exv10w1



 




Exhibit 10.1




QUANEX CORPORATION

EMPLOYEE’S 401(k) SAVINGS PLAN




Amended and Restated

Effective January 1, 2007



 


 









 





Exhibit 10.1




QUANEX CORPORATION EMPLOYEES’ 401(k) SAVINGS PLAN




THIS AGREEMENT adopted by Quanex Corporation, a Delaware corporation (the “Sponsor”),



W I T N E S S E T H:




WHEREAS, effective April 1, 1986, the Sponsor established the Quanex Corporation Employee
Savings Plan;



WHEREAS, the Quanex Corporation Employee Savings Plan is intended to be a profit sharing plan;




WHEREAS, effective January 1, 2007, the Sponsor desires to merge the Quanex Corporation 401(k)
Savings Plan, the Mikron Industries, Inc. Salary Deferral Plan and the TruSeal Technologies, Inc.
401(k) Profit Sharing Plan into the Quanex Corporation Employee Savings Plan;



WHEREAS, the Sponsor desires to amend and restate the Quanex Corporation Employee Savings Plan
and rename the plan the Quanex Corporation Employees’ 401(k) Savings Plan;



NOW, THEREFORE, the plan is hereby amended and restated in its entirety as set forth below.


 


 









 





TABLE OF CONTENTS




	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	Page
	ARTICLE I          DEFINITIONS	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	1.01	 	 	Account
	 	I-1
	 

	 	 	1.02	 	 	Active Service
	 	I-1
	 

	 	 	1.03	 	 	Affiliated Employer
	 	I-1
	 

	 	 	1.04	 	 	Annual Compensation
	 	I-2
	 

	 	 	1.05	 	 	Applicable Distribution Period
	 	I-2
	 

	 	 	1.06	 	 	Beneficiary or Beneficiaries
	 	I-3
	 

	 	 	1.07	 	 	Benefit Commencement Date
	 	I-3
	 

	 	 	1.08	 	 	Board or Board of Directors
	 	I-3
	 

	 	 	1.09	 	 	Catch-up Eligible Participant
	 	I-3
	 

	 	 	1.10	 	 	Claimant
	 	I-3
	 

	 	 	1.11	 	 	Code
	 	I-3
	 

	 	 	1.12	 	 	Committee
	 	I-3
	 

	 	 	1.13	 	 	Considered Compensation
	 	I-3
	 

	 	 	1.14	 	 	Contribution
	 	I-4
	 

	 	 	1.15	 	 	Decatur Plan
	 	I-4
	 

	 	 	1.16	 	 	Direct Rollover
	 	I-4
	 

	 	 	1.17	 	 	Disability
	 	I-4
	 

	 	 	1.18	 	 	Distributee
	 	I-5
	 

	 	 	1.19	 	 	Distribution Calendar Year
	 	I-5
	 

	 	 	1.20	 	 	Eligible Employee
	 	I-5
	 

	 	 	1.21	 	 	Eligible Retirement Plan
	 	I-5
	 

	 	 	1.22	 	 	Eligible Rollover Distribution
	 	I-5
	 

	 	 	1.23	 	 	Employee
	 	I-6
	 

	 	 	1.24	 	 	Employee Savings Plan
	 	I-6
	 

	 	 	1.25	 	 	Employer or Employers
	 	I-6
	 

	 	 	1.26	 	 	ERISA
	 	I-6
	 

	 	 	1.27	 	 	Final Section 401(a)(9) Regulations
	 	I-6
	 

	 	 	1.28	 	 	Five Percent Owner
	 	I-6
	 

	 	 	1.29	 	 	Forfeitable Interest
	 	I-6
	 

	 	 	1.30	 	 	401(k) Savings Plan
	 	I-6
	 

	 	 	1.31	 	 	Highly Compensated Employee
	 	I-6
	 

	 	 	1.32	 	 	Hour of Service
	 	I-6
	 

	 	 	1.33	 	 	Leased Employee
	 	I-6
	 

	 	 	1.34	 	 	Maternity or Paternity Absence
	 	I-6
	 

	 	 	1.35	 	 	Mikron Plan
	 	I-7
	 

	 	 	1.36	 	 	Nonforfeitable Interest
	 	I-7
	 

	 	 	1.37	 	 	Non-Highly Compensated Employee
	 	I-7
	 

	 	 	1.38	 	 	Participant
	 	I-7
	 

	 	 	1.39	 	 	Period of Service
	 	I-7
	 

	 	 	1.40	 	 	Period of Severance
	 	I-7
	 

	 	 	1.41	 	 	Plan
	 	I-7
	 

	 	 	1.42	 	 	Plan Year
	 	I-7






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TABLE OF CONTENTS

(continued)




	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	Page
	 
	 	 	 	 	 	 	 	 
	 

	 	 	1.43	 	 	Qualified Domestic Relations Order
	 	I-7
	 

	 	 	1.44	 	 	Regulation
	 	I-7
	 

	 	 	1.45	 	 	Required Beginning Date
	 	I-7
	 

	 	 	1.46	 	 	Retirement Age
	 	I-8
	 

	 	 	1.47	 	 	Rollover Contribution
	 	I-8
	 

	 	 	1.48	 	 	Section 401(a)(9) Beneficiary
	 	I-8
	 

	 	 	1.49	 	 	Separates From Service
	 	I-8
	 

	 	 	1.50	 	 	Separation From Service
	 	I-8
	 

	 	 	1.51	 	 	Separation From Service Date
	 	I-8
	 

	 	 	1.52	 	 	Sponsor
	 	I-8
	 

	 	 	1.53	 	 	Sponsor Stock
	 	I-9
	 

	 	 	1.54	 	 	Spouse
	 	I-9
	 

	 	 	1.55	 	 	TruSeal Plan
	 	I-9
	 

	 	 	1.56	 	 	Trust
	 	I-9
	 

	 	 	1.57	 	 	Trustee
	 	I-9
	 

	 	 	1.58	 	 	Valuation Date
	 	I-9
	 
	 	 	 	 	 	 	 	 
	ARTICLE II          ELIGIBILITY	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	2.01	 	 	Eligibility Requirements
	 	II-1
	 

	 	 	2.02	 	 	Eligibility Upon Reemployment
	 	II-1
	 

	 	 	2.03	 	 	Cessation of Participation
	 	II-1
	 

	 	 	2.04	 	 	Recommencement of Participation
	 	II-1
	 
	 	 	 	 	 	 	 	 
	ARTICLE III          CONTRIBUTIONS	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	3.01	 	 	Salary Deferral Contributions
	 	III-1
	 

	 	 	3.02	 	 	Catch-up Salary Deferral Contributions
	 	III-1
	 

	 	 	3.03	 	 	After-Tax Contributions
	 	III-2
	 

	 	 	3.04	 	 	Matching Contributions
	 	III-2
	 

	 	 	3.05	 	 	Supplemental Contributions
	 	III-2
	 

	 	 	3.06	 	 	Rollover Contributions and Plan-to-Plan Transfers
	 	III-3
	 

	 	 	3.07	 	 	QNECS — Extraordinary Employer Contributions
	 	III-3
	 

	 	 	3.08	 	 	Restoration Contributions
	 	III-3
	 

	 	 	3.09	 	 	Restorative Payments
	 	III-3
	 

	 	 	3.10	 	 	Nondeductible Contributions Not Required
	 	III-3
	 

	 	 	3.11	 	 	Form of Payment of Contributions
	 	III-3
	 

	 	 	3.12	 	 	Deadline for Payment of Contributions
	 	III-4
	 

	 	 	3.13	 	 	Return of Contributions for Mistake, Disqualification
or Disallowance of Deduction
	 	III-4
	 
	 	 	 	 	 	 	 	 
	ARTICLE IV          ALLOCATION AND VALUATION OF ACCOUNTS	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	4.01	 	 	Information Statements from Employer
	 	IV-1
	 

	 	 	4.02	 	 	Allocation of Salary Deferral Contributions
	 	IV-1
	 

	 	 	4.03	 	 	Allocation of Catch-up Salary Deferral Contribution
	 	IV-1
	 

	 	 	4.04	 	 	Allocation of After-Tax Contributions
	 	IV-1






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(continued)




	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	Page
	 
	 	 	 	 	 	 	 	 
	 

	 	 	4.05	 	 	Allocation of Matching Contributions
	 	IV-1
	 

	 	 	4.06	 	 	Allocation of Supplemental Contributions
	 	IV-1
	 

	 	 	4.07	 	 	Allocation of QNECs
	 	IV-1
	 

	 	 	4.08	 	 	Allocation of Forfeitures
	 	IV-2
	 

	 	 	4.09	 	 	Valuation of Accounts
	 	IV-2
	 

	 	 	4.10	 	 	No Rights Unless Otherwise Prescribed
	 	IV-2
	 
	 	 	 	 	 	 	 	 
	ARTICLE V          BENEFITS	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	5.01	 	 	Benefit Upon a Separation From Service or Retirement
	 	V-1
	 

	 	 	5.02	 	 	Death Benefit
	 	V-1
	 

	 	 	5.03	 	 	Distribution Method
	 	V-1
	 

	 	 	5.04	 	 	Payment Upon or Following Separation From Service
	 	V-1
	 

	 	 	5.05	 	 	Direct Rollover Option
	 	V-1
	 

	 	 	5.06	 	 	Required Distributions
	 	V-2
	 

	 	 	5.07	 	 	Consent to Distribution
	 	V-4
	 

	 	 	5.08	 	 	Information Provided to Participants
	 	V-4
	 

	 	 	5.09	 	 	Designation of Beneficiary
	 	V-5
	 

	 	 	5.10	 	 	Distributions to Minors and Incapacitated Persons
	 	V-5
	 

	 	 	5.11	 	 	Distributions Pursuant to Qualified Domestic Relations Orders
	 	V-5
	 

	 	 	5.12	 	 	Claims Review Procedures; Claims Appeal Procedures
	 	V-6
	 

	 	 	5.13	 	 	Disability Benefit Claims Procedure
	 	V-6
	 
	 	 	 	 	 	 	 	 
	ARTICLE VI          LOANS	 	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE VII          IN-SERVICE DISTRIBUTIONS	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	7.01	 	 	In-Service Financial Hardship Distributions
	 	VII-1
	 

	 	 	7.02	 	 	In-Service Distribution of After-Tax Contributions and
Matching Contributions
	 	VII-2
	 

	 	 	7.03	 	 	In-Service Distributions for Participants Who Have Attained Age 591/2
	 	VII-3
	 

	 	 	7.04	 	 	Method of Payment
	 	VII-3
	 
	 	 	 	 	 	 	 	 
	ARTICLE VIII          VESTING	 	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE IX          FORFEITURES AND RESTORATIONS	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	9.01	 	 	Forfeiture on Termination of Participation
	 	IX-1
	 

	 	 	9.02	 	 	Restoration of Forfeited Amounts
	 	IX-1
	 

	 	 	9.03	 	 	Forfeitures by Lost Participants or Beneficiaries
	 	IX-1
	 
	 	 	 	 	 	 	 	 
	ARTICLE X          ACTIVE SERVICE	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	10.01	 	 	General
	 	X-1
	 

	 	 	10.02	 	 	Disregard of Certain Service
	 	X-1
	 

	 	 	10.03	 	 	Certain Brief Absences Counted as Active Service
	 	X-1
	 

	 	 	10.04	 	 	Service Credit Required by Law
	 	X-1
	 

	 	 	10.05	 	 	Special Maternity or Paternity Absence Rules
	 	X-1
	 

	 	 	10.06	 	 	Employment Records Conclusive
	 	X-2
	 

	 	 	10.07	 	 	Credit for Service With North Star Steel Company
	 	X-2






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(continued)




	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	Page
	 
	 	 	 	 	 	 	 	 
	 

	 	 	10.08	 	 	Credit for Service With Other Employers
	 	X-2
	 

	 	 	10.09	 	 	Special Transitional Rules
	 	X-2
	 
	 	 	 	 	 	 	 	 
	ARTICLE XI          INVESTMENT ELECTIONS	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	11.01	 	 	Investment Funds Established
	 	XI-1
	 

	 	 	11.02	 	 	Election Procedures Established
	 	XI-1
	 
	 	 	 	 	 	 	 	 
	ARTICLE XII          ADOPTION OF PLAN BY OTHER EMPLOYERS	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	12.01	 	 	Adoption Procedure
	 	XII-1
	 

	 	 	12.02	 	 	No Joint Venture Implied
	 	XII-1
	 

	 	 	12.03	 	 	All Trust Assets Available to Pay All Benefits
	 	XII-1
	 

	 	 	12.04	 	 	Qualification a Condition Precedent to Adoption and Continued Participation
	 	XII-1
	 
	 	 	 	 	 	 	 	 
	ARTICLE XIII          AMENDMENT AND TERMINATION	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	13.01	 	 	Right to Amend and Limitations Thereon
	 	XIII-1
	 

	 	 	13.02	 	 	Mandatory Amendments
	 	XIII-1
	 

	 	 	13.03	 	 	Withdrawal of Employer
	 	XIII-2
	 

	 	 	13.04	 	 	Termination of Plan
	 	XIII-2
	 

	 	 	13.05	 	 	Partial or Complete Termination or Complete Discontinuance of Contributions
	 	XIII-2
	 
	 	 	 	 	 	 	 	 
	ARTICLE XIV          MISCELLANEOUS	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	14.01	 	 	Plan Not an Employment Contract
	 	XIV-1
	 

	 	 	14.02	 	 	Benefits Provided Solely From Trust
	 	XIV-1
	 

	 	 	14.03	 	 	Assignments Prohibited
	 	XIV-1
	 

	 	 	14.04	 	 	Requirements Upon Merger or Consolidation of Plans
	 	XIV-2
	 

	 	 	14.05	 	 	Gender of Words Used
	 	XIV-2
	 

	 	 	14.06	 	 	Severability
	 	XIV-2
	 

	 	 	14.07	 	 	Reemployed Veterans
	 	XIV-2
	 

	 	 	14.08	 	 	Limitations on Legal Actions
	 	XIV-2
	 

	 	 	14.09	 	 	Governing Law
	 	XIV-2
	 

	 	 	14.10	 	 	Special Provisions Applicable to Nichols Aluminum-Golden, Inc. Employees
	 	XIV-2






Appendix A          LIMITATIONS ON CONTRIBUTIONS AND ALLOCATIONS



Appendix B          TOP-HEAVY REQUIREMENTS



Appendix C          ADMINISTRATION OF THE PLAN



Appendix D          FUNDING



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Article I




DEFINITIONS




The words and phrases defined in this Article shall have the meaning set out in the definition
unless the context in which the word or phrase appears reasonably requires a broader, narrower or
different meaning.



1.01 “Account” means all ledger accounts pertaining to a Participant or former Participant
which are maintained by the Committee to reflect the Participant’s or former Participant’s interest
in the Trust. The Committee shall establish the following Accounts and any additional Accounts
that the Committee considers necessary to reflect the entire interest of the Participant or former
Participant in the Trust. Each of the Accounts listed below and any additional Accounts
established by the Committee shall reflect the Contributions or amounts transferred to the Trust,
if any, and the appreciation or depreciation of the assets in the Trust and the income earned or
loss incurred on the assets in the Trust attributable to the Contributions and/or other amounts
transferred to the Account.




(a) Salary Deferral Contribution Account — the Participant’s or former Participant’s
before-tax contributions, if any, made pursuant to Section 3.01.




(b) Catch-up Salary Deferral Account — the Participant’s or former Participant’s
before-tax contributions, if any, made pursuant to Section 3.02.




(c) After-Tax Contribution Account — the Participant’s or former Participant’s
after-tax contributions, if any, made pursuant to Section 3.03.




(d) Matching Contribution Account — the Employer’s matching contributions, if any,
made pursuant to Section 3.04.




(e) Supplemental Contribution Account — the Employer’s contributions, if any, made
pursuant to Section 3.05.




(f) QNEC Account — the Employer’s contributions, known as “qualified nonelective
employer contributions”, made as a means of passing the actual deferral percentage test set
forth in section 401(k) of the Code or the actual contribution percentage test set forth in
section 401(m) of the Code.




(g) Rollover Account —  funds transferred from another qualified plan or individual
retirement account for the benefit of a Participant or former Participant.



1.02 “Active Service” means the Periods of Service which are counted for eligibility and
vesting purposes as calculated under Article X.



1.03 “Affiliated Employer” means the Employer and any employer which is a member of the same
controlled group of corporations within the meaning of section 414(b) of the Code or which is a
trade or business (whether or not incorporated) which is under common control (within the meaning
of section 414(c) of the Code), which is a member of an affiliated service group (within the meaning of section 414(m) of the Code) with the Employer, or which is
required to be aggregated with the Employer under section 414(o) of the Code. For purposes of the
limitation on allocations contained in Appendix A, the definition of Affiliated Employer is
modified by substituting the phrase “more than 50 percent” in place of the phrase “at least 80
percent” each place the latter phrase appears in section 1563(a)(1) of the Code.



 


I-1









 








1.04 “Annual Compensation” means the Employee’s wages from the Affiliated Employers as defined
in section 3401(a) of the Code for purposes of federal income tax withholding at the source (but
determined without regard to any rules that limit the remuneration included in wages based on the
nature or location of the employment or the services performed) modified by including elective
contributions under a cafeteria plan maintained by an Affiliated Employer that are excludable from
the Employee’s gross income pursuant to section 125 of the Code, elective contributions under a
qualified transportation fringe benefit plan maintained by an Affiliated Employer that are
excludable from the Employee’s gross income pursuant to section 132(f)(4) of the Code and elective
contributions made on behalf of the Employee to any plan maintained by an Affiliated Employer that
is qualified under or governed by section 401(k), 408(k), or 403(b) of the Code. Except for
purposes of Section A.4.1 of Appendix A of the Plan, Annual Compensation in excess of $200,000.00
(as adjusted by the Secretary of Treasury for increases in the cost of living) will be disregarded.
If the Plan Year is ever less than twelve months, the $200,000.00 limitation (as adjusted by the
Secretary of Treasury for increases in the cost of living) will be prorated by multiplying the
limitation by a fraction, the numerator of which is the number of months in the Plan Year, and the
denominator of which is twelve (12).




1.05 “Applicable Distribution Period” means:




(a) Distributions During the Participant’s or former Participant’s Life. For
Distribution Calendar Years commencing on or after January 1, 2003, up to and including the
Distribution Calendar Year that includes the Participant’s or former Participant’s death,
the “Applicable Distribution Period” is the Participant’s or former Participant’s life
expectancy determined using the Uniform Lifetime Table in Regulation section 1.401(a)(9)-9
for his age as of his birthday in the relevant Distribution Calendar Year. However, if the
Participant’s or former Participant’s sole Section 401(a)(9) Beneficiary for the entire
Distribution Calendar Year is his Spouse, for distributions during his lifetime, his
“Applicable Distribution Period” shall not be less than the joint life expectancy of him and
his Spouse using his and his Spouse’s attained ages as of his and his Spouse’s birthdays in
the Distribution Calendar Year.




