**EXHIBIT4.19(a)**

 

KERZNER INTERNATIONALNORTH AMERICA, INC. RETIREMENT SAVINGS PLAN

 

(Amendedand restated effective January 1, 2002)

 

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**TABLE OF CONTENTS**

 
| ARTICLE I    | DEFINITIONS                                   | 2      |
|-------------------|-----------------------------------------------|--------|
|              |                                          |   |
| ARTICLE II   | PARTICIPATION                                 | 9      |
|              |                                          |   |
| ARTICLE III  | CONTRIBUTIONS                                 | 10     |
|              |                                          |   |
| ARTICLE IV   | PARTICIPANT ACCOUNTS                          | 16     |
|              |                                          |   |
| ARTICLE V    | LIMITATIONS ON CONTRIBUTIONS AND  ALLOCATIONS | 17     |
|              |                                          |   |
| ARTICLE VI   | THE TRUST                                     | 22     |
|              |                                          |   |
| ARTICLE VII  | INVESTMENT  DIRECTIONS                        | 23     |
|              |                                          |   |
| ARTICLE VIII | CREDITS  TO PARTICIPANTS                      | 24     |
|              |                                          |   |
| ARTICLE IX   | VESTING                                       | 25     |
|              |                                          |   |
| ARTICLE X    | WITHDRAWALS  AND LOANS                        | 28     |
|              |                                          |   |
| ARTICLE XI   | DISTRIBUTION  OF BENEFITS                     | 33     |
|              |                                          |   |
| ARTICLE XII  | SPECIAL  PROVISIONS FOR TOP-HEAVY PLANS       | 40     |
|              |                                          |   |
| ARTICLE XIII | THE  ADMINISTRATIVE COMMITTEE                 | 42     |
|              |                                          |   |
| ARTICLE XIV  | AMENDMENTS,  TERMINATIONS AND LIABILITIES     | 44     |
|              |                                          |   |
| ARTICLE XV   | MISCELLANEOUS                                 | 45     |
|              |                                          |   |
| APPENDIX A        | PARTICIPATING  EMPLOYERS                      | 47     |

 

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KERZNERINTERNATIONAL NORTH AMERICA, INC. RETIREMENT SAVINGS PLAN

 

PREAMBLE

 

The Plan set forth in this document is known as theKerzner International North America, Inc. Retirement Savings Plan(formerly known as the Sun International North America, Inc. RetirementSavings Plan).

 

The Plan was originally established by ResortsInternational Hotel, Inc. in the form of a non-standardized prototype planto provide retirement benefits for its eligible employees effective January 18,1982.  The Plan was amended from time totime to comply with current law and to make certain desirable changes.

 

Effective January 1, 2000, the Sun InternationalResorts, Inc. Retirement Savings Plan (the “SIRI Plan”) was merged withand into the Plan and the sponsorship of the Plan was transferred from ResortsInternational Hotel, Inc. to Kerzner International North America, Inc.(then known as Sun International North America, Inc.).

 

Effective January 1, 2000, the Plan was amendedand restated in its entirety into an individually designed plan.  The Plan was also amended to (i) complywith the requirements of the Uniformed Services Employment and ReemploymentRights Act of 1994, the Small Business Job Protection Act of 1996, the TaxpayerRelief Act of 1997 and the Internal Revenue Service Restructuring and ReformAct of 1998, and (ii) make certain other desired changes.

 

Effective January 1, 2002, the Plan is herebyamended to (i) comply with the requirements of the Economic Growth and TaxRelief Reconciliation Act of 2001 that are effective January 1, 2002 andthe Job Creation and Worker Assistance Act of 2002, (ii) permit catch-updeferrals for participants age 50 and over, and (iii) make certain otherdesired changes.

 

The Plan set forth in this document shall apply onlyto an employee who terminates employment on or after January 1, 2002 or,with respect to any provision with an earlier effective date as specified inthis document, such earlier date.  Therights and benefits, if any, of other employees shall be determined inaccordance with the provisions of the Plan as it existed prior to such date.

 

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**ARTICLE I**

 

**DEFINITIONS**

 

As used herein, the following terms shall have thefollowing meanings, unless the context clearly indicates otherwise.

 

Section 1.1                                      “Accounts”shall mean the various accounts maintained under the Plan for each Participantto which shall be credited the Contributions made by or on behalf of suchParticipant.  A Participant’s Accountsmay include his “Deferral Account,” his “Discretionary Profit SharingContribution Account,” his “Matching Account,” his “Qualified EmployerContribution Account,” and his “Rollover Account,” as further described in Article IV.

 

Section 1.2                                      “AffiliatedCompany” shall mean any corporation which is included within a controlled groupof corporations (within which the Company is also included) as determined undersection 1563(a) of the Code without regard to sections 1563(a)(4) and(e)(3)(C) of the Code; provided, however, that for the purposes of Section 5.6such determination under section 1563(a) of the Code shall be made bysubstituting the phrase “at least 50 percent” for the phrase “at least 80percent” each place it appears in section 1563(a)(1) of the Code.

 

Section 1.3                                      “Beneficiary”shall mean any person or persons (including a fiduciary or fiduciaries, whetherindividual or corporate) designated by a Participant or otherwise determined tobe entitled to a benefit hereunder pursuant to Section 11.6.

 

Section 1.4                                      “Board”shall mean the Board of Directors of the Company.

 

Section 1.5                                      “Code”shall mean the Internal Revenue Code of 1986, as amended.

 

Section 1.6                                      “Committee”shall mean the administrative committee appointed by the Board in accordancewith the provisions of Article XIII.

 

Section 1.7                                      “Company”shall mean Kerzner International North America, Inc. (formerly known asSun International North America, Inc.).

 

Section 1.8                                      “Compensation”shall mean the total remuneration paid by an Employer to an Employee duringeach Plan Year and reported on IRS Form W-2, other than bonuses, anyamounts withheld from a Participant’s paycheck for taxes or other reasons, ortaxable income due to stock option exercises, plus any amount contributed tothe Plan which qualifies as “Deferral Contributions” as defined in Section 3.2or any amount contributed by the Employee through salary reduction to another401(k) plan maintained by the Employer, a cafeteria plan maintained by theEmployer pursuant to section 125 of the Code or a transportation fringebenefit plan maintained pursuant to section 132(f) of the Code whichis not includable in the gross income of the Participant.  For purposes of calculating DeferralContributions under Section 3.2, Compensation shall exclude taxes withheldand reported on IRS Form W-2 and any amount contributed by the Employeethrough salary reduction to (a) any 401(k) plan maintained by the Employerother than the Plan, (b) a cafeteria plan maintained by the Employerpursuant to

 

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section 125 of the Code or (c) a transportation fringebenefit plan maintained pursuant to section 132(f) of the Code, whichis not includable in the gross income of the Participant.  For purposes of Article V, Compensationshall include bonuses and taxable income due to stock option exercises, and, atthe election of the Company, exclude any amount contributed to the Plan whichqualifies as “Deferral Contributions” as defined in Section 3.2 or anyamount contributed by the Employee through salary reduction to another 401(k)plan maintained by the Employer, a cafeteria plan maintained by the Employerpursuant to section 125 of the Code, a qualified transportation fringebenefit plan maintained by the Employer pursuant to section 132(f) ofthe Code and/or remuneration paid to the Employee while he was not aParticipant in the Plan.  Notwithstandinganything herein to the contrary, effective January 1, 1998, any amountsdeducted on a pre-tax basis for group health coverage because the Employee isunable to certify that he or she has other health coverage, so long as theEmployer does not request or collect information regarding the Employee’s otherhealth coverage as part of the enrollment process for the Employer’s healthplan, shall be treated as an amount contributed by the Employer pursuant to asalary reduction agreement to a cafeteria plan for purposes of determining theEmployee’s Compensation.  Compensation inexcess of the applicable limit under section 401(a)(17) of the Code shallbe disregarded with respect to any Plan Year.

 

Section 1.9                                      “Contributions”shall mean monies paid into the Fund by or on behalf of a Participant.  A Participant’s Contributions may include his“Deferral Contributions,” his “Discretionary Profit Sharing Contributions,” his“Matching Contributions” and his “Qualified Employer Contributions” as furtherdescribed in Article III.

 

Section 1.10                                “DeterminationYear” shall mean the Plan Year for which a determination is being made of anEmployee’s Highly Compensated Employee status pursuant to Section 1.20.

 

Section 1.11                                “Disability”shall mean a total and permanent inability to meet the requirements of theParticipant’s customary employment which can be expected to last for acontinuous period of not less than 12 months.

 

Section 1.12                                “EffectiveDate” shall mean January 1, 2002, or, with respect to any provision withan earlier effective date as specified in this document, such earlier date. Theoriginal “Effective Date” of the Plan shall mean January 18, 1982.

 

Section 1.13                                “EligibleEmployee” shall mean any Employee, other than (a) an Employee whose termsand conditions of employment are determined through collective bargaining,unless the collective bargaining agreement provides for the Employee’sparticipation in the Plan, (b) an individual who performs services for theEmployer as a leased employee within the meaning of section 414(n) of theCode, (c) an Employee who, as to the United States, is a non-residentalien with no U.S. source income from the Employer, and (d) an individualclassified by the Company or an Affiliated Company as an independent contractoror any other individual who is not classified by the Company or an AffiliatedCompany as an employee for purposes of withholding federal employment taxes,regardless of any contrary governmental or judicial determination relating tosuch employment status or tax withholding obligation.  If an individual in such a non-employeeclassification is subsequently reclassified as, or determined to

 

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be, an employee by the Internal Revenue Service, anyother governmental agency or authority, or a court, or if an Employer orAffiliated Company is required to reclassify such an individual as an employeeas a result of such reclassification or determination (including anyreclassification by an Employer or Affiliated Company in settlement of anyclaim or action relating to such individual’s employment status), suchindividual shall become eligible to become a Participant in this Plan from thelater of the actual or effective date of such reclassification ordetermination.

 

Section 1.14                                “Employee”shall mean all individuals employed by the Company or a Participating Employer,including leased employees within the meaning of section 414(n)(2) ofthe Code.

 

Section 1.15                                “Employer”shall mean the Company and/or any Participating Employer either collectively orindividually as the context requires.

 

Section 1.16                                “EmploymentCommencement Date” shall mean the date on which the Employee first performs anHour of Service for an Employer.

 

Section 1.17                                “ERISA”shall mean the Employee Retirement Income Security Act of 1974, as it may fromtime to time be amended.

 

Section 1.18                                “415Compensation” shall mean the total of a Participant’s wages, salary and otheramounts paid by an Employer and reported on IRS Form W-2, and DeferralContributions under this Plan and any amount contributed pursuant to a salaryreduction election to another 401(k) plan maintained by the Employer, acafeteria plan maintained pursuant to section 125 of the Code or atransportation fringe benefit plan maintained pursuant to section 132(f) ofthe Code, which is not includable in the gross income of the Participant.Notwithstanding the foregoing, effective January 1, 1998, any amountsdeducted on a pre-tax basis for group health coverage because the Employee isunable to certify that he or she has other health coverage, so long as theEmployer does not request or collect information regarding the Employee’s otherhealth coverage as part of the enrollment process for the Employer’s healthplan, shall be treated as an amount contributed by the Employer pursuant to asalary reduction agreement to a cafeteria plan for purposes of determining theEmployee’s 415 Compensation.

 

Section 1.19                                “Fund”shall mean the total corpus of the Trust.

 

Section 1.20                                “HighlyCompensated Employee” shall mean:

 

(a)                                  EachEmployee who performed services for an Employer or an Affiliated Company duringthe Determination Year and who:

 

(i)                                     wasat any time in the Determination Year or the preceding Determination Year afive-percent owner (as defined in section 416(i) of the Code and theregulations issued thereunder); or

 

(ii)                                  forthe preceding Determination Year—

 

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(A)                              received415 Compensation from the Employer or an Affiliated Company in excess of$80,000, as adjusted by the Secretary of the Treasury in accordance with section 414(q)of the Code; and

 

(B)                                wasa member of the group consisting of the top twenty percent (20%) of Employeeswhen ranked on the basis of 415 Compensation paid during such precedingDetermination Year.

 

(b)                                 Forpurposes of determining the number of Employees in the top-paid group undersubparagraph (a)(ii)(B), Employees who have less than six months of service,Employees who work less than 171⁄2 hours per week or less than six months peryear, Employees who have not attained age 21 and nonresident aliens shall beexcluded.

 

(c)                                  Aformer employee shall be treated as a Highly Compensated Employee if suchemployee was a Highly Compensated Employee when such employee incurred aSeverance from Service Date, or if such employee was a Highly CompensatedEmployee at any time after attaining age 55.

 

Section 1.21                                “Hourof Service” shall mean each hour for which an Employee is directly orindirectly paid or entitled to payment by the Company or an Affiliated Companyfor the performance of employment duties, pursuant to the provisions of section 2530.200b-2(a)(1) ofERISA, which is incorporated herein by reference.

 

Section 1.22                                “InvestmentFund” shall mean any one of the funds comprising the Fund.

 

Section 1.23                                “Non-HighlyCompensated Employee”, shall mean an Employee who is not a Highly CompensatedEmployee.

 

Section 1.24                                “NormalRetirement Age” shall mean age 65.

 

Section 1.25                                “Participant”shall mean any Employee who meets the participation requirements of Article II.

