Exhibit 10.3 

THE HANOVER INSURANCE GROUP

RETIREMENT SAVINGS PLAN

Amended and restated generally effective January 1, 2010

 

 

 

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TABLE OF CONTENTS

THE HANOVER INSURANCE GROUP

RETIREMENT SAVINGS PLAN

 

 

 

 

 

 

 

ARTICLE I

NAME, PURPOSE AND EFFECTIVE DATE OF PLAN AND RESTATED PLAN

1 

 

 

 

ARTICLE II

DEFINITIONS

1 

 

 

 

ARTICLE III

ELIGIBILITY AND PARTICIPATION

12 

 

 

 

ARTICLE IV

EMPLOYER CONTRIBUTIONS AND FORFEITURES

13 

 

 

 

ARTICLE V

EMPLOYEE CONTRIBUTIONS AND ROLLOVER CONTRIBUTIONS

16 

 

 

 

ARTICLE VI

PROVISIONS APPLICABLE TO TOP HEAVY PLANS

19 

 

 

 

ARTICLE VII

LIMITATIONS ON ALLOCATIONS

21 

 

 

 

ARTICLE VIII

PARTICIPANT ACCOUNTS AND VALUATION OF ASSETS

24 

 

 

 

ARTICLE IX

401(k) ALLOCATION LIMITATIONS

24 

 

 

 

ARTICLE X

401(m) ALLOCATION LIMITATIONS

28 

 

 

 

ARTICLE XI

IN-SERVICE WITHDRAWALS

31 

 

 

 

ARTICLE XII

PLAN LOANS

32 

 

 

 

ARTICLE XIII

RETIREMENT, TERMINATION AND DEATH BENEFITS

33 

 

 

 

ARTICLE XIV

PLAN FIDUCIARY RESPONSIBILITIES

41 

 

 

 

ARTICLE XV

BENEFITS COMMITTEE

43 

 

 

 

ARTICLE XVI

INVESTMENT OF THE TRUST FUND

44 

 

 

 

ARTICLE XVII

CLAIMS PROCEDURE

46 

 

 

 

ARTICLE XVIII

AMENDMENT AND TERMINATION

47 

 

 

 

ARTICLE XIX

MISCELLANEOUS

48 

 

 

 

 

 

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THE HANOVER INSURANCE GROUP

RETIREMENT SAVINGS PLAN

ARTICLE I

NAME, PURPOSE AND EFFECTIVE DATE OF PLAN AND RESTATED PLAN

1.01         Name of Plan. The name of the Plan is The Hanover Insurance Group
Retirement Savings Plan. Prior to January 1, 2005, the Plan was known as “The
Allmerica Financial Employees’ 401(k) Matched Savings Plan”. Effective
January 1, 2005, the Plan became known as “The Allmerica Financial Retirement
Savings Plan”. Effective December 1, 2005, the Plan became known as “The Hanover
Insurance Group Retirement Savings Plan”.

1.02         Purpose. This Plan has been established for the exclusive benefit
of the Plan Participants and their Beneficiaries and as far as possible shall be
administered in a manner consistent with this intent and consistent with the
requirements of Section 401 of the Code.

Subject to Section 15.04 and 18.05, under no circumstances shall any
contributions made to the Plan be used for, or be diverted to, purposes other
than for the exclusive benefit of Plan Participants or their Beneficiaries.

1.03         Plan and Plan Restatement Effective Date. The effective date of
this Plan was November 22, 1961. The effective date of this amended and restated
Plan is January 1, 2010 (except for those provisions of the Plan which have an
alternative effective date). Except to the extent otherwise specifically
provided herein, the provisions of the amended and restated Plan as set forth
herein shall apply to a Participant who is in the employ of the Employer on or
after January 1, 2010. The rights and benefits of any Participant whose
employment with the Employer terminated prior to January 1, 2010, shall be
determined in accordance with the provisions of the Plan as in effect from time
to time prior to January 1, 2010, provided, however, that if the Account balance
of any such Participant has not been completely distributed before January 1,
2010, then such Account balance shall be invested, accounted for and distributed
in accordance with the provisions of the Plan as set forth in this document
except as otherwise required by applicable law or as otherwise specifically
provided herein.

ARTICLE II

DEFINITIONS

The terms defined in this Article shall have the meanings stated herein unless
the context clearly indicates otherwise.

2.01         “Accrued Benefit” shall mean the sum of the balances in a
Participant’s 401(k) Account, Match Contribution Account, Non-Elective Employer
Contribution Account, Regular Account, Rollover Account, Tax Deductible
Contribution Account and Voluntary Contribution Account.

 

2.02         “Account” shall mean an account established and maintained pursuant
to Section 8.01 for each Participant, when appropriate, to account for the
Participant’s Accrued Benefit.

2.03         (a)           “Affiliate” shall mean any corporation affiliated
with the Employer through the action of such corporation’s board

of directors and the Employer’s Board of Directors.

(b)           “Affiliate” shall also mean any corporation which is a member of a
controlled group of corporations (as defined in Code Section 414(b)) which
includes the Employer; any trade or business (whether or not incorporated) which
is under common control (as defined in Code Section 414(c)) with the Employer;
any organization (whether or not incorporated) which is a member of an
affiliated service group (as defined in Code Section 414(m)) which includes the
Employer; and any other entity required to be aggregated with the Employer
pursuant to Regulations under Code Section 414(o).

2.04         “Affirmative Election” shall mean an election by an Eligible
Participant to (a) have Salary Reduction Contributions made at the percentage of
Compensation specified in his or her Salary Reduction Agreement, or (b) not have
Salary Reduction Contributions made on his or her behalf.

2.05         “Age” shall mean the age of a person at his or her last birthday.

2.06         “Annuity Starting Date” shall mean the first day of the first
period for which the Plan pays an amount as an annuity. In the case of a payment
not in an annuity form, Annuity Starting Date shall mean the first day of the
first period for which the benefit form is paid.

2.07         “Automatic Contributions” shall mean the Salary Reduction
Contributions that result from the operation of this Section 5.05(c) of the
Plan.

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2.08        “Automatic Contribution Arrangement” shall mean the arrangement set
forth in Section 5.05 of the Plan pursuant to which, in the absence of an
Affirmative Election, an Employee, who is eligible to participate in the Plan is
treated as having elected to direct the Employer to reduce his or her
Compensation in order that the Employer may make Salary Reduction Contributions
to the Plan on behalf of the Participant equal to a uniform percentage of
Compensation.

2.09         “Beneficiary” shall mean the person, trust, organization or estate
designated to receive Plan benefits payable on or after the death of a
Participant.

2.10         “Catch-up Contributions” shall mean Salary Reduction Contributions
made to the Plan that are in excess of an otherwise applicable Plan limit and
that are made by Participants who are Age 50 or over by the end of their taxable
years. An “otherwise applicable Plan limit” is a limit in the Plan that applies
to Salary Reduction Contributions without regard to Catch-up Contributions, such
as the limits on Annual Additions, the dollar limitation on Salary Reduction
Contributions under Code Section 402(g) (not counting Catch-up Contributions)
and the limit imposed by the Actual Deferral Percentage (ADP) test under Code
Section 401(k)(3). Catch-up Contributions for a Participant for a taxable year
may not exceed the dollar limit on Catch-up Contributions under Code
Section 414(v)(2)(B)(i) for the taxable year. The dollar limit on Catch-up
Contributions under Code Section 414(v)(2)(B)(i) is $1,000 for taxable years
beginning in 2002, increasing by $1,000 for each year thereafter up to $5,000
for taxable years beginning in 2006 and later years. After 2006, the $5,000
limit will be adjusted by the Secretary of the Treasury for cost-of-living
increases under Code Section 414(v)(2)(C).

Catch-up Contributions are not subject to the limits on Annual Additions, are
not counted in the ADP test and are not counted in determining the minimum
top-heavy allocation under Code Section 416 (but Catch-up Contributions made in
prior years are counted in determining whether the Plan is top-heavy).

2.11         “Compensation” shall mean:

(a)            For purposes of Articles IX and X, for purposes of determining a
Participant’s Salary Reduction Contributions pursuant to Section 3.01(b), 5.04,
and 5.05 and for purposes of determining an Eligible Employee’s Match
Contribution under Section 4.02 and Non-Elective Employer Contribution pursuant
to Section 4.03, Compensation shall mean the total wages or salary, overtime,
bonuses, and any other taxable remuneration paid to an Employee by the Employer
during the Plan Year, while the Employee is a Participant, as reported on the
Participant’s W-2 for the Plan Year. Provided,  however, that Compensation for
this purpose shall be determined without reduction for (i) any Salary Reduction
Contributions contributed to the Plan on the Participant’s behalf for the Plan
Year and (ii) any other amount which is contributed or deferred by the Employer
at the election of a Participant which is not includible in the gross income of
the Participant by reason of Code Section 125, 132(f)(4), 402(e)(3), 402(h), or
403(b).

Notwithstanding the above, for purposes of determining a Participant’s Salary
Reduction Contributions pursuant to Section 3.01(b), 5.04, and 5.05 and for
purposes of determining an Eligible Employee’s Match Contribution under
Section 4.02 and Non-Elective Employer Contribution pursuant to Section 4.03,
Compensation shall not include:

(i)

incentive compensation paid to Participants pursuant to the Employer’s Executive
Long Term Performance Unit Plan or pursuant to any similar or successor
executive incentive compensation plan;

 

(ii)

Employer contributions to a deferred compensation plan or arrangement (other
than (i) Salary Reduction Contributions contributed to the Plan on the
Participant’s behalf for the Plan Year; and (ii) any other amount which is
contributed or deferred by the Employer at the election of a Participant which
is not includible in the gross income of the Participant by reason of Code
Section 125, 132(f)(4), 402(e)(3), 402(h), or 403(b)) either for the year of
deferral or for the year included in the Participant’s gross income;

(iii)          any income which is received by or on behalf of a Participant in
connection with the grant, receipt, settlement, exercise, lapse of risk of
forfeiture or restriction on transferability, or disposition of any stock
option, stock award, stock grant, stock appreciation right or similar right or
award granted under any plan, now or hereafter in effect, of the Employer or any
successor to the Employer, the Employer’s parent, any such successor’s parent,
any subsidiaries or affiliates of the Employer, or any stock or securities
underlying any such option, award, grant or right;

(iv)          severance payments paid in a lump sum, provided that for Plan
Years beginning on and after January 1, 2008 such excluded severance payments
shall not include any payment of regular compensation for services during the
Participant’s regular working hours, or compensation for services outside the
Participant’s regular working hours (such as overtime or shift differential),
commissions, bonuses, or other similar payments, if the payment would have been
paid to the Participant prior to a severance from employment, if the Participant
had continued in employment with the Employer and if the payment is made by the
later of 2 1/2 months after the Participant’s severance from employment or by
the end of the Plan Year in which the Participant’s severance from employment
occurs;

(v)           Code Section 79 imputed income; long term disability and workers’
compensation benefit payments;

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(vi)          taxable moving expense allowances or taxable tuition or other
educational reimbursements;

(vii)for Plan Years commencing after December 31, 1998, compensation paid in the
form of commissions;

(viii)non-cash taxable benefits provided to executives, including the taxable
value of Employer-paid club memberships, chauffeur services and
Employer-provided automobiles; and

(ix)other taxable amounts received other than cash compensation for services
rendered, as determined by the Plan Administrator.

 

(b)           For purposes of Section 4.04 (Minimum Employer Contributions for
Top Heavy Plans) and for purposes of Article VII (Limitations on Allocations)
the term “Compensation” means a Participant’s wages, salaries, fees for
professional services and other amounts received (without regard to whether or
not an amount is paid in cash) for personal services actually rendered in the
course of employment with the Employer maintaining the Plan to the extent that
the amounts are includible in gross income (including, but not limited to,
commissions paid salesmen, compensation for services on the basis of a
percentage of profits, commissions on insurance premiums, tips, bonuses, fringe
benefits, and reimbursements or other expense allowances under a nonaccountable
plan (as described in Section 1.62-2(c) of the Regulations)), and excluding the
following:

(i)            Employer contributions to a plan of deferred compensation which
are not includible in the Employee’s gross income for the taxable year in which
contributed, or Employer contributions under a simplified employee pension plan
to the extent such contributions are deductible by the Employee, or any
distributions from a plan of deferred compensation;

(ii)           Amounts realized from the exercise of a non-qualified stock
option, or when restricted stock (or property) held by an Employee becomes
freely transferable or is no longer subject to a substantial risk of forfeiture;

(iii)          Amounts realized for the sale, exchange or other disposition of
stock acquired under a qualified stock option; and

(iv)          Other amounts which received special tax benefits.

Notwithstanding the foregoing, Compensation for purposes of the Plan shall also
include Employee elective deferrals under Code Section 402(g)(3) and amounts
contributed or deferred by the Employer at the election of the Employee and not
includible in the gross income of the Employee, by reason of Code Sections 125,
132(f)(4), 402(e)(3), 402(h), and 403(b).

Additionally, amounts under Code Section 125 include any amounts not available
to a Participant in cash in lieu of group health coverage because the
Participant is unable to certify that he has other health coverage (deemed Code
Section 125 compensation). Such an amount will be treated as an amount under
Code Section 125 only if the Employer does not request or collect information
regarding the Participant’s other health coverage as part of the enrollment
process for the health plan.

For purposes of applying the limitations of Article VII, Compensation for a
Limitation Year is the Compensation actually paid or includible in gross income
during such Year.

 

(c)           Notwithstanding (a) and (b) above, for any Plan Year beginning
after December 31, 2001, the annual Compensation of each Participant taken into
account for determining all benefits provided under the Plan for any Plan Year
shall not exceed $200,000, as adjusted for increases in the cost of living in
accordance with Section 401(a)(17)(B) of the Code.

Notwithstanding (a) and (b) above, for the Plan Years beginning on or after
January 1, 1994 and before January 1, 2002, the annual Compensation of each
Participant taken into account for determining all benefits provided under the
Plan for any Plan Year shall not exceed $150,000. This limitation shall be
adjusted for inflation by the Secretary under Code Section 401(a)(17)(B) in
multiples of $10,000 by applying an inflation adjustment factor and rounding the
result down to the next multiple of $10,000 (increases of less than $10,000 are
disregarded).

The cost-of-living adjustment in effect for a calendar year applies to any
period, not exceeding 12 months, over which Compensation is determined beginning
in such calendar year.

If Compensation is being determined for a Plan Year that contains fewer than 12
calendar months, then the annual Compensation limit is an amount equal to the
annual Compensation limit for the calendar year in which the Compensation period
begins multiplied by the ratio obtained by dividing the number of full months in
the period by 12.

For purposes of applying the limitations of Article VII with respect to
Limitation Years beginning on and after July 1, 2007, the following provisions
shall be applicable.

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(i)Compensation paid after severance from employment. Compensation actually paid
or includible in gross income during a Limitation Year shall be adjusted, as set
forth herein, for the following types of compensation paid after a Participant’s
severance from employment with the Employer (or any Affiliate). However, amounts
described in Paragraphs A. and B. below shall only be included in Compensation
for such Limitation Year to the extent such amounts are paid by the later of
2 1/2 months after severance from employment or by the end of the Limitation
Year that includes the date of such severance from employment. Any other payment
of compensation paid after severance of employment that is not described in the
following types of compensation shall not be considered Compensation for such
Limitation Year, even if payment is made within the time period specified above.

A.           Regular Pay. Compensation shall include regular pay after severance
of employment if: (1) The payment is regular compensation for services during
the Participant’s regular working hours, or compensation for services outside
the Participant’s regular working hours (such as overtime or shift
differential), commissions, bonuses, or other similar payments; and (2) The
payment would have been paid to the Participant prior to a severance from
employment if the Participant had continued in employment with the Employer.

B.            Leave Cashouts And Deferred Compensation. Leave cashouts shall be
included in Compensation if those amounts would have been included in the
definition of Compensation if they were paid prior to the Participant’s
severance from employment, and the amounts are payment for unused accrued bona
fide sick, vacation, or other leave, but only if the Participant would have been
able to use the leave if employment had continued. In addition, deferred
compensation shall be included in Compensation if the compensation would have
been included in the definition of Compensation if it had been paid prior to the
Participant’s severance from employment, and the compensation is received
pursuant to a nonqualified unfunded deferred compensation plan, but only if the
payment would have been paid at the same time if the Participant had continued
in employment with the Employer and only to the extent that the payment is
includible in the Participant’s gross income.

C.           Salary Continuation Payments for Military Service Participants.
Compensation shall not include payments to an individual who does not currently
perform services for the Employer by reason of qualified military service (as
that term is used in Code Section 414(u)(l)) to the extent those payments do not
exceed the amounts the individual would have received if the individual had
continued to perform services for the Employer rather than entering qualified
military service.

D.            Salary Continuation Payments for Disabled Participants.
Compensation does not include compensation paid to a Participant who is
permanently and totally disabled (as defined in Code Section 22(e)(3)).

(ii) Compensation for a Limitation Year but not paid during the Limitation Year.
Compensation for a Limitation Year shall not include amounts earned but not paid
during the Limitation Year solely because of the timing of pay periods and pay
dates.

(iii) Inclusion of Certain Nonqualified Deferred Compensation Amounts.
Compensation for a Limitation Year shall include amounts that are includible in
the gross income of a Participant under the rules of Code Section 409A or
because the amounts are constructively received by the Participant.

 

(d)          For Plan Years beginning on and after January 1, 2008,
notwithstanding paragraphs (a), (b) and (c) above,

(i)USERRA. For purposes of Employee and Employer make-up contributions,
Compensation during the period of military service shall be deemed to be the
Compensation the Employee would have received during such period if the Employee
were not in qualified military service, based on the rate of pay the Employee
would have received from the Employer but for the absence due to military leave.
If the Compensation the Employee would have received during the leave is not
reasonably certain, Compensation will be equal to the Employee’s average
Compensation from the Employer during the twelve (12) month period immediately
preceding the military leave or, if shorter, the Employee’s actual period of
employment with the Employer.

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(ii)Differential Wage Payments. For years beginning after December 31, 2008,
(i) an individual receiving a differential wage payment, as defined by Code
Section 3401(h)(2), shall be treated as an Employee of the Employer making the
payment, (ii) the differential wage payment shall be treated as Compensation,
and (iii) the Plan shall not be treated as failing to meet the requirements of
any provision described in Code Section 414(u)(1)(C) by reason of any
contribution or benefit which is based on the differential wage payment.
Subparagraph (iii) of the foregoing sentence shall apply only if all Employees
of the Employer performing service in the uniformed services described in Code
Section 3401(h)(2)(A) are entitled to receive differential wage payments (as
defined in Code Section 3401(h)(2)) on reasonably equivalent terms and, if
eligible to participate in a retirement plan maintained by the Employer, to make
contributions based on the payments on reasonably equivalent terms (taking into
account Code Sections 410(b)(3), (4), and (5)).

2.12         “Eligible Employee” shall mean an Employee who has satisfied the
requirements to participate in this Plan as set forth in Section 3.01.

2.13         “Eligible Participant” shall mean an Eligible Employee subject to
the Automatic Contribution Arrangement as provided for in Section 5.05(b) of the
Plan.

2.14         “Eligibility Computation Period” shall mean, for Plan Years
commencing prior to January 1, 2005, a period of twelve consecutive months
commencing on an Employee’s Employment Commencement Date or, if an Employee does
not complete at least 1,000 Hours of Service during such initial period, such
Employee’s Eligibility Computation Period shall mean the Plan Year commencing
with the first Plan Year following the Employee’s Employment Commencement Date
and, if necessary, each succeeding Plan Year.

2.15         “Employee” shall mean any individual who is employed by the
Employer.

 

2.16         “Employer” shall mean The Hanover Insurance Company; provided that,
prior to January 1, 2008 “Employer” shall mean First Allmerica Financial Life
Insurance Company.

2.17         “Employment Commencement Date” shall mean the date on which an
Employee first performs an Hour of Service or, in the case of an Employee who
has a One Year Break in Service, the date on which he or she first performs an
Hour of Service after such Break.

2.18         “Fiduciary” shall mean any person who (i) exercises any
discretionary authority or discretionary control respecting management of the
Plan or exercises any authority or control respecting management or disposition
of its assets; (ii) renders investment advice for a fee or other compensation,
direct or indirect, with respect to any monies or other property of the Plan or
has any authority or responsibility to do so; or (iii) has any discretionary
authority or discretionary responsibility in the administration of the Plan,
including, but not limited to, the Trustee and the Plan Administrator.

2.19         “First Allmerica” shall mean First Allmerica Financial Life
Insurance Company.

2.20         “Five Percent Owner” shall mean, in the case of a corporation, any
person who owns (or is considered as owning within the meaning of Code
Section 416(i)) more than five percent of the outstanding stock of the Employer
or stock possessing more than five percent of the total combined voting power of
all stock of the Employer. In the case of an Employer that is not a corporation,
“Five Percent Owner” shall mean any person who owns or under applicable
regulations is considered as owning more than five percent of the capital or
profits interest in the Employer. In determining percentage ownership hereunder,
employers that would otherwise be aggregated under Code Sections 414(b), (c),
and (m) shall be treated as separate employers.

2.21         “Former Participant” shall mean a person on whose behalf an Account
is maintained, who was an Eligible Employee but who is not entitled to accrue a
benefit under this Plan because he or she has ceased to be eligible to
participate in the Plan for any reason.

2.22         “401(k) Account” shall mean the account established and maintained
for each Participant who has directed the Employer to make Salary Reduction
Contributions to the Trust on his or her behalf or for whom the Employer has
made 401(k) Employer Contributions to the Trust on his or her behalf, and all
earnings and appreciation thereon, less any withdrawals therefrom and any losses
and expenses charged thereto.

2.23         “401(k) Employer Contribution” shall mean a 401(k) contribution
made by the Employer to the Trust for Plan Years prior to 1995 pursuant to
Section 4.01 of the Plan as in effect prior to 1995.

2.24         “Highly Compensated Employee” shall mean any Employee who:

(a)          was a Five Percent Owner at any time during the Plan Year or the
preceding Plan Year; or

 

(b)          for the preceding Plan Year:

(i)had Compensation from the Employer in excess of $80,000 (as adjusted pursuant
to Code Section 414(q)(1)); and

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(ii)for such preceding Year was in the top-paid group of Employees for such
preceding Year.

For purposes of this Section the “top-paid group” for a Plan Year is the top 20%
of Employees ranked on the basis of Compensation paid during such Year.

In addition to the foregoing, the term “Highly Compensated Employee” shall also
mean any former Employee who separated from service prior to the Plan Year,
performs no service for the Employer during the Plan Year, and was an actively
employed Highly Compensated Employee in the separation year or any Plan Year
ending on or after the date the Employee attained Age 55.

For purposes of this Section Compensation means Compensation determined for
purposes of Article VII (Limitations on Allocations), but, for Plan Years
beginning before January 1, 1998, without regard to Code Sections 125,
402(e)(3), and 402(h)(1)(B).

The determination of who is a Highly Compensated Employee, including the
determinations of the numbers and identity of Employees in the top-paid group
and the Compensation that is considered will be made in accordance with
Section 414(q) of the Code and regulations thereunder.

2.25         “Hour of Service” shall mean:

(a)           Each hour for which an Employee is paid, or entitled to payment,
for the performance of duties for the Employer. For purposes of the Plan an
Employee who is exempt from the requirements of the Fair Labor Standards Act of
1938, as amended, shall be credited with 45 Hours of Service for each complete
or partial week he or she would be credited with at least one Hour of Service
under this Section 2.25.

(b)          Each hour for which an Employee is paid, or entitled to payment, by
the Employer on account of a period of time during which no duties are performed
(irrespective of whether the employment relationship has terminated) due to
vacation, holiday, illness, incapacity (including disability), layoff, jury
duty, military duty or leave of absence. Notwithstanding the preceding sentence:

(i)            No more than 1000 hours shall be credited to an Employee under
this Subsection (b) on account of any single continuous period during which the
Employee performs no duties (whether or not such period occurs in a single
computation period);

 

(ii)            No hours shall be credited under this Subsection (b) for any
payments made or due under a plan maintained solely for the purpose of complying
with any applicable worker’s compensation, unemployment compensation or
disability insurance laws; and

(iii)          No hours shall be credited under this Subsection (b) for a
payment, which solely reimburses an Employee for medical or medically related
expenses incurred by the Employee.

For purposes of this Subsection (b) a payment shall be deemed to be made by or
due from an Employer regardless of whether such payment is made by or due from
the Employer directly, or indirectly, through, among others, a trust fund or
insurer, to which the Employer contributes or pays premiums.

(c)           Each hour for which back pay, irrespective of mitigation of
damages, is either awarded or agreed to by the Employer. The same Hours of
Service shall not be both credited under Subsections (a) or (b), as the case may
be, and under this Subsection. No more than 501 Hours shall be credited under
this Subsection for a period of time during which an Employee did not or would
not have performed duties.

(d)           Special rules for determining Hours of Service under Subsection
(b) or (c) for reasons other than the performance of duties.  

In the case of a payment which is made or due which results in the crediting of
Hours of Service under Subsection (b) or in the case of an award or agreement
for back pay, to the extent that such an award or agreement is made with respect
to a period during which an Employee performs no duties, the number of Hours of
Service to be credited shall be determined as follows:

(i)In the case of a payment made or due which is calculated on the basis of
units of time (such as hours, days, weeks or months), the number of Hours of
Service to be credited for “exempt” Employees described in Subsection (a) shall
be determined as provided in such Subsection. For all other Employees, the Hours
of Service to be credited shall be those regularly scheduled hours in such unit
of time; provided,  however, that when a non-exempt Employee does not have
regularly scheduled hours, such Employee shall be credited with 8 Hours of
Service for each workday for which he or she is entitled to be credited with
Hours of Service under paragraph (b).

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(ii)Except as provided in Paragraph (d)(iii), in the case of a payment made or
due which is not calculated on the basis of units of time, the number of Hours
of Service to be credited shall be equal to the amount of the payment divided by
the Employee’s most recent hourly rate of compensation (as determined below)
before the period during which no duties are performed.

A.            The hourly rate of compensation of Employees paid on an hourly
basis shall be the most recent hourly rate of such Employees.

 

B.            In the case of Employees whose compensation is determined on the
basis of a fixed rate for specified periods of time (other than hours) such as
days, weeks or months, the hourly rate of compensation shall be the Employee’s
most recent rate of compensation for a specified period of time (other than an
hour), divided by the number of hours regularly scheduled for the performance of
duties during such period of time. The rule described in Subsection (d)(i) shall
also be applied under this paragraph to Employees without a regular work
schedule.

C.            In the case of Employees whose compensation is not determined on
the basis of a fixed rate for specified periods of time, the Employee’s hourly
rate of compensation shall be the lowest hourly rate of compensation paid to
Employees in the same job classification as that of the Employee or, if no
Employees in the same job classification have an hourly rate, the minimum wage
as established from time to time under Section 6(a)(1) of the Fair Labor
Standards Act of 1938, as amended.

(iii) Rule against double credit. An Employee shall not be credited on account
of a period during which no duties are performed with more hours than such
Employee would have been credited but for such absence.

(e)          Crediting of Hours of Service to computation periods.  

(i)            Hours of Service described in Subsection (a) shall be credited to
the Employee for the computation period or periods in which the duties are
performed.

(ii)           Hours of Service described in Subsection (b) shall be credited as
follows:

A.            Hours of Service credited to an Employee on account of a payment
which is calculated on the basis of units of time (such as hours, days, weeks or
months) shall be credited to the computation period or periods in which the
period during which no duties are performed occurs, beginning with the first
unit of time to which the payment relates

 

B.            Hours of Service credited to an Employee by reason of a payment
which is not calculated on the basis of units of time shall be credited to the
computation period in which the period during which no duties are performed
occurs, or if the period during which no duties are performed extends beyond one
computation period, such Hours of Service shall be allocated between not more
than the first two computation periods in accordance with reasonable rules
established by the Employer, which rules shall be consistently applied with
respect to all Employees within the same job classification, reasonably defined.

(iii)          Hours of Service described in Subsection (c) shall be credited to
the computation period or periods to which the award or agreement for back pay
pertains, rather than to the computation period in which the award, agreement or
payment is made.

(f)          For purposes of the Plan, Hours of Service shall also include Hours
of Service determined in accordance with the rules set forth in this
Section 2.25:

(i)            with the Employer in a position in which he or she was not
eligible to participate in this Plan; or

(ii)           as a Career Agent or General Agent of First Allmerica; or

(iii)          for periods prior to January 1, 1998, with Citizens, Hanover, or
as an employee of a General Agent of First Allmerica; or

(iv)          with Financial Profiles, Inc., or Advantage Insurance Network,
Affiliates of First Allmerica, including periods of service completed prior to
the date each became an Affiliate; or

(v)           for periods prior to January 1, 2008 with First Allmerica; or

(vi)          with an Affiliate.

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(g)           Rules for Non-Paid Leaves of Absence. For purposes of the Plan, a
Participant will also be credited with Hours of Service during any non-paid
leave of absence granted by the Employer. Except as provided in Subsection
(a) for exempt Employees, the number of Hours of Service to be credited under
this Subsection (g) shall be the number of regularly scheduled working hours in
each workday during the leave of absence; provided,  however, that no more than
the number of Hours in one regularly scheduled work year of the Employer will be
credited for each non-paid leave of absence. In the case of a non-exempt
Employee without a regular work schedule, the number of Hours to be credited
shall be based on a 40-hour workweek and an 8-hour workday. Hours of Service
described in this Subsection (g) shall be credited to the Employee for the
computation period or periods during which the leave of absence occurs.

 

Notwithstanding the foregoing, for Plan Years beginning after December 31, 1998,
all Employees (exempt and non-exempt) shall be credited with 8 Hours of Service
for each workday for which they are entitled to be credited with Hours of
Service for a non-paid leave of absence pursuant to this Subsection (g).

(h)           Rules for Maternity or Paternity Leaves of Absence. In addition to
the foregoing rules, solely for purposes of determining whether a One Year Break
in Service has occurred in a computation period, an individual who is absent
from work for maternity or paternity reasons shall receive credit for the Hours
of Service which would otherwise have been credited to such individual but for
such absence, or in any case in which such Hours cannot be determined, 8 Hours
of Service per day of such absence. Provided,  however, that:

(i)            Hours shall not be credited under both this Paragraph (h) and one
of the other Paragraphs of this Section 2.25;

(ii)           no more than 501 Hours shall be credited for each maternity or
paternity absence; and

(iii)          if a maternity or paternity leave extends beyond one Plan Year,
the Hours shall be credited to the Plan Year in which the absence begins to the
extent necessary to prevent a One Year Break in service, otherwise such Hours
shall be credited to the following Plan Year.

For purposes of this paragraph, an absence from work for maternity or paternity
reasons means an absence (i) by reason of the pregnancy of the individual,
(ii) by reason of a birth of a child of the individual, (iii) by reason of the
placement of a child with the individual in connection with the adoption of such
child by such individual, or (iv) for purposes of caring for such child for a
period beginning immediately following such birth or placement.

(i)            Other Federal Law. Nothing in this Section 2.25 shall be
construed to alter, amend, modify, invalidate, impair or supersede any law of
the United States or any rule or regulation issued under any such law.

