UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) May 18, 2005
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AVNET, INC.
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(Exact Name of Registrant as Specified in Its Charter)
New York
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(State or Other Jurisdiction of Incorporation)
1-4224 11-1890605
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(Commission File Number) (IRS Employer Identification No.)
2211 South 47th Street, Phoenix, Arizona 85034
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(Address of Principal Executive Offices) (Zip Code)
(480) 643-2000
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(Registrant's Telephone Number, Including Area Code)
Not Applicable
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(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
|_| Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 1.01 Entry into a Material Definitive Agreement.
On May 13, 2005, the Board of Directors of Avnet, Inc. approved amendments
to the Avnet Deferred Compensation Plan in order to comply with new regulations
enacted by the American Jobs Creation Act of 2004. A copy of the amended Plan is
attached hereto as Exhibit 99.1.
Item 9.01. Financial Statements and Exhibits.
(c) Exhibits
99.1 Avnet Deferred Compensation Plan
S I G N A T U R E
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Pursuant to the requirements 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.
AVNET, INC.
(Registrant)
Date: May 18, 2005 By: /s/ Raymond Sadowski
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Raymond Sadowski
Senior Vice President and
Chief Financial Officer
Exhibit 99.1
AVNET DEFERRED COMPENSATION PLAN
(As Amended and Restated Effective as of January 1, 2001
and Conformed Through the Second Amendment Adopted on May 13, 2005)
AVNET, INC.
Certificate of Secretary
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I, David R. Birk, Secretary of Avnet, Inc., a New York corporation (the
"Company"), do hereby certify that attached hereto is a true and correct copy of
the AVNET DEFERRED COMPENSATION PLAN (As Amended and Restated Effective as of
January 1, 2001 and Conformed Through the Second Amendment Adopted on May 13,
2005).
Dated this 13th day of May, 2005.
/s/ David R. Birk
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Secretary as Aforesaid
AVNET DEFERRED COMPENSATION PLAN
(As Amended and Restated Effective as of January 1, 2001
and Conformed Through the Second Amendment Adopted on May 13, 2005)
TABLE OF CONTENTS
Page
ARTICLE 1 TITLE AND DEFINITIONS.................................1
1.1 Title.................................................1
1.2 Definitions...........................................1
ARTICLE 2 PARTICIPATION.........................................5
2.1 Participation.........................................5
ARTICLE 3 DEFERRAL ELECTIONS....................................6
3.1 Elections to Defer Compensation.......................6
3.2 Investment Elections..................................8
ARTICLE 4 ACCOUNTS..............................................9
4.1 Deferral Account......................................9
ARTICLE 5 VESTING..............................................10
5.1 Deferral Account.....................................10
ARTICLE 6 DISTRIBUTIONS........................................11
6.1 Distribution of Deferred Compensation................11
6.2 [RESERVED]...........................................12
6.3 Financial Hardship Withdrawals.......................12
6.4 Unscheduled In-Service Withdrawal....................13
6.5 Scheduled Early Distributions........................13
6.6 Inability to Locate Participant......................13
6.7 Trust................................................13
ARTICLE 7 ADMINISTRATION.......................................15
7.1 Committee............................................15
7.2 Committee Action.....................................15
7.3 Powers and Duties of the Committee...................15
7.4 Construction and Interpretation......................16
7.5 Information..........................................16
7.6 Compensation, Expenses and Indemnity.................16
7.7 Quarterly Statements.................................16
7.8 Disputes.............................................17
ARTICLE 8 MISCELLANEOUS........................................18
8.1 Unsecured General Creditor...........................18
i
TABLE OF CONTENTS
(continued)
Page
8.2 Restriction Against Assignment.......................18
8.3 Withholding..........................................18
8.4 Amendment, Modification, Suspension or Termination...18
8.5 Governing Law........................................19
8.6 Receipt or Release...................................19
8.7 Notices..............................................19
8.8 Headings and Gender..................................19
8.9 Plan Not A Contract of Employment....................19
8.10 Construed as a Whole.................................19
8.11 Severability.........................................19
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AVNET DEFERRED COMPENSATION PLAN
(As Amended and Restated Effective as of January 1, 2001
and Conformed Through the Second Amendment Adopted on May 13, 2005)
WHEREAS, the Company has adopted and currently maintains the Avnet Deferred
Compensation Plan (the "Prior Plan") originally effective February 1, 1997; and
WHEREAS, the Company now desires to amend and restate the Prior Plan,
effective January 1, 2001, to implement various design changes to the Prior
Plan;
NOW, THEREFORE, it is hereby declared as follows:
ARTICLE 1
TITLE AND DEFINITIONS
1.1 Title. This Plan shall be known as the Avnet Deferred Compensation Plan
(As Amended and Restated Effective as of January 1, 2001).
1.2 Definitions. Whenever the following words and phrases are used in this
Plan, with the first letter capitalized, they shall have the meanings specified
below.
(a) "Account" or "Accounts" means a Participant's Deferral Account.
