EXHIBIT 10.1

Your plan is an important legal document. This sample plan has been prepared
based on our understanding of the desired provisions. It may not fit your
situation. You should consult with your lawyer on the plan’s legal and tax
implications. Neither Principal Life Insurance Company nor its agents can be
responsible for the legal or tax aspects of the plan nor its appropriateness for
your situation. If you wish to change the provisions of this sample plan, you
may ask us to prepare new sample wording for you and your lawyer to review.

OSHKOSH B’GOSH, INC.
401(k) PLAN

Defined Contribution Plan 8.0

Restated January 1, 2003

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 3.01A
  —   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

 

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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
 
       
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
 
       
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

 

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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
 
       

PLAN EXECUTION

INTRODUCTION

     The Primary Employer previously established a 401(k) savings plan on
October 1, 1996.

     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, 2003, is set forth in this document and is substituted in lieu of the
prior document.

     The Primary Employer previously established a profit sharing plan on
January 1, 1952, and restated November 6, 2001.

     The Primary Employer is of the opinion that these two plans should be
merged under the Oshkosh B’Gosh, Inc. 401(k) Plan. Effective January 1, 2003,
the plans are merged and this document is in lieu of the OshKosh B’Gosh, Inc.
Profit Sharing Plan.

     The restated plan continues to be for the exclusive benefit of employees of
the Employer. All persons covered under the plan on December 31, 2002, 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)   Discretionary 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.

     Accrual Computation Period means a consecutive 12-month period ending on
the last day of each Plan Year, including corresponding consecutive 12-month
periods before October 1, 1996.

     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 continuing basis. Such service
is of a type historically performed by employees. In the case of a

 

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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.

     Annual Compensation shall include Compensation received while an Active
Participant.

     Annuity Contract means the annuity contract or contracts into which the
Employer 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.

Compensation shall exclude reimbursements or other expense allowances, fringe
benefits (cash and noncash), moving expenses, deferred compensation (other than
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 Employees 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 October 1, 1996.

     Contributions means

Elective Deferral Contributions
Matching Contributions
Discretionary Contributions
     Rollover Contributions

 

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

     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.

     Discretionary Contributions means discretionary contributions made by the
Employer to fund this Plan. See the EMPLOYER CONTRIBUTIONS SECTION of
Article III.

     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.

     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.

     Eligibility Break in Service means an Eligibility Computation Period in
which an Employee is credited with 500 or fewer Hours-of-Service. An Employee
incurs an Eligibility Break in Service on the last day of an Eligibility
Computation Period in which he has an Eligibility Break in Service.

 

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     Eligibility Computation Period means a consecutive 12-month period. The
first Eligibility Computation Period begins on an Employee’s Employment
Commencement Date. Later Eligibility Computation Periods shall be consecutive
12-month periods ending on the last day of each Plan Year that begins after his
Employment Commencement Date.

     To determine an Eligibility Computation Period after an Eligibility Break
in Service, the Plan shall use the consecutive 12-month period beginning on an
Employee’s Reemployment Commencement Date as if his Reemployment Commencement
Date were his Employment Commencement Date.

     Eligibility Service means one year of service for each Eligibility
Computation Period that has ended and in which an Employee is credited with at
least 1,000 Hours-of-Service.

     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. For purposes of crediting
Hours-of-Service during the Period of Military Duty, an Hour-of-Service shall be
credited (without regard to the 501 Hour-of-Service limitation) for each hour an
Employee would normally have been scheduled to work for the Employer during such
period.

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, for purposes of
Contributions other than Discretionary Contributions, who meets the following
requirement. His employment classification with the Employer is one of the
following:

Nonbargaining class. Not represented for collective bargaining purposes by any
collective bargaining agreement between the Employer and employee
representatives, if retirement benefits were the subject of good faith
bargaining and if two percent or less of the Employees who are covered pursuant
to that agreement are professionals as defined in section 1.410(b)-9 of the
regulations. 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 of the Employer.

Not a nonresident alien, within the meaning of Code Section 7701(b)(1)(B), who
receives no earned income, within the meaning of Code Section 911(d)(2), from
the Employer which constitutes income from sources within the United States,
within the meaning of Code Section 861(a)(3), or who receives such earned income
but it is all exempt from income tax in the United States under the terms of an
income tax convention.

Not a Leased Employee.

 

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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 Employee means any Employee of the Employer, for purposes of
Discretionary Contributions, means any Employee of the Employer, who meets the
following requirement. His employment classification with the Employer is all of
the following:

Salaried class (pays social security and employed in classification codes, 220,
750, 840 and 850.)

Nonbargaining class. Not represented for collective bargaining purposes by any
collective bargaining agreement between the Employer and employee
representatives, if retirement benefits were the subject of good faith
bargaining and if two percent or less of the Employees who are covered pursuant
to that agreement are professionals as defined in section 1.410(b)-9 of the
regulations. 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 of the Employer.

Not a nonresident alien, within the meaning of Code Section 7701(b)(1)(B), who
receives no earned income, within the meaning of Code Section 911(d)(2), from
the Employer which constitutes income from sources within the United States,
within the meaning of Code Section 861(a)(3), or who receives such earned income
but it is all exempt from income tax in the United States under the terms of an
income tax convention.

Not a Leased Employee.

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
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

 

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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).

     The term Employee shall exclude any person who is classified by the
Employer or any such other employer as other than an employee, for the entire
period of such classification, without regard to any subsequent reclassification
which may occur by operation of law or otherwise.

     Employer means, except for purposes of the CONTRIBUTION LIMITATION SECTION
of Article III, 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. For purposes of determining an Eligible Employee, Employer means the
Primary Employer and all Adopting Employers in the ADOPTING EMPLOYERS - SINGLE
PLAN SECTION of Article II.

     Employer Contributions means

Elective Deferral Contributions
Matching Contributions
Discretionary 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 12 consecutive month period beginning on the Saturday
closest to December 31 and ending on the Friday closest to December 31.

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

     Forfeiture Date means, as to a Participant, the date the Participant incurs
five consecutive Vesting Breaks in Service.

 

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     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 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.

 

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     Hour-of-Service means the following:

  (a)   Each hour for which an Employee is paid, or entitled to payment, for
performing duties for the Employer during the applicable computation period.    
(b)   Each hour for which an Employee is paid, or entitled to payment, by the
Employer because of a period of time in which no duties are performed
(irrespective of whether the employment relationship has terminated) due to
vacation, holiday, illness, incapacity (including disability), layoff, jury
duty, military duty or leave of absence. Notwithstanding the preceding
provisions of this subparagraph (b), no credit will be given to the Employee:

(1) for more than 501 Hours-of-Service under this subparagraph (b) because of
any single continuous period in which the Employee performs no duties (whether
or not such period occurs in a single computation period); or

(2) for an Hour-of-Service for which the Employee is directly or indirectly
paid, or entitled to payment, because of a period in which no duties are
performed if such payment is made or due under a plan maintained solely for the
purpose of complying with applicable worker’s or workmen’s compensation, or
unemployment compensation, or disability insurance laws; or

(3) for an Hour-of-Service for a payment which solely reimburses the Employee
for medical or medically related expenses incurred by him.

For purposes of this subparagraph (b), a payment shall be deemed to be made by,
or due from the Employer, regardless of whether such payment is made by, or due
from the Employer, directly or indirectly through, among others, a trust fund or
insurer, to which the Employer contributes or pays premiums and regardless of
whether contributions made or due to the trust fund, insurer or other entity are
for the benefit of particular employees or are on behalf of a group of employees
in the aggregate.

  (c)   Each hour for which back pay, irrespective of mitigation of damages, is
either awarded or agreed to by the Employer. The same Hours-of-Service shall not
be credited both under subparagraph (a) or subparagraph (b) above (as the case
may be) and under this subparagraph (c). Crediting of Hours-of-Service for back
pay awarded or agreed to with respect to periods described in subparagraph
(b) above will be subject to the limitations set forth in that subparagraph.

     Hours-of-Service shall be determined on the basis of months worked for
salaried exempt employees. An Employee shall be credited with 190
Hours-of-Service for each month in which the Employee would otherwise be
credited with at least one Hour-of-Service.

