ex4_1.htm


  
    Exhibit 4.1

     

    
      


       

       

      
 

       

      THE
TALBOTS, INC.

       

      RETIREMENT
SAVINGS VOLUNTARY PLAN

      
 

       

      AS
AMENDED AND RESTATED

       

      EFFECTIVE
AS OF JANUARY 1, 1997

       

       

       

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      TABLE OF
CONTENTS

      


       

      
        
          
             

            
              
                
                  
                    
                      	 
      	
                              Page

                            
	 
      	 
      
	
                              ARTICLE I.
      DEFINITIONS 

                            	
                               
      2

                            
	 
      	 
      	
                               
      

                            
	 
      	
                              1.01   Accrued
      Benefit 

                            	
                               
      2

                            
	 
      	
                              1.02   Actual
      401(m) Contribution Percentage 

                            	
                               
      2

                            
	 
      	
                              1.03   Actual
      Pre-tax Contribution Percentage 

                            	
                               
      3

                            
	 
      	
                              1.04   Adjustment
      Factor 

                            	
                               
      3

                            
	 
      	
                              1.05   Anniversary
      Year 

                            	
                               
      3

                            
	 
      	
                              1.06   Annual
      Addition 

                            	
                               
      3

                            
	 
      	
                              1.07   Average
      Actual 401(m) Contribution Percentage 

                            	
                               
      3

                            
	 
      	
                              1.08   Average
      Actual Pre-tax Contribution Percentage 

                            	
                               
      4

                            
	 
      	
                              1.09   Beneficiary 

                            	
                              4

                            
	 
      	
                              1.10   Benefit
      Commencement Date 

                            	
                              4

                            
	 
      	
                              1.11   Black
      Out Period 

                            	
                              4

                            
	 
      	
                              1.12   Board  

                            	
                              4

                            
	 
      	
                              1.13   Code  

                            	
                              4

                            
	 
      	
                              1.14   Company  

                            	
                              4

                            
	 
      	
                              1.15   Company
      Stock  

                            	
                              4

                            
	 
      	
                              1.16   Company
      Stock Fund  

                            	
                              
                                4

                              

                            
	 
      	
                              1.17   Company
      Suspense Account  

                            	
                              
                                5

                              

                            
	 
      	
                              1.18   Compensation  

                            	
                              
                                5

                              

                            
	 
      	
                              1.19   Direct
      Rollover  

                            	
                              6

                            
	 
      	
                              1.20   Disability  

                            	
                              6

                            
	 
      	
                              1.21   Distributee  

                            	
                              6

                            
	 
      	
                              1.22   Effective
      Date  

                            	
                              6

                            
	 
      	
                              1.23   Eligible
      Retirement Plan  

                            	
                              6

                            
	 
      	
                              1.24   Eligible
      Rollover Distribution  

                            	
                              7

                            
	 
      	
                              1.25   Employee  

                            	
                              7

                            
	 
      	
                              1.26   Employee
      Contribution Accounts  

                            	
                              7

                            
	 
      	
                              1.27   Employer
      Contribution Accounts  

                            	
                              8

                            
	 
      	
                              1.28   Employing
      Company  

                            	
                              8

                            
	 
      	
                              1.29   Employment
      Commencement Date  

                            	
                              9

                            
	 
      	
                              1.30   Entry
      Date  

                            	
                              9

                            
	 
      	
                              1.31   ERISA  

                            	
                              9

                            
	 
      	
                              1.32   Excess
      Aggregate 401(m) Contributions      

                            	
                               
      9

                            
	 
      	
                              1.33   Excess
      Aggregate Pre-tax Contributions  

                            	
                               
      10

                            
	 
      	
                              1.34   Excess
      Individual Pre-tax Contributions  

                            	
                               
      10

                            
	 
      	
                              1.35   Fixed
      Income Fund  

                            	
                               
      10

                            
	 
      	
                              1.36   Flat
      Contributions  

                            	
                               
      10

                            
	 
      	
                              1.37   Highly
      Compensated Employee  

                            	
                               
      10

                            
	 
      	
                              1.38   Hour of
      Service  

                            	
                               
      11

                            
	 
      	
                              1.39   Investment
      Funds  

                            	
                               
      13

                            
	 
      	
                              1.40   Leased
      Employee  

                            	
                               
      13

                            


                    

                  

                

              

            

          

        

        


        
          
            
            

          

          
            i

            
              

            

          

          
            
            

          

        

      

       

      
        
          
            	 
      	
                    1.41   Limitation
      Year  

                  	
                     
      14

                  
	 
      	
                    1.42   Matching
      Contributions  

                  	
                    14

                  
	 
      	
                    1.43   Month
      of Service  

                  	
                    14

                  
	 
      	
                    1.44   Non-highly
      Compensated Employee  

                  	
                    14

                  
	 
      	
                    1.45   Normal
      Retirement Date  

                  	
                    14

                  
	 
      	
                    1.46   One-Year
      Break in Service  

                  	
                     
      14

                  
	 
      	
                    1.47   Participant  

                  	
                    15

                  
	 
      	
                    1.48   Pension
      Plan  

                  	
                    15

                  
	 
      	
                    1.49   Plan  

                  	
                    15

                  
	 
      	
                    1.50   Plan
      Administrator  

                  	
                    15

                  
	 
      	
                    1.51   Plan
      Year  

                  	
                    15

                  
	 
      	
                    1.52   Postponed
      Retirement Date  

                  	
                    15

                  
	 
      	
                    1.53   Pre-tax
      Contributions  

                  	
                    15

                  
	 
      	
                    1.54   Pre-tax
      Contribution Account  

                  	
                    16

                  
	 
      	
                    1.55   Qualified
      Matching Contributions  

                  	
                    16

                  
	 
      	
                    1.56   Qualified
      Non-Elective Contributions  

                  	
                    16

                  
	 
      	
                    1.57   Reemployment
      Commencement Date  

                  	
                    16

                  
	 
      	
                    1.58   Restatement
      Date  

                  	
                    16

                  
	 
      	
                    1.59   Rollover
      Contributions  

                  	
                    16

                  
	 
      	
                    1.60   Secretary  

                  	
                    17

                  
	 
      	
                    1.61   Section
      415 Compensation  

                  	
                    17

                  
	 
      	
                    1.62   Service  

                  	
                    18

                  
	 
      	
                    1.63   Spouse  

                  	
                    18

                  
	 
      	
                    1.64   Trust
      or Trust Fund  

                  	
                    19

                  
	 
      	
                    1.65   Trustee  

                  	
                    19

                  
	 
      	
                    1.66   Trust
      Agreement  

                  	
                    19

                  
	 
      	
                    1.67   Valuation
      Date  

                  	
                    19

                  
	 
      	
                    1.68   Vested
      Benefit  

                  	
                    19

                  
	 
      	
                    1.69   Vesting
      Percentage  

                  	
                    19

                  
	 
      	
                    1.70   Voluntary
      Investment Plan or VIP  

                  	
                    20

                  
	 
      	
                    1.71   Voluntary
      Non-deductible Contributions  

                  	
                    20

                  
	 
      	
                    1.72   Year
      of Eligibility Service  

                  	
                    20

                  
	 
      	
                    1.73   Year
      of Vesting Service  

                  	
                    20

                  
	 
      	
                    1.74   USERRA  

                  	
                    20

                  
	 
      	 
      	 
      
	
                    ARTICLE
      II. PARTICIPATION STANDARDS  

                  	
                    20

                  
	 
      	 
      	 
      
	 
      	
                    2.01   Initial
      Participation  

                  	
                    20

                  
	 
      	
                    2.02   Termination
      of Participation  

                  	
                    21

                  
	 
      	
                    2.03   Participation
      of Re-hired Former Participants  

                  	
                    21

                  
	 
      	 
      	 
      
	
                    ARTICLE
      III. CONTRIBUTIONS TO TRUST  

                  	
                    21

                  
	 
      	 
      	 
      
	 
      	
                    3.01   Employing
      Company Contributions  

                  	
                    21

                  
	 
      	
                    3.01.1  Matching
      Contributions  

                  	
                    22

                  
	 
      	
                    3.01.2  Flat
      Contributions  

                  	
                    23

                  


          

        

        


        
          
            
            

          

          
            ii

            
              

            

          

          
            
            

          

        

      

       

      
        
          
            	 
      	
                    3.01.3  Qualified
      Non-Elective Contributions  

                  	
                    23

                  
	 
      	
                    3.01.4  Qualified
      Matching Contributions  

                  	
                    23

                  
	 
      	
                    3.01.5  General
      Provisions Applicable to Employing Company
      Contributions  

                  	
                    23

                  
	 
      	
                    3.02     Pre-tax
      Contributions  

                  	
                    26

                  
	 
      	
                    3.02.1  Compensation
      Reduction Authorization Agreements  

                  	
                    26

                  
	 
      	
                    3.02.2  General
      Provisions Applicable to Pre-tax Contributions  

                  	
                    27

                  
	 
      	
                    3.03     Employee
      Contributions  

                  	
                    35

                  
	 
      	
                    3.03.1  Voluntary
      Non-deductible Contributions  

                  	
                    35

                  
	 
      	
                    3.03.2  Rollover
      Contributions  

                  	
                    42

                  
	 
      	
                    3.03.3  General
      Provisions Applicable to Employee Contributions 

                  	
                    43

                  
	 
      	
                    3.04     Limitations
      on Annual Additions  

                  	
                    44

                  
	 
      	
                    3.04.1  In
      General  

                  	
                    44

                  
	 
      	
                    3.04.2  Multiple
      Defined Contribution Plans  

                  	
                    44

                  
	 
      	
                    3.04.3  Combination
      of Defined Contribution and Defined Benefit
    Plans  

                  	
                    45

                  
	 
      	
                    3.04.4  Protective
      Procedures  

                  	
                    47

                  
	 
      	
                    3.05     Multiple
      Use Test  

                  	
                    49

                  
	 
      	
                    3.05.1  Plan
      Years Beginning On or Before January 1, 1999  

                  	
                    49

                  
	 
      	
                    3.05.2  Plan
      Years Beginning On or After January 1, 2000  

                  	
                    50

                  
	 
      	 
      	
                      

                  
	
                    ARTICLE
      IV. BENEFITS  

                  	
                    51

                  
	 
      	 
      	 
      
	 
      	
                    4.01    Retirement
      Benefits  

                  	
                    51

                  
	 
      	
                    4.01.1  Right
      to a Benefit  

                  	
                    51

                  
	 
      	
                    4.02    Postponed
      Retirement  

                  	
                    51

                  
	 
      	
                    4.03    Disability
      Benefits  

                  	
                    51

                  
	 
      	
                    4.04    Death
      Benefits  

                  	
                    51

                  
	 
      	
                    4.04.1  Right
      to a Death Benefit  

                  	
                    52

                  
	 
      	
                    4.04.2  Limitation
      on Rights of a Married Participant’s
    Beneficiary  

                  	
                    52

                  
	 
      	
                    4.04.3  No
      Beneficiary  

                  	
                    52

                  
	 
      	
                    4.05    Termination
      Benefits  

                  	
                    52

                  
	 
      	 
      	 
      
	
                    ARTICLE
      V. VESTING  

                  	
                    52

                  
	 
      	 
      	
                     

                  
	 
      	
                    5.01    Vesting
      Percentage  

                  	
                    52

                  
	 
      	
                    5.02    Forfeiture  

                  	
                    53

                  
	 
      	
                    5.02.1  In
      General  

                  	
                    53

                  
	 
      	
                    5.02.2  Amounts
      Not Forfeited  

                  	
                    53

                  
	 
      	
                    5.02.3  Accounting
      After Reemployment  

                  	
                    53

                  
	 
      	
                    5.03    Reemployment
      After Termination of Service  

                  	
                    54

                  
	 
      	
                    5.04    Repayment
      of Vested Benefits  

                  	
                    54

                  
	 
      	
                    5.05    Restoration
      of Forfeitures  

                  	
                    54

                  
	 
      	
                    5.05.1  In
      General  

                  	
                    55

                  
	 
      	
                    5.05.2  Accounting
      for Restored Forfeitures  

                  	
                    55

                  
	 
      	
                    5.05.3  Source
      of Restored Forfeitures  

                  	
                    56

                  
	 
      	
                    5.06    Years
      of Vesting Service and Break-in-Service Rules  

                  	
                    56

                  


          

        

      

       

      
        
          
          

        

        
          iii

          
            

          

        

        
          
          

        

      

       

      
        
          
            	
                    ARTICLE
      VI. CALCULATION OF BENEFITS AND ACCOUNTS 

                  	
                    57

                  
	 
      	
                    6.01    Calculation
      of Benefits  

                  	
                    57

                  
	 
      	
                    6.02    Calculation
      of Accounts  

                  	
                    57

                  
	 
      	
                    6.03    Valuation
      of Company Stock  

                  	
                    58

                  
	 
      	 
      	
                      

                  
	
                    ARTICLE
      VII. PAYMENT OF VESTED BENEFITS  

                  	
                    58

                  
	 
      	
                    7.01    Form
      of Benefits  

                  	
                    58

                  
	 
      	
                    7.01.1  Retirement,
      Disability or Termination Benefits  

                  	
                    58

                  
	 
      	
                    7.01.2  Death
      Benefits  

                  	
                    59

                  
	 
      	
                    7.02    Notice
      and Election of Benefit Form  

                  	
                    60

                  
	 
      	
                    7.03    Annuity
      Benefit Not Required  

                  	
                    60

                  
	 
      	
                    7.04    Withdrawals
      During Employment  

                  	
                    61

                  
	 
      	
                    7.04.1  Withdrawals
      After Attaining Age 59  

                  	
                    61

                  
	 
      	
                    7.04.2  Withdrawals
      Prior to Age 59 1/2  

                  	
                    61

                  
	 
      	
                    7.04.3  Withdrawals
      from Rollover and Voluntary Nondeductible Contribution
      Accounts  

                  	
                    63

                  
	 
      	
                    7.04.4  General
      Provisions Applicable to Withdrawals  

                  	
                    63

                  
	 
      	
                    7.05    Effect
      of Reemployment  

                  	
                    64

                  
	 
      	
                    7.06    Claims
      Procedure  

                  	
                    64

                  
	 
      	
                    7.07    Distributions
      in Cash and Stock  

                  	
                    66

                  
	 
      	
                    7.08    Directed
      Rollovers  

                  	
                    66

                  
	 
      	 
      	 
      
	
                    ARTICLE
      VIII. BENEFIT COMMENCEMENT DATE  

                  	
                    67

                  
	 
      	
                    8.01    General
      Rule  

                  	
                    67

                  
	 
      	
                    8.02    Optional
      Termination Benefit Commencement Date  

                  	
                    67

                  
	 
      	
                    8.03    Retirement
      After Reemployment  

                  	
                    67

                  
	 
      	
                    8.04     Death
      Benefit Commencement Date  

                  	
                    68

                  
	 
      	
                    8.05    Limited
      Administrative Delays  

                  	
                    68

                  
	 
      	
                    8.06    Latest
      Benefit Commencement Date  

                  	
                    68

                  
	 
      	
                    8.07    Payment
      Date When Benefit is $3,500 or Less  

                  	
                    70

                  
	 
      	 
      	 
      
	
                    ARTICLE
      IX. TOP-HEAVY PROVISIONS  

                  	
                    70

                  
	 
      	
                    9.01    Application
      of Top—Heavy Provisions  

                  	
                    70

                  
	 
      	
                    9.02    Determination
      of Top-Heavy Plan Status: Top-Heavy Plan
      Definitions  

                  	
                    70

                  
	 
      	
                    9.03    Top-Heavy
      Plan Requirements  

                  	
                    73

                  
	 
      	
                    9.04    Minimum
      Accrued Benefits  

                  	
                    75

                  
	 
      	 
      	 
      
	
                    ARTICLE
      X. ADMINISTRATION  

                  	
                    76

                  
	 
      	
                    10.01   Appointment
      of Administrator  

                  	
                    76

                  
	 
      	
                    10.02   Expenses
      of Plan Administrator  

                  	
                    76

                  
	 
      	
                    10.03   Duties
      of the Plan Administrator  

                  	
                    76

                  
	 
      	
                    10.04   Individual
      Committee Member’s Rights  

                  	
                    77

                  
	 
      	 
      	 
      
	
                    ARTICLE
      XI. EXPENSES OF THE PLAN  

                  	
                    77

                  
	 
      	 
      	 
      
	
                    ARTICLE
      XII. AMENDMENT OF THE PLAN  

                  	
                    78

                  
	 
      	
                    12.01   Amendment  

                  	
                    78

                  


          

        

      

      
 

      
        
          
          

        

        
          iv

          
            

          

        

        
          
          

        

      

       

      
        
          
            	 
      	
                    12.02   Effect
      of Amendments on Vesting  

                  	
                    78

                  
	 
      	
                    12.03   Amendments
      to Qualify Trust  

                  	
                    79

                  
	 
      	 
      	
                     

                  
	
                    ARTICLE
      XIII. TERMINATION OR MERGER OF PLAN AND TRUST  

                  	
                    79

                  
	 
      	
                    13.01   Termination  

                  	
                    79

                  
	 
      	
                    13.02   Benefits
      After Plan Termination  

                  	
                    79

                  
	 
      	
                    13.03   Partial
      Termination  

                  	
                    80

                  
	 
      	
                    13.04   Plan
      Merger  

                  	
                    80

                  
	 
      	 
      	 
      
	
                    ARTICLE
      XIV. FIDUCIARY RESPONSIBILITIES AND
      INDEMNIFICATION  

                  	
                    80

                  
	 
      	
                    14.01   Allocation
      of Responsibilities  

                  	
                    80

                  
	 
      	
                    14.02   No
      Joint Responsibilities  

                  	
                    81

                  
	 
      	
                    14.03   Indemnification  

                  	
                    81

                  
	 
      	
                    14.04   Liability
      Insurance  

                  	
                    81

                  
	 
      	
                    14.05   Fiduciaries  

                  	
                    81

                  
	 
      	 
      	 
      
	
                    ARTICLE
      XV. MISCELLANEOUS  

                  	
                    82

                  
	 
      	
                    15.01   Investment
      of Plan Assets  

                  	
                    82

                  
	 
      	
                    15.02   Notices
      and Certifications  

                  	
                    83

                  
	 
      	
                    15.03   No
      Employment Contract  

                  	
                    84

                  
	 
      	
                    15.04   Return
      of Company Contributions  

                  	
                    84

                  
	 
      	
                    15.05   Spendthrift
      Provisions and Domestic Relations Orders  

                  	
                    85

                  
	 
      	
                    15.06  Governing
      Law  

                  	
                    87

                  
	 
      	
                    15.07  Binding
      Effect  

                  	
                    87

                  
	 
      	
                    15.08  Interpretation  

                  	
                    87

                  
	 
      	
                    15.09  Titles  

                  	
                    87

                  
	 
      	
                    15.10  Investing
      of Company Suspense Account  

                  	
                    88

                  
	 
      	
                    15.11  Voting
      and Tendering of Company Stock  

                  	
                    88

                  
	 
      	
                    15.12  Contributions
      in Company Stock  

                  	
                    88

                  
	 
      	
                    15.13  Suspense
      of Investment Elections  

                  	
                    89

                  
	 
      	
                    15.14  MISSING
      RECIPIENTS  

                  	
                    89

                  
	 
      	 
      	 
      
	
                    ARTICLE
      XVI. LOANS  

                  	
                    90

                  
	 
      	
                    16.01  Loan
      Availability  

                  	
                    90

                  
	 
      	
                    16.02  Loan
      Terms  

                  	
                    90

                  


          

        

      

       

       

      
        
          
          

        

        
          v

          
            

          

        

        
          
          

        

      

       

      THE
TALBOTS, INC. RETIREMENT SAVINGS VOLUNTARY PLAN

       

      AS
AMENDED AND RESTATED EFFECTIVE

       

      AS
OF JANUARY 1, 1997

       

      INTRODUCTION

       

      The
Talbots, Inc., a corporation organized and existing under the laws of the State
of Delaware, (the “Company”), established the Talbots, Inc. Retirement Savings
Voluntary Plan (“Plan”) as of January 1, 1989. The Plan was last amended and
restated effective as of November 1, 1993, to reflect changes in the law and the
institution of a Company stock fund.

       

      The Plan
is hereby amended and restated effective January 1, 1997, unless otherwise noted
herein, to comply with the Uruguay Round Agreements Act of 1994 (“GATT’); the
Uniform Services Employment and Reemployment Rights Act of 1994 (“USERRA”); the
Small Business Job Protection Act of 1996 (“SBJPA”); the Taxpayers Relief Act of
1997 (“TRA 97”); the Internal Revenue Service Restructuring and Reform Act of
1998 (“RRA 98”); and the Community Renewal Tax Relief Act of 2000 (“CRA”)
(collectively known as “GUST”).

       

      The
purposes for which the Plan has been established are (1) to provide greater
financial security for those employees of the Company who are eligible to
participate in the Plan by assuring them and, in certain circumstances, their
beneficiaries a monthly income in the event of their retirement, and (2) to
provide financial assistance to participating employees (or their beneficiaries)
in the event of the death or disability of such employees prior to their
retirement. Notwithstanding the foregoing, effective April 1, 2001, benefits
payable on account of a Participant’s death, retirement, Disability or
termination of service prior to attaining normal retirement age shall be payable
in a lump sum.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      Until
such time as participating employees or their beneficiaries become entitled to
the payment of benefits hereunder, the trustee shall hold all contributions to
and assets of the Plan in trust for the exclusive benefit of such employees and
their beneficiaries.

       

      The Plan
and the Trust are intended to conform with the provisions of the Internal
Revenue Code of 1986, as amended, and the Employee Retirement Income Security
Act of 1974, as amended, with the intention that the income of the Trust and all
additions and accretions thereto shall remain free of taxation until
distributions are made to participating employees and their
beneficiaries.

       

      ARTICLE
I.

      DEFINITIONS

       

      As used
in the Plan, the following terms shall have the meanings set forth
below:

       

      1.01           Accrued
Benefit.  The sum of a Participant’s

       

      
        	
                 
      

              	
                (a)

              	
                Employer
      Contribution Accounts;

              


      

       

      
        	
                 
      

              	
                (b)

              	
                Pre-tax
      Contribution Account;

              


      

       

      
        	
                 
      

              	
                (c)

              	
                Employee
      Contribution Accounts; and

              


      

       

      
        	
                 
      

              	
                (d)

              	
                Rollover
      Contribution Account

              


      

       

      1.02           Actual 401(m) Contribution
Percentage.  Consistent with Treasury Regulations issued under
Section 1.401(m)-1, the ratio (expressed as a percentage) of the sum of the
Voluntary Non-deductible Contributions, Qualified Non-Elective Contributions,
Qualified Matching Contributions or Pre-Tax Contributions, and Matching
Contributions under the Plan on behalf of the Participant for the Plan Year to
the Participant’s Compensation for the Plan Year. As used in the Plan the term
Actual 401(m) Contribution Percentage has the same meaning as the term
“contribution percentage” as defined in Code Section 401(m)(3).

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

       

      1.03           Actual Pre-tax Contribution
Percentage.  Consistent with Treasury Regulations issued under
Section 1.401(k), the ratio (expressed in a percentage) of the sum of Pre-tax
Contributions, Qualified Non-Elective Contributions, and Qualified Matching
Contributions on behalf of the Participant for the Plan Year to the
Participant’s Compensation for the Plan Year. The Actual Pre-tax Contribution
Percentage of an Employee who is eligible to, but does not make a Pre-tax
Contribution, is zero. As used in this Plan the term Actual Pre-tax Contribution
Percentage has the same meaning as the term “actual deferral percentage” as
defined in Code Section 40l(k)(3)(B).

       

      1.04           Adjustment
Factor.  The cost of living factor prescribed by the Secretary
of the Treasury under Code Section 415(d) for Plan Years beginning on and after
the Effective Date as applied to such items and in such manner as the Secretary
shall provide.

       

      1.05           Anniversary
Year.  The period consisting of twelve (12) consecutive months
beginning on the date on which an Employee first receives credit for an Hour of
Service following his or her initial employment with an Employing Company or, if
applicable, following any One-Year Break in Service and each period of twelve
(12) consecutive months beginning on the anniversary of such date.

       

      1.06           Annual
Addition.  The sum for any Limitation Year, of (a) all
contributions made to the Plan for or by the Participant, except Rollover
Contributions, with respect to the Limitation Year, plus (b) forfeitures (if
any) allocated to the account of the Participant with respect to the Limitation
Year.

       

      1.07           Average Actual 401(m)
Contribution Percentage.  The average (expressed as a
percentage) of the Actual 401(m) Contribution Percentages of the Participants in
a testing group, consisting either of all Highly Compensated Employees or all
Non-highly Compensated Employees.

       

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

       

      1.08           Average Actual Pre-tax
Contribution Percentage.  The average (expressed as a
percentage) of the Actual Pre-tax Contribution Percentages of the Participants
in a testing group, consisting either of all Highly Compensated Employees or all
Non-highly Compensated Employees.

       

      1.09           Beneficiary.  Any
person designated by a Participant to receive any Plan benefit hereunder that is
payable upon the death of such Participant. This term shall include any person
whose entitlement to benefits hereunder has been made dependent by a Participant
upon the survival of some person other than such person or upon any other event
uncertain to occur (hereinafter referred to as a “Contingent
Beneficiary”).

       

      1.10           Benefit Commencement
Date.  The date as of which benefits hereunder first become
payable, in accordance with the provisions of Article VIII, to or in respect of
a Participant who ceases or has ceased to be an Employee.

       

      1.11           Black Out
Period  The period during which trading in Company Stock or any
other Investment Fund is or may be prohibited by applicable law or
regulation.

       

      1.12           Board.  The
Board of Directors of the Company (as hereinafter defined).

       

      1.13           Code.  The
Internal Revenue Code of 1986, as amended from time to time.

       

      1.14           Company.  The
Talbots, Inc. a Delaware corporation, and any successor to all or a major
portion of its property or business.

       

      1.15           Company
Stock.  Common shares issued by the Company.

       

      1.16           Company Stock
Fund.  The Investment Fund established by the Plan
Administrator which is to be principally invested in Company Stock.

       

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

       

      1.17           Company Suspense
Account.  The separate account maintained for contributions
made to the Plan, any forfeitures under the Plan, and any other Plan assets held
in the Trust until such time as they are allocated to Participant accounts and
invested in one or more Investment Funds. Notwithstanding the foregoing,
effective October 1, 1999, the Company Suspense Account is no longer maintained
under the Plan.

       

      1.18           Compensation.  A
Participant’s basic salary, wages, bonuses, overtime and commissions paid by the
Company during the Plan Year and including, in addition, Pre-tax Contributions
hereunder and any other salary reduction made pursuant to Code Section
125.