 

Section 1.26                                “ParticipatingEmployer” shall mean each Affiliated Company listed on Appendix A and eachother Affiliated Company which, with the consent of the Board, adopts this Planand joins in the corresponding Trust Agreement. An Affiliated Company which is a foreign corporation as defined in Section 7701(a)(5) ofthe Code may only adopt this Plan on behalf of its Employees who are citizensof the United States or resident aliens of the U.S. with U.S. source income.

 

Section 1.27                                “Periodof Severance” shall mean a 12-consecutive month period beginning on anindividual’s Severance from Service Date or any anniversary thereof and endingon the next succeeding anniversary of such date during which the individual isnot credited with at least one Hour of Service. In the case of an individual who is absent from work for maternity orpaternity reasons, the 12-consecutive month period beginning on the date ofsuch absence or

 

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the first anniversary of such absence shall notconstitute a Period of Severance.  Forthe purposes of this Section, an absence from work for maternity or paternityreasons means an absence (a) by reason of the pregnancy of the individual,(b) by reason of the birth of a child of the individual, (c) byreason of the placement of a child with the individual in connection with theadoption of such child by such individual, or (d) for purposes of caringfor such child for a period beginning immediately following such birth orplacement.  In order to receive creditfor absence under this Section, an individual shall provide to the Committee,in the form and manner prescribed by the Committee, information establishing (a) thatthe absence from work is for reasons set forth in this paragraph and (b) thenumber of days for which there was such an absence.  Nothing in this Section shall beconstrued as expanding or amending any maternity or paternity leave policy ofthe Employer.

 

Section 1.28                                “Plan”shall mean the Kerzner International North America, Inc. RetirementSavings Plan (formerly known as the Sun International North America, Inc.Retirement Savings Plan) as set forth herein and as it may from time to time beamended.

 

Section 1.29                                “PlanYear” shall mean a period of 12 months commencing on any January 1 andending on the following December 31.

 

Section 1.30                                “QualifiedDomestic Relations Order” shall mean a judgment, decree or order (includingapproval of a property settlement agreement) made pursuant to a state domesticrelations law (including a community property law) which:

 

(a)                                  relatesto the provision of child support, alimony payments or marital property rightsto a spouse, former spouse, child or other dependent of a Participant (the “AlternatePayee”);

 

(b)                                 createsor recognizes the existence of the Alternate Payee’s right to, or assigns tothe Alternate Payee the right to, receive all or a portion of the benefitspayable to a Participant under this Plan;

 

(c)                                  specifies(i) the name and last known mailing address (if any) of the Participantand each Alternate Payee covered by the order, (ii) the amount orpercentage of the Participant’s Plan benefits to be paid to the AlternatePayee, or the manner in which such amount or percentage is to be determined,and (iii) the number of payments or the period to which the order appliesand each plan to which the order relates; and

 

(d)                                 doesnot require the Plan to (i) provide any type or form of benefit, or anyoption not otherwise provided under the Plan, (ii) provide increasedbenefits, or (iii) pay benefits to the Alternate Payee that are requiredto be paid to another Alternate Payee under a prior Qualified DomesticRelations Order.

 

Section 1.31                                “QualifiedMilitary Service” shall mean service in the uniformed services (as defined inchapter 43 of title 38, United States Code) by any Employee if such Employee isentitled to reemployment rights under such chapter with respect to suchservice.

 

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Section 1.32                                “ReemploymentCommencement Date” shall mean the first day on which an individual performs anHour of Service after incurring a Period of Severance.

 

Section 1.33                                “RequiredDistribution Date” shall mean:

 

(a)                                  inthe case of a Participant or a former Participant who is a five-percent (5%)owner (within the meaning of section 416(i) of the Code) with respectto the Plan Year in which the Participant attains age 701⁄2, April 1 of thecalendar year following the calendar year in which the Participant attains age701⁄2; and

 

(b)                                 inthe case of all other Participants, April 1 of the calendar year followingthe later of (i) the calendar year in which the Participant attains age701⁄2, or (ii) the calendar year in which the Participant has a Severancefrom Service Date.

 

Section 1.34                                “Severancefrom Service Date” shall mean the earlier of (a) the date on which anindividual quits, retires, is discharged or dies, or (b) the firstanniversary of the first day of a period in which an individual remains absentfrom service (with or without pay) with the Employer for any reason other thana quit, retirement, discharge or death, such as vacation, holiday, sickness,disability, leave of absence or layoff.

 

Section 1.35                                “Spouse”shall mean the spouse or surviving spouse of the Participant, as the contextrequires; provided, that a former spouse shall be treated as the spouse orsurviving spouse to the extent provided under a Qualified Domestic RelationsOrder.

 

Section 1.36                                “Trust”shall mean the trust established pursuant to and forming a part of this Plan toreceive and control the assets of the Plan.

 

Section 1.37                                “Trustee”shall mean the persons or corporation acting, at any time, as trustee of theTrust.

 

Section 1.38                                “ValuationDate” shall mean the last day of each calendar quarter and any other date, asdetermined by the Committee, that is closer to the event requiring valuation ofany Investment Fund shares credited to a Participant’s Accounts under thePlan.  Notwithstanding the foregoing, forpurposes of determining the amount of the benefit to be distributed to aParticipant pursuant to Article XI, “Valuation Date” shall mean the dateon which the Investment Funds in which the Participant’s Accounts are investedare liquidated, in accordance with uniform and nondiscriminatory proceduresdetermined by the Committee.

 

Section 1.39                                “Yearsof Service” shall mean the service credited to an Employee for purposes ofdetermining the Employee’s eligibility to participate in the Plan and theEmployee’s vested interest in the Employee’s Accounts.  The following rules shall apply incalculating Years of Service under this Plan:

 

(a)                                  AnEmployee shall be credited with full and partial Years of Service for theperiod from the Employee’s Employment Commencement Date or Reemployment

 

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Commencement Date to the Employee’s Severance fromService Date.  Years of Service shall becalculated on the basis that 12 consecutive months of employment equal oneyear.  For this purpose, partial years ofservice shall be aggregated.

 

(b)                                 Ifan Employee retires, quits or is discharged, the period commencing on theEmployee’s Severance from Service Date and ending on the first date on whichthe Employee again performs an Hour of Service shall be taken into account, ifsuch date is within 12 consecutive months of the date on which the Employeelast performed an Hour of Service.

 

(c)                                  Ifan Employee is absent from work for a reason other than one specified in Section 1.39(b) andwithin 12 months of the first day of such absence, the Employee retires, quitsor is discharged, the period commencing on the first day of such absence andending on the first day the Employee again performs an Hour of Service shall betaken into account, if such day is within 12 months of the date the Employee’sabsence began.

 

(d)                                 Notwithstandingthe foregoing, if an Employee is absent for Qualified Military Service underleave granted by the Employer or Affiliated Company or required by law, and,thereafter, while the Employee’s reemployment rights are protected by law,returns to the active employment with the Employer or Affiliated Company whilethe Employee’s re-employment rights are protected by law or on a temporaryleave of absence authorized by the Employer or Affiliated Company in accordancewith standard personnel policies announced to the Employees, provided that theEmployee immediately returns to the active employment with the Employer orAffiliated Company after the end of such leave of absence, the entire period ofabsence shall be taken into account.

 

(e)                                  Forpurposes of determining an Employee’s eligibility to participate in the Planunder Section 2.1, and the Employee’s vested interest under Section 6.2,Years of Service shall include all periods described in paragraphs (a), (b), (c) and(d) above (including those periods during which the Employee was a leasedemployee within the meaning of section 414(n) or 414(o) of the Code where section 414(n)(5) doesnot apply to negate the applicability of section 414(n) of the Code)whether or not the Employee qualified as an Employee during those periods.

 

(f)                                    Notwithstandinganything herein to the contrary, effective January 1, 2003, an Employee ofKerzner International California, Inc. shall be credited with priorservice for eligibility and vesting purposes by treating the Employee’soriginal hire date with Pinehurst Resorts, Inc. or Troon Gold, L.L.P. ashis Employment Commencement Date.

 

Notwithstanding the foregoing, years of service andpartial years of service credited under the terms of the Sun InternationalResorts, Inc. Retirement Savings Plan immediately prior to the date thatsuch plan was merged with and into the Plan shall be credited as Years ofService; provided, however, that service for any period shall not be countedtwice.

 

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**ARTICLE II**

 

**PARTICIPATION**

 

Section 2.1                                      Participation.  Each Eligible Employee who was a Participantin the Plan on December 31, 2001 shall remain a Participant on January 1,2002, if he is then an Eligible Employee. Each Employee hired on or after the Effective Date of this amendment andrestatement who has attained age 21 shall become a Participant at the beginningof the next available payroll period following the date on which he completesone-quarter (1/4) of a Year of Service.

 

Section 2.2                                      Changeof Job Classification and Transfers. In the event a change of job classification or a transfer to anAffiliated Company results in a Participant no longer qualifying as an EligibleEmployee, such Employee shall cease to be a Participant as of the effectivedate of such change of job classification or transfer, but the Employee shallnot be deemed to have incurred a Severance from Service Date.  Should such Employee again qualify as anEligible Employee, he shall become a Participant as of the effective date ofsuch change.  If the Affiliated Companymaintains a qualified retirement plan which permits the transfer of aParticipant’s Accounts from this Plan to such plan, such Participant, uponnotice in the form and at the time prescribed by the Committee, may elect tohave the value of his Accounts transferred to such other plan; provided,however, that the Committee, in its sole discretion, may refuse to allow atransfer if such transfer would violate the provisions of section 411(d)(6) ofthe Code and the regulations thereunder.

 

Section 2.3                                      Re-Entry.  A Participant or an Employee who hascompleted one-quarter (1/4) or more of a Year of Service as of his Severancefrom Service Date, and who is subsequently reemployed by the Employer, shallresume or become a Participant on the first day of the payroll period nextfollowing the date he is reemployed.  AnEmployee who has not completed a Year of Service as of his Severance fromService Date, and who is subsequently reemployed by the Employer, shall beeligible to participate as provided in section 2.1; provided, however,that service prior to the Employee’s Severance from Service Date shall becanceled if he has incurred a Period of Severance of 5 consecutive years.

 

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**ARTICLE III**

 

**CONTRIBUTIONS**

 

Section 3.1                                      GeneralRequirements.  Participants are notrequired to make Contributions hereunder. In order to make Contributions, a Participant shall make an election, inthe manner prescribed by the Committee, to reduce Compensation and makeDeferral Contributions in accordance with the provisions of this Article III,which shall become effective on the first day of the payroll period nextfollowing the receipt of such election or as otherwise prescribed by theCommittee.  Notwithstanding theforegoing, the Committee, in its sole discretion, may amend or revoke aParticipant’s election at any time, if the Committee determines thatContributions or allocations to such Participant’s Account would otherwiseexceed the limitations of Article V.

 

Section 3.2                                      DeferralContributions.  A Participant shallbe eligible to contribute Deferral Contributions into the Fund each Plan Yearin accordance with the following subsections:

 

(a)                                  AParticipant’s Deferral Contributions into the Fund shall be any amount up to100% of the Compensation otherwise payable to the Participant during eachpayroll period and contributed into the Fund.

 

(b)                                 AParticipant who attains age 50 prior to the end of a Plan Year may elect toauthorize the Employer, in accordance with procedures established by theCommittee and subject to any limitations imposed by the Committee, to makeadditional Deferral Contributions to the Plan by reducing his Compensation forany pay period or periods by an amount not to exceed $1,000 in any Plan Year(or such other amount as may be applicable under section 414(v) ofthe Code), reduced by, to the extent required by applicable Treasuryregulations, any other elective deferrals contributed on the Participant’sbehalf pursuant to section 414(v) of the Code for the Plan Year;provided, however, that Deferral Contributions shall be treated for purposes ofapplying the limitations of Articles V and XII as contributed under subsection (a) abovein lieu of this subsection unless the Participant is unable to makeadditional Deferral Contributions under subsection (a) above for thePlan Year due to limitations imposed by the Plan or applicable federal law.

 

Section 3.3                                      DiscretionaryProfit Sharing Contributions.  EachEmployer may contribute such amounts, if any, as shall be determined by itsboard of directors, in its sole discretion, on behalf of its Employees whoparticipate in the Plan.  DiscretionaryProfit Sharing Contributions shall be allocated, as of the last day of suchPlan Year, to the Discretionary Profit Sharing Contribution Account of eacheligible Participant who was employed during the Plan Year in the proportionthat each such Participant’s Compensation for the Plan Year bears to the totalCompensation of all such Participants for the Plan Year.

 

Section 3.4                                      MatchingContributions.  The Company, at itsdiscretion, may make Matching Contributions to the Plan on behalf of Employeeswho participate in the Plan in an

 

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amount not to exceedfifty percent (50%) of each Participant’s first 4% of Compensation payable tothe Participant during each payroll period and contributed as DeferralContributions pursuant to Section 3.2(a); provided, however, that aParticipant shall be eligible to receive a Matching Contribution for a payrollperiod only if he is employed on the last day of such payroll period.  Notwithstanding the foregoing, effective January 1,2003, the amount of the Matching Contributions shall be one-hundred percent(100%) of each Participant’s Deferral Contributions made pursuant to Section 3.2(a),up to 2% of Compensation payable to the Participant during each payroll period;provided, however, that a Participant shall be eligible to receive a MatchingContribution for a payroll period only if he is employed on the last day ofsuch payroll period.  No MatchingContributions shall be made to the Plan with respect to any DeferralContributions made pursuant to Section 3.2(b).