2.26         “Internal Revenue Code” or “Code” shall mean the Internal Revenue
Code of 1986, as amended from time to time. Reference to any section or
subsection to the Code, includes reference to any comparable or succeeding
provisions of any legislation which amends, supplements or replaces any such
section or subsection, and also includes reference to any regulation issued
pursuant to or with respect to such section or subsection.

 

2.27         “Key Employee”. In determining whether the Plan is top-heavy for
Plan Years beginning after December 31, 2001, “Key Employee” shall mean any
Employee or former Employee (including any deceased Employee) who at any time
during the Plan Year that includes the determination date is an officer of the
Employer having an annual Compensation greater than $130,000 (as adjusted under
Section 416(i)(l) of the Code for Plan Years beginning after December 31, 2002),
a Five Percent Owner, or a 1-percent owner of the Employer having an annual
Compensation of more than $150,000. In determining whether a Plan is top heavy
for Plan Years beginning before January 1, 2002, “Key Employee” shall mean any
Employee or former Employee (including any deceased Employee) who at any time
during the 5-year period ending on the determination date, is an officer of the
employer having an annual Compensation that exceeds 50 percent of the dollar
limitation under Code Section 415(b)(l)(A), an owner (or considered an owner
under Code Section 318) of one of the ten largest interests in the Employer if
such individual’s Compensation exceeds 100 percent of the dollar limitation
under Code Section 415(c)(l)(A), a Five Percent Owner or a 1-percent owner of
the Employer who has an annual Compensation of more than $150,000.

The determination of who is a Key Employee will be made in accordance with
Section 416(i)(1) of the Internal Revenue Code and the regulations thereunder.
For purposes of determining whether a Participant is a Key Employee, the
Participant’s Compensation means Compensation as defined for purposes of Article
VII, but for Plan Years beginning before January 1, 1998, without regard to Code
Sections 125, 402(e)(3), and 402(h)(1)(B).

2.28         “Limitation Year” shall mean a calendar year. The Limitation Year
may only be changed by a Plan amendment. If the Plan is terminated effective as
of a date other than the last day of the Plan’s Limitation Year, then the Plan
shall be treated as if the Plan had been amended to change its Limitation Year
and, in any such case, the Defined Contribution Dollar Limitation shall be
prorated as prescribed by Treasury Regulation Section 1.415(j)-1(d)(3).

2.29         “Match Contribution” shall mean the contribution made by the
Employer to the Trust pursuant to Section 4.02 of the Plan.

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2.30         “Match Contribution Account” shall mean the account established for
each Participant for whom the Employer has allocated Match Contributions to the
Trust and all earnings and appreciation thereon, less any withdrawals therefrom
and any losses and expenses charged thereto.

2.31         “Non-Elective Employer Contributions” shall mean Employer
contributions that are made by the Employer pursuant to Section 4.03 of the
Plan.

2.32         “Non-Elective Employer Contribution Account” shall mean the account
established for each Employee for whom the Employer has made a Non-Elective
Employer Contribution to the Trust and all earnings and appreciation thereon,
less any withdrawals therefrom and any losses and expenses charged thereto.

 

2.33         “Non-Highly Compensated Employee” shall mean any Employee who is
not a Highly Compensated Employee.

2.34         “Non-Key Employee” shall mean any Employee who is not a Key
Employee. 

2.35         “Normal Retirement Age” shall mean the date on which the
Participant attains Age 65.

2.36         “One Year Break in Service” shall mean any vesting computation
period during which an Employee does not complete more than 500 Hours of
Service. Provided,  however, for Plan Years commencing prior to January 1, 2005,
for purposes of Article III, “One Year Break in Service” shall mean an
Eligibility Computation Period during which an Employee does not complete more
than 500 Hours of Service.

2.37         “Participant” shall mean an Eligible Employee and, where the
context requires, a Former Participant.

2.38         “Permissible Withdrawal” shall mean a withdrawal by an Eligible
Participant who is enrolled in the Automatic Contribution Account prior to
January 1, 2011 pursuant to Section 5.05(e) of this Plan which meets the
following rules:

(a)           Election and Timing of Election. The withdrawal is made pursuant
to an election by an Eligible Participant and such election is made no later
than 90 days after the date of the first Automatic Contribution with respect to
the Eligible Participant under the Automatic Contribution Arrangement. The
effective date of any such election shall not be after the earlier of (i) the
pay date for the second pay period that begins after the date the election is
made; and (ii) the first pay date that occurs at least 30 days after the
election is made

(b)          Amount of Withdrawal. The amount of such withdrawal shall be equal
to the amount of the Automatic Contributions made through the effective date of
the Participant’s election (described in (a) above), adjusted for allocable
gains and losses to the date of such withdrawal.

2.39         “Plan Administrator” shall mean the Benefits Committee, which shall
have fiduciary responsibility for the interpretation and administration of the
Plan, as provided for in Article XIV. Members of the Benefits Committee shall be
appointed as provided for in Section 15.01 hereof.

2.40         “Plan Year” shall mean a calendar year.

2.41         “Qualified Automatic Contribution Arrangement (“QACA”)” shall mean
a qualified automatic contribution arrangement that meets the requirements of
Code Section 401(k)(13)(B). Effective for Plan Years beginning on or after
January 1, 2009, this Plan is intended to satisfy the requirements of Code
Section 401(k)(13)(B) including but not limited to, the automatic enrollment and
contribution provisions and the applicable notice requirements of Section 5.05
and the required Employer contributions of the Match Contribution made by the
Employer to the Trust pursuant to Section 4.02 of the Plan. Further, this Plan
is intended to be an eligible automatic contribution arrangement that satisfies
the provisions of Code Section 414(w)(3) with respect to Eligible Participants
who are enrolled in the Automatic Contribution Arrangement prior to January 1,
2011.

 

2.42         “Qualified Default Investment Alternative” shall mean an investment
alternative available to Participants and Beneficiaries that satisfies the
requirements of ERISA Section 404(c)(5) and the applicable Department of Labor
regulations thereunder and shall be subject to the following rules:

(a)          No Employer Securities. The Qualified Default Investment
Alternative does not hold or permit the acquisition of Employer securities,
except as permitted by Department of Labor Regulation
Section 2550.404c-5(e)(1)(ii);

(b)          Transfer Permitted. The Qualified Default Investment Alternative
permits a Participant or Beneficiary to transfer, in whole or in part, his or
her investment from the Qualified Default Investment Alternative to any other
investment alternative available under the Plan, pursuant to the rules of
Department of Labor Regulation Section 2550.404c-5(c)(5);

(c)          Management. The Qualified Default Investment Alternative is:

(1)Managed by: (A) an investment manager, within the meaning of ERISA
Section 3(38); (B) a Plan trustee that meets the requirements of ERISA
Section 3(38)(A), (B) and (C); or (C) the Sponsor Employer who is a named
fiduciary within the meaning of ERISA Section 402(a)(2);

(2)An investment company registered under the Investment Company Act of 1940; or

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(3)An investment product or fund described in Department of Labor Regulation
Section 2550.404c–5(e)(4)(iv) or (v); and

(d)          Types of Permitted Investments. The Qualified Default Investment
Alternative must be an investment product or fund described in Department of
Labor Regulation Section 2550.404c–5(e)(4).

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

(i)           relates to the provision of child support, alimony payments, or
marital property rights to a spouse, former spouse, child or other dependent of
a Participant;

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

 

(iii)         constitutes a “qualified domestic relations order” within the
meaning of Section 414(p) of the Code; and

(iv)         is entered on or after January 1, 1985.

Effective April 6, 2007, a domestic relations order that otherwise satisfies the
requirements for a qualified domestic relations order (QDRO) will not fail to be
a QDRO: (i) solely because the order is issued after, or revises, another
domestic relations order or QDRO; or (ii) solely because of the time at which
the order is issued, including issuance after the annuity starting date or after
the Participant’s death.

2.44         “Qualified Early Retirement Age” shall mean the later of:

(i)            Age 55; or

(ii)           the date on which the Participant begins participation.

2.45         “Qualified Joint and Survivor Annuity” shall mean an annuity for
the life of the Participant, with a survivor annuity for the life of his or her
spouse in an amount equal to 50% of the amount of the annuity payable during the
joint lives of the Participant and his or her spouse, and which is the amount of
benefit which can be purchased by the Participant’s Accrued Benefit.

2.46         “Regular Account” shall mean the account established and maintained
for each Participant for whom the Employer has allocated Regular Employer
Contributions to the Trust, and all earnings and appreciation thereon, less any
withdrawals therefrom and any losses and expenses charged thereto.

2.47         “Regular Employer Contribution” shall mean a Regular Contribution
made by the Employer to the Trust for years prior to 1995 pursuant to
Section 4.01 of the Plan as in effect prior to 1995.

2.48         “Rollover Account” shall mean the account established and
maintained for each Participant who has made a Rollover Contribution to the
Trust or whose accrued benefit from another qualified plan has been transferred
to this Trust in accordance with Section 5.03 of the Plan, and all earnings and
appreciation thereon, less any withdrawals therefrom and any losses and expenses
charged thereto.

2.49         “Rollover Contribution” shall mean a contribution made to the Trust
pursuant to Section 5.03 of the Plan.

2.50         “Salary Reduction Agreement” shall mean an agreement between the
Employer and an Eligible Employee as set forth in Sections 3.01(b) and 5.04
pursuant to which the Eligible Employee authorizes the Employer to withhold a
specified percentage of his or her Compensation (otherwise payable in cash) for
deposit to the Plan on behalf of such Employee.

 

2.51         “Salary Reduction Contribution” shall mean a pre-tax contribution
made by the Employer on behalf of an Eligible Employee pursuant to a Salary
Reduction Agreement and or an Automatic Contribution made by the Employer on
behalf of an Eligible Participant pursuant to the Automatic Contribution
Arrangement provisions of Section 5.05 of the Plan.

2.52         “Suspense Account” shall mean the account established by the
Trustee for maintaining contributions and forfeitures which have not yet been
allocated to Participants.

2.53         “Tax Deductible Contribution Account” shall mean the account
established and maintained for each Participant who has made a Tax Deductible
Voluntary Contribution to the Trust, and all earnings and appreciation thereon,
less any withdrawals therefrom and any losses and expenses charged thereto.

2.54         “Tax Deductible Voluntary Contribution” shall mean a contribution
made to the Trust for years before 1987 and pursuant to Section 5.02 of the Plan
as in effect prior to 1995.

2.55         “Top Heavy Plan” shall mean for any Plan Year beginning after
December 31, 1983 that any of the following conditions exists:

(i)         If the top heavy ratio (as defined in Article VI) for this Plan
exceeds 60 percent and this Plan is not part of any required aggregation group
or permissive aggregation group of plans.

(ii)        If this Plan is a part of a required aggregation group of plans (but
not part of a permissive aggregation group) and the top heavy ratio for the
group of plans exceeds 60 percent.

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(iii)       If this Plan is a part of a required aggregation group and part of a
permissive aggregation group of plans and the top heavy ratio for the permissive
aggregation group exceeds 60 percent.

See Article VI for requirements and additional definitions applicable to Top
Heavy Plans.

For Plan Years beginning on and after January 1, 2009, the Match Contribution
provided for in Section 4.02 may also be used to satisfy the minimum
contribution requirement for a Top-Heavy Plan, provided no other contribution is
made to the Plan for that Plan Year. Further, notwithstanding anything in the
Plan to the contrary, in any Plan Year beginning on and after January 1, 2009 in
which Employer contributions to the Plan consist solely of the Match
Contribution provided for in Section 4.02, then such Plan will not be treated as
a Top Heavy Plan and will be exempt from the top heavy requirements of Code
Section 416. Furthermore, if the Plan (but for the prior sentence) would be
treated as a Top Heavy Plan because the Plan is a member of an aggregation group
which is a top heavy group, then the contributions under the Plan may be taken
into account in determining whether any other plan in the aggregation group
meets the top heavy requirements of Code Section 416.

 

2.56         “Top Heavy Plan Year” shall mean that, for a particular Plan Year,
the Plan is a Top Heavy Plan.

2.57         “Totally and Permanently Disabled” shall mean the inability of a
Participant to engage in any substantial gainful activity by reason of any
medically determinable physical or mental impairment which can be expected to
result in death or which has lasted or can be expected to last for a continuous
period of not less than 12 months.

In determining the nature, extent and duration of any Participant’s disability,
the Plan Administrator may select a physician to examine the Participant. The
final determination of the nature, extent and duration of such disability shall
be made solely by the Plan Administrator upon the basis of such evidence as he
or she deems necessary and acting in accordance with uniform principles
consistently applied.

2.58         “Trustee” shall mean the bank or trust company or person or persons
who shall be constituted the original trustee or trustees for the Plan and Trust
created therefor, and also any and each successor trustee or trustees.

2.59         “Trust Fund” shall mean, include and consist of any payments made
to the Trustee by the Employer under the Plan and Trust Indenture, or the
investments thereof, together with all income and gains of every nature thereon
which shall be added to the principal thereof by the Trustee, less all losses
thereon and all payments therefrom.

2.60         “Trust Indenture” or “Trust” shall mean the Trust Indenture between
the Employer and the Trustee in the form annexed hereto, and any and all
amendments thereof or thereto.

2.61         “USERRA” shall mean the Uniformed Services Employment and
Reemployment Rights Act of 1994, as amended. Notwithstanding any provision of
the Plan to the contrary, contributions, benefits, Plan loan repayment,
suspensions and service credit with respect to qualified military service will
be provided in accordance with Code Section 414(u).

2.62         “Valuation Date” shall mean each day as of which the value of the
Trust Fund shall be calculated. The Plan Administrator reserves the right to
change the frequency of Valuation Dates; provided,  however, that in no event
shall Valuation Dates occur less frequently than once each calendar quarter.

2.63         “Voluntary After-Tax Contributions” shall mean a contribution made
to the Trust for years prior to 1995 pursuant to Section 5.01 of the Plan as in
effect prior to 1995.

2.64         “Voluntary Contribution Account” shall mean the account established
and maintained for each Participant who has made a Voluntary After-Tax
Contribution to the Trust, and all earnings and appreciation thereon, less any
withdrawals therefrom and any losses and expenses charged thereto.

 

2.65         “Year of Service” shall mean, for purposes of determining vesting
under Article XIII, the twelve consecutive month period, commencing on the first
day an Employee completes an Hour of Service and in which the Employee completes
at least 1,000 Hours of Service. Thereafter, for purposes of determining vesting
under Article XIII, the determination of a Year of Service will commence on the
anniversary of the first day the Employee completed an Hour of Service and the
twelve consecutive month period that follows, provided the Employee completes at
least 1,000 Hours of Service during such period.

Provided, however, for purposes of determining Plan entry under Article III for
Plan Years commencing prior to January 1, 2005, “Year of Service” means an
Eligibility Computation Period during which an Employee completes at least 1,000
Hours of Service.

In computing a “Year of Service” for purposes of the Plan, each twelve-month
period shall be considered as completed as of the close of business on the last
working day, which occurs within such period, provided that the Employee had
completed at least 1,000 Hours of Service during the period ending on such date.

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Notwithstanding any provision of this Plan to the contrary, contributions,
benefits and service credit with respect to qualified military service shall be
provided in accordance with Section 414(u) of the Internal Revenue Code.

ARTICLE III

ELIGIBILITY AND PARTICIPATION

 

3.01         (a)          In General. Employees who are employed by the Employer
on January 1, 2010 and who were eligible to participate in this Plan on
December 31, 2009 shall be Participants in this Plan on January 1, 2010.

For Plan Years beginning on and after January 1, 2005, an Employee shall be
eligible to participate in this Plan upon completion of one Hour of Service,
provided the Employee is then employed in an eligible class of Employees. For
Plan Years beginning prior to January 1, 2005, an Employee shall be eligible to
participate in this Plan on the first day of the calendar month coincident with
or following the completion of one Year of Service, provided the Employee is
then employed in an eligible class of Employees.

For Plan Years beginning on or after January 1, 2005, an Employee shall be
eligible to receive Match Contributions upon completion of one Hour of Service,
provided the Employee is then employed in an eligible class of Employees. For
Plan Years beginning prior to January 1, 2005, an Employee shall be eligible to
receive Match Contributions effective on the first day of the calendar month
coincident with or following completion of one Year of Service, provided the
Employee is then employed in an eligible class of Employees.

 

Notwithstanding the foregoing, the following Employees shall not be eligible to
become or remain active Participants hereunder:

(i)              All Employees holding a General Agent’s Contract with the
Employer or with an Affiliate;

(ii)             All Employees holding a Career Agent’s or Annuity Specialist’s
Contract with the Employer or with an Affiliate;

(iii)           Leased Employees within the meaning of Code Sections 414(n) and
(o);

(iv)          A contractor’s employee, i.e., a person working for a company
providing goods or services (including temporary employee services) to the
Employer or to an Affiliate whom the Employer does not regard to be its common
law employee, as evidenced by its failure to withhold taxes from his or her
compensation, even if the individual is actually the Employer’s common law
Employee; or

(v)           An independent contractor, i.e., a person who is classified by the
Employer as an independent contractor, as evidenced by its failure to withhold
taxes from his or her compensation, even if the individual is actually the
Employer’s common law Employee.

Special rules for certain persons who were employed by One Beacon Insurance
Group, LTD. or any business entity affiliated with One Beacon Insurance Group,
LTD. immediately before being employed by the Employer are stated in Appendix A
attached hereto.

Special rules for certain persons who were employed by (i) Campania Holding
Company, Inc. or its direct or indirect subsidiaries; (ii) Benchmark
Professional Insurance Services, Inc. or its direct or indirect subsidiaries; or
(iii) Insurance Company of the West or its direct or indirect subsidiaries,
immediately before being employed by the Employer are stated in Appendix B
attached hereto.

Special rules for certain persons who were employed by (i) Professionals Direct,
Inc. or its direct or indirect subsidiaries; (ii) Verlan Holdings, Inc. or its
direct or indirect subsidiaries; or (iii) AIX Holdings, Inc. or its direct or
indirect subsidiaries, immediately before being employed by the Employer are
stated in Appendix C attached hereto.

 

(b)          Employee Participation. On or after the date an Employee first
becomes eligible to participate in the Plan, the Employee may direct the
Employer to reduce his or her Compensation in order that the Employer may make
Salary Reduction Contributions to the Plan, including Catch-up Contributions, on
the Employee’s behalf in accordance with Section 5.04; provided that for Plan
Years beginning on January 1, 2009 and thereafter, any Eligible Participant
shall be subject to the automatic enrollment and contribution provisions of
Section 5.05.

3.02         Classification Changes. In the event of a change in job
classification, such that an Employee, although still in the employment of the
Employer, no longer is an Eligible Employee, all contributions to be allocated
on his or her behalf shall cease and any amount credited to the Employee’s
Accounts on the date the Employee shall become ineligible shall continue to
vest, become payable or be forfeited, as the case may be, in the same manner and
to the same extent as if the Employee had remained a Participant.

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If a Participant’s Salary Reduction Agreement is terminated because he or she is
no longer a member of an eligible class of Employees, but the Participant has
not terminated his or her employment, such Employee shall again be eligible to
enter into a new Salary Reduction Agreement immediately upon his or her return
to an eligible class of Employees. If such Participant terminates his or her
employment with the Employer, he or she shall again be eligible to enter into a
Salary Reduction Agreement immediately upon his or her recommencement of service
as an Eligible Employee.

In the event an Employee who is not a member of the eligible class of Employees
becomes a member of the eligible class, such Employee shall be eligible to
participate immediately.

3.03         Participant Cooperation. Each eligible Employee who becomes a
Participant hereunder thereby agrees to be bound by all of the terms and
conditions of this Plan and Trust.

ARTICLE IV

EMPLOYER CONTRIBUTIONS AND FORFEITURES

4.01         Salary Reduction Contributions. The Employer shall make Salary
Reduction Contributions to the Plan and Trust, including Catch-up Contributions
described in Code Section 414(v), to the extent and in the manner specified in
Sections 3.01(b), 5.04, and 5.05.

Salary Reduction Contributions, including Catch-up Contributions described in
Code Section 414(v), shall be allocated to a Participant’s 401(k) Account as
soon as administratively feasible after the earliest date on which such
contributions can reasonably be segregated from the Employer’s general assets
but in no event later than the 15th business day of the month following the
month in which the Salary Reduction Contributions would have otherwise been
payable to the Participant.

 

4.02         Match Contributions.  

(a)           For Plan Years beginning on or after January 1, 2009, for each pay
period during a Plan Year that a Salary Reduction Contribution is made to the
Plan on behalf of a Participant, the Employer shall make a Match Contribution to
the Plan on behalf of the Participant equal to 100% of such Salary Reduction
Contributions that do not exceed 6% of the Participant’s Compensation for such
pay period; provided that no such Match Contribution shall be made with respect
to any part or all of any such Salary Reduction Contribution that, when added to
other such Salary Reduction Contributions made to the Plan on behalf of the
Participant during the Plan Year, would cause the applicable dollar amount under
Code Section 402(g)(1)(B) to be exceeded for such Plan Year unless the Salary
Reduction Contribution may be treated as a Catch-up Contribution that does not
exceed the limitation under Code Section 402(g)(1)(C). All such Match
Contributions shall be made to the Match Contribution Account established for
the Participant as soon after each such pay period as practicable.

For Plan Years beginning on or after January 1, 2005 and before January 1, 2009,
unless otherwise voted by the Board of Directors of the Employer, for each pay
period that an eligible Salary Reduction Contribution is made by a Participant
to the Trust, not to exceed the Code Section 402(g)(1)(B) limitation and not
including Catch-up Contributions, the Employer shall make a Match Contribution
to the Trust on the Participant’s behalf equal to 100% of the first 5% of the
Participant’s Salary Reduction Contributions, not including Catch-up
Contributions, made during the pay period. Such Match Contribution shall be made
to the Match Contribution Account established for the Participant.

The Employer shall contribute Match Contributions to the Trust Fund as soon as
practicable following the end of each pay period. Such Match Contributions shall
be made in cash and shall be allocated to the Match Contribution Account of each
Participant. Such Match Contributions shall be invested per the directions of
Participants in accordance with Section 16.02.

For Plan Years beginning on and after January 1, 2009, within 30 days following
the end of each Plan Year, if required, the Employer shall make a “true-up”
Match Contribution to the Match Contribution Account of each Participant
employed by the Employer during the Plan Year, such that the total amount of
Match Contributions for each Participant for the Plan Year shall be equal to
100% of the Participant’s Salary Reduction Contributions that do not exceed 6%
of the Participant’s Compensation for such Plan Year (and not merely 100% of the
Participant’s Salary Reduction Contributions that do not exceed 6% of the
Participant’s Compensation for each pay period during the Plan Year); provided
that no such Match Contribution shall be made with respect to any part or all of
any such Salary Reduction Contributions that would cause the applicable dollar
amount under Code Section 402(g)(1)(B) to be exceeded for such Plan Year unless
the Salary Reduction Contribution can be treated as a Catch-up Contribution that
does not exceed the limitation under Code Section 402(g)(1)(C).

 

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For Plan Years beginning on or after January 1, 2005 and before January 1, 2009,
within 30 days following the end of each Plan Year, if required, the Employer
shall make a “true-up” Match Contribution to the Match Contribution Account of
each Participant employed by the Employer on the last day of the Plan Year, such
that the Match Contribution for such eligible Participant for the Plan Year
shall be 100% of the eligible Employer Match Contribution percentage of each
such Participant’s Salary Reduction Contributions made during the entire Plan
Year, not including Catch-up Contributions, not merely 100% of the eligible
Employer Match Contribution percentage of the Participant’s Salary Reduction
Contributions, not including Catch-up Contributions, made each pay period during
the Plan Year.

(b)          For Plan Years beginning on or after January 1, 2009, (i) the Match
Contributions made pursuant to Section 4.02(a) shall be subject to the
withdrawal restrictions set forth in Code Section 401(k)(2)(B) and Treasury
Regulation Section 1.401(k)-1(d); and (ii) pursuant to Code Section 401(k)(2)(B)
and Treasury Regulations Section 1.401(k)-1(d), such contributions (and earnings
thereon) shall not be distributable earlier than severance from employment,
death, disability, an event described in Code Section 401(k)(10), or the
attainment of age 59 1/2 and shall not be eligible for distribution for reasons
of “financial hardship”.

4.03         Non-Elective Employer Contributions.  

(a)           For Plan Years beginning on or after January 1, 2010, the Board of
Directors of the Employer may, in its discretion, determine to make a
Non-Elective Employer Contribution to the Plan on behalf of the Employer for
each Eligible Employee who is employed by the Employer on the last day of such
Plan Year in an amount equal to a uniform percentage of each such Employee’s
Compensation. Any such contribution shall be made in cash to the Non-Elective
Employer Contribution Account established for each such Eligible Employee.

For Plan Years beginning on or after January 1, 2008 and before January 1, 2010,
Eligible Employees who are employed by the Employer on the last day of the Plan
Year will receive an Employer paid contribution in an amount equal to 2% of the
Employee’s Compensation, unless otherwise voted by the Board of Directors of the
Employer.

For Plan Years beginning on or after January 1, 2005 and before January 1, 2008,
unless otherwise voted by the Board of Directors of the Employer, Eligible
Employees who are employed by the Employer on the last day of the Plan Year will
receive an Employer paid contribution, whether or not the Employee has elected
to participate in the Plan, equal to 3% of eligible Plan Compensation.

 

The contribution shall be made in cash. Such contribution shall be made to the
Non-Elective Employer Contribution Account to be established for each such
Employee and shall be invested per the direction of the Participant in
accordance with Section 16.02 of the Plan.

(b)           Notwithstanding anything in the Plan to the contrary, for the 2006
Plan Year only, and subject to compliance with applicable Code discrimination
laws, rules and regulations, all Employees, other than First Allmerica Operating
Committee Members, employed by the Employer on December 31, 2006, shall receive
an extra Employer paid contribution of $500, whether or not the Employee has
elected to participate in the Plan.

Provided, however that Employees who voluntarily terminated between January 1,
2007 and March 5, 2007, or Employees who were terminated between such dates for
cause, are not eligible for the extra company paid $500 award.

The contribution and extra contribution shall be made in cash. Such contribution
and extra contribution shall be made to the Non-Elective Employer Contribution
Account established for each eligible Employee and shall be invested per the
direction of the Participant in accordance with Section 16.02 of the Plan.

(c)          Notwithstanding any other provision in the Plan to the contrary,
for the 2010 Plan Year only, and subject to compliance with applicable Code
discrimination laws, rules and regulations, each Participant who was an Employee
on December 31, 2009, has been continuously employed from December 31, 2009
through March 1, 2010 and who earned Compensation during the Plan Year ended
December 31, 2009, shall receive an Employer paid contribution of $500, whether
or not such Employee has elected to make Salary Reduction Contributions to the
Plan during such continuous period of employment. This Employer contribution
shall be made in cash to the Non-Elective Employer Contribution Account
established for any such eligible Employee as soon after March 1, 2010 as is
practicable and shall be invested per the direction of the Participant in
accordance with Section 16.02 of the Plan.

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4.04         Minimum Employer Contribution for Top Heavy Plan Years.  

(a)           Minimum Allocation for Non-Key Employees. Notwithstanding anything
in the Plan to the contrary except (b) through (e) below, for any Top Heavy Plan
Year Employer Contributions allocated to the Accounts of each Non-Key Employee
Participant shall be equal to at least three percent of such Non-Key Employee’s
Compensation (as defined for purposes of Article VII as limited by
Section 401(a)(17) of the Code) for the Plan Year. However, should the Employer
Contributions allocated to the Accounts of each Key Employee for such Top Heavy
Plan Year be less than three percent of each Key Employee’s Compensation, the
Employer Contribution allocated to the Accounts of each Non-Key Employee shall
be equal to the largest percentage allocated to Accounts of a Key Employee. The
preceding sentence shall not apply if this Plan is required to be included in an
aggregation group (as described in Section 416 of the Internal Revenue Code) if
such 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. For purposes of
determining the percentage of Employer Contributions allocated to the Accounts
of Key Employees, Salary Reduction Contributions made on their behalf shall be
counted and be considered to be Employer Contributions. However, in determining
whether a minimum Employer Contribution has been made to a Non-Key Employee’s
Accounts, Salary Reduction Contributions made on his or her behalf shall be
excluded and not considered.

(b)          For purposes of the minimum allocations set forth above, the
percentage allocated to the Accounts of any Key Employee shall be equal to the
ratio of the sum of the Employer Contributions allocated on behalf of such Key
Employee divided by the Employee’s Compensation for the Plan Year (as defined
for purposes of Article VII), not in excess of the applicable Compensation
dollar limitation imposed by Code Section 401(a)(17).

(c)           For any Top Heavy Plan Year, the minimum allocations set forth
above shall be allocated to the Accounts of all Non-Key Employees who are
Participants and who are employed by the Employer on the last day of the Plan
Year, including Non-Key Employee Participants who have failed to complete a Year
of Service.

(d)          Notwithstanding anything herein to the contrary, in any Plan Year
in which a Non-Key Employee is a Participant in both this Plan and a defined
benefit pension plan included in a Required or Permissive Group of Top Heavy
Plans, the Employer shall not be required to provide a Non-Key Employee with
both the full separate minimum defined benefit plan benefit and the full
separate minimum defined Contribution plan allocation described in this Section.
Therefore, if the Employer maintains such a defined benefit and defined
contribution plan, the top-heavy minimum benefits shall be provided as follows:

(i)            If a Non-Key Employee is a participant in such defined benefit
plan but is not a Participant in this defined contribution plan, the minimum
benefits provided for Non-Key Employees in the defined benefit plan shall be
provided to the Employee if the defined benefit plan is a Top Heavy Plan and the
minimum contributions described in this Section 4.04 shall not be provided.

(ii)            If a Non-Key Employee is a participant in such defined benefit
plan and is also a Participant in this defined contribution plan, the minimum
benefits for Non-Key Employee participants in Top Heavy Plans provided in the
defined benefit plan shall not be applicable to any such Non-Key Employee who
receives the full maximum contribution described in the preceding sentence.

 

Notwithstanding anything herein to the contrary, no minimum contribution will be
required under this Plan (or the minimum contribution under this Plan will be
reduced, as the case may be) for any Plan Year if the Employer maintains another
qualified defined contribution plan under which a minimum contribution is being
made for such year for the Participant in accordance with Section 416 of the
Internal Revenue Code.

(e)          The minimum allocation required under this Section 4.04 (to the
extent required to be nonforfeitable under Section 416(b) of the Code) may not
be forfeited under Code Sections 411(a)(3)(B) or 411(a)(3)(D).

4.05        Contributions under USERRA. For Plan Years beginning on and after
January 1, 2008, the Employer shall also make Match Contributions, Top-Heavy
minimum contributions and any other Employer contribution for the benefit of
Participants who are covered by USERRA. Match Contributions under USERRA shall
be made in the Plan Year for which the Participant exercises his or her right to
make-up elective deferrals contributions (Salary Reduction Contributions) for
prior years. Top-Heavy minimum contributions and other Employer contributions
for USERRA protected service shall be made during the Plan Year in which the
individual returns to employment with the Employer. Employer contributions
required under USERRA are not increased or decreased with respect to Plan
investment earnings for the period to which such contributions relate. The
Employer’s contribution for any Plan Year shall be subject to the limitations on
allocations contained in Article VII.

4.06         Application of Forfeitures. Amounts forfeited during a Plan Year
shall be used to reduce Match Contributions for that Plan Year and each
succeeding Plan Year, if necessary.

