**Exhibit 10.1**

 

Yourplan is an important legal document. This sample plan has been prepared based on our understanding of thedesired provisions.  It may not fit yoursituation.  You should consult with yourlawyer on the plan’s legal and tax implications.  Neither Principal Life Insurance Company norits agents can be responsible for the legal or tax aspects of the plan nor itsappropriateness for your situation.  Ifyou wish to change the provisions of this sample plan, you may ask us toprepare new sample wording for you and your lawyer to review.

 

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**NATURE’S SUNSHINE PRODUCTS, INC.**

**TAX DEFERRED RETIREMENT PLAN**

 

401(k) Plan CL2006

 

RestatedMarch 1, 2008

 

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**TABLE OF CONTENTS**

 
|                | **Page** |
|---------------------|----------|
|                |     |
| INTRODUCTION        | 1        |
|                |     |   |   |
| ARTICLE I           |     | FORMAT AND DEFINITIONS | 2 |
|                |     |   |   |
| Section  1.01  | —   | Format | 2 |
| Section  1.02  | —   | Definitions | 2 |
|                |     |   |   |
| ARTICLE II          |     | PARTICIPATION | 16 |
|                |     |   |   |
| Section  2.01  | —   | Active Participant | 16 |
| Section  2.02  | —   | Inactive Participant | 16 |
| Section  2.03  | —   | Cessation of Participation | 16 |
| Section  2.04  | —   | Adopting Employers - Single Plan | 17 |
|                |     |   |   |
| ARTICLE III         |     | CONTRIBUTIONS | 18 |
|                |     |   |   |
| Section  3.01  | —   | Employer Contributions | 18 |
| Section  3.01A | —   | Rollover Contributions | 20 |
| Section  3.02  | —   | Forfeitures | 21 |
| Section  3.03  | —   | Allocation | 22 |
| Section  3.04  | —   | Contribution Limitation | 23 |
| Section  3.05  | —   | Excess Amounts | 26 |
|                |     |   |   |
| ARTICLE IV          |     | INVESTMENT OF CONTRIBUTIONS | 37 |
|                |     |   |   |
| Section  4.01  | —   | Investment and Timing of Contributions | 37 |
| Section  4.01A | —   | Investment in Qualifying Employer Securities | 38 |
|                |     |   |   |
| ARTICLE V           |     | BENEFITS | 40 |
|                |     |   |   |
| Section  5.01  | —   | Retirement Benefits | 40 |
| Section  5.02  | —   | Death Benefits | 40 |
| Section  5.03  | —   | Vested Benefits | 40 |
| Section  5.04  | —   | When Benefits Start | 40 |
| Section  5.05  | —   | Withdrawal Benefits | 41 |
| Section  5.06  | —   | Distributions Under Qualified Domestic Relations Orders | 42 |
|                |     |   |   |
| ARTICLE VI          |     | DISTRIBUTION OF BENEFITS | 44 |
|                |     |   |   |
| Section  6.01  | —   | Automatic Forms of Distribution | 44 |
| Section  6.02  | —   | Optional Forms of Distribution | 44 |
| Section  6.03  | —   | Election Procedures | 45 |
| Section  6.04  | —   | Notice Requirements | 46 |
|                |     |   |   |
| ARTICLE VII         |     | REQUIRED MINIMUM DISTRIBUTIONS | 47 |
|                |     |   |   |
| Section  7.01  | —   | Application | 47 |
| Section  7.02  | —   | Definitions | 47 |

 

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| ** **         | ** ** | ** **                                            | **Page** |
|--------------------|------------|-------------------------------------------------------|----------|
|               |       |                                                  |     |
| Section  7.03 | —     | Required Minimum Distributions                        | 48       |
| Section  7.04 | —     | Transition Rules                                      | 51       |
|               |       |                                                  |     |
| ARTICLE VIII       |       | TERMINATION OF THE PLAN                               | 52       |
|               |       |                                                  |     |
| ARTICLE IX         |       | ADMINISTRATION OF THE PLAN                            | 53       |
|               |       |                                                  |     |
| Section  9.01 | —     | Administration                                        | 53       |
| Section  9.02 | —     | Expenses                                              | 53       |
| Section  9.03 | —     | Records                                               | 53       |
| Section  9.04 | —     | Information Available                                 | 53       |
| Section  9.05 | —     | Claim Procedures                                      | 54       |
| Section  9.06 | —     | Delegation of Authority                               | 55       |
| Section  9.07 | —     | Exercise of Discretionary Authority                   | 55       |
| Section  9.08 | —     | Transaction Processing                                | 55       |
| Section  9.09 | —     | Voting and Tender of Qualifying Employer Securities   | 56       |
|               |       |                                                  |     |
| ARTICLE X          |       | GENERAL PROVISIONS                                    | 57       |
|               |       |                                                  |     |
| Section 10.01 | —     | Amendments                                            | 57       |
| Section 10.02 | —     | Direct Rollovers                                      | 58       |
| Section 10.03 | —     | Mergers and Direct  Transfers                         | 58       |
| Section 10.04 | —     | Provisions Relating to the  Insurer and Other Parties | 59       |
| Section 10.05 | —     | Employment Status                                     | 60       |
| Section 10.06 | —     | Rights to Plan Assets                                 | 60       |
| Section 10.07 | —     | Beneficiary                                           | 60       |
| Section 10.08 | —     | Nonalienation of Benefits                             | 61       |
| Section 10.09 | —     | Construction                                          | 61       |
| Section 10.10 | —     | Legal Actions                                         | 61       |
| Section 10.11 | —     | Small Amounts                                         | 61       |
| Section 10.12 | —     | Word Usage                                            | 62       |
| Section 10.13 | —     | Change in Service Method                              | 62       |
| Section 10.14 | —     | Military Service                                      | 64       |
| Section 10.15 | —     | Indemnification                                       | 64       |
|               |       |                                                  |     |
| ARTICLE XI         |       | TOP-HEAVY PLAN REQUIREMENTS                           | 65       |
|               |       |                                                  |     |
| Section 11.01 | —     | Application                                           | 65       |
| Section 11.02 | —     | Definitions                                           | 65       |
| Section 11.03 | —     | Modification of Vesting Requirements                  | 67       |
| Section 11.04 | —     | Modification of Contributions                         | 68       |
|               |       |                                                  |     |
| PLAN EXECUTION     |       |                                                  |     |

 

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**INTRODUCTION**

 

ThePrimary Employer previously established a tax deferred retirement plan on October 31,1986.

 

ThePrimary Employer is of the opinion that the plan should be changed.  It believes that the best means to accomplishthese changes is to completely restate the plan’s terms, provisions andconditions.  The restatement, effective March 1,2008, is set forth in this document and is substituted in lieu of the priordocument with the exception of any good faith compliance amendment and anymodel amendment.  Such amendment(s) shallcontinue to apply to this restated plan until such provisions are integratedinto the plan or such amendment(s) are superseded by another amendment.

 

Therestated plan continues to be for the exclusive benefit of employees of theEmployer.  All persons covered under theplan on February 29, 2008, shall continue to be covered under the restatedplan with no loss of benefits.

 

Itis intended that the plan, as restated, shall qualify as a profit sharing planunder the Internal Revenue Code of 1986, including any later amendments to theCode.

 

Thisplan includes the statutory, regulatory, and guidance changes specified in the2006 Cumulative List of Changes in Plan Qualification Requirements (2006Cumulative List) contained in Internal Revenue Service Notice 2007-3 and thequalification requirements and guidance published before the issuance of suchlist.  The provisions of this plan applyas of the effective date of the restatement unless otherwise specified.

 

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**ARTICLE I**

 

**FORMAT AND DEFINITIONS**

 

**SECTION 1.01—FORMAT.**

 

Wordsand phrases defined in the DEFINITIONS SECTION of Article I shallhave that defined meaning when used in this Plan, unless the context clearlyindicates otherwise.

 

Thesewords and phrases have an initial capital letter to aid in identifying them asdefined terms.

 

**SECTION 1.02—DEFINITIONS.**

 

**Account** means, for a Participant, his share of the Plan Fund.  Separate accounting records are kept forthose parts of his Account that result from:

 

(a)                          Pre-tax Elective Deferral Contributions

 

(b)                         Roth Elective Deferral Contributions

 

(c)                          Matching Contributions

 

(d)                         Qualified Nonelective Contributions

 

(e)                          Rollover Contributions

 

AParticipant’s Account shall be reduced by any distribution of his VestedAccount and by any Forfeitures.  AParticipant’s Account shall participate in the earnings credited, expensescharged, and any appreciation or depreciation of the Investment Fund.  His Account is subject to any minimumguarantees applicable under the Annuity Contract or other investmentarrangement and to any expenses associated therewith.

 

**ACP Test** means the nondiscrimination test described in Code Section 401(m)(2) asprovided for in subparagraph (d) of the EXCESS AMOUNTS SECTION of Article III.

 

**Active Participant** means an Eligible Employee who is actively participating in the Planaccording to the provisions in the ACTIVE PARTICIPANT SECTION of Article II.

 

**Adopting Employer** means an employer which is a Controlled Group member and which islisted in the ADOPTING EMPLOYERS - SINGLE PLAN SECTION of Article II.

 

**ADP Test** means the nondiscrimination test described in Code Section 401(k)(3) asprovided for in subparagraph (c) of the EXCESS AMOUNTS SECTION of Article III.

 

**Affiliated Service Group** means any group of corporations, partnershipsor other organizations of which the Employer is a part and which is affiliatedwithin the meaning of Code Section 414(m) and the regulationsthereunder.  Such a group includes atleast two organizations one of which is either a service organization (that is,an organization the principal business of which is performing services), or anorganization the principal business of which is performing management functionson a regular and continuing basis.  Suchservice is of a type historically performed by employees.  In the case of a management organization, theAffiliated Service Group shall include organizations related, within themeaning of Code Section 144(a)(3), to either the

 

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managementorganization or the organization for which it performs managementfunctions.  The term Controlled Group, asit is used in this Plan, shall include the term Affiliated Service Group.

 

**Alternate Payee** means any spouse, former spouse, child, or other dependent of aParticipant who is recognized by a qualified domestic relations order as havinga right to receive all, or a portion of, the benefits payable under the Planwith respect to such Participant.

 

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

 

AnnualCompensation shall exclude Compensation for the portion of the CompensationYear in which an Employee is not an Active Participant.

 

**Annuity Contract** means the annuity contract or contracts into which the Trustee or thePrimary Employer enters with the Insurer for guaranteed benefits, for theinvestment of Contributions in separate accounts, and for the payment ofbenefits under this Plan.

 

**Annuity Starting Date** means, for a Participant, the first day ofthe first period for which an amount is payable as an annuity or any otherform.

 

**Beneficiary** means the person or persons named by a Participant to receive anybenefits under the Plan when the Participant dies.  See the BENEFICIARY SECTION of Article X.

 

**Catch-up Contributions**means Elective Deferral Contributions made tothe Plan that are in excess of an otherwise applicable Plan limit and that aremade by Participants who are age 50 or older by the end of the taxableyear.  An otherwise applicable Plan limitis a limit in the Plan that applies to Elective Deferral Contributions withoutregard to Catch-up Contributions, such as the limits on the Maximum AnnualAdditions, as defined in the CONTRIBUTION LIMITATION SECTION of Article III,the dollar limitation on Elective Deferral Contributions under Code Section 402(g) (notcounting Catch-up Contributions), and the limit imposed by the ADP Test.

 

Catch-upContributions are not subject to the limits on the Maximum Annual Additions, asdefined in the CONTRIBUTION LIMITATION SECTION of Article III, arenot counted in the ADP Test, and are not counted in determining the minimumallocation under Code Section 416 (but Catch-up Contributions made inprior years are counted in determining whether the Plan is top-heavy).

 

**Claimant** means any person who makes a claim for benefits under this Plan.  See the CLAIM PROCEDURES SECTION of Article IX.

 

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

 

**Compensation** means, except for purposes of the CONTRIBUTION LIMITATION SECTION ofArticle III and Article XI, the total earnings, except as modified inthis definition, from the Employer during any specified period.

 

“Earnings”in this definition means wages within the meaning of Code Section 3401(a) forthe purposes of income tax withholding at the source but determined withoutregard to any rules that limit the remuneration included in wages based onthe nature or location of the employment or the services performed (such as theexception for agricultural labor in Code Section 3401(a)(2)).

 

Forany Self-employed Individual, Compensation means Earned Income.

 

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Exceptas provided herein, Compensation for a specified period is the Compensationactually paid or made available (or if earlier, includible in gross income)during such period.

 

ForPlan Years beginning on or after January 1, 2005, Compensation for a PlanYear shall also include Compensation paid by the later of 2 1/2 monthsafter an Employee’s Severance from Employment with the Employer maintaining thePlan or the end of the Plan Year that includes the date of the Employee’sSeverance from Employment with the Employer maintaining the Plan, if thepayment is regular Compensation for services during the Employee’s regularworking hours, or Compensation for services outside the Employee’s regularworking hours (such as overtime or shift differential), commissions, bonuses,or other similar payments, and, absent a Severance from Employment, thepayments would have been paid to the Employee while the Employee continued inemployment with the Employer.

 

Anypayments not described above shall not be considered Compensation if paid afterSeverance from Employment, even if they are paid by the later of 2 1/2 monthsafter the date of Severance from Employment or the end of the Plan Year thatincludes the date of Severance from Employment, except, payments to anindividual who does not currently perform services for the Employer by reasonof qualified military service (within the meaning of Code Section 414(u)(1))to the extent these payments do not exceed the amounts the individual wouldhave received if the individual had continued to perform services for theEmployer rather than entering qualified military service.

 

Backpay, within the meaning of section 1.415(c)-2(g)(8) of the regulations,shall be treated as Compensation for the Plan Year to which the back payrelates to the extent the back pay represents wages and compensation that wouldotherwise be included in this definition.

 

Compensationpaid or made available during a specified period shall include amounts thatwould otherwise be included in Compensation but for an election under Code Section 125(a),132(f)(4), 402(e)(3), 402(h)(1)(B), 402(k), or 457(b).

 

Forpurposes of determining the allocation or amount of

 

ElectiveDeferral Contributions

 

Compensationshall exclude the following:

 

severancepay

 

Forpurposes of the EXCESS AMOUNTS SECTION of Article III, the Employermay elect to use an alternative nondiscriminatory definition of Compensation inaccordance with the regulations under Code Section 414(s).

 

ForPlan Years beginning on or after January 1, 2002, the annual Compensationof each Participant taken into account in determining contributions andallocations for any determination period (the period over which Compensation isdetermined) shall not exceed $200,000, as adjusted for cost-of-living increasesin accordance with Code Section 401(a)(17)(B).  The cost-of-living adjustment in effect for acalendar year applies to any determination period beginning with or within suchcalendar year.

 

Ifa determination period consists of fewer than 12 months, the annualcompensation limit is an amount equal to the otherwise applicable annualcompensation limit multiplied by a fraction. The numerator of the fraction is the number of months in the shortdetermination period, and the denominator of the fraction is 12.

 

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IfCompensation for any prior determination period is taken into account indetermining a Participant’s contributions or allocations for the current PlanYear, the Compensation for such prior determination period is subject to theapplicable annual compensation limit in effect for that determinationperiod.  For this purpose, in determiningcontributions and allocations in Plan Years beginning on or after January 1,2002, the annual compensation limit in effect for determination periodsbeginning before that date is $200,000.

 

Compensationmeans, for a Leased Employee, Compensation for the services the Leased Employeeperforms for the Employer, determined in the same manner as the Compensation ofEmployees who are not Leased Employees, regardless of whether such Compensationis received directly from the Employer or from the leasing organization.

 

**Compensation Year** means the consecutive 12-month period ending on the last day of eachPlan Year, including corresponding periods before October 31, 1986.

 

**Contributions** means Employer Contributions and Rollover Contributions as set out in Article III,unless the context clearly indicates only specific contributions are meant.

 

**Controlled Group** means any group of corporations, trades, or businesses of which theEmployer is a part that is under common control.  A Controlled Group includes any group ofcorporations, trades, or businesses, whether or not incorporated, which iseither a parent-subsidiary group, a brother-sister group, or a combined groupwithin the meaning of Code Section 414(b), Code Section 414(c) andthe regulations thereunder and, for purposes of determining contributionlimitations under the CONTRIBUTION LIMITATION SECTION of Article III,as modified by Code Section 415(h). The term Controlled Group, as it is used in this Plan, shall include theterm Affiliated Service Group and any other employer required to be aggregatedwith the Employer under Code Section 414(o) and the regulationsthereunder.

 

**Direct Rollover** means a payment by the Plan to the Eligible Retirement Plan specifiedby the Distributee.

 

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

 

**Earned Income** means, for a Self-employed Individual, net earnings from self-employmentin the trade or business for which this Plan is established if suchSelf-employed Individual’s personal services are a material income producingfactor for that trade or business.  Netearnings shall be determined without regard to items not included in grossincome and the deductions properly allocable to or chargeable against suchitems.  Net earnings shall be reduced forthe employer contributions to the employer’s qualified retirement plan(s) tothe extent deductible under Code Section 404.

 

Netearnings shall be determined with regard to the deduction allowed to theemployer by Code Section 164(f) for taxable years beginning after December 31,1989.

 

**Elective Deferral Contributions** means contributions made by the Employer tofund this Plan in accordance with elective deferral agreements between EligibleEmployees and the Employer.

 

Electivedeferral agreements shall be made, changed, or terminated according to theprovisions of the EMPLOYER CONTRIBUTIONS SECTION of Article III.

 

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

 

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ElectiveDeferral Contributions means Pre-tax Elective Deferral Contributions and RothElective Deferral Contributions, unless the context clearly indicates only oneis meant.

 

**Eligible Employee** means any Employee of the Employer excluding the following:

 

Bargainingclass.  Represented for collectivebargaining purposes by any collective bargaining agreement between the Employerand employee representatives, if retirement benefits were the subject of goodfaith bargaining and if two percent or less of the Employees who are coveredpursuant to that agreement are professionals as defined in section 1.410(b)-9of the regulations.  For this purpose,the term “employee representatives” does not include any organization more thanhalf of whose members are Employees who are owners, officers, or executives ofthe Employer.  However, this exclusionshall not apply if the collective bargaining agreement specifically providesfor participation under this Plan.

 

LeasedEmployee.

 

AnEmployee considered by the Employer to be an independent contractor, or theemployee of an independent contractor, who is later determined by the InternalRevenue Service to be an Employee.

 

**Eligible Retirement Plan** means an eligible plan under Code Section 457(b) whichis maintained by a state, political subdivision of a state, or any agency orinstrumentality of a state or political subdivision of a state and which agreesto separately account for amounts transferred into such plan from this Plan, anindividual retirement account described in Code Section 408(a), anindividual retirement annuity described in Code Section 408(b), an annuityplan described in Code Section 403(a), an annuity contract described inCode Section 403(b), or a qualified plan described in Code Section 401(a),that accepts the Distributee’s Eligible Rollover Distribution.  The definition of Eligible Retirement Planshall also apply in the case of a distribution to a surviving spouse, or to aspouse or former spouse who is the Alternate Payee under a qualified domesticrelations order, as defined in Code Section 414(p).

 

Fortaxable years beginning on or after January 1, 2006, if any portion of anEligible Rollover Distribution is attributable to payments or distributionsfrom a designated Roth account, an Eligible Retirement Plan with respect tosuch portion shall include only (i) another designated Roth account of theindividual from whose Account the payments or distributions were made under anannuity plan described in Code Section 403(a) or a qualified plandescribed in Code Section 401(a); (ii) another designated Rothaccount of such individual under an annuity plan described in Code Section 403(b);or (iii) a Roth IRA described in Code Section 408A of suchindividual.

 

**Eligible Rollover Distribution** means any distribution of all or any portionof the balance to the credit of the Distributee, except that an EligibleRollover Distribution does not include:  (i) anydistribution that is one of a series of substantially equal periodic payments(not less frequently than annually) made for the life (or life expectancy) ofthe Distributee or the joint lives (or joint life expectancies) of theDistributee and the Distributee’s designated Beneficiary, or for a specifiedperiod of ten years or more; (ii) any distribution to the extent suchdistribution is required under Code Section 401(a)(9); (iii) anyhardship distribution; (iv) the portion of any other distribution(s) thatis not includible in gross income (determined without regard to the exclusionfor net unrealized appreciation with respect to employer securities); and (v) anyother distribution(s) that is reasonably expected to total less than $200during a year.

 

Aportion of a distribution shall not fail to be an Eligible RolloverDistribution merely because the portion consists of after-tax employee contributionsthat are not includible in gross income. However, such portion may be transferred only to an individualretirement account or individual retirement annuity described in Code Section 408(a) or(b), or to a qualified defined contribution plan described in Code Section 401(a) or403(a) that

 

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agreesto separately account for amounts so transferred, including separatelyaccounting for the portion of such distribution which is includible in grossincome and the portion of such distribution which is not so includible.

 

Aportion of a distribution shall not fail to be an Eligible RolloverDistribution merely because the portion consists of the portion of a designatedRoth account that is not includible in a Participant’s gross income.  However, for taxable years beginning on orafter January 1, 2006, such portion may be transferred only to a Roth IRAdescribed in Code Section 408A or to a designated Roth account underanother plan that agrees to separately account for amounts so transferred,including separately accounting for the portion of such distribution which isincludible in gross income and the portion of such distribution which is not soincludible.

 

Ifthe distribution includes any portion of a designated Roth account, indetermining if (v) above applies: (i) any portion of the distributionfrom the designated Roth account shall not be treated as an Eligible RolloverDistribution if it is reasonably expected to total less than $200 during a yearand (ii) the balance of the distribution, if any, shall not be treated asan Eligible Rollover Distribution if it is reasonably expected to total lessthan $200 during a year.  In addition,for taxable years beginning on or after January 1, 2006, a designated Rothaccount and all other accounts under the Plan shall be treated as accounts heldunder two separate plans and shall not be combined in determining a mandatorydistribution of an Eligible Rollover Distribution greater than $1,000 in theDIRECT ROLLOVERS SECTION of Article X.

 

**Employee** means an individual who is employed by the Employer or any otheremployer required to be aggregated with the Employer under Code Sections414(b), (c), (m), or (o).  A ControlledGroup member is required to be aggregated with the Employer.

 

Theterm Employee shall include any Self-employed Individual treated as an employeeof any employer described in the preceding paragraph as provided in Code Section 401(c)(1).  The term Employee shall also include anyLeased Employee deemed to be an employee of any employer described in thepreceding paragraph as provided in Code Section 414(n) or (o).

 

**Employer** means, except for purposes of the CONTRIBUTION LIMITATION SECTION ofArticle III, the Primary Employer. This will also include any successor corporation or firm of the Employerwhich shall, by written agreement, assume the obligations of this Plan or anyPredecessor Employer that maintained this Plan.

 

**Employer Contributions** means

 

ElectiveDeferral Contributions

MatchingContributions

QualifiedNonelective Contributions

 

asset out in Article III and contributions made by the Employer to fund thisPlan in accordance with the provisions of the MODIFICATION OF CONTRIBUTIONS SECTION ofArticle XI, unless the context clearly indicates only specificcontributions are meant.

