Exhibit 10(b)

RICHARDSON ELECTRONICS, LTD.

EMPLOYEES STOCK OWNERSHIP PLAN

As Amended and Restated

Effective June 1, 1997

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TABLE OF CONTENTS

 

PREAMBLE    1 ARTICLE I—TITLES AND PURPOSE    2 1.1    Titles    2 1.2   
Purpose    2 1.3    Exclusive Benefit    2 1.4    Status of Plan    2 ARTICLE
II—DEFINITIONS    3 2.1    Account    3 2.2    Account Balance    3 2.3   
Administrator    3 2.4    Anniversary Date    3 2.5    Annual Addition    4 2.6
   Beneficiary    4 2.7    Benefit Commencement Date    4 2.8    Break in
Service    4 2.9    Code    5 2.10    Committee    5 2.11    Compensation    5
2.12    Computation Period    6 2.13    Effective Date    6 2.14    Employee   
6 2.15    Employer    7 2.16    Entry Date    7 2.17    ERISA    7 2.18    Hour
of Service    7 2.19    Key Employee    9 2.20    Leave of Absence    11 2.21   
Limitation Year    11 2.22    Non-Key Employee    11 2.23    Normal Retirement
Date    11 2.24    Participant    11 2.25    Permanent Disability    11 2.26   
Plan    11 2.27    Plan Year    11 2.28    Qualified Domestic Relations Order   
12 2.29    Related Employer    12 2.30    Richardson    12 2.31    Spouse    12
2.32    Stock    13

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2.33    Termination of Employment    13 2.34    Top-Heavy Determination Date   
13 2.35    Top-Heavy Year    14 2.36    Trust    15 2.37    Trust Agreement   
15 2.38    Trustee or Trustees    15 2.39    Valuation Date    15 2.40    Vested
Account Balance    16 2.41    Year of Service    16 ARTICLE III—PARTICIPATION   
17 3.1    Eligibility to Participate    17 3.2    Duration of Participation;
Re-Employment    17 ARTICLE IV—CONTRIBUTIONS BY EMPLOYER    19 4.1    Amount   
19 4.2    Time for Payment    19 ARTICLE V—CONTRIBUTIONS BY PARTICIPANTS    20
5.1    Contributions by Participants    20 ARTICLE VI—ALLOCATION OF EMPLOYER
CONTRIBUTIONS    21 6.1    Manner of Allocation    21 6.2    Allocations in
Top-Heavy Years    22 6.3    Administrator to Notify Trustee    23 ARTICLE
VII—ACCOUNTS OF PARTICIPANTS    24 7.1    Separate Accounts    24 7.2   
Adjustments to Accounts    24 7.3    Crediting of Employer Contributions    25
7.4    Crediting of Forfeitures    25 7.5    Limitation on Allocations    25 7.6
   Combined Plan Limitation    28 7.7    Correction of Error    29 7.8   
Transfer Accounts    29

 

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ARTICLE VIII—VESTING OF INTEREST IN TRUST    31 8.1    Normal Retirement    31
8.2    Disability Retirement    31 8.3    Death    31 8.4    Other Termination
of Employment    31 8.5    Treatment of Forfeited Amounts; Reinstatement    32
8.6    Computation of Years of Service    32 8.7    Vesting on Termination of
Trust or Termination of Employer’s Agreement to Contribute    33 8.8    Vesting
Following Plan Amendment    33 8.9    Vesting Following Partial Distribution   
33 ARTICLE IX—PAYMENT OF VESTED ACCOUNT BALANCES    35 9.1    Benefit
Commencement Date    35 9.2    Payment to Participants    36 9.3    Payment to
Beneficiaries    37 9.4    Extent of Further Participation in Trust    39 9.5   
Payment to Persons Under Legal Disability    39 9.6    Payment in Installments
   39 9.7    Compliance with Regulations    42 9.8    Distributions of Stock and
Dividends    42 9.9    Right of First Refusal and Options on Stock    42 9.10   
Direct Rollovers    43 9.11    Withdrawals Due to Permanent Disability    44
ARTICLE X—DESIGNATION OF BENEFICIARIES    45 10.1    Participants to Name
Beneficiaries    45 10.2    No Beneficiary Designated; Death of Beneficiary   
45 10.3    No Liability for Payment to Beneficiaries    45 10.4    Qualified
Domestic Relations Orders    46 ARTICLE XI—FIDUCIARY CAPACITY AND RESPONSIBILITY
   47 11.1    General Fiduciary Standard of Conduct    47 11.2    Allocation of
Responsibility Among Fiduciaries    47 11.3    Administrator    48 11.4   
Powers and Duties of Administrator    48 11.5    Claims Procedure    49 11.6   
Indemnification by Employer    50 11.7    Service in Multiple Capacities    50

 

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11.8    Voting of Stock by Participants and Beneficiaries    50 ARTICLE XII—THE
COMMITTEE    52 12.1    Appointment and Membership    52 12.2    Compensation
and Expenses    52 12.3    Committee Procedures and Actions    52 12.4   
Resignation or Removal of Committee Member    53 12.5    Committee/Administrator
Decisions Final    53 ARTICLE XIII—THE TRUST    54 13.1    Trust Agreement    54
ARTICLE XIV—LOANS TO PARTICIPANTS; LOANS TO ACQUIRE STOCK; DIVERSIFICATION
ELECTIONS    55 14.1    Loans to Participants    55 14.2    Loans to Acquire
Stock    56 14.3    Diversification Elections    57 ARTICLE XV—AMENDMENT    59
15.1    Right to Amend    59 15.2    Retroactivity of Amendments    59 15.3   
Limitations on Right to Amend    59 ARTICLE XVI—ADOPTION, WITHDRAWAL AND
TERMINATION    60 16.1    Adoption of Plan    60 16.2    Withdrawal from Plan   
60 16.3    Termination    60 ARTICLE XVII—MISCELLANEOUS    61 17.1    No
Reversion to Employer    61 17.2    Evidence of Action by Necessary Parties   
62 17.3    Rights of Participants Limited    62 17.4    Assignment and
Alienation    62 17.5    Missing Participants or Beneficiaries    64 17.6   
Merger and Consolidation of Plan    65 17.7    Severability    65 17.8   
Applicable Law    65

 

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17.9    Method of Accounting    65 17.10    Veterans’ Rights    66 ARTICLE
XVIII—REVISED VESTING PROVISIONS    67 18.1    Scope and Effective Date    67
18.2    Definitions    67 18.3    General Vesting Rules    68 18.4   
Transitional Rules    69

 

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PREAMBLE

THIS PLAN is executed at LaFox, Illinois, this 29th day of September, 2000 by
RICHARDSON ELECTRONICS, LTD., a corporation organized and existing under the
laws of the State of Delaware (“Richardson”).

W I T N E S S E T H:

WHEREAS, effective as of June 1, 1987, Richardson adopted the Richardson
Electronics, Ltd. and Subsidiaries Employees Stock Ownership Plan and Trust (the
“Plan”), a stock bonus plan qualified under Section 401(a) of the Internal
Revenue Code of 1986 (the “Code”) and entitled to tax exemption under
Section 501(a) of the Code and an employee stock ownership plan within the
meaning of Section 4975(e)(7) of the Code, with William G. Seils and Scott
Hodes, as Trustees; and

WHEREAS, Richardson has reserved the right to amend the Plan at any time and has
amended the Plan on December 21, 1988, January 17, 1989 and May 30, 1990; and

WHEREAS, on February 23, 1990 Marine Midland Bank, N.A.(known as HSBC Bank USA,
effective March 29, 1999) replaced Messrs. Hodes and Seils as Trustee of the
trust forming a part of the Plan, pursuant to a Trust Agreement by and between
said bank and Richardson and dated February 23, 1990; and

WHEREAS, on July 14, 1994, the Plan was amended and restated in order to comply
with the applicable provisions of the Tax Reform Act of 1986, other applicable
legislation and applicable regulations and rulings thereunder and was
subsequently further amended.

WHEREAS, as Richardson now desires further to amend the Plan order to
incorporate all amendments required in order to comply with the applicable
provisions of the Uniformed Services Employment and Reemployment Rights Act of
1974, the Small Business Job Protection Act of 1996, the Taxpayer Relief Act of
1997 and other applicable legislation and applicable regulations and rulings
thereunder.

NOW, THEREFORE, the Plan is hereby restated effective June 1, 1997 (except as
otherwise stated herein) to read as follows:

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ARTICLE I

TITLES AND PURPOSE

1.1 Titles

The Plan shall continue to be known as the RICHARDSON ELECTRONICS, LTD.
EMPLOYEES STOCK OWNERSHIP PLAN.

1.2 Purpose

The purpose of the Plan is to establish a retirement fund out of the profits of
the Employer which will help to provide for the future security of the
Participants.

1.3 Exclusive Benefit

The Trust shall be for the exclusive benefit of the Participants and their
Beneficiaries. In no event shall the income or principal of the Trust be paid or
revert to the Employer or any Related Employer, except as otherwise provided in
Section 17.1.

1.4 Status of Plan

The Plan is intended to continue to be a stock bonus plan qualified under
Section 401(a) of the Code which is an employee stock ownership plan within the
meaning of Code Section 4975(e)(7). As such, the Plan shall invest primarily in
qualifying employer securities [within the meaning of Section 4975(e)(8) of the
Code].

 

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ARTICLE II

DEFINITIONS

When used herein, the following words and terms shall have the respective
meanings hereinafter set forth, unless a different meaning is clearly required
by the context. Whenever appropriate, words used in the singular shall be deemed
to include the plural, and vice versa, and the masculine gender shall be deemed
to include the feminine and neuter genders, unless a different meaning is
clearly required by the context.

2.1 “Account”: Collectively, all of the following separate accounts maintained
under the Plan for the benefit of a Participant, including all adjustments
thereto under Article VII, unless a specific reference is made to one of such
separate accounts:

 

  (a) The separate Employer Contribution Account maintained for each Participant
for the purpose of recording his share of the contributions made by the Employer
and forfeitures;

 

  (b) In the case of a Participant who is re-employed after incurring a Break in
Service, the separate Pre-Break Account, if any, required to be maintained under
Section 8.9(b); and

 

  (c) In the case of a Participant for whom a Transfer Account is being
maintained under Section 7.8 for the purpose of recording his share of the
assets transferred from the Richardson Electronics, Ltd. Employees
Profit-Sharing Plan, such Transfer Account.

The term “Account” shall not, unless otherwise specifically provided herein,
include the Excess Contribution Account, if any, or the Excess Forfeiture
Account, if any, established pursuant to Section 7.5, or the Suspense Account,
if any, established pursuant to Section 14.2(c). There shall also be maintained,
in the case of a Participant who incurs a Break in Service, a Forfeiture
Suspense Account in accordance with Section 18.3(d).

2.2 “Account Balance”: The total amount held for the benefit of a Participant in
his Account (or in the specific separate account referred to), as determined on
the immediately preceding Anniversary Date in accordance with the provisions of
Article VII.

2.3 “Administrator”: The person administering the Plan pursuant to Section 11.3.

2.4 “Anniversary Date”: The last day of each Plan Year.

 

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2.5 “Annual Addition”: With respect to a Participant for any Limitation Year,
the sum of (a) Employer contributions allocated on behalf of such Participant
for such Limitation Year under the Plan and under any other qualified defined
contribution plan maintained by the Employer; (b) forfeitures, if any, allocated
on behalf of such Participant for such Limitation Year under any such qualified
defined contribution plan; (c) such Participant’s voluntary non-deductible
contributions under any qualified plan of the Employer for such Limitation Year;
(d) amounts allocated on behalf of such Participant for such Limitation Year to
an individual medical account, as defined in Section 415(1)(2) of the Code,
which is part of a pension or annuity plan maintained by the Employer; and
(e) amounts derived from contributions paid or accrued after December 31, 1985,
in taxable years ending after said date, which are attributable to
post-retirement medical benefits allocated for such Limitation Year to the
separate account of such Participant under a welfare fund, as defined in
Section 419(e) of the Code, maintained by the Employer, if he is a Key Employee
for such year. For purposes of this Section 2.5, “Employer” shall include any
Related Employer.

2.6 “Beneficiary”: Any person (natural or otherwise) entitled to receive any
benefits which may become payable upon or after a Participant’s death.

2.7 “Benefit Commencement Date”: The date on which the payment of a
Participant’s Vested Account Balance commences, as determined in accordance with
the provisions of Section 9.1.

2.8 “Break in Service”:

(a) Except as otherwise provided under Section 2.8(b), the term “Break in
Service” shall mean one or more consecutive Computation Periods during each of
which an Employee has not completed more than 500 Hours of Service. For
eligibility purposes, an Employee shall not incur a Break in Service solely
because he fails to complete more than 500 Hours of Service during the
Computation Period beginning on his hire date.

(b) Notwithstanding Section 2.8(a), a Computation Period beginning in 1985 or
thereafter shall not be included in a Break in Service if the sum of the
Employee’s Hours of Service completed during such Computation Period plus the
Employee’s “Childbirth Leave Hours” (as hereafter defined) attributable to such
Computation Period exceeds 500. For purposes of this Section 2.8(b), an
Employee’s Childbirth Leave Hours shall be the number of Hours of Service (but
not in excess of 501 for any one continuous period of absence) which the
Employee would have completed but for the fact that the Employee is absent from
the employment of the Employer and all Related Employers for a period commencing
on or after the first day of the Computation Period beginning in 1985 (1) by
reason of the pregnancy of the Employee, (2) by reason of the birth of a child
of the Employee, (3) by reason of the placement of a child with the Employee in
connection with the adoption of such child by the Employee or (4) for purposes
of caring for such child for the period beginning immediately following such
birth or placement; provided, however, that in the case of any Employee with
respect to whom it is not possible to determine the number

 

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of Hours of Service which such Employee would have completed but for such
absence, such Employee shall be credited with 8 Childbirth Leave Hours for each
work day of such absence; and provided further, that an hour which is considered
an Hour of Service under Section 2.18(b) shall not also be considered a
Childbirth Leave Hour. All Childbirth Leave Hours for any period of absence
shall be attributed to the Computation Period during which such period of
absence begins if the result of such attribution is to prevent such Computation
Period from being considered a Break in Service; otherwise, all Childbirth Leave
Hours shall be attributed to the immediately following Computation Period. The
Administrator shall adopt regulations under which an Employee may be required to
furnish reasonable information on a timely basis establishing the number of
Childbirth Leave Hours to which such Employee is entitled with respect to any
period of absence from employment, and any Employee who fails to furnish such
information with respect to any period of absence shall not be credited with any
Childbirth Leave Hours for such period of absence.

(c) Notwithstanding Section 2.8(a), a Computation Period shall not be included
in a Break in Service if the Employee would have completed at least 500 Hours of
Service but for a period of absence due to layoff (for not more than 6 months),
jury duty or Leave of Absence, other than a period of absence described in
Section 2.8(b).

2.9 “Code”: The Internal Revenue Code of 1986, as now in effect or as hereafter
amended, and any regulation issued pursuant thereto by the Internal Revenue
Service. Whenever any provision of the Code is renumbered or otherwise amended,
this Plan shall, to the extent possible, be construed by reference to the
successor to such provision.

2.10 “Committee”: The committee established pursuant to the provisions of
Article XII to assist the Administrator in the administration of the Plan.

2.11 “Compensation”:

(a) Except as otherwise provided in this Section 2.11, the term “Compensation”
shall mean wages, within the meaning of Section 3401(a) of the Code, and all
other payments of compensation paid to a Participant by the Employer (during the
course of the Employer’s trade or business) during a Plan Year for services
rendered by him as an Employee for which the Employer is required to furnish the
Employee a written statement under Sections 6041(d) and 6051(a)(3) of the Code,
determined without regard to any rules under Section 3401(a) which limit the
remuneration included in wages based upon the nature or location of the
employment or the services performed [such as the exception for agricultural
labor in Section 3401(a)(2)]. Except as provided in Section 6.1(e), in the case
of an individual who was a Participant for a period consisting of less than the
entire Plan Year, his Compensation shall be deemed to include only the taxable
remuneration paid to him for the period while he was a Participant. The
Compensation of each Participant taken into account for any Plan Year shall not
exceed $160,000 (subject to cost-of-living adjustments prescribed by the
Secretary of the Treasury).

 

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(b) Except for purposes of Sections 7.5 and 7.6, notwithstanding the provisions
of Section 2.1 l(a), there shall be included in Compensation any amount
contributed by the Employer or a Related Employer pursuant to a salary reduction
agreement with the Employee and excluded from his gross income under Sections
125, 402(e)(3), 402(h) or 403(b) of the Code. This Section 2.11(b) shall not
apply for Plan Years and Limitation Years beginning after May 31, 1998.

(c) Notwithstanding Sections 2.11(a) and 2.11(b), the term “Compensation” shall
be defined as follows effective for Plan Years and Limitation Years beginning
after May 31, 1998:

The term “Compensation” shall mean wages, within the meaning of Section 3401(a)
of the Code, and all other payments of compensation paid to a Participant by the
Employer (during the course of the Employer’s trade or business) during a Plan
Year for services rendered by him as an Employee for which the Employer is
required to furnish the Employee a written statement under Sections 6041(d) and
6051(a)(3) of the Code, determined without regard to any rules under
Section 3401(a) which limit the remuneration included in wages based upon the
nature or location of the employment or the services performed [such as the
exception for agricultural labor in Section 3401(a)(2)], together (i) any
elective deferral [as defined in Section 402(g)(3) of the Code] on behalf of
such Participant and (ii) any amount which is contributed or deferred by the
Employer at the election of such Participant and which is not includable in the
gross income of such Participant by reason of Sections 125 or 457 of the Code.
Except as provided in Section 6.1(e), in the case of an individual who was a
Participant for a period consisting of less than the entire Plan Year, his
Compensation shall be deemed to include only the taxable remuneration paid to
him for the period while he was a Participant. The Compensation of each
Participant taken into account for any Plan Year shall not exceed $160,000
(subject to cost-of-living adjustments prescribed by the Secretary of the
Treasury).

