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South Dakota (State or other jurisdiction of
incorporation or organization) |
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46-0306862 (I.R.S. Employer Identification No.)
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201 Daktronics Drive
Brookings, SD 57006
(Address of principal executive offices)
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Sheila M. Anderson
Daktronics, Inc.
201 Daktronics Drive
Brookings, SD 57006
(Name and address of agent for service)
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(605) 692-0200
(Telephone number, including area code, of agent for service)
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Large accelerated filer
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Accelerated filer
x
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Non-accelerated filer
o
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Smaller reporting company
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Emerging growth company
o
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Title of securities to be registered
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Amount to be Registered (1)
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Proposed Maximum Offering Price Per Share (2)
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Proposed Maximum Aggregate Offering Price (2)
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Amount of Registration Fee
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Common Stock, no par value
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6,000,000 shares
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$
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9.60
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$
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57,600,000
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$
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7,171.20
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(1)
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The Company’s Annual Report on Form 10‑K for the fiscal year ended April 29, 2017;
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(2)
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The Company's Quarterly Reports on Form 10-Q for the quarters ended July 29, 2017 and October 28, 2017;
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(3)
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The 401(k) Plan’s Annual Report on Form 11‑K for the fiscal year ended April 30, 2017;
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(4)
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The Company's Current Reports on Form 8-K dated August 30, 2017 and September 12, 2017; and the Company’s Current Report on Form 8-K/A (Amendment No. 1) dated December 1, 2017;
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(5)
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All other reports filed by the Company or the 401(k) Plan pursuant to Section 13(a) or 15(d) of the Exchange Act since April 29, 2017; and
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(6)
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The description of the Common Stock set forth in the Company’s Registration Statement on Form S-1 filed on December 3, 1993, including all amendments or reports filed for the purpose of updating such description.
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(i)
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To include any prospectus required by Section 10(a)(3) of the Securities Act;
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(ii)
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To reflect in the prospectus any facts or events arising after the effective date of this registration statement (or the most recent post‑effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20 percent change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and
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(iii)
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To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement;
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Daktronics, Inc.
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By: /s/ Sheila M. Anderson
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Sheila M. Anderson
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Chief Financial Officer
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(Principal Financial Officer and
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Principal Accounting Officer)
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Signature
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Title
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Date
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/s/ Reece A. Kurtenbach
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President, Chief Executive Officer and a
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December 1, 2017
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Reece A. Kurtenbach
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Director (principal executive officer)
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/s/ Byron J. Anderson
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Director
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December 1, 2017
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Byron J. Anderson
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/s/ Robert G. Dutcher
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Director
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December 1, 2017
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Robert G. Dutcher
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/s/ Nancy D. Frame
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Director
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December 1, 2017
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Nancy D. Frame
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/s/ James B. Morgan
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Director
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December 1, 2017
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James B. Morgan
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/s/ John L. Mulligan
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Director
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December 1, 2017
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John L. Mulligan
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/s/ Kevin P. McDermott
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Director
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December 1, 2017
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Kevin P. McDermott
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/s/ John P. Friel
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Director
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December 1, 2017
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John P. Friel
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/s/ Sheila M. Anderson
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Chief Financial Officer (principal financial
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December 1, 2017
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Sheila M. Anderson
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officer and principal accounting officer)
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Daktronics, Inc. 401(k) Plan
By: Daktronics, Inc. Employee Benefits Committee
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By: /s/ Sheila M. Anderson
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Sheila M. Anderson
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Committee Member
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Exhibit No.
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Description
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4.1
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Form of Stock Certificate evidencing common stock, without par value, of the Company (incorporated by reference to Exhibit 4.1 to the Company’s Amendment No. 1 to Registration Statement on Form S-1 filed on January 12, 1994, Commission File No. 33-72466).
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24.1
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Power of Attorney (included as part of the signature page).
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(1) Filed herewith.
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“1.08
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“Compensation”
shall mean the following (a) or (b), as applicable, subject to (c) in either event:
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(a)
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For all purposes except Sections 1.22, 3.03, 3.04, 4.04 and 13.02 hereof, Compensation shall mean wages within the meaning of Code section 3401(a) and all other payments of compensation to an Employee by a member of the Controlled Group (in the course of such member’s trade or business) for which the member is required to furnish the Employee a written statement under Code sections 6041(d) and 6051(a)(3) and 6052 (otherwise referred to as W-2 wages). Compensation shall be determined without regard to any rules under Code section 3401(a) that limit the remuneration included in wages based on the nature or location of the employment or the services performed (such as the exception for agricultural labor in Code section 3401(a)(2)). Compensation shall not include non-cash compensation, reimbursements or other expense allowances, fringe benefits, moving expenses, deferred compensation, and welfare benefits.
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(b)
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For purposes of Section 1.22, 3.03 and 3.04 hereof, Compensation shall mean the total compensation for Service by an Employee for any member of the Controlled Group that is
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(c)
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For purposes of the limit on annual additions under Section 4.04, the determination of Highly Compensated Employees under Section 1.22, and determination of Key Employees under 13.02, compensation shall include the types of compensation described in subsections (1), (2) and (3) below. However, amounts described in subsections (1), (2) and (3) below may only be included in Earnings to the extent such amounts are paid by the later of 2½ months after severance from employment or by the end of the limitation year that includes the date of such severance from employment. Any other payment of compensation paid after severance of employment that is not described in the following types of compensation are not considered Earnings within the meaning of section 415(c)(3) of the Code, even if payment is made within the time period specified above.
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(1)
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regular compensation paid after severance from employment, including overtime, shift differential, commissions, and bonuses,
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(2)
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leave cashouts if those amounts would have:
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(a)
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been included in the definition of Earnings if they were paid prior to the participant’s severance from employment; and
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(b)
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the amounts are payment for unused accrued bona fide sick, vacation, or other leave, but only if the participant would have been able to use the leave if employment had continued.
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(3)
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deferred compensation, if the compensation would have been included in the definition of Earnings if it had been paid prior to the participant’s severance from employment, and the compensation is received pursuant to a nonqualified unfunded deferred compensation plan, but only if the payment would have been paid at the same time if the participant had continued in employment with the Employer and only to the extent that the payment is includible in the participant’s gross income.
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(d)
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Notwithstanding any other provision of the Plan to the contrary, the annual compensation of each Employee taken into account under the Plan shall not exceed the $200,000 limit provided for as of December 31, 2001, as adjusted for cost-of-living increases in accordance with section 401(a)(17)(B) of the Code. Annual compensation means compensation during the Plan Year or such other consecutive 12-month period over which compensation is otherwise determined under the Plan (the determination period). The cost-of-living adjustment in effect for a calendar year applies to annual compensation for the determination period that begins with or within such calendar year.
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(e)
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For Plan Years after December 31, 2007 any compensation paid by the Employer which would be considered “differential pay” as such term is defined by the Heroes Earnings Assistance and Relief Tax Act of 2008 (HEART Act), shall be treated as Compensation for Plan purposes.”
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(a)
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Salary Deferral Contributions for any Plan Year shall satisfy one of the following tests:
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(1)
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The actual deferral percentage for the group of eligible Highly Compensated Employees is not more than the actual deferral percentage of all other eligible Employees for the current Plan Year multiplied by 1.25.
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(2)
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The excess of the actual deferral percentage for the group of eligible Highly Compensated Employees over that for all other eligible Employees for the current Plan Year is not more than two percentage points, and the actual deferral percentage for the group of eligible Highly Compensated Employees is not more than the actual deferral percentage of all other eligible Employees for the current Plan Year multiplied by two.
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(b)
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For purposes of this Section 3.03, the term “actual deferral percentage” for a group of Employees shall mean the average of the ratios, calculated separately for each Employee in the group, of the amount of Salary Deferral Contributions for a Plan Year, to the amount of the Employee’s Compensation for such Plan Year (the “deferral percentage”).
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(1)
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such allocation is not dependent upon participation in the Plan as of any date subsequent to the allocation date,
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(2)
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the Employer contributions in addition to those attributable to Salary Deferral Contributions are actually made to the Plan no later than the end of the period described in Code section 404(a)(6) applicable to the taxable year with or within which the Plan Year ends, and
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(3)
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the Employer contributions attributable to Salary Deferral Contributions are actually made to the Plan no later than the end of the twelve (12) month period immediately following the end of the Plan Year to which the contribution relates.
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(4)
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the aggregate amount of employer contributions actually taken into account in computing the actual deferral percentage of Highly Compensated Employees for such Plan Year, over
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(5)
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the maximum amount of such contributions permitted by the actual deferral percentage test (determined by hypothetically reducing contributions made on behalf of Highly Compensated Employees in order of the actual deferral percentage, beginning with the highest of such percentages).
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(c)
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Excess contributions shall be adjusted for any income allocable to such excess contributions up to the end of the Plan Year in which the excess contribution arose. The income allocable to such excess contributions shall be determined by multiplying the total income allocable to the Salary Deferral Account of the Participant for the taxable year by a fraction, the numerator of which is the excess contributions for the Participant for the year and the denominator of which is the total account balance of the Participant attributable to elective salary deferrals of such contributions are included in the ADP test without regard to any income occurring during the taxable year.
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(d)
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Notwithstanding the foregoing, the provisions of Code section 401(k)(3) and Regulation section 1.401(k)-1(b) shall be incorporated by reference, including the provisions allowing exclusion or separate testing of eligible employees who have not met the minimum age and service requirements, and to the extent the provisions of this Section 3.03 are inconsistent, the provisions of the referenced Code and regulation sections shall govern.
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(e)
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The Plan may suspend for a Plan Year any allocation conditions set forth in this Article 3 if it appears the Plan will fail in that Plan Year to satisfy the ratio percentage test of Code section 410(b)(1)(A). A Plan satisfies coverage under the ratio percentage test if, on the last day of the Plan Year, the Plan’s benefiting ratio of the Non-Highly Compensated Includable Employees is at least 70% of the benefiting ratio of the Highly Compensated Includable Employees. The benefiting ratio of the Non-Highly Compensated Includable Employees is the number of Non-Highly Compensated Includable Employees benefiting under the Plan over the number of the Includable Employees who are Non-Highly Compensated Employees.
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(a)
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The Plan shall satisfy the applicable nondiscrimination requirements of section 401(m) of the Code, as amended from time to time, and the Treasury regulations issued thereunder to the extent applicable. The Plan shall satisfy such requirements for any Plan Year only if the actual contribution percentage for eligible Highly Compensated Employees for the Plan Year does not exceed the greater of either:
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(1)
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The actual contribution percentage for all other eligible Employees for the current Plan Year multiplied by 1.25, or
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(2)
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the lesser of 200 percent of the actual contribution percentage for all other eligible Employees for the current Plan Year, or the actual contribution percentage for all other eligible employees for the current Plan Year plus two percentage points.
