Document:

Exhibit 4.14

 

CPI QUALIFIED PLAN CONSULTANTS, INC.

DEFINED CONTRIBUTION PROTOTYPE PLAN AND TRUST

 

 

Defined Contribution Plan

 

TABLE OF CONTENTS

 

	
  ARTICLE I, DEFINITIONS

  	
   

  
	
  1.01

  	
  Account

  	
  1

  
	
  1.02

  	
  Account Balance or Accrued
  Benefit

  	
  1

  
	
  1.03

  	
  Accounting Date

  	
  1

  
	
  1.04

  	
  Adoption Agreement

  	
  1

  
	
  1.05

  	
  Beneficiary

  	
  1

  
	
  1.06

  	
  Code

  	
  1

  
	
  1.07

  	
  Compensation

  	
  1

  
	
  1.08

  	
  Disability

  	
  2

  
	
  1.09

  	
  Earned Income

  	
  2

  
	
  1.10

  	
  Effective Date

  	
  3

  
	
  1.11

  	
  Employee

  	
  3

  
	
  1.12

  	
  Employer

  	
  3

  
	
  1.13

  	
  ERISA

  	
  3

  
	
  1.14

  	
  Highly Compensated Employee

  	
  3

  
	
  1.15

  	
  Hour of Service

  	
  3

  
	
  1.16

  	
  Leased Employee

  	
  4

  
	
  1.17

  	
  Nonhighly Compensated
  Employee

  	
  5

  
	
  1.18

  	
  Nontransferable Annuity

  	
  5

  
	
  1.19

  	
  Paired Plans

  	
  5

  
	
  1.20

  	
  Participant

  	
  5

  
	
  1.21

  	
  Plan

  	
  5

  
	
  1.22

  	
  Plan Administrator

  	
  5

  
	
  1.23

  	
  Plan Entry Date

  	
  5

  
	
  1.24

  	
  Plan Year

  	
  5

  
	
  1.25

  	
  Protected Benefit

  	
  5

  
	
  1.26

  	
  Related Group/Related
  Employer

  	
  5

  
	
  1.27

  	
  Self-Employed Individual /
  Owner-Employee/ Shareholder-Employee

  	
  6

  
	
  1.28

  	
  Separation from Service

  	
  6

  
	
  1.29

  	
  Service

  	
  6

  
	
  1.30

  	
  Service with a Predecessor
  Employer

  	
  6

  
	
  1.31

  	
  Trust

  	
  6

  
	
  1.32

  	
  Trust Fund

  	
  6

  
	
  1.33

  	
  Trustee

  	
  6

  
	
  1.34

  	
  Vested

  	
  6

  
	
  ARTICLE II, ELIGIBILITY AND
  PARTICIPATION

  	
   

  
	
  2.01

  	
  Eligibility

  	
  7

  
	
  2.02

  	
  Age and Service Conditions

  	
  7

  
	
  2.03

  	
  Break in Service -
  Participation

  	
  7

  
	
  2.04

  	
  Participation upon
  Re-employment

  	
  8

  
	
  2.05

  	
  Change in Employment Status

  	
  8

  
	
  2.06

  	
  Election Not to Participate

  	
  8

  
	
  ARTICLE III, EMPLOYER
  CONTRIBUTIONS AND FORFEITURES

  	
   

  
	
  3.01

  	
  Employer Contributions

  	
  9

  
	
  3.02

  	
  Deferral Contributions

  	
  9

  
	
  3.03

  	
  Matching Contributions

  	
  9

  
	
  3.04

  	
  Employer Contribution
  Allocation

  	
  9

  
	
  3.05

  	
  Forfeiture Allocation

  	
  11

  
	
  3.06

  	
  Allocation Conditions

  	
  12

  
	
  3.07

  	
  Annual Additions Limitation

  	
  13

  
	
  3.08

  	
  Estimating Compensation

  	
  13

  
	
  3.09

  	
  Determination Based on
  Actual Compensation

  	
  13

  
	
  3.10

  	
  Disposition of Allocated
  Excess Amount

  	
  13

  
	
  3.11

  	
  Combined Plans Annual
  Additions Limitation

  	
  14

  
	
  3.12

  	
  Estimating Compensation

  	
  14

  
	
  3.13

  	
  Determination Based on
  Actual Compensation

  	
  14

  
	
  3.14

  	
  Ordering of Annual Addition
  Allocations

  	
  14

  
	
  3.15

  	
  Disposition of Allocated
  Excess Amount Attributable to Plan

  	
  14

  
	
  3.16

  	
  Other Defined Contribution
  Plans Limitation

  	
  14

  
	
  3.17

  	
  Defined Benefit Plan
  Limitation

  	
  15

  
	
  3.18

  	
  Definitions - Article III

  	
  15

  
	
  ARTICLE IV, PARTICIPANT
  CONTRIBUTIONS

  	
   

  
	
  4.01

  	
  Participant Contributions

  	
  17

  
	
  4.02

  	
  Employee Contributions

  	
  17

  
	
  4.03

  	
  DECs

  	
  17

  
	
  4.04

  	
  Rollover Contributions

  	
  17

  
	
  4.05

  	
  Participant Contributions -
  Vesting

  	
  17

  
	
  4.06

  	
  Participant Contributions -
  Distribution

  	
  17

  
	
  4.07

  	
  Participant Contributions -
  Investment and Accounting

  	
  17

  
	
  ARTICLE V, VESTING

  	
   

  
	
  5.01

  	
  Normal/Early Retirement Age

  	
  18

  
	
  5.02

  	
  Participant Death or
  Disability

  	
  18

  
	
  5.03

  	
  Vesting Schedule

  	
  18

  
	
  5.04

  	
  Cash-out Distributions to
  Partially-Vested Participants/Restoration of Forfeited Account Balance

  	
  18

  
	
  5.05

  	
  Accounting for Cash-Out
  Repayment

  	
  19

  
	
  5.06

  	
  Year of Service - Vesting

  	
  19

  
	
  5.07

  	
  Break in Service and
  Forfeiture Break in Service - Vesting

  	
  19

  
	
  5.08

  	
  Included Years of Service -
  Vesting

  	
  20

  
	
  5.09

  	
  Forfeiture Occurs

  	
  20

  
	
  5.10

  	
  Rule of Parity - Vesting

  	
  20

  
	
  5.11

  	
  Amendment to Vesting
  Schedule

  	
  20

  
	
  5.12

  	
  Deferral Contributions
  Taken into Account

  	
  20

  
	
  ARTICLE VI, DISTRIBUTIONS

  	
   

  
	
  6.01

  	
  Timing of Distributions

  	
  21

  
	
  6.02

  	
  Required Minimum
  Distributions

  	
  22

  
	
  6.03

  	
  Method of Distribution

  	
  24

  
	
  6.04

  	
  Annuity Distributions to
  Participants and to Surviving Spouses

  	
  25

  
	
  6.05

  	
  Waiver Election - QJSA

  	
  26

  
	
  6.06

  	
  Waiver Election - QPSA

  	
  26

  
	
  6.07

  	
  Distributions Under
  Qualified Domestic Relations Orders (QDRO)

  	
  26

  
	
  6.08

  	
  Defaulted Loan - Timing of
  Offset

  	
  27

  
	
  6.09

  	
  Hardship Distribution

  	
  27

  
	
  6.10

  	
  Direct Rollover of Eligible
  Rollover Distributions

  	
  27

  
	
  6.11

  	
  TEFRA Elections

  	
  28

  
	
  ARTICLE VII, EMPLOYER
  ADMINISTRATIVE PROVISIONS

  	
   

  
	
  7.01

  	
  Information to Plan
  Administrator

  	
  29

  
	
  7.02

  	
  No Responsibility for Others

  	
  29

  
	
  7.03

  	
  Indemnity of Certain
  Fiduciaries

  	
  29

  
	
  7.04

  	
  Employer Direction of
  Investment

  	
  29

  
	
  7.05

  	
  Evidence

  	
  29

  
	
  7.06

  	
  Plan Contributions

  	
  29

  
	
  7.07

  	
  Employer Action

  	
  29

  
	
  7.08

  	
  Fiduciaries Not Insurers

  	
  29

  
	
  7.09

  	
  Plan Terms Binding

  	
  29

  
	
  7.10

  	
  Word Usage

  	
  29

  
	
  7.11

  	
  State Law

  	
  29

  
	
  7.12

  	
  Prototype Plan Status

  	
  29

  
	
  7.13

  	
  Employment Not Guaranteed

  	
  30

  
	
  ARTICLE VIII, PARTICIPANT
  ADMINISTRATIVE PROVISIONS

  	
   

  
	
  8.01

  	
  Beneficiary Designation

  	
  31

  
	
  8.02

  	
  No Beneficiary
  Designation/Death of Beneficiary

  	
  31

  
	
  8.03

  	
  Assignment or Alienation

  	
  31

  

 

© Copyright 2001 CPI
Qualified Plan Consultants, Inc.

 

i

 

	
  8.04

  	
  Information Available

  	
  31

  
	
  8.05

  	
  Claims Procedure for Denial
  of Benefits

  	
  32

  
	
  8.06

  	
  Participant Direction of
  Investment

  	
  32

  
	
  ARTICLE IX, PLAN
  ADMINISTRATOR

  	
   

  
	
  9.01

  	
  Compensation and Expenses

  	
  33

  
	
  9.02

  	
  Resignation and Removal

  	
  33

  
	
  9.03

  	
  General Powers and Duties

  	
  33

  
	
  9.04

  	
  Plan Loans

  	
  33

  
	
  9.05

  	
  Funding Policy

  	
  33

  
	
  9.06

  	
  Individual Accounts

  	
  33

  
	
  9.07

  	
  Value of Participant’s
  Account Balance

  	
  34

  
	
  9.08

  	
  Allocation and Distribution
  of Net Income, Gain or Loss

  	
  34

  
	
  9.09

  	
  Individual Statement

  	
  35

  
	
  9.10

  	
  Account Charged

  	
  35

  
	
  9.11

  	
  Lost Participants

  	
  35

  
	
  9.12

  	
  Plan Correction

  	
  36

  
	
  9.13

  	
  No Responsibility for
  Others

  	
  36

  
	
  9.14

  	
  Notice, Designation,
  Election, Consent and Waiver

  	
  36

  
	
  ARTICLE X, TRUSTEE AND
  CUSTODIAN, POWERS AND DUTIES

  	
   

  
	
  10.01

  	
  Acceptance

  	
  37

  
	
  10.02

  	
  Receipt of Contributions

  	
  37

  
	
  10.03

  	
  Investment Powers

  	
  37

  
	
  10.04

  	
  Records and Statements

  	
  40

  
	
  10.05

  	
  Fees and Expenses from Fund

  	
  40

  
	
  10.06

  	
  Parties to Litigation

  	
  41

  
	
  10.07

  	
  Professional Agents

  	
  41

  
	
  10.08

  	
  Distribution of Cash or
  Property

  	
  41

  
	
  10.09

  	
  Participant or Beneficiary
  Incapacitated

  	
  41

  
	
  10.10

  	
  Distribution Directions

  	
  41

  
	
  10.11

  	
  Third Party Reliance

  	
  41

  
	
  10.12

  	
  Multiple Trustees

  	
  41

  
	
  10.13

  	
  Resignation and Removal

  	
  41

  
	
  10.14

  	
  Successor Trustee
  Acceptance

  	
  42

  
	
  10.15

  	
  Valuation of Trust

  	
  42

  
	
  10.16

  	
  Limitation on Liability -
  If Investment Manager, Ancillary Trustee or Independent Fiduciary Appointed

  	
  42

  
	
  10.17

  	
  Investment in Group Trust
  Fund

  	
  42

  
	
  10.18

  	
  Appointment of Ancillary Trustee
  or Independent Fiduciary

  	
  42

  
	
  ARTICLE XI, PROVISIONS
  RELATING TO INSURANCE AND INSURANCE COMPANY

  	
   

  
	
  11.01

  	
  Insurance Benefit

  	
  44

  
	
  11.02

  	
  Limitation on Life
  Insurance Protection

  	
  44

  
	
  11.03

  	
  Definitions

  	
  45

  
	
  11.04

  	
  Dividend Plan

  	
  45

  
	
  11.05

  	
  Insurance Company Not a
  Party to Agreement

  	
  45

  
	
  11.06

  	
  No Responsibility for
  Others

  	
  45

  
	
  11.07

  	
  Duties of Insurance Company

  	
  45

  
	
  ARTICLE XII, TOP-HEAVY
  PROVISIONS

  	
   

  
	
  12.01

  	
  Determination of Top-Heavy
  Status

  	
  46

  
	
  12.02

  	
  Definitions

  	
  46

  
	
  12.03

  	
  Top-Heavy Minimum
  Allocation

  	
  47

  
	
  12.04

  	
  Determining Top-Heavy
  Contribution Rates

  	
  47

  
	
  12.05

  	
  Plan Which Will Satisfy
  Top-Heavy

  	
  47

  
	
  12.06

  	
  Top-Heavy Vesting

  	
  47

  
	
  ARTICLE XIII, EXCLUSIVE
  BENEFIT, AMENDMENT, TERMINATION

  	
   

  
	
  13.01

  	
  Exclusive Benefit

  	
  48

  
	
  13.02

  	
  Amendment by Employer

  	
  48

  
	
  13.03

  	
  Amendment by Prototype Plan
  Sponsor

  	
  48

  
	
  13.04

  	
  Plan Termination or
  Suspension

  	
  49

  
	
  13.05

  	
  Full Vesting on Termination

  	
  49

  
	
  13.06

  	
  Post Termination Procedure
  and Distribution

  	
  49

  
	
  13.07

  	
  Merger/Direct Transfer

  	
  49

  
	
  ARTICLE XIV, CODE §401(k)
  AND CODE §401(m) ARRANGEMENTS

  	
   

  
	
  14.01

  	
  Application

  	
  51

  
	
  14.02

  	
  401(k) Arrangement

  	
  51

  
	
  14.03

  	
  Definitions

  	
  54

  
	
  14.04

  	
  Matching Contributions/
  Employee Contributions

  	
  55

  
	
  14.05

  	
  Deferral Deposit Timing/Employer
  Contribution Status

  	
  56

  
	
  14.06

  	
  Special Accounting and
  Allocation Provisions

  	
  56

  
	
  14.07

  	
  Annual Elective Deferral
  Limitation

  	
  57

  
	
  14.08

  	
  Actual Deferral Percentage
  (ADP) Test

  	
  57

  
	
  14.09

  	
  Actual Contribution
  Percentage (ACP) Test

  	
  58

  
	
  14.10

  	
  Multiple Use Limitation

  	
  60

  
	
  14.11

  	
  Distribution Restrictions

  	
  60

  
	
  14.12

  	
  Special Allocation and
  Valuation Rules

  	
  61

  

 

ii

 

CPI QUALIFIED PLAN CONSULTANTS, INC.

DEFINED CONTRIBUTION PROTOTYPE PLAN AND TRUST

BASIC PLAN DOCUMENT # 01

 

CPI Qualified Plan
Consultants, Inc., in
its capacity as Prototype Plan Sponsor, establishes this Prototype Plan
intended to conform to and qualify under §401 and §501 of the Internal Revenue
Code of 1986, as amended. An Employer establishes a Plan and Trust under this
Prototype Plan by executing an Adoption Agreement. If the Employer adopts this
Plan as a restated Plan in substitution for, and in amendment of, an existing
plan, the provisions of this Plan, as a restated Plan, apply solely to an
Employee whose employment with the Employer terminates on or after the restated
Effective Date of the Plan. If an Employee’s employment with the Employer terminates
prior to the restated Effective Date, that Employee is entitled to benefits
under the Plan as the Plan existed on the date of the Employee’s termination of
employment.

 

ARTICLE I

DEFINITIONS

 

1.01 “Account” means the separate Account(s)
which the Plan Administrator or the Trustee maintains under the Plan for a
Participant.

 

1.02 “Account Balance” or “Accrued Benefit”
means the amount standing in a Participant’s Account(s) as of any date derived
from Employer contributions and from Participant contributions, if any.

 

1.03 “Accounting Date” means the last day of the
Plan Year. The Plan Administrator will allocate Employer contributions and
forfeitures for a particular Plan Year as of the Accounting Date of that Plan
Year, and on such other dates, if any, as the Plan Administrator determines,
consistent with the Plan’s allocation conditions and other provisions.

 

1.04 “Adoption Agreement” means the document
executed by each Employer adopting this Plan. References to Adoption Agreement
within this basic plan document are to the Adoption Agreement as completed and
executed by a particular Employer unless the context clearly indicates
otherwise. An adopting Employer’s Adoption Agreement and this basic plan
document together constitute a single Plan and Trust of the Employer. Each
elective provision of the Adoption Agreement corresponds (by its parenthetical
section reference) to the section of the Plan which grants the election. Each
Adoption Agreement offered under this Plan is either a Nonstandardized Plan or
a Standardized Plan, as identified in that Adoption Agreement. The provisions
of this Plan apply in the same manner to Nonstandardized Plans and to
Standardized Plans unless otherwise specified. All section references within an
Adoption Agreement are Adoption Agreement section references unless the context
clearly indicates otherwise.

 

1.05 “Beneficiary” means a person designated by
a Participant or by the Plan who is or may become entitled to a benefit under
the Plan. A Beneficiary who becomes entitled to a benefit under the Plan
remains a Beneficiary under the Plan until the Trustee has fully distributed to
the Beneficiary his/her Plan benefit. A Beneficiary’s right to (and the Plan
Administrator’s or a Trustee’s duty to provide to the Beneficiary) information
or data concerning the Plan does not arise until the Beneficiary first becomes
entitled to receive a benefit under the Plan.

 

1.06 “Code” means the Internal Revenue Code of
1986, as amended and includes applicable Treasury regulations.

 

1.07 “Compensation” means a Participant’s W-2
wages, Code §3401(a) wages, or 415 compensation except, in the case of a
Self-Employed Individual, Compensation means Earned Income as defined in
Section 1.09. The Employer in its Adoption Agreement must specify which definition
of Compensation (Section 1.07(A), (B) or (C)) applies under the Plan and any
modifications thereto, for purposes of contribution allocations under Article
III.

 

Any reference in the Plan to
Compensation is a reference to the definition in this Section 1.07, unless the
Plan reference, or the Employer in its Adoption Agreement, modifies this
definition. The Plan Administrator will take into account only Compensation
actually paid during (or as permitted under the Code, paid for) the relevant
period. A Compensation payment includes Compensation paid by the Employer
through another person under the common paymaster provisions in Code §§3121 and
3306. Compensation, unless otherwise specified in the Adoption Agreement, does
not include any form of remuneration (including severance pay and vacation pay)
paid to the Participant after the Participant incurs a Separation from Service.

 

(A) W-2
Wages. W-2 wages
means wages for federal income tax withholding purposes, as defined under Code
§3401(a), plus all other payments to an Employee in the course of the
Employer’s trade or business, for which the Employer must furnish the Employee
a written statement under Code §§6041, 6051 and 6052, but determined without
regard to any rules that limit the remuneration included in wages based on the
nature or location of the employment or services performed (such as the
exception for agricultural labor in Code §3401(a)(2)).

 

(B) Code
§3401(a) Wages. Code
§3401(a) wages means wages within the meaning of Code §3401(a) for the purposes
of income tax withholding at the source, but determined without regard to any
rules that limit the remuneration included in wages based on the nature or the
location of the employment or the services performed (such as the exception for
agricultural labor in Code §3401(a)(2)).

 

(C) Code
§415 Compensation (current income definition). Code §415 compensation means the Employee’s
wages, salaries, fees for professional service and other amounts received for
personal services actually rendered in the course of employment with the
Employer maintaining the Plan to the extent that the amounts are includible in
gross income (including, but not limited to, commissions paid salespersons,
compensation for services

 

1

 

on the basis of a percentage
of profits, commissions on insurance premiums, tips, bonuses, fringe benefits
and reimbursements or other expense allowances under a nonaccountable plan as
described in Treas. Reg. §1.62-2(c)).

 

Code §415 compensation does
not include:

 

(a) Employer
contributions to a plan of deferred compensation to the extent the
contributions are not included in the gross income of the Employee for the
taxable year in which contributed, Employer contributions on behalf of an
Employee to a Simplified Employee Pension Plan to the extent such contributions
are excludible from the Employee’s gross income, and any distributions from a
plan of deferred compensation, regardless of whether such amounts are
includible in the gross income of the Employee when distributed.

 

(b) Amounts realized
from the exercise of a non-qualified stock option, or when restricted stock (or
property) held by an Employee either becomes freely transferable or is no
longer subject to a substantial risk of forfeiture.

 

(c) Amounts realized
from the sale, exchange or other disposition of stock acquired under a stock
option described in Part II, Subchapter D, Chapter 1, Subtitle A of the Code.

 

(d) Other amounts which
receive special tax benefits, such as premiums for group term life insurance
(but only to the extent that the premiums are not includible in the gross
income of the Employee), or contributions made by an Employer (whether or not
under a salary reduction agreement) toward the purchase of an annuity contract
described in Code §403(b) (whether or not the contributions are excludible from
the gross income of the Employee).

 

(D) Elective
Contributions.
Compensation under Sections 1.07(A), 1.07(B) and 1.07(C) includes Elective
Contributions unless the Employer in its Adoption Agreement elects to exclude
Elective Contributions. “Elective Contributions” are amounts excludible from
the Employee’s gross income under Code §§125, 132(f)(4), 402(e)(3), 402(h)(2),
403(b), 408(p) or 457, and contributed by the Employer, at the Employee’s
election, to a cafeteria plan, a qualified transportation fringe benefit plan,
a 401(k) arrangement, a SARSEP, a tax-sheltered annuity, a SIMPLE plan or a
Code §457 plan. Notwithstanding the preceding sentence, amounts described in
§132(f)(4) are not Elective Contributions until Plan Years beginning on or
after January 1, 2001, unless the Plan Administrator operationally has included
such amounts effective as of an earlier Plan Year beginning no earlier than
January 1, 1998.

 

(E) Compensation
Dollar Limitation.
For any Plan Year, the Plan Administrator in allocating contributions under
Article III or in testing the Plan for nondiscrimination, cannot take into
account more than $150,000 (or such larger or smaller amount as the
Commissioner of Internal Revenue may prescribe) of any Participant’s
Compensation. Notwithstanding the foregoing, an Employee under a 401(k)
arrangement may make elective deferrals with respect to Compensation which
exceeds the Plan Year Compensation limitation, provided such deferrals
otherwise satisfy Code §402(g) and other applicable limitations.

 

(F) Nondiscrimination. For purposes of determining whether the Plan
discriminates in favor of Highly Compensated Employees, Compensation means
Compensation as defined in this Section 1.07, except: (1) the Employer annually
may elect operationally to include or to exclude Elective Contributions,
irrespective of the Employer’s election in its Adoption Agreement regarding
Elective Contributions; and (2) the Plan Administrator will disregard any
elections made in the “modifications to Compensation definition” section of
Adoption Agreement Section 1.07. The Employer’s election described in clause
(1) must be consistent and uniform with respect to all Employees and all plans
of the Employer for any particular Plan Year. The Employer, irrespective of
clause (2), may elect to exclude from this nondiscrimination definition of
Compensation any items of Compensation excludible under Code §414(s) and the
applicable Treasury regulations, provided such adjusted definition conforms to
the nondiscrimination requirements of those regulations. Furthermore, for
nondiscrimination purposes, including the computation of an Employee’s actual
deferral percentage (“ADP”) or actual contribution percentage (“ACP”), the Plan
Administrator may limit Compensation taken into account to Compensation
received only for the portion of the Plan Year in which the Employee was a
Participant and only for the portion of the Plan Year in which the Plan or the
401(k) arrangement was in effect.

 

1.08 “Disability” means the Participant, because
of a physical or mental disability, will be unable to perform the duties of
his/her customary position of employment (or is unable to engage in any
substantial gainful activity) for an indefinite period which the Plan
Administrator considers will be of long continued duration. A Participant also
is disabled if he/she incurs the permanent loss or loss of use of a member or
function of the body, or is permanently disfigured, and incurs a Separation
from Service. A Participant is disabled on the date the Plan Administrator
determines the Participant satisfies the definition of Disability. The Plan
Administrator may require a Participant to submit to a physical examination in
order to confirm Disability. The Plan Administrator will apply the provisions
of this Section 1.08 in a nondiscriminatory, consistent and uniform manner. The
Employer may provide an alternative definition of Disability in an Addendum to
its Adoption Agreement.

 

1.09 “Earned Income” means net earnings from
self-employment in the trade or business with respect to which the Employer has
established the Plan, provided personal services of the Self-Employed
Individual are a material income producing factor. The Plan Administrator will
determine net earnings without regard to items excluded from gross income and
the deductions allocable to those items. The Plan Administrator will determine
net earnings after the deduction allowed to the Self-Employed Individual for
all contributions made by the Employer to a qualified plan and after the
deduction allowed to the Self-Employed Individual under Code §164(f) for
self-employment taxes.

 

2

 

1.10 “Effective Date” of this Plan is the date
specified in the Adoption Agreement unless otherwise for a specified purpose
provided within this basic plan document or within (as part of the Adoption
Agreement) a Participation Agreement, an Addendum, or within Appendices A or B.

 

1.11 “Employee” means any common law employee,
Self-Employed Individual, Leased Employee or other person the Code treats as an
employee of the Employer for purposes of the Employer’s qualified plan. The
Employer in its Adoption Agreement must elect or specify any Employee, or class
of Employees, not eligible to participate in the Plan (an “excluded Employee”).

 

(A) Collective
Bargaining Employees. If
the Employer elects in its Adoption Agreement to exclude collective bargaining
Employees from eligibility to participate, the exclusion applies to any
Employee included in a unit of Employees covered by an agreement which the
Secretary of Labor finds to be a collective bargaining agreement between
employee representatives and one or more employers, if: (1) retirement benefits
were the subject of good faith bargaining; and (2) two percent or less of the
employees covered by the agreement are “professionals” as defined in Treas.
Reg. §1.410(b)-9, unless the collective bargaining agreement requires the
Employee to be included within the Plan. The term “employee representatives”
does not include any organization more than half the members of which are
owners, officers, or executives of the Employer.

 

(B) Nonresident
Aliens. If the
Employer elects in its Adoption Agreement to exclude nonresident aliens from
eligibility to participate, the exclusion applies to any nonresident alien
Employee who does not receive any earned income, as defined in Code §911(d)(2),
from the Employer which constitutes United States source income, as defined in
Code §861(a)(3).

 

(C) Reclassified
Employees. If the
Employer elects in its Adoption Agreement to exclude reclassified Employees
from eligibility to participate, the exclusion applies to any person the
Employer does not treat as an Employee (including, but not limited to,
independent contractors, persons the Employer pays outside of its payroll
system and out-sourced workers) for federal income tax withholding purposes
under Code §3401(a), but for whom there is a binding determination the
individual is an Employee or a Leased Employee of the Employer.

 

1.12 “Employer” means each employer who
establishes a Plan under this Prototype Plan by executing an Adoption Agreement
and includes to the extent described in Section 1.26 a Related Employer and a
Participating Employer. The Employer for purposes of acting as Plan
Administrator, making Plan amendments, terminating the Plan or performing other
ERISA settlor functions, means the signatory Employer to the Adoption Agreement
Execution Page and does not include any Related Employer or Participating
Employer.

 

1.13 “ERISA” means the Employee Retirement
Income Security Act of 1974, as amended, and includes applicable Department of
Labor regulations.

 

1.14 “Highly Compensated Employee” means an
Employee who:

 

(a) during the Plan
Year or during the preceding Plan Year, is a more than 5% owner of the Employer
(applying the constructive ownership rules of Code §318, and applying the
principles of Code §318, for an unincorporated entity); or

 

(b) during the
preceding Plan Year had Compensation in excess of $80,000 (as adjusted by the
Commissioner of Internal Revenue for the relevant year) and, if the Employer
under its Adoption Agreement Appendices A or B, makes the top-paid group election, was part of the
top-paid 20% group of Employees (based on Compensation for the preceding Plan
Year).

 

For purposes of this Section
1.14, “Compensation” means Compensation as defined in Section 1.07, except any
exclusions from Compensation the Employer elects in Adoption Agreement Section
1.07 do not apply, and Compensation specifically includes Elective
Contributions. The Plan Administrator must make the determination of who is a
Highly Compensated Employee, including the determinations of the number and
identity of the top-paid 20% group, consistent with Code §414(q) and
regulations issued under that Code section. The Employer in its Adoption
Agreement Appendices A or B may make a calendar year data election to determine
the Highly Compensated Employees for the Plan Year, as prescribed by Treasury regulations
or by other guidance published in the Internal Revenue Bulletin. A calendar
year data election must apply to all plans of the Employer which reference the
highly compensated employee definition in Code §414(q). For purposes of this
Section 1.14, if the current Plan Year is the first year of the Plan, then the
term “preceding Plan Year” means the 12-consecutive month period immediately
preceding the current Plan Year.

 

1.15 “Hour of Service” means:

 

(a) Each Hour of
Service for which the Employer, either directly or indirectly, pays an
Employee, or for which the Employee is entitled to payment, for the performance
of duties. The Plan Administrator credits Hours of Service under this Paragraph
(a) to the Employee for the computation period in which the Employee performs
the duties, irrespective of when paid;

 

(b) Each Hour of
Service for back pay, irrespective of mitigation of damages, to which the
Employer has agreed or for which the Employee has received an award. The Plan
Administrator credits Hours of Service under this Paragraph (b) to the Employee
for the computation period(s) to which the award or the agreement pertains
rather than for the computation period in which the award, agreement or payment
is made; and

 

(c) Each Hour of
Service for which the Employer, either directly or indirectly, pays an
Employee, or for which the Employee is entitled to payment (irrespective of
whether the employment relationship is terminated), for reasons other than for
the

 

3

 

performance of duties during
a computation period, such as leave of absence, vacation, holiday, sick leave,
illness, incapacity (including disability), layoff, jury duty or military duty.
The Plan Administrator will credit no more than 501 Hours of Service under this
Paragraph (c) to an Employee on account of any single continuous period during
which the Employee does not perform any duties (whether or not such period
occurs during a single computation period). The Plan Administrator credits Hours
of Service under this Paragraph (c) in accordance with the rules of paragraphs
(b) and (c) of Labor Reg. §2530.200b-2, which the Plan, by this reference,
specifically incorporates in full within this Paragraph (c).

 

The Plan Administrator will
not credit an Hour of Service under more than one of the above Paragraphs (a),
(b) or (c). A computation period for purposes of this Section 1.15 is the Plan
Year, Year of Service period, Break in Service period or other period, as
determined under the Plan provision for which the Plan Administrator is
measuring an Employee’s Hours of Service. The Plan Administrator will resolve
any ambiguity with respect to the crediting of an Hour of Service in favor of
the Employee.

 

(A) Method
of Crediting Hours of Service. The Employer must elect in its Adoption Agreement the method the Plan
Administrator will use in crediting an Employee with Hours of Service and the
purpose for which the elected method will apply.

 

(B) Actual
Method. Under the
Actual Method as determined from records, an Employee receives credit for Hours
of Service for hours worked and hours for which the Employer makes payment or
for which payment is due from the Employer.

 

(C) Equivalency
Method. Under an
Equivalency Method, for each equivalency period for which the Plan
Administrator would credit the Employee with at least one Hour of Service, the
Plan Administrator will credit the Employee with: (i) 10 Hours of Service for a
daily equivalency; (ii) 45 Hours of Service for a weekly equivalency; (iii) 95
Hours of Service for a semimonthly payroll period equivalency; and (iv) 190
Hours of Service for a monthly equivalency.

 

(D) Elapsed
Time Method. Under
the Elapsed Time Method, an Employee receives credit for Service for the
aggregate of all time periods (regardless of the Employee’s actual Hours of
Service) commencing with the Employee’s Employment Commencement Date, or with
his/her Reemployment Commencement Date, and ending on the date a Break in
Service begins. An Employee’s Employment Commencement Date or his/her
Re-employment Commencement Date begins on the first day he/she performs an Hour
of Service following employment or re-employment. In applying the Elapsed Time
Method, the Plan Administrator will credit an Employee’s Service for any Period
of Severance of less than 12-consecutive months and will express fractional
periods of Service in days.

 

Under the Elapsed Time
Method, a Break in Service is a Period of Severance of at least 12 consecutive
months. A Period of Severance is a continuous period of time during which the
Employee is not employed by the Employer. The continuous period begins on the
date the Employee retires, quits, is discharged, or dies or if earlier, the
first 12-month anniversary of the date on which the Employee otherwise is
absent from Service for any other reason (including disability, vacation, leave
of absence, layoff, etc.). In the case of an Employee who is absent from work
for maternity or paternity reasons, the 12-consecutive month period beginning
on the first anniversary of the first date the Employee is otherwise absent
from Service does not constitute a Break in Service.

 

(E) Maternity/Paternity
Leave/Family and Medical Leave Act. Solely for purposes of determining whether an Employee incurs a Break
in Service under any provision of this Plan, the Plan Administrator must credit
Hours of Service during the Employee’s unpaid absence period: (i) due to
maternity or paternity leave; or (ii) as required under the Family and Medical
Leave Act. An Employee is on maternity or paternity leave if the Employee’s
absence is due to the Employee’s pregnancy, the birth of the Employee’s child,
the placement with the Employee of an adopted child, or the care of the
Employee’s child immediately following the child’s birth or placement. The Plan
Administrator credits Hours of Service under this Section 1.15(E) on the basis
of the number of Hours of Service for which the Employee normally would receive
credit or, if the Plan Administrator cannot determine the number of Hours of
Service the Employee would receive credit for, on the basis of 8 hours per day
during the absence period. The Plan Administrator will credit only the number
(not exceeding 501) of Hours of Service necessary to prevent an Employee’s
Break in Service. The Plan Administrator credits all Hours of Service described
in this Section 1.15(E) to the computation period in which the absence period
begins or, if the Employee does not need these Hours of Service to prevent a
Break in Service in the computation period in which his/her absence period
begins, the Plan Administrator credits these Hours of Service to the
immediately following computation period.

 

(F) Qualified
Military Service.
Hour of Service also includes any Service the Plan must credit for
contributions and benefits in order to satisfy the crediting of Service
requirements of Code §414(u). The provisions of this Section 1.15(F) apply
beginning December 12, 1994, or if the Employer’s Plan is effective after that
date, as of the Plan’s Effective Date.

 

1.16 “Leased Employee” means an individual (who
otherwise is not an Employee of the Employer) who, pursuant to an agreement
between the Employer and any other person, has performed services for the
Employer (or for the Employer and any persons related to the Employer within
the meaning of Code §144(a)(3)) on a substantially full time basis for at least
one year and who performs such services under primary direction or control of
the Employer within the meaning of Code §414(n)(2). Except as described in
Section 1.16(A), a Leased Employee is an Employee for purposes of the Plan. If
a Leased Employee is an Employee, “Compensation” includes Compensation from the
leasing organization which is attributable to services performed for the
Employer.

 

4

 

(A) Safe
Harbor Plan Exception.
A Leased Employee is not an Employee if the leasing organization covers the
employee in a safe harbor plan and, prior to application of this safe harbor
plan exception, 20% or less of the Employer’s Employees (other than Highly
Compensated Employees) are Leased Employees. A safe harbor plan is a money
purchase pension plan providing immediate participation, full and immediate
vesting, and a nonintegrated contribution formula equal to at least 10% of the
employee’s compensation, without regard to employment by the leasing
organization on a specified date. The safe harbor plan must determine the 10%
contribution on the basis of compensation as defined in Code §415(c)(3)
including Elective Contributions.

 

(B) Other
Requirements. The
Plan Administrator must apply this Section 1.16 in a manner consistent with
Code §§414(n) and 414(o) and the regulations issued under those Code
sections. If a Participant is a Leased Employee covered by a plan maintained by
the leasing organization, the Plan Administrator will determine the allocation
of Employer contributions and Participant forfeitures on behalf of the
Participant under the Employer’s Plan without taking into account the Leased
Employee’s allocation, if any, under the leasing organization’s plan.

 

1.17 “Nonhighly Compensated Employee” means any
Employee who is not a Highly Compensated Employee.

 

1.18 “Nontransferable Annuity” means an annuity
contract which by its terms provides that it may not be sold, assigned,
discounted, pledged as collateral for a loan or security for the performance of
an obligation or for any purpose to any person other than the insurance
company. If the Plan distributes an annuity contract, the contract must be a
Nontransferable Annuity.

 

1.19 “Paired Plans” means the Employer has
adopted two Standardized Plan Adoption Agreements offered with this Prototype
Plan, one Adoption Agreement being a Paired Profit Sharing Plan and one
Adoption Agreement being a Paired Pension Plan. A Paired Profit Sharing Plan
may include a 401(k) arrangement. A Paired Pension Plan must be a money
purchase pension plan, defined benefit plan or a target benefit pension plan.
Paired Plans must be the subject of a favorable opinion letter issued by the
National Office of the Internal Revenue Service. If an Employer adopts paired
plans, only one of the plans may provide for permitted disparity.

 

1.20 “Participant” means an eligible Employee
who becomes a Participant in accordance with the provisions of Section 2.01. An
eligible Employee means an Employee who is not an excluded Employee under
Adoption Agreement Section 1.11.

 

1.21 “Plan” means the retirement plan
established or continued by the Employer in the form of this Prototype Plan,
including the Adoption Agreement under which the Employer has elected to
establish this Plan. The Employer must designate the name of the Plan in its
Adoption Agreement. An Employer may execute more than one Adoption Agreement
offered under this Plan, each of which will constitute a separate Plan and
Trust established or continued by that Employer. The Plan and the Trust created
by each adopting Employer is a separate Plan and a separate Trust, independent
from the plan and the trust of any other employer adopting this Prototype Plan.
All section references within this basic plan document are Plan section
references unless the context clearly indicates otherwise. The Plan includes
any Addendum or Appendix permitted by the basic plan document or by the
Employer’s Adoption Agreement and which the Employer attaches to its Adoption
Agreement. An Addendum must correspond by section reference to the section of
the basic plan document or Adoption Agreement permitting the Addendum.

 

1.22 “Plan Administrator” means the Employer
unless the Employer designates another person or persons to hold the position
of Plan Administrator. Any person(s) the Employer appoints as Plan
Administrator may or may not be Participants in the Plan. In addition to its
other duties, the Plan Administrator has full responsibility for the Plan’s
compliance with the reporting and disclosure rules under ERISA.

 

1.23 “Plan Entry Date” means the date(s) the
Employer elects in Adoption Agreement Section 2.01.

 

1.24 “Plan Year” means the consecutive month
period the Employer specifies in its Adoption Agreement. The Employer also must
specify in its Adoption Agreement the “Limitation Year” applicable to the
limitations on allocations described in Article III. If the Employer maintains
Paired Plans, each Plan must have the same Plan Year.

 

1.25 “Protected Benefit” means any accrued
benefit described in Treas. Reg. §1.411(d)-4, including any optional form of
benefit provided under the Plan which may not (except in accordance with such
Regulations) be reduced, eliminated or made subject to Employer discretion.

 

1.26 “Related Group”/”Related Employer” A
Related Group is a controlled group of corporations (as defined in Code §414(b)),
trades or businesses (whether or not incorporated) which are under common
control (as defined in Code §414(c)), an affiliated service group (as defined
in Code §414(m)) or an arrangement otherwise described in Code §414(o). Each
Employer/member of the Related Group is a Related Employer. The term “Employer”
includes every Related Employer for purposes of crediting Service and Hours of
Service, determining Years of Service and Breaks in Service under Articles II
and V, determining Separation from Service, applying the Coverage Test under
Section 3.06(E), applying the limitations on allocations in Part 2 of Article
III, applying the top-heavy rules and the minimum allocation requirements of
Article XII, applying the definitions of Employee, Highly Compensated Employee,
Compensation and Leased Employee, applying the safe harbor 401(k) provisions of
Section 14.02(D), applying the SIMPLE 401(k) provisions of Section 14.02(E) and
for any other purpose the Code or the Plan require.

 

(A) Participating
Employer. An Employer
may contribute to the Plan only by being a signatory to the Execution Page of
the Adoption Agreement or to a Participation Agreement to the Adoption
Agreement. If a

 

5

 

Related Employer executes a
Participation Agreement to the Adoption Agreement, the Related Employer is a
Participating Employer. A Participating Employer is an Employer for all
purposes of the Plan except as provided in Section 1.12.

 

(B) Standardized/Nonstandardized
Plan. If the
Employer’s Plan is a Standardized Plan, all Employees of the Employer or of any
Related Employer, are eligible to participate in the Plan, irrespective of
whether the Related Employer directly employing the Employee is a Participating
Employer. Notwithstanding the immediately preceding sentence, individuals who
become Employees of a Related Employer as a result of a transaction described
in Code §410(b)(6)(C) are not eligible to participate in the Plan during the
Plan Year in which such transaction occurs nor in the following Plan Year,
unless the Related Employer which employs such Employees becomes during such
period a Participating Employer, by executing a Participation Agreement to the
Adoption Agreement. If the Plan is a Nonstandardized Plan, the Employees of a
Related Employer are not eligible to participate in the Plan unless the Related
Employer is a Participating Employer.

