Exhibit 10.3

BIOMET 401(k) SAVINGS AND

RETIREMENT PLAN

 

Plan Number 002    Effective as of April 1, 2007    (except as otherwise herein
provided)

 

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TABLE OF CONTENTS

 

          Page ARTICLE I.    RESTATEMENT OF PLAN    2 ARTICLE II.    DEFINITIONS
AND CONSTRUCTION    3 Section 2.01.    Definitions    3 Section 2.02.   
Construction and Governing Law    23 ARTICLE III.    PARTICIPATION    25 Section
3.01.    Participation    25 Section 3.02.    Cessation of Participation    27
Section 3.03.    Reemployment    27 Section 3.04.    Change in Employment Status
   27 Section 3.05.    Transfer of Employment Between Employers    28 Section
3.06.    Completion of Forms by Participants and Beneficiaries    29 ARTICLE IV.
   CONTRIBUTIONS    29 Section 4.01.    Contributions    29 Section 4.02.   
Pre-Tax Contributions    30 Section 4.03.    Matching Contributions    32
Section 4.04.    Regular and Nonelective Contributions    33 Section 4.05.   
Participant After-Tax Contributions    35 Section 4.06.    Payment,
Deductibility, and Nature of Contributions and Dividends    35 Section 4.07.   
Expenses of Plan    36 Section 4.08.    Recapture of Tax Credit    36 Section
4.09.    Rollover Contributions and Transfers to the Plan    37 Section 4.10.   
Employer Contributions Under the Biomet, Inc. Flexible Benefits Plan    38
ARTICLE V.    LIMITATIONS ON CONTRIBUTIONS AND OTHER ADDITIONS    39 Section
5.01.    Applicability of Article    39 Section 5.02.    Definitions    39
Section 5.03.    Distribution of Excess Deferral Amount    44 Section 5.04.   
Limitations on Contributions under Code Section 401(k) and the Distribution of
Excess Contributions    45 Section 5.05.    Limitations on Contributions under
Code Section 401(m) and the Distribution of Excess Aggregate Contributions    46
Section 5.06.    Stock Bonus Component Aggregation    48 Section 5.07.   
Limitation under Code Section 415    48 Section 5.08.    Priority of Limitations
   51

 

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ARTICLE VI.    ACCOUNTING    51 Section 6.01.    Participant Accounts    51
Section 6.02.    Valuation    53 Section 6.03.    Value of Accounts of
Participants    53 Section 6.04.    Allocation of Earnings to Non-Stock
Subaccounts    54 Section 6.05.    Calculation on Basis of Employer Stock    54
ARTICLE VII.    BENEFITS    55 Section 7.01.    Retirement Benefits    55
Section 7.02.    Death Benefits    56 Section 7.03.    Beneficiaries    56
Section 7.04.    Termination Benefits    58 Section 7.05.    In-Service
Withdrawals of Pre-Tax Contribution Account    59 Section 7.06.    In-Service
Withdrawals of Rollover/Transfer Account    63 Section 7.07.    In-Service
Withdrawals from Savings Account    64 Section 7.08.    In-Service Withdrawals
Upon Attainment of Age 59 1/2    64 Section 7.09.    Charge or Discount    64
Section 7.10.    Persons Under Legal Disability    64 Section 7.11.    Payments
at Direction of Administrator    65 Section 7.12.    Limitation on Distributions
from Tax Credit Account    65 Section 7.13.    Special Rollover Distribution
Rules    65 Section 7.14.    Requirements for Commencement and Distribution of
Benefits    68 ARTICLE VIII.    PLAN LOANS    70 Section 8.01.    Plan Loans   
70 Section 8.02.    Terms and Conditions    71 Section 8.03.    Loan Procedures
   75 ARTICLE IX.    BORROWING BY PLAN    75 Section 9.01.    Borrowing by the
Plan    75 Section 9.02.    Restrictions on Loans    79 ARTICLE X.    VESTING   
80 Section 10.01.    Vesting Standards    80 Section 10.02.    Forfeitures    81
Section 10.03.    Reinstatement    81 ARTICLE XI.    ADMINISTRATION OF THE PLAN
   82 Section 11.01.    Administrator    82 Section 11.02.    Claims Procedure
   84 Section 11.03.    Employment of Consultants    85 Section 11.04.   
Delegation by Administrator    85

 

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Section 11.05.    Qualified Public Accountant    86 Section 11.06.    Fiduciary
Liability    86 Section 11.07.    Fiduciary Insurance    86 ARTICLE XII.   
TRUST    87 Section 12.01.    Trust Funds    87 Section 12.02.    Investments   
88 Section 12.03.    Transfers Among Investment Funds    89 Section 12.04.   
Investment of Stock Subaccounts    91 Section 12.05.    Investments    91
Section 12.06.    Acquisition and Disposition of Employer Stock    92 Section
12.07.    Voting of Stock    92 Section 12.08.    ERISA Section 404(c)    93
ARTICLE XIII.    AMENDMENT OR TERMINATION OF PLAN    94 Section 13.01.   
Amendment or Termination    94 Section 13.02.    Amendment for Qualification of
Plan    94 Section 13.03.    Restrictions on Amendments    95 Section 13.04.   
Discontinuance or Suspension of Contributions    95 Section 13.05.    Allocation
of Assets on Termination    95 ARTICLE XIV.    ENTRY AND WITHDRAWAL OF EMPLOYERS
   96 Section 14.01.    Entry of Employers    96 Section 14.02.    Withdrawal
from Plan    96 ARTICLE XV.    TOP-HEAVY PROVISIONS    97 Section 15.01.   
Definitions    97 Section 15.02.    Top-Heavy Plan Provisions    100 ARTICLE
XVI.    NONALIENATION OF BENEFITS AND DOMESTIC RELATIONS ORDERS    102 Section
16.01.    Nonalienation of Benefits    102 Section 16.02.    Procedures
Regarding Domestic Relations Orders    103 Section 16.03.    Surviving Spouse   
105 ARTICLE XVII.    OPTIONS AND RESTRICTIONS ON EMPLOYER STOCK    105 Section
17.01.    Participant Put Option    105 Section 17.02.    Restrictions on
Transfer    106 Section 17.03.    Payment of Purchase Price    109 Section
17.04.    Nonterminable Protections and Rights    110 Section 17.05.   
Restrictions on Loans    110

 

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ARTICLE XVIII.    MISCELLANEOUS PROVISIONS RELATING TO EMPLOYER STOCK    110
Section 18.01.    Stock Dividends and Rights    110 Section 18.02.   
Endorsement of Stock Certificates    111 Section 18.03.    Securities Laws   
111 Section 18.04.    Dividends on Company Stock    111 ARTICLE XIX.   
MISCELLANEOUS    112 Section 19.01.    Non-Diversion    112 Section 19.02.   
Military Service    113 Section 19.03.    Merger, Consolidation of Plans, or
Transfer of Plan Assets    114 Section 19.04.    Allocation of Fiduciary
Responsibilities    114 Section 19.05.    Limitation of Rights and Obligations
   114 Section 19.06.    Notice    115 Section 19.07.    Right of Recovery   
115 Section 19.08.    Legal Counsel    116 Section 19.09.    Evidence of Action
   116 Section 19.10.    Audit    116 Section 19.11.    Bonding    116 Section
19.12.    Receipt and Release    116 Section 19.13.    Legal Actions    117
Section 19.14.    Reliance    117 Section 19.15.    Entire Plan    117 Section
19.16.    Counterparts    117 ARTICLE XX.    SPECIAL PROVISIONS RELATING TO
AMOUNTS TRANSFERRED FROM THE INTERPORE INTERNATIONAL, INC. RETIREMENT SAVINGS
PLAN    117 Section 20.01.    General Provisions    117 Section 20.02.   
Vesting    118 Section 20.03.    Distribution of Benefits    119 Section 20.04.
   Transferred Participant Loans    119

 

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BIOMET

401(k) SAVINGS AND RETIREMENT PLAN

This restated Plan is hereby executed on behalf of Biomet, Inc., an Indiana
corporation, effective as specifically provided herein.

PRELIMINARY INFORMATION

Desiring to recognize and reward the contribution made to it by its employees,
Biomet, Inc. established the Biomet, Inc. 401(k) Profit Sharing Plan effective
as of June 1, 1985. The Biomet, Inc. 401(k) Profit Sharing Plan has been amended
several times since that date, and amended and restated most recently effective
January 1, 2006. Effective December 31, 1994, the Kirschner Medical Corporation
401(k) Savings and Retirement Plan was merged with the Biomet, Inc. 401(k)
Profit Sharing Plan. Effective January 1, 2006, the Interpore International,
Inc. Retirement Savings Plan was merged into the Biomet, Inc. 401(k) Profit
Sharing Plan. Now, effective April 1, 2007, the Biomet, Inc. Employee Stock
Bonus Plan shall be merged into the Biomet, Inc. 401(k) Profit Sharing Plan and
the merged plan shall be restated and designated as the Biomet 401(k) Savings
and Retirement Plan (“Plan”).

The Plan is an employee stock ownership plan, which is a stock bonus plan
designed to satisfy the requirements of Code Sections 401(a) (including, but not
limited to Code Sections 401(a)(23)) and 4975(e)(7), as amended), and a profit
sharing plan with a qualified cash or deferred arrangement within the meaning of
Code Sections 401(a)(27) and 401(k), and the appropriate provisions of the Plan
shall likewise be interpreted to accomplish this end. The Plan shall comply with
the Employee Retirement Income Security Act of 1974, as amended, and the
Internal Revenue Code of 1986, as amended.

The purpose of the Plan is to (i) provide retirement income to eligible
employees of the Company and any adopting subsidiaries or affiliated employers
who become Participants in this

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Plan and (ii) invest the stock bonus component of the Plan primarily in the
stock of the Company thereby enabling Participants to obtain a proprietary
interest in the Company and encouraging such Participants to devote themselves
to the development, growth, and prosperity of the Company and any adopting
subsidiaries or affiliated employers.

The Company has entered into a Trust Agreement with the Trustee to hold the
assets of the Plan.

ARTICLE I.

RESTATEMENT OF PLAN

The Biomet 401(k) Retirement and Savings Plan (“Plan”) is hereby amended and
restated, effective as of April 1, 2007, except as otherwise specifically
provided herein, to (i) incorporate all amendments to the Biomet, Inc. Employee
Stock Bonus Plan since its prior restatement, including a good faith amendment
to comply with the Economic Growth and Tax Relief Reconciliation Act of 2001
(“EGTRRA”) effective for Plan Years beginning on and after January 1, 2002,
(ii) update the Plan to comply with regulatory guidance included in the 2006
Cumulative List under IRS Notice 2007-3, (iii) incorporate changes to comply
with the Pension Protection Act of 2006 with January 1, 2007 and January 1, 2008
effective dates, and (iv) make certain other changes determined by the Company
to be necessary or desirable. Except as otherwise specifically provided herein
or as required by the Code or ERISA, the Plan as hereinafter set forth
establishes the rights and obligations with respect to individuals who are
Employees on and after such dates, as applicable, and to transactions under the
Plan on and after such dates, as applicable. The rights and benefits, if any, of
individuals who are not Employees on or after such dates, as applicable, shall
be determined in accordance with the terms and provisions of the Plan that were
in effect on the date that their employment terminated. The

 

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adoption of this restatement of the Plan is conditioned on the receipt of a
determination letter, in a form satisfactory to the Company, from the Internal
Revenue Service with respect to the Plan. Except to the extent specifically
provided otherwise herein, all contributions to the Plan may be made without
regard to profits for the taxable year; provided, however, the profit sharing
component of the Plan shall qualify as a discretionary contribution profit
sharing plan for purposes of Code Sections 401(a), 402, 412, and 417.

ARTICLE II.

DEFINITIONS AND CONSTRUCTION

Section 2.01. Definitions. When the initial letter of a word or phrase is
capitalized herein, the meaning of such word or phrase shall be as follows:

(a) “Account” means the following separate bookkeeping accounts maintained for
each Participant, reflecting his accrued benefit in the Plan. With respect to
each Account maintained for each Participant, separate subaccounts shall be
maintained thereunder referred to as the “Stock Subaccount,” which shall
constitute the stock bonus plan component of the Plan, and the “Non-Stock
Subaccount,” which shall constitute the profit sharing plan component of the
Plan. The “Stock Subaccount” shall mean the Participant’s interest in the Trust
Fund attributable to shares of Employer Stock (including any Leveraged Shares)
acquired or held by the Trust and invested in Employer Stock and allocated to
the Participant’s Account at any time on or after April 1, 2007, or pursuant to
the Participant’s election under Section 12.02, Section 12.03 or Section 12.04,
plus any allocable earnings or losses attributable to Employer Stock. The
“Non-Stock Subaccount” shall mean the Participant’s interest in the Trust Fund
attributable to assets other than Employer Stock acquired or held by the Trust
on and after April 1, 2007, in assets other than Employer Stock pursuant to the
Participant’s election under Sections 12.02, 12.03 and/or 12.04, plus any
allocable earnings or losses attributable to assets other than Employer Stock.

 

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(1) “Dividend Account” means the account maintained to reflect the cash
dividends paid into the stock bonus component of the Plan, and used to purchase
shares of Employer Stock to be allocated to a Participant, pursuant to the
Participant’s election under Section 18.04.

(2) “Pre-Tax Contribution Account” means the account maintained to reflect the
accrued benefit of the Participant attributable to his Pre-Tax Contributions,
including Catch-Up Contributions. This account shall also reflect the
Participant’s “Employee Pre-Tax Account” balance (if any) transferred from the
Kirschner Medical Corporation 401(k) Savings and Retirement Plan effective as of
December 31, 1994.

(3) “Matching Account” means the account maintained to reflect the accrued
benefit of the Participant attributable to his share of Matching Contributions

(4) “Nonelective Contribution Account” means the account maintained to reflect
the accrued benefit of the Participant attributable to his share of Nonelective
Contributions. This account shall also reflect the Participant’s “Discretionary
Account” balance (if any) transferred from the Kirschner Medical Corporation
401(k) Savings and Retirement Plan effective as of December 31, 1994.

(5) “Regular Account” means the account maintained to reflect the accrued
benefit of the Participant attributable to his share of Regular Contributions.
This account shall also reflect the Participant’s “Regular Account” balance (if
any) transferred from the Biomet, Inc. Employee Stock Bonus Plan effective as of
April 1, 2007.

 

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(6) “Rollover/Transfer Account” means the account maintained to reflect the
accrued benefit of the Participant attributable to his Rollover Contributions.
This account shall also reflect the Employer Matching Account balance (if any)
transferred from the Kirschner Medical Corporation 401(k) Savings and Retirement
Plan effective as of December 31, 1994.

(7) “Savings Account” means the Participant’s Savings Account balance (if any)
transferred from the Biomet, Inc. Employee Stock Bonus Plan, effective
April 1, 2007, which reflects the accrued benefit of the Participant
attributable to his after-tax contributions.

(8) “Tax Credit Account” means the Participant’s Tax Credit Account balance (if
any) transferred from the Biomet, Inc. Employee Stock Bonus Plan, effective
April 1, 2007, which reflects any and all amounts transferred to the Biomet,
Inc. Employee Stock Bonus Plan by an Employer in accordance with Code Sections
41(c)(1)(B) or 48(n)(1) (as in effect prior to the enactment of the Tax Reform
Act of 1984).

(b) “Acquisition Loan” means a loan to the Trust (or to the trust of the Biomet,
Inc. Employee Stock Bonus Plan) that is either made or guaranteed by a Party in
Interest and is used to finance the purchase of Employer Stock by the Trustee.
If the context so requires, the term “Acquisition Loan” also refers to the
agreement pursuant to which the Acquisition Loan is made.

(c) “Administrator” means the Benefits Committee, as defined in Section 11.01 of
the Plan, which shall serve as the plan administrator under ERISA; provided,
however, to the extent the Benefits Committee has delegated duties pursuant to
Section 11.04, the term “Administrator” shall be deemed to include the person to
whom such duties have been delegated.

 

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(d) “Affiliated Employer” means an Employer and any corporation that is a member
of a controlled group of corporations (as defined in Code Section 414(b)) that
includes an Employer; any trade or business (whether or not incorporated) that
is under common control (as defined in Code Section 414(c)) with an Employer;
any organization (whether or not incorporated) that is a member of an affiliated
service group (as defined in Code Section 414(m)) that includes an Employer; and
any other entity required to be aggregated with an Employer pursuant to
regulations under Code Section 414(o). For purposes of Code Section 415, in
applying Code Sections 414(b) and (c) to determine an Affiliated Employer the
phrase “more than 50 percent” shall be substituted for the phrase “at least 80
percent” each place it appears in Code Section 1563(a)(1). An Affiliated
Employer shall be included as such only for the period or periods during which
such employer is under common control, affiliated, or aggregated and only to the
extent required by any applicable provision of the Code.

(e) “Allocation Date” means the last day of the fiscal year of the Company
(May 31) and such other date or dates as the Administrator may designate.

(f) “Alternate Payee” means an alternate payee, as defined by Code
Section 414(p)(8).

(g) “Applicable Form” means the appropriate form as designated and furnished by
the Administrator to make an election or provide a notice required by the Plan.
To the extent permitted by the Code, or ERISA, and the regulations thereunder,
the Administrator may prescribe an oral, electronic, or telephonic form in lieu
of or in addition to a paper form.

(h) “Beneficiary” has the meaning set forth in Section 7.03.

(i) “Board of Directors” means the board of directors of the Company.

 

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(j) “Break in Service” means, with respect to an Employee, a Vesting Computation
Period during which an Employee completes five hundred (500) or fewer Hours of
Service. Solely for purposes of determining whether a Break in Service has
occurred in the Vesting Computation Period after 1984 for eligibility and
vesting purposes, an Employee shall receive credit for each Hour of Service, not
to exceed five hundred one (501), for each Hour of Service the Employee
otherwise normally would have been credited (or if such hours cannot be
determined, eight (8) Hours of Service per normal work day of absence), if the
Employee is absent from work (i) by reason of the pregnancy of the Employee,
(ii) by reason of the birth of a child of the Employee, (iii) by reason of the
placement of a child with the Employee in connection with the adoption of such
child by such Employee, or (iv) for purposes of caring for such child for a
period beginning immediately following such birth or placement. Such Hours of
Service shall be credited (i) to the Vesting Computation Period in which the
absence begins if the crediting is necessary to prevent a Break in Service in
that period, or (ii) in all other cases, to the following Vesting Computation
Period. No such Hours of Service shall be credited unless the Employee furnishes
to the Administrator such timely information as the Administrator may reasonably
require to establish (i) that the absence from work is for one of the reasons
provided above, and (ii) the number of days for which there was such an absence.
To the extent required by the FMLA and the regulations thereunder, an Employee
shall not incur a Break in Service for eligibility and Vesting purposes on or
after August 5, 1993, on account of an absence from work that qualifies as a
family or medical leave under the FMLA. To the extent required by the USERRA and
the regulations thereunder, an Employee shall not incur a Break in Service for
eligibility and Vesting purposes on or after December 12, 1994, on account of a
period of qualified military service under the USERRA and Code
Section 414(u)(8)(A). Notwithstanding

 

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the preceding provisions, for purposes of determining whether a Break in Service
has occurred for purposes determining an Employee’s eligibility and Vesting, an
Employee who was a Participant in the Biomet, Inc. Profit Sharing 401(k) Plan
shall incur a Break in Service during the period beginning June 1, 2005, and
ending December 31, 2006, if the Participant has five hundred (500) or fewer
Hours of Service during (i) the twelve (12) month period beginning on June 1,
2005, and ending on May 31, 2006, or (ii) the twelve (12) month period beginning
on January 1, 2006, and ending on December 31, 2006; provided, however, the
Employee shall incur at most only one (1) Break in Service during said period
beginning June 1, 2005, and ending December 31, 2006. In addition, an Employee
who was a Participant in the Biomet, Inc. Employee Stock Bonus Plan shall incur
a Break in Service during the period beginning June 1, 2006, and ending
December 31, 2007, if the Participant has five hundred (500) or fewer Hours of
Service during (i) the twelve (12) month period beginning on June 1, 2006, and
ending on May 31, 2007 or (ii) the twelve (12) month period beginning on
January 1, 2007, and ending on December 31, 2007, provided, however, the
Employee shall incur at most only one (1) Break in Service during said period
beginning June 1, 2006, and ending December 31, 2007.

(k) Catch-Up Contribution Limit” means, with respect to a Plan Year, the
applicable dollar limit under Code Section 414(v).

(l) “Catch-Up Eligible Participant” means, with respect to a Plan Year, an
Employee who is eligible to make Pre-Tax Contributions and who will reach age 50
by the end of the Plan Year.

(m) “Code” means the Internal Revenue Code of 1986, as amended from time to
time.

(n) “Company” means Biomet, Inc. or any successor thereto.

 

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(o) “Continuous Employment” means any period for which an Employee is paid, or
entitled to payment, for duties performed for an Affiliated Employer, on
consecutive days without interruption by any period of more than two consecutive
business days during which the Employee performs no such duties, excluding any
days that the Employee performs no such duties as a result of weekends,
vacation, holiday, illness, incapacity (including disability), layoff, jury
duty, military duty or other approved leave of absence.

(p) “Contributions” means the following types of contributions to the Plan:

(1) “Pre-Tax Contributions” means contributions made to the Plan by an Employer
at the election of a Participant pursuant to Section 4.02 provided, however, to
the extent provided in Subsection 4.02(b), Catch-Up Contributions shall not be
treated as Pre-Tax Contributions.

(2) “Catch-Up Contribution” means a Pre-Tax Contribution made by a Catch-Up
Eligible Participant, to the extent that such Contribution exceeds the Pre-Tax
Contribution Limit but does not exceed the Catch-Up Contribution Limit.

(3) “Matching Contributions” means contributions made to the Plan by an Employer
for a Plan Year by reason of Pre-Tax Contributions of a Participant pursuant to
Section 4.03.

(4) “Nonelective Contributions” means contributions made to the Plan by an
Employer for a Plan Year that are designated as Nonelective Contributions
pursuant to Subsection 4.04(b).

(5) “Regular Contributions” means contributions made to the Plan by an Employer
for a Plan Year that are designated as Regular Contributions pursuant to
Subsection 4.04(a).

 

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(6) “Rollover Contribution” means, with respect to any Participant, a rollover
contribution or transfer made by, or on behalf of, the Participant pursuant to
Section 4.09.

(q) “Cost of Living Adjustment” means the cost of living adjustment prescribed
by the Secretary of the Treasury under Code Section 415(d) for any applicable
year.

(r) “Covered Participant” means, with respect to a Plan Year, a Participant who
completed an Hour of Service as an Eligible Employee during the Plan Year and
who remains employed as an Employee as of the applicable Allocation Date.

(s) “Disability” or “Disabled” means, with respect to a Participant, that he has
a disability as determined for purposes of the Social Security Act that
qualifies the Participant for permanent disability insurance payments in
accordance with such act. The Administrator may require subsequent proof of
continued Disability and a Participant shall not be considered to be Disabled
until he has shown to the Administrator’s satisfaction that he is disabled
within the meaning of this Subsection.

(t) “Disability Retirement Date” means the first day of the month (prior to the
Participant’s Early Retirement Date or Normal Retirement Date) after which a
Participant Retires because of a Disability.

(u) “Early Retirement Date” means the first day of the month (prior to the
Participant’s Normal Retirement Date) after which a Participant Retires from the
employment of an Employer after attaining age fifty-five (55) and completing six
(6) Years of Service. Notwithstanding the foregoing, “Early Retirement Date” for
a Participant who was an Eligible Employee and a participant in the Interpore
International, Inc. Retirement Savings Plan on December 31, 2005, shall mean the
first day of the month (prior to the Participant’s Normal Retirement Date) after
which such Participant Retires from the employment of an Employer after
attaining age fifty-five (55).

 

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(v) “Election Period” means the 5-Plan Year period beginning with the Plan Year
after the Plan Year in which the Participant reaches age fifty-five (55) (or, if
later, beginning with the Plan Year after the first Plan Year in which the
individual first became a Participant).

(w) “Eligible Employee” means an Employee of an Employer who has met the
participation requirements under Section 3.01; provided, however, the term
“Eligible Employee” shall not include any of the following Employees:
(i) “leased employees” (as defined in Subsection 2.01(x) below); (ii) seasonal
Employees, (iii) co-op Employees, and (iv) student interns.

