exv10w4



 





Exhibit 10.4




FORESTAR SAVINGS AND RETIREMENT PLAN




Effective December 28, 2007





 









 








TABLE
OF CONTENTS




	 	 	 	 	 	 	 	 	 
	ARTICLE 1 DEFINITIONS	 	 	1	 
	 
	 	 	 	 	 	 	 	 
	 
	 	1.1	 	“Accounts”	 	 	1	 
	 
	 	 	 	 	 	 	 	 
	 
	 	1.2	 	“Account Balance”	 	 	1	 
	 
	 	 	 	 	 	 	 	 
	 
	 	1.3	 	“Affiliate Plan”	 	 	1	 
	 
	 	 	 	 	 	 	 	 
	 
	 	1.4	 	“After Tax Contributions”	 	 	1	 
	 
	 	 	 	 	 	 	 	 
	 
	 	1.5	 	“After Tax Contributions Account”	 	 	2	 
	 
	 	 	 	 	 	 	 	 
	 
	 	1.6	 	“Approved Absence”	 	 	2	 
	 
	 	 	 	 	 	 	 	 
	 
	 	1.7	 	“Automatic Contribution Arrangement”	 	 	2	 
	 
	 	 	 	 	 	 	 	 
	 
	 	1.8	 	“Automatic Contribution Employee”	 	 	2	 
	 
	 	 	 	 	 	 	 	 
	 
	 	1.9	 	“Automatic Contribution Participant”	 	 	3	 
	 
	 	 	 	 	 	 	 	 
	 
	 	1.10	 	“Automatic Increase Participant”	 	 	3	 
	 
	 	 	 	 	 	 	 	 
	 
	 	1.11	 	“Average Contribution Percentage”	 	 	3	 
	 
	 	 	 	 	 	 	 	 
	 
	 	1.12	 	“Before Tax Contributions”	 	 	5	 
	 
	 	 	 	 	 	 	 	 
	 
	 	1.13	 	“Before Tax Contributions Account”	 	 	5	 
	 
	 	 	 	 	 	 	 	 
	 
	 	1.14	 	“Borrower”	 	 	5	 
	 
	 	 	 	 	 	 	 	 
	 
	 	1.15	 	“Code”	 	 	5	 
	 
	 	 	 	 	 	 	 	 
	 
	 	1.16	 	“Company”	 	 	5	 
	 
	 	 	 	 	 	 	 	 
	 
	 	1.17	 	“Company Retirement Contributions”	 	 	5	 
	 
	 	 	 	 	 	 	 	 
	 
	 	1.18	 	“Company Retirement Contributions Account”	 	 	5	 
	 
	 	 	 	 	 	 	 	 
	 
	 	1.19	 	“Compensation”	 	 	5	 
	 
	 	 	 	 	 	 	 	 
	 
	 	1.20	 	“Contributing Participant”	 	 	6	 
	 
	 	 	 	 	 	 	 	 
	 
	 	1.21	 	“Designated Enrollment Date”	 	 	6	 
	 
	 	 	 	 	 	 	 	 
	 
	 	1.22	 	“Distribution Event”	 	 	6	 
	 
	 	 	 	 	 	 	 	 





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	 	1.23	 	“Eligible Borrower”	 	 	7	 
	 
	 	 	 	 	 	 	 	 
	 
	 	1.24	 	“Employee”	 	 	7	 
	 
	 	 	 	 	 	 	 	 
	 
	 	1.25	 	“Employee Matters Agreement”	 	 	7	 
	 
	 	 	 	 	 	 	 	 
	 
	 	1.26	 	“Employer”	 	 	7	 
	 
	 	 	 	 	 	 	 	 
	 
	 	1.27	 	“Employer Matching Contributions”	 	 	7	 
	 
	 	 	 	 	 	 	 	 
	 
	 	1.28	 	“Employer Matching Contributions Account”	 	 	8	 
	 
	 	 	 	 	 	 	 	 
	 
	 	1.29	 	“ERISA”	 	 	8	 
	 
	 	 	 	 	 	 	 	 
	 
	 	1.30	 	“Funds”	 	 	8	 
	 
	 	 	 	 	 	 	 	 
	 
	 	1.31	 	“Group”	 	 	8	 
	 
	 	 	 	 	 	 	 	 
	 
	 	1.32	 	“Guaranty Plan”	 	 	8	 
	 
	 	 	 	 	 	 	 	 
	 
	 	1.33	 	“Highly Compensated Employee”	 	 	8	 
	 
	 	 	 	 	 	 	 	 
	 
	 	1.34	 	“Hour of Service” means:	 	 	9	 
	 
	 	 	 	 	 	 	 	 
	 
	 	1.35	 	“Inactive Participant”	 	 	10	 
	 
	 	 	 	 	 	 	 	 
	 
	 	1.36	 	“Investment Committee”	 	 	10	 
	 
	 	 	 	 	 	 	 	 
	 
	 	1.37	 	“Loan”	 	 	10	 
	 
	 	 	 	 	 	 	 	 
	 
	 	1.38	 	“Merged Plan”	 	 	10	 
	 
	 	 	 	 	 	 	 	 
	 
	 	1.39	 	“Merger Date”	 	 	10	 
	 
	 	 	 	 	 	 	 	 
	 
	 	1.40	 	“Months of Participation”	 	 	10	 
	 
	 	 	 	 	 	 	 	 
	 
	 	1.41	 	“Non-Highly Compensated Employee”	 	 	11	 
	 
	 	 	 	 	 	 	 	 
	 
	 	1.42	 	“Non-Residential Loan”	 	 	11	 
	 
	 	 	 	 	 	 	 	 
	 
	 	1.43	 	“Notice”	 	 	11	 
	 
	 	 	 	 	 	 	 	 
	 
	 	1.44	 	“One Year Break in Service”	 	 	11	 
	 
	 	 	 	 	 	 	 	 
	 
	 	1.45	 	“Participant”	 	 	11	 
	 
	 	 	 	 	 	 	 	 
	 
	 	1.46	 	“Participant Loan Subaccount”	 	 	12	 
	 
	 	 	 	 	 	 	 	 
	 
	 	1.47	 	“Payroll Savings Contributions”	 	 	12	 
	 
	 	 	 	 	 	 	 	 





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	 	1.48	 	“Period of Separation”	 	 	12	 
	 
	 	 	 	 	 	 	 	 
	 
	 	1.49	 	“Period of Service” means:	 	 	12	 
	 
	 	 	 	 	 	 	 	 
	 
	 	1.50	 	“Period of Severance”	 	 	14	 
	 
	 	 	 	 	 	 	 	 
	 
	 	1.51	 	“Plan”	 	 	14	 
	 
	 	 	 	 	 	 	 	 
	 
	 	1.52	 	“Plan Administrator”	 	 	14	 
	 
	 	 	 	 	 	 	 	 
	 
	 	1.53	 	“Plan Year”	 	 	15	 
	 
	 	 	 	 	 	 	 	 
	 
	 	1.54	 	“Profit Sharing Contributions”	 	 	15	 
	 
	 	 	 	 	 	 	 	 
	 
	 	1.55	 	“Profit Sharing Contributions Account”	 	 	15	 
	 
	 	 	 	 	 	 	 	 
	 
	 	1.56	 	“Qualified Nonelective Contributions”	 	 	15	 
	 
	 	 	 	 	 	 	 	 
	 
	 	1.57	 	“Qualified Nonelective Contributions Account”	 	 	15	 
	 
	 	 	 	 	 	 	 	 
	 
	 	1.58	 	“Required Beginning Date”	 	 	15	 
	 
	 	 	 	 	 	 	 	 
	 
	 	1.59	 	“Residential Loan”	 	 	16	 
	 
	 	 	 	 	 	 	 	 
	 
	 	1.60	 	“Rollover Account”	 	 	16	 
	 
	 	 	 	 	 	 	 	 
	 
	 	1.61	 	“Rollover Contributions”	 	 	16	 
	 
	 	 	 	 	 	 	 	 
	 
	 	1.62	 	“Section 414(n) Leased Employee”	 	 	16	 
	 
	 	 	 	 	 	 	 	 
	 
	 	1.63	 	“Section 414 Compensation”	 	 	16	 
	 
	 	 	 	 	 	 	 	 
	 
	 	1.64	 	“Section 415 Compensation” means	 	 	17	 
	 
	 	 	 	 	 	 	 	 
	 
	 	1.65	 	“Severance from Service Date”	 	 	18	 
	 
	 	 	 	 	 	 	 	 
	 
	 	1.66	 	“Subaccounts”	 	 	19	 
	 
	 	 	 	 	 	 	 	 
	 
	 	1.67	 	“Temple-Inland Savings Plan”	 	 	19	 
	 
	 	 	 	 	 	 	 	 
	 
	 	1.68	 	“Trust Agreement”	 	 	19	 
	 
	 	 	 	 	 	 	 	 
	 
	 	1.69	 	“Trust Fund”	 	 	19	 
	 
	 	 	 	 	 	 	 	 
	 
	 	1.70	 	“Trustee”	 	 	19	 
	 
	 	 	 	 	 	 	 	 
	 
	 	1.71	 	“Valuation Date”	 	 	19	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE 2 ELIGIBILITY AND PARTICIPATION	 	 	20	 






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	 	2.1	 	Participation	 	 	20	 
	 
	 	 	 	 	 	 	 	 
	 
	 	2.2	 	Enrollment as a Contributing Participant	 	 	23	 
	 
	 	 	 	 	 	 	 	 
	 
	 	2.3	 	No Participation by Non-Covered Employees	 	 	25	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE 3 PARTICIPANT CONTRIBUTIONS	 	 	26	 
	 
	 	 	 	 	 	 	 	 
	 
	 	3.1	 	Payroll Savings Contributions	 	 	26	 
	 
	 	 	 	 	 	 	 	 
	 
	 	3.2	 	Suspension of Contributions	 	 	27	 
	 
	 	 	 	 	 	 	 	 
	 
	 	3.3	 	Changes in Contribution Elections	 	 	27	 
	 
	 	 	 	 	 	 	 	 
	 
	 	3.4	 	Payment of Contributions	 	 	27	 
	 
	 	 	 	 	 	 	 	 
	 
	 	3.5	 	No Make-Up of Contributions	 	 	28	 
	 
	 	 	 	 	 	 	 	 
	 
	 	3.6	 	Limitations on Before Tax Contributions	 	 	28	 
	 
	 	 	 	 	 	 	 	 
	 
	 	3.7	 	Rollovers	 	 	30	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE 4 EMPLOYER CONTRIBUTIONS	 	 	30	 
	 
	 	 	 	 	 	 	 	 
	 
	 	4.1	 	Company Retirement Contributions	 	 	30	 
	 
	 	 	 	 	 	 	 	 
	 
	 	4.2	 	Matching Contributions	 	 	31	 
	 
	 	 	 	 	 	 	 	 
	 
	 	4.3	 	Reinstatement of Forfeited Account
Balances; Payment of Administrative Expenses	 	 	33	 
	 
	 	 	 	 	 	 	 	 
	 
	 	4.4	 	Limitations on Contributions	 	 	33	 
	 
	 	 	 	 	 	 	 	 
	 
	 	4.5	 	Limitations on After Tax
Contributions and Employer Matching Contributions	 	 	34	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE 5 ACCOUNTS	 	 	38	 
	 
	 	 	 	 	 	 	 	 
	 
	 	5.1	 	Maintenance of Accounts	 	 	38	 
	 
	 	 	 	 	 	 	 	 
	 
	 	5.2	 	Adjustments to Accounts; Statements Provided to Participants	 	 	38	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE 6 VESTING AND FORFEITURES	 	 	39	 
	 
	 	 	 	 	 	 	 	 
	 
	 	6.1	 	Before Tax Contributions, After Tax Contributions, Qualified	 	 	 	 
	 
	 	 	 	Nonelective Contributions and Rollover Accounts	 	 	39	 
	 
	 	 	 	 	 	 	 	 
	 
	 	6.2	 	Vesting of Company Retirement Contributions Account	 	 	39	 






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	 	6.3	 	Vesting of Employer Matching
Contributions Account and Profit Sharing Contributions Account	 	 	39	 
	 
	 	 	 	 	 	 	 	 
	 
	 	6.4	 	Forfeitures	 	 	42	 
	 
	 	 	 	 	 	 	 	 
	 
	 	6.5	 	Determination of Period of Service	 	 	43	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE 7 INVESTMENT OF CONTRIBUTIONS	 	 	43	 
	 
	 	 	 	 	 	 	 	 
	 
	 	7.1	 	Investment Funds	 	 	43	 
	 
	 	 	 	 	 	 	 	 
	 
	 	7.2	 	Loan Fund	 	 	44	 
	 
	 	 	 	 	 	 	 	 
	 
	 	7.3	 	Investment of Employer and Participant Contributions	 	 	44	 
	 
	 	 	 	 	 	 	 	 
	 
	 	7.4	 	Change in Investment Elections	 	 	45	 
	 
	 	 	 	 	 	 	 	 
	 
	 	7.5	 	Change in Existing Investments	 	 	45	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE 8 WITHDRAWALS DURING EMPLOYMENT	 	 	46	 
	 
	 	 	 	 	 	 	 	 
	 
	 	8.1	 	Withdrawal of After Tax Contributions	 	 	46	 
	 
	 	 	 	 	 	 	 	 
	 
	 	8.2	 	Withdrawals After Age 59-1/2	 	 	46	 
	 
	 	 	 	 	 	 	 	 
	 
	 	8.3	 	Withdrawal of Employer Matching Contributions	 	 	46	 
	 
	 	 	 	 	 	 	 	 
	 
	 	8.4	 	Hardship Withdrawals	 	 	47	 
	 
	 	 	 	 	 	 	 	 
	 
	 	8.5	 	Withdrawal of Rollover Accounts	 	 	49	 
	 
	 	 	 	 	 	 	 	 
	 
	 	8.6	 	Withdrawals of Certain Default Before Tax Contributions	 	 	49	 
	 
	 	 	 	 	 	 	 	 
	 
	 	8.7	 	Application for Withdrawals; Processing	 	 	50	 
	 
	 	 	 	 	 	 	 	 
	 
	 	8.8	 	Restrictions on Contributions After Certain Withdrawals	 	 	51	 
	 
	 	 	 	 	 	 	 	 
	 
	 	8.9	 	Limit on Number of Withdrawals	 	 	51	 
	 
	 	 	 	 	 	 	 	 
	 
	 	8.10	 	Effect of Withdrawals on Investments	 	 	51	 
	 
	 	 	 	 	 	 	 	 
	 
	 	8.11	 	Timing and Form of Payment of Withdrawals	 	 	52	 
	 
	 	 	 	 	 	 	 	 
	 
	 	8.12	 	Withdrawals Only Available to Employees	 	 	52	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE 9 PAYMENT OF BENEFITS	 	 	52	 
	 
	 	 	 	 	 	 	 	 
	 
	 	9.1	 	Distribution of Benefits Upon Occurrence of Distribution Event	 	 	52	 
	 
	 	 	 	 	 	 	 	 
	 
	 	9.2	 	Payment of Benefits by Trustee; Form of Payment	 	 	53	 
	 
	 	 	 	 	 	 	 	 





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	 	9.3	 	Required Minimum Distributions	 	 	53	 
	 
	 	 	 	 	 	 	 	 
	 
	 	9.4	 	Payment to Participant's Estate	 	 	54	 
	 
	 	 	 	 	 	 	 	 
	 
	 	9.5	 	Incapacity of Payee	 	 	54	 
	 
	 	 	 	 	 	 	 	 
	 
	 	9.6	 	Plan Administrator Determines Payee	 	 	55	 
	 
	 	 	 	 	 	 	 	 
	 
	 	9.7	 	Rollover Distributions	 	 	55	 
	 
	 	 	 	 	 	 	 	 
	 
	 	9.8	 	Distributions Pursuant to Qualified Domestic Relations Orders	 	 	58	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE 10 LOANS	 	 	58	 
	 
	 	 	 	 	 	 	 	 
	 
	 	10.1	 	Availability of Loans; Application for Loans	 	 	58	 
	 
	 	 	 	 	 	 	 	 
	 
	 	10.2	 	Terms of Loans	 	 	59	 
	 
	 	 	 	 	 	 	 	 
	 
	 	10.3	 	Events of Default	 	 	61	 
	 
	 	 	 	 	 	 	 	 
	 
	 	10.4	 	Accounting for Loans	 	 	63	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE 11 ADMINISTRATION OF THE PLAN	 	 	64	 
	 
	 	 	 	 	 	 	 	 
	 
	 	11.1	 	Authority of Plan Administrator	 	 	64	 
	 
	 	 	 	 	 	 	 	 
	 
	 	11.2	 	Claims Procedure	 	 	65	 
	 
	 	 	 	 	 	 	 	 
	 
	 	11.3	 	Financial Statements	 	 	67	 
	 
	 	 	 	 	 	 	 	 
	 
	 	11.4	 	Liability of Plan Administrator	 	 	67	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE 12 MANAGEMENT OF THE TRUST FUND	 	 	68	 
	 
	 	 	 	 	 	 	 	 
	 
	 	12.1	 	Designation of Trustee	 	 	68	 
	 
	 	 	 	 	 	 	 	 
	 
	 	12.2	 	Plan Assets Held in Trust	 	 	69	 
	 
	 	 	 	 	 	 	 	 
	 
	 	12.3	 	Appointment of Investment Manager	 	 	70	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE 13 AMENDMENT OF THE PLAN	 	 	70	 
	 
	 	 	 	 	 	 	 	 
	 
	 	13.1	 	Amendment	 	 	70	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE 14 DISCONTINUANCE OF THE PLAN	 	 	71	 
	 
	 	 	 	 	 	 	 	 
	 
	 	14.1	 	Right To Terminate Plan	 	 	71	 
	 
	 	 	 	 	 	 	 	 
	 
	 	14.2	 	Valuation of Trust Fund upon Termination	 	 	72	 
	 
	 	 	 	 	 	 	 	 





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	 	14.3	 	Continuation of Trust	 	 	72	 
	 
	 	 	 	 	 	 	 	 
	 
	 	14.4	 	Plan Mergers and Transfers of Assets and Liabilities	 	 	72	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE 15 STATEMENT OF INTENT	 	 	75	 
	 
	 	 	 	 	 	 	 	 
	 
	 	15.1	 	Qualification	 	 	75	 
	 
	 	 	 	 	 	 	 	 
	 
	 	15.2	 	Section 404(c) of ERISA	 	 	75	 
	 
	 	 	 	 	 	 	 	 
	 
	 	15.3	 	Responsibility of Named Fiduciaries	 	 	76	 
	 
	 	 	 	 	 	 	 	 
	 
	 	15.4	 	Legal Rights and Liabilities	 	 	76	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE 16 TOP-HEAVY RULES	 	 	77	 
	 
	 	 	 	 	 	 	 	 
	 
	 	16.1	 	Applicability of Rules	 	 	77	 
	 
	 	 	 	 	 	 	 	 
	 
	 	16.2	 	Determination of Top-Heavy Status	 	 	78	 
	 
	 	 	 	 	 	 	 	 
	 
	 	16.3	 	Determination of Accrued Benefits	 	 	79	 
	 
	 	 	 	 	 	 	 	 
	 
	 	16.4	 	Vesting for Top-Heavy Years	 	 	80	 
	 
	 	 	 	 	 	 	 	 
	 
	 	16.5	 	Contributions for Top-Heavy Years	 	 	81	 
	 
	 	 	 	 	 	 	 	 
	 
	 	16.6	 	Certain Changes Effective January 1, 2002	 	 	82	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE 17 GENERAL PROVISIONS	 	 	84	 
	 
	 	 	 	 	 	 	 	 
	 
	 	17.1	 	Nonalienation of Benefits	 	 	84	 
	 
	 	 	 	 	 	 	 	 
	 
	 	17.2	 	No Right to Continued Employment	 	 	85	 
	 
	 	 	 	 	 	 	 	 
	 
	 	17.3	 	Rules of Construction	 	 	85	 
	 
	 	 	 	 	 	 	 	 
	 
	 	17.4	 	Appendices	 	 	86	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE 18 LAPSED BENEFITS	 	 	86	 
	 
	 	 	 	 	 	 	 	 
	 
	 	18.1	 	Notification to Participants and Beneficiaries	 	 	86	 
	 
	 	 	 	 	 	 	 	 
	 
	 	18.2	 	Reinstatement of Lapsed Benefits	 	 	87	 
	 
	 	 	 	 	 	 	 	 
	APPENDICES	 	 	 	 







vii











 





FORESTAR SAVINGS AND RETIREMENT PLAN




     This Plan is adopted, effective as of December 28, 2007, by Forestar Real Estate Group Inc.
The Plan is intended to be a “qualified automatic enrollment arrangement” described in Section
401(k)(13) of the Code, effective January 1, 2008.