 

1.27 “Self-Employed Individual”/ “Owner- Employee”/“Shareholder-Employee”
“Self-Employed Individual” means an individual who has Earned Income (or who
would have had Earned Income but for the fact that the trade or business did
not have net profits) for the taxable year from the trade or business for which
the Plan is established. “Owner-Employee” means a Self-Employed Individual who
is the sole proprietor in the case of a sole proprietorship. If the Employer is
a partnership, or a limited liability company taxed for federal income tax
purposes as a partnership, “Owner-Employee” means a Self-Employed Individual
who is a partner or member and owns more than 10% of either the capital or the
profits interest of the partnership or of the limited liability company.
“Shareholder-Employee” means an employee or officer of an “S” corporation who
owns (or is considered as owning under Code §318(a)(1)) more than 5% of the
outstanding stock of the corporation on any day of the corporation’s taxable
year.

 

1.28 “Separation from Service” means an event
after which the Employee no longer has an employment relationship with the
Employer maintaining this Plan or with a Related Employer.

 

1.29 “Service” means any period of time the
Employee is in the employ of the Employer, including any period the Employee is
on an unpaid leave of absence authorized by the Employer under a uniform,
nondiscriminatory policy applicable to all Employees.

 

1.30 “Service with a Predecessor Employer” If
the Employer maintains the plan of a predecessor employer, service of the
Employee with the predecessor employer is Service with the Employer. If the
Employer does not maintain the plan of a predecessor employer, the Plan does
not credit service with the predecessor employer, unless the Employer in its
Adoption Agreement (or in a Participation Agreement, if applicable) elects to
credit designated predecessor employer service and specifies the purposes for
which the Plan will credit service with that predecessor employer.

 

Unless the Employer under
its Adoption Agreement Section 2.01 provides for this purpose specific Plan
Entry Dates, an Employee who satisfies the Plan’s eligibility condition(s) by
reason of the crediting of predecessor service will enter the Plan in
accordance with the provisions of Section 2.04 as if the Employee were a
re-employed Employee on the first day the Plan credits predecessor service.

 

1.31 “Trust” means the separate Trust created
under the Plan.

 

1.32 “Trust Fund” means all property of every
kind acquired by the Plan and held by the Trust, other than incidental benefit
insurance contracts.

 

1.33 “Trustee” means the person or persons who
as Trustee execute the Adoption Agreement, or any successor in office who in
writing accepts the position of Trustee. The Employer must designate in its
Adoption Agreement whether the Trustee will administer the Trust as a
discretionary Trustee or as a nondiscretionary Trustee. If a person acts as a
discretionary Trustee, the Employer also may appoint a Custodian. See Article
X. If the Prototype Plan Sponsor is a bank, savings and loan association,
credit union, mutual fund, insurance company, or other institution qualified to
serve as Trustee, a person other than the Prototype Plan Sponsor (or its
affiliate) may not serve as Trustee or as Custodian of the Plan without the
written consent of the Prototype Plan Sponsor.

 

1.34 “Vested” means a Participant or a
Beneficiary has an unconditional claim, legally enforceable against the Plan,
to the Participant’s Account Balance or Accrued Benefit.

 

6

 

ARTICLE II

ELIGIBILITY AND PARTICIPATION

 

2.01 ELIGIBILITY.
Each eligible Employee becomes a Participant in the Plan in accordance with the
eligibility provisions the Employer elects in its Adoption Agreement. If this
Plan is a restated Plan, each Employee who was a Participant in the Plan on the
day before the restated Effective Date continues as a Participant in the
restated Plan, irrespective of whether he/she satisfies the eligibility
conditions of the restated Plan, unless the Employer provides otherwise in its
Adoption Agreement. If the Employer contributes to the Plan under a Davis-Bacon
contract, except as the contract provides, the Employer’s Adoption Agreement
elections imposing age and service eligibility conditions do not apply with
respect to an Employee performing Davis-Bacon contract Service.

 

2.02 AGE AND SERVICE
CONDITIONS. For purposes of an Employee’s participation in the Plan, the
Plan: (1) may not impose an age condition exceeding age 21; and (2) takes into
account all of the Employee’s Years of Service with the Employer, except as
provided in Section 2.03. “Year of Service” for purposes of an Employee’s
participation in the Plan, means a 12-consecutive month eligibility computation
period during which the Employee completes the number of Hours of Service (not
exceeding 1,000) the Employer specifies in its Adoption Agreement.

 

The initial eligibility
computation period is the first 12-consecutive month period measured from the
Employee’s Employment Commencement Date. The Plan measures succeeding
12-consecutive month eligibility computation periods in accordance with the
Employer’s election in its Adoption Agreement. If the Employer elects to
measure subsequent periods on a Plan Year basis, an Employee who receives
credit for the required number of Hours of Service during the initial
eligibility computation period and also during the first applicable Plan Year
receives credit for two Years of Service under Article II. “Employment
Commencement Date” means the date on which the Employee first performs an Hour
of Service for the Employer.

 

If the Employer under
Adoption Agreement Section 2.01 elects an alternative Service condition to one
Year of Service or two Years of Service, the Employer must elect in the
Adoption Agreement the Hour of Service and any other requirement(s), if any,
after the Employee completes one Hour of Service. Under any alternative Service
condition election, the Plan may not require an Employee to complete more than
one Year of Service (1,000 Hours of Service in 12-consecutive months) or two
Years of Service if applicable.

 

If the Employer in its
Adoption Agreement elects to apply the Equivalency Method or the Elapsed Time
Method in applying the Plan’s eligibility Service condition, the Plan
Administrator will credit Service in accordance with Sections 1.15(C) and (D).

 

2.03 BREAK IN SERVICE -
PARTICIPATION. An Employee incurs a “Break in Service” if during any
applicable 12-consecutive month period he/she does not complete more than 500
Hours of Service with the Employer. The “12-consecutive month period” under
this Section 2.03 is the same 12-consecutive month period for which the Plan
measures a “Year of Service” under Section 2.02. If the Plan applies the
Elapsed Time Method of crediting Service under Section 1.15(D), a Participant
incurs a “Break in Service” if the Participant has a Period of Severance of at
least 12 consecutive months.

 

(A) Two
Year Eligibility. If the Employer under Adoption Agreement Section
2.01 elects a two Years of Service condition for eligibility purposes, an
Employee who incurs a one year Break in Service prior to completing two Years
of Service is a new Employee on the date he/she first performs an Hour of
Service for the Employer after the Break in Service, and the Employee
establishes a new Employment Commencement Date for purposes of the initial
eligibility computation period under Section 2.02.

 

(B) One
Year Hold-Out Rule. The Employer must elect in its Adoption
Agreement whether to apply the one year hold-out rule under Code §410(a)(5)(C).
Under this rule, a Participant will incur a suspension of participation in the
Plan after incurring a one year Break in Service and the Plan disregards a
Participant’s Service completed prior to a Break in Service until the
Participant completes one Year of Service following the Break in Service. The
Plan suspends the Participant’s participation in the Plan as of the first day
of the Plan Year following the Plan Year in which the Participant incurs the
Break in Service. If the Participant completes one Year of Service following
his/her Break in Service, the Plan restores that Participant’s pre-Break
Service (and the Participant resumes active participation in the Plan)
retroactively to the first day of the computation period in which the
Participant first completes one Year of Service following his/her Break in
Service. The initial computation period under this Section 2.03(B) is the
12-consecutive month period measured from the date the Participant first
receives credit for an Hour of Service following the one year Break in Service.
The Plan measures any subsequent computation periods, if necessary, in a manner
consistent with the Employer’s eligibility computation period election in
Adoption Agreement Section 2.02. If the Employer elects to apply the one year
hold-out rule, the Employer also must elect in its Adoption Agreement whether
to limit application of the rule only to a Participant who has incurred a
Separation from Service.

 

The Plan Administrator also
will apply the one-year hold out rule, if applicable, to an Employee who
satisfies the Plan’s eligibility conditions but who incurs a Separation from
Service and a one year Break in Service prior to becoming a Participant.

 

This Section 2.03(B) does
not affect a Participant’s vesting credit under Article V and, during a
suspension period, the Participant’s Account continues to share fully in Trust
Fund allocations under Article IX. Furthermore, the Plan Administrator in
applying this Section 2.03(B) does not restore any Service disregarded under
the Break in Service rule of Section 2.03(A).

 

(C) No
Application to 401(k) Arrangement. If the Plan

 

7

 

includes a 401(k)
arrangement and the Employer in its Adoption Agreement elects to apply the
Section 2.03(B) one year hold-out rule, the Plan Administrator will apply the
provisions of Section 2.04 to the deferral contributions portion of the Plan
without regard to Section 2.03(B).

 

(D) No Rule
of Parity – Participation. For purposes of Plan participation, the Plan does not apply the “rule
of parity” under Code §410(a)(5)(D).

 

2.04 PARTICIPATION UPON
RE-EMPLOYMENT. A Participant who incurs a Separation from Service will
re-enter the Plan as a Participant on the date of his/her re-employment with
the Employer, subject to the one year hold-out rule, if applicable, under
Section 2.03(B). An Employee who satisfies the Plan’s eligibility conditions
but who incurs a Separation from Service prior to becoming a Participant will
become a Participant on the later of the Plan Entry Date on which he/she would
have entered the Plan had he/she not incurred a Separation from Service or the
date of his/her re-employment, subject to the one year hold-out rule, if
applicable, under Section 2.03(B). Any Employee who incurs a Separation from
Service prior to satisfying the Plan’s eligibility conditions becomes a
Participant in accordance with Adoption Agreement Section 2.01.

 

2.05 CHANGE IN EMPLOYMENT
STATUS. The Employer in its Adoption Agreement Section 1.11 may elect to
exclude certain Employees from Plan participation (“excluded Employees”). If a
Participant has not incurred a Separation from Service but becomes an excluded
Employee, during the period of exclusion the excluded Employee will not share
in the allocation of any Employer contributions or Participant forfeitures, and
may not make deferral contributions if the Plan includes a 401(k) arrangement,
with respect to Compensation paid to the excluded Employee during the period of
exclusion. However, during such period of exclusion, the Participant, without
regard to employment classification, continues to receive credit for vesting
under Article V for each included Year of Service and the Participant’s Account
continues to share fully in Trust Fund allocations under Article IX. If a
Participant who becomes an excluded Employee subsequently resumes status as an
eligible Employee, the Participant will participate in the Plan immediately
upon resuming eligible status, subject to the one year hold-out rule, if
applicable, under Section 2.03(B).

 

If an excluded Employee who
is not a Participant becomes an eligible Employee, he/she will participate
immediately in the Plan if he/she has satisfied the eligibility conditions of
Adoption Agreement Section 2.01 and would have been a Participant had he/she
not been an excluded Employee during his/her period of Service. Furthermore,
the excluded Employee receives credit for vesting under Article V for each
included vesting Year of Service notwithstanding the Employee’s excluded
Employee status.

 

2.06 ELECTION NOT TO
PARTICIPATE. If the Plan is a Standardized Plan, the Plan does not permit
an otherwise eligible Employee nor any Participant to elect not to participate
in the Plan (“opt-out”). If the Plan is a Nonstandardized Plan, the Employer in
its Adoption Agreement must elect whether any eligible Employee may elect
irrevocably to opt-out. The Employee prior to his/her Plan Entry Date must file
an opt-out election in writing with the Plan Administrator on a form provided
by the Plan Administrator for this purpose.

 

8

 

ARTICLE III

EMPLOYER CONTRIBUTIONS AND FORFEITURES

 

Part 1. Amount
of Employer Contributions and Plan Allocations: Sections 3.01 through 3.06

 

3.01 EMPLOYER
CONTRIBUTIONS.

 

(A) Amount
and Types of Contribution. The Employer in its Adoption Agreement will elect the amount and
type(s) of Employer Plan contribution(s). The Employer will not make a
contribution to the Trust for any Plan Year to the extent the contribution
would exceed the Participants’ Maximum Permissible Amounts. Unless otherwise
provided in an Addendum to its Adoption Agreement, the Employer need not have
net profits to make a contribution under the Plan. If the Employer’s Plan is a
money purchase pension plan and the Employer also maintains a defined benefit
pension plan, notwithstanding the money purchase pension plan formula in the
Employer’s Adoption Agreement, the Employer’s required contribution to its
money purchase pension plan for a Plan Year is limited to the amount which the
Employer may deduct under Code §404(a)(7). If the Employer under Code
§404(a)(7) must reduce its money purchase pension plan contribution, the Plan
Administrator will reduce each Participant’s allocation in the same ratio as
the reduced total Employer contribution bears to the original (unreduced)
Employer contribution.

 

(B) Form
of Contribution/Related Employer. Subject to the consent of the Trustee, the Employer may make its
contribution in property instead of cash, provided the contribution of property
is not a prohibited transaction under the Code or under ERISA. Unless the
Employer in its Adoption Agreement makes a contrary election, the Plan
Administrator will allocate all Employer contributions and forfeitures without
regard to which contributing Related Employer directly employs the affected
Participants.

 

(C) Time
of Payment of Contribution. The Employer may pay its contribution for any Plan Year in one or more
installments without interest. Unless otherwise required by contract, by the
Code or by ERISA, the Employer may make its contribution to the Plan for a
particular Plan Year at such time(s) as the Employer in its sole discretion
determines. If the Employer makes a contribution for a particular Plan Year
after the close of that Plan Year, the Employer will designate in writing to
the Trustee the Plan Year for which the Employer is making its contribution.

 

(D) Return
of Employer Contribution. The Employer contributes to the Plan on the condition its contribution
is not due to a mistake of fact and the Internal Revenue Service will not
disallow the deduction of the Employer’s contribution. The Trustee, upon
written request from the Employer, must return to the Employer the amount of
the Employer’s contribution made by the Employer by mistake of fact or the
amount of the Employer’s contribution disallowed as a deduction under Code
§404. The Trustee will not return any portion of the Employer’s contribution
under the provisions of this Section 3.01(D) more than one year after:

 

(1) The Employer made
the contribution by mistake of fact; or

 

(2) The disallowance of
the contribution as a deduction, and then, only to the extent of the
disallowance.

 

The Trustee will not
increase the amount of the Employer contribution returnable under this Section
3.01(D) for any earnings attributable to the contribution, but the Trustee will
decrease the Employer contribution returnable for any losses attributable to
the contribution. The Trustee may require the Employer to furnish the Trustee
whatever evidence the Trustee deems necessary to enable the Trustee to confirm
the amount the Employer has requested be returned, is properly returnable under
ERISA.

 

3.02 DEFERRAL
CONTRIBUTIONS. If the Plan includes a 401(k) arrangement, the Employer in
its Adoption Agreement must elect the Plan limitations and restrictions, if
any, which apply to deferral contributions or to cash or deferred
contributions, if applicable. Under Adoption Agreement Section 3.02, for
purposes of applying any Plan limit the Employer has elected on deferral
contributions, the Employer must elect to take into account the Employee’s
entire Plan Year Compensation or to limit Compensation to the portion of the
Plan Year in which the Employee actually is a Participant.

 

3.03 MATCHING
CONTRIBUTIONS. If the Plan includes a 401(k) arrangement, the Employer in
its Adoption Agreement must elect the type(s) of matching contributions, the
time period applicable to any matching contribution formula, and as applicable,
the amount of matching contributions and the Plan limitations and restrictions,
if any, which apply to matching contributions.

 

3.04 EMPLOYER
CONTRIBUTION ALLOCATION.

 

(A) Method
of Allocation. The
Employer in its Adoption Agreement must specify, subject to this Section 3.04,
the manner of allocating Employer contributions to the Trust. For purposes of
this Section 3.04, Employer contributions include as applicable, the Employer’s
nonelective contributions, money purchase pension and target benefit contributions,
but do not include deferral contributions or, except under Section 3.04(B),
matching contributions.

 

(B) Compensation
Taken into Account.
The Employer in its Adoption Agreement Section 1.07 must specify the
Compensation the Plan Administrator is to take into account in allocating an
Employer contribution to a Participant’s Account. For the Plan Year in which
the Employee first becomes a Participant in the Plan (or in any portion of the
Plan), the Employer may elect to take into account the Employee’s entire Plan
Year Compensation or to limit Compensation to the portion of the Plan Year in
which the Employee actually is a Participant. For all other Plan Years, the
Plan Administrator will take into account only the Compensation determined for
the portion of the Plan Year in which the Employee actually is a Participant.
The Plan Administrator must take into account the Employee’s entire
Compensation for the Plan Year to determine whether the Plan satisfies the
top-heavy minimum allocation requirements of Article XII. The

 

9

 

Employer, in its Adoption
Agreement, may elect to measure Compensation for allocating its Employer
contribution for a Plan Year on the basis of a specified period other than the
Plan Year.

 

(C) Top-Heavy
Minimum Allocation.
Unless the Employer in an Addendum to its Adoption Agreement elects to satisfy
any top-heavy minimum allocation requirement in another plan (not maintained
under this basic plan document), the Employer in this Plan must satisfy the
top-heavy requirements of Article XII.

 

(D) Allocation
Conditions. Subject
to any restoration allocation required under the Plan, the Plan Administrator
will allocate and credit Employer contributions to the Account of each
Participant who satisfies the allocation conditions of Section 3.06.

 

(E) Alternative
Allocation Formulas.
The Plan Administrator will allocate Employer contributions for the Plan Year
or other applicable period in accordance with the allocation formula the
Employer elects in its Adoption Agreement. The Plan Administrator, in
allocating under any allocation formula which is based in whole or in part on
Compensation, only will take into account Compensation of those Participants
entitled to an allocation.

 

The Employer in its Adoption
Agreement must elect, one or more as applicable of the following allocation
formulas:

 

(1) Nonintegrated (pro rata) allocation formula.
The Plan Administrator will allocate the Employer contributions for a Plan Year
in the same ratio that each Participant’s Compensation for the Plan Year bears
to the total Compensation of all Participants for the Plan Year.

 

(2) Two-tiered permitted disparity allocation formula.
Under the first tier, the Plan Administrator will allocate the Employer
contributions for a Plan Year in the same ratio that each Participant’s
Compensation plus Excess Compensation (as defined in Adoption Agreement Section
3.04) for the Plan Year bears to the total Compensation plus Excess
Compensation of all Participants for the Plan Year. The allocation under this
first tier, as a percentage of each Participant’s Compensation plus Excess
Compensation, must not exceed the applicable percentage (5.7%, 5.4% or 4.3%)
listed under Section 3.04(E)(4).

 

Under the second tier, the
Plan Administrator will allocate any remaining Employer contributions for a
Plan Year in the same ratio that each Participant’s Compensation for the Plan
Year bears to the total Compensation of all Participants for the Plan Year.

 

(3) Four-tiered permitted disparity allocation formula.
Under the first tier, the Plan Administrator will allocate the Employer
contributions for a Plan Year in the same ratio that each Participant’s
Compensation for the Plan Year bears to the total Compensation of all
Participants for the Plan Year, but not exceeding 3% of each Participant’s
Compensation. Solely for purposes of this first tier allocation, a “Participant”
means, in addition to any Participant who satisfies the allocation conditions
of Section 3.06 for the Plan Year, any other Participant entitled to a
top-heavy minimum allocation under the Plan.

 

Under the second tier, the
Plan Administrator will allocate the Employer contributions for a Plan Year in
the same ratio that each Participant’s Excess Compensation (as defined in
Adoption Agreement Section 3.04) for the Plan Year bears to the total Excess
Compensation of all Participants for the Plan Year, but not exceeding 3% of
each Participant’s Excess Compensation.

 

Under the third tier, the
Plan Administrator will allocate the Employer contributions for a Plan Year in
the same ratio that each Participant’s Compensation plus Excess Compensation
for the Plan Year bears to the total Compensation plus Excess Compensation of
all Participants for the Plan Year. The allocation under this third tier, as a
percentage of each Participant’s Compensation plus Excess Compensation, must
not exceed the applicable percentage (2.7%, 2.4% or 1.3%) listed under Section
3.04(E)(4).

 

Under the fourth tier, the
Plan Administrator will allocate any remaining Employer contributions for a
Plan Year, in the same ratio that each Participant’s Compensation for the Plan
Year bears to the total Compensation of all Participants for the Plan Year.

 

(4) Maximum disparity table. For purposes of
the permitted disparity allocation formulas under this Section 3.04, the
applicable percentage is:

 

	
  Integration level %

  of taxable

  wage base

  	
   

  	
  Applicable %

  for 2-tiered

  formula

  	
   

  	
  Applicable %

  for 4-tiered

  formula

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  100%

  	
   

  	
  5.7

  	
  %

  	
  2.7

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  More than 80% but less than 100%

  	
   

  	
  5.4

  	
  %

  	
  2.4

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  More than 20% (but not less than $10,001)
  and not more than 80%

  	
   

  	
  4.3

  	
  %

  	
  1.3

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  20% (or $10,000, if greater) or less

  	
   

  	
  5.7

  	
  %

  	
  2.7

  	
  %

  

 

(5) Overall permitted disparity limits.

 

(i) Annual overall permitted disparity limit.
Notwithstanding Sections 3.04(E)(2) and (3), for any Plan Year the Plan
benefits any Participant who benefits under another qualified plan or under a
simplified employee pension plan (as defined in Code §408(k)) maintained by the
Employer that provides for permitted disparity (or imputes disparity), the Plan
Administrator will allocate Employer contributions to the Account of each
Participant in the same ratio that each Participant’s Compensation bears to the
total

 

10

 

Compensation of all
Participants for the Plan Year.

 

(ii) Cumulative permitted disparity limit.
Effective for Plan Years beginning after December 31, 1994, the cumulative
permitted disparity limit for a Participant is 35 total cumulative permitted
disparity years. “Total cumulative permitted disparity years” means the number
of years credited to the Participant for allocation or accrual purposes under
the Plan, any other qualified plan or simplified employee pension plan (whether
or not terminated) ever maintained by the Employer. For purposes of determining
the Participant’s cumulative permitted disparity limit, the Plan Administrator
will treat all years ending in the same calendar year as the same year. If the
Participant has not benefited under a defined benefit plan or under a target
benefit plan of the Employer for any year beginning after December 31, 1993,
the Participant does not have a cumulative permitted disparity limit.

 

For purposes of this Section
3.04(E)(5), a Participant “benefits” under the Plan for any Plan Year during
which the Participant receives, or is deemed to receive, a contribution
allocation in accordance with Treas. Reg. §1.410(b)-3(a).

 

(6) Uniform points allocation formula. The Plan
Administrator will allocate the Employer contributions for a Plan Year in the
same ratio that each Participant’s points (as elected in Adoption Agreement
Section 3.04) bear to the total points of all Participants for the Plan Year.

 

(7) Incorporation of contribution formula. The
Plan Administrator will allocate the Employer’s contributions for a Plan Year
in accordance with the contribution formula the Employer has elected under
Section 3.01.

 

(8) Target benefit allocation formula. The Plan
Administrator will allocate the Employer contributions for a Plan Year as
provided in the Employer’s target benefit Adoption Agreement.

 

(9) Davis-Bacon contract allocation formula. The
Plan Administrator will allocate the Employer contributions for a Plan Year in
accordance with the applicable Davis-Bacon contract pursuant to which the
Employer has made its contributions for the Plan Year. The Employer’s
contributions will take into account each Participant’s hourly rate, employment
category, employment classification and such other factors the Davis-Bacon
contract may specify. For purposes of the Plan, “Davis-Bacon contract” includes
a contract under any state prevailing wage law.

 

(F) Qualified
Nonelective Contributions. The Employer operationally may designate all or any portion of its
nonelective contributions as a qualified nonelective contribution. The
Employer, to facilitate the Plan Administrator’s correction of test failures
under Sections 14.08, 14.09 and 14.10, also may make qualified nonelective
contributions to the Plan irrespective of whether the Employer in its Adoption
Agreement has elected to provide nonelective contributions. The Employer in its
Adoption Agreement must elect whether the Plan Administrator will allocate the
Employer contributions designated as a qualified nonelective contribution to all
Participants or solely to Nonhighly Compensated Employee Participants. The
Employer operationally must elect whether the Plan Administrator will allocate
qualified nonelective contributions: (1) to eligible Participants pro rata in
relation to Compensation; (2) to eligible Participants in the same amount
without regard to Compensation (flat dollar); or (3) under the reverse
allocation or other similar method. Under the reverse allocation method, the
Plan Administrator, subject to Section 3.06, will allocate a qualified
nonelective contribution first to the Nonhighly Compensated Employee
Participant(s) with the lowest Compensation for the Plan Year not exceeding the
Maximum Permissible Amount for each Participant, with any remaining amounts
allocated to the next highest paid Nonhighly Compensated Employee
Participant(s) not exceeding his/her Maximum Permissible Amount and continuing
in this manner until the Plan Administrator has fully allocated the qualified
nonelective contribution.

 

(G) Qualified
Replacement Plan. The
Employer may establish or maintain this Plan as a qualified replacement plan as
described in Code §4980 under which the Plan may receive a transfer from a
terminating qualified plan the Employer also maintains. The Plan Administrator
will credit the transferred amounts to a suspense account under the Plan and
thereafter the Plan Administrator will allocate the transferred amounts under
this Section 3.04(G) in the same manner as the Plan Administrator allocates
Employer nonelective contributions, unless the Employer specifies in an
Addendum to its Adoption Agreement: (1) to apply such transferred amounts to
the Plan’s administrative expenses; or (2) if the Plan includes a 401(k)
arrangement, the Employer in its Addendum designates such transferred amounts
as matching contributions.

 

3.05 FORFEITURE
ALLOCATION. The amount of a Participant’s Account forfeited under the Plan
is a Participant forfeiture. The Plan Administrator, subject to Section 3.06,
will allocate Participant forfeitures at the time and in the manner the
Employer specifies in its Adoption Agreement. The Plan Administrator will
continue to hold the undistributed, non-Vested portion of the Account of a
Participant who has separated from Service solely for his/her benefit until a
forfeiture occurs at the time specified in Section 5.09 or if applicable, until
the time specified in Section 9.11. Except as provided under Section 5.04, a
Participant will not share in the allocation of a forfeiture of any portion of
his/her Account. If the Plan includes a 401(k) arrangement, the Plan
Administrator first will determine if a Participant’s forfeitures are
attributable to nonelective or to matching contributions, and the Plan
Administrator then will allocate the forfeitures in the manner the Employer has
elected in its Adoption Agreement. If the Employer elects to allocate
forfeitures to reduce nonelective or matching contributions and the forfeitures
exceed the amount of the contribution to which the Plan Administrator will
apply the forfeitures, the Plan Administrator will allocate the remaining
forfeitures as an additional discretionary nonelective or discretionary
matching contribution or the Plan Administrator will apply

 

11

 

the forfeitures to the
Employer’s nonelective or matching contribution in the succeeding Plan Year. A
Participant’s forfeiture is attributable to matching contributions if the
forfeiture is: (1) a non-Vested matching Account forfeited in accordance with
Section 5.09 or, if applicable, Section 9.11; (2) a non-Vested excess aggregate
contribution (adjusted for earnings) forfeited in correcting for
nondiscrimination failures under Section 14.09 or Section 14.10; or (3) an
“associated matching contribution,” which includes any Vested or non-Vested
matching contribution (adjusted for earnings) made with respect to elective
deferrals or Employee contributions the Plan Administrator distributes in
correction of Code §402(g), Code §415 or nondiscrimination failures under
Sections 14.07, 14.08, 14.09 or 14.10. An Employee forfeits an associated
matching contribution unless the matching contribution is a Vested excess
aggregate contribution distributed in accordance with Sections 14.09 or 14.10.

 

3.06 ALLOCATION
CONDITIONS. The Plan Administrator will determine the allocation conditions
which apply to Employer contributions (including matching contributions) and
Participant forfeitures on the basis of the Plan Year (or on any other basis
representing a reasonable division of the Plan Year) in accordance with the
Employer’s elections in its Adoption Agreement. A Participant does not accrue
an Employer contribution with respect to a Plan Year or other applicable period
until the Participant satisfies the allocation conditions described in this
Section 3.06. The Plan under a 401(k) arrangement may not impose any allocation
conditions with respect to deferral contributions, safe harbor contributions or
SIMPLE contributions.

 

(A) Hours
of Service Requirement.
Except as required to satisfy the top-heavy minimum allocation requirement of
Article XII, the Plan Administrator will not allocate any portion of an
Employer contribution for a Plan Year to any Participant’s Account if the
Participant does not complete the applicable minimum Hours of Service or
consecutive calendar days of employment requirement the Employer specifies in
its Adoption Agreement for the relevant period. The Employer in its
Standardized Adoption Agreement must elect whether to require a Participant to
complete during a Plan Year 501 Hours of Service or to be employed for at least
91 consecutive calendar days under the Elapsed Time Method, to share in the
allocation of Employer contributions for that Plan Year where the Participant
is not employed by the Employer on the Accounting Date of that Plan Year,
including the Plan Year in which the Employer terminates the Plan.

 

(B) “Last
Day” Employment Requirement. If
the Plan is a Standardized Plan, a Participant who is employed by the Employer
on the Accounting Date of a Plan Year will share in the allocation of Employer
contributions for that Plan Year without regard to the Participant’s Hours of
Service completed during that Plan Year. If the Plan is a Nonstandardized Plan,
the Employer must specify in its Adoption Agreement whether the Participant
will benefit under the Plan if the Participant is not employed by the Employer
on the Accounting Date of the Plan Year or other specified date. If the Plan is
a Nonstandardized money purchase Plan or target benefit Plan, the Plan conditions
Employer contribution allocations on a Participant’s employment with the
Employer on the last day of the Plan Year for the Plan Year in which the
Employer terminates the Plan.

 

(C) Death,
Disability or Normal Retirement Age. Unless
the Employer otherwise elects in its Adoption Agreement, any allocation
condition elected under Adoption Agreement Section 3.06 does not apply for a
Plan Year if a Participant incurs a Separation from Service during the Plan
Year on account of the Participant’s death, Disability or attainment of Normal
Retirement Age in the current Plan Year or on account of the Participant’s
Disability or attainment of Normal Retirement Age in a prior Plan Year.

 

(D) Other
Conditions. In
allocating Employer contributions under the Plan, the Plan Administrator will
not apply any other conditions except those the Employer elects in its Adoption
Agreement or otherwise as the Plan may require.

 

(E) Suspension
of Allocation Conditions Under a Nonstandardized Plan. The suspension provisions of this Section
3.06(E) do not apply unless the Employer elects in its Nonstandardized Adoption
Agreement to apply them. If Section 3.06(E) applies, the Plan suspends for a
Plan Year the Adoption Agreement Section 3.06 allocation conditions if the Plan
fails in that Plan Year to satisfy coverage under the Ratio Percentage Test,
unless in an Addendum to its Adoption Agreement, the Employer specifies the
Plan Administrator will apply this Section 3.06(E) using the Average Benefit
Percentage Test described in Code §410(b)(2). A Plan satisfies coverage under
the Ratio Percentage Test if, on the last day of the Plan Year, the Plan’s
benefiting ratio of the Nonhighly Compensated Includible Employees is at least
70% of the benefiting ratio of the Highly Compensated Includible Employees.

 

The benefiting ratio of the
Nonhighly Compensated Includible Employees is the number of Nonhighly
Compensated Includible Employees benefiting under the Plan over the number of
the Includible Employees who are Nonhighly Compensated Employees. “Includible”
Employees are all Employees other than: (1) those Employees excluded from
participating in the Plan for the entire Plan Year by reason of the collective
bargaining unit or the nonresident alien exclusions under Code §410(b)(3) or by
reason of the age and service requirements of Article II; and (2) those
Employees who incur a Separation from Service during the Plan Year and for the
Plan Year fail to complete more than 500 Hours of Service or at least 91
consecutive calendar days under the Elapsed Time Method.

 

For purposes of coverage, an
Employee is benefiting under the Plan on a particular date if, under Section
3.04 of the Plan, he/she is entitled to an Employer contribution or to a
Participant forfeiture allocation for the Plan Year.

 

If this Section 3.06(E)
applies for a Plan Year, the Plan Administrator will suspend the allocation
conditions for the Nonhighly Compensated Includible Employees who are
Participants, beginning first with the Includible Employee(s) employed by the
Employer on the last day of the Plan Year, then the Includible Employee(s) who
have the latest Separation from Service during the Plan Year, and continuing to
suspend the allocation conditions for each Includible Employee who incurred an
earlier

 

12

 

Separation from Service,
from the latest to the earliest Separation from Service date, until the Plan
satisfies coverage for the Plan Year. If two or more Includible Employees have
a Separation from Service on the same day, the Plan Administrator will suspend
the allocation conditions for all such Includible Employees, irrespective of
whether the Plan can satisfy coverage by accruing benefits for fewer than all
such Includible Employees. If the Plan for any Plan Year suspends the allocation
conditions for an Includible Employee, that Employee will share in the
allocation for that Plan Year of the Employer contribution and Participant
forfeitures, if any, without regard to whether he/she has satisfied the
allocation conditions of this Section 3.06.

 

If the Plan includes
Employer matching contributions subject to ACP testing, this Section 3.06(E)
applies separately to the Code §401(m) portion of the Plan.

 

Part 2. Limitations
On Allocations: Sections 3.07 through 3.18

 

[Note: Sections 3.07 through
3.10 apply only to Participants in this Plan who do not participate, and who
have never participated, in another qualified plan, individual medical account
(as defined in Code §415(l)(2)), simplified employee pension plan (as defined
in Code §408(k)) or welfare benefit fund (as defined in Code §419(e))
maintained by the Employer, which provides an Annual Addition.]

 

3.07 ANNUAL ADDITIONS
LIMITATION. The amount of Annual Additions which the Plan Administrator may
allocate under this Plan to a Participant’s Account for a Limitation Year may
not exceed the Maximum Permissible Amount. If the Annual Additions the Plan
Administrator otherwise would allocate under the Plan to a Participant’s
Account would for the Limitation Year exceed the Maximum Permissible Amount,
the Plan Administrator will not allocate the Excess Amount, but will instead
take any reasonable, uniform and nondiscriminatory action the Plan
Administrator determines necessary to avoid allocation of an Excess Amount.
Such actions include, but are not limited to, those described in this Section
3.07. If the Plan includes a 401(k) arrangement, the Plan Administrator may
apply this Section 3.07 in a manner which maximizes the allocation to a
Participant of Employer contributions (exclusive of the Participant’s deferral
contributions). Notwithstanding any contrary Plan provision, the Plan
Administrator, for the Limitation Year, may: (1) suspend or limit a
Participant’s additional Employee contributions or deferral contributions; (2)
notify the Employer to reduce the Employer’s future Plan contribution(s) as
necessary to avoid allocation to a Participant of an Excess Amount; or (3)
suspend or limit the allocation to a Participant of any Employer contribution
previously made to the Plan (exclusive of deferral contributions) or of any
Participant forfeiture. If an allocation of Employer contributions previously
made (excluding a Participant’s deferral contributions) or of Participant
forfeitures would result in an Excess Amount to a Participant’s Account, the
Plan Administrator will allocate the Excess Amount to the remaining
Participants who are eligible for an allocation of Employer contributions for
the Plan Year in which the Limitation Year ends. The Plan Administrator will
make this allocation in accordance with the Plan’s allocation method as if the
Participant whose Account otherwise would receive the Excess Amount, is not
eligible for an allocation of Employer contributions. If the Plan Administrator
allocates to a Participant an Excess Amount, Plan Administrator must dispose of
the Excess Amount in accordance with Section 3.10 (relating to certain
“reasonable errors” and allocation of forfeitures) or, if Section 3.10 does not
apply, the Plan Administrator will dispose of the Excess Amount under Section
9.12.

 

3.08 ESTIMATING
COMPENSATION. Prior to the determination of the Participant’s actual
Compensation for a Limitation Year, the Plan Administrator may determine the
Maximum Permissible Amount on the basis of the Participant’s estimated annual
Compensation for such Limitation Year. The Plan Administrator must make this
determination on a reasonable and uniform basis for all Participants similarly
situated. The Plan Administrator must reduce the allocation of any Employer
contributions (including any allocation of forfeitures) based on estimated
annual Compensation by any Excess Amounts carried over from prior Limitation
Years.

 

3.09 DETERMINATION BASED
ON ACTUAL COMPENSATION. As soon as is administratively feasible after the
end of the Limitation Year, the Plan Administrator will determine the Maximum
Permissible Amount for the Limitation Year on the basis of the Participant’s
actual Compensation for such Limitation Year.

 

3.10 DISPOSITION OF
ALLOCATED EXCESS AMOUNT. If, because of a reasonable error in estimating a
Participant’s actual Limitation Year Compensation, because of the allocation of
forfeitures, because of a reasonable error in determining a Participant’s
deferral contributions or because of any other facts and circumstances the Internal
Revenue Service (“Revenue Service”) considers to constitute reasonable error, a
Participant receives an allocation of an Excess Amount for a Limitation Year,
the Plan Administrator will dispose of such Excess Amount as follows:

 

(a) The Plan Administrator
first will return to the Participant any Employee contributions (adjusted for
earnings) and then any Participant deferral contributions (adjusted for
earnings) to the extent necessary to reduce or eliminate the Excess Amount.

 

(b) If, after the
application of Paragraph (a), an Excess Amount still exists and the Plan covers
the Participant at the end of the Limitation Year, the Plan Administrator then
will use the Excess Amount(s) to reduce future Employer contributions
(including any allocation of forfeitures) under the Plan for the next
Limitation Year and for each succeeding Limitation Year, as is necessary, for
the Participant. If the Employer’s Plan is a profit sharing plan, a Participant
who is a Highly Compensated Employee may elect to limit his/her Compensation
for allocation purposes to the extent necessary to reduce his/her allocation
for the Limitation Year to the Maximum Permissible Amount and to eliminate the
Excess Amount.

 

(c) If, after the
application of Paragraph (a), an Excess Amount still exists and the Plan does
not cover

 

13

 

the Participant at the end
of the Limitation Year, the Plan Administrator then will hold the Excess Amount
unallocated in a suspense account. The Plan Administrator will apply the
suspense account to reduce Employer Contributions (including the allocation of
forfeitures) for all remaining Participants in the next Limitation Year, and in
each succeeding Limitation Year if necessary. Neither the Employer nor any
Employee may contribute to the Plan for any Limitation Year in which the Plan
is unable to allocate fully a suspense account maintained pursuant to this
Paragraph (c). Amounts held unallocated in a suspense account will not share in
any allocation of Trust Fund net income, gain or loss.

 

(d) The Plan
Administrator under Paragraphs (b) or (c) will not distribute any Excess
Amount(s) to Participants or to former Participants.

 

[Note: Sections 3.11 through
3.15 apply only to Participants who, in addition to this Plan, participate in
one or more M&P defined contribution plans (including Paired Plans),
welfare benefit funds (as defined in Code §419(e)), individual medical accounts
(as defined in Code §415(l)(2), or simplified employee pension plans (as
defined in Code §408(k)) maintained by the Employer and which provide an Annual
Addition during the Limitation Year (collectively “Code §415 aggregated
plans”).]

 

3.11 COMBINED PLANS
ANNUAL ADDITIONS LIMITATION. The amount of Annual Additions which the Plan
Administrator may allocate under this Plan to a Participant’s Account for a
Limitation Year may not exceed the Maximum Permissible Amount, reduced by the
sum of any Annual Additions allocated to the Participant’s accounts for the
same Limitation Year under the Code §415 aggregated plans. If the amount the
Employer otherwise would allocate to the Participant’s Account under this Plan
would cause the Annual Additions for the Limitation Year to exceed this Section
3.11 combined plans limitation, the Employer will reduce the amount of its
allocation to that Participant’s Account in the manner described in Section
3.07, so the Annual Additions under all of the Code §415 aggregated plans for
the Limitation Year will equal the Maximum Permissible Amount. If the Plan
Administrator allocates to a Participant an amount attributed to this Plan
under Section 3.14 which exceeds this Section 3.11 combined plans limitation,
the Plan Administrator must dispose of the Excess Amount in accordance with
Section 3.15 (relating to certain “reasonable errors” and allocation of
forfeitures) or, if Section 3.15 does not apply, the Plan Administrator will
dispose of the Excess Amount under Section 9.12.

 

3.12 ESTIMATING
COMPENSATION. Prior to the determination of the Participant’s actual
Compensation for the Limitation Year, the Plan Administrator may determine the
Section 3.11 combined plans limitation on the basis of the Participant’s
estimated annual Compensation for such Limitation Year. The Plan Administrator
will make this determination on a reasonable and uniform basis for all
Participants similarly situated. The Plan Administrator must reduce the
allocation of any Employer contribution (including the allocation of
Participant forfeitures) based on estimated annual Compensation by any Excess Amounts
carried over from prior years.