(b) "Active Participant" means a Participant who, for a particular Plan
Year, has a Compensation Deferred Election Form in effect for the Plan Year.
(c) "Affiliate" means any incorporated or unincorporated entity that is
under common control with the Company under Code Sections 414(b) or (c).
(d) "Beneficiary" or "Beneficiaries" means the designated person(s) or
entity(ies) to receive benefits in the event of death of the Participant in
accordance with procedures established by the Committee to receive the benefits
specified hereunder. No Beneficiary designation shall become effective until it
is filed in accordance with procedures approved by the Committee. If there is no
such designation or if there is no surviving designated Beneficiary, then the
Participant's surviving spouse shall be the Beneficiary. If there is no
surviving spouse to receive any benefits payable in accordance with the
preceding sentence, the duly appointed and currently acting personal
representative of the Participant's estate (which shall include either the
Participant's probate estate or living trust) shall be the Beneficiary. In any
case where there is no such personal representative of the Participant's estate
duly appointed and acting in that capacity within 90 days after the
Participant's death (or such extended period as the Committee determines is
reasonably necessary to allow such personal representative to be appointed, but
not to exceed 180 days after the Participant's death), then Beneficiary shall
mean the person or persons who can verify by affidavit or court order to the
satisfaction of the Committee that they are legally entitled to receive the
benefits specified hereunder. In the event any amount is payable under the Plan
to a minor, payment shall not be made to the minor, but instead be paid (a) to
that person's living parent(s) to act as custodian, (b) if that person's parents
are then divorced, and one parent is the sole or primary custodial parent, to
such custodial parent, or (c) if no parent of that person is then living, to a
custodian selected by the Committee to hold the funds for the minor under the
Uniform Gifts to Minors Act in effect in the jurisdiction in which the minor
resides. If no parent is living and the Committee decides not to select another
custodian to hold the funds for the minor, then payment shall be made to the
duly appointed and currently acting guardian of the estate for the minor or, if
no guardian of the estate for the minor is duly appointed and currently acting
within 60 days after the date the amount becomes payable, payment shall be
deposited with the court having jurisdiction over the estate of the minor.
(e) "Board of Directors" or "Board" means the Board of Directors of the
Company.
(f) "Bonus" means any amount attributable to the Participant during a Plan
Year which is designated by the Company as a bonus payment. The Committee, in
its discretion, shall determine whether any particular type or item of
Compensation shall be deemed a "Bonus" for purposes of the Plan.
(g) "Code" means the Internal Revenue Code of 1986, as amended.
(h) "Committee" means the Committee appointed by the Board to administer
the Plan in accordance with Article 7.
(i) "Company" means Avnet, Inc., a New York corporation, and any successor
corporation.
(j) "Compensation" means a Participant's Incentive Compensation and/or
Salary and/or Bonus.
(k) "Compensation Deferral Election Form" means a form approved by the
Committee and completed by the Participant to defer the payment of Compensation,
subject to the terms and conditions of the Plan and such other rules and
procedures that the Committee shall determine in its sole discretion.
(l) [RESERVED].
(m) [RESERVED].
(n) "Effective Date" means January 1, 2001.
(o) "Election Period" for an Eligible Employee means, with respect to a
particular Plan Year, the 30-day period ending either (i) prior to the first day
of the Plan Year or (ii) after a person first becomes an Eligible Employee.
2
(p) "Eligible Employee" means any domestic U.S. domicile employee of the
Company or an Affiliate who is part of a select group of management or highly
compensated employees that the Committee has determined to be eligible to become
a Participant in the Plan to whom the Plan is extended by the Committee, but
excluding any person designated by the Company or an Affiliate as an independent
contractor.
(q) "Financial Hardship" means an unforeseeable, severe financial emergency
resulting from (1) a sudden and unexpected illness or accident of the
Participant or his or her dependent (as defined in Section 152(a) of the Code);
(2) loss of the Participant's property due to casualty; or (3) other similar
extraordinary and unforeseeable circumstances arising out of an event beyond the
control of the Participant, which may not be relieved through other available
resources of the Participants, as determined by the Committee in its sole
discretion. Notwithstanding the foregoing, for distributions attributable to
amounts deferred under the Plan after December 31, 2004, a Financial Hardship
must qualify as an "unforeseeable emergency" within the meaning of Section 409A
of the Code.
(r) "Fund" or "Funds" means one or more of the investment funds selected by
the Committee pursuant to Section 3.2(a) in which a Participant's Account shall
be deemed to be invested.
(s) "Incentive Compensation" means any cash incentive compensation payable
to a Participant by the Company or an Affiliate in addition to the Participant's
Salary and Bonus prior to reduction for any salary deferral contributions to a
plan described under Section 125 or Section 401(k) of the Code.
(t) "Interest Rate" means, for each Fund, an amount equal to the net rate
of gain or loss on the assets of such Fund during each month, as determined by
the Fund (this amount may be a negative number).
(u) "Participant" means any Eligible Employee who becomes a Participant in
accordance with Section 2.1.
