Exhibit 10.60

ALLIANCE DATA SYSTEMS

401(k) AND RETIREMENT SAVINGS PLAN

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TABLE OF CONTENTS

 

          Page PREAMBLE    1 Article 1            DEFINITIONS    1     1.1   
Account    1     1.2    Accrued Benefit    1     1.3    Actual Deferral
Percentage    1     1.4    Adjustment Factor    1     1.5    Annuity
Commencement Date    2     1.6    Average Actual Deferral Percentage    2
    1.7    Average Contribution Percentage    2     1.8    Benefits
Administration Committee    2     1.9    Beneficiary    2     1.10    Board of
Directors    2     1.11    Catch-Up Contributions    2     1.12    Code    2
    1.13    Company    2     1.14    Company Account    2     1.15   
Compensation    3     1.16    Contribution Percentage    4     1.17    Deposit
Election    4     1.18    Deposits    4     1.19    Effective Date    5     1.20
   Eligibility Computation Period    5     1.21    Employee    5     1.22   
Employer    5     1.23    Employer Matching Contributions    5     1.24   
Employment Commencement Date    6     1.25    Entry Date    6     1.26    ERISA
   6     1.27    Excess Aggregate Contributions    6     1.28    Excess
Contributions    6     1.29    Excess Deferrals    6     1.30    Forfeiture
Account    6     1.31    Highly Compensated Employee    6     1.32    Hour of
Service    7     1.33    Investment Fund(s)    8     1.34    Leased Employee   
8     1.35    Leave of Absence    8     1.36    Nonhighly Compensated Employee
   9     1.37    Normal Retirement Age    9     1.38    One-Year Break in
Service    9

 

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    1.39    Participant    9     1.40    Period of Military Service    9
    1.41    Personal Accounts    9     1.42    Plan    9     1.43    Plan Year
   10     1.44    Reemployment Commencement Date    10     1.45    Retirement
Contributions    10     1.46    Rollover Account    10     1.47    Rollover
Contribution    10     1.48    Senior Associate    10     1.49    Separation
from Service    10     1.50    Spouse    10     1.51    Tax Deferred Deposits   
10     1.52    Taxed Deposits    11     1.53    Total and Permanent Disability
   11     1.54    Trust Agreement    11     1.55    Trust Fund    11     1.56   
Trustee    11     1.57    Valuation Date    11     1.58    Vesting Computation
Period    11     1.59    World Financial Network Plan    11     1.60    Year of
Eligibility Service    11     1.61    Year of Vesting Service    11 Article 2   
        PARTICIPATION    12     2.1    Plan Entry Date    12     2.2   
Participation Requirement(s)    12     2.3    Ineligible Employee    12     2.4
   Enrollment    13     2.5    Reemployed Participants    13     2.6   
Reemployed Non-Participants    13     2.7    Change of Status of Participants   
13     2.8    Breaks in Service    14 Article 3            DEPOSITS    14
    3.1    Rate of Deposits    14     3.2    Type of Deposits    15     3.3   
Change in Deposit Rates    15     3.4    Payments to Trust    15     3.5   
Annual Limit on Tax Deferred Deposits    15     3.6    Deferral Percentage
Limitation    16     3.7    Special Rules on Deferral Percentage Limitations   
17     3.8    Adjustment of Deferrals    18     3.9    Contributions For Periods
of Qualified Military Service    19     3.10    Catch-Up Contributions    19

 

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Article 4            EMPLOYER CONTRIBUTIONS    20     4.1    Employer Matching
Contributions    20     4.2    Percentage Limitation on Taxed Deposits    20
    4.3    Special Rules for Contribution Percentage Limit Testing    21     4.4
   Adjustments To Excess Aggregate Contributions    21     4.5    Retirement
Contributions    22     4.6    Overall Limitation on Annual Additions    24
    4.7    Timing of Employer Contributions    24     4.8    Discretionary
Profit Sharing Contributions    25     4.9    Qualified Non-Elective
Contributions    25 Article 5            PARTICIPANTS’ ACCOUNTS AND INVESTMENT
ELECTIONS    26     5.1    Separate Accounts    26     5.2    Valuation of Funds
   26     5.3    Investment Election    26     5.4    Timing of Investment
Election    27     5.5    Transfer Between Investment Funds    27     5.6   
Special Valuation Date    27 Article 6            TRUST AGREEMENT    28     6.1
   Trust Agreement    28     6.2    Establishment of Investment Fund(s)    28
    6.3    Voting and Tender of Shares    28     6.4    Assumption of Risk by
Participant    29 Article 7            DEATH BENEFITS AND BENEFICIARY
DESIGNATIONS    29     7.1    Death Benefits    29     7.2    Designation of
Beneficiary    29 Article 8            VESTING AND TERMINATION OF EMPLOYMENT   
30     8.1    Vesting in Personal Account and Rollover Account    30     8.2   
Vesting in Company Account    30     8.3    Vesting After Specified Events    31
    8.4    Distributions With Less Than 100% Vesting    31     8.5   
Forfeitures    32     8.6    Distribution of Vested Benefits    32     8.7   
Forfeiture Account    32     8.8    Service Upon Reemployment    33 Article 9   
        DISTRIBUTION OF BENEFITS    33     9.1    Vested Benefits    33     9.2
   Valuation Date    34

 

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    9.3    Consent to Distribution of Benefits    34     9.4    Deferral of
Benefits    34     9.5    Required Minimum Distributions    35     9.6   
Notices to Participants; Distributions Within 30 Days    35

Article 10

           WITHDRAWALS WHILE EMPLOYED    36     10.1    Limits on Withdrawals   
36     10.2    Withdrawal of Taxed Deposits and Rollover Accounts    36     10.3
   Withdrawal After Attainment of Age 59 1/2    36     10.4    Withdrawal to
Alleviate Financial Hardship    36     10.5    Loans Prior to Hardship
Withdrawals    37     10.6    In-Service Withdrawals    38     10.7   
Withdrawal on Account of Disability    38

Article 11

           LOANS    38

Article 12

           ADMINISTRATION OF THE PLAN    39     12.1    Investment Committee   
39     12.2    Operation of Investment Committee    39     12.3    Records of
Investment Committee    39     12.4    Rights and Powers of Investment Committee
   39     12.5    Benefits Administration Committee    40     12.6    Operation
of Benefits Administration Committee    40     12.7    Records of Benefits
Administration Committee    41     12.8    Rights and Powers of Benefits
Administration Committee    41     12.9    Claims Procedures    42     12.10   
Indemnification    43

Article 13

           AMENDMENT OR TERMINATION    43     13.1    Right to Amend    43
    13.2    Right of Adoption and Termination    43     13.3    Obligations Upon
Merger, Consolidation or Transfer    44     13.4    Obligations Upon
Termination, Partial Termination or Discontinuance    44     13.5    Continued
Funding After Plan Termination    44     13.6    Distribution Upon Disposition
of Assets    45     13.7    Conversion Period    45

Article 14

           GENERAL PROVISIONS    45     14.1    No Contract of Employment    45
    14.2    Incapacity    45     14.3    Payment Satisfies Claims    46     14.4
   Prescribed Forms    46     14.5    Telephonic Voice Response Service or
Electronic Systems    46

 

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    14.6    Temporary Investment of Assets    46     14.7    Attainment of Age
   47     14.8    Alienation of Benefits    47     14.9    No Guarantee of
Benefits by Company    47     14.10    Payment of Expenses    48     14.11   
Statement of Accounting    48     14.12    Plan May be Sued    48     14.13   
Inability to Find Payee    48     14.14    State Law    49     14.15   
Construction    49 Article 15            ROLLOVER CONTRIBUTIONS AND TRANSFERS   
49     15.1    Rollover of Funds From Other Plans    49     15.2    Rollover of
Funds From Conduit Individual Retirement Account (IRA)    50     15.3   
Transfers Directly from Other Plans    50     15.4    Mistaken Rollover    51
Article 16            TOP-HEAVY PROVISIONS    51     16.1    Top-Heavy Plan
Defined    51     16.2    Other Definitions    52     16.3    Top-Heavy
Contributions    53 Article 17            QUALIFIED DOMESTIC RELATIONS ORDERS
(QDROs)    54     17.1    Terms of a QDRO    54     17.2    Notification of
Receipt of Order    54 Article 18            DIRECT ROLLOVER PROVISIONS    54
    18.1    Application of Article    54     18.2    Definitions    55

 

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PREAMBLE

BSI Business Services, Inc. adopted the BSI Business Services, Inc. 401(k) and
Retirement Savings Plan (the “Plan”) effective as of January 24, 1996. The
purpose of the Plan is to provide eligible employees with retirement benefits.
The Plan is intended to be a profit sharing plan qualifying under Section 401
(a) of the Code with a cash or deferred arrangement qualifying under
Section 401(k) of the Code.

BSI Business Services, Inc. was renamed ADS Alliance Data Systems, Inc.
Accordingly, the Plan was amended, restated, and renamed the Alliance Data
Systems 401(k) and Retirement Savings Plan, effective as of January 1, 1997. The
Plan was subsequently amended and restated and is now being completely amended
and restated effective January 1, 2004, to include various changes, including
retroactive changes required by applicable federal law for the Plan to remain
tax-qualified under the Code, and to make changes necessary to qualify the Plan
for the “safe harbor” testing option provided under Code Section 401(k)(12). For
each year the Plan intends to qualify for this testing option, the Committee
shall provide the notice to Participants required thereunder. The Plan is hereby
amended and restated effective January 1, 2008.

ARTICLE 1

DEFINITIONS

The following words and phrases as used herein shall have the following
meanings, and the masculine, feminine and neuter gender shall be deemed to
include the others, unless a different meaning is plainly required by the
context:

 

1.1 Account

The total of the separate accounts that are maintained for a Participant under
the Plan.

 

1.2 Accrued Benefit

The sum of the amounts credited to the Participant’s Account as of any date.

 

1.3 Actual Deferral Percentage

The ratio (expressed as a percentage) of the Tax Deferred Deposits made on
behalf of the Participant for the Plan Year to the Participant’s Compensation
for the Plan Year while the Participant is eligible to make Tax Deferred
Deposits.

 

1.4 Adjustment Factor

The cost of living adjustment factor prescribed by the Secretary of the Treasury
under Section 415(d) of the Code, applied as the Secretary shall provide.

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1.5 Annuity Commencement Date

The first day of the first period for which an amount is payable as an annuity
or any other form.

 

1.6 Average Actual Deferral Percentage

The average (expressed as a percentage) of the Actual Deferral Percentages of
the Participants in a group.

 

1.7 Average Contribution Percentage

The average (expressed as a percentage) of the Contribution Percentages of the
Participants in a group.

 

1.8 Benefits Administration Committee

The committee described in Section 12.5.

 

1.9 Beneficiary

The person, persons or entity designated in writing by a Participant, or
otherwise determined in accordance with the Plan, entitled to receive any death
benefit which may be, or may become, payable under the Plan.

 

1.10 Board of Directors

The Board of Directors of the Company, as constituted from time to time. The
Board of Directors shall have the right and the power to delegate any duty or
power under the Plan to one or more persons, and any reference in the Plan to
the Board of Directors shall include a reference to such delegatee(s).

 

1.11 Catch-Up Contributions

The supplemental amounts a Participant elects to defer pursuant to Section 3.10.

 

1.12 Code

The Internal Revenue Code of 1986, as amended from time to time.

 

1.13 Company

ADS Alliance Data Systems, Inc. and any successor thereto.

 

1.14 Company Account

The account into which Employer Matching Contributions, Discretionary Profit
Sharing Contributions, and Retirement Contributions shall be credited, which may
include subaccounts to account for contributions made under plans merged into
the Plan.

 

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1.15 Compensation

Shall have the following meanings for specific purposes under the Plan:

 

  (A) For purposes of determining the amount of any (i) Deposits; (ii) Employer
Matching Contributions; (iii) Retirement Contributions; and (iv) Discretionary
Profit Sharing Contributions, “Compensation” shall mean the regular wages (i.e.,
base pay), overtime, commissions, leave cashouts, and cash incentives paid to an
Employee by an Employer for the applicable Plan Year while a Participant in the
Plan, but excluding sign-on bonuses, disability pay, workers compensation,
severance pay, service related cash awards, any amounts which constitute tax
gross ups of taxable amounts, any amounts deferred under, or contributed to, a
non-qualified deferred compensation plan, and referral awards.

In addition, Compensation for this purpose includes any contributions made by
the Employer on behalf of an Employee pursuant to a deferral election under any
employee benefit plan containing a cash or deferred arrangement under Code
Section 401(k), any amounts that would have been received as cash but for an
election to receive benefits under a cafeteria plan meeting the requirements of
Code Section 125, and any election of transportation benefits under a program
established pursuant to Code Section 132(f).

With respect to a Period of Military Service, an Employee will be considered to
have received the same rate or level of Compensation during his absence that he
was receiving immediately prior to his absence, or if the rate of Compensation
is not reasonably certain, on the basis of the Employee’s average rate of
Compensation during the twelve (12) month period immediately preceding such
period (or if shorter, the period of employment immediately preceding such
period).

 

  (B) For purposes of the limitations imposed by Section 415 of the Code, the
Top-Heavy plan minimum contribution requirements of Section 416 of the Code, and
the determination of Highly Compensated Employees pursuant to Section 414(q) of
the Code, “Compensation” means wages within the meaning of 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, but determined without regard to any rules 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)(21).

Notwithstanding the foregoing, Compensation for this purpose includes an
Employee’s elective deferrals under Code Section 402(g)(3)) and amounts
contributed or deferred under Code Section 125, or Code Section 457 at the
Employee’s election for purposes of determining who is a Highly Compensated
Employee and for purposes of Code Section 415 limits on benefits, and an
Employee’s elective deferrals under Code Section 132(f).

 

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  (C) For purposes of determining a Participant’s Actual Deferral Percentage
used in performing the average deferral percentage nondiscrimination test
described in Section 401(k)(3) of the Code and the Contribution Percentage used
in performing the average contribution percentage nondiscrimination test
described in Section 401(m)(2) of the Code, “Compensation” shall mean
compensation as defined in Section 414(s) of the Code and the regulations
thereunder.

 

  (D) For purposes of defining “Key Employee” under Section 416 of the Code,
“Compensation” shall mean Compensation as defined in Paragraph (B) paid to the
eligible Employee other than compensation in the form of qualified or previously
qualified deferred compensation that is currently includible in the gross income
of the eligible Employee for Federal income tax purposes. In addition, for
purposes of this Paragraph (D), Compensation shall include amounts withheld from
a Participant’s earnings pursuant to a salary reduction agreement entered into
by the Participant in accordance with Sections 401(k) or 125 of the Code.
Compensation shall also include amounts withheld from a Participant’s earnings
pursuant to a salary reduction agreement entered into by the Participant in
accordance with Code Section 132(f).

 

  (E) Notwithstanding anything herein to the contrary, Compensation shall be
limited annually to $205,000 (adjusted in future years as provided under Code
section 401(a)(17)).

 

1.16 Contribution Percentage

The ratio (expressed as a percentage) of the Taxed Deposits and, in the case of
a Participant who has not completed a Year of Eligibility Service, the Employer
Matching Contributions made under the Plan on behalf of the Participant for the
Plan Year to the Participant’s Compensation for the Plan Year while the
Participant is eligible to have Taxed Deposits and, in the case of a Participant
who has not completed a Year of Eligibility Service, the Employer Matching
Contributions made on his behalf.

 

1.17 Deposit Election

The election made by a Participant authorizing and electing a percentage of his
Compensation to be withheld by the Employer and contributed on behalf of the
Participant as Tax Deferred Deposits or deducted by the Employer and contributed
on behalf of the Participant as Taxed Deposits.

 

1.18 Deposits

The amounts that a Participant elects to contribute or have contributed on his
behalf to the Trust pursuant to Article 3, including Tax Deferred Deposits,
Taxed Deposits, and Catch-Up Contributions.

 

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1.19 Effective Date

This amended and restated Plan is generally effective January 1, 2008. The Plan
was originally effective January 24, 1996.

 

1.20 Eligibility Computation Period

The twelve consecutive month period beginning on the date the Employee is first
credited with an Hour of Service and each anniversary thereof, provided,
however, that if the Employee is not credited with 1,000 or more Hours of
Service in the first such period, the Eligibility Computation Period shall be
the Plan Year beginning with the Plan Year beginning in the first Eligibility
Computation Period.

 

1.21 Employee

Any person who is receiving compensation for personal services rendered in the
employment of the Employer including Leased Employees. Notwithstanding the
foregoing, if such Leased Employees constitute less than twenty percent of the
Employer’s Nonhighly compensated work force within the meaning of
Section 414(n)(5)(C)(ii) of the Code, the term Employee shall not include those
Leased Employees covered by a plan described in Section 414(n)(5) of the Code.

 

1.22 Employer

The Company and any subsidiary or affiliated organization which, with the
approval of the Board of Directors and subject to such considerations as the
Board of Directors may impose, adopts this Plan. Each adopting Employer
authorizes the Company and/or the Company’s Board of Directors, as applicable,
to act on its behalf with respect to the Plan in all respects, provided,
however, that each adopting Employer may reserve the authority to withdraw from
the Plan.

