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EXHIBIT 10.1
 ZALE CORPORATION SAVINGS & INVESTMENT PLAN
 (As Amended and Restated Effective August 1, 2005)




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TABLE OF CONTENTS
 ARTICLE I DEFINITIONS
    
    
    11.1
    
    Administrator
    
    
    11.2
    
    Affiliated Company
    
    
    11.3
    
    Allocation Date
    
    
    11.4
    
    Alternate Payee
    
    
    11.5
    
    Beneficiary
    
    
    11.6
    
    Benefit Commencement Date
    
    
    11.7
    
    Break-in-Service
    
    
    21.8
    
    Catch-Up Contribution Account
    
    
    21.9
    
    Catch-Up Contribution
    
    
    21.10
    
    Code
    
    
    21.11
    
    Committee
    
    
    21.12
    
    Common Stock
    
    
    21.13
    
    Common Stock Fund
    
    
    21.14
    
    Company
    
    
    21.15
    
    Compensation
    
    
    21.16
    
    Daily Administrator
    
    
    31.17
    
    Direct Rollover
    
    
    31.18
    
    Disability
    
    
    31.19
    
    Domestic Relations Order
    
    
    31.20
    
    Effective Date
    
    
    31.21
    
    Eligible Employee
    
    
    31.22
    
    Eligible Retirement Plan
    
    
    41.23
    
    Eligible Rollover Distribution
    
    
    41.24
    
    Employee
    
    
    51.25
    
    Employee After-Tax Account
    
    
    51.26
    
    Employee Pre-Tax Matched Contribution Account
    
    
    51.27
    
    Employee Pre-Tax Unmatched Contribution Account
    
    
    51.28
    
    Employer
    
    
    61.29
    
    Employment Commencement Date
    
    
    61.30
    
    Entry Date
    
    
    61.31
    
    ERISA
    
    
    61.32
    
    Excess Aggregate Contributions
    
    
    61.33
    
    Excess Contributions
    
    
    61.34
    
    Excess Elective Deferral
    
    
    61.35
    
    Former Participant
    
    
    61.36
    
    Highly Compensated Employee
    
    
    61.37
    
    Hour or Hour of Service
    
    
    61.38
    
    Individual Account
    
    
    71.39
    
    Interactive Electronic Communication
    
    
    81.40
    
    Investment Fund
    
    
    81.41
    
    Karten's Plan
    
    
    81.42
    
    Leased Employee
    
    
    81.43
    
    Matching Contribution
    
    
    81.44
    
    Matching Contribution Account
    
    
    91.45
    
    Non-Highly Compensated Employee
    
    
    91.46
    
    Normal Retirement Date
    
    
    91.47
    
    Participant
    
    
    91.48
    
    Plan
    
    
    9
 (i)




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1.49
    
    Plan Year
    
    
    91.50
    
    Pre-Tax Contribution
    
    
    91.51
    
    Pre-Tax Contribution Accounts
    
    
    91.52
    
    Profit Sharing Account
    
    
    101.53
    
    QDRO
    
    
    101.54
    
    QNEC Account
    
    
    101.55
    
    QNECs
    
    
    111.56
    
    Qualified Election
    
    
    111.57
    
    Recordkeeper
    
    
    121.58
    
    Required Beginning Date
    
    
    121.59
    
    Rollover Account
    
    
    121.60
    
    Rollover Contribution
    
    
    121.61
    
    Safe Harbor Match Account
    
    
    121.62
    
    Spouse
    
    
    121.63
    
    Trust Agreement
    
    
    121.64
    
    Trust Fund
    
    
    121.65
    
    Trustee
    
    
    121.66
    
    Valuation Date
    
    
    121.67
    
    Year of Service
    
    
    13ARTICLE II ELIGIBILITY OF EMPLOYEES
    
    
    142.1
    
    Eligibility to Participate in the Plan
    
    
    142.2
    
    Eligibility upon Reemployment
    
    
    142.3
    
    Reemployment of Participant
    
    
    142.4
    
    Cessation of Participation
    
    
    152.5
    
    Eligibility Upon Entry or Reentry into Eligible Class of Employees
    
    
    15ARTICLE III CONTRIBUTIONS
    
    
    163.1
    
    Pre-Tax Contributions
    
    
    163.2
    
    Matching Contributions
    
    
    173.3
    
    QNECs
    
    
    183.4
    
    Catch-Up Contributions
    
    
    183.5
    
    Time and Form of Contributions
    
    
    193.6
    
    Limit on Employer Contributions
    
    
    193.7
    
    Manner of Making Contributions
    
    
    193.8
    
    Rollover Contributions
    
    
    203.9
    
    Contributions with Respect to Military Leave
    
    
    203.10
    
    Administrative Mistake
    
    
    20ARTICLE IV LIMITATIONS AND RESTRICTIONS ON PRE-TAX CONTRIBUTIONS
    
    
    234.1
    
    Excess Elective Deferrals
    
    
    234.2
    
    Actual Deferral Percentage Test
    
    
    254.3
    
    Other Permissible Methods of Testing and Correction
    
    
    28ARTICLE V LIMITATIONS AND RESTRICTIONS ON MATCHING CONTRIBUTIONS
    
    
    295.1
    
    Actual Contribution Percentage Test
    
    
    295.2
    
    Testing of Pre-Tax Contributions Under Contribution Percentage Test
    
    
    315.3
    
    Other Permissible Methods of Testing and Corrections
    
    
    31ARTICLE VI ALLOCATION OF CONTRIBUTIONS
    
    
    326.1
    
    Establishment of Individual Accounts
    
    
    32
 (ii)




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6.2
    
    Allocation of Pre-Tax Contributions
    
    
    326.3
    
    Allocation of Matching Contributions
    
    
    326.4
    
    Allocation of QNECs
    
    
    326.5
    
    Credit of Rollover Contributions
    
    
    326.6
    
    Included, Individual Accounts
    
    
    32ARTICLE VII LIMITATION ON ALLOCATIONS
    
    
    337.1
    
    Definitions
    
    
    337.2
    
    Disposition of Excess Annual Additions
    
    
    337.3
    
    Aggregation of Plans
    
    
    347.4
    
    Prospective Reduction of Deferrals
    
    
    34ARTICLE VIII ADJUSTMENT OF INDIVIDUAL ACCOUNTS
    
    
    358.1
    
    Trust Fund Valuation
    
    
    358.2
    
    Adjustments to Participant's and Former Participant's Individual Accounts
    
    
    358.3
    
    Statement to Participant
    
    
    36ARTICLE IX DISTRIBUTIONS AND WITHDRAWALS
    
    
    379.1
    
    Vested Interest
    
    
    379.2
    
    Entitlement to Distribution
    
    
    379.3
    
    Timing of Distribution
    
    
    389.4
    
    Qualified Election
    
    
    389.5
    
    Limitations on Timing of Distributions
    
    
    399.6
    
    Minimum Distribution Requirements
    
    
    399.7
    
    Normal Form of Benefits
    
    
    409.8
    
    Distributions from Common Stock Fund
    
    
    409.9
    
    Optional Forms of Benefits
    
    
    419.10
    
    Automatic Cashouts
    
    
    429.11
    
    Facility of Payment
    
    
    429.12
    
    Hardship Withdrawals.
    
    
    429.13
    
    Withdrawal of After-Tax Savings Contributions
    
    
    449.14
    
    Withdrawal at Age 591/2
    
    
    449.15
    
    Withdrawal of Rollover Account
    
    
    459.16
    
    Qualified Hurricane Katrina Distributions
    
    
    459.17
    
    Loans to Participants
    
    
    469.18
    
    Duty to Keep Administrator Informed of Distributee's Current Address
    
    
    469.19
    
    Failure to Claim Benefits
    
    
    469.20
    
    Distribution Pursuant to a QDRO
    
    
    47ARTICLE X DISTRIBUTIONS UPON DEATH; DESIGNATIONS OF BENEFICIARIES
    
    
    4810.1
    
    Death Prior to Benefit Commencement Date
    
    
    4810.2
    
    Designation of Beneficiary
    
    
    4810.3
    
    Death After Benefit Commencement Date
    
    
    49ARTICLE XI AMENDMENT OF PLAN
    
    
    5011.1
    
    Right to Amend
    
    
    5011.2
    
    Limitation on Amendments
    
    
    50ARTICLE XII TERMINATION OF PLAN
    
    
    5112.1
    
    Right to Discontinue Contributions, Terminate, or Partially Terminate
    
    
    51
 (iii)




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12.2
    
    Procedure in the Event of Discontinuance of Contributions, Termination, or Partial Termination
    
    
    5112.3
    
    Merger, Consolidation, or Transfer
    
    
    5112.4
    
    Reversion of Contributions to Employer
    
    
    52ARTICLE XIII PLAN ADMINISTRATION
    
    
    5313.1
    
    The Administrator
    
    
    5313.2
    
    Action by Committee
    
    
    5313.3
    
    Rules and Regulations of Administrator
    
    
    5413.4
    
    Powers of Administrator
    
    
    5413.5
    
    Appointment of Daily Administrator
    
    
    5513.6
    
    Duties of Daily Administrator
    
    
    5513.7
    
    Indemnification of the Administrator and Daily Administrator
    
    
    5613.8
    
    Plan Fiduciaries
    
    
    5613.9
    
    Action Taken in Good Faith
    
    
    5713.10
    
    Expenses of Administration
    
    
    5813.11
    
    Claims Procedure
    
    
    58ARTICLE XIV ADOPTION BY AFFILIATED COMPANIES
    
    
    6014.1
    
    Adoption by and Designation of Other Employers
    
    
    6014.2
    
    Single Plan
    
    
    61ARTICLE XV THE TRUSTEE
    
    
    6215.1
    
    Trust Fund
    
    
    6215.2
    
    Trustee's Duties
    
    
    6215.3
    
    Benefits Only from Trust Fund
    
    
    6215.4
    
    Trust Fund Applicable Only to Payment of Benefits
    
    
    6215.5
    
    Appointment of Investment Advisor
    
    
    6215.6
    
    Administrator's Duty to Trustee
    
    
    63ARTICLE XVI PARTICIPANT INVESTMENT OPTIONS
    
    
    6416.1
    
    Investments of Contributions
    
    
    6416.2
    
    Participant Direction of Investment
    
    
    6416.3
    
    Investments in Individual Loans to Participants
    
    
    6616.4
    
    Voting Rights
    
    
    66ARTICLE XVII TOP HEAVY PROVISIONS
    
    
    6717.1
    
    Applicability
    
    
    6717.2
    
    Definitions
    
    
    6717.3
    
    Top-Heavy Status
    
    
    6717.4
    
    Minimum Contributions
    
    
    68ARTICLE XVIII MISCELLANEOUS
    
    
    6918.1
    
    No Employment or Compensation Agreement
    
    
    6918.2
    
    Spendthrift Provision
    
    
    6918.3
    
    Construction
    
    
    6918.4
    
    Gender and Number
    
    
    6918.5
    
    Titles
    
    
    6918.6
    
    Texas Law Applicable
    
    
    6918.7
    
    Successors and Assigns
    
    
    6918.8
    
    Plan Controls
    
    
    69
 (iv)




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ZALE CORPORATION SAVINGS & INVESTMENT PLAN
(As Amended and Restated Effective April 1, 2006)
 THIS
AGREEMENT
 WITNESSETH:
 WHEREAS
 WHEREAS
 WHEREAS
 WHEREAS
 WHEREAS
 WHEREAS
 WHEREAS
 WHEREAS
 WHEREAS
 (v)




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WHEREAS
 WHEREAS
 WHEREAS
 WHEREAS
 WHEREAS
 WHEREAS
 WHEREAS
 WHEREAS
 (vi)




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1 2 e.g.
 WHEREAS i.e.
 WHEREAS
 NOW, THEREFORE
 (vii)




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ARTICLE I
 DEFINITIONS
  1.1
    
    Administratorfor the purposes of ERISA means the Company; provided, that the Company,
by action of its Board of Directors or its Chief Executive Officer, may designate another
person or entity, including the Trustee, the Recordkeeper or a Committee, as Administrator
of the Plan. As of the Effective Date, the Company has designated the Committee as the
Administrator. The Committee may delegate some or all of its duties to another person or
entity pursuant to Article XIII (e.g., the Daily Administrator or Recordkeeper).
Accordingly, any reference to the Administrator in this Plan will be deemed to refer to any
such designee, as applicable.1.2
    
    Affiliated Companymeans the Company and any other entity which is, along with the
Company, a member of a controlled group of corporations or a controlled group of trades or
businesses (as defined in section 414(b) or (c) of the Code), any entity which along with
the Company is included in an affiliated service group as defined in section 414(m) of the
Code, and any other entity which is required to be aggregated with the Company pursuant to
section 414(o) of the Code.1.3
    
    Allocation Datemeans the end of each calendar quarter or such other date or dates as
the Administrator may establish from time to time.1.4
    
    Alternate Payeemeans any Spouse, former Spouse, child, or other dependent of a
Participant who is recognized by a Domestic Relations Order as having a right to receive
all, or a portion of, the benefits payable under the Plan with respect to such Participant.1.5
    
    Beneficiarymeans any person or fiduciary designated by a Participant or Former
Participant in accordance with Section 10.2.1.6
    
    Benefit Commencement Datemeans the first day on which all events have occurred which
entitle the Participant to such benefit, in accordance with the requirements of section 411
of the Code. For purposes of this Plan, a Participants Benefit Commencement Date will be
determined as follows:
 (a)
    
    Termination of Service. With respect to any distribution upon termination of service for any reason, the
Benefit Commencement Date will generally be the later of (i) the effective date of a
Qualified Election (including all consents and applicable information in connection
therewith) that is required to be made under section 411 of the Code with respect to
such distribution, or (ii) thirty (30) days after the date of such termination of
service; provided, however, that for purposes of Section 9.10, regarding Automatic
Cashouts, the Benefit Commencement Date will be the date such cashout distribution
is to be made.(b)
    
    In-Service Withdrawals. With respect to any withdrawal prior to termination of
service, the Benefit Commencement Date will be the effective date of a Qualified
Election (including all consents and applicable information in connection therewith)
that is required to be made under section 411 of the Code with respect to such
withdrawal.




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(c)
    
    Attainment of Required Beginning Date. In the case of any distribution on
account of the Participants attainment of the Required Beginning Date, if neither
subparagraph (a) nor (b) applies, the Benefit Commencement Date will be the
applicable April 1 following the calendar year in which the Participant attains age
seventy and one-half (701/2) or terminates service, as applicable.
 1.7
    
    Break-in-Servicemeans a Plan Year during which the Participant is credited with five
hundred (500) or fewer Hours of Service.1.8
    
    Catch-Up Contribution Accountmeans the portion of the Individual Account maintained by
the Trustee or the Recordkeeper for each Participant, Former Participant or Beneficiary on
and after April 1, 2006, reflecting the monetary value of such persons interest in the
Trust Fund attributable to Catch-Up Contributions made by the Participant under the Plan.1.9
    
    Catch-Up Contributionmeans the contributions made pursuant to section 414(v) of the
Code as provided in Section 3.4 of this Plan.1.10
    
    Codemeans the Internal Revenue Code of 1986, as it may be amended from time to time.
Reference to a section of the Code will include that section, applicable Treasury
regulations promulgated thereunder and any comparable section of any future legislation that
amends, supplements or supersedes said section, effective as of the date such comparable
section is effective with respect to the Plan.1.11
    
    Committee
means the committee appointed under Article XIII to administer the Plan, as from time to
time constituted. If no such committee is appointed, the Company will constitute the
Committee.1.12
    
    Common Stockmeans the shares of common stock of Zale Corporation.1.13
    
    Common Stock Fundmeans the Investment Fund maintained pursuant to the Plan which is
invested in Common Stock.1.14
    
    Companymeans Zale Corporation, or such other organization which, pursuant to a
spinoff, merger, consolidation, reorganization, or similar corporate transaction where a
significant portion of the Companys employees become employees of such organization, adopts
and assumes the Plan and the Trust Agreement as the sponsor with the consent of the Company
and agrees to accept the duties, responsibilities and obligations of the sponsor of the Plan
and the Trust Agreement. Reference in the Plan to the Company will refer to any such
organization which adopts and assumes the sponsorship of the Plan and the Trust Agreement.1.15
    
    Compensationmeans, with respect to an Eligible Employee, compensation paid to such
Employee by an Employer which is includible in the Employees gross income for the Plan
Year, plusamounts applied to purchase benefits pursuant to a salary reduction agreement
under a cafeteria plan (as defined in section 125 of the Code) sponsored by an Employer,
amounts deferred pursuant to a salary reduction agreement authorized in Section 3.1, amounts
deferred pursuant to a salary reduction agreement under any other plan described in sections
401(k) and 408(k) of the Code sponsored by an Employer and amounts that are not includible
in gross income of such Employee by reason of section 132(f)(4) of the Code, but excluding
relocation expenses, merchandise incentives and car fringe benefits, and all other items of
compensation.
 2




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The Compensation of each Participant taken into account in determining allocations for any
Plan Year will not exceed two hundred thousand dollars ($200,000), as adjusted for
cost-of-living increases in accordance with section 401(a)(17)(B) of the Code. The
cost-of-living adjustment in effect for a calendar year applies to Compensation for the
determination period that begins with or within the calendar year.For nondiscrimination testing purposes under Section 4.2 and Section 5.1, Compensation means
any definition of compensation permitted under section 414(s) of the Code as elected by the
Administrator for the applicable Plan Year.1.16
    
    Daily Administratormeans the individual designated by the Administrator to handle on a
ministerial basis the day-to-day operation of the Plan. In the event the Plan Administrator
fails to appoint a
Daily Administrator, the Administrator will be the Daily Administrator. As of the Effective
Date, the Benefits Department of the Company is the Daily Administrator.1.17
    
    Direct Rollovermeans a payment by the Plan to an Eligible Retirement Plan specified by
(a) the Participant, (b) the Participants surviving Spouse, or (c) the Participants former
Spouse who is an Alternate Payee under a QDRO.1.18
    
    Disabilitymeans effective April 1, 2006 the Participant is either totally and
permanently disabled within the meaning of a long-term disability plan sponsored by the
Employer in which the Participant is a member or is determined to be totally and permanently
disabled by a ruling issued by the Social Security Administration.1.19
    
    Domestic Relations Ordermeans any judgment, decree, or order (including one that
approves a property settlement agreement) that relates to the provision of child support,
alimony payments, or marital property rights to a spouse, former spouse, child, or other
dependent of a Participant and is rendered under a state (within the meaning of section
7701(a)(10) of the Code) domestic relations law (including a community property law).1.20
    
    Effective Datemeans August 1, 2005, as to this amendment and restatement of the Plan,
except:
 (a)
    
    specific provisions of the Plan designated as having a different effective date
will be effective as indicated in such provisions; and(b)
    
    specific provisions of the Plan required to have a different effective date by
applicable provisions of the Code, including revisions made by EGTRRA, will be
effective as of the dates such provisions are required to be effective with respect to
the Plan under the Code or, if later, under administrative pronouncements issued by the
Internal Revenue Service or the Treasury Department.
 1.21
    
    Eligible Employeemeans any Employee who is on an Employers payroll in the United
States, Puerto Rico or Guam. The term Eligible Employee will exclude:
 (a)
    
    all other persons who work outside of the United States unless the Committee
elects to cover them by the Plan, in which case an appendix that reflects such coverage
will be attached hereto;(b)
    
    any Leased Employee that section 414(n) of the Code treats as an Employee of an
Employer, any independent contractor or any self-employed person even if
 3




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such person is
subsequently deemed to be a common law employee by the Employer, a governmental agency
with jurisdiction over the Plan or a court of competent jurisdiction;(c)
    
    any Employee who is included in a unit of Employees covered by a collective
bargaining agreement between the Employees representative and the Employer, even if
they have met the requirements for eligibility, if there has been good faith bargaining
between the Employer and the Employees representative and the collective bargaining
agreement does not require the Employer to include those Employees in the Plan; and(d)
    
    any Employee who is a nonresident alien and who receives no earned income
(within the meaning of section 911(d)(2) of the Code) from any Employer which
constitutes income from sources within the United States (within the meaning of section
861(a)(3) of the Code).
 An Eligible Employee who is a Participant in this Plan when he is excluded under the
provisions of this Section 1.21 will cease active participation in this Plan on the
effective date of that exclusion (e.g., the effective date of the collective bargaining
agreement in the case of an exclusion under subsection (c)) and will not be eligible to make
Pre-Tax Contributions or receive any Matching Contributions while a member of the ineligible
class but will not be considered to have terminated employment for distribution purposes
under this Plan.1.22
    
    Eligible Retirement Planmeans (a) an individual retirement account described in
section 408(a) of the Code, (b) an individual retirement annuity described in section 408(b)
of the Code, (c) an annuity plan described in section 403(a) of the Code, (d) a qualified
plan described in section 401(a) of the Code, which under its provisions and applicable law
may accept such Eligible Rollover Distribution, (e) an annuity contract described in section
403(b) of the Code, and (f) an eligible plan under section 457 of the Code which is
maintained by a state, a political subdivision of a state, or an agency or instrumentality
of a state or political subdivision of a state and which agrees to separately account for
amounts rolled over to such plan from this Plan. This definition of Eligible Retirement
Plan will also apply in the case of a distribution to a surviving Spouse, or a Spouse or
former Spouse who is the Alternate Payee under a QDRO.1.23
    
    Eligible Rollover Distributionmeans any distribution of all or any portion of the
Individual Account of a Participant, within the meaning of section 402(c)(4) of the Code,
other than:
 (a)
    
    a distribution that is one of a series of substantially equal periodic payments
(not less frequently than annually) made for the life (or life expectancy) of the
distributee or the joint lives (or joint life expectancies) of the distributee and the
distributees designated Beneficiary or for a specified period of ten (10) years or
more;(b)
    
    a distribution to the extent such distribution is required under section
401(a)(9) of the Code;(c)
    
    generally, the portion of any distribution that is not includable in gross
income (determined without regard to the exclusion for net unrealized appreciation with
respect to employer securities); provided, however, that an Eligible Rollover
 4




