprise or business.
1.39 Entry Date shall mean the first day of every calendar quarter
during the period in which the Plan remains in effect. In addition, the
Administrative Committee may prescribe and set forth on a schedule hereto or in
its records a special Entry Date for individuals who are employed by a
predecessor employer or a new Participating Company, and who otherwise have
satisfied the requirements for eligibility.
1.40 ERISA shall mean the Employee Retirement Income Security Act
of 1974, as amended.
1.41 Forfeiture shall mean, for any Plan Year, the dollar
amount that is removed from the Account of a former Employee during such Plan
Year.
1.42 Highly Compensated Employee shall mean an Employee who is
described either in subsection (a)(l) or (2), as modified by subsections (b),
(c), (d) or (e) hereof.
(a) General Rule.
(1) An Employee who at any time during the
current Plan Year or the immediately preceding Plan Year owned [or was
considered as owning within the constructive ownership rules of Code
Section 318 as modified by Code Section 416(i)(l)(B)(iii)] more than 5
percent of the outstanding stock of a corporate Affiliate or stock
possessing more than 5 percent of the total combined voting power of
all stock of a corporate Affiliate or more than 5 percent of the
capital or profits interest in a noncorporate Affiliate; or
(2) An Employee who at any time during the
immediately preceding Plan Year:
(A) received Compensation in excess of
$85,000 (as adjusted by the Internal Revenue Service under
Code Section 414(q) [which references Code Section 415(d)]
and the regulations promulgated thereunder for cost of living
increases); and
(B) if the Controlling Company so
elects by an amendment, was within the group consisting of
the most highly compensated 20 percent of all
8
<PAGE>
Employees (determined on the basis of "Compensation" as
defined in Section 1.20(e).
(b) Excluded Employees. For purposes of subsection
(a)(2)(B) hereof, the following may be excluded when determining the most
highly compensated 20 percent of all Employees:
(1) Employees who have not completed 6 months
of service;
(2) Employees who normally work fewer than
17 1/2 hours per week;
(3) Employees who normally work not more than 6
months during any Plan Year; and
(4) Employees who have not attained age 21.
(c) Former Employees. For purposes of this Section, a
former Employee shall be treated as a Highly Compensated Employee if (i) the
former Employee was a Highly Compensated Employee at the time the Employee
separated from service with all Affiliates, or (ii) the former Employee was a
Highly Compensated Employee at any time after he attained age
55.
(d) Nonresident Aliens. For purposes of this Section,
nonresident aliens who receive no earned income from an Affiliate which
constitutes income from sources within the United States [as described in Code
Section 414(q)(8)] shall not be treated as Employees.
(e) Compliance with Code Section 414(q). Notwithstanding
the foregoing, the determination of who is a Highly Compensated Employee shall
be made in accordance with Code Section 414(q) and the regulations promulgated
thereunder.
1.43 Home Depot shall mean The Home Depot, Inc., a Delaware
corporation, and its successors.
1.44 Home Depot Board shall mean the board of directors of Home
Depot.
1.45 Hour of Service shall mean the increments of time described
in subsection (a) hereof, as modified by subsections (b), (c) and (d) hereof:
(a) General Rule.
(1) Each hour for which an Employee is paid, or
entitled to payment, for the performance of duties for an Affiliate
during the applicable computation period;
(2) Each hour for which an Employee is paid, or
entitled to payment, by an Affiliate on account of a period of time
during which no duties are performed (irrespective of whether the
employment relationship has terminated) due to vacation, holiday,
illness, incapacity (including Disability), layoff, jury duty,
military duty or Leave of Absence; provided:
9
<PAGE>
(A) No more than 501 Hours of Service
shall be credited under this subsection (2) to an Employee
for any single continuous period during which he performs no
duties as an Employee (whether or not such period occurs in a
single computation period);
(B) An hour for which an Employee is
directly or indirectly paid, or entitled to payment, on
account of a period during which he performs no duties as an
Employee shall not be credited as an Hour of Service if such
payment is made or due under a plan maintained solely to
comply with applicable workers' compensation, unemployment
compensation or disability insurance laws; and
(C) Hours of Service shall not be
credited to an Employee for a payment which solely reimburses
such Employee for medical or medically related expenses
incurred by him.
For purposes of this subsection (2), a payment shall be deemed to be
made by or due from an Affiliate regardless of whether such payment is
made by or due from an Affiliate directly, or indirectly through,
among others, a trust fund or insurer, to which the Affiliate
contributes or pays premiums and regardless of whether contributions
made or due to the trust fund, insurer or other entity are for the
benefit of particular Employees or are on behalf of a group of
Employees in the aggregate;
(3) Each hour for which back pay, irrespective
of mitigation of damages, is either awarded or agreed to by an
Affiliate; provided, the same Hours of Service shall not be credited
both under subsection (1) or subsection (2), as the case may be, and
under this subsection (3); and, provided further, crediting of Hours
of Service for back pay awarded or agreed to with respect to periods
described in subsection (2) shall be subject to the limitations set
forth in that subsection; and
(4) Each hour for which an Employee is required
to be granted leave under the Uniformed Services Employment and
Reemployment Rights Act of 1994; provided, the same Hours of Service
shall not be credited under subsections (1), (2) or (3), as the case
may be, and under this subsection (4).
(b) Equivalencies. Notwithstanding anything herein to
the contrary, in accordance with applicable regulations promulgated by the
Department of Labor, any Employees designated by the Administrative Committee
(including but not limited to Employees for whom accurate Hours of Service are
not available) shall be credited with 45 Hours of Service for each week for
which such Employee would be required to be credited with at least 1 Hour of
Service.
(c) Changes by Administrative Committee. The rate or
manner used for crediting Hours of Service may be changed at the direction of
the Administrative Committee from time to time so as to facilitate
administration and to equitably reflect the purposes of the Plan; provided, no
change shall be effective as to any Plan Year for which allocations have been
made pursuant to Article V at the time such change is made. Hours of Service
shall be credited and determined in compliance with Department of Labor
Regulation Section 2530.200b-2(b) and
10
<PAGE>
(c), 29 CFR Part 2530, as may be amended from time to time, or such other
federal regulations as may from time to time be applicable.
(d) Computation Period. For purposes of this Section, a
"computation period" shall mean the 12-month period that forms the basis for
determining an Employee's Years of Eligibility Service or Years of Vesting
Service, whichever is applicable.
1.46 Investment Committee shall mean the committee which shall
make and effect investment decisions, all as provided in Article XI.
1.47 Investment Fund or Funds shall mean one or all of the
investment funds established from time to time pursuant to the terms of Section
7.2.
1.48 Key Employee shall mean the persons described in Section
14.2(b)(2).
1.49 Leave of Absence shall mean an excused leave of absence
granted to an Employee by an Affiliate in accordance with applicable federal or
state law or the Affiliate's personnel policy. Among other things, Leave of
Absence shall be granted to an Employee under such circumstances as the
Administrative Committee shall determine are fair, reasonable and equitable, as
applied uniformly among Employees under similar circumstances.
1.50 Limitation Year shall mean the 12-month period ending on each
December 31, which shall be the "limitation year" for purposes of Code Section
415 and the regulations promulgated thereunder.
1.51 Matching Account shall mean the separate subaccount
established and maintained on behalf of a Participant or Beneficiary to reflect
his interest in the Trust Fund attributable to Matching Contributions.
1.52 Matching Contributions shall mean the amounts paid by each
Participating Company to the Trust Fund as a match on Participant's Before-Tax
Contributions.
1.53 Maternity or Paternity Leave shall mean any period during
which an Employee is absent from work as an Employee of an Affiliate (i)
because of the pregnancy of such Employee, (ii) because of the birth of a child
of such Employee, (iii) because of the placement of a child with such Employee
in connection with the adoption of such child by such Employee, or (iv) for
purposes of such Employee caring for a child immediately after the birth or
placement of such child.
1.54 Maximum Deferral Amount shall mean $10,500 (or such other
limit as is applicable for a Plan Year under Code Section 402(g)), as adjusted
by the Secretary of the Treasury under Code Section 402(g)(5) for cost of
living expenses.
1.55 Named Fiduciary shall mean the Controlling Company, the
Board, the Administrative Committee and the Investment Committee.
1.56 Non-Key Employee shall mean the persons described in Section
14.2(b)(3).
11
<PAGE>
1.57 Normal Retirement Age shall mean age 65.
1.58 Participant shall mean any person who has been admitted to,
and has not been removed from, participation in the Plan pursuant to the
provisions of Article II. "Participant" shall include an Active Participant and
a former Employee who has an Account under the Plan.
1.59 Participating Company shall mean a company that has adopted
or hereafter may adopt the Plan for the benefit of its Employees and that
continues to participate in the Plan, all as provided in Section 13.3.
1.60 Permissive Aggregation Group shall mean the group of plans
described in Section 14.2(b)(4).
1.61 Plan shall mean The Maintenance Warehouse FutureBuilder as
contained herein and all amendments hereto. The Plan is intended to be a profit
sharing plan qualified under Code Sections 401 (a) and 401(k).
1.62 Plan Year shall mean the 12-month period ending on each
December 31.
1.63 Prior Plan shall mean a qualified retirement plan from which
the Plan accepts Transfer Contributions.
1.64 Qualified Nonelective Account shall mean the separate
subaccount established and maintained on behalf of a Participant or Beneficiary
to reflect his interest in the Trust Fund attributable to Qualified Nonelective
Contributions.
1.65 Qualified Nonelective Contributions shall mean the qualified
nonelective contributions paid to the Trust Fund by each Participating Company
pursuant to the terms of Section 3.3.
1.66 Qualified Spousal Waiver shall mean a written election
executed by a Spouse, delivered to the Administrative Committee and witnessed
by a notary public or a Plan representative, which consents to the payment of
all or a specified portion of a Participant's death benefit to a Beneficiary
other than such Spouse and which acknowledges that such Spouse has waived his
right to be the Participant's Beneficiary under the Plan. A Qualified Spousal
Waiver shall be valid only with respect to the Spouse who signs it and shall
apply only to the alternative Beneficiary designated therein, unless the
written election expressly permits other designations without further consent
of the Spouse. A Qualified Spousal Waiver shall be irrevocable unless revoked
by the Participant by way of (i) a written statement delivered to the
Administrative Committee or (ii) a written revocation of the non-Spouse
Beneficiary designation to which such Spouse has consented; provided, any such
revocation must be received by the Administrative Committee prior to the
Participant's date of death.
1.67 Required Aggregation Group shall mean the group of plans
described in Section 14.2(b)(5).
1.68 Restoration Contributions means the amounts paid to the Trust
Fund on behalf of a rehired individual pursuant to Section 3.7.
12
<PAGE>
1.69 Rollover Account shall mean the separate subaccount
established and maintained on behalf of a Covered Employee, Participant or
Beneficiary to reflect his interest in the Trust Fund attributable to Rollover
Contributions.
1.70 Rollover Contribution shall mean an amount contributed to the
Trust Fund (and received and accepted by the Trustee) which constitutes an
"eligible rollover contribution" as defined in Code Section 402(f)(2)(A). An
amount shall be treated as a Rollover Contribution only to the extent that its
acceptance by the Trustee is permitted under the Code (including the
regulations and rulings promulgated thereunder).
1.71 Spouse or Surviving Spouse shall mean, with respect to a
Participant, the person who is treated as married to such Participant under the
laws of the state in which the Participant resides. The determination of a
Participant's Spouse or Surviving Spouse shall be made as of the earlier of the
date as of which benefit payments from the Plan to such Participant are made or
commence (as applicable) or the date of such Participant's death. In addition,
a Participant's former Spouse shall be treated as his Spouse or Surviving
Spouse to the extent provided under a qualified domestic relations order, as
defined in Code Section 414(p).
1.72 Supplemental Annual Matching Contributions shall mean the
amounts paid by each Participating Company to the Trust Fund as a supplemental
annual matching contribution to Participants' Before-Tax Contributions as
provided in Section 3.2(b).
1.73 Top-Heavy Group shall mean the group of plans described in
Section 14.2(b)(6).
1.74 Top-Heavy Plan shall mean a plan to which the conditions set
forth in Article XIV apply.
1.75 Transfer Account shall mean one or more separate subaccounts
established and maintained on behalf of a Participant or Beneficiary to reflect
his interest in the Trust Fund attributable to Transfer Contributions;
provided, to the extent that the Administrative Committee (in conjunction with
the Plan's recordkeeper) deems appropriate, other subaccounts may be used to
reflect Participant's interests attributable to Transfer Contributions.
"Transfer Account" shall refer to the aggregate of all separate subaccounts
established for Transfer Contributions or to individual, separate subaccounts
appropriately described, as may be appropriate in context. Transfer Accounts
shall be reflected and described on a schedule hereto.
1.76 Transfer Contributions shall mean amounts which are received
either (i) by a direct trustee-to-trustee transfer or (ii) as part of a
spin-off, merger or other similar event by the Trustee from the trustee or
custodian of the Prior Plan and held in the Trust Fund on behalf of a
Participant or Beneficiary. Transfer Contributions shall retain the character
that those contributions had under the Prior Plan; for example, after-tax
contributions under the Prior Plan shall continue to be treated as after-tax
contributions when held in the Transfer Account.
1.77 Trust or Trust Agreement shall mean each agreement entered
into between the Controlling Company and a Trustee governing the creation of a
Trust Fund, and all amendments thereto. If more than one Trust Fund is used to
hold Plan assets, there shall be a separate and distinct Trust and Trust
Agreement for each such Trust Fund. To the extent indicated by the
13
<PAGE>
context, "Trust" or "Trust Agreement" may refer collectively to all Trusts and
Trust Agreements creating Trust Funds.
1.78 Trustee shall mean the party or parties so designated from
time to time pursuant to a Trust Agreement. If more than one Trust Fund is used
to hold Plan assets, there may be a separate and distinct Trustee for each such
Trust Fund. To the extent indicated by the context, "Trustee" may refer to all
of the Trustees or Trustee groups for the Trust Funds.
1.79 Trust Fund shall mean the total amount of cash and other
property held by a Trustee (or any nominee thereof) at any time under a Trust
Agreement. To the extent indicated by context, "Trust Fund" may refer to all of
the Trust Funds under the Plan.
1.80 Valuation Date shall mean each day the New York Stock
Exchange is open for trading. The value of an Account or the Trust Fund on any
other date shall be the value determined as of the immediately preceding date
on which the New York Stock Exchange was open for trading.
1.81 Year of Eligibility Service shall mean a 12-consecutive month
period during which an Employee completes no less than 1,000 Hours of Service,
subject to subsections (a), (b), (c) and (d) below:
(a) Computation Period. For purposes of determining
whether an Employee has completed a Year of Eligibility Service, the
computation period initially shall be the 12-consecutive-month period beginning
on the Employee's Employment Date and thereafter shall be each Plan Year,
beginning with the Plan Year that includes the first anniversary of the
Employee's Employment Date.
(b) Predecessor Employer. Unless otherwise determined by
the Administrative Committee and not otherwise counted hereunder, an Employee's
periods of employment with one or more companies or enterprises (i) acquired in
whole or in party by, (ii) merged into, or (iii) all or a portion of the assets
or business of which are acquired by, an Affiliate shall be taken into account
in determining whether he has completed a Year of Eligibility Service.
(c) Service Counted under The Home Depot FutureBuilder.
For the purpose of determining a Year of Eligibility Service, any service
credited for eligibility purposes under The Home Depot FutureBuilder shall be
included in the determination of whether an Employee has completed a Year of
Eligibility Service.
(d) Reemployed Veterans. Notwithstanding any provision
to the contrary, periods of qualified military service shall be taken into
account in determining whether an Employee has completed a Year of Eligibility
Service in accordance with the requirements of Code Section 414(u).
1.82 Years of Vesting Service shall mean, with respect to an
Employee, and subject to the terms of subsections (a), (b), (c), (d), (e) and
(f) hereof, the number of Plan Years during which the Employee completes at
least 1,000 Hours of Service:
14
<PAGE>
(a) Pre-Break Service. If a Participant incurs a Break
in Service, the Participant shall not be credited with Years of Vesting Service
completed prior to such Break in Service unless and until such Participant has
completed a Year of Vesting Service following his reemployment. In addition,
Years of Vesting Service completed prior to a period in which the Participant
incurred 5 or more consecutive Breaks in Service shall be disregarded under the
Plan if the Participant had no vested interest in his Account attributable to
employer contributions at the time the first Break in Service commenced.
(b) Post-Break Service. Years of Vesting Service
completed after a period in which the Participant had at least 5 consecutive
Breaks in Service shall be disregarded for the purpose of determining his
vested interest in that portion of his Account which accrued before such Breaks
in Service.
(c) Predecessor Plan. To the extent required by Code
Section 414(a)(l) and not otherwise counted hereunder, if an Affiliate
maintains a plan that is or was the qualified retirement plan of a predecessor
employer, an Employee's periods of employment with such predecessor employer
shall be taken into account in determining his Years of Vesting Service.
(d) Predecessor Employer. Unless otherwise determined by
the Administrative Committee and not otherwise counted hereunder, an Employee's
periods of employment with one or more companies or enterprises acquired by or
merged into, or all or a portion of the assets or business of which are
acquired by, an Affiliate shall be taken into account in determining his Years
of Vesting Service.
(e) Service Counted under The Home Depot FutureBuilder.
Any service credited for vesting purposes under The Home Depot FutureBuilder
shall be included in the determination of an Employee's Years of Vesting
Service.
(f) Reemployed Veterans. Notwithstanding any provision to
the contrary, periods of qualified military service shall be taken into account
in determining an Employee's Years of Vesting Service in accordance with the
requirements of Code Section 414(u).
15
<PAGE>
ARTICLE II
ELIGIBILITY
2.1 Initial Eligibility Requirements.
(a) General Rule. Except as provided in subsections (b),
(c) or (d) hereof, every Covered Employee shall become an Active Participant on
the Entry Date coincident with or next following the date on which he first
completes 1 Year of Eligibility Service, provided that he is a Covered Employee
on such Entry Date.
(b) Participation Upon Effective Date. Each Covered
Employee who is an Active Participant in the Plan on the day immediately
preceding the Effective Date shall continue as an Active Participant in the
Plan in accordance with the terms of the Plan.
(c) New Participating Companies. For Employees of
companies that become Participating Companies after the Effective Date, each
Covered Employee employed by a Participating Company on the date such
Participating Company first becomes a Participating Company shall become an
Active Participant as of such Participating Company's effective date under the
Plan, if, as of the Participating Company's effective date, the Covered
Employee has met the eligibility requirements set forth in this Section 2.1.
(d) Predecessor Employer. The Administrative Committee
may prescribe and set forth on a schedule hereto or in its records special
eligibility rules for individuals who are employed by a predecessor employer
acquired by or merged into, or all or a portion of the assets or business of
which are acquired by, an Affiliate.
2.2 Treatment of Interruptions of Service.
(a) Leave of Absence or Layoff. If a Covered Employee
satisfies the eligibility requirements set forth in Section 2.1 but is on a
Leave of Absence or layoff on the Entry Date on which he otherwise would have
become an Active Participant, he shall become an Active Participant on the date
he subsequently resumes the performance of duties as a Covered Employee in
accordance with the terms of his Leave of Absence or layoff.
(b) Termination Before Participation. If a Covered
Employee satisfies the eligibility requirements set forth in Section 2.1,
terminates employment with a Participating Company (and all other Participating
Companies) before the Entry Date on which he otherwise would become an Active
Participant, and then is reemployed by a Participating Company, he shall become
an Active Participant as of the later of (i) the Entry Date on which he
otherwise would have become an Active Participant if he had not terminated
employment or (ii) the Entry Date coinciding with or immediately preceding the
date he is reemployed as a Covered Employee.
(c) Termination After Participation. If an Active
Participant terminates employment with a Participating Company (and all other
Participating Companies), his active participation in the Plan shall cease
immediately, and he again shall become an Active Participant as of the day he
again becomes a Covered Employee. However, regardless of
16
<PAGE>
whether he again becomes an Active Participant, he shall continue to be a
Participant until he no longer has an Account under the Plan.
2.3 Change in Status.
(a) Exclusion Before Participation. If a Covered
Employee (i) satisfies the eligibility requirements set forth in Section 2.1,
(ii) changes his employment status (but remains employed) so that he ceases to
be a Covered Employee before the Entry Date on which he otherwise would become
an Active Participant, and (iii) then again changes his employment status and
becomes a Covered Employee, he shall become an Active Participant as of the
later of (A) the date that would have been his Entry Date, or (B) the date he
again becomes a Covered Employee.
(b) Exclusion After Participation. If an Active
Participant changes his status of employment (but remains employed) so that he
is no longer a Covered Employee, his active participation in the Plan shall
cease immediately, and he shall again become an Active Participant in the Plan
as of the day he again becomes a Covered Employee. However, regardless of
whether he again becomes an Active Participant, he shall continue to be a
Participant until he no longer has an Account under the Plan.
(c) Change to Covered Employee Status. If an Employee
who first satisfies the eligibility requirements of Section 2.1 while he is not
a Covered Employee subsequently changes his employment status so that he
becomes a Covered Employee, he shall become an Active Participant as of the
later of (i) the date that would have been his Entry Date, or (ii) the date of
his change in status.
17
<PAGE>
ARTICLE III
CONTRIBUTIONS
3.1 Before-Tax Contributions.
(a) Generally. Each Participating Company shall
contribute to the Plan, on behalf of each Active Participant employed by such
Participating Company and for each regular payroll period, a Before-Tax
Contribution in an amount equal to the amount by which such Active
Participant's Compensation has been reduced for such period pursuant to his
Deferral Election. The amount of the Before-Tax Contribution shall be
determined in increments of 1 percent of such Active Participant's Compensation
for each payroll period. The Active Participant may elect to reduce his
Compensation for any period by a minimum of 1 percent and a maximum of 15
percent (or such other minimum or maximum percentages and/or amounts
established by the Administrative Committee from time to time), subject to the
limitations in Article VI.
(b) Deferral Elections. Each Active Participant who
desires that his Participating Company make a Before-Tax Contribution on his
behalf shall make a Deferral Election on a form provided by the Administrative
Committee, through an interactive telephone or internet-based system, or in
such other manner as the Administrative Committee may prescribe. Such Deferral
Election shall provide for the reduction of his Compensation from each payment
of eligible Compensation made while he is an Active Participant. The
Administrative Committee, in its sole discretion, may prescribe such
nondiscriminatory terms and conditions governing Deferral Elections as it deems
appropriate. Subject to any modifications, additions or exceptions which the
Administrative Committee, in its sole discretion, deems necessary, appropriate
or helpful, the following terms shall apply to Deferral Elections:
(1) Effective Date. An Active Participant's
initial Deferral Election shall be effective for the first paycheck
payable on or after an Entry Date. If an Active Participant fails to
submit a Deferral Election in a timely manner, he shall be deemed to
have elected a deferral of zero percent.