 

**Entry Date** means the date an Employee first enters the Plan as an ActiveParticipant.  See the ACTIVE PARTICIPANT SECTION ofArticle II.

 

**ERISA**means the Employee Retirement Income Security Act of 1974, as amended.

 

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

 

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**Forfeiture** means thepart, if any, of a Participant’s Account that is forfeited.  See the FORFEITURES SECTION of Article III.

 

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

 

**Governing Board**means the Chief Executive Officer and Chief Financial Officer of the PrimaryEmployer.

 

**Highly Compensated Employee**means any Employee who:

 

(a)                        was a5-percent owner at any time during the year or the preceding year, or

 

(b)                       for thepreceding year had compensation from the Employer in excess of $80,000 and, ifthe Employer so elects, was in the top-paid group for the preceding year.  The $80,000 amount is adjusted at the sametime and in the same manner as under Code Section 415(d), except that thebase period is the calendar quarter ending September 30, 1996.

 

For this purpose the applicableyear of the plan for which a determination is being made is called adetermination year and the preceding 12-month period is called a look-backyear.  If the Employer makes a calendaryear data election, the look-back year shall be the calendar year beginningwith or within the look-back year.  ThePlan may not use such election to determine whether Employees are Highly CompensatedEmployees on account of being a 5-percent owner.

 

In determining who is a Highly CompensatedEmployee, the Employer makes a top-paid group election.  The effect of this election is that anEmployee (who is not a 5-percent owner at any time during the determination yearor the look-back year) with compensation in excess of $80,000 (as adjusted) forthe look-back year is a Highly Compensated Employee only if the Employee was inthe top-paid group for the look-back year. In determining who is a Highly Compensated Employee, the Employer doesnot make a calendar year data election.

 

Calendar year data elections andtop-paid group elections, once made, apply for all subsequent years unlesschanged by the Employer.  If the Employermakes one election, the Employer is not required to make the other.  If both elections are made, the look-backyear in determining the top-paid group must be the calendar year beginning withor within the look-back year.  Theseelections must apply consistently to the determination years of all plansmaintained by the Employer which reference the highly compensated employeedefinition in Code Section 414(q), except as provided in Internal RevenueService Notice 97-45 (or superseding guidance).

 

The determination of who is ahighly compensated former Employee is based on the rules applicable todetermining Highly Compensated Employee status as in effect for thatdetermination year, in accordance with section 1.414(q)-1T, A-4 of thetemporary Income Tax Regulations and Internal Revenue Service Notice 97-45.

 

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

 

**Hour of Service**means the following:

 

(a)                        Each hourfor which an Employee is paid, or entitled to payment, for performing dutiesfor the Employer during the applicable computation period.

 

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(b)                       Each hour for which an Employee is paid, or entitledto payment, by the Employer on account of a period of time in which no dutiesare performed (irrespective of whether the employment relationship hasterminated) due to vacation, holiday, illness, incapacity (includingdisability), layoff, jury duty, military duty or leave of absence.  Notwithstanding the preceding provisions ofthis subparagraph (b), no credit will be given to the Employee:

 

(1)                        for morethan 501 Hours of Service under this subparagraph (b) on account of anysingle continuous period in which the Employee performs no duties (whether ornot such period occurs in a single computation period); or

 

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

 

(3)                        for anHour of Service for a payment which solely reimburses the Employee for medicalor medically related expenses incurred by him.

 

For purposes of this subparagraph (b), apayment shall be deemed to be made by, or due from the Employer, regardless ofwhether such payment is made by, or due from the Employer, directly orindirectly through, among others, a trust fund or insurer, to which theEmployer contributes or pays premiums and regardless of whether contributionsmade or due to the trust fund, insurer or other entity are for the benefit ofparticular employees or are on behalf of a group of employees in the aggregate.

 

(c)                        Each hour for which back pay, irrespective ofmitigation of damages, is either awarded or agreed to by the Employer.  The same Hours of Service shall not becredited both under subparagraph (a) or subparagraph (b) above (asthe case may be) and under this subparagraph (c).  Crediting of Hours of Service for back payawarded or agreed to with respect to periods described in subparagraph (b) abovewill be subject to the limitations set forth in that subparagraph.

 

The crediting of Hours of Serviceabove shall be applied under the rules of paragraphs (b) and (c) ofthe Department of Labor Regulation 2530.200b-2 (including any interpretationsor opinions implementing such rules); which rules, by this reference, arespecifically incorporated in full within this Plan.  The

 

reference to paragraph (b) appliesto the special rule for determining hours of service for reasons otherthan the performance of duties such as payments calculated (or not calculated)on the basis of units of time and the rule against double credit.  The reference to paragraph (c) appliesto the crediting of hours of service to computation periods.

 

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

 

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

 

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**Inactive Participant**means a former Active Participant who has an Account.  See the INACTIVE PARTICIPANT SECTION of Article II.

 

**Insurer** meansPrincipal Life Insurance Company or the insurance company or companies named by(i) the Primary Employer or (ii) the Trustee in its discretion or asdirected under the Trust Agreement.

 

**Investment Fund**means the total of Plan assets, excluding the guaranteed benefit policy portionof any Annuity Contract.  All or aportion of these assets may be held under, or invested pursuant to, the termsof a Trust Agreement.

 

The Investment Fund shall be valuedat current fair market value as of the Valuation Date.  The valuation shall take into considerationinvestment earnings credited, expenses charged, payments made, and changes inthe values of the assets held in the Investment Fund.

 

The Investment Fund shall be allocated at alltimes to Participants, except as otherwise expressly provided in the Plan.  The Account of a Participant shall becredited with its share of the gains and losses of the Investment Fund.  That part of a Participant’s Account investedin a funding arrangement that establishes one or more accounts or investmentvehicles for such Participant thereunder shall be credited with the gain orloss from such accounts or investment vehicles. The part of a Participant’s Account that is invested in other fundingarrangements shall be credited with a proportionate share of the gain or lossof such investments.  The share shall bedetermined by multiplying the gain or loss of the investment by the ratio ofthe part of the Participant’s Account invested in such funding arrangement to thetotal of the Investment Fund invested in such funding arrangement.

 

**Investment Manager**means any fiduciary (other than a trustee or Named Fiduciary)

 

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

 

(b)                       who (i) isregistered as an investment adviser under the Investment Advisers Act of 1940; (ii) isnot registered as an investment adviser under such Act by reason of paragraph (1) ofsection 203A(a) of such Act, is registered as an investment adviser underthe laws of the state (referred to in such paragraph (1)) in which it maintainsits principal office and place of business, and, at the time it last filed theregistration form most recently filed by it with such state in order tomaintain its registration under the laws of such state, also filed a copy ofsuch form with the Secretary of Labor; (iii) is a bank, as defined in thatAct; or (iv) is an insurance company qualified to perform servicesdescribed in subparagraph (a) above under the laws of more than one state;and

 

(c)                        who hasacknowledged in writing being a fiduciary with respect to the Plan.

 

**Late Retirement Date**means any day that is after a Participant’s Normal Retirement Date and on whichretirement benefits begin.  If aParticipant continues to work for the Employer after his Normal RetirementDate, his Late Retirement Date shall be the day he has a Severance fromEmployment.  An earlier Retirement Datemay apply if the Participant so elects. A later Retirement Date may apply if the Participant so elects.  See the WHEN BENEFITS START SECTION of Article V.

 

**Leased Employee**means any person (other than an employee of the recipient) who, pursuant to anagreement between the recipient and any other person (“leasing organization”),has performed services for the recipient (or for the recipient and relatedpersons determined in accordance with Code Section 414(n)(6)) on asubstantially full time basis for a period of at least one year, and suchservices are performed under primary direction or control by the recipient.  Contributions or benefits provided by theleasing organization to a Leased 

 

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Employee, which are attributable to serviceperformed for the recipient employer, shall be treated as provided by therecipient employer.

 

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

 

(a)                        suchemployee is covered by a money purchase pension plan providing (i) anonintegrated employer contribution rate of at least 10 percent ofcompensation, as defined in Code Section 415(c)(3), (ii) immediateparticipation, and (iii) full and immediate vesting, and

 

(b)                       LeasedEmployees do not constitute more than 20 percent of the recipient’s nonhighlycompensated work force.

 

**Matching Contributions**means contributions made by the Employer to fund this Plan that are contingenton a Participant’s Elective Deferral Contributions.  See the EMPLOYER CONTRIBUTIONS SECTION ofArticle III.

 

**Named Fiduciary** means the person or persons appointed bythe Governing Board who have authority to control and manage the investment ofthe assets of the Plan.  To the extentthe authority has not been delegated, the Named Fiduciary shall be theGoverning Board.  A Named Fiduciary hasthe authority to appoint an Investment Manager to have investmentresponsibility for a portion of the assets of the Plan as identified by theNamed Fiduciary.

 

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

 

**Nonvested Account** means theexcess, if any, of a Participant’s Account over his Vested Account.

 

**Normal Retirement Age** means theage at which the Participant’s normal retirement benefit becomes nonforfeitableif he is an Employee.  A Participant’sNormal Retirement Age is 59 1/2.

 

**Normal Retirement Date** means thedate the Participant reaches his Normal Retirement Age.  Unless otherwise provided in this Plan, aParticipant’s retirement benefits shall begin on his Normal Retirement Date ifhe has had a Severance from Employment on such date.  However, retirement benefits shall not beginbefore the older of age 62 or his Normal Retirement Age, unless the qualifiedelection procedures of the ELECTION PROCEDURES SECTION of Article VIare met.  Even if the Participant is anEmployee on his Normal Retirement Date, he may choose to have his retirementbenefit begin on such date.

 

**Owner-employee** means a Self-employed Individual who, inthe case of a sole proprietorship, owns the entire interest in theunincorporated trade or business for which this Plan is established.  If this Plan is established for apartnership, an Owner-employee means a Self-employed Individual who owns morethan 10 percent of either the capital interest or profits interest in suchpartnership.

 

**Parental Absence** means an Employee’s absence from work:

 

(a)                        by reason ofpregnancy of the Employee,

 

(b)                       by reason ofbirth of a child of the Employee,

 

(c)                        by reason ofthe placement of a child with the Employee in connection with adoption of suchchild by such Employee, or

 

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(d)                       for purposesof caring for such child for a period beginning immediately following suchbirth or placement.

 

**Participant** means either an Active Participant or anInactive Participant.

 

**Period of Military Duty** means, foran Employee

 

(a)                        who servedas a member of the armed forces of the United States, and

 

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

 

theperiod of time from the date the Employee was first absent from active work forthe Employer because of such military duty to the date the Employee wasreemployed.

 

**Plan** means the tax deferred retirement planof the Employer set forth in this document, including any later amendments toit.

 

**Plan Administrator** means theperson or persons who administer the Plan.

 

ThePlan Administrator is the Governing Board. The Governing Board has authority to delegate to other person or personsany part or all of the duties of Plan Administrator.

 

**Plan Fund** means the total of the Investment Fundand the guaranteed benefit policy portion of any Annuity Contract.  The Investment Fund shall be valued as statedin its definition.  The guaranteed benefitpolicy portion of any Annuity Contract shall be determined in accordance withthe terms of the Annuity Contract and, to the extent that such Annuity Contractallocates contract values to Participants, allocated to Participants inaccordance with its terms.  The totalvalue of all amounts held under the Plan Fund shall equal the value of theaggregate Participants’ Accounts under the Plan.

 

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

 

**Predecessor Employer** means afirm of which the Employer was once a part (e.g., due to a spinoff or change ofcorporate status) or a firm absorbed by the Employer because of a merger oracquisition (stock or asset, including a division or an operation of suchcompany).

 

**Pre-tax Elective Deferral Contributions** means aParticipant’s Elective Deferral Contributions that are not includible in theParticipant’s gross income at the time deferred.

 

**Primary Employer** means Nature’s Sunshine Products, Inc.

 

**Qualified Nonelective Contributions** meanscontributions made by the Employer to fund this Plan (other than ElectiveDeferral Contributions) that are 100% vested when made to the Plan and that aredistributable only in accordance with the distribution provisions (other than forhardships) applicable to Elective Deferral Contributions. See the EMPLOYERCONTRIBUTIONS SECTION of Article III and the WHEN BENEFITS START SECTION ofArticle V.

 

**Qualifying Employer Securities** means anysecurity which is issued by the Employer or any Controlled Group member andwhich meets the requirements of Code Section 409(l) and ERISA Section 407(d)(5).  This shall also include any securities thatsatisfied the requirements of the definition when these securities wereassigned to the Plan.

 

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**Qualifying Employer Securities Fund** means thatpart of the assets of the Trust Fund that are designated to be held primarilyor exclusively in Qualifying Employer Securities for the purpose of providingbenefits for Participants.

 

**Reentry Date** means the date a former ActiveParticipant reenters the Plan.  See theACTIVE PARTICIPANT SECTION of Article II.

 

**Retirement Date** means the date a retirement benefit willbegin and is a Participant’s Normal or Late Retirement Date, as the case maybe.

 

**Rollover Contributions** means theRollover Contributions which are made by an Eligible Employee or an InactiveParticipant according to the provisions of the ROLLOVER CONTRIBUTIONS SECTION ofArticle III.

 

**Roth Elective Deferral Contributions**means a Participant’s Elective Deferral Contributions that are not excludiblefrom the Participant’s gross income at the time deferred and have beenirrevocably designated as Roth Elective Deferral Contributions by theParticipant in his elective deferral agreement. Whether an Elective Deferral Contribution is not excludible from aParticipant’s gross income will be determined in accordance with section1.401(k)-1(f)(2) of the regulations. In the case of a Self-employed Individual, an Elective DeferralContribution is not excludible from gross income only if the individual doesnot claim a deduction for such amount.

 

**Self-employed Individual** means, withrespect to any taxable year, an individual who has Earned Income for thetaxable year (or who would have Earned Income but for the fact the trade orbusiness for which this Plan is established did not have net profits for suchtaxable year).

 

**Severance from Employment** means,except for purposes of the CONTRIBUTION LIMITATION SECTION of Article III,an Employee has ceased to be an Employee. The Plan Administrator shall determine if a Severance from Employmenthas occurred in accordance with section 1.401(k)-1(d)(2) of theregulations.

 

**Totally and Permanently Disabled** means thata Participant meets the definition of disabled under the Employer’s long-termdisability plan.

 

**Trust Agreement** means an agreement or agreements oftrust between the Primary Employer and Trustee established for the purpose ofholding and distributing the Trust Fund under the provisions of the Plan.  The Trust Agreement may provide for theinvestment of all or any portion of the Trust Fund in the Annuity Contract orany other investment arrangement.

 

**Trust Fund** means the total funds held under anapplicable Trust Agreement.  The termTrust Fund when used within a Trust Agreement shall mean only the funds heldunder that Trust Agreement.

 

**Trustee** means the party or parties named in theapplicable Trust Agreement.

 

**Valuation Date** means the date on which the value of theassets of the Investment Fund is determined. The value of each Account that is maintained under this Plan shall bedetermined on the Valuation Date.  Ineach Plan Year, the Valuation Date shall be the last day of the Plan Year.  At the discretion of the Plan Administrator,Trustee, or Insurer (whichever applies) and in a nondiscriminatory manner,assets of the Investment Fund may be valued more frequently.  These dates shall also be Valuation Dates.

 

**Vested Account** means the vested part of a Participant’sAccount.  The Participant’s VestedAccount is equal to that part of his Account resulting from Contributions thatwere 100% vested when made before his Vesting Percentage is 100% and is equalto his Account when his Vesting Percentage is 100%.

 

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**Vesting Break in Service** means aVesting Computation Period in which an Employee is credited with 500 or fewerHours of Service.  An Employee incurs aVesting Break in Service on the last day of a Vesting Computation Period inwhich he has a Vesting Break in Service.

 

**Vesting Computation Period** means aconsecutive 12-month period ending on the last day of each Plan Year, includingcorresponding consecutive 12-month periods before October 31, 1986.

 

**Vesting Percentage** means thepercentage used to determine the nonforfeitable portion of a Participant’sAccount attributable to Employer Contributions that were not 100% vested whenmade.

 

AParticipant’s Vesting Percentage is shown in the following schedule oppositethe number of whole years of his Vesting Service.

 

| **VESTING SERVICE** | ** ** | **VESTING**    | ** ** |
|--------------------------|------------|----------------|------------|
| **(whole years)**   | ** ** | **PERCENTAGE** | ** ** |
|                     |       |           |       |
| Less than 3              |       | 0              |       |
| 3 or more                |       | 100            |       |

 

TheVesting Percentage for a Participant who is an Employee on or after the date hereaches Normal Retirement Age shall be 100%. The Vesting Percentage for a Participant who is an Employee on the datehe dies shall be 100%.  The VestingPercentage for a Participant who is an Employee on the date he becomes disabledshall be 100% if such disability is subsequently determined to meet thedefinition of Totally and Permanently Disabled.

 

Ifthe schedule used to determine a Participant’s Vesting Percentage is changed,the new schedule shall not apply to a Participant unless he is credited with anHour of Service on or after the date of the change and the Participant’snonforfeitable percentage on the day before the date of the change is notreduced under this Plan.  The amendmentprovisions of the AMENDMENTS SECTION of Article X regarding changesin the computation of the Vesting Percentage shall apply.

 

**Vesting Service** means one year of service for eachVesting Computation Period in which an Employee is credited with at least 1,000Hours of Service.

 

However,Vesting Service is modified as follows:

 

Periodof Military Duty included:

 

APeriod of Military Duty shall be included as service with the Employer to theextent it has not already been credited. For purposes of crediting Hours of Service during the Period of MilitaryDuty, an Hour of Service shall be credited (without regard to the 501 Hour ofService limitation) for each hour an Employee would normally have beenscheduled to work for the Employer during such period.

 

ControlledGroup service included:

 

AnEmployee’s service with a member firm of a Controlled Group while both thatfirm and the Employer were members of the Controlled Group shall be included asservice with the Employer.

 

**Yearly Date** means October 31, 1986, and eachfollowing January 1.

 

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**Years of Service** means an Employee’s Vesting Service disregarding any modifications thatexclude service.

 

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**ARTICLE II**

 

**PARTICIPATION**

 

**SECTION 2.01—ACTIVE PARTICIPANT.**

 

(a)                        An Employee shall first become an Active Participant(begin active participation in the Plan) on the earliest date on which he is anEligible Employee and has met the eligibility requirement set forth below.  This date is his Entry Date.

 

(1)                        Heis age 18 or older.

 

Each Employee who was an ActiveParticipant on February 29, 2008, shall continue to be an ActiveParticipant if he is still an Eligible Employee on March 1, 2008, and hisEntry Date shall not change.

 

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

 

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

 

Upon again becoming an Active Participant, heshall cease to be an Inactive Participant.

 

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

 

There shall be no duplication of benefits for a Participantunder this Plan because of more than one period as an Active Participant.

 

**SECTION 2.02—INACTIVE PARTICIPANT.**

 

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

 

(a)                        the datethe Participant ceases to be an Eligible Employee, or

 

(b)                       theeffective date of complete termination of the Plan under Article VIII.

 

An Employee or former Employee who was anInactive Participant under the Plan on February 29, 2008, shall continueto be an Inactive Participant on March 1, 2008.  Eligibility for any benefits payable to theParticipant or on his behalf and the amount of the benefits shall be determinedaccording to the provisions of the prior document, unless otherwise stated inthis document.

 

**SECTION 2.03—CESSATION OF PARTICIPATION.**

 

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

 

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**SECTION 2.04—ADOPTING EMPLOYERS - SINGLEPLAN.**

 

Each of the Controlled Group members listedbelow is an Adopting Employer.  EachAdopting Employer listed below participates with the Employer in thisPlan.  An Adopting Employer’s agreementto participate in this Plan shall be in writing.

 

The Employer has the right to amend thePlan.  An Adopting Employer does not havethe right to amend the Plan.

 

If the Adopting Employer did not maintain itsplan before its date of adoption specified below, its date of adoption shall bethe Entry Date for any of its Employees who have met the requirements in theACTIVE PARTICIPANT SECTION of this article as of that date.  Service with and Compensation from an AdoptingEmployer shall be included as service with and Compensation from theEmployer.  Transfer of employment,without interruption, between an Adopting Employer and another AdoptingEmployer or the Employer shall not be considered an interruption of service.  The Employer’s Fiscal Year defined in theDEFINITIONS SECTION of Article I shall be the Fiscal Year used ininterpreting this Plan for Adopting Employers.

 

Contributions made by an Adopting Employershall be treated as Contributions made by the Employer.  Forfeitures arising from those Contributionsshall be used for the benefit of all Participants.

 

An employer shall not be an Adopting Employerif it ceases to be a Controlled Group member. Such an employer may continue a retirement plan for its Employees in theform of a separate document.  This Planshall be amended to delete a former Adopting Employer from the list below.

 

If (i) an employer ceases to be anAdopting Employer or the Plan is amended to delete an Adopting Employer and (ii) theAdopting Employer does not continue a retirement plan for the benefit of itsEmployees, partial termination may result and the provisions of Article VIIIshall apply.

 

ADOPTING EMPLOYERS

 
| **NAME**                                           | ** ** | **DATE OF ADOPTION** | ** ** |
|----------------------------------------------------|------------|--------------------------------|------------|
|                                               |       |                           |       |
| Nature’s Sunshine Products  Direct, Inc. |       | December 31,  2002        |       |
|                                               |       |                           |       |
| Synergy Worldwide Inc.                             |       | October 31,  2000         |       |

 

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**ARTICLE III**

 

**CONTRIBUTIONS**

 

**SECTION 3.01—EMPLOYER CONTRIBUTIONS.**

 

EmployerContributions shall be made without regard to current or accumulated netincome, earnings, or profits of the Employer. Notwithstanding the foregoing, the Plan shall continue to be designed toqualify as a profit sharing plan for purposes of Code Sections 401(a), 402,412, and 417.  Such Contributions shallbe equal to the Employer Contributions as described below:

 

(a)                          The amount of each Elective DeferralContribution for a Participant shall be equal to a portion of Compensation asspecified in the elective deferral agreement. An Employee who is eligible to participate in the Plan for purposes ofElective Deferral Contributions may file an elective deferral agreement withthe Employer.  The Participant shallmodify or terminate the elective deferral agreement by filing a new electivedeferral agreement.  The electivedeferral agreement may not be made retroactively and shall remain in effectuntil modified or terminated.

 

Theelective deferral agreement to start or modify Elective Deferral Contributionsshall be effective as soon as administratively feasible on or after theParticipant’s Entry Date (Reentry Date, if applicable) or any followingdate.  The elective deferral agreement mustbe entered into on or before the date it is effective.

 

Theelective deferral agreement to stop Elective Deferral Contributions may beentered into on any date.  Such electivedeferral agreement shall be effective as soon as administratively feasible followingthe date on which the elective deferral agreement is entered into.

 

ElectiveDeferral Contributions for Highly Compensated Employees cannot be more than 5%of Compensation.  A Participant who iseligible to make Catch-up Contributions shall not be limited to the maximumdeferral percentage unless his Elective Deferral Contributions, includingCatch-up Contributions, exceed this limit plus the dollar amount of Catch-upContributions permitted.

