DELL COMPUTER CORPORATION DEFERRED COMPENSATION PLAN
2
DELL COMPUTER CORPORATION
DEFERRED COMPENSATION PLAN
AMENDED AND RESTATED
EFFECTIVE AS OF JANUARY 1, 2001
3
Table of Contents
Article I. Definitions and Construction........1
1.1 Definitions...........................1
(1) Account(s)...................1
(2) Affiliate....................1
(3) Base Salary..................1
(4) Base Salary Deferrals........2
(5) Bonus........................2
(6) Bonus Deferrals..............2
(7) Bonus Year...................2
(8) Change of Control............2
(9) Code.........................3
(10) Committee....................3
(11) Company......................3
(12) Company Credits..............3
(13) Company Credits Account......3
(14) Compensation.................4
(15) Compensation Deferrals.......5
(16) Compensation Deferrals Account.5
(17) Directors....................5
(18) Disability...................5
(19) Effective Date...............5
(20) Election Date................5
(21) Employee.....................6
(22) Employer or Participating Employer.6
(23) ERISA........................6
(24) Investment Fund(s)...........6
(25) Participant..................6
(26) Plan.........................6
(27) Plan Year....................6
(28) Retirement Date..............6
(29) Trust or Trust Fund..........6
(30) Trust Agreement..............6
(31) Trustee......................6
(32) Unforeseeable Financial Emergency.6
(33) Valuation Dates..............7
(34) Vested Interest..............7
(35) Vesting Service..............7
1.2 Number and Gender.....................7
1.3 Headings..............................7
Article II. Participation................7
2.1 Participation.........................7
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Table of Contents
(continued)
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2.2 Termination of Participation.............................................................................8
2.3 Reemployment of a Participant............................................................................8
Article III. Contributions...................................................................................8
3.1 Participant Compensation Deferrals.......................................................................8
3.2 Company Credits.........................................................................................10
Article IV. Allocations to Participant Accounts............................................................11
4.1 Individual Accounts.....................................................................................11
4.2 Investment of Accounts..................................................................................11
4.3 Allocation of Net Income or Loss and Changes in Value...................................................11
Article V. Hypothetical Investment of Accounts............................................................11
5.1 Hypothetical Investment of Accounts.....................................................................11
5.2 Designation of Investment Funds.........................................................................12
Article VI. Vested Interest................................................................................12
6.1 Vesting of Compensation Deferrals Account...............................................................12
6.2 Vesting of Company Credits Account......................................................................13
6.3 Forfeitures.............................................................................................13
Article VII. In-Service Withdrawals and Loans...............................................................13
7.1 In-Service Withdrawals..................................................................................13
7.2 Involuntary Distributions...............................................................................14
7.3 No Loans................................................................................................14
Article VIII. Plan Benefits..................................................................................14
8.1 Plan Benefit............................................................................................14
8.2 Events Entitling Payment of Benefit.....................................................................14
8.3 Payee and Time of Payment...............................................................................15
8.4 Alternative Forms of Benefit Payments...................................................................15
8.5 Designation of Beneficiaries............................................................................16
8.6 Payer of Benefits.......................................................................................17
8.7 Unclaimed Benefits......................................................................................17
Article IX. Administration of Plan.........................................................................17
9.1 Appointment of Committee................................................................................17
9.2 Term, Vacancies, Resignation, and Removal...............................................................17