 

Section 3.5                                      RolloverContributions.  The Plan shallaccept, as “Rollover Contributions” made on behalf of any Eligible Employee,cash equal to (1) all or a portion of the amount received by the EligibleEmployee as a distribution (excluding the portion of any such distribution thatconsists of after-tax employee contributions) from an eligible rollover plan(as defined in Section 11.10(b)(ii)), or (2) an amount transferreddirectly to the Plan (pursuant to section 401(a)(31) of the Code) on theEligible Employee’s behalf by the trustee of an eligible rollover plan (asdefined in Section 11.10(b)(ii)), but only if the deposit qualifies as arollover as defined in section 402 of the Code (or, section 408 ofthe Code, with respect to a rollover from an individual retirement accountdescribed in section 408(a) of the Code or an individual retirementannuity described in section 408(b) of the Code).

 

If the amount receiveddoes not qualify as a Rollover Contribution, the amount shall be refunded tothe Eligible Employee.

 

Section 3.6                                      Limitationon Deferral Contributions. Notwithstanding anything contained herein to the contrary, a Participant’stotal Deferral Contributions made pursuant to Section 3.2(a) togetherwith elective deferrals (as defined in section 402(g) of the Code)under any other plan or arrangement maintained by the Employer or an AffiliatedCompany during any calendar year, excluding elective deferrals made to any suchplan pursuant to section 414(v) of the Code, shall not exceed thedollar limitation in effect under section 402(g) of the Code for anycalendar year.

 

Section 3.7                                      Returnof Deferral Contributions.  If theParticipant’s Deferral Contributions made under Section 3.2(a) andhis elective deferrals made under any other qualified cash or deferredarrangement maintained pursuant to section 401(k) of the Code for ataxable year, exceed the maximum dollar amount excludable from gross incomeunder section 402(g) of the Code (after any Deferral Contributionshave been returned to the Participant pursuant to Article V), theParticipant shall allocate to the Plan or to such other qualified cash ordeferred arrangement the excess deferrals. The Participant shall notify the Committee of such allocation in writingno later than the March 1 following the Participant’s taxable year inwhich the excess deferrals were made. *** ***If the sum of a Participant’selective deferrals from the Plan and any other plan or arrangement maintainedby the Employer or an Affiliated Company exceed the maximum dollar amountexcludable from gross income under section 402(g) of the Code for the

 

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calendar year, the Participant shall be deemed to havenotified the Committee of such excess deferrals.   Notwithstanding any other provisions of thePlan, not later than the April 15 following the close of the taxable year,the Committee may cause the Trustee to distribute to the Participant the excessdeferrals (adjusted for any income or loss attributable thereto and subject,however, to the withholding of taxes and other amounts as though such amountswere current remuneration) allocated to the Plan by the Participant pursuant tothis Section.  In the event a Participantreceives a distribution of excess Deferral Contributions pursuant to this Section 3.7,the Participant shall forfeit any Matching Contributions (plus income thereondetermined as described in Section 5.5(e)) allocated to the Participant byreason of the distributed Deferral Contributions.  For purposes of determining the necessaryforfeiture, Matching Contributions previously distributed pursuant to Section 5.5(d) shallbe treated as forfeited under this Section 3.7.

 

Section 3.8                                      Contributionsto the Fund.  Amounts representing aParticipant’s Deferral Contributions shall be deducted from payrolls pursuantto a salary reduction agreement between the Employer and the Participant, andsuch amounts shall be contributed to the Fund as soon as administrativelypracticable, but in no event later than the 15th business day of the monthfollowing the month in which such Deferral Contributions were withheld from theParticipant’s Compensation. Discretionary Profit Sharing Contributions shall be made no later thanthe last date on which amounts so paid may be deducted for federal income taxpurposes for the taxable year of the Employer in which the Plan Year ends.  Matching Contributions for any payroll periodshall normally be contributed to the fund as soon as administratively practicable,but in no case later than the time prescribed by law for taking a deduction forfederal income tax purposes.**  **Qualified Employer Contributionsfor any Plan Year shall be made no later than 12 months after the close of thePlan Year to which the contribution relates, unless otherwise prescribed bylaw.  The requirements of this section 3.7shall not apply to contributions made pursuant to section 3.14.

 

Section 3.9                                      Suspensionor Change in Rates of Contributions. A Participant may suspend or change the rate of his DeferralContributions by submitting a request, in the manner and at the timesprescribed by the Committee, prior to the first day of the payroll period as ofwhich the suspension or change is to become effective.  All Contributions by a Participant shall besuspended without any request on his part for any month in which he is on leaveof absence without Compensation.  Suchsuspension shall continue until the first day of the month following the terminationof such leave, and Participants shall not be permitted to pay suspendedContributions.

 

Section 3.10                                Deductibilityof Contributions.  Contributionsunder the Plan are conditioned upon their deductibility under section 404of the Code and, to the extent the deduction is disallowed, shall be returnedto the Employer or the Participant as appropriate within one year after thedisallowance of the deduction.  Forpurposes of this Section, a Contribution which is not deductible in the currenttaxable year of the Employer but may be deducted in taxable years of theEmployer subsequent to the year in respect of which it is made, shall not beconsidered to be disallowed. Notwithstanding the foregoing, the maximum amount

 

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which may be returned to the Employer or a Participantshall be the value of the Contribution on the date it is returned.

 

Section 3.11                                Mistake.  In the case of a Contribution which is madeunder a mistake of fact, such Contribution shall be returned to the Employer orthe Participant, as appropriate, within one year after the payment of theContribution.  Notwithstanding theforegoing, the maximum amount which may be returned to the Employer or aParticipant shall be the value of the Contribution on the date it is returned.

 

Section 3.12                                ContributionsConditioned on Plan Qualification. All Contributions under the Plan are conditioned on the initialqualification of the Plan under sections 401(a) and 401(k) of the Code,and if the Plan is found not to so qualify, it shall be terminated inaccordance with the provisions of Section 14.2 and the Fund shall bedistributed to the Participants and the Employer, as appropriate, within oneyear after the denial of such qualification.

 

Section 3.13                                Records.  All Contributions transferred to the Trusteeunder the Plan shall be accompanied by instructions from the Committee to theTrustee that:  (a) identify theParticipant on whose behalf the Contribution is being made; and (b) statewhether the Contribution represents a Deferral Contribution under Section 3.2,a Discretionary Profit Sharing Contribution under Section 3.3 or aMatching Contribution under Section 3.4.

 

Section 3.14                                ContributionsFor Periods of Military Service. Notwithstanding any provision of this Plan to the contrary, allcontributions with respect to periods of Qualified Military Service shall beprovided in a manner consistent with Code section 414(u), as follows:

 

(a)                                  DeferralContributions.  The Employer shallpermit a reemployed Participant (who is reemployed while his reemploymentrights are protected by law) to make additional Deferral Contributions duringthe period which begins on the date of the reemployment of such Participant andhas the same length as the lesser of:

 

(i)                                     theproduct of 3 and the period of Qualified Military Service which resulted insuch rights, and

 

(ii)                                  5years.

 

The amount of additional Deferral Contributionspermitted under this subsection (a) is the maximum amount of theDeferral Contributions that the Participant would have been permitted to makeunder the Plan during the period of Qualified Military Service if theParticipant had continued to be employed by the Employer during such period andreceived compensation as determined under subsection (e).  Proper adjustment shall be made to the amountdetermined under the preceding sentence for any Deferral Contributions actuallymade during the period of such Qualified Military Service.

 

(b)                                 DiscretionaryProfit Sharing Contributions.  TheEmployer shall contribute to the Plan on behalf of a Participant an amountequal to the Discretionary Profit

 

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Sharing Contribution thatwould have been allocated under Section 3.3 had the Participant continuedto be employed and received Compensation during the applicable period ofmilitary service.

 

(c)                                  MatchingContributions.  The Employer shallmake a Matching Contribution on behalf of a Participant with respect to anyadditional Deferral Contributions made by the Participant pursuant to subsection (a) onthe same basis Matching Contributions would have been made under Section 3.4had such Deferral Contributions actually been made during the period ofQualified Military Service.

 

(d)                                 QualifiedEmployer Contributions.  The Companyshall contribute to the Plan, on behalf of each Participant who returns fromQualified Military Service as described in Section 1.31, an amount equalto the Qualified Employer Contributions that would have been required under Section 3.15had such Participant continued to be employed and received Compensation duringthe period of Qualified Military Service.

 

(e)                                  Limitationon Crediting of Earnings and Forfeitures. Nothing in this Section 3.14 shall be construed as requiring (i) anycrediting of earnings to a Participant with respect to any DeferralContribution, Discretionary Profit Sharing Contribution or MatchingContribution before such contribution is actually made, or (ii) anyallocation of any forfeiture with respect to the period of Qualified MilitaryService.

 

(f)                                    Compensation.  For purposes of this Section 3.14, areemployed Participant shall be treated as receiving Compensation and 415Compensation during a period of Qualified Military Service equal to:

 

(i)                                     theCompensation and 415 Compensation the Participant would have received duringsuch period if the Participant were not in Qualified Military Service,determined based on the rate of pay the Participant would have received fromthe Employer but for absence during the period of Qualified Military Service,or

 

(ii)                                  ifthe Compensation and 415 Compensation the Participant would have receivedduring such period was not reasonably certain, the Participant’s averageCompensation during the 12-month period immediately preceding the QualifiedMilitary Service (or, if shorter, the period of employment immediatelypreceding the Qualified Military Service).

 

(g)                                 Inapplicabilityof Certain Limitations.  If anycontributions are made by a Participant or the Employer in accordance with thisSection 3.14:

 

(i)                                     anysuch contribution shall not be subject to any otherwise applicable limitationcontained in, and the Plan shall not be treated as failing to meet therequirements of, Section 3.6, 5.6, 5.8, and shall not be taken intoaccount in applying such limitations to other contributions or benefits underthe Plan with respect to the year in which the contribution is made;

 

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(ii)                                  anysuch contribution shall be subject to the limitations referred to insubparagraph (g)(i) with respect to the year to which the contributionrelates (in accordance with rules prescribed by the Secretary of theTreasury); and

 

(iii)                               thePlan shall not be treated as failing to meet the requirements of Sections 5.2,5.4 and 5.5 or Article XII by reason of such contributions.

 

Section 3.15                                QualifiedEmployer Contributions.  The Companymay, in its discretion, make Qualified Employer Contributions for a Plan Yearthat (a) shall be allocated to some or all Non-Highly CompensatedEmployees who have met the eligibility requirements of Article II pro rataon the basis of the Deferral Contributions or Compensation for the Plan Year orin a uniform dollar amount, as determined by the Company, in an amount that isnecessary to help satisfy any or all of the tests in Sections 5.2, 5.4 or 5.5or (b) shall be allocated in the manner prescribed by the Company tocorrect any operational or demographic failure pursuant to any correctionprogram or policy established by the Internal Revenue Service or the Departmentof Labor.

 

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**ARTICLE IV**

 

**PARTICIPANT ACCOUNTS**

 

Section 4.1                                      DeferralAccount.  Deferral Contributions madeon behalf of a Participant shall be allocated to his Deferral Account and shallbe invested in accordance with the provisions of Article VII.

 

Section 4.2                                      DiscretionaryProfit Sharing Contribution Account. Discretionary Profit Sharing Contributions made on behalf of aParticipant shall be allocated to his Discretionary Profit Sharing ContributionAccount and shall be invested in accordance with the provisions of Article VII.

 

Section 4.3                                      MatchingAccount.  Matching Contributions madeon behalf of a Participant shall be allocated to his Matching Account and shallbe invested in accordance with the provisions of Article VII.

 

Section 4.4                                      QualifiedEmployer Contribution Account. Qualified Employer Contributions made on behalf of a Participant inrespect of any Plan Year shall be allocated to his Qualified EmployerContribution Account and shall be invested in accordance with the provisions ofArticle VII.

 

Section 4.5                                      RolloverAccount.   Rollover Contributionstransferred to the Plan on a Participant’s behalf pursuant to Section 3.5shall be allocated to the Participant’s Rollover Account and shall be investedin accordance with the provisions of Article VII.

 

Section 4.6                                      Maintenanceof Accounts.  With respect to eachParticipant, the Trustee shall maintain separately the Accounts referred to inSections 4.1, 4.2, 4.3, 4.4 and 4.5.  TheCommittee shall furnish the Trustee with instructions in accordance with Section 3.13enabling the Trustee to allocate properly all Contributions under the Plan tosaid Accounts.  In making suchallocation, the Trustee shall be fully entitled to rely on the instructionsfurnished by the Committee and shall be under no duty to make any inquiry orinvestigation with respect thereto.

 

Section 4.7                                      Statements.  The Trustee shall furnish each Participantstatements at least annually reflecting the current fair market value of theParticipant’s Accounts under the Plan.