2.12 “Computation Period”: For eligibility purposes, the Computation Period is
the 12-month period beginning on an Employee’s employment date or re-employment
date, subject to Sections 2.40 and 3.2(b) and (c). For all other purposes under
the Plan, including without limitation vesting, the Computation Period is the
Plan Year.

2.13 “Effective Date”: June 1, 1997 (except as otherwise set forth herein).

2.14 “Employee”: Any person employed by and receiving Compensation from the
Employer or any Related Employer (or who would be receiving such remuneration
except for a Leave of Absence). The term “Employee” shall not include any person
who is a “leased employee” within the meaning of Code Section 414(n)(2). For
purposes of the preceding sentence, the term “leased employee” means any person
(other than an employee of the recipient) who

 

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pursuant to an agreement between the recipient and any other person has
performed services for the recipient [or for the recipient and related persons
determined in accordance with Section 414(n)(6) of the Code] on a substantially
full-time basis for a period of at least one year, and such services are
performed under primary direction or control by the recipient.

2.15 “Employer”: Richardson and any successor to it. The term “Employer” shall
also include any corporation or other unincorporated business organization which
adopts the Plan for the exclusive benefit of its Employees pursuant to the
provisions of Section 16.1. Anything to the contrary notwithstanding, a mere
change in the identity, form or organization of the Employer shall not affect
its status under the Plan or the Trust in any manner.

2.16 “Entry Date”: November 30 of each Plan Year and the last day of each Plan
Year.

2.17 “ERISA”: The Employee Retirement Income Security Act of 1974, as now in
effect or as hereafter amended, and any regulation issued pursuant thereto by
the Internal Revenue Service, the Department of Labor or the Pension Benefit
Guaranty Corporation. Whenever any provision of ERISA is renumbered or otherwise
amended, this Plan shall, to the extent possible, be construed by reference to
the successor to such provision.

2.18 “Hour of Service”:

(a) Each Employee shall be credited with an Hour of Service for:

 

  (1) Each hour for which he is directly or indirectly paid or entitled to
payment by the Employer or any Related Employer for the performance of duties.
Service rendered at overtime or other premium rates shall be credited at the
rate of one Hour of Service for each hour worked, regardless of the rate of
compensation in effect. These hours shall be credited to the Employee for the
Computation Period(s) during which the duties are performed. An Employee who is
not compensated on an hourly basis, or for whom information regarding the number
of hours worked is not readily available, shall be credited with the following
number of Hours of Service for each payroll period during which he completes at
least one Hour of Service:

 

  (i) 45 Hours of Service for each weekly payroll period;

 

  (ii) 90 Hours of Service for each bi-weekly payroll period;

 

  (iii) 95 Hours of Service for each semi-monthly payroll period; or

 

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  (iv) 190 Hours of Service for each monthly payroll period.

Hours of Service credited to a payroll period which includes an Anniversary Date
shall be credited entirely to the Plan Year commencing on the date following
such Anniversary Date. An Employee who is not compensated on the basis of a
regular payroll period shall be credited with 10 Hours of Service for each day
on which he completes at least one Hour of Service.

 

  (2) Each hour (up to a maximum of 501 hours in any one continuous period) for
which he is directly or indirectly paid or entitled to payment by the Employer
or any Related Employer on account of a period during which no duties are
performed (irrespective of whether the employment relationship has terminated)
due to vacation, holiday, illness, incapacity (including disability), lay-off,
jury duty, military duty or leave of absence. In the case of payments which are
computed on the basis of specific periods of time during which no duties are
performed, the Employee shall receive credit for Hours of Service as if he had
actually worked during such periods of time, computed and credited as provided
in Section 2.19(a)(l). In the case of all other payments, the Employee’s Hours
of Service shall be computed and credited in the manner prescribed in 29 C.F.R
Sections 2530.200b-2(b) and (c), which are hereby incorporated herein by
reference.

 

  (3) Each hour for which back pay, irrespective of mitigation of damages, has
been either awarded or agreed to by the Employer or any Related Employer. These
hours shall be credited to the Employee for the computation period (or periods)
to which the award, agreement or payment pertains rather than the computation
period (or periods) during which the award, agreement or payment was made.

(b) Notwithstanding the foregoing, no credit shall be granted for any period
with respect to which an Employee receives payment or is entitled to payment
under a plan maintained solely for the purpose of complying with applicable
worker’s compensation or disability insurance laws; or for a payment which
solely reimburses an Employee for medical or medically related expenses incurred
by the Employee.

(c) Service by an individual on behalf of any of the following entities before
he became an Employee shall be considered service on behalf of the Employer for
purposes of this Section 2.18, to-wit: Amperex Division of North American
Phillips Corp.; B-Scan, Inc.; Calvert Electronics, Inc.; Calvert Holding Co.,
Inc.; Calvert Semi-Conductor, Inc.; Ceco

 

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Communications, Inc.; Cetron Electronic Corporation; National Electronics
Division of Varian Associates, Inc.; TubeMaster, Inc.; Compucon Distributors,
Inc.; Burtek Systems (USA), Inc.; AFP Imaging Corporation; Eternal Graphics,
Inc., (effective June 1, 1998 and including service prior to that date); TRL
Technologies, Inc. (effective June 23, 1998 and including service prior to that
date); Adler Video Systems, Inc. (effective November 28, 1998 and including
service prior to that date); Pixielink Corporation (effective March 8, 1999 and
including service prior to that date); and Broadcast Richmond, Inc. (effective
May 31, 2000 and including service prior to that date).

2.19 “Key Employee”:

(a) Except as otherwise provided in this Section 2.19, an Employee shall be
considered a “Key Employee” for any Plan Year if, at any time during the Key
Employee Test Period [as defined in Section 2.19(f)], he is or was:

 

  (1) An officer of the Employer or any Related Employer whose Compensation [as
modified for all purposes of this Section 2.19 in accordance with
Section 2.19(g)] exceeds 50% of the annual dollar limitation set forth in
Section 415(b)(l)(A) of the Code;

 

  (2) A shareholder of the Employer who owns at least .5% of the stock of the
Employer or any Related Employer and whose Compensation exceeds the annual
defined contribution dollar limitation set forth in Section 415(c)(l)(A) of the
Code, unless at least 10 other Employees whose Compensation exceeds the annual
defined contribution dollar limitation set forth in Section 415(c)(l)(A) of the
Code own or owned during any Plan Year in the Key Employee Test Period a
percentage share of the stock of the Employer which is greater than such
shareholder’s percentage share;

 

  (3) A shareholder who owns more than 5% of the stock of the Employer; or

 

  (4) A shareholder who owns more than 1% of the stock of the Employer and whose
Compensation for any Plan Year in which he owns such percentage exceeds
$150,000.

(b) The number of Employees classified as Key Employees solely because they are
described in Section 2.19(a)(l) shall not exceed the greater of (1) 3 or (2) 10%
of the largest number of Employees during any of the Plan Years in the Key
Employee Test Period; provided, however, that in no event shall such number
exceed 50. If more than such number of Employees would otherwise be classified
as Key Employees by reason of being described in Section 2.19(a)(l), the
Employees classified as Key Employees by reason of being described in

 

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Section 2.19(a)(l) shall be those described in Section 2.19(a)(l) who had the
highest Compensation during any of the Plan Years in the Key Employee Test
Period during which they were described in Section 2.19(a)(l).

(c) For purposes of Section 2.19(a)(2), in the event that 2 or more Employees
own the same percentage share of the Employer, the Employee who had the highest
Compensation of such Employees for the Plan Year during the Key Employee Test
Period in which his Compensation was the highest and in which he owned such
interest in the Employer for part of the Plan Year shall be treated as owning
the largest percentage share of the stock of the Employer. If an Employee’s
percentage interest in the stock of the Employer changes during a Plan Year, his
interest for such Plan Year shall be the highest percentage he held at any time
during such Plan Year.

(d) For purposes of this Section 2.19, an Employee shall be considered to own
any stock of the Employer or Related Employer which would be attributed to him
under Section 318 of the Code [as modified by substituting “5%” for “50%” in
Section 318(a)(2) of the Code]. In the case of an Employer or Related Employer
which has issued more than one class of stock, the applicable test shall be
satisfied if the Employee’s stock ownership meets the test on the basis of
either the value or the voting power of the stock. In the case of an Employer or
Related Employer which is not a corporation, such tests shall be applied in
accordance with regulations promulgated under Section 416(i)(l)(B)(iii)(II) of
the Code.

(e) Any Employee who meets any of the 4 tests set forth in Section 2.19(a) as of
any Top-Heavy Determination Date shall continue to be a Key Employee for the
remainder of the Key Employee Test Period, commencing with the Plan Year which
includes such Top-Heavy Determination Date, whether or not he remains an
Employee, and, if such Employee dies during such Key Employee Test Period his
Beneficiaries shall be classified as Key Employees for the balance of such Key
Employee Test Period, unless such Employee is a Key Employee solely by reason of
Section 2.19(a)(l) and is subsequently excluded from the group of officers
having the highest Compensation by reason of the limitation set forth in
Section 2.19(b) in subsequent Plan Years or solely by reason of
Section 2.19(a)(2) and is subsequently excluded from the group of the 10
Employees owning the largest percentage shares of the stock of the Employer in
subsequent Plan Years.

(f) The term “Key Employee Test Period” for any Plan Year shall mean the period
consisting of 5 Plan Years (or, if fewer, the total number of Plan Years during
which the Plan and all other employee plans qualified under Section 401(a) of
the Code maintained by the Employer or any Related Employer have been in effect)
ending with the Plan Year which includes the Top-Heavy Determination Date for
such Plan Year.

(g) The purpose of this Section 2.19 is to conform to the definition of “key
employee” set forth in Section 416(i)(l) of the Code, which is incorporated
herein by reference, and to the extent that this Section 2.19 shall be
inconsistent with Section 416(i)(l) of the Code,

 

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either by excluding Employees who would be classified as “key employees”
thereunder or by including Employees who would not be so classified, the
provisions of Section 416(i) (1) of the Code shall govern and control.

2.20 “ Leave of Absence”: Authorized leave of absence, sick or disability leave,
service in the Armed Forces of the United States (provided that the absence is
caused by war or other emergency or provided that the Employee is required to
serve under the laws of conscription in time of peace) or any absence with the
advance approval of the Employer or any Related Employer; provided, however,
that the Employee retires or returns to work for the Employer or any Related
Employer within the time specified in his Leave of Absence (or, in the case of a
military absence, within the period provided by law). In granting such leaves,
the Employer and any Related Employer shall treat all Employees under similar
circumstances alike under rules uniformly and consistently applied.

2.21 “Limitation Year”: The period coinciding with the Plan Year.

2.22 “Non-Key Employee”: Any Employee who for any Plan Year is not a Key
Employee.

2.23 “Normal Retirement Date”: The date a Participant attains age 65.

2.24 “Participant”: Any Employee who participates in the Plan as provided in
Article III.

2.25 “Permanent Disability”: The inability of a Participant to perform a
substantial portion of his duties by reason of any medically determinable
physical or mental impairment which can be expected to be of long-continued and
indefinite duration. Permanent Disability shall be determined solely by the
Administrator upon medical evidence from a physician selected by the
Administrator. A determination of Permanent Disability pursuant to the
provisions of the Plan shall not be construed to be an admission of disability
by the Employer in regard to any other claim of disability brought by the
Participant against the Employer. A Participant who is receiving disability
benefits under the Social Security Act shall be presumed to be Permanently
Disabled.

2.26 “Plan”: The Richardson Electronics, Ltd. Employee Stock Ownership Plan, as
amended and restated herein.

2.27 “Plan Year”: The fiscal year adopted by the Employer for Federal income tax
purposes.

 

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2.28 “Qualified Domestic Relations Order”:

(a) Except as provided in Section 2.28(b), the term “Qualified Domestic
Relations Order” shall mean any order (including a judgment, a decree or an
approval of a property settlement agreement entered by any court) which the
Administrator determines (1) is made pursuant to any state domestic relations
law (including a community property law), (2) relates to the provision of child
support, alimony payments or marital property rights of a spouse, former spouse,
child or other dependent of a Participant (an “Alternate Payee”) and (3) clearly
specifies (i) the name and last known mailing address (if any) of the
Participant and the name and mailing address of each Alternate Payee covered by
the order, (ii) the amount or percentage of the Participant’s benefits to be
paid by the Plan to each Alternate Payee, or the manner in which such amount or
percentage is to be determined, (iii) the number of payments or period to which
such order applies and (iv) the employee benefit plan to which such order
applies.

(b) An order shall in no event be considered a Qualified Domestic Relations
Order if the Administrator determines that such order (1) requires the Plan to
provide benefits to Alternate Payees, the actuarial present value of which in
the aggregate is greater than the benefits which would otherwise have been
provided to the Participant, (2) requires the Plan to pay benefits to an
Alternate Payee, which benefits are required to be paid to a different Alternate
Payee under another order previously determined to be a Qualified Domestic
Relations Order or (3) requires the Plan to provide any type or form of benefit,
or any option, not otherwise provided under the Plan, except that a Qualified
Domestic Relations Order may require the Trustee to distribute a portion of the
Participant’s Vested Account Balance prior to the time the Participant has
incurred a Termination of Employment but after the Participant has attained the
age of 50. Notwithstanding the preceding sentence, effective May 31, 1998 a
Qualified Domestic Relations Order may require the Trustee to distribute all or
a portion of the Participant’s Vested Account Balance prior to the time the
Participant has incurred a Termination of Employment and without regard to the
Participant’s age.

2.29 “Related Employer”: Any trade or business (whether or not incorporated)
that is, along with the Employer, a member of a controlled group of related
entities [as defined in Sections 414(b) and (c) of the Code, as modified for
purposes of Sections 7.5 and 7.6 by Section 415(h) of the Code] or a member of
an affiliated service group [as defined in Section 414(m) of the Code]. Anything
to the contrary notwithstanding, a mere change in the identity, form or
organization of a Related Employer shall not affect its status under the Plan or
the Trust in any manner and, if the corporate name of a Related Employer is
hereafter changed, all references herein to such Related Employer shall be
deemed to refer to such Related Employer as it is then known.

2.30 “Richardson”: Richardson Electronics, Ltd., a Delaware corporation.

2.31 “Spouse”: The person who is married to the Participant at the time relevant
to such determination except to the extent that a Qualified Domestic Relations
Order

 

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provides that a former spouse is to be treated as the Participant’s Spouse;
provided, however, that, solely for purposes of Section 9.3(c), the person to
whom a Participant is married at the time of his death shall be considered his
Spouse only if they had been married at least one year prior to his death.

2.32 “Stock”: Capital stock issued by the Employer [or by a corporation which is
a member of the same “controlled group” (as defined in Section 409(l)(4) of the
Code) of the Employer] and which is either:

 

  (a) Common stock which is readily tradable on an established securities
market; or

 

  (b) If no such corporation has common stock outstanding which is readily
tradable on an established securities market, common stock which has a
combination of voting power and dividend rights equal to or in excess of that
class of common stock of any such corporation which has the greatest voting
power and that class of common stock of any such corporation which has the
greatest dividend rights; or

 

  (c) Preferred stock which is noncallable and which is convertible at any time
into common stock described in either Sections 2.32(a) or (b) at a conversion
price which is reasonable (at the time such stock is acquired by the Trust). To
the extent provided in regulations issued under Section 409(l)(3) of the Code,
preferred stock shall be treated as noncallable if after the call there will be
a reasonable opportunity for such a conversion.

2.33 “Termination of Employment”: An Employee shall be deemed to have incurred a
“Termination of Employment” as a result of:

 

  (a) A retirement, a resignation or a dismissal for any reason;

 

  (b) A failure to return to work promptly upon the request of the Employer or
Related Employer at the end of a layoff; or

 

  (c) A failure to retire or return to work at the end of a Leave of Absence.

A transfer of employment between the Employer and any Related Employer, or
between Related Employers, or a transfer from a job category eligible to
participate in the Plan to one not so eligible or vice versa, shall not be
considered to be a Termination of Employment.

2.34 “Top-Heavy Determination Date”: For any Plan Year, the Anniversary Date of
the immediately preceding Plan Year.

 

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2.35 “Top-Heavy Year”:

(a) Except as otherwise provided in Section 2.35(b) below, the term “Top-Heavy
Year” shall be any Plan Year if, as of the Top-Heavy Determination Date for such
Plan Year, the aggregate Account Balances of all Key Employees under the Plan
exceed 60% of the aggregate Account Balances of all Participants under the Plan.

(b) Notwithstanding Section 2.35(a), if during any Plan Year (1) at least one
Participant is a Key Employee, (2) as of the Top-Heavy Determination Date for
such Plan Year the Employer or any Related Employer has adopted any other
employee plan qualified under Section 401(a) of the Code and (3) either (i) a
Key Employee participates in such other plan or (ii) the Plan or such other plan
has satisfied the requirements of Section 401(a)(4) or Section 410 of the Code
only by treating the Plan and such other plan as a single plan, then such Plan
Year shall be considered a Top-Heavy Year if and only if the Account Balances of
all Key Employees under the Plan and the aggregate balances in the accounts of
all Key Employees under all such other plans exceed 60% of the aggregate
balances in the accounts of all Participants under the Plan and all such other
plans.