9.3 Self-Interest of Committee Members......................................................................18
9.4 Committee Powers and Duties.............................................................................18
9.5 Claims Review...........................................................................................18
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Table of Contents
(continued)
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9.6 Company to Supply Information...........................................................................19
9.7 Indemnity...............................................................................................19
Article X. Purpose and Unfunded Nature of the Plan........................................................20
10.1 Purpose of Plan.........................................................................................20
10.2 Unfunded Nature of Plan.................................................................................20
10.3 Funding of Obligation...................................................................................20
Article XI. Participating Entities.........................................................................21
11.1 Designation of Participating Entities...................................................................21
Article XII. Miscellaneous..................................................................................22
12.1 Not Contract of Employment..............................................................................22
12.2 Alienation of Interest Forbidden........................................................................22
12.3 Withholding.............................................................................................22
12.4 Amendment and Termination...............................................................................22
12.5 Severability............................................................................................23
12.6 Governing Laws..........................................................................................23
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DELL COMPUTER CORPORATION
DEFERRED COMPENSATION PLAN
AMENDED AND RESTATED
EFFECTIVE AS OF JANUARY 1, 2001
7
DELL COMPUTER CORPORATION
DEFERRED COMPENSATION PLAN
Dell Computer Corporation, a corporation organized and existing under
the laws of the State of Delaware (the "Company"), hereby restates the Dell
Computer Corporation Deferred Compensation Plan (the "Plan"), such restatement
to be effective as of January 1, 2001, except as otherwise provided herein;
WITNESSETH:
WHEREAS, the Company wishes to promote in certain of its highly
compensated employees, and those of its affiliates, the strongest interest in
the successful operation of the business and increased efficiency in their work,
to align the financial interests of such employees with those of Company
shareholders and to provide an opportunity for accumulation of funds for their
retirement; and
WHEREAS, the Plan was initially adopted effective May 1, 1991, and
previously has been amended and restated effective as of April 1, 1996 and
January 1, 1999; and
WHEREAS, it is intended that the Plan be "unfunded" for purposes of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA") and not be
construed to provide income to any participant or beneficiary under the Internal
Revenue Code of 1986, as amended (the "Code") prior to actual receipt of
benefits hereunder;
NOW THEREFORE, the Plan is hereby restated in its entirety as follows
with no interruption in time, effective as of January 1, 2001, except as
otherwise indicated herein:
ARTICLE I.
DEFINITIONS AND CONSTRUCTION
1.1 DEFINITIONS. Where the following words and phrases appear in the Plan,
they shall have the respective meanings set forth below, unless their
context clearly indicates to the contrary.
(1) ACCOUNT(S): A Participant's Compensation Deferrals Account and
Company Credits Account, if any.
(2) AFFILIATE: Each trade or business (whether or not
incorporated), which together with Dell Computer Corporation
would be deemed to be a "single employer" within the meaning
of Code Section 414(b), (c), (m), or (o).
(3) BASE SALARY: A Participant's gross base salary payable in the
ordinary course of business under the Company's payroll system
and not any periodic bonuses.
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(4) BASE SALARY DEFERRALS: Base Salary deferred by a Participant
pursuant to Section 3.1.
(5) BONUS: The Annual Incentive Compensation Bonus, if any, paid
in cash by the Company to or for the benefit of a Participant
for services rendered or labor performed while a Participant.
For purposes of this Plan, the term Bonus expressly excludes
any bonuses received under any other compensation or bonus
plan sponsored by the Company.
(6) BONUS DEFERRALS: Bonus deferred by a Participant pursuant to
Section 3.1.
(7) BONUS YEAR: The period ending on the last day of each fiscal
year; provided, however, that the Bonus Year may be changed by
the Committee to reflect the twelve month period used by the
Company under the Annual Incentive Compensation Bonus program
for each group of Eligible Employees hereunder, if any.