(2) Term. Each Active Participant's Deferral
Election shall remain in effect in accordance with its original terms
until the earlier of (A) the date the Active Participant ceases to be
a Covered Employee of all Participating Companies, (B) the date the
Active Participant revokes such Deferral Election pursuant to the
terms of subsection (b)(3) hereof, or (C) the date the Active
Participant or the Administrative Committee modifies such Deferral
Election pursuant to the terms of subsections (b)(4) or (b)(5) hereof.
If the final payment of Compensation to an Active Participant is not
made through the Participating Company's regular payroll process, the
Active Participant's Deferral Election shall not apply to such
payment. If a Participant is transferred from the employment of a
Participating Company to the employment of another Participating
Company, his Deferral Election with the first Participating Company
will remain in effect and will apply to his Compensation from the
second Participating Company until the earlier of (A), (B) or (C) of
the preceding sentence.
18
<PAGE>
(3) Revocation. An Active Participant's
Deferral Election shall terminate upon his ceasing to be a Covered
Employee. In addition, an Active Participant may revoke his Deferral
Election with a Participating Company in the manner prescribed by the
Administrative Committee, and such revocation shall be effective as
soon as administratively practicable after being submitted in
accordance with procedures established for the Plan. An Active
Participant who revokes a Deferral Election may enter into a new
Deferral Election in the manner prescribed by the Administrative
Committee, effective as soon as administratively practicable after
being submitted in accordance with procedures established under the
Plan; provided, the Administrative Committee, in its sole discretion,
may specify a suspension period for all Participants who voluntarily
revoke their Deferral Elections, such that any new Deferral Election
shall not be effective until a later date.
(4) Modification by Participant. Effective as
soon as administratively practicable after being submitted in
accordance with procedures established under the Plan, an Active
Participant may modify his existing Deferral Election to increase or
decrease the percentage of his Before-Tax Contribution by making a new
Deferral Election in the manner prescribed by the Administrative
Committee.
(5) Modification by Administrative Committee.
Notwithstanding anything herein to the contrary, the Administrative
Committee may modify any Deferral Election of any Active Participant
at any time by decreasing the percentage of any Before-Tax
Contributions to any extent the Administrative Committee believes
necessary to comply with the limitations described in Article VI.
3.2 Matching Contributions.
(a) Basic Matching Contributions. For each Active
Participant on whose behalf a Participating Company has made any Before-Tax
Contributions, such Participating Company shall make, with respect to such
payroll period or other payment of Compensation, a Basic Matching Contribution
to the Plan equal to:
(1) 150 percent of the amount of such
Before-Tax Contributions to the extent such Before-Tax Contributions
do not exceed 2 percent of a Participant's Compensation for a payroll
period (that is, such Matching Contributions shall not exceed 3
percent of the Active Participant's Compensation for such payroll
period); and
(2) 100 percent of the amount of such
Before-Tax Contributions to the extent such Before-Tax Contributions
exceed 2 percent but do not exceed 5 percent of a Participant's
Compensation for such payroll period; (that is, the aggregate Matching
Contributions made under subsection (a)(l) and this subsection (a)(2)
shall not exceed 3 percent of the Active Participant's Compensation
for such payroll period).
(b) Supplemental Annual Matching Contributions.
(1) General. For each Plan Year commencing on
or after January 1, 2000, for each Active Participant who satisfies
all of the conditions set forth in subsection (b)(2) hereof for all
periods through the last day of such Plan Year, such
19
<PAGE>
Participating Company shall make a Supplemental Annual Matching
Contribution equal to 4.5 percent of such Active Participant's
Compensation for such Plan Year; provided, the Supplemental Annual
Matching Contribution made with respect to any Active Participant who
is a Highly Compensated Employee for such Plan Year shall equal 4
percent of such Active Participant's Compensation for such Plan Year.
(2) Conditions for Eligibility. In order to be
eligible for a Supplemental Annual Matching Contribution under this
subsection (b) for a Plan Year, the Active Participant must meet the
following eligibility conditions:
(A) The individual must have been
employed by the Controlling Company on July 1, 1999;
(B) Commencing on or before the later
of December 31, 1999, or the individual's Entry Date into the
Plan, the individual (i) must have enrolled in the Plan, and
(ii) must have in effect at all times while he is employed by
the Controlling Company (to the extent permitted by the
maximum limits under the Plan) a Deferral Election pursuant
to which he has elected to contribute at least 3 percent of
his Compensation as a Before-Tax Contribution to the Plan;
and
(C) The individual must be in the
active employ of the Controlling Company or an Affiliate on
the last day of such Plan Year.
In the event a Participant fails to satisfy any of these conditions with
respect to a Plan Year, such Participant shall not be eligible to receive a
Supplemental Annual Matching Contribution for such Plan Year and shall
permanently forfeit the right to receive Supplemental Annual Matching
Contributions under this subsection (b) in all future Plan Years.
(3) Limitations on Supplemental Annual Matching
Contributions Made on Behalf of Highly Compensated Employees.
Notwithstanding the foregoing, to the extent (if any) necessary to
satisfy the nondiscrimination requirements of Code Section 401(a)(4)
with respect to a Plan Year, the number of Highly Compensated
Employees who are otherwise eligible to receive a Supplemental Annual
Matching Contribution pursuant to this subsection (b) shall be reduced
to the number of Highly Compensated Employees that the Administrative
Committee determines is necessary to satisfy the requirements of Code
Section 401(a)(4). Such limitation on the number of Highly Compensated
Employees eligible to receive a Supplemental Annual Matching
Contribution for such Plan Year shall be made beginning with the
Highly Compensated Employee(s) with the highest dollar amount of
Compensation for such Plan Year. Those Highly Compensated Employee(s)
with the highest dollar amount of Compensation who are affected by
this reduction shall not be eligible for a Supplemental Annual
Matching Contribution for such Plan Year.
3.3 Qualified Nonelective Contributions.
To the extent and in such amounts as the Administrative
Committee, in its sole discretion, deems desirable or helpful as a method to
help satisfy the ADP and/or ACP Tests for
20
<PAGE>
any Plan Year and subject to the requirements and limitations set forth in
Article VI of the Plan, each Participating Company shall make a Qualified
Nonelective Contribution for a Plan Year.
3.4 Form of Contributions.
All Contributions shall be paid to the Trustee in the form of
cash or shares of Company Stock, as determined by the Board.
3.5 Timing of Contributions.
(a) Before-Tax Contributions. Each Participating Company
that withholds Before-Tax Contributions from an Active Participant's paycheck
pursuant to a Deferral Election shall make best efforts to pay such Before-Tax
Contributions to the Trustee as of the earliest date on which such
Contributions can reasonably be segregated from the Participating Company's
general assets (generally not to exceed 15 business days after the end of the
month within which such amounts otherwise would have been payable to such
Active Participant in cash) or such earlier time as may be required by law.
(b) Matching and Qualified Nonelective Contributions.
Each Participating Company shall make best efforts to pay its Matching and
Qualified Nonelective Contributions to the Trustee (i) on or before the date
for filing its federal income tax return (including extensions thereof) for the
tax year to which such Matching and Qualified Nonelective Contributions relate,
or (ii) on or before such other date as shall be within the time allowed to
permit the Participating Company to properly deduct, for federal income tax
purposes and for the tax year of the Participating Company in which the
obligation to make such Contributions was incurred, the full amount of such
Matching and Qualified Nonelective Contributions; provided, in the event the
amount of Qualified Nonelective Contributions cannot be calculated by the
latest date described hereinabove, such Qualified Nonelective Contributions may
be made at a later date (subject to the limitations under Code Section 415)
which is on or before the last day of the Plan Year following the Plan Year to
which such Qualified Nonelective Contributions relate.
3.6 Contingent Nature of Company Contributions.
Notwithstanding any other provision of this Article III and
subject to the terms of Section 15.11, Contributions made to the Plan by a
Participating Company are made expressly contingent upon the deductibility
thereof for federal income tax purposes for the taxable year of the
Participating Company with respect to which such Contributions are made.
3.7 Restoration Contributions.
(a) Restoration of Forfeitures. If a Participant has
forfeited his nonvested Accounts in accordance with Section 8.3 and such
Participant subsequently is rehired as a Covered Employee prior to the
occurrence of 5 consecutive Breaks in Service, his Accounts shall be credited
with all of the benefits (unadjusted for gains or losses) which were forfeited,
as determined pursuant to the terms of Section 8.4.
(b) Restoration Contribution. The assets necessary to
fund the Account of the rehired individual shall be provided no later than as
of the end of the Plan Year following the
21
<PAGE>
Plan Year in which the individual is rehired and shall be provided in the
discretion of the Administrative Committee from (i) income or gain to the Trust
Fund, (ii) Forfeitures arising from the Accounts of Participants employed or
formerly employed by the Participating Companies, or (iii) Contributions by the
Participating Companies.
3.8 Reemployed Veterans.
Notwithstanding any provision in this Plan to the contrary,
contributions and benefits with respect to qualified military service shall be
provided in accordance with Code Section 414(u).
22
<PAGE>
ARTICLE IV
ROLLOVERS AND TRANSFERS BETWEEN PLANS
4.1 Rollover Contributions.
(a) Request by Active Participant. An Active Participant
may make a written request (in writing or in such other format as permitted by
the Administrative Committee) to the Administrative Committee that he be
permitted to contribute, or cause to be contributed, to the Trust Fund a
Rollover Contribution which is received by such Active Participant or to which
such Active Participant is entitled. Such written request shall contain
information concerning the type of property constituting the Rollover
Contribution and a statement, satisfactory to the Administrative Committee,
that the property constitutes a Rollover Contribution.
(b) Acceptance of Rollover. Subject to the terms of the
Plan and the Code (including regulations and rulings promulgated thereunder),
the Administrative Committee, in its sole discretion, shall determine whether
(and if so, under what conditions and in what form) a Rollover Contribution
shall be accepted at any time by the Trustee. For example, the Administrative
Committee, in its sole discretion, may decide to allow Rollover Contributions
from Participants and/or direct Rollover Contributions from another qualified
retirement plan [as described in Code Section 401(a)(31)] and may decide to
pass through to the Active Participant making the Rollover Contribution any
recordkeeping fees directly attributable to his Rollover Contribution. In the
event the Administrative Committee permits an Active Participant to make a
Rollover Contribution, the amount of the Rollover Contribution shall be
transferred to the Trustee and allocated as soon as practicable thereafter to a
Rollover Account for the Active Participant. Unless the Administrative
Committee permits otherwise, all Rollover Contributions shall be made in cash.
4.2 Transfer Contributions.
(a) Direct Transfers Permitted. The Administrative
Committee, in its sole discretion, shall permit direct trustee-to-trustee
transfers of assets and liabilities to the Plan [which shall be distinguished
from direct Rollover Contributions as described in Code Section 401(a)(31)] as
a Transfer Contribution on behalf of an Active Participant.
(b) Mergers and Spin-offs Permitted. The Administrative
Committee, in its sole discretion, shall permit other qualified retirement
plans to transfer assets and liabilities to the Plan as part of a merger,
spin-off or similar transaction. Any such transfer shall be made in accordance
with the terms of the Code and subject to such rules and requirements, as the
Administrative Committee may deem appropriate. Without limitation, the
Administrative Committee shall determine the schedule under which such Transfer
Contributions shall vest. Notwithstanding anything herein to the contrary, in
no event shall a Transfer Contribution be accepted if the transferring plan is
subject to the requirements of providing any alternative form of benefit not
permitted under the Plan unless approved by the Administrative Committee.
(c) Establishment of Transfer Accounts. As soon as
practicable after the date the Trustee receives a Transfer Contribution, there
shall be credited to one or more Transfer Accounts of each Participant the
total amount received from the respective accounts of such
23
<PAGE>
Participant in the transferring qualified retirement plan. Any amounts so
credited as a result of any such merger or spin-off or other transfer shall be
subject to all of the terms and conditions of the Plan from and after the date
of such transfer.
(d) Transfer Accounts. The rules and terms applicable to
Transfer Contributions and resulting Transfer Accounts shall be reflected on a
schedule hereto.
4.3 Spin-offs to Other Plans.
The Administrative Committee, in its sole discretion, may
cause the Plan to transfer to another qualified retirement plan (as part of a
spin-off, change in control or similar transaction) all or part of the assets
and liabilities maintained under the Plan. Any such transfer shall be made in
accordance with the terms of the Code and subject to such rules and
requirements, as the Administrative Committee may deem appropriate. Upon the
effectiveness of any such transfer, the Plan and Trust shall have no further
responsibility or liability with respect to the transferred assets and
liabilities.
24
<PAGE>
ARTICLE V
PARTICIPANTS' ACCOUNTS: CREDITING AND ALLOCATIONS
5.1 Establishment of Participants' Accounts.
To the extent appropriate, the Administrative Committee shall
establish and maintain, on behalf of each Participant and Beneficiary, an
Account which shall be divided into segregated subaccounts. The subaccounts
shall include (to the extent applicable) Before-Tax, Matching, Qualified
Nonelective, Rollover and Transfer Accounts and such other subaccounts as the
Administrative Committee shall deem appropriate or helpful. Each Account shall
be credited with Contributions allocated to such Account and generally shall be
credited with income on investments derived from the assets of such Accounts.
Notwithstanding anything herein to the contrary, while Contributions may be
allocated to a Participant's Account as of a particular date (as specified in
the Plan), such Contributions shall actually be added to a Participant's
Account and shall be credited with investment experience only from the date
such Contributions are received and credited to the Participant's Account by
the Trustee. Each Account of a Participant or Beneficiary shall be maintained
until the value thereof has been distributed to or on behalf of such
Participant or Beneficiary.
5.2 Allocation and Crediting of Before-Tax, Basic Matching,
Rollover and Transfer Contributions.
As of each Valuation Date coinciding with or occurring as
soon as practicable after the date on which Before-Tax, Basic Matching,
Rollover and Transfer Contributions are received on behalf of an Active
Participant, such Contributions shall be allocated and credited directly to the
appropriate Before-Tax Account, Basic Matching Account, Rollover Account and
Transfer Accounts, respectively, of such Active Participant.
5.3 Allocation and Crediting of Supplemental Annual Matching
Contributions.
As of the last day of each Plan Year for which Participating
Companies make (or are deemed to have made) Supplemental Annual Matching
Contributions, each Participant who satisfies the eligibility requirements of
Section 3.2(b)(2) for such Plan Year shall have allocated and credited to his
Matching Account a portion of such Supplemental Annual Matching Contributions.
5.4 Allocation and Crediting of Qualified Nonelective
Contributions.
(a) General Provision. As of the last day of each Plan
Year for which the Participating Companies make (or are deemed to have made)
Qualified Nonelective Contributions, each Eligible Nonhighly Compensated
Participant who is eligible to receive an allocation of Qualified Nonelective
Contributions for such Plan Year (pursuant to the terms of subsection (b), (c),
(d) or (e) hereof, whichever is applicable) shall have allocated and credited
to his Qualified Nonelective Account a portion of the Qualified Nonelective
Contributions made for such Plan Year by the Participating Companies. The
Administrative Committee shall cause a portion of such Qualified Nonelective
Contributions to be allocated to the Qualified Nonelective Account of each such
Participant in accordance with the terms of subsection (b), (c), (d) or (e)
hereof, whichever is applicable.
25
<PAGE>
(b) Per Capita Qualified Nonelective Contributions. To
the extent that the Administrative Committee designates all or any portion of
the Qualified Nonelective Contributions for a Plan Year as "Per Capita
Qualified Nonelective Contributions," such Contributions shall be allocated to
the Qualified Nonelective Accounts of all Eligible Nonhighly Compensated
Participants who were in the active employ of an Affiliate on the last day of
the Plan Year, on a per capita basis (that is, the same dollar amount shall be
allocated to the Qualified Nonelective Account of each Eligible Nonhighly
Compensated Participant).
(c) Proportional Qualified Nonelective Contributions. To
the extent that the Administrative Committee designates all or any portion of
the Qualified Nonelective Contributions for a Plan Year as "Proportional
Qualified Nonelective Contributions," such Contributions shall be allocated to
the Qualified Nonelective Account of each Eligible Nonhighly Compensated
Participant who was in the active employ of an Affiliate on the last day of the
Plan Year, in the same proportion that (i) the Compensation of such Eligible
Nonhighly Compensated Participant for such Plan Year bears to (ii) the total
Compensation of all such Eligible Nonhighly Compensated Participants for such
Plan Year.
(d) Section 415 Qualified Nonelective Contributions. To
the extent that the Administrative Committee designates all or any portion of
the Qualified Nonelective Contributions for a Plan Year as "Section 415
Qualified Nonelective Contributions," such Contributions shall be allocated to
the Qualified Nonelective Account of some or all Eligible Nonhighly Compensated
Participants, (A) beginning with such Eligible Nonhighly Compensated
Participant(s) who have the lowest Compensation [within the meaning of "Testing
Compensation" as described in Section 1.20(f)] until such Eligible Nonhighly
Compensated Participant(s) reach their annual addition limits (as described in
Section 6.7) or the amount of the Qualified Nonelective Contributions is fully
allocated, and then (B) continuing with successive individuals or groups of
such Eligible Nonhighly Compensated Participants in the same manner until the
amount of the Section 415 Qualified Nonelective Contributions is fully
allocated.
(e) Qualified Nonelective Matching Contributions. To the
extent that the Administrative Committee designates all or any portion of the
Qualified Nonelective Contributions for a Plan Year as "Qualified Nonelective
Matching Contributions," such contributions shall be allocated to the Qualified
Nonelective Account of each Eligible Nonhighly Compensated Participant who was
in the active employ of an Affiliate on the last day of the Plan Year, in the
same proportion that (i) such Eligible Nonhighly Compensated Participant's Plan
Year Before-Tax Contributions that do not exceed the maximum amount of
Before-Tax Contributions taken into account in determining Matching
Contributions for such Plan Year bears to (ii) the total of all such Eligible
Nonhighly Compensated Participants' Plan Year Before-Tax Contributions
(calculated by taking into account for such Eligible Nonhighly Compensated
Participant only the maximum amount of Before-Tax Contributions taken into
account in determining Matching Contributions for such Plan Year).
5.5 Crediting of Restoration Contributions.
As of the Valuation Date coinciding with or immediately
following the date on which the Plan restores the forfeitable portion of a
Participant's Account pursuant to Section 3.7, such amount shall be credited
to the appropriate Matching and Transfer Accounts of the
26
<PAGE>
Participant, in the amounts forfeited from such Accounts upon the earlier
distribution to such Participant.
5.6 Adjustments to Accounts.
As of each Valuation Date, the Trustee shall determine the
fair market value of the Trust Fund which shall be the sum of the fair market
values of the Investment Funds, as determined by the institutions maintaining
the Investment Funds. Each Participant's or Beneficiary's Account shall be
allocated and credited with a portion of such earnings or debited with a
portion of such losses in each Investment Fund, in the proportion that the
amount credited to such Account is invested in each Investment Fund. Each
Account shall also be appropriately adjusted to reflect any contributions,
distributions, withdrawals or transfers between Investment Funds and other
disbursements from such Account.
5.7 Allocation of Adjustments Upon Change in Capitalization.
If the outstanding shares of Company Stock held in the Plan
increase or decrease by reason of a recapitalization, reclassification, stock
split, combination of shares or dividend payable in shares of Company Stock,
such increase or decrease shall be allocated to each Account as of the date on
which the event requiring such adjustments occurs, in the same manner as the
share to which it is attributable is then allocated.
5.8 Allocation of Forfeitures.
To the extent Forfeitures for a Plan Year are not used to pay
plan expenses as provided in Section 15.12, Restoration Contributions pursuant
to Section 3.7 or to replace abandoned Accounts as provided in Section 9.9, the
Administrative Committee, in its sole discretion, may use such Forfeitures to
pay the reasonable administrative expenses of the Plan or may deem such
Forfeitures to Matching, Supplemental or ESOP Contributions (that shall first
be used to reduce the Participating Companies' obligation, if any, to make such
Contributions pursuant to the terms of the Plan and then shall be added to, and
combined with, any such other Contributions made for such Plan year by the
Participating Companies).
5.9 Notice to Participants of Account Balances.
At least once for each Plan Year, the Administrative
Committee shall cause a written statement of a Participant's or Beneficiary's
Account balance to be distributed to the Participant or Beneficiary.
5.10 Good Faith Valuation Binding.
In determining the value of the Trust Fund and the Accounts,
the Trustee and the Administrative Committee shall exercise their best
judgment, and all such determinations of value (in the absence of bad faith)
shall be binding upon all Participants and Beneficiaries.
27
<PAGE>
5.11 Errors and Omissions in Accounts.
If an error or omission is discovered in the Account of a
Participant or Beneficiary, the Administrative Committee shall cause
appropriate, equitable adjustments to be made to such Account as of the
Valuation Date coinciding with or immediately following the discovery of such
error or omission.
28
<PAGE>
ARTICLE VI
CONTRIBUTION AND SECTION 415 LIMITATIONS
AND NONDISCRIMINATION REQUIREMENTS
6.1 Deducibility Limitations.
In no event shall the total Contribution amount for any
taxable year of a Participating Company exceed that amount which is properly
deductible for federal income tax purposes under the then appropriate
provisions of the Code. For purposes of this Section, a Contribution may be
deemed made by a Participating Company for a taxable year if it is paid to the
Trustee on or before the date of filing the Participating Company's federal
income tax return (including extensions thereof) for that year or on or before
such other date as shall be within the time allowed to permit proper deduction
by the Participating Company of the amount so contributed for federal income
tax purposes for the year in which the obligation to make such Contribution was
incurred.
6.2 Maximum Limitation on Elective Deferrals.
(a) Maximum Elective Deferrals Under Participating
Company Plans. The aggregate amount of a Participant's Elective Deferrals made
for any calendar year under the Plan and any other plans, contracts or
arrangements with the Participating Companies shall not exceed the Maximum
Deferral Amount.
(b) Return of Excess Before-Tax Contributions. If the
aggregate amount of a Participant's Before-Tax Contributions made for any
calendar year by itself exceeds the Maximum Deferral Amount, the Participant
shall be deemed to have notified the Administrative Committee of such excess,
and the Administrative Committee shall cause the Trustee to distribute to such
Participant, on or before April 15 of the next succeeding calendar year, the
total of (i) the amount by which such Before-Tax Contributions exceed the
Maximum Deferral Amount, plus (ii) any earnings allocable thereto (including,
in the Administrative Committee's discretion, any gap income). In addition,
Matching Contributions made on behalf of the Participant which are attributable
to the distributed Before-Tax Contributions shall be forfeited.
(c) Return of Excess Elective Deferrals Provided by
Other Participating Company Arrangements. If after the reduction described in
subsection (b) hereof, a Participant's aggregate Elective Deferrals under
plans, contracts and arrangements with the Controlling Company and all
Affiliates still exceed the Maximum Deferral Amount, then, the Participant
shall be deemed to have notified the Administrative Committee of such excess,
and, unless the Administrative Committee directs otherwise, such excess shall
be reduced by distributing to the Participant Elective Deferrals that were made
for the calendar year under such plans, contracts and/or arrangements with the
Controlling Company and all Affiliates other than the Plan. However, if the
Administrative Committee decides to make any such distributions from Before-
Tax Contributions made to the Plan, such distributions (including forfeiture of
Matching Contributions) shall be made in a manner similar to that described in
subsection (b) hereof.