(v) "Payment Eligibility Date" means a date as soon as administratively
practical on or after the first day of the month following the end of the
calendar quarter in which a Participant is entitled to a distribution under the
terms of the Plan. Notwithstanding the foregoing, for distributions attributable
to amounts deferred under the Plan after December 31, 2004 by a "key employee,"
within the meaning of Section 416(i) of the Code, no distribution following
termination of employment (as such term is described in the last paragraph of
Section 6.1(a) of the Plan) may be made for a period of six months except in the
event of the Participant's death.
(w) "Plan" means this Avnet Deferred Compensation Plan (As Amended and
Restated Effective as of January 1, 2001) set forth herein, now in effect, or as
amended from time to time.
3
(x) "Plan Year" means the calendar year.
(y) "Salary" means the Participant's base salary payable by the Company or
an Affiliate prior to reduction for any salary deferral contributions to a plan
qualified under Section 125 or Section 401(k) of the Code. The term "Salary"
shall exclude any Bonuses (or other extraordinary compensation-related
payments), reimbursements of business, moving and other expenses, any income
resulting from stock option exercises, any Incentive Compensation and any
distributions from the Plan and/or any other qualified or non-qualified deferred
compensation plan. The Committee, in its discretion, shall determine whether any
particular type or item of compensation not specifically referred to above shall
be deemed "Salary" for purposes of the Plan.
(z) "Target Compensation" means, for a Plan Year, a Participant's Incentive
Compensation and Salary.
(aa) "Trust" means the Avnet Deferred Compensation Rabbi Trust, as amended
from time to time.
4
ARTICLE 2
PARTICIPATION
2.1 Participation. Each person who was a "Participant" under the Prior Plan
immediately prior to the Effective Date shall continue to be a Participant in
the Plan, but subject to the terms and conditions of the Plan. Any other person
who is an Eligible Employee shall become a Participant in the Plan by (1)
electing to defer a portion of his or her Compensation in accordance with
Section 3.1, and/or (2) completing such other forms or agreements that the
Committee, in its sole discretion, may require.
If an employee ceases to be an Eligible Employee, then he or she shall no
longer be an Active Participant eligible to have a valid Compensation Deferral
Election Form on file with the Committee until he or she becomes an Eligible
Employee again.
5
ARTICLE 3
DEFERRAL ELECTIONS
3.1 Elections to Defer Compensation.
(a) Election Period. Subject to Section 2.1, each Eligible Employee may
elect to defer Compensation by filing with the Committee a Compensation Deferral
Election Form no later than the last day of his or her Election Period.
(b) General Rule. The amount of Compensation which an Active Participant
may elect to defer is as follows:
(1) Any amount of Salary that is at least $5,000, but does not exceed 50%
of his or her Salary; and/or
(2) Any amount of Incentive Compensation that is at least $5,000, but does
not exceed 100% of Incentive Compensation; and/or
(3) Any amount of Bonus that is at least $5,000, but does not exceed 100%
of Bonus.
provided, however, that no election shall be effective to reduce
Compensation that:
(i) an Eligible Employee has actually or constructively received; or
(ii) would cause an Eligible Employee's Compensation for a calendar year to
be an amount which is less than the Social Security taxable wage base for such
calendar year.
(c) Coordination With Deferrals to Avnet 401(k) Plan. An Active Participant
who makes a valid Compensation deferral election under paragraph (b) above for a
year may also elect, during his or her applicable Election Period, to have
certain amounts attributable to pre-tax contributions that would, absent certain
limitations under the Code, otherwise be made to the Avnet 401(k) Plan be made
or transferred to this Plan. These amounts include refunds of pre-tax
contributions under the Avnet 401(k) Plan due to the dollar limitations imposed
under Code sections 401(a)(30) and 402(g), refunds attributable to the
nondiscrimination tests under Code sections 401(k) or 401(m) and pre-tax
contributions that cannot be made to the Avnet 401(k) Plan due to the
compensation limitation imposed under Code section 401(a)(17). Any amounts
deferred under the Plan pursuant to this paragraph (c) shall be treated as
deferral of Salary for all other purposes of the Plan. Notwithstanding the
foregoing, an Active Participant's ability to defer contributions to the Plan
attributable to such refunds from the Avnet 401(k) Plan after December 31, 2004
shall be subject to the requirements under Section 409A of the Code and the
rules and regulations issued thereunder.
6
(d) Minimum Deferrals. If no Salary is deferred by an Active Participant
for a Plan Year and the total amount of his or her Incentive Compensation
elected to be deferred with respect to that Plan Year is in fact less than
$5,000 of the Participant's total Compensation, then no portion of the
Participant's Compensation shall be deferred. Effective for deferrals made under
the Plan after December 31, 2004, if an Active Participant's deferrals for a
Plan Year is under $5,000, then distribution attributable to such deferrals
after the end of that Plan Year may only be made to the extent permitted under
Section 409A of the Code and the rules and regulations issued thereunder.