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Distribution mayinclude the portion of any distribution that is not includable in
gross income (determined without regard to the exclusion for net unrealized
appreciation with respect to employer securities), providedthat such portion may
only be rolled over to an individual retirement account described in section 408(a)
of the Code, an individual retirement annuity described in section 408(b) of the
Code or a qualified defined contribution plan described in section 401(a) or 403(a)
of the Code that agrees to separately account for amounts so rolled over, including
separately accounting for the portion of the distribution which is includable in
gross income and the portion of such distribution which is not so includable.(d)
    
    a loan treated as a distribution under section 72(p) of the Code and not
excepted by section 72(p)(2) of the Code;(e)
    
    a loan in default that is a deemed distribution;(f)
    
    any corrective distribution provided in Sections 4.2 and 5.1 (regarding excess
Pre-Tax Contributions and excess Matching Contributions) and in Section 7.2 (regarding
excess Annual Additions);(g)
    
    a hardship withdrawal under section 401(k)(2)(B)(i)(IV) of the Code; and(h)
    
    any other distribution so designated by the Internal Revenue Service in revenue
rulings, notices, and other guidance of general applicability.
 1.24
    
    Employeemeans any individual in the employ of the Company or an Affiliated Company in
the capacity of an employee and not in the capacity of an independent contractor, contract
employee or Leased Employee.1.25
    
    Employee After-Tax Accountmeans the portion of the Individual Account maintained by
the Trustee or the Recordkeeper for each Participant, Former Participant or Beneficiary
reflecting the monetary value of such persons interest in the Trust Fund attributable to
contributions made by the Participant on an after-tax basis when such contributions were
permitted by the Plan. Effective April 1, 2006, the Employee After-Tax Account will also
hold amounts repaid to the Plan by Participants who received an improper distribution of
Excess Contributions pursuant to Section 4.2 or Excess Aggregate Contributions pursuant to
Section 5.1.1.26
    
    Employee Pre-Tax Matched Contribution Accountmeans the portion of the Individual
Account maintained by the Trustee or the Recordkeeper for each Participant, Former
Participant or Beneficiary on or after April 1, 2006, reflecting the monetary value of such
persons interest in the Trust Fund attributable to contributions made by the Participant on
a pre-tax basis that were eligible for a corresponding Matching Contribution under the Plan.
The Employee Pre-Tax Matched Contribution Account will also be credited with amounts
attributable to pre-tax contributions made by the Participant under the Kartens Plan that
were entitled to a corresponding Matching Contribution under that plan.1.27
    
    Employee Pre-Tax Unmatched Contribution Accountmeans the portion of the Individual
Account maintained by the Trustee or the Recordkeeper for each Participant, Former
Participant or Beneficiary on and after April 1, 2006, reflecting the monetary value of such
persons interest in the Trust Fund attributable to contributions made by the Participant on
a pre-tax basis that were not eligible for a corresponding
Matching
 5




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Contribution under the
Plan. The Employee Pre-Tax Unmatched Contribution Account will also be credited with amounts
attributable to pre-tax contributions made by the Participant under the Kartens Plan that
were not entitled to a corresponding Matching Contribution under that plan.1.28
    
    Employermeans the Company and any other Affiliated Company which adopts the Plan with
respect to its Eligible Employees as provided in Article XIV.1.29
    
    Employment Commencement Datemeans the first day an Employee has an Hour of Service.1.30
    
    Entry Datemeans the first day of each month.1.31
    
    ERISAmeans the Employee Retirement Income Security Act of 1974, as it may be amended
from time to time, and applicable regulations promulgated thereunder.1.32
    
    Excess Aggregate Contributionsmeans Matching Contributions attributable to Highly
Compensated Employees that cause the Plan to fail the actual contribution percentage test
under section 401(m) of the Code, as described in Section 5.1.1.33
    
    Excess Contributionsmeans Pre-Tax Contributions attributable to Highly Compensated
Employees that cause the Plan to fail the actual deferral percentage test under section
401(k) of the Code, as described in Section 4.2.1.34
    
    Excess Elective Deferralmeans Pre-Tax Contributions that exceed the limit on such
contributions under section 402(g) of the Code, as described in Section 4.1(a).1.35
    
    Former Participantmeans any individual who has been a Participant in the Plan, who is
no longer in the employ of an Affiliated Company and who has not yet received the entire
benefit to which he is entitled under the Plan.1.36
    
    Highly Compensated Employeemeans, for any Plan Year, any Employee who:
 (a)
    
    was, at any time during the Plan Year or the preceding Plan Year, a more than
five percent (5%) owner of any Employer; or(b)
    
    during the preceding Plan Year received 415 Compensation (as defined in Section
7.1) from all Employers in excess of eighty thousand dollars ($80,000) (as adjusted to
such other amount as the Secretary of the Treasury will prescribe at the same time and
in the same manner as provided under section 415(d) of the Code for adjusting the
dollar limitation in effect under section 415(b)(1)(A) of the Code (i.e., one hundred
thousand dollars ($100,000) for 2006)).
 1.37
    
    Hour or Hour of Servicemeans each hour credited to an Employee in accordance with the
following:
 (a)
    
    An Hour of Service will be credited to an Employee for each hour for which he
is directly or indirectly paid, or entitled to payment, by any Affiliated Company.(b)
    
    An Hour of Service will be credited to an Employee for each hour for which back
pay, irrespective of mitigation of damages, has been either awarded or agreed to by an
Affiliated Company. These hours will be credited to the Employee for the
 6




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##### 



Plan Year or Plan Years to which the award or agreement pertains rather than the Plan Year in which
the award, agreement or payment is made.(c)
    
    In no event will an Employee be given credit for a specific Hour of Service
under more than one of the above subsections (a) or (b).(d)
    
    Hours of Service for periods during which no duties are performed will be
determined and credited in accordance with Sections 2530.200b-2(b) and (c) of the
Department of Labor regulations.(e)
    
    If an absence from the service of an Affiliated Company occurs for any period
by reason of (i) pregnancy of the individual, (ii) birth of a child of the individual,
(iii) 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 and if the Participant does not
return to employment immediately on the expiration of the period of absence, solely for
purposes of determining a Break in Service, the Plan will credit the Participant with
up to five hundred and one (501) Hours of Service which otherwise would normally have
been credited to such individual during the Plan Year. However, if in the Plan Year in
which the absence commences the Participant would not have incurred a Break in Service
even if the preceding sentence had not applied, the Plan will credit the Participant
with such Hours of Service in the following Plan Year. The Plan will not credit any
Participant with any Hours of Service under this subsection (e) unless such Participant
timely furnishes the Administrator information establishing (i) that the absence from
the service of an Affiliated Company was for one or more reasons specified in the first
sentence of this subparagraph (e), and (ii) the numbers of days for which there was an
absence.(f)
    
    Effective December 12, 1994, each period of qualified military service (within
the meaning of Chapter 43 of Title 38, United States Code) served by an Employee who is
reemployed under that chapter by an Affiliated Company following such service will be
considered service with an Affiliated Company for purposes of determining his Hours of
Service.(g)
    
    Hours of Service include hours credited for an employer, the stock or assets of
which are acquired by an Employer or an Affiliated Company, without regard to whether a
predecessor plan was maintained.
 1.38
    
    Individual Accountmeans an account or record to be maintained by the Trustee or the
Recordkeeper reflecting the monetary value of the undivided interest in the Trust Fund of
each Participant, each Former Participant and each Beneficiary and, effective as of April 1,
2006, and will include the following sub-accounts:
 (a)
    
    Catch-Up Contribution Account;(b)
    
    Employee After-Tax Account;(c)
    
    Employee Pre-Tax Matched Contribution Account;(d)
    
    Employee Pre-Tax Unmatched Contribution Account;
 7




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##### 



(e)
    
    Matching Contribution Account;(f)
    
    Profit Sharing Account;(g)
    
    QNEC Account;(h)
    
    Rollover Account; and(i)
    
    Safe Harbor Match Account.
 The term Individual Account will also include such other additional account or accounts as
the Administrator may establish from time to time.1.39
    
    Interactive Electronic Communicationmeans, to the extent available under the Plan, a
communication between a Participant, Former Participant or Beneficiary and the Recordkeeper
pursuant to a system maintained by the Recordkeeper and communicated to each Participant,
Former Participant and Beneficiary whereby each such individual may obtain financial
information regarding his Individual Account and amounts available for withdrawal, and may
initiate investment transfer elections and exercise options as described herein with respect
to his Individual Account through the use of such system and a personal identification
number assigned to the Participant, Former Participant or Beneficiary by the Recordkeeper or
the Administrator. If a Participant, Former Participant or Beneficiary participates in the
Plans Interactive Electronic Communication feature through the use of his personal
identification number, the Participant, Former Participant or Beneficiary, as the case may
be, will be deemed to have given his written consent and authorization
to any action resulting from the use of the Interactive Electronic Communication system by
the Participant, Former Participant or Beneficiary.1.40
    
    Investment Fundmeans one or more funds designated by the Administrator pursuant to
Section 16.1 from time to time and maintained for the purpose of providing a vehicle for the
investment of assets of the Trust Fund, in accordance with the directions of each
Participant, Former Participant or Beneficiary with respect to his Individual Account, until
such Investment Fund or Investment Funds will be eliminated by action of the Administrator.
The Administrator may direct the Trustee to invest one or more of such funds with a
specified insurance company or mutual fund, or appoint an investment advisor as provided in
Section 15.5 to manage the same and may also direct the Trustee to establish new Investment
Funds or delete existing Investment Funds from time to time.1.41
    
    Kartens Planmeans the Kartens Jewelers, Inc. 401(k) Plan which was merged into the
Plan on August 1, 1996.1.42
    
    Leased Employeemeans an individual described in section 414(n) of the Code (i.e., who
has performed services for the Employer pursuant to a leasing agreement on a substantially
full-time basis for at least one (1) year and who performs such services under the primary
direction or control of the Employer). A Leased Employee will also include any individual
who is deemed to be an Employee of an Employer under section 414(o) of the Code.1.43
    
    Matching Contributionmeans the contribution made by an Employer pursuant to Section
3.2.
 8




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##### 



1.44
    
    Matching Contribution Accountmeans the portion of the Individual Account maintained by
the Trustee or the Recordkeeper for each Participant, Former Participant or Beneficiary,
reflecting the monetary value of such persons individual interest in the Trust Fund
attributable to an Employers Matching Contributions under Section 3.2. Effective April 1,
2006, the Matching Contribution Account will also be credited with amounts attributable to
Matching Contributions made on behalf of the Participant under the Kartens Plan.1.45
    
    Non-Highly Compensated Employeemeans any Employee who is not a Highly Compensated
Employee. The determination of an Employees status as a Non-Highly Compensated Employee for
a Plan Year will be determined based on the definition of Highly Compensated Employee in
Section 1.36 that is applicable for that Plan Year.1.46
    
    Normal Retirement Datemeans the laterof a Participants or Former Participants 65th
birthday or the fifth (5th) anniversary of the date he commenced participation in the Plan.
The Normal Retirement
Date for a Participant or Former Participant who previously participated in the Kartens
Plan and had amounts transferred from the Kartens Plan to the Plan means the date the
Participant attains age sixty-five (65).1.47
    
    Participantmeans an Eligible Employee who has met the eligibility requirements of the
Plan as provided in Article II and has begun participating in the Plan. An Eligible Employee
who elects to make a Rollover Contribution but who has not yet met the eligibility
requirements of the Plan (i.e., has not completed one (1) Year of Service or attained age
twenty-one (21)) will be considered a Participant only for purposes of applying the relevant
provisions of the Plan relating to the investment and distribution of such Employees
Rollover Account and his rights and responsibilities under ERISA with respect to such
Rollover Contribution. For purposes of Section 4.2 (regarding the actual deferral
percentage test) and Section 5.1 (regarding the actual contribution percentage test), the
term Participant includes any Eligible Employee who has met the eligibility requirements
of the Plan (i.e., attained age twenty-one (21) and completed one (1) Year of Service)
regardless of whether he has elected to make Pre-Tax Contributions to the Plan.1.48
    
    Planmeans the plan embodied herein, as the same may be amended from time to time, and
will be known as the Zale Corporation Savings & Investment Plan.1.49
    
    Plan Yearmeans, initially, the twelve (12)-month period from August 1 of each calendar
year to the next following July 31. Effective January 1, 2007, the Plan Year will change to
the calendar year. Accordingly, the Plan Year that begins August 1, 2006 will be a short
Plan Year that ends December 31, 2006; and, thereafter, Plan Year will mean the calendar
year.1.50
    
    Pre-Tax Contributionmeans contributions made by an Employer on behalf of each
Participant pursuant to a salary reduction agreement described in Section 3.1. Those
Pre-Tax Contributions which are eligible for a Matching Contribution pursuant to Section 3.2
will be referred to as Pre-Tax Matched Contributions. Those Pre-Tax Contributions which are
not eligible for a Matching Contribution pursuant to Section 3.2 will be referred to as
Pre-Tax Unmatched Contributions.1.51
    
    Pre-Tax Contribution Accountsmeans the Participants Employee Pre-Tax Matched
Contribution Account and Employee Pre-Tax Unmatched Contribution Account.
 9




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##### 



1.52
    
    Profit Sharing Accountmeans the portion of the Individual Account maintained by the
Trustee or the Recordkeeper for each Participant, Former Participant or Beneficiary,
reflecting the monetary value of such persons individual interest in the Trust Fund
attributable to an
Employers discretionary profit sharing contributions made to the Plan before August 1,
1998, and earnings thereon. Such Profit Sharing Account became fully vested as of July 31,
2005. Effective April 1, 2006, the Employer Profit Sharing Account will also be credited
with amounts attributable to discretionary profit sharing contributions, if any, made on
behalf of the Participant under the Kartens Plan.1.53
    
    QDROmeans a Domestic Relations Order that:
 (a)
    
    Creates or recognizes the existence of an Alternate Payees right, or assigns
to an Alternate Payee such right, to receive all or a portion of the benefits payable
with respect to a Participant under the Plan;(b)
    
    Does not require the Plan to provide any type or form of benefit, or any option
not otherwise provided under the Plan;(c)
    
    Does not require the Plan to provide increased benefits (determined on the
basis of actuarial value);(d)
    
    Does not require the payment of benefits to an Alternate Payee that are
required to be paid to another Alternate Payee under another order previously
determined to be a QDRO; and(e)
    
    Clearly specifies:
 (i)
    
    The name and last known mailing address of the Participant and
the name and mailing address of each Alternate Payee covered by the order
(unless such addresses are reasonably available to the Daily Administrator);(ii)
    
    The amount or percentage of the Participants benefits to be
paid by the Plan to each such Alternate Payee, or the manner in which such
amount or percentage is to be determined;(iii)
    
    The number of payments or payment periods to which such order
applies; and(iv)
    
    That it is applicable with respect to this Plan.
 Notwithstanding the foregoing, a Domestic Relations Order will not be considered to fail to
qualify as a QDRO with respect to any payment made before a Participant has separated from
service solely because the order requires that payment of benefits be made to an Alternate
Payee prior to the date the Participant attains age fifty (50).1.54
    
    QNEC Accountmeans the portion of the Individual Account maintained by the Trustee or
the Recordkeeper for each Participant, Former Participant or Beneficiary on and after April
1, 2006, reflecting the monetary value of such persons individual interest in the Trust
Fund attributable to QNECs made to the Plan and the earnings and losses thereon.
 10




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##### 



1.55
    
    QNECsmeans the qualified nonelective contributions made on an Eligible Employees, a
Participants or Former Participants behalf under the Plan in order to satisfy the actual
deferral percentage test described in Section 4.2 or the actual contribution percentage test
described in Section 5.1 or to correct certain operating discrepancies pursuant to certain
voluntary correction programs approved by the Internal Revenue Service. A Participants or
Former Participants QNECs will be fully vested and subject to the distribution restrictions
set forth in sections 401(k)(2)(B) and 401(k)(10) of the Code.1.56
    
    Qualified Electionmeans the designation of any Beneficiary in addition to or other
than the Participants Spouse, and if the Benefit Commencement Date is prior to the
Participants Normal Retirement Date, the election of a Benefit Commencement Date. No such
designation will be deemed to be a Qualified Election unless it satisfies the following
rules, and such other requirements as the Administrator may prescribe:
 (a)
    
    In the case of the designation of any Beneficiary in addition to or other than
the Participants Spouse, the Participants Spouse, if any, must consent to such
designation and such Spouses consent must be witnessed by a notary public.(b)
    
    Notwithstanding the consent requirement set forth in Section 1.56(a) above, if
the Participant warrants to the Administrator that such written consent may not be
obtained because there is no Spouse or the Spouse cannot be located or for any other
reason as the Administrator determines to be consistent with the requirements of
section 417 of the Code, a related designation of Beneficiary without spousal consent
may be deemed a Qualified Election to the extent permitted by sections 401(a)(11) and
417 of the Code; provided, however, that the Administrator may require the Participant
in such case to produce such evidence of the Spouses unavailability or other
circumstances as the Administrator deems to be appropriate.(c)
    
    A Qualified Election under this provision requiring consent of a Participants
Spouse will be valid only with respect to the Spouse who consented to the Qualified
Election, or in the event of a Qualified Election to which the Spouses consent has not
been obtained, with respect to that Spouse whose consent was not obtained (e.g., that
Spouse who cannot be located).(d)
    
    A revocation of or change in a prior designation of Beneficiary may be made by
a Participant at any time before the Benefit Commencement Date but any change in a
designation will be subject to the foregoing rules. Subject to the foregoing (relating
to a change by a Participant), the consent by a Participants Spouse to a designation
will be irrevocable. The number of revocations and designations or changes thereto
will not be limited during any applicable election period.(e)
    
    A designation of Beneficiary which, by reason of a failure to obtain required
spousal consent could not be given effect when made, may later be given effect if at
the relevant date the Participant has no Spouse or is not then otherwise required to
have spousal consent.
 A designation of Beneficiary will be effective as of the date of receipt by the
Administrator of a properly completed designation.
 11




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##### 



1.57
    
    Recordkeepermeans any person or entity appointed by the Company to perform record
keeping and other administrative services on behalf of the Plan. If no Recordkeeper is
appointed, the Trustee will perform the duties of the Recordkeeper.1.58
    
    Required Beginning Datemeans the April 1 following the later of the calendar year in
which the Participant attains age seventy and one-half (701/2) or terminates service,
provided, however, that if the Participant is a five-percent owner within the meaning of
section 401(a)(9) of the Code, the Required Beginning Date will be the April 1 following the
Plan Year in which the Participant attains age seventy and one-half (701/2) regardless of
whether the Participant has terminated service.1.59
    
    Rollover Accountmeans the portion of the Individual Account maintained by the Trustee
or the Recordkeeper for each Eligible Employee or Participant who makes a Rollover
Contribution reflecting the monetary value of such persons individual interest in the Trust
Fund attributable to such Rollover Contribution.1.60
    
    Rollover Contributionmeans any amount contributed or directly transferred to the Plan
which would constitute a rollover contribution within the meaning of the Code; provided,
however, that effective April 1, 2006, the following amounts will not constitute Rollover
Contributions under this Plan: (a) after-tax contributions, or (b) amounts held in an
individual retirement account or individual retirement annuity which does not constitute a
conduit account (i.e., holds money other than qualified retirement plan money).1.61
    
    Safe Harbor Match Accountmeans the portion of the Individual Account maintained by the
Trustee or the Recordkeeper for each Participant, Former Participant or Beneficiary
effective on and after April 1, 2006, reflecting the monetary value of such persons
individual interest in the Trust Fund attributable to Matching Contributions when the Plan
was a safe harbor Plan under sections 401(k) and 401(m) of the Code.1.62
    
    Spousemeans the person to whom a Participant is legally married as of such
Participants Benefit Commencement Date, or in the case of a Participant who dies prior to
his Benefit Commencement Date, the person to whom the Participant is legally married on the
date of his death. To the extent required by a QDRO pursuant to Section 9.20, a surviving
Spouse or former Spouse of a Participant will be treated as the Participants Spouse.1.63
    
    Trust Agreement
means the Zale Corporation Savings & Investment Trust Agreement entered into between the
Company and the Trustee to carry out the purposes of the Plan and under which the Trust Fund
is maintained; provided, that if such agreement be amended or supplemented, Trust Agreement,
as of a particular date, will mean such agreement, as amended and supplemented and in force
on such date.1.64
    
    Trust Fundmeans all assets of whatsoever kind and nature from time to time held by the
Trustee pursuant to terms and conditions of the Trust Agreement out of which benefits of the
Plan are provided. The Trust Fund may be divided into Investment Funds as provided in
Section 16.1.1.65
    
    Trusteemeans the trustee or trustees acting at any time as Trustee under the Trust
Agreement.1.66
    
    Valuation Datemeans each day of the Plan Year on which the New York Stock Exchange is
open.
 12




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##### 



1.67
    
    Year of Servicemeans a twelve (12)-month period commencing on the Employees
Employment Commencement Date during which the Employee has one thousand (1,000) or more
Hours of Service. Effective April 1, 2006, in the event that an Employee does not perform
one thousand (1,000) Hours of Service during the twelve (12)-month period commencing on his
Employment Commencement Date, subsequent Years of Service will be determined by the Plan
Year, commencing with the Plan Year that begins during such Employees initial employment
year. In connection with the change in Plan Year to the calendar year effective January 1,
2007, an Employee who does not complete one thousand (1,000) Hours of Service during his
initial employment year and whose eligibility is being determined on the basis of the Plan
Year, will be credited with a Year of Service if he performs one thousand (1,000) Hours of
Service during either the twelve (12) month period beginning on August 1, 2006 or the twelve
(12) month period beginning January 1, 2007.
 
