Exhibit 10.12.1



APPLETON PAPERS

RETIREMENT SAVINGS AND

EMPLOYEE STOCK OWNERSHIP

PLAN



(As Amended Through July 31, 2002)





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APPLETON PAPERS RETIREMENT SAVINGS AND

EMPLOYEE STOCK OWNERSHIP PLAN

(As Amended Through July 31, 2002)



TABLE OF CONTENTS



|                       |  |                             |  |   
|---------------------- |  | --------------------------- |  | --
|ARTICLE 1: DEFINITIONS |  | 2                          
|1.1                    |  | ACP                         |  | 2 
|1.2                    |  | ACTUAL CONTRIBUTION RATIO   |  | 2 
|1.3                    |  | ACTUAL DEFERRAL RATIO       |  | 2 
|1.4                    |  | ADP                         |  | 3 
|1.5                    |  | AFFILIATE                   |  | 3 
|1.6                    |  | ANNUAL ADDITIONS            |  | 3 
|1.7                    |  | BARGAINING UNIT EMPLOYEE    |  | 4 
|1.8                    |  | BENEFICIARY                 |  | 4 
|1.9                    |  | CLOSING DATE                |  | 4 
|1.10                   |  | CODE                        |  | 5 
|1.11                   |  | COMBINED ACCOUNT            |  | 5 
|1.12                   |  | COMMITTEE                   |  | 5 
|1.13                   |  | COMPANY                     |  | 5 
|1.14                   |  | COMPANY STOCK               |  | 5 
|1.15                   |  | COMPENSATION                |  | 6 
|1.16                   |  | COVERED COMPENSATION        |  | 6 
|1.17                   |  | DATE OF EMPLOYMENT          |  | 6 
|1.18                   |  | DATE OF SEVERANCE           |  | 6 
|1.19                   |  | DISABILITY                  |  | 7 
|1.20                   |  | ELECTIVE ACCOUNT            |  | 7 
|1.21                   |  | ELECTIVE CONTRIBUTIONS      |  | 7 
|1.22                   |  | ELECTIVE DEFERRALS          |  | 7 
|1.23                   |  | EMPLOYEE                    |  | 7 
|1.24                   |  | ENTRY DATE                  |  | 8 
|1.25                   |  | ERISA                       |  | 8 
|1.26                   |  | ESOP ACCOUNTS               |  | 8 
|1.27                   |  | ESOP COMPONENT              |  | 8 
|1.28                   |  | ESOP ELECTIVE ACCOUNT       |  | 8 
|1.29                   |  | ESOP MATCHING ACCOUNT       |  | 8 
|1.30                   |  | ESOP PROFIT SHARING ACCOUNT |  | 9 
|1.31                   |  | ESOP ROLLOVER ACCOUNT       |  | 9 
|1.32                   |  | ESOP TRANSFER ACCOUNT       |  | 9 
|1.33                   |  | FMV OF COMPANY STOCK        |  | 9 
|1.34                   |  | FORMER PARTICIPANT          |  | 9 
|1.35                   |  | FUND                        |  | 9 
|1.36                   |  | HCE                         |  | 10
|1.37                   |  | HOUR OF SERVICE             |  | 10
|1.38                   |  | INDEPENDENT APPRAISER       |  | 11
|1.39                   |  | INVESTMENT FUND             |  | 11





---

|                                 |  |                                                               |  |   
|-------------------------------- |  | ------------------------------------------------------------- |  | --
|1.40                             |  | LIMITATION YEAR                                               |  | 11
|1.41                             |  | MATCHING ACCOUNT                                              |  | 11
|1.42                             |  | MATCHING CONTRIBUTIONS                                        |  | 11
|1.43                             |  | MSP                                                           |  | 12
|1.44                             |  | NON-ESOP ACCOUNTS                                             |  | 12
|1.45                             |  | NON-ESOP COMPONENT                                            |  | 12
|1.46                             |  | NHCE                                                          |  | 12
|1.47                             |  | PARTICIPANT                                                   |  | 12
|1.48                             |  | PAY PERIOD; PAY DATE                                          |  | 12
|1.49                             |  | PERIOD OF SERVICE                                             |  | 12
|1.50                             |  | PERIOD OF SEVERANCE                                           |  | 13
|1.51                             |  | PLAN                                                          |  | 13
|1.52                             |  | PLAN ADMINISTRATOR                                            |  | 13
|1.53                             |  | PLAN YEAR                                                     |  | 13
|1.54                             |  | PROFIT SHARING ACCOUNT                                        |  | 14
|1.55                             |  | PROFIT SHARING CONTRIBUTION                                   |  | 14
|1.56                             |  | RELATED COMPANY                                               |  | 14
|1.57                             |  | RETIREMENT                                                    |  | 14
|1.58                             |  | ROLLOVER ACCOUNT                                              |  | 15
|1.59                             |  | ROLLOVER CONTRIBUTION                                         |  | 15
|1.60                             |  | SAVINGS PERCENTAGE                                            |  | 15
|1.61                             |  | SERVICE                                                       |  | 15
|1.62                             |  | TRUSTEE                                                       |  | 15
|1.63                             |  | VALUATION DATE                                                |  | 16
|                                 | 
|ARTICLE 2: PARTICIPATION         |  | 16                                                           
|                                 |  |                                                              
|2.1                              |  | ELIGIBILITY                                                   |  | 16
|2.2                              |  | TERMS OF PARTICIPATION                                        |  | 16
|2.3                              |  | TRANSFERRED EMPLOYEES                                         |  | 17
|2.4                              |  | REEMPLOYMENT                                                  |  | 18
|2.5                              |  | BARGAINING UNIT EMPLOYEES                                     |  | 18
|2.6                              |  | LEASED EMPLOYEES                                              |  | 18
|2.7                              |  | ADOPTION BY AFFILIATE                                         |  | 19
|                                 | 
|ARTICLE 3: COMPANY CONTRIBUTIONS |  | 19                                                           
|                                 |  |                                                              
|3.1                              |  | MATCHING CONTRIBUTIONS PRIOR TO THE CLOSING
DATE              |  | 19
|3.2                              |  | MATCHING CONTRIBUTIONS AFTER THE CLOSING
DATE                 |  | 20
|3.3                              |  | DISCRETIONARY PROFIT SHARING CONTRIBUTION                     |  | 22
|3.4                              |  | TIME AND MEDIUM OF PAYMENT OF
CONTRIBUTIONS; ALLOCATION RULES |  | 22
|3.5                              |  | REINSTATEMENTS                                                |  | 23
|3.6                              |  | CONTRIBUTIONS CONDITIONED ON DEDUCTIBILITY                    |  | 24
|3.7                              |  | ROLLOVER CONTRIBUTIONS                                        |  | 24
|3.8                              |  | PROHIBITED ALLOCATIONS OF STOCK IN AN S
CORPORATION           |  | 24
|                                 | 
|ARTICLE 4: VESTING               |  | 24                                                           
|                                 |  |                                                              
|4.1                              |  | FULLY VESTED ACCOUNTS                                         |  | 24
|4.2                              |  | ACCOUNTS SUBJECT TO VESTING SCHEDULE                          |  | 25



ii



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|                                                 |  |                                                                             |  |   
|------------------------------------------------ |  | --------------------------------------------------------------------------- |  | --
|4.3                                              |  | Special Vesting Rules                                                       |  | 25
|                                                 | 
|ARTICLE 5: LIMITATIONS ON CONTRIBUTIONS          |  | 25                                                                         
|                                                 |  |                                                                            
|5.1                                              |  | LIMITATION ON ELECTIVE DEFERRALS                                            |  | 25
|5.2                                              |  | ADP LIMITATION                                                              |  | 26
|5.3                                              |  | ACP LIMITATION                                                              |  | 28
|5.4                                              |  | MAXIMUM LIMITATIONS ON ANNUAL ADDITIONS                                     |  | 29
|5.5                                              |  | DEDUCTION LIMITATION                                                        |  | 30
|                                                 | 
|ARTICLE 6: THE FUND, INVESTMENTS, AND ACCOUNTING |  | 31                                                                         
|                                                 |  |                                                                            
|6.1                                              |  | TRUST FUND                                                                  |  | 31
|6.2                                              |  | INVESTMENT FUNDS IN THE NON-ESOP COMPONENT
AND THE ESOP COMPONENT           |  | 31
|6.3                                              |  | PARTICIPANTS DESIGNATION OF INVESTMENTS FUNDS
UNDER THE NON-ESOP COMPONENT |  | 32
|6.4                                              |  | PARTICIPANTS DESIGNATION OF INVESTMENT IN
COMPANY STOCK                    |  | 33
|6.5                                              |  | DIVERSIFICATION OF ESOP ACCOUNTS                                            |  | 34
|6.6                                              |  | RESERVED                                                                    |  | 35
|6.7                                              |  | ALLOCATION AND CREDITING OF EMPLOYER
CONTRIBUTIONS                          |  | 35
|6.8                                              |  | VALUATION OF INVESTMENT FUNDS AND ADJUSTMENT
OF NON-ESOP ACCOUNTS           |  | 35
|6.9                                              |  | ADJUSTMENT OF ESOP ACCOUNTS                                                 |  | 36
|6.10                                             |  | FORMER PARTICIPANTS AND BENEFICIARIES                                       |  | 37
|6.11                                             |  | LOANS                                                                       |  | 38
|                                                 | 
|ARTICLE 7: DISTRIBUTION                          |  | 40                                                                         
|                                                 |  |                                                                            
|7.1                                              |  | DISTRIBUTION OPTIONS FOR PARTICIPANTS WHO RETIRE
OR INCUR A DISABILITY      |  | 40
|7.2                                              |  | DISTRIBUTION OPTIONS UPON DEATH                                             |  | 41
|7.3                                              |  | DISTRIBUTION OPTIONS UPON TERMINATION OF
EMPLOYMENT/PERMANENT LAYOFF        |  | 41
|7.4                                              |  | FORM OF DISTRIBUTIONS                                                       |  | 42
|7.5                                              |  | FORFEITURES                                                                 |  | 43
|7.6                                              |  | AMOUNT OF DISTRIBUTION                                                      |  | 43
|7.7                                              |  | PARTICIPANTS RIGHT TO CONSENT TO
DISTRIBUTIONS                             |  | 43
|7.8                                              |  | TIME WHEN DISTRIBUTIONS MUST COMMENCE                                       |  | 44
|7.9                                              |  | HARDSHIP                                                                    |  | 45
|7.10                                             |  | INABILITY TO LOCATE DISTRIBUTEE                                             |  | 47
|7.11                                             |  | RESTRICTIONS ON IN-SERVICE DISTRIBUTIONS                                    |  | 47
|7.12                                             |  | DIRECT ROLLOVERS                                                            |  | 47
|7.13                                             |  | QUALIFIED DOMESTIC RELATIONS ORDERS                                         |  | 48
|                                                 | 
|ARTICLE 8: ADMINISTRATION OF THE PLAN            |  | 48                                                                         
|                                                 |  |                                                                            
|8.1                                              |  | APPOINTMENT OF ESOP COMMITTEE                                               |  | 48
|8.2                                              |  | NAMED FIDUCIARIES                                                           |  | 49
|8.3                                              |  | ALLOCATION OF FIDUCIARY AND OTHER
RESPONSIBILITIES                          |  | 49
|8.4                                              |  | QUORUM AND VOTING; PROCEDURES                                               |  | 50
|8.5                                              |  | SERVICE IN MULTIPLE CAPACITIES                                              |  | 50
|8.6                                              |  | POWERS AND AUTHORITY                                                        |  | 50
|8.7                                              |  | POWERS OF PLAN ADMINISTRATOR                                                |  | 50
|8.8                                              |  | POWERS OF COMMITTEE                                                         |  | 51



iii



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|                                                                                     |  |                                    |  |   
|------------------------------------------------------------------------------------ |  | ---------------------------------- |  | --
|8.9                                                                                  |  | ADVISORS                           |  | 51
|8.10                                                                                 |  | POWERS NOT EXCLUSIVE               |  | 52
|8.11                                                                                 |  | LIMITATION OF LIABILITY; INDEMNITY |  | 52
|                                                                                     | 
|ARTICLE 9: AMENDMENT OF THE PLAN                                                     |  | 52                                
|                                                                                     |  |                                   
|9.1                                                                                  |  | AMENDMENT                          |  | 52
|                                                                                     | 
|ARTICLE 10: TERMINATION OF THE PLAN; MERGER                                          |  | 53                                
|                                                                                     |  |                                   
|10.1                                                                                 |  | TERMINATION                        |  | 53
|10.2                                                                                 |  | PLAN MERGER                        |  | 53
|                                                                                     | 
|ARTICLE 11: LIMITATION OF RIGHTS OF PARTICIPANTS, FORMER PARTICIPANT & BENEFICIARIES |  | 53                                
|                                                                                     |  |                                   
|11.1                                                                                 |  | NO EMPLOYMENT RIGHTS               |  | 53
|11.2                                                                                 |  | SPENDTHRIFT CLAUSE                 |  | 54
|11.3                                                                                 |  | INCOMPETENTS                       |  | 54
|11.4                                                                                 |  | MINORS                             |  | 54
|11.5                                                                                 |  | DOUBT AS TO IDENTITY               |  | 54
|11.6                                                                                 |  | DISCHARGE OF LIABILITY             |  | 55
|                                                                                     | 
|ARTICLE 12: TOP-HEAVY PROVISIONS                                                     |  | 55                                
|                                                                                     |  |                                   
|12.1                                                                                 |  | APPLICATION OF ARTICLE 12          |  | 55
|12.2                                                                                 |  | TOP-HEAVY DETERMINATION            |  | 55
|12.3                                                                                 |  | RESERVED                           |  | 55
|12.4                                                                                 |  | MINIMUM CONTRIBUTIONS              |  | 55
|12.5                                                                                 |  | RESERVED                           |  | 56
|12.6                                                                                 |  | DEFINITIONS                        |  | 56
|                                                                                     | 
|ARTICLE 13: LIMITATION ON MAXIMUM CONTRIBUTIONS AND BENEFITS UNDER ALL PLANS         |  | 58                                
|                                                                                     | 
|ARTICLE 14: RIGHTS, RESTRICTIONS, AND OPTIONS ON COMPANY STOCK                       |  | 58                                
|                                                                                     |  |                                   
|14.1                                                                                 |  | RIGHT OF FIRST REFUSAL             |  | 58
|14.2                                                                                 |  | PUT OPTION                         |  | 58
|14.3                                                                                 |  | SHARE LEGEND; OTHER RESTRICTIONS   |  | 59
|14.4                                                                                 |  | NONTERMINABLE RIGHTS               |  | 59
|                                                                                     | 
|ARTICLE 15: VOTING AND TENDERING OF STOCK                                            |  | 59                                
|                                                                                     |  |                                   
|15.1                                                                                 |  | VOTING OF COMPANY STOCK            |  | 59
|15.2                                                                                 |  | TENDERING OF COMPANY STOCK         |  | 60
|                                                                                     | 
|ARTICLE 16: MISCELLANEOUS                                                            |  | 60                                
|                                                                                     |  |                                   
|16.1                                                                                 |  | SEVERABILITY                       |  | 60
|16.2                                                                                 |  | CAPTIONS                           |  | 60
|16.3                                                                                 |  | CONSTRUCTION                       |  | 61
|                                                                                     | 
|EXHIBIT A EGTRRA PROVISIONS                                                          |  | EXHIBIT A-1                       



iv



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APPLETON PAPERS RETIREMENT SAVINGS AND

EMPLOYEE STOCK OWNERSHIP PLAN

(As Amended Through July 31, 2002)



INTRODUCTION



Background. Appleton Papers Inc. (the Company) established
the Appleton Papers Retirement Savings Plan (the Plan) effective January 1, 1985 to provide retirement benefits for its eligible Employees through a tax-qualified retirement benefit plan.



The Plan, as amended from time to time thereafter, was amended and restated
in its entirety effective as of January 1, 2001 to enable eligible Employees of the Company and its affiliates to: (1) accumulate funds for their future security by electing to make cash or deferral contributions and by sharing in employer
contributions to the Plan; and (2) acquire stock ownership interests in the Company. Accordingly, as restated (and renamed the Appleton Papers Retirement and Employee Stock Ownership Plan) the Plan contains the following two separate
components:



| |  | A Non-ESOP Component intended to meet the applicable requirements of Section 401(a) of the Internal Revenue Code of 1986 (the Code), including a cash or deferred
arrangement intended to qualify under Section 401(k) of the Code.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | An ESOP Component that is designed to invest primarily in stock of the Company and that is intended to meet the applicable requirements of Sections 401(a), 409, and 4975(e)(7) of
the Code and Section 407(d)(6) of the Employee Retirement Income Security Act of 1974 (ERISA), which also includes a cash or deferred arrangement intended to qualify under Section 401(k) of the Code.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



The benefits of Participants who terminated employment prior to the effective
date of said restatement shall be determined under the terms of the Plan in effect at their termination of employment. The Plan has been and continues to be administered and operated in accordance with relevant provisions of the Code and other
applicable laws and regulations.





---

The Plan, as so restated, and as subsequently amended through July 31, 2002, reads as follows.



