**Exhibit 10c**

 

CONTINENTAL MATERIALSCORPORATION

EMPLOYEES PROFIT SHARINGRETIREMENT PLAN

*** ***

***2009 Amendment and Restatement***

 

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**CONTINENTALMATERIALS CORPORATION**

**EMPLOYEESPROFIT SHARING RETIREMENT****PLAN**

 

**WHEREAS,** Continental Materials Corporation(hereinafter referred to as the “Employer”) heretofore adopted the ContinentalMaterials Corporation Employees Profit Sharing Retirement Plan (hereinafterreferred to as the “Plan”) for the benefit of its eligible Employees, effectiveas of January 1, 1965; and

 

**WHEREAS,**the Employer reserved the right to amendthe Plan; and

 

**WHEREAS,**the Employer wishes to amend the Plan inorder to comply with changes permitted or required by the Economic Growth andTax Relief Reconciliation Act of 2001 (“EGTRRA”), technical corrections made bythe Job Creation and Worker Assistance Act of 2002 (“JCWAA”), and otherregulations and guidance published by the Internal Revenue Service that areeffective after December 31, 2001, including final regulations issuedunder Section 415 of the Internal Revenue Code of 1986, as amended (the“Code”); and

 

**WHEREAS,**it is intended that the Plan is tocontinue to be a qualified profit sharing plan underSection 401(a) and 501(a) of the Code for the exclusive benefitof the Participants and their Beneficiaries; and

 

**WHEREAS,**it is intended that the cash or deferralarrangement forming part of the Plan is to continue to qualify underSection 401(k) of the Code;

 

**NOW, THEREFORE,**the Plan is hereby amended by restatingthe Plan, effective as of January 1, 2009, except where the provisions ofthe Plan (or the requirements of applicable law) shall otherwise specificallyprovide, in its entirety as follows:

 

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**TABLE OFCONTENTS**

 

**ARTICLE ONE—DEFINITIONS**

1.1                                 Account

1.2                                 Administrator

1.3                                 Beneficiary

1.4                                 Break in Service

1.5                                 Code

1.6                                 CompanyStock

1.7                                 Compensation

1.8                                 Disability

1.9                                 Effective Date

1.10                           Employee

1.11                           Employer

1.12                           Employment Date

1.13                           Fail-Safe Contribution

1.14                           Highly-Compensated Employee

1.15                           Hour of Service

1.16                           Leased Employee

1.17                           Nonhighly-Compensated Employee

1.18                           Normal Retirement Date

1.19                           Participant

1.20                           Plan

1.21                           Plan Year

1.22                           Trust

1.23                           Trustee

1.24                           Valuation Date

1.25                           Year of Service

 

**ARTICLE TWO—SERVICE DEFINITIONS ANDRULES**

2.1                                 Year of Service

2.2                                 Break in Service

2.3                                 Leave of Absence

2.4                                 Rule of Parity on Return toEmployment

2.5                                 Service in Excluded Job Classificationsor with Related Companies

 

**ARTICLETHREE—PLAN PARTICIPATION**

3.1                                 Participation

3.2                                 Re-employment of Former Participant

3.3                                 Termination of Eligibility

3.4                                 Compliance with USERRA

 

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**ARTICLE FOUR—ELECTIVE DEFERRALS,EMPLOYER CONTRIBUTIONS, ROLLOVERS AND TRANSFERS FROM OTHER PLANS**

4.1                                 Elective Deferrals

4.2                                 Employer Contributions

4.3                                 Rollovers and Transfers of Funds fromOther Plans

4.4                                 Timing of Contributions

4.5                                 Employee After-Tax Contributions

4.6                                 Allocation of Service Credit

 

**ARTICLE FIVE—ACCOUNTING RULES**

5.1                                 Investment of Accounts and AccountingRules

 

**ARTICLE SIX—VESTING AND RETIREMENTBENEFITS**

6.1                                 Vesting

6.2                                 Forfeiture of Nonvested Balance

6.3                                 Distribution of Less than Entire VestedAccount Balance

6.4                                 Normal Retirement

6.5                                 Disability

 

**ARTICLE SEVEN—MANNER AND TIME OFDISTRIBUTING BENEFITS**

7.1                                 Manner of Payment

7.2                                 Time of Commencement of Benefit Payments

7.3                                 Furnishing Information

7.4                                 Minimum Distribution Requirements

7.5                                 Amount of Death Benefit

7.6                                 Designation of Beneficiary

7.7                                 Distribution of Death Benefits

7.8                                 Eligible Rollover Distributions

 

**ARTICLE EIGHT—LOANS AND IN-SERVICEWITHDRAWALS**

8.1                                 Loans

8.2                                 Hardship Distributions

8.3                                 Withdrawals After Age 591⁄2

8.4                                 Withdrawals of After-Tax Contributions

8.5                                 Withdrawals of Rollover Contributions

8.6                                 Withdrawals of Employer Contributions forother Financial Needs: For Former Williams Furnace Plan Participants

 

**ARTICLE NINE—ADMINISTRATION OF THEPLAN**

9.1                                 Plan Administration

9.2                                 Claims Procedure

9.3                                 Trust Agreement

 

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**ARTICLE TEN—SPECIAL COMPLIANCEPROVISIONS**

10.1                           Distribution of Excess Elective Deferrals

10.2                           Limitations on 401(k) Contributions

10.3                           Nondiscrimination Test for EmployerMatching Contributions and After Tax Contributions

 

**ARTICLE ELEVEN—LIMITATION ON ANNUALADDITIONS**

11.1                           Rules and Definitions

 

**ARTICLE TWELVE—AMENDMENT ANDTERMINATION**

12.1                           Amendment

12.2                           Termination of the Plan

 

**ARTICLE THIRTEEN—TOP-HEAVY PROVISIONS**

13.1                           Applicability

13.2                           Definitions

13.3                           Allocation of Employer Contributions andForfeitures for a Top-Heavy Plan Year

13.4                           Vesting

 

**ARTICLE FOURTEEN—MISCELLANEOUSPROVISIONS**

14.1                           Plan Does Not Affect Employment

14.2                           Successor to the Employer

14.3                           Repayments to the Employer

14.4                           Benefits not Assignable

14.5                           Merger of Plans

14.6                           Investment Experience not a Forfeiture

14.7                           Construction

14.8                           Governing Documents

14.9                           Governing Law

14.10                     Headings

14.11                     Counterparts

14.12                     Location of Participant or BeneficiaryUnknown

14.13                     Distribution to Minor or LegallyIncapacitated

 

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**ARTICLEONE—DEFINITIONS**

 

For purposes of the Plan, unless the context or analternative definition specified within another Article providesotherwise, the following words and phrases shall have the definitions provided:

 

**1.1****                              ****“ACCOUNT”**shall mean the individual bookkeepingaccounts maintained for a Participant under the Plan which shall record(a) the Participant’s allocations of Employer contributions andforfeitures, (b) amounts of Compensation deferred to the Plan pursuant tothe Participant’s election, (c) any amounts transferred to this Plan underSection 4.3 from another qualified retirement plan, or from anotherqualified plan in connection with a plan merger, (d) any after-taxcontributions previously made to the Plan, and (e) the allocation of Trustinvestment experience.

 

**1.2****                              ****“ADMINISTRATOR”**shall mean the Plan Administratorappointed from time to time in accordance with the provisions ofArticle Nine hereof.

 

**1.3****                              ****“BENEFICIARY”**shall mean any person, trust,organization, or estate entitled to receive payment under the terms of the Planupon the death of a Participant.

 

**1.4****                              ****“BREAK IN SERVICE”**shall have the meaning set forth inArticle Two.

 

**1.5****                              ****“CODE”**shall mean the Internal Revenue Code of1986, as amended from time to time.

 

**1.6****                              ****“COMPANY STOCK”**shall mean shares of common stock ofContinental Materials Corporation.

 

**1.7****                              ****“COMPENSATION”**shall mean the compensation paid to aParticipant by the Employer for the Plan Year, but exclusive of any program ofdeferred compensation or additional benefits payable other than in cash andexclusive of any compensation received prior to his becoming a Participant inthe Plan.  Compensation shall include anyamounts deferred under a salary reduction agreement in accordance withSection 4.1 or a Code Section 125 plan maintained by the Employer.

 

Notwithstandingthe foregoing, Compensation shall exclude nonqualified moving expensereimbursements, taxable fringe benefits, excess group term life insurance, andtaxable medical or disability benefits.

 

Any Compensationpaid after the Participant’s severance from employment with the Employer(except for Compensation attributable to the pay period in which the severancefrom employment occurred) shall not be treated as Compensation for purposes ofSection 4.1 and Section 4.2.

 

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In addition toother applicable limitations set forth in the Plan, and notwithstanding anyother provision of the Plan to the contrary, the annual Compensation of eachParticipant taken into account under the Plan shall not exceed $245,000 for the2009 calendar year, and shall be adjusted annually by the Secretary of theTreasury or his delegate for increases in the cost of living in accordance withSection 401(a)(17)(B) of the Code. The cost-of-living adjustment in effect for a calendar year applies toany period, not exceeding twelve (12) months, over which Compensation isdetermined (determination period) beginning in such calendar year.  If a determination period consists of fewerthan twelve (12) months, the annual compensation limit shall be multiplied by afraction, the numerator of which is the number of months in the determinationperiod, and the denominator of which is twelve (12).

 

For purposes of determining who is aHighly-Compensated Employee, Compensation shall mean “Compensation” as definedabove.  However, in the event, thedefinition of Compensation excludes commission paid salesmen, compensation forservices on the basis of a percentage for profits, commissions on insurancepremiums, tips, bonuses, fringe benefits, and/or reimbursements or expenseallowances under a nonaccountable plan (as described in RegulationSection 1.62-2(c)), such excluded amounts shall be taken into account.

 

For purposes ofapplying the limitations described in Section 11.1, and for purposes ofdefining compensation under Section 1.14 and Article Thirteen of thePlan, compensation paid or made available during such limitations years (orPlan Years) shall include elective amounts that are not includible in the grossincome of the Employee by reason of Section 125, 132(f)(4), 402(g)(3),402(h)(1)(B), 457(b) or 403(b) of the Code.

 

**1.8****                              ****“DISABILITY”**shall mean a “permanent and total” disabilityincurred by a Participant while in the employ of the Employer.  A Participant shall be deemed “disabled” if,in the opinion of the Administrator and based upon appropriate medical adviceand examination, he is unable to perform his normal work for the Employer orany other work for which he is qualified by reason of education, training, orexperience by reason of a medically determinable physical or mental impairment.

 

**1.9****                              ****“EFFECTIVE DATE.” **The Plan’s initial Effective Date was January 1, 1965.  The Effective Date of this restated Plan, onand after which it supersedes the terms of the existing Plan document, isJanuary 1, 2009, except where the provisions of the Plan (or therequirements of applicable law) shall otherwise specifically provide.  The rights of any Participant who terminatedemployment with the Employer prior to the applicable date shall be establishedunder the terms of the Plan and Trust as in effect at the time of theParticipant’s termination from employment, unless the Participant subsequentlyreturns to employment with the Employer, or unless otherwise provided under theterms of the Plan.  Rights of spouses andBeneficiaries of such Participants shall also be governed by those documents.

 

**1.10****                       ****“EMPLOYEE”**shall mean a common law employee of theEmployer.  The term “Employee” shall alsoinclude any Leased Employee deemed to be an Employee of the Employer.

 

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**1.11****                       ****“EMPLOYER”**shall mean Continental Materials Corporationand any subsidiary or affiliate which is a member of its “related group” (asdefined in Section 2.5) which has adopted the Plan (a “ParticipatingAffiliate”), and shall include any successor(s) thereto which adopt thisPlan.  Any such subsidiary or affiliateof Continental Materials Corporation may adopt the Plan with the approval ofits board of directors (or noncorporate counterpart) subject to the approval ofContinental Materials Corporation.  Theprovisions of this Plan shall apply equally to each Participating Affiliate andits Employees except as specifically set forth in the Plan; provided, however,notwithstanding any other provision of this Plan, the amount and timing ofcontributions under Article 4 to be made by any Employer which is aParticipating Affiliate shall be made subject to the approval of ContinentalMaterials Corporation.  For purposeshereof, each Participating Affiliate shall be deemed to have appointedContinental Materials Corporation as its agent to act on its behalf in allmatters relating to the administration, amendment, termination of the Plan andthe investment of the assets of the Plan. For purposes of the Code and ERISA, the Plan as maintained byContinental Materials Corporation and the Participating Affiliates shallconstitute a single plan rather than a separate plan of each ParticipatingAffiliate.  All assets in the Trust shallbe available to pay benefits to all Participants and their Beneficiaries.

 

**1.12****                       ****“EMPLOYMENT DATE”**shall mean the first date as of which anEmployee is credited with an Hour of Service, provided that, in the case of aBreak in Service, the Employment Date shall be the first date thereafter as ofwhich an Employee is credited with an Hour of Service.

 

**1.13****                       ****“FAIL-SAFE CONTRIBUTION”**shall mean a qualified nonelective contributionwhich is a contribution (other than matching contributions or QualifiedMatching Contributions (within the meaning of Section 10.2)) made by theEmployer and allocated to Participants’ accounts that the Participants may notelect to receive in cash until distribution from the Plan; that arenonforfeitable when made; and that are distributable only in accordance withthe distribution provisions under Section 401(k) of the Code and theregulations promulgated thereunder.

 

**1.14****                       ****“HIGHLY-COMPENSATED EMPLOYEE”**shall mean any Employee of the Employer who:

 

(a)                                  was a five percent (5%) owner of the Employer(as defined in Section 416(i)(1)) of the Code at any time during the“determination year” or “look-back year”; or

 

(b)                                 earned more than $105,000 of Compensation fromthe Employer during the “look-back year” and was in the top twenty percent(20%) of Employees by Compensation for such year.  The $105,000 amount shall be adjusted at thesame time and in the same manner as under Section 415(d) of the Code.

 

An Employee who terminated employment prior to the“determination year” shall be treated as a Highly-Compensated Employee for the“determination year” if such Employee was a Highly-Compensated Employee whensuch Employee terminated employment, or was a Highly-Compensated Employee atany time after attaining age fifty-five (55).

 

For purposes ofthis Section, the “determination year” shall be the Plan Year for which adetermination is being made as to whether an Employee is a Highly-CompensatedEmployee.  

 

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The “look-backyear” shall be the twelve (12) month period immediately preceding the“determination year”.

 

**1.15****                       ****“HOUR OF SERVICE”**shall have the meaning set forth below:

 

(a)                                  An Hour of Service is each hour for whichan Employee is paid, or entitled to payment, for the performance of duties forthe Employer, during the applicable computation period.

 

(b)                                 An Hour of Service is each hour for which anEmployee is paid, or entitled to payment, by the Employer on account of aperiod of time during which no duties are performed (irrespective of whetherthe employment relationship has terminated) due to vacation, holiday, illness,incapacity (including disability), layoff, jury duty, military duty, or leaveof absence.  Notwithstanding thepreceding sentence,

 

(i)                                     No more than five hundred and one (501) Hoursof Service shall be credited under this paragraph (b) to any Employee onaccount of any single continuous period during which the Employee performs noduties (whether or not such period occurs in a single computation period).  Hours under this paragraph will be calculatedand credited pursuant to Section 2530.200b-2 of the Department of LaborRegulations which is incorporated herein by reference;

 

(ii)                                  An hour for which an Employee is directlyor indirectly paid, or entitled to payment, on account of a period during whichno duties are performed shall not be credited to the Employee if such paymentis made or due under a plan maintained solely for the purpose of complying withapplicable workmen’s compensation, or unemployment compensation or disabilityinsurance laws; and

 

(iii)                               Hours of Service shall not be creditedfor a payment which solely reimburses an Employee for medical or medicallyrelated expenses incurred by the Employee.

 

For purposes ofthis paragraph (b), a payment shall be deemed to be made by or due from theEmployer regardless of whether such payment is made by or due from the Employerdirectly, or indirectly through, among others, a trust fund, or insurer, towhich the Employer contributes or pays premiums and regardless of whethercontributions made or due to the trust fund, insurer or other entity are forthe benefit of particular Employees or are on behalf of a group of Employees inthe aggregate.

 

(c)                                  An Hour of Service is each hour for whichback pay, irrespective of mitigation of damages, is either awarded or agreed toby the Employer.  The same Hours ofService shall not be credited both under paragraph (a) or paragraph (b),as the case may be, and under this paragraph (c).  Thus, for example, an Employee who receives aback pay award following a determination that he was paid at an unlawful ratefor Hours of Service previously credited shall not be entitled to additionalcredit for the same Hours of Service. Crediting of Hours of Service for back pay awarded or agreed to withrespect to periods described in paragraph (b) shall be subject to thelimitations set forth in that paragraph.

 

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(d)                                 Hours of Service under this Section shallbe determined under the terms of the Family and Medical Leave Act of 1993 andthe Uniformed Services Employment and Reemployment Rights Act of 1994.

 

In crediting Hoursof Service, the “weeks of employment” method shall be utilized.  Under this method, an Employee shall becredited with forty-five (45) Hours of Service for each week for which theEmployee would be required to be credited with at least one (1) Hour ofService pursuant to the provisions enumerated above.

 

Hours of Serviceshall be credited for employment with other members of an affiliated servicegroup (under Section 414(m) of the Code), a controlled group ofcorporations (under Section 414(b) of the Code), or a group of tradesor businesses under common control (under Section 414(c) of the Code)of which the Employer is a member, and any other entity required to beaggregated under Section 414(o) of the Code.

 

Hours of Serviceshall be credited for any individual considered an Employee for purposes ofthis Plan under Section 414(n) or Section 414(o) of theCode.