(b) Distributions after the Participant’s or former Participant’s Death. Effective for
Distribution Calendar Years commencing on or after January, 1, 2003, if a Participant or
former Participant dies on or after his Required Beginning Date, the “Applicable
Distribution Period” for Distribution Calendar Years after the Distribution Calendar Year
containing the Participant’s or former Participant’s date of death is the longer of the
remaining life expectancy of his Section 401(a)(9) Beneficiary (if any) determined in
accordance with the Final Section 401(a)(9) Regulations (calculated by using the age of the
Section 401(a)(9) Beneficiary in the year following the year of the former Participant’s
death, reduced by one for each subsequent year) or the remaining life expectancy of the
former Participant determined in accordance with the Final Section 401(a)(9) Regulations (calculated by using the age of the former Participant in the
year of death, reduced by one or each subsequent year). However, if the former
Participant’s surviving Spouse is the former Participant’s sole Section 401(a)(9)
Beneficiary, the remaining life expectancy of the surviving Spouse is calculated for each
Distribution Calendar Year after the year of the former Participant’s death using the
surviving Spouse’s age as the surviving Spouse’s birthday in that year; and for distribution
calendar years after the year of the surviving Spouse’s death, the remaining life expectancy
of the surviving Spouse is calculated using the age of the surviving Spouse as of the
surviving Spouse’s birthday in the calendar year of the surviving Spouse’s death, reduced by
one for each subsequent calendar year.



(c) Distribution Calendar Years Commencing Before January 1, 2003. For Distribution
Calendar Years commencing before January 1, 2003, “Applicable Distribution Period” means the
period of time computed in accordance with the applicable rules specified in Section
5.06(f).



 


I-2









 











1.06 “Beneficiary” or “Beneficiaries” means the person or persons, or the trust or trusts
created for the benefit of a natural person or persons or the Participant’s or former Participant’s
estate, designated by the Participant or former Participant to receive the benefits payable under
the Plan upon his death.



1.07 “Benefit Commencement Date” means the date on which the Trustee disburses the lump sum or
rollover distribution.




1.08 “Board” or “Board of Directors” means the board of directors of the Sponsor.



1.09 “Catch-up Eligible Participant” means a Participant who is age 50 or who is projected to
attain the age of 50 by December 31 of the applicable Plan Year.




1.10 “Claimant” means a Participant, former Participant or Beneficiary, as applicable.




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



1.12 “Committee” means the committee appointed by the Sponsor to administer the Plan.



1.13 “Considered Compensation” means Annual Compensation paid to a Participant by an
Affiliated Employer for a Plan Year, reduced by all of the following items (even if includable in
gross income): all reimbursements or other expense allowances (such as the payment of moving
expenses or automobile mileage reimbursements), cash and noncash fringe benefits (such as the use
of an automobile owned by the Employer, club memberships, tax gross-ups, attendance and safety
awards, fitness reimbursements, housing allowances, financial planning benefits and Beneflex
opt-out dollars), deferred compensation (such as amounts realized upon the exercise of a
nonqualified stock option or upon the premature disposition of an incentive stock option, pay for
accrued vacation upon Separation From Service, amounts realized when restricted property or other
property held by a Participant either becomes freely transferable or no longer subject to a
substantial risk of forfeiture under section 83 of the Code), and welfare benefits (such as
severance pay). An Employee’s Considered Compensation paid to him during any period in which he is not eligible to participate in the Plan under Article II
shall be disregarded. Considered Compensation in excess of $200,000.00 (as adjusted by the
Secretary of Treasury for increases in the cost of living) will be disregarded. If the Plan Year
is ever less than twelve months, the $200,000.00 limitation (as adjusted by the Secretary of
Treasury for increases in the cost of living) will be prorated by multiplying the limitation by a
fraction, the numerator of which is the number of months in the Plan Year, and the denominator of
which is twelve (12).




 


I-3









 








1.14 “Contribution” means the total amount of contributions made under the terms of the Plan.
Each specific type of Contribution shall be designated by the type of contribution made as follows:




(a) Salary Deferral Contribution — a before-tax contribution made by the Employer
pursuant to Section 3.01 and the Employee’s salary deferral agreement.




(b) Catch-up Salary Deferral Contribution — a contribution made by the Employer
pursuant to Section 3.02 and the Participant’s salary deferral agreement.




(c) After-Tax Contribution — an after-tax contribution made by the Employee.




(d) Matching Contribution — a contribution made by the Employer pursuant to Section
3.04.




(e) Supplemental Contribution — a contribution made by the Employer pursuant to
Section 3.05.




(f) QNEC — an extraordinary contribution, known as a “qualified nonelective employer
contribution”, that is an employer contribution other than a Matching Contribution,
Supplemental Contribution or an elective contribution that the Employee may not elect to
have paid to him in cash instead of being contributed to the Plan, and that meets the
nonforfeitability and distribution restrictions that apply to elective contributions under
plans governed by section 401(k) of the Code.




(g) Rollover Contribution  — a contribution made by a Participant which consists of any
part of an eligible rollover distribution (as defined in section 402 of the Code) from a
qualified employee trust described in section 401(a) of the Code.



1.15 “Decatur Plan” means the Decatur Aluminum Corporation Salaried Employees’ 401(k)
Retirement Plan and Trust.



1.16 “Direct Rollover” means a payment by the Plan to the Eligible Retirement Plan specified
by the Distributee.



1.17 “Disability” means a mental or physical disability which, in the opinion of a physician
selected by the Committee, shall prevent the Participant or former Participant from earning a
reasonable livelihood with any Affiliated Employer and 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 and
which: (a) was not contracted, suffered or incurred while the Participant or former Participant was engaged in, or did not result from having engaged in, a felonious
criminal enterprise; (b) did not result from alcoholism or addiction to narcotics; and (c) did not
result from an injury incurred while a member of the Armed Forces of the United States for which
the Participant or former Participant receives a military pension.



 


I-4









 








1.18 “Distributee” means an Employee or former Employee. In addition, the Employee’s or
former Employee’s surviving Spouse and the Employee’s or former Employee’s Spouse or former Spouse
who is the alternate payee under a Qualified Domestic Relations Order, are Distributees with regard
to the interest of the Spouse or former Spouse.



1.19 “Distribution Calendar Year” A calendar year for which a minimum distribution is required
to be made to a Participant or former Participant under section 401(a)(9) of the Code and
Department of Treasury Regulations thereunder. If a Participant’s or former Participant’s Required
Beginning Date is April 1 of the calendar year following the calendar year in which he attains age
701/2, his first Distribution Calendar Year is the calendar year in which he attains age 701/2. If a
Participant’s or former Participant’s Required Beginning Date is April 1 of the calendar year
following the calendar year in which he incurs a Separation From Service, his first Distribution
Calendar Year is the calendar year in which he incurs a Separation From Service.



1.20 “Eligible Employee” means an Employee who is employed by an Employer and that is not
included in a unit of Employees covered by a collective bargaining agreement between the Employees’
representative and the Employer, unless the collective bargaining agreement requires that such
Employee be an Eligible Employee under the Plan.



1.21 “Eligible Retirement Plan” means (a) an individual retirement account described in
section 408(a) of the Code, (b) an individual retirement annuity described in section 408(b) of the
Code (other than an endowment contract), (c) an annuity plan described in section 403(a) of the
Code, (d) a qualified plan described in section 401(a) of the Code that is a defined contribution
plan that accepts the Distributee’s Eligible Rollover Distribution, (e) an eligible deferred
compensation plan described in section 457(b) of the Code that is maintained by an eligible
employer described in section 457(e)(1)(A) of the Code but only if the plan agrees to separately
account for amounts rolled into such plan, or (f) an annuity contract described in section 403(b)
of the Code.



1.22 “Eligible Rollover Distribution” means 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: (a) 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 Beneficiary,
or for a specified period of ten years or more; (b) any distribution to the extent the distribution
is required under section 401(a)(9) of the Code; (c) the portion of any distribution that is not
includable in gross income (determined without regard to the exclusion for net unrealized
appreciation with respect to employer securities) unless the Eligible Retirement Plan to which the
distribution is transferred (1) agrees to separately account for amounts so transferred, including
separately accounting for the portion of such distribution which is not includable in gross income
or (2) is an individual retirement account described in section 408(a) of the Code or an individual
retirement annuity described in section 408(b) of the Code (other than an endowment contract);
and, (d) a distribution from any of the Participant’s Accounts due to a financial hardship of
the Participant.


 


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1.23 “Employee” means, except as otherwise specified in this Section, all common law employees
of an Affiliated Employer and all Leased Employees.



1.24 “Employee Savings Plan” means this Plan prior to its amendment and restatement as the
Quanex Corporation Employee 401(k) Savings Plan, and prior to the mergers of the 401(k) Savings
Plan, the Mikron Plan and the TruSeal Plan into the Plan.



1.25 “Employer” or “Employers” means the Sponsor and any other business organization that
adopts the Plan. As of January 1, 2007, the term “Employer” includes: Quanex Corporation,
MACSTEEL Monroe, Inc., Nichols Aluminum-Alabama, Inc., Colonial Craft, Inc., Imperial Products,
Inc., Mikron Industries, Inc., Mikron Washington LLC , Besten Equipment, Inc. and TruSeal
Technologies, Inc.



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



1.27 “Final Section 401(a)(9) Regulations” means the final Department of Treasury Regulations
issued under section 401(a)(9) of the Code which were published in the Federal Register on April
17, 2002.



1.28 “Five Percent Owner” means an Employee who is a five percent owner as defined in section
416(i) of the Code.



1.29 “Forfeitable Interest” means a Participant’s or former Participant’s forfeitable interest
in amounts credited to his Account determined in accordance with Article VIII.



1.30 “401(k) Savings Plan” means the Quanex Corporation 401(k) Savings Plan.



1.31 “Highly Compensated Employee” means an Employee or an Affiliated Employer who, during the
Plan Year or the preceding Plan Year, (a) was at any time a Five Percent Owner at any time during
the Plan Year or the preceding Plan Year or (b) had Annual Compensation from the Affiliated
Employers in excess of $80,000.00 (as adjusted from time to time by the Secretary of the Treasury)
for the preceding Plan Year.



1.32 “Hour of Service” means each hour that an Employee is paid or entitled to payment by an
Affiliated Employer for the performance of duties.



1.33 “Leased Employee” means any person who (a) is not a common law employee of an Affiliated
Employer, (b) pursuant to an agreement between an Affiliated Employer and any other person, has
performed services for an Affiliated Employer (or for an Affiliated Employer and related persons
determined in accordance with section 414(n)(6) of the Code) on a substantially full-time basis for
a period of at least one year and (c) performs the services under primary direction and control of
the recipient.



1.34 "Maternity or Paternity Absence” means a period in which an Employee is absent from work
(a) by reason of the pregnancy of the Employee, (b) by reason of the birth of a child of the
Employee, (c) by reason of the placement of a child with the Employee in connection with the
adoption of the child by the Employee, or (d) for purposes of caring for such child for a period
immediately following such birth or placement for adoption.




 


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1.35 “Mikron Plan” means the Mikron Industries, Inc. Salary Deferral Plan.



1.36 “Nonforfeitable Interest” means a Participant’s or former Participant’s nonforfeitable
interest in amounts credited to his Account determined in accordance with Article VIII.



1.37 “Non-Highly Compensated Employee” means an Employee who is not a Highly Compensated
Employee.



1.38 “Participant” means an Employee who is eligible to participate in the Plan under the
provisions of Article II.



1.39 “Period of Service” means a period of employment with an Affiliated Employer which
commences on the later of (1) April 1, 1986 or (2) the day on which an Employee performs his
initial Hour of Service or performs his initial Hour of Service after he Separates From Service,
whichever is applicable, and ends on the date the Employee subsequently Separates From Service.



1.40 “Period of Severance” means the period of time commencing on the Employee’s Separation
From Service Date and ending on the date the Employee subsequently performs an Hour of Service.



1.41 “Plan” means the Quanex Corporation Employees’ 401(k) Savings Plan, as amended from time
to time.



1.42 “Plan Year” means the calendar year.



1.43 “Qualified Domestic Relations Order” means a domestic relations order which the Committee
has determined constitutes a qualified domestic relations order within the meaning of section
414(p) of the Code.



1.44 “Regulation” means the Department of Treasury regulation specified, as it may be changed
from time to time.



1.45 “Required Beginning Date” means:




(a) in the case of an individual who is not a Five Percent Owner in the Plan Year that
ends in the calendar year in which he attains age 701/2, the Required Beginning Date is April
1 of the calendar year following the later of (1) the calendar year in which the individual
attains age 701/2, or (2) the calendar year in which the individual incurs a Separation From
Service;



(b) in the case of an individual who is a Five Percent Owner in the Plan Year that ends
in the calendar year in which he attains age 701/2, the Required Beginning Date is April 1 of
the calendar year following the calendar year in which he attains age 701/2; and




(c) notwithstanding subsection (a), in the case of an individual who attained age 701/2
prior to January 1, 2001, the Required Beginning Date is April 1 of the calendar year
following the calendar year in which the individual attained age 701/2.




 


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1.46 “Retirement Age” means age 65. With respect to amounts contributed to the Plan on or
before December 31, 2006, “Retirement Age” also means (1) for a Participant who was a participant
in the Mikron Plan, age 55 and the completion of seven (7) years of service and (2) for a
Participant who was a participant in the TruSeal Plan, the fifth anniversary of the Participant’s
participation in the TruSeal Plan or the Plan.



1.47 “Rollover Contribution” means the amount contributed by a Participant of the Plan which
consists of any part of an Eligible Rollover Distribution from a qualified employee trust described
in section 401(a) of the Code other than an amount that is not includable in the Participant’s
gross income.



1.48 “Section 401(a)(9) Beneficiary” means an individual who is a Participant’s or former
Participant’s Beneficiary on the date of the Participant’s or former Participant’s death and
(unless the Beneficiary dies after the date of the Participant’s or former Participant’s death and
before September 30 of the following calendar year without disclaiming benefits under the Plan) who
remains a Beneficiary as of September 30 of the calendar year following the calendar year of the
Participant’s or former Participant’s death. If the Participant’s or former Participant’s
Beneficiary is a trust, an individual beneficiary of the trust may be a Section 401(a)(9)
Beneficiary of the Participant or former Participant if the requirements of Regulation Section
1.401(a)(9)-4 are satisfied



1.49 “Separates From Service” means the occurrence of a Participant’s or former Participant’s
Separation From Service Date.



1.50 “Separation From Service” means an individual’s termination of employment with an
Affiliated Employer without commencing or continuing employment with any other Affiliated Employer.



1.51 "Separation From Service Date” means the earlier of the date of the Employee’s Separation
From Service, or the first anniversary of the date on which the Employee is absent from service
(with or without pay) for any reason other than his Separation From Service or a Maternity or
Paternity Absence, such as vacation, holiday, sickness, or leave of absence. The Separation From
Service Date of an Employee who is absent beyond the first anniversary of his first day of absence
by reason of a Maternity or Paternity Absence is the second anniversary of the first day of the
absence.



1.52 “Sponsor” means Quanex Corporation, a Delaware corporation.


 


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1.53 “Sponsor Stock” means the common stock of the Sponsor or such other publicly-traded stock
of an Affiliated Employer as meets the requirements of section 407(d)(5) of ERISA with respect to
the Plan.



1.54 “Spouse” means the person to whom the Participant or former Participant is married under
applicable local law. In addition, to the extent provided in a Qualified Domestic Relations Order,
a surviving former spouse of a Participant or former Participant will be treated as the Spouse of
the Participant or former Participant, and to the same extent any current spouse of the Participant
or former Participant will not be treated as a Spouse of the Participant or former Participant. For
purposes of Section 5.06, a former Spouse to whom all or a portion of a Participant’s or former
Participant’s Plan benefit is payable under a Qualified Domestic Order shall, to that extent, be
treated as a Spouse or surviving Spouse regardless of whether the Qualified Domestic Relations
Order specifically provides that the former Spouse is to be treated as the Spouse for purposes of
Sections 401(a)(11) and 417 of the Code.




1.55 “TruSeal Plan” means the TruSeal Technologies, Inc. 401(k) Profit Sharing Plan.




1.56 “Trust” means the trust estate created to fund the Plan.



1.57 “Trustee” means collectively one or more persons or corporations with trust powers which
have been appointed by the initial Sponsor and have accepted the duties of Trustee and any
successor appointed by the Sponsor.




1.58 “Valuation Date” means each business day of the Plan Year.




 


I-9









 







Article II




ELIGIBILITY




2.01 Eligibility Requirements. Each Eligible Employee shall be eligible to participate in the
Plan beginning on the first day he performs one Hour of Service. However, an Employee who is
included in a unit of Employees covered by a collective bargaining agreement between the Employees’
representative and the Employer shall be excluded, even if he has met the requirements for
eligibility, if there has been good faith bargaining between the Employer and the Employees’
representative pertaining to retirement benefits and the agreement does not require the Employer to
include such Employees in the Plan. In addition, a Leased Employee shall not be eligible to
participate in the Plan unless the Plan’s qualified status is dependent upon coverage of the Leased
Employee. An Employee who is a nonresident alien (within the meaning of section 7701(b) of the
Code) and receives no earned income (within the meaning of section 911(d)(2) of the Code) from any
Affiliated Employer that constitutes income from sources within the United States (within the
meaning of section 861(a)(3) of the Code) is not eligible to participate in the Plan. An Employee
who is a nonresident alien (within the meaning of section 7701(b) of the Code) and who does receive
earned income (within the meaning of section 911(d)(2) of the Code) from any Affiliated Employer
that constitutes income from sources within the United States (within the meaning of section
861(a)(3) of the Code) all of which is exempt from United States income tax under an applicable tax
convention is not eligible to participate in the Plan. During any period in which an individual is
classified by an Employer as an independent contractor with respect to such Employer, the
individual is not eligible to participate in the Plan (even if he is subsequently reclassified by
the Internal Revenue Service as a common law employee of the Employer and the Employer acquiesces
to the reclassification). During any period in which an individual is classified by an Employer as
an intern or student with respect to such Employer, the individual is not eligible to participate
in the Plan. Finally, an Employee who is employed outside the United States is not eligible to
participate in the Plan unless the Committee elects to permit him to participate in the Plan.



2.02 Eligibility Upon Reemployment. If an Employee incurs a Separation From Service, he shall
be eligible to recommence participation in the Plan beginning on the first day he performs one Hour
of Service following his Separation From Service. Subject to Section 2.03, once an Employee
becomes a Participant, his eligibility to participate in the Plan shall continue until he Separates
From Service.



2.03 Cessation of Participation. An individual who has become a Participant will cease to be
a Participant on the earliest of the date on which he (a) Separates From Service, (b) is
transferred from the employ of an Employer to the employ of an Affiliated Employer that has not
adopted the Plan, (c) becomes included in a unit of employees covered by a collective bargaining
agreement that does not require coverage of those employees under the Plan, (d) becomes a Leased
Employee, or (e) becomes included in another classification of Employees who, under the terms of
the Plan, are not eligible to participate. Under these circumstances, the Participant’s Account
becomes frozen; he cannot contribute to the Plan or share in the allocation of any Contributions
for the frozen period. However, his Accounts shall continue to share in any Plan income allocable
to his Accounts during the frozen period of time.



2.04 Recommencement of Participation. A former Participant will again become a Participant on
the day on which he again becomes included in a classification of Employees that, under the terms
of the Plan, is eligible to participate.