(c) Notwithstanding Sections 2.35(a) and (b), if as of any Top-Heavy
Determination Date the Employer or any Related Employer has adopted any other
employee plan qualified under Section 401(a) of the Code which is not a plan
described in Section 2.35(b), but which plan may be considered as a single plan
with the Plan and all plans described in Section 2.35(b) without causing any of
such plans to violate the requirements of either Section 401(a)(4) or
Section 410 of the Code, the Plan Year shall not be considered a Top-Heavy Year
if the Account Balances of all Key Employees under the Plan and the aggregate
balances in the accounts of all Key Employees under all plans described in
Section 2.32(b) and all plans described in this Section 2.35(c) do not exceed
60% of the aggregate balances in the accounts of all Participants under all such
plans.

(d) If any of the plans described in either Sections 2.35(b) or (c) are defined
benefit plans, then the tests set forth in said sections shall be applied by
using the present value of all benefits accrued under such plans (as determined
by the Administrator, using actuarial assumptions which are uniform for all such
plans and are reasonable in the aggregate) in lieu of the account balances in
such plans. The accrued benefits of the Non-Key Employees under such plans shall
be determined in accordance with Section 416(g)(4)(F) of the Code. If any of
such plans have a “determination date” [as defined in Section 416(g)(4)(C) of
the Code] for purposes of determining top-heavy status which is different from
the Top-Heavy Determination Date, the account balances (or the present value of
the accrued benefits, in the case of a defined benefit plan) in such plan shall
be determined as of the determination date for such plan which occurs in the
same Plan Year as the Top-Heavy Determination Date.

(e) For purposes of this Section 2.35, account balances shall include (1) all
contributions which the Employer or any Related Employer has paid or is legally
obligated to pay

 

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to any employee plan as of the Top-Heavy Determination Date (including
contributions made thereafter if they are allocated as of the Top-Heavy
Determination Date) and all forfeitures allocated as of the Top-Heavy
Determination Date and (2) all distributions made to a Participant or his
Beneficiary during the Key Employee Test Period (or, in the case of a defined
benefit plan, the actuarial present value as of the Top-Heavy Determination Date
of such distributions). If any plan that was terminated within the Key Employee
Test Period would, if it had not been terminated, be a plan described in
Section 2.35(b), distributions made under such plan shall also be taken into
account. For purposes of this Section 2.32, account balances shall also include
amounts which are attributable to contributions made by the Participants (other
than deductible voluntary contributions under Section 219 of the Code) but shall
not include any rollover [as defined in Section 402(a) (5) of the Code] or a
direct transfer from the trust of any employee plan qualified under
Section 401(a) of the Code if such plan is not maintained by the Employer or any
Related Employer and such rollover or transfer is made at the request of the
Participant after December 31, 1983.

(f) Anything to the contrary notwithstanding, if an Employee has not performed
any services for the Employer or any Related Employer at any time during the Key
Employee Test Period, his account balance (in the case of a defined contribution
plan) or his accrued benefit (in the case of a defined benefit plan) shall not
be taken into consideration in the determination of whether the Plan Year is a
Top-Heavy Year.

(g) The purpose of this Section 2.35 is to conform to the definition of
“top-heavy plan” set forth in Section 416(g) of the Code, which is incorporated
herein by reference, and to the extent that this Section 2.35 shall be
inconsistent with Section 416(g) of the Code, either by causing any Plan Year
during which the Plan would be classified as a “top-heavy plan” not to be a
Top-Heavy Year or by causing any Plan Year during which it would not be
classified as a “top-heavy plan” to be a Top-Heavy Year, the provisions of
Section 416(g) of the Code shall govern and control.

2.36 “Trust”: The trust forming a part of the Plan and known as the Richardson
Electronics, Ltd. Employees Stock Ownership Trust.

2.37 “Trust Agreement”: The agreement dated February 23, 1990 by and between
Richardson and Marine Midland Bank, N.A. (known as HSBC Bank USA, effective
March 29, 1999).

2.38 “Trustee” or “Trustees”: The person or persons who shall from time to time
be acting as the Trustee under the Trust Agreement and their duly appointed
successors.

2.39 “Valuation Date”: The Anniversary Date and each other date during the Plan
Year specified by the Administrator [in a manner which does not discriminate in
favor of Participants who are “highly compensated employees,” as defined in
Section 414(q) of the Code] as to which Accounts are adjusted pursuant to
Article VII.

 

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2.40 “Vested Account Balance”: At any date, the portion of a Participant’s
Account Balance which would be nonforfeitable if the Participant incurred a
Termination of Employment on such date, as determined under Article VIII.

2.41 “Year of Service”: Any Computation Period during which an Employee has
completed at least 1,000 Hours of Service. For purposes of Article III, as soon
as an Employee completes at least 1,000 Hours of Service during the initial
Computation Period specified in Section 2.12, he shall be credited with a Year
of Service even if fewer than 12 consecutive calendar months have passed. If
such Employee fails to complete at least 1,000 Hours of Service during the
initial 12-month Computation Period specified in Section 2.12, the second
12-month Computation Period shall consist of the Plan Year which includes the
first anniversary of his employment or re-employment commencement date, and the
succeeding 12-month Computation Periods shall also be based on the Plan Year.

 

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ARTICLE III

PARTICIPATION

3.1 Eligibility to Participate

(a) Each Employee shall be eligible to participate in the Plan, provided that he
(1) has completed at least one Year of Service and (2) is not a member of a
collective bargaining unit in which retirement benefits were the subject of good
faith bargaining between the Employer or any Related Employer and one or more
employee representatives, (3) is not a nonresident alien described in Code
Section 410(b)(3)(C), and (4) is not a United States citizen employed by the
Employer in a nation other than the United States (the “Foreign Country”) who
would be subject to tax under the laws of such Foreign Country upon receiving an
allocation to his Account pursuant to Section 6.1.

(b) Each Employee who participated in the Plan in accordance with its terms
prior to the Effective Date shall continue as a Participant. Each other Employee
who satisfies the eligibility requirements of Section 3.1(a) shall become a
Participant on the later of the Effective Date or the Entry Date coincident with
or immediately following the date on which he satisfies such eligibility
requirements, provided that he is still employed by the Employer on such date.

3.2 Duration of Participation; Re-Employment

(a) Subject to the provisions of Sections 3.2(b) and (c), an Employee shall
cease to be a Participant for purposes of Section 6.1 upon ceasing to be
employed by the Employer, but shall remain a Participant for all other purposes
hereunder until such time as his Vested Account Balance is paid to him (or his
Beneficiaries) in full in accordance with Article IX, at which time his
participation in the Plan shall cease.

(b) Each Participant who incurs a Termination of Employment and is re-employed
after incurring a Break in Service shall again become a Participant as of his
re-employment date for all purposes under the Plan except Sections 4.1(a) and
7.4, and shall again become a Participant for purposes of Sections 4.1(a) and
7.4 on the Entry Date coincident with or immediately following the date on which
he completes one Year of Service following such re-employment; provided,
however, that if either (1) such Participant had a vested right to any portion
of his Account Balance when he incurred his Termination of Employment, (2) the
number of Computation Periods in such Break in Service is fewer than the number
of Years of Service completed by the Participant prior to such Break in Service
or (3) the number of Computation Periods such Break in Service is fewer than 5,
then his participation for all purposes under the Plan shall be retroactive to
his date of re-employment.

(c) Each Employee or each Participant who incurs a Termination of Employment and
is re-employed prior to incurring a Break in Service shall be treated, for
purposes of eligibility to participate in the Plan, as though he never incurred
a Termination of Employment.

 

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(d) An Employee’s participation in the Plan shall not be affected by the fact
that he continues to be employed after his Normal Retirement Date.

 

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ARTICLE IV

CONTRIBUTIONS BY EMPLOYER

4.1 Amount

(a) The Board of Directors of the Administrator shall determine the aggregate
amount to be contributed by all Employers for each Plan Year. Such aggregate
amount shall not, however, be less than the amount required to permit the Trust
to make all payments then due under any debt incurred by the Trust pursuant to
Section 14.2. Subject to Section 4.1(d), each Employer hereby agrees to
contribute to the Trust for a Plan Year its share of the aggregate amount, in
the proportion that the total Compensation paid or accrued by such Employer to
all Participants for such Plan Year bears to the total Compensation paid or
accrued to all Participants by all Employers for such Plan Year; provided,
however, that he contribution made by any Employer for any Plan Year shall not
exceed the maximum amount deductible by such Employer for that Plan Year under
the provisions of Section 404 of the Code.

(b) If any Employer is unable to make its full contribution for any Plan Year,
the remaining Employers may (but shall not be obligated to) make all or a
portion of such Employer’s contribution on its be behalf, subject to the
foregoing limitations.

(c) The Employer’s contribution shall be in the form of cash or stock at its
fair market value, or a combination thereof; provided that at all times at least
51% of the total balance in all Employer Contribution Accounts and the Suspense
Account (excluding amounts held to make current debt payments and dividends held
pending distribution pursuant to Section 9.6) shall be in the form of Stock or
other stock of the Employer.

(d) The Employer shall be required to contribute [in the same proportion as
provided in Section 4.1(a)] the amount of any previously forfeited amounts which
are require to be restored to any re-employed Participant’s Employer
Contribution Account during such Plan Year pursuant to Section 8.5(b), reduced
by any forfeitures for such Plan Year and by any excess Employer contributions
and any excess forfeitures allocated pursuant to Sections 7.5(c), (d) and (e).

(e) The determination of the Administrator as to the amount to be contributed by
each Employer hereunder shall in all respects be final, binding and conclusive
upon all persons or parties claiming any rights either under the Plan or the
Trust.

4.2 Time for Payment

All contributions by the Employer shall be delivered to the Trustee not later
than the date fixed by law for the filing of the Employer’s Federal income tax
return for the Plan Year which includes the Anniversary Date as of which such
contribution is to be allocated (including any extensions of time granted by the
Internal Revenue Service for the filing of such return).

 

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ARTICLE V

CONTRIBUTIONS BY PARTICIPANTS

5.1 Contributions by Participants

Participants shall not be required or permitted to make any contributions to the
Plan.

 

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ARTICLE VI

ALLOCATION OF EMPLOYER CONTRIBUTIONS

6.1 Manner of Allocation

(a) All contributions made by any Employer under Section 4. l(a) for a Plan
Year, and all stock released from the Suspense Account for such Plan Year under
Section 14.2, shall be allocated among the Employer Contribution Accounts of the
eligible Participants [as defined in Section 6.1(b)] in the proportion that the
Compensation paid or accrued to each Participant during such Plan Year bears to
the total Compensation paid or accrued to all such Participants during such Plan
Year. To the extent that such contributions are used to repay debt incurred
under Section 14.2, the payment shall be charged to the Participants’ Employer
Contribution Accounts in the same proportion.

(b) The Participants who shall be eligible to receive an allocation under this
Section 6.1 with respect to a Plan Year shall be limited to: (1) Participants
who are Employees on the last work day of such Plan Year (including Participants
who incurred a Termination of Employment on such date) and who are credited with
a Year of Service for such Plan Year, (2) Participants who retired on or after
their Normal Retirement Date during such Plan Year, and (3) Participants who
terminated employment during such Plan Year due to death, Permanent Disability
or involuntary Termination of Employment (other than Termination of Employment
for cause).

(c) Anything to the contrary notwithstanding, the allocation of the Employer’s
contributions shall subject to the limitations set forth in Sections 7.5 and
7.6, and, in any Top-Heavy Year, the limitations of Section 6.2.

(d) Contributions required by Section 4.1(d) shall be restored to the Employer
Contribution Account of the re-employed Participant.

(e) For purposes of Sections 6.1(a) and 7.4, there shall be included in the
Compensation of a Participant who commenced participation in the Plan during a
Plan Year the portion of his Compensation paid or accrued prior to the Entry
Date on which he became a Participant.

(f) For purposes of this Section 6.1, as well as Section 6.2, with respect to
the Plan Year ending in 1997, remuneration paid during such Plan Year to a
Participant while employed by Compucon Distributors, Inc. prior to September 30,
1996 shall not be taken into account as Compensation. For purposes of this
Section 6.1, as well as Section 6.2, with respect to the Plan Year ending in
1997, remuneration paid during such Plan Year to a Participant while employed by
Burtek Systems (USA), Inc. prior to February 1, 1997 shall not be taken into
account as Compensation. For purposes of this Section 6.1, as well as
Section 6.2 with respect to the Plan Year ending in 1997, remuneration paid
during such Plan Year to a Participant while employed

 

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by AFP Imaging Corporation prior to August 6, 1996, shall not be taken into
account as Compensation. For purposes of this Section 6.1, as well as
Section 6.2,with respect to the Plan Year ending in 1997, remuneration paid
during such Plan Year to a Participant while employed by TRL Technologies, Inc.
prior to June 23, 1998 shall not be taken into account as Compensation.

6.2 Allocations in Top-Heavy Years

(a) Notwithstanding any herein to the contrary, for any Plan Year which is a
Top-Heavy Year, the aggregate allocation of the Employer’s contribution to the
Employer Contribution Account of each Non-Key Employee who is a Participant
(including those who are employed by the Employer on the last work day of such
Plan Year but who are not credited with a Year of Service for such Plan Year)
shall not be less than 3% of such Non-Key Employee’s Compensation for such Plan
Year.

(b) If, in any Top-Heavy Year, the Key Employee Percentage (as hereinafter
defined) for each Key Employee who is a Participant is less than 3%, the highest
Key Employee Percentage shall be substituted for 3% in Section 6.2(a) unless a
defined benefit plan [as defined in Section 414(j) of the Code] which is
described in Section 2.35(d) must be combined with the Plan in order to satisfy
the requirements of Section 401(a) or Section 410 of the Code. For purposes of
this Section 6.2, the “Key Employee Percentage” for each Key Employee shall be
the aggregate amount of the Employer’s contribution allocated to such Key
Employee’s Employer Contribution Account for such Plan Year (taking into account
adjustments pursuant to this Section 6.2) as a percentage of such Key Employee’s
Compensation.

(c) In the event that the allocation of the Employer’s contribution to any
Non-Key Employee under Section 6.1 in a Top-Heavy Year would otherwise violate
the provisions of this Section 6.2, the aggregate amount allocated to the
Employer Contribution Accounts of the Key Employees shall be reallocated (in
proportion to the amount otherwise allocated to each Key Employee) to the
Company Contribution Accounts of the Non-Key Employees (in proportion to the
difference between the amount otherwise allocated to each Non-Key Employee and
the amount required to be allocated under this Section 6.2) until the
requirements of this Section 6.2 are satisfied.

(d) In the event that a Non-Key Employee is a participant in any other defined
contribution plan [as defined in Section 414(i) of the Code] maintained by the
Employer or any Related Employer, the amount required to be allocated to such
Non-Key Employee under this Section 6.2 shall be reduced by the aggregate amount
allocated to the Non-Key Employee’s accounts under all such other plans.

(e) In the event that a Non-Key Employee is a participant in any defined benefit
plan [as defined in Section 414(j) of the Code] maintained by the Employer or
any Related Employer which is a “top-heavy plan” [as defined in Section 4l6(g)
of the Code], then, if the

 

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accrued benefit of such plan satisfies the requirements of Section 416(c)(l) of
the Code [taking into account the modifications required by
Section 416(h)(2)(A)(ii) of the Code if Section 6.2(e) applies], then
Section 6.2(a) shall not apply to such Non-Key Employee. If such accrued benefit
does not satisfy such requirements, then “5%” shall be substituted for “3%” in
Section 6.2(a) with respect to such Non-Key Employee, and Section 6.2(b) shall
not apply to such Non-Key Employee.

(f) If Section 7.6(c) applies for any Plan Year, then “4%” shall be substituted
for “3%” in Section 6.2(a), and “7.5%” shall be substituted for “5%” in
Section 6.2(e).

(g) For purposes of this Section 6.2, contributions by the Employer shall
include forfeiture allocations.

6.3 Administrator to Notify Trustee

As soon as practicable after the close of each Plan Year, the Administrator
shall furnish the Trustee with a statement showing the Compensation paid to each
Participant for such Plan Year.

 

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ARTICLE VII

ACCOUNTS OF PARTICIPANTS

7.1 Separate Accounts

The Administrator shall create and maintain adequate records to disclose the
interest in the Trust of each Participant (or Beneficiary of a deceased
Participant). For accounting purposes, a separate Account shall be maintained
for each Participant, reflecting his proportionate share of all contributions,
forfeitures, net increases or decreases in the value of the Trust assets and
distributions to the Participant (or his Beneficiary). Credits and charges shall
be made to such Accounts in the manner described herein. The maintenance of such
separate Accounts shall not require the segregation of any assets from any other
assets held in the Trust.

7.2 Adjustments to Accounts

(a) As of each Valuation Date, the Administrator shall:

 

  (1) First, charge to the proper Accounts all payments or distributions made
from the Accounts since the immediately preceding Valuation Date.

 

  (2) Second, adjust the Account Balances upward or downward, on a proportional
basis, according to the net gain or loss of the Trust assets from investments
(as reflected by interest payments, dividends, realized and unrealized gains and
losses on securities and other investment transactions) and from the payment of
expenses, so that the aggregate Account Balances equal the fair market value, as
determined by the Trustee, of the Trust assets on such Valuation Date. For
purposes of this Section 7.2(a)(2), Account Balances shall not include (i) any
Account which has been segregated for the payment of installments pursuant to
Section 9.4(b) or (ii) any asset of an Account the gain or loss from which is,
pursuant to Article XIV, allocated to a specific Participant’s Account. All gain
or loss (whether realized or unrealized) attributable to an Account described in
the preceding sentence shall be allocated directly to such Account, and the fair
market value of the balance in all such Accounts, after such allocation (or, in
the case of an asset allocated to a specific Participant’s Account, the fair
market value of such asset) shall be subtracted from the fair market value of
the Trust’s assets (and, if applicable, from the Account Balance to which such
asset is allocated), prior to the adjustment set forth herein.