ARTICLE 1: DEFINITIONS



In construing the following definitions and the balance of the Plan, the masculine pronoun
wherever used includes the feminine, and the singular includes the plural.



|1.1 | ACP
|--- | ---



The term ACP (an acronym for Average Contribution Percentage) means, for a specified group of eligible Employees for any Plan Year (i.e., HCEs or NHCEs), the average of the Actual Contribution Ratios
(calculated separately for each Employee in the group, and calculated separately for the ESOP and Non-ESOP Components of the Plan).



|1.2 | Actual Contribution Ratio
|--- | -------------------------



|(a) | The term Actual Contribution Ratio means, for each Employee for any Plan Year, the ratio of:
|--- | ----------------------------------------------------------------------------------------------



| | (1) | the sum of the amount of Matching Contributions actually paid into the Fund on behalf of such Employee for such Plan Year, to
| | --- | -----------------------------------------------------------------------------------------------------------------------------



| | (2) | the Employees compensation (within the meaning of Section 414(s) of the Code) for such Plan Year.
| | --- | --------------------------------------------------------------------------------------------------



|(b) | The Actual Contribution Ratio shall be calculated separately based upon the Matching Contributions made on behalf of such Employee for such Plan Year to the ESOP Component and to
the Non-ESOP Component and separately for Bargaining Unit Employees.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(c) | The Actual Contribution Ratio for any HCE who is a participant under two or more arrangements described in Code Section 401(k) sponsored by the Company or a Related Company shall be
determined as if all such arrangements (except plans that may not be aggregated under applicable regulations) were one such arrangement.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



1.3 Actual Deferral Ratio



|(a) | The term Actual Deferral Ratio means, for each Employee for any Plan Year, the ratio of:
|--- | ------------------------------------------------------------------------------------------



| | (1) | the sum of the amount of Elective Contributions actually paid into the Fund on behalf of such Employee for such Plan Year, to
| | --- | -----------------------------------------------------------------------------------------------------------------------------



| | (2) | the Employees compensation (within the meaning of Section 414(s) of the Code) for such Plan Year.
| | --- | --------------------------------------------------------------------------------------------------



2



---

|(b) | The Actual Deferral Ratio shall be calculated separately based upon the Elective Contributions made on behalf of such Employee for such Plan Year to the ESOP Component and to the
Non-ESOP Component, and separately for Bargaining Unit Employees.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(c) | The Actual Deferral Ratio for any HCE who is a participant under two or more arrangements described in Code Section 401(k) sponsored by the Company or a Related Company shall be
determined as if all such arrangements (except plans that may not be aggregated under applicable regulations) were one such arrangement.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|1.4 | ADP
|--- | ---



The term ADP (an acronym for Average Deferral Percentage) means, for a specified group of eligible Employees for any Plan Year (i.e., HCEs or NHCEs), the average of the Actual Deferral Ratios (calculated
separately for each Employee in the group, and calculated separately for the ESOP and Non-ESOP Components of the Plan).



|1.5 | Affiliate
|--- | ---------



The word Affiliate means any Related Company and any corporation or unincorporated trade or business that would be a Related Company if more than 50% were substituted for 80% where
80% appears in Section 1563(a) of the Code or in the regulations promulgated under Section 414(c) of the Code.



1.6 Annual Additions



|(a) | The term Annual Additions means the sum credited to a Participant for any Limitation Year of:
|--- | -----------------------------------------------------------------------------------------------



| | (1) | employer contributions,
| | --- | -----------------------



| | (2) | employee contributions,
| | --- | -----------------------



| | (3) | forfeitures,
| | --- | ------------



| | (4) | amounts allocated to an individual medical account (as defined in Section 415(l)(2) of the Code) that is part of a pension or annuity plan maintained by the Company or an Affiliate,
and
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (5) | amounts derived from contributions paid or accrued after December 31, 1985 in taxable years ending after such date, that are attributable to post-retirement medical benefits
allocated to the separate account of a key employee (as defined in Section 419A(d)(3) of the Code) under a welfare benefit fund (as defined in Section 419(e) of the Code) maintained by the Company or an Affiliate.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



3



---

The term Annual Additions shall not include any Rollover Contribution made by a Participant under the
Plan.



|(b) | In all instances, the determination of a Participants Annual Additions for any Limitation Year shall be made in accordance with Code Section 415 and the regulations there
under, as amended, the provisions of which are hereby incorporated by reference.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|1.7 | Bargaining Unit Employee
|--- | ------------------------



The term Bargaining Unit Employee means an Employee employed primarily to render services within the jurisdiction of a union, where his compensation, hours of
work, or conditions of employment are determined by collective bargaining with such union.



|1.8 | Beneficiary
|--- | -----------



|(a) | The word Beneficiary means any person designated in writing by a Participant in accordance with prescribed rules, to receive any distribution in the event of the death
of the Participant, or, if no such designation is in effect, then the surviving spouse, or children, or the estate of the Participant in such order of priority.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(b) | Notwithstanding subsection (a) above, a Participants sole Beneficiary shall be his surviving spouse (if he has a surviving spouse) unless he has designated another Beneficiary
with the written consent of such spouse (which consent shall not be effective unless it acknowledges the effect of such designation and is witnessed by a notary public). Any change in a Beneficiary designation by a Participant that has the effect of
naming a person other than the surviving spouse as sole Beneficiary is subject to the above consent requirement. Notwithstanding the foregoing, if a Participant establishes to the satisfaction of the Plan Administrator or his delegate that written
consent cannot be obtained because the spouse cannot be located, or because of such other circumstances as permitted under applicable law, the spouse whose written consent was unobtainable will be deemed to have consented to any designation or
change of Beneficiary. Any such consent shall be effective only with respect to the spouse who gave or was deemed to have given the consent and shall be irrevocable.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|1.9 | Closing Date
|--- | ------------



The term Closing Date means the date upon which Buyer (as defined below) purchased from Seller (as defined below) all of the partnership interests in Arjo Wiggins Delaware General Partnership, a Delaware
partnership, with all of its subsidiaries including the Company. Buyer collectively means Paperweight Development Corporation (PDC), a Wisconsin corporation and New Appleton LLC, a Wisconsin limited liability company owned by
PDC. Seller collectively means Arjo Wiggins North America Investments, Ltd., a United Kingdom corporation, and Arjo Wiggins U.S. Holdings, Ltd., a United Kingdom corporation.



4



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|1.10 | Code
|---- | ----



The word Code means the Internal Revenue Code of 1986, as amended.



|1.11 | Combined Account
|---- | ----------------



The term Combined Account means the sum of a Participants ESOP Accounts and Non-ESOP Accounts.



|1.12 | Committee
|---- | ---------



The word Committee means the ESOP Committee appointed pursuant to Article 8 of the Plan.



|1.13 | Company
|---- | -------



|(a) | The word Company means Appleton Papers Inc., a Delaware corporation, and its predecessors and successors in interest, as appropriate.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------



|(b) | The word Company also means any subsidiary or other affiliate of Appleton Papers Inc. that adopts the Plan with the approval of the Board of Directors of Appleton Papers
Inc., subject to the provisions of Section 2.7.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|1.14 | Company Stock
|---- | -------------



For purposes of the Plan, the term Company Stock shall mean common stock issued by the Company that is readily tradable on an established securities market; provided, however, if the Companys common
stock is not readily tradable on an established securities market, the term Company Stock shall mean common stock issued by the Company having a combination of voting power and dividend rates equal to or in excess of: (a) that class of
common stock of the Company having the greatest voting power and (b) that class of common stock of the Company having the greatest dividend rights. Non-callable preferred stock shall be treated as Company Stock for purposes of the Plan if such stock
is convertible at any time into stock that is readily tradable on an established securities market (or, if applicable, that meets the requirements of (a) and (b) next above) and if such conversion is at a conversion price that, as of the date of the
acquisition by the Plan, is reasonable. For purposes of the immediately preceding sentence, preferred stock shall be treated as non-callable if, after the call, there will be a reasonable opportunity for a conversion that meets the requirements of
the immediately preceding sentence. Company Stock shall be held under the Trust only if such stock satisfies the requirements of Section 407(d)(5) of ERISA.



5



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|1.15 | Compensation
|---- | ------------



|(a) | The word Compensation means, for any Limitation Year, the total wages, salaries, fees and other amounts received by or made available to a Participant for personal
services actually rendered in the course of employment with the Company, as determined under regulations implementing Section 415 of the Code, and shall include, for Plan Years commencing after December 31, 1997, (i) any elective deferral (as
defined in Code Section 402(g)(3)), and (ii) any amount which is contributed or deferred by the Company at the election of the Participant and which is not includible in the gross income of the Participant by reason of Code Sections 125, 457, or for
Plan Years commencing after December 31, 2000, 132(f)(4).
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(b) | Effective for Plan Years commencing after December 31, 1997, amounts under Code Section 125 include any amounts not available to a Participant in cash in lieu of group health
coverage because the Participant is unable to certify that he or she has other health coverage. An amount will be treated as an amount under Code Section 125 only if the Company does not request or collect information regarding the
Participants other health coverage as part of the enrollment process for the health plan.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|1.16 | Covered Compensation
|---- | --------------------



|(a) | The term Covered Compensation means, for any Plan Year, the regular wages or salary paid by the Company to a Participant for services during such period, including
overtime, bonus, sales bonus and similar pay, but excluding any military allowances and all other special payments and determined before any Savings Percentage election made pursuant to Section 2.2 or salary reduction elections under a cafeteria
plan under Code Section 125 or a qualified transportation fringe program under Code Section 132(f).
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(b) | In addition to other applicable limitations set forth in the Plan, and notwithstanding any other provision of the Plan to the contrary, the annual compensation of each employee
taken into account under the Plan shall not exceed $170,000, as adjusted from time to time by the Commissioner for increases in the cost of living in accordance with Section 401(a)(17)(B) of the Code.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|1.17 | Date of Employment
|---- | ------------------



The term Date of Employment means the first date on which an Employee performs an Hour of Service.



|1.18 | Date of Severance
|---- | -----------------



|(a) | The term Date of Severance means the earlier of:
|--- | --------------------------------------------------



| | (1) | the date on which an Employee quits, retires, is discharged or dies, or
| | --- | -----------------------------------------------------------------------



6



---

| | (2) | the first anniversary of the first date on which an Employee remains absent from employment with the Company or a Related Company for any reason other than those described in
paragraph (1) above.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(b) | Reserved.
|--- | ---------



|1.19 | Disability
|---- | ----------



The term Disability means total and permanent physical or mental disability, as evidenced by: (1) receipt of a Social Security disability pension, (2) receipt of disability payments under the
Companys long-term disability program, or (3) medical proof to the satisfaction of the Plan Administrator.



|1.20 | Elective Account
|---- | ----------------



The term Elective Account means the separate bookkeeping account established for each Participant to which the Elective Contributions made on his behalf and invested under the Non-ESOP Component of the
Plan are credited.



|1.21 | Elective Contributions
|---- | ----------------------



The term Elective Contributions means amounts contributed by the Company on behalf of a Participant up to 100% of the Participants Savings Percentage.
As soon as practicable on and after the Closing Date, a Participant may designate (in accordance with Sections 6.3 and 6.4) whether his future Elective Contributions shall be invested in the ESOP or Non-ESOP Component.



|1.22 | Elective Deferrals
|---- | ------------------



The term Elective Deferrals means Elective Contributions and any other elective deferrals as defined in Section 402(g)(3) of the Code and the regulations there under.



|1.23 | Employee
|---- | --------



|(a) | The word Employee means any person employed by the Company with the exception of leased employees within the meaning of Section 414(n) of the Code.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------



|(b) | For all purposes of the Plan, an individual shall be an Employee of or be employed by the Company for any Plan Year only if such individual is treated
by the Company as an employee for purposes of employment taxes and wage withholding for federal income taxes. If an individual is not considered to be an Employee of the Company for a Plan Year in accordance with the preceding sentence, a subsequent
determination by the
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



7



---

| | Company, any governmental agency or court that the individual is a common law employee of the Company, even if such determination is applicable to prior
years, will not have a retroactive effect for purposes of eligibility to participate in the Plan.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|1.24 | Entry Date
|---- | ----------



The term Entry Date means the first day on which an Employee satisfies the Eligibility requirements set forth in Section 2.1.



|1.25 | ERISA
|---- | -----



The term ERISA means the Employee Retirement Income Security Act of 1974, as amended.



|1.26 | ESOP Accounts
|---- | -------------



The term ESOP Accounts means all of a Participants ESOP Elective Account, ESOP Matching Account, ESOP Rollover Account, ESOP Transfer Account and ESOP Profit Sharing Account. The Plan Administrator
may establish an ESOP Stock Account, an ESOP Cash Account and an ESOP Loan Account as subaccounts.



|1.27 | ESOP Component
|---- | --------------



The term ESOP Component means the portion of the Plan that is intended to constitute an employee stock ownership plan designed to invest primarily in Company Stock and that is intended to meet the
applicable requirements of Sections 401(a), 409, and 4975(e)(7) of the Code and Section 407(d)(6) of the ERISA, with a cash or deferred feature designed to satisfy the applicable requirements of Section 401(k) of the Code.



|1.28 | ESOP Elective Account
|---- | ---------------------



The term ESOP Elective Account means the separate bookkeeping account established for each Participant to which the Elective Contributions made on his behalf
and invested under the ESOP Component of the Plan are credited.



|1.29 | ESOP Matching Account
|---- | ---------------------



The term ESOP Matching Account means the separate bookkeeping account established for each Participant to which the Matching Contributions made on his behalf
and invested under the ESOP Component of the Plan are credited.



8



---

|1.30 | ESOP Profit Sharing Account
|---- | ---------------------------



The term ESOP Profit Sharing Account means the separate bookkeeping account established for each Participant to which the Profit Sharing Contributions made on
his behalf and invested under the ESOP Component of the Plan are credited.



|1.31 | ESOP Rollover Account
|---- | ---------------------



The term ESOP Rollover Account means the separate bookkeeping account established for each Participant to which Rollover Contributions made by the Participant
under the ESOP Component of the Plan are credited.



|1.32 | ESOP Transfer Account
|---- | ---------------------



The term ESOP Transfer Account means the separate bookkeeping account established for each Participant to which amounts are transferred from either the
Non-ESOP Component of the Plan or the MSP, pursuant to Section 6.4(b). The Plan Administrator may direct the Trustee to establish different subaccounts in the ESOP Transfer Account to recognize the different types of monies transferred to the ESOP
Transfer Account (e.g., 401(k) or matching contributions from the Plan, or profit sharing contributions from the MSP).



|1.33 | FMV of Company Stock
|---- | --------------------



The term FMV of Company Stock means the fair market value of Company Stock, at a certain date, as determined by the Trustee based on the appraisal of an Independent Appraiser.



1.34 Former Participant



The term Former Participant means any former Employee whose interest in the Fund has not been completely distributed pursuant to
Article 7.



1.35 Fund



The word Fund means the trust fund established by the Trust Agreement as
described in Article 6.



9



---

|1.36 | HCE
|---- | ---



|(a) | Effective for Plan Years commencing after December 31, 1996, the term HCE means any employee who is a highly compensated employee as defined in Section 414(q) of the
Code, which includes any employee who:
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (1) | was at any time a 5% owner (as defined in Section 416(i)(1) of the Code) of the Company or a Related Company during the Plan year or the preceding Plan Year;
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (2) | for the preceding Plan Year:
| | --- | ----------------------------



| | (A) | received Compensation from the employer in excess of $85,000 (as adjusted from time to time by the Commissioner for increases in the cost of living in accordance with Section
414(q)(1) of the Code); and
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (B) | was in the top paid group of employees for such preceding year.
| | --- | ---------------------------------------------------------------



|(b) | Reserved.
|--- | ---------



|(c) | With respect to a Plan Year being tested, the determination of who is an HCE, including but not limited to the determinations of the number and identity of the employees in the
top-paid group and the compensation that is considered, will be made in accordance with Code Section 414(q) and the regulations there under.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(d) | Effective for Plan Years commencing after December 31, 1996, the family aggregation rules (as contemplated by Code Section 414(q)(6) prior to enactment of PL 104-188)
shall no longer be applicable to this Plan.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|1.37 | Hour of Service
|---- | ---------------



|(a) | The term Hour of Service means:
|--- | ---------------------------------



| | (1) | each hour for which an Employee is paid, or entitled to payment, for the performance of duties for the Company or a Related Company. These hours shall be credited to the Employee
for the computation period or periods in which the duties are performed;
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (2) | each hour for which an Employee is paid, or entitled to payment, by the Company or a Related Company on account of a period of time during which no duties are performed
(irrespective of whether the employment relationship has terminated) due to vacation, holiday, illness, incapacity (including Disability), layoff, jury duty, military duty or leave of absence; and
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (3) | each hour for which back pay, irrespective of mitigation of damages, is either awarded or agreed to by the Company or a Related Company. The same Hours of Service
shall not be credited both under paragraph (1) or paragraph (2), as the case may be, and under this paragraph (3). These hours shall be credited to the Employee for the computation period or periods to which the award or agreement
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



10



---

| | pertains rather than the computation period in which the award, agreement or payment is made.
| | ---------------------------------------------------------------------------------------------



|(b) | Hours of service shall be calculated and credited under this Section 1.37 pursuant to Section 2530.200b-2 of the Department of Labor Regulations, incorporated herein by reference,
and in accordance with the Family and Medical Leave Act of 1992 and regulations promulgated thereunder
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(c) | Effective as of December 12, 1994, notwithstanding any provision of this Plan to the contrary, contributions, benefits and service credit with respect to qualified military service
will be provided in accordance with Code Section 414(u).
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|1.38 | Independent Appraiser
|---- | ---------------------



The term Independent Appraiser shall mean an Independent Appraiser as defined in Section 401(a)(28) of the Code, in accordance with the terms of the Trust and
the provisions of Section 3(18) of ERISA.



|1.39 | Investment Fund
|---- | ---------------



The term Investment Fund means a portion of the Fund that is separately invested, as more specifically provided in Article 6.



|1.40 | Limitation Year
|---- | ---------------



The term Limitation Year means the calendar year, unless another consecutive twelve-month period is adopted by written resolution of the Company.



|1.41 | Matching Account
|---- | ----------------



The term Matching Account means the separate bookkeeping account established for each Participant to which Matching Contributions made on his behalf and invested under the Non-ESOP Component are credited.



|1.42 | Matching Contributions
|---- | ----------------------



The term Matching Contributions means amounts contributed by the Company on behalf of a Participant under Sections 3.1 and 3.2.



11



---

|1.43 | MSP
|---- | ---



The term MSP means The Appleton Papers Inc. Retirement Medical Savings Plan.



|1.44 | Non-ESOP Accounts
|---- | -----------------



The term Non-ESOP Accounts means the sum of a Participants Elective Account, Matching Account, Rollover Account, and Profit Sharing Account. The Plan Administrator may establish a Non-ESOP Loan
Account as a Sub Account.



|1.45 | Non-ESOP Component
|---- | ------------------



The term Non-ESOP Component means the portion of the Plan that is intended to constitute a profit sharing plan with a cash or deferred feature designed to satisfy the applicable requirements of Sections
401(a) and 401(k) of the Code.



|1.46 | NHCE
|---- | ----



The term NHCE (an acronym for Non-Highly Compensated Employee) means any employee who is not a HCE.



|1.47 | Participant
|---- | -----------



The word Participant means any Employee who has enrolled in the Plan pursuant to Section 2.2. or on whose behalf the Company makes a Profit Sharing Contribution. Participant also means an
individual who is a Former Participant.



|1.48 | Pay Period; Pay Date
|---- | --------------------



The term Pay Period means the applicable period for which Covered Compensation is paid. The term Pay Date means the date upon which Covered Compensation applicable to a Pay Period is actually
paid.



|1.49 | Period of Service
|---- | -----------------



The term Period of Service means the period commencing on an Employees most recent Date of Employment and ending on his next Date of Severance, including any Period of Severance of less than 12
consecutive months. Service prior to the effective date of this amendment and restatement of the Plan shall be included in an Employees Period of Service.