ARTICLE 1




DEFINITIONS




     As used herein, the following terms shall have the following respective meanings, unless a
different meaning is required by the context:



     1.1 “Accounts” means, as applicable, a Participant’s Company Retirement Contributions Account, Before Tax
Contributions Account, After Tax Contributions Account, Employer Matching Contributions Account,
Qualified Nonelective Contributions Account, Profit Sharing Contributions Account, Rollover
Account, and the Subaccounts maintained under such Accounts. The Plan Administrator may establish
such additional Accounts and Subaccounts as it may determine in its discretion.



     1.2 “Account Balance” means the aggregate balance of a Participant’s Accounts.



     1.3 “Affiliate Plan” means a defined contribution plan (other than this Plan) that is maintained by any member of
the Group and that is intended to be qualified under Section 401(a) of the Code.



     1.4 “After Tax Contributions” means the voluntary contributions made by a Participant pursuant to Section 3.1 hereof which
are neither deductible for federal income tax purposes nor reduce a Participant’s taxable income,
plus the amount of such contributions made by a Participant to a Merged Plan that are transferred
on behalf of a Participant to this Plan.



 









 





     1.5 “After Tax Contributions Account” means the separate account maintained for each Participant who has made After Tax
Contributions that accounts for the Participant’s share of the Trust Fund attributable to his After
Tax Contributions.



     1.6 “Approved Absence” means an Employee’s period of absence occurring by reason of the following events:



          (a) service in the Armed Forces of the United States; provided, however, that the Employee has
re-employment rights under applicable laws and complies with the requirements of such laws and is
re-employed by the Group;




          (b) an approved leave of absence for medical or disability reasons granted to an Employee
pursuant to his Employer’s established personnel rules and policies; or




          (c) any other leave of absence approved by his Employer; provided, however, that no such leave
of absence shall be approved for more than six (6) months in the aggregate.




     1.7 “Automatic Contribution Arrangement” means the automatic enrollment and contribution provisions of Sections 2.1(b) and (d), 2.2(b)
and (c) and 4.2 hereof that are intended to constitute a “qualified automatic contribution arrangement” within the meaning of Treasury Regulation Section
1.401(k)-3(j)(1).



     1.8 “Automatic Contribution Employee” means any Employee other than an Employee who has an affirmative election in effect (that
remains in effect) on January 1, 2008, to (a) have Before Tax Contributions made on the Employee’s
behalf in a specified percentage of Compensation, or (b) not have Before Tax Contributions made on
the Employee’s behalf. An Employee shall cease to be an Automatic Contribution Employee



2









 




if the
Employee makes an election (that remains in effect) to (x) have Before Tax Contributions made on
his behalf in a different percentage of Compensation than provided for by Section 2.2(b) or 2.2(c)
hereof, or (y) not have any Before Tax Contributions made on his behalf.




     1.9 “Automatic Contribution Participant” means an Automatic Contribution Employee who becomes a Participant pursuant to Section
2.1(b)(ii) hereof.



     1.10 “Automatic Increase Participant”
means (a) each Automatic Contribution Participant, other than an Automatic Contribution
Participant who, by Notice to the Plan Administrator, makes an election (that remains in effect)
not to have the automatic increases provided for by Section 2.2(c) hereof apply to the Participant,
and (b) each other Participant who, by Notice to the Plan Administrator, makes an election (that
remains in effect) to have Section 2.2(c) hereof apply.



     1.11 “Average Contribution Percentage”
means



          (a) For each Plan Year the average of ratios (calculated separately for each Employee) of: (i)
the sum of the employee contributions and employer matching contributions (within the meaning of
Section 401(m) of the Code) under the Plan on behalf of an Employee for the relevant Plan Year, to
(ii) that Employee’s Section 414 Compensation for the relevant Plan Year.




          (b) The Average Contribution Percentage of any Employee who is a Highly Compensated Employee
for the Plan Year and who is eligible to make employee contributions or to have matching
contributions, qualified nonelective contributions or elective deferrals (as defined in Section
401(m)(4) of the Code) allocated to his account under two (2) or more plans described in Section
401(a) of the Code or arrangements



3









 






described in Section 401(k) of the Code that are maintained by
the Group shall be determined as if all such contributions and deferrals were made under a single
plan. If such plans or arrangements have different plan years, the Average Contribution Percentage
of the Highly Compensated Employee shall be determined by aggregating such contributions and
deferrals made by and/or on behalf of the Highly Compensated Employee, and the compensation (using
the definition of compensation set forth in the plan or arrangement being tested) received by the
Highly Compensated Employee, during the plan year of the plan or arrangement being tested.




          (c) If the Plan satisfies the requirements of Section 401(a)(4) or Section 410(b) of the Code
only if aggregated with one (1) or more other plans or if one (1) or more other plans satisfy the
requirements of Section 401(a)(4) or Section 410(b) of the Code only if aggregated with the Plan,
the Average Contribution Percentages of Employees shall be determined as if all such plans were a
single plan. A plan may be
aggregated with this Plan for purposes of satisfying the requirements of Section 410(b) of the
Code only if such plan uses the same testing method as this Plan to satisfy the actual contribution
percentage test of Section 401(m) of the Code.




          (d) To the extent permitted by regulations promulgated under Section 401(m) of the Code, the
Plan Administrator may elect to take into account “elective deferrals” (within the meaning of
Section 401(m) of the Code) and Qualified Nonelective Contributions, in calculating the Average
Contribution Percentage of Employees.




          (e) To the extent prohibited by Treasury Regulation Section 1.401(m)-2(a)(5), the Plan
Administrator shall not take into account disproportionate matching contributions in calculating
the Average Contribution Percentage of Employees.



4









 







     1.12 “Before Tax Contributions” means the amount of Compensation deferred by a Participant pursuant to Section 3.1 hereof on a
before tax basis, plus the amount of elective deferrals (within the meaning of Section 402(g) of
the Code) that are transferred on behalf of a Participant to this Plan from a Merged Plan.



     1.13 “Before Tax Contributions Account” means the separate account maintained for each Participant who has made Before Tax
Contributions that accounts for the Participant’s share of the Trust Fund attributable to his
Before Tax Contributions.



     1.14 “Borrower”
means any person who has an outstanding loan under Article 10 of this Plan.



     1.15 “Code”
means the Internal Revenue Code of 1986, as amended, and shall also include all regulations
promulgated thereunder.



     1.16 “Company” means Forestar Real Estate Group Inc., a Delaware corporation, and any successor to such
corporation by merger, purchase, or otherwise.



     1.17 “Company Retirement Contributions”
means contributions made by an Employer pursuant to Section 4.1 hereof, plus the amount of any
similar contributions (as determined by the Plan Administrator) that are transferred to this Plan
from a Merged Plan on behalf of a Participant.



     1.18 “Company Retirement Contributions Account”
means the separate account for each Participant which shall account for his share of the Trust
Fund attributable to Company Retirement Contributions made on his behalf.



     1.19 “Compensation”
means wages paid by an Employer to an Employee, as reported by the Employer in Box 1 on Form
W-2, and elective deferrals (within the meaning of Section 402(g)(3) of the Code) under any plan
sponsored by the Group,



5









 




payroll reduction contributions made on a before tax basis under any
cafeteria plan (within the meaning of Section 125 of the Code) or qualified transportation fringe
benefit plan (within the meaning of Section 132(f) of the Code) sponsored by the Group, but
excludes reimbursements or other expense allowances, fringe benefits (cash and noncash), moving
expenses, welfare benefits, deferred compensation, and, in the case of a Highly Compensated
Employee only, stock option income and payments made with respect to performance units or
restricted stock. If, for any Plan Year a Participant’s Compensation exceeds the two hundred
thousand
dollar ($200,000) limitation imposed by Section 401(a)(17) of the Code, as adjusted as provided
therein, such excess amount shall not be taken into account for such Plan Year for purposes of this
Section or any other provision of the Plan. Notwithstanding the foregoing, the definition of the
term “Compensation” under this Section 1.19 is a safe harbor definition of compensation set forth
in Treasury Regulations Section 1.414(s)-1(c)(3), as modified by Treasury Regulations Sections
1.414(s)-1(c)(4) and (5), and does not include any compensation amount that is not Section 415
Compensation.




     1.20 “Contributing Participant”
shall mean a Participant who elects to make Before Tax Contributions and/or After Tax
Contributions to the Plan pursuant to Article 3 hereof.



     1.21 “Designated Enrollment Date”
means the first day of each calendar month.



     1.22 “Distribution Event” means, with respect to a Participant: (a) the Participant’s retirement, death, disability, or
severance from employment; and (b) the termination of the Plan without establishment or maintenance
of an alternative defined contribution plan (as defined in Treasury Regulation Section 1.401(k) -
1(d)(4)).



6









 




Notwithstanding the foregoing, if a Participant has a change in job status from Employee
to Section 414(n) Leased Employee, such change in job status shall not constitute a Distribution
Event.




     1.23 “Eligible Borrower”
means any Participant who has an Account Balance under this Plan or any alternate payee who
has a right to an Account Balance under this Plan, provided that such
Participant or alternate payee is a “party in interest” (within the meaning of Section 3(14) of
ERISA).



     1.24 “Employee”
means a person who is employed by an Employer on a salaried (exempt and non-exempt), salaried
plus commission, or commission-only basis and who is not covered by a collective bargaining
agreement entered into with an Employer, unless such agreement, by specific reference to the Plan
provides for coverage under the Plan.



     1.25 “Employee Matters Agreement”
means the Employee Matters Agreement by and among Temple-Inland Inc., Guaranty Financial Group
Inc. and the Company, entered into pursuant to the Transformation Plan announced by Temple-Inland
Inc. on February 26, 2007.



     1.26 “Employer”
means each of the entities listed on Appendix I hereto, subject to such limitations or
restrictions as to participation by employees of such entities as may be reflected on such Appendix
I.



     1.27 “Employer Matching Contributions”
means the contributions made by an Employer pursuant to Section 4.2 hereof, plus the amount of
any employer matching contributions (within the meaning of Section 401(m)(4) of the Code)
transferred on behalf of a Participant to this Plan from a Merged Plan.



7









 





     1.28 “Employer Matching Contributions Account”
means the separate account for each Participant which shall account for his share of the Trust
Fund attributable to any Employer Matching Contributions made or transferred to this Plan on his
behalf.



     1.29 “ERISA”
means the Employee Retirement Income Security Act of 1974, as now in effect or hereafter
amended and shall also include all regulations promulgated thereunder.



     1.30 “Funds”
means the investment funds provided for by Section 7.1 hereof.



     1.31 “Group”
means the Company, and any entity that is treated as a single employer together with the
Company pursuant to Sections 414(b), 414(c) or 414(m) of the Code or is required to be aggregated
with the Company pursuant to regulations under Section 414(o) of the Code. For the purpose under
the Plan of determining the Period of Service of a Participant, each entity shall be included in
the Group only for such period or periods during which it is treated as a single employer together
with the Company pursuant to Sections 414(b), 414(c) or 414(m) of the Code or is required to be
aggregated with the Company pursuant to regulations under Section 414(o) of the Code, except as
provided in Section 1.49 hereof.



     1.32 “Guaranty Plan”
means the Guaranty Financial Group Inc. Savings and Retirement Plan (formerly, the
Temple-Inland Savings and Retirement Plan) maintained by the Guaranty Financial Group Inc.



     1.33 “Highly Compensated Employee”
means any Employee who, with respect to the Group, is described in either clauses (a) or (b)
below:



8









 





          (a) Was a “5-percent owner” (as described in Section 414(q) of the Code) at any time during
the Plan Year or the twelve (12) month period preceding the Plan Year (the “Lookback Year”); or




          (b) Received Section 415 Compensation from the Group in excess of eighty thousand dollars
($80,000) (as adjusted for cost-of-living increases) for the Lookback Year and was in the group of
employees for such year consisting of the top twenty percent of employees when ranked on the basis
of Section 415 Compensation during such year.




     1.34 “Hour of Service” means:



          (a) An hour for which an employee is paid, or entitled to payment, for the performance of
duties for any member of the Group. Such hours will be credited to the employee for the
computation period in which the duties are performed; and




          (b) An hour for which an employee is paid, or entitled to payment, by any member of the Group
on account of a period of time during which no duties are performed (irrespective of whether the
employment relationship has terminated) due to vacation, holiday, illness, incapacity (including
disability), layoff, jury duty, military duty or leave of absence. Hours under this paragraph will
be calculated and credited pursuant to Section 2530.200b-2 of the Department of Labor Regulations
which is incorporated herein by reference; and




          (c) An hour for which back pay, irrespective of mitigation of damages, is either awarded or
agreed to by any member of the Group. An hour of service will not
be credited both under (a) or (b), as the case may be, and under this subsection (c). Such
hours will be credited to employees for the computation period or periods to which the



9









 






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




          (d) Hours of service shall be credited for any individual considered to be a Section 414(n)
Leased Employee.




     1.35 “Inactive Participant”
means a Participant who is employed by the Group but who is not an Employee.



     1.36 “Investment Committee”
means the Forestar Real Estate Group Inc. Investment Committee, as appointed by the Board of
Directors of the Company.



     1.37 “Loan”
means a loan made pursuant to Article 10 hereof or that is treated as a Loan pursuant to
Section 10.2(j) hereof



     1.38 “Merged Plan”
means a tax-qualified defined contribution plan that is merged into this Plan or from which
account balances are transferred (other than pursuant to a rollover) to this Plan, in either case
with the consent of the Board of Directors or President of the Company.



     1.39 “Merger Date”
means the date as of which a Merged Plan is merged into this Plan or as of which account
balances are transferred to this Plan from a Merged Plan, as designated by the Plan Administrator.



     1.40 “Months of Participation”
means the number of calendar months (with partial months being counted as full months) during
the period beginning (a) on the date on which an Employee provides Notice to the Plan Administrator
electing to make Payroll Savings Contributions hereunder, or (b) in the case of an Automatic
Contribution Employee, the day after the expiration of the election period set forth in Section
2.1(b)(ii) hereof, and ending on the date the Participant ceases to be employed by any member of



10









 




the Group. If the Plan Administrator determines that there are insufficient records to determine a
Participant’s Months of Participation pursuant to the foregoing provisions of this Section 1.40,
the Plan Administrator may determine a Participant’s Months of Participation using such methods and
assumptions as it determines necessary or appropriate in its sole discretion, provided that such
methods and assumptions are applied in a consistent and nondiscriminatory manner to similarly
situated Participants. In the case of a Participant described in Section 1.49(b) hereof, the
Participant’s Months of Participation shall include the Participant’s “months of participation” in
the Temple-Inland Savings Plan, the Guaranty Plan or the Merged Plan, as applicable.




     1.41 “Non-Highly Compensated Employee”
means, with respect to a Plan Year, an Employee who is eligible to participate in the Plan
pursuant to Article 2 hereof and who is not a Highly Compensated Employee.



     1.42 “Non-Residential Loan”
means any Loan that is not a Residential Loan.



     1.43 “Notice”
means a notice, application or request provided by a Participant to a designated party in such
form (which may be written, telephonic, electronic, or another means of communication) as may be
specified by the party to receive such Notice.



     1.44 “One Year Break in Service”
means a consecutive twelve (12) month Period of Severance during which an Employee does not
perform an Hour of Service and is not on an Approved Absence.



     1.45 “Participant”
means (a) an Employee who is eligible to participate in the Plan under Article 2 hereof, and
(b) except for purposes of Articles 2 (other than Section



11









 




2.1(e) and 2.3), 3, 4, 8, 9, and 16
hereof, any person on whose behalf an Account is maintained under the Plan.




     1.46 “Participant Loan Subaccount”
means the separate Subaccount maintained for each Participant who has an outstanding Loan and
to which the promissory note evidencing any such Loan shall be allocated.



     1.47 “Payroll Savings Contributions”
means Before Tax Contributions and/or After Tax Contributions made by a Participant pursuant
to Section 3.1 hereof.



     1.48 “Period of Separation”
means a period of time commencing with the date a person separates from service with the Group
and ending with the date that person resumes employment with the Group.



     1.49 “Period of Service” means:



          (a) The period commencing on the date a person is credited with an Hour of Service on or after
December 28, 2007, and ending on the date a Period of
Severance begins, including any Period of Separation of less than twelve (12) consecutive
months. The determination of a Participant’s Period of Service shall be subject to the rules set
forth in Section 6.4 hereof. For purposes of determining a Participant’s Period of Service, the
Severance from Service Date of a Participant who is absent from service beyond the first
anniversary of the first day of absence for maternity or paternity reasons is the second
anniversary of the first day of such absence. The period between the first and second
anniversaries of the first day of absence from work shall be neither a Period of Service nor a
Period of Severance. For purposes of this paragraph, an absence from work for maternity or
paternity reasons means an absence (i) by reason of the pregnancy of the individual, (ii) by reason
of a birth of a child of the



12









 






individual, (iii) by reason of the placement of a child with the
individual in connection with the adoption of such child by such individual, or (iv) for purposes
of caring for such child for a period beginning immediately following such birth or placement.




          (b) Notwithstanding Section 1.49(a) hereof:




               (i) The Period of Service of a Participant whose service for vesting purposes under a Merged
Plan was determined on a basis other than hours of service shall include the service credited under
such plan as of its Merger Date (provided that if the Merged Plan was at any time an Affiliate
Plan, no duplication of credited service shall occur).