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(b)
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Any employee who is eligible to receive a Company Matching Contribution is considered an eligible Employee or eligible Highly Compensated Employee, respectively for these purposes. The term “average contribution percentage” for a group of Employees shall mean the average of the ratios, calculated separately for each Employee in the group, of the amount of Matching Contributions made on behalf of an Employee during the Plan Year to that Employee’s Compensation for such Plan Year (the “contribution percentage”). However, the Employer
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(1)
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the aggregate amount of the Matching Contributions and voluntary after-tax contributions (and any qualified Non-Elective contribution or Employee Deferral Contribution taken into account in computing the contribution percentage) actually made on behalf of Highly Compensated Employees for such Plan Year, over
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(2)
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the maximum amount of such contributions permitted under the average contribution percentage test above (determined by reducing contributions made on behalf of Highly Compensated Employees in order of their contribution percentages beginning with the highest of such percentages).
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(c)
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For purposes of this Section 3.04, the contribution percentage for any eligible Employee who is a Highly Compensated Employee and who is eligible to have contribution percentage amounts allocated to the Participant’s account under two (2) or more plans described in section 401(a) of the Code, or arrangements described in section 401(m) of the Code that are maintained by the Employer, shall be determined as if the total of such contribution percentage amounts was made under each plan as provided in section 1.401(m)-2(a)(3)(ii) of the regulations. If a Highly Compensated Employee participates in two (2) or more arrangements described in Code section 401(m) that have different Plan Years, all such arrangements shall be aggregated.
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(d)
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Excess aggregate contributions shall be adjusted for any income up to the end of the Plan Year in which the excess aggregate are attributable. The income allocable to excess aggregate contributions for such period is determined in a manner analogous to the above allocation of income to excess deferrals in Section 3.03(c), but basing the allocation on excess aggregate contributions and the income allocable to Company Matching Contributions.
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(e)
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Forfeitures of excess aggregate contributions shall be applied as provided in Section 8.02.
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(f)
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Notwithstanding the foregoing, the provisions of Code section 401(m)(2) and Regulation sections 1.401(m)-(1)(b)(2) and (3), including the provision allowing separate testing of eligible employees who have not met the minimum age and service requirements, shall be incorporated by reference, and to the extent the provisions of this Section 3.04 are inconsistent, the provisions of the referenced Code and regulation sections shall govern. In addition, the Administrator, in its discretion may exclude non-Highly Compensated Employees from the foregoing testing pursuant to Code section 401(m)(5)(C).”
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Daktronics, Inc.
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By: /s/ Carla S. Gatzke
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Carla S. Gatzke
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Vice President and Secretary
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“1.15
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“Employer Account”
shall mean the account maintained on behalf of a Participant to which shall be credited the Participant’s share of any Employer Matching Contributions, Employer Profit Sharing Contributions and Forfeitures, together with the Participant’s share of the investment earnings of the Trust Fund allocable to this account.
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Part I
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the portion of the Participant’s Employer Account which is attributable to Employer Matching Contributions, also known as the
Matching Account
;
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Part II
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the portion of the Participant’s Employer Account which is attributable to Employer Matching Contributions that the Participant has re-characterized as Roth Matching Contributions, also known as
Roth Converted Matching Account
;
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Part IIII
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the portion of the Participant’s Employer Account attributable to Employer Profit Sharing Contributions, also known as the
Profit Sharing Account
; and
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Part IV
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the portion of the Participant’s Employer Account which is attributable to Employer Profit Sharing Contributions that the Participant has re-characterized as Roth Employer Profit Sharing Contributions, also known as
Roth-Converted Profit Sharing Account
.
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1.31
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“Personal Account”
shall mean the account maintained on behalf of a Participant to which shall be credited the amount of any Salary Deferral Contributions, Rollover Contributions and trustee -to-trustee transfers, together with the Participant’s share of the investment earnings of the Trust Fund allocable to this account.
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Part I
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the portion of the Participant’s Personal Account which is attributable to Salary Deferral Contributions that are Pre-Tax Salary Deferral Contributions, also know n as the
Pre-Tax Salary Deferral Account
;
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Part II
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the portion of the Participant’s Personal Account which is attributable to Pre-Tax Salary Deferral Contributions that the Participant has re-characterized as Roth Salary Deferral Contributions, also known as the
Roth-Converted Pre-Tax Deferral Account
;
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Part III
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the portion of the Participant’s Personal Account which is attributable to Roth Salary Deferral Contributions elected by the Participant pursuant to a salary deferral agreement, also known as
Roth Salary Deferral Account
;
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Part IV
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the portion of the Participant’s Persona account which is attributable to Rollover Contributions, if any, made pursuant to subsection 3.02(e) hereof, also known as the
Rollover Account
;
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Part V
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the portion of the Participant’s Personal Account which is attributable to rollover contributions that the Participant has re-characterized as Roth rollover contributions, known as
Roth-Converted Rollover Contribution Account
; and
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Part VI
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the portion of the Participant’s Personal Account which is attributable to trustee to trustee transfers, if any, made with respect to a Participant’s benefits pursuant to Section 10.03 hereof, also known as the
Trustee-to-Trustee Transfer Account.
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(a)
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An Employee shall not be eligible to become a Participant until he has attained age twenty-one (21) years.
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(b)
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For purposes of making Salary Deferral Contributions to the Plan an Employee shall not become eligible until three months from the date of his employment commencement, the Employee may begin making Salary Deferral Contributions on the first pay period of the month after meeting the eligibility requirements of this Section 2.01(b).
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(c)
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For purposes of sharing in Employer Matching Contributions to the Plan an Employee shall not become eligible until three months from the date of his employment commencement. Then, if the Employee is otherwise eligible to receive an Employer Matching Contribution under Section 4.01(b) the Employee will begin sharing in the Employer Matching Contribution at the same time such Employee is eligible to make Salary Deferral Contributions as provided for in subsection (b) herein.
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(d)
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For purposes of sharing in Employer Profit Sharing Contributions to the Plan an Employee shall not become eligible until the Employee has completed a Year of Service as such term is defined herein. Then, if the Employee is otherwise eligible to receive an Employer Profit Sharing Contribution under Section 4.01(c) the Employee will begin sharing in the Employer Profit Sharing Contribution as of the first day of the next Plan Year calendar quarter (this would be the February 1st, May 1st, August 1st, or November 1st) coincident with or next following the date he meet the eligibility requirement of this Section 2.01(d).
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“(a)
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Salary Deferral Contributions
. A Participant may voluntarily elect to enter into a salary deferral agreement with the Employer effective with the first full payroll period beginning on or after the later of the Effective Date or the first day of the calendar month following the date on which he becomes a Participant. Such salary deferral agreement shall serve to direct the Employer to contribute to the Participant’s Personal Account, as Salary Deferral Contributions, a percentage of the amount which would otherwise be paid to the Participant as direct Compensation. The amount of his Compensation which the Participant is to defer for a Plan Year shall be stated as a full percentage point of his Compensation. In addition, such amount shall be subject also to the limitations on annual additions for the limitation year under Section 4.04 hereof.
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(1)
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Pre-tax Salary Deferral Contributions
. Pre-tax Salary Deferral Contributions are Salary Deferral Contributions that a Participant elects to make on a before-tax basis. These contributions are not includible in the Participant’s gross income at the time deferred. The Employer will deposit these contributions into Part I of the Participant’s Personal Account.
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(2)
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Roth Salary Deferral Contributions
. Roth Salary Deferral Contributions are Salary Deferral Contributions that a Participant elects to make on an after-tax basis. These contributions are includible in the Participant’s gross income at the time deferred and have been irrevocably designated as Roth Salary Deferral Contributions by the Participant in the Participant’s deferral agreement. The Employer will deposit these contributions into Part III of the Participant’s Personal Account.
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(a)
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Salary Deferrals.
Salary deferral contributions pursuant to Section 3.02(a) hereof which have been deposited with the Trustee shall be credited as of each Allocation Date the Personal Account of each Participant on whose behalf such contributions were made . Such deferrals shall also include catch-up contributions made pursuant to Section 3.02(b) hereof. A
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(b)
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Employer
Matching Contributions.
As soon as practicable after each Plan Year calendar quarter (July 31, October 31, January 31, and April 30) the Committee shall determine if the Employer will contribute Matching Contributions in accordance with this Section 4.01(b). Amounts contributed under this Section 4.01(b) hereof shall be allocated as of the last day of the Plan Year quarter to Part I of the respective Employer Accounts (the “Matching Account”) of Participants on whose behalf such contributions were made. Only Participants who are Participants on the last day of the Plan Year calendar quarter will share in the allocation of Employer Matching Contributions for the allocation attributable to that calendar quarter. Furthermore, a Participant who is not employed as of the last day of the Plan Year calendar quarter due to death, or termination of employment due to Disability, or retirement on or after his Normal Retirement Date, shall be entitled to share in such contributions.
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(c)
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Employer Profit Sharing Contributions.
Profit Sharing Contributions made pursuant to Section 3.01(d) hereof shall be allocated as of the last day of the Plan Year to Part II of the Employer Account (the “Profit Sharing Account”). Each Participant’s share in such contributions shall be the amount which bears the same ratio to the total Employer Profit Sharing Contributions as the Participant’s Compensation for the Plan Year bears to the total Compensation for all Participants for the period of the Plan Year that each Participant was entitled to share in the allocation of that Employer.
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(d)
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Rollover Contributions.
Rollover Contributions pursuant to Section 3.02(c) hereof shall be credited to Part IV of the respective Personal Accounts of Participants who contributed such amounts.
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(e)
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Merged Plan Transfers.
Amounts transferred to this Plan pursuant to a Merged Plan shall be credited to Part VI of the Personal Account of Participants for whom such amounts were transferred, or among the other Accounts described in Section 4.01(a), (b), (c) or (d), as determined by the Administrative Committee.
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Daktronics, Inc.
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By: /s/ Carla S. Gatzke
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Carla S. Gatzke
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Vice President and Secretary
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Daktronics, Inc.
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By: /s/ Carla S. Gatzke
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Carla S. Gatzke
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Vice President and Secretary
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1.01
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“Account”
shall mean the total of a Participant’s Employer Account and Personal Account.
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1.02
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“Administrative Committee” or “Committee”
shall mean the committee as provided in Article 9 hereof appointed to administer the day-to-day operations of the Plan. In the absence of such a committee, whenever the term “Administrative Committee” or “Committee” is used in the Plan, it shall be construed to mean the Sponsor.
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1.03
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“Adopting Employer”
shall mean any business organization or corporation affiliated with the Sponsor through complete or partial ownership by the Sponsor or by any owner therein or which is otherwise cooperating with the Sponsor for purposes of establishing and maintaining a qualified plan, which is authorized by the governing body of the Sponsor to adopt the Plan, and which subsequently adopts the Plan.
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1.04
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“Allocation Date”
shall mean each business day that the applicable trading market and the Plan recordkeeper are open for business.
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1.05
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“Beneficiary”
shall mean the person, persons or legal entity last designated in accordance with the provisions of Section 6.06 hereof, who shall receive any death benefits that may be payable under the Plan after the death of a Participant or Retired Participant.
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1.06
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“Break in Service”
shall mean a consecutive twelve (12) month period, during which the Employee does not perform more than five hundred (500) Hours of Service.