12



---

|1.50 | Period of Severance
|---- | -------------------



|(a) | The term Period of Severance means the period of time commencing on a Date of Severance and ending on the date on which an Employee again performs an Hour of Service;
provided, however, the first twelve (12)-consecutive months of absence from work after a Severance Date shall not be included within a Period of Severance if such absence is for maternity or paternity reasons (as defined below).
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(b) | For purposes of this Section 1.50, an absence from work for maternity or paternity reasons means a cessation of active employment (and continuous absence from such employment)
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (1) | by reason of the pregnancy of the individual,
| | --- | ---------------------------------------------



| | (2) | by reason of the birth of a child of the individual,
| | --- | ----------------------------------------------------



| | (3) | by reason of the placement of a child with the individual in connection with the adoption of such child by such individual, or
| | --- | ------------------------------------------------------------------------------------------------------------------------------



| | (4) | for purposes of caring for such child for a period beginning immediately following such birth or placement.
| | --- | -----------------------------------------------------------------------------------------------------------



|1.51 | Plan
|---- | ----



The word Plan means the Appleton Papers Retirement Savings and Employee Stock Ownership Plan, an amendment and restatement of the Appleton Papers Retirement Savings Plan, effective as of January 1, 2001.



|1.52 | Plan Administrator
|---- | ------------------



The term Plan Administrator means the individuals designated to act as such by the Committee. The Committee may appoint different administrators for the ESOP Component and the Non-ESOP Components of the
Plan.



|1.53 | Plan Year
|---- | ---------



The term Plan Year means the calendar year.



13



---

|1.54 | Profit Sharing Account
|---- | ----------------------



The term Profit Sharing Account means the separate bookkeeping account established for each Participant to which the Profit Sharing Contributions made on his
behalf and invested under the Non-ESOP Component of the Plan are credited.



|1.55 | Profit Sharing Contribution
|---- | ---------------------------



The term Profit Sharing Contribution means any amounts contributed by the Company on behalf of a Participant under Section 3.3.



|1.56 | Related Company
|---- | ---------------



|(a) | The term Related Company means, for an applicable period:
|--- | -----------------------------------------------------------



| | (1) | any corporation that is a member of a controlled group of corporations (within the meaning of Section 414(b) of the Code and the regulations there under) that includes the Company,
or
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (2) | any trade or business (whether or not incorporated) that is under common control with the Company, as determined in accordance with Section 414(c) of the Code and the regulations
there under, or
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (3) | any organization that is a member of an affiliated service group (within the meaning of Code Section 414(m) and the regulations there under) that includes the Company,
or
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (4) | any other entity required to be aggregated with the Company pursuant to regulations promulgated under Section 414(o) of the Code.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------



|(b) | Reserved.
|--- | ---------



|1.57 | Retirement
|---- | ----------



|(a) | The word Retirement means the termination of employment of a Participant on or after:
|--- | ---------------------------------------------------------------------------------------



| | (1) | the first day of the month coinciding with or next following the retirement date under any defined benefit retirement plan of the Company of which he is a member (including without
limitation the earliest retirement date available to such a Participant, whether by reason of the regular terms of the applicable retirement plan, or any special early retirement option available to an employee through such retirement plan), or
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



14



---

| | (2) | if a Participant is not a member of any such plan, the first day of any month coinciding with or following his attainment of age 65.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------



|(b) | Reserved.
|--- | ---------



|1.58 | Rollover Account
|---- | ----------------



The term Rollover Account means the separate bookkeeping account established for each Employee to which Rollover Contributions made by the Participant under the Non-ESOP Component of the Plan are credited.



|1.59 | Rollover Contribution
|---- | ---------------------



The term Rollover Contribution means those contributions made by an eligible Employee in accordance with Section 3.7 of the Plan. Such contributions must be
attributable to an amount distributable from:



|(a) | a trust described in Section 401(a) of the Code;
|--- | ------------------------------------------------



|(b) | an annuity plan described in Section 403(a) of the Code;
|--- | --------------------------------------------------------



|(c) | an individual retirement account or individual retirement annuity as defined in Section 408 of the Code; or
|--- | -----------------------------------------------------------------------------------------------------------



|(d) | effective January 1, 2002, an arrangement described in Section 403(b) of the Code;
|--- | ----------------------------------------------------------------------------------



provided that such amount is an eligible rollover distribution as such term is defined in the Code and applicable regulations.



|1.60 | Savings Percentage
|---- | ------------------



The term Savings Percentage means for any Pay Period the percentage elected by a Participant pursuant to Section 2.2 and in effect for such Pay Period.



|1.61 | Service
|---- | -------



The word Service means the aggregate of an Employees Periods of Service.



|1.62 | Trustee
|---- | -------



The word Trustee means the trustee or trustees of the Fund at any time acting under one or more Trust Agreements, as described in Article 6.



15



---

|1.63 | Valuation Date
|---- | --------------



Other than for Company Stock, the term Valuation Date means each day the New York Stock Exchange is open for business or such other times as may be agreed to in writing between the Company and the Trustee.
For Company Stock, the term Valuation Date means the semiannual date on which Company Stock is valued by an Independent Appraiser, and such other Valuation Dates as are declared by the Committee.



ARTICLE 2: PARTICIPATION



|2.1 | Eligibility
|--- | -----------



|(a) | Effective as of January 1, 2001 each Employee who was previously participating in the Plan shall continue to participate in the Plan, as amended and restated, subject to the terms
of the Plan;
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(b) | Each Employee who is hired on a full-time basis (other than a Bargaining Unit Employee) shall be eligible to become a Participant as of his or her Date of Employment; and
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(c) | Prior to the Closing Date, an Employee who is a Bargaining Unit Employee shall be eligible to become a Participant on the beginning of the second calendar year quarter following his
or her Date of Employment. After the Closing Date, an Employee who is a Bargaining Unit Employee shall be eligible to become a Participant on the first day he or she becomes eligible for welfare benefits as determined under the collective bargaining
agreement covering such Bargaining Unit Employee.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(d) | Each regular Employee not described in subsections (a), (b) or (c) above shall be eligible to become a Participant on the first day of the calendar year quarter following the first
anniversary of his Employment Date, if he has completed 1,000 Hours of Service within the 12-month period beginning on such Employment Date. An Employee subject to this subsection who does not complete 1,000 Hours of Service in that initial 12-month
period shall be eligible to become a Participant on the first day of the calendar year quarter next following the close of the first Plan Year in which he completes 1,000 Hours of Service.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|2.2 | Terms of Participation
|--- | ----------------------



|(a) | Subject to the limitations set forth herein, an eligible Employee may become a Participant in the Plan by electing a Savings Percentage of any whole percentage of
the Participants Covered Compensation in an amount not less than two percent (2%) nor more than fifteen percent (15%) of such Covered Compensation; provided that the Company may, in its sole discretion, increase the maximum percentage on a
year-by-year basis to the extent permitted by law. A Savings Percentage election shall be made in writing on a form prescribed and provided by the Plan Administrator, and shall include an agreement
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



16



---

| | by the Employee to reduce his cash remuneration by an amount equal to such Savings Percentage.
| | ----------------------------------------------------------------------------------------------



|(b) | An Employees Savings Percentage election under subsection (a) above shall be effective upon the first Pay Date occurring on or after the Entry Date following the date he files
an election form; provided the required form is completed, signed and received by the Company in such form and at such time the Plan Administrator may require.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(c) | A Participant may change the percentage designation of his election as of any Pay Date, and may terminate his election at any time, provided that such Participant notifies the Plan
Administrator in such form and at such time as the Plan Administrator may require, but in all events prior to the proposed effective date of such change or termination. A termination shall take effect as soon as administratively practical after
notification is received by the Company, but in no event later than 30 days thereafter. A Participant who so terminates his election may make a new election as provided in this Section 2.2.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(d) | Notwithstanding any other provision of the Plan, in the event the Plan Administrator is notified (in such form and manner as the Plan Administrator may designate) by a Participant
of an error in the implementation of a Savings Percentage election, the Company shall correct such error retroactive to the date implementation normally would have occurred, provided such notice is given not more than thirty (30) days after
publication of the first Participant statement by the plan recordkeeper (whether produced electronically or in hard copy) after such error occurs. A Savings Percentage election that is not implemented, and is not corrected as provided herein, shall
be deemed to be null and void, and of no effect whatever.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(e) | The Company shall contribute, on behalf of each Participant who elects to credit to this Plan the payment of certain elective benefit credits under an applicable Flexible Benefits
Plan of the Company, if any, 100% of the value of such credits to such Participants Elective Account under the Non-ESOP Component.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|2.3 | Transferred Employees
|--- | ---------------------



|(a) | Except as provided below in this Section 2.3, each person who is transferred to the Company from a Related Company shall become eligible to enroll as a Participant upon his
compliance with the eligibility requirements of Section 2.1 above.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(b) | Periods of employment with a Related Company or a series of Related Companies shall be included in determining an Employees compliance with the eligibility requirements for
participation in the Plan and for purposes of vesting under Article 4.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(c) | If a Participant is transferred to employment with a Related Company or a series of Related Companies, he shall not be deemed to have retired or terminated his
Service or employment for purposes of this Plan until such time as he is employed neither by the Company nor by any Related Company. Upon Retirement, Disability, death, layoff or termination from service of such a Participant while in the employ of
a Related
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



17



---

| | Company, distribution shall be made in accordance with this Plan as if such Participant had been retired, become Disabled, died, been laid off, or terminated
his service in the employ of the Company.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(d) | Nothing in this Section 2.3 shall be construed to authorize a Participant to share in contributions under this Plan with respect to remuneration paid to him by a Related Company.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|2.4 | Reemployment
|--- | ------------



If an Employee, after terminating employment, shall be rehired by the Company, he shall be eligible to resume participation in this Plan on the first Entry Date after rehire if he had previously become a Participant
under the Plan. Otherwise he shall become a Participant when he complies with the foregoing provisions of this Article 2, by taking into account both his Service prior to termination and his Period of Service after rehire.



|2.5 | Bargaining Unit Employees
|--- | -------------------------



Notwithstanding any other provision of the Plan, Bargaining Unit Employees shall be eligible to participate in this Plan only if the applicable collective bargaining
agreement expressly so provides, in which case, participation by a Bargaining Unit Employee shall be only to the extent and on the terms and conditions specified in the collective bargaining agreement covering such individual.



|2.6 | Leased Employees
|--- | ----------------



|(a) | If any person who is not an employee of the Company provides services to the Company (or a Related Company) on a substantially full-time basis for a period of at least one year,
such periods shall be counted as if such person had been an Employee in calculating Hours of Service for purposes of determining eligibility to participate under Section 2.1, and in calculating Service for purposes of vesting under Article 4, but
only if:
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (1) | such services are provided pursuant to an agreement between the Company and any other person; and
| | --- | -------------------------------------------------------------------------------------------------



| | (2) | such services are performed under the primary direction and control of the Company.
| | --- | -----------------------------------------------------------------------------------



|(b) | Reserved.
|--- | ---------



18



---

|2.7 | Adoption by Affiliate
|--- | ---------------------



Any subsidiary or other affiliate of Appleton Papers Inc. that has become a Company as provided in Section 1.13(b) is deemed to have designated Appleton
Papers Inc. as its agent with respect to amending or terminating the Plan. Any such action shall be binding on such subsidiary or affiliate at the time taken.



ARTICLE 3: COMPANY CONTRIBUTIONS



|3.1 | Matching Contributions Prior to the Closing Date
|--- | ------------------------------------------------



|(a) | Subject to the limitations set forth herein, and effective until the end of a special deferral election period occurring as soon as administratively feasible after the Closing Date,
on or as of each Pay Date applicable to a Pay Period, the Company shall contribute on behalf of each Participant the following amounts:
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (1) | Non-Bargaining Unit Employees:
| | --- | ------------------------------



75% of the portion of the Participants Savings Percentage for such Pay Period not in excess of 6% of Covered Compensation;



| | (2) | Bargaining Unit Employees (Harrisburg):
| | --- | ---------------------------------------



75% of the portion of the Participants Savings Percentage for such Pay Period not in excess of 6% of Covered Compensation.



| | (3) | Bargaining Unit Employees (Roaring Spring Local 422):
| | --- | -----------------------------------------------------



50% of the portion of the Participants Savings Percentage for such Pay Period not in excess of 6% of Covered Compensation (provided that, for any
Employee who was a Participant on June 1, 1998, and who does not have in effect an irrevocable waiver of any pre-existing or future right to post-retirement medical insurance provided by the Company, such percentage shall be 0%).



A Participant who executes a valid irrevocable waiver shall be eligible to
receive the Employer Contribution described above effective with the first Pay Date that occurs in the first calendar quarter after receipt by the Company of such waiver. Such waiver shall be made on a form and in the manner prescribed by the
Company.



| | (4) | Bargaining Unit Employees (Kansas City)  80% of the Participants Savings Percentage for such Pay Period not in excess of 6% of Covered Compensation.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------



| | (5) | Bargaining Unit Employees (West Carrollton)  From January 1, 2001 to April 1, 2001, no Matching Contribution shall be made. Effective April 2, 2001, 50% of
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------



19



---

| | the Participants Savings Percentage for such Pay Period not in excess of 6% of Covered Compensation.
| | -----------------------------------------------------------------------------------------------------



| | (6) | Bargaining Unit Employees (Appleton Plant)  From January 1, 2001 to May 27, 2001, no Matching Contribution shall be made. Effective May 28, 2001, 50% of the Participants
Savings Percentage for such Pay Period not in excess of 6% of Covered Compensation.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(b) | Notwithstanding the foregoing, the Company may, by resolution of its Board of Directors and in its sole and absolute discretion, increase the contribution percentages set forth
above based on profitability or such other reasons that it deems appropriate.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(c) | In addition, at or as of the end of the 2001 Plan Year, the Company shall contribute on behalf of each Participant who exceeds the 402(g) limit an additional amount equal to the
difference (if any) between (1) the amount of Matching Contributions the Participant would have received under the formulas above if his Savings Percentage had been made on a level basis throughout that Plan Year (or in the case of 3.1(a)(5) or (6)
above, from the effective date of such Matching Contributions) up to the Closing Date, and (2) the amount previously contributed as a Matching Contribution on behalf of that Participant by the Company for that portion of the 2001 Plan Year.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|3.2 | Matching Contributions After the Closing Date
|--- | ---------------------------------------------



|(a) | Amount of Contribution
|--- | ----------------------



Subject to the limitations set forth herein, and first effective at the end of a special deferral election period occurring as soon as administratively
feasible after the Closing Date, the Company shall contribute on behalf of each Participant the following amounts:



| | (1) | Non-Bargaining Unit Employees  A contribution to the Participants ESOP Matching Contribution Account equal to the sum of:
| | --- | ---------------------------------------------------------------------------------------------------------------------------



| | (A) | 100% of the Participants Savings Percentage invested under the ESOP Component of the Plan; and
| | --- | -----------------------------------------------------------------------------------------------



| | (B) | 50% of the Participants Savings Percentage invested under the Non-ESOP Component of the Plan.
| | --- | ----------------------------------------------------------------------------------------------



provided, however, that a Matching Contribution shall only be made on that portion of the Savings Percentage not in excess
of 6% of Covered Compensation.



| | (2) | Bargaining Unit Employees (Appleton; West Carrollton; and Roaring Spring): A contribution to the Participants ESOP Matching Contribution Account equal to 100% of the portion
of the Participants Savings Percentage invested under the ESOP Component of the Plan not in excess of 6% of Covered Compensation.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



20



---

| | (3) | Bargaining Unit Employees (employed at Roaring Spring and not receiving a contribution toward retiree medical) will receive a matching contribution, in addition to the contribution
specified in Section 3.2(a)(2) above, of 50% of the portion of the Participants Savings Percentage not in excess of 6% of Covered Compensation. Such matching contribution shall be invested in either the ESOP Component or the Non-ESOP Component
of the Plan in the same manner as the Participants Savings Percentage to which the Matching Contribution relates.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (4) | Bargaining Unit Employees (Harrisburg):
| | --- | ---------------------------------------



| | (A) | 100% of the Participants Savings Percentage invested under the ESOP Component of the Plan; and
| | --- | -----------------------------------------------------------------------------------------------



| | (B) | 75% of the Participants Savings Percentage invested under the Non-ESOP Component of the Plan.
| | --- | ----------------------------------------------------------------------------------------------



provided, however, that a Matching Contribution shall only be made on that portion of the Savings Percentage not in excess
of 6% of Covered Compensation. Such matching contribution shall be invested in either the ESOP Component or the Non-ESOP Component of the Plan in the same manner as the Participants Savings Percentage to which the Matching Contribution
relates.



| | (5) | Bargaining Unit Employees (Kansas City):
| | --- | ----------------------------------------



| | (A) | 100% of the Participants Savings Percentage invested under the ESOP Component of the Plan; and
| | --- | -----------------------------------------------------------------------------------------------



| | (B) | 80% of the Participants Savings Percentage invested under the Non-ESOP Component of the Plan.
| | --- | ----------------------------------------------------------------------------------------------



provided, however, that a Matching Contribution shall only be made on that portion of the Savings Percentage not in excess
of 6% of Covered Compensation. Such matching contribution shall be invested in either the ESOP Component or the Non-ESOP Component of the Plan in the same manner as the Participants Savings Percentage to which the Matching Contribution
relates.



|(b) | The Company may, by resolution of its Board of Directors and in its sole and absolute discretion, increase or decrease the percentage factors set forth above for a given Plan Year,
and from year to year, based on profitability or such other reasons that it deems appropriate
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(c) | In addition, at or as of the end of each Plan Year, the Company shall contribute on behalf of each Participant who has not received the maximum available Matching
Contribution on Elective Deferrals made pursuant to a Savings Percentage election for such Plan Year, an additional Matching Contribution equal to the difference (if any) between (1) the amount of Matching Contribution the Participant would have
received under the formulas above if his or her Savings Percentage had been made on a level basis throughout that Plan Year, and (2) the amount previously contributed as a Matching Contribution by the
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