 


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Article III




CONTRIBUTIONS




3.01 Salary Deferral Contributions. Each Employer shall make a Salary Deferral Contribution
in an amount equal to the amount by which the Considered Compensation of its Employees who are
Participants was reduced on a pre-tax basis pursuant to salary deferral agreements (excluding
amounts of Considered Compensation deferred pursuant to Section 3.02 that are properly
characterized as Catch-up Salary Deferral Contributions). Any such salary deferral agreement shall
be an agreement in a form satisfactory to the Committee to prospectively receive Considered
Compensation from the Employer in a reduced amount and to have the Employer contribute an amount
equal to the amount of the reduction to the Trust on account of the Participant. Any such salary
deferral agreement shall be revocable in accordance with its terms, provided that no revocation
shall be retroactive or permit payment to the Participant of the amount required to be contributed
to the Trust. A Participant’s or former Participant’s right to benefits attributable to Salary
Deferral Contributions made to the Plan on his behalf shall be nonforfeitable.



This paragraph shall be effective January 1, 2007. Except as provided below, each Employee
who first becomes employed by the Employer on or after January 1, 2007 and who satisfies the
requirements of Section 3.1 shall have three percent (3%) of his Considered Compensation
automatically deducted from his pay as a Salary Deferral Contribution to this Plan (the “Automatic
Deduction”). No Automatic Deduction shall be made with respect to an Employee if (a) the Employee
affirmatively elects a different level of Salary Deferral Contributions in accordance with the
provisions of this Plan or (b) the Employee affirmatively elects not to make Salary Deferral
Contributions in accordance with the provisions of this Plan.



The maximum amount a Participant may elect to reduce his Considered Compensation under his
salary deferral agreement and have contributed to the Plan on a pre-tax basis shall be determined
by the Committee, in its sole discretion from time to time. The election to have Salary Deferral
Contributions made, the ability to change the rate of Salary Deferral Contributions, the right to
suspend Salary Deferral Contributions, and the manner of commencing new Salary Deferral
Contributions shall be permitted under any uniform method determined by the Committee from time to
time.



3.02 Catch-up Salary Deferral Contributions. The Employer shall make a Catch-up Salary
Deferral Contribution in an amount equal to the amounts by which its Catch-up Eligible
Participants’ Considered Compensation was reduced as a result of salary deferral agreements
authorizing Catch-up Salary Deferral Contributions (to the extent that their deferrals are properly
characterized as Catch-up Salary Deferral Contributions). Any such salary deferral agreement shall
be an agreement in a form satisfactory to the Committee to prospectively receive Considered
Compensation from the Employer in a reduced amount and to have the Employer contribute an amount
equal to the amount of the reduction to the Trust on behalf of the Catch-up Eligible Participant.
Further, any such salary deferral agreement shall be revocable in accordance with its terms,
provided that no revocation shall be retroactive or permit payment to the Participant of the amount
required to be contributed to the Trust. A Participant’s or former
Participant’s right to benefits derived from Catch-up Salary Deferral Contributions made to
the Plan on his behalf shall be nonforfeitable.


 


III-1









 





Catch-up Salary Deferral Contributions on behalf of a Catch-up Eligible Participant shall be
permitted to the extent that the Catch-up Salary Deferral Contributions do not exceed the lesser of
(a) the “applicable dollar amount” under section 414(v) of the Code for the Plan Year (as adjusted
from time to time by the Secretary of Treasury), or (b) an amount equal to the Participant’s Annual
Compensation for the Plan Year minus the Catch-up Eligible Participant’s Salary Deferral
Contributions for the Plan Year.



A final determination as to whether amounts deferred under the Plan by a Catch-up Eligible
Participant are properly characterized as Salary Deferral Contributions or Catch-up Salary Deferral
Contributions for a Plan Year shall be made as of the end of the Plan Year. To the extent that
amounts deferred under the Plan on a pre-tax basis at the election of a Catch-up Eligible
Participant exceed the least of (a) the lowest statutory limit on Salary Deferral Contributions
(including limits imposed under sections 401(a)(30) and 415 of the Code), (b) the maximum
limitation on Salary Deferral Contributions, if any, imposed by the Committee pursuant to Section
3.01, or (c) the highest amount of Salary Deferral Contributions on behalf of the Catch-up Eligible
Participant that may be retained in the Plan under the rules of section 401(k)(8)(C) of the Code,
the amounts deferred shall be characterized as Catch-up Salary Deferral Contributions. Any amounts
deferred under the Plan on a pre-tax basis at the election of a Catch-up Eligible Participant that
are not properly characterized as Catch-up Salary Deferral Contributions pursuant to the rules of
the preceding sentence shall be characterized as Salary Deferral Contributions for all purposes
under the Plan.



3.03 After-Tax Contributions. To the extent permitted by the Committee, each Participant may
make voluntary after-tax contributions to the Plan through payroll deductions. A Participant’s or
former Participant’s right to benefits attributable to After-Tax Contributions made to the Plan on
his behalf shall be nonforfeitable.



The maximum amount a Participant may elect to contribute to the Plan on an after-tax basis
shall be determined by the Committee from time to time. The election to have After-Tax
Contributions made, the ability to change the rate of After-Tax Contributions, the right to suspend
After-Tax Contributions, and the manner of commencing new After-Tax Contributions shall be
permitted under any uniform method determined by the Committee from time to time.



3.04 Matching Contributions. Each Employer will make a Matching Contribution on behalf of
each of its Employees who is a Participant in an amount equal to 50 percent of the first five
percent of such Participant’s Considered Compensation contributed to the Plan pursuant to such
Participant’s Salary Deferral Contributions. A Participant shall not be entitled to a Matching
Contribution on any After-Tax Contributions contributed for periods beginning after December 31,
2006.



3.05 Supplemental Contributions. Each Employer may contribute for a Plan Year a Supplemental
Contribution to be allocated among Participants in such amount, if any, as shall be determined by
the Employer. The rate of the Supplemental Contribution need not be uniform among all divisions of
the Employer.


 


III-2









 





3.06 Rollover Contributions and Plan-to-Plan Transfers. The Committee may permit Rollover
Contributions by Participants and/or direct transfers to or from another qualified plan on behalf
of Participants from time to time. If Rollover Contributions and/or direct transfers to or from
another qualified plan are permitted, the opportunity to make those contributions and/or direct
transfers must be made available to Participants on a nondiscriminatory basis. For this purpose
only, all Employees who are included in a classification of Employees who are eligible to
participate in the Plan shall be considered to be Participants of the Plan even though they may not
have met the Active Service requirements for eligibility. However, they shall not be entitled to
elect to have Salary Deferral Contributions made or to share in Employer Contributions or
forfeitures unless and until they have met the requirements for eligibility, contributions and
allocations. A Rollover Contribution shall not be accepted unless it is directly rolled over to
the Plan in a rollover described in section 401(a)(31) of the Code. A Participant shall not be
permitted to make a Rollover Contribution if the property he intends to contribute is for any
reason unacceptable to the Trustee. A Participant’s or former Participant’s right to benefits
attributable to his Rollover Contributions made to the Plan shall be nonforfeitable.



3.07 QNECS — Extraordinary Employer Contributions. Any Employer may make a QNEC in such
amount, if any, as shall be determined by it. A Participant’s or former Participant’s right to
benefits attributable to QNECs made to the Plan on his behalf shall be nonforfeitable. In no event
will QNECs be distributed before Salary Deferral Contributions may be distributed from the Plan.



3.08 Restoration Contributions. The Employer shall, for each Plan Year, make a restoration
contribution in an amount equal to the sum of (a) such amount, if any, as shall be necessary to
fully restore all Matching Contribution Accounts and Supplemental Contribution Accounts required to
be restored pursuant to the provisions of Section 9.02 after the application of all forfeitures
available for such restoration; plus (b) an amount equal in value to the value of forfeited
benefits required to be restored under Section 9.03, after the application of all forfeitures
available for such restoration.



3.09 Restorative Payments. If due to an oversight or inadvertent error an Employer fails to
make a Contribution to the Plan on behalf of a Participant or former Participant, as soon as
administratively practicable following the Employer’s discovery of the error, the Employer shall
make a restorative payment to the Plan on behalf of the Participant or former Participant in an
amount equal to the amount of required Contributions the Employer should have made to the Plan on
behalf of the Participant or former Participant plus interest thereon (both determined in a manner
that is consistent with then current guidance from the Department of Treasury concerning such
restorative payments) after the application of forfeitures available for such restoration.



3.10 Nondeductible Contributions Not Required. Notwithstanding any other provision of the
Plan, no Employer shall be required to make any contribution that would be a “nondeductible
contribution” within the meaning of section 4972 of the Code.



3.11 Form of Payment of Contributions. Contributions may be paid to the Trustee either in
cash or in qualifying employer securities (as such term is defined in section 407(d) of
ERISA) or any combination thereof, provided that payment may not be made in any form
constituting a prohibited transaction under section 4975 of the Code or section 406 of ERISA.


 


III-3









 





3.12 Deadline for Payment of Contributions. Salary Deferral Contributions, Catch-up Salary
Deferral Contributions, and After-Tax Contributions shall be paid to the Trustee in installments.
The installment for each payroll period shall be paid as soon as administratively feasible. The
Matching Contributions, Supplemental Contributions and QNECs for a Plan Year shall be paid to the
Trustee in one or more installments, as the Employer may from time to time determine; provided,
however, that such contributions may not be paid later than the time prescribed by law (including
extensions thereof) for filing the Employer’s income tax return for its taxable year ending with or
within such Plan Year.



3.13 Return of Contributions for Mistake, Disqualification or Disallowance of Deduction.
Subject to the limitations of section 415 of the Code, the assets of the Trust shall not revert to
any Employer or be used for any purpose other than the exclusive benefit of Participants, former
Participants and their Beneficiaries and the reasonable expenses of administering the Plan except:




(a) any Employer Contribution made because of a mistake of fact may be repaid to the
Employer within one year after the payment of the Contribution; and




(b) all Employer Contributions are conditioned upon their deductibility under section
404 of the Code; therefore, to the extent the deduction is disallowed, the Contributions may
be repaid to the Employer within one year after the disallowance.



The Employer has the exclusive right to determine if a Contribution or any part of it is to be
repaid or is to remain as a part of the Trust except that the amount to be repaid is limited, if
the Contribution is made by mistake of fact or if the deduction for the Contribution is disallowed,
to the excess of the amount contributed over the amount that would have been contributed had there
been no mistake or over the amount disallowed. Earnings which are attributable to any excess
contribution cannot be repaid. Losses attributable to an excess contribution must reduce the
amount that may be repaid. All repayments of Contributions made due to a mistake of fact or with
respect to which a deduction is disallowed are limited so that the balance in a Participant’s or
former Participant’s Account cannot be reduced to less than the balance that would have been in the
Participant’s or former Participant’s Account had the mistaken amount or the amount disallowed
never been contributed.


 


III-4









 





Article IV




ALLOCATION AND VALUATION OF ACCOUNTS




4.01 Information Statements from Employer. Upon request by the Committee, the Employer shall
provide the Committee with a schedule setting forth the amount of its Salary Deferral Contribution,
Supplemental Contribution, QNEC, and restoration contribution; the names of its Participants, the
number of years of Active Service of each of its Participants and former Participants, the amount
of Considered Compensation and Annual Compensation paid to each Participant and former Participant,
and the amount of Considered Compensation and Annual Compensation paid to all its Participants and
former Participants. Such schedules shall be conclusive evidence of such facts.



4.02 Allocation of Salary Deferral Contributions. The Committee or its designee shall
allocate the Salary Deferral Contribution among the Participants by allocating to each Participant
the amount by which his Considered Compensation was reduced pursuant to a salary deferral agreement
(as described in Section 3.01) and shall credit each such Participant’s share to his Salary
Deferral Contribution Account.



4.03 Allocation of Catch-up Salary Deferral Contribution. The Committee shall allocate the
Catch-up Salary Deferral Contribution among the Participants by allocating to each Participant the
amount by which his Considered Compensation was reduced pursuant to a salary deferral agreement
under Section 3.02 and shall credit each such Participant’s share to his Catch-up Salary Deferral
Contribution Account.



4.04 Allocation of After-Tax Contributions. The Committee or its designee shall allocate
After-Tax Contributions made by a Participant in the amount of such After-Tax Contributions and
shall credit such After-Tax Contributions to the Participant’s After-Tax Contribution Account.



4.05 Allocation of Matching Contributions. The Committee or its designee shall separately
allocate the Matching Contribution made by an Employer among the Employer’s Participants in the
proportion which the matched Salary Deferral Contributions, matched Catch-up Salary Deferral
Contributions, and, for periods beginning before January 1, 2007, matched After-Tax Contributions
of each such Participant bear to the total matched Salary Deferral Contributions, matched Catch-up
Salary Deferral Contributions, and, for periods beginning before January 1, 2007, matched After-Tax
Contributions of all such Participants. Each Participant’s proportionate share shall be credited
to his Matching Contribution Account.



4.06 Allocation of Supplemental Contributions. For each Plan Year, the Committee or its
designee shall allocate the Supplemental Contribution made by an Employer among the Participants
who are employed by the Employer during the Plan Year, based upon each such Participant’s
Considered Compensation paid by the Employer as compared to the Considered Compensation for all
such Participants employed by the Employer and eligible for the allocation.



4.07 Allocation of QNECs. The Committee or its designee shall separately allocate the QNEC
among the Non-Highly Compensated Employees who are Participants based upon
each such Participant’s Considered Compensation as compared to the Considered Compensation of
all such Participants.


 


IV-1









 





4.08 Allocation of Forfeitures. At the time a forfeiture occurs pursuant to Article IX,
Section A.3.3 of Appendix A, the amount forfeited will first be used to reinstate any Account
required to be reinstated under Article IX, and any remaining amount will be applied to reduce the
Employer’s obligation to make future Matching Contributions or Supplemental Contributions.
However, in no event will amounts forfeited pursuant to Section A.3.3 of Appendix A be allocated to
the Accounts of Participants whose Matching Contributions are forfeited pursuant to Section A.3.3
of Appendix A.



4.09 Valuation of Accounts. A Participant’s or former Participant’s Accounts shall be valued
by the Trustee at fair market value on each Valuation Date. The earnings and losses attributable
to any asset in the Trust will be allocated solely to the Account of the Participant or former
Participant on whose behalf the investment in the asset was made. In determining the fair market
value of the Participant’s or former Participant’s Accounts, the Trustee shall utilize such sources
of information as it may deem reliable including, but not limited to, stock market quotations,
statistical evaluation services, newspapers of general circulation, financial publications, advice
from investment counselors or brokerage firms, or any combination of sources which in the opinion
of the Trustee will provide the price such assets were last traded at on a registered stock
exchange; provided, however, that with respect to regulated investment company shares, the Trustee
shall rely exclusively on information provided to it by the investment adviser to such funds.



4.10 No Rights Unless Otherwise Prescribed. No allocations, adjustments, credits, or
transfers shall ever vest in any Participant or former Participant any right, title, or interest in
the Trust except at the times and upon the terms and conditions set forth in the Plan.


 


IV-2









 





Article V




BENEFITS




5.01 Benefit Upon a Separation From Service or Retirement. Upon his Separation From Service,
a Participant or former Participant is entitled to receive his Nonforfeitable Interest in his
Account balances.



5.02 Death Benefit. If a Participant or former Participant dies, the death benefit payable to
his Beneficiary shall be the Participant’s Nonforfeitable Interest in 100 percent of the remaining
amount of his Account balances.



5.03 Distribution Method. Any distribution under the Plan shall be made in the form of a
single sum in cash.



5.04 Payment Upon or Following Separation From Service.




(a) Immediate Payment of Small Amount Upon Separation From Service. Each Participant
or former Participant whose Nonforfeitable Interest in his Account balance at the time of a
distribution to him on account of his Separation From Service is, in the aggregate, less
than or equal to $1,000.00, shall be paid in the form of an immediate single sum cash
payment and/or as a Direct Rollover, as elected by him under Section 5.05. However, if a
Distributee who is subject to this Section does not furnish instructions in accordance with
Plan procedures to directly roll over his Plan benefit within 45 days after he has been
given direct rollover procedures or forms, he will be deemed to have elected to receive an
immediate lump sum cash distribution of his entire Plan benefit. If a Participant’s or
former Participant’s Nonforfeitable Interest in his Account balance payable upon his
Separation From Service is zero (because he has no Nonforfeitable Interest in his Account
balance), he will be deemed to receive an immediate distribution of his entire
Nonforfeitable Interest in his Account balance.




(b) Age 65. Each Participant or former Participant who has Separated From Service and
who has not elected to receive a distribution of his entire Nonforfeitable Interest in his
Account Balance, shall, upon the attainment of age 65, be paid in the form of an immediate
single sum cash payment and/or as a Direct Rollover, as elected by him under Section 5.05.
If a Distributee who is subject to this Section does not furnish instructions in accordance
with Plan procedures to directly roll over his Plan benefit within 45 days after he has been
given direct rollover procedures or forms, he will be deemed to have elected to receive an
immediate lump sum cash distribution of his entire Nonforfeitable Interest in his Account
Balance.



5.05 Direct Rollover Option. To the extent required under Regulations, a Distributee has the
right to direct that any portion of his Eligible Rollover Distribution will be directly paid to an
Eligible Retirement Plan specified by him that will accept the Eligible Rollover Distribution.


 


V-1









 





5.06 Required Distributions. Notwithstanding any other provision of the Plan, any benefit
payable under the Plan shall be distributed, or commence to be distributed, in compliance with the
following provisions:




(a) Required Distributions for Certain Persons Who are 701/2 or Older. Unless a
Participant’s or former Participant’s entire Nonforfeitable Interest in his Plan benefit is
distributed to him in a single sum no later than his Required Beginning Date, the
Participant’s or former Participant’s Nonforfeitable Interest in his Plan benefit must begin
to be distributed, not later than his Required Beginning Date, over the life of the
Participant or former Participant, or the joint lives of the Participant or former
Participant and his Section 401(a)(9) Beneficiary, or over a period not extending beyond the
life expectancy of the Participant or former Participant or the joint and last survivor
expectancy of the Participant or former Participant and his Section 401(a)(9) Beneficiary.
The distribution required to be made on or before the Participant’s or former Participant’s
Required Beginning Date shall be the distribution required for his first Distribution
Calendar Year. The minimum required distribution for other Distribution Calendar Years,
including the required minimum distribution for the Distribution Calendar Year in which the
Participant’s or former Participant’s Required Beginning Date occurs must be made on or
before December 31 of that Distribution Calendar Year. In the case of a benefit payable in
a form other than a single sum, the amount that must be distributed for a Distribution
Calendar Year is an amount equal to the amount specified in Paragraph (b) of this Section.




(b) Required Minimum Distributions. If a Participant’s or former Participant’s
Required Beginning Date is before the date on which he incurs a Separation From Service, the
Participant or former Participant (if he is then alive) must be paid either the entire
amount credited to his Account or annual distributions from the Plan in the amounts required
under section 401(a)(9) of the Code and Regulations thereunder commencing no later than his
Required Beginning Date until his entire interest under the Plan has been distributed under
this Article XI. The distribution required to be made on or before the Participant’s or
former Participant’s Required Beginning Date shall be the distribution required for his
first Distribution Calendar Year. The minimum required distribution for other Distribution
Calendar Years, including the required minimum distribution for the Distribution Calendar
Year in which the Participant’s or former Participant’s Required Beginning Date occurs must
be made on or before December 31 of that Distribution Calendar Year. The amount that must
be distributed for a Distribution Calendar Year is an amount equal to (1) the Participant’s
or former Participant’s Account balance as of the last Valuation Date in the calendar year
immediately preceding the Distribution Calendar Year, increased by any contributions or
forfeitures allocated and made to the Account during such immediately preceding calendar
year after the Valuation Date, and decreased by distributions made during such immediately
preceding calendar year after the Valuation Date, divided by (2) the Participant’s or former
Participant’s Applicable Distribution Period.