(x) “Employee” means any common law employee employed by an Affiliated Employer,
except (i) any individual designated in good faith by an Employer as an
independent contractor, regardless of whether such person is later determined by
the Internal Revenue Service, a court of law, or any other agency to be a common
law employee for tax, workers compensation or other purposes, (ii) any
individual who is a nonresident alien and who receives no earned income (within
the meaning of Code Section 911(d)(2)) from an Employer that constitutes income
from sources within the United States within the meaning of Code
Section 861(a)(3), and (iii) any person who is a member of a unit covered by
collective bargaining agreement between his Employer and a collective bargaining
agent, provided that retirement benefits have been a subject of good faith
bargaining, unless the collective bargaining agreement provides for coverage
under the Plan. Notwithstanding any other provision of the Plan, for purposes of
satisfying the requirements of Code Section 414(n)(3), a leased employee shall
be treated as an Employee; provided, however, such leased employee shall not
become a

 

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Participant unless he is an Employee without regard to this sentence and he
satisfies the participation requirements of Article III. Effective for Plan
Years beginning on or after January 1, 1997, the term “leased employee” means
any person (other than an individual employed by an Affiliated Employer) who
pursuant to an agreement between the Affiliated Employer and any other person
(“leasing organization”) has performed services for the Affiliated Employer (or
for the Affiliated Employer and related persons determined in accordance with
Code Section 414(n)(6)) on a substantially full-time basis for a period of at
least one (1) year, and such services are performed under the primary direction
or control of the Affiliated Employer. Contributions or benefits provided to a
leased employee by the leasing organization that are attributable to services
performed for the Affiliated Employer shall be treated as provided by the
Affiliated Employer. A leased employee shall not be considered an Employee if
(i) he is covered by a money purchase pension plan providing (1) a nonintegrated
employer contribution rate of at least ten percent (10%) of compensation, as
defined in Code Section 415(n)(5)(C)(iii), (2) immediate participation, and
(3) full and immediate vesting; and (ii) leased employees do not constitute more
than twenty percent (20%) of the Affiliated Employers’ nonhighly compensated
workforce, as defined in Code Section 414(n)(5)(C)(ii).

(y) “Employer” means, severally, the Company and any other Affiliated Employer
or any part or division thereof authorized by the Administrator to participate
in the Plan in a manner consistent with Article XIV with respect to its
Employees. As of April 1, 2007, the following Affiliated Employers are
considered Employers under the Plan: Biomet, Inc.; Arthrotek, Inc.; Biolectron,
Inc.; Biomet Fair Lawn L.P.; Biomet Manufacturing Corp.; Biomet Orthopedics,
Inc.; Biomet Orthopedics Puerto Rico, Inc.; EBI Holdings, Inc.; EBI Patient Care
(effective March 1, 2006), Electro-Biology, Inc.; Florida Services Corporation
(effective January 1, 2004);

 

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Implant Innovations, Inc.; Interpore Spine Ltd. (effective June 18, 2004);
Interpore Cross International, Inc. (effective June 18, 2004); Interpore
Orthopaedics, Inc. (effective June 18, 2004); and Walter Lorenz Surgical, Inc.

(z) “Employer Stock” means any common share of stock issued by an Employer that
constitutes a Qualifying Employer Security.

(aa) “Employer Stock Collateral Account” means the Plan’s bookkeeping account
under which Leveraged Shares purchased by the Plan are accounted before release
to the Employer Stock Suspense Account. A separate Employer Stock Collateral
Account shall be established with respect to each Acquisition Loan.

(bb) “Employer Stock Suspense Account” means the Plan’s bookkeeping account to
which (i) Leveraged Shares released from the Employer Stock Collateral Account
due to contributions under the stock bonus portion of the Plan are credited
until allocated to the Stock Subaccounts of eligible Participants, (ii) Employer
Stock acquired by the Plan pursuant to Subsection 9.01(b) is credited until
allocated pursuant to Section 4.04, and (iii) forfeitures of any Stock
Subaccount are credited until reallocated to Participants or used to reduce
Employer Contributions pursuant to Section 10.02.

(cc) “Entry Date” means the first day of the month immediately following the day
the Eligible Employee meets the requirements of Section 3.01.

(dd) “ERISA” means the Employee Retirement Income Security Act of 1974, as
amended from time to time.

(ee) “FMLA” means the Family and Medical Leave Act of 1993, as amended from time
to time.

 

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(ff) “Fund” means a separate investment fund that forms part of the Trust Fund
established by the Trustee at the direction of the Administrator. Employer Stock
is a separate Fund available under the Trust Fund.

(gg) “Highly Compensated Employee” means, effective for Plan Years beginning on
or after June 1, 1997, an employee described in Code Section 414(q) and the
regulations promulgated thereunder and, generally, includes highly compensated
active employees and highly compensated former employees as described below:

(1) Highly compensated active employees include any Employee who performs
service for an Affiliated Employer during the Determination Year and is in one
or more of the following groups:

(A) Employees who were five percent (5%) owners of an Affiliated Employer at any
time during the Determination Year or the Look-Back Year;

(B) Employees who (i) received compensation (as defined in Code
Section 414(q)(4)) from an Affiliated Employer in excess of Eighty Thousand
Dollars ($80,000) (as increased by the Cost of Living Adjustment) during the
Look-Back Year, and (ii) were in the top twenty percent (20%) of Employees
ranked according to the amount of compensation (as defined in Code
Section 414(q)(4)) received from the Affiliated Employers during such Look-Back
Year.

(2) Highly compensated former employees include former Employees who:

(A) Terminated Employment or Retired prior to the Determination Year;

 

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(B) performed no service for an Affiliated Employer during the Determination
Year; and

(C) were highly compensated active employees, as described in Paragraph
(1) above, during the year of Termination of Employment or Retirement or any
Plan Year ending on or after the date the Employee attained age fifty-five (55).

(3) For purposes of the definition of Highly Compensated Employee,
“Determination Year” means the Plan Year for which the determination of highly
compensated employees is being made.

(4) For purposes of the definition of Highly Compensated Employee, “Look-Back
Year” means the twelve (12) month period immediately preceding the Determination
Year.

(hh) “Hour of Service” means each hour for which an Employee is entitled to
credit as follows:

(1) An Employee shall be credited with each hour for which he is paid, or
entitled to payment, for the performance of duties for an Affiliated Employer.
An Hour of Service described in this Paragraph shall be credited to an Employee
for the Vesting Computation Period in which the duties are performed.

(2) An Employee shall be credited with each hour for which he is paid, or
entitled to payment, by an Affiliated Employer on account of a period 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;
provided, however, that no Hours of Service

 

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shall be credited under this Paragraph for periods during which no duties are
performed and for which the Employee is paid or entitled to payment, if such
payment is made or due solely to reimburse an Employee for medical or medically
related expenses or solely for the purpose of complying with applicable workers’
compensation, unemployment compensation, or disability insurance laws. Not more
than five hundred one (501) Hours of Service shall be credited to an Employee on
account of any single continuous period during which the Employee performs no
duties (whether or not this period occurs in a single Vesting Computation
Period) unless the Hours of Service are credited pursuant to Paragraph (4). An
Hour of Service credited to an Employee pursuant to this Paragraph shall be
credited to the Vesting Computation Period or periods during which no duties are
performed.

(3) An Employee shall be credited with each hour for which back pay,
irrespective of mitigation of damages, is either awarded or agreed to by an
Affiliated Employer. The same Hour of Service shall not be credited under
Paragraph (1) or Paragraph (2), as the case may be, and under this Paragraph. An
Hour of Service described in this Paragraph shall be credited to the Vesting
Computation Period or periods to which the award or agreement for back pay
pertains, rather than to the Vesting Computation Period in which the award,
agreement, or payment is made.

(4) “Hours of Service” shall be credited for military leave for training or
service, or both, with the Uniformed Services of the United States to the extent
required under USERRA.

(5) An Employee shall be credited with Hours of Service as required by 29 C.F.R.
§ 2530.200b-2 and such other regulations promulgated from time to time by the
United States Department of Labor under ERISA regarding the definition of hours
of service.

 

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(6) For eligibility and Vesting purposes only, “Hours of Service” shall be
credited for leave that qualifies as family or medical leave under the FMLA;
provided, however, such Hours of Service shall be credited only to the extent
required by the FMLA and the regulations thereunder.

(ii) “Investment Manager” means any person other than the Trustee, in its
capacity as trustee, or the Administrator who:

 

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

 

  (2) is qualified to act as an investment manager under ERISA;

 

  (3) has acknowledged in writing that it is a fiduciary with respect to the
Plan;

 

  (4) has been designated by the Administrator as investment manager for the
Plan.

(jj) “Late Retirement Date” means the first day of the month subsequent to the
Normal Retirement Date of the Participant after which the Participant actually
Retires.

(kk) “Leveraged Shares” means shares of Employer Stock purchased with an
Acquisition Loan.

(ll) “Non-Highly Compensated Employee” means an Employee who is not a Highly
Compensated Employee.

(mm) “Normal Retirement Date” means the first day of the month after which a
Participant attains age sixty-five (65).

 

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(nn) “Participant” means an Eligible Employee or former Eligible Employee who
is, or may become, eligible to receive a benefit of any type from the Plan and
who has commenced participation in the Plan.

(oo) “Party in Interest” means a (i) Participant who is an active Employee, or
(ii) Participant or Beneficiary who is a “party in interest” as that term is
defined in Section 3(14) of ERISA.

(pp) “Plan” means, jointly and severally, as the context so requires, the stock
bonus plan and the profit sharing and 401(k) plan created and embodied herein,
as amended from time to time, designated as the “Biomet 401(k) Retirement and
Savings Plan.”

(qq) “Plan Compensation” means, for a Plan Year, the cash remuneration as
defined under Code Section 3401(a) of a Participant received from his Employer
in the Plan Year, but only for periods after the Participant commences
participation in the Plan, that is reportable for federal income tax withholding
at the source purposes (which excludes, among other things, amounts related to
the disqualifying disposition of a qualified stock option) but determined
without regard to any rules under Code Section 3401(a) that limit the
remuneration included in wages based on the nature or location of the employment
or the services performed. Notwithstanding anything contained in this Subsection
to the contrary, Plan Compensation shall include elective amounts that are not
includable in gross income pursuant to Code Sections 125, 132(f)(4), 401(k),
402(e)(3), 402(h) or 403(b). Notwithstanding anything contained herein, and to
the extent required by Code Section 401(a)(17), the compensation of a
Participant for any Plan Year taken into account under the Plan shall not exceed
Two Hundred Thousand Dollars ($200,000) (as increased by Code
Section 401(a)(17)(B) for the applicable Plan Year). If any Plan Year consists
of less than twelve (12) months, the compensation limit under Code Section

 

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401(a)(17) shall be multiplied by a fraction, the numerator of which is the
number of months in the short Plan Year and the denominator of which is twelve
(12). For purposes of Regular Contributions to be made under Section 4.04, a
Participant’s Plan Compensation shall be determined as set out in this
Subsection, except that it shall be the Participant’s Plan Compensation during
the Company’s 12-month fiscal year (June 1 through May 31) ending on the
applicable Allocation Date rather than the Plan Year.

(rr) “Plan Year” means any twelve (12) month period beginning on January 1 and
ending on the following December 31; provided, however:

(1) that the period beginning June 1, 2005, and ending December 31, 2005, shall
be a short Plan Year with respect to the portion of the Plan that was formerly
known as the Biomet, Inc. 401(k) Profit Sharing Plan;

(2) that prior to June 1, 2005, “Plan Year” means, with respect to the portion
of the Plan that was formerly known as the Biomet, Inc. 401(k) Profit Sharing
Plan, any twelve (12) month period beginning on June 1 and ending on the
following May 31;

(3) that the period beginning June 1, 2006, and ending March 31, 2007, shall be
a short Plan Year with respect to the portion of the Plan that was formerly
known as the Biomet, Inc. Employee Stock Bonus Plan; and

(4) that prior to June 1, 2006, “Plan Year” means, with respect to the portion
of the Plan formerly known as the Biomet, Inc. Employee Stock Bonus Plan, any
twelve (12) month period beginning on June 1 and ending on the following May 31.

(ss) “Qualified Domestic Relations Order” means a domestic relations order that
is determined to be qualified within the meaning of Code Section 414(p)(l).

 

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(tt) “Qualifying Employer Securities” means any security that is issued by the
Company or an Affiliated Employer and that meets the requirements of Code
Section 409(l) and ERISA Section 407(d)(5).

(uu) “Retires” or “Retirement” means that a Participant Terminates Employment on
his Normal, Early, Late, or Disability Retirement Date.

(vv) “Section” means, when not preceded by the word Code or ERISA, a section of
this Plan.

(ww) “Spouse” means the person to whom the Participant is legally married,
pursuant to the applicable law of the state of the Participant’s residence.

(xx) “Terminated Employment,” “Terminates Employment” or “Termination of
Employment” means, with respect to an Employee, that the Employee ceases to be
an Employee of all Affiliated Employers; provided, however, it shall not
include: (i) temporary absence of such Employee due to vacation, sickness (not
including Disability), or layoff; (ii) military leave for training or service,
or both, with the Uniformed Services of the United States to the extent required
under USERRA and Code Section 414(u)(8)(A); (iii) a leave that qualifies as a
family or medical leave under the FMLA; (iv) a leave of absence for any reason
approved by an Affiliated Employer on a nondiscriminatory basis; or (v) a change
in employment in which the Employee’s new employer assumes sponsorship of the
Plan or maintains the Plan or accepts a transfer of assets and liabilities
(within the meaning of Code Section 414(l)) with respect to the Employee.

(yy) “Trust” means the trust or trusts established and maintained under the Plan
and any Trust Agreement to hold the Trust Fund.

 

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(zz) “Trust Agreement” means the Trust Agreement for the Biomet 401(k) Savings
and Retirement Plan, as amended from time to time.

(aaa) “Trust Fund” means the assets of the Plan held by the Trustee in various
Funds, pursuant to the terms of the Plan and the Trust.

(bbb) “Trustee” means the trustee(s) of the Trust or any successor trustee or
trustees designated and appointed under the Trust.

(ccc) “Uniformed Services of the United States” means the Armed Forces (as
defined in USERRA), the Army National Guard and the Air National Guard when
engaged in active duty for training, inactive duty training, or full-time
National Guard duty, the commissioned corps of the Public Health Service, and
any other category of persons designated by the President in time of war or
emergency.

(ddd) “USERRA” means the Uniformed Services Employment and Reemployment Rights
Act of 1994, as amended from time to time.

(eee) “Valuation Date” means each day of the Plan Year or such other Valuation
Dates as the Administrator or its designee may establish. In the case of the
valuation of an asset or Account as of a Valuation Date, such valuation shall be
determined as described in Article VI.

(fff) “Vested” or “Vesting” means, when used with respect to an Account of a
Participant or his Beneficiary, a claim to that part of the Account that arises
from service of the Participant that is unconditional, is legally enforceable
against the Plan, and is nonforfeitable. Notwithstanding the preceding sentence,
an amendment to this Plan may reduce the Vested Accounts of a Participant if
such amendment satisfies the requirements of ERISA and the Code.

(ggg) “Vesting Computation Period” means each Plan Year; provided, however, that
(i) for any Employee who was a Participant in the Biomet, Inc. 401(k) Profit
Sharing Plan and

 

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who completed an Hour of Service during the short Plan Year period beginning
June 1, 2005, and ending December 31, 2005, the following overlapping Vesting
Computation Periods shall be established and such Participant shall be credited
with a Year of Service in each such overlapping Vesting Computation Period in
which he is credited with at least one thousand (1,000) Hours of Service:
(A) June 1, 2005 to May 31, 2006, and (B) January 1, 2006 to December 31, 2006;
and (ii) for any Employee who was a Participant in the Biomet, Inc. Employee
Stock Bonus Plan and completed an Hour of Service during the short Plan Year
period beginning June 1, 2006 and ending March 31, 2007, the following
overlapping Vesting Computation Periods shall be established and such
Participant shall be credited with a Year of Service in each such overlapping
Vesting Computation Period in which he is credited with at least one thousand
(1,000) Hours of Service: (A) June 1, 2006 to May 31, 2007, and (B) January 1,
2007 to December 31, 2007.

(hhh) “Years of Service” means, for an Employee, each Vesting Computation Period
during which the Employee completes at least one thousand (1,000) Hours of
Service; provided, however, the following Years of Service shall be excluded:

(1) In the case of an Employee who incurs a one (1) year Break in Service, Years
of Service before such break will not be taken into account until the Employee
has completed one (1) Year of Service after such Break in Service.

(2) Any Years of Service occurring prior to any period of consecutive one
(1) year Breaks in Service shall not be taken into account if (i) the number of
consecutive one (1) year Breaks in Service within such period equals or exceeds
the greater of five (5) or the aggregate number of Years of Service of the
Employee prior to such period, and if (ii) the Employee had no Vested right to
any portion of his Account balances derived

 

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from Employer contributions at the commencement of such Break in Service;
provided, however, any Years of Service excluded pursuant to this Paragraph
shall also be excluded from any subsequent determination of Years of Service.

Notwithstanding the preceding provisions, the Years of Service of any Employee
shall include any Years of Service of such Employee while he was an Employee of
any Affiliated Employer. The Years of Service of any Employee shall also
include: (i) any years of service such Employee was credited with under the
Kirschner Medical Corporation 401(k) Savings and Retirement Plan as of
December 31, 1994, (ii) any years of service such Employee was credited with
under the Implant Innovations, Inc. Retirement 401(k) Plan as of December 15,
1999, (iii) any years of service such Employee was credited with under the
Biolectron, Inc. 401(k) Plan as of September 24, 2000, and (iv) with respect to
any Employee who was employed by Interpore Spine Ltd., Interpore Cross
International, Inc., or Interpore Orthopaedics, Inc. as of June 18, 2004, and
who was otherwise considered an Eligible Employee under the terms of the Plan,
any years of service such Employee was credited with under the Interpore
International, Inc. 401(k) Plan as of such date. Notwithstanding the preceding
provisions, any Employee hired on October 25, 2004, who was an employee of
Z-KAT, Inc. on October 24, 2004, shall be credited with his or her service while
an employee of Z-KAT, Inc. for purposes of determining such Employee’s Years of
Service.

Section 2.02. Construction and Governing Law. The following rules of
construction shall govern any interpretation of the Plan:

(a) This Plan shall be interpreted, enforced, and administered and the validity
thereof determined in accordance with ERISA, the Code, and, when not
inconsistent with ERISA or the Code, the internal laws of the State of Indiana,
without regard to conflict of law principles.

 

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(b) Words used herein in the masculine gender shall be construed to include the
feminine gender where appropriate and words used herein in the singular or
plural shall be construed as being in the plural or singular where appropriate.

(c) In resolving any conflict between provisions of the Plan and in resolving
any other uncertainty as to the meaning or intention of any provision of the
Plan, the interpretation that (i) causes the Plan to constitute a qualified plan
under the provisions of Code Section 401 and the Trust to be exempt from tax
under Code Section 501, (ii) causes the contributions of any Employer to the
Trust to be deductible by such Employer from net income for federal income tax
purposes, (iii) causes the Plan to satisfy the requirements to be an employee
stock ownership plan which is a stock bonus plan described in Code Sections
4975(e)(7) and 401(a)(23), respectively, (iv) causes the Plan to constitute a
profit sharing plan within the meaning of Code Section 401(a)(27), (v) causes
the Plan to contain a qualified cash or deferred arrangement described in Code
Section 401(k), and (vi) causes the Plan to comply with all applicable
requirements of ERISA and the Code shall prevail over any different
interpretation.

(d) The headings and subheadings in the Plan are inserted for convenience of
reference only and are not to be considered in the construction of any provision
of the Plan.

(e) If any provision of the Plan shall be held to violate ERISA or the Code or
be illegal or invalid for any other reason, that provision shall be deemed to be
null and void, but the invalidation of that provision shall not otherwise impair
or affect the Plan.

(f) Reference to a provision of the Code or ERISA shall be deemed to include the
successor of such provision, to the extent the context so permits.

 

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ARTICLE III.

PARTICIPATION

Section 3.01. Participation. Any individual who was a Participant in either the
Biomet, Inc. 401(k) Profit Sharing Plan or the Biomet, Inc. Employee Stock Bonus
Plan on the day immediately preceding April 1, 2007, shall continue to be a
Participant on April 1, 2007, subject to the terms of the Plan.

(a) Any other Eligible Employee is eligible to become a Participant in the Plan
if he has satisfied the following requirements:

(1) he (A) has completed ninety (90) days of Continuous Employment for an
Employer and is scheduled to work at least one thousand (1,000) hours per year,
or (B) has completed one thousand (1,000) Hours of Service in any Plan Year or
in any of the overlapping Vesting Computation Periods required by the changes in
the Plan Year under Subsection 2.01(rr); and

(2) he has attained at least age eighteen (18).

(b) An Eligible Employee shall become a Participant on the next Entry Date after
which he has satisfied the participation requirements of Subsection (a),
provided that he is an Eligible Employee on that Entry Date. If an individual
who has satisfied the eligibility requirements of Subsection (a) is not an
Eligible Employee on the applicable Entry Date, and the individual later
completes an Hour of Service as an Eligible Employee, he shall become a
Participant upon completing that Hour of Service, provided that he did not
Terminate Employment and incur a Break in Service before completing that Hour of
Service. If the Employee did incur a Break in Service, he shall become a
Participant as provided in Subsection (a), taking into account the Break in
Service rules set out in Subsection 2.01(hhh).

 

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(c) Notwithstanding the preceding provisions, all service credited under the
Biolectron, Inc. 401(k) Plan as of September 24, 2000, including any days of
continuous employment with Biolectron, Inc., shall be counted in determining an
Employee’s eligibility to participate under the Plan. An Eligible Employee who
was an employee of Biolectron, Inc. on September 24, 2000, shall become a
Participant on December 1, 2000, provided such Eligible Employee has satisfied
the eligibility requirements of Subsection (a) as of December 1, 2000, pursuant
to the terms of this Subsection (c). If such Eligible Employee has not satisfied
the eligibility requirements of Subsection (a) as of December 1, 2000, after
applying the provisions of this Subsection (c), such Eligible Employee shall
become a Participant on the next Entry Date after which he has satisfied the
participation requirements of Subsection (a).

(d) Notwithstanding the preceding provisions, any Employee hired on October 25,
2004, who was an employee of Z-KAT, Inc. on October 24, 2004, shall be credited
with his or her service while an employee of Z-KAT, Inc. in determining such
Employee’s eligibility to participate under the Plan. An Eligible Employee, who
was an employee of Z-KAT, Inc. on October 24, 2004, shall become a Participant
on November 1, 2004, provided such Eligible Employee has satisfied the
eligibility requirements of Subsection (a) as of November 1, 2004, pursuant to
the terms of this Subsection (d). If such Eligible Employee has not satisfied
the eligibility requirements of Subsection (a) as of November 1, 2004, after
applying the provisions of this Subsection (d), such Eligible Employee shall
become a Participant on the next Entry Date after which he or she has satisfied
the participation requirements of Subsection (a).

(e) Notwithstanding the preceding provisions, all service credited under the
Interpore International, Inc. Retirement Savings Plan as of December 31, 2005,
including any days of continuous employment with Interpore Orthopaedics, Inc.,
Interpore Spine Ltd., or Interpore

 

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Cross International, Inc., shall be counted in determining an Employee’s
eligibility to participate under the Plan. An Eligible Employee who was an
employee of Interpore Orthopaedics, Inc., Interpore Spine Ltd., or Interpore
Cross International, Inc., on June 17, 2004, shall become a Participant on
June 18, 2004, provided such Eligible Employee has satisfied the eligibility
requirements of Subsection (a) as of June 18, 2004, pursuant to the terms of
this Subsection (e). If such Eligible Employee has not satisfied the eligibility
requirements of Subsection (a) as of June 18, 2004, after applying the
provisions of this Subsection (e), such Eligible Employee shall become a
Participant on the next Entry Date after which he has satisfied the
participation requirements of Subsection (a).

Section 3.02. Cessation of Participation. A Participant shall cease to be a
Participant on the distribution or forfeiture of his Account.

Section 3.03. Reemployment.

(a) A former Participant shall become a Participant as of the date he again
performs an Hour of Service as an Eligible Employee.