(8) CHANGE OF CONTROL: The earliest to occur of any of the
following:
(a) The acquisition by any person of beneficial ownership
(within the meaning of Rule 13d-3 promulgated under
the Securities Exchange Act of 1934 ("Exchange Act"))
of 20% or more of either (i) the then outstanding
shares of stock or (ii) the combined voting power of
the then outstanding voting securities of Dell
Computer Corporation; provided, however, that for
purposes of this Paragraph (a), the following
acquisitions shall not constitute a Change of
Control: (i) any acquisition directly from Dell
Computer Corporation, (ii) any acquisition by Dell
Computer Corporation, (iii) any acquisition by any
employee benefit plan (or related trust) sponsored or
maintained by Dell Computer Corporation or any
corporation controlled by Dell Computer Corporation,
(iv) any acquisition by Mr. Michael S. Dell, his
"affiliates" (as defined in Rule 12b-2 promulgated
under the Exchange Act) or "associates" (as defined
in Rule 12b-2 promulgated under the Exchange Act),
his heirs, or any trust or foundation to which he has
transferred or may transfer stock (collectively,
"Michael Dell"), or (v) any acquisition by any
corporation pursuant to a transaction which complies
with clauses (1), (2), and (3) of Paragraph (c) of
this Section 1.1(6); or
(b) Individuals who constitute the Incumbent Board (as
later defined) cease for any reason to constitute at
least a majority of the Directors; or
(c) Approval by the stockholders of Dell Computer
Corporation of a reorganization, merger, or
consolidation, or sale or other disposition of all or
substantially all of the assets of Dell Computer
Corporation, or the acquisition of assets of another
corporation (a "Business Combination"), unless
following such Business Combination (i) all or
substantially all of the persons who were the
beneficial owners, respectively, of the outstanding
stock and outstanding voting securities of Dell
Computer Corporation immediately prior to such
Business Combination beneficially own, directly
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or indirectly, immediately following such Business
Combination more than 60% of the then outstanding
shares of common stock and more than 60% of the
combined voting power of the then outstanding voting
securities entitled to vote generally in the election
of directors of the corporation resulting from such
Business Combination (including, without limitation,
a corporation which as a result of such transaction
owns Dell Computer Corporation or all or
substantially all of Dell Computer Corporation's
assets either directly or through one or more
subsidiaries), (ii) no person (excluding any employee
benefit plan (or related trust) of Dell Computer
Corporation, such corporation resulting from such
Business Combination, and Michael Dell) beneficially
owns, directly or indirectly, 20% or more of the then
outstanding shares of common stock of the corporation
resulting from such Business Combination or 20% or
more of the combined voting power of the then
outstanding voting securities of such corporation
except to the extent that such ownership existed
prior to the Business Combination, and (iii) at least
a majority of the members of the board of directors
of the corporation resulting from such Business
Combination were members of the Incumbent Board (as
later defined) at the time of the execution of the
initial agreement, or of the action of the Directors,
providing for such Business Combination; or
(d) Approval by the stockholders of Dell Computer
Corporation of a complete liquidation or dissolution
of Dell Computer Corporation.
For purposes of this Section, "Incumbent Board" shall mean the
individuals who, as of the Effective Date, constitute the
Directors; provided, however, that any individual becoming a
Director, subsequent to such date whose election, or
nomination for election by Dell Computer Corporation's
stockholders, was approved by a vote of at least a majority of
the Directors then comprising the Incumbent Board shall be
considered a member of the Incumbent Board, but excluding, for
this purpose, any such individual whose initial assumption of
office occurs as a result of an actual or threatened election
contest with respect to the election or removal of Directors
or other actual or threatened solicitation of proxies or
consents by or on behalf of a person other than the Directors.
(9) CODE: The Internal Revenue Code of 1986, as amended from time
to time.
(10) COMMITTEE: The administrative committee appointed by the
Directors to administer the Plan.
(11) COMPANY: Dell Computer Corporation, a corporation organized
and existing under the laws of the State of Delaware, or its
successor or successors
(12) COMPANY CREDITS: The amount, if any, credited to a
Participant's Company Credits Account pursuant to Section 3.2.
(13) COMPANY CREDITS ACCOUNT: A hypothetical account for each
Participant to which is credited his Company Credits pursuant
to Section 3.2, and which is credited with (or debited for)
such account's allocation of net income (or net loss) as
provided in Section 4.3.
