**Exhibit 10.1**

 

GTSI EMPLOYEES’ 401(k) INVESTMENT PLAN

 

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TABLE OF CONTENTS

 
| INTRODUCTION       |                                                     |   |
|--------------------|----------------------------------------------------------|--------|
|               |                                                     |   |
| ARTICLE I     | FORMAT AND  DEFINITIONS                                  |   |
|               |                                                     |   |
| ARTICLE I     |                                                     |   |
|               |                                                     |   |
| Section 1.01  | Format                                                   |   |
| Section 1.02  | Definitions                                              |   |
|               |                                                     |   |
| ARTICLE II    | PARTICIPATION                                            |   |
|               |                                                     |   |
| Section 2.01  | Active Participant                                       |   |
| Section 2.02  | Inactive Participant                                     |   |
| Section 2.03  | Cessation of Participation                               |   |
|               |                                                     |   |
| ARTICLE III   | CONTRIBUTIONS                                            |   |
|               |                                                     |   |
| Section 3.01  | Employer Contributions                                   |   |
| Section 3.01A | Rollover Contributions                                   |   |
| Section 3.02  | Forfeitures                                              |   |
| Section 3.03  | Allocation                                               |   |
| Section 3.04  | Contribution Limitation                                  |   |
| Section 3.05  | Excess  Amounts                                          |   |
|               |                                                     |   |
| ARTICLE IV    | INVESTMENT  OF CONTRIBUTIONS                             |   |
|               |                                                     |   |
| ARTICLE V     | BENEFITS                                                 |   |
|               |                                                     |   |
| Section 5.01  | Retirement  Benefits                                     |   |
| Section 5.02  | Death  Benefits                                          |   |
| Section 5.03  | Vested  Benefits                                         |   |
| Section 5.04  | When  Benefits Start                                     |   |
| Section 5.05  | Withdrawal  Benefits                                     |   |
| Section 5.06  | Loans  to Participants                                   |   |
| Section 5.07  | Distributions  Under Qualified Domestic Relations Orders |   |
|               |                                                     |   |
| ARTICLE VI    | DISTRIBUTION  OF BENEFITS                                |   |
|               |                                                     |   |
| Section 6.01  | Automatic  Forms of Distribution                         |   |
| Section 6.02  | Optional  Forms of Distribution                          |   |
| Section 6.03  | Election  Procedures                                     |   |
| Section 6.04  | Notice  Requirements                                     |   |

 

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| ARTICLE VII   | DISTRIBUTION  REQUIREMENTS                            |   |
|--------------------|-------------------------------------------------------|--------|
|               |                                                  |   |
| Section 7.01  | Application                                           |   |
| Section 7.02  | Definitions                                           |   |
| Section 7.03  | Distribution  Requirements                            |   |
|               |                                                  |   |
| ARTICLE VIII  | TERMINATION  OF THE PLAN                              |   |
|               |                                                  |   |
| ARTICLE IX    | ADMINISTRATION  OF THE PLAN                           |   |
|               |                                                  |   |
| Section 9.01  | Administration                                        |   |
| Section 9.02  | Expenses                                              |   |
| Section 9.03  | Records                                               |   |
| Section 9.04  | Information  Available                                |   |
| Section 9.05  | Claim  and Appeal Procedures                          |   |
| Section 9.06  | Delegation  of Authority                              |   |
| Section 9.07  | Exercise  of Discretionary Authority                  |   |
|               |                                                  |   |
| ARTICLE X     | GENERAL  PROVISIONS                                   |   |
|               |                                                  |   |
| Section 10.01 | Amendments                                            |   |
| Section 10.02 | Direct  Rollovers                                     |   |
| Section 10.03 | Mergers  and Direct Transfers                         |   |
| Section 10.04 | Provisions  Relating to the Insurer and Other Parties |   |
| Section 10.05 | Employment  Status                                    |   |
| Section 10.06 | Rights  to Plan Assets                                |   |
| Section 10.07 | Beneficiary                                           |   |
| Section 10.08 | Nonalienation  of Benefits                            |   |
| Section 10.09 | Construction                                          |   |
| Section 10.10 | Legal  Actions                                        |   |
| Section 10.11 | Small  Amounts                                        |   |
| Section 10.12 | Word  Usage                                           |   |
| Section 10.13 | Change  in Service Method                             |   |
| Section 10.14 | Military  Service                                     |   |

 

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INTRODUCTION

 

The PrimaryEmployer previously established a 401(k) plan on April 1, 1991.

 

The PrimaryEmployer is of the opinion that the plan should be changed. It believes thatthe best means to accomplish these changes is to completely restate the plan’sterms, provisions and conditions. The restatement, effective January 1,1997, is set forth in this document and is substituted in lieu of the priordocument.

 

Thisrestatement is made retroactively to reflect the law changes made through theInternal Revenue Service Restructuring and Reform Act of 1998. The provisionsof this Plan apply as of the effective date of the restatement except asprovided in the attached addendums which reflect the operation of the Planbetween the effective date of the restatement and the date this restatement isadopted and identify those provisions which are not amended retroactively.

 

The restatedplan continues to be for the exclusive benefit of employees of the Employer.All persons covered under the plan on December 31, 1996, shall continue tobe covered under the restated plan with no loss of benefits.

 

It is intended that the plan, asrestated, shall qualify as a profit sharing plan under the Internal RevenueCode of 1986, including any later amendments to the Code.

 

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ARTICLE I

 

FORMATAND DEFINITIONS

 

SECTION 1.01—FORMAT.

 

Words andphrases defined in the DEFINITIONS SECTION of Article I shall havethat defined meaning when used in this Plan, unless the context clearlyindicates otherwise.

 

These words andphrases have an initial capital letter to aid in identifying them as definedterms.

 

SECTION 1.02—DEFINITIONS.

 

Account means, for a Participant, his share ofthe Plan Fund. Separate accounting records are kept for those parts of hisAccount that result from:

 

(a)                                  ElectiveDeferral Contributions

 

(b)                                 MatchingContributions

 

(c)                                  QualifiedNonelective Contributions

 

(d)                                 OtherEmployer Contributions

 

(e)                                  RolloverContributions

 

If the Participant’s Vesting Percentage isless than 100% as to any of the Employer Contributions, a separate accountingrecord will be kept for any part of his Account resulting from such EmployerContributions and, if there has been a prior Forfeiture Date, from such Contributionsmade before a prior Forfeiture Date.

 

A Participant’s Account shall be reduced byany distribution of his Vested Account and by any Forfeitures. A Participant’sAccount shall participate in the earnings credited, expenses charged, and anyappreciation or depreciation of the Investment Fund. His Account is subject toany minimum guarantees applicable under the Annuity Contract or otherinvestment arrangement and to any expenses associated therewith.

 

Accrual Computation Period means aconsecutive 12-month period ending on the last day of each Plan Year, includingcorresponding consecutive 12-month periods before April 1, 1991.

 

ACP Test means the nondiscrimination testdescribed in Code Section 401(m)(2) as provided for in subparagraph (d) ofthe EXCESS AMOUNTS SECTION of Article III.

 

Active Participant means an Eligible Employeewho is actively participating in the Plan according to the provisions in theACTIVE PARTICIPANT SECTION of Article II.

 

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ADP Test means the nondiscrimination testdescribed in Code Section 401 (k)(3) as provided for in subparagraph (c)of the EXCESS AMOUNTS SECTION of Article III.

 

Affiliated Service Group means any group ofcorporations, partnerships or other organizations of which the Employer is apart and which is affiliated within the meaning of Code Section 414(m) andregulations thereunder. Such a group includes at least two organizations one ofwhich is either a service organization (that is, an organization the principalbusiness of which is performing services), or an organization the principalbusiness of which is performing management functions on a regular andcontinuing basis. Such service is of a type historically performed byemployees. In the case of a management organization, the Affiliated ServiceGroup shall include organizations related, within the meaning of Code Section 144(a)(3),to either the management organization or the organization for which it performsmanagement functions. The term Controlled Group, as it is used in this Plan,shall include the term Affiliated Service Group.

 

Annual Compensation means, for a Plan Year,the Employee’s Compensation for the Compensation Year ending with or within theconsecutive 12-month period ending on the last day of the Plan Year.

 

Annuity Contract means the annuity contractor contracts into which the Primary Employer enters with the Insurer forguaranteed benefits, for the investment of Contributions in separate accounts,and for the payment of benefits under this Plan. The term Annuity Contract asit is used in this Plan shall include the plural unless the context clearlyindicates the singular is meant.

 

Annuity Starting Date means, for aParticipant, the first day of the first period for which an amount is payableas an annuity or any other form.

 

Beneficiary means the person or persons namedby a Participant to receive any benefits under the Plan when the Participantdies. See the BENEFICIARY SECTION of Article X.

 

Claimant means any person who makes a claimfor benefits under this Plan. See the CLAIM AND APPEAL PROCEDURES SECTION ofArticle IX.

 

Code means the Internal Revenue Code of 1986,as amended.

 

Compensation means, except for purposes ofthe CONTRIBUTION LIMITATION SECTION of Article III and Article XI,the total earnings, except as modified in this definition, paid or madeavailable to an Employee by the Employer during any specified period.

 

“Earnings” in this definition means wageswithin the meaning of Code Section 3401(a) and all other payments ofcompensation to an Employee by the Employer (in the course of the Employer’strade or business) for which the Employer is required to furnish the Employee awritten statement under Code Sections 6041(d), 6051(a)(3), and 6052. Earningsmust be determined without regard to any rules under Code Section 3401(a)that limit the remuneration included in wages based on the nature or locationof the employment or the services performed (such as the exception foragricultural labor in Code Section 3401 (a)(2)). The amount reported inthe “Wages, Tips and Other Compensation” box on Form W-2 satisfies thisdefinition.

 

For any Self-employed Individual,Compensation means Earned Income.

 

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Compensation shall exclude reimbursements orother expense allowances, fringe benefits (cash and noncash), moving expenses,deferred compensation (other than elective contributions), and welfarebenefits.

 

Compensation shall also include electivecontributions. For this purpose, elective contributions are amounts contributedby the Employer pursuant to a salary reduction agreement and which are notincludible in the gross income of the Employee under Code Section 125,402(e)(3), 402(h)(1)(B), or 403(b). Elective contributions also include compensationdeferred under a Code Section 457 plan maintained by the Employer andemployee contributions “picked up” by a governmental entity and, pursuant toCode Section 414(h)(2), treated as Employer contributions. For yearsbeginning after December 31, 1997, elective contributions shall alsoinclude amounts contributed by the Employer pursuant to a salary reductionagreement and which are not includible in the gross income of the Employeeunder Code Section 132(f)(4).

 

For purposes of the EXCESS AMOUNTS SECTION ofArticle 111, the Employer may elect to use an alternativenondiscriminatory definition of Compensation in accordance with the regulationsunder Code Section 414(s).

 

For Plan Years beginning on or after January 1,1994, the annual Compensation of each Participant taken into account fordetermining all benefits provided under the Plan for any determination periodshall not exceed $150,000, as adjusted for increases in the cost-of-living inaccordance with Code Section 401(a)(17)(B). The cost-of-living adjustmentin effect for a calendar year applies to any determination period beginning insuch calendar year.

 

If a determination period consists of fewerthan 12 months, the annual limit is an amount equal to the otherwise applicableannual limit multiplied by a fraction. The numerator of the fraction is thenumber of months in the short determination period, and the denominator of thefraction is 12.

 

If Compensation for any prior determinationperiod is taken into account in determining a Participant’s contributions orbenefits for the current Plan Year, the Compensation for such priordetermination period is subject to the applicable annual compensation limit ineffect for that determination period. For this purpose, in determiningcontributions or benefits in Plan Years beginning on or after January 1,1994, the annual compensation limit in effect for determination periodsbeginning before that date is $150,000.

 

Compensation means, for a Leased Employee,Compensation for the services the Leased Employee performs for the Employer,determined in the same manner as the Compensation of Employees who are notLeased Employees, regardless of whether such Compensation is received directlyfrom the Employer or from the leasing organization.

 

Compensation Year means the consecutive12-month period ending on the last day of each Plan Year, includingcorresponding periods before April 1, 1991.

 

Contingent Annuitant means an individualnamed by the Participant to receive a lifetime benefit after the Participant’sdeath in accordance with a survivorship life annuity.

 

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Contributions means

 

Elective Deferral Contributions, MatchingContributions, Qualified Nonelective Contributions, Discretionary Contributions, Rollover Contributions

 

as set out in Article III, unless thecontext clearly indicates only specific contributions are meant.

 

Controlled Group means any group ofcorporations, trades, or businesses of which the Employer is a part that areunder common control. A Controlled Group includes any group of corporations,trades, or businesses, whether or not incorporated, which is either aparent-subsidiary group, a brother-sister group, or a combined group within themeaning of Code Section 414(b), Code Section 414(c) and regulationsthereunder and, for purposes of determining contribution limitations under theCONTRIBUTION LIMITATION SECTION of Article III, as modified by Code Section 415(h)and, for the purpose of identifying Leased Employees, as modified by Code Section 144(a)(3).The term Controlled Group, as it is used in this Plan, shall include the termAffiliated Service Group and any other employer required to be aggregated withthe Employer under Code Section 414(o) and the regulations thereunder.

 

Direct Rollover means a payment by the Planto the Eligible Retirement Plan specified by the Distributee.

 

Discretionary Contributions meansdiscretionary contributions made by the Employer to fund this Plan. See theEMPLOYER CONTRIBUTIONS SECTION of Article III.

 

Distributee means an Employee or formerEmployee. In addition, the Employee’s (or former Employee’s) surviving spouseand the Employee’s (or former Employee’s) spouse or former spouse who is thealternate payee under a qualified domestic relations order, as defined in Code Section 414(p),are Distributees with regard to the interest of the spouse or former spouse.

 

Earned Income means, for a Self-employedIndividual, net earnings from self-employment in the trade or business forwhich this Plan is established if such Self-employed Individual’s personalservices are a material income producing factor for that trade or business. Netearnings shall be determined without regard to items not included in grossincome and the deductions properly allocable to or chargeable against suchitems. Net earnings shall be reduced for the employer contributions to theEmployer’s qualified retirement plan(s) to the extent deductible under Code Section 404.

 

Net earnings shall be determined with regardto the deduction allowed to the Employer by Code Section 164(f) fortaxable years beginning after December 31, 1989.

 

Elective Deferral Contributions meanscontributions made by the Employer to fund this Plan in accordance withelective deferral agreements between Eligible Employees and the Employer.

 

Elective deferral agreements shall be made,changed, or terminated according to the provisions of the EMPLOYERCONTRIBUTIONS SECTION of Article III.

 

Elective Deferral Contributions shall be 100%vested and subject to the distribution restrictions of Code Section 401(k)when made. See the WHEN BENEFITS START SECTION of Article V.

 

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Eligible Employee means any Employee of theEmployer who meets the following requirement. His employment classificationwith the Employer is the following:

 

Nonbargaining class. Not represented forcollective bargaining purposes by any collective bargaining agreement betweenthe Employer and employee representatives, if retirement benefits were thesubject of good faith and if two percent or less of the Employees who arecovered pursuant to that agreement are professionals as defined in section 1.410(b)-9of the regulations. For this purpose, the term “employee representatives” doesnot include any organization more than half of whose members are Employees whoare owners, officers, or executives of the Employer.

 

Not a nonresident alien, within the meaningof Code Section 7701(b)(1)(B), who receives no earned income, within themeaning of Code Section 911(d)(2), from the Employer which constitutesincome from sources within the United States, within the meaning of Code Section 861(a)(3),or who receives such earned income but it is all exempt from income tax in theUnited States under the terms of an income tax convention.

 

Eligible Retirement Plan means an individualretirement account described in Code Section 408(a), an individualretirement annuity described in Code Section 408(b), an annuity plandescribed in Code Section 403(a) or a qualified trust described in Code Section 401(a),that accepts the Distributee’s Eligible Rollover Distribution. However, in thecase of an Eligible Rollover Distribution to the surviving spouse, an EligibleRetirement Plan is an individual retirement account or individual retirement annuity.

 

Eligible Rollover Distribution means anydistribution of all or any portion of the balance to the credit of theDistributee, except that an Eligible Rollover Distribution does not include:(i) any distribution that is one of a series of substantially equal periodicpayments (not less frequently than annually) made for the life (or lifeexpectancy) of the Distributee or the joint lives (or joint life expectancies)of the Distributee and the Distributee’s designated Beneficiary, or for aspecified period of ten years or more; (ii) any distribution to the extent suchdistribution is required under Code Section 401 (a)(9); (iii) any hardshipdistribution described in Code Section 401(k)(2)(B)(i)(IV) received after December 31,1998; (iv) the portion of any other distribution(s) that is not includible ingross income (determined without regard to the exclusion for net unrealizedappreciation with respect to employer securities); and (v) any otherdistribution(s) that is reasonably expected to total less than $200 during ayear.

 

Employee means an individual who is employedby the Employer or any other employer required to be aggregated with theEmployer under Code Sections 414(b), (c), (m), or (o). A Controlled Groupmember is required to be aggregated with the Employer.

 

The term Employee shall include anySelf-employed Individual treated as an employee of any employer described inthe preceding paragraph as provided in Code Section 401(c)(1). The termEmployee shall also include any Leased Employee deemed to be an employee of anyemployer described in the preceding paragraph as provided in Code Section 414(n)or (o).

 

Employer means, except for purposes of theCONTRIBUTION LIMITATION SECTION of Article III, the Primary Employer.This will also include any successor corporation or firm of the Employer whichshall, by written agreement, assume the obligations of this Plan or anyPredecessor Employer which maintained this Plan.

 

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Employer Contributions means

 

Elective Deferral Contributions MatchingContributionsQualified Nonelective Contributions Discretionary Contributions

 

as set out in Article III andcontributions made by the Employer to fund this Plan in accordance with theprovisions of the MODIFICATION OF CONTRIBUTIONS SECTION of Article XI,unless the context clearly indicates only specific contributions are meant.

 

Employment Commencement Date means the datean Employee first performs an Hour-of-Service.

 

Entry Date means the date an Employee first entersthe Plan as an Active Participant. See the ACTIVE PARTICIPANT SECTION of Article II.

 

ERISA means the Employee Retirement IncomeSecurity Act of 1974, as amended.

 

Fiscal Year means the Primary Employer’staxable year. The last day of the Fiscal Year is December 31.

 

Forfeiture means the part, if any, of aParticipant’s Account that is forfeited. See the FORFEITURES SECTION of Article III.

 

Forfeiture Date means, as to a Participant,the date the Participant incurs five consecutive Vesting Breaks in Service.

 

Highly Compensated Employee means anyEmployee who:

 

(a)                                  wasa 5-percent owner at any time during the year or the preceding year, or

 

(b)                                 forthe preceding year had compensation from the Employer in excess of $80,000 and,if the Employer so elects, was in the top-paid group for the preceding year.The $80,000 amount is adjusted at the same time and in the same manner as underCode Section 415(d), except that the base period is the calendar quarterending September 30, 1996.

 

For this purpose the applicable year of theplan for which a determination is being made is called a determination year andthe preceding 12-month period is called a look-back year. If the Employer makesa calendar year data election, the look-back year shall be the calendar yearbeginning with or within the look-back year. The Plan may not use such electionto determine whether Employees are Highly Compensated Employees on account ofbeing a 5-percent owner.

 

In determining who is a Highly CompensatedEmployee, the Employer does not make a top-paid group election. In determiningwho is a Highly Compensated Employee, the Employer does not make a calendaryear data election.

 

Calendar year data elections and top-paidgroup elections, once made, apply for all subsequent years unless changed bythe Employer. If the Employer makes one election, the Employer is not requiredto make the other. If both elections are made, the look-back year indetermining the top-paid group must

 

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be the calendar year beginning with or withinthe look-back year. These elections must apply consistently to thedetermination years of all plans maintained by the Employer which reference thehighly compensated employee definition in Code Section 414(q), except asprovided in Internal Revenue Service Notice 97-45 (or superseding guidance).The consistency requirement will not apply to determination years beginningwith or within the 1997 calendar year, and for determination years beginning onor after January 1, 1998 and before January 1, 2000, satisfaction ofthe consistency requirement is determined without regard to any nonretirementplans of the Employer.

 

The determination of who is a highlycompensated former Employee is based on the rules applicable to determiningHighly Compensated Employee status as in effect for that determination year, inaccordance with section 1.414(q)-1T, A-4 of the temporary Income TaxRegulations and Internal Revenue Service Notice 97-45.

 

In determining whether an Employee is a HighlyCompensated Employee for years beginning in 1997, the amendments to Code Section 414(q)stated above are treated as having been in effect for years beginning in 1996.

 

The determination of who is a HighlyCompensated Employee, including the determinations of the number and identityof Employees in the top-paid group, the compensation that is considered, andthe identity of the 5-percent owners, shall be made in accordance with Code Section 414(q)and the regulations thereunder.

 

Hour-of-Service means the following:

 

(a)                                  Eachhour for which an Employee is paid, or entitled to payment, for performingduties for the Employer during the applicable computation period.

 

(b)                                 Eachhour for which an Employee is paid, or entitled to payment, by the Employerbecause of a period of time in which no duties are performed (irrespective ofwhether the employment relationship has terminated) due to vacation, holiday,illness, incapacity (including disability), layoff, jury duty, military duty orleave of absence. Notwithstanding the preceding provisions of this subparagraph(b), no credit will be given to the Employee:

 

(1)                                  formore than 501 Hours-of-Service under this subparagraph (b) because of anysingle continuous period in which the Employee performs no duties (whether ornot such period occurs in a single computation period); or

 

(2)                                  foran Hour-of-Service for which the Employee is directly or indirectly paid, orentitled to payment, because of a period in which no duties are performed ifsuch payment is made or due under a plan maintained solely for the purpose ofcomplying with applicable worker’s or workmen’s compensation, or unemploymentcompensation, or disability insurance laws; or

 

(3)                                  foran Hour-of-Service for a payment which solely reimburses the Employee formedical or medically related expenses incurred by him.

 

For purposes of this subparagraph (b), apayment shall be deemed to be made by, or due from the Employer, regardless ofwhether such payment is made by, or due from the Employer, directly or indirectlythrough, among others, a trust fund or insurer, to which the Employercontributes or

 

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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)                                  Eachhour for which back pay, irrespective of mitigation of damages, is eitherawarded or agreed to by the Employer. The same Hours-of-Service shall not becredited both under subparagraph (a) or subparagraph (b) above (as the case maybe) and under this subparagraph (c). Crediting of Hours-of-Service for back payawarded or agreed to with respect to periods described in subparagraph (b)above will be subject to the limitations set forth in that subparagraph.

 

The crediting of Hours-of-Service above shallbe applied under the rules of paragraphs (b) and (c) of the Department of LaborRegulation 2530.200b-2 (including any interpretations or opinions implementingsuch rules); which rules, by this reference, are specifically incorporated infull within this Plan. The reference to paragraph (b) applies to the specialrule for determining hours of service for reasons other than the performance ofduties such as payments calculated (or not calculated) on the basis of units oftime and the rule against double credit. The reference to paragraph (c) appliesto the crediting of hours of service to computation periods.

 

Hours-of-Service shall be credited foremployment with any other employer required to be aggregated with the Employerunder Code Sections 414(b), (c), (m), or (o) and the regulations thereunder forpurposes of eligibility and vesting. Hours-of-Service shall also be creditedfor any individual who is considered an employee for purposes of this Planpursuant to Code Section 414(n) or (o) and the regulations thereunder.

 

Solely for purposes of determining whether aone-year break in service has occurred for eligibility or vesting purposes,during a Parental Absence an Employee shall be credited with theHours-of-Service which otherwise would normally have been credited to theEmployee but for such absence, or in any case in which such hours cannot bedetermined, eight Hours-of-Service per day of such absence. TheHours-of-Service credited under this paragraph shall be credited in thecomputation period in which the absence begins if the crediting is necessary toprevent a break in service in that period; or in all other cases, in thefollowing computation period.

 

Inactive Participant means a former ActiveParticipant who has an Account. See the INACTIVE PARTICIPANT SECTION of Article 11.

 

Insurer means Principal Life InsuranceCompany and any other insurance company or companies named by the Trustee orPrimary Employer.

 

Investment Fund means the total of Planassets, excluding the guaranteed benefit policy portion of any AnnuityContract. All or a portion of these assets may be held under the TrustAgreement.

 

The Investment Fund shall be valued atcurrent fair market value as of the Valuation Date. The valuation shall takeinto consideration investment earnings credited, expenses charged, paymentsmade, and changes in the values of the assets held in the Investment Fund.

 

The Investment Fund shall be allocated at alltimes to Participants, except as otherwise expressly provided in the Plan. TheAccount of a Participant shall be credited with its share of the gains andlosses of the Investment Fund. That part of a Participant’s Account invested ina funding arrangement

 

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which establishes one or more accounts orinvestment vehicles for such Participant thereunder shall be credited with thegain or loss from such accounts or investment vehicles. The part of a Participant’sAccount which is invested in other funding arrangements shall be credited witha proportionate share of the gain or loss of such investments. The share shallbe determined by multiplying the gain or loss of the investment by the ratio ofthe part of the Participant’s Account invested in such funding arrangement tothe total of the Investment Fund invested in such funding arrangement.

 

Investment Manager means any fiduciary (otherthan a trustee or Named Fiduciary)

 

(a)                                  whohas the power to manage, acquire, or dispose of any assets of the Plan;

 

(b)                                 who(i) is registered as an investment adviser under the Investment Advisers Act of1940; (ii) is not registered as an investment adviser under such Act by reasonof paragraph (1) of section 203A(a) of such Act, is registered as aninvestment adviser under the laws of the state (referred to in such paragraph(1)) in which it maintains its principal office and place of business, and, atthe time it last filed the registration form most recently filed by it withsuch state in order to maintain its registration under the laws of such state,also filed a copy of such form with the Secretary of Labor, (iii) is a bank, asdefined in that Act; or (iv) is an insurance company qualified to performservices described in subparagraph (a) above under the laws of more than onestate; and

 

(c)                                  whohas acknowledged in writing being a fiduciary with respect to the Plan.

 

Late Retirement Date means the first day ofany month which is after a Participant’s Normal Retirement Date and on whichretirement benefits begin. If a Participant continues to work for the Employerafter his Normal Retirement Date, his Late Retirement Date shall be theearliest first day of the month on or after the date he ceases to be anEmployee. An earlier or a later Retirement Date may apply if the Participant soelects. An earlier Retirement Date may apply if the Participant is age 70 1/2.See the WHEN BENEFITS START SECTION of Article V.

 

Leased Employee means any person (other thanan employee of the recipient) who, pursuant to an agreement between therecipient and any other person (“leasing organization”), has performed servicesfor the recipient (or for the recipient and related persons determined inaccordance with Code Section 414(n)(6)) on a substantially full time basisfor a period of at least one year, and such services are performed underprimary direction or control by the recipient. Contributions or benefitsprovided by the leasing organization to a Leased Employee, which areattributable to service performed for the recipient employer, shall be treatedas provided by the recipient employer.

 

A Leased Employee shall not be considered anemployee of the recipient if:

 

(a)                                  suchemployee is covered by a money purchase pension plan providing (i) anonintegrated employer contribution rate of at least 10 percent ofcompensation, as defined in Code Section 415(c)(3), but for yearsbeginning before January 1, 1998, including amounts contributed pursuantto a salary reduction agreement which are excludible from the employee’s grossincome under Code Sections 125, 402(e)(3), 402(h)(1)(B), or 403(b), (ii)immediate participation, and (iii) full and immediate vesting, and

 

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(b)                                 Leased Employees donot constitute more than 20 percent of the recipient’s nonhighly compensatedwork force.