4.07         Limitations upon Employer Contributions. In no event shall the
Employer contribution for any Plan Year exceed the maximum allowable under
Sections 404 and 415 of the Internal Revenue Code or any similar or subsequent
provision.

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4.08         Payment of Contributions to Trustee. The Employer shall make
payment of all contributions, including Participant contributions, which shall
be remitted to the Employer by payroll deduction or otherwise, directly to the
Trustee in accordance with this Article IV but subject to Section 4.09.

4.09         Receipt of Contributions by Trustee. The Trustee shall accept and
hold under the Trust such contributions of money, or other property approved by
the Employer for acceptance by the Trustee, on behalf of the Employer and
Participants as it may receive from time to time from the Employer. All such
contributions shall be accompanied by written instructions from the Employer
accounting for the manner in which they are to be credited and specifying the
appropriate Participant Account to which they are to be allocated.

 

ARTICLE V

EMPLOYEE CONTRIBUTIONS AND ROLLOVER CONTRIBUTIONS

5.01         Voluntary After-Tax Contributions. For Plan Years beginning prior
to January 1, 1995, a Participant could contribute Voluntary After-Tax
Contributions to the Plan and Trust in each Plan Year during which he or she was
a Plan Participant in amounts as determined under the Plan in effect prior to
1995.

The Plan shall separately account for: (i) pre-1987 Voluntary After-Tax
Contributions; (ii) investment income attributable to pre-1987 Voluntary
After-Tax Contributions; and (iii) post-1986 Voluntary After-Tax Contributions
and income attributable to such contributions.

5.02         Tax Deductible Voluntary Contributions. The Plan Administrator will
not accept Tax Deductible Voluntary Contributions made for years after 1986.
Such contributions made for years prior to that date will be maintained in a
separate account which will be nonforfeitable at all times, and which shall
include gains and losses in accordance with Section 8.02.

5.03         Rollover Contributions. With the consent of the Plan Administrator,
the Trustee may accept funds transferred from other pension, profit sharing or
stock bonus plans qualified under Section 401(a) of the Internal Revenue Code or
Rollover Contributions, provided that the plan from which such funds are
transferred permits the transfer to be made.

In the event of a transfer or Rollover Contribution to this Plan, the Plan
Administrator shall maintain a 100% vested and nonforfeitable account for the
amount transferred and its share of the Trust Fund’s accretions or losses, to be
known as the Participant’s Rollover Account. Transferred and Rollover
Contributions shall be separately accounted for.

“Rollover Contribution” means any rollover contribution described in Code
Sections 402(c)(4), 403(a)(4), 403(b)(8), 408(d)(3) or 457(e)(16).

An Employee who makes a contribution to the Plan described in this Section shall
become a Plan Participant on the date the Trustee accepts the contribution.
However, no Employer Contributions will be made on behalf of such Employee, nor
will the Employee be eligible to direct the Employer to make Salary Reduction
Contributions on his or her behalf, until the Employee satisfies the Plan
eligibility requirements for such contributions set forth in Article III.

Notwithstanding the above, for Plan Years beginning January 1, 1999 and
thereafter, the Trustee shall no longer accept funds transferred from plans
qualified under 401(a) of the Internal Revenue Code unless the transferor plan
is maintained by the Employer or by an Affiliate. Notwithstanding the foregoing,
for Plan Years beginning on and after January 1, 2011, the Trustee shall not
accept funds transferred from any such plan, which would otherwise provide for a
life annuity form of payment to the Participant. Rollover Contributions to the
Plan shall continue to be allowed in accordance with this Section 5.03.

 

5.04         Salary Reduction Contributions.  

(a)           An Employee who is eligible to participate in the Plan may execute
a Salary Reduction Agreement to reduce his or her Compensation in order to make
Salary Reduction Contributions to the Plan, including Catch-up Contributions.
The Salary Reduction Agreement shall be made in a form approved by the Plan
Administrator (including, if applicable, by means of telephone, computer, or
other paperless media). The Compensation of any Eligible Employee electing
salary reduction shall be reduced by the whole percentage requested by the
Employee; provided,  however, that the Plan Administrator shall identify the
maximum whole percentage on an annual basis. Any Salary Reduction Agreement
shall become effective as soon as administratively feasible after the Employee
elects to have his or her salary reduced. For Plan Years beginning on or after
January 1, 2006, except for occasional, bona fide administrative considerations,
Salary Reduction Contributions made pursuant to a Salary Reduction Agreement
cannot precede the earlier of (1) the performance of services relating to the
contribution and (2) when the compensation that is subject to the election would
be currently available to the Participant in the absence of an election to
defer.

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A Participant may elect at any time to change or discontinue his or her Salary
Reduction Agreement. Unless otherwise agreed to by the Plan Administrator, the
election shall become effective as soon as administratively feasible after the
Employee elects such change or discontinuance.

(b)          Make-up Elective Deferrals under USERRA. Effective for Plan Years
beginning on and after January 1, 2008, a Participant who has the right to
make-up elective deferrals (Salary Reduction Contributions) under USERRA shall
be permitted to increase his or her elective deferral with respect to a make-up
year without regard to any provision limiting contributions for such Plan Year.
Make-up contributions shall be limited to the maximum amount permitted under the
Plan and the statutory limitations applicable with respect to the make-up year.
Employee-related make-up contributions must be made within the time period
beginning on the date of reemployment and continuing for the lesser of five
(5) years or three (3) times the period of military service.

 

For Plan Years beginning prior to January 1, 2009, “Make-up” Salary Reduction
Contributions made by reason of an Eligible Employee’s qualified military
service under Code section 414(u) shall not be taken into account for any year
when calculating an employee’s Actual Deferral Percentage (under
Section 9.01(a)) as provided for in Treasury Regulation section
1.401(k)-2(a)(5)(v) and Match Contributions thereon shall not be taken into
account for any year when calculating an employee’s Average Contribution
Percentage (under Section 10.01(a)) as provided for in Treasury Regulation
section 1.401(m)-2(a)(5)(vi).

5.05         Qualified Automatic Contribution Arrangement (“QACA”).

(a)           Effective Date of the QACA. Effective for Plan Years beginning on
or after January 1, 2009, the provisions of this Section 5.05 of the Plan shall
apply to each Participant subject to the QACA and the Employer will provide the
Match Contribution specified in Section 4.02 of the Plan. This Section 5.05 of
the Plan supersedes any State (or Commonwealth) law that would directly or
indirectly prohibit or restrict the inclusion of an automatic contribution
arrangement in the Plan, pursuant to ERISA Section 514(e)(1) and Department of
Labor Regulation Section 2550.404c–5(f).

(b)           Participants Subject to the QACA. The following Eligible Employees
shall be Eligible Participants subject to the Automatic Contribution
Arrangement:

(i)             Each Employee who becomes eligible to participate in the Plan on
and after January 1, 2009 and is eligible to make a Salary Reduction
Contribution.

(ii)            Each Employee who became eligible to participate in the Plan
prior to January 1, 2009 and who is eligible to participate in the Plan on
January 1, 2009, except any such Participant who had in effect a Salary
Reduction Agreement on such date (regardless of the amount of the Salary
Reduction Contribution affirmatively elected under the agreement).

(c)          Automatic Contribution Arrangement.

(i)            Automatic Contributions. Except as provided in Section 5.05(d) of
the Plan, an Eligible Participant will be treated as having elected to direct
the Employer to reduce his or her Compensation in order that the Employer may
make Salary Reduction Contributions to the Plan equal to the following uniform
percentages of Compensation:

A.             Initial Period. An Eligible Participant will be treated as having
elected to have the Employer make Salary Reduction Contributions to the Plan in
an amount equal to 3% of his or her Compensation during the initial period. For
this purpose, the initial period begins when the Employee is first subject to
the Automatic Contributions default election under this Section 5.05(c)(i) and
ends on the last day of the following Plan Year.

 

B.             Subsequent Plan Years. For the three Plan Years immediately
following the initial period, an Eligible Participant will be treated as having
elected to have the Employer make Salary Reduction Contributions to the Plan in
the amounts equal to 4%, 5% and 6% respectively, of his or her Compensation. For
all Plan Years thereafter, an Eligible Participant will be treated as having
elected to have the Employer make Salary Reduction Contributions to the Plan in
the amounts equal to 6% of his or her Compensation.

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C.           Treatment of Rehires. The default percentages of Compensation
stated above for the purposes of the Automatic Contributions are based on the
date the initial period begins, regardless of whether the Employee continues to
be eligible to make Salary Reduction Contributions under the Plan after that
date. Thus, the applicable percentage is generally determined based on the
number of years since an Automatic Contribution was first made on behalf of an
Eligible Participant. However, if Automatic Contributions are not made on behalf
of an Eligible Participant for an entire Plan Year (e.g., due to termination of
employment), such Eligible Participant shall be treated as having a new initial
period for determining the default percentage of Compensation stated above (if
Automatic Contributions are to recommence with respect to the Eligible
Participant), regardless of what minimum percentage would otherwise apply to
that Eligible Participant.

(ii)           Effective Date of Automatic Contributions. The effective date of
the first Automatic Contribution provided for in paragraph (i) above, will be as
soon after an Eligible Participant becomes subject to the QACA as is
practicable, consistent with (a) applicable law, and (b) the objective of
affording the Eligible Participant a reasonable period of time after receipt of
the notice to make an Affirmative Election (and, an investment election).
However, in no event will the Automatic Contribution be effective later than the
earlier of (a) the pay date for the second payroll period that begins after the
date the QACA safe harbor notice (described in Section 5.05(f) of the Plan) is
provided to the Eligible Participant, or (b) the first pay date that occurs at
least 30 days after the QACA safe harbor notice is provided to the Eligible
Participant.

 

(d)          Rules Related to Automatic Contributions.

(i)            Affirmative Election to Override Automatic Contributions. An
Eligible Participant will have a reasonable period of time after receipt of the
notice to make an Affirmative Election (and, an investment election). The
Automatic Contributions provided for in Section 5.05(c) of the Plan shall cease
with respect to an Eligible Participant as soon as administratively feasible
after the Eligible Participant makes an Affirmative Election. An Eligible
Participant’s Affirmative Election will not expire, but will remain in force
until changed by the Eligible Participant. An Eligible Participant need not
execute a subsequent or new Affirmative Election in order to have the prior or
old Affirmative Election apply to override the Automatic Contributions provided
for in Section 5.05(c) of the Plan in any subsequent Plan Year. Any subsequent
change to an Eligible Participant’s Affirmative Election will be made in
accordance with Section 5.04 of the Plan relating to a Participant’s right to
elect at any time to change or discontinue his or her Salary Reduction
Agreement.

(ii)            Applying Statutory Limits to Automatic Contributions. The
Automatic Contributions provided for in Section 5.05(c) of the Plan shall be
limited each Plan Year so as not to exceed the limits of Code
Sections 401(a)(17), 402(g)(1), or 415.

(iii)           No Automatic Contributions during Hardship Suspension. No
Automatic Contributions provided in Section 5.05(c) of the Plan shall apply
during the six-month period of suspension, under Section 11.02 of the Plan, of a
Participant’s right to make Salary Reduction Contributions to the Plan following
a distribution for “financial hardship”.

(e)          Permissible Withdrawals.

(i)            Withdrawal Election. An Eligible Participant who is enrolled in
the Automatic Contribution Arrangement prior to January 1, 2011 may elect to
make a Permissible Withdrawal of the Automatic Contributions that are made to
the Plan on his or her behalf.

(ii)            Forfeiture of Match Contribution. Notwithstanding the vesting
provisions of this Plan, any amounts attributable to Match Contributions
allocated to the Match Contribution Account of an Eligible Participant with
respect to Automatic Contributions that have been withdrawn pursuant to this
Section 5.05(e) shall be forfeited. In the event that Match Contributions would
otherwise be allocated to the Eligible Participant’s Match Contribution Account
with respect to Automatic Contributions that have been so withdrawn, the
Employer shall not contribute such Match Contributions to the Plan.

 

(f)            Default Investment. If an Eligible Participant does not direct
the investment of the assets in his or her Account, including the Automatic
Contributions and Match Contributions related thereto, then such assets will be
invested in a Qualified Default Investment Alternative as provided for in
Section 16.03 of the Plan.

(g)           Notice Requirements for QACA Safe Harbor. The notice requirement
is satisfied if each Eligible Participant is given an annual notice of the his
or her rights and obligations under the Plan and the notice provided satisfies
the content requirement and the timing requirement as follows:

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(i)            The notice shall be sufficiently accurate and comprehensive to
inform the Eligible Participant of the Eligible Participant’s rights and
obligations under the Plan and written in a manner calculated to be understood
by the average Eligible Participant. The notice shall accurately describe:
(1) the Match Contribution formula stated in Section 4.02 of the Plan; (2) any
other contributions under the Plan and the conditions under which such
contributions are made; (3) the type and amount of Compensation that may be
deferred under the Plan; (4) how to make cash or deferred elections, including
any administrative requirements that apply to such elections; (5) the periods
available under the Plan for making cash or deferred elections; (6) withdrawal
and vesting provisions applicable to contributions under the Plan; and
(7) information that makes it easy to obtain additional information about the
Plan; provided that the notice requirement with respect to the information
described in items (2), (3), and (4) may be satisfied by cross-reference to the
applicable sections of the Plan’s summary plan description. In addition, the
notice shall accurately describe: (1) the Automatic Contributions that will be
made on behalf of the Eligible Participant in the absence of an Affirmative
Election; (2) the Eligible Participant’s right to elect not to have the
Automatic Contributions made on his or her behalf (or to elect to have Salary
Reduction Contributions made in a percentage of Compensation different than that
which is provided for in Section 5.05(c) of the Plan, at the percentage of
Compensation specified in his or her Salary Reduction Agreement); (3) how
contributions made under the Automatic Contribution Arrangement will be invested
in the absence of any investment election by the Eligible Participant; and
(4) with respect to Eligible Participants who are enrolled in the Automatic
Contribution Account prior to January 1, 2011, the Eligible Participant’s right
to make a Permissible Withdrawal of the Automatic Contributions made on his or
her behalf and the procedures for doing so. After receipt of the notice
described in this paragraph, any Eligible Participant to whom the Automatic
Contribution Arrangement relates must have a reasonable period of time before
the first Automatic Contribution is made to exercise the rights set forth within
the notice including, but not limited to, executing an Affirmative Election to
override the Automatic Contributions provided for in Section 5.05(c) of the
Plan.

 

(ii)            If the notice is provided to Eligible Participants within a
reasonable period before the beginning of each Plan Year (or in the Plan Year an
Employee becomes eligible, within a reasonable period before the Employee
becomes eligible), the Plan shall satisfy the notice requirements.
Notwithstanding the foregoing general rule, a notice shall be deemed to have
been provided in timely manner if the notice is provided to each Employee who is
eligible to participate in the Plan for the Plan Year at least thirty (30) days
but no more than ninety (90) days before the beginning of the Plan Year. If an
Employee does not receive the notice because he or she only becomes eligible to
participate in the Plan after the ninetieth day before the beginning of the Plan
Year, the requirement to give the notice will be satisfied if the notice is
provided not more than ninety (90) days before the Employee becomes eligible to
participate in the Plan, but in no event later than the date the Employee
becomes eligible to participate in the Plan.

(iii)           Each Eligible Participant may make or modify a deferral election
during the thirty (30) day period immediately following receipt of the notice
described above, as provided for in Section 5.04 of the Plan.

(iv)           The Plan may provide the notice in writing or by electronic
means. If provided electronically, the notice must be no less understandable
than a written paper document and at the time of delivery of the electronic
notice, the Employee is advised that he or she may request to receive the notice
in writing at no additional charge.

ARTICLE VI

PROVISIONS APPLICABLE TO TOP HEAVY PLANS

6.01         In general. For any Top Heavy Plan Year, the Plan shall provide the
minimum contribution for Non-Key Employees described in Section 4.04.

If the Plan is or becomes a Top Heavy Plan, the provisions of this Article will
supersede any conflicting provisions in the Plan.

6.02         Determination of Top Heavy Status.  

(a)          This Plan shall be a Top Heavy Plan for any Plan Year commencing
after December 31, 1983 if any of the following conditions exists:

(i)           If the top heavy ratio for this Plan exceeds 60 percent and this
Plan is not part of any required aggregation group or permissive aggregation
group of plans.

 

(ii)          If this Plan is a part of a required aggregation group of plans
but not part of a permissive aggregation group and the top heavy ratio for the
group of plans exceeds 60 percent.

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(iii)         If this Plan is a part of a required aggregation group and part of
a permissive aggregation group of plans and the top heavy ratio for the
permissive aggregation group exceeds 60 percent.

(b)          The Plan top heavy ratio shall be determined as follows:

(i)            Defined Contribution Plans Only: If the Employer maintains one or
more defined contribution plans (including any Simplified Employee Pension Plan,
as defined in Section 408(k) of the Code) and the Employer has not maintained
any defined benefit plan which during the 1-year period (5-year period in
determining whether the Plan is Top Heavy for Plan Years beginning before
January 1, 2002) ending on the determination date(s) has or has had accrued
benefits, the top-heavy ratio for this Plan alone or for the required or
permissive aggregation group, as appropriate, is a fraction, the numerator of
which is the sum of the account balances of all Key Employees as of the
determination date(s) (including any part of any account balance distributed in
the 1-year period ending on the determination date(s) (5-year period ending on
the determination date in the case of a distribution made for a reason other
than severance from employment, death or disability and in determining whether
the Plan is Top Heavy for Plan Years beginning before January 1, 2002), and the
denominator of which is the sum of all account balances (including any part of
any account balance distributed in the 1-year period ending on the determination
date(s)) (5-year period ending on the determination date in the case of a
distribution made for a reason other than severance from employment, death or
disability and in determining whether the Plan is Top Heavy for Plan Years
beginning before January 1, 2002), both computed in accordance with Section 416
of the Code and the Regulations thereunder. Both the numerator and denominator
of the top-heavy ratio are increased to reflect any contribution not actually
made as of the determination date, but which is required to be taken into
account on that date under Section 416 of the Code and the Regulations
thereunder.

(ii)           Defined Contribution and Defined Benefit Plans: If the Employer
maintains one or more defined contribution plans (including any Simplified
Employee Pension Plan) and the Employer maintains or has maintained one or more
defined benefit plans which during the 1-year period (5-year period in
determining whether the Plan is Top Heavy for Plan Years beginning before
January 1, 2002) ending on the determination date(s) has or has had any accrued
benefits, the top-heavy ratio for any required or permissive aggregation group,
as appropriate, is a fraction, the numerator of which is the sum of account
balances under the aggregated defined contribution plan or plans for all Key
Employees, determined in accordance with (i) above, and the present value of
accrued benefits under the aggregated defined benefit plan or plans for all Key
Employees as of the determination date(s), and the denominator of which is the
sum of the account balances under the aggregated defined contribution plan or
plans for all Participants, determined in accordance with (i) above, and the
present value of accrued benefits under the defined benefit plan or plans for
all Participants as of the determination date(s), all determined in accordance
with Section 416 of the Code and the Regulations thereunder. The accrued
benefits under a defined benefit plan in both the numerator and denominator of
the top-heavy ratio are increased for any distribution of an accrued benefit
made in the 1-year period ending on the determination date (5-year period ending
on the determination date in the case of a distribution made for a reason other
than severance from employment, death or disability and in determining whether
the Plan is Top Heavy for Plan Years beginning before January 1, 2002).

(iii)           Determination of Values of Account Balances and Accrued
Benefits: For purposes of (i) and (ii) above the value of Account balances and
the present value of Accrued Benefits will be determined as of the most recent
valuation date that falls within or ends with the 12-month period ending on the
determination date, except as provided in Section 416 of the Code and the
Regulations thereunder for the first and second plan years of a defined benefit
plan. The account balances and accrued benefits of a Participant (1) who is not
a Key Employee but who was Key Employee in a prior year, or (2) who has not had
at least one Hour of Service with the Employer at any time during the 1-year
period (five-year period in determining whether the Plan is Top Heavy for Plan
Years beginning before January 1, 2002) ending on the determination date will be
disregarded. The calculation of the top-heavy ratio and the extent to which
distributions, rollovers, and transfers are taken into account will be made in
accordance with Section 416 of the Code and the Regulations thereunder. Tax
Deductible Voluntary Employee contributions will not be taken into account for
purposes of computing the top-heavy ratio. When aggregating plans the value of
account balances and accrued benefits will be calculated with reference to the
determination dates that fall within the same calendar year.

 

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The Accrued Benefit of a Participant other than a Key Employee shall be
determined under (i) the method, if any, that uniformly applies for accrual
purposes under all defined benefit plans maintained by the Employer; or (ii) if
there is no such method, as if such benefit accrued not more rapidly than the
slowest accrual rate permitted under the fractional rule of Section 411(b)(l)(C)
of the Code.

(c)            Permissive aggregation group: The required aggregation group of
plans plus any other plan or plans of the Employer which, when considered as a
group with the required aggregation group, would continue to satisfy the
requirements of Section 401(a)(4) and 410 of the Internal Revenue Code.

(d)           Required aggregation group: (i) Each qualified plan of the
Employer in which at least one Key Employee participates or participated at any
time during the determination period (regardless of whether the Plan has
terminated), and (ii) any other qualified plan of the Employer which enables a
plan described in (i) to meet the requirements of Section 401(a)(4) or 410 of
the Internal Revenue Code.

(e)           Determination date: The last day of the preceding Plan Year.

(f)           Present Value: Present value shall be based on the 1971 Group
Annuity Table, unprojected for post-retirement mortality, with no assumption for
pre-retirement withdrawal and interest at the rate of 5% per annum.

ARTICLE VII

LIMITATIONS ON ALLOCATIONS

(See Sections 7.12-7.16 for definitions applicable to this Article VII).

7.01         If the Participant does not participate in, and has never
participated in another qualified plan, a welfare benefit fund (as defined in
Section 419(e) of the Code), an individual medical account (as defined in
Section 415(l)(2) of the Code) or a simplified employee pension (as defined in
Section 408(k) of the Code), maintained by the Employer, the amount of Annual
Additions which may be credited to the Participant’s Accounts for any Limitation
Year will not exceed the lesser of the Maximum Permissible Amount or any other
limitation contained in this Plan. If the Employer contribution that would
otherwise be contributed or allocated to the Participant’s Account would cause
the Annual Additions for the Limitation Year to exceed the Maximum Permissible
Amount, the amount contributed or allocated will be reduced so that the Annual
Additions for the Limitation Year will equal the Maximum Permissible Amount.

 

7.02         Prior to determining the Participant’s actual Compensation for the
Limitation Year, the Employer may determine the Maximum Permissible Amount for a
Participant on the basis of a reasonable estimation of the Participant’s annual
Compensation for the Limitation Year, uniformly determined for all Participants
similarly situated.

7.03         As soon as is administratively feasible after the end of the
Limitation Year, the Maximum Permissible Amount for the Limitation Year will be
determined on the basis of the Participant’s actual Compensation for the
Limitation Year.

7.04         Excess Annual Additions. Notwithstanding any provision of the Plan
to the contrary, if the Annual Additions (within the meaning of Code
Section 415) are exceeded for any Participant, then the Plan may only correct
such excess in accordance with the Employee Plans Compliance Resolution System
(EPCRS) as set forth in Revenue Procedure 2008-50 or any superseding guidance,
including, but not limited to, the preamble of the Final Treasury Regulations
under Code Section 415.

 

7.05         (a)           Aggregation and Disaggregation of Plans. Sections
7.06 through 7.11 apply if, in addition to this Plan, the

Participant is covered under another qualified defined contribution plan, a
welfare benefit fund, an individual medical account or a simplified employee
pension maintained by the Employer during any Limitation Year. The term
“Employer” for this purpose means the Employer that adopts this Plan and all
members of a controlled group or an affiliated service group that includes the
Employer (within the meaning of Code Sections 414(b), (c), (m) or (o)), except
that for purposes of this Section, the determination shall be made by applying
Code Section 415(h), and shall take into account tax-exempt organizations under
Treasury Regulation Section 1.414(c)-5, as modified by Treasury Regulation
Section 1.415(a)-1(f)(1). For purposes of this Section:

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(i)            A former Employer is a “predecessor employer” with respect to a
Participant in a plan maintained by an Employer if the Employer maintains a plan
under which the Participant had accrued a benefit while performing services for
the former Employer, but only if that benefit is provided under the plan
maintained by the Employer. For this purpose, the formerly affiliated plan rules
in Treasury Regulation Section 1.415(f)-1(b)(2) apply as if the Employer and
predecessor Employer constituted a single employer under the rules described in
Treasury Regulation Section 1.415(a)-1(f)(1) and (2) immediately prior to the
cessation of affiliation (and as if they constituted two, unrelated employers
under the rules described in Treasury Regulation Section 1.415(a)-1(f)(1) and
(2) immediately after the cessation of affiliation) and cessation of affiliation
was the event that gives rise to the predecessor employer relationship, such as
a transfer of benefits or plan sponsorship.

 

(ii)           With respect to an Employer of a Participant, a former entity
that antedates the Employer is a “predecessor employer” with respect to the
Participant if, under the facts and circumstances, the employer constitutes a
continuation of all or a portion of the trade or business of the former entity.

(b)          Break-Up of an Affiliate Employer or an Affiliated Service Group.
For purposes of aggregating plans for Code Section 415, a “formerly affiliated
plan” of an employer is taken into account for purposes of applying the Code
Section 415 limitations to the Employer, but the formerly affiliated plan is
treated as if it had terminated immediately prior to the “cessation of
affiliation.” For purposes of this paragraph, a “formerly affiliated plan” of an
Employer is a plan that, immediately prior to the cessation of affiliation, was
actually maintained by one or more of the entities that constitute the employer
(as determined under the employer affiliation rules described in Treasury
Regulation Section 1.415(a)-1(f)(1) and (2)), and immediately after the
cessation of affiliation, is not actually maintained by any of the entities that
constitute the employer (as determined under the employer affiliation rules
described in Treasury Regulation Section 1.415(a)-1(f)(1) and (2)). For purposes
of this paragraph, a “cessation of affiliation” means the event that causes an
entity to no longer be aggregated with one or more other entities as a single
employer under the employer affiliation rules described in Treasury Regulation
Section 1.415(a)-1(f)(1) and (2) (such as the sale of a subsidiary outside a
controlled group), or that causes a plan to not actually be maintained by any of
the entities that constitute the employer under the employer affiliation rules
of Treasury Regulation Section 1.415(a)-1(f)(1) and (2) (such as a transfer of
plan sponsorship outside of a controlled group).

(c)          Midyear Aggregation. Two or more defined contribution plans that
are not required to be aggregated pursuant to Code Section 415(f) and the
Regulations thereunder as of the first day of a Limitation Year do not fail to
satisfy the requirements of Code Section 415 with respect to a Participant for
the Limitation Year merely because they are aggregated later in that Limitation
Year, provided that no Annual Additions are credited to the Participant’s
Account after the date on which the plans are required to be aggregated.

7.06         The Annual Additions which may be credited to a Participant’s
Accounts under this Plan for any such Limitation Year will not exceed the
Maximum Permissible Amount reduced by the Annual Additions credited to a
Participant’s Account under the other plans, welfare benefit funds, individual
medical accounts and simplified employee pensions for the same Limitation Year.
If the Annual Additions with respect to the Participant under other defined
contribution plans, welfare benefit funds, individual medical accounts and
simplified employee pensions maintained by the Employer are less than the
Maximum Permissible Amount and the Employer contribution that would otherwise be
contributed or allocated to the Participant’s Accounts under this Plan would
cause the Annual Additions for the Limitation Year to exceed this limitation,
the amount contributed or allocated will be reduced so that the Annual Additions
under all such plans and funds for the Limitation Year will equal the Maximum
Permissible Amount. If the Annual Additions with respect to the Participant
under such other defined contribution plans, welfare benefit funds, individual
medical accounts and simplified employee pensions in the aggregate are equal to
or greater than the Maximum Permissible Amount, no amount will be contributed or
allocated to the Participant’s Accounts under this Plan for the Limitation Year.

7.07         Prior to determining the Participant’s actual Compensation for the
Limitation Year, the Employer may determine the Maximum Permissible Amount in
the manner described in Section 7.02.

7.08         As soon as is administratively feasible after the end of the
Limitation Year, the Maximum Permissible Amount for the Limitation Year will be
determined on the basis of the Participant’s actual Compensation for the
Limitation Year.

7.09         If, pursuant to Section 7.08, or as a result of the allocation of
forfeitures, a Participant’s Annual Additions under this Plan and such other
plans would result in an Excess Amount for a Limitation Year, the Excess Amount
will be deemed to consist of the Annual Additions last allocated, except that
Annual Additions attributable to a simplified employee pension will be deemed to
have been allocated first, followed by Annual Additions to a welfare benefit
fund or individual medical account, regardless of the actual allocation date.

7.10         If an Excess Amount was allocated to a Participant on an allocation
date of this Plan which coincides with an allocation date of another plan, the
Excess Amount attributed to this Plan will be the product of:

(i)            the total Excess Amount allocated as of such date, times

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(ii)           the ratio of (A) the Annual Additions allocated to the
Participant for the Limitation Year as of such date under this Plan to (B) the
total Annual Additions allocated to the Participant for the Limitation Year as
of such date under this and all the other qualified defined contribution plans.

7.11         Any Excess Amount attributed to this Plan will be disposed of in
the manner described in Section 7.04.

(Sections 7.12 - 7.16 are definitions used in this Article VII).

7.12         Annual Additions. The sum of the following amounts credited to a
Participant’s Accounts for the Limitation Year.

(i)            Employer contributions (including Salary Reduction
Contributions);

(ii)           Employee contributions;

(iii)         forfeitures; and

(iv)         allocations under a simplified employee pension.

 

Employee and Employer make-up contributions under USERRA received during the
current Limitation Year shall be treated as Annual Additions with respect to the
Limitation Year to which the make-up contributions are attributable.

For this purpose, any Excess Amount applied under Section 7.11 in the Limitation
Year to reduce Employer contributions will be considered Annual Additions for
such Limitation Year.

Amounts allocated after March 31, 1984, to an individual medical account, as
defined in Section 415(l)(2) of the Internal Revenue Code, which is part of a
defined benefit pension plan maintained by the Employer, are treated as Annual
Additions to a defined contribution plan. Also, amounts derived from
contributions paid or accrued after December 31, 1985, in taxable years ending
after such date, which are attributable to post-retirement medical benefits
allocated to the separate account of a Key Employee, as defined in
Section 419(A)(d)(3) of the Code, or under a welfare benefit fund, as defined in
Code Section 419(e), maintained by the Employer, are treated as Annual Additions
to a defined contribution plan.

Restorative Payments. Annual Additions shall not include restorative payments. A
restorative payment is a payment made to restore losses to a Plan resulting from
actions by a fiduciary for which there is reasonable risk of liability for
breach of a fiduciary duty under ERISA or under other applicable federal or
state law, where Participants who are similarly situated are treated similarly
with respect to the payments. Generally, payments are restorative payments only
if the payments are made in order to restore some or all of the Plan’s losses
due to an action (or a failure to act) that creates a reasonable risk of
liability for such a breach of fiduciary duty (other than a breach of fiduciary
duty arising from failure to remit contributions to the Plan). This includes
payments to a plan made pursuant to a Department of Labor order, the Department
of Labor’s Voluntary Fiduciary Correction Program, or a court-approved
settlement, to restore losses to a qualified defined contribution plan on
account of the breach of fiduciary duty (other than a breach of fiduciary duty
arising from failure to remit contributions to the Plan). Payments made to the
Plan to make up for losses due merely to market fluctuations and other payments
that are not made on account of a reasonable risk of liability for breach of a
fiduciary duty under ERISA are not restorative payments and generally constitute
contributions that are considered Annual Additions.