21



---

| | Company for such Plan Year. Effective with the Plan Year commencing January 1, 2002, such additional Matching Contribution shall in all events be made in the
form of Company Stock.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|3.3 | Discretionary Profit Sharing Contribution
|--- | -----------------------------------------



|(a) | Subject to the limitations set forth herein, and effective as of the Closing Date, the Company, in its discretion, may determine whether a Profit Sharing Contribution shall be made
to the Non-ESOP Component of the Plan for a Plan Year, and if so, the amount to be contributed. Such amounts shall be credited to each eligible Participants Profit Sharing Account and shall be subject to the Participants investment
direction under Section 6.3.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(b) | Subject to the limitations set forth herein, and effective as of the Closing Date, the Company, in its discretion, may determine whether a Profit Sharing Contribution shall be made
to the ESOP Component of the Plan for a Plan Year, and if so, the amount to be contributed. Such allocated amounts shall be credited to each eligible Participants ESOP Profit Sharing Account subject to the limitations and rules governing the
ESOP Component of the Plan.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|3.4 | Time and Medium of Payment of Contributions; Allocation Rules
|--- | -------------------------------------------------------------



|(a) | Elective Contributions
|--- | ----------------------



| | (1) | Timing.The Company shall pay Participants Elective Contributions over to the Trustee as soon as practicable.
| | --- | -------------------------------------------------------------------------------------------------------------



| | (2) | Medium.The Company shall pay Participants Elective Contributions over to the Trustee in cash.
| | --- | ----------------------------------------------------------------------------------------------



|(b) | Matching Contributions
|--- | ----------------------



| | (1) | Timing
| | --- | ------



| | (A) | Contributions to the Non-ESOP Component of the Plan shall be made within 60 days following the Pay Date during which the Elective Contributions to which such Matching Contributions
relate would have been paid.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (B) | Contributions to the ESOP Component of the Plan shall be made as of the Valuation Date following the Pay Date during which the Elective Contributions to which such Matching
Contributions relate would have been paid, and shall be based on the FMV of Company Stock as of the preceding or followingValuation Date (whichever is lower).
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



22



---

| | (2) | Form of Contribution. The Company shall make Matching Contributions required under the Non-ESOP Component in the form of cash. The Company shall make Matching Contributions
required under the ESOP Component in the form of Company Stock or cash to be invested in Company Stock, as determined by the Board of Directors of the Company in its sole discretion.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(c) | Profit Sharing Contributions
|--- | ----------------------------



| | (1) | Timing. Profit Sharing Contributions to either the Non-ESOP Component or the ESOP Component of the Plan shall be made by the due date of the Companys tax return
(including extensions) for the year to which such contributions relate.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (2) | Form of Contribution. The Company shall make any Profit Sharing Contributions under the Non-ESOP Component in the form of cash. The Company shall make any Profit Sharing
Contributions under the ESOP Component in the form of Company Stock or cash to be invested in Company Stock, as determined by the Board of Directors of the Company in its sole discretion.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (3) | Eligibility to Receive an Allocation of Profit Sharing Contribution. In general, an individual must be (A) eligible to participate in the Plan and (B) employed on the last
day of a Plan Year to which a Profit Sharing Contribution relates in order to share in such Profit Sharing Contribution. However, Participants who cease to be Employees during the Plan Year by reason of death, Disability or Retirement shall be
eligible to share in such Profit Sharing Contribution. In its resolutions declaring a Profit Sharing Contribution the Plan, the Company may impose other conditions upon eligibility to share in such Profit Sharing Contribution, including without
limitation a provision that the Profit Sharing Contribution be allocated only to Participants at a certain division or location.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (4) | Allocation of Profit Sharing Contributions.Participants eligible to receive an allocation of such Profit Sharing Contribution shall share in such Contribution in proportion
to their relative amounts of Covered Compensation for that portion of the Plan Year during which they were eligible to participate in the Plan.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|3.5 | Reinstatements
|--- | --------------



In addition to the contributions otherwise provided for in Sections 3.1, 3.2 & 3.3 above, the Company shall contribute such additional amounts as are required for reinstatement of any accounts in accordance with
Sections 7.5 and 7.10.



23



---

|3.6 | Contributions Conditioned on Deductibility
|--- | ------------------------------------------



Notwithstanding any other provision of the Plan, each contribution by the Company under this Article 3 is expressly conditioned on the deductibility of such contribution
under Section 404 of the Code.



|3.7 | Rollover Contributions
|--- | ----------------------



The Committee may, under uniform rules applied on a consistent and nondiscriminatory basis, permit the Trustee to accept a Rollover Contribution on behalf of an Employee
who is or may become a Participant, provided, however, that in the opinion of the Committee or its legal counsel, the Rollover Contribution will not jeopardize the tax-exempt status of the Plan or the Trust or create adverse tax consequences for the
Employer. The Committee may require such evidence as they deem appropriate to ensure that any such Rollover Contribution to the Plan shall not adversely affect its tax-qualified status. In no event shall a Rollover Contribution be made to the Plan
in the form of a direct transfer from any tax-qualified plan that is required to provide benefits in the form of a qualified joint and survivor annuity or a qualified pre-retirement survivor annuity, as defined in subsections (b) and (c) of Code
Section 417. After the Closing Date, the Committee may, under uniform rules applied on a consistent and nondiscriminatory basis, permit Participants to direct that a portion of such Rollover Contribution be invested in Company Stock under the ESOP
Component of this Plan.



|3.8 | Prohibited Allocations of Stock in an S Corporation
|--- | ---------------------------------------------------



Notwithstanding any Plan provision to the contrary, no portion of the Plans assets attributable to (or allocable in lieu of) employer securities consisting of stock
in an S corporation shall, during a nonallocation year, accrue (or be allocated directly or indirectly under any plan of the Company meeting the requirements of Section 401(a) of the Code) for the benefit of any disqualified person. For this
purpose, the terms nonallocation year and disqualified person shall be defined as set forth in Section 656 of the Economic Growth and Tax Relief Reconciliation Act of 2001.



ARTICLE 4: VESTING



|4.1 | Fully Vested Accounts
|--- | ---------------------



An Employees Elective Account, ESOP Elective Account, Rollover Account, ESOP Rollover Account, and ESOP Transfer Account shall at all times be fully vested and
nonforfeitable.



24



---

|4.2 | Accounts Subject to Vesting Schedule
|--- | ------------------------------------



An Employees Matching Account and ESOP Matching Account, Profit Sharing Account and ESOP Profit Sharing Account shall be vested in accordance with the following
schedule, based on the Employees Service:



|                         |  |                   
|------------------------ |  | ------------------
|Service (In Years):      |  | Vesting Percentage
|Less than one            |  | 0%                
|One but less than two    |  | 20%               
|Two but less than three  |  | 40%               
|Three but less than Four |  | 60%               
|Four but less than five  |  | 80%               
|Five or more             |  | 100%              



|4.3 | Special Vesting Rules
|--- | ---------------------



A Participants Matching Account, ESOP Matching Account, Profit Sharing Account and ESOP Profit Sharing Account shall in all events be or become fully vested and
nonforfeitable upon the first to occur of the following events:



|(a) | Retirement;
|--- | -----------



|(b) | Disability while employed by the Company, a Related Company or an Affiliate;
|--- | ----------------------------------------------------------------------------



|(c) | Death while employed by the Company, a Related Company or an Affiliate;
|--- | -----------------------------------------------------------------------



|(d) | Upon the complete discontinuance of employer contributions to the Plan;
|--- | -----------------------------------------------------------------------



|(e) | Upon the complete termination of the Plan; or
|--- | ---------------------------------------------



|(f) | Upon the partial termination of the Plan, if the Participant is affected by such partial termination.
|--- | -----------------------------------------------------------------------------------------------------



ARTICLE 5: LIMITATIONS ON CONTRIBUTIONS



|5.1 | Limitation on Elective Deferrals
|--- | --------------------------------



|(a) | Notwithstanding any other provision of the Plan to the contrary, Elective Deferrals made on behalf of a Participant in any calendar year under the Plan and all plans, contracts or
arrangements maintained by the Company or any Related Company shall not exceed $10,500, as such amount may be adjusted in accordance with Code Section 402(g) and the regulations there under, the provisions of which are hereby incorporated by
reference. In the event that the limitation set forth in the preceding sentence is exceeded with respect to any Participant in any calendar year, the Participant shall be deemed to have notified the Committee of such excess amount (hereinafter
referred to as Excess Elective Deferrals), and such Excess Elective Deferrals, increased by any income and decreased by any losses attributable thereto shall be distributed to the Participant no later than April 15 of the following
calendar year.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(b) | If a Participant also participates in any other plans, contracts or arrangements subject to the limitation set forth in Section 5.1(a) above and has made Excess
Elective Deferrals
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



25



---

| | for any calendar year under this Plan when combined with all other such plans, contracts or arrangements, the Participant may notify the Committee in writing
no later than March 1 of the following calendar year of the amount of Elective Deferrals made under the Plan that constitute Excess Elective Deferrals. Upon such timely notification by a Participant, the Plan shall distribute such Excess Elective
Deferrals, increased by any income and decreased by any losses attributable thereto no later than the April 15 of such following calendar year; provided, however, that in no event may a Participant receive from the Plan a distribution of Excess
Elective Deferrals for a calendar year in an amount exceeding the Participants total Elective Deferrals under the Plan for such calendar year.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(c) | The determination of the income and loss allocable to Excess Elective Deferrals shall be made in accordance with Code Section 402(g) and the regulations there under, as may be
amended from time to time.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(d) | The amount of Excess Elective Deferrals that may be distributed to a Participant for a calendar year pursuant to this Section 5.1 shall be reduced by any Excess Contributions (as
defined in Section 5.2(b)) previously distributed with respect to the Participant for the Plan Year beginning with or within such calendar year. In the event of a reduction under this Section 5.1(d), the amount of Excess Contributions included in
the gross income of the Participant and reported as a distribution of Excess Contributions shall be reduced by the amount of the reduction under this Section 5.1(d).
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(e) | Notwithstanding any other provision of the Plan, to the extent that Excess Elective Deferrals are distributed to a Participant under this Section 5.1, all corresponding Matching
Contributions (increased by any income and decreased by any losses attributable thereto), if any, shall be forfeited at the time of such distribution and shall be applied to reduce the Companys future contributions to the Plan.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(f) | Excess Elective Deferrals and income allocable thereto that are distributed to a Participant in accordance with this Section 5.1 shall not be treated as an Annual Addition to the
Participants Combined Accounts for purposes of the limitations set forth in Section 5.4.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|5.2 | ADP Limitation
|--- | --------------



|(a) | Notwithstanding any other provision of the Plan, in each Plan Year, the ADP for the group of eligible HCEs shall satisfy one of the following tests:
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------



| | (1) | The ADP for the group of eligible HCEs for that Plan Year shall not exceed the ADP for the group of eligible NHCEs for that same Plan Year multiplied by 1.25, or
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (2) | The ADP for the group of eligible HCEs for that Plan Year shall not exceed the ADP for the group of eligible NHCEs for that same Plan Year multiplied by 2.0, but not more than 2
percentage points in excess of the ADP for the group of eligible NHCEs.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



26



---

The determination of whether the Plan satisfies the requirements of this Section 5.2(a) shall be made in
accordance with Code Section 401(k)(3) and the regulations there under (including Section 1.401(k)-1(b) of such regulations) and, if applicable for Plan Years beginning prior to January 1, 2002, Code Section 401(m)(9) and regulation section
1.401(m)-2, as may be amended from time to time, the provisions of which are hereby incorporated by reference and shall override the provisions of the Plan to the extent inconsistent therewith. The ESOP and Non-ESOP Components of the Plan shall be
separately tested under this Section 5.2; and collectively bargained employees shall be disaggregated for testing purposes as required by IRS regulations.



|(b) | If, during a Plan Year, it is determined that a HCEs actual deferral ratio would cause the Plan to exceed the maximum permissible ADP specified in Section 5.2(a) above for the
Plan Year, then the Plan Administrator may, to the extent necessary to prevent such excess Elective Contributions (Excess Contributions) from being contributed to the Plan, reduce the Salary Percentage elections of such eligible HCEs
either:
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (1) | in increments of one-tenth of one percent (.10%), commencing with the elections by those HCEs with the highest dollar amount of deferrals, or
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------



| | (2) | in accordance with rules established and uniformly applied by the Plan Administrator that are consistent with all applicable regulations under the Code.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------



|(c) | In the event that the Plan fails to satisfy the requirements set forth in Section 5.2(a) above for any Plan Year, then the Excess Contributions and any income or loss allocable
thereto shall be distributed to the HCEs on whose behalf such Excess Contributions were made, to the extent practicable, within two and one-half months following the Plan Year for which such Excess Contributions were made, but in no event later than
the close of the Plan Year following the Plan Year in which such Excess Contributions were made. The determination of the income and loss allocable to Excess Contributions shall be made in accordance with Code Section 401(k) and the regulations
there under.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(d) | Effective for Plan Years beginning after December 31, 1996, the amount of Excess Contributions attributable to an individual HCE for a Plan Year shall be calculated and distributed
according to the following procedures:
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (1) | Step 1: the total dollar amount of Excess Contributions is determined by reducing the Elective Contributions made on behalf of HCEs in the order of their ADPs, beginning with the
highest of such percentages and continuing until one of the tests described in Section 5.2(a) is satisfied.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (2) | Step 2: the amount determined in Step (1) above shall be distributed beginning with the HCE with the highest dollar amount of Elective Contributions to equal the dollar amount of
the HCE with the next highest dollar amount of Elective Contributions and continuing in succeeding order of the HCEs until all Excess Contributions are accounted for as determined in Step (1) above.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(e) | The amount of Excess Contributions to be distributed under this Section 5.2 with respect to HCEs for a Plan Year shall be reduced by the amount of Excess Elective
Deferrals
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------



27



---

| | previously distributed to the HCE for the calendar year ending with or within the Plan Year.
| | --------------------------------------------------------------------------------------------



|(f) | Notwithstanding any other provision of the Plan, to the extent that Excess Contributions are distributed to a Participant under this Section 5.2, all corresponding Matching
Contributions (increased by any income and decreased by any losses attributable thereto), if any, shall be forfeited at the time of such distribution and applied to reduce the Companys future contributions to the Plan.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|5.3 | ACP Limitation
|--- | --------------



|(a) | Notwithstanding any other provision of the Plan, in each Plan Year, the ACP for the group of eligible HCEs shall satisfy one of the following tests:
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------



| | (1) | The ACP for the group of eligible HCEs shall not exceed the ACP for the group of eligible NHCEs for the Plan Year multiplied by 1.25, or
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------



| | (2) | The ACP for the group of eligible HCEs shall not exceed the ACP for the group of eligible NHCEs for the Plan Year multiplied by 2.0, but not more than 2 percentage points in excess
of the ACP for the group of eligible NHCEs.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



The
determination of whether the Plan satisfies the requirements of this Section 5.3(a) shall be made in accordance with Code Section 401(m) and the regulations there under (including, without limitation, Section 1.401(m)-1(b) of such regulations and,
if applicable for Plan Years beginning prior to January 1, 2002, Code Section 401(m)(9) and regulation section 1.401(m)-2), as may be amended from time to time, the provisions of which are hereby incorporated by reference and shall override the
provisions of the Plan to the extent inconsistent therewith. The ESOP and Non-ESOP Components of the Plan shall be separately tested under this Section 5.3, and collectively bargained employees shall be disaggregated for testing purposes as required
by IRS regulations.



|(b) | In the event that the Plan exceeds the limitations set forth in Section 5.3(a) above for any Plan Year, then the excess Matching Contributions (Excess Aggregate
Contributions) and any income or loss allocable thereto shall, to the extent vested (as determined in accordance with Section 4.2 above), be distributed to the HCEs on whose behalf such Excess Aggregate Contributions were made, to the extent
practicable, within two and one-half months following the Plan Year for which such Excess Aggregate Contributions were made, but in no event later than the close of the Plan Year following the Plan Year in which such Excess Aggregate Contributions
were made. To the extent that Excess Aggregate Contributions are not vested, such Excess Aggregate Contributions and any income or loss allocable thereto shall be forfeited and applied to reduce the Companys future contributions to the Plan.
The determination of the income and loss allocable to Excess Aggregate Contributions and the application of forfeited Excess Aggregate Contributions and the income and loss allocable thereto shall be made in accordance with Code Section 401(m) and
the regulations there under.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



28



---

|(c) | Effective for Plan Years beginning after December 31, 1996, the amount of Excess Aggregate Contributions attributable to an individual HCE for a Plan Year shall be calculated and
distributed according to the following procedures:
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (1) | Step 1: the total dollar amount of Excess Aggregate Contributions is determined by reducing the contributions made on behalf of HCEs in the order of their ACPs, beginning with the
highest of such percentages and continuing until one of the tests described in Section 5.3(a) is satisfied.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (2) | Step 2: the amount determined in Step (1) above shall be distributed, or if such amount is not vested, shall be forfeited, beginning with the HCE with the highest dollar amount of
Matching Contributions to equal the dollar amount of the HCE with the next highest dollar amount of Matching Contributions and continuing in succeeding order of the HCEs until all Excess Aggregate Contributions are accounted for as determined in
Step (1) above.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|5.4 | Maximum Limitations on Annual Additions
|--- | ---------------------------------------



|(a) | Notwithstanding any other provision of the Plan to the contrary, Annual Additions credited under the Plan and all other defined contribution plans maintained by the Company or an
Affiliate with respect to each Participant for any Limitation Year shall not exceed the lesser of:
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (1) | $35,000 ($40,000, effective January 1, 2002) as adjusted from time to time by the Commissioner for increases in the cost of living in accordance with Code Section 415, or
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (2) | 25% of the Participants Compensation for such Limitation Year (100%, effective January 1, 2002).
| | --- | -------------------------------------------------------------------------------------------------



|(b) | If the Annual Additions credited under the Plan with respect to a Participant for any Limitation Year exceed the limitations of Section 5.4(a) as a result of the
allocation of forfeitures, a reasonable error in estimating the Participants Compensation, a reasonable error in determining the amount of Elective Deferrals that the Participant may contribute or any other circumstance permitted pursuant to
the regulations and rulings promulgated under Code Section 415, then the Elective Contributions made by the Participant for the Limitation Year which constitute excess Annual Additions, and any income allocable thereto, shall be distributed to the
Participant. If, after such distribution, the Annual Additions with respect to the Participant for the Limitation Year still exceed the limitations set forth in Section 5.4(a) above, such excess amounts shall be used to reduce Company contributions
for the Participant for the next Limitation Year (and succeeding Limitation Years, as necessary) if the Participant is covered by the Plan at the end of the Limitation Year. If the Participant is not covered by the Plan as of the end of the
Limitation Year, then the excess amounts shall be held unallocated in a suspense account for the Limitation Year and allocated and reallocated in the next Limitation Year to all of the remaining Participants, but only to the extent that such
allocation or reallocation
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