 End of Article I 13




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ARTICLE II
 ELIGIBILITY OF EMPLOYEES
 2.1
    
    Eligibility to Participate in the Plan. An Eligible Employee who was a Participant in
the Plan on the Effective Date will continue to be a Participant on or after that date. An
Eligible Employee who was not a Participant on the Effective Date, will become a Participant
as of the Entry Date coinciding with or next following the date he will have both (a)
completed one (1) Year of Service, and (b) attained age twenty-one (21), if employed by an
Employer on such Entry Date. An Eligible Employee who completes the eligibility
requirements but is not employed by an Employer on his Entry Date will become a Participant
as provided in Section 2.2. An Employee who completes the service requirements while
employed by an Affiliated Company which is not an Employer will become a Participant as of
the date on which he becomes an Eligible Employee of an Employer (including, without
limitation, by reason of such Affiliated Companys adoption of the Plan as provided in
Article XIV and consequent redefinition as an Employer), or the date he attains age
twenty-one (21), if later. An Eligible Employee who completes the eligibility requirements
but does not elect to enroll in the Plan on the first Entry Date on which he is eligible may
elect to enroll as of any subsequent payroll period.2.2
    
    Eligibility upon Reemployment. Each Eligible Employee who has satisfied the eligibility
requirements in Section 2.1 and is not employed by an Employer on the Entry Date on which he
would have become a Participant in the Plan, and who returns to employment with an Employer,
will be eligible to become a Plan Participant on the date on which he resumes employment as
an Eligible Employee with an Employer.Each Eligible Employee who has attained age twenty-one (21) but has not completed one (1)
Year of Service at the time of his termination of employment from the Employer and all
Affiliated Companies will be eligible to become a Participant as follows: (a) if the
Employee is reemployed by the Employer before incurring a Break in Service, he will have his
prior Hours of Service reinstated and will be eligible to become a Participant as of the
Entry Date coinciding with or next following the date he will have both (i) completed one
(1) Year of Service, and (ii) attained age twenty-one (21), if employed by an Employer as an
Eligible Employee on such Entry Date and (b) if the Employee is reemployed by the Employer
after incurring a Break in Service, his prior Hours of Service will be disregarded and he
will be eligible to become a Participant as of the Entry Date coinciding with or next
following the date he will have both (A) completed one (1) Year of Service, and (B) attained
age twenty-one (21), if he is employed by an Employer as an Eligible Employee on such Entry
Date.Each Eligible Employee who has not attained age twenty-one (21) and has completed one (1)
Year of Service at the time of his termination of employment from the Employer and all
Affiliated Companies, will be eligible to become a Participant on the date on which he will
have both resumed employment as an Eligible Employee with an Employer and attained age
twenty-one (21).2.3
    
    Reemployment of Participant. If the employment of a Participant is terminated for any reason and he subsequently is
reemployed by an Employer, he will be eligible to become a Participant on the date he
resumes employment with an Employer as an Eligible Employee.
 14




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2.4
    
    Cessation of Participation. A Participant will immediately cease to be eligible to make
Pre-Tax Contributions and to receive an allocation of Matching Contributions under the Plan
upon the occurrence of either of the following events:
 (a)
    
    termination of his salary reduction agreement established pursuant to Section
3.1; or(b)
    
    termination of his status as an Eligible Employee with all Employers for any
reason.
 If a Participant is transferred to a class of employment not eligible for participation in
the Plan but continues to be employed by an Affiliated Company (i.e., he is no longer an
Eligible Employee), no further contributions to the Trust Fund will be made by or on behalf
of the Participant under the Plan with respect to periods on and after the transfer. Any
Participant described in the preceding sentence may recommence his participation in the
features of the Plan for which he was eligible at the time of the transfer to an ineligible
class if he is transferred back to eligible employment (i.e., he becomes an Eligible
Employee) and makes the appropriate elections through the Interactive Electronic
Communication system in accordance with Section 3.1. During the period of his employment in
such transferred position, the Participant will continue to be (i) eligible for withdrawals
(subject to the requirements of Article IX), (ii) permitted to transfer his Individual
Account among the Investment Funds, and (iii) permitted to change Beneficiaries in
accordance with the provisions of the Plan.2.5
    
    Eligibility Upon Entry or Reentry into Eligible Class of Employees. In the event a
Participant is excluded because he is no longer an Eligible Employee as specified in this
Article II, such Employee will be eligible to become a Participant immediately upon his
return to status as an Eligible Employee. In the event that an Employee who is not a former
Participant in the Plan becomes an Eligible Employee, such Employee will be eligible to
become a Participant immediately if such Employee has satisfied the eligibility requirements
of Section 2.1 and would have previously been eligible to become a Participant had he been
an Eligible Employee.
 
 End of Article II 15




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##### 



ARTICLE III
 CONTRIBUTIONS
 3.1
    
    Pre-Tax Contributions.
 (a)
    
    Amount of Pre-Tax Contributions. Effective as soon as administratively
practicable on or after April 1, 2006, unless the Participant elects otherwise, upon
satisfying the eligibility requirements of Article II, or upon his reemployment
after satisfying such eligibility requirements, the Participant will automatically
be enrolled in the Plan at a Pre-Tax Contribution level of two percent (2%) of
Compensation and will be deemed to have entered into a salary reduction agreement
with the Employer with respect to such Pre-Tax Contribution. Such automatic
enrollment will be implemented as soon as administratively feasible after the
Participants satisfaction of the eligibility requirements or reemployment after
satisfying such eligibility requirements, as the case may be. Alternatively, such
Participant or any other Eligible Employee who is eligible to participate in the
Plan may enter into a salary reduction agreement electing to have the Employer make
Pre-Tax Contributions to the Trust Fund on his behalf in an amount equal to at least
one percent (1%) and not more than sixty percent (60%) (thirty percent (30%) if the
Participant is a Highly Compensated Employee) (in whole percentages) of his
Compensation each Plan Year, subject to the restrictions and limitations of Article
IV.(b)
    
    Limit on Pre-Tax Contributions. No Participant will be permitted to have
Pre-Tax Contributions made under the Plan or under any other qualified plan
maintained by an Employer during any calendar year in excess of the dollar
limitation contained in section 402(g) of the Code (fifteen thousand dollars
($15,000) for year 2006, with such amount to be adjusted automatically to reflect
any cost-of-living adjustment authorized by section 402(g)(4) of the Code), as in
effect for such calendar year, except to the extent permitted under Section 3.4 of
this Article III and section 414(v) of the Code, if applicable. In the event that a
Participants Pre-Tax Contributions exceed this dollar amount, such contributions
will be disposed of in accordance with Section 4.1.(c)
    
    Salary Reduction Agreement.
 (i)
    
    Nature of Agreement. The salary reduction agreement described in this
Section 3.1 will be a legally binding agreement whereby (A) the Participant
agrees that, as of the effective date of the agreement, the Compensation
otherwise payable to him thereafter will be reduced by an amount (as
selected or, in the case of automatic enrollment under Section 3.1(a) above,
deemed selected by the Participant) not to exceed the maximum percentage
permitted under Section 3.1(a), and (B) the Employer agrees to contribute
the total amount of such reduction in Compensation to the Trust Fund on
behalf of the Participant as a Pre-Tax Contribution under Section 3.1(a).
Such contributions will be made by the Employer to the Trust Fund as soon as
administratively possible after the payroll period to which such
contribution relates. Subject to the provisions of Section 3.1(c)(iv) and
Article IV, a Participants salary reduction agreement will remain in effect
until modified or terminated in accordance with Section 3.1(c)(iii) or
Section 3.1(c)(iv).
 16




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##### 



(ii)
    
    Effective Date of Agreement. The effective date of a Participants
salary reduction agreement will be no earlier than the Entry Date following
the date such agreement is made (or deemed to be made in the case of a newly
eligible or rehired Eligible Employee pursuant to Section 3.1(a)).(iii)
    
    Amendment of Pre-Tax Contribution Elections. As of any payroll period,
a Participant may amend his salary reduction agreement to stop making
Pre-Tax Contributions with respect to Compensation not yet paid using the
Interactive Electronic Communication system. If a Participant elects to stop
making Pre-Tax Contributions, the Participant may elect to resume making
Pre-Tax Contributions by so electing using the Interactive Electronic
Communication system. The effective date of such new salary reduction
agreement will be as soon as administratively feasible after such election
but no earlier than the first day of the next payroll period beginning after
the date the election is received by the Administrator through the
Interactive Electronic Communication system. A Participant may increase or
decrease his Pre-Tax Contributions (within the limits of Section 3.1(a)) by
so electing using the Interactive Electronic Communication system. The
effective date of the increase or decrease will be as soon as
administratively feasible after such election but no earlier than the first
day of the next payroll period beginning after the date the election is
received by the Administrator through the Interactive Electronic
Communication system. Effective April 1, 2006, subject to the maximum
(aggregate) percentage permitted under Section 3.1(a) and the limitations on
Annual Additions set forth in Article VII the Participant may elect to have
the amount of his Pre-Tax Contributions automatically increased by a
designated percentage each Plan Year. Such election will be made using the
Interactive Electronic Communication system.(iv)
    
    Transfer to Ineligible Employment or Termination of Employment. A
Participants salary reduction agreement will terminate automatically if the
Participant transfers to a class of employment not eligible for
participation in the Plan or if he terminates his employment as an Eligible
Employee with his Employer. Upon return of the Participant to eligible
employment, the Participant will be permitted to execute a new salary
reduction agreement and resume having contributions made to the Trust Fund
on his behalf under Section 3.1(a), provided that the effective date of the
new salary reduction agreement will be no earlier than the laterof (A) the
first payroll period beginning after the new salary reduction
agreement is received in executed form by the Administrator or (B) the date
the Participant resumes eligible employment with an Employer. Transfers of
Participants to different payroll systems among the Employers will be
administered by procedures established by the Administrator.
 3.2
    
    Matching Contributions. Each Plan Year, the Employer will make a Matching Contribution
to the Plan in an amount equal to fifty percent (50%) of the first four percent (4%) of
Compensation that each eligible Participant contributes to the Plan as a Pre-Tax
Contribution (i.e., a Pre-Tax Matched Contribution). In calculating the Matching
Contribution, any Pre-Tax Contribution made on behalf of a Participant for a payroll period
in excess of four percent (4%) of the Participants Compensation paid during such payroll
period (i.e., a Pre-Tax Unmatched Contribution) will not be considered. A
 17




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Participant will
be eligible for an allocation of Matching Contributions if he is employed on the last day of
the Plan Year or if the Participant retires on or after his Normal Retirement Date, dies or
becomes Disabled during the Plan Year. Matching Contributions made pursuant to this Section
will be subject to the limitations and restrictions of Article V.3.3
    
    QNECs. The Employer, in its discretion, may contribute to the Trust Fund as a QNEC for
such Plan Year the amounts necessary to cause the Plan to satisfy the restrictions set forth
in Section 4.2 (regarding the actual deferral percentage test) and Section 5.1 (regarding
the actual contribution percentage test). QNECs will be allocated to all Participants or
only to Participants who are not Highly Compensated Employees, as elected by the Employer,
in the ratio in which each such Participants Compensation for the Plan Year bears to the
total Compensation for such Participants for such Plan Year. For purposes of this
allocation, an Eligible Employee will be considered a Participant regardless of whether he
has elected to make Pre-Tax Contributions to the Plan. Each Plan Year an Employer will
designate the portion, if any, of the QNEC that it made for the Plan Year that will be
considered under Section 4.2 for the actual deferral percentage test and the portion, if
any, that will be considered under Section 5.1 for the actual contribution percentage test.3.4
    
    Catch-Up Contributions. Each Participant who has attained age fifty (50) or who will
attain age fifty (50) by the close of the then current Plan Year, may elect for such Plan
Year to make Catch-Up Contributions pursuant to this Section 3.4. A Participant may make
Catch-Up Contributions pursuant to a salary reduction agreement in whole percentage
increments from one percent (1%) to fifty percent (50%) of his Compensation, subject to the
calendar year limit on such contributions under section 414(v) of the Code, when his Pre-Tax
Contributions exceed any of the following limits: (a) the Plan limit for Pre-Tax
Contributions, as set forth in Section 3.1(a); (b) the statutory limit for elective
deferrals under section 402(g) of the Code, as set forth in Section 3.1(b), or the statutory
limit on annual additions under section 415 of the Code, as set forth in Article VII; or (c)
the actual deferral percentage test limit under section 401(k)(3) of the Code, as set forth
in Section 4.2.Such Catch-Up Contributions will be made pursuant to administrative procedures established
by the Administrator. Such procedures will provide that Catch-Up Contributions will be
subject to a withholding hierarchy for purposes of determining the amount of Catch-Up
Contributions that may be contributed on behalf of a Participant. The Administrator will
determine the order of withholdings taken from a Participants Compensation (e.g.,for
federal, state and local taxes, social security, wage garnishments, welfare plan
contributions, 401(k) deferrals, and similar withholdings) and Catch-Up Contributions will
be subject to such withholding hierarchy. As a result, Catch-Up Contributions may be
effectively limited to Compensation available after the application of such withholding
hierarchy. Further, to the extent applicable, all plans of the Company and its Affiliated
Companies will provide for catch-up contributions in accordance with the provisions of
section 414(v) of the Code and the final regulations issued thereunder.Catch-Up Contributions will not be subject to (i) the limits on elective deferrals under
section 402(g) of the Code (as set forth in Section 3.1(b)), (ii) the actual deferral
percentage limit under section 401(k)(3) of the Code (as set forth in Section 4.2), or (iii)
the limits on annual additions under section 415 of the Code (as set forth in Article VII).
Similarly, Catch-Up Contributions are not taken into account for purposes of section
 18




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410(b)
or 416 of the Code, except that Catch-Up Contributions made in prior Plan Years will be
taken into account in determining whether the Plan is top-heavy for the Plan Year under
Article XVII. Except as otherwise stated herein, Catch-Up Contributions will be treated as
Pre-Tax Contributions for all purposes under the Plan.3.5
    
    Time and Form of Contributions. Payments of contributions due under Section 3.1 will be
made at such time as the Employer may determine but at least as promptly as the time
prescribed by regulations promulgated by the Department of Labor, and the Matching
Contributions due under Section 3.2 will be made at such time as the Employer will
determine, except that the Matching Contribution will be paid in full not later than the
time required by law to enable the Employer to deduct such contribution on its federal
income tax return with respect to its taxable year. All contributions will be made in cash
(by check or wire transfer), or in Common Stock as determined by the Chief Executive Officer
of the Company in his or her discretion. The Chief Executive Officer of the Company may
provide that all or a portion of such contributions will be allocated by payroll period
during the Plan Year. Contributions made after the last day of the Plan Year but within the
time for filing an Employers federal income tax return (including extensions thereof) will
be deemed made as of the last day of that Plan Year if so directed by the Employer, except
such contributions will not share in increases, decreases, or income to the Trust Fund prior
to the date actually made.Notwithstanding the foregoing, upon an Employers request, a contribution which was made
upon a mistake of fact or conditioned upon initial qualification of the Plan (application
for which is made by the time prescribed by law for filing the Employers tax return for the
taxable year in which the Plan is adopted, or such later date as the Secretary of the
Treasury may prescribe) or upon deductibility of the contribution will be returned to the
Employer within one (1) year after payment of the contribution, denial of the qualification,
or disallowance of the deduction (to the extent disallowed), as the case may be; provided,
however, the amount returned to an Employer due to mistake of fact or denial of
deductibility will not be increased by any earnings thereon and will be reduced by any
losses attributable to such amount.3.6
    
    Limit on Employer Contributions. Notwithstanding the foregoing provisions of Sections
3.1, 3.2, or 3.3, the contribution of an Employer for any Plan Year (whether made pursuant
to Sections 3.1, 3.2, or 3.3) will in no event exceed an amount which will, under the law
then in effect, be deductible by the Employer in computing its federal taxes based on income
for its taxable year. As permitted by section 401(a)(27) of the Code, any Employer may make
contributions to the Plan without regard to net profits, current or accumulated.3.7
    
    Manner of Making Contributions. All contributions to the Trust Fund will be paid
directly to the Trustee. In connection with each contribution, the Employer will provide the
Recordkeeper with information that:
 (a)
    
    identifies each Participant on whose behalf the contribution is being made and
the amount thereof;(b)
    
    states whether the amount contributed on behalf of the Participant is a Pre-Tax
Matched Contribution, a Pre-Tax Unmatched Contribution, a Matching Contribution, a
QNEC, a Catch-Up Contribution, or a Rollover Contribution; and(c)
    
    directs the investment of the amount contributed on behalf of the Participant.
 19




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3.8
    
    Rollover Contributions. An Employee, regardless of whether he is a Participant in the
Plan, may make a Rollover Contribution to the Plan at any time pursuant to the provisions of
this Section 3.8. If the Employee is not a Participant, his Rollover Account will
constitute his entire interest under the Plan until such time, if any, as he satisfies the
eligibility requirements under Section 2.1 and elects to make Pre-Tax Contributions to the
Plan. The Recordkeeper will allocate and credit a Rollover Contribution to the Employees
Rollover Account as of the Valuation Date immediately following the date on which the
Rollover Contribution is made. An investment election which directs that such contribution
be invested in one or more of the Investment Funds in accordance with Section 16.1 will be
completed through the Interactive Electronic Communication system with respect to the
Employees Rollover Contribution. In no event will the existence of a Rollover Contribution
held for the benefit of an Employee be construed to entitle the Employee to any amount in
the Plan to which such Employee is not otherwise entitled under the other provisions of the
Plan.3.9
    
    Contributions with Respect to Military Leave. Notwithstanding any provision of the Plan
to the contrary, contributions, benefits and service credit with respect to qualified
military service will be provided in accordance with section 414(u) of the Code.
Specifically, such Participant will be given credit for qualified military service (as
defined in Chapter 43 of Title 38, United States Code) for eligibility and vesting purposes
in accordance with section 414(u) of the Code and will be eligible to make additional
contributions to the Plan with respect to such military service as provided under section
414(u) of the Code. Accordingly, a Participant who returns to employment with the Employer
pursuant to section 414(u) of the Code will be permitted, during the period that begins on
the date of reemployment and continues for five (5) years or, if less, three (3) times the
period of military service, to make Pre-Tax
Contributions and Catch-Up Contributions with respect to such period of military service,
and the Employer will make any associated Matching Contributions with respect to such
Pre-Tax Contributions. The amount of such Pre-Tax Contributions, Catch-Up Contributions and
Matching Contributions will be based on the terms of the Plan in effect during such period
of military service and will be calculated based on the Compensation the Participant would
have received but for such military service as provided in section 414(u)(7) of the Code.
Any such make-up contributions will not be taken into account for purposes of the limit on
elective deferrals under section 402(g) of the Code or the limit on annual additions under
section 415 of the Code for the Plan Year in which such contributions are actually made;
but, rather, will be subject to such limits for the Plan Year in which such contributions
relate. Further, such make-up contributions will not be subject to the actual deferral
percentage test of Section 4.2 of the Plan or the actual contribution percentage test of
Section 5.1 of the Plan as provided pursuant to sections 401(k) and 401(m) of the Code.
Finally, a Participant who took a distribution from the Plan prior to his reemployment will
be entitled to repay such distribution when he is reemployed pursuant to guidance issued
under section 414(u) of the Code.3.10
    
    Administrative Mistake.
 (a)
    
    Shortage in Contribution Amounts. If due to administrative error, the amount or
the percentage of a Participants Pre-Tax Contributions and/or Catch-Up
Contributions that is deducted from his Compensation for any pay period is less than
the percentage elected by the Participant with respect to such pay period and the
Participant notifies the Administrator of the payroll deduction error within
 20




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forty-five (45) days after the date the Participant receives his next paycheck,
correction of such error will be made on a retroactive basis as follows:
 (i)
    
    If the error is timely reported within forty-five (45) days
after receipt of the Participants paycheck in which the error occurred, the
Participant will be permitted to make a temporary election to increase the
percentage to be deducted from his Compensation for future pay periods. Such
temporary election may provide for increased contributions to the Plan in any
of the following ways:
 (A)
    
    Over the remaining number of pay periods in the
applicable Plan Year;(B)
    
    Over any number less than the remaining pay
periods during the applicable Plan Year; or(C)
    
    As a lump sum payroll deduction in any one or
more of the remaining pay periods in the Plan Year.
 The Participants make-up contributions with respect to Pre-Tax
Contributions will, to the extent applicable, be subject to the applicable
limitation on Pre-Tax Contributions under section 402(g) of the Code and
will be counted for purposes of applying the limitations under Section 4.2
(regarding the actual deferral percentage test), Section 5.1 (regarding the
actual contribution percentage test), and Article VII (regarding the
limitations on Annual Additions) for the Plan Year during which such
contributions are made. The Participants make-up contributions with
respect to Catch-Up Contributions will be subject to the annual limit on
Catch-Up Contributions under section 414(v) of the Code.(ii)
    
    If the error is timely reported within forty-five (45) days
after receipt of the Participants paycheck in which the error occurred but
such error relates to the preceding Plan Year, the Employer will make an
additional contribution to the Plan to the extent necessary to correct the
error. Such additional make-up contribution will be made in the form of a
nonelective contribution with respect to errors in Pre-Tax Contributions and
Catch-Up Contributions. The nonelective contributions made pursuant to this
Section 3.10(a)(ii) will be fully vested and subject to the same distribution
restrictions as apply to Pre-Tax Contributions. Any such nonelective
contributions will not count against the applicable limitation on Pre-Tax
Contributions under section 402(g) of the Code for either the Plan Year to
which such contributions relate or the Plan Year in which such contributions
are made; however, the nonelective contributions that are attributable to
Pre-Tax Contributions will be counted for purposes of applying the limitations
under Section 4.2 (regarding the actual deferral percentage test), and Article
VII (regarding the limitations on Annual Additions) for the Plan Year to which
the contributions relate.The Employer will also make a corresponding Matching Contribution with
respect to such of the Pre-Tax Contributions made up by Participants or the
Employer as are also Pre-Tax Matched Contributions. Such Matching
Contribution(s) will be counted for purposes of applying the limitations
 21




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under Section 5.1 (regarding the actual contribution percentage test) and
Article VII (regarding the limitations on Annual Additions) for the Plan
Year to which the contributions relate.If correction is effectuated by the Employer, earnings will be added to the
Pre-Tax Contributions or Matching Contributions, as applicable, pursuant to
procedures established by the Administrator, for the period commencing on
the date the Pre-Tax Contributions or Matching Contributions, as applicable,
should have been made, and ending on the date the make-up contribution is
actually made to the Plan. Actual earnings will be credited to those
make-up contributions made by Participants.Unless the Administrator determines that unusual and extenuating
circumstances warrant otherwise, no make-up contributions will be permitted
or made with respect to any prior shortage in the amount of Pre-Tax
Contribution or Catch-Up Contribution deductions which a Participant knew or
should have known to have occurred but as to which such Participant failed
to give timely notice (i.e., within forty-five (45) days after receipt of
his next paycheck) to the Administrator; instead, the Participants Pre-Tax
Contribution or Catch-Up contribution deduction amounts will only be
corrected on a prospective basis. In addition, except as provided above, in
no event will Participants be required or permitted
to retroactively make either Pre-Tax Contributions or Catch-Up Contributions
for any period for which such contributions were not made.
 (b)
    
    Over-payment of Contributions. If due to an administrative error, the amount or
percentage of a Participants Pre-Tax Contributions or Catch-Up Contributions that
is deducted from his Compensation for any pay period is more than the percentage
elected by the Participant with respect to such pay period, to the extent necessary
to correct the error and in accordance with rules established by the Administrator,
the Participant may request both a refund of the excess contributions and
prospective reduction of his Pre-Tax Contribution or Catch-Up Contribution deduction
amounts by notifying the Administrator of the payroll deduction error within
forty-five (45) days after receipt of the Participants paycheck in which the error
occurred. The Matching Contributions, if any, associated with any such excess
Pre-Tax Contributions which are refunded to the Participant will be forfeited to the
Plan. In the event that the Participant notifies the Administrator of the error
more than forty-five (45) days after receiving his paycheck, such correction in
Pre-Tax Contribution or Catch-Up Contribution deduction amounts will be done only on
a prospective basis and no refund of the excess amounts will be permitted by reason
of such mistake.
 