 

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  (3) Third, if such Valuation Date is an Anniversary Date, allocate and credit
the balances, if any, in the Excess Contribution Account and the Excess
Forfeiture Account in accordance with Sections 7.5(d) and (e).

 

  (4) Fourth, if such Valuation Date is an Anniversary Date, allocate and credit
the Employer contributions and Stock released from the Suspense Account in
accordance with Section 7.3 and forfeitures, if any, in accordance with
Section 7.4, in either case except to the extent modified by Sections 7.5, 7.6
and 7.7.

(b) Every adjustment made pursuant to this Section 7.2 shall be considered as
having been made as of the Anniversary Date of the applicable Plan Year
regardless of the dates of actual entries or receipt by the Trustee of the
contribution made by the Employer for such Plan Year; provided, however, that
Employer contributions pursuant to Section 4.1(a) for the Plan Years ending in
1988 through 1992, inclusive, as well as the Employer contribution made in 1992
for the Plan Year ended May 29, 1993, shall be considered as having been made as
of the first day of the applicable Plan Year regardless of the dates of actual
entries or receipt by the Trustee of such contributions.

(c) The determination as to the value of the assets of the Trust and the charges
or credits to the Accounts of the Participants shall be conclusive and binding
on all persons.

7.3 Crediting of Employer Contributions

Each Participant’s Employer Contribution Account shall be credited with that
portion of the Employer’s contribution for the current Year and Stock released
from the Suspense Account for the current year to which such Participant is
entitled, as provided in Section 6.1.

7.4 Crediting of Forfeitures

Forfeitures, if any, occurring during the Plan Year pursuant to Section 18.3(d)
and allocated from the Forfeiture Suspense Accounts shall be allocated among the
Employer Contribution Accounts of all Participants eligible to receive an
allocation of the Employer’s contribution under Section 6.1(a) in the proportion
that the Compensation paid or accrued to each such Participant during such Plan
Year bears to the Compensation paid or accrued to all such Participants during
such Plan Year.

7.5 Limitation on Allocations

(a) Notwithstanding any other provisions of the Plan, the Annual Additions with
respect to a Participant for any Limitation Year shall not exceed the lesser of
(1) $30,000, or such higher amount as may be permitted at the relevant time
under applicable law, or (2) 25%

 

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of the Compensation paid to the Participant by the Employer (or any Related
Employers) during such year. The limitations in the preceding sentence shall not
apply to amounts credited to a Participant’s Employer Contribution Account
pursuant to Section 8.5(b). An amount credited to a Participant’s Account in
order to correct an error made in a previous Limitation Year shall be treated
for purposes of this Section 7.5(a) as having been credited to such Account in
the Limitation Year to which the error relates.

(b) If the allocation of the Employer’s contribution to a Participant’s Employer
Contribution Account in a particular Limitation Year would cause the limitations
of Section 7.5(a) to be exceeded with respect to such Participant, the excess
contribution shall, subject to the limitations of Section 7.5(a), be reallocated
among the Employer Contribution Accounts of all other Participants eligible to
share in the Employer’s contribution for the Plan Year ending in or coinciding
with such Limitation Year, in proportion to their Compensation for such Plan
Year. If, following such reallocation, there remains an excess portion of the
Employer’s contribution which cannot be allocated to the Employer Contribution
Account of any eligible Participant without exceeding the limitations of
Section 7.6(a), such excess portion shall be placed in a suspense account,
designated the “Excess Contribution Account.”

(c) If, following the allocation of the Employer’s contribution for a particular
Plan Year [including all reallocations required pursuant to Section 7.5(b)], the
allocation of forfeitures to a Participant’s Employer Contribution Account would
cause the limitations of Section 7.5(a) to be exceeded with respect to such
Participant, the excess forfeiture shall, subject to the limitations of
Section 7.5(a), be reallocated among the Employer Contribution Accounts of all
other Participants eligible to share in forfeitures for such Plan Year, in
accordance with Section 7.4. If, following such reallocation, there remains an
excess portion of the forfeitures which cannot be allocated to the Employer
Contribution Account of any eligible Participant without exceeding the
limitations of Section 7.5(a), such excess portion shall be placed in a suspense
account, designated the “Excess Forfeiture Account.”

(d) As of the Anniversary Date for a Plan Year, the balance in the Excess
Contribution Account shall first be applied to reduce the Employer’s
contribution under Section 4.1(b). The balance, if any, remaining in the Excess
Contribution Account shall be included in the Employer’s contribution for such
Plan Year for purposes of Section 6.1. Section 7.5(b) shall apply to any amount
which cannot be allocated pursuant to the preceding sentences.

(e) As of the Anniversary Date for a Plan Year, the balance in the Excess
Forfeiture Account shall first be applied to reduce the Employer’s contribution
under Section 4.1(b) after the application of Section 7.5(d). Any remaining
balance in such Excess Forfeiture Account shall be allocated as a forfeiture
under Section 7.4. Section 7.5(c) shall apply to any amount which cannot be
allocated pursuant to the preceding sentences.

(f) For purposes of Section 7.5(a)(2) and Section 7.6, “Compensation” shall have
the meaning set forth in Section 2.11; provided, however, that notwithstanding
any provision

 

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of Section 2.11, for purposes of Section 7.5(a)(2) Compensation shall not
include: any contributions made by the Employer or any Related Employer to this
Plan or any other plan qualified under Section 401(a) of the Code to the extent
excludable from the Employee’s income, or any distributions from this Plan or
any such qualified plan; contributions made to any simplified employee pension
plan described in Section 408(k) of the Code, to the extent deductible by the
Employee; amounts included in the Employee’s income under Section 83 of the Code
[other than by reason of an election under Section 83(b)]; amounts realized from
the sale, exchange or other disposition of stock acquired upon exercise of a
qualified stock option; or other amounts which receive special tax benefits
under the Code, such as contributions to a health or accident plan which are
excludable from the Employee’s income or contributions towards the purchase of
an annuity contract described in Section 403(b) of the Code (whether or not
excludable from the Employee’s income). Notwithstanding the foregoing,
Compensation shall include any amounts deferred under a nonqualified, unfunded
plan of deferred compensation in the Plan Year received by the Employee. If so
elected by the Administrator pursuant to Treasury Regulations 1.415-2(d)(5),
items of compensation shall be included in Compensation for purposes of this
Section 7.5 and Section 7.6 in the Limitation Year in which they are accrued by
the Employer or a Related Employer rather than the Limitation Year in which they
are received by or made available to the Participant, provided that the making
or revocation of such an election shall not have the effect of causing any such
item to be included in Compensation for more than one Limitation Year.

(g) The Administrator of this Plan shall co-ordinate the application of this
Section 7.5 with the application of the corresponding provisions of the
instrument establishing Richardson Electronics, Ltd. Employees Profit-Sharing
Plan (the “Profit-Sharing Plan”) by the administrator of Profit-Sharing Plan in
circumstances where the limitations under Section 7.5(a) and the corresponding
provisions of the instrument establishing the Profit-Sharing Plan would be
exceeded, so as to determine under which of the 2 plans (or both plans, if such
administrators so determine) the adjustments required by Sections 7.5(b) and
(c) and the corresponding provisions of the instrument establishing the
Profit-Sharing Plan shall be made.

(f) If, in any Limitation Year, not more than  1/3 of the total amount allocated
under Section 6.1(b) which are deductible under Section 404(a) of the Code is
allocated to the Employer Contribution Accounts of Participants who are “highly
compensated employees,” as defined in Section 414(q) of the Code, the following
allocations to a Participant’s Account shall be disregarded in applying
Section 7.5(a):

 

  (1) Any forfeitures of Stock which was acquired by a loan under Section 14.2;
or

 

  (2) Any Employer contributions to the Plan which are deductible under Code
Section 404(a)(9)(B) and charged against such Participant’s Account.

 

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7.6 Combined Plan Limitation

(a) Anything to the contrary notwithstanding, if during any Limitation Year a
Participant also participates in a “defined benefit plan” [as defined in
Section 414(j) of the Code] maintained by the Employer or any Related Employer,
the otherwise permissible Annual Addition on behalf of any Participant under the
Plan may be further reduced to the extent necessary, as determined by the
Administrator in its sole discretion, to comply with the additional limitations
set forth in Sections 7.6(b) and (c).

(b) In the event that a Participant also participates in a defined benefit plan
as described in Section 7.6(a), the sum of the Defined Benefit Plan Fraction and
the Defined Contribution Plan Fraction (as hereafter defined) for any Limitation
Year shall not exceed 1.0. For purposes of this Section 7.6, the “Defined
Benefit Plan Fraction” for any Limitation Year is a fraction, the numerator of
which is the Participant’s projected annual benefit under the defined benefit
plan (determined as of the close of its plan year) and the denominator of which
is the lesser of: (1) the product of 1.25 multiplied by the maximum dollar
limitation in effect under Section 415(b)(l)(A) of the Code for such Limitation
Year, or (2) the product of 1.4 multiplied by the amount which may be taken into
account under Section 415(b)(l)(B) of the Code for such Limitation Year. The
“Defined Contribution Plan Fraction” for any Limitation Year is a fraction, the
numerator of which is the sum of the annual additions to the Participant’s
Account (as determined under Section 7.5) as of the close of the Limitation Year
and the denominator of which is the sum of the lesser of the following amounts
determined for such Limitation Year and each prior Year of Service [assuming,
for this purpose, that Section 415(c) of the Code had been in effect during such
prior Years of Service]: (1) the product of 1.25 multiplied by the maximum
dollar limitation in effect under Section 415(c)(l)(A) of the Code for such Year
(determined without regard to Section 415(c)(6) of the Code), or (2) the product
of 1.4 multiplied by the maximum amount which may be taken into account under
Section 415(c)(l)(B) of the Code for such Limitation Year.

(c) Notwithstanding the foregoing, “1.0” shall be substituted for “1.25”
wherever it appears in Section 7.6(b) for any Plan Year in or coinciding with a
Limitation Year which is a Top-Heavy Year, except as hereinafter provided. If as
a result of such substitution the amount credited to any Employee’s Account
would exceed the limitations of this Section 7.6, then such substitution shall
not be made and the allocations to Non-Key Employees shall be revised in
accordance with Section 6.2(f), unless such Plan Year would still be a Top-Heavy
Year if “90%” were substituted for “60%” in all provisions of Section 2.35.

(d) For purposes of this Section 7.6, all defined benefit plans of the Employer
or any Related Employer, whether or not terminated, are to be treated as one
defined benefit plan, and all defined contribution plans of the Employer or any
Related Employer, whether or not terminated, are to be treated as one defined
contribution plan. The extent to which the annual allocations made under this
Plan shall be reduced as compared with the extent to which the annual benefit
under a defined benefit plan shall be reduced in order to achieve compliance
with the

 

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limitations of Sections 415 and 416 of the Code shall be determined by the
Administrator in such a manner so as to maximize the aggregate benefits payable
to such Participant. If such reduction is under this Plan the Administrator
shall advise affected Participants of any additional limitation on their annual
allocations required by this Section 7.6(d).

(e) The provisions of this Section 7.6 are intended to comply with the
provisions of Section 415 of the Code, as modified by Section 416 of the Code,
so that the maximum benefits provided by the Employer or any Related Employer
shall be exactly equal to the maximum amounts allowed under the Code. If there
is any inconsistency between this Section 7.6 and the provisions of Section 415
of the Code, as modified by Section 416 of the Code, such inconsistency shall be
resolved in such a way so as to give full effect to the provisions of the Code.

(f) This Section 7.6 shall not apply with respect to Limitation Years beginning
after May 27, 2000.

7.7 Correction of Error

In the event of an error in the adjustment of a Participant’s Account, the
Administrator, in its sole discretion, may correct such error either by
crediting or charging the adjustment required to make such correction to or
against the income and expenses of the Trust for the Plan Year in which the
correction is made or the Employer may make an additional contribution to permit
the correction of the error. Except as provided in this Section 7.7, the
Accounts of other Participants shall not be readjusted on account of such error.

7.8 Transfer Accounts

(a) The Plan shall accept from the Trustees of the Richardson Electronics, Ltd.,
Employees Profit-Sharing Trust (the “Profit-Sharing Trust”) all of the Stock
held by the Profit-Sharing Trust (the “Transfer Stock”) as of the Transfer Date.
For purposes of this Section 7.8, the term “Transfer Date” shall mean a date
selected by Richardson, as Administrator of both this Plan and of the Richardson
Electronics, Ltd. Profit-Sharing Plan (the “Profit-Sharing Plan”), in its sole
and absolute discretion; provided, however, in no event shall the Transfer Date
be any earlier than 30 days after the date on which the notice required by Code
Section 6058(b) has been filed with the Internal Revenue Service nor any later
than December 31, 1989.

(b) The Transfer Stock shall be credited among the Transfer Accounts created and
maintained under this Plan for the purpose of recording each Participant’s
share, if any, of such Transfer Stock. The Transfer Account of each Employee who
participated in the Profit-Sharing Plan on the Transfer Date shall initially be
credited with that number of shares of Transfer Stock which is identical to the
number of shares of Transfer Stock credited to his account in the Profit-Sharing
Plan as of the Transfer Date. Separate sub-accounts shall be established with
respect to those shares of Transfer Stock acquired with Employer contributions
to the Profit-Sharing Trust and those shares of Transfer Stock acquired with
Participants’ after-tax contributions

 

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to said trust. Thereafter, each such sub-account shall be credited with all
dividends on the Transfer Stock allocated to such sub-account and all net
increases or decreases in the value of such Transfer Stock and shall be debited
with all distributions to the Participant (or his Beneficiary) on whose behalf
such sub-account was established. A Participant shall always be 100% vested in
that sub-account of his Transfer Account which is attributable to Transfer Stock
acquired with his after-tax contributions to the Profit-Sharing Trust.

 

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ARTICLE VIII

VESTING OF INTEREST IN TRUST

8.1 Normal Retirement

The Vested Account Balance of a Participant who attains his Normal Retirement
Date while an Employee shall be 100% of his Account Balance.

8.2 Disability Retirement

The Vested Account Balance of a Participant who retires prior to his Normal
Retirement Date because of a Permanent Disability shall be 100% of his Account
Balance.

8.3 Death

The Vested Account Balance of a Participant who dies prior to incurring a
Termination of Employment shall be 100% of his Account Balance.

8.4 Other Termination of Employment.

Except when Sections 8.1, 8.2 or 8.3 apply, a Participant’s Vested Account
Balance shall be the sum of:

 

  (a) 100% of his Pre-Break Account Balance; plus

 

  (b) 100% of the balance in the sub-account of his Transfer Account which is
described in the last sentence of Section 7.8(b); plus

 

  (c) A percentage of his Employer Contribution Account Balance, and that
portion of his Transfer Account Balance other than the sub-account balance
referred to in the last sentence of Section 7.8(b), based upon the number of
completed Years of Service according to the following schedule:

 

Completed Years of Service

   Vested Percentage  

Less than 2 years

   0 %

2 years but less than 3 years

   20 %

3 years but less than 4 years

   40 %

4 years but less than 5 years

   60 %

5 years but less than 6 years

   80 %

6 years or more

   100 %

 

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8.5 Treatment of Forfeited Amounts; Reinstatement

(a) The excess of a Participant’s Account Balance over his Vested Account
Balance shall be forfeited as of the date of the Participant’s Termination of
Employment. The forfeited amount shall be allocated as provided in Section 7.4
as of the Anniversary Date coincident with or immediately following the date the
Participant incurs such a Termination of Employment (or, if later, the date the
Participant fails to return to work following a layoff or a Leave of Absence as
provided in Section 2.20).

(b) If a Participant returns to the employment of the Employer or any Related
Employer before incurring a Break in Service consisting of at least 5 Years, any
amount forfeited upon such Participant’s Termination of Employment shall be
reinstated by using forfeitures in accordance with Section 7.4 and thereafter,
to the extent necessary, by an additional Employer contribution allocated to the
Participant’s Employer Contribution Account.

8.6 Computation of Years of Service

All Years of Service with the Employer or any Related Employer (including the
Plan Year in which a Termination of Employment occurs, if the Participant
completes 1,000 Hours of Service in such Plan Year) shall be taken into account
in computing Years of Service for purposes of this Article VIII, except that:

 

  (a) If an Employee incurs a Break in Service, Years of Service before such
Break in Service shall be disregarded until he has completed one Year of Service
after his re-employment by the Employer or any Related Employer.

 

  (b) If a Participant who does not have a nonforfeitable right to any portion
of his Employer Contribution Account Balance incurs a Break in Service
consisting of at least 5 Computation Periods, Years of Service before such Break
in Service shall be disregarded if the number of Computation Periods in such
Break in Service equals or exceeds the aggregate number of Years of Service
completed prior to such Break in Service.

 

  (c) In any Plan Year during which a Participant completes more than 500 Hours
of Service but less than 1,000 Hours of Service, the Participant shall not
receive credit for a Year of Service for such Plan Year, but shall continue to
be a Participant, shall be credited with earnings of the Trust and shall remain
in his present position on the vesting schedule in Section 8.4 without
advancement.

