EXHIBIT 10.8

 

CALIFORNIA INDEPENDENT BANCORP

401(k) RETIREMENT SAVINGS PLAN

 

 

 

 

Defined Contribution Plan 8.0

 

Restated January 1, 1997

 

 

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Addendum to: California Independent Bancorp 401(k)

Retirement Savings Plan

 

Contract Number: 4-45278

 

The following benefits were included in your prior plan and are being removed as
of the amendment/restatement date. According to Section 411(d)(6) of the
Internal Revenue Code benefits listed below shall be available to all member
account balances accrued prior to this date. This addendum is for informational
purposes only and not a part of the plan document.

 

Protected Benefit

Prior Plan
Effective Date

Prior Plan
Article;Section;Page

Amendment/Restatement
Effective Date

Installments — Allowed as a
distribution option under prior
plan.

01-01-1988

Plan Document
Section 7.5 (b)

01-01-2001

Form of Distribution —
Property

01-01-1988

Plan Document
Section 7.6

01-01-2001

 

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TABLE OF CONTENTS

 

INTRODUCTION

 

 

 

 

 

 

 

ARTICLE I

 

FORMAT AND DEFINITIONS

 

 

 

Section 1.01

 

Format

Section 1.02

 

Definitions

 

 

 

 

ARTICLE II

 

PARTICIPATION

 

 

 

Section 2.01

 

Active Participant

Section 2.02

 

Inactive Participant

Section 2.03

 

Cessation of Participation

Section 2.04

 

Adopting Employers - Single Plan

 

 

 

 

ARTICLE III

 

CONTRIBUTIONS

 

 

 

Section 3.01

 

Employer Contributions

Section 3.01 A

 

Rollover Contributions

Section 3.02

 

Forfeitures

Section 3.03

 

Allocation

Section 3.04

 

Contribution Limitation

Section 3.05

 

Excess Amounts

 

 

 

 

ARTICLE IV

 

INVESTMENT OF CONTRIBUTIONS

 

 

 

Section 4.01

 

Investment and Timing of Contributions

Section 4.01A

 

Investment in Qualifying Employer Securities

 

 

 

 

ARTICLE V

 

BENEFITS

 

 

 

Section 5.01

 

Retirement Benefits

Section 5.02

 

Death Benefits

Section 5.03

 

Vested Benefits

Section 5.04

 

When Benefits Start

Section 5.05

 

Withdrawal Benefits

Section 5.06

 

Loans to Participants

Section 5.07

 

Distributions Under Qualified Domestic Relations Orders

 

 

 

 

ARTICLE VI

 

DISTRIBUTION OF BENEFITS

 

 

 

Section 6.01

 

Form of Distribution

Section 6.02

 

Election Procedures

Section 6.03

 

Notice Requirements

 

 

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ARTICLE VII

 

DISTRIBUTION REQUIREMENTS

 

 

 

 

Section 7.01

 

Application

Section 7.02

 

Definitions

Section 7.03

 

Distribution Requirements

 

 

 

 

ARTICLE VIII

 

TERMINATION OF THE PLAN

 

 

 

 

ARTICLE IX

 

ADMINISTRATION OF THE PLAN

 

 

 

 

Section 9.01

 

Administration

Section 9.02

 

Expenses

Section 9.03

 

Records

Section 9.04

 

Information Available

Section 9.05

 

Claim and Appeal Procedures

Section 9.06

 

Delegation of Authority

Section 9.07

 

Exercise of Discretionary Authority

Section 9.08

 

Voting and Tender of Qualifying Employer Securities

 

 

 

 

ARTICLE X

 

GENERAL PROVISIONS

 

 

 

 

Section 10.01

 

Amendments

Section 10.02

 

Direct Rollovers

Section 10.03

 

Mergers and Direct Transfers

Section 10.04

 

Provisions Relating to the Insurer and Other Parties

Section 10.05

 

Employment Status

Section 10.06

 

Rights to Plan Assets

Section 10.07

 

Beneficiary

Section 10.08

 

Nonalienation of Benefits

Section 10.09

 

Construction

Section 10.10

 

Legal Actions

Section 10.11

 

Small Amounts

Section 10.12

 

Word Usage

Section 10.13

 

Change In Service Method

Section 10.14

 

Military Service

 

 

 

 

ARTICLE XI

 

TOP-HEAVY PLAN REQUIREMENTS

 

 

 

 

Section 11.01

 

Application

Section 11.02

 

Definitions

Section 11.03

 

Modification of Vesting Requirements

Section 11.04

 

Modification of Contributions

Section 11.05

 

Modification of Contribution Limitation

 

PLAN EXECUTION

 

 

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INTRODUCTION

 

The Primary Employer previously established a 401 (k) retirement savings plan on
January 1, 1988.

 

The Primary Employer is of the opinion that the plan should be changed. It
believes that the best means to accomplish these changes is to completely
restate the plan’s terms, provisions and conditions. The restatement, effective
January 1, 1997, is set forth in this document and is substituted in lieu of the
prior document.

 

This restatement is made retroactively to reflect the law changes made through
the Internal Revenue Service Restructuring and Reform Act of 1998. The
provisions of this Plan apply as of the effective date of the restatement except
as provided in the attached addendums which reflect the operation of the Plan
between the effective date of the restatement and the date this restatement is
adopted and identify those provisions which are not amended retroactively.

 

The restated plan continues to be for the exclusive benefit of employees of the
Employer. All persons covered under the plan on December 31, 1996, shall
continue to be covered under the restated plan with no loss of benefits.

 

It is intended that the plan, as restated, shall qualify as a profit sharing
plan under the Internal Revenue Code of 1986, including any later amendments to
the Code.

 

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ARTICLE I

 

FORMAT AND DEFINITIONS

 

SECTION 1.01—FORMAT.

 

Words and phrases defined in the DEFINITIONS SECTION of Article I shall have
that defined meaning when used in this Plan, unless the context clearly
indicates otherwise.

 

These words and phrases have an initial capital letter to aid in identifying
them as defined terms.

 

SECTION 1.02—DEFINITIONS.

 

Account means, for a Participant, his share of the Plan Fund. Separate
accounting records are kept for those parts of his Account that result from:

 

(a)           Elective Deferral Contributions

 

(b)           Matching Contributions

 

(c)           Qualified Nonelective Contributions

 

(d)           Rollover Contributions

 

A Participant’s Account shall be reduced by any distribution of his Vested
Account and by any Forfeitures. A Participant’s Account shall participate in the
earnings credited, expenses charged, and any appreciation or depreciation of the
Investment Fund. His Account is subject to any minimum guarantees applicable
under the Annuity Contract or other investment arrangement and to any expenses
associated therewith.

 

ACP Test means the nondiscrimination test described in Code Section 401(m)(2) as
provided for in subparagraph (d) of the EXCESS AMOUNTS SECTION of Article III.

 

Active Participant means an Eligible Employee who is actively participating in
the Plan according to the provisions in the ACTIVE PARTICIPANT SECTION of
Article II.

 

Adopting Employer means an employer which is a Controlled Group member and which
is listed in the ADOPTING EMPLOYERS - SINGLE PLAN SECTION of Article II.

 

ADP Test means the nondiscrimination test described in Code Section 401(k)(3) as
provided for in subparagraph (c) of the EXCESS AMOUNTS SECTION of Article III.

 

Affiliated Service Group means any group of corporations, partnerships or other
organizations of which the Employer is a part and which is affiliated within the
meaning of Code Section 414(m) and regulations thereunder. Such a group includes
at least two organizations one of which is either a service organization (that
is, an organization the principal business of which is performing services), or
an organization the principal business of which is performing management
functions on a regular and

 

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continuing basis. Such service is of a type historically performed by employees.
In the case of a management organization, the Affiliated Service Group shall
include organizations related, within the meaning of Code Section 144(a)(3), to
either the management organization or the organization for which it performs
management functions. The term Controlled Group, as it is used in this Plan,
shall include the term Affiliated Service Group.

 

Alternate Payee means any spouse, former spouse, child, or other dependent of a
Participant who is recognized by a qualified domestic relations order as having
a right to receive all, or a portion of, the benefits payable under the Plan
with respect to such Participant.

 

Annual Compensation means, for a Plan Year, the Employee’s Compensation for the
Compensation Year ending with or within the consecutive 12-month period ending
on the last day of the Plan Year.

 

Annuity Contract means the annuity contract or contracts into which the Trustee
enters with the Insurer for guaranteed benefits, for the investment of
Contributions in separate accounts, and for the payment of benefits under this
Plan. The term Annuity Contract as it is used in this Plan shall include the
plural unless the context clearly indicates the singular is meant.

 

Annuity Starting Date means, for a Participant, the first day of the first
period for which an amount is payable as an annuity or any other form.

 

Beneficiary means the person or persons named by a Participant to receive any
benefits under the Plan when the Participant dies. See the BENEFICIARY SECTION
of Article X.

 

Claimant means any person who makes a claim for benefits under this Plan. See
the CLAIM AND APPEAL PROCEDURES SECTION of Article IX.

 

Code means the Internal Revenue Code of 1986, as amended.

 

Compensation means, except for purposes of the CONTRIBUTION LIMITATION SECTION
of Article III and Article XI, the total earnings, except as modified in this
definition, paid or made available to an Employee by the Employer during any
specified period.

 

“Earnings” in this definition means wages within the meaning of Code Section
3401 (a) and all other payments of compensation to an Employee by the Employer
(in the course of the Employer’s trade or business) for which the Employer is
required to furnish the Employee a written statement under Code Sections
6041(d), 6051(a)(3), and 6052. Earnings must be determined without regard to any
rules under Code Section 3401(a) that limit the remuneration included in wages
based on the nature or location of the employment or the services performed
(such as the exception for agricultural labor in Code Section 3401(a)(2)). The
amount reported in the “Wages, Tips and Other Compensation” box on Form W-2
satisfies this definition.

 

For any Self-employed Individual, Compensation means Earned Income.

 

For purposes of determining the amount of Elective Deferral Contributions and
Matching Contributions Compensation shall exclude reimbursements or other
expense allowances, fringe benefits (cash and noncash), moving expenses,
deferred compensation (other then elective contributions), and welfare benefits.

 

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Compensation shall also include elective contributions. For this purpose,
elective contributions are amounts contributed by the Employer pursuant to a
salary reduction agreement and which are not includible in the gross income of
the Employee under Code Section 125, 402(e)(3), 402(h)(1)(B), or 403(b).
Elective contributions also include compensation deferred under a Code Section
457 plan maintained by the Employer and employee contributions “picked up” by a
governmental entity and, pursuant to Code Section 414(h)(2), treated as Employer
contributions. For years beginning after December 31, 1997, elective
contributions shall also include amounts contributed by the Employer pursuant to
a salary reduction agreement and which are not includible in the gross income of
the Employee under Code Section 132(f)(4).

 

For purposes of the EXCESS AMOUNTS SECTION of Article III, the Employer may
elect to use an alternative nondiscriminatory definition of Compensation in
accordance with the regulations under Code Section 414(s).

 

For Plan Years beginning on or after January 1, 1994, the annual Compensation of
each Participant taken into account for determining all benefits provided under
the Plan for any determination period shall not exceed $150,000, as adjusted for
increases in the cost-of-living in accordance with Code Section 401(a)(17)(B).
The cost-of-living adjustment in effect for a calendar year applies to any
determination period beginning in such calendar year.

 

If a determination period consists of fewer than 12 months, the annual limit is
an amount equal to the otherwise applicable annual limit multiplied by a
fraction. The numerator of the fraction is the number of months in the short
determination period, and the denominator of the fraction is 12.

 

If Compensation for any prior determination period is taken into account in
determining a Participant’s contributions or benefits for the current Plan Year,
the Compensation for such prior determination period is subject to the
applicable annual compensation limit in effect for that determination period.
For this purpose, in determining contributions or benefits in Plan Years
beginning on or after January 1, 1994, the annual compensation limit in effect
for determination periods beginning before that date is $150,000.

 

Compensation means, for a Leased Employee, Compensation for the services the
Leased Employee performs for the Employer, determined in the same manner as the
Compensation of Employee who are not Leased Employees, regardless of whether
such Compensation is received directly from the Employer or from the leasing
organization.

 

Compensation Year means the consecutive 12-month period ending on the last day
of each Plan Year, including corresponding periods before January 1, 1988.

 

Contributions means

 

Elective Deferral Contributions

Matching Contributions

Qualified Nonelective Contributions

Rollover Contributions

 

as set out in Article III, unless the context clearly indicates only specific
contributions are meant.

 

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Controlled Group means any group of corporations, trades, or businesses of which
the Employer is a part that are under common control. A Controlled Group
includes any group of corporations, trades, or businesses, whether or not
incorporated, which is either a parent-subsidiary group, a brother-sister group,
or a combined group within the meaning of Code Section 414(b), Code Section,
414(c) and regulations thereunder and, for purposes of determining contribution
limitations under the CONTRIBUTION LIMITATION SECTION of Article III, as
modified by Code Section 415(h) and, for the purpose of identifying Leased
Employees, as modified by Code Section 144(a)(3). The term Controlled Group, as
it is used in this Plan, shall include the term Affiliated Service Group and any
other employer required to be aggregated with the Employer under Code Section
414(o) and the regulations thereunder.

 

Direct Rollover means a payment by the Plan to the Eligible Retirement Plan
specified by the Distributee.

 

Distributee means an Employee or former Employee. In addition, the Employee’s
(or former Employee’s) surviving spouse and the Employee’s (or former
Employee’s) spouse or former spouse who is the alternate payee under a qualified
domestic relations order, as defined in Code Section 414(p), are Distributees
with regard to the interest of the spouse or former spouse.

 

Early Retirement Age means a Participant’s age on the date he meets the
following requirement(s):

 

(a)           He has attained age 55.

 

(b)           He has completed 7 years of service with the Employer.

 

Early Retirement Date means the first day of any month before a Participant’s
Normal Retirement Date which the Participant selects for the start of his
retirement benefits. This day may be on or after the date on which he ceases to
be an Employee and reaches Early Retirement Age. If a Participant ceases to be
an Employee before satisfying any age requirement for Early Retirement Age, but
after satisfying any other requirements, the Participant shall be entitled to
elect an early retirement benefit upon satisfying such age requirement.

 

Earned Income means, for a Self-employed Individual, net earnings from
self-employment in the trade or business for which this Plan is established if
such Self-employed Individual’s personal services are a material income
producing factor for that trade or business. Net earnings shall be determined
without regard to items not included in gross income and the deductions properly
allocable to or chargeable against such items. Net earnings shall be reduced for
the employer contributions to the Employer’s qualified retirement plan(s) to the
extent deductible under Code Section 404.

 

Net earnings shall be determined with regard to the deduction allowed to the
Employer by Code Section 164(f) for taxable years beginning after December 31,
1989.

 

Elective Deferral Contributions means contributions made by the Employer to fund
this Plan in accordance with elective deferral agreements between Eligible
Employees and the Employer.

 

Elective deferral agreements shall be made, changed, or terminated according to
the provisions of the EMPLOYER CONTRIBUTIONS SECTION of Article III.

 

Elective Deferral Contributions shall be 100% vested and subject to the
distribution restrictions of Code Section 401(k) when made. See the WHEN
BENEFITS START SECTION of Article V.

 

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Eligibility Service means an Employee’s Period of Service. Eligibility Service
shall be measured from his Employment Commencement Date to his most recent
Severance Date. Eligibility Service shall be reduced by any Period of Severance
that occurred prior to his most recent Severance Date, unless such Period of
Severance is included under the service spanning rule below. This period of
Eligibility Service shall be expressed as months (on the basis that 30 days
equal one month).

 

However, Eligibility Service is modified as follows:

 

Period of Military Duty included:

 

A Period of Military Duty shall be included as service with the Employer to the
extent it has not already been credited.

 

Period of Severance included (service spanning rule):

 

A Period of Severance shall be deemed to be a Period of Service under either of
the following conditions:

 

(a)                                  the Period of Severance immediately follows
a period during which an Employee is not absent from work and ends within 12
months; or

 

(b)                                 the Period of Severance immediately follows
a period during which an Employee is absent from work for any reason other than
quitting, being discharged, or retiring (such as a leave of absence or layoff)
and ends within 12 months of the date he was first absent.

 

Controlled Group service included:

 

An Employee’s service with a member firm of a Controlled Group while both that
firm and the Employer were members of the Controlled Group shall be included as
service with the Employer.

 

Eligible Employee means any Employee of the Employer who meets the following
requirement. His employment classification with the Employer is the following:

 

Not an Employee considered by the Employer to be an independent contractor, or
the employee of an independent contractor, who is later determined by the
Internal Revenue Service to be an Employee.

 

Eligible Retirement Plan means an individual retirement account described in
Code Section 408(a), an individual retirement annuity described in Code Section
408(b), an annuity plan described in Code Section 403(a) or a qualified trust
described in Code Section 401(a), that accepts the Distributee’s Eligible
Rollover Distribution. However, in the case of an Eligible Rollover Distribution
to the surviving spouse, an Eligible Retirement Plan is an individual retirement
account or individual retirement annuity.

 

Eligible Rollover Distribution means any distribution of all or any portion of
the balance to the credit of the Distributee, except that an Eligible Rollover
Distribution does not include: (i) any distribution that is one of a series of
substantially equal periodic payments (not less frequently than annually) made
for the life (or life expectancy) of the Distributee or the joint lives (or
joint life expectancies) of the Distributee and the Distributee’s designated
Beneficiary, or for a specified period of ten years or more; (ii) any

 

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distribution to the extent such distribution is required under Code Section
401(a)(9); (iii) any hardship distribution described in Code Section
401(k)(2)(B)(i)(IV) received after December 31, 1998; (iv) the portion of any
other distribution(s) that is not includible in gross income (determined without
regard to the exclusion for net unrealized appreciation with respect to employer
securities); and (v) any other distribution(s) that is reasonably expected to
total less than $200 during a year.

 

Employee means an individual who is employed by the Employer or any other
employer required to be aggregated with the Employer under Code Sections 414(b),
(c), (m), or (o). A Controlled Group member is required to be aggregated with
the Employer.

 

The term Employee shall include any Self-employed Individual treated as an
employee of any employer described in the preceding paragraph as provided in
Code Section 401(c)(1). The term Employee shall also include any Leased Employee
deemed to be an employee of any employer described in the preceding paragraph as
provided in Code Section 414(n) or (o).

 

Employer means the Primary Employer. This will also include any successor
corporation or firm of the Employer which shall, by written agreement, assume
the obligations of this Plan or any Predecessor Employer which maintained this
Plan.

 

Employer Contributions means

 

Elective Deferral Contributions

Matching Contributions

Qualified Nonelective Contributions

 

as set out in Article III and contributions made by the Employer to fund this
Plan in accordance with the provisions of the MODIFICATION Of CONTRIBUTIONS
SECTION of Article XI, unless the context clearly indicates only specific
contributions are meant.

 

Employment Commencement Date means the date an Employee first performs an
Hour-of-Service.

 

Entry Date means the date an Employee first enters the Plan as an Active
Participant. See the ACTIVE PARTICIPANT SECTION of Article II.

 

ERISA means the Employee Retirement Income Security Act of 1974, as amended.

 

Fiscal Year means the Primary Employer’s taxable year. The last day of the
Fiscal Year is December 31.

 

Forfeiture means the part, if any, of a Participant’s Account that is forfeited.
See the FORFEITURES SECTION of Article III.

 

Highly Compensated Employee means any Employee who:

 

(a)           was a 5-percent owner at any time during the year or the preceding
year, or

 

(b)                                 for the preceding year had compensation from
the Employer in excess of $80,000 and, if the Employer so elects, was in the
top-paid group for the preceding year. The $80,000 amount is

 

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adjusted at the same time and in the same manner as under Code Section 415(d),
except that the base period is the calendar quarter ending September 30, 1996.

 

For this purpose the applicable year of the plan for which a determination is
being made is called a determination year and the preceding 12-month period is
called a look-back year. If the Employer makes a calendar year data election,
the look-back year shall be the calendar year beginning with or within the
look-back year. The Plan may not use such election to determine whether
Employees are Highly Compensated Employees on account of being a 5-percent
owner.

 

In determining who is a Highly Compensated Employee the Employer does not make a
top-paid group election. In determining who is a Highly Compensated Employee the
Employer does not make a calendar year data election.