 End of Article III 22




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ARTICLE IV
 LIMITATIONS AND RESTRICTIONS ON PRE-TAX CONTRIBUTIONS
 4.1
    
    Excess Elective Deferrals.
 (a)
    
    Determination of Excess Elective Deferrals. If the Pre-Tax Contributions made
on behalf of a Participant for a calendar year exceed the annual dollar limit
allowed for such Participants Pre-Tax Contributions for that year as set forth in
Section 3.1(b), the amount of such excess will be referred to as Excess Elective
Deferrals. Excess Elective Deferrals (as adjusted for the income or loss
attributable to such Excess Elective Deferrals) will be distributed to the
Participant not later than the April 15 immediately following the calendar year of
the Participant for which the Excess Elective Deferrals were made to the Plan. For
purposes of this Section 4.1, Pre-Tax Unmatched Contributions will first be
considered as Excess Elective Deferrals and if such Pre-Tax Unmatched Contributions
are not sufficient to eliminate the Excess Elective Deferrals, then Pre-Tax Matched
Contributions will be considered as Excess Elective Deferrals and any Matching
Contributions made in connection therewith will be forfeited in accordance with
Section 4.1(c).(b)
    
    Income and Loss Attributable to Excess Elective Deferrals. The Administrator
will reduce the amount of the Excess Elective Deferrals for a calendar year
distributable to the Participant under this Section 4.1 by the amount of Excess
Contributions (as determined under Section 4.2), if any, previously distributed to
the Participant for the Plan Year beginning in that calendar year. Such Excess
Elective Deferrals will be further adjusted for any applicable investment income or
losses attributable to such amounts for the Plan Year. The Administrator will
determine such net income or net loss in the same manner as described in Section
4.2(b) for Excess Contributions, except the numerator of the allocation fraction
will be the amount of the Participants Excess Elective Deferrals for the calendar
year under this Section 4.1 and the denominator of the allocation fraction will be
the balance in the Participants Employee Pre-Tax Unmatched Contribution Account
and/or Employee Pre-Tax Matched Contribution Account, as applicable, attributable to
those Pre-Tax Contributions which constitute Excess Elective Deferrals as of the end
of the calendar year (without regard to the net income or net loss for the calendar
year on that portion of the Participants Employee Pre-Tax Unmatched Contribution
Account and/or Employee Pre-Tax Matched Contribution Account, as applicable);
provided, however, if there is a loss attributable to such excess amount, the amount
of the distribution adjusted for such loss will be limited to an amount which does
not exceed the lesserof (i) the balance of the Participants Employee Pre-Tax
Unmatched Contribution Account and/or Employee Pre-Tax Matched Contribution Account,
as applicable or (ii) the Pre-Tax Unmatched Contributions or Pre-Tax Matched
Contributions, as applicable, made on behalf of the Participant for that calendar
year.For periods prior to April 1, 2006, in adjusting a Participants Excess Elective
Deferrals for the income or loss attributable to such Excess Elective Deferrals, the
income or loss attributable to such Excess Elective Deferrals for the gap period
will not be considered. For purposes of this Section 4.1, gap period will mean the
period beginning with the first day of the calendar year next following
 23




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the calendar
year for which the Excess Elective Deferrals were made on behalf of the Participant
and ending on the date such Excess Elective Deferrals are distributed to the
Participant. Effective on and after April 1, 2006, the Administrator will adjust the
Excess Elective Deferrals by the net income or loss accrued thereon during the gap
period by taking ten percent (10%) of the net income or loss determined in
accordance with the formula set forth in the preceding paragraph and multiplying it
by the number of whole calendar months between the end of the Plan Year in which
such Excess Elective Deferrals occurred and the date of distribution to the
applicable Participant(s), counting the month of distribution if such distribution
occurs after the fifteenth (15th) of the month.(c)
    
    Associated Matching Contributions. If Excess Elective Deferrals are distributed
to a Participant from the Plan pursuant to this Section 4.1, the Matching
Contribution, if any, to which such Excess Elective Deferrals relate (plus any
income and minus any loss attributable thereto), determined after the application of
Section 5.2 (regarding the actual contribution percentage test), will be forfeited
at the time the Excess Elective Deferrals are distributed, and the forfeitures will
be applied as provided in Section 9.1(b).(d)
    
    Multiple Plan Participation. If the Participant also (i) participates in one or
more other qualified cash or deferred arrangements within the meaning of section
401(k) of the Code, (ii) has an employer contribution made on his behalf pursuant to
a salary reduction agreement under section 408(k) of the Code, or (iii) has an
employer contribution made on his behalf pursuant to a salary reduction agreement
toward the purchase of an annuity contract under section 403(b) of the Code, and the
sum of the elective deferrals (as defined in section 402(g)(3) of the Code) that are
made for the Participant during a calendar year under such other arrangements and
this Plan exceeds the annual dollar limit allowed for such Participants
contributions for that calendar year, the Participant will, not later than the March
1 following the close of his calendar year for which the Excess Elective Deferrals
have been made, notify the Administrator in writing of the portion of the Excess
Elective Deferrals that he wishes to be allocated to this Plan, if any. If all
plans, contracts and agreements described in section 401(k), 403(b) and 408(k) of
the Code pursuant to which the Participant is able to defer amounts for a calendar
year for which Excess Elective Deferrals have been made are sponsored by an
Affiliated Company, the Administrator will determine to which plan, contract or
agreement (including the Plan) the Excess Elective Deferrals will be allocated for
that calendar year, and if the Excess Elective Deferrals are to be allocated to the
Plan, the Administrator will notify the Trustee and the Participant in writing not
later than March 1 following the close of that calendar year. Such notification will
be deemed to be a notification by the Participant to the Administrator under this
Section 4.1(d). The portion of the Excess Elective Deferrals allocated to this
Plan, if any, will be adjusted for income and loss in the manner provided in Section
4.1(b) above and will then be distributed to the Participant no later than the
immediately following April 15.If the Pre-Tax Contributions made on behalf of a Participant for a calendar year do
not exceed the annual dollar limit allowed for such Participants contributions for
that calendar year and the Administrator has not received any written Notice from
the
 24




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Participant (or been deemed to have received written Notice from the
Participant pursuant to the provisions of this Plan) by the March 1 immediately
following that calendar year notifying the Administrator that the Participant
allocates a portion of the Excess Elective Deferrals, if any, for that calendar year
to the Plan, the Administrator may assume that none of the Pre-Tax Contributions
made on behalf of the Participant for that calendar year constitute Excess Elective
Deferrals and that no distribution is required to be made from the Participants
Pre-Tax Contribution Accounts pursuant to this Section 4.1. Notwithstanding the fact
that Excess Elective Deferrals have been (or will be) distributed to a Highly
Compensated Employee as provided above, the excess amount of such Pre-Tax
Contributions or the portion of such Pre-Tax Contributions that are deemed to
constitute Excess Elective Deferrals by reason of the Administrators or
Participants written Notice of allocation hereunder will still be treated as a
Pre-Tax Contribution for purposes of applying the actual deferral percentage test
described in Section 4.2 for the Plan Year in which such Excess Elective Deferrals
were made, except to the extent provided under rules prescribed by the Secretary of
the Treasury.
 4.2
    
    Actual Deferral Percentage Test. The Plan will satisfy one of the actual deferral
percentage tests set forth in section 401(k)(3) of the Code. Such tests will be performed
using the prior year testing method as described in section 401(k)(3) of the Code. In
addition, the Plan will not be permissively aggregated with another plan for purposes of
performing such tests unless such plan also uses the prior year testing method.
 (a)
    
    Prospective Reduction or Suspension of Pre-Tax Contributions. Notwithstanding
any provisions of the Plan to the contrary, if the Administrator determines that a
Participants Pre-Tax Contributions under Section 3.1(a) for any Plan Year would
cause the Plan to fail to meet the nondiscrimination requirements of section 401(k)
of the Code, then the Administrator may, in its sole discretion, reduce (or suspend,
if necessary) the rate of future Pre-Tax Contributions of those Participants who are
in the group of Highly Compensated Employees; such reduction to first apply to the
highest rate on a uniform basis to all such Participants who are contributing the
highest rate, and so on, in descending order from the highest rate to the lowest
rate. The Administrator will establish such rules and give such directions to the
Trustee as will be appropriate to carry out the above provisions of this Section
4.2(a).(b)
    
    Determination and Distribution of Excess Contributions. If after making the
adjustments in Section 4.2(a), if any, Excess Contributions as determined pursuant
to this Section 4.2(b) remain, such Excess Contributions will be distributed
pursuant to the following provisions. In the event that the
amounts of Pre-Tax Contributions made by the group of Participants who are Highly
Compensated Employees for any Plan Year, when expressed as an average of the sum of
the individual percentage of Compensation for such Plan Year, of each Participant
who is a Highly Compensated Employee for such Plan Year (including a zero percentage
(0%) for each noncontributing Participant in such group) results in an average
deferral percentage (within the meaning of section 401(k) of the Code) for such
group, when compared to the corresponding average deferral percentage of the group
of Participants who are not Highly Compensated Employees for the prior Plan Year, in
excess of the permissible average deferral percentage for such group under section
401(k)(3) of the Code, using the nondiscrimination test applicable to Pre-Tax
Contributions
 25




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described in Treas. Reg. § 1.401(k)-1(b) for Plan Years beginning
before August 1, 2006 and Treas. Reg. § 1.401(k)-2 for Plan Years beginning on and
after August 1, 2006, then the amount of Pre-Tax Contributions
that caused such
excess will be deemed to be Excess Contributions for such Plan Year and will be
distributed to Participants who are Highly Compensated Employees pursuant to this
Section 4.2(b).Excess Contributions, adjusted for any applicable Trust Fund investment income or
losses attributable thereto as provided in this Section 4.2(b) for the applicable
Plan Year will be distributed to the applicable Participants in the group of Highly
Compensated Employees to the extent possible within two and one-half (21/2) months
following the Plan Year in which such Excess Contributions occurred, but in no event
later than the close of the Plan Year following the Plan Year in which such Excess
Contributions occurred.The Administrator will determine the net income or net loss allocable to the
Participants Employee Pre-Tax Matched Contribution Account and/or Employee Pre-Tax
Unmatched Contribution Account for the Plan Year (including, if applicable, the QNEC
Account for the Plan Year) by multiplying such account(s) by a fraction, the
numerator of which is such Participants Excess Contributions for the Plan Year and
the denominator of which is the balance in the Participants Employee Pre-Tax
Matched Contribution Account and/or Employee Pre-Tax Unmatched Contribution Account
(including the QNEC Account if any of such contributions are used for purposes of
the actual deferral percentage test in this Section 4.2 for the Plan Year) without
regard to any income or loss occurring during such Plan Year; provided, however, if
there is a loss attributable to such excess amount, the amount of the distribution
adjusted for such loss will be limited to an amount which does not exceed the lesser
of (i) the balance of the Participants Employee Pre-Tax Unmatched Contribution
Account, Employee Pre-Tax Matched Contribution Account and/or QNEC Account, as
applicable or (ii) the Pre-Tax Unmatched Contributions or Pre-Tax Matched
Contributions, as applicable, made on behalf of the Participant for that Plan Year.For periods prior to April 1, 2006, in adjusting a Participants Excess
Contributions for the income or loss attributable to such Excess Contributions, the
income or loss attributable to such Excess Contributions for the gap period (i.e.,
the period beginning with the first day of the Plan Year next following the Plan
Year for which the Excess Contributions were made by the Participant and ending on
the date the Excess Contributions are distributed to the Participant) will not be
included. Effective on and after April 1, 2006, the Administrator will
adjust the Excess Contributions by the net income or loss accrued thereon during the
gap period by taking ten percent (10%) of the net income or loss determined in the
preceding paragraph and multiplying it by the number of whole calendar months
between the end of the Plan Year in which such Excess Contributions were made and
the date of distribution to the applicable Participant(s), counting the month of
distribution if distribution occurs after the fifteenth (15th) of the month.The Participants Excess Contributions to be distributed in accordance with this
Section 4.2(b) will be inclusive of such Excess Contributions previously
distributed as an Excess Elective Deferral under Section 4.1(a) with respect to
the same Plan Year.
 26




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For each Participant who is a Highly Compensated Employee, the sum of his Excess
Contributions will be determined in the following manner. First, the Administrator
will determine how much the average deferral percentage of the Highly Compensated
Employee with the highest average deferral percentage would need to be reduced to
satisfy one of the actual deferral percentage tests set forth in section 401(k)(3)
of the Code OR equal the average deferral percentage of the Highly Compensated
Employee with the next highest average deferral percentage. The amount of Excess
Contributions associated with such reduction in average deferral percentage will
equal the amount of such hypothetical reduction in the average deferral percentage,
multiplied by the Highly Compensated Employees Compensation. Second, this process
will be repeated until the requirements of section 401(k)(3) of the Code would be
satisfied had actual average deferral percentages equaled the reduced average
deferral percentage described above. The sum of the Excess Contributions resulting
from such hypothetical reductions will then be distributed, using the dollar
leveling method, commencing with the Highly Compensated Employee with the highest
dollar amount of Pre-Tax Contributions. Such reductions will be done on a uniform
basis to all Participants who are in the group of Participants who are Highly
Compensated Employees and who are contributing the highest dollar amount, and so on,
in descending order from the highest to the lowest dollar amount of Pre-Tax
Contributions, until all Excess Contributions have been distributed in accordance
with applicable regulations. The portion of the Excess Contributions applicable
to each Participant in the group of Participants who are Highly Compensated
Employees, adjusted in accordance with applicable regulations for any applicable
Trust Fund investment income or losses, will be distributed to such Participant in a
lump-sum cash amount and debited from his Pre-Tax Contribution Account as of the
date it is distributed. Any such distribution will first be made from the
Participants Pre-Tax Unmatched Contributions, and only if distribution of all of
the Participants Pre-Tax Unmatched Contributions is not sufficient to fully
distribute his Excess Contribution will distribution be made of the Participants
Pre-Tax Matched Contributions.Any portion of the Matching Contribution that is attributable to such distributed
Excess Contributions will either be forfeited or retained in the Plan and an
additional Matching Contribution will be allocated to Participants who are
Non-Highly Compensated Employees in accordance with the provisions of Treas. Reg.
§1.401(k)-1(f)(5)(iii) for Plan Years beginning before August 1, 2006 and
Treas. Reg. § 1.401(k)-2(b)(4)(ii) for Plan Years beginning on and after August 1,
2006. In the event that all or any portion of the Matching Contribution is
forfeited pursuant to the preceding sentence, such forfeiture will be used to reduce
the amount of such Matching Contribution, to fund QNECs to the Plan or to pay
approved administrative expenses under the Plan for the Plan Year in which the
forfeiture occurs.In the event that a Participant has elected to make Catch-Up Contributions through
the Interactive Electronic Communications system and would otherwise have all or a
portion of his Pre-Tax Contributions distributed from the Plan pursuant to this
Section 4.2(b), then such Pre-Tax Contributions will be recharacterized as Catch-Up
Contributions under the Plan in an amount equal to the lesserof (A) the amount of
the excess Pre-Tax Contributions that would
 27




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otherwise be distributed in order to
enable the Plan to satisfy the actual deferral percentage test, or (B) the statutory
limit on Catch-Up Contributions under section 414(v) of the Code. The remainder of
such Participants excess Pre-Tax Contributions which cannot be recharacterized and
deferred as a Catch-Up Contribution will be distributed to the Participant pursuant
to this Section 4.2(b).
 4.3
    
    Other Permissible Methods of Testing and Correction. The provisions of this Article IV
are intended to conform to sections 401(k) and 402(g) of the Code. In the event that the
Administrator determines, based on changes to the Code or related interpretations or
guidance issued by the Internal Revenue Service, that the requirements of such Code sections
may be applied in a manner different from that prescribed in this Article IV, the
Administrator may make appropriate adjustments to the administration of the Plan to
incorporate such changes to the Code or interpretations or guidance. If a change to the Code
or interpretations or guidance issued by the Internal Revenue Service results in more than
one additional option in the manner in which this Article IV may be administered, the
Administrator will have the limited discretion to select the option to be used, provided
that such option, when compared to the other option or options, results in the smallest
adjustment to Participants Individual Accounts.
 
 End of Article IV 28




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ARTICLE V
 LIMITATIONS AND RESTRICTIONS ON MATCHING CONTRIBUTIONS
 5.1
    
    Actual Contribution Percentage Test. The Plan will satisfy one of the actual
contribution percentage tests set forth in section 401(m)(2) of the Code. Such tests will
be performed using the prior year testing method as described in section 401(m)(2) of the
Code. In addition, the Plan will not be permissively aggregated with another plan for
purposes of performing such tests, unless such plan also uses the prior year testing method.
 (a)
    
    Prospective Reduction of Matching Contribution. Notwithstanding any provisions
of the Plan to the contrary, if the Administrator determines that the Matching
Contribution to be allocated under Section 3.2 for any Plan Year would cause the
Plan to fail to meet the nondiscrimination requirements of section 401(m) of the
Code, then the Employer may, in its sole discretion, reduce the amount of the
Matching Contribution for the Plan Year on behalf of those Participants who are in
the group of Highly Compensated Employees, such reduction to first apply to the
highest rate being matched, on a uniform basis to all such Participants who are
contributing the highest rate, and so on, in descending order from the highest rate
to the lowest rate. The Administrator will establish such rules and give such
directions to the Trustee as will be appropriate to carry out the provisions of this
Section 5.1(a).(b)
    
    Determination and Distribution of Excess Aggregate Contributions. If, after
making the adjustments required by Section 5.1(a), if any, Excess Aggregate
Contributions as determined pursuant to this Section 5.1(b) remain, such Excess
Aggregate Contributions will be distributed pursuant to the following provisions.
In the event that the amounts of the Matching Contributions made to the group of
Participants who are Highly Compensated Employees for any Plan Year, when expressed
as an average of the sum of the individual percentage of Compensation for such Plan
Year of each Participant who is a Highly Compensated Employee for such Plan Year
(including a zero percentage (0%) for each noncontributing Participant in such
group) result in an average contribution percentage (within the meaning of section
401(m) of the Code) for such group that is in excess of the permissible average
contribution percentage for such group under section 401(m)(2) of the Code, using
the nondiscrimination test applicable to Matching Contributions described in Treas.
Reg. § 1.401(m)-1(b) for Plan Years beginning before August 1, 2006 and in Treas.
Reg. § 1.401(m)-2(a) for Plan Years beginning on and after August 1, 2006, then the
portion of the Matching Contributions that caused such excess will be deemed to be
Excess Aggregate Contributions for such Plan Year and will be distributed to
Participants who are Highly Compensated Employees pursuant to this Section 5.1(b).Excess Aggregate Contributions to a Participant, adjusted for any applicable Trust
Fund investment income or losses attributable thereto in the manner prescribed in
this Section 5.1 for the applicable Plan Year, will be debited from the
Participants Matching Contribution Account and distributed to such
Participant to the extent possible within two and one-half (21/2) months following the
close of the Plan Year in which such Excess Aggregate Contributions
 29




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##### 



occurred but in
no event later than the close of the Plan Year following the Plan Year in which such
Excess Aggregate Contributions occurred.The Administrator will determine the net income or net loss allocable to the
Participants Matching Contribution Account for the Plan Year (including, if
applicable, the QNEC Account for the Plan Year) by multiplying such account(s) by a
fraction, the numerator of which is such Participants Excess Aggregate
Contributions for the Plan Year and the denominator of which is the balance in the
Participants Matching Contribution Account (including the QNEC Account if any of
such contributions are used for purposes of the actual contribution percentage test
in this Section 5.1 for the Plan Year) without regard to any income or loss
occurring during such Plan Year; provided, however, if there is a loss attributable
to such excess amount, the amount of the distribution adjusted for such loss will be
limited to an amount which does not exceed the lesserof (i) the balance of the
Participants Matching Contribution Account and/or QNEC Account, as applicable, or
(ii) the Matching Contributions made on behalf of the Participant for that Plan
Year.For periods prior to April 1, 2006, in adjusting a Participants Excess Aggregate
Contributions for the income or loss attributable to such Excess Aggregate
Contributions, the income or loss attributable to such Excess Aggregate
Contributions for the gap period (i.e., the period beginning with the first day of
the Plan Year next following the Plan Year for which the Excess Aggregate
Contributions were made to the Participant and ending on the date the Excess
Aggregate Contributions are distributed to the Participant). Effective on and after
April 1, 2006, the Administrator will adjust the Excess Aggregate Contributions by
the net income or loss accrued thereon during the gap period by taking ten percent
(10%) of the net income or loss determined in the preceding paragraph and
multiplying it by the number of whole calendar months between the end of the Plan
Year in which Excess Aggregate Contributions were made and the date of distribution,
counting the month of distribution if distribution occurs after the fifteenth (15th)
of the month.For each Participant who is a Highly Compensated Employee, the sum of his Excess
Aggregate Contributions will be determined as follows. First, the Administrator will
determine how much the average contribution percentage of the Highly Compensated
Employee with the highest average contribution percentage would need to be reduced
to satisfy the requirements of section 401(m) of the Code or equal the average
contribution percentage of the Highly Compensated Employee with the next highest
average contribution percentage. The amount of Excess Aggregate Contributions
associated with such reduction in the average contribution percentage will equal the
amount of such hypothetical reduction in average contribution percentage, multiplied
by the Highly Compensated Employees Compensation. Second, this process will be
repeated until the requirements of section 401(m) of the Code would be satisfied had
actual average contribution percentages equaled the reduced average contribution
percentages described above. The sum of Excess Aggregate Contributions resulting
from such hypothetical reductions will then be distributed, using the dollar
leveling method, commencing with the Highly Compensated
Employee with the highest dollar amount of Matching Contributions. Such reductions
will be done on a uniform basis to all Participants who are Highly
 30




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Compensated
Employees and who are being matched the highest dollar amount, and so on, in
descending order from the highest to the lowest dollar amount in accordance with
applicable Treasury Regulations. The portion of the Excess Aggregate Contributions
applicable to each such Participant in the group of Participants who are Highly
Compensated Employees, adjusted in accordance with applicable regulations for any
applicable Trust Fund investment income or losses, will be distributed to the
Participant in a lump sum cash payment and debited from his Matching Contribution
Account as of the date it is distributed.
 5.2
    
    Testing of Pre-Tax Contributions Under Contribution Percentage Test. Notwithstanding
the foregoing provisions of this Article V or of Article IV, all or a portion of the Pre-Tax
Contributions made on behalf of eligible Non-Highly Compensated Employees may be treated as
Matching Contributions made on behalf of such eligible Non-Highly Compensated Employees for
the purpose of meeting the actual contribution percentage test set forth in Section 5.1;
provided, that the actual deferral percentage test of Section 4.2 can be met, both when the
Pre-Tax Contributions treated as Matching Contributions hereunder are included in performing
such actual deferral percentage test and when such Pre-Tax Contributions are excluded in
performing such actual deferral percentage test. Except for purposes of meeting the actual
contribution percentage test of Section 5.1 to the extent described hereunder, any such
Pre-Tax Contributions will continue to be treated as Pre-Tax Contributions for all other
purposes of the Plan.5.3
    
    Other Permissible Methods of Testing and Corrections. The provisions of this Article V
are intended to conform to section 401(m) of the Code. In the event that the Administrator
determines, based on changes to the Code or related interpretations or guidance issued by
the Internal Revenue Service, that the requirements of such Code section may be applied in a
manner different from that prescribed in this Article V, the Administrator may make
appropriate adjustments to the administration of the Plan to incorporate such changes to the
Code or interpretations or guidance. If a change to the Code or interpretations or guidance
issued by the Internal Revenue Service results in more than one additional option in the
manner in which this Article V may be administered, the Administrator will have the limited
discretion to select the option to be used; provided, that such option, when compared to the
other option or options, results in the smallest adjustment to Participants Individual
Accounts.
 