 

AParticipant who is age 50 or older by the end of the taxable year shall beeligible to make Catch-up Contributions.

 

AParticipant may elect to designate all or any portion of his future ElectiveDeferral Contributions as Roth Elective Deferral Contributions.

 

ElectiveDeferral Contributions are 100% vested and nonforfeitable.

 

(b)                         The Employer shall make MatchingContributions in an amount equal to 100% of Elective DeferralContributions.  Elective DeferralContributions that are over 5% of Compensation won’t be matched.

 

MatchingContributions are calculated based on Elective Deferral Contributions andCompensation for the payroll period. Matching Contributions are made for all persons who were ActiveParticipants at any time during that payroll period.

 

MatchingContributions are subject to the Vesting Percentage.

 

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(c)                          Qualified Nonelective Contributions may bemade for each Plan Year in an amount determined by the Employer.

 

DiscretionaryQualified Nonelective Contributions may be made for each Plan Year in an amountdetermined by the Employer to be used to reduce Excess Aggregate Contributionsand Excess Contributions, as defined in the EXCESS AMOUNTS SECTION of thisarticle. If the Plan is treated as separate plans because it is mandatorilydisaggregated under the regulations of Code Section 401(k), a separateQualified Nonelective Contribution may be determined for each separateplan.  Such Contributions are in additionto the Qualified Nonelective Contributions determined above, if any.

 

QualifiedNonelective Contributions are 100% vested and are distributable only inaccordance with the distribution provisions (other than for hardships)applicable to Elective Deferral Contributions.

 

NoParticipant shall be permitted to have Elective Deferral Contributions, asdefined in the EXCESS AMOUNTS SECTION of this article, made under thisPlan, or any other plan, contract, or arrangement maintained by the Employer,during any calendar year, in excess of the dollar limitation contained in Code Section 402(g) ineffect for the Participant’s taxable year beginning in such calendar year.  The dollar limitation in the precedingsentence shall be increased by the dollar limit on Catch-up Contributions underCode Section 414(v)(2)(B)(i) for the taxable year for any Participantwho will be age 50 or older by the end of the taxable year.

 

Thedollar limitation contained in Code Section 402(g) is $10,500 fortaxable years beginning in 2000 and 2001, increasing to $11,000 for taxableyears beginning in 2002, and increasing by $1,000 for each year thereafter upto $15,000 for taxable years beginning in 2006 and later years.  After 2006, the $15,000 limit will beadjusted by the Secretary of the Treasury for cost-of-living increases underCode Section 402(g)(4).  Any such adjustmentswill be in multiples of $500.

 

Catch-upContributions for a Participant for a taxable year may not exceed the dollarlimit on Catch-up Contributions under Code Section 414(v)(2)(B)(i) forthe taxable year.  The dollar limit onCatch-up Contributions under Code Section 414(v)(2)(B)(i) is $1,000for taxable years beginning in 2002, increasing by $1,000 for each yearthereafter up to $5,000 for taxable years beginning in 2006 and lateryears.  After 2006, the $5,000 limit willbe adjusted by the Secretary of the Treasury for cost-of-living increases underCode Section 414(v)(2)(C).  Any suchadjustments will be in multiples of $500.

 

Anelective deferral agreement (or change thereto) must be made in such manner andin accordance with such rules as the Employer may prescribe in anondiscriminatory manner (including by means of voice response or otherelectronic system under circumstances the Employer permits) and may not be maderetroactively.

 

EmployerContributions are allocated according to the provisions of the ALLOCATION SECTION ofthis article.

 

Aportion of the Plan assets resulting from Employer Contributions (but not morethan the original amount of those Contributions) may be returned if theEmployer Contributions are made because of a mistake of fact or are more thanthe amount deductible under Code Section 404 (excluding any amount whichis not deductible because the Plan is disqualified).  The amount involved must be returned to theEmployer within one year after the date the Employer Contributions are made bymistake of fact or the date the deduction is disallowed, whicheverapplies.  Except as provided under thisparagraph and Article VIII, the assets of the Plan shall never be used forthe benefit of the Employer and are held for the exclusive purpose of providingbenefits to Participants and their Beneficiaries and for defraying reasonableexpenses of administering the Plan.

 

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**SECTION 3.01A—ROLLOVER CONTRIBUTIONS.**

 

ARollover Contribution may be made by an Eligible Employee or InactiveParticipant if the following conditions are met:

 

(a)                          The Contribution is a Participant RolloverContribution or a direct rollover of a distribution made after December 31,2001 from the types of plans specified below. A Participant Rollover Contribution or a direct rollover of adistribution from a designated Roth account applies only to distributions madein taxable years beginning on or after January 1, 2006.

 

DirectRollovers.  The Plan will accept a direct rollover of anEligible Rollover Distribution from (i) a qualified plan described in CodeSection 401(a) or 403(a), including after-tax employee contributionsand any portion of a designated Roth account; (ii) an annuity contractdescribed in Code Section 403(b), including after-tax employeecontributions and any portion of a designated Roth account; and (iii) aneligible plan under Code Section 457(b) which is maintained by astate, political subdivision of a state, or any agency or instrumentality of astate or political subdivision of a state.

 

ParticipantRollover Contributions from Other Plans.  ThePlan will accept a Participant contribution of an Eligible RolloverDistribution from (i) a qualified plan described in Code Section 401(a) or403(a), including distributions of a designated Roth account only to the extentsuch amount would otherwise be includible in a Participant’s gross income; (ii) anannuity contract described in Code Section 403(b), including distributionsof a designated Roth account only to the extent such amount would otherwise beincludible in a Participant’s gross income; and (iii) an eligible planunder Code Section 457(b) which is maintained by a state, politicalsubdivision of a state, or any agency or instrumentality of a state orpolitical subdivision of a state.

 

ParticipantRollover Contributions from IRAs.  The Plan will accept aParticipant Rollover Contribution of the portion of a distribution from anindividual retirement account or individual retirement annuity described inCode Section 408(a) or (b) that is eligible to be rolled overand would otherwise be includible in the Participant’s gross income.

 

(b)                         The Contribution is of amounts that the Codepermits to be transferred to a plan that meets the requirements of Code Section 401(a).

 

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

 

(d)                         The Eligible Employee or Inactive Participantfurnishes evidence satisfactory to the Plan Administrator that the proposedrollover meets conditions (a), (b), and (c) above.

 

(e)                          In the case of an Inactive Participant, theContribution must be of an amount distributed from another plan of theEmployer, or a plan of a Controlled Group member, that satisfies therequirements of Code Section 401(a).

 

ARollover Contribution shall be allowed in cash only and must be made accordingto procedures set up by the Plan Administrator.

 

Ifthe Eligible Employee is not an Active Participant when the RolloverContribution is made, he shall be deemed to be an Active Participant only forthe purpose of investment and distribution of the Rollover Contribution.  Employer Contributions shall not be made foror allocated to the Eligible Employee until the time he meets all of therequirements to become an Active Participant.

 

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RolloverContributions made by an Eligible Employee or an Inactive Participant shall becredited to his Account.  The part of theParticipant’s Account resulting from Rollover Contributions is 100% vested andnonforfeitable at all times.  Separateaccounting records shall be maintained for those parts of his RolloverContributions consisting of (i) voluntary contributions which werededucted from the Participant’s gross income for Federal income tax purposes; (ii) after-taxemployee contributions, including the portion that would not have beenincludible in the Participant’s gross income if the contributions were notrolled over into this Plan; and (iii) any portion of a designated Rothaccount, including the portion that would not have been includible in theParticipant’s gross income if the contributions were not rolled over into thisPlan.

 

**SECTION 3.02—FORFEITURES.**

 

TheNonvested Account of a Participant shall be forfeited as of the earlier of thefollowing:

 

(a)                          the date the record keeper is notified thatthe Participant died (if prior to such date he has had a Severance fromEmployment), or

 

(b)                         the Participant’s Forfeiture Date.

 

Allor a portion of a Participant’s Nonvested Account shall be forfeited beforesuch earlier date if, after he has a Severance from Employment, he receives, oris deemed to receive, a distribution of his entire Vested Account or adistribution of his Vested Account derived from Employer Contributions thatwere not 100% vested when made, under the RETIREMENT BENEFITS SECTION of Article V,the VESTED BENEFITS SECTION of Article V, or the SMALL AMOUNTS SECTION ofArticle X.  The forfeiture shalloccur as of the date the Participant receives, or is deemed to receive, thedistribution.  If a Participant receives,or is deemed to receive, his entire Vested Account, his entire NonvestedAccount shall be forfeited.  If aParticipant receives a distribution of his Vested Account from EmployerContributions that were not 100% vested when made, but less than his entireVested Account, the amount to be forfeited shall be determined by multiplyinghis Nonvested Account from such Contributions by a fraction.  The numerator of the fraction is the amountof the distribution derived from Employer Contributions that were not 100%vested when made and the denominator of the fraction is his entire VestedAccount derived from such Contributions on the date of the distribution.

 

AForfeiture shall also occur as provided in the EXCESS AMOUNTS SECTION ofthis article.

 

Forfeituresshall be determined at least once during each Plan Year.  Forfeitures may first be used to payadministrative expenses.  Forfeitures ofMatching Contributions that relate to excess amounts as provided in the EXCESSAMOUNTS SECTION of this article, that have not been used to payadministrative expenses, shall be applied to reduce the earliest EmployerContributions made after the Forfeitures are determined.  Any other Forfeitures that have not been usedto pay administrative expenses shall be applied to reduce the earliest EmployerContributions made after the Forfeitures are determined.  Upon their application to reduce EmployerContributions, Forfeitures shall be deemed to be Employer Contributions.

 

Ifa Participant again becomes an Eligible Employee after receiving a distributionwhich caused all or a portion of his Nonvested Account to be forfeited, heshall have the right to repay to the Plan the entire amount of the distributionhe received (excluding any amount of such distribution resulting fromContributions that were 100% vested when made). The repayment must be made in a single sum (repayment in installments isnot permitted) before the earlier of the date five years after the date heagain becomes an Eligible Employee or the end of the first period of fiveconsecutive Vesting Breaks in Service which begin after the date of thedistribution.

 

Ifthe Participant makes the repayment above, the Plan Administrator shall restoreto his Account an amount equal to his Nonvested Account that was forfeited onthe date of distribution, unadjusted for any investment gains or losses.  If no amount is to be repaid because theParticipant was deemed to have received a distribution, or only

 

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receiveda distribution of Contributions which were 100% vested when made, and he againperforms an Hour of Service as an Eligible Employee within the repaymentperiod, the Plan Administrator shall restore the Participant’s Account as if hehad made a required repayment on the date he performed such Hour ofService.  Restoration of the Participant’sAccount shall include restoration of all Code Section 411(d)(6) protectedbenefits with respect to the restored Account, according to applicable Treasuryregulations.  Provided, however, the PlanAdministrator shall not restore the Nonvested Account if (i) a ForfeitureDate has occurred after the date of the distribution and on or before the dateof repayment and (ii) that Forfeiture Date would result in a completeforfeiture of the amount the Plan Administrator would otherwise restore.

 

ThePlan Administrator shall restore the Participant’s Account by the close of thePlan Year following the Plan Year in which repayment is made.  The permissible sources for restoration ofthe Participant’s Account are Forfeitures or special Employer Contributions.  Such special Employer Contributions shall bemade without regard to profits.  Therepaid and restored amounts are not included in the Participant’s AnnualAdditions, as defined in the CONTRIBUTION LIMITATION SECTION of thisarticle.

 

**SECTION 3.03—ALLOCATION.**

 

Aperson meets the allocation requirements of this section if he is an ActiveParticipant on the last day of the Plan Year.

 

ElectiveDeferral Contributions shall be allocated to the Participants for whom suchContributions are made under the EMPLOYER CONTRIBUTIONS SECTION of thisarticle.  Such Contributions shall beallocated when made and credited to the Participant’s Account.

 

MatchingContributions shall be allocated to the persons for whom such Contributions aremade under the EMPLOYER CONTRIBUTIONS SECTION of this article.  Such Contributions shall be allocated whenmade and credited to the person’s Account.

 

Thediscretionary Qualified Nonelective Contributions to be used to reduce excessamounts, as described in the EMPLOYER CONTRIBUTIONS SECTION of thisarticle, which are in addition to any other Qualified Nonelective Contributionsdescribed in such section shall be allocated as of the last day of the PlanYear only to Nonhighly Compensated Employees who meet the allocationrequirements of this section.  SuchContributions (or separate Contributions) shall be allocated first to theeligible person under the Plan (or separate plan) with the lowest AnnualCompensation for the Plan Year, then to the eligible person under the Plan (orseparate plan) with the next lowest Annual Compensation, and so forth, in eachcase subject to the applicable limits of the CONTRIBUTION LIMITATION SECTION ofthis article.  This amount shall becredited to the person’s Account.

 

QualifiedNonelective Contributions other than the discretionary Qualified NonelectiveContributions to be used to reduce excess amounts, as described in the EMPLOYERCONTRIBUTIONS SECTION of this article, shall be allocated as of the lastday of the Plan Year to each person who meets the allocation requirements ofthis section.  Such Qualified NonelectiveContributions shall be allocated only to Nonhighly Compensated Employees.  The amount allocated to such person for thePlan Year shall be equal to such Qualified Nonelective Contributions multipliedby the ratio of such person’s Annual Compensation for the Plan Year to thetotal Annual Compensation of all such persons. This amount shall be credited to the person’s Account.

 

IfLeased Employees are Eligible Employees, in determining the amount of EmployerContributions allocated to a person who is a Leased Employee, contributionsprovided by the leasing organization that are attributable to services suchLeased Employee performs for the Employer shall be treated as provided by theEmployer.  Those contributions shall notbe duplicated under this Plan.

 

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**SECTION 3.04—CONTRIBUTION LIMITATION.**

 

Contributionsto the Plan shall be limited in accordance with Code Section 415 and theregulations thereunder.  The limitationsof this section shall apply to Limitation Years beginning on or after July 1,2007, except as otherwise provided herein.

 

(a)                          Definitions.  For the purpose of determiningthe contribution limitation set forth in this section, the following terms aredefined.

 

**Annual Additions** means the sum of the following amounts credited to a Participant’saccount for the Limitation Year:

 

(1)         employer contributions;

 

(2)         employee contributions; and

 

(3)         forfeitures.

 

AnnualAdditions to a defined contribution plan, as defined in section1.415(c)-1(a)(2)(i) of the regulations, shall also include the following:

 

(4)                          mandatory employee contributions, as definedin Code Section 411(c)(2)(C) and section 1.411(c)-1(c)(4) of theregulations, to a defined benefit plan;

 

(5)                          contributions allocated to any individualmedical benefit account, as defined in Code Section 415(l)(2), which ispart of a pension or annuity plan maintained by the Employer;

 

(6)                          amounts attributable to post-retirementmedical benefits, allocated to the separate account of a key employee, asdefined in Code Section 419A(d)(3), under a welfare benefit fund, asdefined in Code Section 419(e), maintained by the Employer; and

 

(7)                          annual additions under an annuity contractdescribed in Code Section 403(b).

 

**Compensation** means wages within the meaning of Code Section 3401(a) forthe purposes of income tax withholding at the source but determined withoutregard to any rules that limit the remuneration included in wages based onthe nature or location of the employment or the services performed (such as theexception for agricultural labor in Code Section 3401(a)(2)).

 

Forany Self-employed Individual, Compensation shall mean Earned Income.

 

Exceptas provided herein, Compensation for a Limitation Year is the Compensationactually paid or made available (or if earlier, includible in gross income)during such Limitation Year.

 

ForLimitation Years beginning on or after January 1, 2005, Compensation for aLimitation Year shall also include Compensation paid by the later of 2 1/2months after an employee’s Severance from Employment with the Employermaintaining the Plan or the end of the Limitation Year that includes the dateof the employee’s Severance from Employment with the Employer maintaining thePlan, if the payment is regular Compensation for services during the employee’sregular working hours, or Compensation for services outside the employee’sregular working hours (such as overtime or shift differential), commissions,bonuses, or other similar payments, and, absent a Severance from Employment,the payments would have been paid to the employee while the employee continuedin employment with the Employer.

 

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Anypayments not described above shall not be considered Compensation if paid afterSeverance from Employment, even if they are paid by the later of 2 1/2 monthsafter the date of Severance from Employment or the end of the Limitation Yearthat includes the date of Severance from Employment, except, payments to anindividual who does not currently perform services for the Employer by reasonof qualified military service (within the meaning of Code Section 414(u)(1))to the extent these payments do not exceed the amounts the individual wouldhave received if the individual had continued to perform services for theEmployer rather than entering qualified military service.

 

Backpay, within the meaning of section 1.415(c)-2(g)(8) of the regulations,shall be treated as Compensation for the Limitation Year to which the back payrelates to the extent the back pay represents wages and compensation that wouldotherwise be included in this definition.

 

Compensationpaid or made available during such Limitation Year shall include amounts thatwould otherwise be included in Compensation but for an election under Code Section 125(a),132(f)(4), 402(e)(3), 402(h)(1)(B), 402(k), or 457(b).

 

Compensationshall not include amounts paid as Compensation to a nonresident alien, asdefined in Code Section 7701(b)(1)(B), who is not a Participant in thePlan to the extent the Compensation is excludible from gross income and is noteffectively connected with the conduct of a trade or business within the UnitedStates.

 

**Defined Contribution Dollar Limitation** means, effective for Limitation Yearsbeginning after December 31, 2001, $40,000, automatically adjusted underCode Section 415(d), effective January 1 of each year, as publishedin the Internal Revenue Bulletin.  Thenew limitation shall apply to Limitation Years ending with or within thecalendar year of the date of the adjustment, but a Participant’s AnnualAdditions for a Limitation Year cannot exceed the currently applicable dollarlimitation (as in effect before the January 1 adjustment) prior to January 1. However, after a January 1adjustment is made, Annual Additions for the entire Limitation Year arepermitted to reflect the dollar limitation as adjusted on January 1.

 

**Employer** means the employer that adopts this Plan, and all members of acontrolled group of corporations (as defined in Code Section 414(b) asmodified by Code Section 415(h)), all commonly controlled trades orbusinesses (as defined in Code Section 414(c), as modified, except in thecase of a brother-sister group of trades or businesses under common control, byCode Section 415(h)), or affiliated service groups (as defined in Code Section 414(m))of which the adopting employer is a part, and any other entity required to beaggregated with the employer pursuant to Code Section 414(o).

 

**Limitation Year** means the consecutive 12-month period ending on the last day of eachPlan Year, including corresponding consecutive 12-month periods before October 31,1986.  If the Limitation Year is otherthan the calendar year, execution of this Plan (or any amendment to this Planchanging the Limitation Year) constitutes the Employer’s adoption of a writtenresolution electing the Limitation Year. If the Limitation Year is amended to a different consecutive 12-monthperiod, the new Limitation Year must begin on a date within the Limitation Yearin which the amendment is made.

 

**Maximum Annual Addition**means, for Limitation Years beginning on orafter January 1, 2002, except for catch-up contributions described in CodeSection 414(v), the Annual Addition that may be contributed or allocatedto a Participant’s Account under the Plan for any Limitation Year.  This amount shall not exceed the lesser of:

 

(1)         The Defined Contribution DollarLimitation, or

 

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(2)         100 percent of the Participant’sCompensation for the Limitation Year.

 

AParticipant’s Compensation for a Limitation Year shall not include Compensationin excess of the limitation under Code Section 401(a)(17) that is ineffect for the calendar year in which the Limitation Year begins.

 

Thecompensation limitation referred to in (2) shall not apply to anindividual medical benefit account (as defined in Code Section 415(l); ora post-retirement medical benefits account for a key employee (as defined inCode Section 419A(d)(1)).

 

Ifa short Limitation Year is created because of an amendment changing theLimitation Year to a different consecutive 12-month period, the Maximum AnnualAddition will not exceed the Defined Contribution Dollar Limitation multipliedby the following fraction:

 

Numberof months (including any fractional parts of a month)

inthe short Limitation Year

12

 

If the Plan is terminated as of a date other than the last day of theLimitation Year, the Plan is treated as if the Plan was amended to change theLimitation Year and create a short Limitation Year ending on the date the Planis terminated.

 

Ifa short Limitation Year is created, the limitation under Code Section 401(a)(17)shall be prorated in the same manner as the Defined Contribution DollarLimitation.

 

**Predecessor Employer** means, with respect to a Participant, a former employer if theEmployer maintains a plan that provides a benefit which the Participant accruedwhile performing services for the former employer.  Predecessor Employer also means, with respectto a Participant, a former entity that antedates the Employer if, under thefacts and circumstances, the Employer constitutes a continuation of all or aportion of the trade or business of the former entity.

 

**Severance from Employment** means an employee has ceased to be anemployee of the Employer maintaining the plan. An employee does not have a Severance from Employment if, in connectionwith a change of employment, the employee’s new employer maintains the planwith respect to the employee.

 

(b)                         If the Participant does not participate in,and has never participated in, another qualified plan maintained by theEmployer or a welfare benefit fund, as defined in Code Section 419(e),maintained by the Employer, or an individual medical benefit account, asdefined in Code Section 415(l)(2), maintained by the Employer, or asimplified employee pension, as defined in Code Section 408(k), maintainedby the Employer, which provides an Annual Addition, the amount of AnnualAdditions which may be credited to the Participant’s Account for any LimitationYear shall not exceed the lesser of the Maximum Annual Addition or any otherlimitation contained in this Plan.  Ifthe Employer Contribution that would otherwise be contributed or allocated tothe Participant’s Account would cause the Annual Additions for the LimitationYear to exceed the Maximum Annual Addition, the amount contributed or allocatedshall be reduced so that the Annual Additions for the Limitation Year willequal the Maximum Annual Addition.

 

(c)                          This (c) applies if, in addition to thisPlan, the Participant is covered under another defined contribution plan, asdefined in section 1.415(c)-1(a)(2)(i)  of the regulations, (withoutregard to whether the plan(s) have been terminated) maintained by theEmployer which provides an Annual Addition during any

 

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LimitationYear.  The Annual Additions which may becredited to a Participant’s Account under this Plan for any such Limitation Yearwill not exceed the Maximum Annual Addition, reduced by the Annual Additionscredited to a Participant’s account under the other defined contribution plan(s) forthe same Limitation Year.  If the AnnualAdditions with respect to the Participant under the other defined contributionplan(s) maintained by the Employer are less than the Maximum AnnualAddition, and the Employer Contribution that would otherwise be contributed orallocated to the Participant’s Account under this Plan would cause the AnnualAdditions for the Limitation Year to exceed this limitation, the amountcontributed or allocated will be reduced so that the Annual Additions under allsuch plans and funds for the Limitation Year will equal the Maximum AnnualAddition.  If the Annual Additions withrespect to the Participant under the other defined contribution plan(s) inthe aggregate are equal to or greater than the Maximum Annual Addition, noamount will be contributed or allocated to the Participant’s Account under thisPlan for the Limitation Year.

 

(d)                         The limitation of this section shall bedetermined and applied taking into account the rules in subparagraph (e) below.