Other Amounts. Annual Additions shall not include: (1) The direct transfer of a
benefit or employee contributions from a qualified plan to this Plan;
(2) Rollover contributions (as described in Code Section 401(a)(31), 402(c)(1),
403(a)(4), 403(b)(8), 408(d)(3), and 457(e)(16)); (3) Repayments of loans made
to a Participant from the Plan; (4) Catch-up Contributions as defined in Plan
Section 2.10; and (5) Repayments of amounts described in Code
Section 411(a)(7)(B) (in accordance with Code Section 411(a)(7)(C)) and Code
Section 411(a)(3)(D), as well as Employer restorations of benefits that are
required pursuant to such repayments, as provide for in Plan Section 13.11.

 

7.13         Defined Contribution Dollar Limitation. $40,000 as adjusted under
Code Section 415(d).

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7.14         Employer. For purposes of this Article, Employer shall mean the
Employer that adopts this Plan and all members of a controlled group of
corporations (as defined in Section 414(b) of the Code as modified by
Section 415(h)), all trades or business under common control (as defined in Code
Section 414(c) as modified by Section 415(h) of the Code), or all members of an
affiliated service group (as defined in Code Section 414(m) of the Code) of
which the Employer is a part, and any other entity required to be aggregated
with the Employer pursuant to regulations promulgated under Code Section 414(o).

7.15         Excess Amount. The excess of the Participant’s Annual Additions for
the Limitation Year over the Maximum Permissible Amount.

7.16         Maximum Permissible Amount. The maximum Annual Addition that may be
contributed or allocated to a Participant’s Accounts under the Plan for any
Limitation Year shall not exceed the lesser of:

(i)            the Defined Contribution Dollar Limitation; or

(ii)          100 percent of the Participant’s Compensation for the Limitation
Year.

The Compensation limitation referred to in (ii) shall not apply to any
contribution for medical benefits (within the meaning of Section 401(h) or
Section 419A(f)(2) of the Code) which is otherwise treated as an Annual Addition
under Section 415(c)(1) or 419A(d)(2) of the Code.

If a short Limitation Year is created because of an amendment changing the
Limitation Year to a different 12-consecutive month period, the maximum
permissible amount will not exceed the Defined Contribution Dollar Limitation
multiplied by the following fraction:

Number of months in the short Limitation Year

12

ARTICLE VIII

PARTICIPANT ACCOUNTS AND VALUATION OF ASSETS

8.01        Participant Accounts. The Trustee shall establish and maintain a
401(k) Account, Match Contribution Account, Non-Elective Employer Contribution
Account, Regular Account, Rollover Account, Tax Deductible Contribution Account
and Voluntary Contribution Account for each Participant, when appropriate, to
account for the Participant’s Accrued Benefit. All contributions by or on behalf
of a Participant shall be deposited to the appropriate Account.

 

The Plan Administrator shall instruct the Trustee to credit all appropriate
amounts to each Participant’s Accounts. The Plan Administrator shall keep
records, which shall include the Account balances of each Participant.

8.02         Valuation of Trust Fund. As of each Valuation Date the Trustee
shall determine (or cause to be determined) the net worth of the assets of the
Trust Fund and report such value to the Plan Administrator in writing. In
determining such net worth, the Trustee shall evaluate the assets of the Trust
Fund at their fair market value as of such Valuation Date. In making any such
valuation of the Trust Fund, the Trustee shall not include any contributions
made by the Employer, which have not been allocated to Participant Accounts
prior to such Valuation Date.

ARTICLE IX

401(k) ALLOCATION LIMITATIONS

9.01         Definitions. For purposes of this Article, the following
definitions shall be used:

(a)           “Actual Deferral Percentage” or “ADP” means the ratio (expressed
as a percentage) of Salary Reduction Contributions, other than Catch-up
Contributions, made on behalf of an Eligible Participant to that Participant’s
Compensation for the Plan Year. Two Actual Deferral Percentages shall be
calculated and used, one including and the second excluding any Salary Reduction
Contributions that are included in the Contribution Percentage of the
Participant as defined in Plan Section 10.01(b). The Plan Administrator may
include 100% vested and non-forfeitable Match Contributions made for the
Participant for the Plan Year in the above described numerator, if such
inclusion is made on a uniform nondiscriminatory basis for all Participants;
however, Match Contributions that are included in the Actual Deferral Percentage
of the Participant may not be included in the numerator of the Contribution
Percentage of the Participant as defined in Section 10.01(b). To be considered
as contributed for a given Plan Year for purposes of inclusion in a given Actual
Deferral Percentage, Contributions must be made by the end of the 12-month
period immediately following the Plan Year to which the contribution relates.

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For Plan Years beginning on or after January 1, 2006, if one or more other plans
allowing contributions under Code Section 401(k) are considered with this Plan
as one for purposes of Code Section 401(a)(4) or 410(b), the Actual Deferral
Percentages for all Eligible Employees under all such plans shall be determined
as if this Plan and all such other plans were one; provided that for Plan Years
beginning on and after January 1, 2006 the requirements of Treasury Regulation
section 1.401(k)-1(b)(4)(iii)(B) are met.

 

If any Highly Compensated Employee is an Eligible Employee in one or more other
plans maintained by the same employer, which allow contributions under Code
Section 401(k), the Actual Deferral Percentage for that Employee shall be
determined as if this Plan and all such other plans were one; if such plans have
different plan years, all contributions that are made under all such plans
during the plan year being tested shall be aggregated, without regard to the
plan years of the other plans. However, for Plan Years beginning before
January 1, 2006, if the plans have different Plan Years, then all such cash or
deferred arrangements ending with or within the same calendar year shall be
treated as a single arrangement. For Plan Years beginning on or after January 1,
2006, notwithstanding the foregoing, certain plans shall be separate if
mandatorily disaggregated under the regulations of Code Section 401(k).

(b)           “Average Actual Deferral Percentage” means the average (expressed
as a percentage) of the Actual Deferral Percentages of a group.

(c)           “Excess 401(k) Contributions” means with respect to any Plan Year,
the excess of: (i) the aggregate amount of Employer contributions actually taken
into account in computing the Actual Deferral Percentages of Highly Compensated
Employees for such Plan Year, over (ii) the maximum amount of such contributions
permitted by the Actual Deferral Percentage Test (determined by hypothetically
reducing the numerators of Highly Compensated Employees in order of their Actual
Deferral Percentages beginning with the highest of such percentages).

(d)           “Excess Elective Deferrals” means those Salary Reduction
Contributions of a Participant that either (1) are made during the Participant’s
taxable year and exceed the dollar limitation under Code Section 402(g)
(including, if applicable, the dollar limitation on Catch-up Contributions
defined in Code Section 414(v)) for such year; or (2) are made during a calendar
year and exceed the dollar limitation under Code Section 402(g) (including, if
applicable, the dollar limitation on Catch-up Contributions defined in Code
Section 414(v)) for the Participant’s taxable year beginning in such calendar
year, counting only Salary Reduction Contributions made under this Plan and any
other 401(k) qualified retirement plan, contract or arrangement maintained by
the Employer.

9.02         Average Actual Deferral Percentage Tests.  

(a)          For Plan Years beginning on or after January 1, 2009, the Plan will
be treated as meeting the actual deferral percentage test set forth in Code
Section 401(k)(3)(A)(ii) in each Plan Year with respect to which the Qualified
Automatic Contribution Arrangement provisions of this Plan remain in effect.

 

(b)          For Plan Years beginning before January 1, 2009, the Average Actual
Deferral Percentage for Highly Compensated Employees for each Plan Year compared
to the Average Actual Deferral Percentage for Non-Highly Compensated Employees
for the Plan Year must satisfy one of the following tests:

(i)            The Average Actual Deferral Percentage for Eligible Employees who
are Highly Compensated Employees for the Plan Year shall not exceed the Average
Actual Deferral Percentage for Non-Highly Compensated Employees for the Plan
Year multiplied by 1.25; or

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

A Participant is a Highly Compensated Employee for a particular Plan Year if he
or she meets the definition of a Highly Compensated Employee in effect for that
Plan Year. Similarly, a Participant is a Non-Highly Compensated Employee for a
particular Plan Year if he or she does not meet the definition of a Highly
Compensated Employee in effect for that Plan Year.

For Plan Years beginning on or after January 1, 1999, all eligible Non-Highly
Compensated Employees who have not met the age and service requirements of Code
Section 410(a)(1)(A), may be disregarded in performing the Average Actual
Deferral Percentage Tests as provided in Code Section 401(k)(3)(F) and the
Regulations thereunder.

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9.03         Refund of Excess 401(k) Contributions. For Plan Years beginning
before January 1, 2009, notwithstanding any other provision of this Plan except
Section 9.05, Excess 401(k) Contributions, as adjusted for gain or loss,
including for the Plan Year ended December 31, 2007, an adjustment for income
for the period between the end of the Plan Year and the date of the distribution
(the “gap period”), shall be distributed no later than the last day of each Plan
Year to Participants to whose Accounts such Excess 401(k) Contributions were
allocated for the preceding Plan Year. The Plan Administrator has the discretion
to determine and allocate income using any of the methods set forth below:

(a)           Reasonable method of allocating income. The Plan Administrator may
use any reasonable method for computing the income allocable to Excess 401(k)
Contributions, provided that the method does not violate Code section 401(a)(4),
is used consistently for all Participants and for all corrective distributions
under the Plan for the Plan Year, and is used by the Plan for allocating income
to Participant’s Accounts. A Plan will not fail to use a reasonable method for
computing the income allocable to Excess 401(k) Contributions merely because the
income allocable to Excess 401(k) Contributions is determined on a date that is
no more than seven (7) days before the distribution.

 

(b)          Alternative method of allocating income. The Plan Administrator may
allocate income to Excess 401(k) Contributions for the Plan Year by multiplying
the income for the Plan Year allocable to the Salary Reduction Contributions and
other amounts taken into account for the purposes of the Average Actual Deferral
Percentage Tests (set forth in Section 9.02) including contributions made for
the Plan Year, by a fraction, the numerator of which is the Excess 401(k)
Contributions for the Participant for the Plan Year, and the denominator of
which is the sum of the:

(i)            Account balance attributable to Salary Reduction Contributions
and other amounts taken into account for the purposes of the Average Actual
Deferral Percentage Tests (set forth in Section 9.02) as of the beginning of the
Plan Year, and

(ii)           Any additional amount of such contributions made for the Plan
Year.

(c)           Safe harbor method of allocating gap period income. The Plan
Administrator may use the safe harbor method in this paragraph to determine
income on excess contributions for the gap period. Under this safe harbor
method, income on Excess 401(k) Contributions for the gap period is equal to ten
percent (10%) of the income allocable to Excess 401(k) Contributions for the
Plan Year that would be determined under paragraph (b) above, multiplied by the
number of calendar months that have elapsed since the end of the Plan Year. For
purposes of calculating the number of calendar months that have elapsed under
the safe harbor method, a corrective distribution that is made on or before the
fifteenth (15th) day of a month is treated as made on the last day of the
preceding month and a distribution made after the fifteenth day of a month is
treated as made on the last day of the month.

(d)          Alternative method for allocating Plan Year and gap period income.
The Plan Administrator may determine the income for the aggregate of the Plan
Year and the gap period, by applying the alternative method provided by
paragraph (b) above to this aggregate period. This is accomplished by
(1) substituting the income for the Plan Year and the gap period, for the income
for the Plan Year, and (2) substituting the amounts taken into account for the
purposes of the Average Actual Deferral Percentage Tests (set forth in
Section 9.02) for the Plan Year and the gap period, for the amounts taken into
account for the purposes of the Average Actual Deferral Percentage Tests (set
forth in Section 9.02) for the Plan Year in determining the fraction that is
multiplied by that income.

Excess 401(k) Contributions are allocated to the Highly Compensated Employees
with the largest dollar amounts of Employer contributions taken into account in
calculating the Actual Deferral Percentage test for the year in which the excess
arose, beginning with the Highly Compensated Employee with the largest dollar
amount of such Employer contributions and continuing in descending order until
all the Excess 401(k) Contributions have been allocated. For purposes of the
preceding sentence, the “largest amount” is determined after distribution of any
Excess 401(k) Contributions.

The Plan Administrator shall make every effort to make all required
distributions and forfeitures within 2 1/2 months of the end of the affected
Plan Year; however, in no event shall such distributions be made later than the
end of the following Plan Year. Distributions and forfeitures made later than
2 1/2 months after the end of the affected Plan Year will be subject to tax
under Code Section 4979.

All forfeitures arising under this Section shall be applied as specified in
Section 4.06 of the Plan and treated as arising in the Plan Year after that in
which the Excess 401(k) Contributions were made; however, no forfeitures arising
under this Section shall be allocated to the Account of any affected Highly
Compensated Employee.

Excess 401(k) Contributions shall be treated as Annual Additions under the Plan.

For a period of four 12-month periods beginning from the given Plan Year, or
such other period as the Secretary of the Treasury may designate, the Employer
shall maintain records showing what contributions and Compensation were used to
satisfy this Section and Section 9.02.

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9.04         Accounting for Excess 401(k) Contributions. For Plan Years
beginning before January 1, 2009, Excess 401(k) Contributions allocated to a
Participant shall be distributed from the Participant’s 401(k) Account and Match
Contribution Account (if applicable) in proportion to the Participant’s Salary
Reduction Contributions and Employer Match Contributions (to the extent used in
the Actual Deferral Percentage Test) for the Plan Year.

9.05         Special Contributions. This section shall be effective for Plan
Years beginning on and after January 1, 2006 and before January 1, 2009.

(a)          Correction by Employer Contribution. Notwithstanding any other
provisions of this Plan except Section 9.09, in lieu of distributing Excess
401(k) Contributions as provided in Section 9.03, the Employer may make 401(k)
Employer Contributions on behalf of Non-Highly Compensated Employees that are
sufficient to satisfy either of the Average Actual Deferral Percentage Tests. If
a failed Average Actual Deferral Percentage Test is to be corrected by making
such contributions, then any such corrective contribution made on behalf of any
Non-Highly Compensated Employees shall not exceed the targeted contribution
limits set forth below, or in the case of a corrective contribution that is a
Qualified Matching Contribution, the targeted contribution limit of
Section 10.05.

 

(b)          Targeted Contribution Limit. Qualified Nonelective Contributions
(as defined in Treasury Regulation section 1.401(k)-6) cannot be taken into
account in determining the “actual deferral ratio” (ADR) for a Plan Year for a
Non- Highly Compensated Employee (NHCE) to the extent such contributions exceed
the product of that NHCE’s Code Section 414(s) compensation and the greater of
five percent (5%) or two (2) times the Plan’s “representative contribution
rate.” Any Qualified Nonelective Contribution taken into account under an
Average Contribution Percentage Test under Treasury Regulation
Section 1.40l(m)-2(a)(6) (including the determination of the representative
contribution rate for purposes of Treasury Regulation section
1.401(m)-2(a)(6)(v)(B)), is not permitted to be taken into account for purposes
of this Section (including the determination of the “representative contribution
rate” under this Section). For purposes of this Section:

(i)            The Plan’s “representative contribution rate” is the lowest
“applicable contribution rate” of any eligible NHCE among a group of eligible
NHCEs that consists of half of all eligible NHCEs for the Plan Year (or, if
greater, the lowest “applicable contribution rate” of any eligible NHCE who is
in the group of all eligible NHCEs for the Plan Year and who is employed by the
Employer on the last day of the Plan Year), and

(ii)          The “applicable contribution rate” for an eligible NHCE is the sum
of the Qualified Matching Contributions (as defined in Treasury Regulation
section 1.401(k)-6) taken into account in determining the ADR for the eligible
NHCE for the Plan Year and the Qualified Nonelective Contributions made for the
eligible NHCE for the Plan Year, divided by the eligible NHCE’s Code
Section 414(s) compensation for the same period.

Qualified Matching Contributions may only be used to calculate an ADR to the
extent that such Qualified Matching Contributions are matching contributions
that are not precluded from being taken into account under the Average
Contribution Percentage Test for the Plan Year under the rules of Treasury
Regulation section 1.401(m)-2(a)(5)(ii) and as set forth in Section 10.02 of
this Plan.

(c)          Limitation on QNEC’s and QMAC’s. Qualified Nonelective
Contributions (as defined in Treasury Regulation section 1.401(k)-6) and
Qualified Matching Contributions (as defined in Treasury Regulation section
1.401(k)-6) cannot be taken into account to determine an Actual Deferral
Percentage to the extent such contributions are taken into account for purposes
of satisfying any other Average Actual Deferral Percentage Test, any Average
Contribution Percentage Test, or the requirements of Treasury Regulation section
1.401(k)-3, 1.401(m)-3, or 1.401(k)-4.

9.06         Maximum Salary Reduction Contributions. No Employee shall be
permitted to have Salary Reduction Contributions made under this Plan, other
than Catch-up Contributions, during any calendar year in excess of $7,000 (or
such other amount as is designated by the Secretary of the Treasury as the limit
under Code Section 402(g).

 

9.07         Participant Claims. Participants under other plans described in
Code Sections 401(k), 408(k) or 403(b) may submit a claim to the Plan
Administrator specifying the amount of their Excess Elective Deferral. Such
claim shall: (i) be in writing; (ii) be submitted no later than March 1 of the
year after the Excess Elective Deferral was made; and (iii) state that such
amount, when added to amounts deferred under other plans described in Code
Sections 401(k), 408(k) or 403(b), exceeds $7,000 (or such other amount as the
Secretary of the Treasury may designate).

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9.08         Distribution of Excess Elective Deferrals. This section shall be
effective for Plan Years beginning on and after January 1, 2006. Notwithstanding
any other provision of this Plan, Excess Elective Deferrals adjusted for
allocable income (gain or loss), including an adjustment for income for the
period between the end of the Plan Year and the date of the distribution (the
“gap period”) shall be distributed to the affected Participant no later than the
April 15 following the calendar year in which such Excess Elective Deferrals
were made. Notwithstanding the forgoing, for Plan Years beginning after
December 31, 2007, the requirement that Excess Elective Deferrals be adjusted
for allocable income (gain or loss) during gap period income pursuant to Code
Section 402(g)(2)(A)(ii) shall no longer apply.

For the purpose of this section, “income” shall be determined and allocated in
accordance with the provisions of Section 9.03 of this Plan, except that such
section shall be applied (i) by substituting the term “Excess Elective
Deferrals” for “Excess 401(k) Contributions” therein, (ii) by ignoring
references to “and other amounts taken into account for the purposes of the
Average Actual Deferral Percentage Tests (set forth in Section 9.02)”, (iii) by
substituting “Excess Elective Deferrals for the taxable year” for “the amounts
taken into account under the Average Actual Deferral Percentage Tests for the
Plan Year” and (iv) by ignoring the reference to the “Alternative method for
allocating Plan Year and gap period income”.

No distribution of an Excess Elective Deferral shall be made unless the
correcting distribution is made after the date on which the Plan received the
Excess Elective Deferral and both the Participant and the Plan designates the
distribution as a distribution of an Excess Elective Deferral.

Notwithstanding any provision of this Plan to the contrary, any Match
Contributions plus earnings that are attributable to any Excess Elective
Deferrals that have been refunded shall be forfeited. All such forfeitures shall
be treated as arising in the Plan Year after that in which the refunded Excess
Deferrals were made and shall be used to reduce future Employer Match
Contributions.

9.09         Operation in Accordance With Regulations. The determination and
treatment of Actual Deferral Percentages and Excess 401(k) Contributions, and
the operation of the Average Actual Deferral Percentage Test shall be in
accordance with such additional requirements as may be prescribed by the
Secretary of the Treasury.

 

ARTICLE X

401(m) ALLOCATION LIMITATIONS

For Plan Years beginning on or after January 1, 2009, the Plan will be treated
as meeting the actual contribution percentage test set forth in Code
Section 401(m)(2) in each Plan Year with respect to which the Qualified
Automatic Contribution Arrangement provisions of this Plan remain in effect. The
following provisions of this Article shall apply with respect to Plan Years
prior to January 1, 2009 unless otherwise noted.

10.01       Definitions. For purposes of this Article, the following Definitions
shall be used:

(a)           “Average Contribution Percentage” means the average (expressed as
a percentage) of the Contribution Percentages of a group.

(b)           “Contribution Percentage” means the ratio (expressed as a
percentage) of: the Employer Match and Voluntary After Tax Contributions made on
behalf of the Participant to the Participant’s Compensation for the Plan Year.
For Plan Years beginning on and after January 1, 2006, Salary Reduction
Contributions (other than Catch-up Contributions) made on behalf of Participants
who are Non-Highly Compensated Employees which could be used to satisfy the Code
Section 401(k)(3) limits (set forth in Section 9.02(b) hereof) but are not
necessary to be taken into account in order to satisfy such limits, may instead
be included in the above described numerator, to the extent permitted by
Treasury Regulation Section 1.401(m)-2(a)(6). To be considered as contributed
for a given Plan Year for purposes of inclusion in a given Average Contribution
Percentage, Contributions must be made by the end of the 12-month period
immediately following the Plan Year to which the contribution relates. The Plan
Administrator may not include Employer Match Contributions in the numerator to
the extent such contributions are included in the Actual Deferral Percentage of
the Participant, as defined in Section 9.01(a), and may not include Salary
Reduction Contributions unless Section 9.02 can be satisfied by both including
and excluding such Salary Reduction Contributions.

For Plan Years beginning on or after January 1, 2006, if one or more other Plans
allowing contributions under Code Section 401(k), voluntary after tax
contributions or employer match contributions are considered with this Plan as
one for purposes of Code Section 401(a)(4) or 410(b), the Contribution
Percentages for all Eligible Employees under all such plans shall be determined
as if this Plan and all such others were one; provided that for Plan Years
beginning on and after January 1, 2006 the requirements of Treasury Regulation
section 1.401(m)-1(b)(4)(iii)(B) are met.

 

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If any Highly Compensated Employee is an eligible to participate in one or more
other plans maintained by the same employer, which allow contributions under
Code Section 401(k), voluntary after tax contributions or employer match
contributions, the Contribution Percentage for that Employee shall be determined
as if this Plan and all such other plans were one; if such plans have different
plan years, all contributions that are made under all such plans during the plan
year being tested shall be aggregated, without regard to the plan years of the
other plans. However, for Plan Years beginning before January 1, 2006, if the
plans have different plan years, then all such plans having plan years ending
with or within the same calendar year shall be treated as a single arrangement.
Notwithstanding the foregoing, certain plans shall be separate if mandatorily
disaggregated under the regulations of Code Section 401(m).

For Plan Years beginning January 1, 1999 and thereafter, all eligible Non-
Highly Compensated Employees who have not met the age and service requirements
of section 410(a)(1)(A), may be disregarded in performing the Average
Contribution Percentage Tests as provided in Code Section 401(m)(5)(C).

Notwithstanding the foregoing, in determining a Participant’s Contribution
Percentage Employer Match Contributions shall not include Match Contributions
forfeited because they were attributable to Excess 401(k) Contributions or to
Excess Elective Deferrals.

(c)           “Excess 401(m) Contributions” means with respect to any Plan Year,
the excess of: (1) the aggregate Contribution Percentage amounts taken into
account in computing the numerator of the Contribution Percentage actually made
on behalf of Highly Compensated Employees for such Plan Year; over (2) the
maximum Contribution Percentage amounts permitted by the Average Contribution
Percentage test (determined by hypothetically reducing the numerators of Highly
Compensated Employees in order of their Contribution Percentages beginning with
the highest of such Percentages).

10.02       Average Contribution Percentage Tests. The Average Contribution
Percentage for Highly Compensated Employees for each Plan Year compared to the
Average Contribution Percentage for Non-Highly Compensated Employees for the
Plan Year must satisfy one of the following tests:

(i)            The Average Contribution Percentage for Eligible Employees who
are Highly Compensated Employees for the Plan Year shall not exceed the Average
Contribution Percentage for Non-Highly Compensated Employees for the Plan Year
multiplied by 1.25; or

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

10.03       Refund and Forfeiture of Excess 401(m) Contributions. For Plan Years
beginning on or after January 1, 2006, notwithstanding any other provision of
this Plan except Sections 10.05 and 10.06, Excess 401(m) Contributions adjusted
for allocable income (gain or loss), including an adjustment for income for the
period between the end of the Plan Year and the date of the distribution (the
“gap period”) shall be distributed to affected Highly Compensated Employees.
Notwithstanding the forgoing, for Plan Years beginning after December 31, 2007,
the requirement that Excess 401(m) Contributions be adjusted for gap period
income shall no longer apply.

For the purpose of this section, “income” shall be determined and allocated in
accordance with the provisions of Section 9.03 of this Plan, except that such
section shall be applied (i) by substituting the term “Excess 401(m)
Contributions” for “Excess 401(k) Contributions” therein, and (ii) by
substituting amounts taken into account for the purposes of the Average
Contribution Percentage Tests for amounts taken into account for the purposes of
the Average Actual Deferral Percentage Tests.

The Plan Administrator shall make every effort to refund all Excess 401(m)
Contributions within 2 1/2 months of the end of the affected Plan Year; however,
in no event shall Excess 401(m) Contributions be refunded later than the end of
the following Plan Year. Distributions made later than 2 1/2 months after the
end of the affected Plan Year will be subject to tax under Code Section 4979.

Notwithstanding any provision of this Plan to the contrary, any Match
Contributions plus earnings that are attributable to any Excess 401(m)
Contributions that have been refunded shall be forfeited. All such forfeitures
shall be treated as arising in the Plan Year after that in which the refunded
Excess 401(m) Contributions were made and shall be used to reduce future
Employer Match Contributions.

For a period of four 12-month periods beginning from the given Plan Year, or
such other period as the Secretary of the Treasury may designate, the Employer
shall maintain records showing what contributions and compensation were used to
satisfy this Section and Section 10.02.

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10.04       Accounting for Excess 401(m) Contributions. Excess 401(m)
Contributions allocated to a Participant shall be forfeited, if forfeitable or
distributed on a pro-rata basis from the Participant’s Voluntary After Tax
Contribution Account, 401(k) Account and Match Contribution Account.

10.05       Special 401(k) Employer Contributions. For Plan Years beginning on
and after January 1, 2006:

(a)          Correction by Employer Contribution. Notwithstanding any other
provisions of this Plan except Section 10.07, in lieu of refunding Excess 401(m)
Contributions as provided in Section 10.03, the Employer may make 401(k)
Employer Contributions on behalf of Non-Highly Compensated Employees that are
sufficient to satisfy the Average Contribution Percentage test. If a failed
Average Contribution Percentage Test is to be corrected by making such
contributions, then any such corrective contribution made on behalf of any
Non-Highly Compensated Employees shall not exceed the targeted contribution
limits set forth below.

(b)          Targeted Matching Contribution Limit. A Match Contribution with
respect to a Salary Reduction Contribution for a Plan Year is not taken into
account under the Actual Contribution Percentage Test for a NHCE to the extent
it exceeds the greatest of:

(i)             five percent (5%) of the NHCE’s Code Section 414(s) compensation
for the Plan Year;

(ii)            the NHCE’s Salary Reduction Contributions for the Plan Year; and

(iii)           the product of two (2) times the Plan’s “representative matching
rate” and the NHCE’s Salary Reduction Contributions for the Plan Year.

For purposes of this Section, the Plan’s “representative matching rate” is the
lowest “matching rate” for any eligible NHCE among a group of NHCEs that
consists of half of all eligible NHCEs in the Plan for the Plan Year who make
Salary Reduction Contributions for the Plan Year (or, if greater, the lowest
“matching rate” for all eligible NHCEs in the Plan who are employed by the
Employer on the last day of the Plan Year and who make Salary Reduction
Contributions for the Plan Year).

For purposes of this Section, the “matching rate” for an Employee generally is
the matching contributions made for such Employee divided by the Employee’s
Salary Reduction Contributions for the Plan Year. If the matching rate is not
the same for all levels of Salary Reduction Contributions for an Employee, then
the Employee’s “matching rate” is determined assuming that an Employee’s Salary
Reduction Contributions are equal to six percent (6%) of Code Section 414(s)
compensation.

(c)           Targeted QNEC limit. Qualified Nonelective Contributions (as
defined in Treasury Regulation section 1.40l(k)-6) cannot be taken into account
under the Actual Contribution Percentage Test for a Plan Year for a NHCE to the
extent such contributions exceed the product of that NHCE’s Code Section 414(s)
compensation and the greater of five percent (5%) or two (2) times the Plan’s
“representative contribution rate.” Any Qualified Nonelective Contribution taken
into account under an Actual Deferral Percentage Test under Treasury Regulation
section 1.401(k)-2(a)(6) (including the determination of the “representative
contribution rate” for purposes of Treasury Regulation section
1.401(k)-2(a)(6)(iv)(B)) is not permitted to be taken into account for purposes
of this Section (including the determination of the “representative contribution
rate” for purposes of subsection (i) below). For purposes of this Section:

(i)            The Plan’s “representative contribution rate” is the lowest
“applicable contribution rate” of any eligible NHCE among a group of eligible
NHCEs that consists of half of all eligible NHCEs for the Plan Year (or, if
greater, the lowest “applicable contribution rate” of any eligible NHCE who is
in the group of all eligible NHCEs for the Plan Year and who is employed by the
Employer on the last day of the Plan Year), and

 

(ii)           The “applicable contribution rate” for an eligible NHCE is the
sum of the matching contributions (as defined in Treasury Regulation section
1.401 (m)-l(a)(2)) taken into account in determining the “actual contribution
ratio” for the eligible NHCE for the Plan Year and the Qualified Nonelective
Contributions made for that NHCE for the Plan Year, divided by that NHCE’s Code
section 414(s) compensation for the Plan Year.

10.06       Order of Determinations. The determination of Excess 401(m)
Contributions shall be made after first determining Excess Elective Deferrals,
and then determining Excess 401(k) Contributions.

10.07       Operation in Accordance With Regulations. The determination and
treatment of Contribution Percentages and Excess 401(m) Contributions, and the
operation of the Average Contribution Percentage Test shall be in accordance
with such additional requirements as may be prescribed by the Secretary of the
Treasury.

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ARTICLE XI

IN-SERVICE WITHDRAWALS

11.01       Withdrawals from Tax Deductible Contribution or Voluntary
Contribution Accounts. A Participant shall have the right at any time to request
the Plan Administrator for a withdrawal in cash of amounts in his or her Tax
Deductible Contribution Account or Voluntary Contribution Account.