               (ii) The Period of Service of a Participant whose service for vesting purposes under a Merged
Plan was determined based on hours of service shall consist of the following: (A) a number of
years equal to the number of years of service credited to the Participant before the plan year or
other computation period used for
determining years of service under the Merged Plan (the “Computation Period”) during which the
Merger Date occurs; (B) the greater of (I) the period of service that would be credited to the
Participant under the elapsed time method for his service during the entire Computation Period in
which the Merger Date occurs, or (II) the service taken into account for the Computation Period
that includes the Merger Date under the hours of service method as of the Merger Date; and (C) the
Period of Service credited to the Participant for service subsequent to the Merger Date commencing
on the day after the last day of the Computation Period in which the Merger Date occurs.



               (iii) If a Participant transferred employment to an Employer from Temple-Inland Inc., any
member of the “Temple-Inland Group” (within the



13









 





meaning of the Employee Matters Agreement), the
Guaranty Financial Services Group Inc. or any member of the “Guaranty Group” (within the meaning of
the Employee Matters Agreement) and such employment transfer is covered by the Employee Matters
Agreement, the Participant’s Period of Service shall include the Participant’s “Period of Service”
credited to the Participant under the Temple-Inland Savings Plan or the Guaranty Plan, except to
the extent that the inclusion of such service would result in a duplication of credited service
with respect to any period.



          (iv) An Employee’s Period of Service shall include prior service with a corporation or other
entity acquired by any member of the Group or from which any member of the Group acquired all or a
part of the assets of a trade or business to such extent as may be provided by the agreement
pursuant to which the applicable member of the Group acquired such corporation, other entity, or
assets of all or a part of a trade or business.




     1.50 “Period of Severance”
means a period of time commencing on a person’s Severance from Service Date and ending with
the date that person resumes his employment with the Group.



     1.51 “Plan”
means the Forestar Savings and Retirement Plan.



     1.52 “Plan Administrator”
means the individual or committee appointed by the Board of Directors or President of the
Company to manage and administer the Plan as provided in Article 11 hereof. The Plan Administrator
shall be a “named fiduciary” for the purposes of Section 402(a)(1) of ERISA, responsible for the
administration, operation and interpretation of the Plan.



14









 





     1.53 “Plan Year”
means the calendar year commencing on January 1 and ending on the following December 31,
except that the first Plan Year of the Plan shall be the period beginning on December 28, 2007, and
ending on December 31, 2007.



     1.54 “Profit Sharing Contributions”
means any profit sharing contributions transferred on behalf of a Participant to this Plan
from a Merged Plan.



     1.55 “Profit Sharing Contributions Account”
means the separate account for each Participant which shall account for his share of the Trust
Fund attributable to any Profit Sharing Contributions made or transferred to the Plan on the
Participant’s behalf.



     1.56 “Qualified Nonelective Contributions”
means the amount of any qualified nonelective contributions (within the meaning of Section
401(m)(4)(c) of the Code) transferred on behalf of a Participant to this Plan from a Merged Plan.



     1.57 “Qualified Nonelective Contributions Account”
means the separate account maintained for each Participant who has been allocated Qualified
Nonelective Contributions that accounts for the Participant’s share of the Trust Fund attributable
to Qualified Nonelective Contributions.



     1.58 “Required Beginning Date”
means the later of (a) April 1 of the calendar year following the calendar year in which a
Participant attains age 70-1/2, or (b) in the case of a Participant who is not a five percent (5%)
owner (as defined in Section 416 of the Code) with respect to the Plan Year during which the
Participant attains age 70-1/2, April 1 of the calendar year following the calendar year in which
the Participant has a severance from employment with the Group.



15









 





     1.59 “Residential Loan”
means any Loan that is used to acquire any dwelling unit that within a reasonable period of
time is to be used (determined at the time the loan is made) as the principal residence of the
Eligible Borrower.



     1.60 “Rollover Account”
means the separate account maintained for each Participant which shall account for his share
of the Trust Fund attributable to his Rollover Contributions.



     1.61 “Rollover Contributions”
means rollover contributions made to the Plan pursuant to Section 3.7 hereof plus the amount
of any rollover contributions transferred on behalf of a Participant to this Plan from a Merged
Plan.



     1.62 “Section 414(n) Leased Employee”
means any person who is not an employee of a recipient of the leased employee’s services
(“recipient”) if (a) such services are provided pursuant to an agreement between the recipient and
any other person (the “leasing organization”), (b) such person has performed such services for the
recipient (or for the recipient and related persons) on a substantially full-time basis for a
period of at least one year, and (c) such services are performed under the primary direction or
control by the recipient.



     1.63 “Section 414 Compensation”
means wages paid by an Employer to an Employee, as reported by an Employer in Box 1 on Form
W-2, plus elective deferrals (within the meaning of Section 402(g)(3) of the Code) under any plan
sponsored by the Group and compensation reduction contributions made on a before tax basis under
any cafeteria plan (within the meaning of Section 125 of the Code) or qualified transportation
fringe benefit plan (within the meaning of Section 132(f) of the Code) sponsored by any member of
the Group, minus any compensation amount that is not Section 415



16









 




Compensation; provided,
however, that the Plan Administrator may elect to (a) use any definition of compensation
permitted under Section 414(s) of the Code and the regulations thereunder for any Plan Year and/or
(b) limit the compensation taken into account with respect to an Employee to that portion of the
Plan Year during which the Employee was eligible to participate in the Plan. In no event may a
Participant’s Section 414 Compensation exceed the two hundred thousand
dollar ($200,000) limitation imposed by Section 401(a)(17) of the Code, as adjusted as provided
therein.




     1.64 “Section 415 Compensation” means



          (a) Wages paid to an Employee by an Employer, as reported by an Employer in Box 1 on Form W-2,
plus elective deferrals (within the meaning of Section 402(g)(3) of the Code) under any plan
sponsored by the Group and compensation reduction contributions made on a before tax basis under
any cafeteria plan (within the meaning of Section 125 of the Code) or qualified transportation
fringe benefit plan (within the meaning of Section 132(f) of the Code) sponsored by any member of
the Group. Except as provided herein, Section 415 Compensation for a Plan Year is the compensation
actually paid or made available during such Plan Year. In no event may a Participant’s Section 415
Compensation exceed the two hundred thousand dollar ($200,000) limitation imposed by Section
401(a)(17) of the Code, as adjusted as provided therein.




          (b) For Plan Years beginning on and after December 28, 2007, the term “Section 415
Compensation” shall also include compensation paid by the later of 2 1/2 months after a
Participant’s severance from employment with the Group or the end of the Plan Year that includes
the date of the Participant’s severance from employment with



17









 






the Group if the payment is: (i)
regular compensation for services during the Participant’s regular working hours, or compensation
for services outside the Participant’s regular working hours (such as overtime or shift
differential), commissions, bonuses, or other similar payments, and absent a severance from
employment, the payments would have been paid to the Participant while the Participant continued in
employment with the Group; or (ii) for unused accrued bona fide sick, vacation or other leave
that the Participant would have been able to use if employment with the Group had continued.




          (c) Any payments not described in Sections 1.64(a) and 1.64(b) hereof shall not be considered
“Section 415 Compensation” if paid after severance from employment with the Group, even if they are
paid by the later of 2 1/2 months after the date of severance from employment or the end of the
Plan Year that includes the date of severance from employment, except (i) payments to an individual
who does not currently perform services for the Group by reason of qualified military service
(within the meaning of Section 414(u)(1) of the Code) to the extent the payments do not exceed the
amounts the individual would have received if the individual had continued to perform services for
the Group rather than entering qualified military service, or (ii) compensation paid to a
Participant who is permanently and totally disabled (within the meaning of Section 22(e)(3) of the
Code); provided that salary continuation applies to all Participants who are permanently and
totally disabled for a fixed or determinable period or the Participant was not a Highly Compensated
Employee immediately before becoming disabled.




     1.65 “Severance from Service Date”
means the earlier of:



18









 





          (a) the date a person terminates his employment with the Group by reason of quitting,
retirement, death or discharge, or




          (b) the date twelve (12) consecutive months after the date a person remains absent from
service with the Group (with or without pay) for any reason other than quitting, retirement, death
or discharge.




     1.66 “Subaccounts”
means the subaccounts established for each Participant that account for the investment of each
Participant’s Accounts in the funds described in Sections 7.1 and 10.4 hereof, and for such other
amounts as the Plan Administrator deems it necessary or appropriate to establish a subaccount.



     1.67 “Temple-Inland Savings Plan”
means the Temple-Inland Salaried Savings Plan, Temple-Inland Non-Salaried Savings Plan,
Temple-Inland Plan for Union Employees, El Morro Corrugated Box Corporation Savings and Investment
Plan or Joint Venture Master 401(k) Plan, as applicable, each maintained by TIN Inc.



     1.68 “Trust Agreement”
means the agreement between the Company and the Trustee, as provided for in Article 12 hereof,
as the same may hereafter be amended from time to time.



     1.69 “Trust Fund”
means all the assets at any time held under the Plan by the Trustee as provided for in Article
12 hereof.



     1.70 “Trustee”
means the trustee or trustees selected by the Board of Directors or President of the Company
which may at any time be acting as Trustee under the Trust Agreement.



     1.71 “Valuation Date”
means (a) the last day of each calendar year that the New York Stock Exchange is open for
trading, and (b) except as otherwise determined by



19









 




either the Plan Administrator or the Trustee in
its sole discretion and either with or without prior notice to Participants, each other day (or
portion thereof) that the New York Stock Exchange is open for trading.




ARTICLE 2




ELIGIBILITY AND PARTICIPATION




     2.1 Participation.



          (a) Each Employee who was a Participant in the Temple-Inland Savings Plan or the Guaranty Plan
as of December 27, 2007, and is employed by an Employer on December 28, 2007, shall be a
Participant in this Plan as of December 28, 2007.




          (b) Each Employee not described in Section 2.1(a) hereof shall become a Participant as soon as
practicable after the earlier of (i) the Employee’s providing Notice to the Plan Administrator
pursuant to Section 2.2 hereof to elect to have Before Tax Contributions made on the Employee’s
behalf in a specified percentage of Compensation, or (ii) in the case of an Automatic Contribution
Employee, the expiration of thirty (30) days from the later of (A) the Employee’s most recent date
of hire as an Employee, or (B) the date the notice described in Section 2.1(d) hereof is provided
to the Employee, but not earlier than January 1, 2008, unless the Employee has elected, by Notice
to the Plan Administrator, not to have Before Tax Contributions made on his behalf;
provided, however, that in no event shall an Employee become a Participant unless
he is an Employee as of the date he would otherwise become a Participant.





20












 





     (c) Each Employee who does not become a Participant under Section 2.1(a) or 2.1(b) hereof
shall become a Participant as of the date as of which his Employer makes a Company Retirement
Contribution on his behalf pursuant to Section 4.1 hereof.



     (d) Within a reasonable period of time before each Plan Year beginning on or after January 1,
2008, the Plan Administrator shall provide each Employee a written notice of the Automatic
Contribution Arrangement hereunder, which notice shall include the following information: (i) the
Employee’s rights and obligations under the Automatic Contribution Arrangement, (ii) the level of
Before Tax Contributions that will be made on the Employee’s behalf if the Employee does not make
an affirmative election to make Before Tax Contributions, (iii) the Employee’s right to elect not
to have Before Tax Contributions made on the Employee’s behalf (or to elect to have Before Tax
Contributions made in a different percentage of Compensation than provided in Sections 2.2(b) and
2.2(c) hereof), (iv) how contributions made by and on the Employee’s behalf under the Automatic
Contribution Arrangement will be invested in the absence of an investment election by the Employee,
(v) the reasonable period of time after receipt of such notice and before the Employee’s first
Before Tax Contribution for such Plan Year under the Automatic Contribution Arrangement during
which the Employee may make contribution and investment elections hereunder, and (vi) the
Employee’s right to withdraw Before Tax Contributions made under the Automatic Contribution
Arrangement pursuant to Section 8.6 hereof, and the procedures to elect such a withdrawal.



     (e) Each Participant shall (i) provide Notice to the Plan Administrator designating a
beneficiary who shall receive any benefits payable pursuant to Section 9.1



21









 




hereof in the event of the death of the Participant, and (ii) agree to the terms of the Plan.
A Participant may designate one or more persons as beneficiary; provided, however, that if more
than one (1) person is named, the Participant shall indicate the shares and precedence of each
person. A married Participant’s spouse shall be deemed to be his beneficiary regardless of any
contrary designation on file or later filed with the Plan Administrator, unless the spouse consents
(acknowledging the effect of such consent) to the designation of a beneficiary other than the
spouse and such consent is witnessed by a notary public or the Plan Administrator. A Participant
may change his beneficiary from time to time by Notice to the Plan Administrator but only with the
written consent of his spouse (witnessed by the Plan Administrator or a notary public), if he has a
spouse at such time. The consent of a previously designated nonspouse beneficiary shall not be
required in any case. In the event the Participant fails to effectively designate a beneficiary as
to any distribution, such distribution shall be made to such deceased Participant’s spouse (as set
forth above) if living, if not, then to such deceased Participant’s estate.




     (f) Notwithstanding the foregoing provisions of this Section 2.1, in no event shall (i) an
Employee be eligible to become a Participant in this Plan to the extent that becoming a Participant
would cause any plan maintained or formerly maintained by the Group to fail to satisfy the
requirements of Treasury Regulations Section 1.401(k)-1(d), or (ii) any person who is a leased
employee (including a Section 414(n) Leased Employee), a consultant or any other person who is not
classified by an Employer as an employee (not taking into account any retroactive reclassification
of any person as an Employee) be eligible to become a Participant in this Plan.



22









 





     2.2 Enrollment as a Contributing Participant.



          (a) An Employee who is a Participant or who is eligible to become a Participant may elect to
become a Contributing Participant by providing Notice to the Plan Administrator authorizing the
deduction by his Employer of Payroll Savings Contributions from his Compensation and specifying the
Funds in which his Payroll Savings Contributions and other amounts shall be invested, subject to
the terms of Article 7 hereof.




          (b) Notwithstanding anything herein to the contrary, an Automatic Contribution Participant
shall be deemed to have elected to contribute to the Plan as Before Tax Contributions three percent
(3%) of the Employee’s Compensation for the period beginning on the date on which the Participant
first becomes an Automatic Contribution Participant and ending on the last day of the Plan Year
next following the Plan Year in which the Participant first becomes an Automatic Contribution
Participant (the “Initial Contribution Period”). An Automatic Contribution Participant may elect
to change or suspend his contribution election at any time in accordance with Article 3 hereof.




          (c) The percentage of Compensation that an Automatic Increase Participant contributes to the
Plan as Before Tax Contributions shall be increased by one percent (1%) effective as of the first
payroll period beginning on or after January 1 of each Plan Year beginning after the expiration of
the Participant’s Initial Contribution Period; provided, however, that no increase
with respect to an Automatic Increase Participant shall occur pursuant to this Section 2.2(c) if
the percentage of Compensation contributed to the Plan by the Automatic Increase Participant as
Before Tax



23









 






Contributions would exceed ten percent (10%). Unless an Automatic Contribution Participant
elects otherwise by providing Notice to the Plan Administrator, the Automatic Contribution
Participant shall be treated as an Automatic Increase Participant immediately upon becoming an
Automatic Contribution Participant. A Participant who is not an Automatic Contribution Participant
but who has elected to become an Automatic Increase Participant shall become an Automatic Increase
Participant as soon as practicable after the Plan Administrator receives Notice from the
Participant of such election. An Automatic Increase Participant may elect to cease to be an
Automatic Increase Participant at any time by providing Notice to the Plan Administrator, and such
election shall be effective as soon as practicable after the Plan Administrator’s receipt of such
Notice. Notwithstanding the foregoing, the rate of an Automatic Contribution Participant’s Before
Tax Contributions on January 1, 2008, shall not be less than the rate in effect as of December 31,
2007, unless the Automatic Contribution Participant elects a lower rate.




          (d) The authorizations, designations and elections made pursuant to Section 2.1 hereof and
this Section 2.2 shall be deemed to be continuing as to current and succeeding Plan Years until
changed by prior Notice to the Plan Administrator. Notwithstanding the foregoing, in the case of a
Participant whose Before Tax Contributions are temporarily suspended under Section 8.4(c)(iii)
hereof, the Participant’s Before Tax Contribution election shall not apply during the suspension
period, and in the case of an Automatic Increase Participant, the rate of the Participant’s Before
Tax Contributions immediately after the expiration of the suspension period shall be the rate that
would have been in effect had the suspension not occurred.




24









 








          (e) In the case of an Employee who becomes an Employee and a Participant in this Plan on
December 28, 2007, and who immediately prior to becoming a Participant was both (i) employed by
Temple-Inland Inc. or any member of the “Temple-Inland Group” (within the meaning of the Employee
Matters Agreement) and was a participant in the Temple-Inland Savings Plan, or (ii) employed by
Guaranty Financial Group Inc. or any member of the “Guaranty Group” (within the meaning of the
Employee Matters Agreement) and was a participant in the Guaranty Plan, such Participant’s (x)
affirmative elections under the applicable foregoing plan with respect to (A) making before tax
contributions and/or after tax contributions, (B) the investment of contributions made under the
applicable foregoing plan on the Participant’s behalf, and (y) designation of a beneficiary (or
beneficiaries) under the applicable foregoing plan, shall be treated as if made under, and with
respect to, this Plan and shall continue in effect under this Plan until changed in accordance with
the terms of this Plan.




          (f) In the case of an Employee who becomes a Participant in this Plan and who immediately
prior to becoming a Participant was both employed by a member of the Group and was a participant in
a Merged Plan, then, if so determined by the Plan Administrator, such Participant’s (x) elections
under the Merged Plan with respect to (A) making before tax contributions and/or after tax
contributions, (B) the investment of contributions made under the Merged Plan by or on the
Participant’s behalf, and (y) designation of a beneficiary (or beneficiaries) under the Merged
Plan, shall be treated as if made under, and with respect to, this Plan and shall continue in
effect under this Plan until changed in accordance with the terms of this Plan.




     2.3 No Participation by Non-Covered Employees.



25









 





          (a) Notwithstanding any provision of this Plan to the contrary, an Inactive Participant shall
not be eligible to make Payroll Savings Contributions under Article 3 hereof or be entitled to any
Employer Matching Contributions or Company Retirement Contributions under Article 4 hereof.




          (b) If an Inactive Participant again becomes an Employee, he (i) may elect to resume making
Payroll Savings Contributions by giving prior Notice to the Plan Administrator, and such election
shall be effective as soon as practicable after the Plan Administrator’s receipt of such election,
and (ii) shall be eligible to be allocated Employer Matching Contributions and Company Retirement
Contributions, subject to, and in accordance with, the terms of Article 4 hereof.