(d) Discretionary Return of Elective Deferrals. If after
the reductions described in subsections (b) and (c) hereof, (i) a Participant's
aggregate Elective Deferrals made
29
<PAGE>
for any calendar year under the Plan and any other plans, contracts or
arrangements with Participating Companies and any other employers still exceed
the Maximum Deferral Amount, and (ii) such Participant submits to the
Administrative Committee, on or before the March 1 following the end of such
calendar year, a written request that the Administrative Committee distribute
to such Participant all or a portion of his remaining Before-Tax Contributions
made for such calendar year, and any earnings attributable thereto (including
in the Administrative Committee's discretion, any gap income), then the
Administrative Committee may, but shall not be required to, cause the Trustee
to distribute such amount to such Participant on or before the April 15
following the end of the year in which the Maximum Deferral Amount was
exceeded. However, if the Administrative Committee decides to make any such
distributions from Before-Tax Contributions made to the Plan, such
distributions (including forfeiture of Matching Contributions) shall be made in
a manner similar to that described in subsection (b) hereof.
(e) Return of Excess Annual Additions. Any Before-Tax
Contributions returned to a Participant to correct excess Annual Additions
shall be disregarded for purposes of determining whether the Maximum Deferral
Amount has been exceeded.
6.3 Nondiscrimination Requirements for Before-Tax Contributions.
(a) ADP Test. The allocation of the aggregate of all (i)
Before-Tax Contributions, (ii) to the extent designated by the Administrative
Committee pursuant to subsection (c) hereof, Qualified Nonelective
Contributions, and (iii) to the extent taken into account under subsection (b)
hereof, before-tax and/or qualified nonelective contributions made under
another plan, shall satisfy at least one of the following ADP Tests (which have
been applied consistently since the Plan's inception) for each Plan Year:
(1) The ADP of the Active Participants who are
Highly Compensated Employees during the Plan Year shall not exceed the
product of (A) the ADP for such Plan Year of the Active Participants
who are not Highly Compensated Employees during the Plan Year,
multiplied by (B) 1.25; or
(2) The ADP of the Active Participants who are
Highly Compensated Employees during the Plan Year shall not exceed the
ADP for such Plan Year of the Active Participants who are not Highly
Compensated Employees during the Plan Year by more than 2 percentage
points, nor shall it exceed the product of (A) the ADP for such Year
of the Active Participants who are not Highly Compensated Employees
during the Plan Year, multiplied by (B) 2.
(b) Multiple Plans. If before-tax and/or qualified
nonelective contributions are made to one or more other plans [other than
employee stock ownership plans as described in Code Section 4975 (e)(7)] which,
along with the Plan, are considered as a single plan for purposes of Code
Section 401(a)(4) or Section 410(b), such plans shall be treated as one plan
for purposes of this Section, and the before-tax and applicable qualified
nonelective contributions made to those other plans shall be combined with the
Before-Tax and applicable Qualified Nonelective Contributions for purposes of
performing the tests described in subsection (a) hereof. In addition, the
Administrative Committee may elect to treat the Plan as a single plan along
with the one or more other plans [other than employee stock ownership plans as
described
30
<PAGE>
in Code Section 4975 (e)(7)] to which before-tax and/or qualified nonelective
contributions are made for purposes of this Section; provided, the Plan and all
of such other plans also must be treated as a single plan for purposes of
satisfying the requirements of Code Sections 401(a)(4) and 410(b) [other than
the requirements of Code Section 410(b)(2)(A)(ii)]. However, plans may be
aggregated for purposes of this subsection only if they have the same plan
year.
(c) Adjustments to Actual Deferral Percentages. In the
event that the allocation of the Before-Tax Contributions and Qualified
Nonelective Contributions for a Plan Year does not satisfy one of the ADP Tests
of subsection (a) hereof, the Administrative Committee shall cause the
Before-Tax and Qualified Nonelective Contributions for such Plan Year to be
adjusted in accordance with one or a combination of the following options:
(1) The Administrative Committee may cause the
Participating Companies to make, with respect to such Plan Year,
Qualified Nonelective Contributions on behalf of, and allocable to,
the Participants described in Section 5.4 with respect to such Plan
Year, in the minimum amount necessary to satisfy one of the ADP Tests.
Such Qualified Nonelective Contributions shall be allocated among such
Participants pursuant to one of the methods described in Section 5.4.
(2) By the last day of the Plan Year following
the Plan Year in which the annual allocation failed both of the ADP
Tests, the Administrative Committee may direct the Trustee to reduce
the Before-Tax Contributions taken into account with respect to Highly
Compensated Employees under such failed ADP Tests by the dollar amount
necessary to satisfy one of the ADP Tests. Any amount by which
Before-Tax Contributions are so reduced, plus any earnings
attributable thereto (including in the Administrative Committee's
discretion any gap income or loss), shall be distributed to the Highly
Compensated Employees from whose Before-Tax Accounts such reductions
shall have been made. Such reductions in Before-Tax Contributions
shall be made in accordance with, and solely to the Accounts of those
Highly Compensated Employees who are affected by, the following
procedure:
(A) First, the Before-Tax
Contributions of the Highly Compensated Employee(s) with the
highest dollar amount of Before-Tax Contributions for such
Plan Year shall be reduced by the lesser of (i) the entire
amount necessary to satisfy one of the ADP Tests, or (ii)
that part of the entire amount necessary to satisfy one of
the ADP Tests as shall cause the amount of Before-Tax
Contributions of each such Highly Compensated Employee to
equal the amount of Before-Tax Contributions of each of the
Highly Compensated Employees with the next highest dollar
amount of Before-Tax Contributions for such Plan Year. In
addition, to the extent that a Highly Compensated Employee's
Before-Tax Contributions are reduced pursuant to this
Section, any Matching Contributions made on behalf of a
Highly Compensated Employee which are attributable to the
distributed Before-Tax Contributions shall be forfeited.
(B) Substantially identical steps
shall be followed for making further reductions in the
Before-Tax Contributions of each of the Highly
31
<PAGE>
Compensated Employees with the next highest dollar amount of
Before-Tax Contributions for such Plan Year until one of the
ADP Tests has been satisfied.
6.4 Nondiscrimination Requirements for Matching Contributions.
(a) ACP Test. The allocation of the aggregate of all (i)
after-tax, (ii) Matching Contributions, (iii) to the extent designated by the
Administrative Committee pursuant to subsection (c) hereof, Qualified
Nonelective Contributions, and (iv) to the extent designated by the
Administrative Committee pursuant to subsection (b) hereof, other before-tax
and/or qualified nonelective contributions made under another plan shall
satisfy at least one of the following ACP Tests (which have been applied
consistently since the Plan's inception) for such Plan Year:
(1) The ACP of the Active Participants who are
Highly Compensated Employees during the Plan Year shall not exceed the
product of (A) the ACP for such Plan Year of the Active Participants
who are not Highly Compensated Employees during the Plan Year,
multiplied by (B) 1.25; or
(2) The ACP of the Active Participants who are
Highly Compensated Employees during the Plan Year shall not exceed the
ACP for such Plan Year of the Active Participants who are not Highly
Compensated Employees during the Plan Year by more than 2 percentage
points, nor shall it exceed the product of (A) the ACP for such Plan
Year of the Active Participants who are not Highly Compensated
Employees during the Plan Year, multiplied by (B) 2.
(b) Multiple Plans. If matching, after-tax, before-tax
and/or qualified nonelective contributions are made to one or more other plans
[other than employee stock ownership plans as described in Code Section 4975
(e)(7)] which, along with the Plan, are considered as a single plan for
purposes of Code Section 401(a)(4) or Section 410(b), such plans shall be
treated as one plan for purposes of this Section, and the matching, after-tax,
applicable before-tax and qualified nonelective contributions made to those
other plans shall be combined with the Matching, applicable Before-Tax and
Qualified Nonelective Contributions for purposes of performing the tests
described in subsection (a) hereof. In addition, the Administrative Committee
may elect to treat the Plan as a single plan along with one or more other plans
[other than employee stock ownership plans as described in Code Section 4975
(e)(7)] to which matching, after-tax, applicable before-tax and/or qualified
nonelective contributions are made for purposes of this Section; provided, the
Plan and all of such other plans also must be treated as a single plan for
purposes of satisfying the requirements of Code Sections 401(a)(4) and 410(b)
[other than the requirements of Code Section 410(b)(2)(A)(ii)]. However, plans
may be aggregated for purposes of this subsection only if they have the same
plan year.
(c) Adjustments to Actual Contribution Percentages. In
the event that the allocation of the Before-Tax, Matching and Qualified
Nonelective Contributions and other after tax, before-tax and qualified
nonelective contributions for a Plan Year does not satisfy one of the ACP Tests
of subsection (a) hereof, the Administrative Committee shall cause such
Matching Contributions for the Plan Year to be adjusted in accordance with one
or a combination of the following options:
32
<PAGE>
(1) The Administrative Committee may cause the
Participating Companies to make, with respect to such Plan Year,
Qualified Nonelective Contributions on behalf of, and specifically
allocable to, the Participants described in Section 5.4 with respect
to such Plan Year, in the minimum amount necessary to satisfy one of
the ACP Tests; such Qualified Nonelective Contributions shall be
allocated among the Participants pursuant to the methods described in
Section 5.4. Alternatively or in addition, the Administrative
Committee may add a portion of the Before-Tax Contributions that are
made for the Plan Year by the Participants who are not Highly
Compensated Employees and that are not needed for the Plan to satisfy
the ADP Tests for the Plan Year to the Matching Contributions for such
Participants to increase the ACP for such Participants.
(2) By the last day of the Plan Year following
the Plan Year in which the annual allocation failed both of the ACP
Tests, the Administrative Committee may direct the Trustee to reduce
the Matching Contributions taken into account with respect to Highly
Compensated Employees under such failed ACP Tests by the dollar amount
necessary to satisfy one of the ACP Tests. The amount by which
Matching Contributions are to be reduced, plus any earnings
attributable thereto, shall be forfeited; provided, if the Matching
Contributions to be reduced are vested and therefore may not be
forfeited, those Matching Contributions (plus any earnings
attributable thereto) shall be distributed to the Highly Compensated
Employees from whose Matching Accounts such reductions have been made.
Such reductions in Contributions shall be made in accordance with, and
solely to the Accounts of those Highly Compensated Employees who are
affected by, the following procedure:
(A) First, the Matching Contributions
of the Highly Compensated Employee(s) with the highest dollar
amount of Matching Contributions for such Plan Year shall be
reduced by the lesser of (i) the entire amount necessary to
satisfy one of the ACP Tests, or (ii) that part of the entire
amount necessary to satisfy one of the ACP Tests as shall
cause the dollar amount of Matching Contributions of each
such Highly Compensated Employee to equal the amount of
Matching Contributions of each of the Highly Compensated
Employees with the next highest dollar amount of Matching
Contributions for such Plan Year.
(B) Substantially identical steps
shall be followed for making further reductions in the
Matching Contributions of each of the Highly Compensated
Employees with the next highest dollar amount of Matching
Contributions for such Plan Year until one of the ACP Tests
has been satisfied.
33
<PAGE>
6.5 Multiple Use of Tests.
(a) Aggregate Limitation. For Plan Years beginning prior
to January 1, 2002, the sum of the ADP and the ACP for the Plan Year being
tested for the entire group of eligible Highly Compensated Employees who are
Active Participants, following and taking into account the application of
Sections 6.3(c) and 6.4(c) for such Plan Year, may not exceed the greater of
(1) or (2) below (or such other applicable limits as may be established under
the Code, regulations or otherwise):
(1) the sum of:
(A) 125 percent of the greater of (i)
the ADP for such Plan Year of the group of non-Highly
Compensated Employees eligible under the Plan beginning with
or within the plan year of the Code Section 401(k)
arrangement, or (ii) ACP for such Plan Year for the group of
non-Highly Compensated Employees who are eligible under the
Plan beginning with or within the plan year of the Code
Section 401(k) arrangement; plus
(B) the lesser of 2 plus or 2 times
the lesser of the amount determined in subsection
(a)(l)(A)(i) or (a)(l)(A)(ii) hereof; or
(2) the sum of:
(A) 125 percent of the lesser of (i)
the ADP for such Plan Year of the group of non-Highly
Compensated Employees eligible under the Plan beginning with
or within the plan year of the Code Section 401(k)
arrangement, or (ii)the ACP for such Plan Year of the group
of non-Highly Compensated Employees who are eligible under
the Plan beginning with or within the plan year of the Code
Section 401(k) arrangement; plus
(B) the lesser of 2 plus or 2 times
the greater of the amount determined in subsection
(a)(2)(A)(i) or (a)(2)(A)(ii) hereof.
(b) Multiple Plans. If at least one Highly Compensated
Employee participates in another qualified retirement plan maintained by the
Participating Company which (i) permits before-tax contributions and/or
after-tax contributions or matching contributions, and (ii) is not aggregated
with the Plan for purposes of nondiscrimination testing, then the multiple use
aggregate limitations described in subsection (a) shall apply separately with
respect to each such other plan.
(c) Correction. If the maximum limitation of the
combination of the Highly Compensated Employees' ADPs and ACPs, as described in
subsection (a) hereof, is exceeded, this excess shall be reduced or otherwise
corrected by any method permissible under Section 6.3 for satisfying the ADP
Test or through any method permitted under Section 6.4 to satisfy the ACP Test,
or any combination thereof.
34
<PAGE>
(d) Application. This Section shall be applied and
interpreted in a manner consistent with regulations promulgated under Code
Section 401(m).
6.6 Order of Application.
For any Plan Year in which adjustments shall be necessary or
otherwise made pursuant to the terms of Sections 6.3, 6.4 and/or 6.5, such
adjustments shall be applied in the order prescribed by the Secretary of
Treasury in Treasury Regulations or other published authority.
6.7 Code Section 415 Limitations on Maximum Contributions.
(a) General Limit on Annual Additions. In no event shall
the Annual Addition to a Participant's Account for any Limitation Year, under
the Plan and any other Defined Contribution Plan maintained by an Affiliate,
exceed the lesser of:
(1) $35,000 (as adjusted by the Secretary of
the Treasury under Code Section 415(d) to reflect cost-of-living
increases); or (2) 25 percent of such Participant's Compensation.
(b) Combined Plan Limit. If an Employee is a participant
in the Plan and any one or more other defined contribution plans maintained by
any Affiliates and a corrective adjustment in such Employee's benefits is
required to comply with this Section 6.7, such adjustment shall be made under
the other plan(s). Effective for Limitation Years commencing prior to January
1, 2000, the Plan was subject to the combined defined benefit and defined
contribution plan limit under former Code Section 415 (e).
(c) Correction of Excess Annual Additions. If, as a
result of either the allocation of Forfeitures to an Account, a reasonable
error in estimating a Participant's Compensation or Elective Deferrals, or such
other circumstances as permitted by the Internal Revenue Service, the Annual
Addition made on behalf of a Participant exceeds the limitations set forth in
this Section, the Administrative Committee shall direct the Trustee to take
such of the following actions as it shall deem appropriate, specifying in each
case the amount of Contributions involved:
(1) A Participant's Annual Addition first shall
be reduced by reducing his Before-Tax Contributions in the amount of
the excess, up to the total amount of Before-Tax Contributions made on
behalf of such Participant on which the Participating Company has made
no Matching Contribution, and the amount of the reduction (plus any
earnings thereon) shall be returned to the Participant.
(2) If further reductions are necessary, a
Participant's Annual Addition shall be reduced by reducing his
Before-Tax Contributions (not previously reduced) in the amount of the
remaining excess, up to the total amount of Before-Tax Contributions
made on behalf of such Participant. The amount of the reduction (plus
investment earnings thereon) shall be returned to such Participant and
the Matching Contributions (and investment earnings thereon)
attributable to the returned Before-Tax Contributions
35
<PAGE>
shall be forfeited, placed in a suspense account and reallocated in a
manner similar to that described in subsection (c)(3) hereof.
(3) If further reduction is necessary, the
Qualified Nonelective Contributions allocated to the Participant's
Account shall be reduced in the amount of the remaining excess, shall
be held in a suspense account and shall be applied to reduce
permissible Contributions in each successive Plan Year until such
amount is fully allocated; provided, so long as any suspense account
is maintained pursuant to this Section: (A) no Contributions shall be
made to the Plan which would be precluded by this Section; (B)
investment gains and losses of the Trust Fund shall be allocated to
such suspense account; and (C) amounts in the suspense account shall
be allocated in the same manner as Contributions as of the earliest
Valuation Date possible, until such suspense account is exhausted.
(d) Annual Addition. For purposes of this Section, the
term "Annual Addition" for any Participant means the sum for any Limitation
Year of:
(1) contributions made by an Affiliate on
behalf of the Participant under all Defined Contribution Plans;
(2) contributions made by the Participant under
all Defined Contribution Plans of an Affiliate [excluding rollover
contributions as defined in Code Sections 402(c)(4), 403(a)(4),
403(b)(8) and 408(d)(3) and contributions of previously distributed
benefits which result in such a Plan's restoration of previously
forfeited benefits pursuant to Treasury Regulation Section 1.41
l(a)-7(d)];
(3) forfeitures allocated to the Participant
under all Defined Contribution Plans of an Affiliate;
(4) amounts allocated for the benefit of the
Participant after March 31, 1984, to an individual medical account
established under a pension or annuity plan maintained by an
Affiliate, as described in Code Section 415(1); and
(5) if the Participant was a Key Employee at
any time during the Plan Year during which or coincident with which
the Limitation Year ends or during any preceding Plan Year, any amount
paid or accrued after December 31, 1985 by an Affiliate to a special
account under a welfare benefit fund [as defined in Code Section
419(e)] to provide post-retirement medical or life insurance benefits
to the Participant, as described in Code Section 419A(d)(2).
Contributions do not fail to be Annual Additions merely because they are (i)
Before-Tax Contributions that exceed the Maximum Deferral Amount, (ii)
Before-Tax Contributions that cause the Plan to fail the ADP Tests, or (iii)
Matching Contributions that cause the Plan to fail the ACP Tests, or merely
because the Contributions described in clauses (ii) and (iii) immediately above
are corrected through distribution or recharacterization; Contributions
described in clause (i) immediately above that are distributed in accordance
with the terms of Section 6.2 shall not be Annual Additions.
36
<PAGE>
(e) Compliance with Code Section 415. The limitations in
this Section are intended to comply with the provisions of Code Section 415 so
that the maximum benefits permitted under plans of the Affiliates shall be
exactly equal to the maximum amounts allowed under Code Section 415 and the
regulations promulgated thereunder. The provisions of this Section generally
are effective as of the Effective Date, but to the extent the Code requires an
earlier or later effective date with respect to any portion(s) of this Section,
such other effective date shall apply. If there is any discrepancy between the
provisions of this Section and the provisions of Code Section 415 and the
regulations promulgated thereunder, such discrepancy shall be resolved in such
a way as to give full effect to the provisions of the Code.
6.8 Construction of Limitations and Requirements.
The descriptions of the limitations and requirements set
forth in this Article are intended to serve as statements of the legal
requirements necessary for the Plan to remain qualified under the applicable
terms of the Code. The Participating Companies do not desire or intend, and the
terms of this Article shall not be construed, to impose any more restrictions
on the operation of the Plan than required by law. Therefore, the terms of this
Article and any related terms and definitions in the Plan shall be interpreted
and operated in a manner which imposes the least restrictions on the Plan. For
example, if use of a more liberal definition of "Compensation" or a more
liberal multiple use test is permissible at any time under the law, then the
more liberal provisions may be applied as if such provisions were included in
the Plan.
37
<PAGE>
ARTICLE VII
INVESTMENTS
7.1 Establishment of Trust Account.
All Contributions are to be paid over to the Trustee, to be
held in the Trust Fund and invested in accordance with the terms of the Plan
and the Trust.
7.2 Investment Funds.
(a) Establishment of Investment Funds. In accordance
with instructions from the Investment Committee and the terms of the Plan and
the Trust, the Trustee shall establish and maintain, for the investment of
assets of the Trust Fund, Investment Funds for the investment of Contributions
and Accounts. Such Investment Funds shall include a "Company Stock Fund" in
which all Contributions may be invested. Other Investment Funds shall be
established and modified from time to time without necessity of amendment to
the Plan and shall have the investment objectives prescribed by the Investment
Committee. Investment Funds also may be established and maintained for any
limited purpose(s) the Investment Committee may direct (for example, for the
investment of certain specified Accounts transferred from a Prior Plan).
Similarly, at the authorized direction of the Investment Committee, the Trustee
may eliminate one or more of the then existing Investment Funds. The Trustee
may invest Contributions it receives in interest-bearing accounts until such
time as a Participant's investment directions can be effected.
(b) Reinvestment of Cash Earnings. Any investment
earnings received in the form of cash with respect to any Investment Fund (in
excess of the amounts necessary to make cash distributions or to pay Plan or
Trust expenses) shall be reinvested in such Investment Fund.
7.3 Participant Direction of Investments.
Each Participant or Beneficiary generally may direct the
manner in which his Accounts and Contributions shall be invested in and among
the Investment Funds described in Section 7.2. Participant investment
directions shall be made in accordance with the following terms:
(a) Investment of Contributions. Except as otherwise
provided in this Section, each Participant may elect, on a form provided by the
Administrative Committee, through an interactive telephone or internet-based
system, or in such other manner as the Administrative Committee may prescribe,
the percentage of his future Contributions (other than Matching Contributions)
that will be invested in each Investment Fund. An initial election of a
Participant shall be made as of the Entry Date on which the Participant
commences or recommences participation in the Plan and shall apply to all such
specified Contributions credited to such Participant's Account after such Entry
Date. Such Participant may make subsequent elections as of any Valuation Date,
and such elections shall apply to all such Contributions credited to such
Participant's Accounts following such date; for purposes hereof, Contributions
and/or Forfeitures that are credited to a Participant's or Beneficiary's
Account shall be subject to the investment election in effect on the date on
which such amounts are actually received and credited, regardless of any prior
date "as of which such Contributions may
38
<PAGE>
have been allocated to his Account. Any election made pursuant to this
subsection with respect to future Contributions shall remain effective until
changed by the Participant. In the event a Participant never makes an
investment election or makes an incomplete or insufficient election in some
manner, the Trustee, based on authorized directions from the Administrative
Committee, shall direct the investment of the Participant's future
Contributions. Notwithstanding anything in this subsection (a) to the contrary,
all Matching Contributions (both Basic and Supplemental Annual) shall be
initially invested in the Company Stock Fund; provided, the Participant or
Beneficiary may elect to direct the investment of his existing Matching Account
among other Investment Funds in accordance with subsection (b) below
(b) Investment of Existing Account Balances. Except as
otherwise provided in this Section, each Participant or Beneficiary may elect,
on a form provided by the Administrative Committee, through an interactive
telephone or internet-based system, or in such other manner as the
Administrative Committee may prescribe, the percentage of his existing Accounts
that will be invested in each Investment Fund; provided, as part of making an
election, the Participant or Beneficiary may elect different Investment Funds
or combinations of Investment Funds for each such type of Account. Such
Participant or Beneficiary may make such elections effective as of any
Valuation Date following his Entry Date into the Plan (or the crediting of his
Rollover Contribution). Each such election shall remain in effect until changed
by such Participant or Beneficiary. In the event a Participant or Beneficiary
fails to make an election for his existing Account balance pursuant to the
terms of this subsection which is separate from his election made for his
Contributions pursuant to the terms of this subsection (a) hereof, or if a
Participant's or Beneficiary's investment election form is incomplete or
insufficient in some manner, the Participant's or Beneficiary's existing
Account balance will continue to be invested in the same manner provided under
the terms of the most recent election affecting that portion of his Account.