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(a)
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by reason of the pregnancy of the Employee,
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(b)
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by reason of the birth of a child of the Employee,
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(c)
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by reason of the placement of a child with the Employee in connection with the adoption of such child by such Employee, or
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(d)
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for purposes of caring for such child for a period beginning immediately following such birth or placement.
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1.07
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“Code”
shall mean the Internal Revenue Code of 1986, as amended from time to time.
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1.08
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“Compensation”
shall mean the following (a) or (b), as applicable, subject to (c) in either event:
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(a)
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For all purposes except Sections 1.22, 3.03, 3.04, 4.04 and 13.02 hereof, Compensation shall mean wages within the meaning of Code section 3401(a) and all other payments of compensation to an Employee by a member of the Controlled Group (in the course of such member’s trade or business) for which the member is required to furnish the Employee a written statement under Code sections 6041(d) and 6051(a)(3) and 6052 (otherwise referred to as W-2 wages). Compensation shall be determined without regard to any rules under Code section 3401(a) that limit the remuneration included in wages based on the nature or location of the employment or the services performed (such as the exception for agricultural labor in Code section 3401(a)(2)). Compensation shall not include reimbursements or other expense allowances, fringe benefits (cash and noncash), moving expenses, deferred compensation, and welfare benefits.
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(b)
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For purposes of Section 1.22, 3.03 and 3.04 hereof, Compensation shall mean the total compensation for Service by an Employee for any member of the Controlled Group that is includible in gross income as provided in section 414(s) of the Code. For purposes of Section 1.22, Compensation shall be determined for the full look-back year as described in Section 1.22. For purposes of Section 3.03 and 3.04 hereof, Compensation shall be determined for the period during the Plan Year in which the Employee is a Participant, or for the entire Plan Year, as determined by the Administrative committee.”
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(c)
|
For purposes of the limit on annual additions under Section 4.04, the determination of Highly Compensated Employees under Section 1.22, and determination of Key Employees under 13.02, compensation shall include the types of compensation described in subsections (1), (2) and (3) below. However, amounts described in subsections (1), (2) and (3) below may only be included in Earnings to the extent such amounts are paid by the later of 2½ months after severance from employment or by the end of the limitation year that includes the date of such severance from employment. Any other payment of compensation paid after severance of employment that is not described in the following types of compensation are not considered Earnings within the meaning of section 415(c)(3) of the Code, even if payment is made within the time period specified above.
|
(1)
|
regular compensation paid after severance from employment, including overtime, shift differential, commissions, and bonuses,
|
(2)
|
leave cashouts if those amounts would have:
|
(a)
|
been included in the definition of Earnings if they were paid prior to the participant’s severance from employment; and
|
(b)
|
the amounts are payment for unused accrued bona fide sick, vacation, or other leave, but only if the participant would have been able to use the leave if employment had continued.
|
(3)
|
deferred compensation, if the compensation would have been included in the definition of Earnings if it had been paid prior to the participant’s severance from employment, and the compensation is received pursuant to a nonqualified unfunded deferred compensation plan, but only if the payment would have been paid at the same time if the participant had continued in employment with the Employer and only to the extent that the payment is includible in the participant’s gross income.
|
(d)
|
Notwithstanding any other provision of the Plan to the contrary, the annual compensation of each Employee taken into account under the Plan shall not exceed the $200,000 limit provided for as of December 31, 2001, as adjusted for cost-of-living increases in accordance with section 401(a)(17)(B) of the Code. Annual compensation means compensation during the Plan Year or such other consecutive 12-month period over which compensation is otherwise determined under the Plan (the determination period). The cost-of-living adjustment in effect for a calendar year applies to annual compensation for the determination period that begins with or within such calendar year.
|
(e)
|
For Plan Years after December 31, 2007 any compensation paid by the Employer which would be considered “differential pay” as such term is defined by the Heroes Earnings Assistance and Relief Tax Act of 2008 (HEART Act), shall be treated as Compensation for Plan purposes.
|
1.09
|
“Company Stock” or “Employer Securities”
shall mean common stock of Daktronics, Inc., which is considered an employer security that is readily tradable on an established market in accordance with Treasury Regulation 1.401(a)(35)-1(f)(5) and Code Section 401(a)(22).
|
1.10
|
“Controlled Group”
shall mean, except as modified by section 415(h) of the Code for purposes of determining limitations under section 415 of the Code pursuant to Section 4.04 hereof, as follows: any corporation which is a member of a controlled group of corporations (as defined by section 414(b) of the Code) of which the Employer is a member, or any other trade or business (whether or not incorporated) which is under common control (as defined by section 414(c) of the Code) with respect to the Employer or any organization which is a member of an affiliated service group (as defined by section 414(m) of the Code) of which the Employer is a member or any other entity required to be aggregated with the Employer pursuant to regulations under section 414(o) of the Code; but only for the period during which such other corporation, trade or business or organization and the Employer are members of such controlled group of corporations, are under such common control or are serving as members of such an affiliated service group. All employees of members of a Controlled Group shall be treated as employed by a single employer to the extent required by law.
|
1.11
|
“Disability”
shall mean a physical or mental condition of a Participant resulting from bodily injury, disease or mental disorder which prevents the Participant from continuing any employment for remuneration or profit and which condition constitutes total disability under the federal Social Security Act. Or a condition which is determined to constitute a disability under terms of Employer provided long-term disability insurance program.
|
1.12
|
“Effective Date”
shall mean February 1, 1992, the date the Plan was established; provided, however, that the term shall mean for an Employee the effective date of adoption of the Plan by his Employer if such date is later than February 1, 1992.
|
1.13
|
“Employee”
shall mean an employee of the Employer except that for the purpose on interpreting the provisions of this Plan the term “Employee” shall not include (i) a Leased Employee, (ii) an employee who is represented by a collective bargaining unit,
except
as otherwise provided in any applicable collective bargaining agreement or any collateral agreement between the Employer and such person, (iii) any individual who is designated as an independent contractor in an agreement with the Employer, whether or not that categorization is correct, and (iv) any person that is employed by a foreign subsidiary of Daktronics, Inc.
|
1.14
|
“Employer”
shall mean the Sponsor or an Adopting Employer, or both, as required by the context of this Plan; provided, however, that if an Employee is simultaneously employed by the Sponsor and one (1) or more Adopting Employers or by two (2) or more Adopting Employers, the term shall mean all such employers.
|
1.15
|
“Employer Account”
shall mean the account maintained on behalf of a Participant to which shall be credited the Participant’s share of any Employer Matching Contributions, Employer Profit Sharing Contributions and Forfeitures, together with the Participant’s share of the investment earnings of the Trust Fund allocable to this account.
|
Part I
|
the portion of the Participant’s Employer Account which is attributable to Employer Matching Contributions, also known as the
Matching Account
;
|
Part II
|
the portion of the Participant’s Employer Account which is attributable to Employer Profit Sharing Contributions, also known as the
Profit Sharing Account
.
|
1.16
|
“Employer Matching Contributions” or “Matching Contributions”
shall mean contributions made by the Employer pursuant to Section 3.01(c) hereof and allocated in accordance with Section 4.01(b), if any such contributions are made.
|
1.17
|
“Employer Profit Sharing Contributions” or “Profit Sharing Contributions”
shall mean contributions made by the Employer pursuant to Section 3.01(d) hereof.
|
1.18
|
“ESOP Allocation”
shall mean the portion of each Participant's Accounts that are invested by the Trustee in shares of Company Stock pursuant to the direction of the Participant under Section 3.07 and any Matching Contributions made by the Company pursuant to Section 4.01(b) that are either made in the form of Company Stock or cash, which is used to acquire shares of Company Stock. ESOP Allocations, if any, are intended to constitute an employee stock ownership plan within the meaning of Code Section 4975(e)(7) and the Trustee may invest up to 100% of the assets of all ESOP Allocations in shares of Company Stock in accordance with the terms of Article XIV.
|
1.19
|
“ERISA”
shall mean the Employee Retirement Income Security Act of 1974, as amended from time to time, and as in effect on the relevant date to be interpreted hereunder.
|
1.20
|
“Fiduciary”
shall mean the Employer, the Administrative committee, the Trustee, the Investment Manager, if any, and any other legal entity, unincorporated business organization or corporation designated by such a fiduciary to carry out fiduciary responsibilities under the Plan, which accepts such designation, but only with respect to the specific responsibilities for each described herein.
|
1.21
|
“Forfeiture”
shall mean the portion of a Participant’s Employer Account which is forfeited before full vesting occurs as provided for in Section 8.02 or because of the operation of Section 4.04 or Section 6.10 hereof.
|
1.22
|
“Highly Compensated Employee
” shall mean an Employee or former Employee who:
|
(a)
|
at any time during the calendar year or the preceding calendar year was a 5% owner of the Employer (as defined in section 416((i)(1) of the Code); or
|
(b)
|
for the preceding calendar year had Compensation in excess of $80,000 (as adjusted by the Secretary of the Treasury for the relevant year pursuant to sections 414(q) and 415(d) of the Code; for 2007, the limit is $100,000 earned in 2006).
|
1.23
|
“Hours of Service”
shall mean the aggregate of the following:
|
(a)
|
Hours of Service shall include each actual hour for which an Employee is paid, or entitled to payment, for the performance of duties for the Employer. These hours shall be credited to the Employee for the Plan Year in which the duties are performed.
|
(b)
|
Hours of Service shall include each hour for which an Employee is paid, or entitled to payment, by the Employer 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 authorized leave of absence. No more than five hundred and one (501) hours of Service shall be credited under this subsection for any single continuous period (whether or not such period occurs in a single Plan Year). Hours under this subsection shall be calculated and credited pursuant to Section 2530.200b-2 of the Department of Labor Regulations, which are incorporated herein by this reference as if fully set forth.
|
(c)
|
Hours of Service shall include each hour for which back pay, irrespective of mitigation of damages, has been either awarded or agreed to by the Employer. These hours shall be
|
(d)
|
Hours of Service, however, shall not be credited for payments made solely to comply with workmen’s or unemployment compensation or disability insurance laws or as reimbursement for medical expenses.
|
(e)
|
Hours of Service shall be credited for a leave of absence that qualifies as FMLA leave under the Family and Medical Leave Act to the extent required under such Act.
|
(f)
|
An Employee will also receive credit for Hours of Service for the purpose of computing Eligibility and Vesting Service for Qualified Military and/or Uniformed Service to the extent that such credit is required pursuant to the Uniformed Services Employment and Reemployment Rights Act of 1994 or its predecessor statutes. Additionally, the Employee will be credited with Hours of Service to the extent any such credit is required pursuant to the Heroes Earnings Assistance and Relief Tax Act of 2008.
|
1.24
|
“Investment Manager”
shall mean any Fiduciary, other than the Trustee, who
|
(a)
|
has the power to manage, acquire or dispose of any asset of the Plan;
|
(b)
|
(i) is registered as an investment advisor under the Investment Advisers Act of 1940; (ii) is a bank, as defined in that Act; or (iii) is an insurance company qualified to perform services described in subsection (a) under the laws of more than one (1) state; and
|
(c)
|
has acknowledged in writing that he is a Fiduciary with respect to the Plan.