          (c) Notwithstanding any provision of this Plan to the contrary, an Employee who has rights
under Chapter 43 of Title 38, United States Code, resulting from qualified military service, shall
be credited with service and entitled to make Before Tax Contributions and After Tax Contributions
to this Plan and to be allocated Employer Matching Contributions and Company Retirement
Contributions to the extent required by applicable law and Section 414(u) of the Code.




ARTICLE 3




PARTICIPANT CONTRIBUTIONS




     3.1 Payroll Savings Contributions.
Each Participant may elect to make Payroll Savings Contributions to the Plan of any whole
percentage of his Compensation for each payroll period. The minimum amount of Payroll Savings
Contributions with respect to each payroll period shall be one percent (1%), and, except as
permitted pursuant to Section 3.6 hereof, the maximum
amount shall be fifty percent (50%). A



26









 




Participant’s Payroll Savings Contributions may
consist of any whole percentage of Before Tax Contributions and any whole percentage of After Tax
Contributions.




     3.2 Suspension of Contributions.
A Participant may voluntarily suspend his Payroll Savings Contributions by giving prior Notice
to the Plan Administrator, and such suspension shall be effective as soon as practicable after the
Plan Administrator’s receipt of such Notice. Subject to the requirements of Section 8.8 hereof, a
Participant may resume making Payroll Savings Contributions by giving prior Notice to the Plan
Administrator, and such election shall be effective as soon as practicable after the Plan
Administrator’s receipt of such election.



     3.3 Changes in Contribution Elections. A Participant may increase or decrease, subject to Section 3.1 hereof, the amount of his Before
Tax Contributions and/or After Tax Contributions by giving prior Notice to the Plan Administrator.
Such changes in Before Tax Contributions and/or After Tax Contributions shall become effective as
soon as practicable after receipt of Notice by the Plan Administrator.



     3.4 Payment of Contributions.



          (a) Participants’ Payroll Savings Contributions shall be transferred to the Trustee under the
Plan on the earliest date that such amounts can reasonably be segregated from the Employer’s
general assets, but in no event later than the fifteenth (15th) day of the calendar month following
the month in which the Payroll Savings Contributions withheld would otherwise have been paid to the
Participant. In no event shall an Employer transfer a Before Tax Contribution to the Trustee on
behalf of a Participant prior to the date the Participant performs the services with respect to which the
Before Tax Contribution is being made (or the date the Compensation for such



27









 






services would be
currently available, if earlier) unless such pre-funding is to accommodate a bona fide
administrative concern and is not for the principal purpose of accelerating deductions for federal
income tax purposes.




          (b) Participants’ Before Tax Contributions shall be treated under the Plan, ERISA and the Code
as nonforfeitable Employer contributions. Payroll Savings Contributions shall not be required to
be made from the current or accumulated profits of an Employer.




     3.5 No Make-Up of Contributions. Subject to Section 3.6 hereof, no Participant who fails to make the maximum amount of Payroll
Savings Contributions permitted under Section 3.1 hereof, or who voluntarily suspends his Payroll
Savings Contributions in accordance with Section 3.2 hereof, shall be permitted to make up such
contributions in any subsequent payroll period.



     3.6 Limitations on Before Tax Contributions.



          (a) No Participant shall be permitted to have Before Tax Contributions made to the Plan during
any Plan Year to the extent such contributions, plus any elective deferrals under any other
tax-qualified plan, exceed the dollar limit imposed under Section 402(g) of the Code, as adjusted
in accordance therewith, except to the extent permitted under Section 3.6(b) hereof. A Participant
shall promptly notify the Plan Administrator if such limitation is exceeded and the amount of such
excess, plus gain or loss allocable thereto for the Plan Year, and the period beginning on the day
after the close of such Plan Year and ending seven (7) days prior to the date of distribution of
excess contributions for such Plan Year (the “Gap Period”), shall be distributed to such
Participant within three and one-half (3-1/2) months after the close of the Plan Year



28









 






during which
such excess contributions were made or as of such later date that is permissible under applicable
regulations as may be determined by the Plan Administrator. Except as otherwise determined by the
Plan Administrator, the income allocable to a Participant’s excess Before Tax Contributions for a
Plan Year, and the Gap Period for such Plan Year, shall be determined by multiplying the total
investment income or loss (including dividends, interest, realized gains or losses, and unrealized
appreciation or depreciation) allocated to the Participant’s Before Tax Contributions Account for
such Plan Year and Gap Period by a fraction: (i) the numerator of which is the amount of excess
Before Tax Contributions allocated to the Employee’s Before Tax Contributions Account for the Plan
Year; and (ii) the denominator of which is the Employee’s total Before Tax Contributions Account
balance as of the beginning of the Plan Year increased by the total of the Employee’s Before Tax
Contributions for the Plan Year and the Gap Period for such Plan Year.




          (b) Participants who are eligible to make Before Tax Contributions hereunder and who have
attained age 50 before the close of the Plan Year shall be eligible to make “catch-up
contributions” in accordance with, and subject to the limitations of, Section 414(v) of the Code.
Such catch-up contributions shall not be taken into account for purposes of the provisions of the
Plan implementing the required limitations of Sections 402(g) and 415 of the Code. The Plan shall
not be treated as failing to satisfy the provisions of the Plan implementing the requirements of
Sections 401(k)(3), 410(b) or 416 of the Code, as applicable, by reason of Participants making such
catch-up contributions.



29









 







          (c) Notwithstanding any other provision of the Plan, the Automatic Contribution Arrangement
provisions of Sections 2.1(b) and (d), 2.2(b) and (c) and 4.2 hereof are intended to constitute a
“qualified automatic contribution arrangement” within the meaning of Treasury Regulations Section
1.401(k)-3(j)(i), and satisfy the Actual Deferral Percentage test and Average Contribution
Percentage test (only with respect to Employer Matching Contributions) of Section 401(k) and (m),
respectively, of the Code.




     3.7 Rollovers. Employees may, subject to such rules as may be prescribed by the Plan Administrator, roll over
all or a portion of (a) an eligible rollover distribution (within the meaning of Section 402(c)(4)
of the Code), (b) a rollover amount (within the meaning of Section 403(a)(4) of the Code), or (c) a
rollover contribution (within the meaning of Section 408(d)(3)(A)(ii) of the Code) to this Plan,
(each, a “Rollover Amount”); provided, however, that (x) in no event may any
“after-tax” employee contributions be rolled over into this Plan, and (y) Rollover Amounts may be
transferred to the Plan only in the form of cash and/or, in the discretion of the Plan
Administrator, one or more participant loan notes. If, after an amount has been rolled over to
this Plan, the Plan Administrator determines that such amount was not a valid Rollover Amount, the
Plan Administrator shall distribute such amount to the applicable Participant, together with
earnings attributable thereto, within a reasonable period after such determination.



ARTICLE 4




EMPLOYER CONTRIBUTIONS




     4.1 Company Retirement Contributions.
As of the last day of each payroll period occurring after December 28, 2007, subject to
Section 4.4 hereof, the Employer shall make a Company Retirement Contribution to the Plan on behalf
of each Participant



30









 




who is an Employee of such Employer equal to three and one-half percent (3.5%)
of the Compensation earned by the Participant while an Employee during such payroll period.
Company Retirement Contributions shall be transferred by the Employer to the Trustee no later than
the last calendar day of the month next following the applicable payroll period. The Company may,
in its sole discretion, permit participating Employers to make additional Company Retirement
Contributions with respect to their respective Employees, which contributions, if made, shall be
allocated among such Employees in proportion to the Compensation earned by such Employees during
the applicable payroll period(s).




     4.2 Matching Contributions.



          (a) Subject to Sections 4.4 and 4.5 hereof, each Employer shall make Employer Matching
Contributions to the Plan with respect to each Participant who is an Employee of that Employer in
an amount equal to one hundred percent (100%) of the first three percent (3%) of each such
Participant’s Compensation contributed to the Plan as Before Tax Contributions each payroll period
plus an amount equal to fifty percent (50%) of the next three percent (3%) of each such
Participant’s Compensation contributed to the Plan as Before Tax Contributions each payroll period.
Employer Matching Contributions made pursuant to this Section 4.2(a) shall be transferred to the
Trustee under the Plan concurrently with the delivery of the Participants’ Before Tax Contributions
and shall be allocated to the Accounts of the Participants on whose behalf they were made upon
receipt by the Trustee (or as soon as practicable thereafter). The contribution period for
Employer Matching Contributions shall be the Plan Year.



31









 







          (b) Subject to Sections 4.4 and 4.5 hereof, in the event that the total amount of Employer
Matching Contributions made to the Plan with respect to a Participant for a Plan Year is less than
an amount equal to the sum of (i) one hundred percent (100%) of the first three percent (3%) of
such Participant’s Compensation contributed to the Plan as Before Tax Contributions for such Plan
Year, and (ii) fifty percent (50%) of the next three percent (3%) of such Participant’s
Compensation contributed to the Plan as Before Tax Contributions for such Plan Year (the sum of (a)
and (b) being the “Total Match”), the Employer shall make an additional Employer Matching
Contribution to the Plan with respect to the Participant for such Plan Year equal to the difference
between (x) the Total Match for such Plan Year, and (y) the amount of Employer Matching
Contributions made to the Plan on behalf of the Participant pursuant to Section 4.2(a) hereof for
such Plan Year (such additional contribution being a “True-Up Contribution”). Employer Matching
Contributions made pursuant to this Section 4.2(b) shall be transferred to the Trustee not later
than the date required under the Code in order for such contributions to be deductible for such
Plan Year for federal income tax purposes and shall be allocated to the Accounts of the
Participants on whose behalf they were made upon receipt by the Trustee (or as soon as practicable
thereafter). Notwithstanding the foregoing, an Employer may, in its
discretion, calculate and contribute to the Plan True-Up Contributions more frequently than on
a Plan Year basis.




          (c) Notwithstanding Sections 4.2(a) and 4.2(b) hereof, the maximum amount of Employer Matching
Contributions made on behalf of a Highly Compensated Employee for any Plan Year shall be four
thousand five hundred dollars ($4,500).



32









 







          (d) In no event shall an Employer transfer an Employer Matching Contribution made pursuant to
this Section 4.2 to the Trustee on behalf of a Participant prior to the date the Participant
performs the services with respect to which the Employer Matching Contribution is being made (or
the date the Compensation for such services would be currently available, if earlier) unless such
pre-funding is to accommodate a bona fide administrative concern and is not for the principal
purpose of accelerating deductions for federal income tax purposes.




     4.3 Reinstatement of Forfeited Account Balances; Payment of Administrative Expenses.



          (a) Each Employer shall contribute to the Plan any amount necessary to reinstate any Company
Retirement Contributions, Employer Matching Contributions and Profit Sharing Contributions
previously forfeited pursuant to Section 6.3 hereof.




          (b) To the extent not paid by the Trustee from the Trust Fund, each Employer shall pay its pro
rata share of all administrative expenses of the Plan and of all fees and retainers of the Plan’s
Trustee, consultants, auditors and counsel (who may, but need not, be counsel to the Company and to
the Trustee). All expenses directly relating to the investments of the Trust Fund such as taxes,
commissions, registration charges, etc. shall be paid by the Trustee from the Trust Fund.




     4.4 Limitations on Contributions. Notwithstanding any other provision of the Plan, the limitations imposed by Section 415 of the
Code are hereby incorporated by reference. For purposes of applying the limitations imposed by
Section 415 of the Code, “compensation” as referred to therein, shall mean Section 415
Compensation.



33









 





     4.5 Limitations on After Tax Contributions and Employer Matching Contributions.



          (a) If the Average Contribution Percentage of Highly Compensated Employees for a Plan Year
would exceed the greater of: (i) the Average Contribution Percentage of Non-Highly Compensated
Employees for such Plan Year multiplied by one and one-fourth (1.25), or (ii) the lesser of: (A)
two percent (2%) plus the Average Contribution Percentage of Non-Highly Compensated Employees for
the preceding Plan Year, or (B) the Average Contribution Percentage of Non-Highly Compensated
Employees for the preceding Plan Year multiplied by two (2), the After Tax Contributions and/or
Employer Matching Contributions of the Highly Compensated Employees shall be reduced as set forth
in Section 4.5(b) hereof.




     (b) In order to determine the amount by which Highly Compensated Employees’ After Tax
Contributions and/or Employer Matching Contributions must be reduced and identifying the Highly
Compensated Employees whose After Tax Contribution and/or Employer Matching Contributions shall be
reduced, the Plan Administrator shall:



               (i) Determine the maximum Average Contribution Percentage for Highly Compensated Employees
permitted under Section 4.5(a) hereof;



               (ii) Identify the Highly Compensated Employees with Average Contribution Percentages in excess
of the maximum percentage amount determined pursuant to the preceding clause (i);



               (iii) Determine the dollar amount of the reduction in each such Highly Compensated Employee’s
After Tax Contributions and/or Employer Matching



34









 




Contributions that would be required so that the
Average Contribution Percentage of Highly Compensated Employees would not exceed the percentage
limit determined pursuant to the preceding clause (i), with the dollar amount of such reductions
being determined under a process whereby the Average Contribution Percentage of the Highly
Compensated Employee(s) with the highest Average Contribution Percentage(s) is reduced so that it
is equal to that of the Highly Compensated Employee(s) with the next highest Average Contribution
Percentage and repeating such process until the Average Contribution Percentage of Highly
Compensated Employees does not exceed the limits prescribed by Section 4.5(a) hereof; and




               (iv) Cause After Tax Contributions and/or Employer Matching Contributions equal to the total
dollar amount of After Tax Contributions and/or Employer Matching Contributions determined pursuant
to the preceding clause (iii) (the “Excess Contributions”) to be refunded in accordance with
Sections 4.5(c) and 4.5(d) hereof to the Highly Compensated Employees identified therein.



          (c) After Tax Contributions and/or Employer Matching Contributions of the Highly Compensated
Employee(s) with the highest total amount of After Tax Contributions and/or Employer Matching
Contributions shall be reduced by the amount required to cause the After Tax Contributions and/or
Employer Matching Contributions
of such Highly Compensated Employee(s) to be equal to the After Tax Contributions and/or
Employer Matching Contributions of the Highly Compensated Employee(s) who have the next highest
total amount of After Tax Contributions and/or Employer Matching Contributions; provided,
however, if a lesser reduction would equal the amount of Excess Contributions, the lesser
reduction shall be made. The process provided for by the



35









 






preceding sentence shall be repeated
until the total amount of the reductions equals the amount of Excess Contributions. For purposes
of the foregoing, the reductions made to a Highly Compensated Employee’s After Tax Contributions
and/or Employer Matching Contributions pursuant to this Section 4.5(c) shall be made first from
After Tax Contributions, and then if necessary Employer Matching Contributions. If the Average
Contribution Percentage of any Employee who is a Highly Compensated Employee for a Plan Year is
determined taking into consideration employee after tax contributions and employer matching
contributions allocated to his accounts under two (2) or more plans or arrangements described in
Section 401(m) of the Code that are maintained by the Group, pursuant to Section 1.11 hereof, and
the employee after tax contributions and employer matching contributions of the Highly Compensated
Employee must be reduced to satisfy the requirements of Section 401(m) of the Code, only the
employee after-tax contributions and employer matching contributions made to the plan being
corrected shall be reduced.




          (d) After Tax Contributions and/or any vested Employer Matching Contributions in excess of the
amount permitted under this Section 4.5, along with any gain or loss allocable thereto for the Plan
Year shall be distributed to the Highly Compensated Employees identified in Section 4.5(c) hereof
within two and one-half (2-1/2) months after the close of the relevant Plan Year (or as of such later date as may be
determined by the Plan Administrator, provided that such later date shall not be later than the
close of the Plan Year following the Plan Year in which the excess amounts were contributed). The
income allocable for a Plan Year to a Highly Compensated Employee’s excess After Tax Contributions
and/or Employer Matching Contributions



36









 






shall be determined by multiplying the total investment
income or loss (including dividends, interest, realized gains or losses, and unrealized
appreciation or depreciation) allocated to the Employee’s After Tax Contributions Account and/or
Employer Matching Contributions Account for such Plan Year by a fraction, (i) the numerator of
which is the amount of excess After Tax Contributions and/or Employer Matching Contributions
allocated to the Employee’s After Tax Contributions Account and/or Employer Matching Contributions
Account for the Plan Year; and (ii) the denominator of which is the Employee’s total After Tax
Contributions Account and/or Employer Matching Contributions Account balance as of the beginning of
the Plan Year increased by the total of the Employee’s After Tax Contributions and/or Employer
Matching Contributions for the Plan Year. Any nonvested Employer Matching Contributions that are
otherwise reduced pursuant to this Section 4.5 (together with any allocable gain or loss, as
determined in accordance with the preceding provisions of this Section 4.5(d)) shall be forfeited
within two and one-half (2-1/2) months after the close of the relevant Plan Year (or as of such
later date as may be determined by the Plan Administrator, provided that such later date shall not
be later than the close of the Plan Year following the Plan Year in which the excess amounts were
contributed) and used to reduce future Employer
contributions and shall not be considered a contribution for any purpose of the Plan, except
to the extent required by applicable regulations.




          (e) The Plan Administrator at any time, in its sole discretion, and upon notice to the
affected Participants, may unilaterally reduce, on a prospective basis, the maximum percentage of
Compensation that Highly Compensated Employees may make as After Tax Contributions to the Plan.



37









 







          (f) Notwithstanding any other provision of the Plan, the Automatic Contribution Arrangement
provisions of Sections 2.1(b) and (d), 2.2(b) and (c) and 4.2 hereof are intended to constitute a
“qualified automatic contribution arrangement” within the meaning of Treasury Regulations Section
1.401(k)-3(j)(i), and satisfy the Actual Deferral Percentage test and Average Contribution
Percentage test (only with respect to Employer Matching Contributions) of Sections 401(k) and (m),
respectively, of the Code. In determining whether the Plan satisfies the limitations of Section
4.5(a) hereof for a Plan Year with respect to After-Tax Contributions, the Plan Administrator may
elect to include or disregard all Employer Matching Contributions made hereunder on behalf of all
Employees for such Plan Year.




ARTICLE 5




ACCOUNTS




     5.1 Maintenance of Accounts. The Plan Administrator shall maintain for each Participant such Accounts as may be necessary to
reflect the portion of the Participant’s interest in the Trust Fund that is attributable to Company
Retirement Contributions, Before Tax Contributions, After Tax Contributions, Employer Matching
Contributions, Qualified Nonelective Contributions,
Profit Sharing Contributions and Rollover Contributions held by the Trustee on the Participant’s
behalf.



     5.2 Adjustments to Accounts; Statements Provided to Participants. As of each Valuation Date, the Accounts of each Participant shall be adjusted to reflect
contributions, withdrawals, distributions, income earned or accrued, and increase or decrease in
the value of Trust Fund assets since the preceding Valuation Date. Trust Fund earnings or losses
shall be allocated proportionately on the basis of Account



38









 




balances among the respective Accounts
and in a fair and equitable manner as determined by the Plan Administrator. The Plan Administrator
shall provide each Participant with a statement of his Account balances under the Plan on a
quarterly basis.