     The crediting of Hours-of-Service above shall be applied under the rules of
paragraphs (b) and (c) of the Department of Labor Regulation 2530.200b-2
(including any interpretations or opinions implementing such rules); which
rules, by this reference, are specifically incorporated in full within this
Plan. The reference to paragraph (b) applies to the special rule for determining
hours of service for reasons other than the performance of duties such as
payments calculated (or not calculated) on the basis of units of time and the
rule against double credit. The reference to paragraph (c) applies to the
crediting of hours of service to computation periods.

 

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     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 (o) and the regulations thereunder.

     Solely for purposes of determining whether a one-year break in service has
occurred for eligibility or vesting purposes, during a Parental Absence an
Employee shall be credited with the Hours-of-Service which otherwise would
normally have been credited to the Employee but for such absence, or in any case
in which such hours cannot be determined, eight Hours-of-Service per day of such
absence. The Hours-of-Service credited under this paragraph shall be credited in
the computation period in which the absence begins if the crediting is necessary
to prevent a break in service in that period; or in all other cases, in the
following computation period.

     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

 

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      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 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.

     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 for years beginning
before January 1, 1998, 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 Benefits Manager, or his or her designee.

     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.

 

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     The Named Fiduciary is the Employer.

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

     Nonvested Account means the excess, if any, of a Participant’s Account over
his Vested Account.

          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.

     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.

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

 

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

     The Plan Administrator is the Employer.

     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.

     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 OshKosh B’Gosh, Inc.

          Reemployment Commencement Date means the date an Employee first
performs an Hour-of-Service following an Eligibility Break in Service.

     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 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.

     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).

     Totally and Permanently Disabled means that a Participant is disabled as
determined by a physician who is selected by the Plan Administrator. Such mental
or physical disability must be expected to be of long continuous duration or
which may be expected to result in death and which prevents him from
satisfactorily performing his duties with the Employer or affiliated employers.

     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

 

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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 that part of his Account which results
from Contributions which were 100% vested when made before his Vesting
Percentage is 100% and is equal to his Account when his Vesting Percentage is
100%.

     If the Participant’s Vesting Percentage is less than 100%, his Vested
Account equals the sum of (a) and (b) below:

  (a)   The part of the Participant’s Account that results from Employer
Contributions made before a prior Forfeiture Date and all other Contributions
which were 100% vested when made.     (b)   The balance of the Participant’s
Account in excess of the amount in (a) above multiplied by his Vesting
Percentage.

     The Participant’s Vested Account is nonforfeitable.

     Vesting Break in Service means a Vesting Computation Period in which an
Employee is credited with 500 or fewer Hours-of-Service. An Employee incurs a
Vesting Break in Service on the last day of a Vesting Computation Period in
which he has a Vesting Break in Service.

     Vesting Computation Period means a consecutive 12-month period ending on
the last day of each Plan Year, including corresponding consecutive 12-month
periods before October 1, 1996.

     Vesting Percentage means the percentage used to determine the
nonforfeitable portion of a Participant’s Account attributable to Employer
Contributions which were not 100% vested when made.

     A Participant’s Vesting Percentage is shown in the following schedule
opposite the number of whole years of his Vesting Service.

          VESTING SERVICE   VESTING (whole years)   PERCENTAGE      
Less than 3
    0  
3 or more
    100  

 

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     The Vesting Percentage for a Participant who is an Employee on or after the
date he reaches Normal Retirement Age shall be 100%. The Vesting Percentage for
a Participant who is an Employee on the date he becomes Totally and Permanently
Disabled or dies shall be 100%. With respect to Matching Contributions only, the
Vesting Percentage for a Participant who is permanently laid-off from
Manufacturing Distribution or Finishing Facility shall be 100%.

     If the schedule used to determine a Participant’s Vesting Percentage is
changed, the new schedule shall not apply to a Participant unless he is credited
with an Hour-of-Service on or after the date of the change and the Participant’s
nonforfeitable percentage on the day before the date of the change is not
reduced under this Plan. The amendment provisions of the AMENDMENTS SECTION of
Article X regarding changes in the computation of the Vesting Percentage shall
apply.

     Vesting Service means one year of service for each Vesting Computation
Period in which an Employee is credited with at least 1,000 Hours-of-Service.

     However, Vesting 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. For purposes of crediting
Hours-of-Service during the Period of Military Duty, an Hour-of-Service shall be
credited (without regard to the 501 Hour-of-Service limitation) for each hour an
Employee would normally have been scheduled to work for the Employer during such
period.

     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.

     Yearly Date means October 1, 1996, and each following January 1.

     Years of Service means an Employee’s Vesting Service disregarding any
modifications which exclude service.

ARTICLE II

PARTICIPATION

SECTION 2.01—ACTIVE PARTICIPANT.

  (a)   For purposes of Contributions other than Discretionary Contributions, an
Employee shall first become an Active Participant (begin active participation in
the Plan) on the earliest Monthly Date on which he is an Eligible Employee and
has met both of the eligibility requirements set

 

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      forth below. This date is his Entry Date.

  (1)   Eligibility Service

  He has completed one year of Eligibility Service with 1,000 Hours-of-Service
before his Entry Date for all purposes except eligibility for Discretionary
Contributions.        or     (b)   He has completed three consecutive months of
Eligibility Service with 250 Hours-of-Service (earned within that 3 month
period) before his Entry Date.

  (2)   He is age 21 or older.

      For purposes of Discretionary Contributions, an Employee shall first
become an Active Participant (begin active participation in the Plan) on the
earliest Monthly 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 for
purposes of Discretionary Contributions only.

  (1)   He has completed one year of Eligibility Service with 1,000
Hours-of-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,
2002, shall continue to be an Active Participant if he is still an Eligible
Employee on January 1, 2003, 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.         For purposes of the
foregoing paragraphs, eligibility and Entry Dates shall be determined separately
for Discretionary Contributions and all Contributions other than Discretionary
Contributions.     (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.

 

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  (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     (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, 2002, shall continue to be an Inactive Participant on
January 1, 2003. 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.

 

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     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   DATE OF ADOPTION
OshKosh B’Gosh, Inc.
  January 1, 2000
OshKosh B’Gosh Retail, Inc.
  January 1, 2000
OBG Product Development and Sales, Inc.
  September 1, 2000
OBG Distribution Company, LLC
  September 1, 2000
OBG Manufacturing Company
  September 1, 2000

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 Monthly Date occurs. In order for the elective
deferral agreement to become effective on this date, it must be entered into
prior to a date specified by the Plan Administrator.         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.

 

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      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.         Matching Contributions
are calculated based on Elective Deferral Contributions and Compensation for the
month. Matching Contributions shall be made for all persons who were Active
Participants at any time during that month.         Any percentage determined by
the Employer shall apply to all eligible persons for the entire Plan Year.    
    Matching Contributions are subject to the Vesting Percentage.     (c)  
Discretionary Contributions may be made for each Plan Year in an amount
determined by the Employer.         Discretionary Contributions are subject to
the Vesting Percentage.

     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.

     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 Eligible Employee or an Inactive
Participant if the

 

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

     If the Eligible Employee is not an Active Participant when the Rollover
Contribution is made, he shall be deemed to be an Active Participant only for
the purpose of investment and distribution of the Rollover Contribution.
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.

     Rollover Contributions made by an Eligible Employee or an Inactive
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.

     The Nonvested Account of a Participant shall be forfeited as of the earlier
of the following:

  (a)   the date the Participant dies (if prior to such date he had ceased to be
an Employee), or     (b)   the Participant’s Forfeiture Date.

All or a portion of a Participant’s Nonvested Account shall be forfeited before
such earlier date if, after he ceases to be an Employee, he receives, or is
deemed to receive, a distribution of his entire Vested Account or a distribution
of his Vested Account derived from Employer Contributions which were not 100%
vested when made, under the RETIREMENT BENEFITS SECTION of Article V, the VESTED
BENEFITS SECTION of Article V, or the SMALL AMOUNTS SECTION of Article X. The
forfeiture shall occur as of the date the Participant receives, or is deemed to
receive, the distribution. If a Participant receives, or is deemed to receive,
his entire Vested Account, his entire Nonvested Account shall be forfeited. If a

 

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Participant receives a distribution of his Vested Account from Employer
Contributions which were not 100% vested when made, but less than his entire
Vested Account from such Contributions, the amount to be forfeited shall be
determined by multiplying his Nonvested Account from such Contributions by a
fraction. The numerator of the fraction is the amount of the distribution
derived from Employer Contributions which were not 100% vested when made and the
denominator of the fraction is his entire Vested Account derived from such
Contributions on the date of distribution.