(c) Distribution Deadline for Death Benefit When Participant or Former Participant Dies
Before His Distributions Begin. If a Participant or former Participant dies before the date
distribution of his Nonforfeitable Interest in his Plan benefit begins,
his entire Nonforfeitable Interest in his Plan benefit will be distributed, or begin to
be distributed, to his Section 401(a)(9) Beneficiary no later than as follows:


 


V-2









 






(1) If the Participant’s or former Participant’s surviving Spouse is the Participant’s
or former Participant’s sole Section 401(a)(9) Beneficiary, then distributions to the
surviving Spouse will begin by December 31 of the calendar year immediately following the
calendar year in which the Participant or former Participant died, or by December 31 of the
calendar year in which the Participant or former Participant would have attained age 70 1/2, if later.




(2) If the Participant’s or former Participant’s surviving Spouse is not the
Participant’s or former Participant’s sole Section 401(a)(9) Beneficiary and the payment of
Plan death benefits to the Section 401(a)(9) Beneficiary will not be in the form of a single
sum, then distributions to the Section 401(a)(9) Beneficiary will begin by December 31 of
the calendar year immediately following the calendar year in which the Participant or former
Participant died.




(3) If the Participant’s or former Participant’s surviving Spouse is the Participant’s
or former Participant’s sole Section 401(a)(9) Beneficiary, and the payment of a Plan death
benefit to the Section 401(a)(9) Beneficiary will be in the form of a single sum, then the
Participant’s or former Participant’s entire Nonforfeitable Interest in his Plan benefit
will be distributed by December 31 of the calendar year containing the fifth anniversary of
the Participant’s or former Participant’s death.




(4) If there is no Section 401(a)(9) Beneficiary as of September 30 of the calendar
year following the calendar year of the Participant’s or former Participant’s death, then
the Participant’s or former Participant’s entire Nonforfeitable Interest in his Plan benefit
will be distributed by December 31 of the calendar year containing the fifth anniversary of
the Participant’s or former Participant’s death.




(5) If the Participant’s or former Participant’s surviving Spouse is the Participant’s
or former Participant’s sole Section 401(a)(9) Beneficiary and the surviving Spouse dies
after the Participant or former Participant but before distributions to the surviving Spouse
begin, this Section 5.06(c), other than Section 5.06(c)(1), will apply as if the surviving
Spouse were the Participant.




Unless the Participant’s or former Participant’s interest is distributed in a single
sum on or before the Required Beginning Date, as of the first Distribution Calendar Year
distributions will be made in accordance with Paragraph (b) of this Section.




(d) Distribution of Death Benefit When Participant or Former Participant Dies On or
After His Required Beginning Date. If a Participant or former Participant dies on or after
his Required Beginning Date, his Plan benefit must be distributed to his Section 401(a)(9)
Beneficiary at least as rapidly as the method of payment of minimum required distributions
being used as of the date of his death.


 


V-3









 






(e) Limitations on Death Benefits. Benefits payable under the Plan shall not be
provided in any form that would cause a Participant’s or former Participant’s death
benefit to be more than incidental. Any distribution required to satisfy the incidental
benefit requirement shall be considered a required distribution for purposes of section
401(a)(9) of the Code.




(f) Compliance with Section 401(a)(9). All distributions under the Plan will be made
in accordance with the requirements of section 401(a)(9) of the Code and all Regulations
promulgated thereunder, including, effective January 1, 2001, until
 January 1, 2003, Regulations that were proposed in January of 2001 but not including Regulations that were
proposed prior to January of 2001; and including, effective January 1, 2003, the Final
Section 401(a)(9) Regulations, including sections 1.401(a)(9)-1 through 1.401(a)(9)-9 of the
Final Section 401(a)(9) Regulations. The provisions of the Plan reflecting section
401(a)(9) of the Code override any distribution options in the Plan inconsistent with
section 401(a)(9) of the Code.




(g) Compliance with Section 401(a)(14). Unless the Participant or former Participant
otherwise elects, the payment of benefits under the Plan to the Participant or former
Participant will begin not later than the 60th day after the close of the Plan
Year in which occurs the latest of (a) the date on which the Participant or former
Participant attains the later of age 62 or Retirement Age, (b) the tenth anniversary of the
year in which the Participant or former Participant commenced participation in the Plan, or
(c) the Participant’ or former Participant’s Separation From Service.



5.07 Consent to Distribution. Notwithstanding any other provision of the Plan, no benefit
shall be distributed or commence to be distributed to a Participant or former Participant prior to
his attainment of age 65 without his consent, unless the benefit is payable immediately under
Section 5.04. Any such consent shall be valid only if given not more than 90 days prior to the
Participant’s or former Participant’s Benefit Commencement Date and after his receipt of the notice
regarding benefits described in Section 5.08(a).



5.08 Information Provided to Participants. Information regarding the form of benefits
available under the Plan shall be provided to Participants or former Participants in accordance
with the following provisions:




(a) General Information. The Sponsor shall provide each Participant or former
Participant with a written general explanation of the Participant’s or former Participant’s
right, if any, to defer receipt of the distribution.




(b) Time for Giving Notice. The written general explanation or description regarding
any optional forms of benefit available under the Plan shall be provided to a Participant or
former Participant no less than 30 days and no more than 90 days before his Benefit
Commencement Date unless he legally waives this requirement.




(c) Exception for Participants with Small Benefit Amounts. Notwithstanding the
preceding provisions of the Section, no information regarding any optional forms of benefit
otherwise available under the Plan shall be provided to the Participant or former
Participant if his benefit is payable in a single sum under Section 5.04.


 


V-4









 





5.09 Designation of Beneficiary. Each Participant and former Participant has the right to
designate and to revoke the designation of his Beneficiary or Beneficiaries. Each designation or
revocation must be evidenced in the form required by the Committee, signed by the Participant or
former Participant and filed with the Committee or its designee. If no designation is on file at
the time of a Participant’s or former Participant’s death or if the Committee determines that the
designation is ineffective, the designated Beneficiary shall be the Participant’s or former
Participant’s Spouse, if living, or if not, the executor, administrator or other personal
representative of the Participant’s or former Participant’s estate. If a Participant or former
Participant is considered to be married under local law, his designation of any Beneficiary, other
than his Spouse, shall not be valid unless the Spouse acknowledges in writing or such form as
required by the Committee that the Spouse understands the effect of the Participant’s or former
Participant’s beneficiary designation and consents to it. The consent must be to a specific
Beneficiary. The acknowledgement and consent must be filed with the Committee or its designee,
signed by the Spouse and at least two witnesses, one of whom must be a member of the Committee or a
notary public. However, if the Spouse cannot be located or there exist other circumstances as
described in sections 401(a)(11) and 417(a)(2) of the Code, the requirement of the Participant’s or
former Participant’s Spouse’s acknowledgement and consent may be waived. If a Beneficiary other
than the Participant’s or former Participant’s Spouse is named, the designation shall become
invalid if the Participant or former Participant is later determined to be married under local law,
the Participant’s or former Participant’s missing Spouse is located or the circumstances which
resulted in the waiver of the requirement of obtaining the consent of his Spouse no longer exist.



5.10 Distributions to Minors and Incapacitated Persons. If the Committee determines that any
person to whom a payment is due is a minor or is unable to care for his affairs because of physical
or mental disability, it shall have the authority to cause the payments to be made to the Spouse,
brother, sister or other person the Committee determines to have incurred, or to be expected to
incur, expenses for that person unless a prior claim is made by a qualified guardian or other legal
representative. The Committee and the Trustee shall not be responsible to oversee the application
of those payments. Payments made pursuant to this power shall be a complete discharge of all
liability under the Plan and the Trust and the obligations of the Employer, the Trustee, the Trust
and the Committee.



5.11 Distributions Pursuant to Qualified Domestic Relations Orders. The Committee will
instruct the Trustee to pay benefits in accordance with the terms of any order that has been
determined, in accordance with Plan procedures, to be a Qualified Domestic Relations Order. A
Qualified Domestic Relations Order may require the payment of an immediate cash lump sum to an
alternate payee even if the Participant or former Participant is not then entitled to receive an
immediate payment of Plan benefits.





 


V-5









 





5.12 Claims Review Procedures; Claims Appeal Procedures.




(a) Claims Review Procedures. When a benefit is due, the Claimant should submit a
claim in accordance with procedures prescribed by the Committee. Under normal
circumstances, the Committee or its designee will make a final decision as to a claim within
90 days after receipt of the claim. If the Claimant is notified in writing during the
initial 90-day period, the period may be extended up to 180 days after the initial receipt of the claim. The written notice must indicate the circumstances
necessitating the extension and the anticipated date for the final decision. If a claim is
denied during the claims period, the Claimant must be notified in writing, and the written
notice must set forth in a manner calculated to be understood by the Claimant:





(i) the specific reason or reasons for denial;




(ii) specific reference to the Plan provisions on which the denial is based;




(iii) a description of any additional material or information necessary for the
Claimant to perfect the claim and an explanation of why such material or information
is necessary; and




(iv) an explanation of the Plan claims review procedures and time limits,
including a statement of the Claimant’s right to bring a civil action under section
502(a) of ERISA.




If a decision is not given to the Claimant within the claims review period, the claim
is treated as if it were denied on the last day of the claims review period.




(b) Claims Appeals Procedures. If a Claimant’s claim made pursuant to Section 5.12(a)
is denied and he wants a review, he must apply to the Committee or its designee in writing.
That application can include any arguments, written comments, documents, records, and other
information relating to the claim for benefits. In addition, the Claimant is entitled to
receive on request and free of charge reasonable access to and copies of all information
relevant to the claim. For this purpose, “relevant” means information that was relied on in
making the benefit determination or that was submitted, considered or generated in the
course of making the determination, without regard to whether it was relied on, and
information that demonstrates compliance with the Plan’s administrative procedures and
safeguards for assuring and verifying that Plan provisions are applied consistently in
making benefit determinations. The review must take into account all comments, documents,
records, and other information submitted by the Claimant relating to the claim, without
regard to whether the information was submitted or considered in the initial benefit
determination. The Claimant may either represent himself or appoint a representative,
either of whom has the right to inspect all documents pertaining to the claim and its
denial. The Committee or its designee can schedule any meeting with the Claimant or his
representative that it finds necessary or appropriate to complete its review.




(c) This Section does not apply in connection with determinations as to whether a
Participant or former Participant has incurred a Disability. Rather, such determinations
shall be subject to the procedures specified in Section 5.13.



5.13 Disability Benefit Claims Procedure.




(a) Disability Benefit Initial Determination Procedure. In the case of a claim for
Disability benefits, the Claimant should submit a claim to the office designated
by the Committee to receive claims. Under normal circumstances, the Claimant shall be
notified of any Disability claims denial (wholly or partially) within 45 days after receipt
of the claim.


 


V-6









 






The initial 45-day Disability claims determination period may be extended by a period
not to exceed an additional 30 days, if it is determined that such extension is necessary
due to matters beyond the control of the Committee or its designee. If the initial
Disability claims determination period is extended, the Claimant shall, prior to the
expiration of the initial 45 day Disability claims determination period, be notified in
writing of the extension and of the circumstances requiring the extension of the Disability
claims determination period.




If, prior to the end of the first 30-day extension, it is determined that, due to
matters beyond the control of the Plan, a decision cannot be rendered within the extension
period, the Disability claims determination period may be extended for an additional 30
days, provided that, prior to the expiration of the first 30-day extension period, the
Claimant is notified in writing of the circumstances requiring the extension and the date on
which the Plan expects to render a decision. In the case of any notice extending the
Disability claims determination period, the notice must be in writing and shall specifically
explain the standards on which the entitlement to a benefit is based; the unresolved issues
that prevent a determination on a claim; additional information that is needed to resolve
those issues; and, if additional information is required from the Claimant, a statement as
to the amount of time the Claimant has to supply that information.




Calculation of Time Periods. The period of time within which a Disability benefit
determination is required to be made shall begin on that date the claim is filed in
accordance with this Section, without regard to whether all the information necessary to
make the Disability benefits determination accompanies the filing. In the event the
Disability claims determination period is extended due to the Claimant’s failure to submit
information necessary to such determination, the Disability claims determination period
shall be tolled from the date on which the notification of the extension is sent to the
Claimant until the date on which the Claimant responds to the request for additional
information. The Claimant shall be afforded at least 45 days from receipt of the notice of
extension to provide the specified information. If the Claimant fails to supply the
specified information within the 45-day period, the claim determination process shall
continue and the specified information shall be deemed not to exist.




(b) Disability Claims Appeal Procedure. If a Claimant’s claim for a Disability benefit
is denied (in whole or in part), he is entitled to a full and fair review of that denial. A
full and fair review of a Disability benefit claim denial shall provide the Claimant with
180 days from the receipt of any adverse claim determination to appeal the denial. If the
Claimant does not file an appeal within 180 days of the adverse claim determination, such
denial becomes final.


 


V-7









 






Under the full and fair review, the Claimant shall be afforded an opportunity to submit
written comments, documents, records, and other information relating to the claim
for benefits to the reviewing fiduciary. The Claimant shall be entitled to receive
upon request and free of charge reasonable access to and copies of all information relevant
to the claim. For purposes of a Disability benefit claim denial, the term “relevant” shall
mean information that was relied on in making the benefit determination or that was
submitted, considered or generated in the course of making the determination, without regard
to whether it was relied on, and information that demonstrates compliance with the Plan’s
administrative procedures and safeguards for assuring and verifying that Plan provisions are
applied consistently in making benefit determinations. For this purpose, the term
“relevant” shall also include a statement of policy or guidance with respect to the Plan
concerning the Disability benefit for the diagnoses of the Claimant, without regard to
whether such advice or statement was relied upon in making the claims determination. The
review of a benefit claim denial shall not afford any deference to the initial adverse claim
determination.




The review of the Disability claims denial shall be conducted by the appropriate named
fiduciary who is neither the named fiduciary who made the initial adverse claim
determination nor subordinate to such individual.




In reviewing a denial of a claim for a Disability benefit, in which the denial was
based in whole or in part on medical judgement, the appropriate named fiduciary shall
consult with a health care professional who has appropriate training and experience in the
field of medicine involved in the medical judgement. The health care professional consulted
upon review of an adverse benefit claim denial shall be neither the health care professional
that was consulted in connection with the adverse benefit determination that is the subject
of the appeal nor a subordinate of any such individual. The reviewing fiduciary shall
provide the identification of the medical or vocational experts whose advice was obtained on
behalf of the Plan in connection with Claimant’s Disability benefit claim denial, without
regard as to whether the advice was relied upon in making the benefit determination.




The appropriate reviewing fiduciary must take into account all comments, documents,
records, and other information submitted by the Claimant relating to the claim, without
regard as to whether the information was submitted or considered in the initial benefit
determination. The Claimant may either represent himself or appoint a representative,
either of whom has the right to inspect all documents pertaining to the claim and its
denial. The reviewing fiduciary can schedule any meeting with the Claimant or his
representative that it finds necessary or appropriate to complete its review.




If a timely request is made, the reviewing fiduciary shall notify the Claimant of the
determination upon appeal within 45 days after receipt of the request for review (without
regard to whether all the information necessary to make the benefit determination
accompanies the filing). The reviewing fiduciary retains the authority to unilaterally
extend the initial 45-day review period by a period not to exceed an additional 45 days, if
the fiduciary determines that special circumstances exist requiring additional time for
reviewing the claim. If the initial review period is extended by the unilateral action of
the appropriate reviewing fiduciary, the fiduciary shall, prior to the expiration of the initial 45 day review period, notify the Claimant in writing of the
extension. The written notice of extension shall identify the special circumstances
necessitating the extension and provide the anticipated date by which the Plan expects to
render the determination on review.



 


V-8









 








Calculation of Time Periods Upon Appeal. The period of time within which a
determination on a Disability claims appeal is required to be made shall begin on that date
the appeal is filed in accordance with this Section, without regard to whether all the
information necessary to make the Disability benefits determination accompanies the filing.
In the event the Disability claims review period is extended due to the Claimant’s failure
to submit information necessary to such determination, the Disability claims review period
shall be tolled from the date on which the notification of the extension is sent to the
Claimant until the date on which the Claimant responds to the request for additional
information. The Claimant shall be afforded at least 45 days from receipt of the notice of
extension to provide the requested information. If the Claimant fails to supply the
requested information within the 45-day period, the claims review process shall continue and
the specified information shall be deemed not to exist.




The reviewing fiduciary shall provide the Claimant with a written notice of the Plan’s
benefit determination upon review. The notice shall set forth the specific reasons for its
action, the Plan provisions on which its decision is based, and a statement that the
Claimant is entitled to receive, upon request and free of charge, reasonable access to, and
copies of, all documents, records, and other information relevant to the Claimant’s claim
for benefits, and a statement of the Claimant’s right to bring an action under section
502(a) of ERISA. The notice shall also include the following statement,



“You and the Plan may have other voluntary alternative dispute resolution
options, such as mediation. One way to find out what may be available is to
contact your local U.S. Department of Labor Office and your State insurance
regulatory agency.”




If a decision is not given to the Claimant within the review period, the claim is
treated as if it were denied on the last day of the review period.




The request for review must be filed within 90 days after the denial. If it is not,
the denial becomes final. If a timely request is made, the reviewing fiduciary must make
its decision, under normal circumstances, within 60 days of the receipt of the request for
review. However, if the reviewing fiduciary notifies the Claimant prior to the expiration
of the initial review period, it may extend the period of review up to 120 days following
the initial receipt of the request for a review. The written notice must indicate the
circumstances necessitating the extension and the anticipated date for the final decision.
All decisions of the reviewing fiduciary must be in writing and must include the specific
reasons for its action, the Plan provisions on which its decision is based, and a statement
that the Claimant is entitled to receive, upon request and free of charge, reasonable access
to, and copies of, all documents, records, and other information relevant to the Claimant’s
claim for benefits, and a statement of the Claimant’s right to bring an action under section
502(a) of ERISA. If a decision is not given to the Claimant within the review period,
the claim is treated as if it were denied on the last day of the review period.


 


V-9









 





Article VI




LOANS




Except as specified below, the Committee may direct the Trustees to make loans to Participants
(and Beneficiaries who are “parties in interest” within the meaning of ERISA) who have
Nonforfeitable Interests in their Account balances. The Committee will be responsible for
administering the Plan loan program. All loans will comply with the following requirements:




(a) All loans will be made solely from the Participant’s or Beneficiary’s Account.




(b) Loans will be available on a nondiscriminatory basis to all Beneficiaries who are
“parties in interest” within the meaning of ERISA, and to all Participants.




(c) Loans will not be made for less than $1,000.00. A Participant may not have more
than one loan (either a general purpose loan or residential loan) outstanding at any given
time.




