**BMCINDUSTRIES, INC.**

**SAVINGSAND PROFIT SHARING PLAN**

**2001revision**

 

**Second Declaration of Amendment**

 

Pursuant to the retained power of amendment contained inSection 11.2 of the BMC Industries, Inc. Savings and Profit Sharing Plan - 2001Revision, the undersigned hereby amends the Plan as described below:

 

1.              Section 3.3 of the Plan is amended effective January 1, 2002,to read as follows:

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"3.3     ***Matching Contributions***.  

 

(a)       Subject to Subsections (b) and (d) andthe limitations described in Article 9, the Participating Employer of aneligible Active Participant will make a Matching Contribution on behalf of theActive Participant for a calendar quarter in an amount equal to:

(i)        100 percent of the amount of the ActiveParticipant's 401(k) Contributions for each calendar quarter up to threepercent of the Participant's Eligible Earnings for such calendar quarter, and

 

(ii)      50 percent of the amount of the Active Participant's 401(k) Contributions foreach calendar quarter that exceeds three percent of the Active Participant'sEligible Earnings for such calendar quarter and that does not exceed fivepercent of the Active Participant's Eligible Earnings for such calendar quarter.

It is intended that such MatchingContributions will be used by the Participating Employer to satisfy the safeharbor provisions of Code sections 401(k)(12) and 401(m)(11).

 

(b)       To be eligible to share in theParticipating Employer's Matching Contribution for a given calendar quarter, aParticipant must have, on or before the last day of the calendar quarter,entered the Plan as a Participant for the purposes of having MatchingContributions made on his or her behalf, received Eligible Earnings for thecalendar quarter from the Participating Employer and made 401(k) Contributions.

 

(c)       A Participating Employer's MatchingContributions for a Plan Year will be paid to the Trustee on such date or datesduring or following such Plan Year as the Participating Employer may elect butin no case more than 12 months after the end of the Plan Year.  A Participating Employer's MatchingContributions for a calendar quarter that are used to satisfy the safe harborprovisions of Code sections 401(k)(12) and 401(m)(11) will be paid to theTrustee no later than the last day of the following calendar quarter.

 

(d)       No Matching Contribution will be madewith respect to any portion of a Participant's 401(k) Contributions returned tothe Participant pursuant to Article 9. For this purpose, 401(k) Contributions with respect to which no MatchingContributions are made for a Plan Year will be deemed to be the first suchcontributions returned to the Participant. If the Administrator determines that Matching Contributions that havebeen added to a Participant's Account should not have been added by reason ofthis subsection, the contributions, increased by Fund earnings or decreased byFund losses attributable to the contributions, as determined under Section 9.5,will be subtracted from the Account as soon as administratively practicableafter the determination is made and will be applied to satisfy the contributionobligations of the Participating Employer that made the excess contributionsfor the Plan Year for which the excess contributions were made.  If, because of the passage of time, theexcess cannot be applied in this way, the excess will be allocated, in thediscretion of the Administrator:

(i)        among the Matching Contribution Accountsof all Participants who made 401(k) Contributions for the Plan Year asQualified Employees of the Participating Employer in proportion to such 401(k)Contributions up to six percent of Eligible Earnings; or 

 

(ii)       as a corrective contribution pursuant toSection 3.6.

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(e)       Notwithstanding any other provision ofthis section to the contrary, a Participant covered by a collective bargainingagreement between his or her bargaining representative and a ParticipatingEmployer is eligible for Matching Contributions only if and to the extentprovided in the collective bargaining agreement.

 

(f)        No Matching Contributions will be madewith respect to After-Tax Contributions."

2.              Section 3.4(a) of the Plan is amended effective January 1,2002, to read as follows:

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"(a)      Each Participating Employer may make aProfit Sharing Contribution for a Plan Year on behalf of a Participant who hassatisfied the eligibility conditions specified in Subsection (b) for a PlanYear in an amount (if any) equal to the sum of:

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(i)        a percentage (if any) determined by theParticipating Employer's Board for the Plan Year of the aggregate EligibleEarnings for the Plan Year of all Participants eligible to share in thecontribution for the Plan Year plus

 

(ii)       an additional amount, if any, separatelydetermined by the Participating Employer's Board for each of its ParticipatingBusiness Units based on the annual profit performance of each ParticipatingBusiness Unit."