       

      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
the OBRA’93 Annual Compensation Limit. The OBRA’93 Annual Compensation Limit is
$150,000, as adjusted by the Commissioner for increases in the cost of living in
accordance with Code Section 401(a)(17)(B). The cost-of-living adjustment in
effect for a calendar year applies to any period, not exceeding 12 months, over
which Compensation is determined (determination period) beginning in such
calendar year. If a determination period consists of fewer than 12 months, the
OBRA’93 Annual Compensation Limit will be multiplied by a fraction, the
numerator of which is the number of months in the determination period, and the
denominator of which is 12.

       

      Any
reference in this Plan to the limitation under Code Section 401(a)(l7) shall
mean the OBRA’93 Annual Compensation Limit set forth in this provision If
Compensation for any prior determination period is taken into account in
determining an Employee’s benefits accruing in the current Plan Year, the
Compensation for that prior determination period is subject to the OBRA’93
Annual Compensation Limit in effect for that prior determination
period.

       

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

       

      For
purposes of this Section and Section 3.04, for Plan Years beginning on or after
January 1, 2001, Compensation paid or made available during such Plan Year shall
include elective amounts that are not includible in the gross income of the
Employee by reason of Code Section 132(f)(4).

       

      Effective
January 1, 2002, a Participant’s Compensation in his or her initial year of
participation in the Plan shall include only that Compensation attributable to
the period beginning with the Participant’s effective date of participation in
this Plan pursuant to Article II.

       

      1.19           Direct
Rollover.  The payment by the Plan to the Eligible Retirement
Plan specified by the Distributee.

       

      1.20           Disability.  A
total and permanent disability, as determined in the sole discretion of the Plan
Administrator on a non-discriminatory basis, such that the Participant is unable
to perform any gainful activity due to a physical or mental
impairment.

       

      1.21           Distributee.  An
Employee or former Employee, including the Employee or former Employee’s
surviving Spouse or former Spouse who is the alternate payee under a qualified
domestic relations order as defined in Code Section 414(p) with respect to the
interest of such Spouse or former Spouse.

       

      1.22           Effective
Date.  The effective date of this Plan is January 1, 1989. The
amendment and restatement date is January 1, 1997.

       

      1.23           Eligible Retirement
Plan.  An individual retirement account described in Code
Section 408(a), an individual retirement annuity described in Code Section
408(b), any annuity plan described in Code Section 403(b), or a qualified trust
described in Code Section 401(a), that accepts the Distributee’s Eligible
Rollover Distribution; provided that in the case of an Eligible Rollover
Distribution to the Participant’s surviving Spouse, an Eligible Retirement Plan
shall be an individual retirement account or an individual retirement
annuity.

       

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

       

      1.24           Eligible Rollover
Distribution.  Any distribution of all or any portion of the
balance to the credit of the Distributee, except for (a) any distribution that
is one of a series of substantially equal periodic payments (not less frequently
than annually) made for the life (or life expectancy) of the Distributee or the
joint lives (or joint life expectancies) of the Distributee and his or her
designated Beneficiary, or for a specified period of ten (10) years or more, (b)
any distribution to the extent such distribution is required under Code Section
401(a)(9), or (c) the portion of any distribution that is not includable in
gross income (determined without regard to the exclusion for net unrealized
appreciation with respect to Company Stock or other employer securities). In
addition to the foregoing, effective January 1, 2000, an eligible rollover
distribution shall not include any hardship distribution described in Code
Section 401 (k)(2)(B)(i)(IV).

       

      1.25           Employee.  Any
individual who, on or after the Effective Date, is employed by the Company.
Notwithstanding the foregoing, effective April 1, 2000, Employee shall mean any
individual who, on or after the Effective Date, is employed by an Employing
Company.

       

      1.26           Employee Contribution
Accounts.  The separate accounts maintained in the records of
the Plan Administrator for each Participant’s Rollover Contributions (the
“Rollover Contribution Account”) and Voluntary Non-deductible Contributions (the
“Voluntary Non-deductible Contribution Account”), if any, and Qualified Matching
Contributions (the “Qualified Matching Contributions Account”) plus the
Participant’s cumulative share of any income and gains allocable to each such
separate account and minus the Participant’s cumulative share of any losses,
distributions, expenses and other charges allocable to each such separate
account and plus or minus any other applicable adjustments. Notwithstanding the
forgoing, effective April 1, 2000, Employee Contribution Accounts shall mean the
separate accounts maintained in the records of the Plan Administrator for each
Employee’s Rollover Contributions (the “Rollover Contribution Account”) and
Voluntary Non-deductible Contributions (the “Voluntary Non-deductible
Contribution Account”), if any, and Qualified Matching Contributions (the
“Qualified Matching Contributions Account”) plus the Employee’s cumulative share
of any income and gains allocable to each such separate account and minus the
Employee’s cumulative share of any losses, distributions, expenses and other
charges allocable to each such separate account and plus or minus any other
applicable adjustments.

       

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

       

      1.27           Employer Contribution
Accounts.  The separate accounts maintained in the records of
the Plan Administrator for each Participant’s share of Matching Contributions
(the “Matching Contribution Account”), if any, and Qualified Matching
Contributions (the “Qualified Matching Contribution Account”) and Flat
Contributions (the “Flat Contribution Account”) and Qualified Non-Elective
Contributions (the “Qualified Non-Elective Contribution Account”) if any, plus
the Participant’s cumulative share of any income and gains allocable to each
such separate account and minus the Participant’s cumulative share of any
losses, distributions, expenses or other charges allocable to each such separate
account and plus or minus any other applicable adjustments.

       

      1.28           Employing
Company.  (a) The Company, (b) any corporation included in a
controlled group of corporations in which the Company is included, in accordance
with the provisions of Code Section 414(b), (c) any trade or business under
common control with the Company, within the meaning of Code Section 414(c), and
(d) any trade or business, whether incorporated or not incorporated, designated
by the Board as an Employing Company. Notwithstanding the foregoing, effective
April 1, 2000, Employing Company shall mean (a) The Company, (b) any corporation
included in a controlled group of corporations in which the Company is included,
in accordance with the provisions Code of Section 414(b), (c) any trade or
business under common control with the Company, within the meaning of Code
Section 414(c), and (d) any trade or business, whether incorporated or not
incorporated, designated by the Board as an Employing Company, which is
designated for participation in the Plan, including Talbots Classics National
Bank and Talbots Classics Finance Company.

       

      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

       

      1.29           Employment Commencement
Date.  The date on which an Employee first performs an Hour of
Service (as hereinafter defined).

       

      1.30           Entry
Date.  Either January 1 or July 1 of each Plan Year.
Notwithstanding the foregoing, effective October 1, 1999, Entry Date shall mean
the first day of each calendar month of the Plan Year.

       

      1.31           ERISA.  The
Employee Retirement Income Security Act of 1974, as amended from time to
time.

       

      1.32           Excess Aggregate 401(m)
Contributions.  If the requirements of Article III of the Plan
with respect to the Average Actual 401(m) Contribution Percentage for Highly
Compensated Employees are not met for the Plan Year, the aggregate amount of the
sum of Matching Contributions and Voluntary Non-deductible Contributions (and
any Qualified Non- Elective Contribution or Pre-Tax Contribution taken into
account in computing the Average Actual 401(m) Contribution Percentage) actually
made on behalf of Highly Compensated Employees for such Plan Year, over the
maximum amount of such Contributions permitted under the limitations of Plan
Section 3.03.1(c) (determined by reducing contributions made on behalf of Highly
Compensated Employees in order of their Average Actual 401(m) Contribution
Percentages beginning with the highest of such Percentages).

       

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

       

      1.33           Excess Aggregate Pre-tax
Contributions.  The aggregate amount by which the sum of
Pre-tax Contributions, Qualified Non-Elective Contributions and Qualified
Matching Contributions actually paid over to the Trust on behalf of Highly
Compensated Employees for a Plan Year exceed the maximum amount of such Pre-tax
Contributions permitted by Article III of the Plan and Code Section
401(k)(3)(A)(ii) for the Plan Year. The term Excess Aggregate Pre-Tax
Contributions as used in the Plan has the same meaning as the term “excess
contributions” as defined in Code Section 401(k)(8)(B).

       

      1.34           Excess Individual Pre-tax
Contributions.  The amount of Pre-tax Contributions for a
calendar year that the Participant allocates to this Plan pursuant to the claim
procedure set forth in Article III of the Plan. The term Excess Individual
Pre-tax Contributions as used in the Plan has the same meaning as the term
“excess deferrals” as defined in Code Section 402(g)(2)(A).

       

      1.35           Fixed Income
Fund.  The Investment Fund designated by the Plan Administrator
which is principally invested in fixed income obligations.

       

      1.36           Flat
Contributions.  Contributions made on behalf of each
Participant by an Employing Company pursuant to Section 3.01.2 of the
Plan.

       

      1.37           Highly Compensated
Employee.  An Employee who:

       

      
        	
                 
      

              	
                (a)

              	
                at
      any time during the Plan Year or the preceding year was a 5% owner of the
      Company (applying the constructive ownership rules of Code Section 318);
      or

              


      

       

      
        	
                 
      

              	
                (b)

              	
                for
      the preceding year had Compensation in excess of $80,000 (as adjusted by
      the Commissioner of Internal Revenue for the relevant
    year).

              


      

       

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

       

      In
determining whether an Employee is a Highly Compensated Employee for years
beginning in 1997, the above definition shall be treated as having been in
effect for years beginning in 1996. The Company has not made a top-paid election
for any Plan Year beginning on or after January 1, 1997.

       

      The term
“Highly Compensated Employee” also includes any former Employee who separated
from service (or has a deemed separation from service, as determined under
Treasury Regulations) prior to the Plan Year, performs no service for the
Company during the Plan Year, and was a Highly Compensated Employee either for
the separation year or any Plan Year ending on or after his or her 55th
birthday. If the former Employee’s separation from service occurred prior to
January 1, 1987, he or she is a Highly Compensated Employee only if he or she
satisfied clause (a) of this Section or received Compensation in excess of
$50,000 during: (1) the year of his or her separation from service (or the prior
year); or (2) any year ending after his or her 54th
birthday.

       

      1.38           Hour of
Service.  Each hour:

       

      (a)           
for which an Employee directly or indirectly receives compensation from an
Employing Company (such hours to be credited as of the time when the duties are
performed);

       

      (b)           for
which an Employee directly or indirectly receives compensation or is entitled to
compensation by an Employing Company for reasons other than the performance of
duties including, but not limited to, vacation, holiday, illness, Disability,
pregnancy, layoff, and jury duty;

       

      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      

       

      (c)           during
which an Employee is on an unpaid leave of absence from an Employing Company as
determined by the Plan Administrator (as hereinafter defined) under uniform
rules prescribed by the Plan Administrator;

       

      (d)           for
which an Employee is entitled to receive credit under the laws of the United
States (including, but not limited to, those pertaining to military service) in
addition to each Hour of Service credited under the preceding paragraphs (a)
through (c); provided, however, that no more than five hundred and one (501)
Hours of Service shall be credited under the preceding paragraphs (b) or (c) or
this paragraph (d) on account of any single continuous period during which such
Employee performs no duties; and provided, further, however, that no such Hours
of Service shall be credited on the basis of any payment, or entitlement
thereto, which is made or due under a plan maintained solely to comply with
applicable workmen’s compensation, unemployment compensation or disability
insurance laws or in accordance with a plan under which such Employee receives
reimbursement solely for medical or medically related expenses incurred by him;
and

       

      (e)           for
which an Employing Company has awarded or agreed to pay back pay, irrespective
of mitigation of damages, other than an hour credited to an individual under the
preceding paragraphs (a) through (d) above. Such hours shall be credited as of
the time to which the award or agreement pertains.

       

      (f)           Hours
of Service may be credited on the basis of, respectively, 10, 45, 95, or 190
Hours of Service credited for, respectively, a day, week, semi-month or month
during which an Employee is credited with at least one Hour of Service as
defined in paragraphs (a) through (e) above.

       

      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

      

       

      The Plan
Administrator shall credit an Employee’s Hours of Service to the appropriate
employment period or periods, as determined in accordance with Department of
Labor Regulation 2530.200b-2(c)(2), and shall compute the total Hours of Service
hereunder in accordance with Department of Labor Regulation
2530.200b-2(b).

       

      Solely
for the purpose of determining whether a One-Year Break in Service (as
hereinafter defined) has occurred, the Plan Administrator shall account for the
following absences from employment as Hours of Service: (1) pregnancy of an
Employee; (2) birth of a child of an Employee; (3) placement of a child with an
Employee in connection with adoption proceedings; or (4) caring for a child
described in the preceding subparagraphs (2) or (3) immediately after the birth
or placement of such child; (5) an absence pursuant to the Family and Medical
Leave Act of 1993; provided, however, that no more than five hundred and one
(501) Hours of Service shall be credited under this paragraph and such Hours of
Service shall be credited in the first Plan Year necessary to avoid a One-Year
Break in Service.

       

      1.39           Investment
Funds.  The investment fund or funds designated by the Plan
Administrator from time-to-time in which a Participant, Beneficiary or alternate
payee under a qualified domestic relations order may direct the investment of
his or her account or accounts pursuant to the provisions of Section 15.01 and
subject to such rules and procedures established by the Plan Administrator and
applied on a uniform and non-discriminatory basis. Notwithstanding the
foregoing, effective September 11, 2000, an Employee who makes a Rollover
Contribution prior to becoming a Participant shall be able to direct the
investment of his or her account or accounts pursuant to Section
15.01.

       

      1.40           Leased
Employee.  An individual (who otherwise is not an Employee of
the Employing Company) who, pursuant to a leasing agreement between the
Employing Company and any other person, has performed services for the Employing
Company (or for the Employing Company and any persons related to the Employing
Company within the meaning of Code Section 414(n)(6)) on a substantially full
time basis for at least one year, and such services are performed under the
primary direction or control of the Employing Company. The Plan does not treat
Leased Employees as eligible to participate.

       

      
        
          
          

        

        
          13

          
            

          

        

        
          
          

        

      

       

      1.41           Limitation
Year.  A Plan Year.

       

      1.42           Matching
Contributions.  Contributions made on behalf of each
Participant by an Employing Company pursuant to Section 3.01.1 of the
Plan.

       

      1.43           Month of
Service.  A month of service means a calendar month during any
part of which an Employee completed an Hour of Service, except, however, a
Participant shall be credited with a month of service for each month during the
12 month computation period in which he or she has not incurred a One-Year Break
in Service.

       

      1.44           Non-highly Compensated
Employee.  Any Employee of an Employing Company who is not a
Highly Compensated Employee.

       

      1.45           Normal Retirement
Date.  The first day of the month coinciding with or next
following the later of:

       

      (a)           a
Participant’s 65th
birthday, or

       

      (b)           his
completion of five (5) Years of Vesting Service.

       

      1.46           One-Year Break in
Service.  For eligibility purposes, a Plan Year during which an
Employee has not completed more than five hundred (500) Hours of Service. For
vesting purposes, if during a Plan Year an Employee fails to accrue a Month of
Service, an Employee shall not be deemed to have incurred a One-Year Break in
Service if he or she completes an Hour of Service within 12 months following the
last day of the month during which his or her employment
terminated.

       

      
        
          
          

        

        
          14

          
            

          

        

        
          
          

        

      

       

      1.47           Participant.  Any
Employee who satisfies the requirements for eligibility in the Plan as long as
he or she continues to satisfy such requirements. Notwithstanding the foregoing,
effective September 11, 2000, a Participant shall also mean an Employee who
makes a Rollover Contribution pursuant to Section 3.03.2.

       

      1.48           Pension
Plan.  The Talbots, Inc. Pension Plan.

       

      1.49           Plan.  The
Talbots, Inc. Retirement Savings Voluntary Plan and the Trust Agreement, as they
may be amended or supplemented. This document and the Trust Agreement shall be
treated as an integrated whole and shall be hereinafter referred to as the
“Plan”.

       

      1.50           Plan
Administrator.  The administrative committee appointed in
accordance with Article X of the Plan. The Plan Administrator shall be the
“administrator” referred to in Section 3(16)(A)(i) of ERISA.

       

      1.51           Plan
Year.  The period of twelve (12) consecutive months commencing
on January 1, 1989 and each twelve (12) month period thereafter.

       

      1.52           Postponed Retirement
Date.  The first day of the month coinciding with or next
following the date of retirement of a Participant who continues in Service after
his or her Normal Retirement Date.

       

      1.53           Pre-tax
Contributions.  Contributions made pursuant to the provisions
of Section 3.02 of the Plan by the Employing Company, at the election of the
Participant, in lieu of cash compensation, including contributions that are made
pursuant to a salary or other compensation reduction authorization agreement.
Notwithstanding the foregoing, effective October 1, 1999, for purposes of this
Section, a reduction authorization agreement shall be executed by a written form
or via appropriate electronic medium.

       

      
        
          
          

        

        
          15

          
            

          

        

        
          
          

        

      

       

      Pre-tax
Contributions shall be non-forfeitable when made and shall be distributable only
in accordance with the provisions of Articles III, VII and VIII of the Plan
governing Pre-tax Contribution Accounts.

       

      1.54           Pre-tax Contribution
Account.  The separate account maintained in the records of the
Plan Administrator for each Participant’s Pre-tax Contributions, if any, plus
the Participant’s cumulative share of any income and gains allocable to such
account and minus the Participant’s cumulative share of any losses,
distributions, expenses and other charges allocable to such account and plus or
minus any other applicable adjustments.

       

      1.55           Qualified Matching
Contributions.  Matching Contributions which are 100% vested
and subject to Section 3.01.4 hereof.

       

      1.56           Qualified Non-Elective
Contributions.  Contributions made by an Employing Company
pursuant to Section 3.01.3 of the Plan. Qualified Non-Elective Contributions
shall be 100% vested and shall be subject to the limitations of Section 3.04.3
hereof.

       

      1.57           Reemployment Commencement
Date.  The first day on which an Employee completes an Hour of
Service following the most recent Plan Year in which he or she incurred a
One-Year Break in Service.

       

      1.58           Restatement
Date.  January 1, 1997.

       

      1.59           Rollover
Contributions.  A Participant’s contributions, if any, made
pursuant to the provisions of Section 3.03.2 of the Plan. Notwithstanding the
foregoing, effective September 11, 2000, Rollover Contributions shall mean a
Participant’s or Employee’s contributions, if any, made pursuant to the
provisions of Section 3.03.2.

       

      
        
          
          

        

        
          16

          
            

          

        

        
          
          

        

      

       

      1.60           Secretary.  The
Secretary of the Treasury.

       

      1.61           Section 415
Compensation.  The Participant’s wages, salaries, fees for
professional service and other amounts for personal services actually rendered
in the course of employment with an Employing Company maintaining the Plan
(including, but not limited to, commissions paid salesmen, compensation for
services on the basis of a percentage of profits, commissions on insurance
premiums, tips and bonuses and in the case of a Participant who is an Employee
within the meaning of Code Section 401(c)(l) and the Regulations thereunder, the
Participant’s earned income (as described in Code Section 401(c)(2) arid the
Regulations thereunder) paid during the Limitation Year. “Section 415
Compensation” shall exclude:

       

      (a)           Contributions
made by an Employing Company to a plan of deferred compensation to the extent
that, before the application of the Code Section 415 limitations to the Plan,
the contributions are not includable in the gross income of the Employee for the
taxable year in which contributed;

       

      (b)           Employing
Company contributions made on behalf of an Employee to a simplified employee
pension plan described in Code Section 408(k) to the extent such contributions
are deductible by the Employee under Code Section 219(a);

       

      (c)           Any
distributions from a plan of deferred compensation regardless of whether such
amounts are includable in the gross income of the Employee when distributed
except that any amounts received by an Employee pursuant to an unfunded
non-qualified plan to the extent such amounts are includable in the gross income
of the Employee;

       

      
        
          
          

        

        
          17

          
            

          

        

        
          
          

        

      

       

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

       

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

       

      (f)           Other
amounts which receive special tax benefits, such as premiums for group term life
insurance (but only to the extent that the premiums are not includable in the
gross income of the Employee), or contributions made by the employer (whether or
not under a salary reduction agreement) towards the purchase of any annuity
contract described in Code Section 403(b) (whether or not the contributions are
excludable from the gross income of the Employee).

       

      1.62           Service.  A
period of employment from an Employee’s Employment Commencement Date or
Reemployment Commencement Date until his or her termination date as

       

      (a)           
an employee of an Employing Company as of the date he or she became such;
or

       

      (b)           an
employee of a predecessor thereof for periods before it became an Employing
Company, as determined by the Board in a non-discriminatory manner;
or

       

      (c)           as
otherwise defined in ERISA.

       

       

      1.63           Spouse.  The
person to whom a Participant is legally married at any relevant time, such as
the time a consent is given pursuant to Section 7.03(b) or at the time of the
Participant’s death.

       

      
        
          
          

        

        
          18

          
            

          

        

        
          
          

        

      

       

      1.64           Trust or Trust
Fund.  The fund established by and maintained in accordance
with the terms of the Trust Agreement.

       

      1.65           Trustee.  State
Street Bank and Trust Company, or any successor trustee appointed by the Board
to administer the Trust. Notwithstanding the foregoing, effective October 1,
1999, Trustee shall mean the American Express Trust Company, or any successor
trustee appointed by the Board to administer the Trust. For all purposes of
administering the Trust, American Express Trust Company, shall be a
discretionary trustee and shall be considered a Fiduciary of the
Plan.

       

      1.66           Trust
Agreement.  The Master Trust Agreement entered into between the
Trustee and the Company establishing the Trust.

       

      1.67           Valuation
Date.  The last day of each calendar quarter of each Plan Year
and any other date or dates during a Plan Year as may be set from time to time
by the Plan Administrator for the valuation of the assets of the Trust.
Notwithstanding the foregoing, effective October 1, 1999, Valuation Date shall
mean any day that the New York Stock Exchange is open for business or any other
day chosen by the Plan Administrator.

       

      1.68           Vested
Benefit.  The sum of a Participant’s

       

      (a)           Employer
Contribution Accounts multiplied by the Participant’s Vesting
Percentage;

       

      (b)           Pre-tax
Contribution Accounts; and

       

      (c)           Employee
Contribution Accounts.

       

      1.69           Vesting
Percentage.  The percentage determined in accordance with
Article V.

       

      
        
          
          

        

        
          19

          
            

          

        

        
          
          

        

      

       

      1.70           Voluntary Investment Plan or
VIP.  The Voluntary Investment Plan of General Mills, Inc. as
maintained on behalf of Employees employed by the Company prior to June 27,
1988.

       

      1.71           Voluntary Non-deductible
Contributions.  A Participant’s contributions, if any, made
pursuant to the provisions of Section 3.03.1 of the Plan.

       

      1.72           Year of Eligibility
Service.  Any Anniversary Year during which an Employee
completes at least one thousand (1,000) Hours of Service whether or not such
Employee is employed by an Employing Company throughout such Anniversary Year.
Notwithstanding the foregoing, effective January 1, 2002, with respect to an
Employee who does not complete at least one thousand (1,000) Hours of Service
during his or her first Anniversary Year, Year of Eligibility Service shall mean
the first Plan Year during which such Employee completes at least one thousand
(1,000) Hours of Service.

       

      1.73           Year of Vesting
Service.  Each period of Service during which an Employee who
has attained age 18 completes at least twelve (12) Months of Service, except as
otherwise provided in Article V of the Plan. Years of Vesting Service as a
participant in the Voluntary Investment Plan shall be recognized for the
purposes of this Section and Article V.

       

      1.74           Notwithstanding
any provision of this Plan to the contrary, effective December 12, 1994,
contributions, benefits and service credit with respect to qualified military
service will be provided in accordance with Code Section 414(u).

       

      ARTICLE
II.

      PARTICIPATION
STANDARDS

       

      2.01           Initial
Participation.  (a) All Employees who were participants in the
VIP on the day immediately preceding the Effective Date became Participants as
of the Effective Date; (b) all Employees participating in the Plan on the
Restatement Date shall continue to participate in the Plan as of that date; and
(c) all other Employees shall become a Participant on the first Entry Date
coinciding with or next following the date on which the Employee satisfies the
following requirements:

       

      
        
          
          

        

        
          20

          
            

          

        

        
          
          

        

      

       

      (i)           
the completion of one (1) Year of Eligibility Service; and

       

      (ii)           the
attainment of age twenty-one (21). An Employee who has satisfied the
requirements of paragraphs (i) and (ii) and whose first Entry Date coincides
with his or her leave of absence pursuant to the Family and Medical Leave Act of
1993 shall become a Participant as of the first day of the month following his
or her return to Service following such leave of absence.

       

      2.02           Termination of
Participation.  Any Employee who becomes a Participant in
accordance with the provisions of Section 2.01 shall cease to be a Participant
as of the earlier of (a) the date of his or her death, or (b) the date on which
he or she retires or otherwise ceases to be an Employee.

       

      2.03           Participation of Re-hired
Former Participants.  An Employee who ceases to be a
Participant by reason of Section 2.02 shall again become a Participant as of his
or her Reemployment Commencement Date if he or she is reemployed following the
date on which he or she retired or otherwise ceased to be an
Employee.

       

      ARTICLE
III.

      CONTRIBUTIONS TO
TRUST

       

      3.01           Employing Company
Contributions.  Not later than the time prescribed by law
(including extensions thereof) for filing their Federal income tax returns for
their respective tax years, or such other time as may be provided in applicable
Regulations under the Code, the Employing Companies shall make contributions to
the Trust in such amounts as the Plan Administrator shall determine to be
required pursuant to this Section or Section 302.

       

      
        
          
          

        

        
          21

          
            

          

        

        
          
          

        

      

       

      3.01.1  Matching
Contributions.  The Employing Companies shall make Matching
Contributions on behalf of each Participant actively employed by his or her
Employing Company and who is making Pre-Tax Contributions on the last day of
each calendar quarter in such percentages of a Participant’s Pie-Tax
Contributions as may be determined by the Company for each such calendar
quarter; provided that such Matching Contributions shall not exceed in any Plan
Year the lesser of (a) 3% of his or her Compensation for such Plan Year, and (b)
$7,000.00, as such amount may be adjusted by the Secretary under Code Section
402(g); provided further, that all Matching Contributions made on behalf of
Participants who are Highly Compensated Employees shall be subject to the
provisions of Code Section 401(m) and of Subsections (c) - (f) of Section 3.03.1
of the Plan.