(d) The maximum amount of a loan may not exceed the lesser of (A) $50,000.00 reduced by
the person’s highest outstanding loan balance from the Plan during the preceding one-year
period, or (B) one-half of the person’s Nonforfeitable Interest in his Account balance under
the Plan determined as of the date on which the loan is approved by the Committee.




(e) Any loan from the Plan will be evidenced in such form (signed by the person
applying for the loan in accordance with procedures established by the Committee), having
such maturity, bearing such rate of interest, and containing such other terms as the
Committee will require by uniform and nondiscriminatory rules consistent with this Article
and proper lending practices.




(f) All loans will bear a reasonable rate of interest which will be established by the
Committee. In determining the proper rate of interest to be charged, at the time any loan
is made or renewed, the Committee will contact at least two of the largest banks in the
geographic location in which the Participant or Beneficiary resides to determine what
interest rate the banks would charge for a similar loan taking into account the collateral
offered.




(g) Each loan will be fully secured by a pledge of the borrowing person’s
Nonforfeitable Interest in his Account balance. No more than 50 percent of the person’s
Nonforfeitable Interest in his Account balance (determined immediately after the origination
of the loan) will be considered as security for any loan.




(h) The term of the loan will not be less than 18 months. Generally, the term of the
loan will not be more than five years. The Committee may agree to a longer term (but not
more than seven years) only if such term is otherwise reasonable and the proceeds of the
loan are to be used to acquire a dwelling which will be used within a
reasonable time (determined at the time the loan is made) as the principal residence of
the borrowing person.


 


VI-1









 






(i) The terms of each Plan loan agreement will require substantially level amortization
of the loan (with payments not less frequently than quarterly) over the term of the loan.
However, the level amortization requirement will not apply for a period, not longer than one
year (or such longer period as may apply under the Uniformed Services Employment and
Reemployment Rights Act of 1994) that an eligible borrower is on a bona fide leave of
absence, either without pay from the District or at a rate of pay (after income and
employment tax withholding) that is less than the amount of the installment payments
required under the terms of the loan. However, the loan (including interest that accrues
during the leave of absence) must be repaid by the five-year loan maturity deadline
specified in paragraph (h) above (unless the loan was a home loan described in paragraph (h)
above), and the amount of the installments due after the leave ends (or, if earlier, after
the first anniversary of the leave or such longer period as may apply under the Uniformed
Services Employment and Reemployment Rights Act of 1994) must not be less than the amount
required under the terms of the original loan.




(j) Except with respect to a former Employee as provided in subsection (l) herein, a
Participant’s loan agreement will require that loan repayments be made through payroll
deductions.




(k) If a person fails to make a required payment within 30 days of the due date set
forth in the loan agreement, the loan will be in default.




(l) If a Participant or former Participant has an outstanding loan from the Plan at the
time of his Separation From Service, the Participant or former Participant will have the
right to elect to continue to repay the loan in accordance with its terms; provided that if
such an election is made such election shall be irrevocable and the Participant shall not be
eligible to receive a distribution from the Plan until he has fully repaid the loan. A
former Participant with an outstanding loan balance may continue to repay the loan in
accordance with procedures as determined by the Committee. If the Participant or former
Participant does not elect to continue to repay the loan in accordance with its terms, the
outstanding loan principal balance and any accrued but unpaid interest will become
immediately due in full. The Participant or former Participant will have the right to
immediately pay the Trustee that amount. If the Participant or former Participant fails to
repay the loan, the Trustee will foreclose on the loan and the Participant will be deemed to
have received a Plan distribution of the amount foreclosed upon. The Trustee will not
foreclose upon a Participant’s or former Participant’s Salary Deferral Contribution Account
or Catch-up Salary Deferral Contributions Account until the Participant’s Separation From
Service.




(m) If a Beneficiary defaults on his loan, the Trustee will foreclose on the loan and
the Beneficiary will be deemed to have received a Plan distribution of the amount foreclosed
upon.


 


VI-2









 






(n) No amount that is pledged as collateral for a Plan loan to a Participant will be
available for withdrawal before he has fully repaid his loan.




(o) All interest payments made pursuant to the terms of the loan agreement will be
credited to the borrowing person’s Account and will not be considered as general earnings of
the Trust Fund to be allocated to other Participants.



Notwithstanding the foregoing, if (a) a Participant was a participant in the Cargill
Partnership Plan on December 31, 2003, and had a loan outstanding under the Cargill Partnership
Plan on December 31, 2003, and (b) the loan note and all other rights with respect to such loan
held by or for the Cargill Partnership Plan are rolled over to the Plan, then such loan shall be
continued under the Plan, and shall be administered under the terms and provisions applicable to
the loan under the loan agreement and the Cargill Partnership Plan documents applicable to such
loan in effect as of December 31, 2003.



Notwithstanding clause (c) above, a Participant who was a participant in the TruSeal Plan on
December 31, 2006, and who had two loans outstanding under the TruSeal Plan on such date, shall be
permitted to maintain the two loans under this Plan under the terms and provisions applicable to
the loan under the loan agreement and the TruSeal Plan documents applicable to such loan in effect
as of December 31, 2006; provided, however, that such a Participant shall not be permitted to apply
for a new loan under the Plan until the Participant has fully repaid both of the loans.


 


VI-3









 





Article VII




IN-SERVICE DISTRIBUTIONS




7.01 In-Service Financial Hardship Distributions.




(a) General. Prior to his Separation From Service, a Participant is entitled to
receive a distribution from his Salary Deferral Contribution Account (except for income that
was not credited to his Salary Deferral Account as of December 31, 1988), his Catch-up
Salary Deferral Contribution Account (except for income credited to his Catch-up Salary
Deferral Contribution Account), his Rollover Account, his After-Tax Contribution Account,
his Nonforfeitable Interest in his Matching Contribution Account and his Nonforfeitable
Interest in his Supplemental Contribution Account in the event of an immediate and heavy
financial need incurred by the Participant and the Committee’s determination that the
withdrawal is necessary to alleviate that hardship.




(b) Permitted Reasons For Financial Hardship Distributions. A distribution shall be
made on account of financial hardship only if the distribution is for:




(i) expenses for (or necessary to obtain) medical care that would be deductible
under section 213(d) of the Code (determined without regard to whether the expenses
exceed 7.5% of adjusted gross income)




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




(iii) payment of tuition, related educational fees, and room and board
expenses, for up to the next 12 months of post-secondary education for the
Participant, his Spouse, children or dependents (as defined in section 152 of the
Code, without regard to section 152(b)(1), (b)(2) and (d)(1)(B) of the Code);




(iv) payments necessary to prevent the eviction of the Participant from his
principal residence or foreclosure on the mortgage on that residence,




(v) payments for burial or funeral expenses for the Participant’s deceased
parent, Spouse, children or dependents (as defined in section 152 of the Code,
without regard to section 152(d)(1)(B) of the Code);




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




(vii) any other event added to this list by the Commissioner of Internal
Revenue.


 


VII-1









 






(c) Amount. A distribution to satisfy an immediate and heavy financial need shall not
be made in excess of the amount of the immediate and heavy financial need of
the Participant and the Participant must have obtained all distributions, other than
hardship distributions, and all nontaxable (at the time of the loan) loans currently
available under all plans maintained by the Employer. The amount of a Participant’s
immediate and heavy financial need includes any amounts necessary to pay any federal, state
or local income taxes or penalties reasonably anticipated to result from the financial
hardship distribution.




(d) Suspension of Participation in Certain Benefit Programs. The Participant’s
hardship distribution shall terminate his right to have the Employer make any Salary
Deferral Contributions on his behalf until the next time Salary Deferral Contributions are
permitted after (1) the lapse of 12 months following the hardship distribution, and (2) his
timely filing of a written request to resume his Salary Deferral Contributions. In
addition, for 12 months after he receives a hardship distribution from the Plan, the
Participant is prohibited from making elective contributions and employee contributions to
or under all other qualified and nonqualified plans of deferred compensation maintained by
the Employer, including stock option plans, stock purchase plans and Code section 401(k)
cash or deferred arrangements that are part of cafeteria plans described in section 125 of
the Code. However, the Participant is not prohibited from making contributions to a health
or welfare benefit plan, including one that is part of a cafeteria plan within the meaning
of section 125 of the Code.




(e) Order of Distributions. Financial hardship distributions will be made in the
following order: First withdrawals will be made from the Participant’s After-Tax
Contribution Account, then from his Rollover Contribution Account, then from his Matching
Contribution Account, then from his Supplemental Contribution Account, then from his Salary
Deferral Contribution Account, and finally, from his Catch-up Salary Deferral Contribution
Account. A Participant shall not be entitled to receive a financial hardship distribution
of any amount credited to his QNEC Account.



7.02 In-Service Distribution of After-Tax Contributions and Matching Contributions.




(a) After-Tax Contributions. Each Participant shall be entitled to withdraw a portion
or all of his After-Tax Contribution Account.




(b) Certain Matching Contributions. A Participant shall be entitled to withdraw a
portion or all of his Nonforfeitable Interest in his Matching Contribution Account if the
Participant has been a Participant in the Plan for five or more years or the amounts
withdrawn from the Matching Contribution Account have been credited to his Account for a
minimum of two years.




(c) Amount and Number of In-Service Distributions. The minimum amount of the
distribution permitted under this Section 7.02 shall be the lesser of $1,000.00 or the total
amount which could otherwise be distributed under this Section 7.02. Also, a Participant
may not make another distribution request under this Section 7.02 for a period of 12 months
after receiving a distribution pursuant to this Section 7.02.


 


VII-2









 





7.03 In-Service Distributions for Participants Who Have Attained Age 591/2. Prior to his
Separation From Service, a Participant who is at least age 591/2 is entitled to withdraw all or any
portion of any vested amounts credited to his Accounts, including, but not limited to, his Salary
Deferral Contribution Account, his Catch-up Salary Deferral Contribution Account, the
Nonforfeitable Interest in his Matching Contribution Account and the Nonforfeitable Interest in his
Supplement Contribution Account (excluding, however, any amounts in his QNEC Account).



7.04 Method of Payment. Any distribution made pursuant to this Article VI will be paid in the
form of a single sum in cash.


 


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Article VIII




VESTING




A Participant or former Participant has a fully Nonforfeitable Interest in his entire Account
balance when he (a) incurs a Disability on or prior to the date of his Separation From Service, (b)
attains his Retirement Age on or prior to the date of his Separation From Service, or (c) incurs a
Separation From Service due to death. A Participant or former Participant shall at all times have
a fully Nonforfeitable Interest in amounts credited to his Salary Deferral Contribution Account,
his Catch-up Salary Deferral Contribution Account, his QNEC Account, his Rollover Account and his
After-Tax Contribution Account. A Participant or former Participant shall have a Nonforfeitable
Interest in the following percentage of amounts credited to his Matching Contribution Account and
his Supplemental Contribution Account:



	 	 	 	 	 
	Years of Active Service Completed by the	 	 	 
	Participant or Former Participant	 	Vested Percentage	 
	Less than one 
	 	 	0	 
	One but less than two 
	 	 	20	 
	Two but less than three 
	 	 	40	 
	Three but less than four 
	 	 	60	 
	Four but less than five 
	 	 	80	 
	Five or more 
	 	 	100	 






Subject to the possible application of Section B.2.3 of Appendix B or Section 13.05, except as
specified above, a Participant or former Participant has no Forfeitable Interest in his Account
balance and shall not be entitled to any benefits under the Plan upon or following his Separation
From Service.



Special Rule for Participants who were Participants in the TruSeal Plan. With respect to
amounts credited to his Matching Contribution Account under the TruSeal Plan on or before December
31, 2006, a Participant or former Participant who was a participant in the TruSeal Plan shall have
a Nonforfeitable Interest in 100% of such amounts upon completing three (3) years of vesting
service.


 


VIII-1









 





Article IX




FORFEITURES AND RESTORATIONS




9.01 Forfeiture on Termination of Participation.




(a) If as a result of his Separation From Service a Participant or former Participant
receives (or is deemed to receive under Section 5.04), a distribution of his entire
Nonforfeitable Interest in his Account balance not later than the end of the second Plan
Year following the Plan Year in which his Separation From Service occurs, the remaining
Forfeitable Interest in his Account balance will be immediately forfeited upon the
distribution.




(b) If a Participant or former Participant neither receives nor is deemed to receive a
distribution as a result of his Separation From Service, his Forfeitable Interest in his
Account balance will be permanently forfeited (with no right of reinstatement under Section
9.02) on the later of the date of his Separation From Service or the date on which he has
incurred a Period of Severance of five consecutive years.



9.02 Restoration of Forfeited Amounts. If a Participant or former Participant who forfeited
any portion of his Account balance pursuant to the provisions of Section 9.01 subsequently performs
an Hour of Service, then the following provisions shall apply:




(a) Repayment Requirement. The Participant’s Account balance (unadjusted for gains or
losses subsequent to the forfeiture) shall be restored if he repays to the Trustee the full
amount of any distribution with respect to which the forfeiture arose prior to the earlier
of (1) the date on which he incurs a Period of Severance of five years commencing after his
distribution, or (2) the fifth anniversary of the first date on which the Participant
subsequently performs his first Hour of Service after his Separation From Service. A
Participant who is deemed to have received a distribution under Section 5.04 (because he had
no Nonforfeitable Interest in his Account balance) will be deemed to have repaid his Account
balance upon his reemployment if he is reemployed before the earlier of the dates specified
in clauses (1) and (2) in the preceding sentence.




(b) Amount Restored. The amount to be restored under the preceding provisions of this
Section 9.02 shall be the dollar value of the Account balance, both the amount distributed
and the amount forfeited. The Participant’s Account balance shall be restored as soon as
administratively practicable after the later of the date the Participant first performs an
Hour of Service after his Separation From Service or the date on which any required
repayment is completed.




(c) No Other Basis for Restoration. Except as otherwise provided above, a
Participant’s Account balance shall not be restored after it has been forfeited pursuant to
Section 9.01.



9.03 Forfeitures by Lost Participants or Beneficiaries. If a person who is entitled to a
distribution cannot be located during a reasonable search after the Committee has initially
attempted making payment, his Account balance shall be forfeited. However, if at any time prior
to the termination of the Plan and the complete distribution of the Trust assets, the missing
former Participant or Beneficiary files a claim with the Committee for the forfeited Account
balance, that Account balance shall be reinstated (without adjustment for trust income or losses
during the period of forfeiture) effective as of the date of the receipt of the claim.


 


IX-1









 





Article X




ACTIVE SERVICE




10.01 General. For purposes of determining an Employee’s eligibility to participate in the
Plan and his Nonforfeitable Interest in his Account balance, the Employee shall receive credit for
Active Service commencing on the later of (1) April 1, 1986 or (2) the date he first performs an
Hour of Service and ending on his Separation From Service Date. If an Employee Separates From
Service, he shall recommence earning Active Service when he again performs an Hour of Service. If
an Employee performs an Hour of Service within twelve months after his Separation From Service
Date, the intervening Period of Severance shall be counted as Active Service. When determining an
Employee’s Active Service, all Periods of Service, whether or not completed consecutively, shall be
aggregated on a per-day basis. In aggregating Active Service, thirty days shall be counted as one
month and 365 days shall be counted as one year of Active Service. Except to the extent expressly
provided otherwise in the Plan, an Employee shall be granted credit for all Periods of Service with
Affiliated Employers (including Periods of Service performed while the Employee is not eligible to
participate in the Plan because he does not satisfy the requirements of Section 2.01).



10.02 Disregard of Certain Service. If an Employee incurs a Separation From Service at a time
when he does not have a Nonforfeitable Interest in a portion of his Matching Contribution Account
balance or his Supplemental Contribution Account balance and his Period of Severance continues for
a continuous period of five years or more, the Period of Service completed by the Employee before
the Period of Severance shall not be taken into account as Active Service, if his Period of
Severance equals or exceeds his Period of Service, whether or not consecutive, completed before the
Period of Severance.



10.03 Certain Brief Absences Counted as Active Service. If an Employee performs an Hour of
Service within 365 days after he Separates From Service, the intervening Period of Severance shall
be counted as a Period of Service.



10.04 Service Credit Required by Law. An Employee will be granted credit for Active Service
for time he is not actively performing services for an Affiliated Employer to the extent required
under federal law. An Employee will be granted credit for Active Service for services performed
for a predecessor employer to the extent required by section 414(a) of the Code and Regulations
issued thereunder.



10.05 Special Maternity or Paternity Absence Rules. Except as specified below, the period of
time between (a) the first anniversary of the first day of a Maternity or Paternity Absence of an
Employee and (b) the second anniversary of the first day of the absence shall not be counted as a
Period of Severance or as Active Service. However, if the Employee returns to active employment
with an Affiliated Employer prior to the expiration of twelve months following the earlier of (1)
the date of his Separation From Service or (2) the second anniversary of the first day of his
Maternity or Paternity Absence, he shall be granted Active Service for the entire period of his
Maternity or Paternity Absence.


 


X-1









 





10.06 Employment Records Conclusive. The employment records of the Employer shall be
conclusive for all determinations of Active Service.



10.07 Credit for Service With North Star Steel Company. For purposes of determining an
Employee’s Active Service for eligibility to participate and vesting, his service with North Star
Steel Company, a Minnesota corporation, and any predecessor will be counted as Active Service under
the Plan.



10.08 Credit for Service With Other Employers. For purposes of determining an Employee’s
Active Service for eligibility to participate and vesting, his service with Alumi-Brite
Corporation, an Illinois corporation, Fruehauf Trailer Corporation, a Delaware corporation, Decatur
Aluminum Holdings Corp., a Delaware corporation, (and wholly-owned subsidiaries of Decatur Aluminum
Holdings Corp.), Alcoa, Inc., a Pennsylvania corporation, Golden Aluminum Company, while owned by
ACX Technologies, Inc. or Crown, Cork & Seal Company, Inc., and Temroc Metals, Inc., prior to its
sale by the Sponsor, will be counted as Active Service under the Plan.



10.09 Special Transitional Rules. Any Employee of the Sponsor who was an Employee prior to
January 20, 1995 and was a participant in the 401(k) Savings Plan, prior to its merger into the
Plan, shall have his Active Service for all purposes calculated under the provisions of the Plan in
effect before January 20, 1995, if that method of calculating his Active Service is more beneficial
for him than the method otherwise set out in this Article X. In addition, any Employee of Nichols
Aluminum-Alabama who was a participant in the Decatur Plan shall have his Active Service for all
purposes calculated under the provisions of the Decatur Plan in effect before July 1, 1999, if that
method of calculating his Active Service is more beneficial for him than the method otherwise set
out in this Article X.


 


X-2









 





Article XI




INVESTMENT ELECTIONS




11.01 Investment Funds Established. It is contemplated that the assets of the Plan shall be
invested in such categories of assets as may be determined from time to time by the Committee and
announced and made available on an equal basis to all Participants and former Participants. In
accordance with procedures established by the Committee, each Participant and former Participant
may designate the percentage of his Account to be invested in each investment fund available under
the Plan. Up to one hundred percent of the Trust assets may be invested in Sponsor Stock.