 

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**ARTICLE V**

 

**LIMITATIONS ON CONTRIBUTIONS ANDALLOCATIONS**

 

Section 5.1                                      GeneralRequirements.  For any Plan Year, (a) Contributionsunder the Plan shall not exceed the limitations on deductions imposed under section 404(a)(3) ofthe Code; (b) the Plan shall satisfy the coverage requirements of section 410(b)(1) ofthe Code; (c) the Plan shall satisfy the average deferral percentage testset forth in Section 5.2; (d) the Plan shall satisfy the averagecontribution percentage test set forth in Section 5.4; and (e) thePlan shall satisfy the limitation on use of percentage tests set forth in Section 5.5when applicable.

 

Section 5.2                                      AverageDeferral Percentage Test.  Theaverage deferral percentage for Highly Compensated Employees who areParticipants for the Plan Year shall not exceed the greater of (a) or (b) asfollows:

 

(a)                                  Theaverage deferral percentage for the current Plan Year for Participants who areNon-Highly Compensated Employees, multiplied by 1.25, or

 

(b)                                 Theaverage deferral percentage for the current Plan Year for all Participants whoare Non-Highly Compensated Employees, multiplied by 2.0; provided that theaverage deferral percentage for Highly Compensated Employees who are Participantsmay not exceed the average deferral percentage for Non-Highly CompensatedEmployees who are Participants by more than two percentage points.

 

Notwithstanding the foregoing, the average deferralpercentage test for 2002 shall be performed based on the average deferralpercentage for the prior Plan Year for Participants who are Non-HighlyCompensated Employees.

 

Section 5.3                                      AverageDeferral Percentage.  For purposes ofSection 5.2, the term “average deferral percentage” as applied to aspecified group of Participants shall mean the average of the ratios,calculated separately for each such Participant in such group of:

 

(a)                                  theamount of (i) Deferral Contributions (excluding any Deferral Contributionstaken into account in determining the average contribution percentage in Section 5.4(a),distributed to a Non-Highly Compensated Employee pursuant to a claim fordistribution under Section 3.7, returned to the Participant pursuant to Section 5.6(c),contributed pursuant to Section 3.2(b) and any other electivedeferrals made pursuant to section 414(v) of the Code), plus (ii) atthe election of the Employer, the amount of Qualified Employer Contributionspaid to the Plan on behalf of each such Participant for such Plan Year, to

 

(b)                                 theParticipant’s Compensation for such Plan Year; provided, however, that theCommittee may determine, for any Plan Year, to consider only that Compensationpaid to a Participant while he was a Participant in the Plan.

 

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For the purposes of this Section, the deferralpercentage of a Highly Compensated Employee who is a Participant under thisPlan and who has made elective deferrals under any other qualified cash ordeferred arrangement (excluding plans that are not permitted to be aggregatedunder Treas. Reg. §1.401(k)-1(b)(3)(ii)(B)) maintained by the Employer or anAffiliated Company pursuant to section 401(k) of the Code shall be the sumof his deferral percentages under all such plans.

 

Section 5.4                                      AverageContribution Percentage Test.  Theterm “average contribution percentage test” shall mean the numerical test setforth in Section 5.2 substituting for the term “average deferralpercentage” the term “average contribution percentage.” Notwithstanding theforegoing, the average contribution percentage test for 2002 shall be performedbased on the average contribution percentage for the prior Plan Year forParticipants who are Non-Highly Compensated Employees.

 

(a)                                  Theterm “average contribution percentage” as applied to a specified group ofParticipants shall mean the average of the ratios, calculated separately foreach such Participant in such group of:

 

(i)                                     theamount of (a) Matching Contributions paid to the Plan on behalf of suchParticipant for such Plan Year (excluding Matching Contributions that aredistributed or returned to the Company under Section 3.7 or 5.6), plus (B) atthe discretion of the Company, Deferral Contributions made under Section 3.2(a) (excludingelective deferrals made pursuant to section 414(v) of the Code),plus, at the election of the Employer, Qualified Employer Contributions paid tothe Plan on behalf of such Participant for such Plan Year, to

 

(ii)                                  theParticipant’s Compensation for such Plan Year; provided, however, that theCommittee may determine****to consideronly that Compensation paid to a Participant while he was a Participant in thePlan.

 

(b)                                 DeferralContributions may be taken into account under this Section only to theextent necessary to satisfy the average contribution percentage test, and onlyto the extent that the Plan continues to satisfy the average deferralpercentage test set forth in Section 5.2 without taking into account suchDeferral Contributions.

 

(c)                                  MatchingContributions may be taken into account under this Section only the extentthat they are not used to satisfy the average deferral percentage test.

 

(d)                                 Ifa Highly Compensated Employee participates in any other plan of the Employer towhich Employer matching contributions, Employee contributions or electivedeferrals are made, all such contributions shall be aggregated for purposes ofthis Section (excluding plans that are not permitted to be aggregatedunder Treas. Reg. §1.401(m)-1(b)(3)(ii)).

 

Section 5.5                                      Correctionof Excess Contributions.

 

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(a)                                  ExcessDeferral Contributions shall be returned to Highly Compensated Employees in themanner set forth in Section 5.5(c) hereof if the limitations under Section 5.2or 5.4 are exceeded.  Excess DeferralContributions to be returned to Highly Compensated Employees shall bedetermined by:

 

(i)                                     reducingthe actual deferral percentage of Highly Compensated Employee(s) with thehighest average deferral percentage until the nondiscrimination test of Section 5.2has been satisfied or until the actual deferral percentage of such HighlyCompensated Employee(s) is equal to the actual deferral percentage of theHighly Compensated Employee with the next highest average deferral percentage;

 

(ii)                                  repeatingthe process in paragraph (i) above until the nondiscrimination test of Section 5.2is satisfied; and

 

(iii)                               convertinginto a dollar amount any reduction in the actual deferral percentage of eachaffected Highly Compensated Employee.

 

(b)                                 Theamount of excess Matching Contributions to be returned to Highly CompensatedEmployees shall be determined in the manner set forth in Section 5.5(a) above.  Excess Matching Contributions, if any, shallbe returned to Highly Compensated Employees in the manner set forth in Section 5.5(d) hereof.

 

(c)                                  Shouldthe average deferral percentage of Highly Compensated Employees for a Plan Yearexceed the restrictions described in Section 5.2, the excess HighlyCompensated Employees’ Deferral Contributions (determined under Section 5.5(a))shall be distributed from the Deferral Account of the Highly CompensatedEmployee(s) with the greatest amount of Deferral Contributions for the PlanYear or until the Deferral Contributions made by such Highly CompensatedEmployee(s) equals the Deferral Contributions made by the Highly CompensatedEmployee(s) with the next greatest amount of Deferral Contributions for thePlan Year.  Distributions shall first bemade with respect to Deferral Contributions that are not taken into account indetermining Matching Contributions pursuant to Section 3.4.  This process shall be repeated until all theexcess Deferral Contributions attributable to the applicable test have beendistributed.  For purposes of this subsection (c),Deferral Contributions made under Section 3.2(b) and any other electivedeferrals made pursuant to section 414(v) of the Code shall not betaken into account.

 

(d)                                 Notwithstandingthe foregoing, at the election of the Committee and in accordance with rules uniformlyapplicable to all affected Participants, the average deferral percentagereduction described in this Section may be accomplished, in whole or inpart, by recharacterizing the excess Deferral Contributions as DeferralContributions made under Section 3.2(b) to the extent permitted byCode section 414(v) and regulations issued thereunder.  In the event a Participant’s excess DeferralContributions are recharacterized as Deferral Contributions made under Section 3.2(b) pursuantto this subsection (d), the Participant shall forfeit any MatchingContributions (plus income thereon determined as described in Section 5.5(e))allocated to the Participant by reason of the recharacterized DeferralContributions.

 

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(e)                                  Shouldthe average contribution percentage of Highly Compensated Employees for a PlanYear exceed the restrictions described in Section 5.3, the excess HighlyCompensated Employees’ Matching Contributions (determined under Section 5.5(b))shall be distributed or, if forfeitable, forfeited from the Matching Account ofthe Highly Compensated Employee with the greatest actual contributionpercentage in the manner described in section 5.5(c) hereof.  Amounts to be forfeited shall include aproportionate share of earnings.

 

(f)                                    Thedistribution or forfeiture of excess Contributions pursuant to subsection (c) or(d) above shall be made within two and one half (2-1/2) months followingthe close of such Plan Year, if administratively practicable, but in no eventlater than the last day of the twelve month period following the close of suchPlan Year.  Any Matching Contributions(excluding Matching Contributions that are distributed or forfeited pursuant tothe provisions of subsection (d)) plus related earnings that have beenallocated to a Participant on account of excess Deferral Contributions that arereturned pursuant to subsection (c) shall be forfeited.  Amounts forfeited shall, at the discretion ofthe Committee, be used to (i) pay any administrative expenses of the Plan,(ii) fund benefits required to be restored under Section 9.3 or (iii) reducethe Employer’s obligation to make Matching Contributions allocated under Section 3.4.

 

(g)                                 Notwithstandinganything in this Section to the contrary, for any Highly CompensatedEmployee who is an active Participant in the Plan while simultaneously eligibleto participate in any other qualified retirement plan maintained by theEmployer or an Affiliated Company (excluding any such plan which is notpermitted to be aggregated with the Plan pursuant to Treas. Reg. §1.401(k)-1(b)(3)(ii)(B) or§1.401(m)-1(b)(3)(ii)) under which the Employee has made employee contributionsor elective deferrals, or is credited with employer matching contributions forthe year, the Committee shall coordinate corrective actions under this Plan andsuch other plan for the year.

 

Section 5.6                                      MaximumAllocation to Participants.

 

(a)                                  Notwithstandingany other provision of this Plan, the amount of the Annual Addition to eachParticipant’s Accounts for any Plan Year may not exceed the lesser of:

 

(i)                                     $40,000(as adjusted under section 415(d) of the Code), or

 

(ii)                                  one-hundredpercent (100%) of the total 415 Compensation paid to the Participant during aPlan Year.

 

(b)                                 Forpurposes of this Section, “Annual Addition” means (i) the sum of allcontributions by the Participant or by the Employer or an Affiliated Companyhereunder or under any other defined contribution plan maintained by either,except elective deferrals distributed pursuant to Section 3.7 or DeferralContributions made pursuant to Section 3.2(b) or any other electivedeferrals made pursuant to section 414(v) of the Code; (ii) allforfeitures allocated to the Participant’s accounts under such plans; and (iii) allamounts described in sections 415(1)(1) (relating to contributionsallocated to individual medical accounts which are part of a pension or

 

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annuity plan) and 419A(d)(2) (relating topost-retirement medical or life insurance benefit accounts for key employees ofthe Code.

 

(c)                                  Ifa Participant’s Annual Addition exceeds the amount specified in Section 5.8(a),as a result of the reallocation of forfeitures, a reasonable error inestimating the Participant’s Compensation, a reasonable error in determiningthe amount of elective deferrals (within the meaning of section 402(g) ofthe Code) or such other circumstances as permitted by law, the Committee shalldetermine which portion, if any, of such excess amount is attributable to theParticipant’s Deferral Contributions, and/or Discretionary Profit SharingContributions, and/or Matching Contributions and/or Qualified EmployerContributions, if any, until such amount has been exhausted.  To the extent any portion of a Participant’sDeferral Contributions are determined to be excess under this Section, suchDeferral Contributions, with income thereon, shall be returned to theParticipant as soon as administratively practicable.  To the extentany portion of the Discretionary Profit Sharing Contributions, MatchingContributions or Qualified Employer Contributions allocable to a Participantare determined to be excess under this Section, while the Participant remainsan Eligible Employee, his excess Discretionary Profit Sharing Contributions,Matching Contributions, and/or Qualified Employer Contributions shall be heldin a suspense account (which shall share in investment gains and losses of theFund) by the Trustee until the following Plan Year (or any succeeding PlanYears), at which time such amounts shall be allocated to the Participant’sAccounts before any Discretionary Profit Sharing Contributions, MatchingContributions or Qualified Employer Contributions are made on his behalf forthe Plan Year.  When the Participantceases to be an Eligible Employee, his excess Discretionary Profit SharingContributions and/or Matching Contributions and/or Qualified EmployerContributions held in the suspense account shall be allocated in the followingPlan Year (or any succeeding Plan Years) to the Accounts of other Participantsin the Plan.  Furthermore, the Committeeshall perform any other actions as may be necessary to preserve the Plan’sstatus as a qualified plan.

 

Section 5.7                                      Aggregation.  For purposes of Sections 5.2, 5.4 and 5.5,the Plan shall be aggregated and treated as a single plan with other plans maintainedby the Employer or an Affiliated Company to the extent that the Plan isaggregated with any such other plan for purposes of satisfying section 410(b) (otherthan section 410(b)(2)(a)(ii)) of the Code.

 

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**ARTICLE VI**

 

**THE TRUST**

 

Section 6.1                                      Establishmentof Trust.  All assets of the Planshall be held in the Trust forming a part of the Plan established by theexecution of a trust agreement by and between the Company and the Trustee.  No part of the principal or income of theTrust shall be used for, or diverted to, purposes other than the exclusivebenefit of the Participants and their beneficiaries and defraying reasonableexpenses of administering the Plan to the extent not otherwise paid by the Company.  No person shall have any interest in or rightto any part of the earnings of the Fund, or any right in, or to, or under theTrust or any part of the assets thereof, except as and to the extent expresslyprovided in the Plan.