       

      Notwithstanding
the foregoing, effective January 1, 2000, the Employing Companies shall make
Matching Contributions on behalf of each Participant who is making Pre- Tax
Contributions in such percentages of a Participant’s Pre-Tax Contributions as
may be determined by the Company; provided that such Matching Contributions
shall not exceed in any Plan Year the lesser of (a) 3% of his or her
Compensation for such Plan Year, and (b) $7,000.00, as such amount may be
adjusted by the Secretary under Code Section 402(g); provided further, that all
Matching Contributions made on behalf of Participants who are Highly Compensated
Employees shall be subject to the provisions of Code Section 401(m) and of
Subsections (c) - (f) of Section 3.03.1 of the Plan.

       

      The
Employing Companies shall not make Matching Contributions that result in a
failure to satisfy the Average Actual 401(m) Contribution Percentage Test
described in Sections 3.03.1(c) and 3.03.1(d) hereof.

       

      
        
          
          

        

        
          22

          
            

          

        

        
          
          

        

      

       

      3.01.2 
  Flat
Contributions.  The Employing Companies may in the discretion
of the Company, make Flat Contributions on behalf of each Participant for each
Plan Year on a per Participant basis. Such Flat Contributions, if any, shall be
made on the basis of an equal amount for each Participant.

       

      3.01.3 
  Qualified
Non-Elective Contributions.  In its discretion, in lieu of,
and/or in addition to, distributing Excess Aggregate Pre-tax Contributions, any
Employing Company may make Qualified Non-Elective Contributions in order that
the limitations of Sections 3.02.2(e) — (g), 3.05.1 and 3.05.2 are met. Such
Qualified Non-Elective Contribution shall be made on behalf of Participants who
are not Highly Compensated Employees and such Qualified Non-Elective
Contributions, if any, shall be allocated in proportion to
Compensation.

       

      3.01.4   
Qualified Matching
Contributions.  In its discretion, in lieu of, and/or in
addition to, forfeiting Excess Aggregate 401(m) Contributions, any Employing
Company may make Qualified Matching Contributions in order that the limitations
of Sections 3.03.1(c), 3.03.1(d), 3.05.1 and 3.05.2 are met. Such Qualified
Matching Contributions shall be made on behalf of Participants who are not
Highly Compensated Employees, and such Qualified Matching Contributions shall be
allocated in proportion to Matching Contributions.

       

      3.01.5   
General Provisions
Applicable to Employing Company Contributions.

       

      (a)           Eligibility for Employing
Company Contributions.  To receive an allocation of Matching
and Qualified Matching Contributions, a Participant must be actively employed by
an Employing Company and be making Pre-Tax Contributions under the Plan as of
the last day of the calendar quarter as of which such Matching or Qualified
Matching contribution is allocated on behalf of such Participant and all other
Employing Company contributions shall be allocated to all Participants actively
employed on the last day of the calendar quarter as of which such Employing
Company contribution is allocated.

       

      
        
          
          

        

        
          23

          
            

          

        

        
          
          

        

      

       

      Notwithstanding
the foregoing, effective October 1, 1999, to receive an allocation of Matching
and Qualified Matching Contributions, a Participant must be making Pre- Tax
Contributions under the Plan as of which such Matching or Qualified Matching
contribution is allocated on behalf of such Participant and all other Employing
Company contributions shall be allocated to all Participants as of which such
Employing Company contribution is allocated.

       

      (b)           Separate
Accounts.  Separate accounts within each Participant’s Employer
Contribution Accounts shall be maintained for those portions of each
Participant’s Accrued Benefit that are attributable to (i) Matching
Contributions, (ii) Qualified Matching Contributions, (iii) Qualified
Non-Elective Contributions, and (iv) Flat Contributions. Each such separate
account shall be credited as of each Valuation Date with the Participant’s share
of any applicable contributions, income, gains, losses, distributions, expenses
and other charges and any other adjustments.

       

      (c)           Vesting.  All
Qualified Non-Elective Contributions and Qualified Matching Contributions shall
be fully vested at such time as they are allocated to the Participants Qualified
Non-Elective Contribution and Qualified Matching Contribution Accounts, and all
other Employing Company contributions shall be vested in accordance with Article
V of this Plan.

       

      (d)           Forfeitures.  Any
forfeitures of Employing Company contributions shall first be applied,
consistent with Section 5.05, as restoration of amounts forfeited under Section
5.02 and second shall be credited to the Matching Contribution Account of each
remaining Participant actively participating in the Plan on the last day of the
Plan Year in which such forfeiture allocation occurs, allocated in proportion to
the Compensation of each such Participant.

       

      
        
          
          

        

        
          24

          
            

          

        

        
          
          

        

      

       

      Notwithstanding
the foregoing, effective October 1, 1999, any forfeitures of Employing Company
contributions shall first be applied, consistent with Section 5.05, as
restoration of amounts forfeited under Section 5.02, second to reduce any
applicable administrative fees of the Plan, and third to reduce the Employing
Company contributions.

       

      (e)           Distribution.  A
Participant’s Employer Contribution Accounts shall be distributable only in
accordance with the provisions of Articles VII and VIII governing Employer
Contribution Accounts; provided that a Participant’s Matching Contribution
Account shall be distributed as required pursuant to Section 3.03.

       

      (f)           Status and Use of
Contributions.  All contributions made by the Employing
Companies to the Trust shall be irrevocable and shall be used solely to pay
benefits under the Plan or to defray the expenses of administering the Plan,
except as otherwise provided in Section 15.04.

       

      (g)           No Employee Contributions
Required.  Except to the extent of electing Pre-tax
Contributions pursuant to Section 3.02 as a condition of receiving Matching
Contributions and Qualified Matching Contributions pursuant to Section 3.01.1,
Participants shall not be required to make contributions to the
Trust.

       

      (h)           No Profits
Required.  The Employing Companies shall make their
contributions under the Plan without regard to current or accumulated earnings
and profits for the taxable year or years ending with or within the Plan
Year.

       

      
        
          
          

        

        
          25

          
            

          

        

        
          
          

        

      

       

      (i)           Deductibility.  No
Employing Company shall make a contribution unless it is deductible under Code
Section 404 for the tax year in which such contribution was made.

       

      (j)           Company In-Kind
Contributions.  Company and Employing Company contributions may
be made in Company Stock, whether the Company or the Employing Company obtains
such Company Stock directly from the Company or purchases such Company Stock on
the open market, and the Trustee shall be required to accept such in-kind
contributions.

       

      (k)           Holding in Suspense
Account.  Notwithstanding anything herein to the contrary, at
the direction of the Plan Administrator or the Trustee, contributions to the
Trust Fund, forfeitures or other Plan assets shall be held in the Company
Suspense Account until such time as they are allocated and credited to the
account or accounts maintained on behalf of each Participant; provided that such
allocation and credit to Participants’ accounts shall be made no later than as
of the last day of the Plan Year. Notwithstanding the foregoing, effective
October 1, 1999, the Company Suspense Account is no longer maintained under the
Plan.

       

      3.02           Pre-tax
Contributions.  The Employing Companies shall contribute and
allocate to each Participant’s Pre-tax Contribution Account an amount equal to
the Pre-tax Contributions elected by the Participant pursuant to a compensation
reduction authorization agreement with the Employing Company as provided in
Section 3.02.1 and subject to the provisions of Section 3.02.2.

       

      (a)  3.02.1  Compensation Reduction
Authorization Agreements.  Any Participant desiring to
authorize Pre-tax Contributions to be made to the Trust by an Employing Company
must do so by filling out, signing and filing with the Plan Administrator a
compensation reduction authorization agreement on a form supplied by the Plan
Administrator. Notwithstanding the foregoing, effective October 1, 1999, any
Participant desiring to authorize Pre-tax Contributions to be made to the Trust
by an Employing Company must do so by completing a compensation reduction
authorization agreement via the telephone recordkeeping system and procedures
maintained by the Plan Administrator.

       

      
        
          
          

        

        
          26

          
            

          

        

        
          
          

        

      

       

      Any
Pre-tax Contributions authorized by a Participant will apply to a Participant’s
entire Compensation (except as limited in Section 3.02.2) and shall be funded by
payroll deductions against the Participant’s Compensation.

       

      3.02.2     
General Provisions
Applicable to Pre-tax Contributions.

       

      (a)           Maximum Amount of Pre-tax
Contributions. The maximum amount of Pit-tax Contributions made on behalf
of any Participant shall be subject to all of the following
limitations:

       

      (i)           no
Pre-tax Contributions shall be made on account of a Plan Year in excess of 15%
of the Participant’s Compensation for such Plan Year;

       

      (ii)           no
Pre-tax Contributions shall be made to the Trust for any Participant during any
calendar year in excess of $7,000 multiplied by the Adjustment Factor, or such
other amount contained in Code Section 402(g);

       

      (iii)           no
Pre-tax Contribution shall be made on account of any Plan Year which would cause
the Participant’s Annual Addition to exceed the maximum Annual Addition
permitted for such Plan Year pursuant to the provisions of Section 3.04 after
taking into account all Flat Contributions made on behalf of the Participant for
such Plan Year but prior to taking into account all Matching Contributions and
Voluntary Non-deductible Contributions made on behalf of or by the Participant
for such Plan Year.

       

      
        
          
          

        

        
          27

          
            

          

        

        
          
          

        

      

       

      (b)           Commencement of Pre-tax
Contributions.  Each Participant shall be eligible to elect a
level of Pre-tax Contributions effective as of his or her Entry Date or on any
subsequent January 1, April 1, July 1 or October 1; provided that each election
pursuant to this Subsection (b) and each modification pursuant to Subsection (c)
shall be in whole percentages only. Notwithstanding the foregoing, effective
October 1, 1999, each Participant may enter the Plan on the first day of the
month after meeting all eligibility requirements. If documentation is not
received by the required administrative time, the enrollment will be effective
as soon as administratively possible after documentation is
received.

       

      (c)           Modification and Termination
of Pre-tax Contributions.  A Participant’s election to commence
Pre-tax Contributions shall remain in effect until modified or
terminated.

       

      (i)           Modification by a
Participant.  A Participant may modify his or her compensation
reduction authorization agreement to increase or decrease the rate of Pre-Tax
Contributions made on his or her behalf effective on the first day of any
calendar quarter (or such other date or dates as established by the Plan
Administrator), but such Participant may terminate (decrease to 0%) his or her
election to have Pre-Tax Contributions made on his or her behalf effective as of
the first day of any calendar month; provided, however, that if a Participant so
terminates his or her Pre-Tax Contributions, he or she shall not be allowed
again to become a Participant until the first day of a calendar quarter which is
at least six (6) months following the effective date of such
termination.

       

      Notwithstanding
the foregoing, effective October 1, 1999, a Participant may modify, terminate or
resume his or her compensation reduction authorization agreement at any time.
The effective date is as soon as it is administratively possible. Written
confirmation of a change will be sent to the Participant.

       

      
        
          
          

        

        
          28

          
            

          

        

        
          
          

        

      

       

      (ii)           Modification by the Plan
Administrator.  The Plan Administrator may limit the amount of
Pre-Tax Contributions on behalf of any Participant who is a Highly Compensated
Employee in order to satisfy the provisions of Code Sections 401(k)(3)(A)(ii)
and 40l(m)(2).

       

      (d)           Distribution of Excess
Individual Pre-tax Contributions.

       

      (i)           In
General.  Notwithstanding any other provision of the Plan,
Excess Individual Pre-tax Contributions, plus any income and minus any losses
allocable thereto, shall be distributed no later than the April 15 immediately
following the year in which such Pre-tax Contributions were made, to
Participants to whose accounts Excess Individual Pre- tax Contributions were
allocated for the preceding calendar year. Excess Individual Pre-tax
Contributions shall be treated as Annual Additions under the Plan.

       

      (ii)           Requirements for Making a
Claim.  A Participant’s claim for distribution of Excess
Individual Pre-tax Contributions:

       

      (I)           shall
be in writing, or effective October 1, 1999 via appropriate electronic
medium;

       

      (II)           shall
be submitted to the Plan Administrator not later than the March 1 following the
calendar year for which Excess Individual Pre-tax Contributions have been
made;

       

      (III)           shall
specify the amount of the Participant’s Excess Individual Pre-tax Contributions
for the calendar year; and

       

      
        
          
          

        

        
          29

          
            

          

        

        
          
          

        

      

       

      (IV)           shall
be accompanied by the Participant’s written statement that if such amounts are
not distributed, then the Participant’s Excess Individual Pre- tax
Contributions, when added to amounts deferred under all other plans or
arrangements described in Code Sections 401(k), 408(k), or 403(b) in which he or
she participated will exceed the limit imposed on the Participant by Code
Section 402(g) for the year in which the Excess Individual Pre-tax Contributions
occurred.

       

      Notwithstanding
the above, not later than April 15 following the close of the calendar year for
which Excess Individual Pre-tax Contributions have been made, the Company may
notify the Plan Administrator on behalf of a Participant of any such Excess
Individual Pre-tax Contributions of which it is aware.

       

      (iii)           Determinations of Income or
Loss.  Any Excess Individual Pre-tax Contribution shall be
adjusted for income or loss before being distributed to the Participant. The
income or loss applicable to Excess Individual Pre-tax Contributions shall be
determined by multiplying the income or loss allocable to the Participant’s
Pre-tax Contribution Account for the Plan Year by a fraction:

       

      (I)           the
numerator of which is the Excess Individual Pre-tax Contributions made on behalf
of the Participant for the preceding Plan Year and

       

      (i)           General.  The
Employing Company shall not permit a Participant to defer an amount of
Compensation that would cause the Plan to not satisfy at least one of the
following tests in any Plan Year beginning on or after January
1,2000:

       

      (a)           The
Avenge Actual Pre-Tax Contribution Percentage for a Plan Year for the group of
Highly Compensated Employees shall not exceed the prior year’s Average Actual
Pre-Tax Contribution Percentage for all other eligible Employees who are
Nonhighly Compensated Employees for the prior Plan Year multiplied by 1.25;
or

       

      
        
          
          

        

        
          30

          
            

          

        

        
          
          

        

      

       

      (b)           The
Average Actual Pre-Tax Contribution Percentage for a Plan Year for the group of
Highly Compensated Employees shall not exceed the prior year’s Average Actual
Pre-Tax Contribution Percentage for all other eligible Employees who are
Nonhighly Compensated Employees for the prior Plan Year multiplied by 2.0,
provided that the Avenge Actual Pre-Tax Contribution Percentage for the group of
Highly Compensated Employees does not exceed the Average Actual Pre-Tax
Contribution Percentage of all other eligible Employees who are Nonhighly
Compensated Employees for the prior Plan Year by more than two (2) percentage
points.

       

      Any
adjustments to the Nonhighly Compensated Employee Average Actual Pre-tax
Contribution Percentage for the prior year will be made in accordance with
Notice 98-I and any superseding guidance.

       

      (g)           Average Actual Pre-tax
Contribution Percentage Test — General Provisions

       

      (i)           In
applying the foregoing limitations, an Employee is a Highly Compensated Employee
for a particular Plan Year if he or she meets the definition of a Highly
Compensated Employee in effect for that Plan Year. Similarly, an Employee is a
Nonhighly Compensated Employee for a particular Plan Year if he or she does not
meet the definition of a Highly Compensated Employee in effect for that Plan
Year.

       

      (ii)           If
any Qualified Non-Elective Contributions or Qualified Matching Contributions
made by any Employing Companies to any one or more Section 401(k) arrangements
referred to in Subsections (e) and (f) above are made pursuant to Section 3.01.3
or Section 3.01.4, qualify for, and are actually taken into account for purposes
of, determining a Participant’s Actual Pre-tax Contribution Percentage under
such arrangements, then such Qualified Non-Elective Contributions or Qualified
Matching Contributions shall be taken into account in applying the Average
Actual Pre-tax Contribution Percentage test and all other rules of this
Subsection (g).

       

      
        
          
          

        

        
          31

          
            

          

        

        
          
          

        

      

       

      (iii)           The
Actual Pre-Tax Contribution Percentage for any Employee who is a Highly
Compensated Employee for the Plan Year and who has Pre-Tax Contributions
allocated to his or her account under two or more plans of the Company, shall be
determined as if all such contributions were made under a single plan. If the
above plans have different plan years, all cash or deferred arrangements ending
with or within the same calendar year shall be treated as a single
arrangement.

       

      (iv)           In
the event that this Plan satisfies the requirements of Code Section 401(m), 401
(a)(4) or 410(b) only if aggregated with one or more other plans, or if one or
more other plans satisfy the requirements of Code Section 401(m), 401(a)(4) or
410(b) only if aggregated with this Plan, then this Section shall be applied by
determining the Actual Pre-tax Contribution Percentages of Employees as if all
such plans were a single plan. Plans may be aggregated in order to satisfy Code
Section 401(k) only if they have the same Plan Year and use the same Average
Actual Pre-tax Contribution Percentage testing method.

       

      (v)           The
Company shall maintain records sufficient to demonstrate satisfaction of the
Avenge Actual Pre-tax Contribution Percentage test. The determination and
treatment of the Actual Pie-tax Contribution Percentage amounts of any
Participant shall satisfy such other requirements as may be prescribed by the
Secretary of the Treasury.

       

      
        
          
          

        

        
          32

          
            

          

        

        
          
          

        

      

       

      (h)           Distribution
of Excess Aggregate Pre-tax Contributions.

       

      (i)           In
General.  Notwithstanding any other provisions of the Plan,
Excess Aggregate Pre-tax Contributions, plus any income and minus any loss
allocable thereto, shall be distributed to Participants who are Highly
Compensated Employees and to whose accounts Pre-tax Contributions (and, if
applicable, Qualified Non-Elective Contributions or Qualified Matching
Contributions referred to in Subsection (e) and (f) above) were allocated for a
Plan Year, and all of the required amounts shall be distributed within two and
one half (2 1⁄2) months after the end of such Plan Year; provided, however, that
if the Plan Administrator is unable to determine and distribute all of the
required amounts within such two-and-one-half- month period, then all of the
required amounts shall nevertheless be distributed by the last day of the Plan
Year which includes such two-and-one-half-month period. Excess Aggregate Pre-tax
Contributions shall be treated as Annual Additions under the Plan.

       

      (ii)           Determination of Required
Distributions.  Any distribution of Excess Aggregate Pre-tax
Contributions for a Plan Year shall be made to Participants who are Highly
Compensated Employees on the basis of the respective portions of the Excess
Aggregate Pre-tax Contributions attributable to each of such Participants as
determined by reducing the Pre- tax Contributions permitted on behalf of such
Participants in order of the Actual Pre-tax Contribution Percentages beginning
with the highest of such percentages. Excess Aggregate Pre-tax Contributions are
allocated to Highly Compensated Employees with the largest amount of Pre-tax
contributions taken into account in calculating the Average Actual Pre-tax
Contribution Percentage Test in the year for which the excess arose, beginning
with the Highly Compensated Employee with the largest amount of Pre-tax
contributions and continuing in descending order until all Excess Aggregate
Pre-tax Contributions have been allocated. For purposes of the preceding
sentence, the “largest amount” is determined after distribution of any Excess
Aggregate Pre-tax Contributions.

       

      
        
          
          

        

        
          33

          
            

          

        

        
          
          

        

      

       

      (iii)           Determination of Income or
Loss.  All Excess Aggregate Pre-tax Contributions shall be
adjusted for income or loss. The income or loss allocable to Excess Aggregate
Pre-tax Contributions shall be determined by multiplying the income or loss
applicable to the Participant’s Pre-tax Contribution Account for the Plan Year
by a fraction:

       

      (I)           the
numerator of which is the Excess Aggregate Pre-tax Contributions on behalf of
the Participant for the preceding Plan Year; and

       

      (II)           the
denominator of which is the account balance in the Participant’s Pre-tax
Contribution Account (plus, if applicable, the account balance in any Qualified
Non-Elective Contribution account or Qualified Matching Contribution account) on
the last day of the preceding Plan Year.

       

      (iv)           Sources for Distribution of
Excess Aggregate Pre-tax Contributions.  Excess Aggregate
Pre-tax Contributions shall be distributed as follows: first, they shall be
distributed from the Participant’s Pre-tax Contribution Account to the extent of
the balance in such account and from other such accounts of the Participant in
any other arrangements described in Code Section 401(k) maintained by an
Employing Company to the extent of such balances and, second as necessary, they
shall be distributed from any Qualified Non-Elective Contribution account or
Qualified Matching Contribution account (referred to in Subsection (e) and (f)
above) in such other 401(k) arrangements.

       

      (i)           Separate
Accounts.  A separate Pre-tax Contribution Account shall be
maintained for that portion of each Participant’s Accrued Benefit that is
attributable to Pre-tax Contributions. Each such separate account shall be
credited as of each Valuation Date with the Participant’s share of any
applicable contributions, income, gains, losses, distributions, expenses and
other charges and any other adjustments. Two separate sub-accounts shall be
established for, respectively, the amount of Pre-Tax Contributions, and all
other amounts, including income, gains, losses, distributions, expenses, and
other charges or other adjustments.

       

      
        
          
          

        

        
          34

          
            

          

        

        
          
          

        

      

       

      (j)           Vesting.  Pre-tax
Contributions shall be fully vested and non- forfeitable at all
times.

       

      (k)          Distribution.  A
Participant’s Pre-tax Contribution Account shall be distributable only in
accordance with the provisions of Articles VII and VIII governing Pre-tax
Contribution Accounts, provided that a Participant’s Pre-tax Contribution
Account shall be distributed as required pursuant to this Section
3.02.

       

      (l)           Deadline for Pre-tax
Contributions.  Pre-tax Contributions shall be contributed and
allocated to the Trust no later than the close of the Plan Year after the Plan
Year for which the Pre-tax Contributions are deemed to be made, or such other
time as may be provided in applicable Regulations under the Code.

       

      3.03           Employee
Contributions.  Not later than the time prescribed in Sections
3.03.1 or 3.03.2, as applicable, or such other time as may be provided in
applicable Treasury, Participants may make contributions to the Trust of such
types and in such amounts as are permitted by Sections 3.03.1 and
3.03.2.

       

       
3.03.1   Voluntary Non-deductible
Contributions.  Each Participant may make a Voluntary
Non-deductible Contribution to the Trust subject to the following provisions of
this Section.

       

      
        
          
          

        

        
          35

          
            

          

        

        
          
          

        

      

       

      (a)           Maximum Amount of Voluntary
Non-Deductible Contributions.  The maximum amount of Voluntary
Non-deductible Contributions made by any Participant shall be subject to all of
the following limitations:

       

      (i)           no
Voluntary Non-deductible Contributions shall be made on account of a Plan Year
in excess of the maximum allowed under paragraphs (c) - (f) of this Section
3.03.1 for such Plan Year;

       

      (ii)           no
Voluntary Non-deductible Contributions shall be made on account of any Plan Year
which would cause the Participant’s Annual Addition to exceed the maximum Annual
Addition permitted for such Plan Year pursuant to the provisions of Section 3.04
after taking into account all other types of contributions included in the
Participant’s Annual Addition for such Plan Year.

       

      (iii)           The
maximum amount of Voluntary Non-Deductible Contributions plus Pre-Tax
Contributions per Plan Year shall be limited to 15% of a Participant’s
Compensation for any Plan Year.

       

      (b)           Procedure for Making
Voluntary Non-deductible Contributions.  Each Participant may
make Voluntary Non-deductible Contributions in either (i) one or more lump sum
payments or (ii) a series of periodic payments to the Trust during a Plan Year;
provided that each such payment shall be at least $100 and shall be made in
accordance with any non discriminatory rules and procedures which the Plan
Administrator may impose from time to time.

       

      (c)           Average Actual 401(m)
Contribution Percentage Test — Plan Years Beginning On or Before January 1,
1999.

       

      
        
          
          

        

        
          36

          
            

          

        

        
          
          

        

      

       

      (i)           General.  The
Employing Company shall not permit a Participant to defer an amount of
Compensation that would cause the Plan to not satisfy at least one of the
following tests in any Plan Year beginning on or before January 1,
1999:

       

      (a)           The
Average Actual 401(m) Contribution Percentage for a Plan Year for the group of
Highly Compensated Employees shall not exceed the current year’s Average Actual
401(m) Contribution Percentage for all other eligible Employees who were
Nonhigbly Compensated Employees for the current Plan Year multiplied by 1.25;
or

       

      (b)           The
Average Actual 401(m) Contribution Percentage for a Plan Year for the group of
Highly Compensated Employees shall not exceed the current year’s Average Actual
401(m) Contribution Percentage for all other eligible Employees who were
Nonhighly Compensated Employees for the current Plan Year multiplied by 2.0,
provided that the Average Actual 401(m) Contribution Percentage for the group of
Highly Compensated Employees does not exceed the Average Actual 401(m)
Contribution Percentage for all other eligible Employees who were Nonhighly
Compensated employees for the current Plan Year by more than two (2) percentage
points.

       

      (d)           Average Actual 401(m)
Contribution Percentage Test — Plan Years Beginning On or After January 1,
2000.

       

      (i)           General.  The
Employing Company shall not permit a Participant to defer an amount of
Compensation that would cause the Plan to not satisfy at least one of the
following tests in any Plan Year beginning on or after January 1,
2000:

       

      (a)           The
Average Actual 401(m) Contribution Percentage for a Plan Year for the group of
Highly Compensated Employees shall not exceed the prior year’s Average Actual
401(m) Contribution Percentage for all other eligible Employees who are
Nonhighly Compensated Employees in the prior Plan Year multiplied by 1.25;
or

       

      
        
          
          

        

        
          37

          
            

          

        

        
          
          

        

      

       

      (b)           The
Average Actual 401(m) Contribution Percentage for a Plan Year for the group of
Highly Compensated Employees shall not exceed the prior year’s Average Actual
401(m) Contribution Percentage for all other eligible Employees who are
Nonhighly Compensated Employees in the prior Plan Year multiplied by 2.0,
provided that the Average Actual 401(m) Contribution Percentage for the group of
Highly Compensated Employees does not exceed the Average Actual 401(m)
Contribution Percentage for all other eligible Employees who are Nonhighly
Compensated employees in the prior Plan Year by more than two (2) percentage
points.

       

      Any
adjustments to the Nonhighly Compensated Employee Actual 401(m) Contribution
Percentage for the prior year will be made in accordance with Notice 98-1 and
any superseding guidance,

       

      (e)           Average Actual 401(m)
Contribution Percentage Test — General Provisions.

       

      (i)           In
applying the foregoing limitations, an Employee is a Highly Compensated Employee
for a particular Plan Year if he or she meets the definition of a Highly
Compensated Employee in effect for that Plan Year. Similarly, an Employee is a
Nonhighly Compensated Employee for a particular Plan Year if he or she does not
meet the definition of a Highly Compensated Employee in effect for that Plan
Year.