3.              Section 3.4(c) of the Plan is amended effective January 1,2002, to read as follows:

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"(c)      Subject to the limitations described inArticle 9, a Participating Employer's Profit Sharing Contribution for a PlanYear will be allocated among the Profit Sharing Contribution Accounts ofParticipants who have satisfied the eligibility conditions under Subsection (b)for the Plan Year as follows:

(i)        The Participating Employer'scontribution described in Subsection (a)(i) will be allocated to each eligibleParticipant as follows:

(1)       a dollar amount equal to 5.7% of the sumof each Participant's Eligible Earnings plus his or her Excess EligibleEarnings; or

 

(2)       if the Employer contribution is less thanthe amount in Clause (1) above, then each eligible Participant will beallocated a share of the Participating Employer's Profit Sharing Contributionin the same proportion that the sum of such Participant's Eligible Earningsplus his or her Excess Eligible Earnings for the Plan Year bears to the sum ofthe Eligible Earnings plus Excess Eligible Earnings of all such eligibleParticipants; or

 

(3)       any remaining contribution will beallocated among eligible Participants in the same proportion that eachParticipant's Eligible Earnings for the Plan Year bears to the total amount ofall eligible Participants' Eligible Earnings for that Plan Year.

(ii)       The Participating Employer's contributiondescribed in Subsection (a)(ii) with respect to a given Participating BusinessUnit will be allocated to each eligible Participant who received EligibleEarnings for the Plan Year with respect to services for the ParticipatingBusiness Unit (other than administrative services with respect to which he orshe is included in the Corporate Participating Business Unit unless thecontribution relates to the Corporate Participating Business Unit) in the samemanner as under Subsection (c)(i) provided the allocations under thisSubsection (c)(ii) are determined after aggregating the contributions allocatedunder (c)(i) to those participants who are eligible to receive an allocationunder this Subsection (c)(ii) and the contributions to be allocated hereunder."

4.              Section 4.1(a)(iii) of the Plan is amended effective January1, 2002, to read as follows:

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"(iii)    A Matching Contribution Account, which willinclude the balance of his or her employer contribution account under priorprovisions of the Plan and to which there will be added any MatchingContributions made on the Participant's behalf, together with a subaccountestablished and maintained for a Participant in connection with any MatchingContributions made pursuant to Section 3.3(a) that are used to satisfy thedesigned-based safe harbor alternative described in Code section 401(k)(12)and/or the designed-based safe harbor alternative described in Code section401(m)(11), as provided under Sections 9.2, 9.3, and 9.4;"

5.              Section 5.1 of the Plan is amended effective February 1, 2002,to read as follows:

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"5.1     ***Establishmentof Investment Funds***.

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(a)       In order to allow each Participant todetermine the manner in which his or her Accounts will be invested, the Trusteewill maintain, within the Trust, an investment fund designated as the BMCCommon Stock Fund and three or more separate investment funds of such natureand possessing such characteristics as the Committee may specify from time totime.  Subject to Section 5.4(b), eachParticipant's Accounts will be invested in the investment funds in theproportions directed by the Participant in accordance with the procedures setforth in Sections 5.2 and 5.3.  TheCommittee may, from time to time, direct the Trustee to establish additionalinvestment funds or to terminate any existing investment fund.

 

(b)       Notwithstanding any other provision ofthe Plan to the contrary, the Committee may direct the Trustee to suspendParticipant investment activity (including such activity in connection with thewithdrawals, loans and distributions) in any or all investment funds, or imposespecial rules or restrictions of uniform application, for a period determinedby the Committee to be necessary in connection with:

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(i)        the establishment or termination of anyinvestment fund;

 

(ii)       the receipt by the Trustee from, ortransfer by the Trustee to, another trust of account balances in connectionwith an acquisition or divestiture or otherwise;

 

(iii)      a change of Trustee, investment manager orrecordkeeper; or

 

(iv)      such other circumstances determined by theCommittee as making such suspension or special rules or restrictions necessaryor appropriate."

6.              Section 5.4 of the Plan is amended effective February 1, 2002,to read as follows:

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"5.4     ***BMCCommon Stock Fund***.