 

3.13 DETERMINATION BASED
ON ACTUAL COMPENSATION. As soon as is administratively feasible after the
end of the Limitation Year, the Plan Administrator will determine the Section
3.11 combined plans limitation on the basis of the Participant’s actual
Compensation for such Limitation Year.

 

3.14 ORDERING OF ANNUAL
ADDITION ALLOCATIONS. If, because of a reasonable error in estimating a
Participant’s actual Limitation Year Compensation, because of the allocation of
forfeitures, because of a reasonable error in determining a Participant’s
deferral contributions or because of any other facts and circumstances the
Revenue Service considers to constitute reasonable error, a Participant’s
Annual Additions under this Plan and the Code §415 aggregated plans result in
an Excess Amount, such Excess Amount will consist of the Amounts last
allocated. The Plan Administrator will determine the Amounts last allocated by
treating the Annual Additions attributable to a simplified employee pension as
allocated first, followed by allocation to a welfare benefit fund or individual
medical account, irrespective of the actual allocation date. If the Plan
Administrator allocates an Excess Amount to a Participant on an allocation date
of this Plan which coincides with an allocation date of another plan, unless
the Employer specifies otherwise in an Addendum to its Adoption Agreement, the
Excess Amount attributed to this Plan will equal the product of:

 

(a)   the total Excess Amount allocated as of such
date, multiplied by

 

(b)   the ratio of (i) the Annual Additions
allocated to the Participant as of such date for the Limitation Year under the
Plan to (ii) the total Annual Additions allocated to the Participant as of such
date for the Limitation Year under this Plan and the Code §415 aggregated
plans.

 

3.15 DISPOSITION OF
ALLOCATED EXCESS AMOUNT ATTRIBUTABLE TO PLAN. The Plan Administrator will
dispose of any allocated Excess Amounts described in and attributed to this
Plan under Section 3.14 as provided in Section 3.10 or, as applicable under
Section 9.12.

 

[Note: Section 3.16 applies
only to Participants who, in addition to this Plan, participate in one or more
qualified defined contribution plans maintained by the Employer during the
Limitation Year, but which are not M&P plans described in Sections 3.11
through 3.15.]

 

3.16 OTHER DEFINED
CONTRIBUTION PLANS LIMITATION. If a Participant is a participant in another
defined contribution plan maintained by the Employer, but which plan is not an
M&P plan described in Sections 3.11 through 3.15, the Plan Administrator
must limit the allocation to the Participant of Annual Additions under this
Plan as provided in Sections 3.11 through 3.15, as though the other defined
contribution plan were an M&P plan, unless the Employer specifies otherwise
in an Addendum to its Adoption Agreement.

 

14

 

3.17 DEFINED BENEFIT PLAN
LIMITATION. If the Employer maintains a defined benefit plan, or has ever
maintained a defined benefit plan which the Employer has terminated, then the
sum of the defined benefit plan fraction and the defined contribution plan
fraction for any Participant for any Limitation Year beginning before January
1, 2000, must not exceed 1.0. The 1.0 limitation of the immediately preceding
sentence does not apply for Limitation Years beginning after December 31, 1999,
unless the Employer in Appendix B to its Adoption Agreement specifies a later
effective date. To the extent necessary to satisfy the 1.0 limitation, if the
Employer still maintains the defined benefit plan as an active plan, the
Employer in its Adoption Agreement Appendix B will elect whether to reduce the
Participant’s projected annual benefit under the defined benefit plan under
which the Participant participates, or to reduce its contribution or allocation
on behalf of the Participant to the defined contribution plan(s) under which
the Participant participates. If the Employer has frozen or terminated the
defined benefit plan, the Employer will reduce its contribution or allocation
on behalf of the Participant to the defined contribution plan(s) under which
the Participant participates. The Employer must provide in Appendix B to its
Adoption Agreement the manner in which the Plan will satisfy the top-heavy requirements
of Code §416 after taking into account the existence (or prior maintenance) of
the defined benefit plan.

 

3.18 DEFINITIONS -
ARTICLE III. For purposes of Article III:

 

(a) “Annual Additions”
means the sum of the following amounts allocated to a Participant’s Account for
a Limitation Year: (i) all Employer contributions (including Participant
deferral contributions); (ii) all forfeitures; (iii) all Employee
contributions; (iv) Excess Amounts reapplied to reduce Employer contributions
under Section 3.10 or Section 3.15; (v) amounts allocated after March 31, 1984,
to an individual medical account (as defined in Code §415(l)(2)) included as
part of a pension or annuity plan maintained by the Employer; (vi)
contributions paid or accrued after December 31, 1985, for taxable years ending
after December 31, 1985, attributable to post-retirement medical benefits
allocated to the separate account of a key-employee (as defined in Code
§419A(d)(3)) under a welfare benefit fund (as defined in Code §419(e)) maintained
by the Employer; (vii) amounts allocated under a Simplified Employee Pension
Plan; and (viii) corrected excess contributions described in Code §401(k) and
corrected excess aggregate contributions described in Code §401(m). Excess
deferrals described in Code §402(g), which the Plan Administrator corrects by
distribution by April 15 of the following calendar year, are not Annual
Additions.

 

(b) “Compensation” for
purposes of applying the limitations of Part 2 of this Article III, means
Compensation as defined in Section 1.07, except, for Limitation Years beginning
after December 31, 1997, Compensation includes Elective Contributions,
irrespective of whether the Employer has elected to include these amounts as
Compensation under Section 1.07 of its Adoption Agreement and any exclusion the
Employer has elected in Section 1.07 of the Adoption Agreement does not apply.

 

(c) “Employer” means
the Employer and any Related Employer. Solely for purposes of applying the
limitations of Part 2 of this Article III, the Plan Administrator will
determine Related Employer by modifying Code §§414(b) and (c) in accordance
with Code §415(h).

 

(d) “Excess Amount”
means the excess of the Participant’s Annual Additions for the Limitation Year
over the Maximum Permissible Amount.

 

(e) “Limitation Year”
means the period the Employer elects in its Adoption Agreement Section 1.24.
All qualified plans of the Employer must use the same Limitation Year. If the
Employer amends the Limitation Year to a different 12-consecutive month period,
the new Limitation Year must begin on a date within the Limitation Year for
which the Employer makes the amendment, creating a short Limitation Year.

 

(f) “M&P Plan”
means a prototype plan the form of which is the subject of a favorable opinion
letter (or prior to Revenue Procedure 2000-20, a favorable notification or
favorable opinion letter) from the Revenue Service.

 

(g) “Maximum
Permissible Amount” means the lesser of: (i) $30,000 (or, if greater, the
$30,000 amount as adjusted under Code §415(d)), or (ii) 25% of the
Participant’s Compensation for the Limitation Year. If there is a short
Limitation Year because of a change in Limitation Year, the Plan Administrator
will multiply the $30,000 (or adjusted) limitation by the following fraction:

 

Number
of months in the short Limitation Year

12

 

The 25% limitation does not
apply to any contribution for medical benefits within the meaning of Code
§401(h) or Code §419A(f)(2) which otherwise is an Annual Addition.

 

(h) “Defined
contribution plan” means a retirement plan which provides for an individual
account for each participant and for benefits based solely on the amount
contributed to the participant’s account, and any income, expenses, gains and
losses, and any forfeitures of accounts of other participants which the plan
may allocate to such participant’s account. The Plan Administrator must treat
all defined contribution plans (whether or not terminated) maintained by the
Employer as a single plan. Solely for purposes of the limitations of Part 2 of
this Article III, employee contributions made to a defined benefit plan
maintained by the Employer is a separate defined contribution plan. The Plan
Administrator also will treat as a defined contribution plan an individual
medical account (as defined in Code §415(l)(2)) included as part of a defined
benefit plan maintained by the Employer and, for taxable years ending after
December 31, 1985, a welfare benefit fund under Code §419(e) maintained by the
Employer to the extent there are post-retirement medical benefits

 

15

 

allocated to the separate
account of a key employee (as defined in Code §419A(d)(3)).

 

(i) “Defined benefit
plan” means a retirement plan which does not provide for individual accounts
for Employer contributions. All defined benefit plans (whether or not
terminated) maintained by the Employer are a single plan.

 

[Note: The definitions in
Paragraphs (j), (k) and (l) apply only if the limitation described in Section
3.17 applies to the Plan.]

 

(j) “Defined benefit
plan fraction” means the following fraction:

 

	
   

  	
  Projected
  annual benefit of the Participant under the defined benefit plan(s)

  	
   

  
	
   

  	
  The
  lesser of: (i) 125% (subject to the “100% limitation” in Paragraph (l)) of
  the dollar limitation in effect under Code §415(b)(1)(A) for the Limitation
  Year, or (ii) 140% of the Participant’s average Compensation for his/her high
  three (3) consecutive Years of Service

  	
   

  

 

To determine the denominator
of this fraction, the Plan Administrator will make any adjustment required
under Code §415(b) and will determine a Year of Service, unless the Employer
provides otherwise in an Addendum to its Adoption Agreement, as a Plan Year in
which the Employee completed at least 1,000 Hours of Service. The “projected
annual benefit” is the annual retirement benefit (adjusted to an actuarially
equivalent straight life annuity if the defined benefit plan expresses such
benefit in a form other than a straight life annuity or qualified joint and
survivor annuity) of the Participant under the terms of the defined benefit
plan on the assumptions he/she continues employment until his/her normal
retirement age (or current age, if later) as stated in the defined benefit
plan, his/her compensation continues at the same rate as in effect in the
Limitation Year under consideration until the date of his/her normal retirement
age and all other relevant factors used to determine benefits under the defined
benefit plan remain constant as of the current Limitation Year for all future
Limitation Years.

 

Current
Accrued Benefit. If
the Participant accrued benefits in one or more defined benefit plans
maintained by the Employer which were in existence on May 6, 1986, the dollar
limitation used in the denominator of this fraction will not be less than the
Participant’s Current Accrued Benefit. A Participant’s Current Accrued Benefit
is the sum of the annual benefits under such defined benefit plans which the
Participant had accrued as of the end of the 1986 Limitation Year (the last
Limitation Year beginning before January 1, 1987), determined without regard to
any change in the terms or conditions of the defined benefit plan made after
May 5, 1986, and without regard to any cost of living adjustment occurring
after May 5, 1986. This Current Accrued Benefit rule applies only if the
defined benefit plans individually and in the aggregate satisfied the
requirements of Code §415 as in effect at the end of the 1986 Limitation Year.

 

(k) “Defined
contribution plan fraction” means the following fraction:

 

	
   

  	
  The
  sum, as of the close of the Limitation Year, of the Annual Additions for all
  Limitation Years to the Participant’s Account under the defined contribution
  plan(s)

  	
   

  
	
   

  	
  The
  sum of the lesser of the following amounts determined for the Limitation Year
  and for each prior Limitation Year of service with the Employer: (i) 125% (subject
  to the “100% limitation” in Paragraph (l)) of the dollar limitation in effect
  under Code §415(c)(1)(A) for the Limitation Year (determined without regard
  to the special dollar limitations for employee stock ownership plans), or (ii)
  35% of the Participant’s Compensation for the Limitation Year

  	
   

  

 

For purposes of determining
the defined contribution plan fraction, the Plan Administrator will not
recompute Annual Additions in Limitation Years beginning prior to January 1,
1987, to treat all Employee contributions as Annual Additions. If the Plan
satisfied Code §415 for Limitation Years beginning prior to January 1, 1987,
the Plan Administrator will redetermine the defined contribution plan fraction
and the defined benefit plan fraction as of the end of the 1986 Limitation
Year, in accordance with this Section 3.18. If the sum of the redetermined
fractions exceeds 1.0, the Plan Administrator will subtract permanently from
the numerator of the defined contribution plan fraction an amount equal to the
product of: (1) the excess of the sum of the fractions over 1.0, times (2) the
denominator of the defined contribution plan fraction. In making the
adjustment, the Plan Administrator must disregard any accrued benefit under the
defined benefit plan which is in excess of the Current Accrued Benefit. This
Plan continues any transitional rules applicable to the determination of the
defined contribution plan fraction under the Plan as of the end of the 1986
Limitation Year.

 

(l) “100% limitation”
means the limitation in Code §416(h) which applies if the plan is top-heavy. If
the 100% limitation applies, the Plan Administrator must determine the
denominator of the defined benefit plan fraction and the denominator of the
defined contribution plan fraction by substituting 100% for 125%. If this Plan
is a Standardized Plan, the 100% limitation applies in all Limitation Years,
unless the Employer specifies otherwise in an Addendum to its Adoption Agreement.
If the Employer overrides the 100% limitation under a Standardized Plan, the
Employer must specify in its Addendum the manner in which the Plan satisfies
the extra minimum benefit requirement of Code §416(h) and the 100% limitation
must continue to apply if the Plan’s top-heavy ratio exceeds 90%. If this Plan
is a Nonstandardized Plan, the 100% limitation applies only if: (i) the Plan’s
top-heavy ratio exceeds 90%; or (ii) the Plan’s top-heavy ratio is greater than
60%, and the Employer does not specify in its Adoption Agreement to provide
extra minimum benefits which satisfy Code §416(h)(2).

 

16

 

ARTICLE IV

PARTICIPANT CONTRIBUTIONS

 

4.01 PARTICIPANT
CONTRIBUTIONS. For purposes of this Article IV, Participant contributions
means all Employee contributions described in Section 4.02, deductible
Participant contributions described in Section 4.03 (“DECs”) and rollover
contributions described Section 4.04.

 

4.02 EMPLOYEE
CONTRIBUTIONS. An Employee contribution is a nondeductible contribution
which a Participant makes to the Trust as permitted under this Section 4.02. A
deferral contribution made by a Participant under a 401(k) arrangement is not
an Employee contribution. Employee contributions must satisfy the nondiscrimination
requirements of Code §401(m). See Section 14.09. An Employer must elect in its
Adoption Agreement whether to permit Employee contributions. If the Employer
elects to permit Employee contributions, the Employer also must specify in its
Adoption Agreement any conditions or limitations which may apply to Employee
contributions. If the Employer permits Employee contributions, the Employer
operationally will determine if a Participant will make Employee contributions
through payroll deduction or by other means.

 

The Employer must elect in
its Adoption Agreement whether the Employer will make matching contributions
with respect to any Employee contributions and any conditions or limitations
which may apply to those matching contributions. Any matching contribution must
satisfy the nondiscrimination requirements of Code §401(m). See Section 14.09.

 

4.03 DECs. A DEC is a
deductible Participant contribution made to the Plan for a taxable year
commencing prior to 1987. If a Participant has made DECs to the Plan, the Plan
Administrator must maintain a separate Account for the Participant’s DECs as
adjusted for earnings, including DECs which are part of a rollover contribution
described in Section 4.04. The DECs Account is part of the Participant’s
Account for all purposes of the Plan, except for purposes of determining the
top-heavy ratio under Article XII. The Plan Administrator may not use a
Participant’s DECs Account to purchase life insurance on the Participant’s
behalf.

 

4.04 ROLLOVER
CONTRIBUTIONS. A rollover contribution is an amount of cash or property
which the Code permits an eligible Employee or Participant to transfer directly
or indirectly to this Plan from another qualified plan. A rollover contribution
excludes Employee contributions, as adjusted for earnings. An Employer
operationally and on a nondiscriminatory basis, may elect to permit or not to
permit rollover contributions to this Plan or may elect to limit an eligible
Employee’s right or a Participant’s right to make a rollover contribution. If
an Employer permits rollover contributions, any Participant (or as applicable,
any eligible Employee), with the Employer’s written consent and after filing
with the Trustee the form prescribed by the Plan Administrator, may make a
rollover contribution to the Trust. Before accepting a rollover contribution,
the Trustee may require a Participant (or eligible Employee) to furnish
satisfactory evidence the proposed transfer is in fact a “rollover
contribution” which the Code permits an employee to make to a qualified plan.
The Trustee, in its sole discretion, may decline to accept a rollover
contribution of property which could: (1) generate unrelated business taxable
income; (2) create difficulty or undue expense in storage, safekeeping or
valuation; or (3) create other practical problems for the Trust. A rollover
contribution is not an Annual Addition under Part 2 of Article III.

 

If an eligible Employee
makes a rollover contribution to the Trust prior to satisfying the Plan’s
eligibility conditions, the Plan Administrator and Trustee must treat the
Employee as a limited Participant (as described in Rev. Rul. 96-48 or in any
successor ruling). A limited Participant does not share in the Plan’s
allocation of Employer contributions nor Participant forfeitures and may not
make deferral contributions if the Plan includes a 401(k) arrangement until
he/she actually becomes a Participant in the Plan. If a limited Participant has
a Separation from Service prior to becoming a Participant in the Plan, the
Trustee will distribute his/her rollover contributions Account to him/her in
accordance with Article VI as if it were an Employer contributions Account.

 

4.05 PARTICIPANT CONTRIBUTIONS
- VESTING. A Participant’s Participant contributions Account is, at all
times, 100% Vested.

 

4.06 PARTICIPANT CONTRIBUTIONS
- DISTRIBUTION. Subject to any contrary Employer election in its Adoption
Agreement Appendix A, an Employee, after attaining age 70 1/2 may elect to
receive distribution prior to Separation from Service (“in-service
distribution”) of all or any part of his/her Participant contributions Account.
The Employer in its Adoption Agreement Section 6.01 must elect the additional
in-service distribution election rights, if any, a Participant has with respect
to his/her Participant contributions Account. For purposes of the Employer’s
Adoption Agreement elections regarding in-service distribution of Participant
contributions, a Participant’s Employee contributions also includes DECs. A
Participant will not incur a forfeiture of any Account under the Plan solely as
a result of the distribution of his/her Participant contributions.

 

The Trustee, following a
Participant’s Separation from Service, will distribute to the Participant
his/her Participant contributions Account in accordance with Article VI in the
same manner as the Trustee distributes the Participant’s Employer contributions
Account.

 

4.07 PARTICIPANT CONTRIBUTIONS
- INVESTMENT AND ACCOUNTING. The Plan Administrator must maintain a
separate Account in the name of each Participant to reflect his/her Participant
contributions (including, if applicable, the different types of Participant
contributions), as adjusted for earnings. The Trustee will invest all
Participant contributions as part of the Trust Fund.

 

17

 

ARTICLE V

VESTING

 

5.01 NORMAL/EARLY
RETIREMENT AGE. The Employer in its Adoption Agreement must specify the
Plan’s Normal Retirement Age. An Employer in its Adoption Agreement may specify
an Early Retirement Age. A Participant’s Account Balance derived from Employer
contributions is 100% Vested upon and after his/her attaining Normal Retirement
Age (or if applicable, Early Retirement Age) if the Participant is employed by
the Employer on or after that date.

 

5.02 PARTICIPANT DEATH OR
DISABILITY. Unless the Employer elects otherwise in its Adoption Agreement,
a Participant’s Account Balance derived from Employer contributions is 100%
Vested if the Participant’s Separation from Service is a result of his/her
death or his/her Disability.

 

5.03 VESTING SCHEDULE.
Except as provided in Sections 5.01 and 5.02, for each Year of Service as
described in Section 5.06, a Participant’s Vested percentage of his/her Account
Balance derived from Employer contributions equals the percentage under the
vesting schedule the Employer has elected in its Adoption Agreement.

 

For purposes of Adoption
Agreement Section 5.03, “6-year graded,” “3-year cliff,” “7-year graded” or
“5-year cliff” means an Employee’s Vested percentage, based on each included
Year of Service, under the following applicable schedule:

 

	
  6-year graded

  	
   

  	
  7-year
  graded

  
	
   

  	
   

  	
   

  
	
  0-1 year /

  	
  0%

  	
   

  	
   

  	
  0-2
  years / 0%

  
	
  2 years /

  	
  20%

  	
   

  	
   

  	
  3
  years / 20%

  
	
  3 years /

  	
  40%

  	
   

  	
   

  	
  4
  years / 40%

  
	
  4 years /

  	
  60%

  	
   

  	
   

  	
  5
  years / 60%

  
	
  5 years /

  	
  80%

  	
   

  	
   

  	
  6
  years / 80%

  
	
  6 years /

  	
  100%

  	
   

  	
   

  	
  7
  years / 100%

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3-year cliff

  	
   

  	
  5-year
  cliff

  
	
   

  	
   

  	
   

  
	
  0-2 years /

  	
  0%

  	
   

  	
   

  	
  0-4
  years / 0%

  
	
  3 years /

  	
  100%

  	
   

  	
   

  	
  5
  years / 100%

  

 

(A) “Grossed-Up”
Vesting Formula. If
the Trustee makes a distribution (other than a cash-out distribution described
in Section 5.04) to a partially-Vested Participant, and the Participant has not
incurred a Forfeiture Break in Service at the relevant time, the provisions of
this Section 5.03(A) apply to the Participant’s Account Balance. At any
relevant time following the distribution, the Plan Administrator will determine
the Participant’s Vested Account Balance derived from Employer contributions in
accordance with the following formula: P(AB + D) - D.

 

To apply this formula, “P”
is the Participant’s current vesting percentage at the relevant time, “AB” is
the Participant’s Employer-derived Account Balance at the relevant time and “D”
is the amount of the earlier distribution. If, under a restated Plan, the Plan
has made distribution to a partially-Vested Participant prior to its restated
Effective Date and is unable to apply the cash-out provisions of Section 5.04
to that prior distribution, this special vesting formula also applies to that
Participant’s remaining Account Balance. The Employer, in an Addendum to its
Adoption Agreement, may elect to modify this formula to read as follows: P(AB +
(R x D)) - (R x D). For purposes of this alternative
formula, “R” is the ratio of “AB” to the Participant’s Employer-derived Account
Balance immediately following the earlier distribution.

 

(B) Special
Vesting Elections.
The Employer in its Adoption Agreement may elect other specified vesting
provisions which are consistent with Code §411 and applicable Treasury
regulations.

 

5.04 CASH-OUT DISTRIBUTIONS
TO PARTIALLY-VESTED PARTICIPANTS/ RESTORATION OF FORFEITED ACCOUNT BALANCE.
If, pursuant to Article VI, a partially-Vested Participant receives a cash-out
distribution before he/she incurs a Forfeiture Break in Service, the
Participant will incur an immediate forfeiture of the non-Vested portion of
his/her Account Balance. If a partially-Vested Participant’s Account is
entitled to an allocation of Employer contributions or Participant forfeitures
for the Plan Year in which he/she otherwise would incur a forfeiture by reason
of a cash-out distribution, the Plan Administrator will apply the cash-out
forfeiture rule as if the partially-Vested Participant received a cash-out
distribution on the first day of the immediately following Plan Year. A
partially-Vested Participant is a Participant whose Vested percentage
determined under Section 5.03 is more than 0% but is less than 100%. A cash-out
distribution is a distribution to the Participant (whether involuntary or with
required consent as described in Article VI), of his/her entire Vested Account
Balance due to the Participant’s Separation from Service.

 

(A) Forfeiture
Restoration and Conditions for Restoration. A partially-Vested Participant re-employed
by the Employer after receiving a cash-out distribution of the Vested
percentage of his/her Account Balance may repay to the Trust the entire amount
of the cash-out distribution attributable to Employer contributions without any
adjustment for gains and losses, unless the Participant no longer has a right
to restoration under this Section 5.04(A). If a re-employed Participant repays
his/her cash-out distribution, the Plan Administrator, subject to the
conditions of this Section 5.04(A), must restore the Participant’s Account
Balance attributable to Employer contributions to the same dollar amount as the
dollar amount of his/her Account Balance on the Accounting Date, or other
valuation date, immediately preceding the date of the cash-out distribution,
unadjusted for any gains or losses occurring subsequent to that Accounting
Date, or other valuation date. Restoration of the Participant’s Account Balance
includes restoration of all Protected Benefits with respect to that restored
Account Balance, in accordance with applicable Treasury regulations. The Plan
Administrator will not restore a re-employed Participant’s Account Balance
under this Section 5.04 (A) if:

 

18

 

(1) 5 years have
elapsed since the Participant’s first re-employment date with the Employer
following the cash-out distribution;

 

(2) The Participant is
not in the Employer’s Service on the date the Participant repays his/her
cash-out distribution; or

 

(3) The Participant has
incurred a Forfeiture Break in Service. This condition also applies if the
Participant makes repayment within the Plan Year in which he/she incurs the
Forfeiture Break in Service and that Forfeiture Break in Service would result
in a complete forfeiture of the amount the Plan Administrator otherwise would
restore.

 

(B) Time
and Method of Forfeiture Restoration. If none of the conditions in Section 5.04(A) preventing restoration of
the Participant’s Account Balance applies, the Plan Administrator will restore
the Participant’s Account Balance as of the Plan Year Accounting Date
coincident with or immediately following the repayment. To restore the
Participant’s Account Balance, the Plan Administrator, to the extent necessary,
will allocate to the Participant’s Account:

 

(1) First, the amount,
if any, of Participant forfeitures the Plan Administrator otherwise would
allocate under Section 3.05;

 

(2) Second, the amount,
if any, of the Trust Fund net income or gain for the Plan Year; and

 

(3) Third, the Employer
contribution for the Plan Year to the extent made under a discretionary
formula.

 

In an Addendum to its
Adoption Agreement, the Employer may eliminate as a means of restoration any of
the amounts described in clauses (1), (2) and (3) or may change the order of
priority of these amounts. To the extent the amounts described in clauses (1),
(2) and (3) are insufficient to enable the Plan Administrator to make the
required restoration, the Employer must contribute, without regard to any
requirement or condition of Article III, the additional amount necessary to
enable the Plan Administrator to make the required restoration. If, for a
particular Plan Year, the Plan Administrator must restore the Account Balance
of more than one re-employed Participant, the Plan Administrator will make the
restoration allocations from the amounts described in clauses (1), (2) and (3)
to each such Participant’s Account in the same proportion that a Participant’s
restored amount for the Plan Year bears to the restored amount for the Plan
Year of all re-employed Participants. A cash-out restoration allocation is not
an Annual Addition under Part 2 of Article III.

 

(C) Deemed
Cash-out of 0% Vested Participant. Except as the Employer may provide in an Addendum to its Adoption
Agreement, the deemed cash-out rule of this Section 5.04(C) applies to any 0%
Vested Participant. A “0% Vested Participant” is a Participant whose Account
Balance derived from Employer contributions is entirely forfeitable at the time
of his/her Separation from Service. If a 0% Vested Participant’s Account is not
entitled to an allocation of Employer contributions for the Plan Year in which
the Participant has a Separation from Service, the Plan Administrator will
apply the deemed cash-out rule as if the 0% Vested Participant received a
cash-out distribution on the date of the Participant’s Separation from Service.
If a 0% Vested Participant’s Account is entitled to an allocation of Employer
contributions or Participant forfeitures for the Plan Year in which the
Participant has a Separation from Service, the Plan Administrator will apply
the deemed cash-out rule as if the 0% Vested Participant received a cash-out
distribution on the first day of the first Plan Year beginning after his/her
Separation from Service. For purposes of applying the restoration provisions of
this Section 5.04, the Plan Administrator will treat a reemployed 0% Vested
Participant as repaying his/her cash-out “distribution” on the date of the
Participant’s re-employment with the Employer.

 

5.05 ACCOUNTING FOR CASH-OUT
REPAYMENT. As soon as is administratively practicable, the Plan
Administrator will credit to the Participant’s Account the cash-out amount a
Participant has repaid to the Plan. Pending the restoration of the
Participant’s Account Balance, the Plan Administrator under Section 9.08(B) may
direct the Trustee to place the Participant’s cash-out repayment in a temporary
segregated investment Account. Unless the cash-out repayment qualifies as a
Participant rollover contribution, the Plan Administrator will direct the
Trustee to repay to the Participant as soon as is administratively practicable,
the full amount of the Participant’s cash-out repayment if the Plan
Administrator determines any of the conditions of Section 5.04(A) prevents
restoration as of the applicable Accounting Date, notwithstanding the
Participant’s repayment.

 

5.06 YEAR OF SERVICE -
VESTING. For purposes of determining a Participant’s vesting under Section
5.03, “Year of Service” means the 12-consecutive month vesting computation
period the Employer elects in its Adoption Agreement during which an Employee
completes the number of Hours of Service (not exceeding 1,000) specified in the
Adoption Agreement or, if the Plan applies the Elapsed Time Method of crediting
Vesting Service, the vesting computation period for which the Employee receives
credit for a Year of Service under the Service crediting rules of Section
1.15(D). A Year of Service includes any Year of Service completed prior to the
Effective Date of the Plan, except as provided in Section 5.08.

 

5.07 BREAK IN SERVICE AND
FORFEITURE BREAK IN SERVICE - VESTING. For purposes of this Article V, a
Participant incurs a “Break in Service” if during any vesting computation
period he/she does not complete more than 500 Hours of Service or, if the Plan
applies the Elapsed Time Method of crediting Service, the Participant has a
Period of Severance of at least 12 consecutive months. If, pursuant to Section
5.06, the Plan does not require more than 500 Hours of Service to receive
credit for a Year of Service, a Participant incurs a Break in Service in a
vesting computation period in which he/she fails to complete a Year of Service.
A Participant incurs a Forfeiture Break in Service when he/she incurs 5
consecutive Breaks in Service. The Plan does not apply the Break in Service
(one year hold-out) rule for vesting under Code §411(a)(6)(B). Therefore, an
Employee need not

 

19

 

complete a Year of Service
after a Break in Service before the Plan takes into account the Employee’s
otherwise includible pre-Break Years of Service under this Article V.

 

5.08 INCLUDED YEARS OF
SERVICE - VESTING. For purposes of determining “Years of Service” under
Section 5.06, the Plan takes into account all Years of Service an Employee
completes with the Employer except:

 

(a) For the sole
purpose of determining a Participant’s Vested percentage of his/her Account
Balance derived from Employer contributions which accrued for his/her benefit
prior to a Forfeiture Break in Service or receipt of a cash-out distribution,
the Plan disregards any Year of Service after the Participant first incurs a
Forfeiture Break in Service or receives a cash-out distribution (except where
the Plan Administrator restores the Participant’s Account under Section
5.04(A)).

 

(b) Consistent with
Code §411(a)(4), any Year of Service the Employer elects to exclude under its
Adoption Agreement.

 

5.09 FORFEITURE OCCURS.
A Participant’s forfeiture of his/her non-Vested Account Balance derived from
Employer contributions occurs under the Plan on the earlier of:

 

(a) The last day of the
vesting computation period in which the Participant first incurs a Forfeiture
Break in Service; or

 

(b) The date the
Participant receives a cash-out distribution.

 

The Plan Administrator
determines the percentage of a Participant’s Account Balance forfeiture, if
any, under this Section 5.09 solely by reference to the vesting schedule the
Employer elected in its Adoption Agreement. A Participant does not forfeit any
portion of his/her Account Balance for any other reason or cause except as
expressly provided by this Section 5.09 or as provided under Section 9.11.

 

5.10 RULE OF PARITY -
VESTING. The Employer may elect in its Adoption Agreement to apply the
“rule of parity” under Code §411(a)(6)(D) for purposes of determining vesting
Years of Service. Under the rule of parity, the Plan Administrator excludes a
Participant’s Years of Service before a Break in Service if: (a) the number of
the Participant’s consecutive Breaks in Service equals or exceeds 5; and (b)
the Participant is 0% Vested in his/her Account Balance derived from Employer
contributions at the time he/she has the Breaks in Service.

 

5.11 AMENDMENT TO VESTING
SCHEDULE. The Employer under Section 13.02 may amend the Plan’s vesting
schedule(s) under Section 5.03 at any time. However, the Plan Administrator
will not apply the amended vesting schedule to reduce any Participant’s
existing Vested percentage (determined on the later of the date the Employer
adopts the amendment, or the date the amendment becomes effective) in the
Participant’s existing and future Account Balance attributable to Employer
contributions, to a percentage less than the Vested percentage computed under
the Plan without regard to the amendment. Furthermore, an amended vesting
schedule will apply to a Participant only if the Participant receives credit for
at least one Hour of Service after the new vesting schedule becomes effective.

 

If the Employer amends the
Plan’s vesting schedule, each Participant having completed at least 3 Years of
Service (as described in Section 5.06) with the Employer prior to the
expiration of the election period described below, may irrevocably elect to
have the Plan Administrator determine the Vested percentage of his/her Account
Balance without regard to the amendment. The Participant must file his/her
election with the Plan Administrator within 60 days of the latest of: (a) the
Employer’s adoption of the amendment; (b) the effective date of the amendment;
or (c) the Participant’s receipt of a copy of the amendment. The Plan
Administrator, as soon as practicable, must forward a true copy of any
amendment to the vesting schedule to each affected Participant, together with a
written explanation of the effect of the amendment, the appropriate form upon
which the Participant may make an election to remain under the pre-amendment vesting
schedule and notice of the time within which the Participant must make an
election to remain under the pre-amendment vesting schedule. The election
described in this Section 5.11 does not apply to a Participant if the amended
vesting schedule provides for vesting at least as rapid at any time as the
vesting schedule in effect prior to the amendment. For purposes of this Section
5.11, an amendment to the vesting schedule includes any Plan amendment which
directly or indirectly affects the computation of the Vested percentage of a
Participant’s Account Balance. Furthermore, any shift in the Plan’s vesting
schedule under Article XII, due to a change in the Plan’s top-heavy status, is
an amendment to the vesting schedule for purposes of this Section 5.11.

 

5.12 DEFERRAL
CONTRIBUTIONS TAKEN INTO ACCOUNT. If
the Plan includes a 401(k) arrangement, the vesting rules described in Article
V must take into account a Participant’s deferral contributions for purposes of
determining: (1) if a Participant’s distribution is of his/her entire Vested
Account balance as required for a cash-out distribution under Section 5.04; (2)
if a Participant repays the entire amount of a prior cash-out distribution so
the Participant is entitled to restoration under Section 5.04(A); and (3) if a
Participant is 0% vested under Section 5.04(C) and under Section 5.10.

 

20

 

ARTICLE VI

DISTRIBUTIONS

 

6.01 TIMING OF
DISTRIBUTION. The Plan Administrator will direct the Trustee to commence
distribution of a Participant’s Vested Account Balance in accordance with this
Section 6.01 upon the Participant’s Separation from Service for any reason, or
if the Participant exercises an in-Service distribution right under the Plan.
The Trustee may make Plan distributions on any administratively practicable
date during the Plan Year, consistent with the Employer’s elections in its
Adoption Agreement.

 

(A) Distribution
upon Separation from Service (other than death).

 

(1) Participant’s Vested Account Balance not exceeding
$5,000. Upon the Participant’s Separation from Service for any
reason other than death, the Plan Administrator (without any requirement of
Participant or spousal consent) will direct the Trustee to distribute the
Participant’s Vested Account Balance (determined in accordance with Section
6.01(A)(6)) not exceeding $5,000 in a lump sum (without regard to Section
6.04), at the time specified in the Adoption Agreement, but in no event later
than the 60th day following the close of the Plan Year in which the later of
the following events occur: (a) the Participant attains Normal Retirement Age;
or (b) the Participant Separates from Service.

 

(2) Participant’s Vested Account Balance exceeds $5,000. Upon
the Participant’s Separation from Service for any reason other than death, the
Plan Administrator, subject to the Participant’s election to postpone
distribution under this Section 6.01(A)(2) and the consent requirements of
Section 6.01(A)(5), will direct the Trustee to commence distribution of the
Participant’s Vested Account Balance (determined in accordance with Section
6.01(A)(6)) exceeding $5,000, at the time specified in the Adoption Agreement
and in a form under Section 6.03 elected by the Participant. Any election under
this Section 6.01(A)(2) is subject to the requirements of Section 6.02 and of
Section 6.04.

 

A Participant eligible to
make an election under this Section 6.01(A)(2) may elect to postpone
distribution beyond the time the Employer has elected in its Adoption
Agreement, to any specified date including, but not beyond the Participant’s
Required Beginning Date, unless the Employer, in its Adoption Agreement,
specifically limits a Participant’s right to postpone distribution of his/her
Account Balance to the later of the date the Participant attains age 62 or
Normal Retirement Age. The Plan Administrator will reapply the notice and
consent requirements of Section 6.01(A)(4) and Section 6.01(A)(5) to any
distribution postponed under this Section 6.01(A)(2).

 

In the absence of a
Participant’s consent and distribution election (as described in Section
6.01(A)(5)) or in the absence of the Participant’s election to postpone distribution
prior to his/her annuity starting date, the Plan Administrator, consistent with
the Employer’s elections in its Adoption Agreement, will treat the Participant
as having elected to postpone his/her distribution until the 60th day following
the close of the Plan Year in which the latest of the following events occurs:
(a) the Participant attains Normal Retirement Age; (b) the Participant attains
age 62; or (c) the Participant Separates from Service. At the applicable date,
the Plan Administrator then will direct the Trustee to distribute the
Participant’s Vested Account Balance in a lump sum (or, if applicable, the
annuity form of distribution required under Section 6.04).

 

(3) Disability. If the Participant’s Separation
from Service is because of his/her Disability, the Plan Administrator will
direct the Trustee to pay the Participant’s Vested Account Balance in the same
manner as if the Participant had incurred a Separation from Service without
Disability.

 

(4) Distribution notice/annuity starting date.
At least 30 days and not more than 90 days prior to the Participant’s annuity
starting date, the Plan Administrator must provide a written notice (or a
summary notice as permitted under Treasury regulations) to a Participant who is
eligible to make an election under Section 6.01(A)(2) (“distribution notice”).
The distribution notice must explain the optional forms of benefit in the Plan,
including the material features and relative values of those options, and the
Participant’s right to postpone distribution until the applicable date
described in Section 6.01(A)(2). For all purposes of this Article VI, the term “annuity
starting date” means the first day of the first period for which the Plan pays
an amount as an annuity or in any other form but in no event is the “annuity
starting date” earlier than a Participant’s Separation from Service.

 

(5) Consent requirements/Participant distribution
election. A Participant must consent, in writing, following receipt
of the distribution notice, to any distribution under this Section 6.01, if at
the time of the distribution to the Participant, the Participant’s Vested
Account Balance exceeds $5,000 and the Participant has not attained the later
of Normal Retirement Age or age 62. Accounts which are distributable prior to
the foregoing applicable age are “immediately distributable.” Furthermore, the
Participant’s spouse also must consent, in writing, to any distribution, for
which Section 6.04 requires the spouse’s consent. The Participant may
reconsider his/her distribution election at any time prior to the annuity
starting date and elect to commence distribution as of any other distribution
date permitted under the Plan or under the Adoption Agreement. A Participant
may elect to receive distribution at any administratively practicable time
which is earlier than 30 days following the Participant’s receipt of the
distribution notice, by waiving in writing the balance of the 30 days. However,
if the requirements of Section 6.04 apply, the Participant may not elect to commence
distribution less than 7 days following the Participant’s receipt of the
distribution notice. The consent requirements of this Section 6.01(A)(5) do not
apply with respect to defaulted loans described in Section 10.03(E).

 

(6) Determination of Vested Account Balance.
For purposes of the consent requirements under this Article VI, the Plan
Administrator determines a Participant’s Vested Account Balance as of the most
recent valuation date immediately prior to the distribution date, and takes

 

21

 

into account the Participant’s
entire Account, including deferral contributions. The Plan Administrator in
determining the Participant’s Vested Account Balance at the relevant time, will
disregard a Participant’s Vested Account Balance existing on any prior date,
except as the Code otherwise may require.

 

(7) Consent to cash-out/forfeiture. If a
Participant is partially-Vested in his/her Account Balance, a Participant’s
election under Section 6.01(A)(2) to receive distribution prior to the
Participant’s incurring a Forfeiture Break in Service, must be in the form of a
cash-out distribution as defined in Section 5.04.

 

(8) Return to employment. A Participant may not
receive a distribution by reason of Separation from Service, or continue any
installment distribution based on a prior Separation from Service, if, prior to
the time the Trustee actually makes the distribution, the Participant returns
to employment with the Employer.

 

(B) Distribution
upon Death. In the
event of the Participant’s Separation from Service on account of death, the
Plan Administrator will direct the Trustee, in accordance with this Section
6.01(B) and subject to Section 6.02(D), to distribute to the Participant’s
Beneficiary the Participant’s Vested Account Balance remaining in the Trust at
the time of the Participant’s death.