11.02       Withdrawals from Match Contribution, 401(k) and Non-Elective
Employer Contribution Accounts. At any time after a Participant attains Age
59 1/2 or is Totally and Permanently Disabled, a Participant shall have the
right to request the Plan Administrator for a withdrawal in cash of amounts from
the vested portion of his or her Match Contribution or 401(k) Account. During
the period beginning January 1, 2004 and ending April 27, 2010 and on and after
the date of the compliance letter issued by the Internal Revenue Service in
response to the voluntary correction compliance submission (filed by the Plan
Sponsor October 29, 2010) that approves the amendment adding this sentence to
the Plan, a Participant who has attained age 591/2 or is Totally and Permanently
Disabled may also withdraw any part or all of the vested portion of his or her
Non-Elective Employer Contribution Account. For Plan Years beginning after 1988,
a Participant shall have the right at any time to request the Plan Administrator
for a withdrawal in cash of Salary Reduction Contributions, with earnings
accrued thereon as of December 31, 1988 for “financial hardship”. For Plan Years
beginning after 1991, financial hardship distributions may be increased by
401(k) Employer Contributions plus earnings thereon, as of December 31, 1988.

During the period beginning on November 10, 2008 and ending May 26, 2010, a
Participant shall have the right to request the Plan Administrator for a
“financial hardship” withdrawal in cash which may be funded as provided for
above and with amounts from the vested portion of the Participant’s Match
Contribution and Non-Elective Employer Contribution Accounts; provided that in
the case of the Participant’s Match Contribution Account, any such withdrawal
shall be limited to amounts from the portion of the Participant’s Match
Contribution Account which is attributable to Match Contributions credited to
the Participant’s Match Contribution Account for the Plan Years ending
December 31, 2005, 2006, 2007, and 2008 as adjusted for earnings and losses.

The Plan Administrator shall determine whether an event constitutes a financial
hardship. Such determination shall be based upon non-discriminatory rules and
procedures, which shall be conclusive and binding upon all persons.

The processing of applications and any distributions of amounts under this
Section shall be made as soon as administratively feasible. The amount of a
distribution based upon “financial hardship,” less any income and penalty taxes,
cannot exceed the amount required to meet the immediate financial need created
by the hardship and not reasonably available from other resources of the
Participant.

In determining whether a hardship distribution is permissible the following
special rules shall apply:

(i)            The following are the only financial needs considered immediate
and heavy: deductible medical expenses (whether incurred or necessary to obtain
medical care)(within the meaning of Section 213(d) of the Code) of the Employee,
the Employee’s spouse, children, or dependents (within the meaning of Code
Section 152); the purchase (excluding mortgage payments) of a principal
residence for the Employee; payment of tuition, related educational fees, and
room and board expenses for the next twelve months of post-secondary education
for the Employee, the Employee’s spouse, children or dependents; or the need to
prevent the eviction of the Employee from, or a foreclosure on the mortgage of,
the Employee’s principal residence.

(ii)            A distribution will be considered as necessary to satisfy an
immediate and heavy financial need of the Employee only if:

A.            The Employee has obtained all distributions, other than hardship
distributions, and all nontaxable loans under all plans maintained by the
Employer;

 

B.            All plans maintained by the Employer provide that the Employee’s
Salary Reduction Contributions (and any other Employee contributions) will be
suspended for six months (twelve months for hardship distributions made prior to
January 1, 2002) after the receipt of the hardship distribution; provided that
in the case of an Eligible Participant, Automatic Contributions shall resume at
the end of such suspension period subject to the provisions of Section 5.05 of
the Plan;

C.            The distribution, less any income and penalty taxes, is not in
excess of the amount of an immediate and heavy financial need; and

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D.            In addition for hardship distributions made before 2002, all plans
maintained by the Employer provide that the Employee may not make Salary
Reduction Contributions for the Employee’s taxable year immediately following
the taxable year of the hardship distribution in excess of the applicable limit
under Section 402(g)(1) of the Code for such taxable year less the amount of
such Salary Reduction Contributions for the taxable year of the hardship
distribution.

11.03       Withdrawals from Regular or Rollover Accounts. Once a Participant
has participated in the Plan for two years, at any time thereafter the
Participant shall have the right at any time to request the Plan Administrator
for a withdrawal in cash of amounts allocated to his or her Rollover Account.
For Plan Years beginning January 1, 1999, and thereafter, the Participant may
request a withdrawal of cash amounts allocated to his or her Rollover Account
immediately upon the Trustee’s receipt of such Rollover Contribution. Once a
Participant’s Regular Account is 100% vested the Participant shall have the
right at any time to request the Plan Administrator for a withdrawal in cash of
amounts allocated to such Account; provided,  however, that unless the
Participant is over Age 59 1/2 or is Permanently and Totally Disabled, the
amount subject to withdrawal shall not include amounts attributable to
contributions made to the Regular Account during the two-year period preceding
the date of payment.

11.04       Rules for In-Service Withdrawals. The Plan Administrator may impose
a dollar minimum for partial withdrawals. If the amount in the Participant’s
appropriate Account is less than the minimum, the Plan Administrator shall pay
the Participant the entire amount then in the Participant’s Account from which
the withdrawal is to be made if a withdrawal of the entire amount is otherwise
permissible under the rules set forth in this Article. If the entire amount
cannot be paid under such rules, whatever amount is permissible shall be paid.

 

In the case of a withdrawal from a Rollover Account described in Section 13.03,
if necessary to comply with the joint and survivor rules of Code Sections
401(a)(11) and 417, the Plan Administrator shall require the consent of any
Participant’s spouse before making any in-service withdrawal. Any such consent
shall satisfy the requirements of Section 13.08.

Any amount to be withdrawn shall be payable as of the Valuation Date coincident
with or next following the date which is 15 days following receipt of the
written request by the Plan Administrator.

ARTICLE XII

PLAN LOANS

12.01       General Rules. Upon the application of any Participant, Beneficiary
or, for Plan Years beginning prior to January 1, 1999, an alternate payee
entitled to Plan benefits pursuant to a Qualified Domestic Relations Order, the
Plan Administrator may enter into a loan agreement with such person and
authorize the Trustee to make a loan pursuant thereto. The amount of any such
loan and the provisions for its repayment shall be in accordance with such
non-discriminatory rules and procedures as are adopted by the Plan Administrator
and uniformly applied to all borrowers. Such written procedures shall be part of
this Plan document.

Applications for loans will be made to the Plan Administrator using forms
provided by the Plan Administrator. Loan applications meeting the requirements
of this Article will be granted and all borrowers must execute a promissory note
meeting the requirements of this Article.

Plan loans shall be granted on a uniform nondiscriminatory basis, so that they
are available to all borrowers on a reasonably equivalent basis and are not made
available to highly compensated Employees or officers of the Employer in an
amount greater than the amount made available to other Employees. Loans will be
made available to Former Participants to the extent required by regulations
issued by the Department of Labor under Section 408(b) of ERISA and to other
Former Participants as is needed to satisfy Code Section 401(a)(4) and the
Regulations promulgated thereunder. Such loans shall be adequately secured,
shall bear a reasonable rate of interest and shall provide for periodic
repayment over a reasonable period of time, all in accordance with the Plan
Administrator’s rules and procedures for Plan loans.

To the extent required under Code Sections 401(a)(11) and 417 and the
Regulations promulgated thereunder, a Participant must obtain the consent of his
or her spouse, if any, within the 90-day period (180-day period for Plan Years
beginning January 1, 2007 and thereafter) before the time the Participant’s
Accrued Benefit is used as security for a Plan loan. A new consent is required
if the Accrued Benefit is used for any increase in the amount of security. The
consent shall comply with the requirements of Section 417 of the Internal
Revenue Code, but shall be deemed to meet any requirements contained in such
section relating to the consent of any subsequent spouse.

 

Tax Deductible Voluntary Contributions, plus earnings thereon, may not be used
as security for Plan loans.

The Plan Administrator may not require a minimum loan amount greater than
$1,000.

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No loan shall be made to the extent such loan when added to the outstanding
balance of all other loans to the borrower would exceed one-half ( 1/2) of the
present value of the nonforfeitable Accrued Benefit of the borrower under the
Plan (but not more than $50,000 reduced by the difference between the highest
outstanding balance during the previous 365 days and the current outstanding
balance).

For purposes of calculating the above limitations, all loans and accrued
benefits from all plans of the Employer and other members of a group of
employers described in Code Sections 414(b), (c) and (m) are aggregated.

The Plan Administrator shall determine a reasonable rate of interest for each
loan by identifying the rate(s) charged for similar and equivalent commercial
loans by institutions in the business of making loans. No loan shall be granted
to any borrower or other person who already has a total of two loans or more
outstanding under this Plan or any other plan maintained by the Employer (or
five loans outstanding for Plan Years beginning before January 1, 1996) or who
is in default on any loan.

The Plan Administrator may direct the Trustee to deduct from a Participant’s
Accounts under the Plan a reasonable fee (as determined by the Committee) to
offset the cost of processing and administering the loan.

12.02       Loan Repayments. The borrower shall repay any loan in accordance
with the loan agreement. Loans shall provide for periodic repayment, with
payment to be no less frequent than quarterly over a period not to exceed five
(5) years; provided,  however, that loans used to acquire any dwelling unit
which, within a reasonable time, is to be used (determined at the time the loan
is made) as a principal residence of a Participant, may provide for periodic
repayment, with payment to be no less frequent than quarterly over a reasonable
period of time that exceeds five (5) years.

In the event the loan is not repaid within the time period prescribed, the Plan
Administrator shall direct the Trustee to deduct the total amount due and
payable, plus interest thereon, from distributable amounts in the borrower’s
Accounts. If distributable amounts in the borrower’s Accounts are not sufficient
to repay such amount, the Plan Administrator shall enforce the terms of any
agreement providing additional security for the loan and shall pursue such other
remedies available at law to collect the indebtedness.

In the event of a loan default, attachment of the borrower’s Accrued Benefit
will not occur until a distributable event occurs in the Plan. Default shall
occur upon the earlier of any uncured failure to make payments in accordance
with the promissory note or the death of the borrower.

 

Loan repayments will be suspended under this Plan as permitted under 414(u)(4)
of the Internal Revenue Code.

ARTICLE XIII

RETIREMENT, TERMINATION AND DEATH BENEFITS

13.01       Retirement or Termination from Service. The Accrued Benefit of each
Employee who was hired prior to December 2, 1986 and who became a Participant in
the Plan on or prior to January 1, 1989, shall be 100% vested and nonforfeitable
at all times. The Regular Account of Employees who are hired on or after
December 2, 1986 and who become Participants after December 31, 1988 shall vest
according to the following schedule:

 

 

 

Completed Years of Service

 

Vested
Percentage 

 

Less Than 2

0 

2.........................................................................................................

25 

3.........................................................................................................

50 

4.........................................................................................................

75 

5.........................................................................................................

100 

The Match Contribution and Non-Elective Employer Contribution Accounts of each
Employee who was hired after December 1, 1986 shall be 50% vested and
nonforfeitable after the completion of one Year of Service and 100% vested and
nonforfeitable after the completion of two Years of Service. Provided,  however,
that the Match Contribution and Non-Elective Employer Contribution Accounts of
such Employees shall be 100% vested and nonforfeitable at all times for such
Employees who completed at least one Hour of Service on or before December 31,
2004.

Any amendment to the above schedule shall comply with the requirements of
Section 19.03 of the Plan.

Notwithstanding the foregoing, each actively employed Participant’s Accrued
Benefit shall become 100% vested and nonforfeitable when the Participant attains
his or her Normal Retirement Age, dies, or becomes Totally and Permanently
Disabled.

The Salary Reduction Contributions, Employer Match Contributions contributed to
the Plan for Plan Years commencing prior to January 1, 2005, 401(k) Employer
Contributions, Tax Deductible Contributions and Voluntary After-Tax
Contributions of all Participants, plus earnings thereon, shall be 100% vested
and nonforfeitable at all times.

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Upon a Participant’s attainment of his or her Normal Retirement Age or
termination of employment, the Participant shall be entitled to a benefit that
can be provided by the value of his or her vested Accrued Benefit in accordance
with the further provisions of this Article.

The Plan Administrator shall notify the Trustee when the Normal Retirement Age
or termination of employment of each Participant shall occur and shall also
advise the Trustee as to the manner in which retirement or termination benefits
are to be distributed to a Participant, subject to the provisions of this
Article. Upon receipt of such notification and subject to the other provisions
of this Article, the Trustee shall take such action as may be necessary in order
to distribute the Participant’s vested Accrued Benefit.

For Plan Years beginning on or after January 1, 2006, a Participant whose
employment status changes from that of a common law employee to that of a
“leased employee” within the meaning of Code Section 414(n) shall not be
considered to have a severance from employment for the purposes of this section
and this Article of the Plan (unless the safe harbor plan requirements described
in Code Section 414(n)(5) are met).

13.02       Late Retirement Benefits. If a Participant shall continue in active
employment following his or her Normal Retirement Age, he or she shall continue
to participate under the Plan and Trust. Except as provided in Section 13.06,
upon actual retirement such Participant shall be entitled to a benefit that can
be provided by the value of his or her Accrued Benefit. Late Retirement benefits
shall be distributed in accordance with the further provisions of this Article.

13.03       Death Benefits. If a Participant or Former Participant shall die
prior to the commencement of any benefits otherwise provided under this Article
XIII, except as provided below, his or her Beneficiary shall be entitled to a
lump sum death benefit equal to the amount credited to the Participant’s Account
as of the date the Plan Administrator receives due proof of the Participant’s
death. In lieu of receiving benefits in a lump sum, a Beneficiary may elect to
receive benefits under any option described in Section 13.06; provided that
effective January 1, 2011, in lieu of receiving a lump sum death benefit, and
except with respect to amounts held in a Rollover Account as described below in
this Section, the Beneficiary of a Participant may only elect to receive
benefits under the installment payment option described in Section 13.06.

Notwithstanding anything in the Plan to the contrary, if a Participant or Former
Participant is married on the date of his or her death, Plan pre-retirement
death benefits will be paid to the Participant’s or Former Participant’s then
spouse unless such spouse has consented to payment to another Beneficiary, as
provided in Section 13.08.

Notwithstanding the first paragraph, if a Rollover Account is being maintained
for a married Participant who dies prior to the commencement of Plan benefits
and if any portion of the amount in the Rollover Account is attributable to
amounts transferred directly (or indirectly from another transferee Plan) to
this Plan from a defined benefit pension plan, from a money purchase pension
plan or from a stock bonus or profit sharing plan which would otherwise provide
for a life annuity form of payment to the Participant, the amount in the
Rollover Account will be used to purchase a life annuity for the Participant’s
spouse unless the Participant has requested that the Rollover Account be
distributed in a different form or be paid to another Beneficiary. Any such
request must be made during the election period, which shall begin on the first
day of the Plan Year in which the Participant attains Age 35 and shall end on
the date of the Participant’s death. If a Participant severs employment prior to
the first day of the Plan Year in which Age 35 is attained, with respect to the
value of the Rollover Account as of the date of separation, the election period
shall begin on the date of separation. Any such request must be consented to by
the Participant’s spouse. To be effective, the spousal consent must meet the
requirements of Section 13.08. Any annuity provided with a portion of
Participant’s Rollover Account in accordance with this paragraph shall be
payable for the life of the Participant’s spouse and shall commence on the date
the Participant would have attained Age 55 or, if the Participant was over Age
55 on the date of his or her death, such life annuity shall commence
immediately. For Plan Years beginning January 1, 1998 and thereafter, at the
request of the spouse, such Rollover Account may be used to purchase a life
annuity or may be taken in another form allowed under the Plan at an earlier or
later commencement date.

If a Participant shall die subsequent to the commencement of any benefit
otherwise provided under this Article XIII, the death benefit, if any, shall be
determined in accordance with the benefit option in effect for the Participant.

The Plan Administrator may require such proper proof of death and such evidence
of the right of any person to receive payment of the value of the Accounts of a
deceased Participant or a deceased Former Participant, as the Administrator
deems necessary. The Administrator’s determination of death and of the right of
any person to receive payment shall be conclusive and binding on all persons.

13.04       Death Benefits Under USERRA. Effective for deaths occurring on or
after January 1, 2007, in the case of a Participant who dies while performing
qualified military service as defined in Code Section 414(u), the survivors of
the Participant are entitled to any additional benefits (other than benefit
accruals relating to the period of qualified military service) provided under
the Plan had the Participant resumed and then terminated employment on account
of death.

13.05      Designation of Beneficiary. Each Participant shall designate his or
her Beneficiary on a form provided by the Plan Administrator, and such
designation may include primary and contingent beneficiaries; provided,
 however, that if a Participant or Former Participant is married on the date of
his or her death, the Participant’s then spouse shall be the Participant’s
Beneficiary unless such spouse consented to the designation of another
Beneficiary in accordance with

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Section 13.08. If a Participant does not designate a Beneficiary and is not
married at the date of his or her death, the estate of the Participant shall be
deemed to be the designated Beneficiary. For Plan Years beginning on and after
January 1, 2008, if a Participant completes or has completed a Beneficiary
designation in which the Participant designates his or her spouse as the
Beneficiary, and the Participant and the Participant’s spouse are legally
divorced subsequent to the date of such designation, then the designation of
such spouse as a Beneficiary hereunder will be deemed null and void unless the
Participant, subsequent to the legal divorce, reaffirms the designation by
completing a new Beneficiary designation form.

Effective for distributions made after June 9, 2009, a designated Beneficiary
will also include a non-spouse designated Beneficiary. For this purpose, a
non-spouse Designated Beneficiary means a Designated Beneficiary other than
(i) a surviving spouse (as defined in section 13.08) or (ii) a spouse or former
spouse who is an Alternate Payee under a Qualified Domestic Relations Order.

13.06       Distribution of Benefits. The Plan Administrator shall direct the
Trustee to make payment of any benefits provided under this Article XIII upon
the event giving rise to distribution of such benefit, or within 60 days
thereafter.

All distributions required under the Plan shall be determined and made in
accordance with Code Section 401(a)(9) and Regulations issued thereunder.

Unless the Participant elects otherwise, distribution of benefits will begin no
later than the 60th day after the latest of the close of the Plan Year in which:

(i)            the Participant attains Age 65;

(ii)           occurs the 10th anniversary of the year in which the Participant
commenced participation in the Plan; or,

(iii)          the Participant terminates service with the Employer.

Notwithstanding the foregoing, the failure of a Participant and spouse to
consent to a distribution when a benefit is immediately distributable, within
the meaning of Section 13.12 of the Plan, shall be deemed to be an election to
defer commencement of payment of any benefit sufficient to satisfy this Section
of the Plan. Except as provided in this Article, in no event will benefits begin
to be distributed prior to the later of Age 62 or Normal Retirement Age without
the consent of the Participant.

Except as provided below and in Sections 13.03, 13.07, 13.11 and 13.12, if
benefits become payable to a Participant as a result of termination of
employment or retirement, the Participant’s vested Accrued Benefit shall be
distributed by the Trustee in such manner as the Participant shall direct, in
accordance with one or more of the options listed below. Provided,  however,
that a married Participant may not elect an option involving a life contingency
without the consent of his or her spouse. To be effective, the spousal consent
must meet the requirements of Section 13.08

 

Notwithstanding the foregoing, if on the date of severance from employment of a
married Participant prior to the attainment of his or her Qualified Early
Retirement Age a Rollover Account as described in Section 13.03 is being
maintained for the Participant, such Account will remain in force until the
Former Participant attains Age 55 when, if the Former Participant is then
married, the value of such Rollover Account will be used to purchase a Qualified
Joint and Survivor Annuity for the benefit of the Former Participant and his or
her then spouse. At any time prior to the date of purchase, the Former
Participant may request that his or her Rollover Account be distributed under
one or more of the options listed below; provided,  however, that if the Former
Participant is married on the date of the request, the Former Participant’s then
spouse must consent thereto. To be effective, the spousal consent must meet the
requirements of Section 13.08. If a Former Participant who was married on the
date of his or her severance from employment is not married at Age 55, at Age 55
the Former Participant’s Rollover Account (as described in Section 13.03) shall
be distributed by the Trustee in such manner as the Former Participant shall
direct, in accordance with one or more of the options listed below. If a Former
Participant entitled to a deferred benefit pursuant to this paragraph dies prior
to Age 55 and prior to commencement of Plan benefits, his or her Beneficiary
shall be entitled to a death benefit pursuant to Section 13.03.

Prior to January 1, 2011, if a Qualified Joint and Survivor Annuity is not
required under the above rules or pursuant to Section 13.07, a Participant’s
Accrued Benefit shall be distributed by the Trustee in such manner as the
Participant shall elect, in accordance with one or more of the following methods
of distribution, which may be paid in cash or in kind, or a combination of them:

(i)            One lump sum payment.

(ii)           An annuity for the life of the Participant.

(iii)          An annuity for the joint lives of the Participant and his or her
spouse with 50%, 66 2/3%, 75% or 100% (whichever is specified when this option
is elected) of such amount payable as an annuity for life to the survivor. No
further benefits are payable after the death of both the Participant and his or
her spouse.

(iv)           An annuity for the life of the Participant with installment
payments for a period certain not longer than the life expectancy of the
Participant.

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(v)            Installment payments for a period certain not longer than the
life expectancy of the Participant and his or her spouse.

On and after January 1, 2011, the portion of the Participant’s Accrued Benefit
that is attributable to a Rollover Account as described in Section 13.03 shall
be distributed by the Trustee in such manner as the Participant shall elect, in
accordance with one or more of the above-described methods of distribution,
which may be paid in cash or in kind, or a combination of them; provided that an
in-kind distribution shall only be available with respect to an annuity contract
that is purchased by the Trustee at the time of distribution or shares of common
stock of The Hanover Insurance Group that are held in the Participant’s Account
at the time of distribution as represented by the Participant’s investment in
The Employer Stock Fund (defined in Section 16.02 of the Plan).

On and after January 1, 2011, the portion of the Participant’s Accrued Benefit
that is not attributable to a Rollover Account as described in Section 13.03
shall be distributed by the Trustee in such manner as the Participant shall
elect, in accordance with one or more of the following methods of distribution,
which may be paid in cash or in kind, or a combination of them; provided that an
in-kind distribution shall only be available with respect to shares of common
stock of The Hanover Insurance Group. Inc. that are held in the Participant’s
Account at the time of distribution as represented by the Participant’s
investment in The Employer Stock Fund (defined in Section 16.02 of the Plan):

(i)            One lump sum payment.

(ii)           Installment payments for a period certain not longer than the
life expectancy of the Participant and his or her spouse.

All optional forms of benefits shall be actuarially equivalent.

Notwithstanding anything in the Plan to the contrary, any annuity policy which
is distributed by the Trustee shall provide by its terms that the same shall not
be sold, transferred, assigned, discounted, pledged or encumbered in any way
except to or through the insurer, and then only in accordance with a right
conferred under the terms of the annuity policy.

Notwithstanding anything in the Plan to the contrary, the entire interest of a
Participant must be distributed or begin to be distributed no later than the
Participant’s Required Beginning Date.

The Required Beginning Date of a Participant is the first day of April of the
calendar year following the calendar year in which the Participant attains age
70 1/2;  provided,  however, that a Participant, who is not a Five Percent Owner
and who does not retire by the end of the calendar year in which such
Participant reaches age 70 1/2, may elect to defer their Required Beginning Date
to the first day of April of the calendar year following the calendar year in
which the Participant retires. If, after the date of such election, a
Participant becomes a Five Percent Owner, the Required Beginning Date is the
first day of April following the later of: (i) the calendar year in which the
Participant attains age 70 1/2; or (ii) the earlier of the calendar year with or
within which ends the Plan Year in which the Participant becomes a Five Percent
Owner, or the calendar year in which the Participant retires.

13.07       Automatic Joint and Survivor Annuity. Notwithstanding anything in
Section 13.06 to the contrary, if a Rollover Account as described in
Section 13.03 is being maintained for a married Participant and if Plan benefits
become payable to such Participant on or after the Participant’s Qualified Early
Retirement Age, such Rollover Account will be used to purchase a Qualified Joint
and Survivor Annuity unless the Participant has elected otherwise. To be
effective, any election out of a Qualified Joint and Survivor Annuity must be
consented to by the Participant’s spouse at the time Plan benefits become
payable. Any election (by a Participant on whose behalf a Rollover Account as
described in Section 13.03 is maintained) out of a Qualified Joint and Survivor
Annuity must be in writing and may be made during the election period, which
shall be the 90-day period (180-day period for Plan Years beginning January 1,
2007 and thereafter) ending on the annuity starting date.

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13.08       Participant Elections and Spousal Consents. Married Participants may
choose a Beneficiary other than their spouse or, in the case of a Rollover
Account described in Section 13.03, may choose a form of retirement benefit
other than a Qualified Joint and Survivor Annuity. Any Beneficiary designation
shall be in accordance with the requirements of Section 13.05. Any election (by
a Participant on whose behalf a Rollover Account as described in Section 13.03
is maintained) out of a Qualified Joint and Survivor Annuity must be in writing
and may be made during the election period, which shall be the 90-day period
(180-day period for Plan Years beginning January 1, 2007 and thereafter) ending
on the annuity starting date. To be effective, any designation of a Beneficiary
who is not the spouse of the Participant on the date of the Participant’s death
or any such election out of the Qualified Joint and Survivor Annuity must be
consented to by Participant’s spouse. For purposes of this Section the term
“spouse” means the lawful spouse of the Participant on the date of the
Participant’s death or on the date Plan benefits commence, whichever is
applicable; provided that a former spouse will be treated in the same manner as
a spouse to the extent provided under a Qualified Domestic Relations Order as
described in Code Section 414(p).

To be effective, spousal consent must be in writing on a form furnished by or
satisfactory to the Plan Administrator and witnessed by a Plan representative or
notary public. Provided,  however, spousal consent shall not be required under
such circumstances as may be prescribed by the Plan Administrator in accordance
with Rules and Regulations promulgated by the Secretary and the Treasury. Any
spousal consent will be valid only with respect to the spouse who signs the
consent. Additionally, a revocation of an election out of a Qualified Joint and
Survivor Annuity may be made by a Participant without the consent of the spouse
at any time before the commencement of benefits. The number of revocations shall
not be limited.

13.09       Distribution to a Minor Participant or Beneficiary. In the event a
distribution is to be made to a minor, then the Plan Administrator may, in the
Administrator’s sole discretion, direct that such distribution be paid to the
legal guardian of the minor, or if none, to a parent of such minor or a
responsible adult with whom the minor maintains his or her residence, or to the
custodian for such minor under the Uniform Gift to Minors Act, if such is
permitted by the laws of the state in which said minor resides. Such a payment
to the legal guardian or parent of a minor or to such a custodian shall fully
discharge the Trustee, Employer, and Plan from further liability on account
thereof.

 

13.10       Location of Participant or Beneficiary Unknown. In the event that
all, or any portion, of the distribution payable to a Participant or his or her
Beneficiary hereunder shall, at the expiration of five years after it shall
become payable, remain unpaid solely by reason of the inability of the Plan
Administrator, after sending a registered letter, return receipt requested, to
the payee’s last known address, and after reasonable effort, to ascertain the
whereabouts of such Participant or his or her Beneficiary, the amount so
distributable shall be forfeited and allocated in accordance with the terms of
this Plan. In the event a Participant or Beneficiary is located subsequent to
his or her benefit being forfeited, such benefit shall be restored.

13.11       Small Balances; Forfeitures; Restoration of Benefits Upon
Reemployment. If a Participant terminates from employment and the present value
of the Participant’s vested Accrued Benefit does not exceed (or at the time of
any prior distribution did not exceed) $3,500 ($5,000 for periods between
January 1, 1998 and March 27, 2005), except as provided in Section 13.14, for
distributions made prior to March 28, 2005, the Participant will receive a lump
sum distribution of the present value of the entire vested portion of such
Accrued Benefit and the non-vested portion will be forfeited and applied to
reduce Employer Match Contributions. Provided,  however, if a Rollover Account
described in Section 13.03 is being maintained for a Participant, no such
distribution may be made to the Participant after Age 55 unless the Participant
(and the spouse of the Participant) consents in writing to such distribution.
For purposes of this paragraph, for terminations occurring at any time
(including terminations occurring on or after March 28, 2005), if the value of
the Participant’s vested Accrued Benefit is zero, the Participant shall be
deemed to have received a distribution of such vested Accrued Benefit.

If a Participant terminates from employment and the present value of the
Participant’s vested Accrued Benefit exceeds $3,500 ($5,000 for periods between
January 1, 1998 and March 27, 2005), or any dollar amount if the distribution
would otherwise be made on or after March 28, 2005, the Participant’s vested
Accrued Benefit shall be deferred to the earliest of the Participant’s death,
Total and Permanent Disability or attainment of Normal Retirement Age, at which
time such vested benefit shall be payable in accordance with Sections 13.06 and
13.13. Notwithstanding the foregoing, such a Participant may elect to have
payments commence at any time after termination in accordance with
Section 13.06. Partial distributions of vested benefits will not be permitted
except in accordance with Section 13.06. The non-vested portion of the
Participant’s Accrued Benefit shall be forfeited when the Participant incurs
five consecutive One Year Breaks in Service or, if earlier, when the Participant
or his or her spouse (or surviving spouse) receives a distribution of his or her
vested Accrued Benefit.

Notwithstanding the above, the $5,000 amount shall apply to any Participant with
a vested Accrued Benefit on or after January 1, 1998 and before March 27, 2005;
including those Participants whose vested Accrued Benefit exceeded the prior
cash-out amount under the Plan. Further, in determining whether the vested
Accrued Benefit exceeds $5,000 for distributions made in accordance with this
Section on or after October 17, 2000, the look-back rule shall not apply, except
in the case of periodic distributions already in effect.

 

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Except as provided below, the non-vested portion of the Accrued Benefit of any
terminated Participant will be used to reduce Employer Match Contributions for
the Plan Year in which the forfeiture occurs and for subsequent Plan Years, if
necessary. A Participant who severs employment and who subsequently resumes
employment with the Employer will again become a Participant on the entry date
determined in accordance with Plan Section 3.01.

If a Former Participant is subsequently reemployed, the following rules shall
also be applicable:

(i)            If any Former Participant shall be reemployed by the Employer
before incurring five consecutive One Year Breaks in Service, and such Former
Participant had received a distribution of his or her vested Accrued Benefit
prior to his or her reemployment, his or her forfeited Account balance shall be
reinstated if he or she repays the full amount attributable to Employer
Contributions which was distributed to him or her, not including, at the
Participant’s option, amounts attributable to any Salary Reduction
Contributions. Such repayment must be made by the Former Participant before the
date on which the individual incurs five consecutive One Year Breaks in Service
following the date of distribution. A Participant who was deemed to have
received a distribution of his or her vested amount shall be deemed to have
repaid such amount as of the first date on which he or she again becomes a
Participant. In the event the Former Participant does repay the full amount
distributed to him or her, the forfeited portion of the Participant’s Account
must be restored in full, unadjusted by any gains or losses occurring subsequent
to the date of distribution.

(ii)           Restorations of forfeitures will be made as of the date that the
Plan Administrator is notified that the Trustee has received the required
repayment. Any forfeiture amount that must be restored to a Participant’s
Account will be taken from any forfeitures that have not yet been applied and,
if the amount of forfeitures available for this purpose is insufficient, the
Employer will make a timely supplemental contribution of an amount sufficient to
enable the Trustee to restore the forfeiture amount to the Participant’s
Account.

(iii)           If a Former Participant resumes service after incurring five
consecutive One Year Breaks in Service, forfeited amounts will not be restored
under any circumstances.

If a Former Participant resumes service before incurring five consecutive One
Year Breaks in Service, both the pre-break and post-break service will count in
vesting both any restored pre-break and post-break employer-derived Account
balance.