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(14) COMPENSATION: A Participant's Compensation shall include all
the items in Section 14(a) below and exclude all the items in
Section 14(b) below:
(a) All of the following items shall be included:
o The total of all wages, salaries, fees for
professional services, and other amounts
received by a Participant in cash or in kind
for services actually rendered in the course
of employment with the Employer while a
Participant and an Employee to the extent
such amounts are includable in gross income
(but determined without regard to the
exclusions from gross income under sections
931 and 933 of the Code);
o In the case of a Participant who is an
employee within the meaning of section
401(c)(1) of the Code and the Treasury
regulations thereunder, the Employee's
earned income (as described in section
401(c)(2) of the Code and the Treasury
regulations thereunder) determined without
regard to the exclusions from gross income
under sections 931 and 933 of the Code;
o Foreign earned income (as defined in section
911(b) of the Code) whether or not
excludable from gross income;
o Amounts described in sections 104(a)(3),
105(a), and 105(h) of the Code, but only to
the extent these amounts are includable in
the gross income of the Participant;
o The value of a non-qualified stock option
granted to the Participant by the Employer,
but only to the extent that the value of the
option is includable in the gross income of
the Participant for the taxable year in
which it is granted;
o The amount includable in the gross income of
the Participant upon making an election
described in section 83(b);
o Elective contributions made on a
Participant's behalf by the Employer that
are not includable in income under section
125, section 402(e)(3), section 402(h),
section 403(b), or 457 of the Code; and
o Any amounts that are not includable in the
gross income of a Participant under a salary
reduction agreement by reason of the
application of section 132(f) of the Code.
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(b) All of the following items shall be excluded to the
extent they would otherwise be included:
o Reimbursements and other expense allowances;
o Cash and noncash fringe benefits;
o Moving expenses;
o Deferred compensation under any plan or
program other than as specifically included
in Section 1.1(i)(1)(vii);
o Welfare benefits;
o Employer contributions to or payments from
this or any other deferred compensation
program, whether such program is qualified
under section 401(a) of the Code or
nonqualified;
o Amounts realized from the exercise of a
stock option that is not an incentive stock
option within the meaning of section 422 of
the Code;
o Amounts realized at the time restricted
stock or property is freely transferable or
no longer subject to a substantial risk of
forfeiture in accordance with section 83 of
the Code;
o Amounts realized from the sale, exchange,
disqualifying disposition or other
disposition of stock acquired under an
incentive stock option; and
o Any other amounts that receive special tax
benefits under the Code, such as premiums
for group life insurance (but only to the
extent such premiums are not includable in
the gross income of the Participant).
(15) COMPENSATION DEFERRALS: Base Salary Deferrals and Bonus
Deferrals.
(16) COMPENSATION DEFERRALS ACCOUNT: A hypothetical account for
each Participant to which is credited his Compensation
Deferrals pursuant to Section 3.1, and which is credited with
(or debited for) such account's allocation of net income (or
net loss) as provided in Section 4.3.
(17) DIRECTORS: The Board of Directors of Dell Computer
Corporation.
(18) DISABILITY: A physical or mental condition which, as
determined in the sole discretion of the Committee, totally
and presumably permanently prevents a Participant from
engaging in any substantial or gainful employment; provided,
however, that an individual shall be deemed to be disabled if
he is determined to be disabled under the terms of the Dell
Computer Corporation 401(k) Plan.
(19) EFFECTIVE DATE: January 1, 2001, except as otherwise provided
herein.
(20) ELECTION DATE: (i) With respect to Base Salary, January 1st of
each Plan Year, or such earlier date as may be designated by
the Committee, and (ii) with respect to Bonuses, two weeks
prior to the last day of the Company's third fiscal quarter,
or such earlier date as may be designated by the Committee.
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(21) EMPLOYEE: Any individual on the payroll of an Employer (i)
whose wages from the Employer are subject to withholding for
purposes of Federal income taxes and for purposes of the
Federal Insurance Contributions Act, (ii) who is included
within a "select group of management or highly compensated
employees," as such term is used in ERISA Section 401(a)(1),
and (iii) who is designated by the Committee as eligible to
participate in this Plan.
(22) EMPLOYER OR PARTICIPATING EMPLOYER: The Company and any
Affiliate of the Company to the extent that (i) an Employee of
such Affiliate is a Participant hereunder and (ii) the
Affiliate has adopted the Plan in accordance with the
provisions of Article XI.