 

The Plan Administrator,
subject to the requirements of Sections 6.04 and 6.02(D) or to a Beneficiary’s
written election (if authorized by the next paragraph of this Section 6.01(B)),
must direct the Trustee to distribute or commence distribution of the deceased
Participant’s Vested Account Balance, as soon as administratively practicable
following the Participant’s death or, if later, the date on which the Plan
Administrator receives notification of, or otherwise confirms, the Participant’s
death. If the Participant’s Vested Account Balance determined in accordance
with Section 6.01(A)(6) does not exceed $5,000, the Trustee will distribute the
balance in a lump sum without regard to Section 6.04. If the Participant’s
Vested Account Balance exceeds $5,000, the Trustee will distribute the balance
subject to Section 6.02(D).

 

If the Participant’s death
benefit is payable in full to the Participant’s surviving spouse, the surviving
spouse may elect distribution at any time and in any form (except a joint and
survivor annuity) the Plan would permit a Participant to elect upon Separation
from Service. The Participant, on a form prescribed by the Plan Administrator,
may (subject to the requirements of Section 6.04) elect the payment method or
the payment term or both, which will apply to any Beneficiary, including
his/her surviving spouse. The Participant’s election may limit any Beneficiary’s
right to increase the frequency or the amount of any payments. Any payment term
elected by the Participant must not exceed the payment term the Code otherwise
would permit the Beneficiary to elect upon the Participant’s death.

 

(C) In-Service
Distribution. The
Employer must elect in its Adoption Agreement the distribution election rights,
if any, a Participant has prior to his/her Separation from Service (“in-service
distribution”). Subject to any contrary Employer election in Appendix A to its
Adoption Agreement, a Participant upon attaining age 70 1/2, until he/she
incurs a Separation from Service, has a continuing election to receive all or
any portion of his/her Account Balance, including Employer contributions and
Participant contributions. If the Employer elects in its Adoption Agreement
additional in-service distribution of any Employer contribution (including
deferral contributions), the Employer in its Adoption Agreement must specify
events or conditions, if any, applicable to such in-service distributions. For
special requirements regarding hardship distributions, see Section 6.09. The
Employer also must elect in its Adoption Agreement the additional in-service
distribution rights, if any, a Participant has with respect to Participant
contributions as defined in Section 4.01. If a Participant receives an
in-service distribution as to a partially-Vested Account, and the Participant
has not incurred a Forfeiture Break in Service, the Plan Administrator will
apply the vesting provisions of Section 5.03(A).

 

A Participant must make any
permitted in-service distribution election under this Section 6.01(C) in
writing and on a form prescribed by the Plan Administrator which specifies the
percentage or dollar amount of the distribution and the Participant’s Plan
Account (Employer contributions or Participant contributions and type) to which
the election applies. If the Plan permits in-service distributions, a
Participant only may elect to receive one in-service distribution per Plan Year
under this Section 6.01(C) unless the election form prescribed by the Plan
Administrator provides for more frequent distributions. The Trustee, as
directed by the Plan Administrator and subject to Sections 6.01(A)(4),
6.01(A)(5) and 6.04, will distribute the amount(s) a Participant elects in
single sum, as soon as administratively practicable after the Participant files
his/her in-service distribution election with the Plan Administrator. The
Trustee will distribute the Participant’s remaining Account Balance in
accordance with the other provisions of this Article VI.

 

The Trustee, prior to a
Participant’s Normal Retirement Age or Disability may not make any in-service
distribution to the Participant with respect to his/her Account Balance
attributable to assets (including post-transfer earnings on those assets) and
liabilities transferred, within the meaning of Code §414(l), to a profit
sharing plan from a money purchase pension plan or from a target benefit plan
qualified under Code §401(a) (other than any portion of those assets and
liabilities attributable to Employee contributions).

 

6.02 REQUIRED MINIMUM
DISTRIBUTIONS.

 

(A) Priority
of Required Minimum Distribution. If any distribution under this Article VI (by Plan provision or by
Participant election or nonelection), would commence later than the Participant’s
required beginning date (“RBD”), the Plan Administrator instead must direct the
Trustee to make distribution on the Participant’s RBD, subject only to the
TEFRA election, if applicable, under Section 6.11. The Employer in its Adoption
Agreement Appendix B may elect to apply a special effective date to the RBD
definition or may elect in Appendix A to continue to apply the RBD definition
in effect prior to 1997 (“pre-SBJPA RBD”). The Employer in its Adoption
Agreement also may elect to require distribution earlier than the RBD.

 

22

 

(1) RBD – more than 5% owner. A Participant’s
RBD is the April 1 following the close of the calendar year in which the
Participant attains age 70 1/2 if the Participant is a more than 5% owner (as
defined in Code §416) with respect to the Plan Year ending in that calendar
year. If a Participant is a more than 5% owner at the close of the relevant
calendar year, the Participant may not discontinue required minimum
distributions notwithstanding the Participant’s subsequent change in ownership
status.

 

(2) RBD – non 5% owners. If the Participant is
not a more than 5% owner, his/her RBD is the April 1 following the close of the
calendar year in which the Participant incurs a Separation from Service or, if
later, the April 1 following the close of the calendar year in which the
Participant attains age 70 1/2. If a Participant is not a more than 5% owner,
his/her pre-SBJPA RBD (if applicable) is April 1 following the close of the
calendar year in which the Participant attains age 70 1/2.

 

(3) Form of distribution. The Trustee will make
a required minimum distribution at the Participant’s RBD in a lump sum (or, if
applicable, the annuity form of distribution required under Section 6.04)
unless the Participant, pursuant to the provisions of this Article VI, makes a
valid election to receive an alternative form of payment.

 

(B) Participant
Transitional Elections.

 

(1) Election to discontinue distributions. A
Participant who: (a) is not a more than 5% owner; (b) had attained age 70 1/2
prior to 1997; (c) had commenced prior to 1997 required minimum distributions
under the pre-SBJPA RBD; and (d) has not incurred a Separation from Service,
has a continuing election to discontinue receiving distributions from the Plan
(which previously were required minimum distributions under the Plan). A
Participant who makes an election under this Section 6.02(B)(1) must establish
a new annuity starting date when he/she recommences payment of his/her Account
Balance under the Plan. A married Participant who is subject to Section 6.04
must obtain spousal consent: (a) to discontinue his/her distributions under
this Section 6.02(B)(1) if distributions are in QJSA form; and (b) to
recommence benefits in a form other than a QJSA. A Participant may not make any
election under this Section 6.02(B)(1) which is inconsistent with any QDRO
applicable to the Participant’s Account.

 

(2) Election to postpone distributions. A
Participant who: (a) is not a more than 5% owner; and (b) attained age 70 1/2
after 1996 (or who attained age 70 1/2 in 1996, but who had not commenced
his/her required minimum distributions in 1996) may elect under this Section
6.02(B)(2) to postpone distribution of required minimum distributions until the
Participant’s RBD established under Section 6.02(A). If the Participant
attained age 70 1/2 in 1996, he/she must have elected under this Section
6.02(B)(2) to postpone distributions by December 31, 1997. If the Participant
attained age 70 1/2 after 1996, he/she must make the election to postpone
distribution under this Section 6.02(B)(2) not later than April 1 of the
calendar year following the year in which the Participant attains age 70 1/2.

 

(3) Election requirements. All Participant
elections made under this Section 6.02(B) are subject to and must be consistent
with the Employer’s RBD elections in its Adoption Agreement Appendices A and B.
A Participant makes his/her election under this Section 6.02(B) in writing on a
form prescribed by the Plan Administrator.

 

(C) Minimum
Distribution Requirements for Participants. The Plan Administrator may not direct the
Trustee to distribute the Participant’s Vested Account Balance, nor may the
Participant elect to have the Trustee distribute his/her Vested Account Balance,
under a method of payment which, as of the Participant’s RBD, does not satisfy
the minimum distribution requirements under Code §401(a)(9) and the applicable
Treasury regulations.

 

(1) Calculation of amount. The required minimum
distribution for a calendar year (“distribution calendar year”) equals the
Participant’s Vested Account Balance as of the latest valuation date preceding
the beginning of the distribution calendar year (such valuation date being
within the “valuation calendar year”) divided by the Participant’s life
expectancy or, if applicable, the joint and last survivor expectancy of the
Participant and his/her designated Beneficiary (as determined under Article
VIII, subject to the requirements of Code §401(a)(9)). The Plan Administrator
will increase the Participant’s Vested Account Balance, as determined on the
relevant valuation date, for contributions or forfeitures allocated after the
valuation date and by December 31 of the valuation calendar year, and will
decrease the valuation by distributions made after the valuation date and by
December 31 of the valuation calendar year. For purposes of this valuation, any
portion of the required minimum distribution for the first distribution
calendar year made after the close of that year is a distribution occurring in
that first distribution calendar year.

 

(2) Recalculation. In computing a required
minimum distribution, the Plan Administrator must use the unisex life
expectancy multiples under Treas. Reg. §1.72-9. The Plan Administrator, only
upon the Participant’s timely election, will compute the required minimum
distribution for a distribution calendar year subsequent to the first
distribution calendar year by redetermining (“recalculation” of) the
Participant’s life expectancy or the Participant’s and spouse designated
Beneficiary’s life expectancies as elected. However, the Plan Administrator may
not redetermine the joint life and last survivor expectancy of the Participant
and a nonspouse designated Beneficiary in a manner which takes into account any
adjustment to a life expectancy other than the Participant’s life expectancy. A
Participant must elect recalculation under this Section 6.02(C)(2) in writing
and on a form the Plan Administrator prescribes, not later than the Participant’s
RBD.

 

(3) Minimum distribution incidental benefit (MDIB). If
the Participant’s spouse is not his/her designated Beneficiary, a method of
payment to the Participant (whether by Participant election or by Plan
Administrator direction) must satisfy the MDIB requirement under Code
§401(a)(9) for distributions made on or after the Participant’s RBD and before
the Participant’s death. To satisfy the MDIB requirement, the Plan
Administrator will compute the Participant’s required

 

23

 

minimum distribution by
substituting the applicable MDIB divisor for the applicable life expectancy
factor, if the MDIB divisor is a lesser number. Following the Participant’s
death, the Plan Administrator will compute the minimum distribution required by
Section 6.02(D) solely on the basis of the applicable life expectancy factor
and will disregard the MDIB factor.

 

(4) Payment due date. The required minimum
distribution for the first distribution calendar year is due by the Participant’s
RBD. The required minimum distribution for each subsequent distribution
calendar year, including the calendar year in which the Participant’s RBD
occurs, is due by December 31 of that year.

 

(5) Nontransferable annuity. If the Participant
receives distribution in the form of a Nontransferable Annuity, the
distribution satisfies this Section 6.02(C) if the contract complies with the
requirements of Code §401(a)(9).

 

(D) Minimum
Distribution Requirements for Beneficiaries. The method of distribution to the Participant’s
Beneficiary must satisfy Code §401(a)(9).

 

(1) Death after RBD. If the Participant’s death
occurs after his/her RBD (or earlier, if the Participant had commenced an
irrevocable annuity pursuant to Section 6.04), the Trustee must distribute the
Participant’s remaining benefit to the Beneficiary at least as rapidly as under
the method in effect for the Participant, determined without regard to the MDIB
requirements of Section 6.02(C)(3).

 

(2) Death prior to RBD. If the Participant’s
death occurs prior to his/her RBD (and the Participant had not commenced an
irrevocable annuity pursuant to Section 6.04), the method of payment to the
Beneficiary, subject to Section 6.04, must provide for completion of payment to
the Beneficiary over a period not exceeding: (a) 5 years after the date of the
Participant’s death; or (b) if the Beneficiary is a designated Beneficiary, the
designated Beneficiary’s life expectancy. A designated Beneficiary is a
Beneficiary designated by the Participant or determined under Section 8.02. The
Plan Administrator may not direct payment of the Participant’s Vested Account
Balance over a period described in clause (b) unless the Trustee will commence
payment to the designated Beneficiary no later than the December 31 following
the close of the calendar year in which the Participant’s death occurred or, if
later, and the designated Beneficiary is the Participant’s surviving spouse,
December 31 of the calendar year in which the Participant would have attained
age 70 1/2.

 

If the Trustee will make
distribution in accordance with clause (b) of this Section 6.02(D)(2), the
minimum distribution for a distribution calendar year equals the Participant’s
Vested Account Balance as of the latest valuation date preceding the beginning
of the distribution calendar year divided by the designated Beneficiary’s life
expectancy. The Plan Administrator must use the unisex life expectancy
multiples under Treas. Reg. §1.72-9 for purposes of applying this Section
6.02(D).

 

(3) Recalculation. The Plan Administrator, only
upon the Participant’s election (under Section 6.02(C)(2)) or the Participant’s
surviving spouse designated Beneficiary’s election, will recalculate the life
expectancy of the Participant’s surviving spouse not more frequently than
annually. However, the Plan Administrator may not recalculate the life
expectancy of a nonspouse designated Beneficiary after the Trustee commences
payment to the designated Beneficiary. The Plan Administrator will apply this
Section 6.02(D) by treating any amount paid to the Participant’s child, which
becomes payable to the Participant’s surviving spouse upon the child’s
attaining the age of majority, as paid to the Participant’s surviving spouse. A
surviving spouse designated Beneficiary must elect recalculation under this
Section 6.02(D)(3) in writing and on a form the Plan Administrator prescribes
not later than the last day of the spouse’s first distribution year.

 

(4) Beneficiary election. If the Participant
under Section 6.01(B) had not elected the payment method or payment term, the
Participant’s Beneficiary must elect the method of distribution no later than
the date specified above upon which the Trustee must commence distribution to
the Beneficiary. If the Beneficiary fails to elect timely a distribution
method, the Plan Administrator must commence distribution within the time
required for a Participant who dies without a designated Beneficiary.

 

(E) Model
Amendment. The
employer in Appendix B to its Adoption Agreement may elect to apply the
following IRS Model Amendment:

 

With respect to
distributions under the Plan made on or after the effective date the Employer
specifies in Appendix B to its Adoption Agreement, for calendar years beginning
on or after January 1, 2001, the Plan will apply the minimum distribution
requirements of section 401(a)(9) of the Internal Revenue Code in accordance
with the regulations under section 401(a)(9) that were proposed on January 17,
2001, (the “2001 Proposed Regulations”), notwithstanding any provision of the
Plan to the contrary. If the total amount of required minimum distributions
made to a Participant for 2001 prior to the Appendix B effective date are equal
to or greater than the amount of required minimum distributions determined
under the 2001 Proposed Regulations, then no additional distributions are
required for such Participant for 2001 on or after such date. If the total
amount of required minimum distributions made to a Participant for 2001 prior
to the Appendix B effective date are less than the amount determined under the
2001 Proposed Regulations, then the amount of required minimum distributions
for 2001 on or after such date will be determined so that the total amount of
required minimum distributions for 2001 is the amount determined under the 2001
Proposed Regulations. This amendment shall continue in effect until the last
calendar year beginning before the effective date of final regulations under
section 401(a)(9) or such other date as may be published by the Internal
Revenue Service.

 

6.03 METHOD OF
DISTRIBUTION. Subject to any contrary requirements imposed by Sections 6.01
(including 6.01(C) regarding in-service distributions), 6.02 or 6.04, a
Participant or a Beneficiary may elect distribution under one, or any
combination, of the following methods: (a) by

 

24

 

payment in a lump sum; or
(b) by payment in monthly, quarterly or annual installments over a fixed
reasonable period of time, not exceeding the life expectancy of the
Participant, or the joint life and last survivor expectancy of the Participant
and his/her designated Beneficiary. The Employer may elect in its Adoption
Agreement to modify the methods of payment available under this Section 6.03.
If the Employer’s Plan is a restated Plan, the Employer in its Adoption
Agreement and in accordance with Treas. Reg. §1.411(d)-4, may elect to
eliminate from the prior Plan certain Protected Benefits. If the Employer
elects or is required to provide an annuity, the annuity must: (1) be a
Nontransferable Annuity; and (2) otherwise comply with the Plan terms.

 

The distribution options
permitted under this Section 6.03 are available only if the Participant’s
Vested Account Balance, as determined under Section 6.01(A)(6), exceeds $5,000.
To facilitate installment payments under this Article VI, the Plan
Administrator under Section 9.08(B) may direct the Trustee to segregate all or
any part of the Participant’s Account Balance in a segregated investment
Account. Under an installment distribution, the Participant or the Beneficiary,
at any time, may elect to accelerate the payment of all, or any portion, of the
Participant’s unpaid Vested Account Balance.

 

Pending final accounting for
a valuation date, the Plan Administrator may make a partial distribution to a
Participant who has incurred a Separation from Service or to a Beneficiary.

 

6.04 ANNUITY
DISTRIBUTIONS TO PARTICIPANTS AND TO SURVIVING SPOUSES.

 

(A) Qualified
Joint and Survivor Annuity (QJSA). The Plan Administrator must direct the Trustee to distribute a married
or unmarried Participant’s Vested Account Balance in the form of a QJSA, unless
the Participant, and spouse if the Participant is married, waive the QJSA in
accordance with Section 6.05. If, as of the annuity starting date, the
Participant is married (even if the Participant has not been married throughout
the one year period ending on the annuity starting date), a QJSA is an
immediate annuity which is purchasable with the Participant’s Vested Account
Balance and which provides a life annuity for the Participant and a survivor
annuity payable for the remaining life of the Participant’s surviving spouse
equal to 50% of the amount of the annuity payable during the life of the
Participant. If, as of the annuity starting date, the Participant is not
married, a QJSA is an immediate life annuity for the Participant which is
purchasable with the Participant’s Vested Account Balance. A life annuity means
an annuity payable in equal installments for the life of the Participant that
terminates upon the Participant’s death.

 

(B) Qualified
Preretirement Survivor Annuity (QPSA). If
a married Participant dies prior to his/her annuity starting date, the Plan
Administrator will direct the Trustee to distribute a portion of the
Participant’s Vested Account Balance to the Participant’s surviving spouse in
the form of a QPSA, unless: (1) the Participant has a valid waiver election (as
described in Section 6.06) in effect; or (2) the Participant and his/her spouse
were not married throughout the one year period ending on the date of the
Participant’s death. The Employer in an Addendum to its Adoption Agreement may
elect not to apply the one year of marriage requirement in clause (2). A QPSA
is an annuity which is purchasable with 50% of the Participant’s Vested Account
Balance (determined as of the date of the Participant’s death) and which is
payable for the life of the Participant’s surviving spouse. The value of the
QPSA is attributable to Employer contributions and to Participant contributions
in the same proportion as the Participant’s Vested Account Balance is
attributable to those contributions. The portion of the Participant’s Vested
Account Balance not payable as a QPSA is payable to the Participant’s
Beneficiary, in accordance with the remaining provisions of this Article VI.

 

(C) Surviving
Spouse Elections. If
the Participant’s Vested Account Balance which the Trustee would apply to
purchase the QPSA exceeds $5,000, the Participant’s surviving spouse may elect
to have the Trustee commence payment of the QPSA at any time following the date
of the Participant’s death, but not later than the mandatory distribution
periods described in Section 6.02, and may elect any of the forms of payment
described in Section 6.03, in lieu of the QPSA. In the absence of an election
by the surviving spouse, the Plan Administrator must direct the Trustee to
distribute the QPSA on the earliest administratively practicable date following
the close of the Plan Year in which the latest of the following events occurs:
(1) the Participant’s death; (2) the date the Plan Administrator receives
notification of or otherwise confirms the Participant’s death; (3) the date the
Participant would have attained Normal Retirement Age; or (4) the date the
Participant would have attained age 62.

 

(D) Effect
of Waiver. If the
Participant has in effect a valid waiver election regarding the QJSA or the
QPSA, the Plan Administrator must direct the Trustee to distribute the
Participant’s Vested Account Balance in accordance with Sections 6.01, 6.02 and
6.03.

 

(E) Loan
Offset. The Plan
Administrator will reduce the Participant’s Vested Account Balance by any
security interest (pursuant to any offset rights authorized by Section
10.03(E)) held by the Plan by reason of a Participant loan, to determine the
value of the Participant’s Vested Account Balance distributable in the form of
a QJSA or QPSA, provided the loan satisfied the spousal consent requirement
described in Section 10.03(E).

 

(F) Effect
of QDRO. For purposes
of applying this Article VI, a former spouse (in lieu of the Participant’s
current spouse) is the Participant’s spouse or surviving spouse to the extent
provided under a QDRO described in Section 6.07. The provisions of this Section
6.04, and of Sections 6.05 and 6.06, apply separately to the portion of the
Participant’s Vested Account Balance subject to a QDRO and to the portion of
the Participant’s Vested Account Balance not subject to the QDRO.

 

(G) Vested
Account Balance Not Exceeding $5,000. The Trustee must distribute in a lump sum, a Participant’s Vested Account
Balance which the Trustee otherwise under Section 6.04 would apply to provide a
QJSA or QPSA benefit, where the Participant’s Vested Account Balance determined
under Section 6.01(A)(6) does not exceed $5,000.

 

25

 

(H) Profit
Sharing Plan Exception.
If this Plan is a profit sharing plan, the Employer in its Adoption Agreement
must elect the extent to which the preceding provisions of Section 6.04 apply.
The Employer may elect to exempt from the provisions of Section 6.04, all
Participants (“Exempt Participants”) except the following Participants to whom
Section 6.04 must be applied: (1) a Participant as respects whom the Plan is a
direct or indirect transferee from a plan subject to the Code §417 requirements
and the Plan received the transfer after December 31, 1984, unless the transfer
is an elective transfer described in Section 13.07; (2) a Participant who
elects a life annuity distribution (if Section 13.02 of the Plan requires the
Plan to provide a life annuity distribution option); and (3) a Participant
whose benefits under a defined benefit plan maintained by the Employer are
offset by benefits provided under this Plan. If the Employer elects to apply
this Section 6.04 to all Participants, the preceding provisions of this Section
6.04 apply to all Participants without regard to the limitations of this
Section 6.04(H). Sections 6.05 and 6.06 only apply to Participants to whom the
provisions of this Section 6.04 apply.

 

6.05 WAIVER ELECTION -
QJSA. At least 30 days and not more than 90 days before the Participant’s
annuity starting date, the Plan Administrator must provide the Participant a
written explanation of the terms and conditions of the QJSA, the Participant’s
right to make, and the effect of, an election to waive the QJSA benefit, the
rights of the Participant’s spouse regarding the waiver election and the
Participant’s right to make, and the effect of, a revocation of a waiver
election (“QJSA notice”). The Plan does not limit the number of times the
Participant may revoke a waiver of the QJSA or make a new waiver during the
election period. The Participant (and his/her spouse, if the Participant is
married), may revoke an election to receive a particular form of benefit at any
time until the annuity starting date.

 

A married Participant’s QJSA
waiver election is not valid unless: (a) the Participant’s spouse (to whom the
survivor annuity is payable under the QJSA), after the Participant has received
the QJSA notice, has consented in writing to the waiver election, the spouse’s
consent acknowledges the effect of the election, and a notary public or the
Plan Administrator (or his/her representative) witnesses the spouse’s consent;
(b) the spouse consents to the alternative form of payment designated by the
Participant or to any change in that designated form of payment; and (c) unless
the spouse is the Participant’s sole primary Beneficiary, the spouse consents
to the Participant’s Beneficiary designation or to any change in the
Participant’s Beneficiary designation. The spouse’s consent to a waiver of the
QJSA is irrevocable, unless the Participant revokes the waiver election. The
spouse may execute a blanket consent to the Participant’s future payment form
election or Beneficiary designation, if the spouse acknowledges the right to
limit his/her consent to a specific designation but, in writing, waives that
right.

 

The Plan Administrator will
accept as valid a waiver election which does not satisfy the spousal consent
requirements if the Plan Administrator establishes the Participant does not
have a spouse, the Plan Administrator is not able to locate the Participant’s
spouse, the Participant is legally separated or has been abandoned (within the meaning
of applicable state law) and the Participant has a court order to that effect,
or other circumstances exist under which the Secretary of the Treasury will
excuse the spousal consent requirement. If the Participant’s spouse is legally
incompetent to give consent, the spouse’s legal guardian (even if the guardian
is the Participant) may give consent.

 

6.06 WAIVER ELECTION –
QPSA. The Plan Administrator must provide a written explanation of the QPSA
to each married Participant (“QPSA notice”), within the following period which
ends last: (1) the period beginning on the first day of the Plan Year in which
the Participant attains age 32 and ending on the last day of the Plan Year in
which the Participant attains age 34; (2) a reasonable period after an Employee
becomes a Participant; (3) a reasonable period after Section 6.04 of the Plan
becomes applicable to the Participant; or (4) a reasonable period after the
Plan no longer satisfies the requirements for a fully subsidized benefit. A “reasonable
period” described in clauses (2), (3) and (4) is the period beginning one year
before and ending one year after the applicable event. If the Participant
separates from Service before attaining age 35, clauses (1), (2), (3) and (4)
do not apply and the Plan Administrator must provide the QPSA notice within the
period beginning one year before and ending one year after the Separation from
Service. The QPSA notice must describe, in a manner consistent with Treasury
regulations, the terms and conditions of the QPSA and of the waiver of the
QPSA, comparable to the QJSA notice required under Section 6.05. The Plan does
not limit the number of times the Participant may revoke a waiver of the QPSA
or make a new waiver during the election period. The election period for waiver
of the QPSA ends on the date of the Participant’s death.

 

A Participant’s QPSA waiver
election is not valid unless: (a) the Participant makes the waiver election
after the Participant has received the QPSA notice and no earlier than the
first day of the Plan Year in which he/she attains age 35; and (b) the Participant’s
spouse (to whom the QPSA is payable) satisfies or is excused from the consent
requirements as described in Section 6.05, except the spouse need not consent
to the form of benefit payable to the designated Beneficiary. The spouse’s
consent to the waiver of the QPSA is irrevocable, unless the Participant
revokes the waiver election. The spouse also may execute a blanket consent as
described in Section 6.05. Irrespective of the time of election requirement
described in clause (a), if the Participant separates from Service prior to the
first day of the Plan Year in which he/she attains age 35, the Plan
Administrator will accept a waiver election as respects the Participant’s
Account Balance attributable to his/her Service prior to his/her Separation from
Service. Furthermore, if a Participant who has not separated from Service makes
a valid waiver election, except for the timing requirement of clause (a), the
Plan Administrator will accept that election as valid, but only until the first
day of the Plan Year in which the Participant attains age 35.

 

6.07 DISTRIBUTIONS UNDER
QUALIFIED DOMESTIC RELATIONS ORDERS (QDRO). Notwithstanding any other
provision of this Plan, the Trustee, in accordance with the direction of the
Plan Administrator, must comply with the provisions of a QDRO, as defined in
Code §414(p), which is issued with respect to the Plan. This Plan specifically
permits

 

26

 

distribution to an alternate
payee under a QDRO at any time, irrespective of whether the Participant has
attained his/her earliest retirement age (as defined under Code §414(p)) under
the Plan. A distribution to an alternate payee prior to the Participant’s
attainment of earliest retirement age is available only if: (1) the QDRO
specifies distribution at that time or permits an agreement between the Plan
and the alternate payee to authorize an earlier distribution; and (2) if the
present value of the alternate payee’s benefits under the Plan exceeds $5,000,
and the QDRO requires, the alternate payee consents to any distribution
occurring prior to the Participant’s attainment of earliest retirement age.
Nothing in this Section 6.07 gives a Participant a right to receive
distribution at a time the Plan otherwise does not permit nor does Section 6.07
authorize the alternate payee to receive a form of payment the Plan does not
permit.

 

The Plan Administrator must
establish reasonable procedures to determine the qualified status of a domestic
relations order. Upon receiving a domestic relations order, the Plan
Administrator promptly will notify the Participant and any alternate payee
named in the order, in writing, of the receipt of the order and the Plan’s
procedures for determining the qualified status of the order. Within a
reasonable period of time after receiving the domestic relations order, the
Plan Administrator must determine the qualified status of the order and must
notify the Participant and each alternate payee, in writing, of the Plan
Administrator’s determination. The Plan Administrator must provide notice under
this paragraph by mailing to the individual’s address specified in the domestic
relations order, or in a manner consistent with DOL regulations.

 

If any portion of the
Participant’s Vested Account Balance is payable under the domestic relations
order during the period the Plan Administrator is making its determination of
the qualified status of the domestic relations order, the Plan Administrator
must maintain a separate accounting of the amounts payable. If the Plan
Administrator determines the order is a QDRO within 18 months of the date
amounts first are payable following receipt of the domestic relations order,
the Plan Administrator will direct the Trustee to distribute the payable
amounts in accordance with the QDRO. If the Plan Administrator does not make
its determination of the qualified status of the order within the 18-month
determination period, the Plan Administrator will direct the Trustee to
distribute the payable amounts in the manner the Plan would distribute if the
order did not exist and will apply the order prospectively if the Plan
Administrator later determines the order is a QDRO.

 

To the extent it is not
inconsistent with the provisions of the QDRO, the Plan Administrator under
Section 9.08(B) may direct the Trustee to segregate the QDRO amount in a
segregated investment account. The Trustee will make any payments or
distributions required under this Section 6.07 by separate benefit checks or
other separate distribution to the alternate payee(s).

 

6.08 DEFAULTED LOAN –
TIMING OF OFFSET. If a Participant or a Beneficiary defaults on a Plan
loan, the Plan Administrator will determine the timing of the reduction
(offset) of the Participant’s Vested Account Balance in accordance with this
Section 6.08 and the Plan Administrator’s loan policy. If, under the loan
policy a loan default also is a distributable event under the Plan, the
Trustee, at the time of the loan default, will offset the Participant’s Vested
Account Balance by the lesser of the amount in default (including accrued
interest) or the Plan’s security interest in that Vested Account Balance. If
the loan is from a money purchase pension plan or from a target benefit plan
and the loan default is a distributable event under the loan policy, the
Trustee will offset the Participant’s Account Balance in the manner described
above, only if the Participant has incurred a Separation from Service or has
attained Normal Retirement Age. If the loan is under a 401(k) arrangement, to
the extent the loan is attributable to the Participant’s deferral contributions
Account, qualified matching contributions Account, qualified nonelective
contributions Account or safe harbor contributions Account, the Trustee will
not offset the Participant’s Vested Account Balance unless the Participant has
incurred a Separation from Service or unless the Participant has attained age
59 1/2.

 

6.09 HARDSHIP
DISTRIBUTION. For purposes of this Plan, unless the Employer in its
Adoption Agreement Section 6.01 elects otherwise, a hardship distribution is a
distribution on account of one or more of the following immediate and heavy
financial needs: (1) expenses for medical care described in Code §213(d)
incurred by the Participant, by the Participant’s spouse, or by any of the
Participant’s dependents, or necessary to obtain such medical care; (2) costs
directly related to the purchase (excluding mortgage payments) of a principal
residence of the Participant; (3) payment of post-secondary education
tuition and related educational fees (including room and board), for the next
12-month period, for the Participant, for the Participant’s spouse, or for any
of the Participant’s dependents (as defined in Code §152); (4) payments
necessary to prevent the eviction of the Participant from his/her principal
residence or the foreclosure on the mortgage of the Participant’s principal
residence; or (5) any need the Revenue Service prescribes in a revenue
ruling, notice or other document of general applicability which satisfies the
safe harbor definition of hardship under Treas. Reg. §1.401(k)-1(d)(2)(iv)(A).
See Section 14.11(A) if a hardship distribution is from a Participant’s
elective deferral Account in a 401(k) arrangement. The Employer in its Adoption
Agreement Section 6.01 may elect to apply Section 14.11(A) to all Plan hardship
distributions. If the Plan permits a hardship distribution from more than one
Account type, the Plan Administrator may determine any ordering of a
Participant’s hardship distribution from the hardship distribution eligible
Accounts.

 

6.10 DIRECT ROLLOVER OF
ELIGIBLE ROLLOVER DISTRIBUTIONS.

 

(A) Participant
Election. A
Participant (including for this purpose, a former Employee) may elect, at the
time and in the manner prescribed by the Plan Administrator, to have any
portion of his/her eligible rollover distribution from the Plan paid directly
to an eligible retirement plan specified by the Participant in a direct
rollover election. For purposes of this Section 6.10, a Participant includes as
to their respective interests, a Participant’s surviving spouse and the
Participant’s spouse or former spouse who is an alternate payee under a QDRO.

 

27

 

(B) Rollover
and Withholding Notice.
At least 30 days and not more than 90 days prior to the Trustee’s distribution
of an eligible rollover distribution, the Plan Administrator must provide a
written notice (including a summary notice as permitted under applicable
Treasury regulations) explaining to the distributee the rollover option, the applicability
of mandatory 20% federal withholding to any amount not directly rolled over,
and the recipient’s right to roll over within 60 days after the date of receipt
of the distribution (“rollover notice”). If applicable, the rollover notice
also must explain the availability of income averaging and the exclusion of net
unrealized appreciation. A recipient of an eligible rollover distribution
(whether he/she elects a direct rollover or elects to receive the
distribution), also may elect to receive distribution at any administratively
practicable time which is earlier than 30 days (but not less than 7 days if
Section 6.04 applies) following receipt of the rollover notice.

 

(C) Default
rollover. The Plan
Administrator, in the case of a Participant who does not respond timely to the
notice described in Section 6.10(B), may make a direct rollover of the
Participant’s Account (as described in Revenue Ruling 2000-36 or in any
successor guidance) in lieu of distributing the Participant’s Account.

 

(D) Definitions. The following definitions apply to this
Section 6.10:

 

(1) Eligible rollover distribution. An eligible
rollover distribution is any distribution of all or any portion of the balance
to the credit of the Participant, except an eligible rollover distribution does
not include: (a) any distribution which is one of a series of substantially
equal periodic payments (not less frequently than annually) made for the life
(or life expectancy) of the Participant or the joint lives (or joint life
expectancies) of the Participant and the Participant’s designated beneficiary,
or for a specified period of ten years or more; (b) any Code §401(a)(9)
required minimum distribution; (c) the portion of any distribution which is not
includible in gross income (determined without regard to the exclusion of net
unrealized appreciation with respect to employer securities); (d) any hardship
distribution made after December 31, 1998, from a Participant’s deferral
contributions Account (except where the Participant also satisfies a non-hardship
distribution event described in Section 14.03(d)); and (e) any distribution
which otherwise would be an eligible rollover distribution, but where the total
distributions to the Participant during that calendar year are reasonably
expected to be less than $200.

 

(2) Eligible retirement plan. An eligible
retirement plan is an individual retirement account described in Code §408(a),
an individual retirement annuity described in Code §408(b), an annuity plan
described in Code §403(a), or a qualified trust described in Code §401(a),
which accepts the Participant’s or alternate payee’s eligible rollover
distribution. However, in the case of an eligible rollover distribution to the
surviving spouse, an eligible retirement plan is either an individual retirement
account or individual retirement annuity.

 

(3) Direct rollover. A direct rollover is a
payment by the Plan to the eligible retirement plan specified by the
distributee.

 

6.11 TEFRA ELECTIONS.
Notwithstanding the provisions of Sections 6.01, 6.02 and 6.03, if the
Participant (or Beneficiary) signed a written distribution designation prior to
January 1, 1984, (“TEFRA election”) the Plan Administrator must direct the
Trustee to distribute the Participant’s Vested Account Balance in accordance
with that election, subject however, to the survivor annuity requirements, if
applicable, of Sections 6.04, 6.05 and 6.06. This Section 6.11 does not apply
to a TEFRA election, and the Plan Administrator will not comply with that
election, if any of the following applies: (1) the elected method of
distribution would have disqualified the Plan under Code §401(a)(9) as in
effect on December 31, 1983; (2) the Participant did not have an Account
Balance as of December 31, 1983; (3) the election does not specify the timing
and form of the distribution and the death Beneficiaries (in order of
priority); (4) the substitution of a Beneficiary modifies the distribution
payment period; or, (5) the Participant (or Beneficiary) modifies or revokes
the election. In the event of a revocation, the Trustee must distribute, no
later than December 31 of the calendar year following the year of revocation,
the amount which the Participant would have received under Section 6.02 if the
distribution designation had not been in effect or, if the Beneficiary revokes
the distribution designation, the amount which the Beneficiary would have
received under Section 6.02 if the distribution designation had not been in
effect. The Plan Administrator will apply this Section 6.11 to rollovers and transfers
in accordance with Part J of the Code §401(a)(9) Treasury regulations.

 

28

 

ARTICLE VII

EMPLOYER ADMINISTRATIVE PROVISIONS

 

7.01 INFORMATION TO PLAN
ADMINISTRATOR. The Employer must supply current information to the Plan
Administrator as to the name, date of birth, date of employment, Compensation,
leaves of absence, Years of Service and date of Separation from Service of each
Employee who is, or who will be eligible to become, a Participant under the Plan,
together with any other information which the Plan Administrator considers
necessary to administer properly the Plan. The Employer’s records as to the
current information the Employer furnishes to the Plan Administrator are
conclusive as to all persons.

 

7.02 NO RESPONSIBILITY
FOR OTHERS. Except as required under ERISA, the Employer has no
responsibility or obligation under the Plan to Employees, Participants or
Beneficiaries for any act (unless the Employer also serves in such capacities)
required of the Plan Administrator, the Trustee, the Custodian, or of any other
service provider to the Plan.

 

7.03 INDEMNITY OF CERTAIN
FIDUCIARIES. The Employer will indemnify, defend and hold harmless the Plan
Administrator from and against any and all loss resulting from liability to
which the Plan Administrator may be subjected by reason of any act or omission
(except willful misconduct or gross negligence) in its official capacities in
the administration of this Trust or Plan or both, including attorneys’ fees and
all other expenses reasonably incurred in the Plan Administrator’s defense, in
case the Employer fails to provide such defense. The indemnification provisions
of this Section 7.03 do not relieve the Plan Administrator from any liability
the Plan Administrator may have under ERISA for breach of a fiduciary duty.
Furthermore, the Plan Administrator and the Employer may execute a written
agreement further delineating the indemnification agreement of this Section
7.03, provided the agreement is consistent with and does not violate ERISA. The
indemnification provisions of this Section 7.03 extend to any Trustee, third
party administrator, Custodian or other Plan service provider solely to the
extent provided by a written agreement executed by such persons and the
Employer.

 

7.04 EMPLOYER DIRECTION
OF INVESTMENT. The Employer has the right to direct the Trustee with
respect to the investment and re-investment of assets comprising the Trust Fund
only if and to the extent the Trustee consents in writing to permit such
direction.

 

7.05 EVIDENCE. Anyone
including the Employer, required to give data, statements or other information
relevant under the terms of the Plan (“evidence”) may do so by certificate,
affidavit, document or other form which the person to act in reliance may
consider pertinent, reliable and genuine, and to have been signed, made or
presented by the proper party or parties. The Plan Administrator and the
Trustee are protected fully in acting and relying upon any evidence described
under the immediately preceding sentence.

 

7.06 PLAN CONTRIBUTIONS.
The Employer is solely responsible to determine the proper amount of any Employer
contribution it makes to the Plan and for the timely deposit to the Trust of
the Employer’s Plan contributions.

 

7.07 EMPLOYER ACTION.
The Employer must take any action under the Plan in accordance with applicable
Plan provisions and with proper authority such that the action is valid and
under applicable law and is binding upon the Employer.

 

7.08 FIDUCIARIES NOT
INSURERS. The Trustee, the Plan Administrator and the Employer in no way
guarantee the Trust Fund from loss or depreciation. The Employer does not
guarantee the payment of any money which may be or becomes due to any person
from the Trust Fund. The liability of the Employer, the Plan Administrator and
the Trustee to make any payment from the Trust Fund at any time and all times
is limited to the then available assets of the Trust.

 

7.09 PLAN TERMS BINDING.
The Plan is binding upon the Employer, Trustee, Plan Administrator, Custodian
(and all other service providers to the Plan), upon Participants, Beneficiaries
and all other persons entitled to benefits, and upon the successors and assigns
of the foregoing persons.

 

7.10 WORD USAGE.
Words used in the masculine also apply to the feminine where applicable, and
wherever the context of the Plan dictates, the plural includes the singular and
the singular includes the plural. Titles of Plan and Adoption Agreement
sections are for reference only.

 

7.11 STATE LAW. The
law of the state of the Employer’s principal place of business will determine
all questions arising with respect to the provisions of the Plan, except to the
extent superseded by ERISA or other federal law. The Employer in an Addendum to
its Adoption Agreement and subject to applicable law, may elect to apply the
law of another state.

 

7.12 PROTOTYPE PLAN
STATUS. If the Plan fails initially to qualify or to maintain qualification
or if the Employer makes any amendment or modification to a provision of the
Plan (other than a proper completion of an elective provision under the
Adoption Agreement or the attachment of an Addendum authorized by the Plan or
by the Adoption Agreement), the Employer no longer may participate under this
Prototype Plan. The Employer also may not participate (or continue to
participate) in this Prototype Plan if the Trustee or Custodian does not have
the written consent of the Prototype Plan Sponsor required under Section 1.33
to serve in the capacity of Trustee or Custodian. If the Employer is not
entitled to participate under this Prototype Plan, the Plan is an
individually-designed plan and the reliance procedures specified in the
applicable Adoption Agreement no longer apply.