     A Forfeiture shall also 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. Any other Forfeitures 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.

     If a Participant again becomes an Eligible Employee after receiving a
distribution which caused all or a portion of his Nonvested Account to be
forfeited, he shall have the right to repay to the Plan the entire amount of the
distribution he received (excluding any amount of such distribution resulting
from Contributions which were 100% vested when made). The repayment must be made
in a single sum (repayment in installments is not permitted) before the earlier
of the date five years after the date he again becomes an Eligible Employee or
the end of the first period of five consecutive Vesting Breaks in Service which
begin after the date of the distribution.

     If the Participant makes the repayment above, the Plan Administrator shall
restore to his Account an amount equal to his Nonvested Account which was
forfeited on the date of distribution, unadjusted for any investment gains or
losses. If no amount is to be repaid because the Participant was deemed to have
received a distribution, or only received a distribution of Contributions which
were 100% vested when made, and he again performs an Hour-of-Service as an
Eligible Employee within the repayment period, the Plan Administrator shall
restore the Participant’s Account as if he had made a required repayment on the
date he performed such Hour-of-Service. Restoration of the Participant’s Account
shall include restoration of all Code Section 411(d)(6) protected benefits with
respect to that restored Account, according to applicable Treasury regulations.
Provided, however, the Plan Administrator shall not restore the Nonvested
Account if (i) a Forfeiture Date has occurred after the date of the distribution
and on or before the date of repayment and (ii) that Forfeiture Date would
result in a complete forfeiture of the amount the Plan Administrator would
otherwise restore.

     The Plan Administrator shall restore the Participant’s Account by the close
of the Plan Year following the Plan Year in which repayment is made. Permissible
sources for the restoration of the Participant’s Account are Forfeitures or
special Employer Contributions. Such special Employer Contributions shall be
made without regard to profits. The repaid and restored amounts are not included
in the Participant’s Annual Additions, as defined in the CONTRIBUTION LIMITATION
SECTION of this article.

 

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SECTION 3.03—ALLOCATION.

     A person meets the allocation requirements of this section if he is an
Active Participant on the last day of the Plan Year. A person shall also meet
the requirements of this section if he was an Active Participant at any time
during the Plan Year and terminates employment during the year after Normal
Retirement Age (or age 60 with 10 years of Vesting Service), death, or becoming
Totally and Permanently Disabled.

     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.

     Discretionary Contributions shall be allocated as of the last day of the
Plan Year using Annual Compensation for the Plan Year. The amount allocated
shall be determined as follows:

     STEP ONE: The step one shall only apply in years in which the Plan is a
Top-heavy Plan, as defined in the DEFINITIONS SECTION of Article XI, and the
minimum contribution under the MODIFICATION OF CONTRIBUTIONS SECTION of
Article XI is not being provided by other contributions to this Plan or another
plan of the Employer.

The allocation in this step one shall be made to each person meeting the
allocation requirements of this section and each person who is entitled to a
minimum contribution under the MODIFICATION OF CONTRIBUTIONS SECTION of
Article XI. Each such person’s allocation shall be an amount equal to the
Discretionary Contributions multiplied by the ratio of such person’s Annual
Compensation to the total Aannual Compensation of all such persons. Such amount
shall not exceed 3% of such person’s Annual Compensation. The allocation for any
person who does not meet the allocation requirements of this section shall be
limited to the amount necessary to fund the minimum contribution.

STEP TWO: The allocation in this step two shall be made to each person meeting
the allocation requirements of this section. Each such person’s allocation shall
be equal to any amount remaining after the allocation in step one multiplied by
the ratio of such person’s Annual Compensation to the total Annual Compensation
of all such persons.

The amount shall be credited to the person’s Account.

     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

 

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      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(l)(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.         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 Contribution Dollar Limitation means, for Limitation Years
beginning after

 

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     December 31, 1994, $30,000, as adjusted under Code Section 415(d).

     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 (as 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.

     Limitation Year means the consecutive 12-month period ending on each
December 31. 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(l)(1) or 419A(d)(2).

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

  (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(l)(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

 

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      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:        (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

 

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      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, 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 Participant 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
plans 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

 

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     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.

     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

 

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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 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

 

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(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.

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.

 

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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.

  (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 Plan 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:

 

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  (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:

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 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.

 

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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 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).

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 loss 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.

 

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

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

 

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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.

(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

 

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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. 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).

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

 

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      the income or loss allocable to the Participant’s Contribution Percentage
Amounts for the Plan 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.

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, or 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

 

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short-term and long-term financial needs so the investment policy can be
coordinated with the Plan’s financial requirements.

  (a)   Employer Contributions other than Elective Deferral Contributions: The
Participant shall direct the investment of such Employer Contributions and
transfer of amounts resulting from those Contributions.     (b)   Elective
Deferral Contributions: The Participant shall direct the investment of Elective
Deferral Contributions and transfer of amounts resulting from those
Contributions.     (c)   Rollover Contributions: The Participant shall direct
the investment of Rollover Contributions and transfer of amounts resulting from
those Contributions.

     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 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.

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 of 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

 

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to be an Employee. The Participant’s election shall be subject to his spouse’s
consent as provided in the ELECTION PROCEDURES SECTION of Article VI. 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.

     The Nonvested Account of an Inactive Participant who has ceased to be an
Employee shall remain a part of his Account until it becomes a Forfeiture.
However, if he again becomes an Employee so that his Vesting Percentage can
increase, the Nonvested Account may become a part of his Vested Account.

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.    
    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 may not be distributed to a Participant or to his Beneficiary (or
Beneficiaries) in accordance with the

 

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      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. A lump sum shall include a distribution of
an annuity contract.

SECTION 5.05—WITHDRAWAL BENEFITS.

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

     Elective Deferral Contributions

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. 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

 

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necessary to pay any Federal, state, or local income taxes or penalties
reasonably anticipated to result from the distribution); (ii) 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 6 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 6 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. Loans shall only be made from a Participant’s Vested Account
resulting from Elective Deferral Contributions, Rollover Contributions, and
Matching Contributions. Loans shall be made available only in the event of
hardship due to an immediate and heavy financial need. Immediate and heavy
financial need shall be limited to (i) medical expenses described in Code
Section 213(d) incurred by 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 for the next semester or quarter 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. The Participant’s request for a loan shall include his written
statement that an immediate and heavy financial need exists and explain its
nature.

     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 the
outstanding stock of the corporation.

     A loan to a Participant shall be a Participant-directed investment of his
Account. The loan is a Trust

 

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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 not be limited. 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 attributable to Elective
Deferral Contributions, Rollover Contributions, and Matching Contributions.    
(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, reduced by 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). 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

 

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extend beyond five years from the date of the loan. The period of repayment for
any loan shall be arrived at 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 than 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.

 

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     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 or until the Participant’s
fifth anniversary of 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, 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

 

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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.

     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).

ARTICLE VI

DISTRIBUTION OF BENEFITS

SECTION 6.01—FORM OF DISTRIBUTION.

     Unless an optional form of benefit is selected pursuant to a qualified
election within the election period (see the ELECTION PROCEDURES SECTION of this
article), the automatic form of benefit payable to or on behalf of a Participant
is determined as follows:

(a)   Retirement Benefits. Prior to February 1, 2004, single sum and
installments are allowed. Effective as of February 1, 2004, the Plan is being
amended to eliminate installments as an optional form of

 

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    distribution and the Plan provides a single sum distribution form that is
otherwise identical to the optional form of distribution eliminated or
restricted. 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 (ii) the first
day of the second Plan Year following the Plan Year in which the amendment is
adopted.   (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.

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

Consent to Election. If the Participant’s Vested Account exceeds $5,000, any
benefit which is
     immediately distributable requires the consent of the Participant.

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 than 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. 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.

 

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     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.

  (c)   Designation of Beneficiary. Spousal consent is needed to name a
Beneficiary other than 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 than 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.

ARTICLE VII

DISTRIBUTION REQUIREMENTS

SECTION 7.01—APPLICATION.

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

SECTION 7.02—DEFINITIONS.

