Exhibit 10.1

 

PEOPLES SECURITY BANK & TRUST CO.

EMPLOYEE STOCK OWNERSHIP PLAN

 

Originally Effective

January 1, 1984

 

As Amended And Restated Effective

January 1, 2015

 

 

 

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TABLE OF CONTENTS

 

Page

Article I - DEFINITIONS

5

Section 1.1. - References

5

Section 1.2. - Compensation

5

Section 1.3. - Dates

6

Section 1.4. - Employee

7

Section 1.5. - Employer

9

Section 1.6. - Fiduciaries

9

Section 1.7. - Participant/Beneficiary/Spouse

9

Section 1.8. - Participant Accounts

10

Section 1.9. - Plan

10

Section 1.10. - Service

10

Section 1.11. -Trust

13

Section 1.12. - ESOP Specific Definitions

13

 

 

Article II - PARTICIPATION

14

Section 2.1. - Eligibility Service

14

Section 2.2. - Plan Participation

14

Section 2.3. - Termination of Participation

16

Section 2.4. - Re-Participation or Re-Employment (Break in Service Rules)

16

 

 

Article III - ALLOCATIONS TO PARTICIPANT ACCOUNTS

16

Section 3.1. - General Provisions

16

Section 3.2. - Employer Contributions

18

Section 3.3. - Rollover/Transfer Contributions

19

Section 3.4. - Allocation of Investment Results

19

 

 

Article IV - PAYMENT OF PARTICIPANT ACCOUNTS

21

Section 4.1. - Vesting Service Rules

21

Section 4.2. - Vesting of Participant Accounts (a) Determination of Vesting

22

Section 4.3. - Payment of Participant Accounts

26

Section 4.4. - In-Service Payments

30

Section 4.5. - Distributions under Domestic Relations Orders

31

 

 

Article V - ADDITIONAL QUALIFICATION RULES

31

Section 5.1. - Limitations on Allocations under Code Section 415

31

Section 5.2. - Joint and Survivor Annuity Requirements

36

Section 5.3. - Distribution Requirements

38

Section 5.4. - Top Heavy Provisions

43

Section 5.5. - ESOP Distribution Options

47

 

 

Article VI -ADMINISTRATION OF THE PLAN

50

Section 6.1. - Fiduciary Responsibility

50

Section 6.2. - Plan Administrator

51

 

 

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Section 6.3. - Claims Procedure

53

Section 6.4. - Trust Fund

55

Section 6.5. - Investment Policy

56

Section 6.6. - Prohibitions Against Allocations

57

Section 6.7. - Valuation of the Trust Fund

62

Section 6.8. - Voting Corporate Stock

63

Section 6.9. - ESOP Loans

64

Section 6.10. - Current Obligations

65

 

 

Article VII -AMENDMENT AND TERMINATION OF PLAN

65

Section 7.1. - Right to Discontinue and Amend

65

Section 7.2. - Amendments

65

Section 7.3. - Protection of Benefits in Case of Plan Merger

67

Section 7.4. - Termination of Plan

67

 

 

Article VIII - MISCELLANEOUS PROVISIONS

67

Section 8.1. - Exclusive Benefit - Non-Reversion

67

Section 8.2. - Inalienability of Benefits

68

Section 8.3. - Employer-Employee Relationship

68

Section 8.4. - Binding Agreement

68

Section 8.5. - Separability

69

Section 8.6. - Construction

69

Section 8.7. - Copies of Plan

69

Section 8.8. - Interpretation

69

Section 8.9. - Securities and Exchange Commission Approval

69

Section 8.10. - Nonterminable Right of Certain Holders

69

 

 

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PREAMBLE

This amended and restated plan, executed on the date indicated at the end
hereof, is made effective as of January 1, 2015, except as provided otherwise in
Section 1.3(c), by Peoples Security Bank arid Trust Company, a corporation, with
its principal office located in Scranton, Pennsylvania.

WITNESSETH:

WHEREAS, effective January 1, 1984, the employer established the employee stock
ownership plan for its employees and desires to continue to maintain a permanent
qualified plan in order to enable its employees to share in the growth and
prosperity of the corporation and to provide its employees and their
beneficiaries with financial security in the event of retirement, disability, or
death; and

WHEREAS, it is desired to amend said plan;

NOW THEREFORE, the premises considered, the original plan is hereby replaced by
this amended and restated plan, and the following are the provisions of the
qualified plan of the employer as restated herein; provided, however, that each
employee who was previously a participant shall remain a participant, and no
employee who was a participant in the plan before the date of amendment shall
receive a benefit under this amended plan that is less than the benefit he was
then entitled to receive under the plan as of the day prior to the amendment.

 

 

 

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Article I - DEFINITIONS

Section 1.1. - References

(a)        Code means the Internal Revenue Code of 1986, as it may be amended
from time to time.

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

Section 1.2. - Compensation

(a)        Compensation means, except as provided in Section 1.2(b) hereof, any
earnings reportable as W-2 wages for federal income tax withholding purposes,
plus elective contributions, for the determination period.  For this purpose,
the determination period is the plan year.  Such earnings shall include any
amount contributed to a Roth elective deferral account under any qualified
plan.  However, compensation shall not include any earnings reportable as W-2
wages that are payable following the termination of employment pursuant to a
severance agreement.

Elective contributions are amounts excludable from the employee’s gross income
and contributed by the employer, at the employee’s election to:

·

A cafeteria plan (excludable under Code section 125 and as provided in Section
5.1(c)(2));

 

·

A Code section 401(k) arrangement (excludable under Code section 402(e)(3));

 

·

A simplified employee pension (excludable under Code section 402(h));

 

·

A tax sheltered annuity (excludable under Code section 403(b));

 

·

A deferred compensation plan excludable under Code section 457(b); or

 

·

A Code section 132(f)(4) qualified transportation fringe benefit plan.

 

Any reference in this plan to compensation shall be a reference to the
definition in this Section 1.2, unless the plan reference specifies a
modification to this definition.  The plan administrator shall take into account
only compensation actually paid by the employer for the relevant period.  A
compensation payment includes compensation by the employer through another
person under the common paymaster provisions in Code sections 3121 and
3306.  Compensation from an employer that is not a participating employer under
this plan shall be excluded.

(b)        Exclusions From Compensation - Notwithstanding the provisions of
Section 1.2(a), the following types of remuneration shall be excluded from the
participant’s compensation:

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·

Deferrals under or distributions from a nonqualified deferred compensation plan

 

·

Moving expenses

 

·

Expense allowances or reimbursements

 

·

Taxable fringe benefits (group term life insurance in excess of $50,000, auto
insurance, etc.), whether cash or noncash

 

·

Welfare benefits to the extent includable in compensation

 

(c)        Limitations on Compensation - The plan administrator shall take into
account $200,000 (as adjusted for cost-of-living increases in accordance with
Code section 401(a)(17)(B) for plan years beginning on or after January 1, 2003)
of any participant’s annual compensation for determining all benefits provided
under the plan.  Contributions and allocations made before January 1, 2002 were
made subject to the limitations of Code section 401(a)(17) as then in effect and
described in prior statements of the plan document.  The compensation dollar
limitation for a plan year shall be the limitation amount in effect on January 1
of the calendar year in which the plan year begins.  Annual compensation means
compensation during the plan year or such other 12-consecutive-month period over
which compensation is otherwise determined under the plan (the determination
period for purposes of Section 1.2).  If the plan should determine compensation
on a period of time that contains less than 12 calendar months (such as for a
short plan year), the annual compensation dollar limitation shall be an amount
equal to the compensation dollar limitation for the plan year multiplied by the
ratio obtained by dividing the number of full months in the period by 12.

(d)        Compensation for Nondiscrimination Testing - For purposes of
determining whether the plan discriminates in favor of highly compensated
employees, compensation means compensation as defined in this Section 1.2.  For
this purpose, compensation shall include compensation paid by the employer as
defined under Section 1.5(b).  Notwithstanding the above, the employer may amend
this plan to exclude from this nondiscrimination definition of compensation any
items of compensation excludable under Code section 414(s) and the applicable
Treasury regulations, provided such adjusted definition conforms to the
nondiscrimination requirements of those regulations.

Section 1.3. - Dates

(a)        Accounting Date means the date(s) on which investment results are
allocated to participants’ accounts as set forth below:

·

March 31, June 30, September 30, and December 31

(b)        Allocation Date means the date(s) as of which any contribution is
allocated to participants’ accounts. The employer contribution and forfeitures
shall be allocated as of December 31.  The allocation period for the employer
contribution shall be the plan year.

(c)        The Effective Date of the plan is January 1, 1984.

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The effective date of this amendment and restatement is January 1, 2015;
provided, however, that the plan provision required to comply with the plan
provisions required to comply with the American Jobs Creation Act of 2004 shall
generally be effective for distributions with respect to S corporation stock
made after December 31, 1997; the plan provisions required to comply with the
Pension Protection Act of 2006 shall generally be effective as of the first day
of the first day of the first plan year beginning on or after January 1, 2008
(except that the provisions that are required to be effective prior to the first
day of the first plan year beginning on or after January 1, 2008 shall be
effective as of the first day of the first plan year beginning on or after
January 1, 2006); the plan provisions required to comply with the Heroes
Earnings Assistance and Relief Tax Act of 2008 (HEART) shall be effective for
limitation years beginning on or after January 1, 2007; the plan provisions
required to comply with the final regulations issued under Code section 415
shall generally be effective as of the first day of the first limitation years
beginning on or after July 1, 2007; the plan provisions required to comply with
the Workers Retirees and Employers Relief Act of 2008 shall be effective as of
January 1, 2009; and the plan provisions required to comply with the Cumulative
Lists as published by the Internal Revenue Service with respect to the years
2004 through 2010 shall generally be effective as of the first day of the plan
year with respect to which the List was published, except as specified otherwise
in this plan or in said Acts.

(d)        Plan Entry Date means the participation date(s) specified in Article
II.

(e)        Plan Year means the 12-consecutive-month period beginning on January
1 and ending on December 31.

(f)        Limitation Year means the 12-consecutive-month period beginning on
January 1 and ending on December 31.

Section 1.4. - Employee

(a)        (1)        Employee means any person employed by the employer,
including an owner-employee or other self-employed individual (as defined in
Section 1.4(a)(3)).  The term employee shall include any employee of the
employer as defined in Section 1.5(b).  The term employee shall also include any
leased employee deemed to be an employee of any such employer as provided in
Code section 414(n) or (o) and as defined in Section 1.4(a)(2).

(2)        Leased Employee means an individual (who otherwise is not an employee
of the employer) who, pursuant to a leasing agreement between the employer and
any other person, has performed services for the employer (or for the employer
and any persons related to the employer within the meaning of Code section
414(n)(6)) on a substantially full time basis for at least one year and such
services are performed under the primary direction or control of the
employer.  If a leased employee is treated as an employee by reason of this
Section 1.4(a)(2), compensation from the leasing organization that is
attributable to services performed for the employer shall be considered as
compensation under the plan.  Contributions or benefits provided a leased
employee by the leasing organization that are attributable to services performed
for the employer shall be treated as provided by the employer.

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Safe harbor plan exception - The plan shall not treat a leased employee as an
employee if the leasing organization covers the employee in a safe harbor plan
and, prior to application of this safe harbor plan exception, 20% or less of the
employer’s nonhighly compensated employees are leased employees.  A safe harbor
plan is a money purchase pension plan providing immediate participation, full
and immediate vesting, and a nonintegrated contribution formula equal to at
least 10% of the employee’s compensation without regard to employment by the
leasing organization on a specified date.  The safe harbor plan must determine
the 10% contribution on the basis of compensation as defined in Section
5.1(c)(2).

(b)        Highly Compensated Employee means any employee who:

(1)        was a more than 5% owner of the employer (applying the constructive
ownership rules of Code section 318, and applying the principles of Code section
318, for an unincorporated entity) at any time during the current plan year or
the look-back year; or

(2)        for the look-back year -

 

(A)        had compensation from the employer (as defined under Section 1.5(b))
in excess of $80,000 (as adjusted by the Commissioner of Internal Revenue
pursuant to Code section 415(d), except that the base period shall be the
calendar quarter ending September 30, 1996), and

(B)        if the employer elects the application of this Subparagraph for such
look-back year, was in the top-paid group of employees for such look-back
year.  For this purpose, an employee is in the top-paid group of employees for
any look-back year if such employee is in the group consisting of the top 20% of
the employees when ranked on the basis of compensation paid during such look-
back year.

The look-back year is the twelve-month period immediately preceding the current
plan year.  The term highly compensated employee also includes any former
employee who separated from service (or has a deemed separation from service, as
determined under Treasury regulations) prior to the plan year, performs no
service for the employer during the plan year, and was a highly compensated
employee either for the separation plan year or any plan year ending on or after
his 55th birthday, based on the applicable rules in effect for such plan year.

For purposes of determining who is a highly compensated employee under this
Section 1.4(b), compensation means compensation as defined in Section 1.2(a)
without regard to Section 1.2(b).  The plan administrator shall make the
determination of who is a highly compensated employee.

This Section 1.4(b) is effective for plan years beginning after December 31,
1996, except that, in determining whether an employee is a highly compensated
employee in 1997, this provision shall be treated as having been in effect for
the last plan year beginning before January 1, 1997.

(c)        Nonhighly Compensated Employee means any employee who is not a highly
compensated employee.

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Section 1.5. - Employer

(a)        Employer means Peoples Security Bank and Trust Company or any
successor entity by merger, purchase, consolidation, or otherwise; or an
organization affiliated with the employer that may assume the obligations of
this plan with respect to its employees by becoming a party to this plan.

(b)        Employer for Compliance Testing - For purposes of determining whether
the plan satisfies the participation coverage requirements of Code section
410(b) and the limitations on benefits and allocations under Code section 415,
employer shall mean the employer that adopts this plan as set forth in Section
1.5(a), and all members of a controlled group of corporations (as defined in
Code section 414(b)), all commonly controlled trades or businesses (as defined
in Code section 414(c)) or affiliated service groups (as defined in Code section
414(m)) of which the adopting employer is a part, and any other entity required
to be aggregated with the employer pursuant to regulations under Code section
414(o).

(c)        Exclusive Benefit - In compliance with the exclusive benefit
requirements of Code section 401 (a), the sponsorship of this plan may not be
transferred to an unrelated entity if the transfer is not in connection with a
transfer of business assets or operations from the employer to such entity.

Section 1.6. - Fiduciaries

(a)        Named Fiduciary means the person or persons having fiduciary
responsibility for the management and control of plan assets.

(b)        Plan Administrator means the person or persons appointed by the named
fiduciary to administer the plan.

(c)        Trustee means the trustee named in the trust agreement executed
pursuant to this plan, or any duly appointed successor trustee.

(d)        Investment Manager means a person or corporation other than the
trustee appointed for the investment of plan assets.

Section 1.7. - Participant/Beneficiary/Spouse

(a)        Participant means an eligible employee of the employer who becomes a
member of the plan pursuant to the provisions of Article II, or a former
employee who has an accrued benefit under the plan.  A participant shall be
treated as benefiting under the plan for any plan year during which the
participant received or is deemed to receive an allocation in accordance with
Regulation section 1.410(b)-3(a).

(b)        Beneficiary means a person designated by a participant who is or may
become entitled to a benefit under the plan.  A beneficiary who becomes entitled
to a benefit under the plan remains a beneficiary under the plan until the
trustee has fully distributed his benefit to him.  A beneficiary’s right to (and
the plan administrator’s, or a trustee’s duty to provide to the

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beneficiary) information or data concerning the plan shall not arise until he
first becomes entitled to receive a benefit under the plan.

(c)        Spouse means the person married to the participant at the time of the
determination as evidenced by a certified copy of the marriage certificate valid
under the marriage licensing laws of the place of issuance.

Section 1.8. - Participant Accounts

(a)        Employer Contribution Account means the balance of the separate
account derived from the employer’s contributions, including forfeitures (if
any) (if so provided under Section 3.2).

(b)        Rollover/Transfer Account means the balance of the separate account
derived from rollover contributions and/or transfer contributions (if so
provided under Section 3.3).

(c)        Accrued Benefit means the total of the participant’s account balances
as of the accounting date falling on or before the day on which the accrued
benefit is being determined.

Section 1.9. - Plan

Plan means Peoples Security Bank & Trust Co.  Employee Stock Ownership Plan as
set forth herein and as it may be amended from time to time.

Section 1.10. - Service

(a)        Service means any period of time the employee is in the employ of the
employer, including any period the employee is on an unpaid leave of absence
authorized by the employer under a uniform, nondiscriminatory policy applicable
to all employees.  Separation from service means that the employee no longer has
an employment relationship with the employer.

(b)         (1)        Hour of Service means:

(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 computation period in which the duties are performed; and

(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.  No more than 501 hours of service
shall be credited under this Subparagraph (B) for any single continuous period
(whether or not such period occurs in a single computation period).  An hour of
service shall not be credited to an employee under this Subparagraph (B) if the
employee is paid, or entitled to payment, under a plan maintained solely for the
purpose of complying with applicable worker’s compensation or unemployment
compensation or disability insurance laws.  Hours under this Subparagraph (B)
shall be calculated and credited pursuant to section

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2530.200b-2 of the Department of Labor Regulations that is incorporated herein
by this reference; and

(C)        Each hour for which back pay, irrespective of mitigation of damages,
is either awarded or agreed to by the employer.  The same hours of service shall
not be credited both under Subparagraph (A) or Subparagraph (B), as the case may
be, and under this Subparagraph (C).  These hours shall be credited to the
employee for the computation period or periods to which the award or agreement
pertains rather than the computation period in which the award, agreement, or
payment is made.

Hours of service shall be determined on the basis of actual hours for which an
employee is paid or entitled to payment.  The above provisions shall be
construed so as to resolve any ambiguities in favor of crediting employees with
hours of service.

If, for the purposes of the plan, an employee’s records are maintained on other
than an hourly basis, the plan administrator, according to uniform rules
applicable to a class of employees, may apply the following equivalencies for
the purpose of crediting hours of service:

Basis Upon Which Records
Are Maintained

    

Credit Granted to Individual if Individual
Earns One or More Hours of Service
During Period

 

 

 

Shift

 

Actual hours of full shift

Day

 

10 hours of service

Week

 

45 hours of service

Semi-Monthly Payroll Period

 

95 hours of service

Months of Employment

 

190 hours of service

 

(2)        Solely for purposes of determining whether a break in service for
participation and vesting purposes has occurred in a computation period, an
individual who is absent from work for maternity or paternity reasons shall
receive credit for the hours of service that would otherwise have been credited
to such individual but for such absence, or in any case in which such hours
cannot be determined, 8 hours of service per day of such absence.  For purposes
of this paragraph, an absence from work for maternity or paternity reasons means
an absence (A) by reason of the pregnancy of the individual, (B) by reason of a
birth of a child of the individual, (C) by reason of the placement of a child
with the individual in connection with the adoption of such child by such
individual, or (D) for purposes of caring for such child for a period beginning
immediately following such birth or placement.  The hours of service credited
under this paragraph shall be credited: (A) in the computation period in which
the absence begins if the crediting is necessary to prevent a break in service
in that period, or (B) in all other cases, in the following computation
period.  No more than 501 hours of service shall be credited under this
paragraph for any single continuous period (whether or not such period occurs in
a single computation period).

(3)        Solely for purposes of determining whether a break in service for
participation and vesting purposes has occurred in a computation period, an
individual who is absent from work on unpaid leave under the Family and Medical
Leave Act shall receive credit

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for the hours of service that would otherwise have been credited to such
individual but for such absence, or in any case in which such hours cannot be
determined, 8 hours of service per day of such absence.  Such an individual
shall be treated as actively employed for the purposes of participation and
eligibility for an allocation of any employer contribution that may be provided
under this plan.  Notwithstanding the preceding, this paragraph shall not apply
if the employer or the particular employee is not subject to the requirements of
the Family and Medical Leave Act at the time of the absence.

(4)        Hours of service shall be credited for employment with the employer
as defined in Section 1.5(b). Hours of service shall also be credited for any
leased employee who is considered an employee for purposes of this plan under
Code section 414(n) or Code section 414(p).

