FX ENERGY, INC.

401(k) STOCK BONUS PLAN

RESTATED EFFECTIVE JANUARY 1, 2002

Prepared for

FX ENERGY, INC.

by

CALLISTER NEBEKER & McCULLOUGH

 

ARTICLE I  ESTABLISHMENT AND RESTATEMENT

 

1.01Establishment: This Plan is an amendment and restatement of the FX Energy,
Inc. 401(k) Profit Sharing Plan (“Prior Plan”) and is signed and executed on the
day set forth at the end of this Plan, effective for all purposes (except as
specifically set forth hereafter) as of January 1, 2002. This Plan is
established and maintained by FX Energy, Inc., a corporation organized and
existing under the laws of Nevada, with its principal offices located at Salt
Lake City, Utah, hereinafter referred to as the “Plan Sponsor.” With the consent
of FX Energy, Inc., this Plan may be adopted by other Employers affiliated with
FX Energy, Inc.

 

1.02         History: Effective as of January 1, 1999, FX Energy, Inc.
established the FX Energy, Inc. 401(k) Profit Sharing Plan (“Original Plan”) and
executed as part of the Original Plan a Trust Agreement to provide retirement
benefits for eligible Employees of FX Energy, Inc. and its affiliated companies.
The Original Plan was subsequently restated and amended effective January 1,
2004, to comply with all requirements of the legislation known collectively as
“GUST” and to include amendments to reflect certain provisions of the Economic
Growth and Tax Relief Reconciliation Act of 2001 (“EGTRRA”) (the “GUST Plan”).

 

1.03         Intent: FX Energy, Inc. intends by this Plan to amend, restate and
supersede the GUST Plan for the benefit of its Employees and those Employees of
its affiliated companies who shall meet the eligibility requirements hereinafter
set forth and for the benefit of the beneficiaries of such Employees,
respectively, as hereinafter provided. FX Energy, Inc., also intends that this
Plan shall permit FX Energy, Inc. to make contributions of Employer Securities
and shall permit Participants to invest in additional shares of Employer
Securities. FX Energy, Inc. further intends that this Plan shall meet all the
requirements of the Internal Revenue Code of 1986 (“Code”) and the Employee
Retirement Income Security Act of 1974 (“ERISA”). In addition to the 401(k)
provisions herein, FX Energy, Inc., intends that this Plan be a stock bonus plan
and hold Employer Securities as contributed. The Plan shall be interpreted,
wherever possible, to comply with the terms of the Code and ERISA and all formal
regulations and rulings issued thereunder.

 

1.04         EGTRRA Provisions: This Plan incorporates certain provisions
intended to comply in good faith with of the Economic Growth and Tax Relief
Reconciliation Act of 2001 (“EGTRRA”). These provisions are to be construed in
accordance with EGTRRA and guidance issued thereunder. Unless otherwise
indicated provisions included in this Plan in compliance with EGTRRA shall be
effective as of the first day of the first plan year beginning after December
31, 2001. Provisions included in this Plan that conform to EGTRRA shall
supersede all other provisions of the Plan to the extent those provisions are
inconsistent therewith.

 

1.05         Limitation on Applicability: The provisions of this Plan shall
apply only to persons who are or who become Participants in this Plan on or
after the Effective Date. Except as specifically provided in this Plan, the
provisions of the Prior Plan will continue to apply to persons who are former
Employees on the Effective Date, unless and until such time as such persons may
again become Participants in this Plan.

 

ARTICLE II  DEFINITIONS OF TERMS

 

As used in this Plan and Trust Agreement, the following words and phrases shall
have the meanings indicated, unless the context clearly requires another
meaning.

 

2.01         “Account” shall mean the Account established and maintained by the
Plan Administrator for a Participant with respect to any interest in the
Investment Fund. Each Participant’s Account shall be credited or charged with
contributions, distributions, earnings and losses as provided herein. The
following separate sub-accounts shall be established for each Participant, as
applicable, and in the aggregate they shall constitute the Participant’s
Account:

 

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

 

(a)

“Participant Elective Deferral Account” shall mean the Account that is
attributable to the contributions made by the Employer pursuant to an election
by the Participant under Section 5.01.

 

 

(b)

“Participant Rollover Account” shall mean the Account that is attributable to
contributions received pursuant to Section 5.05.

 

 

(c)

“Employer Matching Contribution Account” shall mean the Account that is
attributable to matching contributions made by the Employer pursuant to
Sections 5.06 and 5.06A.

 

 

(d)

“Employer Profit-Sharing Contribution Account” shall mean the Account that is
attributable to the Profit-Sharing contributions made by the Employer pursuant
to Section 5.07.

 

 

(e)

“Employer Securities Account” shall mean the Account maintained for each
Participant to hold the Participant’s share of Employer Securities (including
fractional shares) contributed in kind by the Employer to the Trust, forfeitures
of Employer Securities, stock dividends on Employer Securities and Employer
Securities acquired by the Trust pursuant to Participant investment direction.

 

 

(f)

“General Investments Account” shall mean the Account that is attributable to all
contributions made to the Plan for the benefit of the Participant that are not
comprised of Employer Securities, together with all forfeitures, earnings and
accruals thereon.

 

 

(g)

“Predecessor Plan Account” shall mean the Account that is attributable to assets
transferred from a Predecessor Plan (“Transferred Benefits”).

 

Certain sub-accounts may include or incorporate assets from other sub-accounts.
The maintenance of separate sub-accounts is for accounting purposes only and
segregation of the assets of the Plan shall not be required.

 

2.02         “Accrued Benefit” shall mean, as of any date, the sum of the values
in each of a Participant’s Accounts as of the most recent preceding Valuation
Date, plus any contributions to and minus any distributions from the Accounts
since the Valuation Date, plus the cash surrender value of all Insurance
Contracts and allocated annuity contracts purchased for a Participant.

 

2.03         “Administratively Feasible” shall mean, when determining the date
by which a Participant may receive a distribution of his or her Accrued Benefit
from the Plan, a date that reasonably follows the final determination by the
Plan Administrator of all factors that affect the value or amount of the balance
in the Participant’s Account. Such factors shall include the valuation of the
assets attributable to the Account and the determination of all costs and
expenses associated with the Account and the assets attributable thereto that
must be paid prior to or in connection with the distribution. The Plan
Administrator shall not make any distribution prior to the time the Plan
Administrator shall have determined, within its sole and reasonable discretion,
that a correct and complete valuation of the Account has been accomplished and
that all attributable costs and expenses have been determined and applied, or in
the alternative, provision for their application has been made. In regard to
providing for application of costs and expenses, whenever any attributable cost
or expense has not or cannot be determined within a reasonable time following a
request for distribution, the Plan Administrator may establish a reasonable
maximum percentage that can be distributed from the Participant’s Account until
such time as the Plan Administrator has determined (and applied, as appropriate)
all additional costs applicable to the Participant’s Account. If so elected by
the Participant, he or she shall receive distribution of that percentage portion
of his or her Account that the Plan Administrator has confirmed as
distributable. The remainder shall be distributed once the Plan Administrator
has determined and applied all additional costs deductible from the
Participant’s Account. The Plan Administrator shall provide any required notice
to the Participant and comply with all applicable laws and regulations when
determining and setting the maximum distribution percentage.

 

With respect to any distribution to a Participant that the Plan may or would be
entitled to offset by application of ERISA §206(d)(4), no such distribution
shall be Administratively Feasible prior to the date on which a final order or
judgment is entered or could be entered, or a settlement agreement is executed,
with respect to the circumstances giving rise to the possible application of
that Section.

 

2.04         “Administrator” or “Plan Administrator” shall mean the person,
persons, or corporation administering this Plan, as provided in Article XIII
hereof, and any successor or successors thereto.

 

2

 

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

                2.05        “Affiliated Group” shall mean a group of
corporations, trades or businesses that constitute a controlled group of
corporations, trades or businesses as defined in Code §§414(b) and (c) and shall
also include a group of corporations, partnerships or other organizations that
constitute an affiliated service group as defined in Code §414(m) or is treated
as a single employer under Code §414(o) and the regulations thereunder.

 

 

2.06

“Age” shall mean a person’s attained age in completed years and months as of the
date determined.

 

 

2.07

“Anniversary Date” shall be the first day of each Plan Year.

 

2.08         “Beneficiary” shall mean any person, persons, or trust designated
by a Participant on a form as the Plan Administrator may prescribe to receive
any death benefit that may be payable hereunder if such person or persons
survive the Participant. This designation may be revoked at any time in similar
manner and form. In the event of the death of the designated Beneficiary prior
to the death of the Participant, the Contingent Beneficiary shall be entitled to
receive any death benefit.

 

 

2.09

“Board of Directors” shall mean:

 

 

(a)

In the case of a corporation, its Board of Directors; or

 

 

(b)

In the case of a partnership or joint venture, its controlling partners.

 

 

2.10

“Code” shall mean the Internal Revenue Code of 1986, as amended.

 

2.11         “Compensation” or “Annual Compensation” shall mean the amount of
all base salary payments and wages for personal services rendered that is paid
to an Employee during the Plan Year by an FX Employer, including overtime pay,
commissions, bonuses and lump sum severance payments, unless such amounts are
specifically excluded from consideration as Compensation under an employment
agreement between the Employee and the FX Employer. Compensation shall be
determined before deductions for federal income taxes, state income taxes and
Social Security (FICA) taxes, before deductions for contributions by salary
reduction to this Plan or any other plan that meets the requirements of Code
§§401(k) or 125 and are sponsored by an FX Employer, before deductions for
Participant contributions to any insurance program sponsored by an FX Employer
and before deferral pursuant to any written contract of deferred compensation
between the Participant and an FX Employer. Compensation shall not include
director’s fees, allowances or reimbursements for expenses, relocation payments,
merchandise and service discounts, the value of insurance coverage, automobile
or mileage allowances, parking or public transportation payments not includable
in gross income by reason of Code §132(f)(4), amounts realized from the exercise
of a non-qualified stock option, or when restricted stock (or property) held by
a Participant either becomes freely transferable or is no longer subject to a
substantial risk of forfeiture, amounts realized from the sale, exchange, or
other disposition of stock acquired under a qualified stock option, benefits in
the form of property or the use of property, or other fringe benefits and
amounts deferred pursuant to a written contract of deferred compensation between
the Participant and an FX Employer. Unless specifically included by this
Section, payments or contributions to or for the benefit of a Participant under
any deferred compensation plan, pension, profit sharing, group life or health
insurance, hospitalization or other employee benefit plan or any payments from
such a plan and any amounts paid at or after Termination of Employment (on
account of such termination), such as installment severance payments, vacation
and sick leave cash-outs, shall not be included in Compensation. For purposes of
a contribution or an allocation under the Plan based on compensation, Annual
Compensation shall only include amounts actually paid an Employee during the
period the Employee is a Participant in the Plan.

 

Effective for Plan Years commencing on and after January 1, 2002, Annual
Compensation of each Participant taken into account in determining allocations
for any Plan Year shall not exceed Two Hundred Thousand Dollars ($200,000), as
adjusted for cost-of-living increases in accordance with Code §401(a)(17)(B).
The cost-of-living adjustment in effect for a calendar year applies to Annual
Compensation for the Plan Year that begins with or within such calendar year.
Prior to January 1, 2002, the Participant’s Annual Compensation taken into
account for any Plan Year shall not exceed One Hundred Fifty Thousand Dollars
($150,000), or such greater or lesser amount, adjusted as provided in Code
§401(a)(17)(B). Aggregation of family members’ compensation shall not be
required or allowed when determining Annual Compensation.

 

3

 

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

2.12         “Contingent Beneficiary” shall mean the person, persons, or trust
duly designated by the Participant to receive any death benefit from the Plan in
the event the designated Beneficiary does not survive the Participant.

 

2.13         “Disability” shall mean a mental or physical disease or condition
that can be expected to result in death or that can be expected to last for a
continuous period of at least six (6) months. In making this determination, the
Administrator may employ a doctor who is licensed and qualified to practice
medicine in any State to examine the Participant and then issue an opinion as to
the disability of the Participant involved. Notwithstanding the foregoing, a
Participant who is eligible to receive Social Security disability payments shall
be deemed to be disabled without further proof.

 

2.14         “Distribution Date” shall mean the first day of the first month for
which an amount is payable, or the date on which a benefit is actually paid or
begins to be paid.

 

2.15         “Effective Date” shall mean generally January 1, 2002, or such
alternate date with respect to any provision as may be specified herein. All
provisions of this Plan as restated and amended shall be effective as of that
date except to the extent this Plan provides for an alternate date. The original
effective date of the Prior Plan was January 1, 1999. The Plan was restated for
GUST effective January 1, 2004. This document replaces and supersedes the GUST
Plan retroactive to January 1, 2002.

 

2.16         “Elective Deferral” shall mean a contribution to the Plan under a
cash or deferred arrangement as defined in Code §401(k) to the extent not
includable in gross income, which is made pursuant to an election and
authorization by a Participant through a Salary Reduction Agreement consistent
with the provisions of Section 5.01.

 

 

2.17

“Eligible Employee” shall mean any Employee who is not an Excluded Employee.

 

2.18         “Employee” shall mean any person who is employed by an FX Employer
in any capacity other than solely as a director.

 

2.19         “Employer” or “FX Employer” shall mean the Plan Sponsor and any
other entity who, with the authorization of the Plan Sponsor, may adopt this
Plan. Solely for purposes of determining Eligibility Service, Years of Vesting
Service and One Year Breaks in Service, any entity not adopting this Plan that,
together with the Plan Sponsor, is a member of an Affiliated Group shall also be
treated as an Employer for the period of time during which such entity was a
member of such group. FX Employers may, at the option of the Plan Sponsor, be
identified by a list attached as an addendum to this Plan, or through separate
participation agreements, that reflect adoption by the FX Employer of this Plan.

 

2.20         “Employer Contribution” shall mean any contribution made to this
Plan on behalf of an Employee by the Employer. For purposes of the investment
provisions in Section 18.07 Elective Deferrals shall not be considered to be
Employer Contributions, regardless of any other characterization of such
Deferrals under the Plan or the Code.

 

2.21         “Employer Securities” shall mean common stock issued by the
Employer (or by a corporation that is a member of an Affiliated Group of which
the Employer is a member) that is readily tradeable on an established securities
market. If there is no stock that meets this requirement, then “Employer
Securities” shall mean common stock issued by the Employer (or by a corporation
that is a member of an Affiliated Group of which the Employer is a member)
having a combination of voting power and dividend rights equal to or in excess
of --

 

 

(a)

that class of common stock of the Employer (or of any other such corporation)
having the greatest voting power; and

 

 

(b)

that class of common stock of the Employer (or of any other such corporation)
having the greatest dividend rights.

 

Noncallable preferred stock shall be deemed “Employer Securities” if it is
convertible at any time into stock that constitutes “Employer Securities”
hereunder and if the conversion is at a price that is reasonable on its date of
acquisition by the Trust.

 

4

 

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

2.22         “Entry Date” shall mean, solely for purposes of participation under
Article IV, the date an Employee became or becomes a Participant in the Plan.
Entry Dates occur on each January 1, April 1, July 1 and October 1.

 

 

2.23

“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as
amended.

 

2.24         “Excluded Employee” shall mean a member of that class of Employees
who are not eligible to participate in the Plan or accrue any benefit under the
Plan, regardless of employment status or the number of hours worked by the
Employee. The class of such Employees includes:

 

 

(a)

Employees whose employment is governed by the terms of a collective bargaining
agreement between Employee representatives and the Employer under which
retirement benefits were the subject of good faith bargaining between said
Employee representatives and the Employer.

 

 

(b)

Employees who are designated by the Employer to be in any of the following
classifications:

 

 

(i)

consultant,

 

 

(ii)

independent contractor, or

 

 

(iii)

Leased Employee.

 

It is expressly intended that an individual identified or determined by the
Employer to be in one of the above classifications shall be ineligible to
participate in the Plan without regard to whether a court, administrative agency
or other fact-finder subsequently determines that the individual was not or is
not in fact in that classification.

 

 

(c)

Employees who are employed by an entity that is part of an Affiliated Group with
an FX Employer, but that entity has not adopted and does not participate in this
Plan.

 

2.25         “Fiduciary” shall mean and include the Trustee, Plan Administrator,
Plan Sponsor, Investment Manager, and any other person or corporation who:

 

 

(a)

Exercises any discretionary authority or discretionary control respecting
management of the Plan or exercises any authority or control respecting
management or disposition of its assets;

 

 

(b)

Renders investment advice for a fee or other compensation, direct or indirect,
with respect to any moneys or other property of the Plan, or has any authority
or responsibility to do so;

 

 

(c)

Has any discretionary authority or discretionary responsibility in the
administration of the Plan; or

 

 

(d)

Is described as a “fiduciary” in Sections 3(14) or (21) of ERISA or is
designated to carry out fiduciary responsibilities pursuant to this agreement to
the extent permitted by Section 405(c)(1)(B) of ERISA.

 

2.26         “Highly Compensated Employee” or “HCE” shall mean an Employee,
other than a non-resident alien receiving no earned income from the Employer
from sources within the United States, who:

 

 

(a)

was at any time during the Plan Year or the Look-back Year a Five Percent Owner
(as defined in Section 19.02(c)); or

 

 

(b)

received Compensation from the Employer in the Look-back Year in excess of
Ninety Thousand Dollars ($90,000) and was in the Top Paid Group for the
Look-back Year.

 

5

 

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

“Look-back Year” means the Plan Year immediately preceding the Plan Year for
which the determination is being made. An Employee is in the “Top Paid Group” if
the Employee is in the group consisting of the top twenty percent (20%) of
Employees when ranked on the basis of Compensation paid during the Look Back
Year. When calculating the number of Employees in the Top Paid Group the
following Employees shall be excluded: (i) Employees who have not completed 6
months of service; (ii) Employees who normally work less than 17½ hours per
week; (iii) Employees who normally work not more than six months during any
year; (iv) Employees who have not attained Age 21; and (v) Employees who are
Excluded Employees by reason of Section 2.24(a). The Ninety Thousand Dollar
($90,000) amount in (b) above shall be adjusted for cost of living as provided
under Code §415(d), except that the base period shall be the calendar quarter
ending September 30, 1996.

 

A former Employee who was a Highly Compensated Employee upon Termination of
Employment or at any time after attaining Age fifty-five (55) shall be treated
as a Highly Compensated Employee. No family aggregation rules shall apply when
determining who is a Highly Compensated Employee and no Employee who is a family
member of any Highly Compensated Employee shall be required or considered to be
a single Employee with the Highly Compensated Employee. For purposes of this
Section Compensation is defined as in Section 7.01(b) of this Plan, but shall
include contributions made by the Employer to a plan of deferred compensation
otherwise excluded in Section 7.01(b).

 

2.27         “Inactive Participant” shall mean an individual who retains and is
entitled to receive a distribution of an Accrued Benefit from the Plan, but who
is not currently eligible to make Elective Deferral Contributions or receive an
allocation of Employer Contributions or forfeitures, without regard to whether
the individual has incurred a Termination of Employment.

 

 

2.28

“Investment Fund” shall mean all assets of the Trust Fund.

 

 

2.29

“Investment Manager” shall mean any Fiduciary (other than a Trustee or Named
Fiduciary) who:

 

 

(a)

Has the power to manage, acquire or dispose of any asset of the Plan;

 

 

(b)

Is (i) registered as an investment advisor under the Investment Advisors Act of
1940; (ii) a bank as defined in that Act; or (iii) is an insurance company
qualified to perform services described in subsection (a) above under the laws
of more than one state; and

 

 

(c)

Has acknowledged in writing that he is a Fiduciary with respect to the Plan.

 

2.30         “K-Test Average Contribution Percentage” shall mean the average
(expressed as a percentage) of the K-Test Contribution Percentages of the
Participants in a group.

 

2.31         “K-Test Contribution Percentage” shall mean the ratio (expressed as
a percentage) of a Participant’s K-Test Contributions for a Plan Year to the
Participant’s Compensation for the Plan Year. The K-Test Contribution Percentage
for a Participant who is a Highly Compensated Employee shall be determined by
combining all cash or deferred arrangements under which the Highly Compensated
Employee is eligible to participate (other than those that may not be
permissively aggregated) with this Plan as though they were a single
arrangement. The K-Test Contribution Percentage for a Participant who has made
no Elective Deferral contributions and who is not credited with any K-Test
Contributions for the Plan Year shall be zero (0).

 

2.32         “K-Test Contributions” shall mean, for any Plan Year, a
Participant’s Elective Deferrals, plus, if so elected by the Employer, part or
all of the Qualified Non-Elective Contributions and Qualified Matching
Contributions allocated to the Participant for such year, provided that, any
Qualified Non-Elective Contributions included as K-Test Contributions shall not
increase the difference between the K-Test Average Contribution Percentage for
Highly Compensated Employees and the K-Test Average Contribution Percentage for
Non-Highly Compensated Employees; and, further provided that, no Qualified
Non-Elective Contributions or Qualified Matching Contributions included as
K-Test Contributions shall be included as M-Test Contributions. In determining
the amount of a Participant’s Elective Deferrals under this Section the Plan
Administrator shall take into account elective deferrals made by the Participant
under any other plan that is aggregated with this Plan for purposes of Code
§401(a)(4) or Code §410(b) (other than Code §410(b)(2)(A)(ii)) and any other
plan satisfying Code §401(k)(3) and Reg. §1.401(k)-1(b)(3) that the Employer
elects to permissively aggregate with this Plan, by treating all such plans and
this Plan as a single plan.

 

6

 

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

2.33         “Leased Employee” shall mean any person who, pursuant to an
agreement between the FX Employer and any other person or organization (leasing
organization), performs services for the Employer (or for the FX Employer and
related persons determined in accordance with Code §414(n)(6)), and the services
are performed under the primary direction or control of the FX Employer.

 

Contributions or benefits provided by the leasing organization that are
attributable to services performed for the Employer shall be treated as provided
by the Employer. If the Leased Employees constitute not more than twenty percent
(20%) of the FX Employer’s non-highly compensated work force, the preceding
sentence shall not apply to any Leased Employee who is covered by a money
purchase pension plan providing:

 

 

(a)

A non-integrated employer contribution rate of at least ten percent (10%) of
compensa­tion; and

 

 

(b)

Immediate participation with respect to any person who has received compensation
from the leasing organization of at least One Thousand Dollars ($1,000) in any
one of the four most recent plan years of such plan; and

 

 

(c)

Full and immediate vesting.

 

2.34         “Limitation Year” shall mean the Plan Year, unless the Employer
elects a different twelve (12) month period.

 

2.35         “M-Test Average Contribution Percentage” shall mean the average
(expressed as a percentage) of the M-Test Contribution Percentages of the
Participants in a group.

 

2.36         “M-Test Contribution Percentage” shall mean the ratio (expressed as
a percentage) of a Participant’s M-Test Contributions for a Plan Year to the
Participant’s Compensation for the Plan Year. The M-Test Contribution Percentage
for a Participant who is a Highly Compensated Employee shall be determined by
combining all plans subject to Code §401(m) under which the Highly Compensated
Employee is eligible to participate (other than those that may not be
permissively aggregated) with this Plan as though they were a single plan. For
this purpose, Compensation is defined as in Section 7.01(b) of the Plan. The
M-Test Contribution Percentage for a Participant who has made no Elective
Deferral contributions and who is not credited with any M-Test Contributions for
the Plan Year shall be zero (0).

 

2.37         “M-Test Contributions” shall mean for any Plan Year Matching
Contributions made pursuant to Section 5.05 less any of the Participant’s
Qualified Matching Contributions included as K-Test Contributions. If so elected
by the Employer, part or all of the Qualified Non-Elective Contributions
allocated to the Participant for such year shall be included as an M-Test
Contribution, provided that, any Qualified Non-Elective Contributions included
as M-Test Contributions shall not increase the difference between the M-Test
Average Contribution Percentage for Highly Compensated Employees and the M-Test
Average Contribution Percentage for Non-Highly Compensated Employees; and,
further provided that, no Qualified Non-Elective Contributions included as
M-Test Contributions shall be included as K-Test Contributions. In determining
the amount of M-Test Contributions under this Section the Plan Administrator
shall take into account all employee contributions made by the Participant and
all matching contributions made by the Employer under any other plan that is
aggregated with this Plan for purposes of Code §401(a)(4) or Code §410(b) (other
than Code §410(b)(2)(A)(ii)) and any other plan satisfying Code §401(k)(3) and
Reg. §1.401(k)-1(b)(3) that the Employer elects to permissively aggregate with
this Plan, by treating all such plans and this Plan as a single plan.

 

2.38         “Matching Contribution” shall mean any Employer contribution made
to the Plan on behalf of an Employee on account of an Employee’s Elective
Deferral, but excluding, for Plan Years beginning after December 31, 1988, any
contribution used to meet the minimum required allocation under Section 19.03.
For Plan Years commencing after December 31, 2001, Matching Contributions may be
used to satisfy the minimum required contribution requirements of Section 19.03
to the extent provided in Section 19.09.

 

2.39         “Named Fiduciary” shall mean the Plan Administrator and any
Committee appointed and so designated by the Plan Administrator.

 

7

 

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

2.40         “Net Profit” for any year shall mean the current and accumulated
earnings of the Employer as reflected by its books of account for the particular
fiscal year prior to the provision for Federal and state income tax, without
increase or decrease due to corrections or adjustments subsequently made, but
excluding the cost of contributions made under this Plan or any other qualified
plan.

 

2.41         “Non-Highly Compensated Employee” or “NHCE” shall mean an Employee
who is not a Highly Compensated Employee.

 

 

2.42

“Normal Retirement Age” shall mean age 65.

 

2.43         “Normal Retirement Date” shall mean the first day of the calendar
month coinciding with or next following a Participant’s Normal Retirement Age.

 

2.44         “Participant” shall mean any Eligible Employee who has satisfied
all of the age and service requirements of Section 4.01. Such an Eligible
Employee shall be deemed to be a Participant in the Plan for purposes of any
applicable non-discrimination test, including the K-Test and M-Test defined in
this Plan, without regard to whether he has executed a Salary Reduction
Agreement and agreed to have contributions made to this Plan through Elective
Deferrals. A Participant may nevertheless be considered “active” or “inactive”
depending on whether he is eligible to make Elective Deferral Contributions or
receive an allocation of Employer Contributions. A Participant who has an
Account in the Plan but is an Inactive Participant because he or she has
incurred a Termination of Employment shall not be treated as a Participant in
the Plan for purposes of any applicable non-discrimination test, including the
K-Test and M-Test defined in this Plan in any Plan Year following the Plan Year
in which the Participant’s Termination of Employment has occurred.

 

2.45         “Plan” shall mean the Plan as stated herein and as may be amended
from time to time, denominated as the “FX Energy, Inc. 401(k) Stock Bonus Plan.”
The Employer intends the Plan to satisfy the requirements of Code Section 401(k)
and to include provisions permitting the contribution of Employer Securities.

 

 

2.46

“Plan Sponsor” shall mean FX Energy, Inc.

 

 

2.47

“Plan Year” shall mean the one year period commencing January 1, and ending
December 31.

 

2.48         “Predecessor Plan” shall mean any Plan that has been previously
amended or restated for GUST and whose assets have been transferred to this Plan
pursuant to a merger or trust to trust transfer. The benefits that are funded by
the transferred assets shall be protected benefits within the meaning of Code
§411(d)(6) and the regulations thereunder and prior to their transfer to this
Plan shall be subject to all provisions of the Predecessor Plan, including any
transitional rules required by prior legislation such as GUST and applicable IRS
regulations.

 

 

2.49

“Prior Plan” shall mean this Plan as it existed prior to the Effective Date.

 

2.50         “Qualified Matching Contribution” shall mean a Matching
Contribution with respect to which the requirements of Reg. §1.401(k)-1(b)(5)
and Code §§401(k)(2)(B) and (C) are met.

 

2.51         “Qualified Non-Elective Contribution” shall mean any Employer
contribution to the Plan other than a Matching Contribution with respect to
which the Employee may not elect to have the contribution paid to the Employee
in cash instead of being contributed to the Plan and (if treated as K-test
Contributions) the requirements of Reg. §1.401(k)-1(b)(5) and Code
§§401(k)(2)(B) and (C) are met or (if treated as M-Test Contributions) the
requirements of Reg. §1.401(m)-1(b)(5) are met.

 

2.52         “Transferred Benefits” shall mean those benefits funded by assets
transferred to the Plan from a Predecessor Plan. Transferred Benefits shall
include all optional forms of benefits available under the Predecessor Plan(s)
from which the Transferred Benefits were received, unless unavailable under this
Plan.

 

2.53         “Trust” shall mean the Trust created under the Prior Plan,
designated as the FX Energy, Inc. 401(k) Profit Sharing Plan Trust, and
continued through the restated and amended Trust Agreement, effective January 1,
2004, and renamed the FX Energy, Inc. 401(k) Stock Bonus Plan Trust.

 

8

 

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

2.54         “Trust Fund” shall mean all cash, Employer Securities, securities,
annuity contracts, Insurance Contracts, real estate and any other property held
by the Trustee pursuant to the terms of this Agreement, together with investment
earnings or losses thereon, less any applicable expenses of the Plan and Trust.

 

2.55         “Trustee” shall mean the bank, trust company or other corporation
possessing trust powers under applicable State or Federal law, or one or more
individuals, or any combination thereof named as parties hereto, or any
successor Trustee or Trustees hereunder.

 

2.56         “Valuation Date” shall mean the date on which the Trust Fund and
Accounts are valued, as provided in this Plan. The following shall be Valuation
Dates:

 

 

(a)

the last day of each Plan Year (the “Annual Valuation Date”);

 

 

(b)

any other day designated by the Plan Administrator and set forth in a written
notice to the Trustee as the Plan Administrator may consider necessary or
advisable to provide for the orderly and equitable administration of the Plan.

 

2.57         “Vested Interest” or “Vested Accrued Benefit” shall mean the
portion of a Participant’s Accrued Benefit that is non-forfeitable.

 

ARTICLE III  SERVICE DEFINITIONS AND RULES

 

3.01         “Eligibility Computation Period” shall mean the period used to
measure Eligibility Service and Breaks in Service for purposes of eligibility to
begin and maintain participation in the Plan.

 

 

(a)

“Initial Eligibility Computation Period” shall mean, for any Employee in any
Plan Year in which a Year of Eligibility Service is required, the twelve (12)
consecutive month period which begins on the Employee’s Employment Commencement
Date or Re-employment Commencement Date.

 

 

(b)

“Subsequent Eligibility Computation Period” shall mean, for any Employee in any
Plan Year in which a Year of Eligibility Service is required, the Plan Year
beginning with or within the Initial Eligibility Computation Period and
succeeding Plan Years.

 

 

(c)

For any Plan Year in which less than a Year of Eligibility Service is required
for participation, the Eligibility Computation Period shall be the number of
months or days of Eligibility Service required.

 

3.02         “Eligibility Service” shall mean service for any period during
which an Employee receives credit for Hours of Service for an FX Employer.

 

3.03         “Employment Commencement Date” shall mean the date on which the
Employee first performs an Hour of Service for an FX Employer.