In determining Hours of Service for the purposes of determining an Employee’s
eligibility to participate in the Plan and the vesting of benefits, in
determining whether an Employee is a Highly Compensated Employee, in determining
the special rules on deferral percentage limitations and the special rules for
contribution percentage limit-testing, in determining whether the Plan is
Top-Heavy under Section 416 of Code, in determining whether an Employee has
terminated employment with each Employer, and in determining the limitations on
Annual Additions under Section 415 of the Code, the term “Employer” shall
include any other corporation or other business entity which must be aggregated
with the Employer under Section 414(b), (c), (m) or (o) of the Code, but only
for such periods of time when the Employer and such other corporation or other
business entity must be aggregated as aforesaid. For purposes of the
determination of the limitations on Annual Additions, such definition of
“Employer” shall be modified by Section 415(h) of the Code.

 

1.23 Employer Matching Contributions

The amounts contributed on behalf of a Participant pursuant to Section 4.1.

 

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1.24 Employment Commencement Date

The date on which an Employee is first credited with an Hour of Service for the
performance of duties for an Employer.

 

1.25 Entry Date

The first day on which it is administratively practicable to enroll in the Plan
an Employee who is eligible under Article 2, which date shall in no case be more
than 30 days after the date the Employee first becomes eligible under Article 2.

 

1.26 ERISA

The Employee Retirement Income Security Act of 1974, as amended from time to
time.

 

1.27 Excess Aggregate Contributions

Taxed Deposits and, in the case of a Participant who has not completed a Year of
Eligibility Service, Employer Matching Contributions in excess of the
Contribution Percentage limit, as described in Section 401(m)(6)(B) of the Code.

 

1.28 Excess Contributions

Tax Deferred Deposits in excess of the Actual Deferral Percentage limit, as
described in Section 401(k)(8)(B) of the Code.

 

1.29 Excess Deferrals

Tax Deferred Deposits in excess of the limits imposed by Section 402(g) of the
Code.

 

1.30 Forfeiture Account

The account holding unallocated assets representing forfeitures of previously
allocated amounts.

 

1.31 Highly Compensated Employee

Any Employee who performs service for an Employer during the determination year
and who, during the look-back year received Compensation (as defined in
Section 1.15(B)) from an Employer in excess of $90,000, multiplied by the
Adjustment Factor. The term Highly Compensated Employee also includes Employees
who are 5 percent owners at any time during the look-back year or determination
year. For this purpose, the determination year shall be the Plan Year. The
look-back year shall be the twelve-month period immediately preceding the
determination year.

 

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1.32 Hour of Service

 

  (A) Each hour for which an Employee is directly or indirectly paid or entitled
to payment for the performance of duties for an Employer; these hours shall be
credited to the computation period in which the duties are performed, and

 

  (B) Each hour for which an Employee is directly or indirectly entitled to
payment on account of a period of time during which no duties are performed
(irrespective of whether the employment relationship has terminated) due to
vacation, holiday, illness, incapacity, disability, pregnancy, or in connection
with adoption of a child, layoff, jury duty, Period of Military Service or leave
of absence; except that

 

  (1) not more than five hundred and one (501) Hours of Service shall be
credited in each single computation period during which the Employee performs no
duties, and

 

  (2) Hours of Service shall not be counted where such payment is made or is
due:

 

  (a) under a plan maintained solely for the purpose of complying with
applicable workmen’s compensation, unemployment or disability insurance laws, or

 

  (b) solely to reimburse an Employee for medical or medically-related expenses;
(hours credited under this Paragraph (B) shall be credited to the computation
period(s) in which the period during which no duties were performed occurred),
and

 

  (C) Each hour for which back pay, irrespective of payment due to mitigation of
damages, is either awarded or agreed to by the Employer; these hours shall be
credited to the computation period(s) to which the award or agreement for back
pay pertains rather than to the computation period in which the award, agreement
or payment is made; provided, however, that the limits under Paragraph (B) above
are applicable and that an Employee shall not be entitled to additional Hours of
Service under this Paragraph (C) for the same Hours of Service credited under
Paragraphs (A) or (B) above.

Hours of Service hereunder shall be calculated and credited by any method
permitted under Department of Labor Regulation Sections 2530.200b-2(b) and (c),
which are incorporated by reference hereunder.

In the case of Hours of Service to be credited to an Employee in connection with
a period of no more than thirty-one (31) days which extends beyond one
computation period, all such Hours of Service may be credited to the first
computation period or the second computation period in a manner applied
consistently with respect to all Employees within reasonably defined job
classifications.

 

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If Hours of Service are not maintained for an Employee, Hours of Service shall
be determined on the assumption that such Employee has completed forty-five
(45) Hours of’ Service during each week he is required to be credited with at
least one (1) Hour of Service by an Employer.

In the case of a Period of Military Service, an Employee shall be deemed to be
employed for the average number of Hours of Service per week for the three month
period immediately prior to the Period of Military Service, or if the Employee
has worked less than three months, the average number of Hours of Service worked
per week for the time employed.

Hours of Service shall be credited for a leave of absence that qualifies as FMLA
leave under the Family and Medical Leave Act to the extent required under such
Act.

For purposes of determining an Employee’s eligibility to participate in the Plan
and vesting of benefits, an Hour of Service shall also include an Hour of
Service with a company heretofore or hereafter merged or consolidated or
otherwise absorbed by an Employer or all or a substantial part of the assets or
business of which have been or shall be acquired by an Employer, (“Predecessor
Company”):

 

  (1) if the Employer continues to maintain an employee benefit plan of such
Predecessor Company (“Predecessor Plan”);

 

  (2) if, and to the extent, such employment with the Predecessor Company is
required to be treated as employment with the Employer under regulations
prescribed by the Secretary of the Treasury; or

 

  (3) if, and to the extent, provided in Appendix A

 

1.33 Investment Fund(s)

The investment fund(s), if any, established pursuant to Section 6.2.

 

1.34 Leased Employee

Any person who provides services to the Employer if: (A) such services are
provided pursuant to an agreement between the Employer and any other person;
(B) such person has performed such services for the Employer (or the Employer
and related persons) on a substantially full-time basis for a period of at least
one (1) year; and (C) such services are performed under the primary direction
and control of the recipient Employer.

 

1.35 Leave of Absence

An absence authorized by the Employer under its standard personnel practices as
applied in a uniform and non-discriminatory manner to all persons similarly
situated, provided the Employee resumes service with the Employer within the
period specified in the authorization for the Leave of Absence.

 

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Except for a Period of Military Service, for purposes of determining an
Employee’s date of Separation from Service and an Employee’s Hours of Service, a
Leave of Absence shall not exceed a period of twelve (12) consecutive months.

 

1.36 Nonhighly Compensated Employee

An Employee who is not a Highly Compensated Employee.

 

1.37 Normal Retirement Age

An Employee’s 65th anniversary of birth.

 

1.38 One-Year Break in Service

An Eligibility Computation Period or Vesting Computation Period in which the
Employee is credited with less than five hundred (500) Hours of Service.

 

1.39 Participant

An Employee who becomes eligible to participate in the Plan pursuant to Article
2 and who continues to be eligible to participate under the Plan, whether or not
he elects to make Deposits.

 

1.40 Period of Military Service

For an Employee who is either (A) inducted into the Armed Forces of the United
States pursuant to 38 U.S.C. §2021, as amended from time to time, or (B) enlists
in the Armed Forces of the United States, or enters upon active duty in the
Armed Forces of the United States in response to an order or call to active duty
pursuant to 38 U.S.C. §2024, as amended from time to time, the time period
spanning induction, training, and service in the Armed Forces and up to his
reemployment date as described in such statute; provided that such Employee
(1) leaves the Armed Forces under the conditions or circumstances described in
the applicable statute and (2) makes application for reemployment as an Employee
within the time limit prescribed in the applicable statute and is reemployed as
an Employee as a result thereof.

 

1.41 Personal Accounts

The accounts established and maintained pursuant to Article 5 in which are
reflected all Deposits made by or on behalf of a Participant, together with all
assets attributable thereto. If the Participant participated in the World
Financial Network Plan, his or her Personal Account shall include a subaccount
for Pre-Tax Contributions made under such plan and referred to as the World
Financial Network Plan Pre-Tax Savings Account and subaccounts to reflect Tax
Deferred Deposits and Taxed Deposits, if any, made under the Plan on and after
January 1, 1998.

 

1.42 Plan

The Alliance Data Systems 401(k) and Retirement Savings Plan, as herein set
forth, and as it may hereafter be amended from time to time.

 

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1.43 Plan Year

The calendar year.

 

1.44 Reemployment Commencement Date

The first day following a One-Year Break in Service on which an Employee is
credited with an Hour of Service for the performance of duties for an Employer.

 

1.45 Retirement Contributions

The amounts contributed on behalf of a Participant pursuant to Section 4.5.

 

1.46 Rollover Account

The account maintained for a Participant who has made a rollover contribution
pursuant to Article 15.

 

1.47 Rollover Contribution

The contributions received by the Plan from a Participant and maintained in the
Rollover Account.

 

1.48 Senior Associate

A Participant who has completed either 180 days of uninterrupted service with an
Employer or a Year of Eligibility Service, whichever first occurs, as of an
Entry Date.

 

1.49 Separation from Service

The termination by discharge, resignation, death, retirement on or after Normal
Retirement Age or Total and Permanent Disability from the service of the
Employer, and also a severance from employment with the Employer or an employer
in accordance with Code Section 401(k)(2)(B)(i)(I) and regulations thereunder.

 

1.50 Spouse

The person to whom a Participant or a former Participant is legally married,
under the laws of the state in which he is domiciled, or if he is domiciled
outside the United States, to the extent recognized under the laws of the State
of Texas.

 

1.51 Tax Deferred Deposits

Deposits made under the Plan which were subject to a cash or deferred election
under Section 401(k) of the Code and designated as Tax Deferred Deposits
pursuant to Section 3.2.

 

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1.52 Taxed Deposits

A Participant’s after-tax Deposits made under the Plan and designated as Taxed
Deposits pursuant to Section 3.2.

 

1.53 Total and Permanent Disability

Any Disability for which a Participant qualifies and receives disability
insurance benefits under United States Social Security laws.

 

1.54 Trust Agreement

The trust agreement between the Company and the Trustee established for the
purpose of funding benefits under the Plan.

 

1.55 Trust Fund

All such money or other property which is held by the Trustee or custodian
pursuant to the terms of the Trust Agreement.

 

1.56 Trustee

The trustee or custodian, if any, acting as such pursuant to the Trust
Agreement, or any successor or successors to said trustee or custodian, as the
case may be.

 

1.57 Valuation Date

Each business day in the Plan Year.

 

1.58 Vesting Computation Period

A Plan Year.

 

1.59 World Financial Network Plan

The World Financial Network National Bank Savings and Retirement Plan as in
effect on December 31, 1997.

 

1.60 Year of Eligibility Service

An Eligibility Computation Period in which an Employee is credited with at least
one thousand (1,000) Hours of Service. An Employee’s Year(s) of Eligibility
Service shall include service credited pursuant to Appendix A.

 

1.61 Year of Vesting Service

 

  (A) A Vesting Computation Period in which the Employee is credited with five
hundred (500) or more Hours of Service. In addition, Year(s) of Vesting Service
shall include service credited pursuant to Appendix A.

 

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ARTICLE 2

PARTICIPATION

 

2.1 Plan Entry Date

Each Employee who was a Participant immediately prior to the Effective Date
shall continue as a Participant in this Plan as of the Effective Date, provided
such Employee is not ineligible to participate in accordance with Section 2.3.
Each other Employee who satisfies the requirements specified in Section 2.2
shall become a Participant on the Entry Date coincident with or next following
the date on which he satisfies such requirements.

 

2.2 Participation Requirement(s)

Subject to Section 2.3, an Employee who has attained age 21 may become a
Participant on any Entry Date that coincides with or follows his or her
Employment Commencement Date, provided, however, that any Employee who is
classified as a “seasonal” or “on-call” Employee on the Employer’s payroll
system must complete a Year of Eligibility Service and attain age 21 to become a
Participant.

 

2.3 Ineligible Employee

An Employee who is otherwise eligible to participate in the Plan will not become
or continue as an active Participant if:

 

  (A) He performs services for an Employer solely as a “Leased Employee,” is
employed on a temporary basis, or is classified by an Employer as an independent
contractor, regardless of whether any such person is subsequently reclassified
as having been a common law employee of an Employer while performing such
services;

 

  (B) He is covered by a collective bargaining agreement that does not expressly
provide for participation in the Plan;

 

  (C) He is a nonresident alien who receives no earned income (within the
meaning of Code Section 911 (d)(2) from an Employer which constitutes income
from sources within the United States (within the meaning of Code Section 861
(a)(3));

 

  (D) He is employed by a subsidiary or affiliated company that has not adopted
the Plan; or

 

  (E) He is a United States citizen whose compensation for services is paid by a
foreign affiliate of an Employer (within the meaning of Code Section 406),
unless the Employer has entered into an agreement described in Code
Section 3121(l) with respect to the payment of Social Security taxes on behalf
of the Employee that applies to any other funded plan of deferred compensation
(other than a qualified plan sponsored by the Employer) with respect to the
compensation paid by the foreign affiliate.

 

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2.4 Enrollment

To make Deposits, an eligible Employee must enroll in accordance with procedures
established by the Benefits Administration Committee.

 

2.5 Reemployed Participants

If a former Participant resumes employment with the Company or any Employer
following a Separation from Service, he may rejoin the Plan on the day he
resumes employment and shall participate on such date by enrolling in accordance
with procedures established by the Benefits Administration Committee.

 

2.6 Reemployed Non-Participants

Except as provided in Section 2.8 below, the following provisions will apply to
an Employee who terminates employment before becoming a Participant:

 

  (A) An Employee who terminates employment after meeting the requirements of
Section 2.2 and again becomes an Employee will become a Participant on the first
Entry Date following the date of such reemployment, if he is not otherwise
excluded from active participation in the Plan.

 

  (B) An Employee who terminates employment before meeting the requirements of
Section 2.2 and who again becomes an Employee will become a Participant on the
first Entry Date following the date in which he meets the requirements of
Section 2.2, if he is not otherwise excluded from active participation in the
Plan.

 

2.7 Change of Status of Participants

 

  (A) If a Participant secures a Leave of Absence or is temporarily laid off, he
shall continue to be a Participant in the Plan, but he shall not be permitted to
make any Deposits under the Plan during such absence or layoff, except as to
Compensation previously earned. Such a Participant shall share in any Employer
Matching Contribution on the basis of his Tax Deferred Deposits or Taxed
Deposits for that part of any Plan Year during which he was not on a Leave of
Absence. On the basis of his Compensation for that part of the Plan Year during
which he was not on a Leave of Absence or laid off, he shall share in Retirement
Contributions made as of the last day of such Plan Year provided that on this
date he is still on a Leave of Absence or lay-off status. If any Participant on
such a Leave of Absence or on temporary layoff does not return to employment at
the end of such absence, or layoff, such Participant shall for the purpose of
the Plan be deemed to have Separated from Service at the scheduled end of such
absence or at the scheduled end of such layoff, as the case may be, and shall be
governed by all provisions of the Plan that would have been applicable to him if
he had then Separated from Service. Leaves of Absence and temporary layoffs
shall be governed by personnel procedures as in effect from time to time for the
Company or other Employer, as the case may be, as applied by the Benefits
Administration Committee.

 

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  (B) Any Participant in the Plan who becomes a participant in any other
qualified retirement plan to which the Company or any Employer makes
contributions shall be precluded from making any Deposits or receiving Employer
Matching Contributions, Discretionary Profit Sharing Contributions, or
Retirement Contributions under the Plan for as long as he is a participant in
such other plan. If he ceases to be a participant in such other plan and is
otherwise eligible to participate in the Plan, he may resume making Deposits
under the Plan on any subsequent Entry Date by making an election to that effect
and shall be eligible to receive Employer Matching Contributions and Retirement
Contributions (based on the Compensation earned while not participating in the
other plan) as otherwise provided herein.

 

  (C) If a Participant shall commence employment with an employer designated by
the Benefits Administration Committee for this purpose, assets representing such
Participant’s Account balances in this Plan shall be transferred to the trust
forming part of such employer’s qualified defined contribution plan provided
that the trust to which such asset transfer is to be made permits such transfer.
All such asset transfers with respect to a Plan Year shall be made as of
December 31st of such year and shall be valued as of such date. All such asset
transfers shall be subject to Section 13.3 and shall comply with Section 414(l)
of the Code and the regulations thereunder.

 

2.8 Breaks in Service

If an Employee who has no nonforfeitable interest in an Accrued Benefit incurs
five (5) consecutive One-Year Breaks in Service, his prior Years of Eligibility
Service and/or Years of Vesting Service, as applicable, shall be forfeited.

ARTICLE 3

DEPOSITS

 

3.1 Rate of Deposits

Subject to limits imposed by the Code or in the Plan, a Participant shall elect
to make Deposits under the Plan by designating the percentage of Compensation
(in increments of 1%) he wishes to have contributed to the Trust on his behalf.
The minimum percentage shall be 1% and the maximum percentage shall be set from
time to time by the Benefits Administration Committee.