|
1.25
|
“Leased Employee”
shall mean any person, other than a common law employee of the Employer, who provides services for the Employer if the following conditions are met:
|
(a)
|
such services are provided pursuant to an agreement between the Employer and a leasing organization,
|
(b)
|
such person has performed services for the Employer (or the Employer and a “related person” as that term is defined in section 414(n)(6) of the Code) on a substantially full-time basis for a period of at least one (1) year, and
|
(c)
|
such services are performed under primary direction or control of the recipient.
|
(d)
|
such person is covered by a money purchase pension plan providing:
|
(1)
|
a nonintegrated employer contribution rate of at least ten percent (10%) of compensation, as defined in section 415(c)(3) of the Code, but including amounts contributed pursuant to a salary reduction agreement which are excludable from the employee’s gross income under a 401(k) plan, a cafeteria plan pursuant to Code section 125, a simplified employee pension (SEP) pursuant to Code section 402(h) or a tax sheltered annuity pursuant to Code section 403(b),
|
(2)
|
immediate participation, and
|
(3)
|
full and immediate vesting; and
|
(e)
|
Leased Employees do not constitute more than twenty percent (20%) of the recipient’s nonhighly compensated workforce.
|
1.26
|
“Merged Plan”
shall mean any plan that has been merged into the Plan from time to time.
|
1.27
|
“Non-ESOP Allocation”
shall mean the portion of each Participant's Accounts that are invested by the Trustee in investments other than shares of Company Stock pursuant to the direction of the Participant under Section 3.7. Non-ESOP Allocations, if any, are intended to constitute a qualified profit sharing plan within the meaning of Code Section 401(a) which includes a cash or deferred arrangement within the meaning of Code Section 401(k).
|
1.28
|
“Non-highly Compensated Employee”
shall mean an Employee of the Employer who is not a Highly Compensated Employee.
|
1.29
|
“Normal Retirement Date”
shall mean the date the Participant attains age sixty-two (62).
|
1.30
|
“Participant”
shall mean an Employee participating in the Plan in accordance with the provisions of Article 2 hereof.
|
1.31
|
“Personal Account”
shall mean the account maintained on behalf of a Participant to which shall be credited the amount of any Salary Deferral Contributions, Rollover Contributions and trustee -to-trustee transfers, together with the Participant’s share of the investment earnings of the Trust Fund allocable to this account.
|
Part I
|
the portion of the Participant’s Personal Account which is attributable to Salary Deferral Contributions, if any, made pursuant to subsection 3.02(a) hereof, and catch-up contributions made pursuant to subsection 3.02(b) hereof, these collectively are known as the
Salary Deferral Account
;
|
Part II
|
the portion of the Participant’s Personal Account which is attributable to Rollover Contributions, if any, made pursuant to subsection 3.02(c) hereof, also known as the
Rollover Account
;
|
Part III
|
the portion of the Participant’s Personal Account which is attributable to trustee to trustee transfers, if any, made with respect to a Participant’s benefits pursuant to Section 10.03 hereof, also known as the
Trustee-to-Trustee Transfer Account
.
|
1.32
|
“Plan”
shall mean this Plan, entitled the Daktronics, Inc. 401(k) Plan as established effective February 1, 1992, as amended, restated and continued herein, and as further amended from time to time.
|
1.33
|
“Plan Year”
shall mean the period from May 1 through the following April 30.
|
1.34
|
“Retired Participant”
shall mean a Participant whose participation in the Plan has terminated and who is entitled to receive benefits provided by the Plan.
|
1.35
|
“Salary Deferral Contributions”
shall mean contributions made by an Employer on an employee’s behalf pursuant to Section 3.02(a) hereof.
|
1.36
|
“Service”
shall mean employment of an Employee by the Employer and shall be measured in Hours of Service.
|
(a)
|
Service before a Break in Service shall be disregarded until the Employee shall have completed one (1) year of Service after such Break in Service.
|
(b)
|
For Plan Years after September 30, 1985, Service before any period of consecutive Breaks in Service shall be disregarded if the Employee
was not entitled to a benefit
arising from Employer contributions pursuant to Article 7 or 8 hereof attributable to Service before such period of consecutive Breaks in Service,
and
if the number of consecutive Breaks in Service equals or exceeds the greater of (i) five (5), and (ii) the Employee’s aggregate number of years of Service prior to such period of consecutive Breaks in Service. The number of years of Service prior to such consecutive Breaks in Service shall be deemed to exclude any years of Service not required to be taken into account by reason of any prior Break in Service.
|
(c)
|
For all Plan Years, Service before October 1, 1985 shall be disregarded to the extent that such Service would have been disregarded under the rules of the Plan prior to that date or of any Merged Plan or predecessor plan concerning disruptions in Service.
|
(d)
|
Service for an Employee shall include the Employee’s employment with any members of a Controlled Group while such employers are members of the Controlled Group; and
|
(e)
|
to the extent resolved by the governing body of the Sponsor, any period of continuous employment of the Employee by any predecessor organization to the Employer which ended on the date the predecessor organization merged or consolidated into the Employer.
|
1.37
|
“Sponsor”
shall mean Daktronics, Inc., a South Dakota corporation located in Brookings, South Dakota, and any legal entity, unincorporated business organization or corporation into which Daktronics, Inc., may be merged or consolidated or by which it may be succeeded.
|
1.38
|
“Spouse”
shall mean the actual spouse of a Participant, or a former spouse of a Participant if and to the extent such former spouse is to be treated as a spouse or surviving spouse under a qualified domestic relations order described in section 414(p) of the Code. The term “spouse” shall be interpreted in accordance with the laws of the jurisdiction of the state where the Participant maintains residence.
|
1.39
|
“Trust”
shall mean the trust established under which the Employer contributions and any contributions by Participants shall be received, held, invested and disbursed by the Trustee to, or for the benefit of, Participants, Retired Participants and their Beneficiaries.
|
1.40
|
“Trust Fund” or “Fund”
shall mean any and all cash, securities, real estate, insurance company contracts and other property held by the Trustee pursuant to the terms of the trust agreement.
|
1.41
|
“Trustee”
shall mean such individual, individuals or financial institution as shall have accepted the appointment by the Sponsor as Trustee under the separate trust agreement.
|
1.42
|
“Vesting Service”
shall mean the number of Plan Years during which an Employee completes at least one thousand (1,000) Hours of Service; provided, however, that Service which shall be disregarded pursuant to Section 1.36 hereof shall not be taken into account in computing an Employee’s period of Vesting Service under the Plan.
|
1.43
|
“Year of Service”
shall mean a twelve (12) consecutive month period commencing on the date the Employee’s Service begins, or an anniversary thereof, during which the Employee completes at least one thousand (1,000) Hours of Service. Provided, however, that:
|
(a)
|
if the Employee shall fail to complete one thousand (1,000) hours of Service during the twelve (12) consecutive month period commencing on the date the Employee’s Service begins, or
|
(b)
|
on and after the date the Employee first satisfies any Service requirement to participate in the Plan,
|
2.01
|
Eligibility Date.
|
(a)
|
An Employee shall not be eligible to become a Participant until he has attained age twenty-one (21) years.
|
(b)
|
For purposes of making Salary Deferral Contributions to the Plan an Employee shall not become eligible until three months from the date of his employment commencement, the Employee may begin making Salary Deferral Contributions on the first day of the subsequent month after meeting the eligibility requirements of this Section 2.01(b).
|
(c)
|
For purposes of sharing in Employer Matching Contributions to the Plan an Employee shall not become eligible until twelve months from the date of his employment commencement (his one-year anniversary date). Then, if the Employee is otherwise eligible to receive an Employer Matching Contribution under Section 4.01(b) the Employee will begin sharing in the Employer Matching Contribution as of the first day of the next Plan Year calendar quarter (this would be the February 1st, May 1st, August 1st, or November 1st) coincident with or next following his anniversary date.
|
(d)
|
For purposes of sharing in Employer Profit Sharing Contributions to the Plan an Employee shall not become eligible until the Employee has completed a Year of Service as such term is defined herein. Then, if the Employee is otherwise eligible to receive an Employer Profit Sharing Contribution under Section 4.01(c) the Employee will begin sharing in the Employer Profit Sharing Contribution as of the first day of the next Plan Year calendar quarter (this would be the February 1st, May 1st, August 1st, or November 1st) coincident with or next following the date he meet the eligibility requirement of this Section 2.01(d).
|
2.02
|
Eligibility Determination.
|
2.03
|
Participation.
|
2.04
|
Participation Following Re-employment or Break in Service.
|
2.05
|
Military Service.
|
2.06
|
Family and Medical Leave Act Requirements.
|
3.01
|
Employer Contributions.
|
(a)
|
Salary Deferral Contributions
. Each Employer shall contribute on behalf of each Participant the amount authorized by the Participant as a Salary Deferral Contribution in accordance with the provisions of Section 3.02(a). Such contributions shall be made in such form and manner and at such times as are authorized pursuant to Section 3.02(a).
|
(b)
|
Catch-up Contributions
. Each Employer shall contribute on behalf of each eligible and electing Participant the amount authorized by the Participant as a catch-up contribution in accordance with the provisions of Section 3.02(b). Such contributions shall be made in such form and manner and at such times as are authorized pursuant to Section 3.02(b). All such catch-up contributions must comply with Section 414(v) of the Code.
|
(c)
|
Employer Matching Contributions
. For each Plan Year calendar quarter, the Employer may, in its discretion, make an Employer Matching Contribution in such amount, if any, as it may determine for that Plan Year calendar quarter.
|
(d)
|
Profit Sharing Contributions.