 

Loan Administrator means the person(s) orposition(s) authorized to administer the Participant loan program.

 

The Loan Administrator is Benefits Manager.

 

Matching Contributions means contributionsmade by the Employer to fund this Plan which are contingent on a Participant’sElective Deferral Contributions. See the EMPLOYER CONTRIBUTIONS SECTION ofArticle III.

 

Monthly Date means each Yearly Date and thesame day of each following month during the Plan Year beginning on such YearlyDate.

 

Named Fiduciary means the person or personswho have authority to control and manage the operation and administration ofthe Plan.

 

The Named Fiduciary is the Employer.

 

Nonhighly Compensated Employee means anEmployee of the Employer who is not a Highly Compensated Employee.

 

Nonvested Account means the excess, if any,of a Participant’s Account over his Vested Account. Normal Form means a singlelife annuity with installment refund.

 

Normal Retirement Age means the age at whichthe Participant’s normal retirement benefit becomes nonforfeitable if he is anEmployee. A Participant’s Normal Retirement Age is the older of age 65 or hisage on the date 5 years after the first day of the Plan Year in which his EntryDate occurred.

 

Normal Retirement Date means the earliestfirst day of the month on or after the date the Participant reaches his NormalRetirement Age. Unless otherwise provided in this Plan, a Participant’sretirement benefits shall begin on a Participant’s Normal Retirement Date if hehas ceased to be an Employee on such date and has a Vested Account. Even if theParticipant is an Employee on his Normal Retirement Date, he may choose to havehis retirement benefit begin on such date. An earlier Retirement Date may applyif the Participant is age 70 1/2. See the WHEN BENEFITS START SECTION of Article V.

 

Owner-employee means a Self-employedIndividual who, in the case of a sole proprietorship, owns the entire interestin the unincorporated trade or business for which this Plan is established. Ifthis Plan is established for a partnership, an Owner-employee means aSelf-employed Individual who owns more than 10 percent of either the capitalinterest or profits interest in such partnership.

 

Parental Absence means an Employee’s absencefrom work:

 

(a)                                  by reason ofpregnancy of the Employee,

 

(b)                                 by reason of birth ofa child of the Employee,

 

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(c)                                  byreason of the placement of a child with the Employee in connection withadoption of such child by such Employee, or

 

(d)                                 forpurposes of caring for such child for a period beginning immediately followingsuch birth or placement.

 

Participant means either an ActiveParticipant or an Inactive Participant. Period of Military Duty means, for anEmployee who served as a member of the armed forces of the United States, and

 

(b)                                 whowas reemployed by the Employer at a time when the Employee had a right toreemployment in accordance with seniority rights as protected under Chapter 43of Title 38 of the U. S. Code,

 

the period of time from the date the Employeewas first absent from active work for the Employer because of such militaryduty to the date the Employee was reemployed.

 

Plan means the 401(k) plan of the Employerset forth in this document, including any later amendments to it.

 

Plan Administrator means the person orpersons who administer the Plan. The Plan Administrator is the Employer.

 

Plan Fund means the total of the InvestmentFund and the guaranteed benefit policy portion of any Annuity Contract. TheInvestment Fund shall be valued as stated in its definition. The guaranteedbenefit policy portion of any Annuity Contract shall be determined inaccordance with the terms of the Annuity Contract and, to the extent that suchAnnuity Contract allocates contract values to Participants, allocated toParticipants in accordance with its terms. The total value of all amounts heldunder the Plan Fund shall equal the value of the aggregate Participants’Accounts under the Plan.

 

Plan Year means a period beginning on aYearly Date and ending on the day before the next Yearly Date.

 

Predecessor Employer means a firm of whichthe Employer was once a part (e.g., due to a spinoff or change of corporatestatus) or a firm absorbed by the Employer because of a merger or acquisition(stock or asset, including a division or an operation of such company).

 

Primary Employer means GOVERNMENT TECHNOLOGYSERVICES, INC.

 

Qualified Joint and Survivor Annuity means,for a Participant who has a spouse, an immediate survivorship life annuity withinstallment refund, where the survivorship percentage is 50% and the ContingentAnnuitant is the Participant’s spouse. A former spouse will be treated as thespouse to the extent provided under a qualified domestic relations order asdescribed in Code Section 414(p).

 

The amount of benefit payable under theQualified Joint and Survivor Annuity shall be the amount of benefit which maybe provided by the Participant’s Vested Account.

 

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Qualified Nonelective Contributions meanscontributions made by the Employer to fund this Plan (other than ElectiveDeferral Contributions) which are 100% vested and subject to the distributionrestrictions of Code Section 401(k) when made. See the EMPLOYERCONTRIBUTIONS SECTION of Article III and the WHEN BENEFITS START SECTION ofArticle V.

 

Qualified Preretirement Survivor Annuitymeans a single life annuity with installment refund payable to the survivingspouse of a Participant who dies before his Annuity Starting Date. A formerspouse will be treated as the surviving spouse to the extent provided under aqualified domestic relations order as described in Code Section 414(p).

 

Quarterly Date means each Yearly Date and thethird, sixth, and ninth Monthly Date after each Yearly Date which is within thesame Plan Year.

 

Reentry Date means the date a former ActiveParticipant reenters the Plan. See the ACTIVE PARTICIPANT SECTION of Article 11.

 

Retirement Date means the date a retirementbenefit will begin and is a Participant’s Early, Normal, or Late RetirementDate, as the case may be.

 

Rollover Contributions means the RolloverContributions which are made by an Eligible Employee or an Inactive Participantaccording to the provisions of the ROLLOVER CONTRIBUTIONS SECTION of Article III.

 

Self-employed Individual means, with respectto any Fiscal Year, an individual who has Earned Income for the Fiscal Year (orwho would have Earned Income but for the fact the trade or business for whichthis Plan is established did not have net profits for such Fiscal Year).

 

Totally and Permanently Disabled means that aParticipant is disabled, as a result of sickness or injury, to the extent thathe is prevented from engaging in any substantial gainful activity, and iseligible for and receives a disability benefit under Title II of the FederalSocial Security Act.

 

Trust Agreement means an agreement of trustbetween the Primary Employer and Trustee established for the purpose of holdingand distributing the Trust Fund under the provisions of the Plan. The TrustAgreement may provide for the investment of all or any portion of the TrustFund in the Annuity Contract.

 

Trust Fund means the total funds held underthe Trust Agreement.

 

Trustee means the party or parties named inthe Trust Agreement. The term Trustee as it is used in this Plan is deemed toinclude the plural unless the context clearly indicates the singular is meant.

 

Valuation Date means the date on which thevalue of the assets of the Investment Fund is determined. The value of eachAccount which is maintained under this Plan shall be determined on theValuation Date. In each Plan Year, the Valuation Date shall be the last day ofthe Plan Year. At the discretion of the Plan Administrator, Trustee, or Insurer(whichever applies), assets of the Investment Fund may be valued morefrequently. These dates shall also be Valuation Dates.

 

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Vested Account means the vested part of aParticipant’s Account. The Participant’s Vested Account is determined asfollows.

 

If the Participant’s Vesting Percentage is100%, his Vested Account equals his Account.

 

If the Participant’s Vesting Percentage isless than 100%, his Vested Account equals the sum of (a) and (b) below: 

 

(a)                                  Thepart of the Participant’s Account that results from Employer Contributions madebefore a prior Forfeiture Date and all other Contributions which were 100%vested when made. 

 

(b)                                 Thebalance of the Participant’s Account in excess of the amount in (a) abovemultiplied by his Vesting Percentage. 

 

If the Participant has withdrawn any part ofhis Account resulting from Employer Contributions, other than the vestedEmployer Contributions included in (a) above, the amount determined under thissubparagraph (b) shall be equal toP(AB + D) - D as defined below:

 

                                                ©The Participant’s Vesting Percentage.

 

                                                ABThe balance of the Participant’s Account in excess of the amount in (a) above.

 

D                                       Theamount of the withdrawal resulting from Employer Contributions, other than thevested Employer Contributions included in (a) above.

 

The Participant’s Vested Account isnonforfeitable.

 

Vesting Break in Service means a VestingComputation Period in which an Employee is credited with 500 or fewerHours-of-Service. An Employee incurs a Vesting Break in Service on the last dayof a Vesting Computation Period in which he has a Vesting Break in Service.

 

Vesting Computation Period means aconsecutive 12-month period ending on the last day of each Plan Year, includingcorresponding consecutive 12-month periods before April 1, 1991.

 

Vesting Percentage means the percentage usedto determine the nonforfeitable portion of a Participant’s Account attributableto Employer  Contributions which were not100% vested when made.

 

A Participant’s Vesting Percentage is shownin the following schedule opposite the number of whole years of hisVesting Service.

 

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| **VESTING SERVICE** | ** ** | **VESTING  PERCENTAGE** | ** ** |
|---------------------|------------|-------------------------|------------|
| **(whole years)**   |       |                    |       |
| Less than 1         |       | 0                       |       |
| 1                   |       | 20                      |       |
| 2                   |       | 40                      |       |
| 3                   |       | 60                      |       |
| 4                   |       | 80                      |       |
| 5 or more           |       | 100                     |       |

 

The Vesting Percentage for a Participant whois an Employee on or after the date he reaches Normal Retirement Age or EarlyRetirement Age shall be 100%. The Vesting Percentage for a Participant who isan Employee on the date he becomes Totally and Permanently Disabled or diesshall be 100%.

 

If the schedule used to determine aParticipant’s Vesting Percentage is changed, the new schedule shall notapply to a Participant unless he is credited with an Hour-of-Service on orafter the date of the change and the Participant’s nonforfeitable percentage onthe day before the date of the change is not reduced under this Plan. Theamendment provisions of the AMENDMENTS SECTION of Article X regardingchanges in the computation of the Vesting Percentage shall apply.

 

Vesting Service means one year of service foreach Vesting Computation Period in which an Employee is credited with at least1,000 Hours-of-Service.

 

However, Vesting Service is modified asfollows: Period of Military Duty included:

 

A Period of Military Duty shall be includedas service with the Employer to the extent it has not already been credited.For purposes of crediting Hours-of-Service during the Period of Military Duty,an Hour-of-Service shall be credited (without regard to the 501 Hour-of-Servicelimitation) for each hour an Employee would normally have been scheduled towork for the Employer during such period.

 

Controlled Group service included:

 

An Employee’s service with a member firm of aControlled Group while both that firm and the Employer were members of theControlled Group shall be included as service with the Employer.

 

Yearly Date means April 1, 1991, andeach following January 1.

 

Years of Service means an Employee’s VestingService disregarding any modifications which exclude service.

 

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ARTICLE II

 

PARTICIPATION

 

SECTION 2.01—ACTIVEPARTICIPANT.

 

(a)                                  AnEmployee shall first become an Active Participant (begin active participationin the Plan) on the earliest Monthly Date on which he is an Eligible Employeeand has met the eligibility requirement set forth below. This date is his EntryDate.

 

(1)                                  He isage 21 or older.

 

Each Employee who was an Active Participantunder the Plan on December 31, 1996, shall continue to be an ActiveParticipant if he is still an Eligible Employee on January 1, 1997, andhis Entry Date shall not change.

 

If a person has been an Eligible Employee whohas met all of the eligibility requirements above, but is not an EligibleEmployee on the date which would have been his Entry Date, he shall become anActive Participant on the date he again becomes an Eligible Employee. This dateis his Entry Date.

 

In the event an Employee who is not artEligible Employee becomes an Eligible Employee, such Eligible Employee shallbecome an Active Participant immediately if such Eligible Employee hassatisfied the eligibility requirements above and would have otherwisepreviously become an Active Participant had he met the definition of EligibleEmployee. This date is his Entry Date.

 

(b)                                 AnInactive Participant shall again become an Active Participant (resume activeparticipation in the Plan) on the date he again performs an Hour-of-Service asan Eligible Employee. This date is his Reentry Date.

 

Upon againbecoming an Active Participant, he shall cease to be an Inactive Participant.

 

(c)                                  Aformer Participant shall again become an Active Participant (resume activeparticipation in the Plan) on the date he again performs an Hour-of-Service asan Eligible Employee. This date is his Reentry Date.

 

There shall be no duplication of benefits fora Participant under this Plan because of more than one period as an ActiveParticipant.

 

SECTION 2.02—INACTIVEPARTICIPANT.

 

An Active Participant shall become anInactive Participant (stop accruing benefits under the Plan) on the earlier ofthe following:

 

(a)                                  the date theParticipant ceases to be an Eligible Employee, or

 

(b)                                 the effective date ofcomplete termination of the Plan under Article VIII.

 

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An Employee or former Employee who was anInactive Participant under the Plan on December 31, 1996, shall continueto be an Inactive Participant on January 1, 1997. Eligibility for anybenefits payable to the Participant or on his behalf and the amount of thebenefits shall be determined according to the provisions of the prior document,unless otherwise stated in this document.

 

SECTION 2.03—CESSATIONOF PARTICIPATION.

 

A Participant shall cease to be a Participanton the date he is no longer an Eligible Employee and his Account is zero.

 

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ARTICLE III

 

CONTRIBUTIONS

 

SECTION 3.01—EMPLOYERCONTRIBUTIONS.

 

Employer Contributions shall be made withoutregard to current or accumulated net income, earnings or profits of theEmployer. Notwithstanding the foregoing, the Plan shall continue to be designedto qualify as a profit sharing plan for purposes of Code Sections 401(a), 402,412, and 417. Such Contributions shall be equal to the Employer Contributionsas described below:

 

(a)                                  Theamount of each Elective Deferral Contribution for a Participant shall be equalto a portion of Compensation as specified in the elective deferral agreement.An Employee who is eligible to participate in the Plan may file an electivedeferral agreement with the Employer. The Participant shall modify or terminatethe elective deferral agreement by filing a new elective deferral agreement. Theelective deferral agreement may not be made retroactively and shall remain ineffect until modified or terminated.

 

The elective deferral agreement to start ormodify Elective Deferral Contributions shall be effective on the first day ofthe first pay period following the pay period in which the Participant’s EntryDate (Reentry Date, if applicable) or any following Quarterly Date occurs. Theelective deferral agreement must be entered into on or before the date it iseffective.

 

The elective deferral agreement to stopElective Deferral Contributions may be entered into on any date. Such electivedeferral agreement shall be effective on the first day of the pay periodfollowing the pay period in which the elective deferral agreement is enteredinto.

 

Elective Deferral Contributions must be awhole percentage of Compensation and cannot be less than 1% nor more than 15%of Compensation for the pay period.

 

Elective Deferral Contributions are fully(100%) vested and nonforfeitable.

 

(b)                                 TheEmployer may make discretionary Matching Contributions. The percentage ofElective Deferral Contributions matched, if any, shall be a percentage asdetermined by the Employer. If the Employer makes a Matching Contribution, thepercentage of Elective Deferral Contributions matched shall not be more than100%.

 

Matching Contributions are calculated basedon Elective Deferral Contributions and Compensation for the Plan Year. MatchingContributions shall be made for all persons who meet the allocationrequirements of the ALLOCATION SECTION of this article.

 

Any percentage determined by the Employershall apply to all eligible persons for the entire Plan Year.

 

Matching Contributions are fully (100%)vested and nonforfeitable.

 

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(c)                                  Qualified NonelectiveContributions may be made for each Plan Year in an amount determined by theEmployer.

 

Qualified Nonelective Contributions are 100%vested and subject to the distribution restrictions of Code Section 401(k) whenmade.

 

(d)                                 DiscretionaryContributions may be made for each Plan Year in an amount determined by theEmployer.

 

Discretionary Contributions are subject tothe Vesting Percentage.

 

No Participant shall be permitted to haveElective Deferral Contributions, as defined in the EXCESS AMOUNTS SECTION ofthis article, made under this Plan, or any other qualified plan maintained bythe Employer, during any taxable year, in excess of the dollar limitationcontained in Code Section 402(g) in effect at the beginning of suchtaxable year.

 

An elective deferral agreement (or changethereto) must be made in such manner and in accordance with such rules as theEmployer may prescribe (including by means of voice response or otherelectronic system under circumstances the Employer permits) and may not be maderetroactively,

 

Employer Contributions are allocatedaccording to the provisions of the ALLOCATION SECTION of this article.

 

A portion of the Plan assets resulting fromEmployer Contributions (but not more than the original amount of thoseContributions) may be returned if the Employer Contributions are made becauseof a mistake of fact or are more than the amount deductible under Code Section 404(excluding any amount which is not deductible because the Plan isdisqualified). The amount involved must be returned to the Employer within oneyear after the date the Employer Contributions are made by mistake of fact orthe date the deduction is disallowed, whichever applies. Except as providedunder this paragraph and Article VIII, the assets of the Plan shall neverbe used for the benefit of the Employer and are held for the exclusive purposeof providing benefits to Participants and their Beneficiaries and for defrayingreasonable expenses of administering the Plan.

 

SECTION 3.01A—ROLLOVERCONTRIBUTIONS.

 

A Rollover Contribution may be made by anEligible Employee or an Inactive Participant if the following conditions aremet:

 

(a)                                  TheContribution is of amounts distributed from a plan that satisfies therequirements of Code Section 401(a) or from a “conduit” individualretirement account described in Code Section 408(d)(3)(A). In the case ofan Inactive Participant, the Contribution must be of an amount distributed fromanother plan of the Employer, or a plan of a Controlled Group member, thatsatisfies the requirements of Code Section 401(a).

 

(b)                                 TheContribution is of amounts that the Code permits to be transferred to a planthat meets the requirements of Code Section 401(a).

 

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(c)                                  TheContribution is made in the form of a direct rollover under Code Section 401(a)(31)or is a rollover made under 402(c) or 408(d)(3)(A) within 60 days after theEligible Employee or Inactive Participant receives the distribution.

 

(d)                                 TheEligible Employee or Inactive Participant furnishes evidence satisfactory tothe Plan Administrator that the proposed rollover meets conditions (a), (b),and (c) above-

 

A RolloverContribution shall be allowed in cash only and must be made according toprocedures set up by the Plan Administrator.

 

If the EligibleEmployee is not an Active Participant when the Rollover Contribution is made,he shall be deemed to be an Active Participant only for the purpose ofinvestment and distribution of the Rollover Contribution. Employer Contributionsshall not be made for or allocated to the Eligible Employee until the time hemeets all of the requirements to become an Active Participant.

 

RolloverContributions made by an Eligible Employee or an Inactive Participant shall becredited to his Account. The part of the Participant’s Account resulting fromRollover Contributions is fully (100%) vested and nonforfeitable at all times.A separate accounting record shall be maintained for that part of his RolloverContributions consisting of voluntary contributions which were deducted fromthe Participant’s gross income for Federal income tax purposes.

 

SECTION 3.02—FORFEITURES.

 

The NonvestedAccount of a Participant shall be forfeited as of the earlier of the following:

 

(a)                                  thedate the Participant dies (if prior to such date he had ceased to be anEmployee), or

 

(b)                                 theParticipant’s Forfeiture Date.

 

All or a portion of a Participant’s Nonvested Account shall beforfeited before such earlier date if, after he ceases to be an Employee, hereceives, or is deemed to receive, a distribution of his entire Vested Accountor a distribution of his Vested Account derived from Employer Contributionswhich were not 100% vested when made, under the RETIREMENT BENEFITS SECTION ofArticle V, the VESTED BENEFITS SECTION of Article V, or theSMALL AMOUNTS SECTION of Article X. The forfeiture shall occur as ofthe date the Participant receives, or is deemed to receive, the distribution.If a Participant receives, or is deemed to receive, his entire Vested Account, hisentire Nonvested Account shall be forfeited. If a Participant receives adistribution of his Vested Account from Employer Contributions which were not100% vested when made, but less than his entire Vested Account from suchContributions, the amount to be forfeited shall be determined by multiplyinghis Nonvested Account from such Contributions by a fraction. The numerator ofthe fraction is the amount of the distribution derived from EmployerContributions which were not 100% vested when made and the denominator of thefraction is his entire Vested Account derived from such Contributions on thedate of distribution.

 

A Forfeitureshall also occur as provided in the EXCESS AMOUNTS SECTION of thisarticle.

 

Forfeituresshall be determined at least once during each Plan Year. Forfeitures may firstbe used to pay administrative expenses. Forfeitures of Matching Contributionswhich relate to excess amounts as provided in the EXCESS AMOUNTS SECTION ofthis article, which have not been used to pay administrative

 

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expenses, shall be applied to reduce the earliest EmployerContributions made after the Forfeitures are determined. Any other Forfeitureswhich have not been used to pay administrative expenses shall be applied toreduce the earliest Employer Contributions made after the Forfeitures aredetermined. Upon their application to reduce Employer Contributions,Forfeitures shall be deemed to be Employer Contributions.

 

If aParticipant again becomes an Eligible Employee after receiving a distributionwhich caused all or a portion of his Nonvested Account to be forfeited, heshall have the right to repay to the Plan the entire amount of the distributionhe received (excluding any amount of such distribution resulting fromContributions which were 100% vested when made). The repayment must be made ina single sum (repayment in installments is not permitted) before the earlier ofthe date five years after the date he again becomes an Eligible Employee or theend of the first period of five consecutive Vesting Breaks in Service whichbegin after the date of the distribution.

 

If theParticipant makes the repayment above, the Plan Administrator shall restore tohis Account an amount equal to his Nonvested Account which was forfeited on thedate of distribution, unadjusted for any investment gains or losses. If noamount is to be repaid because the Participant was deemed to have received adistribution, or only received a distribution of Contributions which were 100% vestedwhen made, and he again performs an Hour-of-Service as an Eligible Employeewithin the repayment period, the Plan Administrator shall restore theParticipant’s Account as if he had made a required repayment on the date heperformed such Hour-of-Service. Restoration of the Participant’s Account shallinclude restoration of all Code Section 411(d)(6) protected benefits withrespect to that restored Account, according to applicable Treasury regulations.Provided, however, the Plan Administrator shall not restore the NonvestedAccount if (i) a Forfeiture Date has occurred after the date of thedistribution and on or before the date’of repayment and (ii) that Forfeiture.Date would result in a complete forfeiture of the amount the Plan Administratorwould otherwise restore.

 

The PlanAdministrator shall restore the Participant’s Account by the close of the PlanYear following the Plan Year in which repayment is made. Permissible sourcesfor the restoration of the Participant’s Account are Forfeitures or specialEmployer Contributions. Such special Employer Contributions shall be madewithout regard to profits. The repaid and restored amounts are not included inthe Participant’s Annual Additions, as defined in the CONTRIBUTION LIMITATION SECTION ofthis article.

 

SECTION 3.03—ALLOCATION.

 

A person meets the allocation requirements ofthis section if he is an Active Participant on the last day of the PlanYear and has at least 1,000 Hours-of-Service during the latest AccrualComputation Period ending on or before that date.

 

Elective Deferral Contributions shall beallocated to Participants for whom such Contributions are made under theEMPLOYER CONTRIBUTIONS SECTION of this article. Such Contributions shallbe allocated when made and credited to the Participant’s Account.

 

MatchingContributions shall be allocated to the persons for whom such Contributions aremade under the EMPLOYER CONTRIBUTIONS SECTION of this article. SuchContributions shall be allocated as of the last day of the Plan Year and shallbe credited to the person’s Account.

 

QualifiedNonelective Contributions shall be allocated as of the last day of the PlanYear to each person who was an Active Participant on the last day of the PlanYear. Such Qualified Nonelective

 

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Contributions shall be allocated only to Nonhighly CompensatedEmployees. The amount allocated to such person for the Plan Year shall be equalto such Qualified Nonelective Contributions multiplied by the ratio of suchperson’s Annual Compensation for the Plan Year to the total Annual Compensationof all such persons. This amount shall be credited to the person’s Account.

 

DiscretionaryContributions shall be allocated as of the last day of the Plan Year usingAnnual Compensation for the Plan Year. The amount allocated shall be determinedas follows:

 

STEP ONE: Theallocation in this step one shall be made to each person meeting the allocationrequirements of this section and each person who is entitled to a minimumcontribution under the MODIFICATION OF CONTRIBUTIONS SECTION of Article XI.Each such person’s allocation shall be an amount equal to the DiscretionaryContributions multiplied by the ratio of such person’s Annual Compensation tothe total Annual Compensation of all such persons. Such amount shall not exceed3% of such person’s Annual Compensation. The allocation for any person who doesnot meet the allocation requirements of this section shall be limited tothe amount necessary to fund the minimum contribution.

 

STEP TWO: Theallocation in this step two shall be made to each person meeting the allocationrequirements of this section. Each such person’s allocation shall be equal toany amount remaining after the allocation in step one multiplied by the ratioof such person’s Annual Compensation to the total Annual Compensation of allsuch persons.

 

This amount shall becredited to the person’s Account.

 

If LeasedEmployees are Eligible Employees, in determining the amount of EmployerContributions allocated to a person who is a Leased Employee, contributionsprovided by the leasing organization which are attributable to services suchLeased Employee performs for the Employer shall be treated as provided by theEmployer. Those contributions shall not be duplicated under this Plan.

 

SECTION 3.04—CONTRIBUTIONLIMITATION.

 

(a)                                  Definitions.For the purpose of determining the contribution limitation set forth in thissection, the following terms are defined. 

 

Annual Additions means the sum of thefollowing amounts credited to a Participant’s account for the Limitation Year:

 

(1)                                  employercontributions;

 

(2)                                  employeecontributions; and

 

(3)                                  forfeitures.

 

Annual Additions to a defined contributionplan shall also include the following:

 

(4)                                  amountsallocated, after March 31, 1984, to an individual medical account, as definedin Code Section 415(l)(2), which are part of a pension or annuityplan maintained by the Employer,

 

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(5)                                  amountsderived from contributions paid or accrued after December 31, 1985, intaxable years ending after such date, which are attributable to post-retirementmedical benefits, allocated to the separate account of a key employee, asdefined in Code Section 419A(d)(3), under a welfare benefit fund, asdefined in Code Section 419(e), maintained by the Employer; and

 

(6)                                  allocationsunder a simplified employee pension.

 

For this purpose, any Excess Amount appliedunder (e) below in the Limitation Year to reduce Employer Contributions shallbe considered Annual Additions for such Limitation Year.

 

Compensation means wages within the meaningof Code Section 3401 (a) for the purposes of income tax withholding at thesource but determined without regard to any rules that limit the remunerationincluded in wages based on the nature or location of employment or the servicesperformed (such as the exception for agricultural labor in Code Section 3401(a)(2)).

 

For any Self-employed Individual,Compensation shall mean Earned Income.

 

For purposes of applying the limitations of thissection, Compensation for a Limitation Year is the Compensation actually paidor made available in gross income during such Limitation Year.

 

For Limitation Years beginning after December 31,1997, for purposes of applying the limitations of this section, Compensationpaid or made available during such Limitation Year shall include any electivedeferral (as defined in Code Section 402(g)(3)), and any amount which iscontributed or deferred by the Employer at the election of the Employee andwhich is not includible in the gross income of the Employee by reason of Code Section 125,132(f)(4), or 457.

 

Defined Benefit Plan Fraction means afraction, the numerator of which is the sum of the Participant’s ProjectedAnnual Benefits under all the defined benefit plans (whether or not terminated)maintained by the Employer, and the denominator of which is the lesser of (i)125 percent of the dollar limitation determined for the Limitation Year underCode Sections 415(b)(1 )(A) and (d) or (ii) 140 percent of the Highest AverageCompensation, including any adjustments under Code Section 415(b)(5).