       

      (ii)           For
purposes of the Average Actual 401(m) Contribution Percentage test and the other
provisions of this Section 3.03.1, the Actual 401(m) Contribution Percentage for
any Participant who is a Highly Compensated Employee and who is eligible to make
Voluntary Non-deductible Contributions, or to have Matching Contributions
allocated to his or her account under two or more plans described in Code
Section 401(a) or arrangements described in Code Section 401(k), that are
maintained by one or more of the Employing Companies, shall be determined as if
the total of such Voluntary Non-deductible Contributions and Matching
Contributions was made under each such plan.

       

      
        
          
          

        

        
          38

          
            

          

        

        
          
          

        

      

       

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

       

      (iv)           The
Actual 401(m) Contribution Percentage for any Employee who is a Highly
Compensated Employee for the Plan Year and who has matching contributions
allocated to his account under two or more plans of the Company shall be
determined as if all such contributions were made under a single plan. If the
above plans have different plan years, the plans ending with or within the same
calendar year shall be treated as a single plan.


      (v)           In
the event that this Plan satisfies the requirements of Code Section 401(m),
401(a)(4) or 410(b) only if aggregated with one or more other plans, or if one
or more other plans satisfy the requirements of Code Section 401(m), 40l(a)(4)
or 410(b) only if aggregated with this Plan, then this Section shall be applied
by determining the Actual 401(m) Contribution Percentages of Employees as if all
such plans were a single plan. Plans may be aggregated in order to satisfy Code
Section 401(m) only if they have the same Plan Year and use the same Average
Actual 401(m) Contribution Percentage testing method.

       

      
        
          
          

        

        
          39

          
            

          

        

        
          
          

        

      

       

      (vi)           The
determination and treatment of the Actual 401(m) Contribution Percentage of any
Employee shall satisfy such other requirements as may be prescribed by the
Secretary of the Treasury.

       

      (vii)           The
Company shall maintain records sufficient to demonstrate satisfaction of the
Average Actual 401(m) Contribution Percentage test.

       

      (f)           Forfeiture or Distribution
of Excess Aggregate 401(m) Contributions.

       

      (i)           In
General.  Notwithstanding any other provisions of this Plan,
Excess Aggregate 401(m) Contributions, plus any income and minus any loss
allocable thereto, (I) shall be forfeited by, if forfeitable, or (II) if not
forfeitable shall be distributed to Participants who are Highly Compensated
Employees and to whose accounts Voluntary Non- deductible Contributions or
Matching Contributions were allocated for a Plan Year, and all of the required
amounts shall be forfeited or distributed within two and one half (2 1/2) months
of the next Plan Year; provided, however, that if the Plan Administrator is
unable to determine and distribute all of the required amounts within such two
and one half month period, then all the required amounts shall be distributed by
the last day of such Plan Year. Excess Aggregate 401(m) Contributions shall be
treated as Annual Additions under the Plan.

       

      (ii)           Determination of Required
Forfeitures or Distributions.  Any forfeiture or distribution
of Excess Aggregate 401(m) Contributions for a Plan Year shall be made by or to
Participants who are Highly Compensated Employees on the basis of the respective
portions of the Excess Aggregate 401(m) Contributions attributable to each of
such Participants as determined by reducing, first, the Voluntary Non-deductible
Contributions permitted from such Participants and, second, the Matching
Contributions permitted on behalf of such Participants in order of the Actual
401(m) Contribution Percentages beginning with the highest of such percentages.
Excess Aggregate 401(m) Contributions are allocated to the Highly Compensated
Employees with the largest amount taken into account in calculating the Average
Actual 401(m) Contribution Percentage Test for the year in which the excess
arose, beginning with the Highly Compensated Employee with the largest such
amount and continuing in descending order until all Excess Aggregate 401(m)
Contributions have been allocated.

       

      
        
          
          

        

        
          40

          
            

          

        

        
          
          

        

      

       

      (iii)           Determination of Income or
Loss.  All Excess Aggregate 401(m) Contributions shall be
adjusted for income or loss. The income or loss allocable to Excess Aggregate
401(m) Contributions shall be determined by multiplying the income or loss
allocable to the Participant’s Voluntary Non-deductible Contribution Account and
to his or her Matching Contribution Account for the Plan Year by a fraction: (1)
the numerator of which is the Excess Aggregate 401(m) Contributions on behalf of
the Participant for the preceding Plan Year, and

       

      (I)           the
denominator of which is the sum of the Participant’s account balances in his or
her Voluntary Non-deductible Contribution Account and in his or her Matching
Contribution Account on the last day of the preceding Plan Year.

       

      (iv)           Forfeitures.  Any
forfeitures of Excess Aggregate 401(m) Contributions shall be applied
consistently with the procedures described in clause (d) of Section 3.01.5
hereof.

       

      (v)           Sources for Distribution of
Excess Aggregate 401(m) Contributions.  Excess Aggregate 401(m)
Contributions shall be distributed or forfeited as follows: first, they shall be
distributed from the Participant’s Voluntary Non-deductible Contribution Account
to the extent of the balance in such account and, second as necessary, they
shall be forfeited if otherwise forfeitable under the terms of the Plan (or, if
not forfeitable, distributed) from the Participant’s Matching Contribution
Account.

       

      
        
          
          

        

        
          41

          
            

          

        

        
          
          

        

      

       

      (vi)           Ordering of Pre-tax
Contribution and 401(m) Contribution Determinations.  The
determination of Excess Aggregate 401(m) Contributions shall be made after first
determining the Excess Individual Pre-tax Contributions and then determining the
Excess Aggregate Pre-tax Contributions.

       

      3.03.2    
Rollover
Contributions.  With the approval of the Plan Administrator to
be exercised in a non-discriminatory manner and without regard to any limitation
on contributions contained in the Plan, the Trust may receive as a Rollover
Contribution any amounts received by the Trustee from the trustee of another
plan on behalf of a Participant or amounts received by a Participant from
another qualified retirement plan, either directly or through the medium of an
Individual Retirement Account eligible to hold such distribution; subject to the
requirements (a) though (c) of this Section. Notwithstanding the foregoing,
effective September 11, 2000, with the approval of the Plan Administrator to be
exercised in a non-discriminatory manner and without regard to any limitation on
contributions contained in the Plan, the Trust may receive as a Rollover
Contribution any amounts received by the Trustee from the trustee of another
plan on behalf of an Employee or amounts received by an Employee from another
qualified retirement plan, either directly or through the medium of an
Individual Retirement Account eligible to hold such distribution; subject to the
requirements (a) though (c) of this Section.

       

      (g)           Protection of the
Plan.  No Rollover contribution may be received if the Plan
Administrator determines that it may adversely affect the qualified tax status
of the Plan or of the Trust.

       

      
        
          
          

        

        
          42

          
            

          

        

        
          
          

        

      

       

      (h)           Eligibility for Rollover
Treatment.  No rollover contribution may be received unless the
transfer to the Trust is made within sixty (60) days of the Participant’s
receipt of the rollover distribution and the Plan Administrator has first
determined that the Participant is allowed under the Code to make a Rollover
contribution to the Trust. The Plan Administrator may rely on information
provided by the Participant in making a determination on whether a Rollover
contribution may be made. Notwithstanding the foregoing, effective September 11,
2000, no rollover contribution may be received unless the transfer to the Trust
is made within sixty (60) days of the Employee’s receipt of the rollover
distribution and the Plan Administrator has first determined that the Employee
is allowed under the Code to make a Rollover contribution to the Trust. The Plan
Administrator may rely on information provided by the Employee in making a
determination on whether a Rollover contribution may be made.

       

      (i)           Service
Requirement.  For purposes of this Section 3.03.2, an Employee
shall be treated as a Participant upon completion of the applicable Service
requirement in Section 2.01(b) regardless of whether the Employee has applied
pursuant to Section 2.01(a) to become a Participant or has authorized Pre-tax
contributions to be made on his or her behalf pursuant to a compensation
reduction authorization agreement. Prior to the completion of the applicable
Service requirement, no Employee shall have the right to make a Rollover
contribution pursuant to this Section 3.03.2. Notwithstanding the foregoing,
effective September 11, 2000, this Section 3.03.2(c) has been
deleted.

       

      3.03.3   
 General
Provisions Applicable to Employee Contributions.

       

      (j)           Separate
Accounts.  Separate accounts within each Participant’s Employee
Contribution Accounts shall be maintained for those portions of the
Participant’s Accrued Benefit that are attributable to (i) Voluntary
Non-deductible Contributions and (ii) Rollover Contributions. Each such separate
account shall be credited as of each Valuation Date with the Participant’s share
of any applicable contributions, income, gains, losses, distributions, expenses
and other charges and any other adjustments.

       

      
        
          
          

        

        
          43

          
            

          

        

        
          
          

        

      

       

      (k)           Vesting.  All
(i) Voluntary Non-deductible Contributions and (ii) Rollover Contributions shall
be fully vested and non-forfeitable at all times.

       

      (l)           Distribution.  A
Participant’s Employee Contribution Accounts shall be distributable only in
accordance with the provisions of Articles VII and VIII governing Employee
Contribution Accounts; provided that a Participant’s Voluntary Non-deductible
Contribution Account shall be distributed as required pursuant to Section
3.03.1.

       

      3.04           Limitations on Annual
Additions.

       

       3.04.1  In
General.  In no event shall the Annual Addition to all of a
Participant’s accounts for any Limitation Year exceed the lesser of $30,000
(multiplied by any Adjustment Factor in effect for the Limitation Year) or 25%
of such Participant’s total Section 415 Compensation.


      If a
short Limitation Year is created because of an amendment changing the Limitation
Year to a different twelve-consecutive-month period, the maximum permissible
amount will not exceed the dollar amount determined in the paragraph above
multiplied by the following fraction:

      Number of months in the
short Limitation Year

       

      12

       

       3.04.2  Multiple Defined
Contribution Plans.  If a Participant is also a participant in
one or more additional qualified defined contribution plans or welfare benefit
funds (as defined in Code Section 419(e)) maintained by any Employing Company
(or its affiliates within the meaning of Code Sections 415(h) or 414(m)), the
Annual Addition made to the Participant’s account under this Plan shall be
limited so that the sum of the Annual Additions made to the Participant’s
accounts under all such plans shall not exceed the limitation set forth in
Section 3.04.1. Amounts allocated to an individual medical account as defined in
Code Section 415(1)(1), which is part of a defined benefit plan maintained by an
Employing Company, are treated as Annual Additions to a defined contribution
plan. Also, amounts derived from contributions which are attributable to
post-retirement medical benefits allocated to the separate account of a key
employee as defined in Code Section 419A(d)(3), under a welfare benefit fund as
defined in Code Section 419(e), which is maintained by an Employing Company, are
treated as Annual Additions to a defined contribution plan.

       

      
        
          
          

        

        
          44

          
            

          

        

        
          
          

        

      

       

      3.04.3    
Combination of Defined
Contribution and Defined Benefit Plans.  If a Participant in
this Plan is also a participant in a defined benefit plan or plans maintained by
any Employing Company (or its affiliates within the meaning of Code Sections
415(h) or 414(m)), the Plan Administrator shall first limit the “Annual
Benefits” accrued under such defined benefit plan so that the sum of the
following fractions may not exceed 1.0 for any Limitation Year:

      
         

        (a)          
Defined Benefit Plan
Fraction.  A fraction:

      

      
        
        

      

       

      (i)           the
numerator of which is the projected annual benefit of the Participant under the
defined benefit plan or plans and

       

      (ii)           the
denominator of which is the lesser of (1) of 1.25 multiplied by the dollar
limitation in effect for such Plan Year under Code Section 415(b)(1)(A) as
adjusted by Code Section 415(d); or (2) 1.4 multiplied by one-hundred percent
(100%) of the Participant’s average monthly Compensation during the three
consecutive years when the total Compensation paid to him or her was highest,
including any adjustment under Code Section 415(b). Notwithstanding the above,
if the Participant was a participant as of the first day of the first Limitation
Year beginning after December 31, 1986, in one or more defined benefit plans
maintained by the Company which were in existence on May 6, 1986, the
denominator of this fraction will not be less than 125 percent of the sum of the
annual benefits under such plans which the Participant had accrued as of the
close of the last Limitation Year beginning before January 1, 1987, disregarding
any changes in the terms and conditions of the plan after May 5, 1986. The
preceding sentence applies only if the defined benefit plans individually and in
the aggregate satisfied the requirements of Section 415 for all Limitation Years
beginning before January 1, 1987.

       

      
        
          
          

        

        
          45

          
            

          

        

        
          
          

        

      

       

      (b)           Defined Contribution Plan
Fraction.  The defined contribution plan fraction for any Plan
Year is a fraction the numerator of which is the sum of the Annual Additions to
the Participant’s Accrued Benefit as of the close of the Plan Year, (including
the Annual Additions attributable to the Participant’s nondeductible employee
contributions to all defined benefit plans, whether or not terminated,
maintained by the Company, and the Annual Additions attributable to all welfare
benefit funds, as defined in Code Section 419(e), and individual medical
accounts, as defined in Code Section 415(l)(2), maintained by the Company) and
the denominator of which is the sum of the applicable maximum amounts of Annual
Additions which could have been made under Code Section 415(c) for such Plan
Year and for all prior years of such Participant’s employment. If the employee
was a

      (i)           the
numerator of which is the sum of the Annual Additions to the Participant’s
Accrued Benefit as of the close of the Plan Year, (including the Annual
Additions attributable to the Participant’s nondeductible employee contributions
to all defined benefit plans, whether or not terminated, maintained by the
Company, and the Annual Additions attributable to all welfare benefit funds, as
defined in Code Section 419(e), and individual medical accounts, as defined in
Code Section 415(l)(2), maintained by the Company) and

       

      
        
          
          

        

        
          46

          
            

          

        

        
          
          

        

      

       

      (ii)           the
denominator of which is the sum of the applicable maximum amounts of Annual
Additions which could have been made under Code Section 415(c) for such Plan
Year and for all prior years of such Participant’s employment.

       

      If the
employee was a Participant as of the end of the first day of the first
Limitation Year beginning after December 31, 1986, in one or more defined
contribution plans maintained by the Company which were in existence on May 6,
1986, the numerator of this fraction will be adjusted if the sum of this
fraction and the defined benefit fraction would otherwise exceed 1.0, under the
terms of this Plan. Under the adjustment, an amount equal to the product of (1)
of the excess of the sum of the fractions over 1.0 times (2) the denominator of
this fraction, will be permanently subtracted from the numerator of this
fraction. The adjustment is calculated using the fractions as they would be
computed as of the end of the last Limitation Year beginning before January 1,
1987, and disregarding any changes in the

       

      Effective
with the first Limitation Year beginning after December 31, 1999, in light of
the repeal of Code Section 415(e) as of that date, the combined plan limit set
forth in this Section shall no longer be in effect.

       

      3.04.4   
 Protective
Procedures.  The following procedures shall be applied to
determine whether the limitations set forth above may be exceeded by the
allocation of contributions to a Participant’s accounts and, if so, to avoid
exceeding the limitations.

       

      (c)           Estimation.  Prior
to determining the Participant’s actual Section 415 Compensation for the
Limitation Year, the Plan Administrator may determine the maximum permissible
Annual Addition for a Participant on the basis of a reasonable estimation of the
Participant’s Section 415 Compensation for the Limitation Year, uniformly
determined for all Participants similarly situated.

       

      
        
          
          

        

        
          47

          
            

          

        

        
          
          

        

      

       

      (d)           Determination.  As
soon as is administratively feasible after the end of the Limitation Year, each
Participant’s maximum permissible Annual Addition for the Limitation Year shall
be determined on the basis of the Participant’s actual Section 415 Compensation
for the Limitation Year.

       

      (e)           Disposition of
Excess.  If there is an allocation in excess of such amount,
the excess shall be disposed of as follows:

       

      (i)           Any
Voluntary Non-deductible Contributions shall be returned to the
Participant;

       

      (ii)           If
after the application of step (i) an excess amount still exists, and the
Participant is covered by the Plan at the end of the Limitation Year, the excess
amount in the Participant’s accounts shall be used to reduce Employing Company
contributions (including any allocation of forfeitures) and Pre-tax
Contributions for such Participant in the next Limitation Year, and each
succeeding Limitation Year if necessary.

       

      (iii)           If
after the application of step (i) an excess amount still exists, and the
Participant is not covered by the Plan at the end of the Limitation Year, the
excess amount shall be held unallocated in the Company Suspense Account. The
Company Suspense Account shall be applied to reduce future Employing Company
contributions (including allocation of any forfeitures) and Pre-ta Contributions
for all remaining Participants in the next Limitation Year, and each succeeding
Limitation Year if necessary. Notwithstanding the foregoing, effective October
1, 1999, if after the application of step (i) an excess amount still exists, and
the Participant is not covered by the Plan at the end of the Limitation Year,
the excess amount shall be held in an unallocated suspense account pursuant to
Treasury Regulation Section 1.41 5-(6)(b)(6)(i). The suspense account maintained
pursuant Treasury Regulation Section 1.41 5-(6)(b)(6)(i) shall be applied to
reduce future Employing Company contributions (including allocation of any
forfeitures) and Pre-tax Contributions for all remaining Participants in the
next Limitation Year, and each succeeding Limitation Year if
necessary.

       

      
        
          
          

        

        
          48

          
            

          

        

        
          
          

        

      

       

      (iv)           If
Employing Company contributions are reduced for a Limitation Year pursuant to
steps (ii) or (iii), Matching Contributions shall be reduced before Pre-tax
Contributions, but Flat Contributions shall be reduced after Pre-tax
Contributions.

       

      (f)           No Allocation of Investment
Gains and Losses.  The Company Suspense Account shall not
participate in the allocation of the Trust’s investment gains and losses for any
Plan Year; provided, however, that dividends paid on Company Stock held in the
Company Suspense Account shall be credited to the Company Suspense Account.
Notwithstanding the foregoing, effective October 1, 1999, the suspense account
maintained pursuant to Treasury Regulation Section 1.415-(6)(b)(6)(i) shall not
participate in the allocation of the Trust’s investment gains and loses for any
Plan Year.

       

      3.05           Multiple Use
Test.

       

       3.05.1  Plan Years Beginning On or
Before January 1, 1999.  If this Plan:  (a) does not
satisfy the test set forth in Sections 3.02.2(e) and 302.2(f); (b) does not
satisfy the test set forth in Sections 3.03.1(c) and 303.1(d); and (c) the sum
of the Average Actual Pre-tax Contribution Percentage for Participants who are
Highly Compensated Employees and the Average Actual 401(m) Contribution
Percentage for Participants who are Highly Compensated Employees exceeds
Aggregate Limit, as defined below, then the Actual 401(m) Contribution
Percentage of those Highly Compensated Employees will be reduced in the manner
described in Section 3.03.1(d) of the Plan so that the limit is not exceeded.
The amount by which each Highly Compensated Employee’s Actual 401(m)
Contribution Percentage is reduced shall be treated as an Excess Aggregate
401(m) Contribution. The Average Actual Pre-Tax Contribution Percentage and
Average Actual 401(m) Contribution Percentage of the Highly Compensated
Employees are determined after any corrections required to meet the requirements
of Sections 3.02 and 3.03, respectively, and are deemed to be the maximum
permitted under such Sections for the Plan Year. Multiple use of the Aggregate
Limit as described in this paragraph does not occur if either the Average Actual
Pre-Tax Contribution Percentage or the Average Actual 401(m) Contribution
Percentage of the Highly Compensated Employees does not exceed 1.25 multiplied
by the Average Actual Pre-Tax Contribution Percentage and Average Actual 401(m)
Contribution Percentage, respectively, of the Nonhighly Compensated Employees.
The “Aggregate Limit” shall mean the sum of (i) 125 percent of the greater of
the Actual Pre-Tax Contribution Percentage of the Nonhighly Compensated
Employees for the current Plan Year or the Average Actual 401(m) Contribution
Percentage of Nonhighly Compensated Employees under the Plan subject to Code
Section 401(m) for the current Plan Year; and (ii) the lesser of 200 percent or
2 plus the lesser of such Average Actual Pre-Tax Contribution Percentage or
Average Actual 401(m) Contribution Percentage. “Lesser” is substituted for
“greater” in (i) in the immediately preceding sentence, and “greater” is
substituted for “lesser” after “2 plus the” in (ii) in the immediately preceding
sentence if it would result in a larger Aggregate Limit.

       

      
        
          
          

        

        
          49

          
            

          

        

        
          
          

        

      

       

      3.05.2  Plan Years Beginning On or
After January 1, 2000.  If this Plan:  (a) does not
satisfy the test set forth in Sections 3.02.2(e) and 302.2(f); (b) does not
satisfy the test set forth in Sections 3.03.1(c) and 3.03.1(d) and (c) the sum
of the Average Actual Pre-tax Contribution Percentage for Participants who are
Highly Compensated Employees and the Average Actual 401(m) Contribution
Percentage for Participants who are Highly Compensated Employees exceeds
Aggregate Limit, as defined below, then the Actual 401(m) Contribution
Percentage of those Highly Compensated Employees will be reduced in the manner
described in Section 3.03.1(d) of the Plan so that the limit is not exceeded.
The amount by which each Highly Compensated Employee’s Actual 401(m)
Contribution Percentage is reduced shall be treated as an Excess Aggregate
Contribution. The Average Actual Pre-Tax Contribution Percentage and Average
Actual 401(m) Contribution Percentage of the Highly Compensated Employees are
determined after any corrections required to meet the requirements of Sections
3.02 and 3.03, respectively, and are deemed to be the maximum permitted under
such Sections for the Plan Year. Multiple use of the Aggregate Limit as
described in this paragraph does not occur if either the Average Actual Pre-Tax
Contribution Percentage or the Average Actual 401(m) Contribution Percentage of
the Highly Compensated Employees does not exceed 1.25 multiplied by the Average
Actual Pre-Tax Contribution Percentage and Average Actual 401(m) Contribution
Percentage, respectively, of the Nonhighly Compensated Employees. The “Aggregate
Limit” shall mean the sum of (i) 125 percent of the greater of the Average
Actual Pre-Tax Contribution Percentage of the Nonhighly Compensated Employees
for the prior Plan Year or the Average Actual 401(m) Contribution Percentage of
Nonhighly Compensated Employees under the Plan subject to Code Section 401(m)
for the Plan Year beginning with or within the prior Plan Year; and (ii) the
lesser of 200 percent or 2 plus the lesser of such Average Actual Pre-Tax
Contribution Percentage or Average Actual 401(m) Contribution Percentage.
“Lesser” is substituted for “greater” in (i) in the immediately preceding
sentence, and “greater” is substituted for “lesser” after “2 plus the” in (ii)
in the immediately preceding sentence if it would result in a larger Aggregate
Limit.

       

      
        
          
          

        

        
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      ARTICLE
IV.

      BENEFITS

       

      4.01           Retirement
Benefits.

       

       4.01.1  Right to a
Benefit.  Upon reaching his or her Normal Retirement Date, a
Participant shall be entitled to receive a non-forfeitable retirement benefit
equal to his or her Accrued Benefit as determined in accordance with Article VI,
payable in the form provided in Article VII, and commencing on his or her
Benefit Commencement Date as determined in Article VIII.

       

      4.02           Postponed
Retirement.  If a Participant remains in an Employing Company’s
Service after his or her Normal Retirement Date, the payment of his or her
retirement benefit shall be deferred until his or her Postponed Retirement Date
(but subject to the provisions of Article VIII) and until then the Participant
shall continue to participate and have all the rights under the Plan that he or
she would have if he or she had not reached his or her Normal Retirement Date.
On the Participant’s Postponed Retirement Date, he or she shall be entitled to
benefits equal to his or her Accrued Benefit as determined in accordance with
Article VI, payable in the form provided in Article VII, and commencing on his
or her Benefit Commencement Date as determined in Article VIII.

       

      4.03           Disability
Benefits.  If a Participant becomes Disabled, and his or her
Service with the Employing Companies is terminated prior to his or her
retirement, death or other termination of employment, then he or she shall be
entitled to receive his or her Accrued Benefit as determined in accordance with
Article VI, payable in the form provided in Article VII, and commencing on his
or her Benefit-Commencement Date as determined in Article VIII.

       

      4.04           Death
Benefits.

       

      
        
          
          

        

        
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      4.04.1  Right to a Death
Benefit.  If a Participant dies prior to his or her retirement,
or other termination of service with the Employing Companies, then his or her
designated Beneficiary shall be entitled to receive his or her Accrued Benefit,
as determined in accordance with Article VI, payable in the form provided in
Article VII, and commencing on the Benefit Commencement Date as determined in
Article VIII.

       

      4.04.2  Limitation on Rights of a
Married Participant’s Beneficiary.  The right of a
Participant’s designated Beneficiary to receive death benefits pursuant to this
Section 4.03 shall be subject to any rights of the Participant’s surviving
Spouse if the requirements of Section 7.03 have not been met with respect to
such designated Beneficiary.

       

      4.04.3  No
Beneficiary.  If no Beneficiary has been designated, or the
designated Beneficiary and any Contingent Beneficiaries shall not survive the
Participant, distribution shall be made to the Participant’s surviving Spouse
or, if there is none, to his or her estate.

       

      4.05           Termination
Benefits.  If a Participant terminates his or her Service with
the Employing Companies for any reason other than retirement, Disability or
death, then he or she shall be entitled to a termination benefit equal to his or
her Vested Benefit, as determined in accordance with Articles V and VI, payable
in the form provided in Article VII, and commencing on his or her Benefit
Commencement Date as determined in Article VIII.

       

      ARTICLE
V.

      VESTING

       

      5.01           Vesting
Percentage.  The Vesting Percentage of a Participant who is in
the Service of an Employing Company in his or her Matching Contribution Account
and his or her Flat Contribution Account upon (a) the later of (i) his or her
65th birthday and (ii) the fifth anniversary of his or her initial Entry Date,
(b) Disability, or (c) death, shall be 100%. If a Participant’s Service is
terminated prior to the earliest of the time determined under the preceding
sentence, his or her Vesting Percentage shall be determined as
follows:

       

      
        
          
          

        

        
          52

          
            

          

        

        
          
          

        

      

       

      
        
          
            
              
                	
                        Years of Vesting Services

                      	
                        Vesting Percentage

                      	
                        Forfeited Percentage

                      
	
                        Less
      than 1 Year

                      	
                        0

                      	
                        100

                      
	
                        1
      Year but less than 2

                      	
                        20

                      	
                        80

                      
	
                        2
      Years but less than 3

                      	
                        40

                      	
                        60

                      
	
                        3
      Years but less than 4

                      	
                        60

                      	
                        40

                      
	
                        4
      Years but less than 5

                      	
                        80

                      	
                        20

                      
	
                        5
      Years or More

                      	
                        100

                      	
                        0

                      


              

            

          

        

      

       

      5.02         Forfeiture.

       

      5.02.1  In
General.  The forfeited percentage (determined from the table
in Section 5.01) of a former Participant’s Employer Contribution Accounts shall
be held until the earlier of (a) payment to the Participant of his or her Vested
Benefit or (b) after the end of a calendar quarter following a termination of
Service and then it shall be forfeited and dealt with as provided in Article
III. Except if a forfeiture must be restored pursuant to Section 5.05, a
forfeiture under the provisions of this Section 5.02 shall be
permanent.

