Exhibit 10.40.2
AMENDMENT TO
FEDERATED DEPARTMENT STORES, INC.
PROFIT SHARING 401(k) INVESTMENT PLAN
The Federated Department Stores, Inc. Profit Sharing 401(k) Investment Plan (the Plan) is
hereby amended, effective as of April 1, 1997 and in order to include as part of the Plan that was
executed by the Plan sponsor on February 5, 2002 certain Plan provisions that had been modified
earlier by the Plan sponsor but inadvertently had not been included as part of such February 5,
2002-executed Plan, in the following respects:
1. Section 1.26 of the Plan is amended in its entirety to read as follows:
1.26 Savings Agreement means, with respect to a Participant and for
any specified period that the agreement is in effect, any agreement enrolled in (or
deemed enrolled in under the provisions of the Plan) by the Participant and under
which the Participant elects (or is deemed to elect) that his or her Covered
Compensation for the specified period is to be reduced on a pre-tax basis and/or
after-tax basis in 1% increments up to 15% (or, on or after January 1, 2002, up to
25%) or that no part (0%) of his or her Covered Compensation is to be reduced on
either a pre-tax or after-tax basis. Any Savings Agreement is subject to the
following provisions:
1.26.1 In no event may a Participants Covered Compensation for any specified
period be reduced on either a pre-tax or after-tax basis or on an aggregate basis by
more than 15% (or, on or after January 1, 2002, by more than 25%) pursuant to a
Savings Agreement. The Committee may, in order to make it easier for the Plan to
meet the limits set forth in Sections 4A and 5A below, further restrict the amount
by which any Participant who is then believed to be a Highly Compensated Employee
may have his or her Covered Compensation reduced on either a pre-tax or after-tax
basis or on an aggregate basis for a specified period pursuant to a Savings
Agreement to some lower percent.
1.26.2 Also, in no event may a Participants Covered Compensation be reduced on
a pre-tax basis for any calendar year by more than $9,500 (or any higher amount to
which this figure is adjusted by the Secretary of the Treasury or his or her
delegate for such calendar year pursuant to Section 402(g) of the Code).
1.26.3 Except as is otherwise provided in Sections 1.26.4, 1.26.5, and 1.26.6
below, a Savings Agreement or amended Savings Agreement must be affirmatively
enrolled in by a Participant on a form prepared or approved for this purpose by the
Committee and filed with a Plan representative, by a communication to a Plan
representative under a telephonic system approved by the Committee, or
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under any other method approved by the Committee, with the specific method or
methods to be used to be chosen in its discretion by the Committee. The Committee
may choose different methods to apply to Participants in different situations
(e.g., requiring a form to be used for new Participant but a telephonic
system to be used for other Participants). Regardless of what method is to be used
for a Participant, if the Participant properly enrolls in a Savings Agreement or
amends such an agreement under the method for doing so which applies to him or her
and the type of election he or she is making, for all other provisions of the Plan
he or she will be deemed to have filed with a Plan representative such agreement
or amendment on the day he or she completes all steps required by such method to
enter into such agreement or amendment. Any Savings Agreement or amendment of a
Savings Agreement which is made by a Participant pursuant to the provisions of this
Section 1.26.3 shall become effective as of the first date after such agreement or
amendment is filed with a Plan representative on which the Committee can reasonably
put such agreement or amendment into effect.
1.26.4 Any election made by a Participant who first becomes a Participant in
the Plan prior to January 1, 1999, and who does not otherwise affirmatively enroll
in a Savings Agreement that becomes effective pursuant to the provisions of Section
1.26.3 above by the first date on which he or she is entitled to receive
Compensation from the Employer (for purposes of this Section 1.26.4, the
Participants first pay day), shall be deemed to have automatically enrolled in a
Savings Agreement under which no part (0%) of the Participants Covered Compensation
is to be reduced on a pre-tax or after-tax basis. Such initially deemed Savings
Agreement shall become effective on the Participants first pay day.