(c)         (1)        Year of Service means a 12-consecutive-month computation
period during which the employee completes the required number of hours of
service with the employer as specified in Sections 2.1 or 4.1.  No more than one
year of service will be credited for any 12 consecutive-month period unless
otherwise required by Sections 2.1(c) and 4.1(c).

(2)        Service with Related Employers - For purposes of crediting years of
service, hours of service credited in accordance with Section 1.10(b)(4) shall
be taken into account.

(3)        Predecessor Service - If the employer maintains the plan of a
predecessor employer, service with such predecessor employer shall be treated as
service for the employer.  If the employer does not maintain the plan of a
predecessor employer, then service as an employee of a predecessor employer
shall not be considered as service under the plan, except as noted below:

·

Effective as of the date of acquisition, with respect to an employee employed by
the predecessor employer as of the day immediately prior, service as an employee
of acquired predecessor employer Peoples Neighborhood Bank shall be considered
as service under the plan for the purposes of determining eligibility years of
service (under Section 2.1) and vesting years of service (under Section 4.1).

(d)        Break in Service (or One Year Break in Service) means a
12-consecutive-month computation period during which a participant or former
participant does not complete the specified number of hours of service with the
employer as set forth in Sections 2.1(b) and 4.1(b).

(e)        Qualified Military Service - Notwithstanding any provision of this
plan to the contrary, effective December 12, 1994, contributions, benefits, and
service credit with respect to qualified military service will be provided in
accordance with Code section 414(u).  An employee reemployed after qualified
military service shall not be treated as having incurred a break in service, for
purposes of vesting and benefit accruals, solely because of an absence due to
qualified military service.

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Effective with respect to deaths occurring on or after January 1, 2007, in the
case of a participant who dies while performing qualified military service, the
beneficiary(ies) of the participant shall be entitled to any benefits payable
under Section 4.2(a)(5) (other than contributions relating to the period of
qualified military service) that would have been payable had the participant
resumed and then immediately terminated employment on account of death.

Section 1.11. -Trust

(a)        Trust means the qualified trust created under the employer’s plan.

(b)        Trust Fund means all property held or acquired by the plan.

Section 1.12. - ESOP Specific Definitions

(a)        ESOP means an employee stock ownership plan that meets the
requirements of Code section 4975(e)(7) and Regulation section 54.4975-11.

(b)        Corporate Stock means common stock issued by the employer (or by a
corporation that is a member of the controlled group of corporations of which
the employer is a member) that is readily tradable on an established securities
market.  If there is no common stock that meets the foregoing requirement, the
term corporate stock means common stock issued by the employer (or by a
corporation that is a member of the same controlled group) having a combination
of voting power and dividend rights equal to or in excess of: (1) that class of
common stock of the employer (or of any other such corporation) having the
greatest voting power, and (2) that class of stock of the employer (or of any
other such corporation) having the greatest dividend rights.  Noncallable
preferred stock shall be deemed to be corporate stock if such stock is
convertible at any time into stock that constitutes corporate stock hereunder
and if such conversion is at a conversion price that (as of the date of the
acquisition by the trust) is reasonable.  For purposes of the preceding
sentence, pursuant to Code regulations, preferred stock shall be treated as
noncallable if after the call there will be a reasonable opportunity for a
conversion that meets the requirements of the preceding sentence.

(c)        Corporation means the entity whose corporate stock is the subject of
this employee stock ownership plan.

(1)        C Corporation means an incorporated entity that has not elected to be
an S corporation.

(2)        S Corporation means a small business corporation for which an
election under Code section 1362(a) is in effect for the current plan year.

(d)        Exempt Loan means a loan made to the plan by a disqualified person or
a loan to the plan that is guaranteed by a disqualified person and that
satisfies the requirements of Department of Labor Regulation section
2550.408b-3, Treasury Regulation section 54.4975-7(b), and Section 6.9 of this
plan.

(e)        Investment Accounts - For investment purposes, a participant’s
accounts may be placed in three accounts as described herein.

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(1)        Corporate Stock Account means the investment account of a participant
that is credited with the shares of corporate stock purchased and paid for by
the trust fund or contributed to the trust fund.

(2)        Other Investment Account means the investment account of a
participant that is credited with his share of the net gain (or loss) of the
plan, forfeitures, and employer contributions in other than corporate stock and
that is debited with payments made to pay for corporate stock.

(3)        Directed Investment Account means the investment account of a
participant that he elects under the provisions of Section 3.4(c) and that is
credited with the net gain (or loss) on his directed investments.

(f)        Unallocated Corporate Stock Suspense Account means an account
containing corporate stock that was acquired with the proceeds of an exempt loan
and that has not been released from the account and allocated to the
participants’ corporate stock accounts.

Article II - PARTICIPATION

Section 2.1. - Eligibility Service

(a)        Eligibility Year of Service means an eligibility computation period
during which the employee completes at least 1,000 hours of service with the
employer.

(b)        One Year Break in Service means for the purposes of this Article II
an eligibility computation period during which the participant or former
participant does not complete more than 500 hours of service with the employer.

(c)        Eligibility Computation Period - The initial eligibility computation
period shall be the 12-consecutive- month period beginning with the day on which
the employee first performs an hour of service for the employer (employment
commencement date).

Succeeding eligibility computation periods shall coincide with the plan year,
beginning with the first plan year that commences prior to the first anniversary
of the employee’s employment commencement date regardless of whether the
employee is credited with the required number of hours of service during the
initial eligibility computation period.  An employee who is credited with the
required number of hours of service in both the initial eligibility computation
period and the first plan year that commences prior to the first anniversary of
the employee’s employment commencement date shall be credited with two years of
service for purposes of eligibility to participate.

Section 2.2. - Plan Participation

(a)        Eligibility

(1)         Age/service requirements - An employee who is a member of the
eligible class of employees shall be eligible for plan participation after he
has satisfied the following participation requirement(s):

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(A)        Completion of 1 year of service.

(B)        Attainment of age 21.

(2)        Eligible class of employees - All employees of the employer shall be
eligible to be covered under the plan except for employees in the following
categories:

·

Individuals not directly employed by the employer as defined in Section
1.5(a).  An employee of the employer as that term is defined in Section 1.5(b)
with respect to the sponsoring employer shall not participate in this plan
unless such employee’s direct employer affirmatively elects to become a
participating employer hereunder.

·

An employee prohibited from receiving an allocation of certain corporate stock
pursuant to Section 6.6(a).

·

Employees who became employees as the result of a “Code section 410(b)(6)(C)
transaction.” These employees shall be excluded during the period beginning on
the date of the transaction and ending on the last day of the first plan year
beginning after the date of the transaction.  A “Code section 410(b)(6)(C)
transaction” is an asset or stock acquisition, merger, or similar transaction
involving a change in the employer of the employees of a trade or business.

·

Leased employees who are considered employees under the plan.

·

Employees who are non-resident aliens (as defined in Code section 7701
(b)(1)(B)) and who receive no earned income (as defined in Code section
911(d)(2)) from the employer that constitutes income from sources within the
United States (as defined in Code section 861(a)(3)).

(b)        Entry Date - An eligible employee shall participate in the plan on
the earlier of the March 31, June 30, September 30, or December 31 coinciding
with or immediately following the date on which he has met the age and service
requirements, provided he is employed on that date.  Prior to January 1, 2015,
an eligible employee shall participate in the plan on the earlier of the June 30
or December 31 entry date coinciding with or immediately following the date on
which he has met the age and service requirements.

If an employee who is not a member of the eligible class of employees becomes a
member of the eligible class, such employee shall participate immediately, if he
has satisfied the age and service requirements and would have otherwise
previously become a participant.

(c)        Election Not To Participate - An employee may file a written election
not to participate in the plan before his plan entry date.  The employer shall
not make a contribution under any plan of the employer for such employee for the
plan year for which the election is effective, nor for any succeeding plan year.
An employee who has elected not to participate in

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the plan shall not re-participate in this plan, nor shall he participate in any
other qualified retirement plan sponsored by the employer.

Section 2.3. - Termination of Participation

A participant shall continue to be an active participant of the plan so long as
he is a member of the eligible class of employees and he does not terminate
employment.  He shall become an inactive participant when he terminates
employment or ceases to be a member of the eligible class of employees.  He
shall cease participation completely upon the later of his receipt of a total
distribution of his nonforfeitable account balance(s) under the plan or the
forfeiture of the nonvested portion of the account balance(s).

Section 2.4. - Re-Participation or Re-Employment (Break in Service Rules)

(a)        Vested Participant - A former participant who had a nonforfeitable
right to all or a portion of his account balance derived from employer
contributions at the time of his termination from service shall become a
participant immediately upon returning to the employ of the employer, if he is a
member of the eligible class of employees.

(b)        Nonvested Participant or Employee - In the case of an employee who
does not have any nonforfeitable right to his account balance derived from
employer contributions at the time of his termination from service, years of
service before a period of consecutive one-year breaks in service shall not be
taken into account in computing eligibility service if the number of consecutive
one-year breaks in service in such period equals or exceeds the greater of 5 or
the aggregate number of years of service before such breaks in service.  Such
aggregate number of years of service shall not include any years of service
disregarded under the preceding sentence by reason of prior breaks in service.

If an employee’s years of service before termination from service are
disregarded pursuant to the preceding paragraph, he shall be considered a new
employee for eligibility purposes.  If such employee’s years of service before
termination from service may not be disregarded pursuant to the preceding
paragraph, he shall participate immediately upon returning to the employ of the
employer, if he is a member of the eligible class of employees and has otherwise
satisfied the age and service requirements of Section 2.2.

(c)        Return to Eligible Class - If a participant becomes an inactive
participant, because he is no longer a member of the eligible class of
employees, but does not incur a break in service; such inactive participant
shall become an active participant immediately upon returning to the eligible
class of employees.  If such participant incurs a break in service, eligibility
shall be determined under the re-participation rules in Section 2.4(a) and (b)
above.

Article III - ALLOCATIONS TO PARTICIPANT ACCOUNTS

Section 3.1. - General Provisions

(a)        Maintenance of Participant Accounts - The plan administrator shall
maintain separate accounts covering each participant under the plan as herein
described.  Such accounts shall be increased by contributions, reallocation of
forfeitures (if any), investment income, and

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market value appreciation of the fund.  They shall be decreased by market value
depreciation of the fund, forfeiture of nonvested amounts, benefit payments,
withdrawals, and expenses.

(b)        Amount and Payment of Employer Contribution

(1)        Amount of Contribution - For each plan year, the employer
contribution to the plan shall be the amount that is determined under the
provisions of this Article and Section 6.9.  However, for any plan year with
respect to which employer contributions are applied to repay principal on a loan
made to the plan under Section 6.9, the total amount of employer contributions
shall not exceed 25% of the aggregate participant compensation for the plan
year.  The employer may contribute any amount in excess of the maximum for the
plan year, without limitation, for the purpose of paying interest on such loans.
Further, the employer contribution shall not exceed the maximum amount
deductible under Code section 404, subject to the provisions for a nondeductible
contribution without penalty as permitted under Code section 4972(c)(6).

The employer contributes to this plan on the conditions that its contribution is
not due to a mistake of fact and that the Internal Revenue Service will not
disallow the deduction for its contribution.  The trustee, upon written request
from the employer, shall return to the employer the amount of the employer’s
contribution made due to a mistake of fact or the amount of the employer’s
contribution disallowed as a deduction under Code section 404.  The trustee
shall not return any portion of the employer’s contribution under the provisions
of this paragraph more than one year after the earlier of: (A) The date on which
the employer made the contribution due to a mistake of fact; or (B) The time of
disallowance of the contribution as a deduction, and then, only to the extent of
the disallowance.  The trustee will not increase the amount of the employer
contribution returnable under this Section for any earnings attributable to the
contribution, but the trustee will decrease the employer contribution returnable
for any losses attributable to it.  The trustee may require the employer to
furnish whatever evidence it deems necessary to confirm that the amount the
employer has requested be returned is properly returnable under ERISA.

(2)        Payment of Contribution - The employer shall make its contribution to
the plan in cash or corporate stock within the time prescribed by the Code or
applicable Treasury regulations.  Subject to the consent of the trustee, the
employer may make its contribution in other property, provided the contribution
is discretionary and the property contributed is unencumbered.  Corporate stock
and other property will be valued at fair market value at the time of actual
contribution.  Notwithstanding the preceding, the employer shall make its
contribution solely in cash if it is obligated to contribute a specified dollar
amount either by the terms of a loan described in Section 6.9 or an action of
its board of directors.

(c)        Limitations and Conditions - Notwithstanding the allocation
procedures set forth in this Article, the allocations otherwise contributable to
participants’ accounts under this plan shall be limited or reduced as provided
in Section 5.1.

In any limitation year in which the allocations otherwise contributable to a
participant’s account under this plan would exceed the maximum permissible
amount as defined in Section 5.1 due to a contribution otherwise allocable to
the participant under the Peoples Security Bank

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401 (k) Profit Sharing Plan that the employer also sponsors, the allocation
shall first be limited or reduced under such other sponsored plan so that the
annual additions for the limitation year will equal the maximum permissible
amount.

Section 3.2. - Employer Contributions

(a)        Amount of Contribution - The employer shall determine, in its sole
discretion, the amount of employer contribution to be made to the plan each
year; provided, however, that the employer shall contribute such amount as may
be required for restoration of a forfeited amount under Section 4.2.

(b)        Conditions for Allocations - A participant shall be eligible for an
allocation of the employer contribution and forfeitures as of an allocation
date, provided that he satisfies the following condition(s):

(1)        He completed at least 1,000 hours of service during the current plan
year unless his employment terminated during the plan year by reason of
retirement, disability, or death, except that the hours of service requirement
shall not apply with respect to any minimum top-heavy allocation as provided in
Section 5.4.

AND

(2)        He is employed by the employer on the last day of the plan year
unless his employment terminated during the plan year by reason of retirement,
disability, or death.

Notwithstanding the preceding, an otherwise eligible participant shall not
receive any allocation in a nonallocation year if he is prohibited from
receiving an allocation of corporate stock pursuant to Section 6.6(b).

(c)         (1)        Allocation Formula

The employer contribution and forfeitures for the plan year shall be allocated
to the employer contribution account of each eligible participant in the ratio
that such participant’s compensation bears to the compensation of all
participants.

(2)        Top-Heavy Plan Years

In any plan year in which this plan is top-heavy (as defined in Section
5.4(d)(2) when aggregated with the Peoples Security Bank 401 (k) Profit Sharing
Plan and the Peoples Security Bank and Trust Company Employees’ Pension Plan
that the employer also sponsors, the top-heavy minimum benefit requirement shall
be met under the Peoples Security Bank 401 (k) Profit Sharing Plan.

For such a plan year, the contribution on behalf of each participant who is a
non-key employee and who participates in the aggregated plans shall be increased
as necessary under such other sponsored defined contribution plan to equal 3% of
such participant’s compensation.

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If a participant only participates in this plan, the contributions and
forfeitures allocable to the employer contribution account shall be increased as
necessary for compliance with the top-heavy minimum benefit requirement.  The
total of the contributions and forfeitures allocated to such account for such a
participant shall not be less than an amount equal to 3% of his compensation or
the largest percentage of employee 401 (k) elective deferral contribution,
employer contribution, and forfeiture allocated under the aggregated plans on
behalf of any key employee for that year, whichever is less.

(3)        Compensation - For purposes of the allocation of the employer
contribution, compensation means compensation as defined in Section 1.2(a) and
(b) (subject to the limitations of Section 1.2(c)) for the plan year, but
limited to the employee’s compensation for the portion of the plan year in which
the employee actually is a member of the eligible class of employees as defined
in Section 2.2. However, for purposes of the top-heavy contribution,
compensation means compensation as defined in Section 5.1(c)(2), subject to the
limitations of Section 1.2(c).

Section 3.3. - Rollover/Transfer Contributions

Rollover and transfer contributions shall not be permitted under this plan and
no amount shall be credited to the rollover/transfer account.

Section 3.4. - Allocation of Investment Results

(a)        Corporate Stock Account - The corporate stock account of each
participant shall be credited as of each allocation date with forfeitures of
corporate stock and his allocable share of corporate stock (including fractional
shares) purchased and paid for by the plan or contributed in kind by the
employer. Stock dividends on corporate stock held in his corporate stock account
shall be credited to his corporate stock account when paid.

Corporate stock acquired by the plan with the proceeds of an exempt loan shall
be allocated to each participant’s corporate stock account upon release from the
unallocated corporate stock suspense account as provided in Section
6.9.  Corporate stock acquired with the proceeds of an exempt loan shall be an
asset of the trust fund and maintained in the unallocated corporate stock
suspense account.

(b)        Other Investments Account - As of each allocation date, prior to the
allocation of employer contributions and forfeitures, any earnings or losses
(net appreciation or net depreciation) of the trust fund shall be allocated in
the same proportion that each participant’s other investments account bears to
the total of all participants’ other investment accounts as of such date.  For
this purpose, each account balance shall be equal to the average balance for the
period commencing on the day following the prior accounting date and ending on
the current accounting date.

Cash dividends on corporate stock made after the first month of the plan year
shall not share in any earnings or losses of the trust fund for such
year.  However, the plan administrator may direct that cash dividends on
corporate stock be segregated into a separate account and invest such segregated
account in a federally insured savings account, certificate of deposit in a bank
or savings and loan association, money market certificate, or other short term
debt security

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acceptable to the trustee until such time as the dividends and any earnings or
losses thereon are: (1) applied to the payment of a loan in accordance with
Section 6.9(d); or (2) allocated to each participant’s other investment account
as of the plan year allocation date in accordance with the corporate stock held
in the participant’s corporate stock account and then distributed pursuant to
Section 4.3(c)(6) (with any allocable earnings or losses).  The dividend shall
be 100% vested, regardless of any vesting schedule applicable to the employer
contribution account.

Earnings or losses include the increase (or decrease) in the fair market value
of assets of the trust fund (other than corporate stock in the participants’
corporate stock accounts) since the preceding allocation date.  Earnings or
losses do not include the interest paid under any installment contract or loan
used for the purchase of corporate stock by the trust. Further, earnings and
losses do not include income received by the trust with respect to corporate
stock acquired with the proceeds of an exempt loan to the extent the income is
used to repay the loan.  At the discretion of the plan administrator, all such
income may be used to repay such loan with the exception of non-applicable
dividends as described in Section 6.9(d).

(c)        Directed Investment Account

(1)        Each qualified participant, for plan years beginning after December
31, 1986, may elect within 90 days after the close of each plan year during the
qualified election period to direct the trustee in writing as to the investment
of 25% of the total number of shares of corporate stock acquired by or
contributed to the plan after December 31, 1986 that have ever been allocated to
such qualified participant’s corporate stock account (reduced by the number of
shares of corporate stock previously invested pursuant to a prior election).  In
the case of the election year in which the participant can make his last
election, the preceding sentence shall be applied by substituting “50%” for
“25%.” For this purpose, a participant’s corporate stock account shall be
segregated into two accounts: (A) the Pre-1987 corporate stock account and (B)
the Post-1986 corporate stock account.  If the qualified participant elects to
direct the trustee as to the investment of his Post-1986 corporate stock
account, such direction shall be effective no later than 180 days after the
close of the plan year to which such direction applies.

(2)        For the purposes of this Section 3.4(c) the following definitions
shall apply:

(A)        Qualified participant means any participant or former participant who
has completed ten years of participation and has attained age 55.

(B)        Qualified election period means the six plan year period beginning
with the later of: (i) the first plan year in which the participant first became
a qualified participant, or (ii) the first plan year beginning after December
31, 1986.

(3)        If a qualified participant elects to direct the investment of his
Post-1986 corporate stock account, the trustee shall convert the designated
amount of corporate stock to its fair market value cash equivalent and shall
distribute such cash to the participant.  The participant shall be permitted to
elect to roll the cash to an eligible retirement plan.