 

29

 

7.13 EMPLOYMENT NOT
GUARANTEED. Nothing contained in this Plan, or with respect to the
establishment of the Trust, or any modification or any amendment to the Plan or
Trust, or in the creation of any Account, or with respect to the payment of any
benefit, gives any Employee, Participant or any Beneficiary any right to
employment or to continued employment by the Employer, or any legal or
equitable right against the Employer, the Trustee, the Plan Administrator or
any employee or agent thereof, except as expressly provided by the Plan, the
Trust, ERISA or other applicable law.

 

30

 

ARTICLE VIII

PARTICIPANT ADMINISTRATIVE PROVISIONS

 

8.01 BENEFICIARY
DESIGNATION. A Participant from time to time may designate, in writing, any
person(s) (including a trust or other entity), contingently or successively, to
whom the Trustee will pay the Participant’s Vested Account Balance (including
any life insurance proceeds payable to the Participant’s Account) in the event
of death. A Participant also may designate the form and method of payment of
his/her Account. The Plan Administrator will prescribe the form for the
Participant’s written designation of Beneficiary and, upon the Participant’s
filing the form with the Plan Administrator, the form effectively revokes all
designations filed prior to that date by the same Participant. A divorce
decree, or a decree of legal separation, revokes the Participant’s designation,
if any, of his/her spouse as his/her Beneficiary under the Plan unless: (1) the
decree or a QDRO provides otherwise; or (2) the Employer provides otherwise in
an Addendum to its Adoption Agreement. The foregoing revocation provision (if
applicable) applies only with respect to a Participant whose divorce or legal
separation becomes effective on or following the date the Employer executes
this Plan, unless the Employer in its Adoption Agreement specifies a different
effective date.

 

(A) Coordination
with Survivor Annuity Requirements. If Section 6.04 applies to the Participant, this Section 8.01 does not
impose any special spousal consent requirements on the Participant’s
Beneficiary designation unless the Participant waives the QJSA or QPSA benefit.
If the Participant waives the QJSA or QPSA benefit without spousal consent to
the Participant’s Beneficiary designation: (1) any waiver of the QJSA or of the
QPSA is not valid; and (2) if the Participant dies prior to his/her annuity
starting date, the Participant’s Beneficiary designation will apply only to the
portion of the death benefit which is not payable as a QPSA. Regarding clause
(2), if the Participant’s surviving spouse is a primary Beneficiary under the
Participant’s Beneficiary designation, the Trustee will satisfy the spouse’s
interest in the Participant’s death benefit first from the portion which is
payable as a QPSA.

 

(B) Profit
Sharing Plan Exception.
If the Plan is a profit sharing plan, the Beneficiary designation of a married
Exempt Participant, as described in Section 6.04(H), is not valid unless the
Participant’s spouse consents (in a manner described in Section 6.05) to the
Beneficiary designation. The spousal consent requirement in this Section
8.01(B) does not apply if the Participant’s spouse is the Participant’s sole
primary Beneficiary, or if the Exempt Participant and his/her spouse are not
married throughout the one-year period ending on the date of the Participant’s
death.

 

(C) Incapacity
of Beneficiary. If,
in the opinion of the Plan Administrator, a Beneficiary is not able to care for
his/her affairs because of a mental condition, physical condition or by reason
of age, the Plan Administrator will apply the provisions of Section 10.09.

 

8.02 NO BENEFICIARY
DESIGNATION/DEATH OF BENEFICIARY. If a Participant fails to name a
Beneficiary in accordance with Section 8.01, or if the Beneficiary named by a
Participant predeceases the Participant, then the Trustee will pay the
Participant’s Vested Account Balance in accordance with Section 6.03 in the
following order of priority (unless the Employer specifies a different order of
priority in an Addendum to its Adoption Agreement), to:

 

(a) The Participant’s
surviving spouse (without regard to the one-year marriage rule of Sections
6.04(B) and 8.01(B); and if no surviving spouse to

 

(b) The Participant’s
children (including adopted children), in equal shares by right of
representation (one share for each surviving child and one share for each child
who predeceases the Participant with living descendents); and if none to

 

(c) The Participant’s
surviving parents, in equal shares; and if none to

 

(d) The Participant’s
estate.

 

If the Beneficiary survives
the Participant, but dies prior to distribution of the Participant’s entire
Vested Account Balance, the Trustee will pay the remaining Vested Account
Balance to the Beneficiary’s estate unless: (1) the Participant’s
Beneficiary designation provides otherwise; (2) the Beneficiary has
properly designated a beneficiary; or (3) the Employer provides otherwise
in an Addendum to its Adoption Agreement. A Beneficiary only may designate a
beneficiary for the Participant’s Account Balance remaining at the Beneficiary’s
death, if the Participant has not previously designated a successive contingent
beneficiary and the Beneficiary’s designation otherwise complies with the Plan
terms. If the Plan is a profit sharing plan, and the Plan includes Exempt
Participants, the Employer may not specify a different order of priority in an
Addendum unless the Participant’s surviving spouse will be the sole primary
Beneficiary in the different order of priority. The Plan Administrator will
direct the Trustee as to the method and to whom the Trustee will make payment
under this Section 8.02.

 

8.03 ASSIGNMENT OR
ALIENATION. Except as provided in Code §414(p) relating to QDROs and in
Code §401(a)(13) relating to certain voluntary, revocable assignments,
judgments and settlements, neither a Participant nor a Beneficiary may
anticipate, assign or alienate (either at law or in equity) any benefit
provided under the Plan, and the Trustee will not recognize any such
anticipation, assignment or alienation. Furthermore, except as provided by Code
§401(a)(13) or other applicable law, a benefit under the Plan is not subject to
attachment, garnishment, levy, execution or other legal or equitable process.

 

8.04 INFORMATION
AVAILABLE. Any Participant or Beneficiary may examine copies of the Plan
description, latest annual report, any bargaining agreement, this Plan and
Trust, and any contract or any other instrument which relates to the
establishment or administration of the Plan or Trust. The Plan Administrator
will maintain all of the items listed in this Section 8.04 in its office, or in
such other place or places as it may designate from time to time in

 

31

 

order to comply with the
regulations issued under ERISA, for examination during reasonable business
hours. Upon the written request of a Participant or a Beneficiary, the Plan
Administrator must furnish the Participant or Beneficiary with a copy of any
item listed in this Section 8.04. The Plan Administrator may make a reasonable
copying charge to the requesting person.

 

8.05 CLAIMS PROCEDURE FOR
DENIAL OF BENEFITS. A Participant or a Beneficiary may file with the Plan
Administrator a written claim for benefits, if the Participant or the
Beneficiary disputes the Plan Administrator’s determination regarding the
Participant’s or Beneficiary’s Plan benefit. However, the Plan will distribute
only such Plan benefits to Participants or Beneficiaries as the Plan
Administrator in its discretion determines a Participant or Beneficiary is
entitled to. The Plan Administrator will maintain a separate written document
as part of (or which accompanies) the Plan’s summary plan description
explaining the Plan’s claims procedure. This Section 8.05 specifically
incorporates the written claims procedure as from time to time published by the
Plan Administrator as a part of the Plan. If the Plan Administrator pursuant to
the Plan’s written claims procedure makes a final written determination denying
a Participant’s or Beneficiary’s benefit claim, the Participant or Beneficiary
to preserve the claim must file an action with respect to the denied claim not
later than 180 days following the date of the Plan Administrator’s final
determination.

 

8.06 PARTICIPANT DIRECTION
OF INVESTMENT. A Participant’s direction of the investment of his/her
Account is subject to the provisions of this Section 8.06. For purposes of this
Section 8.06, a Participant shall also include a Beneficiary where the
Beneficiary has succeeded to the Participant’s Account and the Plan affords the
Beneficiary the same self-direction or loan rights as a Participant.

 

(A) Trustee
Authorization and Procedures. A Participant has the right to direct the Trustee with respect to the
investment or re-investment of the assets comprising the Participant’s
individual Account only if the Trustee consents in writing to permit such
direction. If the Trustee consents to Participant direction of investment, the
Trustee only will accept direction from each Participant on a written direction
of investment form the Plan Administrator provides for this purpose. The
Trustee, or with the Trustee’s consent, the Plan Administrator, may establish
written procedures relating to Participant direction of investment under this
Section 8.06, including procedures or conditions for electronic transfers or
for changes in investments by Participants. The Plan Administrator will
maintain, or direct the Trustee to maintain, an appropriate individual
investment Account to the extent a Participant’s Account is subject to
Participant self-direction.

 

(B) ERISA
§404(c). No Plan
fiduciary (including the Employer and Trustee) is liable for any loss or for
any breach resulting from a Participant’s direction of the investment of any
part of his/her directed Account to the extent the Participant’s exercise of
his/her right to direct the investment of his/her Account satisfies the
requirements of ERISA §404(c).

 

(C) Participant
Loans. The Plan
Administrator, to the extent provided in a written loan policy adopted under
Section 9.04, will treat a Plan loan made to a Participant as a Participant
direction of investment under this Section 8.06, even if the Plan otherwise
does not permit a Participant to direct his/her Account investments. Where a
loan is treated as a directed investment, the borrowing Participant’s Account
alone shares in any interest paid on the loan, and it alone bears any expense
or loss it incurs in connection with the loan. The Trustee may retain any
principal or interest paid on the borrowing Participant’s loan in a segregated
Account (as described in Section 9.08(B)) on behalf of the borrowing
Participant until the Trustee (or the Named Fiduciary, in the case of a
nondiscretionary Trustee) deems it appropriate to add the loan payments to the
Participant’s Account under the Plan.

 

(D) Collectibles.
If the Trustee
consents to Participant direction of investment of his/her Account, any
post-December 31, 1981, investment by a Participant’s directed Account in
collectibles (as defined by Code §408(m)) is a deemed distribution to the
Participant for Federal income tax purposes.

 

32

 

ARTICLE IX

PLAN ADMINISTRATOR

 

9.01 COMPENSATION AND
EXPENSES. The Plan Administrator (and any individuals serving as Plan
Administrator) will serve without compensation for services as such, but the
Employer will pay all expenses of the Plan Administrator, except to the extent
the Trustee properly pays for such expenses, pursuant to Article X.

 

9.02 RESIGNATION AND
REMOVAL. If the Employer appoints one or more persons to serve as Plan
Administrator, such person(s) shall serve until they resign by written notice
to the Employer or until the Employer removes them by written notice. In case
of a vacancy in the position of Plan Administrator, the Employer will exercise
any and all of the powers, authority, duties and discretion conferred upon the
Plan Administrator pending the filling of the vacancy.

 

9.03 GENERAL POWERS AND
DUTIES. The Plan Administrator has the following general powers and duties
which are in addition to those the Plan otherwise accords to the Plan
Administrator:

 

(a)  To determine the
rights of eligibility of an Employee to participate in the Plan, all factual
questions that arise in the course of administering the Plan, the value of a
Participant’s Account Balance (based on the value of the Trust assets, as
determined by the Trustee) and the Vested percentage of each Participant’s
Account Balance;

 

(b) To adopt rules of
procedure and regulations necessary for the proper and efficient administration
of the Plan, provided the rules are not inconsistent with the terms of the
Plan, the Code, ERISA or other applicable law;

 

(c) To construe and
enforce the terms of the Plan and the rules and regulations the Plan
Administrator adopts, including interpretation of the basic plan document, the
Adoption Agreement and any document related to the Plan’s operation;

 

(d) To direct the
Trustee regarding the crediting and distribution of the Trust Fund and to
direct the Trustee to conduct interim valuations under Section 10.15;

 

(e) To review and
render decisions regarding a claim for (or denial of a claim for) a benefit
under the Plan;

 

(f) To furnish the
Employer with information which the Employer may require for tax or other
purposes;

 

(g) To engage the
service of agents whom the Plan Administrator may deem advisable to assist it
with the performance of its duties;

 

(h) To engage the
services of an Investment Manager or Managers (as defined in ERISA §3(38)),
each of whom will have full power and authority to manage, acquire or dispose
(or direct the Trustee with respect to acquisition or disposition) of any Plan
asset under such Manager’s control;

 

(i) To make any other
determinations and undertake any other actions the Plan Administrator believes
are necessary or appropriate for the administration of the Plan; and

 

(j) To establish and
maintain a funding standard account and to make credits and charges to the
account to the extent required by and in accordance with the provisions of the
Code.

 

The Plan Administrator must
exercise all of its powers, duties and discretion under the Plan in a uniform
and nondiscriminatory manner. The Plan Administrator shall have total and
complete discretion to interpret and construe the Plan and to determine all
questions arising in the administration, interpretation and application of the
Plan. Any determination the Plan Administrator makes under the Plan is final
and binding upon any affected person.

 

9.04 PLAN LOANS. The
Plan Administrator may, in its sole discretion, in accordance with Section
10.03(E) establish, amend or terminate from time to time, a nondiscriminatory
policy which the Trustee must observe in making Plan loans, if any, to
Participants and to Beneficiaries. If the Plan Administrator adopts a loan
policy, the loan policy must be a written document and must include: (1) the
identity of the person or positions authorized to administer the participant
loan program; (2) the procedure for applying for a loan; (3) the
criteria for approving or denying a loan; (4) the limitations, if any, on
the types and amounts of loans available; (5) the procedure for
determining a reasonable rate of interest; (6) the types of collateral
which may secure the loan; and (7) the events constituting default and the
steps the Plan will take to preserve Plan assets in the event of default. A
loan policy the Plan Administrator adopts under this Section 9.04 is part of
the Plan, except that the Plan Administrator may amend or terminate the policy
without regard to Section 13.02.

 

9.05 FUNDING POLICY.
The Plan Administrator will review, not less often than annually, all pertinent
Employee information and Plan data in order to establish the funding policy of
the Plan and to determine the appropriate methods of carrying out the Plan’s
objectives. The Plan Administrator must communicate periodically, as it deems
appropriate, to the Trustee and to any Plan Investment Manager the Plan’s
short-term and long-term financial needs for the coordination of the Plan’s
investment policy with Plan financial requirements.

 

9.06 INDIVIDUAL ACCOUNTS.
The Plan Administrator will maintain, or direct the Trustee to maintain, a
separate Account, or multiple Accounts, in the name of each Participant to
reflect the Participant’s Account Balance under the Plan.

 

(A) Forfeitures.
If a Participant
re-enters the Plan subsequent to his/her having a Forfeiture Break in Service,
the Plan Administrator, or the Trustee, must maintain a separate Account for
the Participant’s pre-Forfeiture Break in Service Account Balance and a
separate Account for his

 

33

 

post-Forfeiture Break in
Service Account Balance, unless the Participant’s entire Account Balance under
the Plan is 100% Vested.

 

If the Plan is subject to
Participant direction of investment under Section 8.06, the Plan Administrator
may maintain, or may direct the Trustee to maintain, a separate temporary
forfeiture Account in the name of the Plan to account for Participant
forfeitures which occur during the Plan Year. The Trustee will direct the
investment of any separate temporary forfeiture Account. As of each Accounting
Date, or interim valuation date, if applicable, the Plan Administrator will
allocate the net income, gain or loss from the temporary forfeiture Account, if
any, to the Accounts of the Participants in accordance with the provisions of
Section 9.08.

 

(B) Net Income, Gain or Loss. The Plan Administrator will make its
allocations of net income, gain or loss or request the Trustee to make its
allocations, to the Accounts of the Participants in accordance with the
provisions of Section 9.08. The Plan Administrator may direct the Trustee under
Section 9.08(B) to maintain a temporary segregated investment Account in the
name of a Participant to prevent a distortion of income, gain or loss
allocations. The Plan Administrator must maintain records of its activities.

 

9.07 VALUE OF PARTICIPANT’S
ACCOUNT BALANCE. If any or all Plan investment accounts are pooled, each
Participant’s Account has an undivided interest in the assets comprising the
pooled account. In a pooled account, the value of each Participant’s Account
Balance consists of that proportion of the net worth (at fair market value) of
the Trust Fund which the net credit balance in his/her Account (exclusive of
the cash value of incidental benefit insurance contracts) bears to the total
net credit balance in the Accounts (exclusive of the cash value of the
incidental benefit insurance contracts) of all Participants plus the cash
surrender value of any incidental benefit insurance contracts held by the
Trustee on the Participant’s life. If any or all Plan investment accounts are
Participant directed, the directing Participant’s Account Balance is comprised
of the assets held within the Account and the value of the Account is the fair
market value of such assets. For purposes of a distribution under the Plan, the
value of a Participant’s Account Balance is its value as of the valuation date
immediately preceding the date of the distribution.

 

9.08 ALLOCATION AND
DISTRIBUTION OF NET INCOME, GAIN OR LOSS. This Section 9.08 applies solely
to the allocation of net income, gain or loss of the Trust Fund. The Plan
Administrator will allocate Employer contributions and Participant forfeitures,
if any, in accordance with Article III.

 

A “valuation date” under
this Plan is each: (1) Accounting Date; (2) valuation date the Employer elects
in its Adoption Agreement Section 10.15; or (3) valuation date the Plan
Administrator establishes under Section 9.03. The Employer in its Adoption
Agreement Section 10.15 or the Plan Administrator may elect alternative
valuation dates for the different Account types which the Plan Administrator
maintains under the Plan. As of each valuation date, the Plan Administrator
must adjust Accounts to reflect net income, gain or loss since the last
valuation date. The valuation period is the period beginning on the day after
the last valuation date and ending on the current valuation date.

 

The Plan Administrator will
allocate net income, gain or loss to the Participant Accounts in accordance
with the daily valuation method, balance forward method, weighted average
method, or other method the Employer elects under its Adoption Agreement. The
Employer in its Adoption Agreement may elect alternative methods under which
the Plan Administrator will allocate the net income, gain or loss to the
different Account types which the Plan Administrator maintains under the Plan.
If the Employer in its Adoption Agreement elects to apply a weighted average
allocation method, the Plan Administrator will treat a weighted portion of the
applicable contributions as if includible in the Participant’s Account as of
the beginning of the valuation period. The weighted portion is a fraction, the
numerator of which is the number of months in the valuation period, excluding
each month in the valuation period which begins prior to the contribution date
of the applicable contributions, and the denominator of which is the number of months
in the valuation period. The Employer in its Adoption Agreement may elect to
substitute a weighting period other than months for purposes of this weighted
average allocation. If the Employer in its Adoption Agreement elects to apply
the daily valuation method, the Plan Administrator will allocate the net
income, gain or loss on each day of the Plan Year for which Plan assets are
valued on an established market and the Trustee is conducting business. If the
Employer in its Adoption Agreement elects to apply the balance forward method,
the Plan Administrator first will adjust the Participant Accounts, as those
Accounts stood at the beginning of the current valuation period, by reducing
the Accounts for any forfeitures arising under the Plan, for amounts charged
during the valuation period to the Accounts in accordance with Section 9.10
(relating to distributions and to loan disbursement payments) and Section 11.01
(relating to insurance premiums), and for the cash value of incidental benefit
insurance contracts. The Plan Administrator then, subject to the restoration
allocation requirements of the Plan, will allocate the net income, gain or loss
pro rata to the adjusted Participant Accounts. The allocable net income, gain
or loss is the net income (or net loss), including the increase or decrease in
the fair market value of assets, since the last valuation date.

 

(A) Trust
Fund (Pooled) Investment Accounts. A pooled investment account is an Account which is not a segregated
investment Account or an individual investment Account.

 

(B) Segregated
Investment Accounts.
A segregated investment Account receives all income it earns and bears all
expense or loss it incurs. Pursuant to the Plan Administrator’s direction, the
Trustee may establish for a Participant a segregated investment Account to
prevent a distortion of Plan income, gain or loss allocations or for such other
purposes as the Plan Administrator may direct. The Trustee will invest the
assets of a segregated investment Account consistent with such purposes. As of
each valuation date, the Plan Administrator must reduce a segregated Account
for any forfeiture arising under Section 5.09 after the Plan Administrator has
made all other

 

34

 

allocations, changes or
adjustments to the Account for the valuation period.

 

(C) Individual
(Directed) Investment Accounts. An individual investment Account is an Account which is subject to
Participant or Beneficiary self-direction under Section 8.06. An individual
investment Account receives all income it earns and bears all expense or loss
it incurs. As of each valuation date, the Plan Administrator must reduce an
individual Account for any forfeiture arising from Section 5.09 after the Plan
Administrator has made all other allocations, changes or adjustment to the
Account for the valuation period.

 

(D) Code
§415 Excess Amounts.
An Excess Amount or suspense account described in Part 2 of Article III does
not share in the allocation of net income, gain or loss described in this
Section 9.08.

 

(E) Interest
Adjustment. Any
distribution (other than a distribution from a segregated or individual
Account) made to a Participant or Beneficiary more than 90 days after the most
recent valuation date may include interest on the amount of the distribution as
an expense of the Trust Fund. The interest, if any, accrues from such valuation
date to the date of the distribution at the rate the Employer specifies in its
Adoption Agreement.

 

(F) Contributions
Prior to Accrual. If
the Employer in its Adoption Agreement elects to impose one or more allocation
conditions under Section 3.06 and the Employer contributes to the Plan amounts
which at the time of the contribution have not accrued under the Plan terms (“pre-accrual
contributions”), the Trustee will hold the pre-accrual contributions in the
Trust and will invest such contributions as the Trustee determines, pending
accrual and allocation to Participant Accounts. When the Plan Administrator
allocates to Participants who have satisfied the Plan’s allocation conditions
the Employer’s pre-accrual contributions, the Plan Administrator also will
allocate the net income, gain or loss thereon pro rata in relation to each
Participant’s share of the pre-accrual contribution.

 

9.09 INDIVIDUAL STATEMENT.
As soon as practicable after the Accounting Date of each Plan Year, but within
the time prescribed by ERISA and the regulations under ERISA, the Plan
Administrator will deliver to each Participant (and to each Beneficiary) a
statement reflecting the condition of his/her Account Balance in the Trust as
of that date and such other information ERISA requires be furnished the
Participant or the Beneficiary. No Participant, except the Plan Administrator,
has the right to inspect the records reflecting the Account of any other
Participant.

 

9.10 ACCOUNT CHARGED.
The Plan Administrator will charge a Participant’s Account for all
distributions made from that Account to the Participant, to his/her Beneficiary
or to an alternate payee, including a disbursement payment for a Participant
loan. The Plan Administrator, except as prohibited by the Code or ERISA, also
will charge a Participant’s Account for any reasonable administrative expenses
incurred by the Plan directly related to that Account.

 

9.11 LOST PARTICIPANTS.
If the Plan Administrator is unable to locate any Participant or Beneficiary
whose Account becomes distributable under Article VI or under Section 13.06 (a “lost
Participant”), the Plan Administrator will apply the provisions of this Section
9.11.

 

(A) Attempt
to Locate. The Plan
Administrator will use one or more of the following methods to attempt to
locate a lost Participant: (1) provide a distribution notice to the lost
Participant at his/her last known address by certified or registered mail; (2)
use of the IRS letter forwarding program under Rev. Proc. 94-22; (3) use of a
commercial locator service, the internet or other general search method; or (4)
use of the Social Security Administration search program.

 

(B) Failure
to Locate. If a lost
Participant remains unlocated for 6 months following the date of the Plan
Administrator first attempts to locate the lost Participant using one or more
of the methods described in Section 9.11(A), the Plan Administrator may forfeit
the lost Participant’s Account. If the Plan Administrator will forfeit the lost
Participant’s Account, the forfeiture occurs at the end of the above-described
6 month period and the Plan Administrator will allocate the forfeiture in
accordance with Section 3.05. If a lost Participant whose Account was forfeited
thereafter at any time but before the Plan has been terminated makes a claim
for his/her forfeited Account, the Plan Administrator will restore the
forfeited Account to the same dollar amount as the amount forfeited, unadjusted
for net income, gains or losses occurring subsequent to the forfeiture. The
Plan Administrator will make the restoration in the Plan Year in which the lost
Participant makes the claim, first from the amount, if any, of Participant
forfeitures the Plan Administrator otherwise would allocate for the Plan Year,
then from the amount, if any, of Trust net income or gain for the Plan Year and
last from the amount or additional amount the Employer contributes to the Plan
for the Plan Year. The Plan Administrator will distribute the restored Account
to the lost Participant not later than 60 days after the close of the Plan Year
in which the Plan Administrator restores the forfeited Account. The Plan
Administrator under this Section 9.11(B) will forfeit the entire Account of the
lost Participant, including deferral contributions and Participant
contributions.

 

(C) Nonexclusivity
and Uniformity. The
provisions of Section 9.11 are intended to provide permissible but not
exclusive means for the Plan Administrator to administer the Accounts of lost
Participants. The Plan Administrator may utilize any other reasonable method to
locate lost Participants and to administer the Accounts of lost Participants,
including the default rollover under Section 6.10(C) and such other methods as
the Revenue Service or the U.S. Department of Labor (“DOL”) may in the future
specify. The Plan Administrator will apply Section 9.11 in a reasonable,
uniform and nondiscriminatory manner, but may in determining a specific course
of action as to a particular Account, reasonably take into account differing
circumstances such as the amount of a lost Participant’s Account, the expense
in attempting to locate a lost Participant, the Plan Administrator’s ability to
establish and the expense of establishing a rollover IRA, and other factors.
The Plan Administrator may charge to the Account of a lost Participant the
reasonable expenses incurred under

 

35

 

this Section 9.11 and which
are associated with the lost Participant’s Account.

 

9.12 PLAN CORRECTION.
The Plan Administrator in conjunction with the Employer may undertake such
correction of Plan errors as the Plan Administrator deems necessary, including
correction to preserve tax qualification of the Plan under Code §401(a) or to
correct a fiduciary breach under ERISA. Without limiting the Plan Administrator’s
authority under the prior sentence, the Plan Administrator, as it determines to
be reasonable and appropriate, may undertake correction of Plan document,
operational, demographic and employer eligibility failures under a method
described in the Plan or under the Employee Plans Compliance Resolution System
(“EPCRS”) or any successor program to EPCRS. The Plan Administrator, as it
determines to be reasonable and appropriate, also may undertake or assist the
appropriate fiduciary or plan official in undertaking correction of a fiduciary
breach, including correction under the Voluntary Fiduciary Correction Program (“VFC”)
or any successor program to VFC. If the Plan includes a 401(k) arrangement, the
Plan Administrator to correct an operational error may require the Trustee to
distribute from the Plan elective deferrals or vested matching contributions,
including earnings, where such amounts result from an operational error other
than a failure of Code §415, Code §402(g), a failure of the ADP or ACP tests,
or a failure of the multiple use limitation.

 

9.13 NO RESPONSIBILITY
FOR OTHERS. Except as required under ERISA, the Plan Administrator has no
responsibility or obligation under the Plan to Participants or Beneficiaries
for any act (unless the Plan Administrator also serves in such capacities)
required of the Employer, the Trustee, the Custodian or of any other service
provider to the Plan. The Plan Administrator is not responsible to collect any
required plan contribution or to determine the correctness or deductibility or
any Employer contribution. The Plan Administrator in administering the Plan is
entitled to, but is not required to rely upon, information which a Participant,
Beneficiary, Trustee, Custodian, the Employer, a Plan service provider or
representatives thereof provide to the Plan Administrator.

 

9.14 NOTICE, DESIGNATION,
ELECTION, CONSENT AND WAIVER. All notices under the Plan and all
Participant or Beneficiary designations, elections, consents or waivers must be
in writing and made in a form the Plan Administrator specifies or otherwise
approves. To the extent permitted by Treasury regulations or other applicable
guidance, any Plan notice, election, consent or waiver may be transmitted
electronically. Any person entitled to notice under the Plan may waive the
notice or shorten the notice period except as otherwise required by the Code or
ERISA.

 

36

 

ARTICLE X

TRUSTEE AND CUSTODIAN, POWERS AND DUTIES

 

10.01 ACCEPTANCE. The
Trustee accepts the Trust created under the Plan and agrees to perform the
obligations imposed. The Trustee must provide bond for the faithful performance
of its duties under the Trust to the extent required by ERISA.

 

10.02 RECEIPT OF
CONTRIBUTIONS. The Trustee is accountable to the Employer for the Plan
contributions made by the Employer, but the Trustee does not have any duty to
ensure that the contributions received comply with the provisions of the Plan.
The Trustee is not obliged to collect any contributions from the Employer, nor
is the Trustee obliged to ensure that funds deposited with it are deposited
according to the provisions of the Plan.

 

10.03 INVESTMENT POWERS.

 

(A) Discretionary
Trustee Designation.
If the Employer, in its Adoption Agreement, designates the Trustee to
administer the Trust as a discretionary Trustee, then the Trustee has full
discretion and authority with regard to the investment of the Trust Fund,
except with respect to a Plan asset under the control or the direction of a
properly appointed Investment Manager or with respect to a Plan asset properly
subject to Employer, or to Participant direction of investment. The Trustee
must coordinate its investment policy with Plan financial needs as communicated
to it by the Plan Administrator. The Trustee is authorized and empowered, but
not by way of limitation, with the following powers, rights and duties:

 

(a) To invest
consistent with and subject to applicable law any part or all of the Trust Fund
in any common or preferred stocks, open-end or closed-end mutual funds
(including proprietary funds), put and call options traded on a national
exchange, United States retirement plan bonds, corporate bonds, debentures,
convertible debentures, commercial paper, U.S. Treasury bills, U.S. Treasury
notes and other direct or indirect obligations of the United States Government
or its agencies, improved or unimproved real estate situated in the United
States, limited partnerships, insurance contracts of any type, mortgages, notes
or other property of any kind, real or personal, to buy or sell options on
common stock on a nationally recognized exchange with or without holding the
underlying common stock, to open and to maintain margin accounts, to engage in
short sales, to buy and sell commodities, commodity options and contracts for
the future delivery of commodities, and to make any other investments the
Trustee deems appropriate, as a prudent person would do under like circumstances
with due regard for the purposes of this Plan. Any investment made or retained
by the Trustee in good faith is proper but must be of a kind constituting a
diversification considered by law suitable for trust investments.

 

(b) To retain in cash
so much of the Trust Fund as it may deem advisable to satisfy liquidity needs
of the Plan and to deposit any cash held in the Trust Fund in a bank account at
reasonable interest.

 

(c) To invest, if the
Trustee is a bank or similar financial institution supervised by the United
States or by a state, in any type of deposit of the Trustee (or of a bank
related to the Trustee within the meaning of Code §414(b)) at a reasonable rate
of interest or in a common trust fund, as described in Code §584, or in a
collective investment fund, the provisions of which govern the investment of
such assets and which the Plan incorporates by this reference, which the
Trustee (or its affiliate, as defined in Code §1504) maintains exclusively for
the collective investment of money contributed by the bank (or the affiliate)
in its capacity as trustee and which conforms to the rules of the Comptroller
of the Currency.

 

(d) To manage, sell,
contract to sell, grant options to purchase, convey, exchange, transfer,
abandon, improve, repair, insure, lease for any term even though commencing in
the future or extending beyond the term of the Trust, and otherwise deal with
all property, real or personal, in such manner, for such considerations and on
such terms and conditions as the Trustee decides.

 

(e) To credit and
distribute the Trust Fund as directed by the Plan Administrator. The Trustee is
not obliged to inquire as to whether any payee or distributee is entitled to
any payment or whether the distribution is proper or within the terms of the
Plan, or as to the manner of making any payment or distribution. The Trustee is
accountable only to the Plan Administrator for any payment or distribution made
by it in good faith on the order or direction of the Plan Administrator.

 

(f) To borrow money, to
assume indebtedness, extend mortgages and encumber by mortgage or pledge.

 

(g) To compromise,
contest, arbitrate or abandon claims and demands, in the Trustee’s discretion.

 

(h) To have with
respect to the Trust all of the rights of an individual owner, including the
power to exercise any and all voting rights associated with Trust assets, to
give proxies, to participate in any voting trusts, mergers, consolidations or
liquidations, to tender shares and to exercise or sell stock subscriptions or
conversion rights.

 

(i) To lease for oil,
gas and other mineral purposes and to create mineral severances by grant or
reservation; to pool or unitize interests in oil, gas and other minerals; and
to enter into operating agreements and to execute division and transfer orders.

 

(j) To hold any
securities or other property in the name of the Trustee or its nominee, with
depositories or agent depositories or in another form as it may deem best, with
or without disclosing the trust relationship.

 

37

 

(k) To perform any and
all other acts in its judgment necessary or appropriate for the proper and
advantageous management, investment and distribution of the Trust.

 

(l) To retain any funds
or property subject to any dispute without liability for the payment of
interest, and to decline to make payment or delivery of the funds or property
until a court of competent jurisdiction makes final adjudication.

 

(m) To file all
information and tax returns required of the Trustee.

 

(n) To furnish to the
Employer and to the Plan Administrator an annual statement of account showing
the condition of the Trust Fund and all investments, receipts, disbursements
and other transactions effected by the Trustee during the Plan Year covered by
the statement and also stating the assets of the Trust held at the end of the
Plan Year, which accounts are conclusive on all persons, including the Employer
and the Plan Administrator, except as to any act or transaction concerning
which the Employer of the Plan Administrator files with the Trustee written
exceptions or objections within 90 days after the receipt of the accounts or
for which ERISA authorizes a longer period within which to object.

 

(o) To begin, maintain or
defend any litigation necessary in connection with the administration of the
Plan, except the Trustee is not obliged nor required to do so unless
indemnified to its satisfaction.

 

(B) Nondiscretionary
Trustee Designation/ Appointment of Custodian. If the Employer, in its Adoption Agreement, designates
the Trustee to administer the Trust as a nondiscretionary Trustee, then the
Trustee will not have any discretion or authority with regard to the investment
of the Trust Fund, but must act solely as a directed trustee of the funds
contributed to it. A nondiscretionary Trustee, as directed trustee of the funds
held by it under the Plan, is authorized and empowered, by way of limitation,
with the following powers, rights and duties, each of which the
nondiscretionary Trustee exercises solely as directed trustee in accordance
with the written direction of the Named Fiduciary (except to the extent a Plan
asset is subject to the control and the management of a properly appointed
Investment Manager or subject to Employer or Participant direction of investment):

 

(a) To invest any part
or all of the Trust Fund in any common or preferred stocks, open-end or
closed-end mutual funds (including proprietary funds), put and call options
traded on a national exchange, United States retirement plan bonds, corporate
bonds, debentures, convertible debentures, commercial paper, U.S. Treasury
bills, U.S. Treasury notes and other direct or indirect obligations of the
United States Government or its agencies, improved or unimproved real estate
situated in the United States, limited partnerships, insurance contracts of any
type, mortgages, notes or other property of any kind, real or personal, to buy
or sell options on common stock on a nationally recognized options exchange
with or without holding the underlying common stock, to open and to maintain
margin accounts, to engage in short sales, to buy and sell commodities,
commodity options and contracts for the future delivery of commodities, and to
make any other investments the Named Fiduciary deems appropriate.

 

(b) To retain in cash
so much of the Trust Fund as the Named Fiduciary may direct in writing to
satisfy liquidity needs of the Plan and to deposit any cash held in the Trust
Fund in a bank account at reasonable interest.

 

(c) To invest, if the
Trustee is a bank or similar financial institution supervised by the United
States or by a State, in any type of deposit of the Trustee (or of a bank
related to the Trustee within the meaning of Code §414(b)) at a reasonable rate
of interest or in a common trust fund, as described in Code §584, or in a
collective investment fund, the provisions of which govern the investment of
such assets and which the Plan incorporates by this reference, which the
Trustee (or its affiliate, as defined in Code §1504) maintains exclusively for the
collective investment of money contributed by the bank (or the affiliate) in
its capacity as trustee and which conforms to the rules of the Comptroller of
the Currency.

 

(d) To sell, contract
to sell, grant options to purchase, convey, exchange, transfer, abandon,
improve, repair, insure, lease for any term even though commencing in the
future or extending beyond the term of the Trust, and otherwise deal with all
property, real or personal, in such manner, for such considerations and on such
terms and conditions as the Named Fiduciary directs in writing.

 

(e) To credit and
distribute the Trust Fund as directed by the Plan Administrator. The Trustee is
not obliged to inquire as to whether any payee or distributee is entitled to
any payment or whether the distribution is proper or within the terms of the
Plan, or as to the manner of making any payment or distribution. The Trustee is
accountable only to the Plan Administrator for any payment or distribution made
by it in good faith on the order or the direction of the Plan Administrator.

 

(f) To borrow money, to
assume indebtedness, extend mortgages and encumber by mortgage or pledge in
accordance with and at the written direction of the Named Fiduciary.

 

(g) To have with
respect to the Trust all of the rights of an individual owner, including the
power to exercise any and all voting rights associated with Trust assets, to
give proxies, to participate in any voting trusts, mergers, consolidations or
liquidations, to tender shares and to exercise or sell stock subscriptions or
conversion rights, provided the exercise of any such powers is in accordance
with and at the written direction of the Named Fiduciary.

 

(h) To lease for oil,
gas and other mineral purposes and to create mineral severances by grant or
reservation; to pool or unitize interests in oil, gas and

 

38

 

other minerals; and to enter
into operating agreements and to execute division and transfer orders, provided
the exercise of any such powers is in accordance with and at the written
direction of the Named Fiduciary.

 

(i) To hold any
securities or other property in the name of the nondiscretionary Trustee or its
nominee, with depositories or agent depositories or in another form as the
Named Fiduciary may direct in writing, with or without disclosing the custodial
relationship.

 

(j) To retain any funds
or property subject to any dispute without liability for the payment of
interest, and to decline to make payment or delivery of the funds or property
until a court of competent jurisdiction makes final adjudication.

 

(k) To file all
information and tax returns required of the Trustee.

 

(l) To furnish to the
Named Fiduciary, the Employer and the Plan Administrator an annual statement of
account showing the condition of the Trust Fund and all investments, receipts,
disbursements and other transactions effected by the nondiscretionary Trustee
during the Plan Year covered by the statement and also stating the assets of
the Trust held at the end of the Plan Year, which accounts are conclusive on
all persons, including the Named Fiduciary, the Employer and the Plan
Administrator, except as to any act or transaction concerning which the Named
Fiduciary, the Employer or the Plan Administrator files with the nondiscretionary
Trustee written exceptions or objections within 90 days after the receipt of
the accounts or for which ERISA authorizes a longer period within which to
object.

 

(m) To begin, maintain
or defend any litigation necessary in connection with the administration of the
Plan, except the Trustee is not obliged nor required to do so unless
indemnified to its satisfaction.

 

Appointment
of Custodian. The
Employer may appoint a Custodian under the Plan, the acceptance by the
Custodian indicated on the execution page of the Adoption Agreement. If the
Employer appoints a Custodian, the Plan must have a discretionary Trustee, as
described in Section 10.03(A). A Custodian has the same powers, rights and
duties as a nondiscretionary Trustee, as described in this Section 10.03(B).
The Custodian accepts the terms of the Plan and Trust by executing the Adoption
Agreement. Any reference in the Plan to a Trustee also is a reference to a
Custodian where the context of the Plan dictates. A limitation of the Trustee’s
liability by Plan provision also acts as a limitation of the Custodian’s
liability. Any action taken by the Custodian at the discretionary Trustee’s
direction satisfies any provision in the Plan referring to the Trustee’s taking
that action.

 

Modification
of Powers/Limited Responsibility. The Employer and the nondiscretionary Trustee (or the Custodian), in
writing, may limit the powers of the Custodian or the nondiscretionary Trustee
to any combination of powers listed within this Section 10.03(B). If there is a
Custodian or a nondiscretionary Trustee under the Plan, then the Employer, in
adopting this Plan acknowledges the Custodian or the nondiscretionary Trustee
does not have any discretion with respect to the investment or the
re-investment of the Trust Fund and the Custodian or the nondiscretionary
Trustee is acting solely as a custodian or as a directed trustee with respect
to the assets comprising the Trust Fund.

 

(C) Limitation
of Powers of Certain Custodians. If a Custodian is a bank which, under its governing state law, does
not possess trust powers, then Paragraphs (a), (c) as it relates to common
trust funds or collective investment funds, (d), (f), (g) and (h) of Section
10.03(B), Section 10.17 and Article XI do not apply to that bank and that bank
only has the power and the authority to exercise the remaining powers, rights
and duties under Section 10.03(B).

 

(D) Named
Fiduciary/Limitation of Liability of Nondiscretionary Trustee or Custodian. The Named Fiduciary under the Plan has the
sole responsibility for the management and the control of the Trust Fund,
except with respect to a Plan asset under the control or the direction of a
properly appointed Investment Manager or with respect to a Plan asset properly
subject to Participant or Employer direction of investment. If the Employer
appoints a discretionary Trustee, the Named Fiduciary is the discretionary
Trustee. If the Employer appoints a Custodian, the Named Fiduciary is the
discretionary Trustee. Under a nondiscretionary Trustee designation, unless the
Employer designates in writing another person or persons to serve as Named
Fiduciary, the Named Fiduciary under the Plan is the president of a corporate
Employer, the managing partner of a partnership Employer, the managing member
of a limited liability company Employer or the sole proprietor, as appropriate.
The Named Fiduciary will exercise its management and control of the Trust Fund
through its written direction to the nondiscretionary Trustee or to the
Custodian, whichever applies to the Plan.