Notwithstanding anything in this subsection (b) to the contrary, a
Participant's or Beneficiary's Matching Account shall remain invested in the
Company Stock Fund until the Participant or Beneficiary elects to change such
investment; and, thereafter, that portion of the Matching Account which has
been invested in other Investment Funds shall be reinvested according to the
Participant's or Beneficiary's subsequent investment elections along with all
other Accounts.
(c) Conditions Applicable to Elections. The
Administrative Committee shall have complete discretion to adopt and revise
procedures to be followed in making such investment elections. Such procedures
may include, but are not limited to, the process of the election, the permitted
frequency of making elections, the deadline for making elections and the
effective date of such elections; provided, elections must be permitted at
least once every 3 months. Any procedures adopted by the Administrative
Committee that are inconsistent with the deadlines or procedures specified in
this Section shall supersede such provisions of this Section without the
necessity of a Plan amendment.
(d) Restrictions on Investments. To the extent any
investment or reinvestment restrictions apply with respect to any Investment
Funds (for example, restrictions on changes of investments between competing
funds) or as a result of unanticipated depletion of cash liquidity within an
Investment Fund, a Participant's or Beneficiary's ability to direct investments
hereunder may be limited.
39
<PAGE>
7.4 Valuation.
As of each Valuation Date, the Trustee shall determine the
fair market value of each of the Investment Funds after first deducting any
expenses which have not been paid by the Participating Companies. All costs and
expenses incurred in connection with Plan investments and, unless paid by the
Participating Companies, all costs and expenses incurred in connection with the
general administration of the Plan and the Trust shall be allocated between the
Investment Funds in the proportion in which the amount invested in each
Investment Fund bears to the amount invested in all Investment Funds as of the
appropriate Valuation Date; provided, all costs and expenses directly
identifiable to one Investment Fund shall be allocated to that Investment Fund.
7.5 Voting and Tender Offer Rights with Respect to Investment
Funds.
Except as provided in Section 7.10, only if, to the extent
and in the manner, permitted by the Trust and/or any documents establishing or
controlling any of the Investment Funds, shall Participants and Beneficiaries
be given the opportunity to vote and tender their interests in each such
Investment Funds. Otherwise, such interests shall be voted and/or tendered by
the Investment Manager or other fiduciary that controls such Investment Fund,
as may be provided in the controlling documents.
7.6 Purchase of Life Insurance.
Life insurance contracts shall not be purchased.
7.7 Fiduciary Responsibilities for Investment Directions.
All fiduciary responsibility with respect to the selection of
Investment Funds for the investment of a Participant's or Beneficiary's
Accounts shall be allocated to the Participant or Beneficiary who directs the
investment. Neither the Administrative Committee, the Investment Committee, the
Trustee, nor any Participating Company shall be accountable for any loss
sustained by reason of any action taken, or investment made, pursuant to an
investment direction.
7.8 Appointment of Investment Manager; Authorization to Invest in
Collective Trust.
(a) Investment Manager. The Investment Committee may
appoint any one or more individuals or entities to serve as the investment
manager or managers of the entire Trust or of all or any designated portion of
a particular Investment Fund or Investment Funds. The investment manager shall
certify that it is qualified to act as an "investment manager" within the
meaning of Section 3(38) of ERISA and shall acknowledge in writing its
fiduciary status with respect to the assets placed under its control. The
appointment of the investment manager shall be effective upon the Trustee's
receipt of a copy of an appropriate Investment Committee resolution (or such
later effective date as may be contained therein), and the appointment shall
continue in effect until receipt by the Trustee of a copy of an Investment
Committee resolution removing or accepting the resignation of the investment
manager (or such later effective date as may be specified therein). If an
investment manager is appointed, the investment manager shall have the power to
manage, acquire and dispose of any and all assets of the Trust Fund, as the
40
<PAGE>
case may be, which have been placed under its control, except to the extent
that such power is reserved to the Trustee by the Controlling Company. If an
investment manager is appointed, the Trustee shall be relieved of any and all
liability for the acts or omissions of the investment manager, and the Trustee
shall not be under any obligation to invest or otherwise manage any assets
which are subject to the management of the investment manager.
(b) Collective Trust. The Investment Committee may
designate that all or any portion of the Trust Fund shall be invested in a
collective trust fund, in accordance with the provisions of Revenue Ruling
81-100 or any successor ruling, which collective trust fund shall have been
specifically identified in the Trust and adopted thereby as a part of the Plan,
effective upon the Trustee's receipt of a copy of an appropriate Investment
Committee resolution (or such later effective date as may be contained
therein), and the investment in said collective trust shall continue in effect
until receipt by the Trustee of a copy of an Investment Committee resolution
terminating said investment (or such later effective date as may be contained
therein). Such designation or direction shall be in addition to the powers to
invest in commingled funds maintained by the Trustee provided for in the Trust.
7.9 Value of Company Stock.
For all purposes under the Plan for which the value of
Company Stock must be determined, the value of Company Stock shall be its fair
market value. If the Company Stock is listed on an established stock exchange,
the fair market value per share of Company Stock on any particular date shall
be the closing price of the stock on such exchange on the last business day of
such exchange which immediately precedes the date of valuation. If, for any
reason, the fair market value per share of Company Stock cannot be ascertained
or is unavailable for a particular date, the fair market value of such stock
shall be determined as of the nearest preceding date on which such fair market
value can be ascertained pursuant to the terms hereof. In the case of a
transaction between the Plan and a person described in Code Section 4975
(e)(2), the value shall be determined as of the date of the transaction; for
all other purposes, the value shall be determined as of the most recent
Valuation Date.
7.10 Voting and Tender Offer Rights With Respect to Company Stock.
(a) Voting Rights. Each Participant or Beneficiary shall
have the right to direct the Trustee as to the exercise of all voting rights
with respect to the whole shares of Company Stock in his Account. The Trustee
shall vote fractional shares and shares with respect to which voting directions
are not received in the same proportion as the whole shares of Company Stock
are voted by the voting Participants or Beneficiaries.
(b) Tender Offer Rights. Each Participant or Beneficiary
also shall have the responsibilities of a Named Fiduciary for purposes of
directing, and shall have the right to direct, the Trustee as to whether, in
accordance with the terms of any tender offer for shares of Company Stock, to
tender the whole shares of Company Stock in his Account, and the Trustee shall
follow such directions. To the extent possible, the Trustee shall combine
fractional shares of Company Stock in the same proportion as the whole shares
of such Company Stock are tendered by the tendering Participants or
Beneficiaries. Unless otherwise required by ERISA, the Trustee shall not tender
whole shares of Company Stock credited to a Participant's or
41
<PAGE>
Beneficiary's Account for which it has received no directions from such
Participant or Beneficiary.
(c) Confidentiality. The Administrative Committee shall
establish procedures to protect the voting and tender offer rights of the
Participants and Beneficiaries and to assure that the manner in which each
Participant or Beneficiary exercises his voting or tender offer rights is
confidential with respect to the Administrative Committee and the management of
the Company.
(d) Dissemination of Pertinent Information. The
Administrative Committee shall deliver, or cause to be delivered, to each
Participant or Beneficiary, all notices, financial statements, proxies and
proxy soliciting materials, relating to the voting of Company Stock in his
Account. In addition, the Administrative Committee shall deliver, or cause to
be delivered, to each Participant and Beneficiary all materials relating to any
tender offer, including the materials distributed by any tender offer (that is,
any bidder). The Administrative Committee shall notify each Participant or
Beneficiary of each occasion for the exercise of voting or tender offer rights
within a reasonable time before such rights are to be exercised, and such
notification shall include all of the relevant information that the Controlling
Company distributes to stockholders regarding the exercise of such rights.
42
<PAGE>
ARTICLE VIII
VESTING IN ACCOUNTS
8.1 Vesting.
(a) General Vesting Rule.
(1) Fully Vested Accounts. All Participants
shall at all times be fully vested in their Before-Tax, Qualified
Nonelective and Rollover Accounts. Transfer Accounts shall be subject
to the vesting schedule in subsection (a)(2) hereof unless a different
vesting schedule is specified on a Schedule to the Plan.
(2) Matching Account. Except as provided in
Sections 8.1(b) and 8.2, the Matching Account of each Participant (i)
who is not employed on July 1, 1999 by the Controlling Company, and
(ii) who either (A) is first employed by the Controlling Company after
July 1, 1999, or (B) is a former Employee who is rehired after July 1,
1999 at a time when he has a Matching Account balance remaining in the
Plan which is less than 25 percent vested, shall vest in accordance
with the following vesting schedule, based on the total of the
Participant's Years of Vesting Service:
<TABLE>
<CAPTION>
Years of Vesting Service Vested Percentage of Participant's
Completed by Participant Matching Account
------------------------ ----------------------------------
<S> <C>
Less than 3 Years 0%
3 Years or more 100%
</TABLE>
(b) Grandfathered Vesting. The Matching Account of each
Participant who either (i) is employed by the Controlling Company on July 1,
1999, or (ii) is a former Employee of the Controlling Company who is rehired
after July 1, 1999 at a time when he has a Matching Account balance remaining
in the Plan which is at least 25 percent vested, shall vest in accordance with
the following schedule, based on the total of the Participant's Years of
Vesting Service:
<TABLE>
<CAPTION>
Years of Vesting Service Vested Percentage of Participant's
Completed by Participant Matching Account
------------------------- ----------------------------------
<S> <C>
Less than 2 Years 0%
2 Years, but less than 3 25%
3 Years or more 100%
</TABLE>
8.2 Vesting Upon Attainment of Normal Retirement Age, Death or
Disability.
Notwithstanding Section 8.1, a Participant's Account shall
become 100 percent vested and nonforfeitable upon the occurrence of any of the
following events:
(a) The Participant's attainment of Normal Retirement
Age while still employed as an Employee of any Affiliate;
43
<PAGE>
(b) The Participant's death while still employed as an
Employee of any Affiliate; or
(c) The Participant's becoming Disabled while still
employed as an Employee of any Affiliate.
8.3 Timing of Forfeitures and Vesting after Restoration
Contributions.
If a Participant who is not yet 100 percent vested in his
Accounts separates from service with all Affiliates, the unvested portion of
his Account shall be immediately forfeited and shall become available for
allocation as a Forfeiture (in accordance with the terms of Section 5.6) as
soon as practicable after such separation occurs. If a Participant has no
vested interest in his Matching Account and/or Transfer Account at the time he
separates from service, he shall be deemed to have received a cash-out
distribution at the time he separates from service, and the forfeiture
provisions of this Section shall apply. If such a Participant resumes
employment with an Affiliate after he has incurred 5 or more consecutive Breaks
in Service, such nonvested amount shall not be restored. If such a Participant
resumes employment with an Affiliate before he has incurred 5 consecutive
Breaks in Service, the nonvested amount shall be restored pursuant to the terms
of Section 3.7 and shall be credited to his Matching Account and/or Transfer
Account. The Participant's Matching Account and/or Transfer Account then shall
be subject to all of the vesting rules in this Article VIII as if no
Forfeitures had occurred.
8.4 Vesting following Partial Distributions.
In the event that a Participant receives a distribution from
an Account in which he is less than fully vested, the vested interest of the
Participant in such Account prior to the date such Participant (i) separates
from service with all Affiliates, (ii) incurs 5 consecutive Breaks in Service
(such that the nonvested portions of such Account are forfeited), or (iii)
becomes 100 percent vested pursuant to the terms of Sections 8.1 or 8.2 hereof
(whichever is earliest), shall be determined pursuant to the following formula:
X=P (AB + [R x D]) - (R x D),
Where X is the vested interest at the relevant time (that is, the time at which
the vested percentage in such Account cannot increase), P is the vested
percentage at the relevant time; AB is the balance of his Matching Account or
Transfer Account at the relevant time; D is the amount of the distribution; and
R is the ratio of such Account's Balance at the relevant time to such Account's
balance immediately after the distribution.
8.5 Amendment to Vesting Schedule.
Notwithstanding anything herein to the contrary, in no event
shall the terms of any amendment to the Plan reduce the vested percentage that
any Participant has earned under the Plan. In the event that the Plan provides
for Participants to vest in their Accounts at a rate which is faster than that
provided under any amendment hereto (or in the event any other change is made
that directly has an adverse effect on Participants' vested percentage), any
Participant who has 3 or more Years of Vesting Service [calculated in a manner
consistent with Treasury
44
<PAGE>
Regulation Section 1.411(a)-8T (or any successor Section)] may elect to have
his vested percentage calculated under the schedule in the Plan before any such
change, and the Administrative Committee shall give each such Participant
notice of his rights to make such an election. The period during which the
election may be made shall commence with the date the amendment is adopted or
deemed to be made and shall end on the latest of: (i) 60 days after the
amendment is adopted; (ii) 60 days after the amendment becomes effective; or
(iii) 60 days after the Participant is issued written notice of the amendment
by a Participating Company or Administrative Committee.
45
<PAGE>
ARTICLE IX
PAYMENT OF BENEFITS FROM ACCOUNTS
9.1 Benefits Payable for Reasons Other Than Death.
(a) General Rule. In accordance with the terms of
subsection (b) hereof and subject to the restrictions set forth in subsections
(c) and (d) hereof, if a Participant becomes Disabled or separates from service
with all Affiliates for any reason other than death he (or his Beneficiary, if
he dies after such Disability or separation from service) shall be entitled to
receive a distribution of (i) the vested amount credited to his Account,
determined as of the Valuation Date on which such distribution is processed,
plus (ii) the vested amount of any Contributions made on his behalf since such
Valuation Date. For purposes of this Article, the "date on which such
distribution is processed" refers to the date established for such purpose by
administrative practice, even if actual payment and/or processing is made at a
later date due to delays in the valuation, administrative or any other
procedure.
(b) Timing of Distribution.
(1) Except as provided in subsections (b)(2),
(b)(3), (b)(4), (d) and (e) hereof, benefits payable to a Participant
under this Section shall be distributed as soon as administratively
practicable following the last Business Day of the first full calendar
month following the later of (i) the date on which the Participant
affirmatively elects to receive such payment, or (ii) the date on
which the Participant's separation from service or Disability has been
processed by the Controlling Company's payroll system and communicated
to the Plan's third-party recordkeeper (that is, the Administrative
Committee's designee for processing distributions. The Administrative
Committee shall establish terms and conditions governing elections
made under this subsection (b)(l).
(2) Notwithstanding the foregoing, in the event
that (A) the value of the Participant's Account exceeds $5,000 (or,
for distributions made prior to December 1, 1999, exceeded $3,500 at
the time of such distribution or any prior distribution) and (B) the
distribution date described in subsection (b)(l) hereof occurs or is
to occur prior to the Participant's attainment of Normal Retirement
Age, benefits shall not be distributed to such Participant at the time
set forth in subsection (b)(l) hereof without the Participant's
election (including an on-line election) in such form as provided by
the Administrative Committee. In order for such Participant's election
to be valid, his election must be filed with the Administrative
Committee within the 90-day period ending on such date, and the
Administrative Committee (no later than 30 days and no earlier than 90
days before such distribution date) must have presented him with a
notice informing him of his right to defer his distribution; provided,
the Participant may elect to waive the minimum 30-day notice period
and to receive his distribution before the end of such period. If the
Participant does not consent in writing to the distribution of his
benefit at such time, his benefit shall be distributed as soon as
practicable after the date he files a written election with the
Administrative Committee requesting such payment.
(3) Notwithstanding anything in the Plan to the
contrary, unless a Participant elects to further defer the
distribution of his benefit or fails to submit a claim
46
<PAGE>
for such distribution, in no event shall payment of the Participant's
benefit be later than 60 days after the end of the Plan Year which
includes the latest of (i) the date on which the Participant attained
Normal Retirement Age, (ii)the date which is the 10th anniversary of
the date he commenced participation in the Plan, or (iii) the date he
actually separates from service with all Affiliates; provided, if the
amount of the payment cannot be ascertained by the date as of which
payments are scheduled to be made or commence hereunder, payment shall
be made or commence no later than 60 days after the earliest date on
which such payment can be ascertained under the Plan.
(4) Notwithstanding anything in the Plan to the
contrary, commencing with the original effective date of the Plan, the
Participant's Account shall be distributed (or commenced) no later than
the April 1 following the later of (i) the calendar year in which the
Participant attains age 70-1/2, or (ii) the calendar year in which the
Participant actually separates from service with all Affiliates [for
Plan Years prior to January 1, 1996, the earlier of (i) and (ii)];
provided, if such Participant is a 5 percent owner (as defined in Code
Section 416), benefit payments shall be made (or commence) no later
than the April 1 following the calendar year in which the Participant
attains age 70-1/2. Unless a Participant who is a 5 percent owner and
whose minimum distributions begin while he is still employed elects to
take a distribution of his entire Account balance, his benefits,
payable under this Article IX commencing as of his required beginning
date, shall be paid in the form of substantially equal monthly payments
over a period equal to the life expectancy of the Participant. All
distributions will be made in accordance with Code Section 401(a)(9)
and the regulations thereunder, including Treasury Regulation Section
1.401(a)(9)-2 (relating to incidental benefit limitations; and the
terms of the Plan reflecting the requirements of Code Section 401(a)(9)
override the distribution options (if any) in the Plan which are
inconsistent with those requirements. The life expectancy of a
Participant will be recalculated annually.
(c) Restrictions on Distributions from Before-Tax and
Qualified Nonelective Accounts. Notwithstanding anything in the Plan to the
contrary, (i) amounts in a Participant's Before-Tax and Qualified Nonelective
Accounts and (ii) amounts in a Participant's Transfer Accounts credited with
before-tax contributions and company contributions used to satisfy the Code
Section 401(k) actual deferral percentage test and company contributions used
to satisfy the Code Section 40 l(m) actual contribution percentage test shall
not be distributable to such Participant earlier than the earliest of the
following to occur:
(1) The Participant's death, Disability or
separation from service with all Affiliates;
(2) The termination of the Plan without the
establishment or maintenance of a successor defined contribution plan
[other than an employee stock ownership plan as defined in Code Section
4975 (e)] at the time the Plan is terminated or within the period
ending 12 months after the final distribution of all assets in all
Before-Tax, Qualified Nonelective and Transfer Accounts described above
in this subsection (c); provided, if fewer than 2 percent of the
Employees who are or were eligible under the Plan at the time of its
termination are or were eligible under another defined contribution
47
<PAGE>
plan at any time during the 24-month period beginning 12 months before
the time of termination, such other plan shall not be a successor
plan;
(3) The date of disposition by the
Participating Company employing such Participant of substantially all
of its assets [within the meaning of Code Section 409(d)(2)] that were
used by such Participating Company in a trade or business; provided,
such Participant continues employment with the corporation acquiring
such assets; provided, the sale of 85 percent of the assets used in a
trade or business will be deemed a sale of "substantially all" of the
assets used in such trade or business;
(4) The date of disposition by the
Participating Company employing such Participant of its interest in a
subsidiary [within the meaning of Code Section 409(d)(3)], provided
that such Participant continues employment with such subsidiary;
(5) The attainment by such Participant of age
59-1/2; or
(6) The Participant's incurrence of a financial
hardship as described in Section 10.1;
provided, for an event described in subsections (c)(2), (c)(3) or (c)(4) hereof
to constitute events permitting a distribution from the Before-Tax and
Qualified Nonelective Accounts (or the affected Transfer Accounts), such
distribution must be made on account of such event in the form of a lump sum
distribution, as defined in Code Section 402(e)(4)(D) (without regard to
subclauses (I), (II), (III) and (IV) of clause (i) thereof); and provided,
further, for the events described in subsections (c)(3) or (c)(4) hereof to
constitute events permitting such a distribution, the Participating Company
must maintain the Plan after the disposition.
(d) Delay Upon Reemployment or Termination of
Disability. If a Participant becomes eligible to receive a benefit payment in
accordance with the terms of subsection (a) and subsequently is reemployed by
an Affiliate (or ceases to be Disabled, as applicable) prior to the time his
Account has been distributed in full, the distribution to such Participant
shall be delayed until such Participant again becomes eligible to receive a
distribution from the Plan.
(e) Distribution Upon Sale of Business. In addition to
making distributions based on a Participant's separation from service,
distributions shall be made to a Participant, in accordance with the terms of
Section 401(k)(10) as a result of a sale by the Participating Company to
another corporation of (i) substantially all of the assets [within the meaning
of Code Section 409(d)(2)] that were used by the Participating Company in a
separate trade or business, or (ii) the Participating Company's interest in a
subsidiary [within the meaning of Code Section 409(d)(3)]. For a sale of
"substantially all" of the assets used in a trade or business to have occurred,
at least 85 percent of such assets must have been sold. For a sale to trigger a
distribution as provided in this Section, such Participant must have continued
employment with the purchaser of the assets or with the subsidiary, the
distribution must have been made on account of such event in the form of a
lump-sum distribution (as defined in Code Section 402(d)(4), without regard to
subparagraphs (A)(i) through (iv), (B) and (F) thereof), and the Participating
Company, and not the purchaser, must maintain the plan after the disposition.
Distributions made pursuant to this Section shall be made as soon as
practicable after the sale
48
<PAGE>
and after the Administrative Committee is able to determine that the
disposition and distribution satisfy the requirements of this Section, subject
to the valuation and consent rules set forth herein.
9.2 Death Benefits.
If a Participant dies before payment of his benefits from the
Plan is made or commences to be made, the Beneficiary or Beneficiaries
designated by such Participant in his latest beneficiary designation form filed
with the Administrative Committee in accordance with the terms of Section 9.6
shall be entitled to receive a distribution of the total of (i) the entire
vested amount credited to such Participant's Account, determined as of the
Valuation Date on which the distribution is processed, plus (ii) any
Contributions made on such Participant's behalf since such Valuation Date.