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Article IV - PAYMENT OF PARTICIPANT ACCOUNTS

Section 4.1. - Vesting Service Rules

(a)        Vesting Year of Service means a vesting computation period during
which the employee completes at least 1,000 hours of service with the
employer.  All of an employee’s years of service with the employer shall be
counted to determine the nonforfeitable percentage in the employee’s account
balance derived from employer contributions, except:

(1)        Years of service disregarded under the break in service rules in
Section 4.1(d) below.  (Post-ERISA break in service rules)

(2)        Years of service before the effective date of ERISA if such service
would have been disregarded under the break in service rules of the prior plan
in effect from time to time before such date.  For this purpose, break in
service rules are rules that result in the loss of prior vesting or benefit
accruals, or that deny an employee eligibility to participate, by reason of
separation or failure to complete a required period of service within a
specified period of time. (Pre-ERISA break in service rules)

 

(b)        One Year Break in Service means for the purposes of this Article IV a
vesting computation period during which the employee or former employee does not
complete more than 500 hours of service with the employer.

(c)        Vesting Computation Period means the 12-consecutive month period
coinciding with the plan year.

(d)        Break in Service Rules

 

(1)        Vested Participant - A former participant who had a nonforfeitable
right to all or a portion of his account balance derived from employer
contributions at the time of his termination from service shall retain credit
for all vesting years of service prior to a break in service as that term is
defined in Section 4.1(b).

(2)        Nonvested Participant or Employee - In the case of a former
participant or employee who did not have any nonforfeitable right to his account
balance derived from employer contributions at the time of his termination from
service, years of service before a period of consecutive one-year breaks in
service shall not be taken into account in computing service if the number of
consecutive one-year breaks in service in such period equals or exceeds the
greater of 5 or the aggregate number of years of service before such breaks in
service.  Such aggregate number of years of service shall not include any years
of service disregarded under the preceding sentence by reason of prior breaks in
service.

(3)        Vesting for Pre-Break and Post-Break Accounts -  In the case of a
participant or employee who has 5 or more consecutive one-year breaks in
service, all years of service after such breaks in service shall be disregarded
for the purpose of vesting the employer-derived account balance that accrued
before such breaks in service.  Whether or not such pre-break service counts in
vesting the post-break employer-derived account balance shall be determined
according to the rules set forth in Section 4.1(d)(1) and (2) above.  Separate
accounts

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shall be maintained for the participant’s pre- break and post-break
employer-derived account balances.  All accounts shall share in the investment
earnings and losses of the fund.

Section 4.2. - Vesting of Participant Accounts (a) Determination of Vesting

(1)        Normal Retirement - An employee’s right to his account balance shall
be 100% vested and nonforfeitable upon the attainment of age 65, the normal
retirement age.  The vesting of an inactive participant who terminates
employment prior to normal retirement age shall remain subject to the provisions
of the vesting schedule following attainment of such specified
age.  Distributions shall be administered in accordance with termination from
employment provisions of Section 4.3(a)(3).

(2)        Late Retirement - If a participant remains employed after his normal
retirement age, his account balance shall remain 100% vested and
nonforfeitable.  Such participant shall continue to receive allocations to his
account as he did before his normal retirement age.

(3)        Early Retirement - In the case of a participant who has attained age
62 before his normal retirement age, the participant’s right to his account
balance shall be 100% vested and nonforfeitable.  Such participant may retire
before his normal retirement age without the consent of the employer and receive
payment of benefits from the plan.  If a participant separates from service
before satisfying the age requirement for early retirement, the participant
shall be entitled to elect an early retirement benefit upon satisfaction of such
age requirement.

(4)        Disability - If a participant separates from service due to
disability, such participant’s right to his account balance as of his date of
disability shall be 100% vested and nonforfeitable.  Disability means the
participant has been determined by the Social Security Administration to be
eligible for either full or partial Social Security disability benefits.

(5)         (A)        Death - In the event of the death of a participant who
has an accrued benefit under the plan (whether or not he is an active
participant), 100% of the participant’s account balance as of the date of death
shall be paid to his surviving spouse; except that, if there is no surviving
spouse, or if the surviving spouse has already consented in a manner that is (or
conforms to) a qualified election under the joint and survivor annuity
provisions of Code section 417(a) and regulations issued pursuant thereto and as
set forth in Section 5.2, then such balance shall be paid to the participant’s
designated beneficiary.  The payment options available to the beneficiary shall
be those payment options available to the participant under Section 4.3(b),
subject to any restriction created by the participant through the beneficiary
designation form.

(B)        Beneficiary Designation - Subject to the spousal consent requirements
of Section 5.2, the participant shall have the right to designate his
beneficiaries, including a contingent death beneficiary, and shall have the
right at any time to change such beneficiaries.  The designation shall be made
in writing on a form signed by the participant and supplied by and filed with
the plan administrator.  If the participant fails to designate a beneficiary, or
if the designated person or persons predecease the participant, “beneficiary”
shall mean the spouse, children, parents, siblings (by the whole blood or
adoption), or estate of the

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participant, in the order listed.  For this purpose, the terms children,
parents, and siblings shall exclude step relationships.

In the absence of a beneficiary designation duly filed with the plan
administrator by a designated beneficiary, if a designated beneficiary dies
after the participant has died but before the plan has commenced distribution to
the designated beneficiary, the plan shall be administered as set forth in this
paragraph.  The death benefit will be paid to the designated beneficiary’s
estate in one lump sum.  If the deceased designated beneficiary was not the
participant’s surviving spouse, distribution will be completed by December 31 of
the fifth year following the participant’s date of death.  If the deceased
designated beneficiary was the participant’s surviving spouse, distribution will
be completed by December 31 of the fifth year following the beneficiary’s date
of death.

For purposes of this Section 4.2(a)(5), if a spouse or beneficiary of the
participant dies simultaneously with the participant, the participant shall be
deemed to be the survivor and to have died subsequent to such spouse or
beneficiary.  Likewise, if a beneficiary named by a designated beneficiary dies
simultaneously with a designated beneficiary, the designated beneficiary shall
be deemed to be the survivor and to have died subsequent to the beneficiary
named by the designated beneficiary.

If a participant completes or has completed a beneficiary designation form in
which the participant designates his spouse as the beneficiary and the
participant and such spouse are legally divorced subsequent to the date of such
designation; then, the designation shall be administered as if such spouse had
predeceased the participant unless the participant, subsequent to the legal
divorce, reaffirms the designation by completing a new beneficiary designation
form.

(6)        Termination From Service

(A)        If a portion of a participant’s account is forfeited, corporate stock
allocated to the participant’s corporate stock account must be forfeited only
after any other investment allocable to the participant has been depleted.  If
interest in more than one class of corporate stock has been allocated to a
participant’s account, the participant must be treated as forfeiting the same
proportion of each such class.

(B)        If a participant separates from the service of the employer other
than by retirement, disability, or death, his vested interest in his employer
contribution account shall be equal to the account balance multiplied by the
vesting percentage determined based on his vesting years of service as follows:

 

 

 

Years of Service

    

Vesting Percentage

0 Year

 

0%

1

 

20%

2

 

40%

3

 

60%

4

 

80%

5 or More Years

 

100%

 

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(b)        Forfeitures

(1)        Time of Forfeiture - If a participant terminates employment before
his account balance derived from employer contributions is fully vested, the
nonvested portion of his account shall be forfeited on the earlier of:

(A)        The last day of the vesting computation period in which the
participant first incurs 5 consecutive one-year breaks in service, or

(B)        The date the participant receives his entire vested accrued benefit.

(2)        Cashout Distributions and Restoration

(A)        Cashout Distribution - If an employee terminates service and the
value of his vested account balance derived from employer and employee
contributions is not greater than $1,000, the employee shall receive a
distribution of the value of the entire vested portion of such account balance
and the nonvested portion will be treated as a forfeiture.  If an employee would
have received a distribution under the preceding sentence but for the fact that
the employee’s vested account balance exceeded $1,000 when the employee
terminated service and if at a later time such account balance is reduced such
that it is not greater than $1,000, the employee will receive a distribution of
such account balance and the nonvested portion will be treated as a forfeiture.
For purposes of this section, if the value of an employee’s vested account
balance is zero, he shall be deemed to have received a distribution of such
vested account balance.  For the purpose of determining the value of a
participant’s vested account balance, prior distributions shall be disregarded
if distributions have not commenced under an optional form of payment described
in Section 4.3.

Effective for distributions made before March 28, 2005, if an employee
terminated service and the value of his vested account balance derived from
employer and employee contributions was not greater than $5,000, the employee
received a distribution of the value of the entire vested portion of such
account balance and the nonvested portion was treated as a forfeiture.

If an employee terminates service and elects, in accordance with the
requirements of Section 4.3, to receive the value of his vested account balance,
the nonvested portion shall be treated as a forfeiture as of the date of
distribution.  If the employee elects to have distributed less than the entire
vested portion of the account balance derived from employer contributions, the
part of the nonvested portion that will be treated as a forfeiture is the total
nonvested portion multiplied by a fraction, the numerator of which is the amount
of the distribution attributable to employer contributions and the denominator
of which is the total value of the vested employer-derived account balance.

(B)        Restoration of Accounts - If an employee receives a cashout
distribution pursuant to this section and resumes employment covered under this
plan before he incurs 5 consecutive one- year breaks in service, his
employer-derived account balance shall be restored to the amount on the date of
distribution, if he repays to the plan the full amount of the distribution
attributable to employer contributions before the earlier of 5 years after the
first date on which he is subsequently re-employed by the employer, or the date
he incurs 5 consecutive

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one-year breaks in service following the date of the distribution. If an
employee is deemed to receive a distribution pursuant to this Section 4.2(b)(2),
and he resumes employment covered under this plan before he incurs 5 consecutive
one-year breaks in service, upon the reemployment of such employee his
employer-derived account balance will be restored to the amount on the date of
such deemed distribution.

Any amount required to restore such forfeitures shall be deducted from
forfeitures occurring in the plan year of restoration.  If forfeitures are
insufficient for the restoration, the employer may make a contribution to the
plan for such plan year to satisfy the restoration.  However, by the end of the
plan year following the plan year of restoration, sufficient forfeitures or
employer contributions shall be credited to the account to satisfy the
restoration.

(c)        Disposition of Forfeitures - Forfeitures from employer contribution
account shall be reallocated among the eligible active participants at the end
of the plan year in which such forfeitures occur in accordance with the
allocation procedures set forth in Section 3.2.  With respect to the underlying
allocation and reallocation of assets, the participant’s corporate stock account
shall only be forfeited after the participant’s balance in the other investment
account has been exhausted.  If interests in more than one class of corporate
stock have been allocated to the participant’s account, the participant shall be
treated as forfeiting the same proportion of each such class.

(d)        Unclaimed Benefits

(1)        Forfeiture - The plan does not require the trustee or the plan
administrator to search for, or to ascertain the whereabouts of, any participant
or beneficiary before a distribution is required under the provisions of Section
5.3.  At the time the participant’s or beneficiary’s benefit becomes
distributable under the plan, the plan administrator, by certified or registered
mail addressed to his last known address of record, shall notify any participant
or beneficiary that he is entitled to a distribution under this plan.  If the
participant or beneficiary fails to claim his distributive share or make his
whereabouts known in writing to the plan administrator within twelve months from
the date of mailing of the notice, the plan administrator shall treat the
participant’s or beneficiary’s unclaimed payable accrued benefit as forfeited
and shall reallocate such forfeiture in accordance with Section 4.2(c).  A
forfeiture under this paragraph shall occur at the end of the notice period or,
if later, the earliest date applicable Treasury regulations would permit the
forfeiture.  These forfeiture provisions apply solely to the participant’s or
beneficiary’s accrued benefit derived from employer contributions.

(2)        Restoration - If a participant or beneficiary who has incurred a
forfeiture of his accrued benefit under the provisions of this Section 4.2(d)
makes a claim, at any time, for his forfeited accrued benefit, the plan
administrator shall restore the participant’s or beneficiary’s forfeited accrued
benefit to the same dollar amount as the dollar amount of the accrued benefit
forfeited, unadjusted for any gains or losses occurring after the date of the
forfeiture.  During the plan year in which the participant or beneficiary makes
the claim, the plan administrator shall make the restoration from forfeitures
occurring in that plan year.  If forfeitures are insufficient for the
restoration, the employer shall make a contribution to the plan to satisfy the
restoration.  The plan administrator shall direct the trustee to distribute the
participant’s or beneficiary’s

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restored accrued benefit to him not later than 60 days after the close of the
plan year in which the plan administrator restores the forfeited accrued
benefit.

Section 4.3. - Payment of Participant Accounts

(a)        Time of Payment

(1)        Commencement of Benefits - Unless the participant elects otherwise,
distribution of benefits shall begin no later than the 60th day after the latest
of the close of the plan year in which:

(A)        The participant attains age 65 (or normal retirement age, if
earlier);

(B)        Occurs the 10th anniversary of the year in which the participant
commenced participation in the plan; or

(C)        the participant terminates service with the employer, (i.e. late
retirement).

 

(2)        Payment Upon Retirement, Disability, or Death -  Subject to the
provisions set forth in Section 4.3(a)(1), in the Joint and Survivor
Requirements of Section 5.2, and in the Distribution Requirements of Section
5.3, if the participant terminates employment due to retirement, disability, or
death, his account shall be paid as soon as administratively possible after the
occurrence of the event creating the right to a distribution.

(3)        Payment Upon Other Termination of Employment - Subject to the
provisions set forth in Section 4.3(a)(1) and in the Distribution Requirements
of Section 5.3, if the participant terminates employment other than by
retirement, disability, or death, his account shall be paid as soon as
administratively possible after the accounting date following the date of
severance of employment. However, no distribution shall include any corporate
stock acquired with the proceeds of an exempt loan until the close of the plan
year in which such loan is repaid in full.

(4)        Notwithstanding the foregoing, the failure of a participant (or
spouse where the spouse’s consent is required) to consent to a distribution
while a benefit is immediately distributable, within the meaning of Section
5.2(a), shall be deemed to be an election to defer commencement of payment of
any benefit sufficient to satisfy this section.

(b)        Period for Distribution of Benefits

(1)        The plan administrator, pursuant to the written election of the
participant (or if no election has been made prior to the participant’s death,
by his beneficiary), shall direct the trustee to distribute to a participant or
his beneficiary any amount to which he is entitled under the plan in one of the
following methods.  If the distribution exceeds $5,000, to the extent it is
attributable to corporate stock, the election shall be subject to Section
4.3(b)(2).

If a distribution is required under the Distribution Requirements of Section
5.3, the participant fails to elect a form of payment, and the vested balance of
the account exceeds

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$5,000, the trustee shall pay the benefit in installment payments over the
period described in Section 4.3(b)(2).  However if no portion of the
distribution is attributable to corporate stock, the trustee shall pay the
benefit in installment payments that meet the requirements of Section 5.3 over
the joint life and last survivor expectancy of the participant and his
designated beneficiary.  If the vested balance of the account(s) does not exceed
$5,000, the trustee shall distribute the entire account balance in a lump sum.

(A)        A Lump Sum Payment - A lump sum benefit payment.  If the vested
accrued benefit is no more than $5,000, this shall be the sole payment
option.  Vested accrued benefits not in excess of $1,000 shall automatically be
paid in a lump sum.

(B)        Installment Payments over a period of years that meets the
Distribution Requirements of Section 5.3 in quarterly installments.

(2)        Unless the participant elects in writing a longer distribution
period, distributions to a participant or his beneficiary attributable to
corporate stock shall be in substantially equal annual installments over a
period not longer than five years.  In the case of a participant with an account
balance attributable to corporate stock in excess of $1,070,000, the 5-year
period shall be extended one additional year (but not more than five additional
years) for each $210,000 or fraction thereof by which such balance exceeds
$1,070,000.  These dollar limits shall be adjusted at the same time and in the
same manner as provided in Code section 415(d).

(c)        General Payment Provisions

(1)        Any part of a participant’s benefit that is retained in the plan
after the allocation date on which his participation ends will continue to be
treated as a corporate stock account, other investment account, or directed
investment account subject to Section 4.2(a)(6)(A).  However, no further
employer contributions or forfeitures will be credited.

(2)        All distributions due to be made under this plan shall be made on the
basis of the amount to the credit of the participant as of the accounting date
coincident with or immediately preceding the occurrence of the event calling for
a distribution.  If a distributable event occurs after an allocation date and
before allocations have been made to the account of the participant, the
distribution shall also include the amounts allocable to the account as of such
allocation date.

(3)        If any person entitled to receive benefits hereunder is physically or
mentally incapable of receiving or acknowledging receipt thereof, and if a legal
guardian or power of attorney has been appointed for him, the plan administrator
may direct the benefit payment to be made to such legal representative. The plan
administrator may cause benefits to be paid to any other individual recognized
by the state law under which the plan trust has been established.

In the event a distribution is to be made to a minor beneficiary, then the plan
administrator may direct that such distribution be paid to the legal guardian,
or if none, to a parent of such beneficiary or a responsible adult with whom the
beneficiary maintains his residence, or to the custodian for such beneficiary
under the Uniform Gift to Minors Act or the

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Gift to Minors Act, if such is permitted by the laws of the state in which said
beneficiary resides.  Such a payment to the legal guardian, custodian or parent
of a minor beneficiary shall fully discharge the trustee, employer, plan
administrator, and plan from further liability on account thereof.

(4)        Each optional form of benefit provided under the plan shall be made
available to all participants on a nondiscriminatory basis.  The plan may not
retroactively reduce or eliminate optional forms of benefits and any other Code
section 411(d)(6) protected benefits, except as provided in Regulation section
1.411(d)-4, Q&A-2(b) and in other relief granted statutorily or by the
Commissioner of Internal Revenue.

(5)        The participant’s election of a form of benefit payment shall be
irrevocable as of the annuity starting date, subject to the notice requirements
contained in Section 4.3(e).

(6)        Notwithstanding anything herein to the contrary if the board of
directors of the corporation acting in a nondiscriminatory manner shall so
direct, cash dividends on shares of corporate stock shall be paid directly in
cash to the participants in the plan or such dividends shall be paid to the plan
and distributed in cash to participants within 90 days after the close of the
plan year in which the dividend is paid.  In the absence of any direction from
the board of directors of the corporation, cash dividends in corporate stock
shall be paid to the plan and allocated to participants’ accounts.

(d)        Eligible Rollover Distributions

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.

(1)        Eligible Rollover Distribution - An eligible rollover distribution is
any distribution of all or any portion of the balance to the credit of the
distributee, except that an eligible rollover distribution does not include: 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 section 401(a)(9) including any portion of such distribution
that is not includable in gross income (determined without regard to the
exclusion for net unrealized appreciation with respect to employer securities);
a dividend distributed from the plan; any hardship withdrawal; and any other
distribution(s) that is reasonably expected to total less than $200 during a
year.

A portion of a distribution shall not fail to be an eligible rollover
distribution merely because the portion consists of after-tax employee
contributions that are not includible in gross income.  However, such portion
may be transferred only to: (A) a traditional individual retirement account or
annuity described in Code section 408(a) or (b) (traditional IRA) or a Roth
individual retirement account or annuity described in Code section 408A (Roth
IRA); or (B) a qualified plan or an annuity contract described in Code section
401 (a) and 403(b), respectively,

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that agrees to separately account for amounts so transferred (and earnings
thereon), including separately accounting for the portion of such distribution
that is includible in gross income and the portion of such distribution that is
not so includible.

(2)        Eligible Retirement Plan - An eligible retirement plan is a
traditional IRA, a Roth IRA, an annuity plan described in Code section 403(a),
an annuity contract described in Code section 403(b), a qualified plan described
in Code section 401 (a), that accepts the distributee’s eligible rollover
distribution, or an eligible plan under Code section 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 that agrees to separately
account for amounts transferred into such plan from this plan.  The definition
of eligible retirement plan shall also apply in the case of a distribution to a
surviving spouse, or to a spouse or former spouse who is the alternate payee
under a qualified domestic relations order, as defined in Code section 414(p).

If any portion of an eligible rollover distribution is attributable to payments
or distributions from a designated Roth account, an eligible retirement plan
with respect to such portion shall include only a designated Roth account or a
Roth IRA.