 

Calendar year data elections and top-paid group elections, once made, apply for
all subsequent years unless changed by the Employer. If the Employer makes one
election, the Employer is not required to make the other. If both elections are
made, the look-back year in determining the top-paid group must be the calendar
year beginning with or within the look-back year. These elections must apply
consistently to the determination years of all plans maintained by the Employer
which reference the highly compensated employee definition in Code Section
414(q), except as provided in Internal Revenue Service Notice 97-45 (or
superseding guidance). The consistency requirement will not apply to
determination years beginning with or within the 1997 calendar year, and for
determination years beginning on or after January 1, 1998 and before January 1,
2000, satisfaction of the consistency requirement is determined without regard
to any nonretirement plans of the Employer.

 

The determination of who is a highly compensated former Employee is based on the
rules applicable to determining Highly Compensated Employee status as in effect
for that determination year, in accordance with section 1.414(q)-1T, A-4 of the
temporary Income Tax Regulations and Internal Revenue Service Notice 97-45.

 

In determining whether an Employee is a Highly Compensated Employee for years
beginning in 1997, the amendments to Code Section 414(q) stated above are
treated as having been in effect for years beginning in 1996.

 

The determination of who is a Highly Compensated Employee, including the
determinations of the number and identity of Employees in the top-paid group,
the compensation that is considered, and the identity of the 5-percent owners,
shall be made in accordance with Code Section 414(q) and the regulations
thereunder.

 

Hour-of-Service means, for an Employee, each hour for which he is paid, or
entitled to payment, for performing duties for the Employer.

 

Hours-of-Service shall be credited for employment with any other employer
required to be aggregated with the Employer under Code Sections 414(b), (c), (m)
or (o) and the regulations thereunder for purposes of eligibility and vesting.
Hours-of-Service shall also be credited for any individual who is considered an
employee for purposes of this Plan pursuant to Code Section 414(n) or Code
Section 414(o) and the regulations thereunder.

 

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Inactive Participant means a former Active Participant who has an Account. See
the INACTIVE PARTICIPANT SECTION of Article II.

 

Insurer means Principal Life Insurance Company and any other insurance company
or companies named by the Trustee or Primary Employer.

 

Investment Fund means the total of Plan assets, excluding the guaranteed benefit
policy portion of any Annuity Contract. All or a portion of these assets may be
held under the Trust Agreement.

 

The Investment Fund shall be valued at current fair market value as of the
Valuation Date. The valuation shall take into consideration investment earnings
credited, expenses charged, payments made, and changes in the values of the
assets held in the Investment Fund.

 

The Investment Fund shall be allocated at all times to Participants, except as
otherwise expressly provided in the Plan. The Account of a Participant shall be
credited with its share of the gains and losses of the Investment Fund. That
part of a Participant’s Account invested in a funding arrangement which
establishes one or more accounts or investment vehicles for such Participant
thereunder shall be credited with the gain or loss from such accounts or
investment vehicles. The part of a Participant’s Account which is invested in
other funding arrangements shall be credited with a proportionate share of the
gain or loss of such investments. The share shall be determined by multiplying
the gain or loss of the investment by the ratio of the part of the Participant’s
Account invested in such funding arrangement to the total of the Investment Fund
invested in such funding arrangement.

 

Investment Manager means any fiduciary (other than a trustee or Named Fiduciary)

 

(a)           who has the power to manage, acquire, or dispose of any assets of
the Plan;

 

(b)           who (i) is registered as an investment adviser under the
Investment Advisers Act of 1940; (ii) is not registered as an investment adviser
under such Act by reason of paragraph (1) of section 203A(a) of such Act, is
registered as an investment adviser under the laws of the state (referred to in
such paragraph (1)) in which it maintains its principal office and place of
business, and, at the time it last filed the registration form most recently
filed by it with such state in order to maintain its registration under the laws
of such state, also filed a copy of such form with the Secretary of Labor, (iii)
is a bank, as defined in that Act; or (iv) is an insurance company qualified to
perform services described in subparagraph (a) above under the laws of more than
one state; and

 

(c)           who has acknowledged in writing being a fiduciary with respect to
the Plan.

 

Late Retirement Date means the first day of any month which is after the date a
Participant’s Normal Retirement Date and on which retirement benefits begin. If
a Participant continues to work for the Employer after his Normal Retirement
Date, his Late Retirement Date shall be the earliest first day of the month on
or after the date he ceases to be an Employee. An earlier or a later Retirement
Date may apply if the Participant so elects. An earlier Retirement Date may
apply if the Participant is age 70 1/2. See the WHEN BENEFITS START SECTION of
Article V.

 

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Leased Employee means any person (other than an employee of the recipient) who,
pursuant to an agreement between the recipient and any other person (“leasing
organization”), has performed services for the recipient (or for the recipient
and related persons determined in accordance with Code Section 414(n)(6)) 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.
Contributions or benefits provided by the leasing organization to a Leased
Employee, which are attributable to service performed for the recipient
employer, shall be treated as provided by the recipient employer.

 

A Leased Employee shall not be considered an employee of the recipient if:

 

(a)                                  such employee is covered by a money
purchase pension plan providing (i) a nonintegrated employer contribution rate
of at least 10 percent of compensation, as defined in Code Section 415(c)(3),
but including amounts contributed pursuant to a salary reduction agreement which
are excludible from the employee’s gross income under Code Sections
125,402(e)(3), 402(h)(1)(B), or 403(b), (ii) immediate participation, and (iii)
full and immediate vesting, and

 

(b)           Leased Employees do not constitute more than 20 percent of the
recipient’s nonhighly compensated work force.

 

Loan Administrator means the person(s) or position(s) authorized to administer
the Participant loan program.

 

The Loan Administrator is the V. P. of Human Resources.

 

Matching Contributions means contributions made by the Employer to fund this
Plan which are contingent on a Participant’s Elective Deferral Contributions.
See the EMPLOYER CONTRIBUTIONS SECTION of Article III.

 

Monthly Date means each Yearly Date and the same day of each following month
during the Plan Year beginning on such Yearly Date.

 

Named Fiduciary means the person or persons who have authority to control and
manage the operation and administration of the Plan.

 

The Named Fiduciary is the Employer.

 

Nonhighly Compensated Employee means an Employee of the Employer who is not a
Highly Compensated Employee.

 

Normal Retirement Age means the age at which the Participant’s normal retirement
benefit becomes nonforfeitable if he is an Employee. A Participant’s Normal
Retirement Age is 65.

 

Normal Retirement Date means the earliest first day of the month on or after the
date the Participant reaches his Normal Retirement Age. Unless otherwise
provided in this Plan, a Participant’s retirement benefits shall begin on a
Participant’s Normal Retirement Date if he has ceased to be an Employee on such
date and has a Vested Account. Even if the Participant is an Employee on his
Normal Retirement Date, he may choose to have his retirement benefit begin on
such date. See the WHEN BENEFITS START SECTION of Article V.

 

14

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Owner-employee means a Self-employed Individual who, in the case of a sole
proprietorship, owns the entire interest in the unincorporated trade or business
for which this Plan is established. If this Plan is established for a
partnership, an Owner-employee means a Self-employed Individual who owns more
than 10 percent of either the capital interest or profits interest in such
partnership.

 

Parental Absence means an Employee’s absence from work:

 

(a)           by reason of pregnancy of the Employee,

 

(b)           by reason of birth of a child of the Employee,

 

(c)           by reason of the placement of a child with the Employee in
connection with adoption of such child by such Employee, or

 

(d)           for purposes of caring for such child for a period beginning
immediately following such birth or placement.

 

Participant means either an Active Participant or an Inactive Participant.

 

Period of Military Duty means, for an Employee

 

(a)           who served as a member of the armed forces of the United States,
and

 

(b)                                 who was reemployed by the Employer at a time
when the Employee had a right to reemployment in accordance with seniority
rights as protected under Chapter 43 of Title 38 of the U. S. Code,

 

the period of time from the date the Employee was first absent from active work
for the Employer because of such military duty to the date the Employee was
reemployed.

 

Period of Service means a period of time beginning on an Employee’s Employment
Commencement Date or Reemployment Commencement Date (whichever applies) and
ending on his Severance Date.

 

Period of Severance means a period of time beginning on an Employee’s Severance
Date and ending on the date he again performs an Hour-of-Service.

 

A one-year Period of Severance means a Period of Severance of 12 consecutive
months.

 

Solely for purposes of determining whether a one-year Period of Severance has
occurred for eligibility or vesting purposes, the consecutive 12-month period
beginning on the first anniversary of the first date of a Parental Absence shall
not be a one-year Period of Severance.

 

Plan means the 401(k) retirement savings plan of the Employer set forth in this
document, including any later amendments to it.

 

Plan Administrator means the person or persons who administer the Plan.

 

The Plan Administrator is the Employer.

 

15

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Plan Fund means the total of the Investment Fund and the guaranteed benefit
policy portion of any Annuity Contract. The Investment Fund shall be valued as
stated in its definition. The guaranteed benefit policy portion of any Annuity
Contract shall be determined in accordance with the terms of the Annuity
Contract and, to the extent that such Annuity Contract allocates contract values
to Participants, allocated to Participants in accordance with its terms. The
total value of all amounts held under the Plan Fund shall equal the value of the
aggregate Participants’ Accounts under the Plan.

 

Plan Year means a period beginning on a Yearly Date and ending on the day before
the next Yearly Date.

 

Plan-year Quarter means a period beginning on a Quarterly Date and ending on the
day before the next Quarterly Date.

 

Predecessor Employer means a firm of which the Employer was once a part  (e.g.,
due to a spinoff or change of corporate status) or a firm absorbed by the
Employer because of a merger or acquisition (stock or asset, including a
division or an operation of such company).

 

Primary Employer means California Independent Bancorp.

 

Qualified Nonelective Contributions means contributions made by the Employer to
fund this Plan (other than Elective Deferral Contributions) which are 100%
vested and subject to the distribution restrictions of Code Section 401(k) when
made. See the EMPLOYER CONTRIBUTIONS SECTION of Article III and the WHEN
BENEFITS START SECTION of Article V.

 

Qualifying Employer Securities means any security which is issued by the
Employer or any Controlled Group member and which meets the requirements of Code
Section 409(l) and ERISA Section 407(d)(5). This shall also include any
securities that satisfied the requirements of the definition when these
securities were assigned to the Plan.

 

Qualifying Employer Securities Fund means that part of the assets of the Trust
Fund that are designated to be held primarily or exclusively in Qualifying
Employer Securities for the purpose of providing benefits for Participants.

 

Quarterly Date means each Yearly Date and the third, sixth, and ninth Monthly
Date after each Yearly Date which is within the same Plan Year.

 

Reemployment Commencement Date means the date an Employee first performs an
Hour-of-Service following a Period of Severance.

 

Reentry Date means the date a former Active Participant reenters the Plan. See
the ACTIVE PARTICIPANT SECTION of Article II.

 

Retirement Date means the date a retirement benefit will begin and is a
Participant’s Early, Normal, or Late Retirement Date, as the case may be.

 

Rollover Contributions means the Rollover Contributions which are made by an
Eligible Employee or an Inactive Participant according to the provisions of the
ROLLOVER CONTRIBUTIONS SECTION of Article III.

 

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Self-employed Individual means, with respect to any Fiscal Year, an individual
who has Earned Income for the Fiscal Year (or who would have Earned Income but
for the fact the trade or business for which this Plan is established did not
have net profits for such Fiscal Year).

 

Severance Date means the earlier of:

 

(a)           the date on which an Employee quits, retires, dies, or is
discharged, or

 

(b)                                 the first anniversary of the date an
Employee begins a one-year absence from service (with or without pay). This
absence may be the result of any combination of vacation, holiday, sickness,
disability, leave of absence or layoff.

 

Solely to determine whether a one-year Period of Severance has occurred for
eligibility or vesting purposes for an Employee who is absent from service
beyond the first anniversary of the first day of a Parental Absence, Severance
Date is the second anniversary of the first day of the Parental Absence. The
period between the first and second anniversaries of the first day of the
Parental Absence is not a Period of Service and is not a Period of Severance.

 

Totally and Permanently Disabled means that a Participant is disabled, as a
result of sickness or injury, to the extent that he is prevented from engaging
in any substantial gainful activity, and is eligible for and receives a
disability benefit under Title II of the Federal Social Security Act.

 

Trust Agreement means an agreement of trust between the Primary Employer and
Trustee established for the purpose of holding and distributing the Trust Fund
under the provisions of the Plan. The Trust Agreement may provide for the
investment of all or any portion of the Trust Fund in the Annuity Contract.

 

Trust Fund means the total funds held under the Trust Agreement.

 

Trustee means the party or parties named in the Trust Agreement. The term
Trustee as it is used in this Plan is deemed to include the plural unless the
context clearly indicates the singular is meant.

 

Valuation Date means the date on which the value of the assets of the Investment
Fund is determined. The value of each Account which is maintained under this
Plan shall be determined on the Valuation Date. In each Plan Year, the Valuation
Date shall be the last day of the Plan Year. At the discretion of the Plan
Administrator, Trustee, or Insurer (whichever applies), assets of the Investment
Fund may be valued more frequently. These dates shall also be Valuation Dates.

 

Vested Account means the vested part of a Participant’s Account. The
Participant’s Vested Account is equal to his Account.

 

The Participant’s Vested Account is nonforfeitable. The percentage used to
determine that portion of a Participant’s Account attributable to Employer
Contributions which is nonforfeitable is 100%.

 

Yearly Date means January 1, 1988, and the same day of each following year.

 

Years of Service means an Employee’s Period of Service. Years of Service shall
be measured from his Employment Commencement Date to his most recent Severance
Date. Years of Service shall be

 

17

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reduced by any Period of Severance that occurred prior to his most recent
Severance Date, unless such Period of Severance is included under the service
spanning rule below. This period of Years of Service shall be expressed as years
and fractional parts of a year (to four decimal places) on the basis that 365
days equal one year.

 

However, Years of Service is modified as follows:

 

Period of Military Duty included:

 

A Period of Military Duty shall be included as service with the Employer to the
extent it has not already been credited.

 

Period of Severance included (service spanning rule):

 

A Period of Severance shall be deemed to be a Period of Service under either of
the following conditions:

 

(a)           the Period of Severance immediately follows a period during which
an Employee is not absent from work and ends within 12 months; or

 

(b)           the Period of Severance immediately follows a period during which
an Employee is absent from work for any reason other than quitting, being
discharged or retiring (such as a leave of absence or layoff) and ends within 12
months of the date he was first absent.

 

Controlled Group service included:

 

An Employee’s service with a member firm of a Controlled Group while both that
firm and the Employer were members of the Controlled Group shall be included as
service with the Employer.

 

18

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ARTICLE II

 

PARTICIPATION

 

SECTION 2.01—ACTIVE PARTICIPANT.

 

(a)                                  An Employee shall first become an Active
Participant (begin active participation in the Plan) on the earliest Quarterly
Date on which he is an Eligible Employee and has met both of the eligibility
requirements set forth below. This date is his Entry Date.

 

(1)           He has completed three months of Eligibility Service before his
Entry Date.

 

(2)           He is age 21 or older.

 

Each Employee who was an Active Participant under the Plan on December 31, 1996,
shall continue to be an Active Participant if he is still an Eligible Employee
on January 1, 1997, and his Entry Date shall not change.

 

If a person has been an Eligible Employee who has met all of the eligibility
requirements above, but is not an Eligible Employee on the date which would have
been his Entry Date, he shall become an Active Participant on the date he again
becomes an Eligible Employee. This date is his Entry Date.

 

In the event an Employee who is not an Eligible Employee becomes an Eligible
Employee, such Eligible Employee shall become an Active Participant immediately
if such Eligible Employee has satisfied the eligibility requirements above and
would have otherwise previously become an Active Participant had he met the
definition of Eligible Employee. This date is his Entry Date.

 

(b)                                 An Inactive Participant shall again become
an Active Participant (resume active participation in the Plan) on the date he
again performs an Hour-of-Service as an Eligible Employee. This date is his
Reentry Date.

 

Upon again becoming an Active Participant, he shall cease to be an Inactive
Participant.

 

(c)                                A former Participant shall again become an
Active Participant (resume active participation in the Plan) on the date he
again performs an Hour-of-Service as an Eligible Employee. This date is his
Reentry Date.

 

There shall be no duplication of benefits for a Participant under this Plan
because of more than one period as an Active Participant.

 

SECTION 2.02—INACTIVE PARTICIPANT.

 

An Active Participant shall become an inactive Participant (stop accruing
benefits under the Plan) on the earlier of the following:

 

(a)           the date the Participant ceases to be an Eligible Employee, or

 

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(b)           the effective date of complete termination of the Plan under
Article VIII.

 

An Employee or former Employee who was an Inactive Participant under the Plan on
December 31, 1996, shall continue to be an Inactive Participant on January 1,
1997. Eligibility for any benefits payable to the Participant or on his behalf
and the amount of the benefits shall be determined according to the provisions
of the prior document, unless otherwise stated in this document.

 

SECTION 2.03—CESSATION OF PARTICIPATION.

 

A Participant shall cease to be a Participant on the date he is no longer an
Eligible Employee and his Account is zero.

 

SECTION 2.04—ADOPTING EMPLOYERS - SINGLE PLAN.

 

Each of the Controlled Group members listed below is an Adopting Employer. Each
Adopting Employer listed below participates with the Employer in this Plan. An
Adopting Employer’s agreement to participate in this Plan shall be in writing.

 

The Employer has the right to amend the Plan. An Adopting Employer does not have
the right to amend the Plan.

 

If the Adopting Employer did not maintain its plan before its date of adoption
specified below, its date of adoption shall be the Entry Date for any of its
Employees who have met the requirements in the ACTIVE PARTICIPANT SECTION of
Article II as of that date. Service with and Compensation from an Adopting
Employer shall be included as service with and Compensation, from the Employer.
Transfer of employment, without interruption, between an Adopting Employer and
another Adopting Employer or the Employer shall not be considered an
interruption of service. The Employer’s Fiscal Year defined in the DEFINITIONS
SECTION of Article I shall be the Fiscal Year used in interpreting this Plan for
Adopting Employers.

 

Contributions made by an Adopting Employer shall be treated as Contributions
made by the Employer. Forfeitures arising from those Contributions shall be used
for the benefit of all Participants.

 

An employer shall not be an Adopting Employer if it ceases to be a Controlled
Group member. Such an employer may continue a retirement plan for its Employees
in the form of a separate document. This Plan shall be amended to delete a
former Adopting Employer from the list below.

 

If (i) an employer ceases to be an Adopting Employer or the Plan is amended to
delete an Adopting Employer and (ii) the Adopting Employer does not continue a
retirement plan for the benefit of its Employees, partial termination may result
and the provisions of Article VIII shall apply.

 

ADOPTING EMPLOYERS

 

NAME

 

FISCAL YEAR END

 

DATE OF ADOPTION

 

 

 

 

 

Feather River State Bank

 

December 31

 

January 1, 1988

 

20

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ARTICLE III

 

CONTRIBUTIONS

 

SECTION 3.01—EMPLOYER CONTRIBUTIONS.

 

Employer Contributions shall be made without regard to current or accumulated
net income, earnings or profits of the Employer. Notwithstanding the foregoing,
the Plan shall continue to be designed to qualify as a profit sharing plan for
purposes of Code Sections 401(a), 402, 412, and 417. Such Contributions shall be
equal to the Employer Contributions as described below:

 

(a)                                  The amount of each Elective Deferral
Contribution for a Participant shall be equal to a portion of Compensation as
specified in the elective deferral agreement. An Employee who is eligible to
participate in the Plan may file an elective deferral agreement with the
Employer. The Participant shall modify or terminate the elective deferral
agreement by filing a new elective deferral agreement. The elective deferral
agreement may not be made retroactively and shall remain in effect until
modified or terminated.

 

The elective deferral agreement to start or modify Elective Deferral
Contributions shall be effective on the first day of the first pay period
following the pay period in which the Participant’s Entry Date (Reentry Date, if
applicable) or any following Quarterly Date occurs. The elective deferral
agreement must be entered into on or before the date it is effective.

 

The elective deferral agreement to stop Elective Deferral Contributions may be
entered into on any date. Such elective deferral agreement shall be effective on
the first day of the pay period following the pay period in which the elective
deferral agreement is entered into.

 

Elective Deferral Contributions cannot be less than 2% nor more than 15% of
Compensation for the pay period.

 

Elective Deferral Contributions are fully (100%) vested and nonforfeitable.

 

(b)                                 The Employer may make discretionary Matching
Contributions. The percentage of Elective Deferral Contributions matched, if
any, shall be a percentage as determined by the Employer. Elective Deferral
Contributions which are over a percentage of Compensation won’t be matched. The
percentage shall be determined by the Employer. The percentage shall not be more
than 6%.

 

Matching Contributions are calculated based on Elective Deferral Contributions
and Compensation for the pay periods ending with or within each Plan-year
Quarter. Matching Contributions shall be made for all persons who were Active
Participants at any time during the Plan-year Quarter.