(e) Effect of Election. The Compensation Deferral Election Form shall be
effective with respect to Compensation payable during or after the first pay
period beginning after the end of the corresponding Election Period.
(f) Duration of Compensation Deferral Election. Any Compensation Deferral
Election Form shall remain in effect, notwithstanding any change in the
Participant's Compensation, until changed or terminated in accordance with the
terms of paragraph (g); provided, however, that such election shall terminate
automatically during any Plan Year if the Participant is no longer an Eligible
Employee. Subject to the preceding requirements, a Participant may increase,
decrease or terminate his or her Compensation Deferral Election Form, effective
for Compensation payable during pay periods beginning after the beginning of any
new Plan Year by filing a new form, in accordance with the terms of this Section
3.1, with the Committee.
(g) Revocation of Compensation Deferral Election Form. To the extent
permissible under Section 409A of the Code (and the rules and regulations issued
thereunder), an Active Participant who elects to defer Compensation by
delivering to the Committee a valid Compensation Deferral Election Form may only
change his or her election by revoking such form, in a written instrument
delivered to the Committee, prospectively for Compensation that has not yet been
paid. Thereafter, a Participant may not defer Compensation under the Plan until
the next Plan Year by filing a new Compensation Deferral Election Form during
the corresponding Election Period. Notwithstanding the foregoing, a Participant
who receives a Financial Hardship Withdrawal during a Plan Year pursuant to
Section 6.3 shall be deemed to have his or her Compensation Deferral Election
Form revoked for the duration of such Plan Year and shall not be eligible to
file a new Compensation Deferral Election Form with the Committee for the next
Plan Year.
(h) Elections other than Elections During the Election Period. Subject to
the requirements above, any Eligible Employee who fails to elect to defer
Compensation during his or her Election Period may subsequently become an Active
Participant, and any Eligible Employee who has terminated a prior Compensation
Deferral Election Form may elect again to defer Compensation, by filing a new
Compensation Deferral Election Form in accordance with paragraph (b) above. An
election to defer Compensation must be filed during the Election Period for, and
will be effective for Compensation paid with respect to, services performed
during the next Plan Year.
7
3.2 Investment Elections.
(a) At the time of making the deferral elections described in Section 3.1,
the Participant shall designate, on a form provided by the Committee, the
type(s) of investment funds the Participant's Account will be deemed to be
invested in for purposes of determining the amount of earnings to be credited to
that Account. These investment funds shall be selected by the Committee from
time to time, and the Committee may modify, replace or discontinue a particular
type or category of investment fund in its sole discretion.
(b) In making the designation pursuant to this Section 3.2, the Participant
may specify that all or any whole percentage of his Accounts (of at least 10%)
be deemed to be invested in one or more of the types of investment funds
available under the Plan from time to time. A Participant may change the
designation made under this Section 3.2 by filing a change of election using a
form approved by the Committee. The change will be effective on the first
business day of the next month provided the Participant files his change of
election form, in the manner approved by the Committee, by the 25th day of the
prior month. If a Participant fails to elect a type of fund under this Section
3.2, he or she shall be deemed to have elected an investment fund that is
similar to a money market fund.
(c) The Interest Rate of each such commercially available investment fund
or contract shall be used to determine the amount of earnings or losses to be
credited to Participants' Accounts under Article 4.
8
ARTICLE 4
ACCOUNTS
4.1 Deferral Account. The Committee shall establish and maintain a Deferral
Account for each Participant under the Plan. Each Participant's Deferral Account
shall be further divided into separate subaccounts ("Fund Subaccounts"), each of
which corresponds to a investment fund(s) elected by the Participant pursuant to
Section 3.2(a). A Participant's Deferral Account shall be credited as follows:
(a) As soon as practicable after the date that Salary being deferred
hereunder would otherwise be payable to the Participant, the Committee shall
credit the Fund Subaccounts of the Participant's Deferral Account with an amount
equal to Salary deferred by the Participant during each pay period in accordance
with the Participant's election under Section 3.2(a); that is, the portion of
the Participant's deferred Salary that the Participant has elected to be deemed
to be invested in a certain type of investment fund shall be credited to the
Fund Subaccount corresponding to such fund;
(b) As soon as practicable after the date that Incentive Compensation being
deferred hereunder would otherwise be payable to the Participant, the Committee
shall credit the Fund Subaccounts of the Participant's Deferral Account with an
amount equal to the portion of the Incentive Compensation deferred by the
Participant's election under Section 3.2(a); that is, the portion of the
Participant's deferred Incentive Compensation that the Participant has elected
to be deemed to be invested in a particular type of investment fund shall be
credited to the Fund Subaccount corresponding to such fund;
(c) As soon as practicable after the date that Bonus being deferred
hereunder would otherwise be payable to the Participant, the Committee shall
credit the Fund Subaccounts of the Participant's Deferral Account with an amount
equal to the portion of the Bonus money deferred by the Participant's election
under Section 3.2(a); that is, the portion of the Participant's deferred Bonus
money that the Participant has elected to be deemed to be invested in a
particular type of investment fund shall be credited to the Fund Subaccount
corresponding to such fund; and
(d) As of the last day of each month, each Fund Subaccount of a
Participant's Deferral Account shall be credited with earnings or losses in an
amount equal to that determined by multiplying the balance credited to such fund
subaccount as of the last day of the preceding month by the Interest Rate for
the corresponding investment fund selected by the Committee pursuant to Section
3.2(b).