(3)        Distributee - A distributee includes an employee or former
employee.  The employee’s or former employee’s surviving spouse and the
employee’s or former employee’s spouse or former spouse who is the alternate
payee under a qualified domestic relations order, as defined in Code section
414(p), are distributees with regard to the interest of the spouse or former
spouse.  For distributions after December 31, 2006, a distributee shall include
a nonspouse beneficiary but only with respect to a direct transfer to an
inherited traditional or Roth IRA that is established on his behalf for the
purpose of receiving the distribution.

(4)        Direct Rollover - A direct rollover is a payment by the plan to the
eligible retirement plan specified by the distributee.

(e)        Payment Election Procedures

As described in Section 5.2(a), an account balance in excess of $1,000 shall not
be immediately distributed without the consent of the participant.  The
participant shall receive the notice required under Regulation section
1.411(a)-11(c) no less than 30 days and no more than 180 days before the annuity
starting date with respect to the distribution.  The written explanation shall
include a description of the consequences of failing to defer receipt of the
distribution.  For any distribution in excess of $200, the plan administrator
shall give the participant notice of his eligible rollover distribution
rights.  The participant shall receive such notice in the same time period as
the 411 notice is required to be provided.  If a distribution is one to which
Code sections 401(a)(11) and 417 do not apply, such distribution may commence
less than 30 days after the 411 notice is given, provided that:

(1)        The plan administrator clearly informs the participant that the
participant has a right to a period of at least 30 days after receiving the
notice to consider the decision of whether or not to elect a distribution (and,
if applicable, a particular distribution option), and

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(2)        The participant, after receiving the notice, affirmatively elects a
distribution.

(f)        Form of Distribution

(1)        Distribution of a participant’s benefit may be made in cash or
corporate stock or both, provided, however, that if a participant or beneficiary
so demands, such benefit (other than corporate stock reinvested pursuant to
Section 3.4(c)) shall be distributed only in the form of corporate stock.  Prior
to making a distribution of benefits, the plan administrator shall advise the
participant or his beneficiary, in writing, of the right to demand that benefits
be distributed solely in corporate stock.  In the case of a cashout distribution
made pursuant to Section 4.2(b)(2)(A), the distribution shall be made in cash.

(2)        If a participant or beneficiary demands that benefits be distributed
solely in corporate stock, distribution of a participant’s benefit will be made
entirely in whole shares or other units of corporate stock.  If the corporate
stock consists of more than one class, the participant will receive
substantially the same proportion of each such class.  Any balance in a
participant’s other investments account will be applied to acquire for
distribution the maximum number of whole shares or other units of corporate
stock at the then fair market value.  Any fractional unit value unexpended will
be distributed in cash.

If corporate stock is not available for purchase by the trustee, then the
trustee shall hold such balance until corporate stock is acquired and then make
such distribution, subject to Sections 4.3(a)(1), 5.2 and 5.3.

(3)        The trustee shall make distribution from the trust only on
instructions from the plan administrator.

(4)        Put Option - Shares of corporate stock are currently publicly traded
securities.  In the event the securities cease to be publicly traded or become
subject to certain restrictions so that the securities are not freely tradable,
then the employer will honor a put option for such securities. The employer’s
obligation to purchase distributed corporate stock shall be as described in
Section 5.5(e).

(5)        Right of First Refusal - There is no right of first refusal at this
time with respect to the corporate stock.

Section 4.4. - In-Service Payments

(a)        Withdrawals - No payments other than cash dividends on shares of
corporate stock paid pursuant to Section 3.4(a) and distributions pursuant to an
election under Section 3.4(c) shall be made before separation from service.

(b)        Participant Loans - No participant loans shall be permitted under
this plan.

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Section 4.5. - Distributions under Domestic Relations Orders

Nothing contained in this plan prevents the trustee, in accordance with the
direction of the plan administrator, from complying with the provisions of a
qualified domestic relations order (as defined in Code section 414(p)).

This plan specifically permits distribution to an alternate payee under a
qualified domestic relations order at any time, irrespective of whether the
participant has attained his earliest retirement age (as defined under Code
section 414(p)) under the plan.  A distribution to an alternate payee prior to
the participant’s attainment of earliest retirement age is available only if the
order specifies distribution at that time or permits an agreement between the
plan and the alternate payee to authorize an earlier distribution.  If the
present value of the alternate payee’s benefits under the plan exceeds $5,000
and the order requires, the alternate payee must consent to any distribution
occurring prior to the participant’s attainment of earliest retirement age.

Nothing in this Section gives a participant a right to receive distribution at a
time otherwise not permitted under the plan nor does it permit the alternate
payee to receive a form of payment not otherwise permitted under the plan.

The plan administrator shall establish reasonable procedures to determine the
qualified status of a domestic relations order.  Upon receiving a domestic
relations order, the plan administrator promptly will notify the participant and
any alternate payee named in the order, in writing, of the receipt of the order
and the plan’s procedures for determining the qualified status of the
order.  Within a reasonable period of time after receiving the domestic
relations order, the plan administrator shall determine the qualified status of
the order and shall notify the participant and each alternate payee, in writing,
of his determination.  The plan administrator shall provide notice under this
paragraph by mailing to the individual’s address specified in the domestic
relations order, or in a manner consistent with Department of Labor regulations.

If any portion of the participant’s nonforfeitable accrued benefit is payable
during the period the plan administrator is making his determination of the
qualified status of the domestic relations order, the plan administrator shall
make a separate accounting of the amounts payable.  If the plan administrator
determines the order is a qualified domestic relations order within 18 months of
the date amounts first are payable following receipt of the order, it shall
direct the trustee to distribute the payable amounts in accordance with the
order.  If the plan administrator does not make his determination of the
qualified status of the order within the 18-month determination period, it shall
direct the trustee to distribute the payable amounts in the manner the plan
would distribute if the order did not exist and shall apply the order
prospectively if it later determines the order is a qualified domestic relations
order.

Article V - ADDITIONAL QUALIFICATION RULES

Section 5.1. - Limitations on Allocations under Code Section 415

(a)        Single Plan Limitations

(1)        If the participant does not participate in, and has never
participated in another qualified plan maintained by the employer, or a welfare
benefit fund (as defined in Code

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section 419(e)) maintained by the employer, or an individual medical account (as
defined in Code section 415(l)(2)) maintained by the employer, or a simplified
employee pension (as defined in Code section 408(k)) maintained by the employer,
that provides an annual addition as defined in Section 5.1(c)(1), the amount of
annual additions that may be credited to the participant’s account for any
limitation year will not exceed the lesser of the maximum permissible amount or
any other limitation contained in this plan.  If the employer contribution that
would otherwise be contributed or allocated to the participant’s account would
cause the annual additions for the limitation year to exceed the maximum
permissible amount, the amount contributed or allocated will be reduced so that
the annual additions for the limitation year will equal the maximum permissible
amount.

(2)        Prior to determining the participant’s actual compensation for the
limitation year, the employer may determine the maximum permissible amount for a
participant on the basis of a reasonable estimation of the participant’s
compensation for the limitation year, uniformly determined for all participants
similarly situated.

(3)        As soon as is administratively feasible after the end of the
limitation year, the maximum permissible amount for the limitation year will be
determined on the basis of the participant’s actual compensation for the
limitation year.

(4)        If a participant elects to make employee nondeductible contributions
or elective deferrals that together with any contribution the employer is
obligated to make under the terms of this plan (including pursuant to any
published discretionary contribution) would otherwise cause the annual additions
for the limitation year to exceed the maximum permissible amount, the
contribution election of the participant shall be limited before any employer
contribution is reduced so that the annual additions for the limitation year
will equal the maximum permissible amount.

(b)        Combined Limitations - Other Defined Contribution Plan

(1)        This Section 5.1(b) applies if, in addition to this plan, the
participant is covered under another qualified defined contribution plan
maintained by the employer, a welfare benefit fund maintained by the employer,
an individual medical account maintained by the employer, or a simplified
employee pension maintained by the employer, that provides an annual addition as
defined in Section 5.1(c)(1), during any limitation year.  The annual additions
that may be credited to a participant’s account under this plan for any such
limitation year will not exceed the maximum permissible amount reduced by the
annual additions credited to a participant’s account under the other qualified
defined contribution plans, welfare benefit funds, individual medical accounts,
and simplified employee pensions for the same limitation year.  If the annual
additions with respect to the participant under other qualified defined
contribution plans, welfare benefit funds, individual medical accounts, and
simplified employee pensions maintained by the employer are less than the
maximum permissible amount and the employer contribution that would otherwise be
contributed or allocated to the participant’s account under this plan would
cause the annual additions for the limitation year to exceed this limitation,
the amount contributed or allocated will be reduced so that the annual additions
under all such plans and funds for the limitation year will equal the maximum
permissible amount.  If the annual additions with respect to the participant
under such other qualified defined contribution plans,

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welfare benefit funds, individual medical accounts, and simplified employee
pensions in the aggregate are equal to or greater than the maximum permissible
amount, no amount will be contributed or allocated to the participant’s account
under this plan for the limitation year.

(2)        Prior to determining the participant’s actual compensation for the
limitation year, the employer may determine the maximum permissible amount for a
participant in the manner described in Section 5.1(a)(2).

(3)        As soon as is administratively feasible after the end of the
limitation year, the maximum permissible amount for the limitation year will be
determined on the basis of the participant’s actual compensation for the
limitation year.

(4)        If, pursuant to Section 5.1(b)(3) or as a result of the allocation of
forfeitures, a participant’s annual additions under this plan and such other
plans would result in an excess amount for a limitation year, the excess amount
will be deemed to consist of the annual additions last allocated, except that
annual additions attributable to a simplified employee pension will be deemed to
have been allocated first, followed by annual additions to a welfare benefit
fund or individual medical account, regardless of the actual allocation date.

(5)        If an allocation date of this plan coincides with an allocation date
of another plan and the employee or employer contribution that would otherwise
be contributed or allocated to a participant’s account under the plans would
cause the annual additions for the limitation year to exceed the maximum
permissible amount, Section 3.1(c) shall control which contribution or
allocation will be reduced so that the annual additions for the limitation year
will equal the maximum permissible amount.

(c)        Definitions (Code Section 415 Limitations)

(1)        Annual Additions - The sum of the following amounts credited to a
participant’s account for the limitation year: (A) employer contributions; (B)
employee contributions (excluding catch-up contributions made in accordance with
Code section 414(v)); (C) forfeitures; (D) amounts allocated to an individual
medical account (as defined in Code section 415(l)(2)), that is part of a
pension or annuity plan maintained by the employer are treated as annual
additions to a defined contribution plan; and (E) allocations under a simplified
employee pension.  Also, amounts derived from contributions paid or accrued that
are attributable to postretirement medical benefits allocated to the separate
account of a key employee (as defined in Code section 419A(d)(3)) under a
welfare benefit fund (as defined in Code section 419(e)) maintained by the
employer are treated as annual additions to a defined contribution plan.

For this purpose, any excess amount applied under Section 5.1(a)(4) or (b)(6) in
the limitation year to increase the accounts of participants who did not have an
excess amount or to reduce employer contributions will be considered annual
additions for such limitation year.

Restorative payments allocated to a participant’s account including restorative
payments made pursuant to Section 4.2(b)(2)(B) and payments made to restore
losses to the plan resulting from actions (or a failure to act) by a fiduciary
for which there is a reasonable risk of liability

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under ERISA or under other applicable federal or state law (where similarly
situated participants are treated similarly) shall not give rise to an annual
addition for any limitation year.

To the extent the employer is a C corporation, annual additions shall hot
include forfeitures of corporate stock that were purchased with the proceeds of
an exempt loan nor shall they include employer contributions applied to the
payment of interest on an exempt loan and charged against a participant’s
account if no more than one-third of the employer contribution for the
limitation year is allocated to the account of highly compensated
employees.  Further, annual additions shall not include dividends received by
the plan with respect to corporate stock as such proceeds constitute earnings on
a plan asset and are allocable as such.

Annual additions may be calculated with respect to employer contributions of
both principal and interest used to repay an exempt loan; however, if the amount
would be less, annual additions shall be determined using the fair market value
of corporate stock released from the suspense account on account of the exempt
loan repayment and allocated to participants for the limitation year.

(2)        Compensation - A participant’s earned income and any earnings
reportable as W-2 wages for federal income tax withholding purposes that are
paid by the employer.  W-2 wages means wages as defined in Code section 3401 (a)
but determined without regard to any rules that limit the remuneration included
in wages based on the nature or location of the employment or the services
performed (such as the exception for agricultural labor in Code section
3401(a)(2)).

For purposes of applying the limitations of this Section 5.1, compensation for a
limitation year is the compensation actually paid or includable in gross income
during such limitation year.  Compensation for a limitation year shall include
amounts earned but not paid during the limitation year solely because of the
timing of pay periods and pay dates, provided the amounts are paid during the
first few weeks of the next limitation year, the amounts are included on a
uniform and consistent basis with respect to all similarly situated employees,
and no compensation is included in more than one limitation year.

Back pay, within the meaning of Regulation section 1.415(c)-2(g)(8), shall be
treated as compensation for the limitation year to which the back pay relates to
the extent the back pay represents wages and compensation that would otherwise
be included under this definition.

For limitation years beginning after December 31, 2008, compensation for a
limitation year shall include amounts paid as differential wages to a
participant on qualified military service leave of more than 30 days and
otherwise meeting the requirements of Code section 3401 (h)(2).

Compensation in excess of the limitations of Section 1.2(c) shall not be taken
into account.  In order to be taken into account for a limitation year,
compensation must be paid or treated as paid prior to severance from employment
with the employer.  Effective for limitation years beginning on or after July 1,
2007, an includable payment shall be treated as paid prior to severance from
employment if it is paid by the later of 2/4 months after severance or the last
day of the limitation year that includes the severance date.  For this purpose,
includable payments are those that absent the severance would have been paid and
are regular compensation for services

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during regular working hours or outside working hours (such as overtime or shift
differentials), commissions, bonuses, or other similar compensation.  Includable
payments shall also include accrued sick, vacation, or other leave if such
payments would have been included in compensation as defined in Section 1.2 if
they were paid prior to the employee’s severance from employment.

Compensation shall include elective contributions as defined in Section 1.2(a)
and elective contributions under a Code section 501(c)(18) plan.  Elective
contribution amounts under a cafeteria plan excludable under Code section 125
shall include any amounts not available to a participant in cash in lieu of
group health coverage solely because the participant is unable to certify that
he has other health coverage (deemed section 125 compensation).  Amounts are
deemed section 125 compensation only if the employer does not request or collect
information regarding the participant’s other health coverage as part of the
enrollment process for the health plan.

Notwithstanding the preceding, compensation for a participant who is permanently
and totally disabled (as defined in Code section 22(e)(3)) is the compensation
such participant would have received for the limitation year if the participant
had been paid at the rate of compensation paid immediately before becoming
permanently and totally disabled; such imputed compensation for the disabled
participant may be taken into account only if contributions made on behalf of
such participant are nonforfeitable when made.

(3)        Defined Contribution Dollar Limitation - $40,000, as adjusted under
Code section 415(d).

(4)        Employer - For purposes of this Section 5.1, employer shall mean the
employer as defined in Section 1.5(b) but including all members of a controlled
group of corporations as defined in Code section 414(b) as modified by Code
section 415(h) and all commonly controlled trades or businesses as defined in
Code section 414(c) as modified by Code section 415(h).

(5)        Excess Amount - The excess of the participant’s annual additions for
the limitation year over the maximum permissible amount.

(6)        Limitation Year - The 12-consecutive-month period defined in Section
1.3(f).  All qualified defined contribution plans maintained by the employer
must use the same limitation year.  If the limitation year is amended to a
different 12-consecutive-month period, the new limitation year must begin on a
date within the limitation year in which the amendment is made.

(7)        Maximum Permissible Amount - The maximum annual addition that may be
contributed or allocated to a participant’s account under the plan for any
limitation year shall not exceed the lesser of:

(A)        the defined contribution dollar limitation as defined in Section
5.1(c)(3); or

(B)        100% of the participant’s compensation for the limitation year.

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The compensation limitation referred to in (B) shall not apply to any
contribution for medical benefits after separation from service (within the
meaning of Code section 401 (h) or Code section 419A(f)(2)) that is otherwise
treated as an annual addition under Code section 415(l)(1) or 419A(d)(2).

If a short limitation year is created because of an amendment changing the
limitation year to a different 12-consecutive-month period, the maximum
permissible amount will not exceed the defined contribution dollar limitation
multiplied by the following fraction:

Number of months in the short limitation year
12

If the plan is terminated as of a date other than the last day of the limitation
year, the plan shall be deemed to have been amended to change its limitation
year and the maximum permissible amount shall be determined by prorating it for
the resulting short limitation year.

Section 5.2. - Joint and Survivor Annuity Requirements

No annuity form of payment is provided under Section 4.3(b) and no direct or
indirect transfer is accepted under Section 3.3 from a defined benefit plan,
money purchase pension plan (including a target benefit plan), stock bonus or
profit sharing plan that would otherwise have provided for a life annuity form
of payment to any participant; therefore, the joint and survivor annuity
requirements of Code section 401(a)(11) and 417 shall not apply to this plan,
except as provided in this Section 5.2.

(a)        Restrictions on Immediate Distributions - If the value of a
participant’s vested account balance derived from employer and employee
contributions exceeds $5,000, and the account balance is immediately
distributable, the participant (or where the participant has died, the
participant’s spouse) must consent to any distribution of such account
balance.  For the purpose of determining the value of a participant’s vested
account balance, prior distributions shall be disregarded if distributions have
not commenced under an optional form of payment described in Section 4.3.  The
consent of the participant (or the participant’s surviving spouse) shall be
obtained in writing within the 180-day period ending on the annuity starting
date.  The annuity starting date is the first day of the first period for which
an amount is paid in any form.  The plan administrator shall notify the
participant (or the participant’s surviving spouse) of the right to defer any
distribution until the participant’s account balance is no longer immediately
distributable and the consequences of failing to defer any distribution, as
required by Regulation section 1.417(a)(3)-1.  Such notification shall include a
general description of the material features, an explanation of the optional
forms of benefit available under the plan in a manner that would satisfy the
notice requirements of Code section 417(a)(3), and a description of the
consequences of failing to defer any distribution, and shall be provided no less
than 30 days and no more than 1,80 days prior to the annuity starting
date.  However, distribution may commence less than 30 days after the notice
described in the preceding sentence is given, provided the distribution is one
to which Code sections 401(a)(11) and 417 do not apply, the plan administrator
clearly informs the participant that the participant has a right to a period of
at least 30 days after receiving the notice to consider the decision of whether
or not to elect a distribution

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(and, if applicable, a particular distribution option), and the participant,
after receiving the notice, affirmatively elects a distribution.

Notwithstanding the preceding, effective for an account balance that is
immediately distributable on or after March 28, 2005, the participant (or his
surviving spouse) must consent to any distribution of such account balance in
excess of $1,000.

Neither the consent of the participant nor the participant’s spouse shall be
required to the extent that a distribution is required to satisfy Code section
401(a)(9) or section 415.  In addition, upon termination of this plan if the
plan does not offer an annuity option (purchased from a commercial provider) and
if the employer or any entity within the same controlled group as the employer
does not maintain another defined contribution plan, the participant’s account
balance will, without the participant’s consent, be distributed to the
participant.  However, if any entity within the same controlled group as the
employer maintains another defined contribution plan, the participant’s account
balance will be transferred, without the participant’s consent, to the other
plan if the participant does not consent to an immediate distribution.

An account balance is immediately distributable if any part of the account
balance could be distributed to the participant (or surviving spouse) before the
participant attains (or would have attained if not deceased) the later of normal
retirement age or age 62.

(b)        Safe Harbor Rules - This Section 5.2(b) shall apply to a participant
in this employee stock ownership plan.  This plan satisfies and shall continue
to satisfy the following conditions: (1) the participant cannot elect payments
in the form of a life annuity; and (2) on the death of a participant, the
participant’s vested account balance will be paid to the participant’s surviving
spouse, but if there is no surviving spouse, or if the surviving spouse has
consented in a manner conforming to a qualified election, then to the
participant’s designated beneficiary.  The surviving spouse may elect to have
distribution of the vested account balance commence within the 180-day period
following the date of the participant’s death.  The account balance shall be
adjusted for gains or losses occurring after the participant’s death in
accordance with the provisions of the plan governing the adjustment of account
balances for other types of distributions.