 

(e)                          Other Rules

 

(1)                          Aggregating Plans.  Forpurposes of applying the limitations of this section for a Limitation Year, alldefined contribution plans (as defined in section 1.415(c)-1(a)(2)(i) ofthe regulations and without regard to whether the plan(s) have beenterminated) ever maintained by the Employer and all defined contribution plansof a Predecessor Employer (in the Limitation Year in which such PredecessorEmployer is created) under which a Participant receives Annual Additions aretreated as one defined contribution plan.

 

(2)                          Break-up of Affiliated Employers.  TheAnnual Additions under a formerly affiliated plan (as defined in section1.415(f)-1(b)(2)(ii) of the regulations) of the Employer are taken intoaccount for purposes of applying the limitations of this section for theLimitation Year in which the cessation of affiliation took place.

 

(3)                          Previously Unaggregated Plans.  Thelimitations of this section are not exceeded for the first Limitation Year inwhich two or more existing plans, which previously were not required to beaggregated pursuant to section 1.415(f) of the regulations, areaggregated, provided that no Annual Additions are credited to a Participantafter the date on which the plans are required to be aggregated if the AnnualAdditions already credited to the Participant in the existing plans equal orexceed the Maximum Annual Addition.

 

(4)                          Aggregation with Multiemployer Plan.  Ifthe Employer maintains a multiemployer plan, as defined in Code Section 414(f),and the multiemployer plan so provides, only the Annual Additions under themultiemployer plan that are provided by the Employer shall be treated as AnnualAdditions provided under a plan maintained by the Employer for purposes of thissection.

 

**SECTION 3.05—EXCESS AMOUNTS.**

 

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

 

**ACP**means, for a specified group of Participants (either Highly CompensatedEmployees or Nonhighly Compensated Employees) for a Plan Year, the average(expressed as a percentage) of the Contribution Percentages of the EligibleParticipants in the group.

 

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**ADP**means, for a specified group of Participants (either Highly CompensatedEmployees or Nonhighly Compensated Employees) for a Plan Year, the average(expressed as a percentage) of the Deferral Percentages of the Eligible Participants in the group.

 

**Catch-up Contributions** means Elective Deferral Contributions madeto a plan that are in excess of an otherwise applicable plan limit and that aremade by participants who are age 50 or older by the end of the taxableyear.  An otherwise applicable plan limitis a limit in the plan that applies to Elective Deferral Contributions withoutregard to Catch-up Contributions, such as the limits on the maximum annualadditions under Code Section 415, the dollar limitation on ElectiveDeferral Contributions under Code Section 402(g) (not countingCatch-up Contributions), and the limit imposed by the nondiscrimination testdescribed in Code Section 401(k)(3).

 

**Contribution Percentage** means the ratio (expressed as a percentage)of the Eligible Participant’s Contribution Percentage Amounts to the EligibleParticipant’s Compensation for the Plan Year (whether or not the EligibleParticipant was an Eligible Participant for the entire Plan Year).  In modification of the foregoing,Compensation shall be determined excluding Compensation for the portion of thePlan Year in which an Employee was not an Eligible Participant.  For an Eligible Participant for whom suchContribution Percentage Amounts for the Plan Year are zero, the percentage iszero.

 

**Contribution Percentage Amounts** means the sum of the ParticipantContributions and Matching Contributions (that are not Qualified MatchingContributions taken into account for purposes of the ADP Test) made under theplan on behalf of the Eligible Participant for the plan year.  For plan years beginning on or after January 1,2006, Matching Contributions cannot be taken into account for a plan year for aNonhighly Compensated Employee to the extent they are disproportionate matchingcontributions as defined in section 1.401(m)-2(a)(5)(ii) of theregulations.  Such ContributionPercentage Amounts shall not include Matching Contributions that are forfeitedeither to correct Excess Aggregate Contributions or because the contributionsto which they relate are Excess Elective Deferrals, Excess Contributions, orExcess Aggregate Contributions.  Undersuch rules as the Secretary of the Treasury shall prescribe, indetermining the Contribution Percentage the Employer may elect to includeQualified Nonelective Contributions under this Plan that were not used incomputing the Deferral Percentage.  Forplan years beginning on or after January 1, 2006, Qualified NonelectiveContributions cannot be taken into account for a plan year for a NonhighlyCompensated Employee to the extent they are disproportionate contributions asdefined in section 1.401(m)-2(a)(6)(v) of the regulations.  The Employer may also elect to use ElectiveDeferral Contributions in computing the Contribution Percentage so long as theADP Test is met before the Elective Deferral Contributions are used in the ACPTest and continues to be met following the exclusion of those Elective DeferralContributions that are used to meet the ACP Test.

 

**Deferral Percentage** means the ratio (expressed as a percentage) of Elective DeferralContributions (other than Catch-up Contributions) under this Plan on behalf ofthe Eligible Participant for the Plan Year to the Eligible Participant’sCompensation  for the Plan Year (whetheror not the Eligible Participant was an Eligible Participant for the entire PlanYear).  In modification of the foregoing,Compensation shall be determined excluding Compensation for the portion of thePlan Year in which an Employee was not an Eligible Participant.  The Elective Deferral Contributions used todetermine the Deferral Percentage shall include Excess Elective Deferrals(other than Excess Elective Deferrals of Nonhighly Compensated Employees thatarise solely from Elective Deferral Contributions made under this Plan or anyother plans of the Employer or a Controlled Group member), but shall excludeElective Deferral Contributions that are used in computing the ContributionPercentage (provided the ADP Test is satisfied both with and without exclusionof these Elective Deferral Contributions). Under such rules as the Secretary of the Treasury shall prescribe,the Employer may elect to include Qualified Nonelective Contributions andQualified Matching Contributions under this Plan in computing the DeferralPercentage.  For Plan Years

 

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beginningon or after January 1, 2006, Qualified Matching Contributions cannot betaken into account for a Plan Year for a Nonhighly Compensated Employee to theextent they are disproportionate matching contributions as defined in section1.401(m)-2(a)(5)(ii) of the regulations. For Plan Years beginning on or after January 1, 2006, QualifiedNonelective Contributions cannot be taken into account for a Plan Year for aNonhighly Compensated Employee to the extent they are disproportionatecontributions as defined in section 1.401(k)-2(a)(6)(iv) of theregulations.  For an Eligible Participantfor whom such contributions on his behalf for the Plan Year are zero, thepercentage is zero.

 

**Elective Deferral Contributions** means any employer contributions made to aplan at the election of a participant in lieu of cash compensation.  With respect to any taxable year, aparticipant’s Elective Deferral Contributions are the sum of all employercontributions made on behalf of such participant pursuant to an election todefer under any qualified cash or deferred arrangement described in Code Section 401(k),any salary reduction simplified employee pension plan described in Code Section 408(k)(6),any SIMPLE IRA plan described in Code Section 408(p), any plan describedunder Code Section 501(c)(18), and any employer contributions made onbehalf of a participant for the purchase of an annuity contract under Code Section 403(b) pursuantto a salary reduction agreement.  Fortaxable years beginning after December 31, 2005, Elective DeferralContributions include Pre-tax Elective Deferral Contributions and Roth ElectiveDeferral Contributions.  ElectiveDeferral Contributions shall not include any deferrals properly distributed asexcess annual additions.

 

**Eligible Participant** means, for purposes of determining the Deferral Percentage, anyEmployee who is otherwise entitled to make Elective Deferral Contributionsunder the terms of the plan for the plan year. Eligible Participant means, for purposes of determining the ContributionPercentage, any Employee who is eligible (i) to make a ParticipantContribution or an Elective Deferral Contribution (if the Employer takes suchcontributions into account in the calculation of the Contribution Percentage),or (ii) to receive a Matching Contribution (including forfeitures) or aQualified Matching Contribution.  If aParticipant Contribution is required as a condition of participation in theplan, any Employee who would be a participant in the plan if such Employee madesuch a contribution shall be treated as an Eligible Participant on behalf ofwhom no Participant Contributions are made.

 

**Excess Aggregate Contributions** means, with respect to any Plan Year, theexcess of:

 

(1)                         The aggregate Contribution Percentage Amountstaken into account in computing the numerator of the Contribution Percentageactually made on behalf of Highly Compensated Employees for such Plan Year,over

 

(2)                         The maximum Contribution Percentage Amountspermitted by the ACP Test (determined by hypothetically reducing contributionsmade on behalf of Highly Compensated Employees in order of their ContributionPercentages beginning with the highest of such percentages).

 

Suchdetermination shall be made after first determining Excess Elective Deferralsand then determining Excess Contributions.

 

**Excess Contributions** means, with respect to any Plan Year, the excess of:

 

(1)                         The aggregate amount of employercontributions actually taken into account in computing the Deferral Percentageof Highly Compensated Employees for such Plan Year, over

 

(2)                         The maximum amount of such contributionspermitted by the ADP Test (determined by hypothetically reducing contributionsmade on behalf of Highly Compensated Employees in the order of the DeferralPercentages, beginning with the highest of such percentages).

 

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Suchdetermination shall be made after first determining Excess Elective Deferrals.

 

**Excess Elective Deferrals** means those Elective Deferral Contributionsof a Participant that either (i) are made during the Participant’s taxableyear and exceed the dollar limitation under Code Section 402(g) or (ii) aremade during a calendar year and exceed the dollar limitation under Code Section 402(g) forthe Participant’s taxable year beginning in such calendar year, counting onlyElective Deferral Contributions made under this Plan and any other plan,contract, or arrangement maintained by the Employer. The dollar limitationshall be increased by the dollar limit on Catch-up Contributions under Code Section 414(v),if applicable.

 

ExcessElective Deferrals shall be treated as Annual Additions, as defined in theCONTRIBUTION LIMITATION SECTION of this article, under the Plan, unlesssuch amounts are distributed no later than the first April 15 followingthe close of the Participant’s taxable year.

 

**Matching Contributions** means employer contributions made to this orany other defined contribution plan, or to a contract described in Code Section 403(b),on behalf of a participant on account of a Participant Contribution made bysuch participant, or on account of a participant’s Elective DeferralContributions, under a plan maintained by the Employer or a Controlled Groupmember.

 

**Participant Contributions** means contributions (other than RothElective Deferral Contributions) made to the plan by or on behalf of aparticipant that are included in the participant’s gross income in the year inwhich made and that are maintained under a separate account to which theearnings and losses are allocated.

 

**Pre-tax Elective Deferral Contributions** means a participant’s Elective DeferralContributions that are not includible in the participant’s gross income at thetime deferred.

 

**Qualified Matching Contributions** means Matching Contributions that arenonforfeitable when made to the plan and that are distributable only inaccordance with the distribution provisions (other than for hardships)applicable to Elective Deferral Contributions.

 

**Qualified Nonelective Contributions** means any employer contributions (other thanMatching Contributions) that an Employee may not elect to have paid to him incash instead of being contributed to the plan and that are nonforfeitable whenmade to the plan and that are distributable only in accordance with thedistribution provisions (other than for hardships) applicable to ElectiveDeferral Contributions.

 

**Roth Elective Deferral Contributions** means a participant’s Elective DeferralContributions that are not excludible from the participant’s gross income atthe time deferred and have been irrevocably designated as Roth ElectiveDeferral Contributions by the participant in his elective deferralagreement.  Whether an Elective DeferralContribution is not excludible from a participant’s gross income will bedetermined in accordance with section 1.40(k)-1(f)(2) of theregulations.  In the case of aself-employed individual, an Elective Deferral Contribution is not excludiblefrom gross income only if the individual does not claim a deduction for suchamount.

 

(b)                         Excess Elective Deferrals.  AParticipant may assign to this Plan any Excess Elective Deferrals made during ataxable year of the Participant by notifying the Plan Administrator in writingon or before the first following March 1 of the amount of the ExcessElective Deferrals to be assigned to the Plan. A Participant is deemed to notify the Plan Administrator of any ExcessElective Deferrals that arise by taking into account only those ElectiveDeferral Contributions made to this Plan and any other plan, contract, orarrangement of the Employer or a Controlled Group member.  The Participant’s claim for

 

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ExcessElective Deferrals shall be accompanied by the Participant’s written statementthat if such amounts are not distributed, such Excess Elective Deferrals willexceed the limit imposed on the Participant by Code Section 402(g) (including,if applicable, the dollar limitation on Catch-up Contributions under Code Section 414(v))for the year in which the deferral occurred. The Excess Elective Deferrals assigned to this Plan cannot exceed theElective Deferral Contributions allocated under this Plan for such taxableyear.

 

Notwithstandingany other provisions of the Plan, Elective Deferral Contributions in an amountequal to the Excess Elective Deferrals assigned to this Plan, plus any incomeand minus any loss allocable thereto, shall be distributed no later than April 15to any Participant to whose Account Excess Elective Deferrals were assigned forthe preceding year and who claims Excess Elective Deferrals for such taxableyear or calendar year.

 

Fortaxable years beginning after December 31, 2005, distribution of ExcessElective Deferrals shall be made on a pro rata basis from the Participant’sAccount resulting from Pre-tax Elective Deferral Contributions and RothElective Deferral Contributions in the same proportion that such Contributionswere made for the applicable year.

 

TheExcess Elective Deferrals shall be adjusted for any income or loss.  The income or loss allocable to such ExcessElective Deferrals shall be equal to the income or loss allocable to theParticipant’s Elective Deferral Contributions for the taxable year in which theexcess occurred multiplied by a fraction. The numerator of the fraction is the Excess Elective Deferrals.  The denominator of the fraction is theclosing balance without regard to any income or loss occurring during suchtaxable year (as of the end of such taxable year) of the Participant’s Accountresulting from Elective Deferral Contributions.

 

Forpurposes of determining income or loss on Excess Elective Deferrals for taxableyears beginning on or after January 1, 2006, any Excess ElectiveDeferrals, in addition to any adjustment for income or loss for the taxableyear in which the excess occurred, shall be adjusted for income or loss for thegap period between the end of such taxable year and the date ofdistribution.  Such income or lossallocable to the gap period shall be equal to 10% of the income or loss allocableto the Excess Elective Deferrals for the taxable year multiplied by the numberof complete months (counting a partial month of 16 days or more as a completemonth) in the gap period.

 

AnyMatching Contributions that were based on the Elective Deferral Contributionsdistributed as Excess Elective Deferrals, plus any income and minus any lossallocable thereto, shall be forfeited whether or not such amounts aredistributed as Excess Elective Deferrals.

 

(c)                        ADP Test.  As of the end of each PlanYear after Excess Elective Deferrals have been determined, the Plan mustsatisfy the ADP Test.  The ADP Test shallbe satisfied using the prior year testing method or the current year testingmethod, as elected by the Employer.

 

(1)                          Prior Year Testing Method.  TheADP for a Plan Year for Eligible Participants who are Highly CompensatedEmployees for each Plan Year and the prior year’s ADP for Eligible Participantswho were Nonhighly Compensated Employees for the prior Plan Year must satisfyone of the following tests:

 

(i)                            The ADP for a Plan Year for EligibleParticipants who are Highly Compensated Employees for the Plan Year shall notexceed the prior year’s ADP for Eligible Participants who were NonhighlyCompensated Employees for the prior Plan Year multiplied by 1.25; or

 

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(ii)                         The ADP for a Plan Year for EligibleParticipants who are Highly Compensated Employees for the Plan Year:

 

A.                            shall not exceed the prior year’s ADP forEligible Participants who were Nonhighly Compensated Employees for the priorPlan Year multiplied by 2, and

 

B.                              the difference between such ADPs is not morethan 2.

 

Ifthis is not a successor plan, for the first Plan Year the Plan permits anyParticipant to make Elective Deferral Contributions, for purposes of theforegoing tests, the prior year’s Nonhighly Compensated Employees’ ADP shall be3 percent or the Plan Year’s ADP for these Eligible Participants, as elected bythe Employer.

 

(2)                          Current Year Testing Method.  TheADP for a Plan Year for Eligible Participants who are Highly CompensatedEmployees for each Plan Year and the ADP for Eligible Participants who areNonhighly Compensated Employees for the Plan Year must satisfy one of thefollowing tests:

 

(i)                            The ADP for a Plan Year for EligibleParticipants who are Highly Compensated Employees for the Plan Year shall notexceed the ADP for Eligible Participants who are Nonhighly CompensatedEmployees for the Plan Year multiplied by 1.25; or

 

(ii)                         The ADP for a Plan Year for Eligible Participantswho are Highly Compensated Employees for the Plan Year:

 

A.                            shall not exceed the ADP for EligibleParticipants who are Nonhighly Compensated Employees for the Plan Yearmultiplied by 2, and

 

B.                              the difference between such ADP’s is not morethan 2.

 

Ifthe Employer has elected to use the current year testing method, that electioncannot be changed unless (i) the Plan has been using the current yeartesting method for the preceding five Plan Years, or if less, the number ofPlan Years the Plan has been in existence; or (ii) if as a result of amerger or acquisition described in Code Section 410(b)(6)(C)(i), theEmployer maintains both a plan using the prior year testing method and a planusing the current year testing method and the change is made within thetransition period described in Code Section 410(b)(6)(C)(ii).

 

AParticipant is a Highly Compensated Employee for a particular Plan Year if hemeets the definition of a Highly Compensated Employee in effect for that PlanYear.  Similarly, a Participant is aNonhighly Compensated Employee for a particular Plan Year if he does not meetthe definition of a Highly Compensated Employee in effect for that Plan Year.

 

TheDeferral Percentage for any Eligible Participant who is a Highly CompensatedEmployee for the Plan Year and who is eligible to have Elective DeferralContributions (and Qualified Nonelective Contributions or Qualified MatchingContributions, or both, if treated as Elective Deferral Contributions forpurposes of the ADP Test) allocated to his account under two or morearrangements described in Code Section 401(k) that are maintained bythe Employer or a Controlled Group member shall be determined as if suchElective Deferral Contributions (and, if applicable, such Qualified NonelectiveContributions or Qualified Matching Contributions, or both) were made under asingle arrangement.  For Plan Yearsbeginning on or after January 1, 2006, if a Highly Compensated Employeeparticipates in two or more cash or deferred arrangements of the Employer or ofa Controlled Group member that have

 

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differentplan years, all Elective Deferral Contributions made during the Plan Year shallbe aggregated.  For Plan Years beginningbefore January 1, 2006, all such cash or deferred arrangements ending withor within the same calendar year shall be treated as a single arrangement.  The foregoing notwithstanding, certain plansshall be treated as separate if mandatorily disaggregated under the regulationsof Code Section 401(k).

 

Inthe event this Plan satisfies the requirements of Code Section 401(k),401(a)(4), or 410(b) only if aggregated with one or more other plans, orif one or more other plans satisfy the requirements of such Code sections onlyif aggregated with this Plan, then this section shall be applied by determiningthe Deferral Percentage of Employees as if all such plans were a singleplan.  If more than 10 percent of theEmployer’s Nonhighly Compensated Employees are involved in a plan coveragechange as defined in section 1.401(k)-2(c)(4) of the regulations, then anyadjustments to the Nonhighly Compensated Employee ADP for the prior year shallbe made in accordance with such regulations if the Employer has elected to usethe prior year testing method.  Plans maybe aggregated in order to satisfy Code Section 401(k) only if theyhave the same plan year and use the same testing method for the ADP Test.

 

Forpurposes of the ADP Test, Elective Deferral Contributions, QualifiedNonelective Contributions, and Qualified Matching Contributions must be madebefore the end of the 12-month period immediately following the Plan Year towhich the contributions relate.

 

Ifthe Plan Administrator should determine during the Plan Year that the ADP Testis not being met, the Plan Administrator may limit the amount of futureElective Deferral Contributions of the Highly Compensated Employees.

 

Notwithstandingany other provisions of this Plan, Excess Contributions, plus any income andminus any loss allocable thereto, shall be distributed no later than 12 monthsafter the last day of a Plan Year to Participants to whose Accounts such ExcessContributions were allocated for such Plan Year, except to the extent suchExcess Contributions are classified as Catch-up Contributions.  Excess Contributions are allocated to theHighly Compensated Employees with the largest amounts of employer contributionstaken into account in calculating the ADP Test for the year in which the excessarose, beginning with the Highly Compensated Employee with the largest amountof such employer contributions and continuing in descending order until all ofthe Excess Contributions have been allocated. For Plan Years beginning on or after January 1, 2006, if a HighlyCompensated Employee participates in two or more cash or deferred arrangementsof the Employer or of a Controlled Group member, the amount distributed shallnot exceed the amount of the employer contributions taken into account incalculating the ADP test and made to this Plan for the year in which the excessarose.  If Catch-up Contributions areallowed for the Plan Year being tested, to the extent a Highly CompensatedEmployee has not reached his Catch-up Contribution limit under the Plan forsuch year, Excess Contributions allocated to such Highly Compensated Employeeare Catch-up Contributions and will not be treated as ExcessContributions.  If such excess amounts(other than Catch-up Contributions) are distributed more than 2 1/2 monthsafter the last day of the Plan Year in which such excess amounts arose, a 10percent excise tax shall be imposed on the employer maintaining the plan withrespect to such amounts.

 

ExcessContributions shall be treated as Annual Additions, as defined in theCONTRIBUTION LIMITATION SECTION of this article, even if distributed.

 

TheExcess Contributions shall be adjusted for any income or loss.  The income or loss allocable to such ExcessContributions allocated to each Participant shall be equal to the income orloss allocable to the Participant’s Elective Deferral Contributions (and, ifapplicable, Qualified Nonelective Contributions or Qualified MatchingContributions, or both) for the Plan Year in which the excess occurredmultiplied by a fraction.  The numeratorof the fraction is the Excess Contributions. The denominator of the

 

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fractionis the closing balance without regard to any income or loss occurring duringsuch Plan Year (as of the end of such Plan Year) of the Participant’s Accountresulting from Elective Deferral Contributions (and Qualified NonelectiveContributions or Qualified Matching Contributions, or both, if suchcontributions are included in the ADP Test).

 

Forpurposes of determining income or loss on Excess Contributions beginning withthe 2006 Plan Year, any Excess Contributions, in addition to any adjustment forincome or loss for the Plan Year in which the excess occurred, shall beadjusted for income or loss for the gap period between the end of such PlanYear and the date of distribution.  Suchincome or loss allocable to the gap period shall be equal to 10% of the incomeor loss allocable to the Excess Contributions for the Plan Year multiplied bythe number of complete months (counting a partial month of 16 days or more as acomplete month) in the gap period.

 

ExcessContributions allocated to a Participant shall be distributed from theParticipant’s Account resulting from Elective Deferral Contributions.  If such Excess Contributions exceed theamount of Excess Contributions in the Participant’s Account resulting fromElective Deferral Contributions, the balance shall be distributed from theParticipant’s Account resulting from Qualified Matching Contributions (ifapplicable) and Qualified Nonelective Contributions, respectively.

 

Fortaxable years beginning after December 31, 2005, distribution of ExcessContributions shall be made on a pro rata basis from the Participant’s Accountresulting from Pre-tax Elective Deferral Contributions and Roth ElectiveDeferral Contributions in the same proportion that such Contributions were madefor the applicable year.