29



---

| | would not cause the Annual Additions to such Participants to violate the limitations of Code Section 415 for such Limitation Year. If a suspense account is
in existence at any time during a Limitation Year, all amounts in the suspense account must be allocated or reallocated before any Company contributions or Elective Contributions which would constitute Annual Additions may be made to the Plan for
the Limitation Year (and succeeding Limitation Years, as necessary) in accordance with the rules set forth in Section 1.415-6(b)(6)(i) of the regulations under Section 415 of the Code. If a suspense account is in effect, it shall share in investment
gains or losses.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(c) | If a Participant also participates in any other defined contribution plan or plans maintained by the Company or an Affiliate which are subject to the limitation set forth in Section
5.4(a) above and, as a result, such limitation would be exceeded with respect to the Participant in any Limitation Year, any reduction or other permissible method necessary to ensure compliance with such limitation first shall be made under such
other plan or plans in accordance with the terms thereof. If, after such correction, a further reduction is necessary to ensure that the limitation set forth in Section 5.4(a) above is not exceeded, Annual Additions credited under the Plan with
respect to the Participant shall be reduced in accordance with the provisions of this Section 5.4.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(d) | Reserved.
|--- | ---------



|(e) | The determination of whether the Plan satisfies the requirements of this Section 5.4 with respect to a Participant shall be made in accordance with Code Section 415 and the
regulations there under, the provisions of which are hereby incorporated by reference and shall override the provisions of the Plan to the extent inconsistent therewith.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|5.5 | Deduction Limitation
|--- | --------------------



|(a) | In no event shall the contributions for any Plan Year, either separately or when combined with the contributions of the Company under all other qualified retirement plans of the
Company, exceed the amount allowable as a deduction for Federal income tax purposes.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(b) | If any contribution required to be made pursuant to Article 3 would cause the limitation of subsection (a) above to be exceeded in any Plan Year, then such contribution shall not be
made and, to the extent not made, any Participants agreement to reduce his cash remuneration in consideration thereof shall be deemed null and void.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



30



---

ARTICLE 6: THE FUND, INVESTMENTS, AND ACCOUNTING



|6.1 | Trust Fund
|--- | ----------



|(a) | The Fund shall be held in trust by one or more Trustees appointed by the Committee under one or more Trust Agreements and shall consist of the contributions of the Company, all
investments made therewith and proceeds thereof and all earnings thereon and profits there from, less the distributions which at the time of reference have been made by the Trustee.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(b) | No person shall have any right to or interest in the Fund except as provided in the Plan and the Trust Agreements.
|--- | ------------------------------------------------------------------------------------------------------------------



|(c) | The Trust Fund shall in no event (within the taxable year or thereafter) be used for or diverted to purposes other than for the exclusive benefit of Participants and their
Beneficiaries (including the payment of the expenses of the administration of the Plan and of the Trust Fund) prior to the satisfaction of all liabilities, except at the Companys request:
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (1) | A contribution that is made by the Company by a mistake of fact may be returned to the Company within one year after the payment of the contribution; or
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------



| | (2) | A contribution that is conditioned upon its deductibility under Section 404 of the Code pursuant to Section 3.7 may be returned to the Company, to the extent that the contribution
is disallowed as a deduction, within one year after such disallowance.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|6.2 | Investment Funds in the Non-ESOP Component and the ESOP Component
|--- | -----------------------------------------------------------------



|(a) | Upon direction of the Committee, the portion of the Fund constituting the Non-ESOP Component shall be subdivided into Investment Funds that shall be separately invested. Not less
than three of such Investment Funds shall constitute a broad range of investment alternatives, and shall provide a Participant a reasonable opportunity to materially affect the potential return on amounts in such Participants Combined Accounts
and the degree of risk to which such amounts are subject. One such investment alternative shall be designated as the Fixed Income Fund and shall constitute an income producing, low risk, liquid fund, sub-fund or account, as determined by
the Committee (or its delegate). Such broad range of investment alternatives shall satisfy the following requirements:
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (1) | each shall be diversified,
| | --- | --------------------------



| | (2) | each shall have materially different risk and return characteristics,
| | --- | ---------------------------------------------------------------------



31



---

| | (3) | all of which, in the aggregate, enable the Participant, by choosing among them, to achieve a portfolio with aggregate risk and return characteristics at any point within the range
normally appropriate for the Participant, and
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (4) | each of which, when combined with investments in the other alternatives, tends to minimize through diversification the overall risk to a Participants portfolio.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------



|(b) | On and after the Closing Date, the portion of the Fund constituting the ESOP Component shall be invested primarily in Company Stock.
|--- | ------------------------------------------------------------------------------------------------------------------------------------



|(c) | Notwithstanding the foregoing, any Investment Fund or the ESOP Component may retain such investments of another nature or cash balances as may be needed in order to effect
distributions or to meet other administrative requirements of the Plan.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(d) | Contributions received by the Trustee may be invested in short-term investments pending transfer to an Investment Fund.
|--- | -----------------------------------------------------------------------------------------------------------------------



|(e) | On and after the Closing Date, Participants shall designate the portion of their Savings Percentage to be invested in the ESOP Component or the Non-ESOP Component. To the extent a
Participant fails to make such a designation, he shall be deemed to have invested his Savings Percentage in the ESOP Component. Further, if a Participants Savings Percentage (i) exceeds 6% of Covered Compensation and (ii) is invested partially
under the ESOP Component of the Plan and partially under the Non-ESOP Component of the Plan, for purposes of determining the Matching Contribution to which the Participant is entitled under Section 3.2, contributions to the ESOP Component shall be
counted first in determining the amount of the Participants contributions eligible to receive a Matching Contribution.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|6.3 | Participants Designation of Investments Funds under the Non-ESOP Component
|--- | ---------------------------------------------------------------------------



|(a) | Prior to the Closing Date, each Participant shall be entitled to designate the percentage (in multiples of 5%) of his Non-ESOP Accounts in the Fund that shall be allocated to each
Investment Fund.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(b) | Effective on or after the Closing Date, each Participant shall be entitled to designate the percentage (in multiples of 5%) of his Elective Contributions invested in the Non-ESOP
Component that shall be allocated to each Investment Fund in the Non-ESOP Component.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(c) | Effective on and after the Closing Date, each Participant shall be entitled to designate the percentage (in multiples of 5%) of any Company contribution under Section 3 to his
Non-ESOP Account that shall be allocated to each Investment Fund in the Non-ESOP Component.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(d) | A Participant who has no designation in effect under Section 6.3 shall be deemed to have allocated his entire Non-ESOP Accounts to the Fixed Income Fund.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------



32



---

|(e) | The designation of the allocation of contributions and transfer to the Investment Funds is subject to the procedural rules established by the Plan Administrator from time to time,
including the following:
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (1) | Designations and transfers shall be made or changed upon such advance notice, and in such form and manner, as the Plan Administrator shall prescribe by written rule established and
applied on a uniform and nondiscriminatory basis to all Participants similarly situated.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (2) | Designations made under this Section 6.3 shall continue in effect until changed by filing a new designation in accordance with this Section 6.3.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------



| | (3) | Any withdrawals or distributions from a Participants Non-ESOP Accounts in the Fund shall be made among the Investment Funds in proportion to the balance of his interest in
each separate Investment Fund as of the Valuation Date coinciding with or immediately following the date of that authorized withdrawal or distribution directions are received by the Trustee from the Plan Administrator.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|6.4 | Participants Designation of Investment in Company Stock
|--- | --------------------------------------------------------



|(a) | Effective as soon as practicable following the Closing Date, each Participant shall be entitled to designate the percentage (in multiples of 5%) of his Elective Contributions that
shall be invested in Company Stock under the ESOP Component. To the extent a Participant directs his Elective Contributions to be invested under the ESOP Component of the Plan, such contributions shall be accumulated in a short term interest fund in
the ESOP Component of the Plan and shall be converted to Company Stock on a semiannual basis using the Company Stock value as of the Valuation Date preceding or following the conversion (whichever is lower), and shall be allocated to the
Participants ESOP Elective Account. To the extent that the purchase price at the end of the prior valuation period is less than the fair market value on the date of purchase, the shares will be treated as though they were purchased at the end
of the prior valuation period and the excess will be considered appreciation on the shares for all purposes of the Plan.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(b) | Special One-Time Election:
|--- | --------------------------



| | (1) | Prior to the Closing Date, each Participant in the Plan shall have the right to make a one-time irrevocable election to transfer, effective as of the Closing Date,
all or a portion of his Non-ESOP Accounts under the Plan (other than his Non-ESOP Loan Account, if any) and/or account balance under the MSP to his ESOP Transfer Account. Such transferred amounts will be invested in stock of PDC Acquisition
Corporation, which will become Company Stock immediately after the Closing Date. Any such investment direction shall be made exclusively in accordance with: (A) the terms, conditions, limitations, and restrictions established by the Plan
Administrator (which may include nondiscriminatory provisions for allocating the right to purchase Company Stock in the event that the offers to buy such stock exceeds the amount of such stock available), and (B)
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



33



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| | the provision of this Plan and the MSP, as applicable. An election (or failure to elect) as provided above shall be irrevocable. For the purposes of this
investment election, the Participants shall be considered named fiduciaries, as described in Sections 402 and 403 of ERISA.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (2) | Following the effective date of the irrevocable election made by a Participant pursuant to this Section 6.4(b) and the Closing Date, the Participants shall not be able to elect to
transfer any portion of their investment in Company Stock held in their ESOP Transfer Accounts, except as provided in Section 6.5.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|6.5 | Diversification of ESOP Accounts
|--- | --------------------------------



|(a) | Each Participant who has attained age 55 years and has at least ten years of participation in the Plan (measured from the date any account was first established for the Participant
under the Plan) or the MSP (if the Participant made a transfer from the MSP as described in Section 6.4(b)) (a Qualified Participant) may elect during each of the Participants Qualified Election Periods (as defined below) to
diversify a portion of the Qualified Participants ESOP Accounts balance eligible for diversification (as described below), by transferring the applicable amount to one or more Investment Funds under the Non-ESOP Component.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (1) | The portion of a Qualified Participants ESOP Accounts balance subject to diversification shall equal twenty-five percent (fifty percent in the case of the Qualified
Participants last year of the Qualified Election Period) of the total number of shares of Company Stock allocated to the Participants ESOP Accounts (including shares that the Participant previously elected to diversify pursuant to this
subsection), less the number of such shares previously diversified pursuant to the Qualified Participants election under this subsection. In any one election, a Qualified Participant may diversify the entire remaining portion of his ESOP
Accounts balance eligible for diversification or a part of such diversifiable portion equal to any whole percentage of five percent or more of his ESOP Accounts balance.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (2) | For purposes of this subsection, a Qualified Election Period means: (A) the ninety-day period immediately following the last day of the first Plan Year in which the
Participant becomes a Qualified Participant, and (B) the ninety-day period immediately following the last day of each of the five Plan Years immediately following the first Plan Year in which the Participant becomes a Qualified Participant. Any
election made in accordance with subparagraph (A) next above with respect to any Qualified Election Period shall be implemented no later than ninety days after the end of such Qualified Election Period, or as soon as administratively feasible
thereafter, and shall be based on the price of the Company Stock as of the most recent Valuation Date.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (3) | The provisions of this subsection shall not apply to any Participant if the value of the Participants ESOP Accounts (determined as of the regular Valuation
Date
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------



34



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| | immediately preceding the first day on which the Participant would otherwise be entitled to make an election under this subsection) is $500 or less.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------



| | (4) | Any amounts distributed in cash or transferred from the Company Stock Fund to one or more of the Investment Funds under this subsection shall not be available for distribution in
the form of Company Stock (as otherwise allowed under Article 7).
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(b) | Additional Diversification Right
|--- | --------------------------------



Subject to the Companys satisfaction of its bank loan covenants, in the first quarter of the 2006 Plan Year, and in the first quarter of each Plan Year thereafter,
a Participant shall have the right to make one election each Plan Year to transfer up to 10% of the current value of the ESOP Transfer Account to an Investment Fund other than the Company Stock Fund.



|6.6 | Reserved
|--- | --------



|6.7 | Allocation and Crediting of Employer Contributions
|--- | --------------------------------------------------



Subject to the provisions of Article 5, Matching Contributions and Profit Sharing Contributions, made under Article 3, in the form of Company Stock or cash, shall be
allocated and credited to the ESOP Accounts or Non-ESOP Accounts, as applicable, of each eligible Participant in accordance with the provision of subsection Article 3. Upon the purchase of Company Stock with cash held in a Participants ESOP
Cash Account, an appropriate number of shares of Company Stock shall be credited to the Participants ESOP Stock Account and the Participants ESOP Cash Account shall be charged by the amount of the cash used to purchase the Company Stock
for the Participants ESOP Stock Account.



|6.8 | Valuation of Investment Funds and Adjustment of Non-ESOP Accounts
|--- | -----------------------------------------------------------------



|(a) | A Participants interest in his Non-ESOP Accounts as of any Valuation Date shall consist of the sum of the fair market values of his then interest in each Investment Fund. The
Plan Administrator shall maintain a record of the amount to the credit of the Non-ESOP Accounts of each Participant in the Fund and in each Investment Fund.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|
|

|(b) | The Committee may, for administrative purposes, establish unit values for one or more Investment Funds (or any portion thereof) and maintain the Non-ESOP Accounts setting forth each
Participants interest in such Investment Fund (or any portion thereof) in terms of such units, all in accordance with such rules and procedures as the Committee shall deem to be fair, equitable and administratively practicable. In the event
that unit accounting is thus established for any Investment Fund, the value of a Participants interest in that Investment Fund (or any portion thereof) at any time shall be an amount equal to the then value of a unit in such Investment Fund
(or any portion thereof) multiplied by the number of units then credited to the Participant.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



35



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|(c) | Each Participants interest in each Investment Fund shall be adjusted as of each Valuation Date to reflect his proportionate share of the total net fair market value of such
Investment Fund, based upon his Non-ESOP Account balance in such Investment Fund as of the immediately preceding Valuation Date, as adjusted for subsequent additions thereto and distributions or withdrawals there from (including transfers from or to
any other Investment Fund), in such manner as the Plan Administrator shall determine in its sole discretion to be fair, equitable, and administratively practicable.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|6.9 | Adjustment of ESOP Accounts
|--- | ---------------------------



|(a) | On the Closing Date, the amounts described in Section 6.4(b) shall be invested in Company Stock. Shares of Company Stock purchased in accordance with Section 6.4(b) shall be
credited to Participants ESOP Transfer Accounts as of the Closing Date.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(b) | Participants ESOP Cash Accounts and ESOP Stock Accounts shall be adjusted as follows:
|--- | --------------------------------------------------------------------------------------



| | (1) | The Plan Administrator shall credit to the ESOP Cash Account of each Participant any cash dividends paid to the Trustee on shares of Company Stock held in that Participants
ESOP Stock Account as of a record date. Such cash dividends shall be used to purchase shares of Company Stock. The Plan Administrator shall credit an appropriate number of shares of Company Stock to the ESOP Stock Account of such Participant, and
the Participants ESOP Cash Account shall then be charged by the amount of cash used to purchase such Company Stock for the Participants ESOP Stock Account. For the purposes of this Plan, the term dividends shall include both
dividends as described in Code Section 316 and all distributions made with respect to the shares of stock of an S corporation.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (2) | As of each Valuation Date, before the allocation of any Elective Contributions, Matching Contributions or Profit Sharing Contributions under Article 3 made in cash to be invested in
Company Stock as of such date, any appreciation, depreciation, income, gains or losses in the fair market value of the Participants ESOP Cash Accounts shall be allocated among and credited to the ESOP Cash Accounts of Participants, pro rata,
according to the amount of such contributions.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



As of each Valuation Date, before the allocation of any Elective Contributions, Matching Contributions or Profit Sharing contributions under Article 3 made in Company Stock as of such date, any appreciation, depreciation, income, gains, or
losses in the fair market value of the Participants ESOP Stock Accounts shall be allocated among and credited to the ESOP Stock Accounts of Participants, pro rata, according to the number of shares of Company Stock allocated to each
Participants ESOP Stock Account.



| | (3) | For purposes of the Plan and Trust, the FMV of Company Stock shall be determined by an Independent Appraiser, as of each Valuation Date, in
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------



36



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| | accordance with the terms of the Trust and the provisions of Section 3(18) of ERISA.
| | ------------------------------------------------------------------------------------



|(c) | Shares of Company Stock received by the Trustee that are attributable to stock dividends, stock splits or to any reorganization or recapitalization of the Company shall be credited
to the Participants ESOP Stock Accounts so that the interests of Participants immediately after any such stock dividend, split, reorganization or recapitalization are the same as such interests immediately before such event.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(d) | ESOP Share Records. The Plan Administrator shall maintain or cause to be maintained records as to the number and cost of shares of Company Stock acquired or transferred by or within
the Trust in accordance with the applicable provisions of this Section 6.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(e) | Notwithstanding any other provision of this Plan to the contrary, any Participant who:
|--- | --------------------------------------------------------------------------------------



| | (1) | has an ESOP Transfer Account,
| | --- | -----------------------------



| | (2) | was at least age 55 on the Closing Date, and
| | --- | --------------------------------------------



| | (3) | during the four-year period immediately following the Closing Date:
| | --- | -------------------------------------------------------------------



| | (A) | retires, dies, or incurs a Disability; and
| | --- | ------------------------------------------



| | (B) | requests a lump sum distribution from his ESOP Transfer Account
| | --- | ---------------------------------------------------------------



shall have the right to sell his shares distributed from the Participants ESOP Transfer Account to the Company at a value per share equal to the
greater of: (A) the original purchase price of a share of Company Stock as of the Closing Date, and (B) the then FMV of Company Stock. The foregoing sentence shall not apply if a Participant requests installment distributions from his ESOP Transfer
Account but shall apply if the ESOP Committee, pursuant to its uniform, nondiscriminatory policy for processing distributions and loans from the ESOP Component, converts a Participants request for a lump sum distribution into installment
payments.



|6.10 | Former Participants and Beneficiaries
|---- | -------------------------------------



|(a) | A Former Participant or Beneficiary who is entitled to installment or other deferred distribution of any interest in the Fund shall be entitled to designate the portion of the
Non-ESOP Accounts to be allocated to each Investment Fund in the same manner as prescribed above, as if he were a Participant.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(b) | Such interest in the Fund shall continue to be adjusted in accordance with the provisions of this Article 6 as if the Former Participant or Beneficiary were still a Participant
until distribution thereof is completed.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