 

**1.16****                       ****“LEASED EMPLOYEE”**shall mean any person (other than an employeeof the recipient) who, pursuant to an agreement between the recipient Employerand any other person or organization, has performed services for the recipientEmployer (determined in accordance with Section 414(n)(6) of theCode) on a substantially full-time basis for a period of at least one(1) year and where such services are performed under the primary directionand control of the recipient Employer.  Aperson shall not be considered a Leased Employee if the total number of LeasedEmployees does not exceed twenty percent (20%) of the Nonhighly-CompensatedEmployees employed by the recipient Employer, and if any such person is coveredby a money purchase pension plan providing (a) a nonintegrated employercontribution rate of at least ten percent (10%) of compensation, as defined inSection 11.1(b)(2) of the Plan but including amounts contributedpursuant to a salary reduction agreement which are excludable from theemployee’s gross income under Sections 125, 402(e)(3), 402(g), 402(h)(1)(B),403(b), or 457(b) of the Code, and shall also include elective amountsthat are not includible in the gross income of the Employee by reason ofSection 132(f) of the Code, (b) immediate participation, and(c) full and immediate vesting.

 

**1.17****                       ****“NONHIGHLY-COMPENSATEDEMPLOYEE”**shall mean anEmployee of the Employer who is not a Highly-Compensated Employee.

 

**1.18****                       ****“NORMAL RETIREMENT DATE”**shall mean the Participant’s sixtieth (60th) birthday.  The date on which the Participant attains agesixty (60) shall also be the Participant’s Normal Retirement Age.

 

**1.19****                       ****“PARTICIPANT”**shall mean any Employee who has satisfied theeligibility requirements of Article Three and who is participating in thePlan.

 

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**1.20****                       ****“PLAN”**shall mean the Continental MaterialsCorporation Employees Profit Sharing Retirement Plan, as set forth herein andas may be amended from time to time.

 

**1.21****                       ****“PLAN YEAR”**shall mean the twelve (12)-consecutive monthperiod beginning January 1 and ending December 31.

 

**1.22****                       ****“TRUST”**shall mean the Trust Agreement entered intobetween the Employer and the Trustee forming part of this Plan, together withany amendments thereto.  “Trust Fund”shall mean any and all property held by the Trustee pursuant to the TrustAgreement, together with income therefrom.

 

**1.23****                       ****“TRUSTEE”**shall mean the Trustee or Trustees appointed bythe Employer, and any successors thereto.

 

**1.24****                       ****“VALUATION DATE”**shall mean each day on which the New York StockExchange is open for business.

 

**1.25****                       ****“YEAR OF SERVICE” or “SERVICE”**and the specialrules with respect to crediting Service are in Article Two of thePlan.

 

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**ARTICLE TWO—SERVICE DEFINITIONS AND RULES**

 

Service is the period ofemployment credited under the Plan. Definitions and special rules related to Service are as follows:

 

**2.1****                              ****YEAR OF SERVICE. **For purposes of determining an Employee’s eligibility to participatein the Plan, an Employee shall be credited with a Year of Service if hecompletes at least one thousand (1,000) Hours of Service during the twelve(12)-consecutive month period commencing on his Employment Date.  If an Employee fails to be credited with atleast one thousand (1,000) Hours of Service during that computation period, heshall be credited with a Year of Service if he is credited with at least onethousand (1,000) Hours of Service in any Plan Year commencing on or after hisEmployment Date.  For purposes ofdetermining an Employee’s nonforfeitable right to that portion of his Accountattributable to Employer contributions under the schedule set forth inSection 6.1, an Employee shall be credited with a Year of Service for eachPlan Year in which he is credited with at least one thousand (1,000) Hours ofService.  For eligibility purposes, anEmployee shall be credited with a Year of Service as of the last day of eachsuch twelve (12) month period.  Forvesting purposes, an Employee shall be credited with a Year of Service uponcompletion of the one thousandth (1,000th) hour in each such twelve (12)-month period.

 

Any Employee whowas a participant in the Phoenix Manufacturing, Inc. Employees ProfitSharing Retirement Plan (the “Phoenix Plan”) and whose account balancethereunder was transferred to the Plan in connection with the merger of thePhoenix Plan as of October 1, 1997, shall be credited with any“Year(s) of Service” earned under the Phoenix Plan.  In addition, any Employee who was employed byRocky Mountain Ready Mix Concrete, Inc., Colorado State Safe and Lock orASCI as of the date of such company’s acquisition by the Employer, shall becredited with any prior service with such company in determining suchEmployee’s Year(s) of Service.

 

**2.2****                              ****BREAK IN SERVICE. **A Break in Service shall be a twelve (12)-month computation period(as used for measuring Years of Service for vesting purposes) in which anEmployee or Participant is not credited with at least five hundred and one(501) Hours of Service.

 

**2.3****                              ****LEAVE OF ABSENCE. **A Participant on an unpaid leave of absence pursuant to theEmployer’s normal personnel policies shall be credited with Hours of Service athis regularly-scheduled weekly rate while on such leave, provided the Employeracknowledges in writing that the leave is with its approval.  These Hours of Service shall be credited onlyfor purposes of determining if a Break in Service has occurred and, unlessspecified otherwise by the Employer in writing, shall not be credited foreligibility to participate in the Plan, vesting, or qualification to receive anallocation of Employer contributions and forfeitures.  Hours of Service during a paid leave ofabsence shall be credited as provided in Section 1.15.

 

For any individualwho is absent from work for any period by reason of the individual’s pregnancy,birth of the individual’s child, placement of a child with the individual inconnection with the individual’s adoption of the child, or by reason of theindividual’s caring for the child for a period beginning immediately followingsuch birth or adoption, the Plan shall treat as Hours of 

 

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Service, solelyfor determining if a Break in Service has occurred, the following Hours ofService:

 

(a)                                  the Hours of Service which otherwise normallywould have been credited to such individual but for such absence; or

 

(b)                                 in any case where the Administrator isunable to determine the Hours of Service, on the basis of an assumed eight(8) hours per day.

 

In no event shall more than five hundred and one (501)of such hours be credited by reason of such period of absence.  The Hours of Service shall be credited in thecomputation period (used for measuring Years of Service for vesting purposes)which starts after the leave of absence begins. However, the Hours of Service shall instead be credited in thecomputation period in which the absence begins if it is necessary to credit theHours of Service in that computation period to avoid the occurrence of a Breakin Service.

 

**2.4****                              ****RULE OF PARITY ON RETURN TOEMPLOYMENT.**  An Employee who returns to employment after aBreak in Service shall retain credit for his pre-Break Years of Service,subject to the following rules:

 

(a)                                  If a Participant incurs five (5) ormore consecutive Breaks in Service, any Years of Service performed thereaftershall not be used to increase the nonforfeitable interest in his Accountaccrued prior to such five (5) or more consecutive Breaks in Service.

 

(b)                                 If when a Participant incurred a Break inService, he was not vested in any portion of his Account derived from Employercontributions, his pre-Break Years of Service shall be disregarded if hisconsecutive Breaks in Service equal or exceed five (5).  Effective for Plan Years beginning on andafter January 1, 2006, the words “derived from Employer contributions”shall be removed from the preceding sentence.

 

Subject to the preceding paragraphs of this Section,an Employee’s pre-Break Years of Service and post-Break Years of Service shallcount in determining the vested percentage of the Employee’s Account derivedfrom all Employer contributions (i.e., Employer contributions attributable toemployment before and after the Employee’s Break in Service).

 

**2.5****                              ****SERVICE IN EXCLUDED JOBCLASSIFICATIONS OR WITH RELATED COMPANIES**

 

(a)                                  *Service while a Member of anIneligible Classification of Employees**.*  An Employee who is a member of an ineligibleclassification of Employees shall not be eligible to participate in the Planwhile a member of such ineligible classification.  However, if any such Employee is transferredto an eligible classification, such Employee shall be credited with any priorperiods of Service completed while a member of such an ineligibleclassification both for purposes of determining his Years of Service underSection 2.1 and his “Months of Service” under Section 3.1.  For this purpose, an Employee shall beconsidered a member of an ineligible classification of Employees for any periodduring 

 

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which he isemployed in a job classification which is excluded from participating in thePlan under Section 3.1 below.

 

(b)                                 *Service with Related GroupMembers**.*  Subject to Section 2.1, for each PlanYear in which the Employer is a member of a “related group”, as hereinafterdefined, all Service of an Employee or Leased Employee (hereinaftercollectively referred to as “Employee” solely for purposes of thisSection 2.5(b)) with any one or more members of such related group shallbe treated as employment by the Employer for purposes of determining theEmployee’s Years of Service under Section 2.1 and his Months of Serviceunder Section 3.1.  The transfer ofemployment by any such Employee to another member of the related group shallnot be deemed to constitute a retirement or other termination of employment bythe Employee for purposes of this Section, but the Employee shall be deemed tohave continued in employment with the Employer for purposes of determining theEmployee’s Years of Service and his Months of Service.  For purposes of this subsection (b), “relatedgroup” shall mean the Employer and all corporations, trades or businesses(whether or not incorporated) which constitute a controlled group ofcorporations with the Employer, a group of trades or businesses under commoncontrol with the Employer, or an affiliated service group which includes theEmployer, within the meaning of Section 414(b), Section 414(c), orSection 414(m), respectively, of the Code or any other entity required tobe aggregated under Code Section 414(o).

 

(c)                                  *Construction**.* ThisSection is included in the Plan to comply with the Code provisionsregarding the crediting of Service, and not to extend any additional rights toEmployees in ineligible classifications other than as required by the Code andregulations thereunder.

 

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**ARTICLETHREE—PLAN PARTICIPATION**

 

**3.1****                              ****PARTICIPATION. **All Employees participating in the Plan prior to thePlan’s restatement shall continue to participate, subject to the terms hereof.

 

Subject to the following provisions of thisSection 3.1, each other Employee shall become a Participant under thePlan, for all purposes, except for eligibility to share in any additionalEmployer matching contributions made under Section 4.2(b), as of the firstday of the calendar month coincident with or next following his completion ofone (1) Month of Service.  Eachother Employee shall become a Participant, for purposes of being eligible toshare in any additional Employer matching contributions made underSection 4.2(b), effective as of the first day of the calendar monthcoincident with or next following the completion of one (1) Year ofService.

 

For purposes of this Section 3.1, an Employeeshall be credited with a Month of Service for each thirty (30)-day periodcommencing on his Employment Date and ending on the date he separates fromService for any reason.

 

Notwithstandingthe foregoing, an Employee who is not in an otherwise excluded class ofEmployees under the Plan as described below and is employed in a jobclassification where the customary period of employment is less than onethousand (1,000) Hours of Service in a calendar year shall become a Participantfor all purposes as of the January 1st orJuly 1st coincident with or next following hiscompletion of a Year of Service.

 

In no event, however, shall any Employee (or otherindividual) participate under the Plan while he is:  (i) included in a unit of Employeescovered by a collective bargaining agreement between the Employer and theEmployee representatives under which retirement benefits were the subject ofgood faith bargaining, unless the terms of such bargaining agreement expresslyprovides for the inclusion in the Plan; (ii) employed as an independentcontractor on the payroll records of the Employer (regardless of any subsequentreclassification by the Employer, any governmental agency or court); or(iii) employed as a Leased Employee.

 

**3.2****                              ****RE-EMPLOYMENT OF FORMERPARTICIPANT. **A vested Participant (or a nonvestedParticipant whose prior Service cannot be disregarded) whose participationceased because of termination of employment with the Employer shall resumeparticipating upon his reemployment as an eligible Employee; provided, however,that such an individual shall be entitled to commence elective deferrals(within the meaning of Section 4.1) as soon as administratively possiblefollowing his return to participation in the Plan.

 

**3.3****                              ****TERMINATION OFELIGIBILITY. **In the event a Participant is no longer amember of an eligible class of Employees and he becomes ineligible toparticipate, such Employee shall resume participating upon his return to aneligible class of Employees; provided, however, that such an individual shallbe entitled to commence elective deferrals (within the meaning ofSection 4.1) as soon as administratively possible following his return toparticipation in the Plan.

 

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In the event anEmployee who is not a member of an eligible class of Employees becomes a memberof an eligible class, such Employee shall participate upon becoming a member ofan eligible class of Employees, if such Employee has otherwise satisfied theeligibility requirements of Section 3.1 and would have otherwisepreviously become a Participant; provided, however, that such an individualshall be entitled to commence elective deferrals (within the meaning ofSection 4.1) as soon as administratively possible following his becoming aParticipant.

 

**3.4****                              ****COMPLIANCE WITH USERRA. **Notwithstanding any provision of this Plan to the contrary,Participants shall receive service credit and be eligible to make deferrals andreceive Employer contributions with respect to periods of qualified militaryservice (within the meaning of Section 414(u)(5) of the Code) inaccordance with Section 414(u) of the Code.

 

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**ARTICLE FOUR—ELECTIVE DEFERRALS, EMPLOYERCONTRIBUTIONS, ROLLOVERS AND TRANSFERS FROM OTHER PLANS**

 

**4.1****                              ****ELECTIVE DEFERRALS**

 

(a)                                  *Elections**. *A Participant may elect to defer a portion of his Compensation for aPlan Year on a pre-tax basis.  The amountof a Participant’s Compensation contributed in accordance with theParticipant’s election shall be withheld by the Employer from the Participant’sCompensation on a ratable basis throughout the Plan Year.  Notwithstanding the foregoing, a Participantmay elect to contribute all or a portion of any bonus payments paid to himduring the Plan Year.  For purposes ofmaking elective deferrals pursuant to this Section, only Compensation earnedwhile eligible to make such deferrals shall be considered.  The amount deferred on behalf of eachParticipant shall be contributed by the Employer to the Plan and allocated tothe portion of the Participant’s Account consisting of pre-tax contributions.

 

Each Participantwho is a Nonhighly-Compensated Employee may elect to contribute from onepercent (1%) to fifty percent (50%) of such Participant’s Compensation as apre-tax contribution.  Each Participantwho is a Highly-Compensated Employees may elect to contribute from one percent(1%) to fifteen percent (15%) of such Participant’s Compensation as a pre-taxcontribution.

 

Notwithstandingthe foregoing, any Employee, upon first becoming eligible to participate in thePlan pursuant to Section 3.1, who fails to affirmatively make any deferralelection (including an election to contribute zero percent (0%) of hisCompensation to the Plan) within the time prescribed by the Administrator,shall be deemed to have elected to defer three percent (3%) of his Compensationas a pre-tax contribution (“deemed elective deferral”).  The Administrator shall provide to eachEmployee a notice of his right to receive the amount of the deemed electivedeferral in cash and his right to increase or decrease his rate of electivedeferrals.  The Administrator shall alsoprovide each such Employee a reasonable period to exercise such right beforethe date on which the cash is currently available.

 

(b)                                 *Changes in Election**. *A Participant may prospectively elect to change or revoke the amount(or percentage) of his elective deferrals during the Plan Year by filing awritten election with the Employer, or via such other method as permitted byapplicable law.

 

(c)                                  *Limitations on Deferrals**. *Except to the extent permitted under Section 4.1(e), noParticipant shall be permitted to make elective deferrals during any taxableyear in excess of the dollar limitation contained inSection 402(g) of the Code in effect for such taxable year.

 

(d)                                 *Administrative Rules**. *All elections made under this Section 4.1, including the amountand frequency of deferrals, shall be subject to the rules of theAdministrator which shall be consistently applied and which may be changed fromtime to time.

 

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(e)                                  *Catch-up Contributions**. *All Participants who are eligible to make elective deferrals underSection 4.1(a) and who have attained age fifty (50) before the closeof the taxable year shall be eligible to make catch-up contributions inaccordance with, and subject to the limitations of, Section 414(v) ofthe Code.  The dollar limit on Catch-upContributions under Section 414(v)(2)(B)(i) of the Code is $1,000 fortaxable years beginning in 2002, increasing by $1,000 for each year thereafterup to $5,500 for taxable years beginning in 2009 and later years.  After 2009, the $5,500 limit will be adjustedby the Secretary of the Treasury for cost-of-living increases underSection 414(v)(2)(C) of the Code. Any such adjustments will be in multiples of $500.

 

Such catch-upcontributions shall not be taken into account for purposes of the provisions ofthe Plan implementing the required limitations of Section 402(g) and415 of the Code.  The Plan shall not betreated as failing to satisfy the requirements of the Plan implementing therequirements of Section 401(k)(3), 401(k)(11), 401(k)(12), 402A, 410(b),or 416 of the Code, as applicable, by reason of the making of such catch-upcontributions.

 

**4.2****                              ****EMPLOYER CONTRIBUTIONS**

 

(a)                                  *Employer MatchingContributions**. *For each payroll period, the Employer maycontribute to the Plan, on behalf of each Participant, a discretionary matchingcontribution equal to a percentage (as determined by the Employer’s board ofdirectors) of the elective deferrals (within the meaning of Section 4.1)made by each such Participant; provided, however, that the amount of suchEmployer matching contribution for any Participant in a Plan Year shall notexceed three percent (3%) of the Participant’s Compensation for the periodduring which elective deferrals are made by the Participant.  The Employer’s board of directors may alsodetermine to suspend or reduce its contributions under this Section forany Plan Year or any portion thereof. Allocations under this Section shall be subject to the special rules ofSection 13.3 in any Plan Year in which the Plan is a Top-Heavy Plan (asdefined in Section 13.2(b)).