9
ARTICLE 5
VESTING
5.1 Deferral Account. Except as provided in Sections 6.4 and 6.6, a
Participant's Deferral Account shall be 100% vested at all times.
10
ARTICLE 6
DISTRIBUTIONS
6.1 Distribution of Deferred Compensation.
(a) In the case of a Participant who is no longer employed by the Company
or an Affiliate and who either (i) terminates as a result of a long-term
disability (as defined in the Company's long-term disability plan), or (ii) who
has at least five (5) years of service with the Company, the Distributable
Amount shall be paid to the Participant in the form of substantially equal
annual periodic payments over 15 years beginning on his or her Payment
Eligibility Date. However, except as indicated below, a Participant described in
the preceding sentence may elect one of the following optional forms of
distribution provided, that, if the distribution relates to clause (ii) above,
his or her election is filed with the Committee at least one year prior to his
or her termination of employment:
(1) a cash lump sum payable on the Participant's Payment Eligibility Date,
and
(2) substantially equal annual periodic payments over five or ten years
beginning on the Participant's Payment Eligibility Date.
Notwithstanding the foregoing, for distributions attributable to amounts
deferred under the Plan after December 31, 2004, a Participant's ability to
select a distribution option under clauses (1) or (2) above shall be determined
in accordance with Section 409A of the Code and the rules and regulations issued
thereunder. Without limiting the generality of the foregoing, a Participant
could select a distribution option under (1) or (2) above during an Election
Period for deferrals (and earnings) made during the corresponding Plan Years
beginning after December 31, 2004, and any changes to such distribution election
option may not take effect until at least 12 months after the date on which the
election is made, the first payment with respect to which such election is made
must be deferred for at least five years from the date the payment would
otherwise have been made and, except as provided in rules and regulations issued
under Section 409A of the Code, no election change may permit the acceleration
of the time or schedule of any payment under the Plan. Distributions made in
installment payments will be deemed to be made on a pro rata basis from each
Fund in which a Participant's Account is deemed to be invested in pursuant to
Section 3.2.
Notwithstanding the foregoing: (x) if the Distributable Amount is $50,000
or less, the Distributable Amount shall automatically be distributed in the form
of a cash lump sum on the Participant's Payment Eligibility Date and (y) all
payments made to a Beneficiary shall be in the form of a cash lump sum payment
that is made as soon as practicable after the Participant's death (even if
periodic payments began before the Participant's death). The Participant's
Accounts shall continue to be adjusted monthly for earnings or losses pursuant
to Section 4.1(d) of the Plan until all amounts previously credited to his or
her Accounts under the Plan have been distributed.
11
For all purposes under this Plan, a Participant shall not be considered
terminated from employment if the Participant remains employed by an Affiliate,
even if employees of such Affiliate are not Eligible Employees. However, if the
Participant is employed by an Affiliate and ceases to be such as a result of a
sale or other corporate reorganization, such sale or reorganization shall be
treated as termination of employment unless immediately following such event and
without any break in employment the Participant remains employed by Company or
another Affiliate or the former Affiliate assumes all liability for the
Participant's benefits under the Plan. Notwithstanding the foregoing, for
distributions attributable to amounts deferred under the Plan after December 31,
2004, the determination of whether a Participant has terminated employment shall
be consistent with the concept of "separation from service," as that term is
used under Section 409A of the Code and the rules and regulations issued
thereunder.
(b) In the case of a Participant who terminates employment prior to
attaining at least five (5) years of service or for reasons other than a
long-term disability, the Distributable Amount shall be paid to the Participant
in the form of a cash lump sum on the Participant's Payment Eligibility Date.
6.2 [RESERVED].
6.3 Financial Hardship Withdrawals. Participant shall be permitted to elect
to withdraw amounts from their Accounts prior to termination of employment with
the Company due to a Financial Hardship subject to the following restrictions:
(a) The election to take a Financial Hardship distribution shall be made by
filing a form approved by and filed with the Committee prior to the end of any
calendar month.
(b) The Committee determines, in its sole discretion, that the Participant
has incurred a Financial Hardship.
(c) The amount of the Financial Hardship distribution shall, in all cases,
not exceed the amount necessary to satisfy the Financial Hardship (after taking
into account the extent to which such hardship is or may be relieved through
reimbursement or compensation by insurance or otherwise or by liquidation of the
Participant's assets unless any such liquidation would itself cause a Financial
Hardship) plus any taxes reasonably anticipated as a result of such
distribution.