11.02 Election Procedures Established. The Committee shall, from time to time, establish
rules to be applied in a nondiscriminatory manner as to all matters relating to the administration
of the investment of funds including, but not limited to, the following:




(a) the percentage of a Participant’s or former Participant’s Account as it exists,
from time to time, that may be transferred from one fund to another and the limitations
based on amounts, percentages, time, or frequency, if any, on such transfers;




(b) the percentage of a Participant’s future contributions, when allocated to his
Account, that may be invested in any one or more funds and the limitations based upon
amounts, percentages, time, or frequency, if any, on such investments in various funds;




(c) the procedures for making investment elections and changing existing investment
elections;




(d) the period of notice required for making investment elections and changing existing
investment elections;




(e) the handling of income and change of value in funds when funds are in the process
of being transferred between investment funds and to investment funds; and




(f) all other matters necessary to permit the orderly operation of investment funds
within the Plan.



When the Committee changes any previous applicable rule, it shall state the effective time of the
change and the procedures for complying with any such change. Any change shall remain effective
until such date as stated in the change, or if none is stated, then until revoked or changed in a
like manner.


 


XI-1









 





Article XII




ADOPTION OF PLAN BY OTHER EMPLOYERS




12.01 Adoption Procedure. Any business organization may, with the approval of the Board,
adopt the Plan by:




(a) a certified resolution or consent of the board of directors of the adopting
Employer or an executed adoption instrument (approved by the board of directors of the
adopting Employer) agreeing to be bound as an Employer by all the terms, conditions and
limitations of the Plan except those, if any, specifically described in the adoption
instrument; and




(b) providing all information required by the Committee and the Trustee.



12.02 No Joint Venture Implied. The document which evidences the adoption of the Plan by an
Employer shall become a part of the Plan. However, neither the adoption of the Plan and the Trust
by an Employer nor any act performed by it in relation to the Plan and the Trust shall ever create
a joint venture or partnership relation between it and any other Employer.



12.03 All Trust Assets Available to Pay All Benefits. The Accounts of Participants employed
by the Employers that adopt the Plan shall be commingled for investment purposes. All assets in
the Trust shall be available to pay benefits to all Participants employed by any Employer.



12.04 Qualification a Condition Precedent to Adoption and Continued Participation. The
adoption of the Plan and the Trust by a business organization is contingent upon and subject to the
express condition precedent that the initial adoption meets all statutory and regulatory
requirements for qualification of the Plan and the exemption of the Trust that are applicable to it
and that the Plan and Trust continue in operation to maintain their qualified and exempt status.
In the event the adoption fails to initially qualify, the adoption shall fail retroactively for
failure to meet the condition precedent and the portion of the Trust assets applicable to the
adoption shall be immediately returned to the adopting business organization and the adoption shall
be void ab initio. In the event the adoption as to a given business organization later becomes
disqualified and loses its exemption for any reason, the adoption shall fail retroactively for
failure to meet the condition precedent and the portion of the Trust assets allocable to the
adoption by that business organization shall be immediately spun off, retroactively as of the last
date for which the Plan qualified, to a separate trust for its sole benefit and an identical but
separate Plan shall be created, retroactively effective as of the last date the Plan as adopted by
that business organization qualified, for the benefit of the Participants covered by that adoption.


 


XII-1









 





Article XIII




AMENDMENT AND TERMINATION




13.01 Right to Amend and Limitations Thereon. The Sponsor has the sole right to amend the
Plan. An amendment may be made by a certified resolution or consent of the Board, or by an
instrument in writing executed by the appropriate officer of the Sponsor. The amendment must
describe the nature of the amendment and its effective date. No amendment shall:




(a) vest in an Employer any interest in the Trust;




(b) cause or permit the Trust assets to be diverted to any purpose other than the
exclusive benefit of the present, former or future Participants and their Beneficiaries
except under the circumstances described in Section 3.13;




(c) decrease the Account of any Participant or former Participant, or eliminate an
optional form of payment in violation of section 411(d)(6) of the Code; or




(d) change the vesting schedule to one which would result in a Participant’s or former
Participant’s Nonforfeitable Interest in his Account balance (determined as of the later of
the date of the adoption of the amendment or of the effective date of the amendment) of any
Participant or former Participant being less than his Nonforfeitable Interest computed under
the Plan without regard to the amendment. If the Plan’s vesting schedule is amended or if
the Plan is deemed amended by an automatic change to or from a top-heavy vesting schedule,
each Participant or former Participant who has at least three years of Active Service as of
the date of the amendment or change shall have his nonforfeitable percentage computed under
the Plan without regard to the amendment or the change if that results in a higher
Nonforfeitable Interest in his Account balance.



Each Employer shall be deemed to have adopted any amendment made by the Sponsor unless the
Employer notifies the Committee of its rejection in writing within 30 days after it receives a copy
of the amendment. A rejection shall constitute a withdrawal from the Plan by that Employer unless
the Sponsor acquiesces in the rejection.



13.02 Mandatory Amendments. The Contributions of each Employer to the Plan are intended to
be:




(a) deductible under the applicable provisions of the Code;




(b) except as otherwise prescribed by applicable law, exempt from the Federal Social
Security Act;




(c) except as otherwise prescribed by applicable law, exempt from with- holding under
the Code; and




(d) excludable from any Employee’s regular rate of pay, as that term is defined under
the Fair Labor Standards Act of 1938, as amended.


 


XIII-1









 





The Sponsor shall make any amendment necessary to carry out this intention, and it may be made
retroactively.



13.03 Withdrawal of Employer. An Employer may withdraw from the Plan and the Trust if the
Sponsor does not acquiesce in its rejection of an amendment or by giving written notice of its
intent to withdraw to the Committee. The Committee shall then determine the portion of the Trust
assets that is attributable to the Participants employed by the withdrawing Employer and shall
notify the Trustee to segregate and transfer those assets to the successor trustee when it receives
a designation of the successor from the withdrawing Employer.



A withdrawal shall not terminate the Plan and the Trust with respect to the withdrawing
Employer, if the Employer either appoints a successor trustee and reaffirms the Plan and the Trust
as its new and separate plan and trust intended to qualify under section 401(a) of the Code, or
establishes another plan and trust intended to qualify under section 401(a) of the Code.



The determination of the Committee, in its sole discretion, of the portion of the Trust assets
that is attributable to the Participants employed by the withdrawing Employer shall be final and
binding upon all parties; and, the Trustee’s transfer of those assets to the designated successor
Trustee shall relieve the Trustee of any further obligation, liability or duty to the withdrawing
Employer, the Participants employed by that Employer and their Beneficiaries, and the successor
trustee.



13.04 Termination of Plan. The Sponsor may terminate the Plan and the Trust with respect to
all Employers by executing and delivering to the Committee and the Trustee, a notice of
termination, specifying the date of termination.



13.05 Partial or Complete Termination or Complete Discontinuance of Contributions. Without
regard to any other provision of the Plan, if there is a partial or total termination of the Plan
(within the meaning of section 411 of the Code) or there is a complete discontinuance of the
Employer’s Contributions (within the meaning of section 411 of the Code), each of the affected
Participants shall immediately have a fully Nonforfeitable Interest in his Account as of the end of
the last Plan Year for which a substantial Employer Contribution was made and in any amounts later
allocated to his Account. If the Employer then resumes making substantial Contributions at any
time, the appropriate vesting schedule shall again apply to all amounts allocated to each affected
Participant’s Account beginning with the Plan Year for which they were resumed.


 


XIII-2









 





Article XIV




MISCELLANEOUS




14.01 Plan Not an Employment Contract. The maintenance of the Plan and the Trust is not a
contract between any Employer and its Employees which gives any Employee the right to be retained
in its employment. Likewise, it is not intended to interfere with the rights of any Employer to
discharge any Employee at any time or to interfere with the Employee’s right to terminate his
employment at any time.



14.02 Benefits Provided Solely From Trust. All benefits payable under the Plan shall be paid
or provided for solely from the Trust. No Employer assumes any liability or responsibility to pay
any benefit provided by the Plan.



14.03 Assignments Prohibited. No principal or income payable or to become payable from the
Trust Fund shall be subject to anticipation or assignment by a Participant, former Participant or
Beneficiary to attachment by, interference with, or control of any creditor of a Participant,
former Participant or Beneficiary; or to being taken or reached by any legal or equitable process
in satisfaction of any debt or liability of a Participant, former Participant, or Beneficiary prior
to its actual receipt by the Participant, former Participant or Beneficiary. Any attempted
conveyance, transfer, assignment, mortgage, pledge, or encumbrance of any Trust assets, any part of
it, or any interest in it by a Participant, former Participant or Beneficiary prior to distribution
shall be void, whether that conveyance, transfer, assignment, mortgage, pledge, or encumbrance is
intended to take place or become effective before or after any distribution of Trust assets or the
termination of the Trust itself. The Trustee shall never under any circumstances be required to
recognize any conveyance, transfer, assignment, mortgage, pledge or encumbrance by a Participant ,
former Participant, or Beneficiary of the Trust, any part of it, or any interest in it, or to pay
any money or thing of value to any creditor or assignee of a Participant, former Participant or
Beneficiary for any cause whatsoever. These prohibitions against the alienation of a Participant’s
Account shall not apply to a Qualified Domestic Relations Order or to a voluntary revocable
assignment of benefits not in excess of ten percent of the amount of any payment from the Plan if
such assignment complies with Regulations issued under section 401(a)(13) of the Code. Further,
effective for judgments, orders and decrees issued, and settlement agreements entered into, on or
after August 5, 1997, these prohibitions shall not apply to any offset of a Participant’s or former
Participant’s benefits provided under a Plan against an amount that the Participant or former
Participant is ordered or required to pay to the Plan if—(a) the order or requirement to pay
arises—(1) under a judgment of conviction for a crime involving the Plan, (2) under a civil
judgment (including a consent order or decree) entered by a court in an action brought in
connection with an alleged violation of part 4 of subtitle B of title I of ERISA, or (3) pursuant
to a settlement agreement between the Secretary of Labor and the Participant or former Participant
in connection with a violation (or alleged violation) of part 4 of subtitle B of ERISA by a
fiduciary or any other person, and (b) the judgment, order, decree, or settlement agreement
expressly provides for the offset of all or part of the amount ordered or required to be paid to
the Plan against the Participant’s or former Participant’s benefits provided under the Plan.


 


XIV-1









 





14.04 Requirements Upon Merger or Consolidation of Plans. The Plan shall not merge or
consolidate with or transfer any assets or liabilities to any other plan unless each Participant
and former Participants would receive a benefit immediately after the merger, consolidation, or
transfer which is equal to or greater than the benefit he would have been entitled to receive
immediately before the merger, consolidation, or transfer (if the Plan had then terminated).



14.05 Gender of Words Used. If the context requires it, words of one gender when used in the
Plan shall include the other gender, and words used in the singular or plural shall include the
other.



14.06 Severability. Each provision of this Agreement may be severed. If any provision is
determined to be invalid or unenforceable, that determination shall not affect the validity or
enforceability of any other provision.



14.07 Reemployed Veterans. The requirements of the Uniformed Services Employment and
Reemployment Rights Act of 1994 will be complied with in the operation of the Plan in the manner
permitted under section 414(u) of the Code.



14.08 Limitations on Legal Actions. No person may bring an action pertaining to the Plan or
Trust until he has exhausted his administrative claims and appeal remedies identified in Section
5.12 and 5.13. Further, no person may bring an action pertaining to a claim for benefits under the
Plan or the Trust following 180 days after the Committee’s final denial of his claim for benefits.



14.09 Governing Law. The provisions of the Plan shall be construed, administered, and
governed under the laws of the United States unless the specific matter in question is governed by
state law in which event the laws of the State of Texas shall apply.



14.10 Special Provisions Applicable to Nichols Aluminum-Golden, Inc. Employees.




(a) Cessation of Participation. Upon the closing of the sale by the Sponsor of the
stock of Nichols Aluminum-Golden, Inc., (the “NAG Sale”), an individual who is employed by
Nichols Aluminum-Golden, Inc. shall cease to be eligible to participate in the Plan.




(b) Sale is Distribution Event. An individual who continues to be employed by Nichols
Aluminum-Golden, Inc. following the NAG Sale shall be deemed to have incurred a “Separation
From Service” for all purposes under the Plan.




(c) Vesting. Notwithstanding any other provision of the Plan to the contrary, an
individual who continues to be employed by Nichols Aluminum-Golden, Inc. immediately
following the NAG Sale shall have a fully Nonforfeitable Interest in his Account balance
upon the Sale.




(d) Loans. Notwithstanding any other provision of the Plan to the contrary, an
individual who on the date of the NAG Sale (i) has an outstanding loan from the Plan and
(ii) is deemed to incur a Separation From Service as a result of the Sale, will be allowed
to repay to the Trustee the outstanding loan principal balance and any accrued but
unpaid interest over the remaining term of the loan in accordance with the amortization
schedule provided in his loan agreement as if he had not incurred a Separation From Service.
The individual’s loan repayments will not be required to be made on a payroll deduction
basis; but rather may be made utilizing a loan coupon procedure established by the
Committee.


 


XIV-2









 





IN WITNESS WHEREOF, Quanex Corporation has caused this Agreement to be executed this 2nd day
of October, 2006, in multiple counterparts, each of which shall be deemed to be an original, to be
effective the 1st day of January, 2007, except for those provisions which have an earlier effective
date provided by law, or as otherwise provided under applicable provisions of the Plan.



	 	 	 	 	 
	 	QUANEX CORPORATION

 	 
	 	By:  	/s/ Kevin P. Delaney
 	 
	 	 	Title:  Senior Vice President — General 	 
	 	 	Counsel and Secretary 	 
	 



 


 









 





Appendix A




LIMITATIONS ON CONTRIBUTIONS AND ALLOCATIONS




PART A.1 Definitions




Definitions. As used herein the following words and phrases have the meaning attributed to
them below:



A.1.1 “Actual Contribution Ratio” shall mean the ratio of Section 401(m) Contributions
actually paid into the Trust on behalf of an Employee for a Plan Year to the Employee’s Annual
Compensation for the same Plan Year. For this purpose, Annual Compensation for any portion of the
Plan Year in which the Employee was not an eligible Employee (as defined in Section A.2.4) will not
be taken into account.



A.1.2 “Actual Deferral Percentage” means, for a specified group of Employees for a Plan Year,
the average of the ratios (calculated separately for each Employee in the group) of the amount of
Section 401(k) Contributions actually paid into the Trust on behalf of the Employee for the Plan
Year to the Employee’s Annual Compensation for the Plan Year.



A.1.3 “Actual Deferral Ratio” means the ratio of Section 401(k) Contributions actually paid
into the Trust on behalf of an Employee for a Plan Year to the Employee’s Annual Compensation for
the same Plan Year. For this purpose, Annual Compensation for any portion of the Plan Year in
which the Employee was not an eligible Employee (as defined in Section A.2.3) will not be taken
into account.



A.1.4 “Annual Additions” means the sum of the following amounts credited on behalf of a
Participant for the Limitation Year: (a) Employer contributions excluding Catch-up Salary Deferral
Contributions and including Salary Deferral Contributions, (b) Employee after-tax contributions,
and (c) forfeitures. For this purpose, Employee contributions are determined without regard to any
rollover contributions (as defined in sections 402(c), 403(a)(4), 403(b)(8), 408(d)(3) and
457(e)(16) of the Code without regard to employee contributions to a simplified employee pension
which are excludable from gross income under section 408(k)(6) of the Code). Excess 401(k)
Contributions for a Plan Year are treated as Annual Additions for that Plan Year even if they are
corrected through distribution. Excess Deferrals that are timely distributed as set forth in
Section A.3.1 will not be treated as Annual Additions.



A.1.5 “Contribution Percentage” shall mean, for a specified group of Employees for a Plan
Year, the average of the ratios (calculated separately for each Employee in the group) of the
amount of Section 401(m) Contributions actually paid into the Trust on behalf of the Employee for
the Plan Year to the Employee’s Annual Compensation for the Plan Year.



A.1.6 “Excess Aggregate 401(m) Contributions” means, with respect to any Plan Year, the excess
of (a) the aggregate amount of Section 401(m) Contributions actually paid into the Trust on behalf
of Highly Compensated Employees for the Plan Year over (b) the maximum amount of those
contributions permitted under the limitations set out in the first sentence of Section A.2.4.


 


A-1









 





A.1.7 “Excess Amount” shall mean the excess of the Annual Additions credited to the
Participant’s Account for the Limitation Year over the Maximum Permissible Amount.



A.1.8 “Excess 401(k) Contributions” means, with respect to any Plan Year, the excess of (a)
the aggregate amount of Section 401(k) Contributions actually paid to the Trustee on behalf of
Highly Compensated Employees for the Plan Year over (b) the maximum amount of those contributions
permitted under the limitations set out in the first sentence of Section A.2.3.



A.1.9 “Limitation Year” shall mean the Plan Year. All qualified plans maintained by any
Affiliated Employer must use the same Limitation Year. If the Limitation Year is amended to a
different 12-consecutive month period, the new Limitation Year must begin on a date within the
Limitation Year in which the amendment is made.



A.1.10 “Maximum Permissible Amount” means the lesser of (1) $40,000.00 as adjusted by the
Secretary of Treasury for increases in the cost of living or (2) 100 percent of the Participant’s
Annual Compensation for the Limitation Year. The Annual Compensation limitation referred to in
clauses (2) of the immediately preceding sentences shall not apply to any contribution for medical
benefits (within the meaning of section 401(h) or section 419A(f)(2) of the Code) that is otherwise
treated as an Annual Addition under section 415(l)(1) or section 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 shall not exceed the dollar
limitation in effect under section 415(c)(1)(A) of the Code multiplied by a fraction, the numerator
of which is the number of months in the short Limitation Year, and the denominator of which is 12.



A.1.11 “Section 401(k) Contributions” means the sum of Salary Deferral Contributions made on
behalf of the Participant during the Plan Year, and QNECs that the Employer elects to have treated
as section 401(k) Contributions pursuant to section 401(k)(3)(d)(ii) of the Code.



A.1.12 “Section 401(m) Contributions” shall mean the sum of Matching Contributions and
After-Tax Contributions made on behalf of the Participant during the Plan Year and other amounts
that the Employer elects to have treated as Section 401(m) Contributions pursuant to section
401(m)(3)(B) of the Code.



PART A.2 Limitations on Contributions




A.2.1 Limitations Based upon Deductibility and the Maximum Allocation Permitted to a
Participant’s Account. Notwithstanding any other provision of the Plan, no Employer shall make any
contribution that would be a nondeductible contribution within the meaning of section 4972 of the
Code or that would cause the limitation on allocations to each Participant’s Account under section
415 of the Code and Section A.4.1 to be exceeded.



A.2.2 Dollar Limitation upon Salary Deferral Contributions. The maximum Salary Deferral
Contribution that a Participant may elect to have made on hib behalf during a calendar year may
not, when added to his elective deferrals under other plans or arrangements which are both (1)
described in sections 401(k), 403(b), 408(k) and 408(p)(2) of the Code and (2) maintained by the
Employer or an Affiliated Employer, exceed the amount of the limitation in effect under section
402(g)(1) of the Code for the Participant’s taxable year beginning in such calendar year. For purposes of applying the requirements of Section A.2.3, Excess Deferrals
shall not be disregarded merely because they are Excess Deferrals or because they are distributed
in accordance with this Section. However, Excess Deferrals made to the Plan on behalf of
Non-Highly Compensated Employees are not to be taken into account under Section A.2.3.