(1)        The participant may waive the spousal death benefit described in this
Section 5.2(b) at any time provided that no such waiver shall be effective
unless it satisfies the conditions of Section 5.2(c)(1) that would apply to the
participant’s waiver of the qualified preretirement survivor annuity.

(2)        For purposes of this Section 5.2(b), vested account balance shall
have the same meaning as provided in Section 5.2(c)(3).

(c)        Definitions (Code Section 417 Requirements)

(1)        Qualified Election - A waiver of a qualified preretirement survivor
annuity.  Any waiver of a qualified preretirement survivor annuity shall not be
effective unless: (a) the participant’s spouse consents in writing to the
election; (b) the election designates a specific beneficiary, including any
class of beneficiaries or any contingent beneficiaries, that may not be changed
without spousal consent (or the spouse expressly permits designations by the

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participant without any further spousal consent); (c) the spouse’s consent
acknowledges the effect of the election; and (d) the spouse’s consent is
witnessed by a plan representative or notary public.  If it is established to
the satisfaction of a plan representative that there is no spouse or that the
spouse cannot be located, a waiver will be deemed a qualified election.

Any consent by a spouse obtained under this provision (or establishment that the
consent of a spouse may not be obtained) shall be effective only with respect to
such spouse.  A consent that permits designations by the participant without any
requirement of further consent by such spouse must acknowledge that the spouse
has the right to limit consent to a specific beneficiary, and a specific form of
benefit where applicable, and that the spouse voluntarily elects to relinquish
either or both of such rights.  A revocation of a prior waiver may be made by a
participant without the consent of the spouse at any time before the
commencement of benefits.  The number of revocations shall not be limited.

(2)        Spouse (Surviving Spouse) - The spouse or surviving spouse of the
participant, provided that a former spouse will be treated as the spouse or
surviving spouse and a current spouse will not be treated as the spouse or
surviving spouse to the extent provided under a qualified domestic relations
order as described in Code section 414(p).

(3)        Vested Account Balance - The aggregate value of the participant’s
vested account balances derived from employer and employee contributions
(including rollovers), whether vested before or upon death, including the
proceeds of insurance contracts, if any, on the participant’s life.  The
provisions of this Section 5.2 shall apply to a participant who is vested in
amounts attributable to employer contributions, employee contributions, or both
at the time of death or distribution.

Section 5.3. - Distribution Requirements

Subject to Section 5.2 Joint and Survivor Annuity Requirements, the requirements
of this Section 5.3 shall apply to any distribution of a participant’s interest
and will take precedence over any inconsistent provisions of this plan.  All
distributions required under this Section 5.3 shall be determined and made in
accordance with the regulations under Code section 401(a)(9) and the minimum
distribution incidental benefit requirement of Code section 401 (a)(9)(G).

With respect to calendar year 2009, the provisions of Section 5.3 shall be
applied subject to Code section 401(a)(9)(H).  Although the plan administrator
shall calculate any required minimum distribution under Section 5.3 and pay it
separately to any participant or beneficiary commencing distribution during
2009, such recipient shall be eligible to deposit such amount in a qualified
employer plan or individual retirement account.  Any participant receiving or
due to commence such distributions (including as a 5% owner) shall not receive a
required minimum distribution with respect to 2009 in the absence of an
affirmative election.  To the extent that a participant’s entire interest is
otherwise required to be distributed to a beneficiary by December 31 of the
calendar year containing the fifth anniversary of the participant’s death, such
5-year period shall be determined without regard to calendar year 2009.

(a)        Required Beginning Date - The entire interest of a participant must
be distributed or begin to be distributed no later than the participant’s
required beginning date.

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(b)        Limits on Distribution Periods - As of the first distribution
calendar year, distributions to a participant, if not made in a single sum, may
only be made over one of the following periods (or a combination thereof):

 

(1)        the life of the participant;

(2)        the joint lives of the participant and a designated beneficiary;

(3)        a period certain not extending beyond the life expectancy of the
participant; or

(4)        a period certain not extending beyond the joint life and last
survivor expectancy of the participant and a designated beneficiary.

(c)        Death of Participant Before Distributions Begin - If the participant
dies before distributions begin, the participant’s entire interest will be
distributed, or begin to be distributed, no later than as follows:

(1)        If the participant’s surviving spouse is the participant’s sole
designated beneficiary, then distributions to the surviving spouse will begin by
December 31 of the calendar year immediately following the calendar year in
which the participant died, or by December 31 of the calendar year in which the
participant would have attained age 701/a, if later.  If the surviving spouse so
elects, the participant’s entire interest will be distributed to such surviving
spouse by December 31 of the calendar year containing the fifth anniversary of
the participant’s death.  If no election is received, distributions to the
surviving spouse will begin by December 31 of the calendar year in which the
participant would have attained age 70/4, or the participant’s entire interest
will be distributed to such surviving spouse by December 31 of the calendar year
containing the fifth anniversary of the participant’s death, if later.

(2)        If the participant’s surviving spouse is not the participant’s sole
designated beneficiary, then distributions to the designated beneficiary will
begin by December 31 of the calendar year immediately following the calendar
year in which the participant died.  If the designated beneficiary so elects or
if no election is received, the participant’s entire interest will be
distributed to such designated beneficiary by December 31 of the calendar year
containing the fifth anniversary of the participant’s death.

(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 interest
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 are required to begin, this Section
5.3(c), other than Section 5.3(c)(1), will apply as if the surviving spouse were
the participant.

For purposes of this Section 5.3(c) and Section 5.3(f), unless Section 5.3(c)(4)
applies, distributions are considered to begin on the participant’s required
beginning date.  If Section

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5.3(c)(4) applies, distributions are considered to begin on the date
distributions are required to begin to the surviving spouse under Section
5.3(c)(1).

(d)        Forms of Distribution - Unless the participant’s interest is
distributed in a single sum on or before the required beginning date, as of the
first distribution calendar year distributions will be made in accordance with
Section 5.3(e) and (f).

(e)        Required Minimum Distributions During Participant’s Lifetime - If a
participant’s benefit is to be distributed over (1) a period not extending
beyond the life expectancy of the participant or the joint life and last
survivor expectancy of the participant and the participant’s designated
beneficiary or (2) a period not extending beyond the life expectancy of the
designated beneficiary, the amount required to be distributed for each calendar
year, beginning with distributions for the first distribution calendar year,
must at least equal the quotient obtained by dividing the participant’s benefit
by the applicable life expectancy.

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

(A)        The quotient obtained by dividing the participant’s account balance
by the distribution period in the Uniform Lifetime Table set forth in Regulation
section 1.401(a)(9)-9, using the participant’s age as of the participant’s
birthday in the distribution calendar year; or

(B)        If the participant’s sole designated beneficiary for the distribution
calendar year is the participant’s spouse, the quotient obtained by dividing the
participant’s account balance by the number in the Joint and Last Survivor Table
set forth in Regulation 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 5.3(e) beginning with the first distribution calendar year and
continuing up to and including the distribution calendar year that includes the
participant’s date of death.

(f)        Required Minimum Distributions After Participant’s Death

(1)        Death On or After Date Distributions Begin - If the participant dies
after distribution of his interest has begun, the remaining portion of such
interest will continue to be distributed at least as rapidly as under the method
of distribution being used prior to the participant’s death.

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

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(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.

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

(2)        Death Before Date Distributions Begin

(A)        Participant Survived by Designated Beneficiary - If the participant
dies before the date distributions begin and there is a designated beneficiary,
the minimum amount that will be distributed for each distribution calendar year
after the year of the participant’s death is the quotient obtained by dividing
the participant’s account balance by the remaining life expectancy of the
participant’s designated beneficiary, determined as provided in Section
5.3(f)(1).

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

(C)        Death of Surviving Spouse Before Distributions to Surviving Spouse
Are Required to Begin - If the participant dies before the date distributions
begin, the participant’s surviving spouse is the participant’s sole designated
beneficiary, and the surviving spouse dies before distributions are required to
begin to the surviving spouse under Section 5.3(c), this Section 5.3(f)(2) will
apply as if the surviving spouse were the participant.

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(g)        Definitions (Code Section 401 (a)(9) Requirements)

(1)        Designated Beneficiary - The individual who is designated as the
beneficiary of the participant’s interest under the plan and who is the
designated beneficiary under Code section 401 (a)(9) and Regulation section
1.401 (a)(9)-4.

(2)        Distribution Calendar Year - A calendar year for which a minimum
distribution is required.  For distributions beginning before the participant’s
death, the first distribution calendar year is the calendar year immediately
preceding the calendar year 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 pursuant to Section 5.3(c).  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 - Life expectancy as computed by use of the Single
Life Table in Regulation section 1.401(a)(9)-9.

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

If any portion of the minimum distribution for the first distribution calendar
year is made in the second distribution calendar year on or before the required
beginning date, the amount of the minimum distribution made in the second
distribution calendar year shall be treated as if it had been made in the
immediately preceding distribution calendar year.

(5)        Required Beginning Date

(A)        Non-5% Owner- The required beginning date is April 1 of the calendar
year following the later of: (i) the calendar year in which the participant
attains age 70½, or (ii) the calendar year in which the participant retires.

(B)        5% Owner - The required beginning date for a participant who is a 5%
owner is April 1 of the calendar year following the calendar year in which the
participant attains age 70½.  A participant is treated as a 5% owner for
purposes of this Section 5.3(g)(5) if such participant is a 5% owner as defined
in Code section 416(i) (determined in accordance with section 416 but without
regard to whether the plan is top-heavy) at any time during the plan year ending
with or within the calendar year in which such participant attains age 70½.

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(C)        Once distributions have begun to a 5% owner under this Section
5.3(g)(5), they must continue to be distributed, even if the participant ceases
to be a 5% owner in a subsequent year.

Section 5.4. - Top Heavy Provisions

(a)        Application of Provisions - If the plan is or becomes top-heavy in
any plan year, the provisions of Section 5.4 will supersede any conflicting
provisions in the plan.

(b)        Minimum Allocation

(1)        Except as otherwise provided in Section 5.4(b)(3) and (4) below, the
employer contributions and forfeitures allocated on behalf of any participant
who is not a key employee shall not be less than the lesser of 3% of such
participant’s compensation or in the case where the employer has no defined
benefit plan that designates this plan to satisfy Code section 401, the largest
percentage of employer contributions and forfeitures, as a percentage of key
employee’s compensation that may be taken into account under Section 1.2(c),
allocated on behalf of any key employee for that year.  The minimum allocation
is determined without regard to any Social Security contribution.  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 year because of (i) the participant’s
failure to complete 1,000 hours of service (or any equivalent provided in the
plan), or (ii) the participant’s failure to make mandatory employee
contributions to the plan, or (iii) compensation less than a stated amount.

(2)        For purposes of computing the minimum allocation, compensation shall
mean compensation as defined in Section 5.1 (c)(2), subject to the limitations
of Section 1.2(c).

(3)        The provision in Section 5.4(b)(1) shall not apply to any participant
who was not employed by the employer on the last day of the plan year.

(4)        The provision in Section 5.4(b)(1) shall not apply to any participant
to the extent the participant is covered under any other plan or plans of the
employer and the employer has provided in Section 3.2 that the minimum
allocation or benefit requirement applicable to top-heavy plans will be met in
the other plan or plans (including another plan that consists solely of a cash
or deferred arrangement which meets the requirements of Code section 401 (k)(12)
and matching contributions with respect to which the requirements of Code
section 401 (m)(11) are met).  If this plan is intended to meet the minimum
allocation or benefit requirement applicable to another plan or plans, the
employer shall so provide in Section 3.2(c).

(5)        The minimum allocation required (to the extent required to be
nonforfeitable under Code section 416(b)) may not be forfeited under Code
section 411(a)(3)(B) or411(a)(3)(D).

(6)        Matching Contributions - Employer matching contributions may be taken
into account for purposes of satisfying the minimum contribution requirements of
Code section 416(c)(2).  The preceding sentence shall apply with respect to
matching contributions

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under a plan containing a cash or deferred arrangement being used to satisfy the
minimum allocation requirements of this plan if such plan so provides.

(c)        Minimum Vesting Schedules - For any plan year in which this plan is
top-heavy, the following minimum vesting schedule shall automatically apply to
the plan:

 

 

 

Years of Service

    

Vesting Percentage

0 Year

 

0%

1

 

20%

2

 

40%

3

 

60%

4

 

80%

5 or More Years

 

100%

 

The minimum vesting schedule shall apply to all benefits within the meaning of
Code section 411(a)(7) except those attributable to employee contributions,
including benefits accrued before the effective date of Code section 416 and
benefits accrued before the plan became top-heavy.  Further, no decrease in a
participant’s nonforfeitable percentage may occur in the event the plan’s status
as top-heavy changes for any plan year.  However, this Section does not apply to
the account balances of any employee who does not have an hour of service after
the plan has initially become top-heavy arid such employee’s account balance
attributable to employer contributions and forfeitures will be determined
without regard to this Section.

If the vesting schedule under the plans shifts in or out of the above schedule
for any plan year because of the plan’s top-heavy status, such shift shall
constitute an amendment to the vesting schedule and the provisions of Section
7.2(d) and (e) shall apply.

(d)        Definitions (Code Section 416 Requirements)

(1)        Key Employee  - Key employee means any employee or former employee
(and the beneficiaries of such employee) who at any time during the
determination period is an officer of the employer if such individual’s annual
compensation exceeds $130,000 (as adjusted under Code section 416(i)(1) for plan
years beginning after December 31, 2002), a 5% owner of the employer, or a 1%
owner of the employer who has an annual compensation of more than
$150,000.  Annual compensation means compensation as defined in Section
5.1(c)(2), but including elective contributions as defined in Section 1.2(a) and
elective contributions under a Code section 457 plan or a Code section
501(c)(18) plan for any plan year and subject to the limitations of Section
1.2(c).  The determination period is the plan year containing the determination
date.  In determining whether an employee is a key employee in 2002, this
paragraph shall be treated as having been in effect for the last plan year
beginning before January 1,2002.

In determining whether a plan is top-heavy for plan years beginning before
January 1, 2002, key employee means any employee or former employee (and the
beneficiaries of such employee) who at any time during the determination period
was an officer of the employer if such individual’s annual compensation exceeded
50% of the dollar limitation under Code section

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415(b)(1)(A), an owner (or considered an owner under Code section 318) of one of
the ten largest interests in the employer if such individual’s compensation
exceeded 100% of the dollar limitation under Code section 415(c)(1)(A), a 5%
owner of the employer, or a 1% owner of the employer who had an annual
compensation of more than $150,000.  Annual compensation means compensation as
defined in Section 5.1(c)(2), but including elective contributions as defined in
Section 1.2(a) and elective contributions under a Code section 457 plan or a
Code section 501 (c)(18) plan for any plan year and subject to the limitations
of Section 1.2(c).  The determination period is the plan year containing the
determination date and the four preceding plan years.

The determination of who is a key employee will be made in accordance with Code
section 416(i)(1) and the applicable regulations and other guidance of general
applicability issued thereunder.

(2)        Top-Heavy Plan - This plan is top-heavy if any of the following
conditions exists:

(A)        If the top-heavy ratio for this plan exceeds 60% and this plan is not
part of any required aggregation group or permissive aggregation group of plans.

(B)        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 group
of plans exceeds 60%.

(C)        If this plan is a part of a required aggregation group and part of a
permissive aggregation group of plans and the top-heavy ratio for the permissive
aggregation group exceeds 60%.

(3)        Top-Heavy Ratio

(A)        If the employer maintains one or more defined contribution plans
(including any Simplified Employee Pension Plan) and the employer has not
maintained any defined benefit plan that during the five-year period ending on
the determination date(s) has or has had accrued benefits, the top-heavy ratio
for this plan alone or for the required or permissive aggregation group as
appropriate is a fraction, the numerator of which is the sum of the account
balances of all key employees as of the determination date(s) including any part
of any account balance distributed in the one-year period ending on the
determination date(s) (five-year period ending on the determination date in the
case of a distribution made for a reason other than severance from employment,
death or disability and in determining whether the plan is top-heavy for plan
years beginning before January 1, 2002), and the denominator of which is the sum
of all account balances including any part of any account balance distributed in
the one-year period ending on the determination date(s) (five-year period ending
on the determination date in the case of a distribution made for a reason other
than severance from employment, death or disability and in determining whether
the plan is top-heavy for plan years beginning before January 1, 2002), both
computed in accordance with Code section 416 and the regulations
thereunder.  Both the numerator and denominator of the top-heavy ratio are
increased to reflect

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any contribution not actually made as of the determination date, but which is
required to be taken into account on that date under Code section 416 and the
regulations thereunder.

(B)        If the employer maintains one or more defined contribution plans
(including any Simplified Employee Pension Plan) and the employer maintains or
has maintained one or more defined benefit plans that during the five-year
period ending on the determination date(s) has or has had any accrued benefits,
the top-heavy ratio for any required or permissive aggregation group as
appropriate is a fraction, the numerator of which is the sum of account balances
under the aggregated defined contribution plan or plans for all key employees,
determined in accordance with (A) above, and the-present value of accrued
benefits under the aggregated defined benefit plan or plans for all key
employees as of the determination date(s), and the denominator of which is the
sum of the account balances under the aggregated defined contribution plan or
plans for all participants, determined in accordance with (A) above, and the
present value of accrued benefits under the defined benefit plan or plans for
all participants as of the determination date(s), all determined in accordance
with Code section 416 and the regulations thereunder.  The accrued benefits
under a defined benefit plan in both the numerator and denominator of the
top-heavy ratio are increased for any distribution of an accrued benefit made in
the one-year period ending on the determination date (five-year period ending on
the determination date in the case of a distribution made for a reason other
than severance from employment, death or disability and in determining whether
the plan is top-heavy for plan years beginning before January 1, 2002).

The accrued benefit of a participant other than a key employee shall be
determined under (1) the method, if any, that uniformly applies for accrual
purposes under all defined benefit plans maintained by the employer, or (2) if
there is no such method, as if such benefit accrued not more rapidly than the
slowest accrual rate permitted under the fractional rule of Code section
411(b)(1)(C).

(C)        For purposes of Section 5.4(d)(3)(A) and (B) above the value of
account balances and the present value of accrued benefits will be determined as
of the most recent valuation date that falls within or. ends with the 12-month
period ending on the determination date, except as provided in Code section 416
and the regulations thereunder for the first and second plan years of a defined
benefit plan.  The account balances and accrued benefits of a participant (1)
who is not a key employee but who was a key employee in a prior year, or (2) who
has not been credited with at least one hour of service with any employer
maintaining the plan at any time during the one-year period (five-year period
ending on the determination date in the case of a distribution made for a reason
other than severance from employment, death or disability and in determining
whether the plan is top-heavy for plan years beginning before January 1, 2002)
ending on the determination date will be disregarded.  The calculation of the
top-heavy ratio, and the extent to which distributions, rollovers, and transfers
are taken into account will be made in accordance with Code section 416 and the
regulations thereunder.  Deductible employee contributions will not be taken
into account for purposes of computing the top-heavy ratio.  When aggregating
plans the value of account balances and accrued benefits will be calculated with
reference to the determination dates that fall within the same calendar year.

The accrued benefit of a participant other than a key employee shall be
determined under (1) the method, if any, that uniformly applies for accrual
purposes under all defined benefit plans

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maintained by the employer, or (2) if there is no such method, as if such
benefit accrued not more rapidly than the slowest accrual rate permitted under
the fractional rule of Code section 411(b)(1)(C).

(4)        Permissive Aggregation Group - 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 sections 401(a)(4) and 410.

(5)        Required Aggregation Group - (A) Each qualified plan of the employer
in which at least one key employee participates or participated at any time
during the determination period (regardless of whether the plan has terminated),
and (B) any other qualified plan of the employer that enables a plan described
in (A) to meet the requirements of Code sections 401 (a)(4) or 410.