 End of Article V 31




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##### 



ARTICLE VI
 ALLOCATION OF CONTRIBUTIONS
 6.1
    
    Establishment of Individual Accounts. The Recordkeeper will establish and maintain a
separate account as a record of each Participants interest in the Trust Fund with respect
to each Individual Account in which a Participant has an interest, including, as
appropriate, sub-accounts for the Participants Pre-Tax Contributions, his Matching
Contributions, and his Rollover Contributions. One or more sub-accounts will be maintained
within each Individual Account to reflect the Participants investment elections among the
Investment Funds.6.2
    
    Allocation of Pre-Tax Contributions. As of each Allocation Date, but after adjustment
of the Individual Accounts as provided in Section 8.2, the Employer contributions deposited
with the Trustee during the period since the last Allocation Date that were made pursuant to
a salary reduction agreement entered into with a Participant pursuant to Section 3.1 will be
allocated by the Recordkeeper to the Participants Pre-Tax Contribution Accounts; provided
however, that the amount allocated hereunder will be subject to the limitations of Sections
4.1 and 4.2.6.3
    
    Allocation of Matching Contributions. As of each Allocation Date, but after adjustment
of the Individual Accounts as provided in Section 8.2, and after applying the limitations of
Section 5.1, the Administrator will, to the extent permitted by the actual contribution
percentage test of Section 5.1, direct the Recordkeeper to allocate the Matching
Contribution made pursuant to Section 3.2 for the period ending on such Allocation Date and
any forfeitures that were applied to reduce Matching Contributions, as provided in Section
9.1(b) for said period, and will credit the same to the Matching Contribution Accounts of
all Participants for whom the Matching Contributions were made.6.4
    
    Allocation of QNECs. As of the last day of each Plan Year, but after adjustment of the
Individual Accounts as provided in Section 8.2, if an Employer made QNECs for a Plan Year
under Section 3.3 on behalf of Participants who are Non-Highly Compensated Employees in
order to insure that the actual deferral percentage tests described in Section 4.2 or the
actual contribution percentage test described in Section 5.1 are met for such Plan Year,
such QNECs will be allocated to the QNEC Accounts of the Non-Highly Compensated Employees
determined by the Committee in the manner determined by the Committee.6.5
    
    Credit of Rollover Contributions. A Rollover Contribution made by an Employee during
the period since the last Allocation Date will be credited to his Rollover Account.6.6
    
    Included, Individual Accounts. For the purposes of this Article VI, references to the Individual Accounts of
Participants will include the Individual Accounts of those Participants who die, become
Disabled, retire, or terminate their services during the Plan Year in question.
 
 End of Article VI 32




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##### 



ARTICLE VII
 LIMITATION ON ALLOCATIONS
 7.1
    
    Definitions. For purposes of this Article VII, the following terms and phrases will
have these respective meanings.
 (a)
    
    415 Compensation will mean the total of all amounts paid by the Employer to or
for the benefit of a Participant for services rendered or labor performed for the
Employer while a Participant, which are required to be reported on the Participants
federal income tax withholding statement or statements (Form W-2 or its subsequent
equivalent). Further, 415 Compensation will include:
 (i)
    
    elective deferrals (as defined in section 402(g)(3) of the
Code) from compensation to be paid by the Employer to the Participant; and(ii)
    
    any amount which is contributed or deferred by the Employer at
the election of the Participant and which is not includable in the gross income
of the Participant by reason of sections 125, 132(f)(4) or 457 of the Code.
 (b)
    
    Annual Additions of a Participant for any Limitation Year will mean the total
of (i) the Matching Contributions, Pre-Tax Contributions (excluding Catch-Up
Contributions), QNECs, and forfeitures, if any, allocated to such Participants
Accounts for such Limitation Year, (ii) the Participants contributions, if any,
(excluding any Rollover Contributions) for such Limitation Year, and (iii) amounts
referred to in sections 415(l)(1) and 419A(d)(2) of the Code (regarding certain
medical benefits).(c)
    
    Limitation Year will mean the Plan Year.(d)
    
    Maximum Annual Additions of a Participant for any Limitation Year will mean
the lesserof (i) forty thousand dollars ($40,000), as adjusted for cost of living
changes, or (ii) one hundred percent (100%) of such Participants 415 Compensation
during such Limitation Year, except that the limitation in this Section 7.1(d) will
not apply to any contribution for medical benefits (within the meaning of section
419A(f)(2) of the Code) after a severance from service with the Employer or an
Affiliated Company which is otherwise treated as an Annual Addition or to any amount
otherwise treated as an Annual Addition under section 415(l)(1) of the Code.
 7.2
    
    Disposition of Excess Annual Additions. In no event will the Annual Additions credited
to a Participants Individual Accounts for any Limitation Year exceed the Maximum Annual
Additions for such Participant for such
Limitation Year. If as a result of allocation of forfeitures, a reasonable error in
estimating a Participants Compensation, a reasonable error in determining the amount of
elective deferrals (within the meaning of section 402(g)(3) of the Code) that may be made
with respect to any individual under the limits of section 415 of the Code, or because of
other limited facts and circumstances, the Annual Additions that would be credited to a
Participants Individual Accounts for a Limitation Year would nonetheless exceed the Maximum
Annual Additions for such Participant for such Limitation Year, such excess Annual Additions
will be disposed of as follows:
 33




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##### 



(a)
    
    First, by returning to such Participant his Pre-Tax Unmatched Contributions,
adjusted for income or loss allocated thereto as set forth in Section 4.1(b);(b)
    
    Next, by returning to such Participant his Pre-Tax Matched Contributions,
adjusted for income or loss allocated thereto as set forth in Section 4.1(b), and the
Matching Contributions that would have been allocated to such Participants Individual
Account based upon such returned Pre-Tax Matched Contributions will, to the extent such
amounts would have otherwise been allocated to such Participants Individual Account,
be treated as a forfeiture;(c)
    
    If any such excess Annual Additions remain, and the Participant is covered by
the Plan, the excess will be used to reduce the Matching Contributions (including any
allocation of forfeitures) for such Participant in the next Limitation Year and each
succeeding Limitation Year if necessary; and(d)
    
    If any such excess Annual Additions remain and the Participant is not covered
by the Plan, the excess will be held unallocated in a suspense account. The suspense
account will be used to reduce future Matching Contributions (including the allocation
of any forfeitures) for all Participants in the next Limitation Year and succeeding
Limitation Years if necessary; provided, however, that in the event of termination of
the Plan, the suspense account will revert to the Employer to the extent it may not
then be allocated to any Participants Individual Account.
 7.3
    
    Aggregation of Plans. For purposes of determining whether the Annual Additions under
this Plan exceed the limitations set forth in this Article VII, all defined contribution
plans of the Employer are to be treated as one defined contribution plan. In addition, all
defined contribution plans of the Employer and all Affiliated Companies will be aggregated
for this purpose. If the Annual Additions credited to a Participants Individual Accounts
for any Limitation Year under this Plan plus the additions credited on his behalf under
other defined contribution plans required to be aggregated pursuant to this Section 7.3
would exceed the Maximum Annual Additions for such Participant for such Limitation Year, the
Annual Additions under this Plan and the additions under such other plans will be reduced to
the extent necessary to comply with this Section 7.3 and the excess, if any, will be
allocated, reallocated, or returned in accordance with the provisions set forth in Section
7.2 regarding excess Annual Additions.7.4
    
    Prospective Reduction of Deferrals. If the limitations set forth in this Article VII
would not otherwise be met for any Limitation Year, the Pre-Tax Contribution elections of
affected Participants may be
reduced by the Administrator on a temporary and prospective basis in such manner as the
Administrator will determine.
 
 End of Article VII 34




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ARTICLE VIII
 ADJUSTMENT OF INDIVIDUAL ACCOUNTS
 8.1
    
    Trust Fund Valuation. The value of each Investment Fund and of the Trust Fund will be
determined by the Trustee as of the close of business on each Valuation Date, or as soon
thereafter as practicable, and will be the fair market value of all securities or other
property held in the Investment Funds, if any, plus cash and the fair market value of other
assets held by the Trust Fund, with equitable adjustments for pending trades.While it is contemplated that the Trust Fund will be valued by the Trustee and allocations
made only on the Valuation Date, at any time that the Plans valuations are not performed on
a daily basis, should it be necessary to make distributions under the provisions hereof and
the Administrator, in good faith, determines that because of (a) an extraordinary change in
general economic conditions, (b) the occurrence of some casualty materially affecting the
value of the Trust Fund or a substantial part thereof, or (c) a significant fluctuation in
the value of the Trust Fund has occurred since the immediately preceding Valuation Date, the
Administrator may, in its sole discretion, to prevent the Participant or Former Participant
from receiving a substantially greater or lesser amount than what he would be entitled to,
based on current values, cause a revaluation of the Trust Fund to be made and a reallocation
of the interests therein as of the date the Participants or Former Participants right of
distribution becomes fixed. The Administrators determination to make such special valuation
and the valuation of the Trust Fund as determined by the Trustee will be conclusive and
binding on all persons ever interested hereunder.If the Administrator in good faith determines that certain expenses of administration paid
by the Trustee during the Plan Year under consideration are not general, ordinary and usual
and should not equitably be borne by all Participants, Former Participants and
Beneficiaries, but should be borne only by one or more Participants, Former Participants or
Beneficiaries, for whom or because of whom such specific expenses were incurred, the net
earnings and adjustments in value of the Individual Accounts will be increased by the
amounts of such expenses, and the Administrator will make suitable adjustments by debiting
the particular Individual Account or Individual Accounts of such one or more Participants,
Former Participants or Beneficiaries; provided, however, that any such adjustment must be
nondiscriminatory and consistent with the provisions of section 401(a) of the Code.8.2
    
    Adjustments to Participants and Former Participants Individual Accounts. The value of
a Participants or Former Participants Individual Account (including for this purpose the
separate value of the sub-accounts of a Participants or Former Participants Individual
Account, i.e., to the extent applicable, his Employee After-Tax Account, his Pre-Tax
Contribution Account(s), his Catch-Up Contribution Account(s), his Matching Contribution
Account, his QNEC Account, his Safe Harbor Match Account, his Profit Sharing Account, and
his Rollover Account, if any), held in an Investment Fund maintained hereunder will be
determined as of each Valuation Date by:
 (a)
    
    First, allocating the Net Income or Losses, as defined in this Section 8.2, of
each Investment Fund since the preceding Valuation Date to the Participants or
Former Participants Individual Account in the same ratio as the value of the
Participants or Former Participants Individual Account in such Investment Fund (as
adjusted below), as the case may be, bears to the aggregate value of all
 35




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Individual
Accounts in such Investment Fund (as adjusted below), as the case may be. An
Individual Account will be adjusted on the Valuation Date for purposes of allocating
Net Income or Losses from fund investments by taking the value of such Individual
Account as of the prior Valuation Date and (i) adding thereto (A) all contributions
or loan repayments designated for investment in such Investment Fund which were made
with respect to the immediately prior valuation period but were received by the
Trustee after the prior Valuation Date, plus (B) any transfers from any other
Investment Fund under the Plan to the Participants or Former Participants
Individual Account that were made after the prior Valuation Date and were effective
as of such prior Valuation Date and (ii) deducting therefrom (A) any transfers to
any other Investment Fund or Investment Funds under the Plan from the Participants
or Former Participants Individual Account within this Investment Fund that were
made after the prior Valuation Date and were effective as of such prior Valuation
Date and (B) any Participant or Former Participant loans, withdrawals, or
distributions, as applicable, from the Individual Account made after, but effective
as of, the preceding Valuation Date.(b)
    
    Second, crediting the contributions and loan repayments made by or on behalf of
the Participant or Former Participant with respect to the valuation period ending on
the current Valuation Date and any transfers from the other Investment Funds under the
Plan to the Participants or Former Participants Individual Account within this
Investment Fund made since the preceding Valuation Date.(c)
    
    Last, deducting any transfers to the other Investment Funds under the Plan from
the Participants or Former Participants Individual Account maintained within this
Investment Fund and any loans, withdrawals and distributions from his Individual
Account maintained within this Investment Fund made since the preceding Valuation Date.
 For the purpose of this Section, Net Income or Losses will mean the increase or decrease
in the fair market value of the assets of the Trust or the Investment Fund, as the case may
be, (and if invested in a group insurance investment contract, such value being determined
in accordance with the terms of the contract) as of the current Valuation Date, compared to
such value which was utilized for the prior Valuation Date, less the sum of any deposits
plus the sum of any loans, withdrawals, distributions or other deductions, if any, made to
pay any expenses incurred with respect to the operations of this Investment Fund. The
initial Valuation Date for an Investment Fund will be the date the funds are first invested
in such Investment Fund.8.3
    
    Statement to Participant. At least quarterly, the Administrator will advise each
Participant, Former Participant and Beneficiary for whom an Individual Account is held
hereunder of the then fair market value of such Individual Account.
 
 End of Article VIII 36




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ARTICLE IX
 DISTRIBUTIONS AND WITHDRAWALS
 9.1
    
    Vested Interest. Effective as of April 1, 2006, each Participant and Former Participant
will at all times have a fully vested interest in his entire Individual Account. Upon any
Participants or Former Participants attainment of his Normal Retirement Date he will
continue to have a fully vested interest in such Individual Account. On and after the
Effective Date and prior to April 1, 2006, the only portion of any Individual Account
subject to a vesting schedule were those attributable to Employer discretionary profit
sharing contributions and employer matching contributions under the Kartens Plan. The
vested interest of Participants and Former Participants who terminated employment with the
Company and all Affiliated Companies on or after the Effective Date and prior to April 1,
2006 will be determined in accordance with the applicable provisions of the Plan in effect
at that time, as reflected in the March 1, 2002 Plan document and the amendments thereto.
 (a)
    
    Forfeiture and Return to Service Prior to Complete Distribution. If a
Participant terminated employment prior to April 1, 2006 without a fully vested
interest in his Individual Account and received a distribution of his entire vested
Individual Account balance such that the nonvested portion of his Individual Account
balance was forfeited and such Participant is reemployed by an Affiliated Company
without incurring five (5) consecutive Breaks in Service, he will have the right to
restore in full the portion of his Individual Account which was forfeited upon
repayment to the Plan of the full amount of the distribution from such Individual
Account. Such repayment must be made not later than the earlierof (i) the fifth
(5th) anniversary of his return to employment or (ii) the last day of the Plan Year
in which the Participant incurs five (5) consecutive Breaks in Service after the
date of his distribution. The Participants repayment, if any, will be returned to
the account or accounts from which the distribution was made and the reinstated
forfeiture will also be allocated to such account or accounts. If the Participant
resumes active employment with an Affiliated Company and does not repay a prior
distribution prior to the time specified above, the portion of his Individual
Account which was forfeited will not be restored. If the Participant makes repayment
in accordance with this Section 9.1(a) and currently unallocated forfeitures are not
adequate to effect the restoration of forfeited amounts to his Individual Account,
the Company or the Affiliated Company will make such additional contribution to the
Plan as is necessary to restore the forfeited portion of his Individual Account.(b)
    
    Application of Forfeitures. Any forfeitures in the Plan will first be used to
restore the account of a Former Participant who is entitled to restoration pursuant
to Section 9.1(a). If additional forfeitures remain after full restorations under
Section 9.1(a), then remaining forfeitures will be used to restore accounts of
Former Participants who are located under Section 9.19. If additional forfeitures
remain thereafter, the forfeitures for a Plan Year will be used to pay
administrative expenses of the Plan and then to reduce the Matching Contributions or
QNECs of any Employer.
 9.2
    
    Entitlement to Distribution. A Participant or Former Participant will be entitled to a
distribution of his vested Individual Account upon his death, his termination of employment
due to Disability, retirement on or after Normal Retirement Date or on
 37




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##### 



account of a
severance from employment, as applicable, as defined in section 401(k)(2) of the Code. No
distribution of a Participants Individual Account will be made after the Benefit
Commencement Date unless the Participant and his Spouse, if any, consent to such
distribution pursuant to Section 9.3.A Participants Individual Account will be distributed on account of the Participants
severance from employment as provided in this Section 9.2, unless the severance from
employment occurs as part of a business transaction involving the Employer or assets of the
Employer with respect to which the Participant is employed and the parties to the business
transaction agree that the accounts of all Participants similarly situated will be
transferred to a plan maintained by the acquiring entity or one of its affiliates. In such
case, no distribution may be made to the Participant until he becomes entitled to such a
distribution under the terms of the plan to which such account is transferred. Any
distribution under this Section 9.2 will be subject to the other provisions of the Plan
regarding distributions, other than provisions that require a separation from service before
such amounts may be distributed.For purposes of this Article IX, a Participant will not be deemed to have terminated
employment or incurred a severance from employment in the event of a change in his
employment status from a common law employee to a Leased Employee. However, as provided in
Section 1.21 such Participant will no longer be an Eligible Employee for purposes of making
Pre-Tax Contributions or receiving an Employer Matching Contribution.9.3
    
    Timing of Distribution. A Participant who becomes entitled to a distribution of his
vested Individual Account pursuant to Section 9.2 may elect to receive such distribution as
soon as administratively practicable following such entitlement by filing an application
with the Administrator. Alternatively, he may elect to defer distribution of such vested
Individual Account until a later date; provided, however, that regardless of such an
election, distribution of the Participants vested Individual Account will be made not later
than the Participants Required Beginning Date. A Participant who defers the distribution of
his vested Individual Account in accordance with this Section 9.3 will continue to have the
right to direct the investment of his individual Account among the Investment Funds as
provided in Section 16.1.The value of a Participants vested Individual Account under this Section 9.3 will, except
as provided in Section 9.6 (regarding minimum distributions) or Section 9.10 (regarding
automatic cashouts), be valued as of the most recent Valuation Date for which Participant
Individual Account values have been determined prior to the date the Participants payment
is processed.The payment of a Participants vested Individual Account under this Article IX is
conditioned upon the Administrators ability to locate such Participant. In the event that
the Administrator is unable to locate such Participant within a reasonable period of time
after the date payments would otherwise commence, the provisions of Section 9.19 regarding
the conditional forfeiture of unclaimed benefits will apply.9.4
    
    Qualified Election. Unless the Participants vested Individual Account is payable in
the applicable normal form specified in Section 9.7 or the automatic cashout provisions of
Section 9.10 apply, a Participants election pursuant to Section 9.3 to have his vested
Individual Account distributed before his Required Beginning Date will be made in the
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form
of a Qualified Election, and such Qualified Election will acknowledge that benefits will be
made in accordance with such election.9.5
    
    Limitations on Timing of Distributions. Irrespective of a Participants distribution
election or lack thereof, distribution of the Participants vested Individual Account will
be made no later than sixty (60) days after the end of the Plan Year following the laterof:
 (a)
    
    The earlierof the date the Participant attains age sixty-five (65) or his
Normal Retirement Date;(b)
    
    The date of termination of the Participants service with the Employer or an
Affiliated Company; or(c)
    
    The tenth (10th) anniversary of the year in which the Participant commenced
participation in the Plan;
 provided, however, that distribution of the Participants vested Individual Account will be
made by the Required Beginning Date.9.6
    
    Minimum Distribution Requirements. To the extent required to comply with the minimum
distribution requirements of section 401(a)(9) of the Code, including the minimum
distribution and incidental benefit requirements of section 401(a)(9) of the Code and the
regulations issued thereunder which are expressly incorporated herein by this reference,
distribution of a Participants vested Individual Account will be made or commence to be
made by his Required Beginning Date as provided in this Section 9.6. The provisions of this
Section 9.6 will override any other inconsistent distribution provisions of the Plan.The Plan will apply the minimum distribution requirements in accordance with the final and
temporary regulations under section 401(a)(9) of the Code that were published on April 17,
2002 (the Final Minimum Distribution Regulations) and all distributions required under
this Section 9.6 will be determined and made in accordance with such Final Minimum
Distribution Regulations.
 (a)
    
    Current Minimum Distribution Payments. If minimum distribution payments have
commenced with respect to a Participant, such payments will continue to be made
regardless of whether the Participant has attained the Required Beginning Date,
provided, however, that (i) such payments may be modified to the extent necessary to
comply with the Final
Minimum Distribution Regulations or (ii) the Participant may elect to stop receiving
such payments if such minimum distribution payments had commenced prior to January
1, 1997 and the Participant is not a five percent owner as defined under section
416 of the Code.(b)
    
    Death of Participant Before Distributions Begin. If the Participant dies before
distribution of his vested Individual Account has been made, the Participants
entire interest will be distributed in full by December 31 of the calendar year
immediately following the calendar year in which the Participant died. Such
distribution will automatically satisfy the one (1) year rule of section
401(a)(9)(B)(iii) of the Code and Treasury Regulation sections 1.401(a)(9)-3, Q&A-1
and Q&A-4.
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(c)
    
    Amount of Minimum Distribution For Each Distribution Calendar Year. In the
event a Participant who is a five percent (5%) owner is required to begin receiving
minimum distribution payments while in service under the provisions of this Section
9.6, the Participant will receive one lump sum payment on or before the
Participants Required Beginning Date equal to his entire vested Individual Account
balance and annual lump sum payments thereafter of any additional Pre-Tax
Contributions, Catch-Up Contributions or Matching Contributions made with respect to
such Participant during each subsequent calendar year. Such distributions will be
made up to and including the calendar year that includes the Participants date of
death. Distributions made pursuant to this Section 9.6(c) will automatically satisfy
the requirements of section 1.401(a)(9)-2, Q&A-2 and the minimum distribution
incidental death benefit requirement as provided in Treasury Regulation section
1.401(a)(9)-5, Q&A-1(d).(d)
    