 

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3.2 Type of Deposits

A Participant may elect that the Deposits made under the Plan on his behalf be
Tax Deferred Deposits or Taxed Deposits. The Benefits Administration Committee
may impose from time to time separate maximum deposit limits on Tax Deferred
Deposits and Taxed Deposits and may apply different maximum deposit limits to
different groups of Participants on the basis of their Compensation received in
the immediately preceding and/or current Plan Year. The Benefits Administration
Committee may, in its discretion, suspend or limit the percentage of Tax
Deferred Deposits or Taxed Deposits elected by any or all Participants who are
Highly Compensated Employees to the extent the Committee deems necessary. Any
such suspension or limitation may be imposed at any time during the Plan Year
effective on the first day of the month following such imposition and shall
continue in effect for as long as the Benefits Administration Committee shall
determine. Whenever the limit imposed on either Tax Deferred Deposits or Taxed
Deposits is later increased, the rate(s) of Deposits in effect during the
limitation period will remain effective until changed by the Participant. At any
time prior to the end of a Plan Year as to Deposits for such Year, the Benefits
Administration Committee may, in its discretion, retroactively change, in whole
or in part, the elections made by any or all Participants who are Highly
Compensated Employees from Tax Deferred Deposits to Taxed Deposits to the extent
then permitted under the Plan. Such change may be made without prior notice to
affected Participants, but only if, and to the extent, the Benefits
Administration Committee deems it necessary to comply with requirements of the
Code. Recharacterized Excess Contributions shall be subject to the
nonforfeitability requirements and distribution limitations applicable to Tax
Deferred Deposits. The Benefits Administration Committee shall be permitted to
take any and all actions permitted by Section 401(k)(8) and 401(m)(6) of the
Code and the regulations thereunder in order to have the Plan comply with the
actual deferral percentage and contribution percentage requirements of
Section 401(k)(3)) and 401(m)(2) of the Code, respectively, for such Plan Year,
to the extent such requirements apply.

 

3.3 Change in Deposit Rates

At any time after enrollment, a Participant may elect (i) to discontinue
Deposits under the Plan, (ii) to increase or decrease his future Deposits to any
other percentage then permitted under the Plan or (iii) to change the percentage
of either or both of his Tax Deferred Deposits or Taxed Deposits to any other
percentage then permitted under the Plan. Any such election shall be made in
accordance with procedures approved by the Benefits Administration Committee and
shall be effective as soon as practicable.

 

3.4 Payments to Trust

The Company and each adopting Employer shall forward Deposits to the Trustee as
soon as practicable.

 

3.5 Annual Limit on Tax Deferred Deposits

No Participant shall be permitted to have Tax Deferred Deposits made under this
Plan in excess of the dollar limitation contained in Section 402(g) of the Code
in effect for such taxable year, except to the extent permitted under
Section 414(v) of the Code, if applicable. The limitation set by this Section
applies on an individual basis to all elective deferrals (within the meaning of
Section 401(k) of the Code) made by each Participant during a year under this or
any other qualified plan of the Employer.

It shall be the responsibility of each Participant to coordinate his or her
salary deferrals as needed to meet this limit in connection with any other plan
or plans not sponsored by the Employer. The Benefits Administration Committee
will not take account of deferrals made to any other plan not sponsored by an
Employer.

 

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Notwithstanding any other provision of the Plan, the Participant may state a
claim for the return of Excess Deferrals and such Excess Deferrals and the gain
or loss allocable thereto shall be distributed if administratively practicable
during the calendar year in which such Excess Deferrals are made or the calendar
year following the calendar year in which such Excess Deferrals are made, but no
later than the April 15 following the calendar year for which such allocable
Excess Deferrals are made. The Participant’s claim shall be in writing; shall be
submitted to the Benefit Administration Committee no later than March 1; shall
specify the Participant’s Excess Deferrals for the preceding calendar year; and
shall be accompanied by the Participant’s written statement that if such amounts
are not distributed, such Excess Deferrals, when added to amounts deferred under
other plans or arrangements described in Sections 401(k), 408(k) or 403(b) of
the Code, exceed the limit imposed on the Participant by Section 402(g) of the
Code for the year in which the deferral occurred. If a Participant has Excess
Deferrals, taking into account only elective deferrals under the Plan and other
plans of the Employer, the Participant is deemed to have notified the Plan of
such Excess Deferrals in accordance with the terms of this paragraph, and such
Excess Deferrals shall be distributed, in accordance with the terms of this
paragraph.

The Excess Deferrals shall be adjusted for gain or loss. The gain or loss
allocable to Excess Deferrals for the Participant’s taxable year shall be
determined by multiplying the gain or loss allocable to the Participant’s Tax
Deferred Deposits for the taxable year by a fraction, the numerator of which is
the Excess Deferrals on behalf of the Participant for the taxable year, and the
denominator of which is the sum of (1) the Participant’s Account attributable to
Tax Deferred Deposits as of the beginning of the taxable year, plus (2) the
Participant’s Tax Deferred Deposits for the taxable year.

Notwithstanding the foregoing, with respect to any taxable year beginning prior
to January 1, 2007, no gain or loss shall be allocated to Excess Deferrals for
the period between the end of the taxable year and the date of the corrective
distribution.

If Excess Deferrals have previously been distributed within the Plan Year, then
the Plan shall offset such distribution from the amount of the Participant’s
Excess Contributions to be distributed for such Plan Year. In addition, the
amount of Excess Deferrals that may be distributed for a Participant by the Plan
for a Plan Year shall be reduced by the amount of Excess Contributions
previously distributed for such Plan Year.

 

3.6 Deferral Percentage Limitation

Subject to the special rules of Section 3.7, and at such intervals as it shall
deem proper, the Benefits Administration Committee shall review the Deposit
election of each Participant who has not completed a Year of Eligibility Service
in order to ensure that the Tax Deferred Deposits with respect to such
Participants satisfy one of the following tests:

 

  (A) The Average Actual Deferral Percentage for such Participants who are
Highly Compensated Employees for the Plan Year shall not exceed the Average
Actual Deferral Percentage for such Participants who are Nonhighly Compensated
Employees for the Plan Year multiplied by 1.25; or

 

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  (B) The Average Actual Deferral Percentage for such Participants who are
Highly Compensated Employees for the Plan Year shall not exceed the Average
Actual Deferral Percentage for such Participants who are Nonhighly Compensated
Employees for the Plan Year multiplied by 2, provided that the Average Actual
Deferral Percentage for such Participants who are Highly Compensated Employees
does not exceed the Average Actual Deferral Percentage for such Participants who
are Nonhighly Compensated Employees for the Plan Year by more than two
(2) percentage points.

To the extent required by regulations or other Internal Revenue Service rulings
of general applicability, the Average Actual Deferral Percentage for
Participants who are Nonhighly Compensated Employees for the Plan Year shall be
adjusted, as required by such regulations or other rulings of general
applicability, to reflect a change in the group of eligible Employees under the
Plan on account of (i) establishment or amendment of a plan, (ii) plan merger,
consolidation or spin-off, (iii) a change in the way plans are aggregated or
separated for purposes of performing the tests described in (A) and (B) above or
(iv) any combination of the above.

 

3.7 Special Rules on Deferral Percentage Limitations

 

  (A) For purposes of this Article, the Actual Deferral Percentage for any
Participant who is a Highly Compensated Employee for the Plan Year and who is
eligible to have Tax Deferred Deposits allocated to his account under two or
more plans or arrangements described in Section 401(k) of the Code that are
maintained by an Employer shall be determined as if all such Tax Deferred
Deposits were made under a single arrangement. If a Highly Compensated Employee
participates in two or more plans or arrangements described in Section 401(k) of
the Code that have different plan years, all such arrangements ending with or
within the same calendar year shall be treated as a single arrangement.

 

  (B) In the event that this Plan satisfies the requirements of Sections 401(k),
401(a)(4) or 410(b) of the Code only if aggregated with one or more other plans,
or if one or more plans satisfy the requirements of such sections of the Code
only if aggregated with this Plan, then this section shall be applied by
determining the Actual Deferral Percentage of Employees as if all such plans
were a single plan. Plans may be aggregated in order to satisfy Section 401(k)
of the Code only if they have the same plan year, but the Plan may only be
aggregated with a plan that uses the “current year” testing method.

 

  (C) The Plan may be disaggregated into two or more plans or the Plan may be
aggregated with one or more other plans, to the extent permitted by Sections
401(k), 401(a)(4) and 410(b) of the Code and the regulations thereunder.

 

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  (D) For purposes of determining a Participant’s Actual Deferral Percentage,
Tax Deferred Deposits must be made before the last day of the twelve month
period immediately following the Plan Year to which those contributions relate.

 

  (E) Excess Annual Additions distributed to Participants in accordance with
Section 4.6 shall be disregarded for purposes of applying the tests of
Section 3.6.

 

  (F) Excess Deferrals of Nonhighly Compensated Employees shall be disregarded
to the extent such Excess Deferrals are prohibited under Code
Section 401(a)(30).

 

  (G) The determination and treatment of the Actual Deferral Percentage of any
Participant shall satisfy such other requirements as may be prescribed by the
Secretary of the Treasury.

 

3.8 Adjustment of Deferrals

 

  (A) In the event the Benefits Administration Committee determines that one of
the tests set forth in Section 3.6 is not satisfied at the time of its review
hereunder, or is likely not to be satisfied by the end of the Plan Year, it may
require, in accordance with Section 3.2, that one or more Participants adjust
their Deposit Election as of the first pay period in the month next following
receipt of the test results, in order that one of the tests set forth in
Section 3.6 is thereafter satisfied, or, to the extent permitted by law, the
Benefits Administration Committee shall have the power and authority to return
all or any part of the Tax Deferred Deposits of one or more Participants in cash
within two and one-half months after the end of the Plan Year but in no instance
later than the last day of the Plan Year following the Plan Year for which the
Excess Contributions were made, solely to the extent necessary to satisfy one of
the tests set forth in Section 3.6.

 

  (B) The Excess Contributions shall be adjusted for gain or loss. The gain or
loss allocable to Excess Contributions for the Plan Year shall be determined by
multiplying the gain or loss allocable to the Participant’s Tax Deferred
Deposits and amounts treated as Tax Deferred Deposits for the Plan Year by a
fraction, the numerator of which is the Excess Contributions on behalf of the
Participant for the Plan Year and the denominator of which is the sum of (1) the
Participant’s Account attributable to Tax Deferred Deposits and amounts treated
as Tax Deferred Deposits as of the beginning of the Plan Year plus (2) the
Participant’s Tax Deferred Deposits and amounts treated as Tax Deferred Deposits
for the Plan Year.

Notwithstanding the foregoing, except with respect to the two taxable year
period beginning January 1, 2006, no gain or loss shall be allocated to Excess
Contributions for the period between the end of the taxable year and the date of
the corrective distribution.

 

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  (C) Any distribution of Excess Contributions for any Plan Year shall be made
to Highly Compensated Employees in accordance with Code Section 401(k)(8)(C) and
the rulings and regulations thereunder. If, after performance of the two tests
in Section 3.6, the deferral percentage test would still be violated as of the
end of the Plan Year, then notwithstanding any other provision hereof, every Tax
Deferred Deposit included in the Actual Deferral Percentage for a Participant
who is a Highly Compensated Employee and whose Actual Deferral Percentage is
greater than the permitted maximum shall be revoked to the extent necessary to
comply with such deferral percentage limitation of Section 3.6 and the amount of
such Tax Deferred Deposits, to the extent revoked, shall constitute an Excess
Contribution to be distributed to such Participant (with earnings thereon as
calculated in Section 3.8(B)) no later than the last day of the Plan Year
following the Plan Year for which such contribution was made. Excess
Contributions are allocated to the Highly Compensated Employees with the largest
amounts of Tax Deferred Deposits (and Employer contributions, as applicable),
which are taken into account in calculating the deferral percentage limitation
for the Plan Year in which the excess arose, beginning with the Highly
Compensated Employee with the largest amount of such Tax Deferred Deposits (and
Employer contributions, as applicable), and continuing in descending order until
all Excess Contributions have been allocated. For purposes of the preceding
sentence, the “largest” amount is determined after distribution of any amounts
distributed hereunder pursuant to Section 3.5 hereof.

 

3.9 Contributions For Periods of Qualified Military Service

Notwithstanding any provision of this Plan to the contrary, contributions,
benefits, and service credit with respect to “qualified military service,” which
shall mean any services in the uniformed services (as defined in chapter 43 of
title 38 of the United States Code) by any individual if such individual is
entitled to reemployment rights under such chapter with respect to such service,
will be provided in accordance with Section 414(u) of the Code.

 

3.10 Catch-Up Contributions

All Participants who are eligible to make elective deferrals under the 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, section 414(v) of the Code. Catch-Up Contributions shall not be taken into
account for purposes of the provisions of the Plan implementing the required
limitations of sections 402(g) and 415 of the Code. The Plan shall not be
treated as failing to satisfy the provisions of the Plan implementing the
requirements of section 401(k)(3), 401(k)(11), 401(k)(12), 410(b), or 416 of the
Code, as applicable, by reason of the making of such Catch-Up Contributions.

 

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ARTICLE 4

EMPLOYER CONTRIBUTIONS

 

4.1 Employer Matching Contributions

 

  (A) Each Employer shall contribute an Employer Matching Contribution for its
Senior Associates who have elected to make Deposits. The amount of the Employer
Matching Contribution made pursuant to this Section shall be equal to the sum of
(i) one hundred percent (100%) of the Deposits made by the Senior Associate up
to three percent (3%) of Compensation, and (ii) fifty percent (50%) of the
Deposits made by the Senior Associate that exceed three percent (3%), up to a
maximum of five percent (5%) of Compensation. For this purpose, Compensation
shall mean the Compensation used to determine the contributions made by, or on
behalf of, the Senior Associate for the same period. If a Senior Associate makes
Tax Deferred Deposits, Catch-Up Contributions, and/or Taxed Deposits in a pay
period, Tax Deferred Deposits shall be matched first, Catch-Up Contributions
next, and Taxed Deposits last.

 

  (B) All Employer Matching Contributions shall be made in cash and invested in
accordance with the provisions of Article 6 and shall be made in cash.

 

  (C) Employer Matching Contributions shall be nonforfeitable when made and
shall be subject to the same distribution requirements as Tax Deferred Deposits,
except that such contributions may not be distributed as a hardship withdrawal.

 

  (D) For purposes of this Section, the amount of the Employer Matching
Contribution to be allocated to a Participant initially shall be determined for
each separate pay period, based solely on the Compensation, Tax Deferred
Deposits, Catch-up Contributions, and Taxed Deposits of the Participant in that
pay period. Then, as of the end of the Plan Year, the Participant may become
eligible for an additional allocation of Employer Matching Contributions, based
on the Participant’s Compensation, Tax Deferred Deposits, Catch-up
Contributions, and Taxed Deposits in that Plan Year.

 

4.2 Percentage Limitation on Taxed Deposits

At such intervals as it shall deem proper, the Benefits Administration Committee
shall review the Taxed Deposits and, in the case of a Participant who has not
completed a Year of Eligibility Service, the Employer Matching Contributions
made for Participants in order to ensure that such contributions satisfy one of
the following tests:

 

  (A) The Average Contribution Percentage for Participants who are Highly
Compensated Employees for the Plan Year shall not exceed the Average
Contribution Percentage for Participants who are Nonhighly Compensated Employees
for the Plan Year multiplied by 1.25; or

 

  (B) The Average Contribution Percentage for Participants who are Highly
Compensated Employees for the Plan Year shall not exceed the Average
Contribution Percentage for Participants who are Nonhighly Compensated Employees
for the Plan Year multiplied by 2, provided that the Average Contribution
Percentage for Participants who are Highly Compensated Employees does not exceed
the Average Contribution Percentage for Participants who are Nonhighly
Compensated Employees for the Plan Year by more than two (2) percentage points.

 

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To the extent required by regulations or other Internal Revenue Service rulings
of general applicability, the Average Contribution Percentage for Participants
who are Nonhighly Compensated Employees for the Plan Year shall be adjusted, as
required by such regulations or other rulings of general applicability, to
reflect a change in the group of eligible Employees under the Plan on account of
(i) establishment or amendment of a plan, (ii) plan merger, consolidation or
spin-off, (iii) a change in the way plans are aggregated or separated for
purposes of performing the tests described in (A) and (B) above or (iv) any
combination of the above.

 

4.3 Special Rules for Contribution Percentage Limit Testing

 

  (A) The Plan may be disaggregated into two or more plans or the Plan may be
aggregated with one or more other plans, to the extent permitted by Sections
401(m), 401(a)(4) and 410(b) of the Code and the regulations thereunder.

 

  (B) Excess Annual Additions distributed to Participants in accordance with
Section 4.6 shall be disregarded in applying the tests of Section 4.2.

 

  (C) The determination and treatment of the Contribution Percentage of any
Participant shall satisfy such other requirements as may be prescribed by the
Secretary of the Treasury.

 

4.4 Adjustments To Excess Aggregate Contributions

 

  (A) Excess Aggregate Contributions, plus any gain and minus any loss allocable
thereto, shall be forfeited, if forfeitable, or if not forfeitable, shall be
distributed in cash to Highly Compensated Employees within two and one-half
months after the end of the Plan Year but in no instance later than the last day
of the Plan Year following the Plan Year for which the Excess Aggregate
Contributions were made.

 

  (B) The Excess Aggregate Contributions shall be adjusted for gain or loss. The
gain or loss allocable to Excess Aggregate Contributions for the Plan Year shall
be determined by multiplying the gain or loss allocable to the Participant’s
Taxed Deposits for the Plan Year by a fraction, the numerator of which is the
Excess Aggregate Contributions on behalf of the Participant for the Plan Year
and the denominator of which is the sum of (1) the Participant’s Account
attributable to Taxed Deposits as of the beginning of the Plan Year plus (2) the
Participant’s Taxed Deposits for the Plan Year.

Notwithstanding the foregoing, except with respect to the two taxable year
period beginning January 1, 2006, no gain or loss shall be allocated to Excess
Aggregate Contributions for the period between the end of the taxable year and
the date of the corrective distribution.