(b) A former Eligible Employee who had not satisfied the participation
requirements under Subsection 3.01(a) at the time of his Termination of
Employment shall become a Participant only in accordance with the requirements
of Section 3.01.

Section 3.04. Change in Employment Status.

(a) A Participant whose employment status changes so that he no longer satisfies
the definition of Eligible Employee, but who remains an Employee shall become a
limited Participant hereunder as of the date of the change in employment status.
Such limited Participant shall cease to make or share in Contributions under the
Plan as of the date of such change in employment status. A limited Participant
shall retain a right to be eligible for benefits under the

 

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Plan, but only to the extent of the balance of his Accounts, as of the date of
his change in employment status adjusted to reflect adjustments under Article VI
and distributions or withdrawals under Article VII. If such limited Participant
does not again become an Eligible Employee prior to Retirement or Termination of
Employment, the Vested Accounts of the limited Participant, if any, shall be
paid as provided in Article VII.

(b) A limited Participant who again has a change in employment status, and
becomes an Eligible Employee, shall become a full Participant as of such change
in employment status. Thereafter, such Participant shall be entitled to make and
share in Contributions in accordance with the terms of the Plan as in effect as
of the date of subsequent change in employment status. In no event, however,
shall such a Participant receive a greater benefit under the Plan than the
benefit that the Participant would have received had the Participant not had a
change in employment status.

(c) An Employee of the Employer or an Affiliated Employer who first becomes an
Eligible Employee due to a change in employment status shall become a
Participant as provided in Section 3.01.

Section 3.05. Transfer of Employment Between Employers.

(a) Subject to the provisions of Section 3.04, a Participant who is transferred
from employment with an adopting Employer to employment with another adopting
Employer shall continue to participate in accordance with the provisions of the
Plan. Such a Participant’s prior election to make Pre-Tax Contributions shall
continue in effect until revoked or changed in accordance with the provisions of
Section 4.02 and receive an allocation of Matching Contributions thereon in
accordance with Section 4.03. Such a transferred Participant shall be entitled
to receive an allocation of Employer Contributions under Section 4.04 (to the
extent

 

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eligible thereunder) for the Plan Year in which such transfer of employment
occurs, based on Plan Compensation attributable to the respective adopting
Employers during such Plan Year, if he is employed by an adopting Employer on
the applicable Allocation Date.

(b) A Participant who is transferred from employment with an adopting Employer
to employment with an Affiliated Employer that is not an adopting Employer under
the Plan shall not be permitted to make any additional Pre-Tax Contributions to
the Plan subsequent to such date of transfer. Such a transferred Participant
shall be entitled to receive an allocation of Employer Contributions under
Section 4.04 for the Plan Year in which such transfer of employment occurs,
based upon Plan Compensation attributable to the adopting Employer during such
Plan Year, if he otherwise satisfies the requirements to receive such Employer
Contribution and is employed by an Affiliated Employer on the applicable
Allocation Date.

Section 3.06. Completion of Forms by Participants and Beneficiaries. Each
Participant and any Beneficiary eligible to receive, or claiming a right to
receive, any benefits under the Plan shall complete such Applicable Form and
furnish such proofs and information as may be required at any time by the
Trustee or the Administrator.

ARTICLE IV.

CONTRIBUTIONS

Section 4.01. Contributions.

(a) Contributions shall be made to the Plan in accordance with this Article and
subject to the limitations under Article V. Contributions made pursuant to
Sections 4.02 shall be made in cash. The contributions under Sections 4.03 and
4.04 may be made in cash or in the form of Qualifying Employer Securities, the
value of which shall be determined pursuant to the Trust Agreement and
Section 6.03. To the extent that any Contribution under Section 4.03 or

 

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4.04 is made in the form of Employer Stock, such Contribution shall be held in
the Trust under the stock bonus component of the Plan and shall be allocated,
pursuant to the provisions of Section 4.03 or 4.04, as applicable, to the
Participants’ Stock Subaccounts, unless and until any such Participant directs
the investment of such Contribution to one (1) or more of the other investment
Funds available under the Plan pursuant to Section 12.02, at which time such
Contribution shall become part of the non-stock bonus component of the Plan and
shall be accounted for under such Participant’s Non-Stock Subaccounts.

(b) Notwithstanding anything in this Article IV to the contrary, Contributions
under Section 4.04 shall be made in cash to the extent necessary to enable the
Trustee to pay any maturing obligations under any outstanding Acquisition Loan.
To the extent that Contributions for a Plan Year are used to repay an
Acquisition Loan, any Leveraged Shares released from the Employer Stock
Collateral Account as a result of the Contributions under Section 4.04 for the
Plan Year shall be credited to the Employer Stock Suspense Account until
allocated as provided in Section 4.04.

Section 4.02. Pre-Tax Contributions.

(a) A Participant who is an Eligible Employee may elect to have Pre-Tax
Contributions made on his behalf as provided in this Section. Such a Participant
may enter into a written salary deferral agreement with his Employer agreeing to
have the Employer reduce his current cash compensation and contribute the
reduction as Pre-Tax Contributions to the Plan of a specified percentage, equal
to or greater than one percent (1%) of his Plan Compensation each pay period;
provided, however, that Pre-Tax Contributions made on behalf of a Participant
under the Plan (including Pre-Tax Contributions made pursuant to Section 4.10)
for any calendar year shall not exceed (i) the dollar limitation contained in
Code Section 402(g) in effect for such

 

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taxable year, and (ii) sixty (60%) percent of his Plan Compensation. A
Participant’s Pre-Tax Contributions under this Section 4.02 shall include any
Employer Contributions allocated to the Participant’s Pre-Tax Contribution
Account. Pre-Tax Contributions shall reduce the cash compensation otherwise
payable to such Participant and shall be paid in cash to the Trustee by the
Employer on a basis consistent with its payroll practices within a reasonable
period after being withheld from the cash compensation of a Participant, as
required by ERISA.

(b) To the extent that the elected Pre-Tax Contributions of a Catch-Up Eligible
Participant would exceed the applicable dollar limit under Code Section 402(g),
such Contributions shall be deemed to be Catch-Up Contributions to the extent
that the Participant’s Catch-Up Contributions for the Plan Year do not exceed
the applicable Catch-Up Contributions Limit. In addition, a Catch-Up Eligible
Participant may enter into a separate salary reduction agreement with his
Employer pursuant to which his Employer shall reduce his cash compensation by an
amount in excess of the applicable Pre-Tax Contribution Limit up to the Catch-Up
Contribution Limit, and such reduction amount shall be contributed to the Plan
as Catch-Up Contributions. Catch-Up Contributions made pursuant to this
Subsection for a Plan Year, together with amounts deemed as Catch-Up
Contributions for such Plan Year, shall not exceed the Catch-Up Contributions
Limit for the Plan Year. Catch-Up Contributions shall not be treated as Pre-Tax
Contributions for purposes of the Plan provisions implementing the requirements
of Code Sections 401(k)(3), 402(g), 410(b), 415, or 416.

(c) No Participant shall be permitted to have elective deferrals made under this
Plan, or any other qualified plan maintained by the Employer during any taxable
year, in excess of the dollar limitation contained in Code Section 402(g) in
effect for such taxable year, except to the extent permitted under Subsection
(b) and Code Section 414(v), if applicable.

 

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(d) Participant elections to make Pre-Tax Contributions shall be made on the
Applicable Form, which form may enable the Participant to exclude deferral
elections from bonuses or other specified elements of Plan Compensation. A
Participant may elect to make or change an election to make Pre-Tax
Contributions as of the first day of each month on the Applicable Form within
such period before the effective date of the change as the Administrator may
establish. A Participant may suspend his Pre-Tax Contributions at any time on an
Applicable Form filed with the Administrator within such period before the
effective date of the suspension as the Administrator may establish.

(e) An election to make Pre-Tax Contributions shall not be valid with respect to
any period during which the Participant is not an Eligible Employee. No election
to make, change, or discontinue Pre-Tax Contributions shall be given retroactive
effect.

(f) Pre-Tax Contributions made on behalf of a Participant for a Plan Year shall
be allocated to the Pre-Tax Contributions Account of the Participant effective
as of the earlier of the date coincident with or immediately following the date
on which they are contributed to the applicable Trust or the last day of the
Plan Year.

(g) The Administrator may establish additional nondiscriminatory rules and
procedures governing the manner and timing of elections by Employees to make,
change, or discontinue Pre-Tax Contributions, including, but not limited to, an
additional limit on the Pre-Tax Contributions of Highly Compensated Employees.

Section 4.03. Matching Contributions.

(a) As of each payroll date during a Plan Year, Matching Contributions may be
contributed on behalf of each Participant equal to a percentage of the Pre-Tax
Contributions the Participant has made during that payroll period under
Section 4.02 as approved by the

 

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Administrator, plus an allocated percentage of the forfeitures from the previous
Plan Year, if any. The Administrator may, for each Plan Year, determine that
portion or percentage, if any, of the Pre-Tax Contributions of Participants that
each Employer shall contribute as Matching Contributions and any limitations
applicable to those contributions. In so doing, the Administrator may limit the
maximum Matching Contribution of each Participant to a percentage of his Plan
Compensation or a stated dollar amount. Effective for Plan Years beginning on or
after June 1, 2002, notwithstanding anything contained herein to the contrary
and unless determined otherwise by the Administrator, each Employer shall
contribute on behalf of each Participant a Matching Contribution equal to
seventy-five percent (75%) of such Participant’s Pre-Tax Contributions that do
not exceed five percent (5%) of such Participant’s Plan Compensation. Each
Employer shall contribute the established Matching Contribution for a Plan Year
on behalf of each Participant.

(b) If a Participant is employed by more than one (1) Employer during a Plan
Year, the portion of the total Matching Contribution of the Participant for the
Plan Year that is paid by each Employer shall equal the percentage of the
Pre-Tax Contributions of the Participant for the Plan Year paid by the Employer.
Matching Contributions made on behalf of a Participant for a Plan Year shall be
allocated to his Matching Account as of the date the Employer contributes the
Matching Contribution to the Trust; provided, however, such Matching
Contributions shall be allocated no later than the last day of the Plan Year
during which the related Pre-Tax Contributions were made to the Plan.

Section 4.04. Regular and Nonelective Contributions.

(a) For each Plan Year, and subject to Subsection (c) below, the Administrator,
in its sole discretion, shall determine and designate the amount of Regular
Contributions, if any, that

 

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an Employer shall contribute. Regular Contributions for a Plan Year shall be
allocated among the Regular Accounts of Covered Participants as of the
Allocation Date for the Plan Year in proportion to the relative Plan
Compensation of the Covered Participants for the Company’s fiscal year ending on
the Allocation Date.

(b) Except as otherwise provided in Subsection (c), the Administrator shall
determine and designate the amount of Nonelective Contributions, if any, that an
Employer shall contribute for a Plan Year. Nonelective Contributions for a Plan
Year shall be allocated among the Nonelective Contribution Accounts of Covered
Participants who are Non-Highly Compensated Employees as of the last day of the
Plan Year in proportion to the relative Plan Compensation of the Covered
Participants for the Plan Year.

(c) Notwithstanding the preceding provisions of Subsections (a) and (b), to the
extent that an Acquisition Loan is outstanding during any Plan Year, the amount
of Employer Contributions with respect to such Plan Year, plus any applicable
dividends on unallocated shares, shall first be applied to pay any maturing
obligations on such Acquisition Loan. Each Acquisition Loan shall provide for
the release from encumbrance of Employer Stock used as collateral for the
Acquisition Loan pursuant to this Subsection (c). For each Plan Year during
which the Acquisition Loan is outstanding, the number of shares of Employer
Stock released from the Employer Stock Collateral Account must equal the number
of encumbered shares held immediately before release for the current Plan Year
multiplied by a fraction, the numerator of which is equal to the amount of
principal and interest paid for the Plan Year and the denominator of which is
equal to the sum of the numerator plus the principal and interest to be paid in
future Plan Years without regard to possible extension or renewal periods.
Amounts released from the Employer Stock Collateral Account for a Plan Year
shall be credited to the Employer Stock

 

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Suspense Account as provided until allocated among the Stock Subaccounts of
Covered Participants, as of the last day of such Plan Year, in proportion to the
relative Compensation of such Covered Participants for the Plan Year. Such
number of shares of Employer Stock shall be identified as part of the Regular
Accounts of such Participant. The shares of Employer Stock allocated under this
Section shall be credited to the Trust Fund at the fair market value of such
shares as of the applicable allocation date, as determined in accordance with
Section 12.04.

(d) If a Covered Participant is employed by more than one (1) Employer during a
Plan Year, the portion of the Nonelective Contributions and Regular
Contributions of such Covered Participant for the Plan Year that is paid by each
Employer shall equal the percentage of the Plan Compensation of the Covered
Participant for the Plan Year paid by that Employer.

(e) For any Participant who is on a leave of absence pursuant to the FMLA,
allocations under this Section shall be made to the Participant’s Account(s) as
though the Participant was currently at work on the applicable allocation
date(s); provided, however that, for any Participant who does not return to work
immediately following a leave of absence taken pursuant to the FMLA, said
Participant shall forfeit any and all allocations made to the Participant’s
Account(s) during the Participant’s FMLA leave of absence.

Section 4.05. Participant After-Tax Contributions. Effective March 16, 2007,
Participant after-tax contributions shall no longer be permitted to be made
under the Plan.

Section 4.06. Payment, Deductibility, and Nature of Contributions and Dividends.

(a) The Employer Contributions under Sections 4.03 and 4.04 shall be made as of
the last day of the Plan Year, or such earlier allocation date as determined by
the Employer; and shall actually be paid within such time period as permitted by
law.

 

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(b) If an Employer is unable to make any Contribution provided under Sections
4.03 or 4.04, any other Employer may make such Contributions on behalf of such
Employer, as determined in the sole discretion of the Administrator; provided,
however, the total Contributions of an Employer for any Plan Year under Sections
4.03 and 4.04, including any dividends, shall not exceed the amount allowable as
a deduction from the income of the Employer for purposes of income tax liability
under the Code, and any such Contributions are conditioned on such
deductibility.

(c) Dividends paid on Employer Stock held under the stock bonus plan component
of the Plan, and as provided in Section 18.04, shall be deductible to the full
extent provided under Code Section 404(k).

Section 4.07. Expenses of Plan. All reasonable expenses of administering the
Plan shall be paid by the Trustee and shall be charged against and paid from the
Trust Fund, unless an Employer pays such expenses.

Section 4.08. Recapture of Tax Credit.

(a) Any and all amounts transferred to the Plan by an Employer because of the
requirements of Code Sections 41(c)(1)(B) or 48(n)(1) (as in effect prior to the
enactment of the Tax Reform Act of 1984) shall remain in the Plan to be
allocated to the Tax Credit Accounts of the Participants (and if previously
allocated to the Tax Credit Accounts of the Participants shall remain so
allocated), even though part or all of the Employee plan credit (as in effect
prior to the enactment of the Tax Reform Act of 1984) or the federal tax credit
allowed under Code Section 41 with respect to such amounts is recaptured or
redetermined.

(b) Notwithstanding Subsection (a) above, contributions by the Employer are
conditioned on the determination by the Secretary of Treasury, or his delegate,
that the Plan

 

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meets the requirements of Code Section 409 and any such contribution shall be
returned to the Employer within one (1) year after the date on which the
Secretary, or his delegate, issues a notice to the Company that the Plan does
not satisfy the requirements of Code Section 409; provided an application for
such determination was filed with the Secretary or his delegate not later than
ninety (90) days after the date on which an Employee plan credit is claimed
under the Code by an Employer.

Section 4.09. Rollover Contributions and Transfers to the Plan.

(a) At any time during a Plan Year, an Eligible Employee may contribute to the
Plan in cash, and the Plan shall accept, Direct Rollovers (as defined in
Section 7.13) of distributions from the following types of plans: (i) a
qualified plan described in Code Section 401(a) or 403(a), excluding after-tax
employee contributions; (ii) an annuity contract described in Code
Section 403(b), excluding after-tax employee contributions; and (iii) 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. The Plan shall accept a contribution from an Eligible
Employee of an Eligible Rollover Distribution (as defined in Section 7.13)
(excluding after-tax employee contributions) from (i) a qualified plan described
in Code Section 401(a) or 403(a), (ii) an annuity contract described in Code
Section 403(b), and (iii) an eligible plan under Code Section 457(b) that is
maintained by a state, political subdivision of a state, or an agency or
instrumentality of a state or political subdivision of a state. The Plan shall
accept a rollover contribution from an Eligible Employee (excluding after-tax
employee contributions) of the portion of a distribution from an individual
retirement account or annuity described in Code Section 408(a) or 408(b) that is
eligible to be rolled over and would otherwise be includible in gross income.
Before a Rollover Contribution is made, the Eligible Employee shall designate
the

 

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Fund or Funds in which he wishes his Rollover Contribution to be invested. A
Rollover Contribution shall be allocated to the Rollover/Transfer Account of the
Eligible Employee as of the date of the contribution.

(b) A direct transfer to the Trustee of this Plan from the trustee of another
plan that is qualified under Code Section 401(a) shall be made in connection
with the merger of such other plan into this Plan or the transfer under Code
Section 414(l) of the accrued benefit of any Participant who was a participant
under such other plan. Any such direct transfer must be made directly by the
trustee or other funding agent of the other plan rather than by the Participant.
In no event may any direct transfer be made to this Plan which is attributable
to deductible voluntary contributions within the meaning of Code
Section 72(o)(5).

(c) A direct transfer may be made in cash or property; provided, however, that
the Trustee shall have the right to reject a direct transfer if the assets are
in a form inconsistent with the investment philosophy of the Trustee.
Alternatively, the Trustee shall have the authority to convert noncash
transferred assets to cash, securities or other investments. Any expenses
incurred in converting such assets shall be paid from the assets received in the
direct transfer.

(d) Unless the Eligible Employee elects otherwise on the Applicable Form, the
direct transfer shall be invested in the investment Fund or Funds in which the
Accounts to which the direct transfer is recorded pursuant to this
Subsection 4.09(d). Separate accounting may be maintained with respect to any
amounts transferred to this Plan pursuant to this Section 4.09.

Section 4.10. Employer Contributions Under the Biomet, Inc. Flexible Benefits
Plan. Employer contributions as provided for under the Biomet, Inc. Flexible
Benefits Plan, a benefit program under the Biomet, Inc. Employee Benefit Plan
(“Flexible Benefits Plan”) may be allocated to the Participant’s Pre-Tax
Contribution Account as Pre-Tax Contributions to the extent so elected by the
Participant under the Flexible Benefits Plan, in accordance with the terms and
conditions of the Plan and the Flexible Benefits Plan.

 

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ARTICLE V.

LIMITATIONS ON CONTRIBUTIONS AND OTHER ADDITIONS

Section 5.01. Applicability of Article. Notwithstanding any other provision of
the Plan to the contrary, Contributions to the Plan and additions to Accounts of
Participants shall be limited as provided in Code Sections 401(k), 401(m) and
415, as provided in this Article.

Section 5.02. Definitions. As used in this Article, the following terms, when
capitalized, shall have the following meanings, unless otherwise expressly
provided:

(a) “Allocable Income” means the sum of the allocable gain or loss for the year
or partial year, as the case may be, determined in accordance with Code
Section 401(k), 401(m), or 402(g), and the regulations promulgated thereunder.
For Plan Years beginning before December 31, 2007, Allocable Income shall
include gains or losses for the period from the end of the year to the date of
the distribution or correction, but only to the extent that the excess amounts
are or will be credited with gains or losses for the period.

(b) “Average Contribution Percentage” means the average (expressed as a
percentage to the nearest one-hundredth of one percent) of the Contribution
Percentages of the Eligible Participants in a group.

(c) “Average Deferral Percentage” means the average (expressed as a percentage
to the nearest one-hundredth of one percent) of the Deferral Percentages of the
Eligible Participants in a group.

(d) “Compensation” means, for purposes of Code Sections 401(k) and 401(m),
compensation as defined in Code Section 414(s) which, in general, defines
compensation as

 

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having the meaning given such term by Subsection 5.06(d); provided, however, to
the extent permitted by the Code, Compensation for any period during which an
individual is not a Participant may be disregarded. For Plan Years beginning on
or before December 31, 1997, the Company may elect to include elective deferrals
described in Code Section 414(s)(2) in Compensation. For Plan Years beginning
after December 31, 1997, elective deferrals described in Code Section 414(s)(2)
shall be included in Compensation unless the Company elects to exclude such
elective deferrals. In general, elective deferrals described in Code
Section 414(s)(2) include any amount that is contributed by an Affiliated
Employer pursuant to a salary reduction agreement and that is not includible in
the gross income of an Employee under Code Section 125, 132(f)(4), 402(e)(3),
402(h), 403(b) or 457.

(e) “Contribution Percentage” means the ratio (expressed as a percentage to the
nearest one-hundredth of one percent) of the Matching Contributions (excluding
Matching Contributions that are forfeited because the contribution to which they
relate are Excess Deferral Amounts, Excess Contributions or Excess Aggregate
Contributions) and after-tax contributions of an Eligible Participant for the
Plan Year to the extent not used to satisfy one of the tests under Subsection
5.04(a), as applicable, to the Compensation of the Participant for the Plan
Year. As may be necessary to satisfy one (1) of the tests under
Subsection 5.05(a), and in the sole discretion of the Administrator, Elective
Deferrals and Nonelective Contributions of a Participant that are not necessary
to meet one (1) of the tests under Subsection 5.04(a) for the Plan Year may be
included in the determination of such Contribution Percentage for the Plan Year.
The Contribution Percentage for Participants shall be determined in accordance
with the following:

(1) The Contribution Percentage for any Highly Compensated Participant for the
Plan Year who is eligible to make employee contributions, or to receive matching

 

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contributions, qualified nonelective contributions, or Elective Deferrals
allocated to his accounts under two (2) or more plans described in Code
Section 401(a) or arrangements described in Code Section 401(m), and that are
maintained by an Affiliated Employer, shall be determined as if all such
contributions and deferrals were made under this Plan, without regard to the
plan years of the other plans or arrangements.

(2) In the event that the Plan satisfies the requirements of Code Section 410(b)
only if aggregated with one (1) or more other plans, or if one (1) or more other
plans satisfy the requirements of Code Section 410(b) only if aggregated with
the Plan, the Contribution Percentages of Eligible Participants shall be
determined as if all such plans were a single plan.

(f) “Current Plan Year” means the Plan Year for which tests given in
Section 5.04 or 5.05 are being performed.

(g) “Deferral Percentage” means for an Eligible Participant the ratio (expressed
as a percentage to the nearest one-hundredth of one percent) of the sum of
Elective Deferrals (including Excess Deferral Amounts of Highly Compensated
Participants) and Nonelective Contributions of the Participant for the Plan Year
to the Compensation of the Eligible Participant for the Plan Year. The Deferral
Percentage for Participants shall be determined in accordance with the
following:

(1) The Deferral Percentage for any Highly Compensated Participant for the Plan
Year who is eligible to make Elective Deferrals, or to receive matching
contributions or qualified nonelective contributions allocated to his accounts
under two (2) or more plans described in Code Section 401(a) or arrangements
described in Code Section 401(k), and that are maintained by an Affiliated
Employer, shall be determined as if all such contributions and deferrals were
made under this Plan, without regard to the plan years of the other plans or
arrangements.

 

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(2) In the event that the Plan satisfies the requirements of Code Section 410(b)
only if aggregated with one (1) or more other plans, or if one (1) or more other
plans satisfy the requirements of Code Section 410(b) only if aggregated with
the Plan, the Deferral Percentages of Eligible Participants shall be determined
as if all such plans were a single plan.

(h) “Elective Deferrals” means elective deferrals as defined by Code
Section 402(g)(3), excluding, however, Catch-Up Contributions and any deferrals
properly distributed as excess annual additions under Section 5.06.

(i) “Eligible Participant” means for a Plan Year any Eligible Employee who is
eligible, in accordance with Code Section 401(k), to make Pre-Tax Contributions
for the Plan Year.