ARTICLE 6




VESTING AND FORFEITURES




     6.1 Before Tax Contributions, After Tax Contributions, Qualified Nonelective Contributions
and Rollover Accounts. The Before Tax Contributions Account, After Tax Contributions Account, Qualified Nonelective
Contributions Account and Rollover Account of a Participant shall be fully vested and
nonforfeitable at all times.



     6.2 Vesting of Company Retirement Contributions Account.
In the case of a Participant who is credited with at least one (1) Hour of Service on or after
January 1, 2008, the Participant’s Company Retirement Contributions Account shall be fully vested
and nonforfeitable upon the first to occur of the following: (a) the Participant’s completion of a
Period of Service of twenty-four (24) months, (b) the Participant’s attainment of age sixty-five
(65) (which shall be the Plan’s normal
retirement age) while an employee of the Group, (c) the Participant’s death while employed by
the Group, or (d) the Participant’s total disability while an employee of the Group, as certified
by either the Social Security Administration or the applicable Group member’s long-term disability
carrier.



     6.3 Vesting of Employer Matching Contributions Account and Profit Sharing Contributions
Account.



          (a) In the case of a Participant who (i) is credited with at least one (1) Hour of Service on
or after January 1, 2008, but who is hired as an Employee prior to



39









 






such date pursuant to a transfer
of employment covered by the Employee Matters Agreement, and (ii) participated in the Temple-Inland
Savings Plan or Guaranty Plan, immediately prior to such transfer, the Participant’s Employer
Matching Contributions Account and Profit Sharing Contributions Account shall vest in accordance
with the following schedule:




	 	 	 
	If the Period of Service of the	 	The Vested Percentage of Employer
	Participant, in Months, Equals or	 	Matching Contributions and Profit
	Exceeds	 	Sharing Contributions Accounts Shall Be
	 
	 	 
	twelve (12)

	 	thirty-four (34)
	twenty-four (24)

	 	one hundred (100)






          (b) In the case of a Participant who was hired as an Employee after December 31, 2007, the
Participant’s Employer Matching Contributions Account and Profit Sharing Contributions Account
shall vest in accordance with the following schedule:




	 	 	 
	 	 	The Vested Percentage of
	 	 	Employer Matching Contributions
	If the Period of Service of the	 	and Profit Sharing Contributions
	Participant, in Months,	 	Accounts Shall Be
	 
	 	 
	is less than twenty-four (24)

	 	zero (0)
	is at least twenty-four (24)

	 	one hundred (100)






          (c) Notwithstanding Sections 6.3(a) and (b) hereof, the Employer Matching Contributions
Account and Profit Sharing Contributions Account of any Participant shall be fully vested and
nonforfeitable upon the occurrence of any of the events described in clauses (a) through (d) of
Section 6.2 hereof. If a Participant makes a withdrawal or receives a distribution from any of his
Accounts (other than a distribution that results in the forfeiture of the nonvested portion of such
Account pursuant to Section





40












 




6.4 hereof) prior to the date that he has a vested percentage of one hundred percent (100%)
with respect to such Account, a separate subaccount shall be established for the balance of such
Account as of the time of distribution and the vested portion of such account shall be equal to
P(AB+D)-D, where P is the vested percentage at the relevant time; AB is the account balance at the
relevant time; D is the amount of the distribution; and the relevant time is the time at which,
under the Plan, the vested percentage in the Account cannot increase.




          (d) For purposes of Sections 6.3(a) and (b) hereof, in the case of a Participant described in
Section 1.49(b)(iii) hereof who was an employee of Temple Inland Inc. (including any member of the
“Temple-Inland Group” (within the meaning of the Employee Matters Agreement)) or Guaranty Financial
Group Inc. (including any member of the “Guaranty Group” (within the meaning of the Employee
Matters Agreement)) on December 28, 2007, and who was continuously employed by Temple-Inland Inc.
and/or Guaranty Financial Group Inc. for the period beginning on such date and ending on the date
of a transfer of employment from Temple Inland Inc. or Guaranty Financial Group Inc. to an
Employer, the Participant shall be treated as being hired as an Employee before January 1, 2008.




          (e) Notwithstanding the foregoing provisions of this Section 6.3, in the case of a Participant
who was a participant in a Merged Plan, the vested percentage of such Participant’s Company
Retirement Contributions Account, Employer Matching Contributions Account, Profit Sharing
Contributions Account and/or Subaccounts hereunder shall not be less than if the vesting schedule
under the Merged Plan applicable to amounts allocated to such Accounts and/or Subaccounts applied
to such Accounts



41









 






and/or Subaccounts under this Plan, except as otherwise provided in an Appendix hereto and
permitted under Section 411(a)(10) of the Code.




     6.4 Forfeitures.



          (a) The nonvested portion (if any) of a Participant’s Accounts shall be forfeited as of the
earlier of (i) the last day of the Plan Year in which the Participant receives a distribution of
his entire vested Account Balance (provided such distribution is made not later than the end of the
second Plan Year following the Plan Year in which the Participant terminates employment with the
Group), or (ii) in case of a Participant who does not have a nonforfeitable right to any portion of
his Account Balance attributable to Employer contributions (including elective deferrals, within
the meaning of Section 402(g) of the Code), the last day of the Plan Year in which the Participant
incurs five (5) consecutive One Year Breaks in Service. If a former employee of the Group who has
forfeited the nonvested portion of his Accounts later resumes employment by the Group before he has
five (5) consecutive One Year Breaks in Service, that portion of his Accounts that was previously
forfeited shall be reinstated (unadjusted for Trust Fund earnings and/or losses subsequent to the
date of forfeiture) and he shall receive full credit for his previous Periods of Service. The
source of the reinstated funds shall first be from the then applicable forfeitures, and to the
extent necessary then from Employer contributions as provided in Section 4.4(a) hereof.




          (b) Except to the extent provided in Sections 3.6, 4.4 and 4.5 hereof, forfeitures under the
Plan shall result only from a Participant’s termination of employment with the Group before
satisfying the vesting requirements of Sections 6.2 and 6.3 hereof. Forfeitures under the Plan
shall be used for the following purposes: (i) to



42









 






reinstate forfeited Accounts pursuant to Section 4.3 hereof; (ii) to reduce the amount of any
subsequent contributions of the applicable Employer under Article 4 hereof, and (iii) to reduce
administrative expenses of the Plan.




     6.5 Determination of Period of Service. In determining the Period of Service of a Participant for purposes of Sections 6.2 and 6.3
hereof, a Participant who has five (5) or more consecutive One Year Breaks in Service shall receive
credit for his Period of Service prior to such One Year Breaks in Service only if he had any
nonforfeitable interest in his Account Balance attributable to Employer contributions (including
elective deferrals within the meaning of Section 402(g) of the Code) at the time of his separation
from service with the Group. Notwithstanding the foregoing, in the case of any Participant who has
incurred five (5) consecutive One Year Breaks in Service, his Period of Service after such One Year
Breaks in Service shall not be taken into account for determining the vested percentage of his
Accounts attributable to periods prior to such five (5) consecutive One Year Breaks in Service.



ARTICLE 7




INVESTMENT OF CONTRIBUTIONS




     7.1 Investment Funds. Contributions made to the Plan shall be invested in accordance with the provisions of this
Article 7 (except as provided in Section 10.4 hereof) in such investment funds as the Investment
Committee may designate from time-to-time, provided that such investment funds shall include:



          (a) A Fixed Income Fund, which shall be provided by such investment vehicle as may be
designated by the Investment Committee.





43









 








          (b) A U.S. Treasury Fund, which shall be provided by such investment vehicle as may be
designated by the Investment Committee.




          (c) A Balanced Fund, which shall be provided by such vehicle as may be designated by the
Investment Committee.




          (d) A Retirement Savings Fund, which shall be provided by such vehicle as may be designated by
the Investment Committee.




          (e) One or more Target Retirement Funds, which shall be provided by such vehicle(s) as may be
designated by the Investment Committee.




     7.2 Loan Fund. The Plan shall maintain a Loan Fund which shall consist of promissory notes evidencing Loans
made pursuant to Article 10 hereof.



     7.3 Investment of Employer and Participant Contributions. Contributions under the Plan shall be invested as follows:



          (a) Payroll Savings Contributions, Employer Matching Contributions, Company Retirement
Contributions and Rollover Contributions, if any, shall be invested in accordance with the
investment elections made by Participants; provided, however, that in the case of
any Participant (including, but not limited to, an Automatic Contribution Participant) who does not
have in effect a valid investment election, such Participant’s Payroll Savings Contributions,
Employer Matching Contributions, Company Retirement Contributions and Rollover Contributions, if
any, shall be invested in the Target Retirement Fund appropriate for the Participant’s age. A
Participant may
direct, in one percent (1%) increments, that the Participant’s Payroll Savings Contributions,
Employer Matching Contributions, Company Retirement Contributions and Rollover Contributions, if
any, be invested in any of the Funds.




44









 





          (b) Amounts transferred to this Plan from a Merged Plan shall be invested in the Funds in
accordance with rules specified by the Plan Administrator.




          (c) Subaccounts shall be established for each Participant under each Fund to which
contributions on his behalf have been allocated.




     7.4 Change in Investment Elections. A Participant may change his investment election by giving prior Notice to the Plan
Administrator in accordance with rules prescribed by the Plan Administrator.



     7.5 Change in Existing Investments.



          (a) In accordance with rules prescribed by the Plan Administrator, a Participant may transfer
all or any portion (in one percent (1%) increments) of his Before Tax Contributions Account, After
Tax Contributions Account, Employer Matching Contributions Account, Company Retirement
Contributions Account, Profit Sharing Contributions Account, Qualified Nonelective Contributions
Account and Rollover Account invested in any of the Funds to any of the other Funds.




          (b) Transfers made pursuant to this Section 7.5 will be effected as of the close of business
on the Valuation Date that the transfer instruction is received by the Trustee if the instruction
is received on or before the Cut-Off Time, or as of the close of business on the next Valuation
Date, if the instruction is received after the Cut-Off Time or on a day that is not a Valuation
Date. Notwithstanding the foregoing, the Plan Administrator or the Trustee may, in its sole
discretion and either with or without prior
notice to Participants, suspend, delay, limit or restrict the execution of Participant
transfer elections for some or all Participants for such periods as the Plan Administrator or the
Trustee may determine in the event of electronic or other communications failures or for




45









 







purposes
of facilitating the merger of a Merged Plan into this Plan. For
purposes of this Section 7.5,
“Cut-Off Time” means the time prescribed by the Plan Administrator or the Trustee.




ARTICLE 8




WITHDRAWALS DURING EMPLOYMENT




     8.1 Withdrawal of After Tax Contributions. Subject to the provisions of this Article 8, a Participant may elect to withdraw all or any
portion of his After Tax Contributions Account.



     8.2 Withdrawals After Age 59-1/2. Subject to the provisions of this Article 8, a Participant who has attained age fifty-nine and a
half (59-1/2) and who has withdrawn all amounts available pursuant to Section 8.1 hereof may elect
to withdraw all or a portion of his Before Tax Contributions Account, Qualified Nonelective
Contributions Account, vested Company Retirement Contributions Account, vested Profit Sharing
Contributions Account and vested Employer Matching Contributions Account.



     8.3 Withdrawal of Employer Matching Contributions. Subject to the provisions of this Article 8, a Participant who has withdrawn all amounts
available pursuant to Sections 8.1 and 8.2 hereof may withdraw all or any portion of the vested
portion of his Employer Matching Contributions Account attributable to Employer Matching
Contributions made for Plan Years beginning before January 1, 2008;
provided, however, that in the case of a Participant who does not have at least
sixty (60) Months of Participation before the date of such withdrawal, the Employer Matching
Contributions attributable to Plan Years beginning before January 1, 2008, actually made by the
Participant’s Employer (or predecessor employer) during the most recent



46









 




preceding twenty-four (24)
months may not be withdrawn, except as permitted by Section 8.2 hereof.




     8.4 Hardship Withdrawals.



          (a) Subject to the provisions of this Article 8, a Participant may withdraw any amount, but
not less than five hundred dollars ($500), of his Before Tax Contributions (not including any
earnings thereon and reduced by the amount of any prior withdrawal of such contributions) from his
Before Tax Contributions Account on account of hardship. For purposes of this Plan a withdrawal is
on account of hardship only if: (i) the withdrawal is made because of an immediate and heavy
financial need of the Participant (as determined in accordance with Section 8.4(b) hereof), and
(ii) the withdrawal is necessary to satisfy such financial need (as determined in accordance with
Section 8.4(c) hereof).




          (b) For purposes of this Section 8.4, a distribution is on account of an immediate and heavy
financial need of a Participant only if the distribution is on account of:




               (i) expenses for (or necessary to obtain) medical care that would be deductible under Section
213(d) of the Code (determined without regard to whether the expenses exceed 7.5% of adjusted gross
income); or



               (ii) costs directly related to the purchase of a principal residence of the Participant
(excluding mortgage payments); or



               (iii) payment of tuition, related educational fees, and room and board expenses, for up to the
next twelve (12) months of post-secondary education for the



47









 




Participant, or the Participant’s
spouse, children, or dependents (as defined in Section 152 of the Code, without regard to Sections
152(b)(1), (b)(2) and (d)(1)(B) of the Code); or




               (iv) the need to prevent the eviction of the Participant from his principal residence or
foreclosure of the mortgage on his principal residence; or



               (v) payments for burial or funeral expenses for the Participant’s deceased parent, spouse,
children or dependents (as defined in Section 152 of the Code without regard to Section
152(d)(1)(B) of the Code); or



               (vi) expenses for the repair of damage to the Participant’s principal residence that would
qualify for the casualty deduction under Section 165 of the Code (determined without regard to
whether the loss exceeds 10% of adjusted gross income); or



               (vii) any other event or occurrence that the Commissioner of the Internal Revenue Service (the
“Commissioner”) may designate through the publication of revenue rulings, notices, and other
documents of general applicability as constituting immediate and heavy financial need.



          (c) For purposes of this Section 8.4, a distribution is necessary to satisfy an immediate and
heavy financial need of a Participant only if all of the following requirements are satisfied:




               (i) the distribution is not in excess of the amount of the immediate and heavy financial need
of the Participant;



               (ii) the Participant has obtained all distributions, other than hardship distributions, and
all non-taxable (at the time of the loan) loans currently available under this Plan and all plans
maintained by the Group; and



48









 





               (iii) the Participant is prohibited under the terms of the Plan or a legally enforceable
agreement from making elective contributions and employee contributions to the Plan and all other
plans maintained by the Group, to the extent required by applicable regulations, for six (6) months
after receipt of the hardship distribution.



          (d) A distribution shall also be deemed to be necessary to satisfy an immediate and heavy
financial need to the extent prescribed by the Commissioner of the Internal Revenue Service through
the publication of revenue rulings, notices, and other documents of general applicability.




     8.5 Withdrawal of Rollover Accounts. Subject to the provisions of this Article 8, a Participant may withdraw all or a portion of his
Rollover Account.



     8.6 Withdrawals of Certain Default Before Tax Contributions. An Automatic Contribution Participant may elect, by providing Notice to the Plan Administrator not
later than ninety (90) days after the date of the first Before Tax Contribution made on the
Participant’s behalf pursuant to Section 2.2(b) hereof, to withdraw from his Before Tax
Contributions Account the aggregate amount of Before Tax Contributions made on his behalf with
respect to the first payroll period to which
Section 2.2(b) hereof applied to the Automatic Contribution Participant through the effective date
of the withdrawal election (adjusted for allocable gains and losses to the date of distribution,
calculated in accordance with Section 3.6(a) hereof). The date of the first Before Tax
Contribution made pursuant to Section 2.2(b) hereof is the date that the Compensation that is
subject to the cash or deferred election would otherwise have been included in the Automatic
Contribution Participant’s income. The effective date of the



49









 




Automatic Contribution Participant’s
election shall not be later than the last day of the payroll period that begins after the date the
election is made. Employer Matching Contributions made on the withdrawn Before Tax Contributions
shall be forfeited. If a Participant elects to withdraw his Before Tax Contributions under this
Section 8.6, he shall be deemed to have elected to not make Before Tax Contributions effective as
of the effective date of the withdrawal. The withdrawal rights under this Section 8.6, the
Automatic Contribution Arrangement provisions of 2.1(b) and (d) and 2.2(b) and (c) hereof and the
default investment provisions of Article 7 and Section 10.4 hereof are intended to constitute an
“eligible automatic contribution arrangement” under Section 414(w) of the Code.




     8.7 Application for Withdrawals; Processing. A request for a withdrawal shall be made by a Participant by providing Notice to the Plan
Administrator within such period of time as the Plan Administrator may prescribe, subject to
Section 8.6 hereof. The Plan Administrator shall evaluate the written application of a Participant
for a hardship withdrawal in accordance with a uniform and nondiscriminatory policy applicable to
all Participants similarly situated and shall direct the Trustee to make a hardship distribution to
such Participant upon a finding of such
hardship in accordance with the provisions of Section 8.4 hereof. A Participant making application
hereunder for a hardship withdrawal shall provide to the Plan Administrator such information and
representations as the Plan Administrator deems necessary or appropriate. Withdrawal request
Notices pursuant to this Article 8 that are properly made shall be processed by the Plan
Administrator and Trustee as soon as practicable after receipt, subject to complying with the
requirements of Section 402(f) of the Code.



50









 





     8.8 Restrictions on Contributions After Certain Withdrawals. A Participant who makes a withdrawal pursuant to Section 8.1 hereof shall be prohibited from
making any After Tax Contributions under this Plan until the next Designated Enrollment Date
following the expiration of six (6) months after the receipt of such a distribution. A Participant
who makes a withdrawal pursuant to Section 8.4 hereof shall be prohibited from making any Payroll
Savings Contributions under this Plan (or any elective contributions or employee contributions
under any plan maintained by the Group) and from exercising any stock options granted under any
Group plan, until the next Designated Enrollment Date following the expiration of six (6) months
after the receipt of such a distribution.



     8.9 Limit on Number of Withdrawals. A Participant may make only one withdrawal under Sections 8.1, 8.2 and 8.3 hereof in any
consecutive six (6) month period (except as otherwise permitted under rules adopted and
consistently applied in a uniform and nondiscriminatory manner by the Plan Administrator);
provided, however, that (a) concurrent withdrawals pursuant to such Sections shall be treated as a
single withdrawal, and (b) withdrawals made in connection with a withdrawal pursuant to Section 8.4
hereof shall be permitted without regard to the
foregoing restrictions of this Section 8.9 and shall not be taken into account for purposes of this
Section 8.9.



     8.10 Effect of Withdrawals on Investments. Withdrawals from a Participant’s Accounts pursuant to this Article 8 shall be charged to each
Fund, on a pro rata basis, in which the Participant has a Subaccount under the relevant Accounts.
Withdrawals made pursuant to this Article 8 shall be made as of the Valuation Date as of which the



51









 




withdrawal is processed by the
Trustee and a Participant’s Accounts shall be adjusted accordingly.