 

Any percentage determined by the Employer shall apply to all eligible persons
for the entire Plan Year.

 

Matching Contributions are fully (100%) vested and nonforfeitable.

 

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(c)                                  Qualified Nonelective Contributions may be
made for each Plan Year in an amount determined by the Employer to be used to
reduce Excess Aggregate Contributions and Excess Contributions, as defined in
the EXCESS AMOUNTS SECTION of the article. If the Plan is treated as separate
plans because it is mandatorily disaggregated under the regulations of Code
Section 401(k), a separate Qualified Nonelective Contribution may be determined
for each separate plan.

 

Qualified Nonelective Contributions are 100% vested and subject to the
distribution restrictions of Code Section 401(k) when made.

 

No Participant shall be permitted to have Elective Deferral Contributions, as
defined in the EXCESS AMOUNTS SECTION of this article, made under this Plan, or
any other qualified plan maintained by the Employer, during any taxable year, in
excess of the dollar limitation contained in Code Section 402(g) in effect at
the beginning of such taxable year.

 

An elective deferral agreement (or change thereto) must be made in such manner
and in accordance with such rules as the Employer may prescribe (including by
means of voice response or other electronic system under circumstances the
Employer permits) and may not be made retroactively.

 

Employer Contributions are allocated according to the provisions of the
ALLOCATION SECTION of this article.

 

The Employer wilt make 50% of the Matching Contributions, which are to be
invested in Qualifying Employer Securities, to the Trustee in the form of
Qualifying Employer Securities.

 

A portion of the Plan assets resulting from Employer Contributions (but not more
than the original amount of those Contributions) may be returned if the Employer
Contributions are made because of a mistake of fact or are more than the amount
deductible under Code Section 404 (excluding any amount which is not deductible
because the Plan is disqualified). The amount involved must be returned to the
Employer within one year after the date the Employer Contributions are made by
mistake of fact or the date the deduction is disallowed, whichever applies.
Except as provided under this paragraph and Article VIII, the assets of the plan
shall never be used for the benefit of the Employer and are held for the
exclusive purpose of providing benefits to Participants and their Beneficiaries
and for defraying reasonable expenses of administering the Plan.

 

SECTION 3.01A—ROLLOVER CONTRIBUTIONS.

 

A Rollover Contribution may be made by an Active Participant if the following
conditions are met:

 

(a)                                  The Contribution is of amounts distributed
from a plan that satisfies the requirements of Code Section 401(a) or from a
“conduit” individual retirement account described in Code Section 408(d)(3)(A).
In the case of an Inactive Participant, the Contribution must be of an amount
distributed from another plan of the Employer, or a plan of a Controlled Group
member, that satisfies the requirements of Code Section 401(a).

 

(b)                                 The Contribution is of amounts that the Code
permits to be transferred to a plan that meets the requirements of Code Section
401(a).

 

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(c)                                  The Contribution is made in the form of a
direct rollover under Code Section 401(a)(31) or is a rollover made under 402(c)
or 408(d)(3)(A) within 60 days after the Active Participant receives the
distribution.

 

(d)                                 The Active Participant furnishes evidence
satisfactory to the Plan Administrator that the proposed rollover meets
conditions (a), (b), and (c) above.

 

A Rollover Contribution shall be allowed in cash only and must be made according
to procedures set up by the Plan Administrator.

 

Rollover Contributions made by an Active Participant shall be credited to his
Account. The part of the Participant’s Account resulting from Rollover
Contributions is fully (100%) vested and nonforfeitable at all times. A separate
accounting record shall be maintained for that part of his Rollover
Contributions consisting of voluntary contributions which were deducted from the
Participant’s gross income for Federal income tax purposes.

 

SECTION 3.02—FORFEITURES.

 

A Forfeiture shall occur as provided in the EXCESS AMOUNTS SECTION of this
article.

 

Forfeitures shall be determined at least once during each Plan Year. Forfeitures
may first be used to pay administrative expenses. Forfeitures of Matching
Contributions which relate to excess amounts as provided in the EXCESS AMOUNTS
SECTION of this article, which have not been used to pay administrative
expenses, shall be applied to reduce the earliest Employer Contributions made
after the Forfeitures are determined. Upon their application to reduce Employer
Contributions, Forfeitures shall be deemed to be Employer Contributions.

 

SECTION 3.03—ALLOCATION.

 

A person meets the allocation requirements of this section if he was an Active
Participant at any time during the Plan Year.

 

Elective Deferral Contributions shall be allocated to Participants for whom such
Contributions are made under the EMPLOYER CONTRIBUTIONS SECTION of this article.
Such Contributions shall be allocated when made and credited to the
Participant’s Account.

 

Matching Contributions shall be allocated to the persons for whom such
Contributions are made under the EMPLOYER CONTRIBUTIONS SECTION of this article.
Such Contributions shall be allocated when made and credited to the person’s
Account.

 

The discretionary Qualified Nonelective Contributions to be used to reduce
excess amounts, as described in the EMPLOYER CONTRIBUTIONS SECTION of this
article, shall be allocated as of the last day of the Plan Year only to
Nonhighly Compensated Employees who meet the allocation requirements of this
section. Such Contributions (or separate Contributions) shall be allocated first
to the eligible person under the Plan (or separate Plan) with the lowest Annual
Compensation for the Plan Year, then to the eligible person under the Plan (or
separate Plan) with the next lowest Annual Compensation, and so forth, in each
case subject to the applicable limits of the CONTRIBUTION LIMITATION SECTION of
this article. This amount shall be credited to the person’s Account.

 

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If Leased Employees are Eligible Employees, in determining the amount of
Employer Contributions allocated to a person who is a Leased Employee,
contributions provided by the leasing organization which are attributable to
services such Leased Employee performs for the Employer shall be treated as
provided by the Employer. Those contributions shall not be duplicated under this
Plan.

 

SECTION 3.04—CONTRIBUTION-LIMITATION.

 

(a)                                  Definitions. For the purpose of determining
the contribution limitation set forth in this section, the following terms are
defined.

 

Annual Additions means the sum of the following amounts credited to a
Participant’s account for the Limitation Year:

 

(1)           employer contributions;

 

(2)           employee contributions; and

 

(3)           forfeitures.

 

Annual Additions to a defined contribution plan shall also include the
following:

 

(4)                                  amounts allocated, after March 31, 1984, to
an individual medical account, as defined in Code Section 415(I)(2), which are
part of a pension or annuity plan maintained by the Employer,

 

(5)                                  amounts derived from contributions paid or
accrued after December 31, 1985, in taxable years ending after such date, which
are attributable to post-retirement medical benefits, allocated to the separate
account of a key employee, as defined in Code Section 419A(d)(3), under a
welfare benefit fund, as defined in Code Section 419(e), maintained by the
Employer; and

 

(6)           allocations under a simplified employee pension.

 

For this purpose, any Excess Amount applied under (e) and (k) below in the
Limitation Year to reduce Employer Contributions shall be considered Annual
Additions for such Limitation Year.

 

Compensation means wages within the meaning of Code Section 3401(a) and all
other payments of compensation to an Employee by the Employer (in the course of
the Employer’s trade or business) for which the Employer is required to furnish
the Employee a written statement under Code Sections 6041(d), 6051(a)(3), and
6052. Compensation must be determined without regard to any rules under Code
Section 3401(a) that limit the remuneration included in wages based on the
nature or location of the employment or the services performed (such as the
exception for agricultural labor in Code Section 3401(a)(2)). The amount
reported in the “Wages, Tips and Other Compensation” box on Form W-2 satisfies
this definition.

 

For any Self-employed Individual, Compensation shall mean Earned Income.

 

24

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For purposes of applying the limitations of this section, Compensation for a
Limitation Year is the Compensation actually paid or made available in gross
income during such Limitation Year.

 

For Limitation Years beginning after December 31, 1997, for purposes of applying
the limitations of this section, Compensation paid or made available during such
Limitation Year shall include any elective deferral (as defined in Code Section
402(g)(3)), and any amount which is contributed or deferred by the Employer at
the election of the Employee and which is not includible in the gross income of
the Employee by reason of Code Section 125, 132(f)(4), or 457.

 

Defined Benefit Plan Fraction means a fraction, the numerator of which is the
sum of the Participant’s Projected Annual Benefits under all the defined benefit
plans (whether or not terminated) maintained by the Employer, and the
denominator of which is the lesser of 125 percent of the dollar limitation
determined for the Limitation Year under Code Sections 415(b) and (d) or 140
percent of the Highest Average Compensation, including any adjustments under
Code Section 415(b).

 

Notwithstanding the above, if the Participant was a participant as of the first
day of the first Limitation Year beginning after December 31, 1986, in one or
more defined benefit plans maintained by the Employer which were in existence on
May 6, 1986, the denominator of this fraction will not be less than 125 percent
of the sum of the annual benefits under such plans which the Participant had
accrued as of the close of the last Limitation Year beginning before January 1,
1987, disregarding any changes in the terms and conditions of the plan after May
5, 1986. The preceding sentence applies only if the defined benefit plans
individually and in the aggregate satisfied the requirements of Code Section 415
for all Limitation Years beginning before January 1, 1987.

 

Defined Contribution Dollar Limitation means, for Limitation Years beginning
after December 31, 1994, $30,000, as adjusted under Code Section 415(d).

 

Defined Contribution Plan Fraction means a fraction, the numerator of which is
the sum of the Annual Additions to the Participant’s account under all the
defined contribution plans (whether or not terminated) maintained by the
Employer for the current and all prior Limitation Years (including the Annual
Additions attributable to the Participant’s nondeductible employee contributions
to all defined benefit plans, whether or not terminated, maintained by the
Employer, and the Annual Additions attributable to all welfare benefit funds,
individual medical accounts, and simplified employee pensions, maintained by the
Employer), and the denominator of which is the sum of the maximum aggregated
amounts for the current and all prior Limitation Years of service with the
Employer (regardless of whether a defined contribution plan was maintained by
the Employer). The maximum aggregate amount in any Limitation Year is the lesser
of (i) 125 percent of the dollar limitation determined under Code Sections
415(b) and (d) in effect under Code Section 415(c)(1)(A) or (iii) 35 percent of
the Participant’s Compensation for such year.

 

If the Employee was a participant as of the end of the first day of the first
Limitation Year beginning after December 31, 1986, in one or more defined
contribution plans maintained by the Employer which were in existence on May 6,
1986, the numerator of this fraction will be adjusted if the sum of this
fraction and the Defined Benefit Fraction would otherwise exceed 1.0 under the
terms of this Plan. Under the adjustment, an amount equal to the product of (i)
the excess of the sum of the fractions over 1.0 times (ii) the denominator of
this fraction, will be permanently

 

25

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subtracted from the numerator of this fraction. The adjustment is calculated
using the fractions as they would be computed as of the end of the last
Limitation Year beginning before January 1, 1987, and disregarding any changes
in the terms and conditions of the plan made after May 5, 1986, but using the
Code Section 415 limitation applicable to the first Limitation Year beginning on
or after January 1, 1987.

 

The Annual Addition for any Limitation Year beginning before January 1, 1987,
shall not be recomputed to treat all employee contributions as Annual Additions.

 

Employer means the employer that adopts this Plan, and all members of a
controlled group of corporations (as defined in Code Section 414(b) as modified
by Code Section 415(h)), all commonly controlled trades or businesses (as
defined in Code Section 415(c) as modified by Code Section 415(h)) or affiliated
service groups (ass defined in Code Section 414(m)) of which the adopting
employer is a part, and any other entity required to be aggregated with the
employer pursuant to regulations under Code Section 414(o).

 

Excess Amount means the excess of the Participant’s Annual Additions for the
Limitation Year over the Maximum Permissible Amount.

 

Highest Average Compensation means the average Compensation for the three
consecutive Years of Service (see the DEFINITIONS SECTION of Article 1) with the
Employer that produces the highest average.

 

Limitation Year means the consecutive 12-month period ending on the last day of
each Plan Year, including corresponding consecutive 12-month periods before
January 1, 1988. If the Limitation Year is other than the calendar year,
execution of this Plan (or any amendment to this Plan changing the Limitation
Year) constitutes the Employer’s adoption of a written resolution electing the
Limitation Year. If the Limitation Year is amended to a different consecutive
12-month period, the new Limitation Year must begin on a date within the
Limitation Year in which the amendment is made.

 

Maximum Permissible Amount means the maximum Annual Addition that may be
contributed or allocated to a Participant’s Account under the Plan for any
Limitation Year. This amount shall not exceed the lesser of:

 

(1)           The Defined Contribution Dollar Limitation, or

 

(2)           25 percent of the Participant’s Compensation for the Limitation
Year.

 

The compensation limitation referred to in (2) shall not apply to any
contribution for medical benefits (within the meaning of Code Section 401(h) or
419A(f)(2)) which is otherwise treated as an Annual Addition under Code Section
415(I)(1) or 419A(d)(2).

 

26

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If a short Limitation Year is created because of an amendment changing the
Limitation Year to a different consecutive 12-month period, the Maximum
Permissible Amount will not exceed the Defined Contribution Dollar Limitation
multiplied by the following fraction:

 

Number of months in the short Limitation Year

12

 

Projected Annual Benefit means the annual retirement benefit (adjusted to an
actuarially equivalent straight life annuity if such benefit is expressed in a
form other than a straight life annuity or qualified joint and survivor annuity)
to which the participant would be entitled under the terms of the plan assuming:

 

(1)           the Participant will continue employment until normal retirement
age under the plan (or current age, if later), and

 

(2)           the Participant’s Compensation for the current Limitation Year and
all other relevant factors used to determine benefits under the Plan will remain
constant for all future Limitation Years.

 

(b)                                 If the Participant does not participate in,
and has never participated in, another qualified plan maintained by the Employer
or a welfare benefit fund, as defined in Code Section 419(e), maintained by the
Employer, or an individual medical account, as defined in Code Section
415(I)(2), maintained by the Employer, or a simplified employee pension, as
defined in Code Section 408(k), maintained by the Employer, which provides an
Annual Addition, the amount of Annual Additions which may be credited to the
Participant’s Account for any Limitation Year shall not exceed the lesser of the
Maximum Permissible Amount or any other limitation contained in this Plan. If
the Employer Contribution that would otherwise be contributed or allocated to
the Participant’s Account would cause the Annual Additions for the Limitation
Year to exceed the Maximum Permissible Amount, the amount contributed or
allocated shall be reduced so that the Annual Additions for the Limitation Year
will equal the Maximum Permissible Amount.

 

(c)                                  Prior to determining the Participant’s
actual Compensation for the Limitation Year, the Employer may determine the
Maximum Permissible Amount for a Participant on the basis of a reasonable
estimation of the Participant’s Compensation for the Limitation Year, uniformly
determined for all Participants similarly situated.

 

(d)                                 As soon as is administratively feasible
after the end of the Limitation Year, the Maximum Permissible Amount for the
Limitation Year will be determined on the basis of the Participant’s actual
Compensation for the Limitation Year.

 

(e)                                  If a reasonable error in estimating a
Participant’s Compensation for the Limitation Year, a reasonable error in
determining the amount of elective, deferrals (within the meaning of Code
Section 402(g)(3)) that may be made with respect to any individual under the
limits of Code Section 415, or under other facts and circumstances allowed by
the Internal Revenue Service, there is an excess Amount, the excess will be
disposed of as follows:

 

27

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(1)                                  Any Elective Deferral Contributions that
are not the basis for Matching Contributions (plus attributable earnings), to
the extent they would reduce the Excess Amount, will be distributed to the
Participant.

 

(2)                                  If after the application of (1) above an
Excess Amount still exists, any Elective Deferral Contributions that are the
basis for Matching Contributions (plus attributable earnings), to the extent
they would reduce the Excess Amount, will be distributed to the Participant.
Concurrently with the distribution of such Elective Deferral Contributions, any
Matching Contributions which relate to any Elective Deferral Contributions
distributed in the preceding sentence, to the extent such application would
reduce the Excess Amount, will be applied as provided in (3) or (4) below:

 

(3)                                  If after the application of (2) above an
Excess Amount still exists and the Participant is covered by the Plan at the end
of the Limitation Year, the Excess Amount in the Participant’s Account will be
used to reduce Employer Contributions for such Participant in the next
Limitation Year, and each succeeding Limitation Year if necessary.

 

(4)                                  If after the application of (2) above an
Excess Amount still exists, and the Participant is not covered by the Plan at
the end of the Limitation Year, the Excess Amount will be held unallocated in a
suspense account. The suspense account will be applied to reduce future Employer
Contributions for all remaining Participants in the next Limitation Year, and
each succeeding Limitation Year if necessary.

 

(5)                                  If a suspense account is in existence at
any time during a Limitation Year pursuant to this (e), it will participate in
the allocation of investment gains or losses. If a suspense account is in
existence at any time during a particular Limitation Year, all amounts in the
suspense account must be allocated and reallocated to Participant’s Accounts
before any Employer Contributions may be made to the Plan for that Limitation
Year. Excess Amounts held in a suspense account may not be distributed to
Participants or former  Participants.

 

(f)                                    This (f) applies if, in addition to this
Plan, the Participant is covered under another qualified defined contribution
plan maintained by the Employer, a welfare benefit fund maintained by the
Employer, an individual medical account maintained by the Employer, or a
simplified employee pension maintained by the Employer which provides an Annual
Addition during any Limitation Year. The Annual Additions which may be credited
to a Participant’s Account under this Plan for any such Limitation Year will not
exceed the Maximum Permissible Amount, reduced by the Annual Additions credited
to a Participant’s account under the other qualified defined contribution plans,
welfare benefit funds, individual medical accounts, and simplified employee
pensions for the same Limitation Year. If the Annual Additions with respect to
the Participant under other qualified defined contribution plans, welfare
benefit funds, individual medical accounts, and simplified employee pensions
maintained by the Employer are less than the Maximum Permissible Amount, and the
Employer Contribution that would otherwise be contributed or allocated to the
Participant’s Account under this Plan would cause the Annual Additions for the
Limitation Year to exceed this limitation, the amount contributed or allocated
will be reduced so that the Annual Additions under all such plans and funds for
the Limitation Year will equal the Maximum Permissible Amount. If the Annual
Additions with respect to the Participant under such other qualified defined
Contribution plans, welfare benefit funds,

 

28

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individual medical accounts, and simplified employee pensions in the aggregate
are equal to or greater than the Maximum Permissible Amount, no amount will be
contributed or allocated to the Participant’s Account under this Plan for the
Limitation Year.

 

(g)                                 Prior to determining the Participant’s
actual Compensation for the Limitation Year, the Employer may determine the
Maximum Permissible Amount for a Member in the manner described in (c) above.

 

(h)                               As soon as administratively feasible after the
end of the Limitation Year, the Maximum Permissible Amount for the Limitation
Year will be determined on the basis of the Participant’s actual Compensation
for the Limitation Year.

 

(i)                                     If pursuant to (h) above or as a result
of the allocation of forfeitures or as a result of a reasonable error in
determining the amount of elective deferrals (within the meaning of Code Section
402(g)(3)) that may be made with respect to any individual under the limits of
Code Section 415, a Participant’s Annual Additions under this Plan and such
other plan would result in an Excess Amount for a Limitation Year, the Excess
Amount will be deemed to consist of the Annual Additions last allocated, except
that Annual Additions attributable to a simplified employee pension will be
deemed to have been allocated first, followed by Annual Additions to a welfare
benefit fund or individual medical account, regardless of the actual allocation
date.

 

(j)                                     If an Excess Amount was allocated to a
Participant on an allocation date of this Plan which coincides with an
allocation date of another plan, the Excess Amount attributed to this Plan will
be the product of:

 

(1)                                  the total Excess Amount allocated as of
such date, times

 

(2)                                  the ratio of (i) the Annual Addition
allocated to the Participant for the Limitation Year as of such date under this
Plan to (ii) the total Annual Additions allocated to the Participant for the
Limitation Year as of such date under this and all other qualified defined
contribution plans.

 

(k)                                  Any Excess Amount attributed to this Plan
will be disposed of in the manner described in (e) above.

 

(l)                                     If the Employer maintains, or, at any
time maintained, a qualified defined benefit plan covering any Participant in
this Plan, the sum of the Participant’s Defined Benefit Plan Fraction and
Defined Contribution Plan Fraction will not exceed 1.0 in any Limitation Year.
The Projected Annual Benefit shall be limited first. If the Participant’s annual
benefit(s) equal his Projected Annual Benefit, as limited, then Annual Additions
to the defined contribution plan(s) shall be limited to the extent needed to
reduce the sum to 1.0 in the same manner in which the Annual Additions are
limited to meet the Maximum Permissible Amount. This subparagraph shall cease to
apply effective as of the first Limitation Year beginning on or after January 1,
2000.