 

Section 6.2                                      Removalof Trustee.  All Contributions underthe Plan received by the Trustee together with any earnings thereon, shall beheld, managed and administered by the Trustee in accordance with the terms andconditions of the Trust Agreement.  TheCommittee may remove the Trustee at any time upon such notice as is required bythe Trust Agreement.  Upon such removalor upon resignation of the Trustee, the Committee shall designate a successorTrustee.

 

Section 6.3                                      InvestmentFunds.  The Fund shall consist ofseparate Investment Funds selected by the Committee.  The Committee may, in its discretion,establish additional funds and may terminate any fund from time to time.  The Investment Funds may include, but shallnot be limited to, funds managed by the Trustee, or by an Investment Companyregulated under the Investment Company Act of 1940.  The Investment Funds may, in whole or inpart, be invested in any common, collective, or commingled trust fundmaintained by the Trustee, which is invested principally in property of the kindspecified for that particular Investment Fund and which is maintained for theinvestment of the assets of plans and trusts which are qualified under theprovisions of section 401(a) of the Code and exempt from Federaltaxation under the provisions of section 501(a) of the Code, andduring such period of time as an investment through any such medium exists thedeclaration of trust of such trust shall constitute a part of the Trust.

 

Section 6.4                                      InvestmentDirection.  All Contributions underthe Plan that are allocated to any separate Account of a Participant inaccordance with Article IV shall be invested by the Trustee in shares ofthe Investment Funds as directed by the Participant pursuant to Article VII,which shares shall be credited to the Participant’s separate Account.  If the Participant fails to direct any assetsheld in his Accounts, such assets shall be invested as directed by theCommittee or its delegate.

 

Section 6.5                                      Reinvestmentof Income.  All interest, dividends,capital gains, distributions and other income received with respect to anyshares of an Investment Fund credited to any separate Account of a Participantunder the Plan shall be reinvested by the Trustee in additional shares of thesame Investment Fund and credited to the Participant’s separate Account.

 

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**ARTICLE VII**

 

**INVESTMENT DIRECTIONS**

 

Section 7.1                                      Investmentof Contributions. Investments of a Participant’s Contributions shall bemade in such percentages as the Participant may direct to the Investment Fundsavailable.  The percentage allocation ofa Participant’s future Contributions to be paid into and invested in theInvestment Funds may be changed not more frequently than once each pay periodin the manner prescribed by the Committee.

 

Section 7.2                                      Investmentof Rollover Account.  In accordancewith rules and regulations issued by the Committee, each Participant shallhave the right to direct that his Rollover Account, if any, be invested in themanner prescribed in Section 7.1.

 

Section 7.3                                      Transferof Investments.  A Participant may,in the manner and at the times prescribed by the Committee, transfer anyportion, in whole percentage increments, of his interest in any Investment Fundto any one or a combination of the other Investment Funds.

 

Section 7.4                                      Notice.  Any direction or notice pursuant to Section 7.1,7.2 and/or 7.3 shall be made in accordance with such rules as may beestablished by the Committee.

 

Section 7.5                                      Relianceon Investment Direction.  Allinvestment directions or notices by Participants pursuant to Section 7.1,7.2 or 7.3 shall be furnished by the Participant directly to the Trustee in themanner prescribed by the Trustee or timely furnished by the Committee to theTrustee.  In making any investment ofPlan assets, the Trustee shall be fully entitled to rely on such directions ornotices furnished by the Participant or the Committee.

 

Section 7.6                                      FiduciaryResponsibility.  This Plan isintended to constitute a plan described in section 404(c) of theEmployee Retirement Security Act of 1974, as amended, and Title 29 of the Codeof Federal Regulations §2550.404c-1. Neither the Company, the Employer, the Committee, the Trustee nor anyother Plan fiduciary shall be liable for any losses which are the direct andnecessary result of investment instructions provided by any Participant, beneficiaryor Alternate Payee.

 

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**ARTICLE VIII**

 

**CREDITS TO PARTICIPANTS**

 

Section 8.1                                      Creditingof Accounts.  Contributions by or fora Participant shall be credited to his Accounts as provided in Article IV.  The Committee or its delegate shall keepappropriate records so that the distinction between Accounts and amountsattributable to each may be maintained as credits are shifted from oneInvestment Fund to another pursuant to Article VII.

 

Section 8.2                                      Valuationof Funds.  For purposes ofdistributions to a Participant or his Beneficiary, the amount of any InvestmentFund shares credited to a separate Account of a Participant shall be determinedby the fair market value of the shares as of the following dates:

 

(a)                                  inthe case of a withdrawal payment of amounts from an Investment Fund, on theValuation Date coinciding with or immediately preceding the effective date ofthe withdrawal payment; and

 

(b)                                 inthe case of a distribution under Article XI, the Valuation Date related tothe date of distribution.

 

Section 8.3                                      Comminglingof Assets.  The Trustee may hold aParticipant’s Accounts in one or more commingled funds if accounting recordsare maintained in such a form that all investment events, including bothrealized and unrealized gains and losses as well as receipt of dividends andinterest, occurring during each interval between Valuation Dates will beallocated to the Participant’s Account or Accounts with respect to which suchinvestment event or events occurred.

 

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**ARTICLE IX**

 

**VESTING**

 

Section 9.1                                      VestingSchedule.

 

(a)                                  AParticipant shall be fully vested in the balance of his Deferral Account andhis Qualified Employer Contribution Account at all times.

 

(b)                                 AParticipant hired by the Employer prior to January 1, 1998 shall vest inamounts contributed to his Discretionary Profit Sharing Contribution Accountand Matching Account during a Plan Year (including subsequent earnings andlosses on these amounts) in accordance with the following schedule:

 

| **Years of Service** | ** ** | **Vested Interest** |
|----------------------|------------|---------------------|
| Less than 1          |       | 0%                  |
| 1                    |       | 33-1/3 %            |
| 2                    |       | 66-2/3 %            |
| 3                    |       | 100%                |

 

(c)                                  AParticipant hired by the Employer on or after January 1, 1998 shall vestin amounts contributed to his Discretionary Profit Sharing Contribution Accountand Matching Account during a Plan Year (including subsequent earnings andlosses on these amounts) in accordance with the following schedule:

 

| **Years of Service** | ** ** | **Vested Interest** |
|----------------------|------------|---------------------|
| Less than 1          |       | 0%                  |
| 1                    |       | 20%                 |
| 2                    |       | 40%                 |
| 3                    |       | 60%                 |
| 4                    |       | 80%                 |
| 5 or more            |       | 100%                |

 

(d)                                 AParticipant’s interest in his Discretionary Profit Sharing Contribution Accountand Matching Account shall in any case become 100% vested upon his attainmentof Normal Retirement Age or upon the occurrence of a Disability or death.

 

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Section 9.2                                      Ifa Participant has received a distribution from his Discretionary Profit SharingContribution Account or his Matching Account, at a time when he has less than aone hundred percent (100%) vested interest in such Account, his vested interestin such Account at all times prior to the date on which he incurs a Period ofSeverance of 5 consecutive years, shall be an amount “X” determined by theformula X=P(AB+(RxD))-(RxD), when:

 

“P” =                        theParticipant’s vested interest as determined under subsection (b) onthe date of reference.

 

 “AB” =          thebalance, as of the date of reference, of the Participant’s Discretionary ProfitSharing Contribution Account or Matching Account.

 

“D” =                      theamount of the distribution.

 

“R” =                       theratio of AB to the balance, immediately following the distribution, of theParticipant’s Discretionary Profit Sharing Contribution Account or MatchingAccount.

 

In the event that the Participant has received morethan one such distribution, his vested interest in such Account shall be anamount “X(n)” determined by the formula

X(n)=P[AB+((R(1)xD(1))+(R(2)xD(2))+...+(R(n)xD(n))]-[(R(1)xD(1))+(R(2)xD(2))+...+(R(n)xD(n))], when D(1) is the amount of the first such distribution, D(2) isthe amount of the second such distribution, and so forth, and R(1) is theratio of the AB to the balance of the Discretionary Profit Sharing ContributionAccount or Matching Account following the first distribution, R(2) is theratio of AB to the balance of the Discretionary Profit Sharing ContributionAccount or Matching Account immediately following the second distribution, andso forth.

 

Section 9.3                                      Effectof Periods of Severance for Vesting Purposes.  For purposes of determining a Participant’svested interest in his Discretionary Profit Sharing Account and his MatchingAccount, the following rules shall apply:

 

(a)                                  Exceptas otherwise provided in this Section, in the case of any Participant who hasincurred a Period of Severance and is subsequently reemployed by the Employer,Years of Service and any partial Year of Service before the Participant’sSeverance from Service Date shall be aggregated with Years of Service and anypartial Year of Service after the Participant’s Reemployment Commencement Date.

 

(b)                                 Inthe case of any Participant who is reemployed after incurring five consecutivePeriods of Severance, Years of Service after such five-year period shall not betaken into account for the purposes of determining the vested interestattributable to Matching Deposits made before such five-year period.

 

Section 9.4                                      Forfeitures.

 

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(a)                                  Ifa Participant is not fully vested in his Discretionary Profit Sharing Accountand Matching Account as described in Section 9.1 at the time he incurs aSeverance from Service Date, the unvested portion of the Participant’s Accountsshall be forfeited as of the earlier of:

 

(i)                                     thedate on which he receives a distribution of his entire vested interest in hisAccounts; or

 

(ii)                                  thelast day of the Plan Year in which he incurs five consecutive year Period ofSeverance.

 

A Participant whose vested Account balance is zeroshall be deemed to have received a distribution of his Accounts as of hisSeverance from Service Date.

 

(b)                                 Ifa Participant is rehired by the Employer before incurring Period of Severanceof 5 consecutive years, any amount forfeited under subsection (a) shallbe restored to his Discretionary Profit Sharing Account and Matching Account;provided, however, that, if the Participant has previously received adistribution of the nonforfeitable portion of his Discretionary Profit SharingAccount and Matching Account, such restoration shall occur if, and only if, herepays the full amount of such distribution prior to the earlier of (i) thefifth anniversary of the date of his reemployment with the Employer; or (ii) hisincurrence of  five consecutive****Periods of Severance**.**  Such restoration shall be made from currentlyforfeited amounts in accordance with subsection (a), or from additionalcontributions by the Employer.

 

(c)                                  Amountsforfeited in accordance with subsection (a) or Section 3.7 in aPlan Year shall be used to first restore future amounts required to be restoredin accordance with subsection (b) with respect to the Plan Year.  After such restoration, if any, is made, suchamounts shall be used to reduce future Discretionary Profit Sharing Account andMatching Contributions made by the Employer by which the former Participant wasemployed, or to defray administrative costs of the Plan as determined by theCompany.

 

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**ARTICLE X**

 

**WITHDRAWALS AND LOANS**

 

Section 10.1                                Withdrawals.  A Participant may request a withdrawal of upto the entire amount in his Accounts upon giving notice in the manner and atthe time prescribed by the Committee. All such withdrawals shall be subject to the following limitations:

 

(a)                                  Exceptas provided in subsection (b) below, no amounts may be withdrawn froma Participant’s Accounts unless he has attained age 59-1/2.  A Participant who has attained age 59-1/2may withdraw all or a portion of the his vested Accounts at any time, exclusiveof the amount of any outstanding loan under Section 10.3.

 

(b)                                 Ifthe Committee determines, on a uniform, nondiscriminatory basis, and on thebasis of all relevant facts and circumstances, that a withdrawal is requestedon account of an immediate and heavy financial need of the Participant, and thewithdrawal is necessary to satisfy such financial need, the Committee maypermit the Participant to withdraw the vested portion of his Accounts,excluding amounts contributed to the Qualified Employer Contribution Accountand the earnings in his Deferral Account accrued after December 31,1988.  A withdrawal request shall bedeemed to be on account of an immediate and heavy financial need if it is onaccount of:

 

(i)                                     expensesfor medical care described in section 213(d) of the Code incurred bythe Participant, his Spouse or dependents, as defined in section 152 ofthe Code, (or as the distribution is necessary for such persons to obtain suchmedical care);

 

(ii)                                  costsdirectly related to the purchase (excluding mortgage payments) of a principalresidence for the Participant;

 

(iii)                               paymentof tuition and related educational fees for the next 12 months ofpost-secondary education for the Participant, his Spouse or his dependents;

 

(iv)                              theneed to prevent the eviction of the Participant from his principal residence orforeclosure on the mortgage of the Participant’s principal residence; or

 

(v)                                 suchother circumstances as may be prescribed by the Secretary of the Treasury orhis delegate.

 

A distribution shall not be treated as necessary tosatisfy an immediate and heavy financial need of a Participant to the extentthe amount of the distribution is in excess of the amount required to relievethe financial need or to the extent such need may be satisfied from otherresources that are reasonably available to the Participant.  The amount of an immediate and heavy financialneed of a Participant shall include any amounts necessary to pay any federal,state or local income taxes or penalties reasonably anticipated to result fromthe distribution.  A Participant’s

 

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resources shall include those assets of his spouse andminor children that are reasonably available to the Participant.

 

(c)                                  Unlessotherwise provided in subsection (d), a Participant who requests awithdrawal pursuant to subsection (b) must certify, on a formprovided by the Committee, that his financial need cannot be relieved:

 

(i)                                     throughreimbursement or compensation by insurance or otherwise;

 

(ii)                                  byreasonable liquidation of the Participant’s assets to the extent suchliquidation would not itself cause an immediate and heavy financial need;

 

(iii)                               bycessation of contributions to the Plan; or

 

(iv)                              byother distributions from the Plan, by other distributions or loans from plansmaintained by any employer or by borrowing from commercial sources on reasonablecommercial terms.