 

 

3.04

“Hour of Service” shall mean and be determined as follows:

 

 

(a)

Each hour for which an Employee is paid, or entitled to payment, for the
performance of duties for the Employer. These hours shall be credited to the
Employee for the year or years in which the duties are performed.

 

 

(b)

Each hour for which an Employee is paid, or entitled to payment, by the Employer
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 (including disability), layoff, jury
duty, military duty or Leave of Absence. Notwithstanding the preceding sentence:

 

 

(1)

No more than five hundred and one (501) Hours of Service are required to be
credited under this paragraph during which the Employee performs no duties
(whether or not such period occurs in a single computation period);

 

9

 

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

 

(2)

An hour for which an Employee is directly or indirectly paid, or entitled to
payment, on account of a period during which no duties are performed is not
required to be credited to the Employee if such payment is made or due under a
plan maintained solely for the purpose of complying with applicable workmen’s
compensation or unemployment compensation or disability insurance laws; and

 

 

(3)

Hours of Service are not required to be credited for a payment that solely
reimburses an Employee for medical or medically related expenses incurred by the
Employee.

 

For purposes of this paragraph (b), a payment shall be deemed to be made by or
due from an Employer regardless of whether such payment is made by or due from
the Employer directly, or indirectly through, among others, a trust fund or
insurer to which Employer contributes or pays premiums and regardless of whether
contributions made or due to the trust fund, insurer or other entity are for the
benefit of particular Employees or are on behalf of a group of Employees in the
aggregate. Hours under this paragraph (b) shall be calculated and credited
pursuant to DOL Reg. §2530.200b-2, paragraphs (b) and (c), which are
incorporated herein by this reference.

 

 

(c)

Each hour for which back pay, irrespective of mitigation of damages, is either
awarded or agreed to by the Employer. The same Hours of Service shall not be
credited both under paragraph (a) or paragraph (b), as the case may be, and
under this paragraph (c). These hours shall be credited to the Employee for the
year or years to which the award or agreement pertains rather than the year in
which the award, agreement or payment is made.

 

 

(d)

Hours of Service shall be determined on the basis of actual hours for which an
Employee is paid, entitled to payment or for which back pay is awarded or agreed
to.

 

 

(e)

For Plan Years beginning after December 31, 1984, in the case of an Employee who
is absent from work for any period:

 

 

(1)

By reason of the pregnancy of the Employee;

 

 

(2)

By reason of the birth of a child of the Employee;

 

 

(3)

By reason of the placement of a child with the Employee in connection with the
adoption of such child by such Employee; or

 

 

(4)

For purposes of caring for such child for a period beginning immediately
following such birth or placement.

 

Hours of Service shall include the Hours of Service that otherwise would
normally have been credited to such Employee but for such absence; or in any
case in which the Plan is unable to determine the Hours of Service to be
credited, eight (8) Hours of Service for each regularly scheduled work day of
such absence. The total number of hours treated as Hours of Service under this
Section by reason of any pregnancy or placement shall not exceed five hundred
one (501) hours less the number of Hours of Service credited to an Employee
pursuant to subsections (a) through (e) above, for an absence described in this
subsection (f). The hours described in this subsection (f) shall be treated as
Hours of Service only in the computation period in which the absence from work
begins, if an Employee would be prevented from incurring a One-Year Break in
Service in such computation period solely because the period of absence is
treated as Hours of Service as provided herein; or in any other case, in the
immediately following computation period. Notwithstanding the foregoing, no
credit will be given pursuant to this subsection (f) unless the Employee
furnishes to the Plan Administrator such timely information as the Plan
Administrator may reasonably require to establish that the absence from work is
for reasons referred to herein, and the number of days for which there was such
an absence.

 

10

 

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

 

(f)

Hours of Service shall be aggregated for service with all FX Employers, however,
in no event shall duplicate credit be given for the same Hours of Service.

 

 

(g)

The Plan Administrator may use any records to determine Hours of Service that it
considers an accurate reflection of the facts.

 

 

(h)

When crediting Hours of Service for Employees who are paid on an hourly basis
the Plan Administrator shall use the “actual” method. For purposes of the Plan,
“actual” method shall mean the determination of Hours of Service from records of
hours worked and hours for which the Employer makes payment or for which payment
is due from the Employer. When crediting Hours of Service for Employees who are
not paid on an hourly basis, the Plan Administrator shall use the “salaried
earnings” method. With respect to an Employee whose Compensation consists
primarily of periodic salary payments, “salaried earnings” method shall mean the
determination of Hours of Service from records showing payments made to the
Employee or payments due to the Employee from the Employer. In applying the
“salaried earnings” method, an Employee who receives credit for four hundred
thirty-five (435) hours and for eight hundred seventy (870) hours shall be
deemed to have received credit for the equivalent of five hundred (500) Hours of
Service and one thousand (1,000) Hours of Service respectively.

 

3.05         “One Year Break in Service” shall mean a twelve (12) consecutive
month period during which an Employee has not completed more than five hundred
(500) Hours of Service, regardless of whether the Employee has incurred a
Termination of Employment. For purposes of vesting, such twelve (12) consecutive
month periods shall be measured on the same basis as Years of Vesting Service.
For purposes of eligibility to participate, the Plan shall not apply any break
in service rule. The following types of absence shall not constitute a One-Year
Break in Service:

 

 

(a)

Temporary leave of absence granted by the Employer for sickness, or extended
vacation, provided that persons under similar circumstances shall be treated
alike;

 

 

(b)

Absence due to illness or accident while regular remuneration is paid;

 

 

(c)

Absence for military service or significant civilian service for the United
States, provided the absent Employee returns to service with the Employer within
thirty (30) days of his/her release from such active military duty or service or
any longer period during which his/her right to re-employment is protected by
law.

 

3.06         “Re-employment Commencement Date” shall mean the date on which an
Employee, who has both incurred a Termination of Employment from the Employer
and has had a One Year Break in Service as a result of that termination, first
performs an Hour of Service for the Employer following such Break in Service.

 

3.07         “Termination of Employment” with respect to any Employee or
Participant shall occur upon the separation from service (effective January 1,
2002, severance from employment) of the Employee or Participant due to
resignation, discharge, death, retirement, failure to return to active work at
the end of an authorized leave of absence or the authorized extension(s)
thereof, failure to return to active work when duly called following a temporary
layoff, or upon the happening of any other event or circumstance which, under
the then current policy of the FX Employer, results in the termination of the
employer-employee relationship. Termination of Employment shall not be deemed to
occur merely because of a transfer between FX Employers.

 

3.08         “Vesting Computation Period” shall mean the twelve (12) consecutive
month period used to measure Years of Vesting Service and Breaks in Service for
purposes of vesting. The twelve (12) consecutive month period used for the
Vesting Computation Period shall be the Plan Year.

 

3.09         “Year of Service” shall mean a twelve (12) consecutive month period
during which an Employee has completed at least one thousand (1000) Hours of
Service.

 

3.10         “Year of Eligibility Service” shall mean an Eligibility Computation
Period during which an Employee has completed at least one thousand (1000) Hours
of Service.

 

11

 

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

3.11         “Year of Vesting Service” shall mean a Vesting Computation Period
during which an Employee has completed at least one thousand (1000) Hours of
Service. A Participant’s Years of Vesting Service shall be determined based on
all Vesting Computation Periods containing or beginning after his/her Employment
Commencement Date or Re-employment Commencement Date.

 

3.12         Special Rules for Crediting Service: In crediting Service under the
Plan for any Employee who is or was employed by a Participating Employer the
rules for crediting Service as set forth in each respective Participation
Agreement shall apply.

 

3.13         Qualified Military Service Rules: The following rules shall apply
to an Employee who has Qualified Military Service while employed by an FX
Employer.

 

 

(a)

“Qualified Military Service” shall mean service by an Employee in the uniformed
services of the United States (as defined in chapter 43 title 38 of the United
States Code), provided:

 

 

(1)

the employee provides advance notice of the service to the FX Employer, when
such notice is practical;

 

 

(2)

the employee is not dishonorably discharged;

 

 

(3)

the employee is re-employed by the FX Employer within thirty (30) days following
the completion of the service or any longer period during which his/her right to
re-employment is protected by law; and

 

 

(4)

the cumulative length of the Employee’s absence from employment due to the
service does not exceed five (5) years.

 

 

(b)

An Employee’s Qualified Military Service shall be treated as service for the FX
Employer for all purposes under the Plan. An Employee’s imputed Hours of Service
during Qualified Military Service shall be:

 

 

(1)

the Hours of Service the Employee would have worked but for his/her Qualified
Military Service; and

 

 

(2)

if the Hours of Service cannot reasonably be determined, the Hours of Service
the Employee would have worked had he or she worked during his/her Qualified
Military Service at his/her average rate during the twelve (12) month period
immediately preceding his/her Qualified Military Service or, if shorter, his/her
entire period of employment preceding the Qualified Military Service.

 

 

(c)

Compensation (as defined in Section 2.11) shall include imputed compensation
during an Employee’s Qualified Military Service. Imputed compensation shall be:

 

 

(1)

the compensation the Employee would have received but for his/her Qualified
Military Service; or

 

 

(2)

if the compensation is not reasonably certain, the compensation the Employee
would have received had he or she received compensation during his/her qualified
Military Leave at his/her average rate during the twelve (12) month period
immediately preceding his/her Qualified Military Service, or, if shorter,
his/her entire period of employment preceding his/her Qualified Military
Service.

 

12

 

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

 

(d)

A Participant who returns to employment after any Qualified Military Service
shall be entitled to make additional Elective Deferrals to the Plan up to the
maximum amount of the Elective Deferrals the Participant would have been
permitted to make based upon his/her imputed compensation during the Qualified
Military Service, taking into account any other Elective Deferrals made by the
Participant during the Qualified Military Service. The period during which the
additional Elective Deferrals may be made shall commence on the date the
Participant returns to employment and shall extend until the expiration of the
lesser of (i) the period that is three (3) times the length of the Participant’s
Qualified Military Service or (ii) five (5) years. Payment of Matching
Contributions attributable to Elective Deferrals of imputed compensation during
Qualified Military Service shall be made at the same time as other Matching
Contributions, based on the time the Elective Deferrals are actually paid to the
Plan. The Matching Contributions need not include earnings that would have
accrued had the Participant continued performing his/her duties for the Employer
during Qualified Military Service.

 

 

(e)

Elective Deferrals of a Participant’s imputed compensation during his/her
Qualified Military Service shall be treated as Elective Deferrals and as K-Test
Contributions with respect to the Plan Year to which the imputed compensation
relates, if this Plan Year is not the same Plan Year in which the Elective
Deferrals are received by the Plan. Any Matching Contributions based on Elective
Deferrals of a Participant’s imputed compensation during his/her Qualified
Military Service shall be treated as M-Test Contributions with respect to the
Plan Year to which the Elective Deferrals relate, if this Plan Year is not the
same Plan Year in which the Elective Deferrals are received by the Plan.

 

 

(f)

Repayment of any Participant loan from the Plan shall be suspended during
Qualified Military Service and the loan repayment period shall be extended by
the length of the Qualified Military Service.

 

ARTICLE IV  ELIGIBILITY AND PARTICIPATION

 

4.01         Age and Service Requirements: An Eligible Employee shall become a
Participant in this Plan on the first Entry Date coincident with or next
following the date on which he satisfies all of the following requirements:

 

 

(a)

attains the Age of twenty-one (21) years;

 

 

(b)

completes 90 days of Eligibility Service following his Employment Commencement
Date; and

 

 

(c)

is employed on the Entry Date.

 

An Eligible Employee who becomes a Participant and who also executes a written
Salary Reduction Agreement in the manner set forth in procedures issued by the
Plan Administrator shall be considered to be an active Participant. An Eligible
Employee shall not be required to execute a Salary Reduction Agreement in order
to become an active Participant in the Plan, however, as a condition to
participation in Salary Reduction Contributions the Eligible Employee shall
first execute a written Salary Reduction Agreement in the manner set forth in
procedures issued by the Plan Administrator. An Employee who was a Participant
in the Prior Plan on the day before the Effective Date shall continue as a
Participant in this Plan on that date.

 

4.02         Plan Administrator to Furnish Eligibility Information: As soon as
practicable after each Employee’s Employment Commencement Date, the Plan
Administrator shall determine the Entry Date when the Employee shall first
become eligible to participate in the Plan and shall notify each Employee of
his/her eligibility, and of any application or other requirements for
participation.

 

4.03         Information to be Provided by Employee: At the request of the Plan
Administrator, each Eligible Employee shall furnish such information as is not
available from the Employer. As a condition to participation in the Plan, the
Employee shall first complete, execute and deliver a written Salary Reduction
Agreement as reasonably required by the Plan Administrator.

 

13

 

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

4.04         Reclassification of an Eligible Employee or Excluded Employee: Any
Eligible Employee, whether or not he has previously participated in the Plan,
who was previously classified as an Excluded Employee and is reclassified as an
Eligible Employee shall be eligible to enter the Plan as an active Participant
on the later of the date of his/her reclassification or the Entry Date he would
otherwise join if he had not been classified as an Excluded Employee, provided
he has otherwise satisfied the requirements of Section 4.01.

 

Any Participant who is reclassified as an Excluded Employee during the Plan Year
shall immediately cease Elective Deferrals to the Plan and shall no longer be
eligible for Employer Contributions as of the date the reclassification occurs.

 

4.05         Re-employment and Commencement of Participation: An Eligible
Employee who had met the requirements of Section 4.01(a), (b) or (c) but
terminated employment prior to his/her Entry Date shall become a Participant on
the date he is re-employed by the Employer, but in no event earlier than the
Entry Date he would have joined had he not ceased employment. An Employee who
was a Participant shall again become a Participant on the date he is re-employed
by the Employer. The Employee who becomes a Participant may immediately elect to
execute a Salary Reduction Agreement and commence Elective Deferrals, if it is
executed within the time period specified by the Plan Administrator pursuant to
a uniform and non-discriminatory policy. If not so executed, the Participant may
elect to execute a Salary Reduction Agreement and commence Elective Deferrals as
of the first day of any subsequent calendar quarter thereafter.

 

4.06         Election Not To Participate: At any time after the Plan
Administrator notifies an Employee of his eligibility to participate in this
Plan, the eligible Employee may elect not to become an active Participant by not
executing a Salary Reduction Agreement or by indicating on the enrollment form
his election not to participate. The electing Employee may later become an
active Participant effective as of any subsequent Entry Date, if the Employee
then meets the requirements for participation under this Article IV and properly
executes a Salary Reduction Agreement.

 

4.07         Effect of Participation: A Participant who has executed a Salary
Reduction Agreement shall be conclusively deemed to have assented to this Plan
and to any subsequent amendments, and shall be bound thereby with the same force
and effect as if he had formally executed this Plan.

 

ARTICLE V  PARTICIPANT AND EMPLOYER CONTRIBUTIONS

 

 

5.01

Elective Deferrals:

 

 

(a)

Each Participant may elect to defer any whole percentage of the Participant’s
Annual Compensation, subject to a minimum of one percent (1%) and to a maximum
of one hundred percent (100%). The amount of the deferral shall be contingent on
the Participant electing and authorizing the Elective Deferral amount through a
Salary Reduction Agreement. The Salary Reduction Agreement and the Participant’s
authorization thereunder may be evidenced by a written document executed by the
Participant and filed with the Administrator on a form prescribed for this
purpose or by oral instructions directly from the Participant to the
Administrator and confirmed to the Participant in writing. The Salary Reduction
Agreement may also be completed and executed by the Participant through any
electronic means or method approved by the Plan Administrator. The Salary
Reduction Agreement shall be subject to the following rules:

 

 

(1)

The Salary Reduction Agreement shall apply to each payroll period during which
an effective Salary Reduction Agreement is on file with the Administrator. The
Salary Reduction Agreement shall be applicable only to the following forms of
Compensation: wages, salary, overtime pay and commissions. With the approval of
the Administrator a Participant may identify different components of his
Compensation (such as wages, overtime pay, etc.) and specify different
percentage deferral rates to apply to each component. A Participant may also
elect and authorize through a separate Salary Reduction Agreement an Elective
Deferral amount (subject to the same rules in (a) above) from any bonus or lump
sum severance payment component of the Participant’s Compensation.

 

14

 

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

 

(2)

The amount by which the Participant’s Compensation is reduced under the Salary
Reduction Agreement may be changed by a Participant no more than quarterly
during the Plan Year. A change shall be evidenced by a written document, by oral
instructions directly from the Participant with written confirmation in
accordance with rules and procedures established by the Administrator or through
any electronic means or method approved by the Plan Administrator.

 

 

(3)

Salary Reduction Agreements and Amendments to Salary Reduction Agreements shall
be effective as of the first payroll period commencing with or immediately
following the first day of the calendar quarter following the date the Salary
Reduction Agreement or the Amendment is executed orally authorized or
electronically completed by the Participant and received and confirmed by the
Administrator.

 

 

(4)

The Administrator may amend or revoke a Salary Reduction Agreement with any
Participant at any time if the Administrator determines that a revocation or
amendment is necessary to ensure that the Participant’s Elective Deferral for
any Plan Year will not exceed any Plan limitations.

 

 

(b)

The Elective Deferral amounts designated by the Participant in the Salary
Reduction Agreement shall be withheld and contributed to the Plan by the
Employer without regard to Net Profits to the Participant’s Elective Deferral
Account. Unless otherwise authorized by the Plan Administrator, contributions
made through payroll deductions shall be pursuant to the Salary Reduction
Agreement executed by the Participant or orally authorized by the Participant
and confirmed by the Plan Administrator or authorized by any other electronic
means or method approved by the Plan Administrator.

 

 

(c)

Commencing January 1, 2002, and for all Plan Years thereafter, an Employee who
is eligible to make Elective Deferrals under this Plan and who attains Age 50
before the close of the Plan Year shall be eligible to make catch-up
contributions in accordance with, and subject to the limitations of, Code
§414(v). Catch-up contributions shall not be taken into account for purposes of
the provisions of the Plan implementing the required limitations of Code
§§402(g) and 415. The Plan Administrator shall not treat catch up contributions
as failing to satisfy any provisions of the Plan implementing the requirements
of Code §§401(k)(3), 401(k)(11), 401(k)(12), 410(b), or 416, as applicable.

 

 

(e)

Each Eligible Employee (whether or not an active Participant in the Plan) shall
receive from the Plan Administrator no later than one (1) month prior to January
1, 2005, and thereafter, at least one month before the commencement of each
subsequent Plan Year, a written notice describing the Eligible Employee’s rights
and obligations under the Plan, including the Eligible Employee’s right to
receive a fully vested Matching Contribution if the Eligible Employee executes a
Salary Reduction Agreement and makes Elective Deferral Contributions to the
Plan. The notice shall be sufficiently accurate and comprehensive to inform the
Eligible Employee of the rights and obligations, and shall be written in a
manner calculated to be understood by the Eligible Employee.

 

5.02         Payment to Trustee: The Employer shall transmit to the Trustee the
amounts withheld by it pursuant to Section 5.01 above as soon as
Administratively Feasible, but in no event later than the fifteenth (15th)
business day of the month following the month in which the amounts are withheld
or received by the Employer. However, the Employer shall not transmit to the
Trustee any amounts withheld by it during the Plan Year pursuant to a deferral
election under Section 5.01 that, in the Plan Administrator’s opinion, would
cause the Plan to fail to meet the limitations described in Section 5.10 for
that Plan Year. Such amounts withheld and not transmitted to the Trustee shall
be returned by the Employer to the respective Participants.

 

15

 

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

5.03         Suspension of Deferrals: A Participant may notify the Plan
Administrator electronically, orally or in writing of his/her intention to
suspend his/her election to have a portion of his/her Annual Compensation
deferred. The suspension shall be effective for the payroll period commencing
thirty (30) days after the date the notice of suspension is received (unless an
earlier effective date is Administratively Feasible) and for each payroll period
thereafter, until a new Salary Reduction Agreement is entered into by the
Participant. The Participant shall be considered a Participant hereunder for all
other purposes if his/her employment continues, however, he shall not be
considered to be an active Participant.

 

5.04         No Voluntary Contributions by Participants: A Participant shall not
be required nor permitted to make voluntary after-tax contributions to the Plan.

 

5.05         Rollover Contributions by Participants: A Participant (or an
Employee who is expected to become a Participant) may rollover directly to this
Plan (or indirectly through an individual retirement account, annuity or bond)
the cash or cash proceeds from the sale of property distributed to the Employee
in the form of an “eligible rollover distribution” as that term is defined in
Section 11.03(a)) from another plan qualified under Code §401(a). For this
purpose this Plan shall be an “eligible retirement plan” as that term is defined
in Section 11.03(b). The amount shall be credited to his Participant Rollover
Contribution Account, provided:

 

 

(a)

The Participant provides adequate evidence to the Plan Administrator that the
amount satisfies the requirements of Code §402(c) regarding amounts that may be
rolled over;

 

 

(b)

If the amount is rolled over indirectly to this Plan through an individual
retirement account, annuity, or bond, the amount does not include life insurance
policies, amounts contributed (or deemed to have been contributed) by the
Participant or amounts distributed from a Plan not qualified under Code §401(a);
and

 

 

(c)

If the amount to be rolled over to this Plan is received as a direct transfer
pursuant to Code §402(e)(6) or rolled over after distribution to the Participant
within sixty (60) days following its distribution.

 

The Plan will accept participant rollover contributions and/or direct rollovers
of distributions made after December 31, 2001, from any qualified plan described
in Code §401(a) or Code §403(a), an annuity contract described in Code §403(b)
or an eligible plan under Code §457(b) that is maintained by a state, political
subdivision of a state, or any agency or instrumentality of a state or political
subdivision of a state. The plan will also accept a participant rollover
contribution of the portion of a distribution from an individual retirement
account or annuity described in Code §408(a) or (b) that is eligible to be
rolled over and would otherwise be includable in gross income. The Plan will
accept rollovers from other plans described in this paragraph that also include
after-tax employee contributions, provided that the after tax contributions are
received in a direct rollover as described in Code §401(a)(31)(A).

 

5.06         Employer Matching Contributions: For each Plan Year the Employer
may contribute Employer Securities to the Plan in an amount, determined without
regard to Net Profits, that will be sufficient to credit the Employer Matching
Contribution Account of each Participant who satisfies the requirements of
Section 6.04, with amounts that satisfy the Employer’s Matching Contribution
percentage as determined by the Employer on a discretionary basis for the Plan
Year. The amount of Employer Securities to be contributed as an Employer
Matching Contribution and the manner of allocation shall be determined annually
by the Employer no later than the time prescribed by law (including any
extensions thereof) for filing the Employer’s Federal income tax return for the
Plan Year for which the Matching Contribution is made. If more than one FX
Employer participates in this Plan, then each FX Employer may set its own
Matching Contribution level or formula to be applicable to its own Employees,
without regard to that determined by other sponsoring FX Employers. The Matching
Contribution shall be made in the form of cash or Employer Securities only. If
the contribution is in the form of cash, the Plan Administrator, in its
discretion, may direct the Trustee to apply the cash immediately toward the
purchase of Employer Securities. The Employer Matching Contribution for
Employees of the Sponsoring Employer and each Participating FX Employer shall be
determined each Plan Year by the Sponsoring Employer and each Participating FX
Employer respectively, or shall be as set forth in the Supplemental
Participation Agreement executed by the Participating FX Employer. The
allocation of the Employer Matching Contribution amount shall be determined
solely by reference to the ratio percentage of the Participant’s Elective
Deferral compared to the aggregate of the forms of the Participant’s
Compensation that are subject to the Salary Reduction Agreement as specified in
Section 5.01(a)(1). If the Employer or Participating FX Employer makes a
Matching Contribution to the Plan at any time during the Plan Year (such as on a
calendar quarter basis), any limit on the amount of Employer Matching

 

16

 

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

Contribution shall not be determined by reference to Annual Compensation for the
Plan Year, but by reference to Compensation paid only during the period to which
the Matching Contribution relates. Notwithstanding the previous sentence, no
contribution in excess of the maximum amount that would constitute an allowable
deduction for Federal income tax purposes under the applicable provisions of the
Code, as now in force or hereafter amended, shall be required to be made by the
Employer under this Section. If the Employer makes Matching Contributions for
any Plan Year as provided in the first sentence of this paragraph, the Employer
may also elect to make an additional Matching Contribution for the Plan Year in
an amount that would have been made by the Employer had Matching Contributions
been calculated on an annual, rather than periodic, basis. Such additional
Matching Contributions must be made by the Employer on a uniform
non-discriminatory basis.

 

5.06A       Safe Harbor Employer Matching Contributions: Effective January 1,
2005, and for each Plan Year commencing thereon or thereafter, the Employer may
contribute to the Plan an amount, determined without regard to Net Profits,
which will be sufficient to credit the Employer Matching Contribution Account of
each Participant who is a Non-Highly Compensated Employee and who satisfies the
requirements of Section 6.04, with amounts which satisfy the Employer’s Matching
Contribution percentage as determined by the Employer on a discretionary basis
for the Plan Year. In no event however, shall the Employer Matching Contribution
for any Participant who is a Non-Highly Compensated Employee in a Plan Year,
when determined as a percentage of the Participant’s Compensation for the Plan
Year, ever be less than the percentage amounts shown in the following table:

 

Participant’s Elective

Deferral percentage:

0%

1%

2%

3%

4%

5%

Percentage of Employer

Matching Contribution:

0.0%

1.0%

2.0%

3.0%

3.5%

4.0%

 

The Employer may also contribute to the Plan an amount, determined without
regard to Net Profits, which will be sufficient to credit the Employer Matching
Contribution Account of each Participant who is a Highly Compensated Employee
and who satisfies the requirements of Section 6.04, with amounts which satisfy
the Employer’s Matching Contribution percentage as determined by the Employer on
a discretionary basis for the Plan Year. In no event however, shall the rate of
Matching Contributions with respect to Elective Deferrals made by any Highly
Compensated Employee exceed the rate of Matching Contributions with respect to
Elective Deferrals made by any Participant who is a Non-Highly Compensated
Employee. Excess Matching Contributions for Employees of the Sponsoring Employer
or a Participating FX Employer shall be determined each Plan Year by the
Sponsoring Employer and each Participating FX Employer respectively, or shall be
as set forth in the Supplemental Participation Agreement executed by the
Participating FX Employer. If the Employer or Participating FX Employer makes a
Matching Contribution in excess of that set forth in the table in this Section,
in no event shall the rate of Matching Contributions increase as the rate of the
Participant’s Elective Deferrals increase. The Matching Contribution shall be
made in the form of cash or Employer Securities only. If the contribution is in
the form of cash, the Plan Administrator, in its discretion, may direct the
Trustee to apply the cash immediately toward the purchase of Employer
Securities.

 

If the Employer or Participating FX Employer makes a Matching Contribution to
the Plan at any time during the Plan Year (such as on a calendar quarter basis),
any limit on the amount of Employer Matching Contribution shall not be
determined by reference to Annual Compensation for the Plan Year, but by
reference to Compensation paid only during the period to which the Matching
Contribution relates. Notwithstanding the previous sentence, no contribution in
excess of the maximum amount which would constitute an allowable deduction for
federal income tax purposes under the applicable provisions of the Code, as now
in force or hereafter amended, shall be required to be made by the Employer
under this Section.

 

17

 

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

5.07         Employer Profit Sharing Contributions: In addition to (or in lieu
of) Employer Matching Contributions made pursuant to Section 5.06 for each Plan
Year and effective January 1, 2005, in addition to Employer Safe Harbor Matching
Contributions made pursuant to Section 5.06A for each Plan Year, each FX
Employer may contribute, without regard to Net Profits, an amount determined by
its Board of Directors as an Employer Profit Sharing Contribution. The Employer
may make the Profit Sharing Contribution in cash or in kind, provided however,
that if the Profit Sharing Contribution is made in cash the Plan shall
immediately acquire Employer Securities with the entire amount of the
contribution and if the Profit Sharing Contribution is made in kind, it shall be
made in the form of Employer Securities only. The Employer Profit Sharing
Contribution for the Plan Year shall be allocated as provided in Section 6.02(c)
to the Accounts of those Participants who satisfy the requirements of
Section 6.04. An Employer may reserve the right to increase or decrease the
amount from year to year, as determined by the Board of Directors.
Notwithstanding the previous sentence, no contribution in excess of the maximum
amount that would constitute an allowable deduction for Federal income tax
purposes under the applicable provisions of the Code, as now in force or
hereafter amended, shall be required to be made by the Employer under this
Section.

 

The amount of the contribution to be credited to the Employer Profit Sharing
Contribution Accounts of the Participants shall be in addition to any non-vested
forfeitures from Employer Profit-Sharing Contribution Accounts of the
Participants to be allocated during the Plan Year pursuant to Section 11.06. The
amount of each FX Employer’s Profit Sharing Contribution shall be allocated only
to the Accounts of those Participants who are Employees of that FX Employer.

 

5.08         Time and Method of Payment: All payments of Employer Matching and
Profit Sharing Contributions shall be made directly to the Trustee and shall be
paid no later than the time prescribed by law (including any extensions thereof)
for filing the Employer’s Federal income tax return for the Plan Year for which
they are made. All such Contributions shall be in the form of Employer
Securities only. The Employer may in its sole discretion, at any time during the
Plan Year, make one or more partial contributions of Employer Securities to the
Trustee on an estimated basis. Any amount so contributed in advance shall be
applied against the amount thereafter determined to be contributable by the
Employer and shall be credited by the Plan Administrator to the Participants’
Employer Contribution Accounts as of the end of the calendar quarter for which
the contribution is made.

 

5.09         Employer Contribution Accounts: The Plan Administrator shall
establish and maintain an Employer Matching Contribution Account, as defined in
Section 2.01(c) and an Employer Profit Sharing Account as defined in Section
2.01(d) for each Participant eligible to receive an Employer Matching
Contribution or Employer Profit Sharing Contribution. Contributions of Employer
Securities to a Participant’s Employer Matching Contribution Account and
Employer Profit Sharing Contribution Account after the Effective Date shall also
be allocated and credited to the Participant’s Employer Securities Account. The
establishment of the accounts is for record keeping purposes only, and a
physical segregation of assets shall not be required.

 

5.10         Limitations on Contributions: Notwithstanding any other provisions
of this Plan, all contributions shall be subject to the following limitations:

 

 

(a)

The total amount of a Participant’s Elective Deferrals during any calendar year
shall not exceed Eleven Thousand Dollars ($11,000), which amount shall be
indexed at the same time and in the same manner as the dollar limitation for
defined benefit plans in Code §415(b)(1)(A). For this purpose a Participant’s
Elective Deferrals to this Plan plus the Participant’s elective deferrals
pursuant to any other Code §401(k) arrangement, elective deferrals under a
simplified employee pension plan and salary reduction contributions to a
tax-sheltered annuity, irrespective of whether the Employer or any member of an
Affiliated Group to which the Employer belongs maintains the arrangement, plan
or annuity, shall be aggregated

 

 

(b)

The K-Test Average Contribution Percentage for Participants who are Highly
Compensated Employees shall not exceed in any Plan Year the greater of:

 

 

(1)

The K-Test Average Contribution Percentage for Participants who are Non-Highly
Compensated Employees multiplied by 1.25; or

 

18

 

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

 

(2)

The lesser of the K-Test Average Contribution Percentage for Participants who
are Non-Highly Compensated Employees multiplied by two (2) or the K-Test Average
Contribution Percentage for Participants who are Non-Highly Compensated
Employees plus two (2).