1.26.5 Any Participant who first becomes a Participant in the Plan on or after
January 1, 1999, and who does not otherwise affirmatively enroll in a Savings
Agreement that becomes effective pursuant to the provisions of Section 1.26.3 above
by the first date on which he or she is entitled to receive Compensation from the
Employer (for purposes of this Section 1.26.5, the Participants first pay day),
shall be deemed to have automatically enrolled in a Savings Agreement under which 3%
of the Participants Covered Compensation is reduced on a pre-tax basis and under
which 0% of his or her Covered Compensation is reduced on an after-tax basis, with
such initially deemed Savings Agreement becoming effective on the Participants
first pay day, provided that (1) he or she receives a notice from the Employer
explaining his or her rights to elect to have no or a different percent of his or
her Covered Compensation reduced on a pre-tax basis under the Plan by affirmatively
enrolling in a Savings Agreement pursuant to the provisions of Section 1.26.3 above
and, after receiving such notice, (2) he or she is given a reasonable period before
the Participants first pay day to make such an election. If such conditions are not
met, then such Participant shall be deemed to have automatically enrolled in a
Savings Agreement, to be effective as of the Participants first pay day, under
which no part (0%) of the
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Participants Covered Compensation is to be reduced on a pre-tax or after-tax
basis.
1.26.6 Any Participant who is reinstated as an active Participant in the Plan
(pursuant to Section 3.4 below) after having previously been an active Participant
in the Plan, and when the Savings Agreement that had been in effect for the
Participant on the latest date he or she last previously had been an active
Participant no longer is in effect, and who does not otherwise affirmatively enroll
in a Savings Agreement that becomes effective pursuant to the provisions of Section
1.26.3 above by the first date after such reinstatement that the Participant is
entitled to receive Compensation from the Employer (for purposes of the Section
1.26.6, the Participants first post-reinstatement pay day), shall be deemed to
have automatically enrolled in a Savings Agreement under which no part (0%) of the
Participants Covered Compensation is to be reduced on a pre-tax or after-tax basis.
Such deemed Savings Agreement shall become effective on the Participants first
post-reinstatement pay day.
1.26.7 Any Savings Agreement or amended Savings Agreement that becomes
effective for a Participant under any of the foregoing provisions of this Section
1.26 shall remain in effect until the earlier of (1) the date the next amended
Savings Agreement enrolled in by the Participant pursuant to the provisions of
Section 1.26.3 above becomes effective or (2) the expiration of a reasonable
administrative period after the Participant ceases to be an Employee. The
reasonable administrative period referred to in clause (2) of the immediately
preceding sentence shall be set by the Committee in order to permit the Plan a
reasonable period of time to render the applicable Savings Agreement ineffective and
generally will last for no more than 60 days after the Participant ceases to be an
Employee.
2. Section 4.6 of the Plan is amended in its entirety to read as follows:
4.6 Rollover Contributions. A Covered Employee may, whether or not he
or she is yet a Participant in the Plan under the provisions of Section 3 above,
cause any distribution applicable to him or her from another plan which he or she
certifies is an eligible rollover distribution (within the meaning of Section 402(c)
of the Code) to be paid directly from such other plan to this Plan pursuant to the
terms of Section 401(a)(31) of the Code, (1) provided that the Committee receives a
written notice from the plan administrator of such other plan that the other plan
has received a determination letter from the Internal Revenue Service concluding
that the other plan is qualified as a tax-favored plan under Section 401(a) of the
Code or that the other plan is intended to be such a tax-favored plan and either is
intending to obtain such determination letter or is not required under applicable
Internal Revenue Service rules to obtain such a determination letter, and (2)
provided that the Committee has no information which shows that such payment is
other than an eligible rollover contribution under Section 402(c) of the Code.
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Any such payment to the Plan shall be referred to as a Rollover Contribution
under the Plan. In addition, the following provisions shall apply to the making of
any Rollover Contribution to the Plan:
4.6.1 If a Covered Employee makes a Rollover Contribution to the Plan but is
not a Participant in the Plan under the provisions of Section 3 above, he or she
shall still be considered a Participant under the other provisions of the Plan to
the extent such other provisions concern the establishment of an Account to reflect
such contribution, the investment, crediting of Plan earnings and losses, loaning,
withdrawing, and distribution of such Account, and the administration of the Plan
with respect to such Account, but he or she shall not be considered a Participant
for any other purposes of the Plan until he or she qualifies as a Participant under
the provisions of Section 3 above.