     8.11 Timing and Form of Payment of Withdrawals. All withdrawals pursuant to this Article 8 shall be paid in cash in a lump sum as of the
Valuation Date that authorized distribution directions are received by the Trustee, provided that
any applicable legal requirements have been satisfied.



     8.12 Withdrawals Only Available to Employees. A Participant may make a withdrawal pursuant to this Article 8 only if he is an employee of the
Group at the time of the withdrawal.



ARTICLE 9




PAYMENT OF BENEFITS




     9.1 Distribution of Benefits Upon Occurrence of Distribution Event.



          (a) If a Distribution Event occurs with respect to a Participant, such Participant may, by
prior Notice to the Plan Administrator, elect to receive a distribution of his entire vested
Account Balance. As soon as practicable after receipt of a Participant’s distribution election
Notice, the Plan Administrator shall instruct the Trustee to distribute the Participant’s Account
Balance in accordance with the Participant’s
election; provided, however, that all distributions shall be subject to Section 9.1(d) hereof.




          (b) As soon as practicable after the Plan Administrator receives notice of (i) the occurrence
of a Distribution Event with respect to a Participant whose vested Account Balance does not exceed
one thousand dollars ($1,000), or (ii) the death of a Participant, the Plan Administrator shall
instruct the Trustee to distribute the vested




52









 







Account Balance of such Participant to the
Participant (or in the case of a deceased Participant, the Participant’s beneficiary, as designated
in accordance with Section 2.1(e) hereof), subject to complying with the requirements of Section
9.1(d) hereof.




          (c) If a Participant has no balance in his Before Tax Contributions Account and Qualified
Nonelective Contributions Account, and no portion of his Employer Matching Contributions Account,
Company Retirement Contributions Account and Profit Sharing Contributions Account is vested at the
time the Participant receives a distribution of his entire vested Account Balance, the Participant
shall be deemed to have received a distribution of his entire nonforfeitable interest in such
Accounts (which, since the Participant is not vested, is zero).




          (d) In no event shall the Plan Administrator direct the Trustee to distribute a Participant’s
vested Account Balance prior to satisfying the requirements of Section 402(f) of the Code.




     9.2 Payment of Benefits by Trustee; Form of Payment. Except as provided in Section 9.3 hereof, all amounts that become distributable after a
Distribution Event pursuant to Section 9.1 hereof shall be paid in the form of a cash lump sum
payment as soon as practicable after the Trustee receives a distribution instruction
from the Plan Administrator and any applicable legal requirements have been satisfied. The amount
distributed to a Participant or beneficiary shall be equal to the applicable Participant’s Account
Balance as of the date that the Trustee processes the distribution instruction.



     9.3 Required Minimum Distributions. Notwithstanding any other provision of the Plan to the contrary (other than the Minimum
Distribution Appendix hereto), the vested portion of a Participant’s Account Balance shall be, or
begin to be, distributed to



53









 




the Participant not later than the Participant’s Required Beginning
Date. If, on or before a Participant’s Required Beginning Date, the Participant does not die and
does not elect to receive a distribution of his entire vested Account Balance in the form of a cash
lump sum payment, (a) the Participant’s vested Account Balance shall begin to be distributed to the
Participant on the Participant’s Required Beginning Date in accordance with regulations issued
under Section 401(a)(9) of the Code over the life of the Participant (or over a period not
extending beyond the life expectancy of the Participant), and (b) the Participant may elect, by
prior Notice to the Plan Administrator, after the Participant’s Required Beginning Date to
accelerate distribution of the Participant’s remaining Account Balance in the form of a cash lump
sum payment described in Section 9.2 hereof. If the Participant dies prior to the distribution of
his entire Account Balance, the Participant’s remaining Account Balance shall be distributed to his
beneficiary as soon as administratively practicable after the date of the Participant’s death in a
single lump sum cash payment described in Section 9.2 hereof.




     9.4 Payment to Participant’s Estate. If there is no person alive to receive and receipt for any payment due under the Plan, the Plan
Administrator shall direct that such payment or payments be made to the estate of the deceased
Participant or the last deceased payee, as the case may be.



     9.5 Incapacity of Payee. If any person who is entitled to receive any benefits hereunder is, in the sole and absolute
judgment of the Plan Administrator, legally, physically or mentally incapable of personally
receiving and receipting for any distributions, the Plan Administrator in its sole and absolute
discretion may instruct the Trustee to make distribution to such other person, persons, institution
or institutions as in



54









 




the judgment of the Plan Administrator shall then be maintaining or have
custody over such distributee. The Plan Administrator may rely upon the report of a duly licensed
physician with regard to capacity or may in its sole and absolute discretion first require persons
claiming benefits to obtain an appropriate court order determining such person’s capacity.




     9.6 Plan Administrator Determines Payee. Except as otherwise provided by ERISA, the determination of the Plan Administrator as to the
identity of the proper payee for any payment and the amount properly payable shall be conclusive,
and payment in accordance with such determination shall, to the extent thereof, constitute a
complete discharge of all obligations to such payee under the Plan.



     9.7 Rollover Distributions.



          (a) A Participant may elect, at the time and in the manner prescribed by the Plan
Administrator, to have any portion of an Eligible Rollover Distribution paid directly to an
Eligible Retirement Plan specified by the Participant as a Direct Rollover. Notwithstanding the
foregoing, a Participant shall not be entitled to elect a Direct
Rollover of an amount that is not in excess of any minimum dollar amount that the Plan
Administrator may prescribe from time to time in accordance with applicable regulations.




          (b) For purposes of this Section 9.7, an “Eligible Rollover Distribution” is any distribution
of all or any portion of a Participant’s Accounts, except that an Eligible Rollover Distribution
shall not include (i) any distribution that is one of a series of substantially equal periodic
payments (paid not less frequently than annually) made for a specified period of ten years or more,
(ii) any distribution to the extent that such distribution is required under Section 401(a)(9) of
the Code, (iii) any hardship




55









 







distribution (within the meaning of Section 401(k)(2)(B)(i)(IV)), or
(iv) any withdrawal of default Before Tax Contributions under Section 8.6 hereof. A portion of a
distribution shall not fail to be an Eligible Rollover Distribution merely because such portion
consists of after-tax employee contributions not includible in gross income, but such portion may
be transferred only to an individual retirement account or individual retirement annuity described
in Section 408(a) or (b) of the Code, or to a qualified defined contribution plan described in
Section 401(a) or 403(a) of the Code that agrees to separately account for amounts so transferred,
including separately accounting for the portion of such distribution includible in gross income and
the portion of such distribution not so includible.




          (c) For purposes of this Section 9.7, an “Eligible Retirement Plan” is an individual
retirement account described in Section 408(a) of the Code, an individual retirement annuity
described in Section 408(b) of the Code, an annuity plan described in Section 403(a) of the Code,
or a qualified trust described in Section 401(a) of the Code, that accepts the Participant’s
Eligible Rollover Distribution. The term “Eligible
Retirement Plan” shall also include an annuity contract described in Section 403(b) of the
Code and an eligible plan under Section 457(b) of the Code which is maintained by a state,
political subdivision of a state, or any agency or instrumentality of a state or political
subdivision of a state and which agrees to separately account for amounts transferred into such
plan from this Plan. Notwithstanding the foregoing, with respect to the portion of an Eligible
Rollover Distribution that is not includible in gross income (determined without regard to the
exclusion for net unrealized appreciation on employer securities), the term “Eligible Retirement
Plan” shall only include an individual



56









 






retirement account or annuity described in Section 408(a) or
(b) of the Code, or a qualified defined contribution plan under Section 401(a) or 403(a) of the
Code that agrees to separately account for such amounts, including separately accounting for the
portion of such distribution which is includible in gross income and the portion of such
distribution which is not so includible.




          (d) The surviving spouse of a deceased Participant or a Participant’s spouse, former spouse,
or surviving spouse who is an alternate payee under a qualified domestic relations order (within
the meaning of Section 414(p) of the Code) shall be treated as a Participant for purposes of this
Section 9.7.




          (e) For purposes of this Section 9.7, a “Direct Rollover” is a payment by the Plan to the
Eligible Retirement Plan specified by the Participant.




          (f) Notwithstanding Sections 9.7(a) through (e) hereof, if a non-spouse beneficiary is
eligible to receive a distribution of a Participant’s Accounts, which distribution would otherwise
constitute an Eligible Rollover Distribution, and the non-spouse beneficiary is a designated
beneficiary (within the meaning of Treasury
Regulation Section 1.401(a)(9)-4), then to the extent permitted by Section 402(c) of the Code,
the non-spouse beneficiary may direct a trustee to trustee transfer of the distribution of the
Participant’s Accounts to an individual retirement account described in Section 408(a) of the Code
or an individual retirement annuity described in Section 408(b) of the Code (other than an
endowment contract) established for the purpose of receiving the distribution on behalf of the
non-spouse beneficiary, and (i) such transfer shall be treated as a Direct Rollover of an Eligible
Rollover Distribution for purposes of Section 402(c) of the Code, and (ii) such individual
retirement account or individual




57









 







retirement annuity shall be treated as an inherited individual
retirement account individual retirement annuity (within the meaning of Section 408(d)(3)(C)).




     9.8 Distributions Pursuant to Qualified Domestic Relations Orders. Notwithstanding any other provision of Article 8 hereof or this Article 9 to the contrary, all
or a portion of a Participant’s Accounts may be distributed at any time to an “alternate payee”
(within the meaning of Section 414(p) of the Code) pursuant to a “qualified domestic relations
order” (within the meaning of Section 414(p) of the Code) to the extent permitted by applicable
regulations.



ARTICLE 10




LOANS




     10.1 Availability of Loans; Application for Loans.



          (a) Subject to the terms and conditions of this Article 10, the Plan Administrator may, in its
sole discretion, direct the Trustee to loan to an Eligible Borrower as of any Valuation Date an
amount from the Eligible Borrower’s Accounts that is not less than $1,000 and that, when added to
any other Loan outstanding to the
Eligible Borrower does not exceed the lesser of (i) fifty percent (50%) of the Eligible
Borrower’s vested Account Balance; or (ii) $50,000 reduced by the highest outstanding balance of
loans, during the twelve (12) month period immediately preceding the date the Loan is made, from
the Plan and from any other tax qualified retirement plan maintained by the Group.




          (b) Loans shall be made available to Eligible Borrowers on a reasonably equivalent basis
without regard to race, color, religion, sex, age or national origin and after giving consideration
only to those factors which would be considered in a





58









 







normal commercial setting by an entity in the
business of making similar types of loans. Notwithstanding the foregoing, the Plan Administrator
may impose different terms and conditions on Loans made at different times and to different
Eligible Borrowers. The Plan Administrator may change the terms of any outstanding loan to the
extent required by applicable law.




          (c) An application for a Loan shall be made by an Eligible Borrower by providing Notice to the
Plan Administrator within such period of time prior to the date of the Loan as the Plan
Administrator may prescribe.




     10.2 Terms of Loans.



          (a) Loans shall bear a reasonable rate of interest established by the Plan Administrator that
will provide the Plan with a return commensurate with the interest rates charged by entities in the
business of lending money for loans which would be made under similar circumstances.




          (b) Loans shall be adequately secured, but in no event shall more than fifty percent (50%) of
an Eligible Borrower’s vested Account Balance under the Plan at
the time of the Loan be considered as security. The adequacy of such security shall be
determined by the Plan Administrator, in its sole discretion, in light of the type and amount of
security which would be required in the case of an otherwise identical transaction in a normal
commercial setting between unrelated parties on arm’s-length terms.




          (c) The period of repayment for each Loan shall be arrived at by mutual agreement between the
Plan Administrator and an Eligible Borrower, but such





59









 







period shall not in any case exceed five (5)
years; provided, however, that a Residential Loan may have a term of up to twenty-five (25) years.




          (d) An Eligible Borrower shall be permitted to have no more than two (2) outstanding Loans at
any time.




          (e) Loan repayments by a Borrower who is an employee of the Group shall be made through
regular payroll deductions made not less frequently than quarterly from amounts otherwise payable
to the Eligible Borrower. Any Borrower who is not receiving any compensation from a member of the
Group from which payroll deductions can be made shall be required to make required Loan repayments
by money order or a certified or cashier’s check delivered to the office of the Plan Administrator
on or before their respective due dates or otherwise in accordance with rules prescribed by the
Plan Administrator. Cash payments (including personal checks) shall not be accepted.




          (f) A Borrower shall be permitted to prepay, without penalty, all of the outstanding balance
of a Loan and accrued interest thereon at any time; provided, however, that partial prepayments
shall not be permitted.




          (g) Each Loan shall be evidenced by such documentation as may be required by the Plan
Administrator, including but not limited to an authorization from each Borrower who is an employee
of the Group to permit its Employer to effect repayment through regular payroll deductions.




          (h) Notwithstanding any other provision of this Plan to the contrary, no distribution shall be
made to any Borrower from that portion of a Borrower’s Before Tax Contributions Account that
secures one or more Loans made to such Borrower unless and until all such loans have been repaid.





60









 








          (i) Each Loan shall have such additional terms and conditions as may be determined by the Plan
Administrator in its sole discretion, including, but not limited to, terms and conditions relating
to application and administration fees, events of default, prepayments, and required security.




          (j) A loan that was made to a Participant under the terms of a Merged Plan and that is
transferred to this Plan in connection with the merger of the Merged Plan into this Plan or that
was rolled over into this Plan pursuant to Section 3.7 hereof shall be treated as a Loan hereunder
except that the terms of such a Loan shall be required to comply with the requirements of this
Article 10 only to the extent determined by the Plan Administrator in its discretion.




     10.3 Events of Default.



          (a) The outstanding balance of any Loan shall, at the sole option of the Plan Administrator,
immediately become due and payable without further notice or demand, upon the occurrence, with
respect to a Borrower of any of the following events of default:




               (i) any payment of principal or accrued interest on a Loan remains due and unpaid for a period
of ten (10) calendar days after the same becomes due and payable under the terms of the loan,
provided that the Plan Administrator is authorized to allow a grace period that does not continue
beyond the last day of the calendar quarter following the calendar quarter in which the required
payment was not made;



61









 





               (ii) the commencement of a proceeding in bankruptcy, receivership or insolvency by or against
the Borrower, but only to the extent then permitted under applicable federal law;



               (iii) the later of the termination of the employment of the Borrower with the Group for any
reason or the Borrower ceasing to be an Eligible Borrower;



               (iv) the Borrower attempts to make an assignment for the benefit of creditors of that portion
of his Before Tax Contributions Account securing his Loan or in any other security for his Loan;



               (v) a qualified domestic relations order (as such term is then defined in Section 414(p) of
the Code) with respect to the Borrower is received by the Plan Administrator; or



               (vi) any Loan proceeds are used, directly or indirectly, by the Borrower to purchase or carry
securities (as such term is then defined for purposes of Regulation G of the Federal Reserve Board
as promulgated pursuant to Section 7 of the Securities and Exchange Act of 1934).



          (b) Any payments of principal or interest on a Loan not paid when due shall bear such interest
thereafter as may be specified by the terms of the loan. The payment and acceptance of any sum or
sums at any time on account of a Loan after the occurrence of an event of default, or any failure
to act to enforce the rights granted hereunder upon the occurrence of an event of default, shall
not be a waiver of the right of acceleration set forth in Section 10.3(a) hereof.





62









 








          (c) If an event of default and the acceleration of the outstanding balance of any Loan shall
occur as described in Section 10.3(a) hereof, the Plan Administrator shall have the right to
direct the Trustee to pursue any remedies available to a creditor at law or under the terms of the
Loan, including the right to execute on the security for the Loan in satisfaction of the
outstanding balance of the Loan; provided, however, that the Plan Administrator shall not have the
right to direct the Trustee to execute on any amounts credited to a Borrower’s Before Tax
Contributions Account before the date on which such amounts may be distributed without adversely
affecting the tax-qualified status of the Plan.




     10.4 Accounting for Loans. A Participant Loan Subaccount shall be established as of the date a Loan is made to an Eligible
Borrower and an amount equal to the principal amount of the Loan shall be transferred from the
Eligible Borrower’s Accounts to his Participant Loan Subaccount, with the amount transferred coming
(a) first from earnings allocated to the Eligible Borrower’s Before Tax Contributions Account,
until exhausted, (b) second, from Before Tax Contributions, and (c) third, pro rata from the
Participant’s other Accounts based on the vested balance of such Accounts. The Loan shall be
treated as an investment of the
funds credited to the Eligible Borrower’s affected Accounts. Cash equal to the amount of the Loan
shall be obtained by liquidating, on a pro rata basis, the investments allocated to the Subaccounts
under the affected Accounts. Payments of principal and interest on a Loan shall be credited to the
Borrower’s Accounts that have a Loan Subaccount in proportion to the balances in such Subaccounts
and invested in the various Funds in the same proportion as the Eligible Borrower’s current Before
Tax Contributions are invested; provided, however, if the



63









 




Borrower is not making any current Before
Tax Contributions to the Plan, the payments shall be invested in the Target Retirement Fund
appropriate for the Borrower’s age.




ARTICLE 11




ADMINISTRATION OF THE PLAN




     11.1 Authority of Plan Administrator.



          (a) The Plan shall be administered on behalf of the participating Employers by an
administrator (the “Plan Administrator”) appointed by the Board of Directors or President of the
Company.




          (b) Except as otherwise provided herein, the Plan Administrator shall be solely responsible
for the administration, operation and interpretation of the Plan. The Plan Administrator shall
establish rules and regulations appropriate for the administration of the Plan. It shall have the
exclusive right and discretion to interpret the Plan and to decide any and all matters arising
thereunder or in connection with the administration of the Plan in its sole discretion, and it
shall endeavor to act, whether by general rules or by particular decisions, so as not to
discriminate in favor of any person or class of persons. Except as otherwise provided by ERISA,
such decisions, actions and records of the Plan
Administrator shall be conclusive and binding upon the Company, the Employers and all persons
having or claiming to have any right or interest in or under the Plan.




          (c) The Plan Administrator may delegate to (i) any agent or agents of the Group, or (ii) any
employee or employees of the Group, severally or jointly, the authority to perform any act or
function in connection with the administration of the Plan. The Plan Administrator may also, in
its discretion, contract with one or more third parties to perform any act or function in
connection with the administration of the Plan and with




64









 







respect to such acts or functions,
references herein to the Plan Administrator shall be deemed to be references to such third party.




          (d) The Plan Administrator shall maintain such records as are required under ERISA or under
the Code and such additional records as it deems necessary or appropriate showing the fiscal
transactions of the Plan.