 

Notwithstanding the above, if the Participantwas a participant as of the first day of the first Limitation Year beginningafter December 31, 1986, in one or more defined benefit plans maintainedby the Employer which were in existence on May 6, 1986, the denominator of thisfraction will not be less than 125 percent of the sum of the annual benefitsunder such plans which the Participant had accrued as of the close of the lastLimitation Year beginning before January 1, 1987, disregarding any changesin the terms and conditions of the plan after May 5, 1986. The precedingsentence applies only if the defined benefit plans individually and in theaggregate satisfied the requirements of Code Section 415 for allLimitation Years beginning before January 1, 1987.

 

Defined Contribution Dollar Limitation means,for Limitation Years beginning after December 31, 1994, $30,000, asadjusted under Code Section 415(d).

 

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Defined Contribution Plan Fraction means afraction, the numerator of which is the sum of the Annual Additions to theParticipant’s account under all the defined contribution plans (whether or notterminated) maintained by the Employer for the current and all prior LimitationYears (including the Annual Additions attributable to the Participant’snondeductible employee contributions to all defined benefit plans, whether ornot terminated, maintained by the Employer, and the Annual Additionsattributable to all welfare benefit funds, individual medical accounts, andsimplified employee pensions, maintained by the Employer), and the denominatorof which is the sum of the maximum aggregated amounts for the current and allprior Limitation Years of service with the Employer (regardless of whether adefined contribution plan was maintained by the Employer). The maximumaggregate amount in any Limitation Year is the lesser of (i) 125 percent of thedollar limitation under Code Section 415(c)(1)(A) after adjustment underCode Section 415(d) or (ii) 35 percent of the Participant’s Compensationfor such year.

 

If the Employee was a participant as of theend of the first day of the first Limitation Year beginning after December 31,1986, in one or more defined contribution plans maintained by the Employerwhich were in existence on May 6, 1986, the numerator of this fraction will beadjusted if the sum of this fraction and the Defined Benefit Fraction wouldotherwise exceed 1.0 under the terms of this Plan. Under the adjustment, anamount equal to the product of (i) the excess of the sum of the fractions over1.0 times (ii) the denominator of this fraction, will be permanently subtractedfrom the numerator of this fraction. The adjustment is calculated using thefractions as they would be computed as of the end of the last Limitation Yearbeginning before January 1, 1987, and disregarding any changes in theterms and conditions of the plan made after May 5, 1986, but using the Code Section 415limitation applicable to the first Limitation Year beginning on or after January 1,1987.

 

The Annual Addition for any Limitation Yearbeginning before January 1, 1987, shall not be recomputed to treat allemployee contributions as Annual Additions.

 

Employer means the employer that adopts thisPlan, and all members of a controlled group of corporations (as defined in CodeSection 414(b) as modified by Code Section 415(h)), all commonlycontrolled trades or businesses (as defined in Code Section 415(c) asmodified by Code Section 415(h)) or affiliated service groups (as definedin Code Section 414(m)) of which the adopting employer is a part, and anyother entity required to be aggregated with the employer pursuant toregulations under Code Section 414(0).

 

Excess Amount means the excess of theParticipant’s Annual Additions for the Limitation Year over the MaximumPermissible Amount.

 

Highest Average Compensation means theaverage Compensation for the three consecutive Limitation Years while he was anEmployee (actual consecutive Limitation Years while he was an Employee, ifemployed less than three years) that produces the highest average.

 

Limitation Year means the consecutive12-month period ending on each December 31. It the Limitation Year isother than the calendar year, execution of this Plan (or any amendment to thisPlan changing the Limitation Year) constitutes the Employer’s adoption of awritten resolution electing the Limitation Year. If the Limitation Year isamended to a different consecutive 12-month period, the new Limitation Yearmust begin on a date within the Limitation Year in which the amendment is made.

 

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Maximum Permissible Amount means the maximumAnnual Addition that may be contributed or allocated to a Participant’s Accountunder the Plan for any Limitation Year. This amount shall not exceed the lesserof:

 

(1)                                  TheDefined Contribution Dollar Limitation, or

 

(2)                                  25percent of the Participant’s Compensation for the Limitation Year.

 

The compensation limitation referred to in (2)shall not apply to any contribution for medical benefits (within the meaning ofCode Section 401(h) or 419A(f)(2)) which is otherwise treated as an AnnualAddition under Code Section 415(l)(1) or 419A(d)(2).

 

If a short Limitation Year is created because ofan amendment changing the Limitation Year to a different consecutive 12-monthperiod, the Maximum Permissible Amount will not exceed the Defined ContributionDollar Limitation multiplied by the following fraction:

 

Number of months in the shortLimitation Year

12

 

Projected Annual Benefit means the annualretirement benefit (adjusted to an actuarially equivalent straight life annuityif such benefit is expressed in a form other than a straight life annuity orqualified joint and survivor annuity) to which the Participant would beentitled under the terms of the plan assuming:

 

(1)                                  theParticipant will continue employment until normal retirement age under the plan(or current age, if later), and

 

(2)                                  theParticipant’s Compensation for the current Limitation Year and all otherrelevant factors used to determine benefits under the Plan will remain constantfor all future Limitation Years.

 

(b)                                 Ifthe Participant does not participate in, and has never participated in, anotherqualified plan maintained by the Employer or a welfare benefit fund, as definedin Code Section 419(e), maintained by the Employer, or an individualmedical account, as defined in Code Section 415(1)(2), maintained by theEmployer, or a simplified employee pension, as defined in Code Section 408(k),maintained by the Employer, which provides an Annual Addition, the amount ofAnnual Additions which may be credited to the Participant’s Account for anyLimitation Year shall not exceed the lesser of the Maximum Permissible Amountor any other limitation contained in this Plan. If the Employer Contributionthat would otherwise be contributed or allocated to the Participant’s Accountwould cause the Annual Additions for the Limitation Year to exceed the MaximumPermissible Amount, the amount contributed or allocated shall be reduced sothat the Annual Additions for the Limitation Year will equal the MaximumPermissible Amount.

 

(c)                                  Priorto determining the Participant’s actual Compensation for the Limitation Year,the Employer may determine the Maximum Permissible Amount for a Participant onthe basis of a reasonable estimation of the Participant’s Compensation for theLimitation Year, uniformly determined for all Participants similarly situated.

 

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(d)                                 Assoon as is administratively feasible after the end of the Limitation Year, theMaximum Permissible Amount for the Limitation Year will be determined on thebasis of the Participant’s actual Compensation for the Limitation Year.

 

(e)                                  Ifa reasonable error in estimating a Participant’s Compensation for theLimitation Year, a reasonable error in determining the amount of electivedeferrals (within the meaning of Code Section 402(g)(3)) that may be madewith respect to any individual under the limits of Code Section 415, orunder other facts and circumstances allowed by the Internal Revenue Service,there is an Excess Amount, the excess will be disposed of as follows:

 

(1)                                  AnyElective Deferral Contributions (plus attributable earnings), to the extentthey would reduce the Excess Amount, will be distributed to the Participant.Concurrently with the distribution of such Elective Deferral Contributions, anyMatching Contributions which relate to any Elective Deferral Contributionsdistributed in the preceding sentence, to the extent such application wouldreduce the Excess Amount, will be applied as provided in (2) or (3) below:

 

(2)                                  Ifafter the application of (1) above an Excess Amount still exists, and theParticipant is covered by the Plan at the end of the Limitation Year, theExcess Amount in the Participant’s Account will be used to reduce EmployerContributions for such Participant in the next Limitation Year, and eachsucceeding Limitation Year if necessary.

 

(3)                                  Ifafter the application of (1) above an Excess Amount still exists, and theParticipant is not covered by the Plan at the end of the Limitation Year, theExcess Amount will be held unallocated in a suspense account. The suspenseaccount will be applied to reduce future Employer Contributions for allremaining Participants in the next Limitation Year, and each succeedingLimitation Year if necessary.

 

(4)                                  Ifa suspense account is in existence at any time during a Limitation Yearpursuant to this (e), it will participate in the allocation of investment gainsor losses. If a suspense account is in existence at any time during aparticular Limitation Year, all amounts in the suspense account must beallocated and reallocated to Participant’s Accounts before any EmployerContributions may be made to the Plan for that Limitation Year. Excess Amountsheld in a suspense account may not be distributed to Participants or formerParticipants.

 

(f)                                    This(f) applies if, in addition to this Plan, the Participant is covered underanother qualified defined contribution plan maintained by the Employer, awelfare benefit fund maintained by the Employer, an individual medical accountmaintained by the Employer, or a simplified employee pension maintained by theEmployer which provides an Annual Addition during any Limitation Year. Theaggregate Annual Additions under all such qualified defined contribution plans,welfare benefit funds, individual medical accounts, and simplified employeepensions for the Limitation Year will not exceed the Maximum PermissibleAmount. Any reduction necessary shall be made first to the profit sharingplans, then to all other such qualified defined contribution plans and welfarebenefit funds, individual medical accounts, and simplified employee pensionsand, if necessary, by reducing first those that were most recently allocated.Simplified employee pensions shall be deemed to be allocated first, followed bywelfare benefit funds and individual medical accounts. However, electivedeferral contributions shall be the last

 

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contributions reduced before the simplifiedemployee pension, welfare benefit fund, or individual medical account isreduced.

 

(g)                                 Ifthe Employer maintains, or at any time maintained, a qualified defined benefitplan covering any Participant in this Plan, the sum of the Participant’sDefined Benefit Plan Fraction and Defined Contribution Plan Fraction will notexceed 1.0 in any Limitation Year. The Projected Annual Benefit shall belimited first. If the Participant’s annual benefit(s) equal his ProjectedAnnual Benefit, as limited, then Annual Additions to the defined contributionplan(s) shall be limited to the extent needed to reduce the sum to 1.0 in thesame manner in which the Annual Additions are limited to meet the MaximumPermissible Amount. This subparagraph shall cease to apply effective as of thefirst Limitation Year beginning on or after January 1, 2000.

 

SECTION 3.05—EXCESSAMOUNTS.

 

(a)                                  Definitions.For the purposes of this section, the following terms are defined:

 

ACP means the average (expressed as apercentage) of the Contribution Percentages of the Eligible Participants in agroup.

 

APP means the average (expressed as apercentage) of the Deferral Percentages of the Eligible Participants in agroup.

 

Aggregate Limit means the greater of:

 

(1)                                  Thesum of:

 

(i)            125percent of the greater of the ADP of the Nonhighly Compensated Employees forthe prior Plan Year or the ACP of the Nonhighly Compensated Employees under theplan subject to Code Section 401(m) for the Plan Year beginning with orwithin the prior Plan Year of the cash or deferred arrangement, and

 

(ii)           thelesser of 200 percent or 2 percent plus the lesser of such ADP or ACP.

 

(2)                                  Thesum of:

 

(i)            125percent of the lesser of the ADP of the Nonhighly Compensated Employees for theprior Plan Year or the ACP of the Nonhighly Compensated Employees under theplan subject to Code Section 401(m) for the Plan Year beginning with orwithin the prior Plan Year of the cash or deferred arrangement, and

 

(ii)           thelesser of 200 percent or 2 percent plus the greater of such ADP or ACP.

 

If the Employer has elected to use thecurrent testing method, then, in calculating the Aggregate Limit for aparticular Plan Year, the Nonhighly Compensated Employees’ ADP and ACP for thatPlan Year, instead of the prior Plan Year, is used.

 

Contribution Percentage means the ratio(expressed as a percentage) of the Eligible Participant’s ContributionPercentage Amounts to the Eligible Participant’s Compensation for the Plan Year

 

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(whether or not the Eligible Participant wasan Eligible Participant for the entire Plan Year). For an Eligible Participantfor whom such Contribution Percentage Amounts for the Plan Year are zero, thepercentage is zero.

 

Contribution Percentage Amounts means the sumof the Participaht Contributions and Matching Contributions (that are notQualified Matching Contributions taken into account for purposes of the ADPTest) made under the Plan on behalf of the Eligible Participant for the PlanYear. Such Contribution Percentage Amounts shall not include MatchingContributions that are forfeited either to correct Excess AggregateContributions or because the Contributions to which they relate are ExcessElective Deferrals, Excess Contributions, or Excess Aggregate Contributions.Under such rules as the Secretary of the Treasury shall prescribe, indetermining the Contribution Percentage the Employer may elect to includeQualified Nonelective Contributions under this Plan which were not used incomputing the Deferral Percentage. The Employer may also elect to use ElectiveDeferral Contributions in computing the Contribution Percentage so long as theADP Test is met before the Elective Deferral Contributions are used in the ACPTest and continues to be met following the exclusion of those Elective DeferralContributions that are used to meet the ACP Test.

 

Deferral Percentage means the ratio(expressed as a percentage) of Elective Deferral Contributions under this Planon behalf of the Eligible Participant for the Plan Year to the EligibleParticipant’s Compensation for the Plan Year (whether or not the EligibleParticipant was an Eligible Participant for the entire Plan Year). The ElectiveDeferral Contributions used to determine the Deferral Percentage shall includeExcess Elective Deferrals (other than Excess Elective Deferrals of NonhighlyCompensated Employees that arise solely from Elective Deferral Contributionsmade under this Plan or any other plans of the Employer or a Controlled Groupmember), but shall exclude Elective Deferral Contributions that are used incomputing the Contribution Percentage (provided the ADP Test is satisfied bothwith and without exclusion of these Elective Deferral Contributions). Undersuch rules as the Secretary of the Treasury shall prescribe, the Employer mayelect to include Qualified Nonelective Contributions and Qualified MatchingContributions under this Plan in computing the Deferral Percentage. For an EligibleParticipant for whom such contributions on his behalf for the Plan Year arezero, the percentage is zero.

 

Elective Deferral Contributions means anyemployer contributions made to a plan at the election of a participant, in lieuof cash compensation, and shall include contributions made pursuant to a salaryreduction agreement or other deferral mechanism. With-respect—to—any taxableyear, a participant’s Elective Deferral Contributions are the sum of allemployer contributions made on behalf of such participant pursuant to anelection to defer under any qualified cash or deferred arrangement described inCode Section 401(k), any salary reduction simplified employee pension plandescribed in Code Section 408(k)(6), any SIMPLE IRA plan described in CodeSection 408(p), any eligible deferred compensation plan under Code Section 457,any plan described under Code Section 501 (c)(18), and any employercontributions made on behalf of a participant for the purchase of an annuitycontract under Code Section 403(b) pursuant to a salary reductionagreement. Elective Deferral Contributions shall not include any deferralsproperly distributed as excess annual additions.

 

Eligible Participant means, for purposes ofdetermining the Deferral Percentage, any Employee who is otherwise entitled tomake Elective Deferral Contributions under the terms of the Plan for the PlanYear. Eligible Participant means, for purposes of determining the Contribution

 

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Percentage, any Employee who is eligible (i)to make a Participant Contribution or an Elective Deferral Contribution (if theEmployer takes such contributions into account in the calculation of theContribution Percentage), or (ii) to receive a Matching Contribution (includingforfeitures) or a Qualified Matching Contribution. If a ParticipantContribution is required as a condition of participation in the Plan, anyEmployee who would be a Participant in the Plan if such Employee made such acontribution shall be treated as an Eligible Participant on behalf of whom noParticipant Contributions are made.

 

Excess Aggregate Contributions means, withrespect to any Plan Year, the excess of:

 

(1)           Theaggregate Contribution Percentage Amounts taken into account in computing thenumerator of the Contribution Percentage actually made on behalf of HighlyCompensated Employees for such Plan Year, over

 

(2)           Themaximum Contribution Percentage Amounts permitted by the ACP Test (determinedby hypothetically reducing contributions made on behalf of Highly CompensatedEmployees in order of their Contribution Percentages beginning with the highestof such percentages).

 

Such determination shall be made after firstdetermining Excess Elective Deferrals and then determining ExcessContributions.

 

Excess Contributions means, with respect toany Plan Year, the excess of:

 

(1)           Theaggregate amount of employer contributions actually taken into account incomputing the Deferral Percentage of Highly Compensated Employees for such PlanYear, over

 

(2)           Themaximum amount of such contributions permitted by the ADP Test (determined byhypothetically reducing contributions made on behalf of Highly CompensatedEmployees in the order of the Deferral Percentages, beginning with the highestof such percentages).

 

Such determination shall be made after firstdetermining Excess Elective Deferrals.

 

Excess Elective Deferrals means thoseElective Deferral Contributions that are includible in a Participant’s grossincome under Code Section 402(g) to the extent such Participant’s ElectiveDeferral Contributions for a taxable year exceed the dollarlimitation-under—such Code section. Excess Elective Deferrals shall be treatedas Annual Additions, as defined in the CONTRIBUTION LIMITATION SECTION of thisarticle, under the Plan, unless such amounts are distributed no later than thefirst April 15 following the close of the Participant’s taxable year.

 

Matching Contributions means employercontributions made to this or any other defined contribution plan, or to acontract described in Code Section 403(b), on behalf of a participant onaccount of a Participant Contribution made by such participant, or on accountof a participant’s Elective Deferral Contributions, under a plan maintained bythe Employer or a Controlled Group member.

 

Participant Contributions means contributionsmade to the plan by or on behalf of a participant that are included in theparticipant’s gross income in the year in which made and that are maintainedunder a separate account to which the earnings and losses are allocated.

 

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Qualified Matching Contributions meansMatching Contributions which are subject to the distribution andnonforfeitability requirements under Code Section 401 (k) when made.

 

Qualified Nonelective Contributions means anyemployer contributions (other than Matching Contributions) which an employeemay not elect to have paid to him in cash instead of being contributed to theplan and which are subject to the distribution and nonforfeitabilityrequirements under Code Section 401 (k) when made.

 

(b)                                 ExcessElective Deferrals. A Participant may assign to this Plan any Excess ElectiveDeferrals made during a taxable year of the Participant by notifying the PlanAdministrator in writing on or before the first following March 1 of theamount of the Excess Elective Deferrals to be assigned to the Plan. AParticipant is deemed to notify the Plan Administrator of any Excess ElectiveDeferrals that arise by taking into account only those Elective DeferralContributions made to this Plan and any other plan of the Employer or aControlled Group member. The Participant’s claim for Excess Elective Deferralsshall be accompanied by the Participant’s written statement that if suchamounts are not distributed, such Excess Elective Deferrals will exceed thelimit imposed on the Participant by Code Section 402(g) for the year inwhich the deferral occurred. The Excess Elective Deferrals assigned to thisPlan cannot exceed the Elective Deferral Contributions allocated under thisPlan for such taxable year.

 

Notwithstanding any other provisions of thePlan, Elective Deferral Contributions in an amount equal to the Excess ElectiveDeferrals assigned to this Plan, plus any income and minus any loss allocablethereto, shall be distributed no later than April 15 to any Participant towhose Account Excess Elective Deferrals were assigned for the preceding yearand who claims Excess Elective Deferrals for such taxable year.

 

The Excess Elective Deferrals shall be adjustedfor income or loss. The income or loss allocable to such Excess ElectiveDeferrals shall be equall to the income or loss allocable to the Participant’sElective Deferral Contributions for the taxable year in which the excessoccurred multiplied by a fraction. The numerator of the fraction is the ExcessElective Deferrals. The denominator of the fraction is the closing balancewithout regard to any income or loss occurring during such taxable year (as ofthe end of such taxable year) of the Participant’s Account resulting fromElective Deferral Contributions.

 

Any Matching Contributions which were basedon theElective Deferral—Contributions which are distributed asExcess Elective Deferrals, plus any income and minus any loss allocablethereto, shall be forfeited.

 

(c)                                  ADPTest. As of the end of each Plan Year after Excess Elective Deferrals have beendetermined, the Plan must satisfy the ADP Test. The ADP Test shall be satisfiedusing the prior year testing method, unless the Employer has elected to use thecurrent year testing method.

 

(1)                                  PriorYear Testing Method. The ADP for a Plan Year for Eligible Participants who areHighly Compensated Employees for each Plan Year and the prior year’s ADP forEligible Participants who were Nonhighly Compensated Employees for the priorPlan Year must satisfy one of the following tests:

 

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(i)            TheADP for a Plan Year for Eligible Participants who are Highly CompensatedEmployees for the Plan Year shall not exceed the prior year’s ADP for EligibleParticipants who were Nonhighly Compensated Employees for the prior Plan Yearmultiplied by 1.25; or

 

(ii)           TheADP for a Plan Year for Eligible Participants who are Highly CompensatedEmployees for the Plan Year:

 

A.                                   shallnot exceed the prior year’s ADP for Eligible Participants who were NonhighlyCompensated Employees for the prior Plan Year multiplied by 2, and

 

B.                                     thedifference between such ADPs is not more than 2.

 

If this is not a successor plan, for thefirst Plan Year the Plan permits any Participant to make Elective DeferralContributions, for purposes of the foregoing tests, the prior year’s NonhighlyCompensated Employees’ ADP shall be 3 percent, unless the Employer has electedto use the Plan Year’s ADP for these Eligible Participants.

 

(2)           CurrentYear Testing Method. The ADP for a Plan Year for Eligible Participants who areHighly Compensated Employees for each Plan Year and the ADP for EligibleParticipants who are Nonhighly Compensated Employees for the Plan Year mustsatisfy one of the following tests:

 

(i)            TheADP for a Plan Year for Eligible Participants who are Highly CompensatedEmployees for the Plan Year shall not exceed the ADP for Eligible Participantswho are Nonhighly Compensated Employees for the Plan Year multiplied by 1.25;or

 

(ii)           TheADP for a Plan Year for Eligible Participants who are Highly CompensatedEmployees for the Plan Year:

 

A.                                   shallnot exceed the ADP for Eligible Participants who are Nonhighly CompensatedEmployees for the Plan Year multiplied by 2, and

 

B.                                     thedifference between such ADP’s is not more than 2.

 

If the Employer has elected to use thecurrent year testing method, that election cannot be changed unless (i) thePlan has been using the current year testing method for the preceding five PlanYears, or if less, the number of Plan Years the Plan has been in existence; or(ii) the Plan otherwise meets one of the conditions specified in InternalRevenue Service Notice 98-1 (or superseding guidance) for changing from thecurrent year testing method.

 

A Participant is a Highly CompensatedEmployee for a particular Plan Year if he meets the definition of a HighlyCompensated Employee in effect for that Plan Year. Similarly, a Participant isa Nonhighly Compensated Employee for a particular Plan Year if he does not meetthe definition of a Highly Compensated Employee in effect for that Plan Year.

 

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The Deferral Percentage for any EligibleParticipant who is a Highly Compensated Employee for the Plan Year and who iseligible to have Elective Deferral Contributions (and Qualified NonelectiveContributions or Qualified Matching Contributions, or both, if treated asElective Deferral Contributions for purposes of the ADP Test) allocated to his accountunder two or more arrangements described in Code Section 401(k) that aremaintained by the Employer or a Controlled Group member shall be determined asif such Elective Deferral Contributions (and, if applicable, such QualifiedNonelective Contributions or Qualified Matching Contributions, or both) weremade under a single arrangement. If a Highly Compensated Employee participatesin two or more cash or deferred arrangements that have different plan years,all cash or deferred arrangements ending with or within the same calendar yearshall be treated as a single arrangement. The foregoing notwithstanding,certain plans shall be treated as separate if mandatorlly disaggregated underthe regulations of Code Section 401(k).

 

In the event this Plan satisfies therequirements of Code Section 401(k), 401 (a) (4), or 410(b) only ifaggregated with one or more other plans, or if one or more other plans satisfythe requirements of such Code sections only if aggregated with this Plan, thenthis section shall be applied by determining the Deferral Percentage ofEmployees as if all such plans were a single plan. Any adjustments to theNonhighly Compensated Employee ADP for the prior year shall be made inaccordance with Internal Revenue Service Notice 98-1 (or superseding guidance),unless the Employer has elected to use the current year testing method. Plansmay be aggregated in order to satisfy Code Section 401(k) only if theyhave the same plan year and use the same testing method for the ADP Test.

 

For purposes of the ADP Test, ElectiveDeferral Contributions, Qualified Nonelective Contributions, and QualifiedMatching Contributions must be made before the end of the 12-month periodimmediately following the Plan Year to which the contributions relate.

 

The Employer shall maintain recordssufficient to demonstrate satisfaction of the ADP Test and the amount ofQualified Nonelective Contributions or Qualified Matching Contributions, orboth, used in such test.

 

If the Plan Administrator should determineduring the Plan Year that the ADP Test is not being met, the Plan Administratormay limit the amount of future Elective Deferral Contributions of the HighlyCompensated Employees.

 

Notwithstanding any other provisions of thisPlan, Excess Contributions, plus any income and minus any loss allocablethereto, shall be distributed no later than the last day of each Plan Year toParticipants to whose Accounts such Excess Contributions were allocated for thepreceding Plan Year. Excess Contributions are allocated to the HighlyCompensated Employees with the largest amounts of employer contributions takeninto account in calculating the ADP Test for the year in which the excessarose, beginning with the Highly Compensated Employee with the largest amountof such employer contributions and continuing in descending order until all ofthe Excess Contributions have been allocated. for purposes of the precedingsentence, the “largest amount” is determined after distribution of any ExcessContributions. If such excess amounts are distributed more than 2 1/2 monthsafter the last day of the Plan Year in which such excess amounts arose, a 10percent excise tax shall be imposed on the employer maintaining the plan withrespect to such amounts.

 

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Excess Contributions shall be treated asAnnual Additions, as defined in the CONTRIBUTION LIMITATION SECTION ofthis article.

 

The Excess Contributions shall be adjustedfor income or loss. The income or loss allocable to such Excess Contributionsallocated to each Participant shall be equal to the income or loss allocable tothe Participant’s Elective Deferral Contributions (and, if applicable,Qualified Nonelective Contributions or Qualified Matching Contributions, orboth) for the Plan Year in which the excess occurred multiplied by a fraction.The numerator of the fraction is the Excess Contributions. The denominator ofthe fraction is the closing balance without regard to any income or lossoccurring during such Plan Year (as of the end of such Plan Year) of theParticipant’s Account resulting from Elective Deferral Contributions (andQualified Nonelective Contributions or Qualified Matching Contributions, orboth, if such contributions are included in the ADP Test).

 

Excess Contributions allocated to aParticipant shall be distributed from the Participant’s Account resulting fromElective Deferral Contributions. If such Excess Contributions exceed thebalance in the Participant’s Account resulting from Elective DeferralContributions, the balance shall be distributed from the Participant’s Accountresulting from Qualified Matching Contributions (if applicable) and QualifiedNonelective Contributions, respectively.

 

Any Matching Contributions which were basedon the Elective Deferral Contributions which are distributed as ExcessContributions, plus any income and minus any loss allocable thereto, shall beforfeited.

 

(d)                                 ACPTest. As of the end of each Plan Year, the Plan must satisfy the ACP Test. TheACP Test shall be satisfied using the prior year testing method, unless theEmployer has elected to use the current year testing method.

 

(1)                                  PriorYear Testing Method. The ACP for a Plan Year for Eligible Participants who areHighly Compensated Employees for each Plan Year and the prior year’s ACP forEligible Participants who were Nonhighly Compensated Employees for the priorPlan Year must satisfy one of the following tests:

 

(i)            TheACP for the Plan Year for Eligible Participants who are Highly CompensatedEmployees for the Plan Yearshall not—exceed the prior year’s ACP for EligibleParticipants who were Nonhighly Compensated Employees for the prior Plan 1’aarmultiplied by 1.25; or

 

(ii)           TheACP for a Plan Year for Eligible Participants who are Highly CompensatedEmployees for the Plan Year:

 

A.                                   shallnot exceed the prior year’s ACP for Eligible Participants who were NonhighlyCompensated Employees for the prior Plan Year multiplied by 2. and

 

B.                                     thedifference between such ACPs is not more than 2.

 

If this is not a successor plan, for thefirst Plan Year the Plan permits any Participant to make ParticipantContributions, provides for Matching Contributions, or both, for purposes

 

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of the foregoing tests, the prior year’sNonhighly Compensated Employees’ ACP shall be 3 percent, unless the Employerhas elected to use the Plan Year’s ACP for these Eligible Participants.