4.6.2 Further, subject to such administrative rules as may be adopted by the
Committee, a Rollover Contribution that is made by a Covered Employee to the Plan
from another plan may include a note that reflects a loan that was previously made
by the other plan to the Covered Employee and that is still outstanding as of the
date of the Rollover Contribution, provided that all of the following conditions are
met:
(a) The Committee receives information (e.g., a certification of the
plan administrator of the other plan) that permits it to reasonably conclude that
such loan was not previously included in the Covered Employees income for Federal
income tax purposes by reason of the provisions of Section 72(p) of the Code and
that such loan did not qualify as a prohibited transaction under Section 4975 of the
Code or Section 406 of ERISA by reason of the provisions of Section 4975(d)(1) of
the Code or Section 408(b)(1) of ERISA;
(b) The loan is secured by a portion of the amount of the Rollover Contribution
that would be sufficient security for the loan under the Plan and the Committees
policies if such loan had been made under the Plan at the time of the Rollover
Contribution; and
(c) The only changes to the loan that need to be made by reason of its rollover
to the Plan and in order to administer the loan properly under the Plan are to
change the obligee under the loan to the Plan and, if necessary, to change minor
administrative procedures concerning the payment of the loan (e.g., to
change the dates on which payments under the loan will be paid to conform to the pay
dates that will apply to the Covered Employee while employed by the Employer, to
permit payments to be made by payroll deductions from the Covered Employees pay
from the Employer, to credit all payments on the loan to the Account to which the
Rollover Contribution of which the loan note is a part is allocated, and to invest
any payment on the loan to the Investment Fund or Funds in which such Account is
invested at the time of the payment).
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If the Committee permits a loan note to be included as part of a Covered Employees
Rollover Contribution to the Plan under the provisions of this Section 4.6.2, then
it may make such changes to the loan that are described in paragraph (c) above and
otherwise administer the loan in accordance with the terms of the loan note. Such
loan shall not be deemed to be a loan made by the Plan under the terms of Section
6.9 below.
3. Section 6.12.3 of the Plan is amended in its entirety to read as follows:
6.12.3 Except as is otherwise provided in the following provisions of this
Section 6.12.3, a Participant who was not a participant in any Prior Plan on or
before March 31, 1997 shall have a vested interest in any Matching Account of his or
hers as of any specific date equal to a percentage (for purposes of this Section
6.12.3, the vested percentage) of such Account, determined in accordance with the
immediately following schedule (based upon his or her years of Vesting Service
completed to the subject date):
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Years of Vesting Service |
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Vested Percentage |
Less than 3 |
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0 |
% |
3 but less than 4 |
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20 |
% |
4 but less than 5 |
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40 |
% |
5 but less than 6 |
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60 |
% |
6 but less than 7 |
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80 |
% |
7 or more |
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100 |
% |
(a) Notwithstanding the foregoing and except as is otherwise provided in the
following provisions of this Section 6.12.3, a Participant who was not a participant
in any Prior Plan on or before March 31, 1997 shall have a vested interest in any
Matching Account of his or hers as of any specific date that occurs on or after
January 1, 2002 equal to a vested percentage of such Account that is determined in
accordance with the immediately following schedule (based upon his or her years of
Vesting Service completed to the subject date) if he or she completes at least one
Hour of Service on or after January 1, 2002:
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|
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Years of Vesting Service |
|
Vested Percentage |
Less than 2 |
|
|
0 |
% |
2 but less than 3 |
|
|
20 |
% |
3 but less than 4 |
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|
40 |
% |
4 but less than 5 |
|
|
60 |
% |
5 but less than 6 |
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|
80 |
% |
6 or more |
|
|
100 |
% |
(b) Notwithstanding the foregoing provisions of this Section 6.12.3, a
Participant who was not a participant in any Prior Plan on or before March 31, 1997
shall be fully vested in any Matching Account of his or hers if he or she attains
his or her Normal Retirement Age, incurs a Total Disability, or dies while, in any
such case, still an Employee.
(c) In addition, and also notwithstanding the foregoing provisions of this
Section 6.12.3, a Participant who was not a Participant in any Prior Plan on or
before March 31, 1997 shall be fully vested in any Matching Account of his or hers
if he or she ceases to be an Employee by reason of the closing or sale (not
including the merger into any Associated Employer or into any division or facility
of an Associated Employer) of any Associated Employer (or any division or facility
of an Associated Employer) while he or she is employed by such Associated Employer
(or division or facility of such Associated Employer).
(d) Further, and also notwithstanding the foregoing provisions of this Section
6.12.3, a Participant who was not a Participant in any Prior Plan on or before March
31, 1997 shall be fully vested in any Matching Account of his or hers if he or she
ceases to be an Employee by reason of (and in accordance and in a manner consistent
with) the Employer taking actions (including a written notification) to terminate
his or her employment with the Employer at some point during the period that begins
on July 1, 1999 and ends on December 31, 2000 because of the Employers outsourcing
to a corporation or other organization (that is not part of an Associated Employer)
of certain facility management functions which generally involve the non-retailing
operations of the Employers facilities.