(d) The amount described in subsection (b) above shall be paid in a single
cash lump sum as soon as practicable after the end of the calendar month in
which the Committee approves the Financial Hardship distribution application.
(e) To the extent permissible under Section 409A of the Code and the rules
and regulations issued thereunder, if a Participant receives a Financial
Hardship Distribution, his or her Compensation deferrals shall be suspended for
at least one full Plan Year or such other period as may be required under
Section 409A.
12
6.4 Unscheduled In-Service Withdrawal. Notwithstanding anything in this
Plan to the contrary, for amounts attributable to deferrals made under the Plan
prior to January 1, 2005, a Participant may request to withdrawal of all or a
portion of the balance of his Account by filing a written request with the
Committee in a form approved by the Committee. The withdrawal will be deemed to
be made from the deferrals for the year or years whose deferred distribution
date is closest to the date of the withdrawal and the Committee, in its sole
discretion, shall determine which of the Fund Subaccounts will be charged for
the withdrawal. This request may be granted, solely in the absolute discretion
of the Committee; provided, however, if the Committee grants a withdrawal
request, all future compensation deferrals shall be suspended for that Plan Year
plus the next full Plan Year. The amount of the withdrawal under this section
will be subject to a ten percent (10%) forfeiture. Such amount will be forfeited
to the Company.
6.5 Scheduled Early Distributions. Participants may elect to receive
payments of Compensation deferred during a given Plan Year to be made on a
future designated payment date while still employed by filing a written election
with the Committee, provided the payment date is at least three plan years from
the date that the Compensation Deferral Election Form applicable to such Plan
Year is received by the Committee. A Participant may make one irrevocable
election to postpone such payment date and select a later payment date by filing
a written election with the Committee; provided, however, that any such election
for distributions attributable to deferrals made under the Plan after December
31, 2004 must be made at least 12 months prior to such scheduled payment date,
the new payment date election may not take effect until at least 12 months after
the date on which it is made and the first payment for which such election is
made is deferred for at least five years from the date the payment would have
otherwise been made. Payment under this Section will be made in a lump sum. This
election shall apply to the Compensation deferred for the Plan Year specified by
the Participant on his or her payment election and the earnings credited thereto
until the payment date. A distribution pursuant to this Section 6.5 of less than
the Participant's entire interest in the Plan shall be made pro rata from his or
her Fund Subaccounts according to the balances in such Subaccounts.
Notwithstanding the foregoing, if a Participant terminates employment with the
Company for any reason prior to the date on which a payment is scheduled to be
made pursuant to this Section 6.5, the Participant's entire Account balance will
be paid pursuant to the provisions of Section 6.1.
6.6 Inability to Locate Participant. In the event that the Committee is
unable to locate a Participant or Beneficiary within two years following the
Participant's Payment Eligibility Date, the amount allocated to the
Participant's Deferral Account and Company Contribution Amounts shall be
forfeited. If, after such forfeiture, the Participant or Beneficiary later
claims such benefit prior to the expiration of a ten year period, such benefit
shall be reinstated without interest or earnings.
6.7 Trust.
(a) The Company shall cause the payment of benefits under this Plan to be
made in whole or in part by the Trustee of the Trust (the "Trust") in accordance
with the provisions of this Section 6.7. The Company shall contribute to the
Trust for each Participant an amount equal to the amount deferred by the
Participant for the Plan Year. Contributions shall be made no less frequently
than on a monthly basis.
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(b) The Committee shall direct the Trustee to pay the Participant or his
Beneficiary at the time and in the amount described in Article 6. In the event
the amounts held under the Trust are not sufficient to provide the full amount
payable to the Participant, the Company shall pay for the remainder of such
amount at the time set forth in Article 6.
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ARTICLE 7
ADMINISTRATION
7.1 Committee. A Committee shall be appointed by, and serve at the pleasure
of, the Board of Directors. The number of members comprising the Committee shall
be determined by the Board which may, from time to time, vary the number of
members. A member of the Committee may resign by delivering a written notice of
resignation to the Board. The Board may remove any member by delivering a
certified copy of its resolution of removal to such member. Upon his or her
termination of employment with the Company, a person shall automatically cease
being a Committee member. Vacancies in the membership of the Committee shall be
filled promptly by the Board.
7.2 Committee Action. The Committee shall act at meetings by affirmative
vote of a majority of the members of the Committee. Any action permitted to be
taken at a meeting may be taken without a meeting if, prior to such action, a
written consent to the action is signed by all members of the Committee and such
written consent is filed with the minutes of the proceedings of the Committee. A
member of the Committee shall not vote or act upon any matter which relates
solely to himself or herself as a Participant. The Chairman or any other member
or members of the Committee designated by the Chairman may execute any
certificate or other written direction on behalf of the Committee.
Notwithstanding the foregoing, the Committee may delegate specific functions or
duties to a specific Committee member or members.