       

      5.02.2  Amounts Not
Forfeited.  Any balances remaining in a former Participant’s
Employer Contribution Accounts after a forfeiture pursuant to Section 5.02.1
shall be non-forfeitable and the former Participant’s Vested Benefit shall
include such non-forfeitable balances.

       

      5.02.3  Accounting After
Reemployment.  If a former Participant is reemployed by an
Employing Company, any non-forfeitable balances held in the Trust pursuant to
Section 5.02.2 shall be held as sub-accounts in the Participant’s Employer
Contribution Accounts until the Participant’s Vesting Percentage equals 100%, at
which time such sub- accounts shall be combined with the Participant’s regular
Employer Contribution Accounts.

       

      
        
          
          

        

        
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      5.03           Reemployment After
Termination of Service.  If a former Participant is reemployed
by an Employing Company and:

       

      (a)           no
portion of the Participant’s Vested Benefit has been paid to such Participant in
accordance with Section 7.01, the balance in his or her Employer Contribution
Accounts shall be determined in accordance with Section 5.02 and his or her
Vesting Percentage shall be based upon the number of his or her Years of Vesting
Service after applying Section 5.06;

       

      (b)           any
portion of the Participant’s Vested Benefit has been paid to such Participant in
accordance with Section 7.01 and such Participant has repaid such portion in
accordance with Section 5.04, the balance in his or her Employer Contribution
Accounts shall be determined in accordance with Section 5.02 and 5.05, and his
or her Vesting Percentage shall be based upon the number of his or her Years of
Vesting Service after applying Section 5.06; or

       

      (c)           any
portion of the Participant’s Vested Benefit has been paid to such Participant in
accordance with Section 7.01 and such Participant has not repaid such portion in
accordance with Section 5.04, the balance in his or her Employer Contribution
Accounts shall be determined in accordance with Section 5.02, and his or her
Vesting Percentage shall be based upon the number of his or her Years of Vesting
Service after applying Section 5.06.

       

      5.04           Repayment of Vested
Benefits.  If at or after a Participant’s prior separation from
Service, he or she received all or any portion of his or her Vested Benefit, he
or she may, if he or she returns to Service, repay the full amount received
before the earlier of (a) five (5) years from his or her Reemployment
Commencement Date or (b) his or her number of consecutive One Year Breaks in
Service equals five (5).

       

      5.05           Restoration of
Forfeitures.

       

      
        
          
          

        

        
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      5.05.1  In
General.  A former Participant who has forfeited a portion of
his or her Employer Contribution Accounts pursuant to Section 5.02 shall have
the forfeited amount restored (without interest or other adjustment for Trust
income, gains or losses during the period of forfeiture) to his or her Employer
Contribution Accounts if he or she meets all of the following
requirements:

       

      (a)           the
former Participant is reemployed by an Employing Company before incurring five
(5) consecutive One-Year Breaks in Service;

       

      (b)           the
former Participant received a distribution of any portion of his or her Vested
Benefit; and

       

      (c)           the
former Participant repays in accordance with the provisions of Section 5.04 such
portion of his or her Vested Benefit that he or she received. No forfeiture
shall be restored to any Participant who does not meet all of the foregoing
requirements.

       

      5.05.2  Accounting for Restored
Forfeitures.  Any forfeiture restored pursuant to Section
5.05.1 shall be credited to sub-accounts in the Participant’s Employer
Contribution Accounts, and the Participant’s Vested Benefit attributable to such
sub-accounts at any relevant time shall equal an amount (X) determined by the
following formula:

       

      X           =P(AB+(R
x D)) - (R x D)

       

      For
purposes of applying this Formula:

       

      P is the
Participant’s Vesting Percentage determined pursuant to Section 5.01 at the
relevant time.

       

      D is the
amount of the Participant’s Vested Benefit originally distributed to the
Participant.

       

      
        
          
          

        

        
          55

          
            

          

        

        
          
          

        

      

       

      R is the
ratio of (a) the balance of the Participant’s Employer Contribution Accounts at
the relevant time to (b) the balance of his or her Employer Contribution
Accounts after the original distribution of his or her Vested
Benefits.

       

      AB is the
balance of the Participant’s Employer Contribution Accounts at the relevant
time.

       

      The
relevant time is the time at which, under the Plan, the Participant’s Vesting
Percentage in his or her Employer Contribution Accounts cannot
increase.

       

      5.05.3  Source of Restored
Forfeitures.  Any forfeitures restored pursuant to Section
5.05.1 shall be restored from amounts forfeited pursuant to Section 5.02 during
the Plan Year in which the restoration is to be made. Notwithstanding any
provisions of the Plan to the contrary, if the aggregate amount to be so
restored to the Employer Contribution Accounts of Participants exceeds the
amount of such forfeitures, the Employing Companies shall make a contribution to
the Plan in the amount of such excess. Any such contribution shall not be
allocated under Article III.

       

      5.06           Years of Vesting Service and
Break-in-Service Rules.  All Years of Vesting Service shall be
taken into account for the purpose of determining a Participant’s Vesting
Percentage except as follows. Notwithstanding Section 5.03:

       

      (a)           Years
of Vesting Service credited to an Employee before a One-Year Break in Service
shall be disregarded until and unless he or she has a Reemployment Commencement
Date and he or she has completed one Year of Vesting Service after the One- Year
Break in Service measured from his or her Reemployment Commencement
Date.

       

      
        
          
          

        

        
          56

          
            

          

        

        
          
          

        

      

       

      (b)           As
of the Restatement Date, if a Participant has no Vested Benefit, Years of
Vesting Service before a period of consecutive One Year Breaks in Service shall
be disregarded if the number of consecutive One-Year Breaks in Service equals or
exceeds five (5).

       

      (c)           Years
of Vesting Service credited to an Employee after five (5) consecutive One-Year
Breaks in Service shall be disregarded in determining his or her Vesting
Percentage in the balance of his or her Employer Contribution Accounts that was
credited prior to the Service Break.

       

      ARTICLE
VI.

      CALCULATION OF BENEFITS AND
ACCOUNTS

       

      6.01           Calculation of
Benefits.  For purposes of calculating the amount of benefits
payable under the Plan, the Vested Benefit and Accrued Benefit of a Participant,
former Participant or Beneficiary shall be determined as of the latest Valuation
Date coinciding with or next prior to payment of the benefit.

       

      6.02           Calculation of
Accounts.

       

      (a)           Any
contribution or income, gain, loss, expense or other credit or charge shall be
credited to or charged against the Participant’s accounts on the earliest
Valuation Date coinciding with or next following the realization or incurrence
of the item. Any benefit payment shall be charged against the Participant’s
accounts as of the day after the Valuation Date utilized under Section 6.01 to
determine the amount of the benefit payment.

       

      (b)           If,
as allowable under the Plan and the Trust Agreement, the Plan Administrator
authorizes the establishment of optional Investment Funds under the Trust, each
such Investment Fund shall be accounted for separately and, as to each
Participant participating in each such separate Investment Fund, only his or her
proportionate share of gains, income, losses, expenses, or other credits or
charges attributable to such separate Investment Fund shall be allocated to him
or her thereunder.

       

      
        
          
          

        

        
          57

          
            

          

        

        
          
          

        

      

       

      6.03           Valuation of Company
Stock.  For purposes of calculating the value of Company Stock,
the closing price for such Company Stock as reported on the principal national
securities exchange on which shares of Company Stock are traded on the
applicable Valuation Date shall be used.

       

      ARTICLE
VII.

      PAYMENT OF VESTED
BENEFITS

       

       

      7.01           Form of
Benefits.

       

      7.01.1  Retirement. Disability or
Termination Benefits.  Benefits payable on account of a
Participant’s retirement, Disability or termination of Service prior to
attaining retirement age shall be payable in either of the following forms, as
selected by the Participant:

       

      (a)           in
a lump sum; or

       

      (b)           except
as provided in Section 8.07, in two (2) or more annual installments payable for
a period of years not to exceed the lesser of ten (10) years or the life
expectancy of the Participant or the joint life expectancies of the Participant
and his or her Beneficiary; provided that: (1) at least 51% of the Participant’s
Vested Benefit (as determined when payment commences) shall be payable during
the Participant’s life expectancy (as determined when payment commences) and
(ii) the amount distributed each year shall at least equal the quotient obtained
by dividing the Participant’s Vested Benefit by the applicable life expectancy
or joint life expectancy. (For purposes of this Subsection (b), payments shall
be calculated by use of the return multiples specified in Section 1.072-9 of the
Treasury Regulations.)

       

      
        
          
          

        

        
          58

          
            

          

        

        
          
          

        

      

       

      Notwithstanding
the foregoing, effective April 1, 2001, benefits payable on account of a
Participant’s retirement, Disability or termination of Service prior to
attaining retirement age shall be payable in a lump sum.

       

      7.01.2    
Death
Benefits.  Benefits payable on account of a Participant’s death
shall be payable in either of the following forms, as selected by the
Participant’s Beneficiary:

       

      (c)           in
a lump sum; or

       

      (d)           except
as provided in Section 8.08, in annual installments payable for a period of
years not to exceed five (5); provided, however, that: (1) if distribution has
commenced pursuant to Section 7.01.1(b) and the Participant dies before
receiving his or her entire interest, distribution shall continue to the
Beneficiary in accordance with Section 7.01.1(b) unless the Beneficiary elects
to accelerate payment of the benefit, or (ii) if distribution has not commenced
pursuant to Section 7.01.1(b), any portion payable to or for the benefit of the
Participant’s Beneficiary may (at the election of such Beneficiary) be paid over
a period of years not to exceed the life expectancy of the Beneficiary (in
accordance with applicable regulations pursuant to Code Section 401(a)(9)), with
payments starting within one year of the Participant’s death if such Beneficiary
(including a Contingent Beneficiary) is not the Participant’s Spouse, and (it
later) at any time until the Participant would have attained age 70 1⁄2 if such
Beneficiary is the Participant’s Spouse. For purposes of this Subsection (b),
payments shall be calculated by use of the return multiples specified in Section
1.072-9 of the Treasury Regulations. Furthermore, any amount paid to the
Participant’s child shall be treated as if it had been paid to the Participant’s
surviving Spouse if the amount becomes payable to the Spouse when the child
reaches the age of majority.

       

      
        
          
          

        

        
          59

          
            

          

        

        
          
          

        

      

       

      Notwithstanding
the foregoing, effective April 1, 2001, benefits payable on account of a
Participant’s death shall be payable in a lump sum.

       

      7.02           Notice and Election of
Benefit Form.  The Plan Administrator shall give notice to a
Participant or Beneficiary concerning the alternative methods by which benefits
are payable. After receiving such notice and being given a reasonable time to
elect, a Participant or Beneficiary shall elect a form of benefit on a form
provided by the Plan Administrator.

       

      Notwithstanding
the foregoing, effective October 1, 1999, a Participant or Beneficiary shall
elect a form of benefit on a form provided by the Plan Administrator or via
appropriate electronic medium.

       

      7.03           Annuity Benefit Not
Required.

       

      (a)           In
General.  This Plan is a profit sharing plan which meets the
following two conditions: (i) Participants may not elect benefit payments in the
form a life annuity, and (ii) upon the death of a Participant who was married to
his or her surviving Spouse throughout the one-year period ending on the date of
the Participant’s death, the Participant’s Vested Benefit shall be paid to the
Participant’s surviving Spouse unless the requirements of Subsection (b) are met
for payment to an alternate designated Beneficiary.

       

      (b)           Conditions on Payment of
Death Benefits to a Designated Beneficiary.  Upon the death of
a Participant prior to payment of his or her Plan benefits on account of
retirement, Disability or termination, his or her Vested Benefit shall be paid
to his or her designated Beneficiary if all of the requirements specified in
paragraph (i) are met, or if any of the conditions of paragraph (ii) exist or
the condition of paragraph (iii) exists:

      (i)           the
Participant’s surviving Spouse has consented in writing to an alternate
designated Beneficiary (to receive in whole or in part, any death benefit
payable under the Plan) and such consent (I) acknowledges the effect of such
designation; (II) is witnessed by the Plan Administrator or its designate or a
notary public; and (III) is the most recent designation submitted to the Plan
Administrator by or for the Participant on or before the date of his or her
death;

       

      
        
          
          

        

        
          60

          
            

          

        

        
          
          

        

      

       

      (ii)           the
spousal consent referred to in paragraph (i) cannot be obtained because it is
established to the satisfaction of the Plan Administrator that: (I) the
Participant has no surviving Spouse; (II) the Participant’s surviving Spouse
cannot be located; or (III) other circumstances, as may be provided for in
Regulations under the Code, exist that prevent the Participant from obtaining
the consent referred to in paragraph (i); or

       

      (iii)           the
consent referred to in paragraph (i) is not required because the Participant was
not married to his or her Spouse throughout the one period ending on the date of
the Participant’s death.

       

      7.04          Withdrawals During
Employment.  Upon the application by any Participant, the Plan
Administrator shall direct the Trustees to make distributions to the Participant
pursuant to Sections 7.04.1. 7.04.2 or 7.04.3, subject to the provisions of such
Sections and of Section 7.04.4, while the Participant remains in the Service of
an Employing Company.

       

      7.04.1  Withdrawals After Attaining
Age 59.  Once a Participant attains age 59 1/2, he or she may
withdraw all or any portion of the vested balance in his or her account or
accounts; provided that no withdrawal pursuant to this Section 7.04.1 shall be
less than the smaller of (a) $100, or (b) the vested balance in his or her
account or accounts.

       

      7.04.2  Withdrawals Prior to Age 59
1/2. Prior to attaining age 59 1/2, a Participant may request a
withdrawal from his or her Pre-tax Contribution Account subject to the
conditions of this Section 7.04.2 and may also make a withdrawal under Section
7.04.3. Any withdrawal from a Participant’s Pre-tax Contribution Account under
this Section 7.04.2 shall be subject to the following conditions:

       

      
        
          
          

        

        
          61

          
            

          

        

        
          
          

        

      

       

      (a)           Restrictions on
Amount.  Each request for a withdrawal under this Section
7.04.2:

       

      (i)           shall
be for at least the smaller of (I) $100 or (II) the balance in the Participant’s
Pre-tax Contribution Account; and

       

      (ii)           shall
be for no more than the Participant’s cumulative Pre- tax Contributions, reduced
by amounts previously withdrawn under this Section 7.04.2.

       

      (b)           Required
Purposes.  Withdrawals under this Section 7.04.2 shall be
permitted only (i) for the purpose of enabling the Participant to meet immediate
and heavy financial needs (including medical expenses of the Participant, the
Participant’s spouse or dependents, the cost of purchasing the Participant’s
primary residence, or the payment of tuition, related educational fees, and room
and board expenses for the next 12 months of post-secondary education for the
Participant, the Participant’s spouse or dependents or the cost to prevent the
eviction of the Participant from his or her primary residence or foreclosure on
the mortgage of his or her primary residence) and (ii) to the extent permitted
in Treasury Regulations, withdrawals for the types of needs given as examples in
clause (i) shall be deemed to satisfy the requirements of clause
(i).

       

      (c)           Necessary to Satisfy
Financial Need.  Withdrawal shall only be permitted if each of
the following is satisfied:

       

      (i)           the
withdrawal is not in excess of the amount of the Participant’s immediate and
heavy financial needs,

       

      
        
          
          

        

        
          62

          
            

          

        

        
          
          

        

      

       

      (ii)           the
Participant has already obtained all amounts (including loans) to which he or
she is entitled under this Plan and any other Plan maintained by an Employing
Company,

       

      (iii)           the
Participant shall be suspended from making Pre-Tax Contributions hereunder until
the first pay period following 12 months after the date of his or her receipt of
his or her distribution hereunder, and

       

      (iv)           the
Participant’s Pre-Tax Contributions for the Plan Year following the Plan Year
during which withdrawal is made hereunder, shall be limited to the amount of
Pre-Tax Contributions allowed in such following Plan Year under Code Section
402(g) less the amount of his or her Pre-Tax Contributions made during the Plan
Year in which withdrawal hereunder is made.

       

      7.04.3  Withdrawals from Rollover
and Voluntary Nondeductible Contribution Accounts.  Any
Participant may withdraw all or a portion of his or her Rollover Contribution
Account and his or her Voluntary Non-deductible Contribution Account; provided
that each such withdrawal shall at least equal the lesser of (i) $100 and (ii)
the Participant’s entire balance in the account or accounts from which the
withdrawal is made.

       

      7.04.4  General Provisions
Applicable to Withdrawals.

       

      (d)           Frequency.  With
respect to his or her Pre-tax Contributions, only one withdrawal may be made
under this Section 7.04 during each Plan Year; with respect to his or her
Voluntary Non-deductible Contributions, two (2) withdrawals per Plan Year may be
made; provided that a Participant may request to withdraw amounts simultaneously
under Sections 7.04.1 and 7.04.3 or under Sections 7.04.2 and
7.04.3.

       

      
        
          
          

        

        
          63

          
            

          

        

        
          
          

        

      

       

      (e)           Accounting for
Withdrawals.  Any withdrawal under this Section 7.04 shall not
terminate a Participant’s participation in the Plan. Withdrawals pursuant to
Section 7.04.1 shall reduce and be subtracted from the Participant’s Employee
Contribution Accounts, Employer Contribution Accounts and Pre-tax Contribution
Account, as designated by the Participant. Withdrawals pursuant to Section
7.04.2 shall reduce and be subtracted from the Participant’s Pre-tax
Contribution Account. Withdrawals pursuant to Section 7.04.3 shall reduce and be
subtracted from the Participant’s Rollover Contribution Account and/or his or
her Voluntary Non-deductible Contribution Account, as designated by the
Participant.

       

      (f)           Rules and
Regulations.  Any withdrawal request under this Section 7.04
shall be made by written notice given to the Plan Administrator at least thirty
(30) days prior to the date of the withdrawal; provided that the Plan
Administrator may permit a withdrawal on shorter notice if administratively
feasible. The Plan Administrator shall determine from time to time such
non-discriminatory conditions on and rules governing withdrawals under this
Section 7.04 as it deems appropriate. Notwithstanding the foregoing, effective
October 1, 1999, such notice may be provided to the Plan Administrator via
appropriate electronic medium.

       

      7.05           Effect of
Reemployment.  In the case of a Participant who returns to
Service after his or her Benefit Commencement Date but before his or her Normal
Retirement Date, payment of benefits to him or her shall thereupon cease, and
the form of any benefits payable to him or her thereafter shall be determined in
accordance with the provisions of this Article VII but disregarding any previous
benefit elections made by him.

       

      7.06           Claims
Procedure.

       

      
        
          
          

        

        
          64

          
            

          

        

        
          
          

        

      

       

      (a)           In
order to receive any benefits under the Plan, a Participant or his or her
Beneficiary (the “Applicant”) shall first file a notice with the Plan
Administrator submitting his or her claim. If a claim for benefits submitted by
the Applicant is denied, the Plan Administrator shall furnish to the Applicant,
within ninety (90) days after receipt of such claim (or within one hundred and
eighty (180) days after such receipt if extenuating or special circumstances
require an extension of time) a written notice which: (i) specifies the reasons
for the denial, (ii) refers to the pertinent provisions of the Plan on which the
denial is based, (iii) describes any additional material or information
necessary for the perfection of the claim and explains why such material or
information is necessary, and (iv) explains the claim review procedures of this
Section 7.06.

       

      (b)           Upon
the written request of the Applicant submitted within sixty (60) days after his
or her receipt of such written notice, the Plan Administrator shall afford the
Applicant a full and fair review of the decision denying the claim, and, if so
requested: (i) permit the Applicant to review any documents which are pertinent
to the claim, (ii) permit the Applicant to submit to the Plan Administrator
issues and comments in writing, and (iii) afford the Applicant an opportunity to
meet with a quorum of the Plan Administrator as a part of the review
procedure.

       

      (c)           Within
sixty (60) days after its receipt of a request for review (or within one hundred
and twenty (120) days after such receipt if special circumstances, such as the
need to hold a hearing, require an extension of time) the Plan Administrator
shall notify the applicant in writing of its decision and the reasons for its
decision and shall refer the Applicant to the provisions of the Plan which form
the basis for its decision.

       

      
        
          
          

        

        
          65

          
            

          

        

        
          
          

        

      

       

      7.07           Distributions in Cash and
Stock.  (a) Except as otherwise provided in Section 7.07(b), if
a Participant or Beneficiary so elects, all distributions to be made pursuant to
this Article VII from the Company Stock Fund shall be in whole shares of Company
Stock, provided that the Participant has at least 50 whole shares, or such other
amount as determined by the Plan Administrator, of Company Stock credited to his
or her accounts. Any balance comprised of less than 50 whole shares, or such
other amount as determined by the Plan Administrator in a non-discriminatory
manner, and fractional shares shall be paid in cash. To receive Company Stock, a
Participant or Beneficiary must provide written notice to the Plan Administrator
prior to the effective date of such distribution. A Participant shall receive a
cash distribution in lieu of Company Stock, if he or she (i) fails to elect to
receive whole shares in certificate form, (ii) has a distribution which does not
exceed $3,500 in Plan Years beginning prior to January 1, 1999 or does not
exceed $5,000 in Plan Years beginning on or after January 1, 1999, or (iii) has
less than 50 whole shares, or such other amount as determined by the Plan
Administrator in a non-discriminatory manner. Notwithstanding the foregoing,
effective October 1, 1999, such notice may be provided to the Plan Administrator
via appropriate electronic medium.

       

      (b)           If
the Participant’s Vested Benefit is $3,500 or less in Plan Years beginning prior
to January 1 ,l999, or $5,000 or less in Plan Years beginning on or after
January 1, 1999, and distribution is made pursuant to Section 8.08, the
Participant or his or her Beneficiary shall receive his or her distribution
solely in cash and he or she shall have no ability to elect to have a portion of
such distribution made in Common Shares.

       

      7.08           Directed
Rollovers.  For any distribution made on or after January 1,
1993, a Distributee may elect, at the time and in the manner prescribed by the
Plan Administrator, to have all or any portion of an Eligible Rollover
Distribution paid directly to an Eligible Retirement Plan specified by the
Distributee in a Direct Rollover.

       

      
        
          
          

        

        
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      ARTICLE
VIII.

      BENEFIT COMMENCEMENT
DATE

       

      8.01           General
Rule.  Subject to Sections 8.06 and 8.07, the Benefit
Commencement Date of a Participant who retires upon his or her Normal Retirement
Date or Postponed Retirement Date shall be the Valuation Date coinciding with or
next following such date of retirement. Subject to Sections 8.05 through 8.07
and unless a Participant elects otherwise in accordance with the provisions of
Section 8.02, the Benefit Commencement Date of a Participant whose Service is
terminated other than by reason of retirement, shall be the Valuation Date
coinciding with or next following his or her Normal Retirement
Date.

       

      8.02           Optional Termination Benefit
Commencement Date.  If a Participant’s Service is terminated
for any reason other than retirement or death, such Participant may elect to
have his or her Benefit Commencement Date be, in lieu of the applicable date
provided in Section 8.01, any Valuation Date following termination of his or her
Service and before his or her Normal Retirement Date. Such an election shall be
made by notice to the Plan Administrator at least thirty (30) days prior to the
Benefit Commencement Date designated thereon. A distribution may commence less
than thirty (30) days after the notice in the preceding sentence is given
provided the Plan Administrator clearly informs the Participant that the
Participant has a right to a period of at least thirty (30) days after receiving
the notice to consider the decision of whether or not to elect a distribution
(and, a particular distribution option), and the Participant, after receiving
the notice, affirmatively elects a distribution.

       

      8.03           Retirement After
Reemployment.  If benefits payable to a Participant are
suspended in accordance with the provisions of Section 7.05, such Participant’s
new Benefit Commencement Date shall be determined in accordance with the
provisions of this Article VIII as if he or she had not previously had a Benefit
Commencement Date prior to such suspension of payment of benefits.

       

      
        
          
          

        

        
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      8.04           Death Benefit Commencement
Date.  If benefits first become payable to the Spouse or other
Beneficiary of a Participant following such Participant’s death, the payment of
such benefits shall commence immediately subject to Code Section 401(a)(9);
provided, however benefits shall commence no later than as provided in
accordance with the provisions of Article VII.

       

      8.05           Limited Administrative
Delays.  Unless a Participant elects otherwise, payment of his
or her benefits shall commence not later than sixty (60) days after the close of
the Plan Year in which the later of the following occurs: (a) the Participant
attains age sixty-five (65), or (b) the date on which the Participant actually
retires or his or her Service is terminated.

       

      8.06           Latest Benefit Commencement
Date.  Notwithstanding the provisions of Sections 8.01 and
8.03, distributions to a Participant shall commence in installments no later
than the first day of April following the calendar year in which such
Participant attains age 70 1⁄2. Notwithstanding the foregoing, effective January
1, 1999, the distributions to Participants (other than five-percent (5%) owners)
who attain age 701⁄2 on or after January 1, 1999 shall commence in installments no
later then the later of the April 1 of the calendar year following the calendar
year in which the Participant attains age 701⁄2 or retires. The following
additional provisions shall apply to years prior to January 1,
1999:

       

      
        	
                (i)

              	
                any
      Participant attaining age 701⁄2 in years after 1995 may elect by April 1 of
      the calendar year following the year in which he or she attained age 701⁄2,
      (or by December 31, 1997 in the case of a Participant who attained age 701⁄2
      in 1996) to defer distributions until the calendar year following the
      calendar year in which he or she retires. If no such election is made, the
      Participant will begin receiving distributions by the April 1 of the
      calendar year following the year in which he or she attained age 701⁄2 (or
      by December 31, 1997 in the case of a participant attaining age 701⁄2 in
      1996); and

              	 


      

       

      
        
          
          

        

        
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                  (ii)

                	
                  
                    any
      Participant who attained age 701⁄2 in years prior to 1997 may elect to stop
      distributions and recommence by the April 1 of the calendar year following
      the year in which he or she retires. There shall be a new annuity starting
      date upon recommencement of distributions.