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(a)       The Trustee will establish, as one of theinvestment funds under Section 5.1, a fund, designated as the BMC Common StockFund, which will be invested in shares of Company Stock except for such amountsof cash as the Committee determines to be necessary to satisfy short-termliquidity requirements and cash held pending acquisition of shares of CompanyStock.

 

(b)       Subject to Subsection (c), all amountscredited to a Participant's Matching Contribution Account prior to January 1,2002 will be invested only in the BMC Common Stock Fund.

 

(c)       Notwithstanding Subsection (b) -

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(i)        Not more than once each calendarquarter, a Participant who has attained age 55 may elect to transfer all or anyportion of his or her Matching Contribution Account from the BMC Common StockFund to one or more of the investment funds maintained pursuant to Section 5.1other than the BMC Common Stock Fund.  Theelection must be made in accordance with and is subject to Plan Rules and willbe effective as soon as administratively practicable after it is received bythe Administrator or the Administrator's designate.

 

(ii)       Not more than once each calendar quarter,a Participant who is an Employee and is not eligible to make directionspursuant to Subsection (c)(i) may elect to transfer up to 25 percent of his orher Matching Contribution Account from the BMC Common Stock Fund to one or moreof the investment funds maintained pursuant to Section 5.1 other than the BMCCommon Stock Fund.  A Participant mayonly make an election pursuant to this Subsection (c)(ii) if the portion ofthe  Participant's Matching ContributionAccount, excluding the Matching Contribution subaccount established pursuant toSection 4.1(a)(iii),invested in theBMC Common Stock Fund equals or exceeds 20 percent of the aggregate balance ofthe Participant's 401(k) Contribution Account, Matching Contribution Account,After-Tax Contribution Account and Rollover Account.  The election must be made in accordance with and is subject toPlan Rules and will be effective as soon as administratively practicable afterit is received by the Administrator or the Administrator's designate.

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(d)       TheBMC Qualified Benefits Plan Committee will direct the manner in which theshares of Company Stock represented by Participants' interests in the BMCCommon Stock Fund will be voted in connection with any action at which holdersof Company Stock are entitled to vote. In the event of a public tender or exchange offer for shares of CompanyStock, the BMC Qualified Benefits Plan Committee will direct whether or not theshares of Company Stock represented by the Participants' interests in the BMCCommon Stock Fund will be tendered or exchanged.

 

(e)       AParticipant who is subject to the reporting requirements of section 16 of theSecurities Exchange Act of 1934 (the "Exchange Act") with respect toCompany Stock may elect to make a transfer pursuant to Section 5.3, a withdrawalor plan loan pursuant to Article 6, a distribution pursuant to Article 8or any other "discretionarytransaction," as that term is defined under the Exchange Act, from theportion of his or her Account invested in Company Stock only if both of the followingconditions are satisfied.

(i)        Theelection to make such transfer or application for the withdrawal ordistribution must be made within the period between the third and twelfth days,inclusive, following the Company's release of its quarterly or annual financialdata in the manner described in Rule 16b-3(e)(1)(ii) of the Exchange Act.  Such election or application will be giveneffect at the same time as would other elections or applications made at thesame time.

 

(ii)       SuchParticipant has not made any election to transfer any portion of his or herAccount balance from Company Stock or received a withdrawal or distributionfrom the portion of his or her Account invested in Company Stock within thesix-month period immediately preceding the date on which such election is made."

7.              Section 7.1 of the Plan is amended effective January 1, 2002,to read as follows:

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"7.1     ***Vesting***.  

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(a)       A Participant always has a fully vestednonforfeitable interest in his or her 401(k) Contribution Account, After-TaxContribution Account, Matching Contribution Account, Rollover Account, ProfitSharing Plan Rollover Account and in the portion of his or her Profit SharingContribution Account credited to a subaccount described in Section 3.6.

 

(b)       A Participant will acquire a fully vestednonforfeitable interest in the portion of his or her Profit SharingContribution Account not described in Subsection (a) upon attaining his or herNormal Retirement Date while he or she is, or before he or she became, anEmployee.