 

(g)                                 If the Employer maintains, or at any time
maintained, a qualified defined benefit plan covering any Participant in this
Plan, the sum of the Participant’s Defined Benefit Plan Fraction and Defined
Contribution Plan Fraction will not exceed 1.0 in any Limitation Year. The
Projected Annual Benefit shall be limited first. If the Participant’s annual
benefit(s) equal his Projected

 

29

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Annual Benefit, as limited, then Annual Additions to the defined contribution
plan(s) shall be limited to the extent needed to reduce the sum to 1.0 in the
same manner in which the Annual Additions are limited to meet the Maximum
Permissible Amount. This subparagraph shall cease to apply effective as of the
first Limitation Year beginning on or after January 1, 2000.

 

SECTION 3.05—EXCESS AMOUNTS.

 

(a)                                  Definitions. For the purposes of this
section, the following terms are defined:

 

ACP means the average (expressed as a percentage) of the Contribution
Percentages of the Eligible Participants in a group.

 

ADP means the average (expressed as a percentage) of the Deferral Percentages of
the Eligible Participants in a group.

 

Aggregate Limit means the greater of:

 

(1)                                  The sum of:

 

(i)                                     125 percent of the greater of the ADP of
the Nonhighly Compensated Employees for the prior Plan Year or the ACP of the
Nonhighly Compensated Employees under the plan subject to Code Section 401(m)
for the Plan Year beginning with or within the prior Plan Year of the cash or
deferred arrangement, and

 

(ii)                                  the lesser of 200 percent or 2 percent
plus the lesser of such ADP or ACP.

 

(2)                                  The sum of:

 

(i)                                     125 percent of the lesser of the ADP of
the Nonhighly Compensated Employees for the prior Plan Year or the ACP of the
Nonhighly Compensated Employees under the plan subject to Code Section 401 (m)
for the Plan Year beginning with or within the prior Plan Year of the cash or
deferred arrangement, and

 

(ii)                                  the lesser of 200 percent or 2 percent
plus the greater of such ADP or ACP.

 

If the Employer has elected to use the current testing method, then, in
calculating the Aggregate Limit for a particular Plan Year, the Nonhighly
Compensated Employees’ ADP and ACP for that Plan Year, instead of the prior Plan
Year, is used.

 

Contribution Percentage means the ratio (expressed as a percentage) of the
Eligible Participant’s Contribution Percentage Amounts to the Eligible
Participant’s Compensation for the Plan Year (whether or not the Eligible
Participant was an Eligible Participant for the entire Plan Year). For an
Eligible Participant for whom such Contribution Percentage Amounts for the Plan
Year are zero, the percentage is zero.

 

Contribution Percentage Amounts means the sum of the Participant Contributions
and Matching Contributions (that are not Qualified Matching Contributions taken
into account for purposes of the ADP Test) made under the Plan on behalf of the
Eligible Participant for the Plan Year. Such

 

30

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Contribution Percentage Amounts shall not include Matching Contributions that
are forfeited either to correct Excess Aggregate Contributions or because the
Contributions to which they relate are Excess Elective Deferrals, Excess
Contributions, or Excess Aggregate Contributions. Under such rules as the
Secretary of the Treasury shall prescribe, in determining the Contribution
Percentage the Employer may elect to include Qualified Nonelective Contributions
under this Plan which were not used in computing the Deferral Percentage. The
Employer may also elect to use Elective Deferral Contributions in computing the
Contribution Percentage so long as the ADP Test is met before the Elective
Deferral Contributions are used in the ACP Test and continues to be met
following the exclusion of those Elective Deferral Contributions that are used
to meet the ACP Test.

 

Deferral Percentage means the ratio (expressed as a percentage) of Elective
Deferral Contributions under this Plan on behalf of the Eligible Participant for
the Plan Year to the Eligible Participant’s Compensation for the Plan Year
(whether or not the Eligible Participant was an Eligible Participant for the
entire Plan Year). The Elective Deferral Contributions used to determine the
Deferral Percentage shall include Excess Elective Deferrals (other than Excess
Elective Deferrals of Nonhighly Compensated Employees that arise solely from
Elective Deferral Contributions made under this Plan or any other plans of the
Employer or a Controlled Group member), but shall exclude Elective Deferral
Contributions that are used in computing the Contribution Percentage (provided
the ADP Test is satisfied both with and without exclusion of these Elective
Deferral Contributions). Under such rules as the Secretary of the Treasury shall
prescribe, the Employer may elect to include Qualified Nonelective Contributions
and Qualified Matching Contributions under this Plan in computing the Deferral
Percentage. For an Eligible Participant for whom such contributions on his
behalf for the Plan Year are zero, the percentage is zero.

 

Elective Deferral Contributions means any employer contributions made to a plan
at the election of a participant, in lieu of cash compensation, and shall
include contributions made pursuant to a salary reduction agreement or other
deferral mechanism. With respect to any taxable year, a participant’s Elective
Deferral Contributions are the sum of all employer contributions made on behalf
of such participant pursuant to an election to defer under any qualified cash or
deferred arrangement described in Code Section 401(k), any salary reduction
simplified employee pension plan described in Code Section 408(k)(6), any SIMPLE
IRA plan described in Code Section 408(p), any eligible deferred compensation
plan under Code Section 457, any plan described under Code Section 501(c)(18),
and any employer contributions made on behalf of a participant for the purchase
of an annuity contract under Code Section 403(b) pursuant to a salary reduction
agreement. Elective Deferral Contributions shall not include any deferrals
properly distributed as excess annual additions.

 

Eligible Participant means, for purposes of determining the Deferral Percentage,
any Employee who is otherwise entitled to make Elective Deferral Contributions
under the terms of the Plan for the Plan Year. Eligible Participant means, for
purposes of determining the Contribution Percentage, any Employee who is
eligible (i) to make a Participant Contribution or an Elective Deferral
Contribution (if the Employer takes such contributions into account in the
calculation of the Contribution Percentage), or (ii) to receive a Matching
Contribution (including forfeitures) or a Qualified Matching Contribution. If a
Participant Contribution is required as a condition of participation in the
Plan, any Employee who would be a Participant in the Plan if such Employee made
such a contribution shall be treated as an Eligible Participant on behalf of
whom no Participant Contributions are made.

 

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Excess Aggregate Contributions means, with respect to any Plan Year, the excess
of:

 

(1)                                  The aggregate Contribution Percentage
Amounts taken into account in computing the numerator of the Contribution
Percentage actually made on behalf of Highly Compensated Employees for such Plan
Year, over

 

(2)                                  The maximum Contribution Percentage Amounts
permitted by the ACP Test (determined by hypothetically reducing contributions
made on behalf of Highly Compensated Employees in order of their Contribution
Percentages beginning with the highest of such percentages).

 

Such determination shall be made after first determining Excess Elective
Deferrals and then determining Excess Contributions.

 

Excess Contributions means, with respect to any Plan Year, the excess of:

 

(1)                                  The aggregate amount of employer
contributions actually taken into account in computing the Deferral Percentage
of Highly Compensated Employees for such Plan Year, over

 

(2)                                  The maximum Amount of such contributions
permitted by the ADP Test (determined by hypothetically reducing contributions
made on behalf of Highly Compensated Employees in the order of the Deferral
Percentages, beginning with the highest of such percentages).

 

Such determination shall be made after first determining Excess Elective
Deferrals.

 

Excess Elective Deferrals means those Elective Deferral Contributions that are
includible in a Participant’s gross income under Code Section 402(g) to the
extent such Participant’s Elective Deferral Contributions for a taxable year
exceed the dollar limitation under such Code section. Excess Elective Deferrals
shall be treated as Annual Additions, as defined in the CONTRIBUTION LIMITATION
SECTION of this article, under the Plan, unless such amounts are distributed no
later than the first April 15 following the close of the participant’s taxable
year.

 

Matching Contributions means employer contributions made to this or any other
defined contribution plan, or to a contract described in Code Section 403(b), on
behalf of a participant on account of a Participant Contribution made by such
participant, or on account of a participant’s Elective Deferral Contributions,
under a plan maintained by the Employer or a Controlled Group member.

 

Participant Contributions means contributions made to the plan by or on behalf
of a participant that are included in the participant’s gross income in the year
in which made and that are maintained under a separate account to which the
earnings and losses are allocated.

 

Qualified Matching Contributions means Matching Contributions which are subject
to the distribution and nonforfeitability requirements under Code Section 401(k)
when made.

 

Qualified Nonelective Contributions means any employer contributions (other than
Matching Contributions) which an employee may not elect to have paid to him in
cash instead of being contributed to the plan and which are subject to the
distribution and nonforfeitability requirements under Code Section 401(k) when
made.

 

32

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(b)                                 Excess Elective Deferrals. A Participant may
assign to this Plan any Excess Elective Deferrals made during a taxable year of
the Participant by notifying the Plan Administrator in writing on or before the
first following March 1 of the amount of the Excess Elective Deferrals to be
assigned to the Plan. A Participant is deemed to notify the Plan Administrator
of any Excess Elective Deferrals that arise by taking into account only those
Elective Deferral Contributions made to this Plan and any other plan of the
Employer or a Controlled Group member. The Participant’s claim for Excess
Elective Deferrals shall be accompanied by the Participant’s written statement
that if such amounts are not distributed, such Excess Elective Deferrals will
exceed the limit imposed on the Participant by Code Section 402(g) for the year
in which the deferral occurred. The Excess Elective Deferrals assigned to this
Plan cannot exceed the Elective Deferral Contributions allocated under this Plan
for such taxable year.

 

Notwithstanding any other provisions of the Plan, Elective Deferral
Contributions in an amount equal to the Excess Elective Deferrals assigned to
this Plan, plus any income and minus any loss allocable thereto, shall be
distributed no later than April 15 to any Participant to whose Account Excess
Elective Deferrals were assigned for the preceding year and who claims Excess
Elective Deferrals for such taxable year.

 

The Excess Elective Deferrals shall be adjusted for income or loss. The income
or loss allocable to such Excess Elective Deferrals shall be equal to the income
or loss allocable to the Participant’s Elective Deferral Contributions for the
taxable year in which the excess occurred multiplied by a fraction. The
numerator of the fraction is the Excess Elective Deferrals. The denominator of
the fraction is the closing balance without regard to any income or loss
occurring during such taxable year (as of the end of such taxable year) of the
Participant’s Account resulting from Elective Deferral Contributions.

 

Any Matching Contributions which were based on the Elective Deferral
Contributions which are distributed as Excess Elective Deferrals, plus any
income and minus any loss allocable thereto, shall be forfeited.

 

(c)                                  ADP Test. As of the end of each P1an Year
after Excess Elective Deferrals have been determined, the Plan must satisfy the
ADP Test. The ADP Test shall be satisfied using the prior year testing method,
unless the Employer has elected to use the current year testing method.

 

(1)                                  Prior Year Testing Method. The ADP for a
Plan Year for Eligible Participants who are Highly Compensated Employees for
each Plan Year and the prior year’s ADP for Eligible Participants who were
Nonhighly Compensated Employees for the prior Plan Year must satisfy one of the
following tests:

 

(i)                                     The ADP for a Plan Year for Eligible
Participants who are Highly Compensated Employees for the Plan Year shall not
exceed the prior year’s ADP for Eligible Participants who were Nonhighly
Compensated Employees for the prior Plan Year multiplied by 1.25; or

 

(ii)                                  The ADP for a Plan Year for Eligible
Participants who are Highly Compensated Employees for the Plan Year:

 

33

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A.                                   shall not exceed the prior year’s ADP for
Eligible Participants who were Nonhighly Compensated Employees for the prior
Plan Year multiplied by 2, and

 

B.                                     the difference between such ADPs is not
more than 2.

 

If this is not a successor plan, for the first Plan Year the Plan permits any
Participant to make Elective Deferral Contributions, for purposes of the
foregoing tests, the prior year’s Nonhighly Compensated Employees’ ADP shall be
3 percent, unless the Employer has elected to use the Plan Year’s ADP for these
Eligible Participants.

 

(2)                                  Current Year Testing Method. The ADP for a
Plan Year for Eligible Participants who are Highly Compensated Employees for
each Plan Year and the ADP for Eligible Participants who are Nonhighly
Compensated Employees for the Plan Year must satisfy one of the following tests:

 

(i)                                     The ADP for a Plan Year for Eligible
Participants who are Highly Compensated Employees for the Plan Year shall not
exceed the ADP for Eligible Participants who are Nonhighly Compensated Employees
for the Plan Year multiplied by 1.25; or

 

(ii)                                  The ADP for a Plan Year for Eligible
Participants who are Highly Compensated Employees for the Plan Year:

 

A.                                   shall not exceed the ADP for Eligible
Participants who are Nonhighly Compensated Employees for the Plan Year
multiplied by 2, and

 

B.                                     the difference between such ADP’s is not
more than 2.

 

If the Employer has elected to use the current year testing method, that
election cannot be changed unless (i) the Plan has been using the current year
testing method for the preceding five Plan Years, or if less, the number of Plan
Years the Plan has been in existence; or (ii) the Plan otherwise meets one of
the conditions specified in Internal Revenue Service Notice 98-1 (or superseding
guidance) for changing from the current year testing method.

 

A Participant is a Highly Compensated Employee for a particular Plan Year if he
meets the definition of a Highly Compensated Employee in affect for that Plan
Year. Similarly, a Participant is a Nonhighly Compensated Employee for a
particular Plan Year if he does not meet the definition of a Highly Compensated
Employee in effect for that Plan Year.

 

The Deferral Percentage for any Eligible Participant who is a Highly Compensated
Employee for the Plan Year and who is eligible to have Elective Deferral
Contributions (and Qualified Nonelective Contributions or Qualified Matching
Contributions, or both, if treated as Elective Deferral Contributions for
purposes of the ADP Test) allocated to his account under two or more
arrangements described in Code Section 401(k) that are maintained by the
Employer or a Controlled Group member shall be determined as if such Elective
Deferral Contributions (and, if applicable, such Qualified Nonelective
Contributions or Qualified Matching Contributions, or both) were made under a
single arrangement. If a Highly Compensated Employee participates in two or

 

34

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more cash or deferred arrangements that have different plan years, all cash or
deferred arrangements ending with or within the same calendar year shall be
treated as a single arrangement. The foregoing notwithstanding, certain plans
shall be treated as separate if mandatorily disaggregated under the regulations
of Code Section 401(k). If the Employer elects to apply Code Section
410(b)(4)(B) to satisfy the requirements of Code Section 410(b), the Employer
may elect to do a single ADP Test for the mandatorily disaggregated plans for
Plan Years beginning after December 31, 1998 in accordance with Code Section
401(k) and the regulations thereunder.

 

In the event this Plan satisfies the requirements of Code Section 401(k),
401(a)(4), or 410(b) only if aggregated with one or more other plans, or if one
or more other plans satisfy the requirements of such Code sections only if
aggregated with this Plan, then this section shall be applied by determining the
Deferral Percentage of Employees as if all such plans were a single plan. Any
adjustments to the Nonhighly Compensated Employee ADP for the prior year shall
be made in accordance with Internal Revenue Service Notice 98-1 (or superseding
guidance), unless the Employer has elected to use the current year testing
method. Plans may be aggregated in order to satisfy Code Section 401(k) only if
they have the same plan year and use the same testing method for the ADP Test.

 

For purposes of the ADP Test, Elective Deferral Contributions, Qualified
Nonelective Contributions, and Qualified Matching Contributions must be made
before the end of the 12-month period immediately following the Plan Year to
which the contributions relate.

 

The Employer shall maintain records sufficient to demonstrate satisfaction of
the ADP Test and the amount of Qualified Nonelective Contributions or Qualified
Matching Contributions, or both, used in such test.

 

If the Plan Administrator should determine during the Plan Year that the ADP
Test is not being met, the Plan Administrator may limit the amount of future
Elective Deferral Contributions of the Highly Compensated Employees.

 

Notwithstanding any other provisions of this Plan, Excess Contributions, plus
any income and minus any toss allocable thereto, shall be distributed no later
than the last day of each Plan Year to Participants to whose Accounts such
Excess Contributions were allocated for the preceding Plan Year. Excess
Contributions are allocated to the Highly Compensated Employees with the largest
amounts of employer contributions taken into account in calculating the ADP Test
for the year in which the excess arose, beginning with the Highly Compensated
Employee with the largest amount of such employer contributions and continuing
in descending order until all of the Excess Contributions have been allocated.
For purposes of the preceding sentence, the “largest amount” is determined after
distribution of any Excess Contributions. If such excess amounts are distributed
more than 2 1/2 months after the last day of the Plan Year in which such excess
amounts arose, a 10 percent excise tax shall be imposed on the employer
maintaining the plan with respect to such amounts.

 

Excess Contributions shall be treated as Annual Additions, as defined in the
CONTRIBUTION LIMITATION SECTION of this article.

 

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The Excess Contributions shall be adjusted for income or loss. The income or
loss allocable to such Excess Contributions allocated to each Participant shall
be equal to the income or loss allocable to the Participant’s Elective Deferral
Contributions (and, if applicable, Qualified Nonelective Contributions or
Qualified Matching Contributions, or both) for the Plan Year in which the excess
occurred multiplied by a fraction. The numerator of the fraction is the Excess
Contributions. The denominator of the fraction is the closing balance without
regard to any income or loss occurring during such Plan Year (as of the end of
such Plan Year) of the Participant’s Account resulting from Elective Deferral
Contributions (and Qualified Nonelective Contributions or Qualified Matching
Contributions, or both, if such contributions are included in the ADP Test).

 

Excess Contributions allocated to a Participant shall be distributed from the
Participant’s Account resulting from Elective Deferral Contributions. If such
Excess Contributions exceed the balance in the Participant’s Account resulting
from Elective Deferral Contributions, the balance shall be distributed from the
Participant’s Account resulting from Qualified Matching Contributions (if
applicable) and Qualified Nonelective Contributions, respectively.

 

Any Matching Contributions which were based on the Elective Deferral
Contributions which are distributed as Excess Contributions, plus any income and
minus any loss allocable thereto, shall be forfeited.

 

(d)                                 ACP Test. As of the end of each Plan Year,
the Plan must satisfy the ACP Test. The ACP Test  shall be satisfied using the
prior year testing method, unless the Employer has elected to use the current
year testing method.

 

(1)                                  Prior Year Testing Method. The ACP for a
Plan Year for Eligible Participants who are Highly Compensated Employees for
each Plan Year and the prior year’s ACP for Eligible Participants who were
Nonhighly Compensated Employees for the prior Plan Year must satisfy one of the
following tests:

 

(i)                                     The ACP for the Plan Year for Eligible
Participants who are Highly Compensated Employees for the Plan Year shall not
exceed the prior year’s ACP for Eligible Participants who were Nonhighly
Compensated Employees for the prior Plan Year multiplied by 1.25; or

 

(ii)                                  The ACP for a Plan Year for Eligible
Participants who are Highly Compensated Employees for the Plan Year:

 

A.                                   shall not exceed the prior year’s ACP for
Eligible Participants who were Nonhighly Compensated Employees for the prior
Plan Year multiplied by 2, and

 

B.                                     the difference between such ACPs is not
more than 2.

 

If this is not a successor plan, for the first Plan Year the Plan permits any
Participant to make Participant Contributions, provides for Matching
Contributions, or both, for purposes of the foregoing tests, the prior year’s
Nonhighly Compensated Employees’ ACP shall be 3 percent, unless the Employer has
elected to use the Plan Year’s ACP for these Eligible Participants.

 

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(2)                                  Current Year Testing Method. The ACP for a
Plan Year for Eligible Participants who are Highly Compensated Employees for
each Plan Year and the ACP for Eligible Participants who are Nonhighly
Compensated Employees for the Plan Year must satisfy one of the following tests:

 

(i)                                     The ACP for a Plan Year for Eligible
Participants who are Highly Compensated Employees for the Plan Year shall not
exceed the ACP for Eligible Participants who are Nonhighly Compensated Employees
for the Plan Year multiplied by, 1.25; or

 

(ii)                                  The ACP for a Plan Year for Eligible
Participants who are Highly Compensated Employees for the Plan Year:

 

A.                                   shall not exceed the ACP for Eligible
Participants who are Nonhighly Compensated Employees for the Plan Year
multiplied by 2, and

 

B.                                     the difference between such ACPs is not
more than 2.

 

If the Employer has elected to use the current year testing method, that
election cannot be changed unless (i) the Plan has been using the current year
testing method for the preceding five Plan Years, or if less, the number of Plan
Years the Plan has been in existence; or (ii) the Plan otherwise meets one of
the conditions specified in Internal Revenue Service Notice 98-1 (or superseding
guidance) for changing from the current year testing method.