37



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|6.11 | Loans
|---- | -----



|(a) | A Participant who is an Employee may apply to the Plan Administrator to borrow from the vested portion of the Borrowers ESOP and Non-ESOP Accounts in the Trust Fund, and the
Plan Administrator may direct the Trustee to permit such a loan distribution. Any such application must be accompanied by a reasonable origination fee established by the Plan Administrator and charged to all Borrowers on a uniform basis. Loans shall
be made in accordance with the terms, conditions, limitations, and restrictions established by the Committee and the rules of this Plan and shall be available to all eligible Participants on a reasonably equivalent basis. Loans shall not be made
available to HCEs, officers or shareholders in an amount greater than is made available to other Borrowers.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(b) | The following terms and conditions shall apply to loans:
|--- | --------------------------------------------------------



|                     |  |                                                                                               |  |                                                                                                                                                                                                                                                                                                                                                                         
|-------------------- |  | --------------------------------------------------------------------------------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|For Loan Amounts of: |  | The Maximum Loan Value Available Is:                                                          |  | Loans are Permitted Solely For:                                                                                                                                                                                                                                                                                                                                         
|$1,000 - $10,000     |  | 50% of the balance in the Plan Component (ESOP or Non-ESOP) from which the loan is requested. |  | No restrictions                                                                                                                                                                                                                                                                                                                                                         
|                     |  |                                                                                              
|$10,001 - $25,000    |  | 50% of the balance in the Plan Component (ESOP or Non-ESOP) from which the loan is requested. |  | 1) Payment of unreimbursed medical expenses of the employee, spouse or dependents 2) Preventing foreclosure on or eviction from the employees principal residence 3) Payment of tuition for the next 12 months of post-secondary education for the employee, spouse or dependents 4) Purchase of the employees principal residence (but not regular mortgage payments)



|(c) | All such loans also shall be subject to the following terms and conditions:
|--- | ---------------------------------------------------------------------------



| | (1) | A loan may be made in an amount (not less than $1,000) which, when added to the outstanding balance of all prior loans to the Borrower under the Plan and other plans of the Company
and its Related Companies, does not exceed the lesser of:
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (A) | $50,000 reduced by the excess, if any, of:
| | --- | ------------------------------------------



(i) the highest outstanding balance of loans from such plans during the one-year period ending on the day before the date such loan was made, over



38



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(ii) the outstanding balance of loans from such plans on the date on which such loan was made; or



| | (B) | one-half of the present value of the Borrowers non-forfeitable accrued benefit under the Plan.
| | --- | -----------------------------------------------------------------------------------------------



| | (2) | Each loan shall be evidenced by a promissory note. All loans other than Principal Residence Loans (as defined below) shall be amortized in substantially level payments, made not
less frequently than quarterly, for a period of not less than one (1) year and not more than five (5) years. Principal Residence Loans shall be amortized in substantially level payments, made not less frequently than quarterly, for a period of not
less than one (1) year and not more than fifteen (15) years. For this purpose, a Principal Residence Loan is a loan that is made to a Participant to acquire any dwelling unit that, within a reasonable time is to be used (determined at the time the
loan is made) as the principal residence of the Participant. A Borrower requesting a Principal Residence Loan for a term extending beyond five (5) years shall provide copies of any documents relating to the purchase of such principal residence that
the Plan Administrator may deem necessary to verify that the proceeds of such loan will be used as specified above.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (3) | A loan shall be adequately secured by the Borrowers vested ESOP or Non-ESOP Account balances (as applicable) in the Plan.
| | --- | --------------------------------------------------------------------------------------------------------------------------



| | (4) | A loan shall bear a reasonable rate of interest, as established by the Plan Administrator, which provides a return commensurate with the interest rates charged by persons in the
business of lending money for loans that would be made under similar circumstances.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (5) | Repayment will be made by means of payroll deduction from the Borrowers salary. A Borrower may repay an outstanding loan in full at any time without penalty.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (6) | A loan may be taken out no more than once in any twelve-month period from each Component of the Plan and a Borrower may have no more than one loan outstanding from each Component
(ESOP and Non-ESOP) of the Plan at any one time; provided, however, that the foregoing restrictions of no more than one loan shall not apply to loans originated prior to the Closing Date. Notwithstanding the foregoing, in no event shall a Borrower
who has prepaid a loan be permitted to receive another loan from the Plan for three (3) months from the date of such prepayment.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (7) | Participant must take a loan from the Non-ESOP Component of the Plan before taking a loan from the ESOP Component of the Plan. Loans from the ESOP Component may be
requested at specific times identified by the ESOP Committee
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



39



---

| | and intended to coincide with the Valuation Dates for Company Stock. Loans from the ESOP Component are subject to the approval of the ESOP Committee,
pursuant to its uniform, nondiscriminatory policy for processing distributions and loans from the ESOP Component.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (8) | A reasonable annual administrative fee may be charged for each year that a loan is outstanding.
| | --- | -----------------------------------------------------------------------------------------------



| | (9) | A loan shall become immediately due and payable in full upon a Borrowers Retirement, death, separation from service due to Disability or termination of employment. If the loan
is not paid in full within 30 days of the occurrence of any one of the foregoing events, the Plan Administrator shall foreclose on the loan in order to collect the full remaining outstanding loan balance or shall make such other arrangements with
the Borrower as the Plan Administrator deems appropriate. Upon default, an actual reduction of the Borrowers Elective Account or ESOP Elective Account under the Plan shall not be effected until occurrence of a distributable event under Code
Section 401(k)(2)(B), and no rights against the Borrower or the security for such loan shall be deemed waived by the Plan as a result of such delay.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (10) | Interest on and repayments of the principal of a loan shall be allocated to the Component (ESOP or Non-ESOP) from which the loan was made and, within such Component, shall be
invested in the same manner as Elective Contributions.
| | ---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(d) | Proceeds for a Participants loan under the Non-ESOP Component of the Plan shall be made in proportion to the balance of his interest in each separate Investment Fund as of the
Valuation Date coinciding with or immediately following the date of that authorized loan processing directions are received by the Trustee from the Plan Administrator.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(e) | The Plan Administrator may adopt additional written procedures with respect to Plan loans made pursuant to this Section 6.11, provided that such procedures do not conflict with the
terms of the Plan or applicable law.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



ARTICLE
7: DISTRIBUTION



|7.1 | Distribution Options for Participants who Retire or Incur a Disability
|--- | ----------------------------------------------------------------------



Upon the Retirement or Disability of a Participant, the entire amount to the credit of his Combined Accounts in the Fund shall be eligible to be distributed to him in
accordance with his written election made pursuant to the following:



|(a) | Non-ESOP Accounts
|--- | -----------------



A Participant who Retires or becomes Disabled may elect, on a form prescribed by the Plan Administrator, to receive distribution of the portion of his
Non-ESOP Accounts in a form that provides for:



| | (1) | payment in an immediate lump sum;
| | --- | ---------------------------------



45



---

| | (2) | payment in a deferred lump sum after Retirement or Disability; or
| | --- | -----------------------------------------------------------------



| | (3) | payment in immediate or deferred annual installments over a term certain not to exceed 10 years.
| | --- | ------------------------------------------------------------------------------------------------



|(b) | ESOP Accounts
|--- | -------------



Distributions following a Participants Disability or Retirement will be made in the distribution options described in paragraph (a) above as
selected by the Participant in the form of whole and partial shares of Company Stock, subject to Section 7.4 below provided, however, that a request for an immediate lump sum payment shall be subject to the consent of the ESOP Committee pursuant to
its uniform, nondiscriminatory policy for processing distributions and loans from the ESOP Component.



|(c) | Additional Rules
|--- | ----------------



| | (1) | Any payments made under this Section 7.1 shall be made as soon as practicable after the date such form is received by the Plan Administrator.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------



| | (2) | Upon the death of a Former Participant, any remaining balances in his Combined Accounts, including unpaid installments, shall be distributed as provided in Section 7.2.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (3) | An election to receive installment distributions as described in subsection (a)(3) above may be commuted into a single sum payment at any time by the Participant or Beneficiary, as
applicable, upon written notice to the Plan Administrator.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|7.2 | Distribution Options Upon Death
|--- | -------------------------------



Upon the death of a Participant prior to his Retirement or other termination of employment with the Company or a Related Company, or upon the death of a Former
Participant prior to the complete distribution of his Combined Accounts, the Participants Beneficiary may elect to have the Participants Combined Account, distributed in accordance with Section 7.1 at any time that complies with the
requirements of Section 7.8.



|7.3 | Distribution Options Upon Termination of Employment/Permanent Layoff
|--- | --------------------------------------------------------------------



|(a) | Upon the termination of employment of a Participant for any reason other than Retirement, Disability or death:
|--- | --------------------------------------------------------------------------------------------------------------



| | (1) | Non-ESOP Accounts
| | --- | -----------------



Except as provided in Section 7.7, the entire vested amount to the credit of his Non-ESOP Accounts shall be distributed in a lump sum as soon as
practicable after termination of employment.



41



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| | (2) | ESOP Accounts
| | --- | -------------



| | (A) | The entire amount to the credit of his ESOP Transfer Account shall be eligible to be distributed to him as soon as practicable after his termination of employment in a lump sum in
the form of whole and partial shares of Company Stock, subject to Section 7.4 below; provided, however, that a request for an immediate lump sum payment shall be subject to the consent of the ESOP Committee pursuant to its uniform, nondiscriminatory
policy for processing distributions and loans from the ESOP Component.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (B) | The entire vested amount to the credit of his ESOP Accounts (other than his ESOP Transfer Account), shall be eligible to be distributed within a reasonable time following the close
of the Plan Year which is not later than the fifth Plan Year following the Plan Year in which the Participant terminated employment in a lump sum in the form of whole and partial shares of Company Stock, subject to Section 7.4 below; provided,
however, that a request for an immediate lump sum payment shall be subject to the consent of the ESOP Committee pursuant to its uniform, nondiscriminatory policy for processing distributions and loans from the ESOP Component.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(b) | In the case of a sale of all or substantially all of the assets used by the Company or an Affiliate in a trade or business or of the sale of the Companys or an
Affiliates interest in a subsidiary that causes a Participant to cease to be employed by the Company or an entity that constitutes an Affiliate, each affected Participant shall be given the right to elect no later than 30 days after the sale
to have the Participants vested interest (including any related outstanding loans) transferred to a plan (if any) of the Participants non-Affiliate successor or continuing employer (such a transfer, a Transfer), provided that the
Company provides for Transfers in connection with such sale and such plan accepts the Transfers, and that the Committee is satisfied (1) as to the tax-qualification of such transferee plan and the tax-exemption of its related trust, and (2) that the
Transfers will not adversely affect the tax-qualification of the Plan or the tax-exemption of the Fund.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|7.4 | Form of Distributions
|--- | ---------------------



Distributions from the Participants Non-ESOP Accounts shall be made in cash. Distributions from the Participants ESOP Accounts shall be made in shares of
Company Stock; provided, however, if the Companys charter or bylaws restrict ownership of substantially all of the outstanding Company Stock to employees and the Trust or if the Company has elected to be taxed as an S corporation,
the Participants ESOP Accounts will be distributed in cash, or if the



42



---

Plan Administrator elects, shares of Company stock subject to a requirement that they be sold to the Company immediately upon distribution.



|7.5 | Forfeitures
|--- | -----------



|(a) | Any unvested portion of a Participants Combined Account shall be forfeited upon the Participants Date of Severance. Amounts forfeited from the Combined Accounts of
Participants who are not fully vested on their Date of Severance shall be applied to reduce the next succeeding Company contribution under Article 3
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(b) | If a Participant who is less than 100% vested in his Combined Account ceases to be an Employee and, as a result, receives a distribution from the Plan in an amount that is less than
the present value of the Participants accrued benefit under the Plan, the portion of the Participants Combined Account that was forfeited pursuant paragraph 7.5(a) above shall be restored to the Participants ESOP Accounts or
Non-ESOP Accounts, as applicable, if the Participant is re-employed by the Company or a Related Company prior to incurring five consecutive Periods of Severance and repays to the Plan the full amount of such distribution prior to the occurrence of
the earlier of 5 years after the first date on which the Participant is subsequently re-employed; or the date the Participant incurs 5 consecutive one-year Periods of Severance. Such reinstatement shall be provided by an additional contribution by
the Company for the Plan Year in which such reinstatement occurs.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(c) | If a Participant incurs five consecutive one-year Periods of Severance, the vested portion of the Participants Combined Account attributable to service prior to such Periods
of Severance shall not be increased as a result of any service after such Periods of Severance.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|7.6 | Amount of Distribution
|--- | ----------------------



After a Participants Date of Severance has occurred, and pending complete distribution of the Participants Combined Account balances, the Participants
Combined Accounts will be held under the Plan and will be subject to adjustment under Article 6.



The amount of any distribution to be made based on the value of an entire Participants Combined Account, or a portion thereof, shall be determined with reference to the value of such Combined Account (or portion
thereof) as of the Valuation Date coinciding with or immediately preceding the date that authorized distribution directions are received by the Trustee from the Plan Administrator.



|7.7 | Participants Right to Consent to Distributions
|--- | -----------------------------------------------



Notwithstanding any other provision of this Section, if a Participants vested Combined Account balances exceeds $5,000 at any time at or after his Date of
Severance, no portion of his



43



---

Combined Accounts may be distributed to him without his written consent before he attains normal retirement age (determined in the same manner as the
determination of whether a Participant has Retired). Failure to provide such consent within 30 days following solicitation of such consent by the Plan Administrator shall defer the Participants right to receive a distribution until his
attainment of normal retirement age (or his death, if earlier).



If the value
of the Participants vested Combined Account balance is $5,000 or less at any time at or after his Date of Severance, the Participant will receive a distribution of the value of the entire vested portion of such Combined Account balance and the
nonvested portion will be treated as a forfeiture; provided, however, that this provision shall not be used to accelerate the final installment payment(s) of a series of installment payments. For this purpose, if the value of a Participants
vested Combined Account balance is zero, the Participant shall be deemed to have received a distribution of such vested Combined Account balance immediately upon his Date of Severance.



Effective as of January 1, 2002, this Section 7.7 shall be applied without regard to a Participants Rollover Account or ESOP Rollover
Account.



|7.8 | Time When Distributions Must Commence
|--- | -------------------------------------



|(a) | Unless a Participant elects otherwise, distribution shall commence not later than the 60th day following the close of the Plan Year in which the latest of the following occurs: (1)
the Participant attains normal retirement age (as described in Code Section 401(a)(14)); (2) the tenth anniversary of the date on which the Participant commenced participation under this Plan; or (3) the Participant terminates employment with the
Company and all Affiliates.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(b) | Notwithstanding any contrary provision of the Plan, distribution of the Combined Account balances of a Participant shall commence by April 1 of the calendar year
next following the later of: (i) the calendar year in which the Participant attains age 701⁄2 or (ii) the calendar year in which the Participants Date of Severance occurs (Required Commencement Date); provided, however, that the
Required Commencement Date of a Participant who is a five-percent owner (as defined in Code Section 416) of the Company or Related Company in the calendar year in which the Participant attains age 701⁄2 shall be April 1 of the calendar year next
following the calendar year which the Participant attains age 701⁄2. Distribution under the preceding sentence shall be made in annual installments in the minimum amounts required by regulations issued under Code Section 401(a)(9). If a
Participant dies before the Participants Required Commencement Date or after his Required Commencement Date but before receipt of his entire benefits, the Participants benefits shall be distributed in accordance with Code Section
401(a)(9) and the regulations thereunder. A Participant who is not a five percent owner and who attains age 70-1/2 while still employed by the Company or a Related Company may elect to receive a distribution commencing April 1 of the calendar year
next following the calendar year in which he attains age 70-1/2, in installments as described in regulations issued under Code Section 401(a)(9). Distributions under the Plan shall be determined and made in accordance with Section 401(a)(9) of the
Code and the regulations there
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



44



---

| | under. The provisions of Code Section 401(a)(9) and the regulations there under, as may be amended from time to time, are incorporated herein by reference
and shall override any inconsistent provision of the Plan.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|7.9 | Hardship
|--- | --------



|(a) | A Participant may apply in writing to the Plan Administrator for a distribution, due to financial hardship, of all or a part of the Participants Elective Account, excluding
earnings thereon, and all or a part of the Participants Rollover Account (a Hardship Distribution). A Hardship Distribution shall be made only if such distribution is necessary to alleviate an immediate and heavy financial need of
the Participant as determined in accordance with Section 7.9(b) below, and is necessary to satisfy such financial need as determined in accordance with Section 7.9(c) below. The determination by the Plan Administrator of the existence of an
immediate and heavy financial need and of the amount necessary to meet such need shall be made in a nondiscriminatory and uniform manner. The Plan Administrator shall not allow a Hardship Distribution to be made to a Participant unless the
requirements of this Section 7.9 are satisfied.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(b) | The determination by the Plan Administrator of whether a Participant has an immediate and heavy financial need is to be made on the basis of all the relevant facts and
circumstances, and must be for one of the reasons specified in subsections (1)(4) below (and may include any amounts necessary to pay any federal, state or local income taxes or penalties reasonably anticipated to result from the
distribution). A financial need shall not fail to qualify as immediate and heavy merely because such need was reasonably foreseeable or voluntarily incurred by the Participant. To receive a Hardship Distribution, a Participant must submit a
completed application form provided by the Plan Administrator, and any additional written documentation necessary to establish to the satisfaction of the Plan Administrator that such distribution is for:
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (1) | unreimbursed medical expenses described in Code Section 213(d) that are incurred by the Participant, the Participants spouse or dependents (as defined in Code Section 152), or
necessary for such persons to obtain medical care described in Code Section 213(d);
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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



| | (3) | payment of tuition and related educational fees for the next 12 months of post-secondary education for the Participant or for the Participants spouse or dependents (as defined
in Code Section 152); or
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (4) | payments necessary to prevent the eviction of the Participant from his or her principal residence or to prevent foreclosure on the mortgage of the Participants principal
residence.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