 

(c)       A Participant will acquire a fully vestednonforfeitable interest in the portion of his Profit Sharing ContributionAccount not described in Subsection (a) if he or she dies or becomes Disabledwhile he or she is an Employee.

 

(d)       A Participant will acquire a fully vestednonforfeitable interest in the portion of his or her Profit Sharing Account notdescribed in Subsection (a) upon the Participant's Termination of Employmentfollowing the Participant's attainment of age 60 if the sum of his or her ageand full years of Vesting Service is at least 65.

 

(e)       A Participant will acquire a fully vestednonforfeitable interest in the portion of his or her Profit SharingContribution Account not described in Subsection (a) if the AffiliatedOrganization, Participating Business Unit, business unit, location or divisionat which the Participant is employed, permanently ceases operations or is soldor otherwise transferred through sale of stock or of business and assets, insuch manner that it no longer is, or is no longer owned by, an AffiliatedOrganization.

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(f)        A Participant will acquire a fullyvested nonforfeitable interest in the portion of his or her Profit SharingContribution Account not described in Subsection (a) upon a Change in Controlwith respect to the Company, which for purposes of this subsection means any ofthe following:

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(i)        The sale, lease, exchange, or othertransfer of all or substantially all of the assets of the Company, in onetransaction or in a series of related transactions, to any Person;

 

(ii)       The approval by the stock holders of theCompany of any plan or proposal for the liquidation or dissolution of theCompany;

 

(iii)      Any Person is or becomes the "beneficialowner" (as defined in Rule 13d-3 under the Exchange Act), directly orindirectly, of 50 percent or more of the combined voting power of the Company'soutstanding securities ordinarily having the right to vote at elections ofdirectors;

 

(iv)      Individuals who constitute the Company'sBoard of Directors on January 1, 1998 (the "Incumbent Board") ceasefor any reason to constitute at least a majority thereof, provided that anyperson becoming a director subsequent to January 1, 1998 whose election, ornomination for election, by the Company's stockholders, was approved by a voteof at least a majority of the directors comprising the Incumbent Board (eitherby a specific vote or by approval of the proxy statement of the Company inwhich such person is named as a nominee for director, without objection to suchnomination) will, for purposes of this clause (iv), be deemed to be a member ofthe Incumbent Board; or

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(v)       A change in control of a nature that isdetermined by independent legal counsel to the Company to be required to bereported (assuming such event has not been "previously reported") inresponse to Item 1(a) of the Current Report on Form 8-K, as in effect onJanuary 1, 1994, pursuant to section 13 or 15(d) of the Exchange Act, whetheror not the Company is then subject to such reporting requirement.

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For purposes of applying theforegoing, the term "Person" means and includes any individual,corporation, partnership, group, association or other "person," assuch term is used in section 14(d) of the Exchange Act, other than the Company,a wholly-owned subsidiary of the Company or any employee benefit plan(s)sponsored by the Company or a wholly-owned subsidiary of the Company.

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(g)       A Participant whose Profit SharingContribution Account is not otherwise fully vested will acquire a vestednonforfeitable interest in the portion of his or her Profit SharingContribution Account not described in Subsection (a) to the extent provided inthe following schedule:

| Full Years of Vesting Service

 

Less than Five Years  Five or More Years | VestedInterest  0%  100 %" |
|---------------------------------------------------------------------------------|--------------------------------------|

 

8.              Section 7.2 of the Plan is amended effective January 1, 2002,to read as follows:
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"7.2     ***ForfeitureUpon Distribution***.

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(a)       If a Participant receives a distributionof the entire vested balance of his or her Accounts after Termination ofEmployment and before he or she incurs five consecutive One-Year Breaks inService, the nonvested portions of the Participant's Profit SharingContribution Account will, at the time of such distribution, be forfeited.  A Participant who has no vested interest inhis or her Profit Sharing Contribution Account when he or she terminatesemployment will be deemed to have received a distribution of the entire vestedbalance of the Account at the time of his or her Termination of Employment.