     11.2 Claims Procedure.



          (a) If any Participant, beneficiary or other payee (a “claimant”) claims to be entitled to a
benefit under the Plan and the Plan Administrator determines that such claim should be denied in
whole or in part, the Plan Administrator shall notify such claimant of its decision in writing
(which may be provided electronically). Such notification will be written in a manner calculated
to be understood by the claimant and will contain (i) specific reasons for the denial, (ii)
specific reference to pertinent Plan provisions, (iii) a description of any additional material or
information necessary for the claimant to perfect such claim and an explanation of why such
material or information is necessary, and (iv) a description of the Plan’s review procedures and
the time limits applicable to such procedures, including a statement of the claimant’s right to
bring a
civil action under Section 502(a) of ERISA following the rendering of an adverse decision on
review. Such notification will be given within a reasonable period of time, but not later than
ninety (90) days after the claim is received by the Plan Administrator, unless the Plan
Administrator determines that special circumstances require an extension of time for processing the
claim. If the Plan Administrator determines that such an extension of time is required, written
notice of the extension shall be provided to the claimant prior to the end of the initial ninety
(90) day period. The extension notice shall



65









 






indicate the special circumstances requiring the
extension of time and the date by which the Plan Administrator expects to render its decision. In
no event shall the extension exceed an additional ninety (90) days from the end of the initial
ninety (90) day period. Any electronic notification provided by the Plan Administrator under this
Section 11.2 shall comply with the standards imposed by 29 C.F.R. 2520.104b-1(c)(1)(i)-(iv).




               (i) Within sixty (60) days after the date on which a claimant receives a written notice of a
denied claim, the claimant may file a written request with the Plan Administrator for a review of
the denied claim. If the claimant requests a review of the denied claim, the claimant shall be
entitled to submit to the Plan Administrator written comments, documents, records and other
information relating to the claim for benefits and to receive, upon request and free of charge,
reasonable access to, and copies of, all documents, records and other information relevant to the
claimant’s claim for benefits. The Plan Administrator shall perform its review taking into account
all comments, documents, records and other information submitted by the claimant relating to the
claim without regard to whether such information was submitted or considered in the initial benefit
determination. The Plan Administrator will notify the claimant of its
decision in writing (which may be provided electronically). If the claim is denied, the
notification will be written in a manner calculated to be understood by the claimant and will
contain (A) the specific reasons for the denial, (B) references to pertinent provisions of the
Plan, (C) a statement that the claimant is entitled to receive, upon request and free of charge,
reasonable access to, and copies of, all documents, records and other information relevant to the
claimant’s claim for benefits, and (D) a statement of the claimant’s right to bring an action under
Section 502(a) of ERISA.



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               (ii) The review provided for by Section 11.2(b)(i) will be made within a reasonable period of
time, but not later than sixty (60) days after the Plan Administrator receives the request for
review, unless the Plan Administrator determines that special circumstances require an extension of
time for processing the claim. If the Plan Administrator determines that an extension of time is
required, written notice of the extension shall be furnished to the claimant prior to the end of
the initial sixty (60) day period. The extension notice shall indicate the special circumstances
requiring the extension of time and the date by which the Plan Administrator expects to render its
decision. In no event shall the extension exceed an additional sixty (60) days from the end of the
initial sixty (60) day period. If the extension of time is needed due to the claimant’s failure to
submit information necessary to make a decision, the period during which the Plan Administrator
must make a decision shall be tolled from the date the extension notice is sent to the claimant
until the date the claimant responds to the request for additional information.



     11.3 Financial Statements. The Plan Administrator shall engage a “qualified public accountant” (as defined in Section
103(a)(3)(D) of ERISA) to prepare such audited financial statements of the operation of the Plan
as shall be required by ERISA or by the Code.



     11.4 Liability of Plan Administrator. The Plan Administrator (and each member of any committee that serves as the Plan Administrator)
shall not be liable for any act or omission on its own part, excepting only its own willful
misconduct or gross negligence except as is otherwise expressly provided by ERISA. To the fullest
extent permitted by applicable laws and to the extent not insured against by any insurance



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company
pursuant to the provisions of any applicable insurance policy, the Company shall indemnify and save
harmless the Plan Administrator (and each member of any committee that serves as the Plan
Administrator) against any and all claims, demands, suits or proceedings in connection with the
Plan and Trust Fund that may be brought by Participants or their spouses or other designated
beneficiaries (or estates), Employees of participating Employers or by any other person,
corporation, entity, government or agency thereof; provided, however, that such indemnification
shall not apply with respect to acts or omissions of willful misconduct or gross negligence. The
Company may, at the Company’s expense, settle any such claim or demand asserted or suit or
proceeding brought against the Plan Administrator (or any member of any committee that serves as
the Plan Administrator) when such settlement appears to be in the best interests of the Company.




ARTICLE 12




MANAGEMENT OF THE TRUST FUND




     12.1 Designation of Trustee. All contributions shall be made to, and held in trust by, the Trustee of the Plan, who shall be
appointed by the Board of Directors or President of the Company, with such powers in the Trustee as
to investment, reinvestment, control and disbursement of the Trust Fund as may be provided in the
Trust Agreement and shall be in accordance with the Plan and permitted under ERISA and under the
Code. The Board of Directors or President of the Company may remove any Trustee at any time, with
or without cause, upon reasonable notice, and upon such removal or upon the resignation of any
Trustee, the Board of Directors or President of the Company shall promptly designate a successor
Trustee.



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     12.2 Plan Assets Held in Trust.



          (a) All assets held by the Trustee under the Trust Fund shall be held in trust for the
exclusive benefit of Participants or, if deceased, their spouses or other designated beneficiaries
(or estates), and no part of the corpus or income of the Trust Fund shall be used for, or diverted
to, purposes other than for the exclusive benefit of such persons under the Plan or for the payment
of reasonable expenses of administering the Plan; provided, however, that if any contribution is
made by an Employer as the result of a mistake of fact made in good faith or is conditioned on the
deductibility of such contribution under Section 404(a) of the Code, that Employer may direct the
Trustee to return within one (1) year after the date of the payment or after the date the deduction
is denied, whichever is applicable, the amount contributed by mistake of fact or the amount that is
not deductible, whichever is applicable. Earnings attributable to any excess Employer
contributions shall not be returned to that Employer, but losses shall reduce the
amount to be returned. All contributions to the Plan are conditioned on their deductibility
under Section 404 of the Code.




          (b) No person shall have any interest in or right to any part of the earnings of the Trust
Fund, or any rights in, to or under the Trust Fund or any part of its assets except to the extent
expressly provided in the Plan. Notwithstanding anything herein to the contrary, the spouse,
former spouses, beneficiary or any other person claiming benefits on behalf of any Participant
shall have absolutely no rights whatsoever under the Plan prior to the death of that Participant
except as may otherwise be expressly provided under ERISA (e.g., spousal consent rights and
qualified domestic relations orders).




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     12.3 Appointment of Investment Manager. The Investment Committee may appoint one or more investment managers to manage any assets of
the Plan. As used herein, the term “investment manager” shall mean any person or entity who: (a)
has power to manage, acquire or dispose of any assets of the Plan; (b) is (i) registered as an
investment advisor under the Investment Advisors Act of 1940, (ii) a bank, as defined in that Act,
or (iii) an insurance company qualified, under the laws of more than one state, to perform services
described in (a) above; and (c) has acknowledged in a writing delivered to the Investment Committee
and the Trustee that it is a fiduciary with respect to the Plan. The Investment Committee shall be
a “named fiduciary” for purposes of Section 402(a)(2) of ERISA.



ARTICLE 13




AMENDMENT OF THE PLAN




     13.1 Amendment. The Plan may be wholly or partially amended or otherwise modified at any time by the Board of
Directors or President of the Company, or by the Plan Administrator with respect to Appendix I
hereto; provided, however, that:



          (a) except as otherwise provided herein and permitted under the Code and under ERISA, no
amendment or modification shall be made at any time prior to the satisfaction of all liabilities
under the Plan with respect to Participants or, if deceased, their spouses or other designated
beneficiaries (or estates) and with respect to the expenses of the Plan which would permit any part
of the corpus or income of the Trust Fund to be used for, or diverted to, purposes other than for
the exclusive benefit of such persons under the Plan and for the payment of the expenses of the
Plan;




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          (b) no amendment or modification shall have any retroactive effect so as to deprive any person
of any benefits already accrued, except that any amendment may be made retroactive which is
necessary to bring the Plan into conformity with governmental regulations in order to retain the
qualification of the Plan and Trust Fund under Sections 401(a), 401(k) and 501(a) of the Code or to
meet the requirements of ERISA and other applicable laws;




          (c) no amendment or modification shall be made which substantially increases the duties or
liabilities of the Trustee, the Plan Administrator, the Investment Committee or any Employer
without the prior written consent of the party so affected; and




          (d) no amendment shall be made which changes the vesting requirements in Article 6 hereof or
in Section 16.4 hereof, if applicable, unless each Participant whose Period of Service was at least
three (3) years as of the effective date of
such amendment is permitted to elect to remain under the pre-amendment vesting requirements
with respect to all of his Plan benefits accrued both before and after the effective date of such
amendment.




ARTICLE 14




DISCONTINUANCE OF THE PLAN




     14.1 Right To Terminate Plan. The Plan may be terminated, in whole or in part, at any time by the Board of Directors or
President of the Company, but only upon condition that such action is taken as shall render it
impossible for any part of the corpus or income of the Trust Fund to be used for, or diverted to,
purposes other than for the exclusive benefit of the Participants or, if deceased, their spouses or
other designated



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beneficiaries (or estates) under the Plan and for the payment of reasonable costs
of administering the Plan, except as otherwise provided herein and permitted under ERISA and/or
under the Code. In the event of any termination of the Plan, in whole or in part, or the complete
discontinuance of contributions hereunder, the Employer Matching Contributions Account, Company
Retirement Contributions Account and any Profit Sharing Contributions Account of each Participant
affected by the partial or complete termination shall become fully vested and nonforfeitable.




     14.2 Valuation of Trust Fund upon Termination. If the Plan is terminated, in whole or in part, pursuant to Section 14.1, and the Board of
Directors or President of the Company determines that the Trust Fund shall be terminated, the Trust
Fund shall be revalued as of such date, and the current value of all Accounts shall be distributed
in accordance with Article 9.



     14.3 Continuation of Trust. If the Plan is terminated, in whole or in part, pursuant to Section 14.1, but the Board of
Directors or President of the Company determines that the Trust Fund shall be continued pursuant to
its terms and the provisions of this Section, no further contributions shall be made by either the
Participants or by the Employers, but the Trust Fund shall be administered as though the Plan were
otherwise in full force and effect. If the Trust Fund is subsequently terminated, the provisions
of Section 14.2 shall then apply.



     14.4 Plan Mergers and Transfers of Assets and Liabilities.



          (a) No merger or consolidation with, or transfer of assets or liabilities to, any other
pension or retirement plan shall be made unless the benefits each Participant in the Plan would
receive if the other plan were terminated immediately after such



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merger, consolidation or transfer
of assets and liabilities would be at least as great as the benefits he would have received had the
Plan been terminated immediately before such merger, consolidation or transfer.




          (b) The Plan Administrator, in its sole discretion, may at any time (i) transfer to an
Affiliate Plan assets and liabilities relating to Participants who are covered by such Affiliate
Plan and (ii) accept the transfer of assets and liabilities to this Plan from an Affiliate Plan
with respect to Participants who have account balances under such Affiliate Plan. In the
discretion of the Plan Administrator, and in accordance with rules prescribed by the Plan
Administrator, assets may be transferred between this Plan and an Affiliate Plan either in cash or
in-kind.




          (c) All transfers of account balances between this Plan and an Affiliate Plan and any merger
of a Merged Plan into this Plan shall comply with Sections
411(a)(10) of the Code (relating to changes in vesting schedules) and 411(d)(6) of the Code
(relating to reductions of accrued benefits and elimination of optional forms of benefit). To the
extent that an Affiliate Plan or a Merged Plan provides an optional form of benefit with respect to
all or a portion of an amount transferred to this Plan that is not otherwise available under this
Plan, such optional form of benefit shall nonetheless be provided under this Plan with respect to
such applicable portion of the transferred amount under the same terms and conditions as such
optional form of benefit was provided under the transferee Affiliate Plan or Merged Plan as of the
date of transfer, subject to such terms and conditions as the Plan Administrator may impose that
are consistent with the requirements of Section 411(d)(6) of the Code. The Plan Administrator may
establish such accounts and subaccounts as it deems necessary or appropriate to account for



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amounts
transferred to the Plan pursuant to this Section 14.4(c). If the assets of any Merged Plan that
are transferred to this Plan in connection with a Plan Merger include one or more loan notes
evidencing one or more loans made to a participant in a Merged Plan, such loans shall be
administered in accordance with their respective terms except to the extent determined otherwise by
the Plan Administrator.




          (d) Notwithstanding the provisions of Section 14.4(c) hereof, the merger of a Merged Plan into
this Plan or the transfer of account balances from a Merged Plan to this Plan shall, as of the
applicable Merger Date, constitute an amendment that (i) except as otherwise provided, is adopted
and effective as of the applicable Merger Date and (ii) causes all optional forms of benefit made
available under this Plan pursuant to Section 14.4(c) hereof that would not otherwise be available
hereunder (each, a “Protected Benefit”) to cease to be available hereunder to a Participant to the
maximum
extent permitted under Treasury Regulation Section 1.411(d)-4, provided that (A) the amendment
shall not apply with respect to any distribution to a Participant with an annuity starting date
that is earlier than the date on which such amendment is effective with respect to such Participant
and (B) no Protected Benefit shall cease to be available hereunder to a Participant unless the
Participant is entitled to elect to receive that portion of the Participant’s Account Balance that
could otherwise be paid in the form of the Protected Benefit in the form of a single-sum
distribution form that is otherwise identical (within the meaning of Treasury Regulation Section
1.411(d)-4) to the Protected Benefit.





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ARTICLE 15




STATEMENT OF INTENT




     15.1 Qualification. The Plan and the related Trust Agreement are intended and designed to qualify under Sections
401(a), 401(k), and 501(a) of the Code and the Plan is hereby designated a profit sharing plan for
purposes of Sections 401(a), 401(k), 402, 412 and 417 of the Code. Anything contained in the Plan
to the contrary notwithstanding, if the Internal Revenue Service determines that the Plan and the
related Trust Agreement do not meet the requirements of Sections 401(a), 401(k) and 501(a) of the
Code, then the Board of Directors and President of the Company shall be entitled to make such
modifications, alterations and amendments of the Plan and the related Trust Agreement as are
necessary to retain a favorable determination and such modifications, alterations and amendments
may be effective retroactively to the extent required to retain a favorable determination. The
Plan Administrator and/or the Company may, in their discretion, take any and all
such actions as they deemed necessary or appropriate with respect to the administration and
operation of the plan, including taking any corrective action authorized under the Internal Revenue
Service Employee Plans Compliance Resolution Program (or any successor or similar program), for
purposes of maintaining the Plan’s and Trust’s compliance with the requirements of Sections 401(a),
401(k) and 501(a) of the Code.



     15.2 Section 404(c) of ERISA. This Plan is designed to satisfy the requirements of Section 404(c) (including 404(c)(5)) of
ERISA and the regulations thereunder.



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     15.3 Responsibility of Named Fiduciaries. It is declared to be the express purpose and intention of the Plan that each “named fiduciary”
as such term is defined in Section 402(a)(2) of ERISA shall have individual responsibility for the
prudent execution of the specific functions and duties assigned to him, and none of such
responsibilities or any other responsibility shall be shared by two (2) or more of such named
fiduciaries unless such sharing shall be provided by a specific provision of the Plan or of the
Trust Agreement. Whenever one (1) named fiduciary is required by the Plan or by the Trust
Agreement to follow the directions of another named fiduciary, the two (2) named fiduciaries shall
not be deemed to have assigned a shared responsibility, but the responsibility of the named
fiduciary giving the directions shall be deemed his sole responsibility, and the responsibility of
the named fiduciary receiving those directions shall be to follow them insofar as such instructions
are on their face proper under applicable law and not prohibited under Section 4975(c) of the Code
or under Section 406 of ERISA.



     15.4 Legal Rights and Liabilities.



          (a) It is further declared to be the express purpose and intention of the Plan that, except as
otherwise provided by ERISA, no liability whatsoever shall attach to or be incurred by the
shareholders, employees or directors of the Company or of any Employer or of any representatives
appointed hereunder by the Board of Directors or President of the Company under or by reason of any
of the terms and conditions of the Plan. Neither the establishment and maintenance of the Plan nor
any provision or amendment thereof nor any act or omission under or resulting from the operation of
the Plan shall be construed:




76









 








          (b) as conferring upon any Employee, Participant, spouse, beneficiary or any other person,
firm, corporation or association, any legal or equitable right or claim against the Plan
Administrator, the Company, any Employer, the Trustee, or any shareholder, officer, employee or
director of any Employer, except to the extent that such right or claim shall be specifically and
expressly provided in the Plan or provided by law. Any and all such rights and claims, whether
arising by common law or in equity or created by statute, are hereby expressly waived and released
to the fullest extent permitted by law by every Employee on behalf of himself, his spouse or other
beneficiary and any and all other persons who might claim through him as a condition of and as a
part of the consideration for the contributions made by the Employers under the Plan and for the
receipt of benefits hereunder;




          (c) as an agreement, consideration or inducement of employment or as affecting in any manner
the rights or obligations of the Employers or of any Employee to continue or to terminate the
employment relationship at any time; or




          (d) as creating any responsibility or liability of the Plan Administrator, the Employers or
the Trustee for the validity or effect of the Plan or of any investment at any time included in the
Trust Fund.




ARTICLE 16




TOP-HEAVY RULES




     16.1 Applicability of Rules. The rules set forth in this Article 16 shall be applicable with respect to any Plan Year in
which the Plan is determined to be a Top-Heavy Plan. The provisions of this Article 16 shall be
applied only to the extent



77









 




necessary to comply with Section 416 of the Code and in a manner
consistent with all requirements imposed under Section 416 of the Code.




     16.2 Determination of Top-Heavy Status. The Plan shall be considered a Top-Heavy Plan with respect to any Plan Year if as of the last
calendar day of the immediately preceding Plan Year (the “determination date”):



          (a) The present value of the Accrued Benefits of key employees (as such term is defined below)
exceeds sixty percent (60%) of the present value of the Accrued Benefits of all Participants and
former Participants other than former key employees (as such term is defined below); provided,
however, that the Accrued Benefits of any Participant who has not performed any services for the
Group as an employee during a five (5) year period ending on the determination date (as such term
is defined above) shall be disregarded; or




          (b) the Plan is part of a required aggregation group (as such term is defined below) and the
required aggregation group is top-heavy; provided, however, that the Plan shall not be considered a
Top-Heavy Plan with respect to any Plan Year in which the Plan is part of a required or permissive
aggregation group (as such terms are defined below) which is not top-heavy. For purposes of this
Article 16, the term “key employee” shall have the meaning prescribed in Section 416(i) of the
Code and the regulations thereunder.




          (c) For purposes of this Article 16, the term “required aggregation group” shall include:




               (i) all qualified retirement plans maintained by the Group in which a key employee (as such
term is defined above) is a participant, and



78









 





               (ii) any other qualified retirement plans maintained by the Group which enable any qualified
retirement plan described in the preceding clause (i) above to meet the requirements of Section
401(a)(4) or of Section 410 of the Code.