 

 

(c)

The M-Test Average Contribution Percentage for Participants who are Highly
Compensated Employees shall not exceed in any Plan Year the greater of:

 

 

(1)

The M-Test Average Contribution Percentage for Participants who are Non-Highly
Compensated Employees multiplied by 1.25; or

 

 

(2)

The lesser of the M-Test Average Contribution Percentage for Participants who
are Non-Highly Compensated Employees multiplied by two (2) or the M-Test Average
Contribution Percentage for Participants who are Non-Highly Compensated
Employees plus two (2).

 

 

(d)

In any Plan Year in which the requirements of both (b)(1) and (c)(1) above are
not met, the sum of the K-Test Average Contribution Percentage and the M-Test
Average Contribution Percentage for Participants who are Highly Compensated
Employees shall not exceed the greater of:

 

 

(1)

The sum of:

 

 

(i)

The greater of the K-Test Average Contribution Percentage or the M-Test Average
Contribution Percentage for Participants who are Non-Highly Compensated
Employees multiplied by 1.25; and

 

 

(ii)

The lesser of the K-Test Average Contribution Percentage or the M-Test Average
Contribution Percentage for Participants who are Non-Highly Compensated
Employees plus two (2), but in no event greater than the lesser of the K-Test
Average Contribution Percentage or the M-Test Average Contribution Percentage
for Participants who are Non-Highly Compensated Employees multiplied by two (2);
or

 

 

(2)

The sum of:

 

 

(i)

The lesser of the K-Test Average Contribution Percentage or the M-Test Average
Contribution Percentage for Participants who are Non-Highly Compensated
Employees multiplied by 1.25; and

 

 

(ii)

The greater of the K-Test Average Contribution Percentage or the M-Test Average
Contribution Percentage for Participants who are Non-Highly Compensated
Employees plus two (2), but in no event greater than the lesser of the K-Test
Average Contribution Percentage or the M-Test Average Contribution Percentage
for Participants who are Non-Highly Compensated Employees multiplied by two (2).

 

For this purpose, the K-Test Average Contribution Percentage and M-Test Average
Contribution Percentage for Participants who are Highly Compensated Employees
shall be determined after any distributions or re-characterizations pursuant to
Section 5.12(a), (b) and (c). The test described in this subsection 5.10(d)
shall not apply for Plan Years commencing after December 31, 2001.

 

For purposes of applying the tests in (b), (c) and (d) above in any Plan Year,
the K-Test Average Contribution Percentage and the M-Test Average Contribution
Percentage for Participants who are Non-Highly Compensated Employees shall be
based on the prior Plan Year.

 

The Employer may aggregate this Plan with one or more other plans for purposes
of applying the tests in (b), (c) and (d) above, in which case all K-Test
Contributions and M-Test Contributions to all such plans shall be treated as
made under this Plan, provided that, the aggregated plans may not include an
Employee Stock Ownership Plan, and all such aggregated plans must have the same
plan year.

 

19

 

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

                5.11        Excess Contributions: In accordance with the
limitations on contributions described in Section 5.10, the following amounts
shall be treated as excess contributions under this Plan:

 

 

(a)

Excess Deferrals: With respect to any calendar year, amounts designated by
Participants in writing as Excess Deferrals not later than the first March 1
following the end of the calendar year, in accordance with such procedures as
the Plan Administrator shall specify, less any Excess K-Test Contributions
previously distributed or recharacterized for the Plan Year beginning in the
calendar year in which the Excess Deferral is made, pursuant to Section 5.12(b).

 

 

(b)

Excess K-Test Contributions: With respect to any Plan Year, the excess of the
aggregate amount of K-Test Contributions actually made on behalf of Highly
Compensated Employees for the Plan Year over the maximum amount of such
contributions permitted under Section 5.10(b). The Excess K-Test Contributions
of an individual Highly Compensated Employee shall be determined (i) by
calculating the total dollar amount resulting from a reduction of the K-Test
Contributions made on behalf of Highly Compensated Employees in order of the
K-Test Contribution Percentages, beginning with the highest percentage, until
the limitations of Section 5.10(b) are met, and (ii) by reducing the K-Test
Contributions made on behalf of Highly Compensated Employees in order of the
dollar amount of K-Test Contributions for each Highly Compensated Employee,
beginning with the highest dollar amount, and subtracting such amounts from the
total dollar amount determined in (i) above until the total dollar amount is
exhausted. The Excess K-Test Contributions allocated to a Participant shall be
reduced by any excess deferrals previously distributed for the calendar year
ending with or within the Plan Year in which the Excess K-Test Contributions
arose, pursuant to Section 5.12(a).

 

 

(c)

Excess M-Test Contributions: With respect to any Plan Year, the excess of the
aggregate amount of M-Test Contributions actually made on behalf of Highly
Compensated Employees for such Plan Year over the maximum amount of such
contributions permitted under Section 5.10(c). The Excess M-Test Contributions
of an individual Highly Compensated Employee shall be determined (i) by
calculating the total dollar amount resulting from a reduction of the M-Test
Contributions made on behalf of Highly Compensated Employees in order of the
M-Test Contribution Percentages, beginning with the highest percentage, until
the limitations of Section 5.10(c) are met, and (ii) by reducing the M-Test
Contributions made on behalf of Highly Compensated Employees in order of the
dollar amount of M-Test Contributions for each Highly Compensated Employee,
beginning with the highest dollar amount, and subtracting such amounts from the
total dollar amount determined in (i) above until the total dollar amount is
exhausted. The determination of the amount of Excess M-Test Contributions for
the Plan Year shall be made after first determining the Excess Deferrals and
Excess K-Test Contributions for the Plan Year.

 

 

(d)

Excess Combined-Test Contributions: With respect to any Plan Year, the excess of
the aggregate amount of the K-Test Contributions actually made on behalf of
Highly Compensated Employees for such Plan Year over the maximum amount of such
contributions permitted under Section 5.10(d), provided that M-Test
Contributions are not reduced. The Excess Combined-Test Contributions of an
individual Highly Compensated Employee shall be determined in the same manner as
Excess K-Test Contributions under (b) above, except disregarding the provision
for taking into account distributions of Excess Deferrals.

 

 

(e)

Excess Combined-Test Contributions: With respect to any Plan Year, the excess of
the aggregate amount of the M-Test Contributions actually made on behalf of
Highly Compensated Employees for such Plan Year over the maximum amount of such
contributions permitted under Section 5.10(d), provided that K-Test
Contributions are not reduced. The Excess Combined-Test Contributions of an
individual Highly Compensated Employee shall be determined in the same manner as
Excess M-Test Contributions under (c) above.

 

 

(f)

Subsections 5.11(d) and (e) shall not apply for Plan Years commencing after
December 31, 2001.

 

20

 

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

5.12         Correction of Excess Contributions: The Plan provides the following
methods for correcting excess contributions as described in Section 5.11:

 

 

(a)

Excess Deferrals: The Plan Administrator shall direct the Trustee to distribute
to a Participant from his/her Participant Elective Deferral Account an amount
equal to the Participant’s Excess Deferral plus income, if any, allocable
thereto. Such distribution shall be designated by the Plan Administrator as a
distribution of an Excess Deferral and shall be made not earlier than the date
on which the Trustee receives the Excess Deferral and not later than the first
April 15 following the end of the calendar year in which the Excess Deferral is
made.

 

 

(b)

Excess K-Test Contributions: The Plan Administrator shall direct the Trustee to
distribute to a Participant his/her Excess K-Test Contribution plus income, if
any, allocable thereto. Such distribution shall be designated by the Plan
Administrator as a distribution of an excess contribution and shall be made
after the end of the Plan Year in which the excess contribution arose and within
twelve (12) months after the end of such Plan Year.

 

If the Employer has made a Matching Contribution attributable to any portion of
the Participant’s Excess K-Test Contribution distributed to the Participant
pursuant to the above, the Plan Administrator shall treat such Matching
Contribution as forfeiture. The forfeited amount shall be used to reduce the
Employer’s Matching Contribution otherwise required for the Plan Year or for any
subsequent Plan Year.

 

 

(c)

Excess M-Test Contributions: The Plan Administrator shall direct the Trustee to
distribute to a Participant any portion of the Participant’s Excess M-Test
Contribution, plus income, if any, allocable thereto. Such distribution shall be
designated by the Plan Administrator as a distribution of excess contributions
and shall be made after the end of the Plan Year in which the excess
contribution arose and within twelve (12) months after the end of such Plan
Year.

 

 

(d)

Excess Combined-Test Contributions: The Plan Administrator shall correct the
Excess Combined-Test Contributions in the same manner as for Excess K-Test and
M-Test Contributions in (b) and (c) above, provided however, that the Plan
Administrator shall direct the Trustee to distribute the portion of the Excess
K-Test Contribution or Excess M-Test Contribution or a combination of both which
results in the least amount distributed from the Plan. The provisions of this
subsection 5.12(d) shall not apply for Plan Years commencing after December 31,
2001.

 

For purposes of the above, income shall include realized and unrealized gains
and losses for the Plan Year and for the period from the end of the Plan Year to
the date of distribution (the “gap period”) and shall be allocated to excess
contributions in accordance with all appropriate Code and Regulation provisions.
Distributions of excess contributions pursuant to the above shall be made
without regard to any consent by the Participant otherwise required under this
Plan.

 

ARTICLE VI  ALLOCATIONS TO ACCOUNTS

 

6.01         Revaluation of Assets: Not less frequently than as of the Annual
Valuation Date each year, the Plan Administrator shall re-value the net assets
of all Participants’ General Investments Accounts and Employer Securities
Accounts in the Investment Fund. The valuation shall determine the current fair
market value. At the Plan Administrator’s discretion, applied on a consistent
basis, the Plan Administrator may similarly revalue the net assets of the
Investment Fund at the end of a semi-annual, quarterly, monthly or more frequent
period; the last day of such period shall be referred to as an Interim Valuation
Date. The net investment income or loss on the Investment Fund since the
previous Annual or Interim Valuation Date shall then be determined. An
independent appraiser shall perform all valuations of Employer Securities that
are not readily tradeable on an established securities market. The valuation
requirement of the immediately preceding sentence applies to all Employer
Securities acquired by the Plan.

 

6.02         Allocation of Contributions and Forfeitures: Contributions and
forfeitures for any period shall be credited to the Accounts of Participants in
the following manner:

 

21

 

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

 

(a)

With respect to Elective Deferral contributions made pursuant to Section 5.01,
an amount equal to the Participant’s Elective Deferral since the previous Annual
or Interim Valuation Date shall be allocated and credited to his/her Participant
Elective Deferral Account.

 

 

(b)

Matching Contributions made pursuant to Section 5.06 shall be allocated on each
Annual Valuation Date (or if the Employer makes Matching Contributions on a
calendar quarter or other periodic basis, on the last day of each calendar
quarter or other period) to each Participant’s Account who satisfies the
requirements of Section 6.04(a), in an amount equal to the Employer Matching
Contribution percentage determined by the Employer for the Plan Year. If the
Employer makes a Matching Contribution to the Plan at any time during the Plan
Year, any limit on the percentage amount shall not be determined by reference to
Annual Compensation for the Plan Year, but by reference to Compensation (subject
to the limitations on Compensation imposed under Section 2.11) paid only during
the period to which the Matching Contribution relates. Nevertheless, if the
Employer makes an additional Matching Contribution for the Plan Year as provided
in the last paragraph of Section 5.06, the additional Matching Contribution
shall be allocated on an annual, rather than periodic, basis.

 

 

(c)

Employer Profit-Sharing Contributions made pursuant to Section 5.07, shall be
allocated as of each Annual Valuation Date to each Participant who satisfies the
requirements of Section 6.04(b). The Employer Profit-Sharing Contribution shall
be credited to the Employer Profit-Sharing Contribution Accounts of each such
Participant in an amount equal to the percentage determined according to the
allocation formula set forth in Section 6.06. At the time the Employer makes its
Profit-Sharing Contribution, the Employer shall designate to the Administrator
the Plan Year for which the Profit-Sharing Contribution shall be deemed to have
been made (which may be the current Plan Year or the immediately prior or
subsequent Plan Year, as the Employer deems appropriate). If the Employer makes
no designation, the Employer Profit-Sharing Contribution shall be deemed to have
been made for the Plan Year that begins concurrent with or within the taxable
year of the Employer for which the Employer claims a deduction under Code §404.

 

 

(d)

Forfeitures from Employer Matching Contribution Accounts that are reallocated
pursuant to Section 11.06 shall be used to reduce the amount of the Employer’s
Matching Contributions for the Plan Year. They shall be allocated as of each
Annual Valuation Date to each Participant’s Matching Contribution Account who
satisfies the requirements of Section 6.04 in the same manner as Employer
Matching Contribu­tions in (b) above.

 

 

(e)

Forfeitures from Employer Profit-Sharing Contribution Accounts that are
reallocated pursuant to Section 11.06 shall be allocated in addition to the
amount of the Employer’s Profit Sharing Contributions for the Plan Year. They
shall be allocated as of each Annual Valuation Date to each Participant’s Profit
Sharing Contribution Account who satisfies the requirements of Section 6.04 in
the same manner as Employer Profit Sharing Contributions in (c) above.

 

 

(f)

With respect to contributions made pursuant to Section 5.05, an amount equal to
the Participant’s Rollover Contributions since the previous Annual or Interim
Valuation Date shall be credited to the Participant’s Rollover Contribution
Account.

 

 

(g)

Contributions by the Employer of Employer Securities shall be allocated solely
to the Employer Securities Account. All other contributions, whether by the
Employer or any Participant, shall be allocated solely to the General
Investments Account.

 

6.03         Adjustment of Accounts: As of each Annual or Interim Valuation Date
all Participants’ and Inactive Participants’ Accounts shall be adjusted to
reflect the contributions and income received, profits and losses, and
distributions and expenses of the Trust Fund since the previous Annual or
Interim Valuation Date. The adjustments shall be made in the following manner
and order:

 

 

(a)

Each Account shall be charged with all forfeitures, withdrawals and
distributions from the Account since the previous Annual or Interim Valuation
Date. In making a forfeiture reduction under this Section, the Plan
Administrator, to the extent possible, first must forfeit from a Participant’s
General Investments Account before making a forfeiture from his/her Employer
Securities Account.

 

22

 

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

 

(b)

Each Account shall be charged with any administrative costs or expenses incurred
and paid by the Plan that are allocable to the Account since the previous Annual
or Interim Valuation Date. All administrative costs and expenses, to the extent
possible, shall be paid from a Participant’s General Investments Account before
being paid from his/her Employer Securities Account

 

 

(c)

Each Participant’s General Investment Account that has a non-zero balance after
the application of (a) and (b) above, shall be credited (or charged) with its
proportionate share of the net investment income (or loss) and expenses since
the previous Annual or Interim Valuation Date. The amount to be credited or
charged to each Account shall be determined based on the ratio that: (i) the
balance in the Account on the previous Annual or Interim Valuation Date less any
forfeitures, withdrawals or distributions from the Account since that date bears
to (ii) the total of such amounts determined for all Accounts. Notwithstanding
the previous sentence, in the sole discretion of the Plan Administrator, the
method of allocating the net investment income (or loss) of the General
Investment Account may be adjusted to reflect the effect of cash flows into and
out of such Accounts (such as contributions, payments on Participant loans,
distributions, etc.) based on the length of time between the date of such cash
flow and the current Annual or Interim Valuation Date. Any such adjustment
pursuant to the previous sentence shall be made in a uniform and
non-discriminatory manner among Participants and/or the types of Accounts.

 

 

(d)

Each Account shall be credited with the contributions allocated to it since the
previous Annual or Interim Valuation Date, subject to the following rules:

 

 

(1)

The Employer Securities Account maintained for each Participant shall be
credited with the Participant’s allocable share of Employer Securities
(including fractional shares) contributed in kind to the Trust, with any
forfeitures of Employer Securities and with any stock dividends on Employer
Securities allocated to his/her Employer Securities Account. The Plan
Administrator will base allocations to the Participant’s Employer Securities
Account on dollar values expressed as shares of Employer Securities or on the
basis of actual shares, assuming there is only a single class of Employer
Securities.

 

 

(2)

The General Investments Account maintained for each Participant shall be
credited with the Participant’s allocable share of Elective Deferrals and any
Employer Contribution not attributable to Employer Securities, according to the
provisions of Section 6.02.

 

 

(e)

Cash dividends the Employer pays with respect to Employer Securities shall be
allocated to the General Investments Accounts of Participants in the same ratio,
determined on the dividend declaration date, that Employer Securities allocated
to a Participant’s Employer Securities Account bear to the Employer Securities
allocated to all Employer Securities Accounts.

 

 

6.04

Eligibility for Allocation of Employer Matching and Profit Sharing
Contributions:

 

 

(a)

In allocating Matching Contributions to a Participant’s Account, the
Administrator shall take into account only the Compensation paid the Employee
during the period to which the allocation applies and he is an eligible
Participant in the Plan with a valid, executed Salary Reduction Agreement in
effect and on file with the Administrator. A Participant need not complete any
minimum Hours of Service during the Plan Year or be employed on any particular
day of the Plan Year in order to receive an allocation of Employer Matching
Contributions.

 

 

(b)

The Administrator shall determine allocations of Employer Profit Sharing
Contribu­tions on the basis of the Plan Year. In allocating Profit Sharing
Contributions to a Participant’s Account, the Administrator shall take into
account only the Compensa­tion paid to the Participant after he has satisfied
the eligibility requirements of Section 4.01 and to which the allocation
applies. A Participant must complete at least one thousand (1000) Hours of
Service during the Plan Year and must be employed on the last day of the Plan
Year in order to receive an allocation of Employer Profit Sharing Contributions,
unless the Participant has incurred a Termination of Employment during the Plan
Year on account of death, Disability or retirement. It shall not be necessary
for the Participant to have a Salary Reduction Agreement in effect in order to
receive an allocation of Employer Profit Sharing Contributions.

 

23

 

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

                6.05        Suspension of Accrual Requirements for Employer
Profit Sharing Contributions: The Plan suspends the accrual requirements under
Section 6.04(b) for Employer Profit Sharing Contributions if for any Plan Year
the Plan fails to satisfy the Coverage Test. The Plan satisfies the Coverage
Test for the Plan Year if the number of Nonhighly Compensated Employees who
benefit under the Plan is at least equal to 70% of the total number of
Includible Nonhighly Compensated Employees for the Plan Year. “Includible”
Employees are all Employees other than: (1) those Employees excluded from
participating in the Plan for the entire Plan Year by reason of the collective
bargaining unit exclusion or the nonresident alien exclusion described in the
Code or by reason of the age and service requirements of Section 4.01; and (2)
any Employee who incurs a Termination of Employment during the Plan Year and
fails to complete at least 501 Hours of Service for the Plan Year. A “Nonhighly
Compensated Employee” is an Employee who is not a Highly Compensated Employee.
For purposes of the Coverage Test an Employee is benefiting under the Plan for a
Plan Year if, under Section 6.04, he is entitled to an allocation of Employer
Non-Elective Contributions for the Plan Year.

 

If this Section 6.05 applies for a Plan Year, the Plan Administrator will
suspend the accrual requirements for the Includible Employees who are
Participants, beginning first with the Includible Employee(s) employed with the
Employer on the last day of the Plan Year, then the Includible Employee(s) who
have the latest Termination of Employment during the Plan Year, and continuing
to suspend the accrual requirements for each Includible Employee who incurred an
earlier Termination of Employment, from the latest to the earliest date of
Termination of Employment, until the Plan satisfies the Coverage Test for the
Plan Year. If two or more Includible Employees have a Termination of Employment
on the same day, the Plan Administrator will suspend the accrual requirements
for all such Includible Employees, irrespective of whether the Plan can satisfy
the Coverage Test by accruing benefits for fewer than all such Includible
Employees. If the Plan suspends the accrual requirements for an Includible
Employee, that Employee will share in the allocation of Employer Contributions
and Participant forfeitures, if any, without regard to the number of Hours of
Service he has earned for the Plan Year and without regard to whether he is
employed by the Employer on the last day of the Plan Year.

 

6.06         New Comparability Formula for Allocation of Employer Profit Sharing
Contributions: Subject to the Top Heavy allocation requirements of Article XIX
and the Code §415 limitations of Article VII, each Participant’s share of
Employer Profit Sharing Contributions

contributed by the Employer under Section 5.07 on behalf of each Allocation
Group will be allocated on the last day of the Plan Year (and on such other date
or dates as determined by the Plan Administrator on a nondiscriminatory basis)
to each Allocation Group. For purposes of this Section 6.06 each Participant who
is not an Inactive Participant (an “Eligible Participant”) will constitute a
separate Allocation Group. The amount allocated to each Allocation Group will be
subject to the following provisions:

 

 

(a)

Failsafe Allocation: For each Plan Year beginning on or after January 1, 2002,
in which it is necessary for the Plan to pass nondiscrimination testing on the
basis of equivalent benefit rates as provided under regulation §1.401(a)(4), the
allocations made under this Section must satisfy either the “broadly available
test” described in subparagraph (1) or one of the “gateway tests” described in
subparagraph (2) or subparagraph (3) below.

 

 

(1)

Broadly Available Test If Employer Does Not Maintain A Defined Benefit Plan: To
satisfy the “broadly available test”, each Allocation Rate applicable to any
Eligible Participant must be currently available within the meaning of
regulation §1.401(a)(4)-4(b)(2) to a group of Employees and, were such group to
be treated as a group of Employees covered under a separate plan, such group of
Employees must satisfy the requirements of Code §410(b) without regard to the
average benefit percentage test in regulation §1.410(b)-5. For this purpose, if
two allocation rates could be permissively aggregated under regulation
§1.401(a)(4)-4(d)(4), assuming the allocation rates were treated as benefits,
rights or features, then such allocation rates may be aggregated and treated as
a single allocation rate. In addition, the disregard of age and service
conditions described in regulation §1.401(a)(4)-4(b)(2)(ii)(A) does not apply
for purposes of this subparagraph (1).

 

 

(2)

Gateway Test If The Employer Does Not Maintain A Defined Benefit Plan: In order
to satisfy the “gateway test” for any Plan Year in which the Employer does not
maintain a defined benefit plan that also covers Participants covered in this
Plan for any portion of the Plan Year, the Allocation Rate for each Eligible
Participant who is an NHCE for the Plan Year must be equal to either (A) 5% of
each Eligible Participant’s Compensation; or (B) 33.33% of the highest
Allocation Rate for any Participant who is an HCE for the Plan Year.

 

24

 

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

 

(3)

If The Employer Does Maintain One Or More Defined Benefit Plans: If the Employer
maintains one or more defined benefit plans that cover Participants in this Plan
for any portion of a Plan Year, the Plan Administrator may elect to apply for
that Plan Year either the procedure set forth in subparagraph (A) or the
procedure in subparagraph (B), as follows:

 

 

(A)

Election To Not Permissively Aggregate: The Plan Administrator may elect not to
permissively aggregate this Plan and such defined benefit plan or plans for
purposes of satisfying the coverage tests of Code §410(b) and the
nondiscrimination tests of Code §401(a)(4), and instead may elect to separately
test each plan for such purposes. In that event, either the “gateway test” in
subparagraph (2) above or the “broadly available test” of subparagraph (1) above
will apply for this Plan.

 

 

(B)

Election To Permissively Aggregate: The Plan Administrator may elect to
permissively aggregate this Plan and such defined benefit plan(s) for purposes
of satisfying both the coverage tests of Code §410(b) and the nondiscrimination
tests of Code §401(a)(4), in which event for the Plan Year the aggregated plans
will be known as a “DB/DC Plan” and will be subject to the requirements in
subparagraphs (i) or (ii) below. Unless elected otherwise by the Plan
Administrator, this Plan and the defined benefit plan(s) will not necessarily be
considered a DB/DC Plan because the plans are being aggregated solely to apply
the average benefit ratio test in regulation §1.410(b)-5. If a DB/DC Plan
applies, nondiscrimination testing under Code §401(a)(4) may be passed for this
Plan and all defined benefit plans of the Employer and any other FX Employer
either on the basis of Aggregate Normal Allocation Rates, or at the option of
the Plan Administrator and only if either of the exceptions in subparagraph (i)
are satisfied or the “gateway test” conditions in subparagraph (ii) are
satisfied, on the basis of equivalent benefit rates under regulation
§1.401(a)(4) (i.e. normal accrual rates under the defined benefit plans and
equivalent benefit rates under the defined contribution plans):

 

 

(i)

“Broadly Available” Or “Primarily Defined Benefit” Tests Are Satisfied: The
requirements of this subparagraph (i) are deemed satisfied if both the defined
contribution plan components and the defined benefit plan components of the
DB/DC Plan are considered to be “broadly available” as defined in subparagraph
(1) above, or the DB/DC Plan is considered to be “primarily defined benefit”. A
DB/DC Plan is considered to be “primarily defined benefit” if more than 50% of
the Eligible Participants who are NHCEs for the Plan Year have a normal accrual
rate under the defined benefit plan or plans that exceeds their equivalent
benefit rates under the defined contribution plans.

 

 

(ii)

“Gateway Test” Is Satisfied: The requirements of this subparagraph (ii) are
deemed satisfied if the “gateway test” for a DB/DC Plan is satisfied, in which
the Allocation Rate for each Eligible Participant who is an NHCE for the Plan
Year must be at least equal to the Aggregate Normal Allocation Rate.

 

 

(b)

Determination Of Accrual And Allocation Rates: The normal accrual rate and the
equivalent normal allocation rate attributable to defined benefit plans, the
equivalent accrual rate attributable to defined contribution plans, and the
Aggregate Normal Allocation Rate are determined under regulation
§1.401(a)(4)(b)(2)(ii), but without taking into account the imputation of
permitted disparity under regulation §1.401(a)(4)-7, except as otherwise
permitted under regulation §1.401(a)(4)-9(b)(2)(v)(C).

 

 

(c)

Definitions: Solely for purposes of this Section 6.06, the following listed
terms shall have the meanings indicated.

 

25

 

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

 

(1)

“Allocation Rate” shall mean the percentage obtained by dividing (A) the total
amount of Employer contributions or reallocated Forfeitures that are allocated
on the Participant’s behalf under all defined contribution plans of the Employer
or an FX Employer that are aggregated for nondiscrimination testing under Code
§401(a)(4) (not including any Matching Contributions if such plan or plans
includes Elective Deferrals), by (B) the Participant’s Compensation.

 

 

(2)

“Aggregate Normal Allocation Rate” shall mean the sum of the Allocation Rate in
the defined contribution plan(s) and the equivalent Allocation Rate in the
defined benefit plan(s) of the Employer or an Affiliated Employer that are
permissively aggregated to pass the coverage tests of Code §410(b) and the
nondiscrimination tests of Code §401(a)(4). The Aggregate Normal Allocation Rate
for each Eligible Participant who is an NHCE for the Plan Year will equal the
percentage in subparagraphs (A), (B) or (C) below. At the discretion of the Plan
Administrator, the equivalent Allocation Rate for any Plan Year under such
defined benefit plan(s) for each Eligible Participant who is an NHCE and who
benefits under the defined benefit plan(s) for the Plan Year may be deemed to be
equal to the average of the equivalent Allocation Rates under the defined
benefit plan(s) for all such Eligible Participants.

 

 

(A)

33.33% Rate: If the highest Aggregate Normal Allocation Rate of any Eligible
Participant who is an HCE for the Plan Year is less than 15%, then the Aggregate
Normal Allocation Rate for each Eligible Participant who was an NHCE for the
Plan Year will be 33.33% of such highest Aggregate Normal Allocation Rate; or

 

 

(B)

5% Rate: If the highest Aggregate Normal Allocation Rate of any Eligible
Participant who is an HCE for the Plan Year is at least 15% but is not greater
than 25%, then the Aggregate Normal Allocation Rate for each Eligible
Participant who was an NHCE during the Plan Year will be 5% of each such
Eligible Participant’s Compensation; or

 

 

(C)

Rate Higher Than 5% To Maximum 7.5% Rate: If the highest Aggregate Normal
Allocation Rate of any Eligible Participant who is an HCE for the Plan Year is
greater than 25%, then the Aggregate Normal Allocation Rate for each Eligible
Participant who is an NHCE for the Plan Year will be equal to the sum of (A) 5%
of each such Eligible Participant’s Compensation, plus (B) one percentage point
for each five percentage points (or portion thereof) that the highest Aggregate
Normal Allocation Rate of any Eligible Participant who is an HCE for the Plan
Year exceeds 25%. However, the maximum Aggregate Normal Allocation Rate for each
Eligible Participant who is an NHCE for the Plan Year will not exceed 7.5% of
each such Eligible Participant’s Code §415 Compensation.

 

 

(3)

“Compensation” shall have the meaning set forth in Section 7.01(b).

 

6.07         Participant Diversification of Employer Securities Account: This
Section shall be effective from and after January 1, 2007. Except as
specifically provided in this Section 6.07 and in Section 18.06, the Plan does
not permit individual direction of investment by a Participant of the Employer
Securities Account.

 

 

(a)

Each Qualified Participant shall be permitted to direct the investment of the
Participant’s Eligible Accrued Benefit from the Participant’s Employer
Securities Account into the Participant’s General Investments Account during the
Participant’s Qualified Election Period. The Qualified Participant may make his
investment direction in writing or may utilize any other investment direction
method permitted under the Plan. If the direction provides for the sale of
Employer Securities it must also specify which of the investment options in the
General Investments Account the Participant has selected for purchase with the
proceeds from the sale. A Qualified Participant who elects to diversify may
invest the proceeds from the sale of the Employer Securities into any of the
investment options available in the General Investments Account.

 

26

 

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

 

(b)

For purposes of this Section 6.07 the following definitions apply:

 

 

(1)

“Eligible Accrued Benefit” shall mean the following designated portions of the
Participant’s Accrued Benefit attributable to Employer Securities:

 

 

(A)

one hundred percent (100%) of the Participant’s Elective Deferral Contributions
made and allocated to the Participant’s Account after December 31, 2006;

 

 

(B)

one hundred percent (100%) of the Employer’s Matching and Profit Sharing
Contributions made and allocated to the Participant’s Account after December 31,
2006;

 

 

(C)

for the Plan Year commencing January 1, 2007, thirty-three percent (33%) of the
Participant’s Account acquired or allocated by the Plan no later than December
31, 2006;

 

 

(D)

for the Plan Year commencing January 1, 2008, sixty-six percent (66%) of the
Participant’s Account acquired or allocated by the Plan no later than December
31, 2006; and

 

 

(E)

for the Plan Year commencing January 1, 2009, one hundred percent (100%) of the
Participant’s Account acquired or allocated by the Plan no later than December
31, 2006.

 

For any Participant who has attained at least age fifty-five (55) and has
completed at least three (3) Years of Vesting Service no later than December 31,
2005, the percentage amounts in (C) and (D) above shall be 100%.