4. Section 7.3.2 of the Plan is amended in its entirety to read as follows:
7.3.2 Any such hardship withdrawal must also be necessary to satisfy the need
for the withdrawal. A withdrawal shall be deemed necessary to satisfy such need if,
and only if, all of the following conditions are certified to by the Participant:
(a) The withdrawal is not in excess of the amount of the immediate and heavy
financial need of the applicable Participant which has caused
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the Participant to request the withdrawal. The amount of an immediate and
heavy financial need of the Participant may include an amount permitted by the
Committee under uniform rules to cover Federal income taxes or penalties which can
reasonably be anticipated to result to the Participant from the distribution;
(b) The Participant has obtained or is obtaining by the date of the withdrawal
all withdrawals (other than hardship withdrawals) and all nontaxable (at the time of
the loans) loans then available under the Plan and all other plans of the Associated
Employers, including any loans then available under Section 6.9 above and any
withdrawal then available under Section 7.1 above;
(c) The Participant shall be suspended from making employee contributions or
having contributions made by reason of his or her election pursuant to an
arrangement described in Section 401(k) of the Code under the Plan, or any other
plan of the Associated Employer which is qualified under Section 401(a) of the Code,
for a one year period (or, when the withdrawal payment is made on or after January
1, 2002, for a six month period) beginning on the date on which the withdrawal
payment is made;
(d) The Participant shall be suspended from making employee contributions or
having contributions made by reason of his or her election under any plan of
deferred compensation of an Associated Employer which is not qualified under Section
401(a) of the Code, including for purposes hereof a stock option or stock purchase
plan, for at least one year (or, when the withdrawal payment is made on or after
January 1, 2002, six months) after the date on which the withdrawal payment is made;
and
(e) The Participant cannot relieve such need through any other resources.
5. Section 7.4 of the Plan is amended in its entirety to read as follows:
7.4 Suspension of Savings Contributions. Notwithstanding any other
provision in the Plan to the contrary, the ability of any Participant who makes a
withdrawal under Sections 7.2 and 7.3 above because of a hardship shall
automatically be suspended from making Savings Contributions under this Plan for the
one year period (or, when the withdrawal payment is made on or after January 1,
2002, the six month period) beginning on the date on which the withdrawal payment is
made. The Participant may elect to have Savings Contributions resume being made on
his or her behalf as of any pay day which occurs at least one year (or, when the
withdrawal payment is made on or after January 1, 2002, six months) after such
withdrawal date (or any subsequent day) only by filing a new Savings Agreement with
a Plan representative an administratively reasonable number of days prior to such
pay day.
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6. Section 7.5 of the Plan is amended in its entirety to read as follows:
7.5 Reduction of Post-Withdrawal Pre-Tax Savings Contributions.
Notwithstanding any other provision in the Plan to the contrary, any Participant who
makes a withdrawal under Sections 7.2 and 7.3 above because of a hardship prior to
January 1, 2002 may not elect to have Pre-Tax Savings Contributions made to this
Plan, and/or to have any contributions made to any other plans of the Associated
Employers by reason of an election pursuant to any arrangement described in Section
401(k) of the Code, for the Participants tax year next following his or her tax
year in which he or she receives such withdrawal which are in the aggregate in
excess of an amount equal to: (1) the applicable limit under Section 402(g) of the
Code for such next tax year (e.g., $9,500, as increased by the Secretary of
the Treasury or his or her delegate for such next tax year); less (2) the aggregate
sum of the Pre-Tax Savings Contributions made on behalf of the Participant to this
Plan, and the contributions made on his or her behalf to any other plans of the
Associated Employers by reason of any arrangement described in Section 401(k) of the
Code, for the Participants tax year in which such withdrawal is made. However, the
provisions of this Section 7.5 shall not apply to any withdrawal payment that is
made on or after January 1, 2002.
IN ORDER TO EFFECT THE FOREGOING PLAN REVISIONS, the sponsor of the Plan hereby signs this
Plan amendment this 19th day of July, 2002.
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FEDERATED DEPARTMENT STORES,
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INC. |
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By: /s/ David W. Clark |
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Title: SVP Human Resources |
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