 

(2)           CurrentYear Testing Method. The ACP for a Plan Year for Eligible Participants who areHighly Compensated Employees for each Plan Year and the ACP for EligibleParticipants who are Nonhighly Compensated Employees for the Plan Year mustsatisfy one of the following tests:

 

(i)            TheACP for a Plan Year for Eligible Participants who are Highly CompensatedEmployees for the Plan Year shall not exceed the ACP for Eligible Participantswho are Nonhighly Compensated Employees for the Plan Year multiplied by 1.25;or

 

(ii)           TheACP for a Plan Year for Eligible Participants who are Highly CompensatedEmployees for the Plan Year:

 

A.                                   shallnot exceed the ACP for Eligible Participants who are Nonhighly CompensatedEmployees for the Plan Year multiplied by 2, and

 

B.                                     thedifference between such ACPs is not more than 2.

 

If the Employer has elected to use thecurrent year testing method, that election cannot be changed unless (i) thePlan has been using the current year testing method for the preceding five PlanYears, or if less, the number of Plan Years the Plan has been in existence; or(ii) the Plan otherwise meets one of the conditions specified in InternalRevenue Service Notice 98-1 (or superseding guidance) for changing from thecurrent year testing method.

 

A Participant is a Highly CompensatedEmployee for a particular Plan Year if he meets the definition of a HighlyCompensated Employee in effect for that Plan Year. Similarly, a Participant isa Nonhighly Compensated Employee for a particular Plan Year if he does not meetthe definition of a Highly Compensated Employee in effect for that Plan Year.

 

Multiple Use. If one or more Highly CompensatedEmployees participate in both a cash or deferred arrangement and a plan subjectto the ACP Test maintained by the Employer or a Controlled Group member, andthe sum of the ADP and ACP of those Highly Compensated Employees subject toeither or both tests exceeds the Aggregate Limit, then the ContributionPercentage of those Highly Compensated Employees who also participate in a cashor deferred arrangement will be reduced in the manner described below forallocating Excess Aggregate Contributions so that the limit is not exceeded.The amount by which each Highly Compensated Employee’s Contribution Percentageis reduced shall be treated as an Excess Aggregate Contribution. The ADP andACP of the Highly Compensated Employees are determined after any correctionsrequired to meet the ADP Test and ACP Test and are deemed to be the maximumpermitted under such tests for the Plan Year. Multiple use does not occur ifeither the ADP or ACP of the Highly Compensated Employees does not exceed 1.25multiplied by the ADP and ACP, respectively, of the Nonhighly CompensatedEmployees.

 

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The Contribution Percentage for any EligibleParticipant who is a Highly Compensated Employee for the Plan Year and who iseligible to have Contribution Percentage Amounts allocated to his account undertwo or more plans described in Code Section 401(a) or arrangementsdescribed in Code Section 401(k) that are maintained by the Employer or aControlled Group member shall be determined as if the total of suchContribution Percentage Amounts was made under each plan. If a HighlyCompensated Employee participates in two or more cash or deferred arrangementsthat have different plan years, all cash or deferred arrangements ending withor within the same calendar year shall be treated as a single arrangement. Theforegoing notwithstanding, certain plans shall be treated as separate ifmandatorily disaggregated under the regulations of Code Section 401(m).

 

In the event this Plan satisfies the requirementsof Code Section 401(m), 401(a)(4), or 410(b) only if aggregated with oneor more other plans, or if one or more other plans satisfy the requirements ofsuch Code sections only if aggregated with this Plan, then this section shallbe applied by determining the Contribution Percentage of Employees as if allsuch plans were a single plan. Any adjustments to the Nonhighly CompensatedEmployee RCP for the prior year shall be made in accordance with InternalRevenue Service Notice 98-1 (or superseding guidance), unless the Employer haselected to use the current year testing method. Plans may be aggregated inorder to satisfy Code Section 401 (m) only if they have the same plan yearand use the same testing method for the ACP Test.

 

For purposes of the ACP Test, ParticipantContributions are considered to have been made in the Plan Year in whichcontributed to the Plan. Matching Contributions and Qualified NonelectiveContributions will be considered to have been made for a Plan Year if made nolater than the end of the 12-month period beginning on the day after the closeof the Plan Year.

 

The Employer shall maintain records.sufficient to demonstrate satisfaction of the ACP Test and the amount ofQualified Nonelective Contributions or Qualified Matching Contributions, orboth, used in such test.

 

Notwithstanding any other provisions of thisPlan, Excess Aggregate Contributions, plus any income and minus any lossallocable thereto, shall be forfeited, if not vested, or distributed, ifvested, no later than the last day of each Plan Year to Participants to whoseAccounts such Excess Aggregate Contributions were allocated for the precedingPlan Year. Excess Aggregate Contributions are allocated to the HighlyCompensated Employees with the largest Contribution Percentage Amounts takeninto account in calculating the ACP Test for the year in which the excessarose, beginning with the Highly Compensated Employee with the largest amountof such Contribution Percentage Amounts and continuing in descending order untilall of the Excess Aggregate Contributions have been allocated. For purposes ofthe preceding sentence, the “largest amount” is determined after distributionof any Excess Aggregate Contributions. If such Excess Aggregate Contributionsare distributed more than 2 1/2 months after the last day of the Plan Year inwhich such excess amounts arose, a 10 percent excise tax shall be imposed onthe employer maintaining the plan with respect to such amounts.

 

Excess Aggregate Contributions shall betreated as Annual Additions, as defined in the CONTRIBUTION LIMITATION SECTION ofthis article.

 

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The Excess Aggregate Contributions shall beadjusted for income or loss. The income or loss allocable to such Excess AggregateContributions allocated to each Participant shall be equal to the income orloss allocable to the Participant’s Contribution Percentage Amounts for thePlan Year in which the excess occurred multiplied by a fraction. The numeratorof the fraction is the Excess Aggregate Contributions. The denominator of thefraction is the closing balance without regard to any income or loss occurringduring such Plan Year (as of the end of such Plan Year) of the Participant’sAccount resulting from Contribution Percentage Amounts.

 

Excess Aggregate Contributions allocated to aParticipant shall be distributed from the Participant’s Account resulting fromParticipant Contributions that are not required as a condition of employment orparticipation or for obtaining additional benefits from Employer Contributions.If such Excess Aggregate Contributions exceed the balance in the Participant’sAccount resulting from such Participant’s Contributions, the balance shall beforfeited, if not vested, or distributed, if vested, on a pro-rata basis fromthe Participant’s Account resulting from Contribution Percentage Amounts.

 

(e)                                  EmployerElections. The Employer has not made an election to use the current yeartesting method.

 

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ARTICLE IV

 

INVESTMENT OF CONTRIBUTIONS

 

SECTION 4.01—INVESTMENT AND TIMING OF CONTRIBUTIONS.

 

The handling of Contributions is governed bythe provisions of the Trust Agreement, the Annuity Contract, and any otherfunding arrangement in which the Plan Fund is or may be held or invested. Tothe extent permitted by the Trust Agreement, Annuity Contract, or other fundingarrangement, the parties named below shall direct the Contributions to theguaranteed benefit policy portion of the Annuity Contract, any of theinvestment options available under the Annuity Contract, or any of theinvestment vehicles available under the Trust Agreement and may request thetransfer of amounts resulting from those Contributions between such investmentoptions and investment vehicles or the transfer of amounts between theguaranteed benefit policy portion of the Annuity Contract and such investmentoptions and investment vehicles. A Participant may not direct the Trustee orInsurer to invest the Participant’s Account in collectibles. Collectibles meanany work of art, rug or antique, metal or gem, stamp or coin, alcoholicbeverage, or other tangible personal property specified by the Secretary of theTreasury. However, for tax years beginning after December 31, 1997,certain coins and bullion as provided in Code Section 408(m)(3) shall notbe considered collectibles. To the extent that a Participant who has investmentdirection fails to give timely direction, the Primary Employer shall direct theinvestment of his Account, If the Primary Employer has investment direction,such Account shall be invested ratably in the guaranteed benefit policy portionof the Annuity Contract, the investment options available under the AnnuityContract, or the investment vehicles available under the Trust Agreement in thesame manner as the Accounts of all other Participants who do not direct theirinvestments. The Primary Employer shall have investment direction for amountswhich have not been allocated to Participants. To the extent an investment isno longer available, the Primary Employer may require that amounts currentlyheld in such investment be reinvested in other investments.

 

At least annually, the Named Fiduciary, shallreview all pertinent Employee information and Plan data in order to establishthe funding policy of the Plan and to determine appropriate methods of carryingout the Plan’s objectives. The Named Fiduciary shall inform the Trustee and anyInvestment Manager of the Plan’s short-term and long-term financial needs sothe investment policy can be coordinated with the Plan’s financialrequirements.

 

(a)                                  EmployerContributions other than Elective Deferral Contributions: The Particpant shalldirect the investment of such Employer Contributions and transfer of amountsresulting from those Contributions.

 

(b)                                 Elective Deferral Contributions: TheParticipant shall direct the investment of Elective Deferral Contributions andtransfer of amounts resulting from those Contributions. 

 

(c)                                  RolloverContributions: The Participant shall direct the investment of RolloverContributions and transfer of amounts resulting from those Contributions.

 

However, the Named Fiduciary may delegateto the Investment Manager investment discretion for Contributions and amountswhich are not subject to Participant direction.

 

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The Employershall pay to the Insurer or Trustee, as applicable, the Elective DeferralContributions and Qualified Nonelective Contributions for each Plan Year notlater than the end of the 12-month period immediately following the Plan Yearfor which they are deemed to be paid.

 

All Contributions are forwarded by theEmployer to the Trustee to be deposited in the Trust Fund or to the Insurer tobe deposited under the Annuity Contract, as applicable. Contributions that areaccumulated through payroll deduction shall be paid to the Trustee or Insurer,as applicable, by the earlier of (i) the date the Contributions can reasonablybe segregated from the Employer’s assets, or (ii) the 15th business day of themonth following the month in which the Contributions would otherwise have beenpaid in cash to the Participant.

 

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ARTICLE V

 

BENEFITS

 

SECTION 5.01—RETIREMENTBENEFITS.

 

On aParticipant’s Retirement Date, his Vested Account shall be distributed to himaccording to the distribution of benefits provisions of Article VI and theprovisions of the SMALL AMOUNTS SECTION of Article X.

 

SECTION 5.02—DEATHBENEFITS.

 

If aParticipant dies before his Annuity Starting Date, his Vested Account shall bedistributed according to the distribution of benefits provisions of Article VIand the provisions of the SMALL AMOUNTS SECTION of Article X.

 

SECTION 5.03—VESTEDBENEFITS.

 

If an InactiveParticipant’s Vested Account is not payable under the SMALL AMOUNTS SECTION ofArticle X, he may elect, but is not required, to receive a distribution ofhis Vested Account after he ceases to be an Employee. The Participant’selection shall be subject to his spouse’s consent as provided in the ELECTIONPROCEDURES SECTION of Article VI. A distribution under this paragraphshall be a retirement benefit and shall be distributed to the Participantaccording to the distribution of benefits provisions of Article VI.

 

A Participantmay not elect to receive a distribution under the provisions of this section afterhe again becomes an Employee until he subsequently ceases to be an Employee andmeets the requirements of this section.

 

If an InactiveParticipant does not receive an earlier distribution, upon his Retirement Dateor death, his Vested Account shall be distributed according to the provisionsof the RETIREMENT BENEFITS SECTION or the DEATH BENEFITS SECTION of Article V.

 

The NonvestedAccount of an Inactive Participant who has ceased to be an Employee shallremain a part of his Account until it becomes a Forfeiture. However, if heagain becomes an Employee so that his Vesting Percentage can increase, theNonvested Account may become a part of his Vested Account.

 

SECTION 5.04—WHENBENEFITS START.

 

(a)                                  Unlessotherwise elected, benefits shall begin before the 60th day following the closeof the Plan Year in which the latest date below occurs:

 

(1)                                  Thedate the Participant attains age 65 (or Normal Retirement Age, if earlier).

 

(2)                                  The10th anniversary of the Participant’s Entry Date.

 

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(3)                                  Thedate the Participant ceases to be an Employee.

 

Notwithstanding the foregoing, the failure ofa Participant and spouse to consent to a distribution while a benefit isimmediately distributable, within the meaning of the ELECTION PROCEDURES SECTION ofArticle VI, shall be deemed to be an election to defer the start ofbenefits sufficient to satisfy this section.

 

The Participant may elect to have hisbenefits begin after the latest date for beginning benefits described above,subject to the following provisions of this section. The Participant shall makethe election in writing. Such election must be made before his NormalRetirement Date or the date he ceases to be an Employee, if later. The electionmust describe the form of distribution and the date benefits will begin. TheParticipant shall not elect a date for beginning benefits or a form ofdistribution that would result in a benefit payable when he dies which would bemore than incidental within the meaning of governmental regulations.

 

Benefits shall begin on an earlier date ifotherwise provided in the Plan. For example, the Participant’s Retirement Dateor Required Beginning Date, as defined in the DEFINITIONS SECTION of Article VII.

 

(b)                                 TheParticipant’s Vested Account which results from Elective Deferral Contributionsand Qualified Nonelective Contributions may not be distributed to a Participantor to his Beneficiary (or Beneficiaries) in accordance with the Participant’sor Beneficiary’s (or Beneficiaries’) election, earlier than separation fromservice, death, or disability. Such amount may also be distributed upon:

 
| (1)    |   | Termination  of the Plan, as permitted in Article VIII.                                                                                                                                                                                                                                                                                                                                                         |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                 |
| (2)    |   | The  disposition by the Employer, if the Employer is a corporation, to an  unrelated corporation of substantially all of the assets, within the meaning  of Code Section 409(d)(2), used in a trade or business of the Employer  if the Employer continues to maintain the Plan after the disposition, but  only with respect to Employees who continue employment with the corporation  acquiring such assets. |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                 |
| (3)    |   | The  disposition by the Employer, if the Employer is a corporation, to an  unrelated entity of the Employer’s interest in a subsidiary, within the  meaning of Code Section 409(d)(3), if the Employer continues to maintain  the Plan, but only with respect to Employees who continue employment with  such subsidiary.                                                                                  |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                 |
| (4)    |   | The  attainment of age 59 1/2 as permitted in the WITHDRAWAL BENEFITS  SECTION of this article.                                                                                                                                                                                                                                                                                                                 |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                 |
| (5)    |   | The hardship  of the Participant as permitted in the WITHDRAWAL BENEFITS SECTION of  this article.                                                                                                                                                                                                                                                                                                              |

 

All distributions that may be made pursuantto one or more of the foregoing distributable events will be a retirementbenefit and shall be distributed to the Participant according to thedistribution of benefit provisions of Article VI. In addition,distributions that are triggered by (1),

 

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(2) and (3) above must be made in a lump sum. Alump sum shall include a distribution of an annuity contract.

 

SECTION 5.05—WITHDRAWALBENEFITS.

 

A Participantwho has attained age 59 1 /2 may withdraw any part of his Vested Account whichresults from the following Contributions:

 

Elective Deferral Contributions MatchingContributions

 

Qualified Nonelective ContributionsDiscretionary Contributions Rollover Contributions

 

A Participant may makeonly two such withdrawals in any 12-month period.

 

A Participantmay withdraw any part of his Vested Account which results from the followingContributions:

 

Elective Deferral Contributions MatchingContributions Discretionary Contributions Rollover Contributions

 

In the event of hardship due toan immediate and heavy financial need. Withdrawals from the Participant’sAccount resulting from Elective Deferral Contributions shall be limited to theamount of the Participant’s Elective Deferral Contributions. Immediate andheavy financial need shall be limited to: (i) expenses incurred or necessaryfor medical care, described in Code Section 213(d), of the Participant,the Participant’s spouse, or any dependents of the Participant (as defined inCode Section 152); (ii) purchase (excluding mortgage payments) of aprincipal residence for the Participant; (iii) payment of tuition, relatededucational fees, and room and board expenses, for the next 12 months ofpost-secondary education for the Participant, his spouse, children, ordependents; (iv) the need to prevent the eviction of the Participant from hisprincipal residence or foreclosure on the mortgage of the Participant’sprincipal residence; or (v) any other distribution which is deemed by theCommissioner of Internal Revenue to be made on account of immediate and heavyfinancial need as provided in Treasury regulations.

 

No withdrawalshall be allowed which is not necessary to satisfy such immediate and heavyfinancial need. Such withdrawal shall be deemed necessary only if all of thefollowing requirements are met: (i) the distribution is not in excess of theamount of the immediate and heavy financial need (including amounts necessaryto pay any Federal, state, or local income taxes or penalties reasonablyanticipated to result from the distribution); (ii) the Participant has obtainedall distributions, other than hardship distributions, and all nontaxable loanscurrently available under all plans maintained by the Employer; (iii) the Plan,and all other plans maintained by the Employer, provide that the Participant’selective contributions and participant contributions will be suspended for atleast 12 months after receipt of the hardship distribution; and (iv) the Plan,and all other plans maintained by the Employer, provide that the Participantmay not make elective contributions for the Participant’s taxable yearimmediately following the taxable year of the hardship distribution in excessof the applicable limit under Code Section 402(g) for such next taxableyear less the amount of such Participant’s elective contributions for thetaxable year of the hardship distribution. The Plan

 

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will suspend elective contributions and participant contributions for12 months and limit elective deferrals as provided in the preceding sentence. AParticipant shall not cease to be an Eligible Participant, as defined in theEXCESS AMOUNTS SECTION of Article III, merely because his electivecontributions or participant contributions are suspended.

 

A request for withdrawal shall be made insuch manner and in accordance with such rules as the Employer will prescribefor this purpose (including by means of voice response or other electronicmeans under circumstances the Employer permits). Withdrawals shall be aretirement benefit and shall be distributed to the Participant according to thedistribution of benefits provisions of Article VI. A forfeiture shall notoccur solely as a result of a withdrawal.

 

SECTION 5.06—LOANSTO PARTICIPANTS.

 

Loans shall be made available to allParticipants on a reasonably equivalent basis. For purposes of this section,and unless otherwise specified, Participant means any Participant orBeneficiary who is a party-in-interest as defined in ERISA. Loans shall not bemade to Highly Compensated Employees in an amount greater than the amount madeavailable to other Participants.

 

No loans will be made to anyshareholder-employee or Owner-employee. For purposes of this requirement, ashareholder-employee means an employee or officer of an electing small business(Subchapter S) corporation who owns (or is considered as owning within themeaning of Code Section 318(a)(1)), on any day during the taxable year ofsuch corporation, more than 5 percent of the outstanding stock of thecorporation.

 

A loan to a Participantshall be a Participant-directed investment of his Account. The loan is a TrustFund investment but no Account other than the borrowing Participant’s Accountshall share in the interest paid on the loan or bear any expense or lossincurred because of the loan.

 

The number ofoutstanding loans shall be limited to one. No more than one loan shall beapproved for any Participant in any 1 2-month period. The minimum amount of anyloan shall be $1,000.

 

Loans must be adequatelysecured and bear a reasonable rate of interest.

 

The amount of the loanshall not exceed the maximum amount that may be treated as a loan under Code Section 72(p)(rather than a distribution) to the Participant and shall be equal to thelesser of (a) or (b) below:

 

(a)                                  $50,000,reduced by the highest outstanding loan balance of loans during the one-yearperiod ending on the day before the new loan is made.

 

(b)                                 Thegreater of (1) or (2), reduced by (3) below:

 

(1)                                  One-halfof the Participant’s Vested Account.

 

(2)                                  $10,000.

 

(3)                                  Anyoutstanding loan balance on the date the new loan is made.

 

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For purposes of this maximum, a Participant’s Vested Account does notinclude any accumulated deductible employee contributions, as defined in Code Section 72(o)(5)(B),and all qualified employer plans, as defined in Code Section 72(p)(4), ofthe Employer and any Controlled Group member shall be treated as one plan.

 

The foregoingnotwithstanding, the amount of such loan shall not exceed 50 percent of theamount of the Participant’s Vested Account. For purposes of this maximum, aParticipant’s Vested Account does not include any accumulated deductibleemployee contributions, as defined in Code Section 72(o)(5)(B). Nocollateral other than a portion of the Participant’s Vested Account (as limitedabove) shall be accepted. The Loan Administrator shall determine if thecollateral is adequate for the amount of the loan requested.

 

A Participantmust obtain the consent of his spouse, if any, to the use of the Vested Accountas security for the loan. Spousal consent shall be obtained no earlier than thebeginning of the 90-day period that ends on the date on which the loan to be sosecured is made. The consent must be in writing, must acknowledge the effect ofthe loan, and must be witnessed by a plan representative or a notary public.Such consent shall thereafter be binding with respect to the consenting spouseor any subsequent spouse with respect to that loan. A new consent shall berequired if the Vested Account is used for collateral upon renegotiation,extension, renewal, or other revision of the loan. No consent shall be requiredif subparagraph (d) of the ELECTION PROCEDURES SECTION of Article VIapplies.

 

If a validspousal consent has been obtained in accordance with the above, or spousalconsent is not required, then, notwithstanding any other provision of thisPlan, the portion of the Participant’s Vested Account used as a securityinterest held by the Plan by reason of a loan outstanding to the Participantshall be taken into account for purposes of determining the amount of theVested Account payable at the time of the death or distribution, but only ifthe reduction is used as repayment of the loan. If spousal consent is requiredand less than 100 percent of the Participant’s Vested Account (determinedwithout regard to the preceding sentence) is payable to the surviving spouse,then the Vested Account shall be adjusted by first reducing the Vested Accountby the amount of the security used as repayment of the loan, and thendetermining the benefit payable to the surviving spouse.

 

Each loan shallbear a reasonable fixed rate of interest to be determined by the LoanAdministrator. In determining the interest rate, the Loan Administrator shalltake into consideration fixed interest rates currently being charged bycommercial lenders for loans of comparable risk on similar terms and forsimilar durations, so that the interest will provide for a return commensuratewith rates currently charged by commercial lenders for loans made under similarcircumstances. The Loan Administrator shall not discriminate among Participantsin the matter of interest rates; butloans granted at different times may beardifferent interest rates in accordance with the current appropriate standards.

 

The loan shallby its terms require that repayment (principal and interest) be amortized inlevel payments, not less frequently than quarterly, over a period not extendingbeyond five years from the date of the loan. If the loan is used to acquire adwelling unit, which within a reasonable time (determined at the time the loanis made) will be used as the principal residence of the Participant, therepayment period may extend beyond five years from the date of the loan. Theperiod of repayment for any loan shall be arrived at by mutual agreementbetween the Loan Administrator and the Participant and if the loan is for aprincipal residence, shall not be made for a period longer than the repaymentperiod consistent with commercial practices.

 

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The Participantshall make an application for a loan in such manner and in accordance with suchrules as the Employer shall prescribe for this purpose (including by means ofvoice response or other electronic means under circumstances the Employerpermits). The application must specify the amount and duration requested.

 

Informationcontained in the application for the loan concerning the income, liabilities,and assets of the Participant will be evaluated to determine whether there is areasonable expectation that the Participant will be able to satisfy payments onthe loan as due. Additionally, the Loan Administrator will pursue anyappropriate further investigations concerning the creditworthiness and credit historyof the Participant to determine whether a loan should be approved.

 

Each loan shallbe fully documented in the form of a promissory note signed by the Participantfor the face amount of the loan, together with interest determined as specifiedabove.

 

There will bean assignment of collateral to the Plan executed at the time the loan is made.

 

In those caseswhere repayment through payroll deduction is available, installments are sopayable, and a payroll deduction agreement shall be executed by the Participantat the time the loan is made. Loan repayments that are accumulated throughpayroll deduction shall be paid to the Trustee by the earlier of (i) the datethe loan repayments can reasonably be segregated from the Employer’s assets, or(ii) the 15th business day of the month following the month in which suchamounts would otherwise have been paid in cash to the Participant.

 

Where payrolldeduction is not available, payments in cash are to be timely made. Any paymentthat is not by payroll deduction shall be made payable to the Employer or theTrustee, as specified in the promissory note, and delivered to the LoanAdministrator, including prepayments, service fees and penalties, if any, andother amounts due under the note. The Loan Administrator shall deposit suchamounts into the Plan as soon as administratively practicable after they arereceived, but in no event later than the 15th business day of the month afterthey are received.

 

The promissorynote may provide for reasonable fate payment penalties and service fees. Anypenalties or service fees shall be applied to all Participants in anondiscriminatory manner. If the promissory note so provides, such amounts maybe assessed and collected from the Account of the Participant as part of theloan balance.

 

Each loan maybe paid prior to maturity, in part or in full, without penalty or service fee,except as may be set out in the promissory note.

 

The Plan shallsuspend loan payments for a period not exceeding one year during which anapproved unpaid leave of absence occurs other than a military leave of absence.The Loan Administrator shall provide the Participant a written explanation ofthe effect of the suspension of payments upon his loan.

 

If aParticipant separates from service (or takes a leave of absence) from theEmployer because of service in the military and does not receive a distributionof his Vested Account, the Plan shall suspend loan payments until theParticipant’s completion of military service or until the Participant’s fifthanniversary ‘of commencement of military service, if earlier, as permittedunder Code Section 414(u). The Loan Administrator shall provide theParticipant a written explanation of the effect of his military service uponhis loan.

 

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If any paymentof principal and interest, or any portion thereof, remains unpaid for more than90 days after due, the loan shall be in default. For purposes of Code Section 72(p),the Participant shall then be treated as having received a deemed distributionregardless of whether or not a distributable event has occurred.

 

Upon default,the Plan has the right to pursue any remedy available by law to satisfy theamount due, along with accrued interest, including the right to enforce itsclaim against the security pledged and execute upon thecollateral as allowed by law. The entireprincipal balance whether or not otherwise then due, along with accruedinterest, shall become immediately due and payable without demand or notice,and subject to collection or satisfaction by any lawful means, includingspecifically, but not limited to, the right to enforce the claim against thesecurity pledged and to execute upon the collateral as allowed by law.

 

In the event ofdefault, foreclosure on the note and attachment of security or use of amountspledged to satisfy the amount then due shall not occur until a distributableevent occurs in accordance with the Plan, and shall not occur to an extentgreater than the amount then available upon any distributable event which hasoccurred under the Plan.

 

All reasonablecosts and expenses, including but not limited to attorney’s fees, incurred bythe Plan in connection with any default or in any proceeding to enforce anyprovision of a promissory note or instrument by which a promissory note for aParticipant loan is secured, shall be assessed and collected from the Accountof the Participant as part of the loan balance.

 

If payrolldeduction is being utilized, in the event that a Participant’s available payrolldeduction amounts in any given month are insufficient to satisfy the totalamount due, there will be an increase in the amount taken subsequently,sufficient to make up the amount that is then due. If any amount remains pastdue more than 90 days, the entire principal amount, whether or not otherwisethen due, along with interest then accrued, shall become due and payable, asabove.

 

If nodistributable event has occurred under the Plan at the time that theParticipant’s Vested Account would otherwise be used under this provision topay any amount due under the outstanding loan, this will not occur until thetime, or in excess of the extent to which, a distributable event occurs underthe Plan. An outstanding loan will become due and payable in full 60 days aftera Participant ceases to be an Employee and a party-in-interest as defined inERISA or after complete termination of the Plan.

 

SECTION 5.07—DISTRIBUTIONSUNDER QUALIFIED DOMESTIC RELATIONS ORDERS.