(23) ERISA: Public Law No. 93-406, the Employee Retirement Income
Security Act of 1974, as amended from time to time.
(24) INVESTMENT FUND(S): The investment fund(s) designated by the
Committee from time to time for the hypothetical investment of
a Participant's Accounts pursuant to Article V.
(25) PARTICIPANT: An Employee participating in the Plan in
accordance with the provisions of Section 2.1.
(26) PLAN: The Dell Computer Corporation Deferred Compensation
Plan, as amended from time to time.
(27) PLAN YEAR: The twelve-consecutive month period commencing
January 1 of each year.
(28) RETIREMENT DATE: The date upon which a Participant attains
sixty-five years of age.
(29) TRUST OR TRUST FUND: The fund consisting of funds, investments
and properties, if any, held pursuant to the provisions of the
Trust Agreement, together with all income, profit, and
increments thereto.
(30) TRUST AGREEMENT: The Dell Computer Corporation Deferred
Compensation Trust, entered into between the Company and the
Trustee pursuant to Section 10.3, as such agreement may be
amended from time to time.
(31) TRUSTEE: The corporation, individual or individuals appointed
by the Directors to administer the Trust Fund in accordance
with the terms of the Trust Agreement.
(32) UNFORESEEABLE FINANCIAL EMERGENCY: An unexpected need of the
Participant for cash, which (i) arises from an illness,
casualty loss, sudden financial reversal, or such other
unforeseeable occurrence that is caused by an event beyond the
control of the Participant, (ii) would result in severe
financial hardship to the Participant if his Compensation
Deferral election was not canceled pursuant to Section 3.1(c)
or if a
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withdrawal pursuant to Section 7.1 was not permitted, and
(iii) is not reasonably satisfiable from other resources of
the Participant. Cash needs arising from foreseeable events,
such as the purchase of a house or education expenses for
children, shall not be considered to be the result of an
Unforeseeable Financial Emergency.
(33) VALUATION DATES: Each day the New York Stock Exchange is open
for business.
(34) VESTED INTEREST: The percentage of a Participant's Accounts
that, pursuant to Article VI, is vested.
(35) VESTING SERVICE: With respect to each Participant, "Vesting
Service" as defined and credited under the Dell Computer
Corporation 401(k) Plan.
1.2 NUMBER AND GENDER. Wherever appropriate herein, words used in the
singular shall be considered to include the plural, and words used in
the plural shall be considered to include the singular. The masculine
gender, where appearing in the Plan, shall be deemed to include the
feminine gender.
1.3 HEADINGS. The headings of Articles and Sections herein are included
solely for convenience, and if there is any conflict between such
headings and the text of the Plan, the text shall control.
ARTICLE II.
PARTICIPATION
2.1 PARTICIPATION.
(a) Prior to the first day of each Plan Year, the Committee, in
its sole discretion, shall select and notify those Employees
who are newly eligible to become Participants as of such date.
Any such eligible Employee may become a Participant on such
date or on the first day of any subsequent Plan Year (with
respect to Base Salary deferrals) or as of the first day of
any Bonus Year (with respect to Bonus deferrals) by executing
and filing with the Committee, prior to the applicable
Election Date, the enrollment form prescribed by the
Committee.
(b) Notwithstanding Subsection (a) above, if an individual is
designated by the Committee as an Employee following the first
day of a Plan Year (with respect to Base Salary deferrals) or
prior to the Election Date for a Bonus Year (with respect to
Bonus deferrals), such eligible Employee may elect to become a
Participant as follows:
(1) with respect to Base Salary deferrals, by filing an
election with the Committee during the thirty
(30)-day period commencing on the date of such
selection or prior to the Election Date for any
subsequent Plan Year; and
(2) with respect to Bonus deferrals, by filing an
election with the Committee during the thirty
(30)-day period commencing on the date of such
selection or prior to the Election Date for any
subsequent Bonus Year, provided,
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however, that an individual designated as an Employee
after the first day of the fourth fiscal quarter of
the Company shall not be permitted to file an
election for such Bonus Year.