 

Notwithstandingthe foregoing provisions of this Section 4.2(a), if a Participant’selective deferrals for a Plan Year reach the maximum amount set out inSection 4.1(c) (or such other Plan imposed limit) and, as a result,the Participant is not eligible to make elective deferrals to the Plan for thebalance of such year, or if the Participant varies the rate of his electivedeferrals during a Plan Year and, as a result, fails to receive the full availablematching contribution for the year, such Participant may be entitled to receivea supplemental Employer matching contribution to the extent required to ensurethat such Participant receives the same rate of matching contribution for thePlan Year as any other Participant with the same rate of elective deferrals forsuch Plan Year.  Any such supplementalmatching contributions shall be made at the sole discretion of the Employer’sboard of directors.  The supplementalEmployer matching contributions received by any such Participant for the PlanYear shall, however, be limited to the extent required to comply with therequirements of applicable Federal law. To be eligible for any supplemental Employer matching contribution madefor a Plan Year, the Participant must be employed by the Employer on the lastday of the Plan Year; provided, however, that if the Participant’s failure tobe employed on the last day the Plan Year is due to the 

 

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Participant’sbeing on Disability, death or retirement on or after his Normal Retirement Dateduring the Plan Year, such Participant shall nevertheless be entitled to sharein the allocation of any such supplemental matching contributions made for thePlan Year.

 

(b)                                 *Additional EmployerMatching Contributions**. *For eachPlan Year, the Employer may contribute to the Plan, on behalf of theParticipants under each participating Employer eligible underSection 4.2(c), such amount, if any, as may be determined by the board ofdirectors of each participating Employer. Such contribution shall be allocated among the Accounts of such eligibleParticipants employed by the applicable Employer in accordance with the ratiothat each such eligible Participant’s Compensation bears to the totalCompensation of all such eligible Participants employed by such Employer forthe Plan Year.  Provided, however, thatfor such purposes, a Participant’s Compensation shall be taken into accountonly for the period during which the Participant made elective deferrals forthe Plan Year.  In this regard, the rateof Employer contribution, if any, may vary among the participating Employers.

 

(c)                                  *Eligibility for AdditionalEmployer Matching Contributions**. *To be eligible for a share of additional Employermatching contributions made for a Plan Year under Section 4.2(b), aParticipant must (1) have been credited with at least one thousand (1,000)Hours of Service in the Plan Year, and (2) be employed by the Employer onthe last day of the Plan Year; provided, however, that if the Participant’sfailure to be credited with at least one thousand (1,000) Hours of Serviceand/or to be employed by the Employer on the last day of the Plan Year is dueto the Participant’s being on Disability, death or retirement on or after hisNormal Retirement Date during the Plan Year, such Participant shallnevertheless be entitled to share in the allocation of any additional matchingcontributions made for such Plan Year.

 

**4.3****                              ****ROLLOVERS AND TRANSFERS OF FUNDS FROMOTHER PLANS. **With the approval of the Administrator,there may be paid to the Trustee amounts which have been held under thefollowing types of plans:

 

(1)                                  a qualified plan described inSection 401(a) or 403(a) of the Code, excluding after-taxemployee contributions and excluding designated Roth contributions underSection 402A of the Code;

 

(2)                                  an annuity contract described inSection 403(b) of the Code, excluding after-tax employeecontributions and excluding designated Roth contributions underSection 402A of the Code;

 

(3)                                  an eligible plan underSection 457(b) of the Code which is maintained by a state, politicalsubdivision of a state, or any agency or instrumentality of a state orpolitical subdivision of a state, excluding after-tax employee contributions;and

 

(4)                                  an individual retirement account whichwas used solely as a conduit from a qualified plan described inSection 401(a) of the Code.

 

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Any amounts so transferred on behalf of any Employeeshall be nonforfeitable and shall be maintained under a separate Plan account,to be paid in addition to amounts otherwise payable under this Plan.  The amount of any such account shall be equalto the fair market value of such account as adjusted for income, expenses, gains,losses, and withdrawals attributable thereto.

 

An Employee who would otherwise be eligible toparticipate in the Plan but for the failure to satisfy the service requirementfor participation as set forth under Section 3.1, shall be eligible tocomplete a rollover to the Plan.  Such anEmployee shall also be eligible to obtain a loan or withdrawal in accordancewith the provisions of Article Eight prior to satisfying such servicerequirement.

 

**4.4****                              ****TIMING OF CONTRIBUTIONS. **Employer contributions shall be made to the Plan no later than thetime prescribed by law for filing the Employer’s federal income tax return(including extensions) for its taxable year ending with or within the PlanYear.  Elective deferrals underSection 4.1 shall be paid to the Plan as soon as administrativelypossible, but no later than the fifteenth (15th) business day of the month following the monthin which such deferrals would have been payable to the Participant in cash, orsuch later date as permitted or prescribed by the Department of Labor.

 

**4.5****                              ****EMPLOYEE AFTER-TAXCONTRIBUTIONS. **No Employee after-tax contributions shall bepermitted after August 1, 2005.  AParticipant shall, at all times, have a nonforfeitable interest in the value ofthat portion of his Account attributable to any Employee after-taxcontributions previously made to the Plan. Such portion of a Participant’sAccount, if any, shall be distributed at the same time and in the same manneras other vested benefits are distributed under this Plan.

 

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**ARTICLE FIVE—ACCOUNTING RULES**

 

**5.1****                              ****INVESTMENT OF ACCOUNTS ANDACCOUNTING RULES**

 

(a)                                  *Investment Funds**. *The investment of Participants’ Accounts shall be made in a mannerconsistent with the provisions of the Trust. The Administrator, in its discretion, may allow the Trust to provide forseparate funds for the directed investment of each Participant’s Account,including a Company Stock fund.  Inconnection therewith, it is hereby provided that more than ten percent (10%) ofthe fair market value of the Plan’s assets may be invested in the Company Stockfund.  It is also hereby provided that aportion of the Company Stock fund shall be invested in cash and cashequivalents for liquidity purposes.

 

(b)                                 *Participant Direction ofInvestments**. *In the event Participants’ Accounts are subjectto their investment direction, each Participant (including, for this purpose,any former Employee, Beneficiary, or “alternate payee” (within the meaning ofSection 14.4 below) with an Account balance) may direct how his Account(or such portion thereof which is subject to his investment direction) is to beinvested among the available investment funds in the percentage multiplesestablished by the Administrator.  In theevent a Participant fails to make an investment election, with respect to allor any portion of his Account subject to his investment direction, the Trusteeshall invest all or such portion of his Account in the investment fund to bedesignated by the Administrator.  AParticipant may change his investment election, with respect to futurecontributions and, if applicable, forfeitures, and/or amounts previouslyaccumulated in the Participant’s Account in accordance with proceduresestablished by the Administrator.  Anysuch change in a Participant’s investment election shall be effective at suchtime as may be prescribed by the Administrator. However, where it deems appropriate, and subject to the requirements ofapplicable law, the Administrator may decline to implement, or otherwise limitthe frequency by which a Participant may direct the investment of hisAccount.  If the Plan’s recordkeeper orinvestments are changed, the Administrator may apply such administrativerules and procedures as are necessary to provide for the transfer ofrecords and/or assets, including without limitation, the suspension ofParticipant’s investment directions, withdrawals and distributions for suchperiod of time as is necessary, and the transfer of Participants’ Accounts todesignated funds or an interest bearing account until such change has beencompleted.

 

Notwithstanding the foregoing, if, pursuant toSection 4.02 of the Trust, an investment manager (within the meaning ofSection 3(38) of the Employee Retirement Income Security Act of 1974, asamended (“ERISA”)) is appointed by a named fiduciary pursuant toSection 402(c)(3) of ERISA, a Participant may elect to have suchinvestment manager direct the investment of his Account in accordance with theprovisions of the preceding paragraph.

 

(c)                                  *Allocation of InvestmentExperience**. *As of each Valuation Date, the investmentfund(s) of the Trust shall be valued at fair market value, and the income,loss, appreciation and depreciation (realized and unrealized), and any paidexpenses of the Trust attributable to 

 

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such fund shall beapportioned among Participants’ Accounts within the fund based upon the valueof each Account within the fund as of the preceding Valuation Date.

 

(d)                                 *Allocation of Contributions**. *Employer contributions shall be allocated to the Account of eacheligible Participant as of the last day of the period for which thecontributions are made, or as soon as administratively possiblethereafter.  Forfeitures which arise in aPlan Year shall be allocated as of the last day of such Plan Year, or as soonas administratively possible thereafter.

 

(e)                                  *Manner and Time of DebitingDistributions**. *For any Participant who is entitled to receivea distribution from his Account, such distribution shall be made in accordancewith the provisions of Section 7.1 and Section 7.2.  The amount distributed shall be based uponthe fair market value of the Participant’s vested Account as of the Valuation Datepreceding the distribution.

 

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**ARTICLE SIX—VESTING AND RETIREMENT BENEFITS**

 

**6.1****                              ****VESTING. **A Participant shall at all times have a nonforfeitable (vested)right to his Account derived from elective deferrals (within the meaning ofSection 4.1), after-tax contributions previously made to the Plan,Employer Fail-Safe Contributions, “Qualified Matching Contributions” (withinthe meaning of Section 10.2 below), and rollovers or transfers from otherplans, as adjusted for investment experience. Except as otherwise provided with respect to Normal Retirement,Disability, or death, a Participant shall have a nonforfeitable (vested) rightto a percentage of the value of his Account derived from Employer matchingcontributions under Section 4.2 as follows:

 
| **Years  of Service**     | ** ** | **Vested Percentage** | ** ** |
|---------------------------|------------|-----------------------|------------|
|                      |       |                  |       |
| *Less than 1 year*        | * *   | *0*                   | *%*        |
| *1 year but less than 2*  | * *   | *20*                  | *%*        |
| *2 years but less than 3* | * *   | *30*                  | *%*        |
| *3 years but less than 4* | * *   | *40*                  | *%*        |
| *4 years but less than 5* | * *   | *60*                  | *%*        |
| *5 years but less than 6* | * *   | *80*                  | *%*        |
| *6 years and thereafter*  | * *   | *100*                 | *%*        |

 

 

**6.2****                              ****FORFEITURE OF NONVESTEDBALANCE. **The nonvested portion of a Participant’s Account, as determined inaccordance with Section 6.1, shall be forfeited as of the earlier of(i) as soon as administratively practical following the date on which theParticipant receives distribution of his vested Account or (ii) as soon asadministratively practical after the last day of the Plan Year in which theParticipant incurs five (5) consecutive Breaks in Service.  However, no forfeiture shall occur solely asa result of a Participant’s withdrawal of Employee after-taxcontributions.  The amount forfeitedshall be used to pay Plan administrative expenses, used to reduce Employercontributions under Section 4.2, or used to restore previously forfeitedamounts under this Section 6.2.

 

If the Participantreturns to the employment of the Employer prior to incurring five(5) consecutive Breaks in Service, and prior to receiving distribution ofhis vested Account, the nonvested portion shall remain in the Participant’sAccount.  However, if the nonvestedportion of the Participant’s Account was allocated as a forfeiture as theresult of the Participant receiving distribution of his vested Account balance(including a “deemed” distribution under Section 7.2), the nonvestedportion shall be restored if:

 

(a)                                  the Participant resumes employment priorto incurring five (5) consecutive Breaks in Service; and

 

(b)                                 the Participant repays to the Plan, as ofthe earlier of (i) the date which is five (5) years after hisreemployment date or (ii) the date which is the last day of the period inwhich the Participant incurs five (5) consecutive Breaks in Service, anamount equal to the total distribution derived from Employer contributionsunder Section 4.2 and, if applicable, Section 13.3.

 

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Upon repayment, the Employer-derived benefit requiredto be restored by this Section shall not be less than in the accountbalance of the Employee, both the amount distributed and the amount forfeited,unadjusted by any subsequent gains or losses. The amount required to be restored shall be made by a special Employercontribution or from the next succeeding Employer contribution and forfeitures,as appropriate.

 

Any Years ofService for which a Participant received a cash-out shall be recognized forpurposes of vesting and eligibility under the Plan.

 

**6.3****                              ****DISTRIBUTION OF LESS THANENTIRE VESTED ACCOUNT BALANCE. **If a distribution (including a withdrawal) ofany portion of a Participant’s Account is made to the Participant at a timewhen he has a vested percentage in such Account equal to less than one-hundredpercent (100%), a separate record shall be maintained of said Accountbalance.  The Participant’s vestedinterest at any time in this separate account shall be an amount equal to theformula *P(AB+D)-D,*where *P* is the vested percentage at the relevanttime, *AB* is the Account balanceat the relevant time, and *D* isthe amount of the distribution (or withdrawal) made to the Participant.

 

**6.4****                              ****NORMAL RETIREMENT. **A Participant who is in the employment of the Employer at his NormalRetirement Age shall have a nonforfeitable interest in one hundred percent(100%) of his Account, if not otherwise one hundred percent (100%) vested underthe vesting schedule in Section 6.1. A Participant who continues employment with the Employer after hisNormal Retirement Age shall continue to participate under the Plan.

 

**6.5****                              ****DISABILITY. **If a Participant incurs a Disability, the Participant shall have anonforfeitable interest in one hundred percent (100%) of his Account, if nototherwise one hundred percent (100%) vested under the vesting schedule inSection 6.1.  Payment of suchParticipant’s Account balance shall be made at the time and in the mannerspecified in Article Seven, following receipt by the Administrator of theParticipant’s written distribution request.

 

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**ARTICLESEVEN—MANNER AND TIME OF DISTRIBUTING BENEFITS**

 

**7.1****                              ****MANNER OF PAYMENT. **The Participant’s vested Account shall be distributedto the Participant (or to the Participant’s Beneficiary in the event of theParticipant’s death) in a single lump-sum payment.  However, any portion of the Participant’sAccount invested in the Company Stock fund (as described inSection 5.1(a)) may, at the election of the Participant or, as the casemay be, the Participant’s Beneficiary, be distributed in the form of CompanyStock, provided, however, that any fractional shares, and the cash and cashequivalent portions of such fund, shall be distributed in cash.

 

**7.2**                               **TIME OF COMMENCEMENT OFBENEFIT PAYMENTS. **Subject to the following provisions ofthis Section, unless the Participant elects otherwise, distribution of theParticipant’s vested Account shall normally be made or commence no later thanthe sixtieth (60) day after the later of the close of the Plan Year inwhich:  (a) the Participant attainsage sixty-five (65) (or Normal Retirement Date, if earlier), (b) occursthe tenth (10th) anniversary of the year in which theParticipant commenced participation in the Plan, or (c) the Participantsevers employment with the Employer. Distribution shall not be made to a Participant without his consent (andspouse’s consent, if required) if his vested Account exceeds $5,000 and suchAccount is immediately distributable (within the meaning ofSection 1.411(a)-11(c)(4) of the IRS Regulations).

 

Notwithstanding the foregoing, upon theAdministrator’s actual knowledge of a pending divorce or divorce proceeding, orthe issuance (or possible issuance) of a domestic relations order regarding aParticipant’s Account, such Account shall be frozen to prevent the Participantfrom taking withdrawals, loans or distributions against the portion of theAccount, subject to, or potentially subject to, the domestic relationsorder.  This freeze shall be removedpromptly following the qualification of the domestic relations order inaccordance with the Plan’s procedures or at such earlier time as theAdministrator may reasonably determine.

 

Notwithstanding the foregoing, if the Participant’svested Account does not exceed $5,000, the Participant’s entire vested Accountshall be normally distributed to the Participant (or, in the event of theParticipant’s death, his Beneficiary) in a lump-sum payment as soon asadministratively practicable following the date the Participant retires, diesor otherwise terminates from employment. However, in the event of a mandatory distribution to a Participant whosevested Account is greater than $1,000, if the Participant does not elect tohave such automatic distribution paid directly to an eligible retirement planspecified by the Participant in a direct rollover or to receive thedistribution directly in accordance with Section 7.1, then the PlanAdministrator shall pay the distribution in a direct rollover to an individualretirement plan designated by the Plan Administrator.

 

A Participant who is not vested in any portion of hisAccount shall be deemed to have received distribution of such portion of hisAccount as of the end of the Plan Year following the Plan Year in which heterminates from employment.

 

In no event shall distribution of the Participant’svested Account be made or commence later than the April 1st following theend of the calendar year in which the Participant attains age seventy 

 

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and one-half (701⁄2), or, except for a Participant whois a five percent (5%) owner of the Employer (within the meaning ofSection 401(a)(9)(C) of the Code), if later, the April 1stfollowing the calendar year in which the Participant retires from employmentwith the Employer (the “required beginning date”).

 

Notwithstandingthe foregoing, the provisions of this paragraph shall be subject to any priorelection complying with the provisions of Section 242(b) of TEFRA.

 

Notwithstanding the provisions of Section 7.1, inthe event distribution is required to be made while the Participant is employedby the Employer, the Participant may elect to receive the minimum amountrequired to be distributed pursuant to the provisions ofSection 401(a)(9) of the Code and the regulations thereunder.

 

**7.3****                              ****FURNISHING INFORMATION. **Prior to the payment of any benefit under the Plan, each Participantor Beneficiary may be required to complete such administrative forms andfurnish such proof as may be deemed necessary or appropriate by the Employer,Administrator, and/or Trustee.

 

**7.4****                              ****MINIMUM DISTRIBUTION REQUIREMENTS.**

** **

(a)**                                 *****GeneralRules.***

 

(1)                                  Effective Date***.***  Theprovisions of this Article will apply for purposes of determining requiredminimum distributions.  Unless otherwisespecified, the provisions of this Article will apply to calendar yearsbeginning after December 31, 2002.

 

(2)                                  Precedence***.***  Therequirements of this Article will take precedence over any inconsistentprovisions of the Plan; provided, however, that this Article shall notrequire the Plan to provide any form of benefit, or any option, not otherwiseprovided under Section 7.1.

 

(3)                                  Requirements of Treasury RegulationsIncorporated***.***  All distributions requiredunder this Article will be determined and made in accordance with theTreasury regulations under Section 401(a)(9) of the Code and theminimum distribution incidental benefit requirement ofSection 401(a)(9)(G) of the Code.

 

(b)**                                *****Time andManner of Distribution***

 

(1)                                  Required Beginning Date***.***  TheParticipant’s entire interest will be distributed, or begin to be distributed,to the Participant no later than the Participant’s required beginning date.