7.3 Powers and Duties of the Committee.
(a) The Committee shall enforce the Plan in accordance with its terms,
shall be charged with the general administration of the Plan, and shall have all
powers necessary to accomplish its purposes, including, but not by way of
limitation, the following:
(1) To select the funds or contracts to be the Funds in accordance with
Section 3.2(b);
(2) To construe and interpret the terms and provisions of this Plan and to
remedy any ambiguities, omissions or inconsistencies contained therein;
(3) To compute and certify to the amount and kind of benefits payable to
Participants and their Beneficiaries;
(4) To maintain all records that may be necessary for the administration of
the Plan;
(5) To provide for the disclosure of all information and the filing or
provision of all reports and statements to Participants, Beneficiaries or
governmental agencies as shall be required by law;
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(6) To promulgate, administer and enforce such rules for the regulation of
the Plan and procedures for the administration of the Plan as are not
inconsistent with the terms hereof;
(7) To appoint a plan administrator or any other agent, and to delegate to
them such powers and duties in connection with the administration of the Plan as
the Committee may from time to time prescribe; and
(8) To take all actions set forth in the Trust agreement, including
determining whether to hold or discontinue the Policies.
7.4 Construction and Interpretation. The Committee shall have full
discretion to construe and interpret the terms and provisions of this Plan,
which interpretation or construction shall be final and binding on all parties,
including, but not limited to, an Affiliate or any Participant or Beneficiary.
The Committee shall administer such terms and provisions of the Plan in
accordance with any and all laws applicable to the Plan.
7.5 Information. To enable the Committee to perform its functions, the
Company shall supply full and timely information to the Committee on all matters
relating to the Compensation of all Participants, their death or other cause of
termination, and such other pertinent facts as the Committee may require.
7.6 Compensation, Expenses and Indemnity.
(a) The members of the Committee shall serve without compensation for their
services hereunder.
(b) The Committee is authorized at the expense of the Company to employ
such legal counsel as it may deem advisable to assist in the performance of its
duties hereunder. Expenses and fees in connection with the administration of the
Plan shall be paid by the Company, to the extent that the Committee does not
authorize payment from the Trust.
(c) To the extent permitted by applicable law, the Company shall indemnify
and save harmless the Committee and each member thereof, the Board of Directors
and any delegate of the Committee who is an employee of the Company against any
and all expenses, liabilities and claims, including legal fees to defend against
such liabilities and claims arising out of their discharge in good faith of
responsibilities under or incident to the Plan, other than expenses and
liabilities arising out of willful misconduct. This indemnity shall not preclude
such further indemnities as may be available under insurance purchased by the
Company or provided by the Company under any bylaw, agreement or otherwise, as
such indemnities are permitted under applicable law.
7.7 Quarterly Statements. Under procedures established by the Committee, a
Participant shall receive a statement with respect to such Participant's
Accounts on a quarterly basis as soon as practicable after each March 31, June
30, September 30 and December 31.
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7.8 Disputes.
(a) Claim. A person who believes that he or she is being denied a benefit
to which he or she is entitled under this Agreement (hereinafter referred to as
"Claimant") may file a written request for such benefit with the Committee,
setting forth his or her claim.
(b) Claim Decision. Upon receipt of a claim, the Committee shall advise the
Claimant that a reply will be forthcoming within ninety (90) days and shall, in
fact, deliver such reply within such period. The Committee may, however, extend
the reply period for an additional ninety (90) days for special circumstances.
If the claim is denied in whole or in part, the Committee shall inform the
Claimant in writing, using language calculated to be understood by the Claimant,
setting forth: (1) the specified reason or reasons for such denial; (2) the
specific reference to pertinent provisions of the Plan or Plan rules on which
such denial is based; (3) a description of any additional material or
information necessary for the Claimant to perfect his or her claim and an
explanation why such material or such information is necessary; (4) appropriate
information as to the steps to be taken if the Claimant wishes to submit the
claim for review; and (5) the time limits for requesting a review under
subsection (c).
(c) Request for Review. Within sixty (60) days after the receipt by the
Claimant of the written opinion described above, the Claimant may request in
writing that the Company review the determination of the Committee. Such request
must be addressed to the Secretary of the Company, at its then principal place
of business. The Claimant or his or her duly authorized representative may, but
need not, review the pertinent documents and submit issues and comments in
writing for consideration by the Company. If the Claimant does not request a
review within such sixty (60) day period, he or she shall be barred and estopped
from challenging the Company's determination.
(d) Review of Decision. Within sixty (60) days after the Company's receipt
of a request for review, after considering all materials presented by the
Claimant, the Company will inform the Participant in writing, in a manner
calculated to be understood by the Claimant, of its decision setting forth the
specific reasons for the decision and containing specific references to the
pertinent provisions of the Plan or Plan rules on which the decision is based.
If special circumstances require that the sixty (60) day time period be
extended, the Company will so notify the Claimant and will render the decision
as soon as possible, but no later than one hundred twenty (120) days after
receipt of the request for review.