(6)        Determination Date - For any plan year subsequent to the first plan
year, the last day of the preceding plan year.  For the first plan year of the
plan, the last day of that year.

(7)        Valuation Date - The. last day of the plan year shall be the date as
of which account balances or accrued benefits are valued for purposes of
calculating the top-heavy ratio.

(8)        Present Value - Present value shall be based only on the interest and
mortality rates specified in the employer’s defined benefit plan.

(9)        Non-Key Employee - Any employee who is not a key employee.  Non-key
employees include employees who are former key employees.

Section 5.5. - ESOP Distribution Options

The employer retains the ability to amend and interpret the plan so as not to
grant a greater right to a form of distribution than is otherwise granted under
the regulations issued under Code section 411(d)(6).

(a)        Readily Tradable

The terms readily tradable on an established securities market and readily
tradable on an established market mean corporate stocks that are traded on a
national securities exchange that is registered under section 6 of the
Securities Exchange Act of 1934 or are otherwise readily tradable on an
established securities market within the meaning of Regulation section
1.401(a)(35)-1(f)(5).

(b)        Right to Receive Stock

The right to receive distributions in the form of shares of corporate stock
shall be automatically terminated in the event of the sale or other disposition
by the trustee of all shares of corporate stock held by the trust where the
corporate stock ceases to be readily tradable.

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Implementation of this provision shall only be done in accordance with the
nondiscrimination requirements of Code section 401(a)(4).

(c)        Restricted Stock

(1)        Notwithstanding anything contained herein to the contrary, if the
employer is an S corporation or the employer’s charter or by-laws restrict
ownership of substantially all shares of corporate stock to employees and the
trust fund, as described in Code section 409(h)(2), the plan administrator shall
distribute a participant’s account entirely in cash without granting the
participant the right to demand distribution in shares of corporate stock.

(2)        Except as otherwise provided herein, corporate stock distributed by
the trustee may be restricted as to sale or transfer by the by-laws or articles
of incorporation of the employer, provided restrictions are applicable to all
corporate stock of the same class.  If a participant is required to offer the
sale of his corporate stock to the employer before offering to sell his
corporate stock to a third party, in no event may the employer pay a price less
than that offered to the distributee by another potential buyer making a bona
fide offer and in no event shall the trustee pay a price less than the fair
market value of the corporate stock.

(d)        Right of First Refusal

(1)        If any participant, his beneficiary or any other person to whom
shares of corporate stock are distributed from the plan (the selling
participant) shall, at any time that the stock is not publicly traded, desire to
sell some or all of such shares (the offered shares) to a third party; the
selling participant shall give written notice of such desire to the employer and
the plan administrator.  The notice shall contain the number of shares offered
for sale, the proposed terms of the sale, and the names and addresses of both
the selling participant and third party.  Both the trust fund and the employer
shall each have the right of first refusal for a period of 14 days from the date
the selling participant gives such written notice to the employer and the plan
administrator to acquire the offered shares.  The 14- day period shall run
concurrently against the trust fund and the employer.  As between the trust fund
and the employer, the trust fund shall have priority to acquire the shares
pursuant to the right of first refusal.  The selling price and terms shall not
be less than the greater of the value of the stock determined under Section
6.7(b) or the price and terms offered by the third party.

(2)        If the trust fund and the employer do not exercise their right of
first refusal within the required fourteen day period provided above, the
selling participant shall have the right, at any time following the expiration
of such period, to dispose of the offered shares to the third party; provided,
however, that (i) no disposition shall be made to the third party on terms more
favorable to the third party than those set forth in the written notice
previously given by the selling participant, and (ii) if such disposition shall
not be made to a third party on the terms offered to the employer and the trust
fund, the offered shares shall again be subject to the right of first refusal
set forth above.

(3)        The closing pursuant to the exercise of the right of first refusal
shall take place at such place agreed upon between the plan administrator and
the selling participant, but not later than 10 days after the employer or the
trust fund shall have notified the selling

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participant of the exercise of the right of first refusal.  At such closing, the
selling participant shall deliver certificates representing the offered shares
duly endorsed in blank for transfer, or with stock powers attached duly executed
in blank with all required transfer tax stamps attached or provided for, and the
employer or the trust fund shall deliver the purchase price, or an appropriate
portion thereof, to the selling participant.

(e)        Put Option

(1)        If corporate stock is distributed to a participant and such corporate
stock is not readily tradable on an established securities market, a participant
has a right to require the employer to repurchase the corporate stock
distributed to such participant under a fair valuation formula.  Such stock
shall be subject to the provisions of Section 5.5(c).

(2)        The put option must be exercisable only by a participant, by the
participant’s donees, or by a person (including an estate or its distributee) to
whom the corporate stock passes by reason of a participant’s death.  The put
option must permit a participant (or beneficiary) to put the corporate stock to
the employer.  Under no circumstances may the put option bind the
plan.  However, it shall grant the plan an option to assume the rights and
obligations of the employer at the time that the put option is exercised.  If it
is known at the time a loan is made that federal or state law will be violated
by the employer’s honoring such put option, the put option must permit the
corporate stock to be put, in a manner consistent with such law, to a third
party (e.g., an affiliate of the employer or a shareholder other than the plan)
that has substantial net worth at the time the loan is made and whose net worth
is reasonably expected to remain substantial.

The put option shall commence as of the day following the date the corporate
stock is distributed to the participant (or beneficiary) and end 60 days
thereafter; and, if not exercised within such 60-day period, an additional
60-day option shall commence on the first day of the fifth month of the plan
year next following the plan year in which the stock was distributed to the
participant (or such other 60-day period as provided in regulations issued under
the Code).  However, in the case of corporate stock that is publicly traded
without restrictions when distributed but ceases to be so traded within either
of the 60-day periods described herein after distribution, the employer must
notify each holder of such corporate stock in writing on or before the tenth day
after the date the corporate stock ceases to be so traded that for the remainder
of the applicable 60-day period the corporate stock is subject to the put
option.  The number of days between the tenth day and the date on which notice
is actually given, if later than the tenth day, must be added to the duration of
the put option.  The notice must inform distributees of the term of the put
options that they are to hold.  The terms must satisfy the requirements of this
Section 5.5(e)(2).

The holder shall exercise the put option by notifying the employer in writing of
such exercise.  The notice shall state the name and address of the holder and
the number of shares to be sold.  Upon receipt of a written notification from
the holder, the employer shall immediately inform the plan administrator of such
notice.  The plan administrator shall have 10 days to notify the employer if it
wishes the trust fund to assume the rights and obligations of the employer with
respect to the required purchase of corporate stock.

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The period during which a put option is exercisable does not include any time
when a distributee is unable to exercise it, because the party bound by the put
option is prohibited from honoring it by applicable federal or state law.  The
price at which a put option must be exercisable is the value of the corporate
stock determined in accordance with Section 6.7(b) as of the allocation date
coincident with or immediately preceding the employer’s receipt of the written
notification.  The total purchase price shall be paid to the holder within 30
days after the notification, provided however, that the employer may defer such
payments on a reasonable basis, if it gives written notice to the holder within
the 30-day period.  Such deferred payments shall be paid in substantially equal
monthly, quarterly, semiannual, or annual installments over a period certain
beginning not later than 30 days after the exercise of the put option and not
extending beyond 5 years.  The deferral of payment is reasonable if adequate
security and a reasonable interest rate on the unpaid amounts are provided.  The
amount to be paid under the put option involving installment distributions must
be paid not later than 30 days after the exercise of the put option.  Payment
under a put option must not be restricted by the provisions of a loan or any
other arrangement, including the terms of the employer’s articles of
incorporation, unless so required by applicable state law.

For purposes of this Section 5.5(e), total distribution means a distribution to
a participant or his beneficiary within one taxable year of the participant’s
entire vested account.

(3)        An arrangement involving the plan that creates a put option must not
provide for the issuance of put options other than as provided under this
Section 5.5(e).  The plan (and the trust fund) must not otherwise obligate
itself to acquire corporate stock from a particular holder thereof at an
indefinite time determined upon the happening of an event such as the death of
the holder.

(4)        The participant and beneficiary rights and protections created under
this Section 5.5(e) as they pertain to plan assets acquired with the proceeds of
an exempt loan shall be nonterminable. Therefore, such rights and protections
shall continue even after such exempt loan has been repaid or this plan ceases
to be an ESOP.

Article VI-ADMINISTRATION OF THE PLAN

Section 6.1. - Fiduciary Responsibility

(a)        Fiduciary Standards - A fiduciary shall discharge his duties with
respect to a plan solely in the interest of the participants and beneficiaries
and -

For the exclusive purpose of providing benefits to participants and their
beneficiaries and defraying reasonable expenses of administering the plan;

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;

By diversifying the investments of the plan not held in corporate stock so as to
minimize the risk of large losses, unless under the circumstances it is clearly
prudent not to do so; and

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In accordance with the documents and instruments governing the plan insofar as
such documents and instruments are consistent with the provisions of ERISA.

(b)        Allocation of Fiduciary Responsibility

(1)        It is intended to allocate to each fiduciary, either named or
otherwise, the individual responsibility for the prudent execution of the
functions assigned to him.  None of the allocated responsibilities or any other
responsibilities shall be shared by two or more fiduciaries unless specifically
provided for in the plan.

(2)        When one fiduciary is required to follow the directions of another
fiduciary, the two fiduciaries shall not be deemed to share such
responsibility.  Instead, the responsibility of the fiduciary giving the
directions shall be deemed to be his sole responsibility and the responsibility
of the fiduciary receiving directions shall be to follow those directions
insofar as such instructions on their face are proper under applicable law.

(3)        Any person or group of persons may serve in more than one fiduciary
capacity with respect to this plan.

(4)        A fiduciary under this plan may employ one or more persons, including
independent accountants, attorneys and actuaries to render advice with regard to
any responsibility such fiduciary has under the plan.

 

(c)        Indemnification by Employer- Unless resulting from the gross
negligence, willful misconduct or lack of good faith on the part of a fiduciary
who is an officer or employee of the employer, the employer shall indemnify and
save harmless such fiduciary from, against, for and in respect of any and all
damages, losses, obligations, liabilities, liens, deficiencies, costs and
expenses, including without limitation, reasonable attorney’s fees and other
costs and expenses incident to any suit, action, investigation, claim or
proceedings suffered in connection with his acting as a fiduciary under the
plan.

(d)        Named Fiduciary - The person or persons named by the employer as
having fiduciary responsibility for the management and control of plan assets
shall be known as the “named fiduciary” hereunder.  Such responsibility shall
include the appointment of the plan administrator (Section 6.2(a)) and the
investment manager (Section 6.4(b)) and the deciding of benefit appeals (Section
6.3).  The employer shall retain the authority to appoint the trustee (Section
6.4(a)).  The named fiduciary possesses exclusive authority to monitor the
plan’s receipt of contributions and enforce the collection of delinquent
contributions to the trust.

Section 6.2. - Plan Administrator

(a)        Appointment of Plan Administrator

The named fiduciary shall appoint a plan administrator who may be a person or an
administrative committee consisting of no more than five members.  Vacancies
occurring upon resignation or removal of a plan administrator or a committee
member shall be filled promptly by the named fiduciary.  Any plan administrator
may resign at any time by giving notice of his resignation to the named
fiduciary, and any plan administrator may be removed at any time by

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the named fiduciary.  The named fiduciary shall review at regular intervals the
performance of the plan administrator(s) and shall re-evaluate the appointment
of such administrator(s).  After the named fiduciary has appointed the plan
administrator and has received a written notice of acceptance, the fiduciary
responsibility for administration of the plan shall be the responsibility of the
plan administrator or plan administrative committee.

(b)        Duties and Powers of Plan Administrator

The plan administrator shall have the following duties and discretionary powers
and such other duties and discretionary powers as relate to the administration
of the plan:

(1)        To determine in a non-discriminatory manner all questions relating to
the eligibility of employees to . become participants.

(2)        To determine in a non-discriminatory manner eligibility for benefits
and to determine and certify the amount and kind of benefits payable to
participants.

(3)        To authorize all disbursements from the fund.

(4)        To appoint or employ any independent person to perform necessary plan
functions and to assist in the fulfillment of administrative responsibilities as
he deems advisable, including the retention of a third party administrator,
custodian, auditor, accountant, actuary, or attorney.

(5)        When appropriate, to select an insurance company and annuity
contracts that, in his opinion, will best carry out the purposes of the plan.

(6)        To construe and interpret any ambiguity in the plan and to make,
publish, interpret, alter, amend or revoke rules for the regulation of the plan
which are consistent with the terms of the plan and with ERISA.

(7)        To prepare and distribute, in such manner as determined to be
appropriate, information explaining the plan.

(8)        To establish and communicate to participants a procedure and method
to enable each participant to vote corporate stock allocated to such
participant’s corporate stock account pursuant to Section 6.8.

(9)        To assist any participant regarding his rights, benefits, or
elections available under the plan.

(c)        Allocation of Fiduciary Responsibility Within Plan Administrative
Committee

If the plan administrator is a plan administrative committee, the committee
shall choose from its members a chairperson and a secretary.  The committee may
allocate responsibility for those duties and powers listed in Section 6,2(b)(1)
and (2) (except determination of qualification for disability retirement) and
other purely ministerial duties to one or more members of the

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committee.  The committee shall review at regular intervals the performance of
any committee member to whom fiduciary responsibility has been allocated and
shall re-evaluate such allocation of responsibility.  After the plan
administrative committee has made such allocations of responsibilities and has
received written notice of acceptance, the fiduciary responsibilities for such
administrative duties and powers shall then be considered as the
responsibilities of such committee member(s).

(d)        Miscellaneous Provisions

(1)        Plan Administrative Committee Actions - The actions of such committee
shall be determined by the vote or other affirmative expression of a majority of
its members.  Either the chairperson or the secretary may execute any
certificate or other written direction on behalf of the committee.  A member of
the committee who is a participant shall not vote on any question relating
specifically to himself.  If the remaining members of the committee, by majority
vote thereof, are unable to come to a determination of any such question, the
named fiduciary shall appoint a substitute member who shall act as a member of
the committee for the special vote.

(2)        Expenses - The plan administrator shall serve without compensation
for service as such.  All reasonable expenses of the plan administrator shall be
paid by the employer or from the fund.

(3)        Examination of Records -  The plan administrator shall make available
to any participant for examination during business hours such of the plan
records as pertain only to the participant involved.

(4)        Information to the Plan Administrator - To enable the plan
administrator to perform the administrative functions, the employer shall supply
full and timely information to the plan administrator on all participants as the
plan administrator may require.

Section 6.3. - Claims Procedure

(a)        Notification of Claim Determination  - The plan administrator shall
notify each participant in writing of his determination of benefits.  If the
plan administrator denies any benefit, such written denial shall include:

·

The specific reasons for denial;

·

Reference to provisions on which the denial is based;

·

A description of and reason for any additional information needed to process the
claim; and

·

A description of the plan’s review procedures and the time limits applicable to
such procedures, including a statement of the claimant’s right to bring a civil
action under ERISA section 502(a) following an adverse benefit determination on
review.

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If a claim is wholly or partially denied, the plan administrator shall notify
the claimant of the plan’s adverse benefit determination within a reasonable
period of time, but not later than 90 days after receipt of the claim by the
plan, unless the plan administrator determines that special circumstances
require an extension of time for processing the claim.  If the plan
administrator determines that an extension of time for processing is required,
written notice of the extension shall be furnished to the claimant prior to the
termination of the initial 90-day period.  In no event shall such extension
exceed a period of 90 days from the end of such initial period.  The extension
notice shall indicate the special circumstances requiring an extension of time
and the date by which the plan expects to render the benefit determination.

(b)        Appeal - The participant or his duly authorized representative may:

·

Make a written request for a review of the participant’s case by the named
fiduciary;

·

Review upon request and free of charge, have reasonable access to, and have
copies of, all documents, records, and other information relevant to the
claimant’s claim for benefits;

·

Submit written issues, comments, documents, records, and other information
relating to the claim for benefits, without regard to whether such information
was submitted or considered in the initial benefit determination.

The written request for review must be submitted no later than 60 days after
receiving written notification of denial of benefits.  A document, record, or
other information shall be considered relevant to a claimant’s claim if such
document, record, or other information:

·

Was relied upon in making the benefit determination;

·

Was submitted, considered, or generated in the course of making the benefit
determination, without regard to whether such document, record, or other
information was relied upon in making the benefit determination; or

·

Demonstrates compliance with the administrative processes and safeguards
required by law in making the benefit determination.

(c)        Appeal Procedure

(1)        Except as provided in Section 6.3(c)(2), the named fiduciary must
render a decision no later than

60 days after receiving the written request for review, unless circumstances
make it impossible to do so; but in no event shall the decision be rendered
later than 120 days after the request for review is received.  If the named
fiduciary determines that an extension of time for processing is required,
written notice of the extension shall be furnished to the claimant by the plan
administrator prior to the termination of the initial 60-day period.  The
extension notice

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shall indicate the special circumstances requiring an extension of time and the
date by which the plan expects to render the determination on review.

(2)        If the named fiduciary is a committee or board of trustees that holds
regularly scheduled meetings at least quarterly, Section 6.3(c)(1) shall not
apply.  The named fiduciary shall instead make a benefit determination no later
than the date of the meeting of the committee or board that immediately follows
the plan’s receipt of a request for review, unless the request for review is
filed within 30 days preceding the date of such meeting.  In such case, a
benefit determination may be made by no later than the date of the second
meeting following the plan’s receipt of the request for review.  If special
circumstances require a further extension of time for processing, a benefit
determination shall be rendered not later than the third meeting of the
committee or board following the plan’s receipt of the request for review.  If
such an extension of time for review is required because of special
circumstances, the plan administrator shall provide the claimant with written
notice of the extension, describing the special circumstances and the date as of
which the benefit determination will be made, prior to the commencement of the
extension.  The plan administrator shall notify the claimant of the benefit
determination as soon as possible, but not later than 5 days after the benefit
determination is made.

(3)        The review shall take into account all comments, documents, records,
and other information submitted by the claimant relating to the claim, without
regard to whether such information was submitted or considered in the initial
benefit determination.  If the claim is denied upon review, the written notice
of denial shall include the items listed in Section 6.3(a) and the statement
required by Regulation section 2560.503-1 (j)(5)(iii) regarding the possible
availability of alternative dispute resolution options.

(d)        Limitation on Time Period for Litigation of a Benefit Claim -
Following receipt of the written rendering of the named fiduciary’s decision
under Section 6.3(c), the participant shall have 365 days in which to file suit
in the appropriate court.  Thereafter, the right to contest the decision shall
be waived.

Section 6.4. - Trust Fund

(a)        Appointment of Trustee

The named fiduciary shall appoint a trustee for the proper care and custody of
all funds, securities and other properties in the trust, and for investment of
plan assets (or for execution of such orders as it receives from an investment
manager appointed for investment of plan assets).  The duties and powers of the
trustee shall be set forth in a trust agreement executed by the named fiduciary,
which is incorporated herein by reference.  The named fiduciary shall review at
regular intervals the performance of the trustee and shall re-evaluate the
appointment of such trustee.  After the named fiduciary has appointed the
trustee and the named fiduciary has received a written notice of acceptance of
its responsibility, the fiduciary responsibility with respect to the proper care
and custody of plan assets shall be considered as the responsibility of the
trustee.  Unless otherwise allocated to an investment manager, the fiduciary
responsibility with respect to investment of plan assets shall likewise be
considered as the responsibility of the trustee.

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(b)        Appointment of Investment Manager

The named fiduciary may appoint an investment manager who is other than the
trustee, which investment manager may be a bank or an investment advisor
registered with the Securities and Exchange Commission under the Investment
Advisors Act of 1940.  Such investment manager, if appointed, shall have sole
discretion in the investment of plan assets, subject to the funding policy.  The
named fiduciary shall review at regular intervals no less frequently than
annually, the performance of such investment manager and shall re-evaluate the
appointment of such investment manager.  After the named fiduciary has appointed
an investment manager and has received a written notice of acceptance of its
responsibility, the fiduciary responsibility with respect to investment of plan
assets shall be considered as the responsibility of the investment manager.