 

AnyMatching Contributions that were based on the Elective Deferral Contributionsdistributed as Excess Contributions, plus any income and minus any lossallocable thereto, shall be forfeited whether or not such amounts aredistributed as Excess Contributions.

 

(d)                         ACP Test.  As of the end of each PlanYear, the Plan must satisfy the ACP Test. The ACP Test shall be satisfied using the prior year testing method orthe current year testing method, as elected by the Employer.

 

(1)                          Prior Year Testing Method.  TheACP for a Plan Year for Eligible Participants who are Highly CompensatedEmployees for each Plan Year and the prior year’s ACP for Eligible Participantswho were Nonhighly Compensated Employees for the prior Plan Year must satisfyone of the following tests:

 

(i)                            The ACP for a Plan Year for EligibleParticipants who are Highly Compensated Employees for the Plan Year shall notexceed the prior year’s ACP for Eligible Participants who were NonhighlyCompensated Employees for the prior Plan Year multiplied by 1.25; or

 

(ii)                         The ACP for a Plan Year for EligibleParticipants who are Highly Compensated Employees for the Plan Year:

 

A.                            shall not exceed the prior year’s ACP forEligible Participants who were Nonhighly Compensated Employees for the priorPlan Year multiplied by 2, and

 

B.                              the difference between such ACPs is not morethan 2.

 

Ifthis is not a successor plan, for the first Plan Year the Plan permits anyParticipant to make Participant Contributions, provides for MatchingContributions, or both, for purposes of the

 

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foregoingtests, the prior year’s Nonhighly Compensated Employees’ ACP shall be 3 percentor the Plan Year’s ACP for these Eligible Participants, as elected by theEmployer.

 

(2)                          Current Year Testing Method.  TheACP for a Plan Year for Eligible Participants who are Highly CompensatedEmployees for each Plan Year and the ACP for Eligible Participants who are NonhighlyCompensated Employees for the Plan Year must satisfy one of the followingtests:

 

(i)                            The ACP for a Plan Year for EligibleParticipants who are Highly Compensated Employees for the Plan Year shall notexceed the ACP for Eligible Participants who are Nonhighly CompensatedEmployees for the Plan Year multiplied by 1.25; or

 

(ii)                         The ACP for a Plan Year for EligibleParticipants who are Highly Compensated Employees for the Plan Year:

 

A.                            shall not exceed the ACP for EligibleParticipants who are Nonhighly Compensated Employees for the Plan Yearmultiplied by 2, and

 

B.                              the difference between such ACPs is not morethan 2.

 

Ifthe Employer has elected to use the current year testing method, that electioncannot be changed unless (i) the Plan has been using the current yeartesting method for the preceding five Plan Years, or if less, the number ofPlan Years the Plan has been in existence; or (ii) if as a result of amerger or acquisition described in Code Section 410(b)(6)(C)(i), theEmployer maintains both a plan using the prior year testing method and a planusing the current year testing method and the change is made within thetransition period described in Code Section 410(b)(6)(C)(ii).

 

AParticipant is a Highly Compensated Employee for a particular Plan Year if hemeets the definition of a Highly Compensated Employee in effect for that PlanYear.  Similarly, a Participant is aNonhighly Compensated Employee for a particular Plan Year if he does not meetthe definition of a Highly Compensated Employee in effect for that Plan Year.

 

TheContribution Percentage for any Eligible Participant who is a HighlyCompensated Employee for the Plan Year and who is eligible to have ContributionPercentage Amounts allocated to his account under two or more plans describedin Code Section 401(a) or arrangements described in Code Section 401(k) thatare maintained by the Employer or a Controlled Group member shall be determinedas if the total of such Contribution Percentage Amounts was made under eachplan and arrangement.  For Plan Yearsbeginning on or after January 1, 2006, if a Highly Compensated Employeeparticipates in two or more such plans or arrangements that have different planyears, all Contribution Percentage Amounts made during the Plan Year shall beaggregated.  For Plan Years beginningbefore January 1, 2006, all such plans and arrangements ending with orwithin the same calendar year shall be treated as a single plan orarrangement.  The foregoingnotwithstanding, certain plans shall be treated as separate if mandatorilydisaggregated under the regulations of Code Section 401(m).

 

Inthe event 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, orif one or more other plans satisfy the requirements of such Code sections onlyif aggregated with this Plan, then this section shall be applied by determiningthe Contribution Percentage of Employees as if all such plans were a singleplan.  If more than 10 percent of theEmployer’s Nonhighly Compensated Employees are involved in a plan coveragechange as defined in section 1.401(m)-2(c)(4) of the regulations, then anyadjustments to the Nonhighly Compensated Employee ACP for the prior year shallbe made in accordance with such regulations if the

 

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Employerhas elected to use the prior year testing method.  Plans may be aggregated in order to satisfyCode Section 401(m) only if they have the same plan year and use thesame testing method for the ACP Test.

 

Forpurposes of the ACP Test, Participant Contributions are considered to have beenmade in the Plan Year in which contributed to the Plan.  Matching Contributions and QualifiedNonelective Contributions will be considered to have been made for a Plan Yearif made no later than the end of the 12-month period beginning on the day afterthe close of the Plan Year.

 

Notwithstandingany other provisions of this Plan, Excess Aggregate Contributions, plus anyincome and minus any loss allocable thereto, shall be forfeited, if not vested,or distributed, if vested, no later than 12 months after the last day of a PlanYear to Participants to whose Accounts such Excess Aggregate Contributions wereallocated for such Plan Year.  ExcessAggregate Contributions are allocated to the Highly Compensated Employees withthe largest Contribution Percentage Amounts taken into account in calculatingthe ACP Test for the year in which the excess arose, beginning with the HighlyCompensated Employee with the largest amount of such Contribution PercentageAmounts and continuing in descending order until all of the Excess AggregateContributions have been allocated.  ForPlan Years beginning on or after January 1, 2006, if a Highly CompensatedEmployee participates in two or more plans or arrangements of the Employer orof a Controlled Group member that include Contribution Percentage Amounts, theamount distributed shall not exceed the Contribution Percentage Amounts takeninto account in calculating the ACP Test and made to this Plan for the year inwhich the excess arose.  If such ExcessAggregate Contributions are distributed more than 2 1/2 months after thelast day of the Plan Year in which such excess amounts arose, a 10 percentexcise tax shall be imposed on the employer maintaining the plan with respectto such amounts.

 

ExcessAggregate Contributions shall be treated as Annual Additions, as defined in theCONTRIBUTION LIMITATION SECTION of this article, even if distributed.

 

TheExcess Aggregate Contributions shall be adjusted for any income or loss.  The income or loss allocable to such ExcessAggregate Contributions allocated to each Participant shall be equal to theincome or loss allocable to the Participant’s Contribution Percentage Amountsfor the Plan Year in which the excess occurred multiplied by a fraction.  The numerator of the fraction is the ExcessAggregate Contributions.  The denominatorof the fraction is the closing balance without regard to any income or lossoccurring during such Plan Year (as of the end of such Plan Year) of theParticipant’s Account resulting from Contribution Percentage Amounts.

 

Forpurposes of determining income or loss on Excess Aggregate Contributionsbeginning with the 2006 Plan Year, any Excess Aggregate Contributions, inaddition to any adjustment for income or loss for the Plan Year in which theexcess occurred, shall be adjusted for income or loss for the gap periodbetween the end of such Plan Year and the date of distribution.  Such income or loss allocable to the gapperiod shall be equal to 10% of the income or loss allocable to the ExcessAggregate Contributions for the Plan Year multiplied by the number of completemonths (counting a partial month of 16 days or more as a complete month) in thegap period.

 

ExcessAggregate Contributions allocated to a Participant shall be distributed fromthe Participant’s Account resulting from Participant Contributions that are notrequired as a condition of employment or participation or for obtainingadditional benefits from Employer Contributions.  If such Excess Aggregate Contributions exceedthe balance in the Participant’s Account resulting from such ParticipantContributions, the balance shall be forfeited, if not vested, or distributed,if vested, on a pro rata basis from the Participant’s Account resulting fromContribution Percentage Amounts.

 

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(e)                          Employer Elections.  TheEmployer has made an election to use the prior year testing method.

 

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**ARTICLE IV**

 

**INVESTMENTOF CONTRIBUTIONS**

 

**SECTION 4.01—INVESTMENT AND TIMING OFCONTRIBUTIONS.**

 

The handling of Contributions and Plan assets is governed by theprovisions of the Trust Agreement and any other relevant document, such as anAnnuity Contract (for the purposes of this paragraph alone, the Trust Agreementand such other documents will each be referred to as a “document” orcollectively as the “documents”), duly entered into by or with regard to thePlan that govern such matters.  To theextent permitted by the documents, the parties named below shall direct theContributions for investment in any of the investment options or investmentvehicles available to the Plan under or through the documents, and may requestthe transfer of amounts resulting from those Contributions between suchinvestment options and investment vehicles. A Participant may not direct the investment of all or any portion of hisAccount in collectibles.  Collectiblesmean any work of art, rug or antique, metal or gem, stamp or coin, alcoholicbeverage, or other tangible personal property specified by the Secretary of theTreasury.  However, for tax yearsbeginning after December 31, 1997, certain coins and bullion as providedin Code Section 408(m)(3) shall not be considered collectibles.  To the extent that a Participant who has theability to provide investment direction fails to give timely investmentdirection, the amount for which no investment direction is in place shall beinvested in such investment options and investment vehicles as provided in theservice and expense agreement or such other documents duly entered into by orwith regard to the Plan that govern such matters.  If the Named Fiduciary has investmentdirection, the Contributions shall be invested ratably in the investmentoptions and investment vehicles available to the Plan under or through thedocuments.  The Named Fiduciary shallhave investment direction for amounts that have not been allocated toParticipants.  To the extent aninvestment is no longer available, the Named Fiduciary may require that amountscurrently held in such investment be reinvested in other investments.

 

At least annually, the Named Fiduciary shall review all pertinentEmployee information and Plan data in order to establish the funding policy ofthe Plan and to determine appropriate methods of carrying out the Plan’sobjectives.  The Named Fiduciary shallinform the Trustee and any Investment Manager of the Plan’s short-term andlong-term financial needs so the investment policy can be coordinated with thePlan’s financial requirements.

 

(a)                          Employer Contributions other than ElectiveDeferral Contributions:  The Participantshall direct the investment of such Employer Contributions and transfer ofamounts resulting from those Contributions.

 

(b)                         Elective Deferral Contributions:  The Participant shall direct the investmentof Elective Deferral Contributions and transfer of amounts resulting from thoseContributions.

 

(c)                          Rollover Contributions:  The Participant shall direct the investmentof Rollover Contributions and transfer of amounts resulting from thoseContributions.

 

However, the Named Fiduciary may delegate to the Investment Managerinvestment direction for Contributions and amounts that are not subject toParticipant direction.

 

All Contributions are forwarded by the Employer to (i) the Trusteeto be deposited in the Trust Fund or otherwise invested by the Trustee inaccordance with the relevant documents; or (ii) the Insurer to bedeposited under the Annuity Contract, as applicable.  Contributions that are accumulated throughpayroll deduction shall be paid to the Trustee or Insurer, as applicable, bythe earlier of (i) the date the Contributions can reasonably be segregatedfrom the Employer’s assets, or (ii) the 15th business day of the monthfollowing the month in which the Contributions would otherwise have been paidin cash to the Participant.

 

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**SECTION 4.01A—INVESTMENT IN QUALIFYINGEMPLOYER SECURITIES.**

 

All or some portion of the Participant’s Account may be invested inQualifying Employer Securities; however, no new Contributions or transfersshall be allowed into the Qualifying Employer Securities Fund.

 

For purposes of determining the annual valuation of the Plan, and forreporting to Participants and regulatory authorities, the assets of the Planshall be valued at least annually on the Valuation Date which corresponds tothe last day of the Plan Year.  The fairmarket value of Qualifying Employer Securities shall be determined on suchValuation Date.  The prices of QualifyingEmployer Securities as of the date of the transaction shall apply for purposesof valuing distributions and other transactions of the Plan to the extent suchvalue is representative of the fair market value of such securities in theopinion of the Plan Administrator.  Thevalue of a Participant’s Account held in the Qualifying Employer SecuritiesFund may be expressed in units.

 

If the Qualifying Employer Securities are not publicly traded, or if anextremely thin market exists for such securities so that reasonable valuationmay not be obtained from the market place, then such securities must be valuedat least annually by an independent appraiser who is not associated with theEmployer, the Plan Administrator, the Trustee, or any person related to anyfiduciary under the Plan.  Theindependent appraiser may be associated with a person who is merely a contractadministrator with respect to the Plan, but who exercises no discretionaryauthority and is not a plan fiduciary.

 

If there is a public market for Qualifying Employer Securities of thetype held by the Plan, then the Plan Administrator may use as the value of thesecurities the price at which such securities trade in such market.  If the Qualifying Employer Securities do nottrade on the relevant date, or if the market is very thin on such date, thenthe Plan Administrator may use for the valuation the next preceding trading dayon which the trading prices are representative of the fair market value of suchsecurities in the opinion of the Plan Administrator.

 

Cash dividends payable on the Qualifying Employer Securities shall bereinvested in additional shares of such securities.  In the event of any cash or stock dividend orany stock split, such dividend or split shall be credited to the Accounts basedon the number of shares of Qualifying Employer Securities credited to eachAccount as of the payable date of such dividend or split.

 

In the event that the Trustee acquires Qualifying Employer Securitiesby purchase from a “disqualified person” as defined in Code Section 4975(e)(2) orfrom a “party-in-interest” as defined in ERISA Section 3(14), the terms ofsuch purchase shall contain the provision that in the event there is a finaldetermination by the Internal Revenue Service, the Department of Labor, orcourt of competent jurisdiction that the fair market value of such securitiesas of the date of purchase was less than the purchase price paid by theTrustee, then the seller shall pay or transfer, as the case may be, to theTrustee an amount of cash or shares of Qualifying Employer Securities equal invalue to the difference between the purchase price and such fair market valuefor all such shares.  In the event thatcash or shares of Qualifying Employer Securities are paid or transferred to theTrustee under this provision, such securities shall be valued at their fairmarket value as of the date of such purchase, and interest at a reasonable ratefrom the date of purchase to the date of payment or transfer shall be paid bythe seller on the amount of cash paid.

 

The Plan Administrator may direct the Trustee to sell, resell, orotherwise dispose of Qualifying Employer Securities to any person, includingthe Employer, provided that any such sales to any disqualified person orparty-in-interest, including the Employer, will be made at not less than thefair market value and no commission will be charged.  Any such sale shall be made in conformancewith ERISA Section 408(e).

 

The Governing Board is responsible for compliance with any applicableFederal or state securities law with respect to all aspects of the Plan.  If the Qualifying Employer Securities orinterest in this Plan are required to be registered in order to permitinvestment in the Qualifying Employer Securities Fund as provided in thissection, then such investment will not be effective until the later of theeffective date of the Plan or the date such registration or

 

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qualification is effective.  TheGoverning Board will take or cause to be taken any and all such actions as maybe necessary or appropriate to effect such registration or qualification.  Further, if the Trustee is directed todispose of any Qualifying Employer Securities held under the Plan undercircumstances which require registration or qualification of the securitiesunder applicable Federal or state securities laws, then the Governing Boardwill take or cause to be taken any and all such action as may be necessary or appropriateto effect such registration or qualification. The Governing Board is responsible for all compliance requirements underSection 16 of the Securities Act with respect to Qualifying EmployerSecurities held under the Plan.

 

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**ARTICLE V**

 

**BENEFITS**

 

**SECTION 5.01—RETIREMENT BENEFITS.**

 

On a Participant’s Retirement Date, his Vested Account shall bedistributed to him according to the distribution of benefits provisions of Article VIand the provisions of the SMALL AMOUNTS SECTION of Article X.

 

**SECTION 5.02—DEATH BENEFITS.**

 

If a Participant dies before his Annuity Starting Date, his VestedAccount shall be distributed according to the distribution of benefitsprovisions of Article VI and the provisions of the SMALL AMOUNTS SECTION ofArticle X.

 

**SECTION 5.03—VESTED BENEFITS.**

 

If an Inactive Participant’s Vested Account is not payable under theSMALL AMOUNTS SECTION of Article X, he may elect, but is notrequired, to receive a distribution of any part of his Vested Account after hehas a Severance from Employment.  Adistribution under this paragraph shall be a retirement benefit and shall bedistributed to the Participant according to the distribution of benefits provisionsof Article VI.

 

A Participant may not elect to receive a distribution under theprovisions of this section after he again becomes an Employee until hesubsequently has a Severance from Employment and meets the requirements of thissection.

 

If an Inactive Participant does not receive an earlier distribution,upon his Retirement Date or death, his Vested Account shall be distributedaccording to the provisions of the RETIREMENT BENEFITS SECTION or theDEATH BENEFITS SECTION of this article.

 

The Nonvested Account of an Inactive Participant who has had aSeverance from Employment shall remain a part of his Account until it becomes aForfeiture.  However, if he again becomesan Employee so that his Vesting Percentage can increase, the Nonvested Accountmay become a part of his Vested Account.

 

**SECTION 5.04—WHEN BENEFITS START.**

 

(a)                          Unless otherwise elected, benefits shallbegin before the 60th day following the close of the Plan Year in which thelatest date below occurs:

 

(1)                          The date the Participant attains age 65 (orNormal Retirement Age, if earlier).

 

(2)                          The 10th anniversary of the Participant’sEntry Date.

 

(3)                          The date the Participant terminates servicewith the Employer.

 

Notwithstanding the foregoing, the failure of a Participant to consentto a distribution while a benefit is immediately distributable, within themeaning of the ELECTION PROCEDURES SECTION of Article VI, shall bedeemed to be an election to defer the start of benefits sufficient to satisfythis section.

 

The Participant may elect to have benefits begin after the latest datefor beginning benefits described above, subject to the following provisions ofthis section.  The Participant shall makethe election in writing.  Such electionmust be made before his Normal Retirement Date or the date he has a

 

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Severance from Employment, if later. The Participant shall not elect a date for beginning benefits or a formof distribution that would result in a benefit payable when he dies which wouldbe more than incidental within the meaning of governmental regulations.

 

Benefits shall begin on an earlier date if otherwise provided in thePlan.  For example, the Participant’sRetirement Date or Required Beginning Date, as defined in the DEFINITIONS SECTION ofArticle VII.

 

(b)                         The Participant’s Vested Account that resultsfrom Elective Deferral Contributions and Qualified Nonelective Contributionsmay not be distributed earlier than Severance from Employment (separation fromservice, for Plan Years beginning before January 1, 2002), death, ordisability.  Such amount may also bedistributed upon:

 

(1)                          Termination of the Plan, as permitted in Article VIII.

 

(2)                          The attainment of age 59 1/2 aspermitted in the WITHDRAWAL BENEFITS SECTION of this article or in thedefinition of Normal Retirement Date in the DEFINITIONS SECTION of Article I.

 

(3)                          The hardship of the Participant as permittedin the WITHDRAWAL BENEFITS SECTION of this article.

 

All distributions that may be made pursuant to one or more of theforegoing distributable events will be a retirement benefit and shall bedistributed to the Participant according to the distribution of benefitsprovisions of Article VI.  Inaddition, distributions that are triggered by the termination of the Plan mustbe made in a lump sum.  A lump sum shallinclude a distribution of an annuity contract.

 

**SECTION 5.05—WITHDRAWAL BENEFITS.**

 

A Participant may withdraw any part of his Vested Account resultingfrom Rollover Contributions.  AParticipant may make such a withdrawal at any time.

 

A Participant who has attained age 59 1/2 may withdraw any part ofhis Vested Account resulting from the following Contributions:

 

Elective Deferral Contributions

Matching Contributions

Qualified Nonelective Contributions

 

A Participant may make such awithdrawal at any time.

 

A Participant may withdraw any part of his Vested Account resultingfrom the following Contributions:

 

Elective Deferral Contributions

Matching Contributions

 

in the event of hardship due to an immediate and heavy financialneed.  Withdrawals from the Participant’sAccount resulting from Elective Deferral Contributions shall be limited to theamount of the Participant’s Elective Deferral Contributions plus incomeallocable thereto credited to his Account as of December 31, 1988.

 

Immediate and heavy financial need shall be limited to:  (i) expenses incurred or necessary formedical care that would be deductible under Code Section 213(d) (determinedwithout regard to whether the expenses exceed 7.5% of adjusted gross income); (ii) thepurchase (excluding mortgage payments) of a principal residence for the

 

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Participant; (iii) payment of tuition, related educational fees,and room and board expenses, for the next 12 months of post-secondary educationfor the Participant, his spouse, children, or dependents (as defined in Code Section 152without regard to Code Sections 152(b)(1), (b)(2), and (d)(1)(B)); (iv) paymentsnecessary to prevent the eviction of the Participant from, or foreclosure onthe mortgage of, the Participant’s principal residence; (v) payments forfuneral or burial expenses for the Participant’s deceased parent, spouse,child, or dependent (as defined in Code Section 152 without regard to CodeSection 152(d))1)(B)); (vi) expenses to repair damage to theParticipant’s principal residence that would qualify for a casualty lossdeduction under Code Section 165 (determined without regard to whether theloss exceeds 10% of adjusted gross income); or (vii) any otherdistribution which is deemed by the Commissioner of Internal Revenue to be madeon account of immediate and heavy financial need as provided in Treasuryregulations.

 

No withdrawal shall be allowed which is not necessary to satisfy suchimmediate and heavy financial need.  Suchwithdrawal shall be deemed necessary only if all of the following requirementsare met:  (i) the distribution isnot in excess of the amount of the immediate and heavy financial need(including amounts necessary to pay any Federal, state, or local income taxesor penalties reasonably anticipated to result from the distribution); (ii) theParticipant has obtained all distributions, other than hardship distributions,and all nontaxable loans currently available under all plans maintained by theEmployer; and (iii) the Plan, and all other plans maintained by theEmployer, provide that the Participant’s elective contributions and participantcontributions will be suspended for at least six months after receipt of thehardship distribution.  The Plan willsuspend elective contributions and participant contributions for six months asprovided in the preceding sentence.  AParticipant shall not cease to be an Eligible Participant, as defined in theEXCESS AMOUNTS SECTION of Article III, merely because his electivecontributions or participant contributions are suspended.

 

A request for withdrawal shall be made in such manner and in accordancewith such rules as the Employer will prescribe for this purpose (includingby means of voice response or other electronic means under circumstances theEmployer permits). Withdrawals shall be a retirement benefit and shall bedistributed to the Participant according to the distribution of benefitsprovisions of Article VI.  Aforfeiture shall not occur solely as a result of a withdrawal.

 

**SECTION 5.06—DISTRIBUTIONS UNDERQUALIFIED DOMESTIC RELATIONS ORDERS.**

 

The Plan specifically permits distributions to an Alternate Payee undera qualified domestic relations order as defined in Code Section 414(p), atany time, irrespective of whether the Participant has attained his earliestretirement age, as defined in Code Section 414(p), under the Plan.  A distribution to an Alternate Payee beforethe Participant has attained his earliest retirement age is available only ifthe order specifies that distribution shall be made prior to the earliestretirement age or allows the Alternate Payee to elect a distribution prior tothe earliest retirement age.