 

 

(2)

“Qualified Participant” means a Participant who has completed at least three (3)
Years of Vesting Service prior to the commencement of the Qualified Election
Period. No minimum Years of Vesting Service must be completed for a Participant
to be deemed a Qualified Participant with respect to diversification of the
Eligible Accrued Benefit described in sub-Section (b)(1)(A) above. All of a
Participant’s Years of Vesting Service (including those credited prior to
January 1, 2007) shall be taken into account under this subsection. An Alternate
Payee and a Beneficiary of any Participant who has satisfied the foregoing rules
shall also be a Qualified Participant.

 

 

(3)

“Qualified Election Period” means the first Plan Year beginning after completion
by the Participant of the required Years of Vesting Service (or where no minimum
Vesting Service is required, the first calendar quarter following an allocation
of Employer Securities to the Participant’s Account) and continuing thereafter
for as long as the Qualified Participant maintains an Account in the Plan.
Diversification elections shall be permitted no more frequently than once during
each calendar quarter of the Qualified Election Period.

 

ARTICLE VII  LIMITATIONS ON ALLOCATIONS

 

 

7.01

Special Definitions: The following terms shall be defined as follows:

 

 

(a)

“Annual Additions” shall mean the sum of the following amounts allocated on
behalf of a Participant for a Limitation Year:

 

 

(1)

Employer contributions; and

 

 

(2)

Employee contributions; and

 

 

(3)

Forfeitures available for reallocation, if applicable.

 

27

 

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

Participant Elective Deferrals shall be considered to be Employer contributions.
Amounts reapplied to reduce Employer contributions and amounts reapplied from a
suspense account (if any) under Section 7.05 as well as contributions allocated
to any Individual Medical Benefit Account which is part of a defined benefit
plan shall also be included as Annual Additions.

 

For purposes of this Article, an Annual Addition is credited to the Account of a
Participant for a particular Limitation Year if it is allocated to the
Participant’s Account as of any day within such Limitation Year. Employer
contributions will not be deemed credited to a Participant unless the
contributions are actually made to the Plan no later than the end of the period
described in Code §404(a)(6) applicable to the taxable year with or within which
the particular Limitation Year ends.

 

“Annual Additions” do not include any Employer Contributions applied by the Plan
Administrator (not later than the due date, including extensions, for filing the
Employer’s federal income tax return for the Plan Year) to pay interest (charged
to a Participant’s Account) on an Exempt Loan, and any Leveraged Employer
Securities the Plan Administrator allocates as forfeitures; provided however,
the provisions of this sentence do not apply in a Limitation Year for which the
Plan Administrator allocates more than one-third of the Employer Contributions
applied to pay principal and interest on an Exempt Loan to Highly Compensated
Employee-Participants. The Plan Administrator may reallocate the Employer
Contributions in accordance with Section 6.02 to the Accounts of non-Highly
Compensated Employee-Participants to the extent necessary in order to satisfy
this special limitation.

 

 

(b)

“Compensation” for purposes of this Article VII (compliance with Code §415) and
for purposes of compliance with any applicable non-discrimination test,
including the determination of an Employee’s status as a Highly Compensated
Employee and the K-Test and M-Test procedures described in Section 5.10, shall
mean and be determined as follows:

 

 

(1)

The term “Compensation” shall include:

 

 

(A)

The Participant’s wages, salaries, fees for professional service and other
amounts received (whether or not paid in cash) for personal services actually
rendered in the course of employment with an Employer maintaining the plan
(including, but not limited to, commissions paid to salesmen, compensation for
services on the basis of a percentage of profits, commissions on insurance
premiums, tips, bonuses, fringe benefits, reimbursements and expense
allowances).

 

(B)

In the case of a Participant who is an employee within the meaning of Code
§401(c)(1), the Participant’s earned income as described in Code §401(c)(2).

 

 

(C)

Any amounts contributed by the Employer or received by the Participant pursuant
to an unfunded, non-qualified plan of deferred compensation to the extent such
amounts are includable in the gross income of the Participant for the Limitation
Year.

 

 

(D)

Any amount contributed or deferred by the Employer at the election of the
Participant and which is not includable in the gross income of the Participant
by reason of Code §§125, 401(k), 403(b) or 457.

 

 

(E)

Elective amounts that are not includable in the gross income of the Employee by
reason of Code §132(f)(4).

 

 

(2)

The term “Compensation” does not include items such as:

 

28

 

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

 

(A)

Except as provided in subparagraph (1)(D) above, any Employer contributions to a
qualified retirement plan and any Employer contributions to any other retirement
plan which receive special tax benefits to the extent the contributions are not
includable in the gross income of the Participant for the taxable year in which
made; and any distributions from any qualified retirement plan, regardless of
whether the distributions are includable in the gross income of the Participant.

 

 

(B)

Employer contributions made on behalf of a Participant to a simplified employee
pension described in Code §408(k) to the extent such contributions are
deductible by the Employer under Code §219(b)(7).

 

 

(C)

Except as provided in subparagraph (1)(D) above, other forms of compensation
which receive special tax benefits, such as premiums for group health insurance
and group term life insurance (but only to the extent that the compensation is
not includable in the gross income of the Participant).

 

 

(D)

Amounts realized from the exercise of a non-qualified stock option, or when
restricted stock (or property) held by a Participant either becomes freely
transferable or is no longer subject to a substantial risk of forfeiture (see
Code §83 and the regulations thereunder).

 

 

(E)

Amounts realized from the sale, exchange, or other disposition of stock acquired
under a qualified stock option.

 

 

(F)

Compensation in excess of two hundred thousand dollars ($200,000), or such
greater amount as adjusted by the Secretary of the Treasury for increases in the
cost of living in accordance with Code §401(a)(17)(B). The cost-of-living
adjustment in effect for a calendar year applies to determine the Compensation
limit for the Limitation Year that begins with or within such calendar year.

 

 

(3)

Compensation actually paid or made available to a Participant within the
Limitation Year shall be the Compensation used for the purposes of applying the
limitations of this Article and Code §415. In the case of a group of Employers
which constitutes an Affiliated Group, all Employers shall apply this same rule.

 

 

(c)

“Defined Contribution Dollar Limitation” shall mean the lesser of:

 

 

(1)

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

 

 

(2)

one hundred percent (100%) of the Participant’s Compensation, as defined in this
Section 7.01, for the Limitation Year. The Compensation limit referred to in
this sub-section 7.01(c)(2) shall not apply to any contribution for medical
benefits after separation from service (within the meaning of Code §401(h) or
Code §419A(f)(2)) which is otherwise treated as an Annual Addition.

 

 

(d)

“Employer” shall mean the Employer that adopts this Plan and, in the case of a
group of employers which constitutes an Affiliated Group, all such employers
shall be considered a single Employer for purposes of applying the limitations
of this Article.

 

 

(e)

“Excess Amount” shall mean the excess of the Participant’s Annual Additions for
the Limitation Year over the Maximum Permissible Amount for such Limitation
Year.

 

 

(f)

“Individual Medical Benefit Account” shall mean any separate account which is
established for a Participant under a defined benefit plan and from which
benefits described in Code §401(h) are payable solely to such Participant, his
spouse or his dependents.

 

29

 

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

 

(g)

“Limitation Year” shall mean the twelve (12) consecutive month period specified
in Article II.

 

The Limitation Year may be changed by amending the election previously made by
the Employer. Any change in the Limitation Year must be a change to a twelve
(12) month period commencing with any day within the current Limitation Year.
The limitations of this Article (and Code §415) are to be separately applied to
a limitation period which begins with the first day of the current Limitation
Year and which ends on the day before the first day of the first Limitation Year
for which the change is effective.

 

The dollar limitation on Annual Additions with respect to this limitation period
is determined by multiplying the applicable dollar limitation for the calendar
year in which the limitation period ends by a fraction, the numerator of which
is the number of months (computed to the nearest whole month) in the limitation
period and the denominator of which is twelve (12).

 

The Limitation Year for all years prior to the effective date of Code §415
shall, as applied to this Plan, be the twelve (12) consecutive month period
selected as the Limitation Year for the first Limitation Year after the
effective date of Code §415.

 

 

(h)

“Maximum Permissible Amount” shall mean, for a given Limitation Year, the
Defined Contribution Dollar Limitation. If a short Limitation Year is created
because of an amendment changing the Limitation Year to a different twelve (12)
consecutive month period, the Maximum Permissible Amount for such short
Limitation Year shall not exceed the amount in (1) above multiplied by a
fraction, the numerator of which is the number of months in the short Limitation
Year (computed to the nearest whole month) and the denominator of which is
twelve (12).

 

 

7.02

Coordination With Other Plans:

 

 

(a)

If the Employer maintains another qualified cash or deferred arrangement
(“Alternate 401(k) Plan”) covering Participants in this Plan and if the Annual
Additions to a Participant’s Account in this Plan and the annual additions to
the Participant’s account in the Alternate 401(k) Plan would result in the
allocation on an allocation date of this Plan that coincides with an allocation
date of the Alternate 401(k) Plan of an Excess Amount, the Excess Amount
attributed to this Plan shall be determined by the Plan Administrator on a
uniform and non-discriminatory basis, considering the amount of elective
deferrals and Employer contributions made to each Participant’s account in the
Alternate 401(k) Plan, and the anticipated allocation of the Employer
Contribution to this Plan. The Plan Administrator shall coordinate its actions
with those of the plan administrator of the Alternate 401(k) Plan to provide for
the maximum possible allocation to all Participants in both plans, taking into
account the provisions of the Alternate 401(k) Plan allowing for distribution of
elective deferrals to reduce an Excess Amount. In this regard, the Plan
Administrator, whenever possible, shall allow for the allocation and
distribution of elective deferrals from the Alternate 401(k) Plan so as to
eliminate or reduce the possibility of creating a suspense account under this
Plan or under the Alternate 401(k) Plan. If, after distributing all amounts that
may be distributed from the Alternate 401(k) Plan, there still remains an Excess
Amount, the Plan Administrator will attribute the total Excess Amount to the
Alternate 401(k) Plan.

 

 

(b)

If the Employer maintains another qualified defined contribution plan during any
Limitation Year that covers Participants in this Plan and as a consequence of
the requirements of Section 7.04 an Excess Amount is allocated to a
Participant’s Account in this Plan on an allocation date that coincides with an
allocation date in the other plan, the total Excess Amount shall be deemed
allocated to the other plan.

 

7.03         Order of Limitations: If, pursuant to this Article, it is necessary
to limit or reduce the amount of Contributions credited to a Participant under
this Plan during a Limitation Year, the limitation or reduction shall be made in
the following order:

 

 

(a)

First, from the Participant’s General Investment Account, in the following
order:

 

 

(1)

Unmatched Participant Elective Deferrals;

 

30

 

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

 

(2)

Employer Matching Contributions;

 

 

(3)

Matched Participant Elective Deferrals;

 

 

(4)

Employer Profit Sharing Contributions.

 

 

(b)

Second, from Employer Profit Sharing Contributions to the Participant’s Employer
Securities Account.

 

7.04         Aggregation of Plans: For purposes of applying the limitations of
this Article applicable to a Participant for a particular Limitation Year, all
qualified defined benefit plans ever maintained by the Employer shall be treated
as one defined benefit plan, all defined contribution plans ever maintained by
the Employer shall be treated as one defined contribution plan and any Employee
contributions to a defined benefit plan shall be treated as a defined
contribution plan.

 

7.05         Suspense Account: If, as a result of a reasonable error in
estimating a Participant’s Compensation, determining the allocation of
forfeitures or determining the amount of elective deferrals under any cash or
deferred arrangement sponsored by an FX Employer for the Limitation Year or
under other limited facts and circumstances allowed under Reg. §1.415-6(b), the
Annual Additions to this Plan would cause an allocation to the Account of a
Participant in excess of the Maximum Permissible Amount for the Limitation Year,
the Plan Administrator shall deal with the Excess Amount as follows:

 

 

(a)

First, the Plan Administrator shall distribute to the Participant his/her
Elective Deferrals for the Limitation Year to the extent that the distribution
reduces the Excess Amount, provided that the Plan Administrator shall not
distribute any Elective Deferral to the Participant that would cause the Plan to
make a concurrent reduction in the amount of Employer Matching Contributions
allocated to the Participant’s Account. A distribution under this provision
shall include earnings or gains attributable to the returned Elective Deferrals.
All distributions shall be made no later than and in the manner provided in
Section 5.10(d).

 

 

(b)

Second, to the extent there remains an Excess Amount after application of
Section 7.05(a), the Plan Administrator shall hold the Excess Amount in a
suspense account and allocate and reallocate the amount in the suspense account
in the following Limitation Year (and in succeeding Limitation Years, if
necessary) to reduce Employer Profit Sharing Contributions, Employer Matching
Contributions and Elective Deferrals (in that order) to the Account of that
Participant if that Participant is covered by the Plan as of the end of the
Limitation Year. If the Participant is not covered, the excess amount shall be
allocated and reallocated in the next Limitation Year to all Participants’
Accounts in the Plan before any Employer Profit Sharing Contributions, Employer
Matching Contributions and Elective Deferrals (in that order) that would
constitute Annual Additions are made to the Plan for the Limitation Year, or at
the option of the FX Employer, the Excess Amount shall be used to reduce
Employer Profit Sharing Contributions and Employer Matching Contributions to the
Plan for the Limitation Year by the amount in the suspense account that is
allocated and reallocated during the Limitation Year. The suspense account shall
be an unallocated account equal to the sum of all Excess Amounts for all
Participants in the Plan during the Limitation Year. The suspense account shall
not share in any earnings or losses of the Trust Fund. The Plan may not
distribute any amounts in the suspense account to any Participant whether before
or after Termination of Employment or termination of the Plan.

 

ARTICLE VIII  IN-SERVICE AND HARDSHIP WITHDRAWALS

 

8.01         Withdrawals Due to Attainment of Age 59½, Completion of Service or
Hardship: Except as otherwise provided in this Section 8.01 and in Section 8.05,
no amounts may be withdrawn by a Participant from any Account held for his/her
benefit prior to Termination of Employment with the Employer, unless the
Employee has attained his/her Normal Retirement Date.

 

31

 

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

 

(a)

A Participant who has attained Age 59½ may withdraw all or any portion of
his/her Elective Deferral Account. A Participant who has been a Participant in
the Plan for at least five (5) Plan Years and who is 100% vested in his/her
Account may withdraw all or any portion of his/her Matching Contribution and
Profit Sharing Accounts, regardless of attained Age, except that this withdrawal
right shall not apply to any portion of the participant’s Matching Contribution
and Profit Sharing Accounts which is invested in the Participant’s Employer
Securities Account. A Participant may make a withdrawal (regardless of Account)
no more than once in each calendar quarter. In the event the Participant’s
Account includes amounts subject to the rules in Section 9.06, a withdrawal may
only be made with respect to such amounts in accordance Section 9.06.

 

 

(b)

A Participant may elect to withdraw an amount credited to his/her Participant
Elective Deferral Account without regard to the Participant’s Age, but only if
he obtains prior approval from the Plan Administrator, which approval shall be
granted only upon a determination of Financial Hardship. In the case of a
withdrawal due to Financial Hardship, the amount of the withdrawal shall be
limited to the total amount of the Participant’s Elective Deferrals, without
regard to income allocable thereto. Upon granting approval, the Plan
Administrator shall direct the Trustee to distribute the indicated portion of
the Participant’s Elective Deferral Account to the Participant.

 

8.02         Financial Hardship Distribution Rules:Plan adopts the deemed
hardship distribution standards set forth in Reg. §1.401(k)-1(d)(2)(iv)
(effective January 1, 2006, Reg. §1.401(k)-1(d)(3)(iv)). As a consequence, the
Plan Administrator shall not approve any distribution on account of Financial
Hardship unless the distribution is determined by the Administrator to be
necessary to meet a Participant’s immediate and heavy financial need. The
distribution will be deemed necessary if:

 

 

(a)

The distribution is not in excess of the amount of the Participant’s immediate
and heavy financial need, including amounts necessary to pay any federal, state
or local income taxes or penalties reasonably anticipated to result from the
distribution; and

 

 

(b)

Other resources of the Participant are not reasonably available to meet this
need. Whether other resources are reasonably available to the Participant must
be determined by the Plan Administrator on the basis of all the relevant facts
and circumstances. For this purpose the Participant’s resources are deemed to
include assets of the Participant’s spouse and minor children that are
reasonably available to the Participant.

 

The condition in Section 8.02(b) above is deemed to be met if the Participant
has obtained all distributions, other than hardship distributions, and all
nontaxable loans currently available under all plans maintained by the Employer.
If a Participant receives a distribution on account of Financial Hardship during
a Plan Year, his or her Elective Deferrals to this Plan and his or her employee
contributions to all other plans maintained by the Employer (including qualified
and non-qualified plans of deferred compensation and annuities under Code
§403(b)) shall be suspended for six months after receipt of the hardship
distribution.

 

8.03         Determination of Immediate and Heavy Financial Need: For purposes
of Section 8.03, a distribution shall be deemed to be on account of an immediate
and heavy financial need if the distribution is for:

 

 

(a)

Expenses for medical care described in Code §213(d) incurred by the Participant,
the Participant’s spouse or any dependent of the Participant or expenses
necessary for these persons to obtain such medical care;

 

 

(b)

Payment of tuition and related educational fees, including room and board, for
up to the next 12 months of post-secondary education for the Participant, the
Participant’s spouse, or a dependent of the Participant (as defined in Code
§152, and, for taxable years beginning on or after January 1, 2005, without
regard to Code §§152(b)(1), (b)(2) and (d)(1)(B));

 

 

(c)

Costs directly related to purchase (excluding mortgage payments) a principal
residence for the Participant; or

 

32

 

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

 

(d)

Payments necessary to prevent the eviction of the Participant from his or her
principal residence or foreclosure of the mortgage on that residence.

 

Effective January 1, 2006, a distribution shall also be deemed to be on account
of an immediate and heavy financial need if the distribution is on account of
either of the following additional circumstances:

 

 

(e)

Payments for burial or funeral expenses for the Participant’s deceased parent,
spouse, children or dependents (as defined in Code §152, and, for taxable years
beginning on or after January 1, 2005, without regard to Code §152(d)(1)(B)); or

 

 

(f)

Expenses for the repair of damage to the Participant’s principal residence that
would qualify for the casualty deduction under Code §165 (determined without
regard to whether the loss exceeds 10% of adjusted gross income).

 

8.04         Withdrawal of Rollover Contributions: Effective for Plan Years
commencing on or after January 1, 2004, in the event a Participant has a
Rollover Contribution Account in the Plan, the Participant shall, upon written
notice to the Plan Administrator, be entitled to withdraw at any time, subject
to the restrictions described below, any amount up to the balance of the
Rollover Contribution Account. Withdrawals shall have no effect upon any
benefits provided under any other provisions of this Plan. The Plan
Administrator and Trustee may establish a reasonable policy regarding the
minimum amount that may be withdrawn and the frequency with which withdrawals
may be made. The policy shall be in writing and shall be administered in a
uniform and non-discriminatory manner.

 

If the Participant’s Accrued Benefit at the time he requests a withdrawal from
the Rollover Contribution Account or at any prior time has been greater than
$5,000, no such withdrawal may be made prior to the Participant’s Normal
Retirement Age unless the Participant first consents in writing. The amount
withdrawn shall be distributed to the Participant in the manner and form
provided in Section 11.02 as if the amount were distributed on account of the
Participant’s Termination of Employment or, if the Participant is eligible for
Normal Retirement, in the manner and form provided in Article IX as if the
amount were distributed on account of the Participant’s Retirement. If the
spousal consent rules of Section 9.06 apply to any amount in the Participant’s
Account, then no amount shall be withdrawn unless prior to the withdrawal the
Participant’s spouse, if any, consents to each separate withdrawal.

 

ARTICLE IX  RETIREMENT BENEFITS

 

9.01         Normal or Late Retirement: A Participant shall be eligible for
Normal Retirement on reaching his/her Normal Retirement Date. A Participant who
has not become an Excluded Employee may continue in the service of the Employer
as a Participant hereunder beyond his/her Normal Retirement Date. In the event
such a Participant continues in the service of the Employer, he shall continue
to be treated in all respects as a Participant until his/her actual retirement.
When any Participant has a Termination of Employment following his/her Normal
Retirement Date he shall be considered a retired Participant and he shall be
entitled to receive the entire amount of his/her Accrued Benefit, distributed as
set forth below.

 

9.02         Disability Retirement: Upon any Participant incurring a Disability,
regardless of whether he is also treated as having a Termination of Employment,
he shall be considered a disabled Participant and entitled to begin receiving
his/her Accrued Benefit. Such amount shall be distributed as provided in
Section 9.03, or deferred until such later date as elected by the disabled
Participant and then distributed as provided in Section 9.03.

 

9.03         Method of Payment: Subject to the provisions of Section 9.06 and
Article XXII, upon receipt of a claim for benefits a retired or disabled
Participant’s Accrued Benefit shall be payable as elected by the Participant, in
a single lump sum payment. The amount of the lump sum payment shall be equal to
the Participant’s Accrued Benefit on the date payment is made. Payment shall be
made in cash only, to the extent the Participant’s Accrued Benefit is
attributable to the balance in the Participant’s General Investments Account and
in Employer Securities only, to the extent the Participant’s Accrued Benefit is
attributable to the balance in the Participant’s Employer Securities Account.

 

Except as provided in Section 9.04, no payment shall be made to a Participant
prior to his/her Normal Retirement Age unless the Participant consents in
writing to the payment not more than ninety (90) days (effective January 1,
2007, 180 days) prior to his/her Distribution Date.

 

33

 

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

Not less than thirty (30) days nor more than ninety (90) days (effective January
1, 2007, 180 days) before the Distribution Date, the Plan Administrator shall
notify the Participant of the terms, conditions and forms of payment available
from the Plan, including a description of the election procedures under this
Section and a general explanation of the financial effect on a Participant’s
Accrued Benefit of the election. The minimum thirty (30) day waiting period
after the notification is provided until the Distribution Date may be
disregarded if the Plan Administrator informs the Participant of his/her right
to the full minimum thirty (30) day waiting period, and the Participant elects
in writing (or by other electronic means acceptable to the Plan Administrator)
to waive the minimum thirty (30) day waiting period.

 

If the amount of the Vested Accrued Benefit in the Participant’s Account that
would be payable to a disabled or retired Participant in a lump sum is not more
than Five Thousand Dollars ($5,000), without regard to whether the Vested
Accrued Benefit in the Participant’s Account has ever exceeded that amount at
the time of any prior distribution, the benefit shall be paid as a single lump
sum payment in cash as soon as Administratively Feasible following the end of
the calendar month in which his/her Termination of Employment occurs without
regard to any Participant consent requirement or the requirements of Section
9.06. The Accrued Benefit held in the Participant’s Employer Securities Account
shall be valued as of the most recent preceding Valuation Date.

 

If the Participant dies prior to the complete distribution of the Participant’s
Accrued Benefit to him, then the Plan Administrator, upon notice of the
Participant’s death, shall direct the Trustee to make payment in accordance with
the provisions of Article X.

 

For all distributions commencing on or after March 28, 2005, the five thousand
dollar ($5,000) threshold amount in this Section shall be reduced to one
thousand dollars ($1,000).

 

9.04         Time of Payment: Payment of the portion of the retired or disabled
Participant’s Accrued Benefit held in his/her General Investments Account shall
commence as soon as Administratively Feasible following the end of the calendar
month in which a claim for benefits is submitted to the Plan Administrator.
Payment of the portion of the Accrued Benefit held in the Participant’s Employer
Securities Account shall commence as soon as Administratively Feasible after the
next Valuation Date that follows the date the claim for benefits is submitted to
the Plan Administrator. A Participant may elect to delay distribution of his/her
Accrued Benefit held in his/her General Investments Account until distribution
of the amounts in his/her Employer Securities Account. Unless a Participant
elects otherwise (and failure to submit a claim for benefits shall be deemed
such an election) payment of benefits under this Plan will commence not later
than sixty (60) days after the close of the Plan Year in which the latest of the
following events occurs:

 

 

(a)

The attainment by the Participant of Age sixty-five (65) or, if earlier, his/her
Normal Retirement Age; or

 

 

(b)

The tenth (10th) anniversary of the Participant’s Entry Date; or

 

 

(c)

The date the Participant terminates employment with the Employer.

 

If the amount of the payment required to commence on the date determined above
cannot be ascertained by such date, or if it is not possible to make such
payment on such date because the Plan Administrator has been unable to locate
the Participant after making reasonable efforts to do so, a payment retroactive
to such date may be made no later than sixty (60) days after the earliest date
on which the amount of such payment can be ascertained or the date the
Participant is located, whichever is applicable.

 

9.05         Minimum Distribution Requirements: This Section 9.05 and Section
10.04 shall take precedence over any inconsistent provisions of this Plan. All
distributions required to be made under this Section 9.05 (life distributions)
or under Section 10.04 (death distributions) will be determined and made in
accordance with the Treasury regulations under Code §401(a)(9).

 

34

 

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

 

(a)

Effective Date. This Section and Section 10.04 (as amended herein) will apply
for purposes of determining required minimum distributions for all calendar
years beginning with the 2003 calendar year. Required minimum distributions for
the 2002 calendar year under this Section and Section 10.04 will be determined
as follows. If the total amount of 2002 required minimum distributions under the
Plan made to a Participant or Beneficiary prior to the effective date of this
Section equals or exceeds the required minimum distributions determined under
this Section, then no additional distributions will be required to be made for
the 2002 calendar year on or after such date to the Participant or Beneficiary.
If the total amount of the 2002 calendar year required minimum distributions
under the Plan made to the Participant or Beneficiary prior to the effective
date of this Section is less than the amount determined under this Section, then
required minimum distributions for the 2002 calendar year on and after such date
will be determined so that the total amount of required minimum distributions
for the 2002 calendar year made to the Participant or Beneficiary will be the
amount determined under this Section.

 

 

(b)

Time and Manner of Distribution.

 

 

(1)

Required Beginning Date. The Participant’s entire Vested Accrued Benefit will be
distributed, or begin to be distributed, to the Participant no later than the
participant’s Required Beginning Date.

 

 

(2)

Death of Participant Before Distributions Begin. If the Participant dies before
distributions begin, the Participant’s entire Vested Accrued Benefit will be
distributed, or begin to be distributed, as provided in Section 10.04.

 

 

(3)

Forms of Distribution. Unless the participant’s interest has been distributed in
the form of a single sum on or before the Required Beginning Date, as of the
first Distribution Calendar Year distributions will be made in accordance with
Section 9.05(c).

 

 

(c)

Required Minimum Distributions During Participant’s Lifetime

 

 

(1)

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

 

 

(i)

the quotient obtained by dividing the Participant’s Account Balance by the
distribution period in the Uniform Lifetime Table set forth in Treas. Reg.
Section 1.401(a)(9)-9, using the Participant’s Age as of the Participant’s
birthday in the Distribution Calendar Year; or

 

 

(ii)

if the Participant’s sole Designated Beneficiary for the Distribution Calendar
Year is the Participant’s spouse, the quotient obtained by dividing the
Participant’s Account Balance by the number in the Joint and Last Survivor Table
set forth in Treas. Reg. Section 1.401(a)(9)-9, using the Participant’s and
spouse’s attained ages as of the participant’s and spouse’s birthdays in the
Distribution Calendar Year.

 

 

(2)

Lifetime Required Minimum Distributions Continue Through Year of Participant’s
Death. Required minimum distributions will be determined under this Section
9.05(c) beginning with the first Distribution Calendar Year and up to and
including the Distribution Calendar Year that includes the Participant’s date of
death.

 

 

(d)

Definitions. For purposes of this Section 9.05 and Article X the following
definitions shall apply.

 

 

(1)

“Designated Beneficiary” shall mean the individual who is designated as the
Beneficiary under Section 10.02 of the Plan and is the Designated Beneficiary
under Code §401(a)(9) Treas. Reg. Section 1.401(a)(9)-1, Q&A-4.

 

35

 

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

 

(2)

“Distribution Calendar Year” shall mean a calendar year for which a minimum
distribution is required. For distributions beginning before the Participant’s
death, the first Distribution Calendar Year is the calendar year immediately
preceding the calendar year that contains the Participant’s Required Beginning
Date. For distributions beginning after the Participant’s death, the first
Distribution Calendar Year is the calendar year in which distributions are
required to begin under Section 10.04. The required minimum distribution for the
Participant’s first Distribution Calendar Year will be made on or before the
Participant’s Required Beginning Date. The required minimum distribution for
other Distribution Calendar Years, including the required minimum distribution
for the Distribution Calendar Year in which the Participant’s Required Beginning
Date occurs, will be made on or before December 31 of that Distribution Calendar
Year.

 

 

(3)

“Life Expectancy” shall mean Life Expectancy as computed by use of the Single
Life Table in Treas. Reg.§1.401(a)(9)-9.

 

 

(4)

“Participant’s Account Balance” shall mean the balance in the Participant’s
Account as of the last valuation date in the calendar year immediately preceding
the Distribution Calendar Year (valuation calendar year) increased by the amount
of any contributions made and allocated or forfeitures allocated to the account
balance as of dates in the valuation calendar year after the valuation date and
decreased by distributions made in the valuation calendar year after the
valuation date. The account balance for the valuation calendar year includes any
amounts rolled over or transferred to the plan either in the valuation calendar
year or in the Distribution Calendar Year if distributed or transferred in the
valuation calendar year.

 

 

(5)

“Required Beginning Date” shall mean, if a Participant is a more than five
percent (5%) owner in the Plan Year ending in or with the calendar year in which
the Participant attains Age 70½, April 1st following that calendar year. For any
other Participant the Required Beginning Date is April 1st following the close
of the calendar year in which the Participant attains Age 70½, or, if later,
April 1st following the close of the calendar year in which the Participant has
a Termination of Employment.

 

 

(6)

“Five percent (5%) owner” shall have the meaning set forth in Reg.
§1.401(a)(9)-1, Q&A-2(c).

 

 

(e)

Form of Benefit Payment. If payment of the Participant’s Accrued Benefit
commences under this Section 9.05, it shall be distributed to the Participant
(consistent with the Participant’s election and the requirements of Section
9.03):

 

 

(1)

In the form of a cash lump sum payment of the Participant’s entire Accrued
Benefit; or

 

 

(2)

In the form of minimum annual cash installment payments over a period not
extending beyond the life expectancy of the Participant, or the joint life
expectancy of the Participant and his/her Designated Beneficiary.

 

If the Participant fails to elect a form of payment, the Plan shall distribute
the Participant’s benefit in annual installments, commencing no later than the
Required Beginning Date, with each subsequent installment payment to be made not
later than each December 31 thereafter.

 

 

(f)

Redetermination of Life Expectancy. For purposes of determining the amount of
any minimum annual cash installment payments whenever the Participant’s
Designated Beneficiary is his/her spouse, the life expectancy of the Participant
and his/her Designated Beneficiary spouse shall be redetermined annually, unless
otherwise elected by the Participant. If the Participant’s Designated
beneficiary is not his/her spouse, redetermination of life expectancy shall not
apply. Notwithstanding the above, any distribution required under the incidental
death benefit requirements of Code §401(a) shall be treated as a required
distribution.