Benefits shall be distributed to such Beneficiary or Beneficiaries as soon as
administratively feasible following the second month after the date of the
Participant's death (or, if later, after timing restrictions and requirements
under the Code are satisfied). As required by Code Section 401(a)(9), in no
event shall any such distribution be made later than 5 years after the date of
the Participant's death, except for distributions made to such Participant's
Spouse. The Administrative Committee may direct the Trustee to distribute a
Participant's Account to a Beneficiary without the written consent of such
Beneficiary.
9.3 Forms of Distribution.
(a) Method. The payment of any distribution to a
Participant or Beneficiary from the Plan shall be in the form of a single-sum
payment.
(b) Direct Rollover Distributions. If a Participant,
Surviving Spouse or a spousal alternate payee under a qualified domestic
relations order who is the recipient of any Eligible Rollover Distribution
elects to have such Eligible Rollover Distribution paid directly to an Eligible
Retirement Plan and specifies (in such form and at such time as the
Administrative Committee may prescribe) the Eligible Retirement Plan to which
such distribution is to be paid, such distribution shall be made in the form of
a direct trustee-to-trustee transfer to the specified Eligible Retirement Plan;
provided, such transfer shall be made only to the extent that the Eligible
Rollover Distribution would be included in gross income if not so transferred
[determined without regard to Code Sections 402(c) and 403(a)(4)].
(c) Assets Distributed. Any distribution made to a
Participant or Beneficiary shall be made in the form of cash; provided, to the
extent a Participant's or Beneficiary's Account is invested in Company Stock,
the Participant or Beneficiary may elect to receive whole shares of Company
Stock, with any fractional shares paid in cash.
9.4 Cash-Out Payment of Benefits.
Notwithstanding anything to the contrary in this Article IX,
in the event that the vested portion of the Account of any Participant who
separates from the service of all Affiliates is less than or equal to $5,000
(or, for distributions made prior to December 1, 1999, was less than or equal
to $3,500 at the time of such distribution or any prior distribution), the full
vested amount of such benefit automatically shall be paid to such Participant
in one single-sum, cash-out distribution as soon as practicable following the
end of the second month following the
49
<PAGE>
month in which the Participant separates from service. In the event a
Participant has no vested interest in his Matching and/or Transfer Account at
the time of his separation from service, he shall be deemed to have received a
cash-out distribution of such Matching and/or Transfer Account at the time of
his separation from service, and the forfeiture provisions of Section 8.3 shall
apply.
9.5 Qualified Domestic Relations Orders.
In the event the Administrative Committee receives a domestic
relations order which it determines to be a qualified domestic relations order,
the Plan shall pay such benefit to the prescribed alternate payee(s) at such
time and in such form as shall be described in the qualified domestic relations
order and permitted under Section 15.1(b). If the qualified domestic relations
order requires immediate payment, the specified benefit shall be paid to the
alternate payee as soon as practicable following the end of the month within
which the Administrative Committee determines that the order is qualified or,
if later, after timing restrictions and requirements under the Code are
satisfied. To the extent consistent with the qualified domestic relations
order, the amount of the payment to an alternate payee shall include earnings,
interest and other investment proceeds through (but not after) the Valuation
Date as of which the Trustee processes the distribution. If a Participant's
Account is partially paid or payable to an alternate payee, the Participant's
remaining portion of his Account shall be reduced accordingly and shall be
subject to the distribution provisions in this Article IX.
9.6 Beneficiary Designation.
(a) General. In accordance with the terms of this
Section, Participants shall designate and from time to time may redesignate
their Beneficiary or Beneficiaries of the benefits described in this Article IX
in such form and manner as the Administrative Committee may determine. A
Participant shall be deemed to have named his Surviving Spouse, if any, as his
sole Beneficiary unless his Spouse consents to the payment of all or a
specified portion of the Participant's benefit to a Beneficiary other than or
in addition to the Surviving Spouse in a manner satisfying the requirements of
a Qualified Spousal Waiver and such other procedures as the Administrative
Committee may establish. Notwithstanding the foregoing, a married Participant
may designate a non-Spouse Beneficiary without a Qualified Spousal Waiver
(unless otherwise required by a qualified domestic relations order) if the
Participant establishes to the satisfaction of the Administrative Committee:
(i) that he has no Spouse or that his Spouse cannot be located; (ii) that he is
legally separated from his Spouse or that he has been abandoned by his Spouse
(within the meaning of local law) and he has a court order to such effect; or
(iii) that such other permissible circumstances exist as the Secretary of the
Treasury may by regulations prescribe.
50
<PAGE>
(b) No Designation or Designee Dead or Missing. In the
event that:
(1) a Participant dies without designating a
Beneficiary;
(2) the Beneficiary designated by a Participant
is not surviving when a payment is to be made to such person under the
Plan, and no contingent Beneficiary has been designated; or
(3) the Beneficiary designated by a Participant
cannot be located by the Administrative Committee within 1 year after
the date benefits are to commence to such person;
then, in any of such events, the Beneficiary of such Participant with respect
to any benefits that remain payable under this Article IX shall be the
Participant's Surviving Spouse, if any, and if not, then the estate of the
Participant.
9.7 Claims.
(a) Procedure. Claims for benefits under the Plan may be
filed with the Administrative Committee on forms supplied by the Administrative
Committee. The Administrative Committee shall furnish to the claimant written
notice of the disposition of a claim within 90 days after the application
therefor is filed; provided, if special circumstances require an extension of
time for processing the claim, the Administrative Committee shall furnish
written notice of the extension to the claimant prior to the end of the initial
90-day period, and such extension shall not exceed one additional, consecutive
90-day period. In the event the claim is denied, the notice of the disposition
of the claim shall provide the specific reasons for the denial, cites of the
pertinent provisions of the Plan, and, where appropriate, an explanation as to
how the claimant can perfect the claim and/or submit the claim for review.
(b) Review Procedure. Any Participant or Beneficiary who
has been denied a benefit, or his duly authorized representative, shall be
entitled, upon request to the Administrative Committee, to appeal the denial of
his claim. The claimant or his duly authorized representative may review
pertinent documents related to the Plan and in the Administrative Committee's
possession in order to prepare the appeal. The form containing the request for
review, together with a written statement of the claimant's position, must be
filed with the Administrative Committee no later than 60 days after receipt of
the written notification of denial of a claim provided for in subsection (a)
hereof. The Administrative Committee's decision shall be made within 60 days
following the filing of the request for review and shall be communicated in
writing to the claimant; provided, if special circumstances require an
extension of time for processing the appeal, the Administrative Committee shall
furnish written notice to the claimant prior to the end of the initial 60-day
period, and such an extension shall not exceed one additional 60-day period. If
unfavorable, the notice of decision shall explain the reason or reasons for
denial and indicate the provisions of the Plan or other documents used to
arrive at the decision.
51
<PAGE>
(c) Satisfaction of Claims. Any payment to a Participant
or Beneficiary, or to his legal representative or heirs at law, all in
accordance with the provisions of the Plan, shall to the extent thereof be in
full satisfaction of all claims hereunder against the Trustee, the
Administrative Committee, and the Participating Companies, any of whom may
require such Participant, Beneficiary, legal representative or heirs at law, as
a condition to such payment, to execute a receipt and release therefor in such
form as shall be determined by the Trustee, the Administrative Committee or the
Participating Companies, as the case may be. If receipt and release shall be
required but execution by such Participant, Beneficiary, legal representative or
heirs at law shall not be accomplished so that the terms of Section 9.l(b)
(dealing with the timing of distributions) may be fulfilled, such benefits may
be distributed or paid into any appropriate court or to such other place as such
court shall direct, for disposition in accordance with the order of such court,
and such distribution shall be deemed to comply with the requirements of Section
9.1(b).
9.8 Explanation of Rollover Distributions.
Within a reasonable period of time [as defined for purposes
of Code Section 402(f)] before making an Eligible Rollover Distribution (which
may include certain withdrawals permitted under Article X hereof) from the Plan
to a Participant or Beneficiary, the Administrative Committee shall provide
such Participant or Beneficiary with a written explanation of (i) the
provisions under which the distributee may have the distribution directly
transferred to another Eligible Retirement Plan, (ii) the provisions which
require the withholding of tax on the distribution if it is not directly
transferred to another Eligible Retirement Plan, (iii) the provisions under
which the distribution will not be subject to tax if transferred to an Eligible
Retirement Plan within 60 days after the date on which the distributee receives
the distribution, and (iv) such other terms and provisions as may be required
under Code Section 402(f) and the regulations promulgated thereunder.
9.9 Unclaimed Benefits.
In the event a Participant or Beneficiary becomes entitled to
a distribution from the Plan and the Administrative Committee is unable to
locate such Participant or Beneficiary after such diligent efforts as the
Administrative Committee in its sole discretion deems appropriate, then the
full Account of the Participant or Beneficiary shall be deemed abandoned and
treated as a Forfeiture; provided, in the event such Participant or Beneficiary
is located or makes a claim subsequent to the allocation of the abandoned
Account, the amount of such abandoned Account (unadjusted for any investment
gains or losses from the time of abandonment) shall be restored (from abandoned
Accounts, Forfeitures, Trust earnings or Contributions made by the
Participating Companies) to such Participant or Beneficiary, as appropriate.
52
<PAGE>
9.10 Recordkeeper Transition Rule.
For purposes of effectuating a change in the Plan's
recordkeeper, and notwithstanding anything contained in this Article IX to the
contrary, the Administrative Committee may designate a period during which no
distributions shall be permitted.
53
<PAGE>
ARTICLE X
WITHDRAWALS AND LOANS
10.1 Hardship Withdrawals.
(a) Parameters of Hardship Withdrawals. A Participant
who is an Employee of an Affiliate may make, on account of hardship, a
withdrawal from his Account in an amount up to, but not exceeding, the total of
(i) 50 percent of his vested Matching Account balance, and (ii) 100% of his
Rollover and Before-Tax Account balance, other than earnings attributable to
Before-Tax Contributions earned after December 31, 1988. For purposes of this
subsection, a withdrawal will be on account of "hardship" if it is necessary to
satisfy an immediate and heavy financial need of the Participant. A withdrawal
based on financial hardship cannot exceed the amount necessary to meet the
immediate financial need created by the hardship and not reasonably available
from other resources of the Participant. The Administrative Committee shall
make its determination as to whether a Participant has suffered an immediate
and heavy financial need and whether it is necessary to use a hardship
withdrawal from the Plan to satisfy that need on the basis of all relevant
facts and circumstances. The minimum amount of any hardship withdrawal shall be
$1,000 or such lesser amount established from time to time in a
nondiscriminatory manner by the Administrative Committee.
(b) Immediate and Heavy Financial Need. For purposes of
the Plan, an immediate and heavy financial need exists if the withdrawal is on
account of (i) expenses for medical care described in Code Section 213(d)
previously incurred by the Participant, his Spouse or dependents, or necessary
to obtain such medical care for such persons, (ii) the purchase (excluding
mortgage payments) of a principal residence for the Participant, (iii) the
payment of tuition and related educational fees and room and board expenses for
the next 12 months of post-secondary education for the Participant, his Spouse
or dependents, (iv) the need to prevent eviction of the Participant from his
principal residence or foreclosure on the mortgage of the Participant's
principal residence, (v) the payment of funeral expenses for a member of the
Participant's immediate family (that is, his parent, step-parent, father-in-law
or mother-in-law, grandparent, brother or sister, half-brother or half-sister,
step-brother or step-sister, Spouse, child, step-child or grandchild), (vi) the
payment of federal income taxes with respect to the Participant's individual
income tax returns for the two most recently ended tax years (including
penalties and interest), (vii) the payment of legal fees and expenses incurred
as a direct result of the adoption of a child by the Participant, and (viii)
the payment of uninsured costs for repairs to the Participant's principal
residence as a result of unforeseen damages caused by a natural disaster or
accident.
(c) Necessary to Satisfy a Financial Need. In
determining whether the withdrawal is necessary to relieve the Participant's
immediate and heavy financial need, the Administrative Committee shall rely
upon the Participant's reasonable representation that the need cannot be
relieved: (i) through reimbursement or compensation by insurance or otherwise;
(ii) by reasonable liquidation of the Participant's assets to the extent that
liquidation would not itself cause an immediate and heavy financial need; (iii)
by cessation of Before-Tax Contributions to the Plan; or (iv) by other
distributions or nontaxable (at the time of the loan) loans from plans
maintained by one or more Participating Companies or by borrowing from
commercial sources on reasonable commercial terms. In determining the amount of
a
54
<PAGE>
Participant's assets, the resources of his Spouse and minor dependents are
considered to be reasonably available to the Participant unless they are held
for his child or children under an irrevocable trust or under the Uniform Gifts
to Minors Act. The amount of an immediate and heavy financial need may include
amounts necessary for the Participant to pay any federal, state of local taxes
which are reasonably anticipated to result from the hardship withdrawal.
(d) Form of Distribution. Subject to the election of a
Participant, any hardship withdrawal may be paid entirely in cash or entirely
in whole shares of Company Stock (with any portion of the withdrawal
reprocessed by a fractional share being paid in cash).
(e) Source of Funds. The amount of a Participant's
hardship withdrawal shall be charged first against his Rollover Account, then
against his Matching Account, and then against his Before-Tax Account.
10.2 Age 65 Withdrawals.
(a) Conditions. A Participant who has attained age 65
and is an Employee of an Affiliate may request a withdrawal of all or part of
his Account. A Participant may request two such withdrawals during any
12-consecutive-month period.
(b) Source of Funds. The amount of such withdrawal shall
be charged first against his Rollover Account, then against his Matching
Account, and then against his Before-Tax Account, and shall be charged
pro-rata against the Investment Funds in which such Accounts are invested.
(c) Method. A withdrawal described in this Section 10.2
shall be paid in the form of a single-sum distribution which shall, except as
otherwise provided herein, be paid in cash. To the extent that a portion of a
Participant's Account that is to be withdrawn is invested in Company Stock,
such withdrawal shall be made in the form of Company Stock or cash, at the
election of the Participant.
10.3 Rollover Account Withdrawals.
A Participant may request a withdrawal of all or part of his
Rollover Account. A withdrawal under this Section 10.3 shall be paid in the
form of a single-sum distribution which shall, except as otherwise provided
herein, be paid in cash. To the extent that a portion of a Participant's
Account that is to be withdrawn is invested in Company Stock, such withdrawal
shall be made in the form of Company Stock or cash, at the election of the
Participant.
10.4 Election to Withdraw.
All applications for withdrawals shall be in writing on a
form provided by the Administrative Committee and shall contain such
information and be made at such time as the Administrative Committee may
reasonably request. Any application for a withdrawal must be submitted to the
Administrative Committee (or its delegatee) in accordance with procedures
established under the Plan prior to the payment date of such withdrawal.
55
<PAGE>
10.5 Payment of Withdrawal.
The amount of any withdrawal under Sections 10.1, 10.2 or
10.3 shall be paid to a Participant in a single-sum payment as soon as
practicable after the Administrative Committee receives and approves a properly
completed withdrawal application. At the time of making any withdrawals for a
Participant, his Account may be charged with any administrative expenses (such
as check processing fees) specifically allocable against his Account pursuant
to the policies of the Administrative Committee. Any withdrawal shall be
treated as a payment of benefits under Articles IX and X and all of the
requirements of those Articles.
10.6 Distributions and Withdrawals from Transfer Accounts.
If the assets and benefits of a Prior Plan, which (i) allows
Code Section 41l(d)(6) protected in-service withdrawals (other than those
permitted in Section 10.1, 10.2 and 10.3) and/or (ii) allows one or more Code
Section 411(d)(6) protected forms of distribution not generally permitted
hereunder are transferred to or merged into the Plan, the Participants who have
Transfer Accounts reflecting the accrued benefits subject to such protected
withdrawals and forms of distribution under that Prior Plan shall be permitted
to withdraw, and/or receive distributions of, all or a portion of the amounts
from the subject Transfer Accounts in a manner and subject to rules and
restrictions, similar to those provided under the Prior Plan such that the Plan
will comply with the requirements of Code Section 41l(d)(6). The terms and
conditions of any such withdrawals, as well as other pertinent rules and
provisions relating to the transfer of such assets to the Plan, shall be set
forth on a schedule hereto.
10.7 Loans to Participants.
(a) Grant of Authority. Loans to Participants,
Beneficiaries and alternate payees who are parties-in-interest as defined in
Section 3(14) of ERISA generally shall be allowed; provided, if the
Administrative Committee determines in its sole discretion that it is not
administratively feasible or desirable to make such loans during any period of
time, no loans shall be made during such period. Subject to the limitations set
forth in this Section and to such uniform and nondiscriminatory rules as may
from time to time be adopted by the Administrative Committee and set forth in a
written policy statement which hereby is incorporated by reference, the
Trustee, upon proper application by an eligible Participant, Beneficiary or
alternate payee on forms approved by the Administrative Committee, may make a
loan or loans to the borrower.
(b) Nondiscriminatory Policy. Loans shall be available
to all Participants, Beneficiaries and alternate payees who are
parties-in-interest as defined in Section 3(14) of ERISA on a reasonably
equivalent basis, without regard to an individual's race, color, religion, age,
sex or national origin. Loans shall not be made available to borrowers who are
Highly Compensated Employees in an amount greater than the amount available to
other borrowers; provided, this limitation shall be interpreted to mean that,
subject to the other limitations in this Section, the same percentage of each
borrower's vested Account balance may be loaned to each such borrower
regardless of the actual amount of his vested Account balance.
56
<PAGE>
(c) Minimum Loan Amount. The minimum amount of any loan
shall be the amount established by the Administrative Committee in the written
loan policy statement, but such minimum may not be more than $1,000.
(d) Maximum Loan Amount. The Administrative Committee
will designate in the written loan policy statement the maximum number of loans
that may be outstanding at any time. In addition, no loan may be made to any
borrower from the Plan if the amount of such loan exceeds the lesser of (i) the
limit established by the Administrative Committee, or (ii) the lesser of:
(1) $50,000 minus the highest aggregate
principal balance, outstanding during the year ending on the day
before such loan is made, of all loans made to the borrower by the
qualified employer plans [as defined in Code Section 72(p)(4)(A)]
maintained by the Affiliates;
(2) the difference between (A) 50 percent of
the borrower's total vested interest in the Plan and all other
qualified employer plans maintained by the Affiliates, minus (B) the
total amount of all loans outstanding on the date the loan is made
from all qualified employer plans maintained by the Affiliates; or
(3) 50 percent of the borrower's vested Account
balance immediately after the origination of the loan.
(e) Maximum Loan Term.
(1) Except as provided in subsections (e)(2)
and (1) hereof, the terms of any loan made from the Plan shall require
that the full amount of the loan be repaid within the 5-year period
(or such other shorter maximum term as the Administrative Committee
may establish in its written loan policy statement) commencing on the
date the loan is made, and in no event shall the repayment period of
the loan subsequently be extended beyond such 5-year period. The
Trustee shall make a diligent effort to collect the full amount of the
loan within this specified repayment period and shall inform the
borrower that, in the event the loan is not fully repaid within the
5-year period, the borrower will be treated as having received a
taxable distribution from the Plan.
(2) The 5-year repayment rule set forth in
subsection (e)(l) hereof shall not apply to the extent that a loan is
used to acquire any dwelling unit which is used, or within a
reasonable time is to be used, as a principal residence of the
borrower, and the Administrative Committee shall specify the maximum
loan term for any such residential purchase loan in its written loan
policy statement. Whether a dwelling unit is to be used within a
reasonable time as a principal residence is to be determined by the
Administrative Committee at the time the loan is made, and the
Administrative Committee may require such written statements and other
evidence from the borrower as it deems necessary to make this
determination. Loans made with respect to principal residences
pursuant to this subsection shall be repaid within a 15-year period
(or such shorter maximum time as the Administrative Committee may
establish in its written loan policy statement).
57
<PAGE>
(f) Terms of Repayment. All loans shall be subject to a
definite repayment schedule which requires substantially level amortization
over the term of the loan with payments to be made not less frequently than
quarterly (and more frequently if required by the Administrative Committee's
written loan policy statement). Unless the Administrative Committee provides
for different methods in its written loan policy statement, payments shall be
made by Participants who are Employees of Affiliates on a payroll deduction
basis, and payments from other borrowers shall be made by cash, check or other
cash equivalent.
(g) Adequacy of Security. All loans shall be secured by
the pledge of a dollar amount of the borrower's Account balance (i) which is
not less than the principal amount of the loan plus an additional amount, if
any, which the Administrative Committee, pursuant to its written loan policy
statement, deems desirable to secure payment of interest accruing on the loan,
and (ii) which in no event (when aggregated for all outstanding loans) is
greater than 50 percent of the borrower's vested Account balance immediately
after the origination of the loan. Notwithstanding anything herein to the
contrary, the pledge of such security shall be made in such manner and amount
as the Administrative Committee, pursuant to its written loan policy statement,
may require for the loan to be considered adequately secured. A loan will be
considered to be "adequately secured" if the security posted for such loan is
in addition to and supporting a promise to pay, if it is pledged in a manner
such that it may be sold, foreclosed upon, or otherwise disposed of upon
default of repayment of the loan, and if the value and liquidity of that
security is such that it may reasonably be anticipated that loss of principal
or interest will not result from the loan. The adequacy of such security will
be determined in light of the type and amount of security which would be
required in the case of an otherwise identical transaction in a normal
commercial setting between unrelated parties on arm's-length terms. During the
period that a loan is outstanding, if a Participant becomes eligible to receive
a withdrawal or a distribution, the amount of such Participant's Account which
he shall be eligible to receive through withdrawal or distribution shall not
exceed that amount which will reduce such Participant's Account balance below
the principal amount then outstanding on such loan.
(h) Rate of Interest. A loan from the Plan must bear a
reasonable rate of interest. A loan will be considered to bear "a reasonable
rate of interest" if such loan provides the Plan with a return commensurate
with interest rates charged by persons in the business of lending money for
loans which would be made under similar circumstances. In general, the
Administrative Committee's decision as to the rate of interest for any Plan
loan shall be based primarily on the rate of interest that one or more local
banks or other lending institutions would charge on a similar loan, taking into
account, among other things, the collateral pledged to secure the loan.
(i) Source of Loan Amounts. The proceeds of a loan shall
be charged against the Accounts of the borrower in the manner described by the
Administrative Committee in its loan policy statement.
58
<PAGE>
(j) Crediting Loan Payments to Accounts. The loan shall
be considered a directed investment of the borrower, and any principal and
interest paid on the loan shall be considered a part of his total Account. Each
payment of principal and interest shall be credited to the Investment Funds and
subaccounts of the Participant's Account in the manner described by the
Administrative Committee in its loan policy statement.
(k) Remedies in the Event of Default. If any loan
payments are not paid as and when due or within such period as the
Administrative Committee may prescribe in its loan policy statement, the
Administrative Committee may declare the loan to be in default. The
Administrative Committee may take such actions, as it deems appropriate in
accordance with its written loan policy statement, to allow the borrower to
cure such default or to otherwise collect such overdue payments or, as the case
may be, the outstanding balance of the loan. Among other things, the
Administrative Committee's actions may include causing all or any portion of
the borrower's Account which has been pledged to secure the loan to be used to
repay such loan; provided, although the Administrative Committee may treat any
portion of the loan balance that remains outstanding after a default as taxable
income to the borrower in accordance with the terms of Code Section 72(p), no
portion of such outstanding loan balance may be treated as a reduction of a
Participant's Account balance until such time as such reduction, if treated as
a distribution, will not breach the special distribution restrictions of Code
Section 401(k)(2)(B).