          (d) For purposes of this Article 16, the term “permissive aggregation group” shall include all
qualified retirement plans that are part of a required aggregation group (as such term is defined
above) and any other qualified retirement plans maintained by the Group if such group will continue
to meet the requirements of Sections 401(a)(4) and 410 of the Code.




          (e) Solely for the purpose of determining if the Plan, or any other plan included in a
required aggregation group of which the Plan is a part, is top-heavy (within the meaning of Section
416(g) of the Code), the Accrued Benefits of an Employee other than a key employee shall be
determined under:




               (i) the method, if any, that uniformly applies for accrual purposes under all plans maintained
by the Group, or



               (ii) if there is no such method, as if such benefit accrued not more rapidly than the slowest
accrual rate permitted under the fractional accrual rule of Section 411(b)(1)(C) of the Code.



     16.3 Determination of Accrued Benefits. For purposes of this Article 16, Accrued Benefits with respect to any Plan Year shall be
determined as of the determination date (as such term is defined in Section 16.2 hereof) for that
Plan Year based on Account balances as of the most recent Valuation Date within a consecutive
twelve (12) month period ending on such determination date; provided, however, that such Account
balances shall be adjusted to the extent required by Section 416 of the



79









 




Code to increase such
Account balances by the amount of any Employer or Participant contributions and of any rollovers or
plan-to-plan transfers (other than rollovers or plan-to-plan transfers which are initiated by a
Participant from any qualified retirement plan maintained by an unrelated employer after December
31, 1983) made and allocated after the Valuation Date but on or before such determination date and
by any distributions made to Participants prior to the Valuation Date during any of the five (5)
consecutive Years immediately preceding the Plan Year for which the determination as to whether the
Plan is a Top-Heavy Plan is being made (including distributions from a terminated plan which, if
not terminated, would have been part of a required aggregation group (as such term is defined in
Section 16.2 hereof) and to reduce such Account balances by any rollovers or plan-to-plan transfers
made to the Plan on or
before the Valuation Date which are initiated by a Participant from any qualified retirement
plan maintained by an unrelated employer.




     16.4 Vesting for Top-Heavy Years. Notwithstanding the provisions of Article 6, with respect to any Plan Year in which the Plan
is determined to be a Top-Heavy Plan, a Participant’s Accrued Benefit which is derived from
Employer Retirement or Matching contributions shall vest in accordance with the following vesting
schedule unless such Participant’s vested benefit percentage, as determined under Article 6, is
greater:



	 	 	 
	Period of Service	 	Vested Percentage of Employer Account Shall Be
	Less than three (3) years

	 	zero percent (0%)
	Three (3) years or more

	 	one hundred percent (100%)





provided, however, that if the Plan becomes a Top-Heavy Plan and subsequently
ceases to be such, the vesting schedule shown above shall continue to apply but only with




80









 







respect
to those Participants whose Period of Service is equal to or greater than three (3) years as of the
last calendar day of the final Top-Heavy Year.




     16.5 Contributions for Top-Heavy Years. With respect to any Plan Year in which the Plan is a Top-Heavy Plan, the minimum amount of
Employer contributions to be allocated to the Accounts of any Employee who is eligible to be a
Participant (including forfeitures constructively allocated to that Participant’s Accounts and any
employer contributions and forfeitures allocated to that Participant under any other qualified
defined contribution plans maintained by the Group but excluding any employee elective
contributions) who had not separated from service with the Group as of the last calendar day of
that Plan Year, regardless of the number of Hours of Service completed by that Participant during
that
Plan Year, or whether the Employee declines to make mandatory contributions (if the Plan
otherwise requires same) and who is not a key employee (as such term is defined in Section 16.2
hereof) for that Plan Year, shall not be less than three percent (3%) of that Participant’s Section
415 Compensation in that Plan Year; provided, however, that the percentage of Section 415
Compensation allocated to the Employer Matching Contributions Account, Company Retirement
Contributions Account, and Qualified Nonelective Contributions Account of any Participant who is
not a key employee (as such term is defined in Section 16.2) under this Article with respect to
that Plan Year shall not exceed the highest percentage of Section 415 Compensation allocated to the
Employer Matching Contributions Account, Company Retirement Contributions Account, and Qualified
Nonelective Contributions Account of any Participant who is a key employee in that Plan Year.
Notwithstanding the foregoing, in the event that an Employee who is otherwise entitled to a minimum
benefit equal to three



81









 




percent (3%) of his Section 415 Compensation pursuant to this Section is a
participant in a defined benefit plan that is a part of this Plan’s required or permissive
aggregation group, such Employee shall only be entitled to a combined benefit (determined in
accordance with the requirements of Treasury Regulation § 1.416-1, Q&A M-12) under the plans equal
to the minimum benefit required under the defined benefit plan pursuant to Section 416 of the Code.




     16.6 Certain Changes Effective January 1, 2002.



          (a) This Section 16.6 shall apply for purposes of determining whether the plan is a top-heavy
plan under Section 416(g) of the Code for Plan Years beginning after December 31, 2001, and whether
the Plan satisfies the minimum benefits
requirements of Section 416(c) of the Code for such years. This Section modifies the
foregoing provisions of this Article 16.




          (b) The term “key employee” means any employee or former employee (including any deceased
employee) who at any time during the Plan Year that includes the determination date was an officer
of the employer having annual Section 415 Compensation greater than $130,000 (as adjusted under
Section 416(i)(1) of the Code for Plan Years beginning after December 31, 2002), a five-percent
owner of the employer, or a one-percent owner of the employer having annual Section 415
Compensation of more than $150,000. The determination of who is a key employee will be made in
accordance with Section 416(i)(1) of the Code and the applicable regulations and other guidance of
general applicability issued thereunder.





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          (c) This Section 16.6(c) shall apply for purposes of determining the present values of accrued
benefits and the amounts of account balances of employees as of the determination date.




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



               (ii) The accrued benefits and accounts of any individual who has not performed services for
the employer during the one-year period ending on the determination date shall not be taken into
account.



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




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          (e) Notwithstanding the foregoing, in the event that an employee who is otherwise entitled to
a minimum benefit equal to three percent (3%) of his Section 415 Compensation pursuant to this
Section is a participant in a defined benefit plan that is a part of this Plan’s required or
permissive aggregation group, such employee shall only be entitled to a combined benefit
(determined in accordance with the requirements of Treasury Regulation § 1.416-1, Q&A M-12) under
the plans equal to the minimum benefit required under the defined benefit plan pursuant to Section
416 of the Code.




ARTICLE 17




GENERAL PROVISIONS




     17.1 Nonalienation of Benefits.



          (a) To the fullest extent permitted by law, no benefits under the Plan shall be subject in any
manner, voluntarily or involuntarily, to anticipation, alienation, sale, transfer, assignment,
pledge, garnishment, encumbrance or charge, and any action by way of anticipation, alienation,
selling, transferring, assigning, pledging, garnishing, encumbering or charging the same shall be
void and of no effect, and no such benefits shall be in any manner liable for or subject to the
debts, contracts, liabilities, engagements or torts of the person entitled to such benefits. The
preceding sentence shall also apply to the creation, assignment or recognition of a right to any
benefit payable with respect to any Participant or to any beneficiary under the Plan pursuant to a
domestic relations order, unless such order is determined to be a qualified domestic relations
order as defined in Section 414(p) of the Code. The Plan Administrator shall establish such
procedures for evaluating and determining the status of any domestic relations order and




84









 







shall give
due notice to any affected parties (Participants and alternate payees) as required by law.




          (b) Subject to any applicable provision of law to the contrary, if any Participant or any
beneficiary under the Plan shall become bankrupt or attempt to anticipate, alienate, sell,
transfer, assign, pledge, garnish, encumber or charge any benefits, then such benefits shall, in
the sole discretion of the Plan Administrator, cease and terminate. In that event, the Plan
Administrator shall hold or apply the benefits or any part thereof to or for such Participant or
beneficiary, his spouse or children or other
dependents, or any of them, in such manner and in such proportions as the Plan Administrator
shall, in its sole discretion, determine. This Section shall not be construed in such a manner as
to permit the Plan Administrator to make any assignment or otherwise to alienate any benefits in
contravention of requirements under the Code or under ERISA.




     17.2 No Right to Continued Employment. The establishment of the Plan shall not be construed as conferring any rights upon any person
for a continuation of employment, nor shall it be construed as limiting in any way the right of an
Employer to discharge any person or to treat him without regard to the effect which such treatment
might have upon him as a Participant under the Plan.



     17.3 Rules of Construction.



          (a) The masculine pronoun wherever used shall include the feminine pronoun and the singular
shall include the plural unless the context clearly indicates the distinction.





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          (b) The headings of Articles and Sections herein are included solely for convenience of
reference and shall not affect the meaning or interpretation of any of the provisions of this Plan.




          (c) Amendments made to this Plan from time to time, including amendments made pursuant to
amendments and restatements of this Plan, shall be effective and apply as of such dates, and shall
apply with respect to such Employees, Participants, and their beneficiaries, as shall be specified
in such amendments at the time of adoption, and the Plan shall be construed and applied
accordingly.




     17.4 Appendices.
Appendices to this Plan shall constitute a part of this Plan and, to the extent provided
therein, may establish special rules that apply to specified groups of Employees or Participants in
lieu of Plan terms that would otherwise apply.



ARTICLE 18




LAPSED BENEFITS




     18.1 Notification to Participants and Beneficiaries.



          (a) If the Trustee mails by registered or certified mail, return receipt requested, to a
Participant or beneficiary entitled to a distribution hereunder at his last known address, a
notification that he is so entitled and said notification is returned as being undeliverable
because the addressee cannot be located at said address, then the Plan shall continue to maintain
the Participant’s Accounts which are invested in the various funds.




          (b) If, by the last day of the Plan Year coinciding with or immediately following the fifth
(5th) anniversary of the date as of which such person first could not be located, said person has
not informed the Trustee of his whereabouts, his entire interest in




86









 







this Plan shall become a
forfeiture and shall be used to reduce any subsequent contributions required by his Employer as
provided in Section 6.4 hereof for the Plan Year in which it occurs. Thereafter such person shall
have no further right or interest therein except as provided in Section 18.2 hereof.




     18.2 Reinstatement of Lapsed Benefits.



          (a) If a Participant or beneficiary prior to the Plan Year in which the Plan and Trust
terminate, duly claims and proves entitlement to a benefit which otherwise lapsed pursuant to
Section 18.1, such benefits as shall then be due, unadjusted for Trust
Fund earnings and/or losses subsequent to the date of forfeiture, shall be paid by the Plan as
soon as is administratively feasible.




          (b) The reinstatement of lapsed benefits shall first be derived from forfeitures which
otherwise are allocable in the Plan Year of the reinstatement to be made pursuant to this Section
18.2 and if such forfeitures are not sufficient, such reinstatement to the extent necessary shall
then next be made from Employer contributions.




     IN WITNESS WHEREOF, Forestar Real Estate Group Inc. has caused this Forestar Savings and
Retirement Plan to be executed as of this ___day of December, 2007.



	 	 	 	 	 
	 	FORESTAR REAL ESTATE GROUP
INC.


 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 



ATTEST:
 




———————————————————

Name:

Title:




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APPENDIX I




List of Participating Employers as of December 28, 2007




Forestar Real Estate Group Inc.




 









 





MINIMUM DISTRIBUTION APPENDIX




1. General Rules.





     1.1 Effective Date. The provisions of this Appendix will apply for purposes of
determining required minimum distributions for calendar years beginning with the 2003 calendar
year.



     1.2 Precedence. The requirements of this Appendix will take precedence over any
inconsistent provisions of the Plan.



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



     1.4 TEFRA Section 242(b)(2) Elections. Notwithstanding the other provisions of this
Appendix, distributions may be made under a designation made before January 1, 1984, in accordance
with section 242(b)(2) of the Tax Equity and Fiscal Responsibility Act (TEFRA) and the provisions
of the Plan that relate to section 242(b)(2) of TEFRA.



2. Time and Manner of Distribution.




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



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



2









 





          (a) If the Participant’s surviving spouse is the Participant’s sole Designated Beneficiary,
then, except as provided in Section 6 hereof, distributions to the surviving spouse will begin by
December 31 of the calendar year immediately following the calendar year in which the Participant
died, or by December 31 of the calendar year in which the Participant would have attained age 70
1/2, if later.




          (b) If the Participant’s surviving spouse is not the Participant’s sole Designated
Beneficiary, then, except as provided in Section 6 hereof, distributions to the Designated
Beneficiary will begin by December 31 of the calendar year immediately following the calendar year
in which the Participant died.




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




          (d) If the Participant’s surviving spouse is the Participant’s sole Designated Beneficiary and
the surviving spouse dies after the Participant but before distributions to the surviving spouse
begin, this Section 2.2, other than Section 2.2(a), will apply as if the surviving spouse were the
Participant.
For purposes of this Section 2.2 and Section 4 hereof, unless Section 2.2(d) hereof applies,
distributions are considered to begin on the Participant’s Required Beginning Date. If Section
2.2(d) hereof applies, distributions are considered to begin on the date distributions are required
to begin to the surviving spouse under Section 2.2(a) hereof. If distributions under an annuity
purchased from an insurance company irrevocably commence to the Participant before the
Participant’s Required Beginning Date (or to the





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Participant’s surviving spouse before the date distributions are required to begin to the surviving
spouse under Section 2.2(a) hereof), the date distributions are considered to begin is the date
distributions actually commence.




     2.3 Forms of Distribution. Unless the Participant’s interest is distributed in the
form of an annuity purchased from an insurance company or in a single sum on or before the Required
Beginning Date, as of the first Distribution Calendar Year, distributions will be made in
accordance with Sections 3 and 4 hereof. If the Participant’s interest is distributed in the form
of an annuity purchased from an insurance company, distributions thereunder will be made in
accordance with the requirements of Code Section 401(a)(9) and the Treasury Regulations.



3. Required Minimum Distributions During Participant’s Lifetime.




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



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




          (b) if the Participant’s sole Designated Beneficiary for the Distribution Calendar Year is the
Participant’s spouse, the quotient obtained by dividing the Participant’s Account Balance by the
number in the Joint and Last Survivor Table set forth in Section 1.401(a)(9)-9 of the Treasury
Regulations, using the Participant’s and




4









 







spouse’s attained ages as of the Participant’s and spouse’s birthdays in the Distribution
Calendar Year.




     3.2 Lifetime Required Minimum Distributions Continue Through Year of Participant’s
Death. Required minimum distributions will be determined under this Section 3 beginning with
the first Distribution Calendar Year and up to and including the Distribution Calendar Year that
includes the Participant’s date of death.



4. Required Minimum Distributions After Participant’s Death.




     4.1 Death on or After Date Distributions Begin.



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




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



               (ii) If the Participant’s surviving spouse is the Participant’s sole Designated Beneficiary,
the remaining Life Expectancy of the surviving spouse is calculated for each Distribution Calendar
Year after the year of the Participant’s death using the surviving spouse’s age as of the spouse’s
birthday in that year. For Distribution Calendar Years after the year of the surviving spouse’s
death, the remaining Life



5









 




Expectancy of the surviving spouse is calculated using the age of the surviving spouse as of
the spouse’s birthday in the calendar year of the spouse’s death, reduced by one for each
subsequent calendar year.




               (iii) If the Participant’s surviving spouse is not the Participant’s sole Designated
Beneficiary, the Designated Beneficiary’s remaining Life Expectancy is calculated using the age of
the Beneficiary in the year following the year of the Participant’s death, reduced by one for each
subsequent year.



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




     4.2 Death Before Date Distributions Begin.



          (a) Participant Survived by Designated Beneficiary. Except as provided in Section 6
hereof, if the Participant dies before the date distributions begin and there is a Designated
Beneficiary, the minimum amount that will be distributed for each Distribution Calendar Year after
the year of the Participant’s death is the quotient obtained by dividing the Participant’s Account
Balance by the remaining Life Expectancy of the Participant’s Designated Beneficiary, determined as
provided in Section 4.1 hereof.




6









 








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




          (c) Death of Surviving Spouse Before Distributions to Surviving Spouse Are Required to
Begin. If the Participant dies before the date distributions begin, the Participant’s
surviving spouse is the Participant’s sole Designated Beneficiary, and the surviving spouse dies
before distributions are required to begin to the surviving spouse under Section 2.2(a) hereof,
this Section 4.2 will apply as if the surviving spouse were the Participant.




5. Definitions.




     5.1 “Designated Beneficiary” means the individual who is designated as the beneficiary
pursuant to Section 2.1(e) of the Plan and is the designated beneficiary under Section 401(a)(9) of
the Code and Section 1.401(a)(9)-1, Q&A-4, of the Treasury Regulations.



     5.2 “Distribution Calendar Year” means a calendar year for which a minimum
distribution is required. For distributions beginning before the Participant’s death, the first
Distribution Calendar Year is the calendar year immediately preceding the calendar year which
contains the Participant’s Required Beginning Date. For distributions beginning after the
Participant’s death, the first Distribution Calendar Year is the calendar year in which
distributions are required to begin under Section 2.2 hereof. The required minimum distribution
for the Participant’s first Distribution Calendar Year will



7









 




be made on or before the Participant’s Required Beginning Date. The required minimum
distribution for other Distribution Calendar Years, including the required minimum distribution for
the Distribution Calendar Year in which the Participant’s Required Beginning Date occurs, will be
made on or before December 31 of that Distribution Calendar Year.




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



     5.4 “Participant’s Account Balance” means the Account balance as of the last Valuation
Date in the calendar year immediately preceding the Distribution Calendar Year (“Valuation Calendar
Year”) increased by the amount of any contributions made and allocated or forfeitures allocated to
the Account balance as of dates in the Valuation Calendar Year after the Valuation Date and
decreased by distributions made in the Valuation Calendar Year after the Valuation Date. The
Account balance for the Valuation Calendar Year includes any amounts rolled over or transferred to
the Plan either in the Valuation Calendar Year or in the Distribution Calendar Year if distributed
or transferred in the Valuation Calendar Year.



     5.5 “Required Beginning Date” means April 1 of the calendar year following the later
of (a) the calendar year in which the attains age 701/2, or (b) the calendar year in which the
Participant retires; provided, however, that the preceding clause (b) shall not apply in the case
of any Participant who is a 5-percent owner (as defined in Section 416 of the Code) with respect to
the plan year ending in the calendar year in which the Participant attains age 701/2 .



8









 




6. Election to Apply 5-Year Rule to Distributions to Designated Beneficiaries. If the
Participant dies before distributions begin and there is a Designated Beneficiary, distribution to
the Designated Beneficiary is not required to begin by the date specified in Section 2.2 hereof,
but the Participant’s entire interest will be distributed to the Designated Beneficiary by December
31 of the calendar year containing the fifth anniversary of the Participant’s death. If the
Participant’s surviving spouse is the Participant’s sole Designated Beneficiary and the surviving
spouse dies after the Participant but before distributions to either the Participant or the
surviving spouse begin, this election will apply as if the surviving spouse were the Participant.
This election will apply to all distributions to Designated Beneficiaries.





9