 

The nondiscretionary Trustee
or the Custodian does not have any duty to review or to make recommendations
regarding investments made at the written direction of the Named Fiduciary. The
nondiscretionary Trustee or the Custodian must retain any investment obtained
at the written direction of the Named Fiduciary until further directed in
writing by the Named Fiduciary to dispose of such investment. The
nondiscretionary Trustee or the Custodian is not liable in any manner or for
any reason for making, retaining or disposing of any investment pursuant to any
written direction of the Named Fiduciary. The Employer will indemnify, defend
and hold the nondiscretionary Trustee or the Custodian harmless from any
damages, costs or expenses, including reasonable attorneys’ fees, which the
nondiscretionary Trustee or the Custodian may incur as a result of any claim
asserted against the nondiscretionary Trustee, the Custodian or the Trust
arising out of the nondiscretionary Trustee’s or Custodian’s full and timely
compliance with any written direction of the Named Fiduciary.

 

(E) Participant
Loans. This Section
10.03(E) specifically authorizes the Trustee to make loans on a
nondiscriminatory basis to a Participant or to a Beneficiary in accordance with
the loan policy established by the Plan Administrator, provided: (1) the
loan policy satisfies the requirements of Section 9.04; (2) loans are
available to all

 

39

 

Participants and
Beneficiaries on a reasonably equivalent basis and are not available in a
greater amount for Highly Compensated Employees than for Nonhighly Compensated
Employees; (3) any loan is adequately secured and bears a reasonable rate
of interest; (4) the loan provides for repayment within a specified time
(however, the loan policy may suspend loan payments pursuant to Code
§414(u)(4)) or otherwise in accordance with applicable Treasury Regulations);
(5) the default provisions of the note permit offset of the Participant’s
Vested Account Balance only at the time when the Participant has a
distributable event under the Plan, but without regard to whether the
Participant consents to distribution as otherwise may be required under Section
6.01(A)(5); (6) the amount of the loan does not exceed (at the time the
Plan extends the loan) the present value of the Participant’s Vested Account
Balance; and (7) the loan otherwise conforms to the exemption provided by
Code §4975(d)(1). The loan policy may provide a Participant’s loan default is a
distributable event with respect to the defaulted amount, irrespective of
whether the Participant otherwise has incurred a distributable event at the
time of default, except as to amounts which the Participant used to secure
his/her loan which remain subject to distribution restrictions under Section
14.11 or are money purchase pension plan or target benefit plan balances which
may not be distributed in-service at the time of default. If the joint and
survivor requirements of Article VI apply to the Participant, the Participant
may not pledge any portion of his/her Account Balance as security for a loan
unless, within the 90 day period ending on the date the pledge becomes
effective, the Participant’s spouse, if any, consents (in a manner described in
Section 6.05 other than the requirement relating to the consent of a subsequent
spouse) to the security or, by separate consent, to an increase in the amount
of security.

 

A Participant who is an
Owner-Employee (including other persons described in Code §4975(f)(6)), or who
is a Shareholder-Employee may not receive a loan from the Plan, unless he/she
has obtained a prohibited transaction exemption from the DOL.

 

(F) Investment
in Qualifying Employer Securities and Qualifying Employer Real Property. The Trustee (or as applicable, Investment
Manager, Employer or Participant) may invest in qualifying Employer securities
or in qualifying Employer real property, as defined in and as limited by ERISA.
If the Employer’s Plan is a profit sharing plan, the aggregate investments in
qualifying Employer securities and in qualifying Employer real property may
exceed 10% of the value of Plan assets, unless the Employer elects in its
Adoption Agreement to restrict such investments to 10% (or to some other
percentage which is less than 100%). Notwithstanding the foregoing, except
where permitted under ERISA §407(b)(2), if the Plan includes a 401(k)
arrangement, a participant’s Deferral Contributions Account accumulated in Plan
Years beginning after December 31, 1998, including earnings thereon, may not be
invested more than 10% in qualifying employer securities and qualifying
employer real property, unless such investments are directed by the Participant
or the Participant’s Beneficiary.

 

(G) Modifications
to or Substitution of Trust. The Employer in its Standardized Adoption Agreement may not amend any
provision of Article X (or any other provision of the Plan related to the
Trust) except to specify the Trust year, the names of the Plan, the Employer,
the Trustee, the Custodian, the Plan Administrator, other fiduciaries or the
name of any pooled trust in which the Trust will participate. The Employer in
its Nonstandardized Adoption Agreement, in addition to the foregoing
amendments, may amend or override the administrative provisions of Article X
(or any other provision of the Plan related to the Trust), including provisions
relating to Trust investment and Trustee duties. Any such amendment: (1) must
not conflict with any other provisions of the Plan (except as expressly are
intended to override an existing Trust provision); (2) must not cause the
Plan to violate Code §401(a); and (3) must be made in accordance with Rev.
Proc. 2000-20 or any successor thereto. The Employer using either a
Standardized or Nonstandardized Adoption Agreement to establish its Plan,
subject to the conditions (1), (2) and (3) described above, may elect to
substitute in place of Article X and the remaining trust provisions of the
basic plan document, any other trust or custodial account agreement. All
Section 10.03(G) Trust modifications or substitutions are subject to Section
13.02 and require the written consent or signature of the Trustee.

 

(H) Cofiduciary
Liability. Each
fiduciary under the Plan is responsible solely for his/her or its own acts or
omissions. A fiduciary does not have any liability for another fiduciary’s
breach of fiduciary responsibility with respect to the Plan and the Trust
unless the fiduciary: (1) participates knowingly in or undertakes to
conceal the breach; (2) has actual knowledge of the breach and fails to
take reasonable remedial action to remedy the breach; or (3) through
negligence in performing his/her or its own specific fiduciary responsibilities
that give rise to fiduciary status, the fiduciary has enabled the other
fiduciary to commit a breach of the latter’s fiduciary responsibility.

 

10.04 RECORDS AND
STATEMENTS. The records of the Trustee pertaining to the Plan must be open
to the inspection of the Plan Administrator and the Employer at all reasonable
times and may be audited from time to time by any person or persons as the
Employer or Plan Administrator may specify in writing. The Trustee must furnish
the Plan Administrator with whatever information relating to the Trust Fund the
Plan Administrator considers necessary to perform its duties as Plan Administrator.

 

10.05 FEES AND EXPENSES
FROM FUND. A Trustee or a Custodian will receive reasonable compensation as
may be agreed upon from time to time between the Employer and the Trustee or
the Custodian. No person who is receiving full pay from the Employer may
receive compensation (except for reimbursement of Plan expenses) for services
as Trustee or as Custodian. The Trustee will pay from the Trust Fund all fees
and reasonable expenses incurred by the Plan, to the extent such fees and
expenses are for the ordinary and necessary administration and operation of the
Plan and are not “settlor expenses” as determined by the DOL unless the
Employer pays such fees and expenses. Any fee or expense paid, directly or
indirectly, by the Employer is not an Employer contribution to the Plan,
provided the fee or the expense relates to the ordinary and necessary
administration of the Trust Fund.

 

40

 

10.06 PARTIES TO
LITIGATION. Except as otherwise provided by ERISA, a Participant or a
Beneficiary is not a necessary party or required to receive notice of process
in any court proceeding involving the Plan, the Trust Fund or any fiduciary of
the Plan. Any final judgment entered in any such proceeding will be binding
upon the Employer, the Plan Administrator, the Trustee, Custodian, Participants
and Beneficiaries and upon their successors and assigns.

 

10.07 PROFESSIONAL AGENTS.
The Trustee may employ and pay from the Trust Fund reasonable compensation to
agents, attorneys, accountants and other persons to advise the Trustee as in
its opinion may be necessary. The Trustee reasonably may delegate to any agent,
attorney, accountant or other person selected by it any non-Trustee power or
duty vested in it by the Plan, and the Trustee may reasonably act or refrain
from acting on the advice or opinion of any agent, attorney, accountant or
other person so selected.

 

10.08 DISTRIBUTION OF
CASH OR PROPERTY. The Trustee will make Plan distributions in the form of
cash except where: (1) the required form of distribution is a QJSA or QPSA
which has not been waived; (2) the Plan is a restated Plan and under the
prior Plan, distribution in the form of property (“in-kind distribution”) is a
Protected Benefit (3) the Plan Administrator adopts a written policy which
provides for in-kind distribution; or (4) the Employer is terminating the
Plan, and in the reasonable judgement of the Trustee, some or all Plan assets
may not within a reasonable time for making final distribution of Plan assets,
be liquidated to cash or may not be so liquidated without undue loss in value.
The Plan Administrator’s policy under clause (3) may restrict in-kind
distributions to certain types of Trust investments or specify any other
reasonable and nondiscriminatory condition or restriction applicable to in-kind
distributions. Under clause (4), the Trustee will make Plan termination
distributions to Participants and Beneficiaries in cash, in-kind or in a
combination of these forms, in a reasonable and nondiscriminatory manner which
may take into account the preferences of the distributees. All in-kind
distributions will be made based on the current fair market value of the
property, as determined by the Trustee.

 

10.09 PARTICIPANT OR BENEFICIARY
INCAPACITATED. If, in the opinion of the Plan Administrator or of the
Trustee, a Participant or Beneficiary entitled to a Plan distribution is not
able to care for his/her affairs because of a mental condition, a physical
condition, or by reason of age, at the direction of the Plan Administrator the
Trustee may make the distribution to the Participant’s or Beneficiary’s
guardian, conservator, trustee, custodian (including under a Uniform Transfers
or Gifts to Minors Act) or to his/her attorney-in-fact or to other legal
representative upon furnishing evidence of such status satisfactory to the Plan
Administrator and to the Trustee. The Plan Administrator and the Trustee do not
have any liability with respect to payments so made and neither the Plan
Administrator nor the Trustee has any duty to make inquiry as to the competence
of any person entitled to receive payments under the Plan.

 

10.10 DISTRIBUTION
DIRECTIONS. The Trustee must promptly notify the Plan Administrator of any unclaimed
Plan distribution and then dispose of the distribution in accordance with the
Plan Administrator’s subsequent direction.

 

10.11 THIRD PARTY
RELIANCE. A person dealing with the Trustee is not obligated to see to the
proper application of any money paid or property delivered to the Trustee, or
to inquire whether the Trustee has acted pursuant to any of the terms of the
Plan. Each person dealing with the Trustee may act upon any notice, request or
representation in writing by the Trustee, or by the Trustee’s duly authorized
agent, and is not liable to any person in so acting. The certificate of the
Trustee that it is acting in accordance with the Plan is conclusive in favor of
any person relying on the certificate.

 

10.12 MULTIPLE TRUSTEES.
If more than two persons act as Trustee, a decision of the majority of such persons
controls with respect to any decision regarding the administration or the
investment of the Trust Fund or of any portion of the Trust Fund with respect
to which such persons act as Trustee. If there is more than one Trustee, the
Trustees jointly will manage and control the assets of the Trust Fund. However,
the Trustees may allocate among themselves specific responsibilities or
obligations or may authorize one or more of them, either individually or in
concert, to exercise any or all of the powers granted to the Trustee under
Article X. In addition, the signature of only one Trustee is necessary to
effect any transaction on behalf of the Trust.

 

10.13 RESIGNATION AND
REMOVAL. The Trustee or the Custodian may resign its position by giving
written notice to the Employer and to the Plan Administrator. The Trustee’s
notice must specify the effective date of the Trustee’s resignation, which date
must be at least 30 days following the date of the Trustee’s notice, unless the
Employer consents in writing to shorter notice.

 

The Employer may remove a
Trustee or a Custodian by giving written notice to the effected party. The
Employer’s notice must specify the effective date of removal which date must be
at least 30 days following the date of the Employer’s notice, except where the
Employer reasonably determines a shorter notice period or immediate removal is
necessary to protect Plan assets.

 

In the event of the
resignation or the removal of a Trustee, where no other Trustee continues to
service, the Employer must appoint a successor Trustee if it intends to
continue the Plan. If two or more persons hold the position of Trustee, in the
event of the removal of one such person, during any period the selection of a
replacement is pending, or during any period such person is unable to serve for
any reason, the remaining person or persons will act as the Trustee. If the
Employer fails to appoint a successor Trustee as of the effective date of the
Trustee resignation or removal and no other Trustee remains, the Trustee will
treat the Employer as having appointed itself as Trustee and as having filed
the Employer’s acceptance of appointment as successor Trustee with the former
Trustee. If state law prohibits the Employer from serving as successor Trustee,
the appointed successor Trustee is the president of a corporate Employer, the
managing partner of a partnership Employer, the managing member of a limited
liability

 

41

 

company Employer or the sole
proprietor, as appropriate. If the Employer removes and does not replace a
Custodian, the discretionary Trustee will assume possession of Plan assets held
by the former Custodian.

 

10.14 SUCCESSOR TRUSTEE
ACCEPTANCE. Each successor Trustee succeeds its predecessor Trustee by
accepting in writing its appointment as successor Trustee and by filing the
acceptance with the former Trustee and the Plan Administrator without the
signing or filing of any further statement. The resigning or removed Trustee,
upon receipt of acceptance in writing of the Trust by the successor Trustee,
must execute all documents and do all acts necessary to vest the title of
record in any successor Trustee. Each successor Trustee has and enjoys all of
the powers, both discretionary and ministerial, conferred under the Plan upon
its predecessor. A successor Trustee is not personally liable for any act or
failure to act of any predecessor Trustee, except as required under ERISA. With
the approval of the Employer and the Plan Administrator, a successor Trustee, with
respect to the Plan, may accept the account rendered and the property delivered
to it by a predecessor Trustee without liability.

 

10.15 VALUATION OF TRUST.
The Trustee must value the Trust Fund as of each Accounting Date to determine
the fair market value of each Participant’s Account Balance in the Trust. The
Trustee also must value the Trust Fund on such other valuation dates as
directed in writing by the Plan Administrator or as the Adoption Agreement may
require.

 

10.16 LIMITATION ON
LIABILITY - IF INVESTMENT MANAGER, ANCILLARY TRUSTEE OR INDEPENDENT FIDUCIARY
APPOINTED. The Trustee is not liable for the acts or omissions of any
Investment Manager the Plan Administrator may appoint, nor is the Trustee under
any obligation to invest or otherwise to manage any asset of the Trust Fund
which is subject to the management of a properly appointed Investment Manager.
The Plan Administrator, the Trustee and any properly appointed Investment
Manager may execute a written agreement as a part of this Plan delineating the
duties, responsibilities and liabilities of the Investment Manager with respect
to any part of the Trust Fund under the control of the Investment Manager.

 

The limitation on liability
described in this Section 10.16 also applies to the acts or omissions of any
ancillary trustee or independent fiduciary properly appointed under Section
10.18. However, if a discretionary Trustee, pursuant to the delegation
described in Section 10.18, appoints an ancillary trustee, the discretionary
Trustee is responsible for the periodic review of the ancillary trustee’s
actions and must exercise its delegated authority in accordance with the terms
of the Plan and in a manner consistent with ERISA. The Employer, the
discretionary Trustee and an ancillary trustee may execute a written agreement
as a part of this Plan delineating any indemnification agreement among the
parties.

 

10.17 INVESTMENT IN GROUP
TRUST FUND. The Employer, by adopting this Plan, specifically authorizes
the Trustee to invest all or any portion of the assets comprising the Trust
Fund in any group trust fund which at the time of the investment provides for
the pooling of the assets of plans qualified under Code §401(a). This
authorization applies solely to a group trust fund exempt from taxation under Code
§501(a) and the trust agreement of which satisfies the requirements of Revenue
Ruling 81-100, or any successor thereto. The provisions of the group trust fund
agreement, as amended from time to time, are by this reference incorporated
within this Plan and Trust. The provisions of the group trust fund will govern
any investment of Plan assets in that fund. The Employer must specify in an
Addendum to its Adoption Agreement the group trust fund(s) to which this
authorization applies. If the Trustee is acting as a nondiscretionary Trustee,
the investment in the group trust fund is available only in accordance with a
proper direction, by the Named Fiduciary, in accordance with Section 10.03(B).
Pursuant to Paragraph (c) of Section 10.03(A), a Trustee has the authority to
invest in certain common trust funds and collective investment funds without
the need for the authorizing Addendum described in this Section 10.17.

 

Furthermore, at the Employer’s
direction, the Trustee, for collective investment purposes, may combine into
one trust fund the Trust created under this Plan with the trust created under
any other qualified retirement plan the Employer maintains. However, the
Trustee must maintain separate records of account for the assets of each Trust
in order to reflect properly each Participant’s Account Balance under the
qualified plans in which he/she is a participant.

 

10.18 APPOINTMENT OF
ANCILLARY TRUSTEE OR INDEPENDENT FIDUCIARY. The Employer, in writing, may
appoint any qualified person in any state to act as ancillary trustee with
respect to a designated portion of the Trust Fund, subject to any consent
required under Section 1.33. An ancillary trustee must acknowledge in writing
its acceptance of the terms and conditions of its appointment as ancillary trustee
and its fiduciary status under ERISA. The ancillary trustee has the rights,
powers, duties and discretion as the Employer may delegate, subject to any
limitations or directions specified in the agreement appointing the ancillary
trustee and to the terms of the Plan or of ERISA. The investment powers
delegated to the ancillary trustee may include any investment powers available
under Section 10.03. The delegated investment powers may include the right to
invest any portion of the assets of the Trust Fund in a common trust fund, as
described in Code §584, or in any collective investment fund, the provisions of
which govern the investment of such assets and which the Plan incorporates by
this reference, but only if the ancillary trustee is a bank or similar
financial institution supervised by the United States or by a state and the
ancillary trustee (or its affiliate, as defined in Code §1504) maintains the
common trust fund or collective investment fund exclusively for the collective
investment of money contributed by the ancillary trustee (or its affiliate) in
a trustee capacity and which conforms to the rules of the Comptroller of the
Currency. The Employer also may appoint as an ancillary trustee, the trustee of
any group trust fund designated for investment pursuant to the provisions of
Section 10.17.

 

The ancillary trustee may
resign its position and the Employer may remove an ancillary trustee as
provided in Section 10.13 regarding resignation and removal of the Trustee or
Custodian. In the event of such resignation or removal, the Employer may
appoint another ancillary

 

42

 

trustee or may return the
assets to the control and management of the Trustee. The Employer may delegate
its responsibilities under this Section 10.18 to a discretionary Trustee under
the Plan, but not to a nondiscretionary Trustee or to a Custodian, subject to
the acceptance by the discretionary Trustee of that delegation.

 

If the DOL requires
engagement of an independent fiduciary to have control or management of all or
a portion of the Trust Fund, the Employer will appoint such independent
fiduciary, as directed by the DOL. The independent fiduciary will have the
duties, responsibilities and powers prescribed by the DOL and will exercise
those duties, responsibilities and powers in accordance with the terms,
restrictions and conditions established by the DOL and, to the extent not
inconsistent with ERISA, the terms of the Plan. The independent fiduciary must
accept its appointment in writing and must acknowledge its status as a
fiduciary of the Plan.

 

43

 

ARTICLE XI

PROVISIONS RELATING
TO INSURANCE AND INSURANCE COMPANY

 

11.01 INSURANCE BENEFIT. The Employer may
elect to provide incidental life insurance benefits for insurable Participants who
consent to life insurance benefits by executing the appropriate insurance company
application form. The Trustee will not purchase any incidental life insurance benefit
for any Participant prior to a contribution allocation to the Participant’s Account.
At an insured Participant’s written direction, the Trustee will use all or any portion
of the Participant’s Employee contributions, if any, to pay insurance premiums covering
the Participant’s life. This Section 11.01 also authorizes (except if the Plan is
a money purchase pension plan) the purchase of life insurance, for the benefit of
the Participant, on the life of a family member of the Participant or on any person
in whom the Participant has an insurable interest. However, if the policy is on
the joint lives of the Participant and another person, the Trustee may not maintain
that policy if the other person predeceases the Participant.

 

The Employer will direct the Trustee as to the
insurance company and insurance agent through which the Trustee is to purchase the
insurance contracts, the amount of the coverage and the applicable dividend plan.
Each application for a policy, and the policies themselves, must designate the Trustee
as sole owner, with the right reserved to the Trustee to exercise any right or option
contained in the policies, subject to the terms and provisions of this Plan. The
Trustee must be the named beneficiary for the Account of the insured Participant.
Proceeds of insurance contracts paid to the Participant’s Account under this Article
XI are subject to the distribution requirements of Article VI. The Trustee will
not retain any such proceeds for the benefit of the Trust.

 

The Trustee will charge the premiums on any incidental
benefit insurance contract covering the life of a Participant against the Account
of that Participant and will treat the insurance contract as a directed investment
of the Participant’s Account, even if the Plan otherwise does not permit a Participant
to direct the investment of his/her own Account. The Trustee will hold all incidental
benefit insurance contracts issued under the Plan as assets of the Trust created
and maintained under the Plan.

 

(A)  Incidental
insurance benefits. The aggregate
of life insurance premiums paid for the benefit of a Participant, at all times,
may not exceed the following percentages of the aggregate of the Employer’s contributions
(including Deferral Contributions and forfeitures) allocated to any Participant’s
Account: (i) 49% in the case of the purchase of ordinary life insurance contracts;
or (ii) 25% in the case of the purchase of term life insurance or universal life
insurance contracts. If the Trustee purchases a combination of ordinary life insurance
contract(s) and term life insurance or universal life insurance contract(s), then
the sum of one-half of the premiums paid for the ordinary life insurance contract(s)
and the premiums paid for the term life insurance or universal life insurance contract(s)
may not exceed 25% of the Employer contributions allocated to any Participant’s
Account.

 

(B)  Exception
for certain profit sharing plans. If the Plan
is a profit sharing plan, the incidental insurance benefits requirement does not apply to
the Plan if the Plan purchases life insurance benefits only from Employer contributions
accumulated in the Participant’s Account for at least two years (measured from the
allocation date).

 

(C) 
Exception for other amounts. The incidental insurance benefits
requirement does not apply to life insurance purchased with Employee contributions,
rollover contributions, or earnings on Employer contributions.

 

11.02 LIMITATION ON LIFE INSURANCE PROTECTION.
The Trustee will not continue any life insurance protection for any Participant
beyond his/her annuity starting date as defined in Section 6.01(A)(4). If the Trustee
holds any incidental benefit insurance contract(s) for the benefit of a Participant
when he/she terminates his/her employment (other than by reason of death), the Trustee
must proceed as follows:

 

(a)          If
the entire cash value of the contract(s) is Vested in the terminating Participant,
or if the contract(s) will not have any cash value at the end of the policy year
in which Separation from Service occurs, the Trustee will transfer the contract(s)
to the Participant endorsed so as to vest in the transferee all right, title and
interest to the contract(s), free and clear of the Trust; subject however, to restrictions
as to surrender or payment of benefits as the issuing insurance company may permit
and as the Plan Administrator directs;

 

(b)         If only part
of the cash value of the contract(s) is Vested in the terminating Participant, the
Trustee, to the extent the Participant’s interest in the cash value of the contract(s)
is not Vested, may adjust the Participant’s interest in the value of his/her Account
attributable to Trust assets other than incidental benefit insurance contracts and
proceed as in (a), or the Trustee must effect a loan from the issuing insurance
company on the sole security of the contract(s) for an amount equal to the difference
between the cash value of the contract(s) at the end of the policy year in which
termination of employment occurs and the amount of the cash value that is Vested
in the terminating Participant, and the Trustee must transfer the contract(s) endorsed
so as to vest in the transferee all right, title and interest to the contract(s),
free and clear of the Trust; subject however, to the restrictions as to surrender
or payment of benefits as the issuing insurance company may permit and the Plan
Administrator directs;

 

(c)          If
no part of the cash value of the contract(s) is Vested in the terminating Participant,
the Trustee must surrender the contract(s) for cash proceeds as may be available.

 

In accordance with the written direction of the Plan Administrator,
the Trustee will make any transfer of contract(s) under this Section 11.02 on the
Participant’s annuity starting date (or as soon as administratively practicable
after that date). The Trustee may not transfer any contract under this Section 11.02
which contains a method of payment not specifically authorized by Article VI or
which fails to comply with the joint and survivor annuity requirements, if applicable,
of Article VI. In this

 

44

 

regard, the Trustee either must convert such a contract to cash
and distribute the cash instead of the contract, or before making the transfer,
must require the issuing company to delete the unauthorized method of payment option
from the contract. 

 

11.03 DEFINITIONS. For purposes of this
Article XI:

 

(a)          “Policy”
means an ordinary life, term life or universal life insurance contract issued by
an insurer on the life of a Participant.

 

(b)         “Issuing insurance
company” is any life insurance company which has issued a policy upon application
by the Trustee under the terms of this Plan.

 

(c)          “Contract”
or “Contracts” means a policy of insurance. In the event of any conflict between
the provisions of this Plan and the terms of any contract or policy of insurance
issued in accordance with this Article XI, the provisions of the Plan control.

 

(d)         “Insurable Participant”
means a Participant to whom an insurance company, upon an application being submitted
in accordance with the Plan, will issue insurance coverage, either as a standard
risk or as a risk in an extra mortality classification.

 

11.04 DIVIDEND PLAN. The dividend plan is premium
reduction unless the Plan Administrator directs the Trustee to the contrary. The
Trustee must use all dividends for a contract to purchase insurance benefits or
additional insurance benefits for the Participant on whose life the insurance company
has issued the contract. Furthermore, the Trustee must arrange, where possible,
for all policies issued on the lives of Participants under the Plan to have the
same premium due date and all ordinary life insurance contracts to contain guaranteed
cash values with as uniform basic options as are possible to obtain. The term “dividends”
includes policy dividends, refunds of premiums and other credits. 

 

11.05 INSURANCE COMPANY NOT A PARTY TO AGREEMENT.
No insurance company, solely in its capacity as an issuing insurance company, is
a party to this Plan nor is the company responsible for its validity.

 

11.06 NO RESPONSIBILITY FOR OTHERS. Except as required
by ERISA, an issuing insurance company has no responsibility or obligation under
the Plan to Participants or Beneficiaries for any act (unless the insurance company
also serves in such capacities) required of the Employer, the Plan Administrator,
the Trustee, the Custodian or any other service provider to the Plan. No insurance
company, solely in its capacity as an issuing insurance company, need examine the
terms of this Plan. For the purpose of making application to an insurance company
and in the exercise of any right or option contained in any policy, the insurance
company may rely upon the signature of the Trustee and is held harmless and completely
discharged in acting at the direction and authorization of the Trustee. An insurance
company is discharged from all liability for any amount paid to the Trustee or paid
in accordance with the direction of the Trustee, and is not obliged to see to the
distribution or further application of any moneys the insurance company so pays.

 

11.07 DUTIES OF INSURANCE COMPANY. Each insurance company
must keep such records, make such identification of contracts, funds and accounts
within funds, and supply such information as may be necessary for the proper administration
of the Plan under which it is carrying insurance benefits.

 

Note:
The provisions of this Article XI are not applicable, and the Plan may not invest
in insurance contracts, if a Custodian signatory to the Adoption Agreement is a
bank which does not have trust powers from its governing state banking authority.

 

45

 

ARTICLE XII

TOP-HEAVY PROVISIONS

 

12.01 DETERMINATION OF TOP-HEAVY STATUS.
If this Plan is the only qualified plan maintained by the Employer, the Plan is
top-heavy for a Plan Year if the top-heavy ratio as of the Determination Date exceeds
60%. The top-heavy ratio is a fraction, the numerator of which is the sum of the
Account Balances of all Key Employees as of the Determination Date and the denominator
of which is a similar sum determined for all Employees.

 

The Plan Administrator must include in the top-heavy
ratio, as part of the Account Balances, any contribution not made as of the Determination
Date but includible under Code §416 and the applicable Treasury regulations, and
distributions made within the Determination Period. The Plan Administrator must
calculate the top-heavy ratio by disregarding the Account Balance (and distributions,
if any, of the Account Balance) of any Non-Key Employee who was formerly a Key Employee,
and by disregarding the Account Balance (including distributions, if any, of the
Account Balance) of an individual who has not received credit for at least one Hour
of Service with the Employer during the Determination Period. The Plan Administrator
must calculate the top-heavy ratio, including the extent to which it must take into
account distributions, rollovers and transfers, in accordance with Code §416 and
the regulations under that Code section.

 

If the Employer maintains other qualified plans
(including a simplified employee pension plan), or maintained another such plan
now terminated, this Plan is top-heavy only if it is part of the Required Aggregation
Group, and the top-heavy ratio for the Required Aggregation Group and for the Permissive
Aggregation Group, if any, each exceeds 60%. The Plan Administrator will calculate
the top-heavy ratio in the same manner as required by the first two paragraphs of
this Section 12.01, taking into account all plans within the Aggregation Group.
To the extent the Plan Administrator must take into account distributions to a Participant,
the Plan Administrator must include distributions from a terminated plan which would
have been part of the Required Aggregation Group if it were in existence on the
Determination Date. The Plan Administrator will calculate the present value of accrued
benefits under defined benefit plans or the account balances under simplified employee
pension plans included within the group in accordance with the terms of those plans,
Code §416 and the regulations under that Code section.

 

If a Participant in a defined benefit plan is a
Non-Key Employee, the Plan Administrator will determine his/her accrued benefit
under the accrual method, if any, which is applicable uniformly to all defined benefit
plans maintained by the Employer or, if there is no uniform method, in accordance
with the slowest accrual rate permitted under the fractional rule accrual method
described in Code §411(b)(1)(C). If the Employer maintains a defined benefit plan,
the Plan Administrator will use the actuarial assumptions (interest and mortality
only) stated in that plan to calculate the present value of benefits from that defined
benefit plan. If an aggregated plan does not have a valuation date coinciding with
the Determination Date, the Plan Administrator must value the Account Balance in
the aggregated plan as of the most recent valuation date falling within the twelve-month
period ending on the Determination Date, except as Code §416 and applicable Treasury
regulations require for the first and for the second plan year of a defined benefit
plan. The Plan Administrator will calculate the top-heavy ratio with reference to
the Determination Dates that fall within the same calendar year. The top-heavy provisions
of the Plan apply only for Plan Years in which Code §416 requires application of
the top-heavy rules.

 

12.02 DEFINITIONS. For purposes of applying
the top-heavy provisions of the Plan:

 

(a)          “Compensation” means Compensation as determined under
Section 3.18(b) for Code §415 purposes and includes Compensation for the entire
Plan Year.

 

(b)         “Determination
Date” means for any Plan Year, the Accounting Date of the preceding Plan Year or,
in the case of the first Plan Year of the Plan, the Accounting Date of that Plan
Year.

 

(c)          “Determination
Period” means the 5-year period ending on the Determination Date.

 

(d)         “Employer” means
the Employer that adopts this Plan and any Related Employer.

 

(e)          “Key
Employee” means, as of any Determination Date, any Employee or former Employee (or
Beneficiary of such Employee) who, at any time during the Determination Period:
(i) has Compensation in excess of 50% of the dollar amount prescribed in Code §415(b)(1)(A)
(relating to defined benefit plans) and is an officer of the Employer; (ii) has
Compensation in excess of the dollar amount prescribed in Code §415(c)(1)(A) (relating
to defined contribution plans), owns a more than 1/2% interest in the Employer and
is one of the Employees owning the ten largest interests in the Employer; (iii)
is a more than 5% owner of the Employer; or (iv) is a more than 1% owner of the
Employer and has Compensation of more than $150,000. The constructive ownership
rules of Code §318 (or the principles of that Code section, in the case of an unincorporated
Employer,) will apply to determine ownership in the Employer. The number of officers
taken into account under clause (i) will not exceed the greater of 3 or 10% of the
total number (after application of the Code §414(q) exclusions) of Employees, but
no more than 50 officers. The Plan Administrator will make the determination of
who is a Key Employee in accordance with Code §416(i)(1) and the regulations under
that Code section.

 

(f)            “Non-Key
Employee” means an Employee who does not meet the definition of Key Employee.

 

(g)         “Participant”
means any Employee otherwise eligible to participate in the Plan but who is not
entitled to receive any allocation under the Plan (or would have received a lesser
allocation) for the Plan Year because of his/her Compensation level or because of
his/her failure: (i)

 

46

 

to make elective deferrals under a 401(k) arrangement;
(ii) to make Employee contributions; or (iii) to complete 1,000 Hours of Service
or any other service requirement the Employer specifies in its Adoption Agreement
as a condition to receive an allocation except for employment on the last day of
the Plan Year.

 

(h)         “Permissive Aggregation
Group” means the Required Aggregation Group plus any other qualified plans maintained
by the Employer, but only if such group would satisfy in the aggregate the nondiscrimination
requirements of Code §401(a)(4) and the coverage requirements of Code §410. The
Plan Administrator will determine the Permissive Aggregation Group.

 

(i)             “Required
Aggregation Group” means: (i) each qualified plan of the Employer in which at least
one Key Employee participates or participated at any time during the Determination
Period (including terminated plans); and (ii) any other qualified plan of the Employer
which enables a plan described in clause (i) to meet the requirements of Code §401(a)(4)
or of Code §410.

 

12.03 TOP-HEAVY MINIMUM ALLOCATION. The
top-heavy minimum allocation requirement applies to the Plan only in a Plan Year
for which the Plan is top-heavy. If the Plan is top-heavy in any Plan Year:

 

(a)          Each
Non-Key Employee who is a Participant (as described in Section 12.02(g)) and employed
by the Employer on the last day of the Plan Year will receive a top-heavy minimum
allocation for that Plan Year.

 

(b)         The top-heavy
minimum allocation is equal to the lesser of 3% of the Non-Key Employee’s Compensation
for the Plan Year or the highest contribution rate for the Plan Year made on behalf
of any Key Employee. However, if a defined benefit plan maintained by the Employer
which benefits a Key Employee depends on this Plan to satisfy the nondiscrimination
rules of Code §401(a)(4) or the coverage rules of Code §410 (or another plan benefiting
the Key Employee so depends on such defined benefit plan), the top-heavy minimum
allocation is 3% of the Non-Key Employee’s Compensation regardless of the contribution
rate for the Key Employees.

 

(c)          If,
for a Plan Year, there are no allocations of Employer contributions or of forfeitures
for any Key Employee, the Plan does not require any top-heavy minimum allocation
for the Plan Year, unless a top-heavy minimum allocation applies because of the
maintenance by the Employer of more than one plan.

 

12.04 DETERMINING TOP-HEAVY CONTRIBUTION RATES. In determining under
Section 12.03(b) the highest contribution rate for any Key Employee, the Plan Administrator
takes into account all Employer contributions (including deferral contributions
and including matching contributions but not including Employer contributions to
Social Security) and forfeitures allocated to the Participant’s Account for the
Plan Year, divided by his/her Compensation for the entire Plan Year. For purposes
of satisfying the Employer’s top-heavy minimum allocation requirement, the Plan
Administrator disregards the elective deferrals and matching contributions allocated
to a Non-Key Employee’s Account in determining the Non-Key Employee’s contribution
rate. However, the Plan Administrator operationally may include in the contribution
rate of a Non-Key Employee any matching contributions not necessary to satisfy the
nondiscrimination requirements of Code §401(k) or of Code §401(m).

 

To determine a Participant’s contribution rate,
the Plan Administrator must treat all qualified top-heavy defined contribution plans
maintained by the Employer (or by any Related Employer) as a single plan.

 

12.05 PLAN WHICH WILL SATISFY TOP-HEAVY.
The Plan will satisfy the top-heavy minimum allocation requirement in accordance
with the following requirements:

 

(a)          If
the Employer makes the top-heavy minimum allocation to this Plan, the Employer will
make any necessary additional contribution to this Plan. The Plan Administrator
first will allocate the Employer contributions (and Participant forfeitures, if
any) for the Plan Year in accordance with the provisions of Adoption Agreement Section
3.04. The Employer then will contribute an additional amount for the Account of
any Participant entitled under Section 12.03 to a top-heavy minimum allocation and
whose contribution rate for the Plan Year, under this Plan and any other plan aggregated
under Section 12.02, is less than the top-heavy minimum allocation. The additional
amount is the amount necessary to increase the Participant’s contribution rate to
the top-heavy minimum allocation. The Plan Administrator will allocate the additional
contribution to the Account of the Participant on whose behalf the Employer makes
the contribution.

 

(b)         If the Employer
makes the top-heavy minimum allocation under another plan, this Plan does not provide
the top-heavy minimum allocation and the Plan Administrator will allocate the annual
Employer contributions (and Participant forfeitures) under the Plan solely in accordance
with the allocation method selected under Adoption Agreement Section 3.04.

 

12.06 TOP-HEAVY VESTING. If the Plan is top-heavy and the Employer
in its Adoption Agreement does not elect immediate vesting, the Employer must elect
a top-heavy (or modified top-heavy) vesting schedule. The specified top-heavy vesting
schedule applies to the Plan’s first top-heavy Plan Year and to all subsequent Plan
Years, except as the Employer otherwise elects in its Adoption Agreement. If the
Employer elects in its Adoption Agreement to apply the specified top-heavy vesting
schedule only in Plan Years in which the Plan is top-heavy, any change in the Plan’s
vesting schedule resulting from this election is subject to Section 5.11.

 

47

 

ARTICLE XIII

EXCLUSIVE BENEFIT,
AMENDMENT, TERMINATION

 

13.01 EXCLUSIVE BENEFIT. Except as provided
under Article III, the Employer does not have any beneficial interest in any asset
of the Trust Fund and no part of any asset in the Trust Fund may ever revert to
or be repaid to the Employer, either directly or indirectly; nor, prior to the satisfaction
of all liabilities with respect to the Participants and their Beneficiaries under
the Plan, may any part of the corpus or income of the Trust Fund, or any asset of
the Trust Fund, be (at any time) used for, or diverted to, purposes other than the
exclusive benefit of the Participants or their Beneficiaries and for defraying reasonable
expenses of administering the Plan.

 

However, if the Commissioner of Internal Revenue,
upon the Employer’s application for initial approval of this Plan, determines the
Trust created under the Plan is not a qualified trust exempt from Federal income
tax, then (and only then) the Trustee, upon written notice from the Employer, will
return the Employer’s contributions (and the earnings thereon) to the Employer.
The immediately preceding sentence applies only if the Employer makes the application
for the determination by the time prescribed by law for filing the Employer’s tax
return for the taxable year in which the Employer adopted the Plan, or by such later
date as the Internal Revenue Service may prescribe. The Trustee must make the return
of the Employer contribution under this Section 13.01 within one year of a final
disposition of the Employer’s request for initial approval of the Plan. The Employer’s
Plan and Trust will terminate upon the Trustee’s return of the Employer’s contributions.

 

13.02 AMENDMENT BY EMPLOYER. The Employer,
consistent with this Section 13.02 and other applicable Plan provisions, has the
right, at any time:

 

(a)          To
amend the elective provisions of the Adoption Agreement in any manner it deems necessary
or advisable;

 

(b)         To add overriding
language in the Adoption Agreement to satisfy Code §§415 or 416 because of the required
aggregation of multiple plans; and

 

(c)          To
add model amendments published by the Revenue Service (the adoption of which the
Revenue Service provides will not cause the Plan to be individually designed).

 

(A)       Amendment Formalities. The Employer must make all Plan amendments in writing by means
of substituted Adoption Agreement pages or by restatement of the Adoption Agreement.
The Employer (and Trustee if the Trustee’s written consent to the amendment is required
under Section 10.03(G)), must execute a new Adoption Agreement Execution Page each
time the Employer amends the Plan. Each amendment must specify the date as of which
the amendment is either retroactively or prospectively effective. See Section 7.12
for the effect of certain amendments adopted by the Employer which will result in
the Employer’s Plan losing Prototype Plan status.

 

(B)       Impermissible Amendment/Protected Benefits. An amendment may not authorize or permit any of the Trust Fund (other than
the part required to pay taxes and reasonable administration expenses) to be used
for or diverted to purposes other than for the exclusive benefit of the Participants
or their Beneficiaries or estates. An amendment may not cause or permit any portion
of the Trust Fund to revert to or become a property of the Employer. Furthermore,
the Employer may not make any amendment which affects the rights, duties or responsibilities
of the Trustee or of the Plan Administrator without the written consent of the affected
Trustee or the Plan Administrator.