 

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  (C) Any distribution of Excess Aggregate Contributions for any Plan Year shall
be made to Highly Compensated Employees in accordance with Code
Section 401(m)(6)(C) and the rulings and regulations thereunder. If, after
performance of the percentage limitation in Section 4.2, the contribution
percentage test would still be violated as of the end of the Plan Year, then
notwithstanding any other provision hereof, every Employer Matching Contribution
and Taxed Deposit included in the Average Contribution Percentage for a Highly
Compensated Participant whose Average Contribution Percentage is greater than
the permitted maximum shall automatically be revoked to the extent necessary to
comply with such contribution percentage test of Section 4.2 and the amount of
such contribution, to the extent revoked, shall constitute an Excess Aggregate
Contribution to be distributed to such Participant (with earnings thereon as
calculated in Section 4.4(B)) or forfeited, if applicable, no later than the
last day of the Plan Year following the Plan Year for which such contribution
was made. Excess Aggregate Contributions are allocated to the Highly Compensated
Employees with the largest amounts of Employer Matching Contributions and Taxed
Deposits (and Employer contributions, as applicable), taken into account in
calculating the contribution percentage test for the Plan Year in which the
excess arose, beginning with the Highly Compensated Employee with the largest
amount of such Employer Matching Contributions and Taxed Deposits (and Employer
contributions, as applicable), and continuing in descending order until all
excess Aggregate Contributions have been allocated. For purposes of the
preceding sentence, the “largest amount” is determined after first determining
required distributions under Section 3.5 hereof, and then determining Excess
Contributions under Section 3.8(C).

 

4.5 Retirement Contributions

 

  (A) For the Plan Year beginning on January 1, 2003, each Employer shall make,
on behalf of its Employees who are Participants eligible to share hereunder and
subject to the otherwise applicable limitations of the Plan, a nondiscretionary
Retirement Contribution. The Retirement Contribution made on behalf of a
Participant who is eligible to share in the Retirement Contribution hereunder
shall be equal to the sum of such Participant’s Allocable Points as of the last
day of the Plan Year multiplied by such Participant’s Compensation for the Plan
Year and divided by one hundred. Allocable Points shall be determined in
accordance with Tab A set forth below. To be eligible to share in the Retirement
Contribution provided by this Section, the Participant either must not have
Separated from Service during the Plan Year or must have Separated from Service
in such Plan Year by reason of death, Total and Permanent Disability or
retirement on or after Normal Retirement Age.

 

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TABLE A

ALLOCABLE POINTS

 

Participant’s

      Age

   Allocable
Points

   40-44

   1

   45-49

   2

   50-54

   3

   55-59

   4

60 and up

   5      

 

   Participant’s

      Years of

Vesting Service

   Allocable
Points        0-9    1      10-14    2      15-19    3      20-24    4
     25-29    5     30 - 34    6   35 and up    7

For purposes of Table A, “Age” is the Participant’s age at last birthday on the
applicable Allocation Date. Further, for purposes of Table A, a Participant’s
Years of Vesting Service will be equal to his full Years of Vesting Service
completed as of the applicable Allocation Date.

“Allocation Date” means December 31, 2003 or, for the allocation provided under
Subsection (E), December 31, 2004.

 

  (B) In the event the allocation of Retirement Contributions would result in a
discriminatory allocation in violation of Treasury Regulation 1.401(a)(4)-1(b),
or any other applicable tax qualification requirement, the Benefits
Administration Committee shall reduce, in any manner it determines in its
discretion to be equitable, the amount of Retirement Contributions which would
otherwise be allocated to Participants who are Highly Compensated Employees for
such Plan Year, in order to satisfy such requirements.

 

  (C) All Retirement Contributions shall be made in cash and invested in
accordance with the provisions of Article 6.

 

  (D) All Retirement Contributions shall be conditioned on their deductibility
under Section 404 of the Code. Retirement Contributions shall be made when
directed by the Board of Directors, but not later than the time prescribed by
law, including extensions, for filing the income tax return of the Employer for
the Employer’s taxable year for which such contributions are deductible.

 

  (E) For the Plan Year beginning January 1, 2004, a Retirement Contribution
determined as provided above, reduced, but not below zero, by the amount, if any
of the Discretionary Profit Sharing Contribution allocated to a Participant,
shall be made to each Participant who satisfies each of the following
conditions: (i) the Participant was a Participant on December 31, 2003, (ii) the
Participant remained an Employee continuously from that date through and
including December 31, 2004, and (iii) the Participant was never a Highly
Compensated Employee during that Plan Year.

 

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  (F) No Retirement Contribution shall be made for any Plan Year beginning on or
after January 1, 2005.

 

4.6 Overall Limitation on Annual Additions

Any other provision of this Plan notwithstanding, in no event shall the total
amount allocated to a Participant’s Account under the Plan for any Limitation
Year, exceed the limitations imposed under Code Section 415, the provisions of
which are incorporated into the Plan by reference. For this purpose, the
Limitation Year shall be the Plan Year.

If, as a result of the allocation of forfeitures, a reasonable error in
estimating a Participant’s annual Compensation, a reasonable error in
determining the amount of Tax Deferred Deposits that may be made with respect to
any individual under the limits of Code Section 415, or under other limited
facts and circumstances that the Commissioner finds justifies this method of
allocation, the Annual Addition for a particular Participant would cause the
limitations of Code Section 415 applicable to that Participant for the
Limitation Year to be exceeded, the excess amounts shall not be deemed an Annual
Addition in that Limitation Year and for contributions other than Tax Deferred
Deposits and/or Taxed Deposits, such contributions shall be withheld or taken
from a Participant’s Account and held in a suspense account to be used to reduce
future contributions for the Participant (or, if the Participant ceases to be an
Employee, for remaining active Participants) in succeeding Limitation Years, as
necessary, and, for Tax Deferred Deposits and/or Taxed Deposits, such Deposits
(together with allocable income) shall be distributed to the Participant.

 

4.7 Timing of Employer Contributions

The Employer shall forward Employer Matching Contributions, Retirement
Contributions, and Discretionary Profit Sharing Contributions to the Trustee for
investment in the Trust Fund at such times as the Employer shall determine, but
not later than the time prescribed by law, including extensions, for filing the
income tax return of the Employer for the Employer’s taxable year for which such
contributions are deductible.

 

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4.8 Discretionary Profit Sharing Contributions

The Board of Directors may, in its sole discretion, authorize a supplemental
contribution to be made by each Employer on behalf of its Employees who are
eligible to share in such contribution, as hereinafter provided. By way of
example and not limitation, eligibility may be limited to Participants’ employed
in a particular line of business. The Contribution shall be referred to as a
Discretionary Profit Sharing Contribution and shall be allocated to each
eligible Participant who has not Separated from Service on or before the last
day of the Plan Year with respect to which the Discretionary Profit Sharing
Contribution is declared or who had Separated from Service in such Plan Year by
reason of death, Total and Permanent Disability or retirement on or after Normal
Retirement Age. The Board of Directors shall normally determine the amount of
the Discretionary Profit Sharing Contribution, if any, after it has reviewed the
Company’s financial performance for the Plan Year; and Participants shall be
informed of the amount of the contribution prior to the date of allocation. The
Discretionary Profit Sharing Contribution shall satisfy all applicable
requirements of the Code, shall be conditioned on its immediate deductibility
under Code Section 404, and, subject to the overall permitted disparity limits
described below, shall be allocated to the eligible Participants’ Accounts as
follows:

STEP ONE: The Discretionary Profit Sharing Contribution shall be allocated to
each eligible Participant’s Account in the ratio that the sum of each
Participant’s Compensation and Compensation in excess of the taxable wage base
in effect under section 230 of the Social Security Act at the beginning of the
Plan Year (the “TWB”) bears to the sum of all Participants’ Compensation and
Compensation in excess of the TWB, but not in excess of the Maximum Excess
Allowance. For this purpose, the Maximum Excess Allowance shall be exceeded to
the extent that the percentage of Compensation which is contributed with respect
to that portion of each Participant’s Compensation in excess of the TWB (the
“excess contribution percentage”) exceeds the percentage of Compensation
contributed with respect to that portion of each Participant’s Compensation not
in excess of the TWB (the “base contribution percentage”), by the lesser of
(A) the base contribution percentage, or (B) the greater of (i) 5.7 percentage
points, or (ii) the percentage equal to the portion of the rate of tax under
Code section 3111(a) (in effect as of the beginning of the year) which is
attributable to old age insurance.

STEP TWO: Any remaining Discretionary Profit Sharing Contribution shall be
allocated to each Participant’s account in the ratio that each Participant’s
Compensation for the Plan Year bears to all Participants’ Compensation that
year.

Overall Permitted Disparity Limits

Annual overall permitted disparity limit: Notwithstanding the preceding
paragraphs, for any Plan Year a Discretionary Profit Sharing Contribution is
allocated to any Participant who benefits under another qualified plan or
simplified employee pension, as defined in § 408(k) of the Code, maintained by
the Employer that provides for permitted disparity (or imputes disparity), the
contribution will be allocated to the account of such Participant in the ratio
that such Participant’s total Compensation bears to the total Compensation of
all Participants.

Cumulative permitted disparity limit: The cumulative permitted disparity limit
for a Participant is 35 total cumulative permitted disparity years. Total
cumulative permitted years means the number of years credited to the Participant
for allocation or accrual purposes under this Plan, any other qualified plan or
simplified employee pension plan (whether or not terminated) ever maintained by
the Employer. For purposes of determining the Participant’s cumulative permitted
disparity limit, all years ending in the same calendar year are treated as the
same year. However, a Participant who has not benefited under a defined benefit
plan or a target benefit plan maintained by the Employer for any Plan Year
beginning on or after January 1, 1994, has no cumulative permitted disparity
limit.

 

4.9 Qualified Non-Elective Contributions

The Company and each Employer may make additional discretionary contributions
(hereinafter “Qualified Non-Elective Contributions”) allocable to Nonhighly
Compensated Employees for purposes of ensuring that the Plan satisfies the
applicable requirements of Code sections 401(k)(3) and 401(m)(3). Any such
contributions shall satisfy the applicable requirements of Treas. Reg.
Section 1.401(k)-1 and Treas. Reg. Section 1.401(m)-1, the provisions of which
are incorporated by reference for this purpose.

 

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ARTICLE 5

PARTICIPANTS’ ACCOUNTS AND INVESTMENT ELECTIONS

 

5.1 Separate Accounts

The Benefits Administration Committee shall maintain, or cause to be maintained,
a separate account for each Participant which shall consist of his Personal
Account, Company Account and Rollover Account, if any. A Participant’s Personal
Account shall have separate subaccounts for amounts attributable to Tax Deferred
Deposits, Taxed Deposits, and Catch-Up Contributions. A Participant’s Company
Account shall have separate subaccounts for amounts attributable to Employer
Matching Contributions, Retirement Contributions, and Discretionary Profit
Sharing Contributions. A Participant’s Company and Personal Accounts shall have,
if applicable, separate subaccounts for amounts accumulated under plans merged
into the Plan. Each such account and subaccount will be considered a subaccount
of the Participant’s Account.

 

5.2 Valuation of Funds

There shall be determined as of each Valuation Date the fair market value of all
assets held in the Trust Fund. Such valuation shall be determined in accordance
with the principles of Section 3(26) of ERISA and the regulations thereunder and
shall give effect to brokerage fees, transfer taxes, contributions, earnings,
gains and losses, forfeitures, expenses, disbursements, and all other
transactions during the valuation period since the preceding Valuation Date.

In making such determinations and in crediting net appreciation or depreciation
and all other applicable adjustments to a Participant’s Account, the Benefits
Administration Committee may employ such accounting methods as the Benefits
Administration Committee may deem appropriate in order to fairly reflect the
fair market value of the Plan assets and each Participants’ Account. If
Investment Funds are established, the valuation of a Participant’s individual
Account shall reflect such Participant’s investment elections. For this purpose,
the Benefits Administration Committee may rely upon information provided by the
Trustee, the investment manager, or other persons believed by the Benefits
Administration Committee to be competent.

 

5.3 Investment Election

If Investment Funds are established, a Participant shall make an investment
election which shall cover his Deposits, Rollover Contributions, and Company
Contributions. The investment election shall be for a percentage amount, in one
percent (1%) increments, to be invested in one or more of the Investment Funds.

 

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Each Participant is solely responsible for the selection of his investment
options. The Trustee, the Investment Committee, the Benefits Administration
Committee, the Employer and the officers, supervisors and other employees of the
Employer are not empowered to advise a Participant as to the manner in which his
Account shall be invested. The fact that an Investment Fund is available to a
Participant for investment under the Plan shall not be construed as a
recommendation for investment in that Investment Fund. In the event no election
is made by a Participant, amounts available for election will be invested in the
Investment Fund selected by the Investment Committee for this purpose.

 

5.4 Timing of Investment Election

The investment election must be made prior to the commencement of an Employee’s
participation in the Plan or at such other time as the Benefits Administration
Committee shall establish and apply on a uniform basis. Any such election may be
changed at such time and as frequently as shall be permitted by procedures
established and applied by the Benefits Administration Committee on a uniform
basis. Each such election or change in election shall be effective with respect
to Deposits and Employer Matching Contributions made from or with respect to
Compensation payable on the next payroll processing date after election by the
Employee in accordance with procedures established by the Benefit Administration
Committee and with respect to future Retirement Contributions and Discretionary
Profit Sharing Contributions.

 

5.5 Transfer Between Investment Funds

A Participant may elect to transfer an amount equal to the value of all or part
of his Account invested in any one or more of the Investment Funds to another
one or more of such Investment Funds. Any such election shall be made in
accordance with procedures established and applied by the Benefits
Administration Committee on a uniform basis. Except as otherwise established
pursuant to Section 5.6 below, the value of amounts transferred shall be
determined as of the Valuation Date which is coincident with or next following
the date of receipt of the Participant’s election to transfer made in accordance
with procedures established by the Benefits Administration Committee.

 

5.6 Special Valuation Date

If as a result of a transfer notice the Trustee executes investment elections on
a date later than the otherwise applicable Valuation Date, the Benefits
Administration Committee may establish an appropriate Valuation Date or Dates
uniformly for similarly situated Participants in a manner which it deems
appropriate to assure the equitable treatment of all Participants, those
electing transfers as well as those having amounts in the Investment Funds from
or to which the transfers are made.

 

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ARTICLE 6

TRUST AGREEMENT

 

6.1 Trust Agreement

 

  (A) The Company has entered or will enter into a Trust Agreement which shall
be a part of the Plan. All contributions made pursuant to the provisions of the
Plan shall be paid into the Trust Fund. All such payments and increments thereon
shall be held and disbursed in accordance with the provisions of the Plan and
Trust Agreement, as each shall be applicable under the circumstances. No person
shall have any interest in, or right to, any part of the funds so held, except
as expressly provided in the Plan or Trust Agreement.

 

  (B) The Trustee shall have the exclusive authority and discretion to invest,
manage and control the assets of the Plan, except to the extent that
Participants have been given authority to direct their Accounts, to the extent
the Investment Committee has allocated the authority to manage Plan assets to
one or more investment managers (within the meaning of Section 3(38) of ERISA),
or to the extent that the Investment Committee has given the Trustee direction
with regard to the investment of Plan assets. Any investment manager appointed
by the Investment Committee shall have the exclusive authority to manage,
including the power to direct the acquisition and disposition of, the Plan
assets assigned to it by the Investment Committee.

 

6.2 Establishment of Investment Fund(s)

The Trustee, at the direction of the Investment Committee, shall establish one
or more Investment Funds having such investment objectives as may be ascribed to
each such fund by the Investment Committee. The Trustee shall establish and
maintain an Investment Fund for the purpose of allowing investment in common
stock of the Company (herein referred to as the “ADS Stock Fund”).

 

6.3 Voting and Tender of Shares

Consistent with ERISA Section 404(c), the following shall apply with respect to
the investment by Participants and Beneficiaries in Company securities:

(1) Information provided to shareholders of such Company securities shall be
provided to Participants and Beneficiaries with accounts holding such
securities.

(2) Voting, tender and similar rights with respect to Company securities shall
be passed through to Participants and Beneficiaries with accounts holding such
securities. The Trustee shall vote or tender or take other similar action with
respect to such shares solely in accordance with instructions furnished to it by
each Participant or Beneficiary, in accordance with such procedures as are
generally made available to shareholders. Shares, including fractional shares,
for which instructions are not received by the Trustee shall not be voted or
tendered.

(3) Information relating to the purchase, holding, and sale of Company
securities, and the exercise of voting, tender and similar rights with respect
to such securities, by Participants and Beneficiaries, shall be maintained in
accordance with procedures which are designed to safeguard the confidentiality
of such information, except to the extent necessary to comply with Federal laws
or state laws not preempted by ERISA.

 

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(4) The General Counsel of the Company shall be the fiduciary who is responsible
for (i) ensuring that any procedures used are sufficient to safeguard the
confidentiality of the information described in paragraph 3, (ii) such
procedures are being followed, and (iii) the independent fiduciary required by
paragraph (5), below, is appointed when necessary.

(5) An independent fiduciary shall be appointed to carry out activities relating
to any situations which the fiduciary designated in accordance with paragraph
(4), above, determines involve a potential for undue Employer influence upon
Participants and Beneficiaries with regard to the direct or indirect exercise of
shareholder rights.

 

6.4 Assumption of Risk by Participant

Each Participant (or Beneficiary) assumes the risk in connection with any
decrease in value of his separate Account, and there shall be no liability under
the Plan to a Participant in excess of the value of the assets in his Account.