 

36

 

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

9.06         Qualified Joint and Survivor Annuity: Effective for all
distributions commencing after December 31, 2001, (provided notice has been
delivered to all Participants as required in DOL Reg. §2520.104b-3), this
Section shall apply only to a Participant or Inactive Participant with respect
to whom this Plan holds Transferred Benefits that were directly or indirectly
transferred from a defined benefit pension plan, money purchase pension plan, or
other qualified plan to which Code §401(a)(11)(B)(iii) applies. Furthermore,
this Section shall only apply to that portion of the Participant’s Transferred
Benefits attributable to such transfer (the “Annuity Eligible Accrued
Benefits”). Prior to January 1, 2004, this Section shall apply as provided in
the Prior Plan.

 

 

(a)

Qualified Joint and Survivor Annuity: A Participant or Former Participant shall
receive his/her Annuity Eligible Accrued Benefits in the form of a Qualified
Joint and Survivor Annuity, unless he elects otherwise as provided in
subsection (b) below. The Qualified Joint and Survivor Annuity is an immediate
annuity providing monthly payments for the life of the Participant with, if the
Participant is married on the Distribution Date, a survivor annuity providing
monthly payments for the life of the Participant’s surviving spouse (terminating
with the last payment due prior to her death) equal to fifty percent (50%) of
the monthly payment amount during the joint lives of the Participant and his/her
spouse. The monthly payment amount of the Qualified Joint and Survivor Annuity
shall be that amount that can be purchased from an Insurer with the Annuity
Eligible Accrued Benefits of the Participant as of the Distribution Date.

 

The Qualified Joint and Survivor Annuity for a Participant or Former Participant
who is not married on his/her Distribution Date shall be a life annuity that
provides monthly payments for the life of the Participant and terminates with
the last payment due prior to his/her death. The annuity shall be purchased from
an Insurer in an amount that can be provided by the Participant’s Annuity
Eligible Accrued Benefits.

 

 

(b)

Notice and Election of Form of Retirement Benefit: Each Participant or Inactive
Participant with an Annuity Eligible Accrued Benefit shall be provided a written
notification by the Plan Administrator. The notification shall be in
non-technical language and shall include:

 

 

(1)

A general description or explanation of the terms and conditions of the
Qualified Joint and Survivor Annuity;

 

 

(2)

The circumstances in which it will be provided unless the Participant elects
otherwise;

 

 

(3)

The Participant’s right to make, and the effect of, an election to waive the
Qualified Joint and Survivor Annuity form of benefit;

 

 

(4)

The rights of the Participant’s spouse under subsection (c);

 

 

(5)

The right to make, and the effect of, a revocation of an election to waive the
Qualified Joint and Survivor Annuity form of benefit;

 

 

(6)

A general explanation of the relative financial effect of the election on a
Participant’s benefits; and

 

 

(7)

A general explanation of the eligibility conditions and other material features
of the optional forms of retirement benefit and sufficient additional
information to explain the relative values of the optional forms of retirement
benefit.

 

The notification shall also inform the Participant that a specific written
explanation in non-technical language of the terms and conditions of the
Qualified Joint and Survivor Annuity and the financial effect upon the
particular Participant’s benefits of making an election against the Qualified
Joint and Survivor Annuity is available upon written request by the Participant.
The notification shall be provided not less than thirty (30) days nor more than
ninety (90) days before the Distribution Date. If the Participant requests a
specific written explanation, the explanation shall be provided within thirty
(30) days of the Participant’s request. The Plan Administrator need not comply
with more than one such request made by a particular Participant.

 

37

 

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

During the Joint and Survivor Election Period, as hereinafter defined, a
Participant eligible to make the election to waive the Qualified Joint and
Survivor Annuity of subsection (a) shall be eligible to elect to receive his/her
benefits as provided in Section 9.03. The election shall be in writing and may
be revoked at any time during the Joint and Survivor Election Period. New
elections and revocations may be made any number of times during the Joint and
Survivor Election Period after a previous election or revocation. For purposes
of this paragraph, the term “Joint and Survivor Election Period” shall mean the
ninety (90) day period ending on the Distribution Date.

 

 

(c)

Consent of Spouse: Notwithstanding any other provision of this Article, any
election by a Participant or Inactive Participant to waive the Qualified Joint
and Survivor Annuity pursuant to subsection (b) shall not be given effect
unless:

 

 

(1)

The spouse of the Participant consents in writing to such election;

 

 

(2)

The spouse acknowledges the form of benefit payment elected by the Participant
and, if applicable, the Beneficiary designated by the Participant, or the spouse
relinquishes the right to specify the form of benefit payment and name the
Beneficiary; and the spouse’s consent acknowledges the effect of such election
and is witnessed by the Plan Administrator (or representative thereof) or a
notary public;

 

 

(3)

It is established to the satisfaction of the Plan Administrator that the consent
required under (1) above may not be obtained because there is no spouse, because
the spouse cannot be located, or because of such other circumstances as the
Secretary of the Treasury may by Regulation prescribe; or

 

 

(4)

The lump sum benefit otherwise payable to the Participant is less than Three
Thousand Five Hundred Dollars ($3,500) and a lump sum payment will be made
pursuant to Section 9.03.

A waiver of the Qualified Joint and Survivor Annuity made pursuant to
subsection (b) shall be automatically revoked upon the marriage of the
Participant, prior to his/her Distribution Date, to a person who has not
consented to the waiver pursuant to subsection (1) above or from whom consent
was not required by reason of subsection (2) above; or upon a change in the form
of benefit payment or in the Beneficiary designated by the Participant pursuant
to subsection (1)(ii) above, unless the spouse has relinquished the right to
specify the form of benefit payment and to name the Beneficiary.

 

If the requirements of the preceding paragraphs are not satisfied, the
Participant shall receive his/her Annuity Eligible Accrued Benefit in the form
of the Qualified Joint and Survivor Annuity.

 

 

9.07

Distribution of Employer Securities:

 

 

(a)

So long as the Plan holds Employer Securities that are not issued by an FX
Employer that is an electing corporation under sub-chapter S of the Code, then
to the extent the Participant’s Account is invested in such Employer Securities
distributions of benefits from the Plan shall be made in those Employer
Securities, valued at fair market value at the time of distribution. Any
fractional security share to which a Participant or his/her Beneficiary is
entitled shall be paid in cash.

 

 

(b)

If the Employer’s charter or bylaws restrict ownership of substantially all
shares of Employer Securities to Employees or to the Trust, then distribution of
the Participant’s Accrued Benefit attributable to his/her Employer Securities
Account shall be made entirely in cash.

 

9.08         Distribution of Transferred Benefits: To the extent not already
provided under the terms of this Plan, and notwithstanding any other provisions
to the contrary, this Plan guarantees to each Participant whose Account includes
Transferred Benefits the right to receive all Transferred Benefits in any
optional form of benefit (including time, manner and method of distribution)
protected under IRC §411(d)(6). The extent and nature of the optional forms of
benefits so protected shall be determined by reference to the Predecessor
Plan(s). Effective for Plan Years commencing after December 31, 2002, (or if
sooner, ninety (90) days after notice is given to all Plan Participants that
satisfies DOL Reg. §2520.104b-3) no optional forms of benefit, except those
required under Section 9.06 and those set forth in Section 9.03 shall be
available under the Plan.

 

38

 

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

ARTICLE X  DEATH BENEFITS

 

10.01        Death Benefits Payable: If a Participant who has not received a
distribution of his/her entire Vested Interest dies, whether before or after
his/her Distribution Date, the death benefit payable to the Beneficiary,
Contingent Beneficiary or estate (as the case may be) of the Participant shall
be all amounts credited (or to be credited) to his/her Accounts then held by the
Trustee for the Participant’s benefit, without regard to the Participant’s
Vested Percentage and that have yet to be distributed. If an Inactive
Participant who has not received a distribution of his/her entire Vested
Interest dies, whether before or after his/her Distribution Date, the death
benefit payable to the Beneficiary, Contingent Beneficiary or estate (as the
case may be) of the Inactive Participant shall be the remaining Vested Interest
in the Inactive Participant’s Accounts then held by the Trustee for the Inactive
Participant’s benefit.

 

10.02        Designation of Beneficiary: Each Participant or Inactive
Participant shall be given the opportunity to designate a Beneficiary and
Contingent Beneficiary and from time to time the Participant or Inactive
Participant may file with the Plan Administrator a new or revised designation,
provided that his/her spouse shall be his/her Beneficiary unless his/her spouse
has consented in writing to the designation of a Beneficiary other than his/her
spouse or it is established to the satisfaction of the Plan Administrator that
the consent of the spouse may not be obtained because there is no spouse, the
spouse cannot be located or because of such other circumstances as may be set
forth in Regulations issued pursuant to Code §417(a)(2)(B). The change in
marital status of a Participant from married to unmarried or vice versa shall
void any outstanding beneficiary designation and require the completion and
execution of a new beneficiary designation consistent with the provisions of
this Section. Each Participant or Inactive Participant may also designate any
form of payment available under Section 9.03 to the Beneficiary or Contingent
Beneficiary. A Participant shall not be permitted to designate the form of
payment on any beneficiary designation amended or executed after the Effective
Date. Beneficiary designations shall be completed in the manner approved by the
Plan Administrator or set forth in writing on a form provided by the Plan
Administrator.

 

If upon the Participant’s death his/her designated Beneficiary does not survive
him, the Contingent Beneficiary shall become the Beneficiary and any death
benefits shall be paid to him or her. If a deceased Participant is not survived
by a designated Beneficiary or Contingent Beneficiary, or if no Beneficiary was
designated, the benefits shall be paid to the Participant’s surviving spouse or
if there is no surviving spouse, then to the executor or administrator of the
Participant’s estate. For purposes of determining the right of a Beneficiary,
Contingent Beneficiary or surviving spouse to receive a benefit on account of
the death of a Participant, he or she shall not be deemed to have survived the
Participant unless he or she shall survive the Participant by at least thirty
(30) days.

 

If the Beneficiary, Contingent Beneficiary or surviving spouse survives the
Participant and is entitled to receive benefits under this Section 10.02, but
dies prior to receiving the entire death benefit payable to him or her, the
remaining portion of the death benefit shall be paid to the person’s named
beneficiary or, if none, to the person’s estate subject to the right of
commutation.

 

10.03        Death Benefit Payment Procedure: Upon receipt of a claim for
benefits, the Participant’s death benefit shall be paid by the Trustee to the
Beneficiary designated by the Participant pursuant to Section 10.02. The
Beneficiary of a Participant may elect to receive any death benefits payable
hereunder in any Optional Form of Payment provided in Article IX other than a
Joint and Survivor Annuity. Until such time as distribution is made to the
Beneficiary the Participant’s Account shall be held in the Plan, subject to all
investment directions of the Beneficiary as though he or she were the
Participant. The Beneficiary’s election to receive distribution shall be made in
the same manner provided under Articles IX and XI for distribution to
Participants. If the Beneficiary fails to elect a form of payment, then subject
to the small benefit distribution rules in the next paragraph, the Plan shall
distribute the death benefit in annual installments, commencing no later than
December 31 of the Plan Year following the Plan Year of the Participant’s death,
with each subsequent installment payment to be made no later than each December
31 thereafter.

 

39

 

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

If the lump sum benefit otherwise payable to the Beneficiary is not more than
Five Thousand Dollars ($5,000.00), and payment of benefits to the deceased
Participant has not previously commenced, the benefit shall be paid as a single
lump sum payment. Payment of any death benefits under this paragraph shall
commence, unless otherwise designated by the Participant or elected by the
Beneficiary, as soon as Administratively Feasible following the Participant’s
date of death and the end of the calendar month in which the Plan Administrator
receives a claim for benefits. However, if the amount of the benefit required to
paid on the date determined above cannot be ascertained by that date, or if it
is not possible to make the payment on that date because the Plan Administrator
has been unable to ascertain or locate the Beneficiary after making reasonable
efforts to do so, a payment retroactive to that date may be made as soon as
Administratively Feasible after the earliest date on which the Beneficiary or
amount of the payment can be ascertained or the date the Beneficiary is located,
whichever is applicable

 

10.04       Required Distributions Upon Death: Notwithstanding any other
provisions of this Plan, payment of death benefits shall be subject to the
following rules:

 

 

(a)

Death of Participant Before Distributions Begin. If the Participant dies before
distributions begin, the Participant’s entire Vested Accrued Benefit will be
distributed, or begin to be distributed no later than as follows:

 

 

(1)

If the Participant’s surviving spouse is the Participant’s sole Designated
Beneficiary, then unless otherwise provided herein, distributions to the
surviving spouse will begin by December 31 of the calendar year immediately
following the calendar year in which the Participant died, or by December 31 of
the calendar year in which the Participant would have attained Age 70½, if
later.

 

 

(2)

If the Participant’s surviving spouse is not the Participant’s sole Designated
Beneficiary, then except as otherwise provided herein, distributions to the
Designated Beneficiary will begin by December 31 of the calendar year
immediately following the calendar year in which the Participant died.

 

 

(3)

If there is no Designated Beneficiary as of September 30 of the year following
the year of the Participant’s death, the Participant’s entire Vested Accrued
Benefit will be distributed by December 31 of the calendar year containing the
fifth anniversary of the Participant’s death.

 

 

(4)

If the Participant’s surviving spouse is the Participant’s sole Designated
Beneficiary and the surviving spouse dies after the Participant but before
distributions to the surviving spouse begin, this Section 10.04(a), other than
subsection (a)(1), will apply as if the surviving spouse were the Participant.

 

For purposes of this Section 10.04(a) and Sections 10.04(e)and (f), unless
Section 10.04(a)(4) applies, distributions are considered to begin on the
participant’s Required Beginning Date. If Section 10.04(a)(4) applies,
distributions are considered to begin on the date distributions are required to
begin to the surviving spouse under Section 10.04(a)(1).

 

 

(b)

Forms of Distribution. Unless the participant’s interest has been distributed in
the form of a single sum on or before the Required Beginning Date, as of the
first Distribution Calendar Year distributions will be made in accordance with
Sections 10.04(e) and (f).

 

 

(c)

Beneficiaries’ Election of Five Year Rule. Beneficiaries may elect on an
individual basis whether the five year rule or the Life Expectancy rule in
Sections 10.04(a) and (f) applies to distributions after the death of a
Participant who has a Designated Beneficiary. The election must be made no later
than the earlier of September 30 of the calendar year in which distribution
would be required to begin under Section 10.04(a) or by September 30 of the
calendar year that contains the fifth anniversary of the Participant’s (or, if
applicable, surviving spouse’s) death. If neither the Participant nor
Beneficiary makes an election under this subsection, distributions will be made
in accordance with Sections 10.04(a) and (f).

 

40

 

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

 

(d)

Transition Rule for Designated Beneficiary Receiving Distributions Under Five
Year Rule to Elect Life Expectancy Distributions. A Designated Beneficiary who
is receiving payments under the five year rule may make a new election to
receive payments under the Life Expectancy rule until December 31, 2003,
provided that all amounts that would have been required to be distributed under
the Life Expectancy rule for all Distribution Calendar Years before 2004 are
distributed by the earlier of December 31, 2003, or the end of the five year
period.

 

 

(e)

Death On or After Date Distributions Begin.

 

 

(1)

Participant Survived by Designated Beneficiary. If the Participant dies on or
after the date distributions begin and there is a Designated Beneficiary, the
minimum amount that will be distributed for each Distribution Calendar Year
after the year of the Participant’s death is the quotient obtained by dividing
the Participant’s Account Balance by the longer of the remaining Life Expectancy
of the Participant or the remaining Life Expectancy of the Participant’s
Designated Beneficiary, determined as follows:

 

 

(i)

The Participant’s remaining Life Expectancy is calculated using the Age of the
Participant in the year of death, reduced by one for each subsequent year.

 

 

(ii)

If the Participant’s surviving spouse is the Participant’s sole Designated
Beneficiary, the remaining Life Expectancy of the surviving spouse is calculated
for each Distribution Calendar Year after the year of the Participant’s death
using the surviving spouse’s Age as of the spouse’s birthday in that year. For
Distribution Calendar Years after the year of the surviving spouse’s death, the
remaining Life Expectancy of the surviving spouse is calculated using the Age of
the surviving spouse as of the spouse’s birthday in the calendar year of the
spouse’s death, reduced by one for each subsequent calendar year.

 

 

(iii)

If the Participant’s surviving spouse is not the Participant’s sole Designated
Beneficiary, the Designated Beneficiary’s remaining Life Expectancy is
calculated using the Age of the Beneficiary in the year following the year of
the Participant’s death, reduced by one for each subsequent year.

 

 

(2)

No Designated Beneficiary. If the Participant dies on or after the date
distributions begin and there is no Designated Beneficiary as of September 30 of
the year after the year of the Participant’s death, the minimum amount that will
be distributed for each Distribution Calendar Year after the year of the
Participant’s death is the quotient obtained by dividing the Participant’s
Account Balance by the Participant’s remaining Life Expectancy calculated using
the Age of the Participant in the year of death, reduced by one for each
subsequent year.

 

 

(f)

Death Before Date Distributions Begin.

 

 

(1)

Participant Survived by Designated Beneficiary. If the Participant dies before
the date distributions begin and there is a Designated Beneficiary, the minimum
amount that will be distributed for each Distribution Calendar Year after the
year of the Participant’s death is the quotient obtained by dividing the
Participant’s Account Balance by the remaining Life Expectancy of the
Participant’s Designated Beneficiary, determined as provided in Section
10.04(e).

 

 

(2)

No Designated Beneficiary. If the Participant dies before the date distributions
begin and there is no Designated Beneficiary as of September 30 of the year
following the year of the Participant’s death, distribution of the Participant’s
entire interest will be completed by December 31 of the calendar year containing
the fifth anniversary of the Participant’s death.

 

41

 

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

 

(3)

Death of Surviving Spouse Before Distributions to Surviving Spouse Are Required
to Begin. If the Participant dies before the date distributions begin, the
Participant’s surviving spouse is the Participant’s sole Designated Beneficiary,
and the surviving spouse dies before distributions are required to begin to the
surviving spouse under Section 10.04 (a)(1), this Section 10.04(f) will apply as
if the surviving spouse were the Participant.

 

10.05        Qualified Pre-retirement Survivor Annuity and Related Matters:
Effective for all distributions commencing after December 31, 2001, (provided
notice has been delivered to all Participants and Beneficiaries as required in
DOL Reg. §2520.104b-3) this Section shall apply only to a Participant or
Inactive Participant with respect to whom this Plan holds Transferred Benefits
that were directly or indirectly transferred from a defined benefit pension
plan, money purchase pension plan, or other qualified plan to which Code
§401(a)(11)(B)(iii) applies. Furthermore, this Section shall only apply to that
portion of the Participant’s Transferred Benefits attributable to such transfer
(“Annuity Eligible Accrued Benefits”). Prior to January 1, 2004, this Section
shall apply as provided in the prior Plan.

 

If a Participant or Inactive Participant dies prior to his/her Distribution Date
and is survived by a spouse, a Qualified Pre-retirement Survivor Annuity shall
be paid to the surviving spouse except as otherwise provided by the following
provisions. A Qualified Pre-retirement Survivor Annuity is an immediate annuity
payable to the Participant for the life of the spouse in monthly amounts equal
to the monthly amount that can be purchased from an insurer with fifty percent
(50%) of the Annuity Eligible Accrued Benefits of the Participant as of the date
of his/her death.

 

 

(a)

A Participant may elect to waive the Qualified Pre-retirement Survivor Annuity
provided under this Section during the election period described in
subsection (d). The waiver may be revoked by the Participant during the election
period by filing with the Plan Administrator on a form approved by the Plan
Administrator an executed revocation of such waiver. Following revocation a
Participant may again waive the Qualified Pre-retirement Survivor Annuity and
subsequently revoke the waiver any number of times during the election period.

 

 

(b)

A waiver pursuant to subsection (a) shall not be effective unless:

 

 

(1)

The spouse, to whom the Participant is married at the time such waiver is
executed, consents in writing to such waiver;

 

 

(2)

The spouse acknowledges the form of the death benefit payable in lieu of the
Qualified Pre-retirement Survivor Annuity and the Beneficiary designated by the
Participant, or the spouse relinquishes the right to specify the form of the
death benefit and name the Beneficiary; and

 

 

(3)

The consent acknowledges the effect of the waiver and is witnessed by the Plan
Administrator (or representative thereof) or a notary public; or

 

 

(4)

It is established to the satisfaction of the Plan Administrator that the consent
of the spouse required by this Section may not be obtained because there is no
spouse, the spouse cannot be located or because of such other circumstances as
may be set forth in Regulations issued pursuant to Section 417(a)(2)(B) of the
Code; and

 

 

(3)

The waiver is made on a form approved by the Plan Administrator and executed by
the Participant and, if required, the spouse of the Participant.

 

 

(c)

A waiver made pursuant to subsection (a) shall be automatically revoked:

 

 

(1)

Upon the marriage of the Participant to a person who has not consented to the
waiver pursuant to subsection (b)(1) or from whom consent was not required by
reason of subsection (b)(2); or

 

 

(2)

Upon a change in the form of the death benefit or in the Beneficiary designated
by the Participant, unless the spouse has relinquished the right to specify the
form of the death benefit and to name the Beneficiary.

 

42

 

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

 

(d)

The election period shall begin on the first day of the Plan Year in which the
Participant attains Age thirty-five (35) and shall end on the date such
Participant dies. Notwithstanding the foregoing, in the case of a Participant
who incurs a Termination of Employment before the Participant attains Age
thirty-five (35), the election period shall begin on the date of Termination of
Employment and shall end on the date the Participant dies.

 

 

(e)

Notwithstanding anything in this Section to the contrary, an election to waive
the Qualified Pre-retirement Survivor Annuity made by a Participant before the
first day of the Plan Year in which he attains Age thirty-five (35) shall only
be effective until the first day of the Plan Year in which he attains Age
thirty-five (35), at which time such election shall be automatically revoked.

 

 

(f)

The Plan Administrator shall provide to each Participant within the period
beginning on the first day of the Plan Year in which the Participant attains Age
thirty-two (32), but not earlier than the first day of the one-year period
ending on the date he becomes a Participant, and ending on the last day of the
Plan Year preceding the Plan Year in which the Participant attains Age
thirty-five (35), but not earlier than the last day of the one-year period
beginning on the date he becomes a Participant, a written explanation of the
Qualified Pre-retirement Survivor Annuity containing the following:

 

 

(1)

The terms and conditions of the Qualified Pre-retirement Survivor Annuity;

 

 

(2)

The Participant’s right to make, and the effect of, an election to waive the
Qualified Pre-retirement Survivor Annuity;

 

 

(3)

The rights of the Participant’s spouse under subsection (b)(1); and

 

 

(4)

The right of the Participant to make, and the effect of, a revocation of an
election pursuant to subsection (a).

 

The Plan Administrator shall also provide an explanation to each Participant who
incurs a separation from service prior to receiving the explanation no later
than the earlier of the end of the one-year period beginning on the date of
his/her separation from service or the end of the period described above.

 

 

(g)

Notwithstanding anything herein to the contrary, a surviving spouse entitled to
a benefit under this Section, may elect to receive payment of the Qualified
Pre-retirement Survivor Annuity in a lump sum or any other form of payment
permitted under Section 10.04. Upon request, the Plan Administrator shall
furnish the spouse with an explanation of the Qualified Pre-retirement Survivor
Annuity and with information concerning the financial effect of receiving
benefits in any form selected. An election under this subsection must be filed
with the Plan Administrator before benefit payments commence, unless the Plan
Administrator determines otherwise.

 

 

(h)

Notwithstanding anything herein to the contrary, a surviving spouse may delay
the commencement of benefit payments pursuant hereto, provided such delay
satisfies the requirement of Article IX by deeming the surviving spouse to be
the Participant.

 

 

(i)

If the lump sum amount of the Qualified Pre-retirement Survivor Annuity
otherwise payable to the surviving spouse is less than Three Thousand Five
Hundred Dollars ($3,500), such benefit shall be paid as a single lump sum
payment.

 

10.06        Optional Forms of Benefit Guaranteed: To the extent not already
provided under the terms of this Plan, and notwithstanding any other provisions
to the contrary, this Plan guarantees to the Beneficiaries of each Participant
whose Account includes Transferred Benefits the right to receive all Transferred
Benefits in any optional form of benefit (including time, manner and method of
distribution) protected under IRC S 411(d)(6). The extent and nature of the
optional forms of benefits so protected shall be determined by reference to the
Predecessor Plan(s). Effective for Plan Years commencing after December 31,
2002, (or if sooner, ninety (90) days after notice is given to all Plan
Participants that satisfies DOL Reg. §2520.104b-3) no optional forms of benefit,
except those required under Section 9.06 and those set forth in Section 9.03
shall be available under the Plan.

 

43

 

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

ARTICLE XI  BENEFITS UPON OTHER TERMINATION OF EMPLOYMENT

 

11.01       Vested Amounts: Upon attainment of his/her Normal Retirement Age or
the occurrence of death or Disability while employed by an FX Employer, a
Participant shall be one hundred percent (100%) vested in his/her Accrued
Benefit. Prior to the occurrence of any of the events described above a
Participant shall have a Vested Interest in his/her Accrued Benefit equal to the
sum of the following:

 

 

(a)

One hundred percent (100%) of the balances in his/her Participant Elective
Deferral Account and Participant Rollover Account, if any, as adjusted for any
contributions or distributions since the preceding Valuation Date; and

 

 

(b)

his/her vested percentage of the balance in his/her Employer Matching
Contribution Account and Employer Profit-Sharing Contribution Account, as
adjusted for any contributions or distributions since the preceding Valuation
Date, according to the Participant’s Years of Vesting Service, and consistent
with the following schedule:

 

Percent of Vested

 

Years of Vesting Service

Accrued Benefit

 

 

Less than three (3) years

none

 

At least three (3) or more years

100%

 

 

(c)

A Participant’s Predecessor Plan Account (if any) shall be vested pursuant to
the vesting rules set forth in the Predecessor Plan Account.

 

Effective January 1, 2005, a Participant shall be one hundred percent (100%)
vested in the balance in his/her Matching Contribution Account which has been
allocated to his/her Matching Contribution Account on account of Participant
Elective Deferrals made after December 31, 2004, and shall be vested in a
percentage of the balance in his/her Profit-Sharing Contribution Account
attributable to Profit Sharing Contributions made to the Plan after January 1,
2004, according to the Participant’s Years of Vesting Service, and consistent
with the following schedule:

 

Percent of Vested

 

Years of Vesting Service

Accrued Benefit

 

 

Less than one (1) year

none

 

At least one (1) year

33_%

 

At least two (2) years

66_%

 

At least three (3) or more years

100%

 

The percentage of his/her Accrued Benefit attributable to the Participant’s
Employer Contribution Accounts in which he is not vested shall be forfeited by
him as provided in Section 11.06.

 

11.02        Distribution of Vested Interest: Subject to the provisions of
Section 9.06 and Article XXII, a Participant who incurs a Termination of
Employment for any reason other than retirement or death shall receive a single
lump sum payment equal to the Participant’s Vested Interest as of the date
payment is made. The amount of the lump sum payment shall be equal to the
Participant’s Vested Interest on the date payment is made. Payment shall be made
in cash only, to the extent the Participant’s Vested Interest is attributable to
the balance in the Participant’s General Investments Account and in Employer
Securities to the extent the Participant’s Vested Interest is attributable to
the balance in the Participant’s Employer Securities Account.

 

If a Participant elects a deferred payment, then payment of the Participant’s
Vested Accrued Benefit shall be deferred to the subsequent date elected by the
Participant, which may be no later than the latest date permitted under Section
9.05, or (if no election is made) to the earliest date permitted under Section
9.04, as though the Participant had then retired. Distribution shall be in
accordance with the provisions of Section 9.03.

 

44

 

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

If the lump sum amount that would be payable to the terminated Participant is
not more than Five Thousand Dollars ($5,000), without regard to whether the
Vested Accrued Benefit in the Participant’s Account has ever exceeded that
amount at the time of any prior distribution, the benefit shall be paid as a
single lump sum payment in cash as soon as Administratively Feasible following
the end of the calendar month in which his/her Termination of Employment occurs
without regard to any Participant consent requirement or the requirements of
Section 9.06. For this purpose the Vested Accrued Benefit held in the
Participant’s Employer Securities Account shall be valued as of the most recent
preceding Valuation Date.

 

If the Participant elects distribution following Termination of Employment,
payment shall commence after the later of the date on which the Participant
makes the distribution request (by filing a claim for benefits) or terminates
employment, according to the following rules:

 

 

(a)

Payment of the portion of the Participant’s Vested Interest held in his/her
General Investments Account shall commence as soon as Administratively Feasible
following the end of the calendar month in which the claim for benefits is
submitted or the termination occurs.

 

 

(b)

Payment of the portion of the Participant’s Vested Interest held in the
Participant’s Employer Securities Account shall commence as soon as
Administratively Feasible after the next Valuation Date that follows the date
the claim for benefits is submitted or the termination occurs.

 

 

(c)

A Participant may elect to delay distribution of his/her Vested Interest held in
his/her General Investments Account until distribution of the amounts in his/her
Employer Securities Account.

 

If an Inactive Participant dies or incurs a Disability before his/her Normal
Retirement Date, the Plan Administrator, upon notice of the death or Disability,
shall direct the Trustee to make payment of the Participant’s Vested Interest to
him (or to his/her Beneficiary if the Participant is deceased) in accordance
with the provisions of Article X in the case of death, or Section 9.02 in the
case of Disability.

 

Notwithstanding the above, if a terminated Participant is re-employed by the
Employer prior to distribution of his/her Vested Interest, then no distribution
shall be made until his/her employment is again terminated or until the
occurrence of another event permitting distribution under the terms of the Plan.

 

For all distributions commencing on or after March 28, 2005, the five thousand
dollar ($5,000) threshold amount in this Section shall be reduced to one
thousand dollars ($1,000).

11.03       Eligible Rollover Distributions: Notwithstanding any provision of
this Plan to the contrary, a Distributee may elect, at the time and in the
manner prescribed by the Plan Administrator, to have any portion of an Eligible
Rollover Distribution paid directly to an Eligible Retirement Plan specified by
the Distributee in a Direct Rollover. For purposes of this Section 11.03 the
following definitions shall apply:

 

 

(a)

“Eligible Rollover Distribution” shall mean any distribution of all or any
portion of the balance to the credit in the Account of 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 the distributee or the
joint lives (or joint life expectancies) of the Distributee and the
Distributee’s designated beneficiary, or for a specified period of ten years or
more; any distribution to the extent such distribution is required under Code
§401(a)(9), and 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). Effective January 1, 2000, an
Eligible Rollover Distribution shall not include any hardship withdrawal as
defined in Code §401(k)(2)(B)(i)(IV) or permitted under Section 8.01(c) that is
attributable to the Participant’s Elective Deferrals as defined under Reg.
§1.401(k)-1(d)(2)(ii).

 

45

 

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

Effective for distributions made after December 31, 2001, any amount that is
distributed on account of hardship (without regard to whether the hardship
withdrawal is attributable to Elective Deferrals) shall not be an eligible
rollover distribution and the Distributee may not elect to have any portion of
such a distribution paid directly to an eligible retirement plan. A portion of a
distribution shall not fail to be an eligible rollover distribution merely
because the portion consists of Employee Voluntary Contributions that are not
includable in gross income. However, such portion may be transferred only to an
individual retirement account or annuity described in Code §§408(a) or (b), or
to a qualified defined contribution plan described in Code §§401(a) or 403(a)
that agrees to account separately for amounts so transferred, including
separately accounting for the portion of the distribution that is includable in
gross income and the portion of the distribution that is not so includable.