 

(d)                                 Ifthe certification described in subsection (c) is not provided by theParticipant, a distribution will only be made on account of financial hardshipif:

 

(i)                                     theParticipant has obtained all other distributions and loans available under allplans maintained by the Employer or an Affiliated Company; and

 

(ii)                                  DeferralContributions and any other Employee contributions under all plans maintainedby the Employer or an Affiliated Company are suspended for 6 months followingthe receipt of the financial hardship withdrawal.  The Participant’s Deferral Contributionsunder Section 3.2 shall automatically resume following the required periodof suspension, unless the Participant elects otherwise.

 

Section 10.2                                Paymentof Withdrawal.  Any withdrawals shallbe taken proportionately from each Investment Fund in which the Participant’sAccounts are invested, unless the Committee, in a uniform and nondiscretionarymanner, permits Participants to select from which Investment Fund amounts are tobe withdrawn.  Amounts shall be paidwithin sixty (60) days of the effective date of the withdrawal.  Distribution shall be made in cash.  Withdrawals on account of financial hardshipshall be distributed first from the vested portion of the Participant’sMatching, Qualified Employer Contribution and Rollover Accounts and then, ifthere is financial need remaining, from the Participant’s Deferral Account.

 

Section 10.3                                Loans.

 

(a)                                  AParticipant who is an Employee of an Employer and any other Beneficiary who isa party-in-interest, as that term is defined in section 3(14) of ERISA,may request a loan.  Only two outstandingloans are permitted for each Participant or Beneficiary.

 

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(b)                                 Thereshall be no minimum loan amount.

 

(c)                                  Inno event shall the amount of the loan, when added to the outstanding balance ofall prior loans to such Participant or Beneficiary made under this Plan and allother qualified retirement plans sponsored by the Employer or an AffiliatedCompany, exceed the lesser of:

 

(i)                                     $50,000,reduced by the excess (if any) of (a) the highest outstanding balance ofall loans to the Participant under qualified retirement plans sponsored by theEmployer or an Affiliated Company during the 12-month period ending onthe day before the date on which such loan was made, over, (B) theoutstanding balance of all such loans immediately before the loan in questionwas made; or

 

(ii)                                  50%of the sum of the vested balances credited to his accounts under all definedcontribution plans sponsored by the Employer or an Affiliated Company.

 

Notwithstanding (ii) above,loans made to Participants and Beneficiaries under this Plan shall be furtherlimited to 50% of the vested balance credited to the Participant’s or Beneficiary’sAccounts.

 

(d)                                 Applicationsfor a loan must be submitted in the manner as prescribed by the Committee.  All such loans shall be subject to the finalapproval of the Committee, in its sole discretion, which discretion shall beexercised as to all eligible individuals on a reasonably equivalent basis;provided, however, that the Committee may make reasonable distinctions amongprospective borrowers on the basis of creditworthiness.  The Committee shall have the right to requireany applicant for a loan to secure the written consent of any party for whosebenefit there exists a Qualified Domestic Relations Order in respect to theParticipant’s interest under the Plan. Subject to considerations relating to a Participant’s or Beneficiary’screditworthiness and ability or deemed ability to repay the loan, loans shallnot be made available to Participants and Beneficiaries who are or were HighlyCompensated Employees in an amount greater than the amount available to otherParticipants or Beneficiaries.

 

(e)                                  Allloans shall be made upon such terms and conditions as the Committee shalldetermine, which shall include provisions for repayment and adequate security,and interest on the unpaid principal at a fixed or variable rate of interestcommensurate with the interest rates charged by persons in the business oflending money on a national basis for loans that would be made under similarcircumstances, as determined by the Committee from time to time.

 

(f)                                    Unlessotherwise specified, no loan shall have a term in excess of five years, exceptin the case of a loan used to acquire the Participant’s or Beneficiary’sprincipal residence, and the loan shall be repaid on a schedule providingfor level amortization determined by the Committee.

 

(g)                                 Themonthly payments due on all new loans made on or after January 1, 2001shall be repaid by the Participant through payroll withholding.  An outstanding loan shall

 

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be considered in default no later than 3 months followingthe date that payroll withholding ends or is insufficient to make the loanrepayment.  All loans made prior to January 1,2001 shall be repaid in accordance with the terms of the applicable loan note.

 

(h)                                 Ifa Participant who is repaying a loan through payroll withholding is granted aleave of absence that is for a period of not more than one year and duringwhich the Participant’s Compensation is insufficient to pay the required loaninstallment, payment of the loan may be waived during the leave of absence inaccordance with rules and procedures established by the Committee.  In the event of such a waiver, a Participantmay repay the amounts that were so waived upon return to active employment orthe loan may be reamortized over the remaining term of the loan, in accordancewith rules and procedures established by the Committee; provided, however,that, subject to the requirements of subsection (e), the loan may bereamortized over a longer period if the installments due after the leave ends(or, if earlier, after the first year of the leave) are not less than thoserequired under the terms of the original loan and the requirements of subsection (f) aremet.

 

(i)                                     Ifa Participant has a loan outstanding during a period of Qualified MilitaryService, the Committee may permit loan repayments to be suspended during theperiod of Qualified Military Service in accordance with Code section 414(u)and, if so suspended, upon the Participant’s reemployment by the Employerwithin the time during which the Participant’s right to reemployment isprotected by applicable law, the loan payment schedule shall resume withthe original maturity date of the promissory note adjusted to reflect suchperiod of Qualified Military Service.

 

(j)                                     Eachloan shall be considered a separate Investment Fund for purposes of Article V.  All loans shall be taken proportionately fromeach Investment Fund, in which the Participant’s or Beneficiary’s Accounts areinvested.

 

(k)                                  Ifany loan to a Participant is unpaid on the date that he or his Beneficiaryapplies for a distribution of the balance of his Accounts pursuant to Article XI,such loan, in all events and notwithstanding the terms thereof, shall becomeimmediately due and payable on such date, and the amount thereof, together withany accrued unpaid interest thereon, shall be deducted from the amount of anydistribution to which the Participant or his Beneficiary may become entitled.

 

(l)                                     Theconditions and terms of all such loans shall be applied in a uniform andconsistent manner with respect to all Participants.

 

(m)                               Aloan may be partially or fully prepaid at any time without penalty withadditional cash payments. Notwithstanding the foregoing, partial prepayment is not permitted forloans made on or after January 1, 2001.

 

(n)                                 Inthe event of a default, foreclosure on the promissory note will not occur untila distributable event occurs under Article XI.

 

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(o)                                 Aloan shall be considered in default if the Participant:

 

(i)                                     breaksa promise under the Promissory Note;

 

(ii)                                  makesa false or misleading statement in obtaining the loan; or

 

(iii)                               dies,becomes insolvent, makes assignment for the benefit of creditors, has an entryof judgement against him, has the whole or part of his property attached, orfiles a petition in bankruptcy or a petition in bankruptcy is filed against theParticipant.

 

Section 10.4                                Instructions.  All loans or withdrawal payments to aParticipant or Beneficiary under the Plan shall be made by the Trustee from theappropriate Account of the Participant only upon receipt of instructions,written or otherwise at the discretion of the Committee, furnished by theParticipant to the Trustee setting forth the amount of the loan or withdrawalpayment and the name and address of the recipient.  In making any such loan or withdrawal paymentunder the Plan, the Trustee shall be fully entitled to rely on the instructionsfurnished by the Participant.

 

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**ARTICLE XI**

 

**DISTRIBUTION OF BENEFITS**

 

Section 11.1                                LumpSum Distribution after Termination. If a Participant incurs a Severance from Service Date for any reasonother than death, the total amount in all of his Accounts shall bedistributable to him in one lump sum payment, unless the Participant elects, inthe manner and at the time provided by the Committee, to have suchdistributable amounts payable in another form prescribed by Section 11.2.  Distribution shall be made in cash.  Distribution shall normally be made as soonas administratively practicable following the Severance from Service Date, butno earlier than the Valuation Date coinciding with or immediately following hisSeverance from Service Date; provided however, that no distribution shall bemade to a Participant prior to his Normal Retirement Date unless theParticipant consents to the distribution in accordance with Section 11.4.  The Participant shall have the right to electa distribution of the entire value of his Accounts at any time after theSeverance from Service Date and before he reaches his Required DistributionDate.  If the Participant does notconsent to an immediate distribution under this Article XI upon hisSeverance from Service Date, the entire value of the Participant’s Accountsshall be paid to the Participant no later than his Required DistributionDate.  Notwithstanding the foregoing, ifthe total nonforfeitable amount credited to the Accounts of the terminatedParticipant does not exceed $5,000 at the time the distribution is to commence,the Committee shall distribute such amount in a lump sum without theParticipant’s consent as soon as administratively practicable following theannual date selected each year by the Committee on which the Committee willmake such distributions to all terminated Participants.  Notwithstanding the preceding sentence, anyeligible rollover distribution in excess of $1,000 but not in excess of $5,000made after the effective date of final regulations issued by the Department ofLabor with respect to section 401(a)(31)(B) of the Code shall betransferred directly to the individual retirement plan of a designated trusteeor insurer, unless the Participant elects to receive such distribution or rollsuch distribution over to an eligible retirement plan.  Any amounts not distributed under this Section shallcontinue to be subject to investment direction by the Participant in accordancewith the provisions of Article VII.

 

Section 11.2                                OptionalForm of Distribution.  TheParticipant may elect to have the balance of his Accounts distributed in equalinstallment payments on a monthly, quarterly, semiannual or annual basis over afixed period not to exceed the life expectancy of the Participant or thecombined life expectancies of the Participant and Beneficiary (determined atthe time the distribution commences) payable in cash.

 

Section 11.3                                ConsentRules.  The Committee shall furnishto each Participant who elects to receive a distribution from his Accountsprior to his Normal Retirement Age written information relating to theParticipant’s right to defer payment until Normal Retirement Age, the modes ofpayment available, the relative values of each form of payment, and theParticipant’s right to make a direct rollover as set forth in Section 11.10.  Such information must be supplied not lessthan thirty days nor more than ninety days prior to the benefit commencementdate.

 

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Notwithstanding the preceding sentence, a Participant’sbenefit commencement date may occur less than thirty days after suchinformation has been supplied to the Participant**,**provided that, after the Participant has received such information and has beenadvised of the right to a thirty day period to make a decision regarding thedistribution, the Participant affirmatively elects a distribution.

 

Section 11.4                                Distributionat Death.  If a Participant’semployment terminates by reason of his death, or he dies prior to receiving allinstallments due under Section 11.2, his Beneficiary shall be entitled toreceive a distribution in full of the total amount remaining in hisAccounts.  Such distribution shall be ina lump sum or, at the election of the Beneficiary, in the manner and at thetime provided by the Committee. Notwithstanding the foregoing, if the Beneficiaryis the Participant’s Spouse, distribution may be deferred, at the election ofthe Spouse, in the manner set forth in Section 11.1, but not to a datelater than what would have been the Participant’s Normal Retirement Date.  A Spouse may elect to receive the balance ofthe Participant’s Accounts in any form that would have been available to theParticipant on his Severance from Service Date.

 

Section 11.5                                WrittenInstructions.  All distributionsunder the Plan shall be made by the Trustee only upon receipt of writteninstructions furnished by the Committee setting forth the amount and manner ofthe distribution and the name and address of the recipient.  In making any such distribution under thePlan, the Trustee shall be fully entitled to rely on the instructions furnishedby the Committee and shall be under no duty to make any inquiry orinvestigation with respect thereto.

 

Section 11.6                                RequiredDistributions.  Distribution of aParticipant’s Account shall commence before the 60th day following the close ofthe Plan Year in which the Participant attains his Normal Retirement Age or hehas a Severance from Service Date, whichever occurs last.  Notwithstanding anything herein to thecontrary, a Participant’s interest in his Account(s) (a) shall be distributedto him no later than the Required Distribution Date, or (b) shall bedistributed beginning no later than the Required Distribution Date ininstallments pursuant to Section 11.2; provided, that the period overwhich distributions are made does not extend beyond the life expectancy of theParticipant or the joint life expectancies of the Participant and hisdesignated Beneficiary.  If distributionin the form of installments has commenced in accordance with clause (b) ofthe preceding sentence and the Participant dies before his entire interest hasbeen distributed to him, his remaining interest shall be distributed over theremaining number of installments payable as of the date of his death.  If the Participant dies before distributionof his Account has begun, the Participant’s entire interest shall bedistributed within five years after his death. The preceding sentence shall not apply, however, if any portion of theParticipant’s interest is payable to (or for the benefit of) a designatedBeneficiary over a period not extending beyond the life expectancy of suchBeneficiary and distribution begins not later than one year after the date ofthe Participant’s death or such later date permitted under applicableregulations.  If the designated Beneficiaryis the surviving Spouse of the Participant, distributions are not required tobegin earlier than the date on which the Participant would have attained hisNormal Retirement Date.  If the survivingSpouse dies before distributions begin, the five-year distribution requirementshall be applied as if the surviving Spouse were the Participant.