(c) Once an individual has been designated as an Employee and
commences Plan participation, he shall remain a Participant
eligible to participate in the Plan each Plan Year or Bonus
Year until his participation is terminated in accordance with
Section 2.2 or the Committee terminates his designation as an
Employee under this Plan.
2.2 TERMINATION OF PARTICIPATION. Notwithstanding any provision herein to
the contrary, an individual who has become or is entitled to become a
Participant of the Plan shall cease to be or be entitled to be a
Participant effective as of the earliest to occur of (1) the date the
Participant is no longer employed by the Company or (2) any earlier
date designated by the Committee and communicated to the affected
individual prior to the effective date of such action.
2.3 REEMPLOYMENT OF A PARTICIPANT. A Participant who terminates employment
with the Company and is subsequently rehired by the Company shall not
be entitled to commence or continue participation in the Plan unless
and until he is again eligible to become a Participant in accordance
with Section 2.1. In the case of such a rehired Participant, his
recommencement of Plan participation, if any, shall be considered as
his initial commencement of participation for purposes of the Plan.
ARTICLE III.
CONTRIBUTIONS
3.1 PARTICIPANT COMPENSATION DEFERRALS. Each Participant may elect to defer
a portion of his Compensation in accordance with this Section.
Compensation not deferred by a Participant pursuant to this Section
shall, for purposes of this Plan, be received by such Participant in
cash.
(a) BASE SALARY DEFERRALS.
(1) Each Participant may elect to defer receipt of an
integral percentage of from 1% to 50% of his Base
Salary for any Plan Year under the Plan as Base
Salary deferrals. Notwithstanding the preceding, the
Committee may, by resolution, provide that the
maximum deferral limit for certain groups of
Participants shall be less than fifty percent (50%).
Such election must be made in the form and within the
time period required by the Committee.
(2) A Participant's election to defer Base Salary for any
Plan Year under the Plan must be made on or prior to
the Election Date for Base Salary deferrals.
(3) If an Employee becomes initially eligible under the
Plan following an Election Date, he may make an
election to defer Base Salary for the remaining
portion of the Plan Year by filing an election within
the thirty (30) day period following the date of his
initial eligibility.
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(4) A Participant's election to make Base Salary
deferrals shall become effective as of the Election
Date coincident with or next following the date such
Participant executes and files with the Committee the
form described in Paragraph (1) above.
Notwithstanding the foregoing, if a Participant is
selected as initially eligible under the Plan
following an Election Date, such Participant's
election to make Base Salary deferrals shall become
effective as soon as administratively feasible
following the date such election is received by the
Committee; provided, however, that such election
shall apply no earlier than the first day of the
payroll period coincident with or next such date.
(5) The reduction of a Participant's Base Salary pursuant
to this election shall be effected by Base Salary
reductions as of each payroll period within the
election period.
(6) A Participant shall be deemed to have elected the
same Base Salary deferral percentage pursuant to this
Subsection for a Plan Year that was in effect for the
immediately preceding Plan Year unless such
Participant elects a new deferral percentage for the
Plan Year in accordance with Paragraph (1) or cancels
his Base Salary deferrals for the Plan Year in
accordance with Subsection (c) below.
(b) BONUS DEFERRALS.
(1) Effective as of January 1, 2000, each Participant may
elect to defer receipt of an integral percentage of
from 1% to 100% of his Bonus for any Bonus Year under
the Plan as Bonus deferrals. Such election must be
made in the form and within the time period required
by the Committee. Notwithstanding any provision
hereof, the portion of a Participant's Bonus which is
deferred pursuant to this Subsection shall be subject
to withholding for applicable payroll taxes (i.e.,
amounts required to be withheld under Code Section
3121(v)) and such taxes shall be netted from the
portion of his Bonus deferred hereunder.
(2) A Participant's election to defer Bonus under the
Plan must be made on or prior to the Election Date
for Bonus deferrals, and such election shall be
irrevocable for such Bonus Year.