 

The Planspecifically permits distributions to an Alternate Payee under a qualifieddomestic relations order as defined in Code Section 414(p), at any time,irrespective of whether the Participant has attained his earliest retirementage, as defined in Code Section 414(p), under the Plan. A distribution toan Alternate Payee before the Participant has attained his earliest retirementage is available only if the order specifies that distribution shall be madeprior to the earliest retirement age or allows the Alternate Payee to elect adistribution prior to the earliest retirement age.

 

Nothing in this section shall permita Participant to receive a distribution at a time otherwise not permitted underthe Plan nor shall it permit the Alternate Payee to receive a form of paymentnot permitted under the Plan.

 

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The benefitpayable to an Alternate Payee shall be subject to the provisions of the SMALLAMOUNTS SECTION of Article X if the value of the benefit does notexceed $5,000 ($3,500 for Plan Years beginning before August 6, 1997).

 

The PlanAdministrator shall establish reasonable procedures to determine the qualifiedstatus of a domestic relations order. Upon receiving a domestic relationsorder, the Plan Administrator shall promptly notify the Participant and theAlternate Payee named in the order, in writing, of the receipt of the order andthe Plan’s procedures for determining the qualified status of the order. Withina reasonable period of time after receiving the domestic relations order, thePlan Administrator shall determine the qualified status of the order and shallnotify the Participant and each Alternate Payee, in writing, of itsdetermination. The Plan Administrator shall provide notice under this paragraphby mailing to the individual’s address specified in the domestic relationsorder, or in a manner consistent with Department of Labor regulations. The PlanAdministrator may treat as qualified any domestic relations order entered intobefore January 1, 1985, irrespective of whether it satisfies all therequirements described in Code Section 414(p).

 

If any portionof the Participant’s Vested Account is payable during the period the PlanAdministrator is making its determination of the qualified status of thedomestic relations order, a separate accounting shall be made of the amountpayable. If the Plan Administrator determines the order is a qualified domesticrelations order within 18 months of the date amounts are first payablefollowing receipt of the order, the payable amounts shall be distributed inaccordance with the order. If the Plan Administrator does not make itsdetermination of the qualified status of the order within the 18-monthdetermination period, the payable amounts shall be distributed in the mannerthe Plan would distribute if the order did not exist and the order shall applyprospectively if the Plan Administrator later determines the order is aqualified domestic relations order.

 

The Plan shall make payments ordistributions required under this section by separate benefit checks orother separate distribution to the Alternate Payee(s).

 

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ARTICLE VI

 

DISTRIBUTIONOF BENEFITS

 

SECTION 6.01—AUTOMATIC FORMS OF DISTRIBUTION.

 

Unless anoptional form of benefit is selected pursuant to a qualified election withinthe election period (see the ELECTION PROCEDURES SECTION of this article),the automatic form of benefit payable to or on behalf of a Participant isdetermined as follows:

 

(a)                                  Retirement Benefits. The automatic form of retirementbenefit for a Participant who does not die before his Annuity Starting Dateshall be:

 

(1)                                  The Qualified Joint and Survivor Annuity for aParticipant who has a spouse.

 

(2)                                  The Normal Form for a Participant who does nothave a spouse.

 

(b)                                 Death Benefits. The automatic form of deathbenefit for a Participant who dies before his Annuity Starting Date shall be:

 

(1)                                  AQualified Preretirement Survivor Annuity for a Participant who has a spouse towhom he has been continuously married throughout the one-year period ending onthe date of his death. The spouse may elect to start receiving the deathbenefit on any first day of the month on or after the Participant dies and bythe date the Participant would have been age 701/2. If the spouse dies beforebenefits start, the Participant’s Vested Account, determined as of the date ofthe spouse’s death, shall be paid to the spouse’s Beneficiary.

 

(2)                                  Asingle-sum payment to the Participant’s Beneficiary for a Participant who doesnot have a spouse who is entitled to a Qualified Preretirement SurvivorAnnuity.

 

Before a death benefit will be paid onaccount of the death of a Participant who does not have a spouse who isentitled to a Qualified Preretirement Survivor Annuity, it must be establishedto the satisfaction of a plan representative that the Participant does not havesuch a spouse.

 

SECTION 6.02—OPTIONAL FORMS OF DISTRIBUTION.

 

(a)                                  RetirementBenefits. The optional forms of retirement benefit shall be the following: (i)a straight life annuity; (ii) single life annuities with certain periods of 5,10 or 15 years; (iii) a single life annuity with installment refund; (iv)survivorship life annuities with installment refund and survivorshippercentages of 50%, 66 2/3% or 100%; (v) fixed period annuities for any periodof whole months which is not less than 60 and does not exceed the LifeExpectancy, as defined in Article VII, of the Participant where the LifeExpectancy is not recalculated; and (vi) a full flexibility option. A singlesum payment is also available.

 

The full flexibility option is an optionalform of benefit under which the Participant receives a distribution eachcalendar year, beginning with the calendar year in which his Annuity StartingDate occurs. The Participant may elect the amount to be distributed each year(not less than

 

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$1,000). The amount payable in his firstDistribution Calendar Year, as defined in Article VII, must satisfy theminimum distribution requirements of Article VII for such year.Distributions for later Distribution Calendar Years, as defined in Article VII,must satisfy the minimum distribution requirements of Article VII for suchyears. If the Participant’s Annuity Starting Date does not occur until hissecond Distribution Calendar Year, as defined in Article VII, the amountpayable for such year must satisfy the minimum distribution requirements of Article VIIfor both the first and second Distribution Calendar Years, as defined in Article VII.

 

If the Plan is amended to eliminate orrestrict an optional form of distribution and the Plan provides a single sumdistribution form that is otherwise identical to the optional form ofdistribution eliminated or restricted, the amendment shall not apply to anydistribution with an Annuity Starting Date earlier than the first day of thesecond Plan Year following the Plan Year in which the amendment is adopted.

 

Election of an optional form is subject tothe qualified election provisions of the ELECTION PROCEDURES SECTION of thisarticle and the distribution requirements of Article VII.

 

Any annuity contract distributed shall benontransferable. The terms of any annuity contract purchased and distributed bythe Plan to a Participant or spouse shall comply with the requirements of thisPlan.

 

(b)                                 DeathBenefits. The optional forms of death benefit are a single-sum payment and anyannuity that is an optional form of retirement benefit. However, the fullflexibility option shall not be available if the Beneficiary is not the spouse ofthe deceased Participant.

 

Election of an optional form is subject tothe qualified election provisions of the ELECTION PROCEDURES SECTION ofthis article and the distribution requirements of Article VII.

 

SECTION 6.03—ELECTIONPROCEDURES.

 

The Participant,Beneficiary, or spouse shall make any election under this section inwriting. The Plan Administrator may require such individual to complete andsign any necessary documents as to the provisions to be made. Any electionpermitted under (a) and (b) below shall be subject to the qualified electionprovisions of (c) below.

 

(a)                                  Retirement Benefits. A Participant may electhis Beneficiary or Contingent Annuitant and soay elect to have retirementbenefits distributed under any of the optional forms of retirement benefitavailable in the OPTIONAL FORMS OF DISTRIBUTION SECTION of this article.

 

(b)                                 Death Benefits. A Participant may elect hisBeneficiary and may elect to have death benefits distributed under any of theoptional forms of death benefit available in the OPTIONAL FORMS OF DISTRIBUTIONSECTION of this article.

 

If the Participant has not elected anoptional form of distribution for the death benefit payable to his Beneficiary,the Beneficiary may, for his own benefit, elect the form of distribution, inlike manner as a Participant.

 

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The Participant may waive the QualifiedPreretirement Survivor Annuity by naming someone other than his spouse asBeneficiary.

 

In lieu of the Qualified Preretirement SurvivorAnnuity described in the AUTOMATIC FORMS OF DISTRIBUTION SECTION of thisarticle, the spouse may, for his own benefit, waive the Qualified PreretirementSurvivor Annuity by electing to have the benefit distributed under any of theoptional forms of death benefit available in the OPTIONAL FORMS OF DISTRIBUTIONSECTION of this article.

 

(c)                                  Qualified Election.  The Participant, Beneficiary or spouse maymake an election at any time during the election period. The Participant,Beneficiary, or spouse may revoke the election made (or make a new election) atany time and any number of times during the election period. An election iseffective only if it meets the consent requirements below.

 

(1)                                  ElectionPeriod for Retirement Benefits. The election period as to retirement benefitsis the 90-day period ending on the Annuity Starting Date. An election to waivethe Qualified Joint and Survivor Annuity may not be made before the date theParticipant is provided with the notice of the ability to waive the QualifiedJoint and Survivor Annuity. If the Participant elects a full flexibilityoption, he may revoke his election at any time before his first DistributionCalendar Year, as defined in Article VII. When he elects to have benefitsbegin again, he shall have a new Annuity Starting Date. His election period forthis election is the 90-day period ending on the Annuity Starting Date for theoptional form of retirement benefit elected.

 

(2)                                  ElectionPeriod for Death Benefits. A Participant may make an election as to deathbenefits at any time before he dies. The spouse’s election period begins on thedate the Participant dies and ends on the date benefits begin. The Beneficiary’selection period begins on the date the Participant dies and ends on the datebenefits begin.

 

An election to waive the QualifiedPreretirement Survivor Annuity may not be made by the Participant before thedate he is provided with the notice of the ability to waive the QualifiedPreretirement Survivor Annuity. A Participant’s election to waive the QualifiedPreretirement Survivor Annuity which is made before the first day of the PlanYear in which he reaches age 35 shall become invalid on such date. An electionmade by a Participant after he ceases to bean Employee will not become invalidon the first day of the Plan Year in which he reaches age 35 with respect to&ath benefits from that part of his Account resulting from Contributionsmade before he ceased to be an Employee.

 

(3)                                  Consentto Election. If the Participant’s Vested Account exceeds $5,000 ($3,500 forPlan Years beginning before August 6, 1997), any benefit which is (i)immediately distributable or (ii) payable in a form other than a QualifiedJoint and Survivor Annuity or a Qualified Preretirement Survivor Annuity,requires the consent of the Participant and the Participant’s spouse (or whereeither the Participant or the spouse has died, the survivor). Such consentshall also be required if the Participant’s Vested Account at the time of anyprior distribution exceeded $5,000 ($3,500 for Plan Years beginning before August 6,1997). The rule in the preceding sentence shall not apply effective October 17,2000. However, consent will still be required if the Participant had previouslyhad an Annuity Starting Date with respect to any portion of such VestedAccount.

 

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The consent of the Participant or spouse to abenefit which is immediately distributable must not be made before the date theParticipant or spouse is provided with the notice of the ability to defer thedistribution. Such consent shall be made in writing.

 

The consent shall not be made more than 90days before the Annuity Starting Date. Spousal consent is not required for abenefit which is immediately distributable in a Qualified Joint and SurvivorAnnuity. Furthermore, if spousal consent is not required because theParticipant is electing an optional form of retirement benefit that is not alife annuity pursuant to (d) below, only the Participant need consent to thedistribution of a benefit payable in a form that is not a life annuity andwhich is immediately distributable. Neither the consent of the Participant northe Participant’s spouse shall be required to the extent that a distribution isrequired to satisfy Code Section 401 (a)(9) or Code Section 415.

 

In addition, upon termination of this Plan,if the Plan does not offer an annuity option (purchased from a commercialprovider), and if the Employer (or any entity within the same Controlled Group)does not maintain another defined contribution plan (other than an employeestock ownership plan as defined in Code Section 4975(e)(7)), theParticipant’s Account balance will, without the Participant’s consent, bedistributed to the Participant. However, if any entity within the sameControlled Group maintains another defined contribution plan (other than anemployee stock ownership plan as defined in Code Section 4975(e)(7)) thenthe Participant’s Account will be transferred, without the Participant’sconsent, to the other plan if the Participant does not consent to an immediatedistribution.

 

A benefit is immediately distributable if anypart of the benefit could be distributed to the Participant (or survivingspouse) before the Participant attains (or would have attained if not deceased)the older of Normal Retirement Age or age 62.

 

If the Qualified Joint and Survivor Annuityis waived, the spouse has the right to limit consent only to a specificBeneficiary or a specific form of benefit. The spouse can relinquish one orboth such rights. Such consent shall be made in writing. The consent shall notbe made more than 90 days before the Annuity Starting Date. If the QualifiedPreretirement Survivor Annuity is waived, the spouse has the right to limitconsent only to a specific Beneficiary. Such consent shall be in writing. Thespouse’s consent shall be witnessed by a plan representative or notary public.The spouse’s consent must acknowledge-the-effect of the election, includingthat the spouse had the right to limit, consent only to a specific Beneficiaryor a specific form of benefit, if applicable, and that the relinquishment ofone or both such rights was voluntary. Unless the consent of the spouseexpressly permits designations by the Participant without a requirement of furtherconsent by the spouse, the spouse’s consent must be limited to the form ofbenefit, if applicable, and the Beneficiary (including any ContingentAnnuitant), class of Beneficiaries, or contingent Beneficiary named in theelection.

 

Spousal consent is not required, however, ifthe Participant establishes to the satisfaction of the plan representative thatthe consent of the spouse cannot be obtained because there is no spouse or thespouse cannot be located. A spouse’s consent under this paragraph shall not bevalid with respect to any other spouse. A Participant may revoke a priorelection without the consent of the spouse. Any new election will require a newspousal consent, unless the consent of the spouse expressly permits suchelection by the

 

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Participant without further consent by thespouse. A spouse’s consent may be revoked at any time within the Participant’selection period.

 

(d)                                 Special Rule for Profit Sharing Plans. Thissubparagraph (d) applies if the Plan is not a direct or indirect transfereeafter December 31, 1984, of a defined benefit plan, money purchase plan,target benefit plan, stock bonus plan, or profit sharing plan which is subjectto the survivor annuity requirements of Code Sections 401(a)(11) and 417. Ifthe above condition is met, spousal consent is not required for electing anoptional form of retirement benefit that is not a life annuity. If suchcondition is not met, such consent requirements shall be operative.

 

SECTION 6.04—NOTICEREQUIREMENTS.

 

(a)                                  Optional Forms of Retirement Benefit and Rightto Defer. The Plan Administrator shall furnish to the Participant and theParticipant’s spouse a written explanation of the optional forms of retirementbenefit in the OPTIONAL FORMS OF DISTRIBUTION SECTION of this article, includingthe material features and relative values of these options, in a manner thatwould satisfy the notice requirements of Code Section 417(a)(3) and theright of the Participant and the Participant’s spouse to defer distributionuntil the benefit is no longer immediately distributable.

 

The Plan Administrator shall furnish the writtenexplanation by a method reasonably calculated to reach the attention of theParticipant and the Participant’s spouse no less than 30 days, and no more than90 days, before the Annuity Starting Date.

 

The Participant (and spouse, if applicable) may waivethe 30-day election period if the distribution of the elected form ofretirement benefit begins more than 7 days after the Plan Administratorprovides the Participant (and spouse, if applicable) the written explanationprovided that: (i) the Participant has been provided with information thatclearly indicates that the Participant has at least 30 days to consider thedecision of whether or not to elect a distribution and a particulardistribution option, (ii) the Participant is permitted to revoke anyaffirmative distribution election at least until the Annuity Starting Date or,if later, at any time prior to the expiration of the 7-day period that beginsthe day after the explanation is provided to the Participant, and (iii) theAnnuity Starting Date is a date after the date that the written explanation wasprovided to the Participant.

 

(b)                                 Qualified Joint and Survivor Annuity. The PlanAdministrator shall furnish to the Participant a written explanation of the followingthe terms and conditions of the Qualified Joint and Survivor Annuity; theParticipant’s right to make, and the effect of, an election to waive theQualified Joint and Survivor Annuity; the rights of the Participant’s spouse;and the right to revoke an election and the effect of such a revocation.

 

The Plan Administrator shall furnish the writtenexplanation by a method reasonably calculated to reach the attention of theParticipant no less than 30 days, and no more than 90 days, before the AnnuityStarting Date.

 

The Participant (and spouse, if applicable) may waivethe 30-day election period if the distribution of the elected form ofretirement benefit begins more than 7 days after the Plan Administratorprovides the Participant (and spouse, if applicable) the written explanationprovided that:  the Participant has beenprovided with information that clearly indicates that the Participant has atleast 30 days to consider whether to waive the Qualified Joint and SurvivorAnnuity and elect

 

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(with spousal consent, if applicable) a formof distribution other than a Qualified Joint and Survivor Annuity, (ii) theParticipant is permitted to revoke any affirmative distribution election atleast until the Annuity Starting Date or, if later, at any time prior to theexpiration of the 7-day period that begins the day after the explanation of theQualified Joint and Survivor Annuity is provided to the Participant, and (iii)the Annuity Starting Date is a date after the date that the written explanationwas provided to the Participant.

 

After the written explanation is given, aParticipant or spouse may make a written request for additional information.The written explanation must be personally delivered or mailed (first classmail, postage prepaid) to the Participant or spouse within 30 days from thedate of the written request. The Plan Administrator does not need to complywith more than one such request by a Participant or spouse.

 

The Plan Administrator’s explanation shall bewritten in nontechnical language and will explain the terms and conditions ofthe Qualified Joint and Survivor Annuity and the financial effect upon theParticipant’s benefit (in terms of dollars per benefit payment) of electing notto have benefits distributed in accordance with the Qualified Joint andSurvivor Annuity.

 

(c)                                  Qualified Preretirement Survivor Annuity. ThePlan Administrator shall furnish to the Participant a written explanation of thefollowing: the terms and conditions of the Qualified Preretirement SurvivorAnnuity; the Participant’s right to make, and the effect of, an election towaive the Qualified Preretirement Survivor Annuity; the rights of theParticipant’s spouse; and the right to revoke an election and the effect ofsuch a revocation.

 

The Plan Administrator shall furnish thewritten explanation by a method reasonably calculated to reach the attention ofthe Participant within the applicable period. The applicable period for aParticipant is whichever of the following periods ends last: 

 

(1)                                  theperiod beginning one year before the date the individual becomes a Participantand ending one year after such date; or 

 

(2)                                  theperiod beginning one year before the date the Participant’s spouse is firstentitled to a Qualified Preretirement Survivor Annuity and ending one yearafter such date. 

 

If such notice is given before the periodbeginning with the first day of the Plan Year in which the Participant attainsage 32 and ending with the close of the Plan Year preceding the flan Year inwhich the Participant attains age 35, an additional notice shall be givenwithin such period. If a Participant ceases to be an Employee before attainingage 35, an additional notice shall be given within the period beginning oneyear before the date he ceases to be an Employee and ending one year after suchdate.

 

After the written explanation is given, aParticipant or spouse may make a written request for additional information.The written explanation must be personally delivered or mailed (first classmail, postage prepaid) to the Participant or spouse within 30 days from thedate of the written request. The Plan Administrator does not need to complywith more than one such request by a Participant or spouse.

 

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The Plan Administrator’s explanation shall bewritten in nontechnical language and will explain the terms and conditions ofthe Qualified Preretirement Survivor Annuity and the financial effect upon thespouse’s benefit (in terms of dollars per benefit payment) of electing not tohave benefits distributed in accordance with the Qualified PreretirementSurvivor Annuity.

 

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ARTICLE VII

 

DISTRIBUTIONREQUIREMENTS

 

 SECTION 7.01—APPLICATION.

 

The optionalforms of distribution are only those provided in Article VI. An optionalform of distribution shall not be permitted unless it meets the requirements ofthis article. The timing of any distribution must meet the requirements of thisarticle.

 

SECTION 7.02—DEFINITIONS.

 

For purposes of this article, the followingterms are defined:

 

Applicable Life Expectancy means LifeExpectancy (or Joint and Last Survivor Expectancy) calculated using the attainedage of the Participant for Designated Beneficiary) as of the Participant’s (orDesignated Beneficiary’s) birthday in the applicable calendar year reduced byone for each calendar year which has elapsed since the date Life Expectancy wasfirst calculated. If Life Expectancy is being recalculated, the Applicable LifeExpectancy shall be the Life Expectancy so recalculated. The applicablecalendar year shall be the first Distribution Calendar Year, and if LifeExpectancy is being recalculated, such succeeding calendar year.

 

Designated Beneficiary means the individualwho is designated as the beneficiary under the Plan in accordance with Code Section 401(a)(9)and the regulations thereunder.

 

Distribution Calendar Year means a calendaryear for which a minimum distribution is required. For distributions beginningbefore the Participant’s death, the first Distribution Calendar Year is thecalendar year immediately preceding the calendar year which contains theParticipant’s Required Beginning Date. For distributions beginning after theParticipant’s death, the first Distribution Calendar Year is the calendar yearin which distributions are required to begin pursuant to (e) of theDISTRIBUTION REQUIREMENTS SECTION of this article.

 

5-percent Owner means a 5-percent owner asdefined in Code Section 416. A Participant is treated as a 5-percent Ownerfor purposes of this article if such Participant is a 5-percent Owner atany time during the Plan Year ending with or within the calendar year in whichsuch owner attains age 70 1/2.

 

In addition, a Participant is treated as a5-percent Owner for purposes of this article if such Participant becomes a5-percent Owner in a later Plan Year. Such Participant’s Required BeginningDate shall not be later than the April 1 of the calendar year followingthe calendar year in which such later Plan Year ends.

 

Once distributions have begun to a 5-percentOwner under this article, they must continue to be distributed, even if theParticipant ceases to be a 5-percent Owner in a subsequent year.

 

Joint and Last Survivor Expectancy meansjoint and last survivor expectancy computed using the expected return multiplesin Table VI of section 1.72-9 of the Income Tax Regulations.

 

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Unless otherwise elected by the Participantby the time distributions are required to begin, life expectancies shall berecalculated annually. Such election shall be irrevocable as to the Participantand shall apply to all subsequent years. The life expectancy of a nonspouseBeneficiary may not be recalculated.

 

Life Expectancy means life expectancycomputed using the expected return multiples in Table V of section 1.72-9of the Income Tax Regulations.

 

Unless otherwise elected by the Participant(or spouse, in the case of distributions described in (e)(2)(ii) of theDISTRIBUTION REQUIREMENTS SECTION of this article) by the timedistributions are required to begin, life expectancy shall be recalculatedannually. Such election shall be irrevocable as to the Participant (or spouse)and shall apply to all subsequent years. The life expectancy of a nonspouseBeneficiary may not be recalculated.

 

Participant’s Benefit means:

 

(a)                                  TheAccount balance as of the last Valuation Date in the calendar year immediatelypreceding the Distribution Calendar Year (valuation calendar year) increased bythe amount of any contributions or forfeitures allocated to the Account balanceas of the dates in the valuation calendar year after the Valuation Date anddecreased by distributions made in the valuation calendar year after theValuation Date.

 

(b)                                 Exceptionfor Second Distribution Calendar Year. For purposes of (a) above, if anyportion of the minimum distribution for the first Distribution Calendar Year ismade in the second Distribution Calendar Year on or before the RequiredBeginning Date, the amount of the minimum distribution made in the secondDistribution Calendar Year shall be treated as if it had been made in theimmediately preceding Distribution Calendar Year.

 

Required Beginning Date means, for aParticipant who is a 5-percent Owner, the April 1 of the calendar yearfollowing the calendar year in which he attains age 70 1/2.

 

Required Beginning Date means, for anyParticipant who is not a 5-percent Owner, the April 1 of the calendar yearfollowing the later of the calendar year in which he attains age 70 1/2 or thecalendar year in which he retires.

 

The preretirement age 70 1/2 distributionoption is only eliminated with respect to Participants who reach age 70 1/2 inor after a calendar year that begins after the later of December 31, 1998,or the adoption date of the amendment which eliminated such option. Thepreretirement age 70 1/2 distribution is an optional form of benefit underwhich benefits payable in a particular distribution form (including anymodifications that may be elected after benefits begin) begin at a time duringthe period that begins on or after January 1 of the calendar year in whichthe Participant attains age 70 1/2 and ends April 1 of the immediately followingcalendar year.

 

The options available for Participants whoare not 5-percent Owners and attained age 70 1/2 in calendar years before thecalendar year that begins after the later of December 31, 1998, or theadoption date of the amendment which eliminated the preretirement age 70 1/2distribution shall be the following. Any such Participant attaining age 70 1/2in years after 1995 may elect by April 1 of the calendar year followingthe calendar year in which he attained age 70 1/2 (or by December 31,

 

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1997 in the case of a Participant attainingage 70 1/2 in 1996) to defer distributions until the calendar year followingthe calendar year in which he retires. Any such Participant attaining age 70 1/2in years prior to 1997 may elect to stop distributions which are not purchasedannuities and recommence by the April 1 of the calendar year following theyear in which he retires. There shall be a new Annuity Starting Date uponrecommencement.

 

SECTION 7.03—DISTRIBUTION REQUIREMENTS.

 

(a)                                  GeneralRules.

 

(1)                                  Subjectto the AUTOMATIC FORMS OF DISTRIBUTION SECTION of Article VI, jointand survivor annuity requirements, the requirements of this article shallapply to any distribution of a Participant’s interest and shall take precedenceover any inconsistent provisions of this Plan. Unless otherwise specified, theprovisions of this article apply to calendar years beginning after December 31,1984.

 

(2)                                  Alldistributions required under this article shall be determined and made inaccordance with the proposed regulations under Code Section 401(a)(9),including the minimum distribution incidental benefit requirement of section 1.401(a)(9)-2of the proposed regulations.

 

(3)                                  Withrespect to distributions under the Plan made on or after June 14, 2001,for calendar years beginning on or after January 1, 2001, the Plan willapply the minimum distribution requirements of Code Section 401(a)(9) inaccordance with the regulations under Code Section 401(a)(9) that were proposedon January 17, 2001 (the 2001 Proposed Regulations), notwithstanding anyprovision of the Plan to the contrary. If the total amount of required minimumdistributions made to a Participant for 2001 prior to June 14, 2001, areequal to or greater than the amount of required minimum distributionsdetermined under the 2001 Proposed Regulations, then no additionaldistributions are required for such Participant for 2001 on or after such date.If the total amount of required minimum distributions made to a Participant for2001 prior to June 14, 2001, are less than the amount determined under the2001 Proposed Regulations, then the amount of required minimum distributionsfor 2001 on or after such date will be determined so that the total amount ofrequired minimum distributions for 2001 is the amount determined under the 2001Proposed Regulations. These provisions shall continue in effect until the lastcalendar year beginning before the effective date of final regulations underCode Section 401(a)(9) or such other date as may be published by theInternal Revenue Service.

 

(b)                                 RequiredBeginning Date. The entire interest of a Participant must be distributed orbegin to be distributed no later than the Participant’s Required BeginningDate.

 

(c)                                  Limitson Distribution Periods. As of the first Distribution Calendar Year,distributions, if not made in a single sum, may only be made over one of thefollowing periods (or combination thereof):

 

(1)                                  thelife of the Participant,

 

(2)                                  thelife of the Participant and a Designated Beneficiary,

 

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(3)                                  aperiod certain not extending beyond the Life Expectancy of the Participant, or

 

(4)                                  aperiod certain not extending beyond the Joint and Last Survivor Expectancy ofthe Participant and a Designated Beneficiary.

 

(d)                                 Determinationof Amount to be Distributed Each Year. If the Participant’s interest is to bedistributed in other than a single sum, the following minimum distributionrules shall apply on or after the Required Beginning Date:

 

(1)                                  IndividualAccount.