 

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Priorto January 1, 2003, all distributions shall be determined and made inaccordance with the regulations promulgated under section 401(a)(9) ofthe Code that were proposed in 1987, including the minimum distributionincidental benefit requirement of section 1.401(a)(9)-2 of theproposed regulations.  Effective January 1,2003, all distributions shall be determined and made in accordance with thefinal regulations promulgated under section 401(a)(9) of the Code,including the minimum distribution incidental benefit requirement of Q&A-1(d) ofsection 1.401(a)(9)-5 of the final regulations; provided, however,that, if a Participant’s benefit commencement date is prior to January 1,2003, the amount of any installment payments after January 1, 2003 shallnot be decreased by the application of the final regulations.

 

Section 11.7                                Designationof Beneficiary.  Each Participantshall, by written notice to the Committee, designate a Beneficiary orBeneficiaries to receive any payment to which such Participant may be entitledunder the Plan at the time of his death. If a Participant designates a Beneficiary (including any class ofBeneficiaries or any contingent Beneficiaries) other than or in addition to hisSpouse, the Spouse of the Participant must consent in writing to suchBeneficiary designation on a form provided by the Committee, which consentshall be irrevocable.  Such consent shallstate the specific non-Spouse Beneficiary (including any class of Beneficiariesor any contingent Beneficiaries) who will receive the benefit, shallacknowledge the financial effect of the election on the Spouse’s right tobenefits under the Plan, and shall be witnessed by the Secretary of theCommittee, a Plan representative designated by the Committee or a notarypublic.  The spousal consent requirementmay be waived if it is established, to the satisfaction of the Committee, thatthe consent may not be obtained because there is no Spouse, because the Spousecannot be located after reasonable efforts have been made, or because othercircumstances exist to excuse spousal consent under applicableregulations.  Any Beneficiary designationmade by a Participant which does not meet the requirements of this Section shallbe deemed null and void.  The Participantshall have the right to change a Beneficiary designation or any subsequentBeneficiary    subject to the spousalconsent provisions of this Section.  Inthe absence of an effective Beneficiary designation, any amounts distributableafter the death of a Participant shall be paid to the Participant’s Spouse or,if there is no Spouse, to the Participant’s estate.

 

Section 11.8                                ClaimsProcedure.

 

(a)                                  Inthe event that the Committee denies, in whole or in part, a claim for benefitsby a Participant or his beneficiary, the Committee shall furnish notice of thedenial to the claimant, setting forth:

 

(i)                                     thespecific reasons for the denial;

 

(ii)                                  specificreference to the pertinent Plan provisions on which the denial is based;

 

(iii)                               adescription of any additional information necessary for the claimant to perfectthe claim and an explanation of why such information is necessary; and

 

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(iv)                              theprocedure for the appeal of such denial and the time limits applicable to suchprocedures, including a statement of the claimant’s right to bring a civilaction under section 502(a) of ERISA following an adverse benefitdetermination on review.

 

If the claim does not involve disability benefits, thenotice described above shall be forwarded to the claimant within ninety (90)days of the Committee’s receipt of the claim; provided, however, that inspecial circumstances the Committee may extend the response period for up to anadditional ninety (90) days, provided that the Committee so notifies theclaimant in writing and specifies the reason or reasons for such extension.

 

If the claim involves disability benefits, the noticedescribed above shall be forwarded to the claimant within forty-five (45) daysof the Committee’s receipt of the claim; provided, however, that in specialcircumstances the Committee may extend the response period for up to anadditional sixty (60) days.  If specialcircumstances require an extension of time for processing the claim, a writtennotice of an extension of up to thirty (30) days will be provided to theclaimant before the end of the initial forty-five (45) day period that specifiesthe reason or reasons for such extension. If, prior to the end of the initial thirty (30) day extension, theCommittee determines that a decision cannot be rendered within the extensionperiod, the determination period may be extended for up to an additional thirty(30) days if the claimant is notified of the second extension before the end ofthe initial extension.

 

(b)                                 Withinsixty (60) days of receipt of a notice of claim denial that does not involvedisability benefits, a claimant or his duly authorized representative maypetition the Committee in writing for a full and fair review of thedenial.  In connection with any suchappeal, the claimant or his duly authorized representative shall be provided,upon request and free of charge, reasonable access to, and copies of, alldocuments, records and other information relevant to the claim for benefits andshall have the opportunity to submit issues and comments in writing to theCommittee.  The Committee shall reviewthe denial and communicate its decision to the claimant in writing within sixty(60) days of receipt of the petition; provided, however, that the Committee mayextend the response period in special circumstances for up to an additionalsixty (60) days.  Written notice of theextension shall be sent to the claimant prior to the commencement of theextension.

 

(c)                                  Withinone-hundred and eighty (180) days of receipt of a notice of claim denial thatinvolves disability benefits, a claimant or his duly authorized representativemay petition the Committee in writing for a full and fair review of thedenial.  In connection with any suchappeal, the claimant or his duly authorized representative shall be provided,upon request and free of charge, reasonable access to, and copies of, alldocuments, records and other information relevant to the claim for benefits andshall have the opportunity to submit issues and comments in writing to theCommittee.  The Committee shall reviewthe denial and communicate its decision and the reasons therefor to the claimantin writing within forty-five (45) days of receipt of the petition; provided,however, that the Committee may extend the response period in specialcircumstances for up to an additional forty-five (45) days.  Written notice of the extension shall be sentto the claimant prior to the commencement of the extension.

 

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(d)                                 TheCommittee shall furnish notice of its final decision on the appeal madepursuant to subsection (b) or (c) above, as applicable, to theclaimant in writing, setting forth:

 

(i)                                     thespecific reasons for the decision,

 

(ii)                                  specificreferences to the pertinent Plan provisions on which the decision is based,

 

(iii)                               adescription of the claimant’s right to, upon request and free of charge, reasonableaccess to, and copies of, all documents, records and other information relevantto the claim for benefits, and

 

(iv)                              astatement of the claimant’s right to bring a civil action under section 502(a) ofERISA.

 

Section 11.9                                Rightsof Alternate Payees.

 

(a)                                  General.  Except as otherwise provided in this Section 11.10,an Alternate Payee shall have no rights to a Participant’s Accounts and shallhave no rights under this Plan other than those rights specifically granted tothe Alternate Payee pursuant to a Qualified Domestic Relations Order.  Notwithstanding the foregoing, an AlternatePayee shall have the right to make a claim for any benefits awarded to theAlternate Payee pursuant to a Qualified Domestic Relations Order, as providedin Section 11.9.  Any interest of anAlternate Payee in the Accounts of a Participant, other than an interestpayable solely upon the Participant’s death pursuant to a Qualified DomesticRelations Order which provides that the Alternate Payee shall be treated as theParticipant’s Beneficiary, shall be separately accounted for by the Trustee inthe name and for the benefit of the Alternate Payee.

 

(b)                                 Distribution.

 

(i)                                     Notwithstandinganything in this Plan to the contrary, a Qualified Domestic Relations Order mayprovide that any portion of a Participant’s Accounts payable to an AlternatePayee shall be distributed immediately or at any other time specified in theorder, but no later than the latest date Plan benefits would be payable to theParticipant.  If the order does notspecify the time at which benefits shall be payable to the Alternate Payee, theAlternate Payee may elect to have benefits payable in accordance with Section 11.1as of the Participant’s Severance from Service Date or Required DistributionDate, if earlier, or in accordance with Section 11.5, but as of theAlternate Payee’s death; provided, however, that in the event the amountpayable to the Alternate Payee under the Qualified Domestic Relations Orderdoes not exceed $5,000, such amount shall be paid to the Alternate Payee in alump sum as soon as practicable following the Committee’s receipt of the orderand verification of its status as a Qualified Domestic Relations Order.

 

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(ii)                                  Exceptas provided in paragraph (i), if a Qualified Domestic Relations Order does notprovide the form of distribution of benefits payable to an Alternate Payee, theAlternate Payee shall have the right to elect distribution in any form providedunder Article XI, except that benefits to be paid in installments may notbe paid over a period exceeding the life expectancy of the Alternate Payee,determined as of the date of the first distribution.

 

(iii)                               Ifthe Qualified Domestic Relations Order does not specify the Participant’s Accounts,or Investment Funds in which such Accounts are invested, from which amountsshall be paid to, or separately accounted for, an Alternate Payee, such amountsshall be distributed, or segregated, from the Participant’s Accounts, and theInvestment Funds in which such Accounts are invested, on a pro rata basis.

 

(c)                                  Withdrawals.An Alternate Payee shall not be permitted to make any withdrawals under Article X.

 

(d)                                 DeathBenefits.  Unless a QualifiedDomestic Relations Order provides to the contrary, an Alternate Payee shallhave the right to designate a Beneficiary in the same manner as provided in Section 11.8with respect to a Participant, (except that no spousal consent shall berequired), who shall receive benefits payable to an Alternate Payee which havenot been distributed at the time of the Alternate Payee’s death.  If the Alternate Payee does not designate aBeneficiary, or if the Beneficiary predeceases the Alternate Payee, benefitspayable to the Alternate Payee which have not been distributed shall be paid tothe Alternate Payee’s estate.

 

(e)                                  InvestmentDirection.  An Alternate Payee shallhave the right to direct investment of any portion of a Participant’s Accountspayable to the Alternate Payee under such order in the same manner as providedin Section 6.4 with respect to a Participant, which amounts shall beseparately accounted for by the Trustee in the Alternate Payee’s name.

 

Section 11.10                          DirectRollovers.

 

(a)                                  Notwithstandingany provision of the Plan to the contrary that would otherwise limit adistributee’s election under this Section 11.10, a distributee may elect,at the time and in the manner prescribed by the Committee, to have any portionof an eligible rollover distribution paid directly to an eligible rolloverplan, as defined below, specified by the distributee in a direct rollover.

 

(b)                                 Definitions.

 

(i)                                     “EligibleRollover Distribution.”  An eligiblerollover distribution is any distribution of all or any portion of the balanceto the credit of the distributee, except that an eligible rollover distributiondoes not include: any distribution that is one of a series of substantiallyequal periodic payment (not less frequently than annually) made for the life(or life expectancy) of the distributee or the joint lives (or joint lifeexpectancies) of the distributee and the distributee’s designated beneficiary,or for a specified period of ten years or more; any

 

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distribution to the extent such distribution isrequired under section 401(a)(9) of the Code; and any hardshipwithdrawal.

 

(ii)                                  “EligibleRollover Plan.” An eligible rollover plan shall mean (1) an individualretirement account described in section 408(a) of the Code, (2) anindividual retirement annuity described in section 408(b) of the Code(other than an endowment contract), (3) an annuity plan described in section 403(a) ofthe Code, (4) a qualified plan the terms of which permit the acceptance ofrollover distributions, (5) an eligible deferred compensation plan describedin section 457(b) of the Code that is maintained by an eligibleemployer described in section 457(e)(i)(A) of the Code and that shallseparately account for the distribution, or (6) an annuity contractdescribed in section 403(b) of the Code; provided, however, that,with respect to a distribution (or portion of a distribution) consisting ofafter-tax employee contributions, “eligible rollover plan” shall mean a plandescribed in clause (4) that separately accounts for such amounts or aplan described in clause (1) or (2).

 

(iii)                               “Distributee.”  A distributee includes an Employee or formerEmployee.  In addition, the Employee’s orformer Employee’s surviving Spouse and the Employee’s or former Employee Spouseor former Spouse who is the alternate payee under a Qualified DomesticRelations Order, as defined in section 414(p) of the Code, aredistributees with regard to the interest of the Spouse or former Spouse.

 

(iv)                              “DirectRollover.”  A direct rollover is apayment by the plan to the eligible rollover plan specified by the distributee.

 

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**ARTICLE XII**

 

**SPECIAL PROVISIONS FOR TOP-HEAVYPLANS**

 

Section 12.1                                GeneralRule.  Notwithstanding any provisionin the Plan to the contrary, for any Plan Year in which the Plan is determinedto be a Top-Heavy Plan, the provisions of this Article XII shall becomeeffective.

 

Section 12.2                                Determinationof Top-Heavy Status.  The Plan shallbe considered a Top-Heavy Plan for the Plan Year, if, as of the last day of thefirst Plan Year and thereafter, as of the last day of the preceding Plan Year(the “Determination Date”):

 

(a)                                  thevalue of the sum of all Accounts of Participants who are Key Employees (asdefined below) exceeds 60% of the sum of all Accounts of all Participants, or

 

(b)                                 thePlan is part of an Aggregation Group and such Aggregation Group is determinedto be a Top-Heavy Group (as defined in section 416(g)(2)(B) of theCode).

 

In determining the value of a Participant’s Accounts,such Accounts shall be valued as of the most recent Valuation Date within thetwelve-month period ending on the applicable Determination Date.  The value of the Accounts shall be increasedby the aggregate distributions made with respect to such Employee under thePlan during the 1-year period ending on the Determination Date plus theaggregate in-service distributions made with respect to such Employee under thePlan during the 5-year period ending on the Determination Date.

 

In determining the above Top-Heavy ratio, the accountbalances of an Employee (a) who is a Non-Key Employee (defined forpurposes of this Article as an Employee who is not a Key Employee) but whowas a Key Employee in any prior Plan Year, or (b) who has not performedservices for the Employer maintaining the Plan at any time during the 1-yearperiod ending on the applicable Determination Date are disregarded.