    Death On or After Date Minimum Distributions Begin. If a Participant who is
receiving minimum required distributions pursuant to Section 9.6(a) (regarding
minimum distribution payments being made prior to the Effective Date) or Section
9.6(c) (regarding five percent (5%) owners) dies, then the remainder of his vested
Individual Account will be paid in the form of a lump sum payment to his Surviving
Spouse or Beneficiary in accordance with Section 10.1 as soon as administratively
practicable following the Participants date of death, but no laterthan December 31
of the year in which the Participant died. If the Participants Spouse is his
Beneficiary such Spouse may be eligible to elect to receive such distribution in the
form of a Direct Rollover. Such distribution will automatically satisfy the
requirement of section 401(a)(9)(B)(i) of the Code and Treasury Regulation section
1.401(a)(9)-2, Q&A-5 that distributions following the Participants death be paid to
his Beneficiary at least as rapidly as such distributions were being paid to the
Participant prior to his death.
 Notwithstanding any other provision of this Article IX, all distributions from this Plan
shall be made in accordance with (i) sections 1.401(a)(9)-2 through 1.401(a)(9)-9 of the
Final Minimum Distribution Regulations, and (ii) the incidental death benefit requirement of
section 401(a)(9)(G) of the Code. Further, such Final Minimum Distribution Regulations
shall override any Plan provision that is inconsistent with section 401(a)(9) of the Code.9.7
    
    Normal Form of Benefits. The vested Individual Account of a Participant will be paid in a single lump sum cash
payment; provided, however, that such Participant may elect to receive all or a portion of
such Individual Account in the form of a Direct Rollover pursuant to Section 9.9. In
addition, to the extent a Participants vested Individual Account is invested in the Common
Stock Fund, distribution of that portion of his Individual Account may be made in shares of
Common Stock as provided in Section 9.8.9.8
    
    Distributions from Common Stock Fund. Any distributions from the Common Stock Fund will
be paid at the election of the Participant, either in cash or in shares of Common Stock,
except that fractional shares will in all events be payable in cash. Any cash dividends
declared with respect to such Participants shares prior to the date of distribution will
similarly be paid in cash. Stock dividends declared prior to the distribution to the
Participant will be treated as part of his Individual Account, subject to his election to
receive either cash or Common Stock. In the event that the Participant elects a distribution
of his balance in the Common Stock Fund in cash, the value of his Individual Account in the
Common Stock Fund will be based on the current market value of a share of Common Stock on
the date as of which the amount payable is calculated. The
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Administrators determination
with respect to such valuation will be conclusive and binding on the Participant and on the
Trustee.9.9
    
    Optional Forms of Benefits. In accordance with procedures adopted by the Administrator,
a Participant may waive payment of his vested Individual Account in the form of a lump sum
and, pursuant to a Qualified Election, elect an optional form of benefit, as follows:
 (a)
    
    Direct Rollover. To receive his vested Individual Account in the form of a
Direct Rollover to an Eligible Retirement Plan, provided that the distribution
qualifies as an Eligible Rollover Distribution. Any portion of the Participants
distribution which does not qualify as an Eligible Rollover Distribution will be
payable to the Participant in accordance with this Section 9.9 or Section 9.7
(regarding normal forms of benefit) or Section 9.10 (regarding automatic cashouts),
as applicable.
 (i)
    
    Form of Election. A Participants Direct Rollover election under this
Section 9.9 will be in form, manner and time satisfactory to the
Administrator and in accordance with rules and procedures established by the
Administrator. Such election will specify the dollar or percentage amount
of the Participants vested Individual Account to be rolled over, the name
of the Eligible Retirement Plan selected by the Participant, and such
additional information as the Administrator deems necessary or appropriate
in order to implement the election. It will be the Participants
responsibility to confirm that the Eligible Retirement Plan designated in
his Direct Rollover election will accept the Direct Rollover of his vested
Individual Account. The Administrator will be entitled to implement a
Direct Rollover election based on its reasonable reliance on information
provided by the Participant, and will not be required to independently
verify such information, unless it is clearly unreasonable not to do so.(ii)
    
    Notice of Direct Rollover Rights. The Participant will be given
written notice of any right he may have to elect a Direct Rollover of the
taxable portion of his vested Individual Account to an Eligible Retirement
Plan at least (A) thirty (30) and no more than ninety (90) days prior to the
Benefit Commencement Date; or (B) on or after the Benefit Commencement Date;
provided the Participant is given at least thirty (30) days to consider such
notice and make the election described in this Section 9.9(a). The
Participant may elect to receive a Direct Rollover before expiration of the
thirty (30) day election period described above if: (1) the Administrator
clearly informs the Participant that he has a right to a period of at least
thirty (30) days after receiving the written explanation to consider the
decision of whether or not to elect a Direct Rollover; (2) the Participant,
after receiving the notice, affirmatively elects a Direct Rollover; and (3)
the Direct Rollover is made more than seven (7) days after the notice is
given.(iii)
    
    Spousal Rights. To the extent required by section 401(a)(31) of the
Code, if all or a portion of a Participants vested Individual Account is
payable to the Participants surviving Spouse, or to a former Spouse in
accordance with a QDRO, such surviving Spouse or former Spouse will be
entitled to elect a Direct Rollover of all or a portion of such distribution
to an Eligible Retirement Plan.
 41




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(b)
    
    Combination. By a combination of a single lump sum cash payment and Direct
Rollover to an Eligible Retirement Plan.
 9.10
    
    Automatic Cashouts. If the value of the Participants vested Individual Account does
not exceed one thousand dollars ($1,000), determined as of the Participants Benefit
Commencement Date, the Administrator will direct that such Individual Account be paid in a
single lump sum cash payment as soon as practicable following such Benefit Commencement
Date, without regard to whether the Participant and/or Spouse consent either to payment in
such form or to payment prior to the Participants attainment of the Required Beginning
Date. Alternatively, in lieu of such lump sum cash payment, the Participant may elect to
receive distribution of his vested Individual Account in the form of a Direct Rollover
pursuant to Section 9.9(a). No distribution will be made in accordance with this Section
9.10 after the Participants Benefit Commencement Date unless the Participant and his Spouse
(or if the Participant has died, his surviving Spouse) consent in writing to such
distribution. Likewise, no distribution will be made pursuant to this Section 9.10 if the
Participants vested Individual Account exceeds one thousand dollars ($1,000) on the Benefit
Commencement Date.9.11
    
    Facility of Payment. If any payee under the Plan is a minor, or if the Administrator
reasonably believes that any payee is legally incapable of giving a valid receipt and
discharge for any payment
due him, the Administrator may have such payment, or any part of such payment, made to the
person (or persons or institution) whom it reasonably believes is caring for or supporting
such payee, unless it has received due notice of claim therefor from a duly appointed
guardian of such payee. Any such payment will be a payment for the account of such payee
and will, to the extent of such payment, be a complete discharge of any liability under the
Plan to such payee.9.12
    
    Hardship Withdrawals.
 (a)
    
    Conditions for Hardship Withdrawal. A Participant who has not separated from
service with the Employer or an Affiliated Company may make a Qualified Election to
receive a hardship withdrawal from his vested Individual Account effective as of
April 1, 2006. The withdrawal made pursuant to such Qualified Election will be made
from the sub-accounts maintained under his Individual Account in the following
order: (i) Rollover Account, (ii) Employee After-Tax Account, (iii) Employee
Pre-Tax Unmatched Contribution Account; (iv) Employee Pre-Tax Matched Contribution
Account and (v) Catch-Up Contribution Account, subject to the following
restrictions:
 (A)
    
    All withdrawals are subject to the Participant having filed an
application with the Administrator prior to the date on which the withdrawal is
to be made.(B)
    
    All withdrawals will be in the form of a lump-sum cash payment
and will be debited from the Participants Rollover Account, Employee After-Tax
Account, Employee Pre-Tax Unmatched Contribution Account, Employee Pre-Tax
Matched Contribution Account or Catch-Up Contribution Account, as applicable,
as of the date the payment is made.(C)
    
    A Participant may make a withdrawal only in the event that he
furnishes satisfactory evidence to the Administrator that the withdrawal is to
 42




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alleviate his Financial Hardship (as defined in Section 9.12(b) and is for one
of the following reasons:
 (1)
    
    Expenses for (or necessary to obtain) medical
care that would be deductible by Participant under section 213(d) of
the Code (determined without regard to whether the expenses exceed
seven and one-half percent (7.5%) of Participants adjusted gross
income) for the Participant, the Participants Spouse or the
Participants dependents (as defined in section 152 of the Code without
regard to the change in definition of dependent under the Working
Families Tax Relief Act of 2004 (i.e., determined without regard to
sections 152(b)(1), 152(b)(2) and 152(d)(1)(B) of the Code) and
including a non-custodial child of divorced or legally separated
parents as described in section 152(e) of the Code; provided, however,
that any hardship withdrawal for such child will exclude amounts for
the payment of nonprescription drugs or medicine (other than insulin))
;(2)
    
    Costs directly related to the purchase of a
principal residence for the Participant (excluding mortgage payments);(3)
    
    Payment of tuition, related educational fees,
and room and board expenses, for the next twelve (12) months of
post-secondary education for the Participant, his Spouse, children, or
his dependents (as defined in section 152 of the Code (determined
without regard to section 152(b)(1), (b)(2), and (d)(1)(B) of the
Code));(4)
    
    Payments necessary to prevent the eviction of
the Participant from his principal residence or foreclosure on the
mortgage of the Participants principal residence;(5)
    
    Effective April 1, 2006, payments necessary to
reimburse the Participant for unreimbursed expenses related to a
federally declared natural disaster;(6)
    
    Effective April 1, 2006, payments necessary to
reimburse the Participant for funeral expenses for the Participants
deceased parent, Spouse, children or dependents (as defined in section
152 of the Code) (determined without regard to section 152(d)(1)(B) of
the Code); or(7)
    
    Such other immediate and heavy financial needs
as the Administrator, or its delegate, approves from time to time based
on rulings, regulations or other guidance issued by the Internal
Revenue Service.
 (b)
    
    Financial Hardship. As used herein, Financial Hardship will mean an immediate
and heavy financial need that, based on the facts and circumstances, cannot be met
from other resources that are reasonably available to the Participant. For this
purpose, the Participants resources are deemed to include those assets of the
Participants Spouse and minor children that are reasonably
 43




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available to the
Participant. A distribution will be deemed to satisfy an immediate and heavy
financial need of the Participant if the Participant represents in writing to the
Administrator that the distribution is necessary to satisfy an immediate and heavy
financial need and 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; provided, however, that
the amount of such distribution may include the amount of any federal, state or
local taxes or penalties reasonably anticipated to result from the withdrawal;(ii)
    
    The Participant has obtained all distributions, other than
hardship distributions, and all nontaxable loans currently available to
Participant from commercial sources and under the Plan and all of the plans
maintained by the Employer or any other employer;(iii)
    
    Such need cannot reasonably be relieved through reimbursement
or compensation by insurance or otherwise, by liquidation of the Participants
assets, or by cessation of Pre-Tax Contributions to the Plan.(iv)
    
    The Participant is precluded from making Pre-Tax Contributions
to the Plan (and to any other qualified or non-qualified retirement plan of the
Employer or an Affiliated Company) following the hardship withdrawal for a
period of six (6) months for hardship withdrawals made before April 1, 2006,
and one hundred and eighty three (183) days effective for hardship withdrawals
made on and after April 1, 2006.
 (c)
    
    Limitation on Amount Withdrawn. There is no minimum amount that must be
withdrawn. However, the maximum amount that may be withdrawn is the maximum
available for withdrawals under this Section 9.12(c). The amount of a hardship
withdrawal from the Participants Pre-Tax Contribution Accounts will not include any
earnings credited to such accounts after December 31, 1988. The amount of a
hardship withdrawal from any of the Participants Rollover Account, Employee
After-Tax Account, and Catch-Up Contribution Account will not exceed the net credit
balance in such account as of the date of the withdrawal. In the event that a
Participant has an outstanding loan from his Pre-Tax Contribution Accounts or
Catch-Up Contribution Account at the time of his withdrawal, such loan will not be
reflected in the Participants Individual Account balance and the amount of the
withdrawal may not exceed the amount that the Participant would otherwise be
entitled to withdraw from such Account.(d)
    
    Rules and Procedures. The Administrator will establish such rules and give such
directions to the Trustee as will be appropriate to effectuate the withdrawal in
accordance with the terms this Plan.
 9.13
    
    Withdrawal of After-Tax Savings Contributions. A Participant may make a Qualified
Election to receive all or any portion of his Employee After-Tax Account at any time while
he is in the service of the Employer or an Affiliated Company.9.14
    
    Withdrawal at Age 591/2. Effective April 1, 2006, any Participant who attains the age of
fifty-nine and one-half (591/2) may, in accordance with such policies and procedures as the
Administrator may establish, make a Qualified Election to receive a withdrawal of all
 44




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or a
portion of the value of his vested Individual Account balance in the Plan. Such withdrawal
will be made from the sub-accounts comprising the Participants Individual Account in the
following order: (i) Employee After-Tax Account; (ii) Rollover Account; (iii) Profit Sharing
Account; (iv) Safe Harbor Match Account; (v) Matching Contribution Account; (vi) Employee
Pre-Tax Unmatched Contribution Account; (vii) Employee Pre-Tax Matched Contribution Account;
(viii) Catch-Up Contribution Account; and (ix) QNEC Account.9.15
    
    Withdrawal of Rollover Account. A Participant may make a Qualified Election to receive all or any portion of his Rollover
Account at any time while he is in the service of the Employer or an Affiliated Company.9.16
    
    Qualified Hurricane Katrina Distributions. A Participant whose principal place of
abode on August 25, 2005 was located in the Hurricane Katrina disaster area and who
sustained an economic loss by reason of Hurricane Katrina may elect during the period
beginning on August 1, 2005 and ending December 31, 2006 to receive from the Plan a
qualified Hurricane Katrina distribution of up to one hundred thousand dollars ($100,000)
in the aggregate. Such distribution will be made in the form of a lump sum from the
sub-accounts maintained under the Participants vested Individual Account in the order
prescribed by the Administrator. The ten percent (10%) early withdrawal penalty for
distributions from qualified plans prior to age fifty nine and one-half (591/2) will not apply
to any qualified Hurricane Katrina distribution and the mandatory twenty percent (20%)
income tax withholding applicable to Eligible Rollover Distributions will not apply. The
Administrator is not required to allow the Participant to elect a Direct Rollover with
respect to a qualified Hurricane Katrina distribution or to provide a section 402(f) notice
with respect to any such distribution. However, a qualified Hurricane Katrina distribution
is subject to the voluntary withholding requirements of section 3405 of the Code and Treas.
Reg. § 35.3405-1T. Further, a special rule allows income inclusion with respect to a
qualified Hurricane Katrina distribution to be spread over a three (3) year period. Any
such Participant who receives a qualified Hurricane Katrina distribution may elect to
recontribute all or part of such distribution to the Plan in one or more contributions over
the three (3) year period following the date on which such distribution is made as provided
in Internal Revenue Service Notice 2005-92.In addition, a Participant or Beneficiary whose principal place of abode on August 25, 2005
was located in the Hurricane Katrina disaster area and who sustained an economic loss by
reason of Hurricane Katrina may elect to designate as a qualified Hurricane Katrina
distribution any distribution from the Plan that was made to such Participant or
Beneficiary during the period beginning on August 1, 2005 and ending on December 31, 2006
which does not exceed one hundred thousand dollars ($100,000) in the aggregate. Such
designation may be made with respect to any distribution that satisfies the requirements for
a qualified Hurricane Katrina distribution regardless if such distribution was made on
account of Hurricane Katrina (e.g.an in-service withdrawal). However, the following
distributions may not be designated as qualified Hurricane Katrina distributions: (a)
corrective distributions of excess Annual Additions under section 415 of the Code as
described in Section 7.2, (b) distributions of Excess Elective Deferrals under section
402(g) of the Code as described in Section 4.1, (c) distributions of Excess Contributions
under section 401(k) of the Code as described in Section 4.2, (d) distributions of Excess
Aggregate Contributions under section 401(m) of the Code as described in Section 5.1 and (e)
deemed distributions of outstanding Plan loans pursuant to Section 9.17. In addition, a
Participant will not be permitted to repay any designated qualified Hurricane
 45




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Katrina
distribution which is a required minimum distribution or part of a series of systematic
withdrawal payments being paid over a period of more than ten (10) years. Likewise, any
qualified Hurricane Katrina distribution made to a Beneficiary may not be recontributed to
the Plan.In making a qualified Hurricane Katrina distribution, the Administrator may rely on the
Participants or Beneficiarys reasonable representations as to his principal place of
abode on August 25, 2005, and whether he suffered an economic loss, unless the Administrator
has actual knowledge to the contrary.9.17
    
    Loans to Participants. The Administrator may, in its sole discretion and in accordance
with a uniform and nondiscriminatory policy established by it, permit loans to be made to a
Participant; provided that, effective April 1, 2006, no such loan may be made with respect
to amounts invested in the Common Stock Fund. Loans (a) will be made available to
Participants on a reasonably equivalent basis; (b) not be made available to Highly
Compensated Employees in an amount greater than the amount made available to other
Participants; (c) bear a reasonable rate of interest; (d) be adequately secured; and (e)
provide for periodic repayment over a reasonable period of time. In addition, when such
loans are repaid, such repayment will be allocated to the Investment Funds in accordance
with the Participants investment elections in effect at the time of repayment. In addition,
a Participant who terminates employment with the Employer and all Affiliated Companies on or
after April 1, 2006 may elect to continue to repay an outstanding Plan loan following such
termination as provided in the written loan policy established by the Administrator. All
loans granted pursuant to this Section 9.17 will be granted in accordance with the written
loan policy to be established as set forth above (which policy, when properly adopted, is
hereby incorporated by reference and made a part of this Plan). Such written loan policy,
once established, may be modified or amended in writing from time to time without the
necessity of amending this Section 9.17. The loan policy established by the Administrator
will comply with the applicable provisions of ERISA and regulations promulgated pursuant
thereto and with any limitations imposed by the Code and regulations promulgated pursuant
thereto to prevent the loan from being deemed to be a taxable distribution to the
Participant.9.18
    
    Duty to Keep Administrator Informed of Distributees Current Address. Each
Participant, Former Participant and Beneficiary must file with the Administrator from time
to time in writing his post office address and each change of post office address. Any
communication, statement or notice addressed to a Participant, Former Participant or
Beneficiary at his last post office address filed with the Administrator or, if no address
is filed with the Administrator, then at his last post office address as shown on an
Employers records, will be binding on the Participant or Former Participant, and his
Beneficiary, for all purposes of the Plan. Neither the Administrator nor the Trustee will be
required to search for or locate a Participant, Former Participant or Beneficiary.9.19
    
    Failure to Claim Benefits. If the Administrator notifies the Participant, Former
Participant or Beneficiary by registered or certified mail at his last known address that he
is entitled to a distribution and also notifies him of the provisions of this Section 9.19,
and the Participant, Former Participant or Beneficiary fails to claim his benefits under the
Plan or make his current address known to the Administrator within a reasonable period of
time after such notification, the Administrator will direct that all unpaid amounts which
would have been payable to such Participant, Former Participant or Beneficiary will be
forfeited and applied as provided in Section 9.1(b). In the event that the Participant,
Former Participant or Beneficiary is subsequently located, the amounts which were
 46




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forfeited,
without adjustment for earnings and losses, will be restored and distributed to the
Participant, Former Participant or Beneficiary. The Employer for whom the Participant
last worked will contribute an amount to the Plan which is equal to the amount distributed
under the terms of this Section 9.19 to the extent that such amount cannot be reinstated
through forfeitures. Notwithstanding the preceding sentences, if the Administrator is trying
to locate a Participant, Former Participant or Beneficiary in connection with (a) a minimum
required distribution under Section 9.6, or (b) a return of Excess Elective Deferrals under
Section 4.1, Excess Contributions under Section 4.2, or Excess Aggregate Contributions under
Section 5.1, and the Administrator determines that such Participant, Former Participant or
Beneficiary cannot be located, the Administrator will establish an escrow account outside of
the Plan in the name of that Participant, Former Participant or Beneficiary and direct the
Trustee to distribute such amount to that account.9.20
    
    Distribution Pursuant to a QDRO. The Administrator will establish policies and
procedures for reviewing Domestic Relations Orders relating to a Participants interest in
the Plan. The Administrator or its delegate will determine whether any such Domestic
Relations Order is a QDRO. If the provisions of a QDRO provide for an immediate distribution
to an Alternate Payee, the Administrator will direct the Trustee to commence payments to the
Alternate Payee as soon as administratively practicable, following the later of (a) the
receipt of such QDRO by the Administrator or (b) the date the Administrator receives the
Alternate Payees written consent to such distribution. Until such time as payment is made
to an Alternate Payee pursuant to this Section 9.20, the Alternate Payee will have no rights
under the Plan other than the rights of a Beneficiary and the right to direct the investment
of amounts awarded to the Alternate Payee. If an Alternate Payee does not receive an
immediate distribution pursuant to this Section 9.20, the Administrator will direct the
Recordkeeper to identify the Alternate Payees interest in the Trust Fund pending a
distribution to the Alternate Payee and the Alternate Payee may direct the investment of the
Alternate Payees interest in the Trust Fund pursuant the provisions of Section 16.1.
 