 

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8.7 Vesting on Termination of Trust or Termination of Employer’s Agreement to
Contribute

The Vested Account Balance of each Participant shall be 100% of such
Participant’s Account Balance in the event that (a) the Plan is terminated or
partially terminated, (b) the Employer shall permanently discontinue
contributions to the Trust or (c) the Employer’s agreement to make contributions
to the Trust shall be permanently or partially terminated, whether by withdrawal
from the Plan, by amendment to the Plan or by bankruptcy, liquidation or
discontinuance of the business of such Employer, or by merger, consolidation or
reorganization of such Employer without the adoption of this Plan within 180
thereafter by such merged, consolidated or reorganized corporation, or by
operation of law or otherwise. If the Plan is partially terminated, the
provisions of this Section 8.7 shall apply only to Participants affected by the
partial termination.

8.8 Vesting Following Plan Amendment

In the event that any amendment is adopted to the Plan which affects, directly
or indirectly, the computation of the Participants’ Vested Account Balances:

 

  (a) The Vested Account Balance of each Participant shall not, as a result of
such amendment, be less than it would have been had the Participant incurred a
Termination of Employment on the day immediately preceding the day such
amendment was adopted; and

 

  (b) The Vested Account Balance of a Participant who, on the day the amendment
is adopted, had completed at least 3 Years of Service shall thereafter be equal
to the greater of the amount determined under the Plan as so amended or the
amount determined under the Plan without regard to such amendment.

8.9 Vesting Following Partial Distributions

(a) If a Participant receives a distribution of all or a portion of his Employer
Contribution Account Balance at a time when it is possible for him to increase
the vested percentage of his Employer Contribution Account (including a
Participant who received a distribution upon incurring a Termination of
Employment, who returns to the employment of the Employer or any Related
Employer before incurring a Break in Service consisting of at least 5)
Computation Periods, then such Participant’s Vested Account Balance at any time
after he is re-employed shall be determined by (1) increasing the Participant’s
Employer Contribution Account Balance at such time by the Adjusted Distribution
(as hereafter defined), (2) then multiplying the Employer Contribution Account
Balance (as so increased) by the relevant vesting percentage under Section 8.4,
and (3) then subtracting the Adjusted Distribution from the product obtained.
For purposes of this Section 8.9(a), the “Adjusted Distribution” shall be equal
to the amount of the distribution

 

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multiplied by a fraction, the numerator of which is the Participant’s Account
Balance at the time the formula is applied and the denominator of which is the
Account Balance immediately following the distribution (without regard to
forfeitures).

(b) If a Participant returns to the employment of the Employer or any Related
Employer after incurring a Break in Service consisting of at least 5 Computation
Periods, and such Participant did not receive payment of the full amount of his
Vested Account Balance, his Vested Account Balance remaining unpaid shall be
placed in a separate Pre-Break Account for the Participant. The Pre-Break
Account shall be treated in the same manner as the Employer Contribution Account
of the Participant, except that it shall not be credited with the Employer’s
contributions and the Participant shall be 100% vested in such Pre-Break
Account.

 

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ARTICLE IX

PAYMENT OF VESTED ACCOUNT BALANCES

9.1 Benefit Commencement Date

(a) Subject to the remaining provisions of this Section 9.1, the Benefit
Commencement Date for each Participant shall be as soon as practicable after the
Participant has incurred both a Termination of Employment and a Break in Service
consisting of at least 5 years.

(b) Unless the Participant requests, in writing, a later commencement date, the
Benefit Commencement Date shall not be later than one Plan Year after the close
of the Plan Year in which the latest of the following events occurs:

 

  (1) Termination of Employment due to having retired upon reaching the
Participant’s Normal Retirement Date, disability, or death; or

 

  (2) The Participant’s Termination of Employment for any other reason (provided
the Participant has not been re-employed by the Employer or any Related Employer
prior to that time); or

 

  (3) To the extent that a Participant’s Account Balance consists of Stock which
was acquired with the proceeds of a loan incurred pursuant to Section 14.2, the
Plan Year in which such loan is fully repaid.

(c) Except as provided in Section 9.8, a Participant’ s Benefit Commencement
Date shall not be later than the April 1 of the calendar year following the
calendar year determined below:

 

 

(1)

In the case of a Participant not described in any other clause of this
Section 9. l(b), the calendar year in which he attains the age of 70- 1/2.

 

 

(2)

In the case of a Participant who attained the age of 70- 1/2 prior to January 1,
1988, and who was not described in Section 2.19(a)(3) during the Plan Year which
included the last day of the calendar year in which he attained the age of
66- 1/2 or any subsequent Plan Year, the later of (i) the calendar year in which
he attains the age of 70- 1/2 or (ii) the calendar year in which he retires.

 

 

(3)

In the case of a Participant who attained the age of 70- 1/2 prior to January 1,
1988, and who was described in Section 2.19(a)(3) during the Plan Year which
included the last day of the calendar

 

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year in which he attained the age of 66- 1/2 or a subsequent Plan Year, the
later of (i) the calendar year in which he attains the age of 70- 1/2 or
(ii) the earlier of the calendar year in which he retires or the calendar year
which includes the last day of the Plan Year in which he was first described in
Section 2.19(a)(3).

 

 

(4)

In the case of a Participant who attained the age of 70- 1/2 during the calendar
year 1988, who was not described in Section 2.19(a)(3) during the Plan Year
which includes the last day of the calendar year in which he attained the age of
66- 1/2 or any subsequent Plan Year, and who is still alive on January 1, 1989,
the calendar year 1989.

The provisions of this Section 9. l(b) shall apply to all Participants whose
Account Balances were not completely distributed prior to January 1, 1985,
subject, however, to the transitional rules set forth in Proposed Treasury
Regulations Section 1.401(a)(9)-l, Part I, which are hereby incorporated herein.

(d) The Benefit Commencement Date of a Participant whose Vested Account Balance
does not exceeds $3,500 shall be as soon as practicable after his Termination of
Employment and payment therefor shall be in a lump sum. The Benefit Commencement
Date of a Participant whose Vested Account Balance exceeds $3,500 shall not be
earlier than his Normal Retirement Date unless the Participant consents in
writing to an earlier date. A Participant who requests, in writing, the
distribution of his Vested Account Balance prior to his Normal Retirement Date
shall be considered to have consented to such distributions. If the value of a
Participant’s Vested Account Balance, determined at the time of a distribution
to him, exceeds $3,500, then such value at any subsequent time shall be deemed
to exceed $3,500. Effective June 1, 1998, “$5,000” shall be substituted for
“$3,500” in the preceding sentences of this Section 9.1(d).

(e) The date upon which the payment of a deceased Participant’s Vested Account
Balance to his Beneficiary commences shall be determined under Section 9.3.

9.2 Payment to Participants

(a) Each Participant who does not elect to receive installment payments under
Section 9.2(b) shall receive a single lump sum payment on his Benefit
Commencement Date equal to his Vested Account Balance on such date.

(b) Any Participant whose Vested Account Balance on his Benefit Commencement
Date exceeds $3,500 may elect to receive his Vested Account Balance in a series
of not more than 10 annual installments determined in accordance with
Section 9.6 commencing with his Benefit Commencement Date; provided, however,
that the number of installments shall not be more than the number of years of
the Participant’s remaining life expectancy (or the

 

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remaining joint and last survivor life expectancy of the Participant and his
designated Beneficiary) as of the Benefit Commencement Date; and provided
further, that except as otherwise provided in Section 9.6 the amount of any
installment shall not be less than the Participant’s remaining Vested Account
Balance as of the date on which such installment is paid, divided by the
remaining life expectancy of the Participant (or by the remaining joint and last
survivor life expectancy of the Participant and his designated Beneficiary),
determined as of the first day of the calendar year in which such installment
payment is made. For purposes of this Section 9.2(b), life expectancy shall be
determined by the Administrator in accordance with the regulations promulgated
under Section 72 of the Code. The first such installment shall be paid for the
calendar year which is not later than the calendar year specified in the
applicable clause of Section 9.1(b). An election pursuant to this Section 9.2(b)
may be made or revoked at any time prior to the Benefit Commencement Date in
accordance with rules established by the Administrator. After installment
payments have commenced, a Participant may revoke his election, in which event
his full remaining Vested Account Balance shall be distributed to him in a
single lump sum as soon as practicable, but in no event later than the date upon
which the next installment payment would have been required to have been made.
Effective June 1, 1998, “$5,000” shall be substituted for “$3,500” in the first
sentence of this Section 9.2(b).

9.3 Payment to Beneficiaries

(a) If a Participant dies after his Benefit Commencement Date but before his
Vested Account Balance has been distributed in full, all remaining payments
which would have been made to the Participant shall be made instead at the same
time and in the same amounts to his Beneficiaries; provided, however, that
either the Participant prior to his death, or all Beneficiaries following his
death, may elect to have the remaining Vested Account Balance distributed in a
single lump sum payment, subject to the provisions of Section 9.3(c).

(b) If a Participant dies prior to his Benefit Commencement Date (whether or not
still employed by the Employer), then his Vested Account Balance shall be paid
to his Beneficiaries as follows:

 

  (1) If neither the Participant nor his Beneficiaries elect installment
payments under Section 9.3(b)(2), then the Participant’s Vested Account Balance
shall be distributed to his Beneficiaries in a single lump sum payment as soon
as practicable, but in no event later than 5 years after the Participant’s
death.

 

  (2) If either the Participant prior to his death, or his Beneficiaries
following his death, so elect in accordance with the provisions of
Section 9.3(c), then each Beneficiary’s share of such Vested Account Balance
shall be distributed in a series of annual installment payments which meet
either of the following requirements:

 

  (i) The Beneficiary’s entire share of such Vested Account Balance shall be
distributed within 5 years after the Participant’s death; or

 

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  (ii) The first installment payment shall be made to the Beneficiary within one
year after the Participant’s death, and each installment payment made to such
Beneficiary shall be at least equal to such Beneficiary’s share of the
Participant’s remaining Vested Account Balance divided by such Beneficiary’s
remaining life expectancy as of the first day of the calendar year in which such
payment is made (determined in accordance with regulations promulgated under
Section 72 of the Code).

In the case of a Beneficiary who is the surviving Spouse of the Participant, the
first payment made under Section 9.3(b)(2)(ii) may be made not later than the
day on which the Participant would have attained age 70- 1/2, and if such
surviving Spouse dies before such date, such surviving Spouse’s share of the
Participant’s Vested Account Balance shall be distributed in accordance with the
provisions of this Section 9.3(b) as though such surviving Spouse were the
Participant. For purposes of the preceding sentence, the Administrator may, to
the extent of regulations promulgated under Section 401(a)(9)(F) of the Code,
treat amounts payable to a child of the Participant as made to his surviving
Spouse if such amounts will become payable to such Spouse upon such child
reaching the age of majority or upon such other event occurring as may be
specified in such regulations.

(c) Any election and any revocation of any election made under this Section 9.3
shall be in accordance with rules established by, and shall be subject to the
approval of, the Administrator; provided that any election which has the effect
of causing any portion of the Vested Account Balance to be paid to any
Beneficiary other than the surviving Spouse of the Participant, shall be
effective only if (1) such election identifies the designated Beneficiary, and
is consented to, in writing, by the Spouse and the Spouse’s signature is
witnessed either by a representative designated by the Administrator or by a
notary public, or (2) it is established, to the satisfaction of the
Administrator, that the Participant had no surviving Spouse, or that the consent
of the Spouse cannot be obtained because the Spouse cannot be located or because
of such other circumstances as may be specified in regulations promulgated under
Section 417(a)(2)(B) of the Code. The Spouse’s consent, if given, shall be
irrevocable, but shall not be binding upon any future Spouse. Such election may
be revoked by the Participant at any time prior to his Benefit Commencement Date
without the Spouse’s consent, but any change in such election (including any
change in the Beneficiary specified therein) shall require the Spouse’s consent
as set forth above.

 

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(d) Anything else in this Section 9.3 to the contrary notwithstanding, if a
Participant’s Beneficiary is his estate pursuant to Section 10.2, his Vested
Account Balance shall be paid to his estate in a single lump sum.

9.4 Extent of Further Participation in Trust

(a) Upon the distribution of the full amount of a Participant’s Vested Account
Balance in a lump sum pursuant to the provisions of Sections 9.2(a) or
9.3(b)(l), such Participant (and his Beneficiaries) shall cease to have any
interest in the Trust and all obligations hereunder of the Trustee and the
Employer or any Related Employer to them shall cease.

(b) In the event that the distribution of a Participant’s Vested Account Balance
is made in installments pursuant to the provisions of Sections 9.2(b) or
9.3(b)(2), such Participant’s Vested Account Balance remaining payable from time
to time shall constitute a liability of the Trust and at the election of the
Participant or his Beneficiary, as the case may be, shall either (1) continue to
share in the gains and losses of the Trust pursuant to Section 7.2 until it is
completely distributed or (2) shall be segregated and placed in an account at a
national bank or other comparable financial institution insured by the Federal
Deposit Insurance Corporation and shall be credited with any interest earned on
such account. Such Participant’s Vested Account Balance remaining payable from
time to time, after it is segregated, shall not participate in gains or losses
of the Trust or in the Employer’s contributions thereto. The Administrator shall
adopt such rules as it deems necessary or advisable to permit Participants to
make elections and, if it so determines, to revoke or to modify such elections
under this Section 9.4(b).

(c) Each Account of a Participant who dies or incurs a Termination of Employment
shall continue to share in all allocations of gains and losses of the Trust
pursuant to Section 7.2 until it is completely distributed or segregated
pursuant to Sections 9.4(a) or (b), as the case may be.

9.5 Payment to Persons Under Legal Disability

In the event that any amount hereunder shall become payable to a minor or to a
person under legal or other disability who, in the opinion of the Administrator,
is unable to administer such distribution, such amount may be paid to any
person(s) the Administrator deems best for the maintenance, care, support and
education of such minor or disabled person. Any such payment in accordance with
the provisions of this Section 9.5 shall be a complete discharge of any
liability for the making of such payment under the provisions of the Plan.

9.6 Payment in Installments

(a) If a Participant or Beneficiary elects to have an Account distributed in
annual installments pursuant to Section 9.2(b) or 9.3(b)(2), the installment for
each calendar year shall be paid not later than December 31 of such calendar
year. Notwithstanding the foregoing,

 

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if the first calendar year for which an installment payment is to be made
pursuant to Section 9.2(b) is the calendar year specified under the applicable
clause of Section 9.1(c), payment of such installment may be deferred until not
later than the date set forth in Section 9.1(c), but such deferral shall not
affect the date by which the installment for the next succeeding year must be
paid.

(b) The amount of the installment payment for any calendar year shall be equal
to the Vested Account Balance as of the Anniversary Date which occurs in the
immediately preceding calendar year, divided by the divisor determined under
Section 9.6(c). For purposes of determining the amount of the installment
payment, the Vested Account Balance shall include all income, expenses, gains,
losses, contributions and forfeitures allocated as of such Anniversary Date, and
shall be reduced by distributions made after the Anniversary Date only (1) if
the Anniversary Date is other than a December 31 and such distributions are made
on or before December 31 of the calendar year in which the Anniversary Date
occurs, or (2) to the extent that, as permitted by the second sentence of
Section 9.6(a), a portion of the first installment payment required under
Section 9.2(b) is paid after the end of the calendar year for which such
installment is required. To the extent that any amount is distributed for any
calendar year in excess of the installment payment required for such calendar
year, such excess shall not reduce the amount of the installment payment
required for any subsequent year.

(c) The divisor used to determine the amount of each installment payment shall
be determined as follows:

 

  (1)

Unless the person making the election elects to redetermine life expectancies
each year in accordance with Section 9.6(c)(2), the divisor for the first year
for which an installment payment is to be made (hereinafter the “initial
divisor”) shall be a number specified by the person making the election, and the
divisor for each succeeding year shall be equal to the divisor for the
immediately preceding year reduced by one. If the first year for which an
installment payment will be made is the latest calendar year for which
installment payments are allowed to commence pursuant to Section 9.2(b) or
Section 9.2(c)(2), the initial divisor shall not be greater than, in the case of
installments payable under Section 9.2(b), the life expectancy of the
Participant (or, if applicable, the joint and last survivor life expectancy of
the Participant and Beneficiary) or, in the case of installments payable under
Section 9.3(b)(2), the life expectancy of the Beneficiary, determined as of the
Participant’s and/or Beneficiary’s birthday which occurs in such calendar year.
If installments commence in a calendar year earlier than the latest calendar
year for which they are required to begin, the initial divisor shall not be
greater than the maximum initial divisor as set forth in the preceding sentence,
increased by one for

 

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each calendar year prior to the latest year for which installments are required
to begin. If the person making the election fails to specify the initial
divisor, or specifies an improper initial divisor, the initial divisor shall be
the largest initial divisor that the person making the election could have
specified.

 

  (2) If the person electing to receive installments is either the Participant
or the Participant’s Spouse, such person may also elect to redetermine the life
expectancy of the Participant, the Participant’s Spouse, or both, on an annual
basis. Such election may be made or revoked, in writing, at any time prior to
the time at which the first installment is required to be paid pursuant to
Section 9.2(b) or Section 9.3(b)(2). Thereafter, such election or failure to
elect shall be irrevocable. If such election is made, then the divisor for each
year for installments payable pursuant to Section 9.2(b) shall be the remaining
life expectancy of the Participant (or, if applicable, the remaining joint and
last survivor life expectancy of the Participant and his Beneficiary) determined
as of their respective birthdays attained in such year; provided, however, that
if the Participant’s Beneficiary is other than the Participant’s Spouse, or if
the Participant has not elected to redetermine his Spouse’s life expectancy,
then the divisor shall be determined in accordance with Proposed Treasury
Regulations Section 1.401(a)(9)-l, Q & A-E-8(b). The divisor for each year for
installments payable to the Participant’s surviving Spouse under
Section 9.3(b)(2) shall be the remaining life expectancy of the surviving Spouse
as of his birthday attained in such year.