 

13.12       Restrictions on Immediate Distributions 

(a)           If the value of a Participant’s vested Accrued Benefit derived
from Employer and Employee contributions exceeds (or at the time of any prior
distribution exceeded) $3,500 ($5,000 for Plan Years beginning January 1, 1998
and thereafter) and the Accrued Benefit is immediately distributable, the
Participant and the Participant’s spouse (or where either the Participant or the
spouse has died, the survivor) must consent to any distribution of such Accrued
Benefit. Notwithstanding the above, in determining whether such consent is
necessary, the $5,000 amount shall apply to any Participant with an Accrued
Benefit on or after January 1, 1998 and before March 28, 2005, including those
Participants whose Accrued Benefit exceeded the prior cash-out amount under the
Plan. Further, in determining whether such consent is necessary for
distributions on or after October 17, 2000, the look-back rule shall not apply,
except in the case of periodic distributions already in effect.

Except as provided below, the consent of the Participant and the Participant’s
spouse shall be obtained in writing within the 90-day period (180-day period for
Plan Years beginning January 1, 2007 and thereafter) ending on the annuity
starting date. The annuity starting date is the first day of the first period
for which an amount is paid as an annuity or any other form. The Plan
Administrator shall notify the Participant and/or the Participant’s spouse of
the right to defer any distribution until the Participant’s Accrued Benefit is
no longer immediately distributable and, effective for Plan Years beginning
after December 31, 2006, the consequences of failing to defer receipt of the
distribution. Such notification shall include a general description of the
material features, and an explanation of the relative values of, the optional
forms of benefit available under the Plan in a manner that would satisfy the
notice requirements of Code Section 417(a)(3), if applicable, and shall be
provided no less than 30 days and no more than 90 days (180 days for Plan Years
beginning January 1, 2007 and thereafter) prior to the annuity starting date.

However, distribution may commence less than 30 days after the notice described
in the preceding sentence is given, provided the distribution is not one to
which Code Section 417 applies, the Participant is clearly informed of his or
her right to take 30 days after receiving the notice to decide whether or not to
elect a distribution (and, if applicable, a particular distribution option), and
the Participant, after receiving the notice, affirmatively elects to receive the
distribution prior to the expiration of the 30-day minimum period.

 

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For Plan Years beginning January 1, 1998, and thereafter, if a distribution is
one to which Code Sections 411(a)(11)(A) and 417 applies, a Participant may
commence receiving a distribution in a form other than a Qualified Joint and
Survivor Annuity less than 30 days after receipt of the written explanation
described in the preceding paragraph provided: (1) the Participant has been
provided with information that clearly indicates that the Participant has at
least 30 days to consider whether to waive the Qualified Joint and Survivor
Annuity and elect (with spousal consent) a form of distribution other than a
Qualified Joint and Survivor Annuity; (2) the Participant is permitted to revoke
any affirmative distribution election at least until the Distribution
Commencement Date or, if later, at any time prior to the expiration of the 7-day
period that begins the day after the explanation of the Qualified Joint and
Survivor Annuity is provided to the Participant; and (3) the Distribution
Commencement Date is after the date the written explanation was provided to the
Participant. For distributions on or after December 31, 1996, the Distribution
Commencement Date may be a date prior to the date the written explanation is
provided to the Participant if the distribution does not commence until at least
30 days after such written explanation is provided, subject to the waiver of the
30-day period. For the purposes of this paragraph, the Distribution Commencement
Date is the date a Participant commences distributions from the Plan. If a
Participant commences distribution with respect to a portion of his/her Account
Balance, a separate Distribution Commencement Date applies to any subsequent
distribution. If distribution is made in the form of an annuity, the
Distribution Commencement Date is the first day of the first period for which
annuity payments are made.

Notwithstanding the foregoing, only the Participant need consent to the
commencement of a distribution in the form of a Qualified Joint and Survivor
Annuity while the Accrued Benefit is immediately distributable. Furthermore, if
payment in the form of a Qualified Joint and Survivor Annuity is not required
with respect to the Participant, only the Participant need consent to the
distribution of an Accrued Benefit that is immediately distributable. The
consent of the Participant or the Participant’s spouse shall not be required to
the extent that a distribution is required to satisfy Code Section 401(a)(9) or
Code Section 415. In addition, upon termination of this Plan if the Plan does
not offer an annuity option (purchased from a commercial provider) and if the
Employer or any entity within the same controlled group as the Employer does not
maintain another defined contribution plan (other than an employee stock
ownership plan as defined in Code Section 4975(e)(7)), the Participant’s Accrued
Benefit may, without the Participant’s consent, be distributed to the
Participant. However, if any entity within the same controlled group as the
Employer maintains another defined contribution plan (other than an employee
stock ownership plan as defined in Code Section 4975(e)(7)) then the
Participant’s Accrued Benefit will be transferred, without the Participant’s
consent, to the other plan if the Participant does not consent to an immediate
distribution.

 

An Accrued Benefit is immediately distributable if any part of the Accrued
Benefit could be distributed to the Participant (or surviving spouse) before the
Participant attains (or would have attained if not deceased) the later of Normal
Retirement Age or age 62.

13.13       Rollovers to Other Qualified Plans. 

(a)           Notwithstanding any provision of the Plan to the contrary that
would otherwise limit a distributee’s election under this Article, a distributee
may elect, at the time and in the manner prescribed by the Plan Administrator,
to have any portion of an eligible rollover distribution paid directly to an
eligible retirement plan specified by the distributee in a direct rollover.

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(b)          Definitions.

(i)            Eligible rollover distribution: An eligible rollover distribution
is any distribution of all or any portion of the balance to the credit of the
distributee, except that an eligible rollover distribution does not include: any
distribution that is one of a series of substantially equal periodic payments
(not less frequently than annually) made for the life (or life expectancy) of
the distributee or the joint lives (or joint life expectancies) of the
distributee and the distributee’s designated Beneficiary, or for a specified
period of ten years or more; any distribution to the extent such distribution is
required under Code Section 401(a)(9); any hardship distribution described in
Code Section 401(k)(2)(B)(i)(iv) received after December 31, 1998; the portion
of any distribution that is not includible in gross income (determined without
regard to the exclusion for net unrealized appreciation with respect to employer
securities); and any other distribution(s) that is reasonably expected to total
less than $200 during a year. For Plan Years beginning on and after January 1,
2008, a portion of a distribution shall not fail to be an Eligible Rollover
Distribution merely because the portion consists of after-tax employee
contributions which are not includible in gross income. However, effective
January 1, 2007, such portion may be transferred only to an individual
retirement account or individual retirement annuity described in Code section
408(a) or Code Section 408(b), or to a qualified plan described in Code
Section 401(a) or Code Section 403(a), or to an annuity contract described in
Code Section 403(b), which plan or contract agrees to separately account for
amounts so transferred, including separate accounting for the portion of such
distribution which is includible in gross income and the portion of such
distribution which is not so includible. Effective January 1, 2008, such portion
may also be transferred to a Roth IRA, provided that for amounts transferred in
2008 or in 2009, the same income and tax filing restrictions that apply to a
rollover from a traditional IRA to a Roth IRA are complied with by the
distributee.

 

(ii)            Eligible retirement plan: An eligible retirement plan is an
individual retirement account described in Code Section 408(a), an individual
retirement annuity described in Code Section 408(b), an annuity plan described
in Code Section 403(a), or a qualified Plan described in Code Section 401(a),
that accepts the distributee’s eligible rollover distribution. Effective for
Plan Years beginning on and after January 1, 2006, eligible Retirement Plan also
means an annuity contract described in Code Section 403(b) and an eligible plan
under Code Section 457(b), which is maintained by a state, political subdivision
of a state, or any agency or instrumentality of a state or political subdivision
of a state and which agrees to separately account for amounts transferred into
such plan from this Plan. For Eligible Rollover Distributions made after
December 31, 2007, an Eligible Retirement Plan shall also include a Roth
individual retirement account as described in Section 408A of the Code, provided
that for Eligible Rollover Distributions made in 2008 or in 2009, the same
income and tax filing status restrictions that apply to a rollover from a
traditional IRA into a Roth IRA, will also apply to rollovers to a Roth IRA.

(iii)         Distributee: A distributee includes an Employee or former
Employee. In addition, the Employee’s or former Employee’s surviving spouse or
former spouse who is the alternate payee under a qualified domestic relations
order, as defined in Code Section 414(p), are distributees with regard to the
interest of the spouse or former spouse.

(iv)          Direct rollover: A direct rollover is a payment by the Plan to the
eligible retirement plan specified by the distributee.

(c)           For distributions after June 9, 2009, a non-spouse Beneficiary who
is a “designated beneficiary” under Code Section 401(a)(9)(E) and the
regulations thereunder, by a direct trustee-to-trustee transfer (“direct
rollover”), may roll over all or any portion of his or her distribution to an
individual retirement account the Beneficiary establishes for purposes of
receiving the distribution. In order to be able to roll over the distribution,
the distribution otherwise must satisfy the definition of an eligible rollover
distribution.

Although a non-spouse Beneficiary may roll over directly a distribution as
provided in above, any distribution made prior to January 1, 2010 is not subject
to the direct rollover requirements of Code 401(a)(31) (including Code
Section 401(a)(31)(B), the notice requirements of Code Section 402(f) or the
mandatory withholding requirements of Code Section 3405(c)). If a non-spouse
Beneficiary receives a distribution from the Plan, the distribution is not
eligible for a “60-day” rollover.

 

If the Participant’s named Beneficiary is a trust, the Plan may make a direct
rollover to an individual retirement account on behalf of the trust, provided
the trust satisfies the requirements to be a “designated beneficiary” within the
meaning of Code Section 401(a)(9)(E).

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A non-spouse Beneficiary may not roll over an amount which is a required minimum
distribution, as determined under applicable Treasury Regulations and other
Internal Revenue Service guidance. If the Participant dies before his or her
required beginning date and the non-spouse Beneficiary rolls over to an IRA the
maximum amount eligible for rollover, the Beneficiary may elect to use either
the 5-year rule or the life expectancy rule, pursuant to Treasury Regulation
Section 1.401(a)(9)-3, A-4(c), in determining the required minimum distributions
from the IRA that receives the non-spouse Beneficiary’s distribution.

13.14       Payment under Qualified Domestic Relations Orders. Notwithstanding
any provisions of the Plan to the contrary, if there is entered any Qualified
Domestic Relations Order that affects the payment of benefits hereunder, such
benefits shall be paid in accordance with the applicable requirements of such
Order, provided that such Order (i) does not require the Plan to provide any
type or form of benefits, or any option, that is not otherwise provided
hereunder, (ii) does not require the Plan to provide increased benefits, and
(iii) does not require the payment of benefits to an alternate payee which are
required to be paid to another alternate payee under another order previously
determined to be a Qualified Domestic Relations Order.

To the extent required or permitted by any such Order, at any time on or after
the date the Plan Administrator has determined that the Order is a Qualified
Domestic Relations Order, the alternate payee shall have the right to request
the Plan Administrator to commence distribution of benefits under the Plan
regardless of whether the Participant is otherwise entitled to a distribution at
such time under the Plan. Except as specifically provided in a Qualified
Domestic Relations Order, amounts distributed under this section shall be taken
pro rata from the investment options in which each of the Participant’s Accounts
is invested. The Plan Administrator shall establish reasonable procedures to
determine whether an order or other decree is a Qualified Domestic Relations
Order, and to administer distributions under such orders.

13.15       Notwithstanding anything in the Plan to the contrary, effective
January 1, 2002, for purposes of computing the value of involuntary
distributions of vested Accrued Benefits of $5,000 or less, the value of a
Participant’s nonforfeitable Account balances shall be determined without regard
to that portion of the Account balances that are attributable to Rollover
Contributions (and earnings allocable thereto) within the meaning of Code
Sections 402(c)(4), 403(a)(4), 403(b)(8), 408(d)(3) and 457(e)(16). If the value
of the Participant’s nonforfeitable Account balances as so determined is $5,000
or less, for distributions made prior to March 28, 2005, the Plan shall
distribute the Participant’s entire vested Account balances as soon as
administratively feasible.

 

13.16       USERRA. For years beginning after December 31, 2008, the following
rules shall apply:

(a)           Severance from Employment. An individual shall be treated as
having been severed from employment for purposes of Code
Section 401(k)(2)(B)(i)(I) during any period the individual is performing
service in the uniformed services described in Code Section 3401(h)(2)(A). If an
individual performing such service in the uniformed services elects to receive a
distribution by reason of severance from employment, the individual may not make
a Salary Reduction Contribution or other Employee contribution during the
6-month period beginning on the date of the distribution.

(b)           Qualified Reservist Distribution under USERRA. A Participant who
is ordered or called to active duty may take a Qualified Reservist Distribution
if the following are satisfied:

(1)the distribution consists solely of elective deferrals (Salary Reduction
Contributions);

(2)the Participant was ordered or called to active duty for a period in excess
of one hundred and seventy nine (179) days or for an indefinite period; and

(3)the distribution from the Plan is made during the period which begins on the
date of such order or call and ends at the close of the active duty period.

The ten percent (10%) early withdrawal penalty tax will not apply to a qualified
reservist distribution, which meets the requirements stated above.

ARTICLE XIV

PLAN FIDUCIARY RESPONSIBILITIES

14.01       Plan Fiduciaries. The Plan Fiduciaries shall be:

(i)          the Trustee(s) of the Plan;

(ii)         the Plan Administrator; and

(iii)        such other person or persons as may be designated by the Plan
Administrator in accordance with the provisions of this Article XIV.

 

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14.02       General Fiduciary Duties. Each Plan Fiduciary shall discharge his or
her duties solely in the interest of the Participants and

their Beneficiaries and act:

(i)            for the exclusive purpose of providing benefits to Participants
and their Beneficiaries and defraying reasonable expenses of administering the
Plan;

(ii)           with the care, skill, prudence and diligence under the
circumstances then prevailing that a prudent person acting in a like capacity
and familiar with such matters would use in the conduct of an enterprise of a
like character and with like aims;

(iii)          by diversifying the investments of the Plan so as to minimize the
risk of large losses, unless under the circumstances it is clearly prudent not
to do so, if the Fiduciary has the responsibility to invest plan assets; and

(iv)          in accordance with the documents and instruments governing the
Plan insofar as such documents and instruments are consistent with the
provisions of current laws and regulations.

Each Plan Fiduciary shall perform the duties specifically assigned to him or
her. No Plan Fiduciary shall have any responsibility for the performance or
non-performance of any duties not specifically allocated to him or her.

14.03       Duties of the Trustee(s). The specific responsibilities and duties
of the Trustee(s) are set forth in the Trust Indenture between the Employer and
the Trustee(s). In general the Trustee(s) shall:

(i)            invest Plan assets, subject to directions from the Plan
Administrator or from any duly appointed investment manager;

(ii)           maintain adequate records of receipts, disbursements, and other
transactions involving the Plan; and

(iii)          prepare such reports, statements, tax returns and other forms as
may be required under the Trust Indenture or applicable laws and regulations.

14.04       Powers and Duties of the Plan Administrator. The Plan Administrator
is the Benefits Committee. The Plan Administrator shall have the power,
discretionary authority, and duty to interpret the provisions of the Plan and to
make all decisions and take all actions that shall be necessary or proper in
order to carry out the provisions of the Plan. Without limiting the generality
of the foregoing, the Plan Administrator shall:

(i)             monitor compliance with the provisions of ERISA and other
applicable laws with respect to the Plan;

(ii)            establish an investment policy and funding method consistent
with objectives of the Plan and with the requirements of applicable laws and
regulations;

 

(iii)           invest Plan assets except to the extent that the Plan
Administrator has delegated such investment duties to an investment manager;

(iv)          evaluate from time to time investment policy and the performance
of any investment manager or investment advisor appointed by it;

(v)           interpret and construe the Plan in order to resolve any
ambiguities therein;

(vi)         determine all questions concerning the eligibility of any person to
participate in the Plan, the right to and the amount of any benefit payable
under the Plan to or on behalf of an individual and the date on which any
individual ceases to be a Participant, with any such determination to be
conclusively binding and final, to the extent permitted by applicable law, upon
all persons interested or claiming an interest in the Plan;

(vii)        establish guidelines as required for the orderly and uniform
administration of the Plan;

(viii)        exercise overall control of the operation and administration of
the Plan in matters not allocated to some other Fiduciary by the terms of this
Plan;

(ix)          administer the Plan on a day-to-day basis in accordance with the
provisions of this Plan and all other pertinent documents;

(x)            retain and maintain Plan records, including Participant census
data, participation dates, compensation records, and such other records
necessary or desirable for proper Plan administration;

(xi)         prepare and arrange for delivery to Participants of such summaries,
descriptions, announcements and reports as are required to be given to
Participants under applicable laws and regulations;

(xii)          file with the U.S. Department of Labor, the Internal Revenue
Service and other regulatory agencies on a timely basis all required reports,
forms and other documents;

(xiii)         prepare and furnish to the Trustee(s) sufficient records and data
to enable the Trustee(s) to properly perform its obligations under the Trust
Indenture; and

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(xiv)         to take appropriate actions required to correct any errors made in
determining the eligibility of any Employee for benefits under the Plan or the
amount of benefits payable under the Plan and in correcting any error made in
computing the benefits of any Participant or Beneficiary, the Plan Administrator
may make equitable adjustments (an increase or decrease) in the amount of any
future benefits payable under the Plan, including the recovery of any
overpayment of benefits paid from the Plan as provided in Treasury Regulation
Section 1.401(a)-13(c)(2)(iii).

 

The Plan Administrator may appoint or employ such advisers or assistants as the
Plan Administrator deems necessary and may delegate to any one or more of its
members any responsibility it may have under the Plan or designate any other
person or persons to carry out any responsibility it may have under the Plan.

Notwithstanding any provisions elsewhere to the contrary, the Plan Administrator
shall have total discretion to fulfill the above responsibilities as the Plan
Administrator sees fit on a uniform and consistent basis and as the Plan
Administrator believes a prudent person acting in a like capacity and familiar
with such matters would do.

14.05       Designation of Fiduciaries. The Plan Administrator shall have the
authority to appoint and remove Trustee(s) in accordance with the Trust
Indenture. The Plan Administrator may appoint and remove an investment manager
and delegate to said investment manager power to manage, acquire or dispose of
any assets of the Plan.

While there is an investment manager, the Plan Administrator shall have no
obligation under this Plan with regard to the performance or non-performance of
the duties delegated to the investment manager.

The Plan Administrator shall appoint all other Fiduciaries of this Plan. In
making its appointment or delegation of authority, the Plan Administrator may
designate all of the responsibilities to one person or it may allocate the
responsibilities, on a continuing basis or on an ad hoc basis, to one or more
individuals either jointly or severally. No individual named a Fiduciary shall
have any responsibility for the performance or non-performance of any
responsibilities or duties not allocated to him or her.

The appointing authority of a Fiduciary shall periodically, but not less
frequently than annually, review the performance of each fiduciary appointed in
order to carry out the general fiduciary duties specified in Section 14.02 and,
where appropriate, take or recommend remedial action.

14.06       Delegation of Duties by a Fiduciary. Except as provided in this Plan
or in the appointment as a Fiduciary, no Plan Fiduciary may delegate his or her
fiduciary responsibilities. If authorized by the appointing authority, a
Fiduciary may appoint such agents as may be deemed necessary and delegate to
such agents any non-fiduciary powers or duties, whether ministerial or
discretionary. No Fiduciary or agent of a Fiduciary who is a full-time employee
of the Employer will receive any compensation from the Plan for his or her
services, but the Employer or the Plan shall pay all expenses that such employee
reasonably incurs in the discharge of his or her duties.

 

ARTICLE XV

BENEFITS COMMITTEE

15.01       Appointment of Benefits Committee. The Benefits Committee shall
consist of three or more members appointed from time to time by the president of
the Employer (the “President”), who shall also designate one of the members as
chairman. Each member of the Benefits Committee and its chairman shall serve at
the pleasure of the President.

15.02       Benefits Committee to Act by Majority Vote, etc. The Benefits
Committee shall act by majority vote of all members. All actions,
determinations, interpretations and decisions of the Benefits Committee with
respect to any matter within their jurisdiction will be conclusive and binding
on all persons. Any person may rely conclusively upon any action if certified by
the Benefits Committee.

Notwithstanding the above, a member of the Benefits Committee who is also a
Participant shall not vote or act upon any matter relating solely or primarily
to him or herself.

15.03      Records and Reports of the Benefits Committee. The Benefits Committee
shall keep a record of all of its proceedings and acts, and shall keep such
books of account, records and other data as may be necessary for the proper
administration of the Plan and file or deliver to Participants and their
Beneficiaries whatever reports are required by any regulatory authority.

15.04       Costs and Expenses of Administration. Notwithstanding any provisions
of the Plan to the contrary (but subject to the provisions of Section 12.01),
all clerical, legal and other expenses of the Plan and the Trust, including
Trustee’s fees, shall be paid by the Plan, except to the extent the Employer
elects to pay such amounts; provided,  however, that if the Employer pays such
amounts it shall be reimbursed by the Trust for such amounts unless the
Employers elects not to be so reimbursed.

15.05       Indemnification of the Plan Administrator and Assistants. The
Employer shall indemnify and defend to the extent permitted under the By-Laws of
the Employer any Employee or former Employee (i) who serves or has served as a
member of the Benefits Committee, (ii) who has been appointed to assist the
Benefits Committee in administering the Plan, or (iii) to whom

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the Benefits Committee has delegated any of its duties or responsibilities
against any liabilities, damages, costs and expenses (including attorneys’ fees
and amounts paid in settlement of any claims approved by the Employer)
occasioned by any act or omission to act in connection with the Plan, if such
act or omission to act is in good faith and without gross negligence; provided
that such Employee or former Employee is not otherwise indemnified or saved
harmless under any liability insurance or other indemnification arrangement.

 

ARTICLE XVI

INVESTMENT OF THE TRUST FUND

16.01       In General. Subject to the direction of the Plan Administrator or
any duly appointed investment manager in accordance with Section 14.05, the
Trustee shall receive all contributions to the Trust and shall hold, invest and
control the whole or any part of the assets in accordance with the provisions of
the annexed Trust Indenture.

16.02      Investment of the Trust Fund. In order to provide retirement and
other benefits for Plan Participants and their Beneficiaries, the Trustee shall
invest Plan assets in one or more permissible investments specified in the Trust
Indenture (“Permissible Investments”) and in such collective investment trusts
or group trusts that may be established for the primary objective of investing
in securities issued by The Hanover Insurance Group, Inc., which investments
shall be considered as investments in qualifying employer securities as defined
in Section 407(d) of the Employee Retirement Income Security Act of 1974, as
amended. Except as otherwise provided in this Section, such Permissible
Investments shall include The Hanover Insurance Group Company Stock Fund, a
group trust established for the purposes of investing in the common stock of The
Hanover Insurance Group. Inc. (“The Employer Stock Fund”). Notwithstanding
anything else in the Plan to the contrary, after the close of trading on
November 2, 2009, the Trustee shall not invest any Plan assets to acquire an
interest in The Employer Stock Fund for or on behalf of a Participant.
Notwithstanding anything else in the Plan to the contrary, effective after the
close of trading on December 30, 2011, the Employer Stock Fund shall
automatically stop being offered as a Permissible Investment under the Plan and
shall he liquidated.

All collective investment trusts and group trusts shall also conform to the
terms of the Plan.

This Plan is intended to comply with the requirements of Section 404(c) of
ERISA. Each Participant is responsible and has sole discretion to give
directions to the Trustee in such form as the Trustee may require concerning the
investment of his or her Accrued Benefit in one or more of the Permissible
Investments, which directions must be followed by the Trustee, subject to the
restriction contained above restricting investments in The Employer Stock Fund.
The designation by a Participant of the allocation of his Accrued Benefit among
the Permissible Investments may be made from time to time, with such frequency
and in accordance with such procedures as are established and set forth in the
Trust Indenture and applied in a uniform nondiscriminatory manner provided,
 however, that notwithstanding the foregoing, effective at the close of trading
on November 2, 2009, a Participant shall not designate an increase to the
allocation of his Accrued Benefit in The Employer Stock Fund as that allocation
existed at the close of trading on November 2, 2009. Any such procedure shall he
communicated to the Participants and designed with the intention of permitting
the Participants to exercise control over the assets in their respective
accounts within the meaning of Section 404(c) of the Employee Retirement Income
Security Act of 1974, as amended, and the regulations promulgated thereunder.

 

Notwithstanding anything else in the Plan to the contrary, if and to the extent
a Participant has assets invested in The Employer Stock Fund as of the close of
trading on November 2, 2009, such Participant shall be provided an opportunity
before the close of trading on December 30, 2011 to give directions to the
Trustee to transfer such assets out of the Employer Stock Fund and into another
Permissible Investment. Notwithstanding anything in the Plan to the contrary, if
and to the extent that (i) a Participant fails to designate an allocation of his
Accrued Benefit, in whole or in part, (ii) a Participant’s attempted allocation
into The Employer Stock Fund is disregarded under this Section, or (iii) a
Participant has any assets invested in The Employer Stock Fund as of the close
of business on December 30, 2011, the Trustee shall allocate and invest such
assets in the default investment fund which has been selected by the Plan
Administrator; provided that for Plan Years beginning on or after January 1,
2009, the provisions of Section 5.05(f) of the Plan shall apply with respect to
a default investment fund selected by the Plan Administrator. Otherwise, the
Trustee shall allocate and invest the assets of the Trust in accordance with the
Participant’s selections as provided in this Section, subject to the restriction
on investments in The Employer Stock Fund. All voting rights with respect to a
Participant’s investment in The Employer Stock Fund shall be the responsibility
of that Participant, and the Trustee shall receive direction from the
Participant for such voting rights.

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Neither the Plan Administrator, the Trustee, the Employer nor any other person
shall be under any duty to question any investment, voting or other direction of
the Participant or make any suggestions to the Participant in connection
therewith, and the Trustee shall comply as promptly as practicable with
directions given by the Participant hereunder, except, notwithstanding anything
in the Plan to the contrary, and effective at the close of trading on
November 2, 2009, directions to invest in The Employer Stock Fund. All such
directions may be of continuing nature or otherwise and may be revoked by the
Participant at any time in such form as the Trustee may require. Neither the
Plan Administrator, the Trustee, the Employer nor any other person shall be
responsible or liable for any costs losses or expenses which may arise or result
from or be related to the compliance or refusal or failure to comply with any
directions from the Participant. The Trustee may refuse to comply with any
direction from the Participant in the event the Trustee, in its sole or absolute
discretion, deems such direction improper by virtue of applicable law or
regulations or as may be necessary or appropriate, in the sole discretion of the
Trustee, to prevent future investments by the Participant in The Employer Stock
Fund, effective at the close of trading on November 2, 2009. For purposes of
this Section, all references to “Participant” shall include all Beneficiaries of
Participants who are deceased and any Alternate Payees under a Qualified
Domestic Relations Order, as provided for in Section 19.01.

16.03       Default Investment.

(a)          General Rules.

(i)            Qualified Default Investment Alternative. If a Participant or
Beneficiary has the opportunity to direct the investment of the assets in his or
her Account (but does not direct the investment of such assets), then such
assets in his or her Account will be invested in a Qualified Default Investment
Alternative.

 

(ii)          Transfer from Qualified Default Investment Alternative. Any
Participant or Beneficiary on whose behalf assets are invested in a Qualified
Default Investment Alternative may transfer, in whole or in part, such assets to
any other investment alternative available under the Plan with a frequency
consistent with that afforded to a Participant or Beneficiary who elected to
invest in the Qualified Default Investment Alternative, but not less frequently
than once within any 3-month period.

(iii)          No Fees during First 90 Days. Any Participant’s or Beneficiary’s
election to make such transfer from the Qualified Default Investment
Alternative, or a Permissible Withdrawal (by any Eligible Participant who is
enrolled in the Automatic Contribution Arrangement prior to January 1, 2011), or
other first investment in a Qualified Default Investment Alternative on behalf
of a Participant or Beneficiary, will not be subject to any restrictions, fees
or expenses (including surrender charges, liquidation or exchange fees,
redemption fees and similar expenses charged in connection with the liquidation
of, or transfer from, the investment), except as permitted in Department of
Labor Regulation Section 2550.404c–5(c)(5)(ii)(B).

(iv)          Limited Fees after First 90 Days. Following the end of the 90-day
period described in paragraph (iii), any transfer described in paragraph
(ii) above or Permissible Withdrawal (by any Eligible Participant who is
enrolled in the Automatic Contribution Arrangement prior to January 1, 2011),
shall not be subject to any restrictions, fees or expenses not otherwise
applicable to a Participant or Beneficiary who elected to invest in that
Qualified Default Investment Alternative.

(v)          Materials Must Be Provided. A Plan fiduciary shall provide to a
Participant or Beneficiary the materials set forth in Department of Labor
Regulation Section 2550.404c-1(b)(2)(i)(B)(1)(viii) and (ix) and Department of
Labor Regulation Section 404c-1(b)(2)(i)(B)(2) relating to a Participant’s or
Beneficiary’s investment in a Qualified Default Investment Alternative.

(b)          Notice Requirements. The following provisions apply to the notice
required by a Qualified Default Investment Alternative:

(i)            Manner. Such notice will be written in a manner calculated to be
understood by the average Plan Participant.

 

(ii)           Content. Such notice will contain the following:

A.           A description of the circumstances under which assets in the
individual account of a Participant or Beneficiary may be invested on behalf of
the Participant or Beneficiary in a Qualified Default Investment Alternative;
and, if applicable, an explanation of the circumstances under which Automatic
Contributions will be made on behalf of a Participant, the percentage of
Compensation that such Automatic Contributions represent, and the right of the
Participant to elect not to have such made on the Participant’s behalf (or to
elect to have Salary Reduction Contributions made at a different percentage);

B.              An explanation of the right of Participants and Beneficiaries to
direct the investment of assets in their individual accounts;

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C.           A description of the Qualified Default Investment Alternative,
including a description of the investment objectives, risk and return
characteristics (if applicable), and fees and expenses attendant to the
Qualified Default Investment Alternative;

D.           A description of the right of the Participants and Beneficiaries on
whose behalf assets are invested in a Qualified Default Investment Alternative
to direct the investment of those assets to any other investment alternative
under the Plan, including a description of any applicable restrictions, fees or
expenses in connection with such transfer; and

E.            An explanation of where the Participants and Beneficiaries can
obtain investment information concerning the other investment alternatives
available under the Plan.

(iii)          Timing. The Participant or Beneficiary on whose behalf an
investment in a Qualified Default Investment Alternative may be made must be
furnished such notice during the following periods: (1) At least 30 days in
advance of the Participant’s eligibility to participate in the Plan, or at least
30 days in advance of the date of any first investment in a Qualified Default
Investment Alternative on behalf of a Participant or Beneficiary; and (2) Within
a reasonable period of time of at least 30 days in advance of each subsequent
Plan Year.

 

ARTICLE XVII

CLAIMS PROCEDURE

17.01       Claims Fiduciary. The Plan Administrator will act as Claims
Fiduciary except to the extent that the Plan Administrator has delegated the
function to some other person or persons, committee or entity.

Notwithstanding any provision elsewhere to be contrary, the Claims Fiduciaries
shall have total discretion to fulfill their fiduciary duties as they see fit on
a uniform and consistent basis as they believe a prudent person acting in a like
capacity and familiar with such matters would do.

