HD » Topics » contributions AND ACCOUNTS

This excerpt taken from the HD 8-K filed Aug 20, 2007.

contributions AND ACCOUNTS

3.1           Annual Benefit Allocation.  For each Plan Year, each Active Participant shall have credited to such Active Participant’s Account an amount equal to the product of (i) the maximum percentage rate of matching contributions under FutureBuilder for such Plan Year; and (ii) the Active Participant’s Compensation for such Plan Year in excess of the Section  401(a)(17) Limitation.

3.2           Crediting of Stock Units.  The amount determined pursuant to Section 3.1 for an Active Participant for a Plan Year shall be credited to the Active Participant’s Account as of the Allocation Date for such Plan Year and shall be expressed in terms of whole and fractional Stock Units. The number of Stock Units credited to an Active Participant’s Account for a Plan Year shall be determined by dividing (i) the amount determined for the Active Participant in Section  3.1 for such Plan Year, by (ii) the per share fair market value of Company Stock on the Allocation Date for such Plan Year.

3.3           Participant Accounts.

(a)           Establishment of Accounts.  The Administrative Committee shall establish and maintain an Account on behalf of each Participant.  Each Account shall be credited with the amount of Stock Units described in Section 3.2.  Each Participant Account shall be maintained until

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the value thereof has been forfeited or paid to or on behalf of such Participant or the Participant’s Beneficiary.

(b)           Nature of Contributions and Accounts.  The Stock Units credited to a Participant’s Account shall be represented solely by bookkeeping entries, and no monies or other assets shall actually be set aside for such Participant.  Except as provided in Article VI, all payments to a Participant under the Plan shall be made from the general assets of the Company.  The Administrative Committee or the Board shall allocate the total liability to pay benefits under the Plan among the Participating Companies in such manner and amount as the Administrative Committee or the Board (as applicable) in its sole discretion deems appropriate.  Any assets which may be acquired by a Participating Company in anticipation of its obligations under the Plan shall be part of the general assets of such Participating Company.  A Participating Company’s obligation to pay benefits under the Plan constitutes a mere promise of such Participating Company to pay such benefits, and a Participant or Beneficiary shall be and remain no more than an unsecured, general creditor of such Participating Company.

(c)           Account Balance.  Participant’s accrued benefit under the Plan at any time shall be equal to the value of the Participant’s Account balance; provided, as described in Section 3.4 and Article IV, only the portion of a Participant’s Account balance that is vested shall be payable to the Participant.

(d)           Cash Dividends.  For Stock Units that have been credited to a Participant’s Account on or before a record date for Company Stock cash dividends and that remain credited to the Participant’s Account through the corresponding dividend payment date, the Administrative Committee shall credit to such Participant’s Account a dollar amount equal to the amount of cash dividends that would have been paid on the Participant’s Stock Units if each Stock Unit constituted one share of Company Stock.  Such dollar amount then will be converted into a number of Stock Units equal to the number of full and fractional shares of Company Stock that could have been purchased, at fair market value on the dividend payment date, with such dollar amount.

(e)           Adjustments for Stock Dividends and Splits.  In the event of any subdivision or combination of the outstanding shares of Company Stock, by reclassification, stock split, reverse stock split or otherwise, or in the event of the payment of a stock dividend on Company Stock, or in the event of any other increase or decrease in the number of outstanding shares of Company Stock, other than the issuance of shares for value received by the Company or the redemption of shares for value, the number of Stock Units credited to a Participant’s Account shall be adjusted upward or downward, as the case may be, to reflect the subdivision or combination of the outstanding shares.  The amount of increase or decrease in the number of Stock Units in such event will be equal to the adjustment that would have been made if each Stock Unit credited to a Participant’s Account immediately before the event constituted one share of Company Stock.

(f)            Value of Account.  The value of a Participant’s Account as of any date shall be equal to the product of (i) the number of Stock Units credited to the Participant’s Account as of

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such date (as determined in accordance with the preceding subsections), and (ii) the per share fair market value of Company Stock on such date.

(g)           Value of Company Stock.  For all purposes under the Plan for which the value of Company Stock must be determined as of any particular date, the fair market value per share of Company Stock on such date shall be the closing price of Company Stock on the New York Stock Exchange on such date or, if there were no sales on such date, the closing price on the nearest preceding date in which sales occurred. If, for any reason, the fair market value per share of Company Stock cannot be ascertained or is unavailable for a particular date, the fair market value of Company Stock on such date shall be determined as of the nearest preceding date on which the fair market value can be ascertained pursuant to the terms hereof.

3.4           Vesting.  Stock Units credited to a Participant’s Account for Plan Years beginning before January 1, 1998, shall vest in accordance with the provisions applicable to the vesting of ESOP Contributions under FutureBuilder.  Stock Units credited to a Participant’s Account for Plan Years beginning on or after January 1, 1998, shall vest in accordance with the provisions applicable to the vesting of matching contributions under FutureBuilder.

3.5           Notice to Participant of Account Balances.  At least once for each Plan Year, the Administrative Committee shall cause a written statement of a Participant’s Account balance to be distributed to the Participant.

3.6           Good Faith Valuation Binding.  In determining the value of the Accounts, the Administrative Committee shall exercise its best judgment, and all such determinations of value (in the absence of bad faith) shall be binding upon all Participants and their Beneficiaries.

3.7           Errors and Omissions in Accounts.  If an error or omission is discovered in the Account of a Participant or in the amount credited to a Participant’s Account, the Administrative Committee, in its sole discretion, shall cause appropriate, equitable adjustments to be made as soon as administratively practicable following the discovery of such error or omission.

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