 

 

(b)

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

 

Effective for distributions made after December 31, 2001, an eligible retirement
plan shall also mean an annuity contract described in Code §403(b) and an
eligible plan under Code §457(b) that is maintained by a state, political
subdivision of a state, or any agency or instrumentality of a state or political
subdivision of a state and which agrees to separately account for amounts
transferred into such plan from this Plan. The definition of eligible retirement
plan shall also apply in the case of a distribution to a surviving spouse, or to
a spouse or former spouse who is the alternate payee under a qualified domestic
relation order, as defined in Code §414(p).

 

 

(c)

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

 

 

(d)

“Direct Rollover” shall mean a payment by the Plan to the Eligible Retirement
Plan specified by the Distributee.

 

11.04        Breaks in Service and Vesting: If a Participant has a One Year
Break in Service, the Participant’s Years of Vesting Service before the One Year
Break in Service shall not be included in computing Years of Vesting Service
until the Participant shall have completed one Year of Vesting Service after the
One Year Break in Service. If an Employee terminated employment prior to
becoming a Participant and incurred a One Year Break in Service, or if a
Participant did not have any Vested Interest derived from Employer contributions
prior to a One Year Break in Service, Years of Vesting Service before a One Year
Break in Service shall not be included in Years of Vesting Service calculated
after the Participant’s One Year Break in Service if the number of consecutive
One Year Breaks in Service equals or exceeds the greater of five (5) or the
aggregate number of such Years of Vesting Service before the One Year Break in
Service.

 

Solely for the purpose of determining the vested percentage of a Participant’s
Accrued Benefit derived from Employer contributions that accrued prior to a five
(5) consecutive one (1) year Break in Service period, the Plan shall disregard
any Year of Service subsequent to such five (5) consecutive one (1) year Breaks
in Service period.

 

If a Participant has a One Year Break in Service, and the break does not arise
on account of Termination of Employment, the Participant shall not be credited
with a Year of Vesting Service for that Plan Year. However, no amounts in the
Participant’s Accounts shall be forfeited.

 

11.05        No Increase in Pre-break Vesting: For purposes of Section 11.01,
Years of Vesting Service after a Termination of Employment that resulted in
five (5) consecutive One Year Breaks in Service shall not increase the vested
percentage of a Participant’s Account that was earned before such five (5)
consecutive One Year Breaks in Service.

 

46

 

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

11.06        Disposition of Forfeitures: Amounts forfeited by terminated
Participants from their Employer Matching Contribution Accounts shall be used to
reduce the Employer’s contribution otherwise required pursuant to Section 5.06
and shall be allocated in the same manner as Employer Matching Contributions in
accordance with Section 6.02(c). Amounts forfeited by terminated Participants
from their Employer Profit Sharing Contribution Accounts shall be allocated as
though additional contributions the same manner as the Employer’s Profit Sharing
Contribution made pursuant to Section 5.07 to Participants’ Accounts as provided
in Section 6.02(d). To the extent possible, the Plan Administrator must forfeit
from a Participant’s General Investments Account before making a forfeiture from
his/her Employer Securities Account.

 

Forfeiture of any non-vested interest with respect to any Participant shall
occur:

 

 

(a)

In the case of a Participant who receives a lump sum distribution of his/her
Vested Interest on account of Termination of Employment, on the day the
Participant receives the distribution.

 

 

(b)

In the case of a Participant who has a Vested Interest derived from Employer
Contributions and does not receive a distribution of such Vested Interest, on
the last day of the Plan Year in which the Participant incurs five (5)
consecutive One Year Breaks in Service.

 

 

(c)

In the case of a Participant who has no Vested Interest derived from Employer
Contributions, on the last day of the Plan Year in which the Participant
terminates employment.

 

Non-vested interests of terminated Participants shall be held by the Trustee in
the respective Accounts of the Participant until the date determined above and
shall then be forfeited by the Participant and allocated in accordance with this
Section.

 

11.07        Distribution to Participants Who Are Less Than 100% Vested: In the
event a Participant who is less than one hundred percent (100%) vested in his
entire Account hereunder incurs a Termination of Employment and returns to the
employ of the Employer after a forfeiture of his/her non-vested interest but
prior to incurring five (5) consecutive One Year Breaks in Service, and prior to
his/her re-employment was paid his/her Vested Interest, the non-vested portion
of his/her Accrued Benefit that was forfeited by the Participant shall be
disregarded in computing his/her Accrued Benefit after re-entry into the Plan,
unless the Participant repays, pursuant to Section 11.08, the amounts
distributed from his/her Account from which an amount was forfeited. If a
Participant does repay the distribution, the balance in such Account shall be
restored as provided in Section 11.09.

 

In the event a Participant who had no Vested Interest in any Employer
Contribution Account separated from service and returns to the employ of the
Employer after a forfeiture of his/her non-vested interest but prior to
incurring five (5) consecutive One Year Breaks in Service, any non-vested
amounts forfeited by the Participant shall be restored, as provided in
Section 11.09, to the Account from which an amount was forfeited.

 

11.08       Repayment of Distribution: A Participant described in Section 11.07
who received a lump sum distribution of less than one hundred percent (100%) of
his/her Accrued Benefit shall be entitled to repay the amounts distributed from
all Employer Contribution Accounts. The repayment must be for the full amount
distributed from all Employer Contribution Accounts and must be made not later
than the earlier of:

 

 

(a)

The date on which the Participant incurs five (5) consecutive One Year Breaks in
Service after the date of distribution.

 

 

(b)

The end of the five (5) year period beginning with the date the Participant is
re-employed by the Employer.

 

Any repayment shall not be included in applying the limitations of Article V or
Article VIII hereunder.

 

11.09       Restoration of Accounts: Any amount repaid pursuant to Section 11.08
shall be credited to the Participant’s Accounts for which it is repaid, with
credit to be made as of the date of repayment. The Account shall also be
credited with the amount previously forfeited from the Account, with credit to
be made as of the last day of the Plan Year in which repayment is made.

 

47

 

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

In the case of a Participant to whom the second paragraph of Section 11.07
applies, the Participant’s Accounts from which amounts were previously forfeited
shall be credited with the amount so forfeited, with credit to be made as of the
last day of the Plan Year in which the Participant resumes participation in the
Plan.

 

Any previously forfeited amounts that are credited to Participants’ Accounts
pursuant to this Section shall be derived from the following sources in the
following order of priority:

 

 

(a)

First, the amount, if any, to be credited to such types of Accounts for the Plan
Year pursuant to Section 11.05;

 

 

(b)

Second, Employer contributions for the Plan Year, if any, that are not required
to be credited to such types of Accounts for other Participants; and

 

 

(c)

Third, an additional Employer contribution for the Plan Year, regardless of
whether the Employer has any Net Profits for the year.

 

If for any Plan Year, the Accounts of more than one Participant are required to
be restored, then restorations shall be derived from the above sources in the
same proportion that the amount to be restored to each Participant bears to the
total amount to be restored to all such Participants for the Plan Year. Any such
amounts credited to a Participant’s Accounts shall not be included in applying
the limitations of Article V or Article VIII hereunder.

 

11.10       Amendments to the Vesting Schedule: No amendment to the vesting
schedule or provisions of Section 11.01, or to this Plan that directly or
indirectly affects the computation of a Participant’s Accrued Benefit, shall
deprive a Participant of a vested right to the benefits accrued to the effective
date of the amendment. Furthermore, if the vesting schedule or provisions of
Section 11.01 are amended, each Participant with at least three (3) Years of
Vesting Service (determined as of the later of the date the amendment is adopted
or the date the amendment is effective) may elect to have his/her vesting
percentage computed under the Plan without regard to the amendment. The period
during which the election may be made shall commence with the date the amendment
is adopted and shall end on the latest of:

 

 

(a)

Sixty (60) days after the amendment is adopted;

 

 

(b)

Sixty (60) days after the amendment becomes effective; or

 

 

(c)

Sixty (60) days after the Participant is issued written notice of the amendment
by the Employer or Plan Administrator.

 

In the absence of any written notice under (c) above, any Participant who has at
least three (3) Years of Vesting Service (as determined above) shall at all
times receive a Vested Interest under whichever vesting schedule provides the
greatest Vested Interest.

 

ARTICLE XII  FIDUCIARY DUTIES

 

12.01        General Fiduciary Duty: A Fiduciary, whether or not a Named
Fiduciary, shall discharge his/her duties solely in the interest of the
Participants and their Beneficiaries hereunder. All assets of this Plan shall be
devoted to the exclusive purpose of providing benefits to Participants and their
Beneficiaries and defraying the reasonable expenses of administering the Plan.
Each Fiduciary, whether or not a Named Fiduciary, shall discharge his/her duties
with the care, skill, prudence and diligence under the circumstances then
prevailing that a prudent man acting in a like capacity and familiar with such
matters would use in the conduct of an enterprise of a like character and with
like aims. Each Fiduciary shall also discharge his/her duties in a manner
consistent with the documents and instruments governing the Plan to the extent
such documents and instruments are consistent with law. No Fiduciary, whether or
not a Named Fiduciary, shall engage in any of the prohibited transactions with
disqualified persons or parties-in-interest as those terms and transactions are
defined by the Code and ERISA, as passed and as it may be amended, and
regulations thereunder.

 

12.02       Allocation of Responsibilities: Each Named Fiduciary shall have only
those duties and responsibilities expressly allocated under the terms of this
Plan. No other duties or responsibilities shall be implied.

 

48

 

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

12.03        Delegation of Responsibilities: Each Named Fiduciary may delegate
the fiduciary responsibilities other than Trustee responsibilities allocated to
such Fiduciary under this Plan to any person other than a Named Fiduciary. If
any duties or responsibilities are delegated under this section, the person to
whom the duties or responsibilities are delegated shall acknowledge the fact in
writing and shall specify in writing the duties and responsibilities so
delegated. All other duties and responsibilities shall be deemed not to have
been delegated.

 

12.04       Liability for Allocation or Delegation of Responsibilities: A Named
Fiduciary shall not be liable for the acts or omissions of a person to whom
responsibilities or duties are allocated or delegated in accordance with
Section 12.02 or Section 12.03 except to the extent such Named Fiduciary
breaches his/her obligation under Section 12.01:

 

 

(a)

With respect to the allocation or delegation;

 

 

(b)

With respect to establishing or implementing a procedure for allocation or
delegation; or

 

 

(c)

By continuing the allocation or delegation.

 

Nothing in this section shall relieve a Fiduciary from liability incurred under
Section 12.05.

 

12.05       Liability for Co-Fiduciaries: In addition to the liability a
Fiduciary may incur for the breach of his/her duty under Section 12.01 or 12.04,
a Fiduciary shall be liable for a breach of Fiduciary duty committed by another
Fiduciary in the following circumstances:

 

 

(a)

If he participates knowingly in, or knowingly undertakes to conceal, an act or
omission of such other Fiduciary knowing such act or omission is a breach;

 

 

(b)

If, by his/her failure to comply with Section 12.01 he has enabled such other
Fiduciary to commit a breach;

 

 

(c)

If he has knowledge of a breach by such other Fiduciary, unless he makes
reasonable efforts under the circumstances to remedy the breach.

 

12.06        Same Person May Serve in More than One Capacity: Nothing herein
shall prevent any person from serving in more than one Fiduciary capacity.

 

12.07       Indemnification: The Employer shall hold harmless and indemnify to
the fullest extent permitted by ERISA each non-Trustee Fiduciary of the Plan
with respect to the consequences of all actions or failures to act of the
Fiduciary while carrying out his/her responsibilities under the Plan. The
Employer shall further hold harmless and indemnify each Fiduciary who is
subjected to any claim or action or who is made a party in any threatened,
pending or completed proceeding, including, without limitation, any proceeding
brought by or in the name of the Plan or by any participant thereof or by any
governmental agency. The Employer’s indemnification shall include any and all
expenses (including attorney’s and/or consultant’s fees), costs, damages,
judgments, fines, interest, penalties (including any that may be imposed under
ERISA §502(l)) and/or amounts paid in settlement and that are actually and
reasonably incurred by a Fiduciary in connection with the investigation,
defense, settlement, preparation for trial, trial, or appeal of any proceeding,
claim or action. Notwithstanding the foregoing, the Employer shall not be
obligated to hold harmless or indemnify a Fiduciary of the Plan if
indemnification is inconsistent with applicable law or if the act(s) or
omission(s) of the Fiduciary to be indemnified are determined to have involved
intentional misconduct, gross negligence or a knowing violation of ERISA or
other applicable law by the Fiduciary.

 

To the extent a Fiduciary is a named insured under any policy of liability
insurance maintained by the Plan or the Employer, the policy and the payment
obligations of the insurance company under the policy shall be deemed primary
and in lieu of the Employer’s obligations under this Section 12.07, but only to
the extent of the coverage provided in the policy. No insurer under any policy
shall claim any right to reimbursement or refund from the Employer and no
obligation of the Employer hereunder shall be deemed to inure to the benefit of
any third party.

 

49

 

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

ARTICLE XIII  THE PLAN ADMINISTRATOR

 

13.01       Appointment of Plan Administrator: The Board of Directors of the
Plan Sponsor shall appoint the Plan Administrator, which may be the Plan
Sponsor. If the Plan Sponsor is appointed as Plan Administrator, the Plan
Sponsor may appoint one or more Committees to carry out the duties of the Plan
Administrator under this Plan. In that event all references in the Plan to the
Plan Administrator shall be deemed to refer to the appointed Committee. The
duties of the Committees shall be divided as the Plan Administrator deems
appropriate and may be designated by separate instrument. The Committees shall
act by majority vote except that they shall act by unanimous vote at any time
when there are only two members comprising the Committee.

 

13.02       Acceptance by Plan Administrator: The Plan Administrator shall
accept its appointment by joining with the Employer in the execution of this
Agreement.

 

13.03        Signature of Plan Administrator: All persons dealing with the Plan
Administrator may rely on any document executed by the Plan Administrator; or,
in the event of appointment of a Committee or Committees, such persons may rely
on any document executed by at least one member of the appropriate Committee as
being the act of the Plan Administrator.

 

13.04       Appointment of an Investment Manager: The Plan Administrator may
appoint an Investment Manager or Managers to manage, acquire and dispose of any
assets of the Plan. In the event responsibility for appointment of Investment
Managers is delegated by the Plan Administrator to a named Committee, that
delegation shall carry with it the authority of the Committee to act as a Named
Fiduciary for purposes of ERISA in appointing an Investment Manager. The
Investment Manager shall accept his/her appointment by written agreement
executed by the Plan Administrator and Investment Manager. This written
agreement shall specify the Plan assets for which the Investment Manager is
responsible and such written instrument shall be kept with the other documents
governing the operation of the Plan. The Trustee shall be entitled to rely on
written instructions from the Investment Manager and shall be under no
obligation to invest or otherwise manage any asset of the Plan subject to the
management of the Investment Manager.

 

13.05        Duties of the Plan Administrator: The Plan Administrator shall be
responsible for the general administration of the Plan including, but not
limited to, the following:

 

 

(a)

To prepare an annual report, summary plan description and modifications thereto,
and summary annual report;

 

 

(b)

To complete and file the various reports and tax forms with the appropriate
government agencies as required by law;

 

 

(c)

To distribute to Plan Participants and/or their Beneficiaries the summary plan
description and reports sufficient to inform such Participants or Beneficiaries
of their Accrued Benefit and their Vested Accrued Benefit as required by law;

 

 

(d)

To determine annually, or more frequently if necessary, which Employees are
eligible to participate in the Plan;

 

 

(e)

To determine the benefits to which Participants and their Beneficiaries are
entitled and to approve or deny claims for benefits;

 

 

(f)

To provide Plan Participants with a written explanation of the effect of
electing an optional form of benefit payment;

 

50

 

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

 

(g)

To retain copies of all documents or instruments under which the Plan operates
in its own office, the principal place of business of the Plan Sponsor and such
other place as the Secretary of Labor or his/her delegate may by regulation
prescribe; to make all such documents and instruments governing the operation of
the Plan available for inspection by Plan Participants and/or their
Beneficiaries; and to furnish copies of such documents or instruments to Plan
Participants and/or their Beneficiaries on request, charging only the cost
thereof as prescribed by regulation of the Secretary of Labor or his/her
delegate;

 

 

(h)

To interpret Plan provisions as needed and in this regard to have complete and
total discretion in the interpretation of the Plan; and

 

 

(i)

To act as the Plan’s agent for the service of legal process, unless another
agent is designated by the Plan Sponsor and to act on behalf of the Plan in all
matters in which the Plan is or may be a party.

 

13.06        Claims Procedure: Claims for benefits under the Plan shall be
presented to the Plan Administrator or its designated representative pursuant to
procedures established and approved by the Plan Administrator, which may include
electronic means. Notice of the disposition of a claim shall be furnished to the
claimant no later than ninety (90) days after the application is submitted. In
the event the claim is denied, the reasons for the denial shall be specifically
set forth in a notice in language calculated to be understood by the claimant.
Pertinent provisions of the Plan shall be cited, and, where appropriate, an
explanation as to how the claimant may perfect the claim shall be provided. In
addition, the claimant shall be furnished with an explanation of the Plan’s
claim review procedure.

 

13.07        Claims Review Procedure: Any Employee, former Employee, or
Beneficiary of either, whose benefit claim submitted pursuant to Section 13.06
has been denied (whether in full or in part) shall be entitled to request
further consideration to his/her claim by filing an appeal with the Plan
Administrator, which may be in the form of a request for reconsideration. The
request, together with a written statement of the reasons why the claimant
believes his/her appeal should be allowed, shall be filed with the Plan
Administrator no later than sixty (60) days after receipt of the written
notification provided for in Section 13.06. The Plan Administrator shall conduct
the review of the appeal. The Plan Administrator, in its sole discretion, may
order a hearing at which the claimant may be represented by an attorney or any
other representative of his/her choosing and at which the claimant shall have an
opportunity to submit written and oral evidence and arguments in support of
his/her claim. During the appeal review period or at the hearing (upon five (5)
business days prior written notice to the Plan Administrator) the claimant or
his/her representative shall have an opportunity to review all documents in the
possession of the Plan that are pertinent to the claim at issue and its
disallowance. A final decision on the claim shall be made by the Plan
Administrator within sixty (60) days of receipt of the appeal unless (i) because
of special circumstances there has been an extension of sixty (60) days that has
been communicated in writing to the claimant, or (ii) a hearing is held, in
which event the final decision shall be made within one hundred twenty (120)
days of receipt of the appeal. The communication containing the Plan
Administrator’s decision shall be in writing and shall be written in a manner
calculated to be understood by the claimant. The communication shall include
specific reasons for the Plan Administrator’s decision and specific references
to the pertinent Plan provisions on which the decision is based. The
communication shall also inform the claimant of the limitation on any further
action by the claimant set forth in Section 13.08.

 

13.08       Limitations of Actions on Claims: The delivery to the claimant of
the final decision of the Plan Administrator with respect to a claim for
benefits under Section 13.06 that has been reviewed and considered under the
appeal procedures of Section 13.07 shall commence the period during which the
claimant may bring legal action under ERISA for judicial review of the Plan
Administrator’s decision. No civil action with respect to the claim for benefits
or the subject matter thereof may be commenced by the claimant, whether such
action is pursued through litigation, arbitration or otherwise, prior to the
completion of the claims and claims review process set forth in Sections 13.06
and 13.07, nor following the expiration of two (2) years from the date of
delivery of the final decision of the Plan Administrator to the claimant under
Section 13.07.

 

13.09        Compensation and Expenses of Plan Administrator: The Plan
Administrator may engage the services of any person, including counsel, whose
services, in the opinion of the Plan Administrator, are necessary to assist it
in carrying out its responsibilities under the Plan. The Employer may direct the
Trustee to pay any expenses properly and actually incurred for such services
from the Trust Fund, including such reasonable compensation for services
provided by the Plan Administrator as shall have been agreed upon between them,
or, alternatively, the Employer may pay such expenses or compensation directly;
provided, however, that no individual acting as Plan Administrator shall receive
any compensation if he already receives full-time pay from the Employer.

 

51

 

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

                13.10      Removal or Resignation: A Plan Administrator may be
removed by the Board of Directors of the Plan Sponsor upon thirty (30) days
written notice, and may resign upon thirty (30) days written notice to the Board
of Directors. Upon such removal or resignation, or the inability of the Plan
Administrator for any other reason to act as Plan Administrator, the Board of
Directors shall appoint a successor Plan Administrator. The successor Plan
Administrator, upon written acceptance, shall have all the duties and
responsibilities of a Plan Administrator herein. The former Plan Administrator
shall deliver to the successor Plan Administrator all records and documents that
it holds relating to the Plan upon removal or resignation.

 

13.11       Records of Plan Administrator: The Plan Sponsor shall have access,
upon request, to all the records of the Plan Administrator that relate to the
Plan.

 

13.12        Other Responsibilities: Nothing in this Article shall be construed
to limit the responsibilities and duties allocated to the Plan Administrator in
other Articles of this Plan.

 

ARTICLE XIV  THE TRUSTEE

 

14.01       Appointment of Trustee: The Board of Directors of the Plan Sponsor
shall appoint the Trustee. Nothing in this Plan shall prevent the Plan Sponsor
from appointing multiple Trustees or creating multiple Trust Funds, each with
separate Trustees. If more than one person is appointed as Trustee of a single
Trust Fund, they shall act by majority vote; provided, however, that they shall
act by unanimous vote at any time when there are only two Trustees. In the event
there is more than one Trustee, the reference to Trustee shall be deemed to
refer to all the Trustees.

 

14.02       Acceptance by Trustee: The Trustee shall accept its appointment by
executing a separate trust agreement in a form acceptable to the Trustee and
Employer. The provisions of the separate Trust Agreement shall control over
those in this Plan, to the extent such provisions define the duties of the
Trustee with respect to the Plan and Trust Fund. Prior to the effective date of
the Trust Agreement the provisions of the Prior Plan concerning the Trustee and
its duties shall apply.

 

14.03        Provisions of Trust Agreement: The separate Trust Agreement shall
authorize and empower the Trustee to invest up to one hundred percent (100%) of
the Trust Fund allocated to the Employer Matching Contribution and Profit
Sharing Contribution Accounts in Employer Securities.

14.04        Participant Voting Rights: The separate Trust Agreement shall
provide for voting Employer Securities by the Trustee only. The Trust Agreement
may permit voting direction from a committee established by the Plan Sponsor for
that purpose.

 

14.05       Investment Committee: In the event of appointment of an Investment
Committee by the Plan Administrator, then except to the extent responsibility
for certain Plan assets has been allocated to an Investment Manager as provided
in Section 13.04, the Investment Committee is authorized and empowered to direct
investment of the Trust Fund, consistent with the terms of the separate Trust
Agreement. The Investment Committee shall direct investment and reinvestment of
the Trust Fund to keep the Trust Fund invested without distinction between
principal and income and in such securities or property, real or personal,
wherever situated, as the Committee shall deem advisable consistent with the
investment policy of the Plan established under Article XVIII. The Committee
shall give due regard to any limitations imposed by the Code or ERISA so that at
all times this Plan may qualify as a qualified Plan and Trust.

 

14.06       Liability for Plan Expenses: The Plan specifically permits payment
from the Plan’s Trust Fund of Plan administration and operation expenses, as
well as costs and expenses associated with specific assets in the Trust Fund,
consistent with the principles and rules set forth in this Section.

 

 

(a)

The Plan permits the allocation of certain administration expenses to an
individual Participant’s Account whenever an expense can be specifically
determined and the Participant’s Account identified which gives rise to the
expense.

 

 

(b)

Expenses not attributable to particular Participant Accounts but nevertheless
payable from the Trust Fund may be allocated among all Participant Accounts pro
rata, or by any other appropriate method.

 

52

 

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

 

(c)

The Plan Sponsor shall determine in its sole discretion the extent to which Plan
administration and operation expenses shall be paid from the Trust Fund or from
individual Participant Accounts, provided that all such payments and charges
shall comply with ERISA and all regulations and other guidance issued by the
Department of Labor.

 

 

(d)

The Plan Sponsor shall be entitled to reimbursement from the Plan for payment of
all Plan expenses advanced by the Plan Sponsor (whether charged to an individual
Participant’s Account or the Trust Fund as a whole) that are reasonably subject
to reimbursement pursuant to ERISA and DOL regulations and other guidance,
provided that no reimbursement to the Plan Sponsor shall be made with respect to
any charge applicable to an individual Participant’s Account unless the
Participant has been previously informed through a summary plan description or
similar document that his or her Account may be subject to such charges.

 

 

(e)

(1)            Costs and expenses associated with or attributable to a specific
asset held in any pooled or joint fund in the Plan normally shall be charged to
the Accounts of the Participants who are or who have been allocated an undivided
share in the pooled or joint fund and whose Accounts reflect an undivided
interest (either current or past) in the asset. The assessment of costs and
expenses shall be made only against that portion of a Participant’s Account
which has participated in the pooled or joint fund and has been allocated an
undivided share of the asset.

 

 

(2)

Notwithstanding the provisions of (e)(1), in the event the Plan Administrator
determines that the cost or expense attributable to an asset or former asset in
the pooled fund represents a material portion of the Participants’ Accounts
currently in the Plan attributable to that asset (regardless of amount), the
Plan Administrator shall have the authority (in its discretion) (i) to allocate
the cost or expense among the Accounts of those Participants, (ii) to allocate
the cost or expense to other assets remaining in the same Participants’
Accounts, (iii) to allocate the cost or expense among the Accounts of all
Participants (including former Participants who no longer have an account in the
Plan) which include or included any portion attributable to the asset, or (iv)
to allocate the cost or expense among the Accounts of all Participants in the
Plan , regardless of their participation in the pooled or joint fund. The
foregoing options are not intended to be mutually exclusive and the Plan
Administrator may apply one or more of them in any manner deemed appropriate by
the Plan Administrator. Nevertheless, the Plan Administrator’s decisions and
actions shall comply with all guidance and rules issued by the Department of
Labor with respect to allocation of costs, including the appointment of an
independent fiduciary to assist in the allocation determination, if so required.

 

14.07        Payment From the Trust Fund: At the direction of the Plan
Administrator, the Trustee shall, from time to time, in accordance with the
terms of the Plan, make payments out of the Trust Fund. The Trustee shall not be
responsible in any way for the application of such payments.

 

ARTICLE XV  THE EMPLOYER

 

15.01        Notification: The Plan Sponsor shall notify the Plan Administrator
and the Trustee in writing if a new Plan Administrator or Trustee has been
appointed hereunder.

 

15.02       Record Keeping: Each participating FX Employer shall maintain
records with respect to each Employee sufficient to enable the Plan
Administrator and Trustee to fulfill their duties and responsibilities under the
Plan.

 

53

 

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

15.03        Bonding: The Plan Administrator shall procure bonding to insure the
Plan against risk of loss. The persons to be bonded and the amount necessary
shall be determined in accordance with ERISA and regulations thereunder. No
bonding shall be required pursuant to state law.

 

15.04        Signature of Employer: All persons dealing with the Plan may rely
on any document executed in the name of the Plan Sponsor by its general partner
or by any other individual duly authorized by its Board of Directors, whether
retroactive or prospective.

 

15.05        Plan Counsel and Expenses: The Plan Sponsor may engage the service
of any person or organization, including counsel, whose services, in the opinion
of the Plan Sponsor are necessary for the establishment or maintenance of this
Plan. The expenses incurred or charged by a person or organization engaged by
the Plan Sponsor pursuant to the previous sentence shall be paid by the Plan
Sponsor, or alternatively, the Plan Sponsor may direct the Trustee to pay such
expenses from the Trust Fund.

 

15.06        Other Responsibilities: Nothing in this Article shall be construed
to limit the responsibilities or duties allocated to the Plan Sponsor and FX
Employers in other Articles of the Plan.

 

 

15.07

Affiliated Groups:

 

 

(a)

For purposes of crediting Hours of Service, all employees of all members of an
Affiliated Group of which an FX Employer is also a member and all employees of
any other entity required to be aggregated with the FX Employer pursuant to
regulations under Code §414(o) shall be treated as employed by a single Employer
for purposes of Article III (Service), Article IV (Eligibility), Article V
(Contributions) and Article XI, (Vesting). Except as provided in Section 7.01,
all employees of all members of an Affiliated Group and all employees of any
other entity required to be aggregated with the Employer pursuant to regulations
under Code §414(o) shall be treated as employed by a single Employer.

 

 

(b)

If the Employer is a member of an Affiliated Group and if the Affiliated Group
maintains more than one qualified retirement plan that is integrated with Social
Security, only a single integration level shall be applicable to each
Participant who is a Participant in one or more integrated plans. The
integration level for each Participant shall be prorated in each integrated plan
in the ratio that the Annual Compensation received by the Participant from the
member of the Affiliated Group maintaining the integrated plan bears to the
Annual Compensation received by the Participant from all members of the
Affiliated Group maintaining all such integrated plans.

 

 

(c)

If more than one Employer has adopted this Plan and if all such Employers are
members of the same Affiliated Group the “effective date” for any adopting
Employer who adopts this Plan on other than the Effective Date shall be the date
indicated in the adoption agreement by which the adopting Employer shall first
elect to be covered by this Plan.

 

15.08       Employer Contributions: Each participating FX Employer shall
contribute to the Plan that Employer’s share of Elective Deferral and Employer
Matching Contributions according to the elections of the Participants employed
by that Employer, as well as that Employer’s share of Employer Profit Sharing
Contributions.

 

ARTICLE XVI  PLAN AMENDMENT OR MERGER

 

16.01        Power to Amend: The Plan Sponsor and the Plan Administrator shall
each have the power to amend, alter, or wholly revise the Plan, prospectively or
retrospectively, at any time, and the interest of every Participant is subject
to the power so reserved. The Plan Administrator shall not exercise its power to
amend without consent of the Plan Sponsor unless the Plan Sponsor has ceased to
operate as a viable business entity or has filed or is subject to a petition
under Chapter 7 of the U.S. Bankruptcy Code.

 

16.02       Limitations on Amendments: Upon execution of any amendment, the
Employer, Plan Administrator, Trustees, Participants and their Beneficiaries
shall be bound thereby; provided, however, that no amendment:

 

 

(a)

Shall enlarge the duties or responsibilities of the Plan Administrator or
Trustee without its consent; or

 

54

 

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

 

(b)

Shall cause any part of the assets contributed to the Plan to be diverted to any
use or purpose other than for the exclusive benefit of the Participants and
their Beneficiaries (including the reasonable cost of administering the Plan)
prior to the satisfaction of all liabilities (fixed and contingent) under the
Plan to Participants and their Beneficiaries; or

 

 

(c)

Shall reduce the vesting percentage of any Participant, Inactive Participant, or
Beneficiary; or

 

 

(d)

Shall reduce or restrict the Account Balance of any Participant, Inactive
Participant or Beneficiary; or

 

 

(e)

Shall eliminate an optional form of benefit, with respect to benefits
attributable to service before the amendment.