 

Nothing in this section shall permit a Participant to receive adistribution at a time otherwise not permitted under the Plan nor shall itpermit the Alternate Payee to receive a form of payment not permitted under thePlan.

 

The benefit payable to an Alternate Payee shall be subject to theprovisions of the SMALL AMOUNTS SECTION of Article X if the value ofthe benefit (disregarding the portion, if any, of the benefit resulting fromthe Participant’s Rollover Contributions) does not exceed $5,000.

 

The Plan Administrator shall establish reasonable procedures todetermine the qualified status of a domestic relations order.  Upon receiving a domestic relations order,the Plan Administrator shall promptly notify the Participant and each AlternatePayee named in the order, in writing, of the receipt of the order and the Plan’sprocedures for determining the qualified status of the order.  Within a reasonable period of time afterreceiving the domestic relations order, the Plan Administrator shall determinethe qualified status of the order and shall notify the Participant and eachAlternate Payee, in writing, of its determination.  The Plan Administrator shall provide noticeunder this paragraph by mailing to the individual’s address specified in thedomestic relations order, or in a manner consistent with Department

 

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of Labor regulations.  The PlanAdministrator may treat as qualified any domestic relations order enteredbefore January 1, 1985, irrespective of whether it satisfies all therequirements described in Code Section 414(p).

 

If any portion of the Participant’s Vested Account is payable duringthe period the Plan Administrator is making its determination of the qualifiedstatus of the domestic relations order, a separate accounting shall be made ofthe amount payable.  If the PlanAdministrator determines the order is a qualified domestic relations orderwithin 18 months of the date amounts are first payable following receipt of theorder, the payable amounts shall be distributed in accordance with theorder.  If the Plan Administrator doesnot make its determination of the qualified status of the order within the18-month determination period, the payable amounts shall be distributed in themanner the Plan would distribute if the order did not exist and the order shallapply prospectively if the Plan Administrator later determines the order is aqualified domestic relations order.

 

The Plan shall make payments or distributions required under thissection by separate benefit checks or other separate distribution to theAlternate Payee(s).

 

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**ARTICLE VI**

 

**DISTRIBUTIONOF BENEFITS**

 

**SECTION 6.01—AUTOMATIC FORMS OFDISTRIBUTION.**

 

Unless an optional form of benefit is selected pursuant to a qualifiedelection within the election period (see the ELECTION PROCEDURES SECTION ofthis article), the automatic form of benefit payable to or on behalf of aParticipant is determined as follows:

 

(a)                          Retirement Benefits.  Theautomatic form of retirement benefit for a Participant who does not die beforehis Annuity Starting Date shall be a single sum payment.

 

(b)                         Death Benefits.  Theautomatic form of death benefit for a Participant who dies before his AnnuityStarting Date shall be a single sum payment to the Participant’s Beneficiary.

 

**SECTION 6.02—OPTIONAL FORMS OF DISTRIBUTION.**

 

(a)                          Retirement Benefits.  Theoptional forms of retirement benefit shall be the following:  a fixed period installment option and a fixedpayment installment option.  A single sumpayment is also available.  That portionof a Participant’s Account that is held in the Qualifying Employer SecuritiesFund may be distributed in kind.

 

The fixed period installment option is an optional form of benefitunder which the Participant elects to receive substantially equal annualpayments over a fixed period of whole years. The annual payment may be paid in annual, semi-annual, quarterly, ormonthly installments as elected by the Participant.  The Participant may elect to receive additionalpayments.

 

The fixed payment installment option is an optional form of benefitunder which the Participant elects to receive a specified dollar amount eachyear.  The annual payment may be paid inannual, semi-annual, quarterly, or monthly installments as elected by theParticipant.  The Participant may electto receive additional payments.

 

Under the installment options the amount payable in the Participant’sfirst Distribution Calendar Year, as defined in the DEFINITIONS SECTION ofArticle VII, must satisfy the minimum distribution requirements of Article VIIfor such year.  Distributions for laterDistribution Calendar Years must satisfy the minimum distribution requirementsof Article VII for such years.  Ifthe Participant’s Annuity Starting Date does not occur until his secondDistribution Calendar Year, the amount payable for such year must satisfy theminimum distribution requirements of Article VII for both the first andsecond Distribution Calendar Years.

 

Election of an optional form is subject to the qualified electionprovisions of the ELECTION PROCEDURES SECTION of this article and thedistribution requirements of Article VII.

 

Any annuity contract distributed shall be nontransferable.  The terms of any annuity contract purchasedand distributed by the Plan to a Participant or spouse shall comply with therequirements of this Plan.

 

(b)                         Death Benefits.  Theoptional forms of death benefit are a single sum payment and any annuity thatis an optional form of retirement benefit.

 

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Election of an optional form is subject to the qualified electionprovisions of the ELECTION PROCEDURES SECTION of this article and thedistribution requirements of Article VII.

 

**SECTION 6.03—ELECTION PROCEDURES.**

 

The Participant or Beneficiary shall make any election under thissection in writing.  The PlanAdministrator may require such individual to complete and sign any necessarydocuments as to the provisions to be made. Any election permitted under (a) and (b) below shall besubject to the qualified election provisions of (c) below.

 

(a)                          Retirement Benefits.  AParticipant may elect his Beneficiary and may elect to have retirement benefitsdistributed under any of the optional forms of retirement benefit available inthe OPTIONAL FORMS OF DISTRIBUTION SECTION of this article.

 

(b)                         Death Benefits.  AParticipant may elect his Beneficiary and may elect to have death benefitsdistributed under any of the optional forms of death benefit available in theOPTIONAL FORMS OF DISTRIBUTION SECTION of this article.

 

If the Participant has not elected an optional form of distribution forthe death benefit payable to his Beneficiary, the Beneficiary may, for his ownbenefit, elect the form of distribution, in like manner as a Participant.

 

(c)                          Qualified Election.  TheParticipant or Beneficiary may make an election at any time during the electionperiod.  The Participant or Beneficiarymay revoke the election made (or make a new election) at any time and anynumber of times during the election period. An election is effective only if it meets the consent requirementsbelow.

 

(1)                          Election Period for Retirement Benefits.  TheParticipant may make an election as to retirement benefits at any time beforethe Annuity Starting Date.

 

(2)                          Election Period for Death Benefits.  AParticipant may make an election as to death benefits at any time before hedies.  The Beneficiary’s election periodbegins on the date the Participant dies and ends on the date benefits begin.

 

(3)                          Consent to Election.  Ifthe Participant’s Vested Account (disregarding the portion, if any, of hisAccount resulting from Rollover Contributions) exceeds $5,000, any benefit thatis immediately distributable requires the consent of the Participant.

 

The consent of the Participant to a benefit that is immediatelydistributable must not be made before the date the Participant is provided withthe notice of the ability to defer the distribution.  Such consent shall be in writing.

 

The consent shall not be made more than 90 days before the AnnuityStarting Date.  The consent of theParticipant shall not be required to the extent that a distribution is requiredto satisfy Code Section 401(a)(9) or 415.

 

In addition, upon termination of this Plan, if the Plan does not offeran annuity option (purchased from a commercial provider), and if the Employer (orany entity within the same Controlled Group) does not maintain another definedcontribution plan (other than an employee stock ownership plan as defined inCode Section 4975(e)(7)), the Participant’s Account balance will, withoutthe Participant’s consent, be distributed to the Participant.  However, if any entity within the sameControlled Group maintains another defined contribution plan (other than anemployee stock ownership plan as defined in Code Section 4975(e)(7)) thenthe Participant’s Account will

 

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be transferred, without the Participant’s consent, to the other plan ifthe Participant does not consent to an immediate distribution.

 

A benefit is immediately distributable if any part of the benefit couldbe distributed to the Participant before the Participant attains the older ofNormal Retirement Age or age 62.

 

Spousal consent is needed to name a Beneficiary other than theParticipant’s spouse.  If the Participantnames a Beneficiary other than his spouse, the spouse has the right to limitconsent only to a specific Beneficiary. The spouse can relinquish such right. Such consent shall be in writing. The spouse’s consent shall be witnessed by a plan representative ornotary public.  The spouse’s consent mustacknowledge the effect of the election, including that the spouse had the rightto limit consent only to a specific Beneficiary and that the relinquishment ofsuch right was voluntary.  Unless theconsent of the spouse expressly permits designations by the Participant withouta requirement of further consent by the spouse, the spouse’s consent must belimited to the Beneficiary, class of Beneficiaries, or contingent Beneficiarynamed in the election.

 

Spousal consent is not required, however, if the Participantestablishes to the satisfaction of the plan representative that the consent ofthe spouse cannot be obtained because there is no spouse or the spouse cannotbe located.  A spouse’s consent underthis paragraph shall not be valid with respect to any other spouse.  A Participant may revoke a prior electionwithout the consent of the spouse.  Anynew election will require a new spousal consent, unless the consent of thespouse expressly permits such election by the Participant without furtherconsent by the spouse.  A spouse’sconsent may be revoked at any time within the Participant’s election period.

 

**SECTION 6.04—NOTICE REQUIREMENTS.**

 

Optional Forms of Retirement Benefit and Right to Defer.  ThePlan Administrator shall furnish to the Participant a written explanation ofthe right of the Participant to defer distribution until the benefit is nolonger immediately distributable.  Suchnotice shall include a written explanation of the optional forms of retirementbenefit in the OPTIONAL FORMS OF DISTRIBUTION SECTION of this article,including a general description of the material features and an explanation ofrelative values of these options, in a manner that would satisfy the noticerequirements of Code Section 417(a)(3) and section 1.417(a)(3)-1 ofthe regulations.

 

The Plan Administrator shall furnish the written explanation by amethod reasonably calculated to reach the attention of the Participant no lessthan 30 days, and no more than 90 days, before the Annuity Starting Date.

 

However, distribution may begin less than 30 days after the noticedescribed in this subparagraph is given, provided the Plan Administratorclearly informs the Participant that he has a right to a period of at least 30days after receiving the notice to consider the decision of whether or not toelect a distribution (and if applicable, a particular distribution option), andthe Participant, after receiving the notice, affirmatively elects adistribution.

 

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**ARTICLE VII**

 

**REQUIREDMINIMUM DISTRIBUTIONS**

 

**SECTION 7.01—APPLICATION.**

 

The optional formsof distribution are only those provided in Article VI.  An optional form of distribution shall not bepermitted unless it meets the requirements of this article.  The timing of any distribution must meet therequirements of this article.  Unlessotherwise specified, the provisions of this article apply to calendar yearsbeginning after December 31, 2002.

 

**SECTION 7.02—DEFINITIONS.**

 

Forpurposes of this article, the following terms are defined:

 

**Designated Beneficiary** means theindividual who is designated by the Participant (or the Participant’s survivingspouse) as the Beneficiary of the Participant’s interest under the Plan and whois the designated beneficiary under Code Section 401(a)(9) andsection 1.401(a)(9)-4 of the regulations.

 

**Distribution Calendar Year** means acalendar year for which a minimum distribution is required.  For distributions beginning before theParticipant’s death, the first Distribution Calendar Year is the calendar yearimmediately preceding the calendar year that contains the Participant’sRequired Beginning Date.  Fordistributions beginning after the Participant’s death, the first DistributionCalendar Year is the calendar year in which distributions are required to beginunder (b)(2) of the REQUIRED MINIMUM DISTRIBUTIONS SECTION of thisarticle.  The required minimumdistribution for the Participant’s first Distribution Calendar Year will bemade on or before the Participant’s Required Beginning Date.  The required minimum distribution for otherDistribution Calendar Years, including the required minimum distribution forthe Distribution Calendar Year in which the Participant’s Required BeginningDate occurs, will be made on or before December 31 of that DistributionCalendar Year.

 

**5-percent Owner** means a Participant who is treated as a5-percent Owner for purposes of this article. A Participant is treated as a 5-percent Owner for purposes of thisarticle if such Participant is a 5-percent owner as defined in Code Section 416at any time during the Plan Year ending with or within the calendar year inwhich such owner attains age 70 1/2.

 

Oncedistributions have begun to a 5-percent Owner under this article, they mustcontinue to be distributed, even if the Participant ceases to be a 5-percentOwner in a subsequent year.

 

**Life Expectancy** means life expectancy as computed by useof the Single Life Table in Q&A-1 in section 1.401(a)(9)-9 of theregulations.

 

**Participant’s Account Balance** means theAccount balance as of the last Valuation Date in the calendar year immediatelypreceding the Distribution Calendar Year (valuation calendar year) increased bythe amount of any contributions made and allocated or forfeitures allocated tothe Account as of dates in the valuation calendar year after the Valuation Dateand decreased by distributions made in the valuation calendar year after theValuation Date.  The Account balance forthe valuation calendar year includes any amounts rolled over or transferred tothe Plan either in the valuation calendar year or in the Distribution CalendarYear if distributed or transferred in the valuation calendar year.

 

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

 

RequiredBeginning Date means, for any Participant who is not a 5-percent Owner, April 1of the calendar year following the later of the calendar year in which heattains age 70 1/2 or the calendar year in which he retires.

 

Thepreretirement age 70 1/2 distribution option is only eliminated withrespect to Participants who reach age 70 1/2 in or after a calendar yearthat begins after the later of December 31, 1998, or the adoption date ofthe amendment which eliminated such option. The preretirement age 70 1/2 distribution option is an optionalform of benefit under which benefits payable in a particular distribution form(including any modifications that may be elected after benefits begin) begin ata time during the period that begins on or after January 1 of the calendaryear in which the Participant attains age 70 1/2 and ends April 1 ofthe immediately following calendar year.

 

Theoptions available for Participants who are not 5-percent Owners and attainedage 70 1/2 in calendar years before the calendar year that begins afterthe later of December 31, 1998, or the adoption date of the amendmentwhich eliminated the preretirement age 70 1/2 distribution option shall bethe following.  Any such Participantattaining age 70 1/2 in years after 1995 may elect by April 1 of thecalendar year following the calendar year in which he attained age 70 1/2(or by December 31, 1997 in the case of a Participant attaining age70 1/2 in 1996) to defer distributions until April 1 of the calendaryear following the calendar year in which he retires.  If no such election is made, the Participantshall begin receiving distributions by April 1 of the calendar yearfollowing the year in which the Participant attained age 70 1/2 (or by December 31,1997 in the case of a Participant attaining age 70 1/2 in 1996).  Any such Participant attaining age70 1/2 in years prior to 1997 may elect to stop distributions that are notpurchased annuities and recommence by April 1 of the calendar yearfollowing the calendar year in which he retires.  There shall be a new Annuity Starting Dateupon recommencement.

 

**SECTION 7.03—REQUIREDMINIMUM DISTRIBUTIONS.**

 

(a)                        General Rules.

 

(1)                        Therequirements of this article shall apply to any distribution of a Participant’sinterest and will take precedence over any inconsistent provisions of thisPlan.

 

(2)                        Alldistributions required under this article shall be determined and made inaccordance with the regulations under Code Section 401(a)(9) and theminimum distribution incidental benefit requirement of Code Section 401(a)(9)(G).

 

(b)                       Time and Manner of Distribution.

 

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

 

(2)                        Death of Participant Before Distributions Begin.  If the Participant dies beforedistributions begin, the Participant’s entire interest will be distributed, orbegin to be distributed, no later than as follows:

 

(i)                          If the Participant’s surviving spouse is the Participant’s sole DesignatedBeneficiary, distributions to the surviving spouse will begin by December 31of the calendar year immediately following the calendar year in which theParticipant died, or by December 31 of the calendar year in which theParticipant would have attained age 70 1/2, if later, except to the extentthat an election is made to receive distributions in accordance with the 

 

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5-year rule under (e) below.  Under the 5-year rule, the Participant’sentire interest will be distributed to the Designated Beneficiary by December 31of the calendar year containing the fifth anniversary of the Participant’sdeath.

 

(ii)                       If the Participant’s surviving spouse is not the Participant’s soleDesignated Beneficiary, distributions to the Designated Beneficiary will beginby December 31 of the calendar year immediately following the calendaryear in which the Participant died, except to the extent that an election ismade to receive distributions in accordance with the 5-year rule under (e) below.  Under the 5-year rule, the Participant’sentire interest will be distributed to the Designated Beneficiary by

 

December 31 of the calendar year containing the fifthanniversary of the Participant’s death.

 

(iii)                    If there is no Designated Beneficiary as of September 30 of the yearfollowing the year of the Participant’s death, the Participant’s entireinterest will be distributed by December 31 of the calendar yearcontaining the fifth anniversary of the Participant’s death.

 

(iv)                   If the Participant’s surviving spouse is the Participant’s sole DesignatedBeneficiary and the surviving spouse dies after the Participant but beforedistributions to the surviving spouse are required to begin, this (b)(2), otherthan (b)(2)(i), will apply as if the surviving spouse were the Participant.

 

For purposes of this (b)(2) and (d) below, unless (b)(2)(iv) aboveapplies, distributions are considered to begin on the Participant’s RequiredBeginning Date.  If (b)(2)(iv) aboveapplies, distributions are considered to begin on the date distributions arerequired to begin to the surviving spouse under (b)(2)(i) above.  If distributions under an annuity purchasedfrom an insurance company irrevocably commence to the Participant before theParticipant’s Required Beginning Date (or to the Participant’s surviving spousebefore the date distributions are required to begin to the surviving spouseunder (b)(2)(i) above), the date distributions are considered to begin isthe date distributions actually commence.

 

(3)                        Forms of Distribution.  Unless the Participant’s interest isdistributed in the form of an annuity purchased from an insurance company or ina single sum on or before the Required Beginning Date, as of the firstDistribution Calendar Year distributions will be made in accordance with (c) and(d) below.  If the Participant’sinterest is distributed in the form of an annuity purchased from an insurancecompany, distributions thereunder will be made in accordance with therequirements of Code Section 401(a)(9) and the regulationsthereunder.

 

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

 

(1)                        Amount of Required Minimum Distribution For Each Distribution CalendarYear. During the Participant’s lifetime, the minimum amount that will bedistributed for each Distribution Calendar Year is the lesser of:

 

(i)                          the quotient obtained by dividing the Participant’s Account Balance by thedistribution period in the Uniform Lifetime Table set forth in Q&A-2 insection 1.401(a)(9)-9 of the regulations, using the Participant’s age as of theParticipant’s birthday in the Distribution Calendar Year; or

 

(ii)                       if the Participant’s sole Designated Beneficiary for the DistributionCalendar Year is the Participant’s spouse, the quotient obtained by dividingthe Participant’s Account Balance by the number in the Joint and Last SurvivorTable set forth in Q&A-3 in section 

 

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1.401(a)(9)-9 of the regulations, using the Participant’s andspouse’s attained ages as of the Participant’s and spouse’s birthdays in theDistribution Calendar Year.

 

(2)                        Lifetime Required Minimum Distributions Continue Through Year ofParticipant’s Death.  Required minimum distributions will bedetermined under this (c) beginning with the first Distribution CalendarYear and continuing up to, and including, the Distribution Calendar Year thatincludes the Participant’s date of death.

 

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

 

(1)                        Death On or After Date Distributions Begin.

 

(i)                          Participant Survived by Designated Beneficiary.  If the Participant dies on orafter the date distributions begin and there is a Designated Beneficiary, theminimum amount that willbe distributed for each Distribution Calendar Year after the year of theParticipant’s death is the quotient obtained by dividing the Participant’sAccount Balance by the longer of the remaining Life Expectancy of theParticipant or the remaining Life Expectancy of the Participant’s DesignatedBeneficiary, determined as follows:

 

A.                          The Participant’s remaining Life Expectancy is calculated using the age ofthe Participant in the year of death, reduced by one for each subsequent year.

 

B.                            If the Participant’s surviving spouse is the Participant’s sole DesignatedBeneficiary, the remaining Life Expectancy of the surviving spouse iscalculated for each Distribution Calendar Year after the year of theParticipant’s death using the surviving spouse’s age as of the spouse’sbirthday in that year.  For DistributionCalendar Years after the year of the surviving spouse’s death, the remainingLife Expectancy of the surviving spouse is calculated using the age of thesurviving spouse as of the spouse’s birthday in the calendar year of the spouse’sdeath, reduced by one for each subsequent calendar year.

 

C.                            If the Participant’s surviving spouse is not the Participant’s soleDesignated Beneficiary, the Designated Beneficiary’s remaining Life Expectancyis calculated using the age of the Beneficiary in the year following the yearof the Participant’s death, reduced by one for each subsequent year.

 

(ii)                       No Designated Beneficiary.  If the Participant dies on or after the datedistributions begin and there is no Designated Beneficiary as of September 30of the year after the year of the Participant’s death, the minimum amount thatwill be distributed for each Distribution Calendar Year after the year of theParticipant’s death is the quotient obtained by dividing the Participant’sAccount Balance by the Participant’s remaining Life Expectancy calculated usingthe age of the Participant in the year of death, reduced by one for eachsubsequent year.

 

(2)                        Death Before Date Distributions Begin.

 

(i)                          Participant Survived by Designated Beneficiary.  If the Participant dies beforethe date distributions begin and there is a Designated Beneficiary, the minimumamount that will be distributed for each Distribution Calendar Year after theyear of the Participant’s death is the quotient obtained by dividing theParticipant’s Account Balance by the remaining Life Expectancy of theParticipant’s Designated Beneficiary, determined as provided in (d)(1) 

 

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above, except to the extent that an election is made toreceive distributions in accordance with the 5-year rule under (e) below.  Under the 5-year rule, the Participant’sentire interest will be distributed to the Designated Beneficiary by December 31of the calendar year containing the fifth anniversary of the Participant’sdeath.

 

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

 

(iii)                    Death of Surviving Spouse Before Distributions to Surviving Spouse AreRequired to Begin.  If the Participant dies before the datedistributions begin, the Participant’s surviving spouse is the Participant’ssole Designated Beneficiary, and the surviving spouse dies before distributionsare required to begin to the surviving spouse under (b)(2)(i) above, this(d)(2) will apply as if the surviving spouse were the Participant.

 

(e)                        Election of 5-year Rule.  Participants or Beneficiaries may elect on anindividual basis whether the 5-year rule in (b)(2) and (d)(2) aboveapplies to distributions after the death of a Participant who has a DesignatedBeneficiary.  The election must be madeno later than the earlier of September 30 of the calendar year in which thedistribution would be required to begin under (b)(2) above if no suchelection is made, or by September 30 of the calendar year which containsthe fifth anniversary of the Participant’s (or, if applicable, surviving spouse’s)death.

 

**SECTION 7.04—TRANSITIONRULES.**

 

To the extent thePlan was effective before 2003, required minimum distributions were madepursuant to (a) and (b) below:

 

(a)                        2000and Before.  Required minimumdistributions for calendar years after 1984 and before 2001 were made inaccordance with Code Section 401(a)(9) and the proposed regulationsthereunder published in the Federal Register on July 27, 1987 (the 1987Proposed Regulations).