ARTICLE 7

DEATH BENEFITS AND BENEFICIARY DESIGNATIONS

 

7.1 Death Benefits

 

  (A) When a Participant has a Separation from Service by reason of death or
dies after Separation from Service but before receiving benefits, the benefits
shall be payable to the Beneficiary determined pursuant to Section 7.2.

 

  (B) The payment of benefits shall be in lump sum payment and shall be made as
soon as practicable after the Benefits Administration Committee receives a
completed application that includes proof of the Participant’s death.

 

  (C) In no event, however, shall the payment of such benefits to a Beneficiary
be made later than the date permitted under Section 401(a)(9) of the Code.

 

7.2 Designation of Beneficiary

A Participant, including one who has Separated from Service but has not received
a distribution of his Plan benefits, may designate one or more Beneficiaries and
one or more contingent Beneficiaries to receive upon his death a distribution of
his Plan benefits in such proportion as such Participant designates. If,
however, such a Participant is married on the date of his death, his Beneficiary
shall be his Spouse unless a different Beneficiary designation was consented to
by his Spouse. Such consent by the Participant’s Spouse must be in writing, be
irrevocable, and given prior to the Participant’s death. Such consent must
acknowledge the effect of the Participant’s Beneficiary designation, specify the
identity of the non-Spouse Beneficiary, including contingent Beneficiaries, if
any, and the consent must be witnessed by a Plan representative or notary
public. A Participant’s Spouse must again consent, in accordance with the
requirements applicable to the original consent, to any change in Beneficiary
designation unless the original consent acknowledged that the Participant had
the ongoing consent of his Spouse to make any such change. Upon a legal
separation or dissolution of the marriage of a Participant, any designation of
the Participant’s former spouse as a Beneficiary, except as explicitly provided
in a Qualified Domestic Relations Order, shall be treated as though the
Participant’s former spouse had predeceased the Participant unless, subsequent
to the divorce or legal separation, the Participant executes another Beneficiary
designation that complies with the Plan and that clearly names such former
spouse as a Beneficiary.

 

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Any consent by his Spouse shall be valid and effective only with respect to that
Spouse. The consent of a Participant’s Spouse shall not be required if (A) the
Participant establishes to the satisfaction of the Benefits Administration
Committee that consent cannot be obtained because the Spouse cannot be located
or that there is no Spouse, or (B) the Participant and Spouse are legally
separated or the Participant has been abandoned (within the meaning of local
law) and the Participant has a court order to that effect; provided, however,
that spousal consent in (B) above is required if required by a Qualified
Domestic Relations Order. If the Spouse is legally incompetent to give consent,
the Spouse’s legal guardian (even if the guardian is the Participant) may give
consent. If (1) an unmarried Participant fails to make a Beneficiary
designation, or (2) there is some doubt or ambiguity as to the right to payment
of any Beneficiary designated by the Participant, the Benefits Administration
Committee shall direct the Trustee to pay the benefits otherwise distributable
to the Participant’s estate. In the event (1) all Beneficiaries predecease a
Participant or die within 30 days after the Participant’s death, or (2) there
are two or more Beneficiaries, and one or more predeceases the other(s), the
Benefits Administration Committee shall direct the Trustee to divide the
remaining benefit equally between the remaining surviving Beneficiaries, or if
none, to the Participant’s estate.

ARTICLE 8

VESTING AND TERMINATION OF EMPLOYMENT

 

8.1 Vesting in Personal Account and Rollover Account

A Participant shall at all times have a one hundred percent (100%) vested and
nonforfeitable interest in his Personal Account and Rollover Account, if any.

 

8.2 Vesting in Company Account

Employer Matching Contributions made with respect to periods after January 1,
2004, shall be nonforfeitable. Subject to Section 8.3, a Participant shall have
a vested and nonforfeitable right in his Company Account attributable to
Employer Matching Contributions made with respect to periods prior to January 1,
2004, and any earnings or losses attributable thereto, in accordance with the
following schedule:

 

Years of Vesting Service

   Percentage Vested

Less than 1

   0%

1 but less than 2

   20%

2 but less than 3

   40%

3 but less than 4

   60%

4 but less than 5

   80%

5 or more

   100%

 

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Effective January 1, 2007, a Participant whose employment is terminated prior to
attainment of his Normal Retirement Age (and for any reason other than death or
Total and Permanent Disability), shall have a vested and nonforfeitable right in
his Company Account attributable to Retirement Contributions and Discretionary
Profit Sharing Contributions, and any earnings or losses attributable thereto,
in accordance with the following schedule:

 

Years of Vesting Service

   Percentage Vested

Less than 3

   0%

3 or more

   100%

Any amount remaining in a Participant’s Company Account after his nonforfeitable
percentage is determined upon his Separation from Service shall be forfeited by
him as provided in Section 8.5. The forfeited amounts shall be held in the
Forfeiture Account.

 

8.3 Vesting After Specified Events

Notwithstanding his Years of Vesting Service, a Participant who attains his
Normal Retirement Age while in the service of an Employer shall be 100% vested
in the balance in his Company Account. Moreover, if a Participant shall Separate
from Service (1) because of Total and Permanent Disability, (2) because of
death, or (3) because of the discontinuance (through no fault of his own) of the
operation of a unit of an Employer in which he was employed or of the particular
work in which he was engaged, as determined in its discretion by the Benefits
Administration Committee, such Participant shall be 100% vested in the balance
in his Company Account.

 

8.4 Distributions With Less Than 100% Vesting

If a Participant who is less than one hundred percent (100%) vested in his
Company Account receives a distribution from such Company Account following
termination of employment, then his vested interest in such Account upon
reemployment prior to incurring five (5) consecutive One-Year Breaks in Service
shall be equal to P(AB + R x D)) - R x D) where:

P is the vested percentage at the time at which the Participant’s vested
interest cannot increase;

AB is the account balance of the Company Account determined at the time at which
the Participant’s vested interest cannot increase;

D is the amount of the distribution; and

 

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R is the ratio of the account balance of the Company Account determined at the
time at which the Participant’s vested interest cannot increase to such account
balance determined after the distribution.

 

8.5 Forfeitures

If a Participant’s employment is terminated, any portion of his Company Account
in which the Participant does not have a nonforfeitable interest shall be
forfeited as of the earlier of (i) the date he receives a distribution of any
portion of his vested Accrued Benefit, or (ii) the first date he incurs five
(5) consecutive One-Year Breaks in Service. If a Participant’s employment
terminates at a time when he has no vested interest in any portion of his
Accrued Benefit, the Participant shall be deemed to have received a distribution
of his entire Account balance upon his termination of employment.

If a Participant incurs a forfeiture under the preceding paragraph and again
becomes an Employee prior to incurring five (5) consecutive One-Year Breaks in
Service, the Employer shall reinstate (as of the Participant’s Reemployment
Commencement Date), the dollar amount of his Company Account forfeited,
unadjusted for any gains or losses which occurred during said One-Year Breaks in
Service. However, in the case of a Participant who received an actual
distribution upon termination, the amounts forfeited will be reinstated only
upon satisfaction of the following conditions:

 

  (1) the Participant repays to the Plan the full amount of the distribution
previously made to him, and

 

  (2) the repayment is effected within five (5) years of the date on which he is
credited with an Hour of Service for the performance of duties for an Employer.

The amount required to reinstate a forfeited Company Account shall be paid from
the Forfeiture Account to the extent such Account is sufficient. To the extent
the available forfeitures are insufficient to fully reinstate Participants’
previously nonvested amounts, the Employer will make an additional contribution
to the Plan sufficient to fully reinstate such amounts.

 

8.6 Distribution of Vested Benefits

Benefits payable in the case of a Participant whose employment is terminated
shall be paid in accordance with Article 7 in the case of death, or Article 9 in
the case of a Participant who retires or otherwise terminates employment with a
vested benefit.

 

8.7 Forfeiture Account

The Trustee or its delegate shall establish and maintain in the Trust a
Forfeiture Account for purposes of holding and investing amounts formerly
allocated to individual Accounts of Participants but forfeited pursuant to this
Article. All amounts credited to the Forfeiture Account shall be invested in an
Investment Fund that emphasizes preservation of principal.

 

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The Benefits Administration Committee may, in its discretion, apply amounts held
in the Forfeiture Account (A) to restore amounts previously forfeited by
Participants but required to be reinstated upon resumption of employment, (B) to
pay Plan expenses, to the extent not paid by an Employer, (C) to correct an
error made or resolve a claim filed under the Plan, or (D) to reduce any
Employer contribution for the current or next succeeding Plan Year.

 

8.8 Service Upon Reemployment

Except as provided in Section 2.8, if a Participant has a Separation from
Service and again becomes an Employee, his Years of Vesting Service completed
before his reemployment will be included in determining his vested and
nonforfeitable interest in his pre-break and post-break balances in his Company
Accounts after he again becomes an Employee.

Except as provided in Section 2.8, if an Employee terminates employment before
becoming a Participant and again becomes an Employee, he will receive credit for
his prior Years of Vesting Service and Years of Eligibility Service.

ARTICLE 9

DISTRIBUTION OF BENEFITS

 

9.1 Vested Benefits

 

  (A) A Participant who has a Separation from Service shall be entitled to a
benefit equal to the vested interest in the balance in his Personal and Company
Accounts determined pursuant to Article 8.

 

  (B) Pursuant to the operation of Section 4.1, Section 4.5 and/or Section 4.8,
a Participant may be entitled to receive an additional allocation after
Separation from Service. The Participant’s vested interest in such amount shall
be subject to distribution pursuant to this Article 9 as of the Valuation Date
coincident with or next following the Allocation Date as of which such amount is
allocated to the Participant’s Account.

 

  (C) A Participant who is 100% vested in his Company Account pursuant to
Article 8 on his Separation from Service (or the surviving Spouse of such
Participant) and who has not given written consent to a distribution of benefits
may elect a distribution from the Plan of all or any portion of his Account at
any time. A Participant who is less than 100% vested in his Company Account
pursuant to Article 8 on his Separation from Service (or the surviving Spouse of
such Participant) may elect to receive a complete distribution of his Vested
Account at any time or may receive a partial distribution of his vested Account
to the extent provided in Section 10.3 and Section 10.4. Each distribution
request is to be made in accordance with procedures and rules promulgated by the
Benefits Administration Committee. All such withdrawal requests are subject to
the approval of the Benefits Administration Committee.

 

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A withdrawal hereunder shall be made from the sources in the Account in the
order determined by the Benefits Administration Committee.

 

9.2 Valuation Date

 

  (A) For purposes of distributions, the value of a Participant’s Account shall
be determined on the Valuation Date following authorization of the distribution
of such Account or a portion thereof by the Benefits Administration Committee.

The payment of a Participant’s distribution shall be made as soon as practicable
after such Valuation Date in the form of a lump-sum payment in cash.
Notwithstanding the foregoing, a Participant who elects to invest a portion of
his account in the ADS Stock Fund, may elect that all or a portion of his
Account be distributed in shares of common stock of the Company; provided,
however, that the value of any fractional shares shall be distributed in cash.

 

  (B) Except as otherwise provided in Section 9.3 hereof, or unless a
Participant otherwise elects, in no event shall the payment of benefits to a
Participant who has a Separation from Service begin later than the 60th day
after the latest of the close of the Plan Year in which (1) the Participant
attains Normal Retirement Age, (2) occurs the 10th anniversary of the year in
which the Participant commenced participation in the Plan or (3) occurs the
Participant’s Separation from Service.

 

9.3 Consent to Distribution of Benefits

The benefits payable to a Participant who has a Separation from Service other
than because of death shall not be distributed unless the Participant first
gives written consent to such distribution. Such written consent shall be
provided by the Participant on a form required by the plan administrator.
However, such consent shall not be necessary if the value of the Participant’s
vested benefits is $1,000 or less, determined without taking into account the
value of the Participant’s Rollover Account. In that case, the Benefits
Administration Committee shall direct the Trustee to cause the entire vested
benefit to be paid to such Participant (or the Participant’s Beneficiary in the
case of a deceased Participant) without regard to the Participant’s election or
the consent of said Participant’s Spouse. In the event a Participant is to
receive a distribution and subsequently is reemployed by the Company or other
Employer before the distribution is made, such distribution shall not be made.

 

9.4 Deferral of Benefits

 

  (A) The benefits of a Participant who has a Separation from Service other than
because of death may be deferred to a date not later than that permitted under
Section 401(a)(9) of the Code (“Deferred Distribution Date”). During such
deferral period, the Participant shall not make any Deposits or, except as
otherwise provided under the Loan Program, apply for a loan after his Separation
from Service.

 

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  (B) In the event of the death of a Participant during the deferral period
prior to distribution of all Plan benefits, the surviving Spouse shall have the
right to defer all or any portion of the benefits payable to the surviving
Spouse and shall be permitted to designate a Beneficiary to receive benefits in
the event of such Spouse’s death. If the Spouse fails to designate a Beneficiary
or if the Beneficiary designated by the Spouse fails to survive the Spouse, any
benefits payable because of the Spouse’s death shall be paid to the Spouse’s
estate.

The Plan shall charge and collect a reasonable administrative maintenance fee,
which may be adjusted from time to time, to be deducted from the Accounts of
persons whose benefits are deferred.

 

9.5 Required Minimum Distributions

Any benefit provided under the Plan shall be subject to the requirements of Code
Section 401(a)(9), the provisions of which are incorporated by reference,
including, without limitation, the incidental death benefit requirement of Code
Section 401(a)(9)(G). Distributions shall be made in accordance with this
section and with Treas. Reg. Sections 1.401(a)(9)-2 through 1.401(a)(9)-9, which
override any distribution provision in the Plan to the extent inconsistent. To
summarize these requirements, the entire interest of each employee shall be
distributed to such employee not later than the required beginning date, or will
be distributed, beginning not later than the required beginning date, in
accordance with such regulations, over the life of such employee or over the
lives of such employee and a designated beneficiary (or over a period not
extending beyond the life expectancy of such employee or the life expectancy of
such employee and a designated beneficiary). The term required beginning date
means April 1 of the calendar year following the later of the calendar year in
which the employee attains age 70 1/2, or the calendar year in which the
employee retires.

 

9.6 Notices to Participants; Distributions Within 30 Days

The Benefit Administration Committee shall provide to the Participant notices of
the following: (1) deferral rights and information on optional benefits required
by Section 1.411(a)-11(c) of Income Tax Regulations, and (2) a written
explanation of the direct rollover and tax withholding information required by
Section 402(f) of the Code. Such notices shall be provided to the Participant no
earlier than 180 days and no less than 30 days before the Annuity Commencement
Date.

If a distribution is one to which Sections 401(a)(11) and 417 of the Code do not
apply, such distribution may commence less than 30 days after the notice
required under Section 1.411(a)-11(c) of the Income Tax Regulations is given,
provided that: (1) the plan administrator clearly informs the Participant that
the Participant 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,
if applicable, a particular distribution option), and (2) the Participant, after
receiving the notice, affirmatively elects a distribution.

 

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ARTICLE 10

WITHDRAWALS WHILE EMPLOYED

 

10.1 Limits on Withdrawals

No withdrawals, other than withdrawals provided by this Article 10, shall be
permitted prior to the Participant’s Separation from Service.

 

10.2 Withdrawal of Taxed Deposits and Rollover Accounts

A Participant may elect, in accordance with procedures established by the
Benefits Administration Committee, to withdraw from his Personal Account an
amount in cash not exceeding the value of amounts attributable to his Taxed
Deposits and amounts in his Rollover Account as of the date the withdrawal is
requested in accordance with procedures established by the Benefits
Administration Committee.

 

10.3

Withdrawal After Attainment of Age 59 1/2

A Participant may elect at any time after the attainment of age 59 1/2 to
withdraw from his (i) Personal Account and (ii) Company Account an amount in
cash not in excess of the vested value thereof determined as of the Valuation
Date coincident with or next following the date on which the Participant
requests a withdrawal in accordance with procedures established by the Benefits
Administration Committee. A withdrawal hereunder shall be made from sources in
the Account in the order determined by the Benefits Administration Committee.

 

10.4 Withdrawal to Alleviate Financial Hardship

A Participant, who does not have any amounts credited in his Account which are
subject to withdrawal under Sections 10.2 or 10.3, may apply to the Benefits
Administration Committee for approval to withdraw, as of the Valuation Date
which is coincident with or next following the date of approval of such
application by the Benefits Administration Committee, an amount in cash
necessary to satisfy and alleviate a financial hardship. Such withdrawal may be
made from the following sources in the Participant’s Account, and in the order
determined by the Benefits Administration Committee: World Financial Network
Plan Matching Account; HSI Prior Plan Match; World Financial Network Plan
Retirement Account; Tax Deferred Deposits (but no earnings thereon); and HIS
Prior Plan Pre-Tax Deferred Deposits.