 

A Participant is a Highly Compensated Employee for a particular Plan Year if he
meets the definition of a Highly Compensated Employee in effect for that Plan
Year. Similarly, a Participant is a Nonhighly Compensated Employee for a
particular Plan Year if he does not meet the definition of a Highly Compensated
Employee in effect for that Plan Year.

 

Multiple Use. If one or more Highly Compensated Employees participate in both a
cash or deferred arrangement and a plan subject to the ACP Test maintained by
the Employer or a Controlled Group member, and the sum of the ADP and ACP of
those Highly Compensated Employees subject to either or both tests exceeds the
Aggregate Limit, then the Contribution Percentage of those Highly Compensated
Employees who also participate in a cash or deferred arrangement will be reduced
in the manner described below for allocating Excess Aggregate Contributions so
that the limit is not exceeded. The amount by which each Highly Compensated
Employee’s Contribution Percentage is reduced shall be treated as an Excess
Aggregate Contribution. The ADP and ACP of the Highly Compensated Employees are
determined after any corrections required to meet the ADP Test and ACP Test and
are deemed to be the maximum permitted under such tests for the Plan Year.
Multiple use does not occur if either the  ADP or ACP of the Highly Compensated
Employees does not exceed 1.25 multiplied by the ADP and ACP, respectively, of
the Nonhighly Compensated Employees.

 

The Contribution Percentage for any Eligible Participant who is a Highly
Compensated Employee for the Plan Year and who is eligible to have Contribution
Percentage Amounts allocated to his account under two or more plans described in
Code Section 401(a) or arrangements described in Code Section 401(k) that are
maintained by the Employer or a Controlled Group member shall be determined as
if the total of such Contribution Percentage Amounts was made under each plan.

 

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If a Highly Compensated Employee participates in two or more cash or deferred
arrangements that have different plan years, all cash or deferred arrangements
ending with or within the same calendar year shall be treated as a single
arrangement. The foregoing notwithstanding, certain plans shall be treated as
separate if mandatorily disaggregated under the regulations of Code Section 401
(m). If the Employer elects to apply Code Section 410(b)(4)(B) to satisfy
the                requirements of Code Section 410(b), the Employer may elect
to do a single ACP Test for the mandatorily disaggregated plans for Plan Years
beginning after December 31, 1998 in accordance with Code Section 401(m) and the
regulations thereunder.

 

In the event this Plan satisfies the requirements of Code Section 401(m),
401(a)(4), or 410(b) only if aggregated with one or more other plans, or if one
or more other plans satisfy the requirements of such Code sections only if
aggregated with this Plan, then this section shall be applied by determining the
Contribution Percentage of Employees as if all such plans were a single plan.
Any adjustments to the Nonhighly Compensated Employee ACP for the prior year
shall be made in accordance with Internal Revenue Service Notice 98-1 (or
superseding guidance), unless the Employer has elected to use the current year
testing method. Plans may be aggregated in order to satisfy Code Section 401(m)
only if they have the same plan year and use the same testing method for the ACP
Test.

 

For purposes of the ACP Test, Participant Contributions are considered to have
been made in the Plan Year in which contributed to the Plan. Matching
Contributions and Qualified Nonelective Contributions will be considered to have
been made for a Plan Year if made no later than the end of the 12-month period
beginning on the day after the close of the Plan Year.

 

The Employer shall maintain records sufficient to demonstrate satisfaction of
the ACP Test and the amount of Qualified Nonelective Contributions or Qualified
Matching Contributions, or both, used in such test.

 

Notwithstanding any other provisions of this Plan, Excess Aggregate
Contributions, plus any income and minus any loss allocable thereto, shall be
forfeited, if not vested, or distributed, if vested, no later than the last day
of each Plan Year to Participants to whose Accounts such Excess Aggregate
Contributions were allocated for the preceding Plan Year. Excess Aggregate
Contributions are allocated to the Highly Compensated Employees with the largest
Contribution Percentage Amounts taken into account in calculating the ACP Test
for the year in which the excess arose, beginning with the Highly Compensated
Employee with the largest amount of such Contribution Percentage Amounts and
continuing in descending order until all of the Excess Aggregate Contributions
have been allocated. For purposes of the preceding sentence, the “largest
amount” is determined after distribution of any Excess Aggregate Contributions.
If such Excess Aggregate Contributions are distributed more than 2 1/2 months
after the last day of the Plan Year in which such excess amounts arose, a 10
percent excise tax shall be imposed on the employer maintaining the plan with
respect to such amounts.

 

Excess Aggregate Contributions shall be treated as Annual Additions, as defined
in the CONTRIBUTION LIMITATION SECTION of this article.

 

The Excess Aggregate Contributions shall be adjusted for income or loss. The
income or loss allocable to such Excess Aggregate Contributions allocated to
each Participant shall be equal to the income or loss allocable to the
Participant’s Contribution Percentage Amounts for the Plan

 

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Year in which the excess occurred multiplied by a fraction. The numerator of the
fraction is the Excess Aggregate Contributions. The denominator of the fraction
is the closing balance without regard to any income or loss occurring during
such Plan Year (as of the end of such Plan Year) of the Participant’s Account
resulting from Contribution Percentage Amounts.

 

Excess Aggregate Contributions allocated to a Participant shall be distributed
from the Participant’s Account resulting from Participant Contributions that are
not required as a condition of employment or participation or for obtaining
additional benefits from Employer Contributions. If such Excess Aggregate
Contributions exceed the balance in the Participant’s Account resulting from
such Participant’s Contributions, the balance shall be forfeited, if not vested,
or distributed, if vested, on a pro-rata basis from the Participant’s Account
resulting from Contribution Percentage Amounts.

 

(e)                                  Employer Elections. The Employer has not
made an election to use the current year testing method.

 

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ARTICLE IV

 

INVESTMENT OF CONTRIBUTIONS

 

SECTION 4.01—INVESTMENT AND TIMING OF CONTRIBUTIONS.

 

The handling of Contributions is governed by the provisions of the Trust
Agreement, the Annuity Contract and any other funding arrangement in which the
Plan Fund is or may be held or invested. To the extent permitted by the Trust
Agreement, Annuity Contract, of other funding arrangement, the parties named
below shall direct the Contributions to the guaranteed benefit policy portion of
the Annuity Contract, any of the investment options available under the Annuity
Contract, or any of the investment vehicles available under the Trust Agreement
and may request the transfer of amounts resulting from those Contributions
between such investment options and investment vehicles or the transfer of
amounts between the guaranteed benefit policy portion of the Annuity Contract
and such investment options and investment vehicles. A Participant may not
direct the Trustee or Insurer to invest the Participant’s Account in
collectibles. Collectibles mean any work of art, rug or antique, metal or gem,
stamp or coin, alcoholic beverage, or other tangible personal property specified
by the Secretary of the Treasury. However, for tax years beginning after
December 31, 1997, certain coins and bullion as provided in Code Section
408(m)(3) shall not be considered collectibles. To the extent that a Participant
who has investment direction fails to give timely direction, the Primary
Employer shall direct the investment of his Account. If the Primary Employer has
investment direction, such Account shall be invested ratably in the guaranteed
benefit policy portion of the Annuity Contract, the investment options available
under the Annuity Contract, or the investment vehicles available under the Trust
Agreement in the same manner as the Accounts of all other Participants who do
not direct their investments. The Primary Employer shall have investment
direction for amounts which have not been allocated to Participants. To the
extent an investment is no longer available, the Primary Employer may require
that amounts currently held in such investment be reinvested in other
investments.

 

At least annually, the Named Fiduciary shall review all pertinent Employee
information and Plan data in order to establish the funding policy of the Plan
and to determine appropriate methods of carrying out the Plan’s objectives.  The
Named Fiduciary shall inform the Trustee and any Investment Manager of the
Plan’s short-term and long-term financial needs so the investment policy can be
coordinated with the Plan’s financial requirements.

 

(a)           Elective Deferral Contributions:  The participant shall direct the
investment of Elective Deferral Contributions and transfer of amounts resulting
from those Contributions.

 

(b)           Matching Contributions which are made in the form of Qualifying
Employer Securities:  The Primary Employer shall direct the investment of such
Matching Contributions and transfer of amounts resulting from those
Contributions.

 

(c)           Employer Contributions other than Elective Deferral Contributions
and Matching Contributions made in the form of Qualifying Employer Securities: 
The Participant shall direct the investment of such Employer Contributions and
transfer of amounts resulting from those Contributions.

 

(d)           Rollover Contributions:  The Participant shall direct the
investment of Rollover Contributions and transfer of amounts resulting, from
those Contributions.

 

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However, the Named Fiduciary may delegate to the Investment Manager investment
discretion for Contributions and amounts which are not subject to Participant
direction.

 

The Employer shall pay to the Insurer or Trustee, as applicable, the Elective
Deferral Contributions and Qualified Nonelective Contributions for each Plan
Year not later than the end of the 12-month period immediately following the
Plan Year for which they are deemed to be paid.

 

All Contributions are forwarded by the Employer to the Trustee to be deposited
in the Trust Fund or to the Insurer to be deposited under the Annuity Contract,
as applicable. Contributions that are accumulated through payroll deduction
shall be paid to the Trustee or Insurer, as applicable, by the earlier of (i)
the date the Contributions can reasonably be segregated from the Employer’s
assets, or (ii) the 15th business day of the month following the month in which
the Contributions would otherwise have been paid in cash to the Participant.

 

SECTION 4.01 A—INVESTMENT IN QUALIFYING EMPLOYER SECURITIES.

 

One half of the Participant’s Account resulting from the following Contributions
will be invested in Qualifying Employer Securities:

 

Matching Contributions

 

For purposes of determining the annual valuation of the Plan, and for reporting
to Participants and regulatory authorities, the assets of the Plan shall be
valued at least annually on the Valuation Date which corresponds to the last day
of the Plan Year. The fair market value of Qualifying Employer Securities shall
be determined on such Valuation Date. The prices of Qualifying Employer
Securities as of the date of the transaction shall apply for purposes of valuing
distributions and other transactions of the Plan to the extent such value is
representative of the fair market value of such securities in the opinion of the
Plan Administrator. The value of a Participant’s Account held in the Qualifying
Employer Securities Fund may be expressed in units.

 

If the Qualifying Employer Securities are not publicly traded, or if an
extremely thin market exists for such securities so that reasonable valuation
may not be obtained from the market place, then such securities must be valued
at least annually by an independent appraiser who is not associated with the
Employer, the Plan Administrator, the Trustee, or any person related to any
fiduciary under the Plan. The independent appraiser may be associated with a
person who is merely a contract administrator with respect to the Plan, but who
exercises no discretionary authority and is not a plan fiduciary.

 

If there is a public market for Qualifying Employer Securities of the type held
by the Plan, then the Plan Administrator may use as the value of the securities
the price at which such securities trade in such market. If the Qualifying
Employer Securities do not trade on the relevant date, or if the market is very
thin on such date, then the Plan Administrator may use for the valuation the
next preceding trading day on which the trading prices are representative of the
fair market value of such securities in the opinion of the Plan Administrator.

 

Cash dividends payable on the Qualifying Employer Securities shall be reinvested
in additional shares of such securities. In the event of any cash or stock
dividend or any stock split, such dividend or split shall be credited to the
Accounts based on the number of shares of Qualifying Employer Securities
credited to each Account as of the payable date of such dividend or split.

 

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All purchases of Qualifying Employer Securities shall be made at a price, or
prices, which, in the judgement of the Plan Administrator, do not exceed the
fair market value of such securities.

 

In the event that the Trustee acquires Qualifying Employer Securities by
purchase from a “disqualified person” as defined in Code Section 4975(e)(2) or
from a “party-in-interest” as defined in ERISA Section 3(14), the terms of such
purchase shall contain the provision that in the event there is a final
determination by the Internal Revenue Service, the Department of Labor, or court
of competent jurisdiction that the fair market value of such securities as of
the date of purchase was less than the purchase price paid by the Trustee, then
the seller shall pay or transfer, as the case may be, to the Trustee an amount
of cash or shares of Qualifying Employer Securities equal in value to the
difference between the purchase price and such fair market value for all such
shares. In the event that cash or shares of Qualifying Employer Securities are
paid or transferred to the Trustee under this provision, such securities shall
be valued at their fair market value as of the date of such purchase, and
interest at a reasonable rate from the date of purchase to the date of payment
or transfer shall be paid by the seller on the amount of cash paid.

 

The Plan Administrator may direct the Trustee to sell, resell, or otherwise
dispose of Qualifying Employer Securities to any person, including the Employer,
provided that any such sales to any disqualified person or party-in-interest
including the Employer, will be made at not less than the fair market value and
no commission will be charged. Any such sale shall be made in conformance with
ERISA Section 408(e).

 

The Employer is responsible for compliance with any applicable Federal or state
securities law with respect to all aspects of the Plan. If the Qualifying
Employer Securities or interest in this Plan are required to be registered in
order to permit investment in the Qualifying Employer Securities Fund as
provided in this section, then such investment will not be effective until the
later of the effective date of the plan or the date such registration or
qualification is effective. The Employer, at its own expense, will take or cause
to be taken any and all such actions as may be necessary or appropriate to
affect such registration or qualification. Further, if the Trustee is directed
to dispose of any Qualifying Employer Securities held under the Plan under
circumstances which require registration or qualification of the securities
under applicable Federal or state securities laws, then the Employer will, at
its own expense, take or cause to be taken any and all such action as may be
necessary or appropriate to effect such registration or qualification. The
Employer is responsible for all compliance requirements under Section 16 of the
Securities Act.

 

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ARTICLE V

 

BENEFITS

 

SECTION 5.01—RETIREMENT BENEFITS.

 

On a Participant’s Retirement Date, his Vested Account shall be distributed to
him according to the distribution of benefits provisions of Article VI and the
provisions of the SMALL AMOUNTS SECTION of Article X.

 

SECTION 5.02—DEATH BENEFITS.

 

If a Participant dies before his Annuity Starting Date, his Vested Account shall
be distributed according to the distribution of benefits provisions of Article
VI and the provisions of the SMALL AMOUNTS SECTION Article X.

 

SECTION 5.03—VESTED BENEFITS.

 

If an Inactive Participant’s Vested Account is not payable under the SMALL
AMOUNTS SECTION of Article X, he may elect, but is not required, to receive a
distribution of his Vested Account after he ceases to be an Employee. A
distribution under this paragraph shall be a retirement benefit and shall be
distributed to the Participant according to the distribution of benefits
provisions of Article VI.

 

A Participant may not elect to receive a distribution under the provisions of
this section after he again becomes an Employee until he subsequently ceases to
be an Employee and meets the requirements of this section.

 

If an Inactive Participant does not receive an earlier distribution, upon his
Retirement Date or death, his Vested Account shall be distributed according to
the provisions of the RETIREMENT BENEFITS SECTION or the DEATH BENEFITS SECTION
of Article V.

 

SECTION 5.04—WHEN BENEFITS START.

 

(a)           Unless otherwise elected, benefits shall begin before the 60th day
following the close of the Plan Year in which the latest date below occurs:

 

(1)           The date the Participant attains age 65 (or Normal Retirement Age,
if earlier).

 

(2)           The 10th anniversary of the Participant’s Entry Date.

 

(3)           The date the Participant ceases to be an Employee.

 

Notwithstanding the foregoing, the failure of a Participant to consent to a
distribution while a benefit is immediately distributable, within the meaning of
the ELECTION PROCEDURES SECTION of Article VI, shall be deemed to be an election
to defer the start of benefits sufficient to satisfy this section.

 

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The Participant may elect to have his benefits begin after the latest date for
beginning benefits described above, subject to the following provisions of this
section. The Participant shall make the election in writing. Such election must
be made before his Normal Retirement Date or the date he ceases to be an
Employee, if later. The election must describe the form of distribution and the
date benefits will begin. The Participant shall not elect a date for beginning
benefits or a form of distribution that would result in a benefit payable when
he dies which would be more than incidental within the meaning of governmental
regulations.

 

Benefits shall begin on an earlier date if otherwise provided in the Plan. For
example, the Participant’s Retirement Date or Required Beginning Date, as
defined in the DEFINITIONS SECTION of Article VII.

 

(b)           The Participant’s Vested Account which results from Elective
Deferral Contributions and Qualified Nonelective Contributions may not be
distributed to a Participant or to his Beneficiary (or Beneficiaries) in
accordance with the Participant’s or Beneficiary’s (or Beneficiaries’) election,
earlier than separation from service, death, or disability. Such amount may also
be distributed upon:

 

(1)           Termination of the Plan, as permitted in Article VIII.

 

(2)           The disposition by the Employer, if the Employer is a corporation,
to an unrelated corporation of substantially all of the assets, within the
meaning of Code Section 409(d)(2), used in a trade or business of the Employer
if the Employer continues to maintain, the Plan after the disposition, but only
with respect to Employees who continue employment with the corporation acquiring
such assets.

 

(3)           The disposition by the Employer, if the Employer is a corporation,
to an unrelated entity of the Employer’s interest in a subsidiary, within the
meaning of Code Section 409(d)(3), if the Employer continues to maintain the
Plan, but only with respect to Employees who continue employment with such
subsidiary.

 

(4)           The hardship of the Participant as permitted in the WITHDRAWAL
BENEFITS SECTION of this article.

 

All distributions that may be made pursuant to one or more of the foregoing
distributable events will be a retirement benefit and shall be distributed to
the Participant according .to the distribution of benefit provisions of Article
VI. In addition, distributions that are triggered by (1), (2) and (3) above must
be made in a lump sum.

 

SECTION 5.05—WITHDRAWAL BENEFITS.

 

A Participant may withdraw any part of his Vested Account resulting from
Rollover Contributions. A Participant may make only two such withdrawals in any
12-month period.

 

A Participant may withdraw any part of his Vested Account which results from the
following

Contributions

 

Elective Deferral Contributions

 

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in the event of hardship due to an immediate and heavy financial need. 
Withdrawals from the Participant’s Account resulting from Elective Deferral
Contributions shall be limited to the amount of the Participant’s Elective
Deferral Contributions plus income allocable thereto credited to his Account as
of December 31, 1988. Immediate and heavy financial need shall be limited to: 
(i) expenses incurred or necessary for medical care, described in Code Section
213(d), of the Participant, the Participant’s spouse, or any dependents of the
Participant (as defined in Code Section 152); (ii) purchase (excluding mortgage
payments) of a principal residence for the Participant; (iii) payment of
tuition, related educational fees, and room and board expenses, for the next 12
months of post-secondary education for the Participant, his spouse, children, or
dependents; (iv) the need to prevent the eviction of the Participant from his
principal residence or foreclosure on the mortgage of the Participant’s
principal residence; or (v) any other distribution which is deemed by the
Commissioner of Internal Revenue to be made on account of immediate and heavy
financial need as provided in Treasury regulations.

 

No withdrawal shall be allowed which is not necessary to satisfy such immediate
and heavy financial need. Such withdrawal shall be deemed necessary only if all
of the following requirements are met: (i) the distribution is not in excess of
the amount of the immediate and heavy financial need (including amounts
necessary to pay any Federal, state, or local income taxes or penalties
reasonably anticipated to result from the distribution); (iii) the Participant
has obtained all distributions, other than hardship distributions, and all
nontaxable loans currently available under all plans maintained by the Employer;
(iii) the Plan, and all other plans maintained by the Employer, provide that the
Participant’s elective contributions and participant contributions will be
suspended for at least 12 months after receipt of the hardship distribution; and
(iv) the Plan, and all other plans maintained by the Employer, provide that the
Participant may not make elective contributions for the Participant’s taxable
year immediately following the taxable year of the hardship distribution in
excess of the applicable limit under Code Section 402(g) for such next taxable
year less the amount of such Participant’s elective contributions for the
taxable year of the hardship distribution. The Plan will suspend elective
contributions and participant contributions for 12 months and limit elective
deferrals as provided in the preceding sentence. A Participant shall not cease
to be an Eligible Participant, as defined in the EXCESS AMOUNTS SECTION of
Article III, merely because his elective contributions or participant
contributions are suspended.

 

A request for withdrawal shall be made in such manner and in accordance with
such rules as the Employer will prescribe for this purpose (including by means
of voice response or other electronic means under circumstances the Employer
permits). Withdrawals shall be a retirement benefit and shall be distributed to
the Participant according to the distribution of benefits provisions of Article
VI.A forfeiture shall not occur solely as a result of a withdrawal.

 

SECTION 5.06—LOANS TO PARTICIPANTS.