(l) Qualified Military Service. Loan repayments may be
suspended under this Plan as permitted under Code Section 414(u)(4), under
applicable Treasury Regulations, and as provided in the written loan policy
statement.
10.8 Transition Rule.
For purposes of effectuating a change in the Plan's
recordkeeper, and notwithstanding anything contained in this Article X to the
contrary, the Administrative Committee may designate a period during which no
withdrawals or loans shall be permitted.
59
<PAGE>
ARTICLE XI
ADMINISTRATION
11.1 Administrative Committee; Appointment and Term of Office.
(a) Appointment. The Administrative Committee shall
consist of the Administrative Committee of The Home Depot FutureBuilder or such
other Committee as is appointed by the Home Depot Board.
(b) Certification. A written certification shall be
given to the Trustee by the Senior Human Resources Officer of Home Depot of all
members of the Administrative Committee together with a specimen signature of
each member. For all purposes hereunder, the Trustee shall be conclusively
entitled to rely upon such certification until the Trustee is otherwise
notified in writing.
11.2 Organization of Administrative Committee.
The Administrative Committee may elect a Chairman and a
Secretary from among its members. In addition to those powers set forth
elsewhere in the Plan, the Administrative Committee may appoint such agents,
who need not be members of such Administrative Committee, as it may deem
necessary for the effective performance of its duties and may delegate to such
agents such powers and duties, whether ministerial or discretionary, as the
Administrative Committee may deem expedient or appropriate. The compensation of
such agents who are not full-time Employees of a Participating Company shall be
fixed by the Administrative Committee and shall be paid by the Controlling
Company (to be divided equitably among the Participating Companies) or from the
Trust Fund as determined by the Administrative Committee. The Administrative
Committee shall act by majority vote or by resolutions signed by a majority of
the Administrative Committee members. Its members shall serve as such without
compensation.
11.3 Powers and Responsibility.
The Administrative Committee shall fulfill the duties of
"administrator" as set forth in Section 3(16) of ERISA and shall have complete
control of the administration of the Plan hereunder, with all powers necessary
to enable it properly to carry out its duties as set forth in the Plan and the
Trust Agreement. The Administrative Committee shall have the following duties
and responsibilities:
(a) to construe the Plan and to determine all questions
that shall arise thereunder;
(b) to have all powers elsewhere herein conferred upon
it;
(c) to decide all questions relating to the eligibility
of Employees to participate in the benefits of the Plan;
(d) to determine the benefits of the Plan to which any
Participant or Beneficiary may be entitled;
60
<PAGE>
(e) to maintain and retain records relating to
Participants and Beneficiaries;
(f) to prepare and furnish to Participants all
information required under federal law or provisions of the Plan to be
furnished to them;
(g) to prepare and furnish to the Trustee sufficient
employee data and the amount of Contributions received from all sources so that
the Trustee may maintain separate accounts for Participants and Beneficiaries
and make required payments of benefits;
(h) to prepare and file or publish with the Secretary of
Labor, the Secretary of the Treasury, their delegates and all other appropriate
government officials all reports and other information required under law to be
so filed or published;
(i) as permitted in the Trust Agreement, to provide
directions to the Trustee with respect to methods of benefit payment, and all
other matters where called for in the Plan or requested by the Trustee;
(j) to engage assistants and professional advisers;
(k) to arrange for fiduciary bonding;
(1) to provide procedures for determination of claims
for benefits; and
(m) to delegate any recordkeeping or other administerial
duties hereunder to any other person or third-party;
all as further set forth herein.
11.4 Records of Administrative Committee.
(a) Notices and Directions. Any notice, direction,
order, request, certification or instruction of the Administrative Committee to
the Trustee shall be in writing and shall be signed by a member of the
Administrative Committee. The Trustee and every other person shall be entitled
to rely conclusively upon any and all such proper notices, directions, orders,
requests, certifications and instructions received from the Administrative
Committee and reasonably believed to be properly executed, and shall act and be
fully protected in acting in accordance with any such directions that are
proper.
(b) Records. All acts and determinations of the
Administrative Committee shall be duly recorded by its Secretary or under his
supervision, and all such records (including records necessary to demonstrate
compliance with the nondiscrimination requirements of the Code), together with
such other documents as may be necessary for the administration of the Plan,
shall be preserved in the custody of such Secretary.
11.5 Delegation.
The Administrative Committee shall have the power to delegate
specific fiduciary, administrative and ministerial responsibilities (other
than Trustee responsibilities).
61
<PAGE>
Such delegations may be to officers or Employees of a Participating Company or
to other persons, all of whom shall serve at the pleasure of the Administrative
Committee. References in the Plan to the Administrative Committee are deemed to
include any person authorized to act on its behalf pursuant to this Section and
Section 12.6.
11.6 Reporting and Disclosure.
The Administrative Committee shall keep all individual and
group records relating to Participants and Beneficiaries and all other records
necessary for the proper operation of the Plan. Such records shall be made
available to the Participating Companies and to each Participant and
Beneficiary for examination during normal business hours except that a
Participant or Beneficiary shall examine only such records as pertain
exclusively to the examining Participant or Beneficiary and the Plan and Trust
Agreement. The Administrative Committee shall prepare and shall file as
required by law or regulation all reports, forms, documents and other items
required by ERISA, the Code and every other relevant statute, each as amended,
and all regulations promulgated thereunder. This provision shall not be
construed as imposing upon the Administrative Committee the responsibility or
authority for the preparation, preservation, publication or filing of any
document required to be prepared, preserved or filed by the Trustee or by any
other Named Fiduciary to whom such responsibilities are delegated by law or by
the Plan.
11.7 Construction of the Plan.
The Administrative Committee shall take such steps as are
considered necessary and appropriate to remedy any inequity that results from
incorrect information received or communicated in good faith or as the
consequence of an administrative error. Such remedial steps may include, but
are not limited to, taking any voluntary corrective action under any correction
program available through the Internal Revenue Service, Department of Labor or
other administrative agency. The Administrative Committee, in its sole and full
discretion, shall interpret the Plan and shall determine the questions arising
in the administration, interpretation and application of the Plan. The
Administrative Committee shall endeavor to act, whether by general rules or by
particular decisions, so as not to discriminate in favor of or against any
person and so as to treat all persons in similar circumstances uniformly. The
Administrative Committee shall correct any defect, reconcile any inconsistency
or supply any omission with respect to the Plan.
11.8 Assistants and Advisors.
(a) Engaging Advisors. The Administrative Committee
shall have the right to hire, at the expense of the Controlling Company (to be
divided equitably among the Participating Companies), such professional
assistants and consultants as it, in its sole discretion, deems necessary or
advisable. To the extent that the costs for such assistants and advisors are
not so paid by the Controlling Company, they shall be paid at the direction of
the Administrative Committee from the Trust Fund as an expense of the Trust
Fund.
(b) Reliance on Advisors. The Administrative Committee
and the Participating Companies shall be entitled to rely upon all certificates
and reports made by an
62
<PAGE>
accountant, attorney or other professional adviser selected pursuant to this
Section; the Administrative Committee, the Participating Companies, and the
Trustee shall be fully protected in respect to any action taken by them in good
faith in reliance upon the advice or opinion of any such accountant, attorney
or other professional adviser; and any action so taken shall be conclusive upon
each of them and upon all other persons interested in the Plan.
11.9 Investment Committee.
(a) Appointment. The Investment Committee shall consist
of the Investment Committee of The Home Depot FutureBuilder or such other
committee as is appointed by The Home Depot Board.
(b) Duties. The Investment Committee also shall carry
out the Controlling Company's responsibility and authority:
(1) To appoint one or more persons to serve as
investment manager with respect to all or part of the Plan assets,
including assets maintained under separate accounts of an insurance
company;
(2) To allocate the responsibility and
authority being carried out by the Investment Committee among the
members of the Investment Committee;
(3) To take any action appropriate to ensure
that the Plan assets are invested for the exclusive purpose of
providing benefits to Participants and their Beneficiaries in
accordance with the Plan and defraying reasonable expenses of
administering the Plan, subject to the requirements of any applicable
law; and
(4) To employ one or more persons to render
advice with respect to any responsibility or authority being carried
out by the Investment Committee. To the extent that the costs for such
assistants and advisors are not paid by a Participating Company, they
shall be paid at the direction of the Investment Committee from the
Trust Fund as an expense of the Trust Fund.
11.10 Direction of Trustee.
The Investment Committee shall have the power to provide the
Trustee with general investment policy guidelines and directions to assist the
Trustee respecting investments made in compliance with, and pursuant to, the
terms of the Plan.
11.11 Bonding.
The Administrative Committee shall arrange for fiduciary
bonding as is required by law, but no bonding in excess of the amount required
by law shall be required by the Plan.
11.12 Indemnification.
Each of the Administrative Committee and the Investment
Committee and each member of those Committees shall be indemnified by the
Participating Companies against
63
<PAGE>
judgment amounts, settlement amounts (other than amounts paid in settlement to
which the Participating Companies do not consent) and expenses, reasonably
incurred by the Committee or him in connection with any action to which the
Committee or he may be a party (by reason of his service as a member of a
Committee) except in relation to matters as to which the Committee or he shall
be adjudged in such action to be personally guilty of gross negligence or
willful misconduct in the performance of its or his duties. The foregoing right
to indemnification shall be in addition to such other rights as such Committee
or each Committee member may enjoy as a matter of law or by reason of insurance
coverage of any kind. Rights granted hereunder shall be in addition to and not
in lieu of any rights to indemnification to which such Committee or each
Committee member may be entitled pursuant to the by-laws of the Controlling
Company. Service on the Administrative or Investment Committee shall be deemed
in partial fulfillment of a Committee member's function as an Employee, officer
and/or director of the Controlling Company or any Participating Company, if he
serves in such other capacity as well.
64
<PAGE>
ARTICLE XII
ALLOCATION OF AUTHORITY AND RESPONSIBILITIES
12.1 Controlling Company and Board.
(a) General Responsibilities. The Controlling Company,
as Plan sponsor, and the Board each shall serve as a Named Fiduciary having the
following (and only the following) authority and responsibilities:
(1) To communicate such information to the
Trustee, the Administrative Committee and the Investment Committee as
each needs for the proper performance of its duties;
(2) To provide channels and mechanisms through
which the Administrative Committee and/or the Trustee can communicate
with Participants and Beneficiaries; and
(3) To terminate the Plan.
(b) Authority of Participating Companies.
Notwithstanding anything herein to the contrary, and in addition to the
authority and responsibilities specifically given to the Participating
Companies in the Plan, the Administrative Committee, in its sole discretion,
may grant the Participating Companies such authority and charge them with such
responsibilities as the Administrative Committee deems appropriate.
12.2 Administrative Committee.
The Administrative Committee shall have the authority and
responsibilities imposed by Article XI. With respect to said authority and
responsibilities, the Administrative Committee shall be a Named Fiduciary, and
as such, shall have no authority or responsibilities other than as granted in
the Plan or as imposed as a matter of law.
12.3 Investment Committee.
The Investment Committee, if any is appointed, shall be a
Named Fiduciary with respect to its authority and responsibilities, as imposed
by Article XI. The Investment Committee shall have no authority or
responsibilities other than those granted in the Plan and the Trust.
12.4 Trustee.
The Trustee shall be a fiduciary with respect to investment
of Trust Fund assets and shall have the powers and duties set forth in the
Trust Agreement.
12.5 Limitations on Obligations of Fiduciaries.
No fiduciary shall have authority or responsibility to deal
with matters other than as delegated to it under the Plan, under the Trust
Agreement or by operation of law. A fiduciary
65
<PAGE>
shall not in any event be liable for breach of fiduciary responsibility or
obligation by another fiduciary (including Named Fiduciaries) if the
responsibility or authority for the act or omission deemed to be a breach was
not within the scope of such fiduciary's authority or delegated responsibility.
12.6 Delegation.
Named Fiduciaries shall have the power to delegate specific
fiduciary responsibilities (other than Trustee responsibilities). Such
delegations may be to officers or Employees of a Participating Company or to
other persons, all of whom shall serve at the pleasure of the Named Fiduciary
making such delegation and, if full-time Employees of a Participating Company,
without compensation. Any such person may resign by delivering a written
resignation to the delegating Named Fiduciary. Vacancies created by any reason
may be filled by the appropriate Named Fiduciary or the assigned
responsibilities may be reabsorbed or redelegated by the Named Fiduciary.
12.7 Multiple Fiduciary Roles.
Any person may hold more than one position of fiduciary
responsibility and shall be liable for each such responsibility separately.
66
<PAGE>
ARTICLE XIII
AMENDMENT, TERMINATION AND ADOPTION
13.1 Amendment.
The provisions of the Plan may be amended at any time and
from time to time by the Administrative Committee; provided:
(a) No amendment shall increase the duties or
liabilities of the Trustee without the consent of such party;
(b) No amendment shall decrease the balance or vested
percentage of an Account or, except as permitted by applicable laws, eliminate
an optional form of benefit;
(c) No amendment shall be made which would divert any of
the assets of the Trust Fund to any purpose other than the exclusive benefit of
Participants and Beneficiaries, except that the Plan and Trust Agreement may be
amended retroactively and to affect the Accounts of Participants and
Beneficiaries if necessary to cause the Plan and Trust to be qualified and
exempt from taxation under the Code;
(d) No amendment shall be made which constitutes a
restatement of the Plan that significantly changes the Plan design without
approval of the Board; and
(e) No amendment shall effect any changes in the
contribution formula without approval of the Board.
13.2 Termination.
(a) Right to Terminate. The Controlling Company expects
the Plan to be continued indefinitely, but it reserves the right to terminate
the Plan or to completely discontinue Contributions to the Plan at any time by
action of the Board. In either event, the Administrative Committee, Investment
Committee, each Participating Company and the Trustee shall be promptly advised
of such decision in writing. For termination of the Plan by a Participating
Company as to itself (rather than the termination of the entire Plan), refer to
Section 13.3(e).
(b) Vesting Upon Complete Termination. If the Plan is
terminated by the Controlling Company or Contributions to the Plan are
completely discontinued, the Accounts of all Participants, Beneficiaries or
other successors in interest as of such date shall become 100 percent vested
and nonforfeitable. Upon termination of the Plan, the Administrative Committee,
in its sole discretion, shall instruct the Trustee either (i) to continue to
manage and administer the assets of the Trust for the benefit of the
Participants and their Beneficiaries pursuant to the terms and provisions of
the Trust Agreement, or (ii) to the extent permissible under applicable law,
pay over to each Participant the value of his interest in a single-sum payment
and to thereupon dissolve the Trust.
(c) Dissolution of Trust. In the event that the
Administrative Committee decides to dissolve the Trust, as soon as practicable
following the termination of the Plan or the Administrative Committee's
decision, whichever is later, the assets under the Plan shall be
67
<PAGE>
converted to cash or other distributable assets, to the extent necessary to
effect a complete distribution of the Trust assets as described herein below.
Following completion of the conversion, on a date selected by the
Administrative Committee, each individual with an Account under the Plan on
such date shall receive a distribution of the total amount then credited to his
Account. The amount of cash and other property distributable to each such
individual shall be determined as of the date of distribution (treating, for
this purpose, such distribution date as the Valuation Date as of which the
distributable amount is determined). In the case of a termination distribution
as provided herein, the Administrative Committee may direct the Trustee to take
any action provided in Section 9.9 (dealing with unclaimed benefits), except
that it shall not be necessary to hold funds for any period of time stated in
such Section. Within the expense limitations set forth in the Plan, the
Administrative Committee may direct the Trustee to use assets of the Trust Fund
to pay any due and accrued expenses and liabilities of the Trust and any
expenses involved in termination of the Plan (other than expenses incurred for
the benefit of the Participating Companies).
(d) Vesting Upon Partial Termination. In the event of a
partial termination of the Plan [as provided in Code Section 411(d)(3)], the
Accounts of those Participants and Beneficiaries affected shall become 100
percent vested and nonforfeitable and, unless transferred to another qualified
plan, shall be distributed in a manner and at a time consistent with the terms
of Article IX.
13.3 Adoption of the Plan by a Participating Company.
(a) Procedures for Participation. As of the Effective
Date, the Controlling Company and the other Affiliates listed on Schedule A
hereto shall be Participating Companies in the Plan. Any other Affiliate may
become a Participating Company and commence participation in the Plan subject
to the provisions of this subsection. In order for an Affiliate to become a
Participating Company, the Administrative Committee must designate such company
as a Participating Company and specify the effective date of such designation.
The name of any Affiliate which shall commence participation in the Plan, along
with the effective date of its participation, may be recorded in the records of
the Administrative Committee or on Schedule A hereto which may be appropriately
modified each time a Participating Company is added or deleted. To adopt the
Plan as a Participating Company, the board of directors or other managing body
of the company must approve a resolution expressly adopting the Plan for the
benefit of its eligible Employees and accepting designation as a Participating
Company, subject to all of the provisions of this Plan and of the Trust. The
resolution shall specify the date as of which the designation as a
Participating Company shall be effective. A copy of the resolution (certified
if requested) of the board of directors of the adopting Participating Company
shall be provided to the Administrative Committee. Upon adoption of the Plan by
a Participating Company as herein provided, the Employees of such company shall
be eligible to participate in the Plan subject to the terms hereof and of the
resolution of the Administrative Committee designating the adopting company as
such.
(b) Single Plan. The Plan, as adopted by all
Participating Companies, shall be considered a single plan for purposes of
Treasury Regulation Section 1.414(l)-l(b)(l). All assets contributed to the
Plan by the Participating Companies shall be held together in a single fund and
shall be available to pay benefits to all Participants and Beneficiaries.
Nothing contained herein
68
<PAGE>
shall be construed to prohibit the separate accounting of assets contributed by
the Participating Companies for purposes of cost allocation, Contributions,
Forfeitures and other purposes, pursuant to the terms of the Plan and as
directed by the Administrative Committee.
(c) Authority under Plan. As long as a Participating
Company's designation as such remains in effect, such Participating Company
shall be bound by, and subject to, all provisions of the Plan and the Trust.
The exclusive authority to amend the Plan and the Trust shall be vested in the
Administrative Committee, and no Participating Company shall have any right to
amend the Plan or the Trust. Any amendment to the Plan or the Trust adopted by
the Administrative Committee shall be binding upon every Participating Company
without further action by such Participating Company.
(d) Contributions to Plan. A Participating Company shall
be required to make Contributions to the Plan at such times and in such amounts
as specified in Articles III and VI. The Contributions made (or to be made) to
the Plan by the Participating Companies shall be allocated between and among
such companies in whatever equitable manner or amounts as the Administrative
Committee shall determine.
(e) Withdrawal from Plan. The Administrative Committee
may terminate the designation of a Participating Company, effective as of any
date. A Participating Company may withdraw from participation in the Plan, with
the approval of the Administrative Committee, by action of its board of
directors; provided, such action is communicated in writing to the
Administrative Committee. The withdrawal of a Participating Company shall be
effective as of the last day of the Plan Year in which the notice of withdrawal
is received by the Administrative Committee (unless the Controlling Company or
Administrative Committee consents to a different effective date). Any such
Participating Company which ceases to be a Participating Company shall be
liable for all costs and liabilities (whether imposed under the terms of the
Plan, the Code or ERISA) accrued, with respect to its Employees, through the
effective date of its withdrawal or termination. The withdrawing or terminating
Participating Company shall have no right to direct that assets of the Plan be
transferred to a successor plan for its Employees unless such transfer is
approved by the Controlling Company or Administrative Committee in its sole
discretion.
13.4 Merger, Consolidation and Transfer of Assets or Liabilities.
In the event of any merger or consolidation of the Plan with,
or transfer of assets or liabilities of the Plan to, any other plan, each
Participant and Beneficiary shall have a plan benefit in the surviving or
transferee plan (determined as if such plan were then terminated immediately
after such merger, consolidation or transfer of assets or liabilities) that is
equal to or greater than the benefit he would have been entitled to receive
under the Plan immediately before such merger, consolidation or transfer of
assets or liabilities, if the Plan had terminated at that time.
69
<PAGE>
ARTICLE XIV
TOP-HEAVY PROVISIONS
14.1 Top-Heavy Plan Years.
The provisions set forth in this Article XIV shall become
effective for any Plan Years with respect to which the Plan is determined to be
a Top-Heavy Plan and shall supersede any other provisions of the Plan which are
inconsistent with these provisions; provided, if the Plan is determined not to
be a Top-Heavy Plan in any Plan Year subsequent to a Plan Year in which the
Plan was a Top-Heavy Plan, the provisions of this Article XIV shall not apply
with respect to such subsequent Plan Year; and, provided further, to the extent
that any of the requirements of this Article XIV shall no longer be required
under Code Section 416 or any other Section of the Code, such requirements
shall be of no force or effect.
14.2 Determination of Top-Heavy Status.
(a) Application. The Plan will be considered a Top-Heavy
Plan for a Plan Year if either:
(1) the Plan is not part of a Required
Aggregation Group or a Permissive Aggregation Group and, as of the
Determination Date of such Plan Year, the value of the Accounts of the
Participants who are Key Employees under the Plan exceeds 60 percent
of the value of the Accounts of all Participants; or
(2) the Plan is part of a Required Aggregation
Group which, as of the Determination Date of such Plan Year, is a
Top-Heavy Group;
provided, the Plan shall not be considered a Top-Heavy Plan for a Plan Year
under subsection (a)(2) hereof if the Plan also is part of a Permissive
Aggregation Group which is not a Top-Heavy Group for such Plan Year.
(b) Special Definitions.
(1) Determination Date. The term "Determination
Date" shall mean (i) in the case of the Plan Year that includes the
original effective date of the Plan, the last day of such Plan Year,
and (ii) with respect to any other Plan Year of the Plan, the last day
of the immediately preceding Plan Year and (iii) for any plan year of
each other qualified plan maintained by a Participating Company or
Affiliate which is part of a Required or Permissive Aggregation Group,
the date determined under (i) or (ii) above as if the term "Plan Year"
means the plan year for each such other qualified plan.