 

(2)                                  Death of Participant Before DistributionsBegin***.***  If theParticipant dies before distributions begin, the Participant’s entire interestwill be distributed, or begin to be distributed, no later than as follows:

 

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(A)                              If the Participant’s surviving spouse is theParticipant’s sole designated Beneficiary, distributions to the survivingspouse will begin by December 31 of the calendar year immediatelyfollowing the calendar year in which the Participant died, or byDecember 31 of the calendar year in which the Participant would haveattained age 701⁄2, if later.

 

(B)                                If the Participant’s surviving spouse isnot the Participant’s sole designated Beneficiary, and if distribution is to bemade over the life or over a period certain not exceeding the life expectancyof the designated Beneficiary (if permitted under Section 7.1 of thePlan), distribution to the designated Beneficiary will begin byDecember 31 of the calendar year immediately following the calendar yearin which the Participant died.

 

(C)                                If there is no designated Beneficiary as ofSeptember 30 of the year following the year of the Participant’s death, orif the provisions of subsection (A) and (B) do not otherwise apply,the Participant’s entire interest will be distributed by December 31 ofthe calendar year containing the fifth anniversary of the Participant’s death.

 

(D)                               If the Participant’s surviving spouse is theParticipant’s sole designated Beneficiary and the surviving spouse dies afterthe Participant but before distributions to the surviving spouse begin, thisSection 7.4(b), other than Section 7.4(b)(2)(A), will apply as if thesurviving spouse were the Participant.

 

For purposes ofSections 7.4(b) and 7.4(d), unless Section 7.4(b)(2)(D) applies,distributions are considered to begin on the Participant’s required beginningdate.  IfSection 7.4(b)(2)(D) applies, distributions are considered to beginon the date distributions are required to begin to the surviving spouse underSection 7.4(b)(2)(A).  Ifdistributions under an annuity purchased from an insurance company irrevocablycommence to the Participant before the Participant’s required beginning date(or to the Participant’s surviving spouse before the date distributions arerequired to begin to the surviving spouse under Section 7.4(b)(2)(A)), thedate distributions are considered to begin is the date distributions actuallycommence.

 

(3)                                  Forms of Distribution.  Unlessthe Participant’s interest is distributed in the form of an annuity purchasedfrom an insurance company or in a single sum on or before the requiredbeginning date, as of the first distribution calendar year, distributions willbe made in accordance with Sections 7.4(c) and (d).  If the Participant’s interest is distributedin the form of an annuity purchased from an insurance company, distributionsthereunder will be made in accordance with the requirements ofSection 401(a)(9) of the Code and the Treasury regulations.

 

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(c)**                                 *****RequiredMinimum Distributions During Participant’s Lifetime.***

 

(1)                                  Amount of Required Minimum Distribution forEach Distribution Calendar Year.  During the Participant’s lifetime, theminimum amount that will be distributed for each distribution calendar year isthe lesser of:

 

(A)                              the quotient obtained by dividing theParticipant’s vested Account balance by the distribution period in the UniformLifetime Table set forth in Section 1.401(a)(9)-9, Q&A-2, of theTreasury regulations, using the Participant’s age as of the Participant’sbirthday in the distribution calendar year; or

 

(B)                                if the Participant’s sole designatedBeneficiary for the distribution calendar year is the Participant’s spouse, thequotient obtained by dividing the Participant’s vested Account balance by thenumber in the Joint and Last Survivor Table set forth inSection 1.401(a)(9)-9, Q&A-3, of the Treasury regulations, using theParticipant’s and spouse’s attained ages as of the Participant’s and spouse’sbirthdays in the distribution calendar year.

 

(2)                                  Lifetime Required Minimum DistributionsContinue Through Year of Participant’s Death.  Required minimumdistributions will be determined under this Section 7.4(c) beginningwith the first distribution calendar year and up to and including thedistribution calendar year that includes the Participant’s date of death.

 

(d)**                                *****RequiredMinimum Distributions After Participant’s Death.***

 

(1)                                  Death On or After Date Distributions Begin.

 

(A)                              *Participant Survived byDesignated Beneficiary*.  Subject to the provisions of this Article, ifthe Participant dies on or after the date distributions begin and there is adesignated Beneficiary, the minimum amount that will be distributed for eachdistribution calendar year after the year of the Participant’s death is thequotient obtained by dividing the Participant’s vested Account balance by thelonger of the remaining life expectancy of the Participant or the remaininglife expectancy of the Participant’s designated Beneficiary, determined asfollows:

 

(i)                                     The Participant’s remaining life expectancy iscalculated using the age of the Participant in the year of death, reduced byone for each subsequent year.

 

(ii)                                  If the Participant’s surviving spouse is theParticipant’s sole designated Beneficiary, the remaining life expectancy of thesurviving spouse is calculated for each distribution calendar year after theyear of the Participant’s death using the surviving spouse’s age as of the spouse’sbirthday in that year.  For distributioncalendar years after the year of the surviving spouse’s 

 

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death, theremaining life expectancy of the surviving spouse is calculated using the ageof the surviving spouse as of the spouse’s birthday in the calendar year of thespouse’s death, reduced by one for each subsequent calendar year.

 

(iii)          If the Participant’s surviving spouse is not the Participant’s soledesignated Beneficiary, the designated Beneficiary’s remaining life expectancyis calculated using the age of the Beneficiary in the year following the yearof the Participant’s death, reduced by one for each subsequent year.

 

(B)                                *No DesignatedBeneficiary*.  If the Participant dies on or after the datedistributions begin and there is no designated Beneficiary as ofSeptember 30 of the year after the year of the Participant’s death, theminimum amount that will be distributed for each distribution calendar yearafter the year of the Participant’s death is the quotient obtained by dividingthe Participant’s vested Account balance by the Participant’s remaining lifeexpectancy calculated using the age of the Participant in the year of death,reduced by one for each subsequent year.

 

(2)                                  Death Before Date Distributions Begin.

 

(A)                              *Participant Survived byDesignated Beneficiary*.  If the Participant dies before the datedistributions begin and there is a designated Beneficiary, the minimum amountthat will be distributed for each distribution calendar year after the year ofthe Participant’s death is the quotient obtained by dividing the Participant’svested Account balance by the remaining life expectancy of the Participant’sdesignated Beneficiary, determined as provided in Section 7.4(d)(1).

 

(B)                                *No DesignatedBeneficiary*.  If the Participant dies before the datedistributions begin and there is no designated Beneficiary as ofSeptember 30 of the year following the year of the Participant’s death,distribution of the Participant’s entire interest will be completed byDecember 31 of the calendar year containing the fifth anniversary of theParticipant’s death.

 

(C)                                *Death of Surviving SpouseBefore Distributions to Surviving Spouse Are Required to Begin*.  If theParticipant dies before the date distributions begin, the Participant’ssurviving spouse is the Participant’s sole designated Beneficiary, and thesurviving spouse dies before distributions are required to begin to thesurviving spouse under Section 7.4(b)(2)(A), thisSection 7.4(d) will apply as if the surviving spouse were theParticipant.

 

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(e)**                                 *****Definitions.***

 

(1)                                  Designated Beneficiary.  Theindividual who is designated as the Beneficiary under Section 7.6 of thePlan and is the designated Beneficiary under Section 401(a)(9) of theCode and Section 1.401(a)(9)-4, of the Treasury regulations.

 

(2)                                  Distribution Calendar Year.  Acalendar year for which a minimum distribution is required.  For distributions beginning before theParticipant’s death, the first distribution calendar year is the calendar yearimmediately preceding the calendar year which contains the Participant’srequired beginning date.  Fordistributions beginning after the Participant’s death, the first distributioncalendar year is the calendar year in which distributions are required to beginunder Section 7.4(b)(2).  Therequired minimum distribution for the Participant’s first distribution calendaryear will be made on or before the Participant’s required beginning date.  The required minimum distribution for otherdistribution calendar years, including the required minimum distribution forthe distribution calendar year in which the Participant’s required beginningdate occurs, will be made on or before December 31 of that distributioncalendar year.

 

(3)                                  Life Expectancy. Life expectancy as computed by use of the Single Life Table inSection 1.401(a)(9)-9, Q&A-1, of the Treasury regulations.

 

(4)                                  Participant’s Vested Account Balance.  Thevested Account balance as of the last valuation date in the calendar yearimmediately preceding the distribution calendar year (valuation calendar year)increased by the amount of any contributions made and allocated or forfeituresallocated to the vested Account balance as of dates in the valuation calendaryear after the valuation date and decreased by distributions made in thevaluation calendar year after the valuation date.  The vested Account balance for the valuationcalendar year includes any amounts rolled over or transferred to the Plan eitherin the valuation calendar year or in the distribution calendar year ifdistributed or transferred in the valuation calendar year.

 

(5)                                  Required Beginning Date.  Thedate specified in Section 7.2 of the Plan.

 

(f)                                    ***TEFRASection 242(b)(2) Elections.***

 

(1)                                  Notwithstanding the other requirements of thisArticle, distribution on behalf of any Employee, including a 5-percent owner,who has made a designation under Section 242(b) of the Tax Equity andFiscal Responsibility Act (a “Section 242(b)(2) Election”) may bemade in accordance with all of the following requirements (regardless of whensuch distribution commences):

 

(A)                              The distribution by the Plan is one which wouldnot have disqualified such Plan under Section 401(a)(9) of the Codeas in effect prior to amendment by the Deficit Reduction Act of 1984.

 

(B)                                The distribution is in accordance with a methodof distribution designated by the Employee whose interest in the Plan is beingdistributed or, if the Employee is deceased, by a Beneficiary of such Employee.

 

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(C)                                Such designation was in writing, was signed bythe Employee or the Beneficiary, and was made before January 1, 1984.

 

(D)                               The Employee had accrued a benefit under thePlan as of December 31, 1983.

 

(E)                                 The method of distribution designated by theEmployee or the Beneficiary specifies the time at which distribution willcommence, the period over which distributions will be made, and in the case ofany distribution upon the Employee’s death, the Beneficiaries of the Employeelisted in order of priority.

 

(2)                                  A distribution upon death will not be coveredby this transitional rule unless the information in the designationcontains the required information described above with respect to distributionsto be made upon the death of the Employee.

(3)                                  For any distribution which commences beforeJanuary 1, 1984, but continues after December 31, 1983, the Employee,or the Beneficiary, to whom such distribution is being made, will be presumedto have designated the method of distribution under which the distribution isbeing made if the method of distribution was specified in writing and thedistribution satisfied the requirements in subsections (A) and(E) above.

 

(4)                                  If a designation is revoked, any subsequent distributionmust satisfy the requirements of Section 401(a)(9) of the Code andthe regulations thereunder.  If adesignation is revoked subsequent to the date distributions are required tobegin, the Plan must distribute by the end of the calendar year following thecalendar year in which the revocation occurs the total amount not yetdistributed which would have been required to have been distributed to satisfySection 401(a)(9) of the Code and the regulations thereunder, but forthe Section 242(b)(2) Election. For calendar years beginning after December 31, 1988, suchdistributions must meet the minimum distribution incidental benefitrequirements.  Any changes in the designationwill be considered to be a revocation of the designation.  However, the mere substitution or addition ofanother Beneficiary (one not named in the designation) under the designationwill not be considered to be a revocation of the designation, so long as suchsubstitution or addition does not alter the period over which distributions areto be made under the designation, directly or indirectly (for example, byaltering the relevant measuring life).

 

(5)                                  In the case in which an amount is transferredor rolled over from one plan to another plan, the rules inSection 1.401(a)(9)-8, Q&A-14 and 15, of the Treasury regulationsshall apply.

 

**7.5****                              ****AMOUNT OF DEATH BENEFIT**

 

(a)                                  *Death Before Termination ofEmployment**. *In the event of the death of a Participantwhile in the employ of the Employer, vesting in the Participant’s Account shallbe one 

 

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hundred percent(100%), if not otherwise one hundred percent (100%) vested underSection 6.1, with the credit balance of the Participant’s Account beingpayable to his Beneficiary.

 

(b)                                 *Death After Termination ofEmployment**. *In the event of the death of a formerParticipant after termination of employment, but prior to the completedistribution of his vested Account balance under the Plan, the undistributedvested balance of the Participant’s Account shall be paid to the Participant’sBeneficiary.

 

**7.6****                              ****DESIGNATION OFBENEFICIARY. **Each Participant shall designate a Beneficiaryin a manner acceptable to the Administrator to receive payment of any deathbenefit payable hereunder if such Beneficiary should survive theParticipant.  However, no Participant whois married shall be permitted to designate a Beneficiary other than his spouseunless the Participant’s spouse has signed a written consent witnessed by a Planrepresentative or a notary public, which provides for the designation of analternate Beneficiary.

 

Subject to the above, Beneficiary designations mayinclude primary and contingent Beneficiaries, and may be revoked or amended atany time in similar manner or form, and the most recent designation shallgovern.  A designation of a Beneficiarymade by a Participant shall cease to be effective upon his marriage orremarriage.  In addition, a spousalBeneficiary designation shall cease to be effective upon written notificationto the Administrator ofthe divorce of the Participant and suchspouse.  In the absence of an effectivedesignation of Beneficiary, or if no designated Beneficiary is surviving as ofthe date of the Participant’s death, any death benefit shall be paid to thesurviving spouse of the Participant, or, if no surviving spouse, to theParticipant’s surviving issue, by right of representation or, if none, to theParticipant’s estate.  Notification toParticipants of the death benefits under the Plan and the method of designatinga Beneficiary shall be given at the time and in the manner provided byregulations and rulings under the Code.

 

In the event a Beneficiary survives the Participant,but dies before receipt of all payments due that Beneficiary hereunder, anybenefits remaining to be paid to the Beneficiary shall be paid to theBeneficiary’s estate.

 

**7.7****                              ****DISTRIBUTION OF DEATHBENEFITS. **Subject to the provisions of Section 7.2,the Beneficiary shall be allowed to designate the mode of receiving benefits inaccordance with Section 7.1, unless the Participant had designated amethod in writing and indicated that the method was not revocable by theBeneficiary.

 

(a)                                  *Distribution Beginning BeforeDeath* - If theParticipant dies after distribution of his vested Account has commenced, anysurvivor’s benefit must be paid at least as rapidly as under the method ofpayment in effect at the time of the Participant’s death.

 

(b)                                 *Distribution Beginning AfterDeath**-*Ifthe Participant dies before distribution of his vested Account has commenced,distribution of the Participant’s vested Account shall be completed byDecember 31 of the calendar year containing the fifth anniversary of theParticipant’s death, except as provided below:

 

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(i)                                     if any portion of the Participant’svested Account is payable to a designated Beneficiary, and if distribution isto be made over the life or over a period certain not greater than the lifeexpectancy of the designated Beneficiary (if permitted under Section 7.1above) such payments shall commence on or before December 31 of the calendaryear immediately following the calendar year in which the Participant died;

 

(ii)                                  if the designated Beneficiary is theParticipant’s surviving spouse, the date distribution is required to beginshall not be earlier than the later of (A) December 31 of thecalendar year immediately following the calendar year in which the Participantdied and (B) December 31 of the calendar year in which theParticipant would have attained age seventy and one-half (701⁄2).

 

For purposes ofthis paragraph (b), if the surviving spouse dies after the Participant, butbefore payments to such spouse begin, the provisions of this paragraph, withthe exception of paragraph (ii) herein, shall be applied as if thesurviving spouse were the Participant.

 

Notwithstandingthe foregoing, if the Participant has no designated Beneficiary (within themeaning of Section 401(a)(9) of the Code and the regulationsthereunder), distribution of the Participant’s vested Account must be completedby December 31 of the calendar year containing the fifth anniversary ofthe Participant’s death.

 

Nothing within this Section shall, however,invalidate any Participant’s previous designation of a mode of paying deathbenefits, provided such designation was made prior to January 1, 1984 andwas in accordance with all requirements announced by the Internal RevenueService with respect to the transitional rule established underSection 242(b) of TEFRA.  Nomodification of the mode set out in any such election shall be allowed,however, unless it is in compliance with this Section 7.7.

 

**7.8****                              ****ELIGIBLE ROLLOVERDISTRIBUTIONS. **Notwithstanding the foregoing provisions ofthis Article Seven, the provisions of this Section 7.8 shall apply todistributions made under the Plan after December 31, 2001.

 

(a)                                  A “distributee” (as hereinafter defined)may elect, at the time and in the manner prescribed by the Administrator, tohave any portion of an “eligible rollover distribution” (as hereinafter defined)paid directly to an eligible retirement plan specified by the distributee in adirect rollover.

 

(b)                                 Definitions:

 

(i)                                     *Eligible RolloverDistribution*.  An eligible rollover distribution is anydistribution of all or any portion of the balance to the credit of thedistributee, except that an eligible rollover distribution does notinclude:  any distribution that is one ofa series of substantially equal periodic payments (not less frequently thanannually) made for the life (or life expectancy) of the distributee or thejoint lives (or joint 

 

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life expectancies) of the distributee and thedistributee’s designated Beneficiary, or for a specified period of ten(10) years or more; any distribution to the extent such distribution isrequired under Section 401(a)(9) of the Code; and any hardshipdistribution described in Section 8.2. A portion of a distribution shall not fail to be an eligible rollover distributionmerely because the portion consists of after-tax employee contributions whichare not includible in gross income. However, such portion may be transferred only to an individualretirement account or annuity described in Section 408(a) or(b) of the Code (or described in Section 408A of the Code for“designated Roth contributions” (within the meaning of Section 402A of theCode)), or to a qualified defined contribution plan described inSection 401(a) or 403(a) of the Code that agrees to separatelyaccount for amounts so transferred, including separately accounting for theportion of such distribution which is includible in gross income and theportion of such distribution which is not so includible and, if applicable, asrequired under Section 402A of the Code.