 

An amendment (including the adoption of this Plan
as a restatement of an existing plan) may not decrease a Participant’s Account Balance,
except to the extent permitted under Code §412(c)(8), and except as provided in
Treasury regulations, may not reduce or eliminate Protected Benefits determined
immediately prior to the adoption date (or, if later, the effective date) of the
amendment. An amendment reduces or eliminates Protected Benefits if the amendment
has the effect of either (1) eliminating or reducing an early retirement benefit
or a retirement-type subsidy (as defined in Treasury regulations), or (2) except
as provided by Treasury regulations, eliminating an optional form of benefit.

 

The Plan Administrator must disregard an amendment
to the extent application of the amendment would fail to satisfy this Section 13.02(B).
If the Plan Administrator must disregard an amendment because the amendment would
violate clause (1) or clause (2), the Plan Administrator must maintain a schedule
of the early retirement option or other optional forms of benefit the Plan must
continue for the affected Participants.

 

13.03 AMENDMENT BY PROTOTYPE PLAN SPONSOR. The Prototype Plan Sponsor
(or the mass submitter, as agent of the Prototype Plan Sponsor), without the Employer’s
consent, may amend the Plan and Trust, from time to time, in order to conform the
Plan and Trust to any requirement for qualification of the Plan and Trust under
the Internal Revenue Code. The Prototype Plan Sponsor may not amend the Plan in
any manner which would modify any election made by the Employer under the Plan without
the Employer’s written consent. Furthermore, the Prototype Plan Sponsor may not
amend the Plan in any manner which would violate the proscriptions of Section 13.02(B).
If the Prototype Plan Sponsor does not adopt the amendments made by the mass submitter,
it will no longer be the sponsor of an identical or minor modifier Prototype Plan
of the mass submitter.

 

48

 

13.04 PLAN TERMINATION OR SUSPENSION. The
Employer subject to Section 13.02(B) and by proper Employer action has the right,
at any time, to suspend or discontinue its contributions under the Plan and thereafter
to continue to maintain the Plan (subject to such suspension or discontinuance)
until the Employer terminates the Plan. The Employer subject to Section 13.02(B)
and by proper Employer action has the right, at any time, to terminate this Plan
and the Trust created and maintained under the Plan. The Plan will terminate upon
the first to occur of the following:

 

(a)          The
date terminated by proper action of the Employer; or

 

(b)         The dissolution
or merger of the Employer, unless a successor makes provision to continue the Plan,
in which event the successor must substitute itself as the Employer under this Plan.
Any termination of the Plan resulting from this Paragraph (b) is not effective
until compliance with any applicable notice requirements under ERISA.

 

13.05 FULL VESTING ON TERMINATION. Upon
either full or partial termination of the Plan, or, if applicable, upon complete
discontinuance of profit sharing plan contributions to the Plan, an affected Participant’s
right to his/her Account Balance is 100% Vested, irrespective of the Vested percentage
which otherwise would apply under Article V.

 

13.06 POST TERMINATION PROCEDURE AND DISTRIBUTION.

 

(A)       General Procedure. Upon termination of the Plan, the distribution provisions of
Article VI remain operative, with the following exceptions:

 

(1)                                  if the Participant’s Vested Account Balance does not exceed $5,000
(or exceeds $5,000 but is not “immediately distributable” in accordance with Section
6.01(A)(5)), the Plan Administrator will direct the Trustee to distribute in cash
(subject to Section 10.08) the Participant’s Vested Account Balance to him/her in
lump sum as soon as administratively practicable after the Plan terminates; and

 

(2)                                  if the present value of the Participant’s Vested Account Balance
exceeds $5,000 and is immediately distributable, the Participant or the Beneficiary,
may elect to have the Trustee commence distribution in cash (subject to Section
10.08) of his/her Vested Account Balance in a lump sum as soon as administratively
practicable after the Plan terminates. If a Participant with consent rights under
this paragraph (2) does not elect an immediate lump sum distribution with spousal
consent if required, to liquidate the Trust, the Plan Administrator will purchase
a deferred annuity contract for each Participant which protects the Participant’s
distribution rights under the Plan.

 

(B)       Profit Sharing Plan. If the Plan is a profit sharing plan, in lieu of applying Section
13.06(A) and the distribution
provisions of Article VI, the Plan Administrator will direct the Trustee to distribute
in cash (subject to Section 10.08) each Participant’s Vested Account Balance, in
lump sum, as soon as administratively practicable after the termination of the Plan,
irrespective of the Participant’s Vested Account Balance, the Participant’s age
and whether the Participant consents to that distribution. This paragraph does not
apply if: (1) the Plan at termination provides an annuity option which is a Protected
Benefit and which the Employer may not eliminate by Plan amendment; or (2) as of
the period between the Plan termination date and the final distribution of assets,
the Employer maintains any other defined contribution plan (other than an ESOP).
The Employer, in an Addendum to its Adoption Agreement, may elect not to have this
paragraph apply.

 

(C)       Distribution restrictions under Code §401(k). If the Plan includes a 401(k) arrangement or if the Plan holds
transferred assets described in Section 13.07 such that in either case, the distribution
restrictions of Sections 14.03(d) and 14.11 apply, a Participant’s restricted balances
are distributable on account of Plan termination, as described in this Section 13.06,
only if: (a) the Employer does not maintain a successor plan and the Plan Administrator
distributes the Participant’s entire Vested Account Balance in a lump sum; or (b)
the Participant otherwise is entitled under the Plan to a distribution of his/her
Vested Account Balance.

 

A successor plan under clause (b) is a defined contribution
plan (other than an ESOP) maintained by the Employer (or by a Related Employer)
at the time of the termination of the Plan or within the period ending twelve months
after the final distribution of assets. However, a plan is not a successor plan
if less than 2% of the Employees eligible to participate in the terminating Plan
are eligible to participate (beginning 12 months prior to and ending 12 months after
the Plan’s termination date) in the potential successor plan.

 

(D)       “Lost Participants.” If the Plan Administrator is unable to locate any Participant
or Beneficiary whose Account becomes distributable upon Plan termination, the Plan
Administrator will apply Section 9.11 except Section 9.11(B) does not apply.

 

(E)         Continuing Trust Provisions. The Trust will continue until the Trustee in accordance with
the direction of the Plan Administrator has distributed all of the benefits under
the Plan. On each valuation date, the Plan Administrator will credit any part of
a Participant’s Account Balance retained in the Trust with its share of the Trust
net income, gains or losses. Upon termination of the Plan, the amount, if any, in
a suspense account under Article III will revert to the Employer, subject to the
conditions of the Treasury regulations permitting such a reversion. A resolution
or an amendment to discontinue all future benefit accrual but otherwise to continue
maintenance of this Plan, is not a termination for purposes of this Section 13.06.

 

13.07 MERGER/DIRECT TRANSFER. The Trustee
possesses the specific authority to enter into merger agreements or direct transfer
of assets agreements with the trustees of other retirement plans described in Code

 

49

 

§401(a), including an elective transfer, and to accept
the direct transfer of plan assets, or to transfer plan assets, as a party to any
such agreement. Except as provided in Section 13.07(A), the Trustee may not consent
to, or be a party to, any merger or consolidation with another plan, or to a transfer
of assets or liabilities to another plan (or from the other plan to this Plan),
unless immediately after the merger, consolidation or transfer, the surviving plan
provides each Participant a benefit equal to or greater than the benefit each Participant
would have received had the transferring plan terminated immediately before the
merger or the consolidation or the transfer. The Trustee will hold, administer and
distribute the transferred assets as a part of the Trust Fund and the Trustee must
maintain a separate Employer contribution Account for the benefit of the Employee
on whose behalf the Trustee accepted the transfer in order to reflect the value
of the transferred assets.

 

The Trustee may accept a direct transfer of plan
assets on behalf of an Employee prior to the date the Employee satisfies the Plan’s
eligibility conditions. If the Trustee accepts such a direct transfer of plan assets,
the Plan Administrator and the Trustee must treat the Employee as a limited Participant
as described in Section 4.04.

 

Sections 13.07(A) and (B) are effective for elective
transfers made on or following September 6, 2000. Under an elective transfer which
is made pursuant to Section 13.07(A) or (B), the Protected Benefits in the transferring
plan are not required to be preserved under Section 13.02(B), except as provided
in Section 13.07(B).

 

(A)       Distributable
Event Elective Transfer. The Trustee may consent to, or be a party to,
a merger, consolidation or transfer of assets with another qualified plan in accordance
with this Section 13.07(A).

 

A transfer between qualified plans is a distributable event elective transfer
if: (1) the Participant has a right to immediate distribution from the transferor
plan; (2) the transfer is voluntary, under a fully informed election by the Participant;
(3) the Participant has an alternative that retains his/her Protected Benefits (including
an option to leave his/her benefit in the transferor plan, if that plan is not terminating);
(4) the transferor plan satisfies applicable consent and joint and survivor annuity
requirements of the Code; (5) the amount transferred, together with the amount of
any contemporaneous direct rollover of the Participant’s remaining Vested Account
Balance, constitutes the Participant’s entire Vested Account Balance; (6) the Participant
has a 100% Vested interest in the transferred benefit in the transferee plan; and
(7) if the transfer is from this Plan to a defined benefit plan, the transferee
plan provides a benefit for the affected Participant equal to the benefit (expressed
as an annuity payable at normal retirement age) derived solely with respect to the
transferred assets.

 

An elective transfer under this Section 13.07(A)
may occur between qualified plans of any type. Any direct transfer of assets from
a defined benefit plan to this Plan which does not satisfy the requirements of this
Section 13.07(A) renders the Plan individually-designed. See Section 7.12.

 

Commencing January 1, 2002, the Trustee may not
undertake an elective transfer of a Participant’s Account under this Section 13.07(A)
if the Participant is eligible to receive an immediate distribution of his/her entire
Vested Account Balance which would consist entirely of an eligible rollover distribution
as described in Section 6.10(D).

 

(B)       Transaction/Employment Change Elective Transfer. The Trustee may consent to, or be a party to, a merger, consolidation
or transfer of assets with another qualified defined contribution plan in accordance
with this Section 13.07(B).

 

A transfer is a transaction or employment change transfer
irrespective of whether the Participant has a right to an immediate distribution
from the transferor plan provided: (1) the transfer satisfies requirements (2) and
(3) of Section 13.07(A); (2) the transfer only may occur as between plans described
in applicable Treasury regulations; (3) the transfer must occur in connection with a merger, asset
or stock acquisition, or change in employment resulting in the participant’s loss
of right to additional allocations in the transferor plan or in such other circumstances
as described in applicable Treasury regulations; (4) the transfer must consist of
the Participant’s entire Vested and non-Vested Account Balance within the transferor
plan; and (5) the transferee plan must protect the QJSA and QPSA benefits (if any)
in the transferor plan.

 

(C)       Other Transfers. Any transfer which is not an elective transfer under Sections
13.07(A) or 13.07(B) and which includes Protected Benefits is subject to Section
13.02(B). The trustee of the transferee plan in receipt of assets which are Protected
Benefits must preserve the Protected Benefits in accordance with applicable Treasury
regulations. If the transferor plan contains a 401(k) arrangement with restricted
balances as described in Section 14.11, such balances remain subject in the transferee
plan to the distribution restrictions described in Section 14.03(d). Any transfer
under this Section 13.07(C) from a defined benefit plan to this Plan must be in
the form of the transfer of a paid up individual annuity contract which guarantees
the payment of benefits in accordance with the transferor plan. Notwithstanding
any Plan language to the contrary, if this Plan is a target benefit or money purchase
pension plan, and the Trustee merges or the Employer converts by amendment the Plan
into another type of defined contribution plan, the Employer operationally may elect
whether to vest immediately the Participants’ Account Balances.

 

50

 

ARTICLE XIV

CODE SECTION
401(k) AND CODE SECTION 401(m) ARRANGEMENTS

 

14.01 APPLICATION. This Article XIV applies to the
Plan only if the Employer is maintaining its Plan under a Code §401(k) Adoption
Agreement.

 

14.02 401(k) ARRANGEMENT. The Employer under Article
III of its Adoption Agreement will elect the terms of the 401(k) arrangement as
described in Code §401(k)(2), if any, under the Plan. If the Plan is a Standardized
Plan, the 401(k) arrangement must be a salary reduction arrangement. If the Plan
is a Nonstandardized Plan, the 401(k) arrangement may be a salary reduction arrangement
or a cash or deferred arrangement, or both.

 

(A)       Salary Reduction Arrangement. If the Employer in its Adoption Agreement Section 3.01 elects
a salary reduction arrangement, a Participant (or an Employee in anticipation of
becoming a Participant) may file a salary reduction agreement with the Plan Administrator.
The salary reduction agreement may not be effective earlier than the following date
which occurs last: (1) the Participant’s Plan Entry Date (or, in the case of a reemployed
Employee, his/her re-participation date under Article II); (2) the execution date
of the Participant’s salary reduction agreement; (3) the date the Employer adopts
the 401(k) arrangement by executing the Adoption Agreement; or (4) the effective
date of the 401(k) arrangement, as specified in the Adoption Agreement.

 

A salary reduction agreement must specify the dollar amount
of Compensation or percentage of Compensation the Participant wishes to defer. The
salary reduction agreement will apply only to Compensation which becomes currently
available to the Participant after the effective date of the salary reduction agreement.
The Employer will apply a salary reduction election to the Participant’s Compensation
as determined under Section 1.07 (and to increases in such Compensation) unless
the Participant elects in his/her salary reduction agreement to limit the reduction
to certain Compensation. The Plan Administrator in the Plan’s salary reduction agreement
form, subject to the Plan terms and applicable Revenue Service guidance, will specify
additional rules and restrictions applicable to a Participant’s salary reduction
agreement.

 

(B)       Cash or Deferred Arrangement. If the Employer in its Adoption Agreement Section 3.02 elects
a cash or deferred arrangement, a Participant may elect to make a cash election
against his/her proportionate share of the Employer’s cash or deferred contribution,
in accordance with the Employer’s Adoption Agreement elections. A Participant’s
proportionate share of the Employer’s cash or deferred contribution is the percentage
of the total cash or deferred contribution which bears the same ratio that the Participant’s
Compensation for the Plan Year bears to the total Compensation of all Participants
for the Plan Year. For purposes of determining each Participant’s proportionate
share of the cash or deferred contribution, a Participant’s Compensation is his/her
Compensation as determined under Section 1.07, excluding any effect the proportionate
share may have on the Participant’s Compensation for the Plan Year. The Plan Administrator
will determine the proportionate share prior to the Employer’s actual contribution
to the Trust, to provide the Participants the opportunity to file cash elections. The Employer
will pay directly to the Participant the portion of his/her proportionate share
the Participant has elected to receive in cash.

 

(C)       Negative Election. The Employer in its Adoption Agreement may elect to apply prospectively
to its Plan the negative election provisions of this Section 14.02(C). Under a negative
election, the Employer automatically will reduce the Compensation of each Participant
who is not deferring an amount at least equal to the negative election amount, by
the required election amount, except those Participants who timely make a contrary
election under Section 14.02(C)(1). Participants deferring an amount equal to or
greater than the negative election amount are not subject to the Plan’s negative
election provisions. Amounts deferred under negative election are treated as elective
deferrals for all purposes under the Plan. An Employer in its Adoption Agreement
must elect whether the negative election applies to all Participants as of the effective
date of the negative election or only to Employees whose Plan Entry Date is on or
following the effective date of the negative election.

 

(1)          Participant’s contrary election. A Participant may at any time elect not to defer any Compensation
or to defer an amount which is less than the negative election amount (“contrary
election”). A Participant’s contrary election generally is effective as of the first
payroll period for the month which follows the Participant’s contrary election.
However, a Participant may make a contrary election which is effective: (1) for
the first payroll period in which he/she becomes a Participant if the Participant
makes a contrary election within a reasonable period following the Participant’s
Entry Date and before the Compensation to which the election applies becomes currently
available; or (2)
for the first payroll period following the effective date of the Employer’s adoption
of the negative election, if the Participant makes contrary election not later than
the effective date of the negative election. A Participant’s contrary election continues
in effect until the Participant subsequently changes his/her Salary Reduction Agreement.

 

(2) Negative election
notice. If the Employer in its Adoption Agreement adopts the negative
election provision, the Plan Administrator must provide a notice to each Eligible
Employee which explains the effect of the negative election and a Participant’s
right to make a contrary election, including the procedure and timing applicable
to the contrary election. The Plan Administrator must provide the notice to an Eligible
Employee a reasonable period prior to that Employee’s commencement of participation
in the Plan subject to the negative election. A Plan Administrator also must notify
annually those Participants then subject to the negative election of the existing
negative election deferral percentage and the Participant’s right to make a contrary
election, including the procedure and timing applicable to the contrary election.

 

(D)       Safe Harbor 401(k) Plan. The Employer in its Adoption Agreement may elect to apply to
its Plan the safe harbor provisions of this Section 14.02(D). Except as otherwise
provided in this Plan, in the Code or in other

 

51

 

applicable
guidance, an Employer must elect the safe harbor plan provisions of this Section
14.02(D) and must satisfy the applicable notice requirements prior to the beginning
of the Plan Year to which the safe harbor provisions apply. In addition, except
as otherwise indicated, the electing Employer must apply the safe harbor provisions
for the entire safe harbor Plan Year, including any short Plan Year. The provisions
of this Section 14.02(D) apply to an electing Employer notwithstanding any contrary
provision of the Plan and all other remaining Plan terms continue to apply to the
Employer’s safe harbor plan. An Employer which elects and operationally satisfies
the safe harbor provisions of this Section 14.02(D) is not subject to the nondiscrimination
provisions of Section 14.08 (ADP test). An electing Employer which provides additional
matching contributions as described in Section 14.02(D)(3) is subject to the nondiscrimination
provisions of Section 14.09 (ACP test), unless the additional matching contributions
satisfy the ACP test safe harbor described in Section 14.02(D)(3).

 

(1)          Safe Harbor - Compensation.
For purposes of this Section 14.02(D), Compensation is limited as described in Section
1.07(E) and for purposes of allocating the Employer’s safe harbor contribution and
safe harbor matching contribution, the Employer must elect under its Adoption Agreement
a nondiscriminatory definition of Compensation as described in Section 1.07(F).
An Employer in its Adoption Agreement also may elect to limit the amount of Compensation
which is subject to deferral to any reasonable definition which: (a) permits a Participant
to receive the maximum matching contribution, if any, available under the Plan;
or (b) limits deferrals under the Plan to a whole percentage or dollar amount.

 

(2)          Safe Harbor Contributions/ADP test safe harbor. An Employer which elects under this Section 14.02(D) to apply
the safe harbor provisions, must make a contribution to the Plan which will satisfy
the ADP test safe harbor (“safe harbor contribution”). The Employer in its Adoption
Agreement must elect whether the Employer will make its safe harbor contribution
in the form of: (a) a safe harbor nonelective contribution; (b) a basic matching
contribution; or (c) an enhanced matching contribution. A safe harbor nonelective
contribution is a fixed nonelective contribution in an amount the Employer elects
in its Adoption Agreement and must equal at least 3% of each Participant’s Compensation.
A basic matching contribution is a fixed matching contribution equal to 100% of
a Participant’s elective deferrals which do not exceed 3% of Compensation, plus
50% of elective deferrals which exceed 3%, but which do not exceed 5% of Compensation.
An enhanced matching contribution is a fixed matching contribution made in accordance
with any formula the Employer elects in its Adoption Agreement under which, at any
rate of elective deferrals, a Participant receives a matching contribution which
is at least equal to the match the Participant would receive under the basic matching
contribution formula and under which the rate of match does not increase as the
rate of deferrals increases. Under a basic or enhanced safe harbor match, a Highly
Compensated Employee may not receive a greater rate of match than any Nonhighly
Compensated Employee. The Employer in its Adoption Agreement must elect the applicable
time period for computing the Employer’s safe harbor basic or enhanced matching
contributions. The Plan Administrator must allocate the Employer’s safe harbor contribution
without regard to the Section 3.06 allocation conditions, but the Plan Administrator
will not allocate a safe harbor contribution where the allocation would exceed a
Participant’s Code §§415 or 402(g) limitation or where the Participant is suspended
from making deferrals under Section 14.11(A)(1). The Plan Administrator must allocate
the safe harbor contribution to all Participants unless the Employer in an Addendum
to its Adoption Agreement elects to limit the safe harbor allocation to Nonhighly
Compensated Employees. A Participant’s Account Balance attributable to safe harbor
contributions at all times 100% Vested and subject to the distribution restrictions
described in Section 14.03(d). An Employer’s safe harbor contribution is not subject
to nondiscrimination testing under Section 14.08 (ADP test) and if the safe harbor
contribution is in the form of a basic matching contribution, it is not subject
to nondiscrimination testing under Section 14.09 (ACP test). The Employer in its
Adoption Agreement must elect whether to satisfy the ACP test safe harbor Section
14.02(D)(3)(a) amount limitation with respect to the Employer’s enhanced matching
contributions or to test, using current year testing, its enhanced matching contributions
under Section 14.09 (ACP test).

 

An Employer electing Section 14.02(D) which in
its Adoption Agreement also elects to apply permitted disparity in allocating the
Employer’s nonelective contributions, may not include within the permitted disparity
formula allocation, any of the Employer’s safe harbor contributions. An Employer
in its Adoption Agreement may elect to make the safe harbor contribution to another
defined contribution plan maintained by the Employer provided: (i) the Employer
maintains its safe harbor 401(k) Plan using a Nonstandardized 401(k) Adoption Agreement;
or (ii) the Employer makes its safe harbor contribution to another defined contribution
plan paired with the Employer’s safe harbor 401(k) Plan.

 

(3)          Additional Matching Contributions/ACP
test safe harbor. An Employer which satisfies the ADP test safe harbor
under Section 14.02(D)(2), in its Adoption Agreement may elect to make matching
contributions to the Plan which are in addition to the Employer’s safe harbor contributions
and which the Employer does not use to satisfy the ADP test safe harbor (“additional
matching contributions”). The Employer in its Adoption Agreement must elect whether
to subject the additional matching contributions to the ACP test safe harbor requirements
of this Section 14.02(D)(3), or for the Plan Administrator to test, using current
year testing, the additional matching contributions for nondiscrimination under
Section 14.09 (ACP test). Under the ACP test safe harbor: (a) the Employer may not
make matching contributions with respect to a Participant’s deferral contributions
which exceed 6% of Plan Year Compensation; (b) the amount of any discretionary matching
contribution allocated to any Participant in Plan Years commencing after 1999 may
not exceed 4% of the Participant’s Plan Year Compensation; (c) the rate of matching
contributions may not increase as the rate of deferrals increases; and (d) subject
to application of any Section 3.06 allocation conditions, a Highly Compensated Employee
may not receive a greater rate of match than any Nonhighly Compensated Employee.
The Employer must elect in its Adoption Agreement the vesting schedule, allocation
conditions and distribution provisions

 

52

 

applicable to the Employer’s additional matching contributions
described in this Section 14.02(D)(3). If the Employer in its Adoption Agreement
has elected to permit Employee contributions under the Plan: (i) any Employee contributions
do not satisfy the ACP test safe harbor and the Plan Administrator must test the
Employee contributions under Section 14.09 (ACP test) using current year testing;
and (ii) if the Employer in its Adoption Agreement elects to match the Employee
contributions, the Plan Administrator in applying the 6% amount limit in clause
(a) must aggregate a Participant’s deferral contribution and Employee contributions
which are subject to the 6% limit.

 

(4)          Safe Harbor notice.
The Plan Administrator annually must provide a safe harbor notice to each Participant
a reasonable period prior to each Plan Year for which the Employer in its Adoption
Agreement has elected to apply the safe harbor provisions. For this purpose, the
Plan Administrator is deemed to provide timely notice if the Plan Administrator
provides the safe harbor notice at least 30 days and not more than 90 days prior
to the beginning of the safe harbor Plan Year. The safe harbor notice must provide
comprehensive information regarding the Participants’ rights and obligations under
the Plan and must be written in a manner calculated to be understood by the average
Participant. If an Employee becomes eligible to participate in the Plan after the
Plan Administrator has provided the annual safe harbor notice, the Plan Administrator
must provide the safe harbor notice no later than the Employee’s Plan Entry Date.
A Participant may make or modify a salary reduction agreement under the Employer’s
safe harbor 401(k) Plan for 30 days following receipt of the safe harbor notice,
or if greater, for the period the Plan Administrator specifies in the salary reduction
agreement.

 

(5)          Mid-year changes in safe harbor status. The Employer may amend its 401(k) Plan during any Plan Year to
become a safe harbor plan under this Section 14.02(D) for that Plan Year, provided:
(a) the Plan then is using current year testing; (b) the Employer amends the Plan
to add the safe harbor provisions not later than 30 days prior to the end of the
Plan Year and to apply the safe harbor provisions for the entire Plan Year; (c)
the Employer elects to satisfy the safe harbor contribution requirement using the
safe harbor nonelective contribution; and (d) the Plan Administrator provides a
notice to Participants prior to the beginning of the Plan Year for which the safe
harbor amendment may become effective, that the Employer later may amend the Plan
to a safe harbor plan for that Plan Year using the safe harbor nonelective contribution
and if the Employer so amends the Plan, the Plan Administrator will provide a supplemental
notice to Participants at least 30 days prior to the end of that Plan Year informing
Participants of the amendment. The Plan Administrator then must timely provide any
supplemental notice required under this Section 14.02(D)(5). Except as otherwise
specified, the Participant notices described in this Section 14.02(D)(5) also must
satisfy the requirements applicable to safe harbor notices under Section 14.02(D)(4).

 

The Employer may amend its safe harbor 401(k) Plan during a Plan Year to
reduce or eliminate prospectively, any safe harbor contribution which is a basic
matching or enhanced matching contribution (under Section 14.02(D)(2)) provided:
(i) the Plan Administrator provides a notice to the Participants which explains
the effect of the amendment, specifies the amendment’s effective date and informs
Participants they will have a reasonable opportunity to modify their salary reduction
agreements, and if applicable, Employee contributions; (ii) Participants have a
reasonable opportunity and period prior to the effective date of the amendment to
modify their salary reduction agreements, and if applicable, Employee contributions;
and (iii) the amendment is not effective earlier than the later of: (a) 30 days
after the Plan Administrator gives notice of the amendment; or (b) the date the
Employer adopts the amendment. An Employer which amends its safe harbor Plan to
eliminate or reduce the safe harbor matching contribution under this Section 14.02(D)(5),
or which terminates the Plan under Section 13.04 effective during the Plan Year,
must continue to apply all of the safe harbor requirements of this Section 14.02(D)
until the amendment or termination becomes effective and also must apply for the
entire Plan Year, using current year testing, the nondiscrimination test under Section
14.08 (ADP test), and if applicable, the nondiscrimination test under Section 14.09
(ACP test).

 

An Employer maintaining a profit sharing plan,
stock bonus plan or pre-ERISA money purchase pension plan may during a Plan Year
amend prospectively its Plan to become a safe harbor 401(k) plan provided: (a) the
Employer’s Plan is not a successor plan as described in Notice 98-1 or any subsequent
applicable guidance; (b) the 401(k) arrangement is in effect for at least 3 months
during the Plan Year; (c) the Plan Administrator provides the safe harbor notice
described in Section 14.02(D)(4) a reasonable time prior to and not later than the
effective date of the amendment; and (d) the Plan satisfies commencing on the effective
date of the amendment, all of the safe harbor requirements of this Section 14.02(D).

 

(E)         SIMPLE 401(k) Plan. The Employer in its Standardized Code §401(k) Adoption Agreement
may elect to apply prospectively to its Plan the SIMPLE 401(k) provisions of this
Section 14.02(E) if: (1) the Plan Year is the calendar year; (2) the Employer (including
Related Employers under Section 1.26) has no more than 100 Employees who received
Compensation of at least $5,000 in the immediately preceding calendar year; and
(3) the Employer does not maintain any other plan as described in Code §219(g)(5),
with respect to which contributions were made or benefits were accrued for Service
by an eligible Employee in the Plan Year to which the SIMPLE 401(k) provisions apply.
If an electing Employer fails for any subsequent calendar year to satisfy all of
the foregoing requirements, including where the Employer is involved in an acquisition,
disposition or similar transaction under which the Employer satisfies Code §410(b)(6)(C)(1),
the Employer remains eligible to maintain the SIMPLE 401(k) Plan for two additional
calendar years following the last year in which the Employer satisfied the requirements.
The provisions of this Section 14.02(E) apply to an electing Employer notwithstanding
any contrary provision in the Plan.

 

(1)          SIMPLE – Compensation.
For purposes of this Section 14.02(E), Compensation is limited as described in Section
1.07(E) and: (a) in the case of an Employee, means W-2 wages but increased by the
Employee’s elective

 

53

 

deferrals under a 401(k) arrangement, SIMPLE IRA, SARSEP or 403(b)
annuity; and (b) in the case of a Self Employed Individual, means Earned Income
determined without regard to contributions made to this Plan.

 

(2)          Participant deferral contributions. Each eligible Employee may enter into a salary reduction agreement
to make deferral contributions into the SIMPLE 401(k) Plan in an amount not exceeding
$6,000 per calendar year, or such other amount as in effect under Code §408(p)(2)(E).
A Participant may elect to make deferral contributions or modify a salary reduction
agreement at any time in accordance with the Plan Administrator’s SIMPLE 401(k)
salary reduction agreement form, but must be provided at least 60 days prior to
the beginning of each SIMPLE Plan Year or commencement of participation for this
purpose. A Participant also may at any time terminate prospectively, his/her salary
reduction agreement applicable to the Employer’s SIMPLE 401(k) Plan.

 

(3)          Employer SIMPLE 401(k) contributions. An Employer which elects under this Section 14.02(E) to apply
the SIMPLE 401(k) provisions, annually must make a SIMPLE 401(k) contribution to
the Plan as described in this Section 14.02(E)(3). The Employer operationally must
elect whether the Employer will contribute: (1) a matching contribution equal to
each Participant’s deferral contributions but not exceeding 3% of Plan Year Compensation
or such lower percentage as the Employer may elect under Code §408(p)(2)(C)(ii)(II);
or (2) a nonelective contribution equal to 2% of Plan Year Compensation for each
Participant whose Compensation is at least $5,000. The Employer in its Adoption
Agreement may not elect to apply any Section 3.06 allocation conditions to the Plan
Administrator’s allocation of Employer SIMPLE contributions.

 

(4)          SIMPLE 401(k) notice.
The Plan Administrator must provide notice to each Participant a reasonable period
of time before the 60th day prior to the beginning of each SIMPLE 401(k) Plan Year,
describing the Participant’s deferral election rights and the Employer’s matching
or nonelective contributions which the Employer will make for the Plan Year described
in the notice.

 

(5)          Application of remaining Plan provisions. All contributions to the SIMPLE 401(k) Plan are Annual Additions
subject to the limitations set forth in Article III. No contributions other than
those described in this Section 14.02(E) or rollover contributions described in
Section 4.04 may be made to the SIMPLE 401(k) Plan. All contributions to the SIMPLE
401(k) Plan are 100% Vested at all times and in the event of a conversion of a non
SIMPLE Plan into a SIMPLE 401(k) Plan, all Account Balances in existence on the
first day of the Plan Year to which the SIMPLE 401(k) provisions apply, become 100%
Vested. A SIMPLE 401(k) Plan is not subject to nondiscrimination testing under Section
14.08 (ADP test) or Section 14.09 (ACP test) of the Plan and is not subject to the
top heavy provisions of Article XII. Except as otherwise described in this Section
14.02(E), if an Employer has elected in its Adoption Agreement to apply the SIMPLE
401(k) provisions of this Section 14.02(E), the Plan Administrator will apply the
remaining Plan provisions to Employer’s Plan.

 

(F)         Election not
to participate. A Participant’s or Employee’s election not to participate,
pursuant to Section 2.06, includes his/her right to enter into a salary reduction
agreement or to share in the allocation of a cash or deferred contribution.

 

14.03 DEFINITIONS. For purposes of this Article XIV:

 

(a)          “Compensation”
means, except as otherwise provided in this Article XIV, Compensation as defined
for nondiscrimination purposes in Section 1.07(F).

 

(b)         “Current year
testing” means for purposes of the ADP test described in Section 14.08 and the ACP
test described in Section 14.09, the use of data from the testing year in determining
the ADP or ADP for the Nonhighly Compensated Group.

 

(c)          “Deferral
contributions” are salary reduction contributions and cash or deferred contributions
the Employer contributes to the Trust on behalf of an eligible Employee, irrespective
of whether, in the case of cash or deferred contributions, the contribution is at
the election of the Employee. For salary reduction contributions, the terms “deferral
contributions” and “elective deferrals” have the same meaning.

 

(d)         “Distribution
restrictions” means the Employee may not receive a distribution of the restricted
balances described in Section 14.11 (nor earnings on those contributions) except
in the event of: (1) the Participant’s death, Disability, Separation from Service
(which for purposes of this Section 14.03(d), means as the Plan Administrator determines
under applicable Revenue Service guidance, including the “same desk” rule and Revenue
Ruling 2000-27 with respect to certain asset sale transactions) or attainment of
age 59 1/2, (2) financial hardship satisfying Section 14.11(A), (3)  Plan termination, without establishment of a successor
defined contribution plan (other than an ESOP), (4) a sale by a corporate Employer
of substantially all of the assets (within the meaning of Code §409(d)(2)) used
in a trade or business of the Employer, to another corporation, but only to an Employee
who continues employment with the corporation acquiring those assets, or (5) a sale
by a corporate Employer of its interest in a subsidiary (within the meaning of Code
§409(d)(3)), but only to an Employee who continues employment with the subsidiary.
A distribution described in clauses (3), (4) or (5) must be a lump sum distribution,
and otherwise must satisfy Code §401(k)(10).

 

(e)          “Elective
deferrals” are all salary reduction contributions and that portion of any cash or
deferred contribution which the Employer contributes to the Plan at the election
of an eligible Employee. Any portion of a cash or deferred contribution contributed
to the Trust because of the Employee’s failure to make a cash election is an elective
deferral. However, any portion of a cash or deferred contribution over which the
Employee does not have a cash election is not an elective deferral. Elective deferrals
do not include amounts which have become currently available to the Employee prior
to the election nor amounts designated

 

54

 

as
an Employee contribution at the time of deferral or contribution. Elective deferrals
are 100% vested at all times.

 

(f)            “Eligible
Employee” means, for purposes of the ADP test described in Section 14.08, an Employee
who is eligible to enter into a salary reduction agreement for all or any portion
of the Plan Year, irrespective of whether he/she actually enters into such an agreement,
and a Participant who is eligible for an allocation of the Employer’s cash or deferred
contribution for the Plan Year. For purposes of the ACP test described in Section
14.09, an eligible Employee is a Participant who is eligible to receive an allocation
of matching contributions (or would be eligible if he/she made the type of contributions
necessary to receive an allocation of matching contributions) and a Participant
who is eligible to make Employee contributions, irrespective of whether he/she actually
makes Employee contributions. An Employee continues to be an eligible Employee during
a period the Plan suspends the Employee’s right to make elective deferrals or Employee
contributions following a hardship distribution.

 

(g)         “Employee contributions”
are nondeductible contributions made by a Participant and designated, at the time
of contribution, as an Employee contribution. Elective deferrals and deferral contributions
are not Employee contributions. Employee contributions are subject to Article IV.

 

(h)         “Highly Compensated
Employee” means an eligible Employee who satisfies the definition in Section 1.14
of the Plan.

 

(i)             “Highly
Compensated Group” means the group of eligible Employees who are Highly Compensated
Employees for the Plan Year.

 

(j)             “Matching
contributions” are contributions made by the Employer on account of elective deferrals
under a 401(k) arrangement or on account of Employee contributions. Matching contributions
also include Participant forfeitures allocated on account of such elective deferrals
or Employee contributions.

 

(k)          “Nonelective
contributions” are contributions made by the Employer which are not subject to a
deferral election by an Employee and which are not matching contributions.

 

(l)             “Nonhighly
Compensated Employee” means an eligible Employee who is not a Highly Compensated
Employee.

 

(m)       “Nonhighly Compensated
Group” means the group of eligible Employees who are Nonhighly Compensated Employees
for the Plan Year.

 

(n)         “Prior year testing”
means for purposes of the ADP test described in Section 14.08 and the ACP test described
in Section 14.09, the use of data from the Plan Year immediately prior to the testing
year in determining the ADP or ACP for the Nonhighly Compensated Group.

 

(o)         “Qualified matching
contributions” are matching contributions which are 100% Vested at all times and
which are subject to the distribution restrictions described in Section 14.03(d).
Matching contributions are not 100% Vested at all times if the Employee has a 100%
Vested interest because of his/her Years of Service taken into account under a vesting
schedule. Any matching contributions allocated to a Participant’s qualified matching
contributions Account under the Plan automatically satisfy and are subject to the
definition of qualified matching contributions.

 

(p)         “Qualified nonelective
contributions” are nonelective contributions which are 100% Vested at all times
and which are subject to the distribution restrictions described in Section 14.03(d).
Nonelective contributions are not 100% Vested at all times if the Employee has a
100% Vested interest because of his/her Years of Service taken into account under
a vesting schedule. Any nonelective contributions allocated to a Participant’s qualified
nonelective contributions Account under the Plan automatically satisfy and are subject
to the definition of qualified nonelective contributions.

 

(q)         “Regular matching
contributions” are matching contributions which are not qualified matching contributions.

 

(r)            “Safe
harbor contributions” are Employer nonelective or matching contributions which the
Plan Administrator applies to satisfy the ADP test safe harbor under Code §401(k)(12)(B)
or (C) and which are 100% Vested at all times and subject to the distribution restrictions
described in Section 14.03(d). Safe harbor contributions are not 100% Vested at
all times if the Employee has a 100% Vested interest because of his/her Years of
Service taken into account under a vesting schedule. Any nonelective contributions
allocated to a Participant’s safe harbor contributions Account, automatically satisfy
and are subject to the definition of safe harbor contributions.

 

(s)          “Salary
reduction agreement” is a written election by a Participant to make salary reduction
contributions as described in Section 14.02(A).

 

(t)            “Salary
reduction contributions” mean Employer contributions elected by a Participant to
be made from the Participant’s Compensation pursuant to a salary reduction agreement
and which the Plan Administrator must allocate to the electing Participant’s Account.

 

(u)         “Testing year”
means for purposes of the ADP test described in Section 14.08 and the ACP test described
in Section 14.09, the Plan Year for which the ADP or ACP test is being performed.

 

14.04 MATCHING CONTRIBUTIONS/  EMPLOYEE CONTRIBUTIONS. The Employer
in Adoption Agreement Section 3.01 may elect to provide matching contributions.
The Employer in Adoption Agreement Section 4.02 also may elect to permit a Participant
to make Employee contributions.

 

55

 

14.05 DEFERRAL DEPOSIT TIMING/EMPLOYER CONTRIBUTION
STATUS. The Employer must make salary reduction contributions to the Trust after
withholding the corresponding Compensation from the Participant at the earliest
date on which the contributions can reasonably be segregated from the Employer’s
general assets. Furthermore, the Employer must make to the Trust salary reduction
contributions, cash or deferred contributions, matching contributions (including
qualified matching contributions), qualified nonelective contributions, safe harbor
contributions and SIMPLE contributions no later than the time prescribed by the
Code or ERISA. Salary reduction contributions and cash or deferred contributions
are Employer contributions for all purposes under this Plan, except to the extent
the Code prohibits the use of these contributions to satisfy the qualification requirements
of the Code.

 

14.06 SPECIAL ACCOUNTING AND ALLOCATION PROVISIONS. To make allocations
under the Plan, the Plan Administrator must establish for each Participant, consistent
with the Employer’s elections under its Adoption Agreement, a deferral contributions
Account, a nonelective contributions Account, a qualified matching contributions
Account, a regular matching contributions Account, a qualified nonelective contributions
Account, a safe harbor contributions Account and a SIMPLE contributions account.

 

(A)       Deferral contributions. The Plan Administrator will allocate to each Participant’s deferral
contributions Account the amount of deferral contributions the Employer makes to
the Trust on behalf of the Participant. The Plan Administrator will make this allocation
as of the last day of each Plan Year or more frequently as it may determine to be
appropriate and consistent with the Plan terms, including those providing for allocation
of net income, gain or loss.

 

(B)       Matching contributions. The Plan Administrator will allocate the Employer’s matching
contributions as of the last day of each Plan Year or more frequently as the Plan
Administrator may determine to be appropriate and consistent with the Plan terms,
including those providing for allocation of net income, gain or loss. The Plan Administrator
may not allocate any fixed or discretionary matching contributions with respect
to deferral contributions that are excess deferrals under Section 14.07. For this
purpose: (a) excess deferrals relate first to deferral contributions for the Plan
Year not otherwise eligible for a matching contribution; and (b) if the Plan Year
is not a calendar year, the excess deferrals for a Plan Year are the last elective
deferrals made for a calendar year. The Plan Administrator may not allocate a matching
contribution to a Participant’s Account to the extent the matching contribution
exceeds the Participant’s Annual Additions limitation in Part 2 of Article III.
The provisions of Section 3.05 govern the treatment of any matching contribution
the Plan Administrator allocates contrary to this Section 14.06(B), and the Plan
Administrator will compute a Participant’s ACP under Section 14.09 by disregarding
the forfeiture.