 

  (3) For all purposes of this Section 9.6, life expectancies shall be
determined in accordance with the expected return multiplies set forth in Tables
V and VI of Treasury Regulations Section 1.72-9 as in effect at the time the
life expectancy is being determined.

 

  (4) Anything else contained herein to the contrary notwithstanding, the
divisor for any year shall not be less than the divisor required by the minimum
distribution incidental benefit requirement as set forth in Proposed Treasury
Regulations Section 1.401(a)(9)-2, Q & A-4.

(d) Installments may be paid at regular intervals of less than a year, provided
that the total amount paid in any year shall not be less than the annual
installment required for such year pursuant to this Section 9.6.

 

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9.7 Compliance with Regulations

The provisions of this Article IX are intended to comply with the minimum
distribution requirements of Section 401(a)(9) of the Code and of Proposed
Treasury Regulations Section 1.401(a)(9)-l promulgated thereunder, including the
incidental death benefit requirement as set forth in Proposed Treasury
Regulations Section 1.401(a)(9)-2. Anything else contained in this Plan to the
contrary notwithstanding, all distributions shall be made in accordance with
Section 401(a)(9) and said Regulations, which shall override any provisions of
this Plan which are inconsistent therewith. Upon the promulgation of final
Treasury Regulations replacing Proposed Treasury Regulations
Section 1.401(a)(9)-l and -2, the provisions of this Article IX shall be
construed by reference to such final Treasury Regulations and shall be
implemented accordingly.

9.8 Distributions of Stock and Dividends

(a) Anything else in this Article IX to the contrary notwithstanding, any Stock
held in the Account of a Participant as of his Benefit Commencement Date or the
date of his death shall be distributed to such Participant or his Beneficiaries
in kind, unless such Participant or his Beneficiaries affirmatively elect, in
writing, to receive a distribution of the value of such Stock in cash; provided,
however, that the value of any fractional share of Stock shall be distributed in
cash. To the extent the value of such Stock is distributed in cash, such Stock
shall be reallocated among the Employer Contribution Accounts of the remaining
Participants, and the amount of such cash distribution shall be charged against
such Employer Contribution Accounts, in proportion to the balances therein.

(b) If any dividend is paid on Stock held by the Trust, the Administrator may,
in its discretion, direct the Trustee to distribute such dividend among the
Participants in proportion to the Stock allocated to their Accounts as of the
end of the Plan Year in which such dividend is paid, not later than 90 days
after the end of such Plan Year.

9.9 Right of First Refusal and Options on Stock

(a) Subject to Section 9.9(c), all shares of such distributed to any Participant
or Beneficiary may, as determined by the issuer of the Stock or the
Administrator, be subject to a right of first refusal. Such right shall provide
that prior to any subsequent transfer, the Stock must first be offered by
written offer to the Trust, and then, if refused by the Trust, to the issuer. In
the event that the proposed transfer constitutes a gift or other transfer at
less than fair market value, the price per share shall be determined by an
independent appraiser (appointed by the Administrator) as of the Anniversary
Date coinciding with or immediately preceding the date of exercise. In the event
of a proposed purchase by a prospective bona fide purchaser, the price shall be
the greater of the fair market value, as so determined, or the price offered by
the prospective bona fide purchaser. Valuations must be made in good faith and
based on all relevant factors for determining the fair market value of
securities. The Trust may accept the offer at any time during a period not
exceeding seven days after receipt of such offer. In the event the Trust does
not

 

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accept such offer, the issuer may accept such offer at any time during a period
not exceeding seven days thereafter. Payment for Stock purchased pursuant to a
right of first refusal with respect to a proposed gift shall be either in cash,
not later than 30 days after the right is exercised, or in not more than five
annual installments, the first to be paid within 30 days of exercise, and the
remaining four to bear interest at the rate designated under
Section 483(c)(l)(B) of the Code from time to time. In the case of a proposed
sale, payment shall be made in accordance with the payment terms offered by the
proposed purchaser.

(b) Any Participant (or Beneficiary) to whom Stock is distributed shall have the
right to require the issuer of such Stock to purchase such Stock, by written
notice delivered to such issuer, either within 60 days after such distribution
is received or within the first 60 days of the next succeeding Plan Year. The
purchase price in either case shall be the fair market value [determined as
provided in Section 9.9(a)] as of the Anniversary Date preceding the exercise of
the option. The purchase price shall be paid either in cash within 30 days of
exercise or in not more than 5 annual installments, the first to be paid within
30 days of exercise, and the remaining 4 to bear interest at the rate designated
under Section 483(c)(l)(B) of the Code from time to time. If any Participant
notifies such issuer that he is exercising his option, such issuer shall notify
the Trustee, which shall have the right to assume the rights and obligations of
such issuer under this Section 9.9(b).

(c) Sections 9.9(a) and (b) shall not apply to any Stock which is readily
tradable on an established market.

(d) Except as otherwise provided in this Section 9.7, no Stock shall be subject
to any option, right of first refusal, buy-sell agreement, or similar
restriction. No amendment shall be adopted to the Plan which shall cause any
Stock to be subject to any such restriction, whether or not the Plan continues
to be an employee stock ownership plan as defined in Code Section 4975(a).

9.10 Direct Rollovers

(a) Notwithstanding any other provision of the Plan to the contrary which would
otherwise limit the election of a Distributee (as hereinafter defined) under
this Section 9.10, a Distributee may elect, at the time and in the manner
permitted by the Administrator, to have any portion of an Eligible Rollover
Distribution (as hereinafter defined) paid directly to an Eligible Retirement
Plan (as hereinafter defined) specified by the Distributee in a Direct Rollover
(as hereinafter defined).

(b) For purposes of this Section 9.10, the following terms shall have the
meanings indicated:

 

  (1) “Direct Rollover”: A payment by the Plan to the Eligible Retirement Plan
specified by a Distributee.

 

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  (2) “Distributee”: A Participant who is an Employee or former Employee. In
addition, (i) such a Participant’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, and (ii) the surviving spouse of a deceased Participant who was an
Employee or former Employee, are Distributees with regard to the interest of
such spouse or former spouse in the Plan.

 

  (3) “Eligible Retirement Plan”: 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, which
accepts a Distributee’s Eligible Rollover Distribution. However, in the case of
an Eligible Rollover Distribution to a Distributee who is surviving spouse, an
“Eligible Retirement Plan” means an individual retirement account or individual
retirement annuity.

 

  (4) “Eligible Rollover Distribution”: Any distribution of all or any portion
of the balance to the credit of the Distributee under the Plan, except that an
Eligible Rollover Distribution shall not include: (i) any distribution which 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 10 years or
more; (ii) any distribution to the extent such distribution is required under
Section 401(a)(9) of the Code; and (iii) the portion of any distribution which
is not includible in gross income (determined without regard to the exclusion
for net unrealized appreciation with respect to Employer securities). The
enumeration in the preceding sentence of any form of payment shall not imply
that any person has the right to receive benefits under the Plan in such form
unless otherwise specifically provided under the Plan.

9.11 Withdrawals Due to Permanent Disability

In the event a Participant becomes Permanently Disabled, but has not yet
incurred a Termination of Employment, he or his legal representative may
withdraw all or a portion of his Vested Account Balance. The form of any such
withdrawal shall be determined pursuant to Section 9.2.

 

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ARTICLE X

DESIGNATION OF BENEFICIARIES

10.1 Participants to Name Beneficiaries

Each Participant may file with the Administrator, in such form as the
Administrator shall from time-to-time require, a written designation of a
Beneficiary or Beneficiaries (including contingent or successive Beneficiaries)
who shall be entitled to receive any benefits which may become payable upon the
Participant’s death. If more than one Beneficiary is designated, such
designation shall also specify the manner in which payments are to be divided.
In the absence of such designation, all payments shall be divided per capita,
or, if the Beneficiaries are the Participant’s descendants, per stirpes. The
Beneficiaries may be changed at any time or times by the filing of a new
designation with the Administrator, without the necessity of obtaining the
written consent of any Beneficiary, subject to the rights of the Participant’s
spouse under Section 9.3(c). No designation of a Beneficiary or change thereof
shall be effective until it has been received by the Administrator. The
Administrator shall be entitled to rely upon the last designation filed by the
Participant prior to his death.

10.2 No Beneficiary Designated; Death of Beneficiary

If a Participant dies without having a Beneficiary designation in force, or if
at the time of the Participant’s death (or the date on which a subsequent
installment payment is due) all designated Beneficiaries have died or are no
longer in existence (in the case of Beneficiaries who are not individuals),
payment shall be made to the deceased Participant’s surviving Spouse; or if
there is no surviving Spouse (or if the surviving Spouse dies before a
subsequent installment payment is due), to the deceased Participant’s
descendants (including adopted descendants), per stirpes; or if there are no
living descendants, to the deceased Participant’s estate.

10.3 No Liability for Payment to Beneficiaries

The Administrator shall determine the identity of Beneficiaries, and in so
doing, may act upon such information as, on reasonable inquiry, it may deem
reliable with respect to heirship, relationship, survivorship, or any other fact
relative to the distributes; and the Trustee and Administrator shall be
indemnified and saved harmless by the Employer with respect to all payments
required to be made hereunder, if made in good faith and without actual notice
or knowledge of the changed condition or status of any person receiving
payments. The Administrator may rely on any list or notice furnished by the
Employer or any Related Employer as to the facts, the occurrence of any events,
or the existence of any situation, and shall not be bound to inquire as to the
basis of any such decision, list, or notice, and shall be indemnified and saved
harmless by the Employer for any action taken or suffered to be taken by him in
reliance thereon. In the event any question or dispute shall arise as to the
proper person or persons to whom any payment shall be made, the Trustee may
withhold such payment until a determination

 

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of such question or dispute shall have been made, or until the Trustee shall
have been adequately indemnified against loss to his satisfaction. In
consideration of being permitted to designate his Beneficiaries, the Participant
hereby waives, for himself and all persons claiming by or through him, any claim
against the Administrator, the Committee, the Trustee and the Employer or any
Related Employer as a result of any determination made in good faith as to the
persons entitled to receive any distribution of the Participant’s Vested Account
Balance.

10.4 Qualified Domestic Relations Orders

To the extent provided in any Qualified Domestic Relations Order, and subject to
the provisions of Section 17.4(b) the person or persons named therein shall be
considered the Participant’s Beneficiary.

 

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ARTICLE XI

FIDUCIARY CAPACITY AND RESPONSIBILITY

11.1 General Fiduciary Standard of Conduct

Each fiduciary under the Plan shall discharge his duties hereunder solely in the
interest of the Participants and their Beneficiaries and for the exclusive
purpose of providing benefits to the Participants and their Beneficiaries and
defraying the reasonable expenses of administering the Plan and the Trust. Each
fiduciary shall act 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, in accordance with the documents and instruments
governing the Plan and the Trust, insofar as such documents and instruments are
consistent with this standard.

11.2 Allocation of Responsibility Among Fiduciaries

(a) The fiduciaries shall have only those specific powers, duties,
responsibilities and obligations as are specifically given to them under this
Plan. The Employer shall have the sole responsibility for making the
contributions provided for under Article IV, and to amend or terminate, in whole
or in part, the Plan and the Trust. The Committee shall have the sole
responsibility for assisting the Administrator in the administration of the
Plan, which responsibility is specifically described in the Plan. The Trustee
shall have the sole responsibility for the administration of the Trust and the
management of the assets held under the Trust (unless otherwise managed by an
investment manager), all as specifically provided in the Trust. Each fiduciary
warrants that any directions given, information furnished or action taken by him
shall be in accordance with the provisions of the Plan or the Trust authorizing
or providing for such direction, information or action. Each fiduciary may rely
upon any such direction, information or action of another fiduciary as being
proper under the Plan and the Trust, and is not required to inquire into the
propriety of any such direction, information or action. No fiduciary guarantees
the Trust in any manner against investment loss or depreciation in asset value.
The Administrator, the members of the Committee, the Trustee and any investment
manager shall each be a “named fiduciary” as defined in Section 402(a)(2) of
ERISA. The Administrator may appoint such other named fiduciaries as it may
determine are necessary or appropriate for the administration of the Plan.

(b) A fiduciary shall not be liable for the acts or omissions of another
fiduciary unless (1) the fiduciary knowingly participates in, or knowingly
attempts to conceal the act or omission of, another fiduciary and knows the act
or omission is a breach of a fiduciary responsibility by the other fiduciary; or
(2) the fiduciary has knowledge of a breach by the other fiduciary and shall not
make reasonable efforts to remedy the breach; or (3) the fiduciary’s breach of
his own fiduciary responsibility permits the other fiduciary to commit a breach.

 

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11.3 Administrator

(a) Richardson, or such person as the Employer shall designate pursuant to
paragraph (b), shall serve as the Administrator of the Plan. The Administrator
shall be the “plan administrator” as defined in Section 414(g) of the Code, and
the “administrator” as defined in Section 3(16)(A) of ERISA. The Administrator
shall have the duty to file such plan descriptions and annual reports as may be
required by ERISA or similar legislation and shall be designated to accept
service of legal process and any other notices for the Plan. The Administrator
shall also furnish each Participant with a summary plan description and provide
each Participant with a statement of his Account Balance and his Vested Account
Balance as of each Anniversary Date. The Administrator shall provide the notice
required by Section 402(f) of the Code, with each distribution made after
December 31, 1984, which constitutes a qualifying rollover distribution as
defined by Section 402(a)(5)(E) of the Code.

(b) The Employer shall have the authority to appoint another corporation or one
or more persons to serve as the Administrator hereunder, in which event such
corporation or person (or persons) shall exercise all of the powers, duties,
responsibilities and obligations of the Administrator hereunder.

11.4 Powers and Duties of Administrator

The Administrator shall have all necessary power to accomplish its duties under
the Plan in its discretion, including without limitation the power to:

 

  (a) Construe and interpret the Plan, decide all questions of eligibility and
determine the amount, manner and time of payment of any benefits hereunder
(which determinations shall, in the absence of abuse of discretion, be binding
upon all parties);

 

  (b) Prescribe procedures to be followed by Participants or Beneficiaries
filing applications for benefits;

 

  (c) Assist any Participant regarding any rights, benefits or elections
available under the Plan;

 

  (d) Adopt reasonable procedures for determining whether any order, judgment or
decree constitutes a Qualified Domestic Relations Order, and notify the
Participant and all alternate payees affected or their designated
representatives as to the results of its determinations;

 

  (e) Determine whether to permit assets of the Trust to be used for loans to
Participants pursuant to Section 14.1 and, if such use is to be permitted, adopt
reasonable procedures to implement such determination and give all instructions
to the Trustee relating thereto;

 

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  (f) Direct the Trustee with respect to the amount and type of benefits to
which any Participant or Beneficiary shall be entitled hereunder and with
respect to other disbursements from the Trust;

 

  (g) Receive from the Employer and from Participants such information as shall
be necessary for the proper administration of the Plan;

 

  (h) Maintain all the necessary records for the administration of the Plan;

 

  (i) Receive, review and keep on file (as it deems convenient and proper)
reports of benefit payments made by the Trustee and reports of disbursements for
expenses directed by it;

 

  (j) Make, or instruct the Trustee to make, equitable adjustments for any
mistakes or errors made in the administration of the Plan; and

 

  (k) Do all other acts which the Administrator deems necessary or proper to
accomplish and implement its responsibilities under the Plan.

11.5 Claims Procedure

(a) A Participant or Beneficiary, or an authorized representative acting on his
behalf (hereinafter called the “Claimant”), may notify the Administrator of a
claim for benefits under the Plan. Such notice shall be in writing and may be in
any form provided by or acceptable to the Administrator and shall set forth the
basis of such claim and shall authorize the Administrator to conduct such
examinations as may be necessary to determine the validity of the claim and to
take such steps as may be necessary to facilitate the payment of any benefits to
which the claimant may be entitled under the terms of the Plan. A Claimant shall
have no right to seek review of a denial of benefits, or to bring any action in
any court to enforce a claim for benefits prior to his filing a claim for
benefits and exhausting his rights to review under this Section 11.5.

(b) When a claim for benefits has been filed properly, such claim for benefits
shall be evaluated and the Claimant shall be notified of the approval or the
denial within 90 days after the receipt of such claim unless special
circumstances require an extension of time for processing the claim. If such an
extension of time for processing is required, written notice of the extension
shall be furnished to the Claimant prior to the termination of the initial
90-day period which shall specify the special circumstances requiring an
extension and the date by which a final decision will be reached (which date
shall not be later than 180 days after the date on which the claim was filed). A
Claimant shall be given a written notice in which the Claimant shall be advised
as to whether the claim is granted or denied, in whole or in part. If a claim is
denied, in

 

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whole or in part, the Claimant shall be given written notice which shall contain
(1) the specific reasons for the denial, (2) references to pertinent plan
provisions upon which the denial is based, (3) a description of any additional
material or information necessary to perfect the claim and an explanation of why
such material or information is necessary and (4) the Claimant’s rights to seek
review of the denial.