45



---

|(c) | A Hardship Distribution made pursuant to this Section 7.9 will be deemed to be necessary to satisfy an immediate and heavy financial need of a Participant only if:
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (1) | the distribution is not in excess of the amount of the Participants immediate and heavy financial need (including any amounts necessary to pay any federal, state or local
income taxes or penalties reasonably anticipated to result from such distribution); and
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (2) | the Participant has obtained all distributions (other than Hardship Distributions) and all nontaxable loans currently available under all plans maintained by the Company and any
Related Company.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(d) | Notwithstanding any provision of the Plan or any other plan maintained by the Company or a Related Company to the contrary, a Participant who receives a Hardship Distribution shall
not:
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (1) | make elective contributions to the Plan and all other plans maintained by the Company or a Related Company for the Participants taxable year immediately following the taxable
year of the Hardship Distribution in excess of the applicable limit under Code Section 402(g) for such next taxable year, less the amount of the Participants elective contributions for the taxable year of the Hardship Distribution; and
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (2) | be eligible to make any elective contributions or after-tax employee contributions to the Plan and all other plans maintained by the Company or a Related Company for a period of
twelve months (effective January 1, 2002, only six months) following the date of receipt of the Hardship Distribution, and shall enter into a legally enforceable, written agreement acknowledging same. For this purpose, the term all other
plans means all qualified and nonqualified plans of deferred compensation including, without limitation, stock option, stock purchase or similar plans and a cash or deferred arrangement that is part of a cafeteria plan (within the meaning of
Section 125 of the Code), but excluding the mandatory employee contribution portion of a defined benefit plan and a health and welfare benefit plan, including such a plan that is part of a Code Section 125 cafeteria plan.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(e) | A Participants Hardship Distribution shall come from the Non-ESOP Component first and then only to the extent necessary from the ESOP Component. To the extent made from the
Non-ESOP Component, a Hardship Distribution shall be taken from the Investment Funds in which the Participants Elective Account is invested on a pro rata basis. Hardship Distributions from the ESOP Component are subject to the approval of the
ESOP Committee, pursuant to its uniform, nondiscriminatory policy for processing distributions and loans from the ESOP Component.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



46



---

|7.10 | Inability to Locate Distributee
|---- | -------------------------------



|(a) | Notwithstanding any other provision of the Plan, in the event that the Company cannot locate any person to whom a payment or distribution is due under the Plan, and no other
distributee has become entitled thereto pursuant to any provision of the Plan, the Combined Account in respect of which such payment or distribution is to be made shall be forfeited at the close of the third Plan Year following the Plan Year in
which such payment or distribution first became due (but in all events prior to the time such Combined Account would otherwise escheat under any applicable State law); provided, that any Combined Account so forfeited shall be reinstated if such
person subsequently makes a valid claim for such benefit.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(b) | Such reinstatement shall be provided by an additional contribution for the Plan Year in which such reinstatement is made.
|--- | -------------------------------------------------------------------------------------------------------------------------



|(c) | Any amount forfeited under this Section 7.10 shall be applied to reduce the next succeeding Company contribution under Article 3.
|--- | ---------------------------------------------------------------------------------------------------------------------------------



|7.11 | Restrictions on In-Service Distributions
|---- | ----------------------------------------



Notwithstanding any other provision of this Plan, amounts held by the Trustee may not be distributable to Participants earlier than upon Retirement, death, Disability,
separation from service, or hardship.



|7.12 | Direct Rollovers
|---- | ----------------



|(a) | Notwithstanding any other provision of the Plan to the contrary that would otherwise limit a Distributees election under this Article 7, a Distributee may elect, at the time
and in the manner prescribed by the Plan Administrator, to have any portion of an Eligible Rollover Distribution paid directly to one or more Eligible Retirement Plans specified by the Distributee in a Direct Rollover.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(b) | The following terms shall have the following meanings when used in this Section 7.12:
|--- | -------------------------------------------------------------------------------------



| | (1) | Eligible Rollover Distribution. An Eligible Rollover Distribution is any distribution of all or any portion of the balance to the credit of the Distributee, except that
an Eligible Rollover Distribution does not include: any distribution that is one of a series of substantially equal periodic payments (not less frequently than annually) made for the life (or life expectancy) of the Distributee or the joint lives
(or life expectancies) of the Distributee and the Distributees designated Beneficiary, or for a specified period of ten years or more; any distribution to the extent such distribution is required under Section 401(a)(9) of the Code; Hardship
Withdrawals of Elective Contributions; and the portion of any distribution that is not includable in gross income (determined without regard to the exclusion for net unrealized appreciation with respect to employer securities).
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



47



---

| | (2) | Eligible Retirement Plan. An Eligible Retirement Plan is an individual retirement account described in Section 408(a) of the Code, an individual retirement annuity
described in Section 408(b) of the Code, or a qualified trust described in Section 401(a) of the Code, that accepts the Distributees Eligible Rollover Distribution. However, in the case of an Eligible Rollover Distribution to a surviving
spouse, an Eligible Retirement Plan is an individual retirement account or an individual retirement annuity.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (3) | Distributee. A Distributee includes an Employee or a former Employee. In addition, the Employees or former Employees surviving spouse and the Employees
or former Employees spouse who is the alternate payee under a qualified domestic relations order, as defined in Section 414(p) of the Code, are Distributees with regard to the interest of the spouse or former spouse.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (4) | Direct Rollover. A Direct Rollover is a payment by the Plan to the Eligible Retirement Plan specified by the Distributee.
| | --- | ---------------------------------------------------------------------------------------------------------------------------



|7.13 | Qualified Domestic Relations Orders
|---- | -----------------------------------



Distributions may not be made to an Alternate Payee from the ESOP Component before the earliest of the Participants (i) attainment of age fifty (50) or (ii)
termination of employment. If the Plan Administrator receives a domestic relations order that otherwise qualifies as a Qualified Domestic Relations Order under Section 414(p) of the Code, and such order provides for a distribution or series of
distributions from the Non-ESOP Component that may commence to an Alternate Payee before the Participant attains the earliest retirement age under the Plan, or for an immediate lump-sum distribution, the Plan Administrator shall recognize the
domestic relations order as a Qualified Domestic Relations Order and authorize payment of said distribution or distributions from the Non-ESOP Component.



ARTICLE 8: ADMINISTRATION OF THE PLAN



|8.1 | Appointment of ESOP Committee
|--- | -----------------------------



|(a) | There is hereby authorized an ESOP Committee, which shall consist of not less than three members. The Board of Directors of the Company shall appoint the members of the Committee.
Each member of the Committee may resign, or may be removed at any time by the Board of Directors of the Company (with or without cause), and, in the event of the removal, death or resignation of any member, his successor shall be appointed by the
Board of Directors of the Company. In the event that a vacancy or vacancies shall occur on the Committee, the remaining member or members shall act as the Committee until the Board of Directors of the Company fills such vacancy or vacancies. The
members of the Committee shall serve without compensation for their services as such members.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



48



---

|(b) | No person shall be ineligible to be a member of the Committee because he is, was or may become entitled to benefits under the Plan or because he is a director and/or officer of the
Company or any Related Company; provided, that no member of the Committee shall participate in any determination by the Committee relating specifically to his own benefits under the Plan.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(c) | The members of the Committee shall serve without bond except to the extent required by applicable law.
|--- | ------------------------------------------------------------------------------------------------------



|8.2 | Named Fiduciaries
|--- | -----------------



|(a) | Named Fiduciaries under the Plan shall be:
|--- | ------------------------------------------



| | (1) | the Plan Administrator, who shall have authority to control and manage the operation and administration of the Plan, except with respect to those matters that under the Plan or the
Trust Agreement are the responsibility, or subject to the authority, of the Committee or the Trustee, and
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (2) | the Committee, which shall be the named fiduciary with respect to the financial management of the Plan and the control or management of the assets of the Plan, except with respect
to those matters that under the Plan or the Trust Agreement are the responsibility, or subject to the authority, of the Plan Administrator or the Trustee. Consistent with ERISA, the Committee may further delegate these duties, including without
limitation, establishing separate subcommittees responsible for the financial management of the ESOP Component and the Non-ESOP Component.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (3) | Participants, with respect to the voting of Company Stock in their ESOP Accounts, as described in Section 15.1(a)(1), and with respect to the one-time election in Company Stock, as
described in Section 6.4.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(b) | Reserved.
|--- | ---------



|8.3 | Allocation of Fiduciary and Other Responsibilities
|--- | --------------------------------------------------



|(a) | Each Named Fiduciary (with the exception of Participants) shall have the right:
|--- | -------------------------------------------------------------------------------



| | (1) | to allocate responsibilities (fiduciary or otherwise) among it and the other Named Fiduciary,
| | --- | ---------------------------------------------------------------------------------------------



| | (2) | to designate individual members of the Committee to carry out responsibilities (fiduciary or otherwise) under the Plan, and
| | --- | ---------------------------------------------------------------------------------------------------------------------------



| | (3) | to designate persons other than such Named Fiduciaries to carry out responsibilities (fiduciary or otherwise) under the Plan.
| | --- | -----------------------------------------------------------------------------------------------------------------------------



49



---

|(b) | Reserved.
|--- | ---------



|8.4 | Quorum and Voting; Procedures
|--- | -----------------------------



|(a) | A majority of the members of the Committee at the time in office shall constitute a quorum for the transaction of business. The Board of Directors of the Company shall select from
among the Committee members a Chairman, and shall appoint (from its members or otherwise) a Secretary.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(b) | The Committee may act by vote or written consent of the majority of its members then in office and may establish its own procedures. The Committee may authorize any one or more of
its members or the Secretary or any designee of the Committee to sign and deliver any instrument, certificate or other paper or document on its behalf.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|8.5 | Service in Multiple Capacities
|--- | ------------------------------



Any person or group of persons may serve in more than one fiduciary capacity with respect to the Plan.



|8.6 | Powers and Authority
|--- | --------------------



Each Named Fiduciary shall have all powers necessary or helpful for the carrying out of its responsibilities, and the decisions or actions of such Named Fiduciary in good faith in respect of any matter hereunder shall
be conclusive and binding upon all parties concerned.



|8.7 | Powers of Plan Administrator
|--- | ----------------------------



|(a) | Without limiting the generality of the foregoing, the Plan Administrator shall have the power:
|--- | ----------------------------------------------------------------------------------------------



| | (1) | to make rules and regulations for the administration of the Plan that are not inconsistent with the terms and provisions of the Plan;
| | --- | -------------------------------------------------------------------------------------------------------------------------------------



| | (2) | to construe all terms, provisions, conditions and limitations of the Plan;
| | --- | --------------------------------------------------------------------------



| | (3) | to determine all questions arising out of or in connection with the provisions of the Plan or its administration in any and all cases in which he deems such a determination
advisable; and
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (4) | to establish a claims procedure in accordance with applicable law, which shall afford a reasonable opportunity to any Participant whose claim for benefits has been denied for a full
and fair review of the decision denying such claim.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



50



---

|(b) | In all instances, the Plan Administrator shall have complete discretionary authority to find facts, determine eligibility for participation and benefits under the Plan, and to
construe and interpret all provisions of the Plan and all documents relating thereto including, without limitation, all disputed and uncertain terms. All deference permitted by law shall be given to such findings, constructions, interpretations and
determinations.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|8.8 | Powers of Committee
|--- | -------------------



|(a) | Without limiting the generality of the foregoing, the Committee shall have the power:
|--- | -------------------------------------------------------------------------------------



| | (1) | to establish and carry out, or cause to be established and carried out by those persons (including without limitation, any investment manager or trustee) to whom responsibility or
authority therefore has been allocated or delegated in accordance with this Plan or the Trust Agreement, funding and investment policies and methods consistent with the objectives of the Plan and the requirements of ERISA. For such purposes, such
Committee shall, at a meeting duly called for the purpose, establish funding and investment policies and methods that satisfy the requirements of ERISA, and shall meet at least annually to review such policies and methods. All actions taken with
respect to such policies and methods and the reasons therefore shall be recorded in the minutes of the meetings of such Committee;
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (2) | to appoint a trustee or trustees to hold the assets of the Plan, and who, upon acceptance of being appointed, shall have authority and discretion to manage and control the assets of
the Plan, except to the extent that the authority to manage, acquire or dispose of assets of the Plan is delegated to one or more investment managers pursuant to paragraph (3) below; and
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (3) | to appoint an investment manager or managers, as defined in Section 3(38) of ERISA, to manage (including the power to acquire, invest and dispose of) any assets of the Plan.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(b) | Reserved.
|--- | ---------



|8.9 | Advisors
|--- | --------



Each Named Fiduciary (with the exception of the Participants), and any fiduciary designated by them pursuant to Section 8.3 above to whom such power is granted, may employ one or more persons to render advice with
regard to any responsibility such fiduciary has under the Plan.



51



---

|8.10 | Powers Not Exclusive
|---- | --------------------



The foregoing list of powers is not intended to be either complete or exclusive, and each Named Fiduciary shall, in addition, have such powers as it may determine to be necessary for the performance of its duties
under the Plan and the Trust Agreement.



8.11 Limitation of Liability;
Indemnity



Except to the extent otherwise provided by law, if any duty or
responsibility of a Named Fiduciary has been allocated or delegated to any other person in accordance with any provision of this Plan or of the Trust Agreement, then such Named Fiduciary shall not be liable for any act or omission of such person in
carrying out such duty or responsibility. The Company shall indemnify and save each person who is a member of the Committee and each employee or director of the Company or a Related Company, harmless against any and all loss, liability, claim,
damage, cost and expense that may arise by reason of, or be based upon, any matter connected with or related to the Plan or the administration of the Plan (including, but not limited to, any and all expenses whatsoever reasonably incurred in
investigating, preparing or defending against any litigation, commenced or threatened, or in settlement of any such claim whatsoever) to the fullest extent permitted under applicable law, except when same is judicially determined to be due to the
gross negligence or willful misconduct of such person.



ARTICLE 9: AMENDMENT OF THE PLAN



|9.1 | Amendment
|--- | ---------



|(a) | Subject to the provisions hereinafter set forth, the Company reserves the right at any time and from time to time to modify or amend in whole or in part any or all of the provisions
of the Plan, provided however, that:
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (1) | no modification or amendment may be made which by reason thereof will deprive any Participant or Former Participant or Beneficiary without his consent of any amounts theretofore
credited to his Combined Account under the Plan; and
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (2) | no such modification or amendment shall make it possible for any part of any funds contributed under the Plan to be used for, or diverted to, purposes other than for the exclusive
benefit of Participants or Former Participants or Beneficiaries under the Plan, subject to subsection (b) below, or as otherwise may be required or permitted under applicable law.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(b) | Notwithstanding subsection (a) above, any modification or amendment of the Plan may be made, retroactively if necessary, that the Company deems necessary or appropriate to bring the
Plan or Trust into conformity with governmental regulations that must be complied with in order to qualify the Plan, the Trust and contributions for tax exemption or deduction, or other applicable requirements of statute or governmental regulations.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



52



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ARTICLE 10: TERMINATION OF THE PLAN; MERGER



|10.1 | Termination
|---- | -----------



|(a) | The Company assumes no obligation to continue this Plan and specifically reserves the right at any time and for any reason deemed sufficient by it to discontinue this Plan and
contributions under it.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(b) | Upon complete or partial termination of, or complete discontinuance of contributions under the Plan, the rights of all affected Participants to the amounts credited to their
Accounts shall be nonforfeitable, except to the extent required to preclude discrimination between Participants and classes of Participants. In the case of a sale of all or a significant portion of the assets used by the Company or an Affiliate in a
trade or business or of the sale of all or a significant portion of the Companys or an Affiliates interest in a subsidiary, the Company, in its sole discretion, may elect to treat any similarly situated employees of such trade or
business or such subsidiary as fully vested hereunder.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(c) | In the event of such termination, subject to the limitations set forth in Article 9, the Trustee(s) shall dispose of any and all funds held under the Plan by any Trustee in
accordance with the written order of the Committee. The Committee shall determine the amounts that are payable under the Plan to Participants or Former Participants or for administrative expenses of the Plan, and shall direct the Trustee to pay over
any and all funds either directly to the persons certified by it to be entitled to receive such amounts, to an insurance company or companies for the purchase of annuity contracts or to the Company for distribution, or to hold such amounts for
distribution at the time and in the manner provided for in Article 7.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|10.2 | Plan Merger
|---- | -----------



In the case of any merger or consolidation with, or transfer of assets or liabilities to, any other plan, each Participant in this Plan shall be entitled to a benefit immediately after the merger, consolidation, or
transfer (if the Plan then terminated) that is equal to or greater than the benefit he would have been entitled to receive immediately before the merger, consolidation, or transfer (if the Plan had then been terminated).



ARTICLE 11: LIMITATION OF RIGHTS OF PARTICIPANTS, FORMER PARTICIPANT &
BENEFICIARIES



|11.1 | No Employment Rights
|---- | --------------------



Nothing contained in the Plan shall be deemed to give any Participant the right to be retained in the service of the Company.



53



---

|11.2 | Spendthrift Clause
|---- | ------------------



|(a) | Except as otherwise required or permitted by law, no interest, right or claim in or to any part of the Fund or any payment there from shall be assignable, transferable or subject to
sale, mortgage, pledge, hypothecation, commutation, anticipation, garnishment, attachment, execution or levy of any kind, and the Company shall not recognize any attempt to assign, transfer, sell, mortgage, pledge, hypothecate, commute or anticipate
the same.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(b) | Section 11.2(a) above shall apply to the creation, assignment or recognition of a right to any benefit payable pursuant to a domestic relations order, unless such order is
determined by the Plan Administrator to be a qualified domestic relations order as defined in Section 414(p) of the Code.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(c) | Section 11.2(a) above shall not apply to the offset of a Participants benefit under the Plan of an amount the Participant is required to pay to the Plan pursuant to a criminal
conviction, civil judgment or settlement agreement described in Section 401(a)(13)(C) of the Code.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|11.3 | Incompetents
|---- | ------------



If a Participant, Former Participant or Beneficiary to whom distributions shall be due under the Plan shall be or become incompetent, either physically or mentally, in the judgment of the Plan Administrator, the Plan
Administrator shall have the right to determine to whom such distributions shall be made for the benefit of such Participant, Former Participant or Beneficiary.



|11.4 | Minors
|---- | ------



If at any time a person entitled to receive any payment hereunder is a minor, such payment may be made for the benefit of such minor to his parent, guardian, or the person with whom he resides, or to the minor
himself, and the release of any such parent, guardian, person or minor shall be valid and complete discharge for such payment.



|11.5 | Doubt as to Identity
|---- | --------------------



In case at any time any doubt exists as to the identity of any person entitled to any payment hereunder or the amount or time of such payment, the Plan Administrator shall be entitled to direct the Trustee to hold
such sum in trust until such identity or amount or time is determined or until order of a court of competent jurisdiction, or to pay such sum into court in accordance with appropriate rules of law in such case then provided.



54



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|11.6 | Discharge of Liability
|---- | ----------------------



If the Plan Administrator or his delegate reasonably believes (taking into account any document purporting to be a valid consent of the Participants spouse, or any
representation by the Participant that he is not married or any designation of beneficiary) that a distribution in respect of a Participants Combined Account is made to a person who properly qualifies as the Participants Beneficiary, the
Plan shall have no further liability with respect to such Combined Account to the extent of the distribution.