 

(ii)                                  *Eligible RetirementPlan*.  An eligible retirement plan is an individualretirement account described in Section 408(a) of the Code, anindividual retirement annuity described in Section 408(b) of theCode, an annuity plan described in Section 403(a) of the Code, aqualified trust described in Section 401(a) of the Code, an annuitycontract described in Section 403(b) of the Code and an eligible planunder Section 457(b) of the Code which is maintained by a state,political subdivision of a state, or any agency or instrumentality of a stateor political subdivision of a state and which agrees to separately account foramounts transferred into such plan from this Plan, that accepts thedistributee’s eligible rollover distribution. The definition of eligible retirement plan shall also apply in the caseof a distribution to a surviving spouse, or to a spouse or former spouse who isthe alternate payee under a qualified domestic relations order, as defined inSection 414(p) of the Code.

 

If any portion of an eligible rollover distribution isattributable to payments or distributions from a designated Roth account, aneligible retirement plan with respect to such portion shall include onlyanother designated Roth account of the individual from whose account thepayments or distributions were made, or a Roth IRA of such individual.

 

(iii)                               *Distributee*.  Adistributee includes an Employee or former Employee.  In addition, the Employee’s or formerEmployee’s surviving spouse, and the Employee’s or former Employee’s spouse orformer spouse who is an alternate payee under a qualified domestic relationsorder, as defined in Section 414(p) of the Code, are distributeeswith regard to the interest of the spouse or former spouse.

 

(iv)                              *Direct Rollover*.  Adirect rollover is a payment by the Plan to the eligible retirement planspecified by the distributee.

 

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(c)                                  If a distribution is one to whichSections 401(a)(11) and 417 of the Code do not apply, such distribution maycommence less than thirty (30) days after the notice required underSection 1.411(a)-11(c) of the Income Tax Regulations is given,provided that:

 

(i)                                     the Administrator clearly informs theParticipant that the Participant has a right to a period of at least thirty(30) days after receiving the notice to consider the decision of whether or notto elect a distribution (and, if applicable, a particular distribution option),and

 

(ii)                                  the Participant, after receiving thenotice, affirmatively elects a distribution.

 

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**ARTICLE EIGHT—LOANS AND IN-SERVICE WITHDRAWALS**

 

**8.1****         ****LOANS**

 

(a)           *Permissible Amount and Procedures**. *Upon the application of a Participant, theAdministrator may, in accordance with a uniform and nondiscriminatory policy,direct the Trustee to grant a loan to the Participant, which loan shall besecured by the Participant’s vested Account balance.  The Participant’s signature shall be requiredon a promissory note.  The rate of intereston any such loan shall be equal to the “Prime Rate” (as reported in *The Wall Street Journal* on the date theloan is initiated) plus one percent (1%). Participant loans shall be treated as segregated investments, andinterest repayments shall be credited only to the Participant’s Account.

 

(b)           *Limitation on Amount of Loans**. *A Participant’s loan shall not exceed the lesser of:

 

(1)           $50,000, which amount shall be reduced bythe highest outstanding loan balance during the preceding twelve (12)-monthperiod; or

 

(2)           one-half (1⁄2) of the vested value of theParticipant’s Account, determined as of the Valuation Date preceding the dateof the Participant’s loan.

 

Any loan must be repaidwithin five (5) years (or such longer period permitted by law), unlessmade for the purpose of acquiring the primary residence of the Participant, inwhich case such loan may be repaid over a longer period of time not to exceedfifteen (15) years.  The repayment of anyloan must be made in at least quarterly installments of principal and interest;provided, however, that this requirement shall not apply for a period, notlonger than one year, or such longer period as may apply underSection 414(u) of the Code, that a Participant is on a leave ofabsence (“Leave”), either without pay from the Employer or at a rate of pay(after income and employment tax withholding) that is less than the amount ofthe installment payments required under the terms of the loan.  However, the loan must be repaid by thelatest date permitted under Sections 72(p)(2)(B) and 414(u) of theCode and the installments due after the Leave ends (or, unlessSection 414(u) of the Code applies, if earlier, upon the expirationof the first year of the Leave) must not be less than those required under theterms of the original loan.

 

Ifa Participant defaults on any outstanding loan, the unpaid balance, and anyinterest due thereon, shall become due and payable in accordance with the termsof the underlying promissory note; provided, however, that such foreclosure onthe promissory note and attachment of security shall not occur until a distributableevent occurs in accordance with the provisions of Article Seven.

 

If a Participantterminates employment while any loan balance is outstanding, the unpaidbalance, and any interest due thereon, shall become due and payable inaccordance with the terms of the underlying promissory note.  If such amount is not paid to the Plan, itshall be charged against the amounts that are otherwise payable to theParticipant or the Participant’s Beneficiary under the provisions of the Plan.

 

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In the case of aParticipant who has loans outstanding from other plans of the Employer (or amember of the Employer’s related group (within the meaning ofSection 2.5(b)), the Administrator shall be responsible for reporting tothe Trustee the existence of said loans in order to aggregate all such loanswithin the limits of Section 72(p) of the Code.

 

**8.2****         ****HARDSHIP DISTRIBUTIONS. **In the case of a financial hardship resulting from a provenimmediate and heavy financial need, a Participant may receive a distributionnot to exceed the lesser of (i) the vested value of the Participant’sAccount, without regard to earnings received on elective deferrals (within themeaning of Section 4.1), and without regard to any Fail-Safe Contributionsor Qualified Matching Contributions (within the meaning of Section 10.2below), or (ii) the amount necessary to satisfy the financialhardship.  The amount of any suchimmediate and heavy financial need may include any amounts necessary to payFederal, state or local income taxes reasonably anticipated to result from thedistribution.  Such distribution shall bemade in accordance with nondiscriminatory and objective standards andprocedures consistently applied by the Administrator.  In this regard, any such withdrawal shallfirst be made from any after-tax contributions, then from any rollovercontributions, then from any Employer contributions made pursuant toSection 4.2, and then from elective deferrals.

 

Hardship distributions under this Section shallbe deemed to be the result of an immediate and heavy financial need if suchdistribution is to: (a) pay expenses for (or to obtain) medical care thatwould be deductible under Section 213(d) of the Code determinedwithout regard to whether the expenses exceed seven and one-half percent (7.5%)of adjusted gross income; (b) purchase the principal residence of theParticipant (excluding mortgage payments); (c) pay tuition and relatededucational fees for the next twelve (12) months of post-secondary educationfor the Participant, Participant’s spouse, or any of the Participant’sdependents (as defined in Section 152 of the Code, and without regard toSection 152(b)(1), (b)(2) and (d)(1)(B) of the Code);(d) prevent the eviction of the Participant from his principal residenceor foreclosure on the Participant’s principal residence; (e) pay funeralor burial expenses for the Participant’s deceased parent, spouse, children ordependents (as defined in Section 152 of the Code, and without regard toSection 152(d)(1)(B) of the Code); or (f) repair damage to theParticipant’s principal residence that would qualify for a casualty lossdeduction under Section 165 of the Code (determined without regard towhether the loss exceeds ten percent (10%) of adjusted gross income).  Distributions paid pursuant to thisSection shall be deemed to be made as of the Valuation Date immediatelypreceding the hardship distribution, and the Participant’s Account shall bereduced accordingly.

 

Adistribution shall not be treated as necessary to satisfy an immediate andheavy financial need of a Participant to the extent the amount of thedistribution is in excess of the amount required to relieve the financial needor to the extent the need may be satisfied from other resources that arereasonably available to the Participant. This determination shall generally be made on the basis of all relevantfacts and circumstances.  For purposes ofthis paragraph, the Participant’s resources shall be deemed to include thoseassets of the Participant’s spouse and minor children that are reasonablyavailable to the Participant.  Adistribution generally shall be treated as necessary to satisfy a financialneed if the Administrator relies upon the Participant’s written representation,unless the Administrator has actual knowledge to the contrary, that the needcannot reasonably be relieved:

 

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(1)           Throughreimbursement or compensation by insurance or otherwise;

 

(2)           Byliquidation of the Participant’s assets;

 

(3)           Bycessation of elective deferrals (within the meaning of Section 4.1) andany after-tax contributions under Section 4.5; or

 

(4)           By other distributions or nontaxable (at the time ofthe loan) loans from plans maintained by the Employer or by any other employer,or by borrowing from commercial sources on reasonable commercial terms, in anamount sufficient to satisfy the need.

 

For purposes of theforegoing paragraph, a need cannot reasonably be relieved by one of the actionslisted above if the effect would be to increase the amount of the need.  In making such determination, theAdministrator may rely upon the Participant’s written representation to sucheffect, unless the Administrator has actual knowledge to the contrary.

 

**8.3****         ****WITHDRAWALS AFTER AGE 591⁄2. **After attaining age fifty-nine and one-half (591⁄2), aParticipant may withdraw from the Plan a sum (a) not in excess of thecredit balance of his vested Account and (b) not less than such minimumamount as the Administrator may establish from time to time to facilitateadministration of the Plan.  Any suchwithdrawals shall be made in accordance with nondiscriminatory and objectivestandards and procedures consistently applied by the Administrator.

 

**8.4****         ****WITHDRAWALS OF AFTER-TAX CONTRIBUTIONS. **A Participant may withdraw from the Plan a sum (a) not inexcess of the credit balance of the Participant’s Account attributable to anyafter-tax contributions previously made to the Plan and (b) not less thansuch minimum amount as the Administrator may establish from time to time tofacilitate administration of the Plan. Any such withdrawals shall be made in accordance with nondiscriminatoryand objective standards and procedures consistently applied by theAdministrator.

 

**8.5****         ****WITHDRAWALS OF ROLLOVER CONTRIBUTIONS. **A Participant may withdraw from the Plan a sum (a) not inexcess of the credit balance of the Participant’s Account attributable to anyrollover contributions made to the Plan and (b) not less than such minimumamount as the Administrator may establish from time to time to facilitateadministration of the Plan.  Any suchwithdrawals shall be made in accordance with nondiscriminatory and objectivestandards and procedures consistently applied by the Administrator.

 

**8.6**          **WITHDRAWALS OF EMPLOYER CONTRIBUTIONS FOR OTHERFINANCIAL NEEDS: FOR FORMER WILLIAMS FURNACE PLAN PARTICIPANTS.**  Theprovisions of this Section 8.6 shall apply only to a Participant who has aportion of his Account transferred from the Williams Furnace Co. EmployeesProfit Sharing Retirement Plan (the “Williams Furnace Plan”).  Where funds are needed to complete a majorrenovation to such Participant’s principal residence, or in the event of anyother bona fide financial emergency from time to time established by the Administrator,the Participant may receive a distribution not to exceed the 

 

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lesserof (i) the vested value of the Participant’s Account derived from anyEmployer contributions transferred from the Williams Furnace Plan and anyEmployer contributions made under Section 4.2, determined as of theValuation Date immediately preceding such withdrawal request, or (ii) theamount necessary to satisfy such financial need.  The amount of such financial need may, however,include any amounts necessary to pay Federal, state or local income taxes orpenalties reasonably anticipated to result formthe distribution.  Such distribution shall be made in accordancewith non-discretionary and objective standards consistently applied by theAdministrator.

 

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**ARTICLENINE —ADMINISTRATION OF THE PLAN**

 

**9.1****         ****PLAN ADMINISTRATION. **The Employer shall be the Plan Administrator, hereinbefore andhereinafter called the Administrator, and a “named fiduciary” (for purposes ofSection 402(a)(1) of the Employee Retirement Income Security Act of1974, as amended from time to time (“ERISA”)) of the Plan, unless the Employer,by action of its board of directors, shall designate a person or committee ofpersons to be the Administrator.  TheEmployer, by action of its board or directors, may also designate a person, acommittee of persons, and/or other entity as a named fiduciary or namedfiduciaries.  The administration of thePlan, as provided herein, including a determination of the payment of benefitsto Participants and their Beneficiaries, shall be the responsibility of theAdministrator; provided, however, that the Administrator may delegate any ofits powers, authority, duties or responsibilities to any person or committee ofpersons, such delegation to be in accordance with ERISA Section 405.  The Administrator shall have full discretionto interpret the terms of the Plan, to determine factual questions that arisein the course of administering the Plan, to adopt rules and regulationsregarding the administration of the Plan, to determine the conditions underwhich benefits become payable under the Plan, and to make any otherdeterminations that the Administrator believes are necessary and advisable forthe administration of the Plan.  Anydetermination made by the Administrator shall be final and binding on allparties, and shall be given the maximum deference allowed by law.

 

In the event more thanone party shall act as Administrator, all actions shall be made by majoritydecisions.  In the administration of thePlan, the Administrator may (a) employ agents to carry out nonfiduciaryresponsibilities (other than Trustee responsibilities), (b) consult withcounsel, who may be counsel to the Employer, and (c) provide for theallocation of fiduciary responsibilities (other than Trustee responsibilities)among its members.  Actions dealing withfiduciary responsibilities shall be taken in writing and the performance ofagents, counsel and fiduciaries to whom fiduciary responsibilities have beendelegated shall be reviewed periodically.

 

The expenses ofadministering the Plan and the compensation of all employees, agents, orcounsel of the Administrator, including accounting fees, recordkeeper’s fees, andthe fees of any benefit consulting firm, shall be paid by the Plan, or shall bepaid by the Employer if, and to the extent, the Employer so elects.  To the extent required by applicable law,compensation may not be paid by the Plan to full-time Employees of theEmployer.

 

In the event the Employerpays the expenses of administering the Plan, the Employer may seekreimbursement from the Plan for the payment of such expenses.  Reimbursement shall be permitted only forPlan expenses paid by the Employer within the last twelve (12)-month period.

 

The Administrator shallobtain from the Trustee, not less often than annually, a report with respect tothe value of the assets held in the Trust Fund, in such form as may be requiredby the Administrator.

 

The Administrator shalladminister the Plan and adopt such rules and regulations as, in theopinion of the Administrator, are necessary or advisable to implement andadminister the Plan and to transact its business.  As a named fiduciary, the Administrator isrequired to discharge its duties with respect to the Plan solely in theinterest of the Participants and Beneficiaries and with the care, skill,prudence, and diligence under the circumstances then prevailing that a prudent 

 

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man acting in a likecapacity and familiar with such matters would use in the conduct of anenterprise of a like character and with like aims.

 

**9.2****         ****CLAIMS PROCEDURE**

 

The provisions ofparagraph (a) below shall apply to all benefit claims under the Plan,except as provided in paragraph (b) below.

 

(a)           Pursuant to procedures established by theAdministrator, claims for benefits under the Plan made by a Participant orBeneficiary (the “claimant”) must be submitted in writing to the Administrator.  Approved claims shall be processed andinstructions issued to the Trustee or custodian authorizing payment as claimed.

 

Ifa claim is denied in whole or in part, the Administrator shall notify theclaimant within ninety (90) days after receipt of the claim (or within onehundred eighty (180) days, if special circumstances require an extension oftime for processing the claim, and provided written notice indicating thespecial circumstances and the date by which a final decision is expected to berendered is given to the claimant within the initial ninety (90) day period).

 

Thenotice of the denial of the claim shall be written in a manner calculated to beunderstood by the claimant and shall set forth the following:

 

(i)            thespecific reason or reasons for the denial of the claim;

 

(ii)           thespecific references to the pertinent Plan provisions on which the denial isbased;

 

(iii)          a description of any additional material orinformation necessary to perfect the claim, and an explanation of why suchmaterial or information is necessary;

 

(iv)          a statement that any appeal of the denial must be madeby giving to the Administrator, within sixty (60) days after receipt of thedenial of the claim, written notice of such appeal, such notice to include afull description of the pertinent issues and basis of the claim; and

 

(v)           a statement about the claimant’s right to bring civilaction under Section 502(a) under ERISA if the claim is denied onreview.

 

Upon denial of a claim inwhole or part, the claimant (or his duly authorized representative) shall havethe right to submit a written request to the Administrator for a full and fairreview of the denied claim, to be permitted to review documents (free ofcharge) pertinent to the denial, and to submit issues and comments inwriting.  Any appeal of the denial mustbe given to the Administrator within the period of time prescribed under(a)(iv) above.  If the claimant (orhis duly authorized representative) fails to appeal the denial to theAdministrator within the prescribed time, the Administrator’s adversedetermination shall be final, binding and conclusive.

 

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TheAdministrator may hold a hearing or otherwise ascertain such facts as it deemsnecessary and shall render a decision which shall be binding upon bothparties.  The Administrator shall advisethe claimant of the results of the review within sixty (60) days after receiptof the written request for the review, unless special circumstances require anextension of time for processing, in which case a decision shall be rendered assoon as possible but not later than one hundred twenty (120) days after receiptof the request for review.  If suchextension of time is required, written notice of the extension shall be furnishedto the claimant prior to the commencement of the extension.  The decision of the review shall be writtenin a manner calculated to be understood by the claimant and shall includespecific reasons for the decision, specific references to the pertinent Planprovisions on which the decision is based, the claimant’s right to receive freeof charge upon written request, reasonable access to and copies of, all Plandocuments, records, and other information relevant to the claim, and astatement about the claimant’s right to bring a civil action underSection 502(a) of ERISA.  Thedecision of the Administrator shall be final, binding and conclusive.

 

(b)           The provisions of this subsection (b) shall applyto a claim involving a determination by the Administrator of a Participant’sDisability.

 

Such a claim forDisability benefits must be submitted in writing to the Director of HumanResources.  Approved claims shall beprocessed and instructions issued to the Trustee or custodian authorizingpayment as claimed.

 

If such a claim isdenied in whole or in part, the Director of Human Resources shall notify theclaimant within forty-five (45) days after receipt of the claim (or withinseventy-five (75) days, if special circumstances require an extension of timefor processing the claim, and provided written notice indicating the specialcircumstances and the date by which a final decision is expected to be renderedis given to the claimant within the initial forty-five (45) day period).