                  

                	 


        

         

      

      In no
event shall the installment payments be permitted over a period which would
normally extend beyond the life of the Participant and his or her Beneficiary
(or over a period extending beyond the life expectancy of the Participant or the
life expectancies of the Participant and his or her Beneficiary). A Participant
may irrevocably elect (other than in the case of a life annuity) to have or not
have the life expectancy of either he or she, or , if applicable, his or her
spousal Beneficiary, or both, recalculated annually; provided, however, if a
timely election is not made before distributions are required to commence, such
recalculations shall be made. Life expectancy and joint and last survivor life
expectancy shall be computed using Tables V and VI of Section 1.72-9 of the
Treasury regulations.

       

      With
respect to distributions under the Plan made on or after January 1, 2002, the
Plan will apply the minimum distribution requirements of Code Section 401(a)(9)
in accordance with the regulations under Code Section 401(a)(9) that were
proposed on January 17, 2001, notwithstanding any provision of the Plan to the
contrary. This paragraph shall continue in effect until the last calendar year
beginning before the effective date of the final regulations under Code Section
401(a)(9) or such other date as may be specified in guidance published by the
Internal Revenue Service.

       

      
        
          
          

        

        
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      8.07           Payment Date When Benefit is
$3,500 or Less or $5,000 or Less.  If the Participant’s Vested
Benefit is $3,500 or less in Plan Years beginning prior to January 1, 1999 or is
$5,000 or less in Plan Years beginning on or after January 1, 1999, the Plan
Administrator shall immediately distribute such benefit in a lump sum without
the Participant’s consent. However, a Participant’s Vested Benefit may not be
paid without his or her written consent if the Participant’s Vested Benefit
exceeds $3,500 in Plan Years beginning prior to January 1, 1999 or exceeds
$5,000 in Plan Years beginning on or after January 1, 1999. Subject to Section
8.02, written consent to the distribution may not be made until the Participant
is notified (no less than 30 days and no more than 90 days prior to the date the
distribution is to commence) of his or her right to defer such distribution
until his or her Normal Retirement Date.

       

      ARTICLE
IX.

      TOP-HEAVY
PROVISIONS

       

      9.01           Application of Top—Heavy
Provisions.  The following provisions shall become effective in
any Plan Year in which the Plan is determined to be a Top-Heavy Plan, as defined
in Section 9.02, and shall supersede any conflicting provisions in the
Plan.

       

      9.02           Determination of Top-Heavy
Plan Status: Top-Heavy Plan Definitions.  The following words
and phrases shall have the meanings specified:

       

      (a)           Key
Employee.  The phrase “Key Employee” shall mean any Employee or
former Employee (and the Beneficiaries of such Employee) who at any time during
the determination period was:

       

      (i)           an
officer of an Employing Company if (I) such individual’s annual compensation
exceeds 50% of the dollar limitation under Code Section
415(b)(l)(A);

       

      (ii)           an
owner (or considered an owner under Code Section 318) of one of the ten (10)
largest interests in an Employing Company if such individual’s compensation
exceeds 100% of the dollar limitation under Code Section
4l5(c)(1)(A);

       

      
        
          
          

        

        
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      (iii)           a
5% owner of an Employing Company; or

       

      (iv)           a
1% owner of an Employing Company if such individual’s compensation exceeds
$150,000.

       

      The
determination period is the Plan Year containing the Determination Date and the
four (4) preceding Plan Years. The determination as to who is a Key Employee
shall be made in accordance with Code Section 4160)0) and the regulations
thereunder.

       

      (b)           Top-Heavy
Plan.  For any Plan Year the Plan shall be considered a “Top
Heavy Plan” if any of the following conditions exist:

       

      (i)           If
the Top-Heavy Ratio for the Plan exceeds 60% and the Plan is not part of any
Required Aggregation Group or Permissive Aggregation Group of
plans.

       

      (ii)           If
the Plan is a part of a Required Aggregation Group of plans but not part of a
Permissive Aggregation Group and the Top-Heavy Ratio for the group of plans
exceeds 60%.

       

      (iii)           If
the Plan is a part of a Required Aggregation Group and part of a Permissive
Aggregation Group of plans and the Top-Heavy Ratio for the Permissive
Aggregation Group exceeds 60%.

       

      (c)           Top Heavy
Ratio.

       

      (i)           If
an Employing Company maintains one or more defined contribution plans (including
any Simplified Employee Pension Plan) and an Employing Company maintains or has
maintained one or more defined benefit plans which, during the five- year period
ending on the Determination Date(s), has or has had any accrued benefits, the
Top- Heavy Ratio for any Required or Permissive Aggregation Group as appropriate
is a fraction:

       

      
        
          
          

        

        
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      (I)           the
numerator of which is the sum of (A) the account balances under the aggregated
defined contribution plan or plans for all Key Employees and (B) the Present
Value of the accrued benefits under the aggregated defined benefit plan or plans
for all Key Employees as of the Determinate Date(s), and

       

      (II)           the
denominator of which is the sum of (A) the account balances under the aggregated
defined contribution plan or plans for all Participants and (B) the Present
Value of accrued benefits under the defined benefit plan or plans for all
Participants as of the Determination Date(s).

       

      All
Top-Heavy Ratio determinations shall be made in accordance with Code Section 416
and the regulations thereunder. The account balances under a defined
contribution plan and the accrued benefits under a defined benefit plan in both
the numerator and the denominator of the Top-Heavy Ratio shall be adjusted for
any distribution of an account balance or an accrued benefit made in the
five-year period ending on the Determination Date.

       

      (ii)           For
purposes of paragraph (i), the value of account balances and the Present Value
of accrued benefits shall be determined as of the most recent Valuation Date
that falls within or on the ending of the twelve-month period ending on the
Determination Date, except as provided in Code Section 416 and the Regulations
thereunder for the first and second plan years of a defined benefit plan. The
account balances and accrued benefits of a Participant (I) who is not a Key
Employee but who was a Key Employee in a prior year, or (ii) who has not
received any compensation from any employer maintaining the plan at any time
during the five-year period ending on the Determination Date shall be
disregarded. The calculation of the Top-Heavy Ratio, and the extent to which
distributions, rollovers and transfers are taken into account shall be made in
accordance with Code Section 416 and the Regulations thereunder. When
aggregating plans, the value of account balances and accrued benefits shall be
calculated with reference to the Determination Dates that fall within the same
calendar year.

       

      
        
          
          

        

        
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      (d)           Permissive Aggregation
Group.  The “Permissive Aggregation Group” shall be the
Required Aggregation Group of plans plus any other plan or plans of an Employing
Company which, when considered as a group with the Required Aggregation Group,
would continue to satisfy the requirements of Code Sections 401(a)(4) and
410.

       

      (e)           Required Aggregation
Group.  The “Required Aggregation Group” shall be (i) each
qualified plan of an Employing Company in which at least one Key Employee
participates and (ii) any other qualified plan of an Employing Company which
enables a plan described in clause (i) to meet the requirements of Code Sections
401(a)(4) or 410.

       

      (f)           Determination
Date.  The “Determination Date” shall be (i) for any Plan Year
subsequent to the first Plan Year, the last day of the preceding Plan Year or
(ii) for the first Plan Year of the Plan, the last day of that
Year.

       

      (g)           Present
Value.  For purposes of establishing “Present Value” to compute
the Top-Heavy Ratio, any benefit shall be discounted only for mortality and
interest based on (i) annual interest of 51⁄2% (or such other interest rate
required by applicable law) and (ii) the 1971 Group Annuity Mortality
Table.

       

      (h)           Valuation
Date.  For purposes of computing the Top-Heavy Ratio, the
Valuation Date shall be the last day of each Plan Year.

       

      9.03           Top-Heavy Plan
Requirements.  If the Plan is a Top-Heavy Plan for any Plan
Year or, as part of a Required or Permissive Aggregation Group, the Plan is
deemed to be a Top-Heavy Plan for any Plan Year, the following requirements
shall be met, notwithstanding any other provisions of the Plan.

       

      
        
          
          

        

        
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      (a)           Minimum Vesting
Schedule.  For any Plan Year in which this Section applies, the
non-forfeitable percentage of each Employee in his or her Accrued Benefit shall
equal 100% after three (3) Years of Vesting Service. The Minimum Vesting
Schedule applies to all benefits within the meaning of Code Section 411(a)(7)
except those attributable to Employee contributions and Pre-tax Contributions,
including benefits accrued before the effective date of Code Section 416 and
benefits accrued before the Plan became a Top-Heavy Plan. Further, no reduction
in Vested Benefits may occur in the event the Plan’s status as a Top-Heavy Plan
changes for any Plan Year. This provision does not apply, however, to the
Accrued Benefit of any Employee who does not have an Hour of Service after the
Plan has initially become a Top Heavy Plan and forfeitures of such Accrued
Benefits shall be determined without regard to this provision.

       

      (b)           Minimum
Contribution.  For any Plan Year in which this Section applies,
except as is otherwise required to satisfy Section 9.04, the following
contribution provisions shall apply to the Plan:

       

      (i)           Basic
Minimum.  Each Employing Company shall, on behalf of each
Participant it employs who is a Non-Key Employee for such Top-Heavy Plan Year,
contribute to the Trust the greater of (I) the Employing Company contributions
determined under Section 3.01 for such Participant for such Plan Year or (II)
the lesser of (A) 3% of the Non-Key Employee’s Compensation for the Plan Year or
(B) the largest percentage of the Employing Company contributions, Pre-tax
Contributions and Forfeitures, as a percentage of the Key Employee’s
Compensation, allocated on behalf of any Key Employee for that
year.

       

      (ii)           Restriction on Right to a
Minimum Contribution.  Except as necessary to meet the
Top-Heavy minimum benefit accrual requirements of any defined benefit plan or
plans in the Required or Permissive Aggregation Group for any Non-Key Employee,
no contribution shall be made pursuant to paragraph (i) on behalf of a Non-Key
Employee who was not employed by an Employing Company on the last day of the
Plan Year.

       

      
        
          
          

        

        
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      (iii)           Minimum Contribution Made in
Lieu of Regular Contribution.  No Participant shall receive
Employing Company contributions under both Section 3.01 and this Section 9.03
for any Plan Year.

       

      (iv)           Increased Section 415
Limitation Minimum.  If, during any Limitation Year, the
Participant is a participant in both this Plan and the Pension Plan, for
purposes of Article III “1.0%” shall be substituted for “1.25%” each place it
appears in Section 3.04. This Section shall not apply if (I) the Plan would
satisfy Section 9.03(b) if the guaranteed minimum contribution was one percent
(1%) greater than the guaranteed minimum contribution; and (II) the top heavy
ratio does not exceed ninety percent (90%). This Section shall not be in effect
for Limitation Years beginning after December 31, 1999.

       

      (c)           Compensation
Limitation.  For any Plan Year in which this Section applies,
the Compensation limitation described in Code Section 416(d) shall
apply.

       

      9.04           Minimum Accrued
Benefits.  Notwithstanding the provisions of Section 9.03(b),
for any Plan Year during which the Plan is deemed to be a Top-Heavy Plan as a
member of a Required or Permissive Aggregation Group, the contribution rate of
3% in paragraph (i) of Section 9.03(b) shall be increased to 5%, and the
contribution rate of 4% in paragraph (iv) of Section 9.03(b) shall be increased
to 7.5%, respectively, unless the sum of the Accrued Benefits under the Pension
Plan, and under this Plan, derived from Employing Company contributions, of each
Participant who is a Non-Key Employee is at least the lesser of: (a) 2% of such
Participant’s average annual Compensation during the testing period multiplied
by the number of such Participant’s Years of Participation with an Employing
Company, excluding any Year of Participation during which the Pension Plan was
not Top-Heavy, or (b) 20% of such Participant’s average annual Compensation
during the testing period.

       

      
        
          
          

        

        
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      ARTICLE
X.

      ADMINISTRATION

       

       

      10.01        Appointment of
Administrator.  The Plan shall be administered by the Plan
Administrator whose membership shall consist of at least three (3) persons who
shall be appointed by and shall serve at the pleasure of the Board. The Board
may remove any member of the Committee at any time with or without cause, and
any member of the Committee may resign at any time by giving written notice
thereof to the Board. Each member of the Committee shall serve until such time
as he or she resigns, dies, or is removed by action of the Board. Vacancies in
the Committee shall be filled by the Board. The members of the Committee shall
serve without compensation. The Company may pay all usual and reasonable
expenses of the Committee in whole or in part, and any expenses not paid by the
Company shall be paid by the Trustees out of the principal or income of the
Trust Fund.

       

      10.02        Expenses of Plan
Administrator.  Any expenses incurred by the Plan Administrator
in administering the Plan shall be considered a cost of the Plan and shall be
paid in accordance with the applicable provisions of Article XI.

       

      10.03        Duties of the Plan
Administrator.  In addition to its duties set forth elsewhere
in the Plan, the Plan Administrator shall have the following rights, powers, and
duties, any of which it may delegate to any member or members of the Plan
Administrator:

       

      (a)           to
design forms and to prepare and enforce such rules, regulations, and procedures,
as shall be necessary for the efficient administration of the Plan;

       

      
        
          
          

        

        
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      (b)           to
determine when Employees become eligible to participate in the Plan, to process
their applications for participation;

       

      (c)           to
keep records containing all relevant data pertaining to the Plan, provided,
however, that any information supplied by a Participant shall be presumed to be
correct and the Plan Administrator shall incur no liability if it acts upon any
such information which is not correct;

       

      (d)           to
make all governmental filings required of the Plan; and

       

      (e)           the
authority and sole discretion to interpret the provisions of the Plan and to
determine eligibility for benefits thereunder in all instances, including but
not limited to the benefits, rights or privileges of Participants and
Beneficiaries under the Plan, and to exercise such authority or discretion
uniformly in such manner as to ensure that all Participants and Beneficiaries
similarly situated shall be similarly treated.

       

      10.04        Individual Committee
Member’s Rights.  Each member of the Plan Administrator shall
have the right to vote on or decide any matter relating to himself and to vote
on or decide any matter relating to his or her rights or benefits under the
Plan.

       

      ARTICLE
XI.

      EXPENSES OF THE
PLAN

       

      All
expenses incurred in administering the Plan, including those necessary for the
administration of the Trust, shall be paid out of the principal or income of the
Trust unless paid by the Company in its sole discretion. Notwithstanding the
foregoing, neither the Company nor any other Employing Company shall have any
obligation to pay any of such expenses.

       

      Notwithstanding
the foregoing, effective October 1, 1999, any forfeitures of Employing Company
contributions shall first be applied, consistent with Section 5.05, as
restoration of amounts forfeited under Section 5.02, second to reduce any
applicable administrative fees of the Plan, and third to reduce the Employing
Company contributions.

       

      
        
          
          

        

        
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      ARTICLE
XII.

      AMENDMENT OF THE
PLAN

       

      12.01        Amendment.  The
Company reserves the right to amend the Plan at any time by the action of the
Board for any reason, and the President/Chief Executive Officer of the Company
(or such other person designated by the Board) is granted the authority to amend
the Plan with respect to administrative matters that do not increase or decrease
an Employing Company’s costs; provided, however, that any amendment affecting
the duties, responsibilities, or compensation of the Trustees shall become
effective upon acceptance in writing by the Trustees of a certified copy of such
amendment and provided, further that no amendment shall diminish, or deprive a
Participant of any benefit already accrued. The Plan may be amended
retroactively if necessary, to conform the Plan to mandatory provisions of
applicable laws or Regulations or as permitted by the Internal Revenue Service
or the Department of Labor.

       

      12.02        Effect of Amendments on
Vesting.

       

      (a)           Notwithstanding
the provisions of the preceding Section 12.01, the Board shall make no amendment
to the Plan’s vesting schedule that shall result in any Participant’s Vested
Benefit, determined as of the later of (i) the date of execution of such
amendment or (ii) the effective date of such amendment, being equal to less than
such Participant’s Vested Benefit computed without regard to such
amendment.

       

      (b)           If
the Plan’s vesting schedule is amended, a Participant having at least three (3)
Years of Vesting Service may elect to have his or her Vested Benefit computed
without regard to such amendment. A Participant shall make such election within
the period beginning on the date that the Board adopts such amendment and ending
sixty (60) days after the latest of (i) the effective date of such amendment,
(ii) the date on which such Participant is given written notice of such
amendment, or (iii) the date of the adoption of such amendment. Any election
made in accordance with this Section 12.02 shall be irrevocable.

       

      
        
          
          

        

        
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      12.03        Amendments to Qualify
Trust.  The Board or President/Chief Executive Officer of the
Company (or such other person designated by the Board) may amend the Trust
Agreement retroactively in order to ensure the continued qualification of the
Trust for tax exemption under the Code, and further, to conform the Plan to
applicable provisions of the Code, ERISA, and the Regulations thereunder;
provided, however, that any such amendment shall be made effective for all
purposes for the entire period during which the Plan shall have failed (if at
all) to qualify for such tax exemption.

       

      ARTICLE
XIII.

      TERMINATION OR MERGER OF
PLAN AND TRUST

       

      13.01        Termination.  The
Board (for the Company and each Employing Company) intends to continue the Plan
and the payment of contributions hereunder indefinitely, but it does not assume
a contractual obligation to do so. The Board (for the Company and each Employing
Company) reserves the right, at any time, to discontinue contributions hereunder
permanently or temporarily or to terminate the Plan. Each Employing Company
reserves the right by action of its board of directors to withdraw from the Plan
or discontinue contributions thereunder.

       

      13.02        Benefits After Plan
Termination.  In the event of the termination of the Plan, each
Participant shall have a non-forfeitable Vesting Percentage equal to 100%.
Following termination of the Plan, but subject to whatever reasonable
administrative delays may be imposed by the Trustees or Plan Administrator in
the circumstances, all benefits under the Plan shall be paid at the time and in
the manner provided in accordance with Articles VII and VIII.

       

      
        
          
          

        

        
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      13.03        Partial
Termination.  In the event of a partial termination of the
Plan, including a complete discontinuance of contributions, each affected
Participant shall have a non- forfeitable Vesting Percentage equal to 100% in
the portion of his or her Employer Contribution Accounts affected by the partial
termination. If such a Participant has a Vesting Percentage of less than 100% in
any portion of his or her Employer Contribution Accounts not affected by or
credited after the partial termination, any non-forfeitable balances held in the
Trust pursuant to the preceding sentence shall be held as sub-accounts in the
Participant’s Employer Contribution Accounts until the Participant’s Vesting
Percentage equals 100%, at which time such sub- accounts shall be combined with
the Participant’s regular Employer Contribution Accounts.

       

      13.04        Plan
Merger.  If the Plan is merged or consolidated with, or if its
assets or liabilities are transferred to any other employee plan, the benefit
that each Participant would receive immediately after such merger,
consolidation, or transfer, if the resulting plan were terminated, shall be
equal to or greater than the benefit such Participant would have been entitled
to receive immediately before such merger, consolidation, or transfer if this
Plan had then been terminated.

       

      ARTICLE
XIV.

      FIDUCIARY RESPONSIBILITIES
AND INDEMNIFICATION

       

      14.01        Allocation of
Responsibilities.  The Company, the Trustee and the Plan
Administrator shall be a named fiduciary as that term is defined in ERISA
(“Named Fiduciaries”). In accordance with the procedures established herein,
such Named Fiduciaries shall have the right to allocate fiduciary
responsibilities (other than trustee responsibilities) among themselves and to
designate other persons to carry out such responsibilities. Notwithstanding the
foregoing, effective October 1, 1999, the Trustee shall not be a Named
Fiduciary.

       

      
        
          
          

        

        
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      14.02        No Joint
Responsibilities.  Any allocated fiduciary responsibility or
any fiduciary responsibility which a person has been designated to perform is
intended to be the responsibility only of the fiduciary to whom allocated or of
the designated fiduciary and not the joint responsibility of that fiduciary and
any other fiduciary. Unless a Named Fiduciary has acted imprudently in making or
continuing an allocation or designation, a Named Fiduciary shall not be
responsible for the action or omission of any person who has been designated by
such Named Fiduciary to perform a fiduciary responsibility or to whom a
fiduciary responsibility has been allocated in accordance herewith. A person
acting upon the directions of or in accordance with decisions made by a
fiduciary shall not be deemed to have assumed joint responsibility for such
directions or decisions.

       

      14.03        Indemnification.  The
Company shall indemnify and save harmless any individual acting in a fiduciary
capacity from, against, for and in respect of any and all damages, losses,
obligations, liabilities, liens, deficiencies, attorneys’ fees, costs and
expenses incident to the performance of such person’s duties unless resulting
from the gross negligence, willful misconduct, or lack of good faith of such
individual. Such indemnification shall apply to any such individual even though
at the time liability is imposed on the individual he or she is no longer acting
in a fiduciary capacity.

       

      14.04        Liability
Insurance.  The Company may purchase insurance to cover the
potential liability of persons who serve in a fiduciary capacity with regard to
the Plan.

       

      14.05        Fiduciaries.  Any
person or group of persons may serve in more than one fiduciary capacity with
respect to the Plan and may participate in the Plan and receive benefits under
the Plan as a Participant or Beneficiary.

       

      
        
          
          

        

        
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      ARTICLE
XV.

      MISCELLANEOUS

       

      15.01        Investment of Plan
Assets.  All assets of the Trust Fund under the Plan shall be
invested in accordance with the provisions of the Trust Agreement.

       

      (a)           Participant
Direction.  Each Participant, Beneficiary and alternate payee
under a qualified domestic relations order may direct the Trustee as to the
investment of any or all of his or her accounts in the Trust Fund in the
Investment Fund or Funds.

       

      (b)           Investment
Limitations.  Each Participant may elect to have all
contributions made on his or her behalf, which are allocated to his accounts,
invested in increments of 25%, and effective on the Restatement Date, in
increments of 5%, of the total in one or more of the Investment Fund or Funds;
provided that no more than 50% of the total of such Participant’s contributions
may be invested in the Company Stock Fund. Notwithstanding the foregoing,
effective October 1, 1999, each Participant may elect to have all contributions
made on his or her behalf, which are allocated to his or her accounts, invested
in increments of 1%, provided that no more than 50% may be allocated to the
Talbots Company Pooled Stock Fund.

       

      (c)           Transfer
Limitations.  Each Participant, Beneficiary and alternate payee
under a qualified domestic relations order may elect to have all or a portion of
the total of his or her accounts transferred, on a form provided by the Plan
Administrator and pursuant to rules and procedures established by the Plan
Administrator and applied on a uniform and non- discriminatory basis, from one
Investment Fund or Funds to another Investment Fund or Funds in increments of
25%, and effective on the Restatement Date, in increments of 5%, of the total in
such accounts; provided that no transfer shall result in more than 50% of the
total value of the Participant’s accounts as of the effective date of the
transfer being invested in the Company administratively practicable on or after
each Valuation Date or such other date as established by the Plan Administrator
from time to time. Notwithstanding the foregoing, effective October 1, 1999, for
purposes of this Section, elections will be filed with the Plan Administrator
via electronic medium and the word “written” includes documents completed via
electronic medium.

       

      
        
          
          

        

        
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      (d)           Account
Adjustments.  All income, gains and losses attributable to a
property invested by the Trustee at the direction of a Participant, Beneficiary
or alternate payee under a qualified domestic relations order shall be allocated
solely to the account of that person and all costs, fees, taxes or other charges
of any kind incurred (or increased, to the extent of the increase) in connection
with such investment shall be charged solely to the account for which such
investment is made.

       

      15.02        Notices and
Certifications.

       

      (a)           In
any case in which the Company or Trustee shall be directed to take any action
upon the occurrence of any event, the Company or the Trustee, as the case may
be, shall take the appropriate action only upon receipt of any notice, paper or
document reasonably believed by any of them to be genuine, and to have been
signed or sent by the person or persons properly authorized. Communications by
the Company concerning the Plan shall be signed by a member of the Plan
Administrator. The Plan Administrator shall advise the Trustee from time to time
of changes in the Company’s authorized personnel. Notwithstanding the foregoing,
effective October 1, 1999, for purposes of this Section, elections will be filed
with the Plan Administrator via electronic medium and the word “written”
includes documents completed via electronic medium.

       

      
        
          
          

        

        
          83

          
            

          

        

        
          
          

        

      

       

      (b)           Any
notice required or given hereunder shall be conclusively deemed to be received
by the addressee, if sent by certified or registered mail, postage prepaid,
addressed to the Company or, if to the Trustee or the Plan Administrator, care
of the Company, at the Company’s principal place of business. Any party may
change its address for the receipt of notices by informing the others, in
writing, of such change of address. Notwithstanding the foregoing, effective
October 1, 1999, for purposes of this Section, elections will be filed with the
Plan Administrator via electronic medium and the word “written” includes
documents completed via electronic medium.

       

      15.03        No Employment
Contract.  Nothing contained in this Plan shall be construed to
be a contract of employment between any Employing Company and any Employee.
Nothing contained herein shall be deemed to give to any Employee the right to be
retained in the employ of any Employing Company or to interfere with the right
of any Employing Company to discharge any Employee at any time, with or without
cause, nor shall it be deemed to give any Employing Company the right to require
any Employee to remain in its employ, nor shall it interfere with the Employee’s
right to terminate his or her employment at any lime.

       

      15.04        Return of Company
Contributions.  The Company has established the Plan for the
exclusive benefit of Participants and their Beneficiaries. Except as provided in
this Section 15.04 with respect to contributions made (a) under a mistake of
fact, (b) conditional upon the initial qualification of the Plan, or (c)
conditional upon the deductibility of the contributions, no amendment,
termination or other action shall divert any part of the assets of the Trust to
any purposes other than the exclusive benefit of Participants and their
Beneficiaries after defraying reasonable expenses of Plan
Administration.

       

      (a)           Mistake of
Fact.  If an Employing Company makes a contribution to the Plan
under a mistake of fact, the Trustee shall return such contribution, less any
expenses incurred in connection therewith, to such Employing Company within one
(1) year of the payment of such contribution.

       

      
        
          
          

        

        
          84

          
            

          

        

        
          
          

        

      

       

      (b)           Denial of Plan
Qualification.  In the event any District Director of Internal
Revenue or the Secretary of Labor at any time shall determine that the Plan or
Trust is not qualified under the applicable provisions of the Code or ERISA, any
contributions to the Plan made by any Employing Company for Plan Years that are
affected by such disqualification shall be deemed to be conditioned upon such
qualification and shall be returned to the respective Employing Companies, less
expenses incurred in connection therewith, within one (1) year after the date of
denial of qualification.

       

      (c)           Denial of Tax
Deduction.  In the event the deduction of any contribution to
the Plan by any Employing Company is disallowed under the applicable provisions
of the Code, such contribution shall be deemed to be conditioned upon such
deduction and shall be returned to the Employing Company, less any expenses
incurred in connection therewith, within one (1) year after the date of the
disallowance.