The Benefits Administration Committee shall approve any such application only to
relieve an immediate and heavy financial need of the Participant (including his
Spouse, Beneficiary, or any dependent), but only in an amount not in excess of
the amount required to relieve such financial need, and only if, and to the
extent, such need cannot be satisfied from other resources reasonably available
to him (including assets of his Spouse, Beneficiary, and minor children
reasonably available to him). For purposes of this paragraph, an immediate and
heavy financial need shall be limited to any one of the following circumstances:
(a) medical expenses (within the meaning of Section 213(d) of the Code) incurred
by the Participant, his Spouse, his Beneficiary, or any dependent, or amounts
necessary for these persons to obtain medical care described in Code
Section 213(d); (b) purchase (excluding mortgage payments) of the Participant’s
principal residence; (c) payment of tuition and related educational fees for the
next 12 months of post secondary education for the Participant, his Spouse, his
Beneficiary, or any dependent of the Participant (d) the need to prevent (i) the
eviction of the Participant from his principal residence or (ii) the foreclosure
on the mortgage of his principal residence; (e) payments for burial or funeral
expenses for the employee’s deceased parent, spouse, Beneficiary, child or other
dependent); (f) expenses for the repair of damage to the employee’s principal
residence that would qualify for the casualty deduction under section 165
(determined without regard as to whether the loss exceeds 10% of adjusted gross
income); and (g) such other immediate and heavy financial needs as determined by
the Commissioner of the Internal Revenue Service and announced by publication of
revenue rulings, notices, and other documents of general applicability.

 

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A distribution will be deemed necessary to satisfy the immediate and heavy
financial need of the Participant only if:

 

  (A) the distribution is not in excess of the amount of the immediate and heavy
financial need;

 

  (B) the Participant has obtained all distributions, other than hardship
distributions, and all nontaxable loans currently available under all plans
maintained by the Employer;

 

  (C) the Plan, and all other plans maintained by the Employer, provide that the
Participant’s Tax Deferred Deposits and Taxed Deposits, if any, (except for
mandatory after-tax employee contributions to a defined benefit plan) will be
suspended for a six-month period after receipt of the hardship distribution; and

 

  (D) the Plan, and all other plans maintained by the Employer, provide that the
Participant may not make Tax Deferred Deposits for the Participant’s taxable
year immediately following the taxable year of the hardship distribution in
excess of the applicable limit under Section 402(g) of the Code for such next
taxable year less the amount of such Participant’s Tax Deferred Deposits for the
taxable year of the hardship distribution.

 

10.5 Loans Prior to Hardship Withdrawals

For purposes of Section 10.4 above, the Benefits Administration Committee shall
grant a Participant’s request for a hardship withdrawal only if the Participant
borrows the maximum permissible amounts under the Employer’s retirement plans to
the extent such borrowings would not increase the Participant’s financial need.
The amount of the loan shall be the lesser of (i) the said maximum amount or
(ii) the amount necessary to alleviate the hardship.

 

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10.6 In-Service Withdrawals

This Section shall apply only to Participants who had an Account transferred
from the World Financial Network Plan and, further, shall only apply to such
Participant’s Account balance (exclusive of amounts attributable to Tax Deferred
Deposits) as of December 31, 1997, adjusted for subsequent income, expenses,
gains and losses or any other applicable charge or credit. Such Participant who
is fully vested in his or her Account and who has participated in the Plan for
at least five years may obtain an in-service withdrawal from his or her Account
(other than his or her Account attributable to Tax Deferred Deposits). Thirty
percent (30%) of a Participant’s Account (other than his or her Account
attributable to Tax Deferred Deposits) is available for in-service withdrawal
pursuant to this Section, less the percentage of the Participant’s Account
previously withdrawn. A Participant may request no more than one in-service
withdrawal, in multiples of five percentage points, in any calendar quarter,
beginning with the calendar quarter next following the date of which the
Participant becomes fully vested. A request for an in-service withdrawal shall
be made in accordance with such procedures as the Benefits Administration
Committee shall prescribe. An in-service withdrawal shall be charged against a
Participant’s Account (other than his or her Account attributable to Tax
Deferred Deposits) from the following sources in the order set forth (the vested
value in each category shall be exhausted before funds are taken from the next
category) with Investment Funds within each category being liquidated on a
pro-rata basis:

 

  (A) Rollovers

 

  (B) Employer Matching Contributions

 

  (C) Retirement Contributions.

 

10.7 Withdrawal on Account of Disability

A Participant who has become disabled may apply for a distribution of his
Account on the same basis as if he had a Separation from Service under
Section 9.1. For this purpose, a Participant will be deemed to be disabled only
if the Participant (1) has a Total and Permanent Disability, or (2) either
qualifies to receive disability insurance benefits under the Company’s Long Term
Disability Plan or, if the Participant is not eligible to participate in such
plan, would so qualify, as determined by the Benefits Administration Committee
in its sole discretion.

ARTICLE 11

LOANS

The Benefits Administration Committee may, in its discretion, establish a
program under the Plan to provide loans to Participants (the “Loan Program”). If
so established, the Loan Program shall be embodied in a separate written
document that is incorporated by reference into the Plan.

 

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ARTICLE 12

ADMINISTRATION OF THE PLAN

 

12.1 Investment Committee

The Investment Committee shall have the responsibility for control and
management of the assets of the Plan, and, subject to Section 6.1(B), shall also
be the named fiduciary of the Plan, as provided for in ERISA, for control and
management of the assets of the Plan. The Investment Committee shall consist of
not less than three members who shall be appointed from time to time by the
Board of Directors, which shall also determine which member shall serve as
Chair, and shall serve at its pleasure, without compensation, unless otherwise
determined by the Board of Directors. If otherwise eligible, the fact that an
Employee is a member of the Investment Committee shall not preclude his
participation in the Plan or acting as trustee of any of the funds under the
Plan.

 

12.2 Operation of Investment Committee

The Investment Committee shall elect a Secretary, who may or may not be a member
of the Investment Committee. The Investment Committee shall conduct its business
and hold meetings as determined by it from time to time. As to all matters
requiring the exercise of discretion, action shall be taken upon the agreement
or direction of at least a majority of the Investment Committee. In lieu of a
meeting, the Investment Committee may act by unanimous written consent. In the
control and management of the assets of the Plan, the Investment Committee may:

 

  (A) allocate among its members, and designate other persons to carry out,
fiduciary and nonfiduciary responsibilities with respect to the control and
management of Plan assets (other than trustee responsibilities as defined in
Section 405(c)(3) of ERISA); and

 

  (B) consult with legal counsel, who may be counsel to the Company.

 

12.3 Records of Investment Committee

The Investment Committee shall keep a record of all its proceedings.

 

12.4 Rights and Powers of Investment Committee

In carrying out its functions under the Plan, the Investment Committee shall
have the right and power:

 

  (A) to establish and implement overall investment objectives, philosophy, and
policy relating to asset investment mix or to new investments for the Plan;

 

  (B) to recommend to the Board of Directors adoption of significant
investment-related amendments to the Plan;

 

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  (C) to appoint or remove the Trustees;

 

  (D) to appoint, review the actions of, and remove the custodians and
investment management consultants for the Plan;

 

  (E) to appoint, review the actions of, and remove investment managers for the
Plan, approve related fee arrangements (including estimated annual budget and
controls relating to such expenses and fees), investment guidelines, and
restrictions applicable to such managers;

 

  (F) to approve, ratify, or oversee all investments made by investment managers
who may be Employees or which may be subsidiaries or affiliates;

 

  (G) to approve investment arrangements with insurance carriers, banks or
financial institutions under the Plan;

 

  (H) to approve all matters related to investment related transactions between
the Plan and a party in interest (as defined in ERISA), where such approval is
required by ERISA;

 

  (I) to exercise such additional powers as are necessary in the judgment of the
Investment Committee to carry out the above-mentioned responsibilities or as may
from time to time be delegated to the Investment Committee by the Board of
Directors.

 

12.5 Benefits Administration Committee

Administration of the payment of all benefits to Participants or their
Beneficiaries and of the other functions vested by the Plan in the Benefits
Administration Committee shall be the responsibility of the Benefits
Administration Committee, which shall also be both the administrator and the
named fiduciary of the Plan for the review of denied benefit claims, as those
terms are defined in ERISA. As administrator of the Plan, the Benefits
Administration Committee shall be responsible for compliance with the reporting
and disclosure requirements of ERISA, and as named fiduciary for review of
denied benefit claims, it shall have the power and duty to make the final
determination under the Plan with respect to review of denied claims for Plan
benefits. The Benefits Administration Committee shall consist of not less than
three members who shall be appointed from time to time by the Board of Directors
and shall serve at its pleasure. If otherwise eligible, the fact that an
Employee is a member of the Benefits Administration Committee shall not preclude
his participating in the Plan or acting as trustee of any funds under the Plan.

 

12.6 Operation of Benefits Administration Committee

The Benefits Administration Committee shall elect a Chairman from among its
members and a Secretary, who may or may not be a member of the Benefits
Administration Committee. The Benefits Administration Committee shall conduct
its business and hold meetings as determined by it from time to time. As to all
matters requiring the exercise of discretion, action shall be taken upon the
agreement or direction of at least a majority of the Benefits Administration
Committee. In lieu of a meeting, the Benefits Administration Committee may act
by unanimous written consent. In the administration of the Plan, the Benefits
Administration Committee may: (A) allocate among its members, and designate
other persons to carry out, fiduciary and nonfiduciary responsibilities with
respect to administration and review of denied benefit claims; and (B) consult
with legal counsel, who may be counsel to the Company.

 

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12.7 Records of Benefits Administration Committee

The Benefits Administration Committee shall keep a record of all its
proceedings.

 

12.8 Rights and Powers of Benefits Administration Committee

The Benefits Administration Committee shall have full discretionary authority
with respect to the exercise of the following rights and powers and the
determination of any question related thereto, including a question of fact:

 

  (A) to interpret the provisions of the Plan;

 

  (B) to adopt such rules and regulations with regard to the administration of
the Plan as are consistent with the terms of the Plan and of the trust agreement
or agreements establishing the Trust and to determine the terms and provisions
of the forms of statements, acceptances, consents, authorizations, elections,
designations, and any other instruments to be executed and delivered by
Participants as a condition of, or in order -to exercise, any rights under the
Plan, and generally, to take all action which it is herein contemplated shall be
taken by the Benefits Administration Committee;

 

  (C) to determine the eligibility of Employees (including, whether an Employee
is active, and the dates by which an eligible Employee shall be required to
consent to the making of payroll deductions or reductions as a condition to
commencing his or her participation in the Plan as of any specified date) and
their Periods of Service, including, but without limitation, Hours of Service,
One-Year Periods of Severance, Periods of Military Service, Years of Eligibility
Service and Years of Vesting Service, and to require such proof from any
Participant as it considers necessary to determine that such Participant has a
condition of Total and Permanent Disability;

 

  (D) to determine what constitutes Compensation;

 

  (E) subject to the specific provisions of the Plan, to determine the times at
which amounts shall be credited to the Company Accounts and Personal Accounts of
Participants;

 

  (F) to administer the Loan Program and to determine whether or not a
withdrawal request of a Participant on the basis of financial hardship should be
approved, and to require such proof from a Participant as it considers necessary
to make any such determination;

 

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  (G) to determine the percentage of Compensation which a Participant may
deposit under the Plan in respect of a Plan Year as provided in Section 3.2 of
Article 3;

 

  (H) to determine whether or not to suspend, limit or retroactively reduce the
percentage of Tax Deferred or Taxed Deposits elected by any or all Participants
who are “highly compensated employees” within the meaning of Section 414(q) of
the Code and the duration of any such limitation imposed;

 

  (I) to determine the disposition (including, in its discretion, whether to
charge the amount against the amount of shares and cash in the Forfeiture
Account) of clerical, arithmetical, and other errors made under the Plan or to
resolve any claim filed under the Plan;

 

  (J) to determine how the Plan should be administered to conform with law or to
meet special circumstances not anticipated or not covered in the Plan; and

 

  (K) to establish and administer procedures to determine whether domestic
relations orders are qualified under Section 414(p) of the Code;

 

  (L) to designate an Employer for purposes of Section 2.7(C) and arrange for a
transfer of assets as provided therein;

 

  (M) to direct the Trustee to return contributions as provided in Section 14.9;
and

 

  (N) to delegate to one or more persons other than members of the Benefits
Administration Committee, or to authorize one or more members of the Benefits
Administration Committee to act on its behalf to carry out, any duty or power
which would otherwise be a responsibility, including a fiduciary responsibility,
of the Benefits Administration Committee under the Plan and any reference in the
Plan to tile Benefits Administration Committee shall include a reference to such
delegatee(a) as is appropriate to the context.

 

12.9 Claims Procedures

Pursuant to procedures established by the Benefits Administration Committee,
notice in writing shall be provided to any Participant (including any retired or
former Participant) or Beneficiary whose claim for benefits under the Plan has
been denied. Such notice shall be provided no later than 90 days after the claim
was submitted (45 days if the claim relates to a Plan determination of
disability (“disability claim”), subject to an extension of the same length.
Such notice shall set forth the specific reason for such denial, shall be
written in a manner calculated to be understood by the claimant, and, provided
review is requested with 60 days (180 days in the case of a disability claim)
after receipt by the claimant of written notification of denial of his claim
shall afford a reasonable opportunity to any claimant whose claim for benefits
has been denied for a full and fair review by the Benefits Administration
Committee of the decision denying the Claim. All determinations of the Benefits
Administration Committee shall be final, conclusive, and binding on all
interested parties. No Benefits Administration Committee member shall be
entitled to act on or decide any matter relating solely to himself or any of his
rights under the Plan.

 

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12.10 Indemnification

The Company shall indemnify and reimburse the members of the Board of Directors
of the Company, the Investment Committee, and the Benefits Administration
Committee and any other employee of an Employer who has been delegated any
fiduciary responsibility in connection with the Plan, with respect to any
action, inaction, or matter undertaken by such persons in good faith for or on
behalf of the Plan or its participants which is consistent with the purposes of
the Plan.

ARTICLE 13

AMENDMENT OR TERMINATION

 

13.1 Right to Amend

 

  (A) The Board of Directors reserves the right, by duly authorized resolution,
at any time and from time to time (and retroactively if deemed necessary or
appropriate to meet the requirements of the Code, ERISA, or any similar laws, or
the rules and regulations from time to time in effect under any of such laws or
to conform with governmental regulations or other policies), to modify or amend,
in whole or in part, any or all of the provisions of the Plan.

 

  (B) No such modification or amendment, however, shall make it possible for any
part of the corpus or income of the fund to be used for, or diverted to,
purposes other than for the exclusive benefit of Participants and their
beneficiaries under the Plan prior to the satisfaction of all liabilities with
respect thereto. Moreover, no amendment or modification shall make it possible
to deprive any Participant of a previously accrued benefit, except to the extent
permitted by Section 412(c)(8) of the Code.

 

  (C) Notwithstanding anything herein to the contrary, a representative of the
Benefits Administration Committee may, at its direction, execute any amendment
to the Plan that (1) reflects the terms of any agreements entered into by the
Company relating to prior employee service required to be taken into account
under the Plan pursuant to such agreements, or (2) which does not add materially
to the cost of maintaining the Plan or affect Participants’ rights under the
Plan in a material way.

 

13.2 Right of Adoption and Termination

Any entity affiliated with the Company may adopt the Plan for the benefit of its
employees. However, any such adoption must be approved by the Board of
Directors. Furthermore, the Board of Directors retains the exclusive right and
the power to terminate the Plan at any time with respect to any or all
Employers.

 

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13.3 Obligations Upon Merger, Consolidation or Transfer

In the event of any merger or consolidation with, or transfer of assets or
liabilities to, any other plan, each Participant shall be entitled to receive a
benefit if the Plan were to terminate immediately after the merger,
consolidation, or transfer, which is not less than the benefit he would have
been entitled to receive if the Plan had terminated immediately before the
merger, consolidation, or transfer.

In the event of the merger of any other qualified plan into the Plan, to the
extent required by law, a Participant’s Years of Vesting Service and Years of
Eligibility Service under the Plan shall include the years of vesting service
and the years of eligibility service standing to his credit under such merged
plan on the day immediately preceding the day of such plan merger. Years of
Vesting Service credited under this Section shall be credited only for purposes
of determining a Participant’s nonforfeitable percentage in his Accounts under
Article 8 and shall not be credited for purposes of determining a Participant’s
Retirement Contribution under Article 4.

The merger of the Plan with any other plan shall not reduce or eliminate any
benefit protected under Code Section 411(d)(6), except to the extent permitted
by law.

 

13.4 Obligations Upon Termination, Partial Termination or Discontinuance

 

  (A) While each Employer intends to continue the Plan indefinitely,
nevertheless it assumes no contractual obligation as to the Plan’s continuance.
In the case of any termination, partial termination or complete discontinuance
of contributions, each Participant who is then an Employee and who is affected
by the termination, partial termination or complete discontinuance of
contributions shall have a one hundred percent (100%) nonforfeitable interest in
the value of all amounts credited to his Participant’s Account.

 

  (B) Upon a complete or partial termination of the Plan, whether in writing or
in operation, subject to the right of the Board of Directors to amend the Plan
to provide for a liquidation and distribution of the assets of the Plan (i) the
Benefits Administration Committee and the Investment Committee shall remain in
existence, (ii) no further deposits or Company contributions shall be made under
the Plan for affected Participants, (iii) all of the provisions of the Plan
shall remain in full force and effect (other than the provisions for Deposits
and Employer Contributions) and (iv) the amount in each affected Participant’s
Account shall continue to be held under the Plan, and shall be nonforfeitable.

 

13.5 Continued Funding After Plan Termination

Anything in the Plan to the contrary notwithstanding, no Employer, upon any
termination or partial termination of the Plan, shall have any obligation or
liability whatsoever to make any further payments to the Trustee for the benefit
of Participants under the Plan, except for any contributions payable prior to
any termination of the Plan. Except as provided in the foregoing, neither the
Trustee, the Board of Directors, the Benefits Administration Committee, the
Investment Committee, nor any Participant, Employee, nor beneficiary, shall have
any right to compel an Employer to make any payment after the termination or
partial termination of the Plan.