 

A Key Employee is defined as any Employee, formerEmployee or the Beneficiary of such Employee who, at any time during the PlanYear is:  (a) an officer of theEmployer having annual 415 Compensation greater than $130,000 or such otheramount as may be in effect under Code section 416(i)(1)(A)(i) for anyPlan Year; (b) a five percent (5%) owner of the Employer; or (c) aone-percent (1%) owner of the Employer having annual 415 Compensation from theEmployer of more than one-hundred-fifty-thousand dollars ($150,000).

 

For purposes of this Section, Aggregation Group means (a) eachplan of the Employer or an Affiliated Company in which a Key Employeeparticipates, including any terminated plans which are maintained within thefive year period ending on the applicable Determination Date, and (b) eachother plan of the Employer or an Affiliated Company which enables such plan tomeet the requirements of section 401(a)(4) or 410 of the Code.  The foregoing notwithstanding, the Employermay treat any plan maintained by the Employer or an Affiliated Company notrequired to be included in the Aggregation Group as being part of such group ifsuch group

 

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would continue to meet the requirements of sections401(a)(4) and 410 of the Code with such plan being taken into account.

 

Section 12.3                                MinimumContributions.  For any Plan Year inwhich the Plan is determined to be a Top-Heavy Plan pursuant to Section 12.2,the Matching Contributions for such Plan Year for each Participant who is a Non-KeyEmployee shall not be less than the lesser of

 

(a)                                  3%of the Participant’s 415 Compensation for such Plan Year, or

 

(b)                                 thepercentage at which Matching Contributions and Deferral Contributions are madeor are required to be made under the Plan for the Plan Year for the KeyEmployee for whom such percentage is the highest, excluding any electivedeferrals made pursuant to Section 414(v) of the Code.  Notwithstanding the foregoing, if aParticipant is also participating in another defined contribution planmaintained by the Employer, the minimum contribution hereunder may be reducedin accordance with regulations issued under section 416(f) of theCode.  If a Participant is alsoparticipating in a defined benefit plan maintained by the Employer, ‘5%’ shallbe substituted for ‘3%’ in paragraph (a) of this Section.

 

The Matching Contributions referred to above shall beprovided to each Non-Key Employee who is a Participant and who has notseparated from service at the end of the Plan Year, regardless of such Employee’snumber of Hours of Service, Compensation, or whether such Employee had made anycontribution to the Plan.

 

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**ARTICLE XIII**

 

**THE ADMINISTRATIVE COMMITTEE**

 

Section 13.1                                Appointmentof Committee.  The Board shallappoint a Committee of not less than three persons who shall have authority tocontrol and manage the operation and administration of the Plan, but shall haveno authority or duty to manage and control the assets of the Fund except as isotherwise specifically provided herein. Such Committee shall be the Administrator of the Plan for purposes ofERISA.

 

Section 13.2                                Interpretationof Plan Provisions.  The Committeeshall have the exclusive right to construe the Plan, to make factualdeterminations, and to determine any question which may arise in connectionwith its application or administration. Its decisions or actions in respect thereof shall be conclusive andbinding upon the Employer and upon any and all Participants, theirbeneficiaries and their respective heirs, distributees, executors,administrators and assigns; subject, however, to the right of the Participantor his beneficiary to file a written claim under the provisions of Section 11.7.  The Committee shall have the responsibilityto inform the Board of any changes that it deems necessary to be made to thePlan to maintain compliance with current law or regulation, to correct anyerrors or omissions in the Plan document, or to facilitate the administrationof the Plan.

 

Section 13.3                                CommitteeRecords.  The Committee shallmaintain or cause to be maintained such accounts and records as shall benecessary and appropriate to reflect the administration of the Plan and theinterests of all Participants and their beneficiaries.  Any Participant or his beneficiary shall beentitled to examine at any reasonable time any such accounts and recordsdirectly pertaining to him or his interest.

 

Section 13.4                                Allocationof Duties.  The Committee shall electfrom its number a Chairman and a Secretary. The Chairman shall preside at all meetings, and the Secretary shall keepwritten minutes of the meeting and other actions of the Committee.  In addition, the Committee may:

 

(a)                                  appointfrom its number such subcommittees with such powers as the Committee shalldetermine;

 

(b)                                 authorizeone of its number to execute and deliver any instrument on the Committee’sbehalf;

 

(c)                                  employaccounting, legal, medical, and investment counsel and such clerical and otherservices as it deems necessary or appropriate in carrying out its duties underthe Plan;

 

(d)                                 allocatefiduciary responsibilities (other than Trustee responsibilities except to theextent that the Plan or the Trust Agreement specifically permit or allow the

 

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Committee to direct the Trustee) among themselves oramong persons (including corporate persons) named by them in accordance with thefollowing provisions:

 

(i)                                     Fiduciaryresponsibilities may be allocated by the Committee by naming in writing thefiduciary to whom the responsibility is allocated, with a description of theresponsibility and an outline of the duties involved.

 

(ii)                                  Thefiduciary so named shall indicate his acceptance of the responsibility byexecuting the written instrument naming him and a copy of the executed documentshall be attached to the Plan.

 

(iii)                               Forpurposes of this subsection, a Trustee responsibility is a responsibility tomanage or control the assets of the Plan.

 

Section 13.5                                Compensation.  No Committee member shall be entitled tocompensation for his services as such, but shall be entitled to be reimbursedby the Company for any and all reasonable expenses actually incurred by him inconnection with such services.  All fees,salaries, and other costs of providing services to the Committee shall be paidby the Fund, unless, in its discretion, the Company determines to pay suchexpenses.

 

Section 13.6                                Meetings.  The Committee shall hold an annual meetingand such special meetings as any member may call upon due notice.  A quorum shall consist of a majority of themembership, and all actions shall be taken pursuant to a majority vote of thosemembers present.

 

Section 13.7                                CommitteeRules.  Subject to the limitationscontained herein, the Committee may from time to time establish such rules forthe transaction of business and for the administration of the Plan as it deemsnecessary or desirable; provided, the same shall not conflict with any of theprovisions of the Plan.

 

Section 13.8                                Indemnification.  The Company agrees to indemnify each memberof the Committee against any and all claims, losses, damage, expense andliability arising from his responsibilities in connection with the Plan, unlesssame has been adjudged to be due to his own gross negligence or willfulmisconduct.

 

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**ARTICLE XIV**

 

**AMENDMENTS, TERMINATIONS ANDLIABILITIES**

 

Section 14.1                                Rightto Amend Reserved.  The provisions ofthis Plan may be amended at any time and from time to time by action of theBoard; provided, that no amendment shall be effective unless the Plan, as soamended, shall continue to be for the exclusive benefit of Participants, theirbeneficiaries and Alternate Payees.  Noamendment shall deprive any Participant or beneficiary of any of the benefitsto which he is entitled under this Plan with respect to contributionspreviously made, nor shall any amendment eliminate or reduce a protectedbenefit as described in section 411(d)(6) of the Code except asprovided in section 412(c)(8) of the Code or in applicableregulations.  No Plan amendment shalldecrease the vested interest in any Participant’s Accounts, nor shall anyamendment change any vesting schedule under the Plan unless eachParticipant having at least three Years of Service at the end of the perioddescribed in this sentence is permitted to elect, within a period beginning onthe date such amendment is adopted and ending 60 days after the latest of: (a) theday the amendment is adopted, (b) the day the amendment becomes effective,or (c) the day the Participant is issued written notice of the amendment,to have his nonforfeitable percentage computed under the Plan without regard tosuch amendment.  Notwithstanding theforegoing, any modification or amendment of the Plan may be made retroactively,if necessary or appropriate to qualify or maintain the Plan as a plan meetingthe requirements of the Code and ERISA, as now in effect or hereafter amended,or any other provisions of law, as now in effect or hereafter amended oradopted, and any regulation issued thereunder.

 

Section 14.2                                Rightto Terminate Reserved.  The Plan maybe terminated or contributions thereunder may be discontinued at any time byaction of the Board, if the Board shall determine that action is necessary ordesirable.  The Company shall then decidewhether to terminate the Trust and make distributions in accordance with thePlan.  Following any such discontinuance,no new Participants shall be eligible for coverage under the Plan, and theEmployer shall make no further contributions. Upon any complete or partial termination or discontinuance ofcontributions, the interest of each affected Participant under the Plan shallbe nonforfeitable.

 

Section 14.3                                Liabilityof Employer.  The Employer shall haveno liability in respect of payment under the Plan, except to pay over to theTrustee the Contributions provided for in Sections 3.2, 3.3, 3.4 and 3.15, andeach Participant and/or his Beneficiary shall look solely to the Fund fordistribution of benefits under the Plan.

 

Section 14.4                                SuccessorEmployers.  Unless this Plan besooner terminated, a successor employer of the Employees of the Employer maycontinue this Plan and Trust  by joiningwith the Trustee in executing an appropriate supplemental agreement.  Such successor employer shall IPSO FACTOsucceed to all the rights, powers, and duties of the Employer hereunder.  In such event, the Plan shall not be deemedto have terminated and the employment of any Employee who is continued in theemploy of such successor Employer shall be deemed not to have been terminatedor severed for any purposes hereunder.

 

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**ARTICLE XV**

 

**MISCELLANEOUS**

 

Section 15.1                                PlanNot an Employment Contract.  Theestablishment of the Plan shall not be held or construed to confer upon anyperson any legal right to be continued as an Employee, and the Employerexpressly reserves the right to discharge any Employee, and to adjust hiscompensation, whenever the interest of the Employer, in its sole judgment, mayso require.

 

Section 15.2                                BenefitsNot Assignable.  Except with respectto federal tax liens, federal income tax withholding, withdrawals and loansunder Article X, and offsets for judgements and settlements described in section 401(a)(13)(C) ofthe Code, no amount payable under the Plan shall be subject in any manner toanticipation, alienation, sale, transfer, assignment, pledge, encumbrance,charge or seizure; and no such amount shall be in any manner subject to thedebts, contracts, liabilities, engagements or torts of any Participant or hisbeneficiary.  Notwithstanding theforegoing, the Committee shall direct the Trustee to comply with a QualifiedDomestic Relations Order.  Upon receiptof any judgment, decree or order (including approval of a property settlementagreement) relating to the provision of payment by the Plan to an AlternatePayee pursuant to a state domestic relations law, the Committee shall promptlynotify the affected Participant and any Alternate Payee of the receipt of suchjudgment, decree or order and shall notify the affected Participant and anyAlternate Payee of the Committee’s procedure for determining whether or not thejudgment, decree or order is a Qualified Domestic Relations Order.  The Committee shall establish a procedure todetermine the status of a judgment, decree or order as a Qualified DomesticRelations Order and to administer Plan distributions in accordance withQualified Domestic Relations Orders. Such procedure shall be in writing, shall include a provision specifyingthe notification requirements enumerated above, shall permit an Alternate Payeeto designate a representative for receipt of communications from the Committeeand shall include such other provisions as the Committee shall determine,including provisions required under applicable regulations.

 

Section 15.3                                Incompetenceof Participant.  If a Participant orbeneficiary entitled to receive any benefits hereunder is a minor or isadjudged to be legally incapable of giving valid receipt and discharge for suchbenefits, such benefits shall be paid to such persons as the Committee shalldesignate or to the duly appointed guardian. Such payment shall, to the extent made, be deemed a complete dischargeof any liability for such payment under the Plan.

 

Section 15.4                                MergerWith Another Plan.  This Plan shallnot merge or consolidate with, or transfer its assets or liabilities to, anyother plan, unless each Participant would (if such other plan then terminated)receive a benefit immediately after the merger, consolidation, or transferwhich is equal to or greater than the benefit he would have been entitled toreceive immediately before the merger, consolidation or transfer (if the Planhad then terminated).

 

Section 15.5                                Gender.  The masculine whenever used herein shallinclude the feminine.

 

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Section 15.6                                ControllingLaws.  Construction, validity andadministration of this Plan shall be governed by the laws of the State ofDelaware except to the extent that such laws have been specifically supersededby ERISA.

 

IN WITNESS WHEREOF, and as evidence of the adoption ofthis instrument as the Plan, the duly authorized officer of the Company hascaused the Plan to be executed this 20 day of December, 2002.

 
| ATTEST:           | KERZNER INTERNATIONAL NORTH  AMERICA, INC. |
|-------------------|--------------------------------------------|
|              |                                       |
|              |                                       |
| /s/ Charles Adamo |                                       | /s/ John Allison |   |
|              | Name: John Allison                         |
|              | Title: Chief Executive Officer             |
|                   |                                            |  |  |

 

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**APPENDIX A**

 

 

**PARTICIPATING EMPLOYERS**

 
| Kerzner International  North America, Inc.                                                    |
|----------------------------------------------------------------------------------------------------|
| ISS, Inc.                                                                                     |
| PIV, Inc.                                                                                     |
| Kerzner International  Development Group, Inc.                                                |
| Kerzner International  Marketing, Inc.                                                        |
| Kerzner International  Nevada, Inc.                                                           |
| Kerzner International  New York, Inc.                                                         |
| Kerzner International  Resorts, Inc.                                                          |
| Kerzner International  Development Services, Inc. —  effective October 1, 2002 |
| Kerzner International  California, Inc. – effective January 1, 2003                 |
| Kerzner International  Management Services, Inc. – effective October 1, 2002        |

 

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