(c) If a claim is denied, in whole or in part, the Claimant shall have the right
to request that the Administrator review the denial, provided that the Claimant
files a written request for review with the Administrator within 60 days after
the date on which the Claimant received written notification of the denial. A
Claimant (or his duly authorized representative) may review pertinent documents
and submit issues and comments in writing to the Administrator. Within 60 days
after a request for review is received, the review shall be made and the
Claimant shall be advised in writing of the decision on review, unless special
circumstances require an extension of time for processing the review, in which
case the Claimant shall be given a written notification within such initial
60-day period specifying the reasons for the extension and when such review
shall be completed (provided that such review shall be completed within 120 days
after the date on which the request for review was filed). The decision on
review shall be forwarded to the Claimant in writing and shall include specific
reasons for the decision and references to plan provisions upon which the
decision is based. A decision on review shall be final and binding on all
persons for all purposes. If a Claimant shall fail to file a request for review
in accordance with the procedures described in this Section 11.5, such Claimant
shall have no right to review and shall have no right to bring action in any
court and the denial of the claim shall become final and binding on all persons
for all purposes.

11.6 Indemnification by Employer

The Employer shall indemnify the members of the Committee, the Administrator and
each Trustee for, and hold them harmless from and against, any and all
liabilities, losses, costs or expenses (including reasonable attorneys fees) of
whatsoever kind and nature which may be imposed on, incurred by or asserted
against them at any time by reason of their service under the Plan or the Trust
as long as they did not act dishonestly or engage in willful misconduct or gross
negligence in their official capacities hereunder.

11.7 Service in Multiple Capacities

Any person may serve in more than one fiduciary capacity hereunder, including
but not limited to service both as a member of the Committee and as a Trustee.

11.8 Voting of Stock by Participants and Beneficiaries

With respect to any Stock which is entitled to vote and which is a
“registration-type class of securities,” within the meaning of Code
Section 409(e)(4), each Participant or Beneficiary to whose Account shares of
such Stock have been allocated shall be entitled to direct the Trustee

 

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as to the manner in which such shares are to be voted. With respect to any Stock
not described in the preceding sentence, each Participant or Beneficiary to
whose Account shares of such Stock have been allocated shall be entitled to
direct the Trustee as to the manner in which the voting rights with respect to
such Stock are to be exercised with respect to any corporate matter which
involves the voting of such shares with respect to the approval or disapproval
of any corporate merger or consolidation, recapitalization, reclassification,
liquidation, dissolution, sale of substantially all of the assets of a trade or
business or such similar transaction as the Secretary of the Treasury may
prescribe in regulations.

 

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ARTICLE XII

THE COMMITTEE

12.1 Appointment and Membership

The Administrator shall appoint a Committee to assist it in its administration
of the Plan. The Committee shall consist of such number of members as the
Administrator shall determine, who shall be appointed by and serve at the
pleasure of the Administrator. The Administrator may delegate to the Committee
any of its specific duties, rights and authorities under the Plan, or may
delegate the Committee general authority to administer the Plan, in which event
this Plan shall be construed as though the term “Committee” were substituted for
“Administrator” wherever the latter appears other than in this Article XII;
provided that neither the Committee nor any member of the Committee shall be
deemed to be the Administrator pursuant to Section 11.3(a) unless the Committee
or such member is specifically so designated.

12.2 Compensation and Expenses

The members of the Committee shall serve without compensation for their services
hereunder. All expenses of the Committee, including expenses incurred in the
hiring of consultants, advisors, investment managers, attorneys and accountants,
shall be paid by the Employer to the extent that such expenses are not paid out
of the Trust.

12.3 Committee Procedures and Actions

(a) The Committee shall act by a majority of its members at the time in office
and such action may be taken either by vote at a meeting or in writing without a
meeting.

(b) The Committee may adopt such by-laws, rules and regulations as it deems
necessary, desirable or appropriate for the conduct of its affairs. All rules
and decisions of the Committee shall be uniformly and consistently applied to
all Participants and Beneficiaries in similar circumstances. When making a
determination or calculation, the Committee shall be entitled to rely upon
information furnished by a Participant or Beneficiary, the Employer or any
Related Employer, the Administrator or the Trustee, and shall have no duty or
responsibility to verify such information.

(c) The Committee may authorize any one or more of its members to execute any
instrument or document on its behalf.

(d) The Committee shall periodically (but no less frequently than annually)
consult with the Trustee (or any investment manager) with regard to the
investment policy of the Plan and the methods to be used to carry out the Plan’s
objectives.

 

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12.4 Resignation or Removal of Committee Member

(a) Any member of the Committee may resign from office at any time by notifying
the Administrator, the other members of the Committee and the Trustee in
writing, at least 10 days in advance, of such resignation; provided, however,
that such notice may, at the option of the parties, be waived.

(b) Any member of the Committee may be removed from office by the Administrator
at any time, with or without cause. Such removal shall be effectuated by the
tendering to such member, the other members of the Committee and the Trustee of
a written notice of removal, to take effect on the date specified therein;
provided, however, that such notice may, at the option of the parties, be
waived. A member of the Committee who is a Participant shall automatically be
removed from the Committee upon his retirement, Permanent Disability or
Termination of Employment.

(c) Upon such resignation or removal of a member of the Committee, or upon his
death, the Administrator shall promptly appoint a successor member of the
Committee, who may be any individual, whether or not a Participant, and shall
give prompt written notice thereof to the other members of the Committee and the
Trustee. In the event of the failure of the Administrator to appoint such
successor by the effective date of such resignation or removal, or within 10
days after such death, the remaining members of the Committee may appoint such
successor.

(d) Each successor member of the Committee shall have all the powers, duties,
responsibilities and obligations conferred by the Plan as if originally named to
the Committee. No successor member of the Committee shall be personally liable
for any act or failure to act of his predecessor or have any duty to review the
actions of his predecessor.

12.5 Committee/Administrator Decisions Final

The Committee and the Administrator have discretionary authority to determine
matters within their jurisdiction and the decisions of the Committee and of the
Administrator in matters within its jurisdiction shall be final, binding and
conclusive upon the Employer and the Trustee and upon each Employee,
Participant, former Participant, Beneficiary and every other person or party
interested or concerned.

 

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ARTICLE XIII

THE TRUST

13.1 Trust Agreement

All matters relating to the establishment of the Trust, the investment of the
Trust assets and the appointment, resignation or removal, compensation, powers
and duties of the Trustees are set forth in the Trust Agreement, except to the
extent Article XIV applies.

 

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ARTICLE XIV

LOANS TO PARTICIPANTS;

LOANS TO ACQUIRE STOCK; DIVERSIFICATION ELECTIONS

14.1 Loans to Participants

(a) If the Administrator determines, in its sole discretion, to permit loans to
Participants, it shall specify a form of loan application. After receiving and
reviewing a Participant’s application for a loan and such other material as may
reasonably be required, the Administrator may, in its sole discretion, direct
the Trustee to make a loan to a Participant. Any borrowing by a Participant
shall not affect his participation in the Plan. Loans shall be made available to
all Participants on a reasonably equivalent basis, and shall not be made
available to Highly Compensated Employees [as defined in Section 414(q) of the
Code] in an amount greater than that which is made available to other
Participants.

(b) Each Participant may borrow not more than the lesser of (1) $50,000 reduced
by the excess, if any, of (i) the highest outstanding balance of loans made to
the Participant from the Plan during the one year period ending on the day
before the date on which such loan was made, over (ii) the outstanding balance
of loans made to the Participant from the Plan on the date on which such loan
was made, or (2) 50% of his Vested Account Balance. In determining if these
limitations have been exceeded, all loans previously made to a Participant from
the Plan [or from any other employee plan qualified under Section 401(a) of the
Code maintained by the Employer or any Related Employer] shall be taken into
consideration, to the extent of the highest outstanding balances of such loans
during the one year period ending on the date on which the loan from this Plan
is made.

(c) Anything to the contrary notwithstanding, all loans from the Plan shall be
deemed to be a directed investment of the Participant’s Account. For purposes of
determining the annual value of the assets of the Trust, the amount of any loan
to a Participant shall be valued separately from the other assets of the Trust
as provided in Section 7.2(a)(2), although any loan shall be considered at all
times to be part of a Participant’s Account for all other purposes of the Plan.

(d) All loans from the Plan shall be at a reasonable rate of interest as
determined from time to time by the Administrator. All interest paid by a
Participant on a loan shall be credited directly to his Account.

(e) All loans shall be evidenced by a written promissory note executed by the
Participant which shall contain the terms of repayment. As security for a loan,
the Participant shall execute an irrevocable pledge and assignment to the
Trustee of his entire right, title and interest in and to his Account.

 

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(f) All loans shall be repaid by the Participant in such manner and upon such
terms as shall be elected by the Participant and approved by the Administrator
in accordance with guidelines established from time to time by the
Administrator; provided, however, that any repayment terms shall be subject to
the following guidelines:

 

  (1) Any loan [other than a loan described in Section 14.1(f)(2)] shall be
required, by its terms, to be repaid by the Participant within 5 years.

 

  (2) Any loan which is used by the Participant to acquire any dwelling unit
which within a reasonable time is to be used (determined at the time the loan is
made) as a principal residence of the Participant shall be required, by its
terms, to be repaid by the Participant within a period of time as determined by
the Administrator.

 

  (3) Any loan shall be required, by its terms, to be amortized in level
payments, made not less frequently than quarterly, over the term of the loan.
Such amortization may be made by level payments of combined interest and
principal, or by equal payments of principal with interest actually earned.

(g) The Administrator shall have the authority to adopt such rules and
procedures as may be necessary in its sole discretion to implement the
provisions contained in this Section 14.1, provided that such rules and
procedures are not inconsistent with the provisions of ERISA.

14.2 Loans to Acquire Stock

(a) The Administrator may at any time direct the Trustee to cause the Trust to
borrow money from a “disqualified person” (as defined in Section 4975 of the
Code), or to incur a debt guaranteed by a disqualified person if the entire
proceeds of such loan are used in a reasonable time to either purchase Stock, or
to repay a loan previously incurred under this Section 14.2 and the loan
otherwise meets the requirements of this Section 14.2.

(b) Any debt incurred pursuant to Section 14.2(a) must:

 

  (1) Be for the primary benefit of Participants;

 

  (2) Be on terms such that the repayment will not cause other assets of the
Trust to be depleted;

 

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  (3) If the lender is not an independent party, be on terms at least as
favorable to the Trust as the terms of a comparable loan from an independent
party;

 

  (4) Provide that, on default, the value of trust assets transferred in
satisfaction of the loan do not exceed the amount of the default; and, if the
lender is a disqualified person, must provide that a default consists only of
failure to make payments when due and is limited to the amount of such payments;

 

  (5) Be at a reasonable rate of interest; and

 

  (6) Comply with all other regulations and rulings applicable to a loan
described in Section 4975(d)(3) of the Code.

(c) All Stock acquired with the proceeds of a loan described in Section 14.2(a),
whether or not pledged or otherwise encumbered, shall be credited to a Suspense
Account. Each Plan Year, there shall be released from the Suspense Account, and
allocated in accordance with Section 6.1(b), a number of shares of stock equal
to the total number of shares held in the Suspense Account immediately prior to
such release multiplied by a fraction, the numerator of which is the principal
and interest paid on such loan during the Plan Year and the denominator of which
is the sum of the numerator and all principal and interest payments remaining
unpaid at the end of the Plan Year; without regard to possible renewals or
extensions. If the interest rate on the loan is variable, such fraction shall be
computed by assuming that the interest rate in effect at the end of the Plan
Year shall remain in effect for the remaining term of the loan. The terms of any
loan made pursuant to Section 14.2(a) must provide for a definitely
ascertainable number and amount of payments, and the terms of any pledge or
other encumbrance of the Stock which secures such loan must permit the release
of a sufficient number of shares of stock to satisfy this Section 14.2(c).

14.3 Diversification Elections

(a) Each Qualified Participant may make an election (the “Election”) within 90
days after each Anniversary Date during the Qualified Election Period to direct
the Plan to distribute to him, or on his behalf, a portion of his Account
Balance equal to his Diversification Amount. An Election shall be made in, in
writing, on a form to be supplied by the Administrator for such purpose. A
Participant shall become a “Qualified Participant” on the first day on or after
which he has both attained age 55 and completed 10 years of participation in the
Plan. The “Qualified Election Period” shall be the 6-year period commencing with
the Plan Year in which the Participant first becomes a Qualified Participant.
During any one of the first 5 Plan Years of the Qualified Election Period, the
“Diversification Amount” shall be an amount equal to the excess, if any, of 25%
of:

 

  (1) The number of shares of Stock credited to the Qualified Participant’s
Account on or before the last Anniversary Date preceding the Plan Year for which
such Election is made, less

 

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  (2) The number of shares of Stock previously distributed to such Qualified
Participant (or, where he had requested a distribution in cash, the number of
shares of Stock in connection with such a cash distribution to him).

In the last Plan Year of the Qualified Election Period, the preceding sentence
shall be applied by substituting “50%” for “25%.” In applying either such
percentage, any resultant fractional share under .5 shall be disregarded and any
resultant fractional share of .5 or more shall be considered as an additional
full share.

(b) Not later than 90 days after the close of each 90-day period described in
Section 14.3(a), the Administrator shall implement such Qualified Participant’s
Election by distributing to him Stock equal to the Diversification Amount, or,
if so directed by him, the Administrator shall cause such Stock to be sold on
the open market and the net proceeds distributed to him, or on his behalf,
subject to Section 9.10.

(c) The Administrator shall have the sole responsibility for and complete
discretion in establishing and, if it deems it necessary, amending the rules and
procedures governing the time and manner in which Qualified Participants may
make, modify or revoke any Election pursuant to this Section 14.3. The
discretion of the Administrator in this regard shall only be limited by the
general requirement that such discretion be exercised in a non-discriminatory
manner and in compliance with the requirements of Code Section 401(a)(28) and
any regulations promulgated thereunder.

(d) The purpose of this Section 14.3 is to conform to the requirements of Code
Section 401(a)(28). To the extent that this Section 14.3 is inconsistent with
Section 401(a)(28), the provisions of Section 401(a)(28) shall control.

 

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ARTICLE XV

AMENDMENT

15.1 Right to Amend

Richardson shall have the right at any time or times to amend this Plan, in
whole or in part.

15.2 Retroactivity of Amendments

No amendment to this Plan may be made effective retroactively to a date prior to
the beginning of the Plan Year in which it is adopted, except amendments which
are necessary to establish or maintain, without interruption, the qualification
of the Plan for tax exemption under the provisions of the Code.

15.3 Limitations on Right to Amend

No amendment shall be made to this Plan which shall:

 

  (a) Directly or indirectly operate to give the Employer or any Related
Employer any interest in the Trust or to deprive any Participant or Beneficiary
of his interest in the Trust, or cause any part of the income or corpus of the
Trust to be used for, or diverted to, purposes other than for the exclusive
benefit of the Participants or their Beneficiaries, except as provided in
Section 17.1.

 

  (b) Impose any duties, responsibilities or obligations on the Trustee without
its written consent; or

 

  (c) Eliminate an optional form of benefit or eliminate or reduce an “early
retirement benefit” or a “retirement-type subsidy” [as defined in
Section 411(d)(6)(B) of the Code].

 

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ARTICLE XVI

ADOPTION, WITHDRAWAL AND TERMINATION

16.1 Adoption of Plan

(a) With the written consent of the Administrator, any other corporation,
including a Related Employer, may adopt this Plan for the exclusive benefit of
its eligible employees by appropriate resolution, which shall specify the
effective date of such adoption and which may contain such changes and
variations in the Plan and Trust as the Administrator shall approve, and by
agreeing to be bound by the terms of this Plan.

(b) Each participating Employer shall pay a proportionate part of the expenses
incurred in the administration of the Plan and the Trust to the extent that such
expenses are not paid directly out of the Trust.

16.2 Withdrawal from Plan

A participating Employer may withdraw from the Plan by giving written notice to
the Administrator and the Trustee, which notice shall specify the effective date
of the withdrawal, which, unless such requirement is waived by the
Administrator, shall not be less than 30 days after such notice is given. If the
date of withdrawal is not an Anniversary Date, the Trustee shall value all Trust
assets as of the effective date of the withdrawal in the manner provided in
Section 7.2 as if such date were an Anniversary Date, but shall not allocate the
participating Employers’ contribution. The withdrawal by an Employer shall be
treated as a termination of the Plan with respect to Participants employed by
the withdrawing Employer, and such Participants shall be 100% vested in their
Account Balance as of the date of withdrawal, and such Account Balance shall be
distributed as provided in Article IX.

16.3 Termination

(a) The Agreement may be terminated at any time by Richardson.

(b) Upon termination of the Plan and Trust, the Administrator shall direct the
Trustee to value the Trust in accordance with Section 7.2 and to distribute in
accordance with the terms of the Plan all assets remaining in the Trust (after
payment or reserving funds for payment of any fees, taxes and expenses properly
chargeable against the Trust) to the Participants in accordance with the value
of the credits standing to each Participant’s Accounts as of the date of such
termination, in cash or in kind valued at fair market at the date of
distribution, in such manner as the Trustee shall determine.

(c) In the event of the sale by an Employer of substantially all of its assets
and business, the successor to the Employer shall be substituted for and shall
exercise and have all the rights and obligations of the Employer hereunder upon
the filing, in writing, of its election to do so with the Trustee.

 

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ARTICLE XVII

MISCELLANEOUS

17.1 No Reversion to Employer

No part of the corpus or income of the Trust shall revert to the Employer or any
Related Employer or be used for, or diverted to, purposes other than for the
exclusive benefit of the Participants and their Beneficiaries; provided,
however, that:

(a) Any balance remaining in the Excess Contribution Account or the Excess
Forfeiture Account at the time the Plan is terminated, and which cannot be
allocated in the final Plan Year of the Plan without violating the limitations
of Section 7.6, shall be returned to the Employer (and, in the event that there
is more than one participating Employer, such reversion shall be in the
proportion that the aggregate contributions made by each such Employer in all
Plan Years with respect to which amounts were credited to either of such
accounts bears to the aggregate contributions made by all participating
Employers in all such Plan Years).