Each Plan Year the Employer may determine the amount of Profit Sharing Contributions, if any, that the Employer shall contribute to the Plan for the Plan Year.
|
3.02
|
Contributions By, or On Behalf of, Participants.
|
(a)
|
Salary Deferral Contributions
. A Participant may voluntarily elect to enter into a salary deferral agreement with the Employer effective with the first full payroll period beginning on or after the later of the Effective Date or the first day of the calendar month following the date on which he becomes a Participant. Such salary deferral agreement shall serve to direct the Employer to contribute to the Participant’s Employer Account, as Salary Deferral Contributions, a percentage of the amount which would otherwise be paid to the Participant as direct Compensation. The amount of his Compensation which the Participant is to defer for a Plan Year shall be stated in multiples of one-tenth of a percentage point of his Compensation. In addition, such amount shall be subject also to the limitations on annual additions for the limitation year under Section 4.04 hereof.
|
(b)
|
Catch-up Contributions
. All Participants who have attained or will attain age fifty (50) before the close of the Plan Year shall be eligible to make catch-up contributions in accordance with, and subject to the limitations of, section 414(v) of the Code. The amount of catch-up contributions that can be made to the Plan for any calendar year is limited to $5,500 in 2012, but shall be adjusted by the Secretary of Treasury pursuant to section 414(v) of the Code. Such catch-up contributions shall not be taken into account
|
(c)
|
Rollover Contributions
. Rollover Contributions by a Participant, or by an Employee that is expected to become a Participant to his Personal Account in cash or in other property acceptable to the Trustee shall be allowed from individual retirement accounts, within the meaning of section 408(a) or (b) of the Code, which have been established as conduits for other qualified plan distributions pursuant to section 402 or section 403 of the Code or from another qualified plan; provided that no portion of any such rollover is attributable to nondeductible employee contributions.
|
3.03
|
Coverage and Discrimination Requirements.
|
(a)
|
Salary Deferral Contributions for any Plan Year shall satisfy one of the following tests:
|
(1)
|
The actual deferral percentage for the group of eligible Highly Compensated Employees is not more than the actual deferral percentage of all other eligible Employees for the preceding Plan Year multiplied by 1.25.
|
(2)
|
The excess of the actual deferral percentage for the group of eligible Highly Compensated Employees over that for all other eligible Employees for the preceding Plan Year is not more than two percentage points, and the actual deferral percentage for the group of eligible Highly Compensated Employees is not more than the actual deferral percentage of all other eligible Employees for the preceding Plan Year multiplied by two.
|
(b)
|
For purposes of this Section 3.03, the term “actual deferral percentage” for a group of Employees shall mean the average of the ratios, calculated separately for each Employee in the group, of the amount of Salary Deferral Contributions for a Plan Year, to the amount of the Employee’s Compensation for such Plan Year (the “deferral percentage”).
|
(1)
|
such allocation is not dependent upon participation in the Plan as of any date subsequent to the allocation date,
|
(2)
|
the Employer contributions in addition to those attributable to Salary Deferral Contributions are actually made to the Plan no later than the end of the period described in Code section 404(a)(6) applicable to the taxable year with or within which the Plan Year ends, and
|
(3)
|
the Employer contributions attributable to Salary Deferral Contributions are actually made to the Plan no later than the end of the twelve (12) month period immediately following the end of the Plan Year to which the contribution relates.
|
(4)
|
the aggregate amount of employer contributions actually taken into account in computing the actual deferral percentage of Highly Compensated Employees for such Plan Year, over
|
(5)
|
the maximum amount of such contributions permitted by the actual deferral percentage test (determined by hypothetically reducing contributions made on behalf of Highly Compensated Employees in order of the actual deferral percentage, beginning with the highest of such percentages).
|
(c)
|
Excess contributions shall be adjusted for any income allocable to such excess contributions up to the end of the Plan Year in which the excess contribution arose. The income allocable to such excess contributions shall be determined by multiplying the total income allocable to the Salary Deferral Account of the Participant for the taxable year by a fraction, the numerator of which is the excess contributions for the Participant for the year and the denominator of which is the total account balance of the Participant attributable to elective salary deferrals of such contributions are included in the ADP test without regard to any income occurring during the taxable year.
|
(d)
|
Notwithstanding the foregoing, the provisions of Code section 401(k)(3) and Regulation section 1.401(k)-1(b) shall be incorporated by reference, including the provisions allowing exclusion or separate testing of eligible employees who have not met the minimum age and service requirements, and to the extent the provisions of this Section 3.03 are inconsistent, the provisions of the referenced Code and regulation sections shall govern.
|
(e)
|
The Plan may suspend for a Plan Year any allocation conditions set forth in this Article 3 if it appears the Plan will fail in that Plan Year to satisfy the ratio percentage test of Code section 410(b)(1)(A). A Plan satisfies coverage under the ratio percentage test if, on the last day of the Plan Year, the Plan’s benefiting ratio of the Non-Highly Compensated Includable Employees is at least 70% of the benefiting ratio of the Highly Compensated Includable Employees. The benefiting ratio of the Non-Highly Compensated Includable Employees is the number of Non-Highly Compensated Includable Employees benefiting under the Plan over the number of the Includable Employees who are Non-Highly Compensated Employees.
|
3.04
|
Discrimination Requirements for Other Contributions.
|
(a)
|
The Plan shall satisfy the applicable nondiscrimination requirements of section 401(m) of the Code, as amended from time to time, and the Treasury regulations issued thereunder to the extent applicable. The Plan shall satisfy such requirements for any Plan Year only if the actual contribution percentage for eligible Highly Compensated Employees for the Plan Year does not exceed the greater of either:
|
(1)
|
The actual contribution percentage for all other eligible Employees for the preceding Plan Year multiplied by 1.25, or
|
(2)
|
the lesser of 200 percent of the actual contribution percentage for all other eligible Employees for the preceding Plan Year, or the actual contribution percentage for all other eligible employees for the preceding Plan Year plus two percentage points.
|
(b)
|
Any employee who is eligible to receive a Company Matching Contribution is considered an eligible Employee or eligible Highly Compensated Employee, respectively for these purposes. The term “average contribution percentage” for a group of Employees shall mean the average of the ratios, calculated separately for each Employee in the group, of the amount of Matching Contributions made on behalf of an Employee during the Plan Year to that Employee’s Compensation for such Plan Year (the “contribution percentage”). However, the Employer may elect to include Employee Deferral Contributions to the extent such contributions are not included in the calculation of the tests specified in Section 3.03 hereof, in the calculation of an average contribution percentage.
|
(1)
|
the aggregate amount of the Matching Contributions and voluntary after-tax contributions (and any qualified Non-Elective contribution or Employee Deferral Contribution taken into account in computing the contribution percentage) actually made on behalf of Highly Compensated Employees for such Plan Year, over
|
(2)
|
the maximum amount of such contributions permitted under the average contribution percentage test above (determined by reducing contributions made on behalf of Highly Compensated Employees in order of their contribution percentages beginning with the highest of such percentages).
|
(c)
|
For purposes of this Section 3.04, the contribution percentage for any eligible Employee who is a Highly Compensated Employee and who is eligible to have contribution percentage amounts allocated to the Participant’s account under two (2) or more plans described in section 401(a) of the Code, or arrangements described in section 401(m) of the Code that are maintained by the Employer, shall be determined as if the total of such contribution percentage amounts was made under each plan as provided in section 1.401(m)-2(a)(3)(ii) of the regulations. If a Highly Compensated Employee participates in two (2) or more arrangements described in Code section 401(m) that have different Plan Years, all such arrangements shall be aggregated.
|
(d)
|
Excess aggregate contributions shall be adjusted for any income up to the end of the Plan Year in which the excess aggregate are attributable. The income allocable to excess aggregate contributions for such period is determined in a manner analogous to the above allocation of income to excess deferrals in Section 3.03(c), but basing the allocation on excess aggregate contributions and the income allocable to Company Matching Contributions.
|
(e)
|
Forfeitures of excess aggregate contributions shall be applied as provided in Section 8.02.
|
(f)
|
Notwithstanding the foregoing, the provisions of Code section 401(m)(2) and Regulation sections 1.401(m)-(1)(b)(2) and (3), including the provision allowing separate testing of eligible employees who have not met the minimum age and service requirements, shall be incorporated by reference, and to the extent the provisions of this Section 3.04 are inconsistent, the provisions of the referenced Code and regulation sections shall govern. In addition, the Administrator, in its discretion may exclude non-Highly Compensated Employees from the foregoing testing pursuant to Code section 401(m)(5)(C).
|
3.05
|
Trustee to Trustee Transfers.
|
3.06
|
Medium of Financing the Plan.
|
3.07
|
Investment Directions by Participants.
|
4.01
|
Allocation of Contributions and Forfeitures.
|
(a)
|
Salary Deferrals.
Salary Deferral Contributions pursuant to Section 3.02(a) hereof which have been deposited with the Trustee shall be credited as of each Allocation Date to Part I of the Personal Account (the “Salary Deferral Account”) of each Participant on whose behalf such contributions were made. Salary Deferrals shall also include catch-up contributions made pursuant to Section 3.02(b) hereof.
|
(b)
|
Matching Contributions
, As soon as practicable after each Plan Year calendar quarter (July 31, October 31, January 31, and April 30) the Committee shall determine if the Employer will contribute Matching Contributions in accordance with this Section 4.01(b). Amounts contributed under this Section 4.01(b) hereof shall be allocated as of the last day of the Plan Year quarter to Part I of the respective Employer Accounts (the “Matching Account”) of Participants on whose behalf such contributions were made. Only Participants who are Participants on the last day of the Plan Year calendar quarter will share in the allocation of Employer Matching Contributions for the allocation attributable to that calendar quarter. Furthermore, a Participant who is not employed as of the last day of the Plan Year calendar quarter due to death, or termination of employment due to Disability, or retirement on or after his Normal Retirement Date, shall be entitled to share in such contributions.
|
(c)
|
Profit Sharing Contributions
. Profit Sharing Contributions pursuant to Section 3.01(d) hereof shall be allocated as of the last day of the Plan Year to Part II of the Participant’s Employer Account (the “Profit Sharing Account”). Each Participant’s share in such contributions shall be that amount which bears the same ratio to the total Employer Profit Sharing Contributions as the Participant’s Compensation for the Plan Year bears to the total Compensation for the Plan Year for all Participants entitled to share in the Profit Sharing Contribution allocation. Only Participants who are Participants as of the last day of the Plan Year shall be entitled to share in the allocation of such Profit Sharing Contributions.
|
(d)
|
Rollover Contributions.
Rollover Contributions pursuant to Section 3.02(c) hereof shall be credited to Part II of the respective Personal Accounts of Participants who contributed such amounts.
|
(e)
|
Merged Plan Transfers.
Amounts transferred to this Plan pursuant to a Merged Plan shall be credited to Part III of the respective Employer Accounts and/or Personal Accounts of Participants for whom such amounts were transferred, or among the other Accounts described in Section 4.01(a), (b), (c) or (d), as determined by the Administrative committee.
|
4.02
|
Allocation of Investment Earnings.
|
4.03
|
Adjustment to Accounts.
|
4.04
|
Maximum Annual Additions to Participants’ Accounts.
|
(a)
|
contributions made by the Employer on behalf of the Participant (including Salary Deferral Contributions);
|
(b)
|
forfeitures allocated to a Participant’s Employer Account, if any;
|
(c)
|
amounts allocated to an individual medical account which is part of a pension or annuity plan, as described in Code section 415(l)(2); and
|
(d)
|
amounts attributable to post-retirement medical benefits allocated to a separate account of a key employee under a welfare benefit fund as described in Code section 419A(d)(2).
|
4.05
|
Separation of Plan Assets for Benefit Payments.
|
(a)
|
if the Participant is an Employee of an Employer which is maintaining a plan which is not such a single plan, only that part of the Trust Fund attributable to the Employer shall be available;
|
(b)
|
if the Participant is an Employee of an Employer which is maintaining such a single plan, that part of the Trust Fund attributable to all Employers maintaining the single plan shall be available.
|
5.01
|
Withdrawals from Participants’ Employer Accounts.
|
5.02
|
Withdrawals from Participants’ Rollover Accounts.
|
5.03
|
Hardship Withdrawals
|
(a)
|
The fully vested balance of the Participant’s Account; and
|
(b)
|
The amount required to relieve the immediate and heavy financial need plus amounts necessary to pay any federal, state, or local income taxes or penalties reasonably anticipated to result from the hardship distribution.
|
(1)
|
The Participant’s resources are deemed to include those assets of the Participant’s Spouse and minor children that are reasonably available to him.