 

Notwithstanding the above, any amendment may be made that may be or become
necessary in order that the Plan will conform to the requirements of Code
§401(a), or of any generally similar successor provision, or in order that all
of the provisions of the Plan will conform to all valid requirements of
applicable federal and state laws.

 

16.03        Method of Amendment: If the Plan is amended by the Plan Sponsor,
the amendment shall be stated in an instrument in writing signed in the name of
the Plan Sponsor by a duly authorized corporate officer, or by any other
individual duly authorized by the Plan Sponsor, whether retroactive or
prospective. If the Plan is amended by the Plan Administrator, the amendment
shall be stated in an instrument in writing signed in the name of the Plan
Administrator by the individual duly authorized by the Plan Administrator for
that purpose, whether retroactive or prospective.

 

16.04        Notice of Amendment: Written notice of each amendment shall be
given promptly by the Plan Sponsor and the Plan Administrator to each other, to
any other Employers and the Trustee.

 

16.05        Merger or Consolidation: This Plan and Trust may be merged or
consolidated with, or its assets or liabilities may be transferred to, any other
plan only if the benefits that would be received by each Participant of this
Plan, in the event of a termination of the Plan immediately after such merger,
consolidation or transfer, are at least equal to the benefits the Participant
would have received if the Plan had terminated immediately before the merger,
consolidation or transfer. The Trustee possesses the specific authority to enter
into merger agreements or direct transfer of assets agreements with the Trustees
of other retirement plans described in Code §401(a) and to accept the direct
transfer of Plan assets, or to transfer Plan assets, as a party to any such
agreement.

 

The Trustee may accept a direct transfer of Plan assets on behalf of an Employee
prior to the date the Employee satisfies the Plan’s eligibility condition(s). If
the Trustee accepts such a direct transfer of Plan assets, the Plan
Administrator and Trustee shall treat the Employee as a Participant for all
purposes of the Plan except the Employee may not make Elective Deferral
contributions under Article V nor shall the Employee share in Employer
contributions or Participant forfeitures under Article VI until he actually
becomes a Participant in the Plan and satisfies the Plan’s benefit accrual
requirements.

 

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

 

ARTICLE XVII  TERMINATION OR DISCONTINUANCE OF CONTRIBUTIONS

 

17.01       Right to Terminate: The Plan Sponsor may terminate the Plan at any
time by appropriate corporate action specifying the termination date. The Plan
Sponsor shall promptly notify the Plan Administrator, Trustee and any other
Employers of such action. Further, the Plan Sponsor shall notify all
Participants and Inactive Participants of such action, and shall file all
required reports with Federal agencies, in accordance with applicable
regulations.

 

55

 

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

17.02       Effect of Termination: In the event of a Plan termination or a
complete discontinuance of Employer Contributions, the rights of all affected
Participants to their Accrued Benefits as of the date of such termination shall
be fully vested and shall not thereafter be subject to forfeiture, except to the
extent that law or regulation may preclude such vesting in order to prohibit
discrimination in favor of officers, shareholders, or highly compensated
Employees. For purposes of the preceding sentence, a Participant who has
terminated employment with the Employer and incurred five consecutive One Year
Breaks in Service as of the termination date shall not be considered to be
affected by such Plan termination, and shall be vested in his/her Accrued
Benefit only to the extent provided in the other applicable Articles of this
Plan. All rights of Participants in this Plan affecting Employer Securities held
in trust for the benefit of Participants shall continue notwithstanding any Plan
termination.

 

17.03        Manner of Distribution: In the event of a Plan termination, the
Plan Administrator shall direct the Trustee to distribute the Accrued Benefits
of all Participants, Inactive Participants, and Beneficiaries in accordance with
Article IX or Article XI.

 

Notwithstanding the above, no payment shall be made to a Participant from
his/her Participant Elective Deferral Account (or any other Account the
contributions to which have been included in the Deferral Account for the
Participant) unless or until such time as the Participant:

 

 

(a)

Is eligible for Retirement or Disability Benefits as provided in Article IX;

 

 

(b)

Dies;

 

 

(c)

Separates from the service of the Employer (after December 31, 2001, incurs a
severance from employment);

 

 

(d)

Attains the Age of fifty-nine and one-half (59½); or

 

 

(e)

Incurs a Financial Hardship.

 

All Elective Deferral Accounts shall be maintained by the Trustee and
distributed at such time and in such manner as previously provided herein.
Alternatively, the balance in such Accounts may be transferred to another plan
maintained or established by the Employer that qualifies under Code §401(a) as
provided above, but only if such other plan contains the same restrictions on
the distribution of such transferred amounts as described in the preceding
paragraph.

 

17.04        No Reversion: No termination or amendment of this Plan and Trust
and no other action shall divert any part of the funds to any purpose other than
the exclusive benefit of Participants, Inactive Participants or their
Beneficiaries except, and notwithstanding any other provision of this Plan to
the contrary, any amount held in an unallocated suspense account that cannot be
allocated to any Participant due to the limitations of Article VII may be
returned to the Employer upon termination of the Plan.

 

17.05        Termination of an Employer: An Employer, other than the Plan
Sponsor, may terminate its participation in the Plan at any time by a written
resolution by the Board of Directors specifying the termination date. The
Employer shall promptly notify the Plan Sponsor, Plan Administrator and Trustee
of any such action or direction. The participation of an Employer in the Plan
shall also terminate in the event of a complete discontinuance of contributions
by such Employer.

 

17.06        Partial Termination: A partial termination of the Plan may be
deemed to have occurred if a significant percentage of Participants are excluded
from coverage by reason of amendment of the Plan, severance by an Employer or
termination of an Employer, or if the Plan is amended to adversely affect the
rights of employees to vest in benefits under the Plan or to reduce or eliminate
future benefit accruals under the Plan. The determination of whether a partial
termination has occurred shall be made on the basis of the facts and
circumstances in a particular case.

 

17.07       Effect of Partial Termination: In the event of a partial termination
of the Plan, the provisions of Section 17.02 shall apply to those Participants
affected by the partial termination.

 

56

 

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

ARTICLE XVIII  FUNDING POLICY FOR PLAN BENEFITS

 

18.01        Funding Method: The benefits provided by this Plan shall be funded
by contributions of the Employer and Participants. Employer Matching
Contributions and Employer Profit Sharing Contributions may consist entirely of
Employer Securities. Elective Deferrals shall be made in cash only. The amount
of all Employer Contributions shall be determined as provided in this Plan. The
amount of all other contributions shall likewise be determined as provided in
this Plan.

 

18.02       Investment Policy: This Plan has been established for the sole
purpose of providing benefits to the Participants and their Beneficiaries. In
determining investment directions and investment options available hereunder,
the Plan Administrator shall establish a funding policy that considers the short
and long-range needs of the Plan based on the evident and probable requirements
of the Plan as to the time benefits shall be payable and the requirements
therefor. Benefits may be provided through any combination of investment media
designed to provide the requisite liquidity, growth and security appropriate to
this Plan.

 

Benefits for Participants, to the extent not funded through Employer Securities,
may be provided through any investment media offered by the Trustee or through
the purchase of shares in any investment company regulated under the Investment
Company Act of 1940, or through any investment proper and appropriate to be made
by the Trustee in accordance with Article XIV, or through any combination of
such investments.

 

The Plan may not obligate itself to acquire Employer Securities from a
particular holder thereof at any indefinite time determined upon the happening
of an event such as the death of the holder.

 

The Plan may not obligate itself to acquire Employer Securities under a put
option binding upon the Plan. However, at the time a put option is exercised,
the Plan may be given an option to assume the rights and obligations of the
Employer under a put option binding upon the Employer.

 

All purchases of Employer Securities shall be made at a price which, in the
judgment of the Plan Administrator, does not exceed the fair market value
thereof. All sales of Employer Securities shall be made at a price which, in the
judgment of the Plan Administrator, is not less than the fair market value
thereof.

 

18.03        No Purchase of Life Insurance Contracts: Unless authorized by the
Plan Sponsor pursuant to amendment to this Article XVIII, no insurance contracts
shall be purchased by the Trustee on the life of any Participant.

 

18.04       Investment Fund: The Employer shall contribute to an Investment Fund
that shall be established by the Trustee to provide such additional benefits, in
addition to the proceeds or surrender values of any allocated annuity contracts,
for Participants and their Beneficiaries provided by this Plan.

 

18.05        Non-transferability of Annuity Contracts: In the event the assets
of the Trust Fund include allocated annuity contracts, all incidents of
ownership in such contracts may be exercised by the Trustee, as directed by the
Plan Administrator, except to the extent any death benefits payable thereunder
may be paid to the Beneficiary designated by the Participant. All such contracts
shall provide that the owner may not change the ownership of the contract, nor
may it be sold, assigned or pledged as collateral for a loan, as security for
the performance of an obligation, or for any other purpose to anyone. No annuity
contract may be delivered to a Participant as a distribution from the Plan.

 

18.06        Participant Directed Investments: In the sole discretion of the
Plan Administrator a Participant, Inactive Participant or Beneficiary may be
allowed to direct the Trustee to invest all or part of the General Investments
Account hereunder in such specific assets as are permitted under the terms of
the Trust Agreement. However, the Participant may not direct the Trustee to use
any portion of his/her General Investments Account to acquire any property that
would be classified as a “collectible” and result in the investment being
considered a distribution to the Participant under Code §408(m) and Regulations
thereunder. That portion of the General Investments Account so directed shall be
credited (charged) solely with all investment earnings (losses) and appreciation
(depreciation) thereon, and charged with any fees or expenses incurred by the
Trustee in investing or administering that portion of the Account. The portion
so directed shall also be credited with any contributions thereto and charged
with any withdrawals or payments made therefrom.

 

57

 

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

Any portion of the General Investments Account, the investment of which is not
directed by the Participant, shall be commingled and invested with other Trust
assets. That portion shall be credited (charged) with its proportionate share of
investment earnings (losses) and appreciation (depreciation) on the total
non-directed assets of the Trust Fund, and charged with any specific or
proportionate share of expenses incurred by the Trustee in investing or
administering that portion of the Account as provided in Section  6.03. The
non-directed portion shall also be credited with any contributions thereto and
charged with any withdrawals or payments therefrom.

 

For purposes of Section 6.03, any transfers from the non-directed portion of the
General Investments Account to the directed portion of the General Investments
Account shall be treated as a withdrawal from the non-directed portion and a
contribution to the directed portion, and vice versa for transfers from the
directed portion to the non-directed portion.

 

The Plan Administrator and Trustee may establish a reasonable policy regarding
the types of Accounts eligible, minimum balance required, and other reasonable
criteria that must be satisfied in determining whether this option of directed
investments shall be available to a Participant. The policy shall be in writing
and shall be administered in a uniform and non-discriminatory manner.

 

18.07       Establishment of Separate Funds: There is hereby reserved to the
Plan Administrator the right to direct the Trustee to establish separate
investment funds within the General Investments Account. The Plan Administrator
may follow different investment policies with respect to each investment fund so
established. In the sole discretion of the Sponsoring Employer a Participant,
Inactive Participant, Beneficiary or Alternate Payee shall be allowed to direct
the Trustee to invest the amounts in his/her General Investments Account,
consistent with the rules in this Section 18.07, in any or all of the investment
Funds. The following administrative rules shall apply if such Funds are
established:

 

 

(a)

Income, gains and losses from each investment fund will be reinvested in the
same fund and credited only to the General Investments Accounts of those
Participants who have a balance in such fund, in a manner consistent with
Section 6.03.

 

 

(b)

Each Participant shall be entitled to direct the portion of the contributions
made to his/her General Investments Account that are to be invested in each of
the investment funds available. Upon the occurrence of any event or decision of
the Plan Administrator that results in the deletion of any of the investment
funds, that replaces any such fund with another fund, or that adds a new
investment fund, the Plan Administrator shall designate a default investment
fund or funds into which contributions on behalf of a Participant shall be
invested in the event no specific direction for investment is made by the
Participant. The Plan Administrator shall designate a default investment fund
for any Participant or Beneficiary (including any Beneficiary by virtue of a
Qualified Domestic Relations Order) who does not provide for investment
instructions with respect to his/her General Investments Account into any
investment fund under this Section or Section 18.06.

 

 

(c)

Each Participant shall have the right to change the portion of succeeding
contributions to be invested in each investment fund and the right to direct
that the asset balance or any portion thereof in any investment funds in his/her
General Investments Account be liquidated and the proceeds thereof transferred
to any other investment fund. Changes in fund investments pursuant to
Participant direction shall be made effective as provided under procedures
negotiated between the Plan and the Trustee, which procedures may include daily
movement of General Investments Account funds between investment funds, provided
valuation of the investment funds is also conducted daily.

 

 

(d)

The Plan Administrator may establish reasonable rules regarding:

 

 

(1)

The maximum number of investment funds that may be utilized by an individual
Participant or by an individual Account.

 

 

(2)

The minimum, maximum and incremental percentages of contributions that may be
invested in a particular investment fund.

 

58

 

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

 

(3)

The minimum, maximum and incremental percentages of the current balance in the
General Investments Account in any investment fund that may be transferred to
another fund.

 

These rules shall be in writing and shall be administered in a uniform and
non-discriminatory manner.

 

 

(e)

Except as otherwise provided in Section 6.07, a Participant may not direct
investment into or from the Employer Securities Account nor may a Participant
direct investment from his/her General Investments Account into the Employer
Securities Account or the liquidation or sale of any Employer Securities in the
Employer Securities Account.

 

ARTICLE XIX  TOP-HEAVY PROVISIONS

 

19.01       Application: If this Plan is or becomes Top-Heavy for any Plan Year,
the provisions of this Article shall supersede any conflicting provisions
contained in any other Article of this Plan.

 

19.02        Special Definitions: For purposes of this Article and related Plan
provisions, the following terms shall have the following meanings unless a
different meaning is plainly required by the context:

 

 

(a)

“Determination Date” shall mean, for any plan year subsequent to the first plan
year, the last day of the preceding plan year for such plan; for the first plan
year of a plan, the last day of that plan year.

 

 

(b)

“Determination Period” shall mean the plan year containing the Determination
Date and the four (4) preceding plan years for such plan.

 

 

(c)

“Five Percent Owner” shall mean:

 

 

(1)

If the Employer is a corporation, any person who owns (or is considered as
owning within the meaning of Code §318) more than five percent (5%) of the
outstanding stock of the corporation or stock possessing more than five percent
(5%) of the total combined voting power of all stock of the corporation.

 

 

(2)

If the Employer is not a corporation, any person who owns more than five percent
(5%) of the capital or profits interest in the Employer.

 

 

(d)

“Key Employee” shall mean any Employee or former Employee (and any Beneficiary
of such Employee) who at any time during the Determination Period was:

 

 

(1)

An officer of the Employer during a Plan Year in which he received Top-Heavy
Compensation greater than fifty percent (50%) of the amount in effect under Code
§415(b)(1)(A) for such Plan Year. For purposes of this Paragraph, no more than
fifty (50) Employees (or, if lesser, the greater of three (3) or ten percent
(10%) of the number of Employees) shall be treated as officers; or

 

 

(2)

One of the ten (10) Employees owning (or considered as owning within the meaning
of Code §318) both more than one-half percent (½%) interest and the largest
interests in the Employer during a Plan Year in which he received Top-Heavy
Compensation greater than the amount in effect under Code §415(c)(1)(A) for such
Plan Year; or

 

 

(3)

A Five Percent Owner of the Employer; or

 

 

(4)

A One Percent Owner of the Employer during a plan year in which he received
Top-Heavy Compensation greater than one hundred fifty thousand One Hundred Fifty
Thousand Dollars ($150,000).

 

59

 

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

The determination of who is a Key Employee shall be made in accordance with Code
§416(i)(1) and the Regulations thereunder. For purposes of determining who is a
One Percent Owner, Five Percent Owner, or ten largest owner, the rules of Code
§414(b), (c) and (m) shall not apply. Beneficiaries of Employees shall be
treated as a Key Employee or Non-Key Employee based on the Key Employee status
of such Employee; inherited benefits shall retain the Key Employee or Non-Key
Employee status of the Employee.

 

The term “Non-Key Employee” shall mean any Employee or former Employee (and any
Beneficiary of such Employee) who is not a Key Employee. Non-Key Employees
include Employees who are former Key Employees.

 

 

(e)

“One Percent Owner” shall mean:

 

 

(1)

If the Employer is a corporation, any person who owns (or is considered as
owning within the meaning of Code §318) more than one percent (1%) of the
outstanding stock of the corporation or stock possessing more than one percent
(1%) of the total combined voting power of all stock of the corporation; or

 

 

(2)

If the Employer is not a corporation, any person who owns more than one percent
(1%) of the capital or profits interest in the Employer.

 

 

(f)

“Permissive Aggregation Group” shall mean the Required Aggregation Group of
plans plus any other plan or plans of the Employer that, when considered as a
group with the Required Aggregation Group, would continue to satisfy the
requirements of Code §§401(a)(4) and 410.

 

 

(g)

“Present Value” shall mean the actuarial present value of an amount or series of
amounts determined based on the Top-Heavy determination provisions of a defined
benefit plan that is part of a Required Aggregation Group or Permissive
Aggregation Group with this Plan.

 

 

(h)

“Required Aggregation Group” shall mean:

 

 

(1)

Each qualified plan of the Employer including any plan terminated within the
last five years ending on the determination date, in which at least one Key
Employee participates in the plan year containing the determination date, or any
of the four preceding plan years; and

 

 

(2)

Any other qualified plan of the Employer that enables a plan described in
Item (1) to meet the requirements of Code §§401(a)(4) or 410.

 

 

(i)

“Super Top-Heavy”: This Plan is Super Top-Heavy if the Plan would be Top-Heavy
if “ninety percent (90%)” were substituted for “sixty percent (60%)” each place
it appears in subsection (j) below.

 

 

(j)

“Top-Heavy”: This Plan is Top-Heavy if any of the following conditions apply:

 

 

(1)

If the Top-Heavy Ratio for this Plan exceeds sixty percent (60%) and this Plan
is not part of any Required Aggregation Group or Permissive Aggregation Group of
plans.

 

 

(2)

If this Plan is a part of a Required Aggregation Group of plans but not part of
a Permissive Aggregation Group and the Top-Heavy Ratio for the Required
Aggregation Group of plans exceeds sixty percent (60%).

 

 

(3)

If this Plan is a part of a Permissive Aggregation Group of plans and the
Top-Heavy Ratio for the Permissive Aggregation Group exceeds sixty percent
(60%).

 

60

 

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

 

(k)

“Top Heavy Average Monthly Compensation” shall mean one-twelfth (1/12th) of the
average of a Participant’s Top-Heavy Compensation during the five (5)
consecutive Plan Years (or the total number of such years of the Participant’s
employment, if less than five (5)) that produces the highest average, but taking
into account only Top-Heavy Compensation for years that this Plan was Top-Heavy
and any years preceding a year that this Plan was Top-Heavy.

 

 

(l)

“Top-Heavy Compensation” shall have the same meaning as the term “Compensation”
defined in Section 7.01(b), but effective for Plan Years commencing after
December 31, 1997, shall include contributions made by the Employer to a plan of
deferred compensation otherwise excluded in Section 7.01(b). Top Heavy
Compensation includes all Compensation paid for the Limitation Year without
regard to when the Participant commenced participation in the Plan.

 

 

(m)

“Top-Heavy Ratio” shall mean and be determined as follows:

 

 

(1)

If the Employer maintains one or more defined contribution plans (including any
simplified employee pension plan) and the Employer has never maintained any
defined benefit plan that has covered or could cover a Participant in this Plan,
the Top-Heavy Ratio is a fraction, the numerator of which is the sum of the
account balances of all Key Employees as of the Determination Date and the
denominator of which is the sum of all account balances of all Participants as
of the Determination Date. Both the numerator and denominator of the Top-Heavy
Ratio shall be adjusted to reflect any part of any account balance distributed
in the five (5) year period ending on the Determination Date and any
contribution that is due but unpaid as of the Determination Date. In the case of
a defined contribution plan that is not subject to Code §412, the adjustment for
contributions due but unpaid is generally the amount of any contributions
actually made after the Top-Heavy Valuation Date but on or before the
Determination Date; however, for the first plan year of such a plan, the
adjustment shall also reflect the amount of any contributions made after the
Top-Heavy Valuation Date that are allocated as of a date in that first plan
year. In the case of a defined contribution plan that is subject to Code §412,
the account balances shall include contributions that would be allocated as of a
date not later than the Determination Date, even though those amounts are not
yet required to be contributed; furthermore, the adjustment for contributions
due but unpaid shall reflect the amount of any contribution actually made (or
due to be made) after the Top-Heavy Valuation Date but before the expiration
date of the extended payment period in Code §412(c)(10).

 

 

(2)

If the Employer maintains one or more defined contribution plans (including any
simplified employee pension plan) and the Employer maintains or has maintained
one or more defined benefit plans that have covered or could cover a Participant
in this Plan, the Top-Heavy Ratio is a fraction, the numerator of which is the
sum of account balances under the defined contribution plans for all Key
Employees and the Present Value of accrued benefits under the defined benefit
plans for all Key Employees, and the denominator of which is the sum of the
account balances under the defined contribution plans for all Participants and
the Present Value of accrued benefits under the defined benefit plans for all
Participants. Both the numerator and denominator of the Top-Heavy Ratio are
adjusted for any part of any account balance or accrued benefit distributed in
the five (5) year period ending on the Determination Date and any contribution
to a defined contribution plan due but unpaid as of the Determination Date. In
the case of a defined contribution plan that is not subject to Code §412, the
adjustment for contributions due but unpaid is generally the amount of any
contributions actually made after the Top-Heavy Valuation Date but on or before
the Determination Date; however, for the first plan year of such a plan, the
adjustment shall also reflect the amount of any contributions made after the
Top-Heavy Valuation Date that are allocated as of a date in that first plan
year. In the case of a defined contribution plan that is subject to Code §412,
the account balances shall include contributions that would be allocated as of a
date not later than the Determination Date, even though those amounts are not
yet required to be contributed; furthermore, the adjustment for contributions
due but unpaid shall reflect the amount of any contribution actually made (or
due to be made) after the Top-Heavy Valuation Date but before the expiration
date of the extended payment period in Code §412(c)(10).

 

61

 

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

 

(3)

For purposes of (1) and (2) above, the value of account balances and the Present
Value of accrued benefits shall be determined as of the most recent Top-Heavy
Valuation Date that falls within or ends with the twelve month period ending on
the Determination Date. The account balances and accrued benefits of a
Participant who is not a Key Employee but who was a Key Employee in a prior year
shall be disregarded. For Plan Years beginning after December 31, 1984, the
account balances and accrued benefits of any Participant who has not performed
any service for the Employer at any time during the five (5) year period ending
on the Determination Date shall be disregarded. In the case of a defined benefit
plan, the Present Value of Accrued Benefits shall not reflect any proportional
subsidies and shall reflect any non-proportional subsidies provided by the plan.
The calculations of the Top-Heavy Ratio, and the extent to which distributions,
rollovers and transfers are taken into account shall be made in accordance with
Code §416 and the Regulations thereunder. In the case of unrelated rollovers and
transfers: (1) the plan making the distribution or transfer shall count the
distribution as part of an accrued benefit distributed; and (2) the plan
accepting the rollover or transfer shall not consider the rollover or transfer
as part of the accrued benefit if such rollover or transfer was accepted after
December 31, 1983, and shall consider the rollover or transfer as part of the
accrued benefit if such rollover or transfer was accepted prior to January 1,
1984. In the case of related rollovers and transfers, the plan making the
distribution or transfer shall not count the distribution or transfer as part of
an accrued benefit distributed, and the plan accepting the rollover or transfer
shall count the rollover or transfer as part of the accrued benefit. Deductible
employee contributions shall not be taken into account for purposes of computing
the Top-Heavy Ratio. When aggregating plans, the value of account balances and
accrued benefits will be calculated with reference to the Determination Dates
that fall within the same calendar year.

 

For purposes of the above, a Participant’s Accrued Benefit in a defined benefit
plan shall be determined under a uniform accrual method that applies for all
defined benefit plans maintained by the Employer or, if there is no such method,
under the method described in Code §411(b)(1)(C) that provides the slowest rate
of accrual.

 

 

(n)

“Top-Heavy Valuation Date” shall mean the date as of which the Present Value of
accrued benefits under a defined benefit plan or account balances under a
defined contribution plan, that is part of a Permissive Aggregation Group or
Required Aggregation Group, is determined for calculating the Top-Heavy Ratio.
For a defined benefit plan, such date shall be the same as the actuarial
valuation date used for computing plan costs under Code §412, regardless of
whether an actuarial valuation is performed that year. For a defined
contribution plan, such date shall be the last day of the plan year.

 

19.03        Top-Heavy or Super Top-Heavy Minimum Required Allocation: For any
Plan Year in which the Plan is Top-Heavy or Super Top-Heavy:

 

 

(a)

Except as otherwise provided below, the Employer contributions and forfeitures
allocated on behalf of any Participant who is a Non-Key Employee shall not be
less than the lesser of:

 

 

(1)

three percent (3%) of such Participant’s Top-Heavy Compensation if the Plan is
Top-Heavy and five percent (5%) of such Participant’s Top-Heavy Compensation if
the Plan is Super Top-Heavy; or

 

 

(2)

In the case where the Employer has no defined benefit plan that designates this
Plan to satisfy Code §§401 and 416(c), the largest percentage of Employer
contributions and forfeitures, as a percentage of the first Two Hundred Thousand
Dollars ($200,000), (or such larger amount as may be prescribed by the Secretary
of the Treasury or his/her delegate) of the Key Employee’s Top-Heavy
Compensation, allocated on behalf of any Key Employee for that year. In
calculating this percentage all amounts contributed by the Employer to the Key
Employee’s Elective Deferral Account pursuant to a Salary Reduction Agreement
shall be treated as Employer contributions. For Plan Years beginning after
December 31, 1993, the Plan shall substitute the amount “One Hundred Fifty
Thousand Dollars ($150,000)” for the amount “Two Hundred Thousand Dollars
($200,000)” wherever it appears in this Section. The $150,000 amount shall be
adjusted each Plan Year as provided in Code §401(a)(17)(B).

 

62

 

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

 

(b)

The minimum allocation shall be determined without regard to any Social Security
contribution by the Employer. This minimum allocation shall be made even though,
under other Plan provisions, the Participant would not otherwise be entitled to
receive an allocation, or would have received a lesser allocation for the Plan
Year because of:

 

 

(1)

The Participant’s failure to complete one thousand (1000) Hours of Service (or
any equivalent provided in the Plan);

 

 

(2)

The Participant’s failure to make mandatory employee contributions to the Plan;

 

 

(3)

Compensation less than a stated amount;

 

 

(4)

The Employer having no Net Profits; or

 

 

(5)

In the case of a plan qualified under Code §401(k), the Participant’s failure to
make elective contributions to such plan.

 

If a Participant is required to receive a minimum allocation under this
subsection and such amount exceeds the amount that the Participant would receive
under other Plan provisions, the Employer shall make an additional contribution
for such Participant. Such additional contribution shall be allocated to the
Employer Contribution Account of such Participant in the same manner as regular
Employer contributions, pursuant to Article VII.

 

 

(c)

The provisions in subsections (a) and (b) above shall not apply to any
Participant who was not employed by the Employer on the last day of the Plan
Year.

 

 

(d)

The provisions in subsections (a) and (b) above shall not apply to a Participant
if such Participant is covered under a defined contribution plan designated by
the Employer to provide the Top-Heavy minimum benefits, and such Participant
receives an allocation of Employer contributions and forfeitures under that plan
during the subject Plan Year that is at least as great as the amount otherwise
required under (a) and (b) above. If the amount of Employer contributions and
forfeitures allocated to such a Participant under that plan during the subject
Plan Year is less than the amount required under (a) and (b) above, the amount
otherwise required under (a) and (b) above shall be reduced by the amount so
allocated under that plan.

 

19.04        Non-forfeitability of Minimum Top-Heavy Allocation: The minimum
allocation of Employer contributions or forfeitures required under
Sections 19.03 or 19.04 (to the extent required to be non-forfeitable under Code
§416(b)) shall not be forfeited in the case of a suspension of benefits under
Code §411(a)(3)(B) or a withdrawal of mandatory employee contributions under
Code §411(a)(3)(D).

 

19.05        Top Heavy Compensation Limitation: for Plan Years commencing on and
after January 1, 2002, Annual Compensation of each Participant taken into
account under this Article XIX shall not exceed Two Hundred Thousand Dollars
($200,000), as adjusted for cost-of-living increases in accordance with Code
§401(a)(17)(B). The cost-of-living adjustment in effect for a calendar year
applies to Annual Compensation for the Plan Year that begins with or within such
calendar year.

 

19.06        Minimum Vesting Provision: For any Plan Year in which this Plan is
Top-Heavy, the vesting schedule under Section 11.01 shall automatically apply to
each Participant in the Plan. This vesting schedule applies to all accrued
benefits within the meaning of Code §411(a)(7), except those attributable to
employee contributions, including benefits accrued before the effective date of
Code §416 and benefits accrued before the Plan became Top-Heavy. Further, no
reduction in vested benefits may occur in the event the Plan’s status as
Top-Heavy changes for any Plan Year and any change in the Plan’s vesting
schedule due to a change in Top-Heavy status shall be subject to the provision
of Section 11.10. However, this Section does not apply to the Accrued Benefit of
any Employee who does not have an Hour of Service after the Plan has initially
become Top Heavy; such Employee’s Vested Interest attributable to Employer
contributions and forfeitures shall be determined without regard to this
Section.

 

63

 

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

19.07       Adjustments to Limitations: For any Plan Year in which the Plan is
Top-Heavy, the following adjustments shall be made to the denominators of the
Defined Benefit Fraction and Defined Contribution Fraction as defined in
Section 7.01.

 

 

(a)

Super Top-Heavy: In any Plan Year in which the Plan is Super Top-Heavy the
denominators shall be computed by substituting “one hundred percent (100%)” for
“one hundred twenty-five percent (125%)” each place it appears in such
definitions.

 

 

(b)

Not Super Top-Heavy: In any Plan Year in which the Plan is Top-Heavy but not
Super Top-Heavy the denominators shall be computed by substituting “one hundred
percent (100%)” for “one hundred twenty-five percent (125%)” each place it
appears in such definitions.

 

19.08        Participant Elective Deferrals: Elective Deferrals shall not be
taken into account in determining under Section 19.03(b) the amount of Employer
contributions to be allocated to a Participant who is a Non-key Employee.

 

19.09       EGTRRA Modification of Top-Heavy Rules: Notwithstanding any other
provision of this Article XIX, this section shall apply for purposes of
determining whether the Plan is a top-heavy plan under Code §416(g) for Plan
Years beginning after December 31, 2001, and whether the Plan satisfies the
minimum benefits requirements of Code §416(c) for such years.

 

 

(a)

Determination of top-heavy status/key employee. 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 Code
§416(i)(1)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 7.01(b). The determination of who is a key
employee will be made in accordance with Code 416(i)(1) and the applicable
regulations and other guidance of general applicability issued thereunder.