 

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13.6 Distribution Upon Disposition of Assets

A Participant’s Account may be distributed to the Participant as soon as
administratively feasible after the sale or other disposition of at least 85
percent of the assets used by the Employer in the trade or business in which the
Participant is employed if the purchaser does not maintain the Plan and if the
Participant continues employment with the purchaser.

The Account of a Participant employed by a subsidiary of an Employer may be
distributed to the Participant as soon as administratively feasible after the
sale or other disposition of the Employer’s interest in the subsidiary to an
entity that is not a related Employer as long as the purchaser does not maintain
the Plan and the Participant continues employment with such subsidiary.

 

13.7 Conversion Period

However, notwithstanding any provision of the Plan to the contrary, during any
conversion period, in accordance with procedures established by the Employer,
the Employer may temporarily suspend, in whole or in part, certain provisions of
the Plan, which may include, but are not limited, a Participant’s right to
change his Deposit Election, to change his investment election, to borrow or
withdraw from his Account, or to obtain a distribution from his Account.

ARTICLE 14

GENERAL PROVISIONS

 

14.1 No Contract of Employment

Neither the establishment of the Plan nor any action hereafter taken by the
Trustee, the Company, any other Employer, the Investment Committee or the
Benefits Administration Committee shall. be construed as giving to any Employee
the right to be retained in employment or, except as otherwise provided herein,
any right or claim to any benefits under the Plan if discharged, unless the
right to such benefits would have accrued if the Employee had at the time of
such discharge voluntarily Separated from Service.

 

14.2 Incapacity

If the Benefits Administration Committee determines that any person entitled to
any distribution under the Plan is a minor, or incompetent, or unable to care
for his affairs by reason of a physical or mental disability, the Committee may
direct the Trustee to pay such distribution in whole or in part, to any person
who, in the Committee’s opinion, is caring for or supporting the minor,
incompetent or disabled person, unless a claim is made for such distribution by
a duly appointed guardian or committee of such individual. The Benefits
Administration Committee shall not have any responsibility to follow or oversee
the applications of amounts so paid and such distribution shall be a complete
discharge of any obligation to the extent of the amount distributed.

 

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14.3 Payment Satisfies Claims

Any payment of a distribution under the Plan to any Participant, Beneficiary,
legal representative or any guardian or committee appointed for such Participant
or Beneficiary shall, to the extent of such payment, be in fall satisfaction of
all claims against the Plan, Trustee, Company, an Employer, or Benefits
Administration Committee. The Plan may require any recipient of a distribution
to execute a receipt and release in such form as the Benefits Administration
Committee determines.

 

14.4 Prescribed Forms

Except as provided in Section 14.5, all elections, authorizations, applications,
and other actions required of Employees, Participants, or Beneficiaries under
the Plan must, in order to be effective, be made in writing on forms prescribed
for such purposes by the Benefits Administration Committee and delivered or
communicated to the Benefits Administration Committee, as the Benefits
Administration Committee may direct, by such dates as may be prescribed by the
Benefits Administration Committee. Participants and Beneficiaries must furnish
the Benefits Administration Committee such evidence or information, including
change of address, as the Committee considered necessary or desirable for the
purpose of administering the Plan and the benefits of each such person are
conditioned upon prompt furnishing of all evidence or information requested.

 

14.5 Telephonic Voice Response Service or Electronic Systems

Notwithstanding anything in the Plan to the contrary, if so required by the
Benefits Administration Committee, any election, application or authorization of
an Employee, Participant, Beneficiary or Alternate Payee shall be made by the
response of such person in compliance with the rules established by the Benefits
Administration Committee with respect to such telephone voice response service
or other electronic systems as may be established by the Benefits Administration
Committee. Without limitation of the foregoing, responses on such voice response
service or electronic systems may be directed to the Trustee or any agent
designated by the Trustee or the Benefits Administration Committee, and persons
shall be required to execute such forms as may be required by the Trustee or
such agent in connection with establishing and controlling entry to such
service.

Any such voice response service or other electronic systems shall provide for
written confirmation to an Employee, Participant, Beneficiary or Alternate Payee
of elections and authorization made thereunder, and elections and authorizations
so made and so confirmed shall be binding on such person.

 

14.6 Temporary Investment of Assets

Any funds held in any account under the Plan or allocated to Participants and
not yet invested as directed by the Participant or required by the Plan may,
pending the disposition or investment of such funds, be temporarily invested in
interest-bearing obligations of a short-term nature. For such purposes, funds
may be commingled.

 

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14.7 Attainment of Age

A Participant shall be deemed to have attained a given age on the first moment
of the anniversary of his birth corresponding to such age.

 

14.8 Alienation of Benefits

Except as provided in this Section and Section 17.1, or to the extent required
by law, no benefit deliverable, transferable, or payable to a Participant under
the Plan shall be subject in any manner to anticipation, assignment, pledge,
alienation, or charge by any Participant, and any attempt so to anticipate,
assign, pledge, alienate, or charge the same shall be void; nor shall any such
benefit be in any manner liable for or subject to the debts, contracts,
liabilities, or torts of any Participant; nor shall any interest of any
Participant under the Plan be subject to garnishment, attachment, lien,
execution, or levy of any kind.

A Participant’s benefit may be reduced if a court order or requirement to pay
arises from: (1) a judgment of conviction for a crime involving the Plan; (2) a
civil judgment (or consent order or decree) that is entered by a court in an
action brought in connection with a breach (or alleged breach) of fiduciary duty
under ERISA; or (3) a settlement agreement entered into by the Participant and
either the Secretary of Labor or the Pension Benefit Guaranty Corporation in
connection with a breach of fiduciary duty under ERISA by a fiduciary or any
other person. The court order, judgment, decree, or settlement agreement must
specifically require that all or part of the amount to be paid to the Plan be
offset against the Participant’s Plan benefits.

 

14.9 No Guarantee of Benefits by Company

Neither the Company nor any other Employer guarantees any of the benefits or
payments provided under the Plan, but Employer Contributions once made shall be
irrevocable. Except as provided herein or permitted from time to time by the
Code or ERISA, no part of any of the funds in the possession of the Trustee
shall revert to the Company or any other Employer or be diverted to or used for
any purposes other than for the exclusive benefit of Participants and their
Beneficiaries; provided, however, that in the event that the Benefits
Administration Committee shall direct the return of any contribution to the
Trust Fund and shall certify with respect to such contribution that (i) such
contribution has been made by an Employer by a mistake of fact, (ii) such
contribution has been conditioned on initial qualification of the Plan under
Section 401 of the Code and that such qualification has been denied or revoked,
or (iii) such contribution has been conditioned upon the deductibility thereof
under Section 404 of the Code and that such deduction has been disallowed or
redetermined, the Trustee shall return such contribution (or the value thereof
if less) to the Employer that made such contribution in accordance with such
direction, but in no event shall any such return be made later than the
expiration of one year following the payment of any such contribution in the
case of a direction under (i) above, the denial or revocation of qualification
in the case of a direction under (ii) above, or the disallowance or
redetermination of the deduction in the case of a direction under (iii) above.

 

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14.10 Payment of Expenses

Unless paid by an Employer, expenses of the Plan shall be paid out of the Trust.

 

14.11 Statement of Accounting

The Benefits Administration Committee will use its best efforts to furnish not
less than once each calendar year to each Participant a statement of his
Account, and shall furnish or make available at its offices copies of the
statements of the Trustee with respect to the Trust. Any Participant desiring to
make objection as to any matters covered by the statement of Account shall give
written notice to the Benefits Administration Committee within 60 days after the
date the statement was furnished to him. Failure to object within such period
shall bar any right (except as otherwise required by ERISA) thereafter to object
to any of the matters covered by such statement.

 

14.12 Plan May be Sued

The Plan may sue or be sued as an entity separate from the Company. Except as
otherwise required by ERISA, every right of action by a Participant, former
Participant or Beneficiary with respect to the Plan or Trust, irrespective of
the place where such action may be brought, shall be barred after the expiration
of three years from the date of Separation from Service of the Participant or
the date of receipt of the notice of denial of a claim for benefits, if earlier.

 

14.13 Inability to Find Payee

If the Benefits Administration Committee is unable to make or direct the payment
of any benefit due under the Plan to the person entitled thereto (“Payee”) for a
period of one year after such benefit became payable because the whereabouts of
such person cannot be ascertained, notwithstanding the Committee’s reasonable
efforts to locate the Payee including, among other things, the mailing of a
notice by registered or certified mail to the Payee’s last known address as
shown on the records of the Benefits Administration Committee or the Company,
then the Benefits Administration Committee shall file a report with the
Secretary of the Treasury, as provided for in Section 105 of ERISA and in
Section 6057(c) of the Code, containing information on the benefit rights of the
Payee. If, within a period of at least one additional year, the Benefits
Administration Committee is unable to make or direct the payment, then such
benefit shall be paid to the person or persons in the following classes of
successive preference: (A) Payee’s Spouse, (B) one or more of the Payee’s
children as the Benefits Administration Committee shall determine and in such
proportions as said Committee shall determine, (C) Payee’s parents equally, and
(D) one or more of the Payee’s brothers or sisters as the Benefits
Administration Committee shall determine and in such proportions as said
Committee shall determine. During any period in which a benefit is not paid, the
amount thereof may be transferred to and remain in an Investment Fund intended
to provide preservation of principal and interest income pending further
disposition. If any benefit is paid to any relative of the Payee as provided
above, all obligations of the Plan and Trust shall be fully discharged with
respect to the amount paid. If the Benefits Administration Committee is unable
to make or direct the payment to a relative of the Payee as provided above, the
Benefits Administration Committee may declare such benefit forfeited and the
amount thereof placed in the Forfeiture Account under the Plan. If, however, a
Payee is located subsequent to his benefits being forfeited pursuant to the
preceding sentence, such benefit shall be restored.

 

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14.14 State Law

Except to the extent preempted or superseded by Section 514 of ERISA, the Plan
shall be construed and enforced according to the laws of the State of Delaware,
and all the provisions thereof shall be administered according to the laws of
said State (other than the conflicts of laws provisions).

 

14.15 Construction

In determining the meaning of any provisions of the Plan, words importing the
masculine gender shall include the feminine and the singular shall include the
plural, unless the context requires otherwise. Terms defined in Article 1 shall
have a corresponding meaning when used in a different tense and, if defined in
the singular, when used in the plural. Headings of Articles in the Plan are for
convenience only and are not intended to modify or affect the meaning of the
substantive provisions of the Plan.

ARTICLE 15

ROLLOVER CONTRIBUTIONS AND TRANSFERS

 

15.1 Rollover of Funds From Other Plans

In the event that an individual: (1) becomes an Employee other than an Employee
described in Section 2.3; (2) has been a participant in an employer’s plan
described in Section 401(a) of the Code, which is exempt from tax under
Section 501(a) of the Code; and (3) receives from such trust an eligible
rollover distribution, as defined in Section 402(c)(4) of the Code, and,
provided that such property consists of money, or, in the case of an Employee
who became an Employee as a result of the Company’s acquisition of his former
employer, such property consists of money or money and a loan or loans from such
former employer’s tax-qualified 401(k) plan, then, with the consent of the
Benefits Administration Committee, the eligible Employee may rollover any
portion of the distribution to this Plan on or before the sixtieth (60th) day
after the day on which he received such property and, if the distribution
includes a loan, on or before ninety (90) days of the date the Participant first
became eligible to effect the rollover, subject to the Employee providing such
information and documentation as the Benefits Administration Committee requires
in order to determine the amount in an eligible rollover distribution under
Section 402(c)(4) of the Code. Such rollover may be made even though such
Employee has not satisfied the age and service requirements for Plan
participation at such time. Furthermore, the eligible Employee may direct the
prior trust to transfer any portion of the distribution directly to the Plan.
Upon receipt by the Plan, such amount shall be credited to the Rollover Account
established hereunder pursuant to Article 5. The eligible Employee shall have a
one hundred percent (100%) vested and nonforfeitable right to all amounts
credited to his Rollover Account as a result of such transfer.

 

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15.2 Rollover of Funds From Conduit Individual Retirement Account (IRA)

In the event that an individual

 

  (A) becomes an Employee other than an Employee described in Section 2.3, and

 

  (B) has established an Individual Retirement Account or Individual Retirement
Annuity (hereinafter collectively referred to as “IRA”) described in Sections
408(a) and 408(b), respectively, of the Code, which IRA is comprised solely of
amounts constituting a rollover contribution of an eligible rollover
distribution, as defined in Section 402(c)(4) of the Code, from an employer’s
plan described in Section 401(a) of the Code, which is exempt from tax under
Section 501(a) of the Code, or an annuity plan described in Section 403(a) of
the Code, and

 

  (C) received from such IRA the entire amount of the account or the entire
value of the annuity, including any earnings on such sums, pursuant to
Section 408(d)(3)(A)(ii) of the Code, then, with the consent of the Benefits
Administration Committee, the eligible Employee may transfer the entire amount
received in such distribution to this Plan (for the benefit of such individual)
on or before the sixtieth (60th) day after the day on which he received such
payment or distribution, and upon receipt by the Plan, such amount shall be
credited to the Rollover Account established hereunder pursuant to Article 5.
Such transfer may be made even though such Employee has not satisfied the age
and service requirements for Plan participation at such time.

The eligible Employee shall have a one-hundred percent (100%) vested and
nonforfeitable right to all amounts credited to his Rollover Account.

 

15.3 Transfers Directly from Other Plans

There may be transferred directly from the trustee of any other qualified plan
to the Trustee, subject to the approval of the Benefits Administration Committee
and the Trustee, all or any of the assets, including after-tax contributions, if
any, held (whether by trustee, custodian or otherwise) under the Plan for any
eligible Employees (other than Employees described in Section 2.3); provided,
however, that the transfer satisfies Section 411(d)(6) of the Code. Such
transfer may be made even though such Employee has not satisfied the age and
service requirements for Plan participation at such time. A separate account
shall be established for such assets for each eligible Employee.

Notwithstanding the foregoing, an eligible Employee may not transfer any amount
which, if transferred into this Plan would cause the Plan to be a direct or
indirect transferee plan, within the meaning of Section 401(a)(11)(B)(iii)(III)
of the Code and any regulations or rulings effective thereunder, of a plan
described in Section 401 (a)(11)(B)(i) or (ii) of the Code. Transfers pursuant
to this Section may be made regardless of whether the eligible Employee has
satisfied any applicable eligibility service requirement of this Plan.

 

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15.4 Mistaken Rollover

If it is determined that a Participants rollover contribution did not qualify
under the Code for a tax free rollover, then as soon as reasonably possible the
balance in the Participant’s Rollover Account shall be:

 

  (A) segregated from all other Plan assets,

 

  (B) treated as a non-qualified trust established by and for the benefit of the
Participant, and

 

  (C) distributed to the Participant.

Such a mistaken rollover contribution shall be deemed never to have been a part
of the Plan and shall not adversely affect the tax qualification of the Plan
under the Code.

ARTICLE 16

TOP-HEAVY PROVISIONS

 

16.1 Top-Heavy Plan Defined

This Article shall apply if the Plan is a “Top-Heavy Plan” as hereinafter
provided. The Plan shall be a Top-Heavy Plan in a Plan Year if, as of the
Determination Date, the present value of the cumulative accrued benefits (as
calculated below) of all Key Employees exceeds sixty percent (60%) of the
present value of the accumulative accrued benefits under the Plan of all
Employees and Key Employees, but excluding the value of the accrued benefits of
former Key Employees.

All plans that are part of the Required Aggregation Group shall be treated as a
single plan. Solely for the purpose of determining if the Plan, or any other
plan included in a Required Aggregation Group of which this Plan is a part, is
Top-Heavy, the accrued benefit of a Non-Key Employee shall be determined under
(A) the method, if any, that uniformly applies for accrual purposes under all
plans maintained by the affiliated employers, or (B) if there is no such method,
as if such benefit accrued not more rapidly than the slowest accrual rate
permitted under the fractional accrual rate of Section 411(b)(1)(C) of the Code.

For this purpose, the present value of an Employee’s accrued benefit is equal to
the sum of (A) and (B) below:

 

  (A) The sum of (i) the present value of an Employee’s accrued retirement
income in each defined benefit plan which is included in the Required
Aggregation Group determined as of the most recent valuation date within the
twelve (12) month period ending on the Determination Date and as if the Employee
had terminated service as of such valuation date and (ii) the aggregate
distribution made with respect to such Employee during the five-year period
ending on the Determination Date from all defined benefit plans included in the
Required Aggregation Group and not reflected in the value of his accrued
retirement income as of the most recent valuation date. In determining present
value for all plans in the Required Aggregation Group, the actuarial assumptions
set forth for this purpose in the Employer’s defined benefit plan shall be
utilized and the commencement date shall be determined taking any
nonproportional subsidy into account; and

 

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  (B) The sum of (i) the aggregate balance of his accounts in all defined
contribution plans which are part of the Required Aggregation Group as of the
most recent valuation date within the twelve (12) month period ending on the
Determination Date, (ii) any contributions allocated to such an account after
the valuation date and on or before the Determination Date and (iii) the
aggregate distributions made with respect to such Employee during the five-year
period ending on the Determination Date from all defined contribution plans
which are part of the Required Aggregation Group and not reflected in the value
of his account(s) as of the most recent valuation date.

Provided, however, the following special rules shall apply unless allowed to
“sunset.”