(j) “Excess Aggregate Contributions” means the total amount of Matching
Contributions and after-tax contributions with respect to Highly Compensated
Participants for the Plan Year that, if reduced, would result in the Plan
satisfying one (1) of the tests under Subsection 5.05(a). The Excess Aggregate
Contributions are determined for the group of Highly Compensated Participants
under a leveling method, starting with the Participant with the highest
Contribution Percentage. The first amount of excess attributable to that
Participant is the amount of said Matching Contributions and after-tax
contributions that, if reduced, would result in the Contribution Percentage of
the Participant being equal to the greater of (i) the Contribution Percentage of
the Participant with the next highest Contribution Percentage, or (ii) the
Contribution Percentage for the Participant that would result in the Plan
satisfying one (1) of the

 

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tests under Subsection 5.05(a). If one (1) of the tests under Subsection 5.05(a)
is not then satisfied, the same process is repeated with the Highly Compensated
Participant with the next highest Contribution Percentage until one (1) of such
tests is satisfied. The total amount of Excess Aggregate Contributions is equal
to the total of the reductions in Matching Contributions and after-tax
contributions of all affected Participants after application of this Section.

(k) “Excess Contributions” means the total amount of Elective Deferrals with
respect to Highly Compensated Participants for the Plan Year that, if reduced,
would result in the Plan satisfying one (1) of the tests under
Subsection 5.04(a). Excess Contributions are determined for the group of
Participants who are Highly Compensated Participants under a leveling method,
starting with the Participant with the highest Deferral Percentage. The first
amount of excess attributable to that Participant is the amount of Elective
Deferrals that, if reduced, would result in the Deferral Percentage of the
Participant being equal to the greater of (i) the Deferral Percentage of the
Highly Compensated Participant with the next highest Deferral Percentage or
(ii) the Deferral Percentage that would result in the Plan satisfying one (1) of
the tests under Subsection 5.04(a). If one (1) of the tests under
Subsection 5.04(a) is not then satisfied, the same process is repeated with the
Highly Compensated Participant with the next highest Deferral Percentage until
one (1) of such tests is satisfied. The total amount of Excess Contributions is
equal to the total of such reductions in Elective Deferrals of all affected
Participants after application of this Section.

(l) “Excess Deferral Amount” means the amount of Elective Deferrals for a
calendar year that the Participant timely claims pursuant to the following
procedure:

(1) A Participant may submit a claim on the Applicable Form to the Administrator
not later than the March 1 following the close of the calendar year for which
the claim for an Excess Deferral Amount is made, specifying the Excess Deferral
Amount claimed by the Participant for the preceding calendar year for the Plan.

 

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(2) Said claim shall be accompanied by the written statement of such Participant
that if such amounts are not distributed, such claimed Excess Deferral Amount,
when added to amounts deferred under other plans or arrangements described in
Code Sections 401(k), 403(b), or 408(k), exceeds the limit imposed on the
Participant by Code Section 402(g) (including, if applicable, the limitation on
Catch-Up Contributions under Code Section 414(v)) for the calendar year in which
the deferral occurred.

(m) “Highly Compensated Participant” means any Participant who is a Highly
Compensated Employee and who is an “eligible employee” within the meaning of
Code Section 401(k) or 401(m), as the case may be.

(n) “Nonelective Contributions” means, for a Participant for a Plan Year, the
amount of Nonelective Contributions designated under Subsection 4.04(b);
provided, however, Matching Contributions may be treated as Nonelective
Contributions to the extent used to satisfy one (1) of the tests under
Subsection 5.04(a).

(o) “Non-Highly Compensated Participant” means any Participant who is not a
Highly Compensated Participant and who is an “eligible employee” within the
meaning of Code Section 401(k) or 401(m), as the case may be.

(p) “Prior Plan Year” means the Plan Year immediately preceding the Current Plan
Year.

Section 5.03. Distribution of Excess Deferral Amount. Excess Deferral Amounts,
adjusted for Allocable Income, may be distributed in the discretion of the
Administrator not later than each April 15 to the Participant who claims such
Excess Deferral Amount for the preceding calendar year.

 

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Section 5.04. Limitations on Contributions under Code Section 401(k) and the
Distribution of Excess Contributions.

(a) The Plan shall be administered to satisfy the test under either Paragraph
(1) or Paragraph (2) below in each Plan Year:

(1) The Average Deferral Percentage for the group of Highly Compensated
Participants for the Current Plan Year shall not exceed the Average Deferral
Percentage for the group of Non-Highly Compensated Participants for the Current
Plan Year multiplied by one and twenty-five one-hundredths (1.25).

(2) The Average Deferral Percentage for the group of Highly Compensated
Participants for the Current Plan Year shall not exceed the Average Deferral
Percentage for the group of Non-Highly Compensated Participants for the Current
Plan Year multiplied by two (2.0), provided the Average Deferral Percentage for
the group of Highly Compensated Participants does not exceed the Average
Deferral Percentage for the group of Non-Highly Compensated Participants by more
than two (2) percentage points.

(b) In the event there are Excess Contributions for a Plan Year, one (1) of the
tests under Subsection (a) shall be met by distributing to each affected
Participant the Excess Contributions allocable to such Participant pursuant to
Subsection (c), adjusted for Allocable Income, on or before the last day of the
following Plan Year. Notwithstanding anything in the Plan to the contrary, no
Matching Contributions shall be made with respect to any such Excess
Contributions.

 

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(c) The Excess Contributions for a Plan Year shall be allocated among Highly
Compensated Participants under a leveling method, starting with the Highly
Compensated Participant with the highest dollar amount of Elective Deferrals for
the Plan Year. The first amount of excess allocated to that Participant is the
amount of said Elective Deferrals that, if reduced, would result in the dollar
amount of Elective Deferrals of the Participant being equal to the greater of
(i) the dollar amount of Elective Deferrals of the Highly Compensated
Participant with the next highest dollar amount of Elective Deferrals, or
(ii) the dollar amount of contributions for the Participant that would result in
the Plan satisfying one (1) of the tests under Subsection 5.04(a). If one (1) of
the tests under Subsection 5.04(a) is not then satisfied, the same process is
repeated with the Highly Compensated Participant with the next highest dollar
amount of Elective Deferrals until one (1) of such tests is satisfied. The
Excess Contributions, adjusted for Allocable Income, shall be distributed to the
affected Participants no later than the last day of the succeeding Plan Year.

(d) The Administrator may adjust the Elective Deferral election of any Highly
Compensated Participant to the extent it anticipates that such adjustment is
necessary to satisfy the test under Subsection 5.04(a).

Section 5.05. Limitations on Contributions under Code Section 401(m) and the
Distribution of Excess Aggregate Contributions.

(a) The Plan shall be administered to satisfy the test under either Paragraph
(1) or Paragraph (2) below in each Plan Year:

(1) The Average Contribution Percentage for the group of Highly Compensated
Participants for the Current Plan Year shall not exceed the Average Contribution
Percentage for the group of Non-Highly Compensated Participants for the Current
Plan Year multiplied by one and twenty-five one-hundredths (1.25).

 

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(2) The Average Contribution Percentage for the group of Highly Compensated
Participants for the Current Plan Year shall not exceed the Average Contribution
Percentage for the group of Non-Highly Compensated Participants for the Current
Plan Year multiplied by two (2.0), provided that the Average Contribution
Percentage for the group of Highly Compensated Participants does not exceed the
Average Contribution Percentage for the group of Non-Highly Compensated
Participants by more than two (2) percentage points.

(b) In the event there are Excess Aggregate Contributions for a Plan Year, one
of the tests under Subsection (a) shall be met by forfeiting, if forfeitable, or
distributing to each affected Participant, if not forfeitable, the Excess
Aggregate Contributions, adjusted for Allocable Income, allocable to such
Participant no later than the last day of the succeeding Plan Year. The Excess
Aggregate Contributions shall be allocated among Highly Compensated Participants
under a leveling method, starting with the Highly Compensated Participant with
the highest dollar amount of Matching Contributions and after-tax contributions
for the Plan Year. The first amount of excess distributed to that Participant is
the amount of said Matching Contributions and after-tax contributions that, if
reduced, would result in the dollar amount of Matching Contributions and
after-tax contributions of the Participant being equal to the greater of (i) the
dollar amount of Matching Contributions and after-tax contributions of the
Highly Compensated Participant with the next highest dollar amount of Matching
Contributions and after-tax contributions, or (ii) the dollar amount of Matching
Contributions and after-tax contributions for the Participant that would result
in the Plan satisfying one (1) of the tests under

 

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Subsection 5.05(a). If one (1) of the tests under Subsection 5.05(a) is not then
satisfied, the same process is repeated with the Highly Compensated Participant
with the next highest dollar amount of Matching Contributions and after-tax
contributions until one (1) of such tests is satisfied.

(c) The determination of the Excess Aggregate Contributions for the Plan Year
shall be made after application of the provisions of Section 5.04 for the Plan
Year. Forfeitures of Excess Aggregate Contributions shall be used to reduce
future Employer Contributions under Section 4.03 or 4.04.

Section 5.06. Stock Bonus Component Aggregation. For purposes of satisfying the
nondiscrimination requirements under Code Sections 401(k) and 401(m) as provided
in Sections 5.04 and 5.05, the stock bonus component of the Plan should be
aggregated with the profit sharing plan component of the Plan.

Section 5.07. Limitation under Code Section 415. Notwithstanding any other
provisions in the Plan to the contrary, the following limitations shall apply:

(a) Except to the extent permitted under Subsection 4.02(b) and Code
Section 414(v), in no event shall the “annual addition,” as defined in
Subsection (f), for a Participant for any Plan Year (which shall be the
limitation year) exceed the lesser of:

(1) Forty Thousand Dollars ($40,000) (as increased by the Cost of Living
Adjustment); or

(2) One hundred percent (100%) of the “compensation,” as defined in
Subsection (d), that such Participant received from Affiliated Employers during
the Plan Year.

 

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The Compensation limit referred to in Paragraph (2) above 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). Notwithstanding the foregoing, if any Plan Year
consists of less than twelve (12) months, the annual dollar limit referred to in
Paragraph (l) shall be multiplied by a fraction, the numerator of which is the
number of months in the short Plan Year and the denominator of which is twelve
(12).

(b) The Plan shall be administered so as to comply with the limitations of Code
Section 415. Notwithstanding anything in Article IV, the Contributions on behalf
of any Participant shall be reduced to the extent necessary to comply such
limitations.

(c) For purposes of this Section and subject to Code Section 415(h), all defined
contribution plans of an Affiliated Employer are to be treated as a single
defined contribution plan, and all Affiliated Employers shall be considered as a
single employer.

(d) For purposes of this Section, ‘compensation’ means compensation as defined
in Code Section 415(c)(3). In general, Code Section 415(c)(3) defines
compensation as all of a Participant’s wages as defined in Code Section 3401(a)
for the purposes of income tax withholding at the source 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)); provided, however,
compensation shall also include the amount of any elective deferrals, as defined
in Code Section 402(g)(3), and any amount contributed or deferred by the
employer at election of the Employee and that is not includable in the gross
income of the Employee by reason of Code Section 125, 132(f)(4) or 457.

 

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(e) If the annual addition for a Participant under the Plan, determined without
regard to the limitation of Subsection (a), would have been greater than the
annual addition for such Participant as limited by Subsection (a), then the
excess, if due to a reasonable error in estimating compensation or such other
circumstances as found by the Secretary of the Treasury to justify application
of this Subsection, shall be reduced, to the extent necessary to satisfy such
limitation by reallocating to the other Participants any Employer Contributions
of such Participant for the Plan Year without any allocation of income or loss
thereto in proportion to the relative Plan Compensation of the Participants for
the Plan Year. Provided, however, if such reallocations would result in the
annual additions for all eligible Participants exceeding the limitations of
Subsection (a), the excess shall be held unallocated in a suspense account and
used to reduce Employer Contributions in subsequent Plan Years.

(f) For purposes of this Section, “annual addition” means the annual addition as
defined in Code Section 415(c) and as modified in Code Sections 415(l)(1) and
419(A)(2). In general, Code Section 415(c) defines the annual addition as the
sum of the following amounts credited to a Participant’s accounts for the
limitation year under this Plan and any other plan maintained by an Affiliated
Employer:

 

  (1) employer contributions;

 

  (2) employee contributions; and

 

  (3) forfeitures.

Amounts allocated, after March 31, 1984, to an individual medical account, as
defined in Code Section 415(1)(2), that is part of a pension or annuity plan
maintained by an Affiliated Employer are treated as annual additions to a
defined contribution plan. Excess Aggregate Contributions and Excess
Contributions shall be treated as annual additions under the Plan even if
distributed.

 

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Rollover Contributions are not included in annual additions. Also, amounts
derived from contributions paid or accrued after December 31, 1984, in taxable
years ending after such date, that are attributable to post-retirement medical
benefits, allocated to the separate account of a key employee, as defined in
Code Section 419A(d)(3), under a welfare benefit fund, as defined in Code
Section 419(e), maintained by an Affiliated Employer are treated as annual
additions to a defined contribution plan.

For purposes of this Section, any Leveraged Shares of Employer Stock released
from the Employer Stock Suspense Account and allocated to a Participant’s Stock
Subaccounts for a Plan Year shall be accounted for at the lower of (i) the fair
market value of the shares as of the allocation date, or (ii) the amount of the
Employer Contributions made to the Plan which resulted in the release of those
shares from the Employer Stock Suspense Account for the Plan Year.

Section 5.08. Priority of Limitations. The provisions of Sections 5.03, 5.04,
5.05, and 5.07 shall be applied in the following order: (i) Section 5.03;
(ii) Section 5.04; (iii) Section 5.05; and (iv) Section 5.07.

ARTICLE VI.

ACCOUNTING

Section 6.01. Participant Accounts.

(a) The Administrator shall establish and maintain adequate records to reflect
the Accounts of each Participant and Beneficiary. Credits and charges shall be
made to such Accounts pursuant to the Plan to reflect contributions,
distributions, and withdrawals and to reflect gains or losses. Each Participant
shall have a separate Pre-Tax Contribution Account, Matching Account,
Nonelective Contribution Account, Regular Account, Rollover/Transfer Account,
Savings Account and Tax Credit Account, with a Stock Subaccount and Non-Stock

 

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Subaccount maintained under each such Account. The Administrator shall maintain
a record of the Employer Stock and the value of all other assets attributable to
each Account. The maintenance of individual accounts is for accounting purposes
only, and a segregation of Plan assets to each Account shall not be required,
except as otherwise provided in the Plan.

(b) Each Participant’s Stock Subaccount shall be credited with shares of
Employer Stock (including fractional shares), as provided in the Plan, whether
(i) contributed to the Trust, (ii) acquired and paid for by the Trust, including
Leveraged Shares released from the Employer Stock Suspense Account, or
(iii) invested, at the Participant’s direction, in Employer Stock at any time on
or after June 1, 2001. Each Participant’s Stock Subaccount shall be charged or
reduced with respect to all or any portion of such Stock Subaccount that is
transferred, at the Participant’s direction, to the Participant’s Non-Stock
Subaccount. The Administrator shall maintain records of the cost basis (which,
at the Administrator’s sole discretion, may be based on average cost) of
Employer Stock allocated to a Participant’s Stock Subaccount.

(c) Each Participant’s Non-Stock Subaccount shall be credited with his allocable
share, as provided in the Plan, of (i) Contributions that are not in the form of
Employer Stock, and (ii) investments, at the Participant’s direction or pursuant
to the default investment established by the Administrator, at all times on and
after June 1, 2001, in assets other than Employer Stock, and shall be adjusted
for any net income or loss of the Trust not attributable to Employer Stock, as
provided in Section 6.04. Each Participant’s Non-Stock Subaccount shall be
charged or reduced for (i) the Participant’s share of any cash payment by the
Trustee for the acquisition of Employer Stock, (ii) the payment of any principal
or interest due under any Acquisition Loan, or (iii) the transfer of all or any
portion of such Non-Stock Subaccount, at the Participant’s direction, to the
Participant’s Stock Subaccount.

 

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Section 6.02. Valuation. As of each Valuation Date, the Trustee shall determine
the fair market value of the Trust Fund, each separate Fund and each share of
Employer Stock that it holds in accordance with the Trust Agreement and
Section 6.03. Based on the valuation of the Trustee, the Administrator, or its
designee, shall determine the value of the Accounts of each Participant and the
number of shares of Employer Stock, if any, credited to that Account.

Section 6.03. Value of Accounts of Participants.

(a) The value of an Account as of any Valuation Date shall be determined in
accordance with ERISA Sections 408(e) and 3(18) and regulations thereunder. The
value of the Account shall be determined as of the close of business on such
Valuation Date, or if the NASDAQ or any national securities exchange on which
the Fund or Employer Stock is trading, is not open on such date (or, in the case
of Employer Stock, the Employer Stock is not traded on such date), as of the
close of business on the first day prior to such Valuation Date that the NASDAQ
or national securities exchange is open (or that Employer Stock is traded),
increased by the amount of any Contributions allocated to the Account after the
prior Valuation Date and reduced by the amount of any payments or withdrawals
made from the Account after the prior Valuation Date.

(b) The value of Employer Stock shall be the closing price of the Employer Stock
as reported on NASDAQ or any national securities exchange on which the Employer
Stock is trading; provided, however, that if the Employer Stock is traded on
NASDAQ and if the closing price is greater than the bid price or less than the
asked price, then the value of Employer Stock shall be determined by taking the
average of the most recent bid and asked prices quoted by persons independent of
the Employer or any Party in Interest, as reported on NASDAQ. Determination of
the value of Employer Stock with respect to transactions between the Plan and a
Party of Interest shall be made as of the date of the transaction.

 

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Section 6.04. Allocation of Earnings to Non-Stock Subaccounts. Subject to the
loan provisions under Article VIII, earnings on the Non-Stock Subaccounts of
each Participant shall be allocated as follows:

(a) If a Fund separately accounts for the portion of each Participant’s share of
the Fund earnings, the earnings of the Fund, whether positive or negative, shall
be allocated among the Non-Stock Subaccounts invested in that Fund pursuant to
the rules of the Fund.

(b) If a Fund does not separately account for the portion of each Participant’s
Fund earnings, the earnings of the Fund, whether positive or negative, shall be
allocated among all Non-Stock Subaccounts in proportion to the relative value of
those Non-Stock Subaccounts invested in the Fund during the period following the
preceding Valuation Date, which relative value shall be determined under a
reasonable procedure established by the Administrator and consistently applied.
Accounts terminated since the preceding Valuation Date shall be disregarded for
purposes of this Subsection.

(c) The earnings of a Fund shall be determined pursuant to the rules of that
Fund.

Section 6.05. Calculation on Basis of Employer Stock. For purposes of
determining the net unrealized appreciation on any Employer Stock distributed to
the Participant, the cost or other basis of such Employer Stock shall be the
cost or other basis to the Trust Fund of each such share of Employer Stock.

 

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ARTICLE VII.

BENEFITS

Section 7.01. Retirement Benefits.

(a) When a Participant Retires he is entitled to begin distribution of his
Accounts. Such Accounts shall be paid, as elected by the Participant on the
Applicable Form, either (i) in a lump sum payment, or (ii) in monthly,
quarterly, semiannual, or annual installments over a period of years not to
exceed the life expectancy of the Participant, increased or decreased for any
gain or loss as allocated to the Accounts under the Plan during the installment
period. If any portion of the Vested Accounts of the Participant consists of
Employer Stock, the Participant may elect that all or any part of such portion
of his Vested Accounts be distributed in whole shares of such Employer Stock and
the remainder thereof in cash. In the event a Participant makes no election, his
Accounts shall be paid in a lump sum cash payment.

(b) Actual payment of such benefits shall begin within ninety (90) days after
the later of the Participant’s Normal Retirement Date or the date he actually
Retires; provided, however, a Participant who Retires before his Normal
Retirement Date may elect an earlier distribution on an Applicable Form. After a
Participant informs the Administrator of his wish to receive an early
distribution, the Administrator shall provide the Participant with a written
notice of (i) his right to defer receipt of the distribution, and (ii) his right
to a period of at least 30 days after receiving the notice to decide whether to
elect an early distribution. After receiving the Administrator’s written notice,
the Participant may elect an early distribution date that is not more than 180
days after the date of the notice and, except as provided in the following
sentence, is at least 30 days after the notice. The Participant may waive the
30-day notice requirement described in the preceding sentence, but not the
180-day requirement. The Participant’s election must be made on the Applicable
Form.

 

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(c) Notwithstanding the foregoing and effective with respect to a distribution
made on or after March 28, 2005, if the value of the Accounts of a Participant,
excluding his Rollover/Transfer Account, at the time of distribution does not
exceed One Thousand Dollars ($1,000), his Accounts shall be paid to him in a
lump sum payment within ninety (90) days after the Participant Retires.

(d) Distributions shall be based on the value of the Accounts as of the
Valuation Date coincident with or immediately preceding the distribution date.

Section 7.02. Death Benefits.

(a) If a Participant dies after distribution of his Accounts has begun under the
Plan, any remaining installments shall be paid as they become due unless his
Beneficiary elects a lump sum cash payment of such remaining installments on an
Applicable Form.

(b) If a Participant dies prior to distribution of his Accounts, his Accounts,
if any, shall be paid to the primary or contingent Beneficiary of the
Participant under Section 7.03 in a lump sum cash payment, or, at the
Beneficiary’s election and only to the extent of the value of the Participant’s
Stock Subaccounts at the time of distribution, in the form of Employer Stock.
Payment of such benefit shall be made as soon as administratively feasible
following the date of death.

Section 7.03. Beneficiaries.

(a) If a Participant is married, his primary Beneficiary shall be his Spouse,
unless he elects a different primary Beneficiary under Subsection (b).

 

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(b) Each Participant may designate on an Applicable Form filed with the
Administrator one (1) or more primary and contingent Beneficiaries to receive
any death benefits payable under this Plan upon his death. Each such designation
may be revoked, amended, or changed by the Participant by notice in writing to
the Administrator. To be effective, a Beneficiary designation must be received
by the Administrator during the Participant’s life. The designation of a
Beneficiary other than the Spouse of such Participant shall not be effective
unless:

(1) the consent of the Spouse of the Participant (i) is obtained on the
Applicable Form, (ii) acknowledges the effect of the election, (iii) applies
only to a specific Beneficiary designation that may not be changed without
spousal consent (or the consent of the Spouse expressly permits future elections
by the Participant without any requirement of further consent by the Spouse),
and (iv) is witnessed by a notary public; or

(2) the Participant establishes to the satisfaction of the Administrator, in its
sole discretion, that the consent under Paragraph (1) cannot be obtained because
(i) the Participant has no Spouse, (ii) the Spouse of the Participant cannot be
located, or (iii) of such other circumstances as the Secretary of the Treasury
by regulation may prescribe.

Any consent by a Spouse of a Participant, or establishment that consent of such
Spouse cannot be obtained, shall be effective only with respect to such Spouse.

(c) In the absence of a designation by the Participant or if all designated
Beneficiaries predecease the Participant, the benefits, if any, shall be paid to
the surviving Spouse of the Participant, if living at the time of the death of
the Participant, or if no such Spouse is then living, then to the descendants of
the Participant, per stirpes, who are living at the time of the death of the
Participant, or if there are no such descendants then living, then to the estate
of the Participant.

 

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Section 7.04. Termination Benefits.

(a) If a Participant Terminates Employment prior to his Retirement for any
reason other than death, such Participant is entitled to receive his Vested
Accounts, if any, as provided in this Section. If any portion of the Vested
Accounts of the Participant consists of Employer Stock, the Participant may
elect that all or any part of such portion of his Vested Accounts be distributed
in whole shares of such Employer Stock and the remainder thereof in cash.

(b) The Vested portion of the Accounts of a Participant under Subsection (a),
based on the value of his Accounts as of the Valuation Date coincident with or
immediately preceding the distribution, shall be paid in a lump sum within
ninety (90) days after the Participant Terminates Employment, if, effective with
respect to a distribution made on or after March 28, 2005, the Vested portion of
the Accounts of the Participant, excluding his Rollover/Transfer Account, does
not exceed One Thousand Dollars ($1,000) at the time of the distribution.

(c) If the Vested portion of the Accounts of the Participant, excluding his
Rollover/Transfer Account, exceeds One Thousand Dollars ($1,000) at the time of
any distribution on or after March 28, 2005, the Vested portion of the Accounts
of a Participant under Subsection (a) shall be paid in a lump sum within ninety
(90) days after the Participant Terminates Employment and elects such a
distribution if the Participant consents on the Applicable Form to such
distribution.