 

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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 5-percent Owner for purposes of
this article if such Participant becomes a 5-percent Owner in a later Plan Year.
Such Participant’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 after a calendar year that
begins after the later of December 31, 1998, or the adoption date of the
amendment which eliminated such option. The preretirement age 70 1/2
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 70 1/2 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.

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).

 

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(3) With respect to distributions under the Plan made on or after June 14, 2001,
for calendar years beginning on or after January 1, 2001, 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 (the 2001 Proposed Regulations), notwithstanding any provision
of the Plan to the contrary. If the total amount of required minimum
distributions made to a Participant for 2001 prior to June 14, 2001, are equal
to or greater than the amount of required minimum distributions determined under
the 2001 Proposed Regulations, then no additional distributions are required for
such Participant for 2001 on or after such date. If the total amount of required
minimum distributions made to a Participant for 2001 prior to June 14, 2001, are
less than the amount determined under the 2001 Proposed Regulations, then the
amount of required minimum distributions for 2001 on or after such date will be
determined so that the total amount of required minimum distributions for 2001
is the amount determined under the 2001 Proposed Regulations. These provisions
shall continue in effect until 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 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.

ARTICLE VIII

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

     A Participant’s Account resulting from such Contributions may be
distributed upon complete

 

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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) or 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.

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 or 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,

 

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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.

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

 

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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 the 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 (or 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.

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.

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.

 

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     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 condition 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     (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

 

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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 Distributee in a Direct Rollover.

     Any part of a distribution made under the SMALL AMOUNTS SECTION of this
article (or which is a small amounts payment made under Article VIII at complete
termination of the Plan) which is an Eligible Rollover Distribution, which is
equal to or more than $1,000, and for which the Distributee has not elected to
either have such distribution paid to him or to an Eligible Retirement Plan
shall be rolled over to an Individual Retirement Account (IRA) with an affiliate
of Principal Life Insurance Company. Such amounts shall be initially invested in
the Principal Investor Funds Money Market Fund. The Distributee shall have the
option to change the investment after the IRA has been established.

     Any part of a distribution made under the SMALL AMOUNTS SECTION of this
article (or which is a small amounts payment made under Article VIII at complete
termination of the Plan) which is an Eligible Rollover Distribution, which is
less than $1,000, 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.

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 the 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

 

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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 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(l), 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 401(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).

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.

 

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     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 out 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.

     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 designation form on file, or if the designated
Beneficiary predeceases the

 

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Participant, any death benefits under the Plan payable to the Beneficiary will
be distributed in the following order of priority:

  (a)   to the surviving spouse; or, if none     (b)   to the surviving issue
(per stirpes and not per capita); or, if none     (c)   to the surviving parents
equally, or, if one is deceased, to the survivor of them; or, if none     (d)  
to the estate of the Participant.

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 August 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 held 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; nor 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

 

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a single sum as of the earliest of his Retirement Date, the date he dies, or the
date he ceases to be an Employee for any other reason (the date the Employer
provides notice to the record keeper of the Plan of such event, if later). For
purposes of this section, if the Participant’s Vested Account is zero, the
Participant shall be deemed to have received a distribution of such Vested
Account. If a Participant would have received a distribution under the first
sentence of this 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

 

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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.

(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.

 

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     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.

     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).

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

 

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      Year containing the Determination Date (regardless of whether the plan was
terminated) or one of the four preceding Plan Years,     (b)   each of the
Employer’s 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.

     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.

 

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     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.     (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 plans for
all participants as of the Determination Date(s), all determined in accordance
with Code Section 416 and the regulations

 

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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. 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.

     If a Participant’s Vesting Percentage determined under Article I is not at
least as great as his Vesting Percentage would be if it were determined under a
schedule permitted in Code Section 416, the following shall apply. During any
Plan Year in which the Plan is a Top-heavy Plan, the Participant’s Vesting
Percentage shall be the greater of the Vesting Percentage determined under
Article I or the schedule below.

      VESTING SERVICE   NONFORFEITABLE (whole years)   PERCENTAGE.   Less than 3
  0 3 or more   100

     The schedule above shall not apply to Participants who are not credited
with an Hour-of-Service after the Plan first becomes a Top-heavy Plan. The
Vesting Percentage determined above applies to the portion of the Participant’s
Account which is multiplied by a Vesting Percentage to determine his Vested
Account, including benefits accrued before the effective date of Code
Section 416 and benefits accrued before this Plan became a Top-heavy Plan.

     If, in a later Plan Year, this Plan is not a Top-heavy Plan, a
Participant’s Vesting Percentage shall be determined under Article I. A
Participant’s Vesting Percentage determined under either Article I or the
schedule above shall never be reduced and the election procedures of the
AMENDMENTS SECTION of Article X shall apply when changing to or from the
schedule as though the automatic change were the result of an amendment.

 

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     The part of the Participant’s Vested Account resulting from the minimum
contributions required pursuant 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 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 case 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 shall be 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 applies to all of the Employer’s defined
contribution plans in the aggregate which are Top-heavy Plans. A minimum
contribution under a profit sharing plan shall be made without regard to whether
or not the Employer has profits.

     If a person who is otherwise entitled to a minimum contribution 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 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

 

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adjusted to, a straight life basis equal to the lesser of:

  (c)   2 percent of his average compensation multiplied by his years of
service, or     (d)   20 percent of his average compensation.

Average compensation and years of service shall have the meaning set forth in
such defined benefit plan for this purpose. The Employer’s profit sharing plan
shall provide a minimum contribution of 5 percent of such Participant’s
Compensation for the Plan Year.

     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.

     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 31 day of December       , 2003

         
 
  OSHKOSH B’GOSH, INC.    
 
       

  By: /S/ DAVID L. OMACHINSKI    

       

  Exec VP, COO, CFO & Treasurer    

       

  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.

         
 
  OSHKOSH B’GOSH, INC.    
 
       

  By: /S/ DAVID L. OMACHINSKI    

       

  Exec VP, COO, CFO & Treasurer    

       

  Title    

  12-31-03    

       

  Date    

 

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  OSHKOSH B’GOSH, RETAIL, INC.    
 
       

  By: /S/ DAVID L. OMACHINSKI    

       

  Exec VP, COO, CFO & Treasurer    

       

  Title    

  12-31-03    

       

  Date    
 
       

  OBG PRODUCT DEVELOPMENT AND SALES, INC.    
 
       

  By: /S/ DAVID L. OMACHINSKI    

       

  Exec VP, COO, CFO & Treasurer    

       

  Title    

  12-31-03    

       

  Date    
 
       

  OBG DISTRIBUTION COMPANY, LLC    
 
       

  By: /S/ DAVID L. OMACHINSKI    

       

  Exec VP, COO, CFO & Treasurer    

       

  Title    

  12-31-03    

       

  Date    
 
       

  OBG MANUFACTURING COMPANY    
 
       

  By: /S/ DAVID L. OMACHINSKI    

       

  Exec VP, COO, CFO & Treasurer    

       

  Title    

  12-31-03    

       

  Date    

MODEL AMENDMENT TO COMPLY WITH THE 401(a)(9) FINAL AND TEMPORARY REGULATIONS

Plan Name OSHKOSH B’GOSH, INC. 401(k) PLAN

The Plan named above gives the Employer the right to amend it at any time.
According to that right, the Plan is amended by adopting the model amendment set
forth below.

The plan’s existing minimum distribution provisions are superseded to the extent
they are inconsistent with

 

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the provisions of this model amendment, but those provisions that are not
inconsistent (such as the plan’s definition of required beginning date) shall be
retained. The plan’s minimum distribution provisions are amended as follows:

ARTICLE VII. MINIMUM DISTRIBUTION REQUIREMENTS.

Section 1. General Rules

1.1.   Effective Date. The provisions of this article will apply for purposes of
determining required minimum distributions for calendar years beginning with the
2003 calendar year.   1.2.   Coordination with Minimum Distribution Requirements
Previously in Effect. This amendment is not effective until calendar years
beginning with the 2003 calendar year, therefore, no coordination is required.  
1.3.   Precedence. The requirements of this article will take precedence over
any inconsistent provisions of the plan.   1.4.   Requirements of Treasury
Regulations Incorporated. All distributions required under this article will be
determined and made in accordance with the Treasury regulations under section
401(a)(9) of the Internal Revenue Code.   1.5.   TEFRA Section 242(b)(2)
Elections. Notwithstanding the other provisions of this article, distributions
may be made under a designation made before January 1, 1984, in accordance with
section 242(b)(2) of the Tax Equity and Fiscal Responsibility Act (TEFRA) and
the provisions of the plan that relate to section 242(b)(2) of TEFRA.