(2) Key Employee. The term "Key Employee" shall
mean an Employee defined in Code Section 416(i) and the
regulations promulgated thereunder. Generally, Key Employee
shall mean an Employee, former Employee or deceased Employee
(and the beneficiaries of any such Employee) who, at any time
during the Plan Year or the 4 previous Plan Years, was
either:
70
<PAGE>
(A) an officer of an Affiliate having
a combined annual Compensation from all Affiliates
greater than 50 percent of the amount in effect
under Code Section 415(b)(l)(A) for any such Plan
Year; provided, no less than one nor more than fifty
individuals shall be treated as officers of an
Affiliate;
(B) one of the ten individuals owning
[or considered as owning under Code Section 318, as
modified by Code Section 416(i)(l)(B)(iii)] the
largest percentage ownership interests in value in
the Affiliates (as more fully described in Treasury
Regulation Section 1.416-1, T-19 and T-20) and
having a combined annual Compensation from all
Affiliates of more than the limitation in effect
under Code Section 415(c)(l)(A);
(C) a 5-percent owner [or constructive
owner within the meaning of Code Section 318, as
modified by Code Section 416(i)(l)(B)(iii)] of an
Affiliate; or
(D) a 1-percent owner [or constructive
owner within the meaning of Code Section 318, as
modified by Code Section 416(i)(l)(B)(iii) and the
regulations promulgated thereunder] of an Affiliate
having a combined annual Compensation from all
Affiliates of more than $150,000.
For purposes of subsection (B) hereof, if two individuals
have the same percentage ownership interest in an Affiliate,
the individual having greater combined annual Compensation
from all Affiliates shall be treated as having the larger
interest. In determining percentage ownership hereunder,
employers that otherwise would be aggregated under Code
Sections 414(b), (c) and (m) shall be treated as separate
employers.
(3) Non-Key Employee. The term "Non-Key
Employee" shall mean any Employee who is not a Key Employee.
For purposes hereof, former Key Employees shall be treated as
Non-Key Employees.
(4) Permissive Aggregation Group. The term
"Permissive Aggregation Group" shall mean a Required
Aggregation Group and any other qualified plan or plans
maintained or contributed to by an Affiliate which, when
considered with the Required Aggregation Group, would
continue to satisfy the requirements of Code Sections
401(a)(4) and 410.
(5) Required Aggregation Group. The term
"Required Aggregation Group" shall mean a group of plans of
the Affiliates consisting of (i) each plan which, for such
Plan Year or any of the 4 preceding Plan Years, qualifies
under Code Section 401(a) and in which a Key Employee is a
participant, and (ii) each other plan which, during this
5-year period, qualifies under Code Section 401(a) and which
enables any plan described in clause (i) hereof to satisfy
the requirements of Code Sections 401(a)(4) or 410.
71
<PAGE>
(6) Top-Heavy Group. The term "Top-Heavy Group"
shall mean a Required or Permissive Aggregation Group with
respect to which the sum (determined as of a Determination
Date) of (i) the present value of the cumulative accrued
benefits for Key Employees under all Defined Benefit Plans
included in such group, and (ii) the aggregate of the
accounts of Key Employees under all Defined Contribution
Plans included in such group, exceeds 60 percent of a similar
sum determined for all Employees.
(c) Special Rules. The following rules shall apply in
determining whether the Plan is a Top-Heavy Plan under subsection (a)(l) or
(a)(2) above:
(1) The value of any account balance under any
Defined Contribution Plan and the value of any accrued benefit under
any Defined Benefit Plan shall be determined as of the most recent
valuation date that falls within, or ends with, the 12-month period
ending on the Determination Date or, if plans are aggregated, the
Determination Dates that fall within the same calendar year;
(2) The value of the Accounts under the Plan or
the accounts under any other Defined Contribution Plan included in a
Required or Permissive Aggregation Group for any Determination Date,
other than the Determination Date for the first plan year, shall
include the amounts actually contributed and paid to the plan on or
before the Determination Date, and shall exclude any amounts to be
contributed with respect to such preceding plan year but not actually
paid to the plan on or before the Determination Date. The value of the
accounts under any Defined Contribution Plan for the Determination
Date of the first plan year shall include all amounts contributed to
the plan as of the Determination Date, regardless of whether such
amounts shall have been actually paid or merely accrued as of the
Determination Date;
(3) The value of any account balance under any
Defined Contribution Plan and the present value of any accrued benefit
under any Defined Benefit Plan as of any Determination Date shall be
increased by the aggregate distributions made under the plan
(including distributions under a terminated plan which, if it had not
been terminated, would have been included in a Required Aggregation
Group) during the 5-year period ending on the Determination Date;
(4) Accrued benefits and accounts of the
following individuals shall not be taken into account for a Plan Year:
(A) any Non-Key Employee who, in a prior Plan Year, was a Key Employee
or (B) any Employee who had not performed any services for a
Participating Company at any time during the 5-year period ending on
the Determination Date for such Plan Year;
(5) The value of any account balance shall not
include deductible employee contributions, as described in Code
Section 72(o)(5)(A);
(6) The extent to which rollovers and plan to
plan transfers are taken into account in determining the value of any
account balance or accrued benefit shall be
72
<PAGE>
determined in accordance with Code Section 416 and the regulations
promulgated thereunder; and
(7) Effective for plan years beginning after
December 31, 1986, each Non-Key Employee's accrued benefit under the
Plan and any Defined Benefit Plans shall be determined (A) under the
method, if any, that uniformly applies for accrual purposes under all
Defined Benefit Plans, or (B) if there is no such method, as if such
benefit accrued not more rapidly than the slowest accrual rate
permitted under the fractional accrual rate set forth under Code
Section 41l(b)(l)(C).
14.3 Top-Heavy Minimum Contribution.
(a) Multiple Defined Contribution Plans. For any Plan
Year in which the Plan is a Top-Heavy Plan, the aggregate company Contributions
(when added to similar contributions made under other defined contribution
plans) allocated to the Account of any Active Participant who is a Non-Key
Employee shall not be less than the Defined Contribution Minimum. To the extent
that the company Contributions are less than the Defined Contribution Minimum,
additional company Contributions shall be provided under the Plan.
For purposes hereof, a Non-Key Employee shall not fail to
receive a minimum contribution hereunder for a Plan Year because (i) such
Non-Key Employee fails to complete 1,000 Hours of Service for such Plan Year or
(ii) such Non-Key Employee is excluded from participation (or receives no
allocation) merely because his Compensation is less than a stated amount or
because he failed to make a Deferral Election for such Plan Year.
(b) Defined Contribution and Benefit Plans. In the event
that Non-Key Employees are covered under both the Plan and one or more Defined
Benefit Plans maintained by an Affiliate, the minimum contribution level set
forth in subsection (a) hereof shall be satisfied if each such Non-Key Employee
receives a benefit level under such Defined Contribution and Defined Benefit
Plans which is not less than the Defined Benefit Minimum offset by any benefits
provided under the Plan and any other Defined Contribution Plans maintained by
any Affiliate.
(c) Defined Contribution Minimum. The term "Defined
Contribution Minimum" means, with respect to the Plan, a minimum level of
company Contributions allocated with respect to a Plan Year to the Account of
each Active Participant who is a Non-Key Employee; such level being the lesser
of:
(1) 3 percent of such Active Participant's
Compensation for such Plan Year; or
(2) if no Defined Benefit Plan of an Affiliate
uses the Plan to satisfy the requirements of Code Sections 401(a)(4) or
410, the highest percentage of Compensation at which company
Contributions are made, or are required to be made, under the Plan for
such Plan Year for any Key Employee.
For purposes of this subsection, (i) qualified nonelective contributions made
by the Controlling Company in order to satisfy the anti-discrimination tests of
Code Section 401(k) or Section
73
<PAGE>
401(m) (for example, Supplemental Contributions) may be treated as company
Contributions, (ii) Before-Tax and Matching Contributions shall be taken into
account as company Contributions for Key Employees, (iii) Matching
Contributions may be treated as company Contributions and may be taken into
account for satisfying the Minimum Contribution Requirement for Non-Key
Employees, but only if such Matching Contributions are not treated as Matching
Contributions for purposes of the ADP Tests or Code Section 401(m) and instead
satisfy the requirements of Code Section 401(a)(4) as company Contributions,
and (iv) Before-Tax Contributions shall not be taken into account for
satisfying the Minimum Contribution Requirement for Non-Key Employees.
(d) Defined Benefit Minimum. The term "Defined Benefit
Minimum" means, with respect to a Defined Benefit Plan, a minimum level of
accrued benefit derived from employer contributions with respect to a plan year
for each participant who is a Non-Key Employee; such level, when expressed as
an annual retirement benefit, being not less than the product of (1) and (2),
where:
(1) equals the Non-Key Employee's average
Compensation for the period of consecutive years (not exceeding 5)
when such Non-Key Employee had the highest aggregate Compensation from
all Affiliates; and
(2) equals the lesser of (A) 2 percent times
such Non-Key Employee's number of years of service or (B) 20 percent.
For purposes of determining the Defined Benefit Minimum, "years of service"
shall not include any year of service if the plan was not a Top-Heavy Plan for
the plan year ending during such year of service and shall not include any
years of service completed in a plan year beginning before January 1, 1984.
Compensation in years before January 1, 1984, and Compensation in years after
the close of the last plan year in which the plan is a Top-Heavy Plan shall be
disregarded. All accruals of employer-provided benefits, whether or not
attributable to years for which the Plan is top heavy, may be used in
determining whether the minimum contribution requirements set forth in this
Section are satisfied.
14.4 Top-Heavy Minimum Vesting.
The vesting schedule set forth in Section 8.1 satisfies the
top-heavy minimum vesting requirements.
14.5 Construction of Limitations and Requirements.
The descriptions of the limitations and requirements set
forth in this Article are intended to serve as statements of the minimum legal
requirements necessary for the Plan to remain qualified under the applicable
terms of the Code. The Participating Companies do not desire or intend, and the
terms of this Article shall not be construed, to impose any more restrictions
on the operation of the Plan than required by law. Therefore, the terms of this
Article and any related terms and definitions in the Plan shall be interpreted
and operated in a manner which imposes the least restrictions on the Plan. For
example, if use of a more liberal definition
74
<PAGE>
of "Compensation" is permissible at any time under the law, then the more
liberal provisions may be applied as if such provisions were included in the
Plan.
75
<PAGE>
ARTICLE XV
MISCELLANEOUS
15.1 Nonalienation of Benefits and Spendthrift Clause.
(a) General Nonalienation Requirements. Except to the
extent permitted by law and as provided in subsection (b), (c) or (d) hereof,
none of the Accounts, benefits, payments, proceeds or distributions under the
Plan shall be subject to the claim of any creditor of a Participant or
Beneficiary or to any legal process by any creditor of such Participant or
Beneficiary; and neither such Participant nor Beneficiary shall have any right
to alienate, commute, anticipate or assign any of the Accounts, benefits,
payments, proceeds or distributions under the Plan except to the extent
expressly provided herein.
(b) Exception for Qualified Domestic Relations Orders.
(1) The nonalienation requirements of
subsection (a) hereof shall apply to the creation, assignment or
recognition of a right to any benefit, payable with respect to a
Participant pursuant to a domestic relations order, unless such order
is (i) determined to be a qualified domestic relations order, as
defined in Code Section 414(p), entered on or after January 1, 1985,
or (ii) any domestic relations order, as defined in Code Section
414(p), entered before January 1, 1985, pursuant to which a transferor
plan was paying benefits on January 1, 1985. The Administrative
Committee shall establish reasonable written procedures to determine
the qualified status of a domestic relations order. Further, to the
extent provided under a qualified domestic relations order, a former
spouse of a Participant shall be treated as the Spouse or Surviving
Spouse for all purposes under the Plan.
(2) The Administrative Committee shall
establish reasonable procedures to administer distributions under
qualified domestic relations orders which are submitted to it. The
Administrative Committee, to the extent provided in a qualified
domestic relations order, shall direct the Trustee to pay, in a
single-sum payment, the full amount of the benefit payable to any
alternate payee under a qualified domestic relations order. Such
cash-out payment shall be made as soon as practicable after the end of
the month within which the Administrative Committee determines that a
domestic relations order is a qualified domestic relations order, or
if later, when the terms of the qualified domestic relations order
permit such a distribution. (See also Section 9.5.) If the terms of a
qualified domestic relations order do not permit an immediate cash-out
payment, the benefits shall be paid to the alternate payee in
accordance with the terms of such order and the applicable terms of
the Plan.
(c) Exception for Loans from the Plan. All loans made by
the Trustee to any Participant or Beneficiary shall be secured by a pledge of
the borrower's interest in the Plan.
(d) Exception for Crimes against the Plan. The
nonalienation requirements of subsection (a) hereof shall not apply to any
offset of a Participant's Account, benefit, payments, proceeds or distributions
under the Plan against an amount that the Participant is ordered or required to
pay to the Plan if:
76
<PAGE>
(1) the order or requirement to pay arises, on
or after August 5, 1997, (i) under a judgment of conviction for a
crime involving the Plan; (ii) under a civil judgment (including a
consent order or decree) entered by a court in an action brought in
connection with a violation (or alleged violation) of part 4 of
subtitle B of title I of ERISA; or (iii) pursuant to a settlement
agreement between the Secretary of Labor and the Participant, or a
settlement agreement between the Pension Benefit Guaranty Corporation
and the Participant, in connection with a violation (or alleged
violation) of part 4 of such subtitle by a fiduciary or any other
person; and
(2) the judgment, order, decree, or settlement
agreement expressly provides for the offset of all or part of the
amount ordered or required to be paid to the Plan against the
Participant's benefits provided under the Plan.
15.2 Headings.
The headings and subheadings in the Plan have been inserted
for convenience of reference only and are to be ignored in any construction of
the provisions hereof.
15.3 Construction, Controlling Law.
In the construction of the Plan, the masculine shall include
the feminine and the feminine the masculine, and the singular shall include the
plural and the plural the singular, in all cases where such meanings would be
appropriate. Unless otherwise specified, any reference to a Section shall be
interpreted as a reference to a Section of the Plan. The Plan shall be
construed in accordance with the laws of the State of Georgia and applicable
federal laws.
15.4 No Contract of Employment.
Neither the establishment of the Plan, nor any modification
thereof, nor the creation of any fund, trust or account, nor the payment of any
benefits shall be construed as giving any Participant, Employee or any person
whomsoever the right to be retained in the service of any Affiliate, and all
Participants and other Employees shall remain subject to discharge to the same
extent as if the Plan had never been adopted.
15.5 Legally Incompetent.
The Administrative Committee may in its discretion direct
that payment be made and the Trustee shall make payment on such direction,
directly to an incompetent or disabled person, whether incompetent or disabled
because of minority or mental or physical disability, or to the guardian of
such person or to the person having legal custody of such person, without
further liability with respect to or in the amount of such payment either on
the part of any Participating Company, the Administrative Committee or the
Trustee.
15.6 Heirs, Assigns and Personal Representatives.
The Plan shall be binding upon the heirs, executors,
administrators, successors and assigns of the parties, including each
Participant and Beneficiary, present and future.
77
<PAGE>
15.7 Title to Assets, Benefits Supported Only By Trust Fund.
No Participant or Beneficiary shall have any right to, or
interest in, any assets of the Trust Fund upon termination of his employment or
otherwise, except as provided from time to time under the Plan, and then only
to the extent of the benefits payable under the Plan to such Participant out of
the assets of the Trust Fund. Any person having any claim under the Plan shall
look solely to the assets of the Trust Fund for satisfaction. The foregoing
sentence notwithstanding, each Participating Company shall indemnify and save
any of its officers, members of its board of directors or agents, and each of
them, harmless from any and all claims, loss, damages, expense and liability
arising from their responsibilities in connection with the Plan and from acts,
omissions and conduct in their official capacity, except to the extent that
such effects and consequences shall result from their own willful misconduct or
gross negligence.
15.8 Legal Action.
In any action or proceeding involving the assets held with
respect to the Plan or Trust Fund or the administration thereof, the
Participating Companies, the Administrative Committee and the Trustee shall be
the only necessary parties and no Participants, Employees, or former Employees,
their Beneficiaries or any other person having or claiming to have an interest
in the Plan shall be entitled to any notice of process; provided, that such
notice as is required by the Internal Revenue Service and the Department of
Labor to be given in connection with Plan amendments, termination, curtailment
or other activity shall be given in the manner and form and at the time so
required. Any final judgment which is not appealed or appealable that may be
entered in any such action or proceeding shall be binding and conclusive on the
parties hereto, the Administrative Committee and all persons having or claiming
to have an interest in the Plan.
15.9 No Discrimination.
The Controlling Company, through the Administrative
Committee, shall administer the Plan in a uniform and consistent manner with
respect to all Participants and Beneficiaries and shall not permit
impermissible discrimination in favor of Highly Compensated Employees.
15.10 Severability.
If any provisions of the Plan shall be held invalid or
unenforceable, such invalidity or unenforceability shall not affect any other
provisions hereof, and the Plan shall be construed and enforced as if such
provisions had not been included.
15.11 Exclusive Benefit; Refund of Contributions.
No part of the Trust Fund shall be used for or diverted to
purposes other than the exclusive benefit of the Participants and
Beneficiaries, subject, however, to the payment of all costs of maintaining and
administering the Plan and Trust. Notwithstanding the foregoing, Contributions
to the Trust by a Participating Company may be refunded to the Participating
Company under the following circumstances and subject to the following
limitations:
78
<PAGE>
(a) Permitted Refunds. If and to the extent permitted by
the Code and other applicable laws and regulations promulgated thereunder, upon
the Participating Company's request, a Contribution which is (i) made by a
mistake in fact, or (ii) conditioned upon the deductibility of the Contribution
under Code Section 404, shall be returned to the Participating Company making
the Contribution within 1 year after the payment of the Contribution or the
disallowance of the deduction (to the extent disallowed), whichever is
applicable.
(b) Payment of Refund. If any refund is paid to a
Participating Company hereunder, such refund shall be made without interest or
other investment gains, shall be reduced by any investment losses attributable
to the refundable amount and shall be apportioned among the Accounts of the
Participants as an investment loss, except to the extent that the amount of the
refund can be attributed to one or more specific Participants (for example, as
in the case of certain mistakes of fact), in which case the amount of the
refund attributable to each such Participant's Account shall be debited
directly against such Account.
(c) Limitation on Refund. No refund shall be made to a
Participating Company if such refund would cause the balance in a Participant's
Account to be less than the balance would have been had the refunded
contribution not been made.
15.12 Plan Expenses.
As permitted under the Code and ERISA, expenses incurred with
respect to administering the Plan and Trust shall be paid by the Trustee from
the Trust Fund to the extent such costs are not paid by the Participating
Companies or to the extent the Controlling Company requests that the Trustee
reimburse it or any other Participating Company for its payment of such
expenses. The Administrative Committee may provide for any expenses
specifically attributable to transactions involving an Account to be charged
against such Account; provided, such expenses may not reduce a Participant's
Account to an amount less than the Account balance as of the date the
Administrative Committee decides to charge such expenses against such Account.
15.13 Special Effective Dates.
(a) Intent of Plan. The Plan generally is effective as
of the Effective Date and is intended to be in compliance with current laws and
regulations, including the following laws:
(1) General Agreement on Tariffs and Trade as
amended in 1994;
(2) Uniformed Services Employment and
Reemployment Rights Act of 1994;
(3) Small Business Job Protection Act of 1996;
(4) Taxpayer Relief Act of 1997; and
(5) Internal Revenue Service Restructuring and
Reform Act of 1998.
(b) Compliance. To the extent any of the changes and
provisions described above have requisite effective dates other than the
Effective Date, the Plan shall be deemed to be
79
<PAGE>
effective as of such requisite effective dates solely for the purpose of
satisfying the applicable legal and regulatory requirements.
80
<PAGE>
IN WITNESS WHEREOF, the Plan has been executed by a duly authorized
member of the Administrative Committee on the date first written above.
ADMINISTRATIVE COMMITTEE OF THE
MAINTENANCE WAREHOUSE FUTUREBUILDER
By: /s/ Ileana L. Connally
-------------------------------------------------
Name: Ileana L. Connally
-----------------------------------------------
81
<PAGE>
THE MAINTENANCE WAREHOUSE FUTUREBUILDER
A 401(K) AND STOCK OWNERSHIP PLAN
SCHEDULE A
PARTICIPATING COMPANIES AND EFFECTIVE DATES
-------------------------------------------
[see Plan Sections 1.31, 1.59 and 13.3]
<TABLE>
<CAPTION>
Name Effective Date
- ---- --------------
<S> <C>
Maintenance Warehouse/America Corp. January 1, 2001
</TABLE>
A-1
<PAGE>
THE MAINTENANCE WAREHOUSE FUTUREBUILDER
A 401(K) AND STOCK OWNERSHIP PLAN
SCHEDULE B
SERVICE WITH PREDECESSOR EMPLOYERS
-----------------------------------------
[see Plan Sections 1.81, 1.82 and 2.1(d)]
B-l
<PAGE>
FIRST AMENDMENT TO
THE MAINTENANCE WAREHOUSE FUTUREBUILDER
(AS AMENDED AND RESTATED EFFECTIVE JANUARY 1, 2001)
THIS FIRST AMENDMENT to The Maintenance Warehouse FutureBuilder (the
"Plan") is made effective as of January 1, 2001 by the Administrative Committee
of the Plan.
WITNESSETH:
WHEREAS, Maintenance Warehouse/America Corp. maintains the Plan for
the benefit of its employees; and
WHEREAS, Section 13.1 of the Plan provides that the Administrative
Committee has the right to amend the Plan at any time; and
WHEREAS, the Administrative Committee desires to amend the Plan to
limit the amount of matching contributions made on behalf of highly compensated
employees;
NOW, THEREFORE, effective for Plan Years beginning on and after
January 1, 2001, Section 3.2(b)(1) of the Plan is amended in its entirety as
follows:
(b) Supplemental Annual Matching Contributions.
(1) General. For each Plan Year commencing on
or after January 1, 2001, for each Active Participant who (i) is not a
Highly Compensated Employee, and (ii) satisfies all of the conditions
set forth in subsection (b)(2) hereof for all periods through the last
day of such Plan Year, such Participating Company shall make a
Supplemental Annual Matching Contribution equal to 4.5 percent of such
Active Participant's Compensation for such Plan Year.
IN WITNESS WHEREOF, this First Amendment has been executed by the duly
authorized representative of the Administrative Committee as of the date first
above written.
ADMINISTRATIVE COMMITTEE OF
THE MAINTENANCE WAREHOUSE
FUTUREBUILDER
By: /s/ Ileana L. Connally
----------------------------------------
Ileana L. Connally
<PAGE>
SECOND AMENDMENT TO
THE MAINTENANCE WAREHOUSE FUTUREBUILDER
(AS AMENDED AND RESTATED EFFECTIVE JANUARY 1, 2001)
THIS SECOND AMENDMENT to The Maintenance Warehouse FutureBuilder (the
"Plan") is made this 30th day of July, 2002, by the Administrative Committee of
the Plan.