(c)        Expenses

The trust fund may pay the expenses incurred in the administration of the plan
and the investment of the fund, provided the cost is reasonable.  Such expenses
shall include legal fees incurred by the plan administrator or the trustee,
provided such fiduciaries are not proven to have committed a prohibited
transaction.  If the trust fund pays the expenses, the expenses generally shall
be allocated against the participant accounts on a pro rata basis.  Per
participant fees shall be allocated per capita against each participant’s
account.

Certain expenses incurred with respect to a particular participant or
beneficiary may be allocated against the participant’s account on a direct
basis.  The plan administrator shall communicate such expense charges to the
participant through a written notice.

Section 6.5. - Investment Policy

(a)        The plan is designed to invest primarily in corporate stock.  It is
specifically intended that this employee stock ownership plan qualify and
operate as an eligible individual account plan as defined in ERISA section
407(d)(3).  As such, and without limiting the generality of the foregoing, the
trustee is hereby specifically authorized to:

(1)        acquire, hold, sell, and distribute corporate stock that is qualified
employer stock.

(2)        invest in such corporate stock and not limit its holdings of such
stock to 10% of trust assets.  The trustee may invest up to 100% of plan assets
in corporate stock without regard to any plan or trust agreement requirement to
diversify investments as permitted under ERISA section 404(a)(2).

(3)        acquire or sell corporate stock in a transaction with a disqualified
person or a party in interest (as those terms are defined in ERISA and the Code)
provided that no commission is charged and the transaction is for adequate
consideration.

(b)        With due regard to Section 6.5(a), the plan administrator may also
direct the trustee to invest funds under the plan in other property described in
the Trust Agreement or in

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life insurance policies to the extent permitted by Section 6.5(c), or the
trustee may hold such funds in cash or cash equivalents.

(c)        With due regard to Section 6.5(a), the plan administrator may also
direct the trustee to invest funds under the plan in insurance policies on the
life of any keyman employee.  The proceeds of a keyman insurance policy may not
be used for the repayment of any indebtedness owed by the plan that is secured
by corporate stock but shall be allocated to participants in proportion to their
account balances.  The amount of employer contribution to be allocated to
participants under Section 3.2 shall be reduced by the amount of premiums paid
on keyman insurance policies during the plan year.  The employer shall
contribute an amount each year that is sufficient to pay the required
premiums.  The proceeds from an exempt loan shall in no event be used to
purchase such insurance policies.  No insurance company that may issue such
policies shall be deemed to be a party to this plan.

(d)        The plan may not obligate itself to acquire corporate stock from a
particular holder thereof at an indefinite time determined upon the happening of
an event such as the death of the holder.

(e)        The plan may not obligate itself to acquire corporate stock 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.

(f)        All purchases of corporate stock shall be made at a price that, in
the judgment of the plan administrator, does not exceed the fair market value
thereof.  All sales of corporate stock shall be made at a price that, in the
judgment of the plan administrator, is not less than the fair market value
thereof.  The valuation rules set forth in Section 6.7 shall be applicable.

Section 6.6. - Prohibitions Against Allocations

(a)        Transactions Involving Corporate Stock of a C Corporation - This
Section 6.6(a) shall apply to corporate stock of a C corporation acquired by the
plan after October 22, 1986 in a sale to which Code section 1042 or, for estates
of decedents who died prior to December 20, 1989, Code section 2057 (as in
effect December 19, 1989) applies.

(1)        No portion of the trust fund attributable to (or allocable instead
of) such corporate stock may accrue or be allocated directly or indirectly under
any qualified plan maintained by the employer during the nonallocation period,
for the benefit of:

(A)        Any taxpayer who makes an election under Code section 1042(a) with
respect to corporate stock or any decedent if the executor of the estate of the
decedent makes a qualified sale to which Code section 2057 applies;

(B)        Any individual who is related to the taxpayer or the decedent (as
defined in Code section 267(b)); or

(C)        Any other person who owns more than 25% of:

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(i)        any class of outstanding stock of the employer or affiliated employer
which issued such corporate stock; or

(ii)        the total value of any class of outstanding stock of the employer or
affiliated employer.

For the purpose of determining ownership, the attribution rules of Code section
318(a) shall be applied without regard to the employee trust exception of Code
section 318(a)(2)(B)(i).

(2)        An individual who is related to the taxpayer (or the decedent) shall
not include lineal descendants of the taxpayer, if the aggregate amount
allocated to the benefit of all such lineal descendants during the nonallocation
period does not exceed more than 5% of the corporate stock (or amounts allocated
in their stead) held by the plan which are attributable to a sale to the plan by
any person related to such descendants (within the meaning of Code section
267(c)(4)) in a transaction to which Code section 1042 or Code section 2057 is
applied.

(3)        A person shall be treated as meeting the 25% stock ownership
requirement of Section 6.6(a)(1)(C) if such person owns more than 25% of the
stock: (A) at any time during the one year period ending on the date of sale of
corporate stock to the plan, or (B) on the date as of which corporate stock is
allocated to participants in the plan.

(4)        For purposes of Section 6.6(a)(1), nonallocation period, for plan
years beginning after December 31, 1986, means the period beginning on the date
of the sale of the corporate stock and ending on the later of the date which is
ten years after the date of sale or the date of the plan allocation attributable
to the final payment of acquisition indebtedness incurred in connection with
such sale.

(b)        Disqualified Persons under Plan Sponsored by S Corporation - This
Section 6.6(b) shall be effective for plan years beginning after December 31,
2004.  If the corporate stock held by this plan is or becomes the stock of an S
corporation, no portion of the trust fund attributable to (or allocable instead
of) such corporate stock may accrue or be allocated directly or indirectly under
any qualified plan maintained by the employer during a nonallocation year, for
the benefit of any disqualified person.  Such impermissible allocations shall
include any contribution or other annual addition (e.g. forfeiture allocation)
under this plan or any other qualified plan (including a release and allocation
from the unallocated corporate stock suspense account) that would have otherwise
been added to the disqualified person’s account and invested in the stock of the
S corporation.  Such impermissible accruals shall include all stock of the S
corporation and any other plan assets attributable to such stock (including Code
section 1368 distributions, sale proceeds, and earnings on either the
distributions or the proceeds) held for a disqualified person’s account, whether
attributable to current or prior year contributions.

(1)        For the purpose of this Section 6.6(b), a disqualified person is any
person if:

(A)        the number of such person’s deemed-owned ESOP shares of the S
corporation is at least 10% of the number of deemed-owned ESOP shares of the S
corporation;

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(B)        the aggregate number of such person’s deemed-owned ESOP shares and
synthetic equity shares of the S corporation is at least 10% of the sum of: (i)
the total number of deemed-owned ESOP shares, and (ii) the person’s synthetic
equity shares of the S corporation; or

(C)        the aggregate number of the S corporation’s deemed-owned ESOP shares
of such person and the members of such person’s family is at least 20% of the
number of deemed-owned ESOP shares of the S corporation;

(D)        the aggregate number of the S corporation’s deemed-owned ESOP shares
and synthetic equity shares of such person and the members of such person’s
family is at least 20% of the sum of: (i) the total number of deemed-owned ESOP
shares, and (ii) the synthetic equity shares of the S corporation owned by such
person and the members of such person’s family;

(E)        any member of the family of a person described in Section
6.6(b)(1)(C) or (D) with deemed- owned shares if the person is not otherwise
treated as a disqualified person.

(2)        In order to determine who is a disqualified person for purposes of
Section 6.6(b), the following definitions shall apply.

(A)       Member of the family means, with respect to any individual: (i)  the
spouse of the individual;

(i)        an ancestor or lineal descendant of the individual or the
individual’s spouse;

(ii)        (iii) a brother or sister of the individual or the individual’s
spouse and any lineal descendant of the brother or sister; and

(iii)        the spouse of any individual described in Section 6.6(b)(2)(A)(ii)
or (iii).

For these purposes, a spouse of an individual who is legally separated from such
individual under a decree of divorce or separate maintenance shall not be
treated as such individual’s spouse.

(B)       Deemed-owned shares means, with respect to any person:

(i)        the stock in the S corporation constituting corporate stock that is
allocated to such person under this plan; and

(ii)        such person’s share of the corporate stock that is held by the plan
but that is not allocated to any participants.  A person’s share of unallocated
corporate stock is the amount of the unallocated stock that would be allocated
to such person if the unallocated stock were allocated to all participants in
the same proportions as the most recent stock allocation under the plan.  If
there has been no prior release and allocation from a suspense

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account, the person’s share of unallocated corporate stock shall be determined
in proportion to a reasonable estimate of the shares that would be released and
allocated in the first year of a loan repayment.

(3)        For the purpose of this Section 6.6(b), a nonallocation year means
any plan year if, at any time during such plan year, the plan holds corporate
stock that is the stock of an S corporation and disqualified persons own at
least 50% of: (i) the number of outstanding shares in the S corporation,
including deemed-owned plan shares; or (ii) the sum of the outstanding shares in
the S corporation (including deemed-owned plan shares) plus the shares of
synthetic equity in the S corporation owned by disqualified persons.

(A)        Ownership percentage shall be determined by applying the Code section
318(a) attribution rules with the exception that in applying Code section
318(a)(1), the members of an individual’s family shall include members of the
family described in Section 6.6(b)(2)(A) and Code section 318(a)(4) shall not
apply.  An individual shall be treated as owning deemed-owned shares
notwithstanding the employee trust exception in Code section 318(a)(2)(B)(i).

(B)        An individual shall be treated as owning corporate stock that the
individual has a right to acquire if, at all times during the period when such
right is effective, the stock is both issued and outstanding and is held by
persons other than this plan, the employer, or a related entity.  This rule
shall only apply if its application results in a nonallocation year.  Further,
this rule shall not apply to a right to acquire corporate stock held by a
shareholder subject to income tax that would not be taken into account in
determining if an S corporation has a second class of stock under Regulation
section 1.1361-1(1)(2)(iii) or (1)(4)(iii)(C), provided the principal purpose of
the right is not the avoidance or evasion of a nonallocation year.

If any share of corporate stock is treated as being owned by more than one
person, then the share shall be counted as a single share.  It shall be treated
as being owned by a disqualified person if any of the owners is a disqualified
person.

(4)        For purposes of Section 6.6(b), in the case of a person who owns
synthetic equity in the

S corporation, except to the extent provided in regulations, the shares of stock
in such corporation on which such synthetic equity is based shall be treated as
outstanding stock in such corporation and deemed-owned shares of such person if
such treatment of synthetic equity of one or more such persons results in the
treatment of any person as a disqualified person or the treatment of any plan
year as a nonallocation year.

For purposes of this Section 6.6(b)(4), synthetic equity shall be treated as
owned by a person in the same manner as stock is treated as owned by a person,
directly or under the attribution rules of Section 6.6(b)(3)(A).  If, without
regard to this Section 6.6(b)(4), a person is treated as a disqualified person
or a plan year is treated as a nonallocation year, this Section 6.6(b)(4) shall
not be construed to result in the person or plan year not being so treated.

Synthetic equity means any stock option, warrant, restricted stock, deferred
issuance stock right, stock appreciation right payable in stock, or similar
interest or right that gives the

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holder the right to acquire or receive stock of the S corporation in the future;
however, synthetic stock shall not include stock treated as being owned by the
individual pursuant to Section 6.6(b)(3)(B).  A right of first refusal to
acquire stock held by an ESOP shall not be treated as a right to acquire stock
of the S corporation if it meets the requirements of Regulation section
1.409(p)-1 (f)(2)(ii)(B).  Synthetic equity shall include: (A) a stock
appreciation right, phantom stock unit, or similar right to a future cash (or
other non-stock) payment from the S corporation based on the value of such stock
or appreciation in such value; (B) a right to acquire stock or similar interests
in a related entity as set forth in Regulation section 1.409(p)-1 (f)(2)(iii);
and (C) certain nonqualified deferred compensation as set forth in Regulation
section 1.409(p)-1 (f)(2)(iv).

A related entity for the purpose of this Section 6.6(b)(4) means any entity in
which the S corporation holds an interest and which is a partnership, a trust,
an eligible entity that is disregarded as an entity that is separate from its
owner under Regulation section 301.7701-3 or a qualified subchapter S subsidiary
under Code section 1361 (b)(3).

Synthetic equity does not include shares that are deemed-owned ESOP shares (or
any rights with respect to deemed-owned ESOP shares to the extent such rights
are specifically provided under Code section 409(h).

The number of synthetic equity stock shares shall be determined by reference to
the S corporation shares.  The person shall be treated as owning the number of
shares deliverable pursuant to the synthetic equity.  Where payment is made in
cash or other property, the number of synthetic equity shares shall equal the
number of shares having an equal fair market value.  Where the synthetic equity
is a right to purchase or receive shares, the number of shares shall be
determined without regard to lapse restrictions or payment to be made for the
shares.  In the case of synthetic equity that is determined by reference to
shares of stock (or similar interests) in a related entity, the person who is
entitled to the synthetic equity shall be treated as owning shares of stock of
the S corporation with the same aggregate value as the number of shares of stock
(or similar interests) of the related entity (with such value determined without
regard to any lapse restriction as defined in Regulation section 1.83-3(0).

In the case of any synthetic equity to which the preceding paragraph does not
apply, the person who is entitled to the synthetic equity shall be treated as
owning on any date a number of shares of stock in the S corporation equal to the
present value (on that date) of the synthetic equity (with such value determined
without regard to any lapse restriction as defined in Regulation section
1.83-3(i)) divided by the fair market value of a share of the S corporation’s
stock as of that date.  The determination shall be made as of the first day of
the first plan year beginning on or after January 1, 2005.  Thereafter, the plan
shall use the tri-annual recalculation as permitted under Regulation section
1.409(p)-1(f)(4)(iii)(C), subject to the conditions of Regulation section
1.409(p)-

The number of synthetic shares otherwise determined under this Section 6.6(b)(4)
shall be decreased ratably to the extent that shares of the S corporation are
owned by a person who is not an ESOP (and who is subject to federal income
taxes).

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Notwithstanding any other provision of this Section 6.6(b)(4), if a synthetic
equity right includes (directly or indirectly) a right to purchase or receive
shares of S corporation stock that have per-share voting rights greater than the
per-share voting rights of one or more shares of S corporation stock held under
this plan, then the number of shares of deemed owned synthetic equity
attributable to such right shall not be less than the number of shares that
would have the same voting rights if the shares had the same per-share voting
rights as shares held by the plan with the least voting rights.

(5)        Impermissible Accrual - There is an impermissible accrual to the
extent that this plan holds corporate stock that is the stock of an S
corporation and any assets attributable thereto are held under this plan for the
benefit of a disqualified person during a nonallocation year.  For this purpose,
assets attributable to stock in an S corporation owned by this plan include any
distributions, within the meaning of Code section 1368, made on S corporation
stock held in a disqualified person’s account in this ESOP (including earnings
thereon), plus any proceeds from the sale of S corporation securities held for a
disqualified person’s account in this ESOP (including any earnings thereon).  In
the event of a nonallocation year, all S corporation shares and all other assets
attributable to S corporation stock, including distributions, sales proceeds,
and earnings on either distributions or proceeds, held for the account of such
disqualified person in the plan during that year would constitute an
impermissible accrual for the benefit of that person, whether attributable to
contributions in the current year or in prior years.

(6)        Impermissible Allocation - An impermissible allocation occurs during
a nonallocation year to the extent that a contribution or other annual addition
(within the meaning of Section 5.1(c)(1)) is made with respect to the account of
a disqualified person, or the disqualified person otherwise accrues additional
benefits, directly or indirectly under this plan or any other qualified plan of
the employer (including a release and allocation of assets from a suspense
account, as described in Regulation section 54.4975-11 (c) and (d)) that, for
the nonallocation year, would have been added to the account of the disqualified
person under this plan and invested in corporate stock consisting of stock in an
S corporation owned by the plan but for the provisions in this plan that
preclude such addition to the account of the disqualified person, and investment
in corporate stock during a nonallocation year.

(7)        Prevention of Prohibited Allocation - In order to prevent a
nonallocation year or a prohibited allocation during a nonallocation year, the
account of a disqualified person (or a person reasonably expected to become a
disqualified person absent a transfer described in this paragraph) including any
corporate stock shall be transferred into either a separate portion of this plan
that shall be a profit sharing plan or a non-ESOP, qualified plan of the
employer.  In the event of such a transfer, the recipient plan shall be subject
to tax on unrelated business taxable income with respect to the corporate stock.

Section 6.7. - Valuation of the Trust Fund

(a)        The plan administrator shall direct the trustee, as of each
allocation date, and at such other date or dates deemed necessary by the plan
administrator, herein called valuation date, to determine the net worth of the
assets comprising the trust fund as it exists on the valuation date prior to
taking into consideration any contribution to be allocated for that plan
year.  In

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determining such net worth, the trustee shall value the assets comprising the
trust fund at their fair market value as of the valuation date and shall deduct
all expenses for which the trustee has not yet obtained reimbursement from the
employer or the trust fund.

(b)        Valuations must be made in good faith and based on all relevant
factors for determining the fair market value of securities.  In the case of a
transaction between a plan and a disqualified person, value must be determined
as of the date of the transaction.  For all other plan purposes, value must be
determined as of the most recent valuation date under the plan.  An independent
appraisal will not in itself be a good faith determination of value in the case
of a transaction between the plan and a disqualified person.  However, in other
cases, a determination of fair market value based on at least an annual
appraisal independently arrived at by a person who customarily makes such
appraisals and who is independent of any party to the •transaction will be
deemed to be a good faith determination of value.  Corporate stock not readily
tradable on an established securities market shall be valued by an independent
appraiser meeting requirements similar to the requirements of the Regulations
prescribed under Code section 170(a)(1).

Section 6.8. - Voting Corporate Stock

The trustee shall vote all corporate stock held by it as part of the plan assets
at such time and in such manner as the plan administrator shall direct.  If the
plan administrator shall fail or refuse to give the trustee timely instructions
as to how to vote any corporate stock as to which the trustee otherwise has the
right to vote, the trustee shall not exercise its power to vote such corporate
stock, except as described herein with respect to a tender offer or a corporate
matter requiring pass-through voting rights.

Notwithstanding the foregoing, since the employer has a registration-type class
of securities, each participant (or beneficiary) shall be entitled to direct the
trustee as to the manner in which the corporate stock that is entitled to vote
and which is allocated to the corporate stock account of such participant is to
be voted., For purposes of this Section 6.8, the term “registration-type class
of securities” means: (a) a class of securities required to be registered under
Securities Exchange Act of 1934 section 12; and (b) a class of securities which
would be required to be so registered except for the exemption from registration
provided in section 12(g)(2)(H).

In the event a tender offer is made for shares of corporate stock, each
participant (or beneficiary) shall be entitled to direct the trustee as to
whether or not the shares of corporate stock allocated to his corporate stock
account shall be tendered pursuant to such offer.  All shares of corporate stock
allocated to accounts for which the trustee did not receive tender instructions
from a participant or beneficiary and all shares held in the unallocated
corporate stock suspense account will be tendered or not tendered by the trustee
in its discretion and in accordance with its fiduciary duties under ERISA.  The
trustee may not tender any shares that are pledged as security for an exempt
loan without first obtaining any required approvals.

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Section 6.9. - ESOP Loans

(a)        The employer may direct the trustee to incur a loan on behalf of the
trust in a manner and under conditions that will cause the loan to be an “exempt
loan” within the meaning of Code section 4975(d)(2) and the regulations
thereunder.  At the time that the loan is made, the interest rate for the loan
and the price of stock to be acquired with the loan proceeds shall not be such
that plan assets might be drained off.  A loan shall be used primarily for the
benefit of participants and their beneficiaries.  The proceeds of each such loan
shall be used, within a reasonable time after the loan is obtained, only to
purchase corporate stock, to repay the loan, or to repay any prior loan.  The
loan must be at a reasonable rate of interest.  The loan must be for a specific
term and may not be payable at the demand of any person, except in the case of
default.