(b) In the event that any portion of a contribution is made by the Employer to
the Plan because of either a good faith mistake of fact or a good faith mistake
in determining that such contribution is deductible under Section 401 of the
Code, the Trustee shall return to the Employer, upon written notice thereof, an
amount equal to the portion of such contribution which would not have been made
but for such mistake of fact, or which is determined to be non-deductible, as
the case may be, subject to the following conditions and limitations. No amount
shall be returned to the Employer pursuant to this Section 17.l(b) unless such
amount is returned not later than one year after the date on which the
contribution was made in the case of a contribution based on a mistake of fact
was made, or the date on which the deduction is disallowed in case of a
contribution mistakenly believed to be deductible. For purposes of the preceding
sentence, a deduction shall be considered to be disallowed on either (1) the day
on which the Employer voluntarily files an amended federal income tax return
correcting the error; (2) the day on which the Internal Revenue Service issues a
statutory notice of deficiency, notice of final partnership or S corporation
administrative adjustment, or other determination from which no further
administrative appeal is possible, which notice is based in whole or part upon
disallowance of such deduction, provided that, if applicable, no person files a
timely petition for judicial review of such determination; or (3) if such a
petition for judicial review is filed, the day on which a final judgment is
entered dismissing such petition or upholding the disallowance of such deduction
from which judgment no further appeal is possible, or as to which the time for
filing an appeal expires. The amount returned to the Employer shall not include
any earnings attributable to the erroneous contribution, but shall be reduced by
any losses attributable thereto. Notwithstanding the provisions of Article VIII,
an erroneous contribution may be returned in accordance with this
Section 17.l(b) after such contribution has been allocated and credited to the
Participants’ Accounts, in which event the amount so returned shall be charged
to the Accounts in the same proportion that the contribution was originally
allocated; provided, however, that in no event shall

 

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the Account Balance of any Participant be reduced as a result of the return of
an erroneous contribution to less than it would have been had the erroneous
contribution not been made, and the amount returned to the Employer shall be
reduced to the extent necessary to avoid such a reduction.

17.2 Evidence of Action by Necessary Parties

(a) Any action by the Employer pursuant to the provisions of this Plan shall be
evidenced by a resolution of its Board of Directors, or by written instrument
executed by any person authorized by its Board of Directors to take such action.

(b) Necessary parties to any accounting, litigation or other proceedings shall
include only the Trustee and the Employer, and the settlement or judgment in any
such case in which the Employer is duly served or cited shall be binding upon
all persons entitled to benefits under the Plan, the estate of any such person,
and upon all persons claiming by, through or under them.

17.3 Rights of Participants Limited

Neither the adoption of the Plan nor anything contained in the Plan or the Trust
shall be construed as giving any Participant, Beneficiary or Employee any equity
or other interest in the assets, business or affairs of the Employer or any
Related Employer, or the right to complain about any action taken by the
officers, directors or stockholders of, or about any policy adopted or pursued
by, the Employer or any Related Employer, or the right to examine the books and
records of the Employer or any Related Employer, or as giving any Employee the
right to be retained in the service of the Employer or any Related Employer, and
all Employees shall remain subject to discharge to the same extent as if the
Plan and the Trust had never been executed. Prior to the time that distributions
are made in conformity with the provisions of the Plan, neither the
Participants, nor their spouses, Beneficiaries, heirs-at-law, or legal
representatives shall receive cash or any other thing of current exchangeable
value from the Employer or any Related Employer or the Trustee as a result of
the Trust.

17.4 Assignment and Alienation

(a) No payment to any person under any of the provisions of the Plan or the
Trust, nor the right to receive such payment or payments, nor any interest in
the Trust, shall be subject to assignment, alienation, transfer or anticipation,
either by the voluntary or involuntary act of any Participant or Beneficiary or
by operation of law, nor, except for the repayment of loans to Participants
authorized under Section 14.1 and payments pursuant to a Qualified Domestic
Relations Order in accordance with Section 17.4(b), shall such payment or right
or interest be subject to the demands or claims of any creditor of such person,
nor be liable in any way for such person’s debts, obligations or liabilities.

 

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(b) Upon receiving any order, judgment or decree which may be a Qualified
Domestic Relations Order, the Administrator shall promptly notify the
Participant involved and any Alternate Payee [as defined in Section 2.28(a)] who
may be affected by such order of the receipt of the order and of the Plan’s
procedure for determining whether the order is a Qualified Domestic Relations
Order, and shall proceed to determine whether the order is a Qualified Domestic
Relations Order. During the period during which it is being determined whether
such order is a Qualified Domestic Relations Order, any payments which would,
under such order, be payable to an Alternate Payee, shall be placed in a
separate account in the Trust. If, within 18 months after receipt of such order,
the Administrator determines that such order is a Qualified Domestic Relations
Order, the amount of such separate account, with any earnings thereon, shall be
paid to the Alternate Payees as provided in such order. If the status of such
order has not been established within such 18-month period, or if it is
determined that the order is not a Qualified Domestic Relations Order, the
amount of such separate account shall be paid to the Participant, or, if it
would not otherwise have been payable currently, shall be restored to the
Participant’s Account. Any determination made more than 18 months after the
receipt of such order that such order is a Qualified Domestic Relations Order
shall be applied prospectively only.

(c) In the event that any Participant’s benefits are garnished or attached by
order of any court, the Trustee may bring an action for a declaratory judgment
in a court of competent jurisdiction to determine the proper recipient of the
benefits to be paid by the Trust. During the pendency of said action, any
benefits that become payable shall be paid into the court as they become
payable, to be distributed by the court to the recipient it deems proper at the
close of said action.

(d) Section 17.4(a) shall not apply to any offset of a Participant’s benefits
provided under the Plan against an amount that he is ordered or required to pay
to the Plan if:

 

  (1) The order or requirement to pay arises (i) under a judgment of conviction
for a crime involving the Plan; (ii) under a civil judgment (including a consent
order or decree) entered by a court in an action brought in connection with a
violation (or alleged violation) of Part 4 of Subtitle B of Title I of ERISA; or
(iii) pursuant to a settlement agreement between the Secretary of Labor and such
Participant, or a settlement agreement between the Pension Benefit Guaranty
Corporation and such Participant, in connection with a violation (or alleged
violation) of Part 4 of such subtitle by a fiduciary or any other person;

 

  (2) Such judgment, order, decree, or settlement agreement expressly provides
for the offset of all or part of the amount ordered or required to be paid to
the Plan against such Participant’s benefits provided under the Plan; and

 

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  (3) In a case in which the survivor annuity requirements of Section 401(a)(11)
of the Code apply with respect to distributions from the Plan to such
Participant, if such Participant has a spouse at the time at which such offset
is to be made, (i) either such spouse has consented in writing to such offset
and such consent is witnessed by a notary public or representative of the Plan
[or it is established to the satisfaction of a Plan representative that such
consent may not be obtained by reason of circumstances described in
Section 417(a)(2)(B) of the Code], or an election to waive the right of such
spouse to either a “qualified joint and survivor annuity” [within the meaning of
Section 417(b) of the Code] or a “qualified preretirement survivor annuity”
[within the meaning of section 417(c) of the Code] is in effect in accordance
with the requirements of Section 417(a) of the Code; (ii) such spouse is ordered
or required in such judgment, order, decree or settlement to pay an amount to
the Plan in connection with a violation of Part 4 of such subtitle; or (iii) in
such judgment, order, decree, or settlement, such spouse retains the right to
receive the survivor annuity under such a qualified joint and survivor annuity
provided pursuant to Section 401(a)(11)(A)(i) of the Code and under such a
qualified preretirement survivor annuity provided pursuant to
Section 401(a)(11)(A)(ii) of the Code, determined in accordance with
Section 401(a)(13)(D) of the Code.

This Section 17.4(d) shall apply to judgments, orders and decrees issued, and
settlement agreements entered into, on or after August 5, 1997.

17.5 Missing Participants or Beneficiaries

(a) Each Participant shall file with the Employer, in writing, his post office
address, the post office address of each of his Beneficiaries, and each change
of post office address. Any communication, statement or notice addressed to
Participant or Beneficiary with postage prepaid at his last post office address
filed with the Employer, or if no address is filed with the Employer, then at
his last post office address as shown on the Employer’s records, will be binding
on the Participant and his Beneficiary for all purposes of the Plan. Neither the
Trustee nor the Administrator is required to search for or locate Participant or
Beneficiary.

(b) If the Administrator or Trustee shall send by registered or certified mail,
postage prepaid, to the last known address of a Participant or Beneficiary, a
notification that he is entitled to a distribution hereunder and if either
(1) such notification is returned because the addressee cannot be located at
such address and neither the Employer nor the Trustee shall have any knowledge
of such Participant’s or Beneficiary’s whereabouts within 3 years from the date
such notification was mailed, or (2) within 3 years after such notification was
mailed to such

 

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Participant or Beneficiary, he does not respond thereto by informing the Trustee
of his whereabouts, then, upon the Anniversary Date coincident with or
immediately following the third anniversary of the mailing of said notification,
the then undistributed Account Balance of such Participant or Beneficiary shall
be paid to the person or persons who would have been entitled to take in the
event of the death of the Participant or Beneficiary whose whereabouts is
unknown, assuming that such death had occurred on the Anniversary Date
immediately succeeding the third anniversary of the mailing of said
notification.

(c) If any check in payment of a benefit hereunder which has been mailed by
regular United States mail to the last address of the payee furnished the
Trustee by the Administrator is returned unclaimed, the Trustee shall notify the
Administrator and shall discontinue further payments to such payee until it
receives the further instructions of the Administrator.

17.6 Merger and Consolidation of Plan

In the case of any merger or consolidation with, or transfer of assets and
liabilities to, any other employee plan qualified under Section 401(a) of the
Code, provisions shall be made so that each Participant in the Plan on the date
thereof would receive a benefit immediately after the merger, consolidation or
transfer (if the other employee plan terminated on that date) which is equal to
or greater than the benefit he would have been entitled to receive immediately
prior to the merger, consolidation or transfer (if the Plan had then
terminated).

17.7 Severability

In case any provision of this Plan shall be held illegal or invalid for any
reason, said illegality or invalidity shall not affect the remaining provisions,
but shall be fully severable and this Agreement shall be construed and enforced
as if said illegal or invalid provision had never been inserted herein.

17.8 Applicable Law

This Plan shall be construed and enforced and the Trust shall be administered in
accordance with the laws of the State of Illinois, to the extent that such laws
are not preempted by the laws of the United States of America.

17.9 Method of Accounting

The Plan shall use the accrual method of accounting.

 

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17.10 Veterans’ Rights

Effective December 12, 1994 and notwithstanding any provision of this Plan to
the contrary, contributions, benefits and service credit with respect to
qualified military service will be provided in accordance with Section 414(u) of
the Code.

 

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ARTICLE XVIII

REVISED VESTING PROVISIONS

18.1 Scope and Effective Date

As to each Employee who is actively employed by the Employer on or after June 1,
1996, the vested interest of such Employee in his Account shall be determined in
accordance with this Article XVIII notwithstanding any other provision of the
Plan to the contrary; provided, however, Sections 8.1, 8.2, 8.3, 8.4, 8.7 and
8.8 of the Plan shall continue to apply.

18.2 Definitions

For purposes of this Article XVIII, the following terms shall have the meanings
set forth, notwithstanding any definition of any such term elsewhere in the
Plan:

 

  (a) “Break in Service” A Period of Severance of at least 12 consecutive
months. In the case of an individual who is absent from work for maternity or
paternity reasons, the 12-consecutive month period beginning on the first
anniversary of the first date of such absence shall not constitute a Break in
Service. An “absence from work for maternity or paternity reasons” shall mean an
absence (1) by reason of the pregnancy of the individual, (2) by reason of the
birth of a child of the individual, (3) by reason of the placement of a child
with the individual in connection with the adoption of such child by such
individual, or (4) for purposes of caring for such child for a period beginning
immediately following such birth or placement.

 

  (b) “Hour of Service”: Each hour for which an Employee is paid or entitled to
payment for the performance of duties for the Employer or a Related Employer.

 

  (c) “Period of Service”: An Employee’s period of service commencing on the
date he first completes an Hour of Service, and ending on the date a Break in
Service begins; provided, however, that for purposes of Section 18.2(c), any
Employee to whom Section 18.4 applies shall be deemed to have a hire date of
May 31, 1997.

 

  (d) “Period of Severance”: A continuous period of time during which an
Employee is not employed by the Employer. Such period begins on the date such
Employee retires, quits or is discharged, or if earlier, the 12-month
anniversary of the date on which such Employee was otherwise first absent from
service.

 

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  (e) “Years of Service”: The number of whole years of an Employee’s Period of
Service with the Employer or a Related Employer.

For purposes of this Article XVIII, service by an individual on behalf of any of
the following entities before he became an Employee shall be considered service
on behalf of the Employer, to-wit: Amperex Division of North American Phillips
Corp.; B-Scan, Inc.; Calvert Electronics, Inc.; Calvert Holding Co., Inc.;
Calvert Semi-Conductor, Inc.; Ceco Communications, Inc.; Cetron Electronic
Corporation; National Electronics Division of Varian Associates, Inc.;
TubeMaster, Inc.; Compucon Distributors, Inc.; AFP Imaging Corporation; Burtek
Systems (USA), Inc.; AFP Imaging Corporation; Eternal Graphics, Inc., (effective
June 1, 1998 and including service prior to that date); TRL Technologies, Inc.
(effective June 23, 1998 and including service prior to that date); Adler Video
Systems, Inc. (effective November 28, 1998 and including service prior to that
date); and Pixielink Corporation (effective March 8, 1999 and including service
prior to that date); and Broadcast Richmond, Inc. (effective May 31, 2000 and
including service prior to that date).

18.3 General Vesting Rules

(a) For purposes of determining his Years of Service, an Employee shall receive
credit for any Period of Severance of less than 12 consecutive months.
Nonconsecutive Periods of Service shall be aggregated. Additionally, fractional
periods of a year shall be expressed in terms of days, and less-than-whole-year
Periods of Service shall be aggregated on the basis that 365 days of service
shall equal a whole Year of Service.

(b) In the case of a Participant who has 5 consecutive Breaks in Service, all
Years of Service after such Breaks in Service shall be disregarded for the
purpose of determining his vesting in his Account balance which accrued before
such breaks, but both pre-break and post-break service shall count for the
purposes of vesting the Employer-derived Account balance that accrues after such
breaks. Both such balances shall share in the earnings and losses of the Trust.

(c) In the case of a Participant who does not have 5 consecutive Breaks in
Service, both the pre-break and post-break service shall count in vesting both
the pre-break and post-break Employer-derived Account balances.

(d) The excess of a Participant’s Account Balance over his Vested Account
Balance shall be transferred from such Participant’s Employer Contribution
Account to his Forfeiture Suspense Account as of the date on which such
Participant incurs a Break in Service, and shall be forfeited on the date on
which such Participant incurs 5 consecutive Breaks in Service. If such a
Participant returns to the employment of the Employer or any Related Employer
before incurring 5 consecutive Breaks in Service, any amount transferred to his
Forfeiture Suspense Account from his Employer Contribution Account pursuant to
the preceding sentence shall be restored to his Employer Contribution Account.

 

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(e) If a Participant receives a distribution of all or a portion of his Employer
Contribution Account Balance at a time when it is possible for him to increase
the vested percentage of his Employer Contribution Account (including a
Participant who received a distribution upon incurring a Termination of
Employment and who returns to the employment of the Employer or any Related
Employer before incurring at least 5 consecutive Breaks in Service), then such
Participant’s Vested Account Balance at any time after he is re-employed shall
be determined by (1) increasing the Participant’s Employer Contribution Account
Balance at such time by the Adjusted Distribution (as hereafter defined),
(2) then multiplying the Employer Contribution Account Balance (as so increased)
by the relevant vesting percentage under Section 8.4, and (3) then subtracting
the Adjusted Distribution from the product obtained. The “Adjusted Distribution”
shall be equal to the amount of the distribution multiplied by a fraction, the
numerator of which is the Participant’s Account Balance at the time the formula
is applied and the denominator of which is the Account Balance immediately
following the distribution (without regard to forfeitures).

(f) If a Participant returns to the employment of the Employer or any Related
Employer after incurring at least 5 Breaks in Service, and such Participant did
not receive payment of the full amount of his Vested Account Balance, his Vested
Account Balance remaining unpaid shall be placed in a separate Pre-Break Account
for the Participant. The Pre-Break Account shall be treated in the same manner
as the Employer Contribution Account of the Participant, except that it shall
not be credited with the Employer’s contributions and the Participant shall be
100% vested in such Pre-Break Account.

18.4 Transitional Rules

Each Employee described in Section 18.1 who was actively employed by the
Employer on May 31, 1996 shall receive credit for a Period of Service equal to
the sum of:

 

  (a) A number of years equal to the number of Years of Service credited to him
under the Plan (determined without regard to this Article XVIII) as of the
Computation Period ended May 31, 1996; and

 

  (b) The greater of (1) the Period of Service which would be credited to him
under this Article XVIII during the Computation Period ending May 30, 1997 or
(2) the service which would be taken into account under the Plan (determined
without regard to this Article XVIII) during the Computation Period ended
May 30, 1997.

In addition, each such Employee shall receive credit for service determined
under this Article XVIII commencing on May 31, 1997.

 

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IN WITNESS WHEREOF, Richardson has caused this Plan to be executed as of the
date and year first written above.

 

RICHARDSON ELECTRONICS, LTD. By:  

/s/ William G. Seils

  William G. Seils   Senior Vice President,   General Counsel and Secretary

 

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