 

(b)       If a Participant described in Subsection(a) received a distribution of less than the entire balance of his or herAccounts, resumes employment as a Qualified Employee and repays to the Trusteethe full amount distributed, other than the portion of the distributionattributable to his or her After-Tax Contribution Account, Rollover Account andProfit Sharing Plan Rollover Account balances, before the earlier of (1) fiveyears following the date of reemployment as a Qualified Employee or (2) thedate on which he or she incurs five consecutive One-Year Breaks in Servicefollowing the distribution, then, the amount of any forfeitures will berestored to the Participant's Profit Sharing Contribution Account, unadjustedfor interest or any change in value occurring after the distribution.  Such restoration will be made fromforfeitures that arise for the Plan Year for which such restoration is to bemade.  To the extent such forfeituresare insufficient for such purpose, the Participating Employer with whom theParticipant was last employed as a Qualified Employee will contribute the amountrequired to restore the Account.  AParticipant described in the last sentence of Subsection (a) who is reemployedbefore incurring five consecutive One-Year Breaks in Service following the dateof his or her Termination of Employment will be deemed to have repaid his orher deemed distribution upon his or her reemployment as a Qualified Employee."

9.              Section 7.3 of the Plan is amended effective January 1, 2002,to read as follows:
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"7.3     ***OtherForfeitures***.

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(a)       Except as provided in Section 7.2, thenonvested portions of a Participant's Profit Sharing Contribution Account willcontinue to be held in a separate subaccount of such Account until theParticipant incurs five consecutive One-Year Breaks in Service, at which timethe subaccount balance will be forfeited. If the Participant resumes employment with an Affiliated Organizationprior to incurring five consecutive One-Year Breaks in Service, such subaccountwill be disregarded and its balance will be included in the Profit SharingContribution Account.

 

(b)       A Participant's vested interest in his orher Profit Sharing Contribution Account balance following a resumption ofemployment in accordance with Subsection (a) at any given time will not be lessthan the amount "X" determined by the formula: X = P(AB + (R x D)) -(R x D), where P is the Participant's vested percentage at the time ofdetermination; AB is the Account balance at the time of determination; D is theamount of the distribution; and R is the ratio of the Account balance at thetime of determination, to the subaccount balance immediately following thedistribution."

10.           Section 8.1(a)(v) of the Plan is amended effective February 1,2002, to read as follows:
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"(v)      All distributions will be made in the formof a check drawn on the Trust and, if applicable, a canceled note evidencingany Plan loan; provided, that if the vested portion of the Account balance of aParticipant or Beneficiary of a deceased Participant is credited with theequivalent of at least 10 full shares of Company Stock, at the election of theParticipant or Beneficiary, distribution of the vested portion of the Accountbalance invested in the BMC Common Stock Fund may be distributed in full sharesof Company Stock and cash in lieu of any fractional share."

11.           Section 9.2(a) of the Plan is amended effective January 1,2002, to read as follows:
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"(a)      For each Plan Year that the designed-basedsafe harbor alternative described in Code section 401(k)(12) has not beensatisfied, the Plan must satisfy the requirements of Code section 401(k)(3)."

12.           Section 9.2 of the Plan is amended effective January 1, 2002,by adding a new Subsection (g) that reads as follows:
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"(g)      It is intended that the Plan will satisfythe design-based safe harbor alternative described in Code section 401(k)(12)to satisfy the Code section 401(k) nondiscrimination test."

13.           Section 9.3(a) of the Plan is amended effective January 1,2002, to read as follows:
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"(a)      For each Plan Year that the designed-basedsafe harbor alternative described in Code section 401(m)(11) has not beensatisfied, the Plan must satisfy the requirements of Code section 401(m)(2)."

14.           Section 9.3 of the Plan is amended effective January 1, 2002,by adding a new Subsection (g) that reads as follows:
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"(g)      It is intended that the Plan will satisfythe design-based safe harbor alternative described in Code section 401(m)(11)to satisfy the Code section 401(m) nondiscrimination test.  Notwithstanding the foregoing, After-TaxContributions made by Participants will satisfy the nondiscrimination testsdescribed in Section 9.3(a)."

 

**IN WITNESSWHEREOF,**the undersigned has caused this instrument to be executed this26th day of December, 2001.

 

                                                                                    **BMCINDUSTRIES, INC.**

 

Attest:/s/Jon A. Dobson                                                By: /s/Bradley D. Carlson

            Secretary                                                          Its:Treasurer