       

      15.05        Spendthrift Provisions and
Domestic Relations Orders.

       

      (a)           The
interest hereunder of any Participant, or Beneficiary shall not be alienable by
such Participant or Beneficiary either by assignment or by any other method and
shall not be subject to be taken by his or her creditors by any process
whatever, except as permitted by law. The Trust shall not in any manner be
liable for, or subject to, the debts, contracts, liabilities, engagements or
torts of any person entitled to benefits hereunder.

       

      (b)           The
preceding paragraph shall also apply to the creation, assignment or recognition
of a right to any benefit payable with respect to a Participant pursuant to a
domestic relations order, unless such order is determined to be a qualified
domestic relations order, as defined in Code Section 414(p), or any domestic
relations order entered before January 1, 1989.

       

      
        
          
          

        

        
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      (c)           The
term “qualified domestic relations order” means a domestic relations order which
creates or recognizes the existence of an alternate payee’s right to receive all
or a portion of the benefits payable with respect to a Participant under a plan
and with respect to which the following requirements of this Section 15.05 are
satisfied.

       

      (d)           The
term “domestic relations order” means any judgment, decree, or order (including
approval of a property settlement agreement) which relates to the provision of
child support, alimony payments, or marital property rights to a spouse, child,
or other dependent of a Participant, and is made pursuant to a State domestic
relations law (including a community property law). A domestic relations order
meets the foregoing requirements only if such order clearly specifies (i) the
names and mailing addresses of the Participant and of each alternate payee
covered by the order, (ii) the amount or percentage of the participant’s
benefits to be paid by the plan to each alternate payee, or the manner in which
such amount or percentage is to be determined, (iii) the number of payments or
periods to which such order applies, and (iv) each plan to which such order
applies. A domestic relations order meets the requirements of this Section 15.05
only if such order does not require a plan to provide any type or form of
benefit, or any options, not otherwise provided under the plan, does not require
the plan to provide increased benefits (determined on the basis of actuarial
value) and does not require the payment of benefits to an alternate payee which
are required to be paid to another alternate payee under another order
previously determined to be a “qualified domestic relations order.”

       

      
        
          
          

        

        
          86

          
            

          

        

        
          
          

        

      

       

      (e)           Where
the value of the benefit payable to an alternate payee of a Participant under a
qualified domestic relations order exceeds $3,500 in Plan Years beginning prior
to January 1, 1999 or exceeds $5,000 in Plan Years beginning on or after January
1, 1999, such alternate payee may, after the order is determined by the Plan
Administrator to be qualified and before such alternate payee’s benefits under
the Plan commence, elect to receive the benefit to which it is entitled under
such order in a lump sum, payable as soon as practicable following such election
provided the qualified domestic relations order provides for such a
distribution.

       

      (f)           Where
the value of the benefit payable to an alternate payee pursuant to a qualified
domestic relations order is not greater than $3,500 in Plan Years beginning
prior to January 1, 1999 or is not greater than $5,000 in Plan Years beginning
on or after January 1, 1999, such benefit shall be paid to the alternate payee
in a lump sum cash distribution as promptly as practicable after the order is
determined by the Plan Administrator to be a qualified domestic relations order
provided the qualified domestic relations order provides for such a distribution
and the alternate payee shall have no ability to elect to receive any portion of
such distribution in Common Shares.

       

      15.06        Governing
Law.  Except in such areas as have been preempted by federal
law, the Plan shall be construed, enforced, and regulated by the laws of the
State of Delaware.

       

      15.07        Binding
Effect.  This Plan and every amendment shall be binding upon
the heirs, executors and administrators, successors and assigns of Participants,
Beneficiaries, the Company, Plan Administrator and Trustee.

       

      15.08        Interpretation.  As
may be appropriate, pronouns used in the Plan shall be read and construed to
refer to the masculine, feminine, or neuter. Likewise, words in the singular
shall be read and construed to refer to the plural.

       

      15.09        Titles.  Titles
are included only for convenience and are not to be considered in the
interpretation of this document.

       

      
        
          
          

        

        
          87

          
            

          

        

        
          
          

        

      

       

      15.10        Investing of Company
Suspense Account.  All amounts held in the Company Suspense
Account shall be invested by the Trustee as directed by the Plan Administrator
or one or more investment advisers appointed by the Plan Administrator.
Notwithstanding the foregoing, effective October 1, 1999, the Company Suspense
Account is no longer maintained under the Plan.

       

      15.11        Voting and Tendering of
Company Stock.  Each Participant shall vote or tender the
number of whole shares allocated to his or her accounts which are invested in
the Company Stock Fund, and the Trustee shall vote or tender, pursuant to the
terms of the Trust agreement, and in its sole discretion, all shares for which
the Trustee shall not have received timely voting or tender instructions,
including fractional shares allocated to Participant accounts, and Company Stock
held in the Company Suspense Account. Notwithstanding the foregoing, effective
October 1, 1999, each Participant shall vote or tender the number of whole
shares allocated to his or her accounts which are invested in the Company Stock
Fund, and the Trustee shall vote or tender, pursuant to the terms of the Trust
agreement, and in its sole discretion, all shares for which the Trustee shall
not have received timely voting or tender instructions, including fractional
shares allocated to Participant accounts, and Company Stock not yet
allocated.

       

      15.12        Contributions in Company
Stock.  If contributions are to be made in Company Stock and
the Company or Employing Company is unable to acquire such Company Stock due to
a Black Out Period, the Company or Employing Company may make a cash
contribution and the Plan Administrator shall direct the Trustee to hold such
cash contribution in the Company Suspense Account until the expiration of such
Black Out Period. Notwithstanding the foregoing, effective October 1, 1999, if
contributions are to be made in Company Stock and the Company or Employing
Company is unable to acquire such Company Stock due to a Black Out Period, the
Company or Employing Company may make a cash contribution and the Plan
Administrator shall direct the Trustee to hold such cash contribution in the
unallocated suspense account until the expiration of such Black Out
Period.

       

      
        
          
          

        

        
          88

          
            

          

        

        
          
          

        

      

       

      Upon the
expiration of a Black Out Period, the Trustee shall, as soon as administratively
practicable, acquire Company Stock from the Company or the open market and
allocate such shares to Participant accounts.

       

      15.13        Suspense of Investment
Elections.  If the Plan Administrator or the Trustee determines
that there is a Black Out Period or specific circumstances so require,
investment elections, transfers and other actions required to be taken shall be
suspended until the Black Out Period expires or the specific circumstances cease
to exist, at which time the Plan Administrator or the Trustee shall, as promptly
as practicable, comply with the Participants’ investment elections and take such
other action as deemed necessary. Notwithstanding anything herein to the
contrary, Participant accounts shall reflect investment elections and transfers
made upon the expiration of the Black Out Period or other circumstances, with no
adjustment for earnings or losses during the Black Out Period or the existence
of other circumstances precluding Plan Administrator or Trustee action.
Notwithstanding the foregoing, effective October 1, 1999, this Section 15.13 is
hereby deleted.

       

      15.14        MISSING
RECIPIENTS.  If the Plan Administrator is unable, within three
years after any benefit becomes due under the Plan to a Participant or
Beneficiary, to make payment because the identity and/or whereabouts of such
person cannot be ascertained notwithstanding the mailing of due notice to any
last known address or addresses, the Plan Administrator shall direct that any
such benefits shall be forfeited and used to reduce future Employing Company
contributions; provided, however, that such benefit shall be restored (in an
amount equal to the amount forfeited) upon proper claim made by such Participant
or Beneficiary. In the event a proper claim is made, benefits under this Section
shall be restored based on the following order of priority:

       

      
        
          
          

        

        
          89

          
            

          

        

        
          
          

        

      

       

      
        	
                 
      

              	
                (a)

              	
                from
      forfeitures arising under Article V;
and

              


      

       

      
        	
                 
      

              	
                (b)

              	
                from
      additional Employing Company contributions made in order to restore such
      benefits.

              


      

       

      ARTICLE
XVI.

      LOANS

       

      16.01        Loan
Availability.  Upon application of any Participant, the Plan
Administrator (or such qualified person(s) as the Plan Administrator shall
designate), in accordance with a uniform, nondiscriminatory policy, may make a
loan to such individual to be used for any purpose as long as such individual is
a “party in interest” as defined in Section 3(14) of ERISA.

       

      16.02        Loan
Terms.  A loan must be evidenced by a legally enforceable
agreement, the terms of which specify the amount and date of the loan and
repayment schedule.

       

      (a)           The
amount of such loan may not exceed the lesser of (1) $50,000, reduced by the
excess (if any) of the highest outstanding balance of loans from the Plan during
the 1 year period ending on the day before the date the loan is made, over the
outstanding balance of loans from the Plan on the date the loan is made; or (2)
50% of the amount of the Participant’s vested interest under the Plan. Loans in
the amount of less than $500 will not be made. A Participant may have no more
than one loan outstanding at any given time.

       

      
        
          
          

        

        
          90

          
            

          

        

        
          
          

        

      

       

      (b)           Loans
may only be made on January 1 or July 1 of the Plan Year. All loans will bear
interest at a rate which shall provide the Trust Fund with a return commensurate
with the interest rate charged by persons in the business of lending money for
loans made under similar circumstances. Unless circumstances indicate that such
rate is unreasonable, the interest rate shall be determined by the prime rate
set by the State Street Bank of Boston, plus one percentage point, based on the
rates in effect for the December or June, whichever is applicable, immediately
preceding the date of the loan. This interest rate, once determined, will be
fixed for the term of the loan. Notwithstanding the foregoing, effective October
1, 1999, loans are available on any business day. Unless circumstances indicate
that such rate is unreasonable, the interest rate shall be determined by
American Express Trust Company at the direction of the Company. The rate shall
be determined based on the rates listed in the Wall Street Journal on the first
business day of the month, and shall be based on the Prime Rate plus 1%. The
interest rate will be honored for 30 days from the date the loans are requested.
After 30 days, the Participant may need to reapply for a loan due to interest
rate changes.

       

      (c)           A
loan shall be adequately secured. A loan shall be deemed to be adequately
secured if the amount of such loan to a Participant does not exceed fifty
percent (50%) of the Participant’s Vested Benefit at the time of the making of
such loan. If, at any time, the amount of an outstanding loan to a Participant
does exceed that limitation, then the Plan Administrator shall require the
Participant to repay the amount of principal balance due on such loan to an
amount not in excess of such limitation, or to adequately secure with collateral
other than the Participant’s Vested Benefits the amount by which such loan
exceeds the limitation.

       

      (d)           The
period for repayment of a loan issued pursuant to this Section must, by the
terms of the note, not exceed five (5) years. Notwithstanding the above, if the
purpose or use of the loan, as determined at the time of issuance, is to acquire
any dwelling unit which within a reasonable time is to be used as the principal
residence of the Participant, the period for repayment of the loan may be
extended to ten (10) years. Repayment of a loan shall be made through payroll
deduction. Any loan shall, by its terms, require that repayment of principal and
interest be amortized in level payments, at least quarterly over the period of
the loan.

       

      
        
          
          

        

        
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      In the
event the Participant ceases to make payments by payroll deduction, repayment of
the loan shall be accelerated and any amount due shall be paid from the
Participant’s Vested Benefit unless otherwise satisfied by the Participant. The
previous sentence notwithstanding, loan repayments shall be suspended under this
Plan as permitted under Section 414(u)(4) of the Code. In the event of default,
foreclosure on the note and attachment of security will not occur until a
distributable event occurs in the Plan.

       

      The Plan
Administrator shall promulgate such rules and regulations and utilize such forms
as are necessary or appropriate for making loans under the Plan.

       

       

       

      
        
          
          

        

        
          92

          
            

          

        

        
          
          

        

      

      
 

      AMENDMENT
NO. 1 TO THE

      TALBOTS,
INC. RETIREMENT SAVINGS VOLUNTARY PLAN

       

      The
Talbots, Inc. Retirement Savings Voluntary Plan (the “Plan”) is hereby amended
as follows, effective January 1, 2002, unless otherwise noted
herein:

       

      1.           The
Introduction to the Plan is hereby amended by adding the following paragraph to
the end thereof:

       

      “The Plan
is amended to reflect certain provisions of the Economic Growth and Tax Relief
Reconciliation Act of 2001 (“EGTRRA”).  This amendment is intended as
good faith compliance with the requirements of EGTRRA and is to be construed in
accordance with EGTRRA and guidance issued thereunder.  Except as
otherwise provided, this amendment shall be effective as of January 1,
2002.  This amendment shall supersede the provisions of the Plan to
the extent those provisions are inconsistent with the provisions of this
amendment.”

       

      2.           Section
1.18 of the Plan is hereby amended by adding the following paragraph to the end
thereof:

       

      “Notwithstanding
the foregoing, the annual 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
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.”

       

      3.           Section
1.23 of the Plan is hereby amended by adding the following to the end
thereof:

       

      “Notwithstanding
the foregoing, effective January 1, 2002, 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
relations order, as defined in Section 414(p) of the Code.”

       

      
        
          
          

        

        
          93

          
            

          

        

        
          
          

        

      

       

      4.           Section
1.24 of the Plan is hereby amended by adding the following paragraph to the end
thereof:

       

      “Notwithstanding
the foregoing, for distributions made after December 31, 2001, any amount that
is distributed on account of hardship shall not be an Eligible Rollover
Distribution and the Distributee may not elect to have any portion of such a
distribution paid directly to an Eligible Retirement Plan.

       

      A portion
of a distribution shall not fail to be an Eligible Rollover Distribution merely
because the portion consists of Voluntary Non-Deductible Contributions that are
not includible in gross income.  However, such portion may be
transferred only to an individual retirement account or annuity described in
Section 408(a) or (b) of the Code, or to a qualified defined contribution plan
described in Section 401(a) or 403(a) of the Code that agrees to separately
account for amounts so transferred, including separately accounting for the
portion of such distribution which is includible in gross income and the portion
of such distribution which is not so includible.”

       

      5.           Effective
July 1, 2002, Section 3.02.2(a)(i) of the Plan is hereby amended by adding the
following to the end thereof:

       

      “Notwithstanding
the foregoing, effective January 1, 2002, no Participant shall be permitted to
make Pre-Tax Contributions during a Plan Year in excess of 50% of the
Participant’s Compensation for such Plan Year.”

       

      6.           Section
3.02.2(a)(ii) of the Plan is hereby amended by adding the following to the end
thereof:

       

      “Notwithstanding
the foregoing, effective January 1, 2002, no Participant shall be permitted to
have Pre-Tax Contributions made under this Plan, or any other qualified Plan
maintained by the Company during any taxable year, in excess of the dollar
limitation contained in Section 402(g) of the Code in effect for such taxable
year, except to the extent permitted under Section 3.02.2(a)(iv) of the Plan as
amended herein and Section 414(v) of the Code, if applicable.”

       

      
        
          
          

        

        
          94

          
            

          

        

        
          
          

        

      

       

      7.           Effective
July 1,2002, Section 3.02.2(a) of the Plan is hereby amended by adding the
following as new subsection (iv):

       

      “(iv)
Notwithstanding anything in the Plan to the contrary, effective July 1, 2002,
all Employees who are eligible to make Pre-Tax-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 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 Section 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.”

       

      8.           Section
3.03.2 of the Plan is hereby amended by adding the following to the end of the
first paragraph thereof:

       

      “Effective
January 1, 2002, the Plan will accept rollover contributions and direct
rollovers of distributions made on and after January 1, 2002 from a qualified
plan described in Section 401(a) or 403(a) of the Code, excluding after-tax
employee contributions; an annuity contract described in Section 403(b) of the
Code, excluding after-tax employee contributions; 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.  The Plan will also accept a 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 included in gross income.”

       

      9.           Section
3.04.1 of the Plan is hereby amended by adding the following to the end of the
first paragraph thereof:

       

      “Notwithstanding
the foregoing, except to the extent permitted under Section 3.02.2(a)(iv) of the
Plan, as amended herein and Section 414(v) of the Code, if applicable, the
Annual Addition that may be contributed or allocated to a Participant’s account
under the Plan for any Limitation Year beginning after December 31, 2001, shall
not exceed the lesser of: (a) $40,000, as adjusted for increases in the
cost-of-living under Section 415(d) of the Code, or (b) 100 percent of the
Participant’s Compensation, within the meaning of Section 415(c)(3) of the Code,
for the Limitation Year.  The Compensation limit referred to in (a)
shall not apply to any contribution for medical benefits alter separation from
service (within the meaning of Section 401(h) or Section 419A(f)(2) of the Code)
which is otherwise treated as an Annual Addition.”

       

      
        
          
          

        

        
          95

          
            

          

        

        
          
          

        

      

       

      10.           Section
3.05.2 of the Plan is hereby amended by adding the following sentence to the end
thereof:

       

      “Notwithstanding
the foregoing, the multiple use test described in Treasury Regulation Section
1.401(m)-2 and Section 3.05.2 of the Plan shall not apply for Plan Years
beginning on or alter January 1, 2002.”

       

      11.           Section
4.05 of the Plan is hereby amended by adding the following paragraph to the end
thereof:

       

      “For
distributions and severances from employment occurring on or after January 1,
2002, regardless of when the severance from employment occurred, a Participant’s
Pre-Tax Contributions, Qualified Non-Elective 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.”

       

      12.           Section
7.04.2(c)(iii) of the Plan is hereby amended by adding the following to the end
thereof:

       

      “Notwithstanding
the foregoing, a Participant who receives a distribution of Pre-Tax
Contributions after December 31, 2001, on account of hardship shall be
prohibited from making Pre-tax Contributions and all other Employee
contributions under this and all other plans of the Company for a period of six
(6) months after receipt of the distribution.  A Participant who
receives a distribution of Pre-Tax Contributions in calendar year 2001 on
account of hardship shall be prohibited from making Pre-tax Contributions and
all other Employee contributions under this and all other plans of the Company
for the period specified in the provisions of the Plan relating to suspension of
Pre-Tax Contributions that were in effect prior to this amendment”

       

      13.           The
Plan is hereby amended by adding the following as new Section 8.07 and
renumbering existing Sec 8.07 accordingly:

       

      “8.07
Minimum Distribution Requirements Effective January 1, 2002.

       

      
        
          
          

        

        
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      (a)           General
Rules.

       

      
        	
                 
      

              	
                i.

              	
                Effective
      Date. The provisions of this Section 8.07 shall apply for purposes of
      determining minimum distributions for calendar years beginning in the 2002
      calendar year.

              


      

       

      
        	
                 
      

              	
                ii.

              	
                Coordination
      with Minimum Distribution Requirements Previously in Effect. If the total
      amount of 2002 required minimum distributions under the Plan made to the
      distributee prior to the effective date of this Section 8.07 equals or
      exceeds the required minimum distributions determined under this Section
      8.07, then no additional distributions will be required to be made for
      2002 on after such date to the distributee. If the total amount of 2002
      required minimum distributions under the Plan made to the distributee
      prior to the effective date of this Section 8.07 is less than the amount
      determined under this Section 8.07, then required minimum distributions
      for 2002 on after such date will be determined so that the total amount of
      required minimum distributions for 2002 made to the distributee will be
      the amount determined under this Section
8.07.

              


      

       

      
        	
                 
      

              	
                iii.

              	
                Precedence.
      The requirements of this Section 8.07 will take precedence over any
      inconsistent provisions of the
Plan.

              


      

       

      
        	
                 
      

              	
                iv.

              	
                Requirements
      of Treasury Regulations Incorporated. All distributions required under
      this Section 8.07 will determined and made in accordance with the Treasury
      Regulations under Section 401(a)(9) of the
Code.

              


      

       

      (b)           Time
and Manner of Distribution.

       

      
        	
                 
      

              	
                i.

              	
                Required
      Beginning Date. The  Participant’s entire interest will be
      distributed, or begin to be distributed, to the Participant no later than
      the Participant’s Required Beginning
Date.

              


      

       

      
        	
                 
      

              	
                ii.

              	
                Death
      of a Participant Before Distributions Begin.  If the Participant
      dies before distributions begin, the Participant’s entire interest will be
      distributed, or begin to be distributed, no later than as
      follows:

              


      

       

      
        	
                 
      

              	
                (A)

              	
                If
      the Participant has a Designated Beneficiary(ies), the Participant’s
      entire interest will be distributed to the Designated Beneficiary(ies) by
      December 31 of the calendar year containing the fifth anniversary of the
      Participant’s death. If the Participant’s surviving spouse is the
      Participant’s sole Designated Beneficiary and the surviving spouse dies
      after the Participant but before distributions to either the Participant
      or the surviving spouse begin, this election will apply as if the
      surviving spouse were the
Participant.

              


      

       

      
        	
                 
      

              	
                (B)

              	
                If
      there is no Designated Beneficiary as of September 30 of the year
      following the year of the Participant’s death, the Participant’s entire
      interest will be distributed by December 31 of the calendar year
      containing the fifth anniversary of the Participant’s
    death.

              


      

       

      
        
          
          

        

        
          97

          
            

          

        

        
          
          

        

      

       

      For
purposes of this Section 8.07(b) and Section 8.07(d) unless Section
8.07(b)(ii)(B) applies, distributions are considered to begin on the
Participant’s Required Beginning Date. If 8.07(b)(ii)(B), the date distributions
are considered to begin on the date distributions are required to the surviving
spouse under 8.07(b)(ii)(A).  If distributions under an annuity
purchased from an insurance company irrevocably commence to the Participant
before the Participant’s Required Beginning Date (or to the Participant’s
surviving spouse before the date distributions are required to begin to the
surviving spouse under Section 8.07(b)(ii)(A)), the date distributions are
considered to begin is the date distributions actually commence.

       

      
        	
                 
      

              	
                iii.

              	
                Form
      of Distribution. Unless the Participant’s interest is distributed in the
      form of an annuity purchased from an insurance company or in a single sum
      on or before the Required Beginning Date, as of the first Distribution
      Calendar Year distributions will be made in accordance with Sections
      8.07(c) and (d).  If the Participant’s interest is distributed
      in the form of an annuity purchased from an insurance company,
      distributions thereunder will be made in accordance with the requirements
      of Section 401(a)(9) of the Code and the Treasury Regulations
      thereunder.

              


      

       

      (c)           Required
Minimum Distributions During Participant’s Lifetime.

       

      
        	
                 
      

              	
                i.

              	
                Amount
      of Required Minimum Distributions For Each Distribution Calendar Year.
      During the Participant’s lifetime, the minimum amount that will be
      distributed for each Distribution Calendar Year is the lesser
      of:

              


      

       

      
        	
                 
      

              	
                (A)

              	
                The
      quotient obtained by dividing the Participant’s Account Balance by the
      distribution period in the Uniform Lifetime Table set forth in Treasury
      Regulation Section 1.401 (a)(9)-9, using the Participant’s age as of the
      Participant’s birthday in the Distribution Calendar Year;
    or

              


      

       

      
        	
                 
      

              	
                (B)

              	
                If
      the Participant’s sole Designated Beneficiary for the Distribution
      Calendar Year is the Participant’s spouse, the quotient obtained by
      dividing the Participant’s Account Balance by the number in the Joint and
      Last Survivor Table set forth in Treasury Regulation Section 1.401
      (a)(9)-9, using the Participant’s and the spouse’s attained ages as of the
      Participant’s and spouse’s birthdays in the Distribution Calendar
      Year.

              


      

       

      
        	
                 
      

              	
                ii.

              	
                Lifetime
      Required Minimum Distributions Continue Through Year of Participant’s
      Death.  Required minimum distributions will be determined under
      this Section 8.07(h) beginning with the first Distribution Calendar Year
      and up to and including the Distribution Calendar Year that includes the
      Participant’s date of death.

              


      

       

      (d)           Required
Minimum Distributions After Participant’s Death.

       

      
        	
                 
      

              	
                i.

              	
                Death
      On or After Date Distributions
Begin.

              


      

       

      
        
          
          

        

        
          98

          
            

          

        

        
          
          

        

      

       

      
        	
                 
      

              	
                (A)

              	
                Participant
      Survived by Designated Beneficiary.  If the Participant dies on
      or after the date distributions begin and there is a Designated
      Beneficiary, the minimum amount that will be distributed for each
      Distribution Calendar Year after the year of the Participant’s death is
      the quotient obtained by dividing the Participant’s Account Balance by the
      longer of the remaining life expectancy of the Participant or the
      remaining life expectancy of the Participant’s Designated Beneficiary,
      determined as follows:

              


      

       

      
        	
                 
      

              	
                (1)

              	
                The
      Participant’s remaining life expectancy is calculated using the age of the
      Participant in the year of death, reduced by one for each subsequent
      year.

              


      

       

      
        	
                 
      

              	
                (2)

              	
                If
      the Participant’s surviving spouse is the Participant’s sole Designated
      Beneficiary, the remaining life expectancy of the surviving spouse is
      calculated for each Distribution Calendar Year after the year of the
      Participant’s death using the surviving spouse’s age as of the spouse’s
      birthday in that year.  For Distribution Calendar Years after
      the year of the surviving spouse’s death, the remaining life expectancy of
      the surviving spouse is calculated using the age of the surviving spouse
      as of the spouse’s birthday in the calendar year of the spouse’s death,
      reduced by one for each subsequent calendar
  year.

              


      

       

      
        	
                 
      

              	
                (3)

              	
                If
      the Participant’s surviving spouse is not the Participant’s sole
      Designated Beneficiary, the Designated Beneficiary’s remaining life
      expectancy is calculated using the age of the Designated Beneficiary in
      the year following the year of the Participant’s death, reduced by one for
      each subsequent calendar year.

              


      

       

      
        	
                 
      

              	
                (B)

              	
                No
      Designated Beneficiary.  If the Participant dies on or after the
      date distributions begin and there is no Designated Beneficiary as of the
      September 30 of the year after the year of the Participant’s death, the
      minimum amount that will be distributed for each Distribution Calendar
      Year after the year of the Participant’s death is the quotient obtained by
      dividing the Participant’s Account Balance by the Participant’s remaining
      life expectancy calculated using the age of the Participant in the year of
      death, reduced by one for each subsequent
year.

              


      

       

      
        	
                 
      

              	
                ii.

              	
                Death
      Before Date Distributions Begin.

              


      

       

      
        	
                 
      

              	
                (A)

              	
                Participant
      Survived by Designated Beneficiary. If the Participant dies before the
      date distributions begin and there is a Designated Beneficiary, the
      minimum amount that will be distributed for each Distribution Calendar
      Year after the year of the Participant’s death is the quotient obtained by
      dividing the Participant’s Account Balance by the remaining life
      expectancy of the Participant’s Designated Beneficiary, determined as
      provided in Section 8.07(d)(i).