 

 

(b)

Determination of present values and amounts. This subsection shall apply for
purposes of determining the present values of Accrued Benefits and the amounts
of Account balances of Employees as of the determination date.

 

 

(1)

Distributions during year ending on the determination date. The present values
of Accrued Benefits and the amounts of Account balances of an employee as of the
determination date shall be increased by the distributions made with respect to
the Employee under the Plan and any plan aggregated with the Plan under Code
§416(g)(2) 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 Code §416(g)(2)(A)(i). In the case of a distribution made for a reason
other than separation from service, death, or disability, this provision shall
be applied by substituting “5-year period” for “1-year period.”

 

 

(2)

Employees not performing services during year ending on the determination date.
The Accrued Benefits and Accounts of any individual who has not performed
services for the Employer during the 1-year period ending on the determination
date shall not be taken into account.

 

64

 

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

 

(c)

Minimum benefits.

 

 

(1)

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

 

 

(2)

Contributions under other plans. The minimum benefit requirement of this Section
19.10 shall be met through contributions to this Plan regardless of whether the
Employer maintains any other plan (including another plan that may consist
solely of a cash or deferred arrangement that meets the requirements of Code
§401(k)(12) and matching contributions with respect to which the requirements of
Code §401(m)(11) are met).

 

ARTICLE XX  PROVISIONS AFFECTING BENEFITS

 

20.01       Availability of Loans: Upon acceptance of an application by a
Participant who is an active Employee, the Plan Administrator shall direct the
Trustee to make a loan to the Participant from his/her Plan Accounts (including
any Rollover Accounts but excluding his/her Employer Securities Account),
subject to the provisions of this Article. In considering a Participant’s
application for a loan, the Plan Administrator shall base its decision whether
to grant a loan on a uniform and non-discriminatory policy, without regard to
the race, color, religion, sex, age or national origin of the applicant.

 

20.02       Loan Administration: The Plan Sponsor shall prepare and adopt a
written Participant Loan Administration Policy Statement, whose provisions shall
be made part of this Plan. The Policy Statement shall set forth:

 

 

(a)

the identity of the person or persons authorized to administer the loan program;

 

 

(b)

the procedure for applying for a loan;

 

 

(c)

the basis on which loans will be approved or denied;

 

 

(d)

limitations, if any, on the types and amounts of loans offered;

 

 

(e)

the procedure for determining a reasonable rate of interest;

 

 

(f)

the types of collateral that may secure a loan; and

 

 

(g)

the events constituting default and the steps to be taken to preserve plan
assets in the event of a default.

 

20.03       Amount of Loan: The amount of any loan to a Participant when added
to the outstanding balance of any previous loans made to him pursuant to this
Article or under any other qualified plan maintained by the Employer, shall not
exceed the least of:

 

 

(a)

Fifty percent (50%) of the Vested Interest in his/her Plan Accounts (including,
for calculation purposes, any Rollover Accounts and Employer Securities
Account); or

 

 

(b)

$50,000, reduced by the excess (if any) of:

 

 

(1)

the highest outstanding balance of loans from the plan during the 1-year period
ending on the day before the date on which such loan was made, over

 

 

(2)

the outstanding balance of loans from the plan on the date on which such loan
was made, or

 

65

 

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

 

(c)

The total amount of the Vested Interest in his/her Plan Accounts, exclusive of
the Vested Interest in his/her Employer Securities Account.

 

20.04        Collateral Requirements: Any loan to a Participant shall be secured
solely by the balance in his/her Plan Account (including any Rollover Account,
but excluding his/her Employer Securities Account). In the event of default on
the loan, however, foreclosure and attachment of such security shall not occur
until a distributable event occurs under the Plan.

 

20.05       Loan Terms: Any loan made to a Participant by the Trustee shall be
evidenced by a promissory note of the Participant drawn in favor of the Trust.
Such note shall bear a reasonable rate of interest and shall be amortized in
level installments payable at least quarterly within a specified period of time
not to exceed five (5) years, unless such loan is used to acquire a dwelling
unit which, within a reasonable period of time (determined at the time the loan
is made), will be used as the principal residence of the Participant or
Beneficiary, in which case the specified period of time shall not exceed ten
(10) years.

 

20.06       Accounting for Loans: Any loan to a Participant pursuant to this
Article shall be treated as a directed investment of his/her Participant
Accounts (excluding his/her Rollover Account and his/her Employer Securities
Account). For purposes of allocating income in the General Investments Account
of the Trust Fund pursuant to Section 6.03, the balance in his/her General
Investments Account shall be treated as equal to the actual balance in the
Accounts minus the outstanding balance of any loans. Furthermore, for purposes
of Section 6.03, repayments of principal and interest on such loan shall be
treated as deposits to the adjusted balance (determined pursuant to the
preceding sentence) of his/her General Investments Account.

 

20.07       Effect of Termination of Employment or Plan: If a Participant
terminates employment with the Employer for any reason, the outstanding balance
of any loans made to him shall become fully payable no later than ninety (90)
days following his/her Termination of Employment or, if earlier, on his/her
Distribution Date. In the event of a termination of the Plan, any outstanding
loans shall be due and fully payable within ninety (90) days of the effective
date of such termination, or the date the Participant or Beneficiary is notified
of such termination. If the Participant or Beneficiary has not fully repaid any
loan as of the date full payment is due, any unpaid balance shall be deducted
from his/her Vested Accrued Benefit prior to determining the amount of any
immediate or deferred benefit payable to the Participant or Beneficiary, his/her
spouse or his/her Beneficiary and applied toward repayment of the loan.

 

20.08        Spousal Consent: No loan shall be made to a Participant unless the
Participant consents to the loan and acknowledges the possible reduction in Plan
benefits that would occur in the event of default on the loan. No spousal
consent shall be required for any loan as long as no portion of the
Participant’s Accrued Benefit may be distributed from the Plan in the form of an
annuity. If any portion of the Participant’s Accrued Benefit may be distributed
in the form of an annuity, then no loan shall be made to that Participant unless
the Participant and his/her spouse (if any) consent to such loan and acknowledge
the possible reduction in Plan benefits that would occur in the event of default
on the loan. Such consent and acknowledgment shall be provided in writing no
earlier than ninety (90) days prior to the making of the loan and witnessed by
the Plan Administrator (or representative thereof) or a notary public. In the
event of the renegotiation, extension, renewal or other revision of the loan, a
new spousal consent shall be required.

 

20.09       Anti-Alienation: Except as specifically provided in Sections 20.04
and 20.10, no benefit that shall be payable out of the Trust Fund to any person
(including a Participant, Inactive Participant or Beneficiary) shall be subject
in any manner to anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance, or charge, and any attempt to anticipate, alienate, sell, transfer,
assign, pledge, encumber, or charge the same shall be void. No benefit shall in
any manner be liable for or subject to the debts, contracts, liabilities,
engagements, or torts of any person, nor shall it be subject to attachment or
legal process for or against person, and the same shall not be recognized by the
Trustee, except to such extent as may be required by law.

 

66

 

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

20.10        Qualified Domestic Relations Orders: Section 20.09 shall apply to
the creation, assignment, or recognition of a right to any benefit payable with
respect to a Participant, Former Participant or Beneficiary pursuant to a
Domestic Relations Order, unless such Domestic Relations Order is determined to
be a Qualified Domestic Relations Order (“QDRO”). In the event the Plan, the
Trustee, or the Plan Administrator receives a Domestic Relations Order, the Plan
Administrator shall promptly notify the Participant, Former Participant or
Beneficiary whose benefit is the subject of such order and provide him with a
copy of the Plan’s written procedures for administering QDROs. Effective as of
January 1, 2003, administration expenses incurred by the Plan with respect to
the QDRO (including costs associated with review and determination of the order
as a valid QDRO) may be chargeable to the individual Participant’s Account
subject to the written policy established by the Plan Administrator. Unless and
until the order is set aside, the following provisions shall apply:

 

 

(a)

The Plan Administrator shall establish reasonable procedures to determine
whether an order received by it or the Trustee is a QDRO and to administer
distributions pursuant to said order. The procedures shall set forth all rules
to be applied by the Plan for notice to affected parties, suspension of Account
activity, including distributions, investment direction and participant loans,
and payment of benefits based upon the QDRO or the failure of the Domestic
Relations Order to be a QDRO.

 

 

(b)

The Plan Administrator shall within a reasonable time determine whether the
order is a QDRO and shall notify the Participant, Former Participant or
Beneficiary whose benefit is the subject of the order, of its determination. The
Plan Administrator may designate a representative to carry out its duties under
this Section 20.10.

 

 

(c)

Nothing in this Section 20.10 shall be deemed to allow payment under a QDRO to
an Alternate Payee of any benefit prior to the first day of the month following
the date the Participant or Former Participant whose benefits are subject to the
QDRO terminates employment or attains age fifty (50), unless (i) earlier
distribution is specifically provided under the terms of the QDRO and (ii) if
the value of the Alternate Payee’s benefit exceeds $5,000, the Alternate Payee
consents to any distribution occurring prior to the Participant’s attainment of
earliest retirement age.

 

 

20.11

QDRO Definitions: For purposes of Section 20.10 the following definitions and
rules shall apply:

 

 

(a)

“Alternate Payee” shall mean any spouse, former spouse, child or other dependent
of a Participant or Former Participant who is recognized by a QDRO as having a
right to receive all, or a portion of, the benefits payable under this Plan with
respect to the Participant or Former Participant.

 

 

(b)

“Domestic Relations Order” shall mean any judgment, decree, or order (including
approval of a property settlement agreement) which:

 

 

(1)

relates to the provision of child support, alimony payments, or marital property
rights to a spouse, child, or other dependent of a Participant or Former
Participant and

 

 

(2)

is made pursuant to a state domestic relations law (including a community
property law).

 

 

(c)

“Qualified Domestic Relations Order” shall mean any Domestic Relations Order
that satisfies the criteria set forth in the QDRO procedures established by the
Plan Administrator.

 

ARTICLE XXI  MULTIPLE EMPLOYER PROVISIONS

 

21.01       Adoption by Other FX Employers: With the consent of the Plan Sponsor
and by a properly executed document evidencing the intent and will of the
adopting FX Employer, any other FX Employer may adopt this Plan and all of the
provisions hereof and participate herein and be known as a Participating FX
Employer.

 

 

21.02

Requirements of Participating FX Employers:

 

 

(a)

Each Participating FX Employer shall be required to use the Trustee determined
by the Plan Sponsor or Plan Administrator.

 

67

 

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

 

(b)

The Trustee may, but shall not be required to, commingle, hold and invest as one
Trust Fund all contributions made by Participating FX Employers, as well as all
increments thereof. The assets of the Plan shall, on an ongoing basis, be
available to pay benefits to all Participants and Beneficiaries under the Plan
without regard to the Participating FX Employer who contributed such assets.

 

 

(c)

The transfer of any Participant from or to an FX Employer participating in this
Plan, whether he is an Employee of the Plan Sponsor or a Participating FX
Employer, shall not affect the Participant’s rights under the Plan, and the
Participant’s Accounts, as well as all accumulated service with the transferor
or predecessor, shall continue to his/her credit.

 

 

(d)

Any expenses of the Trust and Plan that are to be paid by the Employer or borne
by the Trust Fund, including funding of benefits, shall be paid by each
Participating FX Employer in the same proportion that the total amount of the
Accounts standing to the credit of all Participants employed by such FX Employer
bears to the total of the Accounts standing to the credit of all Participants.

 

21.03        Designation of Agent: Each Participating FX Employer shall be
deemed to be a part of this Plan. With respect to all of its relations with the
Trustee and Plan Administrator for the purpose of this Plan, each Participating
FX Employer shall be deemed to have designated irrevocably the Plan Sponsor as
its agent. Unless the context of the Plan clearly indicates the contrary, the
word “Employer” shall be deemed to include each Participating FX Employer as
related to its adoption of the Plan.

 

21.04       Employee Transfers: It is anticipated that an Employee may be
transferred between Participating FX Employers, and in the event of any
transfer, the Employee involved shall carry with him all of his/her accumulated
service and eligibility. No transfer shall effect a Termination of Employment
hereunder, and the Participating FX Employer to which the Employee is
transferred shall thereupon become obligated hereunder with respect to such
Employee in the same manner as was the Participating FX Employer from whom the
Employee was transferred.

 

21.05       Amendment: The Plan Sponsor may amend this Plan at any time without
regard to whether there are Participating FX Employers hereunder. No written
action of a Participating FX Employer shall be required to validate an
amendment.

 

21.06        Discontinuance of Participation: A Participating FX Employer shall
be permitted to discontinue or revoke its participation in the Plan. At the time
of any discontinuance or revocation, satisfactory evidence thereof and of any
applicable conditions imposed shall be delivered to the Trustee. If so directed
by the Plan Administrator, the Trustee shall transfer, deliver and assign
Contracts and other Fund assets allocable to the Participants of such
Participating FX Employer to the new Trustee as shall have been designated by
the Participating FX Employer, in the event that it has established a separate
pension plan for its Employees. No such transfer shall be made if the result is
the elimination or reduction of any Code §411(d)(6) protected benefits. If no
successor is designated, the Trustee shall retain the assets for the Employees
of the Participating FX Employer pursuant to the provisions of the Plan. In no
event shall any part of the corpus or income of the Trust as it relates to the
Participating FX Employer be used for or diverted for purposes other than for
the exclusive benefit of the Employees of the Participating FX Employer.

 

21.07       Administrator’s Authority: The Plan Administrator shall have
authority to make any and all necessary rules or regulations, binding upon all
Participating FX Employers and all Participants, to effectuate the purposes of
this Article.

 

21.08        Participating Employer Contributions: All contributions made by a
Participating FX Employer, as provided for in this Plan, shall be determined
separately for each Participating FX Employer, and shall be allocated only among
Participants eligible to share who are Employees of the Participating FX
Employer making the contribution. The Administrator shall keep separate books
and records concerning the affairs of each Participating FX Employer hereunder
and as to the accounts and credits of the Employees of each Participating FX
Employer. The Trustee may, but need not, register participation agreements so as
to evidence that a particular Participating FX Employer is an interested
Employer hereunder. In the event of an Employee transfer from one Participating
FX Employer to another, the Employers shall immediately notify the
Administrator.

 

68

 

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

ARTICLE XXII  REPURCHASE OF DISTRIBUTED EMPLOYER SECURITIES

 

22.01        Put option: The Employer may, in its discretion, issue a “put
option” to a Participant in the event the Participant receives a distribution of
Employer Securities from the Trust that are not readily tradeable on an
established market. The put option will permit the Participant to sell the
Employer Securities to the Employer, at any time during two option periods, at a
price determined by the Employer under a fair valuation formula. The first put
option period runs for a period of at least 60 days commencing on the date of
distribution of Employer Securities to the Participant. The second put option
period runs for a period of at least 60 days commencing after the new
determination of the fair market value of Employer Securities by the Plan
Administrator and notice to the Participant of the new fair market value. If a
Participant (Beneficiary) exercises his/her put option, the Employer will
purchase the Employer Securities at fair market value upon the terms provided
under Section 22.04. The Employer may grant the Trust an option to assume the
Employer’s rights and obligations at the time a Participant exercises an option
under this Section 22.01. No provision of this Section 22.01 (or of the Plan)
shall be interpreted to require the Plan or impose any obligation on the Plan to
acquire securities from a particular securities holder at an indefinite time
determined upon the happening of an event, such as the death of the holder.

 

22.02       Restriction on Employer Securities: Except upon the prior written
consent of the Employer, no Participant (or Beneficiary) may sell, assign, give,
pledge, encumber, transfer or otherwise dispose of any Employer Securities now
owned or subsequently acquired by him without complying with the terms of this
Article XXII. If a Participant (or Beneficiary) pledges or encumbers any
Employer Securities without the required prior written consent, any security
holder’s rights with respect to such Employer Securities are subordinate and
subject to the rights of the Employer. All certificates for Employer Securities
distributed pursuant to this Plan shall bear the following legend:

 

The shares represented by this certificate are transferable only upon compliance
with the terms of the FX Energy, Inc. 401(k) Stock Bonus Plan, as amended
effective January 1, 2004, which grants to FX Energy, Inc., a right of first
refusal. A copy of the Plan is on file in the office of the Company.

 

22.03       Lifetime Transfer/Right of First Refusal: If any Participant (or
Beneficiary) who receives Employer Securities under this Plan desires to dispose
of any of his/her Employer Securities for any reason during his/her lifetime
(whether by sale, assignment, gift or any other method of transfer), he first
must offer the Employer Securities for sale to the Employer. The Plan
Administrator may require a Participant (or Beneficiary) entitled to a
distribution of Employer Securities to execute an appropriate stock transfer
agreement (evidencing the right of first refusal) prior to receiving a
certificate for Employer Securities.

 

In the case of an offer by a third party, the offer to the Employer is subject
to all the terms and conditions set forth in Section 22.04, based on the price
equal to the fair market value per share and payable in accordance with the
terms of Section 22.04, unless the selling price and terms offered to the
Participant by the third party are more favorable to the Participant than the
selling price and terms of Section 22.04, in which event, the selling price and
terms of the offer of the third party apply. The Employer must give written
notice to the offering Participant of its acceptance of the Participant’s offer
within fourteen (14) days after the Participant has given written notice to the
Employer or the Employer’s rights under this Section 22.03 will lapse. The
Employer may grant the Trust the option to assume the Employer’s rights and
obligations with respect to all or any part of the Employer Securities offered
to the Employer under this Section 22.03. The Trust is not under any obligation
at any time to purchase Employer Securities from any holder of Employer
Securities upon the happening of any event.

 

22.04        Payment of Purchase Price: If the Employer (or the Trustee), at the
direction of the Plan Administrator exercises an option to purchase a
Participant’s Employer Securities pursuant to an offer given under Section
22.03, the purchaser(s) must make payment in lump sum or, if the distribution to
the Participant (or to his/her Beneficiary) constitutes a Total Distribution, in
substantially equal installments over a period not exceeding five years, subject
to the Participant’s election for a longer payment period than five years. A
“Total Distribution” to a Participant (or to a Beneficiary) is the distribution,
within one taxable year of the recipient, of the entire balance to the
Participant’s credit under the Plan. In the case of a distribution that is not a
Total Distribution or that is a Total Distribution with respect to which the
purchaser(s) will make payment in lump sum, the purchaser(s) must pay the
Participant (or Beneficiary) the fair market value of the Employer Securities
repurchased no later than 30 days after the date the Participant (or
Beneficiary) exercises the put option. In the case of a Total Distribution with
respect to which the purchaser(s) will make installment payments, the
purchaser(s) must make the first installment payment no later than 30

days after the Participant (or Beneficiary) exercises the put option. For
installment amounts not paid within 30 days of the exercise of the put option,
the purchaser(s) must evidence the balance of the purchase price by executing a
promissory note, delivered to the selling Participant at the Closing. The note
delivered at Closing must bear a reasonable rate of interest, determined as of
the Closing Date, and the purchaser(s) must provide adequate security. The note
must provide for equal annual installments with interest payable with each
installment, the first installment being due and payable one year after the
Closing Date. The note must further provide for acceleration in the event of 30
days’ default of the payment on interest or principal and must grant to the
maker of the note the right to prepay the note in whole or in part at any time
or times without penalty; provided however, the purchaser(s) may not have the
right to make any prepayment during the calendar year or fiscal year of the
Participant (Beneficiary) in which the Closing Date occurs.

 

69

 

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

22.05        Notice: A person has given Notice permitted or required under this
Article XXII when the person deposits the Notice in the United States mail,
first class, postage prepaid, addressed to the person entitled to the Notice at
the address currently listed for him in the records of the Advisory Committee.
Any person affected by this Article XXII has the obligation of notifying the
Plan Administrator of any change of address.

 

 

22.06

Terms and Definitions: For purposes of this Article XXII:

 

 

(a)

“Fair market value” means the value of the Employer Securities (i) determined as
of the date of the exercise of an option if the exercise is by a disqualified
person, or (ii) in all other cases, determined as of the most recent Accounting
Date. The Plan Administrator must determine fair market value of Employer
Securities for all purposes of the Plan by engaging the services of an
independent appraiser.

 

 

(b)

“Notice” means any offer, acceptance of an offer, payment or any other
communication.

 

 

(c)

“Beneficiary” includes the legal representative of a deceased Participant.

 

 

(d)

“Closing” means the place, date and time (“Closing Date”) to which the selling
Participant (or his/her Beneficiary) and purchaser may agree for purposes of a
sale and purchase under this Article XI, provided Closing must take place not
later than 30 days after the exercise of an offer under Section 22.01.

 

ARTICLE XXIII  MISCELLANEOUS

 

23.01        Participant’s Rights: This Plan shall not be deemed to constitute a
contract between the Employer and any Participant or to be a consideration or an
inducement for the employment of any Participant or Employee. Nothing contained
in this Plan shall be deemed to give any Participant or Employee the right to be
retained in the service of the Employer or to interfere with the right of the
Employer to discharge any Participant or Employee at any time regardless of the
effect that such discharge shall have upon him as a Participant of this Plan.

 

23.02       Actions Consistent with Terms of Plan: All actions taken by the
Employer, Plan Administrator or Trustee with respect to Trust assets shall be in
accordance with the terms of the Plan and Trust.

 

23.03        Performance of Duties: All parties to this Plan and Trust, or those
claiming any interest hereunder, agree to perform any and all acts and execute
any and all documents and papers that are necessary or desirable for carrying
out this Plan and Trust or any of its provisions.

 

23.04       Validity of Plan: This Plan shall be construed in a way that is
consistent with ERISA and regulations thereunder, the Internal Revenue Code and
regulations thereunder, and, to the extent state law has not been preempted by
federal law, the laws of the State in which the Plan Sponsor has its principal
office. In case any provision of this Plan shall be held illegal or invalid for
any reason, such determination shall not affect the remaining provisions of the
Plan; but the Plan shall be construed and enforced as if such provision had
never been included therein.

 

23.05       Legal Action: In the event any claim, suit, or proceeding is brought
regarding the Trust and/or Plan established hereunder to which the Trustee or
the Plan Administrator may be a party, and such claim, suit, or proceeding is
resolved in favor of the Trustee or Plan Administrator, they shall be entitled
to be reimbursed from the Trust Fund for any and all costs, attorney’s fees, and
other expenses pertaining thereto incurred by them for which they shall have
become liable.

 

23.06        Gender and Number: Wherever any words are used herein in the
masculine, feminine or neuter gender, they shall be construed as though they
were also used in another gender in all cases where they would so apply, and
whenever any words are used herein in the singular or plural form, they shall be
construed as though they were also used in the other form in all cases where
they would so apply.

 

23.07       Uniformity: All provisions of this Plan shall be interpreted and
applied in a uniform, nondiscriminatory manner.

 

23.08        Headings: The headings and subheadings of this Agreement have been
inserted for convenience of reference and are to be ignored in any construction
of the provisions hereof.

 

23.09       Receipt and Release for Payments: Any payment to any Participant,
his/her legal representative, Beneficiary, or to any guardian or committee
appointed for such Participant or Beneficiary in accordance with the provisions
of this Agreement, shall, to the extent thereof, be in full satisfaction of all
claims hereunder against the Trustee and the Employer, either of whom may
require such Participant, legal representative, Beneficiary, guardian or
committee, as a condition precedent to such payment, to execute a receipt and
release thereof in such form as shall be determined by the Trustee or Employer.

 

70

 

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

23.10        Payments to Minors, Incompetents: Effective for Plan Years
commencing on or after January 1, 1995, in the event the Plan Administrator must
direct a payment from the Plan to or for the benefit of any minor or incompetent
Participant or Beneficiary, the Plan Administrator, in its sole and absolute
discretion may, but need not, order the Trustee to make distribution to any of
the following: a legal or natural guardian of the minor or other relative or
adult with whom the minor temporarily or permanently resides, a court-appointed
conservator of any incompetent, a relative or adult with whom the incompetent
temporarily or permanently resides, a residential care facility, rest home,
sanitarium or similar entity with which the incompetent temporarily or
permanently resides, a person or entity that has applied for and been designated
by the United States Government as the recipient or custodian for Social
Security benefits for the minor or incompetent. The Plan Administrator may also
make payment as directed by the attorney-in-fact of an incompetent Participant
when such direction is pursuant to an unrevoked and valid durable power of
attorney. Any guardian, conservator, relative, attorney-in-fact, other person or
entity shall have full authority and discretion to expend the distribution for
the use and benefit of the minor or incompetent. The receipt of the distribution
by the guardian, conservator, relative, attorney-in-fact, other person or entity
shall be a complete discharge to the Plan, Plan Administrator and Trustee,
without any responsibility on the part of the Trustee or the Plan Administrator
to see to the application thereof. A Participant shall be deemed incompetent if
he or she is incapable of properly using, expending, investing, or otherwise
disposing of the distribution, and a court order or the written opinion of a
qualified physician, psychiatrist or psychologist setting forth facts consistent
with the standards outlined in this Section is presented to the Plan
Administrator.

 

23.11        Missing Persons: Notwithstanding any provision in this Plan and
Trust to the contrary, if the Plan Administrator is unable to locate any Former
Participant who is entitled to benefits under this Plan within three (3) years
of the date he becomes entitled to a distribution from the Trust Fund, any
amounts being held for his/her behalf shall be forfeited and used to reduce the
Employer’s contributions to the Plan and Trust. The Plan Administrator shall
proceed with due diligence in attempting to locate any Former Participant. In
the Plan Administrator’s sole discretion, due diligence may include inquiry of
any Beneficiary or Alternate Payee of the Former Participant whose names and
addresses are known to the Plan Administrator or use by the Plan Administrator
of a commercial locator service. Provided, however, no forfeiture shall occur
until the Plan Administrator has mailed the Former Participant a notice of the
benefits and the provisions of this section to his/her last known address, via
U.S. Mail postage prepaid, return receipt requested. And, provided further, if
the Former Participant is located subsequent to such forfeiture, the forfeited
amount shall be reinstated and the Former Participant shall receive a
distribution of his/her Vested Interest in accordance with the provisions of the
Plan.

 

23.12        Transfer of Interest: Notwithstanding any other provision contained
in this Plan, the Trustee at the direction of the Plan Administrator shall
transfer the lump sum amount otherwise payable to a Participant or Inactive
Participant to another trust forming part of a pension, profit sharing, or stock
bonus plan maintained by such Participant’s new employer and represented by said
employer in writing as meeting the requirements of Code §401(a) provided that
the trust to which such transfers are made permits the transfer to be made.

 

23.13        Prohibition Against Diversion of Funds: It shall be impossible by
operation of the Plan or of the Trust, by termination of either, by power of
revocation or amendment, by the happening of any contingency, by collateral
arrangement or by any other means, for any part of the corpus or income of any
trust fund maintained pursuant to the Plan or any funds contributed thereto to
be used for, or diverted to, purposes other than the exclusive benefit of
Participants, Inactive Participants or their Beneficiaries, except as provided
in Sections 17.04 and 21.19.

 

23.14        Period of the Trust: If it shall be determined that the applicable
State law requires a limitation on the period during which this Trust shall
continue, then such Trust shall not continue for a period longer than twenty-one
(21) years following the death of the last of those Participants, including
future Participants, who are living at the Effective Date hereof. At least one
hundred eighty (180) days prior to the end of the twenty-first (21st) year as
described in the first sentence of this Section, the Plan Sponsor, the Plan
Administrator and the Trustee shall provide for the establishment of a successor
Trust and transfer of Plan assets to the Trustee of such successor Trust. If
applicable State law places no such limitation, then this Section shall not be
operative.

 

23.15       Applicability of Plan: The provisions of this Plan shall apply only
to persons who are or who become Participants in this Plan on or after the
Effective Date or with respect to Plan provisions with alternate effective
dates, such alternate dates. Except as specifically provided in this Plan, the
provisions of the Prior Plan will continue to apply to persons who are Inactive
Participants or who are not employed by an FX Employer on the Effective Date or
as applicable, alternate effective dates, unless and until such time as such
persons may again become Participants in this Plan.

 

23.16        Misstatement of Age: If a Participant or Beneficiary misstates or
misrepresents his/her age, date of birth or any other material information to
the Employer, Plan Administrator or Trustee, the amount, terms and conditions of
any benefits payable from the Plan that are attributable to periods prior to the
discovery of such misstatement or misrepresentation shall be limited to the
lesser (or more restrictive) of: the amount, terms and conditions determined
based on the misstated information; or the amount, terms and conditions
determined based on the correct information. The Plan Administrator shall have
sole and absolute authority for applying the preceding sentence.

 

71

 

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

23.17       Return of Contributions to the Employer: Notwithstanding any
provision of this Plan to the contrary, if any contribution (or portion thereof)
by the Employer to the Trust is made as a result of a mistake of fact, or if any
contribution (or part thereof) by the Employer to the Trust Fund that is
conditioned upon the deductibility of the contribution by the Employer under the
Code is disallowed, whether by agreement within the Internal Revenue Service or
by final decision of a court of competent jurisdiction, the Employer may demand
repayment of the mistaken or disallowed amount. The Trustee shall return the
mistaken or disallowed contribution within one (1) year following the time the
mistaken contribution was made or the disallowed contribution was disallowed.
Investment earnings attributable to the mistaken or disallowed amount shall not
be returned, but any investment losses attributable thereto shall reduce the
amount so returned.

 

23.18        Correction of Incorrect Benefit Payments: In the event of a
misstatement, computational error or other error in Plan records or
administration, including a failure by the Plan to value correctly a
Participant’s Account or any assets therein (including any Employer Securities)
or to calculate or determine correctly costs or expenses attributable to a
Participant’s Account, or in the event costs or expenses attributable to a
Participant’s Account or assets therein are not incurred by the Plan prior to
the date distribution of the Participant’s Account occurs, and as a result a
Participant or Beneficiary is underpaid or overpaid, the Plan shall not be
liable to the Participant or Beneficiary for any more than the correct benefit
amount under the Plan.

 

Underpayment amounts may be corrected by the Plan by adding to future payments
or by making a single one-time lump sum payment. Overpayment amounts may be
deducted by the Plan from any future payments due from the Plan to the
Participant or Beneficiary. In lieu of receiving reduced future payments a
Participant or Beneficiary may make a lump sum payment to the Plan of any
overpayment. In the event no future payments are owing or will be made, the Plan
may require a lump sum repayment from the Participant or Beneficiary of the
overpayment amount. Each Participant and Beneficiary in the Plan shall receive
any distribution from the Plan, regardless of when paid, subject to the right of
the Plan to obtain recovery of overpaid amounts as provided herein. The right of
the Plan to establish the propriety of distributions from the Plan and/or obtain
recovery shall be an equitable remedy and shall extend to all amounts
distributed from the Plan, without regard to when the distribution occurs or may
have previously occurred.

 

23.19        Counterparts: This Plan and Trust may be executed in any number of
counterparts, each of which shall be deemed to be an original, and the
counterparts shall constitute one and the same instrument.

 

IN WITNESS WHEREOF, the Plan Sponsor has caused this Plan to be executed by its
duly authorized representative this 25th day of January, 2007.

 

PLAN SPONSOR:

FX Energy, Inc.

 

By: /s/ Scott J. Duncan

Its Secretary

 

72