 


A-2









 








A.2.3 Limitation Based upon Actual Deferral Percentage. The Actual Deferral Percentage for
eligible Highly Compensated Employees for any Plan Year must bear a relationship to the Actual
Deferral Percentage for all other eligible Employees for the preceding Plan Year which meets either
of the following tests:




(a) the Actual Deferral Percentage of the eligible Highly Compensated Employees is not
more than the Actual Deferral Percentage of all other eligible Employees multiplied by 1.25;
or




(b) the excess of the Actual Deferral Percentage of the eligible Highly Compensated
Employees over that of all other eligible Employees is not more than two percentage points,
and the Actual Deferral Percentage of the eligible Highly Compensated Employees is not more
than the Actual Deferral Percentage of all other eligible Employees multiplied by two.



For purposes of this test an eligible Employee is an Employee who is directly or indirectly
eligible to make Salary Deferral Contributions for all or part of the Plan Year. A person who is
suspended from making Salary Deferral Contributions because he has made a withdrawal is an eligible
Employee. If no Salary Deferral Contributions are made for an eligible Employee, the Actual
Deferral Ratio that shall be included for him in determining the Actual Deferral Percentage is
zero. If the Plan and any other plan or plans which include cash or deferred arrangements are
considered as one plan for purposes of section 401(a)(4) or 410(b) of the Code, the cash or
deferred arrangements included in the Plan and the other plans shall be treated as one plan for
purposes of this Section. If any Participant who is a Highly Compensated Employee is a participant
in any other cash or deferred arrangements of the Employer, when determining the deferral
percentage of such Participant, all such cash or deferred arrangements are treated as one plan for
these dates.



Notwithstanding the foregoing, an individual who is not a Highly Compensated Employee and who
has not satisfied the minimum age and service requirements of section 410(a)(1)(A) of the Code will
not be treated as an eligible Employee for purposes of this Section A.2.3 if the Sponsor elects to
apply section 410(b)(4)(3) of the Code in determining whether the Plan meets the requirements of
section 401(k)(3) of the Code.



A Salary Deferral Contribution will be taken into account under the Actual Deferral Percentage
test of section 401(k) of the Code and this Section for a Plan Year only if it relates to
Considered Compensation that either would have been received by the Employee in the Plan Year (but
for the deferral election) or is attributable to services performed by the Employee in the Plan
Year and would have been received by the Employee within 21/2 months after the close of the Plan Year
(but for the deferral election). In addition, a Section 401(k) Contribution will be taken into
account under the Actual Deferral Percentage test of section 401(k) of the Code and this Section
for a Plan Year only if it is allocated to an Employee as of a date within that Plan Year. For this purpose a Section 401(k) Contribution is considered allocated as of a date
within a Plan Year if the allocation is not contingent on participation or performance of services
after such date and the Section 401(k) Contribution is actually paid to the Trust no later than 12
months after the Plan Year to which the Section 401(k) Contribution relates.



 


A-3









 








Failure to correct Excess 401(k) Contributions by the close of the Plan Year following the
Plan Year for which they were made will cause the Plan’s cash or deferred arrangement to be
disqualified for the Plan Year for which the Excess 401(k) Contributions were made and for all
subsequent years during which they remain in the Trust. Also, the Employer will be liable for a
ten percent excise tax on the amount of Excess 401(k) Contributions unless they are corrected
within 21/2 months after the close of the Plan Year for which they were made.



A.2.4 Limitation Based upon Contribution Percentage. The Contribution Percentage for eligible
Highly Compensated Employees for any Plan Year must bear a relationship to the Actual Contribution
Percentage for all other eligible Employees for the preceding Plan Year which meets either of the
following tests:




(a) the Contribution Percentage for all other eligible Employees multiplied by 1.25; or




(b) the lesser of the Contribution Percentage for all other eligible Employees
multiplied by two, or the Contribution Percentage for all other eligible Employees plus two
percentage points.



For purposes of this test an eligible Employee is an Employee who is directly or indirectly
eligible to receive an allocation of Matching Contributions for all or part of the Plan Year.
Except as provided below, an Employee who would be eligible to receive an allocation of Matching
Contributions but for his election not to participate is an eligible Employee. An Employee who
would be eligible to receive an allocation of Matching Contributions but for the limitations on his
Annual Additions imposed by section 415 of the Code is an eligible Employee.



Notwithstanding the foregoing, an individual who is not a Highly Compensated Employee and who
has not satisfied the minimum age and service requirements of section 410(a)(1)(A) of the Code will
not be treated as an eligible Employee for purposes of this Section A.2.4 if the Sponsor elects to
apply section 410(b)(4)(B) of the Code in determining whether the Plan meets the requirements of
section 401(m)(2) of the Code.



If no Section 401(m) Contributions are made on behalf of an eligible Employee the Actual
Contribution Ratio that shall be included for him in determining the Contribution Percentage is
zero. If the Plan and any other plan or plans to which Section 401(m) Contributions are made are
considered as one plan for purposes of section 401(a)(4) or 410(b) of the Code, the Plan and those
plans are to be treated as one. The Actual Contribution Ratio of a Highly Compensated Employee who
is eligible to participate in more than one plan of an Affiliated employer to which employee or
matching contributions are made is calculated by treating all the plans in which the Employee is
eligible to participate as one plan. However, plans that are not permitted to be aggregated under
Regulation section 1.410(m)-1(b)(3)(ii) are not aggregated for this purpose.


 


A-4









 





A Matching Contribution will be taken into account under this Section for a Plan Year only if
(1) it is allocated to the Employee’s Account as of a date within the Plan Year, (2) it is paid to
the Trust no later than the end of the 12-month period beginning after the close of the Plan Year,
and (3) it is made on behalf of an Employee on account of his Salary Deferral Contributions for the
Plan Year.



At the election of the Employer, a Participant’s Salary Deferral Contributions, and QNECs made
on behalf of the Participant during the Plan Year shall be treated as Section 401(m) Contributions
that are Matching Contributions provided that the conditions set forth in Regulation section
1.401(m)-1(b)(5) are satisfied. Salary Deferral Contributions may not be treated as Matching
Contributions for purposes of the contribution percentage test set forth in this Section unless
such contributions, including those taken into account for purposes of the test set forth in this
Section, satisfy the actual deferral percentage test set forth in Section A.2.3. Moreover, Salary
Deferral Contributions and QNECs may not be taken into account for purposes of the test set forth
in this Section to the extent that such contributions are taken into account in determining whether
any other contributions satisfy the actual deferral percentage test set forth in Section A.2.3.
Finally, Salary Deferral Contributions and QNECs may be taken into account for purposes of the test
set forth in this Section only if they are allocated to the Employee’s Account as of a date within
the Plan Year being tested within the meaning of Regulation section 1.401(k)-1(b)(4).



Failure to correct Excess Aggregate 401(m) Contributions by the close of the Plan Year
following the Plan Year for which they were made will cause the Plan to fail to be qualified for
the Plan Year for which the Excess Aggregate 401(m) Contributions were made and for all subsequent
years during which they remain in the Trust. Also, the Employer will be liable for a ten percent
excise tax on the amount of Excess Aggregate 401(m) Contributions unless they are corrected within
21/2 months after the close of the Plan Year for which they were made.



PART A.3 Correction Procedures For Erroneous Contributions




A.3.1 Excess Deferral Fail Safe Provision. As soon as practical after the close of each Plan
Year, the Committee shall determine if there would be any Excess Deferrals. If there would be an
Excess Deferral by a Participant, the Excess Deferral as adjusted by any earnings or losses, will
be distributed to the Participant no later than April 15 following the Participant’s taxable year
in which the Excess Deferral was made. The income allocable to the Excess Deferrals for the
taxable year of the Participant shall be determined by multiplying the income for the taxable year
of the Participant allocable to Salary Deferral Contributions by a fraction. The numerator of the
fraction is the amount of the Excess Deferrals made on behalf of the Participant for the taxable
year. The denominator of the fraction is the Participant’s total Salary Deferral Account balance
as of the beginning of the taxable year plus the Participant’s Salary Deferral Contributions for
the taxable year.



A.3.2 Actual Deferral Percentage Fail Safe Provision. As soon as practicable after the close
of each Plan Year, the Committee shall determine whether the Actual Deferral Percentage for the
Highly Compensated Employees would exceed the limitation set forth in Section A.2.3. If the
limitation would be exceeded for a Plan Year, before the close of the following Plan Year (a) the
amount of Excess 401(k) Contributions for that Plan Year (and any income allocable to those contributions as calculated in the specific manner required by
Section A.3.5) shall be distributed or (b) the Employer may make a QNEC which it elects to have
treated as a Section 401(k) Contribution. However, a QNEC shall not be taken into account for
purposes of the test set forth in section 401(k) of the Code and Section A.2.3 for such Plan Year
unless it is made and allocated by the close of such Plan Year.



 


A-5









 








The amount of Excess 401(k) Contributions to be distributed shall be determined in the
following manner:



First, the Plan will determine how much the Actual Deferral Ratio of the Highly Compensated
Employee with the highest Actual Deferral Ratio would have to be reduced to satisfy the Actual
Deferral Percentage Test or cause such Actual Deferral Ratio to equal the Actual Deferral Ratio of
the Highly Compensated Employee with the next highest Actual Deferral Ratio. If a lesser reduction
would enable the Plan to satisfy the Actual Deferral Percentage Test, only this lesser reduction
may be made. Second, this process is repeated until the Actual Deferral Percentage Test is
satisfied. The amount of Excess 401(k) Contributions is equal to the sum of these hypothetical
reductions multiplied, in each case, by the Highly Compensated Employee’s Annual Compensation.



Then, the total amount of Excess 401(k) Contributions shall be distributed on the basis of the
respective amounts attributable to each Highly Compensated Employee. The Highly Compensated
Employees subject to the actual distribution are determined using the “dollar leveling method.”
The Salary Deferral Contributions of the Highly Compensated Employee with the greatest dollar
amount of Salary Deferral Contributions and other contributions treated as Section 401(k)
Contributions for the Plan Year are reduced by the amount required to cause that Highly Compensated
Employee’s Salary Deferral Contributions to equal the dollar amount of the Salary Deferral
Contributions and other contributions treated as Section 401(k) Contributions for the Plan Year of
the Highly Compensated Employee with the next highest dollar amount. This amount is then
distributed to the Highly Compensated Employee with the highest dollar amount. However, if a
lesser reduction, when added to the total dollar amount already distributed under this Section
A.3.2, would equal the total Excess 401(k) Contributions, the lesser reduction amount shall be
distributed. This process shall be continued until the amount of the Excess 401(k) Contributions
have been distributed.



QNECs will be treated as Section 401(k) Contributions only if: (a) the conditions described
in Regulation section 1.401(k)-1(b)(5) are satisfied and (b) they are allocated to Participants’
Accounts as of a date within that Plan Year and are actually paid to the Trust no later than the
end of the 12-month period immediately following the Plan Year to which the contributions relate.
If the Employer makes a QNEC that it elects to have treated as a Section 401(k) Contribution, the
Contribution will be in an amount necessary to satisfy the Actual Deferral Percentage test and will
be allocated first to those Non-Highly Compensated Employees who had the lowest Actual Deferral
Ratio.



Any distributions of the Excess 401(k) Contributions for any Plan Year are to be made to
Highly Compensated Employees on the basis of the amount of contributions by, or on behalf of, each
Highly Compensated Employee. The amount of Excess 401(k) Contributions to be distributed for any
Plan Year must be reduced by any excess Salary Deferral Contributions
previously distributed for the taxable year ending in the same Plan Year. To the extent that
Excess Section 401(k) Contributions are distributed pursuant to this Section A.3.2, the Matching
Contributions made with respect to those Excess Section 401(k) Contributions shall be forfeited.


 


A-6









 





A.3.3 Contribution Percentage Fail Safe Provision. If the limitation set forth in Section
A.2.4 would be exceeded for any Plan Year any one or more of the following corrective action shall
be taken before the close of the following Plan Year as determined by the Committee in its sole
discretion: (a) the amount of the Excess Aggregate 401(m) Contributions for that Plan Year (and any
income allocable to those Contributions as calculated in the manner set forth in Section A.3.5)
shall be forfeited or (b) the Employer may make a QNEC which it elects to have treated as a Section
401(m) Contribution. However a QNEC shall not be taken into account for purposes of the test set
forth in section 401(m) of the Code and Section A.2.4 for such Plan Year unless it is made and
allocated by the close of such Plan Year.



The amount of Excess Aggregate 401(m) Contributions to be distributed shall be determined in
the following manner:



First, the Plan will determine how much the Actual Contribution Ratio of the Highly
Compensated Employee with the highest Actual Contribution Ratio would have to be reduced to satisfy
the Actual Contribution Percentage Test or cause such Actual Contribution Ratio to equal the Actual
Contribution Ratio of the Highly Compensated Employee with the next highest Actual Contribution
Ratio. If a lesser reduction would enable the Plan to satisfy the Actual Contribution Percentage
Test, only this lesser reduction may be made. Second, this process is repeated until the Actual
Contribution Test is satisfied. The amount of Excess Aggregate 401(m) Contributions is equal to
the sum of these hypothetical reductions multiplied, in each case, by the Highly Compensated
Employee’s Annual Compensation.



Then, the total amount of Excess Aggregate 401(m) Contributions shall be forfeited on the
basis of the respective amounts attributable to each Highly Compensated Employee. The Highly
Compensated Employees subject to the forfeitures are determined using the “dollar leveling method.”
The After-Tax Contributions and Matching Contributions of the Highly Compensated Employee with the
greatest dollar amount of After-Tax Contributions and Matching Contributions and other
contributions treated as matching contributions for the Plan Year are reduced by the amount
required to cause that Highly Compensated Employee’s After-Tax Contributions and Matching
Contributions and other contributions treated as Section 401(m) Contributions for the Plan Year to
equal the dollar amount of the After-Tax Contributions and Matching Contributions and other
contributions treated as Section 401(m) Contributions for the Plan Year of the Highly Compensated
Employee with the next highest dollar amount. This amount is then forfeited from the Account of the
Highly Compensated Employee with the highest dollar amount. However, if a lesser reduction, when
added to the total dollar amount already forfeited under this Section, would equal the total Excess
Aggregate 401(m) Contributions, the lesser reduction amount shall be forfeited. This process shall
be continued until the amount of the Excess Aggregate 401(m) Contributions have been forfeited.


 


A-7









 





A.3.4 Alternative Limitation Fail Safe. As soon as practicable after the close of each Plan
Year, the Committee shall determine whether the alternative limitation would be exceeded. If the
limitation would be exceeded for any Plan Year, before the close of the following Plan
Year the Actual Deferral Percentage or Contribution Percentage of the eligible Highly
Compensated Employees, or a combination of both, shall be reduced by distributions made in the
manner described in the Regulations. These distributions shall be in addition to and not in lieu
of distributions required for Excess 401(k) Contributions and Excess Aggregate 401(m)
Contributions.



A.3.5 Income Allocable to Excess 401(k) Contributions and Excess Aggregate 401(m)
Contributions. The income allocable to Excess 401(k) Contributions for the Plan Year shall be
determined by multiplying the income for the Plan Year allocable to Section 401(k) Contributions by
a fraction. The numerator of the fraction shall be the amount of Excess 401(k) Contributions made
on behalf of the Participant for the Plan Year. The denominator of the fraction shall be the
Participant’s total Account balance attributable to Section 401(k) Contributions as of the
beginning of the Plan Year plus the Participant’s Section 401(k) Contributions for the Plan Year.
The income allocable to Excess Aggregate 401(m) Contributions for a Plan Year shall be determined
by multiplying the income for the Plan Year allocable to Section 401(m) Contributions by a
fraction. The numerator of the fraction shall be the amount of Excess Aggregate 401(m)
Contributions made on behalf of the Participant for the Plan Year. The denominator of the fraction
shall be the Participant’s total Account balance attributable to Section 401(m) Contributions as of
the beginning of the Plan Year plus the Participant’s Section 401(m) Contributions for the Plan
Year.



PART A.4 Limitation on Allocations




A.4.1 Basic Limitation on Allocations. The Annual Additions which may be credited to a
Participant’s Accounts under the Plan for any Limitation Year will not exceed the Maximum
Permissible Amount reduced by the Annual Additions credited to a Participant’s Account for the same
Limitation Year under any other qualified defined contribution plans maintained by any Affiliated
Employer. If the Annual Additions with respect to the Participant under such other qualified
defined contribution plans are less than the Maximum Permissible Amount and the Employer
Contribution that would otherwise be contributed or allocated to the Participant’s Accounts under
the Plan would cause the Annual Additions for the Limitation Year to exceed this limitation, the
amount contributed or allocated under the Plan will be reduced so that the Annual Additions under
all qualified defined contribution plans maintained by any Affiliated Employer for the Limitation
Year will equal the Maximum Permissible Amount. If the Annual Additions with respect to the
Participant under such other qualified defined contribution plans maintained by any Affiliated
Employer in the aggregate are equal to or greater than the Maximum Permissible Amount, no amount
will be contributed or allocated to the Participant’s Account under the Plan for the Limitation
Year.



A.4.2 Estimation of Maximum Permissible Amount. Prior to determining the Participant’s actual
Annual Compensation for the Limitation Year, the Employer may determine the Maximum Permissible
Amount on the basis of a reasonable estimation of the Participant’s Annual Compensation for such
Limitation Year, uniformly determined for all Participants similarly situated. As soon as is
administratively feasible after the end of the Limitation Year, the Maximum Permissible Amount for
the Limitation Year shall be determined on the basis of the Participant’s actual Annual
Compensation for such Limitation Year.


 


A-8









 





A.4.3 Attribution of Excess Amounts. If a Participant’s Annual Additions under the Plan and
all other qualified defined contribution plans maintained by any Affiliated Employer result in an
Excess Amount, the total Excess Amount shall be attributed to the Plan.



A.4.4 Treatment of Excess Amounts. If an Excess Amount attributed to the Plan is held or
contributed as a result of or because of (i) the allocation of forfeitures, (ii) reasonable error
in estimating a Participant’s Considered Compensation, (iii) reasonable error in calculating the
maximum Salary Deferral Contribution that may be made with respect to a Participant under section
415 of the Code or (iv) any other facts and circumstances which the Commissioner of Internal
Revenue finds to be justified, the Excess Amount shall be reduced as follows:




(a) First, the Excess Amount shall be reduced to the extent necessary by distributing
to the Participant all Salary Deferral Contributions together with their earnings. These
distributed amounts are disregarded for purposes of the testing and limitations contained in
this Appendix A.




(b) Second, if the Participant is still employed by the Employer at the end of the
Limitation Year, then such Excess Amounts shall not be distributed to the Participant, but
shall be reallocated to a suspense account and shall be reapplied to reduce future Employer
Contributions (including any allocation of forfeitures) under the Plan for such Participant
in the next Limitation Year, and for each succeeding Limitation Year, if necessary.




(c) If, after application of paragraph (b) of this Section, an Excess Amount still
exists, and the Participant is not still employed by the Employer at the end of the
Limitation Year, then such Excess Amounts in the Participant’s Accounts shall not be
distributed to the Participant, but shall be reallocated to a suspense account and shall be
reapplied to reduce future Employer Contributions (including allocation of any forfeitures),
for all remaining Participants in the next Limitation Year and each succeeding Limitation
Year if necessary.