 

Loans shall be made available to all Participants on a reasonably equivalent
basis. For purposes of this section, and unless otherwise specified, Participant
means any Participant or Beneficiary who is a party-in-interest as defined in
ERISA. Loans shall not be made to Highly Compensated Employees in an amount
greater than the amount made available to other Participants.

 

No loans will be made to any shareholder-employee or Owner-employee. For
purposes of this requirement, a shareholder-employee means an employee or
officer of an electing small business (Subchapter S) corporation who owns (or is
considered as owning within the meaning of Code Section 318(a)(1)), on any day
during the taxable year of such corporation, more than 5 percent of this
outstanding stock of the corporation.

 

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A loan to a Participant shall be a Participant-directed investment of his
Account. The portion of the Participant’s Account held in the Qualifying
Employer Securities Fund may be redeemed for purposes of a loan only after the
amount held in other investment options has been depleted. The loan is a Trust
Fund investment but no Account other than the borrowing Participant’s Account
shall share in the interest paid on the loan or bear any expense or loss
incurred because of the loan.

 

The number of outstanding loans shall be limited to one. No more than one loan
shall be approved for any Participant in any 12-month period. The minimum amount
of any loan shall be $1,000.

 

Loans must be adequately secured and bear a reasonable rate of interest.

 

The amount of the loan shall not exceed the maximum amount that may be treated
as a loan under Code Section 72(p) (rather than a distribution) to the
Participant and shall be equal to the lesser of (a) or (b) below:

 

(a)           $50,000, reduced by the highest outstanding loan balance of loans
during the one-year period ending on the day before the new loan is made.

 

(b)           The greater of (1) or (2), reduced by (3) below:

 

(1)           One-half of the Participant’s Vested Account.

 

(2)           $10,000.

 

(3)           Any outstanding loan balance on the date the new loan is made.

 

For purposes of this maximum, a Participant’s Vested Account does not include
any accumulated deductible employee contributions, as defined in Code Section
72(o)(5)(B), and all qualified employer plans, as defined in Code Section
72(p)(4), of the Employer and any Controlled Group member shall be treated as
one plan.

 

The foregoing notwithstanding, the amount of such loan shall not exceed 50
percent of the amount of the Participant’s Vested Account. For purposes of this
maximum, a Participant’s Vested Account does not include any accumulated
deductible employee contributions, as defined in Code Section 72(o)(5)(B). No
collateral other than a portion of the Participant’s Vested Account (as limited
above) shall be accepted. The Loan Administrator shall determine if the
collateral is adequate for the amount of the loan requested.

 

Each loan shall bear a reasonable fixed rate of interest to be determined by the
Loan Administrator. In determining the interest rate, the Loan Administrator
shall take into consideration fixed interest rates currently being charged by
commercial lenders for loans of comparable risk on similar terms and for similar
durations, so that the interest will provide for a return commensurate with
rates currently charged by commercial lenders for loans made under similar
circumstances. The Loan Administrator shall not discriminate among Participants
in the matter of interest rates: but loans granted at different times may bear
different interest rates in accordance with the current appropriate standards.

 

The loan shall by its terms require that repayment (principal and interest) be
amortized in level payments, not less frequently than quarterly, over a period
not extending beyond five years from the date of the loan. If the loan is used
to acquire a dwelling unit, which within a reasonable time (determined at the
time the loan is made) will be used as the principal residence of the
Participant, the repayment period may extend beyond five years from the date of
the loan. The period of repayment for any loan shall be arrived at

 

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by mutual agreement between the Loan Administrator and the Participant and if
the loan is for a principal residence, shall not be made for a period longer
than the repayment period consistent with commercial practices.

 

The Participant shall make an application for a loan in such manner and in
accordance with such rules as the Employer shall prescribe for this purpose
(including by means of voice response or other electronic means under
circumstances the Employer permits). The application must specify the amount and
duration requested.

 

Information contained in the application for the loan concerning the income,
liabilities, and assets of the Participant will be evaluated to determine
whether there is a reasonable expectation that the Participant will be able to
satisfy payments on the loan as due. Additionally, the Loan Administrator will
pursue any appropriate further investigations concerning the creditworthiness
and credit history of the Participant to determine whether a loan should be
approved.

 

Each loan shall be fully documented in the form of a promissory note signed by
the Participant for the face amount of the loan, together with interest
determined as specified above.

 

There will be an assignment of collateral to the Plan executed at the time the
loan is made.

 

In those cases where repayment through payroll deduction is available,
installments are so payable, and a payroll deduction agreement shall be executed
by the Participant at the time the loan is made. Loan repayments that are
accumulated through payroll deduction shall be paid to the Trustee by the
earlier of (i) the date the loan repayments can reasonably be segregated from
the Employer’s assets, or (ii) the 15th business day of the month following the
month in which such amounts would otherwise have been paid in cash to the
Participant.

 

Where payroll deduction is not available, payments in cash are to be timely
made. Any payment that is not by payroll deduction shall be made payable to the
Employer or the Trustee, as specified in the promissory note, and delivered to
the Loan Administrator, including prepayments, service fees and penalties, if
any, and other amounts due under the note. The Loan Administrator shall deposit
such amounts into the Plan as soon as administratively practicable after they
are received, but in no event later than the 15th business day of the month
after they are received.

 

The promissory note may provide for reasonable late payment penalties and
service fees. Any penalties or service fees shall be applied to all Participants
in a nondiscriminatory manner. If the promissory note so provides, such amounts
may be assessed and collected from the Account of the Participant as part of the
loan balance.

 

Each loan may be paid prior to maturity, in part or in full, without penalty or
service fee, except as may be set out in the promissory note.

 

The Plan shall suspend loan payments for a period not exceeding one year during
which an approved unpaid leave of absence occurs other then a military leave of
absence. The Loan Administrator shall provide the Participant a written
explanation of the effect of the suspension of payments upon his loan.

 

If a Participant separates from service (or takes a leave of absence) from the
Employer because of service in the military and does not receive a distribution
of his Vested Account, the Plan shall suspend loan payments until the
Participant’s completion of military service of until the Participant’s fifth
anniversary of

 

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commencement of military service, if earlier, as permitted under Code Section
414(u). The Loan Administrator shall provide the Participant a written
explanation of the effect of his military service upon his loan.

 

If any payment of principal and interest, or any portion thereof, remains unpaid
for more than 90 days after due, the loan shall be in default. For purposes of
Code Section 72(p), the Participant shall then be treated as having received a
deemed distribution regardless of whether or not a distributable event has
occurred.

 

Upon default, the Plan has the right to pursue any remedy available by law to
satisfy the amount due, along with accrued interest, including the right to
enforce its claim against the security pledged and execute upon the collateral
as allowed by law.

 

The entire principal balance whether or not otherwise then due, along with
accrued interest, shall become immediately due and payable without demand or
notice, and subject to collection or satisfaction by any lawful means, including
specifically, but not limited to, the right to enforce the claim against the
security pledged and to execute upon the collateral as allowed by law.

 

In the event of default, foreclosure on the note and attachment of security or
use of amounts pledged to satisfy the amount then due shall not occur until a
distributable event occurs in accordance with the Plan, and shall not occur to
an extent greater than the amount then available upon any distributable event
which has occurred under the Plan.

 

All reasonable costs and expenses, including but not limited to attorney’s fees,
incurred by the Plan in connection with any default or in any proceeding to
enforce any provision of a promissory note or instrument by which a promissory
note for a Participant loan is secured, shall be assessed and collected from the
Account of the Participant as part of the loan balance.

 

If payroll deduction is being utilized, in the event that a Participant’s
available payroll deduction amounts in any given month are insufficient to
satisfy the total amount due, there will be an increase in the amount taken
subsequently, sufficient to make up the amount that is then due. If any amount
remains past due more than 90 days, the entire principal amount, whether or not,
otherwise then due, along with interest then accrued and any other amount then
due under the promissory note, shall become due and payable, as above.

 

If no distributable event has occurred under the Plan at the time that the
Participant’s Vested Account would otherwise be used under this provision to pay
any amount due under the outstanding loan, this will not occur until the time,
or in excess of the extent to which, a distributable event occurs under the
Plan. An outstanding loan will become due and payable in full 60 days after a
Participant ceases to be an Employee and a party-in-interest as defined in ERISA
or after complete termination of the Plan.

 

SECTION 5.07—DISTRIBUTIONS UNDER QUALIFIED DOMESTIC RELATIONS ORDERS.

 

The Plan specifically permits distributions to an Alternate Payee under a
qualified domestic relations order as defined in Code Section 414(p), at any
time, irrespective of whether the Participant has attained his earliest
retirement age, as defined in Code Section 414(p), under the Plan. A
distribution to an Alternate Payee before the Participant has attained his
earliest retirement age is available only if the order specifies that
distribution shall be made prior to the earliest retirement age or allows the
Alternate Payee to elect a distribution prior to the earliest retirement age.

 

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Nothing in this section shall permit a Participant to receive a distribution at
a time otherwise not permitted under the Plan nor shall it permit the Alternate
Payee to receive a form of payment not permitted under the Plan.

 

The benefit payable to an Alternate Payee shall be subject to the provisions of
the SMALL AMOUNTS SECTION of Article X if the value of the benefit does not
exceed $5,000 ($3,500 for Plan Years beginning before August 6, 1997).

 

The Plan Administrator shall establish reasonable procedures to determine the
qualified status of a domestic relations order. Upon receiving a domestic
relations order, the Plan Administrator shall promptly notify the Participant
and the Alternate Payee named in the order, in writing, of the receipt of the
order and the Plan’s procedures for determining the qualified status of the
order. Within a reasonable period of time after receiving the domestic relations
order, the Plan Administrator shall determine the qualified status of the order
and shall notify the Participant and each Alternate Payee, in writing, of its
determination. The Plan Administrator shall provide notice under this paragraph
by mailing to the individual’s address specified in the domestic relations
order, or in a manner consistent with Department of Labor regulations. The Plan
Administrator may treat as qualified any domestic relations order entered into
before January 1, 1985, irrespective of whether it satisfies all the
requirements described in Code Section 414(p).

 

If any portion of the Participant’s Vested Account is payable during the period
the Plan Administrator is making its determination of the qualified status of
the domestic relations order, a separate accounting shall be made of the amount
payable. If the Plan Administrator determines the order is a qualified domestic
relations order within 18 months of the date amounts are first payable following
receipt of the order, the payable amounts shall be distributed in accordance
with the order. If the Plan Administrator does: not make its determination of
the qualified status of the order within the 18-month determination period, the
payable amounts shall be distributed in the manner the Plan would distribute if
the order did not exist and the order shall apply prospectively if the Plan
Administrator later determines the order is a qualified domestic relations
order.

 

The Plan shall make payments or distributions required under this section by
separate benefit checks or other separate distribution to the Alternate
Payee(s).

 

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ARTICLE VI

 

DISTRIBUTION OF BENEFITS

 

SECTION 6.01—FORM OF DISTRIBUTION.

 

(a)           Retirement Benefits.  The only form of retirement benefit is a
single sum payment.

 

(b)           Death Benefits.  The only form of death benefit is a single sum
payment.

 

SECTION 6.02—ELECTION PROCEDURES.

 

The Participant shall make any election under this section in writing. The Plan
Administrator may require such individual to complete and sign any necessary
documents as to the provisions to be made. Any election               permitted
under (a) below shall be subject to the qualified election provisions of (b)
below.

 

(a)           Death Benefits.  A Participant may elect his Beneficiary.

 

(b)           Qualified Election.  The Participant may make an election at any
time during the election period. The Participant may revoke the election made
(or make a new election) at any time and any number of times during the election
period. An election is effective only if it meets the consent requirements
below.

 

(1)           Election Period for Death Benefits.  A Participant may make an
election as to death benefits at any time before he dies.

 

(2)           Consent to Election.  If the Participant’s Vested Account exceeds
$5,000 ($3,500 for Plan Years beginning before August 6, 1997), any benefit
which is immediately distributable requires the consent of the Participant. Such
consent shall also be required if the Participant’s Vested Account at the time
of any prior distribution exceeded $5,000 ($3,500for Plan Years beginning before
August 6, 1997). However, for distributions made after March 21, 1999, such
consent shall only be required if the Participant’s Vested Account exceeds
$5,000.

 

The consent of the Participant to a benefit which is immediately distributable
must not be made before the date the Participant is provided with the notice of
the ability to defer the distribution. Such consent shall be made in writing.

 

The consent shall not be made more then 90 days before the Annuity Starting
Date. The consent of the Participant Shall not be required to the extent that a
distribution is required to satisfy Code Section 401(a)(9) or Code Section 415.

 

In addition, upon termination of this Plan, if the Plan does not offer an
annuity option (purchased from a commercial provider), and if the Employer (or
any entity within the same Controlled Group) does not maintain another defined
contribution plan (other than an employee stock ownership plan as defined in
Code Section 4975(e)(7)), the Participant’s’ Account balance will, without the
Participant’s consent, be distributed to the Participant.

 

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However, if any entity within the same Controlled Group maintains another
defined contribution plan (other than an employee stock ownership plan as
defined in Code Section 4975(e)(7)) then the Participant’s Account will be
transferred, without the Participant’s consent, to the other plan if the
Participant does not consent to an immediate distribution.

 

A benefit is immediately distributable if any part of the benefit could be
distributed to the Participant before the Participant attains the older of
Normal Retirement Age or age 62.

 

Spousal consent is needed to name a Beneficiary other then the Participant’s
spouse. If a Participant names a Beneficiary other than his spouse, the spouse
has the right to limit consent only to a specific Beneficiary. The spouse can
relinquish such right. Such consent shall be in writing. The spouse’s consent
shall be witnessed by a plan representative or notary public. The spouse’s
consent must acknowledge the effect of the election, including that the spouse
had the right to limit consent only to a specific Beneficiary and that the
relinquishment of such right was voluntary. Unless the consent of the spouse
expressly permits designations by the Participant without a requirement of
further consent by the spouse, the spouse’s consent must be limited to the
Beneficiary, class of Beneficiaries, or contingent Beneficiary named in the
election.

 

Spousal consent is not required, however, if the Participant establishes to the
satisfaction of the plan representative that the consent of the spouse cannot be
obtained because there is no spouse or the spouse cannot be located. A spouse’s
consent under this paragraph shall not be valid with respect to any other
spouse. A Participant may revoke a prior election without the consent of the
spouse. Any new election will require a new spousal consent, unless the consent
of the spouse expressly permits such election by the Participant without further
consent by the spouse. A spouse’s consent may be revoked at any time within the
Participant’s election period.

 

SECTION 6.03—NOTICE REQUIREMENTS.

 

Right to Defer. The Plan Administrator shall furnish to the Participant a
written explanation of the right of the Participant to defer distribution until
the benefit is no longer immediately distributable.

 

The Plan Administrator shall furnish the written explanation by a method
reasonably calculated to reach the attention of the Participant no less than 30
days, and no more then 90 days, before the Annuity Starting Date.

 

However, distribution may begin less than 30 days after the notice described in
this subparagraph is given, provided the Plan Administrator clearly informs the
Participant that he has a right to a period of at least 30 days after receiving
the notice to consider the decision of whether or not to elect a distribution,
and the Participant, after receiving the notice, affirmatively elects a
distribution.

 

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ARTICLE VII

 

DISTRIBUTION REQUIREMENTS

 

SECTION 7.01—APPLICATION.

 

The timing of any distribution must meet the requirements of this article.

 

SECTION 7.02—DEFINITIONS.

 

For purposes of this article, the following terms are defined:

 

5-percent Owner means a 5-percent owner as defined in Code Section 416. A
Participant is treated as a 5-percent Owner for purposes of this article if such
Participant is a 5-percent Owner at any time during the Plan Year ending with or
within the calendar year in which such owner attains age 70 1/2.

 

In addition, a Participant is treated as a 5percent Owner for purposes of this
article if such Participant becomes a 5-percent Owner in a later Plan Year. Such
Prticipant’s Required Beginning Date shall not be later than the April 1 of the
calendar year following the calendar year in which such later Plan Year ends.

 

Once distributions have begun to a 5-percent Owner under this article, they must
continue to be distributed, even if the Participant ceases to be a 5-percent
Owner in a subsequent year.

 

Required Beginning Date means, for a Participant who is a 5-percent Owner, the
April 1 of the calendar-, year following the calendar year in which he attains
age 70 1/2.

 

Required Beginning Date means, for any Participant who is not a 5-percent Owner,
the April 1 of the calendar year following the later of the calendar year in
which he attains age 70 1/2 or the calendar year in which he retires.

 

The preretirement age 70 1/2 distribution option is only eliminated with respect
to Participants who reach age 70 1/2 in or later a calendar year that begins
after the tartar of December 31, 1998, or the adoption date of the amendment
which eliminated such option. The preretirement age 701/2 distribution is an
optional form of benefit under which benefits payable in a particular
distribution form (including any modifications that may be elected after
benefits begin) begin at a time during the period that begins on or after
January 1 of the calendar year in which the Participant attains age 70 1/2 and
ends April 1 of the immediately following calendar year.

 

The options available for Participants who are not 5-percent Owners and attained
age 701/2 in calendar years before the calendar year that begins after the later
of December 31, 1998, or the adoption date of the amendment which eliminated the
preretirement age 70 1/2 distribution shall be the following. Any such
Participant attaining age 70 1/2 in years after 1995 may elect by April 1 of the
calendar year following the calendar year in which he attained age 70 1/2 (or by
December 31, 1997 in the case of a Participant attaining age 70 1/2 in 1996) to
defer distributions until the calendar year following the calendar year in which
he retires.

 

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SECTION 7.03—DISTRIBUTION REQUIREMENTS.

 

(a)           General Rules.

 

(1)           The requirements of this article shall apply to any distribution
of a Participant’s interest and shall take precedence over any inconsistent
provisions of this Plan. Unless otherwise specified, the provisions, of this
article apply to calendar years beginning after December 31, 1984.

 

(2)           All distributions required under this article shall be determined
and made in accordance with the proposed regulations under Code Section
401(a)(9).

 

(3)           With respect to distributions under the Plan made for calendar
years beginning on or after January 1, 2001 (January 1 of the calendar year in
which these provisions were first adopted, if later), the Plan will apply the
minimum distribution requirements of Code Section 401(a)(9) in accordance with
the regulations under Code Section 401(a)(9) that were proposed on January 17,
2001, notwithstanding any provision of the Plan to the contrary. These
provisions shall continue in effect until the end of the last calendar year
beginning before the effective date of final regulations under Code Section
401(a)(9) or such other date as may be specified in guidance published by the
Internal Revenue Service.

 

(b)           Required Beginning Date. The entire interest of a Participant must
be distributed or begin to be distributed no later than the Participant’s
Required Beginning Date.

 

(c)           Death Distribution Provisions. If the Participant dies before
distribution of his interest begins, distribution of the Participant’s entire
interest shall be completed by December 31 of the calendar year containing the
fifth anniversary of the Participant’s death.

 

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ARTICLE VIll

 

TERMINATION OF THE PLAN

 

The Employer expects to continue the Plan indefinitely but reserves the right to
terminate the Plan in whole or in part at any time upon giving written notice to
all parties concerned. Complete discontinuance of Contributions constitutes
complete termination of the Plan.

 

The Account of each Participant shall be fully (100%) vested and nonforfeitable
as of the effective date of complete termination of the Plan. The Account of
each Participant who is included in the group of Participants deemed to be
affected by the partial termination of the Plan shall be fully (100%) vested and
nonforfeitable as of the effective date of the partial termination of the Plan.
The Participant’s Account shall continue to participate in the earnings
credited, expenses charged, and any appreciation or depreciation of the
Investment Fund until his Vested Account is distributed.

 

A Participant’s Account which does not result from the Contributions listed
below may be distributed to the Participant after the effective date of the
complete termination of the Plan:

 

Elective Deferral Contributions

Qualified Nonelective Contributions

 

A Participant’s Account resulting from such Contributions may; be distributed
upon complete termination of the Plan, but only if neither the Employer nor any
Controlled Group member maintain or establish a successor defined contribution
plan (other than an employer stock ownership plan as defined in Code Section
4975(e)(7), a simplified employee pension plan as defined in Code Section 408(k)
of a SIMPLE IRA plan as defined in Code Section 408(p)) and such distribution is
made in a lump sum. A distribution under this article shall be a retirement
benefit and shall be distributed to the Participant according to the provisions
of Article VI.

 

The Participant’s entire Vested Account shall be paid in a single sum to the
Participant as of the effective date of complete termination of the Plan if (i)
the requirements for distribution of Elective Deferral Contributions in the
above paragraph are met and (ii) consent of the Participant is not required in
the ELECTION PROCEDURES SECTION of Article VI to distribute a benefit which is
immediately distributable. This is a small amounts payment. The small amounts
payment is in full settlement of all benefits otherwise payable.