 

If, prior to theend of the seventy five (75) day extended period, the Director of HumanResources determines that a decision cannot be rendered within the initialextension period due to special circumstances, the period for making adetermination may be extended for up to an additional thirty (30) days,provided written notice indicating the special circumstances and the date bywhich a final decision is expected to be rendered is given to the claimantwithin the originally extended seventy-five (75) day period.

 

The notice of thedenial of the claim shall be written in a manner calculated to be understood bythe claimant and shall set forth the following:

 

(i)            the specific reason or reasons for the denialof the claim;

 

(ii)           the specific references to the pertinent Planprovisions on which the denial is based;

 

(iii)          a description of any additional materials orinformation necessary to perfect the claim, and an explanation of why suchmaterial or information is necessary;

 

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(iv)          a statement that any appeal of the denial mustbe made by giving to the Administrator, within one hundred eighty (180) daysafter receipt of the denial of the claim, written notice of such appeal, suchnotice to include a full description of the pertinent issues and basis of theclaim;

 

(v)           a statement about the claimant’s right to bringa civil action under Section 502(a) of ERISA if the claim is deniedon review; and

 

(vi)          to the extent that an internal rule, guideline,protocol, or other similar criterion was relied upon in the denial, thenotification shall set forth the specific rule, guideline, protocol, orcriterion or indicate that such was relied upon and that a copy will beprovided free of charge to the claimant upon request.

 

Upon denial of aclaim in whole or in part, the claimant (or his duly authorized representative)shall have the right to submit a written request to the Administrator for afull and fair review of the denied claim, to be permitted to review documents(free of charge) pertinent to the denial, and to submit issues and comments inwriting.  Any appeal of the denial mustbe given to the Administrator within the period of time prescribed under(b)(iv) above.  If the claimant (orhis duly authorized representative) fails to appeal the denial to theAdministrator within the prescribed time, the Director of Human Resource’sinitial adverse determination shall be final, binding and conclusive.

 

The Administratorshall consider the full record of the claimant’s appeal without deference tothe initial determination and, if the determination is based in whole or inpart on a medical judgment, shall consult with a health care professionalexperienced in the field of medicine involved in the medical judgment.  The health care professional consulted on theappeal shall be an individual who was not consulted in connection with theinitial denied claim (nor a subordinate of any individual consulted inconnection with the initial denied claim) and whose identity shall be disclosedto the claimant upon written request of the claimant, regardless of whether thehealth care professional’s advice was relied upon in making the subsequentclaim determination.

 

The Administratorshall render a decision that shall be binding upon both parties.  The Administrator shall advise the claimantof the results of their review within forty-five (45) days after receipt of thewritten request for the review, unless special circumstances require anextension of time for processing, in which case a decision shall be rendered assoon as possible but not later than ninety (90) days after receipt of therequest for review.  If such extension oftime is required, written notice of the extension shall be furnished to theclaimant prior to the commencement of the extension. The decision of the reviewshall be written in a manner calculated to be understood by the claimant andshall set forth the following:

 

(A)                              the specific reason or reasons for the denialof the claim;

 

(B)                                the specific references to the pertinent Planprovisions on which the denial is based;

 

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(C)           the claimant’s right to receive free of charge,upon written request, reasonable access to and copies of, all Plan documents,records, and other information relevant to the claim;

 

(D)          a statement about the claimant’s right to bringa civil action under Section 502(a) of ERISA; and

 

(E)           to the extent that an internal rule, guideline,protocol, or other similar criterion was relied upon in the denial, thenotification shall set forth the specific rule, guideline, protocol, orcriterion or indicate that such was relied upon and that a copy will beprovided free of charge to the claimant upon request.

 

Thedecision of the Administrator shall be final, binding and conclusive.

 

**9.3****         ****TRUST AGREEMENT. **The TrustAgreement entered into by and between the Employer and the Trustee, includingany supplements or amendments thereto, or any successor Trust Agreement, isincorporated by reference herein.

 

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**ARTICLE TEN—SPECIAL COMPLIANCE PROVISIONS**

 

**10.1****       ****DISTRIBUTION OF EXCESS ELECTIVEDEFERRALS.**  Notwithstanding any other provision of thePlan, “Excess Elective Deferrals” (as defined below) (and income or lossallocable thereto, including all earnings, expenses and appreciation ordepreciation in value, whether or not realized) shall be distributed no laterthan each April 15 to Participants who claim Excess Elective Deferrals forthe preceding calendar year.

 

“Excess ElectiveDeferrals” shall mean the amount of Elective Deferrals (as defined below) for acalendar year that the Participant designates to the Plan pursuant to thefollowing procedure.  The Participant’sdesignation:  shall be submitted to theAdministrator in writing no later than March 1; shall specify theParticipant’s Excess Elective Deferrals for the preceding calendar year; andshall be accompanied by the Participant’s written statement that if the ExcessElective Deferrals is not distributed, it will, when added to amounts deferredunder other plans or arrangements described in Section 401(k),408(k) or 403(b) of the Code, exceed the limit imposed on theParticipant by Section 402(g) of the Code for the year in which thedeferral occurred.  Excess ElectiveDeferrals shall mean those Elective Deferrals that are includible in aParticipant’s gross income under Section 402(g) of the Code to theextent such Participant’s Elective Deferrals for a taxable year exceed thedollar limitation under such Code section.

 

An Excess ElectiveDeferral, and the income or loss allocable thereto, may be distributed beforethe end of the calendar year in which the Elective Deferrals were made.  A Participant who has an Excess ElectiveDeferral for a taxable year, taking into account only his Elective Deferrals underthe Plan or any other plans of the Employer (including any member of theEmployer’s related group (within the meaning of Section 2.5(b)), shall bedeemed to have designated the entire amount of such Excess Elective Deferral.

 

Excess Elective Deferralsshall be adjusted for any income or loss up to the date of distribution.  For purposes of this Section 10.1,whenever reference is made to the income or loss allocable to an ExcessElective Deferral, such income or loss shall be determined as follows.  The income or loss allocable to ExcessElective Deferrals allocated to each Participant is the sum of: (i) incomeor loss allocable to the Participant’s deferred amounts for the Plan Yearmultiplied by a fraction, the numerator of which is the Excess ElectiveDeferrals made on behalf of the Participant for the Plan Year, and thedenominator of which is the sum of the Participant’s Account balancesattributable to the Participant’s Elective Deferrals on the last day of thePlan Year; and (ii) ten percent (10%) of the amount determined under(i) multiplied by the number of whole calendar months between the end ofthe Plan Year and the date of distribution, counting the month of distributionif distribution occurs after the fifteenth (15th) of such month.

 

For purposes of thisArticle Ten, “Elective Deferrals” shall mean any Employer contributionsmade to the Plan at the election of the Participant, in lieu of cashcompensation, and shall include contributions made pursuant to a salarydeferral reduction agreement or other deferral mechanism.  With respect to any taxable year, aParticipant’s Elective Deferrals is the sum of all Employer contributions madeon behalf of such Participant pursuant to an election to defer under anyqualified cash or deferred arrangement described in Section 401(k) ofthe Code, any salary reduction simplified employee pension described inSection 408(k)(6) of the Code, and SIMPLE IRA Plan described inSection 408(p) of the Code, any eligible deferred compensation planunder 

 

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Section 457 of theCode, any plan described under Section 501(c)(18) of the Code, and anyEmployer contributions made on behalf of a Participant for the purchase of anannuity contract under Section 403(b) of the Code pursuant to asalary reduction agreement.  ElectiveDeferrals shall not include any deferrals properly distributed as excess annualadditions.

 

**10.2****       ****LIMITATIONS ON 401(k) CONTRIBUTIONS**

 

(a)           *Actual Deferral Percentage Test (“ADP Test”)**. *Amounts contributed as elective deferrals underSection 4.1(a) and, if so elected by the Employer, “QualifiedMatching Contributions” (as defined below) and any Fail-Safe Contributions madeunder this Section, are considered to be amounts deferred pursuant toSection 401(k) of the Code. For purposes of this Section, these amounts are referred to as the“deferred amounts.”  For purposes of the“actual deferral percentage test” described below, (i) such deferredamounts must be made before the last day of the twelve (12)-month periodimmediately following the Plan Year to which the contributions relate, and(ii) the deferred amounts relate to Compensation that either(A) would have been received by the Participant in the Plan Year but forthe Participant’s election to make deferrals, or (B) is attributable toservices performed by the Participant in the Plan Year and, but for theParticipant’s election to make deferrals, would have been received by theParticipant within two and one-half (21⁄2) months after the close of the PlanYear.  The Employer shall maintainrecords sufficient to demonstrate satisfaction of the actual deferralpercentage test and the deferred amounts used in such test.

 

Forpurposes of this Section, “Qualified Matching Contributions” shall meanmatching contributions which are subject to the distribution andnonforfeitability requirements under Section 401(k) of the Code andsatisfy Section 1.401(k)-2(a)(6) of the IRS Treasury regulations.

 

Asof the last day of each Plan Year, the deferred amounts for the Participantswho are Highly-Compensated Employees for the Plan Year shall satisfy either ofthe following tests:

 

(1)           The actual deferral percentage for the eligibleParticipants who are Highly-Compensated Employees for the Plan Year shall notexceed the actual deferral percentage for eligible Participants who areNonhighly-Compensated Employees for the Plan Year multiplied by 1.25; or

 

(2)           The actual deferral percentage for eligibleParticipants who are Highly-Compensated Employees for the Plan Year shall notexceed the actual deferral percentage of eligible Participants who areNonhighly-Compensated Employees for the Plan Year multiplied by two (2),provided that the actual deferral percentage for eligible Participants who areHighly-Compensated Employees for the Plan Year does not exceed the actualdeferral percentage for eligible Participants who are Nonhighly-CompensatedEmployees by more than two (2) percentage points.

 

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Notwithstandingthe foregoing, if elected by the Employer by Plan amendment, the foregoingpercentage tests shall be applied based on the actual deferral percentage ofthe Nonhighly-Compensated Employees for the prior Plan Year; provided, however,the change in testing methods complies with the requirements set forth in theFinal 401(k) and 401(m) Regulations and any other supersedingguidance.

 

Inthe event the Plan changes from the current year testing method to the prioryear testing method, then, for purposes of the first testing year for which thechange is effective, the actual deferral percentage for Nonhighly-CompensatedEmployees for the prior year shall be determined by taking into account onlyelective deferrals (within the meaning of Section 4.1) for thoseNonhighly-Compensated Employees that were taken into account for purposes ofthe actual deferral percentage test (and not the actual contribution percentagetest) under the current year testing method for the prior year.

 

Forpurposes of the above tests, the “actual deferral percentage” shall mean for aspecified group of Participants for a Plan Year, the average of the ratios(calculated separately for each Participant in such group) of (1) deferredamounts actually paid over to the Trust on behalf of such Participant for thePlan Year to (2) the Participant’s compensation (within the meaning ofSection 1.7 of the Plan) or, if the Employer chooses, Participant’scompensation determined by using any other definition of compensation thatsatisfies the nondiscrimination requirements of Section 414(s) of theCode and the regulations thereunder.  Forpurposes hereof, the Participant’s compensation shall be referred to as“414(s) Compensation.” An Employer may limit the period taken into accountfor determining 414(s) Compensation to that part of the Plan Year orcalendar year in which an Employee was a Participant in the component of thePlan being tested.  The period used todetermine 414(s) Compensation must be applied uniformly to allParticipants for the Plan Year.  Deferredamounts on behalf of any Participant shall include (1) any ElectiveDeferrals made pursuant to the Participant’s deferral election (includingExcess Elective Deferrals of Highly Compensated Employees), but excluding(a) Excess Elective Deferrals of Nonhighly-Compensated Employees thatarise solely from Elective Deferrals made under the Plan or plans of thisEmployer and (b) Elective Deferrals that are taken into account in theactual contribution percentage test (provided the actual deferral percentagetest is satisfied both with and without exclusion of these Elective Deferrals);and (2) Qualified Matching Contributions and Fail-Safe Contributions.  For purposes of computing Actual DeferralPercentages, an Employee who would be a Participant but for failure to makeElective Deferrals shall be treated as a Participant on whose behalf noElective Deferrals are made.

 

Forpurposes of this Section 10.2, the actual deferral percentage for anyeligible Participant who is a Highly-Compensated Employee for the Plan Year andwho is eligible to have Elective Deferrals allocated to his account under two(2) or more plans or arrangements described in CodeSection 401(k) that are maintained by the Employer or any employerwho is a related group member (within the meaning of Section 2.5(b)) shallbe determined as if all such deferrals were made under a singlearrangement.  In the event that this Plansatisfies the requirements of Code Section 401(k), 401(a)(4) or410(b) only if aggregated with one (1) or more other plans, or if one(1) or more other plans satisfy the requirements of such Sections of theCode only if aggregated with this Plan, then the provisions of thisSection 10.2 shall be applied by determining the actual deferral 

 

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percentageof eligible Participants as if all such plans were a single plan.  If the Employer elects by Plan amendment touse the prior year testing method, any adjustments to the Nonhighly-CompensatedEmployee actual deferral percentage for the prior year shall be made inaccordance with the Final 401(k) and 401(m) Regulations.  Plans may be aggregated in order to satisfySection 401(k) of the Code only if they have the same Plan Year anduse the same average actual deferral percentage testing method.

 

Thedetermination and treatment of deferred amounts and the actual deferralpercentage of any Participant shall be subject to the prescribed requirementsof the Secretary of the Treasury.

 

Inthe event the actual deferral percentage test is not satisfied for a Plan Year,the Employer, in its discretion, may make a Fail-Safe Contribution for eligibleParticipants who are Nonhighly-Compensated Employees, equal to a specifiedpercentage of compensation; provided, however such percentage does not exceedthe greater of five percent (5%) or two times the Plan’s “representativecontribution rate.”  For purposes of thisparagraph:

 

(1)       “compensation” - shall mean compensation usedfor the actual deferral percentage test.

 

(2)       “representative contribution rate” — shall meanthe greater of:

 

(A)        the lowest applicable contribution rate(defined below) of any eligible Nonhighly-Compensated Employee among a group ofeligible Nonhighly-Compensated Employees that consists of at least fiftypercent (50%) of the total eligible Nonhighly-Compensated Employees for thePlan Year, or

 

(B)         the lowest applicable contribution rate of anyeligible Nonhighly-Compensated in the group of all eligibleNonhighly-Compensated Employees for the Plan Year and who is employed by the Employeron the last day of the Plan Year.

 

Theapplicable contribution rate for an eligible Nonhighly-Compensated Employee isthe sum of the qualified matching contribution taken into account for theeligible Nonhighly-Compensated Employee for the Plan Year and the Fail-SafeContribution made for the eligible Nonhighly-Compensated Employee for the PlanYear, divided by the eligible Nonhighly-Compensated Employee’s compensation forthe same period.

 

(b)           *Distributions of Excess Contributions**.*

 

(1)           In General.  If the actual deferralpercentage test of Section 10.2(a) is not satisfied for a Plan Year,then the “excess contributions”, and income allocable thereto, shall bedistributed, to the extent required under Treasury regulations, no later thanthe last day of the Plan Year following the Plan Year for which the excesscontributions were made.  However, ifsuch excess contributions are distributed later than two and one-half (21⁄2)months following the last day of the Plan Year in 

 

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whichsuch excess contributions were made, a ten percent (10%) excise tax shall beimposed upon the Employer with respect to such excess contributions.

 

(2)           Excess Contributions.  Forpurposes of this Section, “excess contributions” shall mean, with respect toany Plan Year, the excess of:

 

(A)          Theaggregate amount of Employer contributions actually taken into account incomputing the numerator of the actual deferral percentage of Highly-CompensatedEmployees for such Plan Year, over

 

(B)           Themaximum amount of such contributions permitted by the ADP Test underSection 10.2(a) (determined by hypothetically reducing contributionsmade on behalf of Highly-Compensated Employees in order of the actual deferralpercentages, beginning with the highest of such percentages).

 

Excesscontributions shall be allocated to the Highly-Compensated Employees with thehighest dollar amounts of contributions taken into account in calculating theactual deferral percentage test for the year in which the excess arose,beginning with the Highly-Compensated Employee with the highest dollar amountof such contributions and continuing in descending order until all the excesscontributions have been allocated.  Forpurposes of the preceding sentence, the “highest dollar amount” is determinedafter distribution of any excess contributions. To the extent a Highly-Compensated Employee has not reached his catch-upcontribution limit (set forth in Section 4.1(e) of the Plan), excesscontributions allocated to such Highly-Compensated Employee are catch-upcontributions and will not be treated as excess contributions.

 

(3)           Determination of Income.  Excesscontributions shall be adjusted for any income or loss up to the date ofdistribution.  The income or loss allocableto excess contributions allocated to each Participant is the sum of:(i) income or loss allocable to the Participant’s deferred amounts for thePlan Year multiplied by a fraction, the numerator of which is the excesscontributions made on behalf of the Participant for the Plan Year, and thedenominator of which is the sum of the Participant’s Account balancesattributable to the Participant’s deferred amounts on the last day of the PlanYear; and (ii) ten percent (10%) of the amount determined under (i) multipliedby the number of whole calendar months between the end of the Plan Year and thedate of distribution, counting the month of distribution if distribution occursafter the fifteenth (15th) of such month.

 

(4)           Accounting for Excess Contributions.  Excesscontributions shall be distributed from that portion of the Participant’sAccount attributable to such deferred amounts to the extent allowable underTreasury regulations.