Section 2. Time and Manner of Distribution.

2.1.   Required Beginning Date. The participant’s entire interest will be
distributed, or begin to be distributed, to the participant no later than the
participant’s required beginning date.   2.2.   Death of Participant Before
Distributions Begin. If the participant dies before distributions begin, the
participant’s entire interest will be distributed, or begin to be distributed,
no later than as follows:

  (a)   If the participant’s surviving spouse is the participant’s sole
designated beneficiary, then distributions to the surviving spouse will begin by
December 31 of the calendar year immediately following the calendar year in
which the participant died, or by December 31 of the calendar year in which the
participant would have attained age 70 1/2 if later, except to the extent that
an election is made to receive distributions in accordance with the 5-year rule.
Under the 5-year rule, the participant’s entire interest will be distributed to
the designated beneficiary by December 31 of the calendar year containing the
fifth anniversary of the participant’s death.     (b)   If the participant’s
surviving spouse is not the participant’s sole designated beneficiary, then
distributions to the designated beneficiary will begin by December 31 of the
calendar year immediately following the calendar year in which the participant
died, except to the extent that an election is made to receive distributions in
accordance with the 5-year rule. Under the 5-year rule,

 

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      the participant’s entire interest will be distributed to the designated
beneficiary by December 31 of the calendar year containing the fifth anniversary
of the participant’s death.     (c)   If there is no designated beneficiary as
of September 30 of the year following the year of the participant’s death, the
participant’s entire interest will be distributed by December 31 of the calendar
year containing the fifth anniversary of the participant’s death.     (d)   If
the participant’s surviving spouse is the participant’s sole designated
beneficiary and the surviving spouse dies after the participant but before
distributions to the surviving spouse begin, this section 2.2, other than
section 2.2(a), will apply as if the surviving spouse were the participant.

For purposes of this section 2.2 and section 4, unless section 2.2(d) applies,
distributions are considered to begin on the participant’s required beginning
date. If section 2.2(d) applies, distributions are considered to begin on the
date distributions are required to begin to the surviving spouse under section
2.2(a). If distributions under an annuity purchased from an insurance company
irrevocably commence to the participant before the participant’s required
beginning date (or to the participant’s surviving spouse before the date
distributions are required to begin to the surviving spouse under section
2.2(a)), the date distributions are considered to begin is the date
distributions actually commence.

2.3.   Forms of Distribution. Unless the participant’s interest is distributed
in the form of an annuity purchased from an insurance company or in a single sum
on or before the required beginning date, as of the first distribution calendar
year distributions will be made in accordance with sections 3 and 4 of this
article. If the participant’s interest is distributed in the form of an annuity
purchased from an insurance company, distributions thereunder will be made in
accordance with the requirements of section 401(a)(9) of the Code and the
Treasury regulations.

Section 3. Required Minimum Distributions During Participant’s Lifetime.

3.1.   Amount of Required Minimum Distribution For Each Distribution Calendar
Year. During the participant’s lifetime, the minimum amount that will be
distributed for each distribution calendar year is the lesser of:

  (a)   the quotient obtained by dividing the participant’s account balance by
the         distribution period in the Uniform Lifetime Table set forth in
section 1.401(a)(9)-9 of the Treasury regulations, using the participant’s age
as of the participant’s
birthday in the distribution calendar year; or     (b)   if the participant’s
sole designated beneficiary for the distribution calendar year is the
participant’s spouse, the quotient obtained by dividing the participant’s
account balance by the number in the Joint and Last Survivor Table set forth in
section 1.401(a)(9)-9 of the Treasury regulations, using the participant’s and
spouse’s attained ages as of the participant’s and spouse’s birthdays in the
distribution calendar year.

3.2.   Lifetime Required Minimum Distributions Continue Through Year of
Participant’s Death. Required minimum distributions will be determined under
this section 3 beginning with the first distribution calendar year and up to and
including the distribution calendar year that includes the participant’s date

 

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of death.

Section 4. Required Minimum Distributions After Participant’s Death.

4.1.   Death On or After Date Distributions Begin.

  (a)   Participant Survived by Designated Beneficiary. If the participant dies
on or after the date distributions begin and there is a designated beneficiary,
the minimum amount that will be distributed for each distribution calendar year
after the year of the participant’s death is the quotient obtained by dividing
the participant’s account balance by the longer of the remaining life expectancy
of the participant or the remaining life expectancy of the participant’s
designated beneficiary, determined as follows:

  (1)   The participant’s remaining life expectancy is calculated using the age
of the participant in the year of death, reduced by one for each subsequent
year.     (2)   If the participant’s surviving spouse is the participant’s sole
designated beneficiary, the remaining life expectancy of the surviving spouse is
calculated for each distribution calendar year after the year of the
participant’s death using the surviving spouse’s age as of the spouse’s birthday
in that year. For distribution calendar years after the year of the surviving
spouse’s death, the remaining life expectancy of the surviving spouse is
calculated using the age of the surviving spouse as of the spouse’s birthday in
the calendar year of the spouse’s death, reduced by one for each subsequent
calendar year.     (3)   If the participant’s surviving spouse is not the
participant’s sole designated beneficiary, the designated beneficiary’s
remaining life expectancy is calculated using the age of the beneficiary in the
year following the year of the participant’s death, reduced by one for each
subsequent year.

  (b)   No Designated Beneficiary. If the participant dies on or after the date
distributions begin and there is no designated beneficiary as of September 30 of
the year after the year of the participant’s death, the minimum amount that will
be distributed for each distribution calendar year after the year of the
participant’s death is the quotient obtained by dividing the participant’s
account balance by the participant’s remaining life expectancy calculated using
the age of the participant in the year of death, reduced by one for each
subsequent year.

4.2. Death Before Date Distributions Begin.

  (a)   Participant Survived by Designated Beneficiary. If the participant dies
before the date distributions begin and there is a designated beneficiary, the
minimum amount that will be distributed for each distribution calendar year
after the year of the participant’s death is the quotient obtained by dividing
the participant’s account balance by the remaining life expectancy of the
participant’s designated beneficiary, determined as provided in section 4.1,
except to the extent that an election is made to receive distributions in
accordance with the 5-year rule. Under the 5-year rule, the participant’s entire
interest will be distributed to the designated beneficiary by December 31 of the
calendar year containing the fifth anniversary of the participant’s death.

 

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  (b)   No Designated Beneficiary. If the participant dies before the date
distributions begin and there is no designated beneficiary as of September 30 of
the year following the year of the participant’s death, distribution of the
participant’s entire interest will be completed by December 31 of the calendar
year containing the fifth anniversary of the participant’s death.     (c)  
Death of Surviving Spouse Before Distributions to Surviving Spouse Are Required
to Begin. If the participant dies before the date distributions begin, the
participant’s surviving spouse is the participant’s sole designated beneficiary,
and the surviving spouse dies before the distributions are required to begin to
the surviving spouse under section 2.2(a), this section 4.2 will apply as if the
surviving spouse were the participant.

Section 5. Definitions.

5.1.   Designated Beneficiary. The individual who is designated as the
beneficiary under the BENEFICIARY SECTION of Article X of the plan and is the
designated beneficiary under section 401(a)(9) of the Internal Revenue Code and
section 1.401(a)(9)-1, Q&A-4, of the Treasury regulations.   5.2.   Distribution
Calendar Year. A calendar year for which a minimum distribution is required. For
distributions beginning before the participant’s death, the first distribution
calendar year is the calendar year immediately preceding the calendar year which
contains the participant’s required beginning date. For distributions beginning
after the participant’s death, the first distribution calendar year is the
calendar year in which distributions are required to begin under section 2.2.
The required minimum distribution for the participant’s first distribution
calendar year will be made on or before the participant’s required beginning
date. The required minimum distribution for other distribution calendar years,
including the required minimum distribution for the distribution year in which
the participant’s required beginning date occurs, will be made on or before
December 31 of that distribution calendar year.   5.3.   Life Expectancy. Life
expectancy as computed by use of the Single Life Table in section 1.401(a)(9)-9
of the Treasury regulations.   5.4.   Participant’s Account Balance. The account
balance as of the last valuation date in the calendar year immediately preceding
the distribution calendar year (valuation calendar year) increased by the amount
of any contributions made and allocated or forfeitures allocated to the account
balance as of dates in the valuation calendar year after the valuation date and
decreased by distributions made in the valuation calendar year after the
valuation date. The account balance for the valuation calendar year includes any
amounts rolled over or transferred to the plan either in the valuation calendar
year or in the distribution calendar year if distributed or transferred in the
valuation calendar year.   5.5.   Required Beginning Date. The date specified in
the DEFINITIONS SECTION of Article VII of the plan.