 

(1)          Fixed match. To the extent the
Employer makes matching contributions under a fixed matching contribution formula
set forth in the Employer’s Adoption Agreement, the Plan Administrator will allocate
the matching contribution to the Account of the Participant on whose behalf the
Employer makes that contribution. A fixed matching contribution formula is a formula
under which the Employer contributes a specified percentage or dollar amount on
behalf of a Participant based on that Participant’s deferral contributions or Employee
contributions eligible for a match. The Employer may contribute on a Participant’s
behalf under a specific matching contribution formula only if the Participant satisfies
the allocation conditions for matching contributions, if any, the Employer elects
in Adoption Agreement Section 3.06. The Employer in its Adoption Agreement may elect
whether the Plan Administrator will allocate a fixed matching contribution as a
qualified matching contribution or as a regular matching contribution.

 

(2)          Discretionary match.
To the extent the Employer makes matching contributions under a discretionary formula,
the Plan Administrator will allocate the discretionary matching contributions to
the Account of each Participant who satisfies the allocation conditions, if any,
for matching contributions the Employer elects in Adoption Agreement Section 3.06.
The allocation of discretionary matching contributions to a Participant’s Account
is in the same proportion that each Participant’s deferral contributions bear to
the total deferral contributions of all Participants. If the discretionary formula
is a tiered formula, the Plan Administrator will make this allocation separately
with respect to each tier of deferral contributions, allocating in such manner the
amount of the matching contributions made with respect to that tier. The Employer
operationally may direct the Plan Administrator to allocate any discretionary match
as a regular matching contribution or as a qualified matching contribution.

 

(3)          Match on deferrals and Employee contributions. If the matching contribution formula applies both to deferral
contributions and to Employee contributions, the matching contributions apply first
to deferral contributions.

 

(C)       Qualified nonelective contributions. If the Employer operationally designates a nonelective contribution
to be a qualified nonelective contribution for the Plan Year, the Plan Administrator
will allocate that qualified nonelective contribution to the qualified nonelective
contributions Account of each Participant eligible for an allocation of that designated
contribution, as the Employer elects in Adoption Agreement Section 3.04.

 

(D)       Nonelective contributions. If the Employer makes a nonelective contribution for the Plan
Year which the Employer does not designate as a qualified nonelective contribution,
the Plan Administrator will allocate the nonelective contribution in accordance
with Adoption Agreement Section 3.04. For purposes of the nondiscrimination tests
described in Sections 14.08 (ADP test), 14.09 (ACP test) and 14.10 (multiple use
limitation), the Plan Administrator may treat nonelective contributions allocated
under this Section 14.06(D) as qualified nonelective contributions, if the contributions
otherwise

 

56

 

satisfy the definition of qualified nonelective contributions.
The Employer, to facilitate the Plan Administrator’s correction of test failures
under Sections 14.08, 14.09 and 14.10, also may make qualified nonelective contributions
to the Plan irrespective of whether the Employer in its Adoption Agreement has elected
to provide nonelective contributions.

 

(E)         Safe harbor contributions. If the Employer elects under Section 14.02(D) to apply the safe
harbor provisions to the Plan, the Employer will allocate the safe harbor contributions
to the safe harbor contributions Account of each Participant unless the Employer
in an Addendum to its Adoption Agreement elects to limit safe harbor allocations
to Nonhighly Compensated Employees.

 

(F)         SIMPLE 401(k) Plan contributions. If the Employer elects under Section 14.02(E) to apply the SIMPLE
401(k) provisions to the Plan, the Employer will allocate the SIMPLE contributions
to the SIMPLE contributions Account of Participants eligible to receive an allocation
of the Employer’s SIMPLE contribution (including Participants who make deferral
contributions), as specified in Section 14.02(E).

 

14.07 ANNUAL ELECTIVE DEFERRAL LIMITATION.

 

(A)       Annual Elective Deferral Limitation. An Employee’s elective deferrals for a calendar year may not
exceed the Code §402(g) limitation (“402(g) limitation”). The 402(g) limitation
is the greater of $7,000 or the adjusted amount determined by the Secretary of the
Treasury. If, pursuant to a salary reduction agreement or pursuant to a cash or
deferral election, the Employer determines the Employee’s elective deferrals to
the Plan for a calendar year would exceed the 402(g) limitation, the Employer will
suspend the Employee’s salary reduction agreement, if any, until the following January
1 and pay in cash the portion of a deferral election which would result in the Employee’s
elective deferrals for the calendar year exceeding the 402(g) limitation. If the
Plan Administrator determines an Employee’s elective deferrals already contributed
to the Plan for a calendar year exceed the 402(g) limitation, the Plan Administrator
will distribute the amount in excess of the 402(g) limitation (the “excess deferral”),
as adjusted for allocable income under Section 14.07(C), no later than April 15
of the following calendar year. If the Plan Administrator distributes the excess
deferral by the appropriate April 15, the excess deferral is not an Annual Addition
under Article III, and the Plan Administrator may make the distribution irrespective
of any other provision under this Plan or under the Code. The Plan Administrator
will reduce the amount of excess deferrals for a calendar year distributable to
the Employee by the amount of excess contributions (as determined in Section 14.08),
if any, previously distributed to the Employee for the Plan Year beginning in that
calendar year. Elective deferrals distributed to an Employee as excess Annual Additions
in accordance with Article III are not taken into account under the Employee’s 402(g)
limitation.

 

(B)       More than One Plan. If an Employee participates in another plan subject to the 402(g)
limitation under which he/she makes elective deferrals pursuant to a 401(k) arrangement,
elective deferrals under a SARSEP, elective contributions under a SIMPLE IRA or
salary reduction contributions to a tax-sheltered annuity (irrespective of whether
the Employer maintains the other plan), the Employee may provide to the Plan Administrator
a written claim for excess deferrals made to the Plan for a calendar year. The Employee
must submit the claim no later than the March 1 following the close of the particular
calendar year and the claim must specify the amount of the Employee’s elective deferrals
under this Plan which are excess deferrals. If the Plan Administrator receives a
timely claim, it will distribute the excess deferral (as adjusted for allocable
income) the Employee has assigned to this Plan, in accordance with the distribution
procedure described in Section 14.07(A).

 

(C)       Allocable Income. For purposes of
making a distribution of excess deferrals pursuant to this Section 14.07, allocable
income means net income or net loss allocable to the excess deferrals for the calendar
year (but not beyond the calendar year) in which the Employee made the excess deferral,
determined in a manner which is uniform, nondiscriminatory and reasonably reflective
of the manner used by the Plan Administrator to allocate income to Participants’
Accounts.

 

14.08 ACTUAL DEFERRAL PERCENTAGE (ADP) TEST.
For each Plan Year, the Plan Administrator must determine whether the Plan’s 401(k)
arrangement satisfies either of the following ADP tests:

 

(i)             The
ADP for the Highly Compensated Group does not exceed 1.25 times the ADP of the Nonhighly
Compensated Group; or

 

(ii)          The
ADP for the Highly Compensated Group does not exceed the ADP for the Nonhighly Compensated
Group by more than two percentage points (or the lesser percentage permitted by
the multiple use limitation in Section 14.10) and the ADP for the Highly Compensated
Group is not more than twice the ADP for the Nonhighly Compensated Group.

 

(A)       Calculation of
ADP. The ADP for a group is the average of the separate deferral percentages
calculated for each eligible Employee who is a member of that group. An eligible
Employee’s deferral percentage for a Plan Year is the ratio of the eligible Employee’s
deferral contributions for the Plan Year to the Employee’s Compensation for the
Plan Year. In determining the ADP, the Plan Administrator must include any Highly
Compensated Employee’s excess deferrals, as described in Section 14.07(A), to this
Plan or to any other Plan of the Employer and the Plan Administrator will disregard
any Nonhighly Compensated Employee’s excess deferrals. The Plan Administrator operationally
may include in the ADP test, qualified nonelective contributions and qualified matching
contributions the Plan Administrator does not use in the ACP test. The Plan Administrator,
under prior year testing, may include qualified nonelective contributions or qualified
matching contributions in determining the Nonhighly Compensated Employee ADP only
if the Employer makes such contribution to the Plan by the end of the testing year
and the Plan Administrator allocates the contribution to the prior Plan Year. In
determining whether the Plan’s 401(k)

 

57

 

arrangement satisfies either ADP
test, the Plan Administrator will use prior year testing, unless the Employer in
Adoption Agreement Appendices A or B elects to use current year testing. An Employer
may not change from current year testing to prior year testing except as provided
in the Code or in other applicable guidance. For the first Plan Year the Employer
permits elective deferrals and the Plan is not a successor plan (as provided in
the Code or in other applicable guidance), under prior year testing, the prior year
ADP for the Nonhighly Compensated Group is 3% unless the Employer in an Addendum
to its Adoption Agreement elects to use the actual first year ADP for the Nonhighly
Compensated Group.

 

(B)       Special aggregation rule for Highly Compensated
Employees. To determine the deferral percentage
of any Highly Compensated Employee, the Plan Administrator must take into account
any elective deferrals made by the Highly Compensated Employee under any other 401(k)
arrangement maintained by the Employer, unless the elective deferrals are to an
ESOP. If the plans containing the 401(k) arrangements have different plan years,
the Plan Administrator will determine the combined deferral contributions on the
basis of the plan years ending in the same calendar year.

 

(C)       Aggregation of certain 401(k) arrangements. If the Employer treats two or more plans as a single plan for
coverage or nondiscrimination purposes, the Employer must combine the 401(k) arrangements
under such plans to determine whether the plans satisfy the ADP test. This aggregation
rule applies to the ADP determination for all eligible Employees, irrespective of
whether an eligible Employee is a Highly Compensated Employee or a Nonhighly Compensated
Employee. An Employer may aggregate 401(k) arrangements under this Section 14.08(C)
only if the plans have the same plan years and use the same testing method. An Employer
may not aggregate an ESOP (or the ESOP portion of a plan) with a non-ESOP plan (or
non-ESOP portion of a plan). If the Employer aggregating 401(k) arrangements under
this Section 14.08(C) is using prior year testing, the Plan Administrator must adjust
the Nonhighly Compensated Group ADP for the prior year as provided in the Code or
in other applicable guidance.

 

(D)       Characterization of excess contributions. If, pursuant to this Section 14.08, the Plan Administrator has
elected to include qualified matching contributions in the ADP test, the excess
contributions are attributable proportionately to deferral contributions and to
qualified matching contributions allocated on the basis of those deferral contributions.
The Plan Administrator will reduce the amount of excess contributions for a Plan
Year distributable to a Highly Compensated Employee by the amount of excess deferrals
(as determined in Section 14.07), if any, previously distributed to that Employee
for the Employee’s taxable year ending in that Plan Year.

 

(E)         Distribution of excess contributions. If the Plan Administrator determines the Plan fails to satisfy
the ADP test for a Plan Year, the Trustee, as directed by the Plan Administrator,
must distribute the excess contributions, as adjusted for allocable income under
Section 14.08(F), during the next Plan Year. However, the Employer may incur an
excise tax with respect to the amount of excess contributions for a Plan Year not distributed
to the appropriate Highly Compensated Employees during the first 2 1/2 months of
that next Plan Year. The excess contributions are the amount of deferral contributions
made by the Highly Compensated Employees which causes the Plan to fail the ADP test.
The Plan Administrator will determine the total amount of the excess contributions
to the Plan by starting with the Highly Compensated Employee(s) who has the greatest
deferral percentage, reducing his/her deferral percentage (but not below the next
highest deferral percentage), then, if necessary, reducing the deferral percentage
of the Highly Compensated Employee(s) at the next highest deferral percentage level,
including the deferral percentage of the Highly Compensated Employee(s) whose deferral
percentage the Plan Administrator already has reduced (but not below the next highest
deferral percentage), and continuing in this manner until the ADP for the Highly
Compensated Group satisfies the ADP test.

 

After the Plan Administrator has determined the
total excess contribution amount, the Trustee, as directed by the Plan Administrator,
then will distribute to each Highly Compensated Employee his/her respective share
of the excess contributions. The Plan Administrator will determine each Highly Compensated
Employee’s share of excess contributions by starting with the Highly Compensated
Employee(s) who has the highest dollar amount of elective deferrals, reducing his/her
elective deferrals (but not below the next highest dollar amount of elective deferrals),
then, if necessary, reducing the elective deferrals of the Highly Compensated Employee(s)
at the next highest dollar amount of elective deferrals including the elective deferrals
of the Highly Compensated Employee(s) whose elective deferrals the Plan Administrator
already has reduced (but not below the next highest dollar amount of elective deferrals),
and continuing in this manner until the Trustee has distributed all excess contributions.

 

(F)         Allocable income.
To determine the amount of the corrective distribution required under this
Section 14.08, the Plan Administrator must calculate the allocable income for the
Plan Year (but not beyond the Plan Year) in which the excess contributions arose.
“Allocable income” means net income or net loss. To calculate allocable income for
the Plan Year, the Plan Administrator will use a uniform and nondiscriminatory method
which reasonably reflects the manner used by the Plan Administrator to allocate
income to Participants’ Accounts.

 

14.09 ACTUAL CONTRIBUTION PERCENTAGE (ACP) TEST. For each Plan Year,
the Plan Administrator must determine whether the annual Employer matching contributions
(other than qualified matching contributions used in the ADP test under Section
14.08), if any, and the Employee contributions, if any, satisfy either of the following
ACP tests:

 

(i) The ACP for the Highly Compensated Group does not exceed
1.25 times the ACP of the Nonhighly Compensated Group; or

 

(ii) The ACP for the Highly Compensated Group does not exceed
the ACP for the Nonhighly Compensated Group by more than two percentage

 

58

 

points
(or the lesser percentage permitted by the multiple use limitation in Section 14.10)
and the ACP for the Highly Compensated Group is not more than twice the ACP for
the Nonhighly Compensated Group.

 

(A)       Calculation of ACP. The ACP for a group is the average of the separate contribution
percentages calculated for each eligible Employee who is a member of that group.
An eligible Employee’s contribution percentage for a Plan Year is the ratio of the
eligible Employee’s aggregate contributions for the Plan Year to the Employee’s
Compensation for the Plan Year. “Aggregate contributions” are Employer matching
contributions (other than qualified matching contributions used in the ADP test
under Section 14.08) and Employee contributions (as defined in Section 14.03). The
Plan Administrator operationally may include in the ACP test, qualified nonelective
contributions and elective deferrals not used in the ADP test. The Plan Administrator,
under prior year testing, may include qualified nonelective contributions or qualified
matching contributions in determining the Nonhighly Compensated Employee ACP only
if the Employer makes such contribution to the Plan by the end of the testing year
and the Plan Administrator allocates the contribution to the prior Plan Year. In
determining whether the Plan satisfies either ACP test, the Plan Administrator will
use prior year testing, unless the Employer in Appendix A to its Adoption Agreement
elects to use the current year testing. An Employer may not change from current
year testing to prior year testing except as provided in the Code or in other applicable
guidance. For the first Plan Year the Plan permits matching contributions or Employee
contributions and the Plan is not a successor plan (as defined in the Code or in
other applicable guidance), under prior year testing, the prior year ACP for the
Nonhighly Compensated Group is 3% unless the Employer in an Addendum to its Adoption
Agreement elects to use the actual first year ACP for the Nonhighly Compensated
Group.

 

(B)       Special aggregation rule for Highly Compensated
Employees. To determine the contribution
percentage of any Highly Compensated Employee, the aggregate contributions taken
into account must include any matching contributions (other than qualified matching
contributions used in the ADP test) and any Employee contributions made on his/her
behalf to any other plan maintained by the Employer, unless the other plan is an
ESOP. If the plans have different plan years, the Plan Administrator will determine
the combined aggregate contributions on the basis of the plan years ending in the
same calendar year.

 

(C)       Aggregation of certain 401(m) arrangements. If the Employer treats two or more plans as a single for coverage
or nondiscrimination purposes, the Employer must combine the 401(m) arrangements
under such plans to determine whether the plans satisfy the ACP test. This aggregation
rule applies to the ACP determination for all eligible Employees, irrespective of
whether an eligible Employee is a Highly Compensated Employee or a Nonhighly Compensated
Employee. An Employer may aggregate 401(m) arrangements under this Section 14.09(C)
if where the plans have the same plan year and use the same testing method. An Employer
may not aggregate an ESOP (or the ESOP portion of a plan) with a non-ESOP plan (or
non-ESOP portion of a plan). If the Employer aggregating 401(m) arrangements under
this Section 14.09(C) is using prior year testing, the Plan Administrator must adjust the Nonhighly
Compensated Group ACP for the prior year as provided in the Code or in other applicable
guidance.

 

(D)       Distribution
of excess aggregate contributions. The Plan Administrator will determine
excess aggregate contributions after determining excess deferrals under Section
14.07 and excess contributions under Section 14.08. If the Plan Administrator determines
the Plan fails to satisfy the ACP test for a Plan Year, the Trustee, as directed
by the Plan Administrator, must distribute the Vested excess aggregate contributions,
as adjusted for allocable income, during the next Plan Year. However, the Employer
may incur an excise tax with respect to the amount of excess aggregate contributions
for a Plan Year not distributed to the appropriate Highly Compensated Employees
during the first 2 1/2 months of that next Plan Year. The excess aggregate contributions
are the amount of aggregate contributions allocated on behalf of the Highly Compensated
Employees which causes the Plan to fail the ACP test. The Plan Administrator will
determine the total amount of the excess aggregate contributions by starting with
the Highly Compensated Employee(s) who has the greatest contribution percentage,
reducing his/her contribution percentage (but not below the next highest contribution
percentage), then, if necessary, reducing the contribution percentage of the Highly
Compensated Employee(s) at the next highest contribution percentage level, including
the contribution percentage of the Highly Compensated Employee(s) whose contribution
percentage the Plan Administrator already has reduced (but not below the next highest
contribution percentage), and continuing in this manner until the ACP for the Highly
Compensated Group satisfies the ACP test.

 

After the Plan Administrator has determined the
total excess aggregate contribution amount, the Trustee, as directed by the Plan
Administrator, then will distribute (to the extent Vested) to each Highly Compensated
Employee his/her respective share of the excess aggregate contributions. The Plan
Administrator will determine each Highly Compensated Employee’s share of excess
aggregate contributions by starting with the Highly Compensated Employee(s) who
has the highest dollar amount of aggregate contributions, reducing the amount of
his/her aggregate contributions (but not below the next highest dollar amount of
the aggregate contributions), then, if necessary, reducing the amount of aggregate
contributions of the Highly Compensated Employee(s) at the next highest dollar amount
of aggregate contributions,  including the
aggregate contributions of the Highly Compensated Employee(s) whose aggregate contributions
the Plan Administrator already has reduced (but not below the next highest dollar
amount of aggregate contributions), and continuing in this manner until the Trustee
has distributed all excess aggregate contributions.

 

(E)         Allocable income.
To determine the amount of the corrective distribution required under this
Section 14.09, the Plan Administrator must calculate the allocable income for the
Plan Year (but not beyond the Plan Year) in which the excess aggregate contributions
arose. “Allocable income” means net income or net loss. The Plan Administrator will
determine allocable income in the same manner as described in Section 14.08(F) for
excess contributions.

 

59

 

(F)         Characterization
of excess aggregate contributions. The
Plan Administrator will treat a Highly Compensated Employee’s allocable share of
excess aggregate contributions in the following priority: (1) first as attributable
to his/her Employee contributions, if any; (2) then as matching contributions allocable
with respect to excess contributions determined under the ADP test described in
Section 14.08; (3) then on a pro rata basis to matching contributions and to the
deferral contributions relating to those matching contributions which the Plan Administrator
has included in the ACP test; and (4) last to qualified nonelective contributions
used in the ACP test. To the extent the Highly Compensated Employee’s excess aggregate
contributions are attributable to matching contributions, and he/she is not 100%
Vested in his/her Account Balance attributable to matching contributions, the Plan
Administrator will distribute only the Vested portion and forfeit the nonVested
portion. The Vested portion of the Highly Compensated Employee’s excess aggregate
contributions attributable to Employer matching contributions is the total amount
of such excess aggregate contributions (as adjusted for allocable income) multiplied
by his/her Vested percentage (determined as of the last day of the Plan Year for
which the Employer made the matching contribution).

 

14.10 MULTIPLE USE LIMITATION. If at least one Highly Compensated
Employee is includible in the ADP test under Section 14.08 and in the ACP test under
Section 14.09, the sum of the Highly Compensated Group’s ADP and ACP may not exceed
the multiple use limitation.

 

The
multiple use limitation is the sum of (i) and (ii):

 

(i) 125% of the greater of: (a) the ADP of the Nonhighly
Compensated Group for the prior Plan Year; or (b) the ACP of the Nonhighly Compensated
Group for the Plan Year beginning with or within the prior Plan Year of the 401(k)
arrangement.

 

(ii) 2% plus the lesser of (i)(a) or (i)(b), but no more
than twice the lesser of (i)(a) or (i)(b).

 

The Plan Administrator, in lieu of determining
the multiple use limitation as the sum of (i) and (ii), may elect to determine the
multiple use limitation as the sum of (iii) and (iv):

 

(iii)
125% of the lesser of: (a) the ADP of the Nonhighly Compensated Group for the prior
Plan Year; or (b) the ACP of the Nonhighly Compensated Group for the Plan Year beginning
with or within the prior Plan Year of the 401(k) arrangement.

 

(iv)
2% plus the greater of (iii)(a) or (iii)(b), but no more than twice the greater
of (iii)(a) or (iii)(b).

 

If the Employer has elected in its Adoption Agreement
to use current year testing, the multiple use limitation is calculated using the
Nonhighly Compensated Group’s current Plan Year data. The Plan Administrator will
determine whether the Plan satisfies the multiple use limitation after applying
the ADP test under Section 14.08 and the ACP test under Section 14.09 and using
the deemed maximum corrected ADP and ACP percentages in the event the Plan failed
either or both tests. If, after applying this Section 14.10, the Plan Administrator
determines the Plan has failed to satisfy the multiple use limitation, the Plan
Administrator will correct the failure by treating the excess amount as excess contributions
under Section 14.08 or as excess aggregate contributions under Section 14.09, as
the Plan Administrator determines in its sole discretion. This Section 14.10 does
not apply unless, prior to application of the multiple use limitation, the ADP and
the ACP of the Highly Compensated Group each exceeds 125% of the respective percentages
for the Nonhighly Compensated Group.

 

14.11 DISTRIBUTION RESTRICTIONS. The Employer in Adoption Agreement
Section 6.01 must elect the distribution events permitted under the Plan. The distribution
events applicable to the Participant’s deferral contributions Account, qualified
nonelective contributions Account, qualified matching contributions Account and
safe harbor contributions Account (collectively, “restricted balances”) must satisfy
the distribution restrictions described in Section 14.03(d).

 

(A)       Hardship Distributions
from Deferral Contributions Account. The Employer must elect in Adoption
Agreement Section 6.01 whether a Participant may receive hardship distribution (as
defined in Section 6.09) from his/her deferral contributions Account prior to the
Participant’s Separation from Service. A hardship distribution from the deferral
contributions Account also must satisfy the requirements of this Section 14.11(A).
A hardship distribution option may not apply to a Participant’s qualified nonelective
contributions Account, qualified matching contributions Account, nor to his/her
safe harbor contributions Account except as provided in Paragraph (2).

 

(1)          Restrictions.
The following restrictions apply to a Participant who receives a hardship
distribution from his/her deferral contributions Account: (a) the Participant may
not make elective deferrals or Employee contributions to the Plan for the 12-month
period following the date of his/her hardship distribution; (b) the distribution
may not exceed the amount of the Participant’s immediate and heavy financial need
(including any amounts necessary to pay any federal, state or local income taxes
or penalties reasonably anticipated to result from the distribution); (c) the Participant
must have obtained all distributions, other than hardship distributions, and all
nontaxable loans (determined at the time of the loan) currently available under
this Plan and all other qualified plans maintained by the Employer; and (d) the
Participant must limit elective deferrals under this Plan and under any other qualified
plan maintained by the Employer, for the Participant’s taxable year immediately
following the taxable year of the hardship distribution, to the 402(g) limitation
(as described in Section 14.07), reduced by the amount of the Participant’s elective
deferrals made in the taxable year of the hardship distribution. The suspension
of elective deferrals and Employee contributions described in clause (a) also must
apply to all other qualified plans and to all nonqualified plans of

 

60

 

deferred
compensation maintained by the Employer, other than any mandatory employee contribution
portion of a defined benefit plan, including stock option, stock purchase and other
similar plans, but not including health or welfare benefit plans (other than the
cash or deferred arrangement portion of a cafeteria plan). The Plan Administrator,
absent actual contrary knowledge, may rely on a Participant’s written representation
that the distribution is on account of hardship (as defined in Section 6.09) and
also satisfies clause (b). In addition, clause (c) regarding loans does not apply
if the loan to the Participant would increase the Participant’s hardship need.

 

(2)          Earnings. A hardship distribution
may not include earnings on an Employee’s elective deferrals credited after December
31, 1988. Qualified matching contributions and qualified nonelective contributions,
and any earnings on such contributions, credited as of December 31, 1988, are subject
to withdrawal for a hardship distribution only if the Employer in an Addendum to
its Adoption Agreement elects to permit such withdrawals. The Addendum may modify
the December 31, 1988, date for purposes of determining credited amounts, provided
the date is not later than the end of the last Plan Year ending before July 1, 1989.

 

(B)       Distributions
after Separation from Service. Following
the Participant’s Separation from Service, the distribution events applicable to
the Participant apply equally to all of the Participant’s Accounts.

 

14.12 SPECIAL ALLOCATION AND VALUATION RULES. If the 401(k) arrangement
provides for salary reduction contributions, if the Plan accepts Employee contributions,
or if the Plan allocates matching contributions as of any date other than the last
day of the Plan Year, the Employer in Adoption Agreement Sections 9.08 and 10.15 must
elect the method the Plan Administrator will apply to allocate net income, gain
or loss to such contributions made during the Plan Year and any alternative valuation
dates for the different Account types which the Plan Administrator maintains under
the Plan.

 

61

 

AMENDMENT UNDER SECTION 125 OF
THE CODE

 

Effective as of Plan Years and Limitation Years beginning
on or after January 1, 1998 or, if later, the effective date of the Plan.

 

For purposes of any definition of compensation under this Plan that includes
a reference to amounts under Section 125 of the Code, amounts under Section 125
of the Code include any amounts not available to a Participant in cash in lieu of
group health coverage because the Participant is unable to certify that he or she
has other health coverage. An amount will be treated as an amount under Section
125 of the Code only if the Employer does not request or collect information regarding
the Participant’s other health coverage as part of the enrollment process for the
health plan.

 

 

AMENDMENT TO

DEFINED CONTRIBUTION PLAN AND
TRUST

 

Effective with respect to Employers adopting this
prototype plan on or after July 1, 2002, Section 10.03(G) of the Plan is amended
in its entirety to read as follows:

 

(G)                               Modifications of Trust. The Employer in its Standardized
Adoption Agreement may not amend any provision of Article X (or any other provision
of the Plan related to the Trust) except to specify the Trust year, the names of
the Plan, the Employer, the Trustee, the Custodian, the Plan Administrator, other
fiduciaries or the name of any pooled trust in which the Trust will participate.
The Employer in its Nonstandardized Adoption Agreement, in addition to the forgoing
amendments, may amend or override the administrative provisions of Article X (or
any other provision of the Plan related to the Trust), including provisions relating
to Trust investment and Trustee duties. Any such amendment (1) must not conflict
with any other provisions of the Plan (except as expressly are intended to override
an existing Trust provision); (2) must not cause the Plan to violate Code §410(a);
and (3) must be made in accordance with Rev. Proc. 2000-20 or any successor thereto.
The Employer using either a Standardized or Nonstandardized Adoption Agreement to
establish its Plan, subject to the conditions (1), (2) and (3) described above,
may elect to substitute in place of Article X and the remaining trust provisions
of the basic plan document, any other trust or custodial account agreement that
has been approved by the IRS for use with this Plan. All Section 10.03(G) Trust
modifications or substitutions are subject to Section 13.02 and require the written
consent or signature of the Trustee.

 

Pursuant to Section 13.03 of the Plan, the mass submitter of the prototype
plan has made this amendment (as evidenced by the submission of the amendment to
the Internal Revenue Service for inclusion with the mass submitter prototype plan)
on behalf of minor modifier Prototype Plan Sponsors that received opinion letters
prior to March 1, 2002, and all identical Prototype Plan Sponsors of the mass submitter
prototype plan.Exhibit 4.15

 

EGTRRA AMENDMENT FOR 

EXCO RESOURCES, INC. EMPLOYEES SAVINGS TRUST

 

ARTICLE I 

PREAMBLE

 

1.1           Adoption
and effective date of amendment. This amendment of the plan is adopted to
reflect certain provisions of the Economic Growth and Tax Relief Reconciliation
Act of 2001 (“EGTRRA”). This amendment is intended as good faith compliance
with the requirements of EGTRRA and is to be construed in accordance with
EGTRRA and guidance issued thereunder. Except as otherwise provided, this
amendment shall be effective as of the first day of the first plan year
beginning after December 31, 2001.

 

1.2           Supersession
of inconsistent provisions. This amendment shall supersede the provisions
of the plan to the extent those provisions are inconsistent with the provisions
of this amendment.

 

ARTICLE II 

ADOPTION AGREEMENT ELECTIONS

 

2.1           Vesting Schedule for Matching Contributions

 

The vesting schedule in your plan complies with the requirements
of EGTRRA.

 

ARTICLE III 

VESTING OF MATCHING CONTRIBUTIONS

 

3.1           Applicability.
This Article shall apply to participants who have an account balance
derived from employer matching contributions as of the first day of the Plan
Year beginning after December 31, 2001.

 

3.2           Vesting
schedule. A participant’s account balance derived from employer matching
contributions shall vest as provided in Section 2.1 of this amendment.

 

ARTICLE IV 

INVOLUNTARY CASH-OUTS

 

4.1           Applicability
and effective date. If the plan provides for involuntary cash-outs of
amounts less than $5,000, this Article shall apply for distributions made
after December 31, 2001, and shall apply to all participants.

 

4.2           Rollovers
included in determining value of account balance for involuntary distributions.
For purposes of the Sections of the plan that provide for the involuntary
distribution of

 

 

vested account balances of $5,000 or less, the value of a participant’s
nonforfeitable account balance shall be determined by including that portion of
the account balance that is attributable to rollover contributions (and earnings
allocable thereto) within the meaning of Sections 402(c), 403(a)(4), 403(b)(8),
408(d)(3)(A)(ii), and 457(e)(16) of the Code. If the value of the participant’s
nonforfeitable account balance as so determined is $5,000 or less, then the
plan shall immediately distribute the participant’s entire nonforfeitable
account balance.

 

ARTICLE V 

HARDSHIP DISTRIBUTIONS

 

5.1           Applicability
and effective date. If the plan provides for hardship distributions upon
satisfaction of the safe harbor (deemed) standards as set forth in Treas. Reg. Section 1.401(k)-1(d)(2)(iv),
then this Article shall apply for calendar years beginning after 2001.

 

5.2           Suspension
period following hardship distribution. A participant who receives a
distribution of elective deferrals after December 31, 2001, on account of
hardship shall be prohibited from making elective deferrals and employee
contributions under this and all other plans of the employer for 6 months after
receipt of the distribution.

 

ARTICLE VI 

CATCH-UP CONTRIBUTIONS

 

Catch-up
Contributions. All employees who are eligible to make
elective deferrals under this plan and who have attained age 50 before the
close of the plan year shall be eligible to make catch-up contributions in
accordance with, and subject to the limitations of, Section 414(v) of
the Code. Such catch-up contributions shall not be taken into account for
purposes of the provisions of the plan implementing the required limitations of
Sections 402(g) and 415 of the Code. The plan shall not be treated as
failing to satisfy the provisions of the plan implementing the requirements of Section 401(k)(3),
401(k)(11), 401(k)(12), 410(b), or 416 of the Code, as applicable, by reason of
the making of such catch-up contributions. This provision shall apply to
contributions after December 31, 2001.

 

ARTICLE VII 

INCREASE IN COMPENSATION LIMIT

 

Increase in
Compensation Limit. The annual compensation of each
participant taken into account in determining allocations for any plan year
beginning after December 31, 2001, shall not exceed $200,000, as adjusted
for cost-of-living increases in accordance with Section 401(a)(17)(B) of
the Code. Annual compensation means compensation during the plan year or such
other consecutive 12-month period over which compensation is otherwise determined
under the plan (the determination period).

 

 

ARTICLE VIII 

PLAN LOANS

 

Plan loans for
owner-employees or shareholder-employees. If the plan
permits loans to be made to participants, then effective for plan loans made
after December 31, 2001, plan provisions prohibiting loans to any
owner-employee or shareholder-employee shall cease to apply.

 

ARTICLE IX

LIMITATIONS ON CONTRIBUTIONS (IRC SECTION 415
LIMITS)

 

9.1           Effective
date. This Section shall be effective for limitation years beginning
after December 31, 2001.

 

9.2           Maximum
annual addition. Except to the extent permitted under Article XIV of
this amendment and Section 414(v) of the Code, if applicable, the
annual addition that may be contributed or allocated to a participant’s
account under the plan for any limitation year shall not exceed the lessor of:

 

a.             $40,000,
as adjusted for increases in the cost-of-living under Section 415(d) of
the Code, or

 

b.             100
percent of the participant’s compensation, within the meaning of Section 415(c)(3) of
the Code, for the limitation year.

 

The
compensation limit referred to in b. shall not apply to any contribution for
medical benefits after separation from service (within the meaning of Section 401(h) or
Section 419A(f)(2) of the Code) which is otherwise treated as an
annual addition.

 

ARTICLE X 

MODIFICATION OF TOP-HEAVY RULES

 

10.1         Effective
date. This Article shall apply for purposes of determining whether the
plan is a top-heavy plan under Section 416(g) of the Code for plan
year beginning after December 31, 2001, and whether the plan satisfies the
minimum benefits requirements of Section 416(c) of the Code for such
years. This Article amends the top-heavy provisions of the plan.

 

10.2         Determination
of top-heavy status.

 

10.2.1      Key
employee. Key employee means any employee or former employee (including any
deceased employee) who at any time during the plan year that includes the
determination date was an officer of the employer having annual compensation
greater than $130,000 (as adjusted under Section 416(I)(1) of the
Code for plan years beginning after December

 

 

31, 2002), a 5-percent owner of the employer, or a 1-percent owner of
the employer having annual compensation of more than $150,000. For this
purpose, annual compensation means compensation within the meaning of Section 415(c)(3) of
the Code. The determination of who is a key employee will be made in accordance
with Section 416(I)(1) of the Code and the applicable regulations and
other guidance of general applicability issued thereunder.

 

10.2.2      Determination
of present values and amounts. This Section 10.2.2 shall apply for
purposes of determining the present values of accrued benefits and the amounts
of account balances of employees as of the determination date.

 

a.             Distributions
during year ending on the determination date. The present values of accrued
benefits and the amounts of account balances of an employee as of the
determination date shall be increased by the distributions made with respect to
the employee under the plan and any plan aggregated with the plan under Section 416(g)(2) of
the Code during the 1-year period ending on the determination date. The
preceding sentence shall also apply to distributions under a terminated plan
which, had it not been terminated, would have been aggregated with the plan
under Section 416(g)(2)(A)(i) of the Code. In the case of a
distribution made for a reason other than separation from service, death, or
disability, this provision shall be applied by substituting “5-year period” for
“1-year period.”

 

b.             Employees
not performing services during year ending on the determination date. The
accrued benefits and accounts of any individual who has not performed services
for the employer during the 1-year period ending on the determination date
shall not be taken into account.

 

10.3         Minimum
benefits.

 

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

 

10.3.2      Contributions
under other plans. The employer may provide, in an addendum to this
amendment, that the minimum benefit requirement shall be met in another plan
(including another plan that consists solely of a cash or deferred arrangement
which meets the requirements of Section 401(k)(12) of the Code and
matching contributions with respect to which the requirements of Section 401(m)(11)
of the Code are met). The addendum should include the name of the other plan,
the minimum benefit that will be provided under such other plan, and the
employees who will receive the minimum benefit under such other plan.

 

 

ARTICLE XI 

DIRECT ROLLOVERS

 

11.1         Effective
date. This Article shall apply to distributions made after December 31,
2001.

 

11.2         Modification
of definition of eligible retirement plan. For purposes of the direct
rollover provisions of the plan, an eligible retirement plan shall also mean an
annuity contract described in Section 403(b) of the Code and an
eligible plan under Section 457(b) of the Code which is maintained by
a state, political subdivision of a state, or any agency or instrumentality of
a state or political subdivision of a state and which agrees to separately
account for amounts transferred into such plan from this plan. The definition
of eligible retirement plan shall also apply in the case of a distribution to a
surviving spouse, or to a spouse who is the alternate payee under a qualified
domestic relation order, as defined in Section 414(p) of the Code.

 

11.3         Modification
of definition of eligible rollover distribution to exclude hardship distributions.
For purposes of the direct rollover provisions of the plan, any amount that is
distributed on account of hardship shall not be an eligible rollover
distribution and the distributee may not elect to have any portion of such
a distribution paid directly to an eligible retirement plan.

 

11.4         Modification
of definition of eligible rollover distribution to include after-tax employee
contributions. For purposes of the direct rollover provisions in the plan,
a portion of a distribution shall not fail to be an eligible rollover
distribution merely because the portion consists of after-tax employee
contributions which are not includible in gross income. However, such portion may be
transferred only to an individual retirement account or annuity described in Section 408(a) or
(b) of the Code, or to a qualified defined contribution plan described in Section 401(a) or
403(a) of the Code that agrees to separately account for amounts so
transferred, including separately accounting for the portion of such
distribution which is includible in gross income and the portion of such
distribution which is not so includible.

 

ARTICLE XII 

ROLLOVERS FROM OTHER PLANS

 

Rollovers from
other plans. The employer, operationally and on a
nondiscriminatory basis, may limit the source of rollover contributions
that may be accepted by this plan.

 

 

ARTICLE XIII 

REPEAL OF MULTIPLE USE TEST

 

Repeal of
Multiple Use Test. The multiple use test described in
Treasury Regulation Section 1.401(m)-2 and the plan shall not apply for
plan years beginning after December 31, 2001.

 

ARTICLE XIV 

ELECTIVE DEFERRALS

 

14.1         Elective
Deferrals – Contribution Limitation. No participant shall be permitted to
have elective deferrals made under this plan, or any other qualified plan
maintained by the employer during any taxable year, in excess of the dollar
limitation contained in Section 402(g) of the Code in effect for such
taxable year, except to the extent permitted under Article VI of this
amendment and Section 414(v) of the Code, if applicable.

 

14.2         Maximum
Salary Reduction Contributions for SIMPLE plans. If this is a SIMPLE 401(k)
plan, then except to the extent permitted under Article VI of this
amendment and Section 414(v) of the Code, if applicable, the maximum
salary reduction contribution that can be made to this plan is the amount
determined under Section 408(p)(2)(A)(ii) of the Code for the
calendar year.

 

14.3         Limitation
on amount. In addition to those imposed by the Code, an employee’s deferral
contributions are subject to a maximum elective deferral amount of 50% of
compensation.

 

ARTICLE XV 

SAFE HARBOR PLAN PROVISIONS

 

Modification
of Top-Heavy Rules. The top-heavy requirements of Section 416
of the Code and the plan shall not apply in any year beginning after December 31,
2001, in which the plan consists solely of a cash or deferred arrangement which
meets the requirements of Section 401(k)(12) of the Code and matching
contributions with respect to which the requirements of Section 401(m)(11)
of the Code are met.

 

ARTICLE XVI 

DISTRIBUTION UPON SEVERANCE OF EMPLOYMENT

 

16.1         Effective
date. This Article shall apply for distributions and transactions made
after December 31, 2001, regardless of when the severance of employment
occurred.

 

16.2         New
distributable event. A participant’s elective deferrals, qualified nonelective
contributions, qualified matching contributions, and earnings attributable to
these contributions shall be distributed on account of the participant’s
severance from

 

 

employment. However, such a distribution shall 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.

 

This amendment
has been executed this 10th day of October, 2002. 

 

EXCO Resources, Inc.

 

 

	
  /s/ T. W.
  Eubank

  	
   

  	
   

  
	
  T. W. Eubank, President

  	
   

  	
   

  
	
   

  	
   

  
	
  EXCO
  Resources, Inc. Employees Savings Trust

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