(d) In the event that the Vested Accounts of a Participant equal or exceed the
cash surrender value of any insurance contracts held in the Participant’s name,
the Trustee, when so directed by the Administrator and agreed to by the
Participant, shall assign, transfer, and give

 

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over to such Participant all contracts on his life in such form or with such
endorsements, so that the settlement options are consistent with the provisions
of Section 7.01. In the event that the Vested Accounts do not at least equal the
cash surrender value of the contracts, if any, held in the Participant’s name,
the Participant may pay over to the Trustee the sum needed to make the
distribution equal to the value of the contracts being assigned or transferred,
or the Trustee, pursuant to the election of the Participant, may borrow the cash
surrender value of the contracts from the insurer and then assign the contracts
to the Participant.

(e) If the Vested portion of the Accounts of a Participant under Subsection
(a) are not paid pursuant to Subsections 7.04(b), (c), or (d), such Vested
Accounts shall be paid pursuant to the provisions of Section 7.01 commencing as
of the date which would have been the Normal Retirement Date of the Participant
had he not Terminated Employment.

(f) If a Participant who has Terminated Employment with a Vested Account dies
before he begins receiving benefits hereunder, the Vested Accounts payable under
Subsection (a) shall be paid in accordance with Section 7.02.

(g) Distributions payable as of any date shall be made on or as soon as
administratively feasible after that date.

Section 7.05. In-Service Withdrawals of Pre-Tax Contribution Account.

(a) In addition to the withdrawal provisions in Section 7.08, a Participant who
has not Terminated Employment may request on the Applicable Form, for reason of
financial hardship as defined under regulations of the Internal Revenue Service,
to withdraw in cash as of any Valuation Date all or part of his Pre-Tax
Contribution Account, excluding any earnings of the Trust Fund allocated to such
Pre-Tax Contribution Account after December 31, 1988. Only one (1) such request
may be made each calendar quarter. Such a request must be on the

 

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Applicable Form. Such hardship withdrawals may include all or any portion of the
Stock Subaccount under the Participant’s Pre-Tax Contribution Account, which
shall be deemed to be an election that any such Employer Stock be liquidated
prior to distribution of the requested hardship withdrawal. The request will be
approved only if it satisfies all the requirements of this Section.

(b) A withdrawal for reason of financial hardship must be on account of:

(1) expenses incurred for medical care as described in Code Section 213(d)
(determined without regard to whether the expenses exceed 7.5% of adjusted gross
income) for the Participant, his Spouse, or any dependent of the Participant as
defined in Code Section 152 or expenses necessary for such persons to obtain
such medical care;

(2) costs directly related to the purchase (excluding mortgage payments) of a
principal residence for the Participant;

(3) payment of tuition, room and board expenses, and related educational fees
for up to the next twelve (12) months of post-secondary education, including
expenses for the then current semester or quarter, for the Participant, his
Spouse, children, or any dependents of the Participant as defined in Code
Section 152, without regard to Code Section 152(b)(1), (b)(2) and (d)(1)(B);

(4) the need to prevent the eviction of the Participant from his principal
residence or foreclosure on the mortgage of the principal residence of the
Participant; or

(5) with respect to Plan Years beginning on or after January 1, 2007, payments
for funeral or burial expenses for the Participant’s deceased parent, Spouse,
child or dependent (as defined in Code Section 152, without regard to Code
Section 152(d)(1)(B);

 

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(6) with respect to Plan Years beginning on or after January 1, 2007, expenses
to repair damage to the Participant’s principal residence that would qualify for
a casualty loss deduction under Code Section 165 (determined without regard to
whether the loss exceeds 10% of adjusted gross income); or

(7) such other financial circumstances as declared by the Commissioner of
Internal Revenue to constitute immediate and heavy financial need under Code
Section 401(k) or the regulations thereunder.

(c) Any withdrawal under this Section for reason of financial hardship must
satisfy all of the following requirements:

(1) The distribution may not be in excess of the amount of the immediate and
heavy financial need of the Participant. The amount of the immediate and heavy
financial need may include any amounts necessary to pay any federal, state, or
local taxes or penalties reasonably anticipated to result from the distribution.

(2) The Participant must have obtained all distributions, other than hardship
distributions, all dividends and all nontaxable loans currently available under
all plans maintained by an Affiliated Employer; provided, however, the
Participant shall not be required to obtain any such distribution or loan if the
effect of such distribution or loan would be to increase the amount of the
immediate and heavy financial need of the Participant.

(3) The Pre-Tax Contributions of the Participant under the Plan and any elective
contributions or employee contributions of the Participant under any other plan
maintained by an Affiliated Employer, except for employee contributions under a
health or welfare benefit plan, including one that is part of a cafeteria plan
under Code Section 125, shall be suspended for six (6) months after receipt of
any withdrawal.

 

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(d) The request by a Participant for a withdrawal shall specify the reason of
the financial hardship, specify the amount the Participant wishes to withdraw to
meet the need caused by the financial hardship, and state the need cannot be
met:

(1) through reimbursement or compensation by insurance or otherwise;

(2) by reasonable liquidation of the assets of the Participant, to the extent
such liquidation would not itself cause an immediate and heavy financial need;

(3) by cessation of Pre-Tax Contributions under the Plan; or

(4) by other currently available distributions (including distributions of
dividends under Code Section 404(k)) and nontaxable (at the time of the loan)
loans from plans maintained by the Employers or by any other employer, or by
borrowing from commercial sources on reasonable commercial terms.

The Administrator shall determine whether financial hardship exists, and its
determination shall be final and conclusive. Denial of a withdrawal request
shall be made in accordance with the claims procedure of the Plan. In making
this determination, the Administrator may rely on the representation by the
Participant that the need cannot be met by any of the aforementioned resources
or from any other resources that are reasonably available to the Participant.
For purposes of this Section, the resources of the Participant include those
assets of the Spouse of the Participant and the minor children of the
Participant that are reasonably available to the Participant. The determination
of whether resources are reasonably available to the Participant is to be made
on the basis of all relevant facts and circumstances. If the Administrator
requires further information in order to determine whether financial hardship
exists, it may request this information.

 

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(e) The Administrator shall apply uniform and nondiscriminatory standards in
administering the provisions of this Section. The withdrawals shall be paid to
the Participant as soon as practicable after approval by the Administrator of
the Participant’s written request for a hardship withdrawal.

(f) No amount that is held as security for an outstanding Plan loan pursuant to
Subsection 8.02(e) shall be eligible for a hardship withdrawal pursuant to this
Section 7.05.

(g) Notwithstanding the foregoing provisions of this Section 7.05, as permitted
by Code Section 401(k)(2)(B)(i) with regard to distributions made after
September 11, 2001, any “qualified reservist” may request a distribution from
his Pre-Tax Contribution Account at any time during a period of active duty and
shall not be subject to the ten percent (10%) early withdrawal penalty tax under
Code Section 72(t). For purposes of this Subsection (g), a “qualified reservist”
is an individual who is a reservist or national guardsman who was ordered or
called to active duty after September 11, 2001 and before December 31, 2007 for
a period in excess of one hundred seventy-nine (179) days or for an indefinite
period. A qualified reservist who takes a distribution from his Pre-Tax
Contribution Account under this Subsection (g) may repay such distribution to an
individual retirement account (i) at any time during the two (2) year period
after the end of active duty, or (ii) by August 17, 2008, if later.

Section 7.06. In-Service Withdrawals of Rollover/Transfer Account.

(a) A Participant who has not Terminated Employment may request on the
Applicable Form, for reason of financial hardship as defined under regulations
of the Internal Revenue Service, to withdraw in cash all or part of his
Rollover/Transfer Account. Such a

 

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withdrawal may not occur more than twice each Plan Year and is subject to
approval of the Administrator. The request will be approved only if it satisfies
all the requirements of this Section and Subsections 7.05(b), (c), (d), and (e).

(b) Any withdrawal under this Section for reason of financial hardship must not
be in excess of the amount of the immediate and heavy financial need for the
Participant.

(c) A Participant may, at his election, also withdraw any amount necessary to
cover withholding for federal income tax purposes.

Section 7.07. In-Service Withdrawals from Savings Account. A Participant may
request a withdrawal of all or part of the balance in his Savings Account. Any
such withdrawal request shall be made on an Applicable Form and be filed with
the Trustee and the Administrator. The amount requested shall be distributed to
the Participant within ninety (90) days following the date of the request.

Section 7.08. In-Service Withdrawals Upon Attainment of Age 59 1/2. A
Participant who has attained age fifty-nine and one-half (59-1/2) and who has
not Terminated Employment may request (once in any Plan Year) on the Applicable
Form to withdraw all or any portion of his Vested Accounts. Such request must be
on an Applicable Form and be filed with the Administrator at least two (2) weeks
before the date the Participant wishes to receive the withdrawal.

Section 7.09. Charge or Discount. If any charge or discount is incurred by the
Trustee as an incident to the payment of any benefits hereunder, such charge or
discount shall be charged against the benefits of the Participant or Beneficiary
to which the same relates.

Section 7.10. Persons Under Legal Disability. If any benefit is payable to a
minor or other person who is incapacitated, under a legal disability, or other
similar situation as defined by

 

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state law, of which the Administrator has been informed in writing, the
Administrator may direct that such payments be made to the legal guardian of
such person or to such other person or organization as a court of competent
jurisdiction may direct in full satisfaction of any payment due under the Plan.

Section 7.11. Payments at Direction of Administrator. Any benefit payable under
the Plan shall be paid by the Trustee only at the direction of the
Administrator.

Section 7.12. Limitation on Distributions from Tax Credit Account.
Notwithstanding any other provision in this Article, no Employer Stock allocated
to the Tax Credit Account of a Participant may be distributed from that
Account’s Stock Subaccount prior to the end of the eighty-fourth (84th) month
beginning after the month in which the Employer Stock is allocated to such
Participant’s Tax Credit Account; provided, however, such Employer Stock may be
distributed prior to the end of the preceding eighty-four (84) month period in
the case of the Participant’s death, Disability, or Termination of Employment.

Section 7.13. Special Rollover Distribution Rules. Notwithstanding any other
provision of the Plan to the contrary that would otherwise limit a Distributee’s
election under this Section, a Distributee may elect, at the time and in the
manner prescribed by the 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.

(a) Definitions.

(1) 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: (i) any distribution that is (A) one of
a series of substantially equal periodic payments (not less frequently than
annually) made for the life

 

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(or life expectancy) of the Distributee or the joint lives (or joint life
expectancies) of the Distributee and the Distributee’s designated Beneficiary,
or (B) for a specified period of ten (10) years or more; (ii) any distribution
to the extent such distribution is required under Code Section 401(a)(9);
(iii) any financial hardship distribution described in Code Section 401(k) and
the regulations thereunder; (iv) the portion of any distribution that is not
includable in gross income (determined without regard to the exclusion for net
unrealized appreciation with respect to employer securities) or (v) any
distribution to a Participant of dividends declared on Employer Stock pursuant
to Section 18.04. A portion of the distribution shall not fail to be an Eligible
Rollover Distribution merely because the portion consists of employee after-tax
contributions that are not includable in gross income. However, such after-tax
portion may be transferred only to an individual retirement account or annuity
described in Code Section 408(a) or (b), or in a direct trustee-to-trustee
rollover to a qualified trust described in Code Section 401(a) or 403(a) that is
part of a defined contribution or defined benefit plan, or to an annuity
contract, described in Code Section 403(b), and such trust or annuity contract
separately accounts for amounts so transferred, including separately accounting
for the portion of such distribution that is includable in gross income and the
portion of the distribution that is not so includable. Effective January 1,
2008, an Eligible Rollover Distribution shall also mean a qualified rollover
contribution to a Roth IRA within the meaning of Code Section 408A.

(2) An “Eligible Retirement Plan” is (i) an individual retirement account
described in Code Section 408(a), (ii) an individual retirement annuity
described in Code Section 408(b), (iii) an annuity plan described in Code
Section 403(a), or (iv) a qualified

 

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plan described in Code Section 401(a), that accepts the Distributee’s Eligible
Rollover Distribution. “Eligible Retirement Plan” also means an annuity contract
described in Code Section 403(b) or an eligible plan under Code Section 457(b)
maintained by a state, political subdivision of a state, or any agency or
instrumentality of a state or political subdivision of a state and which agrees
to separately account for amounts transferred into such plan from this Plan.
Effective January 1, 2008, an Eligible Retirement Plan shall also mean a Roth
IRA described in Code Section 408A.

(3) A “Distributee” includes an Employee or former Employee. In addition, the
Employee’s or former Employee’s surviving Spouse and the Employee’s or former
Employee’s Spouse or former Spouse who is the Alternate Payee under a Qualified
Domestic Relations Order, are Distributees with regard to the interest of the
Spouse or former Spouse. Effective January 1, 2007, a designated Beneficiary (as
defined in Code Section 401(a)(9)(E) of the Employee who is not a surviving
Spouse is a Distributee with regard to the interest of the designated
Beneficiary.

(4) A “Direct Rollover” is a payment by the Plan to the Eligible Retirement Plan
specified by the Distributee.

(b) If a distribution is one to which Code Sections 401(a)(11) and 417 do not
apply, such distribution may commence less than thirty (30) days after the
notice required under Section 1.411(a)-11(c) of the Income Tax Regulations is
given, provided that:

(1) the Plan Administrator clearly informs the Participant that he has a right
to a period of at least thirty (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.

Section 7.14. Requirements for Commencement and Distribution of Benefits.
Notwithstanding any provision of the Plan to the contrary, any distribution
under the Plan shall be made in accordance with Code Section 401(a)(9) and the
regulations promulgated thereunder, including the incidental death benefit rules
under Code Section 401(a)(9)(G), and shall comply with the following rules:

(a) To the extent required by Code Section 401(a)(9) and the regulations
promulgated thereunder, payment of the Accounts of a Participant shall begin not
later than the “required beginning date.” For purposes of this Section,
“required beginning date” means April 1 of the calendar year following the later
of: (i) the calendar year in which the Participant reaches age seventy and
one-half (70-1/2), or (ii) the calendar year in which the Participant Retires;
provided, however, for a Participant who is a five percent (5%) owner, as
defined in Code Section 416, “required beginning date” means April 1 of the
calendar year following the calendar year in which the Participant reaches age
seventy and one-half (70-1/2), regardless of whether he has Retired. A
Participant who (i) has not Terminated Employment, (ii) attained age seventy and
one-half (70-1/2) prior to January 1, 1997, and (iii) began receiving
distributions from the Plan pursuant to the requirements of Code
Section 401(a)(9) as in effect on December 31, 1996, may elect to discontinue
such distributions at any time by filing the Applicable Form with the Plan
Administrator.

(b) If the Participant dies before distributions have begun, the entire
interest, if any, of a Participant under the Plan shall be distributed by
December 31 of the calendar year containing the fifth (5th) anniversary of the
Participant’s death, unless the Participant or Beneficiary elects otherwise
pursuant to Subsection (c).

 

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(c) Notwithstanding the provisions of Subsection (b), effective for
distributions commencing on or after January 1, 2004, Participants or
Beneficiaries may elect on an individual basis whether (i) the Participant’s
entire interest in the Plan shall be distributed to the designated Beneficiary
by December 31 of the calendar year containing the fifth (5th) anniversary of
the Participant’s death, or (ii) the distribution of benefits shall begin (A) in
the case of a non-spouse Beneficiary or if the surviving Spouse is not the sole
Beneficiary, no later than the December 31 of the calendar year following the
calendar year in which the Participant died, or (B) in the case of a surviving
Spouse, no later than December 31 of the calendar year in which the Participant
would have attained age seventy and one-half (70 1/2). The election must be made
no later than the earlier of the date on which distribution would be required to
begin under (i) or (ii) of this Subsection. If neither the Participant nor
Beneficiary makes an election under this Subsection, distributions shall be made
in accordance with Subsection (b). If the surviving Spouse is the designated
Beneficiary and the surviving Spouse dies before the distribution of benefits
begins, this Subsection shall be applied as if the surviving Spouse were the
Participant.

(d) Unless a Participant elects otherwise, the payment of his benefits under the
Plan must begin not later than the sixtieth (60th) day after the end of the Plan
Year in which occurs the latest of (i) the Participant’s sixty-fifth
(65th) birthday, (ii) the tenth (10th) anniversary of the Plan Year in which the
Participant began participation in the Plan, or (iii) the Participant’s
Termination of Employment.

 

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ARTICLE VIII.

PLAN LOANS

Section 8.01. Plan Loans.

(a) Any Party in Interest may apply on the Applicable Form to the Administrator
for a loan from the Plan pursuant to this Article and such other procedures as
may be established by the Administrator. Loans will be available to all such
Parties in Interest on a uniform and nondiscriminatory basis. Loans shall not be
made available to Highly Compensated Employees, officers, or shareholders in an
amount greater than the amount made available to other Parties in Interest, as
determined in accordance with ERISA and the Code. Such loans may not include any
portion of the Participant’s Stock Subaccounts, but shall only be available from
the Participant’s Non-Stock Subaccounts.

(b) The amount of such loan, when added to the outstanding balance of all other
loans from the Plan, shall not exceed the lesser of:

(1) Fifty Thousand Dollars ($50,000), reduced by the excess, if any, of the
highest outstanding balance of loans from the Plan during the one (1) year
period ending on the date on which the loan is made, over the outstanding
balance of loans from the Plan on the date on which such loan is made; or

(2) One-half (1/2) of the Vested Accounts of the Participant under the Plan.

For purposes of the above limitations, all loans from all plans of the
Affiliated Employers shall be aggregated.

Notwithstanding the foregoing, the minimum amount of a loan shall be One
Thousand Dollars ($1,000) and the maximum amount of a loan shall not exceed the
value of the Participant’s Non-Stock Subaccounts on the date the loan is made.

 

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Section 8.02. Terms and Conditions. The loan program described in this Article
shall be administered by the Administrator. All loans under Section 8.01 shall
comply with the following terms and conditions and the terms and conditions of
any applicable loan procedures:

(a) All loans shall be subject to the approval of the Administrator.

(b) A Party in Interest may apply for a loan by completing the Applicable Forms;
provided, however a Party in Interest may only request one (1) loan in each
twelve (12) month period. Notwithstanding the preceding provisions, the
Administrator may, on a nondiscriminatory basis, permit more than one (1) loan
during a twelve (12) month period or permit refinancing of a loan if such loan
would otherwise prevent the Party in Interest from receiving a hardship
distribution during such period.

(c) The Party in Interest receiving the loan shall make the required repayments
in accordance with the loan agreement.

(d) Rates of interest shall be determined by the Administrator in accordance
with ERISA.

(e) Each loan shall be adequately secured. The Plan shall have a security
interest in the Accounts of the Party in Interest; provided however, such
security interest of the Plan shall not exceed fifty percent (50%) of the value
of such Accounts at the inception of the loan, or from time to time thereafter,
whichever is greater.

(f) Each loan shall be amortized on a substantially level basis over a period
not to exceed five (5) years (ten (10) years in the event the loan is for the
purchase or construction of the Party in Interest’s principal residence) with
payments not less frequently than quarterly. The term of the loan shall not
extend beyond the earliest of (i) in the case of a distribution that begins
after the date of the loan, the date such distribution of the Accounts under
Article VII begins;

 

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provided, however, a withdrawal for reason of financial hardship pursuant to
Section 7.05 shall not be taken into account under this Subsection unless the
amount withdrawn from the Accounts of the Party in Interest affects the security
of the loan, (ii) the date of distribution or separation of the Accounts
pursuant to a Qualified Domestic Relations Order of any portion of the Accounts
if the amount distributed or separated from the Accounts of the Party in
Interest pursuant to such offer affects the security of the loan, or (iii) the
date of a default on the loan.

(g) Notwithstanding Subsection (f), loan repayments may be suspended for a
period, not longer than one (1) year, that the Party in Interest is on an
Employer-approved leave of absence, whether without pay from an Affiliated
Employer or at a rate of pay (after income and employment tax withholding) that
is less than the amount of the loan repayments required under the term of the
loan; provided, however, the loan must be repaid in full not later than five
(5) years (ten (10) years in the event the loan is for purchase or construction
of the Party in Interest’s principal residence) after the date of the loan. Loan
repayments due after the leave ends (or if earlier, after the first year of the
leave) shall be reamortized on a substantially level basis with payments not
less frequently than quarterly.

(h) Notwithstanding Subsection (f) and Subsection (g), if a Party in Interest
Terminates Employment or takes a leave of absence from an Affiliated Employer
because of a period of service in the Uniformed Services of the United States
and does not receive a distribution of his Vested Accounts, the Plan shall
suspend loan payments as permitted under Code Section 414(u)(4) and USERRA. If a
Party in Interest has an outstanding loan(s) during a period of service in the
Uniformed Services of the United States, (i) loan payments shall be suspended
during such period, (ii) interest shall accrue on the loan during such period at
a rate equal to the lesser of six percent (6%) as provided under the
Servicemembers Civil Relief Act of

 

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2003 or the rate of interest determined at the inception of the loan pursuant to
Subsection (d), (iii) the time for repayment of such loan(s) shall be extended
for a period of time equal to the period of service in the Uniformed Services of
the United States, and if the original term of the loan was less than the
maximum term permitted under Subsection (f), the time for repayment may be
extended for a period of time equal to the maximum term permitted under
Subsection (f) plus the period of Uniformed Services of the United States,
(iv) loan payments shall resume upon the completion of such period of Uniformed
Services of the United States, and (v) the frequency and amount of the periodic
installments following the period of Uniformed Services of the United States
shall not be less than the frequency and amount of the periodic installments
required under the terms of the original loan.

(i) A default on the loan shall occur thirty (30) days after the occurrence of
either of the following conditions: (i) the Party in Interest fails to make a
payment, or (ii) the Administrator in good faith deems the Plan insecure with
respect to the repayment of the loan and notifies the Party in Interest of this
deemed insecurity. Except as provided below, notwithstanding the foregoing
sentence, the Administrator may allow the Party in Interest to cure the
defaulted loan, in which case the Party in Interest may pay the amount due plus
accrued interest not later than the last day of the calendar quarter following
the calendar quarter in which the Party in Interest failed to make the payment.

(j) Notwithstanding the preceding Subsection, any Party in Interest who has
Retired or Terminated Employment or any Beneficiary of a deceased Party in
Interest must pay off the outstanding balance on any outstanding loan,
determined at the time of such Retirement, Termination of Employment, or Party
in Interest’s death, as applicable, within ninety (90) days of the Retirement,
Termination of Employment or death, or the loan shall be deemed to be a
distribution to the Party in Interest or his Beneficiary.

 

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(k) If the Party in Interest (or Beneficiary of a deceased Party in Interest) is
in default, the Dividend Account, the Rollover/Transfer Account, the Savings
Account, the Regular Account and the Matching Account of the Party in Interest
may in the discretion of the Administrator be applied against the outstanding
loan to the extent necessary to fully repay the same. In the event the loan
remains outstanding after application of the Accounts in the preceding sentence,
the Pre-Tax Contribution Account and Nonelective Contribution Account of the
Party in Interest may in the discretion of the Administrator be applied against
the outstanding loan provided that the Party in Interest (i) is age fifty-nine
and one-half (59-1/2), (ii) is deceased, (iii) is Disabled, or (iv) has
Terminated Employment. If a Party in Interest defaults on a loan and the loan is
not repaid, such as by an offset of the Party in Interest’s Accounts, then
(i) the loan shall remain outstanding, (ii) the amount available for any
subsequent loan requested by the Party in Interest shall be reduced by the
amount of the outstanding loan, and (iii) any subsequent loan shall be included
in the Party in Interest’s taxable income for the year the subsequent loan is
taken unless the Party in Interest agrees to repay the loan through payroll
deductions under a legally enforceable arrangement or adequate security is given
for the loan in addition to the Party in Interest’s Account balance.

(l) No distributions to a Party in Interest (or a Beneficiary of a deceased
Party in Interest) shall be made prior to repayment of all outstanding loans,
except as provided in Subsection (k). A default is a distributable event, to the
extent permitted by the Code.

 

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(m) The Party in Interest (or a Beneficiary of a deceased Party in Interest) may
repay at any time, in a form acceptable to the Administrator and without
penalty, the entire outstanding principal balance of the loan and accrued
interest to date of repayment.

Section 8.03. Loan Procedures.

(a) The Administrator shall approve any loan application that satisfies the
requirements set forth in this Article. Denial of a loan shall be made in
accordance with the claims procedure of the Plan.