Section 6. Election to Allow Participants or Beneficiaries to Elect 5-Year Rule.

Participants or beneficiaries may elect on an individual basis whether the
5-year rule or the life expectancy rule in sections 2.2 and 4.2 of Article VII
of the plan applies to distributions after the death

 

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of a participant who has a designated beneficiary. The election must be made no
later than the earlier of September 30 of the calendar year in which
distribution would be required to begin under section 2.2 of Article VII of the
plan, or by September 30 of the calendar year which contains the fifth
anniversary of the participant’s (or, if applicable, surviving spouse’s) death.
If neither the participant nor beneficiary makes an election under this
paragraph, distributions will be made in accordance with the life expectancy
rule under sections 2.2 and 4.2 of Article VII of the plan.

Section 7. Election to Allow Designated Beneficiary Receiving Distributions
Under 5-Year Rule to Elect Life Expectancy Distributions.

A designated beneficiary who is receiving payments under the 5-year rule may
make a new election to receive payments under the life expectancy rule until
December 31, 2003, provided that all amounts that would have been required to be
distributed under the life expectancy rule for all distribution calendar years
before 2004 are distributed by the earlier of December 31, 2003 or the end of
the 5-year period.

This amendment is made an integral part of the aforesaid Plan and is controlling
over the terms of said Plan with respect to the particular items addressed
expressly therein. All other provisions of the Plan remain unchanged and
controlling.

Unless otherwise stated on any page of this amendment, eligibility for benefits
and the amount of any benefits payable to or on behalf of an individual who is
an inactive participant on the effective date(s) stated above, shall be
determined according to the provisions of the aforesaid Plan as in effect on the
day before he became an inactive participant.

Signing this amendment, the Employer, as plan sponsor, has made the decision to
adopt this plan amendment. The Employer is acting in reliance on its own
discretion and on the legal and tax advice of its own advisors, and not that of
any member of the Principal Financial Group or any representative of a member
company of the Principal Financial Group.

         
 
  For the Employer,    
 
       

  By: /S/ PAUL CHRISTENSEN    

       

  Vice President Human Resources    

  Business Title    

  February 11, 2004    

       

  Date    

       
 
       
(4-49731)-1
       

GOOD FAITH COMPLIANCE AMENDMENT FOR THE

 

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ECONOMIC GROWTH AND TAX RELIEF RECONCILIATION ACT OF 2001 (EGTRRA)

This amendment of the Plan is adopted to reflect certain provisions of the
Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA). This
amendment is intended as good faith compliance with the requirements of EGTRRA
and is to be construed in accordance with EGTRRA and guidance issued thereunder.
Except as otherwise provided, this amendment shall be effective as of the first
day of the first Plan Year beginning after December 31, 2001. This amendment
shall continue to apply to the Plan, including the Plan as later amended, until
such provisions are integrated into the Plan or the good faith compliance EGTRRA
amendment provisions are specifically amended.

This amendment shall supersede the provisions of the Plan to the extent those
provisions are inconsistent with the provisions of this amendment.

OSHKOSH B’ GOSH, INC. 401(k) PLAN

The Plan named above gives the Employer the right to amend it at any time.
According to that right, the Plan is amended as follows:

INCREASE IN COMPENSATION LIMIT

For Plan Years beginning on and after January 1, 2002, the annual Compensation
of each Participant taken into account for determining all benefits provided
under the Plan for any determination period shall not exceed $200,000, 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 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, 2002, the annual Compensation limit in effect
for determination periods beginning before that date is $200,000.

LIMITATIONS ON CONTRIBUTIONS

Effective date. This section shall be effective for Limitation Years beginning
after December 31, 2001.

Maximum Annual Addition. Except to the extent permitted in the Catch-up
Contributions section of this amendment that provides for catch-up contributions
under EGTRRA section 631 and Code Section 414(v), if applicable, the Annual
Addition that may be contributed or allocated to a Participant’s Account under
the Plan for any Limitation Year shall not exceed the lesser of:

$40,000, as adjusted for increases in the cost-of-living under Code
Section 415(d), or

100 percent of the Participant’s Compensation, for the Limitation Year.

The compensation limitation referred to in (b) shall not apply to any
contribution for medical benefits after separation from service (within the
meaning of Code Section 401(h) or 419A(f)(2)) which is

 

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otherwise treated as an Annual Addition.

ELECTIVE DEFERRALS — CONTRIBUTION LIMITATION

No Participant shall be permitted to have Elective Deferral Contributions, as
defined in the EXCESS AMOUNTS Section, 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 for such
taxable year, except to the extent permitted in the Catch-up Contributions
section of this amendment that provides for catch-up contributions under EGTRRA
section 631 and Code Section 414(v), if applicable.

CATCH-UP CONTRIBUTIONS

Effective Date. This section shall apply to Contributions received after
December 31, 2001.

Catch-up Contributions. All employees who are eligible to make Elective Deferral
Contributions under this Plan and who have attained age 50 before the close of
the Plan Year shall be eligible to make catch-up contributions in accordance
with, and subject to the limitations of, Code Section 414(v), unless otherwise
specified below. Such catch-up contributions shall not be taken into account for
purposes of the provisions of the Plan implementing the required limitations of
Code Sections 402(g) and 415. The Plan shall not be treated as failing to
satisfy the provisions of the Plan implementing the requirements of Code
Section 401(k)(3), 401(k)(11), 401(k)(12), 410(b), or 416, as applicable, by
reason of the making of such catch-up contributions.

DIRECT ROLLOVERS OF PLAN DISTRIBUTIONS

Effective date. This section shall apply to distributions made after
December 31, 2001. The provisions of the second modification of this section
shall not apply if the Plan does not provide for hardship distributions. The
provisions of the third modification of this section shall not apply if the Plan
does not have after-tax employee contributions.

Modification of definition of Eligible Retirement Plan. For purposes of the
DIRECT ROLLOVER Section, an Eligible Retirement Plan shall also mean an annuity
contract described in Code Section 403(b) and an eligible plan under Code
Section 457(b) which is maintained by a state, political subdivision of a state,
or any agency or instrumentality of a state or political subdivision of a state
and which agrees to separately account for amounts transferred into such plan
from this Plan. The definition of Eligible Retirement Plan shall also apply in
the case of a distribution to a surviving spouse, or to a spouse or former
spouse who is the alternate payee under a qualified domestic relations order, as
defined in Code Section 414(p).

Modification of definition of Eligible Rollover Distribution to exclude hardship
distributions. For purposes of the DIRECT ROLLOVER Section, any amount that is
distributed on account of hardship shall not be an Eligible Rollover
Distribution and the Distributee may not elect to have any portion of such a
distribution paid directly to an Eligible Retirement Plan.

Modification of definition of Eligible Rollover Distribution to include
after-tax employee contributions. For purposes of the DIRECT ROLLOVER Section, a
portion of a distribution shall not fail to be an Eligible Rollover Distribution
merely because the portion consists of after-tax employee

 

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contributions which are not includible in gross income. However, such portion
may be transferred only to an individual retirement account or individual
retirement annuity described in Code Section 408(a) or (b), or to a qualified
defined contribution plan described in Code Section 401(a) or 403(a) that agrees
to separately account for amounts so transferred, including separately
accounting for the portion of such distribution which is includible in gross
income and the portion of such distribution which is not so includible.

ROLLOVERS FROM OTHER PLANS

The Plan will accept Participant Rollover Contributions and/or direct rollovers
of distributions made after December 31, 2001 from the types of plans specified
below beginning January 1, 2002. The Plan will accept all of the following
sources of rollovers, unless otherwise specified in (a) below.