17.02       Claims for Benefits. Claims for benefits under the Plan may be filed
with the Plan Administrator on forms supplied by the Employer. For the purpose
of this procedure, “claim” means a request for a Plan benefit by a Participant
or a Beneficiary of a Participant. If the basis of the claim includes
documentation not a part of the records of the Plan or of the Employer, all such
documentation must be included with the claim.

17.03       Notice of Denial of Claim. If a claim is wholly or partially denied,
the Plan Administrator shall notify the claimant of the denial of the claim
within a reasonable period of time. Such notice of denial (i) shall be in
writing, (ii) shall be written in a manner calculated to be understood by the
claimant, and (iii) shall contain (A) the specific reason or reasons for denial
of the claim, (B) a specific reference to the pertinent Plan provisions upon
which the denial is based, (C) a description of any additional material or
information necessary for the claimant to perfect the claim, along with an
explanation why such material or information is necessary, and (D) an
explanation of the Plan’s claim review procedure. Unless special circumstances
require an extension of time for processing the claim, the Plan Administrator
shall notify the claimant of the claim denial no later than 90 days after
receipt of the claim. If such an extension is required, written notice of the
extension shall be furnished to the claimant prior to the termination of the
initial 90-day period. The extension notice shall indicate the special
circumstances requiring the extension of time and the date by which the Plan
Administrator expects to render the final decision.

 

17.04       Request for Review of Denial of Claim. Within 120 days of the
receipt of the claimant of the written notice of the denial of the claim, or
such later time as shall be deemed reasonable taking into account the nature of
the benefit subject to the claim and any other attendant circumstances or if the
claim has not been granted within a reasonable period of time, the claimant may
file a written request with the Plan Administrator to conduct a full and fair
review of the denial of the claimant’s claim for benefits. In connection with
the claimant’s appeal of the denial of his or her benefit, the claimant may
review pertinent documents and may submit issues and comments in writing.

17.05       Decision on Review of Denial of Claim. The Plan Administrator shall
deliver to the claimant a written decision on the claim promptly, but not later
than 60 days, after the receipt of the claimant’s request for review, except
that if there are special circumstances, which require an extension of time for
processing, the aforesaid 60-day period may be extended to 120 days. Such
decision shall (i) be written in a manner calculated to be understood by the
claimant, (ii) include specific reasons for the decision, and (iii) contain
specific references to the pertinent Plan provisions upon which the decision is
based.

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ARTICLE XVIII

AMENDMENT AND TERMINATION

18.01       Employer May Amend Plan. The Plan may be modified or amended in
whole or in part by the action of the Board of Directors of the Employer at any
time or times, and retroactively if it is deemed advisable by the Directors to
conform the Plan to conditions which must be met to qualify the Plan or the
Trust Indenture for tax benefits available under the applicable provisions of
the Internal Revenue Code as it exists at any such time or times; provided,
 however, that no such modifications or amendment shall make it possible for any
part of the Trust Fund to be used for purposes other than the exclusive benefit
of the Participants or their Beneficiaries.

Notwithstanding the above paragraph, an amendment to the Plan may not decrease a
Participant’s Accrued Benefit, and may not reduce or eliminate a benefit, right
or feature of this Plan that is protected under Code Section 411(d)(6) (except
as provided for by the Code or the Treasury Regulations issued thereunder)
determined immediately prior to the date of adoption, or if later, the effective
date of the amendment. Should any early retirement benefit or other optional
retirement benefits be changed by amendment to this Plan, all benefits accrued
prior to the date of such amendment shall not be reduced.

 

18.02       Employer May Discontinue Plan. The Employer reserves the right at
any time to partially terminate the Plan or to terminate the Plan in its
entirety. Any such termination or partial termination of such Plan shall become
effective immediately upon receipt by the Trustee of a copy of the vote or
resolutions of the Directors of the Employer terminating its Plan, certified as
true and correct by the clerk or secretary of the Employer. For Plan Years
beginning on or after January 1, 2007, a partial plan termination shall be
deemed to have occurred based on the facts and circumstances in existence at the
time as required by Section 1.411(d)-2(b)(1) of the Treasury Regulations and
Revenue Ruling 2007-43.

In the event of termination of the Plan there shall be a 100% vesting and
nonforfeitability of all rights and benefits under this Trust and Plan
irrespective of the length of participation under the Plan. However, the Trust
shall remain in existence, and all of the provisions of the Trust shall remain
in force, which are necessary in the sole opinion of the Trustees other than the
provisions relating to Employer and Employee contributions. All of the assets on
hand on the date specified in such resolution shall be held, administered and
distributed by the Trustees in the manner provided in the Plan, except that a
Participant shall have a 100% vested and nonforfeitable interest in his or her
Accounts, subject to Section 18.05.

Subject to Section 18.05, any other remaining assets of the Trust Fund shall
also be vested in Participants on a pro rata basis based on their respective
Accrued Benefit in relation to the aggregate of the Accrued Benefits of all
Participants. In the event of a partial termination of Plan, this section will
only apply to those Participants who are affected by such partial termination of
Plan. In the event that the Board of Directors of the Employer shall decide to
terminate completely the Plan and Trust, they shall be terminated as of a date
to be specified in certified copies of its resolution to be delivered to the
Trustees. Upon termination of the Plan and Trust, after payment of all expenses
and proportional adjustment of Participants’ Accounts to reflect such expenses,
fund profits or losses and reallocations to the date of termination, each
Participant shall be entitled to receive in cash any amounts then credited to
his or her Participants’ Accounts.

18.03       Discontinuance of Contributions. In the event that the Employer
shall completely discontinue its contributions, each Participant or Beneficiary
of a Participant affected shall be fully vested in any values credited to his or
her Participant’s Accounts. All of the assets on hand on the date contributions
are discontinued shall be held, administered and distributed by the Trustees in
the manner provided in the Plan.

18.04       Merger and Consolidation of Plan, Transfer of Plan Assets or
Liabilities. In the case of any merger, consolidation with or transfer of assets
or liabilities by the Employer to another plan, each Participant in the Plan on
the date of the transaction shall have a benefit in the surviving plan
(determined as if such plan were terminated immediately after the transaction)
at least equal to the benefit to which he or she would have been entitled to
receive immediately prior to the transaction if the plan had then terminated.

 

18.05       Return of Employer Contributions Under Special Circumstances.
Notwithstanding any provisions of this Plan to the contrary:

(a)           Any monies or other Plan assets held in Trust by the Trustee
attributable to any contributions made to this Plan by the Employer because of a
mistake of fact may be returned to the Employer within one year after the date
of contribution.

(b)           Any monies or other Plan assets held in Trust by the Trustee
attributable to any contribution made by the Employer which is conditional on
the initial qualification of the Plan, as amended, under the Internal Revenue
Code may be refunded to the Employer; provided that:

(i)            the Plan amendment is submitted to the Internal Revenue Service
for qualification within one year from the date the amendment is adopted, and

(ii)            Such contribution that was made conditioned upon Plan
requalification is returned to the Employer within one year after the date the
Plan’s requalification is denied.

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(c)            Any monies or other Plan assets held in Trust by the Trustee
attributable to any contribution made by the Employer which is conditional on
the deductibility of such contribution may be refunded to the Employer, to the
extent the deduction is disallowed under Section 404 of the Code, within one
year after the date of such disallowance.

ARTICLE XIX

MISCELLANEOUS

19.01       Protection of Employee Interest. No Participant, Beneficiary or
other person, including alternate payees entitled to benefits pursuant to a
Qualified Domestic Relations Order, shall have the right to assign, pledge,
alienate or convey any right, benefit or payment to which he or she shall be
entitled in accordance with the provisions of the Plan, and any such attempted
assignment, pledge, alienation or conveyance shall be null and void and of no
effect. To the extent permitted by law, none of the benefits, payments, proceeds
or rights herein created and provided for shall in any way be subject to any
debts, contracts or engagements of any Participant, Beneficiary, alternate payee
or other person entitled to benefits hereunder, nor to any suits, actions or
other judicial process to levy upon or attach the same for the payment thereof.
Provided,  however, that this provision does not preclude the Plan Administrator
from complying with the terms of a Qualified Domestic Relations Order.

If any Participant shall attempt to alienate or assign his or her interest
provided by the Plan, the Plan Administrator shall take such steps as it deems
necessary to preserve such interest for the benefit of the Participant or his or
her Beneficiary.

 

Notwithstanding anything in this Section or Plan to the contrary, the Plan
Administrator (i) shall comply with the terms of any Qualified Domestic
Relations Order, as described in Section 414(p) of the Internal Revenue Code
entered on or after January 1, 1985, and (ii) shall comply with the terms of any
domestic relations order entered before January 1, 1985 if the Administrator is
paying benefits pursuant to such order on such date.

19.02       USERRA Compliance. For Plan Years beginning on or after January 1,
2006, notwithstanding any provisions of this Plan to the contrary,
contributions, benefits and service credit with respect to qualified military
service will be provided in accordance with the rules and requirements of the
Uniformed Services Employment and Reemployment Rights Act of 1994 and
Section 414(u) of the Code.

19.03       Amendment to Vesting Schedule. No amendment to the Plan vesting
schedule shall deprive a Participant of his or her nonforfeitable rights to
benefits accrued to the date of the amendment. Further, if the vesting schedule
of the Plan is amended, or the Plan is amended in any way that directly or
indirectly affects the computation of a Participant’s nonforfeitable percentage,
each Participant with at least 3 Years of Service with the Employer may elect,
within a reasonable period after the adoption of the amendment, to have his or
her nonforfeitable percentage computed under the Plan without regard to such
amendment. The period during which the election may be made shall commence with
the date the amendment is adopted and shall end on the latest of:

(i)            60 days after the amendment is adopted;

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

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

19.04       Meaning of Words Used in Plan. Wherever any words are used herein in
the masculine gender, they shall be construed as though they were also used in
the feminine or neuter gender in all cases where they would so apply. Wherever
any words are used herein in the singular form, they shall be construed as
though they were also used in the plural form in all cases where they would so
apply.

Titles used herein are for general information only and this Plan is not to be
construed by reference thereto.

19.05       Plan Does Not Create Nor Modify Employment Rights. The Plan and
Trust shall not be construed as creating or modifying any contracts of
employment between the Employer and any Participant. All Employees of the
Employer shall be subject to discharge to the same extent that they would have
been if the Plan and Trust had never been adopted.

 

19.06       Massachusetts Law Controls. This Plan shall be governed by the laws
of the Commonwealth of Massachusetts to the extent that they are not pre-empted
by the laws of the United States of America.

19.07       Payments to Come from Trust Fund. All benefits and amounts payable
under the Plan or Trust Indenture shall be paid or provided for solely from the
Trust Fund, and neither the Employer nor the Plan Administrator assumes any
liability or responsibility therefor.

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

19.09       Electronic Communications. Effective for Plan Years beginning on or
after January 1, 2007, any electronic communications made by the Plan to
Participants in regards to eligible rollover distribution tax notices,
Participant consents to distributions, and tax withholding notices shall comply
with the requirements contained in Treasury Regulation Section 1.401(a)-21, in
addition to all otherwise applicable requirements relating to the specific
communication.

19.10       Plan Interpretation. If, due to errors in drafting, any Plan
provision does not accurately reflect its intended meaning, as demonstrated by
consistent interpretations or other evidence of intent, or as determined by the
Plan Administrator in its sole and exclusive judgment, the provision shall be
considered ambiguous and shall be interpreted by all Plan fiduciaries in a
fashion consistent with its intent, as determined by the Employer in its sole
discretion. The Employer shall amend the Plan retroactively to cure any such
ambiguity. This section may not be invoked by any person to require the Plan to
be interpreted in a manner that is inconsistent with its interpretation by Plan
fiduciaries.

EXECUTED, this 21st day of December, 2011.

 

 

 

The Hanover Insurance Company

 

 

By:

/s/ Lorna Stearns

 

Lorna D. Stearns, Vice President

 

APPENDIX A

Special provisions applicable to Employees formerly employed by One Beacon
Insurance Group, LTD. or a business entity affiliated with One Beacon Insurance
Group, LTD.

Notwithstanding anything elsewhere in the Plan to the contrary, the following
special rules shall apply to each person (i) who became employed by the Employer
on or after December 3, 2009, in connection with the transactions contemplated
by the Renewal Rights and Asset Purchase Agreement dated December 3, 2009 by and
among The Hanover Insurance Company, The Hanover Insurance Group, Inc., One
Beacon Insurance Group, LTD. and certain business entities affiliated with One
Beacon Insurance Group, LTD. and (ii) who was employed by One Beacon Insurance
Group, LTD. or a business entity affiliated with One Beacon Insurance Group,
LTD. immediately before being employed by the Employer:

1.For the purposes of vesting, each such person shall be given a past service
credit under the Plan for his or her period of employment with One Beacon
Insurance Group, LTD. or any business entity affiliated with One Beacon
Insurance Group, LTD. from his most recent date of hire as shown on records
furnished to the Employer to and including the date on which such person became
employed by the Employer to the same extent as though such period were a period
of employment with the Employer.

2.Any compensation paid to any such person by One Beacon Insurance Group, LTD.
or a business entity affiliated with One Beacon Insurance Group, LTD. prior to
the date on which such person became employed by the Employer shall NOT be taken
into account for the purposes of this Plan.

APPENDIX B

Special provisions applicable to Employees formerly employed by (i) Campania
Holding Company, Inc. or its direct or indirect subsidiaries (“Campania”);
(ii) Benchmark Professional Insurance Services, Inc. or its direct or indirect
subsidiaries (“Benchmark”); or (iii) Insurance Company of the West or its direct
or indirect subsidiaries (“ICW”).

Notwithstanding anything elsewhere in the Plan to the contrary, the following
special rules shall apply to each person who became employed by the Employer:

•On or about January 15, 2010, in connection with the transactions contemplated
by the Stock Purchase Agreement by and among The Hanover Insurance Group, Inc.,
Richard J. O’Gorman, Katherine Dimitrakopoulos and Benchmark Professional
Insurance Services, Inc. dated January 15, 2010, and who was employed by
Benchmark immediately before being employed by the Employer;

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•On about March 31, 2010, in connection with the transactions contemplated by
the Stock Purchase Agreement by and among The Hanover Insurance Group, Inc.,
Iona LLC, Campania Holding Company, Inc. and the Principal Members of Iona, LLC,
dated January 15, 2010, and who was employed by Campania immediately before
being employed by the Employer; or

•On or after July 8, 2010, in connection with the transactions contemplated by
Surety Business Transition Agreement by and among Insurance Company of the West,
certain of its insurance company subsidiaries and The Hanover Insurance Company
dated July 8, 2010, and who was employed by ICW immediately before being
employed by the Employer.

1.For the purposes of vesting, each such person shall be given a past service
credit under the Plan for his or her period of employment with, as applicable,
Campania, Benchmark or ICW, that immediately preceded his or her employment with
the Employer, from his or her most recent date of hire as shown on records
furnished to the Employer to and including the date on which such person became
employed by the Employer to the same extent as though such period were a period
of employment with the Employer.

2.Any compensation paid to any such person by, as applicable, Campania,
Benchmark or ICW prior to the date on which such person became employed by the
Employer shall NOT be taken into account for the purposes of this Plan.

 

APPENDIX C

Special provisions applicable to Employees formerly employed by
(i) Professionals Direct, Inc. or its direct or indirect subsidiaries (“PDI”);
(ii) Verlan Holdings, Inc. or its direct or indirect subsidiaries (“Verlan”); or
(iii) AIX Holdings, Inc. or its direct or indirect subsidiaries (“AIX”).

(a)          PDI

Pursuant to a certain Agreement and Plan of Merger by and among Professionals
Direct, Inc., Hanover Acquisition Corp. and The Hanover Insurance Group, Inc.
dated June 25, 2007, on September 14, 2007 (the “PDI Closing Date”), an
Affiliate of the Employer acquired Professionals Direct, Inc. and its
subsidiaries. Employees of PDI who continued to be employed by PDI after the PDI
Closing Date (“PDI Closing Hires”) remained employees of PDI (now an Affiliate
of Employer) on a separate PDI payroll up to and through December 31, 2007 (the
“PDI Transition Period”) when their employment was transferred from PDI to the
Employer.

(1)Notwithstanding anything elsewhere in the Plan to the contrary, the following
special rules shall apply to PDI Closing Hires:

(i)            PDI Closing Hires shall be eligible to participate in the Plan,
subject to its provisions, effective as of the PDI Closing Date and to the same
extent that such employees would otherwise have been eligible to participate in
the Plan had such PDI Closing Hires commenced employment with the Employer on
the PDI Closing Date.

(ii)          For the purposes of vesting, each such person shall be given a
past service credit under the Plan for his or her period of employment with PDI
that immediately preceded his or her employment with the Employer, from his or
her most recent date of hire as shown on records furnished to the Employer to
and including the date on which such person became employed by the Employer (or
if terminated during the PDI Transition Period, until the date of termination)
to the same extent as though such period were a period of employment with the
Employer.

(iii)          Any compensation paid to any such person by PDI prior to the PDI
Closing Date shall NOT be taken into account for the purposes of this Plan.

(b)          Verlan

(1)Notwithstanding anything elsewhere in the Plan to the contrary, the following
special rules shall apply to each person who became employed by the Employer
effective on or about March 14, 2008, in connection with the transactions
contemplated by the Agreement and Plan of Merger by and among The Hanover
Insurance Group, Inc., Northdale Acquisition Corp. and Verlan Holdings, Inc.
dated January 10, 2008, and who was employed by Verlan immediately before being
employed by the Employer;

(i)            For the purposes of vesting, each such person shall be given a
past service credit under the Plan for his or her period of employment with
Verlan that immediately preceded his or her employment with the Employer, from
his or her most recent date of hire as shown on records furnished to the
Employer to and including the date on which such person became employed by the
Employer to the same extent as though such period were a period of employment
with the Employer.

(ii)            Any compensation paid to any such person by Verlan prior to the
date on which such person became employed by the Employer shall NOT be taken
into account for the purposes of this Plan.

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(c)          AIX

Pursuant to a certain Stock Purchase Agreement by and among AIX Holdings, Inc.,
certain of its shareholders and The Hanover Insurance Group, Inc. dated
August 5, 2008, on November 28, 2008 (the “AIX Closing Date”), an Affiliate of
the Employer acquired AIX Holdings, Inc. and its subsidiaries. Employees of AIX
who continued to be employed by AIX after the AIX Closing Date (“AIX Closing
Hires”) remained employees of AIX (now an Affiliate of Employer) on a separate
AIX payroll up to and through December 31, 2009 (the “AIX Transition Period”)
when the employment of these employees was transferred from AIX to the Employer.
Additionally, those employees hired by AIX during the AIX Transition Period
(“AIX Transition Hires”) also remained employees of AIX on a separate AIX
payroll until the expiration of the AIX Transition Period when such employees
were transferred from AIX to the Employer.

(1)Notwithstanding anything elsewhere in the Plan to the contrary, the following
special rules shall apply to AIX Closing Hires and AIX Transition Hires:

(i)            AIX Closing Hires shall be eligible to participate in the Plan,
subject to its provisions, effective as of the AIX Closing Date and to the same
extent that such employees would otherwise have been eligible to participate in
the Plan had such AIX Closing Hires commenced employment with the Employer on
the AIX Closing Date.

(ii)            AIX Transition Hires shall be eligible to participate in the
Plan, subject to its provisions, effective as of as their date of hire by AIX
and to the same extent that such employees would otherwise have been eligible to
participate in the Plan had such AIX Transition Hires commenced employment with
the Employer on their date of hire with AIX.

 

(iii)          For the purposes of vesting, each such person shall be given a
past service credit under the Plan for his or her period of employment with AIX
that immediately preceded his or her employment with the Employer, from his or
her most recent date of hire as shown on records furnished to the Employer to
and including the date on which such person became employed by the Employer (or
if terminated during the AIX Transition Period, until the date of termination)
to the same extent as though such period were a period of employment with the
Employer.

(iv)            Any compensation paid to any such person by AIX prior to the AIX
Closing Date shall NOT be taken into account for the purposes of this Plan.

 

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THE HANOVER INSURANCE GROUP

RETIREMENT SAVINGS PLAN

AMENDMENT

To the Restatement Generally Effective January 1, 2010

THIS AMENDMENT is executed by The Hanover Insurance Company, a New Hampshire
corporation (the “Company”).

WHEREAS, the most recent restatement of The Hanover Insurance Group Retirement
Savings Plan (the “Plan”) is effective January 1, 2010; and

WHEREAS, the Company has reserved the right to amend the Plan any time under
Section 18.01 of the Plan; and

WHEREAS, the Company desires to amend the Plan to, among other things, add a
Roth feature to the Plan effective January 1, 2011.

NOW, THEREFORE, the Plan is amended effective as of January 1, 2011 except as
otherwise specified, as follows:

1.              Insert the following new paragraph at the end of Section 1.03 of
the Plan:

“Notwithstanding any other provision of this Plan to the contrary, the Effective
Date of the provisions of this Plan that relate to Roth Elective Deferrals is
January 1, 2011.”

2.              Delete the definition of the term “Accrued Benefit” in Article
II of the Plan in its entirety and insert the following new definition in lieu
thereof:

“‘Accrued Benefit’ shall mean the sum of the balances in a Participant’s 401(k)
Account, Roth Elective Deferral Account, Match Contribution Account,
Non-Elective Employer Contribution Account, Regular Account, Rollover Account,
Tax Deductible Contribution Account and Voluntary Contribution Account.”

3.              Delete the definition of the term “Automatic Contributions” in
Article II of the Plan in its entirety and insert the following new definition
in lieu thereof:

“‘Automatic Contributions’ shall mean the Pre-tax Elective Deferrals that result
from the operation of this Section 5.05(c) of the Plan.”

 

4.              Delete the definition of the term “Automatic Contribution
Arrangement” in Article II of the Plan in its entirety and insert the following
new definition in lieu thereof:

“‘Automatic Contribution Arrangement’ shall mean the arrangement set forth in
Section 5.05 of the Plan pursuant to which, in the absence of an Affirmative
Election, an Employee, who is eligible to participate in the Plan is treated as
having elected to direct the Employer to reduce his or her Compensation in order
that the Employer may make Pre-tax Elective Deferrals to the Plan on behalf of
the Participant equal to a uniform percentage of Compensation.”

5.             Delete subparagraph (i) in the second paragraph of
Section 2.11(a) of the Plan in its entirety and insert the following new
definition in lieu thereof:

“(i)incentive compensation paid to Participants pursuant to the Employer’s
Executive Long Term Performance Unit Plan or pursuant to any similar or
successor cash or equity long-term incentive compensation plan;”

6.              Delete the last sentence of the first paragraph of
Section 2.11(b) of the Plan in its entirety and insert the following new
definition in lieu thereof:

“Notwithstanding the foregoing, Compensation for purposes of the Plan shall also
include Employee elective deferrals under Code Section 402(g)(3), Roth Elective
Deferrals and any amounts contributed or deferred by the Employer at the
election of the Employee and not includible in the gross income of the Employee,
by reason of Code Sections 125, 132(f)(4), 402(e)(3), 402(h), and 403(b).”

7.             Delete paragraph (d)(ii) of Section 2.11 of the Plan in its
entirety and insert the following new definition in lieu thereof:

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“(ii)Differential Wage Payments. For years beginning after December 31, 2008,
(i) an individual receiving a differential wage payment, as defined by Code
Section 3401(h)(2), shall be treated as an Employee of the Employer making the
payment, (ii) the differential wage payment shall be treated as Compensation for
the purposes of Code Section 415(c)(3) and Treasury Regulation section
1.415(c)-2 (e.g., for the purposes of Code Section 415, top-heavy provisions of
Code Section 416, determination of highly compensated employees under Code
Section 414(q)), and (iii) the Plan shall not be treated as failing to meet the
requirements of any provision described in Code Section 414(u)(1)(C) by reason
of any contribution or benefit which is based on the differential wage payment.
Subparagraph (iii) of the foregoing sentence shall apply only if all Employees
of the Employer performing service in the uniformed services described in Code
Section 3401(h)(2)(A) are entitled to receive differential wage payments (as
defined in Code Section 3401(h)(2)) on reasonably equivalent terms and, if
eligible to participate in a retirement plan maintained by the Employer, to make
contributions based on the payments on reasonably equivalent terms (taking into
account Code Sections 410(b)(3), (4), and (5)).”

 

8.             Delete the definition of the term “Employee” in Article II of the
Plan in its entirety and insert the following new definition in lieu thereof:

“‘Employee’ shall mean any person reported on the payroll records of the
Employer as an Employee who is deemed by the Employer to be a common law
Employee. However, the term Employee will not include any individual who is not
reported on the payroll records of the Employer or an affiliated Employer as a
common law Employee. If such person is later determined by the Employer or by a
court or governmental agency to be or to have been an Employee, he or she will
only be eligible for participation prospectively and may participate in the Plan
as of the next entry date following such determination and after the
satisfaction of all other eligibility requirements”

9.             Delete definition of the term “401(k) Account” in Article II of
the Plan in its entirety and insert the following new definition in lieu
thereof:

“‘401(k) Account’ shall mean the account established and maintained for each
Participant who has directed the Employer to make Pre-tax Elective Deferral
Contributions to the Trust on his or her behalf or for whom the Employer has
made 401(k) Employer Contributions to the Trust on his or her behalf, and all
earnings and appreciation thereon, less any withdrawals therefrom and any losses
and expenses charged thereto.”

10.            Insert the following new definitions in Article II of the Plan:

“‘Pre-tax Elective Deferral’ shall mean a Salary Reduction Contribution that is
not includible in the gross income of the Eligible Employee on whose behalf the
contribution is made at the time that the deferral is made.

‘Roth Elective Deferral’ shall mean a Salary Reduction Contribution that has
been irrevocably designated as Roth Elective Deferral by the Participant in his
or her Salary Reduction Agreement and that is includible in the Participant’s
gross income for tax purposes at the time the deferral is made pursuant to Code
Section 402A and any applicable guidance or regulations issued thereunder. Roth
Elective Deferrals may be treated as Catch-Up Contributions. Roth Elective
Deferrals shall be maintained in a separate account for each Participant who has
directed the Employer to make a Roth Elective Deferral to the Trust.

‘Roth Elective Deferral Account’ shall mean the separate account established and
maintained for each Participant who has directed the Employer to make a Roth
Elective Deferrals to the Trust on his or her behalf to record the contribution
and withdrawal of a Participant’s Roth Elective Deferrals and other adjustments
as required by the Plan. No contributions other than designated Roth Elective
Deferrals and direct rollover contributions described in Code Section 402A(c)(3)
may be allocated to a Roth Elective Deferral Account.”

 

11.            Delete definition of the term “Salary Reduction Agreement” in
Article II of the Plan in its entirety and insert the following new definition
in lieu thereof:

“‘Salary Reduction Agreement’ shall mean an agreement between the Employer and
an Eligible Employee as set forth in Sections 3.01(b) and 5.04 of the Plan
pursuant to which the Eligible Employee authorizes the Employer to withhold a
specified percentage of his or her Compensation (otherwise payable in cash) for
deposit to the Plan on behalf of such Employee.”

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12.           Delete definition of the term “Salary Reduction Contribution” in
Article II of the Plan in its entirety and insert the following new definition
in lieu thereof:

“‘Salary Reduction Contribution’ shall mean the Pre-tax Elective Deferrals and
or Roth Elective Deferrals made by the Employer to the Trust on behalf of an
Eligible Employee pursuant to a Salary Reduction Agreement and in accordance
with Section 5.04 of the Plan and or an Automatic Contribution made by the
Employer on behalf of an Eligible Participant pursuant to the Automatic
Contribution Arrangement provisions of Section 5.05 of the Plan.

With respect to any Plan Year the total amount of a Participant’s Salary
Reduction Contributions is the sum of all employer contributions made on behalf
of such Participant pursuant to a deferral under any qualified cash or deferred
arrangement as described in Code Section 401(k), any Simplified Employee Pension
Plan with a cash or deferred arrangement as described in Code Section 408(k)(6),
any SIMPLE IRA Plan described in Code Section 408(p), any plan as described
under Code Section 501(c)(18), and any Employer contributions made on behalf of
a Participant for the purchase of an annuity contract under Code Section 403(b)
pursuant to a Salary Deferral Agreement.

Pre-tax Elective Deferrals or Roth Elective Deferrals shall not include any
deferrals properly distributed as Excess Annual Additions.”

13.            Delete the second paragraph of Section 4.01 of the Plan in its
entirety and insert the following new paragraph in lieu thereof:

“Salary Reduction Contributions, including Catch-up Contributions described in
Code Section 414(v), shall be allocated, as applicable, to a Participant’s
401(k) Account and or Roth Elective Deferral Account as soon as administratively
feasible after being withheld from the Participant’s Compensation at the
earliest date on which such contributions can reasonably be segregated from the
Employer’s general assets but no later than by the 15th business day of the
month following the month in which the Salary Reduction Contributions would have
otherwise been payable to the Participant.”

14.            Delete section 4.04(b) of the Plan in its entirety and insert the
following new paragraph in lieu thereof:

“(b)         For purposes of the minimum allocations set forth above, the
percentage allocated to the Accounts of any Key Employee shall be equal to the
ratio of the sum of the Employer Contributions allocated on behalf of such Key
Employee divided by the Employee’s Compensation for the Plan Year (as defined
for purposes of Article VII), not in excess of the applicable compensation
dollar limitation imposed by Code Section 401(a)(17).”

 

15.            Insert the following new paragraph at the end of Section 5.03 of
the Plan:

“Effective on and after January 1, 2011 the Plan shall accept a direct rollover
from another Roth Elective Deferral Account under a retirement plan as described
in Code Section 402A(e)(1) in accordance with such uniform administrative
procedures as the Plan Administrator shall establish. Notwithstanding the
foregoing sentence, an in-plan Roth rollover shall not be permitted under this
Plan. Any rollover of “designated Roth contributions”, as defined in Subsection
6.01(e), shall be subject to the requirements of Code Section 402(c). To the
extent the Plan accepts Rollover Contributions of designated Roth contributions,
the Plan will separately account for such contributions, including separate
accounting for the portion of the Rollover Contribution that is includible in
gross income and the portion that is not includible in gross income, if
applicable. If the Plan accepts a direct rollover of designated Roth
contributions, the Trustee and the Plan Administrator shall be entitled to rely
on a statement from the distributing plan’s administrator identifying (i) the
Eligible Employee’s basis in the rolled over amounts and (ii) the date on which
the Eligible Employee’s 5-taxable-year period of participation (as required
under Code Section 402A(d)(2) for a qualified distribution of designated Roth
contributions) started under the distributing plan. If the 5-taxable-year period
of participation under the distributing plan would end sooner than the Eligible
Employee’s 5-taxable-year period of participation under the Plan, the
5-taxable-year period of participation applicable under the distributing plan
shall continue to apply with respect to the Rollover Contribution.”