However, property held for the Participant’s minor child under an irrevocable trust or under the Uniform Gifts to Minors Act will not be treated as a resource of the Participant.
|
(2)
|
The amount of an immediate and heavy financial need may include amounts necessary to pay federal, state or local income taxes or penalties reasonably anticipated to result from the withdrawal.
|
(3)
|
A Participant may not obtain a hardship withdrawal if the financial need can reasonably be relieved by any of the following; provided, however, that the Participant need not seek relief through the following if the result would be to increase the amount of the need:
|
(A)
|
Through reimbursement or compensation by insurance or otherwise.
|
(B)
|
By liquidation of the Participant’s assets.
|
(C)
|
By cessation of Salary Deferral Contributions or Associate contributions under the Plan.
|
(D)
|
By other distributions or nontaxable loans currently available under all plans maintained by the Employer or a Related Employer, or by borrowing from commercial sources on reasonable commercial terms in an amount sufficient to satisfy the need.
|
5.04
|
Loans to Participants.
|
(a)
|
The identity of the person or positions authorized to administer the participant loan program;
|
(b)
|
A procedure for applying for loans;
|
(c)
|
The basis on which loans will be approved or denied;
|
(d)
|
Limitations (if any) on the types and amounts of loans offered;
|
(e)
|
The procedure under the program for determining a reasonable rate of interest;
|
(f)
|
The types of collateral which may secure a participant loan; and
|
(g)
|
The events constituting default and the steps that will be taken to preserve Plan assets in the event of such default.
|
5.05
|
HEART Act Deemed Severance
|
6.01
|
Form of Benefit Payment.
|
6.02
|
Benefit Payment Notice and Election.
|
6.03
|
General Commencement of Benefits Rule.
|
(a)
|
the date the Participant attains sixty-five (65) years of age;
|
(b)
|
the date the tenth (10th) anniversary of the year in which the Participant commenced participation in the Plan occurs; and
|
(c)
|
the date the Participant terminates Service with the Employer.
|
6.04
|
Required Minimum Distributions.
|
(a)
|
General Rules.
|
(1)
|
The requirements of this Section shall apply to any distribution of a Participant’s interest and will take precedence over any inconsistent provisions of this Plan.
|
(2)
|
All distributions required under this Section shall be determined and made in accordance with any applicable regulations under section 401(a)(9) of the Code, including the minimum distribution incidental benefit requirement of section 1.401(a)(9)-2 of the final regulations.
|
(b)
|
Required Beginning Date.
The entire interest of a Participant must be distributed or begin to be distributed no later than the Participant’s required beginning date. The consent of the Participant or of the Participant’s Spouse or Beneficiary shall not be required to make a distribution required under this Section.
|
(1)
|
Non-five-percent (5%) owners.
The required beginning date of a Participant who is not a “five-percent (5%) owner” (as defined in (2) below) is the first day of April of the calendar year following the calendar year in which the later of retirement and attainment of age seventy and one-half (70½) occurs.
|
(2)
|
Five-percent (5%) owners.
The required beginning date of a Participant who is a five-percent (5%) owner is the first day of April following the later of:
|
(A)
|
the calendar year in which the Participant attains age seventy and one-half (70½), and
|
(B)
|
the earlier of the calendar year with or within which ends the Plan Year in which the Participant becomes a five-percent (5%) owner, and the calendar year in which the Participant retires.
|
(3)
|
Once distributions have begun to a five-percent (5%) owner under this Section, those distributions must continue even if the Participant ceases to be a five-percent (5%) owner in a subsequent year.
|
(c)
|
Time and Manner of Distribution.
|
(1)
|
Death of Participant before Distributions Begin.
If the Participant dies before distributions begin, the Participant’s entire interest will be distributed, or begin to be distributed, no later than as follows:
|
(A)
|
If the Participant’s surviving Spouse is the Participant’s sole designated beneficiary, then, distributions to the surviving Spouse will begin by December 31 of the calendar year immediately following the calendar year in which the Participant died, or by December 31 of the calendar year in which the Participant would have attained age 70½, if later.
|
(B)
|
If the Participant’s surviving Spouse is not the Participant’s sole designated beneficiary, then, distributions to the designated beneficiary will begin by December 31 of the calendar year immediately following the calendar year in which the Participant died.
|
(C)
|
If there is no designated beneficiary as of September 30 of the year following the year of the Participant’s death, the Participant’s entire interest will be distributed by December 31 of the calendar year containing the fifth anniversary of the Participant’s death.
|
(D)
|
If the Participant’s surviving Spouse is the Participant’s sole designated beneficiary and the surviving Spouse dies after the Participant but before distributions to the surviving Spouse begin, this Section 6.03(c)(1), other than Section 6.03(c)(1)(A), will apply as if the surviving Spouse were the Participant.
|
(2)
|
Forms of Distribution.
Unless the Participant’s interest is distributed in the form of an annuity purchased from an insurance company or in a single sum on or before the required beginning date, as of the first distribution calendar year distributions will be made in accordance with Sections 6.03(d) and 6.03(e) of this article. If the Participant’s interest is distributed in the form of an annuity purchased from an insurance company, distributions thereunder will be made in accordance with the requirements of section 401(a)(9) of the Code and the Treasury regulations.
|
(d)
|
Required Minimum Distributions During Participant’s Lifetime.
|
(1)
|
Amount of Required Minimum Distribution for Each Distribution Calendar Year.
During the Participant’s lifetime, the minimum amount that will be distributed for each distribution calendar year is the lesser of:
|
(A)
|
the quotient obtained by dividing the Participant’s account balance by the distribution period in the Uniform Lifetime Table set forth in Section 1.401(a)(9)-9 of the Treasury regulations, using the Participant’s age as of the Participant’s birthday in the distribution calendar year; or
|
(B)
|
if the Participant’s sole designated beneficiary for the distribution calendar year is the Participant’s Spouse, the quotient obtained by dividing the Participant’s account balance by the number in the Joint and Last Survivor Table set forth in Section 1.401(a)(9)-9 of the Treasury regulations, using the Participant’s and Spouse’s attained ages as of the Participant’s and Spouse’s birthdays in the distribution calendar year.
|
(2)
|
Lifetime Required Minimum Distributions Continue Through Year of Participant’s Death.
Required minimum distributions will be determined under this Section 6.03(d) beginning with the first distribution calendar year and up to and including the distribution calendar year that includes the Participant’s date of death.
|
(e)
|
Required Minimum Distributions After Participant’s Death.
|
(1)
|
Death On or After Date Distributions Begin.
|
(A)
|
Participant Survived by Designated Beneficiary.
If the Participant dies on or after the date distributions begin and there is a designated beneficiary, the minimum amount that will be distributed for each distribution calendar year after the year of the Participant’s death is the quotient obtained by dividing the Participant’s account balance by the longer of the remaining life expectancy of the Participant or the remaining life expectancy of the Participant’s designated beneficiary, determined as follows:
|
(B)
|
No Designated Beneficiary.
If the Participant dies on or after the date distributions begin and there is no designated beneficiary as of September 30 of the year after the year of the Participant’s death, the minimum amount that will be distributed for each distribution calendar year after the year of the Participant’s death is the quotient obtained by dividing the Participant’s account balance by the Participant’s remaining life expectancy calculated using the age of the Participant in the year of death, reduced by one for each subsequent year.
|
(2)
|
Death before Date Distributions Begin.
|
(A)
|
Participant Survived by Designated Beneficiary.
If the Participant dies before the date distributions begin and there is a designated beneficiary, the minimum amount that will be distributed for each distribution calendar year after the year of the Participant’s death is the quotient obtained by dividing the Participant’s account balance by the remaining life expectancy of the Participant’s designated beneficiary, determined as provided in Section 6.03(d)(2).
|
(B)
|
No Designated Beneficiary.
If the Participant dies before the date distributions begin and there is no designated beneficiary as of September 30 of the year following the year of the Participant’s death, distribution of the Participant’s entire interest will be completed by December 31 of the calendar year containing the fifth anniversary of the Participant’s death.
|
(C)
|
Death of Surviving Spouse Before Distributions to Surviving Spouse Are Required to Begin.
If the Participant dies before the date distributions begin, the Participant’s surviving Spouse is the Participant’s sole designated beneficiary, and the surviving Spouse dies before distributions are required to begin to the surviving Spouse under Section 6.03(c)(1)(A), this Section 6.03(e)(2) will apply as if the surviving Spouse were the Participant.
|
(f)
|
Definitions.
|
(1)
|
Designated beneficiary.
The individual who is designated as the beneficiary under Section 6.06 of the Plan and is the designated beneficiary under Section 401(a)(9) of the Internal Revenue Code and Section 1.401(a)(9)-1, Q&A-4, of the Treasury regulations.
|
(2)
|
Distribution calendar year.
A calendar year for which a minimum distribution is required. For distributions beginning before the Participant’s death, the first distribution calendar year is the calendar year immediately preceding the calendar year which contains the Participant’s required beginning date. For distributions beginning after the Participant’s death, the first distribution calendar year is the
|
(3)
|
Life expectancy.
Life expectancy as computed by use of the Single Life Table in Section 1.401(a)(9)-9 of the Treasury regulations.
|
(4)
|
Participant’s account balance
.