(b) Any loan to a Party in Interest shall be considered to be a separate asset
of the Trust Fund segregated for the benefit of such Party in Interest. The
interest paid on the loan shall be credited to the Account or Accounts of the
Party in Interest, and such portion of the Account or Accounts segregated shall
not share in the allocation of gains or losses, pursuant to Article VI. The
principal and interest paid on the loan shall be credited to the Account or
Accounts and such Fund or Funds as determined by the Administrator. The loan
proceeds shall come from such Account or Accounts and from such Fund or Funds of
the Party in Interest as determined by the Administrator.

(c) The Administrator may establish and charge a processing fee with respect to
any loan.

ARTICLE IX.

BORROWING BY PLAN

Section 9.01. Borrowing by the Plan.

(a) (a) Subject to the requirements of this Article, the Trustee may enter into
an Acquisition Loan to acquire Employer Stock on such terms and conditions as
the Trustee deems reasonable and appropriate.

 

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(b) If the Acquisition Loan under Subsection (a) above would be a prohibited
transaction under Code Section 4975(c) except for the exemption under Code
Section 4975(d)(3), such Acquisition Loan may only be entered into if it is
primarily for the benefit of the Participants and their Beneficiaries and the
Trustee has determined that the following conditions are satisfied:

(1) At the time the Acquisition Loan is made, the interest rate for the
Acquisition Loan and the price of the Employer Stock to be acquired with the
Acquisition Loan proceeds are not such that the Plan assets shall be drained
off. In determining if this condition is satisfied, the Trustee shall make its
determination based on the projected net effect of the Acquisition Loan on the
Plan for the duration of the loan.

(2) At the time the Acquisition Loan is made the terms of the Acquisition Loan
are at least as favorable to the Plan as the terms of a comparable loan
resulting from arm’s length negotiations between independent parties.

(3) The interest rate of the Acquisition Loan shall not be in excess of a
reasonable rate of interest, taking into account the amount and duration of the
Acquisition Loan, the security and guarantee (if any) involved, and the interest
rates prevailing on comparable loans.

(4) The Acquisition Loan shall be for a specific period and shall not be payable
at the demand of any person except in the case of default.

(5) The proceeds of the Acquisition Loan shall be used within a reasonable time
after their receipt by the Plan only for any or all of the following purposes:

(A) to acquire Employer Stock, provided such Employer Stock is a qualifying
employer security within the meaning of Code Section 409(l), which is readily
tradable on an established national securities market;

 

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(B) to repay such Acquisition Loan; or

(C) to repay a prior Acquisition Loan made pursuant to this Article.

(6) Except as otherwise required by applicable law, no Employer Stock acquired
with the proceeds of such Acquisition Loan shall be subject to a put, call, or
other option, or buy-sell or similar arrangement while held by and when
distributed from the Plan, whether or not the Plan is then an employee stock
ownership plan. All Leveraged Shares acquired by the Trust with the proceeds of
an Acquisition Loan shall be credited to an Employer Stock Collateral Account
(whether or not used as collateral for the Acquisition Loan). Leveraged Shares
shall be withdrawn from the Employer Stock Collateral Account each Plan Year
pursuant to the provisions of Subsection 4.04(c) and Paragraph (11) as though
all securities in the Employer Stock Collateral Account were encumbered.

(7) Such Acquisition Loan shall be without recourse against the Plan and the
only assets of the Plan that shall be given as collateral on the Acquisition
Loan are Leveraged Shares acquired with the proceeds of such Acquisition Loan or
Employer Stock that was used as collateral on a prior Acquisition Loan pursuant
to this Article that was repaid with the proceeds of the current Acquisition
Loan.

(8) No person entitled to payment under the Acquisition Loan shall have any
right to any assets of the Plan other than:

(A) collateral given for the Acquisition Loan;

 

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(B) Contributions (other than Contributions of Employer Stock) that are made
under the Plan to meet its obligations under the Acquisition Loan; and

(C) earnings attributable to such collateral and the investment of such
Contributions.

(9) Payments of principal and interest on an Acquisition Loan shall be made by
the Trustee (as directed by the Administrator) from (i) Contributions by the
Employer to the Trust and the earnings on those Contributions; (ii) dividends on
the Employer Stock; (iii) Leveraged Shares held as collateral for an Acquisition
Loan and earnings attributable to those Leveraged Shares; and (iv) the proceeds
of a subsequent Acquisition Loan made to repay a prior Acquisition Loan. The
payments made with respect to the Acquisition Loan by the Plan during a Plan
Year shall not exceed an amount equal to the sum of such Contributions by the
Employers and earnings received during or prior to the Plan Year less such
payments in prior years.

(10) Contributions that are made under the Plan to meet the obligations under
the Acquisition Loan and earnings thereon shall be accounted for separately on
the books of account of the Plan until the Acquisition Loan is repaid.

(11) The Acquisition Loan shall provide for the release from encumbrance of
Employer Stock used as collateral for the Acquisition Loan as follows: for each
Plan Year during the duration of the Acquisition Loan, the number of shares of
Employer Stock released must equal the number of encumbered shares of Employer
Stock held immediately before the release for the current Plan Year multiplied
by a fraction, the numerator of which is the amount of principal and interest
paid for the year and the denominator of which is the sum of the numerator plus
the principal and interest to be

 

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paid for all future Plan Years. If the interest rate under the loan is variable,
the interest to be paid in future years must be computed using the interest rate
applicable as of the end of the Plan Year. Any Employer Stock released from such
encumbrance, shall be allocated to the Accounts of Participants pursuant to
Section 4.04.

(12) In the event of default under the Acquisition Loan, the value of Plan
assets transferred in satisfaction of the Acquisition Loan shall not exceed the
amount of default. Further, if the lender is a disqualified person under Code
Section 4975 or a Party in Interest, the Acquisition 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 Acquisition Loan.

(c) Any Employer Stock acquired with the proceeds of an Acquisition Loan subject
to this Article shall not be part of the Trust Fund nor allocated to the
Accounts of Participants until released from encumbrance under Paragraph (b)(11)
above and allocated to the Regular Accounts of Participants under Section 4.04
and credited to the Trust Fund. Such Employer Stock shall nevertheless be held
in trust as a part of the assets of the Plan.

Section 9.02. Restrictions on Loans.

(a) Employer Stock allocated to a Tax Credit Account shall not be used as
collateral for, or to satisfy, an Acquisition Loan made to the Plan.

(b) Notwithstanding anything in the Plan or any other agreement to which the
Plan may be bound, the Trustee, on behalf of the Plan, may not enter into an
Acquisition Loan made by a Party in Interest or disqualified person or an
Acquisition Loan that is guaranteed by a Party in Interest or disqualified
person, unless all the terms, conditions, and requirements of any regulations or
rulings of the United States Department of Labor or the Internal Revenue Service
have been satisfied or for which provision has otherwise been made.

 

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ARTICLE X.

VESTING

Section 10.01. Vesting Standards.

(a) A Participant shall be 100% Vested in his Pre-Tax Contribution Account,
Nonelective Contribution Account, Savings Account, Tax Credit Account and
Rollover/Transfer Account at all times.

(b) A Participant shall be Vested in his Matching Account and Regular Account on
and after the earlier of his attaining age sixty-five (65), his Disability
Retirement Date, Early Retirement Date, or his date of death.

(c) A Participant shall be Vested in his Matching Account and Regular Account in
the following percentages as of the completion of the following Years of
Service:

 

Number of

Years of Service

  

Vested

Percentage

Less than 2        0%                 2      20%                 3      40%
                4      60%                 5      80%                 6 or more
   100%

(d) A Plan amendment changing any Vesting schedule under the Plan shall not
affect the Vested portion of a Participant’s Accounts (determined as of the day
immediately preceding the later of the day such amendment is adopted, or the day
such amendment becomes effective). Each Participant having not fewer than three
(3) Years of Service shall be permitted to elect on an Applicable Form, within a
reasonable period after the adoption of such amendment, to have

 

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his Vested Accounts computed under the Plan without regard to such amendment.
The reasonable period shall end no earlier than the latest of the following
dates (i) the date that is sixty (60) days after the day the amendment is
adopted, (ii) the date that is sixty (60) days after the day the amendment
becomes effective, or (iii) the date that is sixty (60) days after the day the
Participant is issued written notice of the amendment by the Employer or
Administrator.

Section 10.02. Forfeitures.

(a) Except as otherwise provided in Subsection (b), the non-Vested Accounts of a
Participant shall be forfeited at the time he incurs five (5) consecutive Breaks
in Service with any such forfeiture coming first from the Non-Stock Subaccounts
of such Participant.

(b) Upon distribution of the entire Vested Accounts of a Participant before the
end of the second Plan Year following the Plan Year in which the Participant
Terminates Employment, his non-Vested Accounts shall be forfeited. If at the
time a Participant Terminates Employment, his Accounts are entirely non-Vested,
he shall be deemed to have received a distribution of his Vested Accounts upon
Termination of Employment, and his non-Vested Accounts shall be forfeited.

(c) Such forfeited amounts shall be held in a “Forfeited Suspense Account”.
Forfeitures attributable to Matching Contributions, Regular Contributions and
Nonelective Contributions shall be used to reduce Employer contributions under
Section 4.03, Subsection 4.04(a) or Subsection 4.04(b), respectively, in the
discretion of the Employer, as of the earliest possible Allocation Date.

Section 10.03. Reinstatement. If a former Participant whose non-Vested Accounts
are forfeited pursuant to Section 10.02 is reemployed by the Employer, the
forfeited amounts shall be restored; provided, however, if the Participant
received a distribution described in the first

 

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sentence of Subsection 10.02(b), he must repay to the Trust the full amount
distributed to him before the earlier of five (5) years from his date of
reemployment or the date on which he incurs five (5) consecutive Breaks in
Service after the date of the distribution before such restoration occurs. Such
restoration shall be made from the “Forfeited Suspense Account” under
Section 10.02 or from additional Employer payments. This additional contribution
shall not constitute an annual addition under Code Section 415. The restored
amount will become Vested in accordance with Section 10.01 provided the
reemployed Participant continues in the employ of an Affiliated Employer until
such date.

ARTICLE XI.

ADMINISTRATION OF THE PLAN

Section 11.01. Administrator.

(a) The Plan shall be administered by a Benefits Committee of at least three
(3) persons appointed by the President of the Company and serving at the
pleasure of the President of the Company. The Benefits Committee shall act by a
majority of its membership. The action of the majority may be expressed by a
vote at a meeting, or in writing without a meeting. The Benefits Committee shall
be the Administrator of the Plan within the meaning of ERISA. Each member of the
Benefits Committee shall hold office until removed by the President of the
Company, which removal may be without cause and without advance notice. The
Administrator shall have the authority to control and manage the operation and
administration of the Plan and shall be the named fiduciary of the Plan. The
Administrator is authorized to accept service of legal process.

(b) The Administrator shall have such power and authority (including discretion
with respect to the exercise of that power and authority) as may be necessary,
advisable, desirable, or convenient to enable the Administrator to carry out its
duties under the Plan. By way of illustration and not limitation, the
Administrator is empowered and authorized:

 

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(1) to make rules and regulations in respect of the Plan not inconsistent with
the Plan, the Code, or ERISA and to amend or rescind such rules and regulations;

(2) to determine, consistently therewith, all questions of law or fact that may
arise as to the eligibility, benefits, status, and rights of any person claiming
benefits or rights under the Plan, including without limitation, Participants,
former Participants, surviving Spouses of Participants, Beneficiaries, Employees
and former Employees;

(3) to direct the Trustee to make payments from the Trust Fund to Participants,
their Beneficiaries, and other persons as the Administrator may determine, and

(4) subject to and consistent with the Code and ERISA, to construe and interpret
the Plan and to correct any defects, supply any omissions, or reconcile any
inconsistencies in the Plan.

Benefits under this Plan shall be paid only if the Administrator, in its sole
discretion, decides the applicant for the benefits is entitled to the benefits.

(c) Any action by the Administrator, which is not found to be an abuse of
discretion, shall be final, conclusive, and binding on all individuals affected
thereby. The Administrator may take any such action in such manner and to such
extent as the Administrator in its sole discretion may deem expedient and the
Administrator shall be the sole and final judge of such expediency.

(d) The Administrator shall not take any action with respect to any of the
benefits provided hereunder or act otherwise in pursuance of the powers
conferred herein upon the

 

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Administrator that would be discriminatory in favor of Participants who are
Highly Compensated Employees or that would result (i) in benefiting one
(1) Participant or group of Participants at the expense of another, (ii) in
discrimination as between Participants similarly situated, or (iii) in the
application of different rules to a substantially similar set of facts.

Section 11.02. Claims Procedure. Any person who believes that he is entitled to
any benefits under the Plan shall present such claim in writing to the
Administrator. The Administrator shall, within sixty (60) days after receipt of
the claim, provide adequate notice in writing to any claimant as to its decision
on any such claim, unless special circumstances require an extension of time to
process the claim. Written notice of any extension shall be furnished to the
claimant prior to the termination of the initial sixty (60) day period
specifying the circumstances requiring an extension and when a final decision
will be reached, which shall be no later than one hundred twenty (120) days
after the claim was filed.

(a) If a claim is denied, in whole or in part, the Administrator’s notice shall
set forth (i) the specific reasons for such denial; (ii) specific reference to
any pertinent provisions of the Plan on which denial is based; (iii) a
description of any additional material or information necessary for the claimant
to perfect the claim and an explanation of why such material or information is
necessary; and (iv) an explanation of the review procedure for the Plan. Such
notice shall be written in a manner calculated to be understood by the
Participant.

(b) Within sixty (60) days after receipt by the claimant of notification of
denial, the claimant shall have the right to present a written appeal to the
Administrator. If such appeal is not filed within said sixty (60) day period,
the decision of the Administrator shall be final and binding. The Administrator
shall act as a fiduciary in making a full and fair review of such denial. The
claimant or his duly authorized representative may review any Plan documents
that are pertinent to the claim and may submit issues and comments to the
Administrator in writing.

 

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(c) A decision by the Administrator shall be made promptly, and in any event not
later than sixty (60) days after its receipt of the appeal; provided, however,
if the Administrator decides that special circumstances require an extension of
time to process any appeal, such as a hearing at which the claimant or his duly
authorized representative may be present is necessary and such a hearing is
held, such decision shall be rendered as soon as possible, but not later than
one hundred twenty (120) days after its receipt of the appeal. If the period for
reviewing the appeal is extended because of the failure to submit information
needed to decide the claim, the sixty (60) day extension period within which the
Administrator must make a determination shall be put on hold until the date of
which the claimant responds to the request for additional information.

(d) Any such decision of the Administrator shall be in writing and provide
adequate notice to the claimant setting forth the specific reasons for any
denial, and shall be written in a manner calculated to be understood by a
Participant. Any such decision by the Administrator shall be final. All claims
procedures shall be governed by the regulations promulgated by the Secretary of
Labor.

Section 11.03. Employment of Consultants. The Administrator or a fiduciary named
by the Administrator may employ one (1) or more persons to render advice with
regard to their respective responsibilities under the Plan.

Section 11.04. Delegation by Administrator. The Administrator may from time to
time delegate to an individual, committee, or organization certain of its
fiduciary responsibilities under the Plan. Any such individual, committee, or
organization shall remain a fiduciary until

 

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such delegation is revoked by the Administrator, which revocation may be without
cause and without advance notice. To the extent permitted under ERISA, such
individual, committee, or organization shall have such power and authority with
respect to such delegated fiduciary responsibilities as the Administrator has
under the Plan. The Administrator shall not be liable for any act or omission of
such fiduciary in carrying out such responsibility, except as may be otherwise
provided in ERISA.

Section 11.05. Qualified Public Accountant. If required under ERISA, the
Administrator shall engage on behalf of all Participants an independent
qualified public accountant who is qualified to act as such under ERISA and who
shall conduct such an examination of any financial statements of the Plan, and
of other books and records of the Plan, as the qualified public accountant may
deem necessary to enable him to form an opinion as to whether the financial
statements and schedules required to be included in the annual report of the
Plan under ERISA are presented fairly in conformity with generally accepted
accounting principles applied on a basis consistent with that of the preceding
Plan Year and who shall perform such other services for the Plan as the
Administrator may require.

Section 11.06. Fiduciary Liability. If the Employer, Administrator, Trustee, or
any other fiduciary with respect to the Plan acts in accordance with the
fiduciary duties of ERISA in (i) relying on a consent or revocation made
pursuant to Article VII, or (ii) making a determination under Section 16.02, the
consent, revocation or determination shall be treated as valid for purposes of
discharging the Plan from liability to the extent of payments made pursuant to
such acts.

Section 11.07. Fiduciary Insurance. The Plan may purchase fiduciary liability
insurance for any of its fiduciaries, or for itself, to cover liability or
losses occurring by reason of the act or omission of a fiduciary, provided that
such insurance permits recourse by the insurer against the fiduciary in the case
of a breach of a fiduciary obligation under ERISA by such fiduciary.

 

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ARTICLE XII.

TRUST

Section 12.01. Trust Funds.

(a) All Contributions under the Plan shall be transferred to the Trust directed
by the Administrator to be held, managed, invested, and distributed as part of
the appropriate Fund by the Trustee in accordance with the provisions of the
Plan and the Trust Agreement. All Trust assets invested in Employer Stock shall
be transferred to, and accounted for, solely under the Stock Subaccounts of the
Participants, shall constitute the primary assets of the stock bonus plan
portion of the Plan, and shall become subject to the requirements of Code
Sections 4975(e)(7), 409(e), 409(h), and 409(o), as provided in this restatement
of the Plan. All Trust assets not invested in Employer Stock, shall be retained
in, and accounted for, solely under the profit sharing plan portion of the Plan.
Except as provided in the preceding sentences, the Trustee shall be accountable
only for funds actually received by the Trustee, and the Trustee shall have no
right or duty (i) to inquire into the amount of Contributions or distributions
made by the Company, (ii) to inquire into the methods used in determining the
amount of Contributions or distributions, or (iii) to pursue and collect such
amounts. All benefits under the Plan shall be distributed solely from the Trust
Fund, and the Employer shall have no liability therefore other than the
obligation to make Contributions as provided in the Plan.

(b) The Administrator may designate investment funds for the Non-Stock
Subaccounts designed with such investment guidelines as the Administrator may
specify (“Fund”), and may add additional Funds or eliminate Funds in its sole
discretion. Any such

 

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Funds may invest through the medium of any common, collective, or commingled
fund maintained by the Trustee that is invested principally in property of the
kind specified for such Fund, and may be in individual assets not part of the
Fund. The Administrator or its designee shall establish investment guidelines or
policies applicable to each such Fund. A portion of each Fund may be maintained
in cash or cash equivalents. Income or losses from investments in each Fund
shall be credited or debited to the same Fund.

(c) In the event the Administrator allows Participants to individually direct
specific investments under the Plan, a separate directed investment fund shall
be established for each Participant who has directed an investment pursuant to
Subsection 12.02(b). Transfers between the Trust Funds and the directed
investment fund of the Participant shall be charged and credited as the case may
be to the appropriate Account. The directed investment fund shall not share in
Trust Fund earnings, but it shall be charged or credited as appropriate with the
net earnings, gains, losses, and expenses as well as any appreciation or
depreciation in market value during each Plan Year attributable to such account.

Section 12.02. Investments.

(a) Except as otherwise provided herein, Participants shall be permitted to
direct the Trustee as to the investment of all or a portion of their Accounts.
Investment directions of Participants shall be subject to the procedures
established and applied in a nondiscriminatory manner, under which Participants
shall direct the applicable Trustee on the Applicable Form to invest their
Accounts in specific Funds.

(b) As of June 1, 2001, the Administrator permitted Participants in the Biomet,
Inc. 401(k) Profit Sharing Plan to direct the investment of all or a portion of
their Pre-Tax Contribution Accounts, Nonelective Contribution Accounts and
Rollover/Transfer Accounts. As

 

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of January 1, 2007, the Administrator permitted Participants in the Biomet, Inc.
401(k) Profit Sharing Plan who have completed three (3) or more Years of Service
to direct the investment of all or a portion of their Matching Accounts. As of
April 1, 2007, the Administrator permits Participants who have completed three
(3) or more Years of Service to direct the investment of all or a portion of
their Regular Accounts, Savings Accounts and Tax Credit Accounts. Participants
shall be permitted to direct the Trustee to invest their Accounts in specific
assets including Employer Stock or Employer real property that constitutes a
Qualifying Employer Security, and other investments authorized by the
Administrator, including self-directed brokerage accounts. Effective April 1,
2007, if a Participant directs the investment of all or any portion of his
Non-Stock Subaccounts into Employer Stock, such directed amount shall be
transferred to his Stock Subaccounts and shall become subject to the terms of
Section 12.04.

(c) The Administrator may appoint one or more Investment Managers to direct the
investment and reinvestment of all or a portion of the Trust Funds held in a
Fund.

(d) Any loan to a Participant or Beneficiary shall be considered to be a
separate asset of the Trust Fund segregated for the benefit of such Participant.
The interest and principal paid on the loan shall be credited to the Account or
Accounts of such Participant and such Fund or Funds from which the loan proceeds
came.

Section 12.03. Transfers Among Investment Funds. (a) Effective as of the
Valuation Date following any request of a Participant, (i) Participant Pre-Tax
Contribution Accounts, Non-Elective Contribution Accounts, and Rollover Transfer
Accounts, (ii) amounts credited to the Matching Accounts of Participants who
have completed three Years of Service with respect to Plan Years beginning on or
after January 1, 2007, and (iii) amounts credited to the Regular Accounts,
Savings Accounts and Tax Credit Accounts of Participants who have completed
three

 

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Years of Service on or after April 1, 2007, may be transferred among designated
investment Funds, including Employer Stock, as directed by the Participant. The
Administrator shall transfer such Funds as directed as soon as administratively
feasible.

(b) Elections with respect to investments in Employer Stock by Participants who
are members of the Board of Directors of the Company or who are officers of the
Company within the meaning of Securities and Exchange Commission Rule 16a-1(f),
will be given effect only if one of the following conditions is met:

(1) if the election is made in connection with the death, Disability, Retirement
or Termination of Employment of the Participant; or

(2) the election is required to be made available to the Participant pursuant to
the Code; or

(3) if the election involves a transfer of existing Non-Stock Subaccount
balances into Stock Subaccounts, it is not made within six (6) months following
the most recent election, with respect to any employee benefit plan of the
Company, that effected a transaction that was a disposition of Employer Stock;
or, if the election involves a transfer of Stock Subaccounts into Non-Stock
Subaccounts, it is not made within six (6) months following the most recent
election, with respect to any employee benefit plan of the Company, that
effected a transaction that was an acquisition of Employer Stock; or

(4) if the election results in the investment of future contributions (e.g., new
money) into Employer Stock; or

(5) the election is determined by the Trustee, based upon the advice of counsel
to the Company, to be otherwise exempt from Section 16(b) of the Exchange Act of
1934.

 

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Section 12.04. Investment of Stock Subaccounts.

(a) The Stock Subaccounts of Participants shall be invested primarily in
Employer Stock, and any amounts transferred from a Participant’s Non-Stock
Subaccount to his Stock Subaccount shall be so invested; provided, however, a
Participant may direct that all or any portion of his Stock Subaccounts be
invested in or transferred to one (1) or more of the Funds in accordance with
Section 12.02 or Section 12.03. Notwithstanding the foregoing, any portion of a
Participant’s Account balance that is invested in Employer Stock shall be
subject to the provisions of this Plan that apply to Stock Subaccounts,
including the provisions of Subsections (b) and (c) below.

(b) Within ninety (90) days after the last day of each Plan Year during the
Election Period of the Participant, the Participant shall be permitted to direct
the Plan as to the investment of at least twenty-five percent (25%) of the value
of his Stock Subaccounts in one (1) or more of the Funds; provided, however, a
Participant may direct the Plan as to the investment of at least fifty percent
(50%) of the value of his Stock Subaccounts starting with the last Plan Year in
the Election Period of the Participant.

(c) A Participant’s direction under Subsection (a) shall specify which, if any,
of the investment Funds offered by the Plan, in accordance with Code
Section 401(a)(28)(B)(ii)(II) and the regulations thereunder, that the
Participant selects. Such direction shall be provided to the Administrator in
writing on the Applicable Form and the Plan shall then invest the portion of the
Account of the Participant covered by the election in accordance with such
direction no later than ninety (90) days after the election is made.