Direct Rollovers

The Plan will accept a direct rollover of an Eligible Rollover Distribution
from:

     a qualified plan described in Code Section 401(a) or 403(a), including
after-tax employee contributions.

     an annuity contract described in Code Section 403(b), excluding after-tax
employee contributions.

     an eligible plan under Code Section 457(b) which is maintained by a state,
political subdivision of a state, or any agency or instrumentality of a state or
political subdivision of a state.

Participant Rollover Contributions from Other Plans

The Plan will accept a Participant contribution of an Eligible Rollover
Distribution from:

     a qualified plan described in Code Section 401(a) or 403(a).

     an annuity contract described in Code Section 403(b).

     an eligible plan under Code Section 457(b) which is maintained by a state,
political subdivision of a
          state, or any agency or instrumentality of a state or political
subdivision of a state.

Participant Rollover Contributions from IRAs

The Plan will accept a Participant Rollover Contribution of the portion of a
distribution from an individual retirement account or individual retirement
annuity described in Code Section 408(a) or (b) that is eligible to be rolled
over and would otherwise be includible in gross income.

The Plan will accept Participant Rollover Contributions and/or direct rollovers
of distributions made after December 31, 2001 from the types of plans specified
below beginning January 1, 2002. (Select any that apply.)

Direct Rollovers

The Plan will accept a direct rollover of an Eligible Rollover Distribution
from:

a qualified plan described in Code Section 401(a) or 403(a), excluding after-tax
employee contributions. (Cannot select if (i) is selected.)

an annuity contract described in Code Section 403(b), excluding after-tax
employee contributions.

 

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REPEAL OF MULTIPLE USE TEST

The multiple use test described in Treasury Regulation section 1.401(m)-2 and
the EXCESS AMOUNTS Section shall not apply for Plan Years beginning after
December 31, 2001.

DISTRIBUTION UPON SEVERANCE FROM EMPLOYMENT

Effective date. This section shall apply for distributions due to severance from
employment occurring after December 31, 2001 and distributions that are
processed after December 31, 2001 regardless of when the severance from
employment occurred.

New distributable event — Distribution Upon Severance From Employment. A
Participant’s Elective Deferral Contributions, Qualified Nonelective
Contributions, if any, Qualified Matching Contributions, if any, and earnings
attributable to these Contributions shall be distributed on account of the
Participant’s severance from employment. However, such a distribution shall be
subject to the other provisions of the Plan regarding distributions, other than
provisions that require a separation from service before such amounts may be
distributed.

SUSPENSION PERIOD FOLLOWING HARDSHIP DISTRIBUTION

The suspension period following a hardship distribution will be decreased,
unless otherwise specified in (a) below. A Participant who receives a
distribution of elective deferrals after December 31, 2001, on account of
hardship shall be prohibited from making elective deferrals and participant
contributions under this and all other plans of the Employer for six months
after receipt of the distribution. A Participant who receives a distribution of
elective deferrals in calendar year 2001 on account of hardship shall be
prohibited from making elective deferrals and participant contributions under
this and all other plans of the Employer for six months after receipt of the
distribution or until January 1, 2002, if later.

MODIFICATION OF TOP-HEAVY RULES

Effective date. This section shall apply for purposes of determining whether the
Plan is a Top-heavy Plan for Plan Years beginning after December 31, 2001, and
whether the Plan satisfies the minimum benefits requirements of Code
Section 416(c) for such years. This section amends the Top-heavy Plan
Requirements Article of the Plan.

Determination of top-heavy status.

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 is more
than $130,000 (as adjusted under Code Section 416(i)(1) for Plan Years beginning
after December 31, 2002),   b)   a 5-percent owner of the Employer, or   c)   a
1-percent owner of the Employer who has annual Compensation of more than
$150,000.

 

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The determination period is the Plan Year containing the Determination Date.

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

Determination of present values and amounts. This section shall apply for
purposes of determining the present values of accrued benefits and the amounts
of account balances of Employees as of the Determination Date.

Distributions during year ending on the Determination Date. The present values
of accrued benefits and the amounts of account balances of an Employee as of the
Determination Date shall be increased by the distributions made with respect to
the Employee under the Plan and any plan aggregated with the Plan under Code
Section 416(g)(2) during the one-year period ending on the Determination Date.
The preceding sentence shall also apply to distributions under a terminated plan
which, had it not been terminated, would have been aggregated with the Plan
under Code Section 416(g)(2)(A)(i). In the case of a distribution made for a
reason other than separation from service, death, or disability, this provision
shall be applied by substituting “five-year period” for “one-year period.”

Employees not performing services during year ending on the Determination Date.
The accrued benefits and accounts of any individual who has not performed
services for the Employer during the one-year period ending on the Determination
Date shall not be taken into account.

Minimum benefits.

Matching contributions. Employer matching contributions shall be taken into
account for purposes of satisfying the minimum contribution requirements of Code
Section 416(c)(2) and the Plan. The preceding sentence shall apply with respect
to Matching Contributions under the Plan or, if the Plan provides that the
minimum contribution requirement shall be met in another plan, such other plan.
Employer matching contributions that are used to satisfy the minimum
contribution requirements shall be treated as matching contributions for
purposes of the actual contribution percentage test and other requirements of
Code Section 401(m).

Contributions under other plans. The Employer may provide in the Plan that the
minimum benefit requirement shall be met in another plan (including another plan
that consists solely of a cash or deferred arrangement which meets the
requirements of Code Section 401(k)(12) and matching contributions with respect
to which the requirements of Code Section 401(m)(11) are met).

PLAN LOANS FOR OWNER-EMPLOYEES AND SHAREHOLDER EMPLOYEES

Effective for plan loans made after December 31, 2001, plan provisions
prohibiting loans to any shareholder-employee or Owner-employee shall cease to
apply.

This amendment is made an integral part of the aforesaid Plan and is controlling
over the terms of said Plan with respect to the particular items addressed
expressly therein. All other provisions of the Plan remain unchanged and
controlling.

Unless otherwise stated on any page of this amendment, eligibility for benefits
and the amount of any

 

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benefits payable to or on behalf of an individual who is an Inactive Participant
on the effective date(s) stated above, shall be determined according to the
provisions of the aforesaid Plan as in effect on the day before he became an
Inactive Participant.

Signing this amendment, the Employer, as plan sponsor, has made the decision to
adopt this plan amendment. The Employer is acting in reliance on its own
discretion and on the legal and tax advice of its own advisors, and not that of
any member of the Principal Financial Group or any representative of a member
company of the Principal Financial Group.

Signed this 31 day of December  , 2003.

         
 
  For the Employer    
 
       

  By /S/ DAVID L. OMACHINSKI    

       

  Title Exec VP, COO, CFO & Treasurer    

       

AMENDMENT TO ADD TRANSACTION PROCESSING SECTION

OSHKOSH B’GOSH, INC. 401(K) PLAN

The Plan named above gives the Employer the right to amend it at any time.
According to that right, the Plan is amended effective as of the signature date
below, as follows:

By adding to the Table of Contents the following Section 9.08:

Section 9.08 —— Transaction Processing

By adding the following Section 9.08 to Article IX:

SECTION 9.08—TRANSACTION PROCESSING.

Transactions (including, but not limited to, investment directions, trades,
loans, and distributions) shall be processed as soon as administratively
practicable after proper directions are received from the Participant or such
other parties. No guarantee is made by the Plan, Plan Administrator, Trustee,

 

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Insurer, or Employer that such transactions will be processed on a daily or
other basis, and no guarantee is made in any respect regarding the processing
time of such transactions.

Notwithstanding any other provision of the Plan, the Employer, the Plan
Administrator, or the Trustee reserves the right to not value an investment
option on any given Valuation Date for any reason deemed appropriate by the
Employer, the Plan Administrator, or the Trustee. Administrative practicality
will be determined by legitimate business factors (including, but not limited
to, failure of systems or computer programs, failure of the means of the
transmission of data, force majeure, the failure of a service provider to timely
receive values or prices, and correction for errors or omissions or the errors
or omissions of any service provider) and in no event will be deemed to be less
than 14 days. The processing date of a transaction shall be binding for all
purposes of the Plan and considered the applicable Valuation Date for any
transaction.

This amendment is made an integral part of the aforesaid Plan and is controlling
over the terms of said Plan with respect to the particular items addressed
expressly herein. All other provisions of the Plan remain unchanged and
controlling.