 

(i)                                     Ifa Participant’s Benefit is to be distributed over

 

A.                                   aperiod not extending beyond the Life Expectancy of the Participant or the JointLife and Last Survivor Expectancy of the Participant and the Participant’sDesignated Beneficiary, or

 

B.                                     aperiod not extending beyond the Life Expectancy of the Designated Beneficiary,

 

the amount required to be distributed for eachcalendar year beginning with the distributions for the first DistributionCalendar Year, must be at least equal to the quotient obtained by dividing theParticipant’s Benefit by the Applicable Life Expectancy.

 

(ii)           Forcalendar years beginning before January 1, 1989, if the Participant’sspouse is not the Designated Beneficiary, the method of distribution selectedmust assure that at least 50 percent of the present value of the amountavailable for distribution is paid within the Life Expectancy of theParticipant.

 

(iii)          Forcalendar years beginning after December 31, 1988, the amount to be distributedeach year, beginning with distributions for the first Distribution CalendarYear shall not be less than the quotient obtained by dividing the Participant’sBenefit by the lesser of:

 

A.                                   theApplicable Life Expectancy, or

 

B.                                     ifthe Participant’s spouse is not the Designated Beneficiary, the applicabledivisor determined from the table set forth in Q&A-4 of section 1.401(a)(9)-2of the proposed regulations.

 

Distributions after the death of the Participantshall be distributed using the Applicable Life Expectancy in (1)(i) above asthe relevant divisor without regard to section 1.401(a)(9)-2 of theproposed regulations.

 

(iv)          The minimum distribution required for theParticipant’s first Distribution Calendar Year must be made on or before theParticipant’s Required Beginning Date. The minimum distribution for othercalendar years, including the minimum distribution for

 

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the Distribution Calendar Year in which theParticipant’s Required Beginning Date occurs, must be made on or before December 31of that Distribution Calendar Year.

 

(2)                                  OtherForms. If the Participant’s Benefit is distributed in the form of an annuitypurchased from an insurance company, distributions thereunder shall be made inaccordance with the requirements of Code Section 401(a)(9) and theproposed regulations thereunder.

 

(e)                                  DeathDistribution Provisions.

 

(1)                                  DistributionBeginning Before Death. If the Participant dies after distribution of hisinterest has begun, the remaining portion of such interest will continue to bedistributed at least as rapidly as under the method of distribution being usedprior to the Participant’s death.

 

(2)                                  DistributionBeginning After Death.

 

(i)                                     Ifthe Participant dies before distribution of his interest begins, distributionof the Participant’s entire interest shall be completed by December 31 ofthe calendar year containing the fifth anniversary of the Participant’s deathexcept to the extent that an election is made to receive distributions in accordancewith A or B below:

 

A.                                   ifany portion of the Participant’s interest is payable to a DesignatedBeneficiary, distributions may be made over the life or over a period certainnot greater than the Life Expectancy of the Designated Beneficiary beginning onor before December 31 of the calendar year immediately following thecalendar year in which the Participant died;

 

B.                                     ifthe Designated Beneficiary is the Participant’s surviving spouse, the datedistributions are required to begin in accordance with A above shall not beearlier than the later of:

 

1.                                       December 31of the calendar year immediately following the calendar year in which theParticipant died, or

 

2.                                       December 31of the calendar year in which the Participant would have attained age 70 1/2.

 

(ii)                                  Ifthe Participant has not made an election pursuant to this (e)(2) by the time ofhis death, the Participant’s Designated Beneficiary must elect the method ofdistribution no later than the earlier of:

 

A.                                   December 31of the calendar year in which distributions would be required to begin underthis subparagraph, or

 

B.                                     December 31of the calendar year which contains the fifth anniversary of the date of deathof the Participant.

 

(iii)                               If the Participant has no DesignatedBeneficiary, or if the Designated Beneficiary does not elect a method ofdistribution, distribution of the Participant’s entire interest

 

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must be completed by December 31 of thecalendar year containing the fifth anniversary of the Participant’s death.

 

(3)                                  Forpurposes of (e)(2) above, if the surviving spouse dies after the Participant,but before payments to such spouse begin, the provisions of (e)(2) above, withthe exception of (e)(2)(i)(B) therein, shall be applied as if the survivingspouse were the Participant.

 

(4)                                  Forpurposes of this (e), distribution of a Participant’s interest is considered tobegin on the Participant’s Required Beginning Date (or if (e)(3) above isapplicable, the date distribution is required to begin to the surviving spousepursuant to (e)(2) above). If distribution in the form of an annuityirrevocably begins to the Participant before the Required Beginning Date; thedate distribution is considered to begin is the date distribution actuallybegins.

 

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ARTICLE VIII

 

TERMINATIONOF THE PLAN

 

The Employerexpects to continue the Plan indefinitely but reserves the right to terminatethe Plan in whole or in part at any time upon giving written notice to allparties concerned. Complete discontinuance of Contributions constitutescomplete termination of the Plan.

 

The Account ofeach Participant shall be fully (100%) vested and nonforfeitable as of theeffective date of complete termination of the Plan. The Account of eachParticipant who is included in the group of Participants deemed to be affectedby the partial termination of the Plan shall be fully (100%) vested andnonforfeitable as of the effective date of the partial termination of the Plan.The Participant’s Account shall continue to participate in the earningscredited, expenses charged, and any appreciation or depreciation of theInvestment Fund until his Vested Account is distributed.

 

A Participant’sAccount which does not result from the Contributions listed below may bedistributed to the Participant after the effective date of the completetermination of the Plan:

 

ElectiveDeferral Contributions Qualified Nonelective Contributions

 

A Participant’sAccount resulting from such Contributions may be distributed upon completetermination of the Plan, but only if neither the Employer nor any ControlledGroup member maintain or establish a successor defined contribution plan (otherthan an employer stock ownership plan as defined in Code Section 4975(e)(7),a simplified employee pension plan as defined in Code Section 408(k) or aSIMPLE IRA plan as defined in Code Section 408(p)) and such distributionis made in a lump sum. A distribution under this article shall be aretirement benefit and shall be distributed to the Participant according to theprovisions of Article VI.

 

The Participant’sentire Vested Account shall be paid in a single sum to the Participant as ofthe effective date of complete termination of the Plan if (i) the requirementsfor distribution of Elective Deferral Contributions in the above paragraph aremet and (ii) consent of the Participant is not required in the ELECTIONPROCEDURES SECTION of Article VI to distribute a benefit which isimmediately distributable. This is a small amounts payment. The small amountspayment is in full settlement of all benefits otherwise payable.

 

Upon completetermination of the Plan, no more Employees shall become Participants and nomore Contributions shall be made.

 

The assets of this Plan shall not be paidto the Employer at any time, except that, after the satisfaction of allliabilities under the Plan, any assets remaining may be paid to the Employer.The payment may not be made if it would contravene any provision of law.

 

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ARTICLE IX

 

ADMINISTRATION OF THE PLAN

 

SECTION 9.01—ADMINISTRATION.

 

Subject to theprovisions of this article, the Plan Administrator has complete control of theadministration of the Plan. The Plan Administrator has all the powers necessaryfor it to properly carry out its administrative duties. Not in limitation, butin amplification of the foregoing, the Plan Administrator has completediscretion to construe or interpret the provisions of the Plan, includingambiguous provisions, if any, and to determine all questions that may ariseunder the Plan, including all questions relating to the eligibility ofEmployees to participate in the Plan and the amount of benefit to which anyParticipant, Beneficiary, spouse or Contingent Annuitant may become entitled.The Plan Administrator’s decisions upon all matters within the scope of itsauthority shall be final.

 

Unlessotherwise set out in the Plan or Annuity Contract, the Plan Administrator maydelegate recordkeeping and other duties which are necessary for theadministration of the Plan to any person or firm which agrees to accept suchduties. The Plan Administrator shall be entitled to rely upon all tables,valuations, certificates and reports furnished by the consultant or actuaryappointed by the Plan Administrator and upon all opinions given by any counselselected or approved by the Plan Administrator.

 

The PlanAdministrator shall receive all claims for benefits by Participants, formerParticipants, Beneficiaries, spouses, and Contingent Annuitants. The PlanAdministrator shall determine all facts necessary to establish the right of anyClaimant to benefits and the amount of those benefits under the provisions ofthe Plan. The Plan Administrator may establish rules and procedures to be followedby Claimants in filing claims for benefits, in furnishing and verifying proofsnecessary to determine age, and in any other matters required to administer thePlan.

 

SECTION 9.02—EXPENSES.

 

Expenses of thePlan, to the extent that the Employer does not pay such expenses, may be paidout of the assets of the Plan provided that such payment is consistent withERISA. Such expenses include, but are not limited to, expenses for bondingrequired by ERISA; expenses for recordkeeping and other administrative services;fees and expenses of the Trustee or Annuity Contract; expenses for investmenteducation service and direct costs that the Employer incurs with respect to thePlan.

 

SECTION 9.03—RECORDS.

 

All acts anddeterminations of the Plan Administrator shall be duly recorded. All theserecords, together with other documents necessary for the administration of thePlan, shall be preserved in the Plan Administrator’s custody.

 

Writing(handwriting, typing, printing), photostating, photographing, microfilming, magneticimpulse, mechanical or electrical recording, or other forms of data compilationshall be acceptable means of keeping records.

 

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SECTION 9.04—INFORMATIONAVAILABLE.

 

Any Participantin the Plan or any Beneficiary may examine copies of the Plan description,latest annual report, any bargaining agreement, this Plan, the Annuity Contractor any other instrument under which the Plan was established or is operated.The Plan Administrator shall maintain all of the items listed in this section inits office, or in such other place or places as it may designate in order tocomply with governmental regulations. These items may be examined duringreasonable business hours. Upon the written request of a Participant orBeneficiary receiving benefits under the Plan, the Plan Administrator shallfurnish him with a copy of any of these items. The Plan Administrator may makea reasonable charge to the requesting person for the copy.

 

SECTION 9.05—CLAIMAND APPEAL PROCEDURES.

 

A Claimant mustsubmit any required forms and pertinent information when making a claim forbenefits under the Plan.

 

If a claim forbenefits under the Plan is denied, the Plan Administrator shall provideadequate written notice to the Claimant whose claim for benefits under the Planhas been denied. The notice must be furnished within 90 days of the date thatthe claim is received by the Plan Administrator. The Claimant shall be notifiedin writing within this initial 90-day period if special circumstances requirean extension of time needed to process the claim and the date by which the PlanAdministrator’s decision is expected to be rendered. The written notice shallbe furnished no later than 180 days after the date the claim was received bythe Plan Administrator.

 

The PlanAdministrator’s notice to the Claimant shall specify the reason for the denial;specify references to pertinent Plan provisions on which denial is based;describe any additional material and information needed for the Claimant toperfect his claim for benefits; explain why the material and information isneeded; inform the Claimant that any appeal he wishes to make must be inwriting to the Plan Administrator within 60 days after receipt of the PlanAdministrator’s notice of denial of benefits and that failure to make thewritten appeal within such 60-day period renders the Plan Administrator’sdetermination of such denial final, binding and conclusive.

 

If the Claimant appeals to the PlanAdministrator, the Claimant (or his authorized representative) may submit inwriting whatever issues and comments the Claimant (or his authorizedrepresentative) feels are pertinent. The Claimant (or his authorizedrepresentative) may review pertinent Plan documents. The Plan Administratorshall reexamine all facts related to the appeal and make a final determinationas to whether the denial of benefits is justified under the circumstances. ThePlan Administrator shall advise the Claimant of its decision within 60 days ofhis written request for review, unless special circumstances (such as ahearing) would make rendering a decision within the 60-day limit unfeasible.The Claimant must be notified within the 60-day limit if an extension isnecessary. The Plan Administrator shall render a decision on a claim forbenefits no later than 120 days after the request for review is received.

 

SECTION 9.06—DELEGATIONOF AUTHORITY.

 

All or any partof the administrative duties and responsibilities under this article maybe delegated by the Plan Administrator to a retirement committee. The dutiesand responsibilities of the retirement committee shall be set out in a separatewritten agreement.

 

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SECTION 9.07—EXERCISE OF DISCRETIONARY AUTHORITY.

 

The Employer, PlanAdministrator, and any other person or entity who has authority with respect tothe management, administration, or investment of the Plan may exercise thatauthority in its/his full discretion, subject only to the duties imposed underERISA. This discretionary authority includes, but is not limited to, theauthority to make any and all factual determinations and interpret all termsand provisions of the Plan documents relevant to the issue under consideration.The exercise of authority will be binding upon all persons; will be givendeference in all courts of law; and will not be overturned or set aside by anycourt of law unless found to be arbitrary and capricious or made in bad faith.

 

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ARTICLE X

 

GENERALPROVISIONS

 

SECTION 10.01—AMENDMENTS.

 

The Employermay amend this Plan at any time, including any remedial retroactive changes(within the time specified by Internal Revenue Service regulations), to complywith any law or regulation issued by any governmental agency to which the Planis subject.

 

An amendmentmay not diminish or adversely affect any accrued interest or benefit ofParticipants or their Beneficiaries nor allow reversion or diversion of Planassets to the Employer at any time, except as may be required to comply withany law or regulation issued by any governmental agency to which the Plan issubject.

 

No amendment tothis Plan shall be effective to the extent that it has the effect of decreasinga Participant’s accrued benefit. However, a Participant’s Account may bereduced to the extent permitted under Code Section 41 2(c)(8). Forpurposes of this paragraph, a Plan amendment which has the effect of decreasinga Participant’s Account with respect to benefits attributable to service beforethe amendment shall be treated as reducing an accrued benefit. Furthermore, ifthe vesting schedule of the Plan is amended, in the case of an Employeewho is a Participant as of the later of the date such amendment is adopted orthe date it becomes effective, the nonforfeitable percentage (determined as ofsuch date) of such Employee’s right to his employer-derived accrued benefitshall not be less than his percentage computed under the Plan without regard tosuch amendment.

 

No amendment tothe Plan shall be effective to eliminate or restrict an optional form ofbenefit with respect to benefits attributable to service before the amendmentexcept as provided in the MERGERS AND DIRECT TRANSFERS SECTION of this article andbelow:

 

(a)                                  ThePlan is amended to eliminate or restrict the ability of a Participant toreceive payment of his Account balance under a particular optional form ofbenefit and the amendment satisfies the condition in (1) and the Plan satisfiesthe condition in (2) below:

 

(1)                                  Theamendment provides a single sum distribution form that is otherwise identicalto the optional form of benefit eliminated or restricted. For purposes of thiscondition (1), a single sum distribution form is otherwise. Identical only ifit is identical in all respects to the eliminated or restricted optional formof benefit (or would be identical except that it provides greater rights to theParticipant) except with respect to the timing of payments after commencement.

 

(2)                                  ThePlan provides that the amendment shall not apply to any distribution with anAnnuity Starting Date earlier than the earlier of:

 

(i)                                     the90th day after the date the Participant receiving the distribution has beenfurnished a summary that reflects the amendment and that satisfies the ERISArequirements at 29 CFR 2520.104b-3 relating to a summary of materialmodifications, or

 

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(ii)                                  thefirst day of the second Plan Year following the Plan Year in which theamendment is adopted.

 

(b)                                 ThePlan is amended to eliminate or restrict in-kind distributions and theconditions in Q&A 2(b)(2)(iii) in section 1.411 (d)-4 of theregulations are met.

 

If, as a resultof an amendment, an Employer Contribution is removed that is not 100%immediately vested when made, the applicable vesting schedule shall remainin effect after the date of such amendment. The Participant shall not becomeimmediately 100% vested in such Contributions as a result of the elimination ofsuch Contribution except as otherwise specifically provided in the Plan.

 

An amendmentshall not decrease a Participant’s vested interest in the Plan. If an amendmentto the Plan, or a deemed amendment in the case of a change in top-heavy statusof the Plan as provided in the MODIFICATION OF VESTING REQUIREMENTS SECTION ofArticle XI, changes the computation of the percentage used to determinethat portion of a Participant’s Account attributable to Employer Contributionswhich is nonforfeitable (whether directly or indirectly), each Participant orformer Participant

 

(c)                                  whohas completed at least three Years of Service on the date the election perioddescribed below ends (five Years of Service if the Participant does not have atleast one Hour-of-Service in a Plan Year beginning after December 31,1988) and

 

(d)                                 whosenonforfeitable percentage will be determined on any date after the date of thechange

 

may elect, during theelection period, to have the nonforfeitable percentage of his Account thatresults from Employer Contributions determined without regard to the amendment.This election may not be revoked. If after the Plan is changed, the Participant’snonforfeitable percentage will at all times be as great as it would have beenif the change had not been made, no election needs to be provided. The electionperiod shall begin no later than the date the Plan amendment is adopted, ordeemed adopted in the case of a change in the top-heavy status of the Plan, andend no earlier than the 60th day after the latest of the date the amendment isadopted (deemed adopted) or becomes effective, or the date the Participant isissued written notice of the amendment (deemed amendment) by the Employer orthe Plan Administrator.

 

SECTION 10.02—DIRECT ROLLOVERS.

 

Notwithstandingany provision of the Plan to the contrary that would otherwise limit aDistributee’s election under this section, a Distributee may elect, at the timeand in the manner prescribed by the Plan Administrator, to have any portion ofan Eligible Rollover Distribution paid directly to an Eligible Retirement Planspecified by the Distributee in a Direct Rollover.

 

Anydistributions made under the SMALL AMOUNTS SECTION of this article (orwhich are small amounts payments made under Article VIII at completetermination of the Plan) which are Eligible Rollover Distributions and forwhich the Distributee has not elected to either have such distribution paid tohim or to an Eligible Retirement Plan shall be paid to the Distributee.

 

SECTION 10.03—MERGERS AND DIRECT TRANSFERS.

 

The Plan may not be merged or consolidatedwith, nor have its assets or liabilities transferred to, any other retirementplan, unless each Participant in the plan would (if the plan then terminated)receive a benefit

 

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immediately after the merger, consolidation, or transfer which is equalto or greater than the benefit the Participant would have been entitled toreceive immediately before the merger, consolidation, or transfer (if this Planhad then terminated). The Employer may enter into merger agreements or directtransfer of assets agreements with the employers under other retirement planswhich are qualifiable under Code Section 401(a), including an electivetransfer, and may accept the direct transfer of plan assets, or may transfer planassets, as a party to any such agreement. The Employer shall not consent to, orbe a party to a merger, consolidation, or transfer of assets with a definedbenefit plan if such action would result in a defined benefit feature beingmaintained under this Plan.

 

Notwithstandingany provision of the Plan to the contrary, to the extent any optional form ofbenefit under the Plan permits a distribution prior to the Employee’sretirement, death, disability, or severance from employment, and prior to plantermination, the optional form of benefit is not available with respect tobenefits attributable to assets (including the post-transfer earnings thereon)and liabilities that are transferred, within the meaning of Code Section 414(l),to this Plan from a money purchase pension plan qualified under Code Section 401(a)(other than any portion of those assets and liabilities attributable tovoluntary employee contributions).

 

The Plan mayaccept a direct transfer of plan assets on behalf of an Eligible Employee. Ifthe Eligible Employee is not an Active Participant when the transfer is made,the Eligible Employee shall be deemed to be an Active Participant only for thepurpose of investment and distribution of the transferred assets. EmployerContributions shall not be made for or allocated to the Eligible Employee,until the time he meets all of the requirements to become an ActiveParticipant.

 

The Plan shallhold, administer, and distribute the transferred assets as a part of the Plan.The Plan shall maintain a separate account for the benefit of the Employee onwhose behalf the Plan accepted the transfer in order to reflect the value ofthe transferred assets.

 

Unless atransfer of assets to the Plan is an elective transfer as described below, thePlan shall apply the optional forms of benefit protections described in theAMENDMENTS SECTION of this article to all transferred assets.

 

A Participant’sprotected benefits may be eliminated upon transfer between qualified definedcontribution plans if the conditions in Q&A 3(b)(1) in section 1.411(d)-4of the regulations are met. The transfer must meet all of the other applicablequalification requirements.

 

A Participant’sprotected benefits may be eliminated upon transfer between qualified plans(both defined benefit and defined contribution) if the conditions in Q&A3(c)(1) in section 1.411 (d)-4 of the regulations are met. Beginning January 1,2002, if the Participant is eligible to receive an immediate distribution ofhis entire nonforfeitable accrued benefit in a single sum distribution thatwould consist entirely of an eligible rollover distribution under Code Section 401(a)(31),such transfer will be accomplished as a direct rollover under Code Section 401(a)(31).The rules applicable to distributions under the plan would apply to thetransfer, but the transfer would not be treated as a distribution for purposesof the minimum distribution requirements of Code Section 401 (a)(9).

 

SECTION 10.04—PROVISIONS RELATING TO THE INSURER ANDOTHER PARTIES.

 

The obligationsof an Insurer shall be governed solely by the provisions of the AnnuityContract. The Insurer shall not be required to perform any act not provided inor contrary to the provisions of the Annuity

 

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Contract. Each Annuity Contract when purchased shall comply with thePlan. See the CONSTRUCTION SECTION of this article.

 

Any issuer ordistributor of investment contracts or securities is governed solely by theterms of its policies, written investment contract, prospectuses, securityinstruments, and any other written agreements entered into with the Trusteewith regard to such investment contracts or securities.

 

Such Insurer,issuer or distributor is not a party to the Plan, nor bound in any way by thePlan provisions. Such parties shall not be required to look to the terms ofthis Plan, nor to determine whether the Employer, the Plan Administrator, theTrustee, or the Named Fiduciary have the authority to act in any particularmanner or to make any contract or agreement.

 

Until notice ofany amendment or termination of this Plan or a change in Trustee has beenreceived by the Insurer at its home office or an issuer or distributor at theirprincipal address, they are and shall be fully protected in assuming that thePlan has not been amended or terminated and in dealing with any party acting asTrustee according to the latest information which they have received at theirhome office or principal address.

 

SECTION 10.05—EMPLOYMENT STATUS.

 

Nothingcontained in this Plan gives an Employee the right to be retained in theEmployer’s employ or to interfere with the Employer’s right to discharge anyEmployee.

 

SECTION 10.06—RIGHTS TO PLAN ASSETS.

 

An Employeeshall not have any right to or interest in any assets of the Plan upontermination of employment or otherwise except as specifically provided underthis Plan, and then only to the extent of the benefits payable to such Employeeaccording to the Plan provisions.

 

Any finalpayment or distribution to a Participant or his legal representative or to anyBeneficiaries, spouse or Contingent Annuitant of such Participant under thePlan provisions shall be in full satisfaction of all claims against the Plan,the Named Fiduciary, the Plan Administrator, the Insurer, the Trustee, and theEmployer arising under or by virtue of the Plan.

 

SECTION 10.07—BENEFICIARY.

 

EachParticipant may name a Beneficiary to receive any death benefit (other than anyincome payable to a Contingent Annuitant) that may arise out of hisparticipation in the Plan. The Participant may change his Beneficiary from timeto time. Unless a qualified election has been made, for purposes ofdistributing any death benefits before the Participant’s Retirement Date, theBeneficiary of a Participant who has a spouse who is entitled to a QualifiedPreretirement Survivor Annuity shall be the Participant’s spouse. TheParticipant’s Beneficiary designation and any change of Beneficiary shall besubject to the provisions of the ELECTION PROCEDURES SECTION of Article VI.It is the responsibility of the Participant to give written notice to theInsurer of the name of the Beneficiary on a form furnished for that purpose.

 

With theEmployer’s consent, the Plan Administrator may maintain records of Beneficiarydesignations for Participants before their Retirement Dates. In that event, thewritten designations made by Participants

 

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shall be filed with the Plan Administrator. If a Participant diesbefore his Retirement Date, the Plan Administrator shall certify to the Insurerthe Beneficiary designation on its records for the Participant.

 

If there is noBeneficiary named or surviving when a Participant dies, the Participant’sBeneficiary shall be the Participant’s surviving spouse, or where there is nosurviving spouse, the executor or administrator of the Participant’s estate.

 

SECTION 10.08—NONALIENATION OF BENEFITS.

 

Benefitspayable under the Plan are not subject to the claims of any creditor of anyParticipant, Beneficiary, spouse or Contingent Annuitant. A Participant,Beneficiary, spouse or Contingent Annuitant does not have any rights toalienate, anticipate, commute, pledge, encumber, or assign any of suchbenefits, except in the case of a loan as provided in the LOANS TO PARTICIPANTSSECTION of Article V. The preceding sentences shall also apply to thecreation, assignment, or recognition of a right to any benefit payable withrespect to a Participant according to a domestic relations order, unless suchorder is determined by the Plan Administrator to be a qualified domesticrelations order, as defined in Code Section 414(p), or any domesticrelations order entered before January 1, 1985. The preceding sentencesshall not apply to any offset of a Participant’s benefits provided under thePlan against an amount the Participant is required to pay the Plan with respectto a judgement, order, or decree issued, or a settlement entered into, on orafter August 5, 1997, which meets the requirements of Code Sections401(a)(13)(C) or (D).

 

SECTION 10.09—CONSTRUCTION.

 

The validity ofthe Plan or any of its provisions is determined under and construed accordingto Federal law and, to the extent permissible, according to the laws of thestate in which the Employer has its principal office. In case any provision ofthis Plan is held illegal or invalid for any reason, such determination shallnot affect the remaining provisions of this Plan, and the Plan shall beconstrued and enforced as if the illegal or invalid provision had never beenincluded.

 

In the event ofany conflict between the provisions of the Plan and the terms of any AnnuityContract issued hereunder, the provisions of the Plan control.

 

SECTION 10.10—LEGAL ACTIONS.

 

No personemployed by the Employer; no Participant, former Participant, or theirBeneficiaries; nor any other person having or claiming to have an interest inthe Plan is entitled to any notice of process. A final judgment entered in anysuch action or proceeding shall be binding and conclusive on all persons havingor claiming to have an interest in the Plan.

 

SECTION 10.11—SMALL AMOUNTS.

 

If consent ofthe Participant is not required for a benefit which is immediatelydistributable in the ELECTION PROCEDURES SECTION of Article VI, aParticipant’s entire Vested Account shall be paid in a single sum as of theearliest of his Retirement Date, the date he dies, or the date he ceases to bean Employee for any other reason (the date the Employer provides notice to therecord keeper of the Plan of such event, if later). For purposes of thissection, if the Participant’s Vested Account is zero, the Participant shall bedeemed to have received a distribution of such Vested Account. If a Participantwould have received a

 

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distribution under the first sentence of this paragraph but for thefact that the Participant’s consent was needed to distribute a benefit which isimmediately distributable, and if at a later time consent would not be neededto distribute a benefit which is immediately distributable and such Participanthas not again become an Employee, such Vested Account shall be paid in a singlesum. This is a small amounts payment.

 

If a smallamounts payment is made as of the date the Participant dies, the small amountspayment shall be made to the Participant’s Beneficiary (spouse if the deathbenefit is payable to the spouse). If a small amounts payment is made while theParticipant is living, the small amounts payment shall be made to theParticipant. The small amounts payment is in full settlement of benefitsotherwise payable.

 

No other smallamounts payments shall be made.

 

SECTION 10.12—WORD USAGE.

 

The masculinegender, where used in this Plan, shall include the feminine gender and thesingular words, as used in this Plan, may include the plural, unless thecontext indicates otherwise.

 

The words “inwriting” and “written,” where used in this Plan, shall include any other forms,such as voice response or other electronic system, as permitted by anygovernmental agency to which the Plan is subject.

 

SECTION 10.13—CHANGE IN SERVICE METHOD.

 

(a)                                  Changeof Service Method Under This Plan. If this Plan is amended to change the methodof crediting service from the elapsed time method to the hours method for anypurpose under this Plan, the Employee’s service shall be equal to the sum of(1), (2), and (3) below:

 

(1)                                  Thenumber of whole years of service credited to the Employee under the Plan as ofthe date the change is effective.