(3) If an Employee becomes initially eligible under the
Plan following an Election Date, he may make an
election to defer a designated portion of his Bonus
for the entire Bonus Year by filing an election
within the thirty (30)-day period following the date
of his initial eligibility, and such election shall
be irrevocable for such Bonus Year. Notwithstanding
the preceding, an Employee who becomes initially
eligible to participate in the Plan after the first
day of the fourth quarter of the Company's fiscal
year shall not be permitted to make a deferral
election with respect to any portion of the Bonus
received during such Bonus Year.
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(4) The reduction of a Participant's Bonus pursuant to
this election shall be effected at the time such
Bonus is paid to such Participant in one lump sum
deferral.
(5) A Participant's election to defer a Bonus during a
Bonus Year shall not apply to a Bonus paid during any
subsequent Bonus Year.
(c) CANCELLATION OF BASE SALARY DEFERRAL ELECTION.
(1) A Participant may cancel his Base Salary Deferral
election effective as of the first day of any
subsequent payroll period by executing and filing
with the Committee the form prescribed by the
Committee within the minimum time period prescribed
by the Committee. Notwithstanding the preceding, the
Committee shall have the right, in its sole
discretion, to decline to accept the termination of a
Participant's Base Salary Deferral election. An
individual described in the preceding sentence may
again elect to make Base Salary Deferrals hereunder
in accordance with Subsection (a)(1) above.
(2) Upon application by the Participant, in the event
that the Committee determines that the Participant
has suffered an Unforeseeable Financial Emergency,
all the Participant's Compensation Deferral
election(s) then in effect shall be canceled as soon
as administratively practicable after such
determination. If the Participant's Compensation
Deferral election is so canceled, the Participant may
again elect to defer a percentage of his Compensation
effective as of any subsequent Election Date that is
at least twelve (12) months after the effective date
of such cancellation by complying with the procedural
requirements set forth in Subsection (a)(1) or
(b)(1), as applicable.
(d) ONGOING ELECTION. A Participant's election to make Base Salary
Deferrals shall remain in force and effect while he is a
Participant unless and until such deferrals cease in
accordance with the provisions of Subsection (c) above or such
Participant terminates participation in the Plan pursuant to
Section 2.2.
(e) CREDITING OF DEFERRALS. Compensation Deferrals made by a
Participant shall be credited to such Participant's
Compensation Deferrals Account as of a date determined in
accordance with procedures established from time to time by
the Committee.
(f) COMMITTEE LIMITATION ON COMPENSATION DEFERRALS.
Notwithstanding the preceding, the Committee may, in its sole
discretion, limit (i.e., reduce or terminate) the Compensation
Deferral election or Bonus Deferral election for any
Participant or group of Participants.
3.2 COMPANY CREDITS. As of any date or dates selected by the Company, the
Company may credit a Participant's Company Credits Account with an
amount, if any, as the Company in its sole discretion shall determine.
Such credits may be made on behalf of some Participants but not others,
and such credits may vary in amount among individual Participants.
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ARTICLE IV.
ALLOCATIONS TO PARTICIPANT ACCOUNTS
4.1 INDIVIDUAL ACCOUNTS. The Committee shall create and maintain adequate
records to disclose the interest hereunder of each Participant, former
Participant and Beneficiary. Such records shall be in the form of
individual accounts and credits and debits shall be made to such
accounts in the manner herein described.
4.2 INVESTMENT OF ACCOUNTS. The Committee shall allocate earnings and
losses to each Participant's Accounts according to the hypothetical
investments made by a Participant pursuant to the terms of Article V.
4.3 ALLOCATION OF NET INCOME OR LOSS AND CHANGES IN VALUE.
(a) As of each Valuation Date, the Committee shall determine the
fair market value and the net income (or net loss) of each
Investment Fund for the period elapsed since the next
preceding Valuation Date. The net income (or net loss) of each
Investment Fund since the next preceding Valuation Date shall
be ascertained by the Committee in such manner as it deems
appropriate, which may include expenses, if any, of
administering the Investment Fund, the Trust, and the Plan.