Unless otherwise stated on any page of this amendment, eligibility for benefits
and the amount of any benefits payable to or on behalf of an individual who is
an Inactive Participant on the effective date(s) stated above, shall be
determined according to the provisions of the aforesaid Plan as in effect on the
day before he became an Inactive Participant.

Signed this 31 day of December   , 2003.

     
For the Employer
   
 
   
By /S/ DAVID L. OMACHINSKI
   

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Title Exec VP, COO, CFO & Treasurer
   

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AMENDMENT NO. 1

OSHKOSH B’GOSH, INC. 401(K) PLAN

The Plan named above gives the Employer the right to amend it at any time.
According to that right, the Plan is amended as follows:

Effective as of January 1, 2004,

By adding the following to the DEFINITIONS SECTION of Article I:

Allocation Group means the designated groups of Employees for purposes of
determining separate Discretionary Contributions in the EMPLOYER CONTRIBUTIONS
SECTION of Article III. For this purpose the groups shall be as follows:

  (a)   Group 1 – Eligible non-highly compensated Participants     (b)   Group 2
– Eligible highly compensated Participants

By striking the second paragraph from the Eligible Employee definition in the
DEFINITIONS SECTION of Article I and substituting the following:

Eligible Employee means any Employee of the Employer, for purposes of
Discretionary Contributions, who meets the following requirement. His employment
classification with the Employer is all of the following:

Salaried class (pays social security and employed in classification codes 220,
750, 840 and 850.)

Nonbargaining class. Not represented for collective bargaining purposes by any
collective bargaining agreement between the Employer and employee
representatives, if retirement benefits were the subject of good faith
bargaining and if two percent or less of the Employees who are covered pursuant
to that agreement are professionals as defined in section 1.410(b)-9 of the
regulations. 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 of the Employer.

Not a nonresident alien, within the meaning of Code Section 7701(b)(1)(B), who
receives no earned income, within the meaning of Code Section 911(d)(2), from
the Employer which constitutes income from sources within the United States,
within the meaning of Code Section 861(a)(3), or who receives such earned income
but it is all exempt from income tax in the United States under the terms of an
income tax convention.

Not a Leased Employee.

Not an Employee considered by the Employer to be an independent contractor, or

 

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the employee of an independent contractor, who is later determined by the
Internal Revenue Service to be an Employee.

Not a Highly Compensated Employee who works at the New York Design Studio or who
is performing services outside of the United States under an expatriate
assignment.

By striking subparagraph (c) from the EMPLOYER CONTRIBUTIONS SECTION of
Article III and substituting the following:

  (c)   Discretionary Contributions may be made for each Plan Year for each
Allocation Group in an amount determined by the Employer. The Employer shall
notify the Plan Administrator in writing of the amount of Discretionary
Contributions, if any, determined for each Allocation Group. In no event shall
the percentage of Annual Compensation allocated under Step Two of the ALLOCATION
SECTION of this article for Group 2 exceed the percentage of Annual Compensation
allocated thereunder for Group 1.         Discretionary Contributions are
subject to the Vesting Percentage .

By striking the fourth paragraph from the ALLOCATION SECTION of Article III and
substituting the following:

     Discretionary Contributions determined for an Allocation Group shall be
allocated as of the last day of the Plan Year using Annual Compensation for the
Plan Year. The amount allocated shall be determined as follows:

STEP ONE: This step one shall only apply in years in which the Plan is a
Top-heavy Plan, as defined in the DEFINITIONS SECTION of Article XI, and the
minimum contribution under the MODIFICATION OF CONTRIBUTIONS SECTION of
Article XI is not being provided by other contributions to this Plan or another
plan of the Employer.

The allocation in this step one shall be made to each person meeting the
allocation requirements of this section and each person who is entitled to a
minimum contribution under the MODIFICATION OF CONTRIBUTIONS SECTION of
Article XI. Each such person’s allocation shall be an amount equal to the
Discretionary Contributions determined for the Allocation Group multiplied by
the ratio of such person’s Annual Compensation to the total Annual Compensation
of all such persons in the Allocation Group. Such amount shall not exceed 3% of
such person’s Annual Compensation. The allocation for any person who does not
meet the allocation requirements of this section shall be limited to the amount
necessary to fund the minimum contribution.

STEP TWO: The allocation in this step two shall be made to each person meeting
the allocation requirements of this section. Each such person’s allocation shall
be equal to any amount remaining after the allocation in step one multiplied by
the ratio of such person’s Annual Compensation to the total Annual Compensation
of all such persons in the Allocation Group.

 

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This amount shall be credited to the person’s Account.

Effective as of January 1, 2005,

By adding the following to the DEFINITIONS SECTION of Article I:

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.

By adding the following as the third paragraph of subparagraph (a) of the ACTIVE
PARTICIPANT SECTION of Article II:

For purposes of all Employees hired after December 31, 2004, 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 one year of Eligibility Service before his Entry Date.
    (2)   He is age 21 or older.

By adding the following as the third paragraph of subparagraph (a) of the
EMPLOYER CONTRIBUTIONS SECTION of Article III:

The Plan provides for an automatic election to have Elective Deferral
Contributions made. The automatic Elective Deferral Contribution shall be 2% of
Compensation. The Participant may affirmatively elect a different percentage or
elect not to make Elective Deferral Contributions. If the Participant elects a
different percentage, such percentage must comply with any limitations otherwise
provided in the Plan.

By adding the following as the last sentence of the first paragraph of
subparagraph (b) of the EMPLOYER CONTRIBUTIONS SECTION of Article III:

The Employer reserves the right to use a different formula for determining the
percentage of Elective Deferral Contributions matched, if any, for retail store
Employees who are hired or rehired after December 31, 2004, than it uses for all
other Employees.

By adding the following as the third paragraph of the EMPLOYER CONTRIBUTIONS
SECTION of Article III:

     The Plan provides for an automatic election to have Elective Deferral
Contributions made. Such automatic election shall apply when a Participant first
becomes eligible to make Elective Deferral Contributions (or again becomes
eligible after a period during which he was not an Active Participant). The
automatic election shall also apply to all Active Participants as of January 1,
2005, who have not elected to make Elective Deferral Contributions. The
Participant shall be provided a notice that explains the automatic election and
his right to elect a different rate of Elective Deferral

 

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Contributions or no Elective Deferral Contributions. The notice shall include
the procedure for exercising that right and the timing for implementing any such
election. The Participant shall be given a reasonable period thereafter to elect
a different rate of Elective Deferral Contributions or no Elective Deferral
Contributions.

This amendment is made an integral part of the aforesaid Plan and is controlling
over the terms of said Plan with respect to the particular items addressed
expressly herein. All other provisions of the Plan remain unchanged and
controlling.

Unless otherwise stated on any page of this amendment, eligibility for benefits
and the amount of any benefits payable to or on behalf of an individual who is
an Inactive Participant on the effective date(s) stated above, shall be
determined according to the provisions of the aforesaid Plan as in effect on the
day before he became an Inactive Participant.

Signing this amendment, the Employer, as plan sponsor, has made the decision to
adopt this plan amendment. The Employer is acting in reliance on its own
discretion and on the legal and tax advice of its own advisors, and not that of
any member of the Principal Financial Group or any representative of a member
company of the Principal Financial Group.

Signed this 14th day of December, 2004.

          OSHKOSH B’GOSH, INC.    
By:
  /S/ MICHAEL L. HEIDER    

       

  Michael L. Heider    

  Vice President Finance, Treasurer and    

  Chief Financial Officer       OSHKOSH B’GOSH RETAIL, INC.    
By:
  /S/ PAUL CHRISTENSEN    

       

  Paul Christensen    

  Assistant Secretary       OBG PRODUCT DEVELOPMENT AND SALES, INC.    
By:
  /S/ PAUL CHRISTENSEN    

       

  Paul Christensen    

  Assistant Secretary       OBG DISTRIBTION COMPANY, LLC    
By:
  /S/ MICHAEL L. HEIDER    

       

  Michael L. Heider    

  Vice President Finance, Treasurer and    

  Chief Financial Officer       OBG MANUFACTURING COMPANY    
By:
  /S/ MICHAEL L. HEIDER    

       

  Michael L. Heider    

  Vice President Finance, Treasurer and    

  Chief Financial Officer