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ARTICLE 8
MISCELLANEOUS
8.1 Unsecured General Creditor. Participants and their Beneficiaries,
heirs, successors, and assigns shall have no legal or equitable rights, claims,
or interest in any specific property or assets of the Company. No assets of the
Company shall be held under any trust (other than the Trust), or held in any way
as collateral security for the fulfilling of the obligations of the Company
under this Plan. Except as provided in the Trust, any and all of the Company's
assets relating to the Plan shall be, and remain, the general unpledged,
unrestricted assets of the Company. The Company's obligation under the Plan
shall be merely that of an unfunded and unsecured promise of the Company to pay
money in the future, and the rights of the Participants and Beneficiaries shall
be no greater than those of unsecured general creditors. It is the intention of
the Company that this Plan (and the Trust) be unfunded for purposes of the Code
and for purposes of Title I of ERISA.
8.2 Restriction Against Assignment. The Company shall pay all amounts
payable hereunder only to the person or persons designated by the Plan and not
to any other person or corporation. No part of a Participant's Accounts shall be
liable for the debts, contracts, or engagements of any Participant, his or her
Beneficiary, or successors in interest. Except as may be required by a valid
qualified domestic relations order under ERISA, a Participant's Accounts shall
not be subject to execution by levy, attachment, or garnishment or by any other
legal or equitable proceeding. A Participant or Beneficiary shall not have any
right to alienate, anticipate, sell, transfer, commute, pledge, encumber, or
assign any benefits or payments hereunder in any manner whatsoever. If any
Participant, Beneficiary or successor in interest is adjudicated bankrupt or
purports to anticipate, alienate, sell, transfer, commute, assign, pledge,
encumber or charge any distribution or payment from the Plan, voluntarily or
involuntarily, the Committee, in its discretion, may cancel such distribution or
payment (or any part thereof) to or for the benefit of such Participant,
Beneficiary or successor in interest in such manner as is consistent with
applicable law.
8.3 Withholding. There shall be deducted from each payment made under the
Plan or Trust or any other Compensation payable to the Participant (or
Beneficiary) all taxes which are required to be withheld by the Company in
respect to such payment or this Plan. The Company shall have the right to reduce
any payment (or Compensation) by the amount of cash sufficient to provide the
amount of said taxes.
8.4 Amendment, Modification, Suspension or Termination. The Board of
Directors may amend, modify, suspend or terminate the Plan in whole or in part
by adopting a written instrument, except that no amendment, modification,
suspension or termination shall have any retroactive effect to reduce any
amounts allocated to a Participant's Deferral Account (the Policies themselves
shall not be treated as allocated to Deferral Accounts). In addition, the
Committee has the right to amend Sections 3.2 or 6.2(a)(1) and any other Plan
provision (subject to the limitation in the preceding sentence) as long as any
such amendment does not have a material increase in the costs incurred by the
Company in connection with the Plan. In the event that this Plan is terminated,
the amounts allocated to a Participant's Accounts (regardless of whether such
amounts had become vested) shall be distributed to the Participant or, in the
event of his or her death, his or her Beneficiary in a lump sum as soon as
practicable following the date of termination; provided, however, that the
foregoing shall apply to amounts attributable to deferrals made under the Plan
after December 31, 2004 only to the extent permissible under Section 409A of the
Code and the rules and regulations issued thereunder.
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8.5 Governing Law. This Plan shall be construed, governed and administered
in accordance with the laws of the State of Arizona, without regard to its
conflict of law provisions and except to the extent that its laws are preempted
by the laws of the United States of America.
8.6 Receipt or Release. Any payment to a Participant or the Participant's
Beneficiary in accordance with the provisions of the Plan shall, to the extent
thereof, be in full satisfaction of all claims against the Committee and the
Company. The Committee may require such Participant or Beneficiary, as a
condition precedent to such payment, to execute a receipt and release to such
effect.
8.7 Notices. All notices or other communications by a Participant to the
Company in connection with the Plan shall be deemed to have been duly given when
received by the Secretary of the Company or by any other person designated by
the Company for the receipt of such notices or other communications, in the form
and at the location specified by the Company.
8.8 Headings and Gender. The headings to sections in the Plan have been
included for convenience of reference only. The masculine pronoun shall include
the feminine and the singular the plural, whenever appropriate. Except as
otherwise expressly indicated, all references to sections in the Plan shall be
to sections of the Plan.
8.9 Plan Not A Contract of Employment. The Plan does not constitute a
contract of employment and participation in the Plan does not give any Eligible
Employee or Participant the right to be retained in the employ of the Company or
an Affiliate nor give any person a right or claim to any benefit under the Plan,
unless such right or claim has specifically accrued under the terms of the Plan.
8.10 Construed as a Whole. The provisions of the Plan shall be construed as
a whole in such manner as to carry out the provisions thereof and shall not be
construed separately without relation to the context.
8.11 Severability. If any provision of this Plan unrelated to its status
under Title I of ERISA as an unfunded plan maintained for a select group of
management or highly compensated employees is held to be invalid or
unenforceable by a court of competent jurisdiction, such holding shall not
impact the validity or enforceability of the remaining provisions of the Plan.
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