(d) If a suspense account is in existence at any time during the Limitation Year
pursuant to this Section, it will not participate in the allocation of the Trust Fund’s
investment gains and losses. If a suspense account is in existence at any time during a
particular Limitation Year, all amounts in the suspense account must be allocated and
reallocated to Participants’ Accounts before any Employer Contribution may be made to the
Plan for that Limitation Year. Excess Amounts may not be distributed to Participants or
former Participants. If the Plan is terminated while a suspense account described in this
Section is in existence, the amount in such suspense account shall revert to the Employer(s)
to which it is attributable.


 


A-9









 





Appendix B




TOP-HEAVY REQUIREMENTS




PART B.1 Definitions




Definitions. As used herein, the following words and phrases have the meaning attributed to
them below:



B.1.1 “Aggregate Accounts” means the total of all account balances.



B.1.2 “Aggregation Group” means (a) each plan of the Employer or any Affiliated Employer in
which a Key Employee is a Participant and (b) each other plan of the Employer or any Affiliated
Employer which enables any plan in (a) to meet the requirements of either section 401(a)(4) or 410
of the Code. Any Employer may treat a plan not required to be included in the Aggregation Group as
being a part of the group if the group would continue to meet the requirements of section 401(a)(4)
and 410 of the Code with that plan being taken into account.



B.1.3 “Determination Date” means for a given Plan Year the last day of the preceding Plan Year
or in the case of the first Plan Year the last day of that Plan Year.



B.1.4 “Key Employee” means “Key Employee” means an Employee or former Employee (including a
deceased Employee) who at any time during the Plan Year is (a) an officer of any Affiliated
Employer having Annual Compensation greater than $130,000.00 (as adjusted by the Secretary of
Treasury from time to time for increases in the cost of living), (b) a Five Percent Owner of any
Affiliated Employer, treated separately, or (c) a One Percent Owner of any Affiliated Employer,
treated separately, having Annual Compensation greater than $150,000.00. For this purpose no more
than fifty (50) employees or, if lesser, the greater of three (3) employees or ten percent (10%) of
the employees shall be treated as officers.



For purposes of determining the number of officers taken into account, the following employees
shall be excluded: (1) employees who have not completed six (6) months of Vesting Service, (2)
employees who normally work less than seventeen and one-half (17-1/2) hours per week, (3) employees
who normally work not more than six (6) months during any year, (4) employees who have not attained
the age of twenty-one (21), and (5) except to the extent provided in Regulations, employees who are
included in a unit of employees covered by an agreement which the Secretary of Labor finds to be a
collective bargaining agreement between employee representatives and an Affiliated Employer.
Section 416(i) of the Code shall be used to determine percentage of ownership.



The determination of who is a Key Employee will be made in accordance with section 416(i) of
the Code and applicable Regulations.




B.1.5 “Non-Key Employee” means any Employee who is not a Key Employee.



B.1.6 “Top-Heavy Plan” means any plan which has been determined to be top-heavy under the test
described in Appendix B of the Plan.


 


B-1









 





PART B.2 Application




B.2.1 Application. The requirements described in this Appendix B shall apply to each Plan
Year that the Plan is determined to be a Top-Heavy Plan.



B.2.2 Top-Heavy Test. If on the Determination Date the Aggregate Accounts of Key Employees in
the Plan exceed 60 percent of the Aggregate Accounts of all Employees in the Plan, the Plan shall
be a Top-Heavy Plan for that Plan Year. In addition, if the Plan is required to be included in an
Aggregation Group and that group is a top-heavy group, the Plan shall be treated as a Top-Heavy
Plan. An Aggregation Group is a top-heavy group if on the Determination Date the sum of (a) the
present value of the cumulative accrued benefits for Key Employees under all defined benefit plans
in the Aggregation Group which contains the Plan, plus (b) the total of all of the accounts of Key
Employees under all defined contribution plans included in the Aggregation Group (which contains
the Plan) is more than 60 percent of a similar sum determined for all employees covered in the
Aggregation Group which contains the Plan.



In applying the above tests, the following rules shall apply:




(a) in determining the present value of the accumulated accrued benefits for any
Employee or the amount in the account of any Employee, the value or amount shall be
increased by all distributions made to or for the benefit of the Employee under the Plan
after his Separation From Service and during the one-year period ending on the Determination
Date;




(b) in determining the present value of the accumulated accrued benefits for any
Employee or the amount in the account of any Employee, the value or amount shall be
increased by all distributions made to or for the benefit of the Employee under the Plan
prior to his Separation From Service and during the five-year period ending on the
Determination Date;




(c) all rollover contributions made by the Employee to the Plan shall not be considered
by the Plan for either test;




(d) if an Employee is a Non-Key Employee under the Plan for the Plan Year but was a Key
Employee under the Plan for a prior Plan Year, his Account shall not be considered; and




(e) notwithstanding any other provision of the Plan, benefits shall not be taken into
account in determining the top-heavy ratio for any Employee who has not performed services
for the Employer during the last one-year period ending upon the Determination Date.




 


B-2









 





B.2.3 Vesting Restrictions if Plan Becomes Top-Heavy. If a Participant has at least one Hour
of Service during a Plan Year when the Plan is a Top-Heavy Plan, he shall either vest under each of
the normal vesting provisions of the Plan or under the following vesting schedule, whichever is
more favorable:





	 	 	 	 	 
	 	 	Vested Percentage of Amount	 
	 	 	In Accounts Containing	 
	Completed Years of Active Service	 	Employer Contributions	 
	Less than two years
	 	 	0	 
	Two years but less than three years
	 	 	20	 
	Three years but less than four years
	 	 	40	 
	Four years but less than five years
	 	 	60	 
	Five years but less than six years
	 	 	80	 
	Six years or more
	 	 	100	 






If the Plan ceases to be a Top-Heavy Plan, this requirement shall no longer apply. After that
date, the normal vesting provisions of the Plan shall be applicable to all subsequent Contributions
by the Employer.



For purposes of this Section B.2.3 Years of Active Service shall be determined under the rules
of section 411(a)(4), (5) and (6) of the Code except that Years of Active Service beginning prior
to January 1, 1984 and Years of Active Service for any Plan Year for which the Plan was not
top-heavy shall be disregarded. Also, any Year of Active Service shall be disregarded to the
extent that such Year of Active Service occurs during a Plan Year when the Plan benefits (within
the meaning of section 410(b) of the Code) no Key Employee for former Key Employee.



B.2.4 Minimum Contributions if Plan Becomes Top-Heavy. If the Plan is a Top-Heavy Plan and
the normal allocation of the Employer Contribution and forfeitures is less than five percent of any
Non-Key Employee Participant’s Annual Compensation, the Committee, without regard to the normal
allocation procedures, shall allocate the Employer Contribution and the forfeitures among the
Participants who are Non-Key Employees and who are in the employ of the Employer at the end of the
Plan Year in proportion to each such Participant’s Annual Compensation until each Non-Key Employee
Participant has had an amount equal to five percent of his Annual Compensation allocated to his
Account. At that time, any more Employer Contributions or forfeitures shall be allocated under the
normal allocation procedures described earlier in the Plan. Amounts that may be treated as Section
401(k) Contributions made on behalf of Non-Key Employees may not be included in determining the
minimum contribution required under this Section to the extent that they are treated as Section
401(k) Contributions for purposes of the Actual Deferral Percentage test.



In applying this restriction, the following rules shall apply:




(a) Each Employee who is eligible for participation (without regard to whether he has
made mandatory contributions, if any are required, or whether his compensation is less than
a stated amount) shall be entitled to receive an allocation under this Section; and




(b) All defined contribution plans required to be included in the Aggregation Group
shall be treated as one plan for purposes of meeting the three percent maximum; this
required aggregation shall not apply if the Plan is also required to be included in an
Aggregation Group which includes a defined benefit plan and the Plan enables that
defined benefit plan to meet the requirements of sections 401(a)(4) or 410 of the Code.



B.2.5 Disregard of Government Programs. If the Plan is a Top-Heavy Plan, it must meet the
vesting and benefit requirements described in this Article without taking into account
contributions or benefits under Chapter 2 of the Code (relating to the tax on self-employment
income), Chapter 21 of the Code (relating to the Federal Insurance Contributions Act), Title II of
the Social Security Act, or any other Federal or State law.


 


B-3









 





Appendix C




ADMINISTRATION OF THE PLAN




C.1 Appointment, Term, Resignation, and Removal. The Board shall appoint a Committee of not
less than two persons, the members of which shall serve until their resignation, death, or removal.
The Sponsor shall notify the Trustee in writing of its composition from time to time. Any member
of the Committee may resign at any time by giving written notice of such resignation to the
Sponsor. Any member of the Committee may be removed by the Board, with or without cause. Vacancies
in the Committee arising by resignation, death, removal, or otherwise shall be filled by such
persons as may be appointed by the Board.



C.2 Powers. The Committee shall have exclusive responsibility for the administration of the
Plan, according to the terms and provisions of this document, and shall have all powers necessary
to accomplish such purposes, including, but not by way of limitation, the right, power, and
authority:




(a) to make rules and regulations for the administration of the Plan which are not
inconsistent with the terms and provisions thereof, provided such rules and regulations are
evidenced in writing;




(b) to construe all terms, provisions, conditions, and limitations of the Plan; and its
construction thereof made in good faith and without discrimination in favor of or against
any Participant or former Participant shall be final and conclusive on all parties at
interest;




(c) to correct any defect, supply any omission, or reconcile any inconsistency which
may appear in the Plan in such manner and to such extent as it shall deem expedient to carry
the Plan into effect for the greatest benefit of all parties at interest, and its judgment
in such matters shall be final and conclusive as to all parties at interest;




(d) to select, employ, and compensate from time to time such consultants, actuaries,
accountants, attorneys, and other agents and employees as the Committee may deem necessary
or advisable for the proper and efficient administration of the Plan, and any agent, firm,
or employee so selected by the Committee may be a disqualified person, but only if the
requirements of section 4975(d) of the Code have been met;




(e) to resolve all questions relating to the eligibility of Employees to become
Participants, and to determine the period of Active Service and the amount of Considered
Compensation upon which the benefits of each Participant shall be calculated;




(f) to resolve all controversies relating to the administration of the Plan, including
but not limited to (1) differences of opinion arising between the Employer and a Participant
or former Participant, and (2) any questions it deems advisable to determine in order to
promote the uniform and nondiscriminatory administration of the Plan for the benefit of all
parties at interest;


 


C-1









 






(g) to direct and instruct or to appoint an investment manager or managers which would
have the power to direct and instruct the Trustee in all matters relating to the
preservation, investment, reinvestment, management, and disposition of the Trust assets;
provided, however, that the Committee shall have no authority that would prevent the Trustee
from being an “agent independent of the issuer,” as that term is defined in Rule 10b-18
promulgated under the Securities Exchange Act of 1934, at any time that the Trustee’s
failure to maintain such status would result in the Sponsor or any other person engaging in
a “manipulative or deceptive device or contrivance” under the provisions of Rule 10b-6 of
such Act;




(h) to direct and instruct the Trustee in all matters relating to the payment of Plan
benefits and to determine a Participant’s or former Participant’s entitlement to a benefit
should he appeal a denial of his claim for a benefit or any portion thereof; and




(i) to delegate such of its clerical and recordation duties under the Plan as it may
deem necessary or advisable for the proper and efficient administration of the Plan.



C.3 Organization. The Committee shall select from among its members a chairman, who shall
preside at all of its meetings, and shall select a secretary, without regard as to whether that
person is a member of the Committee, who shall keep all records, documents, and data pertaining to
its supervision of the administration of the Plan.



C.4 Quorum and Majority Action. A majority of the members of the Committee shall constitute a
quorum for the transaction of business, and the vote of a majority of the members present at any
meeting will decide any question brought before that meeting. In addition, the Committee may decide
any question by a vote, taken without a meeting, of a majority of its members.



C.5 Signatures. The chairman, the secretary, and any one or more of the members of the
Committee to which the Committee has delegated the power, shall each, severally, have the power to
execute any document on behalf of the Committee, and to execute any certificate or other written
evidence of the action of the Committee. The Trustee, after being notified of any such delegation
of power in writing, shall thereafter accept and may rely upon any document executed by such member
or members as representing the action of the Committee until the Committee files with the Trustee a
written revocation of that delegation of power.



C.6 Disqualification of Committee Members. A member of the Committee who is also a
Participant of the Plan shall not vote or act upon any matter relating solely to himself.



C.7 Disclosure to Participants. The Committee shall make available to each Participant,
former Participant, and Beneficiary for his examination such records, documents, and other data as
are required under ERISA, but only at reasonable times during business hours. No Participant,
former Participant, or Beneficiary shall have the right to examine any data or records reflecting
the compensation paid to any other Participant, former Participant, or Beneficiary, and the
Committee shall not be required to make any data or records available other than those required by
ERISA.


 


C-2









 





C.8 Standard of Performance. The Committee and each of its members shall use the care, skill,
prudence, and diligence under the circumstances then prevailing that a prudent man acting in a like
capacity and familiar with such matters would use in conducting his business as the administrator
of the Plan; shall, when exercising its power to direct investments, diversify 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; and shall otherwise act in accordance with the provisions of the Plan and
ERISA.



C.9 Liability of Administrative Committee and Liability Insurance. No member of the Committee
shall be liable for any act or omission of any other member of the Committee, the Trustee, any
investment manager, or any Participant or former Participant who directs the investment of his
Account or other agent appointed by the Committee except to the extent required by the terms of
ERISA, and any other applicable state or federal law, which liability cannot be waived. No
Participant of the Committee shall be liable for any act or omission on his own part except to the
extent required by the terms of ERISA, and any other applicable state or federal law, which
liability cannot be waived. In this connection, each provision hereof is severable and if any
provision is found to be void as against public policy, it shall not affect the validity of any
other provision hereof.



Further, it is specifically provided that the Trustee may, at the direction of the Committee,
purchase out of the Trust assets insurance for the members of the Committee and any other
fiduciaries appointed by the Committee, and for the Trust itself to cover liability or losses
occurring by reason of the act or omission of any one or more of the members of the Committee or
any other fiduciary appointed by them under the Plan, provided such insurance permits recourse by
the insurer against the members of the Committee or the other fiduciaries concerned in the case of
a breach of a fiduciary obligation by one or more members of the Committee or other fiduciary
covered thereby.



C.10 Bonding. No member of the Committee shall be required to give bond for the performance
of his duties hereunder unless required by a law which cannot be waived.



C.11 Compensation. The Committee shall serve without compensation for their services, but
shall be reimbursed by the Employers for all expenses properly and actually incurred in the
performance of their duties under the Plan unless the Employers elect to have such expenses paid
out of the Trust assets.



C.12 Persons Serving in Dual Fiduciary Roles. Any person, group of persons, corporations,
firm, or other entity may serve in more than one fiduciary capacity with respect to the Plan,
including the ability to serve both as a successor trustee and as a member of the Committee.



C.13 Administrator. For all purposes of ERISA, the administrator of the Plan within the
meaning of ERISA shall be the Sponsor. The Sponsor shall have final responsibility for compliance
with all reporting and disclosure requirements imposed with respect to the Plan under any federal
or state law, or any regulations promulgated thereunder.


 


C-3









 





C.14 Named Fiduciary. The members of the Committee shall be the “named fiduciary” for
purposes of section 402(a)(1) of ERISA, and as such shall have the authority to control and manage
the operation and administration of the Plan, except to the extent such authority and control is
allocated or delegated to other parties pursuant to the terms of the Plan.



C.15 Standard of Judicial Review of Committee Actions. The Committee has full and absolute
discretion in the exercise of each and every aspect of its authority under the Plan, including
without limitation, the authority to determine any person’s right to benefits under the Plan, the
correct amount and form of any such benefits; the authority to decide any appeal; the authority to
review and correct the actions of any prior administrative committee; and all of the rights,
powers, and authorities specified in this Appendix and elsewhere in the Plan. Notwithstanding any
provision of law or any explicit or implicit provision of this document, any action taken, or
ruling or decision made, by the Committee in the exercise of any of its powers and authorities
under the Plan will be final and conclusive as to all parties other than the Sponsor or Trustee,
including without limitation all Participants, former Participants and Beneficiaries, regardless of
whether the Committee or one or more members thereof may have an actual or potential conflict of
interest with respect to the subject matter of such action, ruling, or decision. No such final
action, ruling, or decision of the Committee will be subject to de novo review in any judicial
proceeding; and no such final action, ruling, or decision of the Committee may be set aside unless
it is held to have been arbitrary and capricious by a final judgment of a court having jurisdiction
with respect to the issue.



C.16 Indemnification of Committee by the Sponsor. The Sponsor shall indemnify and hold
harmless the Committee, the Committee members, and any persons to whom the Committee has allocated
or delegated its responsibilities in accordance with the provisions hereof, as well as any other
fiduciary who is also an officer, director, or Employee of an Employer, and hold each of them
harmless from and against all claims, loss, damages, expense, and liability arising from their
responsibilities in connection with the administration of the Plan which is not otherwise paid or
reimbursed by insurance, unless the same shall result from their own willful misconduct.


 


C-4









 





Appendix D




FUNDING




D.1 Benefits Provided Solely by Trust. All benefits payable under the Plan shall be paid or
provided for solely from the Trust, and the Employer assumes no liability or responsibility
therefor.



D.2 Funding of Plan. The Plan shall be funded by one or more separate Trusts. If more than
one Trust is used, each Trust shall be designated by the name of the Plan followed by a number
assigned by the Committee at the time the Trust is established.



D.3 Incorporation of Trust. Each Trust is a part of the Plan. All rights or benefits which
accrue to a person under the Plan shall be subject also to the terms of the agreements creating the
Trust or Trusts and any amendments to them which are not in direct conflict with the Plan.



D.4 Authority of Trustee. Each Trustee shall have full title and legal ownership of the
assets in the separate Trust which, from time to time, are in his separate possession. No other
Trustee shall have joint title to or joint legal ownership of any asset in one of the other Trusts
held by another Trustee. Each Trustee shall be governed separately by the trust agreement entered
into between the Employer and that Trustee and the terms of the Plan without regard to any other
agreement entered into between any other Trustee and the Employer as a part of the Plan.



D.5 Allocation of Responsibility. To the fullest extent permitted under section 405 of ERISA,
the agreements entered into between the Employer and each of the Trustees shall be interpreted to
allocate to each Trustee its specific responsibilities, obligations and duties so as to relieve all
other Trustees from liability either through the agreement, Plan or ERISA, for any act of any other
Trustee which results in a loss to the Plan because of his act or failure to act.



D.6 Trustee’s Fees and Expenses. The Trustee shall receive for its services as Trustee
hereunder the compensation which from time to time may be agreed upon by the Sponsor and the
Trustee. All of such compensation, together with the expenses incurred by the Trustee in
connection with the administration of this Trust, including fees for legal services rendered to the
Trustee, all other charges and disbursements of the Trustee, and all other expenses of the Plan
shall be charged to and deducted from the Trust Fund, unless the Sponsor elects in writing to have
any part or all of such compensation, expenses, charges, and disbursements paid directly by the
Sponsor. The Trustee shall deduct from and charge against the Trust assets any and all taxes paid
by it which may be levied or assessed upon or in respect of the Trust hereunder or the income
thereof, and shall equitably allocate the same among the several Participants and former
Participants.




 


D-1