 End of Article IX 47




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ARTICLE X
 DISTRIBUTIONS UPON DEATH;
DESIGNATIONS OF BENEFICIARIES
 10.1
    
    Death Prior to Benefit Commencement Date.
 (a)
    
    Form of Death Benefits. In the case of a Participant or Former Participant who
dies before his Benefit Commencement Date, his vested Individual Account will be
paid to his surviving Spouse or Beneficiary, as applicable, in the form of a single
lump sum cash payment or Direct Rollover, to the extent applicable and elected.(b)
    
    Timing of Payment of Death Benefit. Payment of the vested Individual Account of
a Participant or Former Participant who dies before his Benefit Commencement Date
will be paid as soon as administratively practicable after the Administrator
receives the necessary documentation of the Participants Death, but no laterthan
December 31 of the calendar year following the Participants death.The payment of death benefits under this Article X is conditioned upon the
Administrators ability to locate the appropriate person to whom such benefits
should be paid. In the event that the Administrator is unable to locate such person
within a reasonable period of time after the date such benefits would otherwise be
payable, the provisions of Section 9.19 regarding the conditional forfeiture of
unclaimed benefits will apply.(c)
    
    Valuation of Death Benefits. The value of a Participants or Former
Participants vested Individual Account which become payable by reason of the
Participants or Former Participants death will be determined as of the Valuation
Date immediately preceding the date of distribution.
 10.2
    
    Designation of Beneficiary.
 (a)
    
    Designation or Revocation. Subject to the provisions of Section 9.9 (regarding
optional forms of benefit), whenever a Participant may be permitted to designate a
Beneficiary to receive benefits under this Plan, such designation will be made,
pursuant to a Qualified Election, by the execution and delivery to the Administrator
of an instrument in a form satisfactory to the Administrator. A Participant may
designate one or more Beneficiaries and may designate primary and secondary
Beneficiaries. A Participant will have the right to change or revoke any such
Beneficiary designation by filing a new designation and notice of revocation with
the
Administrator, and, subject to the rules governing a Qualified Election and the
requirement for the consent of a Spouse to a change in a Participants Beneficiary
designation, no notice to any Beneficiary or consent by any Beneficiary will be
required to effect any such change or revocation.(b)
    
    Failure to Designate Beneficiary or Death of Beneficiary. If a deceased
Participant or Former Participant fails to properly designate a Beneficiary, or if
the Administrator receives no response from a designated Beneficiary after giving
notice to such Beneficiary by certified mail to such person at his last known
address as shown in the Plans records (or if the certified letter is returned
 48




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to
the Administrator by the United States Postal Service as undeliverable), or if for
any reason the designations will be legally ineffective, or if all Beneficiaries
(both primary and secondary) predecease the Participant or Former Participant, any
distribution required to be made under the provisions of this Plan from the Trust
Fund will be made by payment: (i) to his Spouse, in the form of a lump sum cash
payment or Direct Rollover; or (ii) if no such Spouse survives, in a single sum cash
payment to the qualified representative of the Participants or Former Participants
estate; provided, however, that if no qualified representative of the deceased
Participants or Former Participants estate can be located within a reasonable
period of time following the Participants or Former Participants death, the
Administrator in its discretion may (A) make the distribution under this Section
10.2(b) to such persons who establish to the satisfaction of the Administrator that
they are heirs at law of the Participant or Former Participant, or (B) conditionally
forfeit the entire balance of the Participants or Former Participants Individual
Account pursuant to Section 9.19.(c)
    
    Administrators Determination Binding. The determination by the Administrator
as to which persons are entitled to payment of a Participants or Former
Participants interest in the Plan upon his death or the death of his Spouse or
Beneficiary, will be final and conclusive upon all persons.
 10.3
    
    Death After Benefit Commencement Date. In the case of a Participant who dies after his
Benefit Commencement Date, no benefits will be payable except to the extent required under
the form of benefit as in effect on the date of the Participants death.
 
 End of Article X 49




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ARTICLE XI
 AMENDMENT OF PLAN
 11.1
    
    Right to Amend. Subject to Section 11.2 and any other limitations contained in ERISA
or the Code, the Company may from time to time amend, in whole or in part, any or all of the
provisions of the Plan on behalf of the Company and all Employers. Specifically, but not by
way of limitation, the Company may make any amendment necessary to acquire and maintain a
qualified status for the Plan under the Code, whether or not retroactive. In addition,
effective April 1, 2006, the Chief Executive Officer of the Company will have the authority
to amend the Plan to comply with changes in the law, adopt changes to the Plan recommended
by the Committee, or make other changes that will not materially increase the cost of
maintaining the Plan to the Employers.11.2
    
    Limitation on Amendments. No amendment of the Plan will be made that would vest in any
Employer, directly or indirectly, any interest in or control of the Trust Fund. No
amendment will be made that would vary the Plans exclusive purpose of providing benefits to
Participants, Former Participants and their Beneficiaries and of defraying reasonable
expenses of administering the Plan or that would permit the diversion of any part of the
Trust Fund from that exclusive purpose. No amendment will be made that would reduce any
then vested interest of a Participant or Former Participant in his Individual Account. No
amendment will increase the duties or responsibilities of the Trustee unless the Trustee
consents thereto in writing.No amendment to the Plan will reduce or restrict, either directly or indirectly, the benefit
provided under this Plan to any Participant or Former Participant prior to the amendment.
Further, no amendment to the vesting schedule will deprive a Participant or Former
Participant of his vested interest in his Individual Account as of the date of the
amendment. Further, if the vesting schedule of this Plan is amended, or if the Plan is
amended in any way that directly or indirectly affects the computation of a Participants or
Former Participants vested interest, each such person with at least three (3) Years of
Service as of the last day of the election period described below may elect, within a
reasonable period after the adoption of the amendment, to have his vested interest computed
under the Plan without regard to such amendment. The period during which such election may
be made will commence with the date the amendment is adopted and will end sixty (60) days
after the latestof:
 (a)
    
    the date the amendment is adopted;(b)
    
    the date the amendment becomes effective; or(c)
    
    the date the Participant or Former Participant is issued written notice of the
amendment by the Employer.
 
 End of Article XI 50




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ARTICLE XII
 TERMINATION OF PLAN
 12.1
    
    Right to Discontinue Contributions, Terminate, or Partially Terminate. The Company has
established the Plan with the bona fide intention and expectation that from year to year it
will be able to, and will deem it advisable to, make its contributions thereto as provided
in this Plan document. However, the Company realizes that circumstances not now foreseen,
or circumstances beyond its control, may make it either impossible or inadvisable for the
Company to continue to make such contributions to the Plan. Therefore, the Company will
have the power to discontinue contributions to the Plan, terminate the Plan, or partially
terminate the Plan at any time hereafter. Each Employer, each Participant and Former
Participant, the Administrator, the Committee, the Daily Administrator and the Trustee will
be notified of such discontinuance, termination, or partial termination.
 12.2
    
    Procedure in the Event of Discontinuance of Contributions, Termination, or Partial
Termination.
 (a)
    
    Permanent Discontinuance of Contributions. If the Plan is amended so as to
permanently discontinue Employer contributions, or if Employer contributions are in
fact permanently discontinued, each affected Participant will continue to be one
hundred percent (100%) vested in his Individual Account. In case of such
discontinuance, the Administrator will remain in existence and all other provisions
of the Plan that are necessary, in the opinion of the Administrator, for equitable
operation of the Plan will remain in force.(b)
    
    Partial or Complete Termination. If the Plan is terminated or partially
terminated, each affected Participant will continue to be one hundred percent (100%)
vested in his Individual Account. Unless the Plan is otherwise amended prior to
dissolution of the Company, the Plan will terminate as of the date of dissolution of
the Company.(c)
    
    Allocation of Contributions, Forfeitures, Income and Losses. Upon
discontinuance of contributions, termination, or partial termination, any previously
unallocated contributions, forfeitures, and net income (or net loss) will be
allocated according to the provisions of Article III. To the extent that a suspense
account is in existence pursuant to Article VII, such suspense account will be
allocated to the Individual Accounts of Participants to the extent permitted by
section 415 of the Code, with any excess remaining after such allocation being paid
to the Employer. Thereafter, the net income (or net loss) of the Trust Fund will
continue to be allocated to the Individual Accounts of the Participants until the
balances of such accounts are distributed.(d)
    
    Distribution of Individual Accounts. In the case of a termination or partial
termination of the Plan, and in the absence of a Plan amendment to the contrary, the
Trustee will pay the balance of
the Individual Account of a Participant for whom the Plan is so terminated, or who
is affected by such partial termination, to such Participant, subject to the time of
payment, form of payment, and consent provisions of Article IX.
 12.3
    
    Merger, Consolidation, or Transfer. This Plan and Trust Fund may not merge or
consolidate with, or transfer its assets or liabilities to, any other plan, unless
immediately
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thereafter each Participant would, in the event such other plan terminated, be
entitled to a benefit which is equal to or greater than the benefit to which he would have
been entitled if the Plan were terminated immediately before the merger, consolidation, or
transfer. Further, no transfer of assets or liabilities will be made from this Plan to
another plan, unless such other plan will impose the same distribution restrictions on
Pre-Tax Contributions and QNECs as this Plan.12.4
    
    Reversion of Contributions to Employer. Except as provided in Section 3.5 and Section
12.2 under no circumstances or conditions will the Trust Fund or any portion thereof revert
to any Employer or be used for or diverted to the benefit of anyone other than Participants,
Former Participants and Beneficiaries, it being understood that the Trust Fund will be for
the exclusive benefit of Participants, Former Participants and Beneficiaries.
 
 End of Article XII 52




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ARTICLE XIII
 PLAN ADMINISTRATION
 13.1
    
    The Administrator. The overall administration of the Plan will be the responsibility
of the Administrator who will be appointed by formal action of the Company. The Company may
appoint a Committee to serve as Administrator consisting of any number of members as
determined by the Company. The Company may remove any member of the Committee at any time
and a member may resign by written notice to the Company. Any vacancy in the membership of
the Committee will be filled by appointment of the Board of Directors or the Chief Executive
Officer of the Company, but pending the filling of any such vacancy the then members of the
Committee may act hereunder as though they alone constitute the full Committee. As of the
Effective Date, the Committee has been appointed as Administrator.13.2
    
    Action by Committee. The following rules apply with respect to actions of the
Committee:
 (a)
    
    Majority. Any and all acts and decisions of the Committee will be by at least a
majority of the then members, but the Committee may delegate to any one or more of
its members the authority to sign notices or other documents on its behalf or to
perform ministerial acts for it, in which event the Trustee, the Recordkeeper and
any other person may accept such notice, document or act without question as having
been authorized by the Committee.(b)
    
    Committee Procedure. The Committee may, but need not, call or hold formal
meetings and any decisions made or action taken pursuant to written approval of a
majority of the then members will be sufficient to constitute an act thereof. The
Committee will maintain adequate records of its decisions, which records will be
subject to inspection by the Company, any Employer, any Participant, Former
Participant, Beneficiary, and any other person to the extent required by law, but
only to the extent that they apply to such person. Also, the Committee may designate
one of its members as Chairman and one of its members as Secretary and may establish
policies and procedures governing it as long as the same are not inconsistent with
the terms of the Plan.(c)
    
    Delegation to Committee and Companys Duty to Furnish Information. The
Committee will perform the duties and may exercise the powers and discretion given
to it in this Plan and its decisions and actions may be relied upon by all persons
affected thereby. The Trustee and the Recordkeeper may rely without question upon
any notices, directions, or other documents received from the Committee. The Company
and each Employer will furnish the Committee with all data and information available
to the Company and such Employer which the Committee may reasonably require in order
to perform its duties. The
Committee may rely without question upon any such data or information furnished by
the Company and each Employer.(d)
    
    Limitation on Committee Action. A member of the Committee may not vote or
decide upon any matter relating solely to himself or vote in any case in which his
individual right or claim to any benefit under the Plan is particularly involved.
In any case in which any Committee member is so disqualified to act, the remaining
 53




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members will exercise all of the powers of a qualified member concerning the matter
in which the disqualified member is not qualified to act.(e)
    
    Construction of Plan and Trustees and Recordkeepers Reliance. Any and all
matters involving the Plan, including but not limited to any and all disputes which
may arise involving Participants, Former Participants, and Beneficiaries and/or the
Trustee or the Recordkeeper will be referred to the Committee. The Committee has the
exclusive discretionary authority to construe the terms of the Plan and the
exclusive discretionary authority to determine eligibility for all benefits
hereunder. Any such determinations or interpretations of the Plan adopted by the
Committee will be final and conclusive and will bind all parties. The Trustee and
the Recordkeeper may rely upon the decision of the Committee with respect to any
question concerning the meaning, interpretation, or application of any provision of
the Plan.
 13.3
    
    Rules and Regulations of Administrator. The Administrator will have the authority to
make such rules and regulations and to take such action as may be necessary to carry out the
provisions of the Plan and will, subject to the provisions of the Plan, decide any questions
arising in the administration, interpretation and application of the Plan, which decisions
will be conclusive and binding on all parties. The Administrator may allocate or delegate
any part of its authority and duties as it deems expedient.13.4
    
    Powers of Administrator. In order to effectuate the purposes of the Plan, the
Administrator will have the following powers:
 (a)
    
    To appoint the Daily Administrator;(b)
    
    To determine all questions with regard to rights of Eligible Employees,
Employees, Participants, Former Participants and Beneficiaries under the Plan
including, but not limited to, questions involving eligibility of an Employee to
participate in the Plan and the value of a Participants or Former Participants vested
Individual Account;(c)
    
    To make all determinations and computations concerning the benefits, credits
and debits to which any Participant, Former Participant or other Beneficiary, is
entitled under the Plan;(d)
    
    To review and render decisions respecting a denial of a claim for benefits
under the Plan;(e)
    
    To construe the Plan and to make equitable adjustments for any mistakes or
errors made in the administration of the Plan;(f)
    
    To receive from the Employer and from Employees such information as is
necessary for the proper administration of the Plan;(g)
    
    To receive and review reports from the Trustee of the financial condition and
receipts of and disbursements from the Trust Fund;(h)
    
    To determine and resolve in its sole and absolute discretion all questions
relating to the administration of the Plan and Trust Fund (i) when differences of
opinion arise between the Employer, the Daily Administrator, the Trustee, a
Participant,
 54




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or any of them, and (ii) whenever it is deemed advisable to determine such
questions in order to promote the uniform and nondiscriminatory administration of the
Plan for the greatest benefit of all parties concerned;(i)
    
    To select the Investment Funds under the Plan;(j)
    
    To direct the Trustee as to the investment of any Participants Individual
Account and the crediting and distribution of the Trust Fund, as more specifically
provided in this Plan and the Trust Agreement;(k)
    
    To give the Trustee specific directions in writing with respect to:
 (i)
    
    the making of distribution payments, giving the names of the
payees, the amounts to be paid and the time or times when payments will be
made; and(ii)
    
    the making of any other payments which the Trustee is not by
the terms of the Trust Agreement authorized to make without a direction in
writing by the Administrator;
 (l)
    
    To comply (or transfer responsibility for compliance to the Trustee) with all
applicable Federal income tax withholding requirements for benefit distributions;(m)
    
    To appoint, in its discretion, in accordance with the provisions of the Trust
Agreement, one or more Investment Managers (as defined under section 3(38) of ERISA) to
manage, including the power to acquire or dispose of, all or any portion of the assets
of the Plan and Trust Fund;(n)
    
    To engage the service of counsel (who may, if appropriate, be counsel for the
Employer), actuaries, and agents whom it may deem advisable to assist it with the
performance of its duties; and(o)
    
    To amend the Plan pursuant to Section 11.1.
 The foregoing list of express powers is not intended to be either complete or conclusive,
and the Administrator will, in addition, have such powers as it may reasonably determine
to be necessary or appropriate in the performance of its powers and duties under the Plan.13.5
    
    Appointment of Daily Administrator. The Administrator will appoint the Daily
Administrator who will serve in a ministerial capacity with respect to the daily operation
of the Plan. The Administrator may remove the Daily Administrator with or without cause at
any time. The Daily Administrator may resign upon written notice to the Administrator. As
of the Effective Date, the Administrator has appointed the Employee Benefits Department of
the Company as the Daily Administrator.13.6
    
    Duties of Daily Administrator. The Daily Administrator will have the following duties:
 (a)
    
    To carry out the administration of the Plan in accordance with the provisions
herein set forth;
 55




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(b)
    
    To adopt rules of procedure and regulations necessary for the administration of
the Plan, provided such rules are not inconsistent with the terms of the Plan;(c)
    
    To enforce the terms of the Plan and any rules and regulations adopted by the
Plan Administrator;(d)
    
    To furnish the Employer with information which the Employer may require for tax
or other purposes;(e)
    
    To establish and maintain, or cause to be maintained, the Individual Accounts
described in Article I;(f)
    
    To prescribe procedures to be followed by distributees in obtaining benefits;(g)
    
    To create and maintain such records and forms as are required for the efficient
administration of the Plan;(h)
    
    To prepare, or cause to be prepared, an annual report for the Employer, as of
the last day of each Plan Year, in such form as may be required by the Employer;(i)
    
    To determine and maintain records of the age and amount of Compensation, Hours
of Service, Years of Service of each Employee;(j)
    
    To comply with all applicable lawful reporting and disclosure requirements of
ERISA; and(k)
    
    To construe the Plan, in its sole and absolute discretion, and make equitable
adjustments for any mistakes and errors made in the administration of the Plan.
 The foregoing list of express duties is not intended to be either complete or conclusive,
and the Daily Administrator will, in addition, exercise such other powers and perform such
other duties as it may deem necessary, desirable, advisable or proper for the supervision
and administration of the Plan.13.7
    
    Indemnification of the Administrator and Daily Administrator. To the extent not
covered by insurance, or if there is a failure to provide full insurance coverage for any
reason, and to the extent permissible under corporate by-laws and other applicable laws and
regulations, the Company hereby indemnifies and agrees to defend and hold harmless the
Administrator, each member of the Committee, and the Daily Administrator, and their
respective successors, assigns, heirs, legatees, and beneficiaries, as the case may be,
against any and all loss, cost liability claims, and causes of action by or on behalf of any
and all parties whomsoever, and all losses therefrom, including, without limitation, costs
of defense and attorneys fees, based upon or arising out of any act or omission relating to
or in connection with the Plan and Trust Agreement other than losses resulting from any such
persons fraud or willful misconduct.13.8
    
    Plan Fiduciaries.
 (a)
    
    Named Fiduciary. The Trustee is the named fiduciary hereunder with respect to
the powers, duties and responsibilities of investment of the Trust Fund and the
Administrator is the named fiduciary hereunder with respect to the powers, duties
 56




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and responsibilities of the administration of the Plan. Certain powers, duties and
responsibilities of each of said named fiduciaries are specifically delegated to
others under the provisions of the Plan and Trust Agreement and other powers, duties
and responsibilities of any fiduciaries may be delegated by written agreement to
others to the extent permitted under the provisions of the Plan and Trust Agreement.(b)
    
    Scope of Fiduciary Responsibility. The powers and duties of each fiduciary
hereunder, whether or not a named fiduciary, will be limited to those specifically
delegated to each of them under the terms of the Plan and Trust Agreement. It is
intended that the provisions of the Plan and Trust Agreement allocate to each
fiduciary the individual responsibilities for the prudent execution of the functions
assigned to each fiduciary. None of the allocated responsibilities or any other
responsibilities will be shared by two or more fiduciaries unless such sharing will
be provided by a specific provision in the Plan or the Trust Agreement. Whenever
one fiduciary is required by the Plan or the Trust Agreement to follow the
directions of another fiduciary, the two fiduciaries will not be deemed to have been
assigned a share of any responsibility, but the responsibility of the fiduciary
giving the directions will be deemed to be his sole responsibility and the
responsibility of the fiduciary receiving those directions will be to follow same
insofar as such instructions on their face are proper under applicable law. Any
fiduciary may employ one or more persons to render advice with respect to any
responsibility such fiduciary has under the Plan or Trust Agreement.(c)
    
    Multiple Capacity of Fiduciaries. Each fiduciary may, but need not, be a
director, officer or employee of the Employer. Nothing in the Plan will be
construed to prohibit any fiduciary from;
 (i)
    
    Serving in more than one fiduciary capacity with respect to the
Plan and Trust Agreement;(ii)
    
    Receiving any benefit to which he may be entitled as a
Participant or Beneficiary in the Plan, so long as the benefit is computed and
paid on a basis which is consistent with the terms of the Plan as applied to
all other Participants, Former Participants and Beneficiaries; or(iii)
    
    Receiving any reasonable compensation for services rendered,
or for the reimbursement of expenses properly and actually incurred in the
performance of his duties with respect to the Plan, except that no person so
serving who already receives full-time pay from the Employer will receive
compensation from the Plan, except for reimbursement of expenses properly and
actually incurred.
 (d)
    
    Bonding of Fiduciaries. Each fiduciary will be bonded as required by applicable
law or statute of the United States, or of any state having appropriate
jurisdiction, unless such bond may under such law or statute be waived by the
parties to the Trust Agreement. The Employer will pay the cost of bonding any
fiduciary who is an employee of the Employer.
 13.9
    
    Action Taken in Good Faith. To the extent permitted by ERISA, the members of the
Committee and each employee, officer and director of an Affiliated Company who are
fiduciaries with respect to the Plan will be entitled to rely on, and be fully protected
with
 57




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respect to any action taken or suffered by them in good faith in reliance on, all
tables, valuations, certificates, reports and opinions furnished by the Recordkeeper, the
Trustee, or any accountant, attorney, insurance company, investment manager or other advisor
acting at any time hereunder.13.10
    
    Expenses of Administration. Except to the extent paid by an Employer, the
Administrator will cause the Trustee to pay all expenses incurred in the administration of
the Plan, including expenses of the Committee, the Recordkeeper and the Administrator, and
expenses and compensation of the Trustee and the expenses of counsel.13.11
    
    Claims Procedure. For purposes of this Section 13.11, a reference to the claimant
includes the Participant, Former Participant, Spouse, Alternate Payee or Beneficiary, as
applicable, and the authorized representative of any such person.
 (a)
    
    Filing of Claim. A claimant who feels he is being denied any benefit or right
provided under the Plan must file a claim with the Administrator or its designee.
All such claims must be submitted in the form and manner specified by the
Administrator and will be considered filed on the date the claim is received by the
Administrator.(b)
    
    Notice of Disposition of Claim. Upon the receipt of such a claim and in the
event the claim is denied, the Administrator will, within a reasonable period of
time, provide such claimant a written statement which will be delivered or mailed to
the claimant by certified or registered mail to his last known address, which
statement will contain the following:
 (i)
    
    The specific reason or reasons for the denial of benefits;(ii)
    
    A specific reference to the pertinent provisions of the Plan
upon which the denial is based;(iii)
    
    A description of any additional material or information which
is necessary for the claimant to perfect his claim and an explanation of why
such material or information is necessary; and(iv)
    
    An explanation of the Plans claim review procedure and the
time limits applicable to such procedure, including the claimants right to
file a suit under section 502(a) of ERISA following an adverse benefit
determination on review as provided below;
 provided, however, in the event that special circumstances require an extension of
time for processing the claim, the Administrator will provide such claimant with
such written statement described above not later than one hundred eighty (180) days
after receipt of the claimants claim, but, in such event, the Daily Administrator,
or its delegate, will furnish the claimant, within ninety (90) days after its
receipt of such claim, written notification of the extension explaining the
circumstances requiring such extension and the date that it is anticipated that such
written statement will be furnished.(c)
    
    Request for Review. Within ninety (90) days after receipt of a notice of a
denial of benefits as provided above, the claimant may file a written request with
the Committee for a review of his claim. In conducting its review, the Committee
will
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consider any written statement or other evidence presented by the claimant in
support of his claim. The Committee will give the claimant upon request, and free
of charge, reasonable access to and copies of all pertinent documents necessary for
the preparation of his claim.(d)
    
    Decision on Review. After receipt by the Committee of a written application for
review of his claim, the Committee will review the claim taking into account all
comments, documents, records and other information submitted by the claimant
regarding the claim without regard to whether such information was considered in the
initial benefit determination. The Committee will notify the claimant of its
decision by delivery or by certified or registered mail to his last known address.Such decision will be made no later than the date of the meeting of the Committee
which immediately follows the Administrators receipt of the request
for review, unless the request for review was received by the Committee within
thirty (30) days before such meeting, in which case a decision will be made by no
later than the second meeting of the Committee following the Committees receipt of
the request for review. If special circumstances require a further extension of
time for processing such request for review, a decision will be made not later than
the third meeting of the Committee following the Committees receipt of the request
for review and the claimant will be advised in advance of the need for the
extension. The decision of the Committee will be provided to the claimant as soon
as possible but no later than five (5) days after the benefit determination is made.The decision of the Committee will be in writing and will include the specific
reasons for the decision presented in a manner calculated to be understood by the
claimant and will contain references to all relevant Plan provisions on which the
decision was based. Such decision will also advise the claimant that he may receive
upon request, and free of charge, reasonable access to and copies of all documents,
records and other information relevant to his claim and will inform the claimant of
his right to file an action under section 502(a) of ERISA in the case of an adverse
decision regarding his appeal. The decision of the Committee will be final and
conclusive.
 