ARTICLE 12: TOP-HEAVY PROVISIONS



|12.1 | Application of Article 12
|---- | -------------------------



The following provisions of this Article 12 shall apply automatically in any Plan Year in which the Plan is determined to be Top Heavy, and shall override any
inconsistent provisions herein. The determination of whether the Plan is a Top Heavy Plan in any Plan Year, and the application of these provisions, shall be interpreted in accordance with the definitions set forth in Section 12.6 and Section 416 of
the Code and the regulations there under.



|12.2 | Top-Heavy Determination
|---- | -----------------------



|(a) | For purposes of this Article 12, the Plan is a Top-Heavy Plan with respect to a Plan Year if, as of the Determination Date for the Plan Year, (1) the Plan has a Top-Heavy Ratio
greater than 60% and is not a member of a Required Aggregation Group, or (2) the Plan is a member of a Required Aggregation Group that has a Top-Heavy Ratio greater than 60%.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(b) | Notwithstanding Subsection (a) above, if the Plan is a member of a Permissive Aggregation Group with a Top-Heavy Ratio less than or equal to 60%, it shall not be considered to be a
Top-Heavy Plan.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(c) | Effective for Limitation Years commencing after December 31, 1999, the provisions of Code Section 416(h) (as defined prior to enactment of PL 104-188) are no longer applicable to
this Plan.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|12.3 | Reserved
|---- | --------



|12.4 | Minimum Contributions
|---- | ---------------------



|(a) | If the Plan is determined to be a Top-Heavy Plan for a Plan Year, minimum employer contributions (including forfeitures) shall be made, on behalf of each Participant who has not
separated from service as of the end of the Plan Year and who is not a Key Employee, of not less than the lesser of the following percentage of annual Compensation for that Plan Year:
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (1) | 3%, or
| | --- | ------



55



---

| | (2) | the highest percentage at which employer contributions (including forfeitures and amounts contributed pursuant to a salary reduction agreement) are made under the Plan for the Plan
Year on behalf of a Key Employee.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Effective
January 1, 2002, Matching Contributions may be counted toward any minimum contribution requirement under this Section 12.4



|(b) | A Top-Heavy Plan shall not be treated as meeting the requirements of this Section 12.4 unless the Plan meets such requirements without taking into account any Social Security
contributions or benefits.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(c) | Notwithstanding subsections (a) and (b) above, this Section 12.4 shall not apply to any Participant to the extent that such Participant is covered under any other qualified plan of
the Company or a Related Company and such other plan provides the minimum allocation or benefit requirement applicable to Top-Heavy plans.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|12.5 | Reserved
|---- | --------



|12.6 | Definitions
|---- | -----------



|(a) | For purposes of this Article 12, the following terms shall have the following meanings:
|--- | ---------------------------------------------------------------------------------------



| | (1) | Determination Date means, with respect to a Plan Year, the last day of the preceding Plan Year or, in the case of the first Plan Year, the last day of the Plan Year.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (2) | Key Employee means any individual considered as such under Section 416(i)(1) of the Code.
| | --- | -------------------------------------------------------------------------------------------



| | (3) | Permissive Aggregation Group means each plan in the Required Aggregation Group and any other qualified plan or plans maintained by the Company or a Related Company if
such group of plans, when considered together, would meet the requirements of Sections 401(a)(4) and 410 of the Code. A terminated plan of the Company is treated like any other plan of the Company for this purpose if it was maintained within the
last five years ending on the Determination Date for the Plan Year in question and would, but for the fact that it terminated, be part of a Required Aggregation Group for such Plan Year.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (4) | Required Aggregation Group means, with respect to a Plan Year for which a determination is being made, (1) this Plan, (2) each other qualified plan of
the Company and any Related Company in which at least one Key Employee is a participant and (3) any other qualified plan of the Company or any Related Company that enables any plan described in items (1) and (2) above to meet the
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



56



---

| | requirements of Section 401(a)(4) or 410 of the Code. A terminated plan of the Company is treated like any other plan of the Company for this purpose if it
was maintained within the last five years ending on the Determination Date for the Plan Year in question and would, but for the fact that it terminated, be part of a Required Aggregation Group for such Plan Year.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (5) | Top-Heavy Ratio means, with respect to the plans taken into consideration, a fraction, the numerator of which is the sum of the Key Employees account balances
under the applicable defined contribution plans and the present value of the Key Employees accrued benefits under the applicable defined benefit plans, and the denominator of which is the sum of all participants account balances under
the applicable defined contribution plans and the present value of all participants benefits under the applicable defined benefit plans; provided, however, that if any individual has not received any compensation from the Employer maintaining
an applicable plan (other than benefits under the plans) at any time during the 5-year period ending on the Determination Date (effective January 1, 2002, this 5-year lookback shall not apply), any accrued benefit of such individual (and the account
of such individual) shall not be taken into account. Both the numerator and the denominator of this fraction are adjusted so as to include distributions made in the plan year containing the Determination Date or in the four preceding plan years
(effective January 1, 2002, only in-service distributions in preceding years need be included) and in the case of defined contribution plans, any contributions due but unpaid as of the Determination Date. The preceding sentence shall also apply to
distributions under a terminated plan that if it had not been terminated would have been included in the Required Aggregation Group. The value of account balances and the present value of accrued benefits will be determined as of the most recent
valuation date that falls within or ends with the 12-month period ending on the Determination date. The account balances and accrued benefits of an individual who is not a Key Employee but who was a Key Employee in a prior year will be disregarded.
When more than one plan is being considered, the value of account balances and accrued benefits will be calculated with reference to the Determination Dates that fall within the same calendar year. Present values shall be based on reasonable
actuarial assumptions as to interest and mortality. Solely for the purpose of determining if the Plan, or any other plan included in an aggregation group of which this Plan is a part, is top-heavy, the accrued benefit of a Participant other than a
Key Employee shall be determined under (1) the method, if any, that uniformly applies for accrual purposes under all plans maintained by the Company or a Related Company or (2) if there is no such method, as if such benefit accrued not more rapidly
than the slowest accrual rate permitted under the fractional accrual rate of Section 411(b)(1)(C) of the Code. In all instances, the calculation of the Top-Heavy Ratio, and the extent to which distributions, rollovers, and transfers are taken into
account, will be made in accordance with Section 416 of the Code and the regulations there under, as may be amended.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(b) | Reserved.
|--- | ---------



57



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ARTICLE 13: LIMITATION ON MAXIMUM CONTRIBUTIONS AND BENEFITS

UNDER ALL PLANS



Effective for Limitation Years commencing after December 31, 1999, the provisions of Code Section 415(e) (as defined prior to enactment of PL 104-188) are no longer
applicable to this Plan.



ARTICLE 14: RIGHTS, RESTRICTIONS,
AND OPTIONS ON COMPANY STOCK



|14.1 | Right of First Refusal
|---- | ----------------------



Subject to the provisions of the last sentence of this Section, shares of Company Stock distributed to Participants shall be subject to a Right of First
Refusal. The Right of First Refusal shall provide that, prior to any subsequent transfer, the Participant (or the Participants Beneficiary) must first make a written offer of such Company Stock to the Trust and to the Company at the then
fair market value of such Company Stock, as determined by an Independent Appraiser. The Trust shall have the first priority to exercise the right to purchase the Company Stock, and then the Company shall have second priority to exercise the right. A
bona fide written offer from an independent prospective buyer shall be deemed to be the fair market value of such Company Stock for this purpose, unless the value per share, as determined by the Independent Appraiser as of the Valuation Date at the
end of the immediately preceding Plan Year, is greater. The Company and the Trust shall have a total of 14 days (from the date the offer is first received by the Company or the Trust) to exercise the Right of First Refusal on the same terms offered
by the prospective buyer. A Participant (or the Participants Beneficiary) entitled to a distribution of Company Stock may be required to execute an appropriate stock transfer agreement (evidencing the Right of First Refusal) prior to receiving
a certificate for Company Stock. No Right of First Refusal shall be exercisable by reason of any of the following transfers:



|(a) | The transfer upon disposition of any such shares by any legal representative, heir or legatee, but the shares shall remain subject to the Right of First Refusal; or
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(b) | The transfer while Company Stock is listed on a national securities exchange registered under Section 6 of the Securities Exchange Act of 1934 or quoted on a system sponsored by a
national securities association registered under Section 15A(b) of the Securities Exchange Act of 1934.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|14.2 | Put Option
|---- | ----------



The Company shall issue a Put Option to each Participant (or each Participants Beneficiary) who receives a distribution of Company Stock if, at the time of such distribution, Company Stock is not
then readily tradable on an established market, as defined in Section 409(h) of the Code and the regulations thereunder. The Put Option shall permit the Participant (or the Participants Beneficiary) to sell such Company Stock at its then fair
market value, as



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determined by an Independent Appraiser in accordance with the provisions of Section 6.9, to the Company after the date the Company Stock is distributed to
the Participant (or the Participants Beneficiary). If the Companys charter or by-laws restrict ownership of substantially all of the outstanding Company Stock to employees and the Trust or the Company has elected to be taxed as an
S corporation under Code Section 1361, then shares of Company Stock distributed to or for the benefit of a Participant (or his Beneficiary) must be immediately sold to the Company in accordance with Section 7.4.



|14.3 | Share Legend; Other Restrictions
|---- | --------------------------------



Shares of Company Stock held or distributed by the Trustee may include such legend restrictions on transferability as the Company may reasonably require in order to
assure compliance with applicable Federal and state securities laws and the provisions of this Article 14.



Except as otherwise provided in this Section, no shares of Company Stock held or distributed by the Trustee may be subject to a put, call or other option, or buy-sell or similar arrangement.



|14.4 | Nonterminable Rights
|---- | --------------------



The provisions of this Article 14 are nonterminable, and shall continue to be applicable to shares of Company Stock even if the Plan ceases to be an employee stock ownership plan within the meaning of Section
4975(e)(7) of the Code.



ARTICLE 15: VOTING AND TENDERING OF
STOCK



|15.1 | Voting of Company Stock
|---- | -----------------------



|(a) | The voting of Company Stock held in the Trust shall be subject to the provisions of ERISA and the following provisions, to the extent such provisions are not inconsistent with
ERISA:
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (1) | With respect to any corporate matter that involves the voting of Company Stock with respect to the approval or disapproval of any corporate merger or consolidation,
recapitalization, reclassification, liquidation, dissolution, sale of substantially all of the assets of a trade or business, or such other transactions that may be prescribed by regulation (and, if the Company has a registration-type class of
securities, all other shareholder voting issues), each Participant may be entitled to direct the Trustee as to the exercise of any shareholder voting rights attributable to shares of Company Stock then allocated to his ESOP Accounts, but only to the
extent required by Sections 401(a)(22) and 409(e)(3) of the Code and the regulations there under. For purposes of the foregoing sentence, each Participant shall be a Named Fiduciary of the Plan as described in Section 402(a)(2) of ERISA. The
Committee shall have the sole responsibility for determining when a
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



59



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| | corporate matter has arisen that involves the voting of Company Stock under this provision. If a Participant is entitled to so direct the Trustee, all
allocated Company Stock as to which such instructions have been received (which may include an instruction to abstain) shall be voted by the Trustee in accordance with such instructions, provided that the Trustee may vote the shares as it determines
is necessary to fulfill his fiduciary duties under ERISA. The Trustee shall vote any shares as to which no voting instructions have been received at the direction of the Committee, subject to his fiduciary duties under ERISA.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (2) | In all other circumstances, the Trustee shall vote all shares of Company Stock as directed by the Committee.
| | --- | ------------------------------------------------------------------------------------------------------------



|15.2 | Tendering of Company Stock
|---- | --------------------------



|(a) | The tendering of Company Stock held in the Trust shall be subject to the provisions of ERISA and the following provisions, to the extent such provisions are not inconsistent with
ERISA:
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (1) | In the event of a tender offer or other offer to purchase shares of Company Stock held by the Trust, the Trustee shall tender or sell the shares as directed by each Participant (or,
if applicable, designated beneficiary or alternate payee) with respect to shares of Company Stock then allocated to his ESOP Accounts, subject to the fiduciary duties under ERISA. In all other circumstances, the Trustee shall tender or exchange
shares of Company Stock as directed by the ESOP Committee. In carrying out its responsibilities under this Section, the Trustee may rely on information furnished to it by the Plan Administrator, including the names and current addresses of
Participants, the number of shares of Company Stock allocated to their ESOP Accounts, and the number of shares of Company Stock held by the Trustee (if any) that have not yet been allocated.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



ARTICLE 16: MISCELLANEOUS



|16.1 | Severability
|---- | ------------



If any provision of the Plan is held invalid or unenforceable, its validity or unenforceability shall not affect any other provisions of the Plan and the Plan shall be construed and enforced as if such provisions had
not been included therein.



|16.2 | Captions
|---- | --------



The captions contained herein and the table of contents, if any, prefixed hereto are inserted only as a matter of convenience and for reference and in no way define, limit, enlarge or describe the



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scope or interest of the Plan nor in any way shall affect the Plan or the construction of any provision thereof.



|16.3 | Construction
|---- | ------------



The Plan shall be construed and enforced in accordance with the laws of the State of Wisconsin (without regard to its conflict of laws provisions), except to the extent that such laws are preempted by Federal law.



*    *    *    *    *



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EXHIBIT A



APPLETON PAPERS RETIREMENT SAVINGS AND

EMPLOYEE STOCK OWNERSHIP PLAN



(As Amended Through July 31, 2002)



EGTRRA PROVISIONS



1.Adoption and effective date
of Exhibit A. This Exhibit A to the Plan is adopted to reflect certain provisions of the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA). This Exhibit is intended as good faith compliance with the requirements of
EGTRRA and is to be construed in accordance with EGTRRA and guidelines issued thereunder. Except as otherwise provided, this Exhibit shall be effective as of the first day of the first plan year beginning after December 31, 2001.



2.Supersession of inconsistent provisions. This Exhibit shall supersede the
provisions of the Plan to the extent those provisions are inconsistent with the provisions of this Exhibit.



SECTION 1. INCREASE IN COMPENSATION LIMIT



The annual Covered Compensation of each Participant taken into account in determining allocations for any Plan Year beginning after December 31, 2001, shall not exceed $200,000, as adjusted for cost-of-living increases in accordance with
Section 401(a)(17)(B) of the Code. Annual Covered Compensation means compensation during the Plan Year or such other consecutive 12-month period over which compensation is otherwise determined under the Plan (the determination period). The
cost-of-living adjustment in effect for a calendar year applies to annual compensation for the determination period that begins with or within such calendar year.



SECTION 2. DIRECT ROLLOVERS OF PLAN DISTRIBUTIONS



1.Effective date. This Section shall apply to distributions made after December 31, 2001.



2.Modification of definition of eligible retirement plan. For purposes of the direct
rollover provisions in Section 7.12(b)(2) of the Plan, an eligible retirement plan shall also mean an annuity contract described in Section 403(b) of the Code and an eligible plan under Section 457(b) of the Code which is maintained by a state,
political subdivision of a state, or any agency or instrumentality of a state or political subdivision of a state and which agrees to separately account for amounts transferred into such plan from this Plan. The definition of eligible retirement
plan shall also apply in the case of a distribution to a surviving spouse, or to a spouse or former spouse who is the alternate payee under a qualified domestic relation order, as defined in Section 414(p) of the Code.



3.Modification of definition of eligible rollover distribution to exclude hardship
distributions. For purposes of the direct rollover provisions in section 7.12 of the Plan, any amount that is distributed on account of hardship shall not be an eligible rollover distribution and the distributee



Exhibit A

Page 1 of 3



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may not elect to have any portion of such a distribution paid directly to an eligible retirement plan.



SECTION 3. ROLLOVERS FROM OTHER PLANS



The Committee may, under uniform rules applied on a consistent and non-discriminatory basis,
permit the Trustee to accept Participant rollover contributions and/or direct rollovers of distributions made after December 31, 2001, from the types of plans specified below:



The Plan will accept a direct rollover of an eligible rollover distribution from:



a. a qualified plan described in Section 401(a) or 403(a) of the Code, excluding after-tax
employee contributions.



b. an annuity contract described in Section 403(b) of
the Code, excluding after-tax employee contributions;



c. an eligible plan
under Section 457(b) of the Code 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.



The Plan will accept a participant contribution of an eligible rollover distribution from:



a. a qualified plan described in Section 401(a) or 403(a) of the Code, excluding after-tax
employee contributions.



b. an annuity contract described in Section 403(b) of
the Code, excluding after-tax employee contributions.



c. an eligible plan
under Section 457(b) of the Code 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 rollover contribution of the portion of a distribution from an individual retirement account or annuity described in Section 408(a) or
408(b) of the Code that is eligible to be rolled over and would otherwise be includible in gross income.



This Section 3 shall be effective as of January 1, 2002.



SECTION 4. CATCH-UP CONTRIBUTIONS



All
employees who are eligible to make Elective Contributions under this Plan and who have attained age 50 before the close of the Plan Year shall be eligible to make catch-up contributions in accordance with, and subject to the limitations of, Section
414(v) of the Code. Such catch-up contributions shall not be taken into account for purposes of the provisions of the Plan



Exhibit A

Page 2 of 3



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implementing the required limitations of Sections 402(g) and 415 of the Code. The Plan shall not be treated as failing to satisfy the provisions of the plan
implementing the requirements of Sections 401(k)(3), 401(k)(11), 401(k)(12), 410(b), or 416 of the Code, as applicable, by reason of the making of such catch-up contributions.



This Section 4 shall be effective as of January 1, 2002.



SECTION 5. SUSPENSION PERIOD FOLLOWING HARDSHIP DISTRIBUTION



A Participant who receives a Hardship Distribution in calendar year 2001, shall be prohibited from making Elective Contributions and
employee contributions under this and all other plans of the Company for 6 months after receipt of the distribution or until January 1, 2002, if later.



SECTION 6. DISTRIBUTION UPON SEVERANCE FROM EMPLOYMENT



A Participants Elective Contributions, qualified nonelective contributions, qualified matching contributions, and earnings attributable to these contributions shall
be distributed on account of the Participants severance from employment. However, such a distribution shall be subject to the other provisions of the Plan regarding distributions, other than provisions that require a separation from service
before such amounts may be distributed. This Section 6 shall apply for distributions regardless of when the severance from employment occurred.



* * * * *



Exhibit A

Page 3 of 3