              


      

       

      
        
          
          

        

        
          99

          
            

          

        

        
          
          

        

      

       

      
        	
                 
      

              	
                (B)

              	
                No
      Designated Beneficiary.  If the Participant dies before the date
      distributions begin and there is no Designated Beneficiary as of September
      30 of the year following the year of the Participant’s death, distribution
      of the Participant’s entire interest will be completed by December 31 of
      the calendar year containing the fifth anniversary of the Participant’s
      death.

              


      

       

      
        	
                 
      

              	
                (C)

              	
                Death
      of Surviving Spouse Before Distributions to Surviving Spouse Are Required
      To Begin.  If the Participant dies before the date distributions
      begin, the Participant’s surviving spouse is the Participant’s sole
      Designated Beneficiary, and the surviving spouse dies before distributions
      are required to begin to the surviving spouse under Section
      8.07(b)(ii)(A), this Section 8.07(d)(ii) will apply as if the surviving
      spouse were the Participant.

              


      

       

      (e)           Definitions.

       

      
        	
                 
      

              	
                i.

              	
                Designated
      Beneficiary.  The individual who is designated as the
      Beneficiary under Section 1.09 the Plan and is the Designated Beneficiary
      under Section 401(a)(9) of the Code and Section 1.401(a)(9)-1, Q&A-4,
      of the Treasury Regulations.

              


      

       

      
        	
                 
      

              	
                ii.

              	
                Distribution
      Calendar Year.  A calendar year for which a minimum distribution
      is required.  For distributions beginning before the
      Participant’s death, the first Distribution Calendar Year is the calendar
      year immediately preceding the calendar year which contains the
      Participant’s Required Beginning Date.  For distributions
      beginning after the Participant’s death, the first Distribution Calendar
      Year is the calendar year in which distributions are required to begin
      pursuant to Section 8.07(b)(ii).  The required minimum
      distribution for the Participant’s first Distribution Calendar Year will
      be made on or before the Participant’s Required Beginning
      Date.  The required minimum distribution of other Distribution
      Calendar Years, including the required minimum distribution for the
      Distribution Calendar Year in which the Participant’s Required Beginning
      Date occurs, will be made on or before December 31 of that Distribution
      Calendar Year.

              


      

       

      
        	
                 
      

              	
                iii.

              	
                Life
      Expectancy.  Life expectancy as computed by use of the Single
      Life Table in Section 1.401(a)(9)-9 of the Treasury
      Regulations.

              


      

       

      
        	
                 
      

              	
                iv.

              	
                Participant’s
      Account Balance.  The account balance as of the last valuation
      in the calendar year (valuation calendar year) increased by the amount of
      any contributions made and allocated or forfeitures allocated to the
      account balance as of the date in the valuation calendar year after the
      valuation date and decreased by distributions made in the valuation
      calendar year after the valuation date.  The Account Balance in
      the valuation calendar year includes any amounts rolled over or
      transferred to the Plan either in the valuation calendar year or in the
      distribution calendar year if distributed or transferred in the valuation
      calendar year.

              


      

       

      
        
          
          

        

        
          100

          
            

          

        

        
          
          

        

      

       

      
        	
                 

              	v.	
                Required
      Beginning Date. The date specified in Section 8.06 of the
      Plan.”

              
	 	 	 
	 	
                14.  

              	
                Article
      IX of the Plan is hereby amended by adding the following new section as
      Section 9.05:

              
	 
	 	 	
                “SECTION 9.05.
      MODIFICATION OF TOP-HEAVY RULES.

              	 
	 	 	 	 	 
	 	 	
                (a)

              	
                Notwithstanding
      the foregoing, this Section shall apply for purposes of determining
      whether the Plan is a top-heavy Plan under Section 416(g) of the Code for
      Plan Years beginning after December 31, 2001, and whether the Plan
      satisfies the minimum benefits requirements of Section 416(c) of the Code
      for such years.

              	 
	 	 	 	 	 
	 	 	(b) 	Determination of
      Top-Heavy Status.	 
	 	 	 	 	 
	 	
                i.

              	
                Key
      Employee Key. Employee means any Employee or former Employee (including
      any deceased Employee) who at any time during the Plan Year that includes
      the determination date was an officer of the Employer having Annual
      Compensation greater than $130,000 (as adjusted under Section 416(i)(l) of
      the Code for Plan Years beginning after December 31, 2002), a 5-percent
      owner of the Employer, or a 1-percent owner of the Employer having Annual
      Compensation of more than $150,000.  For this purpose, annual
      Compensation means compensation within the meaning of Section 415(c)(3) of
      the Code.  The determination of who is a Key Employee will be
      made in accordance with Section 416(i)(1) of the Code and the applicable
      regulations and other guidance of general applicability issued
      thereunder.

              
	 	 	 	 	 
	 	
                ii.

              	
                Determination
      of Present Values and Amounts. This Section (ii) shall apply for purposes
      of determining the present values of accrued benefits and the amounts of
      Account Balances of Employees as of the determination
  date.

              
	 	 	 	 	 
	 	 	
                (A)

              	
                Distributions
      During Year Ending on the Determination Date.  The present
      values of accrued benefits and the amounts of Account Balances of an
      Employee as of the determination date shall be increased by the
      distributions made with respect to the Employee under the Plan and any
      Plan aggregated with the Plan under Section 416(g)(2) of the Code during
      the 1-year period ending on the determination date.  The
      preceding sentence shall also apply to distributions under a terminated
      plan which, had it not been terminated, would have been aggregated with
      the Plan under Section 416(g)(2)(A)(i) of the Code.  In the case
      of a distribution made for a reason other than separation from service,
      death, or disability, this provision shall be applied by substituting
      “5-year period” for “1-year
period.”

              


      

      
         

        
          
          

        

        
          101

          
            

          

        

        
          
          

        

      

       

      
        	
                 
      

              	
                (B)

              	
                Employees
      Not Performing Services During Year Ending on the Determination
      Date.  The accrued benefits and accounts of any individual who
      has not performed services for the Employer during the 1-year period
      ending on the determination date shall not be taken into
      account.

              


      

       

      (c)           Minimum
Benefits.

       

      
        	
                 
      

              	
                i.

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

              


      

       

      
        	
                 
      

              	
                ii.

              	
                Minimum
      Benefits for Employees Also Covered Under Another Plan.  If a
      Non-Key Employee Participant is a Participant in this Plan and in another
      plan that is part of the top-heavy group, the minimum benefit will be
      provided under the other Plan.”

              


      

       

      IN WITNESS WHEREOF, the
Employer has caused this amendment to be adopted by its duly authorized
representative as of the dates set forth herein;

       

      
        
          
            	 
      	
                    THE
      TALBOTS, INC.

                  
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
                    By:

                  	 
      


          

        

      

       

      Attest:

       

      By:

       

      
        
          
          

        

        
          102

          
            

          

        

        
          
          

        

      

       

      AMENDMENT
NO. 2 TO THE

      TALBOTS,
INC. RETIREMENT SAVINGS VOLUNTARY PLAN

       

      The
Talbots, Inc. Retirement Savings Voluntary Plan (the “Plan”) is hereby amended
as follows, effective as of the dates indicated herein:

       

      1.           Effective
January 1, 1997, Section 1.61 of the Plan is hereby amended by adding the
following to the end of the first sentence thereof:

       

      “Section
415 Compensation shall also include any salary reductions made pursuant to Code
Section 125.”

       

      2.           Effective
January 1, 2001, Section 1.61 of the Plan is hereby further amended by adding
the following to the end thereof:

       

      “For Plan
Years beginning on or after January 1, 2001, Compensation paid or made available
during such Plan Year shall include elective amounts that are not includible in
the gross income of the Employee by reason of Code Section
132(f)(4).”

       

      3.           Effective
January 1, 1997, Section 3.04.4(c) of the Plan is hereby amended by deleting the
first sentence in its entirety and replacing it with the following:

       

      “If, as a
result of the estimation of the Participant’s Compensation, as a result of a
forfeiture allocation, or as a result of a reasonable error in determining the
amount of Pre-tax Contributions that may be made with respect to any Participant
under the limits of Code Section 415, an allocation in excess of such amount
exists, the excess shall be disposed of as follows:”

       

      
        
          
            
              	 
      	
                      THE
      TALBOTS, INC.

                    
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
                      By:

                    	 
      


            

          

        

                                                      

      

      Attest:

      By:

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      AMENDMENT
NO. 3 TO THE

      TALBOTS,
INC. RETIREMENT SAVINGS VOLUNTARY PLAN

       

      The
Talbots, Inc. Retirement Savings Voluntary Plan (the “Plan”) is hereby amended
as follows, effective as of July 1, 2003:

       

      1.           Section
7.04.2(a) of the Plan is hereby amended by deleting subsection (i) in its
entirety and reordering existing subsection (ii) accordingly.

       

      2.           Section
7.04.3 of the Plan is hereby deleted in its entirety and replaced with the
following:

       

      “Any
Participant may withdraw all or a portion of his or her Rollover Contribution
Account and his or her Voluntary Non-Deductible Contribution
Account.”

       

      3.           Section
7.04.4 of the Plan is hereby amended by deleting subsection (a) in its entirety
and reordering existing subsections (b) and (c) accordingly.

       

      
        
          
            
              	 
      	
                      THE
      TALBOTS, INC.

                    
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
                      By:

                    	 
      


            

          

        

                                                               

      

      Attest:

      By:

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      AMENDMENT
NO. 4 TO THE

      TALBOTS,
INC. RETIREMENT SAVINGS VOLUNTARY PLAN

       

      The
Talbots, Inc. Retirement Savings Voluntary Plan (the Plan”) is hereby amended as
follows, effective as of the dates indicated below:

      1.           Effective
as of May 17, 2004, Section 1.38 of the Plan is hereby amended by deleting
subsection (f) in its entirety.

      


      2.           Effective
as of May 17, 2004, the Plan is hereby amended by substituting the term “Spouse”
in each place that the term “spouse” appears, and Section 1.63 of the Plan is
deleted in its entirety and replaced with the following;

      


      ‘“Spouse’
means a person of the opposite sex who is the husband or wife of the Participant
on the date in question provided, however, that a former Spouse will be treated
as the Participant’s Spouse to the extent provided under a Qualified Domestic
Relations Order.”

       

      3.           Effective
October 3, 2005, Section 3.03.2 of the Plan is hereby amended by adding the
following to the end thereof:

      


      “Notwithstanding
anything in this Section 3.03.2 to the contrary, with respect to amounts
received as a Rollover Contribution by the Trustee directly from the trustee of
another plan on behalf of an Employee, the Employee shall not be required to
provide the Trustee with documentation or obtain a signature from the Employee’s
prior employer’s plan administrator as to the qualified status of the prior
employer’s plan. The Employee shall certify as to the qualified status of the
plan from which the rollover is received.”

       

      4.           Effective
March 28, 2005, Section 8.08 of the Plan is hereby amended by adding the
following to the end thereof:

      


      “Effective
March 28, 2005, in the event of a mandatory distribution greater than $1,000 in
accordance with the provisions of this Section 8.08, if the Participant does not
elect to have such distribution paid directly to an eligible retirement plan
specified by the Participant in a direct rollover or to receive the distribution
directly, then the distribution will be paid in a direct rollover to an
individual retirement plan designated by the Plan Administrator.”

       

      5.           Effective
September 27, 2005, Section 15.14 of the Plan is hereby amended by adding the
following to the end thereof:

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      “If a
distribution or withdrawal check issued to a Participant or Beneficiary has been
outstanding for more than 180 days and reasonable efforts to locate the
Participant or Beneficiary have been unsuccessful, the amount of the check will
be treated as a forfeiture under the Plan. In the event that such Participant or
Beneficiary makes a claim for the benefit forfeited in accordance with the
preceding sentence, such benefit will be restored. The restored benefit shall
equal the amount of the benefit on the date of forfeiture. The benefit shall be
restored based on the following order of priority:

       

      (a)           from
forfeitures arising under Article V; and

       

      (b)           from
additional Employer Company contributions made in order to restore such
benefit.”

       

      
        
           

        

      

      *            *            *

       

      IN
WITNESS WHEREOF, The Talbots, Inc. has caused this amendment to be adopted by
its duly authorized representative as of the date set forth herein:

       

       

      
        
          
            
              
                
                  	 
      	
                          THE
      TALBOTS, INC.

                        
	 
      	 
      	 
      
	 
      	
                          By:

                        	 
      


                

                 

                Attest:

              

            

          

        

      

       

      By:

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

       

      AMENDMENT
NO. 5 TO THE

      TALBOTS
INC. RETIREMENT SAVINGS VOLUNTARY PLAN

       

      The
Talbots, Inc. Retirement Savings Voluntary Plan (the “Plan”) is hereby amended
as follows effective as of May 3, 2006:

       

      1.           Section
1.28 of the Plan is hereby amended by adding the following to the end
thereof:

       

      “Effective
May 3, 2006, an Employing Company shall not include J. Jill.”

       

      2.           Article
I of the Plan is hereby amended by adding the following as new Section 1.40 and
renumbering existing Sections 1.40 through 1.74 accordingly:

       

      “1.40 ‘J.
Jill’ means The J. Jill Group, Inc.”

       

      3.           Existing
Section 1.74 of the Plan is hereby amended by adding the following to the end
thereof:

       

      “Effective
May 3, 2006, Year of Eligibility Service shall include prior service with J.
Jill for Participants who were employed by J Jill on May 3, 2006.”

       

      4.           Existing
Section 1.75 of the Plan is hereby amended by adding the following to the end
thereof:

       

      “Effective
May 3, 2006, Year of Vesting Service shall include prior service with J. Jill
for Participants who were employed by J. Jill on May 3, 2006.”

       

      *    *     *

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      IN
WITNESS WHEREOF, The Talbots, Inc. has caused this amendment to be adopted by
its duly authorized representative as of the date set forth herein:

       

      
        
          	 
      	
                  THE
      TALBOTS, INC.

                
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
                  By:

                	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
                  Date:

                	 
      


        

      

       

       

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

       

      AMENDMENT
NO. 6 TO THE

      TALBOTS,
INC. RETIREMENT SAVINGS VOLUNTARY PLAN

       

      The
Talbots, Inc. Retirement Savings Voluntary Plan (the “Plan”) is hereby amended
as follows, effective as of January 1, 2006:

       

      1.           Section
3.02.2(d)(iii) of the Plan is hereby amended by adding the following to the end
thereof:

       

      “For the
2006 and 2007 Plan Years, Excess Individual Pre-tax Contributions shall be
adjusted for any income or loss between the end of the Plan Year and the date of
distribution (the “GAP Period”). The income or loss allocable to Excess
Individual Pre-tax Contributions during the GAP Period is the sum
of:  (1) the income or loss allocable to the Participant’s Pre-tax
Contribution Account for the taxable year multiplied by a fraction, the
numerator of which is such Participant’s Excess Individual Pre-tax Contributions
for the year and the denominator is the Participant’s account balance
attributable to Pre-tax Contributions without regard to any income or loss
occurring during such taxable year; and (2) 10 percent of the amount determined
under (1) multiplied by the number of whole calendar months between the end of
the Participant’s taxable year and the date of distribution, counting the month
of distribution if distribution occurs after the 15th of such
month.”

       

      2.           Section
3.02.1(h)(iii) of the Plan is hereby amended by adding the following to the end
thereof:

       

      “For the
2006 and 2007 Plan Years, Excess Aggregate Pre-tax Contributions shall be
adjusted for any income or loss during the GAP Period as defined in Section
3.02.2(d)(iii). The income or loss allocable to Excess Aggregate Pre-tax
Contributions during the GAP Period is the sum of: (1) the income or loss
allocable to the Participant’s Pre-tax Contribution Account (and, if applicable,
the Qualified Non-Elective Contribution Account or the Qualified Matching
Contribution Account or both) for the Plan Year multiplied by a fraction, the
numerator of which is such Participant’s Excess Aggregate Pro-tax Contributions
for the year and the denominator is the Participant’s account balance
attributable to Pre-tax Contributions (and Qualified Non-Elective Contributions
or Qualified Matching Contributions, or both, if any of such contributions are
included in the ADP test) as of the beginning of the Plan Year and Pre-tax
Contributions (and Qualified Non-Elective Contributions or Qualified Matching
Contributions, or both, if applicable) made during the Plan Year; and (2) 10
percent of the amount determined under (1) multiplied by the number of whole
calendar months between the end of the Plan Year and the date of distribution,
counting the month of distribution if distribution occurs after the 15th of such
month.”

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      3.           Section
3.03.1(f)(iii) of the Plan is hereby amended by adding the following to the end
thereof:

       

      “For the
2006 and 2007 Plan Years, Excess Aggregate 401(m) Contributions shall be
adjusted for any income or loss during the GAP Period as defined in Section
3.02.2(d)(iii). The income or loss allocable to Excess Aggregate 401(m)
Contributions during the GAP Period is the sum of: (1) the income or loss
allocable to the Participant’s Voluntary Non-deductible Contribution Account and
the Matching Contribution Account, and, if applicable, Qualified Matching
Contribution Account, Qualified Non-Elective Contribution Account and Pre-tax
Contribution Account for the Plan Year (provided such accounts are not used in
the ADP test) multiplied by a fraction, the numerator of which is such
Participant’s Excess Aggregate 401(m) Contributions for the year and the
denominator is the Participant’s account balance(s) attributable to Voluntary
Non-deductible Contributions and Matching Contributions without regard to any
income or loss occurring during such Plan Year; and (2) 10 percent of the amount
determined under (1) multiplied by the number of whole calendar months between
the end of the Plan Year and the date of distribution, counting the month of
distribution if distribution occurs after the 15th of such month.”

       

      4.           Section
5.06 of the Plan is hereby amended by adding the following to the end
thereof:

       

      “With
respect to an Employee who has made Pre-tax Contributions or Voluntary
Non-deductible Contributions to the Plan, or who is vested (partially or fully)
in his or her Flat Contribution account, and who incurs a severance from
employment and is subsequently reemployed as an Employee, the Years of
Eligibility Service and Years of Vesting Service he or she had at such severance
from employment shall be reinstated upon reemployment.”

       

      *  *  *

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

       

       

      IN WITNESS WHEREOF, The
Talbots, Inc. has caused this amendment to be adopted by its duly authorized
representative as of the date set forth herein:

      
         

        
          
            	 
      	
                    THE
      TALBOTS, INC.

                  
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
                    By:

                  	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
                    Date:

                  	 
      


          

        

      

       

      Attest:

       

      By:

       

       

       

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

       

      AMENDMENT
NO. 7 TO THE

      TALBOTS,
INC. RETIREMENT SAVINGS VOLUNTARY PLAN

       

      The
Talbots, Inc. Retirement Savings Voluntary Plan (the “Plan”) is hereby amended
as follows, effective as of January 1, 2007:

       

      1.           Section
7.04.2(b) of the Plan is hereby amended by adding the following to the end
thereof:

       

      “Effective
January 1, 2007, withdrawals under this Section 7.04.2 shall also be permitted
for payments for funeral or burial expenses for the Participant’s deceased
parent, Spouse, child or dependent (as defined in Section 152 of the Code
without regard to Section 152(d)(i)(B) of the Code), and expenses to repair
damage to the Participant’s principal residence that would qualify for a
casualty loss deduction under Section 165 of the Code (determined without regard
to whether the loss exceeds 10 percent of adjusted gross income).”

       

      *  *  *

       

      IN WITNESS WHEREOF, The
Talbots, Inc. has caused this amendment to be adopted by its duly authorized
representative as of the date set forth herein:

       

      
        
          
            	 
      	
                    THE
      TALBOTS, INC.

                  
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
                    By:

                  	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
                    Date:

                  	 
      


          

        

      

       

      Attest:

       

      By:

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      AMENDMENT
NO. 8 TO THE

      TALBOTS,
INC. RETIREMENT SAVINGS VOLUNTARY PLAN

       

      The
Talbots, Inc. Retirement Savings Voluntary Plan (the “Plan”) is hereby amended
as follows, effective as of the dates indicated below:

       

      1.           Effective
January 1, 2008, Section 1.21 of the Plan is hereby amended by adding the
following to the end thereof:

       

      “Effective
January 1, 2008, Distributee shall include a non-spouse Beneficiary of the
Participant, but only with respect to a direct rollover to an Individual
Retirement Account.”

       

      2.           Effective
January 1, 2008, Section 1.25 of the Plan is hereby amended by adding the
following to the end thereof:

       

      “Effective
January 1, 2008, Employee shall not include a temporary employee (as classified
in the Employing Company’s payroll records).”

       

      3.           Effective
January 1, 2008, Section 1.25 of the Plan is hereby amended by adding the
following to the end thereof:


      “Notwithstanding
anything in the Plan to the contrary, Employee shall not include (i) an
individual who is employed by a Jill brand business unit, as classified by the
particular business unit.”

       

      4.           Effective
January 5, 2008, Section 1.28 of the Plan is hereby amended by adding the
following to the end thereof:

       

      “Effective
January 5, 2008, Employing Company shall include The Talbots Group, Limited
Partnership, Talbots Incorporated, Talbots Import, LLC, J. Jill LLC, Talbots
Classics National Bank and Talbots Classics Finance Company, but only with
respect to otherwise eligible Employees.”

       

      5.           Effective
January 1, 2008, Section 1.74 of the Plan is hereby amended by adding the
following to the end thereof:

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      “With
respect to a Participant who transfers from one Employing Company to another
Employing Company, service with both Employing Companies shall be taken into
account for purposes of determining a Year of Eligibility Service.”

       

      6.           Effective
January 1, 2008, Section 1.75 of the Plan is hereby amended by adding the
following to the end thereof:

       

      “With
respect to a Participant who transfers from one Employing Company to another
Employing Company, service with both Employing Companies shall be taken into
account for purposes of determining a Year of Vesting Service.”

       

      7.           Effective
January 1, 2008, Section 2.01 of the Plan is hereby amended by adding the
following to the end thereof:

       

      “Effective
January 1, 2008, an Employee shall become a Participant in the Plan on the later
of (i) his or her Employment Commencement Date, or (ii) the date he or she
attains age eighteen (18). An Employee who transfers employment from a Jill
brand business unit to a Talbots brand business unit shall become a Participant
in the Plan on the later of the date (i) he or she transfers employment to a
Talbots brand business unit, or (ii) attains age eighteen (18).”

       

      8.           Effective
January 1, 2008, Section 3.01.1 of the Plan is hereby amended by adding the
following to the end thereof:

       

      “Effective
January 1, 2008, a Participant shall be eligible for Matching Contributions on
the first anniversary date of his or her Employment Commencement Date following
completion of one (1) Year of Eligibility Service.”

       

      9.           Effective
January 1,2008, Section 3.01.2 of the Plan is hereby amended by adding the
following to the end thereof:

       

      “Effective
January 1, 2008, a Participant shall be eligible for Flat Contributions on the
first anniversary date of his or her Employment Commencement Date following
completion of one (1) Year of Eligibility Service.”

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

       

      10.           Effective
January 1, 2008, Section 3.01.5(a) of the Plan is hereby amended by adding the
following to the end thereof:

       

      “Effective
January 1, 2008, a Participant shall be eligible for Matching Contributions on
the first anniversary date of his or her completion of one (1) Year of
Eligibility Service.”

       

      11.           Effective
January 1, 2008, Section 3.02.2(a)(i) of the Plan is hereby amended by adding
the following to the end thereof:

       

      “Notwithstanding
the foregoing, effective January 1, 2008, no Participant shall be permitted to
make Pre-Tax Contributions during a Plan Year in excess of 60% of the
Participant’s Compensation for such Plan Year. The maximum amount of Pre-Tax
Contributions plus Voluntary Non-deductible Contributions per Plan Year shall be
limited to 60% of the Participant’s Compensation for the Plan
Year.”

       

      12.           Effective
January 1, 2008, Section 3.02.2(b) of the Plan is hereby amended by adding the
following to the end thereof:

       

      “Effective
January 1, 2008, a Participant shall be eligible to make Pre-Tax Contributions
as of the first day of the first payroll period following his or her Employment
Commencement Date.”

       

      13.           Effective
January 1, 2008, Section 3.03.1(a)(iii) of the Plan is hereby amended by adding
the following to the end thereof:

       

      “Notwithstanding
the foregoing, effective January 1, 2008, the maximum amount of Voluntary
Non-deductible Contributions plus Pre-Tax Contributions per Plan Year shall be
limited to 60% of the Participant’s Compensation for the Plan
Year.”

       

      14.           Effective
January 1, 2008, the first paragraph of Section 7.04 of the Plan hereby deleted
and replaced with the following:

       

      “Upon the
application by any Participant, the Plan Administrator shall direct the Trustees
to make distributions to the Participant pursuant to Sections 7.04.1, 7.04.2 or
7.04.3, subject to the provisions of such Sections and of Section 7.04.4, while
the Participant remains in the Service of a Talbots brand business unit or a
Jill brand business unit of an Employing Company.”

       

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

       

      15.           Effective
January 1, 2008, Section 7.04.2(b) of the Plan is hereby amended by adding the
phrase “, primary Beneficiary” immediately after the term “Spouse” in each place
that the term “Spouse” appears.

       

      16.           Effective
January 1, 2008, Section 15.01(d) of the Plan is hereby amended by deleting the
second sentence thereof and replacing it with the following:

       

      “If a
Participant or alternate payee fails to timely make an election pursuant to this
Section 15.01, his or her contributions and accounts shall be invested in the
Fidelity Freedom Fund based on such Participant’s Normal Retirement Date. If the
Participant’s birth date is not available, his or her contributions and accounts
shall be invested in the American Funds Balance Fund.”

       

      17.           Effective
January 1, 2008, Section 16.01 of the Plan is hereby amended by adding the
following to the end thereof:

       

      “For the
avoidance of any doubt, a Participant who transfers from one Talbots brand
business unit to another Talbots brand business unit, or to a Jill brand
business unit, may request a loan under this Article XVI.”

       

      18.           Effective
January 1,2008, Section 16.02(d) of the Plan is hereby amended by adding the
following to the end of the second paragraph thereof:

       

      “Notwithstanding
anything in the Plan to the contrary, a Participant who transfers from one
Talbots brand business unit to another Talbots brand business unit, or to a Jill
brand business unit, shall continue to make loan repayments through payroll
deductions. In the event that repayment through payroll deductions is not
administratively feasible, the Participant shall remit a personal check to the
Plan Administrator in the same amount and in the same frequency as were the loan
repayments made through payroll deduction.”

       

      *             *             *

       

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

       

      IN
WITNESS WHEREOF, The Talbots, Inc. has caused this amendment to be adopted by
its duly authorized representative as of the date set forth herein:

       

       

      
        
          
            
              
                	 
      	
                        THE
      TALBOTS, INC.

                      
	 	 	 
	 
      	
                        By:

                      	 
      
	 	 	 
	 
      	
                        Date:

                      	 
      


              

            

          

        

      

      


       

      


       

      


      5