 

(b)                       2001and 2002.  Required minimumdistributions for calendar years 2001 and 2002 were made pursuant to theproposed regulations under Code Section 401(a)(9) published in theFederal Register on January 17, 2001 (the 2001 Proposed Regulations).  Distributions were made in 2001 under the1987 Proposed Regulations prior to June 14, 2001, and the special transitionrule in Announcement 2001-82, 2001-2 C.B. 123, applied.

 

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**ARTICLE VIII**

 

**TERMINATION OF THE PLAN**

 

The Employer expects to continue the Plan indefinitely butreserves the right to terminate the Plan in whole or in part at any time upongiving written notice to all parties concerned. Complete discontinuance of Contributions constitutes completetermination of the Plan.

 

The Account ofeach Participant shall be 100% vested and nonforfeitable as of the effectivedate of complete termination of the Plan. The Account of each Participant who is included in the group ofParticipants deemed to be affected by the partial termination of the Plan shallbe 100% vested and nonforfeitable as of the effective date of the partialtermination of the Plan.  The Participant’sVested Account shall continue to participate in the earnings credited, expensescharged, and any appreciation or depreciation of the Investment Fund until hisVested Account is distributed.

 

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

 

Elective DeferralContributions

 

QualifiedNonelective Contributions

 

A Participant’sVested Account resulting from such Contributions may be distributed uponcomplete termination of the Plan, but only if neither the Employer nor anyControlled Group member maintain another defined contribution plan (other thanan employee stock ownership plan as defined in Code Section 4975(e)(7) or409(a), a simplified employee pension plan as defined in Code Section 408(k),a SIMPLE IRA plan as defined in Code Section 408(p), a plan or contractthat satisfies the requirements of Code Section 403(b), or a plandescribed in Code Section 457(b) or (f)) at any time during theperiod beginning on the date of complete termination of the Plan and ending 12months after all assets have been distributed from the Plan.  Such distribution is made in a lump sum.  A distribution under this article shall be aretirement benefit and shall be distributed to the Participant according to theprovisions of Article VI.  However,the fixed period and fixed payment installment options shall not be available.

 

Ifa Participant or Beneficiary is receiving payments under the fixed period orfixed payment installment option, the Vested Account shall be paid to suchperson in a single sum.

 

The Participant’sentire Vested Account shall be paid in a single sum to the Participant as ofthe effective date of complete termination of the Plan if (i) therequirements for distribution of Elective Deferral Contributions in the aboveparagraph are met and (ii) consent of the Participant is not required inthe ELECTION PROCEDURES SECTION of Article VI to distribute a benefitthat is immediately distributable.  Thisis a small amounts payment.  The smallamounts payment is in full settlement of all benefits otherwise payable.

 

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

 

The assets of this Plan shall not be paid to the Employerat any time, except that, after the satisfaction of all liabilities under thePlan, any assets remaining may be paid to the Employer.  The payment may not be made if it wouldcontravene any provision of law.

 

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##### **ARTICLE IX**

#####  

**ADMINISTRATIONOF THE PLAN**

 

**SECTION 9.01—ADMINISTRATION.**

 

Subject to theprovisions of this article, the Plan Administrator has complete control of theadministration of the Plan.  The PlanAdministrator has all the powers necessary for it to properly carry out itsadministrative duties.  Not inlimitation, but in amplification of the foregoing, the Plan Administrator hascomplete discretion to construe or interpret the provisions of the Plan,including ambiguous provisions, if any, and to determine all questions that mayarise under the Plan, including all questions relating to the eligibility ofEmployees to participate in the Plan and the amount of benefit to which anyParticipant or Beneficiary may become entitled. The Plan Administrator’s decisions upon all matters within the scope ofits authority shall be final.

 

Unless otherwiseset out in the Plan or Annuity Contract, the Plan Administrator may delegaterecordkeeping and other duties which are necessary to assist it with theadministration of the Plan to any person or firm which agrees to accept suchduties.  The Plan Administrator shall beentitled to rely upon all tables, valuations, certificates and reportsfurnished by the consultant or actuary appointed by the Plan Administrator andupon all opinions given by any counsel selected or approved by the PlanAdministrator.

 

The PlanAdministrator shall receive all claims for benefits by Participants, formerParticipants and Beneficiaries.  The PlanAdministrator shall determine all facts necessary to establish the right of anyClaimant to benefits and the amount of those benefits under the provisions ofthe Plan.  The Plan Administrator mayestablish rules and procedures to be followed by Claimants in filingclaims for benefits, in furnishing and verifying proofs necessary to determineage, and in any other matters required to administer the Plan.

 

**SECTION 9.02—EXPENSES.**

 

Expenses of thePlan, to the extent that the Employer does not pay such expenses, may be paidout of the assets of the Plan provided that such payment is consistent withERISA.  Such expenses include, but arenot limited to, expenses for bonding required by ERISA; expenses forrecordkeeping and other administrative services; fees and expenses of theTrustee or Annuity Contract; expenses for investment education service; anddirect costs that the Employer incurs with respect to the Plan.  Expenses that relate solely to a specificParticipant or Alternate Payee may be assessed against such Participant orAlternate Payee as provided in the service and expense agreement or such otherdocuments duly entered into by or with regard to the Plan that govern suchmatters.

 

**SECTION 9.03—RECORDS.**

 

All acts anddeterminations of the Plan Administrator shall be duly recorded.  All these records, together with otherdocuments necessary for the administration of the Plan, shall be preserved inthe Plan Administrator’s custody.

 

Writing(handwriting, typing, printing), photostating, photographing, microfilming,magnetic impulse, mechanical or electrical recording, or other forms of datacompilation shall be acceptable means of keeping records.

 

**SECTION 9.04—INFORMATIONAVAILABLE.**

 

Any Participant inthe Plan or any Beneficiary may examine copies of the Plan description, latestannual report, any bargaining agreement, this Plan, the Annuity Contract, orany other instrument under which the Plan was established or is operated.  The Plan Administrator shall maintain all ofthe items listed in this section in its office, or in such other place orplaces as it may designate in order to comply with governmental regulations.  These items may be examined during reasonablebusiness hours.  Upon the written requestof a Participant or Beneficiary receiving 

 

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benefits under thePlan, the Plan Administrator shall furnish him with a copy of any of theseitems.  The Plan Administrator may make areasonable charge to the requesting person for the copy.

 

**SECTION 9.05—CLAIMPROCEDURES.**

 

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

 

If a claim forbenefits under the Plan is wholly or partially denied, the Plan Administratorshall provide adequate written notice to the Claimant whose claim for benefitsunder the Plan has been denied.  Thenotice must be furnished within 90 days of the date that the claim is receivedby the Plan without regard to whether all of the information necessary to makea benefit determination is received.  TheClaimant shall be notified in writing within this initial 90-day period ifspecial circumstances require an extension of the time needed to process theclaim.  The notice shall indicate thespecial circumstances requiring an extension of time and the date by which thePlan Administrator’s decision is expected to be rendered.  In no event shall such extension exceed aperiod of 90 days from the end of the initial 90-day period.

 

The PlanAdministrator’s notice to the Claimant shall: (i) specify the reason orreasons for the denial; (ii) reference the specific Plan provisions onwhich the denial is based; (iii) describe any additional material andinformation needed for the Claimant to perfect his claim for benefits; (iv) explainwhy the material and information is needed; and (v) inform the Claimant ofthe Plan’s appeal procedures and the time limits applicable to such procedures,including a statement of the Claimant’s right to bring a civil action underERISA section 502(a) following an adverse benefit determination on appeal.

 

Any appeal made bya Claimant must be made in writing to the Plan Administrator within 60 daysafter receipt of the Plan Administrator’s notice of denial of benefits.  If the Claimant appeals to the PlanAdministrator, the Claimant may submit written comments, documents, records,and other information relating to the claim for benefits.  The Claimant shall be provided, upon requestand free of charge, reasonable access to, and copies of, all documents,records, and other information relevant to the Claimant’s claim forbenefits.  The Plan Administrator shallreview the claim taking into account all comments, documents, records, andother information submitted by the Claimant relating to the claim, withoutregard to whether such information was submitted or considered in the initialbenefit determination.

 

The PlanAdministrator shall provide adequate written notice to the Claimant of the Plan’sbenefit determination on review.  Thenotice must be furnished within 60 days of the date that the request for reviewis received by the Plan without regard to whether all of the informationnecessary to make a benefit determination on review is received.  The Claimant shall be notified in writingwithin this initial 60-day period if special circumstances require an extensionof the time needed to process the claim. The notice shall indicate the special circumstances requiring anextension of time and the date by which the Plan Administrator expects torender the determination on review.  Inno event shall such extension exceed a period of 60 days from the end of theinitial 60-day period.

 

In the event thebenefit determination is being made by a committee or board of trustees thathold regularly scheduled meetings at least quarterly, the above paragraph shallnot apply.  The benefit determinationmust be made by the date of the meeting of the committee or board thatimmediately follows the Plan’s receipt of a request for review, unless therequest for review is filed within 30 days preceding the date of suchmeeting.  In such case, the benefitdetermination must be made by the date of the second meeting following the Plan’sreceipt of the request for review.  Thedate of the receipt of the request for review shall be determined withoutregard to whether all of the information necessary to make a benefitdetermination on review is received.  TheClaimant shall be notified in writing within this initial period if specialcircumstances require an extension of the time needed to process theclaim.  The notice shall indicate thespecial circumstances requiring an extension of time and the date by which thecommittee or board expects to render the determination on review.  In no event shall such benefit determinationbe made later than 

 

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the third meetingof the committee or board following the Plan’s receipt of the request forreview.  The Plan Administrator shallprovide adequate written notice to the Claimant of the Plan’s benefitdetermination on review as soon as possible, but not later than five days afterthe benefit determination is made.

 

If the claim forbenefits is wholly or partially denied on review, the Plan Administrator’snotice to the Claimant shall: (i) specify the reason or reasons for thedenial; (ii) reference the specific Plan provisions on which the denial isbased; (iii) include a statement that the Claimant is entitled to receive,upon request and free of charge, reasonable access to, and copies of, alldocuments, records, and other information relevant to the Claimant’s claim forbenefits; and (iv) include a statement of the Claimant’s right to bring acivil action under ERISA section 502(a).

 

A Claimant mayauthorize a representative to act on the Claimant’s behalf with respect to abenefit claim or appeal of an adverse benefit determination.  Such authorization shall be made bycompletion of a form furnished for that purpose.  In the absence of any contrary direction fromthe Claimant, all information and notifications to which the Claimant isentitled shall be directed to the authorized representative.

 

The PlanAdministrator shall perform periodic examinations, reviews, or audits ofbenefit claims to determine whether claims determinations are made inaccordance with the governing Plan documents and, where appropriate, Planprovisions have been consistently applied with respect to similarly situatedClaimants.

 

**SECTION 9.06—DELEGATION OFAUTHORITY.**

 

All or any part of the administrative duties andresponsibilities under this article may be delegated by the Plan Administratorto a retirement committee.  The dutiesand responsibilities of the retirement committee shall be set out in a separatewritten agreement.

 

**SECTION 9.07—EXERCISE OFDISCRETIONARY AUTHORITY.**

 

The Employer, Plan Administrator, and any other person orentity who has authority with respect to the management, administration, orinvestment of the Plan may exercise that authority in its/his full discretion,subject only to the duties imposed under ERISA. This discretionary authority includes, but is not limited to, theauthority to make any and all factual determinations and interpret all termsand provisions of the Plan documents relevant to the issue underconsideration.  The exercise of authoritywill be binding upon all persons; will be given deference in all courts of lawto the greatest extent allowed under law; and will not be overturned or set asideby any court of law unless found to be arbitrary and capricious or made in badfaith.

 

**SECTION 9.08—TRANSACTIONPROCESSING.**

 

Transactions (including, but not limitedto, investment directions, trades, loans, and distributions) shall be processedas soon as administratively practicable after proper directions are receivedfrom the Participant or other parties. No guarantee is made by the Plan, Plan Administrator, Trustee, Insurer,or Employer that such transactions will be processed on a daily or other basis,and no guarantee is made in any respect regarding the processing time of suchtransactions.

 

Notwithstandingany other provision of the Plan, the Employer, the Plan Administrator, or theTrustee reserves the right to not value an investment option on any givenValuation Date for any reason deemed appropriate by the Employer, the PlanAdministrator, or the Trustee.

 

Administrative practicality will bedetermined by legitimate business factors (including, but not limited to,failure of systems or computer programs, failure of the means of thetransmission of data, force majeure, the failure of a service provider totimely receive values or prices, and correction for errors or omissions or theerrors or omissions of 

 

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any service provider) and in no event willbe deemed to be less than 14 days.  Theprocessing date of a transaction shall be binding for all purposes of the Planand considered the applicable Valuation Date for any transaction.

 

**SECTION 9.09—VOTING ANDTENDER OF QUALIFYING EMPLOYER SECURITIES.**

 

Voting rights withrespect to Qualifying Employer Securities will be passed through toParticipants.  Participants will beallowed to direct the voting rights of Qualifying Employer Securities for any matterput to the vote of shareholders.  Beforeeach meeting of shareholders, the Governing Board shall cause to be sent toeach person with power to control such voting rights a copy of any notice andany other information provided to shareholders and, if applicable, a form forinstructing the Trustee how to vote at such meeting (or any adjournmentthereof) the number of full and fractional shares subject to such person’svoting control.  The Trustee mayestablish a deadline in advance of the meeting by which such forms must bereceived in order to be effective.

 

Each Participantshall be entitled to one vote for each share credited to his Account.

 

If some or all ofthe Participants have not directed or have not timely directed the Trustee onhow to vote, then the Trustee shall vote such Qualifying Employer Securities inthe same proportion as those shares of Qualifying Employer Securities for whichthe Trustee has received proper direction for such matter.

 

Tender rights or exchange offers for Qualifying EmployerSecurities will be passed through to Participants.  As soon as practicable after the commencementof a tender or exchange offer for Qualifying Employer Securities, the GoverningBoard shall cause each person with power to control the response to such tenderor exchange offer to be advised in writing the terms of the offer and, ifapplicable, to be provided with a form for instructing the Trustee, or forrevoking such instruction, to tender or exchange shares of Qualifying EmployerSecurities, to the extent permitted under the terms of such offer.  In advising such persons of the terms of theoffer, the Governing Board may include statements from the board of directorssetting forth its position with respect to the offer.

 

If some or all ofthe Participants have not directed or have not timely directed the Trustee onhow to tender, then the Trustee shall tender such Qualifying EmployerSecurities in the same proportion as those shares of Qualifying EmployerSecurities for which the Trustee has received proper direction for such matter.

 

If the tender orexchange offer is limited so that all of the shares that the Trustee has beendirected to tender or exchange cannot be sold or exchanged, the shares thateach Participant directed to be tendered or exchanged shall be deemed to havebeen sold or exchanged in the same ratio that the number of shares actuallysold or exchanged bears to the total number of shares that the Trustee wasdirected to tender or exchange.

 

The Trustee shall hold the Participant’s individualdirections with respect to voting rights or tender decisions in confidence and,except as required by law, shall not divulge or release such individualdirections to anyone associated with the Employer.  The Employer may require verification of theTrustee’s compliance with the directions received from Participants by anyindependent auditor selected by the Employer, provided that such auditor agreesto maintain the confidentiality of such individual directions.

 

The GoverningBoard may develop procedures to facilitate the exercise of votes or tenderrights, such as the use of facsimile transmissions for the Participants locatedin physically remote areas.

 

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**ARTICLE X**

 

**GENERALPROVISIONS**

 

**SECTION 10.01—AMENDMENTS.**

 

The Employer mayamend this Plan at any time, including any remedial retroactive changes (withinthe time specified by Internal Revenue Service regulations), to comply with anylaw or regulation issued by any governmental agency to which the Plan issubject.  The Governing Board shall alsohave the authority to amend this Plan at any time as long as such amendmentdoes not materially increase the cost of the Plan to the Employer.

 

An amendment may notallow reversion or diversion of Plan assets to the Employer at any time, exceptas may be required to comply with any law or regulation issued by anygovernmental agency to which the Plan is subject.

 

An amendment maynot eliminate or reduce a section 411(d)(6) protected benefit, as definedin Q&A-1 in section 1.411(d)-4 of the regulations, that has alreadyaccrued, except as provided in 1.411(d)-3 or 1.411(d)-4 of theregulations.  This is generally the caseeven if such elimination or reduction is contingent upon the Employee’sconsent.  However, the Plan may beamended to eliminate or reduce section 411(d)(6) protected benefits withrespect to benefits not yet accrued as of the later of the amendment’s adoptiondate or the effective date without violating Code Section 411(d)(6).  Notwithstanding the preceding provisions, aParticipant’s Account may be reduced to the extent permitted under Code Section 412(c)(8).

 

If, as a result ofan amendment, an Employer Contribution is removed that is not 100% immediatelyvested when made, the applicable vesting schedule shall remain in effect afterthe date of such amendment.  TheParticipant shall not become immediately 100% vested in such Contributions as aresult of the elimination of such Contribution except as otherwise specificallyprovided in the Plan.

 

An amendment shallnot decrease a Participant’s vested interest in the Plan.  If an amendment to the Plan, or a deemedamendment in the case of a change in top-heavy status of the Plan as providedin the MODIFICATION OF VESTING REQUIREMENTS SECTION of Article XI,changes the computation of the percentage used to determine that portion of aParticipant’s Account attributable to Employer Contributions which isnonforfeitable (whether directly or indirectly), in the case of an Employee whois a Participant as of the later of the date such amendment or change isadopted or the date it becomes effective, the nonforfeitable percentage(determined as of such date) of such Employee’s right to his Accountattributable to Employer Contributions shall not be less than his percentagecomputed under the Plan without regard to such amendment or change.  Furthermore, each Participant or formerParticipant

 

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

 

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

 

may elect, duringthe election period, to have the nonforfeitable percentage of his Account thatresults from Employer Contributions determined without regard to theamendment.  This election may not berevoked.  If after the Plan is changed,the Participant’s nonforfeitable percentage will at all times be as great as itwould have been if the change had not been made, no election needs to beprovided.  The election period shallbegin no later than the date the Plan amendment is adopted, or deemed adoptedin the case of a change in the top-heavy status of the Plan, and end no earlierthan the 60th day after the latest of the date the amendment is adopted (deemedadopted) or 

 

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becomes effective,or the date the Participant is issued written notice of the amendment (deemedamendment) by the Employer or the Plan Administrator.

 

For an amendmentadopted after August 9, 2006, with respect to a Participant’s Accountattributable to Employer Contributions accrued as of the later of the adoptionor effective date of the amendment and earnings, the vested percentage of theParticipant will be the greater of the vested percentage under the old vestingschedule or the vested percentage under the new vesting schedule.

 

**SECTION 10.02—DIRECTROLLOVERS.**

 

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

 

In the event of amandatory distribution of an Eligible Rollover Distribution greater than $1,000in accordance with the SMALL AMOUNTS SECTION of this article (or which isa small amounts payment under Article VIII at complete termination of thePlan), if the Participant does not elect to have such distribution paiddirectly to an Eligible Retirement Plan specified by the Participant in aDirect Rollover or to receive the distribution directly, the Plan Administratorwill pay the distribution in a Direct Rollover to an individual retirement plandesignated by the Plan Administrator.

 

In the event ofany other Eligible Rollover Distribution to a Distributee in accordance withthe SMALL AMOUNTS SECTION of this article (or which is a small amountspayment under Article VIII at complete termination of the Plan), if theDistributee does not elect to have such distribution paid directly to anEligible Retirement Plan specified by the Distributee in a Direct Rollover orto receive the distribution directly, the Plan Administrator will pay thedistribution to the Distributee.

 

A mandatorydistribution is a distribution to a Participant that is made without theParticipant’s consent and is made to the Participant before he attains theolder of age 62 or his Normal Retirement Age.

 

**SECTION 10.03—MERGERS ANDDIRECT TRANSFERS.**

 

The Plan may notbe merged or consolidated with, nor have its assets or liabilities transferredto, any other retirement plan, unless each Participant in this Plan would (ifthat plan then terminated) receive a benefit immediately after the merger,consolidation, or transfer that is equal to or greater than the benefit theParticipant would have been entitled to receive immediately before the merger,consolidation, or transfer (if this Plan had then terminated).  The Employer may enter into merger agreementsor direct transfer of assets agreements with the employers under otherretirement plans which are qualifiable under Code Section 401(a),including an elective transfer, and may accept the direct transfer of planassets, or may transfer plan assets, as a party to any such agreement.  The Employer shall not consent to, or be aparty to a merger, consolidation, or transfer of assets with a plan which issubject to the survivor annuity requirements of Code Section 401(a)(11) ifsuch action would result in a survivor annuity feature being maintained underthis Plan.  The Employer will nottransfer any amounts attributable to elective deferral contributions, qualifiedmatching contributions, and qualified nonelective contributions unless thetransferee plan provides that the limitations of section 1.401(k)-1(d) of theregulations shall apply to such amounts (including post-transfer earningsthereon), unless the amounts could have been distributed at the time of thetransfer (other than for hardship), and the transfer is an elective transferdescribed in Q&A-3(b)(1) in section 1.411(d)-4 of the regulations.

 

Notwithstanding any provision of the Plan to the contrary,to the extent any optional form of benefit under the Plan permits adistribution prior to the Employee’s retirement, death, disability, orSeverance from Employment, and prior to plan termination, the optional form ofbenefit is not available with respect to benefits attributable to assets 

 

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(including the post-transfer earnings thereon) andliabilities that are transferred, within the meaning of Code Section 414(l),to this Plan from a money purchase pension plan qualified under Code Section 401(a) (otherthan any portion of those assets and liabilities attributable to voluntaryemployee contributions).  The limitationsof section 1.401(k)-1(d) of the regulations applicable to electivedeferral contributions, qualified matching contributions, and qualifiednonelective contributions shall continue to apply to any amounts attributableto such contributions (including post-transfer earnings thereon) transferred tothis Plan, unless the amounts could have been distributed at the time of thetransfer (other than for hardship), and the transfer is an elective transferdescribed in Q&A-3(b)(1) in section 1.411(d)-4 of the regulations.

 

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

 

The Plan shall hold, administer, and distribute thetransferred assets as a part of the Plan. The Plan shall maintain a separate account for the benefit of theEmployee on whose behalf the Plan accepted the transfer in order to reflect thevalue of the transferred assets.

 

A Participant’ssection 411(d)(6) protected benefits, as defined in Q&A-1 in section1.411(d)-4 of the regulations, may not be eliminated by reason of transfer orany transaction amending a plan or plans to transfer benefits except asprovided below.

 

A Participant’ssection 411(d)(6) protected benefits may be eliminated or reduced upontransfer between qualified defined contribution plans if the conditions inQ&A-3(b)(1) in section 1.411(d)-4 of the regulations are met.  The transfer must meet all of the otherapplicable qualification requirements.

 

A Participant’ssection 411(d)(6) protected benefits may be eliminated or reduced if atransfer is an elective transfer of certain distributable benefits betweenqualified plans (both defined benefit and defined contribution) and theconditions in Q&A-3(c)(1) in section 1.411(d)-4 of the regulations aremet.  The rules applicable todistributions under the plan would apply to the transfer, but the transferwould not be treated as a distribution for purposes of the minimum distributionrequirements of Code Section 401(a)(9). Beginning January 1, 2002, if the Participant is eligible toreceive an immediate distribution of his entire nonforfeitable accrued benefitin a single sum distribution that would consist entirely of an eligiblerollover distribution under Code Section 401(a)(31), such transfer will beaccomplished as a direct rollover under Code Section 401(a)(31).