 

(2)                                  Oneyear of service for the applicable computation period in which the change iseffective if he is credited with the required number of Hours-of-Service. Ifthe Employer does not have sufficient records to determine the Employee’sactual Hours-of-Service in that part of the service period before the effectivedate of the change, the Hours-of-Service shall be determined using anequivalency. For any month in which he would be required to be credited withone Hour-of-Service, the Employee shall be deemed for purposes of this section tobe credited with 190 Hours-of-Service.

 

(3)                                  TheEmployee’s service determined under this Plan using the hours method after theend of the computation period in which the change in service method waseffective.

 

If this Plan is amended to change the methodof crediting service from the hours method to the elapsed time method for anypurpose under this Plan, the Employee’s service shall be equal to the sum of(4), (5), and (6) below:

 

(4)                                  Thenumber of whole years of service credited to the Employee under the Plan as ofthe beginning of the computation period in which the change in service methodis effective.

 

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(5)                                  thegreater of (i) the service that would be credited to the Employee for thatentire computation period using the elapsed time method or (ii) the servicecredited to him under the Plan as of the date the change is effective.

 

(6)                                  TheEmployee’s service determined under this Plan using the elapsed time methodafter the end of the applicable computation period in which the change inservice method was effective.

 

(b)                                 TransfersBetween Plans with Different Service Methods. If an Employee has been aparticipant in another plan of the Employer which credited service under theelapsed time method for any purpose which under this Plan is determined usingthe hours method, then the Employee’s service shall be equal to the sum of (1),(2), and (3) below:

 

(1)                                  Thenumber of whole years of service credited to the Employee under the plan as ofthe date he became an Eligible Employee under this Plan.

 

(2)                                  Oneyear of service for the applicable computation period in which he became anEligible Employee if he is credited with the required number ofHours-of-Service. If the Employer does not have sufficient records to determinethe Employee’s actual Hours-of-Service in that part of the service periodbefore the date he became an Eligible Employee, the Hours-of-Service shall bedetermined using an equivalency. For any month in which he would be required tobe credited with one Hour-of-Service, the Employee shall be deemed for purposesof this section to be credited with 190 Hours-of-Service.

 

(3)                                  TheEmployee’s service determined under this Plan using the hours method after theend of the computation period in which he became an Eligible Employee.

 

If an Employee has been a participant in anotherplan of the Employer which credited service under the hours method for anypurpose which under this Plan is determined using the elapsed time method, thenthe Employee’s service shall be equal to the sum of (4), (5), and (6) below:

 

(4)                                  Thenumber of whole years of service credited to the Employee under the other planas of the beginning of the computation period under that plan in which hebecame an Eligible Employee under this Plan.

 

(5)                                  Thegreater of (i) the service that would be credited to the Employee for thatentire computation period using the elapsed time method or (ii) the servicecredited to him under the other plan as of the date he became an EligibleEmployee under this Plan.

 

(6)                                  TheEmployee’s service determined under this Plan using the elapsed time methodafter the end of the applicable computation period under the other plan inwhich he became an Eligible Employee.

 

If an Employee has been a participant in aControlled Group member’s plan which credited service under a different methodthan is used in this Plan, in order to determine entry and vesting, theprovisions in (b) above shall apply as though the Controlled Group member’splan were a plan of the Employer.

 

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Any modification of service contained in thisPlan shall be applicable to the service determined pursuant to this section.

 

SECTION 10.14—MILITARYSERVICE.

 

Notwithstanding any provision of this Plan tothe contrary, the Plan shall provide contributions, benefits, and servicecredit with respect to qualified military service in accordance with Code Section 414(u).Loan repayments shall be suspended under this Plan as permitted under Code Section 414(u).

 

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ARTICLE XI

 

TOP-HEAVYPLAN REQUIREMENTS

 

SECTION 11.01—APPLICATION.

 

The provisions of this article shallsupersede all other provisions in the Plan to the contrary.

 

For the purposeof applying the Top-heavy Plan requirements of this article, all members of theControlled Group shall be treated as one Employer. The term Employer, as usedin this article, shall be deemed to include all members of the ControlledGroup, unless the term as used clearly indicates only the Employer is meant.

 

The accruedbenefit or account of a participant which results from deductible employeecontributions shall not be included for any purpose under this article.

 

The minimumvesting and contribution provisions of the MODIFICATION OF VESTING REQUIREMENTSand MODIFICATION OF CONTRIBUTIONS SECTIONS of this article shall not applyto any Employee who is included in a group of Employees covered by a collectivebargaining agreement which the Secretary of Labor finds to be a collective bargainingagreement between employee representatives and one or more employers, includingthe Employer, if there is evidence that retirement benefits were the subject ofgood faith bargaining between such representatives. For this purpose, the term “employeerepresentatives” does not include any organization more than half of whosemembers are employees who are owners, officers, or executives.

 

SECTION 11.02—DEFINITIONS.

 

For purposes ofthis article the following terms are defined: Aggregation Group means:

 

(a)                                  eachof the Employer’s qualified plans in which a Key Employee is a participantduring the Plan Year containing the Determination Date (regardless of whetherthe plan was terminated) or one of the four preceding Plan Years,

 

(b)                                 eachof the Employer’s other qualified plans which allows the plan(s) described in(a) above to meet the nondiscrimination requirement of Code Section 401(a)(4)or the minimum coverage requirement of Code Section 410, and

 

(c)                                  anyof the Employer’s other qualified plans not included in (a) or (b) above whichthe Employer desires to include as part of the Aggregation Group. Such aqualified plan shall be included only if the Aggregation Group would continueto satisfy the requirements of Code Section 401(a)(4) and Code Section 410.

 

The plans in (a) and (b) above constitute the “required”Aggregation Group. The plans in (a), (b), and (c) above constitute the “permissive”Aggregation Group.

 

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Compensation means compensation as defined inthe CONTRIBUTION LIMITATION SECTION of Article III. For purposes ofdetermining who is a Key Employee in years beginning before January 1,1998, Compensation shall include, in addition to compensation as defined in theCONTRIBUTION LIMITATION SECTION of Article Ill, electivecontributions. Elective contributions are amounts excludible from the grossincome of the Employee under Code Sections 125, 402(e)(3), 402(h)(1)(B), or403(b), and contributed by the Employer, at the Employee’s election, to a Code Section 401(k)arrangement, a simplified employee pension, cafeteria plan, or tax-shelteredannuity. Elective contributions also include amounts deferred under a Code Section 457plan maintained by the Employer.

 

Determination Date means as to any plan, for anyplan year subsequent to the first plan year, the last day of the preceding planyear. For the first plan year of the plan, the last day of that year.

 

Key Employee means any Employee or formerEmployee (and the Beneficiaries of such Employee) who at any time during thedetermination period was:

 

(a)                                  anofficer of the Employer if such individual’s annual Compensation exceeds 50percent of the dollar limitation under Code Section 415(b)(1)(A).

 

(b)                                 anowner (or considered an owner under Code Section 318) of one of the tenlargest interests in the Employer if such individual’s annual Compensationexceeds 100 percent of the dollar limitation under Code Section 415(c)(1)(A).

 

(c)                                  a5-percent owner of the Employer, or

 

(d)                                 a1-percent owner of the Employer who has annual Compensation of more than$150,000.

 

The determination period is the Plan Yearcontaining the Determination Date and the four preceding Plan Years.

 

The determination of who is a Key Employeeshall be made according to Code Section 416(i)(1) and the regulationsthereunder.

 

Non-key Employee means any Employee who isnot a Key Employee.

 

Present Value means the present value of aparticipant’s accrued benefit under a defined benefit plan or purposes ofestablishing Present Value to compute the Top-heavy Ratio, any benefit shall bediscounted only for 7.5% interest and mortality according to the 1971 GroupAnnuity Table (Male) without the 7% margin but with projection by Scale E from1971 to the later of (a) 1974, or (b) the year determined by adding the age to1920, and wherein for females the male age six years younger is used.

 

Top-heavy Plan means a plan which istop-heavy for any plan year beginning after December 31, 1983. This Planshall be top-heavy if any of the following conditions exist:

 

(a)                                  TheTop-heavy Ratio for this Plan exceeds 60 percent and this Plan is not part ofany required Aggregation Group or permissive Aggregation Group.

 

(b)                                 ThisPlan is a part of a required Aggregation Group, but not part of a permissiveAggregation Group, and the Top-heavy Ratio for the required Aggregation Groupexceeds 60 percent.

 

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(c)                                  ThisPlan is a part of a required Aggregation Group and part of a permissiveAggregation Group and the Top-heavy Ratio for the permissive Aggregation Groupexceeds 60 percent.

 

Top-heavy Ratio means:

 

(a)                                  Ifthe Employer maintains one or more defined contribution plans (including anysimplified employee pension plan) and the Employer has not maintained anydefined benefit plan which during the five-year period ending on theDetermination Date(s) has or has had accrued benefits, the Top-heavy Ratio forthis Plan alone or for the required or permissive Aggregation Group, asappropriate, is a fraction, the numerator of which is the sum of the accountbalances of all Key Employees as of the Determination Date(s) (including anypart of any account balance distributed in the five-year period ending on theDetermination Date(s)), and the denominator of which is the sum of all accountbalances (including any part of any account balance distributed in thefive-year period ending on the Distribution Date(s)), both computed inaccordance with Code Section 416 and the regulations thereunder. Both thenumerator and denominator of the Top-heavy Ratio are increased to reflect anycontribution not actually made as of the Determination Date, but which isrequired to be taken into account on that date under Code Section 416 andthe regulations thereunder.

 

(b)                                 Ifthe Employer maintains one or more defined contribution plans (including anysimplified employee pension plan) and the Employer maintains or has maintainedone or more defined benefit plans which during the five-year period ending onthe Determination Date(s) has or has had accrued benefits, the Top-heavy Ratiofor any required or permissive Aggregation Group, as appropriate, is afraction, the numerator of which is the sum of the account balances under theaggregated defined contribution plan or plans of all Key Employees determinedin accordance with (a) above, and the Present Value of accrued benefits underthe aggregated defined benefit plan or plans for all Key Employees as of theDetermination Date(s), and the denominator of which is the sum of the accountbalances under the aggregated defined contribution plan or plans for allparticipants, determined in accordance with (a) above, and the Present Value ofaccrued benefits under the defined benefit plan or plans for all participantsas of the Determination Date(s), all determined in accordance with Code Section 416and the regulations thereunder. The accrued benefits under a defined benefitplan in both the numerator and denominator of the Top-heavy Ratio are increasedfor any distribution of an accrued benefit made in the five-year period endingon the Determination Date.

 

(c)                                  Forpurposes of (a) and (b) above, the value of account balances and the PresentValue of accrued benefits will be determined as of the most recent ValuationDate that falls within or ends with the 12-month period ending on theDetermination Date, except as provided in Code Section 416 and theregulations thereunder for the first and second plan years of a defined benefitplan. The account balances and accrued benefits of a participant (i) who is nota Key Employee but who was a Key Employee in a prior year or (ii) who has notbeen credited with at least an hour of service with any employer maintainingthe plan at any time during the five-year period ending on the DeterminationDate will be disregarded. The calculation of the Top-heavy Ratio and the extentto which distributions, rollovers, and transfers are taken into account will bemade in accordance with Code Section 416 and the regulations thereunder.Deductible employee contributions will not be taken into account for purposesof computing the Top-heavy Ratio. When aggregating plans, the value of accountbalances and accrued benefits will be calculated with reference to theDetermination Dates that fall within the same calendar year.

 

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The accrued benefit of a participant otherthan a Key Employee shall be determined under (i) the method, if any, thatuniformly applies for accrual purposes under all defined benefit plansmaintained by the Employer, or (ii) if there is no such method, as if suchbenefit accrued not more rapidly than the slowest accrual rate permitted underthe fractional rule of Code Section 411(b)(1)(C).

 

SECTION 11.03—MODIFICATION OF VESTING REQUIREMENTS.

 

If aParticipant’s Vesting Percentage determined under Article I is not atleast as great as his Vesting Percentage would be if it were determined under aschedule permitted in Code Section 416, the following shall apply.During any Plan Year in which the Plan is a Top-heavy Plan, the Participant’sVesting Percentage shall be the greater of the Vesting Percentage determinedunder Article I or the schedule below.

 
| **VESTING SERVICE** | ** ** | **NONFORFEITABLE  PERCENTAGE** | ** ** |
|---------------------|------------|--------------------------------|------------|
| **(whole years)**   |       |                           |       |
| Less than 2         |       | 0                              |       |
| 2                   |       | 20                             |       |
| 3                   |       | 40                             |       |
| 4                   |       | 60                             |       |
| 5                   |       | 80                             |       |
| 6 or more           |       | 100                            |       |

 

The schedule aboveshall not apply to Participants who are not credited with an Hour-of-Serviceafter the Plan first becomes a Top-heavy Plan. The Vesting Percentagedetermined above applies to the portion of the Participant’s Account which ismultiplied by a Vesting Percentage to determine his Vested Account, includingbenefits accrued before the effective date of Code Section 416 andbenefits accrued before this Plan became a Top-heavy Plan.

 

If, in a laterPlan Year, this Plan is not a Top-heavy Plan, a Participant’s VestingPercentage shall be determined under Article I. A Participant’s VestingPercentage determined under either Article I or the schedule aboveshall never be reduced and the election procedures of the AMENDMENTS SECTION ofArticle X shall apply when changing to or from the schedule as thoughthe automatic change were the result of an amendment.

 

The part of theParticipant’s Vested Account resulting from the minimum contributions requiredpursuant to the MODIFICATION OF CONTRIBUTIONS SECTION of this article (tothe extent required to be nonforfeitable under Code Section 416(b)) maynot be forfeited under Code Section 411(a)(3)(B) or (D).

 

SECTION 11.04—MODIFICATIONOF CONTRIBUTIONS.

 

During any PlanYear in which this Plan is a Top-heavy Plan, the Employer shall make a minimumcontribution as of the last day of the Plan Year for each Non-key Employee whois an Employee on the last day of the Plan Year and who was an ActiveParticipant at any time during the Plan Year. A Non-key Employee is notrequired to have a minimum number of Hours-of-Service or minimum amount ofCompensation in order to be entitled to this minimum. A Non-key Employee whofails to be an Active Participant merely because his Compensation is less thana stated amount or merely because of a failure to make mandatory participant

 

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contributions or, in the case of a cash or deferred arrangement,elective contributions shall be treated as if he were an Active Participant.The minimum is the lesser of (a) or (b) below:

 

(a)                                  3percent of such person’s Compensation for such Plan Year.

 

(b)                                 The“highest percentage” of Compensation for such Plan Year at which the Employer’scontributions are made for or allocated to any Key Employee. The highestpercentage shall be determined by dividing the Employer Contributions made foror allocated to each Key Employee during the Plan Year by the amount of hisCompensation for such Plan Year, and selecting the greatest quotient (expressedas a percentage). To determine the highest percentage, all of the Employer’sdefined contribution plans within the Aggregation Group shall be treated as oneplan. The minimum shall be the amount in (a) above if this Plan and a definedbenefit plan of the Employer are required to be included in the AggregationGroup and this Plan enables the defined benefit plan to meet the requirementsof Code Section 401(a)(4) or 410.

 

For purposes of(a) and (b) above, Compensation shall be limited by Code Section 401 (a)(17).

 

If the Employer’scontributions and allocations otherwise required under the defined contributionplan(s) are at least equal to the minimum above, no additional contributionshall be required. If the Employer’s total contributions and allocations areless than the minimum above, the Employer shall contribute the difference forthe Plan Year.

 

The minimumcontribution applies to all of the Employer’s defined contribution plans in theaggregate which are Top-heavy Plans. A minimum contribution under a profitsharing plan shall be made without regard to whether or not the Employer hasprofits.

 

If a person whois otherwise entitled to a minimum contribution above is also covered underanother defined contribution plan of the Employer’s which is a Top-heavy Planduring that same Plan Year, any additional contribution required to meet theminimum above shall be provided in this Plan.

 

If a person whois otherwise entitled to a minimum contribution above is also covered under adefined benefit plan of the Employer’s which is a Top-heavy Plan during thatsame Plan Year, the minimum benefits for him shall not be duplicated. Thedefined benefit plan shall provide an annual benefit for him on, or adjustedto, a straight life basis equal to the lesser of:

 

(c)                                  2percent of his average compensation multiplied by his years of service, or

 

(d)                                 20percent of his average compensation.

 

Average compensationand years of service shall have the meaning set forth in such defined benefitplan for this purpose.

 

For purposes ofthis section, any employer contribution made according to a salary reduction orsimilar arrangement and employer contributions which are matchingcontributions, as defined in Code Section 401(m), shall not apply indetermining if the minimum contribution requirement has been met, but shallapply in determining the minimum contribution required.

 

The requirements of this section shallbe met without regard to any Social Security contribution.

 

 

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SECTION 11.05—MODIFICATIONOF CONTRIBUTION LIMITATION.

 

If theprovisions of subparagraph (g) of the CONTRIBUTION LIMITATION SECTION of Article IIIare applicable for any Limitation Year during which this Plan is a Top-heavyPlan, the contribution limitations shall be modified. The definitions ofDefined Benefit Plan Fraction and Defined Contribution Plan Fraction in theCONTRIBUTION LIMITATION SECTION of Article III shall be modified bysubstituting “100 percent” in lieu of “125 percent.” In addition, an adjustmentshall be made to the numerator of the Defined Contribution Plan Fraction. Theadjustment is a reduction of that numerator similar to the modification of theDefined Contribution Plan Fraction described in the CONTRIBUTION LIMITATION SECTION ofArticle III, and shall be made with respect to the last Plan Yearbeginning before January 1, 1984.

 

Themodifications in the paragraph above shall not apply with respect to aParticipant so long as employer contributions, forfeitures, or nondeductibleemployee contributions are not credited to his account under this or any of theEmployer’s other defined contribution plans and benefits do not accrue for suchParticipant under the Employer’s defined benefit plan(s), until the sum of hisDefined Contribution and Defined Benefit Plan Fractions is less than 1.0.

 

This section shall cease to applyeffective as of the first Limitation Year beginning on or after January 1,2000.

 

81

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By executingthis Plan, the Primary Employer acknowledges having counseled to the extentnecessary with selected legal and tax advisors regarding the Plan’s legal andtax implications.

 

Executed this                                          day of                                                                                            ,                        

 

 
|   | GOVERNMENT TECHNOLOGY  SERVICES, INC. By: |
|--------|-------------------------------------------|
|   |                                      |
|   |                                      |
|   |                                      | Title |   |
|   |                                      |   |   |
|   |                                      | Defined  Contribution Plan 8.0 |   |

 

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OPERATIONAL HISTORY ADDENDUM TO

PRINCIPAL FINANCIAL GROUPDEFINED CONTRIBUTION PLAN DOCUMENTS

 

The following provisions apply for Plan Years during the transitionperiod between the earliest effective date under the law changes, collectivelyreferred to as GUST, and the date the Employer adopts the GUST restated plan.

 

Definition of Highly Compensated. Employee

 

a)                                      Forthe Plan Years marked, the Employer made the top-paid group election.

 

•                                          o1997 o 1998 o1999 o 2000 o2001

 

b)                                     For the Plan Yearsmarked, the Employer made the calendar year data election.

 

•                                          o1997 o 1998 o1999 o 2000 o2001

 

c)                                      Forthe Plan Year marked, the Employer made the calendar year election.

 

•                                          o1997

 

ADP/ACP Testing

 

a)                                      Forthe Plan Years marked, the Employer used the prior year testing method for theADP/ACP test.

 

o1997 ý 1998 ý1999 ý 2000 o2001

 

b)                                     For the Plan Years marked, the Employerused the current year testing method for the PDP/ACP test.

 

ý1997 o 1998 o1999 o 2000 o2001

 

Complete (c) and (d) below if this is a plan that was restated to aPrincipal Financial Group plan document after December 31, 1996 and theADP and ACP tests. used different testing methods.

 

c)                                      Forthe Plan Years marked, the Employer used the prior year testing method for theADP test and the current year testing method for the ACP test.

 

o1997 o 1998 o1999 o 2000 o2001

 

d)                                     Forthe Plan Years marked, the Employer used the current year testing method forthe ADP test and the prior year testing method for the ACP test.

 

o1997 o 1998 o1999 o 2000 o2001

 

 

1

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e)                                      Forthe Plan Year marked, the Employer used 3% as the nonhighly compensatedemployees ADP.

 

o1997 o 1998 o1999 o 2000 o2001

 

Distribution Requirements (Minimum Distributions)

 

a)                                      Theplan will apply the minimum distribution requirements of Code Section 401(a)(9)in accordance with the 2001 Proposed Regulations for distributions made on orafter June 14, 2001, for calendar years beginning on or after January 1,2001, unless otherwise specified below.

 

1)                                      o These provisions will be applied fordistributions made on or after                             for calendar years beginning on or after January 1, 2001. Such date shallbe substituted for June 14, 2001, in the applicable provisions of thePlan.

 

2)                                      o These provisions will be applied forall distributions made for calendar years beginning on or after January 1,2001.

 

3)                                      o These provisions will be applied forall distributions made for calendar years beginning on or after January 1,2002. These provisions will not be applied for distributions made for the 2001calendar year.

 

Compensation Definition (Qualified Transportation Fringe Benefits)

 

a)                                      Amountsexcludible from the gross income of the Employee by reason of Code Section 132(0(4)shall not be included in any definition of Compensation for years beginningbefore January 1, 2001, unless otherwise specified below.

 

1)                                      oSuch amounts shall be included for years beginning January 1.                                                    .. (Must be 1998, 1999, or 2000.)

 

Eligible Rollover Distributions (Hardship Distributions)

 

a)                                      Hardshipdistributions made after December 31, 1998 are not Eligible RolloverDistributions, unless otherwise specified below.

 

1)                                      o Hardship distributions made after December 31,1999 are not Eligible Rollover Distributions.

 

2)                                      o Hardshipdistributions made after are not Eligible Rollover Distributions. (Must bebetween January 1, 1999 and December 31, 1999)

 

401(k) Safe Harbor Provisions

 

a)                                      For the Plan Years marked, the plan operatedas a 401(k) safe harbor plan.

 

o 1999 o 2000 o 2001

 

2

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b)                                     The 401(k) safe harbor provisions satisfiedthe ADP/ACP test safe harbors as specified in the plan document, unlessotherwise specified below.

 

1)                                      o The 401(k) safe harbor provisions satisfiedthe ADP/ACP test safe harbors for the 1999 Plan Year for

 

o ADP/ACP                    o ADP only

 

2)                                      o The401(k) sale harbor provisions satisfied the ADP/ACP test safe harbors for the2000 Plan Year for

 

o ADP/ACP                    o ADP only

 

3)                                      o The 401(k) safe harbor provisions satisfiedthe ADP/ACP test safe harbors for the 2001 Plan Year for

 

o ADP/ACP                    o ADP only

 

c)                                      The ADP Test Safe Harbor was satisfied usingthe contributions specified in the plan document, unless otherwise specifiedbelow.

 

1)                                      o For the 1999 Plan Year the ADP Test SafeHarbor was satisfied using

 

o Qualified matching contribution - basicformula.

 

o Qualified matching contribution - enhancedformula

 

o Qualified nonelective contribution

 

2)                                      o For the 2000 Plan Year the ADP Test SafeHarbor was satisfied using

 

o Qualified matching contribution - basicformula.

 

o Qualified matching contribution - enhancedformula

 

o Qualified nonelective contribution.

 

 

3

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Completethese sections it the plan restated to a Principal Financial Group plandocument after December 31, 1996 or this is an individually designed plandocument.

 

SmallAmounts (Involuntary Distributions.)

 

a)                                     The involuntary distribution cash out limit(small amounts limit) was $3,500 for Plan Years beginning before August 6,1997 and was increased to $5,000 for Plan Years beginning on or after August 7,1997, unless otherwise specified below.

 

Sub.

 

1)                                      oThe involuntary distribution cash out limit was increased to $5,000 on                 .(The date the plan restated to a Principal Financial Group prototype orindividually designed plan document with the above involuntary distributioncash out limit or an earlier date if applicable.)

 

2)                                      oPrior to            theinvoluntary distribution cash out limit was         not included in the plan document        $       Note (3) and (4) are only available on an individually designed plan document.

 

3)                                      ýThe involuntary distribution cash out limit is stated in the plan document.

 

4)                                      oThe involuntary distribution cash out limit is not included in the plandocument

 

4

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Repeal of FamilyAggregation

 

a)                                     For the Plan Years marked, the Employerapplied the family aggregation rules for determining the amount ofcontributions made for or allocated to a member.

 

o 1997 o 1998 o 1999 o 2000 o 2001

 

5

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GTSI Corp.

 

3901 Stonecroft boulevard Chantilly,VA2015I-1010

 

AMENDMENT TO ADD TRANSACTION PROCESSING SECTION

 

GTSICORP. 401(K INVESTMENT PLAN)

 

The Plan named abovegives the Employer the right to amend it at any time. According to that right,the Plan is amended effective as of the signature date below, as follows:

 

By adding to the Tableof Contents the following Section 9.08:

 

Section 9.08            TransactionProcessing By adding the following Section 9.08 to Article IX:

 

SECTION 9.08—TRANSACTIONPROCESSING.

 

Transactions (including, butnot limited to, investment directions, trades, loans, and distributions) shallbe processed as soon as administratively practicable after proper directionsare received from the Participant or such other parties. No guarantee is madeby the Plan, PlanAdminister, Trustee, Insurer, or Employer that such transactions will beprocessed on a daily or other basis, and no guarantee is made in any respectregarding the processing time of such transactions.

 

Nothwithstandingany other provision of the Plan, the Employer, the Plan Administrator, or theTrustee reserves the right to not value an investment option on any givenValuation Date for any reason deemed appropriate by the Employer, the PlanAdministrator, or the Trustee. Administrative practicality will be determinedby legitimate business factors (including, but not limited to, failure ofsystems or computer programs, failure of the means of the transmission of data,force majeure, the failure of a service provider to timely receive values orprices, and correction for errors or omissions or the errors or omissions ofany service provider) and in no event will be deemed to be less than 14 days.The processing date of a transaction shall be binding for all purposes of thePlan and considered the applicable Valuation Date for any transaction.

 

This amendment is madean integral part of the aforesaid Plan and is controlling over the terms ofsaid Plan with respect to the particular items addressed expressly herein. Allother provisions of the Plan remain unchanged and controlling.

 

1

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Unless otherwise stated on any page of this amendment, eligibility forbenefits and the amount of any benefits payable to or on behalf of anindividual who is an Inactive Participant on the effective date(s) statedabove, shall be determined according to the provisions of the aforesaid Plan asin effect on the day before he became an Inactive Participant.

 

 
| Signed this 31 day of | December 2003   |   |
|-----------------------|----------------------|--------|
|                  |                 |   |
| For the Employer      |
|                  |
| By                    | /s/ Bridget Atkinson |   |
| Bridget Atkinson      |
|                  |
| Title                 | VP, HR               |   |
|                       |                      |        |  |  |  |  |

 

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TO COMPLY WIH THE 401(a)(9) FINAL AND TEMPORARY REGULATIONS

 

 

----

 

TOCOMPLY WIH THE 401(a)(9) FINAL AND TEMPORARY REGULATIONS

 

PlanName GTSI CORP. 401(K)INVESTMENT PLAN

 

The plan named above gives the Employer the right to amend it at anytime. According to that right, the Plan is amended by adopting the modelamendment set forth below.