Section 12.05. Investments. Notwithstanding anything in the Plan to the
contrary, the Stock Subaccounts which constitute the stock bonus component of
the Plan shall be invested

 

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primarily in Employer Stock, and as otherwise provided in the Trust Agreement.
Therefore, there shall be no limitation on the percentage of the assets of the
Plan in the Stock Subaccounts that are invested in Employer Stock. The Plan
assets in the Non-Stock Subaccounts may also be invested in appropriate
investments other than Employer Stock, including cash or readily liquidated
investments, in anticipation of the acquisition of Employer Stock, and as
otherwise set forth in the Trust Agreement.

Section 12.06. Acquisition and Disposition of Employer Stock. Subject to the
following provisions, the Trustee, in its sole discretion, may purchase Employer
Stock from, or sell Employer Stock to, any person.

(a) The purchase price paid by the Trust for Employer Stock shall not exceed
fair market value (as determined pursuant to Subsection 6.03(b)), and the sale
price received by the Trust for Employer Stock shall not be less than fair
market value (as determined pursuant to Subsection 6.03(b)).

(b) Except as provided in Article IX, any Employer Stock acquired by the Plan
shall be held in the Employer Stock Suspense Account, until allocated pursuant
to Section 4.04.

(c) No commission shall be charged to the Plan with respect to a transaction
between the Trust and an Interested Party or any other transaction to which
ERISA Section 406 or 407 applies.

Section 12.07. Voting of Stock. Except as specifically provided in Subsection
(a), the Trustee shall have all voting rights appurtenant to the Employer Stock
held in the Trust, and shall vote the shares as determined in the sole
discretion of the Trustee.

(a) Each Participant shall have the right to direct the Trustee as to the manner
in which the voting rights of Employer Stock (including fractional shares)
allocated to the

 

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Participant’s Stock Subaccounts are to be voted. Each Participant shall be
entitled to one (1) vote for each share of Employer Stock allocated to his Stock
Subaccounts and a fractional vote based upon any fractional shares allocated to
such Stock Subaccounts.

(b) The Trustee shall vote the combined shares and fractional shares of Employer
Stock that are allocated to Participants’ Stock Subaccounts, in accordance with
the direction of such Participants (the “Directed Shares”). If any Participant
fails to direct the Trustee as to the manner in which to vote his allocated
Employer Stock, the Trustee shall vote the shares or fractional shares of such
Participant’s allocated Employer Stock in the same proportion as the Directed
Shares. With respect to any shares of Employer Stock that are held in the
Employer Stock Suspense Account or the Employer Stock Collateral Account under
the Plan, the Trustee shall vote such shares in the same proportion as the
Directed Shares.

(c) The Company shall furnish the Trustee and all Participants entitled to
direct voting of any Employer Stock with notices and information statements when
voting rights are to be exercised. The time and manner for furnishing such
Participants with a notice or information statement must comply with the
corporate law of the State of Indiana and the Articles of Incorporation and
By-laws of the Company. The content of the information statements must be the
same for Participants as for other security holders. The Company’s management
may solicit and exercise the voting rights of Participants under any proxy
provision applicable to all security holders of the Company.

(d) The Beneficiaries of deceased Participants shall have the same voting rights
as Participants.

Section 12.08. ERISA Section 404(c). The Plan is intended to comply with ERISA
Section 404(c), and such compliance shall limit the liability of Plan
fiduciaries with regard to

 

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Participant-directed investments. In accordance with the provisions of ERISA
Section 404(c), each Participant shall have the right to direct the investment
of his Accounts in one (1) or more Funds in accordance with this Article, the
Trust Agreement, and any rules promulgated and adopted by the Plan
Administrator.

ARTICLE XIII.

AMENDMENT OR TERMINATION OF PLAN

Section 13.01. Amendment or Termination. The Administrator shall have the right,
in its sole and final discretion, to amend or terminate this Plan at any time
and to any extent that it may deem advisable; provided, however, that no
amendment shall retroactively increase the duties or responsibilities of the
Trustee without its written consent. A certified copy of the resolution of the
Administrator taking such action shall be delivered to the Trustee, and the Plan
shall be amended or terminated in the manner and effective as of the date set
forth in such resolution, and the Employers, Employees, Participants,
Beneficiaries, Trustee, Administrator, and all other persons having any interest
under this Plan shall be bound thereby. Provided, however, that no such
Administrator action shall operate to recapture for an Employer any
contributions or payments previously made to the Plan, nor to adversely affect
any benefits otherwise payable to Participants and their Beneficiaries, except
to the extent permitted by ERISA and the Code.

Section 13.02. Amendment for Qualification of Plan. It is the intent of the
Company that the Plan shall be and remain qualified for tax purposes under the
Code. The Administrator shall timely submit the Plan for approval under the Code
and all expenses incident thereto shall be borne by the Company. The
Administrator may make any modifications, alterations, or amendments to the Plan
necessary to obtain and retain approval of the Secretary of the Treasury

 

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or his delegate as may be necessary to establish and maintain the status of the
Plan as qualified and the deductibility for income tax purposes of Employer
contributions thereto under the provisions of the Code or other federal
legislation, as now in effect or hereafter enacted, and the regulations issued
thereunder. Any modification, alteration, or amendment of the Plan, made in
accordance with this Section, may be made retroactively, if necessary or
appropriate. A certified copy of the resolution of the Administrator making such
amendment shall be delivered to the Trustee, and the Plan shall be amended in
the manner and effective as of the date set forth in such resolution, and the
Employers, Employees, Participants, Beneficiaries, Trustee, Administrator, and
all others having any interest under the Plan shall be bound thereby.

Section 13.03. Restrictions on Amendments. Any amendment may be made to the Plan
that is not contrary to ERISA or the Code. No amendment may be made to the Plan
that violates Code Section 411(d)(6).

Section 13.04. Discontinuance or Suspension of Contributions. An Employer may
discontinue completely or suspend temporarily for a definite or indefinite
period its contributions under the Plan, or terminate its participation in the
Plan, at any time without any liability whatsoever, as contributions by the
Employers are completely voluntary and the Employers are under no contractual
obligation to continue contributions. Temporary suspension of contributions by
an Employer shall not result in any Accounts becoming Vested.

Section 13.05. Allocation of Assets on Termination. In the case of the complete
or partial termination of the Plan, as to one (1) or more Employers, including a
termination arising from the complete discontinuance of contributions, the
Accounts of each affected Participant shall become irrevocably Vested. On such
complete or partial termination, the affected portion of the Trust Funds shall
be liquidated pursuant to the direction of the Administrator. The Plan

 

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shall remain in full effect with respect to each Employer, and Participants who
are Employees of such Employer, that does not terminate its participation in the
Plan on behalf of its Employees; provided, however, that the termination of
participation by less than all of the Employers shall not affect the Plan as it
applies to Participants who are not, at the time of termination, Employees of a
terminating Employer.

ARTICLE XIV.

ENTRY AND WITHDRAWAL OF EMPLOYERS

Section 14.01. Entry of Employers. Any organization classified by the
Administrator as an Employer may become a party to the Plan as of the first day
of any Plan Year, or such other date specified by the Administrator, by
delivering to the Administrator an appropriate resolution by the board of
directors or other governing body of such organization. With the consent of the
Administrator, such organization shall become an Employer hereunder, as of the
specified date, and shall be subject to the terms and provisions of the Plan as
then in effect and thereafter amended, including such credit for Years of
Service as established by the Administrator.

Section 14.02. Withdrawal from Plan. Any Employer may withdraw from the Plan
under the following conditions:

(a) Any Employer hereunder which elects to withdraw from the Plan shall deliver
to the Administrator a resolution of its board of directors or other governing
body authorizing its withdrawal as an Employer hereunder. Notice of withdrawal
must be submitted to the Administrator at least thirty (30) days prior to the
date withdrawal is to be effective, unless such requirement is waived by the
Administrator.

(b) If the withdrawal of an Employer is a part of the complete termination and
dissolution of the business of said Employer or the discontinuance of the Plan
without

 

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termination of its business and without the immediate establishment of a new
qualified plan under the Code, the provisions of Article XIII hereof shall apply
to the withdrawal of such Employer as if the withdrawal were a part of the
complete termination of this Plan, but without affecting the participation of
other Employers hereunder.

(c) If the withdrawal of any Employer hereunder is the result of the
establishment of a new and different retirement plan for its employees that will
immediately upon withdrawal of said Employer from the Plan cover employees of
such Employer who are Participants under the Plan, upon receiving evidence of
the terms of such new plan, the Trustee shall establish the interest of said
Employer in the value of the Trust Fund, as approved by the Administrator, and,
after reduction for charges and expenses incurred to process withdrawal of the
Employer, shall transfer such amount from the Trust Fund to the trustee or
trustees of such new Plan. Provided, however, the Administrator in its sole
discretion, shall have the right to require the Trustee to transfer the
withdrawal value of said Employer to the trustee or trustees of the new plan in
the form of installments, in cash or in cash and securities over a period of
time not to exceed one (1) year following the effective date of the withdrawal
of said Employer. The application of the interest of the withdrawing Employer in
the Trust Fund pursuant to the terms of this Article shall constitute a complete
discharge of the Trustee, Administrator, Board of Directors, and any other
Employers without any responsibility on their part to see to the application or
disposition thereof.

ARTICLE XV.

TOP-HEAVY PROVISIONS

Section 15.01. Definitions. For purposes of this Article, the following
definitions shall apply:

(a) “Aggregation Group” means each qualified plan of the Employers (including
any terminated plan if it was maintained at any time during the last one
(1) year period ending on the Determination Date) in which at least one (1) Key
Employee participates in the Plan Year containing the Determination Date or any
of the four (4) preceding Plan Years and each other qualified plan of the
Employers that, during such period, enables any plan in which a Key Employee
participates to meet the requirements of Code Sections 401(a)(4) or 410.
“Aggregation Group” also includes each other qualified plan of the Employers
designated by the Employers as part of such group, if such group, taking into
account such plan, would continue to meet the requirements of Code Sections
401(a)(4) and 410.

 

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(b) “Compensation” means compensation within the meaning of Code
Section 414(q)(4) which, in general, has the same meaning given such term by
Subsection 5.06(d)

(c) “Determination Date” means, for any Plan Year, the last day of the preceding
Plan Year.

(d) “Key Employee” means any Employee or former Employee, and the Beneficiaries
of such Employee, who at any time during the Plan Year that includes the
Determination Date was:

(1) an officer of an Employer having annual Compensation greater than One
Hundred Thirty Thousand Dollars ($130,000) (as adjusted under Code
Section 416(i)(l));

(2) a five percent (5%) owner of an Employer; or

(3) a one percent (1%) owner of an Employer with annual Compensation of more
than One Hundred Fifty Thousand Dollars ($150,000).

 

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The status of an Employee as a Key Employee shall be determined with reference
to the Plan Year containing the Determination Date, and shall be determined in
accordance with Code Section 416(i)(1) and the regulations thereunder.

(e) “Non-Key Employee” means any Employee or former employee, and the
Beneficiaries of such Employee, who is not a Key Employee.

(f) “Top-Heavy Plan” means, for any Plan Year, the Plan if the “top-heavy ratio”
for the Aggregation Group as of the Determination Date exceeds sixty percent
(60%). The top-heavy ratio is a fraction, the numerator of which is the present
value of the cumulative accrued benefits as of the Top-Heavy Allocation Date
under the defined benefit plans for all Key Employees plus the sum of account
balances as of the Determination Date under the defined contribution plans for
all Key Employees, and the denominator of which is the present value of the
cumulative accrued benefits as of the Top-Heavy Allocation Date under the
defined benefit plans plus the sum of account balances as of the Determination
Date under the defined contribution plans for all Participants, including Key
Employees, former Participants, and the Beneficiaries of such Participants.
Provided, however, in the calculation of the top-heavy ratio (i) if any
Participant has not performed any services for an Employer at any time during
the one (1) year period ending on the Determination Date, the cumulative accrued
benefit and the value of the accounts of such Participant shall not be taken
into account; (ii) the value of account balances and cumulative accrued benefits
of a Participant who is a Non-Key Employee but who was a Key Employee in a prior
year shall be disregarded; (iii) the value of account balances and cumulative
accrued benefits for the Aggregation Group shall be calculated with reference to
the Determination Date of each plan that falls within the same calendar year;
(iv) the extent to which distributions, rollovers, and transfers are taken into
account will be made in accordance with

 

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Code Section 416 and the regulations thereunder; and (v) the present value of
the cumulative accrued benefits and account balances of a Participant shall be
increased by the aggregate distributions made with respect to such Participant
during the one (1) year period ending on the Determination Date (five (5) year
period ending on the Determination Date in the case of a distribution for a
reason other than separation from service, death or disability), including such
distributions from terminated plans that, if not terminated, would be required
to be included in the Aggregation Group. The accrued benefit of a Participant
other than a Key Employee shall be determined under: (i) the method, if any,
that uniformly applies for accrual purposes under all defined benefit plans
maintained by the Employers, or (ii) if there is no such method, as if such
benefit accrued not more rapidly than the slowest accrual rate permitted under
the fractional rule of Code Section 411(b)(1)(C).

(g) “Top-Heavy Allocation Date” means, for any Plan Year, the date of the most
recent valuation immediately preceding or coincident with the Determination Date
for the Plan Year.

(h) “Top-Heavy Year” means any Plan Year in which the Plan is a Top-Heavy Plan.

Section 15.02. Top-Heavy Plan Provisions. If the Plan is a Top-Heavy Plan in any
one (1) or more Plan Years, and notwithstanding Article V, in each Top-Heavy
Year the following provisions shall apply:

(a) The minimum allocation to the Accounts for each Participant who is a Non-Key
Employee and who is an Employee on the last day of the Plan Year shall equal a
percentage of the Participant’s Compensation for the Top-Heavy Year equal to the
lesser of (i) three percent (3%) or (ii) the percentage of Compensation for the
Top-Heavy Year allocated to the Accounts of the Key Employee with the highest
percentage allocation for the Top-Heavy Year; provided,

 

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however, the minimum allocation may not be less than three percent (3%) if the
Plan is required to be included in an Aggregation Group and the Plan enables a
defined benefit plan required to be included in such group to meet the
requirements of Code Section 401(a)(4) or 410. The minimum allocation to the
Accounts of a Non-Key Employee shall include all amounts allocated to the
Accounts of such Employee for the Top-Heavy Year pursuant to Article IV;
provided, however, that Catch-Up Contributions shall not be counted for this
purpose. The preceding sentence shall apply with respect to Matching
Contributions under the Plan or, if the Plan provides that the minimum
allocation requirement shall be met in another plan, such other plan. Employer
Matching Contributions that are used to satisfy the minimum allocation
requirements shall be treated as Matching Contributions for purposes of the
Average Contribution Percentage test under Section 5.05 and other requirements
of Code Section 401(m). In determining the highest percentage allocation for any
Key Employee for the Top-Heavy Year, all amounts allocated to the Accounts of
the Key Employee for the Top-Heavy Year pursuant to Article IV are taken into
account. Those Non-Key Employees who are Participants in the Plan and have not
Terminated Employment by the end of the Plan Year shall receive the minimum
allocation regardless of whether the Non-Key Employee has completed fewer than
one thousand (1,000) Hours of Service during the Plan Year, and regardless of
the level of Compensation of the Non-Key Employee.

(b) Notwithstanding Subsection (a), if an Employer maintains another Top-Heavy
Plan that is a defined contribution plan, and the other plan satisfies
Subsection (a) with respect to a Participant who is a Non-Key Employee in both
plans, then Subsection (a) shall not apply to this Plan with respect to such
Participant.

 

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(c) Notwithstanding Subsection (a), if an Employer maintains another Top-Heavy
Plan that is a defined benefit plan, then either (i) this other plan must
satisfy the defined benefit minimum provisions of Code Section 416(c)(1) with
respect to a Participant who is a Non-Key Employee in both plans, or (ii) this
Plan must provide a minimum allocation for such Participant (determined under
the rules of Subsection (a)) equal to five percent (5%) of the Participant’s
Compensation for the Top-Heavy Year.

ARTICLE XVI.

NONALIENATION OF BENEFITS AND DOMESTIC RELATIONS ORDERS

Section 16.01. Nonalienation of Benefits.

(a) Except as provided in Subsection (b), no benefit under the Plan, prior to
actual receipt thereof by a Participant or a Beneficiary, shall be subject to
any debt, liability, contract, engagement, or tort of any Participant or his
Beneficiary, nor subject to anticipation, sale, assignment, transfer,
encumbrance, pledge, charge, attachment, garnishment, execution, alienation, or
other voluntary or involuntary alienation or other legal or equitable process,
nor transferable by operation of law.

(b) The benefits of a Participant shall be paid (i) to an Alternate Payee
pursuant to the applicable requirements of any Qualified Domestic Relations
Order under Code Sections 401(a)(13) and 414(p), and (ii) pursuant to any
settlement or judgment to which Code Section 401(a)(13)(C) applies.

(c) Notwithstanding any other provision of the Plan, any benefit payable to a
Participant or a Beneficiary of a Participant shall be reduced by any benefit
paid or payable pursuant to a Qualified Domestic Relations Order from the
benefits of the Participant under the Plan. The Administrator, in its sole
discretion, may direct the Trustee to separately account for any benefit payable
pursuant to Subsection (b).

 

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(d) Notwithstanding any other provision of the Plan, the Plan may make a
distribution to an Alternate Payee pursuant to a Qualified Domestic Relations
Order prior to the date the Participant attains his earliest retirement age, as
defined in Code Section 414(p)(4)(B), if the order specifically provides for
such distribution.

Section 16.02. Procedures Regarding Domestic Relations Orders.

(a) If the Plan receives any order that may be a Qualified Domestic Relations
Order, the Administrator shall:

(1) promptly notify the Participant and any prospective Alternate Payee of
(i) the receipt of such order, and (ii) the procedures under the Plan for
determining whether such order is a Qualified Domestic Relations Order; and

(2) within a reasonable period after receipt of such order, and in accordance
with regulations that the Secretary of Labor may prescribe, determine whether
such order is a Qualified Domestic Relations Order and notify the Participant
and each Alternate Payee of such decision.

(b) The Administrator shall establish reasonable procedures to determine whether
an order is a Qualified Domestic Relations Order and to administer the
distribution of benefits with respect to such orders. The procedures shall
(i) be in writing, (ii) provide prompt notice of such procedures to each person
specified in the order as entitled to the payment of benefits, at the address
specified in the order, and (iii) permit an Alternate Payee to designate a
representative for receipt of copies of notices that are sent to Alternate
Payees with respect to a Qualified Domestic Relations Order.

 

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(c) During any period of time in which the issue of whether an order is a
Qualified Domestic Relations Order is being determined by the Administrator, a
court of competent jurisdiction, or otherwise, the Administrator shall provide
the Trustee with written direction to separately account under the Trust for the
amounts, if any, that would be payable to an Alternate Payee during such period
if such order is determined to be a Qualified Domestic Relations Order. If
within the eighteen (18) month period beginning on the date on which the first
payment would be required to be made under the order, the order, or modification
thereof, is determined to be a Qualified Domestic Relations Order, the
Administrator shall pay such separately accounted amounts, plus any interest
thereon, to the Alternate Payee or Payees entitled thereto. If within the
eighteen (18) month period the order is determined to not be a Qualified
Domestic Relations Order, or if such issue has not been resolved, the
Administrator shall direct the Trustee to pay such separately accounted amounts,
plus any interest thereon, to the Participant or Beneficiary entitled to such
amounts as if there had been no order. Any determination that an order is a
Qualified Domestic Relations Order after the close of the eighteen (18) month
period shall have prospective application only. Notwithstanding the preceding
provisions, and in accordance with such regulations as the Secretary of the
Treasury may prescribe, the Administrator, in its sole discretion, may delay
payment of any amounts payable under the Plan to a Participant (i) to the end of
said eighteen (18) month period, if an order is found to be defective within
said eighteen (18) month period and the Administrator has notice that the
parties with respect to the order are attempting to rectify any defects in the
order, or (ii) for a reasonable period of time, if the Administrator receives
notice that an order that may be a Qualified Domestic Relations Order is being
sought with respect to the Participant; provided, however, for these purposes, a
court stay to the Administrator during the time an appeal is pending is notice
that the parties with respect to

 

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an order are attempting to cure any defects in an order, and the Administrator
shall honor a restraining order prohibiting the disposition of any amounts with
respect to a Participant pending resolution of a dispute with respect to an
order that may be a Qualified Domestic Relations Order.

(d) The Administrator may establish and charge a processing fee with respect to
any Qualified Domestic Relations Order.

Section 16.03. Surviving Spouse. To the extent so provided in any Qualified
Domestic Relations Order, the former Spouse of a Participant shall be treated as
the surviving Spouse of the Participant under the Plan for purposes of Code
Sections 401(a)(11) and 417 and the Spouse of the Participant shall not be
treated as a Spouse of the Participant for such purposes.

ARTICLE XVII.

OPTIONS AND RESTRICTIONS ON EMPLOYER STOCK

Section 17.01. Participant Put Option.

(a) If the Employer Stock is not readily tradable on an established market,
within the meaning of Code Section 409(h)(1), the provisions of this Section
shall apply. A Participant or a Beneficiary shall have the right to require the
Company to purchase any Employer Stock distributed to the Participant or the
Beneficiary under the Plan (“put option”). The put option shall be exercisable
during a fifteen (15) month period that shall begin on the date the Employer
Stock is distributed to the Participant or Beneficiary by the Plan. If not
exercised during such period, the put option shall lapse. For purposes of this
Section, a Participant or a Beneficiary includes donees of such Participant or
Beneficiary and a person (including an estate or its distributee) to whom the
security passes by reason of the death of such Participant or Beneficiary.

 

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(b) The put option is exercised by the holder notifying the Administrator and
the Trustee in writing that the put option is being exercised. The purchase
price at which the put option is exercisable is the fair market value of the
Employer Stock as determined under Section 6.03. If the holder of the put option
notifies the Administrator in writing that he desires to exercise such put
option, the Plan may elect to exercise the rights of the Administrator at the
time the put option is exercised.

(c) At the election of the Administrator (or the Plan, if applicable) payment of
the purchase price to the holder of the put option may be made in a lump sum, or
if otherwise permitted by ERISA, in deferred installments. Any installment
payments shall provide for a reasonable rate of interest, and as security for
such installment payments, the holder of the put option shall be given a
promissory note that provides that it shall become due and payable in full if
the purchaser defaults in the payment of such installment payments. The
installment payments shall begin within thirty (30) days after the date the put
option is exercised and must be substantially equal. The cumulative payments at
any time shall be no less than the aggregate of reasonable periodic payments as
of such time. Generally, the payment period for such installments may not end
more than five (5) years after the date the put option is exercised; provided,
however, if otherwise reasonable, such period may be extended to a date no later
than the earlier of ten (10) years from the date the put option is exercised or
the date the proceeds of the exempt loan used by the Plan to acquire the
Employer Stock subject to the put option is entirely repaid.

Section 17.02. Restrictions on Transfer.

(a) In the event the Employer Stock is not readily tradable on an established
market at the time an option may be exercised, the Trustee shall have an option,
and if the Trustee fails to

 

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exercise such option in whole or in part, each Employer shall have an option to
purchase, as provided in Section 17.03, any or all shares of Employer Stock
previously distributed pursuant to Article VI in the event of a “transfer” of
any of such shares. The term “transfer” as used herein shall mean and include
any sale, assignment, conveyance, gift, bequest, intestate transfer, pledge,
foreclosure of a pledge or other encumbrance, levy or other transfer pursuant to
a judicial order or legal process, voluntary or involuntary bankruptcy of a
shareholder holding such shares, or the appointment of a receiver with respect
to the property of such shareholder or any other disposition of any kind or
character.

(b) Prior to any voluntary “transfer” or proposed “transfer” or immediately
following any involuntary “transfer,” as set forth in Subsection (a) above, the
holder of Employer Stock, or any holder of an interest therein, that is the
subject of such transfer, shall give notice to the Trustee, the Administrator,
and the Secretary of the Company of the transfer or proposed transfer, setting
forth all of the terms and conditions of any such transfer or proposed transfer
including:

(1) the identification of each transferee or proposed transferee of the Employer
Stock;

(2) the number of shares and certificate numbers of Employer Stock that are
subject to the transfer or proposed transfer, or owned by a deceased Participant
or Beneficiary, as the case may be;

(3) the authority, conditions, and circumstances under which the transferee or
proposed transferee obtained or shall obtain any interest in such Employer
Stock;

(4) the proposed purchase price, if any, offered by a buyer making a good faith
offer to purchase the Employer Stock; and

 

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(5) all other terms of the transfer or proposed transfer.