The account balance as of the last valuation date in the calendar year immediately preceding the distribution calendar year (valuation calendar year) increased by the amount of any contributions made and allocated or forfeitures allocated to the account balance as of dates in the valuation calendar year after the valuation date and decreased by distributions made in the valuation calendar year after the valuation date. The account balance for the valuation calendar year includes any amounts rolled over or transferred to the plan either in the valuation calendar year or in the distribution calendar year if distributed or transferred in the valuation calendar year.
|
(g)
|
Election to Allow Participants or Beneficiaries to Elect 5-Year Rule.
|
(h)
|
2009 Exemption
|
6.05
|
Single Sum Distribution of Small Benefits.
|
6.06
|
Designation of Beneficiary.
|
6.07
|
Eligible Rollover Distributions
|
(a)
|
Eligible rollover distribution
: An eligible rollover distribution is any distribution of all or any portion of the balance to the credit of the distributee, except that an eligible rollover distribution does not include: any distribution that is one of a series of substantially equal periodic payments (not less frequently than annually) made for the life (or life expectancy) of the distributee or the joint lives (or joint life expectancies) of the distributee and the distributee’s designated beneficiary, or for a specified period of ten years or more; any distribution to the extent such distribution is required under section 401(a)(9) of the Code; any hardship distribution; and the portion of any distribution that is not includible in gross income (determined without regard to the exclusion for net unrealized appreciation with respect to employer securities).
|
(b)
|
Eligible Retirement Savings Plan
: An eligible Retirement Savings Plan is an individual retirement account described in section 408(a) of the Code, an individual retirement annuity described in section 408(b) of the Code, an annuity plan described in section 403(a) of the Code, or a qualified trust described in section 401(a) of the Code, an annuity contract described in Section 403(b) of the Code that accepts the distributee’s eligible rollover distribution, or an eligible plan under Section 457(b) of the Code which is maintained by a state, political subdivision of a state, or an agency or instrumentality of a state or political subdivision of a state and which agrees to separately account for amounts transferred into such plan from this Plan. However, in the case of an eligible
|
(c)
|
Distributee
: A distributee includes an Employee or former Employee. In addition, the Employee’s or former Employee’s surviving Spouse and the Employee’s or former Employee’s Spouse or former Spouse who is the alternate payee under a qualified domestic relations order, as defined in section 414(p) of the Code, are distributees with regard to the interest of the Spouse or former Spouse.
|
(d)
|
Direct rollover
: A direct rollover is a payment by the Plan to the eligible Retirement Savings Plan specified by the distributee.
|
(e)
|
Non- Spouse Beneficiary Rollover Rights
: For distributions after December 31, 2009, a non-spouse beneficiary who is a “designated beneficiary” under section 401(a)(9)(E) of the Code and the Regulations thereunder, by a direct trustee-to-trustee transfer (“direct rollover”), may roll over all or any portion of his or her distribution to an Individual Retirement Account (IRA) the beneficiary establishes for purposes of receiving the distribution. In order to be able to roll over the distribution, the distribution otherwise must satisfy the definition of an “eligible rollover distribution” under section 401(a)(31) of the Code. Although a non-spouse beneficiary may roll over directly a distribution as provided in Section 7.10, the distribution, if made prior to January 1, 2011, is not subject to the direct rollover requirements of section 401(a)(31) of the Code (including section 401(a)(31)(B) of the Code), the notice requirements of section 402(f) of the Code or the mandatory withholding requirements of section 3405(c) of the Code. If a non-spouse beneficiary receives a distribution from the Plan, the distribution is not eligible for a 60-day (non-direct) rollover.
|
6.08
|
Optional Forms of Benefits Under Merged Plans.
|
6.09
|
Limitations on Distribution of Salary Deferral Contributions.
|
(a)
|
the employee’s retirement, death, Disability or termination of Service;
|
(b)
|
the termination of the Plan without the establishment of a successor plan;
|
(c)
|
the date of the sale or other disposition by the Employer of substantially all of the assets used by such corporation in a trade or business of the Employer with respect to an Employee who continues employment with the corporation acquiring such assets;
|
(d)
|
with regard to an Employee who continues employment with such subsidiary, the date of the sale or other disposition by the Employer of such corporation’s interest in a subsidiary;
|
(e)
|
with regard to distributions of Salary Deferral Contributions only, the Participant’s or former Participant’s hardship, as defined in Section 5.03 hereof.
|
6.10
|
Failure to Locate.
|
7.01
|
Benefits Upon Retirement.
|
7.02
|
Death Benefits.
|
7.03
|
Disability Benefits.
|
8.01
|
Benefits Upon Termination of Service.
|
Years of
Vesting Service |
Vested
Percentage |
|
Less than 1
|
0
|
%
|
1
|
20
|
%
|
2
|
40
|
%
|
3
|
60
|
%
|
4
|
80
|
%
|
5 or more
|
100
|
%
|
8.02
|
Forfeitures.
|
(a)
|
the date the former Participant is paid the entire vested amount of such account, and
|
(b)
|
the date the former Participant incurs five (5) consecutive Breaks in Service.
|
(a)
|
equal to his vested Employer Account, but less than one hundred percent (100%) of such account, and
|
(b)
|
in an amount not exceeding five thousand dollars ($5,000) or, if greater, which the Participant elected to receive,
|
8.03
|
Payment of Benefits.
|
9.01
|
Appointment of Committee.
|
9.02
|
Powers and Duties of the Committee.
|
(a)
|
to construe the Plan in good faith;
|
(b)
|
to determine eligibility of Employees for participation in the Plan, and to notify Employees of their eligibility and the requirements for such participation;
|
(c)
|
to determine and certify eligibility for benefits under the Plan, and to direct the Trustee concerning the amount, manner and time of the payment of such benefits;
|
(d)
|
to prepare and distribute, in such manner as the Committee determines to be appropriate, information explaining the Plan;
|
(e)
|
to require a Participant to complete and file with the Committee an application for a benefit and all other forms approved by the Committee, and to require that the Participant furnish all pertinent information requested by the Committee, which information may be relied upon by the Committee;
|
(f)
|
to cause the allocations of contributions to the Plan, Forfeitures and investment earnings to be made as of each Allocation Date;
|
(g)
|
to adopt such rules as it deems necessary, desirable or appropriate for the administration of the Plan, provided such rules are consistent with the terms and provisions of the Plan;
|
(h)
|
to appoint such agents as it may need in the performance of its duties, with the consent of the Sponsor; and
|
(i)
|
to receive and review the reports from the Trustee and other agents.
|
9.03
|
Committee Procedures.
|
9.04
|
Claims and Review Procedures.
|
(a)
|
the specific reason or reasons for the denial;
|
(b)
|
specific reference to pertinent Plan provisions on which the denial is based;
|
(c)
|
a description of any additional material or information necessary for the claimant to perfect the claim and an explanation of why such material or information is necessary; and
|
(d)
|
an explanation of the claims review procedure in the Plan.
|
10.01
|
Trust Agreement.
|
10.02
|
Trust Agreement Part of Plan
|
10.03
|
Trustee to Trustee Transfers.
|
(a)
|
shall be nonforfeitable at all times;
|
(b)
|
shall not be considered
|
(c)
|
shall, subject to the additional restrictions required by the preceding paragraph, be treated in the same manner as Participant voluntary contributions for purposes of investment and allocation of investment earnings; and
|
(d)
|
shall, subject to the additional restrictions required by the preceding paragraph, be distributed or withdrawn in the same manner as the distribution or withdrawal of benefits pursuant to Articles 5, 6, 7 and 8 hereof.
|
11.01
|
Amendment of Plan.
|
(a)
|
the duties, powers and responsibilities of the Trustee shall not be increased without the written consent of the Trustee;
|
(b)
|
subject to Section 12.05 hereof, no amendment may be made to permit any part of the funds of the Trust to be used for or diverted to purposes other than for the exclusive benefit of Participants, Retired Participants and their Beneficiaries or for administration expenses of the Plan;
|
(c)
|
no amendment may be made, unless it is necessary to meet the requirements of any federal law or regulation, which shall reduce the accrued benefit or nonforfeitable percentage applicable to any Participant, Retired Participant or Beneficiary prior to the date of adoption or the effective date of such amendment nor shall any amendment to the Plan eliminate an optional form of distribution except as may be allowed by law; and
|
(d)
|
no amendment to the vesting provision in Section 8.01 hereof shall become effective with respect to a Participant who has completed three (3) or more years of Service at the date of adoption of such amendment unless such Participant is given the opportunity to elect irrevocably to have his nonforfeitable benefits computed without regard to such amendment. The election period shall be a period of sixty (60) days after the latest of:
|
11.02
|
Intent to Continue the Plan.
|
11.03
|
Termination or Partial Termination of the Plan by the Sponsor.
|
11.04
|
Termination of the Plan Upon Certain Events.
|
(a)
|
discontinuance or liquidation of the Sponsor’s business; or
|
(b)
|
the merger or consolidation of the Sponsor into any other legal entity, unincorporated business organization or corporation, or the sale by the Sponsor of substantially all of its assets to any legal entity, unincorporated business organization or corporation which shall fail to adopt and continue the Plan within ninety (90) days from the effective date of such consolidation, merger or sale of assets.
|
11.05
|
Distribution of Trust Fund Upon Termination.
|
11.06
|
Termination of Plan With Respect to an Adopting Employer.
|
(a)
|
If the Adopting Employer shall demonstrate conclusively, within the one hundred eighty (180) day period immediately following termination of the Plan with respect to its Employees, that it has established a successor retirement plan and trust for the benefit of its Employees which is qualified under sections 401(a) and 501(a), respectively, of the Code, then such assets shall be transferred to the successor trustee.
|
(b)
|
If the Adopting Employer shall fail, within the one hundred eighty (180) day period immediately following termination of the Plan with respect to its Employees, to establish a successor retirement plan and trust which is qualified under sections 401(a) and 501(a), respectively, of the Code, then such assets shall be distributed for the benefit of the Employees of the Adopting Employer in accordance with the method described in Section 11.05 hereof.
|
12.01
|
Duties of the Employer.
|
12.02
|
Right of Employer to Discharge Employees.
|
12.03
|
Information to be Furnished.
|
12.04
|
Communications from Sponsor to Trustee.
|
12.05
|
No Reversion to Employer.
|
(a)
|
in the event that the deduction of an Employer contribution to the Plan under section 404 of the Code is disallowed, in which case the contribution (to the extent disallowed) shall be returned to the Employer, upon the request of the Employer within one (1) year after the disallowance of the deduction; or
|
(b)
|
in the event that the Employer contribution is made by mistake of fact, in which case the amount of such mistaken contribution shall be returned to the Employer provided no more than one (1) year has elapsed since the date of payment by the Employer of the mistaken contribution;
|
12.06
|
Indemnification by Sponsor.
|
13.01
|
Top Heavy Plans.
|
13.02
|
Definitions.
|
(a)
|
“Compensation”
shall mean, for each Employee, Compensation as that term is defined in Section 4.04 of the Plan, plus amounts contributed by the Employer pursuant to a salary reduction agreement which are excludible from the employee’s gross income under section 125, section 402(e)(3), section 402(h)(1)(B) or section 403(b) of the Code. However, “Compensation” shall not include compensation in excess of the applicable dollar limits in subsection 1.08(d) hereof.
|
(b)
|
“Determination Date”
shall mean, with respect to any Plan Year subsequent to the first Plan Year, the last day of the preceding Plan Year. For the first Plan Year of the Plan, the Determination Date shall be the last day of such Plan Year.
|
(c)
|
“Key Employee”
shall mean any employee or former employee (including any deceased employee) who at any time during the Plan Year that includes the determination date was an officer of the employer having annual compensation greater than $130,000 (as adjusted under section 416(i)(1) of the Code for Plan Years beginning after December 31, 2002), a 5-percent owner of the employer, or a 1-percent owner of the employer having annual compensation of more than $150,000. For this purpose, annual compensation means compensation within the meaning of section 415(c)(3) of the Code. The determination of who is a Key Employee will be made in accordance with section 416(i)(1) of the Code and the applicable regulations and other guidance of general applicability issued thereunder.
|
(d)
|
“Non-Key Employee”
shall mean any Employee who is not a Key Employee.
|
(e)
|
“Permissive Aggregation Group”
shall mean the Required Aggregation Group of plans plus any other plan or plans of the Employer, as selected by the Employer, which, when considered as a group with the Required Aggregation Group, would continue to satisfy the requirements of sections 401(a)(4) and 410 of the Code.
|
(f)
|
“Present Value”
shall mean, if the Employer also now or ever maintains a qualified defined benefit pension plan, the present value of a benefit based only on the interest and mortality rates specified in that plan.
|
(g)
|
“Required Aggregation Group”
shall mean as follows:
|
(1)
|
each qualified plan of the Employer in which at least one (1) Key Employee participates or participated at any time during the determination period (regardless of whether or not the plan terminated), and
|
(2)
|
any other qualified plan of the Employer which enables a plan described in the preceding subsection (1) to meet the requirements of sections 401(a)(4) or 410 of the Code.
|
(h)
|
“Top Heavy Plan”
shall mean, for any Plan Year, the Plan if any of the following conditions exists.
|
(1)
|
If the Top Heavy Ratio for this Plan exceeds sixty percent (60%) and this Plan is not part of any Required Aggregation Group or Permissive Aggregation Group of plans.
|
(2)
|
If this Plan is a part of a Required Aggregation Group of plans, but not part of a Permissive Aggregation Group, and the Top Heavy Ratio for the Required Aggregation Group of plans exceeds sixty percent (60%).