 

Upon complete termination of the Plan, no more Employees shall become
Participants and no more Contributions shall be made.

 

The assets of this Plan shall not be paid to the Employer at any time, except
that, after the satisfaction of all liabilities under the Plan, any assets
remaining may be paid to the Employer. The payment may not be made if it would
contravene any provision of law.

 

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ARTICLE IX

 

ADMINISTRATION OF THE PLAN

 

SECTION 9.01—ADMINISTRATION.

 

Subject to the provisions of this article, the Plan Administrator has complete
control of the administration of the Plan. The Plan Administrator has all the
powers necessary for it to properly carry out its administrative duties. Not in
limitation, but in amplification of the foregoing, the Plan Administrator has
complete discretion to construe or interpret the provisions, of the Plan,
including ambiguous provisions, if any, and to determine all questions that may
arise under the Plan, including all questions relating to the eligibility of
Employees to participate in the Plan and the amount of benefit to which any
Participant or Beneficiary may become entitled. The Plan Administrator’s
decisions upon all matters within the scope of its authority shall be final.

 

Unless otherwise set out in the Plan or Annuity Contract, the Plan Administrator
may delegate recordkeeping and other duties which are necessary for the
administration of the Plan to any person or firm which agrees to accept such
duties. The Plan Administrator shall be entitled to rely upon all tables,
valuations, certificates and reports furnished by the consultant or actuary
appointed by the Plan Administrator and upon all opinions given by any counsel
selected or approved by the Plan Administrator.

 

The Plan Administrator shall receive all claims for benefits by Participants,
former Participants and Beneficiaries. The Plan Administrator shall determine
all facts necessary to establish the right of any Claimant to benefits and the
amount of those benefits under the provisions of the Plan. The Plan
Administrator may establish rules and procedures to be followed by Claimants in
filing claims for benefits, in furnishing and verifying proofs necessary to
determine age, and in any other matters required to administer the Plan.

 

SECTION 9.02—EXPENSES.

 

Expenses of the Plan, to the extent that the Employer does not pay such
expenses, may be paid out of the assets of the Plan provided that such payment
is consistent with ERISA. Such expenses include, but are not limited to,
expenses for bonding required by ERISA; expenses for recordkeeping and other
administrative services; fees and expenses of the Trustee or Annuity Contract;
expenses for investment education service; and direct costs that the Employer
incurs with respect to the Plan.

 

SECTION 9.03—RECORDS.

 

All acts and determinations of the Plan Administrator shall be duly recorded.
All these records, together with other documents necessary for the
administration of the Plan, shall be preserved in the Plan Administrator’s
custody.

 

Writing (handwriting, typing, printing), photostating, photographing,
microfilming, magnetic impulse, mechanical or electrical recording, or other
forms of data compilation shall be acceptable means of keeping records.

 

55

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SECTION 9.04—INFORMATION AVAILABLE.

 

Any Participant in the Plan or any Beneficiary may examine copies of the Plan
description, latest annual report, any bargaining agreement, this Plan, the
Annuity Contract or any other instrument under which the Plan was established or
is operated.  The Plan Administrator shall maintain all of the items listed in
this section in its office, or in such other place or places as it may designate
in order to comply with governmental regulations. These items may be examined
during reasonable business hours.  Upon the written request of a Participant or
Beneficiary receiving benefits under the Plan, the Plan Administrator shall
furnish him with a copy of any of these items.  The Plan Administrator may make
a reasonable charge to the requesting person for the copy.

 

SECTION 9.05—CLAIM AND APPEAL PROCEDURES.

 

A Claimant must submit any required forms and pertinent information when making
a claim for benefits under the Plan.

 

If a claim for benefits under the Plan is denied, the Plan Administrator shall
provide adequate written notice to the Claimant whose claim for benefits under
the Plan has been denied.  The notice must be furnished within 90 days of the
date that the claim is received by the Plan Administrator.  The Claimant shall
be notified in writing within this initial 90-day period if special
circumstances require an extension of time needed to process the claim and the
date by which the Plan Administrator’s decision is expected to be rendered.  The
written notice shall be furnished no later than 180 days after the date the
claim was received by the Plan Administrator.

 

The Plan Administrator’s notice to the Claimant shall specify the reason for the
denial; specify references to pertinent Plan provisions on which denial is
based; describe any additional material and information needed for the Claimant
to perfect his claim for benefits; explain why the material and information is
needed; inform the Claimant that any appeal he wishes to make must be in writing
to the Plan Administrator within 60 days after receipt of the Plan
Administrator’s notice of denial of benefits and that failure to make he written
appeal within such 60-day period renders the Plan Administrator’s determination
of such denial final, binding and conclusive.

 

If the Claimant appeals to the Plan Administrator, the Claimant (or his
authorized representative) may submit in writing whatever issues and comments
the Claimant (or his authorized representative) feels are pertinent.  The
Claimant (for his authorized representative) may review pertinent Plan
documents.  The Plan Administrator shall reexamine all facts related to the
appeal and make a final determination as to whether the denial of benefits is
justified under the circumstances.  The Plan Administrator shall advise the
Claimant of its decision within 60 days of his written request for review,
unless special circumstances (such as a hearing) would make rendering a decision
within the 60-day limit unfeasible.  The Claimant must be notified within the
60-day limit if an extension is necessary.  The Plan Administrator shall render
a decision on a claim for benefits no later than 120 days after the request for
review is received.

 

SECTION 9.06—DELEGATION OF AUTHORITY.

 

All or any part of the administrative duties and responsibilities under this
article may be delegated by the Plan Administrator to a retirement committee. 
The duties and responsibilities of the retirement committee shall be set out in
a separate written agreement.

 

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SECTION 9.07—EXERCISE OF DISCRETIONARY AUTHORITY.

 

The Employer, Plan Administrator and any other person or entity who has
authority with respect to the management, administration, or investment of the
Plan may exercise that authority in its/his full discretion, subject only to the
duties imposed under ERISA. This discretionary authority includes, but is not
limited to, the authority to make any and all factual determinations and
interpret all terms and provisions of the Plan documents relevant to the issue
under consideration. The exercise of authority will be binding upon all persons;
will be given deference in all courts of law; and will not be overturned or set
aside by any court of law unless found to be arbitrary and capricious or made in
bad faith.

 

SECTION 9.08—VOTING AND TENDER OF QUALIFYING EMPLOYER SECURITIES.

 

Voting rights with respect to Qualifying Employer Securities will be passed
through to Participants. Participants will be allowed to direct the voting
rights of Qualifying Employer Securities for any matter put to the vote of
shareholders. Before each meeting of shareholders, the Employer shall cause to
be sent to each person with power to control such voting rights a copy of any
notice and any other information provided to shareholders and, if applicable, a
form for instructing the Trustee how to vote at such meeting (or any adjournment
thereof) the number of full and fractional shares subject to such person’s
voting control. The Trustee may establish a deadline in advance of the meeting
by which such forms must be received in order to be effective.

 

Each Participant shall be entitled to one vote for each share credited to his
Account.

 

If some or all of the Participants have not directed or have not timely directed
the Trustee on how to vote, then the Trustee shall vote such Qualifying Employer
Securities in the same proportion as those shares of Qualifying Employer
Securities for which the Trustee has received proper direction for such matter.

 

Tender rights or exchange offers for Qualifying Employer Securities will be
passed through to Participants. As soon as practicable after the commencement of
a tender or exchange offer for Qualifying Employer Securities, the Employer
shall cause each person with power to control the response to such tender or
exchange offer to be advised in writing the terms of the offer and, if
applicable, to be provided with a form for instructing the Trustee, or for
revoking such instruction, to tender or exchange shares of Qualifying Employer
Securities, to the extent permitted under the terms of such offer. In advising
such persons of the terms of the offer, the Employer may include statements from
the board of directors setting forth its position with respect to the offer.

 

If some or all of the Participants have not directed or have not timely directed
the Trustee on how to tender, then the Trustee shall tender such Qualifying
Employer Securities in the same proportion as those shares of Qualifying
Employer Securities for which the Trustee has received proper direction for such
matter.

 

If the tender or exchange offer is limited so that all of the share that the
Trustee has been directed to tender or exchange cannot be sold or exchanged, the
shares that each Participant directed to be tendered or exchanged shall be
deemed to have been sold or exchanged in the same ratio that the number of
shares actually sold or exchanged bears to the total number of shares that the
Trustee was directed to tender or exchange.

 

The Trustee shall hold the Participant’s individual directions with respect to
voting rights or tender decisions in confidence and, except as required by raw,
shall not divulge or release such individual directions

 

57

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to anyone associated with the Employer. The Employer may require verification of
the Trustee’s compliance with the directions received from Participants by any
independent auditor selected by the Employer, provided that such auditor agrees
to maintain the confidentiality of such individual directions.

 

The Employer may develop procedures to facilitate the exercise of votes or
tender rights, such as the use of facsimile transmissions for the Participants
located in physically remote areas.

 

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ARTICLE X

 

GENERAL PROVISIONS

 

SECTION 10.01—AMENDMENTS.

 

The Employer may amend this Plan at any time, including any remedial retroactive
changes (within, the time specified by Internal Revenue Service regulations), to
comply with any law or regulation issued by any governmental agency to which the
Plan is subject.

 

An amendment may not diminish or adversely affect any accrued interest or
benefit of Participants or their Beneficiaries nor allow reversion or diversion
of Plan assets to the Employer at any time, except as may be required to comply
with any law or regulation issued by any governmental agency to which the Plan
is subject.

 

No amendment to this Plan shall be effective to the extent that it has the
effect of decreasing a Participant’s accrued benefit. However, a Participant’s
Account may be reduced to the extent permitted under Code Section 412(c)(8). For
purposes of this paragraph, a Plan amendment which has the effect of decreasing
a Participant’s Account with respect to benefits attributable to service before
the amendment shall be treated as reducing an accrued benefit. Furthermore, if
the vesting schedule of the Plan is amended, in the case of an Employee who is a
Participant as of the later of the date such amendment is adopted or the date it
becomes effective, the nonforfeitable percentage (determined as of such date) of
such Employee’s right to his employer-derived accrued benefit shall not be less
than his percentage computed under the Plan without regard to such amendment.

 

No amendment to the Plan shall be effective to eliminate or restrict an optional
form of benefit with respect to benefits attributable to service before the
amendment except as provided in the MERGERS AND DIRECT TRANSFERS SECTION of this
article and below:

 

(a)           The Plan is amended to eliminate or restrict the ability of a
Participant to receive payment of his Account balance under a particular
optional form of benefit and the amendment satisfies the conditions in (1) and
(2) below:

 

(1)           The amendment provides a single sum distribution form that is
otherwise identical to the optional form of benefit eliminated or restricted.
For purposes of this condition (1), a single sum distribution form is otherwise
identical only if it is identical in all respects to the eliminated or
restricted optional form of benefit (or would be identical except that it
provides greater rights to the Participant) except with respect to the timing of
payments after commencement.

 

(2)           The amendment provides that the amendment shall not apply to any
distribution with an Annuity Starting Date earlier than the earlier of:

 

(i)            the 90th day after the date the Participant receiving the
distribution has been furnished a summary that reflects the amendment and that
satisfies the ERISA requirements at 29 CFR 2520.104b-3 relating to a summary of
material modifications, or

 

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(ii)           the first day of the second Plan Year following the Plan Year in
which the amendment is adopted.

 

(b)           The Plan is amended to eliminate or restrict in-kind distributions
and the conditions in Q&A 2 (b)(2)(iii) in section 1.411 (d)-4 of the
regulations are met.

 

If, as a result of an amendment, an Employer Contribution is removed that is not
100% immediately vested when made, the applicable vesting schedule shall remain
in effect after the date of such amendment. The Participant shall not become
immediately 100% vested in such Contributions as a result of the elimination of
such Contribution except as otherwise specifically provided in the Plan.

 

An amendment shall not decrease a Participant’s vested interest in the Plan. If
an amendment to the Plan, or a deemed amendment in the case of a change in
top-heavy status of the Plan as provided in the; MODIFICATION OF VESTING
REQUIREMENTS SECTION of Article XI, changes the computation of the percentage
used to determine that portion of a Participant’s Account attributable to
Employer Contributions which is nonforfeitable (whether directly or indirectly),
each Participant or former Participant

 

(c)           who has completed at least three Years of Service on the date the
election period described below ends (five Years of Service if the Participant
does not have at least one Hour-of-Service in a Plan Year beginning after
December 31, 1988) and

 

(d)           whose nonforfeitable percentage will be determined on any date
after the date of the change

 

may elect, during the election period, to have the nonforfeitable percentage of
his Account that results from Employer Contributions determined without regard
to the amendment. This election may not be revoked. If after the Plan is
changed, the Participant’s nonforfeitable percentage will at all times be as
great as it would have been if the change had not been made, no election needs
to be provided. The election period shall begin no later than the date the Plan
amendment is adopted, or deemed adopted in the case of a change in the top-heavy
status of the Plan, and end no earlier than the 60th day after the latest of the
date the amendment is adopted (deemed adopted) or becomes effective, or the date
the Participant is issued written notice of the amendment (deemed amendment) by
the Employer or the Plan Administrator.

 

SECTION 10.02—DIRECT ROLLOVERS.

 

Notwithstanding any provision of the Plan to the contrary that would otherwise
limit a Distributee’s election under this section, a Distributee may elect, at
the time and in the manner prescribed by the Plan Administrator, to have any
portion of an Eligible Rollover Distribution paid directly to an Eligible
Retirement Plan specified by the Distributive in a Direct Rollover.

 

Any distributions made under the SMALL AMOUNTS SECTION of this article (or which
are small amounts payments made under Article VIII at complete termination of
the Plan) which are Eligible Rollover Distributions and for which the
Distributee has not elected to either have such distribution paid to him or to
an Eligible Retirement Plan shall be paid to the Distributee.

 

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SECTION 10.03—MERGERS AND DIRECT TRANSFERS.

 

The Plan may not be merged or consolidated with, nor have its assets or
liabilities transferred to, any other retirement plan, unless each Participant
in the plan would (if the plan then terminated) receive a benefit immediately
after the merger, consolidation, or transfer which is equal to or greater than
the benefit the Participant would have been entitled to receive immediately
before he merger, consolidation, or transfer (if this Plan had then terminated).
The Employer may enter into merger agreements or direct transfer of assets
agreements with the employers under other retirement plans which are qualifiable
under Code Section 401(a), including an elective transfer, and may accept the
direct transfer of plan assets, or may transfer plan assets, as a party to any
such agreement. The Employer shall not consent to, or be a party to a merger,
consolidation, or transfer of assets with a plan which is subject to the
survivor annuity requirements of Code Section 401 (a)(11) if such action would
result in a survivor annuity feature being maintained under this Plan.

 

Notwithstanding any provision of the Plan to the contrary, to the extent any
optional form of benefit under the Plan permits a distribution prior to the
Employee’s retirement, death, disability, or severance from employment, and
prior to plan termination, the optional form of benefit is not available with
respect to benefits attributable to assets (including the post-transfer earnings
thereon) and liabilities that are transferred, within the meaning of Code
Section 414(1), to this Plan from a money purchase pension plan qualified under
Code Section 401(a) (other than any portion of those assets and liabilities
attributable to voluntary employee contributions).

 

The Plan may accept a direct transfer of plan assets on behalf of an Eligible
Employee. If the Eligible Employee is not an Active Participant when the
transfer is made, the Eligible Employee shall be deemed to be an Active
Participant only for the purpose of investment and distribution of the
transferred assets. Employer Contributions shall not be made for or allocated to
the Eligible Employee, until the time he meets all of the requirements to become
an Active Participant.

 

The Plan shall hold, administer, and distribute the transferred assets as a part
of the Plan. The Plan shall maintain a separate account for the benefit of the
Employee on whose behalf the Plan accepted the transfer in order to reflect the
value of the transferred assets.

 

Unless a transfer of assets to the Plan is an elective transfer as described
below, the Plan shall apply the optional forms of benefit protections described
in the AMENDMENTS SECTION of this article to all transferred assets.

 

A Participant’s protected benefits may be eliminated upon transfer between
qualified defined contribution plans if the conditions in Q&A 3(b)(1) in section
1.411(d)-4 of the regulations are met. The transfer must meet all of the other
applicable qualification requirements.

 

A Participant’s protected benefits may be eliminated upon transfer between
qualified plans (both defined benefit and defined contribution) if the
conditions in Q&A 3(c)(1) in section 1.411(d)-4 of the regulations are met.
Beginning January 1, 2002, if the Participant is eligible to receive an
immediate distribution of his entire, nonforfeitable accrued benefit in a single
sum distribution that would consist entirely of an eligible rollover
distribution under Code Section 4011(a)(31), such transfer will be accomplished
as a direct rollover, under Code Section 401(a)(31). The rules applicable to
distributions under the plan would apply to the transfer, but the transfer would
not be treated as a distribution for purposes of the minimum distribution
requirements of Code Section 401(a)(9).

 

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SECTION 10.04—PROVISIONS RELATING TO THE INSURER AND OTHER PARTIES.

 

The obligations of an Insurer shall be governed solely by the provisions of the
Annuity Contract. The Insurer shall not be required to perform any act not
provided in or contrary to the provisions of the Annuity Contract. Each Annuity
Contract when purchased shall comply with the Plan. See the CONSTRUCTION SECTION
of this article.

 

Any issuer or distributor of investment contracts or securities is governed
solely by the terms of its policies, written investment contract, prospectuses,
security instruments, and any other written agreements entered into with the
Trustee with regard to such investment contracts or securities.

 

Such Insurer, issuer or distributor is not a party to the Plan, nor bound in any
way by the Plan provisions. Such parties shall not be required to look to the
terms of this Plan, nor to determine whether the Employer, the Plan
Administrator, the Trustee, or the Named Fiduciary have the authority to act in
any particular manner or to make any contract or agreement.

 

Until notice of any amendment or termination of this Plan or a change in Trustee
has been received by the Insurer at its home office or an issuer or distributor
at their principal address, they are and shall be fully protected in assuming
that the Plan has not been amended or terminated and in dealing with any party
acting as Trustee according to the latest information which they have received
at their home office or principal address.

 

SECTION 10.05-EMPLOYMENT STATUS.

 

Nothing contained in this plan gives an Employee the right to be retained in the
Employer’s employ or to interfere with the Employer’s right to discharge any
Employee.

 

SECTION 10.06-RIGHTS TO PLAN ASSETS.

 

An Employee shall not have any right to or interest in any assets of the Plan
upon termination of employment or otherwise except as specifically provided
under this Plan, and then only to the extent of the benefits payable to such
Employee according to the Plan provisions.

 

Any final payment or distribution to a Participant or his legal representative
or to any Beneficiaries of such Participant under the Plan provisions shall be
in full satisfaction of all claims against the Plan, the Named Fiduciary, the
Plan Administrator, the Insurer, the Trustee, and the Employer arising under or
by virtue of the Plan.

 

SECTION 10.07—BENEFICIARY.

 

Each Participant may name a Beneficiary to receive any death benefit that may
arise but of his participation in the Plan. The Participant may change his
Beneficiary from time to time. Unless .a qualified election has been made, for
purposes of distributing any death benefits, before the Participant’s Retirement
Date, the Beneficiary of a Participant who has a spouse shall be the
Participant’s spouse. The Participant’s Beneficiary designation and any change
of Beneficiary shall be subject to the provisions of the ELECTION PROCEDURES
SECTION of Article VI. It is the responsibility of the Participant to give
written notice to the Insurer of the name of the Beneficiary on a form furnished
for that purpose.

 

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With the Employer’s consent, the Plan Administrator may maintain records of
Beneficiary designations for Participants before their Retirement Dates. In that
event, the written designations made by Participants shall be filed with the
Plan Administrator. If a Participant dies before his Retirement Date, the Plan
Administrator shall certify to the Insurer the Beneficiary designation on its
records for the Participant.

 

If there is no Beneficiary named or surviving when a Participant dies, the
Participant’s Beneficiary shall be the Participant’s surviving spouse, or where
there is no surviving spouse, the executor or administrator of the Participant’s
estate.

 

SECTION 10.08—NONALIENATION OF BENEFITS.