(b) For purposes of allocations of net income (or net loss), each
Participant's Accounts shall be divided into subaccounts to
reflect the hypothetical investment of such Participant's
Accounts in a particular Investment Fund or Investment Funds
pursuant to Article V. As of each Valuation Date, the net
income (or net loss) of each Investment Fund, separately and
respectively, shall be allocated among the corresponding
subaccounts of the Participants who had such corresponding
subaccounts invested in such Investment Fund since the next
preceding Valuation Date, and each such corresponding
subaccount shall be credited with (or debited for) that
portion of such net income (or net loss) that the value of
each such corresponding subaccount on such next preceding
Valuation Date was of the value of all such corresponding
subaccounts on such date; provided, however, that the value of
such subaccounts as of the next preceding Valuation Date shall
be reduced by the amount of any distributions made therefrom
since the next preceding Valuation Date.
(c) So long as there is any balance in any Account, such Account
shall continue to receive allocations pursuant to this
Section.
ARTICLE V.
HYPOTHETICAL INVESTMENT OF ACCOUNTS
5.1 HYPOTHETICAL INVESTMENT OF ACCOUNTS. The Committee shall from time to
time select, add, and/or delete Investment Funds for purposes of the
hypothetical investment of Participants' Accounts. For purposes of
allocating earnings and losses and valuation of each Participant's
Accounts, each Participant's Accounts shall be deemed to be invested in
the Investment Funds. The Committee shall designate which Investment
Fund or Funds the Participant's Accounts shall be deemed to be
invested. The preceding notwithstanding, the Committee
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may, in its discretion, permit one or more Participants, or any group
of Participants, to direct the hypothetical investment of all or any
portion of their Accounts in accordance with Section 5.2.
5.2 DESIGNATION OF INVESTMENT FUNDS.
(a) Each Participant shall designate, in accordance with the
procedures established from time to time by the Committee, the
manner in which the amounts credited to his Accounts over
which he has been given investment discretion by the Committee
shall be deemed to be invested from among the Investment
Funds. Such Participant may designate one of such Investment
Funds for the hypothetical investment of all the amounts
credited to such Accounts, or he may split the hypothetical
investment of the amounts credited to such Accounts between
such Investment Funds in such increments as the Committee may
prescribe. If a Participant fails to make a proper
designation, then his Accounts shall be deemed to be invested
in the Investment Fund or Investment Funds designated by the
Committee from time to time.
(b) A Participant may change his hypothetical investment
designation for future amounts to be credited to the portion
of his Accounts over which he has been given investment
discretion by the Committee. Any such change shall be made in
accordance with the procedures established by the Committee,
and the frequency of such changes may be limited by the
Committee.
(c) If the Committee elects to establish a hypothetical investment
fund that holds shares of the Company's common stock, a
Participant may elect to invest his Accounts in such fund. The
Committee may in its sole discretion refuse to recognize
Participant elections that it determines may cause the
Participant's Accounts to become subject to the short-swing
profit provisions of Section 16b of the Securities Exchange
Act of 1934 and establish special election procedures for
Participants subject to Section 16 of such Act.
(d) A Participant's hypothetical investment selections pursuant to
the immediately preceding paragraph shall be made solely for
purposes of crediting earnings and/or losses to his Accounts
under Section 4.3 of this Plan. The Committee shall not, in
any way, be bound to actually invest any amounts set aside
pursuant to Article X below to satisfy its obligations under
this Plan in accordance with such selections.
ARTICLE VI.
VESTED INTEREST
6.1 VESTING OF COMPENSATION DEFERRALS ACCOUNT. A Participant shall have a
100% Vested Interest in his Compensation Deferrals Account at all
times.
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6.2 VESTING OF COMPANY CREDITS ACCOUNT.
(a) A Participant shall acquire a Vested Interest in his Company
Credits Account as such Participant completes years of Vesting
Service in accordance with the following schedule:
Deferred Compensation Plan - Dell Computer Corp.
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