WITNESSETH:
WHEREAS, Maintenance Warehouse/America Corp. maintains the Plan for
the benefit of its employees; and
WHEREAS, Section 13.1 of the Plan provides that the Administrative
Committee has the right to amend the Plan at any time; and
WHEREAS, in order to obtain a favorable determination letter from the
Internal Revenue Service with respect to the qualified status of the Plan, the
Administrative Committee desires to amend the Plan as provided herein;
1. Section 6.3(c)(2) of the Plan is amended to read as follows:
(2) By the last day of the Plan Year following
the Plan Year in which the annual allocation failed both of
the ADP Tests, the Administrative Committee may direct the
Trustee to reduce the Before-Tax Contributions taken into
account with respect to Highly Compensated Employees under
such failed ADP Tests by the dollar amount necessary to
satisfy one of the ADP Tests. The total dollar amount by
which Before-Tax Contributions shall be reduced shall be
determined by hypothetically reducing contributions made on
behalf of Highly Compensated Employees in order of individual
Actual Deferral Percentages, beginning with the highest
Actual Deferral Percentage. Notwithstanding the method of
determining the total dollar amount of such reductions,
actual reductions in Before-Tax Contributions shall be made
in accordance with, and solely from the Accounts of those
Highly Compensated Employees who are affected by, the
following procedure:
(A) First, the Before-Tax Contributions
of the Highly Compensated Employee(s) with the
highest dollar amount of Before-Tax Contributions for
such Plan Year shall be reduced by the lesser of (i)
the entire amount of required reductions determined
as described above, or (ii) that part of such amount
as shall cause the amount of Before-Tax Contributions
of each such Highly Compensated Employee to equal the
amount of Before-Tax Contributions of each of the
Highly Compensated Employees with the next highest
dollar amount of Before-Tax Contributions for such
Plan Year. In addition, to the extent that a Highly
<PAGE>
Compensated Employee's Before-Tax Contributions are
reduced pursuant to this Section, any Matching
Contributions made on behalf of a Highly Compensated
Employee which are attributable to the distributed
Before-Tax Contributions shall be forfeited.
(B) Substantially identical steps
shall be followed for making further reductions in
the Before-Tax Contributions of each of the Highly
Compensated Employees with the next highest dollar
amount of Before-Tax Contributions for such Plan
Year until the entire required reduction has been
made.
(C) Any amount by which Before-Tax
Contributions are so reduced, plus any earnings
attributable thereto (including in the
Administrative Committee's discretion any gap income
or loss), shall be distributed to the Highly
Compensated Employees from whose Before-Tax Accounts
such reductions shall have been made.
2. Section 6.4(c)(2) of the Plan is amended to read as follows:
(2) By the last day of the Plan Year following
the Plan Year in which the annual allocation failed both of
the ACP Tests, the Administrative Committee may direct the
Trustee to reduce after-tax and/or the Matching Contributions
taken into account with respect to Highly Compensated
Employees under such failed ACP Tests by the dollar amount
necessary to satisfy one of the ACP Tests. The total dollar
amount by which Contributions shall be reduced shall be
determined by hypothetically reducing contributions made on
behalf of Highly Compensated Employees in order of individual
Actual Contribution Percentages, beginning with the highest
Actual Contribution Percentage. Notwithstanding the method of
determining the total dollar amount of such reductions,
actual reductions in Contributions shall be made in
accordance with, and solely from the Accounts of those Highly
Compensated Employees who are affected by, the following
procedure:
(A) First, the after-tax and Matching
Contributions of the Highly Compensated Employee(s)
with the highest dollar amount of after-tax and
Matching Contributions for such Plan Year shall be
reduced by the lesser of (i) the entire dollar
amount necessary to satisfy one of the ACP Tests
(determined as described above), or (ii) that part
of the entire amount necessary to satisfy one of the
ACP Tests as shall cause the dollar amount of
after-tax and Matching Contributions of each such
Highly Compensated Employee to equal the amount of
after-tax and Matching Contributions of each of the
Highly Compensated Employees with the next highest
dollar amount of after-tax and Matching
Contributions for such Plan Year. If the total
amount of the
<PAGE>
required reduction in a Highly Compensated
Employee's after-tax and Matching Contributions is
less than the total amount of such Contributions,
the required reductions first shall be charged
against such Highly Compensated Employee's after-tax
Contributions until they are exhausted and then
against his remaining Matching Contributions.
(B) Substantially identical steps shall be
followed for making further reductions in the
after-tax and Matching Contributions of each of the
Highly Compensated Employees with the next highest
dollar amount of after-tax and Matching
Contributions for such Plan Year until one of the
ACP Tests has been satisfied.
(C) Any amount by which after-tax
Contributions are reduced, plus any earnings
attributable thereto (including in the
Administrative Committee's discretion any gap income
or loss), shall be distributed to the Highly
Compensated Employees from whose Accounts such
reductions have been made. If these distributions
are less than the required reductions, the amount by
which Matching Contributions are to be reduced, plus
any earnings attributable thereto, shall be
forfeited; provided, if the Matching Contributions
to be reduced are vested and therefore may not be
forfeited, those Matching Contributions, plus any
earnings attributable thereto (including in the
Administrative Committee's discretion any gap income
or loss) shall be distributed to the Highly
Compensated Employees from whose Matching Accounts
such reductions have been made.
3. Section 9.1(b)(4) is amended to read as follows:
(4) Notwithstanding anything in the Plan to the
contrary, commencing with the original effective date of the
Plan, the Participant's Account shall be distributed (or
commenced) no later than the April 1 following the later of
(i) the calendar year in which the Participant attains age
70-1/2, or (ii) the calendar year in which the Participant
actually separates from service with all Affiliates;
provided, if such Participant is a 5 percent owner (as
defined in Code Section 416), or if such Participant attains
age 70-1/2 prior to January 1, 1999 and so elects, benefit
payments shall be made (or commence) no later than the April
1 following the calendar year in which the Participant
attains age 70-1/2. Unless a Participant whose minimum
distributions begin while he is still employed elects to take
a distribution of his entire Account balance, his benefits,
payable under this Article IX commencing as of his required
beginning date, shall be paid in the form of substantially
equal monthly payments over a period equal to the life
expectancy of the Participant. All distributions will be made
in accordance with Code Section 401(a)(9) and the regulations
thereunder,
<PAGE>
including Treasury Regulation Section 1.401(a)(9)-2 (relating
to incidental benefit limitations; and the terms of the Plan
reflecting the requirements of Code Section 401(a)(9)
override the distribution options (if any) in the Plan which
are inconsistent with those requirements. The life expectancy
of a Participant will be recalculated annually.
IN WITNESS WHEREOF, the Company has caused its duly authorized officer
to execute this Second Amendment on the date first above written.
MAINTENANCE WAREHOUSE/AMERICA
CORP.
By: /s/ Lawrence Appel
----------------------------------------
Title: Assistant Secretary
-------------------------------------
<PAGE>
THIRD AMENDMENT TO
THE MAINTENANCE WAREHOUSE FUTUREBUILDER
(AS AMENDED AND RESTATED EFFECTIVE JANUARY 1, 2001)
THIS AMENDMENT to The Maintenance Warehouse FutureBuilder (the "Plan")
is made on this 20th day of December, 2002, by the Administrative Committee of
the Plan.
WITNESSETH:
WHEREAS, Maintenance Warehouse/America Corp. (the "Company") maintains
the Plan for the benefit of its employees; and
WHEREAS, Section 13.1 of the Plan provides that the Administrative
Committee has the authority to amend the Plan at any time; and
WHEREAS, the Administrative Committee desires to amend the Plan (i) to
reflect certain provisions of the Economic Growth and Tax Relief Reconciliation
Act of 2001 ("EGTRRA") and (ii) to make such other changes as provided herein;
and
WHEREAS, this Amendment is intended as good faith compliance with the
requirements of EGTRRA and is to be construed in accordance with the terms of
EGTRRA and the guidance issued thereunder;
NOW, THEREFORE, the Plan is hereby amended as follows, effective as of
January 1, 2002, except as otherwise specified:
1. Each place the phrase "separates from service" or "separated
from service" appears in the Plan is amended to read as "severs from
employment" or "severed from employment," respectively.
2. Section 1.20(a)(2) of the Plan is amended to read as follows:
(2) Any elective deferral [as defined in Code
Section 402(g)(3)], and any amount which is contributed or deferred by
an Affiliate at the election of the Employee and which is not
includible in the gross income of the Employee by reason of Code
Section 125, 457 or 132(f)(4), including any amounts not available to
an Employee in cash in lieu of group health coverage because the
Employee is unable to certify that he has other health coverage; minus
3. Section 1.20(a)(6) of the Plan is amended to read as follows:
(6) All Compensation in excess of $200,000 [or
such other limit as is applicable for the Plan Year under Code Section
401(a)(17)].
4. Section 1.20(b) of the Plan is amended to read as follows:
<PAGE>
(b) Section 404 Compensation. Solely for
purposes of Section 6.1 (relating to maximum deductible contribution
limitations under Code Section 404), "Compensation" shall mean, with
respect to a Participant for a specified period, the amounts from all
Affiliates referred to in subsections (a)(1) and (a)(2) hereof minus
the amount described in subsection (a)(6) hereof.
5. Section 1.30 of the Plan is amended by adding the following
sentence to the end thereof:
A Participant shall be considered Disabled for purposes of the Plan
only if the Participant is an Employee on the date on which the
Participant's Disability commences.
6. Section 1.35 of the Plan is amended to read as follows:
1.35 Eligible Retirement Plan shall mean either (i) an
individual retirement account described in Code Section 408(a), (ii)
an individual retirement annuity described in Code Section 408(b)
(other than an endowment contract), (iii) a qualified trust described
in Code Section 401(a) which is a defined contribution plan the terms
of which permit the acceptance of rollover distributions, (iv) an
annuity plan described in Code Section 403(a), (v) an annuity contract
described in Code Section 403(b), or (vi) an eligible plan under Code
Section 457(b) which is maintained by a state, political subdivision
of a state or any agency or instrumentality of a state or political
subdivision of a state. This definition shall also apply in the case
of a distribution to a surviving spouse, or to a spouse or former
spouse who is the alternate payee under a qualified domestic relations
order, as defined in Code Section 414(p).
7. Section 1.36 of the Plan is amended to read as follows:
1.36 Eligible Rollover Distribution shall mean any
distribution to (i) a Participant, (ii) his Surviving Spouse (after
his death), or (iii) his Spouse or former Spouse who is his alternate
payee under a qualified domestic relations order (see Sections 9.5 and
15.1), of all or any portion of the balance to his credit in a
qualified trust (including any distribution to a Participant of all or
any portion of his Account); provided, an "Eligible Rollover
Distribution" shall not include (A) any distribution which is one of a
series of substantially equal periodic payments made, not less
frequently than annually, (x) for the life (or life expectancy) of the
Participant or the joint lives (or joint life expectancies) of the
Participant and his Beneficiary, or (y) for a specified period of 10
years or more, (B) any distribution to the extent such distribution is
required under Code Section 401(a)(9), (C) the portion of any
distribution that is not includible in gross income of the
distributee, and (D) withdrawals on account of hardship, as described
in Code Section 401(k)(2)(B)(i)(IV) and the regulations thereunder,
and (E) distributions which total less than $200 in a Plan Year.
8. Section 1.70 of the Plan is amended to read as follows:
2
<PAGE>
1.70 Rollover Contribution shall mean an amount contributed
to the Trust Fund (and received and accepted by the Trustee) which
constitutes an "eligible rollover contribution" as defined in Code
Section 402(f)(2)(A), other than an eligible rollover contribution of
after-tax employee contributions. An amount shall be treated as a
Rollover Contribution only to the extent that its acceptance by the
Trustee is permitted under the Code (including the regulations and
rulings promulgated thereunder).
9. Section 6.5 of the Plan is deleted in its entirety.
10. Section 6.7(a) of the Plan is amended to read as follows:
(a) General Limit on Annual Additions. In no
event shall the Annual Addition to a Participant's Account for any
Limitation Year, under the Plan and any other Defined Contribution
Plan maintained by an Affiliate, exceed the lesser of:
(1) $40,000 (as adjusted by the
Secretary of the Treasury under Code Section 415(d) to
reflect cost-of-living increases); or
(2) 100 percent of such Participant's
Compensation.
11. Section 9.1(b)(1) of the Plan is amended to read as follows:
(1) Except as otherwise provided in this
subsection (b)(1) or in subsections (c) and (d) hereof, benefits
payable to a Participant under this Section shall be distributed as
soon as administratively practicable following the last Business Day
of the first full calendar month following the later of (i) the date
on which the Participant affirmatively elects to receive such payment,
or (ii) the date on which the Participant's severance from employment
or Disability has been processed by the Controlling Company's payroll
system and communicated to the Plan's third-party recordkeeper (that
is, the Administrative Committee's designee for processing
distributions). In order for such Participant's election to be valid,
his election must be filed with the Administrative Committee within
the 90-day period ending on such distribution date, and the
Administrative Committee (no later than 30 days and no earlier than 90
days before such distribution date) must have presented him with a
notice informing him of his right to defer his distribution; provided,
the Participant may elect to waive the minimum 30-day notice period
and to receive his distribution before the end of such period.
12. Section 9.1(b)(2) of the Plan is amended to read as follows:
(2) Notwithstanding the foregoing provisions of
this subsection (b), in the event that the vested portion of the
Account (other than the Rollover Account) of any Participant who
severs from the employment of all Affiliates is less than or equal to
$5,000, the full vested amount of such benefit automatically shall be
paid to such Participant in one single-sum, cash-out distribution as
soon as practicable following the last Business Day of the first full
calendar month following
3
<PAGE>
the month in which the Participant severs from employment. In the
event a Participant has no vested interest in his Matching and/or
Transfer Account from company contributions at the time of his
severance from employment, he shall be deemed to have received a
cash-out distribution of such Accounts at the time of his severance
from employment, and the forfeiture provisions of Section 8.3 shall
apply.
13. Section 9.1(b) of the Plan is amended by adding the following
new subsection (6):
(6) Notwithstanding any provision of the Plan
to the contrary, with respect to distributions under the Plan made for
calendar years beginning on or after January 1, 2003, the Plan will
apply the minimum distribution requirements of Code Section 401(a)(9)
in accordance with the final regulations under Code Section 401(a)(9)
that were published in the Federal Register on April 17, 2002.
14. Section 9.1(c) of the Plan is amended to read as follows:
(c) Restrictions on Distributions from
Before-Tax and Supplemental Accounts. Notwithstanding anything in the
Plan to the contrary, (i) amounts in a Participant's Before-Tax and
Supplemental Accounts and (ii) amounts in a Participant's Transfer
Accounts credited with before-tax contributions and company
contributions used to satisfy the Code Section 401(k) actual deferral
percentage test and company contributions used to satisfy the Code
Section 401(m) actual contribution percentage test shall not be
distributable to such Participant earlier than the earliest of the
following to occur:
(1) The Participant's death,
Disability or severance from employment with all Affiliates;
(2) The termination of the Plan
without the establishment or maintenance of a successor
defined contribution plan [other than an employee stock
ownership plan as defined in Code Section 4975(e)] at the
time the Plan is terminated or within the period ending 12
months after the final distribution of all assets in all
Before-Tax, Supplemental and Transfer Accounts described
above in this subsection (c); provided, if fewer than 2
percent of the Employees who are or were eligible under the
Plan at the time of its termination are or were eligible
under another defined contribution plan at any time during
the 24-month period beginning 12 months before the time of
termination, such other plan shall not be a successor plan;
and, provided further, for an event described in this
subsection (c)(2) to constitute an event permitting a
distribution from the Before-Tax and Supplemental Accounts
(or the affected Transfer Accounts), such distribution must
be made on account of such event in the form of a lump sum
distribution, as defined in Code Section 402(e)(4)(D)
(without regard to subclauses (I), (II), (III) and (IV) of
clause (i) thereof); or
(3) The attainment by such Participant
of age 59-1/2; or
4
<PAGE>
(4) The Participant's incurrence of a
financial hardship as described in Section 10.1.
15. Section 9.1(e) of the Plan is deleted in its entirety.
16. Section 9.4 of the Plan is deleted in its entirety.
17. Section 9.7 of the Plan is amended to read as follows:
9.7 Claims.
(a) Rights. If a Participant or Beneficiary has
any grievance, complaint or claim concerning any aspect of the
operation or administration of the Plan or Trust, including but not
limited to claims for benefits and complaints concerning the
investments of Plan assets (collectively referred to herein as "claim"
or "claims"), the Participant or Beneficiary shall submit the claim in
accordance with the procedures set forth in this Section. All such
claims must be submitted within the "applicable limitations period."
The "applicable limitations period" shall be 2 years, beginning on (i)
in the case of any payment, the date on which the payment was made, or
(ii) for all other claims, the date on which the action complained of
occurred. Additionally, upon denial of an appeal pursuant to
subsection (c) hereof, a Participant or Beneficiary shall have 90 days
within which to bring suit against the Plan for any grievance
complaint or claim related to such denied appeal; any such suit
initiated after such 90-day period shall be precluded.
(b) Procedure. Claims for benefits under the
Plan may be filed with the Administrative Committee on forms supplied
by the Administrative Committee in accordance with subsection (b)(1)
or (b)(2) hereof, as applicable.
(1) Generally. Except as provided in
subsection (b)(2) hereof, the Administrative Committee shall
furnish to the claimant written notice of the disposition of
a claim within 90 days after the application therefor is
filed; provided, if special circumstances require an
extension of time for processing the claim, the
Administrative Committee shall furnish written notice of the
extension to the claimant prior to the end of the initial
90-day period, and such extension shall not exceed one
additional, consecutive 90-day period. In the event the claim
is denied, the notice of the disposition of the claim shall
provide the specific reasons for the denial, cites of the
pertinent provisions of the Plan, an explanation as to how
the claimant can perfect the claim and/or submit the claim
for review (where appropriate), and a statement of the
claimant's right to bring a civil action under ERISA Section
502(a) following an adverse determination on review.
(2) Claims Based on an Independent
Determination of Disability. With respect to a claim for
benefits under the Plan based on Disability (other than (i)
approval for payment of benefits, directly or indirectly,
under any long-term disability plan maintained by a
Participating Company, or (ii) eligibility for Social
Security disability benefits), the
5
<PAGE>
Administrative Committee shall furnish to the claimant
written notice of the disposition of a claim within 45 days
after the application therefor is filed; provided, if matters
beyond the control of the Administrative Committee require an
extension of time for processing the claim, the
Administrative Committee shall furnish written notice of the
extension to the claimant prior to the end of the initial
45-day period, and such extension shall not exceed one
additional, consecutive 30-day period; and, provided further,
if matters beyond the control of the Administrative Committee
require an additional extension of time for processing the
claim, the Administrative Committee shall furnish written
notice of the second extension to the claimant prior to the
end of the initial 30-day extension period, and such
extension shall not exceed an additional, consecutive 30-day
period. Notice of any extension under this subsection (b)(2)
shall specifically explain the standards on which entitlement
to a benefit is based, the unresolved issues that prevent a
decision on the claim, and the additional information needed
to resolve those issues. In the event the claim is denied,
the notice of the disposition of the claim shall provide the
specific reasons for the denial, cites of the pertinent
provisions of the Plan, an explanation as to how the claimant
can perfect the claim and/or submit the claim for review
(where appropriate), and a statement of the claimant's right
to bring a civil action under ERISA Section 502(a) following
an adverse determination on review.
(c) Review Procedure. Any Participant or
Beneficiary who has been denied a benefit, or his duly authorized
representative, shall be entitled, upon request to the Administrative
Committee, to appeal the denial of his claim in accordance with
subsection (c)(1) or (c)(2) hereof, as applicable.
(1) Generally. Except as provided in
subsection (c)(2) hereof, the claimant or his duly authorized
representative may review pertinent documents related to the
Plan and in the Administrative Committee's possession in
order to prepare the appeal. The form containing the request
for review, together with a written statement of the
claimant's position, must be filed with the Administrative
Committee no later than 60 days after receipt of the written
notification of denial of a claim provided for in subsection
(b) hereof. The Administrative Committee's decision shall be
made within 60 days following the filing of the request for
review and shall be communicated in writing to the claimant;
provided, if special circumstances require an extension of
time for processing the appeal, the Administrative Committee
shall furnish written notice to the claimant prior to the end
of the initial 60-day period, and such an extension shall not
exceed one additional 60-day period. If unfavorable, the
notice of decision shall explain the reason or reasons for
denial, indicate the provisions of the Plan or other
documents used to arrive at the decision, and state the
claimant's right to bring a civil action under ERISA Section
502(a).
(2) Claims Based on an Independent
Determination of Disability. With respect to an appeal of a
denial of benefits under the Plan based on Disability (other
than (i) approval for payment of benefits, directly
6
<PAGE>
or indirectly, under any long-term disability plan maintained
by a Participating Company, or (ii) eligibility for Social
Security disability benefits), the claimant or his duly
authorized representative may review pertinent documents
related to the Plan and in the Administrative Committee's
possession in order to prepare the appeal. The form
containing the request for review, together with a written
statement of the claimant's position, must be filed with the
Administrative Committee no later than 180 days after receipt
of the written notification of denial of a claim provided for
in subsection (b) hereof. The Administrative Committee's
decision shall be made within 45 days following the filing of
the request for review and shall be communicated in writing
to the claimant; provided, if special circumstances require
an extension of time for processing the appeal, the
Administrative Committee shall furnish written notice to the
claimant prior to the end of the initial 45-day period, and
such an extension shall not exceed one additional 45-day
period. The Administrative Committee's review shall not
afford deference to the initial adverse benefit determination
and shall be conducted by an individual who is neither the
individual who made the adverse benefit determination that is
the subject of the appeal, nor the subordinate of such
individual. In deciding an appeal of any adverse benefit
determination that is based in whole or in part on a medical
judgment, the Administrative Committee shall consult with a
health care professional who has appropriate training and
experience in the field of medicine involved in the medical
judgment and who is neither an individual who was consulted
in connection with the adverse benefit determination that is
the subject of the appeal, nor the subordinate of any such
individual. If unfavorable, the notice of decision shall
explain the reason or reasons for denial, indicate the
provisions of the Plan or other documents used to arrive at
the decision, state the claimant's right to bring a civil
action under ERISA Section 502(a), and identify all medical
or vocational experts whose advice was obtained by the
Administrative Committee in connection with a claimant's
adverse benefit determination.
(d) Satisfaction of Claims. Any payment to a
Participant or Beneficiary, or to his legal representative or heirs at
law, all in accordance with the provisions of the Plan, shall to the
extent thereof be in full satisfaction of all claims hereunder against
the Trustee, the Administrative Committee, and the Participating
Companies, any of whom may require such Participant, Beneficiary,
legal representative or heirs at law, as a condition to such payment,
to execute a receipt and release therefor in such form as shall be
determined by the Trustee, the Administrative Committee or the
Participating Companies, as the case may be. If receipt and release
shall be required but execution by such Participant, Beneficiary,
legal representative or heirs at law shall not be accomplished so that
the terms of Section 9.1(b) (dealing with the timing of distributions)
may be fulfilled, such benefits may be distributed or paid into any
appropriate court or to such other place as such court shall direct,
for disposition in accordance with the order of such court, and such
distribution shall be deemed to comply with the requirements of
Section 9.1(b).
7
<PAGE>
18. Section 14.1 of the Plan is amended to read as follows:
14.1 Top-Heavy Plan Years.