 

**SECTION 10.04—PROVISIONSRELATING TO THE INSURER AND OTHER PARTIES.**

 

The obligations ofan Insurer shall be governed solely by the provisions of the AnnuityContract.  The Insurer shall not berequired to perform any act not provided in or contrary to the provisions ofthe Annuity Contract.  Each AnnuityContract when purchased shall comply with the Plan.  See the CONSTRUCTION SECTION of thisarticle.

 

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

 

Such Insurer,issuer or distributor is not a party to the Plan, nor bound in any way by thePlan provisions.  Such parties shall notbe required to look to the terms of this Plan, nor to determine whether theEmployer, the Plan Administrator, the Trustee, or the Named Fiduciary have theauthority to act in any particular manner or to make any contract or agreement.

 

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

 

**SECTION 10.05—EMPLOYMENT STATUS.**

 

Nothing containedin this Plan gives an Employee the right to be retained in the Employer’semploy or to interfere with the Employer’s right to discharge any Employee.

 

**SECTION 10.06—RIGHTS TOPLAN ASSETS.**

 

An Employee shallnot have any right to or interest in any assets of the Plan upon termination ofemployment or otherwise except as specifically provided under this Plan, andthen only to the extent of the benefits payable to such Employee according tothe Plan provisions.

 

Any final paymentor distribution to a Participant or his legal representative or to anyBeneficiaries of such Participant under the Plan provisions shall be in fullsatisfaction of all claims against the Plan, the Named Fiduciary, the PlanAdministrator, the Insurer, the Trustee, and the Employer arising under or byvirtue of the Plan.

 

**SECTION 10.07—BENEFICIARY.**

 

Each Participantmay name a Beneficiary to receive any death benefit that may arise out of hisparticipation in the Plan.  TheParticipant may change his Beneficiary from time to time.  Unless a qualified election has been made,for purposes of distributing any death benefits before the Participant’sRetirement Date, the Beneficiary of a Participant who has a spouse shall be theParticipant’s spouse.  The Participant’sBeneficiary designation and any change of Beneficiary shall be subject to theprovisions of the ELECTION PROCEDURES SECTION of Article VI.

 

It is the responsibility of the Participant to give writtennotice to the Plan Administrator of the name of the Beneficiary on a formfurnished for that purpose.  The PlanAdministrator shall maintain records of Beneficiary designations forParticipants before their Retirement Dates. However, the Plan Administrator may delegate to another party theresponsibility of maintaining records of Beneficiary designations.  In that event, the written designations madeby Participants shall be filed with such other party.  If a party other than the Insurer maintainsthe records of Beneficiary designations and a Participant dies before hisRetirement Date, such other party shall certify to the Insurer the Beneficiarydesignation on its records for the Participant.

 

If there is no Beneficiary named or surviving when aParticipant dies, the Participant’s Beneficiary shall be the Participant’ssurviving spouse, or where there is no surviving spouse, the executor oradministrator of the Participant’s estate.

 

Except to the extent otherwise provided in a qualifieddomestic relations order (as defined in Code Section 414(p)):

 

(i)                                   Any actual designation of a spouse as a Participant’s Beneficiary on aform accepted by the Plan Administrator hereunder shall continue to be validand will not be revoked notwithstanding a later divorce of the spouse from theParticipant, until and unless the Participant changes his designatedBeneficiary in accordance with the procedures established by the PlanAdministrator.

 

(ii)                                If the Participant’s spouse is deemed to be the Participant’s Beneficiaryat any time on account of an absence of any other valid Beneficiary designationand the Participant and spouse divorce, the Participant’s former spouse shallnot be treated as a Beneficiary hereunder until and unless the 

 

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Participant specifically designates such person as hisBeneficiary in accordance with the procedures established by the PlanAdministrator.

 

(iii)                             If a Participant remarries after a divorce, the new spouse willautomatically be treated as the sole designated Beneficiary hereunder until andunless a waiver and designation of an alternate Beneficiary are thereafterdelivered in accordance with the procedures established by the PlanAdministrator.

 

**SECTION 10.08—NONALIENATIONOF BENEFITS.**

 

Benefits payable under the Plan are not subject to the claimsof any creditor of any Participant or Beneficiary.  A Participant or Beneficiary does not haveany rights to alienate, anticipate, commute, pledge, encumber, or assign suchbenefits.  The preceding sentences shallalso apply to the creation, assignment, or recognition of a right to anybenefit payable with respect to a Participant according to a domestic relationsorder, unless such order is determined by the Plan Administrator to be aqualified domestic relations order, as defined in Code Section 414(p), orany domestic relations order entered before January 1, 1985.  The preceding sentences shall not apply toany offset of a Participant’s benefits provided under the Plan against anamount the Participant is required to pay the Plan with respect to a judgment,order, or decree issued, or a settlement entered into, on or after August 5,1997, which meets the requirements of Code Sections 401(a)(13)(C) or (D).

 

**SECTION 10.09—CONSTRUCTION.**

 

The validity ofthe Plan or any of its provisions is determined under and construed accordingto Federal law and, to the extent permissible, according to the laws of thestate in which the Employer has its principal office.  In case any provision of this Plan is heldillegal or invalid for any reason, such determination shall not affect theremaining provisions of this Plan, and the Plan shall be construed and enforcedas if the illegal or invalid provision had never been included.

 

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

 

**SECTION 10.10—LEGALACTIONS.**

 

No person employedby the Employer; no Participant, former Participant, or their Beneficiaries;nor any other person having or claiming to have an interest in the Plan isentitled to any notice of process.  Afinal judgment entered in any such action or proceeding shall be binding andconclusive on all persons having or claiming to have an interest in the Plan.

 

**SECTION 10.11—SMALLAMOUNTS.**

 

If consent of theParticipant is not required for a benefit that is immediately distributable inthe ELECTION PROCEDURES SECTION of Article VI, a Participant’s entireVested Account shall be paid in a single sum as of the earliest of hisRetirement Date, the date he dies, or the date he has a Severance fromEmployment for any other reason (the date the Employer provides notice to therecord keeper of the Plan of such event, if later).  For purposes of this section, if theParticipant’s Vested Account is zero, the Participant shall be deemed to havereceived a distribution of such Vested Account. If a Participant would have received a distribution under the firstsentence of this paragraph but for the fact that the Participant’s consent wasneeded to distribute a benefit which is immediately distributable, and if at alater time consent would not be needed to distribute a benefit that isimmediately distributable and such Participant has not again become anEmployee, such Vested Account shall be paid in a single sum.  This is a small amounts payment.

 

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If a small amountspayment is made as of the date the Participant dies, the small amounts paymentshall be made to the Participant’s Beneficiary. If a small amounts payment is made while the Participant is living, thesmall amounts payment shall be made to the Participant.  The small amounts payment is in fullsettlement of all benefits otherwise payable.

 

No other smallamounts payments shall be made.

 

**SECTION 10.12—WORD USAGE.**

 

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

 

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

 

**SECTION 10.13—CHANGE INSERVICE METHOD.**

 

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

 

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

 

(2)                        Oneyear of service for the computation period in which the change is effective ifhe is credited with the required number of Hours of Service.  For that portion of the computation periodending on the date of the change (for the first day of the computation periodif the change is made on the first day of the computation period), the Employeewill be credited with the greater of (i) his actual Hours of Service or (ii) thenumber of Hours of Service that is equivalent to the fractional part of a yearof elapsed time service credited as of the date of the change, if any.  In determining the equivalent Hours ofService, the Employee shall be credited with 190 Hours of Service for eachmonth and any fractional part of a month in such fractional part of ayear.  The number of months and anyfractional part of a month shall be determined by multiplying the fractionalpart of a year, expressed as a decimal, by 12. For the remaining portion of the computation period (the periodbeginning on the second day of the computation period and ending on the lastday of the computation period if the change is made on the first day of thecomputation period), the Employee will be credited with his actual Hours ofService.

 

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

 

If this Plan isamended to change the method of crediting service from the hours method to theelapsed time method for any purpose under this Plan, the Employee’s serviceshall be equal to the sum of (4), (5), and (6) below:

 

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

 

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

 

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

 

(b)                       TransfersBetween Plans with Different Service Methods.  If an Employee has been a participant inanother plan of the Employer that credited service under the elapsed timemethod for any purpose that under this Plan is determined using the hoursmethod, then the Employee’s service shall be equal to the sum of (1), (2), and (3) below:

 

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

 

(2)                        Oneyear of service for the applicable computation period in which he became anEligible Employee if he is credited with the required number of Hours ofService.  For that portion of suchcomputation period ending on the date he became an Eligible Employee (for thefirst day of such computation period if he became an Eligible Employee on thefirst day of such computation period), the Employee will be credited with thegreater of (i) his actual Hours of Service or (ii) the number ofHours of Service that is equivalent to the fractional part of a year of elapsedtime service credited as of the date he became an Eligible Employee, ifany.  In determining the equivalent Hoursof Service, the Employee shall be credited with 190 Hours of Service for eachmonth and any fractional part of a month in such fractional part of ayear.  The number of months and anyfractional part of a month shall be determined by multiplying the fractionalpart of a year, expressed as a decimal, by 12. For the remaining portion of such computation period (the periodbeginning on the second day of such computation period and ending on the lastday of such computation period if he became an Eligible Employee on the firstday of such computation period), the Employee will be credited with his actualHours of Service.

 

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

 

If an Employee hasbeen a participant in another plan of the Employer that credited service underthe hours method for any purpose that under this Plan is determined using theelapsed time method, then the Employee’s service shall be equal to the sum of(4), (5), and (6) below:

 

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

 

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

 

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

 

If an Employee hasbeen a participant in a Controlled Group member’s plan that credited serviceunder a different method than is used in this Plan, in order to determine entryand vesting, the provisions in (b) above shall apply as though theControlled Group member’s plan was a plan of the Employer.

 

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Any modificationof service contained in this Plan shall be applicable to the service determinedpursuant to this section.

 

**SECTION 10.14—MILITARYSERVICE.**

 

Notwithstandingany provision of this Plan to the contrary, the Plan shall providecontributions, benefits, and service credit with respect to qualified militaryservice in accordance with Code Section 414(u).

 

**SECTION 10.15—INDEMNIFICATION.**

 

To the extent notprohibited by state or federal law, the Employer agrees to, and shall indemnifyand hold harmless, as the case may be, each Employee, officer or director ofthe Employer, or of an affiliate, who has responsibilities with respect to theoperation or administration of the Plan, or the management or investment of anyof the assets of the Plan, from all claims for liability, loss, damage orexpense (including payment of reasonable expenses in connection with thedefense against such claim) which result from any exercise or failure toexercise any of the indemnified person’s responsibilities with respect to thePlan, other than by reason of gross negligence.

 

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**ARTICLE XI**

 

**TOP-HEAVYPLAN REQUIREMENTS**

 

**SECTION 11.01—APPLICATION.**

 

The provisions ofthis article shall supersede all other provisions in the Plan to the contrary.  The provisions of this article shall applyfor purposes of determining whether the Plan is a Top-heavy Plan for Plan Yearsbeginning after December 31, 2001, and whether the Plan satisfies theminimum benefit requirements of Code Section 416(c) for such years.

 

For the purpose ofapplying the Top-heavy Plan requirements of this article, all members of theControlled Group shall be treated as one Employer.  The term Employer, as used in this article,shall be deemed to include all members of the Controlled Group, unless the termas used clearly indicates only the Employer is meant.

 

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

 

The minimumvesting and contribution provisions of the MODIFICATION OF VESTING REQUIREMENTSand MODIFICATION OF CONTRIBUTIONS SECTIONS of this article shall not apply toany Employee who is included in a group of Employees covered by a collectivebargaining agreement which the Secretary of Labor finds to be a collectivebargaining agreement between employee representatives and one or moreemployers, including the Employer, if there is evidence that retirementbenefits were the subject of good faith bargaining between suchrepresentatives.  For this purpose, theterm “employee representatives” does not include any organization more thanhalf of whose members are employees who are owners, officers, or executives.

 

**SECTION 11.02—DEFINITIONS.**

 

For purposes ofthis article the following terms are defined:

 

**AggregationGroup** means:

 

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

 

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

 

(c)                        anyof the Employer’s other qualified plans not included in (a) or (b) abovewhich the Employer desires to include as part of the Aggregation Group.  Such a qualified plan shall be included onlyif the Aggregation Group would continue to satisfy the requirements of CodeSections 401(a)(4) and 410.

 

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

 

**Compensation**means compensation as defined in the CONTRIBUTION LIMITATION SECTION of Article III.

 

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**DeterminationDate** means as to any plan, for any plan year subsequent tothe first plan year, the last day of the preceding plan year.  For the first plan year of the plan, theDetermination Date is the last day of that year.

 

**KeyEmployee** means any Employee or former Employee (including anydeceased Employee) who at any time during the Plan Year that includes theDetermination Date is:

 

(a)                        anofficer of the Employer having Compensation for the Plan Year greater than$130,000 (as adjusted under Code Section 416(i)(1) for Plan Yearsbeginning after December 31, 2002),

 

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

 

(c)                        a1-percent owner of the Employer having Compensation for the Plan Year of morethan $150,000.

 

The determination of who is a KeyEmployee shall be made according to Code Section 416(i)(1) and theapplicable regulations and other guidance of general applicability issuedthereunder.

 

**NonkeyEmployee** means any Employee who is not a Key Employee.

 

**Top-heavyPlan** means a plan that is top-heavy for any plan year.  This Plan shall be top-heavy if any of thefollowing conditions exist:

 

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

 

(b)                       ThisPlan is a part of a required Aggregation Group, but not part of a permissiveAggregation Group, and the Top-heavy Ratio for the required Aggregation Group exceeds60 percent.

 

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

 

**Top-heavyRatio** means:

 

(a)                        Ifthe Employer maintains one or more defined contribution plans (including anysimplified employee pension plan) and the Employer has not maintained anydefined benefit plan which during the five-year period ending on theDetermination Date(s) has or has had accrued benefits, the Top-heavy Ratiofor this Plan alone or for the required or permissive Aggregation Group, asappropriate, is a fraction, the numerator of which is the sum of the accountbalances of all Key Employees as of the Determination Date(s) (includingany part of any account balance distributed in the one-year period ending onthe Determination Date(s) and distributions under a terminated plan whichif it had not been terminated would have been required to be included in theAggregation Group), and the denominator of which is the sum of all accountbalances (including any part of any account balance distributed in the one-yearperiod ending on the Determination Date(s) and distributions under aterminated plan which if it had not been terminated would have been required tobe included in the Aggregation Group), both computed in accordance with Code Section 416and the regulations thereunder.  In thecase of a distribution made for a reason other than Severance from Employment,death, or disability, this provision shall be applied by substituting “five-yearperiod” for “one-year period.”  Both thenumerator and denominator of the Top-heavy Ratio are increased to reflect anycontribution not actually made as of the Determination Date, but which isrequired to be taken into account on that date under Code Section 416 andthe regulations thereunder.

 

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(b)                       Ifthe Employer maintains one or more defined contribution plans (including anysimplified employee pension plan) and the Employer maintains or has maintainedone or more defined benefit plans which during the five-year period ending onthe Determination Date(s) has or has had accrued benefits, the Top-heavyRatio for any required or permissive Aggregation Group, as appropriate, is afraction, the numerator of which is the sum of the account balances under theaggregated defined contribution plan or plans of all Key Employees determinedin accordance with (a) above, and the present value of accrued benefitsunder the aggregated defined benefit plan or plans for all Key Employees as ofthe Determination Date(s), and the denominator of which is the sum of theaccount balances under the aggregated defined contribution plan or plans forall participants, determined in accordance with (a) above, and the presentvalue of accrued benefits under the defined benefit plan or plans for allparticipants as of the Determination Date(s), all determined in accordance withCode Section 416 and the regulations thereunder.  The accrued benefits under a defined benefitplan in both the numerator and denominator of the Top-heavy Ratio are increasedfor any distribution of an accrued benefit made in the one-year period endingon the Determination Date (and distributions under a terminated plan which ifit had not been terminated would have been required to be included in theAggregation Group).  In the case of adistribution made for a reason other than Severance from Employment, death, ordisability, this provision shall be applied by substituting “five-year period”for “one-year period.”

 

(c)                        For purposes of (a) and (b) above, thevalue of account balances and the present value of accrued benefits will bedetermined as of the most recent Valuation Date that falls within or ends withthe 12-month period ending on the Determination Date, except as provided inCode Section 416 and the regulations thereunder for the first and secondplan years of a defined benefit plan. The account balances and accrued benefits of a participant (i) whois not a Key Employee but who was a Key Employee in a prior year or (ii) whohas not been credited with at least one hour of service with any employermaintaining the plan at any time during the one-year period ending on theDetermination Date will be disregarded. The calculation of the Top-heavy Ratio and the extent to whichdistributions, rollovers, and transfers are taken into account will be made inaccordance with Code Section 416 and the regulations thereunder.  Deductible employee contributions will not betaken into account for purposes of computing the Top-heavy Ratio.  When aggregating plans, the value of accountbalances and accrued benefits will be calculated with reference to theDetermination Dates that fall within the same calendar year.

 

The accrued benefit of aparticipant other than a Key Employee shall be determined under (i) themethod, if any, that uniformly applies for accrual purposes under all definedbenefit plans maintained by the Employer, or (ii) if there is no suchmethod, as if such benefit accrued not more rapidly than the slowest accrualrate permitted under the fractional rule of Code Section 411(b)(1)(C).

 

**SECTION 11.03—MODIFICATIONOF VESTING REQUIREMENTS.**

 

If a Participant’sVesting Percentage determined under Article I is not at least as great ashis Vesting Percentage would be if it were determined under a schedulepermitted in Code Section 416, the following shall apply.  During any Plan Year in which the Plan is aTop-heavy Plan, the Participant’s Vesting Percentage shall be the greater ofthe Vesting Percentage determined under Article I or the schedule below.

 

| **VESTING SERVICE** | ** ** | **NONFORFEITABLE** | ** ** |
|--------------------------|------------|--------------------|------------|
| **(whole years)**   | ** ** | **PERCENTAGE.**    | ** ** |
|                     |       |               |       |
| Less than 3              |       | 0                  |       |
| 3 or more                |       | 100                |       |

 

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Theschedule above shall not apply to Participants who are not credited with anHour of Service after the Plan first becomes a Top-heavy Plan.  The Vesting Percentage determined aboveapplies to the portion of the Participant’s Account that is multiplied by aVesting Percentage to determine his Vested Account, including benefits accruedbefore the effective date of Code Section 416 and benefits accrued beforethis Plan became a Top-heavy Plan.

 

If,in a later Plan Year, this Plan is not a Top-heavy Plan, a Participant’sVesting Percentage shall be determined under Article I.  A Participant’s Vesting Percentage determinedunder either Article I or the schedule above shall never be reduced andthe election procedures of the AMENDMENTS SECTION of Article X shallapply when changing to or from the schedule as though the automatic change werethe result of an amendment.

 

The part of the Participant’s Vested Account resulting fromthe minimum contributions required pursuant to the MODIFICATION OFCONTRIBUTIONS SECTION of this article (to the extent required to benonforfeitable under Code Section 416(b)) may not be forfeited under Code Section 411(a)(3)(B) or(D).

 

**SECTION 11.04—MODIFICATIONOF CONTRIBUTIONS.**

 

During any Plan Year in which this Plan is a Top-heavyPlan, the Employer shall make a minimum contribution as of the last day of thePlan Year for each Nonkey Employee who is an Employee on the last day of thePlan Year and who was an Active Participant at any time during the PlanYear.  A Nonkey Employee is not requiredto have a minimum number of Hours of Service or minimum amount of Compensationin order to be entitled to this minimum. A Nonkey Employee who fails to be an Active Participant merely becausehis Compensation is less than a stated amount or merely because of a failure tomake mandatory participant contributions or, in the case of a cash or deferredarrangement, elective contributions shall be treated as if he were an ActiveParticipant.  The minimum is the lesserof (a) or (b) below:

 

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

 

(b)                       The “highest percentage” of Compensation for suchPlan Year at which the Employer’s Contributions are made for or allocated toany Key Employee.  The highest percentageshall be determined by dividing the Employer Contributions made for orallocated to each Key Employee during the Plan Year by the amount of hisCompensation for such Plan Year, and selecting the greatest quotient (expressedas a percentage).  To determine thehighest percentage, all of the Employer’s defined contribution plans within theAggregation Group shall be treated as one plan. The minimum shall be the amount in (a) above if this Plan and adefined benefit plan of the Employer are required to be included in theAggregation Group and this Plan enables the defined benefit plan to meet therequirements of Code Section 401(a)(4) or 410.

 

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

 

If the Employer’scontributions and allocations otherwise required under the defined contributionplan(s) are at least equal to the minimum above, no additionalcontribution shall be required. If the Employer’s total contributions andallocations are less than the minimum above, the Employer shall contribute thedifference for the Plan Year.

 

The minimumcontribution applies to all of the Employer’s defined contribution plans in theaggregate which are Top-heavy Plans.  Aminimum contribution under a profit sharing plan shall be made without regardto whether or not the Employer has profits.

 

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

 

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If a person who isotherwise entitled to a minimum contribution above is also covered under adefined benefit plan of the Employer’s that is a Top-heavy Plan during thatsame Plan Year, the minimum benefits for him shall not be duplicated.  The defined benefit plan shall provide anannual benefit for him on, or adjusted to, a straight life basis equal to thelesser of:

 

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

 

(d)                       20 percent of his average compensation.

 

Averagecompensation and years of service shall have the meaning set forth in suchdefined benefit plan for this purpose.

 

For purposes ofthis section, any employer contribution made according to a salary reduction orsimilar arrangement shall not apply in determining if the minimum contributionrequirement has been met, but shall apply in determining the minimumcontribution required.  Matchingcontributions, as defined in Code Section 401(m), shall be taken intoaccount for purposes of satisfying the minimum contribution requirements ofCode Section 416(c)(2) and the Plan. Matching contributions that are used to satisfy the minimum contributionrequirements shall be treated as matching contributions for purposes of theactual contribution percentage test and other requirements of Code Section 401(m).

 

The requirementsof this section shall be met without regard to any Social Securitycontribution.

 

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By executing this Plan, the Primary Employer acknowledgeshaving counseled to the extent necessary with selected legal and tax advisorsregarding the Plan’s legal and tax implications.

 

Executed this 25th dayof February, 2008.

 

 
|   | NATURE’S SUNSHINE  PRODUCTS, INC. |
|--------|----------------------------------------|
|   |                                   |   |
|   |                                   |   |
|   | By:                                    | \s\ Stephen M. Bunker |
|   |                                   |   |
|   |                                   |   |
|   |                                   | CFO |
|   |                                   | Title |
|   |                                   |   |
|   |                                   | Defined  Contribution Plan CL2006 |

 

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