(c) The options of the Trustee and the Employers under Subsection (a) above
shall arise on the earlier of:

(1) the receipt by the Trustee, the Administrator, and the Secretary of the
Company of the notice required under Subsection (b) above; or

(2) the tender of any certificate representing such Employer Stock to the
Employer for transfer on the records of the Company.

The Trustee, or if the Trustee fails to exercise its option in whole, each
Employer, may exercise its option by giving notice to the holder of such shares
of its intention to exercise the option within fourteen (14) days after the date
the option arises.

(d) On and after the date of any involuntary transfer of Employer Stock, or the
transfer of any such stock in violation of this Section, and until the earlier
of (i) the transfer of such shares to the Trustee or an Employer pursuant to the
exercise of any option hereunder, or (ii) the lapse of the period for the
exercise of any such options with respect to such shares under Subsection
(c) above, such shares shall not be voted and any vote of such shares shall be
void ab initio, and all distributions with respect to such shares shall be held
by the Company or any other person receiving such distribution in trust, to be
paid to the transferee of such shares upon the exercise or nonexercise of the
options with respect to such shares.

(e) In the event neither the Trustee nor the Employers exercises the option to
purchase Employer Stock, provided in Subsection (a) above, and such shares are
not otherwise subject to any restriction on transfer, the holder of such shares
shall have a right to sell, encumber, transfer or otherwise dispose of such
shares on the terms of the transfer set forth in the written notice to the
Trustee, the Administrator, and the Secretary of the Company, provided any

 

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such voluntary transfer is effected within fourteen (14) days after the
expiration of the fourteen (14) day option period under Subsection (c) above. If
the transfer is not effected within such period, the options under Subsection
(a) above shall reapply. If neither the Trustee nor the Employer exercises the
option to purchase Employer Stock in the event of an involuntary transfer, the
Secretary shall effect the transfer of such shares on its records. In the event
of the disposition of the Employer Stock, the transferee of such shares shall
take and hold such shares subject to the options provided in this Section.

Section 17.03. Payment of Purchase Price.

(a) The purchase price of the Employer Stock subject to an option under
Subsection 17.02(a), and the terms of such purchase, shall be at the fair market
value of such stock as provided under Section 11.03 and upon the terms under
Subsection (b) below, or if greater, the proposed purchase price and upon such
other terms as set forth in the notice required under Subsection 17.02(b).

(b) Purchases by the Trustee or an Employer pursuant to Subsection (a) above may
be paid: (i) in a lump sum, (ii) in quarterly installments over a period not to
exceed ten (10) years, with interest at six percent (6%), compounded annually,
or (iii) in accordance with any payment terms set forth in the written notice
referred to in Subsection 17.02(b), at the election of the Trustee or an
Employer. Such payment or payments of the purchase price shall be made or
commenced as soon as practicable after the date the Trustee or an Employer
becomes obligated to purchase the stock. Within thirty (30) days of the date on
which the Trustee or an Employer exercises the option, the holder of such shares
shall deliver to the Trustee or an Employer the share certificates, duly
endorsed or accompanied by all documents necessary to effect a transfer, and
accompanied by the payment of any transfer taxes due, and the Trustee or an
Employer shall

 

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pay the shareholder in a lump sum or shall execute a promissory note to the
shareholder in the amount of the unpaid price. The purchase price, or any part
thereof, may be prepaid at any time without penalty.

Section 17.04. Nonterminable Protections and Rights. The protections and rights
provided to Participants under Section 17.01 concerning put options are
nonterminable and the Plan shall not be amended to effect a termination of such
protections and rights so long as such termination is prohibited by regulations
or rulings of the United States Department of Labor or the Internal Revenue
Service.

Section 17.05. Restrictions on Loans. Notwithstanding anything in the Plan or
any other agreement to which the Plan may be bound, the Trustee, on behalf of
the Plan, may not enter into a loan made by a Party in Interest or disqualified
person or a loan that is guaranteed by a Party in Interest or disqualified
person, unless all the terms, conditions, and requirements of any regulations or
rulings of the United States Department of Labor or the Internal Revenue Service
have been satisfied or for which provision has otherwise been made.

ARTICLE XVIII.

MISCELLANEOUS PROVISIONS RELATING TO

EMPLOYER STOCK

Section 18.01. Stock Dividends and Rights. The Trustee shall allocate any
Employer Stock received as a stock dividend, or stock split, or as the result of
a reorganization in the same manner as the Employer Stock to which it is
attributable. The Trustee, as directed by the Administrator, shall exercise
rights, warrants, or options issued on Employer Stock held in the Plan, to the
extent cash is then available. Any such rights, warrants, or options that cannot
be exercised due to lack of cash then available shall be sold by the Trustee and
the proceeds treated as a cash dividend received on Employer Stock.

 

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Section 18.02. Endorsement of Stock Certificates. Certificates for Employer
Stock registered in the name of the Trustee and certificates for Employer Stock
distributed to a Participant or Beneficiary shall have endorsed thereon (if
required) an appropriate legend setting forth the restrictions and limitations
on the transfer, hypothecation, or sale thereof under the Plan.

Section 18.03. Securities Laws. All transactions provided for herein including
but not limited to the issuance of any instrument evidencing a beneficial
interest in the Plan and the acquisition of Employer Stock by the Plan,
distribution thereof as a benefit, and repurchase or sale thereof by the Plan,
are subject to and conditioned upon compliance with any applicable provisions of
federal and state securities laws or regulations and with the rules of any stock
exchange on which Employer Stock may be listed; and any such transaction also
shall be conditioned upon such clearance or approval thereof by such other
regulatory bodies as the Administrator may deem advisable.

Section 18.04. Dividends on Company Stock.

(a) Stock dividends paid during a Plan Year on Employer Stock allocated to
Participant Stock Subaccounts shall be allocated to such Stock Subaccounts as of
the date of payment. Cash dividends on Employer Stock allocated to Participant
Stock Subaccounts shall be used as provided in this Subsection. Cash dividends
paid on Employer Stock allocated to a Participant’s Stock Subaccount, pursuant
to the Participant’s election, shall be either:

(1) paid into the stock bonus plan component of the Plan, and used to purchase
shares of Employer Stock to be allocated to the Participant’s Dividend Account;
or

 

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(2) distributed to the Participant, either directly by the Company to the
Participant (or, if the Participant is deceased, his Beneficiary), or if paid to
the Trustee, by the Trustee to the Participant (or, if a Participant is
deceased, his Beneficiary) as soon as administratively feasible after payment to
the Trustee but in no case later than ninety (90) days after the end of the Plan
Year in which the dividends are paid.

The Participant’s election under this Subsection shall be irrevocable as of the
date the cash dividend is paid or such earlier date as designated by the
Administrator or its designee; provided however, that a Participant may change
his election with regard to any future cash dividend at least annually. If a
Participant does not make an election under this Subsection, the Participant
shall be deemed to have elected that such cash dividend shall be paid into the
stock bonus plan component of the Plan and used to purchase additional shares of
Employer Stock pursuant to Paragraph (1). All cash dividends paid on Company
Stock and allocated to Participants’ Dividend Accounts under this Subsection
shall be immediately one hundred percent (100%) Vested.

(b) If an Acquisition Loan is outstanding, cash dividends on unallocated shares
of Employer Stock purchased with the proceeds of the Acquisition Loan shall be
used to meet the obligations of such Acquisition Loan through which the purchase
of the shares was financed.

ARTICLE XIX.

MISCELLANEOUS

Section 19.01. Non-Diversion. The assets of the Plan shall never inure to the
benefit of an Employer and shall be held for the exclusive purposes of providing
benefits to Participants in the Plan and their Beneficiaries and defraying
reasonable expenses of administering the Plan, except as follows:

(a) If a contribution is made by an Employer under a mistake of fact, such
contribution shall be returned to the Employer, upon demand, within one (1) year
after the payment of the contribution and shall be reduced for any loss incurred
but unadjusted for any gains earned during the time the mistaken contribution
was part of the Trust.

 

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(b) Contributions by an Employer are conditioned on the deductibility of the
contribution under the Code. To the extent the deduction is disallowed, such
contributions to the extent disallowed shall be returned to the Employer, upon
demand, within one (1) year after the disallowance of such deduction. Any amount
not returned to the Employer shall be deductible in subsequent taxable periods
as provided in the Code.

Section 19.02. Military Service.

Notwithstanding any other provision in the Plan to the contrary, any Participant
who is entitled to the rights, protections, and privileges afforded by USERRA
and is reemployed with an Affiliated Employer as provided in USERRA, shall, to
the extent required by USERRA, (i) receive credit for the period served in the
military for purposes of Vesting and benefit accrual under the terms of the
Plan, (ii) be entitled to receive any Employer Contributions the Participant
failed to receive as a result of his or her military service as required by
USERRA, and (iii) be entitled to make-up any contributions the Participant
missed as a result of his or her military service, to the extent required by
USERRA and permitted under the Code. However, any make-up Contributions shall
not exceed the amount the Participant would have been permitted to contribute to
the Plan had the Participant remained continuously employed by the Employer
throughout the period of his or her military service. Any make-up Contributions
to the Plan described in this Section shall be made during the period beginning
with the date of reemployment and ending on the date that occurs on the earlier
of (i) three (3) times the period of the Participant’s military service, or
(ii) five (5) years.

 

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Section 19.03. Merger, Consolidation of Plans, or Transfer of Plan Assets. In
the case of any merger or consolidation with, or transfer of assets or
liabilities to, any other plan, each Participant in the Plan shall be entitled
to a benefit (as if the Plan had been terminated) immediately after the merger,
consolidation, or transfer that is equal to or greater than the benefit he would
have been entitled to receive immediately before the merger, consolidation, or
transfer (as if the Plan had been terminated). The Plan shall comply with the
requirements of Code Sections 401(a)(11)(A) and 417, and the regulations issued
thereunder, with respect to a Participant’s benefits, if for that Participant,
the Plan is a direct or indirect transferee of benefits held on or after
January 1, 1985, by a defined benefit plan or a defined contribution plan
subject to those laws. If the Plan provides for a separate accounting with
respect to any such transferred benefits, the Plan may apply these requirements
only to the separate account attributable to the transferred benefits.

Section 19.04. Allocation of Fiduciary Responsibilities. To the extent permitted
under ERISA, each fiduciary under the Plan shall be responsible only for the
specific duties assigned under the Plan and shall not be directly or indirectly
responsible for the duties assigned to another fiduciary. Any person or a group
of persons may serve in more than one (1) fiduciary capacity with respect to the
Plan.

Section 19.05. Limitation of Rights and Obligations. Neither the establishment
nor maintenance of the Plan nor any amendment thereof, nor any act or omission
under the Plan or resulting from the operation of the Plan shall be construed:

 

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(a) as conferring upon any Participant, Beneficiary, or any other person a right
or claim against the Trust, the Company, the Employer, the Administrator, or the
Trustee, except to the extent that such right or claim shall be specifically
expressed and provided in the Plan or provided under ERISA;

(b) as creating any responsibility or liability of the Employer for the validity
or effect of the Plan;

(c) as a contract or agreement between the Employer and any Participant or other
person;

(d) as being consideration for, or an inducement or condition of, employment of
any Participant or other person, or as affecting or restricting in any manner or
to any extent whatsoever the rights or obligations of the Employer or any
Participant or other person to continue or terminate the employment relationship
at any time; or

(e) as giving any Participant the right to be retained in the service of the
Employer or to interfere with the right of the Employer to discharge any
Participant or other person at any time.

Section 19.06. Notice. Any notice given under this Plan shall be sufficient if
given to the Administrator, when addressed to its office, or if given to a
Participant, when addressed to the Participant at his or her address as it
appears in the records of the Administrator.

Section 19.07. Right of Recovery. If the Company and/or the Trustee makes any
payment that according to the terms of the Plan and the benefits provided
hereunder should not have been made, the Company and/or the Trustee may recover
that incorrect payment, whether or not it was made due to the error of the
Company and/or the Trustee, from the person to whom it was made, or from any
other appropriate party. If any such incorrect payment is made directly to a
Participant, the Company and/or the Trustee may deduct it when making future
payments directly to that Participant.

 

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Section 19.08. Legal Counsel. The Administrator and/or its designee, and the
Trustee may from time to time consult with counsel, who may be counsel for the
Company, and shall be fully protected in acting upon the advice of such counsel.

Section 19.09. Evidence of Action. Any action by any Employer pursuant to any of
the provisions of this Plan shall be evidenced by resolution of its governing
body, and the Administrator shall be fully protected in acting in accordance
with such resolution so certified to it. All orders, requests and instructions
to the Administrator by an Employer or by any duly authorized representative,
shall be in writing and the Administrator shall act and shall be fully protected
in acting in accordance with such orders, requests and instructions.

Section 19.10. Audit. If an audit of the Plan and Trust is required under ERISA
for any Plan Year, the Administrator shall engage an independent qualified
public accountant. Such audit shall be conducted in accordance with the
requirements of ERISA Section 103.

Section 19.11. Bonding. Each fiduciary of the Plan, unless exempted under ERISA,
shall be bonded to the extent required by ERISA. The expense of such bond shall
be paid from the assets of the Plan unless paid by the Employer.

Section 19.12. Receipt and Release. Any payments to any Participant or
Beneficiary shall, to the extent thereof, be in full satisfaction of the claim
of such Participant or Beneficiary being paid thereby and the Trustee or
Administrator may condition payment thereof on the delivery by the Participant
or Beneficiary of the duly executed receipt and release in such form as may be
determined by the Trustee or Administrator.

 

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Section 19.13. Legal Actions. If the Administrator is made a party to any legal
action regarding the Trust or the Plan, except for a breach of fiduciary
responsibility of such person or persons, any and all costs and expenses,
including reasonable attorneys’ fees, incurred by the Administrator in
connection with such proceeding shall be paid from the assets of the Plan unless
paid by the Company.

Section 19.14. Reliance. The Administrator shall not incur any liability in
acting upon any notice, request, signed letter, telegram, or other paper or
document believed by the Administrator to be genuine or to be executed or sent
by an authorized person.

Section 19.15. Entire Plan. The Plan document and the documents incorporated by
reference herein shall constitute the only legally governing documents for the
Plan. All statements made by the Company, Employer, Administrator, or Trustee
shall be deemed representations and not warranties. No such statements shall
void or reduce coverage under the Plan or be used in defense to a claim unless
in writing signed by the Administrator.

Section 19.16. Counterparts. The Plan may be executed in any number of
counterparts, each of which shall be deemed to be an original. All the
counterparts shall constitute but one (1) and the same instrument and shall be
sufficiently evidenced by any one (1) counterpart.

ARTICLE XX.

SPECIAL PROVISIONS RELATING TO

AMOUNTS TRANSFERRED FROM THE

INTERPORE INTERNATIONAL, INC. RETIREMENT SAVINGS PLAN

Section 20.01. General Provisions. Notwithstanding any provision contained
herein to the contrary, any amounts held under the Plan which were transferred
from the Interpore International, Inc. Retirement Savings Plan on behalf of
Participants who were transferred from the Interpore International, Inc.
Retirement Savings Plan to the Plan as a result of a merger of the

 

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Plans on or about January 1, 2006 (hereinafter “Interpore Transferred
Employees”), shall be administered to preserve any protected benefits, rights
and features associated with such amounts consistent with the provisions of Code
Sections 401(a)(12) and 414(l).

Section 20.02. Vesting.

(a) Notwithstanding any provision contained herein to the contrary, any amounts
held under the Plan which are transferred from the Interpore International, Inc.
Retirement Savings Plan on behalf of Interpore Transferred Employees shall be
Vested consistent with the provisions of Code Section 411(a)(10) and as provided
in Section 10.01.

(b) Accordingly, any Interpore Transferred Employee shall be Vested in his or
her Account balance under the Plan, attributable to both (i) the amounts
transferred to the Plan from the Interpore International, Inc. Retirement
Savings Plan, and (ii) the amounts accrued under the Plan on and after the date
such Interpore Transferred Employee became a Participant in the Plan, in the
following percentages based on the years of vesting service completed by the
Interpore Transferred Employee as of January 1, 2006, as determined under the
elapsed time method set forth in the Interpore International, Inc. Retirement
Savings Plan:

 

Years of

Vesting Service

    

Vested

Percentage

Less than 1          0% 1        33% 2        67% 3 or more      100%

(c) Notwithstanding the foregoing, any Interpore Transferred Employee who has
not completed at least three (3) years of Vesting Service under the Interpore
International, Inc. Retirement Savings Plan as of January 1, 2006, shall
continue to be Vested at the percentage determined January 1, 2006 until the
Interpore Transferred Employee has completed five (5)

 

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Years of Service under the Plan. Upon completion of five (5) Years of Service,
any Interpore Transferred Employee subject to this Subsection (c) shall become
subject to the vesting schedule under Subsection 10.01(c), and such Interpore
Transferred Employee’s Vested percentage attributable to both (i) the amounts
transferred to the Plan from the Interpore International, Inc. Retirement
Savings Plan, and (ii) the amounts accrued under the Plan on and after the date
such Interpore Transferred Employee became a Participant in the Plan shall be
subject to the vesting schedule set forth under Subsection 10.01(c) of the Plan.

Section 20.03. Distribution of Benefits. The benefits payable under Article VII
of the Plan on behalf of Interpore Transferred Employees shall be comprised of
the Vested account balance of such Interpore Transferred Employees attributable
to both the amounts transferred to the Plan from the Interpore International,
Inc. Retirement Savings Plan and the amounts accrued under the Plan on and after
the date such Interpore Transferred Employee became a Participant in the Plan.
Consistent with the provisions of Treasury Regulation Section 1.411(d)-4
(Q&A-2(e)), effective with respect to distributions to Interpore Transferred
Employees that first commence on and after the effective date of this
Article XX, the benefits payable under Article VII of the Plan on behalf of
Interpore Transferred Employees shall be payable at the time and in the forms of
distribution permitted under Article VII of the Plan, and all optional forms of
benefit previously available under the Interpore International, Inc. Retirement
Savings Plan but not available under Article VII of the Plan, including but not
limited to annuities, shall cease to be available under the Plan.

Section 20.04. Transferred Participant Loans. With regard to any participant
loans outstanding and attributable to amounts transferred to this Plan on behalf
of a Interpore Transferred Employee pursuant to the provisions of this Article,
such loans shall continue to be

 

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administered pursuant to the requirements of Code Section 72(p) and the
provisions of Article VIII, to the extent not inconsistent herewith. Provided,
however, that the availability of new loans after the date such Interpore
Transferred Employee became a Participant in this Plan shall be governed
exclusively by Article VIII of this Plan.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.

SIGNATURE PAGE FOLLOWS.]

 

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On behalf of the Benefits Committee this restatement of the Plan is executed
this              day of                                         
                , 2007.

 

BENEFITS COMMITTEE  

 

 

 

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AMENDMENT NUMBER ONE

TO THE

BIOMET 401(k) SAVINGS AND RETIREMENT PLAN

THIS AMENDMENT NUMBER ONE is hereby executed on behalf of Biomet, Inc.
(“Company”).

The Biomet 401(k) Savings and Retirement Plan (f/k/a the Biomet, Inc. 401(k)
Profit Sharing Plan) (“Plan”) was originally established effective June 1, 1985,
was most recently merged with the Biomet, Inc. Employee Stock Bonus Plan and
amended, restated and renamed effective as of April 1, 2007. The Administrator,
having reserved the right to amend the Plan pursuant to Section 13.01 of the
Plan, now desires to amend the Plan to clarify certain plan provisions following
the merger with the Stock Bonus Plan.

THEREFORE, the Plan is hereby amended, effective April 1, 2007, as follows:

1. The following sentence shall be added to the end of Subsection 2.01(hhh) of
the Plan, regarding the computation of years of service, to be and read as
follows:

“Notwithstanding the preceding provisions, for purposes of determining whether a
Participant has three (3) or more Years of Service determined under Code
Section 401(a)(35) and the participant-directed investment provisions of
Sections 12.02 and 12.03, a Year of Service shall be credited to the Participant
as of the first day of the month (or such other date designated by the
Administrator) following the date on which such Participant first completes one
thousand (1,000) Hours of Service during any Vesting Computation Period.”

2. Paragraph 3.01(a)(1) of the Plan, regarding participation, shall be amended
to be and read as follows:

“(1) he (A) has completed three (3) full consecutive months of continuous,
active employment (i.e., he must be actively employed with the Employer on each
day of the three full consecutive months) with the Employer for an Employer and
is scheduled to work at least one thousand (1,000) hours per year, or (B) has
completed one thousand (1,000) Hours of Service in any Plan Year or in

 

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any of the overlapping Vesting Computation Periods required by the changes in
the Plan Year under Subsection 2.01(rr); and”

3. Subsection 8.02(b) of the Plan, regarding plan loans, shall be amended to be
and read as follows:

“(b) A Party in Interest may apply for a loan by completing the Applicable
Forms; provided, however a Party in Interest may only request one (1) loan in
each twelve (12) month period. Notwithstanding the preceding provisions, the
Administrator may, on a nondiscriminatory basis, permit more than one (1) loan
during a twelve (12) month period if such loan would otherwise prevent the Party
in Interest from receiving a hardship distribution during such period.”

4. A new Section 12.08 of the Plan, regarding tender offers, shall be added to
the Plan with the remaining sections to be re-numbered accordingly, to be and
read as follows:

“Section 12.08. Tender Offers.

(a) If any person, either alone or in conjunction with others, makes a tender
offer, or exchange offer, or otherwise offers to purchase or solicits an offer
to sell to such person 1% or more of the outstanding shares of Employer Stock
(referred to hereinafter collectively as a “Tender Offer”), the following shall
apply:

(1) Each Participant (or Beneficiary in the event a Participant is deceased) may
direct the Trustee to sell, offer to sell, exchange or otherwise dispose of the
Employer Stock allocated to such Participant’s Account (or Beneficiary’s Account
in the event a Participant is deceased) in accordance with the provisions,
conditions and terms of the Tender Offer and the provisions of this Section.
Such directions shall be in the form and shall be filed in the manner and at
such time as the Trustee or the Administrator may prescribe.

(2) The Trustee shall sell, offer to sell, exchange or otherwise dispose of the
Employer Stock allocated to the Participant’s Accounts (or Beneficiary’s Account
in the event a Participant is deceased) in accordance with the direction of such
Participant (or Beneficiary in the event a Participant is deceased) (the
“Directed Shares”). The proceeds of a disposition directed by a Participant (or
Beneficiary) from his Account shall be allocated to such Participant’s (or
Beneficiary’s) Account and be invested as described in Subsection (b) below.

(3) If any Participant (or Beneficiary) fails to validly direct the Trustee to
sell, offer to sell, exchange or otherwise dispose of the Employer

 

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Stock allocated to his Account, he shall be deemed to have directed the Trustee
that such shares remain invested in Employer Stock subject to all provisions of
the Plan.

(4) In the case of shares of Stock that are held unallocated in the Employer
Stock Suspense Account, the Trustee shall tender, sell, offer to sell, exchange
or otherwise dispose such of shares in the same proportion in which
Participant’s tendered the Directed Shares in relation to all shares of Employer
Stock held under the Plan. The proceeds of a disposition of Stock in the
Employer Stock Suspense Account shall be held by the Trustee subject to the
provisions of the Trust Agreement, the Plan and any applicable loan agreement.

(b) Except as otherwise determined by the Administrator, the proceeds of a
disposition of Employer Stock in a Participant’s (or Beneficiary’s) Account
pursuant to this Section 12.08 shall be reinvested in the Fund or Funds elected
by the Participant (or Beneficiary) for the investment of future contributions
to the Plan (excluding Employer Stock) in effect as of the date on which such
proceeds are received by the Trust, or, if no such investment election is in
effect as of the date on which such proceeds are received by the Trust, in the
default investment alternative designated by the Administrator.”

5. In all other respects the Plan shall be and remain unchanged.

This Amendment Number One is executed this              day of             ,
2007.

 

BENEFITS COMMITTEE   Bradley J. Tandy   Darlene Whaley   Daniel P. Florin