 

The plan’s existing minimum distribution provisions are superseded tothe extent they are inconsistent with the provisions of this model amendment,but those provisions that are not inconsistent (such as the plan’s definitionof required beginning date) shall be retained. The plan’s minimum distributionprovisions are amended as follows:

 

ARTICLE VII. MINIMUM DISTRIBUTION REQUIREMENTS. Section 1.General Rules

 

1.1.                              EffectiveDate. The provisions of this article will apply for purposes ofdetermining required minimum distributions for calendar years beginning withthe 2003 calendar year.

 

1.2.                              Coordinationwith Minimum Distribution Requirements Previously in Effect- This amendment isnot-effective until calendar years beginning with the 2003 calendar year,therefore, no coordination is required.

 

1.3.                              Precendence.The requirements of this article will take precedence over anyinconsistent provisions of the plan.

 

1.4.                              Requirementsof Treasury Regulations Incorporated. All distributions required under this articlewill be determined and made in accordance with the Treasury regulations under section 401(a)(9)of the Internal Revenue Code.

 

1.5                                 TEFRASection 242(b)(2) Elections. Notwithstanding the other provisions of thisarticle, distributions may be made under a designation made before January 1,1984, in accordance with section 242(b)(2) of the Tai. Equity and FiscalResponsibility Act (TEFRA) and the provisions of the plan that relate to section 242(b)(2)of TEFRA.

 

Section 2.Time and Manner of Distribution.

 

2.1                                 RequiredBeginning Date. The participant’s entire interest will be distributed, or beginto be distributed, to the participant no later than the participant’s requiredbeginning date.

 

----

 

2.2.                              Death of Participant Before DistributionsBegin. If the participant dies before distributions begin, the participant’sentire interest will be distributed, or begin to be distributed, no later thanas follows:

 

(a)                                  ifthe participant’s surviving spouse is the participant’s sole designatedbeneficiary, then distributions to the surviving spouse will begin by December31 of the calendar year immediately following the calendar year in which theparticipant would have attained age 70 1/2 if later, except to the extent thatan election is made to receive distributions in accordance with the 5-yearrule. Under the 5-year rule, the participant’s entire interest will bedistributed to the designated beneficiary by December 31 of the calendaryear containing the fifth anniversary of the participant’s death.

 

(b)                                 Ifthe participant’s surviving spouse is not the participant’s sole designatedbeneficiary, then distributions will begin by December 31 of the calendaryear immediately following the calendar year in which the Participant died,except to the extent that an election is made to receive distributions inaccordance with the 5-year rule. Under the 5-year rule, the participant’sentire interest will be distributed to the designated beneficiary by December ofthe calendar year containing the fifth anniversary of the participant’s death.

 

(c)                                  Ifthere is no designated beneficiary as of September 30 of the yearfollowing the year of the participant’s death, the participant’s entireinterest will be distributed by December 31 of the calendar yearcontaining the fifth anniversary of the participant’s death.

 

(d)                                 Ifthe participant’s surviving spouse is the participant’s sole designatedbeneficiary and the surviving spouse dies after the participant but beforedistributions to the surviving spouse begin, this section 2.2, other than section 2.2(a),will apply as if the surviving spouse were the participant.

 

For purposes of this section 2.2. and section 4,unless section 2.2(d) applies, distributions are considered to begin onthe participant’ required beginning date. If section 2.2(d) applies,distributions are considered to begin on the date distributions are required tobegin to the surviving spouse under section 2.2(a). If distributions underan annuity purchased from an insurance company irrevocably commence to theparticipant before

 

2

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the participant’s required beginning date (or tothe participant’s surviving spouse before the date distributions are requiredbegin to the surviving spouse under section 2.2(a)), the datedistributions are considered to begin is the date distributions actuallycommence.

 

2.3.                              Formsof Distribution. Unless the participant’s interest is distributed in the formof an annuity purchased from an insurance company or in a single sum on orbefore the required beginning date, as of the first distribution calendar yeardistributions will be made in accordance with sections 3 and 4 of this article.If the participant’s interest is distributed in the form of an annuitypurchased from an insurance company, distributions thereunder will be made inaccordance with the requirements of section 40l(a)(9) of the code and theTreasury regulations.

 

Section 3. RequiredMinimum Distributions During Participant’s Lifetime.

 

3.1.                              Amountof Required Minimum Distribution For Each Distribution Calendar Year. Duringthe participant’s lifetime, the minimum amount that will distributed for eachdistribution calendar year is the lesser of:

 

(a)                                  thequotient obtained by dividing the participant’s account balance by thedistribution period in the Uniform Lifetime Table set forth in section 1.401(a)(9)—9of the Treasury regulations, using the participant’s age as of the participant’sbirthday in the distribution calendar year; or

 

(b)                                 ifthe participant’s sole designated beneficiary for the distribution calendaryear is the participant’s spouse, the quotient obtained by dividing theparticipant’s account balance by the number in the Joint and Last SurvivorTable set forth in section l-401(a)(9)-9 of the Treasury regulations,using the participant’s and spouse’s attained ages as of the participant’s andspouse’s birthdays in the distribution calendar year.

 

3.2.                              LifetimeRequired Minimum Distributions Continue Through Year of Participant’s Death.Required minimum distributions will be determined under this section 3beginning with the first distribution calendar year and up to and including thedistribution calendar year that includes the participant’s date of death.

 

Section 4. Required Minimum Distributions After Participant’sDeath.

 

4.1.                              DeathOn or After Date Distributions Begin.

 

3

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(a)                                  ParticipantSurvived by Designated Beneficiary. If the participant dies on or after thedate distributions begin and there is a designated beneficiary; the minimumamount that will be distributed for each distribution calendar year after theyear of the participant’s death is the quotient obtained by dividing theparticipant’s account balance by the longer of the remaining life expectancy ofthe participant or the remaining life expectancy of the participant’sdesignated beneficiary, determined as follows:

 

(1)                                  Theparticipant’s remaining life expectancy is calculated using the age of theparticipant in the year of death, reduced by one for each subsequent year.

 

(2)                                  Ifthe participant’s surviving spouse is the participant’s sole designatedbeneficiary, the remaining life expectancy of the surviving spouse iscalculated for each distribution calendar year after the year of theparticipant’s death using the surviving spouse’s age as of the spouse’s birthdayin that year. For distribution calendar years after the year of the survivingspouse’s death, the remaining life expectancy of the surviving spouse iscalculated using the age of the surviving spouse as of the spouse’s birthday inthe calendar year of the spouse’s death, reduced by one for each subsequentcalendar year.

 

(3)                                  Ifthe participant’s surviving spouse is not the participant’s sole designatedbeneficiary, the designated beneficiary’s remaining life expectancy iscalculated using the age of the beneficiary in the year following the year ofthe participant’s death, reduced by one for each subsequent year.

 

(b)                                 NoDesignated Beneficiary. If the participant dies on or after the datedistributions begin and there is no designated beneficiary as of September 30of the year after Vie year of the participant’s death, the minimum amount thatwill be distributed for each distribution calendar year after the year of theparticipant’s death is the quotient obtained by dividing the participant’saccount balance by the participant’s remaining life expectancy calculated usingthe age of the participant in the year of death, reduced by one for eachsubsequent year.

 

4.2.                              DeathBefore Date Distributions Begin.

 

(a)                                  ParticipantSurvived by Designated Beneficary. 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 of the participant’s death is thequotient obtained by dividing the participant’s account balance by theremaining life expectancy of the

 

4

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the year of the participant’s death is thequotient obtained by dividing the participant’s account balance by theremaining life expectancy of the participant’s designated beneficiary,determined as provided in section 4.1, except to the extent that anelection is made to receive distributions in accordance with the 5-year rule.Under the 5-year rule, the participant’s entire interest will be distributed tothe designated beneficiary by December 31 of the calendar year containingthe fifth anniversary of the participant’s death.

 

(b)                                 NoDesignated Beneficiary. If the participant dies before the date distributionsbegin and there is no designated beneficiary as of September 30 of theyear following the year of the participant’s death, distribution of theparticipant’s entire interest will be completed by December 31 of thecalendar year containing the fifth anniversary of the participant’s death.

 

(c)                                  Deathof surviving Spouse Before Distributions to Surviving Spouse Are Required toBegin. If the participant dies before the date distributions begin, theparticipant’s surviving spouse is the participant’s sole designatedbeneficiary, and the surviving spouse dies before the distributions arerequired to begin to the surviving spouse under section 2.2(a), this section 4.2will apply as if the surviving spouse were the participant.

 

Section 5. Definitions.

 

5.1.                              Designatedbeneficiary. The individual who is designated as the beneficiary under theBENEFICIARY SECTION of Article X of the plan and is the designatedbeneficiary under section 401(a)(9) of the Internal Revenue Code and section 1-401(a)(9)-I,Q&A-4, of the Treasury regulations.

 

5

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5.2.                              Distributioncalendar year. A calendar year for which a minimum distribution is required.For distributions beginning before the participant’s death, the firstdistribution calendar year is the calender year immediately preceding thecalendar year which contains the participant’s required 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 2.2. The required minimum distribution for the participant’sfirst distribution calendar year will be made on or before the participant’srequired beginning date. The required minimum distribution for otherdistribution calendar years, including the required minimum distribution forthe distribution year in which the participant’s required beginning dateoccurs, will be made on or before December 31 of that distributioncalendar year.

 

5.3.                              Lifeexpectancy. Life expectancy as computed by use of the Single Life Table in section 1.401(a)(9)-9of the Treasury regulations.

 

5.4.                              Participant’saccount balance. The account balance as of the last valuation date in thecalendar year immediately preceding the distribution calendar year (valuationcalendar year) increased by the amount of any contributions made and allocatedor forfeitures allocated to the account balance as of dates in the valuationcalendar year after the valuation date and decreased by distributions made inthe valuation year after the valuation date. The account balance for thevaluation calendar year includes any amounts rolled over or transferred to theplan either in the valuation calendar year or in the distribution calendar yearif distributed or transferred in the valuation calendar year.

 

5.5.                              Requiredbeginning date. The date specified in the DEFINITIONS SECTION of Article VIIof the plan.

 

Section 6. Election to Allow Participants or Beneficiaries toElect 5-Year Rule.

 

Participants or beneficiaries may elect on anindividual basis whether the 5-year rule or the life expectancy rule insections 2.2 and 4.2 of Article VII of the plan applies to distributionsafter the death of a participant who has a designated beneficiary. The electionmust be made no later than the earlier of September 30 of the calendaryear in which distribution would be required to begin under section 2.2 ofArticle VII of the plan, or by September 30 of the calendar yearwhich contains the fifth anniversary of the participant’s (or, if applicable,surviving spouse’s) death. If neither the participant nor beneficiary makes anelection under this paragraph, distributions will be made in accordance withthe life expectancy rule under sections 2.2 and

 

6

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4.2 of Article vii of the plan.

 

Section 7. Election to Allow Designated Beneficiary ReceivingDistributions Under 5-Year Rule to Elect Life Expectancy Distributions.

 

A designated beneficary who isreceiving payments under the 5-year rule may make a new election to receivepayments under the life expectancy rule until December 31, 2003, providedthat all amounts that would have been required to be distributed under the life expectancy rule for all distributioncalendar years before 2004 are distributed by the earlier of December 31,2003 or the end of the 5-year period.

 

This amendment is made an integral part of the aforesaid Plan and iscontrolling over the terms of said Plan with respect to the particular itemsaddressed expressly therein. All other provisions of the Plan remain unchangedand controlling.

 

Unless otherwise stated on any page of this amendment, eligibility forbenefits and the amount of any benefits payable to or on behalf of anindividual who is an Inactive Participant on the effective date(s) statedabove, shall be determined according to the provisions of the aforesaid Plan asin effect on the day before he became an Inactive Participant.

 

Signing this amendment, the Employer, as plan sponsor, has made thedecision to adopt this plan amendment. The Employer is acting in reliance onits own discretion and on the legal and tax advice of its own advisors, and notthat of any member of the Principal Financial Group or any representative of amember company of the Principal Financial Group.

 
| Signed this 31st day of December 2003 |
|--------------------------------------------|
| For the Employer,                          |
|                                       |
|                                       |
| By                                         | /s/ Bridget Atkinson |   |
|                                       | Bridget Atkinson |
|                                       |   |
|                                       | VP HR |   |
|                                       | Business Title |
|                                            |  |  |  |

 

7

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GOOD FAITHCOMPLIANCE AMENDMENT FOR THEECONOMIC GROWTH OF 2001 (EGTRRA)

 

This amendment of the Plan is adopted toreflect certain provisions of the Economic Growth and Tax Relief ReconciliationAct of 2001 (EGTRRA). This amendment is intended as good faith compliance withthe requirements of EGTRRA and is to be construed in accordance with EGTRRA andguidance issued thereunder. Except as otherwise provided, this amendment shallbe effective as of the first day of the first Plan Year beginning after December 31,2001.

 

This amendment shall supersede the provisionsof the Plan to the extent those provisions are inconsistent with the provisionsof this amendment

 

Government Technology

 

The Plan named above gives the Employer theright to amend it at any time. According to that right, the Plan is amended as follows:

 

INCREASE IN COMPENSATION LIMIT

For Plan Years beginning on and after January 1,2002, the annual Compensation of each Participant taken into account fordetermining all benefits provided under the Plan for any determination periodshall not exceed $200,000, as adjusted for increases in the cost-of-living inaccordance with Code Section 401(a)(17)(B). The cost-of-living adjustmentin effect for a calendar year applies to any determination period beginning insuch calendar year.

 

If Compensation for any prior determinationperiod is taken into account in determining a Participant’s contributions orbenefits for the current Plan Year, the Compensation for such priordetermination period is subject to the applicable annual compensation limit ineffect for that determination period. For this purpose, in determiningcontributions or benefits in Plan Years beginning on or after January 1,2002, the annual Compensation limit in effect for determination periodsbeginning before that date is $200,000.

 

LIMITATIONS ONCONTRIBUTIONS

Effective date. Thissection shall be effective for Limitation Years beginning after December 31,2001.

 

Maximum Annual Addition. Except to the extentpermitted in the Catch-up Contributions section of this amendment thatprovides for catch-up contributions under EGTRRA section 631 and Code Section 414(v),if applicable, the Annual Addition that may be contributed or allocated to aParticipant’s Account underthe Plan for any Limitation Year shall not exceedthe lesser of:

 

a)       $40,000, as adjusted for increases inthe cost-of-living under Code Section 415(d), or

 

b)       100 percent of the Participant’sCompensation, for the Limitation Year.

 

The compensation limitation referred to in(b) shall not apply to any contribution for medical benefits after separationfrom service (within the meaning of Code Section 401(h) or 419A(f)(2))which is otherwise treated as an Annual Addition.

 

Elective Deferral Limits. The cap (or thechoice to not include a cap) on Elective Deferral Contributions will not change,unless otherwise specified below.

 

a)       (Increase the cap.) Increase the capon Elective Deferral Contributions to                                  % of Compensation.

 

 

1

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b)       (Remove thecap.) The cap on Elective Deferral Contributions shall no longer apply.

 

c)      (Add a cap.) The Plan does not currently capElective Deferral Contributions. A participant may not defer morethan            %of his Compensation for (Select one.)

 

i)                                         ofor the Plan Year

 

ii)                                      ofor the pay period.

 

iii)                                   ofor the month.

 

Voluntary After-tax Contributions. Voluntary Contributions will not beadded to the Plan, unless otherwise specified below.

 

**Modification ofdefinition of Eligible Rollover Distribution to exclude hardship distributions.**For purposes of the DIRECT ROLLOVER Section, any amount that is distributed onaccount of hardship shall not be an Eligible Rollover Distribution and theDistributee may not elect to have any portion of such a distribution paiddirectly to an Eligible Retirement Plan.

 

Plan implementing the requirements of Code Section 401(k)(3),401(k)(11), 401(k)(12), 410(b), or 416, as applicable, by reason of the makingof such catch-up contributions.

 

a)        Catch-upContributions are not permitted.

 

DIRECT ROLLOVERS OF PLAN DISTRIBUTIONS

Effective date. This section shall applyto distributions made after December 31, 2001.

 

**Modification of definition of EligibleRetirement Plan.** For purposes of the DIRECT ROLLOVERSection. an Eligible Retirement Plan shall also mean an annuity contractdescribed in Code Section 403(b) and an eligible plan under Code Section 457(b)which is maintained by a state, political subdivision of a state, or any agencyor instrumentality of a state or political subdivision of a state and whichagrees to separately account for amounts transferred into such plan from thisPlan. 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 inCode Section 414(p).

 

 

 

2

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**Modification of definition of EligibleRollover Distribution to include after-tax employee contributions.**For purposes of the DIRECT ROLLOVER Section, a portion of a distribution shallnot fail to be an Eligible Rollover Distribution merely because the portionconsists of after-tax employee contributions which are not includible in grossincome. However, such portion may be transferred only to an individualretirement account or individual retirement annuity described in Code Section 408(a)or (b), or to a qualified defined contribution plan described in Code Section 401(a)or 403(a) that agrees to separately account for amounts so transferred,including separately accounting for the portion of such distribution which isincludible in gross income and the portion of such distribution which is not soincludible.

 

ROLLOVERS FROM OTHER PLANS

 

The Plan will accept Participant RolloverContributions and/or direct rollovers of distributions made after December 31,2001 from the types of plans specified below beginning January 1, 2002.The Plan will accept all of the following sources of rollovers, unless otherwisespecified in (a) below

 

**DirectRollovers**

The Plan will accept a direct rollover of anEligible Rollover Distribution from:

p a qualified plan described in Code Section 401(a) or 403(a), including after-tax employee contributions.

 
| ii)    |   | an annuity contract described in Code  Section 403(b), excluding after-tax employee contributions.                                                                                               |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                  |
| iii)   |   | an eligible plan under Code  Section 457(b) which Is maintained by a state, political subdivision of  a state, or any agency or instrumentality of a state or political subdivision  of a state. |

 

**Participant Rollover Contributionsfrom Other Plans**

 

The Plan will accept a Participantcontribution of an Eligible Rollover Distribution from:

 

i)      a qualified plan described in Code Section 401 (a) or403(a).

 

 

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| ii)    |   | an annuity contract described in Code Section 403(b).                                                                                                                                           |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                 |
| iii)   |   | an eligible plan under Code Section 457(b) which is maintained by  a state, political subdivision of a state, or any agency or instrumentality  of a state or political subdivision of a state. |

 

**Participant Rollover Contributions from IRAs**

The Plan will accept a Participant RolloverContribution of the portion of a distribution from an individual retirementaccount or individual retirement annuity described in Code Section 408(a)or (b) that is eligible to be rolled over and would otherwise be includible ingross income.

 

(Select (a) if you want to allow only certainsources of rollovers.)

 
| a) |   | o  The  Plan will accept Participant Rollover Contributions and/or direct rollovers  of distributions made after December 31, 2001 from the types of plans  specified below beginning January 1, 2002. (Select any that apply.) |
|----|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

**Direct Rollovers**

 

The Plan will accept a directrollover of an Eligible Rollover Distribution from:

 
| i)     |   | o  a qualified plan described in Code Section 401  (a) or 403(a), including after-tax employee contributions,                                                                                       |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                          |
| ii)    |   | o  a qualified plan described in Code Section 401(a)  or 403(a), excluding after-tax employee contributions. (Cannot select if (i) is  selected.).                                                  |
|   |   |                                                                                                                                                                                                          |
| iii)   |   | o  an annuity contract described in Code section 403(b),  excluding after-tax employee contributions.                                                                                               |
|   |   |                                                                                                                                                                                                          |
| iv)    |   | o  an  eligible plan under Code Section 457(b) which is maintained by a state,  political subdivision of a state, or any agency or instrumentality of a state  or political subdivision of a state. |

 

**ParticipantRollover Contributions from Other Plans**

 

The Plan willaccept a Participant contribution of an Eligible Rollover Distribution from:

 
| i)     |   | o  a  qualified plan described in Code Section 401 (a) or 403(a).                                                                                                                                   |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                          |
| ii)    |   | o  an  annuity contract described in Code Section 403(b).                                                                                                                                           |
|   |   |                                                                                                                                                                                                          |
| iii)   |   | o  an  eligible plan under Code Section 457(b) which is maintained by a state,  political subdivision of a state, or any agency or instrumentality of a state  or political subdivision of a state. |

 

**Participant Rollover Contributionsfrom IRAs**

The Plan will accept a Participant RolloverContribution of the portion of a distribution from an individual retirementaccount or individual retirement annuity described in Code Section 408(a)or (b) that is eligible to be rolled over and would otherwise be ineludible ingross income, unless otherwise specified below.

 

i)                 ParticipantRollover Contributions from IRAs are not permitted.

 

4

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**ROLLOVERS DISREGARDED IN INVOLUNTARY CASH-OUTS**

** **

Rollover Contributions willbe included in determining the value of account balances for involuntarydistributions, unless otherwise specified below. (NOTE Can only select (a) ifthe Plan is not subject to the qualified joint and survivor annuityrequirements of Code Sections 401(a)(11) and 417.)

 
| a) |   | Rollover  Contributions are excluded in determining the value of the Participant’s  nonforfeitable balance for purposes of the Plan’s involuntary cash-out rules  for distributions made after                                                                                    ,                                   (No  earlier than December 31, 2001.) with respect to Participants who separated  from service after                   ,                     . (The date may be earlier than December 31, 2001.) |
|----|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

**REPEAL OF MULTIPLE USE TEST**

The multiple use test describedin Treasury Regulation section 1.401(m)-2 and the EXCESS AMOUNTS Section shallnot apply for Plan Years beginning after December 31, 2001.

 

**DISTRIBUTION UPON SEVERANCEFROM EMPLOYMENT**

Effective date. This section shallapply for distributions due to severance from employment occurring after December 31,2001 and distributions that are processed after December 31, 2001regardless of when the severance from employment occurred.

 

New distributable event -Distribution Upon Severance From Employment. A Participant’s Elective DeferralContributions, Qualified Nonelective Contributions, Qualified MatchingContributions, and earnings attributable to these Contributions shall bedistributed on account of the Participant’s severance from employment. However,such a distribution shall be subject to the other provisions of the Planregarding distributions, other than provisions that require a separation fromservice before such amounts may be distributed.

 

**SUSPENSION PERIOD FOLLOWINGHARDSHIP DISTRIBUTION**

If the Plan allowshardship distributions and the deemed hardship provisions are used, the suspensionperiod following a hardship distribution will be decreased, unless otherwisespecified in (a) below. A Participant who receives a distribution of electivedeferrals after December 31, 2001, on account of hardship shall beprohibited from making elective deferrals and participant contributions underthis and all other plans of ours for six months after receipt of thedistribution-A Participant who receives a distribution of elective deferrals incalendar year 2001 on account of hardship shall be prohibited from makingelective deferrals and participant contributions under this and all other plansof ours for six months after receipt of the distribution or until January 1,2002, if later.

 

a)                                      The suspension periodwill not change. (Not available for 401 (k) Safe Harbor plans.)

 

**MODIFICATION OF TOP-HEAVY RULES**

Effective date. This section shall apply for purposes ofdetermining whether the Plan is a Top-heavy Plan for Plan Years beginning afterDecember 31, 2001, and whether the Plan satisfies the minimum benefitsrequirements of Code Section 416(c) for such years. This section amendsthe TOP HEAVY PLAN REQUIREMENTS Section of the Plan.

 

5

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**Determination of top-heavy Status**.

**Key Employee** meansany Employee or former Employee (and the Beneficiaries of such Employee) who atany time during the determination period was:

 

a) an officer of ours if such individual’sannual Compensation is more than $130,000 (as adjusted under Code Section 416(1)(1)for Plan Years beginning after December 31, 2002),

 

b) a 5-percent owner of us, or

 

c) a 1-percent owner of us who has annualCompensation of more than $150,000.

 

The determination period is the Plan Year containing the DeterminationDate.

 

The determination of who is a Key Employee shall be made according toCode Section 416(1)(1) and the applicable regulations and other guidanceof general applicability issued thereunder.

 

**Determination of present values and amounts.**This section shall apply for purposes of determining the present values ofaccrued benefits and the amounts of account balances of Employees as of theDetermination Date.

 

Distributions during year ending on the Determination Date. The presentvalues of accrued benefits and the amounts of account balances of an Employeeas of the Determination Date shall be increased by the distributions made withrespect to the Employee under the Plan and any plan aggregated with the Planunder Code Section 416(g)(2) during the one-year period ending on theDetermination Date. The preceding sentence shall also apply to distributionsunder a terminated plan which, had it not been terminated, would have beenaggregated with the Plan under Code Section 416(g)(2)(A)(i) In the case ofa distribution made for a reason other than separation from service, death, ordisability, this provision shall be applied by substituting “five-year period’for one-year period

 

**Employees not performing services during yearending on the Determination Date.** The accrued benefitsand accounts of any individual who has not performed services for us during theone-year period ending on the Determination Date shall not be taken intoaccount.

 

**Minimum benefits**.

**Matching contributions.**Employer matching contributions shall be taken into account for purposes ofsatisfying the minimum contribution requirements of Code Section 416(c)(2)and the Plan. The preceding sentence shall apply with respect to MatchingContributions under the Plan or, if the Plan provides that the minimumcontribution requirement shall be met in another plan, such other plan.Employer matching contributions that are used to satisfy the minimumcontribution requirements shall be treated as matching contributions forpurposes of the actual contribution percentage test and other requirements ofCode Section 401(m).

 

**Contributions under other plans****.** We may provide in the Plan that the minimum benefitrequirement shall be met in another plan (including another plan that consistssolely of a cash or deferred arrangement which meets the requirements of Code Section 401(k)(12)and matching contributions with respect to which the requirements of Code Section 401(m)(11)are met).

 

**PLAN LOANS FOR OWNER-EMPLOYEES ANDSHAREHOLDER EMPLOYEES**

Effective for plan loans made after December 31, 2001, plan provisionsprohibiting loans to any shareholder-employee or Owner-employee shall cease toapply

 

 

6

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| Signed this 28th day of  December, 2001 |
|-----------------------------------------|
|                                    |
| /s/ Susan Estes                         |   |
| Susan Estes                             |
|                                    |   |
| Title                                   |
|                                         |  |  |

 

7

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AMENDMENT NO. I

 

 

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AMENDMENT NO. I

 

GTSI EMPLOYEES’ 401(k)INVESTMENT PLAN

 

The Plan named above gives the Employer theright to amend it at any time. According to that right, the plan is amended asof January 1, 2002, as follows:

 

By striking the Title Page and substitutingthe following: GTSI CORP. 401(k) INVESTMENT PLAN

 

The provisions and conditions set forth onany page of this amendment are a part of the Plan as fully as if recited overthe signature(s) below.

 

Unless otherwise stated on any page of thisamendment, eligibility for benefits and the amount of such benefits payable toor on behalf of an individual who is an Inactive Participant on the effectivedate(s) stated above, shall be determined according to the provisions of thePlan as in effect on the day before he became an Inactive Participant.

 

By signing this amendment, the Employer acknowledges having counseledto the extent necessary with selected legal and tax advisors regarding theamendment’s legal and tax implications.

 

Signed this 14th day of November, 2002

 
| GTSI Corp.          |
|---------------------|
|                |
|                |
| By                  | /s/ Bridget Atkinson |   |
|                |
|                |
| Bridget Atkinson    |
|                |
|                |
| VP, Human Resources |   |
|                     |  |  |  |

 

 

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Your plan is an important legaldocument. This sample plan has been prepared based on our understanding of thedesired provisions. It may not fit your situation. You should consult with yourlawyer on the plan’s legal and tax implications. Neither Principal LifeInsurance Company nor its agents can be responsible for the legal or taxaspects of the plan nor its appropriateness for your situation. If you wish tochange the provisions of this sample plan, you may ask us to prepare new samplewording for you and your lawyer to review.

 

 

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