 

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**10.3****       ****NONDISCRIMINATION TEST FOR EMPLOYER MATCHINGCONTRIBUTIONS AND AFTER-TAX CONTRIBUTIONS**

 

(a)           *Average Contribution Percentage Test (“ACP Test”)**. *To the extent required by applicable law, the provisions of thisSection shall apply if Employer matching contributions are made in anyPlan Year under Section 4.2(a) and such matching contributions arenot used to satisfy the actual deferral percentage test of Section 10.2and/or in the event Employee after-tax contributions are made to the Plan underSection 4.5.  Any Employee after-taxcontributions that are used to satisfy the average contribution percentage testshall satisfy the requirements of Section 1.401(m)-2(a)(6) of the IRSTreasury Regulations.

 

Asof the last day of each Plan Year, the average contribution percentage forHighly-Compensated Employees for the Plan Year shall satisfy either of thefollowing tests:

 

(1)           The average contribution percentage for eligibleParticipants who are Highly-Compensated Employees for the Plan Year shall notexceed the average contribution percentage for eligible Participants who areNonhighly-Compensated Employees for the Plan Year multiplied by 1.25; or

 

(2)           The average contribution percentage for eligibleParticipants who are Highly-Compensated Employees for the Plan Year shall not exceedthe average contribution percentage for eligible Participants who areNonhighly-Compensated Employees for the Plan Year multiplied by two (2),provided that the average contribution percentage for eligible Participants whoare Highly-Compensated Employees for the Plan Year does not exceed the averagecontribution percentage for eligible Participants who are Nonhighly-CompensatedEmployees by more than two (2) percentage points.

 

Notwithstandingthe foregoing, if elected by the Employer by Plan amendment, the foregoingpercentage tests shall be applied based on the average contribution percentageof the Nonhighly-Compensated Employees for the prior Plan Year; provided,however, the change in testing methods complies with the requirements set forthin the Final 401(k) and 401(m) Regulations and any other supersedingguidance.

 

Inthe event the Plan changes from the current year testing method to the prioryear testing method, then, for purposes of the first testing year for which thechange is effective, the average contribution percentage forNonhighly-Compensated Employees for the prior year shall be determined bytaking into account only (a) after-tax contributions for thoseNonhighly-Compensated Employees for the prior year,  and (b) matching contributions for thoseNonhighly-Compensated Employees that were taken into account for purposes ofthe average contribution percentage test (and not the average actual deferralpercentage test) under the current year testing method for the prior year.

 

Forpurposes of the above tests, the “average contribution percentage” shall meanthe average (expressed as a percentage) of the contribution percentages of the“eligible Participants” in each group. The “contribution percentage” shall mean the ratio (expressed as apercentage) that the sum of Employer matching contributions, and, ifapplicable, Employee after-tax contributions, and elective deferrals underSection 4.1 (to the extent such elective deferrals are not used to satisfythe actual deferral percentage test of Section 10.2) under the Plan onbehalf of the eligible Participant for the Plan Year 

 

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bearsto the eligible Participant’s compensation (within the meaning ofSection 1.7 of the Plan) or, if the Employer chooses, Participant’scompensation determined by using any other definition of compensation thatsatisfies the nondiscrimination requirements of Section 414(s) of theCode and the regulations thereunder.  Forpurposes hereof, the Participant’s compensation shall be referred to as“414(s) Compensation.”  An Employermay limit the period taken into account for determining414(s) Compensation to that part of the Plan Year or calendar year inwhich an Employee was a Participant in the component of the Plan beingtested.  The period used to determine414(s) Compensation must be applied uniformly to all Participants for thePlan Year.  Such average contributionpercentage shall be determined without regard to matching contributions thatare used either to correct excess contributions hereunder or becausecontributions to which they relate are excess deferrals under Section 10.1or excess contributions under Section 10.2.  “Eligible Participant” shall mean each Employeewho is eligible to receive Employer matching contributions or make after-taxcontributions.

 

Forpurposes of this Section 10.3, the contribution percentage for anyeligible Participant who is a Highly-Compensated Employee for the Plan Year andwho is eligible to have Employer matching contributions, elective deferralsand/or after-tax contributions allocated to his account under two (2) ormore plans described in Section 401(a) of the Code or underarrangements described in Section 401(k) of the Code that aremaintained by the Employer or any member of the Employer’s related group(within the meaning of Section 2.5(b)), shall be determined as if all suchcontributions were made under a single plan.

 

Inthe event that this Plan satisfies the requirements of Section 401(m),401(a)(4) or 410(b) of the Code only if aggregated with one(1) or more other plans, or if one (1) or more other plans satisfythe requirements of such Sections of the Code only if aggregated with thisPlan, then the provisions of this Section 10.3 shall be applied bydetermining the contribution percentages of eligible Participants as if allsuch plans were a single plan.  If theEmployer elects by Plan amendment to use the prior year testing method, anyadjustments to the Nonhighly-Compensated Employee actual contribution percentagefor the prior year shall be made in accordance with the Final 401(k) and401(m) Regulations.  Plans may beaggregated in order to satisfy Section 401(m) of the Code only ifthey have the same Plan Year and use the same average contribution percentagetesting method.

 

The determination andtreatment of the contribution percentage of any Participant shall satisfy suchother requirements as may be prescribed by the Secretary of the Treasury.

 

(b)           *Distribution of Excess Employer Matching Contributions**.*

 

(1)           In General.  If the nondiscriminationtests of Section 10.3(a) are not satisfied for a Plan Year, then the“excess aggregate contributions”, and any income allocable thereto, shall beforfeited, if otherwise forfeitable, no later than the last day of the PlanYear following the Plan Year for which the nondiscrimination tests are notsatisfied, and shall be used to reduce Employer matching contributions underSection 4.2.  To the extent thatsuch “excess aggregate contributions” are nonforfeitable, such excesscontributions shall be distributed to the Participant on whose behalf theexcess contributions were made no later than the last day of the 

 

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Plan Year following thePlan Year for which such “excess aggregate contributions” were made.  However, if such excess aggregatecontributions are distributed later than two and one-half (21⁄2) months followingthe last day of the Plan Year in which such excess aggregate contributions weremade, a ten percent (10%) excise tax shall be imposed upon the Employer withrespect to such excess aggregate contributions. For purposes of the limitations of Section 11.1(b)(1) of thePlan, excess aggregate contributions shall be considered annual additions.

 

(2)           Excess Aggregate Contributions.  Forpurposes of this Section, “excess aggregate contributions” shall mean, withrespect to any Plan Year, the excess of:

 

(A)          Theaggregate amount of Employer matching contributions and, if applicable,Employee after-tax contributions, and elective deferrals under Section 4.1(to the extent not used to satisfy the actual deferral percentage test ofSection 10.2) actually taken into account in computing the numerator ofthe actual contribution percentage of Highly-Compensated Employees for suchPlan Year, over

 

(B)           Themaximum amount of such contributions permitted by the ACP Test underSection 10.3(a) (determined by hypothetically reducing contributionsmade on behalf of Highly-Compensated Employees in order of the actualcontribution percentages, beginning with the highest of such percentages).

 

Excesscontributions shall be allocated to the Highly-Compensated Employee with thelargest “contribution percentage amounts” (as defined below) taken into accountin calculating the average contribution percentage test for the year in whichthe excess arose, beginning with the Highly-Compensated Employee with thelargest amount of such contribution percentage amounts and continuing indescending order until all the excess aggregate contributions have beenallocated.  For purposes of the precedingsentence, the “largest amount” is determined after distribution of any excessaggregate contributions.

 

For purposes of thepreceding paragraph, “contribution percentage amounts” shall mean the sum ofEmployer matching contributions and, if applicable, Employee after-taxcontributions, and elective deferrals (to the extent not used to satisfy theactual deferral percentage test of Section 10.2) made under the Plan onbehalf of the Participant for the Plan Year.

 

(3)           Determination of Income.  Excessaggregate contributions shall be adjusted for an income or loss up to the dateof distribution.  The income or lossallocable to excess contributions allocated to each Participant is the sumof:  (i) income or loss allocable tothe Employer matching contributions and, if applicable, Employee after-taxcontributions, and such elective deferrals for the Plan Year multiplied by afraction, the numerator of which is the excess aggregate contributions onbehalf of the Participant for the Plan Year, and the denominator of which isthe sum of the Participant’s Account balances attributable to Employer matchingcontributions and, if applicable, Employee after-tax contributions, and such 

 

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electivedeferrals (to the extent not used to satisfy the average actual percentage testof Section 10.2) on the last day of the Plan Year; and (ii) tenpercent (10%) of the amount determined under (i) multiplied by the numberof whole calendar months between the end of the Plan Year and the date ofdistribution, counting the month of distribution if distribution occurs afterthe fifteenth (15th) of such month.

 

Notwithstandingthe foregoing, to the extent otherwise required to comply with the requirementsof Section 401(a)(4) of the Code and the regulations thereunder,vested matching contributions may be forfeited.

 

Tothe extent permitted by applicable law, the Plan may be disaggregated underSection 1.410(b)-7(c) of the Income Tax Regulations, in which casethe testing provisions of Sections 10.2 and 10.3 above may separately apply tothe disaggregated plans.

 

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**ARTICLEELEVEN—LIMITATION ON ANNUAL ADDITIONS**

 

**11.1****       ****RULES AND DEFINITIONS**

 

(a)           *Rules**. *The following rules shall limit additions toParticipants’ Accounts for limitation years and Plan Years beginning on orafter July 1, 2007:

 

(1)           If the Participant does not participate,and has never participated, in another qualified plan maintained by theEmployer, the amount of annual additions which may be credited to theParticipant’s Account for any limitation year shall not exceed the lesser ofthe “maximum permissible” amount (as hereafter defined) or any other limitationcontained in this Plan.  If the Employercontribution that would otherwise be allocated to the Participant’s Accountwould cause the annual additions for the limitation year to exceed the maximumpermissible amount, the amount allocated shall be reduced so that the annualadditions for the limitation year shall equal the maximum permissible amount.

 

(2)           Prior to determining the Participant’sactual compensation for the limitation year, the Employer may determine themaximum permissible amount for a Participant on the basis of a reasonableestimation of the Participant’s compensation for the limitation year, uniformlydetermined for all Participants similarly situated.

 

(3)           As soon as is administratively feasibleafter the end of the limitation year, the maximum permissible amount for thelimitation year shall be determined on the basis of the Participant’s actualcompensation for the limitation year.

 

(4)           If the limitations of Section 415 ofthe Code are exceeded, such excess amount shall be corrected in accordance withthe requirements of applicable law, including pursuant to the Employee PlansCompliance Resolution System.

 

(5)           If, in addition to this Plan, theParticipant is covered under another defined contribution plan maintained bythe Employer, or a welfare benefit fund, as defined in CodeSection 419(e), maintained by the Employer, or an individual medicalaccount, as defined in Code Section 415(1)(2), maintained by the Employerwhich provides an annual addition, the annual additions which may be creditedto a Participant’s account under all such plans for any such limitation yearshall not exceed the maximum permissible amount.  Benefits shall be reduced under anydiscretionary defined contribution plan before they are reduced under anydefined contribution pension plan.  Ifboth plans are discretionary contribution plans, they shall first be reducedunder this Plan.  Any excess amountattributable to this Plan shall be disposed of in the manner described inSection 11.1(a)(4).

 

(b)           *Definitions**.*

 

(1)           Annual additions: The following amounts credited to a Participant’s Account for thelimitation year shall be treated as annual additions:

 

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(A)          Employer contributions;

 

(B)           Elective deferrals (within the meaning ofSection 4.1);

 

(C)           Employee after-tax contributions, if any;

 

(D)          Forfeitures, if any; and

 

(E)           Amounts allocated after March 31,1984 to an individual medical account, as defined inSection 415(l)(2) of the Code, which is part of a pension or annuityplan maintained by the Employer.  Also,amounts derived from contributions paid or accrued after December 31, 1985in taxable years ending after such date which are attributable to post-retirementmedical benefits allocated to the separate account of a Key Employee, asdefined in Section 419A(d)(3), and amounts under a welfare benefit fund,as defined in Section 419(e), maintained by the Employer, shall be treatedas annual additions to a defined contribution plan.

 

Employer and employee contributions taken into accountas annual additions shall include “excess contributions” as defined inSection 401(k)(8)(B) of the Code, “excess aggregate contributions” asdefined in Section 401(m)(6)(B) of the Code, and “excess deferrals”as defined in Section 402(g) of the Code, regardless of whether suchamounts are distributed, recharacterized or forfeited, unless such amountsconstitute excess deferrals that were distributed to the Participant no laterthan April 15 of the taxable year following the taxable year of theParticipant in which such deferrals were made.

 

For this purpose, any excess amount applied underSection 11.1(a)(4) in the limitation year to reduce Employercontributions shall be considered annual additions for such limitation year.

 

(2)           Compensation: For purposes of determining maximum permitted benefits under thisSection, compensation shall include all of a Participant’s earned income,wages, salaries, and fees for professional services, and other amounts receivedfor personal services actually rendered in the course of employment with theEmployer, including, but not limited to, commissions paid to salesmen,compensation for services on the basis of a percentage of profits, commissionson insurance premiums, tips and bonuses, elective deferrals (as defined inSection 402(g)(3) of the Code) made by an Employee to the Plan andany amount contributed or deferred by an Employee on an elective basis and notincludable in the gross income of the Employee under Section 125, 132(f),or 457 of the Code.   Notwithstanding theforegoing, Compensation for purposes of this Section shall exclude thefollowing:

 

(A)          Except as provided in the precedingparagraph of this Section 11.1(b)(2), Employer contributions to a plan ofdeferred compensation which are not included in the Employee’s gross income forthe taxable year in which 

 

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contributed, or Employer contributions under asimplified employee pension plan (funded with individual retirement accounts orannuities) to the extent such contributions are deductible by the Employee, orany distributions from a plan of deferred compensation;

 

(B)           Amounts realized from the exercise of anonqualified stock option, or when restricted stock (or property) held by theEmployee either becomes freely transferable or is no longer subject to asubstantial risk of forfeiture;

 

(C)           Amounts realized from the sale, exchange,or other disposition of stock acquired under a qualified stock option;

 

(D)          Other amounts which received special taxbenefits, or contributions made by the Employer (whether or not under a salaryreduction agreement) toward the purchase of an annuity described inSection 403(b) of the Code (whether or not the amounts are actuallyexcludable from the gross income of the Employee); and

 

(E)           Amounts in excess of the applicable CodeSection 401(a)(17) limit.

 

Compensation shall be measured on the basis ofcompensation paid in the limitation year.

 

Any compensation described in thisSection 11.1(b)(2) does not fail to be Compensation merely because itis paid after the Participant’s severance from employment with the Employer,provided the Compensation is paid by the later of 21⁄2 months after severance fromemployment with the Employer or the end of the limitation year that includesthe date of severance from employment. In addition, payment for unused bona fide sick, vacation or other leaveshall be included as Compensation if (i) the Participant would have beenable to use the leave if employment had continued, (ii) such amounts arepaid by the later of 21⁄2 months after severance from employment with theEmployer or the end of the Plan Year that includes the date of severance fromemployment and (iii) such amounts would have been included as Compensationif they were paid prior to the Participant’s severance from employment with theEmployer.

 

(3)           Defined contribution dollar limitation: This shall mean $40,000, as adjusted under Section 415(d) ofthe Code.

 

(4)           Employer:  This termrefers to the Employer that adopts this Plan, and all members of a controlledgroup of corporations (as defined in Section 414(b) of the Code, asmodified by Section 415(h)), commonly-controlled trades or businesses (asdefined in Section 414(c), as modified by Section 415(h)), oraffiliated service groups (as defined in Section 414(m)) of which theEmployer is a part, or any other entity required to be aggregated with theEmployer under Code Section 414(o).

 

(5)           Limitation year:  This shall mean the Plan Year, unless theEmployer elects a different twelve (12) consecutive month period.  The election shall be made by the 

 

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adoption of a Plan amendment by the Employer.  If the limitation year is amended to adifferent twelve (12) consecutive month period, the new limitation year mustbegin on a date within the limitation year in which the amendment is made.

 

(6)           Maximum permissible amount: Except to the extent permitted under Section 4.1(e) andSection 414(v) of the Code, if applicable, this shall mean an amountequal to the lesser of the defined contribution dollar limitation or onehundred percent (100%) of the Participant’s compensation for the limitation year.  If a short limitation year is created becauseof an amendment changing the limitation year to a different twelve(12)-consecutive month period, the maximum permissible amount shall not exceedthe defined contribution dollar limitation multiplied by the following fraction:

 

Number of months in theshort limitation year

12

 

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**ARTICLETWELVE—AMENDMENT AND TERMINATION**

 

**12.1****       ****AMENDMENT. **The Employer reserves the right to amend,or modify the Plan at any time, or from time to time, in whole or in part.  To the extent permitted by board resolutionsof the Employer, any amendment may be adopted by action of a named fiduciaryappointed pursuant to Section 9.1 to which the Employer as Administratorhas delegated the authority to amend the Plan. If any such amendment, however, has a material financial impact on thecost of the Plan, such amendment shall be adopted by resolution of theEmployer’s board of directors.  Any suchamendment shall become effective under its terms upon adoption by the Employer,or named fiduciary, as the case may be. However, no amendment affecting the duties, powers or responsibilitiesof the Trustee may be made without the written consent of the Trustee.  No amendment shall be made to the Plan whichshall:

 

(a)           make it possible (other than as providedin Section 14.3) for any part of the corpus or income of the Trust Fund(other than such part as may be required to pay taxes and administrativeexpenses) to be used for or diverted to purposes other than the exclusivebenefit of the Participants or their Beneficiaries;

 

(b)           decrease a Participant’s account balanceor eliminate an optional form of payment (unless permitted by applicable law)with respect to benefits accrued as of the later of (i) the date such amendmentis adopted, or (ii) the date the amendment becomes effective; or

 

(c)           alter the schedule for vesting in aParticipant’s Account with respect to any Participant with three (3) ormore Years of Service for vesting purposes without his consent or deprive anyParticipant of any nonforfeitable portion of his Account.