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16.            Delete Section 5.04(a) of the Plan in its entirety and insert the
following two paragraphs in lieu thereof:

“(a)         An Employee who is eligible to participate in the Plan may enter
into a Salary Reduction Agreement with the Employer authorizing the Employer to
withhold a portion of such Participant’s Compensation in order to make Salary
Reduction Contributions to the Plan, including Catch-up Contributions. The
Salary Reduction Agreement shall be made in a form approved by the Plan
Administrator (including, if applicable, by means of telephone, computer, or
other paperless media). The Compensation of any Eligible Employee electing to
make a Salary Reduction Contribution shall be reduced by the whole percentage
requested by the Employee; provided,  however, that the Plan Administrator shall
identify the maximum whole percentage on an annual basis. Any Salary Reduction
Agreement shall become effective as soon as administratively feasible after the
Employee elects to have his or her Compensation reduced. For Plan Years
beginning on or after January 1, 2006, except for occasional, bona fide
administrative considerations, Salary Reduction Contributions made pursuant to a
Salary Reduction Agreement cannot precede the earlier of (1) the performance of
services relating to the contribution and (2) when the compensation that is
subject to the election would be currently available to the Participant in the
absence of an election to defer.

 

Any such Salary Reduction Contribution shall be credited to the Participant’s
401(k) Account or Roth Elective Deferral account, whichever is applicable. A
Participant may terminate deferrals at any time. A Participant may elect at any
time to change or discontinue his or her Salary Reduction Agreement upon notice
in accordance with uniform and nondiscriminatory procedures as the Plan
Administrator shall adopt and communicate to the Participants. Any such election
will be effective as soon as practicable following the receipt of the
notification by the Plan Administrator or its delegate in accordance with
uniform and nondiscriminatory procedures established and communicated to the
Participants. The Plan Administrator may amend or terminate said agreement on
notice to the affected Participant, if required to maintain the qualified status
of the Plan.”

17.            Delete the second paragraph of Section 5.04(b) of the Plan in its
entirety and insert the following new paragraph in lieu thereof:

“(b)        For Plan Years beginning prior to January 1, 2009, “make-up” Salary
Reduction Contributions made by reason of an Eligible Employee’s qualified
military service under Code section 414(u) shall not be taken into account for
any year when calculating an employee’s Actual Deferral Percentage (under
Section 9.01(a)) as provided for in Treasury Regulation section
1.401(k)-2(a)(5)(v) and Match Contributions thereon shall not be taken into
account for any year when calculating an employee’s Average Contribution
Percentage (under Section 10.01(a)) as provided for in Treasury Regulation
section 1.401(m)-2(a)(5)(vi).”

18.            Delete Section 5.05(c)(i) of the Plan in its entirety and insert
the following new section in lieu thereof:

“(i)Automatic Contributions. Except as provided in Section 5.05(d) of the Plan,
an Eligible Participant will be treated as having elected to direct the Employer
to reduce his or her Compensation in order that the Employer may make Pre-tax
Elective Deferrals to the Plan equal to the following uniform percentages of
Compensation:

A.           Initial Period. An Eligible Participant will be treated as having
elected to have the Employer make Pre-tax Elective Deferrals to the Plan in an
amount equal to 3% of his or her Compensation during the initial period. For
this purpose, the initial period begins when the Employee is first subject to
the Automatic Contributions default election under this Section 5.05(c)(i) and
ends on the last day of the following Plan Year.

 

B.             Subsequent Plan Years. For the three Plan Years immediately
following the initial period, an Eligible Participant will be treated as having
elected to have the Employer make Pre-tax Elective Deferrals to the Plan in the
amounts equal to 4%, 5% and 6% respectively, of his or her Compensation. For all
Plan Years thereafter, an Eligible Participant will be treated as having elected
to have the Employer make Pre-tax Elective Deferrals to the Plan in the amounts
equal to 6% of his or her Compensation.

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C.            Treatment of Rehires. The default percentages of Compensation
stated above for the purposes of the Automatic Contributions are based on the
date the initial period begins, regardless of whether the Employee continues to
be eligible to make Pre-tax Elective Deferrals under the Plan after that date.
Thus, the applicable percentage is generally determined based on the number of
years since an Automatic Contribution was first made on behalf of an Eligible
Participant. However, if Automatic Contributions are not made on behalf of an
Eligible Participant for an entire Plan Year (e.g., due to termination of
employment), such Eligible Participant shall be treated as having a new initial
period for determining the default percentage of Compensation stated above (if
Automatic Contributions are to recommence with respect to the Eligible
Participant), regardless of what minimum percentage would otherwise apply to
that Eligible Participant.”

19.            Delete the first sentence of Section 7.12 of the Plan in its
entirety and insert the following new sentence in lieu thereof:

“The sum of the following amounts credited to a Participant’s Accounts for the
Limitation Year except as otherwise provided below:

(i)           Employer contributions;

(ii)          Employee contributions;

(iii)        forfeitures; and

(iv)        allocations under a simplified employee pension.”

20.             Delete the last paragraph of Section 7.12 of the Plan in its
entirety and insert the following new paragraph in lieu thereof:

“Other Amounts. Annual Additions shall not include: (1) The direct transfer of a
benefit or employee contributions from a qualified plan to this Plan;
(2) Rollover contributions (as described in Code Section 401(a)(31), 402(c)(1),
403(a)(4), 403(b)(8), 408(d)(3), and 457(e)(16)); (3) Repayments of loans made
to a Participant from the Plan; (4) Catch-up Contributions; and (5) Repayments
of amounts described in Code Section 411(a)(7)(B) (in accordance with Code
Section 411(a)(7)(C)) and Code Section 411(a)(3)(D), as well as Employer
restorations of benefits that are required pursuant to such repayments, as
provide for in Plan Section 13.11.”

 

21.           Delete the first paragraph of Section 8.01 of the Plan in its
entirety and insert the following new paragraph in lieu thereof:

“The Plan Administrator or its agent shall establish a separate recordkeeping
account for each Participant showing the fair market value of his or her Plan
benefits. Each Participant’s account may be separated for recordkeeping purposes
into the following sub-accounts: 401(k) Account, Roth Elective Deferral Account,
Match Contribution Account, Non-Elective Employer Contribution Account, Regular
Account, Rollover Account, Tax Deductible Contribution Account and Voluntary
Contribution Account and such other accounts as the Plan Administrator shall
deem appropriate for each Participant to account for the Participant’s Accrued
Benefit. All contributions by or on behalf of a Participant shall be deposited
to the appropriate Account.”

22.            Add the following new sentence at the end of Section 9.01(d) of
the Plan:

“Excess Elective Deferrals shall be treated as Annual Additions under the Plan,
unless such amounts are distributed no later than the first April 15 following
the close of the Participant’s taxable year. Distribution of Excess Elective
Deferrals for a year shall be made first from the Participant’s 401(k) Account
to the extent that Pre-tax Elective Deferrals were made for the year.”

23.            Add the following new paragraph after the first paragraph of
Section 9.08 of the Plan:

“The Plan Administrator may adopt a uniform written administrative policy that
permits a Participant (including a Highly Compensated Employee) who has made
Salary Reduction Contributions for a year where such contributions include both
pre-tax Elective Deferrals and Roth Elective Deferrals to elect whether the
Excess Elective Deferrals, are to be attributed to Pre-tax Elective Deferrals or
Roth Elective Deferrals or a combination of the two. In the event that no such
administrative policy is adopted, Excess Elective Deferrals will be first
attributed to Pre-tax Elective Deferrals, and if such pre-tax contributions are
not in an amount sufficient to make full correction, will then be attributed to
Roth Elective Deferrals.”

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24.            Delete the title and first sentence of Section 11.02 of the Plan
in their entirety and insert the following new title and new first sentence in
lieu thereof:

“11.02 Withdrawals from Match Contribution, 401(k) Account, Roth Elective
Deferral Account, and Non-Elective Employer Contribution Accounts. At any time
after a Participant attains Age 59 1/2 or is Totally and Permanently Disabled, a
Participant shall have the right to request the Plan Administrator for a
withdrawal in cash of amounts from the vested portion of his or her Match
Contribution, 401(k) Account, or Roth Elective Deferral Account.”

 

25.           Delete the sentence in the first paragraph of Section 11.02 of the
Plan beginning “For Plan Years beginning after 1988…” in its entirety and insert
the following new sentence in lieu thereof:

“For Plan Years beginning after 1988, an Employee shall have the right at any
time to request the Plan Administrator for a withdrawal in cash of Salary
Reduction Contributions, with earnings accrued thereon as of December 31, 1988
for “financial hardship”.”

26.           Delete the paragraph in Section 11.02 of the Plan beginning “The
processing of applications and any distributions of amounts under this Section…”
and insert the following new paragraph in lieu thereof:

“The processing of applications and any distributions of amounts under this
Section shall be made as soon as administratively feasible. The amount of a
distribution based upon “financial hardship,” less any income and penalty taxes,
cannot exceed the amount required to meet the immediate financial need created
by the hardship and not reasonably available from other resources of the
Employee.”

27.           Delete the paragraph in Section 11.02 of the Plan beginning “In
determining whether a hardship distribution is permissible the following special
rules shall apply…” and insert the following new paragraph in lieu thereof:

“In determining whether a hardship distribution is permissible the following
special rules shall apply:

(i)The following are the only financial needs considered immediate and heavy:’

A.           Expenses incurred or necessary for medical care that would be
deductible under Code Section 213(d) (determined without regard to whether the
expenses exceed 7.5% of adjusted gross income) of the Employee, his or her
spouse, children and other dependents;

B.           The cost directly related to the purchase (excluding mortgage
payments) of the principal residence of the Employee;

C.           Payment of tuition and related educational expenses (including but
not limited to expenses associated with room and board) for up to the next
twelve (12) months of post-secondary education for the Employee, his or her
spouse, children or other dependents as defined in Code Section 152, without
regard to Code Sections 152(b)(1), (b)(2) and (d)(1)(B);

 

D.           The need to prevent eviction of the Employee, from, or a
foreclosure on the mortgage of, the Employee’s principal residence;

E.            Effective for the Plan Years commencing on and after January 1,
2012, payments for burial or funeral expenses for the Employee’s deceased
parent, spouse, child or dependent as defined in Code Section 152 without regard
to Code Section 152(d)(1)(B); or

F.            Effective for the Plan Years commencing on and after January 1,
2012, expenses for the repair of damage to the Employee’s principal residence
that would qualify for the casualty deduction under Code Section 165 (determined
without regard to whether the loss exceeds 10% of adjusted gross income).

(ii)A distribution will be considered as necessary to satisfy an immediate and
heavy financial need of the Employee only if:

A.            The Employee has obtained all distributions, other than hardship
distributions, and all nontaxable loans under all plans maintained by the
Employer;

B.            All plans maintained by the Employer provide that the Employee’s
Salary Reduction Contributions (and any other Employee contributions) will be
suspended for six months (twelve months for hardship distributions made prior to
January 1, 2002) after the receipt of the hardship distribution; provided that
in the case of any Employee who has made an Affirmative Election, Salary
Reduction Contributions, if any, under such an election shall resume at the end
of such suspension period and provided further that in the case of an Eligible
Participant who has not made an Affirmative Election, Automatic Contributions
shall resume at the end of such suspension period subject to the provisions of
Section 5.05 of the Plan.

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C.            The distribution, less any income and penalty taxes, is not in
excess of the amount of an immediate and heavy financial need; and

D.            In addition for hardship distributions made before 2002, all plans
maintained by the Employer provide that the Employee may not make Salary
Reduction Contributions for the Employee’s taxable year immediately following
the taxable year of the hardship distribution in excess of the applicable limit
under Section 402(g)(1) of the Code for such taxable year less the amount of
such Salary Reduction Contributions for the taxable year of the hardship
distribution.”

 

28.            Delete the first sentence of Section 11.04 of the Plan in its
entirety and insert the following new sentence in lieu thereof:

“The Plan Administrator may impose a dollar minimum for partial withdrawals and
may implement on a uniform and nondiscriminatory basis, an ordering rule for
in-service withdrawals from a Participant’s Account.”

29.            Delete the fifth paragraph of Section 12.01 of the Plan in its
entirety and insert the following new paragraph in lieu thereof:

“If the Plan Administrator approves a request for a loan, funds shall be
withdrawn from the recordkeeping sub-accounts, including Roth Elective
Deferrals, in the order specified in the loan policy provided that Tax
Deductible Voluntary Contributions, plus earnings thereon, may not be used as
security for Plan loans.”

30.            Add the following new sentence at the end of Section 13.04 of the
Plan:

“Moreover, the Plan will credit the Participant’s qualified military service as
service for vesting purposes, as though the Participant had resumed employment
under USERRA immediately prior to the Participant’s death.”

31.             Add the following new paragraph at the end of Section 13.06 of
the Plan:

“Notwithstanding any provisions of this Plan relating to required minimum
distributions under Code section 401(a)(9), a Participant or Beneficiary who
would have been required to receive required minimum distributions for 2009 but
for the enactment of section 401(a)(9)(H) of the Code (“2009 RMDs”), and who
would have satisfied that requirement by receiving distributions that are equal
to the 2009 RMDs will not receive those distributions for 2009 unless the
Participant or Beneficiary chooses to receive such distributions. Participants
and Beneficiaries described in the preceding sentence will be given the
opportunity to elect to receive the distributions described in the preceding
sentence.”

32.            Insert the following new sentence immediately after the first
sentence of the definition of the term, “eligible rollover distribution” as set
forth in Section 13.13 of the Plan:

“An eligible rollover distribution also does not include: any corrective
distributions of Excess Elective Deferrals or Roth Elective Deferrals under Code
Section 402(g), and the income attributable thereto.”

 

33.            Delete the definition of the term, “Direct Rollover” as set forth
in Section 13.13 of the Plan in its entirety and insert the following new
definition in lieu thereof:

“Direct Rollover: A direct rollover is a payment by the Plan to the eligible
retirement plan specified by the distributee. A Direct Rollover of a
distribution from a Roth Elective Deferral Account under this Plan will be made
to another Roth Elective Deferral Account under an applicable retirement plan
described in Code Section 402A(e)(1) or to a Roth IRA described in Code
Section 408A, and only to the extent the rollover is permitted under the rules
of Code Section 402(c).

Notwithstanding the provisions of this Plan relating to required minimum
distributions under Code Section 401(a)(9), and solely for purposes of applying
the direct rollover provisions of the Plan, 2009 RMDs (as defined in section
13.06 of the Plan), but only if paid with an additional amount that is an
eligible rollover distribution without regard to IRC §401(a)(9)(H), will be
treated as eligible rollover distributions.”

34.            Delete the first two paragraphs of Section 13.13(c) of the Plan
in their entirety and insert the following new paragraphs in lieu thereof:

“For distributions after June 9, 2009, a non-spouse Beneficiary who is a
“designated beneficiary” under Code Section 401(a)(9)(E) and the regulations
thereunder, by a direct trustee-to-trustee transfer (“direct rollover”), may
roll over all or any portion of his or her distribution to an individual
retirement account or a individual retirement annuity as defined in Code
Section 408(a) and 408(b) or Roth IRA as defined in Code Section 408A. In order
to be able to roll over the distribution, the distribution otherwise must
satisfy the definition of an eligible rollover distribution.

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Although a non-spouse Beneficiary may roll over directly a distribution as
provided above, any distribution made prior to January 1, 2010 is not subject to
the direct rollover requirements of Code 401(a)(31) (including Code
Section 401(a)(31)(B), the notice requirements of Code Section 402(f) or the
mandatory withholding requirements of Code Section 3405(c)). If a non-spouse
Beneficiary receives a distribution from the Plan, the distribution is not
eligible for a “60-day” rollover.”

35.            Delete the last sentence of the first paragraph of Section 18.02
of the Plan in its entirety and insert the following new sentence in lieu
thereof:

“For Plan Years beginning on or after January 1, 2007, a partial plan
termination shall be deemed to have occurred based on the facts and
circumstances in existence at the time as required by Section 1.411(d)-2(b)(1)
of the Treasury Regulations and Revenue Ruling 2007-43 and upon any such partial
termination, the rights of all affected employees to the amounts credited to
their accounts shall be non-forfeitable.”

This Amendment shall supersede the provisions of the Plan to the extent those
provisions are inconsistent with the provisions of this Amendment and, except as
hereby amended; the Plan shall remain in full force and effect.

 

IN WITNESS WHEREOF, this Amendment has been executed this 21st day of
December, 2011.

 

 

 

 

 

THE HANOVER INSURANCE COMPANY

 

 

By:

/s/ Lorna Stearns

 

Lorna D. Stearns, Vice President

 

 

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THE HANOVER INSURANCE GROUP, INC.

RETIREMENT SAVINGS PLAN

SECOND AMENDMENT

to the Restatement Generally Effective January 1, 2010

This Second Amendment is executed by The Hanover Insurance Company, a New
Hampshire corporation (the “Corporation”).

WHEREAS, the most recent restatement of the Plan was adopted on December 21,
2010 and was generally effective January 1, 2010, and such restatement was
amended by the adoption of the first Amendment on December 21, 2011; and

WHEREAS, the Corporation has reserved the right to amend the Plan any time under
Section 19.01 of the Plan; and

WHEREAS, the Corporation now desires to amend the Plan.

NOW, THEREFORE, the Plan is amended as follows:

1.              The following new sentence is added immediately following the
first sentence of Section 11.02:

“During the period beginning January 1, 2004 and ending April 27, 2010 and on
and after January 10, 2012, a Participant who has attained age 591/2 or is
Totally and Permanently Disabled may also withdraw any part or all of the vested
portion of his or her Non-Elective Employer Contribution Account.”

2.              The second paragraph of Section 13.06 is deleted in its entirety
and the following new paragraph is inserted in lieu thereof:

“All distributions under this Plan will be made in accordance with Code section
401(a)(9), including the incidental death benefit requirements of the Code
section, §401 (a)(9)G, regulations §1.401 (a)(9)-2 through §1.401 (a)(9)-9, and
any other provisions reflecting Code section 401 (a)(9) that are prescribed in
revenue rulings, notices and other guidance published in the Internal Revenue
Bulletin. The Plan provisions reflecting Code section 401(a)(9) shall override
any distribution options set out in the Plan that are inconsistent with Code
section 401(a)(9).”

This Amendment shall supersede the provisions of the Plan to the extent those
provisions are inconsistent with the provisions of this Amendment. Except as
amended hereby, the Plan shall remain in full force and effect in accordance
with its terms.

IN WITNESS WHEREOF, this Second Amendment has been executed this 20th day of
June, 2012.

 

 

 

 

 

THE HANOVER INSURANCE COMPANY

 

 

By:

/s/ Lorna D. Stearns

 

Lorna D. Stearns, Vice President

 

 

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THE HANOVER INSURANCE GROUP, INC.

RETIREMENT SAVINGS PLAN

THIRD AMENDMENT

to the Restatement Generally Effective January 1, 2010

This Third Amendment is executed by The Hanover Insurance Company, a New
Hampshire corporation (the “Corporation”).

WHEREAS, the most recent restatement of the Plan was adopted on December 21,
2010 and was generally effective January 1, 2010, and such restatement was
amended by the adoption of the First Amendment on December 21, 2011; and

WHEREAS, the a Second Amendment to the most recent restatement of the Plan has
been proposed, and such amendment has not been adopted but shall be; and

WHEREAS, the Corporation has reserved the right to amend the Plan any time under
Section 19.01 of the Plan; and

WHEREAS, the Corporation desires to amend the Plan to provide vesting credits to
certain employees of the Corporation whose employment with the Corporation will
be terminated in connection with the sale of Citizen’s Management, Inc. on or
about April 30, 2012.

NOW, THEREFORE, the Plan is amended as follows:

1.              Section 13.01(a) of the Plan is amended by the addition of the
following new sentence at the end of second paragraph Section 13.01(a) of:

“Notwithstanding the foregoing provisions of this paragraph, the Match
Contribution and Non-Elective Employer Contribution Accounts of each Employee
whose employment with The Hanover Insurance Company was terminated in connection
with the sale of Citizen’s Management, Inc. on or about April 30, 2012 shall be
100% vested and nonforfeitable upon his or her termination of employment.”

This Amendment shall supersede the provisions of the Plan to the extent those
provisions are inconsistent with the provisions of this Amendment. Except as
amended hereby, the Plan shall remain in full force and effect in accordance
with its terms.

IN WITNESS WHEREOF, this Second Amendment has been executed this 27th day of
April, 2012.

 

 

 

 

 

THE HANOVER INSURANCE COMPANY

 

 

By:

/s/ Lorna D. Stearns

 

Lorna D. Stearns, Vice President

 

 

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THE HANOVER INSURANCE GROUP, INC.

RETIREMENT SAVINGS PLAN

FOURTH AMENDMENT

to the Restatement Generally Effective January 1, 2010

This Fourth Amendment is executed by The Hanover Insurance Company, a New
Hampshire corporation (the “Corporation”).

WHEREAS, the most recent restatement of the Plan was adopted on December 21,
2010 and was generally effective on January 1, 2010 and such restatement was
amended by the adoption of the First Amendment on December 21, 2011; the Second
Amendment on June 20, 2012; and the Third Amendment on April 27, 2012;

WHEREAS, the Corporation has reserved the right to amend the Plan at any time
under Section 19.01 of the Plan; and

WHEREAS, the Corporation desires to amend the Plan to provide vesting credits to
certain employees of the Corporation whose employment with the Corporation was
terminated in connection with the AIX transaction described below.

NOW, THEREFORE, the Plan is amended as follows:

1.              Section 13.01(a) of the Plan is amended by the addition of the
following new sentence at the end of second paragraph Section 13.01(a):

“Notwithstanding the foregoing provisions of this paragraph, the Match
Contribution and Non-Elective Employer Contribution Accounts of each of the
following two Employees whose employment with The Hanover Insurance Company was
terminated in connection with a transaction between AIX and XX pursuant to a
certain Market Facilitation Agreement dated February 14, 2013 shall be 100%
vested and nonforfeitable upon his or her termination of employment: XX and XX.”

This Amendment shall supersede the provisions of the Plan to the extent those
provisions are inconsistent with the provisions of this Amendment. Except as
amended hereby, the Plan shall remain in full force and effect in accordance
with its terms.

IN WITNESS WHEREOF, this Fourth Amendment has been executed this 21st day of
June 2013.

 

 

 

 

 

THE HANOVER INSURANCE COMPANY

 

 

By:

 

 

 

Maribeth Bearfield

Executive Vice President

 

 

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THE HANOVER INSURANCE GROUP, INC.

RETIREMENT SAVINGS PLAN

 

FIFTH AMENDMENT

to the Restatement Generally Effective January 1, 2010

 

This Fifth Amendment is executed by The Hanover Insurance Company, a
New Hampshire Corporation (“the Corporation").

 

WHEREAS, the Corporation sponsors The Hanover Insurance Group Retirement
Savings Plan (the "Plan");

 

WHEREAS, the most recent restatement  of the Plan was adopted  on
December  21, 2011 was generally effective  on January  1, 2010 and such
restatement  was amended  by the adoption of the First Amendment on
December  21, 2011; the Second  Amendment  on June 20, 2012; the Third Amendment
on April 27, 2012; and the Fourth Amendment on July 21, 2013;

 

WHEREAS, the Corporation has reserved the right to amend the Plan at any time
under

Section 19.01 of the Plan; and

 

WHEREAS, the Corporation desires to amend the Plan to clarify its administrative
practices with respect to the manner in which Participants are permitted to
elect to make or not to make Salary Reduction Contributions to the Plan.

 

NOW, THEREFORE, the Plan is amended, effective as of the date hereof, as
follows:

 

1.             The definition of the term "Affirmative Election" in Article II
of the Plan is deleted in its entirety and the following new Section 2.04 is
inserted in lieu thereof:

 

"'Affirmative Election' shall mean an election by an Eligible Participant to (a)
make Salary Reduction Contributions to the Plan at the whole percentage of his
or her Compensation or at the separate whole percentages of his or her salary
and other Compensation specified in his or her Salary Reduction Agreement, or
(b) not to make Salary Reduction Contributions to the Plan.

 

2.             The definition of the term "Salary Reduction Agreement" in
Article II of the Plan is deleted in its entirety and the following new
definition is inserted in lieu thereof:

 

"Salary  Reduction  Agreement" shall mean an agreement  between  the Employer
and an Eligible Employee as set forth in Sections 3.0l(b) and 5.04 pursuant  to
which the Eligible Employee  authorizes  the Employer  to withhold  the
specified  whole percentage of his or her Compensation or the
specified  separate  whole percentages of his or her salary and other
Compensation for deposit  to the Plan on behalf of such Eligible  Employee.

 

3.              Section 4.03 of the Plan is amended by the addition of the
following new paragraph (d):

 

"(d)          Notwithstanding any other provision in the Plan to the contrary
and subject to compliance with

applicable Code discrimination laws, rules and regulations, each Participant who
was an Employee on December 31, 2013, has been continuously employed from
December 31, 2013 through March 3, 2014 and who earned Compensation during the
Plan Year ended December 31, 2013, shall receive an Employer paid contribution
of $500.00, whether or not such Employee has elected to make Salary Reduction
Contributions to the Plan during such continuous period of employment.  This
Employer contribution shall be made in cash to the Non-Elective Employer
Contribution Account established for any such eligible Participant on or as soon
after March 3, 2014 as is practicable and shall be invested per the direction of
the Participant in accordance with Section 16.02 of the Plan."

 

4. The first paragraph of Section 5.04(a) of the Plan is deleted in its entirety
and the following new paragraph is inserted in lieu thereof:

 

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"An Eligible Employee or Eligible Participant may enter into a Salary Reduction
Agreement with the Employer authorizing the Employer to withhold a portion of
his or her Compensation in order to make Salary Reduction Contributions to the
Plan, including Catch-up Contributions.  The Salary Reduction Agreement shall be
in such form as the Plan Administrator shall approve (including, if applicable
by such means as telephonic communication or electronic media).  Each Eligible
Employee or Eligible Participant who enters into a Salary Reduction Agreement
shall specify a whole percentage of his or her Compensation or separate whole
percentages of his or her salary and other Compensation to be withheld by the
Employer and deposited to the Plan on his or her behalf.  Each Salary Reduction
Agreement shall become effective as soon after the Eligible Employee or Eligible
Participant has entered into the Salary Reduction Agreement as is
administratively feasible.  For Plan Years beginning on or after January 1,
2006, except for occasional, bona fide administrative considerations, Salary
Reduction Contributions made pursuant to a Salary Reduction Agreement cannot
precede the earlier of (1) the performance of services relating to the
contribution and (2) when the Compensation that is subject to the election would
be currently available to the Participant in the absence of an election to
defer."

This Amendment shall supersede the provisions of the Plan to the extent those
provisions are inconsistent with the provisions of this Amendment.  Except as
amended hereby, the Plan shall remain in full force and effect in accordance
with its terms.

IN WITNESS WHEREOF, this Fifth Amendment has been executed this 25th day
of February, 2014.

 

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THE HANOVER INSURANCE GROUP, INC.

RETIREMENT SAVINGS PLAN

 

SIXTH AMENDMENT

to the Restatement Generally Effective January 1, 2010

 

 

This Sixth Amendment is executed by The Hanover Insurance Company, a New
Hampshire corporation (the "Corporation").

 

WHERAS, the Corporation sponsors The Hanover Insurance Group Retirement Savings
Plan (the “Plan”);

 

WHEREAS, the most recent restatement of the Plan was adopted on December 21,
2010 was generally effective on January 1, 2010 and such restatement was amended
by the adoption of the First Amendment on December 21, 2011; the Second
Amendment on June 20, 2012; the Third Amendment on Apri127, 2012; the Fourth
Amendment on July 21, 2013; and the Fifth Amendment on February 25, 2014;

 

WHEREAS, the Corporation has reserved the right to amend the Plan at any time
under Section 19.01 of the Plan; and

 

WHEREAS, the Corporation desires to amend the Plan to clarify the definition of
the term "spouse" as to comply with the United States Supreme Court's  decision
in United States v. Windsor, 133 S. Ct. 2675 (2013).

 

NOW, THEREFORE, the Plan is amended, effective June 26, 2013, as follows:

 

1.             The following new definition is added to Article II:

 

"Spouse" or "spouse" means the individual person to whom a Participant is
legally married for Federal tax purposes on the applicable date required by the
context or as otherwise provided for in the Plan; provided, however, that from
June 26, 2013 through September 15, 2013, any reference to those terms means the
individual, if any, to whom the Participant is married in a marriage that is
recognized under the laws of the state of the Participant's residence on
that date.

 

2.            The last sentence of the first paragraph of Section 13.08 is
deleted in its entirety and the following new sentence is inserted in lieu
thereof:

 

For purposes of this Section the term "spouse" means the spouse of the
Participant on the date of the Participant’s death or on the date Plan benefits
commence, whichever is applicable: provided that a former spouse will be treated
in the same manner as a spouse to the extent provided under a Qualified Domestic
Relations Order as described in Code Section 414(p).

 

This Amendment shall supersede the provisions of the Plan to the extent those
provisions are inconsistent with the provisions of this Amendment.  Except as
amended hereby, the Plan shall remain in full force and effect in accordance
with its terms.

 

IN WITNESS WHEREOF, this Sixth Amendment has been executed this 16th day of
December. 2014.

 

 

Picture 3 [thg-20141231ex10331a9a0g001.jpg]

 

 

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THE  HANOVER INSURANCE GROUP, INC.

RETIREMENT SAVINGS PLAN

 

SEVENTH AMENDMENT

to the Restatement Generally Effective January 1, 2010

 

This Seventh Amendment is executed by The Hanover Insurance Company, a
New Hampshire corporation (the "Corporation").

 

WHEREAS, the Corporation sponsors The Hanover Insurance Group Retirement
Savings Plan (the "Plan");

 

WHEREAS, the most recent restatement of the Plan was adopted on December 21,
2011, was generally effective on January 1, 2010 and such restatement was
amended by the adoption of the First Amendment on December 21, 2011; the Second
Amendment on June 20, 2012; the Third Amendment on April27, 2012; the Fourth
Amendment on July 21, 2013; the Fifth Amendment on February 25, 2014; and the
Sixth Amendment on December 16, 2014; and

 

WHEREAS, the Corporation has reserved the right to amend the Plan at any time
under Section 19.0 I of the Plan.

 

NOW, THEREFORE, the Plan is amended, effective as of the date hereof, as
follows:

 

1.              Section 4.03 of the Plan is amended by the addition of the
following new paragraph (e):

 

"(e)         Notwithstanding  any other provision in the Plan to the contrary
and subject to compliance with applicable Code discrimination laws, rules and
regulations, each Participant who was an Employee on December 31, 2014, has been
continuously employed from December 31, 2014 through March 2, 2015 and who
earned Compensation during the Plan Year ended December 31,2014, shall receive
an Employer paid contribution of $500.00, whether or not such Employee has
elected to make Salary Reduction Contributions to the Plan during such
continuous period of employment.  This Employer contribution shall be made in
cash to the Non-Elective  Employer Contribution Account established for any such
eligible Participant on or as soon after March 2, 2015 as is practicable and
shall be invested per the direction of the Participant in accordance with
Section 16.02 of the Plan."

 

This Amendment shall supersede the provisions of the Plan to the extent those
provisions are inconsistent with the provisions of this Amendment.  Except as
amended hereby, the Plan shall remain in full force and effect in accordance
with its terms.

 

IN WITNESS WHEREOF, this Seventh Amendment has been executed this 28th day
of January, 2015.

 

THE HANOVER INSURANCE COMPANY

Picture 1 [thg-20141231ex10331a9a0g002.jpg]

 

 

 

 

 

 

 

 

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