 

Benefits payable under the Plan are not subject to the claims of any creditor of
any Participant, Beneficiary or spouse. A Participant, Beneficiary or spouse
does not have any rights to alienate, anticipate, commute, pledge, encumber, or
assign any of such benefits, except in the case of a loan as provided in the
LOANS TO PARTICIPANTS SECTION of Article V. The preceding sentences shall also
apply to the creation, assignment, or recognition of a right to any benefit
payable with respect to a Participant according to a domestic relations order,
unless such order is determined by the Plan Administrator to be a qualified
domestic relations order, as defined in Code Section 414(p), or any domestic
relations order entered before January 1, 1985. The preceding sentences shall
not apply to any offset of a Participant’s benefits provided under the Plan
against an amount the Participant is required to pay the Plan with respect to a
judgement, order, or decree issued, or a settlement entered into, on or after
Augusts 5, 1997, which meets the requirements of Code Sections 401(a)(13)(C) or
(D).

 

SECTION 10.09—CONSTRUCTION.

 

The validity of the Plan or any of its provisions is determined under and
construed according to Federal law and, to the extent permissible, according to
the laws of the state in which the Employer has its principal office. In case
any provision of this Plan is hold illegal or invalid for any reason, such
determination shall not affect the remaining provisions of this Plan, and the
Plan shall be construed and enforced as if the illegal or invalid provision had
never been included.

 

In the event of any conflict between the provisions of the Plan and the terms of
any Annuity Contract issued hereunder, the provisions of the Plan control.

 

SECTION 10.10—LEGAL ACTIONS.

 

No person employed by the Employer, no Participant, former Participant, or their
Beneficiaries, or any other person having or claiming to have an interest in the
Plan is entitled to any notice of process. A final judgment entered in any such
action or proceeding shall be binding and conclusive on all persons having or
claiming to have an interest in the Plan.

 

SECTION 10.11—SMALL AMOUNTS.

 

If consent of the Participant is not required for a benefit which is
immediately, distributable in the ELECTION PROCEDURES SECTION of Article VI, a
Participant’s entire Vested Account shall be paid in a single sum as of the
earliest of this Retirement Date, the date he dies, or the date he ceases to be
art Employee for any other reason. If a Participant would have received a
distribution under the first sentence of this

 

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paragraph but for the fact that the Participant’s consent was needed to
distribute a benefit which is immediately distributable, and if at a later time
consent would not be needed to distribute a benefit which is immediately
distributable and such Participant has not again become an Employee, such Vested
Account shall be paid in a single sum. This is a small amounts payment.

 

If a small amounts payment is made as of the date the Participant dies, the
small amounts payment shall be made to the Participant’s Beneficiary. If a small
amounts payment is made while the Participant is living, the small amounts
payment shall be made to the Participant. The small amounts payment is in full
settlement of benefits otherwise payable.

 

No other small amounts payments shall be made.

 

SECTION 10.12—WORD USAGE.

 

The masculine gender, where used in this Plan, shall include the feminine gender
and the singular words, as used in this Plan, may include the plural, unless the
context indicates otherwise.

 

The words in writing and written, where used in this Plan, shall include any
other forms, such as voice response or other electronic system, as permitted by
any governmental agency to which the Plan is subject.

 

SECTION 10.13-CHANGE IN SERVICE METHOD.

 

(a)           Change of Service Method Under This Plan.  If this Plan is amended
to change the method of crediting service from the elapsed time method to the
hours method for any purpose under this Plan, the Employee’s service shall be
equal to the sum of (1), (2): and (3) below:

 

(1)           The number of whole years of service credited to the Employee
under the Plan as of the date the change is effective.

 

(2)           One year of service for the applicable computation period in which
the change is effective if he is credited with the required number of
Hours-of-Service. If the Employer does not have sufficient records to determine
the Employee’s actual Hours-of-Service in that part of the service period before
the effective date of the change, the Hours-of-Service shall be determined using
an equivalency. For any month in which he would be required to be credited with
one Hour-of-Service, the Employee shall be deemed for purposes of this section
to be credited with 190 Hours-of-Service.

 

(3)           The Employee’s service determined under this Plan using the hours
method after the end of the computation period in which the change in service
method was effective.

 

If this Plan is amended to change the method of crediting service from the hours
method to the elapsed time method for any purpose under this Plan, the
Employee’s service shall be equal to the sum of (4), (5), and (6) below:

 

(4)           The number of whole years of service credited to the Employee
under the Plan as of the beginning of the computation period in which the change
in service method is effective.

 

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(5)           the greater of (i) the service that would be credited to the
Employee for that entire computation period using the elapsed time method or
(ii) the service credited to him under the Plan as of the date the change is
effective.

 

(6)           The Employee’s service determined under this Plan using the
elapsed time method after the end of the applicable computation period in which
the change in service method was effective.

 

(b)           Transfers Between Plans with Different Service Methods.  If an
Employee has been a participant in another plan of the Employer which credited
service under the elapsed time method for any purpose which under this Plan is
determined using the hours method, then the Employee’s service shall be equal to
the sum of (1), (2), and (3) below:

 

(1)           The number of whole years of service credited to the Employee
under the plan as of the date he became an Eligible Employee under this Plan.

 

(2)           One year of service for the applicable computation period in which
he became an Eligible Employee if he is credited with the required number of
Hours-of-Service. If the Employer does not have sufficient records to determine
the Employee’s actual Hours-of-Service in that part of the service period before
the date he became an Eligible Employee, the Hours of-Service shall be
determined using an equivalency. For any month in which he would be required to
be credited with one Hour-of-Service, the Employee shall be deemed for purposes
of this section to be credited with 190 Hours-of-Service.

 

(3)           The Employee’s service determined under this Plan using the hours
method after the end of the computation period in which he became an Eligible
Employee.

 

If an Employee has been a participant in another plan of the Employer which
credited service under the hours method for any purpose which under this Plan is
determined using the elapsed time method, then the Employee’s service shall be
equal to the sum of (4), (5), and (6) below:

 

(4)           The number of whole years of service credited to the Employee
under the other plan as of the beginning of the computation period under that
plan in which he became an Eligible Employee under this Plan.

 

(5)           The greater of (i) the service that would be credited to the
Employee for that entire computation period using the elapsed time method or
(ii) the service credited to him under the other plan as of the date he became
an Eligible Employee under this Plan.

 

(6)           The Employee’s service determined under this Plan using the
elapsed time method after the end of the applicable computation period under the
other plan in which he became an Eligible Employee.

 

If an Employee has been a participant in a Controlled Group member’s plan which
credited service under a different method than is used in this Plan, in order to
determine entry and vesting, the provisions in (b) above shall apply as though
the Controlled Group member’s plan were a plan of the Employer.

 

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Any modification of service contained in this Plan shall be applicable to the
service determined pursuant to this section.

 

SECTION 10.14—MILITARY SERVICE.

 

Notwithstanding any provision of this Plan to the contrary, the Plan shall
provide contributions, benefits, and service credit with respect to qualified
military service in accordance with Code Section 414(u). Loan repayments shall
be suspended under this Plan as permitted under Code Section 414(u).

 

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ARTICLE XI

 

TOP-HEAVY PLAN REQUIREMENTS

 

SECTION 11.01—APPLICATION.

 

The provisions of this article shall supersede all other provisions in the Plan
to the contrary.

 

For the purpose of applying the Top-heavy Plan requirements of this article, all
members of the Controlled Group shall be treated as one Employer. The term
Employer, as used in this article, shall be deemed to include all members of the
Controlled Group, unless the term as used clearly indicates only the Employer is
meant.

 

The accrued benefit or account of a participant which results from deductible
employee contributions shall not be included for any purpose under this article.

 

The minimum vesting and contribution provisions of the MODIFICATION OF VESTING
REQUIREMENTS and MODIFICATION OF CONTRIBUTIONS SECTIONS of this article shall
not apply to any Employee who is included in a group of Employees covered by a
collective bargaining agreement which the Secretary of Labor finds to be a
collective bargaining agreement between employee representatives and one or more
employers, including the Employer, if there is evidence that retirement benefits
were the subject of good faith bargaining between such representatives. For this
purpose, the term “employee representatives” does not include any organization
more than half of whose members are employees who are owners, officers, or
executives.

 

SECTION 11.02—DEFINITIONS.

 

For purposes of this article the following terms are defined:

 

Aggregation Group means:

 

(a)           each of the Employer’s qualified plans in which a Key Employee is
a participant during the Plan Year containing the Determination Date (regardless
of whether the plan was terminated) or one of the four preceding Plan Years,

 

(b)           each of the Employees other qualified plans which allows the
plan(s) described in (a) above to meet the nondiscrimination requirement of Code
Section 401(a)(4) or the minimum coverage requirement of Code Section 410, and

 

(c)           any of the Employer’s other qualified plans not included in (a) or
(b) above which the Employer desires to include as part of the Aggregation
Group. Such a qualified plan shall be included only if the Aggregation Group
would continue to satisfy the requirements of Code Section 401(a)(4) and Code
Section 410.

 

The plans in (a) and (b) above constitute the “required” Aggregation Group, The
plans in (a), (b), and (c) above constitute the “permissive” Aggregation Group.

 

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Compensation means compensation as defined in the CONTRIBUTION LIMITATION
SECTION of Article III. For purposes of determining who is a Key Employee in
years beginning before January 1, 1998, Compensation shall include, in addition
to compensation as defined in the CONTRIBUTION LIMITATION SECTION of Article
III, elective contributions. Elective contributions are amounts excludible from
the gross income of the Employee under Code Sections 125, 402(e)(3),
402(h)(1)(B), or 403(b), and contributed by the Employer, at the Employee’s
election, to a Code Section 401(k) arrangement, a simplified employee pension,
cafeteria plan, or tax-sheltered annuity. Elective contributions also include
amounts deferred under a Code Section 457 plan maintained by the Employer.

 

Determination Date means as to any plan, for any plan year subsequent to the
first plan year, the last day of the preceding plan year. For the first plan
year of the plan, the last day of that year.

 

Key Employee means any Employee or former Employee (and the Beneficiaries of
such Employee) who at any time during the determination period was:

 

(a)           an officer of the Employer if such individual’s annual
Compensation exceeds 50 percent of the dollar limitation under Code Section
415(b)(1)(A).

 

(b)           an owner (or considered an owner under Code Section 318) of.one of
the ten largest interests in the Employer if such individual’s annual
Compensation exceeds 100 percent of the dollar, limitation under Code Section
415(c)(1)(A).

 

(c)           a 5-percent owner of the Employer, or

 

(d)           a 1-percent owner of the Employer who has annual, Compensation of
more than $150,000.

 

The determination period is the Plan Year containing the Determination Date and
the four preceding Plan Years.

 

The determination of who is a Key Employee shall be made according to Code
Section 416(i)(1) and the regulations thereunder.

 

Non-key Employee means any Employee who is not a Key Employee.

 

Present Value means the present value of a participant’s accrued benefit under a
defined benefit plan. For purposes of establishing Present Value to compute the
Top-heavy Ratio, any benefit shall be discounted only for 7.5% interest and
mortality according to the 1971 Group Annuity Table (Male) without the 7% margin
but with projection by Scale E from 1971 to the later of (a) 1974, or (b) the
year determined by adding the age to 1920, and wherein for females the male age
six years younger is used.

 

Top-heavy Plan means a plan which is top-heavy for any plan year beginning after
December 31, 1983. This Plan shall be top-heavy if any of the following
conditions exist:

 

(a)           The Top-heavy Ratio for this Plan exceeds 60 percent and this Plan
is not part of any required Aggregation Group or permissive Aggregation Group.

 

(b)           This Plan is a part of a required Aggregation Group, but not part
of a permissive Aggregation Group, and the Top-heavy Ratio for the required
Aggregation Group exceeds 60 percent.

 

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(c)           This Plan is a part of a required Aggregation Group and part of a
permissive Aggregation Group and the Top-heavy Ratio for the permissive
Aggregation Group exceeds 60 percent.

 

Top-heavy Ratio means:

 

(a)           If the Employer maintains one or more defined contribution plans
(including any simplified employee pension plan) and the Employer has not
maintained any defined benefit plan which during the five-year period ending on
the Determination Date(s) has or has had accrued benefits, the Top-heavy Ratio
for this Plan alone or for the required or permissive Aggregation Group, as
appropriate, is a fraction, the numerator of which is the sum of the account
balances of all Key Employees as of the Determination Date(s) (including any
part of any account balance distributed in the five-year period ending on the
Determination Date(s)), and the denominator of which is the sum of all account
balances (including any part of any account balance distributed in the five-year
period ending on the Distribution Date(s)), both computed in accordance with
Code Section 416 and the regulations thereunder. Both the numerator and
denominator of the Top-heavy Ratio are increased to reflect any contribution not
actually made as of the Determination Date, but which is required to be taken
into account on that date under Code Section 416 and the regulations thereunder.

 

(b)           If the Employer maintains one or more defined contribution plans
(including any simplified employee pension plan) and the Employer maintains or
has maintained one or more defined benefit plans which during the five-year
period ending on the Determination Date(s) has or has had accrued benefits, the
Top-heavy Ratio for any required or permissive Aggregation Group, as
appropriate, is a fraction, the numerator of which is the sum of the account
balances under the aggregated defined contribution plan or plans of all Key
Employees determined in accordance with (a) above, and the Present Value of
accrued benefits under the aggregated defined benefit plan or plans for all Key
Employees as of the Determination Date(s), and the denominator of which is the
sum of the account balances under the aggregated defined contribution plan or
plans for all participants, determined in accordance with (a) above, and the
Present Value of accrued benefits under the defined benefit plan or plan for all
participants as of the Determination Date(s), all determined in accordance with
Code Section 416 and the regulations thereunder. The accrued benefits under a
defined benefit plan in both the numerator and denominator of the Top-heavy
Ratio are increased for any distribution of an accrued benefit made in the
five-year period ending on the Determination Date.

 

(c)           For purposes of (a) and (b) above, the value of account balances
and the Present Value of accrued benefits will be determined as of the most
recent Valuation Date that falls within or ends with the 12-month period ending
on the Determination Date, except as provided in Code Section 416 and the
regulations thereunder for the first and second plan years of a defined benefit
plan. The account balances and accrued benefits of a participant (i) who is not
a Key Employee but who was a Key Employee in a prior year or (ii) who has not
been credited with at least an hour of service with any employer maintaining the
plan at any time during the five-year period ending on the Determination Date
will be disregarded. The calculation of the Top-heavy Ratio and the extent to
which distributions, rollovers, and transfers are taken into account will be
made in accordance with Code Section 416 and the regulations thereunder.
Deductible employee contributions will not be taken into account for purposes of
computing the Top-heavy Ratio. When aggregating plans, the value of account
balances and accrued benefits will be calculated with reference to the
Determination Dates that fall within the same calendar year.

 

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The accrued benefit of a participant other than a Key Employee shall be
determined under (i) the method, if any, that uniformly applies for accrual
purposes under all defined benefit plans maintained by the Employer, or (ii) if
there is no such method, as if such benefit accrued not more rapidly than the
slowest accrual rate permitted under the fractional rule of Code Section
411(b)(1)(C).

 

SECTION 11.03—MODIFICATION OF VESTING REQUIREMENTS.

 

A Participant’s nonforfeitable percentage is 100%. Such percentage is at all
times at least as great as the nonforfeitable percentage, required to satisfy
the requirements of Code Section 416.

 

The part of the Participant’s Vested Account resulting from the minimum
contributions required pursuant a to the MODIFICATION OF CONTRIBUTIONS SECTION
of this article (to the extent required to be nonforfeitable under Code Section
416(b)) may not be forfeited under Code Section 411(a)(3)(B) or (D).

 

SECTION 11.04—MODIFICATION OF CONTRIBUTIONS.

 

During any Plan Year in which this Plan is a Top-heavy Plan, the Employer shall
make a minimum contribution or allocation as of the last day of the Plan Year
for each Non-key Employee who is an Employee on the last day of the Plan Year
and who was an Active Participant at any time during the Plan Year. A Non-key
Employee is not required to have a minimum number of Hours-of-Service or minimum
amount of Compensation in order to be entitled to this minimum. A Non-key
Employee who fails to be an Active Participant merely because his Compensation
is less than a stated amount or merely because of a failure to make mandatory
participant contributions or, in the ease of a cash or deferred arrangement,
elective contributions shall be treated as if he were an Active Participant. The
minimum is the lesser of (a) or (b) below:

 

(a)           3 percent of such person’s Compensation for such Plan Year.

 

(b)           The “highest percentage” of Compensation for such Plan Year at
which the Employer’s contributions are made for or allocated to any Key
Employee. The highest percentage shall be determined by dividing the Employer
Contributions made for or allocated to each Key Employee during the Plan Year by
the amount of his Compensation for such Plan Year, and selecting the greatest
quotient (expressed as a percentage). To determine the highest percentage, all
of the Employer’s defined contribution plans within the Aggregation Group shall
be treated as one plan. The minimum shall be the amount in (a) above if this
Plan and a defined benefit plan of the Employer are required to be included in
the Aggregation Group and this Plan enables the defined benefit plan to meet the
requirements of Code Section 401(a)(4) or 410.

 

For purposes of (a) and (b) above, Compensation shall be limited by Code Section
401(a)(17).

 

If the Employer’s contributions and allocations otherwise required under the
defined contribution plan(s) are at least equal to the minimum above, no
additional contribution or reallocation shall he required. If the Employer’s
total contributions and allocations are less than the minimum above, the
Employer shall contribute the difference for the Plan Year.

 

The minimum contribution or allocation applies to all of the Employer’s defined
contribution plans in the aggregate which are Top-heavy Plans. A minimum
allocation under a profit sharing plan shall be made without regard to whether
or not the Employer has profits.

 

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If a person who is otherwise entitled to a minimum contribution or allocation
above is also covered under another defined contribution plan of the Employer’s
which is a Top-heavy Plan during that same Plan Year, any additional
contribution required to meet the minimum above shall be provided in this Plan.

 

If a person who is otherwise entitled to a minimum contribution or allocation
above is also covered under a defined benefit plan of the Employer’s which is a
Top-heavy Plan during that same Plan Year, the minimum benefits for him shall
not be duplicated. The defined benefit plan shall provide an annual benefit for
him on, or adjusted to, a straight life basis equal to the lesser of:

 

(c)           2 percent of his average pay multiplied by his years of service,
or

 

(d)           20 percent of his average pay.

 

Average pay and years of service shall have the meaning set forth in such
defined benefit plan for this purpose.

 

For purposes of this section, any employer contribution made according to a
salary reduction or similar arrangement and employer contributions which are
matching contributions, as defined in Code Section 401(m), shall not apply in
determining if the minimum contribution requirement has been met, but shall
apply in determining the minimum contribution required.

 

The requirements of this section shall be met without regard to any Social
Security contribution.

 

SECTION 11.05—MODIFICATION OF CONTRIBUTION LIMITATION.

 

If the provisions of subparagraph (I) of the CONTRIBUTION LIMITATION SECTION of
Article III are applicable for any Limitation Year during which this Plan is a
Top-heavy Plan, the contribution limitations shall be modified. The definitions
of Defined Benefit Plan Fraction and Defined Contribution Plan Fraction in the
CONTRIBUTION LIMITATION SECTION of Article III shall be modified by substituting
“100 percent” in lieu of “125 percent.” In addition, an adjustment shall be made
to the numerator of the Defined Contribution Plan Fraction. The adjustment is a
reduction of that numerator similar to the modification of the Defined
Contribution Plan Fraction described in the CONTRIBUTION LIMITATION SECTION of
Article III, and shall be made with respect to the last Plan Year beginning
before January 1, 1984.

 

The modifications in the paragraph above shall not apply with respect to a
Participant so long as employer contributions, forfeitures, or nondeductible
employee contributions are not credited to his account under this or any of the
Employer’s other defined contribution plans and benefits do not accrue for such
Participant under the Employer’s defined benefit plan(s), until the sum of his
Defined Contribution and Defined Benefit Plan Fractions is less than 1.0.

 

This section shall cease to apply effective as of the first Limitation Year
beginning on or after January 1, 2000.

 

71

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By executing this Plan, the Primary Employer acknowledges having counseled to
the extent necessary with selected legal and tax advisors regarding the Plan’s
legal and tax implications.

 

Executed this 20 day of September, 2001.

 

 

CALIFORNIA INDEPENDENT BANCORP

 

 

 

 

 

 

By:

/s/ [ILLEGIBLE]

 

 

 

President/CEO

 

 

 

Title

 

 

 

 

 

 

 

Defined Contribution Plan 8.0

 

 

The Adopting Employer must agree to participate in or adopt the Plan in writing.
If this has not already been done, it may be done by signing below.

 

 

FEATHER RIVER STATE BANK

 

 

 

 

 

 

By:

/s/ [ILLEGIBLE]

 

 

 

President/CEO

 

 

 

Title

 

 

 

9/20/2001

 

 

 

Date

 

 

72

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