(b)        Any such loan shall be secured solely by shares of corporate stock
acquired with the proceeds of the loan and shares of such stock that were used
as collateral on a prior loan which was repaid with the proceeds of the current
loan.  Such stock pledged as collateral shall be placed in the unallocated
corporate stock suspense account and released pursuant to Section 6.9(c) as the
loan is repaid. Corporate stock released from the suspense account shall be
allocated in the manner described in Section 3.4.  The payments made with
respect to the loan during a plan year shall not exceed an amount equal to the
sum of the employer contributions and earnings received during or prior to the
year less such payments in prior years.  Such contributions and earnings shall
be accounted for separately under the plan until the loan is repaid.

No person entitled to payment under a loan made pursuant to this Section 6.9
shall have recourse against any trust fund assets other than the stock used as
collateral for the loan, employer contributions of cash that are available to
meet obligations under the loan and earnings attributable to such collateral,
and the investment of such contributions.  With respect to an S corporation, the
employer earnings (whether dividends or otherwise) paid to the plan shall not be
available to meet the loan obligations unless the corporate stock released from
the suspense account and allocated to each eligible participant will have a fair
market value of not less than the amount of the employer earnings that would
otherwise have been allocated to such participant for the year.

(c)        Any pledge of stock as collateral under this Section 6.9 shall
provide for the release of shares so pledged upon the payment of any portion of
the loan.  Shares so pledged shall be released in the proportion that the
principal and interest, paid on the loan for the plan year, bears to the
aggregate principal and interest, paid for the current plan year and each plan
year thereafter, as provided in Regulation section 54.4975- 7(b)(8).

(d)        Payments of principal and interest on any loan under this Section 6.9
shall be made by the trustee at the direction of the employer solely from: (i)
employer contributions (other than contributions of corporate stock) available
to meet obligations under the loan, (ii) earnings from the investment of such
contributions, (iii) earnings attributable to stock pledged as collateral for
the loan, (iv) applicable dividends on stock, (v) the proceeds of a subsequent
loan made to repay the loan, and (vi) the proceeds of the sale of any stock
pledged as collateral for the loan.  If a dividend is paid with respect to
corporate stock that is allocated to a participant, such dividend shall not
constitute an applicable dividend and shall not be applied to repay the loan if

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the corporate stock allocable to the participant from the suspense account by
reason of any payment made on the loan for the plan year does not have a fair
market value equal to or greater than the amount of the dividend.  The
contributions and earnings available to pay the loan must be accounted for
separately by the plan administrator until the loan is repaid.

(e)        Subject to the limitations in Section 5.1 on annual additions to a
participant’s account, assets released from the suspense account by reason of
payment made on a loan shall be allocated immediately upon such payment to the
accounts of all participants who then would be entitled to an allocation of
contributions if such payment had been made on the last day of the plan year,

(f)        In the event of a loan default, the value of plan assets transferred
in satisfaction of the loan shall not exceed the amount of default.  If the
lender is a disqualified person, the terms of the loan shall provide for a
transfer of plan assets upon default only upon and to the extent of the failure
of the plan to meet the payment schedule of the loan.

Section 6.10. - Current Obligations

Employer contributions in cash and other cash received by the trust fund shall
first be applied to pay any current obligations of the trust fund.  Current
obligations means trust fund expenses and trust obligations arising from the
extension of credit to the trust and payable in cash within one year from the
date an employer contribution is due.  With respect to the estates of decedents
who died on or before July 12, 1989, trust obligations shall include the
liability for payment of taxes incurred pursuant to Code section 2210(b) and
imposed by Code section 2001.  Further, the plan administrator shall enter into
a written agreement as described in section 2210(e) before such liability shall
be payable.

Article VII-AMENDMENT AND TERMINATION OF PLAN

Section 7.1. - Right to Discontinue and Amend

It is the expectation of the employer that it will continue this plan
indefinitely and make the payments of its contributions hereunder, but the
continuance of the plan is not assumed as a contractual obligation of the
employer and the right is reserved by the employer, at any time, to reduce,
suspend or discontinue its contributions hereunder.

Section 7.2. - Amendments

Except as herein limited, the employer shall have the right to amend this plan
at any time to any extent that it may deem advisable.  Such amendment shall be
stated in writing.  It shall be authorized by action of the board of directors
under the corporate by-laws and such authorization shall designate the person to
execute the amendment.

The employer’s right to amend the plan shall be limited as follows:

(a)        No amendment shall increase the duties or liabilities of the plan
administrator, the trustee, or other fiduciary without their respective written
consent.

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(b)        No amendments shall have the effect of vesting in the employer any
interest in or control over any contracts issued pursuant hereto or any other
property in the fund.

(c)        No amendment to the plan shall be effective to the extent that it has
the effect of decreasing a participant’s accrued benefit.  This includes a plan
amendment that decreases a participant’s accrued benefit, or otherwise places
greater restrictions or conditions on a participant’s rights to Code section 411
(d)(6) protected benefits, even if the amendment merely adds a restriction or
condition that is permitted under the vesting rules in Code section 411(a)(3)
through (11).  Notwithstanding the preceding sentence, a participant’s account
balance may be reduced to the extent permitted under Code section 412(d)(2) or
to the extent permitted under Regulation sections 1.411 (d)-3 and
1.411(d)-4.  For purposes of this paragraph, a plan amendment that has the
effect of decreasing a participant’s account balance, with respect to benefits
attributable to service before the amendment shall be treated as reducing an
accrued benefit.  Furthermore, if the vesting schedule of a plan is amended, in
the case of an employee who is a participant as of the later of the date such
amendment is adopted or the date it becomes effective, the nonforfeitable
percentage (determined as of such date) of such employee’s right to his
employer-derived accrued benefit will not be less than his percentage computed
under the plan without regard to such amendment.

(d)        A plan amendment may eliminate or restrict the ability of a
participant to receive payment of his or her account balance under a particular
optional form of benefit if the amendment provides a single-sum distribution
form that is otherwise identical to the optional form of benefit being
eliminated or restricted. For this purpose, a single-sum distribution form is
otherwise identical only if the single-sum distribution form is identical in all
respects to the eliminated or restricted optional form of benefit (or would be
identical except that it provides greater rights to the participant) except with
respect to the timing of payments after commencement.  Further, in accordance
with Regulation section 1.411{d)-4, A-2(d)(1)(i), the employer through a plan
amendment or through the exercise of its discretionary power may eliminate or
restrict the ability of a participant to receive payment of his or her account
balance in a single-sum and require the participant to receive his distribution
in the form of installment payments, provided such action is taken on a
nondiscriminatory basis.

(e)        No amendment to the vesting schedule adopted by the employer
hereunder shall deprive a participant of his vested portion of his employer
contribution account to the date of such amendment.  If the plan’s vesting
schedule is amended, or the plan is amended in any way that directly or
indirectly affects the computation of the participant’s nonforfeitable
percentage or if the plan is deemed amended by an automatic change to or from a
top-heavy vesting schedule, each participant with at least 3 years of service
with the employer may elect, within a reasonable period after the adoption of
the amendment or change, to have the nonforfeitable percentage computed under
the plan without regard to such amendment or change.  For participants who do
not have at least one hour of service in any plan year beginning after December
31, 1988, “5 years of service” shall be substituted for “3 years of service” in
the preceding sentence.  The period during which the election may be made shall
commence with the date the amendment is adopted or deemed to be made and shall
end on the latest of:

 

(1)        60 days after the amendment is adopted;

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(2)        60 days after the amendment becomes effective; or

(3)        60 days after the participant is issued written notice of the
amendment by the employer or plan administrator.

Section 7.3. - Protection of Benefits in Case of Plan Merger

In the event of a merger or consolidation with, or transfer of assets or
liabilities to any other plan, each participant will receive a benefit
immediately after such merger, consolidation or transfer (if the plan then
terminated) that is at least equal to the benefit the participant was entitled
to immediately before such merger, consolidation or transfer (if the plan had
terminated).

The transfer of amounts from this trust to a nonqualified foreign trust shall be
treated as a distribution from this plan.  Further, the transfer of assets and
liabilities from this plan to a plan that satisfies Puerto Rico Code section
1165 shall also be treated as a distribution from this plan.

Section 7.4. - Termination of Plan

(a)        When Plan Terminates - This plan shall terminate upon the happening
of any of the following events: legal adjudication of the employer as bankrupt;
a general assignment by the employer to or for the benefit of its creditors; the
legal dissolution of the employer; or termination of the plan by the employer.

(b)        Allocation of Assets - Upon termination, partial termination, or
complete discontinuance of employer contributions, the account balance of each
affected participant who is an active participant or who is not an active
participant but has neither received a complete distribution of his vested
accrued benefit nor incurred five one-year breaks in service (as defined in
Section 4.1) shall be 100% vested and nonforfeitable.  The amount of the fund
assets shall be allocated to each participant, subject to provisions for
expenses of administration of the liquidation, in the ratio that such
participant’s account bears to all accounts.  If a participant under this plan
has terminated his employment at any time after the first day of the plan year
in which the employer made his final contribution to the plan, and if any
portion of any account of such terminated participant was forfeited and
reallocated to the remaining participants, such forfeiture shall be reversed and
the forfeited amount shall be credited to the account of such terminated
participant.

Article VIII- MISCELLANEOUS PROVISIONS

Section 8.1. - Exclusive Benefit - Non-Reversion

The plan is created for the exclusive benefit of the employees of the employer
and shall be interpreted in a manner consistent with its being a qualified plan
as defined in section 401 (a) of the Internal Revenue Code and with ERISA.  The
corpus or income of the trust may not be diverted to or used for other than the
exclusive benefit of the participants or their beneficiaries (except for
defraying reasonable expenses of administering the plan).

Notwithstanding the above, a contribution paid by the employer to the trust may
be repaid to the employer under the following circumstances:

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(a)        Any contribution made by the employer because of a mistake of fact
must be returned to the employer within one year of the contribution.

(b)        In the event the deduction of a contribution made by the employer is
disallowed under Code section 404, such contribution (to the extent disallowed)
must be returned to the employer within one year of the disallowance of the
deduction.

(c)        If the Commissioner of Internal Revenue determines that the plan is
not initially qualified under the Internal Revenue Code, any contribution made
incident to that initial qualification by the employer must be returned to the
employer within one year after the date the initial qualification is denied, but
only if the application for the qualification is made by the time prescribed by
law for filing the employer’s return for the taxable year in which the plan is
adopted, or such later date as the Secretary of the Treasury may prescribe.

Section 8.2. - Inalienability of Benefits

No benefit or interest available hereunder shall be subject to assignment or
alienation, either voluntarily or involuntarily.  The preceding sentence shall
also apply to the creation, assignment, or recognition of a right to any benefit
payable with respect to a participant pursuant to a domestic relations order,
unless such order is determined to be a qualified domestic relations order as
defined in Code section 414(p), or any domestic relations order entered before
January 1, 1985.

Notwithstanding the preceding paragraph, effective with respect to judgments,
orders, and decrees issued, and settlement agreements entered into, on or after
August 5, 1997, a participant’s benefit (and that of his spouse) shall be
reduced to satisfy liabilities of the participant to the plan due to (1) the
participant being convicted of committing a crime involving the plan, (2) a
civil judgment (or consent order or decree) entered by a court in an action
brought in connection with a violation of the fiduciary provisions of part 4 of
subtitle B of Title I of ERISA, or (3) a settlement agreement between the
Secretary of Labor or the Pension Benefit Guaranty Corporation and the
participant in connection with a violation of the fiduciary provisions of
ERISA.  No reduction shall be made pursuant to this paragraph, unless the
judgment, order, decree, or settlement agreement shall expressly provide for the
offset of all or part of the amount ordered or required to be paid to the plan
against the participant’s benefits provided under the plan.

Section 8.3. - Employer-Employee Relationship

This plan is not to be construed as creating or changing any contract of
employment between the employer and its employees, and the employer retains the
right to deal with its employees in the same manner as though this plan had not
been created.

Section 8.4. - Binding Agreement

This plan shall be binding on the heirs, executors, administrators, successors
and assigns as such terms may be applicable to any or all parties hereto, and on
any participants, present or future.

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Section 8.5. - Separability

If any provision of this plan shall be held invalid or unenforceable, such
invalidity or unenforceability shall not affect any other provision hereof and
this plan shall be construed and enforced as if such provision had not been
included.

Section 8.6. - Construction

The plan shall be construed in accordance with the laws of the state in which
the employer was incorporated and with ERISA.

Section 8.7. - Copies of Plan

This plan may be executed in any number of counterparts, each of which shall be
deemed as an original, and said counterparts shall constitute but one and the
same instrument that may be sufficiently evidenced by any one counterpart.

Section 8.8. - Interpretation

Wherever appropriate, words used in this plan in the singular may include the
plural or the plural may be read as singular, and the masculine may include the
feminine.

Section 8.9. - Securities and Exchange Commission Approval

The employer may request an interpretative letter from the Securities and
Exchange Commission stating that the transfers of corporate stock contemplated
hereunder do not involve transactions requiring a registration of such corporate
stock under the Securities Act of 1933.  In the event that a favorable
interpretative letter is not obtained, the employer reserves the right to amend
the plan and trust retroactively to their effective dates in order to obtain a
favorable interpretative letter or to terminate the plan.

Section 8.10. - Nonterminable Right of Certain Holders

No corporate stock, except as provided.in Section 5.5, acquired with the
proceeds of an exempt loan may be subject to a put, call, or other option, or
buy-sell or similar arrangement when held by and when distributed from the
trust, whether or not the plan is then an ESOP.  This right is
nonterminable.  Such right shall continue to exist under the terms of this plan
so long as any corporate stock acquired with the proceeds of such a loan is held
by the trust or by any participant or beneficiary; and neither the repayment of
such loan nor the failure of the plan to be an ESOP, nor an amendment of the
plan shall cause a termination of said right.

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IN WITNESS WHEREOF, the Employer has caused this plan to be executed this 30th
day of December,  2014.

 

 

 

 

 

Employer:

 

 

 

Peoples Security Bank and Trust Company

 

 

 

By:

/s/

Michael Jake

 

 

 

 

 

Title:

 

EVP/Chief Risk Officer

 

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2016 COMPLIANCE AMENDMENT
TO THE
PEOPLES SECURITY BANK AND TRUST CO.
EMPLOYEE STOCK OWNERSHIP PLAN

As authorized by Section 7.2 of the Peoples Security Bank and Trust Co. Employee
Stock Ownership Plan (“Plan”) as amended and restated effective January 1, 2015,
the employer, Peoples Security Bank and Trust Company, hereby amends the Plan to
clarify the administrative Operation of the Plan. This amendment shall supersede
the provisions of the Plan to the extent those provisions are inconsistent with
the provisions of this amendment. The employer hereby amends the Plan in the
following manner:

FIRST: Directed Investment Account

Section 3.4(c) is amended to clarify that a participant’s election made in
writing may be made electronically if the Plan Administrator established such a
procedure. Further, the annual period for making the election is extended to
allow time for the Plan to provide to the qualified participants the current
fair market stock value based on the applicable independent appraisal. As
amended, the first paragraph of Section 3.4(c)(1) shall read as follows:

(c) Directed Investment Account

(1) Each qualified participant, for plan years beginning after December 31,
1986, may elect within the annual diversification election period for the plan
year during the qualified election period to direct the trustee in writing
(either on a form signed by the participant and supplied by and filed with the
plan administrator or through an electronic procedure established by the plan
administrator) as to the investment of 25% of the total number of shares of
corporate stock acquired by or contributed to the plan after December 31, 1986
that have ever been allocated to such qualified participant’s corporate stock
account (reduced by the number of shares of corporate stock previously invested
pursuant to a prior election). In the case of the election year in which the
participant can make his last election, the preceding sentence shall be applied
by substituting “50%” for “25%.” For this purpose, a participant’s corporate
stock account shall be segregated into two accounts: (A) the Pre-1987 corporate
stock account and (B) the Post-1986 corporate stock account. lf the qualified
participant elects to direct the trustee as to the investment of his Post-1986
corporate stock account, such direction shall be effective no later than 180
days after the close of the plan year to which such direction applies.

As amended, Section 3.4(c)(2) shall contain an additional subparagraph (C) that
shall read as follows:

(C) Annual diversification election period means the period commencing as of the
day after the end of each plan year in the qualified election period and ending
90 days after the date that the value of the shares subject to the
diversification election is provided to the qualified participant.

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SECOND: Beneficiary Designation

Section 4.2(a)(5)(8) is amended to expand the methods by which a beneficiary may
be designated, where spousal consent is not required. As amended, Section
4.2(a)(5)(8) shall read as follows:

(B) Beneficiary Designation – Subject to the spousal consent requirements of
Section 5.2, the participant shall have the right to designate his
beneficiaries, including a contingent death beneficiary, and shall have the
right at any time to change such beneficiaries. The designation shall be made in
writing, either on a form signed by the participant and supplied by and filed
with the plan administrator or through an electronic procedure established by
the plan administrator for the designation of a beneficiary where no spousal
consent is required by Section 5.2. If the participant fails to designate a
beneficiary, or if the designated person or persons predecease the participant,
“beneficiary” shall mean the spouse, children, parents, siblings (by the whole
blood or adoption), or estate of the participant, in the order listed. For this
purpose, the terms children, parents, and siblings shall exclude step
relationships.

ln the absence of a beneficiary designation duly filed or otherwise recorded, if
a designated beneficiary dies after the participant has died but before the plan
has commenced distribution to the designated beneficiary, the plan shall be
administered as set forth in this paragraph. The death benefit will be paid to
the designated beneficiary’s estate in one lump sum. If the deceased designated
beneficiary was not the participant’s surviving spouse, distribution will be
completed by December 31 of the fifth year following the participant’s date of
death. If the deceased designated beneficiary was the participant’s surviving
spouse, distribution will be completed by December 31 of the fifth year
following the beneficiary’s date of death.

For purposes of this Section 4.2(a)(5), if a spouse or beneficiary of the
participant dies simultaneously with the participant, the participant shall be
deemed to be the survivor and to have died subsequent to such spouse or
beneficiary. Likewise, if a beneficiary named by a designated beneficiary dies
simultaneously with a designated beneficiary, the designated beneficiary shall
be deemed to be the survivor and to have died subsequent to the beneficiary
named by the designated beneficiary.

lf a participant designates his spouse as the beneficiary and the participant
and such spouse are legally divorced subsequent to the date of such designation;
then, the designation shall be administered as if such spouse had predeceased
the participant unless the participant, subsequent to the legal divorce,
reaffirms the designation by completing a new beneficiary designation and duly
filing or otherwise recording it with the plan administrator.

THIRD: Unclaimed Benefits

Section 4.2(d) is amended to remove the requirement that the participant (or
beneficiary) make his whereabouts known in writing.  As amended, Section
4.2(d)(1)  shall read as follows:

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(1) Forfeiture – The plan does not require the trustee or the plan administrator
to search for, or to ascertain the whereabouts of, any participant or
beneficiary. At the time the participant’s or beneficiary’s benefit becomes
distributable under the plan, the plan administrator, by certified or registered
mail addressed to his last known address of record, shall notify any participant
or beneficiary that he is entitled to a distribution under this plan. If the
participant or beneficiary falls to claim his distributive share or make his
whereabouts known to the plan administrator within twelve months from the date
of mailing of the notice, the plan administrator shall treat the participant’s
or beneficiary’s unclaimed payable accrued benefit as forfeited and shall
reallocate such forfeiture in accordance with Section 4.2(c). A forfeiture under
this paragraph shall occur at the end of the notice period or, if later, the
earliest date applicable Treasury regulations would permit the forfeiture. These
forfeiture provisions apply solely to the participant’s or beneficiary’s accrued
benefit derived from employer contributions.

FOURTH: Effective Date

These amendments are effective as of January 1, 2016, except as otherwise
provided herein.

FIFTH: Remaining Plan Provisions

All other provisions of the Plan remain  in full force and effect.

Executed this 16th day of December,  2016 by the duly authorized agent of
Peoples Security Bank and Trust Company.

 

 

 

/s/ Michael Jake

 

Title: EVP

 

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