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(3)
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If this Plan is a part of a Required Aggregation Group and also is a part of a Permissive Aggregation Group of plans, and the Top Heavy Ratio for the Permissive Aggregation Group exceeds sixty percent (60%).
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(i)
|
“Top Heavy Ratio”
shall mean as follows.
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(1)
|
If the Employer maintains one (1) or more defined contribution plans (including any simplified employee pension plan under section 408(k) of the Code), and the Employer has never maintained any defined benefit plan which has covered or could cover a Participant in this Plan, then the Top Heavy Ratio is a fraction, the numerator of which is the sum of the account balances of all Key Employees as of the Determination Date (including any part of any account balance distributed in the five (5) year period ending on the Determination Date), and the denominator of which is the sum of all account balances (including any part of any account balance distributed in the five (5) year period ending on the Determination Date) of all Participants as of the Determination Date. Both the numerator and denominator of the Top Heavy Ratio are adjusted to reflect any contribution which is due but unpaid as of the Determination Date.
|
(2)
|
If the Employer maintains one (1) or more defined contribution plans (including any simplified employee pension plan under section 408(k) of the Code), and the Employer maintains or has maintained one (1) or more defined benefit pension plans which have covered or could cover a Participant in this Plan, then the Top Heavy Ratio is a fraction, the numerator of which is the sum of account balances under the defined contribution plans for all Key Employees and the present value
|
(3)
|
For purposes of determining the present values of accrued benefits and the amounts of account balances of employees as of the Determination Date:
|
(A)
|
Distributions during year ending on the Determination Date.
The present values of accrued benefits and the amounts of account balances of an employee as of the Determination Date shall be increased by the distributions made with respect to the employee under the Plan and any plan aggregated with the Plan under section 416(g)(2) of the Code during the 1-year period ending on the determination date. The preceding sentence shall also apply to distributions under a terminated plan which, had it not been terminated, would have been aggregated with the Plan under section 416(g)(2)(A)(i) of the Code. In the case of a distribution made for a reason other than severance from employment, death, or disability, this provision shall be applied by substituting “5-year period” for “1-year period.
|
(B)
|
Employees not performing services during year ending on the Determination Date.
The accrued benefits and accounts of any individual who has not performed services for the Employer during the 1-year period ending on the Determination Date shall not be taken into account.
|
(4)
|
The accrued benefit of a Participant other than a Key Employee shall be determined under (a) the method, if any, that uniformly applies for accrual purposes under all defined benefit plans maintained by the employer, 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 rule of section 411(b)(1)(C) of the Code.
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(j)
|
“Top Heavy Valuation Date”
shall mean, with respect to any Plan Year, for this Plan, the Determination Date, and shall mean with respect to any Plan Year for a defined benefit pension plan maintained by the Employer, if any, the day within the twelve (12)-month period ending on the determination date for such defined benefit pension plan as of which the actuarial determination of the minimum funding standard is calculated.
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13.03
|
Minimum Allocations in Single Plan.
|
(a)
|
The minimum Employer contribution for a Participant who is a Non-Key Employee for any Plan Year in which the Plan is a Top Heavy Plan shall not be less than the lesser of (i) three percent (3%) of his Compensation or (ii) the percentage at which Employer
|
(1)
|
the Participant’s failure to complete one thousand (1,000) Hours of Service.
|
(2)
|
the Participant’s failure to make mandatory Employee contributions, if any, required for participation in the Plan; or
|
(3)
|
the Participant’s Compensation was less than any stated required amount.
|
(b)
|
Any Employer contributions remaining unallocated shall be allocated pursuant to the provisions of Section 4.01 hereof; provided, however, that all allocations under the Plan pursuant to Section 4.01 shall be determined with respect to Compensation as that term is defined in Section 1.08 hereof, but subject to the dollar limitations set forth in subsection 1.08(d) hereof.
|
(c)
|
Employer Matching Contributions shall be taken into account for purposes of satisfying the minimum contribution requirements of section 416(c)(2) of the Code and the Plan. The preceding sentence shall apply with respect to Matching Contributions under the Plan or, if the Plan provides that the minimum contribution requirement shall be met in another plan, such other plan.
|
13.04
|
Special Limitations and Allocation in Multiple Plans.
|
13.05
|
Minimum Vesting Schedules.
|
Years of
Vesting Service
|
Vested
Percentage
|
Less than 3
|
0%
|
3 or more
|
100
|
14.01
|
ESOP Provisions.
|
14.02
|
Investment in Employer Securities.
|
14.03
|
Dividends on Company Stock.
|
14.04
|
ESOP Diversification.
|
14.05
|
Voting Rights.
|
14.06
|
Forms of Distribution.
|
(a)
|
Subject to the provisions of paragraph (c), the Committee may, in its absolute discretion, determine whether a Participant's Distributable Benefit shall be made in the form of Company Stock or in the form of cash.
|
(b)
|
"Distributable Benefit" means a Participant's total benefits in the Plan that is determined based on the number of shares of Company Stock allocated to the Participant's Accounts, and by applying the value (if any) of his ESOP Allocations not invested in shares of Company Stock towards the purchase of Company Stock, with the objective of obtaining the maximum number of whole shares of Company Stock for distribution to the Participant by combining any fractional shares so acquired with any fractional shares credited to his Accounts.
|
(c)
|
In the event that the Committee shall determine that a Participant's Distributable Benefit is to be paid in the form of a cash distribution, the Committee shall notify the Participant in advance of making such a distribution. The Participant shall have a reasonable period of time after receiving the notice, not to exceed two weeks without Committee approval, in which to elect instead to receive his Distributable Benefit in the form of Company Stock.
|
14.07
|
Put Option.
|
(a)
|
For purposes of this Article XVI, "Distributee" means:
|
(1)
|
The Participant or Beneficiary (including an Alternate Payee under Section 15.02) receiving the distribution of the Company Stock;
|
(2)
|
Any other party to whom the stock is transferred by gift or by reason of death; and
|
(3)
|
The trustee of an individual retirement account (as defined under Code Section 408) or of a tax-qualified retirement plan to which all or any portion of the distributed Company Stock is transferred pursuant to a tax-free "rollover" transaction satisfying the requirements of Code Section 402.
|
(b)
|
"Freely Tradeable Stock" means Company Stock that, at the time of reference is "Publicly Traded" as that term is defined under Treasury Regulation Section 54.4975-(b)(1)(iv) and is not subject to a "Trading Limitation" as that term is defined under Treasury Regulation Section 54.4975-7(b)(10).
|
(c)
|
During the sixty (60) day period following the date the Company Stock first becomes distributable, the Distributee shall have the right to require the Company to purchase all or a portion of the distributed Company Stock held by the Distributee. A Distributee shall exercise this right by giving written notice to the Company of the number of shares of distributed Company Stock that the Distributee intends to sell to the Company. This notice must be given within the sixty (60) day period following the date the Company Stock first becomes distributable. The purchase price to be paid for the Company Stock shall be its fair market value determined as of the Valuation Date coincident with or immediately preceding the date of the distribution.
|
(d)
|
If a Distributee does not exercise his Put Option right under paragraph (c), the option right shall temporarily lapse. Upon the expiration of the sixty (60) day period following the Accounting Date of the Plan Year in which the sixty (60) day option period expires, the Company shall provide the non-electing Distributee (if he is then a shareholder of record) with a notice (the "Notice of Value") indicating the fair market value of the Company Stock, determined by an independent appraiser who meets the requirements of Code Section 401(a)(28)(C). During the sixty (60) day period following receipt of the Notice of Value, the Distributee shall have the right to require the Company to purchase all or any portion of the distributed Company Stock with the purchase price based on the amount stated in the Notice of Value. If a Distributee fails to exercise his option right under this paragraph with respect to any portion of the distributed Company Stock, no further options shall be applicable under this Plan with respect to the stock, and the Company shall have no further purchase obligations.
|
(e)
|
In the event that a Distributee shall exercise a Put Option, then the Company shall have the option of paying the purchase price of the Company Stock which is subject to the Put Option ("Option Stock") under either of the following methods:
|
(1)
|
A lump sum payment of the purchase price within thirty days after the date upon which the Put Option is exercised ("Exercise Date"); or
|
(2)
|
A series of six equal installment payments, with the first payment to be made within thirty days following the Exercise Date and the five remaining payments to be made on the five (5) anniversary dates of the Exercise Date.
|
(f)
|
The Put Option shall be effective solely against the Company and shall not obligate the Plan in any manner. The Plan may, with the Company's consent, elect to purchase any Company Stock that otherwise must be purchased by the Company pursuant to a Distributee's exercise of his Put Option.
|
(g)
|
Except as is expressly provided above with respect to any distributed Company Stock that is not Freely Tradeable Stock, no Participant shall have any Put Option rights with respect to Company Stock distributed under this Plan, and neither the Company nor this Plan shall have any obligation whatsoever to purchase any distributed Company Stock from any Participant or other Distributee.
|
14.08
|
Application of Article XIV to Non-ESOP Allocation.
|
15.01
|
Allocation of Responsibility among Fiduciaries for Plan and Trust Administration.
|
(a)
|
for the exclusive purpose of:
|
(1)
|
providing benefits to such persons; and
|
(2)
|
defraying reasonable expenses of administering the Plan;
|
(b)
|
with the care, skill, prudence and diligence under the circumstances then prevailing that a prudent man acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims.
|
15.02
|
Alienation or Assignment of Benefits.
|
15.03
|
Headings.
|
15.04
|
Construction of the Plan.
|
15.05
|
Correction of Errors.
|
15.06
|
Legally Incompetent.
|
15.07
|
Successor Organization.
|
15.08
|
Minimum Benefit in Successor Plan.
|
15.09
|
Application of Plan Provisions.
|
15.10
|
Severability of Provisions.
|
15.11
|
Applicable Law.
|
15.12
|
Entire Plan.
|
|
Daktronics, Inc.
|
|
|
|
By: /s/ Carla S. Gatzke
|
|
Carla S. Gatzke
|
|
Vice President and Secretary
|