 End of Article XIII 59




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##### 



ARTICLE XIV
 ADOPTION BY AFFILIATED COMPANIES
 14.1
    
    Adoption by and Designation of Other Employers.
 (a)
    
    Adoption by or Designation of Participating Employers. With the permission of
the Company, as evidenced by a resolution of the board of directors of the Company,
any Affiliated Company may become an Employer by either (i) commencing Pre-Tax
Contributions on behalf of its Eligible Employees or (ii) delivering a written
instrument to the Administrator specifying its intent to participate in the Plan and
the effective date of such participation. Such written instrument may, but need
not, also supply specific provisions relating to the operation of the Plan that will
apply to the designated Employer only and that will become, as to such designated
Employer and its Eligible Employees, a part of the Plan and the Trust Agreement.(b)
    
    Consent of Designation. Each Affiliated Company that becomes an Employer will
be conclusively presumed to agree to be bound by the terms of the Plan and any and
all amendments thereto upon (i) its submission of information to the Administrator
required by the terms of or with respect to the Plan, (ii) making a contribution to
the Trust Fund pursuant to the terms of the Plan, or (iii) adopting a resolution of
its board of directors or other appropriate written authorization; provided,
however, that the terms of the Plan may be modified so as to increase the
obligations of an Employer only with the consent of such Employer, which consent
will be conclusively presumed to have been given by such Employer upon the
occurrence of an event described in (i) or (ii) above, following notice of such
modification.(c)
    
    Effect of Adoption by Employer. Any entity or organization that adopts the Plan
will be deemed to be an Employer for all purposes under the Plan unless otherwise
specified in a written instrument adopted by the Company or such Employer. In
addition, such written instrument may provide, in the discretion of the Company or
such Employer, that the Eligible Employees of such Employer will receive credit for
their employment with such entity or organization prior to the date it became an
Employer for purposes of determining the eligibility of such Employees to
participate in the Plan and/or the vested and nonforfeitable interest of such
Employees as Participants.(d)
    
    Application of Plan to Each Employer. Except as otherwise provided in an
Appendix attached hereto, the provisions of the Plan will apply separately and
equally to each Employer and its Employees in the same manner as is expressly
provided with respect to the Company and its Employees; provided, however, that the
power to appoint or otherwise affect the Administrator, the Committee, the Daily
Administrator or the Trustee and the power to amend or terminate the Plan will be
exercised by the Company alone.(e)
    
    Transfer Among Employers. A Participants transfer of employment among
Employers will not be considered a termination of employment under this Plan, and
his service with one will be considered as service with all others.(f)
    
    Termination of Participation. Any Employer may, by appropriate action of its
board of directors or noncorporate counterpart that is communicated in writing to
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the Company and to the Administrator, terminate its participation in the Plan and
the Trust. The Company may, in its discretion, terminate an Employers Plan and
Trust participation at any time by written instrument delivered to the Administrator
and the designated Employer.
 14.2
    
    Single Plan. The Plan is a single plan with respect to all Employers, except to the
extent required by section 413 of the Code and unless the Company specifically provides that
the Plan will be a separate plan with respect to the Company and each Employer. The
contributions of any Employer that is a member of a group of employers with respect to which
the Plan represents a single plan will be available for allocation on behalf of any
Participants who are Employees of any other Employers that are members of such group but
will not be available for allocation on behalf of any Participants who are Employees of any
Employer that is not a member of such group. Conversely, the contributions of any Employer
with respect to which the Plan represents a separate plan for only that Employer will be
available for allocation on behalf of Participants who are its Employees but will not be
available for allocation on behalf of Participants who are Employees of any other Employers.
Likewise, contributions under each such plan will be tested separately pursuant to sections
401(k), 401(m), and 415 of the Code, and the minimum participation requirements of section
410(b) of the Code will be applied separately with respect to each such plan. However,
service with all Employers will count for eligibility and vesting purposes under the Plan
and a transfer between Employers will not be treated as a separation from service for
distribution purposes under the Plan.
 
 End of Article XIV 61




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ARTICLE XV
 THE TRUSTEE
 15.1
    
    Trust Fund. A Trust Fund has been created and will be maintained for the purposes of
the Plan, and the monies thereof will be invested in accordance with the terms of the Trust
Agreement which forms a part of the Plan. All Pre-Tax Contributions, Matching
Contributions, Catch-Up Contributions, QNECs and Rollover Contributions will be paid into
the Trust Fund, and all benefits under the Plan will be paid from the Trust Fund.15.2
    
    Trustees Duties. Except as otherwise specifically provided in the Trust Agreement,
the Trustees obligations, duties and responsibilities are governed solely by the terms of
the Trust Agreement, reference to which is hereby made for all purposes.15.3
    
    Benefits Only from Trust Fund. Any person having any claim under the Plan will look
solely to the assets of the Trust Fund for satisfaction. In no event will the Company, any
other Employer or any of their respective officers, Employees, agents, members of the board
of directors, the Trustee, any successor trustee, the Administrator, the Daily
Administrator, the Recordkeeper or any member of the Committee, be liable in their
individual capacities to any person whomsoever, under the provisions of the Plan or Trust
Agreement, absent a breach of fiduciary responsibility determined pursuant to the applicable
provisions of ERISA.15.4
    
    Trust Fund Applicable Only to Payment of Benefits. The Trust Fund will be used and
applied only in accordance with the provisions of the Plan, to provide the benefits thereof,
except as provided in Section 13.10 regarding payment of administrative expenses, and no
part of the corpus or income of the Trust Fund will be used for, or diverted to, purposes
other than for the exclusive benefit of Participants and other persons thereunder entitled
to benefits.15.5
    
    Appointment of Investment Advisor. The Administrator may appoint an investment advisor
as permitted by Section 402(c)(3) of ERISA to direct the Trustee with regard to the
investment of the assets held under the Plan. For purposes of this Section 15.5, investment
advisor will mean a fiduciary of the Plan who (a) is registered as an investment advisor
under the Investment Advisors Act of 1940, (b) is a bank, as defined in the Investment
Advisors Act of 1940, or (c) is an insurance company qualified under the laws of more than
one state to manage, acquire, or dispose of any asset of the Plan. If such an investment
advisor be so appointed, the Trustee will invest the assets held under the Plan in
accordance with the written directions received from such investment advisor. The Trustee
will not be obligated to accept direction from the investment advisor until such investment
advisor acknowledges in writing that it is a fiduciary of the Plan.
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15.6
    
    Administrators Duty to Trustee. The Administrator will notify the Trustee at the
appropriate time of all facts which may be necessary hereunder for the proper allocation of
increases, decreases, expenses, and contributions for Participants, the proper payment or
distribution of benefits, or the proper performance of any other act required of the Trustee
hereunder. The Administrator will notify the Trustee of such facts as are needed by the
Trustee to perform its functions under the Plan. The Administrator will secure appropriate
elections, directions, and designations for Participants, Former Participants and
Beneficiaries provided for in the Plan.
 
 End of Article XV 63




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ARTICLE XVI
 PARTICIPANT INVESTMENT OPTIONS
 16.1
    
    Investments of Contributions. Contributions by and on behalf of a Participant will be
invested in accordance with the Participants investment designations in one or more
Investment Funds established from time to time for this purpose. The Administrator, in its
sole discretion, without the necessity of Plan amendment, may authorize the Trustee to
include additional Investment Funds or may direct the Trustee to change to different
Investment Funds or fund managers among which the Participants may elect to have their
Individual Account invested. A separate sub-account will be established and maintained
under each Participants Individual Account to reflect the portion of such account which is
invested in each Investment Fund. Each sub-account represents a separate Investment Fund.16.2
    
    Participant Direction of Investment. The Plan is intended to comply with the
requirements of section 404(c) of ERISA and will be operated in accordance with such
requirements. The Administrator will establish rules that operate in a nondiscriminatory
manner which will provide each Participant with the right to direct the investment of
amounts credited to his Individual Account.
 (a)
    
    Nature of Election. A separate election may be made by each Participant or, as
applicable, Former Participant with respect to the investment of (i) future
contributions, and (ii) existing Individual Account balances. A Participants
election as to future contributions will be applied to all future contributions made
by or on behalf of the Participant, regardless of any change that occurs in the
amount of such contributions. A Participants or Former Participants election as
to existing Individual Account balances will be applied to his entire Individual
Account under the Plan.(b)
    
    Rules Regarding Elections. The Administrator may from time to time establish
rules regarding the manner in which elections by a Participant or Former
Participant, as the case may be, as to the investment of future contributions or
existing account balances, or both, may be made. Such rules may include, without
limitation, rules pertaining to the use of Interactive Electronic Communications.
To the extent deemed appropriate by the Administrator, special rules may be
established in the event of the introduction of new Investment Funds or the
substitution of one or more Investment Funds for one or more other Investment Funds,
in order to facilitate and promote an orderly transition. Participants will have
the right to direct the investment, in whole percentage increments from one percent
(1%) to one hundred percent (100%), of their Pre-Tax Unmatched Contributions,
Pre-Tax Matched Contributions, Catch-Up Contributions, Matching Contributions, and,
if applicable, any QNECs, or Rollover Contributions credited to the Plan on their
behalf among the Investment Funds as of each calendar quarter; provided, however,
that not more than twenty-five percent (25%) of such contributions may
be invested in the Common Stock Fund. Similarly, Participants or Former
Participants may elect to direct the investment of their Individual Account balances
provided that no more than twenty-five percent (25%) of such Individual Account
balances may be invested in the Common Stock Fund.
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(c)
    
    Investment of Matching Contributions. Matching Contributions may be made in
cash or in Common Stock as elected by the Chief Executive Officer of the Company.
Matching Contributions made in Common Stock will be invested in the Common Stock
Fund until otherwise directed by the Participant after the Matching Contribution is
made. If Matching Contributions are made in Common Stock and the Participant directs
that his Matching Contribution Account be invested in an Investment Fund or
Investment Funds other than the Common Stock Fund, the Trustee will transfer the
Participants Matching Contribution Account from the Common Stock Fund as soon as
administratively feasible after each Matching Contribution is made. Earnings from
the Common Stock Fund will be used to purchase Common Stock at prevailing market
prices directly from the Company, on the open market, or in privately negotiated
transactions. The Trustee will not pay any commissions in connection with the
acquisition of Common Stock if such payment would cause the acquisition to be a
prohibited transaction under ERISA. Funds in the Common Stock Fund will not be
commingled with funds in other Investment Funds. Matching Contributions made in
cash will be invested in the Investment Fund options selected by the Participant in
the same percentages as the investment direction in effect for the Participants
Pre-Tax Contributions, or in the default Investment Fund or Investment Funds
selected by the Administrator pursuant to Section 16.2(d), if the Participant has
not made an investment election.(d)
    
    Default Investment Fund. In accordance with rules which the Administrator may
adopt, in the case of any Participant who fails to elect one of the permitted
Investment Funds under the Plan, the Administrator will invest all amounts for which
no such fund has been elected and the Participant will be advised of the selected
Investment Funds. Notwithstanding the preceding provisions of this Section 16.2(d),
an investment election, once implemented pursuant to the Participants election or
by default in accordance with the preceding sentence, will be deemed to be a
continuing election until changed by the Participant in accordance with this Plan,
and the Administrator will have no obligation to remind any Participant regarding
the opportunity to change any investment election in effect, nor will the
Administrator have any responsibility to evaluate the suitability of any investment
election to the individual circumstance of any Participant.(e)
    
    Refusal to Implement Participant Directions. The Administrator may decline to
implement any Participant investment directions, or changes in investment
directions, to the extent such directions, if implemented:
 (i)
    
    Would not be in accordance with the terms of the Plan to the
extent such terms are consistent with the provisions of Title I of ERISA;(ii)
    
    Would cause the Administrator to maintain the indicia of
ownership of any Plan assets outside the jurisdiction of the district courts of
the United States, other than as permitted by section 404(b) of ERISA and DOL
Reg. § 2550.404(b)-1;(iii)
    
    Would result in taxable income to the Plan or jeopardize the
Plans tax qualified status under the Code;(iv)
    
    Could result in a loss in excess of the balance of the
Participants Individual Account; or
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(v)
    
    Would result in a prohibited transaction under section 406 of
ERISA or section 4975 of the Code.
 The Administrator or the Recordkeeper will provide Participants with such
information required by rules and regulations promulgated by the Department of Labor
under section 404(c) of ERISA in the manner and at the time prescribed therein.(f)
    
    Valuation of Investment Funds. The value of the assets held in the Trust Fund
in each of the Investment Funds as of each Valuation Date will be determined on the
basis of the fair market value of the assets of such fund as of such Valuation Date
as appraised by the Trustee plus or minus accruals and other appropriate accounting
adjustments. Each such Investment Fund will be segregated from and completely
independent of the other Investment Funds and the valuation procedures described in
Section 8.1 will apply separately with respect to each such fund.(g)
    
    Administrative Mistake. If a Participants change in investment directive or
election for redistribution of investments is inadvertently overlooked and discovery
of such oversight is made within forty-five (45) days after the date the Participant
receives confirmation of such investment election, the change or redistribution will
be made as soon as administratively feasible and the Participants Individual
Account will be retroactively changed or redistributed and treated in the same
manner as though his directive to change or redistribute had not been overlooked.
If discovery of such oversight is made more than forty-five (45) days after the date
the Participant receives confirmation of such investment election, no retroactive
correction will be made in the Participants Individual Account.
 16.3
    
    Investments in Individual Loans to Participants. Subject to the provisions of Section
9.17, the Trust Fund may be invested in individual loans to the Participants. A separate
sub-account will be established and maintained under each applicable Participants
individual Account to reflect his interest in the Trust Fund that is invested in an
individual loan.16.4
    
    Voting Rights. The Trustee will exercise all voting rights pertaining to each
Participants pro rata share of Common Stock held in the Common Stock Fund in accordance
with the terms of the Trust Agreement.
 
 End of Article XVI 66




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ARTICLE XVII
 TOP HEAVY PROVISIONS
 17.1
    
    Applicability. The provisions of this Article XVII will apply in the unlikely event
that the Plan is determined to be a Top-Heavy Plan for the Plan Year under the rules of
Section 17.3. Further, except as is expressly provided to the contrary, the rules of this
Article XVII will be applied after the application of the Affiliated Company rules of
Section 1.2. As of the Effective Date, the Plan is the only qualified retirement plan
maintained by the Company and the Affiliated Companies. Accordingly, the top heavy rules of
section 416 of the Code as described in this Article XVII are limited to the Plan. In the
event that the Company or an Affiliated Company adopts another qualified retirement plan,
this Article XVII will be updated accordingly.
 17.2
    
    Definitions.
 (a)
    
    Five Percent Ownermeans any person who owns (or is considered as owning within
the meaning of section 318 of the Code) more than five percent (5%) of the
outstanding stock of an Employer or Affiliated Company or stock possessing more than
five percent (5%) of the total combined voting power of all stock of an Employer or
Affiliated Company. The rules of sections 414(b), (c) and (m) of the Code will not
apply for purposes of applying these ownership rules. Thus, this ownership test
will be applied separately with respect to each Affiliated Company.(b)
    
    Key Employeemeans any Employee or former Employee (including any deceased
Employee) who at any time during the Plan Year was:
 (i)
    
    An officer of an Employer having 415 Compensation (as defined
in Section 7.1) greater than one hundred thirty thousand dollars ($130,000) (as
adjusted under section 416(i)(1) of the Code for Plan Years beginning after
December 31, 2002);(ii)
    
    A Five Percent Owner of the Employer; or(iii)
    
    A One Percent Owner of the Employer having 415 Compensation
(as defined in Section 7.1) of more than one hundred fifty thousand dollars
($150,000).
 The determination of who is a Key Employee will be made in accordance with section
416(i)(1) of the Code and other guidance of general applicability issued thereunder.(c)
    
    Non-Key Employeemeans any Employee or Beneficiary who is not a Key Employee.(d)
    
    One Percent Ownerany person who would be described in Section 17.2(a) if one percent
(1%) were substituted for five percent (5%) each place where it appears therein.
 17.3
    
    Top-Heavy Status.
 (a)
    
    Top-Heavy Plan Defined. The Plan will be a Top-Heavy Plan with respect to any
Plan Year if, as of the last day of the Plan Year the aggregate of the Individual
Accounts of Key Employees under the Plan exceeds sixty percent
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(60%) of the present value of the aggregate of the Individual Accounts of all Employees under the Plan.
For purposes of making this determination, the present value of Individual Accounts
will be determined as of the most recent valuation date that falls within a twelve
(12) month period ending on the last day of the Plan Year.(b)
    
    Treatment of Non-Key Employee. If any individual is a Non-Key Employee with
respect to the Plan for any Plan Year, but the individual was a Key Employee with
respect to the Plan for any prior Plan Year, the Individual Account of the
individual will not be taken into account for purposes of this Section 17.3.(c)
    
    Treatment of Persons Not Performing Services. If any individual has not
performed any services for the Employer at any time during the one (1) year period
ending on the last day of the Plan Year, the Individual Account of the individual
will not be taken into account for purposes of this Section 17.3.
 17.4
    
    Minimum Contributions. For each Plan Year in which the Plan is a Top-Heavy Plan, the
minimum contributions for that Plan Year will be determined in accordance with the rules of
this Section 17.4.
 (a)
    
    General Rule. Except as provided below, the minimum Employer contribution
(excluding Pre-Tax Contributions for each Non-Key Employee who satisfies the
requirements of Article III to be a Participant in the Plan (including but not
limited to the age and service requirements of Article III, but without regard to
any requirements (i) that a Participant complete a minimum number of Hours of
Service in order to share in an allocation of Matching Contributions for a year,
(ii) that a Participant make contributions to the Plan, or (iii) relating to the
Non-Key Employees level of Compensation)) will be not less than three percent (3%)
of his 415 Compensation (as defined in Section 7.1). Matching Contributions under
the Plan will be taken into account for purposes of satisfying the minimum
contribution requirements of section 416(c)(2) of the Code and this Section 17.4.
Such Matching Contributions will be treated as matching contributions for purposes
of the actual contribution percentage test and other requirements under section
401(m) of the Code.(b)
    
    Adjustment of Contribution. Subject to the following rules of this Section 17.4(b), the percentage set forth
in Section 17.4(a) above will not be required to exceed the percentage at which
contributions (including Pre-Tax Contributions and Matching Contributions under this
Plan) are made (or are required to be made) under the Plan for the Plan Year for the
Key Employee for whom the percentage is the highest for such Plan Year. This
determination will be made by dividing the contributions for each Key Employee by
his 415 Compensation (as defined in Section 7.1) for the Plan Year.(c)
    
    Limitation. The requirements of this Section 17.4 must be satisfied without
taking into account contributions under chapters 2 or 21 of the Code, Title Il of
the Social Security Act, or any other federal or state law.
 
 End of Article XVII 68




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ARTICLE XVIII
 MISCELLANEOUS
 18.1
    
    No Employment or Compensation Agreement. Nothing contained in the Plan will be
construed as giving any person or entity any legal or equitable right against the Company,
any other Employer, any Affiliated Company, their respective stockholders or partners,
officers or directors, the Administrator, the Daily Administrator, the Committee, the
Trustee or the Recordkeeper, except as the same will be specifically provided in the Plan.
Nor will anything in the Plan give any Participant or other Employee the right to be
retained in the service of an Employer. The employment of all persons by an Employer will
remain subject to termination by such Employer to the same extent as if the Plan had never
been executed.18.2
    
    Spendthrift Provision. Except as provided by the terms of Domestic Relations Order
which is determined to be qualified under section 414(p) of the Code, no Participant, Former
Participant, or Beneficiary will have the right to assign or transfer his interest
hereunder, nor will his interest be subject to claims of his creditors or others, it being
understood that all provisions of the Plan will be for the exclusive benefit of those
designated herein.18.3
    
    Construction. It is the intention of each Employer that the Plan be qualified under
section 401 of the Code, and comply with the applicable provisions of ERISA, and all
provisions hereof should be construed to that result.18.4
    
    Gender and Number. Except as otherwise indicated by the context, any masculine
terminology used herein also includes the feminine and neuter, and vice versa, and the
definition of any term herein in a singular will also include the plural, and vice versa.18.5
    
    Titles. Titles of Articles and Sections hereof are for convenience only and will not
be considered in construing the Plan.18.6
    
    Texas Law Applicable. The Plan and each of its provisions will be construed and their
validity determined by the laws of the State of Texas.18.7
    
    Successors and Assigns. The Plan will be binding upon the successors and assigns of
the Company and each Employer and the Trustee and upon the heirs and personal
representatives of those individuals who become Participants hereunder.18.8
    
    Plan Controls. Except as provided in Section 15.2, in the event of any conflict between the terms of the
Plan and any summary thereof or other document relating thereto, from whatever source, the
terms of the Plan will govern.
 
 End of Article XVIII 69




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IN WITNESS WHEREOF
 ZALE CORPORATIONBy:
    
    /s/ Mary E. BurtonIts:
    
    Chief Executive Officer
 70