 

  (i) 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 section 416(g)(2) of the Code during the 1-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 Section 416(g)(2)(A)(i) of the
Code. 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
“5-year period” for “1-year period.”

 

  (ii) The accounts of any individual who has not performed services for the
Employer during the 1-year period ending on the determination date shall not be
taken into account.

 

16.2 Other Definitions

For the purposes of this Article, the following terms shall have the following
meanings:

 

  (A) “Determination Date” means the last day of the preceding Plan Year except
that in the case of the first Plan Year, the term “Determination Date” shall
mean the last day of the Plan Year.

 

  (B) “Employee” means (i) a current employee or (ii) a former employee who
performed services for the Employer during the Plan Year containing the
Determination Date or any of the four (4) preceding Plan Years.

 

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  (C) “Key Employee” means any employee or former employee (including any
deceased employee) who at any time during the plan year that includes the
determination date was an officer of the Employer having annual compensation
greater than $130,000 (as adjusted under section 416(i)(1) of the Code for Plan
Years beginning after December 31, 2002), a 5-percent owner of the Employer, or
a 1- percent owner of the Employer having annual compensation of more than
$150,000. For this purpose, annual compensation means compensation within the
meaning of section 415(c)(3) of the Code. The determination of who is a Key
Employee will be made in accordance with Section 416(i)(1) of the Code and the
applicable regulations and other guidance of general applicability issued
thereunder.

 

  (D) “Non-Key Employee” means an Employee who is not a Key Employee.

 

  (E) “Required Aggregation Group” means

 

  (1) Each qualified plan of the Employer in which a Key Employee participates
or participated (regardless of whether the Plan has terminated); and

 

  (2) Each other such qualified plan of an Employer which enables any plan in
which a Key Employee participates to meet the requirements of Section 401(a)(4)
or Section 410 of the Code.

 

16.3 Top-Heavy Contributions

Solely in the event that a Non-Key Employee is not covered by a defined benefit
plan of the Employer which provides the minimum benefit required by
Section 416(c)(1) of the Code during a Plan Year in which this Plan is a
Top-Heavy Plan, the Employer contributions and forfeitures allocated to each
such Non-Key Employee who has not separated from service by the end of the Plan
Year shall be equal to not less than the lesser of:

 

  (A) Three percent (3%) of such Participant’s Compensation in the Plan Year, or

 

  (B) The percentage of such Participant’s Compensation in the Plan Year which
is equal to the percentage at which contributions and forfeitures are made to
the Key Employee for whom such percentage is the highest for the year.

The percentage referred to in Paragraph (B) above shall be determined by
dividing the contributions and forfeitures-allocated to the Key Employee by such
Employee’s Compensation. For purposes of this Section, Tax Deferred Deposits
shall be disregarded in determining the amount of Employer Contributions
allocated to Non-Key Employees. The Employer shall make such additional
contribution to the Plan as shall be necessary to make the allocation described
above. The provisions of this section apply without regard to contributions or
benefits under Social Security or any other Federal or State law. An adjustment
may be made to this Section, as permitted under Treasury Regulations, in the
event an Employee is also entitled to an increased benefit in any other Top
Heavy plan while it is in the Aggregation Group with this Plan. Employer
Matching Contributions shall be taken into account for purposes of satisfying
the minimum contribution requirements of Section 416(c)(2) of the Code and the
Plan. Employer Matching Contributions that are used to satisfy the minimum
contribution requirements may nevertheless be treated as Employer Matching
Contributions for purposes of the Actual Contribution Percentage test and other
requirements of Section 401(m) of the Code.

 

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A Non-Key Employee who is otherwise entitled to a minimum contribution under
this Section shall not fail to receive the required minimum contribution because
the Employee is excluded from participation because the Employee failed to make
elective Tax Deferred Deposits under the Plan or because the Employee failed to
accrue 1,000 Hours of Service during the Plan Year.

ARTICLE 17

QUALIFIED DOMESTIC RELATIONS ORDERS (QDROs)

 

17.1 Terms of a QDRO

Notwithstanding the provisions of Section 14.8, if the Benefits Administration
Committee determines an order to be a “Qualified Domestic Relations Order,”
within the meaning of Code Section 414(p), payment of benefits shall be made in
accordance with the terms of such order, except that, if the value of the
benefits to be paid to the Alternate Payee does not exceed $1,000, then such
benefits shall be paid in a lump sum as soon as administratively practicable
following the date that the order is deemed to be qualified.

 

17.2 Notification of Receipt of Order

The Benefits Administration Committee shall promptly notify a Participant and
any other Alternate Payee of the receipt of a Qualified Domestic Relations Order
and of the Plan’s procedure for determining whether the order meets the
requirements of a Qualified Domestic Relations Order. Within a reasonable period
of time after the receipt of such order, the Benefits Administration Committee,
in accordance with such procedures as it shall from time to time establish,
shall determine whether such order meets the requirements of a Qualified
Domestic Relations Order, and shall notify the Participant and each Alternate
Payee of such determination.

ARTICLE 18

DIRECT ROLLOVER PROVISIONS

 

18.1 Application of Article

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

 

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18.2 Definitions

 

  (A) Eligible Rollover Distribution

An Eligible Rollover Distribution is any distribution of all or any portion of
any benefit due to the Distributee, except that an Eligible Rollover
Distribution does not include: 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 other Distributee or other joint lives (or
joint life expectancies) of the Distributee and the Distributee’s designated
beneficiary, or for a specified period of ten (10) years or more; any
distribution to the extent such distribution is required under Section 401(a)(9)
of the Code; the portion of any distribution that is not includible in gross
income (determined without regard to the exclusion for net unrealized
appreciation with respect to employer securities); any hardship distribution
described in Section 401(k)(2)(B)(i)(IV) of the Code (or any distribution made
upon hardship); and any other distribution(s) that is reasonably expected to
total less than $200 during a Plan Year. A portion of a distribution shall not
fail to be an eligible rollover distribution merely because the portion consists
of after-tax employee contributions which are not includible in gross income.
However, such portion may be transferred only to an individual retirement
account or annuity described in section 408(a) or (b) of the Code, or to a
qualified defined contribution plan described in section 401(a) or 403(a) of the
Code 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.

 

  (B) Eligible Retirement Plan

An eligible retirement plan is 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), a qualified
trust described in Code Section 401(a), an annuity contract described in Code
Section 403(b), or an eligible plan under Code Section 457(b) (maintained by a
state, political subdivision of a state, or any agency or instrumentality of a
state or political subdivision of a state), where the plan sponsor agrees to
accept the distributee’s eligible rollover distribution and, in the case of a
457(b) plan or 403(b) annuity contract, also agrees to separately account for
such transferred amounts; the definition of an eligible retirement plan shall
also apply in the case of a eligible rollover distribution to a surviving spouse
or to a spouse or former spouse who is an alternate payee, as defined in Code
Section 414(p).

 

  (C) Distributee

A Distributee includes an Employee or former Employee. In addition, the
Employee’s or former Employee’s surviving spouse or Beneficiary and the
Employee’s or former Employee’s spouse or former spouse who is the alternate
payee under a Qualified Domestic Relations Order are Distributees with regard to
the interest of the spouse, former spouse, or Beneficiary.

 

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  (D) Direct Rollover

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

This amendment and restatement of the Plan is executed this 18th day of
February, 2010, to be effective as previously stated in the Preamble.

 

ADS ALLIANCE DATA SYSTEMS, INC. By:  

/s/ Calvin Hilton

Title:  

Vice President – Benefits

 

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APPENDIX A

SPECIAL SERVICE CREDITING PROVISIONS

The following shall establish to what extent, if any, service with a prior
employer shall be credited for purposes of determining Years of Eligibility
Service and Years of Vesting Service, for Employees who were employed by the
following companies immediately prior to being employed by the Company. Any such
credit shall be based entirely on records provided to the Company by the prior
employer.

 

Employing Company

  

Years of Eligibility

  

Years of Vesting

Abacus and Data Management Divisions of DoubleClick Inc. (“Abacus”)    All
service recognized for this purpose under the 401(k) plan previously sponsored
by Abacus, but only if employed by the Company as of February 1, 2007.    All
service recognized for this purpose under the 401(k) plan previously sponsored
by Abacus, but only if employed by the Company as of February 1, 2007. AEP, Inc.
(“AEP”)*    Date of hire by AEP, but only if employed by the Company as of
03/01/2003    Date of hire by AEP, but only if employed by the Company as of
03/01/2003 Atrana Solutions, Inc. (“Atrana”)    Date of hire by Atrana, but only
if employed by the Company as of May 14, 2005.    Date of hire by Atrana, but
only if employed by the Company as of May 14, 2005. Big Designs, Inc. (“Big”)   
Date of hire by Big, but only if employed by the Company as of August 15, 2006.
   Date of hire by Big, but only if employed by the Company as of August 15,
2006. Bigfoot Interactive, Inc. (“Bigfoot”)    Date of hire by Bigfoot, but only
if employed by the Company as of September 24, 2005.    Date of hire by Bigfoot,
but only if employed by the Company as of September 24, 2005. Capstone
Consulting Partners, Inc. (“Capstone”)*    Date of hire by Capstone if employed
by Capstone on 11/1/2004 and hired by the Company on or before 11/2/2004.   
Date of hire by Capstone if employed by Capstone on 11/1/2004 and hired by the
Company on or before 11/2/2004. ConneXt    Date of hire with ConneXt if employed
by ConneXt on 08/23/2001    Date of hire with ConneXt if employed by ConneXt on
08/23/2001

 

A-1

--------------------------------------------------------------------------------

Employing Company

  

Years of Eligibility

  

Years of Vesting

CPC Associates, Inc. (“CPC”)    Date of hire by CPC, but only if employed by the
Company as of October 1, 2006.    Date of hire by CPC, but only if employed by
the Company as of October 1, 2006. Conservation Billing Services, Inc. (“CBSI”)*
   Date of hire by CBSI, but only if employed by the Company as of 09/16/2003   
Date of hire by CBSI, but only if employed by the Company as of 09/16/2003
Dresser Industries (“Dresser”)    Date of hire with Dresser if employed by
Dresser on 07/15/1997    Date of hire with Dresser if employed by Dresser on
07/15/1997 DoubleClick, Inc. (“DoubleClick”)    Date of hire by DoubleClick, but
only if employed by the Company as of April 3, 2006.    Date of hire by
DoubleClick, but only if employed by the Company as of April 3, 2006. Epsilon
Marketing Services, Inc. (“Epsilon”)*    Date of hire by Epsilon if employed by
Epsilon on 10/31/2004 and hired by the Company on 11/1/2004 or if employed by
Epsilon’s affiliate on 12/31/2004 and hired by the Company on or before
1/1/2005, but no less than one Year of Eligibility Service.    Date of hire by
Epsilon if employed by Epsilon on 10/31/2004 and hired by the Company on
11/1/2004 or if employed by Epsilon’s affiliate on 12/31/2004 and hired by the
Company on or before 1/1/2005. ExoLink, Inc. (“ExoLink”)    Date of hire with
ExoLink, but only if employed by the Company as of 01/01/2003    Date of hire
with ExoLink, but only if employed by the Company as of 01/01/2003 Frequency
Marketing, Inc. (“FMI”)    Date of hire with FMI if employed with FMI on
12/31/2001    Date of hire with FMI if employed with FMI on 12/31/2001 Harmonic
Systems    Date of hire with Harmonic Systems if employed by Harmonic Systems on
08/11/1998    Date of hire with Harmonic Systems if employed by Harmonic Systems
on 08/11/1998

 

A-2

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Employing Company

  

Years of Eligibility

  

Years of Vesting

Huntington National Bank

(“HNB”)

   Date of hire with HNB if employed by HNB on 07/19/1998    Date of hire with
HNB if employed by HNB on 07/19/1998 iCom Information & Communications L.P.
(“iCom”)    Date of hire by iCom, but only if employed by the Company as of
February 6, 2006.    Date of hire by iCom, but only if employed by the Company
as of February 6, 2006. Loyalty RealTime, Inc. (formerly d/b/a Loyalty RealTime,
LLC (“LRI”)    Date of hire with LRI if employed with LRI on 12/31/2001    Date
of hire with LRI if employed with LRI on 12/31/2001

Mail Box Capital Corporation

(“Mail Box”)

   Date of hire with Mail Box if employed by Mail Box on 09/24/2001    Date of
hire with Mail Box if employed by Mail Box on 09/24/2001 National City Card
Services Division of National City Bank Columbus (“NBCC”)    Date of hire with
NBCC if employed with NBCC on 11/22/1996    Date of hire with NBCC if employed
with NBCC on 11/22/1996 Orcom Solutions, Inc. (“Orcom”)*    Date of hire by
Orcom, but only if employed by the Company as of 12/02/2003, or within 30 days
thereafter    Date of hire by Orcom, but only if employed by the Company as of
12/02/2003, or within 30 days thereafter Specialty Retailers (TX), LP
(“Specialty”) *    Date of hire by Specialty, but only if employed by the
Company as of 09/12/2003    Date of hire by Specialty, but only if employed by
the Company as of 09/12/2003 SPS (The Associates) (“SPS”)    Date of hire with
SPS if employed with SPS on 07/14/1999    Date of hire with SPS if employed with
SPS on 07/14/1999 SPS Fleetshare (The Associates) (“SPS”)    Date of hire with
SPS if employed by SPS on 07/14/1999 and on 06/30/2000    Date of hire with SPS
if employed by SPS on 07/14/1999 and on 06/30/1999 Utilipro    Date of hire with
Utilipro if employed by Utilipro on 02/28/2001    Date of hire with Utilipro if
employed by Utilipro on 02/28/2001

 

* Affected Employees never become eligible to receive a Retirement Contribution.

 

A-3

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first AMENDMENT TO

THE ALLIANCE DATA SYSTEMS 401(K) AND RETIREMENT savings PLAN

(amended and restated as of January 1, 2008)

ADS Alliance Data Systems, Inc. hereby adopts this Amendment No. 1 to the
Alliance Data Systems 401(k) and Retirement Savings Plan (the “Plan”), effective
as of May 1, 2009, to expand the group of terminated participants to whom the
partial withdrawal option is available.

18.2.2 Section 9.1(C) shall be amended deleting its second sentence and by
substituting the phrase “incurs a” for the following in its first sentence:

“is 100% vested in his Company Account pursuant to Article 8 on his”

IN WITNESS WHEREOF, this amendment has been executed on this 5th day of May
2009, but effective as provided above.

 

ADS ALLIANCE DATA SYSTEMS, INC. By:  

/s/ Calvin Hilton

 

1

--------------------------------------------------------------------------------

SECOND AMENDMENT TO

THE ALLIANCE DATA SYSTEMS 401(K) AND RETIREMENT savings PLAN

(amended and restated as of January 1, 2008)

ADS Alliance Data Systems, Inc. hereby adopts this Amendment No. 2 to the
Alliance Data Systems 401(k) and Retirement Savings Plan (the “Plan”), effective
as of January 1, 2008, in order to address issues raised by the Internal Revenue
Service in reviewing the Plan’s application for determination.

Section 1.34 shall be amended to replace the phrase “primary direction and
control” with the phrase “primary direction or control.”

The first paragraph of Section 4.6 of the Plan shall be amended in its entirety
to read as follows:

Any other provision of this Plan notwithstanding, in no event shall the total
amount allocated to a Participant’s Account under the Plan for any Limitation
Year, exceed the limitations imposed under Code Section 415, the provisions of
which are incorporated into the Plan by reference. For this purpose, the
Limitation Year shall be the Plan Year and any and all adjustments needed to
comply with these limits will be made under this Plan.

Section 16.1(B)(i) of the Plan shall be amended to replace the phrase
“separation from service” with the phrase “severance from employment.”

IN WITNESS WHEREOF, this amendment has been executed on this 16th day of
February, 2010, but effective as provided above.

 

ADS ALLIANCE DATA SYSTEMS, INC. By:  

/s/ Calvin Hilton

--------------------------------------------------------------------------------

THIRD AMENDMENT TO

THE ALLIANCE DATA SYSTEMS 401(K) AND RETIREMENT SAVINGS PLAN

(amended and restated as of January 1, 2008)

ADS Alliance Data Systems, Inc. hereby adopts this Amendment No. 3 to the
Alliance Data Systems 401(k) and Retirement Savings Plan, amended and restated
as of January 1, 2008 (the “Plan”), effective as provided below. This amendment
is adopted to provide for counting service earned by transferring employees and
to reflect certain provisions of the Pension Protection Act of 2006 (“PPA ‘06”).

1. Effective January 1, 2008, Section 18.2 of the Plan shall be amended to
expand the definition of “eligible retirement plan” provided therein to include
a “Roth IRA,” within the meaning of Code section 408A.

2. Effective November 1, 2009, Appendix A of the Plan shall be amended by adding
the following new language at the end thereof:

 

Employing Company

  

Years of Eligibility

  

Years of Vesting

Milford and Bensalem Divisions of Charming Shoppes Receivables Corporation
(“Charming”)    All service recognized for this purpose under the 401(k) plan
previously sponsored by Charming, but only if hired by the Company as of October
30, 2009, or such later date provided in the Purchase Agreement.    All service
recognized for this purpose under the 401(k) plan previously sponsored by
Charming, but only if hired by the Company as of October 30, 2009, or such later
date provided in the Purchase Agreement.

IN WITNESS WHEREOF, this amendment has been executed on this 18th day of
December, 2009, but effective as provided above.

 

ADS ALLIANCE DATA SYSTEMS, INC. By:  

/s/ Calvin Hilton