 

Notwithstanding the other provisions of thisSection or any other provisions of the Plan, any amendment or modificationof the Plan may be made retroactively if necessary or appropriate within theremedial amendment period to conform to or to satisfy the conditions of anylaw, governmental regulation, or ruling, and to meet the requirements of theEmployee Retirement Income Security Act of 1974, as it may be amended.

 

If any corrective amendment (within the meaning ofSection 1.401(a)(4)-11(g) of the IRS Treasury Regulations) is madeafter the end of a Plan Year, such amendment shall satisfy the requirements ofSection 1.401(a)(4)-11(g)(3) and (4) of the IRS TreasuryRegulations.

 

**12.2****       ****TERMINATION OF THE PLAN. **The Employer, by resolution of its board of directors,reserves the right at any time and in its sole discretion to discontinuepayments under the Plan and to terminate the Plan.  In the event the Plan is terminated, or uponcomplete discontinuance of contributions under the Plan by the Employer, therights of each Participant to his Account on the date of such termination ordiscontinuance of contributions, to the extent of the fair market value underthe Trust Fund, shall become fully vested and nonforfeitable.  The Employer shall direct the Trustee todistribute the Trust Fund in accordance with the Plan’s distribution provisionsto the Participants and their Beneficiaries, each Participant or Beneficiaryreceiving a portion of the Trust Fund equal to the value of his Account as ofthe date of distribution.  Thesedistributions may be implemented by the continuance of the Trust and thedistribution of the 

 

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Participants’ Account shall be made at such time andin such manner as though the Plan had not terminated, or by any otherappropriate method, including rollover into Individual RetirementAccounts.  Upon distribution of the TrustFund, the Trustee shall be discharged from all obligations under the Trust andno Participant or Beneficiary shall have any further right or claimtherein.  In the event of the partialtermination of the Plan, the Accounts of all affected Participants shall becomefully vested and nonforfeitable.

 

In the event of the termination of the Plan, anyamounts to be distributed to Participants or Beneficiaries who cannot belocated shall be handled in accordance with the provisions of applicable law(which may include the establishment of an account for such Participant orBeneficiary).

 

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**ARTICLETHIRTEEN—TOP-HEAVY PROVISIONS**

 

**13.1****       ****APPLICABILITY. **The provisions of this Article shallbecome applicable only for any Plan Year in which the Plan is a Top-Heavy Plan(as defined in Section 13.2(b)) and only if, and to the extent, requiredunder Section 416 of the Code and the regulations issued thereunder.

 

**13.2****       ****DEFINITIONS. **For purposes of this Article, thefollowing definitions shall apply:

 

(a)           **“Key Employee”**: “Key Employee” shall mean any Employee or former Employee (including anydeceased Employee) who, at any time during the Plan Year that includes thedetermination date, was an officer of the Employer having annual compensationgreater than $130,000 (as adjusted under Section 416(i)(1) of theCode for Plan Years beginning after December 31, 2002), a five percent(5%) owner of the Employer, or a one percent (1%) owner of the Employer havingannual compensation of more than $150,000. For this purpose, annual compensation shall mean compensation as definedin Section 11.1(b)(2) of the Plan. The determination of who is a Key Employee (including the terms “5%owner” and “1% owner”) shall be made in accordance with Section 416(i)(1) ofthe Code and the applicable regulations and other guidance of generalapplicability issued thereunder.

 

(b)           **“Top-Heavy Plan”:**

 

(1)           The Plan shall constitute a “Top-HeavyPlan” if any of the following conditions exist:

 

(A)          The top-heavy ratio for the Plan exceedssixty percent (60%) and the Plan is not part of any required aggregation groupor permissive aggregation group of plans; or

 

(B)           The Plan is part of a requiredaggregation group of plans (but is not part of a permissive aggregation group)and the top-heavy ratio for the group of plans exceeds sixty percent (60%); or

 

(C)           The Plan is a part of a requiredaggregation group of plans and part of a permissive aggregation group and thetop-heavy ratio for the permissive aggregation group exceeds sixty percent(60%).

 

(2)           If the Employer maintains one (1) ormore defined contribution plans (including any simplified employee pension planfunded with individual retirement accounts or annuities) and the Employermaintains or has maintained one (1) or more defined benefit plans which havecovered or could cover a Participant in this Plan, the top-heavy ratio is afraction, the numerator of which is the sum of account balances under thedefined contribution plans for all Key Employees and the actuarial equivalentsof accrued benefits under the defined benefit plans for all Key Employees, andthe denominator of which is the sum of the account balances under the definedcontribution plans for all Participants and the actuarial 

 

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equivalents of accrued benefits under the definedbenefit plans for all Participants.  Boththe numerator and denominator of the top-heavy ratio shall include anydistribution of an account balance or an accrued benefit made in the one (1)-yearperiod ending on the determination date and any contribution due to a definedcontribution pension plan but unpaid as of the determination date.  However, in the case of any distribution madefor a reason other than severance from employment, death, or disability, thisprovision shall be applied by substituting a five (5)-year period for a one(1)-year period.  In determining theaccrued benefit of a non-Key Employee who is participating in a plan that ispart of a required aggregation group, the method of determining such benefitshall be either (i) in accordance with the method, if any, that uniformlyapplies for accrual purposes under all plans maintained by the Employer or anymember of the Employer’s related group (within the meaning ofSection 2.5(b)), or (ii) if there is no such method, as if suchbenefit accrued not more rapidly than the slowest accrual rate permitted underthe fractional accrual rate of Code Section 411(b)(1)(C).

 

(3)           For purposes of (1) and(2) above, the value of account balances and the actuarial equivalents ofaccrued benefits shall be determined as of the most recent Valuation Date thatfalls within or ends with the twelve (12)-month period ending on thedetermination date.  The account balancesand accrued benefits of a Participant who is not a Key Employee but who was aKey Employee in a prior year shall be disregarded.  The accrued benefits and account balances ofParticipants who have performed no service with any Employer maintaining theplan for the one (1)-year period ending on the determination date shall bedisregarded.  The calculations of thetop-heavy ratio, and the extent to which distributions, rollovers, andtransfers are taken into account shall be made under Section 416 of theCode and regulations issued thereunder. Deductible Employee contributions shall not be taken into account forpurposes of computing the top-heavy ratio. When aggregating plans, the value of account balances and accruedbenefits shall be calculated with reference to the determination dates thatfall within the same calendar year.

 

(4)           Definition of terms for Top-Heavy status:

 

(A)          **“Top-heavy ratio”** shall mean the following:

 

(1)           If the Employer maintains one or moredefined contribution plans (including any simplified employee pension planfunded with individual retirement accounts or annuities) and the Employer hasnever maintained any defined benefit plans which have covered or could cover aParticipant in this Plan, the top-heavy ratio is a fraction, the numerator ofwhich is the sum of the account balances of all Key Employees as of thedetermination date, and the denominator of which is the sum of the accountbalances of all Participants as of the determination date.  Both the numerator and the denominator shallbe increased by any contributions due but unpaid to a defined contributionpension plan as of the determination date.

 

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(B)           **“Permissive aggregationgroup”** shall meanthe required aggregation group of plans plus any other plan or plans of theEmployer which, when considered as a group with the required aggregation group,would continue to satisfy the requirements of Sections 401(a)(4) and 410of the Code.

 

(C)           **“Required aggregationgroup”** shall mean(i) each qualified plan of the Employer (including any terminated plan) inwhich at least one Key Employee participates, and (ii) any other qualifiedplan of the Employer which enables a plan described in (i) to meet therequirements of Section 401(a)(4) or 410 of the Code.

 

(D)          **“Determination date”** shall mean, for any Plan Year subsequentto the first Plan Year, the last day of the preceding Plan Year.  For the first Plan Year of the Plan,“determination date” shall mean the last day of that Plan Year.

 

(E)           **“Valuation Date”** shall mean the last day of the PlanYear.

 

(F)           **“Actuarial equivalence”**shall be based on the interest andmortality rates utilized to determine actuarial equivalence when benefits arepaid from any defined benefit plan.  Ifno rates are specified in said plan, the following shall be utilized: pre- andpost-retirement interest — five percent (5%); post-retirement mortality basedon the Unisex Pension (1984) Table as used by the Pension Benefit GuarantyCorporation on the date of execution hereof.

 

**13.3****       ****ALLOCATION OF EMPLOYER CONTRIBUTIONS AND FORFEITURESFOR A TOP-HEAVY PLAN YEAR.**

 

(a)           Except as otherwise provided below, inany Plan Year in which the Plan is a Top-Heavy Plan, the Employer contributionsand forfeitures allocated on behalf of any Participant who is a non-KeyEmployee shall not be less than the lesser of three percent (3%) of suchParticipant’s compensation (as defined in Section 11.1(b)(2) and aslimited by Section 401(a)(17) of the Code) or the largest percentage ofEmployer contributions and, elective deferrals (within the meaning ofSection 4.1), and forfeitures as a percentage of the Key Employee’scompensation (as defined in Section 11.1(b)(2) and as limited bySection 401(a)(17) of the Code), allocated on behalf of any Key Employeefor that Plan Year.  This minimumallocation shall be made even though, under other Plan provisions, theParticipant would not otherwise be entitled to receive an allocation or wouldhave received a lesser allocation for the Plan Year because of insufficientEmployer contributions under Section 4.2, the Participant’s failure tocomplete one thousand (1,000) Hours of Service, the Participant’s failure tomake elective deferrals under Section 4.1 or compensation is less than astated amount.

 

(b)           The minimum allocation under thisSection shall not apply to any Participant who was not employed by theEmployer on the last day of the Plan Year.

 

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(c)           Elective deferrals may not be taken intoaccount for the purpose of satisfying the minimum allocation.  However, Employer matching contributions maybe taken into account for the purpose of satisfying the minimum allocation.

 

(d)           For purposes of the Plan, a non-KeyEmployee shall be any Employee or Beneficiary of such Employee, any formerEmployee, or Beneficiary of such former Employee, who is not or was not a KeyEmployee during the Plan Year ending on the determination date.

 

(e)           If no defined benefit plan has ever beenpart of a permissive or required aggregation group of plans of the Employer,the contributions and forfeitures under this step shall be offset by anyallocation of contributions and forfeitures under any other definedcontribution plan of the Employer with a Plan Year ending in the same calendaryear as this Plan’s Valuation Date.

 

(f)            There shall be no duplication of theminimum benefits required under Code Section 416.  Benefits shall be provided under definedcontribution plans before under defined benefit plans.  If a defined benefit plan (active orterminated) is part of the permissive or required aggregation group of plans,the allocation method of subparagraph (a) above shall apply, except that“3%” shall be increased to “5%.”

 

**13.4****       ****VESTING. **The provisions contained inSection 6.1 relating to vesting shall continue to apply in any Plan Yearin which the Plan is a Top-Heavy Plan, and apply to all benefits within themeaning of Section 411(a)(7) of the Code except those attributable toEmployee contributions and elective deferrals under Section 4.1, includingbenefits accrued before the effective date of Section 416 and benefitsaccrued before the Plan became a Top-Heavy Plan.

 

Payment of a Participant’s vested Account balanceunder this Section shall be made in accordance with the provisions ofArticle Seven.

 

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**ARTICLE FOURTEEN—MISCELLANEOUS PROVISIONS**

 

**14.1****       ****PLAN DOES NOT AFFECT EMPLOYMENT. **Neither thecreation of this Plan, any amendment thereto, the creation of any fund nor thepayment of benefits hereunder shall be construed as giving any legal orequitable right to any Employee or Participant against the Employer, itsofficers or Employees, or against the Trustee. All liabilities under this Plan shall be satisfied, if at all, only outof the Trust Fund held by the Trustee. Participation in the Plan shall not give any Participant any right to beretained in the employ of the Employer, and the Employer hereby expresslyretains the right to hire and discharge any Employee at any time with orwithout cause, as if the Plan had not been adopted, and any such dischargedParticipant shall have only such rights or interests in the Trust Fund as maybe specified herein.

 

**14.2****       ****SUCCESSOR TO THE EMPLOYER. **In the event ofthe merger, consolidation, reorganization or sale of assets of the Employer,under circumstances in which a successor person, firm, or corporation shallcarry on all or a substantial part of the business of the Employer, and suchsuccessor shall employ a substantial number of Employees of the Employer andshall elect to carry on the provisions of the Plan, such successor shall besubstituted for the Employer under the terms and provisions of the Plan uponthe filing in writing with the Trustee of its election to do so.

 

**14.3****       ****REPAYMENTS TO THE EMPLOYER. **Notwithstandingany provisions of this Plan to the contrary:

 

(a)           Any monies orother Plan assets attributable to any contribution made to this Plan by theEmployer because of a mistake of fact shall be returned to the Employer withinone (1) year after the date of contribution.

 

(b)           Any monies orother Plan assets attributable to any contribution made to this Plan by theEmployer shall be refunded to the Employer, to the extent such contribution ispredicated on the deductibility thereof under the Code and the income taxdeduction for such contribution is disallowed. Such amount shall be refunded within one (1) taxable yearafter the date of such disallowance or within one (1) year of theresolution of any judicial or administrative process with respect to thedisallowance.  All Employer contributionshereunder are expressly contributed based upon such contributions’deductibility under the Code.

 

**14.4****       ****BENEFITS NOT ASSIGNABLE. **Except asprovided in Section 414(p) of the Code with respect to “qualifieddomestic relations orders,” or except as provided in Section 401(a)(13)(C) ofthe Code with respect to certain judgments and settlements, the rights of anyParticipant or his Beneficiary to any benefit or payment hereunder shall not besubject to voluntary or involuntary alienation or assignment.

 

With respect to any“qualified domestic relations order” relating to the Plan, the Plan shallpermit distribution to an alternate payee under such order at any time,irrespective of whether the 

 

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Participant has attained his“earliest retirement age” (within the meaning of Section 414(p)(4)(B) ofthe Code) under the Plan.  A distributionto an alternate payee prior to the Participant’s attainment of his earliestretirement age shall, however, be available only if the order specifiesdistribution at that time or permits an agreement between the Plan and thealternate payee to authorize an earlier distribution.  Nothing in this paragraph shall, however,give a Participant a right to receive distribution at a time otherwise notpermitted under the Plan nor does it permit the alternate payee to receive aform of payment not otherwise permitted under the Plan or under said Section 414(p) ofthe Code.

 

**14.5****       ****MERGER OF PLANS. **In the case ofany merger or consolidation of this Plan with, or transfer of the assets orliabilities of the Plan to, any other plan, the terms of such merger,consolidation or transfer shall be such that each Participant would receive (inthe event of termination of this Plan or its successor immediately thereafter)a benefit which is no less than what the Participant would have received in theevent of termination of this Plan immediately before such merger, consolidationor transfer.

 

**14.6****       ****INVESTMENT EXPERIENCE NOT A FORFEITURE. **The decrease in value of any Account due to adverse investmentexperience shall not be considered an impermissible “forfeiture” of any vestedbalance.

 

**14.7****       ****CONSTRUCTION. **Whereverappropriate, the use of the masculine gender shall be extended to include thefeminine and/or neuter or vice versa; and the singular form of words shall beextended to include the plural; and the plural shall be restricted to mean thesingular.

 

**14.8****       ****GOVERNING DOCUMENTS. **A Participant’srights shall be determined under the terms of the Plan as in effect at theParticipant’s date of termination from employment, or, if later, and to theextent permitted by applicable law, as determined under the terms of the Plan.

 

**14.9****       ****GOVERNING LAW. **The provisionsof this Plan shall be construed under the laws of the state of the situs of theTrust, except to the extent such laws are preempted by Federal law.

 

**14.10****     ****HEADINGS. **The Article headingsand Section numbers are included solely for ease of reference.  If there is any conflict between suchheadings or numbers and the text of the Plan, the text shall control.

 

**14.11****     ****COUNTERPARTS. **This Plan maybe executed in any number of counterparts, each of which shall be deemed anoriginal; said counterparts shall constitute but one and the same instrument,which may be sufficiently evidenced by any one counterpart.

 

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**14.12****     ****LOCATION OF PARTICIPANT OR BENEFICIARY UNKNOWN. **In the event that all or anyportion of the distribution payable to a Participant or to a Participant’sBeneficiary hereunder shall, at the expiration of five (5) years after itshall become payable, remain unpaid solely by reason of the inability of theAdministrator to ascertain the whereabouts of such Participant or Beneficiary,after sending a registered letter, return receipt requested, to the last knownaddress, and after further diligent effort, the amount so distributable shallbe forfeited and reallocated in the same manner as a forfeiture under Section 6.2pursuant to this Plan.  In the event a Participantor Beneficiary is located subsequent to the forfeiture of his Account balance,such Account balance shall be restored.

 

**14.13****     ****DISTRIBUTION TO MINOR OR LEGALLY INCAPACITATED. **In the event any benefit ispayable to a minor or to a person deemed to be incompetent or to a personotherwise under legal disability, or who is by sole reason of advanced age,illness, or other physical or mental incapacity incapable of handling thedisposition of his property, the Administrator, may direct the Trustee to makepayment of such benefit to the minor’s or legally incapacitated person’s courtappointed guardian, person designated in a valid power of attorney, or anyother person authorized under state law. The receipt of any such payment or distribution shall be a completedischarge of liability for Plan obligations.

 

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**IN WITNESSWHEREOF,**the Employer, by its duly authorized officer, hascaused this Plan to be executed on the 18th day of December, 2009.

 

 
|       | **CONTINENTAL  MATERIALS CORPORATION** |
|------------|----------------------------------------|
| ** ** | ** **                             |   |
| ** ** | ** **                             |   |
| ** ** | By:                                    | /s/ Joseph J. Sum |
|       |                                   | Authorized  Officer |

 

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